Lords Sitting of 20 November 1973

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester.
The Lord Hatherton—Sat first in Parliament after the death of his brother.

CITIZENSHIP RIGHTS OF BRITISH ASIANS
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their view of the report of the European Convention for the Protection of Human Rights and Fundamental Freedoms on complaints by Asians from East Africa of the refusal of citizenship rights, and subsequent treatment, when they hold British passports.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, so far as the Government are aware, the Commission have not yet adopted a report covering these cases.
LORD BROCKWAY: My Lords, is the noble Viscount aware that I am a little surprised by that Answer? Is it not the case that a Report was issued in May; that there was no agreement between Her Majesty's Government and the Commission and that it is to be presented to the Council of Ministers in December?
VISCOUNT COLVILLE OF CULROSS: My Lords, one has to take account of the machinery on these Treaties, and what happens is that if there is a complaint about a violation of the Convention and no friendly settlement has been reached between the parties, the Commission report to the Committee of Ministers on its opinion whether there has been a breach of the Convention and sends a copy to the State concerned. Unless that is then referred to the European
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Court of Human Rights within three months, either by the Council of Ministers or by the State concerned, the Committee of Ministers decide whether or not there has been a breach of the Convention. We have not yet got to the beginning of that stage.
LORD BROCKWAY: My Lords, is not exactly what I said? Is it not a very different impression from the first Answer which the Minister gave? May I ask him whether Parliament will have the opportunity to discuss this disagreement before a definite conclusion is reached?
VISCOUNT COLVILLE OF CULROSS: No, my Lords; what I have said is not different from my first Answer. I described the machinery in my answer to the noble Lord's supplementary question, and my original Answer was that the Commission have not yet adopted a Report—
LORD BROCKWAY: "Adopted"?
VISCOUNT COLVILLE OF CULROSS: Adopted a Report. That is the current situation. As to whether or not Parliament will be involved, I should think they certainly will not until one has reached the stage of deciding whether to refer the matter to the European Court, and we are well away from that at the moment. I am not sure whether even at that stage it is apposite for Parliament to intervene in a particular case.
LORD WADE: My Lords, may I ask a general question arising out of these questions and answers? While there may be room for legal argument about whether the European Convention does or does not override legislation passed in this country, would the noble Viscount agree that it is very undesirable that legislation should be passed and enforced in this country which contravenes the Convention on Human Rights, the European Convention?
VISCOUNT COLVILLE OF CULROSS: My Lord, it is very difficult to say whether that is more than a hypothetical proposition, because at the moment I do not think anybody has decided that any of our legislation does contravene a European Convention. If there were a ruling upon it and subsequently we sought to legisluate in contravention of

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that ruling, without any doubt it would be raised with Parliament. But as neither of these things has happened yet I do not think that I can help the noble Lord, Lord Wade, on this hypothesis.

GAS: FATALITIES AMONG DOMESTIC USERS
2.40 p.m.
VISCOUNT HANWORTH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether statistics similar to those published for fatalities caused by domestic electrical equipment are available for gas and if so why they are not given wider circulation.
Loan STRATHCONA AND MOUNT ROYAL: My Lords, the statistics published by the Registrar-General give similar information on fatalities caused by gas as for fatalities caused by domestic electrical equipment.
VISCOUNT HANWORTH: My Lords, I must ask the Minister whether he realises that the Home Office circulates a detailed list of accidents arising from the use of electricity which goes into details and is available to anyone who wants to study the matter in detail, and anyone concerned. It seems to me that the noble Lord's Answer implied that the same cannot possibly be true of gas. Am I correct?
LORD STRATHCONA AND MOUNT ROYAL: My Lords, the noble Lord, of course, sits on certain B.S.I. committees and in that capacity receives a number of other statistics through the Home Office. Similar statistics on fatalities attributable to gas are assembled by the British Gas Corporation and are available to the Department of Trade and Industry, but in view of the dramatic decline which accompanied the introduction of natural gas a wider circulation has been thought unnecessary.
VISCOUNT HANWORTH: My Lords, may I ask the Minister whether any noble Lords who may be interested in this problem, or anyone else who is professionally or semi-professionally concerned, can obtain a copy of these detailed statistics? May I ask him, further, whether he
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realises that until comparatively recently deaths from gas were something approaching three times the figure of fatalities from electricity? Does he not think that greater notice ought to have been taken and these facts ought to have been brought to the notice of those concerned so that they could raise any questions they wished?
LORD STRATHCONA AND MOUNT ROYAL: My Lords, the noble Viscount has raised a number of questions and I will try to deal with them one by one. So far as the statistics are concerned it is a little difficult to make direct comparisons. However, the figures for gas fatalities have declined to about one-tenth of what they were ten years ago. The figures which I have here for electrical fatalities are not directly comparable because they exclude industrial accidents. So far as the wider dissemination is concerned, the Gas Corporation concentrate mainly on the dissemination of the information in the gas safety regulations and these were derived from their analysis of fatalities due to gas equipment.
LORD SHEPHERD: My Lords, the question raises a rather difficult answer. I wonder whether the noble Lord could undertake to see that this material is put into the Library of the House of Lords, as perhaps some noble Lord might like the opportunity to examine it.
LORD STRATHCONA AND MOUNT ROYAL: I am sure that would be possible, my Lords.
BARONESS SUMMERSKILL: My Lords, in view of the remarks that the noble Lord just made, am I to understand that natural gas is not lethal.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I do not think we can go quite so far as that, but it is, on the whole, less lethal, and accidents have declined since it was introduced. One of the reasons for this is that during the examination that is made of gas equipment before conversion takes place, there is ample opportunity for identifying defective equipment and seeing that it gets put right.
Loan AUCKLAND: My Lords, has my noble friends attention been drawn to last night's excellent "World in Action" television programme about the

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Bristol experiment—about persons going round to people's homes, examining defective gas heaters and so on, and trying to catalogue injuries and deaths? Would he look into these particular figures and see that the rest of the country is able to make use of these facilities?
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I saw that programme last night in anticipation of this Question this afternoon. There are two or three points which, unfortunately, did not come out in the programme. In the first place, Bristol has not yet been converted to natural gas, and something like 70 per cent. of the rest of the country has—about 9 million out of 13 million consumers. Therefore, to extrapolate from those figures is rather dangerous in itself. I mentioned the fact that the pre-conversion surveys have identified a lot of this defective equipment. Thirdly, fatalities from carbon-monoxide poisoning would in all probability be identified; therefore, it is very unlikely that the number of fatalities from carbon monoxide poisoning is under-recorded, which was the implication in that programme.
LORD HALE: My Lords, could the noble Lord tell me why natural gas has not been installed in College Road, Dulwich?
LORD STRATHCONA AND MOUNT ROYAL: I do not have any detailed knowledge of College Road.
VISCOUNT HANWORTH: My Lords, is the noble Lord aware that many of these poisonings from gas heaters were incorrectly diagnosed by the hospitals and the figures were completely incorrect; and it is only recently that these facts have come to light? Would lie not agree that associations and others concerned with public safety should be able to have the facts, so that in certain instances they may perhaps encourage the Gas Council to take more active steps? Certainly, if the fatalities have decreased to one-tenth, it would appear that the figures were possibly not adequate in the past.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I think we can go along with most of those propositions.
LORD SLATER: The noble Lord says that natural gas is not lethal. But does
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it matter whether it is natural gas or whether it is gas that has come from coal products or such like, because it still carries the danger that it is inflammable? Therefore it is bound to carry a high percentage of danger. I am rather amazed at the statement of the Minister when he says that it is less lethal. I think lie ought to go further into these matters and make further investigations.
LORD STRATHCONA AND MOUNT ROYAL: I think we have to accept, my Lords, that it is less lethal, and I should have thought that the figures bore out that contention.

THE MIDDLE EAST: ARMS SUPPLIES
2.47 p.m.
LORD SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
he Question was as follows:
To ask Her Majestys Government when it is intended that spare parts and other items relating to Centurion tanks purchased by the State of Israel will be delivered.
EARL FERRERS: My Lords, Her Majesty's Government are keeping their policy under constant study. I cannot predict in present circumstances when the supply of equipment to Israel and the Arab states will be resumed.
LORD SHINWELL: My Lords, are we to understand, through the Answer the noble Earl has just furnished to the House, that the Government will not fulfil their contractual obligations to Israel in the supply of spare parts for which the requisite finance has been received by Her Majesty's Government until peace is declared; and after peace is declared, what do Her Majesty's Government propose to do with these spare parts? If they are not delivered to Israel when peace is declared, then will the Government pay the State of Israel proper compensation?
EARL FERRERS: My Lords, when hostilities broke out on October 6, Her Majesty's Government, as the noble Lord, Lord Shinwell, knows, called for a ceasefire. It would have been inconsistent to do that, and to supply arms to either one

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or the other of the parties involved. What Her Majesty's Government therefore did was to place an embargo. When this is lifted will depend entirely on the circumstances which then exist.
LORD SHINWELL: My Lords, why is it so difficult for the noble Earl to answer a simple question in a simple way? What I and many other people want to know is, what do Her Majesty's Government propose to do about these spare parts? When are they likely to be delivered? Will they be delivered before peace is declared, or will they be delivered after peace is declared? If they are no longer of use to Israel after peace is declared, which might be the case, will Her Majesty's Government provide the requisite compensation? This is a simple question, deserving of a simple answer.
EARL FERRERS: My Lords, I should be delighted to answer a simple question, but I find the noble Lord's question not only difficult, but also hypothetical. In fact, the embargo has been put on while the present state of affairs exists. I cannot tell the noble Lord what the state of affairs will be in the future. The lifting of the embargo must clearly depend on the outcome of the state of affairs in that part of the world.
LORD SHACKLETON: My Lords, is the noble Earl aware that while he may find my noble friend's question obscure, the meaning is perfectly apparent? Is he also aware that his own reply is an unquestionable evasion? Can he tell us, since the embargo was linked to a ceasefire, as he said, and there is now, as I understand it, a ceasefire, why the embargo cannot be lifted?
EARL FERRERS: My Lords, my reply was not intended to be evasive. I can only tell the noble Lord, Lord Shackleton, that the releasing of the embargo must depend on the state of affairs existing in the Middle East, and at the moment Her Majesty's Government do not think it would be appropriate to release the embargo.
LORD JANNER: My Lords, would the noble Earl say why we are still supplying arms to other countries which participated in the fighting? What do we propose to do about that? I am talking about people who actually took part in
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the fighting and sent troops, and who probably used our arms when they were fighting the Israelis. If the noble Earl is talking about a general embargo will he say why that is continuing? Will he also say why, now that there is a ceasefire, in the event of a further attack upon Israel, rather as a previous attack was made a few weeks ago, she should be prevented from defending herself by reason of having Centurions which are of not the slightest use to her unless the ammunition and spare parts are provided?
EARL FERRERS: My Lords, I fully accept the concern of the noble Lord, Lord Janner. He knows full well that the embargo applied to countries which were in the battlefield area. Her Majesty's Government have been consistent in wishing for an immediate end to the hostilities and to an increasing amount of tranquillity in that area. Her Majesty's Government do not feel that the release of this embargo would contribute at this juncture to peaceful feelings in the Middle East.
BARONESS BACON: My Lords, would the noble Earl not agree that these Centurian tanks are hardly toys? And if the use of these tanks is either to wage war or for the defence of a country in time of war, how can the Government justify supplying the tanks and then not supplying the parts for them?
EARL FERRERS: My Lords, I would go along with the noble Baroness entirely in saying that Centurian tanks are not toys. But any Government in any country has the right to purchase its defence equipment where it wishes. If at the time we in this country are able to meet some of those demands, so be it. But the noble Baroness will know very well that at a time when there is an outbreak of hostilities in the Middle East, and when Her Majesty's Government want to see these hostilities end it would be inconsistent for them to supply either one side or both sides with the equipment.
LORD SHEPHERD: My Lords, would the noble Earl confirm that the Soviet Union are to-day flying large quantities of arms, ammunition and equipment into Cairo? What representations have Her Majesty's Government made to the Government of the Soviet Union in this respect?
EARL FERRERS: My Lords, the Question refers to Centurion tanks and the embargo upon them and I really think that Lord Shepherd's question is very wide of that.
LORD BARNBY: My Lords, as this matter concerns merchandise already paid for, would the Minister say why we, as a great trading nation, conventionally regarded for our punctilious respect in trading practices, should withhold merchandise paid for, when the war has actually ceased? Secondly, is it to be understood—if Press reports are right, that Russia is also supplying merchandise—that we have taken steps to instruct our representative at the United Nations to take appropriate action?
EARL FERRERS: My Lords, of course this country is concerned with fulfilling its contract. It is also concerned in trying to avoid conflicts in various parts of the world. I would only tell my noble friend that a standard condition of the issue of an export licence is that it may be revoked at any time. The licence is so endorsed.
LORD SHINWELL: My Lords, can the noble Earl say whether the decision by his right honourable friend the Foreign Secretary to withhold these spare parts was because of his desire, and the desire of Her Majesty's Government, to display friendliness to the Arab countries? And if so, can he say when these friendly relations are going to be reciprocated—for example, in the matter of oil supplies?
EARL FERRERS: My Lords, the sole purpose of this embargo, as I have explained, was in order to defuse a potentially dangerous situation. Her Majesty's Government have always been of the view that all possible effort should be put towards procure peace in the Middle East. They did not see that they could possibly call for a ceasefire and at the same time continue to supply arms to both sides.
LORD JANNER: My Lords, would the noble Earl please answer the question that I put to him earlier? When he says that the others who are at present being supplied with arms were not fighting in the area, what does he mean? Are they not still in the area? Why are we supplying arms to those countries which have refused to accept the ceasefire?
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Is this not a case of giving way to the vicious form of blackmail that is being used against the countries of the world by the Arab people, to which we unfortunately are succumbing?
EARL FERRERS: My Lords, I do not think we are succumbing here. The embargo was on those countries in the battlefield area. One has to take cognisance of the fact of where the battlefield is situated.
LORD SEGAL: My Lords, can the noble Earl say why the existence of a ceasefire does not provide the Government with an excellent opportunity to follow an honourable course?
EARL FERRERS: My Lords, because, although there may be a ceasefire, our desire is that there should be a peace treaty, and we do not believe that a lifting of the embargo would help towards that end.
LORD SEGAL: My Lords, apparently it takes at least a year to negotiate a peace treaty. Does that imply that the State of Israel will have to wait at least a year before it is able to receive these spare parts?
EARL FERRERS: My Lords, as I said in my original reply, it depends upon the circumstances.
LORD BROCKWAY: My Lords, as one who differed from some of my colleagues on this question and who supported the embargo of arms to both sides, may I ask the Minister whether he will reconsider the military support which is being given to some of the Governments opposed to Israel on this issue, not only in the supply of arms, but in military training in this country, and follow, in principle, a policy that no military support should be given to either side?
EARL FERRERS: My Lords, of course we are concerned with the point to which the noble Lord, Lord Brcckway, refers. When he relates it specifically to training, I think what he has in mind is the training of helicopter pilots. As I am sure the noble Lord knows full well, if we were to stop training these people, as they are fully qualified pilots they would merely go straight back to the battlefield.
LORD MAYBRAY-KING: My Lords, is the noble Earl aware that those of us who have friends in Egypt and Israel and who admire both countries and want an understanding in the Middle East which will protect the security of Israel and will restore to Egypt the pride that she lost by the defeat in the previous war, would welcome everything that the Government do to bring understanding to the Middle East? —because if we do not get that it means the end of Israel or the end of Egypt.
EARL FERRERS: My Lords, I am grateful to the noble Lord, Lord Maybray-King, for what he has said. It is because we are so concerned to try to procure peace in the Middle East, which one realises is a matter full of the most complicated and difficult contrary thoughts, that we have tried to adopt the principle which we have, which is not to supply arms at this juncture to either side.
LORD PEDDIE: My Lords, may I ask the Minister whether or not the original contract for the supply of these tanks contained any reference to the supply of supporting spares?
EARL FERRERS: My Lords, I cannot tell the noble Lord the full details of the contract, but I can say that in order to supply such a contract it is necessary to get an export licence, one of the conditions of which is that it may be revoked at any time.
LORD CLIFFORD OF CHUDLEIGH: My Lords, is not the true answer that a period of six months is involved, which is the period for which any ordinary citizen has to wait for spares from the British motor industry?
EARL FERRERS: My Lords, that is not the proper answer.
LORD PARGITER: My Lords, in order that we may fully understand the effects of the embargo, would the Government publish the figures relating to the effects of the embargo of supplies to Israel in terms of military goods and in terms also of goods not also supplied to Arab countries—both those which support the belligerents and those which do not?
EARL FERRERS: My Lords, at a time when we are trying to promote calm in that area, I do not think the proposition put by the noble Lord would really contribute very much.
LORD PEDDIE: My Lords, I am sorry to have to revert to the question I asked a moment or two ago. I asked whether the original contract contained a clause with regard to the future supply of spares.
EARL FERRERS: My Lords, I told the noble Lord, Lord Peddie, that I could not give him details of what the original contract included, but I insinuated that if in fact it had contained a clause for the supply of spare parts this would need a licence which would have to be, and has been, revoked.

DOCKLANDS REDEVELOPMENT
3.2 p.m.
LORD HYLTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will establish a Development Corporation under the New Towns Act to deal effectively and imaginatively with the redevelopment of redundant docklands East of Tower Bridge.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (BARONESS YOUNG): The possibility of establishing a special agency for the dock-lands is being discussed with the Greater London Council and the local authorities concerned. The New Towns Act 1965 would not apply and special legislation would be required.
LORD HYLTON: My Lords, while I am grateful to my noble friend for that reply, may I ask her whether she is aware that this area includes 5,000 acres, which is mainly in the hands of the Port of London Authority and the Gas Board? Further, is my noble friend aware that the Greater London Council and no less than five London boroughs are involved? Is there not great urgency to bring some help towards the easing of London's housing shortage?
BARONESS YOUNG: Yes, my Lords, I am aware of the facts as my noble friend has stated them and the matter is, as I said, currently under discussion. My right honourable friend the Secretary of State is engaged in discussions with the London boroughs. I can tell my noble friend that 177 acres have in fact been released in advance for housing.
BARONESS STOCKS: My Lords, am I right in thinking that the G.L.C. is at this moment pursuing a very comprehensive development plan for that particular area?
BARONESS YOUNG: My Lords, the position is that the Department of the Environment and the Greater London Council jointly, in April, 1971, commissioned Messrs. R. Travers Morgan and Partners to carry out a Study of the redevelopment, and it is the proposals contained in that Study which are the subject of the discussions now going on between the Secretary of State for the Environment and the London boroughs.
BARONESS STOCKS: My Lords, may I say that the G.L.C. are at the moment getting on with it in a big way?
BARONESS YOUNG: My Lords, I think the noble Baroness has been misinformed on this matter. In the area under discussion, the various plans are still at the stage of public discussion and of discussion with the local authorities.
LORD HALE: My Lords, in view of the fact that we are being told that grants of development certificates may give a bonus of something up to £3 million or £4 million to development companies, is not the proposal made by the noble Lord in putting his Question one which merits very serious consideration in full conjunction with the G.L.C., who might well welcome some special development agency, particularly if it were to carry a special grant?
BARONESS YOUNG: My Lords, I entirely agree with the noble Lord that this is a very important matter. The point he has raised, which is contained in the Question, is currently under discussion.
LORD DAVIES OF LEEK: My Lords, would the noble Baroness see whether
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an investigation can be made into this sudden outburst of fires contiguous to the area? In the last few years I believe that five large fires have taken place. In some mysterious way five large warehouses which were derelict have become a mass of flames, and it may be worth while looking into these outbreaks in depth.
BARONESS YOUNG: My Lords, the Question before us refers to a possible development corporation for the dockland area, and I think that the question put by the noble Lord, Lord Davies, is really rather wide of that.
LORD HYLTON: My Lords, would my noble friend agree that the process of public consultation and any reports that have been commissioned have really very little to do with the question of who finally gets on with the job and produces the housing?
BARONESS YOUNG: My Lords, who ultimately develops the docklands area, whether it is a development corporation or some other body, is a matter still to be decided. It is under discussion.
BARONESS STOCKS: My Lords, may I ask Her Majesty's Government whether they would organise a tour, which Members of your Lordships' House would be invited to join, in order to see the development which is now going on most imaginatively and very successfully?
BARONESS YOUNG: My Lords, I think it is always open to anyone to go and look at these things if they so wish.
BARONESS STOCKS: My Lords, I wish they would.

SLAUGHTERHOUSES BILL [H.L.]
3.7 p.m.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE): My Lords, I rise to move that this Bill be now read a second time, and would remind your Lordships that this is a pure Consolidation Bill. It consolidates the provisions of the Food and Drugs Act 1955, the Slaughterhouses Act 1958, relating to slaughterhouses and knackers' yards, and the Slaughter of

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Animals Act 1958. The Bill will be referred, in due course, to the Joint Committee.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

LAND REGISTRY BILL [H.L.]
3.8 p.m.
THE LORD CHANCELLOR: My Lords, I rise to move the Second Reading of the Land Registry Bill, the effect of which is to enable the Land Registry, which now operates as a branch of the Lord Chancellor's Department, to continue in being as a public board with an independent life of its own but under the general sponsorship of the Lord Chancellor. As your Lordships will see from a perusal of the Bill, it is a technical one. I shall not weary the House on Second Readinct with its details, but the object of the Bill is not technical. The two objects are twofold: the first concerns a ground of principle, to which I will refer later, and the second is more practical. That one consists in my hope (be it well or ill-founded) to succeed where many other Lord Chancellors, with one exception, have tried and failed, in their attempts to bring to a successful conclusion the long and hitherto unsuccessful campaign for universal land registration in this country. There is one exception to the melancholy procession of Lord Chancellors who have attempted this labour of Sisyphus in vain, and that was the attempt of my noble and learned friend Lord Dilhorne. But, as I shall attempt to show, his praiseworthy and, at the time, glitteringly successful foray, proved ephemeral and illusory in its effects.
But before I begin, there is one matter I should like to make abundantly clear. The failures to which I shall shortly draw your Lordships' attention of successive Lord Chancellors (including myself) to consummate land registration in this country have been at the political level. The Land Registry itself is extremely well run. I should not like any noble Lord in this House to go away with the idea that this Bill in any way involves a criticism, express or implied, of the
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devoted staff of the Land Registry, especially in recent years when they have been grappling with an accumulation of work and a considerable manpower shortage. So I say again that the Land Registry is, I believe, extremely well run, and I do not doubt, whether or not this Bill is passed, it will continue to be as well run in the future.
What the Bill seeks to do is to identify and, if possible, remove the political causes of political failure. If I may paint for a moment the background on the Bill, it will not be beyond your Lordships' knowledge that there are two separate methods of transferring land in this country. One is the traditional method which has been going on since I supose the time of the Paston Letters and before, consisting of a conveyance cunningly drawn by a solicitor or counsel. The other system is based on a simple transfer in a public register in the Land Registry, as happens, and as has happened in one form or another, in almost every other country in Europe.
I do not propose this afternoon to canvass the rival merits of the two systems. I consider that that question—if there ever was a question—was finally laid to rest in 1951 by the Gray Report. Briefly, there are two advantages in land registration. The first is simplicity and therefore relative cheapness. The second is that the Government guarantee the registered title and pay compensation if for any reason a registered title proves to be defective. It may be there are other advantages; I will content myself by stating those two. There are few cases in which the title proves to be defective. Both these advantages will remain untouched by the passage of the present Bill. They are perhaps advantages less strikingly apparent than in former times. It is true that a defect in title is only one of the pitfalls against which prospective purchasers must take precautions; and even with registered land there a great number of new pitfalls about which a wise solicitor will warn his clients. The advantages are still significant and are still worth striving for.
What is astonishing is that after more than a hundred years the process of land registration in England and Wales (and of course this Bill is concerned only with England and Wales; we can ignore Scotland for this purpose) is still so very far from complete. The Land Registry

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first came into being somewhere about 1862; the state of the law has been considered adequate since 1925. Yet now, in 1973, there are still about 27 million persons in England and Wales who live in areas not covered by compulsory registration. I hope to reduce this figure by 2 million next March under an Order I have recently made, but that Order was justified only by a rounding off of the local government areas consequent on local government reorganisation. But, bearing in mind that there are 49 million inhabitants of England and Wales, land registration will then still cover less than half the country on a population basis. On an acreage basis it covers only 8·3 per cent. of the country, and of course in addition voluntary registration has been suspended. Personally I regard this as a scandal. It is a minor scandal so one must not overdo it; but I thought it my duty since I was Lord Chancellor to try to identify and remove the causes of it.
The recent history of the matter derives, of course, from the Cave legislation of 1925. After that, there was a waiting period of 10 years before the introduction of Government sponsored compulsory registration to see whether the new Law of Property Act 1925 had so simplified conveyancing, as everybody hoped, that it would make compulsory registration unnecessary. So there was a 10-year waiting period. That brought us to 1936, and at that stage Middlesex and Croydon were brought in. In 1939 came the War. The addition of Surrey had been proposed but by the War it was not effected. In 1943, Lord Rushcliffe reported that after the War, when resources became once more available, compulsory registration should proceed more quickly. In 1951, Surrey was added, 13 years after it had been proposed. At that stage three local law societies then demanded a public inquiry as to the advantages of the system in general. This led to the Gray Report to which I have already referred. Between 1952 and 1964 Kent and Berkshire were added together with 11 county boroughs. By this time the system applied only to areas in which 14 million people resided. Then the noble and learned Viscount, Lord Dilhorne, then Lord Chancellor, announced at last a real expansion programme which thereafter
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came to be known as the 8-year plan. This was designed to cover all built up areas of the country with a total of 40 million inhabitants by April, 1973.
My Lords, what happened to the 8-year plan? Why is it that by April, 1973, only 22 millions were covered and not 40 millions as planned? The answer is to be found in the Hansard of this House of July 31, 1968, when the noble and learned Lord, Lord Gardiner, then Lord Chancellor, made an announcement. I want to hasten to say that I put no blame on the noble and learned Lord. The 8-year plan was, however, laid to rest by the noble and learned Lord, in spite of the protests from the Liberal Party and my own. The reason given by the noble and learned Lord was the need not to increase the number of civil servants and therefore Government expenditure, although it was pointed out to the noble and learned Lord at the time, as perhaps he may well point out to me when he comes to make his eagerly awaited speech this afternoon, that in fact the Land Registry has always paid its way, and has even paid for its own Land Registry.
We cannot inquire what travails the noble and learned Lord had suffered within the Labour Government which drove him to make this sad announcement. What in the corridors of power led to the ultimate defeat on July 31, 1968, of the noble and learned Lord, Lord Gardiner—Agonistes—a dedicated law reformer, at the hands of his colleagues, is decently veiled from the public view. No Tory bug, no Labour Watergate, has yet penetrated the Cabinet Room in Downing Street, or the secret conclaves of Permanent Secretaries elsewhere in Whitehall. Perhaps that is a good thing. But as I must have undergone something not wholly dissimilar, it is relevant to this Bill for me to tell the House at least my owl conclusion, which, if it is not proved, is at least corroborated by the Hansard extract to which I have referred.
Make what allowance you will for the conservative character of the legal profession in both its branches, since 1925 at least all Lord Chancellors that I have known—and I think I have known most of them—have been ardent registrationists. I expect the noble and learned Lord is an ardent registrationist. Why then have they not succeeded in making better

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progress? The answer is that though it pays for itself, the Land Registry adds to the gross total of Government expenditure, and its manpower budget forms part of the so-called army of civil servants. In my view, the noble and learned Lord, Lord Gardiner, himself admitted as much in his statement in July, 1968. So long as this is so, it has occurred to me that the Land Registry will suffer, albeit unjustly, from the ups and downs, irrelevant as these may be, of successive turns in Government policy.
At this point, in all candour, I must explain the part which I have had to play in this matter. A by-product of recent economic changes has been the vast increase in the number of conveyancing transactions. This has meant that even the modest increase in staff that I have been able to achieve has been eaten away by current transactions and that there has been no room for expansion of the programme, and will not be, until the modest extension I referred to a moment ago takes place next Spring. In addition, I have been subjected, I suppose, to at least as much pressure on the manpower and expenditure front as was the noble and learned Lord in his turn. It is clear to me at least that the work of the Land Registry and its legitimate extension over the whole of England and Wales has been hampered in the past and will continue to be hampered in the future by its present incorporation into central Government. I believe that the present organisation is also wasteful of scarce resources, since forward planning is both intricate and costly and is easily dislocated by delay.
My Lords, I now come to the question of principle to which I referred. I believe it is wrong in principle that the business of land registration should be regarded as one of the functions of Government for whose day-to-day operations a Minister is directly responsible. It is wrong, I would submit, that the business of the Land Registry should be liable to be interrupted by constraints on manpower which may be appropriate, or at any rate inevitable, in the normal functioning of a Department of State, but it is surely out of place in what is essentially a self-supporting business whose activities have to be planned for a long period ahead. This approach is consistent with the Government's general view that it is
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not sensible for them to undertake functions or perform services which may be performed just as satisfactorily, or perhaps more satisfactorily, by a body not subject to detailed ministerial supervision and is thus freed from the "Stop-Go" policies which have bedevilled the Land Registry for the last ten years or more.
I believe that the present arrangements are wasteful of scarce resources because forward planning is both intricate and costly and is easily dislocated by delay—and I quote here from the Chief Land Registrar's report of last year, 1972–73, in which he says:
"The slowing down and subsequent halting of the programme have created difficulties which will be accentuated when we are called upon to start again. Thus, when the eight-year plan was in full spate many index map sections were prepared for proposed new compulsory areas, but these have never been used and, with each passing year, the maps become increasingly out of date because of continuous development or redevelopment; so that, if and when compulsory registration is introduced to these areas, there will be a substantial increase in the number of ad hoc surveys."
I do not think I need to labour that point. A shelved plan soon becomes an obsolete plan.
My Lords, the Government consider it both necessary and urgent to arrange matters so that the Land Registry can resume, and this time I hope carry through without interruption, its expansion programme. I do not think there is anything wrong with the quality of the staff or its internal organisation. It is its relationship to central Government which has hampered its advance. It is this which, if I am right, the present Bili sets out to alter. It would be objectionable if it were likely to cause difficulty in the longer term; and I do not think that is so.
Under the Bill, my Lords, I am retaining control df the questions hitherto reserved to the Lord Chancellor by Statute, such as the making of fee orders and amendments to the rules and questions of general policy. Apart from this, under the Bill the Land Registry will run itself as it is very competent to do. There will be, of course, as there are now, some complaints about day-to-day matters. These will be dealt with by the independent Board, which I contemplate may contain part-time members representative

