Lords Sitting of 4 February 1969

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

KENT COAL MINES
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the policy of the National Coal Board in relation to the Kent coal mines.]
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): My Lords, if the Kent coalfield can produce at an acceptable level of cost, the National Coal Board see no reason why total production should not remain at about the current level, as there are markets available for the coal. At present, it is only at Chislet that results are such as to put the future of the pit in jeopardy, and the unions have been informed. There have been difficulties at Tilmanstone in connection with water pollution, but the National Coal Board have recently announced that they are to spend a substantial sum on constructing a pipeline to carry the surplus water to the sea.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I thank the noble Lord for that reply. Could he say how soon the Coal Board will know when we have an acceptable level of cost?—because there appears to be a great deal of uncertainty regarding the Kent coalfield, and men have been leaving the coalfields.
LORD STONHAM: My Lords, the Kent coalfield has lost money every year since nationalisation, and last year it lost £1·7 million, which was its greatest loss. My first Answer made clear that production is continuing, and so far as the four collieries in the Kent coalfield are concerned the National Coal Board have no plans for the closure of Tilmanstone, Betteshanger and Snowdown. The only doubt is with regard to the future of Chislet. No firm decision has yet been taken, but its prospects will be reviewed when the results of the period ending next March are known.

TURNHOUSE AIRPORT DISPUTE
2.37 p.m.
LORD KILMANY: 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 progress has been made towards settling the dispute which has caused B.E.A. to withdraw all services to and from Turnhouse aerodrome.]
LORD BESWICK: My Lords, B.E.A. were able to restore their services to Dyce

3
on Thursday, January 30, and restored the Edinburgh services from yesterday morning.
Her Majesty's Government are hopeful that discussions now taking place will lead to a satisfactory ending to this dispute, which has inflicted such serious inconvenience to passengers and could have caused damage to the Scottish economy.
LORD KILMANY: My Lords, while welcoming the setting up of the Working Party, and wishing it well in its efforts, may I ask the noble Lord why it was not set up sooner? Is it not a fact that this dispute could have been foreseen, and indeed was foreseen, some little time ago? Is the noble Lord aware that there is much resentment at the dilatory handling of this matter by Her Majesty's Government?
LORD BESWICK: My Lords, I hope the noble Lord will forgive me if I say that it is always easier to say that these things could have been settled more easily if one has no responsibility for their settlement. This was a complicated matter. We now have three different kinds of authorities for aerodromes, and getting some sort of standardised and uniform rates throughout the aerodrome industry is not easy.
LORD TREFGARNE: My Lords, could the noble Lord say what progress has been made in transferring the control, or at least the management, of Turnhouse Aerodrome to the British Airports Authority?
LORD BESWICK: No, my Lords. That is a quite separate Question, and if the noble Lord will put it down, I will try to give him an Answer.
BARONESS HORSBRUGH: My Lords, could the noble Lord say why so many lightning strikes took place, and why people were even taken off aeroplanes at the last moment, when they were all ready to go, and yet nothing was done until B.E.A. shut the whole place?
LORD BESWICK: My Lords, the reason there were so many lightning strikes was that the workers concerned thought this was the best way of bringing their alleged grievances to the general notice. There was some criticism of B.E.A. for closing down; but, in the end,
4
I think the noble Baroness will perhaps agree that this did enable us to get, not of course a conclusion, because we have not yet concluded the matter, but to get together to see whether we could work out a proper agreement.
LORD STRATHCLYDE: My Lords, is it not a fact that this dispute arose because those at Edinburgh Airport receive less remuneration than those summarily employed at other airports? Why should there not be a level of remuneration suitable to all airports?
LORD BESWICK: My Lords, there are now three different authorities for aerodromes. We have the British Airports Authority. There are the local authorities which are aerodrome owners; and there are other aerodromes which are under the control and ownership of the Board of Trade. Different conditions and factors exist at all these airports. Some have pension arrangements, and some have not. As I have said, trying to get fair play all round is a complicated question and I hope that the Working Party will come up with a satisfactory Report.
LORD BALFOUR OF INCHRYE: My Lords, while I admit that an industrial difference did exist, was it not vindictive of the leaders of these unofficial strikes to wait until an aircraft was actually overhead, and then strike so that the aircraft could not land? Surely, such conduct as that cannot be condoned in any industrial dispute.
LORD BESWICK: My Lords, I note what the noble Lord says, but I do not think I should be helping the sort of atmosphere that we want if I started calling some of the parties to the Working Party that is now set up vindictive.
LORD TREFGARNE: My Lords, is it not possible to amend the service contracts of these gentlemen to prevent them from taking action which is prejudicial to the safety of the aircraft?
LORD BESWICK: My Lords, it may well be that if we tried to do something like that it would cause even greater trouble in the future.
THE EARL OF DUNDONALD: My Lords, can the Minister say why British United Airways managed to maintain their services, and why B.E.A. could not?
LORD BESWICK: My Lords, I am not aware of the difficulty here, but I should have thought it was possibly because they had fewer services and were able to look after their passengers with fewer personnel.
THE EARL OF SELKIRK: My Lords, can the noble Lord say whether the safety of aircraft was ever endangered or whether it was only a case of gross inconvenience to passengers?
LORD BESWICK: My Lords, I should have said that the decision of B.E.A. to suspend services had in mind both factors: both the inconvenience to passengers and the question of safety.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, can the noble Lords say which authority controls Dyce Airport, Aberdeen?
LORD BESWICK: My Lords, both Dyce and Turnhouse, as I understand it, are Board of Trade responsibilities.

RHODESIA
2.44 p.m.
LORD SILKIN: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is holding up the continuation of the negotiations with Rhodesia.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, Her Majesty's Government have made it clear to Mr. Smith and his colleagues, and also to the Commonwealth Prime Ministers at their recent Meeting, that the "Fearless" proposals remain on the table. They have also made it clear that it is for Mr. Smith to make the next move.
LORD SILKIN: My Lords, in view of the great importance of this matter, is it really necessary that we should stand on our dignity? Surely it is much more important to come to a settlement than to decide who takes the next move.
LORD SHEPHERD: My Lords, I am surprised that the noble Lord, with his knowledge of this matter, is not himself
6
aware of the repeated initiatives that have been taken by Her Majesty's Government to seek a settlement. We have made many proposals to the Smith regime. They have been rejected, and no alternative proposals have been put in their place.
LORD GRIMSTON OF WESTBURY: My Lords, may we take it from the noble Lord's reply that Her Majesty's Government do wish for a settlement, or are they just prepared to leave matters as they are?
LORD SHEPHERD: My Lords, Her Majesty's Government desire a settlement, but to get a settlement there need to be two parties, and, as I have said, the other party have not yet been willing to put alternative proposals to us if they, as they do now, reject our own.
LORD BYERS: My Lords, would the noble Lord not agree that it is not just a settlement that is wanted, but a settlement that is just to all the citizens of Rhodesia?
LORD SHEPHERD: And also honourable, my Lords.
LORD SILKIN: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what were the matters still unresolved in the most recent negotiations with Rhodesia.]
LORD SHEPHERD: My Lords, my right honourable friend the Minister without Portfolio made a Statement in another place on November 18 last. It was not repeated in your Lordships' House since this House was not then sitting. The Statement was long and detailed, so for the convenience of your Lordships I will circulate it In the OFFICIAL REPORT.
LORD SILKIN: My Lords, that is not very helpful to me in putting a supplementary. Should I be right in saying that the only issue between the parties is the additional safeguard which Her Majesty's Government have been insisting upon; namely, the question of an appeal to the Privy Council?
LORD SHEPHERD: My Lords, I hope my noble friend will not think it is the

7
duty of a Minister to make available opportunities for supplementary questions, but if my noble friend will look at the Statement that was made by my right honourable friend he will see that, apart from the point that he has just referred to, which is perhaps the most important, there are at least six or seven other points to which we attach great importance and to which we have not been able to find a solution.
LORD BROCKWAY: My Lords, may I ask my noble friend this question? Is not the difficulty here that Mr. Smith is insisting that any safeguard shall be within the Parliament elected by a minority of the people, and does not all experience show that such a safeguard would be ineffective once a Government obtains independence?
LORD SHEPHERD: My Lords, I believe it is the will and desire of certain of the main political Parties in this country that any safeguard should be a real safeguard. This is what we are seeking to achieve, but so far we have not been able to achieve it.
LORD SALTOUN: My Lords, may I ask Her Majesty's Government whether it has ceased to be the duty of Her Majesty's Government to answer a Starred Question which has been properly put by the permission of the House? Has it ceased to be a duty to provide an Answer?
LORD SHEPHERD: My Lords, I have a duty, clearly, to answer Questions that are on the Order Paper, but I think I also have to take into account the convenience of your Lordships' House. As I said, this was a long, detailed Statement. I will lay it in the OFFICIAL REPORT and there will then be an opportunity for any noble Lord to raise further questions.
Following is the Statement referred to:
"As my right hon. Friend the Prime Minister informed the House on 1st November, I left for Salisbury on that date to assist in the consideration by Mr. Smith and his colleagues of the proposals for a settlement which we put to them on board H.M.S. 'Fearless' set out in Command 3793.
"I was in Salisbury from 2nd to 9th November; and again from 13th to 16th November after visiting Zambia, Malawi, Uganda, Tanzania and Kenya and having conversations with the Heads of State of these countries.
"While in Salisbury, my delegation and I held nine full-scale meetings with Mr. Smith and certain of his colleagues and advisers, in addition to a number of informal exchanges of view. No time limit was set for my visit and I left only when both sides were agreed that no useful purpose could be served by my staying longer.
"Together with my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, I saw representatives of many different sections of Rhodesian opinion, ranging from Mr. Nkomo and Mr. Sithole to the Chairman of the Rhodesian Front.
"Throughout my talks with Mr. Smith I stood firmly by the 'Fearless' proposals, and I made it clear to him at all times that any settlement must be fully consistent with the six principles. Some progress was made on certain points, on the basis accepted on both sides that agreement on them would be contingent on an overall agreement being reached.
"But this measure of understanding was overshadowed by the number and weight of the points on which we were not able to reach even a contingent agreement of that kind. Mr. Smith and I agreed that we had reached a stage where it would be right for the public to know the facts about what still divided us and what, after prolonged talks, we had found ourselves unable to resolve. I also listed to Mr. Smith the items which I told him I felt obliged to explain to the House. I think that the House has a right to know these and I apologise for taking up time by giving them in detail.
"The first of these was, of course, a second safeguard for unimpeded progress to majority rule and against retrogressive amendments of the Constitution. We made it clear in the Fearless' White Paper that we were prepared to consider alternative methods to achieve this, although we believe that the Judicial Committee of the Privy Council would provide the best instrument.
"I must emphasise that, to be acceptable to us, any alternative method must be fully as effective as that provided by the Judicial Committee. Mr. Smith, however, showed no interest in the other forms of judicial safeguards mentioned by my right hon. Friend the Prime Minister in this House on 22nd October.
"In these circumstances, I put forward a further alternative proposal for a second safeguard of a different character, which would not only begin in Rhodesia but would also leave the last word with the Rhodesian people. Under this proposal the Judicial Committee of the Privy Council would have the task of deciding whether a proposed amendment was of such a kind that the second safeguard should be brought into operation. This question would only come before the Judicial Committee on an initiative either by an agreed number of members of the Rhodesian Parliament, or by the Constitutional Council in Rhodesia.
"If the Judicial Committee considered that the second safeguard should be brought into operation, my proposal would then place fairly and squarely in the hands of the people

9
of Rhodesia themselves, including the African majority, the responsibility and the power to decide whether the amendment should be proceeded with in the Rhodesian Parliament or not. They would take this decision in a referendum of the A and B roll electors voting separately.
"This seemed to me both to provide the necessary safeguard for the first and second principles and to avoid the objection which had been raised against our earlier proposal—namely, that it placed the final responsibility for what was in essence a political decision in the hands of a judicial body which did not form part of the political system of Rhodesia. But Mr. Smith told me that he totally rejected the principle on which this alternative proposal was based. I asked Mr. Smith whether he had any proposals of his own for a second guarantee. But he had none to offer.
"This is a fundamental point of difference between us. But it is not by any means the only important issue of principle on which we differ.
"For example, there is the question of the jurisdiction of the Judicial Committee of the Privy Council sitting as an ordinary court of law, as opposed to acting as a second safeguard. Mr. Smith and his colleagues would not commit themselves to agree to the Judicial Committee of the Privy Council continuing, as in the 1961 Constitution, to hear appeals in such cases.
"Other major disagreements also remain. The chief of them, taken in the order of the Fearless' proposals to which they relate, are as follows.
"First, the regime wish to extend the period under the 1961 Constitution for which the legislature can approve the proclamation of a State of Emergency. This, as the House will know, is a period of three months at a time.
"Hon. Members in all part of the House sill share our deep concern over a proposal which would mean lengthening the period for which Rhodesian citizens would be held in detention without charge or trial, and without the Rhodesian Parliament having the opportunity to scrutinise the need for the State of Emergency and, if it thought proper, to end it.
"Secondly, the régime wish to alter the composition of the legislature as proposed in the 'Fearless' document. While accepting a blocking quarter of directly and popularly elected Africans, the régime wanted either fewer elected Africans in the Senate or else more A roll seats in the Lower House and more European seats in the Senate. Again, we could not accept this.
"Thirdly, the régime wished to balance an extension—as in both the 'Tiger' and 'Fearless' proposals—of the B roll franchise by an alteration of the present arrangements for cross-voting. Their suggestion was that the proposed extension of the B roll franchise should be accompanied by a reduction in the existing value of B roll votes cast in elections in A roll scats. That value is at present 25 per cent. Their proposal was that it should be reduced to 10 per cent.
"This may seem to be a complex and technical issue. But its essence, I ought to explain to the House, is that it would postpone the date when majority rule might conic about. Obviously, we could not agree to such a proposal.
"Fourthly, the régime wished to eliminate the 'delimitation' formula which is also included in both the 'Tiger' and 'Fearless' propopsals. This provides that as the number of Africans on the A roll increases, the Africans' chances of capturing A roll seats should increase proportionately.
"Fifthly, the regime wished to extend the criteria which the Judicial Tribunal should apply when considering whether detainees and restrictees should be released to take part in the Test of Acceptability. The 'Fearless' proposals already cover cases where the Tribunal is satisfied that the person concerned would himself be likely to commit, or to incite or conspire with others to commit, acts of violence or intimidation.
"This is an adequate safeguard for the preservation of public order. The régime wanted to add to this case where, without any guilt on the part of the individual concerned, others might respond with violence to his release. This again, we could not agree to.
"Sixthly, there were important differences between us over the treatment of, those Rhodesian public servants who, since I.D.I., have felt bound to leave Rhodesia in order to remain loyal to the Crown. We felt that, as part of the necessary process of wiping the slate clean, if a settlement were reached they should have the choice of reinstatement or compensation. Mr. Smith said that he could not possibly agree to their reinstatement, although compensation was another matter.
"Each of these points, taken individually, is important. But more significant still is that all of them taken together indicate that the régime are not at this stage ready to commit themselves to the necessity of accepting majority rule except in an impossibly remote and indefinite future.
"I do not want to be unfair to Mr. Smith on these points. He did say that he believed that if it were possible to reach agreement on the question of the second safeguard our differences on the other points which I have mentioned could be quickly resolved. That may or may not be so. In so far as Mr. Smith meant that he would expect us to give way on them, I made it absolutely clear to him that there could be no question of our doing so. I cannot speak for his own readiness to change his position on them. I can only tell the House, as I have sought to do, the position he took on them when talking to me.
"To sum up, my discussion with Mr. Smith showed, in the words of a Press statement issued before I left Salisbury, that there remains fundamental disagreement on several major matters of principle. We both felt that a prolongation of my stay would not enable us to resolve that disagreement. So I have come back to report to my colleagues and to the House how things stand.
"Nevertheless, the proposals in our 'Fearless' White Paper and the alternative suggestion in the second safeguard which I put to Mr. Smith in Salisbury remain on the table for consideration, for discussion and, I would hope, for acceptance when reflection in Rhodesia has brought wiser counsel. Meanwhile, of course, sanctions will continue, together with all the other consequences that have flowed from illegality.
"My report, I recognise, is a gloomy one. I myself found the last fortnight disappointing and saddening. So fair an opportunity has been turned down that, I am afraid, I could not feel otherwise. But to repeat what I have said before: we for our part are not slamming the door, and perhaps one day the response from the other side of that door will be more constructive than it has so far been."

FOREIGN COMPENSATION BILL
2.48 p.m.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD CHALFONT): My Lords, I beg to move that this Bill be now read a second time. The primary purpose of the Bill is to enable assets in this country of persons formerly resident, or carrying on business in the Baltic States and in certain other territories, ceded to the Soviet Union by Finland, Poland, Czechoslovakia and Rumania during and after the Second World War (and described in the Bill as the "ceded territories") to enable these assets to be disposed of so that compensation can be paid for losses suffered by British persons and interests in those regions. The Bill is the final stage in a somewhat complicated series of events extending over nearly thirty years and, if it is to be seen in perspective, I must ask the House to bear with me while I go over a little of the history concerning the former Baltic States from which by far the greater part both of the assets and of the claims arises.
In the summer of 1940 the Baltic States came under considerable Soviet pressure and to a large extent ceased to be free agents. In July of that year far-reaching measures of nationalisation were passed and British property in the Baltic States was seized without compensation. The United Kingdom Government of the day protested to the Baltic Governments against these measures and, when the Soviet State Bank tried to secure possession of the gold held by the central banks in London, the gold was blocked by Her Majesty's Government under wartime
12
powers in order, as was made clear at the time, to safeguard British interests. In August, 1940, the Baltic States were formally incorporated in the U.S.S.R. and their Governments ceased to exist. At the same time their central banks were absorbed into the Soviet banking system and responsibility for the external debts of the Baltic States was repudiated, including three external loans—the Riga Loan, the Estonian Loan and the Vilna Loan—all of which had been raised in the City of London. In the following year, 1941, the Baltic States were overrun by the Germans and both the gold and other assets in this country came under the Trading with the Enemy legislation.
At the end of the war, after the reoccupation of the area by the U.S.S.R., the Soviet Government, who were recognised by Her Majesty's Government as the de facto but not the de jure Government of the region, put forward claims to the gold on the basis of purchase, and the assets on the ground that, as a matter of municipal law in those areas, the Soviet-controlled enterprises had become the successors of the former Baltic concerns. Her Majesty's Government, on the other hand, were claiming from the Soviet Government, as the de facto Government of the area, compensation in respect of the British interests which had been dispossessed, and this was the substance of the dispute. Many years of diplomatic correspondence ensued and it was not until 1959 that the then British Administration and Soviet Government agreed to hold negotiations to cover the various claims and counter-claims. The choice at that time was either to proceed by way of negotiation with the only Government in the area, with the prospect at the end of some sort of off-setting arrangement; or to leave the assets inviolate, and by the same token to leave the British claims unsatisfied, for an indefinite period, by which I mean until such day as Baltic States might again emerge, with whom the question could be discussed. A third possibility was to distribute the assets unilaterally; but to have done so would have involved accepting a considerable risk of retaliation. The British Government at that time, that is, 1959, chose to enter into negotiations with the U.S.S.R. and, with their clear duty to the British claimants, I do not see how they could have done otherwise.

13
To prepare for the detailed negotiations, an Order in Council was made in 1959 providing for the registration of claims by the Foreign Compensation Commission and our claims were then submitted to the Soviet Government. It was not, however, until 1965, six years later, after Her Majesty's present Government had taken office, that it was possible to begin detailed negotiations. Neither side accepted liability as a matter of law and progress towards agreement on the existence and value of the assets claimed on either side was slow. The principal asset claimed by the Soviet Government was of course the gold, the weight of which was known to them and which when it was sold in June, 1967, realised £5·8 million. In all, the Soviet side were claiming £10 million. The British side were claiming £15 million, including some arrears of interest, but I must emphasise—and this may be an important point in your Lordships' consideration of the Bill—that this represents simply the sum of the values put upon their claims by the individual claimants themselves and perhaps some of them were, as sometimes happens in these cases, somewhat inflated. Certainly the Soviet side thought so.
By the end of 1966 we were convinced that the only hope of breaking the deadlock was to seek agreement on a basis which would mean that each side, without admitting liability, would undertake not to pursue its claim against the other. This the Soviet Government would not accept, and in monetary terms the respective positions of the two sides were still far apart. But during Mr. Kosygin's visit to this country early in 1967, agreement was reached and announced on February 12, on the basis that each side undertook not to pursue further its claims, but with the payment by the British Government, out of the assets, of the sum of £500,000 in the form of consumer goods additional to Russian net purchases under the current five-year trade agreement. The settlement preserved the point of principle that we did not recognise Soviet title to any part of the assets and it remains our position that the Soviet Government is recognised as the de facto but not the de jure Government of the area. In the Government's view the payment to the Soviet Government of this small proportion of the assets which we hold was a necessary but worthwhile con
14
cession to achieve a negotiated agreement, which would give a firm legal basis for their distribution and avoid the risk of the repercussions which would certainly have followed on a decision to distribute them on a unilateral basis.
The settlement of February 12, 1967, provided for the formulation of the terms of the settlement and this led, not without further difficulty, to the Anglo-Soviet Agreement of January 5, 1968, to which reference is made in the preamble to this Bill. Many noble Lords will be familiar with the terms of this Agreement and I do not think that it is necessary for me to go through them in detail. By Article 2, the Soviet Government undertook not to pursue its claims to assets in this country with which we are concerned in this Bill; and by Article 3 the Soviet Government is to be solely responsible for the settlement of claims by its nationals. Article 5 contains the provisions about the payment of £500,000 into a special account with the Bank of England one week after signature of the Agreement.
All this is the background to the Bill which is before us to-day. The primary purpose of the Bill is contained in Clause 1 and in subsection (2) of Clause 2. The broad effect is quite simple. Clause 1 would enable the Custodian to pay over to the Foreign Compensation Commission proceeds of assets which are "former property" of a Baltic State or ceded territory. The expression "former property of a Baltic State or ceded territory" has to be read in the light of the definition in Clause 3, subsection (1) on page 4, lines 8 to 27 of the Bill. It will be observed that the definition includes income which has accrued on such property. Subsection (5) of Clause 1 provides for the payment into the Exchequer of the £500,000 needed to recoup the Exchequer for the payment already made to the Soviet Government under the terms of the Agreement. In addition, there is to be a payment under subsection (4) of Clause 1 from the Board of Trade Vote of a sum not exceeding the income which has accrued from these assets since February 12, 1967, and has been paid into the Exchequer. This amounted to about £170,000. Subsection (2) of Clause 2 enables an Order in Council to be made empowering the Foreign Compensation Commission to determine claims and pay compensation to the

15
successful claimants. This, as I have said, is the primary purpose of the Bill.
The Bill has also the subsidiary purpose of making four amendments to the Foreign Compensation Act 1950 which experience has shown to be desirable. Your Lordships will find these in Clause 2. The first two such amendments are contained in subsections (1) and (3) of the clause which have the effect of broadening the scope of the Act of 1950, especially as it affects Section 3. First of all, by virtue of subsection (1) of Clause 2, it would be possible to use the Foreign Compensation Commission should there be a question of distributing compensation paid by a Commonwealth Government. At present, the scope of the Commission's work is limited to settlements with foreign countries other than Commonwealth Governments. No such compensation settlement with any Commonwealth Government is in fact in prospect at the moment, but it is not out of the question that one might arise and this Amendment would then have a useful effect, for the Commission would have it in its power to deal with that matter.
The second extension of the Foreign Compensation Commission's powers, which is contemplated, is contained in subsection (3) of Clause 2 which would enable an Order in Council to be made for the registration of claims not only when negotiations with other Governments are already in contemplation but also in anticipation of such negotiations. Your Lordships will appreciate that it is sometimes convenient to get the necessary information recorded, without waiting for the other Government concerned to indicate its willingness to negotiate. Subsection (5) would make another small amendment. Its effect is to provide that Section 2(3) of the 1950 Act shall cease to have effect. This subsection provided for the appointment by a Commonwealth Government of additional members to the Foreign Compensation Commission for the purpose of determining applications for compensation received by the United Kingdom Government on behalf of Commonwealth nationals. It was only used once many years ago and the United Kingdom is highly unlikely in future to negotiate on behalf of the nationals of other Commonwealth countries. It is therefore pro
16
posed that that subsection shall cease to have effect. The subsection as it stands is in any case defective in that it enumerates the Governments of those Commonwealth countries which were independent in 1950, and has not since been brought up to date.
Now, my Lords, I come to Clause 2(4). This deals with the fourth amendment, and it is the section which was added during the passage of the Bill in another place. If some of the comment and correspondence in the Press is to be believed there has been a good deal of misunderstanding about this clause. The amendment has been occasioned by the majority judgment delivered on December 17 by your Lordships, sitting in a judicial capacity, in the case of Anisminic Ltd. v. The Foreign Compensation Commission and Another. This judgment has serious implications for the future work of the Foreign Compensation Commission.
It was provided in Section 4, subsection (4), of the Foreign Compensation Act 1950 that:
"The determination by the, Commission of any application made to them under this Act shall not be called in question in any court of law".
This provision was approved at the time without any controversy at all. The then Lord Chancellor explained in this House that the task of the Commission was to "decide, and decide finally", applications for compensation made to it. Parliament's intention in this respect was reaffirmed in 1958 when, during the passage of the Tribunals and Inquiries Act, an Amendment was made in Committee in another place so as to exclude the Foreign Compensation Commission from the operation of certain sections in view of its special character. In the recent judgment of your Lordships' House, to which I have referred, a declaration was upheld that the Commission's Provisional Determination was a nullity. Reversing the Court of Appeal, the majority in your Lordships' House found that the courts were entitled to review the Commission's interpretation of the relevant Order on the ground that the Commission had misconstrued it and had therefore exceeded its jurisdiction, with the result that its determination was a nullity and was therefore not protected from judicial review by Section 4(4) of the Act of 1950.

17
But in practice, of course, the Commission cannot avoid interpreting the Orders under which it carries out the distributions entrusted to it. This judgment would therefore make it possible, contrary to what the Government believe to have been the intention of Parliament, for the Commission's determinations, made in perfectly good faith and after the most careful deliberation, to be challenged in a wide range of cases. The consequences of this, as I am sure your Lordships appreciate, would be most unfortunate. The task of the Commission, which is of a special character, is to determine claims and to arrange for distribution on a rate-able basis to successful claimants, of what are nearly always finite "lump sums" either received in the form of cash from foreign Governments, or in some cases raised by the disposal of foreign assets in this country, such as those to be made available under Clause 1 of this Bill.
Until all obligations, or at any rate all those of any substance or magnitude, have been disposed of, it is impossible for the Commission to judge with any degree of certainty what will be the share attributable to each successful application and so to pay anything like a final dividend or perhaps any worthwhile dividend at all to them. If there is to be a risk that their determinations may be challenged in the courts and perhaps taken right up to your Lordships' House, the claimants, who have usually already been waiting for a very long time—nearly thirty years, in the case or most of those affected, for instance, by the distribution contemplated by this Bill—may well have to wait a further substantial period before they can touch their awards or at any rate the greater part of them. There is, obviously, another way out of this theoretically. If the Commission were to distribute the funds as expeditiously as possible without having any regard to the risk of successful litigation, judgment might be given against them after the relevant Fund had been exhausted. I think it is obvious at once that this would be bound to bring up the difficult problem of how to satisfy the judgment, and it would certainly lead to pressure for the successful litigant to be paid out of public funds, whereas I think there will be no argument that the source of compensation should be the foreign Govern
18
ment concerned and not the British taxpayer.
We believe, therefore, that Clause 2(4) reaffirms the original intention of Parliament, which was, on strictly practical grounds, in the interests of the claimants as a whole, to exempt determinations of the Foreign Compensation Commission from the normal right of appeal to the courts. It is important to make clear that the subsection is not in any sense retrospective and will apply only to distributions begun after the passing of this Act. For example, it will not affect the case of Anisminic Ltd. which the Foreign Compensation Commission a will consider again in the light of the recent judgment. Neither will it prejudice the exercise of jurisdiction by the courts in the case of an alleged failure to observe the rules of natural justice or a complaint, for example, of some fundamental error of procedure. But it will, we believe, restore to the determinations of the Commission the measure of finality which they must have if the claimants as a whole are to get their money with all practical expedition.
My Lords, I hope I have sufficiently explained the effect of the Bill itself. There is, of course, nothing in the Bill about the distribution of assets, the enabling of which is the primary purpose of the Bill. The terms of this distribution will be contained in an Order in Council which will be made at the earliest opportunity after its passage into law. This will provide for applications to be made in respect of the various categories of claims covered by Articles 1 and 4 of the Anglo-Soviet Agreement to which I referred earlier. This comprises claims in respect of British property affected by nationalisation, or other measures, and of financial losses in the former Baltic States and in the "ceded territories". It also deals with the Government's own shipping claim in relation to shipping services provided under the Anglo-Soviet Ships' Expenses and Freight Agreement of 1942; with British claims in respect of bonds and shares and claims, irrespective of the nationality of the holders, in respect of the unredeemed promissory notes issued by the Soviet Government to two firms, the Lena Goldfields Company and the Tetiuhe Mining Corporation.

19
These two British companies, as some noble Lords may know, both invested large sums in the Soviet Union in the years after the First World War. Their concessions were terminated and they were receiving compensation, albeit on a somewhat inadequate scale, in the form of promissory notes redeemable at intervals until 1954. But in 1940, in retaliation for Her Majesty's Government's refusal to release the Baltic gold, the Soviet Union refused to redeem the outstanding Lena and Tetiuhe notes. All the note holders alike suffered because of this Soviet retaliation for the British action in defence of British interests and that is why all holders, irrespective of nationality, are entitled to participate in this distribution.
It is impossible to estimate at this stage what dividend will be payable to successful claimants. This can be known only when every claim has been determined by the distribution authority. The capital value of the claims presented on our side in the negotiations amounted to £13½ million, though the Russians accepted liabilities of less than £3 million only. No doubt the capital value of the claims when they have been assessed will lie somewhere between these two figures. It is impossible also to say with certainty at this stage what is the value of the assets available for distribution to claimants but it is likely to be around £6 or £6½ million. There will be a six-months period during which applications must be made. Thereafter the Foreign Compensation Commission will proceed with the distribution as quickly as it can and it is hoped that it will be possible to declare an interim dividend soon after the closing date for applications.
If, as I hope, the House is willing to give this Bill a Second Reading this afternoon it will be providing that former owners of property in the Baltic States and the ceded territories should at last receive some compensation for losses which most of them sustained a great many years ago. I am happy to commend to the House a Bill which, so far as they are concerned, brings appreciably closer the end of a long and wretched story. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2ª.—(Lord Chalfont.)
3.13 p.m.
THE MARQUESS OF LANSDOWNE: My Lords, the noble Lord, Lord Chalfont, has given your Lordships a careful exposition of the Bill and he has presented the Government's case in support of it. While following it in the OFFICIAL REPORT through all its stages in another place I have grown to like it less and less, and I am bound to say that nothing the Minister has said this afternoon has made me feel one whit better disposed towards it. As we have been told, this is an enabling Bill to implement an Agreement between Her Majesty's Government and the Government of the U.S.S.R. which was signed on January 5 of last year, one particularly objectionable Article of which was immediately acted upon without any reference whatsoever to Parliament. I shall have more to say, later on in my speech, about this insolently high-handed behaviour of Her Majesty's Government.
This Bill, and everything that has led up to it is, as the noble Lord has said, complicated and involved. For this reason, the noble Lord, Lord Chalfont, was good enough to give us a lot of the historical background. I am grateful to him for that. If I may recapitulate what seem to me to be the most essential points in the past history leading up to this Bill, it is because the passage of time can sometimes invest a questionable act with an appearance of respectability which that selfsame act could not possibly have commanded had it been perpetrated many years sooner. Distance, my Lords, adds enchantment to the view. I propose, therefore, first to ask your Lordships to consider some of the background history, then to study the Agreement, and finally to have a look at the Bill itself, and in particular the Amendment to which the noble Lord referred last in his speech, and which was introduced at very short notice on Third Reading.
At the end of the First World War Estonia, Latvia and Lithuania gained their independence, and in 1921 they were admitted to the League of Nations. Between 1922 and 1926 Britain signed commercial treaties or agreements with all three of them. These treaties, I understand, could legally be terminated only after notice had been given. So far as I am aware, no such notice has ever been given, so presumably in law these treaties

21
stand. I wonder whether the noble Lord can enlighten me on this point.
The independent status of these three Baltic States seemed assured by the terms of the treaties signed with Soviet Russia in 1920, when Russia renounced voluntarily and for ever all her rights of sovereignty over them and their peoples. Twenty years later, however, Mr. Molotov was telling the Deputy Prime Minister of Lithuania to
"take a good look at reality and understand that in future small nations will have to disappear."
In the process of their disappearance, between June, 1940, when the Soviet armies invaded the Baltic States, and June, 1941, when the Nazis drove them out, 61,000 Estonians, over 50,000 Lithuanians and over 34,000 Latvians were deported or killed. I must remind your Lordships that the three Baltic States had declared their neutrality at the outbreak of the war.
When war seemed imminent, the Baltic central banks, anxious about the security of their assets deposited with the Bank of England, suggested their transference to the United States of America. They were given assurances that the assets were entirely safe in Britain and a transfer to America was unnecessary. The United States, my Lords, still refuses even de facto recognition of the annexation by the Soviet of the Baltic States. In America, the assets of which Her Majesty's Government are disposing in order to settle claims against the Soviet would have remained safe. My Lords, what price the old, proud adage, "As safe as the Bank of England."?
In July, 1940, the U.S.S.R. and Nazi Germany being technically friends, as a result of the Molotov-Ribbentrop Pact, the Baltic assets in the Bank of England were blocked in order to safeguard British interests. After the Nazi invasion of the Baltic States, and the withdrawal of the Russians, these assets, in accordance with trading with the enemy legislation, were handed over to the Custodian of Enemy Property. Of course the Baltic States were not our enemies. They had started the war as neutrals; they were not our enemies. But the Nazis were in occupation, and it was solely for this reason that the Baltic assets were treated as
22
enemy property. Once the assets had been handed over to the Custodian of Enemy Property it was possible to make a vesting order making the Custodian the legal owner and having the power to sell. Had the Nazis not occupied the Baltic States, the Baltic gold would presumably have remained in the safe keeping of the Bank of England and beyond the reach of the slippery fingers of Her Majesty's present Government.
In a letter to Sir Tufton Beamish dated November 24, 1967, Sir Leslie O'Brien said:
"Each individual bar remained the property of the customer concerned until it was vested in the Custodian of Enemy Property, in accordance with the relevant United Kingdom legislation…"
And a little further on in the same letter he wrote:
"…the gold was placed with us in much the same way as a private individual might place jewellery or other valuables in his bank."
It would seem to me that the banks of the Baltic States, who were "the customers concerned", have had their gold stolen from the Bank of England, the theft having been perpetrated by Her Majesty's Government with the assistance of the Trading with the Enemy Act. Section 7 of that Act lays down that vesting orders are carried out
"with a view to preventing the payment of money to enemies and preserving enemy property in contemplation of arrangements to be made at the conclusion of peace."
Finnish assets in this country were also lodged with the Custodian of Enemy Property for the same reason. Finland was overrun by the Nazis, and at the end of the war her assets were quickly restored, the Government of Finland having been given de jure recognition by Britain.
Will the Minister tell the House if it is the opinion of Her Majesty's Government that the gold which had been deposited in 1919 by the Baltic States in the Bank of England was, on January 5, 1968, the property of the British Government, and, if it was the property of Her Majesty's Government on that date, by what legal process had that ownership come about? I hope that the noble Lord who is going to reply will give me an answer to that question. It is of course perfectly clear—it was repeated again this afternoon that Her Majesty's

23
Government do not accept that the U.S.S.R. had any title whatsoever to the Baltic gold. This was confirmed on June 15, 1967, in a letter from the then Minister of State at the Foreign Office to Sir Tufton Beamish, in which he wrote:
"Shortly before the Baltic States were formally incorporated into the Soviet Union, the Soviet State Bank represented that it had purchased the gold from the Baltic Central Banks. This claim is not one which we have recognised, and the transfer of gold was withheld."
That has been confirmed again this afternoon.
I must now ask your Lordships to consider for a few moments the claims and counter claims between Britain and the Soviet Union, in settlement of which the Agreement on January 5, 1968, was made. The claims and counterclaims with which we are concerned in this Bill are only those financial and property claims which arose after January 1, 1939. Assets held in the United Kingdom belonging to nationals and Governments of the Baltic States and those parts of Finland, Poland, Czechoslovakia and Roumania subsequently ceded to the Soviet Union were frozen when Nazi Germany invaded those countries during the Second World War.
The Soviet Union, for its part, had frozen assets belonging to British nationals and others in these territories, and in particular there were outstanding claims by the holders of unredeemed Notes issued by the Government of the Soviet Union to the British joint stock companies, the Tetiuhe Mining Corporation and Lena Goldfields, Limited, of London, both these companies operating in Siberia. The British claims against the Soviet Union, which were the subject of the negotiations started in 1965 and which were settled under the Agreement of January 5, 1968, were approximately—as the noble Lord has told us—£15 million, and the Soviet claims against Britain approximately £10 million. Noble Lords will appreciate that I do not of course criticise the determination of Her Majesty's Government to obtain a settlement of these claims, but I do most strongly object to the manner in which this settlement has been achieved.
My Lords, I come now to the Agreement signed on January 5, 1968. The Minister has explained its content. As I understand it, not only was this a bad
24
bargain but it was also immoral, and included in this shameful settlement there had to be a "tip"—I cannot call it anything else—of half a million pounds sterling to the Soviet Union to induce them to have an agreement at all. I cannot accept that Her Majesty's Government had the moral right to utilise the gold of the Baltic States, deposited in the Bank of England for safe keeping before the war, in order to settle British claims against Russia, and I was glad to see that the honourable member for the Cities of London and Westminster, Mr. John Smith, a banker of some twenty years' experience, described the transaction as "dishonourable and inexpedient". I can give the noble Lord the reference if he wants it. He also said in answer to the Government spokesman's claim that they had done what was "practical":
"The bank in which I work has rooms full of objects, many of them extremely interesting and many of them to which the title is almost perfect, but not quite. We would not dream of parting with any of them without a perfect title being shown to us. Why is that? It is because we wish to stay in business as bankers; and what applies to us in commerce applies, a fortiori, to this country."—[OFFICIAL REPORT, Commons, 7/11/68; col. 1121.]
I have said that I cannot accept that Her Majesty's Government had the moral right so to dispose of the Baltic gold, but if it is possible to make a case in law that Her Majesty's Government were acting within their legal rights, I cannot for the life of me see any justification for handing over to the Soviet Union half a million pounds sterling out of these assets, to which Her Majesty's Government have stated the Soviet have no legal title. Nor why the proceeds from the assets from the Baltic countries should be distributed to meet claims which arose from losses in parts of Czechoslovakia, Finland, Poland or Roumania, ceded to the Soviet Union, or for that matter the Lena Goldfields' creditors and the Tetiuhe Mining Corporation in Siberia. What has this all got to do with the Baltic States? Will the noble Lord explain why Her Majesty's Government gave the Soviet Union this money, and on what possible grounds there is justification for using Baltic funds to meet claims in other countries now part of the Soviet Union? My Lords, it is a bad story, and it is humiliating for a people who have long enjoyed a reputation for fair dealing.

25
There is another aspect of this Agreement to which I wish to draw your Lordships' attention. I refer to the high-handed treatment of Parliament by the Executive and what appears to me to be broken pledges. In a letter of June 15, 1967, the Minister of State, Foreign Office, informed my honourable friend, the Member for Lewes, that the realisation of the Baltic assets was subject to Parliamentary authority. As it transpired, the gold was in fact sold exactly two weeks later and Parliament was not even informed, let alone asked for its opinion. What is the explanation of this? Will the Minister of State, when he comes to reply, be good enough to give some explanation to this House?
According to the OFFICIAL REPORT of October 23, 1967, col. 1351, the Under-Secretary of State for Foreign Affairs said in another place:
"It is the case that legislation would be required before the process of distribution took place."—[OFFICIAL REPORT, Commons, 23/10/67; col. 1351.]
Yet £500,000 was paid to the Soviet from the Civil Contingency Fund in January, 1968, almost immediately after the signing of the Agreement, and then this transaction was discreetly slipped into page 33 of the Supplementary Civil Estimates for 1967–68, which were not published until February 15, 1968—one month after the money had been placed to the credit of the Soviet Union in the Bank of England. What is the explanation of this?
The Bill, which I shall come to shortly, provided in Clause 1, subsection (5), for the repayment of £500,000 to the Consolidated Fund out of the proceeds of the property which is to be, or has been, realised by the Custodian of Enemy Property. Strictly speaking, therefore, by these devious means it would be possible to advance the legalistic argument that the payment to the Soviet Union was not a direct distribution of the Baltic assets. Is that the argument of Her Majesty's Government in justification of the statement of the Under-Secretary of State for Foreign Affairs which I have just quoted:
"…legislation would be required before the process of distribution took place"?
I noticed that the noble Lord emphasised that there had been no distribution, yet according to the OFFICIAL REPORT in 1968 the then Foreign Secretary said:
26
"The Agreement will be subject in due course to Parliamentary approval. If Parliament turns it down, that will be that"—[OFFICIAL REPORT, Commons, 23/1/68; col. 210.]
But the £500,000 was deposited in the Bank of England to the credit of the Soviet Union in January of last year, and contracts for British goods to the value of the whole amount had already been signed before ever Parliament was asked to approve the Agreement. So what would happen if Parliament does turn down the Agreement now?
It has been argued that once having decided to take what, in my view, was the dishonourable step of distributing the proceeds of the Baltic assets to our claimants against the Soviet Union, no Agreement with the Soviet Union was necessary. We held the assets and the claimants are here. Furthermore, an additional £500,000 would have been available for distribution. This argument seems to me valid, and I am bound to ask, in view of the noble Lord's remarks about the risk of retaliation and risk of repercussions, what could the retaliation or repercussions have been? Perhaps the noble Lord would be good enough to tell us in his winding-up speech.
The Bill to which the Minister has asked your Lordships to give a Second Reading was first discussed in another place ten months after the Agreement to which it ostensibly is to give effect was signed by the then Foreign Secretary and the Russian Ambassador. No doubt Her Majesty's Government allowed hopes of an Anglo-Russian détente to influence them when considering a solution to the question of outstanding financial and property claims. The tragic and monstrous treatment of Czechoslovakia by the Soviet and the horror with which we have read of young patriots driven to despair by the brutal suppression of the small measure of freedom their country had so painfully won has not unnaturally made this tardy request to approve a completely gratuitous gift of half a million pounds to Russia particularly repugnant, but I should hope that in any circumstances and in dealings with any Government noble Lords would feel a sense of deep humiliation at being asked to approve a most blatant bribe, and a bribe carried out with moneys which, by any normal standards of morality, could

27
not in my opinion be consider ours to give away.
This mortifying piece of legislation has, alas! passed through all its stages another place, where determined and carefully reasoned arguments were deployed against it, without avail, and all Opposition Amendments rejected. The attitude of Her Majesty's Opposition in this House will be determined by certain proposals that we shall have to make at a later stage and by the satisfaction or otherwise which we receive to-day from the answers to questions addressed to the Minister. I sincerely hope that the noble Lord will reconsider the suggestion made in another place by my right honourable friend the Member for Bridlington, Mr. Richard Wood, that Her Majesty's Government should undertake to make a full restitution of these Baltic assets to their appropriate owners should the opportunity arise. Will Her Majesty's Government now give such an undertaking?
In the course of my remarks I have avoided so far as possible complicated points of law, leaving these to other noble and learned Lords better qualified to deal with them. Despite this, I cannot refrain from expressing my own anxiety concerning the Amendment to Clause 2 of the Bill which was introduced at very short notice at Third Reading and now forms subsection (4) of Clause 2. This provision is, as I understand it, in order to enable the Foreign Compensation Commission to carry out its work expeditiously and, like anyone else, I would regret that claimants, often in great need, should have to wait any longer than was absolutely necessary. But this provision would mean that it would be impossible for a claimant to secure redress if the Commission were to make a mistake. There could be no appeal to the Parliamentary Commissioner or to the courts. I hope that noble and learned Lords will consider this point very carefully, for it seems to me that though it is probably desirable to preserve the substance of the Commission's decisions from subsequent appeal, it is undesirable to remove from a claimant any means of questioning the validity of a decision.
Your Lordships will have noticed—and the noble Lord referred to it—in The Times of Saturday, February 1, a letter
28
from Professor Wade on this subject, in which he said:
"The law's delay, like its uncertainty and expense, is a tempting reason for sacrificing justice to speed, but if the courts are prevented from protecting legal rights, the remedy is much worse than the disease."
That is an argument quite comprehensible to the layman and, subject to what I hear from learned Lords on the subject, I shall be inclined to accept it. The Times to-day publishes, across three columns, a letter signed by the Chairman of the General Council of the Bar and the President of the Law Society. The combination of the arguments and the eminence of these learned gentlemen has almost convinced me. However, from past experience I have learnt that legal luminaries often disagree, so I shall wait and listen and then make up my mind. It rather looks as though this mean-spirited and dishonourable little Bill has sired a real monster. I hope that, in considering the possible destruction of the offspring, noble Lords will not lose sight of the thoroughly objectionable qualities of the parent.
3.37 p.m.
LORD TREVELYAN: My Lords, I must declare my interest as President of the Council of Foreign Bondholders. As early as 1959, Her Majesty's Government agreed with the Soviet Government that particulars of outstanding claims which had arisen since 1939 should be collected with a view to negotiations for a comprehensive settlement. It has taken nearly ten years for an Agreement to be concluded and for the consequent Bill to reach your Lordships' House. It having been decided in 1959 that the settlement of these claims should be by way of an Agreement with the Soviet Government, there was a pressing need for this Agreement to be concluded in order that the claimants should obtain some compensation after so long.
There are some features of the Agreement which certainly cannot be welcomed. We surely all regret that it was found necessary, in order to get the Agreement, to pay the Russians £500,000 since even before this payment, apart altogether from other considerations which have been put forward by the noble Marquess, Lord Lansdowne, the assets available for distribution were not expected to be sufficient to satisfy the legitimate claims.

29
Another feature of the Agreement against which objection can be validly raised is that the Agreement covers all holders of the Lena and Tetiuhe State Notes, but only those Baltic Bonds in British ownership. It has therefore admitted the right of the Soviet Government to prescribe in some degree how the British Government should distribute the Baltic assets to which the Soviet Government renounce their claim under this Agreement. I can have no objection of principle to the inclusion of foreign holders of the Lena and Tetiuhe State Notes, since these notes were a sterling issue. On the other hand, the Council of Foreign Bondholders endeavour to maintain the same principle in their settlements that sterling bonds should be settled on an issue rather than on a national basis. There is something to be said for the settlement of both the Sterling Bonds and the Sterling Notes on a national basis. There is something to be said for settling both on an issues basis, even if the British claimants get rather less compensation. There is nothing to be said for settling them on different principles.
I am not sympathetic to the argument that the Baltic assets should not have been brought into the Agreement on the ground which was put forward very eloquently by the noble Marquess, Lord Lansdowne, that we have not recognized the Baltic States de jure as part of the Soviet Union. I think we must look at the matter from a practical point of view, and it is quite time that these assets which are lying with us were made available to British claimants who have been deprived of compensation for so long.
It is a logical argument that the use of Baltic assets should have been limited to Baltic claims, which would have excluded the holders of the Lena and Tetiuhe State Notes and those with claims relating to other territories annexed by the Soviet Union from Czechoslovakia, Poland, Finland and Rumania. I would not, however, press this point, since there would have been no agreement on this basis and these are the only assets which are ever likely to be available for meeting these claims.
It has been suggested that a rider should be added to the Bill that the Government should restore the value of the Baltic assets if the Baltic States became independent again. We should, I suggest,
30
leave this question to be dealt with in accordance with developments of the future. We are all naturally concerned at the legal and moral implications of the appropriation of these assets. I cannot, however, regard it as desirable to provide for a hypothetical situation in this way. It is, I fear, a very unlikely contingency. Moreover, in the highly unlikely event that the Baltic States should become independent again the British Government would surely not agree to pay those Governments these assets without any comparable obligation on them to meet the legitimate claims against the Baltic States.
Since the principles of distribution, which are to be set out in the Order in Council, have been already discussed by Ministers in the other House and, briefly, by the noble Lord, Lord Chalfont, in your Lordships' House to-day, I trust that your Lordships will bear with me if I make brief comments on them at this stage. I have at no time sought absolute priority for the bondholders over other claimants, though this could be theoretically justified. Obviously, there must be some element of equity in the division of the assets. The Government have agreed that the Baltic Bonds should rank for nominal capital plus contractual interest from the date of default, which maintains the important principle for the treatment of Sterling Bond issues in default.
However, it is in my opinion wrong that notional interest at the rate of 4 percent. should be allowed on all other claims, including the non-interest-bearing Lena and Tetiuhe State Notes. This does not recognise the superior status of the Baltic Bonds, which are claims carrying contractual interest against a Government and for payment in sterling, compared with commercial claims with no contractual interest for payment in local currency which would have been transferable into sterling, if at all, only at a loss, and State Notes which were specifically non-interest-bearing. I trust that these considerations will still be taken into account by the Government in deciding the principles on which the distribution will be based.
Much time has passed since the Agreement with the Soviet Government was announced. There is much work still to be done before the distribution can be made, particularly in a full inquiry into

31
the validity of the commercial claims, which will surely be found in some cases to have been inflated. The bondholders have no opportunity to inflate their claims. I hope that this work will be carried out urgently, so that the claimants will not have to wait much longer before receiving that proportion of their claims which can be provided from these assets after the various categories of claims have been established and proportionately scaled down.
Finally, may I take this opportunity to say that I welcome the Statement made by the Minister of State for Foreign Affairs in the other House on December 16, that Her Majesty's Embassy in Moscow have informed the Soviet Government that they hope it will be possible to initiate discussions with the Soviet Government on the pre-1939 Anglo-Soviet claims. This matter has been outstanding too long. It will be an added argument in favour of the Agreement made between Her Majesty's Government and the Soviet Government if it paves the way to a settlement of the old claims. Subject to these comments, I support in general the Bill before your Lordships' House, without supporting all the details in it.
3.45 p.m.
VISCOUNT DILHORNE: My Lords, the noble Lord who has just resumed his seat said that he was not sympathetic to the objection to bringing in Baltic assets to meet the claims of foreign bondholders, wherever they might arise. He went on to say that he was naturally concerned with legal and moral obligations, and then he put the stress on what he considered to be practicable. I hope it is the case that the noble Lord has first regard to moral and legal obligations. I should have been more interested if he could have explained to me how he reconciled distribution of these Baltic assets to creditors, foreign bondholders, who never have had a shred of right to these assets at all.
When listening to the speech made by the noble Lord, Lord Chalfont, in introducing this Bill, anyone who had not briefed himself with the background to it would not, I think, have realised the very great issues to which this Bill gives rise. The noble Lord made a very attractive speech. He dealt to some extent with the historical background, but he omitted to deal, and very wisely, with a number
32
of points, and, in particular, with the main points made by my noble friend Lord Lansdowne. He has frequently been put into bat on a sticky wicket, and I sympathise with him in that respect. But I am very glad to-day that he has the assistance and support, as one speaking in this debate, of the noble and learned Lord, the Lord Chancellor, for I think that the issues raised here concern matters of great legal importance, and not merely matters of morality.
We know that the Agreement of January, 1968, came into force on the day on which it was signed—January 5, 1968. But on January 23, 1968, the then Foreign Secretary said that it was very good business to get this Agreement; and also, as my noble friend has said, that the Agreement would be subject in due course to Parliamentary approval. "If Parliament turns it down," he said, "that will be that." But the Agreement came into force on signature. It was partially implemented without recourse to Parliament immediately after signature. It was never subject, in any respect at all, to Parliamentary approval. Now, all we are asked to do is to approve this Bill, and if Parliament were to reject it that would have, as I see it, not the slightest effect on the Agreement, which would remain in full force and binding on this country and the Soviet Union.
I think that an explanation is called for. Although Foreign Secretaries have changed, this was a statement for which other members of the Government have collective responsibility. The Government would appear to me to have broken their word. Either that should be frankly admitted or we should be told in clear language how an Agreement which came into force on January 5, 1968, and was not subject to ratification is subject to Parliamentary approval. I think that that would tax the ingenuity of the noble and learned Lord the Lord Chancellor. But before this Bill gets a Second Reading, this matter, I suggest, should be dealt with and should be dealt with clearly.
Speaking for myself, despite the statement of the Foreign Secretary I take the view that in considering this Bill one must proceed on the basis that the Agreement is binding, and that whatever we do with regard to the Bill will not affect the Agreement at all. If the noble and learned Lord the Lord Chancellor thinks