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of those who have an interest in the problems of land transfer, as well as the present Registrar and his senior staff.
I have explained what I regard as the advantages of the proposed hiving off. Against that one has, of course, to consider whether there would be any disadvantages to any section of the community, and I consider these now. First of all there is the customer; that is to say the people transferring land, the proprietor of registered land whose title has hitherto carried the label of "State guaranteed". From now on the guarantee will be continued, and although the strict label of "State guarantee" may not be appropriate I cannot see any practical question arising. The public will retain the existing advantages, and if I am right in hoping and even anticipating that the barriers to expansion will be removed, these advantages will be extended to new areas of the country. Secondly, we have to consider the interest of the practitioners. I believe that I can dispel any fear that practitioners will be adversely affected by having to learn new law or new practices. The Bill is concerned with the administration of the Land Registry and not with the system of land registration, so the technical provisions of land registration will remain substantially unaltered. The worst that can be said from the practitioners' point of view is that conveyancing will be simpler and therefore I hope relatively cheaper.
Naturally the staff of the Land Registry have been concerned to know what their position will be under this legislation. My Lords, all staff at present serving with the Land Registry will be transferred to the new organisation on the appointed day. They will cease to be civil servants, but we are prepared to guarantee that the terms of employment offered will be the terms on which the staff were serving on the day before the transfer. Moreover, it is the Government's intention that after the change Civil Service terms and conditions should continue to apply to the staff of the new organisation so that there will be freedom of transfer between the Land Registry and Government Departments. The staff of the Land Registry will continue to belong to the Civil Service superannuation scheme. All new conditions of service and pay agreed for civil servants will apply automatically to the staff.
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There will be detailed discussions with the Staff Side on the arrangements necessary to bring all this about.
My Lords, may I now pass very quickly to the contents of the Bill. Clauses 1 and 2 give the new structure of a public authority which will run the Land Registry in conjunction with a Chief Land Registrar. He will be chairman of the authority, as well as retaining his judicial functions, and he will he an experienced lawyer as his predecessors have always been. Clause 3 transfers general responsibility for the business of the Land Registry to the new authority and Clause 4 lists the powers and duties which it will need as an independent body. I should mention that Clause 4(1)(c) includes the power to establish a code of practice which will remove some matters of detail from the ambit of the rule committee; and subsection (3) makes it clear that the privacy of the register which is to continue is not to be a screen behind which criminals can hide their identity or conceal the profits of crime. I hope that no one will quarrel with that.
Clauses 5 and 6 provide for the appointment of the Chief Land Registrar and his deputy. Clauses 7 and 8 give the Lord Chancellor the degree of ministerial control which we think is required. It gives him power to give directions on policy matters, and he is to receive an annual report which will be laid before Parliament so that the Houses may keep an eye on the general conduct of the business.
LORD SLATER: My Lords, in regard to the setting up of this particular board and the chairman who is to be a lawyer, do I take it that the position of the new chairman will be a full-time post and that he will have no other outside interests?
THE LORD CHANCELLOR: Yes, he will be the Chief Land Registrar. I am much obliged to the noble Lord for his query. At this point I should like to say something about the membership of the board. The first thing I have to do is to appoint the Chairman who will be the Chief Land Registrar and, in consultation with him, the other members. The Land Registry's business is, of course, highly technical and it seems to me inevitable that the full-time members of the

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board should be drawn from the senior members of the present management who are civil servants with great experience and knowledge of the system. Whether there is advantage in having outside members in addition is a point on which I have an open mind. I certainly do not rule out part-time members representative of other interests and I shall of course listen to any representations made to me about that. The remuneration and terms of service of the board members are left at large in the Bill, to he determined by agreement with the Minister for the Civil Service.
Clauses 9 to 15 contain financial provisions of a kind with which I think the House has become familiar in similar legislation. Clause 9 requires the Land Registry to break even, taking one year with another, and to comply with other directions. Clause 10 requires the authority to assume any initial debt in respect of property transferred to it from the Crown, and that is a common feature of this type of legislation. Clause 11 gives it the necessary borrowing powers which I hope will be needed to finance its expansion. Clause 12 provides for surplus revenue to he paid into the Consolidated Fund for the benefit of the general body of the taxpayers; but I must emphasise that it is not intended that this should be a profit-making body on a significant scale. Clause 13 enables the Treasury to guarantee the borrowing; that will give it the advantage of lower rates of interest. Clause 14 requires audited accounts to be submitted to the Comptroller and Auditor-General. Clause 15 ensures that the power to prescribe these is exercised so as to give the Registry the revenue it needs, and covers some other points of detail. That is under my control. Clauses 16 to 20 are miscellaneous and supplemental. Clause 16 enables the Lord Chancellor to designate areas for future compulsory registration and cuts out the previous system of Orders in Council. Then there are four Schedules.
My Lords, I do not pretend that this Bill makes particularly exciting, popular reading, but for the reasons I have given I hope the House will consider, as do the Government, that it is quite an important measure and that it will produce a substantial benefit in the form of a smooth expansion, as I hope. of the compulsory
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registration system. On that basis, my Lords, I commend it to the House and beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a. —(The Lord Chancellor.)
3.32 p.m.
LORD GARDINER: I am sure that the House will wish me to thank the noble and learned Lord the Lord Chancellor for the trouble he has taken to explain this Bill to us. Perhaps the first two things that I should say about it are, first, that it is a silly Bill, and secondly that I could not put my hand on my heart and say I was certain that, if I had still been in the place of the noble and learned Lord, I should not myself he introducing the same silly Bill. There is of course no question of Party politics here, and a great deal of common ground. As late, I think, as 1925 there were still some who did not support compulsory registration of title. I doubt now whether, with our experience, there is any informed opinion which does other than support it, for the very simple reason that, although a first registration is more expensive than an ordinary conveyance, every subsequent transfer of the land is quicker, simpler and cheaper.
It is right to record at once, as indeed the noble and learned Lord has done, that it was two months before the General Election of 1964 that the noble and learned Viscount, Lord Dilhorne, announced that he was instituting a crash programme for pressing on with compulsory registration of title which would cover all the built-up areas of the country within eight years; and, if my recollection is right, it was then thought that it would take another seven years to apply it to the outlying areas. I introduced a Land Registration Bill on May 24, 1966, when I explained that the purpose of it was merely to clear away one or two things which were holding up the development of the eight-year plan. I said how much I supported the plan, and would wish to see it carried out as soon as possible, and I paid tribute to the noble and learned Viscount, Lord Dilhorne, who had started it in August, 1964. Up to that time it had been going well.
Then, two years later, came devaluation. The noble and learned Lord the Lord Chancellor rather suggested, I

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thought, that I had informed the House that, for some reason which I did not explain, land registration was going to be slowed down. But, in fact, on devaluation it became necessary to restrict Government expenditure. There were, as your Lordships will remember, cuts all round, and one of the cuts took the form of a pledge that the number of civil servants would not be increased for a period of 12 months. It was in the course of an economic debate explaining the Government's then economic policy on devaluation that I explained this, and said that one of the unhappy results, from my point of view, would be that it would inevitably lead to a slow-down in the eight-year plan.
The trouble all the way through here has been that politicians tend to make promises—not always. if I may very respectfully say so, wisely; and, in particular at Election times, a promise not to increase the number of civil servants is always popular. The noble Earl, Lord Selkirk, two or three months later, asked a Question putting his finger on the real point. This was on July 31, 1968, when he asked Her Majesty's Government:
"why it has been necessary to suspend the extension of land registration, and how long this suspension is likely to last."—[OFFICIAL REPORT, Vol. 296, col. 306.]
In reply, I said (cols. 306–7):
"…in spite of increased efficiency and productivity, the introduction of new areas of compulsory registration of title to land inevitably leads to the need for more staff in Her Majesty's Land Registry. In consequence of the Government's decision not to increase the number of civil servants during the present financial year, as announced by my right honourable friend the Prime Minister in another place on January 16, Her Majesty's Land Registry have been unable to recruit more staff and have thus been unable to accept further areas of compulsory registration of title to land. I hope that before very long it will be possible to continue with the plan to extend the compulsory registration system throughout the country."
Then the noble Earl, I thought, put his finger on the real point when he said (col. 307):
"My Lords, can the noble and learned Lord confirm that this registration is self-supporting from the fees of registration, and that the last five years have shown a surplus of some £1,250,000? In these circumstances, does this really constitute a charge on the public purse, and could this registration not be proceeded with rather more quickly or more steadily than in the past?"
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As I had to explain, when the pledge had been given—and, indeed, when it generally is given—no such exception was allowed for. Of course, what, if I may respectfully say so, leaders of political Parties ought to do, if they are going to give a pledge about civil servants, is to add:
"but that will not of course apply to those who do not cost the country anything."
That has always been the position here because the fees are charged so as to break even, taking one year with another. There is always continual inflation—I suppose there has been throughout this century. The situation continues until a year arrives when the Land Registry makes a loss, and that perhaps runs for a year or two. Then the fees are put up. Then it makes a profit, when it ought to break even, and the profits gradually grow less each year. When I was in office the state of accounts between the Land Registry and the Chancellor of the Exchequer was that the Chancellor of the Exchequer owed me £4 million because the Land Registry at that time had over the years made a profit of £4 million.
May I come now, before returning to that question, to a few points on the Bill itself? The first is on Clause 2, which provides:
"There shall be established a public authority. to be called"—
Surprise, surprise!—
"the Land Registry".
Under Clause 2(3) the Chief Land Registrar is to be chairman; and there are to be not less than four nor more than ten other members. So it is a board of from five to eleven. May I ask the noble and learned Lord whether I am right in thinking that they are to do exactly the work which the Chief Land Registrar has so far done perfectly well all on his own? I gather that the noble and learned Lord is still in doubt whether or not there will be outsiders. If they are simply junior members of the Land Registry staff I suppose they will say whatever the chairman says: or it will be an unhappy office if they do not, If they are outsiders, how exactly they are to help I do not know. I see from Schedule 1 that they are to be paid. I should have thought, with some respect, that this is all really rather a waste of money.

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Then there is Clause 9. That very properly begins by re-stating the present position, that the Land Registry should make ends meet taking one year with another; but subsection (2) says—and I view it with some suspicion:
"The Lord Chancellor may, with the approval of the Treasury and after consultation with the registering authority, give a direction to that authority that it shall exercise and perform its functions during any period specified in the direction with a view to securing that it achieves in respect of that period a rate of return on the value of its net assets (as for the time being defined for the purposes of this subsection by the Lord Chancellor) which is not less than such rate as the Lord Chancellor specifies in the direction as the rate of return which he considers it is reasonable for the registering authority to achieve."
I confess that whenever I see in any legislation the words "the Treasury", I am somewhat suspicious. If the Land Registry is under a statutory obligation to make both ends meet taking one year with another, why is it necessary to have a provision that the Lord Chancellor, with the concurrence of the Treasury, shall in effect (if I have read it rightly) order them to make a profit?
Let me take from the Chief Land Registrar's last report the results of the last six or seven years. In 1966–67 there was a loss of £19,000; in 1967–68 there was a loss of £17,000; in 1969–70 there was a loss of £483,000 and in 1970–71 there was a loss of £908,000. At that point the fees were put up. Unfortunately, they were put up too much because for the year 1971–72 a profit was made of £2,300,000 and for 1972–73 there was a profit of over £6 million. All that represents gross overcharges on the unfortunate people who used the Land Registry. If I say that that ought not to have taken place I quite understand the difficulties of the Lord Chancellor and the Chief Land Registrar in seeing what would happen in relation to transfers of property at a time of inflation.
The Chief Land Registrar said in his report:
"The preponderance of estimated revenue over estimated expenditure is unwarrantably large."
Then he explained:
"The Land Registration Fee Order 1970 was made, after about two years of careful research, upon the basis of events which were then conceived to be likely to produce a break-even financial situation."
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He could not have foreseen, I think, that even two years of Conservative Government would have shown the enormous extent of property speculation and the devastating effect which it has had on the whole of the property market. Of course he did not put it that way himself; what he actually said was:
"No one could then have envisaged the prolongation of the enormous upsurge of conveyancing transactions, let alone the wildly inflated prices that real property now commands".
He ended by saying:
"However, it is clear that we must use our best endeavours to avoid a comparable disparity between revenue and expenditure for the future."
So I should like to ask for some further elucidation of Clause 9 and of what appears, on the face of it, to be a power of the Lord Chancellor not to compel the Registry to reduce its fees but to compel it to increase them.
My third point is concerned with Clause 10–and again I am sure it is my own fault that I do not understand it better. Subsection (1) reads:
"The registering authority shall assume, in accordance with the following provisions of this section, debts to the Lord Chancellor (in this Act referred to collectively as the initial debt') in respect of the property and rights. transferred to the registering authority by virtue of paragraph 1 of Schedule 3 to this Act."
As I believe I am right in thinking that the London Land Registry was built entirely out of the fees of the people who used it and that the Government of the time never had to pay for it at all, if there are registries elsewhere which belonged to the Government and have been transferred to the Land Registry it might be proper to allow for that fact. But may I ask what is to happen to the £11 million (I think that is the figure now) that the Chancellor of the Exchequer owes to the Lord Chancellor at the moment? I am quite clear in my recollection that it was £4 million when I was in office; then, as we see, in the last two years they made a profit of over £8 million, so the figure is something like £12 million. Are the Treasury going to give credit for that sum?
The fourth point refers to the staff, and here I am really rather concerned because these, after all, are civil servants. They presumably took their Civil Service examinations, decided that they wanted to

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be civil servants in life, looking forward to completing their years of service in the Civil Service, able to transfer, of course, from one Department to another. As I understand the position they are safeguarded as to superannuation and as to redundancy pay, so that for the purposes of redundancy pay their time with the Government will count; but although the noble and learned Lord says that their terms of service are guaranteed to continue I cannot find anything about that in the Bill. Of course I may have missed it. However, if that is to be so, ought it not to be in the Bill? At the moment. of course, they are employed by the Crown; now they are going to be dismissed, and I suppose they will have an ordinary contract of employment with the Land Registry. There does not appear to be any provision in the Bill that their terms of employment by the Land Registry are to be no worse than their terms and conditions of service in the Civil Service. Of course, in practice in the Civil Service there is a great deal of security of tenure, but whether that will happen at the Land Registry I do not know.
Then may I ask whether I was correct in understanding the noble and learned Lord to say—although, here again, I am not absolutely clear from the Bill—that they will be transferable to other Civil Service Departments? As it happens, a leading article in The Times yesterday dealt with those extraordinary people, the Crown Agents, and in the course of that article there appeared something that I did not know. It reads:
"At the moment, the Select Committee on Overseas Development is prevented from conducting its own study of the Crown Agents as is the Public Accounts Committee, even though the Comptroller and Auditor General conducts an annual audit and presents his findings to the Foreign Office".
Then it says:
"The 1,800-strong staff enjoy transferability with the Civil Service and operate similar gradings, but constitutionally M.P.s are debarred from looking at its personnel policy and spending decisions".
I did not know that there was in existence any outside body which had transferability with the Civil Service. Am I to take it that it will in fact apply to the staff of the Land Registry?
The last point I should like to raise is whether this register of land will be
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open to public inspection. I am sure that the noble and learned Lord is a very much better comparative lawyer than I am, but as he rightly says, this system of compulsory registration of title forms part of the law of nearly every Western European country. Am I not right in thinking that in most of those countries this public register is, as a matter of course, open to public inspection? This is a point which has been raised many times in the past. Property owners always objected; everybody else wants it. Only in England is it thought to be something indecent that anybody should want to know who owns a particular piece of land. Obviously, property speculators welcome the position because nothing is more difficult than to find out who is doing the property speculating, and there are a great many tenants who find difficulty in discovering the identity of their landlord. May I ask the noble and learned Lord whether the Government have a policy on this, and whether they would welcome or regret an Amendment at the Committee stage of the Bill to provide that the Register, which at present, is open only to those considering buying a piece of land or, I believe, to the Director of Public Prosecutions, should be open to the general public?
The sole cause of this Bill is the unhappy disposition of budding Prime Ministers to make unwise electoral promises about the number of civil servants. I have sympathy with the noble and learned Lord in his difficulty. In a sense, this is an ingenious way of getting round it: let us make them not civil servants, and then we shall not have this trouble again. The difficulty about these promises is the question of how one can possibly tell, when starting in Government for five years, whether or not one will need an increase in the number of civil servants. To some extent—and this applies to local government, too—an increase in population must require an increase in civil servants; and similarly with an increase in prosperity. If there are more motor cars, there have to be more clerks to see to the taxation and licensing of those motor ears, and so on. One may have to have petrol rationing. One cannot tell five .(ears in advance. It would not have mattered if only the persons making the promise had added a proviso to say that this aught not to apply to civil servants whose

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remuneration does not increase Government net expenditure.
My Lords, on the subject of the above points I do not intend to ask my noble friends to vote against the Second Reading of the Bill. But, apart from the points to which I have ventured to refer, my present intention is to move a short Amendment at the Committee stage. Subject to what the noble and learned Lord may say in reply (naturally, I hope lie will say, "Yes; that is a good plan, and if you will move that Amendment I will certainly accept it.") my short Amendment would be to omit Clauses 1 to 20 inclusive, and Schedules 1 to 3 inclusive, and to insert instead:
"1. Any promise by the leader of any political party as to any number of civil servants shall be deemed not to apply to or include any civil servants employed in the Land Registry."
This would have exactly the same effect as this Bill. It would enable an 8-year plan to go forging ahead; it would save a Bill of 20 Clauses and 3 Schedules and the Bill would become a one-clause Bill; it would save the staff any embarrassment and retain their civil servant status. It would save all this upheaval and would save the remuneration of the body of four to ten people who are going, as I think is conceded, to be there to do what the Chief Land Registrar has done all by himself for very many years.
3.53 p.m.
LORD WADE: My Lords, before the noble and learned Lord the Lord Chancellor replies I have two short questions. I recall very well the statement of the noble and learned Lord, Lord Gardiner, about the Code in the Civil Service and am in sympathy with his comments, but I am under the impression that the Code of Recruitment of civil servants was intended as a temporary measure at that time. I should be interested to know, as a matter of history, whether the hold-up in the extension of the Land Registry lasted considerably longer than that temporary measure. But to come to the Bill, as I understand it, this is intended to be self-financing.
LORD GARDINER: My Lords, if the noble Lord wishes to know subsequent history, there was a document called, A Better Tomorrow, which said, "We will reduce the number of civil servants."
LORD WADE: I am much obliged to the noble and learned Lord, Lord Gardiner. I do recall that document, and must reread it. The noble and learned Lord the Lord Chancellor has made it clear that this Registry is intended to be self-financing. Does that mean strictly on a year-to-year basis? If so, is there a prospect of charges bobbing up and down, year by year? I am well aware that charges generally bob up rather than clown, but there is surely a point in this question of land values referred to by the noble and learned Lord the Lord Chancellor. If there is a surplus, and if in addition there is a prospect of the values at which land will change bands rising over a period of years, it would seem to me that one could reasonably accept that the fees will remain at roughly the same amount over a period of years and will not change year by year.
3.55 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to welcome this Bill to a slight extent. So far as it will achieve the object of speeding up land registration, I am sure it is a good thing. I have been a believer in land registration ever since I became qualified as a lawyer, and in the past I have had many contacts with the Land Registry, to whose efficiency I would certainly pay very high tribute. I am a little surprised to discover from the speech of the noble and learned Lord that this new board is going to consist probably of employees of the Land Registry. This is certainly a new development in public boards, but I do not complain about it. Perhaps it is a good thing. But it ought to be made clear that that is the position and that it is not intended to introduce into the management of the Land Registry some external influence which is not familiar with its working; because the work of the Land Registry is very difficult and highly technical. It has been developed to a point of very great expertise and should not be disturbed. It ought to continue along the lines on which it has been so successful in the past. However, if this measure is going to expedite land registration, then it is a good thing. But may I ask the noble and learned Lord, after this Bill is passed, to introduce into law as soon as possible a consolidating measure dealing with land registration, because the law stands now in different

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Statutes and it is getting quite complicated and difficult to find.
3.57 p.m.
THE LORD CHANCELLOR: My Lords, I am grateful for the various questions and comments which have been put. I hope that in the course of my few remarks I shall answer most cf them. If I do not, no doubt noble Lords will take them up with me at some time. To begin with, I am able to give a certain pleasure to the noble Lord, Lord Wade, and what I say may have a certain relevance to one of the questions put by the noble and learned Lord, Lord Gardiner. Charges were reduced by 20 per cent. in June this year, and that was, I think, the result of an action by the Lord Chancellor's Department. It was, of course, due in part to the surplus which was made. It was also a contribution, so far as I could make it, although a small one, to costs in a period of rising prices.
In answer to the noble Lord, Lord Wade, may I say that we do not intend that self-financing should work in every twelve months. In answer to the noble and learned Lord, Lord Gardiner, yes, in principle, of course, all the money goes back into the Consolidated Fund. That is provided for in the Bill. But if one finds a surplus going back into the Consolidated Fund, it is at any rate legitimate for the Lord Chancellor to reduce the charges, and therefore for Parliament to bully the Lord Chancellor into so doing. That is the idea, and that is what I did whilst I was still responsible fot the day-to-day affairs of the Land Registry. It will be continued in the provisions of the Bill. We do not visualise this as a profit-making concern, bringing in revenue to the Consolidated Fund. It is true that in assessing what is and what is not a profit, the Land Registry must conform to the general policy executed by hived-off bodies in regard to interest charges. It also must pay a charge on its capital assets, even though, as a matter of history, the noble and learned Lord is quite right. If my memory serves me, I also said in my opening speech that as a matter of history the Land Registry itself—which must be worth a good many millions; I do not know how many; I am not good at that kind of thing—was originally paid for out of the various fees charged in the past,
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though a good time ago now, by previous conveyances.
The Land Registry has been and remains, and is intended to remain, a self-financing body under the new scheme. As a matter of mechanics the money has to go back into the Consolidated Fund. Obviously, the rate of interest is something which will have to conform to general Government policy. I should like to accept the noble and learned Lord's implied confidence that a Conservative Lord Chancellor will remain in office for a very long time and that I should therefore be able to give a complete guarantee as to future policy. That, however, is in the lap the gods. The Bill says what I have said the Bills says and our policy remains what I have said our policy remains.
The noble and learned Lord began by saying that this was a silly Bill, but he was not at all sure that he would not have done the same thing himself in my place. I think that was a fairly generous tribute. I do not think it is a silly Bill. I think I have been able to identify one of the reasons why land registration has not progressed. I may be proved wrong, but only time will show. If I am right, it is not a silly Bill. Moreover, I must tell him that it is not pure chance; it is not simply due to promises about numbers of civil servants that has led me to this identification. It is part of the policy of this Government to hive off self-sufficient organisations of a public character where hiving off can be clone without detriment to long-term policy or to the staff or to the customers who may be using the service. We think this leads to greater efficiency, and it enables us to insulate self-sufficient bodies from the ups and downs of day-to-day Government policy. Although I appreciate that the noble Lord's proposed Amendment may have been in part a jeu d'esprit—I do not know how seriously he meant me to take it—I should think that the principle upon which the Bill is based is one which can be justified better than the rather cynical principle upon which his proposed Amendment would be confessedly founded.
It is not quite true that the new board will do only what the old branch of the Lord Chancellor's Department did and has been doing, and is doing. As the noble and learned Lord must recollect,

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there are a great number of day-to-day criticisms which come in relating to the Land Registry, about delay in the registering of a particular title or difficulty about a battle concerning a particular conveyance, to which, in the ordinary course of events, the Lord Chancellor has to write a reply in his own hand now, as the old Postmaster-General used to have to write in the past when the Post Office was a Government Department. This is probably better done by a day-to-day management board. It is precisely for that reason that it might be advisable—I am tempted to think that it would be advisable, but, as I said, I keep an open mind—that one or two part-time lay members of the board might represent the consumer interest perhaps a little better than a staid old lawyer who wears a wig and gown on the Woolsack every afternoon. It may or may not be so, but at any rate the case is arguable and I think it probably is so.
As I say, I sympathise with the noble Lord's difficulties in 1968 and I hope I have identified one of the causes. Indeed, in his own way I think the noble and learned Lord confirmed my diagnosis. I should like to reflect; and I should like the House to reflect that it may be that his and my misfortunes are an example of a general proposition: that these self-sufficient bodies are better organised by what you might call the buffer principle of administration, leaving the Minister in general charge of policy by giving him a power of direction and cutting him off from day-to-day management, so that the thing may develop of its own dynamism.
I think I have dealt with the noble Lord's point about the Treasury, and I will not enter into his political point about two years of Tory government putting up the price of land. We have dealt with that in economic debates, and, as the noble Lord, Lord Robbins, pointed out in a very striking speech about a year ago, one of the consequences of inflation, whoever is responsible and whatever is responsible, is that people losing confidence in money tend to invest in land and push up the value of land beyond what any person of any political persuasion would like to see. That is not a thing we want to see. It had the byproduct, of course, that the profits of
926

the Land Registry were rather higher than had been calculated, and it was for that reason, though I do not claim much credit for it, that I was able to put down the fees last June, and of course if the situation should recur I would try to put down the fees again. I am one of the very few people who can claim honestly to have reduced charges in the last 12 months.
As regards the staff, I think I covered the point the noble and learned Lord raised in my original speech, and what I actually said had been agreed verbatim with the unions concerned. I should prefer, if I may, not to embellish it now, for fear of giving an alternative text to that which has been agreed. I do not think it is convenient in these cases to spell out the staff conditions; I do not think it is usual to spell them out in an Act of Parliament. I believe the unions are best left to negotiate with the Government in a matter of this kind; I think they have done so to the advantage of their members, and I have tried to play my part in it, equally with a due sense of their legitimate anxieties. I do not think I should like to see it written into the Bill.
The noble Lord also asked a question about public inspection. This raises a much more difficult question. I do not want to enter into it in any detail now. It is true that titles in land are confidential in this country. It may be true, for aught I know, that in some other countries they are not. But it does not seem to me that there is a case for making registered titles non-confidential and unregistered titles, which still represent more than half, confidential. Indeed it might impede the principle of the extension of land registration which I want. I should not welcome a change for registered titles in this Bill, leaving unregistered titles confidential. It is a general issue, but I would say here and now that I personally sympathise with the rather separate point the noble and learned Lord made about the difficulty a tenant feels in identifying his landlord, and I am trying to see at this moment what I can do about it; but, of course, this involves more Departments than my own, and I am not in a position to make an announcement at the moment. However the noble and learned Lord may be assured that I am seized of the point

927
and I sympathise with what he says about it, though I should not like to see it in this particular piece of legislation.
The noble Lord, Lord Douglas of Barloch, gave me welcome support for the general principle. I take what he says about the desirability of consolidation. We are pressing on with our consolidation measures as fast as we can. As he will have noticed, earlier this afternoon I proposed, and the House passed, the Second Reading, of another Consolidation Bill, relating to Slaughterhouses, and not Land Registration. I simply would take on board what he says about consolidation of Acts relating to land registration. There are many other Acts which require consolidation. He is pushing at an open door so far as I am concerned. I hope that we get on with consolidation as fast as the shortage of Parliamentary draftsmen will allow us to do. In the course of my remarks I have answered his other point about employees.
As I say, I am attracted by the suggestion that there should be others on the Board apart from full-time members of the office, and largely because I hope that some of the day to day duties of the Lord Chancellor may be hived off on to the board and its representatives. I think that members of the public should also be on the board in order to represent the consumer interest. Having said that, I am grateful to all three noble Lords who have spoken. I hope that the House will now be prepared to give the Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SAFETY OF SPORTS GROUNDS BILL [H.L.]
4.11 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I rise to move the Second Reading of this Bill, which implements the main recommendations of the Report prepared by the noble and learned Lord, Lord Wheatley. The Bill aims to provide a reasonable degree of safety for members of the public attending sports stadia as defined in the Bill, and potentially at any rate other sports grounds.
We are fortunate in this House in having as a background to this debate the
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earlier debate last January initiated by my noble friend Lord Kinnoull when we discussed the Wheatley Report as, I think, the last in a fairly long series of reports on this subject. I do not think that I need again go through the whole range of reports on the disasters at Wembley, at Bethnal Green underground station, Bolton Wanderers football ground, and indeed other related reports like that of Mr. Winterbottom for the Sports Council. There is in addition Sir John Lang's Report in 1969 on Crowd Behaviour at Football Matches. All these have contributed to our knowledge on this subject. They have all, in the end, led to reliance so far on voluntary measures for looking after the safety of the public. Certainly Sir John Lang's Report in 1969 recommended the updating of the Football Association's 1948 guidance on safety measures.
All that was overtaken by the disaster at Ibrox Park in 1971, and that, in due time, led to the Wheatley Inquiry. I do not think that I need go into the disaster at Ibrox Park. We discussed that before, and my noble friend Lord Kinnoull told us about it and the dreadful casualties. Of course there was an inquiry under the Fatal Accidents Inquiry (Scotland) Act 1895. It was the turning point which led to the setting up of the Wheatley Inquiry to produce the Report that we now have. His terms of reference extended to all kinds of sports grounds, but the immediate problem was that of football grounds, and to them he gave most of his attention. He published his Report in May of last year, and when it was published, the Government announced their acceptance of it in principle. Considering that he did this very largely in his own time and took a great deal of trouble about it, it is right that I should again, as I did in January, on behalf of the Government thank the noble and learned Lord for his assiduity and industry in doing this work, and doing it so quickly and thoroughly.
He appraised the existing arrangements. His scrutiny left him in no doubt that the existing voluntary system of certification of grounds introduced by the Football Association was inadequate. He found that there were no requirements as to the competence of the people who carried out the annual inspection of the

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football grounds, and no specific standards which persons doing that job might use as guidelines. He also thought it possible that those engaged in such inspections could possibly be influenced in the standards that they applied by their knowledge of the financial state of the clubs concerned.
The noble and learned Lord also reviewed those existing statutory provisions which seemed to be relevant to the safety of spectators. Although they are somewhat different, we have the Building Regulations in England and Wales and the Building (Standards) Regulations in Scotland. These provide basic statutory safeguards relating to the structural strength and stability of new buildings and structures (or substantial alterations to existing buildings and structures), in football grounds. Certainly in England and Wales it is extremely doubtful whether the regulations apply to open terraces or hard standing at sports grounds, although possibly they do in Scotland. There are special controls in London over stands and structures, but again not, we think, open terraces. There are various other provisions. There is a section in the Pub filth Act 1936. There are parts of the Offices Shops and Railway Premises Act 1963, and certain provisions in the Licensing Act 1964, and indeed in the Fire Precautions Act 1971, which have a bearing on this. Even when he had put them all together, Lord Wheatley concluded that the law at present falls far short of providing a proper or effective control over football grounds as a whole.
We have, unfortunately, a dissatisfaction with the voluntary arrangements on which much reliance has been placed, a lack of adequate statutory provisions, and so the noble and learned Lord concluded that only a specially devised statutory scheme would ensure the control over safety standards at football grounds that he thought was necessary. He recommended a statutory licensing control exercised by the local authorities. He envisaged that this should be phased, starting with the large grounds, and he also recommended that there should be a right of appeal for clubs concerned against any decision by a licensing authority. Throughout his Report—and this is an important point—he was conscious of the need to reconcile the paramount
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aim of ensuring spectator safety with reasonable and practicable measures for individual clubs to be able to implement. There is this balance here that we all have to recognise.
When Lord Wheatley's Report was published, the Government also announced that, with an eye to legislation being prepared, there would be consultations with those concerned—notably, of course, the local authority associations and football interests. In the event, these consultations have largely been concerned with guidance on safety measures at football grounds prepared by the Technical Support Group to the Wheatley Inquiry, the product of which was Appendix A to the Report. It was at once apparent that, whether the promised legislation came sooner or later, all concerned needed to be agreed on the principles to be adopted in future for the safety of spectators, especially at football grounds, and that consequently what we needed was a code, to which I shall come in a moment.
The football authorities have left us in no doubt about their apprehensions about the financial effects of the Bill on clubs, and I strongly suspect that we may hear more about this aspect in the course of the debate. But, that apart, they have been of the utmost assistance in drafting the new code, which has just been published (I think at the end of last week), in the form of a little green book, and we should like to thank the fooball authorities for their help in this matter. More recently, there have also been consultations on the principal features of the proposed legislation, not only with the football authorities themselves but with local authority associations, the police, the fire services, as well as with representatives of other sports. Apart from this question of finance, so far as I know there has been no objection to the principle of this Bill, which is in any event very close, as I have suggested, to what the noble Lord, Lord Wheatley, proposed which I think was widely welcomed, in this House at least, in January.
It is worth while saying a word about the non-statutory code because, of course, this was one of the keys that Lord Wheatley put into his Report. The idea was to provide a basis for licensing authorities to use in judging what sort of licence to issue