33
that I am wrong about that, I will willingly give way to him, for when considering this Bill we ought to know where we stand with regard to the Agreement. My Lords, I have read carefully—and some parts more than once—all through the debates that took place on this Bill in another place, and I wish I could agree that it was good business to get this Agreement. I cannot. I think it an astonishing document, and it reveals an attitude of mind which really shocks me. I propose to speak first about the Agreement and the provisions of the Bill relating to it, and then to say something about Clause 2(4), to which the closest attention should be given at a later stage in our proceedings.
My Lords, the noble Lord, Lord Chalfont, made some reference to the history at the back of this Agreement. I think it is worth bearing in mind that these three banks to whom the gold belonged—the Bank of Estonia, the Bank of Latvia and the Bank of Lithuania—were all, in a sense, private banks. Two of them were joint stock companies; the third, the Bank of Latvia, was held by the Supreme Court of Latvia to be an autonomous and separate State enterprise and not an agency of the State. So none of this gold which we are now considering distributing was in fact the property of a Baltic State: it was all the property of individual concerns in those States. It was entrusted, as my noble friend has said, to the Bank of England; and, as the Governor of the Bank of England has said in writing, it was entrusted to the Bank of England "for physical safe custody".
In 1940, after the Soviet troops had entered those territories, puppet Governments were formed which purported to nationalise these banks without compensation. The view has been expressed, I understand, that under International Law nationalisation without compensation, although amounting to confiscation of the assets within the territories concerned, does not affect the ownership of assets outside. I should be interested to know whether the noble and learned Lord the Lord Chancellor agrees that that is the position under International Law; for if it is then the Soviet Union can have no claim to that gold arising out of the nationalisation of those banks. As I understand it, the claim made by the
34
Soviet Union in relation to that gold has been put forward on two hardly consistent grounds: first, that the banks which owned the gold were nationalised and the Soviet Union became entitled to the gold on the incorporation of those territories in the Soviet Union; and, secondly, on the inconsistent ground that the Soviet Union had bought it. I should like it confirmed (I think it is the case) that neither argument has ever been accepted by any British Government as having the least validity.
It was because of that that a Defence Regulation was made on July 24, 1940, in the following terms. It is quite short. It was later amended when, I think, the Soviet Union became our allies, but it starts with these words:
"Where the Treasury are satisfied that any state is exposed to pressure from another state"—
and these three States clearly were—
"and in consequence action is being, or is likely to be, taken to the detriment of the economic position of the United Kingdom, the Treasury may give general or special directions prohibiting, either absolutely or to such extent as may be specified in the directions, the carrying out, except with permission granted by or on behalf of the Treasury, of any order given by or on behalf of … the first-mentioned state or the Sovereign thereof or any person resident therein, or … any body corporate which is incorporated … therein …"
I will not read the rest, but under that Defence Regulation these assets of these Baltic States were frozen; the ownership of them was not transferred to anyone else. It was only after the German occupation of those territories, as my noble friend Lord Lansdowne has said, that it became possible to make any order in relation to those assets under the Trading with the Enemy Act 1939.
My Lords, the object of Section 7(1) of that Act was expressed to be:
"With a view to preventing the payment of money to enemies and of preserving enemy property in contemplation of arrangements to be made at the conclusion of peace".
The owners of this gold and of the other property vested in the Custodian were enemies only by virtue of the definition in that Act.
"Any individual resident in enemy territory"
was defined as an enemy, and "enemy territory" is defined in the Act as including:
"any area … in the occupation of a Power with whom His Majesty is at war".

35
I am not sure whether I correctly caught all that my noble friend Lord Lansdowne said on this, but I rather thought he made some criticism of the making of the order vesting these assets in the Custodian. I may have misunderstood him; but in my view there was nothing wrong in those circumstances, once the Germans had occupied the territory, in making an order under the Trading with the Enemy Act vesting these assets in the Custodian of Enemy Property. There was clearly power to do so. But, my Lords, what was the property that was vested? Was it property of the States? Was it property of the ceded territories? The Under-Secretary of State said in another place, on November 19, 1968, that:
"the vast majority of this property was reported to the Custodian in the names of individuals and companies and hardly any of it was reported in the names of the Baltic Republics. In particular the gold was reported in the names of the three Central Banks"
And these were not in fact enemies: they were treated as such only by virtue of the German occupation.
My Lords, it is only because that order was made that the present Government now have control over these assets. That being the position, is it not our duty, our moral duty, to secure the return of those assets to the owners, where they can come forward and establish that they are the owners? Have we any right to dispose of this property, vested in the Custodian by our Act of Parliament, to discharge any liabilities of this country to the Soviet Union, or to discharge any liabilities that the Russian Government may have to shareholders of a company which operated in Siberia? That is the question which is really raised by this Agreement. The Under-Secretary has told us that the Soviet claims amounted to £10 million, being claims for this gold, which was sold for £5·8 million just before, I think, devaluation. Had it not been sold then, it would presumably have been worth a great deal more now.
The noble Lord, Lord Chalfont, told us that the assets for distribution were expected to realise £6 million to £6½ million. Am I not right in thinking that all these assets really come from the Baltic States; that they comprise interest upon the assets vested in the Custodian
36
and that no property of any magnitude at all came from the other ceded territories? We were told that the claim by the Soviet Union was in respect of this gold —sold, as I said, for £5·8 million—and also in respect of Baltic ships requisitioned by us. Presumably that means ships which are the property of these three Baltic countries or of individuals resident therein. He said that there were also some miscellaneous property claims.
My Lords, what is the position with regard to the claims in relation to the Baltic ships? We have always rejected the claim for the gold. Have we ever admitted that there is any entitlement to the Soviet Union for compensation for the requisitioning of Baltic ships? If we have not, what right have we now to settle that claim by the payment of money which does not belong to this country? If it is a liability of Great Britain, what can be the justification for using Baltic assets for discharging it?
As I have already said, we have paid the Soviet Union £500,000 which is going to be paid out of the property vested in the Custodian. As my noble friend has said, the money was, in fact, paid immediately after the Agreement was entered into; but the provision is contained in this Bill for its repayment to the Treasury by the Custodian out of these assets. I shall be very interested to hear what the noble and learned Lord the Lord Chancellor may say to justify the expenditure of that money which does not belong to us. For if the expenditure of that money out of these Baltic assets cannot be justified, it seems to me that we might well consider whether subsection (5) of Clause 2 ought not to be taken out of the Bill.
My Lords, I pose this question. It may be very practicable to give this money to foreign bondholders, and so on, and distribute it; but what moral or legal right can there be to use any of it to meet our liabilities? We are told that this payment out to the Soviet Union was "very well worth doing". All we have from it, according to the Under-Secretary, is the making of this Agreement. Are there any other benefits that flow from it? I should be interested to know. Surely it cannot be argued that this payment of £500,000 was "very well worth doing" because of the string attached that the money should be spent

37
on goods purchased in this country. Could that justify the use by us of money that did not belong to us?
In the circumstances that now exist I should not object to the disposal of this property to those who can establish either that they had the right to it before it was vested in the Custodian or that they had suffered financial losses in those territories as a result of the German occupation; but this Agreement goes far beyond that. Not only have we paid the £500,000 to the Soviet Union but we have also relieved them of liability in respect of the unredeemed notes issued by the Soviet Government to the Lena Goldfields and Tetiuhe companies. Your Lordships may recollect that the Lena Goldfields company was awarded £30 million compensation in arbitration in 1930 but that the Soviet Government did not accept that award. Some years later they agreed to pay £3 million, mostly by the issue of notes. And when we refused to meet their claim to the Baltic gold they defaulted on the payment of those notes.
Now we have agreed that the Soviet obligations on those notes are to be cancelled and that the holders of the notes will be able to claim against property which belonged to individuals and companies of these Baltic States and which is vested in the Custodian. Again, I ask: what moral or legal justification can there be for that? At the moment, I must confess that I see none. We have thus, in addition to the payment of £500,000, undertaken to discharge certain Russian liabilities out of this property. The result appears to be that although we have rejected the Russian claims to the gold, we have really agreed to treat part of it as theirs and to use it to meet, to some extent, their obligations; to act, to a certain extent, as their bankers. The amount of the property that will be available for distribution among those who have lost assets in consequence of the occupation of the Baltic States will be diminished. We are treating this property as if it belonged to us and as if the rights of the individuals and companies to whom it belonged had been extinguished.
My Lords, I can see no grounds for calling this a good Agreement. I cannot see any need to have entered into an Agreement of this kind. The noble Lord, Lord Chalfont, said that there were
38
two courses open to us: either to make this Agreement or to leave these assets inviolable. He said that there was a third possibility: that, having these assets in this country, we should ourselves distribute them (they have been here for a very long time) to those whom we thought entitled, to those who had a claim on them, without agreement with the Soviet Union. That course he rejected because of the possibility of retaliation. I think those were his words. He spoke of "repercussions". My Lords, are we to be deterred from a proper course of conduct by the possibility that there might be some further defaults—defaults like those on payment of the notes issued by the Soviet Government on the Lena Goldfields Company? Surely we should not deal in this way with this property just for fear of what might be done. This Agreement could be justified only on moral and legal grounds; not on grounds of expediency.
I was disappointed to find that the noble Lord, Lord Chalfont, said very little about the rights of the matter. I think we could have, and should have, distributed this money to those who could show they had a claim in relation to these assets; either a claim to ownership of them (though there may be few who could now establish that) or, where the assets remain without owners coming forward, a claim on the basis of having suffered losses in those Baltic territories. I can see no grounds for saying that those assets, or any part of them, should go to other people.
My Lords, if this Bill gets a Second Reading it will be left to the Foreign Compensation Commission to go into the claims; and it is now intended, if I understand it aright, really to make this Foreign Compensation Commission above the law; to make it master of its own fate and in complete control of its own jurisdiction. We shall examine this proposal in more detail in Committee. I think the noble Lord said that even with Clause 2(4) in the Bill it was still possible, on matters of procedure, for the Foreign Compensation Commission to be brought before the courts. So recourse to the courts is not completely excluded, and it is right that that should be said. But what is much more important is that questions of jurisdiction should come before the courts.

39
My Lords, much has been said about the delay which claimants would suffer if there was any litigation. I appreciate the force of those arguments but at the same time it does not seem to me right that there should be no recourse to a superior tribunal on the question of the construction of an Order. I am not at all sure that I agree with the noble Lord, Lord Chalfont, when he says that Parliament had always intended that those questions should be removed from the courts. Because my impression was—and I shall read what he said with care —that what Parliament really intended was that the Commission's decision on questions of fact should be final and not open to appeal. I know that it is not expressed quite in that way, but I think that was the intention The Orders lay down who can claim and in what circumstances they will be entitled to have their claims accepted, and if you leave the Foreign Compensation Commission completely in control of the interpretation of those Orders, the same thing may happen as happened in the recent case in the House of Lords where the Foreign Compensation Commission rejected a claim on grounds on which they were not entitled to reject it; because they required proof on grounds additional to those contained in the Order in Council. The claim being rejected meant that more was available for distribution among the other claimants. But the converse could equally apply. The Foreign Compensation Commission might, quite wrongly, on the construction of the document accept a large claim which would reduce the share of the other claimants.
It seems to me, my Lords, that where you get a difficult question of construction, the Foreign Compensation Commission might itself welcome a ruling from a judicial body. But the real problem—and it is a real problem—is to devise a way in which that ruling could be secured and finally secured without such a delay as would be intolerable. In the case which went to the Lords, I gather that the litigation started after the provisional determination and before the final review by the Foreign Compensation Commission. I am wondering—I mention this now because I should like some thought to be given to it before the Committee stage—whether it would not be
40
possible to provide that there should be an appeal to a court. It might conceivably be to the Court of Appeal direct. It might be provided that the determination of the Court of Appeal should be final but that the notice to start the litigation must be given within a short period after the provisional determination. I do not believe that that would involve such great delay, because in the circumstances of all the other claimants being held up I believe that the courts might grant facilities for a speedy trial. I believe that some such procedure is wanted and would be very much better than the present subsection of Clause 2.
My Lords, I fear that I have spoken for too great a length. I feel very unhappy about this Bill and very unhappy about this Agreement which was entered into. I hope that it will not be a precedent which will be followed in future. I do not believe that the Agreement should have been made. I do not think it possible to find a good word for it.
4.15 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, the noble Marquess, Lord Lansdowne, referred in his speech to a letter in The Times this morning, signed by the Chairman of the Bar Council and the President of the Law Society, on Clause 2(4). My noble friend Lord Chalfont will reply to the debate, but I thought your Lordships would expect me to say something on that and accordingly I shall apply myself entirely to Clause 2(4).
My Lords, there has, I think, been a certain amount of misunderstanding about this subsection. In the first place, it does not change anything. It does not actually do anything. All it does is to provide that an Order in Council may be made at a later date and that Order in Council will itself be subject to Parliamentary control. Secondly, there is nothing retrospective about it, and it cannot be made to apply either to the Anisminic case or to any Egyptian case at all. That case, and any others which are in the same position, will of course be reopened before, and reconsidered by, the Commission according to the law as laid down in your Lordships' House. So it cannot affect Egyptian claims at all. It can apply only to the future, including the Baltic, and if such an Order is made,

41
and when it is made, it will be subject to Parliamentary control.
The next thing I should like to make quite clear about this subsection is this. The Government have nothing to gain by providing that there shall be no appeal from the Commission, or by providing that there shall be an appeal. It does not affect the Government at all whether this subsection is there or not. We shall not have a penny more money or a penny less money. We are concerned solely with what is best from the point of view of the claimants. There always has to be a level of final decision, and it is a pure question of opinion according to the nature of the proceedings whether it is a good thing to have no appeal, or four appeals.
Your Lordships may remember that recently on the Administration of Justice Bill I did not conceal from your Lordships my view that it was not really in the interests of the taxpayer or the Government that in tax matters one had first to argue the whole thing before the Special or General Commissioners of Income Tax and get a decision from them; then, secondly, re-argue the whole thing, if taken to appeal, before a Judge of the High Court and get a decision there; then another anneal to the Court of Appeal and then perhaps another appeal to the House of Lords. It is very much a matter of opinion.
In the first Judicature Act, of 1873, Parliament expressed the view that it would be better to remove your Lordships' judicial powers and create a Court of Appeal from which there would be no further right of appeal. Then, two years later, Parliament changed its mind. Thus, how far there should be an appeal, or several appeals, or what is a thing which ought to be decided in the interest of the litigant. Whilst it is usually thought in the interest of the litigant to have an appeal, it is very doubtful whether, having regard to the desire for certainty, the desire to arrive at a decision within a given time, more than one appeal is really in the litigant's interest.
What happened here is simply this. As your Lordships know, it has always been open to anybody here with money to invest his money at home or abroad. If he invests it abroad, he may get a higher rate, but that higher rate may reflect the fact that he is running some risk of losing his capital which he would
42
not run if he invested it here. A country declares war and swallows up another country in which you have property, and your property has simply gone. You get to the point where you have to admit yourself that the swallowed-up country no longer exists.
Or your property may be confiscated without any compensation at all. We all know that there are parts of the world where experience has shown that this is particularly a danger—Russia during the whole of this century; some States in South America; the Middle East. If in the result you do lose your money, you cannot expect the taxpayer to recompense you. There is no reason why the taxpayer should recompense you if you choose to invest your money abroad, particularly in area s of that kind. Naturally our Government have always done their best to get what money they can out of foreign Governments to recompense those who have lost money in this way. But when they do so, they do not do so as agents.
This situation has been going on for most of the last century. In 1876 our merchants had lost about three million dollars as a result of the actions of Chinese merchants. The Government found out what the claims amounted to and got that sum from the Government of China. Apparently there was some delay in distribution and someone started an action to get compensation. But where the British Government are paid money by a foreign Government in these circumstances, claimants have no legal right. In that case the Court of Appeal held that the Government do not act as agents of the claimants, and that even when they get the money it is not trust money, in a legal sense. Of course, it would be dishonest if the Government were to put this money into their own pockets (as it were) to reduce income tax. Obviously they have a moral duty to distribute it in a way that they think fair. But Governments are responsible only to Parliament. There is no legal right.
That decision was approved by the Court of Appeal in 1912, and right up to 1950 distribution was always done by the civil servants in the Foreign Office as a matter of discretion. No doubt the civil servants did what they thought was fair. It was difficult to do and different

43
methods of distribution were used. Either a flat rate was accepted or they said that claims up to £10,000 would be paid 100 per cent., with a decreasing proportion for larger sums. There is no doubt that they did what they thought to be fair. No doubt they did their best to decide which people properly qualified as claimants. This has never been easy. The longer these cases go back (and this applies particularly to Baltic cases) the greater the likelihood that there is no evidence now available: all the documents have gone. Therefore, at the end of the day, if a claimant says that 35 years ago he owned a house and that it was worth so much, there is nothing to support it and nothing to contradict it.
In 1950 the then Government thought that on the whole it might be better to have a Commission to deal with the distribution, instead of leaving it to civil servants, because the number of cases were increasing and it was getting a great deal for the Civil Service to handle. There was debate as to whether, the civil servants having had the last word, this new Commission should have the last word or whether there should be some right of appeal. Parliament thought that claimants would be much happier with an independent board than with civil servants. Questions of time and cost had also to be taken into account. Governments have always deducted costs of distribution from the fund. If there are going to be law cases up to the House of Lords, somebody has to pay the lawyers; and this all has to come out of the fund, so that the money available for distribution becomes less.
Rightly or wrongly, it was thought that it would be in the interests of the claimants to have finality rather than what I might call a perfect decision. In law, of course, your Lordships' House cannot be wrong, but I do not know whether, from a common sense or layman's point of view, there is any real reason to suppose that if you take a case higher and higher, particularly on questions of construction, one decision will be right rather than another. In this very case, the 1950 Act provides, in fairly simple words, that
"The determination by the Commission of any application made to them under this Act
44
shall not be called in question in any court of law."
Eight Judges in our superior Courts considered that provision. Five said that it meant what it says: that a determination by the Commission, though it might be a wrong determination, based on a wrong construction, was a determination and the Court could not consider it. Three thought otherwise. They took the view that if the Commission's determination was based on a wrong construction, then it was a nullity and not a determination. This is largely a play of words, but because three of the Judges were in your Lordships' House and, of the other five, three were in the Court of Appeal and two in your Lordships' House, of course the view of the three prevailed.
Is it not really in the interests of people who have been waiting for some years for some money that when at last, after previous Governments have tried desperately hard to get an agreement with the Russians so that something can be done but have failed to do so (and when I say "failed" this is no criticism because it takes two to make an agreement), agreement is reached and the money is there, a finality should be reached. These things happened mainly thirty years ago and those who are still alive are pretty old. We get the most pathetic letters from them, saying, "What is the earliest date on which I might possibly get something, because it is no good getting it after I am dead?" That, my Lords, was what the Government thought about this problem in 1950.
It was reconsidered by Parliament in 1958, after the Franks Committee Report had been presented, when a large number of provisions taking things away from the courts were repealed by the Tribunals and Inquiries Act. Parliament specifically considered this particular case and by an Amendment excluded it from the Act, because, it said, when dealing with these foreign claim compensation cases it was important not to delay things more than necessary. The money was never enough to meet the claims in full, and distribution of the money available could not be made until the total amount of claims was decided, and if towards the end of the period of assessment somebody could start a case and go on appealing this was not in the interests of the claimants.

45
In the case we are discussing the determination was in May, 1963; and the case did not reach your Lordships' House until December, 1968—five and a half years later; and, of course, nothing could be distributed until finality was achieved. Therefore, I am grateful to noble Lords for having raised the question of this subsection, because the Government still have an open mind and want to know what everybody thinks about it. This is not just a matter for lawyers. Naturally lawyers prefer to have everything decided by lawyers—as many lawyers as possible. But I think that this matter ought to be decided on this basis. Would a claimant want his money as soon as he can have it by letting this Board of three distinguished lawyers decide, in finality; or would he wish, if they were wrong on a matter of construction, to send the case to the House of Lords which, after five and a half years and the expenditure of a lot of money, might decide one way or the other?
My Lords, what it ought to depend on is what the claimant would want. Would he want finality or one, two, three of four appeals? It was because I thought, from what I read in The Times, that there was a good deal of misapprehension about this subsection that I have ventured to say what I have.
4.30 p.m.
LORD CONESFORD: My Lords, I am slightly relieved that the noble and learned Lord on the Woolsack, whose formidable intervention I thought might cause me some difficulty, has dealt exclusively with a question which I am prepared to leave to the Committee stage. I would comment on only one point he made. He said that claims have waited for thirty years. I think there is a point there, one that the Government might well have kept in mind when they decided that this controversial Agreement made with Russia could not wait for any Parliamentary consideration at all. The claimants had waited for thirty years, but Parliament must not have a word to say on the Agreement: that had to come into force on signature. No reason has been given for that indecent haste, and I do not believe any reason can he given.
I was grateful to the noble Lord, Lord Chalfont, for his outline with dates of some important events, which was supple-
46
mented by my noble friend Lord Lansdowne in making the first speech from these Benches. Those two noble Lords have given the main facts so clearly that I only revert to the matter of what happened in June and July, 1940, for this reason: that I thought that even the noble Lord, Lord Chalfont, made a slight suggestion that there was some difference in the responsibility of the Governments of these three Baltic States in the short period before the official takeover by the Russians and afterwards.
I merely wish to give a few quotations, with which I think the noble Lord will not differ, which show that during the whole period of that summer of 1940 these three Governments were subjected to the most brutal duress. I do not ask the House to accept any version given by any citizen of the Baltic States, and still less any description that I shall give. I want to quote from our own official historian, in the work British Foreign Policy in the Second World War, by Sir Llewellyn Woodward. Most of these quotations were rightly given during the Committee stage in another place by my gallant friend Colonel Sir Tufton Beamish. Dealing with the period between June 14 and 17, 1940, the official history says that the Russians
"compelled Lithuania, Latvia and Estonia to change their governments and to allow the entry of Soviet troops."
It goes on to say that on July 21
"new puppet governments in the three Baltic States, with the support of a popular vote secured by the usual Russian methods, asked for the incorporation of their respective countries in the U.S.S.R."
The account goes on as follows:
"There was no doubt about the methods of fraud and force used by the Soviet Government in securing a vote in favour of incorporation into the Soviet Union…The Foreign Office regarded the Russian action as of the same nature as the German conquests of Austria and Czechoslovakia."
Then there were the so-called elections, which resulted in the request to be incorported in Russia. The puppet Governments asked for incorporation in the U.S.S.R. after these elections. What happened at these elections? The leaders of all Parties, apart from the approved Communist Party of collaborators, were deported, killed or imprisoned. The only people who could stand for election were Communists approved beforehand

47
by the Russians. Voting took place under duress. The results of the count were announced in foreign countries before the count had in fact been completed, and it was not astonishing that the usual result of a 90 per cent. Communist vote was obtained without much difficulty. Russian action resulted in the nationalisation measures which are the origin of many of the British claims.
British property was seized without compensation and the external debts of these States were repudiated. None of these things was the fault of the Baltic States. Then in June, 1941, the territories were overrun by the German forces. As your Lordships have heard, before the incorporation the Government of this country had blocked the Baltic assets under our war legislation—actually I think it was Regulation 2A of the Defence (Finance) Regulations. When the overrunning of these countries by the German troops took place, that made them enemy terri under the Trading with the Enemy Act. Here I find myself, as indeed throughout, in complete agreement with my noble and learned friend Lord Dilhorne. That gave the authorities here ownership and control of the gold.
There are those who think that the British Government should not in any circumstances have realised the gold. Having regard to what has been the practice and the law of this country, I do not take that extreme view. In many wars, where enemy property, defined geographically, has been taken by the authorities, normally its fate has awaited the Peace Treaty that has followed the war, when an Agreement has been made between two lawful de jure Governments. What happened here was that there was no lawful de jure Government with whom such an agreement could be made.
I can appreciate the argument that that made it impossible to have lawful dealings with this gold, but I do not wish to take so extreme and strict a view. I think, however, it is quite obvious—here I am strongly with my noble and learned friend Lord Dilhorne—that the gold should not have been used for purposes quite outside the compensation of British nationals who had suffered damage in the Baltic States. Above all, not a penny should
48
have been used as a tip to the State that had brutally invaded and destroyed the Baltic States.
As has been pointed out, there are claims, or nominal claims, by both parties. Roughly, our claim amounted to £15 million—and I agree with the noble Lord, Lord Chalfont, that on investigation that may prove to have been too much. The Soviet so-called claim amounted to £10 million—and that definitely is fantastically too much, because the main part of that claim is for the gold itself, and nothing is more obvious to a lawyer, and I should have thought to a non-lawyer, than that the Soviet Government has not any claim, in morals or in law, to one penny of that gold. No claim which they could put forward for this gold could stand up in any court whatsoever; nor have they been so foolish as to attempt to establish such a claim in any international court.
Here I should like to draw the attention of the House to the contrast between what happens when the British Government or British nationals have claims against the Communists and what happens when Communists put forward claims against the British Government. Let me take the Lena Goldfields as an example. As my noble and learned friend Lord Dilhorne pointed out, under the arbitration clause in their agreement this matter went to international arbitration and they secured an award of £30 million. The Soviet Government did not recognise this award. Later the company had to be content with £3 million, which was later received by the Lena company mainly in promissory notes, on which the Soviet Government ceased to pay when we blocked, quite rightly, the Baltic gold in that summer of 1940. But, my Lords, not only has this company lost the £30 million award; not only did it not get the £3 million, but now the British Government are going to pay it, and pay it out of the Baltic assets. If some writer of fiction had put this forward as a possible agreement, or had it been presented as a comic work on the B.B.C., people would have said that this was too extravagant a parody about what any British Government could do. But they did it.
I remember another case in which the British Government were involved against a Communist Government—I

49
mention this only in passing. I happened to be at The Hague at the time the Corfu Channel case was being heard by The Hague Court, and I went to the Court and had the pleasure of hearing the then Sir Frank Soskice, now the noble Lord, Lord Stow Hill, arguing the case for the British Government. In due course we got a judgment against Albania for the repayment costs of the "Saumarez" valued at over £700,000, We did not re a penny. That is what happens which the British Government establish in tribunals valid claims against Communists. But when a chief Communist Government puts forward an entirely bogus claim for the Baltic gold, what do we do? In order to get them to come to an agreement to withdraw their bogus claim we pay them £500,000. Nor is that all. That is not the limit of what we pay under this Agreement. We pay that £500,000; we also release them, under Article 1(b), from over £1 million owed to the British Government under the Ships' Expenses and Freights Agreement. My Lords, this absolutely unjustifiable giving of tips to the Soviet Government—what good result is it designed to bring about?
My noble and learned friend Lord Dilhorne has discussed, and I think proved, the immorality and unprincipled nature of this Agreement. I am astonished by something slightly different. I think even its immorality is surpassed by its stupidity. Do the British Government really think that yielding to unprincipled and groundless claims will improve their relations with the Russian Government? It will not improve those relations; it will make those relations worse. Russia respects strength and not least, perhaps, strength of character. By giving them half a million pounds raised from the Baltic gold, we incur not their good will, but their contempt. It is wholly untrue that the British Government's choices in this matter were either this Agreement or leaving the gold unused indefinitely, profiting nobody. Both the claimants of compensation for what they had suffered in the Baltic States, and the assets, were here. We could dispose of those assets to the claimants by our own legislation without any agreement with the Russians at all. This point was put with great force at all stages by my learned friend Sir John Foster in another place. Incidentally, I should like to say that when
50
the much disputed subsection of Clause 2 was introduced at the final stage in another place, Sir John Foster immediately got up and delivered a most able speech, maintaining the view that has subsequently been put forward by eminent lawyers in the Press.
I fear—in fact, I am certain—that the Russians will use the fact that we yielded to a groundless claim to boost the legend that they seek to spread about what happened in 1940. I do riot know whether there are many Members to-day in this House who remember the Question that I asked on December 18, 1962, just over six years ago. They may care perhaps to look it up. In a Parliamentary Question I drew attention to a disgraceful publication by UNESCO of a booklet called Equality of Rights between Races and Nationalities in the U.S.S.R. This was a piece of perfectly unscrupulous and lying Communist propaganda and was published by UNESCO. The authors said this about the annexation of the Baltic States, which at the beginning of my speech I described in the words of the official historian:
"In 1940 the Soviet regime was restored in the Baltic Republics, which voluntarily joined the Union."
If that could be put forward at a time when the British Government had done nothing to boost these absurd claims, what will they do now?
My Lords, we cannot, of course, oppose the Second Reading of this Bill because the great mischief of it is not in this Bill but in the Agreement. Had that Agreement come before Parliament, I do not think it could have lived in either House of Parliament. I believe that is why it did not come before Parliament. There was no reason of any kind why that Agreement should not have been made subject to ratification by Parliament.
My Lords, it was a sorry day when this Agreement was concluded. It will harm our good name at home and abroad, but on Second Reading of this Bill we can do nothing about it. When it comes to the Committee stage there are some possible Amendments which perhaps could be considered. One obvious Amendment concerns the subsection dealt with by the noble and learned Lord on the Woolsack, and there is another on which I believe my noble and learned

51
friend Lord Dilhorne may have something to say. There is not very much we can do with the Bill, but I do not think it should go through this House (as it did not go through another House) without the strongest condemnation of an unprincipled and foolish Agreement.
4.51 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I find this Bill distasteful in the extreme. It is a Bill of expediency, supported by dubious arguments and very carefully phrased justifications. Many noble Lords, including myself, knew between the wars the States of Lithuania, Latvia and Estonia. We learned to respect them as proud, small nations, well governed and well administered, and we were shocked at the ruthless seizure by Russia of these small countries in the year 1940. What appals me is that the rape of these gallant little nations is now described in such a gentle manner, free from any condemnation, by Ministers of Her Majesty's Government.
In another place the Under-Secretary of State for Foreign Affairs described that horrid transaction of Soviet Russia in these words:
"… many honourable members will recall, in 1940 Soviet influence was established over the Baltic states …" [OFFICIAL REPORT, Commons, 7/11/68, col. 1096.]
The noble Lord, Lord Chalfont, has said to-day that in 1940 these nations ceased to be free agents My Lords, has a dastardly crime of crushing three little nations ever been described in such gentle terms by a Government before? I trust not, and I am ashamed that Her Majesty's Government should not have used one phrase of condemnation for the acts which took place in 1940.
I need not elaborate on the Agreement, because that has already been done by other noble Lords. But then, in order to get the agreement on claims and counterclaims with Russia arising from their annexation by force and seizure of the assets, personal and Government, of the Balts; in order to get the agreement of the two parties, the Government give away the treasure of the third, and then they add a "tip"—£500,000 of noble Lords' and of my money, of the taxpayers' money—as a sweetener. If I may use the expression of West Africa,
52
the Government have "dashed" the Soviet Government £500,000.
This dubious act is dressed up as being a further purchase of consumer goods, but there is absolutely no guarantee or indication anywhere that Russia is buying one pound's worth more of goods than she would under our normal trade. Her Majesty's Government admit that this little sweetener was slipped in in order to obtain that agreement. Let us look for a moment the admission of that from Her Majesty's Government. The Under-Secretary of State said that it would have been impossible to obtain the agreement, and added:
"Then the £500,000 which was made available to the Soviet Union came into the picture and clinched the deal. Without that £500,000 there would have been no settlement."—[OFFICIAL REPORT, Commons, 7/11/68, col. 1134.]
My Lords, it would have been far better that there had been no settlement.
The Government have refused to be drawn in another place, and so far the noble Lord, Lord Chalfont, has refused to be drawn in your Lordships' House, on any undertaking, specific or in general terms, that if and when these Baltic States revive, and their sovereignty is re-established, there will be an admission of claim for a repayment of these moneys of which they have been robbed. Noble Lords know that curious things happen in Eastern Europe. It is not beyond the bounds of possibility that that may happen in the future.
The Government's own description of this Agreement does not seem to me to be very satisfactory. Let me see how they described it, perhaps in an unguarded moment. The Minister described it thus (col. 1106):
"The agreement with the Soviet Union, and the measures to give effect to it which are now submitted to the House, are to be judged by the criterion of what is practicable rather than by ideal standards of justice."
What a terrible admission for a Minister to make! The Government make great moral gestures in regard to the alleged oppressed majority in Rhodesia but they raise not one finger and show not a flicker of interest for the interests, moral or material, of the oppressed minority of the Baits, who are suffering under Soviet rule at the present time. Perhaps Her Majesty's Government think that this

53
Agreement will build a bridge of good will between ourselves and Soviet Russia. Let me remind the noble Lord, Lord Chalfont, that since this Agreement was put forward Russia has invaded, in a cruel and heartless way, Czechoslovakia. Let me remind him of the Note to this country of December 2. Let me remind him of the abuse of this country, of the B.B.C. and the Press, which flows constantly from Soviet Russia. "Appeasement" has now become a dirty word in politics, but to-day it is the appeasers of Russia who sit on the Benches opposite.
At any rate let me say this: in 1938 appeasement gave us something—it gave us a year of time. I will not go into this further, but in 1938 we could not have fought, qualitatively or quantitatively, the Luftwaffe. We could not have won the war. But in 1939 we were harvesting the seed of Hurricanes and Spitfires laid down by my noble friend Lord Swinton in the years 1935 and 1936. So Mr. Chamberlain's appeasement, whatever one may say, gave us a year of time. But the Wilson appeasement of Russia gives nothing except surrender of other people's property—half a million pounds cash of the taxpayers' money and something of our national honour, which many of us deplore seeing given away by the present Government.
5.0 p.m.
LORD DENNING: My Lords, I am sorry that, because my duties elsewhere prevented me from coming before this moment, I was not here earlier to hear the discussion on this Bill. I should like to say a word on the clause which is being introduced, and quite deliberately introduced, to reverse the decision in this House sitting judicially in the Anisminic case. That case came before the Court of Appeal, in which I sat I suppose some two years ago, in which the Foreign Compensation Commission sought to strike out a claim at the earliest stage, saying that there was no cause of action whatsoever and that the decision of the Commission could not be challenged in the courts of law. We said that at least there was something to be argued out; and how gratifying it was when this House established in the Anisminic case that even that tribunal was subject to control by the courts of law! This clause which is being put in at the latest stage
54
means that that tribunal is, so to speak, a law unto itself; that it can interpret an Order in Council and if it interprets it wrongly there is no one to correct it, not even our courts of law.
My Lords, I thought that question had been discussed and determined when we had the Tribunals and Inquiries Act in 1958. Previously tribunals had been setting themselves up above the law and saying that the courts of law had no jurisdiction over them; that we could not control them even when they went wrong on points of law. That Act did a great deal of good. I may tell your Lordships that we have in my Court from day to day appeals to us on points of law from nearly all the tribunals throughout the land—the Lands Tribunal, the rent tribunals, industrial tribunals and all the rest. Is this tribunal to be the only one, or virtually the only one, to be exempt from the rule of law? My Lords, I suggest that this proposal should not be allowed to be introduced.
What is the argument on the other side? It is the length of time which it is said it would take for a decision to be obtained from the courts, from one series of appeals to another, up to the House of Lords; and, it is said, further, that a long time would elapse before funds could be distributed. I would ask your Lordships not to be swayed by such considerations. It is the simplest matter for an appeal to be simply to a single judge, with no appeal further. In all the pensions appeals we had I was the final and ultimate judge.
VISCOUNT DILHORNE: My Lords, may I intervene to ask my noble and learned friend a question? Would he not think it better that there should be an appeal direct to the Court of Appeal?
LORD DENNING: My Lords, I should think it infinitely better, because that is what we normally have; nearly all the appeals come from the Lands Tribunal, and so on, direct to me. I had not the benefit of hearing what my noble and learned friend had said. Certainly with matters of this size, which may involve several millions of pounds, the appeal should be direct to the Court of Appeal, or controlled by the Court of Appeal; it would surely be better than allowing

55
the tribunal to be judge in its own case. In any event, we could always expedite matters if need be.
It is said also that there are distinguished lawyers already on this Commission. That may be so; but there is a great temptation, if there is no appeal from you, to do just what you like. I have known it myself. The existence of a possibility of revision by a separate court does a world of good for all tribunals. My Lords, it is, as I understand it, one of the cardinal features of the rule of law in this country that tribunals and other bodies, of whatever description, should, in the last resort, be controlled by the Judges of the High Court or of the Court of Appeal, who in saying what the law is should have the last word or the interpretation of Orders in Council. For that reason, I hope that your Lordships will not allow the Bill to go through with this clause in it.
5.5 p.m.
LORD WILBERFORCE: My Lords, I venture to add a few words after what my noble and learned friend Lord Denning has said, simply because he was not present at the earlier stages of the debate and there were one or two points raised by earlier speakers on the legal aspect of the Bill to which I should like very shortly to reply. It is important, I suggest to noble Lords, that we in this House should be quite clear what Parliament is being asked to enact in this Bill. There are two aspects of this matter. In the first place, it is necessary that we should get the law right in the Bill itself. The noble and learned Lord the Lord Chancellor said, quite justly of course, that Clause 2(4) does not itself do anything; it awaits the enactment of an Order in Council. But he knows quite well that an Order in Council, if one were to be enacted conferring these very large powers upon the Foreign Compensation Commission, cannot, if it comes up, be amended in this House; we have to take it or leave it, and very soon we shall have to take it. So that what we have to do is to get the law right in the Bill itself.
Secondly, as speakers have pointed out, this clause received very scanty discussion in another place. Only one legal speech was made on the Third Reading in the House of Commons, and that by
56
Sir John Foster, the Member for North-wich, and he was strongly critical of the clause. So it is right that we should give careful attention to it here. One need not get tied up with a lot of legal difficulties and technicalities. The point is a perfectly simple one for anyone to understand. This Foreign Compensation Commission is one of a number of judicial bodies set up by Parliament to discharge specialised tasks. There are a great many of them; there are over 1,000 in the country at this time. And when Parliament sets up such a tribunal, it—Parliament—lays down in the Act or in the Order in Council, as the case may be, what is to be the area within which the tribunal is to operate; it defines the sphere of competence of the tribunal concerned. It may give it a very large responsibility indeed; it may give it a very slight responsibility, to fix a figure. Or it may give it very large adjudicatory powers, as it has done here.
But the question in every case, great or small, must arise and does arise quite often: what is to happen when the tribunal departs outside the area which Parliament has laid down for it? And what happens in such a case up till now—and this is a consequence of a long series of decisions going back for about a hundred years—is that the question whether the tribunal is inside its area or outside its area is a matter for the courts. There is no question here of this House or anybody having decided that the Commission's decisions of substance (I take the expression from the noble Marquess's speech) shall be reviewed by any court. To take the example of a man who owned a house in Riga 35 years ago, and his establishing his claim, there is no question of decisions on a point of that sort being challenged or of its not being covered by this exclusionary clause.
There is equally no question of depriving the Commission of power to decide finally and definitely, even on questions of construction to which the noble and learned Lord the Lord Chancellor referred. If anybody thinks the contrary is the case they have only to read our judgments in the Anisminic case. I am quite prepared to believe that that has not been done, because the clause was introduced so rapidly. The ink was hardly dry on our judgments before the clause was brought in, and I have to say that our judgments were rather long. But those

57
points are perfectly clear: the Commission may decide questions of fact; the Commission may decide even questions of construction. All that was said was that if the question of competence of area arises, that i3 a matter for the courts ultimately to review. It has normally been thought, and thought for many years, that the courts are impartial and suitable arbiters between Parliament, when it lays down what a tribunal is to do, and the tribunal itself. It has normally been thought that the tribunal should not in such a matter be a judge of its own powers, be the ultimate judge in its own cause. That is all that is meant by conferring supervisory powers on the courts of justice, and that is, in the end and in its ultimate essence, what is meant by the rule of law.
Just a little closer to the actual situation with which we are now faced, these questions arise not, as your Lordships know, under the Act of Parliament but under the Order in Council which ultimately lays down how the assets are to be distributed. Those Orders in Council are of great complexity. Your Lordships have not the one which dealt with the distribution of the Egyptian compensation claim, but I can assure your Lordships that this was a most elaborate document, amended a number of times, and if I may respectfully say so, not very skilfully drafted in all its respects. One is not to blame the Foreign Compensation Commission for getting the interpretation of it wrong. Everybody is human. It was easy enough to take a different view on what the Order in Council said.
But now one comes to the question put by the noble and learned Lord the Lord Chancellor: what about the individual litigant who has a claim? Is he going to be satisfied with no appeal whatever from this body which is going to decide what the Order in Council means and whether his claim is shut out? Is he going to be satisfied because this is an eminent body with lawyers sitting on it? The Commission does not even have to give any reasons for its decisions, no reasons at all; and the reasons have had to be dragged out of it on a number of occasions. Even a learned member of the Court of Appeal has said that there may be something to be said for reasons not being given. At any rate, it does not have to give reasons; it can decide the
58
claim without telling the litigant why, and there may be large sums involved. In the Anisminic case the amount of the claim was £4 million. How large are going to be the claims here?
At any rate, from what has been said we know that the Order in Council here is going to be one of great detail and complexity. It is going to segregate claimants into different classes, some on a national basis, some on an issue basis, a contractual interest in some cases, a legal interest in other cases. All these matters have been settled by Her Majesty's Government, normally approved, or at any rate rubber stamped, by Parliament; and surely if the Commission is not to respect those guide-lines laid down in the Order in Council there should be room for an ultimate review of their decision by the local legal courts of justice.
I am very appreciative indeed, and understanding of the need to avoid a delay. It is not only the case of the individual claimant that one has to consider. An individual claimant's claim affects all other claims; so that delay in one may have repercussions on the others, and undoubtedly it is most desirable to try to avoid that so far as possible. The Commission takes its time. Reference has been made to how slow the courts are, but I notice that this Commission took just about four years to deal with the original claim before it in the Anisminic case, before ever the courts got going on it at all. I say that not by way of criticism of the Commission, but to underline the necessity for avoiding delay. But does it follow from that that we must accept a clause so exclusionary, so drastic as that which is contained in the Bill?
I should like to ask the noble Lord, Lord Chalfont, this question. Since 1950, when this Act came into force, how many cases have been dealt with by the Foreign Compensation Commission, on the one hand, and, on the other hand, how many appeals have been taken to the courts? I know of two cases which have come to the courts, one in which there was a failure of natural justice in which the Commission itself had to agree that its decision could not stand. The other is the Anisminic case. If there are others, I should be interested to hear of them. But is it really necessary, in the

59
light of that and of the many hundreds of cases which the Commission has dealt with and which have been thought to be covered quite rightly by the exclusionary clause, to introduce something so radical as Clause 2(4)? Is it not a matter, as my noble friends have suggested, for some much more moderate procedure, some single appeal, one appeal to a court of law? Whether it is a judge alone or the Court of Appeal matters not, but in principle, in view of the importance of the sum concerned, I would myself think that the Court of Appeal was the right tribunal. One appeal and no more, possibly even with a time limit within which the appeal has to be brought. That is the proposal put forward in the joint letter of the President of the Law Society and the Chairman of the Bar Council to The Times to-day, and it surely deserves careful consideration by Her Majesty's Government. I hope that it will be considered before the Committee stage, and that this House will support those who are in favour of as little interference as possible with the normal rule of law.
5.17 p.m.
LORD CHALFONT: My Lords, I fear that we have spent a good deal of your Lordships' time already on this Second Reading, but I think we have had a number of extremely interesting points of view put forward on both the moral and the legal aspects of this Bill and the Agreement from which it springs. Of course, if, as I hope and believe, the Bill is given a Second Reading, then in the light of what has been said here this afternoon, we shall have to give close attention to those points in the later stages. I cannot, and at this stage I would not try to, take up all the arguments that have been made in your Lordships' House this afternoon. That would take up far too much time. I feel that already in dealing with the principal arguments I shall have to ask your Lordships to bear with me for rather longer than I should have hoped initially to speak.
I was taken to task by one noble Lord for expressing the fate of the Baltic States in terms which he clearly thought were under-stated and objective. I can only say that my aim in the opening speech on the Second Reading was simply to lay the historical facts
60
before the House, and had I turned aside to deal one way or the other with the morals of this or that particular course of international action twenty, thirty or more years ago, I might indeed have kept your Lordships here until well into the night.
Perhaps I may deal first of all with the question raised by the noble Marquess opposite, about the status of the three commercial treaties. He asked a specific question about these, to the effect that he wished to know whether they were valid or not and, if not, when they terminated. The facts are that in the Government's view the treaties ceased to be in operation for two main reasons. The first was that British property was seized without any compensation being paid. This would amount prima facie to a material breach of the treaties entitling us to suspend their operation. Secondly, the treaties ceased to be in operation in August, 1940, when the independent Baltic Republics were "incorporated", if I may use that rather euphemistic phrase, into the Soviet Union de facto. From that time, there have been no independent Governments recognised by Her Majesty's Government with whom the treaties could operate. Clearly, there is no need to give notice to the other side that a treaty is no longer in operation when the reason is that the other side has disappeared. The treaties, therefore, in our view, have ceased to operate in accordance with law; that is to say, the International Law on treaties.
The need for an Agreement with the Soviet Union about this has been the subject of a good deal of comment by noble Lords who have spoken. The noble Lord, Lord Conesford, I think took the Government most severely to task for this. I thought that he, if I may say so, damaged an interesting case, as he so often does, by some notable exaggeration. One need do no more than refer to his hilariously predictable identification of UNESCO with the spread of Communist propaganda. In my view this is rather like the 13th stroke of a clock; not only is it incredible in itself, but it invalidates all previous utterances.
LORD CONESFORD: My Lords, I did nothing of the sort. I pointed out that that particular bit of propaganda had been published by UNESCO, and I referred

61
the noble Lord to the Question. If he likes to look at the Foreign Office reply (probably the branch of the Foreign Office that is briefing him to-day may have briefed the Minister who replied) he will see that the reply was that this was much deplored, and that Her Majesty's Government had in fact written to UNESCO complaining of this publication.
LORD CHALFONT: My Lords, I am not resisting that statement at all. I am simply saying that I thought it was predictable that the noble Lord should have brought this up in this context. As I said, it demonstrated what I thought was a somewhat predictable strain in his views on international relations generally.
I think that on this question of the need for an Agreement—why we wanted an Agreement and why it was necessary to pay half a million pounds to the Soviet Union as part of this Agreement—one might say, first of all, that this attempt to reach agreement has not been entirely the business of the present Government. It has been pursued by previous Governments. I know that speculation about the reasons for the actions of previous Administrations is not always a profitable activity, but I can think of several reasons why no previous Government, like this one, have thought it right to embark on a unilateral distribution of assets. For one thing, as I have said earlier this afternoon, I do not believe that any British Government could have assumed that there would not have been a Soviet reaction to the unilateral distribution of the assets.
Some noble Lords have asked: "What about it? What could such a reaction be? What are these repercussions and retaliations that we are so afraid of?" I think I need only mention the Soviet Union's arbitrary retaliation for the original blocking of the gold in 1940, when it suspended payments on the Soviet State Notes, which had no connection with the Baltic States. In the last twenty years or so there have been various points—and the noble and learned Viscount will know this—at which the Soviet Union, if it had been so minded, could have retaliated against Her Majesty's Government for distributing the Baltic assets without its consent.
VISCOUNT DILHORNE: My Lords, so we may take it that one of the reasons we gave the £500,000 was that we thought the Russians might dishonour some of their other Notes?
LORD CHALFONT: My Lords, if the noble Viscount will allow me to continue, I will deal with just that point. I should like first to give a concrete example of the kind of retaliation that might be made, so that noble Lords will not think this is some kind of vague threat left hanging in the air. One such example is the Anglo-Soviet Civil Supplies Agreement of 1947, in terms of which the Soviet Union undertook to pay Her Majesty's Government a sum of £45 million by instalments, the last of which was payable only last year. I believe that noble Lords will agree that no Government could lightly put this sum at hazard, even in the interests of the British post-1939 claimants. I am simply making the point that if we had proceeded with unilateral distribution to meet these claims there could have been retaliation of a substantial and serious kind.
Quite apart from the question of retaliation, there is of course the whole general area of our commercial and political relations with the Soviet Government. I think it is perverse to suggest, as some noble Lords have suggested, that in their attitude and policy towards the Soviet Government Her Majesty's Government are engaging in some form of appeasement. What we are attempting to engage in with the Soviet Government, and have been so attempting for many years, is a civilised policy of friendly relations with a sovereign foreign State of a kind which will enable us to move forward with that State towards a world that has some element of peace, equity and stability in it. This is not appeasement.
THE MARQUESS OF LANSDOWNE: My Lords, is the noble Lord really saying that he thinks it civilised to indulge in bribery?
LORD CHALFONT: My Lords, no; I did not say that it was civilised to indulge in bribery. Indeed, what I am contesting is the fact that this is bribery at all. This is an extremely emotive and not altogether accurate phrase which comes from the noble Marquess and not from me. I have not referred to

63
this sum of money as a bribe, nor do I believe that it is. I am simply saying that we are endeavouring, not to appease the Soviet Union but to conduct our international relations in a civilised and friendly way with countries with whom we are in diplomatic relations. This seems to me to be a fairly unexceptionable view of foreign policy.
Before I deal with the sum of half a million pounds, which seems to have generated such vivid emotion in your Lordships' House, I would deal briefly with the legal considerations in favour of settling the matter by agreement rather than by unilateral action. I have said repeatedly that the Government have not recognised, and do not recognise, as a matter of law, that the Soviet Union has a right to the Baltic assets, or to any part of them. On the other hand, it is a fact—and it might be as well if we addressed ourselves occasionally to the facts in this case—that until February, 1967, the Soviet Union itself pursued a claim to these assets, and in particular to the gold; and in favour of this claim it produced legal arguments. Now, even if we do not regard these legal arguments as valid (and I have had occasion to say this in your Lordships' House about other questions), even if we do not regard them as valid, the Soviet Government certainly did.
What would have happened if we had realised those assets and distributed the proceeds to our claimants without the consent of the Soviet Government? However confident we may have been about our legal grounds for doing so, we certainly would not have been 100 per cent. sure that we should not be open to challenge by, or on behalf of, Soviet interests, either in the British courts or before some international tribunal. But now, by the Agreement, this position is put beyond challenge because the Agreement provides that each Government shall be solely responsible for the settlement of claims and the distribution to its own nationals of the assets which it holds. My Lords, I think that it is against this kind of background that we have to look at the necessity for securing an Agreement on this subject. I have no doubt at all that it was right for this Government, and indeed for successive Governments—and I emphasise this: for successive Govern-
64
ments—to seek to settle the matter in the way that we have now settled it, rather than by unilateral action.
I come now to this question of the half a million pounds and the reason why the payment was made. We have heard it referred to in emotional and exaggerated terms as a "tip" and a "bribe". Well, this is all good political "knockabout", but we are dealing here with the simple facts of an international Agreement. I have already explained, I hope adequately, why it was important and essential to secure such an Agreement. Some time before Mr. Kosygin came to this country it had in fact become clear from the negotiations with the Soviet Government that the very best we could hope to secure from them was an Agreement on the basis that each side, without admitting liability, would undertake not to pursue its claims against the other.
I am afraid that the arguments about the balance of money—the £15 million against the £10 million—are irrelevant, because we were negotiating with the Soviet Union, and this was not the way the Soviet negotiators saw the question.
After the negotiations, which had begun formally in 1959 and in earnest in 1965, there still was not the ghost of an acceptable agreement between the two sides, either on the valuation of the claims or on the question of legal liability. This was the situation when the two Prime Ministers met in February, 1967. The Agreement which resulted from these meetings was much closer to our previous position in the negotiations than to the Soviet one. Whatever noble Lords opposite may say, I do not believe that £500,000 was too great a price to pay for the advantages of an Agreement. I talk now of the advantages to the claimants, as well as in terms of the broader relationships between this countary and the Soviet Union. It is a very modest sum in relation to the total value of the assets which, at I said in my opening speech, were probably somewhere between £6 million and £7 million.
VISCOUNT DILHORNE: My Lords, the noble Lord said £6 million and £6½ million. Has it gone up half a million?
LORD CHALFONT: My Lords, £6 million and £6½ million is still between £6 million and £7 million, the noble Viscount will be delighted to know. It