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and what conditions to impose upon grounds. The guidelines in the Appendix to Lord Wheatley's Report were subjected to practical tests, as I told the House last January, and so that they could be set within the wider context of football as a whole they have since been made the subject of consultations with the football authorities and other interested organisations. They are in fact extremely technical, and they are also metricated. I am a little perturbed to find that foot pounds per foot width have turned into kilo newtons per metre width, which is apparently the latest blossoming of metrication. But, at any rate in most cases, we are given the old imperial measurements as well. Certainly it is a very technical document, and noble Lords who are interested in this subject will no doubt like to study it.
It is the result of a wide range of professional and expert advice which has been distilled into this code, and we deal here with matters like the strength and siting of crush barriers, the provision of entrance and exit routes (incidentally, there is a mistake in the diagram in Appendix B, which we are correcting), angles of slope for terracing, the construction of staircases and measures to ensure the safe movement of spectators both in normal circumstances and when there is an emergency. It is a very comprehensive and well-thought-out document. It is the first, I think, to provide a standard comprehensive guide to the measures needed for ensuring adequate safety standards for members of the public at existing sports grounds, and it is hoped that local authorities and other interested parties will be guided by it in deciding what measures may be appropriate at any particular sports ground. But it is to be non-statutory because, as the noble Lord, Lord Wheatley, recognised and we recognise, it is important to maintain the maximum flexibility to take account of the differing circumstances at individual sports grounds, which depend on such factors as their age, their size, their mode of construction and matters of that sort.
That was the origin of flexibility, but flexibility has gone further than that in this Bill because it pervades the whole of the licensing system that we are setting up. As I have already explained, it was recommended to us that the introduction
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of licensing should be phased so that the larger sports grounds, where the most obvious risks occur, will be dealt with first, and the designating order procedure in the Bill allows for phasing in exactly this way. As has already been announced by my honourable friend the Minister for Sport, following a meeting with representative authorities in the football world, only those grounds in Lord Wheatley's category I will be dealt with first; that is, international stadia, English First and Second Division and Scottish First Division clubs. Grounds in Lord Wheatley's categories 2 and 3 —and one wants to look at page 14 of his Report for these categories—will be dealt with later on, as the need arises. The grounds in his category 4, which have accommodation for fewer than 10,000 members of the public, have been specifically excluded from the designating order procedure in the Bill, although they are not exempt from control altogether, and will be expected to take measures to ensure a reasonable degree of safety at their grounds.
The Bill has been drafted with the risks at football grounds principally in mind, but it has been thought prudent to include stadia used for sports other than football, where similar risks may arise—for example, the large cricket grounds. Power has also been taken to apply this Bill, with such changes as are necessary, to places where sporting activities attract large crowds though the places are not stadia; that is to say, with stands all the way round—for example, race tracks and motor racing circuits. I say "with such changes as are necessary" because, of course, there would be full consultation with those concerned before the Bill was extended to a sports ground other than stadia, if only for the purpose of establishing what modifications to the non-statutory code of practice, the green book, would be needed. As the early paragraph 1.2 of the code says, it is primarily applicable to football stadia, and although a number of its recommendations would hold good regardless of the sporting activity concerned, modifications will clearly be necessary for other sorts of grounds. For instance, at race meetings spectators are constantly moving from a stand, say, to the Tote windows or to the unsaddling enclosure, and they are not mainly confined to one spot as

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at a football match. So one would inevitably need to have alterations if the designation powers were extended to other sorts of sports grounds.
LORD WIGG: My Lords, will the Minister pardon me? From what he has said, and having in mind the interpretation on page 12 of the Bill, may I take it that sports grounds do include racecourses?
VISCOUNT COLVILLE OF CULROSS: Yes, my Lords. The definition clauses have been very carefully drawn. If the noble Lord, Lord Wigg, will look at page 12 of the Bill he will find that he is quite right. Has the noble Lord got Clause 16?
LORD WIGG: Yes.
VISCOUNT COLVILLE OF CULROSS: The noble Lord will there find "sports ground" defined. To come within the definition, a place must be somewhere where activities are taking place in the open air, where there is accommodation of artificial structures, either buildings or adaptations of natural features, and where members of the public are invited as spectators, not private individuals. So that there are certainly opportunities here (and it would arise under Clause 14 of the Bill, which is headed "Power to extend Act by order") to get on to racecourses—but of course, powers subject to the procedure in the Bill. The noble Lord may be making a speech on this point in due course, and I shall listen carefully to him; but he is quite right.
As I have said, we shall need to consult carefully with the authorities concerned in order to provide that the right sort of code, like this one, with necessary adaptations, was introduced before we ever sought to extend it to places other than stadia themselves, which we have in mind at the moment. In fact, the representatives of the various sports which have been consulted in connection with the present proposals have in general accepted that it would be sensible for their sports to be brought within the scope of the Bill, if need be, and I think also the representatives of those sports which could be brought in, but subject to the qualification that they would need to be sure about the standards it was sought to impose upon them.
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Finally, I should emphasise that the requirements which may be imposed must be reasonable in the circumstances of each individual case. This is not merely recognition of the fact that absolute safety can never be guaranteed but an indication of the Government's concern that, without sacrificing the basic requirements of safety, the local authorities should have full regard to the individual circumstances—and I mean the individual circumstances—of an individual ground in deciding what precautionary measures should be taken. In addition, there is to be a right of appeal by interested persons against any requirements which a local authority might impose and provision has also been made for rights of hearing when appeals are made and for formal inquiries to be held where necessary.
My Lords, perhaps I may say a word or two about the substance of the Bill. Clauses 1 to 7 establish the main system of control under the Bill—the certificate procedure. The term "certificate" we have preferred to "licence" because "licence" suggests some kind of control over the sporting activity itself; whereas the sole purpose of the Bill is to provide means for spectators' safety to be reasonably assured. My right honourable friend the Secretary of State is empowered to designate sports stadia with a capacity of more than 10,000. Once a stadium has been designated, it will require a safety certificate from the local authority. Application for this will have to be made in the prescribed form, the status of the applicant established and the local authority (which will be a county council in England and Wales or the appropriate regional authority in Scotland when the Local Government (Scotland) Act comes into force) will be required to consult the police and fire authorities and the district council because the district council is responsible for the enforcement of the building regulations. After these consultations and any necessary inspection, the local authority will be required to issue a general safety certificate required for the ground.
The general safety certificate will be the main continuing form of control. It will specify the activity or activities at the stadium and the number of spectators who are to be admitted. Provision is also made—this is the second possibility I and it is a discretionary one—for the

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issue by the local authority of a special safety certificate to take account of the exceptional or occasional event at a stadium; for example, the use of it for an activity not specified in the ordinary certificate or a request for a relaxation of a condition in the ordinary certificate which might be acceptable subject to certain extra requirements being imposed. A typical case would be an application for more people to be admitted to a ground on a special occasion than the certificate ordinarily allows but subject to extra precautions being taken.
The safety certificate is to contain terms and conditions which will reflect the local authority's view of what will be reasonably safe for the public while enabling the stadium in question to continue to be used. Meanwhile, a term or condition might specify that a particular stand should not be used by spectators until certain works had been carried out. The management of the ground will have the choice of abandoning the use of the stand either indefinitely or for a period while they took action, as and when they were able, to bring it into condition to justify the removal of the restriction. This is flexible and can be changed as time goes on.
In addition to specifying in the certificate the terms and conditions that the local authority think necessary, they will in any case be required to deal with certain important matters. One of them is the maximum number of public to be admitted to the stadium as a whole or to any part of it; others are the provision of entrances, exits and crush barriers. Should any of these conditions be thought unreasonable, there are the appeals that I have mentioned. The noble and learned Lord, Lord Wheatley, recommended a special tribunal for appeals, but so as to avoid unnecessary proliferation of tribunals and to achieve uniformity of practice we have decided that appeals should lie to my right honourable friends, the Home Secretary and the Secretary of State for Scotland. If necessary, they will set up a formal inquiry as recommended by the noble and learned Lord, Lord Wheatley. Finally, under these clauses the holder of the certificate is to be placed under a duty to inform the local authority of any proposal to alter or extend the stadium where this would affect existing arrangements
936
for securing the public's safety. There are powers of entry and inspection in Clause 8–and these powers do not apply only to grounds which hold more than 10,000.
Clause 9 provides two important powers. Should a local authority apprehend a risk, either at a stadium which although designated has not yet been granted a certificate or at a non-designated stadium—and that could be one holding less than 10,000 people—they are empowered to apply to the magistrates' court or to the sheriff's court for an order restricting the admission of the public. This is a kind of emergency power probably to be used only after local negotiations have failed; but it means that the smaller clubs will not be able with impunity to ignore the safety of their spectators. There is provision in this clause also that the Crown Court, following a conviction on indictment, may in addition to any other penalty make an order banning or restricting the admission of the public to the ground. This is an added section to the provisions and penalties dealt with in Clauses 10 and 11 which are themselves fairly fierce; and particularly so in the case of indictment.
Clause 12 empowers my right honourable friends to make regulations in respect of the safety of the public at sports stadia. This is really a reserve power; we have no intention of using it at this moment. It could be used to prescribe minimum requirements for grounds not subject to designation or to give backing to requirements though necessary perhaps by something in the "green code book" which in the light of experience had been shown always to be essential and which should be given the force of regulation. Clause 14 allows my right honourable friend to extend the Bill by order to classes of sports ground other than stadia. This was the point raised by the noble Lord, Lord Wigg. Clause 15 applies the Bill to the Crown. I think there is a football stadium belonging to the Army. This might he involved and it is right, therefore, that this should be so.
Lastly, my Lords, a word on finance. As the first designating order will cover only about 80 grounds, the initial costs of enforcing the Bill as set out in the Explanatory and Financial Memorandum are comparatively small. The

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local authorities will in any case be able to offset their own expenditure by fees to be charged for certificates. As for the clubs, the expenditure, if any— because one must remember that there has been voluntary agreement on standards in force which many clubs have already put into effect—will depend upon the standard of safety that has already been achieved and upon the decision of the local authority in each particular case. We cannot give any overall estimate, but in the view of the noble and learned Lord, Lord Wheatley, the money for any necessary improvements will have to be found by the clubs and within football itself. That is certainly the view of the Government.
LORD WIGG: My Lords, surely what the noble Viscount is saying is not true! What the noble and learned Lord, Lord Wheatley, said in paragraph 60 was not that the money should be found but that he went to the Treasury and found that the Treasury would not give any money. Therefore he proposed to accept that. His Report is based on the hypothesis that there will be no money from the Government. For the Minister to say that Lord Wheatley stated that we should get no money from the Government is the reverse of the truth.
VISCOUNT COLVILLE OF CULROSS: My Lords, the noble Lord will be making a speech and I am sure that he will develop this argument. I can confirm that the advice given to the noble and learned Lord, Lord Wheatley, was right and that we do not propose to provide money from the public funds.
My Lords, those are the main provisions in the Bill. We want the scheme of control that we envisage to operate flexibly and reasonably having regard to the circumstances of individual clubs but we want to achieve a degree of safety which will considerably reduce the risk of another disaster of the kind which last occurred at Ibrox Park. I hope therefore that the Bill will commend itself to the House and that this afternoon it will be given a Second Reading. I beg to move.
Moved, That the Bill be now read 2a. —(Viscount Colville of Culross.)
4.40 p.m.
LORD GARNSWORTHY: My Lords, the House will be very grateful to the
938
noble Viscount, Lord Colville of Culross, for the survey he gave of the events leading up to the production of this Bill, so there is no need for me to go over all those matters again. We are grateful to him for the review he has given of the provisions in the Bill, and also for reminding us of our indebtedness to the noble and learned Lord, Lord Wheatley, for the work undertaken in the preparation and presentation of his Report. Let me say right away, my Lords, that we on this side of the House offer a warm welcome to a measure intended to ensure the safety of members of the public when they attend sporting events. No one wants a repetition of disasters such as that which occurred at Ibrox Park and the other disasters mentioned by the noble Viscount. We hope that the provisions in this Bill will prove to be a means of providing a greater measure of safety, and indeed complete safety in the future.
My Lords, last Friday afternoon I watched with some interest a B.B.C. television programme, I think it was called "Blue Peter", in which viewers were taken to Rome and were shown the Coliseum standing 2,000 years after it was built. We were told it accommodated crowds of 50,000 on many days of the year, I think some 170 days, and that there was nothing in the record to indicate that apart from what took place in the arena, there were any disasters.
VISCOUNT COLVILLE OF CULROSS: My Lords, noble Lords may remember my noble friend Lord Lyell's speech, in our debate in January, about ancient Roman disasters, and my dissociation on behalf of the Home Office from any responsibility.
LORD GARNSWORTHY: My Lords, the point is taken. It would be very good indeed if we could feel that as from the passage of this Bill there will be no further disasters in this country. One hopes that we have seen the last of them. As I say, we on this side of the House give the Bill a warm welcome and I think it proper that I should say, having been in touch with most of them, that local authority associations also give a warm welcome to the intentions of the Bill. Although the local authorities give this general welcome there are points of detail on which they have some reservations and I shall be touching on one ore two of

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them this evening or raising them during the Committee stage.
My Lords, I turn to those responsible for the implementation of the standards of control and safety as laid down in the Bill, the clubs and the organisations responsible for the sporting events concerned. I think it ought to be said that they, as much as anyone, want trouble-free sporting occasions. They wish the safety of the public to be guaranteed; they have nothing to gain, indeed they have a great deal to lose, when the safety of people attending the event they have organised is endangered, whether it be soccer, rugby, horse racing, tennis tournaments or whatever other sporting event may be arranged. I hope that before the Bill leaves your Lordships' House we shall have examined it very closely and made quite sure that it is designed to help those organisations as much as possible.
We need to look very closely at the burden which will be placed on the organisations, and to see whether it is a reasonable burden or whether it may in application prove unduly demanding in financial terms. If the burden is too heavy for the organisations to bear, the enactment of this Bill may prove destructive to sporting activities in this country. I should like to raise a number of specific points, and I hope that the noble Viscount, Lord Colville of Culross, will be able to deal with them, since what he has to say will undoubtedly influence the Amendments which we may table as the Bill goes through its stages. My Lords, may we be told why in Clause 1 the method of empowering the Secretary of State to designate sports stadia should require to be certified, rather than that the system be adopted, which, as I understand it, was proposed by the noble and learned Lord, Lord Wheatley, of categorising all sports stadia which should be licensed under a phasing system?
I note that paragraph 51 category 4 of the Wheatley Report contemplates that grounds with a capacity of less than 10,000 should at some stage come into any proposed licensing system, whereas the Bill does not extend that far down in numbers of persons. Indeed, the noble Viscount confirmed the limitation of the Bill in that respect. I think it would be interesting to hear a little more about
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why a longer view is not taken. I should like to know whether it is not desirable that the Secretary of State should take power to designate any sports stadia having structural accommodation, such as stands for spectators, even where the capacity is below 10,000. I ask this on the presumption that otherwise under the Bill there would be no case for designation, unless such a case were made out.
I come now, my Lords, to the matter of fees. Clause 12 empowers the Secretary of State, by regulation, to prescribe the fees to be charged for safety certificates issued by local authorities; or alternatively, that the regulations may, instead of specifying the amount of any fee, authorise a local authority to determine the amount, subject to limits as may be prescribed by the regulations. It seems to me that the latter course would be preferable, and I think I am right in saying that it would follow what is contained in Clause 34 and Schedule 2 of the new Local Government Bill which we shall soon be considering. If that were the case, we could ensure that there would be flexibility regarding the amount of the fee according to circumstances, subject to the prescription from time to time by the Secretary of State of a maximum figure. I note that the Explanatory and Financial Memorandum states:
"The cost to the local authorities as a whole is estimated at £900,000 for the initial application of the scheme. The length of time this will take cannot be determined in advance, but thereafter the total annual costs are not expected to exceed £30,000."
Further, I note that the "estimates represent, for the local authorities as a whole, 16 staff". I am wondering how these figures were arrived at, both in respect of finance and also the number of people who will need to be engaged at local authority level. I wonder whether it is possible for us to be told what the cost might have been if the Wheatley Report had been implemented in full, and what the effect might have been on staffing at local authority level.
The business of licensing is to be the responsibility in Greater London of the Greater London Council, and outside London of the county councils, whereas in the same clause it is stated that the building authority in an outer London borough is the council of the borough

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and elsewhere in Greater London the Greater London Council; and in England and Wales outside Greater London, the district council. The appropriate responsibilities are set out, so far as Scotland is concerned, in Clause 16. It would be helpful, I think, to many outside if an explanation could be given how to find the division of responsibility. I appreciate that the Fire and Police control come under county councils, and building control under district councils, but I cannot help feeling that there was a great deal more to be said than most of us realised for the recommendations of the Maud Committee for the setting up of unitary authorities, because certainly that would have avoided such a division of responsibilities as is now included in the Bill. County councils seem to be very happy with the role allocated to them, but I must say—and this is why I am asking the question—that the district councils, the A.M.C. particularly, as building authorities, feel that they ought to be given the whole responsibility.
My Lords, may I raise the matter of safety standards. As it is, there are no detailed safety requirements laid down in the Bill, but as the noble Viscount told us, local authorities are to be guided by a non-statutory code of practice. I venture to suggest that this could result in a variation of standards. I wonder whether, perhaps with advantage, a Schedule might be added to the Bill to ensure, at least, minimal standards. In any case, the code of practice will go beyond the Football Association. It will extend to the game of Rugby, as the noble Viscount has said; and indeed, as I understood him to seek to make clear, it will include racing. I take it that it would also include—
VISCOUNT COLVILLE OF CULROSS: Could.
LORD GARNSWORTHY: —cricket, tennis tournaments, and a very wide range. But whether the matter is dealt with by a code of practice, or otherwise, there is, I suggest, a strong case for consultation with the appropriate governing bodies of sport, be it soccer, Rugby or any of the others. The noble Viscount has indicated that the international aspect of affairs will be borne in mind, and there is need there also, I think, for consultation. It might
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be as well if we made provision in the Bill for that.
I have said that the Bill has received generally a warm welcome, and referred to the universal wish to ensure the safety of our sports grounds and sporting events. But, my Lords, goodwill is not enough. I doubt whether anyone seeks to impose burdens on sport which it cannot possibly carry; and yet this Bill shows no concern about—and as I understood the noble Viscount when he was speaking, it is intended to make no provision at all for —the cost of actually carrying out the work on the grounds. It is quite unconcerned as to how the cost is going to be met. It reads—and it would appear from the manner in which the noble Viscount spoke—as though all the clubs affected can find the money without any real difficulty.
I venture to suggest that no one with much knowledge of the position feels that this is so. Indeed. I am advised by those who speak, I think, with some authority for sporting organisations, that the costs of implementing this Bill will go far beyond the means of many governing bodies of sport. I therefore ask: are the Government really determined to make no arrangements? Because if they are, then they are going to run into opposition. If they succeed in carrying this Bill through and it becomes an Act, it will have a devastating effect so far as many sporting activities are concerned. Therefore, I was very disappointed, and I think the disappointment will extend far beyond this Chamber, that the noble Viscount confirmed, as I thought very clearly, the impression that is abroad that the answer to the question about what help the Government tends to give is "None".
My Lords, that is a pretty frightful and pretty frightening discouragement for those in charge of sport in this country. For many of them it could be the end of play as it is. We must give some considerable attention to this issue. As it is, the Government draw considerable income from sport by way of V.A.T. and betting duty imposed—the latter on football pools. I do not know how far wrong I am in the estimate that I am going to suggest about what the Government draw from V.A.T., but am I very far wrong if I say not less than 10 per cent. and perhaps as much as 11 per cent. of their income? In any case, I think we

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are entitled to know what the figure is. I do not ask the House to accept the estimate. I ask the Minister, when he replies, to give us the figures as to what the Government get by way of V.A.T. from football and the other organisations concerned.
VISCOUNT COLVILLE OF CULROSS: My Lords, I do not know whether I can do that to-day. I do not have the figures with me. But if the noble Lord wants the figures, could he tell me precisely what organisations he wishes them for, so that I can give him an adequate answer?
LORD GARNSWORTHY: My Lords, I wonder whether I can say: "the organisations that will be affected by this Bill". The noble Lord has agreed that soccer, rugby, cricket and tennis will be affected—
VISCOUNT COLVILLE OF CULROSS: Could.
LORD GARNSWORTHY: That is an important matter: could be or would be? I have to ask: do the Government appreciate the full extent of this Bill when it becomes an Act? Do they know in detail the organisations that will be affected? Because if they do, I think they ought to be able to give us the information I have requested. I accept that it is not reasonable to ask the noble Viscount to give us this information off the cuff, but we shall be going through Committee; and since this is a matter of great importance it is one that I think will have to be returned to time and time again. There are those of us who say, "The Government must recognise the need for help", and it will not be enough for us to be told, "Well, it does not matter what you say. Nothing will be given". The House is entitled to know what the Government are receiving so that the House can determine, before the Bill leaves Committee stage and before it leaves this House, whether it is reasonable that it should go forward without some provision for helping these sporting organisations.
I think it very necessary that there should be some provision to enable grants to be made to clubs that cannot possibly afford to meet the cost of what they will
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be required to do, and/or loans at very low interest rates, but only in those cases where a club can show financial need. I recognise that there would need to be —I hope "will be" is the more appropriate way of putting it—some control from central Government as to the total amount—that is accepted right away—of the amounts that may be made available for individual clubs, having regard to their circumstances. May I suggest that this is a field where with great advantage there may be close consultation with those who speak for the sporting organisations. The Government must surely recognise the consequences that will follow this Bill unless they help financially in the improvements that will be called for. We are all agreed that the safety of spectators must be an overriding concern, but we do want the game to go oil. We wish sport to flourish. Even if we cannot accept that those who will the end should will the means, surely we ought to ensure that the means are available so that the ends—in this case the ends of this Bill—may be achieved. In other words, we must provide some practical help.
My Lords, there is no doubting the reaction of many of our sporting organisations on this matter. They are quite certain that the Bill imposes a financial burden which is unacceptable and far too great for many of them to carry. In adition to what I have said as to grant and/or loan provision, it has been suggested to me—and I put the idea forward because I think it is one that is worthy of consideration—that some thought should be given to further alleviation of the position by including all sports buildings within the industrial buildings allowance, and thereby qualifying appropriate organisations for tax concessions which would help in the more rapid achievement of safety measures. Again. I am not thinking that we may get a "Yes" or "No" on that issue to-night, but it is something that we may well return to, and I hope that in the meantime the Government will give some consideration to My Lords, for what it sets out to do, let me repeat, in conclusion, that we welcome this Bill. As I have indicated, we shall try to improve it in Committee so that it may more speedily and more satisfactorily achieve its purpose.
5.3 p.m.
VISCOUNT SIMON: My Lords, I think everyone who recalls the Ibrox Park disaster and who has read the Report of the noble and learned Lord, Lord Wheatley, must agree that Government and Parliament could not at this stage stand still and do nothing. To my mind, the scheme put forward in this Bill seems, broadly, entirely reasonable. It has been said that attendances at football matches have been dwindling in the last year or two, and that consequently the risks are not as great as they were. As against that, I am afraid it also has to be admitted that there are signs of an increase in the incidence of hooliganism, which can so often be the detonator that sparks off an explosive situation. We hope that this latter tendency will in due course be reversed, and we hope that the attendances will increase, but we have to look further ahead than to just to-day and next year. I should have thought that it was entirely reasonable now to bring forward a Bill to regulate safety of sports grounds. Indeed, if there are any noble Lords who know less about football than I do, they will be as surprised as I was to find that there has not been any regulation up to now.
I was interested in the explanation given by the noble Viscount, Lord Colville, about the flexibility which it is proposed to introduce into this system of certification. As I understand it, the local authorities are to be guided by this document, but they are to use their common sense: and I suppose if they found that in a particular stadium the doors were a few millimetres too narrow, they would not immediately insist on their being rebuilt. What I hope is that these guide lines will be constantly under scrutiny, perhaps by a standing committee of representatives of the sports concerned, in consultation with the Government, because, in the light of experience it may well be found that points have been overlooked which could be remedied. I had an instance brought to my notice the other day when two spectators—they were young boys—were quite seriously injured by being pressed against the crush barriers. It is quite natural for boys to be very keen to try to get in front, and no doubt their elders help them, so that they can see properly.
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But then the pressure comes, and in the two cases that I heard of the two boys were quite seriously injured as a result of pressure against the barriers. It occurred to me to wonder whether, for example, the barriers should not have some protective padding on them. That is the sort of thing that might be looked at when the Green Book is kept under review.
My Lords, there are two other points that I want to raise (I do not want to speak at length, because there is important business to follow), and the first is in relation to the special certificates. I confess that I did not understand from the Bill, or even from the noble Viscount's exposition, what was the purpose of special certificates. If a ground is certified as satisfactorily safe to allow 25,000 people to watch a football match, is it not equally safe for 25,000 people to watch an athletic competition, or perhaps to engage in community hymn singing or to attend a trade union mass rally? The noble Viscount shakes his head, and no doubt we shall hear in due course why that is not so. I should have thought that there was not a great difference, although perhaps the movements of the audience are not entirely the same.
VISCOUNT COLVILLE OF CULROSS: My Lords, perhaps I can give the noble Viscount an instance. Supposing you had some activity which allowed spectators out on to the pitch, extra entrance and exist provisions would be required over and above those at a normal football match when the spectators are behind the barriers which keep them away from the touchline. It is that sort of thing that one would need to take into account.
VISCOUNT SIMON: I am obliged to the noble Viscount. I had not actually envisaged sports in which the spectators were allowed on the pitch.
VISCOUNT COLVILLE OF CULROSS: Hymn singing, or something like that.
VISCOUNT SIMON: Could they not hymn sing from their scats? But I will leave that there. There is a further point to which I would invite attention, and that is the time factor. I was thinking particularly of my last example, because I know that in recent years the West Ham Stadium was used from time to

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time for mass meetings of London dockers. These mass meetings are arranged at short notice, probably not more than two or three days before, and it is difficult to see how a special certificate could be obtained from the local authority in that time. The local authority has its meetings at monthly intervals: and whether the local authority would be permitted to delegate its responsibility to someone else, I do not know. I think they have to obtain powers to do that, and possibly powers of that kind should be written into the Bill. I thought that perhaps one of the reasons for the special certificates was to find a responsible person to ensure that the terms and conditions of the certificate were carried out. If I may offer a suggestion, would it not be quite reasonable for the principal licensee, if I may so call him, to be responsible for anybody to whom he sub-let the stadium and for the holder of the original general certificate to be responsible for the terms and conditions being maintained?
I should like to say a word about appeals. The noble Viscount explained, not at great length, why he felt that the recommendation of the noble and learned Lord, Lord Wheatley, should not be accepted and that the appeal should be made to the Secretary of State, or to the Secretaries of State. I must confess that I much prefer Wheatley. It seems to me that there are two objections to an appeal to the Secretary of State. The first is that, from the Secretary of State's own point of view, I should have thought it was desirable to limit the number of issues in regard to which he can be called upon to exercise a quasi-judicial function. For instance, in planning we find that the Government are often unable to express a view at a critical stage because the Secretary of State or the Minister may at a later stage have to exercise a judicial function. From that point of view, I should have thought it would be preferable for the Secretary of State to be out of the picture. The other objection is perhaps even more compelling. I think that we all want to see—and certainly those of us on these Benches—local government made effective and meaningful. Of course, if the county councils are the certifying authority they may sometimes make mistakes and may have to be overruled.
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Would it not help the relations between the Central Government and the county councils if the county councils were to be overruled not by the Secretary of State but by an independent tribunal? The noble Viscount said that he did not want to see a multiplicity of independent tribunals. I understand that. However, I believe that this tribunal might be on a part-time basis, because I would expect that there would not be a great many appeals to deal with. No doubt the Secretary of State himself would have to collect a panel of people to advise him on appeals, so I should not have thought that there would be a great deal of difference between one system and the other. However, for the reason I have already stated, I certainly prefer the proposal of the noble and learned Lord, Lord Wheatley.
May I now turn to something which is not in the Bill. In paragraph 55 of the Wheatley Report attention was called to the fact that even in senior football the normal attendances at grounds in the lower leagues are such that defects in layout and structure represent no real danger because of the limited number of people attending. This seems to me to bring up a point which has not been fully appreciated in the drafting of the Bill; that is, that the risks against which we are guarding (and happily they are very small) relate not lust to the size of the ground or to the numbers of people, but to the numbers of people in relation to the size of the ground. Quite a small ground, if overfilled, could represent a potentially dangerous situation, whereas a large ground might have 20,000 or 30,000 people in it and be potentially perfectly safe. This, coupled with what the noble Lord, Lord Garnsworthy, was telling us about the difficulties of the small clubs from the financial point of view, led me to wonder whether there could not be, for want of a better term, what I will call a B certificate. In other words, it would be a case of "How many people can we have a certificate for if we do nothing to the ground?" I strongly suspect that that number would be more than some clubs normally get on a Saturday for a home match, and in those circumstances the club could continue on a B certificate very much as it is at present. Of course, the difficulty would arise when they throw their hats in the air, having discovered