65
did not involve the recognition of the Soviet title to any part of the assets nor the recognition de jure of Soviet sovereignty over the Baltic States. I believe that this was a small price to pay for an Agreement which I hope is going to result in the end of this long and wretched story for the claimants concerned in this case. I must repudiate any suggestion in this connection that the claimants, or any group of them, have any prescriptive legal right to the assets. This bargain involved a concession, but, as I have said, it was a relatively small one. My view—and I think that many noble Lords will agree—is that most claimants will be much more content at the prospect of receiving some compensation after 28 years. They will be more concerned with that, than with the fact that the total capital sum available for distribution has had to be abated by this relatively small amount.
LORD BALFOUR OF INCHRYE: My Lords, the noble Lord said that it was a small price to pay. Does he mean that we have bought the Agreement for half a million pounds? Is that what he is saying?
LORD CHALFONT: My Lords, it is easy to turn the facts of a case by the use of emotive words. If you wish to say that we "bought" an Agreement, the fact is that we agreed with the Soviet Union that in return for this small and modest sum of money, which I pointed out in my earlier remarks was to be resolved in terms of trade between the two countries, we were able to obtain an Agreement which I think was in the interests of international relations and in the interests of the claimants concerned. This is a matter—and it has been the Government's concern throughout—of satisfying these claims after they have been hanging about for nearly thirty years with the depressing results which were mentioned earlier by my noble and learned friend on the Woolsack.
THE MARQUESS OF LANSDOWNE: My Lords, before the noble Lord leaves the point, is he going to give me an answer as to whom this money belonged; and, if it did belong to Her Majesty's Government, by what legal process? I think this matter fits in here.
LORD CHALFONT: My Lords, perhaps the point fits in here, though I in-
66
tended to come to it later. However, since the noble Marquess asks me now, may I say that this is really a question of what authority Her Majesty's Government had to realise these assets and then to use them in the way they did. I do not think that the question is as obscure as the noble Lord might think, but in order to clarify the matter I shall need briefly to give a little history.
THE MARQUESS OF LANSDOWNE: My Lords, the question is not obscure; it is the answer that I want.
LORD CHALFONT: My Lords, the answer has not yet been given, so I fail to see how the noble Marquess can characterise it as obscure. I think that the position must be obscure to the noble Marquess or he would not have asked the question. I shall now attempt to clarify it. If I am to do so, it is necessary for me to sketch briefly the history of the matter. In 1940, when the Baltic States were occupied by Soviet forces, the Bank of England held the gold to the account of the former central banks of the three countries concerned, Latvia, Lithuania and Estonia. Shortly before the formal incorporation of the Baltic States into the Soviet Union (I am sorry to go on using this objective phrase, but there is nothing sinister about it), the Soviet State Bank represented that it had bought the gold from the Baltic banks. Transfer to the Soviet State Bank was withheld, as your Lordships will know, and the gold was blocked under Regulation 2A of the Defence (Finance) Regulations on July 24, 1940.
Subsequently, when the Baltic States were overrun by Germany in 1941, the provisions of the Trading with the Enemy legislation were applied to the gold, and it was eventually the subject of a formal order vesting it in the Custodian of Enemy Property, with power to sell, under the Trading With the Enemy Act 1939 and the Trading with the Enemy (Custodian) Order 1939. As the noble Marquess will realise, the effect of vesting is to make the Custodian the legal owner of the property. Once the gold had been vested in the Custodian, he was legally entitled to sell it and realise the asset under exactly the same powers. I hope that I have made the position clear whence springs the authority to sell the gold and realise the assets.
VISCOUNT DILHORNE: My Lords, the noble Lord agrees that if the Germans had not occupied these territories Her Majesty's Government would have had no power to dispose of this gold.
LORD CHALFONT: My Lords, the noble Viscount is extremely good at casting hypothetical flies over the Government Front Bench. I am not going to rise to that one at this stage of the debate.
It has also been suggested by noble Lords opposite that we should not have a common pool of assets. I cannot see much force in the arguments adduced in support of this. The assets have separate territorial origins, encompassing both the Baltic States and Ceded Territories, but these separate origins are not now represented by separate sovereign States. This may be regrettable, but it is a fact. Our claim was against the Soviet Union as the de facto Government of the territories concerned. The claims were for payment in full in each and every case, and the Soviet Union in turn laid claim to the assets held in this country, whatever their origin. We did not hold separate negotiations or reach separate agreements about each category of claims in turn. The settlement which we did reach was a global one, and I repeat that it was one in which each side agreed not to pursue its claims against the other. Her Majesty's Government have now to decide what is the best method of compensating all the United Kingdom claimants out of the assets which the Soviet Union no longer claims.
The noble Lord, Lord Trevelyan, asked the question, why are foreign holders of the notes but not of the external bonds to be included? This is a complicated question and it would take a long time to answer in full, but I might say that whilst the Council of Foreign Bondholders, which the noble Lord represents with such great distinction, is competent to represent sterling bondholders, irrespective of their nationality, in pressing foreign Governments to carry out contractual obligations under bond issues, Her Majesty's Government are in a rather different position. We can present claims to other Governments only in respect of British losses, and this is what was done in the case of the Baltic
68
bonds. A State, as your Lordships will know, is not entitled to put forward a claim to another Government—
LORD TREVELYAN: My Lords, may I ask whether we are entitled to accept proposals from the other Government that foreign nationals should be included in those beneficiaries who claim?
LORD CHALFONT: My Lords, I will finish answering the question, and I hope that the point will be clear to the noble Lord. The scope of the negotiations with the Soviet Government was laid down in 1959. The Registration Order in Council of November of that year made provision only for British-held bonds. The fact is that the Soviet Government would not negotiate about foreign holdings of the bonds. They have conducted negotiations with a number of Governments about Baltic claims and always on a basis of nationality. We shall be providing in the distribution to admit bonds in British ownership in November, 1959, when the Registration Order came into force, and not at the dates in 1940 when service of the bonds ceased.
The history of the bonds and the notes is in a number of respects quite different. As regards the notes, in 1959 we were pressing the Soviet Government, as we did throughout the negotiations, to resume service of all these notes—which, unlike the bonds, were obligations contracted directly by the Soviet Union. The Soviet Government did not deny their obligations, but they sought to make resumed service dependent upon the return of the Baltic gold. Clearly, this no British Government could have agreed to. As part of the final terms of the settlement we agreed to make a settlement of the notes, and the position is made clear in the Agreement of January 5.
Article 1 covers the bonds owned by nationals of the United Kingdom. Article 4 provides an undertaking by Her Majesty's Government to settle the notes irrespective of the nationality of the holders. There is, I think, justification for this. The two companies were British companies and all the note-holders suffered loss as a result of Soviet retaliation for British action in blocking the gold.

69
This, as I said earlier, was done in defence of British interests and there is every reason to suppose that, but for this British action, all the notes would have been redeemed by the Soviet Government many years ago. I should have liked, in all fairness, to go further into the points made by the noble Lord, Lord Trevelyan, about the distribution proposals, but if, as I hope, the Bill is given a Second Reading, the noble Lord and I could discuss this at greater length later. Certainly, I can guarantee that if, as I hope, the Bill is given its Second Reading, we shall look closely at all his points, and, indeed, at all the suggestions that have been made this afternoon in your Lordships' House.
There is perhaps one point that I should make, because it is one that has been made with a good deal of feeling by noble Lords opposite. It concerns the question of ratification of the Agreement with the Soviet Union. A good deal of concern, and indeed some violent criticism, was expressed of the fact that this Agreement was reached without being subject to ratification. Perhaps at the outset I should say that neither side in the negotiations wanted to make this Agreement of 1968 subject to ratification. This, of course, is not an answer to the question; but the broad terms of the settlement were reached, as I said, during Mr. Kosygin's visit in 1967 and that settlement was definitive. Both sides were anxious to resolve the question, once and for all. On our side it had been the policy of successive Governments to work for this settlement before disposing of the assets, and in our view—a view which we still hold—an agreement which was subject to ratification would not have formed a sufficiently firm basis from which to dispose of these assets.
VISCOUNT DILHORNE: My Lords, could the noble Lord then explain why on January 23 the Foreign Secretary said that the Agreement would be subject to Parliamentary approval?
LORD CHALFONT: My Lords, the Bill that springs from the Agreement will, of course, be subject to Parliamentary approval. It is the Bill that we are—
VISCOUNT DILHORNE: My Lords, the Foreign Secretary specifically referred to the Agreement. That is quite a different thing from the Bill. We can pass
70
the Bill without having any effect on the Agreement. The Foreign Secretary said that the Agreement would be subject to Parliamentary approval. I asked the noble Lord to say specifically whether that was wrong, and if it was not wrong how does he justify it?
LORD CHALFONT: My Lords, I take the noble and learned Viscount's point. I admit that I cannot answer that question now. I was not aware of the circumstances in which that was said; perhaps I should have been. I will look into the question and will certainly take the earliest opportunity to answer the question, either to the noble and learned Viscount directly or in your Lordships' House.
VISCOUNT DILHORNE: My Lords, I raised this particular point in the course of my speech. I raised it at the very outset of my speech and I was hoping for a reply to it now. It really should not have come as very fresh to the Foreign Office, as the particular statement made by the Foreign Secretary was quoted in another place.
LORD CHALFONT: Then, my Lords, I can only apologise for the fact that I did not realise the exact point of the question when the noble and learned Viscount put it in his speech. I can only say that it was never the intention during these negotiations to have an Agreement subject to ratification. If it had been subject to ratification, there is one very important consideration. This is that after the Agreement had been made the Russians might have failed to ratify it, which would have held up the proceedings still further. However, now that I am clear about the point made by the noble and learned Viscount I will certainly address my mind to it and will let him have an answer, and will let the House have an answer, as soon as I possibly can.
Of the major points that have been raised this afternoon, this leaves only the important question—perhaps the most important one, if the drift of this afternoon's debate is to be an indication—of Clause 2(4). My noble and learned friend who sits on the Woolsack dealt with this clause at some length earlier in the debate, and I am sorry that the noble and learned Lord, Lord Denning, who made a characteristically good-humoured and

71
modest contribution to the debate, was not here to hear my noble and learned friend. As he addressed himself in his customarily authoritative way to the legal aspects of this clause, I shall not attempt to follow him; I should only, I think, make one or two brief points about this question.
It has been said several times in your Lordships' House this afternoon that Clause 2(4) threatens the rule of law, and that is a suggestion which, on behalf of Her Majesty's Government, I must immediately contest. In our view, the establishment of the Commission itself in 1950 was a strengthening of the rule of law. These points have been made by my noble and learned friend. Before 1950 distribution was entirely administrative. Now there is a special tribunal; and, indeed, one manned by lawyers. The question now at issue is: how far is the Commission—charged with this special, indeed one might almost say unique, task—to be subject to judicial review? The noble and learned Lord will know that Lord Justice Russell said in the Court of Appeal:
"… the Executive is dealing broadly with matters not strictly matters of right, and the time-consuming precision of the ordinary judicial processes may well be out of place."
That is also the Government's view. The general power of the courts to supervise inferior tribunals of course remains. What this amendment does is simply to define more precisely the field which is remitted to the Foreign Compensation Commission.
Finally, I should like to underline as emphatically as I can the point made by my noble and learned friend. The interest of the claimants is really what is at stake here. That is what is at issue. It is this that Her Majesty's Government have had at heart throughout these negotiations, throughout the drafting of this Bill and when arriving at the decision to propose this amendment. What the claimants want is for their claims to be resolved as quickly as possible. As I have said several times this afternoon, they have been waiting thirty years for this. Given the high standing of the members appointed by the Lord Chancellor to the Foreign Compensation Commission, we think it appropriate that the final decision should be taken at that level. Whatever the noble and learned Viscount may say,
72
it is our view that this was the intention embodied in the Foreign Compensation Act 1950 and the Tribunals and Inquiries Act 1958, and the amendment does no more than give effect more clearly and emphatically to that intention. As I have said, Clause 2(4) simply deals with that one aspect of the case and is meant in the long run to address itself to the possibility of further delay in the settlement of these claims.
The primary purpose of the rest of the Bill which is now before your Lordships' House is to create circumstances in which after this long and miserable story following the wretched history of the Baltic States, the claims of these people can be settled is equitably as possible. We should like to do this in a way that springs naturally out of the settlement which we reached with the Soviet Union while Mr. Kosygin was here.
I believe the Agreement to be right, and I believe that the Bill which now springs from it is the right and just way to meet the legitimate preoccupations of these claimants. Therefore, as I say, I hope and believe that your Lordships' House will give the Bill a Second Reading, so that we may address ourselves closely and assiduously at later stages of the Bill to the various proposals and ideas that have been put forward in your Lordships' House this afternoon.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

NATIONAL INSURANCE &c. BILL
5.50 p.m.
BARONESS PHILLIPS: My Lords, I beg to move that this Bill be now read a second time. This short Bill has a dual purpose. First, it enables the payment of flat-rate unemployment benefit to continue to be made to suspended workers during the first week of any period of suspension after March 9, when it would otherwise cease. Secondly, it paves the way for regulations to be made to implement the recommendation of the National Insurance Advisory Committee that benefits should remain encashable for twelve months (I see that the noble Lord, Lord Conesford, has gone, but I apologise to him in his absence for the horrible word "encashable"; I could not find any other word) instead of six months as

73
at present. These are quite separate matters and can best be considered separately.
My Lords, Clause 1 of the Bill follows naturally from the Government's decision, announced in another place on October 14, that more time must be allowed for negotiations with both sides of industry about proposals for legislation requiring employers to make guarantee payments to workers on short time or laid off for a week or less. Workers who are affected by short time or lay-off in this way are at present entitled to flat-rate unemployment benefit in accordance with the normal rules. But Section 3(1) of the National Insurance Act 1966 provides that this entitlement shall cease on March 9. The first purpose of the Bill is therefore to enable the payment of this flat-rate unemployment benefit to continue after March 9 until a day to be appointed by the Secretary of State.
Section 3 of the 1966 Act embodied the principle that financial responsibility for short periods of suspension should be placed upon employers. The Government's view continues to be that this principle is the right one. As your Lordships will know, the purpose of unemployment benefit is to replace the lost income from earnings of those who are wholly unemployed: it is not intended to provide additional income, over and above their earnings, for workers laid off by their employers for brief spells or while they are on regular short time. The Government take the view that it is neither economically nor socially justifiable that the National Insurance contributions of employees in general, many of whom receive less when they are working full-time than others are getting when they are working short-time, should be used to subsidise the earnings of workers in certain industries. With the introduction in October, 1966, of earnings-related benefits, it would certainly have been wrong to pay the improved rates of benefit for part of a week to people who are still in work and are receiving earnings for the remainder of the week.
Because of these economic and social considerations the 1966 National Insurance Act (which, as your Lordships are aware, introduced an earnings-related supplement to unemployment benefit) provided that the supplement should
74
never be paid during short-time or layoff for less than a week. This provision is in no way altered by this Bill. But the 1966 Act went further and provided that three years after it had received Royal Assent—that is, on March 10, 1969—flat-rate unemployment benefit should also be withdrawn for these periods.
My Lords, these provisions with regard to unemployment benefit do not of course stand by themselves: they assume that employers have a financial responsibility for the employees concerned. But at the same time the Government recognised that both sides of industry would need an adequate period in which to negotiate voluntary agreements to deal with financial provision for short-time working within the industrial context. The three-year interval which I have already mentioned provided time for the negotiations of appropriate voluntary arrangements. As a further safeguard, the Government also undertook, in the absence of satisfactory voluntary agreements, to introduce a statutory scheme of guarantee payments.
In the interim, the First Secretary of State has been responsible, first, for encouraging the negotiation of voluntary agreements where they did not already exist and, when it was clear by the end of 1967 that voluntary agreements would not be reached, for initiating negotiations with both sides of industry about the introduction of a statutory scheme. During the course of these negotiations substantial problems have emerged, particularly about the form and level of the guarantee and about the provisions to be made for workers whose suspension from employment is the consequence of a strike. It was also necessary for the Government to take account of related developments, and here I have in mind the proposals arising from the Donovan Commission's Report and the plans for the new earnings-related social security scheme, both of which have recently been dealt with in White Papers. Summing up, Clause 1 enables payment of unemployment benefit to continue after March until a day to be appointed by the Secretary of State, after approval by both Houses of Parliament.
My Lords, the remaining part of the Bill springs from a National Insurance Advisory Committee Report on time

75
limits, which included recommendations for extending from six to twelve months time limits for making claims and for cashing instruments of payment. It is concerned only with changes in the time limits for the encashment of instruments of payment. Changes in the claim provisions can be made by regulations under existing powers, and we are not concerned here to-day with this aspect.
Clause 2 of the Bill will enable regulations to be made for all Social Security benefits extending the period within which these benefits must be cashed from six months to not less than twelve months. This new rule is not only more generous but also more flexible than the old rules. Judging from the present pattern of complaints, the vast majority of people will be covered by the period of twelve months. But the National Insurance Advisory Committee also wanted cover to be given to a small minority of cases where, for example, the person becomes quite incapable of looking after his own affairs because of mental or physical incapacity, and has no one readily available to help him. It is the intention to extend the time limits in such cases indefinitely. The Government intend to introduce the new encashment regulations as soon as Royal Assent has been received. The opportunity will be taken to simplify the existing Regulations so that they are easier to understand and to apply.
My Lords, the time limit on the encashment period has sometimes been opposed in principle. In their Report, the Committee considered carefully whether such a time limit was necessary. They concluded that it was for reasons which carry conviction, the most important of which was the cost. If people had an unlimited period in which to cash their instruments of payment, because of the need to check payments the Department would be obliged to store indefinitely millions of orders and postal drafts and to search through them whenever a late request for payment was made. Even within the present six months encashment period 24,000 people a year claim that they have not cashed their authorisations, and have had to be convinced that they have done so by the production of the cashed instrument with their own signature on it. This storage
76
and searching would be a very expensive business if required over a long period, and the cost would be excessive. Moreover, most benefit payments are not unconditional, and the beneficiary has to sign that he is currently entitled. Such a declaration years after the event would be of little value, and would leave the way wide open for dubious claims.
In short, my Lords, abandonment of the rules would be very hard to justify, but the relaxation of the rules will help those few people who run over the present six months' limit. It will, for example, help those elderly people who like to save up pension orders to meet a periodic payment and who in the past have sometimes overrun the time limit. It provides an adequate solution to these time limit difficulties.
Clause 3 makes a customary provision of National Insurance legislation as regards regulations which are consequential to the Bill. As to unemployment benefit it is intended to maintain in being certain technical rules about payment of benefit for days when a person would not normally work: these rules would otherwise be revoked after March 9. As to time limits, it covers regulations to implement all the changes recommended by the National Insurance Advisory Committee which have to be brought into effect at the same time as the Bill becomes law. Your Lordships will wish to know that the cost of continued payment of unemployment benefit is estimated as approximately £3 million per year. I commend the Bill to your Lordships' House as a minor but beneficial measure. I beg to move.
Moved, That the Bill be now read 2ª. —(Baroness Phillips.)
6.1 p.m.
LORD DRUMALBYN: My Lords, I should like to thank the noble Baroness for introducing so clearly this Bill which is quite small in compass and for making clear matters which are not very clear on the face of the Bill itself. This Bill is a short and, if I may so call it, a two-pronged Bill. The Government have had to bring it in because they needed the first prong to avoid leaving a vacuum. They have sensibly taken the opportunity—and the opportunities are rare—to add the second prong to implement the recommendations of the National Insur-

77
ance Advisory Committee which were made about a year ago. Incidentally, I take it that the words "et cetera" in the Title relate to the fact that the recommendations apply to family allowances which are outside the scope of National Insurance. It is not a very elegant Title, but it is shorter than saying "National Insurance and Family Allowances Bill".
So, while we should not wish to oppose the Bill, perhaps your Lordships will permit me to probe it a little. May I first deal with the second prong—Clauses 2 and 3, which are more straightforward than Clause 1. As I am already on record in your Lordships' House as favouring an extension of the time limits—and I was castigated by the Government for saying so—I am naturally glad that the National Insurance Advisory Committee has recommended 12 months instead of 6 months as the time limit, both for the cashing of benefits—and I suggest this to the noble Baroness as a phrase—and for the admission of claims for retrospective payment where "continuous good cause" is shown and where the entitlement (whether to sickness benefit or retirement or widow's pension) continues up to the time of the claim. The Committee records in paragraph 8 of their Report that their attention was drawn
"to comments made by the National Insurance Commissioners indicating that they on occasions regret their inability to accept for a past period of more than six months although they are satisfied that good cause for not claiming existed for a longer period".
As has been said, I appreciate that hard cases make bad law; but 24,000 hard cases are quite a lot. I do not say that all are hard cases; but, equally, I think it true to say that it is bad law if too many hard cases are made. I am sure that in this respect the law can be improved so as to lessen the feeling of injustice that sometimes arises from a refusal to honour payment orders or to accept retrospective claims.
The noble Baroness said that the Bill deals only with the cashing of benefits because the Minister already has power to extend the period in which claims for retrospective payment must be made. She did not say in terms that the Government intended to do that; but I take it that the Government accept the recommendations of the Advisory Committee in their
78
entirety and will bring in the necessary regulations. Perhaps the noble Baroness could tell us at the same time whether this would mean one big, block regulation or separate regulations dealing, on the one hand, with claims for retrospective payment and, on the other hand, the extension of the period for cashing benefits. I am also glad that the National Insurance Advisory Committee has recommended that the adjudicating authorities should have discretion to allow encashment of benefits even after the period of 12 months has expired where the contributor was incapable of obtaining payment during the period or of getting someone else to obtain it for him. I would ask the noble Baroness to confirm that in this case the "adjudicating authorities" means the insurance officer with an appeal to the local tribunal and from there to the National Insurance Commissioner.
My Lords, I turn now to Clause 1. As the noble Baroness has said, Section 3(1) of the 1966 Act provides that as from March 10, 1969, the first six days during which employment is suspended, as distinct front being terminated, are not to count as days on which the employee is entitled to flat-rate unemployment benefit. As Sundays are disregarded, I take it that "six days" means, in effect, a week. The noble Baroness has told us that the saving resulting from this provision will be about £3 million. That is a sizeable sum, although it is less than 0·2 per cent. of the combined flat-rate and Exchequer contributions. Clause 1 postpones the coming into operation of the provision indefinitely; that is, until a day to be appointed by the Minister. I would ask the noble Baroness whether this means that the Government are still hopeful, as they appeared to be in 1966, that voluntary arrangements will be made between employers and employees and will go on being made; and whether there is, in the Government's view, any prospect of this being done right across the board to make it unnecessary to bring in legislation. I am not sure that I can agree with the noble Baroness that the principle that responsibility for short periods of suspension should rest with the employers is valid in all circumstances. I take it that what is meant by "short periods of suspension" is, as in the Bill, six days or less.

79
The Minister of State said in another place, and I think the noble Baroness said much the same to-day when introducing this Bill:
"Unemployment benefit is primarily intended to provide for the wholly unemployed."
Primarily, no doubt; but the principle that enabled unemployment and sickness benefits and retirement pension to be brought together in a single unified scheme was the principle of making insurance payments where work is interrupted; that is, where employment is suspended through sickness or other causes beyond the control of the contributor. The noble Baroness referred to the Royal Commission on Trade Unions whose Report recommended that where there is a strike at an employee's place of work that employee should no longer be disqualified from receipt of benefit simply because he is a member of the same grade or class of those workers there who are actually participating in the dispute or helping to finance it, or are otherwise directly interested in it, even if the employee himself is not in any way participating in it.
I shall not argue this point here. I will merely mention that an employee in the same grade or class may stand to gain from the strike to the extent that its objectives are achieved even although he is not in any way participating in it. If that recommendation were to be accepted as things are at present, and were to be brought into force now (and I think this is the easiest way of expressing it) then many more employees in such circumstances would be entitled to benefit than can do so at present; but after the appointed day they would be deprived of benefit unless the strike lasted for more than six days. It is true that unemployment benefit would not be paid for the first three days of an interruption of work caused by a strike unless there were at least 12 days of unemployment in the 13 weeks. But it must be remembered that it is not only employees at the same place of work who are concerned: in some cases men employed elsewhere may also have to be laid off as a result of the stoppage. And where they are, of course, both employers and employees suffer.
80
I should have thought it inconceivable that the Government would transfer entirely from the National Insurance Fund to the employer the responsibility for paying these men unemployment benefit. Men who are laid off because of a strike elsewhere have their employment suspended through the cause of the strike, not by their own employer; and this, I should have thought, is just the sort of risk that employers and employees ought to, and do, join together to ensure against in the National Insurance Scheme. The noble Baroness used the present tense in saying that this is not intended to be covered. But, my Lords, it has been covered for many years by the National Insurance Scheme, and it is a risk of this kind which ought to be spread over the whole contributing community and not just borne by particular employers on whom it happens to fall.
The noble Baroness also spoke of the cases where employers and employees—but perhaps here I ought rather to refer to what was said by the noble Lord, Lord Bowles, when he introduced the 1966 Bill. He said:
"At present workers who are on short time or are temporarily laid off can qualify for unemployment benefit, subject to a complicated set of rules. But these have caused difficulties and anomalies, and in some industries arrangements for short-time working have been manipulated to get round the benefit rule."—[OFFICIAL REPORT, 28/2/66, col. 491.]
I am aware that employers and employees in some industries have negotiated agreements about short time which took into account unemployment benefit in a way that probably was not intended under the National Insurance Act. In some cases this may have been done as an alternative to making a substantial proportion of the work force wholly unemployed. It was necessary to continue with short time in order not to lay off workers altogether. I wonder how much of the £3 million which these payments for short-term suspension are said to cost a year would have been paid out in longer-term unemployment benefit if these arrangements had not been made. I also wonder how many strikes might have resulted if some men had been paid off, instead of all the men working short-time, and what those strikes would have cost. I should have thought it would have been several times more than £3 million, so I am not sure that the £3 million has not been well spent.

81
My Lords, I should like to ask the Government what they expected to happen in the three-year period which is now running out. Did they really expect that in every single enterprise in the country agreements would be negotiated to take the place of National Insurance benefits? Perhaps the noble Baroness would tell us a little more about what guidance was given to these enterprises as to how to set about reaching agreement. She said that the First Secretary had been in charge of this aspect. Perhaps she could tell us also a little more about what is the state of play now. What are the Government doing now; and what do they intend to do? There have been reports that they were on the point of introducing legislation, to use the words used by the noble Lord, Lord Bowles, on February 28, 1966 (col. 492), "to make guaranteed week agreements compulsory."
I am all in favour of guaranteed week agreements to cover period of short-time working, but how on earth can one compel people to agree? Those were the words used: to "make … agreements compulsory". Is this really the purpose of legislation? Obviously there is no alternative to accepting Clause 1 of the Bill, because Section 3(1) of the 1966 Act cannot be brought into operation by March 10, 1969, as planned. In other words, the Government's plans have not worked out. In this case I suspect it was because the Government were not sufficiently clear in their minds at the start when they legislated about the objectives to be achieved and the steps needed to achieve them.
My Lords I would only add that if the Government's intention about legislation corresponds in any way with what I have heard here and there, it will be no great loss if the appointed day never dawns. At least this Bill gives the Government time to think again, and to think better; and to negotiate with industry in the meantime. And for that reason we certainly shall not oppose it to-day.
6.15 p.m.
BARONESS PHILLIPS: My Lords I should like to thank the noble Lord, Lord Drumalbyn, for at any rate welcoming the Bill generally. I will endeavour to answer the various points he raised. On the question of the Title, the noble Lord was quite correct in
82
assuming that "&c."—which I must say is not my favourite expression—included the other matters he mentioned, and obviously that goes a little wider than the title "National Insurance", The noble Lord made the point that after the 1966 Act the Government should have been busy looking into the question of getting voluntary agreements and so on. I am sure he will realise that extensive negotiations have been going on, but I think the more general reasoning which the noble Lord has presented to us to-day will show that there are definite lines of conflict on the very point he has raised, which is only one of many, on the question of suspended workers and so on.
Added to this, my Lords, we have had the new Donovan proposals. I think I should go no further with the Government's case than to say that the Government are sympathetic towards the objective of avoiding disqualification for unemployment benefit for people remote from an industrial dispute. Those, I think, were some of the people to whom the noble Lord referred. But these recommendations need further consideration in the light of comments so far made by the C.B.I., the T.U.C. and the nationalised industries. The Government intend to resume consultations on this matter as soon as possible. In other words, consultations are now in process of being resumed on some of these very "knotty" points—if I may use such a colloquial term—which the noble Lord has raised.
I can give the noble Lord a definite assurance that all the recommendations of the National Insurance Advisory Committee have been accepted. There will be one block of National Insurance regulations which will cover both late claims and the encashment. The adjudicating authorities, as the noble Lord suggested, are the insurance officer, the tribunal and the commissioner, in that order. The hard cases to which the noble Lord referred were not the 24,000; they were people who thought that they had not cashed these orders when in fact they had. I noted the noble Lord's suggestion that the £3 million should be spread over the whole of the contributing community. I am not sure whether there is any real difference between employers or the community meeting certain things, as I have a feeling, as a consumer, that

83
some of this must inevitably come back to us. But I take the noble Lord's point. The Government are anxious to get voluntary arrangements—
LORD DRUMALBYN: My Lords, if the noble Lady will allow me to interrupt her, may I say that up to a point what she has said is perfectly true. But surely this may happen in one part of the country, and it will be people in competition, employers in other parts of the country, who are quite arbitrarily hit by a strike for which they have absolutely no responsibility at all.
BARONESS PHILLIPS: My Lords, I take the noble Lord's point, having been in one section of the car industry where I saw this happening. It is because of this point, which has been raised so eloquently by the employers and to a certain degree by other sections of the negotiating bodies, that we cannot give a categorical answer now. The voluntary arrangements are those which the Government would seek for preference, and these are also under discussion. The noble Lord raised other specific points to which I will let him have a reply during the process of the Bill, or at any rate in writing. I should like to thank him for his general welcome and commend the Bill to your Lordships.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

EGGS (PROTECTION OF GUARANTEES) ORDER 1968
6.20 p.m.
LORD BESWICK: My Lords, I beg to move that the Eggs (Protection of Guarantees) Order 1968, a copy of which was laid before the House on December 19, 1968, be approved. The 1968 Order makes only one major change in the provisions for the protection of the guarantee: that is in Article 3, which removes the obligation on the packing stations to stamp first quality eggs on the shell with the weight grade, if they are hen eggs, or the word "Duck" and the packing station code number, and lays down an alternative method of identifying eggs eligible for subsidy. The arrangements for the testing and grading of eggs at the packing station are not
84
affected by this change. Another change which is made by the Order is contained in Article 4. This is purely consequential on the removal of the stamp.
Subject to a modification in the wording made necessary by the removal of the stamp, it effectively continues a prohibition which has been in operation since 1961 on the sale or use for hatching of eggs which have attracted subsidy. A further consequential change is the addition of a definition of "container" in Article 2. The remaining Articles of the Order deal with such matters as the keeping and production of records, the right to demand production of books, accounts and records and the service of notices. These Articles are primarily concerned with audit requirements and consolidate the provisions in the previous Orders.
It is generally known that during the last year or two there has been increasing pressure from the industry for the removal of the stamp. It has been argued that there has been growing evidence of a strong consumer preference for unstamped eggs as such, and that the sale of packing station eggs has therefore been unfairly handicapped. From the point of view of the protection of the guarantee, it was part of the original justification for the stamping requirements that they operated as an automatic safeguard against the fraudulent representation of eggs which had already attracted subsidy. For some years, however, the prices the Board pays the producer have been normally below the Board's wholesale selling prices so there is effectively no financial incentive to offer eggs to a packing station a second time.
The removing of the stamp raises issues going much wider than the protection of the guarantee. It was tabled in the wider context of egg marketing arrangements generally by the Farmers Unions and the Egg Marketing Board in the course of discussions with the Agricultural Departments in the first half of 1967. It was as a result of the far-reaching proposals put forward in those discussions that Ministers came to the conclusion that a fundamental reappraisal of marketing arrangements was called for and decided to set up the Reorganisation Commission. The conclusion of the Commission was that the case on marketing grounds for the removal of the stamp had been established. Their broad conclusion was

85
that the requirement to stamp was proving an increasing handicap to the sale of packing station eggs since it had effectively led to the creation of two markets, with the unstamped market increasing year by year and the stamped market showing a tendency to decline. The artificial separation of the markets for stamped and unstamped eggs has therefore been to some extent an accidental by-product of the statutory stamping requirements and the Board's own arrangements. The case for the removal of the stamp on marketing grounds has been strongly supported by most sections of the industry. From the standpoint of the protection of the guarantee, the case for retaining the stamp as a deterrent against fraud has lost its force.
It will still be necessary, of course, to ensure that testing and grading standards at the packing stations continue to be strictly enforced, and for this a satisfactory method will be required of identifying the eggs which are being passed for subsidy at the packing stations. We are satisfied that this need will be met by the marketing requirements in Article 3 of the Order. These apply to the bulk containers into which the eggs are packed at the packing stations, and require the packers to mark the containers of first quality eggs with the weight grade of hen eggs or the word "Duck" and the packing station code number. The present quality control and audit inspections at the packing stations will naturally continue.
My Lords, this Order is concerned solely with the protection of the guarantee, but the Reorganisation Commission recommended the removal of the stamp as part of a complex and far-reaching series of proposals for the marketing and distribution of eggs. Among the Commission's proposals were a number relating to the protection of the consumer. We are well aware of the importance of this and shall be giving further consideration to consumer protection aspects generally in consultation with the interests concerned. The Egg Marketing Board have been one of the leaders in the campaign for the removal of the statutory stamping requirements. As such they naturally withdrew their own stamping requirements as soon as the present Order came into operation.
86
Thus the whole of the purely artificial element in the distinction between the markets for stamped and unstamped eggs has now been eliminated. So far as the Order is concerned, the changes which it has brought about can be justified not only in their own right but also as a useful first step towards the objective of a basically free market for all home-produced eggs. I beg to move.
Moved, That the Eggs (Protection of Guarantees) Order 1968, be approved.—(Lord Beswick.)
6.27 p.m.
LORD NUGENT OF GUILDFORD: My Lords, may I thank the noble Lord, Lord Beswick, for explaining the technical effects of this Order and some of its implications. As he says, it is the first step towards the big changes which have ben foreshadowed by the Minister of Agriculture in the statement which the noble Lord gave us two weeks ago. There are one or two aspects on which I should like to make comment. First, I would welcome this Order. I am sure that it is a sensible step to eliminate the evolution of two different markets for stamped and unstamped eggs. I think it will be in everybody's interest to see the artificial barriers removed, with the disappearance of the "Lion" stamp. With regard to consumer protection, about which the noble Lord spoke, I think that the healthy lines of competition which are developing among the wholesale and retail trades in the marketing of eggs and in the branding of the consumer packs in which they are put up will be a powerful measure to protect the housewife from being supplied with other than first-quality fresh eggs.
But the effect of this measure is a first step towards the removal of the price guarantee structure of this commodity and therefore has far-reaching effects for the egg production industry. Here I should declare that I have a considerable interest in this matter on my own farm, as well as an interest in the industry generally. The removing of a commodity from the first Schedule of the 1947 Act is without precedent and nobody can predict exactly what will happen. Therefore, there is great anxiety among egg producers. The noble Lord spoke about the need to protect the consumer but I am sure that he will understand when I say a word from the point of view of

87
the producer. The long transition which the Government are providing—two years with the existing structure and three more years with some new structure under a new central authority—and at the same time the introduction of a system of import control by minimum import prices, seems to me a sound approach, giving long enough in the transition to make sure that it can be conducted in an orderly fashion.
The practical point which I should like to put to the noble Lord is that the Government must bear in mind that if they remove the subsidy they are in fact removing 6d. a dozen on every dozen eggs sold through the packing station. Obviously, if that were removed in one movement, all the producers selling their eggs through official channels now would be in danger of being either bankrupted or very hard hit. I am certain that the Government have no such intention. As I say, I think the lengthy transition indicates that it is the Government's wish to make it possible for this egg-producing industry to find a new equilibrium without subsidy.
During this transition period three things will be happening. First, with the disappearance of the machinery of the Egg Marketing Board to implement the assured price and assured market there will be big economies in transport and marketing costs. Secondly, the admirable trend to reduce basic egg-production costs will continue—though I suspect that the scope is narrower; and thirdly, the retail selling price in the shops will rise enough to give a reasonable profit margin for efficient producers after taking account of the first two factors. These three points are simply stated, but, of course, they are immensely complex in a large national industry like this, and have far-reaching implications.
To bring about this transition without causing hardship or disaster to the industry will require wise and skilful management by Her Majesty's Government, acting first through the Egg Marketing Board and, later, through the new Central Authority. The National Farmers' Union, as the noble Lord knows, are entirely opposed to this change, but in my opinion the majority of specialist egg producers who produce the bulk of the eggs, including the British Egg Associa
88
tion, recognise the logic of the Government's decision to make the change.
After all, subsidising a commodity whose production with modern methods could be doubled within twelve months makes little sense in the interest of either the producers or the taxpayers. In conditions of plenty, a subsidy has the effect of disturbing the natural balance of the market found by supply and demand, equating at a price sufficient to give a fair return to an efficient producer and a fair price which the consumer is willing to pay. So I think that when this transition is completed egg production will be put on the same basis as the highly efficient table poultry industry, which to-day is producing the cheapest meat on the market, and without costing the taxpayer a penny. Everything depends on this transition being made in a careful and orderly way, and on the effectiveness of the future import controls. I hope that the noble Lord, Lord Beswick, will be able to say in answer to these points that this is indeed the intention of the Government.
There are two or three questions that I should like to ask the noble Lord. The new Central Authority will have a difficult and important task in acting as a limited support power. Will the members be appointed by the Minister; and, if so, will they be chosen primarily for their trading and financial skill? Secondly, the Minister's Statement said that eggs will remain within the guarantee arrangements until March, 1974. Will the noble Lord explain what kind of guarantee arrangements will continue after the existing Board goes out of existence in March, 1971?
Thirdly, after March, 1971, will individual producers cease to have the right to require a packing station to buy their eggs? And will packing stations cease to have the right to require the Central Authority to buy surplus eggs for which they cannot find a market? Does this mean that after March, 1971, both producer and packing station will be responsible for finding their own egg markets? I imagine so. Fourthly, will the Government please reconsider their intention to raise a levy from the industry to finance the new Central Authority? All experience shows that the farming world is highly resistant to paying levies, and that this method of financing would

89
gravely prejudice the work of the new Central Authority.
I should like to conclude by paying a small personal tribute to the Egg Marketing Board, who really have done a great job for the poultry industry. They have made valued efforts to adapt the existing structure to meet present-day conditions, so different from those in which the Scheme was set up. Finally, in giving my support to the Order, I should like to say that I have confidence that the industry will measure up to this major change in its economy and continue to provide the nation with a plentiful supply of fresh eggs at highly competitive prices.
6.35 p.m.
LORD LEATHERLAND: My Lords, it is probably unexpected that one should rise from these Benches to say a few words in support of the Order which my noble friend has introduced. But we all know that this particular proposal, which is one that I welcome, is part of a large and rather complex pattern of reorganisation of the egg industry. I feel that it would be desirable that the full story of that new pattern should be made publicly available, particularly for the benefit of the industry, as soon as possible, and that we do not have it coming out in little dribs and drabs, possibly creating a sense of uncertainty among some of the egg producers.
This is a complex industry. It is becoming a large-scale industry—indeed, almost a factory industry. The days when the egg production of a farm was looked upon as the perquisite of the farmer's wife, and she collected her 50 or 60 eggs each week to give to a man who came round and haggled with her, are gone. We now have huge organisations, perhaps half-a-dozen of them in the country, producing chickens by the million and eggs by the tens of millions. It is a fact that this industry has got a little out of balance. Some of these big organisations are finding that the competition in the chicken industry has reached a stage of (shall I say?) maximum production, or over-production; that prices have been coming down and the chicken breeding industry is not so profitable as it used to be. In fact, some of these big organisations are switching over from the production of chicken for meat to egg production, and are looking forward to
90
being able to increase their activities on an enormous scale in the next few years. Therefore I think it is more essential than ever that the Ministry should be able to make available to these organisations as quickly as possible full information about the whole picture of the new scheme.
I have only one final comment to make. The noble Lord, Lord Nugent, who similarly welcomed this first step in the scheme, asked that on the new Board there should be members with trading skill. That is all right. But we do not want a system of syndicalism here. We want all kinds of people represented on the new Board. I suggest that the consumer must have a powerful voice, and one that is perhaps as powerful is that of the producer. I support the Motion.
6.39 p.m.
LORD BESWICK: My Lords, I must thank the noble Lord, Lord Nugent, for the welcome he has given to this Order and the changes with which it is connected. The noble Lord declared his interest in these matters. I think he might just as well have acknowledged his experience and knowledge; and the fact that he has this experience means that the welcome which he has extended is doubly agreeable to me, speaking for the Government. I should like also to thank my noble friend Lord Leatherland for what he had to say. His was an unexpected intervention, but nevertheless an interesting and useful one.
I was asked about the transition period. I agree with the noble Lord that there will be a time when there has to be a careful balancing of the phasing out of the old and the bringing in of the new. The noble Lord, Lord Nugent, asked for an assurance that it was the Government's intention that this change should be carried out in an orderly way, and that the future import control would be effective. So far as assurances go, I can satisfy the noble Lord. I give him the assurance that it is the intention of the Government to do this carefully and in an orderly fashion; and I think that spreading it out over the years to 1974 will enable precisely the kind of trouble-free change that we seek to obtain.
My noble friend Lord Leatherland said, "Let us not have information coming out by dribs and drabs". I appreciate the point he has made. At the same

91
time, I believe that if we can take one step at a time, as it were—and we are already taking one step by this Order—then that will be helpful to the producers. I have no reason to believe that the producers and all those concerned will not be kept informed as the changes are considered and brought about.
I was asked about the sort of people who will be appointed by the Minister—and they will in fact be appointed—to the new Authority. The noble Lord, Lord Nugent, was right in saying that we shall need people with trading experience. And, if I may say so, I think that my noble friend Lord Leatherland was also right when he said that we shall need on that Authority people with some consumer experience. It is the intention of the Minister, when making these appointments, first to consult all the interests concerned—packers, producers, distributors and the consumer organisations.
I was asked by the noble Lord, Lord Nugent (I am grateful to him for giving me an indication beforehand that he was going to raise this point), about how the system would work up to March. 1971, and between 1971 and March, 1974. At the present time the payments to the Board on behalf of the producers under the agricultural guarantee arrangements are taken into account by them in fixing the weekly minimum prices which they pay to producers. These central price-fixing arrangements will obtain up to March 31, 1971, and will cease as from that date. After that date prices will be determined by market conditions. But the central fixing of prices by a body such as the Egg Board is independent of the guarantee arrangements under the Agriculture Act; and subsidy payments under these arrangements—that is to say, under the Act—will continue to be paid to the industry after the demise of the Board, up to 1974.
LORD NUGENT OF GUILDFORD: My Lords, 1971?
LORD BESWICK: It would pay to the industry after the Board ends, up to 1974. The Board itself will end in 1971, and then there is still the period up to 1974.
As I announced in my Statement on January 22, the subsidy will be put on
92
to a flat-rate basis, being determined annually and paid to the new central body. The cost of support buying undertaken by the Authority will be the first charge on this payment, the balance being disbursed as a flat-rate subsidy to producers in respect of first-quality eggs sold to the packing stations.
The noble Lord asked whether the egg producers and packing stations will be responsible for finding their own markets for their eggs. After March 31, 1971, producers and packers will have to find their own outlets under normal commercial arrangements for the disposal of their eggs, apart from any taken up by the new Authority under its support-buying arrangements. The precise nature of these arrangements, of course, will be largely a matter for the new Authority, and I cannot go into details now.
The noble Lord referred again to-day, as he did when I made a Statement earlier, to the levies and the fact that they were unpopular in the farming community. I think I indicated then that I was not surprised he should raise this point; but he also will not be surprised to find that it is necessary to find money somewhere if this new Authority and the new arrangements are to be financed. He will agree, I think, that the new scheme is welcomed generally by the industry. He himself has indicated his support for the scheme, and the fact of the matter is that you either raise money by a levy or you have to go to the Treasury for additional money. As the propagandists of the Conservative Party are not slow to tell us, there is a limit to the amount of money the Treasury can collect from the consumer for the purpose of supporting agricultural products. I think, therefore, that on balance he will probably agree with me that if there is to be a levy it will have to be raised from the industry in whose support it will be expended. All I can tell him here, as a kind of solace, is that, while I acknowledge the sensitivity of the agricultural community on levies, they will be fully consulted as to the way in which this money will be raised. My Lords, I hope that I have answered the questions put to me, and that we can now approve this Order.
On Question, Motion agreed to.

ROADSIDE RUBBISH DUMPING
6.46 p.m.
LORD HAWKE LORD HAWKE rose to ask Her Majesty's Government whether they are satisfied that the existing arrangements are adequate to cope with the problem of the dumping of large items of rubbish by the roadside. The noble Lord said: My Lords, I have twice before raised this subject in your Lordships' House, but not for a number of years. I thought it was about time that I returned to the charge, for in the meantime I do not think the problem is getting any better and the incentive to dump rubbish in the countryside is all the time increasing. I quote from an American paper:
"The recent rapid growth of the affluent society gets a large share of the blame for the rising tidal wave of garbage. The affluent society is a spending society, one in which making do with an old television set for as long as possible is no longer fashionable".
However, if one wants to be unfashionable and keep something working for a long time one is up against what the general public believes to be a form of built-in obsolescence which appears to be a feature of so many of the products of modern industry.
The combination of an increasingly affluent society and early obsolescence is building up enormous problems for those responsible for getting rid of Britain's discarded rubbish. They may be able to cope with the ordinary day-to-day refuse collections—in fact if they could not do so there would be a serious health problem in the country—but in the field of consumer durables, the large empty containers, et cetera, present problems which it is often much easier to overcome by dumping on a dark night than by going through the official channels. It is not possible to quantify the problem with any certainty, but these figures may be illuminating, or indeed in this particular respect may be rather ominous. There are about 14 million vehicle licences running in this country; about 15 million television licences; refrigerating and washing machines are each sold to the extent of about 600,000 a year; and cookers to the extent of over a million a year. Every one of those items will eventually have to be disposed of. Of course, the old "banger" is the thing that always comes first to mind. There
94
will soon be something like a million a year of these to get rid of as the higher output of the 'fifties begins to pack up.
In Circular 8/65 of February 11, 1965, the Ministry wrote to all the local authorities, full of wise words and helpful platitudes; and I read one section, Section 11(3), from that circular:
"Section 74 of the Public Health Act 1936 empowers local authorities to make a charge if they think fit for accepting a motor car for disposal, but private owners will be most likely to make use of the disposal arrangements if the service to them is free. Old cars are usually abandoned by people who are no longer able or willing to incur any further expense on them, and even a nominal charge may prove to be a deterrent. If cars are accepted at the Council's depots or yards, more people are likely to bring them along if the depots can be kept open outside normal working hours, e.g. at fixed times and on Saturday afternoons and Sundays."
Those are words of unexceptionable wisdom and one wonders how many local authorities have followed this advice. But, of course, the old car is only a fraction of the problem. There are parts of cars, there are old oil drums, tins, tyres and various motor trade relics. Then there are the household discards—beds, bedding, bicycles, the remains of home decorating, wallpaper scrapings, paint tins and so on. Then there are appliances such as cookers, washing machines, refrigerators, television sets, wireless sets and the like. There is a rising tide of these things, reflecting increased sales in the last dozen years, and built-in obsolescence.
Then one finds stuff which appears to come from builders' operations—broken basins, lavatory pans, paint tins. Then there is the smaller stuff which somehow manages to escape the dust cart: waste paper, food tins and—horror upon horror!—one of my noble friends has told me, as a brewer, that there is a rising tide of non-returnable beer bottles Which is shortly about to burst upon us. In this context one has to remember that there are increasing numbers of people who, even if they had the space to have a bonfire, are not allowed to do so by the laws of this country.
When I have raised these matters in the past I was well aware that the arrangements for collection of what might be termed "abnormal rubbish" left much to be desired. First of all, the private householder either had to make

95
arrangements for a special collection, which might take a long time to come about, or else had to get written permission to take his rubbish to a council tip and probably pay a fee, and go there during working hours when he himself was working. That is all rather frustrating. If one was a trader one had to pay twice for the stuff to be removed: first in the rates, and secondly a special fee for taking away trade rubbish. I hope the noble Baroness who is to reply will tell us what is being done at the moment, though one must remember that her reports will sometimes be based on what people think they are doing rather than on what other people think is actually being done.
What do we know about what is being done? One's knowledge is always confined to small areas, and I do not think the situation is any different from what it was four or five years ago. I note from the Press that at the end of 1965 the Westminster City Council was offering to remove cars for £2. The previous February they should have received a circular from the Ministry suggesting that cars should be taken away free. I wonder what they are doing to-day. In the Financial Times of October 16, 1967, Mr. Wellings, the Managing Director of the George Cohen 600 Group, wrote:
"Within a matter of months the South of England will no longer have a scrap car problem. Instead of being a nuisance, abandoned cars will become highly desirable sources of top quality steel scrap."
He was writing of a plant at Willesden to deal with up to 400,000 cars a year—a very large figure. The problem is, do they all get to Willesden? If not, why not? From my observations I think Mr. Wellings may have been a little optimistic.
However, cars are only a part of the problem. All in all, the temptation to go out on a dark night and dump is considerable, and so far as I know it is rare for anyone to be caught. Perhaps the noble Baroness will have some information on this subject. There must be tens of thousands of "dumpers" during the course of a month, and I wonder how many of them are caught. The local authorities have their difficulties. They are short of vehicles, they are short of staff, they are short of tipping space. But
96
the whole system of finance tends to discourage the proper tackling of the problem. Most of the rubbish obviously originates where most of the people live—that is, in the urban areas—and if the urban local authorities do not provide an acceptable alternative to dumping at the source of the stuff then dumping will take place, and it will take place largely in the rural areas. Thus the poorer rural local authorities are expected to clear up the mess left on them through the shortcomings of the richer urban authorities. In the circumstances, the urban local authorities may say, "Why should we spend money? Provided the stuff is dumped outside our boundaries, we have no further interest in it".
What about America? I summarise from an American paper of July, 1966, and another article written in that same year. There were then 40 to 50 million automobiles on the nation's scrap heaps. Twenty-five thousand a year were being left in New York streets alone. There were special sites to which the public were invited to bring their scrap cars, but the response was poor, and the city had to remove them at a cost of $4.95 each. But there was no guarantee that those cars could be turned into scrap, as it was becoming increasingly uneconomic to do so. The question of the economic value of scrap is a fluctuating one: sometimes scrap is highly economic while at other times nobody wants it. The Ford company was arranging for two Luria plants at Dearborn at $350,000 each, to provide pure steel scrap. I wonder whether they were a success. General Motors company was making a study of the problem. American Motors gave $1,000 a year to the person who made the most significant contribution to the problem. I do not know what the British automobile industry is doing in that respect. New York was thinking of sinking the cars at sea to provide cosy corners for fish.
When one comes to garbage in general, which of course includes the subject of this debate but goes rather beyond it, the problem is severe on the other side of the Atlantic. Chicago estimated that its land-fill area will be exhausted within two or three years. New York's incinerators put 17,000 tons of soot into the air every year and had to be closed down at times because of the dirt it

97
caused. Belgium has doubled its production of waste in ten years. Tokyo has trebled it in ten years, and Philadelphia and Chicago are both considering a plan to rail rubbish up to 250 miles to fill in old mines and quarries. America is undoubtedly the society of "Buy and scrap". But everything that the Americans do to-day tends to find its way across the Atlantic, sometimes immediately, sometimes some years later, so we must be prepared; and are we prepared?
I summarise from an article in the Sunday Telegraph of November 3, 1968, entitled "Losing the battle against dirt". The Westminster Director of Cleansing was reported as using words to the effect that we are paying for cheeseparing in the past, and in two or three years' time people will have to wake up to the problem. The article also claims that British makers of a revolutionary rubbish disposal plant, selling for some £400,000 apiece, had export orders worth £20 million but they could not sell one in Britain. Perhaps they have since that date; the noble Baroness may know.
To sum up, we have as the basic problem a growing and increasingly prosperous society, owning more and more goods which appear to be becoming less and less durable. We are trying to cope with the resulting increasing volume of discard by methods which we have thought satisfactory in the past but which in fact we know perfectly well have not been satisfactory. We have reinforced this system by laws and penalties against dumping which are virtually unenforceable. Dumping is now the cheapest and easiest way to get rid of large, unwanted articles. To clean up the resulting mess must cost more than the provision of a proper collection at source. The trouble is that the cost of collection and the cost of cleaning up the countryside does not fall on the same authorities. If it did, the problem might not exist. If we want to solve the problem we must produce a system of collection which is just as cheap and convenient to the individual as dumping. We are far from being on top of the problem now, and unless we are careful it may get on top of us in the future.
7.3 p.m.
EARL JELLICOE: My Lords, I am very glad that my noble friend Lord
98
Hawke has brought this matter to your Lordships' attention this evening. It is not for the first time: I think he had a Motion littering the Order Paper for quite a long time on this general subject. But it was far from a rubbishy Motion, because this is an important matter, and I am very glad that he has this evening reinforced what he said in the past. I am glad, too, to have the opportunity of reinforcing, in so far as I am able to do so, what he has said. I note that the noble Lord, Lord Byers, has a Motion down in about two weeks' time drawing our attention to:
"the increasing threats to man's environment and the quality of life."
I can think of no threat more immediate than the problem of disposing of the rubbish which our modern industrialised society tends increasingly to throw up.
I should like, if I may, to quote some words from an admirable Report by that admirable organisation the Civic Trust, a Report which I am sure the officials, with their usual solicitude, have brought to the attention of the noble Baroness. In that Report it is stated:
"In an age of few landmarks there is one that is more familiar and less appealing than any other. This is the illegal rubbish dump. Its appearance is unmistakable. Above a treacherous deposit of broken glass and rusty corrugated iron probably partly hidden by nettles, rears a grotesque still life of empty oil drums, discarded cookers, leaky water tanks, dismembered bicycles, treadless tyres, decomposing furniture and disintegrating prams."
All those are items of which my noble friend reminded us, and he reminded us of many more. But, of course, these cookers and bicycles, furniture and prams, which may have been things of beauty when new, are not a joy for ever, and certainly not when they find themselves on top of a rubbish heap in the middle of our countryside.
I confess some personal interest in this matter. I had the honour to pilot through your Lordships' House a couple of years ago the Civic Amenities Act, the brainchild of my right honourable friend Mr. Duncan Sandys, and I should like to acknowledge the help the Government extended, in the person of Lord Kennet, to the passage of that Bill. I think that on that occasion we received more than wise words and helpful platitudes from them. I know that this matter is exercising the Government's attention.