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that they have drawn a cup tie at home with one of the giants; but this would be a case for a special certificate. Again, if they were unable to do anything to the ground, a special certificate would not allow them as large a gate as they would be able to allow in if the ground was perfect. But since this is not likely to happen to any club more than once in five years—I am sure that they would think themselves very lucky if it did—they may well decide that it is better to have a smaller gate rather than go to the full extent of meeting the complete Green Paper conditions. I know that a great deal of consultation will be needed before the Bill finally leaves another place, and I should like to ask the noble Viscount whether he would consider the case for the provision of something like the special B certificate that I have mentioned.
Now, my Lords, we have the question of who pays. Here I find myself rather in disagreement with the noble Lord, Lord Garnsworthy. After all, the clubs themselves (or whoever is the owner of the ground) to-day have complete responsibility for the safety of people attending football matches. I will not say that they have neglected the responsibility, but perhaps they have not realised its full extent. The result of course is that a big bill has built up. But I cannot see on what grounds they could now come and say, "The Government are imposing this requirement and so they ought to help with the cost"—because the Bill is doing no more than to make statutory what is already a common law liability. It is quite true, as the noble Lord, Lord Garnsworthy, said, that the noble and learned Lord, Lord Wheatley, did not feel able to give an answer on this point, because he felt it to be outside his terms of reference. But lie did say that if the Government did not pay the money would have to be found within football. He also said that it appeared to him that there was a substantial amount of money in football which could be drawn on.
He went on to say—and this troubled me a little—that it would be not only presumptuous but wrong for him to suggest how it should be done. I am going to be a little presumptuous and stick my neck out by calling attention to some of the more obvious bits of money that there are in football. We read constantly, especially at this time
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of the year, about the large transfer fees which are paid in accordance with this curious relic of slavery that is apparently still legal in this country. I believe that a very small percentage of, or a levy on, transfer fees would soon build up a big fund which could be used for this purpose.
If we look at the pools, I venture to suggest that even in these days of inflation a quarter of a million pounds, free of tax, is about enough for anybody to get, whether by skill or by good fortune, for picking eight draws. Yet one of the pools companies is advertising that they have just paid their eighth person over half a million. if the top prize were to be limited to a quarter of a million, that would give £2 million already which could be creamed off for the purpose of helping clubs in need. I do not believe it would affect the investment, as I think it is called, of anybody in the pools if the top prize were a quarter of a million instead of something in the region of £600,000. It seems to me that these are two ways in which what is called the football world could help. The problem here is rather the same, if one may draw a comparison, as the problem of the country as a whole: there is plenty of money, but it is a maldistributed. I think the football authorities ought to consider whether some help could be given by the people who have the money to those who have less money. My Lords, I am sorry if I have stuck my neck out and been presumptuous, in the phrase of the noble and learned Lord, Lord Wheatley, but it is worth pointing out that there is a great deal of money about, and I do not see why the football authorities, if they really got together, could not find some means of helping those clubs which need help. But if the noble Viscount would also consider this point about the B certificate it might be that the total amount required could be substantially less than would otherwise be the case.
5.20 p.m.
LORD WESTWOOD: My Lords, may I say at the outset that I have a personal interest in this Bill as I am chairman of a well-known First Division Football League club in the North East of England. I am a member of the Football League Management Committee, which controls 92 professional League

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clubs, and I am a councillor of the Football Association, which is the governing body of football in England and has 36,000 football clubs under its control. I think I can claim therefore that I know something about Association Football. And I want to make it quite clear at the outset that the football authorities are not against the licensing of sports stadia as it is of paramount importance that the safety of the public should be safeguarded at all times. I have been associated with the cinema and theatre business for over 40 years, and both of these types of entertainment have been subject to licensing for many years, and with excellent effect. I fully agree with the noble and learned Lord, Lord Wheatley, when he states in his 1972 Report that if the public pay for admission to the ground, then it is up to the club, whether it be a football club, a cricket club or a rugby club, to ensure that the ground is safe.
The noble and learned Lord, Lord Wheatley, in paragraph 38 of his Report, also stated and I quote his words:
"I am satisfied that any solution can only work satisfactorily if those operating it do so in an understanding and reasonable manner and not in a rigid and highly technical way."
As it is the intention in the Bill to grant powers to the local authorities which will be issuing the necessary safety licences. I trust that there will be some uniformity of standards, as it is common knowledge that decisions vary a great deal between local authorities. I can quote an example of which your Lordships will be aware, the licensing of films, where one authority passes a film for exhibition while the neighbouring authority bans it. The same applies to liquor licensing laws. I hope that the Minister will be able to give me some assurance on this important point.
On the question of an appeal against a decision of the local licensing authority, Clause 6 of the Bill states that an applicant for a licence may appeal to the Secretary of State, and in subsection (7) it is proposed that before determining an appeal the Minister shall appoint a person to hear such an appeal. In his Report the noble and learned Lord, Lord Wheatley, gives it as his considered opinion that any appeal should not be heard by a court of law or by a Minister
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of the Crown, and he recommended the setting up of a special appeal tribunal, consisting of a legally qualified chairman, an architect, a surveyor or an engineer, and a police officer with experience of crowd control. If I had to make an appeal against a decision of the local authority I would be far happier to do so before a body like that than I would be appearing before a person appointed by the Secretary of State. Surely the Minister is not going to saddle one person to make a vital decision or a recommendation which could result in the closing of a sports ground.
Many of your Lordships will remember the amazing scenes at Wembley Stadium in 1923 when over 200,000 people got into the ground. Happily, on that occasion there was no loss of life, and ever since then all Cup Finals at Wembley have been all-ticket games. As your Lordships have heard, in 1946 there was an incident at the Bolton Wanderers' ground, resulting in the loss of 33 lives. In January, 1971, the Ibrox disaster took place, when 66 people lost their lives and many others were injured. When one takes into account the number of spectators who watch sport at the week-ends it is remarkable that there have not been more incidents such as happened at Bolton and Glasgow. During the past ten years of Football League matches in England, the total number of paying spectators was 283,719,725, an average of over 28 million per season. That is in England alone. These figures do not include Cup Ties and Cup Finals, which are usually well patronised, as your Lordships who have tried to obtain a Cup Final ticket at the proper price will know only too well.
The most important matter which is at the foundation of the implementation of this Bill is, as your Lordships have heard, the question of finance. As I have said, the clubs will be only too willing to carry out necessary recommendations imposed by the licensing authorities, but most of them do not have the money to do so. Out of the 92 professional Footbal League Clubs in England there are only 8, or perhaps 10, clubs which make a profit. The remainder struggle along with schemes to raise money outside the admission monies, and in many cases the directors of these clubs put their hands

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into their own pockets, or guarantee overdrafts, to keep their clubs going. In Scotland, the position is even worse, with smaller gates; and most of the teams there exist by transferring their players to other larger clubs.
This brings me to the question of transfer fees, to which the noble Viscount, Lord Simon, referred. I have heard many arguments about the huge sums which change hands when the registration of a player is made to another club. If I did not know football as I know it I would have thought there was a lot of money in it. But it should not be forgotten that the money—and I am chairman of a club which has paid great transfer fees—goes to another smaller club and enables that smaller club to continue in business. It does not go outside of football. It should be borne in mind that the reason my club paid big fees was to avoid paying tax at the end of the season. I would rather have a football player than a slip of paper from the Inland Revenue. Without that system, and without clubs' organising fundraising schemes, there is no doubt whatsoever that many clubs would have to close down—make no mistake about it, my Lords!
It is important that every endeavour should be made to keep all clubs in existence; and, with all due respect to rugby football and cricket, it cannot be denied that "soccer", as it is sometimes known, is our national sport. Apart from the many millions who watch it on television, it attracts the greatest number of spectators to the sports grounds throughout the country. It may be of interest for your Lordships to know that the estimated number of people who watch "Match of the Day" on Saturday nights is 10 million. That gives your Lordships some idea of the importance of this game.
Many football clubs are the lifeblood of a town. Look what happened to Hereford United when they gained admission to the Football League two years ago. It created great interest and enthusiasm in that part of the country and still does. I should imagine that there were many people throughout the world who did not know where Sunderland was until that team won the F.A. Cup last May—and as a result the production in factories, shipyards and coalmines in that area went up by leaps and bounds.
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The Government in 1966 set up a special committee under the chairmanship of Norman Chester the Warden of Nuffield College, Oxford, to report on football, and among many of their recommendations that committee suggested that there should be a similar levy to that which applies to racecourses and which I understand brings into racing a figure of some £7 million a year. When you realise—and this also might be interesting to the noble Lord, Lord Garnsworthy, and the noble Viscount, Lord Simon—that the Government take out from football a sum of nearly £60 million a year by way of a betting tax, plus the additional burden of value added tax, and do not put one single penny into our national game, it makes one wonder just how we in football are going to implement the new legislation without some share of that money. My Lords, I hope that what I have said will be brought to the attention of the Secretary of State and that perhaps in the Committee stage of the Bill more information can be given to us to give football some hope for its future and its future existence.
5.32 p.m.
LORD ARDWICK: My Lords, I think we can all give a general welcome to this Bill. It is a reasonably modest and uncomplicated measure because the problem, although a most important one, is of limited dimensions. I was extremely glad that the noble Viscount, Lord Simon, raised the question of young people and the dangers that they may be in when they go to football matches. Indeed. I have heard many parents going around asking advice as to whether they can let their child go to a football match in safety. Yet 50 years ago in Manchester we had solved this problem. It was a much rougher age, and in those days Manchester City played on a small ground in Hyde Road, in an industrial area. There was a specially reserved boys' corner where nobody over the age of 14 was allowed to penetrate, and our parents knew that we could go to the match in safety and that the only danger in which we might be would be from hearing some rather coarse language and seeing an occasional piece of gross behaviour. I believe that there are solutions of this kind and that they should be put forward when the municipalities give their advice to the football clubs.

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I should have thought there was a case for developing the family visit to the football match, perhaps having special enclosures where families might go together and where no single men would be admitted. The only place I have seen where due regard is paid to the family and where an attempt is made to attract the family is at Goodwood on, I think it is called, the Trundle, which is on top of a hillside where there is the most remarkable provision. It seems to me that a great deal of the future of football lies in providing more comfortable and civilised amenities. I was talking to an American at luncheon and he told me that he thinks the reason why there is so little violence, so little hooliganism, in the area of an American sports ground in a very violent country is the fact that seats are provided for everybody. So I look forward to this development of the family witnessing sport together and provision being made by the football clubs for it. This could be done on a much bigger scale if football decided to have its close season during the three worst months of the year instead of during the three best months. In this country I do not think it is ever too hot to play football, but it is often too cold to watch it.
I am less enthusiastic than my noble friend about Government grants. I would gladly accept them if they were to be offered, but I felt that when the Football League was asking the other day for a £1 million subsidy it was knocking on the wrong door, in the wrong week, and probably in the wrong year. The problem is what is going to be done to help the football clubs? I can think of three ways: one is a communal effort by which money is raised locally for the safety and development of the ground. I should not have thought that that was impossible: some kind of voluntary effort could be made. Then I should have thought that those people who sponsored competitions for football might like to sponsor safety. They might like to sponsor a particular stand or a section of a stand. Thirdly, since our football clubs are so much a part of the community I wonder whether the municipalities could not be given powers to lend money to a football club to carry out the improvements which a particular municipality itself has required under the Act. I do not think it is a
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question of giving them interest-free loans, or even low-interest loans, which are only another way of giving a subsidy. I think that the clubs could take on a loan if it was understood that the amortisation of that loan was to be over a sufficiently lengthy period and there were to be waivers during bad seasons.
5.37 p.m.
THE EARL OF KINNOULL: My Lords, I should like to welcome the Bill and say how good it was to hear the weighty expertise of my noble friend Lord Westwood who clearly has enriched the debate. I should also like to congratulate the Government on the samewhat lightning speed with which they have acted on the recommendations of Lord Wheatley's Report. Whether it is the influence of a young dynamic Minister in the guise of my noble friend or whether it is on the part of active footballers in the Home Office, or whether it is because Wheatley was so comprehensive and thorough I do not know, but with deference to my noble friend I suspect it was the latter reason.
My Lords, there are two aspects on which I should like to touch: the first is the non-statutory technical code and the second is the reaction of the football authorities to which the noble Lord, Lord Garnsworthy, made particular reference, and the state of football finance. On the technical code, the House will recall that over half of Wheatley's Report was devoted to the drawing up of a code of standards. It was indeed a pioneering code by the Wheatley sub-committee and clearly acted as a catalyst to this Bill. I was glad to hear from my noble friend that. since the Wheatley Report consultations have been going on between the Home Office and the football authorities and now we have published the code to be adopted.
There are two questions which I should like to ask my noble friend on this code. May I say that I very much welcome it as a non-statutory code, but first, may I ask whether the football authorities agreed to this code or whether there was some air of disagreement which in the end the Home Office had to overcome? Secondly, now that we have a code of standards, is it known just how many of the 44 clubs that will initially come under the umbrella of the Bill will be seriously affected?

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The local authorities' task in administering this Bill is clearly a considerable responsibility and again I would say that I very much welcome the remarks of another noble Lord regarding the flexibility which the Government have given to local authorities. It will be interesting to know—perhaps my noble friend could tell us later—how the local authorities viewed their new responsibilities when they were consulted. Were they happy that they had sufficient qualified staff available? I was going to raise the point of appeals, but I would simply say at this stage that I support both the noble Viscount, Lord Simon, and my noble friend Lord Westwood. I hope we can perhaps discuss this matter in the Committee stage.
To turn to football finance and the case for Government assistance, I find myself in sympathy with certain parts of the football authorities' case, but increasingly confused with some of the other parts. Where I feel there is a good case for Government intervention, as other noble Lords have said, is of course with V.A.T. V.A.T. as an entertainment tax has, I believe, no merit at all, and besides adding an unnecessary cost to living standards it may have a savage effect on the scope of entertainment. The second somewhat strange case affecting the football authorities is the rather odd situation of the tax structure of football clubs on capital improvements, which for some reason are not tax deductible. This matter was raised last January to my noble friend, and indeed at that time he said that the reason why the Treasury would not amend this apparent anomaly was the very same reason that it gave at the time of the Laing Committee some twenty years ago. But what my noble friend's brief did not say, or did not extend to at that time, was precisely what the reason was. I hope my noble friend can enlighten us tonight—perhaps, better still, say that the matter is again receiving attention and sympathetic consideration.
I would particularly stress this point as I know cases of Scottish clubs who perhaps part with a player to some rich club down South, and for the reason of this tax anomaly, they cannot gain a tax benefit from this money on certain of the ground improvements.
VISCOUNT SIMON: My Lords, would the noble Earl give way for a moment? I am interested in this matter because I remember that the noble Lord, Lord 13eswick, made a great point about it in the last debate. When the noble Earl speaks about its being an anomaly, is it not the usual practice of taxation that capital additions are not liable as a charge against revenue?
LORD LYELL: My Lords, if I may intervene, if it is in order, I was given instructions earlier this week. I should not like to state that this is categorically the law, but as a result of the 1972 Budget I am given to understand that football clubs are now, subsequent to the passage of the 1972 Finance Act, allowed to deduct in one year expenditure on ground improvements and I think probably this would cover crowd safety and improvements to safety in stadia. This statement is the result of an "off-the-cuff" conversation with a leading tax expert in Scotland, but perhaps I could gain further confirmation of this later from my noble colleague the Minister.
THE EARL OF KINNOULL: My Lords, I am grateful for both interventions. My noble friend is a qualified chartered accountant, and I think he is perhaps on to the point. But I think I am right in saying that under farm improvements certain capital improvements can be deducted against income on the year.
The remaining part of the case for football's declining finances I find somewhat confusing, for there is I believe a vast untapped natural resource which remains at present unharnessed. I refer particularly, as the noble Viscount. Lord Simon, did, to the football pools' income. It stands at the rate at the moment, I think, of £200 million a year, of which we have heard from the noble Lord, Lord Westwood, £60 million goes to the Government. What does the other partner get? What do the football authorities get from the football pools promoters? They get. I am told, the amazing sum of £2 million a year—equal, in other words, to 1 per cent. of the gross income. or equal, in other words, to four first dividends offered by some of the pools promoters. For the partner who owns the copyright of what the football pools print, it seems an exceeding poor return and a somewhat amazing deal.

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Nobody would dispute that football to-day is very big business, yet what appears to be happening is that, instead of concentrating on some of the natural resources available from football—football pools and broadcasting rights—the football authorities appear bent on a policy of increasing the club fixtures, presumably to swell the income, with the result that players become fatigued, the entertainment value drops, and our international reputation suffers. Lord Wheatley in his Report said this of football finances:
"The football authorities may have to take a long hard look at their finances and rules to sec whether changes are required to circulate the money in football to the better advantage."
If these are sound words, as I believe they are, how much more healthy it would be for football if they could optimise their finances and stand on their own feet, rather than have to come cap in hand to the Government—which I believe would not be healthy for their future.
5.46 p.m.
LORD LYELL: My Lords, I am sure we are all grateful for the intervention and powerful information we have received from the noble Lord, Lord Westwood, this afternoon. I believe he made a powerful case for the football clubs and pointed out that all is not quite as healthy as one might believe from reading in the football Press the financial deals that go on. While I intend to devote the main part of my comments to Association Football grounds, we must remember that we are considering safety at sports grounds. It was not only, as we heard from the noble Lord, Lord Garnsworthy, that disasters happened in Roman times and not much attention was paid to safety there. Sport and competitive activities have continued right through 20 centuries, and in the 20th century sport, with the increasing ease of communications, provides several opportunities for huge crowds to gather all over the world with a great deal of ease.
There is also one other interesting aspect which has not yet been raised. It is the psychological aspect, in that when people go to watch or observe sporting activities there is possibly an element of identifying themselves with performers in the arena or on the pitch, as the case may be. Secondly, there is
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a gentle hint that this is a substitute for warfare. I know that this aspect has been brought out in considerable detail on the Continent, particularly in Italy. I think the psychological aspect is also related to the rather odd feeling of herd instinct. When you join in a large crowd of 40,000 on the terrace at one of the more populated Football League grounds you do not go to behave or experience the same emotions as you would at a symphony concert. You go along to wave banners, probably; to beat drums, blow bugles, sing, chant and shout, and generally, if one can put it delicately, "let off steam", to enjoy yourself—with, one hopes, the minimum of violence. But this does not happen only at Association Football grounds; it happens also, as we have seen during the summer, at various cricket grounds in London. Lords, the Oval, Old Trafford—all experienced the joie de vivre of our West Indian cricketing friends, who did not always obey the implicit rules of cricket games, and often invaded the pitch. But I do not think this was in any way dangerous, and I just wonder whether the time has yet come when we should include cricket grounds in sports safety legislation. At Wimbledon one has similar crowds and possibly similar risks but there the passion is somewhat more suppressed. And I understand that Ascot, Epsom, and Aintree qualify as sports stadia for the purposes of the Bill.
VISCOUNT COLVILLE OF CULROSS: My Lords, they are sports grounds.
LORD LYELL: My Lords, I stand corrected. Nevertheless, I think the risk there is considerably less, in that people go possibly to watch the horses, although prebably more with the possibility of financial transactions taking place. However, I can clearly remember seeing one exceedingly ugly incident at Newbury one winter's day when large sections of the spectators, and possibly disgruntled punters, made a very sharp demonstration against one of the winning horses, though I understand that order was restored fairly quickly.
Also, one finds large gatherings at Twickenham, Cardiff Arms Park and Murrayfield, which are the three largest Rugby Union international grounds, and these are all covered under Section 1 of the relevant Wheatley Report. But with

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regard to risks to the public arising from gatherings at sports stadia I think it cannot be denied that the main risk occurs between August and May, during the Association football season, when huge crowds gather around the country, from Newcastle and Carlisle down to Plymouth, and in Scotland from Aberdeen to Dumfries. As I have pointed out, communications are already quite easy and are getting easier arid there are increasing opportunities for these crowds to gather all round the country very quickly. Many supporters feel that it is worth while because they get a great deal of enjoyment in following their team to some, if not all, of the "away" games. Unfortunately, this brings with it a greater or a lesser risk of disorder and even violence in the towns and cities as rivalry and other psychological factors already mentioned build up to a peak on the way to the football stadium. Once the spectators have reached the football stadium, have paid their money and gone through the turnstiles there are fewer opportunities to run riot, to behave in a violent manner and create disturbances; but at the same time I believe that crowd behaviour is the greatest single and identifiable factor in crowd safety at these places. I think my noble friends would agree with me that there is an infinitesimal risk to the public in concert halls and churches and yet, extraordinarily, regulations for such gatherings are far stricter than those for sports grounds, at least until the arrival of the green-backed code that we have seen to-day.
I think at the same time we must congratulate the Government on their keenness to promote safety among spectators and also on the amount of good sense contained in the Bill. A few stadium managers and club secretaries have wondered how the various local authorities will interpret their roles as guardians of public safety, and there seems to be a need for a simple code of practice or handbook so that the owners of a stadium know precisely what are the powers of the police, the fire authorities, the building and public health bodies. Apart from this possible defect the Bill fulfils a desire felt by many people that safety among large crowds at sports gatherings is of the highest importance. The handbook published today goes a long way, if not all
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the way, to lay down such a code of practice as many people feel is necessary.
It is certainly a paradox that among the Association Football clubs that I have spoken to in the last week—I should think about 20–the cry has been one of absolute despair that not enough spectators come to watch the games and that football in Britain is in doubtful financial health. I am referring to financial health; so far as playing health is concerned I am not really eligible to speak. I think perhaps the international reputation of England may seem to be at a low ebb at the moment, whereas that of Scotland has received a useful boost in recent months. At first sight this would appear to be the case for the huge majority of professional league clubs in Britain, but after several inquiries I have found that the sickness is spreading to the richest and best supported clubs in the land. In many cases professional football cannot really exist in its present form, as we have heard from my noble friend Lord Westwood, on the takings at the turnstiles. Financial support comes in several forms, either from wealthy individuals as directors or from supporters' social clubs and raffles, or from selling players to richer and more successful clubs. When, however, these dozen (approximately) rich and powerful clubs struggle to pay their players and staff, as well as the overheads, we must think that madness has overcome, or is about to overcome, the league clubs in England and in Scotland. But for two reasons I do not necessarily believe this to be true. First, players' talents can vanish overnight. Recently two of the most skilful and able young players in Britain have been suddenly forced out of football at one month's notice because of knee injuries which have struck them down while in their prime. Seen thus, the large salaries paid to players during their relatively short careers do not seem too excessive.
The second reason why I think madness has not yet overtaken football is that there could be an argument that there is too much football and it is too avidly promoted by the news media, so that when success does not grow from week to week, people will not necessarily go to matches. This morning I was speaking to a representative of one club which has recently spent £400,000 on a new stand. I was not absolutely aware of the number of spectators who could

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be seated in this particular stand, but at present the capacity of this club ground is 62,500, as agreed between the club and the police and the local authority, so that there is the maximum amount of safety for the spectators conducive to reasonable viewing, and also so that the club can maximise its receipts. Of these 62,500 spectators 25,000 can see the games from seats. But, sadly, I think people do not necessarily go to a football stadium just to look at the grass growing or to watch snails racing, and in order to fill up this stadium (or any other stadium) there must be a great deal of success from the playing angle. To achieve this one might be lucky and rear one's own players, or it might be necessary to go out and to buy young and fairly able players; and to achieve this purpose the dozen richest clubs have a fairly intricate system of scouting to seek out either young players or, alternatively, talent in the junior schools football.
In connection with this financial aspect I spoke to one other club in the North of England which over the past three seasons has attracted over 1 million spectators to its home matches, which is an average of about 48,000 persons to each game. They play a minimum of 21 games in the Football League and will probably play three or four more in cup ties, and if they are lucky and successful they probably will play a few games in European competitions which should, one hopes. provide a gate of 48,000 to 50,000 which will provide additional revenue. But this season of 1973–74 has seen a drop in the number of spectators for this one club of approximately 10 per cent. and the club, which must be one of the best supported clubs, not just in England or in Scotland but in the world, last year took over £800,000 at the turnstiles. I think they played about 50 games altogether, including about 30 at their own stadium, and they pointed out somewhat humbly to me that their attendances are falling off by 10 per cent. already and they think they will fall away further because they are not so successful as they would wish to be. As of this morning they are second or third in the Football League table, which is half way through the season. It is in such cases that we
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can see that the financial position of professional football in Britain is not too healthy. When the top 5 per cent. of the clubs are struggling, there is not a lot of hope for the remaining 95 per cent. Exceptions can be and are found where clubs are not bedevilled by high salaries for the players, and where additional sources of income can be found to be fruitful Thirdly, professional football is not always healthy in financial terms, and the majority of clubs are not able to afford huge sums for ground improvements even for the minimum safety requirements as laid down in the Bill.
I foresee difficulties in granting special licences for sports grounds when, as we have heard from the noble Viscount, Lord Simon, a First Division football club plays a Cup match in a small town, and the main ground facilities are normally adequate for a crowd of, say, 2,000, 3,000 or 4,000 spectators. When a visiting club brings 10,000 spectators by train, bus, car, cycle, or even aeroplane, there is a huge risk that the stairways, gates, turnstiles, terraces and peripheral installations around the ground may not be sufficient to cope with some extraordinary or violent behaviour. This risk hangs over these smaller clubs. Should an accident occur, as at Ibrox in 1971, due to crowd behaviour, there would be a public outcry—and rightly so. We and our colleagues in another place could be seen to have failed the public in that we failed to provide adequate steps for their protection at such events. I think also there would be displeasure in the Government when taxpayers' money was demanded for such ground improvements, especially when sports stadia are in general used for only about three or possibly six hours during the week, and when the stadium is normally less than half full, or two-thirds full during those six hours. Paragraph 60 of the Wheatley Report refers to this problem of trying to finance professional football on its present scale from half-full stadia. There can be no doubt that the main risk to crowd safety is found among the best supported clubs in England and Scotland.
Sir Maurice Lang in his admirable Report in 1969 Crowd Behaviour believed that one major factor which aids good behaviour and crowd control is the provision of maximum possible seating accommodation. From a personal

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angle I would agree, since it is very difficult to indulge in violent conduct or to get involved in a fight when there is a risk of detection and consequent ejection from the ground, and where there is also the strong possibility of painfully barked shins on the steps or seat frames. I have been looking at paragraph 65 of the Wheatley Report which refers to the differences in drinking habits around the country. I must add that these drinking habits cause a certain amount of the trouble that one hears about and reads about in the Press. It was the behaviour of the crowd, and not the stadium, which caused the disaster at Ibrox in 1971, and that at Lima in 1964, which was one of the most serious disasters of modern times. At the same time, however, the stadia here in Britain must not provide unsafe facilities at any time. Therefore, I am happy to support the Bill as it stands.
6.7 p.m.
LORD WIGG: My Lords, this Bill and the Report which preceded it, indeed the events which formed its background, in my judgment are a reflection of our national life. The weaknesses are the failure to recognise the problem or to act until too late, the triumphant shutting of the stable door after the horse has escaped. Let us consider the facts. At Ibrox there was a terrible disaster. The Secretary of State, then I think Mr. Maudling, set up a committee under the chairmanship of a distinguished judge. Its terms of reference were:
"To make an independent appraisal of the effectiveness of existing arrangements for crowd safety at sports grounds in Great Britain, and of the improvements which could be brought about within the present framework of the law: and to consider the nature of any alterations in the law which appear to be needed."
They asked a lawyer to do the job. This is a lawyer's report. I have nothing but praise for Lord Wheatley. Nothing I say has any reflection on him. But Ibrox was inevitable.
Let us just consider the investigations which have been currently made. May I add that I have not talked to the chairman of any professional football club in the last week. I have not been to any of the associations. I did my homework as long ago as last May. When the Report came out in May, I was staggered
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by it. I did some homework and put it on one side until this morning. Let us consider what happened. The Football Association out of its own resources engaged a firm of construction engineers to test the strength of crash barriers at a number of Football League grounds. The barriers were tested by modes agreed with the Home Office on the basis of the Wheatley recommendations. It is no secret that many of the barriers erected at great cost are not reaching the required standard. One fairly successful Third Division club spent £20.000 on the replacement of a number of barriers, only to find on testing that they were below the standards specified in the Wheatley Report. In other words, what happened at Ibrox is most certainly going to happen again. The only reason I speak tonight is to destroy in advance the alibis of the Government when they are put forward.
My Lords, what, among other things, was the first thing that Lord Wheatley did? He went to the Treasury, the master of our destinies, and the Treasury told him something rather different from what the Minister said this afternoon. The Minister, be it noted, said in the course of his speech that Lord Wheatley had recommended that there should be no charge on public funds. Let us read from Lord Wheatley's Report, paragraph 60:
"The Government's general policy, as brought to my notice by the Treasury, is that in the private sector occupiers of premises should take whatever measures are necessary for the safety of their customers while they are on the premises and should finance such measures themselves."
As a principle that is wholeheartedly supported by those below the gangway. This is in complete conformity with the laissez-faire administration of the 19th century. The responsibility for the safety of the crowds on the ground is the responsibility of the clubs. So Lord Wheatley proceeded to write single-handed, in his spare time, this admirable Report which the Government have adopted. But noble Lords will note the dichotomy in the formulation of the policy. It is produced by the Home Office; a Home Office Minister moves the Second Reading. I have every sympathy with him. Nothing I say is critical of him. I am also sympathetic to his master, the Home Secretary, because the previous Administration, which I knew only too well, suffered from exactly the same complaint.