99
There was, for example, the working party on Refuse Collection which recently reported. Against that background I would remind your Lordships of the provisions of Part III of the Civic Amenities Act, in particular, since my noble friend referred a great deal to the increasing problem of disposal of our old motor cars, and the problem of general rubbish. Section 18 of that Act lays on local authorities the duty to provide rubbish dumps. Section 19 provides for increased penalties on the individuals who dump. Section 23 confers a power, but not a duty, on local authorities to remove rubbish of this nature.
I should very much like to ask the noble Baroness, avowing a certain paternal interest in this child, how the child is faring. In general, are the Government satisfied that the provisions in this respect of the Civic Amenities Act are working? More specifically, following up my noble friend's point, what about the provisions regarding disposal of motor cars? Again, how are the specific sections to which I have referred, about more general rubbish, operating? Are the Government satisfied with the working of Section 18, the provision of suitable rubbish dumps? I think that local authorities, unless they received an express extension from the Minister, had until July of last year to provide these rubbish dumps. Have they done so? Have the dumps been properly sited? Have the local authorities combined intelligently together to provide these essential rubbish dumps, as the Act provides for?
Have they brought this legislation, the Civic Amenities Act, to the attention of the people concerned, the potential dumpers? I was disquieted at what the Civic Trust Report said: that two-thirds of the local authorities concerned had done nothing to publicise the provision of rubbish dumps. Again following what my noble friend has said, may I ask how many prosecutions have been brought under Section 19, first dealing with motor cars, and then the more general part dealing with more general rubbish? What about Section 23, this power, but not mandatory duty, given to local authorities to remove the rubbish which is cluttering up our towns and countryside?
100
I have fired a number of questions at the noble Baroness, and I do not necessarily expect to receive this evening specific answers to all of them. But I should very much like to know what the Government's general thinking is about the operation of this not unuseful Act.
That brings me to my final point, and that is to ask what are the Government's views about a collection service for more bulky refuse. It is a big problem; it is a big physical problem. Again I am referring to what I have read in this report from the Civic Trust. It refers to one London borough's experience in operating a free collection service for old furniture. In one year that one London borough has collected over 4,000 tons of old furniture. I reckon, by a process of quick but no doubt faulty arithmetic, that if all the London boroughs were operating a free service of that sort they would collect in one year 120,000 tons of old furniture—the weight of the two Queen Elizabeths. So it is clear that we are dealing with a very large problem, in both physical and financial terms.
I am also worried in this respect to read that, of the 1,361 local authorities who replied to the questionnaire submitted to them by the Working Party on Refuse, nearly 80 provide no facilities at all, whether free or paid-for, for the collection of bulky domestic refuse—the sort of items that will not go into one's garbage bin.
LORD HAWKE: My Lords, may I ask my noble friend one question arising from this Report? Did they by any chance say whether, if any of the 4,000 tons could have been put up for auction at Sotheby's, it would have paid for the whole cost of collection?
EARL JELLICOE: My Lords, I fear that at Sotheby's these items would be knocked down for a small price, even in these days of inflation and rising prices. More generally, I should very much like to ask the noble Baroness what are the Government's views on this large problem of the collection of the larger items of domestic refuse; and what are their views on what their own Working Party has said about that particular problem. It is a difficult one, not only in physical terms but also in financial terms. But

101
I should like as clear an indication as possible of the Government's thinking about this problem.
As I have said, I am glad that my noble friend Lord Hawke has again ventilated this matter, I hope not for the last time. I make no apology for my brief intervention, because I believe that this is an important question, an important matter for all those who care about the visual beauty of these still beautiful Islands. And I hope that the Government not only attach as much importance in theory as does my noble friend to this matter, but also that they are determined to do something practical about it to help both the local authorities and the individual and voluntary organisations concerned to clear up the mess which at present litters these Islands, and the mess which is still to come.
7.13 p.m.
VISCOUNT FALMOUTH: My Lords, I should like to intervene briefly in this matter to congratulate my noble friend on once more asking and calling our minds to this Question. We have the Civic Amenities Act 1967, Clause 19 of which deals with wrongful dumping, but this seems to have done little or nothing to stop the dumping of old cars in our district. Hardly a fortnight goes by without my finding, or my head woodman reporting to me, another car dumped in some part of the woods in my neighbourhood in Kent—though I should like to say that we in Kent get the greatest help from the local rural district councils in this matter, acting, I imagine, under the Civic Amenities Act. Nevertheless, the problem is a real one to those who value the tidiness of their woods and properties, and the clearing up leads to a great waste of time for foresters and their staffs who would be much better employed in planting and maintaining plantations.
I say, as it must have been said a thousand times before, that nothing mars the beauty of the Garden of England in May more than a broken television set, an old electric cooker, the bones of a car picked clean by those vultures, the spare-part acquirers, flung to the roadside by an orchard, giving some truth to the old thought that "only man is vile." To help mitigate this nuisance I would ask the Government to try to see that local county councils and road authorities take
102
no more land than is absolutely necessary when making road improvement schemes, thus preventing the possibilities of rubbish dumps developing. Rubbish tends to gather rubbish where it has been tipped before.
I would enter a plea also for greater publicity of the facilities for disposing of old cars, perhaps through colour photographs of bad spots, and posters in the towns. I would suggest especially that they be put on view at garages and local petrol pumps. I greatly hope that the Government will do everything in their power to prevent this unnecessary defacement of the beauty of our land, and will give encouragement to all those who enjoy seeing and keeping our country trim and tidy.
7.16 p.m.
LORD AUCKLAND: My Lords, the despoliation of the countryside through this menace which my noble friend Lord Hawke has mentioned is, I think, of concern to all lovers of rural areas; but I should like to discuss this matter briefly from a rather different angle. As a Vice-President of the Royal Society for the Prevention of Accidents I know how concerned the Society are at the dangers which particularly these dumped cars present to children if their curiosity causes them to go and tinker with them. In a spinney near where I live in Surrey, there has been for a number of weeks a car of unknown vintage, and two or three times when I have taken my children for a walk on Sunday afternoon in this particular area, my small son has shown a curiosity to go and take a look at it, Fortunately, I have so far been able to restrain him.
These are objects which have a natural curiosity particularly to small boys, and as any simple-minded scientist will know, rust can gather quite easily on these objects and children can cut themselves on the jagged ends of wings of these cars and other objects and may receive a nasty injury. This is not to set aside the dangers of an explosion which may take place. I wonder whether the noble Baroness has any figures of accidents which have been caused by this means. Obviously, I do not expect her to have figures available this evening, because I have not given her notice of this particular question, a matter for which I

103
must apologise. But there is a real danger, not only from old cars and so on, but from broken glass and other objects which litter the countryside. If people step on them, or otherwise come into contact with them, injury can be caused and our hospitals may be put under even more strain than that to which they are subject now. I think this is an important aspect of my noble friend's Question.
I should also like to ask the Government whether they are aware of the good work done by the "Keep Britain Tidy" movement. I happen to be a rather inactive representative of ROSPA on this particular organisation, and in many areas they have organised young people to go to fetes, and to other places where litter is freely scattered, and to clean up the mess. Of course, one of the main difficulties must be the shortage of labour which local authorities face. I would ask the noble Baroness again how many complaints there are from bodies—particularly in respect of main trunk roads, where litter bins are emptied so infrequently—that old picnic remains and the like litter the roadside. My Lords, I hope that, in addition to the very important points which my noble friends have raised in this short but very valuable discussion, the question of safety will also be considered by the Government.
7.21 p.m.
BARONESS SEROTA: My Lords, I must first join with other noble Lords in thanking the noble Lord, Lord Hawke, for raising this matter again to-day. I feel that he should make no apology for doing so, because we all appear to be agreed that this is a problem that requires continuing attention if we are to deal successfully with the bulky waste assets of modern industrial society which can so disfigure our urban and rural environment. As the noble Earl, Lord Jellicoe, reminded us, it gives us a welcome chance to look at the important amenities legislation dealing with this subject which came on the Statute Book only 18 months ago in the shape of the Civil Amenities Act, to which the noble Earl himself acted as a foster parent and which he successfully piloted through your Lordships' House.
Your Lordships will recall that the Act goes far beyond the specific matter
104
that we have under discussion to-night as a result of the Question raised by the noble Lord, Lord Hawke. Parts I and II of the Act deal with the setting up of conservation areas, and the preservation and planting of trees. It is Part III of the Act which deals with the subject of the noble Lord's Question to-night. I think the trouble in the past was that there was no comprehensive code of legislation which dealt with the problem of abandoned rubbish. In the absence of such a code it resulted in the public being in something of a dilemma. It is easy for us to say that the way in which people used to leave old cars by the wayside, or dumped other articles wherever they fancied—and some, I am afraid, still do—was deplorable and irresponsible, but if there is anything at all which can be said by way of extenuation it must be fairly said that people simply did not know what else to do with their bulky, unwanted property. This dilemma has fortunately now been resolved by the 1967 Act, which imposes on each local authority—in London on the Greater London Council and elsewhere on the county boroughs and county district councils—a duty to provide places where its residents may conveniently leave, free of charge, their old vehicles and other articles which otherwise they might be tempted to abandon.
I would tell the noble Lord, Lord Hawke, and the noble Earl, Lord Jellicoe —indeed I think the whole House will be interested to know this—that to date only three authorities have been temporarily excused this duty, and these postponement orders will cease on August 1, 1969. One is a borough authority, one an urban district, and another a rural district. Having thus removed any possible excuse for the irresponsible dumping of unwanted things in unauthorised places, the way was paved by this Act of Parliament for providing heavy deterrents against anyone who, despite the facilities provided by local authorities, still behaves irresponsibly, and the Act provides severe penal sanctions for those convicted of abandonment.
I have been asked whether I can give figures of prosecutions and penalties imposed. In the inquiries I made when I knew that this Question was being asked I myself naturally asked the same questions. I am afraid I cannot give a specific

105
answer to your Lordships to-night because, unfortunately, the figures have not been collected in relation to this part of the Civic Amenities Act 1967, but I can give your Lordships an undertaking that they will be available by 1970. Although it is not for me to encourage the noble Lord, Lord Hawke, to go on "nagging" I have little doubt, in view of his past record on this subject, that he will continue to press for the outcome of this particular legislation.
LORD HAWKE: My Lords, may I put one point to the noble Baroness. She is giving an ideal picture, as I said she would, but in my particular area I have never heard of these wonderful rubbish dumps which are alleged to exist everywhere. I have seen no notice saying that there is a rubbish dump and I have seen no notice in the local paper. I rather think that her picture is an idealistic one and that the general public do not know about these things.
BARONESS SEROTA: My Lords, unless the noble Lord lives within one of the three temporarily exempted districts I have just mentioned, I will undertake personally to find out for him where his rubbish dump is.
EARL JELLICOE: My Lords, I apologise for interrupting the noble Baroness, but it seems to me that it would be highly advisable that the local authorities should undertake adequate publicity, pointing out and bringing to the attention of those who live within their boundaries where the rubbish dumps are. It is a point to which I know the Civic Trust have attached great importance, and rightly so, and I was wondering whether the noble Baroness would ask the Ministry concerned—and I think it is quite possible for her to communicate without undue difficulty with the Ministry concerned—whether they would consider bringing the need for publicity to the attention of local authorities.
BARONESS SEROTA: My Lords, I take the noble Earl's point and I will certainly draw my right honourable friend's and my noble friend's attention to the concern that has been expressed in the House to-night about the need to make this knowledge readily available to ordinary citizens in all the areas where the provision has been made.
106
The noble Lord, Lord Hawke, spoke with particular reference—and quite naturally in view of the growing problem involved here—to the special provisions which we need to make to deal with abandoned motor vehicles. Here, again, the 1967 Act puts local authorities under a mandatory obligation to remove any motor vehicles abandoned in their area, with only one exception. This was the point which my noble friend Lord Kennet made during the Committee stage of the Bill, and I do not think there is any need for me to repeat the particular points he made then. I would remind the House that these provisions of the Bill have been in force only since July 27, 1968, and in the case of the removal of abandoned vehicles there is only one authority in the country that has been temporarily excused this duty. Noble Lords may well question why a year was allowed to elapse between the passing of the Act and the implementation of this section. It was felt, and I hope your Lordships will agree, that it was prudent to give local authorities a year of grace after the enactment of the Bill in which to prepare themselves for this and the related duties under the Act.
The noble Lord, Lord Hawke, made particular reference—and drew here on experience in America and in other parts of the world—to the introduction of car crushing and waste consuming and salvage plants. Your Lordships may be interested to know that at present there are already in operation in this country three very large pulverisation plants designed to shred within seconds a complete motor car to what I understand to be fist-sized fragments. The shredding process is followed by magnetic extraction of the valuable ferrous scrap. A worn-out motor car can, therefore, be regarded in the future as perhaps something of value rather than something that people want to dispose of quietly and secretly on a dark night. It may be that when the new process is more generally available it will largely end abandonment by removing its cause. The three plants that already exist in this country are situated in London, Waltham Cross, and St. Helens.
I was asked by the noble Earl and by the noble Lord, Lord Hawke, to say whether the Government were satisfied with the present situation, and I have

107
already indicated that the particular provisions of this Act have been in force for a very short period. To sum up the Government's approach here, they are satisfied with the tripartite attack which is made on this problem of abandoned rubbish by Part III of the Bill. First, the Bill has imposed a duty on local authorities to provide places where rubbish may be deposited by the public; second, it outlaws dumping by heavy penalties; and third, it requires local authorities to remove abandoned vehicles and gives them wide powers to remove other abandoned rubbish. I am sure your Lordships will agree that arrangements in the Act, which were welcomed generally from all parts of the House, are both a great advance on the previous situation and thoroughly constructive in scope. It is early days yet to judge what will be their full effect, but so far as is known to the Government there has been nothing specific from local authorities or the public to suggest that they are not matching up to the needs. Nevertheless, noble Lords have drawn attention to certain specific points concerning them, and I will do my best tonight to answer the particular questions which have been put.
The noble Earl asked about the general attitude of the Government, and particularly the Ministry, on help and guidance to local authorities, and about the Government's views on the provision of a free service. He asked whether it is felt that sufficient progress has been made by local authorities over the whole scope of Part III of the Act since it was passed some eighteen months ago. Immediately the Act came into operation my right honourable friend issued a circular asking local authorities to begin to make provision to implement the various provisons which were made in it, and in October, 1967, that admirable body, the Civic Trust, held a one-day conference in London to discuss the implementation of the Act. My right honourable friend was present at the conference—indeed, he opened it—and it was widely attended by local authority organisations and others concerned. Appropriate regulations have been made under various sections of the Act, including the detailed procedures to be followed by local authorities when they remove and dispose of abandoned vehicles. The re-
108
port of the Working Party on Refuse Collection, to which the noble Earl referred, has been the subject of a circular by my right honourable friend commending it in broad terms to the local authorities and asking them to implement it wherever possible.
I was asked about the attitude of the Government to free collection. It is true that some progressive authorities make provision for free collection from individual householders; other authorities do not do so. But, as was pointed out at the Committee stage of the Bill, there is little doubt that any attempt by the Government to impose—if any Government were prepared to do so—on local authorities a mandatory duty to provide a free collection throughout the country would create difficulties, particularly at this time of considerable economic stringency. My right honourable friend, in circulars and in guidance to local authorities, has encouraged them in this direction. And there is little doubt that there is much greater incentive to people not to dump their large items of rubbish if they are collected by a door-to-door service. I would stress again our hope that, now that we have a system where, in all but three areas, local authorities have made provision, people will take their items of refuse to these large dumps, and so avoid incurring the penalties provided in the Act, until some such time as a fully free service is made available.
EARL JELLICOE: My Lords, the noble Baroness referred to the facilities which have been provided in all but three areas. What puzzles me is how the unmotorised citizen gets his rubbish, if it is hulk rubbish, to these dumps. It seems to me to be important that, in addition to the provision of dumps, there should be facilities for the collection of bulk rubbish at home, whether they be free or paid for. What also worries me is the fact that in a number of authorities no such facilities are provided. Is it the Government's view that such facilities should be provided, even if they are not provided free?
BARONESS SEROTA: My Lords, many authorities already provide facilities on payment. I do not have the figures with me; I will find out the latest position and let the noble Earl have them in writing. Clearly, there is a problem with elderly people who have no motor car

109
and who require a collection of this kind. It would be of great advantage to them if it could be provided on a door-to-door basis, but I will make inquiries and let the noble Earl know the result.
The noble Viscount, Lord Falmouth, raised an individual case in his own area, and I personally should welcome any individual examples of the kind he gave, so that they could be looked at by the Department in conjunction with the local authorities concerned.
Finally, the noble Lord, Lord Auckland, raised the general question of danger to children in the context of abandoned vehicles. If I were not speaking from this particular position, I might raise this matter in connection with other large items of abandoned rubbish as well. This is a serious problem and one that has caused considerable concern. Indeed, during the Committee stage of the Civic Amenities Bill several noble Lords questioned the need for the provision in the Bill requiring local authorities to wait for seven days until they remove a wreck. I think it was the noble Lord, Lord Silkin, who mentioned the danger of children throwing a match into a petrol tank which still contained petrol. This matter clearly presents a difficulty.
On the other hand, it was the general feeling of the Committee at that time, when dealing with that particular clause, that seven days was the minimum notice one must give to an owner before a vehicle wreck was removed from the place in which it had been abandoned. Abandoned vehicles not only cause dangers of that kind: any stationary vehicle on a public highway can be a danger, in that it can block access and impede ambulances, fire vehicles and other emergency vehicles. The noble Lord's point has been taken; the House has already discussed it, and I personally hope that local authorities will be constantly aware of it.
My Lords, I hope that I have dealt with most of the specific points which have been raised. We all join in thanking the noble Lord for raising this matter to-night; it is one of which we constantly need to remind ourselves. I hope that this short discussion will serve to remind private citizens, local authorities, and indeed the public at large, that this is a
110
matter on which we must be eternally vigilant. I hope that it will encourage local authorities to continue to improve their provision, and certainly it should be a reminder to all of us, as individual citizens, of our responsibilities in this matter.

DEMOLITION OF CHIPPING NORTON HOUSES
7.38 p.m.
LORD MOLSON LORD MOLSON rose to ask Her Majesty's Government whether the decision of the Minister of Housing and Local Government to allow the demolition of certain houses in New Street and the Market Place in Chipping Norton represents a departure from its previous policy as stated in Circular 61/68 dated 4th December, 1968. The noble Lord said: My Lords, in a letter dated January 2, in which the Minister of Housing and Local Government indicated that he was prepared to acquiesce in the destruction of certain houses, he referred to Chipping Norton as an "historically important Cotswold town." In the same letter he mentioned that the Council for British Archælogy regards it as exemplifying a well-preserved ancient town plan, still containing a number of attractive old houses and buildings. That is why the Georgian Group and the Society for the Protection of Ancient Buildings are particularly indignant that acquiescence should be shown by the Minister in the destruction of these buildings. The Minister also emphasised that this is a town specially deserving of conservation under the provisions of the Civic Amenities Act.
The proposal to which the Minister has agreed is to demolish a number of typical old houses—not perhaps of outstanding architectural or historic merit, but nevertheless charming houses, and again, in the words of the Minister: "at least one, namely, No. 11 Market Place, of statutory list quality". And all this is to be done for the purpose of road widening. The argument is that this widening of the road will make for road safety. It is not contended for a moment that it will be a satisfactory or permanent solution: it is merely a temporary expedient. It is not clear that it will in fact reduce the danger of accidents.
Eighty per cent. of the traffic using this road is through-traffic. That was shown in a traffic survey organised by the Oxfordshire County Council. The effect of doing away with these houses will of course be to encourage even more through-traffic to pass through Chipping Norton, and it will be able to do so at an increased speed. It is not at present a dangerous place. The county surveyor has given us the figures of the accidents during the last few years. The accidents were: In 1957, one slight one; in 1958, one slight one; in 1959, two of which one was serious; in 1960, three of which two were serious. In 1961, 1962 and 1963, there were no traffic accidents at all; in 1964, there was a slight one; in 1965, there was none, and in 1966 there were two slight accidents. And, my Lords, 7,000 vehicles use that road every day.
I am not unduly impressed by the pressure of the Ministry of Transport for the widening of this road. I was myself for two and a half years Parliamentary Secretary to the Ministry of Transport. I was Chairman of the Road Safety Committee; and deeply concerned I was to reduce the number of accidents, especially the particularly tragic accidents to children. But I was not of the opinion that facilitating rapid transit of through-traffic in built-up areas was the best way of reducing the danger of accidents of that kind. As you go about London, your Lordships must have noticed in how many cases pavements have been extended at corners, not to facilitate easy movement of vehicles but to obstruct them. That is done in order to reduce the number of accidents and the gravity of the accidents that take place. There may often be buckled mudguards in a congested area, but because vehicles find it impossible to travel at a great pace there is a comparatively small number of fatal, or even serious, accidents.
The Minister, in his letter of decision, said that this widening of the road was not a solution, and the noble Lord, Lord Kennet, emphasised this when answering a Question in this House on January 29. He said:
"… a relief road to take through-traffic … is the ultimate solution for Chipping Norton's traffic problems".—[OFFICIAL REPORT, 29/1/69, col. 1163.]
112
When he was further pressed upon the subject he came back to the same point and said:
"… as I said in my original reply that"—
and "that" is a by-pass…
"is the only proper solution; but unfortunately it is a somewhat long-term solution and in the meantime the risk was unacceptable."—[Col. 1165.]
I have contended that there was no great risk in the short period and the experience of the last ten years shows that that is so.
The demolition is to take place before the conservation survey. Irreparable damage will therefore have been done before we know whether or not it is necessary. That is what is being done. That is the policy to which the Minister has given his agreement. The purpose of this Question is to ask whether and how the Minister reconciles this with Circular 61/68 dealing with the new Town and Country Planning Act. This was sent out to all local authorities as a guide on how they were to act. In paragraph 8 of this Circular the Minister directs local authorities to notify specified persons of any application for consent to the destruction of listed buildings. He goes on to give a number of bodies who are to be notified—the Ancient Monuments Society, which objects to this proposal; the Council for British Archeology, which objects to this proposal; the Georgian Group, which objects to this proposal; the Society for the Protection of Ancient Buildings, which objects to this proposal; the Victorian Society, which objects to this proposal; the Royal Commission on Historic Monuments, England, which objects to this proposal.
Then, in paragraph 6, the Minister gives guidance to the local authorities as to how they are to conduct themselves:
"Local authorities should be specially vigilant for preservation."…
the authority concerned here is the Oxfordshire County Council.
"As owners of many listed buildings themselves, they should set an example to other owners: and in this there have been too many failures—some of them flagrant."
The houses that are going to be demolished have been acquired by the Oxfordshire County Council. This Circular also refers to an earlier Circular that was sent out, dealing with the Civic Amenities Act.