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I ask noble Lords to contemplate how the betting laws operate. They were generated from the thinking of the noble Lord, Lord Butler, who was conscious of two grave social problems in this country. The Conservative Government in the 1959 Election said they would legislate to deal with street offences and betting. Why? Because they were interested in football? Not at all. They were interested in a grave social problem, which is the responsibility of the Home Office. Part of the Home Office mandate happens to be safety, so the Home Office handle it. But who dictates the policy? The Treasury. The Treasury says, "Not a farthing! They have got to find it themselves". Of course the Treasury are responsible for the impoverishment of football. Let me give the figures. Lord Westwood said the Treasury took £62 million in 1971–72. but the anticipated figure for this year is £72 millions. The football pools have jumped from a turnover of £184 million in 1971–72 to a Treasury estimate of £215 million in the current year. In the name of God, how can the Treasury argue that the football clubs must pay the bill, when they put their maw in the pockets of the public through the means of the game of football to the extent of £72 million? But that again is not all the story. The largest fortune owned by any British subject, so it is reported, is a fortune of no less than £600 million, which has been earned, if that is the right word, by a gentleman who has engaged in the running of football pools since their inception.
It is only justice of course, quite apart from the question of public policy, that the Government should recognise the nature of the problem, and the problem again is a social problem. If you treat people badly, if you treat them like pigs, they will behave like pigs. A great deal of the trouble on football grounds is because the amenities on football grounds are, like the philosophy of the noble Viscount, Lord Simon, of the 19th century. Nothing has been done about it because they have no margin to play with. I entirely agree with the noble Lord, Lord Westwood, that there are not a dozen football clubs in this country who are really viable in the strict sense of the word: unless they happen to find a bright lad and can "flog" him, they
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will be in dire trouble. Here again the noble Viscount, Lord Simon, wanted to take a slice out of the transfer fees without realising that this is money that goes round and round and without it he would be applying a tourniquet.
VISCOUNT SIMON: My Lords, I am sorry to interrupt the noble Lord. Of course I did not suggest that I wanted a slice of the transfer fee. What I suggested was that the poorer clubs wanted a slice.
LORD WIGG: My Lords, the impression the noble Viscount gave me, to be perfectly frank—and I do not want to be impolite—is that he did not know much about it. He was speaking of Lord Garnsworthy and he was a little short of suggestions as to how the money should be obtained, and I got the clearest impression from the noble Viscount that he thought the football clubs in some way had sonic specific control over this money and could take a slice of it. Furthermore, I also got the impression that he thought the football clubs could take a slice out of the winnings on football pools, and I want to hasten to assure him that they cannot. Here is something I think the Home Office might look at, because they put a limit on bingo; why not a limit on football pools?
LORD LYELL: My Lords, if I may intervene, I just wonder, with all due respect. when the noble Lord, Lord Wigg, last went to a football match, either sitting in the scats or standing on the terrace, because I do not think he is being fair to the vast majority of the football league clubs in suggesting that they treat people, I think he said like pigs, and that then people will behave like pigs. I do not necessarily think this follows. Possibly he could correct me if I am mistaken.
LORD WIGG: My Lords, I must apologise for the vigour of my expression. I was brought up in the barrack room and I call a dry scrubber a dry scrubber, and I am always prepared to use it. The point is that the amenities on many of these football grounds are a long way short of what I think football clubs ought to be, as social centres. The gates should not close after the match on Saturday; they should be centres to which the young can go because it is on that ground that their heroes live. The premises should be constructed in

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such a way, as we have tried to do with some of the racecourses, that they could become meeting places. I apologise to your Lordships' House for using the expression "pigs". What I really mean to say and what I am trying to say is that the subject needs a great deal of clear thought, it needs some vigour, it certainly needs legislative backing, and at the end of the day it needs imagination in the Treasury. And, of course, there is no imagination in the Treasury, because the Treasury are not paid and do not exist to use their imaginaition on social problems. It is the job of the Home Office, but they cannot operate here because in fact they operate in watertight compartments.
The case I am making is that there is a social problem of great magnitude. It is no accident that we are losing football matches of international calibre. We are one of the few countries in Europe that have not got a national training centre. Other countries take their young talent and train them. There is one simple reason, and this I am sure would appeal to noble Lords opposite: that it is good for trade. This is tied up with international prestige. They do not care tuppence about Mr. Heath or Sir Alec Douglas-Home but they know the Charlton brothers. If we lose and get our backsides kicked in Poland this is known throughout the world, and Britain is further down the slope. Prowess in international sport as it is played to-day is a question of resources, and not only resources, because, as I say, it needs imagination, and this is singularly lacking. We produce this piffling, piddley Bill. It is over two years since the last event. I want to say that there is going to be another.
Now I want to turn to another field to illustrate the nature of the problem, and I go back to my love of racing. I questioned whether racing is covered, and it clearly is in the interpretation, except for a couple of words that worried me; it talks about "competitive sport", and I regret to say that not all racing in my experience is always competitive. Sometimes I have thought the favourite has been more co-operative than it need be. But these are technical considerations. Consider the facts. The legislation introduced in 1928 imposed a duty on the Racecourse Betting Control Board to
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"approve" racecourses. This provision was never used. When the new legislation came in during the Butler régime they did not know what to do with it, because the Racecourse Betting Control Board was got rid of. Quite rightly, they would not give it to the Jockey Club, so they gave it to the Tote. They would not use it.
When the new legislation was introduced in 1972 it was brought back to the Horserace Betting Levy Board, and I wanted to know what it meant. It seemed to me the word "approval" meant you go and look at all its aspects, including the aspect of safety. I was advised, "Oh no, you cannot do that. If you try to do that and impose certain conditions you will certainly get challenged in the courts. As nothing has ever been done, if you do something now you will be denying the will of Parliament, because if Parliament wanted you to do it they would say so." I tell the Minister it is only a question of time before a major accident happens on a racecourse. Let me tell him why. This is nothing to do with original sin, nothing to do with the decline of facilities; it is simply the advance of technology. Go to any popular meeting at any racecourse. Helicopters and aeroplanes are landing. At Newbury the prevalent wind is from the South-West, and the planes coming down are going straight towards the stand. Sooner or later somebody is going to cut out. Nobody is taking any decisions as to safety requirements regarding the landing of aircraft, including helicopters, on open spaces in connection with sport.
I do not want to paint a horrifying picture. You cannot ask a lawyer, on the morrow of a great disaster, to write a report, and then sit on it for over a year and then produce this Bill and think that you have got away with it, because in the kind of world in which we live the facts are too strong. This is exactly what is wrong with this country: we will not define a problem until we are forced to. We then define it and find a remedy which is convenient rather than one that fits the facts. If the facts are uncomfortable, we sweep them under the carpet.
So far as this Bill is concerned, my noble friends think that they can amend it. I say to them, "Don't waste your time". This Bill is unamendable in terms

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of improving it. What is needed is for the noble Viscount to go back to the Home Secretary and get a Cabinet decision to look at sport and the needs of sport, including its financial requirements, right across the board. It is only right and just that at least some part of the large sums of money that they have extracted by way of taxation from sports like football should go back again. I am not arguing for hypothecation or taxation in order to link it with football, but football ought to be supported through a levy imposed upon the football pool promoters, and some of that £600 million ought to be grabbed back to improve football and the facilities associated with football, to facilitate the building up slowly of training facilities right across the board for all our young people, and at the same time to turn football grounds into what they ought to be—seven days a week social centres which are a source of health and strength to the people of Britain.
6.23 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am not, I am afraid, going to take this Bill back to my right honourable friends and noble friends in the Cabinet in order that it should be expanded into a measure which puts right all the known ills in every field of sport, not only in Britain but in the rest of the world, and to cure all the evils that the noble Lord, Lord Wigg, knows about in the betting and racing field, and generally to cover all the matters he raised in a very interesting speech. Nevertheless, on one point he will find that we are close to him on his basic philosophy about the way in which the Government ought to go in the encouragement of sport. I am grateful to him for putting it in a wider context, but, as he said, this is a Home Office Bill, and its short Title is concerned with the Safety of Sports Grounds. I am bound to say that I do not think we had envisaged the difficulties about helicopters and aeroplanes flying into the stands, and this point probably requires some further consultation than I had, envisaged when I was talking to him at an earlier intervention about discussing these things with racecourse authorities. I do not see any reason why it should not be the subject of consultation with those who allow aircraft to land on racecourses. I
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would rather be a little more modest, and I do not think that he will be surprised if I am.
One message that came from the noble Lord's speech was that at any rate we were right to take the problem of safety seriously. This was a most welcome theme which ran through the debate, started by the noble Lord, Lord Garnsworthy, who told us, incidentally, that the local authority associations to whom he had talked also welcomed what we were doing. That also answers my noble friend Lord Kinnoull on that subject. The noble Viscount, Lord Simon, welcomed it and, most importantly, both the providers of football, in the person of my noble friend Lord Westwood, and, if I may put it this way, "our man on the terraces", in the person of my noble friend Lord Lyell, also welcomed what we were doing. There has been a fairly general welcome for the sort of things that the Bill sets out to do. This is hardly surprising in view of what was said by the noble and learned Lord, Lord Wheatley, as the culmination of a great deal of previous research.
May I briefly deal with one or two of Lord. Garnsworthy's points, although doubtless we may have to come back to some of them. He said, "Why not the stadia under 10,000 capacity?" We feel that it is not necessary to introduce the elaborate scale of precautions at small grounds which, as various noble Lords said, attract fairly small crowds on normal occasions when we have—and this is the point about Clause 9–the powers (and they would be last resort powers) under which one would expect voluntary agreement to be reached between the local authority and the club concerned. We have these reserve powers to put a limit, or to go to the magistrates to prevent the occasion occurring when a very big crowd is coming to a ground as a result of a cup tie and the club have not taken adequate precautions. This is partly the point that the noble Viscount, Lord Simon, was interested in when he was talking not so much about special safety certificates but about the Clause 9 side. We envisage that this power would be used extraordinarily seldom, but it is there in reserve to encourage any club outside the designation system, and outside the ordinary certification system, to make sure that

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it has sensible precautions, enough stewards, special numbers of police, all-ticket matches, or something of that sort when a very big crowd is occasionally to be expected. I will come back in a minute to the subject of special certificates.
The fees that the noble Lord, Lord Garnsworthy, was talking about are covered in much the way that he wishes. If he will look at Clause 12(5) he will find that the regulations specifying the fees do, or may, in fact authorise local authorities,
"to determine the amount subject to such limits or in accordance with such provisions as may be prescribed by regulations".
This means giving them a very great deal of flexibility. I do not think he will find that they are encumbered with great rigidity when it comes to setting the scale of fees under these regulations. He also asked about the way we worked out the cost for local authorities and staff. It is an estimate, as these things must be, but it is based on the time of professional staff spent on inspections, consultations and preparations of the requirement certificates, plus an element for administrative costs. It is not actually 16 people; it is the work of 16 people spread over all the local authorities who would be concerned. I agree that it may not be immensely accurate, but it is the best estimate we can make from the amount of knowledge that already exists on this particular subject.
The noble Lord asked about the local authority that ought to be the certifying body. I appreciate the view of the Association of Municipal Corporations, but we wish—and I think this was a point that my noble friend Lord Westwood mentioned—to keep a fairly steady standard without too much variation in the level of safety that is achieved. The more districts and councils involved, the more one is liable to have variations from one part of the country to another. We can avoid this by using the bigger authorities, and that is the decision we have made. Nevertheless, as the noble Lord appreciates, the building authorities, the district councils or the London Boroughs (except in Central London), will be consulted on their element and their building regulations side, so that they will be in on the whole question of what should be the
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right standards. We feel that this is probably the right balance.
The noble Lord mentioned the question of taking it away from a voluntary and flexible basis, with a code in a green book laying down a certain minima. Of course, as I said in my opening speech, this can be done if it transpires that there are certain minima which are of universal application. But I noted that the noble Viscount, Lord Simon, on the other hand, encouraged us to continue to scrutinise and revise this code, and certainly I would not have thought that this was the moment to start embodying it in some sort of Statutory Instrument. The moment may conic when some of it will go in, but I think we need to learn as we go along for the present, and try to see, in the light of experience, whether we have got it right.
The noble Viscount, Lord Simon, was perhaps a little suspicious about the certificates and the special safety certificates. I do not think there is any great mystery about this. The sort of thing one envisages happening is that a local authority will give a certificate for a ground and say that in ordinary conditions the maximum number of people shall be, let us say, 20,000. Now that is a term, and if the club let in more than 20,000 they commit a criminal offence. But suppose the club know very well that in about a month's time or three weeks' time there is going to be a very big match and that there will be one of the influxes of supporters about which my noble friend Lord Lyell was speaking for which they will require special dispensation. Very well; in such circumstances they go to the local authority and explain the situation, and the local authority says, "Yes, in these circumstances you may, but you will have to have extra stewards; you will have to have extra facilities of one sort or another; you will have to have extra communications". And it may be that other arrangements will have to be made. These are laid down in the special safety certificate; the whole thing is lawful; it is all agreed, and in nine cases out of ten, if not more, I should have thought that this was a sensible way to deal with a practical problem.
The noble Viscount may not know it, but in fact there are occasions when West Ham Football Stadium is used

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other than for meetings of dockers. There are, for instance, evangelistic rallies; and on those occasions people do go on to what is normally the playing area, and I think the noble Viscount will recognise that if you normally have a barrier between the playing area and the spectators which prevents the one getting at the other, and if you are then allowing spectators on to the pitch, you require special arrangements for entrances and exits and other crowd control facilities which would be dealt with by way of a special certificate. So I think it is therefore quite a sensible measure to introduce for unusual activities of that sort as well.
In a way, the noble Viscount has really raised the question when he discussed appeals, to which my noble friend Lord Westwood and my noble friend Lord Kinnoull also referred. They were in favour, I think, of the Wheatley provision for a special tribunal, but the sort of appeal that we anticipate would normally take place or be exactly the one envisaged by the noble Viscount, Lord Simon; and it might happen in a very short space of time and have to be dealt with very quickly. It would probably be a purely technical matter; and therefore to do it by way of a hearing in front of a person appointed by my right honourable friend could be a very rapid and expeditious way to get over a comparatively minor problem. What one must remember is that there is also a provision in Clause 6(9) for a much more formal inquiry of a much wider nature, which I suppose, if a large issue of principle were to arise, would come to very much the same sort of thing as the sort of tribunal the noble Lord, Lord Wheatley, was thinking about. I appreciate that there is more than one point of view on this subject but we think that probably, with those two provisions read together, under the provisions of the Bill as they are we can cope with most of the situations which are likely to arise.
The question of hooliganism was touched upon, though perhaps not emphasised so much on this occasion as it was when we last debated this subject. The noble Viscount mentioned it, as did the noble Lord, Lord Ardwick, and my noble friend Lord Lyell, in his survey of what
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goes on at football matches. It is for the clubs themselves to decide whether family enclosures, as the noble Lord, Lord Ardwick, suggested, might be provided. The subject of seats has of course been mentioned in this connection before, and I know the arguments about this matter. But what I think is important is that if one looks at the code one sees that there are all sorts of provisions in it which will help to combat hooliganism, notably I think in Part 7, dealing with the terraces.
As I understand the matter—and I cannot claim the personal knowledge that some noble Lords have—the sort of thing that tends to happen is that a large body of people sway to and fro and push other spectators aside, forwards or backwards. If the, body of spectators are split up by more crush barriers into smaller groups, this sort of mass swaying will be very much less easy to achieve. At the same time, if there are more gangways it is much easier for the police or stewards to gain access to people who are causing trouble. Therefore, indirectly the actual physical layout of the ground can be immensely effective in combating hooliganism and in preventing it from causing danger to people who are the victims of it. So I think the code is a direct help towards this, and I can tell my noble friend Lord Kinnoull that the code is indeed agreed with the football authorities. I think, therefore, I am left with the question, which I knew was going to be the most difficult one, of the finances. My Lords, there is, I am afraid, no doubt that the noble Lord, Lord Wheatley, got the Government's attitude right. I am afraid that, whether the noble Lord, Lord Wigg, likes it or not, we do not see any reason to depart from the very well established principle that people who put the public at risk in the course of their commercial enterprises must bear the necessary cost of removing those risks. This is a very general principle; there have been many recent examples of it, not least in the Fire Precautions Act, which was passed two years ago; and we do not wish on this occasion to depart from that. But let me tell noble Lords a little more about the arguments on this.
In the first place, as the noble and learned Lord, Lord Wheatley, himself attempted to achieve, we are phasing the introduction of the requirements under this Bill, and we have been told (and

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who am I to disagree with this?) that there has been a good deal of compliance certainly by the more senior clubs with the voluntary standards which the Football Association first introduced in 1948. I accept the point that some of the crush barriers may not be up to standard but if, broadly speaking, this voluntary code has been implemented by the major clubs then I cannot see that they are likely to have anything very much to fear from the extra requirements placed upon them under this Bill. If, on the other hand, the voluntary code has not been adhered to, then I am afraid I have very little sympathy with those clubs which belong to an association which for something in the region of 25 years has been broadcasting the existence of and the requirement to comply with the code but have done nothing about it. I think it is high time that they were brought up to standard. It is most likely, I would have thought, that the latter proposition is not true, and that the responsible clubs, the ones that will be first brought in under this control, will have done most of the work already and will not find it a major imposition.
LORD GARNSWORTHY: My Lords, I should like to get this quite clear. Forgetting for the moment the clubs which are well-to-do, is the noble Viscount suggesting that if clubs clearly cannot meet what is expected of them under this code of practice he is prepared to see those sporting organisations go out of business without any further thought at all as to how they might be helped financially to meet the situation?
VISCOUNT COLVILLE OF CULROSS: My Lords, no—because the noble Lord has not let me finish this part of my speech. There are certain areas where help may come. Let us just look at the question of taxation. I stand to be corrected on agriculture because in my experience agriculture is always the exception to everything; but while it is normally the case that, as the noble Viscount, Lord Simon, suggested, capital improvements do not attract reductions from corporation tax, there are other expenditures which get help from taxation under the present law. I do not know whether there is anything special about the 1972 Finance Act—I shall find out from my noble friend—but some items count as plant and machinery and
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100 per cent. of the expenditure incurred on them is allowed for tax purposes; for example, such items as fire-fighting equipment, floodlighting, removable seating, communications equipment, counting equipment, if it is movable, and crush barriers, if they are movable. Some of them are extremely relevant for the purposes of the code. There are also certain replacement items. The noble Lord, Lord Wigg, said that crush barriers have been found to be inadequate. I do not know the detailed procedure, but if there is no element of improvement involved, I understand that the cost of crush barrier replacements would be treated as revenue expenditure and allowable for deduction from corporation tax. There are areas where the Revenue are not unreasonable about matters such as this and the law as it stands will offer help. It must be an improvement under the code.
LORD WIGG: My Lords, the noble Viscount looked at me severely. I had visions of myself with a begging bowl on behalf of the football clubs. That is not my rúle. I plead not for charity but for justice. Will the noble Viscount be good enough to go back to his right honourable friend to discuss the possibility of a levy on the football pool promoters. This will help football as a whole. Perhaps in the interim they might transfer to this cause the subscriptions they already make to the Conservative Party.
VISCOUNT COLVILLE OF CULROSS: My Lords, I think that that is one of the most attractive propositions that I could possibly take to my right honourable friend. It is one that we have considered at great length and, unfortunately, have decided to reject. As the point has not been raised by noble Lords, apart from in that intervention, may I be forgiven for not rehearsing all the arguments?
The most important aspect of this question is what the noble Lord, Lord Wigg, said about the way in which the Government ought to help sport. He is right. Our rúle is to attempt to help people participate in sport rather than to watch it. There are already three football stadiums where plans are in progress to bring in people to participate when the ground is not being used for

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football matches. There are various schemes and I shall not go into them in detail. This is a job for the Department of the Environment, who, through the Sports Councils, are actively doing what the noble Lord suggested should be done; so the Government's policy is in line with what he is telling us it ought to be. Apart from that Government help, I am afraid that we must look inside the football world.
I am not sufficiently skilled to know whether the money involved in the transfer of players stays inside the football world so that none of it can in any circumstances ever be used for the purposes of improving grounds. Frankly, I am a little sceptical about the impossibility (as it was put) of taking any money to pay for safety requirements. That must be up to the clubs. The latest situation on the agreement between the Football League and the football pools promoters is, as noble Lords have said, that £2 million is this year to be paid to the League for their fixture list. One judges this, as my noble friend Lord Kinnoull suggested, against the total turnover of the pools. It was established by Mr. Justice Upjohn, as he then was, that there is a copywrite in the League's fixture list. If the League succeed in extracting only £2 million for that copy-write, it is a matter for the League. I do not think that it means that the Government must interfere with what is a private contractual arrangement between two parts of this industry.
I cannot agree with my noble friend Lord Westwood that the Government is taking £72 million—which is the prospect for this year—out of football. It is not taking anything of the kind out of football. This is a betting levy and the money is taken as part of a general betting levy revenue collection and taken out of football particularly as one of a number of betting levies on which tax is collected. Those noble Lords who think that in view of the turnover of the football pools there may be room for negotiation between the League and the football pools promoters may be on to something. I have to tell the House that I shall have to be persuaded by arguments a great deal more cogent than
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have been presented so far that Government money should be put into this matter of safety. I must have more details to take back to my right honourable friends before any decision of that sort can be made. We are obviously going to have a number of detailed points to discuss in Committee.
LORD JACQUES: My Lords, before the noble Viscount leaves the matter of finance, will he undertake to take back to his right honourable friend the point that before you can get tax allowances you must have made a profit? In practice, the clubs that need assistance are those that provide splendid entertainment but make no profits. They will therefore get no such tax allowances.
VISCOUNT COLVILLE OF CULROSS: My Lords, I understand that; but, as I understand it also, the money collected by the League from the pools, for instance, is not at that moment allocated to different clubs. The League can do with it what they wish.
LORD WESTWOOD: My Lords, may I correct my noble friend. The League does not do what it wishes with the money. It divides it equally among the 92 clubs during the season. It does not keep it.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am much obliged to my noble friend. That is precisely the sort of fact that he will know and I shall not. It is divided equally and a share will go even to the most lowly club, the club doing worst financially.
My Lords, I was simply going to say, in conclusion, that we can revert to many of these subjects in Committee and in subsequent stages, but that I think we have received a welcome for the Bill from all sides of the House and from knowledgeable noble Lords. I am grateful for than. I hope that the House will now give the Bill a Second Reading and that we can look forward to even more interesting discussions later on.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COUNTER-INFLATION (PRICE AND PAY CODE) (No. 2) ORDER, 1973
6.50 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, I beg to move that the Counter-Inflation (Price and Pay Code) (No. 2) Order 1973, be approved. The hour is getting rather late and the Chamber is getting rather cold; nevertheless, this is an important Order, containing as it does the Price and Pay Code for Stage 3 of the counter inflationary exercise. It came into operation on November 1 as far as it relates to prices and on November 7 as far as it relates to pay. It was made on October 26 and was debated in another place on November 7. The code which it contains follows broadly the terms of the draft published in the Consultative Document earlier last month. The final version of the code includes changes made after consideration of comments received. Your Lordships will not wish me to go into all the detail, but I shall refer to the main changes.
As noble Lords know, the code lays down the rules which the Price Commission and the Pay Board are to apply to Stage 3. The aim of the whole exercise, as was stated in the Consultative Document issued last month, is, first, to maintain a high rate of growth and to improve real incomes; secondly, to improve the position of the low paid and pensioners, and thirdly, to moderate the rate of cost and price inflation. The rules apply to everyone and are being impartially and efficiently interpreted by the Price Commission and the Pay Board in the letter and the spirit. I see that some headlines in the newspapers talk of finding ways round the rules. My Lords, the rules cannot be circumvented if they are to operate fairly. What people are entitled to do is use the flexibility that they allow, and they are more flexible in Stage 3 than they were in Stage 2.
First, it is appropriate to have a look at the extent to which the code has succeeded in Stage 2. This is all the more important in view of the increase last month in the retail price index, which rose by 2 per cent. on all items including a rise of 3·3 per cent. on food items. This brought the increase over the past 12 months to just under 10 per cent. My
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Lords, we may ask what would it have been had we not had the rules? The Economist estimated that it would have been twice as much. Between November, 1972, and October, 1973, the prices of raw materials and fuel bought by manufacturing industry have risen by 39 per cent. But wholesale prices in the same period have risen by about 91 per cent. The raw material costs of the food industry rose by 33 per cent., but their output prices rose by 15 per cent. and the retail prices of foods mainly manufactured in the United Kingdom rose by just under 7 per cent. This suggests that manufacturers have absorbed cost increases to a significant extent. The Price Commission has estimated that on all goods and services it directly controls it had saved consumers well over £300 million at trade prices—not retail prices—when last it reported. These goods are estimated to cover only about one-third of the total consumer purchases. So these savings are of real value to the country in the fight against inflation.
LORD DIAMOND: My Lords, may I interrupt the noble Lord? This argument has been used many times from the Government Front Bench, and, unless the noble Lord is going to give some more explanation, I am bound to regard it as worthless. What one wants to know is what would have been the natural increase at the retail price, or at the wholesale price, having regard to the other items mentioned by the noble Lord? What would have been the increase having regard to the fact that an increase in materials of a certain percentage does not come out as an increase in the final price at the same percentage, but much reduced, by virtue of the fact that this is the way the constituent elements in the final prices are made up. It does not necessarily mean anything more than that in the ordinary course of events, where you have an increase in price of a certain figure coming into your costs you have a much reduced increase in price at the sale price. It means nothing more than that, without a complete justification and a breakdown of all the figures.
LORD DRUMALBYN: My Lords, I do not think that the noble Lord, Lord Diamond, quite understood what I said. The point is that what the Price Commission has said in its report is that it is

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related only to the first category companies, and they are reckoned to cover something of the order of one-third of the total. The point, therefore, is that if the savings in the first category manufacturers' products is £300 million, then obviously the total savings at trade prices —and I am not talking of retail prices—would be very much more if you took all the products into account. It is nothing to do with the trade price plus the retail price.
My Lords, between November, 1972, and October, 1973, the prices of raw materials and fuel bought by manufacturing industry have risen by 39 per cent., as I have said. While no Government in any developed country has been able to avoid the prodigious increase in world food prices and world commodity prices, which have risen by 69 per cent. and 94 per cent. respectively since January, 1972, we have been able to cushion their adverse effect on the consumer by keeping our own domestic costs under control. Nor has the policy been less effective in dealing with pay. During Stage 2 the Pay Board approved about 6,500 settlements covering almost 16 million workers. Many of the settlements included some redistributed elements in favour of the lower paid. The hourly wage rate index at the end of October was between 11½per cent. and 12 per cent. higher than in October of last year, showing a rise in real terms of nearly 2 per cent. Compare that with the equivalent price in the 12 months to the end of October last year which was between 17½ per cent. and 18 per cont., art increase which clearly the country could not afford.
Looking back, can anyone genuinely doubt that the Government were right last autumn, when faced with the dangerous spiral of increasing wages and prices, to introduce a statutory price and pay policy? Without it the rate of price increase now would be substantially higher. Without it, as the Consultative Document said, we should have piled inflation from domestic cost on to world price increases. We should not have been able to continue with the policy for higher sustainable growth. That would have been a disaster. It would have brought to a halt the recovery in industrial investment which we are now experiencing and upon which our future prosperity depends. Even more important,
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it would have delivered a crushing blow to the confidence in sustained expansion over the years ahead which industry has been showing, despite the sporadic shortages of labour and materials which are an inevitable transitional accompaniment of faster growth. As we reach full capacity the rate of growth has moderated as we expected.
The facts are that in the first half of this year manufacturing investment increased by 7 per cent. Industrial production is running at 10 per cent. higher than it was at this time last year. Productivity is 8½ per cent. higher and exports in the third quarter were running at 34 per cent. more than in the second half of last year. If we are to preserve these gains, if we are to reap the reward of progress that we have achieved so far, a continuing and effective counter-inflationary policy is essential. On this side of the House we should have preferred, as we have always preferred, that the policy should be a voluntary one. We did all we could to achieve such a policy. In our discussions during the summer with the T.U.C. and the C.B.I. all three parties were united in seeking the achievement of the common objective of a faster rate of economic growth, the protection and improvement of the position of the lower paid and pensioners and a moderation of price and cost inflation. But to our regret it was clear that there was not the same agreement on the means by which these objectives should be achieved. The Government therefore came to the view that in present circumstances the continuation of a statutory pay and prices policy was necessary.
I accept of course that a counter-inflation policy by itself is not enough. Indeed, the Chancellor of the Exchequer said so during the debate on the Address in another place. He said, it is reported in Hansard of November 5, at column 641:
"I have made clear that, in present circumstances, I do not belie-re that we could control inflation without a statutory pay and prices policy. But, equally we cannot hope to control inflation unless that statutory policy is matched by a resolute monetary policy. Both are essential, but neither by itself is sufficient."
My Lords, since the debate the Government have taken further firm action on the monetary front by calling for an extra 2 per cent. on special deposits and by raising the minimum lending rate to 13

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Per cent. As the Chancellor said yesterday in another place, the aim of the measure was two-fold: first, to slow down the growth of money and credit to rates compatible with the sustainable growth of the economy to which we remain committed and, secondly, to assist sterling. The monetary policy has to be operated flexibly, and in current circumstances high interest rates are appropriate both for domestic and also external reasons. But last week's measures must not be interpreted as an indication that we are abandoning our growth policy; far from it. Despite the rise in interest rates, I expect continued strong growth in investment. The company sector is very liquid, and has preferential access to bank credit. My right honourable friend the Chancellor expects firms to see that it is in their self-interest to increase the capital stock so as to secure the foundations for sustained expansion. There is strong confirmation of his view in the way the C.B.I. and industry have reacted generally to the Government's measures. The key to investment is confidence in the sustainable growth of the economy, and this is what our economic and counter-inflation policies are designed to achieve.
My Lords, as a result of the measures we introduced last November—measures which have undoubtedly served to sustain confidence over the past year—we are now in a position to make the transition to a rate of growth which will be sustainable in the long term. In these circumstances, it remains necessary to maintain an effective counter-inflation policy. It is to maintain that confidence that the Stage 3 controls have been designed. We needed to convince employees that the rules would be the same for everyone. That is the basic element of justice and fairness. We needed on the management side to give industry confidence in the continuation of our growth policy so as to secure the investment and exports necessary for our future prosperity. We needed to convince management, employees and the public at large, that our policy for containing inflation was both fair and firm. So we have retained the provisions that prices can only be increased to the extent that allowable costs rise, and that in calculating allowable costs a deduction for productivity from the cost of increases in labour costs has to be made. But, in the interests of
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investment, we have also added a safeguard to limit the reduction of profit margins as a result of these restrictions.
We agreed with the C.B.I. and T.U.C. on the need to promote both exports and investments. In the Stage 3 Code, we have therefore tried to meet industry's legitimate interests in maintaining a level of profit adequate to provide for investment, though without damaging our overriding objective of containing the rate of inflation. The Code seeks to balance the interests of industry with those of the consumer. Indeed, in the longer term those interests coincide: without increased industrial investment the consumer will ultimately be the poorer.
My Lords, for too long British industry has lagged behind its major competitors in both the quantity and quality of investment. If we were to depress profits excessively by undue tightening of the price and profit controls, industry would be unable to finance the additional investment needed to expand capacity and increase productive potential. So the Stage 3 Code includes several new provisions specifically designed to safeguard investment. The definition of allowable cost increases in paragraph 28 now includes depreciation. Paragraph 34 limits the reduction of profit margins due to the operation of the allowable cost régime and the productivity deduction. Paragraph 67 now allows the Price Commission to modify the profit control where a firm has been substantially reconstructed or has become more capital-intensive. As long as they are making less than 8 per cent. on capital or 1½ per cent. on turnover, firms are exempted altogether from the controls by paragraph 68. The general discretion in paragraph 70 to modify the controls in the interests of investment has been extended. We have also introduced an important new addition to the Code—paragraph 71–to assist capital intensive industries to reap the benefits of major investment made in the recent past.
These changes in the Code should help industry considerably to meet their investment requirements. They should enable industry to go ahead and invest, confident in the opportunities afforded by our growth policies, by membership of the European Economic Community and by the assistance available under the Industry Act. They should enable industry to go ahead and increase exports: the highly

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competitive position of sterling gives unprecedented opportunities to do so; and of course, the Code does not apply to export prices and sets no limit to increases in profits from exports.
These are valuable relaxations. But the Stage 3 Code also tightens the rules where they need to be tightened—for example, the rules about subdivision so as to make the profit margin control bite more effectively. We have also extended the notification requirement to Category 2 enterprises so as to bring nearly 600 manufacturing and service firms under closer scrutiny by the Price Commission. In Stage 2 only the 39 firms in Category 2, named in Schedule 1 of the first Notification Order had to pre-notify. Now over 600 undertakings in this category, in addition to the Category 1 firms will have to pre-notify the Price Comimssion of intended price increases so that the Commission may see whether they conform with the Code. If they do not conform, they can he rejected, modified or at any time rolled back by the Commission.
My Lords, as the guardian of the Code the Price Commission acted in Stage 2 with vigour, firmness and determination in difficult circumstances. Up to October 26 it had received 1,036 applications for price increases from Category I firms. Of these only 393 were approved in full and 211 were approved with abatement. The Commission has received over 31,000 complaints. The bulk of these related to the smaller firms—Category 3 and below. More than 1,100 spot checks have been made on these firms. The Commission has also made more than 700 detailed inspections of Category 3 firms up and down the country. Overall, it has achieved 633 voluntary price reductions from visits, and 61 from Category 3 inspections. Noble Lords will be glad to know that Commission inspectors found that most Category 3 firms were abiding by the Code. There is a special problem in the London, area, where the Commission staff are under considerable pressure because of complaints and inquiries. The Commission is now increasing its staff in the London area to conduct inspections.
My Lords, the Price Code also exercises a very real control over distributors' prices. The Price Commission have said that of the 179 distributive concerns
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which had reported in full by August 31, 126 were below their gross and net profit reference levels. Overall gross percentage profit margins were on average about 1 per cent. below and net profit margins 1 to 2 per cent. below reference levels. Many have kept their prices down in order not to exceed those levels. Several large stores, such as Littlewoods, Beatties, Safeways and Sainsburys have recently announced a whole array of price reductions. This shows that the profit controls are having an effect on the retailers. The longer the controls are maintained, the more manifest the effect is likely to be.
I am fully aware, as are the rest of the Government, that the major concern of the housewife and of all of us as consumers is with food prices. There is no easy answer in this area. Even the United States cannot isolate itself from the fluctuations of world demand and supply. The world demand for food and other produce of the land is rising as more and more people are demanding more and more of them, and world supplies are vulnerable to drought, floods, wars and so on.
The Price Commission has now been given the additional responsibility of keeping fresh food prices under continuous review and bringing to the attention of the Minister for Agriculture, Fisheries and Food any prices or areas where in its view action could or might be taken. This is a very considerable responsibility. The Price Commission's special food panel is now considering in consultation with the trade how best to discharge it. We have also taken steps to toughen the Code where costs to wholesalers and retailers rise substantially. A duty has now been laid on the Price Commission to act selectively on margins, where it thinks this is necessary, after consultation with the appropriate representatives of enterprises concerned.
My Lords, I now turn to pay. The Stage 3 Code maintains the essential fairness of the Stage 2 rules on pay, while providing greater flexibility for the remedying of anomalies and the improvement of efficiency. Perhaps I could summarise the provisions in this way. In the interests of fairness the Code provides for continuing help for the lower paid in four ways: by allowing the option of the cash limit of £2·25

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which will give a better deal to lower-paid groups; by allowing negotiators to redistribute the total increase allowable for the group so as to give particular benefit to the lower-paid; by providing for continued progress towards equal pay outside the pay limit; and by continuing the Stage 2 provisions for improvements in hours and holidays up to a specified minima outside the pay limit. What is new is that it allows compensation of 40p per head per week if prices rise by more than 7 per cent. in Stage 3–the so-called threshold safeguard—and it provides on the basis of the Pay Board report for the remedying of anomalies arising from the standstill.
LORD HALE: My Lords, is it not a fact that under that section the very heavy increases in food prices announced for October operate against the worker because the computation of his 6 per cent. only starts from November? So it starts from an artificially higher figure and takes much longer to go up 6 per cent.
LORD DRUMALBYN: My Lords, this is not artificial. It is the operation of the calendar. Obviously, the October level has to be taken as the base level if you are working from November 7. In the interests of flexibility the Code allows negotiators to choose between a cash pay limit of £2·25 or 7 per cent. and to distribute it within the group as they decide; it extends the pay limit by a further 1 per cent. (the flexibility margin) where the settlement includes specified features designed to remedy anomalies or improve efficiency; it allows additional payments under new efficiency schemes provided they meet specified conditions; it allows premia for working unsocial hours to be brought up to a minimum level (20 per cent. on the appropriate basic rate).
These main features were set out in the Consultative Document. There have been only minor changes in the final version of the Code now before the House. But there are changes to which I should draw attention. First, I shall say something about the new provisions on profit-related systems of payment—not because they are necessarily the most important changes, but because they have attracted some public attention. In our view it
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would be quite wrong to seek to prevent the operation of profit-sharing schemes as they existed before the standstill. There are no recent figures, but a survey carried out by the Department of Employment some years ago showed that of nearly half a million employees who then benefited from schemes of this type all but a few thousand were in schemes which apply to all employees in the enterprise. We have no reason to believe the situation has altered since. But where more highly paid people are concerned, and at a time when business activity is increasing rapidly, such schemes, as we have seen, can result in some cases in very large increases in a single year. What we have therefore done is to impose a limit of £350 on the increase to any individual under such a scheme compared with what would be due if the profits or turnover were at the average level of the best two years out of the last five. This is a reasonable limitation which will not interfere with the normal operation of profit-sharing schemes as they affect staff at lower levels.
The other changes from the Consultative Document on Pay all exemplify the way in which we have, where possible, gone further in providing for flexibility within the control. For example, where the operative date of group's principal increase was deferred by the standstill, we have now provided that for the purpose of working out the permitted increase the average pay bill for the group over the previous twelve months may be calculated as if that increase had been paid from the normal operative date. As for progress towards equal pay, we have extended the Stage 2 provision to enable any scheme under which a one-third step was allowed outside the pay limit in Stage 2 to qualify for a further step outside the pay limit in Stage 3. Another change—small, but for some significant—is provision for the cost of living safeguard to be applied, if negotiators so wish, to all part-time workers on a pro-rata basis instead of only to those working 21 hours or more.
Let me say a word about the flexibility margin. This is not just an extra 1 per cent, for everybody: there are conditions attached which are set out in paragraph 139 of the Code. The conditions relate to changes in pay or grading structures designed to remedy anomalies or improve

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efficiency, improvements in holidays and the introduction or improvement of holiday pay or sick pay schemes. So if the main settlement includes a restructuring, then the limit for the settlement as a whole will be not 7 per cent., but 8 per cent. There is only one proviso. Any changes that are made in Stage 3–for example, a new incremental system—must not take a form which will lead to higher additional costs in subsequent years.
We attach particular importance to the new efficiency payments schemes. I should explain why we have made no change in the rules set out in the Consultative Document despite the representations we received from a number of quarters—representations that work in both ways. We think it is essential that payments under these schemes should be made only in respect of improvements in efficiency which have actually been demonstrated in practice. For this reason, every scheme must be notified to the Pay Board, and payments are subject to a three month trial period which is the minimum safeguard against abuse. As regards the 50 per cent. limit on additional increases, the overriding consideration is one of fairness. We recognise that in some circumstances substantial savings can be achieved. But if the workers concerned should get greatly increased benefits, would this not lead to intolerable tensions with other groups in the same undertaking or outside, who did not have the same opportunity? Limiting the additional earnings which can be derived from such schemes helps to contain these tensions and ensures that any extra savings contribute to cost reduction.
Then there is the problem of London allowances. There has been strong pressure, particularly from employers in the Greater London area, for special exception from the pay limit for undertakings which are short of manpower. We recognise that those working in London have to meet extra costs of housing and transport. So we have provided for increases outside the pay limit in London allowances based upon the formula devised by the former National Board for Prices and Incomes, and at the same time have asked the present Pay Board to report as soon as possible on any changes needed in that formula. But manpower shortages are by no means
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peculiar to London. As the growth of the economy takes up spare capacity we are bound to begin to feel the pressure of demand for labour at a number of points. Increases in pay are no answer to such general manpower shortages. If employers were to compete with each other by bidding up levels of pay the result would be both inflationary and self-defeating. Clearly these problems should be met by the more efficient use of existing resources through investment, through training and through improved methods of work including where appropriate the introduction of new efficiency schemes.
I would emphasise the flexibility and variety of the provisions that the revised Code offers to negotiators in Stage 3. We shall no doubt hear about special cases in the debate to-day. We may even be told that they would not have existed, or would have been remedied, but for the counter-inflation policy. But it is all too clear that many of these problems have been building up for years, despite free collective bargaining. They have certainly not been created by the limitations which the counter-inflation policy imposes. This policy in fact actively seeks to deal with special cases. Within the rules many of the low paid will find themselves able to secure higher settlements than ever before. Within the rules many of those who earlier in the year felt aggrieved that the standstill had broken tight links will find that their grievances can be remedied on the basis independently recommended by the Pay Board. Within the rules some unions have discovered that their members' pay can be substantially increased to reflect the unsocial character of their working hours. For all these people their settlements in Stage 3 will have more real value than before, because they have the assurance that everyone will be subject to the same rules. The increases they receive will not be whittled away as a result of inflationary settlements in other industries. And they can be safeguarded against the risk of a further fast rise in world prices by the cost of living safeguard arrangement.
Pay problems cannot be sorted out all at one go. Pay relativities raise problems whatever system of collective bargaining is in being. We hope that the report due from the Pay Board at

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the end of the year will help to carry the policy further, so that we may in the end emerge with a much more sensible framework within which to sort out pay problems in a manner which will help real earnings to grow faster without harmful consequences either for inflation or for industrial relations, or both.
I have dealt with Pay and Prices. May I say just a word on dividends. They are covered by a separate Order which came into effect on April 1 of this year and which, subject to minor amendment by a new Order effective from November 1, continues in force. It has been claimed that the counter-inflation controls bear harder on the wage-earner than on other sectors of the community. This is not so. The price code controls company profits; and in Stage 3, as in Stage 2, increases in dividend payments are limited to 5 per cent., which is significantly less than the permitted increase in pay. While Stage 3 allows a higher increase in pay than in Stage 2 there has been no corresponding relaxation of the dividend control—only some minor technical amendments.
My Lords, I have nearly done and I must apologise to your Lordships for keeping you so long. I have tried to confine myself to the need for this Order and to its contents. I have not dealt with the balance of payments and the effect of the steep increases in price and the disruption in the supply of oil, which affect many other countries besides ourselves. These matters were discussed in another place only yesterday. It has been suggested—and it may be in to-day's debate—that because of these developments the objectives of Stage 3 are no longer relevant. Nothing could be further from the truth. The fundamental objectives of economic policy—higher investment, higher growth remain the same. The oil situation may have made the containment of inflation more difficult, but it has also made it more important. There is no doubt that in the last few months we have been more successful in containing domestic inflation than most other developed countries. This is what the Price and Pay Code is designed to do—fairly, firmly, yet more flexibly. The Pay Board and the Price Commission deserve the gratitude
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of us all for the way in which they have carried out their onerous responsibilities.
I shall end simply by proclaiming my faith that if we persevere with our counter-inflation policy, and if we can have that confidence in ourselves and in each other which comes from being mindful of our duty and of the needs of others, we need have no fear for the future of our balance of payments and of our currency, for we shall win the respect of the world.
Moved, That the Counter Inflation (Price and Pay Code) (No. 2) Order 1973, be approved.—(Lord Drumalbyn.)
7.22 p.m.
LORD DIAMOND: My Lords, we are grateful to the noble Lord for having explained the purposes and some of the details of the Order in front of us; and, if I may say so, I entirely agree with him that this is not the hour of the night when your Lordships would wish to listen to a detailed exposition of all the provisions. Nor is it possible to engage the interest of your Lordships in an equally firm reply, rebutting all the details.
What it is possible to doubt is whether the hour of seven o'clock is the most appropriate hour for dealing with one of the most important Orders affecting the whole population and something which is integral to the whole of the Government policy, at a time when there is a State of Emergency and the highest interest rate ever and when we have just heard of the largest increase ever in the cost of living and the cost of food. As I say, it is possible to doubt whether this, in your Lordships' House, is the most suitable moment at which to discuss such a serious matter carefully, knowing that with an Order of this kind and of this length we have no opportunity for a second debate to deal with details as would be done during the Committee stage of a Bill, but that we have to encompass everything in our first thoughts. If I may say so without appearing to be naughty, I would hold a different view on this if I were sitting on the Government Bench rather than the Opposition Bench. If I were on the Government Bench I would submit gracefully, as the noble Lord has done, to an almost empty House and with the minimum of argument, one of the worst

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policies by one of the worst Governments in history.
The noble Lord said a certain amount about the general economic situation, with which I do not think there is time to deal, other than by a total controversion of everything that he said. Indeed, when the noble Lord got to the stage of saying that the current state of the pound resulted in what I think he called a most attractive competitive position, I began to wonder whether he would shortly tell us how delightfully free from any sense of guilt the Government were that they no longer had upon their shoulders the burden of a balance-of-payments surplus. If one can describe the present state of the pound and a devaluation of 20 per cent. in these glowing terms, it is no wonder that the Government have got all their policies wrong. But I do not think I have time to deal individually with the noble Lord's curious statements about the Government's economic policy. I wish to come straight to the Order which is in front of us and to deal with that in a very general way.
I should like to preface my remarks by repeating what I tried to say in a very short intervention earlier, to which the noble Lord replied that he thought I had not understood him. Of course the noble Lord may be right, but I should prefer to think that he has not understood me. Therefore I return to the topic by saying this. The noble Lord and all his colleagues have frequently commented that although one finds a large increase, for example, in the cost of imported materials—that is to say coming into a manufacturer's profit and loss account—one finds nevertheless that the sale price of the manufacturer, be it a wholesale or a retail price, is nothing like as high as the increase in the cost of material. He has never claimed the whole of that benefit as being attributable to the deflationary policy of the Government, the prices and incomes policy. Of course, he would not attempt to do so. It would be sheer nonsense and would show complete ignorance as to how prices are made up. I am saying to the noble Lord and to the Government that there is no validity whatsoever in
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their argument that this huge difference must indicate that some credit is due to the prices and incomes policy. It need not be so at all.
If one examined the figures carefully one might find that, but for the prices and incomes policy, the difference would have been even greater. It is just not possible to draw any conclusion of that kind. I hope I have made it clear to the Government. If they want to claim some credit for the difference in these figures, then they must go carefully into all the costs making up the sale price of the goods and demonstrate that certain individual items would have been more if it had not been for price control. They must try to demonstrate, for example, that the rents of uncontrolled premises, which are reflecting the vast profits made by speculators in property, would have been even higher had it not been for the Government's policy. They would have a little difficulty in that. Rents, as the Government know—factory rents and office rents—have gone up threefold and fourfold. There have been enormous increases, because the Government have refused to control the prices at which property changes hands as between people who know that they cannot get an adequate return on a property because they are shortly going to sell it at an even more enormous figure. There is no attempt to control this at all; so I would say to the Government—
LORD DRUMALBYN: My Lords, may I just interrupt the noble Lord? I do not think he is on the same point as I was. What I was quoting was the figure given in the Price Commission's Report for the period from June 1 to August 31, which he will find in section 3 of paragraph 5 of the Report. A calculation is shown there of what has been saved by their operation on prices of Category 1 manufacturers.
LORD DIAMOND: With respect, my Lords, that is not the case. That is one of the things the noble Lord quoted. I am not referring to that; I am referring to another reference that he made about direct material costs and the sale price, both at the wholesale and at the retail level. His colleagues keep on doing this ad nauseam and when it is being done ad nauseam sooner or later someone has

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to react and make it clear that this argument is meaningless without the breakdown of the figures and some demonstration that the Government's policy has achieved in individual categories some of the effects they claim.
I now come to the reason why, although we do not vote against this Order, having regard to the constitutional position, we oppose it fundamentally. The shortest way of dealing with this at this hour of the night is to say that we oppose it because it is unjust in conception and in application by the present Government. I would categorise it by saying that it is merely a device to enable the present Government to hold down wages to the point of depressing the standard of living of some wage-earners, while favouring the wealthiest section of the community. That is what it is all about and, with your Lordships' permission, I propose to give fact and figure to justify it.
The first hurdle a Government must overcome in adopting a policy of this kind is to demonstrate that there is some reason for wage restriction at all. They have never done so; they have never given us the figures of the comparative increase in the cost per unit of manufacture in this country as compared with our competitors. If we were going completely out of line with our competitors as a result of wage increases, it would be necessary for the Government to say, "Wages are getting out of line and must be restrained". But they have not attempted that argument because they could not prove it. We are fortunate that figures have now come out, and I give the figures of the European Commission Quarterly Economic Survey of May of this year. They show, as one would expect, in terms of the increased cost per unit of gross value added in industry, that we are broadly in line with our immediate competitors. Two of the European Community nations, Germany and Italy, have had greater percentage increases than we have. I will give the detailed percentages if they are needed. Two nations, Benelux and France, have had lower percentage increases; two have had greater, two have had lower and we are in the middle.
There is no justification in those figures for saying that in this country the increased cost per unit of manufacture, as a result of wage rises, has put us out of
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line with our competitors. The Government have no justification for adopting a policy of wage restraint on those grounds. The figures I have given are figures without making any adjustment for the variation in parities. If you make allowance for that the argument is immensely strengthened. Nevertheless, the Government have been pursuing this policy of wage restraint, although they realise as well as we all do that less wages for the employee means more profit for the employer. And that is exactly what I propose to examine, as shortly as I can, with the indulgence of your Lordships.
First let us look at profits, and as to that may I give your Lordships some recent examples? I have a long list, but I shall quote only six recent announcements of profits: British Home Stores, up 33 per cent, at £12 million; Ferranti, up 39 per cent., at £5 million; Thorn Electric, up 43 per cent Boots, up 54 per cent., at £61 million; General Electric, up 55 per cent., at £120 million; Pilkington, up 85 per cent., at 34 million. I have given the percentages; I have given the absolute sums to indicate the size of the profits, the many millions of pounds which are represented by these increases. Those are some examples of profits in fact made and distributed; those are the dividends.
As to the profits which are not distributed, of course we heard what the noble Lord had to say about the continuing dividend restraint. He might have helped us by going further and making it clear that, as we all realise, whether or not a profit is distributed, if it is made it inures for the benefit of the shareholder. Everyone in this House knows that what matters regarding the value to the shareholder is what is called the P/E ratio, the price/earnings ratio. It does not matter what is distributed; it matters what is earned, the price related to earnings. Whether or not the earnings are distributed, once they are made they go to the benefit of the shareholders, either in increased values immediately or in dividends later on. Fortunately or unfortunately, every wage-earner knows that very well, too. As anticipated, we have now found that the profit per unit of output has been growing faster than wages per unit of output. I repeat, so far as profits are concerned, very high profits have been made. Where

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they have been distributed I have given some of the figures; where they have not been distributed they have inured for the benefit of the shareholder. We have reached a situation where the profit per unit of output is growing faster than wages per unit of output. Next let me turn to wages—
LORD DRUMALBYN: My Lords, I am sorry to interrupt the noble Lord, but he made a statement that he did not support with any facts. He has not been dealing with profits per unit of output.
LORD DIAMOND: My Lords, perhaps the best thing for me to do is to say that I will gladly send the noble Lord all the calculations that he wants; I do not think it is appropriate to delay the House at this hour. I repeat, and take the responsibility for what I am saying, that the profit per unit of output —this is a very clear statement—is growing faster than the increase in wages per unit of output. This is one of the elements in our criticism and in our declaration that the Government's policy is unfair and unjust. It is a policy for restraining wages and benefits the wealthier portion of the community. I have many more similarly unwelcome facts to give to the noble Lord.
The noble Lord told us how much benefit there would be to the wage-earner. Let us examine that. The shortest way to illustrate this is to take the case of an average family man with two childen on average earnings of £40 a week. If he is to maintain his real income (that is to say, after taking into account deductions for taxation and national insurance, and after taking into account price increases) and to receive the benefit of the 3½ per cent. real increase which the Government forecast in production—and he plays his part in achieving it and is entitled to it—he would need a pay increase of 13½, per cent. He is not going to get that; the Government's estimate is 11 per cent. If he gets the 11 per cent. as forecast by the Government, assuming, as I say, that he has two young children, he will receive a real increase of 1·7 per cent. I give the noble Lord the precise figure, which is less than half the 3½1, per cent. increase in productivity to which the man is entitled. That is the case of the
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average man. The Government may say, "Yes, so far as the average man is concerned that may be so; but it is our policy to help the lower paid". The noble Lord referred to this again this afternoon.
Let us take the figures for the lower paid by taking a figure of £25 per week, being approximately one-third off the average wage, and calling that the lower paid one. One can take any figure that the House requires. In this case it is easier. If he has more than one child, a man with a wage of £25 a week will suffer a net fall in his real income. If he has two, three, four or more children he will suffer a net fall. If he has one child he will not suffer a fall and he will not gain a benefit as a result of the application of the code. So much for the Government's claim to benefit the lower paid. If, on the other hand, he has been very highly paid, he may, as the noble Lord knows, escape restraint completely. It is not the practice in your Lordships' House. very properly, to refer precisely to the names and the companies, but your Lordships must be aware of a very large company indeed where a certain official was entitled to receive, but refused to accept, an increase of 37 per cent. in commission amounting to nearly £18,000. The individual in question very wisely refused to draw what he was entitled to. That does not affect the fact that the Government's code made it possible for an increase like that to be available to such a person. So much, then, for wages.
I have dealt with profits and with wages: I now turn to prices. So far as prices are concerned, I do not think I can do better than refresh your Lordships' memory regarding some of the prices referred to by the noble Earl, Lord Ferrers, as recently as October 24. These figures were circulated in a statement and your Lordships may not have had time to look at them in detail. The essence of these figures is that between June 16, 1970, and mid-September, 1973–and one recollects that prices have gone up very substantially since then—one finds this sort of percentage change in some of the ordinary household items: beef 79 per cent., lamb 77 per cent., pork 58 per cent., bacon 83 per cent., ham 44 per cent., eggs 99 per cent. I need not bother noble Lords with any more because any Members of your Lordships' House who go shopping will be well aware of these

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phenomenal, astronomical increases. Those are the increases in prices, and those noble Lords who wish may refer to column 626 of the OFFICIAL REPORT of October 24, where they will see a long list. But I must be fair to the Government—onions went down by 2 per cent. So much for what has been happening about prices.
There is one other item which I must mention and that is mortgages. Your Lordships may wonder why I am dealing separately with mortgages. The simple answer is that mortgages are excluded from the cost of living index—not every one of your Lordships may be fully aware of this. Mortgage repayments have gone up by 40 per cent. since Phase 1 started, but that is not shown anywhere in the cost of living index which forms part of the threshold agreements or anything of that kind. The Government go on the curious philosophy that these increased payments are not regarded as coming out of income at all; they must, somehow or other, come out of capital. Your Lordships can imagine how much capital the average home buyer has who goes to a building society in order to borrow for the purchase of a house because he has not got any capital—an idiotic situation which the Government ignore. An enormous burden is put on the shoulders of many home owners and it is typical of the way in which Government statistics understate the real problem.
My Lords, I have attempted to say why we regard this policy as wholly unjust. I have given facts and figures in regard to wages, profits, prices and mortgages. And now, if anything further were needed, I finish with a short reference to the overall effect of the Government's policy. I tried to get information indicating what was likely to happen in terms of equity by asking for the figures relating to the Gini coefficient, not because one wants to bore the House with that kind of expertise but because one wants to know in advance whether the Government are taking seriously their social responsibility as between different categories of the community. As your Lordships may know, I tried very hard indeed to get the figures; the Government tried very hard indeed not to give them to me, and, let me be quite frank, the Government won hands
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down. The only thing I got was a long rigmarole from the noble Lord who normally sits on the Woolsack, the only part of which I fully understood and agreed with was that all this was quite beyond his ken.
Sooner or later, although a Government may refuse to give you significant information about the trends, about the likely results of Government policy, you find out the figures which show the result of the Government's policy; and the best way of finding this out in terms of justice and fairness (which is what I am concentrating on this evening) is the family expenditure survey. The latest figures show concern that the income of the poorest 30 per cent. dropped sharply as a result of Government policy, including Phase 1 and part of Phase 2 in the first two years, while the income of the richest 10 per cent. rose. May I repeat that? The income of the poorest 30 per cent. dropped sharply, while the income of the richest 10 per cent. rose. That is as a result of Government policy, and that, may I remind your Lordships, was breaking a trend which had existed for the whole of the last decade. That is the injustice of which we are complaining, and that is the policy of the Government which is evident in this Order.
7.48 p.m.
BARONESS SPEAR: My Lords, the hour is already late as everybody has said, and I am sure the last thing your Lordships want is a long speech from these Benches. However. I would like to begin by saying that the last thing we would claim to be able to do is to produce a solution for inflation, because we know perfectly well that there is not such a thing as a solution for inflation. We know that its causes are many, and we know that if it is going to be, at least, contained, if not cured, there will have to be a multi-Party approach and it will have to be attacked in a number of different ways. We do not know what the cure is for general inflation or for wage inflation. We do not go along with the noble Lord, Lord Diamond, in saying that wages have nothing to do with inflation. We do, however, want to underline the fact that the Government's monetary policy has a very great deal to do with inflation, and to the extent to which new money has been pushed out into the economy their policy has

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undoubtedly contributed in a very large share to the inflationary pressures from which we are all suffering.
However, in the short speech which I wish to make to-night I would confine myself to the aspects of wage inflation and to that part of the Regulations which deals with pay, because in the present circumstances we do go along with the need for statutory control over both pay and prices. Unlike the noble Lord, Lord Diamond, we find it impossible to believe that, although there are other elements undoubtedly leading to inflation, the increase in pay has not been and does not remain, if not subject to some sort of restraint, an important element in the pushing up of prices.
I listened with the greatest care to the noble Lord, Lord Diamond, and found it difficult to conclude what he thought was the cause of the undoubted rise in prices from which we have all suffered. He admitted that the price of imports had undoubtedly gone up. But one was left with the impression that, otherwise, price increases were due entirely to an increase in profits and were to be attributed in no way whatsoever to any other element in the economy. That, in short, is something I simply cannot swallow and which we on these Benches cannot swallow.
LORD DIAMOND: My Lords, I very much hope that the noble Baroness will never swallow it. It is something I do not believe myself and have never said.
BARONESS SEEAR: My Lords, I must have been half asleep; but that is the impression I certainly got, and which I think a good many Members in your Lordships' House got: that pay had not contributed in any significant way to the increase in prices. The noble Lord, Lord Diamond, gave us a great many facts and figures. Of course, we can all select facts and figures. I am not going to make the Government's answer to the noble Lord, Lord Diamond, for them. I do not suppose the answer I would give would be the same as the answer that noble Lords on the opposite Bench would give. But I would point out what happened even under the Stage 2 arrangements—and one admits we had to have them, although one does so rather sadly because I, for my part, do not like these statutory controls
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over either pay or prices. Even under Stage 2, which was for a short enough period, between April and September of this year, judging from the figures quoted in The Times this morning the index figure for wage rates has risen from 112 to 120, and the figure for earnings from 146 to 156, plus or minus a decimal point or two. That is in a mere period of months. That cannot be taking place without some very substantial increases going on on the pay front. It is an increase of a tune which undoubtedly needs some degree of control.
So reluctantly one accepts that there has to be a Stage 3–but I would underline "reluctantly". I am afraid that there is a good deal in the Stage 3 requirements for pay which is, if not unacceptable in the circumstances, accepted by us with the very greatest reluctance. It is to the nature of the whole exercise that we inevitably have great reservations. In the attempt to introduce flexibility—and I know that the Government were urged to introduce flexibility—the new Code includes so many possible loopholes, reservations and exceptions that inevitably two things are happening. I do not go along with the commentator who says that with the new Code we are going to sea in a sieve, but I think we are going to sea in a pretty leaky boat and that the more flexibility there is, the greater opportunity there is for worming your way through, writhing your way through, the loopholes which flexibility inevitably provides. This difficulty is inherent in the whole business of attempting to control pay statutorily, unless we are going to have some kind of total and rigid freeze on pay, which can obviously be done for only a very short period of time. So I think it is liable to a considerable amount of manœuvring and evasion.
On the other hand, this control is also undoubtedly already causing, and will continue to cause, an enormous volume of unproductive work. A considerable number of people already are compiling vast dossiers, filling in enormous forms and collecting a tremendous amount of data, in order to be able to establish a case for a price increase or for an exception on the pay front, or whatever it may be. The more that "flexibility" is built into the situation, the more people are spending their time trying to find

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legitimate ways of getting through it, and this is a diversion of energy and ability which we can ill afford.
The second reason why one is unhappy about this whole process is perhaps an even more fundamental one. This is that the whole policy of the Pay Board with this detailed regulation—flexibility for efficiency, 1 per cent.; flexibility for unsocial hours, and all the other conditions that have been built into the new Code—is, as I see it (and I know this is a matter of fundamental ideas as to how pay ought to be dealt with), an interference, and a serious interference, with the proper business of pay negotiations. I believe that basically the settlement of pay is a matter for collective bargaining, a matter for the two sides of industry through the negotiating process, and that it is only the two sides of industry who can settle the kind of problems which arise again and again in dealing with internal details in the application of pay.
Let us take the example of the efficiency clauses. I very much sympathise with the critics who are saying that by the time the two sides of industry, or the two sides of a company, have gone through the business of working out a new productivity deal in the interests of efficiency—and have put all this down on paper and submitted it to the Pay Board, who then have to look at it, who go into the "for" and "against"—time has moved on and the situation has changed in some respects from what was put forward in those preceding months, which may no longer he strictly relevant to the situation they now find themselves in. This is not the kind of matter that is best dealt with by a central body. This is part of the business of industry in settling its own affairs. It may be necessary as a temporary measure, but it is moving the decision away from the place where it ought to be taken. It is part and parcel of the business of running an industry. It is the business of the unions and the business of the employers to settle this kind of matter rather than to transfer it to a central body.
Then a third point, of which not very much has been made, but to which I think I should draw your Lordships' attention, is the enormous amount of power that is being put into the hands of the Pay Board. This is part of the bureaucracy,
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and an inevitable part for the time being. The Pay Board—a group of able, intelligent, conscientious people, but still a group of officials—are going to make decisions which affect the running of industry and affect the pay packets of ordinary men and women, and affect the profits, the power to invest and the power to make dividends, of a very large number of people. It is an enormous amount of power to give to a group of people administering regulations, which is not just a matter of determining facts but a matter of making judgments. And there is no appeal from their decision. This is a very great deal of power to give to a new Government agency, with very little check on them at the end of the day to see that in fact their decisions are rightly made. For this reason alone, I would have considerable reservations about the Pay Board.
However, unlike the noble Lord, Lord Diamond, we would agree, reluctantly, that for the time being we must accept it. May I say that I think its acceptability to the public could he improved if the Government would do at least two things—there are many more which it would be desirable for them to do, but these two things would meet some of the feeling of injustice and neglect of groups in serious need. That is a feeling which is undoubtedly real at the present time. One of them has already been referred to by the noble Lord, Lord Diamond, in a different way. It is to do something about the enormous amount of money being made in the property market. This causes an exacerbation of people's feelings about controls which is out of all proportion to any benefit that it can conceivably have. There may be difficulties in doing this in the short run, but at least the Government could look again at site value taxation, which would be some contribution to bringing back to the community the benefits which are at present going to the property dealers.
The second way in which some relief could be given—a long overdue change, in my view—would not be, as many people allege, general subsidisation of particular foods, subsidisation which would benefit all groups of people, rich or poor alike, but a change which sooner or later the Government will surely have to accept, namely, the introduction of family allowance for the first child. There