113
In paragraph 14 of Circular 53/67 the Minister said:
"… the Government and local authorities have a special responsibility in this matter, not only because the powers of control are in their hands, but also because they are themselves the owners of many listed buildings"—
as the Oxfordshire County Council is the owner of these listed buildings in Chipping Norton—
"and thus able to set an example to other owners".
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I wonder whether the noble Lord would yield for a moment. Although the local authority owns the buildings, they are not listed.
LORD MOLSON: Just to complete my quotation:
"They lay particular emphasis on this last point".
On January 29 the Parliamentary Secretary said, at col. 1163:
"… this corner is a pleasant part of the townscape, although only one of the houses to be demolished is listed as being of special architectural or historic interest".
That is what the noble Lord is reported in Hansard to have said.
LORD KENNET: My Lords, I think it may be for the assistance of the noble Lord and the House if I say now what I would have said later, which is that in saying that I inadvertently misinformed the House. There are no listed buildings at all in this group of houses. The one in question, No. 11 Market Place, is of listable quality but has not been listed. I shall be explaining the circumstances later.
LORD MOLSON: My Lords, I am very much obliged to the Parliamentary Secretary for correcting me, or shall I say for correcting himself, because in point of fact that is what he said and I thought it permissible to quote it. I do not think that in substance it matters very much whether the building in question had been listed, which means that it had been approved for the purpose by the Minister, or whether it was of listable quality and had been recommended by an inspector for that purpose. In point of fact, I think what happened was that it had been recommended for listing but the legal pro-
114
cedure had not been carried out. That does not seem to me to be a matter of the greatest substance, but I am glad now to know that I should describe it as of listable quality and not as listed.
Paragraph 3 of Circular 61/68 says —and this is particularly important because I have not claimed that these buildings are of really outstanding quality; nobody has suggested they are in Category 1 for listing:
"In some cases a building may be important because there are only a few of its type in the neighbourhood; while in other cases its importance may be enhanced because it forms part of a group or series. Attention should also be paid to the contribution made by a building, particularly in conservation areas, to the local scene;…"
That exactly and precisely covers the case of these buildings which, without being individually of outstanding merit, are a harmonious and attractive part of a town which the Minister has insisted upon being considered for conservation purposes.
In paragraph 12 the Minister says this:
"It is being increasingly appreciated by all concerned with preservation that to decide on the preservation of individual buildings is not enough. In the first place, preservation of buildings must be related to their environment, in the sense both of the immediate townscape and of the area or town of which they form part. It is for this reason that local authorities have been empowered to designate conservation areas under the Civic Amenities Act 1967."
In paragraph 18 the Minister calls upon local authorities to co-operate with voluntary bodies, and says:
"… local authorities should co-operate with voluntary bodies, both national and local, concerned with the protection of historic buildings and the preservation and enhancement of amenities."
I have already quoted the amenity societies which were to be consulted before any demolition took place, and I have indicated that without a single exception they are opposed to what the Minister is doing on this occasion.
It has been argued that the houses in question are no longer of great interest or value because they are in a state of decrepitude. That is of course the result of the neglect and negligence, if not deliberate neglect, of the county council. The Minister, in his Circular,

115
which was very comprehensive and farsighted, referred to just this kind of thing when he said:
"The destruction of listed buildings is very seldom necessary for the sake of improvement; more often is the result of neglect, or of failure to appreciate good architecture."
My Lords, the promise of the Oxfordshire County Council to undertake a conservation study has been accepted by the Minister as a reason for authorising the demolition of these houses which, in the opinion of all the amenity societies mentioned in Circular 61/68, ought to be preserved. This seems to me to be so completely illogical and irrational that I can hardly believe that it was inadvertently done by the Minister. I can hardly feel that, after he had issued a statement of policy on the lines of this Circular, he could have authorised a destruction which was so completely at variance with all these different pieces of advice which he had given to local authorities. I therefore feel that this must represent a change in the policy of the Minister, and I shall be very glad indeed to be assured that that is not so.
7.58 p.m.
LORD CHORLEY: My Lords, I should like to say, to begin with, that it is a shame that such an important subject as this should have to be taken so late in the evening after a heavy day's work and in such a thin House. It is much too late to give to this important circular the attention which it deserves, although my noble friend Lord Molson has certainly brought out some of the important matters which derive from it. There are two points involved here, as he has pointed out to your Lordships. The first is the serious damage which is going to be done to this delightful and historic town of Chipping Norton; but the other is the more important one—and it is this, really, which during these last three or four weeks since the Minister's decision on the matter was published has been worrying all the amenity societies, not only the ones to which my noble friend has referred, which are specifically mentioned in the circular, of course, but the Council for the Preservation of Rural England and the other organisations which are very much concerned with the protection of the beauties of our land, both town and country.
116
This is an important circular. This part of the Act, which we passed through Parliament only last year, was hailed as an important addition to the strength of the amenities movement, and the circular from the Ministry from which the noble Lord has quoted, which was issued at the beginning of December, on the face of it appeared to be a well argued and promising document which, to any ordinary person reading it and taking it at face value, would have conveyed the impression that the Ministry was now to take a serious line about this sort of thing. It starts by, in effect, saying that historical England is disappearing rapidly, that the local authorities must bear a good deal of the responsibility for it and that the time has now come, and come very emphatically, when this situation must be brought to an end. Action is called for now, at the very beginning of this important circular, or these ancient, historical and attractive towns will disappear from our country.
It was emphatically expressed, very well expressed and very well received by all the organisations of people who spend their lives struggling to protect the beauties of England—and then, within a month, the Minister deliberately destroys the foundation on which that is built up. Everybody now considers this to be the usual thing: gobbledy-gook; just words. When faced with the acid test of an important historical town, a town which goes back to the time of the Anglo-Saxons, a town which was important in the time of Alfred the Great, he destroys, or gives the local authorities power to destroy, the centre of that important town. How can we rely any more on this circular, on the Ministry and on the Minister having the serious intention of implementing this Act of Parliament to which we gave so much time, both in the Lower House and in your Lordships' House, only a few months ago?
Those really are the points which are raised. I should like to discuss them at some length, but there is obviously no time, and I must content myself with making three or four points as shortly as possible. Two which I shall make are in respect of the town of Chipping Norton itself. I hope not to cover too much of the ground that has been already covered by the noble Lord. Lord Molson. The others are of a more general character,

117
for the purpose of which I take Chipping Norton as an example of the sort of thing which may be happening all over the country if other local authorities model themselves upon this—dare I say it?—dastardly conduct of the Oxfordshire County Council, in the expectancy that ministerial control will be equally supine.
Reading through all the papers that have been put before me in this case I gather, as the noble Lord. Lord Molson, apparently gathered, that the Oxfordshire County Council are the villains in this piece. I come to very much the same conclusion myself. It would be obvious to any sensible person looking at this situation that the only solution to the traffic problem of Chipping Norton is a by-pass road. Indeed, the Minister says so in his decision; but he says that it is going to be two or three years before that can happen and, that being so, that he is content for the sake of two or three years to see the Chipping Norton centre destroyed, because it is dangerous. That is a flimsy case. It is clear from the figures produced by the Oxfordshire County Council itself that it is not dangerous. It is true that in 1959–60 there were two or three serious accidents, but that is all over a period of more than ten years.
Obviously, at the time of those serious accidents the scheme for this destruction originated in the minds of the road enginer for Oxfordshire and his staff. This scheme has been gathering force ever since. This is clear from the documents. When this business came into the light of day in 1967, very nearly two years ago, it was then said that it would be about five years before the by-pass road could be completed. We are in the way of having exhausted two of those years—only three are left according to the figures then given—and the argument is based simply on this minute number of accidents, because no other argument has been produced and the Minister himself, in answer to the Starred Question last week, produced nothing except this. When the noble Viscount, Lord Esher, from Oxford brought out clearly that the accident rate was negligible, he really was unable to answer the point. Therefore I say, in the first place, that it really is a crime that, for the sake of saving two or three years in getting this by-pass
118
ready, this beautiful and ancient town should be subjected to destruction in this way.
It is clear, as has been said before, that the County Council, having made up their mind some years ago to get this thing through, were prepared to stick at nothing in order to get it done. At the beginning they wanted to do it by means of compulsory purchase; then they discovered that they could prevent an inquiry if they could enter into a contractual arrangement with the owner of this property to purchase it. So they purchased it. In that way, so far as they were concerned, and so far as the Minister of Housing and Local Government was concerned, they evaded inquiry. But the local people who were vigilant for the protection of Chipping Norton then went to the Ministry of Transport—which is very often the villain of the piece on occasions like this. But the Minister of Transport looked at it and said, "This is a case for an inquiry". It is significant that in the autumn of 1967 the Minister of Transport actually ordered a public inquiry. Then, somehow, during the next few months, as a result of the fact, brought to his attention, that the County Council had purchased the property, he then decided that an inquiry was not necessary; and the decision that there should be an inquiry was revoked by the Minister early in the spring a year ago. This again, I think, is very significant because it shows that the Oxfordshire County Council were really prepared to stick at nothing in order to get this plan of theirs carried out.
I think that this business about the inquiry is a very important matter indeed, because if ever there was a case where it was essential that there should be an inquiry, where it was essential that the pros and cons of this matter should be argued out, with proper evidence being given before an impartial inspector, this is the case. Here we have a new Act of Parliament to be implemented; here we have an important Ministerial circular isued; here we have the very first case raised under that new Act of Parliament and, under that new circular, a case in which, if the Minister himself, on the papers before him, had decided that there was a proper case for the clearance to go ahead, he should nevertheless have held an inquiry in order that everybody else should be satisfied.

119
There is an important clause in the circular in which it says that public opinion should be borne in mind and that there should be the involvement of the people concerned. I am not sure that the noble Lord, Lord Molson, referred to it, but it is a very interesting and important, and, I think, very significant paragraph. After a reference to "the importance of good public relations", the paragraph (it is No. 18 on page 7) proceeds:
"The Minister wishes again to emphasise the importance of securing the greatest possible measure of public participation."
My Lords, how do you get this if you go about it in this hole-and-corner way, persuading one Ministry after another not to allow a public inquiry? It is impossible to get public participation unless there is a public inquiry. I suggest that it was a very serious mistake on the Minister's part to decide that a public inquiry was not necessary. As we have often been told, it is just as important that justice should be seen to be done as that it should in fact be done, and I think it was a gross error of judgment on the part of the Ministry and the Minister to decide in this first case when this Act of Parliament was going to be used and this Circular brought into effect, that an inquiry was unnecessary.
Obviously—or so I should have said if he had not in effect said that it was not so—the deduction I should have made was that the Minister who is answering for the Government to-night took the same point of view, because when the matter was taken up with him by the local Member of Parliament he very properly said that nothing would be done until a "conservation study" had been made, and the need for a conservation study in cases of this kind—
LORD KENNET: My Lords, I am very interested to hear the noble Lord's account of what I said to the Member of Parliament. How does he know?
LORD CHORLEY: My Lords, because it has been reported. It may be that the Member of Parliament gave a wrong interpretation of what was said to him by the Minister, and the Minister will have the opportunity of explaining what in fact happened. But whether he said it or not, I suggest to your Lordships that
120
this was obviously the sort of case where a "conservation study" was absolutely essential and they had not even begun on it. In the Answer which the Minister gave to the Question only last week he said that the county council had promised that during the year they would do a conservation study. During the year! After these houses have all been pulled down and a very important part of the conservation study is no longer of any interest or use to anybody, then they will get on with the conservation study. I suggest that this is really an outrageous way to go about the preservation of these ancient houses which the Minister is drawing to the attention of local authorities as so necessary and so important.
Obviously, my Lords, that is what ought to have been done. A conservation study ought to have been made and got on with, and it should then have been brought before an inspector at a public inquiry so that the people concerned and interested in this matter should have had the opportunity to give their evidence in public on both sides and of being subjected to examination and cross-examination. The whole matter should be properly argued out instead of being dealt with in this hole-and-corner way as has been described to us to-night.
I will not take up more of your Lordships' time. Obviously, the best way in which the Minister could prove to the country that he is in earnest about the implementation of the Act and about the carrying through of the terms in the Circular which he has sent round to all the local authorities would be to revoke this decision which he has made. I am not sure that the Minister has the power to do so now. In the regulations at which I have been looking, there is a power on the part of the local authority, with the consent of the Minister, to revoke an Order which has been made in respect of a listed building. But whether the Minister himself still retains that power is not at all clear. Having once given his decision, I doubt whether he can withdraw it. But if he can, the best way in which he can convince the country that he is serious about this would be to withdraw the Order at once. If he cannot withdraw his decision he will find it very difficult indeed to persuade the local authorities that he is really in

121
earnest with this policy, and even more difficult to persuade those of us in the amenity societies who have spent our lives trying to defend England from onslaughts of this kind.
8.15 p.m.
VISCOUNT ESHER: My Lords, as a member of the Royal Fine Art Commission and of the various societies which have objected to the demolition of these buildings I should like, very briefly in view of the lateness of the hour, to say why we did so. If one looks at these buildings now, boarded up, empty, suffering from a planning blight of many years, one may well wonder what the fuss is about; and one can well understand the views of local people, and indeed the local borough council, that the sooner these poor old things are decently removed the better. It would, of course, be quite wrong, as I am sure your Lordships would agree, to accept that view from that quarter alone. After all, the most lamentable and regrettable destruction in our historic town centres has nearly always been—has always been —with the consent of, and nearly always at the instigation of, the local authority.
These buildings that we are discussing this evening, as noble Lords have said, are not distinguished by conventional listing standards. The four in the Market Place that are most important and most effective are, first, the one on the corner, No. 11, which is a very solid and handsome mid-eighteenth century house of, I would say, considerable distinction. Next to it is what I have only once seen elsewhere South of the Trent, a curtain-wall building of the late nineteenth century in an English market town; one which I myself have often used when talking to students of examples of the fact that one does not have to use Cotswold stone in the Cotswolds. Next to that is a rather pompous Victorian mansion; and, fourthly, there is a little seventeenth-century public house, though no longer used as such. What these buildings have, my Lords, is character, diversity and a proper scale—qualities which commercial developers, the kind of people who will be developing this site, have found it so very difficult to achieve.
The noble Lord has told us that women with prams will benefit from the proposals of the Oxfordshire County Council, and I have no doubt that they
122
will. I am told that there are at least two other ways of achieving this same result without touching No. 11, the corner building, which most people regard as the best of the four. I should like the noble Lord, Lord Kennet, to tell us, if he can, whether these alternatives are known to him and whether they have been investigated. But this is not the main point. The main point, clearly, as noble Lords have said, is that in a potential conservation area—and none could have greater potential than this, though it has not yet been mapped—no buildings, whether they are statutorily listed at the time or not, should be demolished except in the context of a plan.
My Lords, a few days ago I was reading the letters from India of Sir Patrick Geddes, whom we all regard as the founder of modern planning and I came across this little passage. Geddes wrote:
"The general level of civic thought and town planning knowledge amongst Government authorities and municipal bodies is well illustrated by a passage from a letter I have recently received from a distinguished civic servant, an engineer in charge of one of the most historic and beautiful cities in India. In acknowledging my report he regretfully explains that as both water and drainage schemes are in contemplation, the city must deny itself the luxury of town planning."
That was fifty years ago, and of course we can all think of contemporary examples of what I regard as the great British vice of putting the part before the whole—not a vice in all fields, but a vice in the field of planning.
We have Stansted Airport. In my own county of Oxford we have proposals for a motorway across the Chiltern escarpment, necessary only because the Wycombe bypass has been brought to a position from which no further progress can be made except at the cost of one of the most beautiful landscapes in England, although only three miles along the ridge there is the Princes Risborough Gap, which a hundred years ago the Victorian engineers had the sense to use for the railway. We all know examples, from towns up and down the country, of buildings demolished or set back for highway improvements which have never had to be made and which are now precisely the opposite of what we all want to see.
I have gone up and down the country giving this simple message to civic societies and students—the cliché of

123
planning: that survey must precede plan, and that a plan must precede any irrevocable action. In conveying this important but often unpopular message, we need all the support we can get. I know that everyone in my profession has come to regard the noble Lord, Lord Kennet, as a real leader in this field of conservation. I would merely ask him what has gone wrong in this case.
8.21 p.m.
LORD CONESFORD: My Lords, the noble Viscount, Lord Esher, has expressed with such skill, truth and charm the points which I should have wished to make that I shall do little more than formally support him. I agree that we could not have to reply to this debate a Minister of whose sympathy we are more sure than the noble Lord, Lord Kennet. I hope very much that he will find it possible, late though the hour is, to investigate whether there is this further possibility that the noble Viscount has suggested. There is nobody who knows the Oxfordshire countryside and towns better than he does.
I think that in the short interchange that took place last week, what must have struck everybody was the insanity of having a survey but doing the destruction first. There have been so many cases where people have seen the alternatives, in the interest of traffic, of either tearing some of the guts out of ancient places or making a bypass. In the end, invariably we have done both. Though it is realised that the only proper cure is a bypass, instead of making that bypass we first "improve" a town from the point of view of through-traffic by doing some destruction in it. It is never successful, and always disastrous.
I do not wish to say more to-night than to beg the noble Lord. Lord Kennet, to give the most careful consideration to the proposal made by the noble Viscount, Lord Esher, and to see whether it will be possible to preserve at least the most precious of the buildings concerned.
8.25 p.m.
LORD KENNET: My Lords, first of all, let me put some facts on the record about the detailed situation on the ground at Chipping Norton. I should like to get
124
out of the way one or two misapprehensions. My noble friend Lord Chorley asked whether it was not possible for my right honourable friend the Minister to revoke the order in respect of these listed buildings. It ought not to be necessary for me to put right such a fundamental misconception. There are no listed buildings and there has been no order. My noble friend also made the point that since a by-pass was coming in three years, it was wrong to demolish any houses in this historic town. I do not know where he got the figure of three years. If a by-pass had been coming in three years, there would have been a different situation. Unfortunately, my right honourable friend the Minister of Transport is not able to say when he can slot the Chipping Norton by-pass into his programme. If he were to do so within three years, it would mean the unslotting of a by-pass in some other historic town, or town where there is risk of loss of life, and then we should have another debate in your Lordships' House on that.
May I also take a moment to correct a false impression which has arisen in the Press about the conservation study which it is the intention of Chipping Norton Borough Council to make? The noble Lord, Lord Molson, wrote to the Daily Telegraph complaining that my right honourable friend had abandoned his intention of withholding his consent to this demolition until the conservation study was made—made rather than undertaken. My noble friend Lord Chorley has raised the same point now about the difference between the conclusion and the inception of the conservation study. Either noble Lord could have picked up a telephone at any point and inquired from me about that. There was never any understanding between my right honourable friend or I and the local authorities concerned that the conservation study must be completed before this road widening project could go ahead. The understanding was that its inception must be undertaken within a definite period and, as I told the House last time we discussed this subject, the Oxfordshire County Council have now undertaken to do the conservation study this year.
LORD CHORLEY: My Lords, before my noble friend leaves that point, perhaps he will say what the purpose of a conservation study is, if it is not for purposes of this kind.
LORD KENNET: My Lords, it is to develop a canservation policy, and any Minister will naturally feel more inclined to retain his "say-so" over a given demolition or action if the local authority are not undertaking any study directed towards the formulation of a policy, than in cases where they are.
The street concerned, the corner of New Street and Market Place, has a carriageway 16 feet wide and pavements 2 feet wide. Over the last 10 years, there have been ten accidents, three of them serious and six of them involving pedestrians or cyclists. It is normal for commercial vehicles when passing one another to overhang those two-foot pavements and it is common for them to mount upon the pavements with their wheels. My right honourable friend and I have been advised by the highways authority that the continuation of this situation involves a concrete likelihood of death resulting. That is one given element.
On the other hand, we have a handful of houses—thirteen—which had been acquired by the local authority by agreement, and not by compulsory order, for the purpose of road widening. I think that there is no real question of redevelopment here. The noble Viscount, Lord Esher, made the point about the regrettable inability of modern developers to reproduce in proper scale and appearance houses common in our towns in the 18th and 19th centuries. This is not a case of redevelopment but of road widening. Of these thirteen houses, none is listed as being of historic or architectural interest on any statutory list.
I would repeat what I said in an interruption of the speech of the noble Lord, Lord Molson. I regret that inadvertently I misinformed the House about this the other day, and said that one was. None is. The one is of listable quality, and that is No. 11 Market Place. It has not been listed because when there is active discussion about whether or not a building is to be demolished, and everybody is aware of the position,
126
there is no particular point in listing if there is any possibility of demolition being permitted. Of the other 12—that is, apart from No. 11, which is of statutory quality—8 are on the supplementary list, which I would remind the House has no statutory force whatever: these are merely houses the existence of which is drawn to the attention of local planning authorities; the Minister has no power over them whatever, and the local authority has no special power over them whatever.
What does this mean in real terms? It means that all those houses, with the one exception of No. 11 Market Place, are below 110,000th place in the merit list of English houses. There are 110,000 houses on the statutory list, and these houses are below that place. So we are not dealing with anything of very great architectural or historic importance. The noble Viscount, Lord Esher, mentioned the presence of four houses in Market Place—and I think there may be some mistake here. It is only the corner house, No. 11, which has to come down. The others beyond it in Market Place do not have to come down for the purposes of road widening. Their future is somewhat indefinite, but they are not inevitably included in the road widening scheme.
The question before my right honourable friend—and I want to emphasise this to the House—was not a general one of whether or not to demolish the centre of Chipping Norton; it was not even the general one of whether or not to permit the demolition of the centre of Chipping Norton: it was whether or not he should take unusual emergency action to put No. 11 Market Place on the statutory list. If he had done so, it would have had the effect that the local authority would have had to seek his consent before demolishing in the interests of this road widening scheme; and he could, of course, no doubt after a public inquiry, have refused his consent. That is all that we are talking about now. He could not put any of the other 12 houses on the list, because his statutory advisers had told him that they were not worth it. They are not worthy of inclusion in the 110,000 best buildings in the country, and do not, therefore, merit any statutory protection whatever.

127
The terms of the Question, therefore, which refer to these houses, are not entirely in accordance with the situation. What we are talking about is one house, No. 11 Market Place. At this point my right honourable friend and I had to consider the lie of the land in general social terms, in terms of the general fabric of local authority and auto-determination. We found the County Council, the highway authority and the Borough Council, as an expression of local opinion within the town, unanimous and determined that the right course of action was to demolish the houses for the sake of the avoidance of a concrete risk to life in that street. That was a difficult situation to face, even given the existence of the circular which the noble Lord so eloquently quoted and with the drawing up of which I had something to do. When it comes to life against 13 non-listed houses, I, for one, know what I consider to be the right decision.
If the House will permit me, I should like for a moment to stand back and say that we are making rather heavy weather of what is a small matter. I believe—and I think this Government have the right to take credit for it—that there has been a transformation in private and public opinion and in our statutory arrangements about the preservation of buildings and towns of architectural and historic interest. I would remind the House that it is only eight years since the Euston Arch was demolished. This is the great shibboleth and paradigm of Philistine demolition in our century in London. It was not the present Government that did it. It is only eight years since the Coal Exchange in the City of London was demolished. Again, it was not this Government that did it. The noble Lord, Lord Molson—and I give him full credit for it—protested against those demolitions, against a Government of his own Party which did it—which in one case carried out the demolition, and in the other permitted it.
It was not this Government which set Sir Leslie Martin's terms of reference for his Whitehall plan, which included the understanding that the Foreign Office was to be demolished, so that he was not even empowered to consider that
128
question. It was not this Government which reviewed the development plan for Bloomsbury in 1962 in terms which made inevitable the demolition of Woburn Square for the benefit of London University.
Returning to the scale of events at Chipping Norton, I would ask the House to remember that we are talking of 13 unlisted houses, one of which might be designated. It was not this Government which allowed the town of Gosport to demolish 105 of its 130 listed buildings in the ten years following 1955. I regret that some of these old decisions are still working through: there is nothing we can do to stop them, but there are not many left.
It was, on the other hand, this Government which doubled the number of investigators of buildings of historic and architectural interest from 8 to 16. It was this Government which increased the Historic Buildings Council moneys for the preservation of historic buildings by 20 per cent, in the middle of a major economic crisis. It was this Government which appointed the four consultants, of whom the noble Viscount, Lord Esher, is, in one sense, the first, to carry out conservation studies of four major historic cities. It was this Government which undertook a central Government responsibility to help people find uses for listed buildings by the creation of the Historic Buildings Bureau, to which all vendors and seekers of historic buildings have free access and the services of which are available free to all those. It was this Government which reactivated the forgotten powers under the Land Fund for central Government to acquire, restore and dispose of buildings of outstanding historic and architectural interest. It was this Government which found Parliamentary time for Mr. Duncan Sandys to introduce the Civil Amenities Bill, and which helped him to draft it—which he himself could have done when he was Minister of Housing and Local Government, but did not.
Lastly, it was this Government which introduced Part V of the recent Town and Country Planning Act, under which, for the first time, the owner of a listed building does not merely have to state his intention of demolishing it in such a way that if the letter goes astray he is virtually free to do so: he has to have

129
express permission from the planning authority, and behind them the Minister, if they are in doubt, to do so. I would remind the House that this Part V of the Town and Country Planning Act 1968 introduces a veritable revolution in the protection of our ancient buildings, in that we now have a situation where local authorities can compel the owners to repair, and if they do not they can purchase the buildings; and if is is proved that the owner has been deliberately neglecting them for the sake of profit on the site, the authorities can purchase them, minus the development value.
If I may return for a moment to Chipping Norton, I think all Members of the House will agree that we cannot preserve everything over a hundred years old. The question then arises: in what circumstances should we refrain from preserving something more than a hundred years old if it looks nice? I myself think that we should refrain from doing this when there is a risk of people being killed. That is when one abandons one's desire to preserve everything. And in this case there was such a risk. In future cases there may again be such a risk, and I cannot undertake to the House that in such cases I will take, or advise my right honourable friend to take, a decision any different from that which he took this time.
Lastly, my Lords, I am not defending the decision of the Oxfordshire County Council. It is their method; it was their decision. There is very hot feeling on both sides about it. What I am saying is that this was not a case in which the Minister should have intervened, or should have used his statutory power over one house on the corner to frustrate the considered decision of local democracy in this matter. To have done so would have been to set a clamorous precedent
130
towards detailed and dubious intervention in the web of local democracy, on which, I would remind the House, all our attempts to preserve what is best in our heritage must in the last resort depend.