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is no doubt at all that with the present rises in prices it is the family groups which are worst hit and who suffer most, and surely if we want to give relief where relief is most needed, the bringing in of an allowance for the first child would do more than any other single action that the Government could take to relieve need where it is most acute. I think this is more important than dealing with the problem of the low paid, important though that is, because the low paid include a number of people who have very little in the way of family responsibilities, whereas if you make some additional contribution to the family groups you are going straight to the people who, by all the studies that have ever been made, are clearly those who feel it most when prices rise.
But while reluctantly accepting the need for Stage 3, it seems to me that the most important question to which we should be directing our attention at the present time is not so much how to modify Stage 3 as it stands but to take steps to answer the question, "Where do we go from here?" Are we to have a Stage 4 are we going on like that; and if not, where do we go and how do we prepare to get there? It seems to me that there are only two possible places to which we could go from where we now are. It may be that we wish we were not where we now are, but we cannot do anything about that. However, we can do something about where we go from here. As I see it, there are only two routes that we could follow: one is to move over to something like a national job evaluation scheme, and there are murmurs coming from a number of quarters—some of them rather surprising quarters—that that is where we ought to be going. When I hear people from the Pay Board speaking about adjusting differentials, not only within groups but between groups, that is another way of saying that we should be moving towards a national job evaluation scheme. Either we go in that direction or we must go back to some form of voluntary collective bargaining, but it will have to be voluntary collective bargaining with a difference from what voluntary collective bargaining has been in the past.
I do not believe that the national job evaluation goal is the right one to pursue.
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Job evaluation can work reasonably well at the level of the plant. It works reasonably well at the level of the plant because the decisions are made close to the people who are affected by them, and because the people who are affected by them can get at the people who make the decisions, discuss them, argue, raise discrepancies and bring out injustices and inequalities and they can be dealt with at that level. It is not a scientific system. There is in fact a great deal of bargaining inherent in job evaluation even at the level of the plant, and at the level of the plant, as anybody who has worked at it knows, the whole thing needs to be revised at least once in three years because the situation changes. If this is true of job evaluation at the level of the plant, what is likely to happen if we attempt national job evaluation? It is remote and the people affected by it will have no control over it whatsoever, and what we shall be doing is simply to have high level national negotiation with the Pay Board or the Government or whoever attempts to handle it, because this is what it is all about, and continuous argument and recrimination as to how the scheme has been worked out and how it is to be applied. Anybody who does not come in the place in the pecking order in which he thinks he ought to come will have a grievance and will start fighting about it. I do not believe that there is any solution or any peace along that line.
If that is true, where do we go, except back towards collective bargaining? It seems to me that all sides in this House could accept that this is what we have to do and that we need to prepare the ground to do it. We need to accept that it will be a somewhat different kind of free collective bargaining from what we have had in the past. As I see it, it is the job of industry to settle the details of pay and the levels of pay between the unions and the employers, but the Government must protect the public interest against excessive rises in pay and against inflation. So the Government must be able to retain ultimate control, but I am convinced that it is not the business of Government to become involved in the details. The Government should not be arguing about the minutiae of pay with the unions or the employers; that is their business. Can we not get an acceptance that in the end the Government must

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of course govern, and that that includes controlling inflation?
The Government can therefore declare a maximum figure above which, if pay rises are sought, it is going to take action, hut, having said that, to leave it to the two sides to get on with it. In getting on with it, I would suggest that the first thing we need in the new style of voluntary negotiation is terminal agreements for a period of probably two years. Those agreements should be based on two elements: the element of the share of the increased genuine wealth and an element of the cost of living increase. So it is along the lines that the Government have suggested in the Pay Code. But this should be built in for some years to come, at any rate, to reassure people, when they are negotiating on a voluntary basis, that there will be a return to them if prices rise about a certain level. It is up to the partners in industry to monitor any additional plant agreement which is made over and above that, and to see that such agreements keep within the pay levels laid down.
I am not speaking about minima and I am not speaking about norms coming from the Government. I am speaking about realistic maxima which it would be dangerous for the negotiators to exceed and then to let industry get on with it again; but if there are runaway situations then the Government really have to act. They could act in two ways: they could simply prolong the period of the agreement and forbid the making of a new agreement until a period of months had elapsed in those industries which have exceeded the maximum. Because, after all, if you do not get a new agreement this is a way of holding down the inflationary effect. If that will not work then I think the proposal which has been put forward in a number of quarters—and it has been put forward by the Liberal Party—should be looked at. It is the proposal that where there are excesses above the maximum which is the highest figure that can possibly be tolerated there should be a surcharge through the social security payments and through corporation tax, both on the employers who have paid in excess of the figure and on the employees who have received it. This is often referred to as the Hungarian system. It is pretty draconic, but at least
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it does not involve detailed interference and it makes it possible, within that framework of control for the national interest, for voluntary collective bargaining to go on.
If we are going to get back to voluntary collective bargaining we must prepare the way, and we must get acceptance up and down the country of the need for some reasonable restraint. I am bound to say that speeches such as that made by the noble Lord, Lord Diamond, do not encourage me to think that this is going to be a very easy thing to do. I think he said that I misunderstood him, but the suggestion that there is little need for restraint over pay does not seem to me to be the way to get back to free collective bargaining, which, as I see it, is the only way for us to go. However, people need a great deal more absolute information. There was a throw-away line in the speech made by the Prime Minister in another place in the debate in October in which he said that if you took a fifth of all incomes over £5,000 per annum this would give another £400 million. That is £16 per head per wage earlier in this country, which would he regarded as chicken feed.
There is a deeply built-in belief that there is a great deal of money in some quarters and all that is needed is a policy of redistribution. There are abuses, such as in the property area, but by and large there is not much left in the policy of redistribution for giving people the standards they want. At least one leading economist said that if you took all distributable profits before tax and put them into a pool for pay, you would get a once and for all 15 per cent. increase and that would be the end of it. All additional increases would have to come out of extra real wealth produced. It is that sort of information that people need to have if we are to trust voluntary collective bargaining again, but the Government have singularly failed to put over to people the real facts about the economy. Why is this? I ask them why they find it so difficult to make it clear that the money simply is not there to be distributed at the present time. If one group of wage earners gets more, it is at the expense, not of the profit takers, but of other groups of wage earners. I believe this to be the case, but this is not made clear and is not accepted.

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If we are to have the sense of restraint which must go with a collective bargaining system, people must be made aware of this. There should be much more information, and a much greater degree of understanding ought to be available in the country as a whole. I believe that we shall probably have to leave more room through collective bargaining for the market to operate, one may say, in the fixing of pay. This leads to differences between people doing the same job in different sectors, but that is the way the economy is, and I believe that is the way it has to be.
Your Lordships may feel that what I am saying makes no reference to the need for fairness. It is the desire for fairness which presses so many to urge some kind of national job-evaluation scheme. This concept is more complicated than the people who bandy the wording around are prepared to admit. I do not believe, with certain safeguards that one could introduce over the low paid which would help here and there, that one is going to deal with the problem of inequity through control of the pay system. One has to deal with that through the tax system. It is difficult to iron out the differences between one group and another by attempting to hold down the wages of one group, and push up artificially the wages of another group, although something may be done about raising the wages of the lowest group. But the Government have introduced the idea of the tax credit scheme. This is a far more sensitive instrument for dealing with the inequities in society than trying to manipulate the pay structure. By so doing it is possible to do a great deal of economic damage. Cannot the Government speed up the introduction of the tax credit scheme? Can they not put it on a more equitable basis than they have suggested so far, and get over the idea to people that this is the way in which we are going to look after the equity of the problem, the justice between different groups, and not doing such a thing by tampering with the pay system in a way which economically is disadvantageous at the end of the day to most groups in our society.
8.14 p.m.
VISCOUNT AMORY: My Lords, may I start with something of a protest, that a
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debate on a subject of this importance should have started at such a late hour? On that account, my first intention was to curtail drastically the remarks I was going to make, and to confine my remarks to the contents of this Order alone. But as be seen from the speeches that have been made already, it is really not feasible to consider the contents of this Order in complete isolation. One thing the noble Lord, Lord Diamond, said struck a chord with me. He said that the price of onions had gone down. In the course of my bachelor shopping yesterday, I acquired two onions and can confirm the truth of what the noble Lord has said.
My Lords, if most of what I want to say goes rather wider than the actual terms of the Order, it is to make one point, which is that this policy of Phase 3 is only one of the instruments required to defeat inflation. It cannot be effective by itself or in isolation from other appropriate measures. It is not an alternative, but one of a series of measures which only combination can be effective. We are living in days when the whole world economy is going through a turbulent phase when changes come dramatically and are cataclysmic in scale. One example, which is surprising to a layman like myself, is to find Japan, so often held before us as an example of economic progress, currently in a record deficit on payments. There can surely be few people who can now doubt the necessity of a prices and incomes policy with statutory backing.
I agreed with the noble Baroness, Lady Seear, when she said that it seemed inescapable that the Government of the day should decide how much of the national resources in any one year in the aggregate could he devoted to wages and salaries, and the nearer the Government's role could be kept to that, the better. That is what I understood the noble Baroness to say, and I agree with that. But it is rather like the Irishman who, when a motorist asked him the way to Roscommon said, "If it is to Roscommon I would be going, it would not be from here that I would be starting." We have to start from the position that we are in at the present time. It is difficult to say at this stage what will follow Phase 3. Phase 3 seems the most important and the most difficult of the chapters which

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have opened so far in this programme, most important because if it fails we shall be back again in square 1 with inflation running strongly; and it is most difficult because it must have three characteristics at least. First of all, it must be flexible. Secondly, it must be seen to be as fair as it can be made, and thirdly, it must be effective as an anti-inflationary policy.
Such criticisms as I want to make I shall make as briefly as I can. I find that they are sprinkled over employers, trade unions, the Government and the Opposition with undiscriminating impartiality. If I may again take an Irish analogy, there was the Irish judge who said he was going to steer a careful course between partiality, on the one hand, and impartiality, on the other. If I may deal with the Opposition first, noble Lords are always accusing the Government of being divisive. Maybe few of your Lordships are more consensus-minded than I am, but I have long noted in Parliamentary life that when the Government of the day propose something unpleasant they are accused of being divisive. Going back to the eve of the last war, I recall that this happened when the Government of the day proposed conscription. Nothing seems more certain than the Government's wish to unite the nation, but to unite it not for inaction or inertia but for whatever action is called for in the national interest. In our debate on the Emergency Regulations the other day, some noble Lords opposite were inclined to blame the Government for action which they considered premature. As I listened, I wondered what indignation would have been vented had the Government acted too late.
In passing, may I say two things with reference to employers? First, I do not believe that employers in general are yet giving employees enough information about matters of close concern to them. There are many employers who do. Secondly, personally I am becoming increasingly disenchanted with these huge-scale mergers and take-overs, which sometimes are little more than financial manipulations that bring little real benefit in increased efficiency to the businesses concerned. In passing, I would say that I think a closer examination of them is required in the national interest. The bone I really have to pick with employers is that while in Phase 2 the larger
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employers seem in general to have adhered pretty well to the rules, I am afraid there is a good deal of evidence that very many small concerns have not. To obtain the manpower they wanted they have disregarded Phase 2 rules; and that, if true, is I suppose an illustration of the difficulty of monitoring and policing these regulations. That again may prove just as difficult in Phase 3.
As regards the trade unions, I hope that I have never been guilty of intemperate criticisms of the trade unions. They have a clear duty to do their best for the long-term interests of their members. My current criticism, therefore, is not about their basic aims but what seems to me the strangely narrow and shortsighted vision with which some of them are seeking those aims. if they recognise, as I feel sure they must do, that beating inflation is as much in the interests of their members as of other sectors of the community, it cannot surely be reasonable on their part to demand that everybody and everything should be subject to control except the settlement of wages, the biggest single component in our national costs. They do not seem to me to recognise that if inflationary pressures are to be moderated, wage settlements under which some are to have more than the average must mean that some others have less than the average. Any increases over the average will have to be at the expense of some other wage-earners, if we are not going to exceed the aggregate that is available for increases in wages and salaries.
There is one other thing about the trade unions that I feel bound to say. I have said it before, and I must say it again. I really do feel that the immoderate criticism of the Industrial Relations Act on the part of most trade union leaders, which I doubt is shared by the majority of those on the shop floor, seems to me to bear no relation whatever either to the actual contents of the Act or to the actual or potential effects of it.
Now I come to the Government. It was right of the present Government, I think, to set out with a twin policy of beating inflation and resuming a sustainable rate of expansion. Whether it is feasible that these two objects should be pursued simultaneously is something on which we cannot yet be sure. I hope it

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will indeed prove to be possible. Anyway, the attempt I think was one that it was right to make, and it has been made with vigour. Where I think, with hindsight, the Government have been mistaken is in the priorities between those two aims when the measures required for the attainment of each have, temporarily at any rate, conflicted. There are, after all, I suppose, three main instruments of economic control available to us; fiscal measures, monetary measures and the control of prices and incomes. While I am sure the third, prices and incomes controls, are urgently necessary and should make an effective contribution, they can do so only if they are adequately supported by the other two. I fear that the deficit in this year's Budget was surely inflationary. Let us hope that the buoyancy of the yield of taxation may go some way, and perhaps a substantial way, to reduce that deficit at the year's end. If that happens, it will be wholly good.
The Government, in their understandable anxiety to get unemployment down and expansion going, have allowed the money supply over the past two years to increase much too fast. The rate of increase that has taken place has, I believe, aggravated the rate of inflation. I am not one of those who believe that inflation can be realistically controlled by restriction of the money supply alone, but that is one of the instruments that must not be neglected. It seems to me that we have now reached a point where interest rates alone are no longer effective, if people think that inflation is going to continue. That knob has now been turned about as far as it can go, and from now onwards, in my view, the Government will have to rely more, in this matter of controlling the credit base, on such devices as special deposits, the control of hire-purchase and the relation of taxation to public expenditure.
I will say one word about the balance of payments. I will be as brief as I can. With the higher prices for oil, and probably a continuing increase in prices for many other commodities, the short-term outlook is obviously grim. There is one mistake we must not make. While the floating rate is sensible in present circumstances, I am sure it is a blunder to think, as some people seem to do, that
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by some magic a floating rate can save us from some of the consequences of an adverse imbalance. If our currency floats downwards the economic consequences are precisely the same as if it did the same thing with a fixed rate, though it may do it more conveniently. The lower it floats down, the harsher the terms of internal disinflation must be. So do not let us delude ourselves that we can solve anything by letting the exchange rate take the shock for very long.
To get our perspective right, however, let us remember that in the past 12 months import prices have risen unprecedently— by over 30 per cent. I believe; and for commodities by 60 per cent. I am never sure that my memory is good enough now for statistics, but I think those figures are right. The terms of trade have deteriorated 16 per cent. in the year. We may have been abnormally lucky with the terms of trade over the past 20 years. I think this 16 per cent. is more than they have deteriorated over the past 20 or 24 years. But, as I say, I think we were abnormally lucky before. If that had not happened, then I think it would be true to say that our current payments would be just about in balance to-day, and the current rate of inflation much moderated. Many in the Party of noble Lords opposite have accused the Government of seeking an alibi in the rises in import prices. But it is not an alibi; it is a statement of inescapable economic fact.
Now I come to Phase 3, and the actual provisions of this Order. The first question one asks is: is this Phase 3 being built on the foundation of a successful Phase 2? Surely the evidence is that, though some of the effects of Phase 2 have been neutralised by these import prices, without the restraints imposed by Phase 2 the rate of internal inflation would have been substantially, and perhaps disastrously, worse. The cost of living has risen by about 10 per cent. The rise in earnings has outstripped that 10 per cent., leaving a small increase in the average standard of living in real terms. Unemployment has come down steadily, and unfilled vacancies have increased to a figure that seems to show that our productive manpower is now tightly stretched, and all the evidence of staff shortages certainly confirms that fact. That raises the question, of course, can room now be found for the

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increased volume of exports that we so seriously need and must have? I would hazard a guess that there will not be room unless some action is taken. It is against that sort of background that the proposals of Phase 3 have to operate.
My Lords, there can be few fair-minded people who will not recognise that the Government have leant over backwards to try to be fair to those least well off. The provisions to meet anomalies and those for unsocial conditions are examples. Genuine attempts have been made, too, to introduce more flexibility. I realise, as the noble Baroness, Lady Seear, has mentioned, that that has dangers in itself. I believe that is essential, if Phase 3, as I would expect, is either to last quite a long time or to be followed in due course by a Phase 4. Lack of flexibility, if a phase like this were to go on for very long, might prove the Achilles heel, because on the wages side rigid rules tend to freeze existing differentials—a fatal weakness in the long run. On the prices side, rigidity again discourages change, innovation, efficiency and enterprise.
The noble Lord, Lord Diamond, seemed to think that current profits were too high in the aggregate. I wonder whether that is so. I want to say only two things on profits. The first is that it is generally accepted that a healthy level of industrial investment cannot be reconciled with inadequate profit levels for efficient businesses, particularly in times of continuing inflation. Indeed, I think that our traditional orthodox arithmetical computation of profits is increasingly misleading; and the sooner our talented accountants, such as the noble Lord, Lord Diamond, get down to devising an acceptable system of inflation accounting, the better. I am sure that we would give the noble Lord leave of absence for a reasonable time in order that he should apply his great mind to that problem. I agree with what my noble friend Lord Orr-Ewing said on that subject in the recent debate.
LORD DIAMOND: My Lords, I am grateful to the noble Viscount for his invitation which, after careful consideration, I do not think I can accept. The awkward part about his argument about profits being needed for investment—which I entirely accept and have freely
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stated many times—is that the profits I gave were an example of the profits made, and comparing that second quarter with the same quarter in the previous year the rate of investment is almost identical: it has neither gone up nor down. The profits which are needed for investment have been made but have not been used for investment.
VISCOUNT AMORY: My Lords, there is a great deal that one could say on that subject, and I know how difficult it is to generalise about profits. That emphasises the importance of the Price Commission here, who will have a considerable say in at any rate future profits.
One other thing that I should like to say about profits is that I personally am sorry that the Government have been unable to devise some appropriate antidote to the vast and damaging capital profits that have been derived, as a result of inflation, from land and buildings. I am aware of the difficulties, and notably the risk of making land for development still scarcer. Such profits are mainly the result of inflation, but they themselves aggravate inflation, too. Land prices recently have hit levels which make the cost of housing impossible. If the market does not quickly bring land prices down, the Government will be forced to intervene, because this is one of the most damaging consequences of inflation.
The third requirement is that Phase 3 should be effective as a disinflationary measure. Certainly the Government seem to have gone as far as they conceivably could to make the scheme as liberal as possible without jeopardising its main objective; nor, surely, are they wrong to do so. The criterion here, to coin a phrase, is "the art of the possible". It is no use introducing a major scheme like this if it is to be unacceptable to public opinion at large. Indeed, its success will depend on that very factor. Having admitted that, I must concede that the margin of effectiveness as a disinflationary measure looks like being fairly narrow over the next year but, though modest, most worth while if it can be achieved. Indeed, I believe that it is crucial to success in the battle against inflation. It may at any rate keep down our rate of inflation to the level of our main international competitors.

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I want to refer in a sentence or two to only two of the detailed provisions. The proposal to allow supplementary increases in incomes if the rise in the cost of living exceeds a datum figure—what is called generally a threshold agreement —is, in theory, a dangerous expedient because it has in it an element of built-in inflation. Nevertheless, if we are realistic, it seems necessary for it to be a component of a successful scheme in present circumstances, and therefore it is to be welcomed. Secondly, the provision for productivity agreements has been cautiously framed, and this, I expect, is because there is some bitter past experience of so-called productivity agreements which did not result in increased productivity and may have been only façades. The result, if I have read the Order right, is that there is to be a limit of £1·12p, or 3½ per cent. The question I should like to ask my noble friend is: may not this low limit frustrate many genuine schemes of this nature? The provision lays down that the benefits can accrue only when a particular scheme has proved that it is effective. But with this proviso, if that does happen, then the larger the payment the greater the disinflationary benefit. I recognise the point that my noble friend Lord Drumalbyn made: that big payments for productivity schemes covering some workers are apt to produce tensions with other workers who may not have the same opportunity, but one wonders whether many useful schemes may not prove to be unobtainable by negotiation with such relatively low limits.
Taken as a whole—I am horrified to realise the time I have spoken—Phase 3 seems to me right in shape and pattern. The monitoring and the policing will bring formidable problems. The choice before us as a nation is whether we are prepared to accept a reasonable measure of restraint as the price of wider liberties and the avoidance of economic social disaster. I liked the note on which the noble Lord, Lord Champion, ended his speech in our debate on the emergency powers the other day. Phase 3 thoroughly deserves the support of public opinion at large, and it is on that support that its success depends.
8.39 p.m.
LORD KAHN: My Lords, I submit that it is a tragedy that the subject of
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today's debate is a matter of political controversy. The economic position of the country is too grave for serious examination of the Government's policy to be conducted without a bare minimum of regard to Party politics. In saying this, I am referring to the speech of the noble Lord, Lord Diamond, and not to the eloquent speech of the noble Baroness, Lady Seear.
With reference to the noble Lord's speech, it seems to me that the figures quoted by him from the E.E.C. document are a remarkable tribute to the efficacy of the Government's incomes policy. Apparently it has resulted in the country's competitive position being maintained. That is precisely one of the objects of the policy. In the absence of such a policy, our competitive position would have been very different because earnings would have risen much more rapidly.
The Opposition attack the Government for continuing statutory control, not only over the behaviour of prices but also over the behaviour of wages and other incomes. If only prices were controlled, what would happen? The idea seems to be that if profits were squeezed heavily employers would offer strong resistance to wage demands with which they were confronted. The hope of members of the Opposition seems to be that this would result in a restraint of the rate of increase of wages. No doubt it would; but at what a price! The mechanism would be industrial strife. The modus operandi would very largely take the form of provocation of industrial disputes, leading to strikes.
Free-for-all wage negotiations would mean that once again we should have a process of leapfrogging, the leaders of labour in each sector trying to push up the wages in their sector more rapidly than wages were rising in other parts of the economy. If profits were heavily squeezed and there was persistent pressure for higher wages, and if strikes became the order of the day, the confidence of industrialists would be undermined, and the upward movement of productive investment, on which noble Lords have commented, as well as the upward movement of the standard of living, would have to be abandoned. In fact, the Government have imposed some limitation on the growth of profits, and will continue

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to do so in Stage 3. The argument for a more severe limitation on the growth of profits would be stronger if dividends were uncontrolled, but dividends have been controlled and will continue to be controlled; and over a very wide range and within very wide limits dividends are going to depend on the Government's statutory control of dividends, rather than on the behaviour of profits.
There are a number of features in the Government's policy, as presented in the Order which lies on the Table of your Lordships' House, which strongly appeal to me. I refrain from spending time on some of the features already emphasised by the noble Lord, Lord Drumalbyn, and the noble Viscount who has just resumed his seat. The objectives are highly realistic, and there is a quite good chance of their being attained. A reasonable degree of success will facilitate further progress in decelerating the rate of inflation. I am impressed by the fact that the statutory backing for the Government's policy is continued right into Stage 3. The Order which is the subject of this debate is complicated, but the complications are fully justified. To my mind, too, the complications reflect a real seriousness of purpose. Also, they make it so much easier for Government policy to be interpreted by those bodies and individuals who take a part in determining the behaviour of prices, incomes and profits.
The provision for productivity agreements is limited and strict under the head of efficiency payment schemes. When productivity agreements were first introduced in the middle of the 1960s, those of us who foresaw the difficulties in which they would involve the country were assured that the complications of negotiating a productivity agreement were so great that the number of such agreements that could be introduced in any one year would be very small. In fact, the number of such agreements and the extent of the wage increases in which they have resulted has turned out to be large. This was an important reason for the failure of the previous Government's incomes policy. The country was moving towards a position in which, instead of the rate of increase of earnings being related to the average growth of productivity over the country as a whole, there was a tendency for the rate of
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increase of earnings to be related to the rate of growth of productivity in the high-growth industries; and that is the complete negation of an incomes policy. On this issue, and on other issues, I agree with the noble Viscount who has just resumed his seat, but I fear that on this issue and on most of the other issues on which she commented I cannot agree with the noble Baroness, Lady Seear, in spite of her eloquence. I should like to say in passing, as I am commenting on the noble Baroness's speech, that I entirely agree with her that greater equality of earnings is far better achieved by fiscal policy than by incomes and prices policy.
The Government recognise that under the operation of their incomes policy the wage structure, the pattern of differentials between different industries and different kinds of labour, has become extremely ragged. When the previous Government introduced the standstill of July, 1966, the pattern of the wage structure was in reasonable shape and the gross result was that the standstill caused very little bitterness. In fact, in many quarters, it was regarded as extremely fair. But the introduction by the present Government of the standstill came at a time when the pattern of the wage structure was extremely ragged, and gross inequities prevailed. The reason was that the operation of the laws of the jungle had resulted in a situation in which in some sectors the wage-earners had just received very large wage increases while those in other sectors had received much smaller increases at a much earlier date, sometimes more than twelve months earlier. The Code makes provision for the correction of anomalies. Moreover, as your Lordships have heard, the Pay Board are to present a report on this problem, it is hoped by the end of this year. There is the extremely awkward problem created by the fact that in many industries wage increases are negotiated at so many different levels: the national level, company level, establishment level and shop floor level. The problem is dealt with in the Code.
I feel that I have made it sufficiently clear to your Lordships' House that I cannot refrain from indicating my support for an Order which is designed to continue the attack on the problem of

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inflation without involving the danger of a return from a counter-inflation policy supported by statutory instruments to the sporadic vagaries of "Stop-Go".
8.50 p.m.
LORD FISKE: My Lords, I hope at this late hour to keep my remarks brief, because I think that after the many learned contributions we have had it is not necessary to go into the exact causes of inflation or even into whether the Government are or are not responsible. I merely want, if I may, to illustrate to your Lordships the effect of ore piece of inflation which I put fairly and squarely as the Government's responsibility and relate it to the effects it has had on our great capital city of London. We know that throughout all these negotiations on inflation and wage control and price control the Government have refused to do anything about the Housing Finance Act and the many regulations made under it—with the result that on October 1 the tenants of councils had to bear a rent increase of 50p per week. If my arithmetic is correct, 50p a week is 2 per cent., two points, on the income of a man who earns £25 a week or one point on the income of a man earning £50 a week. I think that calculation is correct and it represents that rise on that count alone. I should like to ask first of all whether that 1 per cent. or 2 per cent. increase in what we shall call the cost of living is included in the figure of 3·2 that was announced the other day or whether it gets lost somewhere on the way.
That is not the only thing that is happening; the Housing Finance Act went much further. In my daily life I meet cases of rent increases which are running in some parts of London up to as much as 250 per cent. Even if these increases are to be borne by people who can afford them—although many of them, I know, cannot and are having to move—they represent an enormous inflationary burden at a time when we are trying to control inflation. Was it really necessary for the Government to inflict this little bit of inflationary pressure at this particular time? I should like to hear Lord Drumalbyn's comments on those remarks.
While that is happening we have heard in the Press and have personal experience of the great distress that is now
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affecting London's many services. The service requirements of a city like London include transport, the police, teachers, ambulance drivers and dustmen, and there is a very long list of service people who tend to be at the lower end of the earnings scale. We know that the Government have said that they are trying to help the lower-paid workers, and Lord Drumalbyn in his remarks earlier this evening said that there is a Committee looking at what is called "London weighting". That is the expression we always used in County Hall. London weighting is something that already exists in certain fields. I think it exists for the police and certainly for the teachers. Ten years ago it was about £36 a year; now it is about £120 and I believe that the teachers are asking for £300. This is the sort of figure that is necessary if teachers are to compete on equal terms with the rest of the people in London for housing accommodation. This is where they cannot compete, so that while they would wish to come into the London services and live in the capital they are forced to go to other parts of the country where there is also a great demand for teachers. We shall not get the services of London right until the London weighting allowances are settled.
I should like to impress on the noble Lord the need to bring some pressure on the Committee that is considering these matters to conclude its considerations of the problem at the earliest possible moment, because it really is urgent. We know of the numbers of children who are not able to go to school: we know of the great shortage of bus drivers and conductors. They have all to be provided for somewhere near their place of work. A bus driver who is expected to be on duty at 6 o'clock on a wintry morning probably has more right than anyone to live near his place of work.
I must say I sometimes wish that those bodies of workers who are usually vigorous and well-informed bodies of the community would use their own resources through the voluntary housing movement. I should like to ask the noble Lord, Lord Drumalbyn, whether he would consider encouraging this. I think that many of the services—and I am thinking of transport—could throw up parcels of land on which a voluntary movement consisting of the management and the workers in the industry could

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easily erect some housing for their own occupation. This would be some contribution in addition to that made by the public authority. The public authority's directive is to provide for the general needs of the population and not for sectional interests. It must use great discretion if it wants to depart from that directive. Until these things are put right, we are threatened with a crisis situation in the services of London. It is true of other cities as well but it is more noticeable in London because of its size and population. We might ask —I think the planning point here is worth looking at—why it happens that London is not a more balanced community, because we find that London is tending to become a city of the wealthy and a city of the very poor.
This, I think, is happening as a result of a deliberate planning policy, which has been running ever since the end of the war, that there should be decentralisation from the centre of large cities of population of work, and therefore of industry. If an industry moves out of the centre of London, as many industries have done, to a new and expanded town within a 50 to 60 mile radius of London, it will want to take all its skilled workers; and the new or expanded town will re-house those workers in the new area. However, this still leaves the unskilled workers who can be recruited locally, thus relieving the pressure on the new housing being provided in the new town.
The result is that we are tending to get, one would have thought, almost a surfeit of service workers in the centre of London and no skilled workers; and this was what was happening until we reached the state of full employment which has now arrived. Now we find that all the unskilled workers, and such skilled workers as remain in the services, particularly in transport and teaching, are also being absorbed in better paid jobs further from the centre. So London itself is indeed in need of rescuing from all these operations, and I think that Phase 3 will not give all the help necessary unless this London weighting is looked at very carefully and brought into some quick way of implementation.
9.1 p.m.
LORD ALPORT: My Lords, I should like to begin by joining my noble friend
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Lord Amory and the noble Lord, Lord Diamond, in saying how much I deplore the fact that this debate is taking place at this time of night. That is not because it gives me a feeling of guilt at inflicting my views on your Lordships at this time, but because it seems to me that the arrangement of our Order Paper so as to give safety in sports grounds priority over the debate on this Order shows that the attitude of this House to the problems of the country is bordering on the frivolous. In the latter days of the Roman Empire, my Lords, the authorities equated bread and circuses. Now, apparently, circuses take priority here. I think that the noble Lord the Leader of the House should consider whether it is in the interest of the House or the Government that this arrangement should be made.
My Lords, it may not of course matter whether we debate this Order or not. If I heard my right honourable friend the Prime Minister aright when he appeared on television the other night, he stated that Stage 3 had already had Parliamentary approval. It may well be, and indeed in our heart of hearts we know, that to a large degree we are going through a formality; at any rate, we have no power to affect the decisions of the Executive. But in your Lordships' House we still enjoy, at any rate for the time being, the right freely to voice our views —if anyone can be bothered to listen to them.
I said on a previous occasion that if any Government aspires to get its economics right it must first get its politics right. By that, I mean that if it wants to govern along certain lines it must know how to cause people to obey because they have confidence in its policy. It must be able to mobilise in support of those policies what I could call the x-factor in human nature, which enables ordinary men and women for a period of time to subordinate self and sectional interests to the national interest, and willingly undergo hardship and deprivation in order to obtain an agreed objective for the country as a whole. In any community there will always be "spivs" and shirkers, and weak and evil people, but this country, above all in Europe, and perhaps in the world, has a greater reserve

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of what I call the x-factor than any other. We have shown that on many occasions in the past.
I suggest to your Lordships—and you may think that I am exaggerating—that our position to-day is different, but no less dangerous, than it was during those emergency periods in the earlier part of this century. I realise that anyone who ventures such views is immediately dismissed by Ministers as a coward or a defeatist. If he is a distinguished public servant, like Lord Rothschild, he is told peremptorily to hold his tongue, or if he is an ordinary person, he is put under sedation by another speech from Mr. Walker. But, my Lords, there are too many wise, experienced and objective-minded men who share my apprehension for me to feel guilty of being merely an alarmist.
Of course it is true that this country can win through to better and more secure times. Of course there are a number of favourable facts which my noble friend Lord Drumalbyn included in his speech; but it does not mean that we shall win through unless we can manage our affairs with exemplary skill and restraint during these next few years. It is no coincidence, my Lords, that we have had four States of Emergency since 1970. In my view, the country is in a very real sense in a continuing state of emergency. The reasons are very simple and are known to all in your Lordships' House. They are that the foundations of the industrial society of the 19th and 20th centuries upon which the prosperity and livelihood of the people of this country was based—that is to say, abundant and easily accessible raw materials, an unchallenged superiority of technical skill and industrial know-how, cheap food, protected imperial markets and worldwide prestige—have all largely disappeared. Yet the political postures of the great Parties and the organisation and the attitude of management and workers to each other and to the community have, in general terms, hardly changed at all.
My Lords, it is just as depressing to me to have read so very recently about the Conservative Party's flirtation with the Selsdon man—as antediluvian as the
1028
Piltdown Man and just as bogus—as it is to see the Labour Party at Blackpool falling increasingly under the influence of the Left, led by an ex-Member of your Lordships' House, or at any rate an ex-Peer, Lord Stansgate, who seems for the Socialists to double the roles of the Ancient Mariner and the Albatross. It is equally depressing to see the attitudes of management and workers in industry to each other and the organisation of industry continuing to reproduce features which, in my view, are irrelevant to Britain to-day. It is just as worrying that the Government seem to believe, as we have seen from the policies which are being propounded both in this Order and in the speeches we have listened to during the last few days, that the manipulation of interest rates, on the one hand, and the straitjacketing of wages and prices, on the other, are sufficient to solve, or control, the basic economic problems of contemporary Britain. What I fear is this: that the temporary success of this Order, of Phase 3, a slight recovery on the Stock Exchange, a decline next month in the deficit of our balance of trade, some lessening of tension in the Middle East, and Christmas, will cause us all to consider that our problems are moving towards solution.
My Lords, I was reading this last week-end the life of Lord Keynes—I did not realise that we should have a contribution from the noble Lord, Lord Kahn, this evening. I wonder what advice he would have given us in the present circumstances. I cannot believe that the advice would be easy for us to accept or carry out, but I am absolutely sure it would be very direct. It is no good trying to speculate on that now, I suppose. I can only say what I think should be done, and I do so with all the diffidence that is right for somebody who is not an economist or industrialist or professor—or an ex-Chancellor of the Exchequer—in the presence of those who are better qualified than I am to pronounce it. But I believe the first thing that is essential, the first move towards stopping "Stop-Go", which seems to be one of the inevitable features of a delicately balanced economy in the present world, is an immediate and significant cut in Government expenditure and an increase in taxation on a selective basis.

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I think we should consider a differential lending rate between certain categories of industrial borrowing as against consumer credit. We may have to consider a differential interest rate between foreign lenders and domestic lenders. I think we shall have to consider a degree of control over imports. I am sure there should be a new relationship between the banks on one side, and industry on the other, more on the lines of the German pattern. I think there should be a new system of rationalisation of industry and economic activity less dependent, as my noble friend Lord Amory said, on fortuitous Stock Exchange situations and take-over bids. I hope that these things, whether we like them or not, will be considered; I believe that they will be inevitable. I am, and I admit it frankly, advocating an attempt to manage our economy and our industrial development more closely than is acceptable to the present Government and along principles which are different from those advocated by the Labour Opposition.
I suggest, my Lords, that we must establish clear priorities for investment in those industries most likely to enable 50 million people in this country to earn a living in the next 30 years. This involves concentrating resources on the provision of energy, raw materials and the skills required. It may not face us with a choice between "guns or butter"; we may not have to drink ersatz coffee; but it may involve, I suggest, a choice between investing in and concentrating on manufacturing very high quality engineering goods needing limited raw materials and high skill rather than, as is the position at the present day, producing far too many heavy engineering goods requiring massive raw materials and low skills. We have lost, my Lords, behind the Japanese and the Germans and others, what we thought, at the end of the war, was going to be the real secret of our industrial success, which was our technological advantage, and we are losing it year by year as things stand at the present moment.
All of this may include the provision of considerable wage differentials between workers producing, say, energy—that is to say, miners and electricity workers—and those, let us say, working in toffee factories and betting shops. The whole philosophy of this, and indeed the whole
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philosophy of the speeches that I have listened to from many quarters this evening, has been equating wages, equalising wages. I suggest that that is a wrong approach to the real solution of the problems with which we as a nation are faced. It may involve supporting the further development of some highly complicated, expensive no doubt, but important technological advance like Concorde as against the abandonment of a project like Maplin or the Channel Tunnel.
I would suggest to your Lordships that it will involve other things, as well, including the recasting of this Order which we are now being asked to approve, because, as I said a few minutes ago, the philosophy of this Order is to control the remuneration—that is, the rewards of individuals—right across the board, and to a large extent provide a bracket of increase which will produce at the end greater equalisation. It makes no distinction between the values placed on the contribution of one group of workers in the national interest as against another. And because, as I realise, it is difficult to do this fairly in accordance with, at any rate, the criteria accepted at the present moment, this Order avoids doing it at all. I can understand the politics of it, but I do not agree with the policies.
Secondly, my Lords, I believe it will involve a reassessment of Government expenditure as between the industrial and social fields. There are many things which are eminently socially desirable, but which cannot be provided by the Government at the expense of investment in projects having economic priority. If communities—London, for instance—want such things (and this seems to me to have, at any rate, a slight, but I hope a real connection with what the noble Lord, Lord Fiske, said) they must find means to finance them wholly or in part from private or community resources.
Thirdly, my Lords, it will involve—and I say something which I know is not readily acceptable to many of your Lordships—a degree of central control and planning comparable with the control and planning needed to win a great war. This does not mean changes in ownership. It represents the antithesis of some of the views put forward by members of my own Party. It need not mean that the powers involved must in all cases be exercised by the Government. But it does mean

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a change in our methods of providing and channelling the flow of investments into industry and into the related economic activities. It will involve restrictions on personal freedom. It will mean, above all, I suggest to your Lordships, a much closer relationship between the Government and the City, the sensitive financial centre of the country, and industry. It will also mean the abandonment of some of the established attitudes of civil servants, bankers and company managements to their respective roles in the British economic system. I know that your Lordships will accuse me of wanting changes which might be regarded as being impracticable. I am not saying whether they are practical or not I am saying that, in my view, these are the prerequisites of this country getting through the period ahead of us, where we are in the very greatest danger.
I make no attempt to find parallels for our position with the Japanese, the French or anyone else. It is possible—and this we can perhaps take to encourage us—that the crisis which we face in this country, with our limited resources, is similar to the crises which other highly industrialised nations, East and West, will face during the next half century. Perhaps in the end looking back on this (those of us who are still alive) we shall feel that instead of trailing behind these other countries, as we appear to do to some extent now, we shall be blazing a new trail for them which they will be glad in their turn to follow when they face problems similar to ours.
Perhaps this is a revolutionary era—and it is one that we must endure. Be that as it may, I come back to the point that I made earlier on. The prerequisite, in my view, of any success in carrying through remedial policies is the adoption of a new approach to the practice of politics and the style of government on the part of both the Conservative and the Labour Parties. I think that Mr. Jenkins was edging his way towards this in his Wolverhampton speech. I know that there are many thoughtful Conservatives who would like to do likewise. I am certain that the voting patterns of recent elections mean that the majority of the nation are no longer content with the old-style auction for votes and the
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sterilities of the personal and Party confrontation in Parliament.
What we in this country have to do is so difficult that we cannot afford the luxury of faction. I sometimes wonder how things would have turned out if Mr. Hugh Gaitskell and Mr. Iain Macleod had lived. But it is no good speculating on the tragedies of mortality. If this ancient land, which so recently dominated a quarter of the world, cannot produce from its existing resources the qualities of leadership, the willpower and the dynamism necessary to-day to solve its domestic problems, and to give to its peoples a New Deal, then our future is dark indeed.
I use the well-worn term "New Deal" purposely. It takes us back to the springtime of my generation when we were in an even greater crisis receiving inspiration and support from the policies of Roosevelt's United States. I fear that this is unlikely to be forthcoming now. The American Imperial system seems to have reached the reign of Caligula without having enjoyed the age of Augustus. We British, in spite of Europe, are on our own. That is a situation which has hitherto brought out the best in our nation. If obstinacy or arrogance on the part of the leadership of any Party appears likely to stand between us and our world, that leadership must be changed. It may well be, my Lords, that the time for that change in both the great Parties of the State is nearer than many people realise.
9.22 p.m.
LORD HALE: My Lords, your Lordships have listened to such a high proportion of very great speeches tonight that it would be impertinent of me to try to comment on them. I would not try to comment on the speech which has just been made, which was obviously one of high courage and sincerity. I agreed with some of it and did not agree with other parts. But most of it I should like the opportunity of reading tomorrow, and being able to consider carefully. It seems to me that it is perhaps not impertinent to pick out one contribution, because there was something of importance—and I think I might say also something missing—in the speech of the noble Viscount Lord Amory. I mention the noble Viscount because, although I much dislike the term "public relations" and always

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regard it with a certain dubiety, thinking of it in an organised sense, there is something appallingly wrong with this Government's public relations. Why do they want to quarrel with the miners, for example?
THE EARL OF GOWRIE: We do not, my Lords!
LORD HALE: Why do they seem to want to quarrel with organised labour? Why do they insist on keeping this wretched Industrial Relations Court? No one here could really quote any decisions of importance coming from it. I make no attack on Mr. Justice Donaldson. No doubt he is a man of great ability; he was asked to do a job and he has performed it. But nobody could have £75,000 worth of contempt for a Court like that. It is a falsification of terms.
In the same way (I particularly want to say this, and nobody has ever accused me of being priggish; indeed, I have usually posed as being a bigger sinner than I am), we must get back to a sense of public honesty. I rather suspect that the last speaker had something of that in mind. We should stop a little of the charade. If we are going to give up anything, we should cease the use of verbiage for the purpose of deceit and try to state a few facts. The noble Lord, Lord Diamond, did this. He put some extremely critical facts. I was a little shocked to hear him say that we should be discussing a situation like this as late as the hour to which he referred. I came here today rather thinking we might be talking all night, and I think we ought to be talking all night. If you are a Member of this place you should have some respect for it, and if you are to have respect for it you should not say, "Of course we can dispose of these matters; it is very rare for us to talk at length on a State of Emergency, even the fifth in two years".
It is just twelve months since I raised the first debate that I was permitted to raise in this House. I talked about the problem of old-age pensioners, and there are many others who can speak with more authority on that subject. I talked about the problems of the petit rentier. I recall not so many years ago, 15 years, at a guess, a Tory Minister, a Member of this House, who enjoyed almost universal respect saying, to our delight, "In 25 years we shall double the standard of living of the whole of the population." Where has it gone?
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What has gone wrong? I am not one of those who rub shoulders with Prime Ministers, although many have been courteous to me. But so far as the present Prime Minister is concerned he is invariably courteous, he is invariably informative and he has invariably been friendly. Personally I like him. But I remember someone saying in a most friendly way—and I hope I may speak colloquially: "The odd thing about Ted is that when he says something he thinks he has done something. When he signs a preliminary agreement to a preparatory agreement to a final agreement to a definitive agreement for the Channel Tunnel, he thinks the chaps have started digging." I have detected in recent times some of the qualities of the coelacanth. I expect the noble Earl, who appears puzzled, knows it in the more classic title of Melania Anjoauni. As a poet he ought to know that there is a poem about it, too. I will not trouble your Lordships with it to-night but I can refer him to it if he wants it.
Now the Government are running into a conflict with the miners who are deserting the mines in thousands for better opportunities. Six hundred miners are leaving the pits every week, at a time when economists are saying, "All Governments have made an awful bloomer. We have cut down our greatest assets." I can remember, if the noble and learned Lord who is not sitting in the Chamber at the moment will forgive me for saying so, when we suggested we should pack that invisible object, the Woolsack with coal rather than wool which became rather out of fashion as a British industry. Why do we do it? I was going to say to the noble Viscount, Lord Amory, that he has his own public relations. No man has enjoyed higher respect on the Tory Benches in the House of Commons. He was one of a very limited number who spoke not merely with authority but with a patent sincerity and a desire to be accurate. We ought to get back to that.
The debate which I raised 12 months ago was a question of the situation of the petit rentier who does not seem to be mentioned here at all. Every time I mention him Ministers say, "We have this in mind. This is under constant consideration; we do not leave any avenue unexplored and no stone is left unturned

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to do what we can for the petit rentier, whoever he may be ". What is being done? He is being twisted in every conceivable way possible. I will give your Lordships the facts. When I built my house the contract was for £625, and I received a £150 subsidy from the local rural council. I borrowed £525 from a building society. I spent £80 on a well, £12 on a fence and £80 on the land, and whatever that may add up to it meant that I had not to take out of my pocket any of the limited funds which I wanted to spend on furniture. I had nearly £130 to spend on furniture—a lot of money in those days. Interest on the mortgage was 5 or 5½ per cent.—I think 5 per cent. The instalments were just over £1 a week and it was paid off in 13½ years—both capital and interest. Those were the figures then, and it was not a specially favourable period, either.
What are the figures now? The unfortunate man who buys his own house—and the Government said they were in favour of a property-owning democracy—, not only has to pay 4, 5, 6 or 7 times as much, but he has to pay interest from 10½ to 11 per cent. I am told on the tape to-day that bank rate figures are 14½ per cent., and the interest rates keep going up; so it takes him now not merely 7, 8 or 9 times as much in instalments but he has to pay it year after year until some tragedy comes along, some long illness perhaps, when he has a fair chance of seeing his house disappear.
I raised the question of 3½ per cent. War Loan. The debate was replied to by the noble Lord, Lord Aberdare, who spoke with all his usual courtesy and without giving much information—obviously it was not a matter on which he could give any assurances, and I never expected he could. Remember that 3½ per cent. War Loan does not go back to the First War but only to 1932. The figure I was given then was that the value of the total issue of nearly £2,000 million War Loan was, in March, 1972, £802 million, and on September 18 when I put the Question down £706 million. If you transmuted those figures into figures adjusted to the cost of living, the chap who put £1 in 3½ per cent. War Loan in 1932 had then got 7·14 current pence in value for it. I do not suggest that the
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noble Lord could give any assurances, but he did look benevolently on the matter and say that one hoped things would improve. But they have not improved. A series of swindles have been perpetrated —which I am happy to say someone else said first (I was going to say it)—which should really mean that the Bank of England and Her Majesty's Ministers should be indicted at the Old Bailey on a charge of conspiracy to defraud.
We have passed long Acts and had long debates even till late at night, on the question whether Heinz should shove a bit of pork in their beans to keep within the law against misrepresentation, but we keep on advertising shares when we know it is a "twister", we know it is a swindle, and we know it will go on being a swindle. But the present Government came along and said, "We will pay 9½ per cent. on our loan." Now it stands at £83 per £100. They issued only a day or two before the crisis—I think it was a tap stock—stock at 10½, per cent. It went down four points last Tuesday. The man who has his mortgage, if out of work for a time without full insurance, is forced to sell these things at that price in order to keep the roof over his head. And if he dies, as he will, his stock, if he has any left, will be worth a few pounds. But under the existing law, which the "property-owning democracy" people have not altered, his house will be valued on the basis of its value with vacant possession, and his estate will be liable to estate duty, not only on its present inflated value but on a specially inflated value for estate duty purposes, which assumes that his son and daughter are not in the house and will not live in the house and do not desire to live in the house and ought to be chucked out. This is quite appalling.
If you want to win the confidence of the miners you must stretch just a little further on this and have control of profits. I give a single example of what happens. The other day I put down a Question about tax evasion. The Answer, with something like an amiable giggle, was: "We have not any particulars of the British people who go abroad with £200 million or £100 million." Heaven knows!, I do not want to penalise the people who go to Malta to a small bungalow for a bit of sunshine. But the Government say, "We have not got the

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figures." About two days later the Chancellor of the Exchequer told us that if we divided all the incomes in the country as suggested, based on figures from the Labour Party Conference, it would not amount to more than a penn'orth of cheese to anybody. But how can you divide the figures if you do not have them? It is like a letter I received last week from a lady who said I was complaining that I had not received a magazine, so would I send her the container in which it was enclosed so that she could have the reference number. I had not had the magazine; I had not had the container.
I want to be very serious to-day. I had hoped to say one single word about my bankers' sudden passion for art. It is 48 years since I first opened an account with Lloyds and our relations have been very friendly. Since then, I can say, they have never looked back, and I have never made any money. But it was a little surprising yesterday to see them with a passion for art. T could not understand whether they had chosen a "drop-out" from West Point who was an undischarged bankrupt, who borrowed his money from all and sundry and his wit from Degas, who quarrelled with everybody, and finally filed his petition on the ground of moral merit—which would seem rather ridiculous—or whether they had selected the man because they appreciated his painting, in which case they would not have reproduced a painting of that merit and value on the very thin paper of The Times with print on the other side. It was not very well chosen. I used to think, not of Jimmy Whistler's "Nocturne in Blue and Gold" but of his arrangement in grey and black, which is better known as, "The Portrait of His Mother", which represented something of value and something one could respect, something of peace, of quiet acceptance of the scheme of things, of a determination to do no harm to anyone. Such people are still there—you can find them in Oldham.
To-day Mr. Levin emerged again, this time speaking with all the freedom of The Times and lashing out at the policy that The Times has pursued, with all the effectiveness of a very brilliant pen. He said that the Common Market is the oddest thing in the world because the members never seem to agree about anything.
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I spent a great deal of time trying to find out the position about the Common Market when I came back to this House. In the end I came to the conclusion that it did not exist; and this of course is the truth. I do not regard that as necessarily a defect. There are wonderful agreements, there is a lot of stuff on paper, the plans are all made, but of course General de Gaulle chucked them in the waste paper basket. No one has ever taken any notice of a decision of the European Court, unless on the whole for general reasons it paid them to. Nobody observes the regulations.
If it does not sound like coming from the sublime to the ridiculous, I should like to mention the subject of Italian tomatoes. They at least give the clearest indication of the position that I have seen so far. Your Lordships will remember that Italian canned tomatoes are of very great value, and for those of us who cook our own breakfasts they make an admirable supplement to the breakfast when you have some bacon, and a possible substitute in these days when you have not. Also they are not very hard on the washing up and they are a reasonable price. In 1972 about 113,000 tons of them slipped down our collective throat and 80,000 tons of these came from Italy-30 per cent. more than the year before. But it is said now that the fresh terms value them rather more than apricots, peaches or even rubies. They have been about 6p for a 14 oz. can; the price has been rising to 10p or 11p, and this alarming increase is not due to meterological conditions, says the writer, with some sardonic recollections of the Prime Minister's general excuses. The Italians say: "We can sell these things anywhere now. We are not going to abide by our contracts. Why should we? You do not abide by yours; you devalued the pound and put all the figures against us. You can take them or leave them, and if you do not take them, it does not matter".
That is how the Common Market works. What can we do about it? The retailers in this country have approached the Government for advice and they have been told to take it to the European Court. But of course the European Court never decides anything if it can avoid it. It first gives consultative advice and then reviews, and so on, and so we

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get a situation in which there is no commercial morality; there is no comon interest. Even the very regulations that the noble Lord has referred to to-night may infringe the rules of the Community and may be called in question.
The other day I remember the noble Lord, Lord Boothby, raised the question of gold, and when I heard the news about gold and the new arrangements I thought that it sounded as though something really important had been done. All the countries met and decided to deal with the hidden gold in the world and did not even ask for a certificate from the White House to say that it was still there. Now we are told that it was simply an arrangement for France to be able to pay her debts to Germany at half price. She can pay them in gold at 90 instead of paying them in gold at 45. This sort of cynicism in our life is the first thing that must end. The Prime Minister could win the support and the hearts of the miners if he tried to-day. No community has ever sacrificed more for the common interest; no community, except the textile workers in Oldham, has been so strike-free in the last 30 years.
My Lords, I have exceeded my time. I have not finished my speech but I will sit down, having said one or two of the things that I intended to say, and with the firm intention of saying the others if and when a subject arises on which I can keep them in order.
9.45 p.m.
THE EARL OF GOWRIE: My Lords, in effect this has been the third debate on the economy since Parliament resumed and the fourth in four weeks. This is an heroic, even Wagnerian achievement, especially at this hour, but I doubt whether noble Lords will expect to hear Gotterdammerung from me. On the contrary, sensible as we are of criticisms from all parts of the House, we do believe that the Government's policy is the only coherent policy for containing inflation while sustaining expansion which is on offer to Parliament and the nation. I am glad that my noble friend. Lord Amory backed me in this. This evening we have debated No. 2 Order of the Counter Inflation (Price and Pay Code) 1973, but I hope noble Lords will allow me to refer to it in the terms by which
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we have come to know it, if not to love it—Stage 3.
I believe that the four debates provided valuable and coherent criticism of the Government's policies, markedly coherent in contrast to criticisms made in another place. We have in a very genuine sense listened to them. May I say quickly, even if I have to say it with masochistic glee, how much I welcomed back the noble Lord, Lord Diamond, if not as a Whip, for he has suffered no demotion, at least as a scourge? I do not believe that anything said in this area should shake the Government in their determination to fight inflation with controls that are fair and flexible and without bringing our hard-won expansion to a halt. In this last case especially, all the signs are that we can sustain growth at a sensible level of between 3 and 4 per cent., that we can achieve and maintain a high level of employment, and that we can believe the expansion has brought about the last three years' improvement in the overall welfare of our people—inflationary troubles (and I know they are legion) notwithstanding. With that said, my figures allow me to be firm. I must turn to the criticisms of the Government and the points made in the debate.
As I said earlier, while I welcome back the noble Lord, Lord Diamond, I have to confess a little disappointment with his speech. I expected it to be critical, but also I expected it in the wider sense of the word to be helpful. Certainly I could hear no suggestions in it except to hold down prices. He did not go quite so far as to suggest subsidies and the redistribution of income from the rich to the poor. I do think it is misleading, both to the House and to the country, to think in terms of there being a fund of money available to the rich which can ease the lot of the rest of us if only it were redistributed. I refer the noble Lord to the fountain of wisdom, whatever other remarks we make of him, of the Leader of his Party when he talked about one man's wage claim being another man's price increase.
In spite of the overall slight disappoint-merit that I felt with the speech of the noble Lord, Lord Diamond, he did make substantive points which I shall now try to take up. The noble Lord made the point about justice and fairness. We

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agree that a prices policy cannot work unless it is fair and seen to be fair. He was critical of our treatment of the lower-paid. We find merit that married couples with earnings about half the average industrial wage have enjoyed an increase in real net income of an annual rate of about 4½ per cent. since June, 1970, compared with 2½ per cent. under the previous Administration.
The Government's tax policies have, therefore, helped almost to double the improvement in the living standards of the lower paid. It is conventional at this point, and, conventional as it is, I mean it, to say that we are not complacent about this matter. We want to continue with the work, and that of course, is the theme of expansion plus the containment of inflation. We find, too, that the increase in real take-home pay of a man on average earnings with two young children has been over 3 per cent. a year since June, 1970, compared with 0·7 per cent. a year under the previous Administration. That is an extra £2·30 a week to that family. I think that that is a significant achievement.
Lord Diamond, I think rather eccentrically, demanded that we should give justification for wage control. I think I am happily let out of such a herculean task by the lateness of the hour. But certainly again, if I may give some figures, I think that the question of unit manpower costs bear out the justification. Between 1968 and 1972 the average annual growth rate in unit manpower costs was just over 7 per cent. for the United Kingdom, compared with 3½ per cent. for the United States, 6½ per cent. for Germany and 4 per cent. for Japan. Of course, it is true that since the introduction of the standstill and Stage 2 the United Kingdom has significantly improved its unit wage costs relative to our competitors. The noble Lord does, however, know that were wage controls lifted no one would benefit from the free-for-all, least of all the low paid and those who have weak bargaining positions. It may be a cliché, but clichés have much truth in them, that inflation hits the lower paid.
The noble Lord, Lord Diamond, raised a rather technical, but valid, point about the price pass-through of raw materials. I believe that the pay and prices policy has in fact provided an effective constraint here. Obviously no
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one would expect that a 1 per cent. increase in material prices would lead to a 1 per cent. increase in final prices. It depends in the first place on the proportion of final costs represented by material costs, and of course also on time lags. I certainly accept this. But the figures given by the Price Commission, £300 million, must surely be a fair indication of what would have happened to the prices of those firms in that period, since it is reasonable to assume that the firms applying for the price increases would have implemented them if they had been approved.
The noble Lord made a point about profits. While it is true that many companies have announced large percentage increases in profits—we acknowledge that—these relate to periods before the full impact of the profits controls under Stage 2. Despite these increases, to be expected, surely, in the upturn of the economy which the Government devoted their first years to achieving, profits as a percentage of total domestic income remain lower than they were at the peak of the previous cycle in 1968, when, I think I am right in saying, the noble Lord was Chief Secretary to the Treasury. In the tripartite discussions both the T.U.C. and the C.B.I. recognised, as I believe the noble Lord also recognises, the need for adequate profits to generate the vital investment we need to modernise and expand our industrial base. He mentioned mortgage interest and the retail price index. The validity of including mortgage interest in the Retail Price Index is now being considered by the Advisory Committee, on which the T.U.C. are certainly represented, and I think we must await the outcome of that.
The final point I would make to the noble Lord is directed towards his intervention in the speech of my noble friend Lord Amory, the point about profits not being used for investment. It is surely unreasonable to expect enterprises to invest before they have reached full capacity or are approaching full capacity. The companies quoted by the noble Lord have just recorded high profits following the rapid upturn in the economy since the second half of last year. The latest D.T.I. investment intention survey forecasts that next year in manufacturing industry investment will

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be 15 per cent. up on the level of investment this year, and that notwithstanding an undeniable credit squeeze. There is every reason to expect the companies who have recorded high profits to invest over the next year, and so we have devised the provisions in the price code to encourage such investment.
If I may say so to the noble Baroness, Lady Seear, I thought that she put the Government case against the noble Lord, Lord Diamond, extremely effectively, as also did the noble Lord, Lord Kahn. Vis-à-vis prices and incomes generally, of course I can say that we too dislike many of the anomalies and situations they create, but we are agreed that they are the only approach compatible with fighting inflation and expanding the economy. The noble Baroness asked about family allowances. She suggests that introducing family allowances for the first child would be the best way of giving help where it is most needed. I am sure that she will forgive me, especially at this hour, if I do not comment in detail on her suggestion beyond taking note of it. But such a change, which would be expensive, would not help only those who are in need but all families across the board, rich or poor. The present system, on the other hand, concentrates the benefits on the larger families, normally those that most need them; and low income families are further helped by the Family Income Supplement, which the present Government introduced, and we can all look forward to the tax credit scheme as an additional help here.
Several noble Lords, following the views expressed by the noble Baroness, introduced the question of taxation on property speculators. I acknowledge that, besides being fair, controls must also be seen to be fair. There is a great deal of feeling about this. I cannot anticipate, or even discuss, matters properly belonging to my right honourable friend the Chancellor of the Exchequer. I would merely say that since the war the various attempts to tax betterment—the 1947 Act, and the betterment levy—have had to be abandoned because of the difficulties they produced, as I think the noble Baroness acknowledged. We, of course, support compulsory purchase for housing where
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this is necessary to make sure that houses are used to provide people with homes, but we will consider carefully the points about speculation.
I am glad that my noble friend Lord Amory has been able to report authoritatively to the House that the price of onions has gone down. If his diet—as I hope it will not be—is restricted to onions, I must say that I am grateful that he sits behind rather than in front of me. I am very grateful indeed to him for the many helpful remarks he made. I agree with him that if our currency floats down there are harsh consequences. I am glad to say that Tuesday's measures have been responded to abroad, and this is reflected by sterling's present position. May I say to the noble Lord, Lord Diamond, that it is a 17 per cent. depreciation and not 20 per cent., though of course there is no cause for rejoicing that there should be any depreciation at all.
My noble friend made a point on productivity schemes. Because of experience under previous policies the Government thought it essential to frame the rules on productivity schemes so as to cut out bogus ones. Looser rules might well let in same good schemes but they would also open the door to invalid and bogus schemes, and that would surely be the quick road to discrediting the counter-inflation policy as a whole. The noble Lord, Lord Kahn, gave us a very salutary reminder about the effects on industrial unrest, not least to foreign investment and enterprise in this country, on which we also depend. It was certainly, from the Government point of view, an eloquent and helpful speech. In this House, at any rate, we seem to do better, I am sorry to say, as an old Balliol man, with economists from Cambridge than from Oxford.
I come to the speech of the noble Lord, Lord Fiske. I see that he is not in his place, but since he dealt with the problem of which we are particularly aware, as people who perhaps live, and certainly work, in London, I think that I should deal with it. I must say that the essential services in London and elsewhere are facing very real and present problems. This is a matter for great concern, and I do not want to minimise the problems. I think it would be a mistake to underestimate the difficulties, as I have said, but perhaps there is a

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tendency to put the blame for them entirely on the counter-inflation policy, and I do not think that that is the main difficulty. The main difficulty surely lies in the limited supply of labour to London. Indeed, if there were no pay policy at all, and if employers were free to pay what they wished, in the ensuing bidding up of rates I do not think the public services would have a hope of winning. The noble Lord, Lord Fiske, asked whether the recent increase in council rents was included in the recent retail price index figures. The answer is that it was. Lord Fiske criticised the increase, but he did not mention the arrangements for allowances which relieve those on lower incomes from the effects of such increases.
The noble Lord, Lord Alport, has gone. I am grateful to him, mainly for giving me a useful joke to use about Lord Stansgate at Party political meetings, and I think that may be enough said. I enjoyed the speech of the noble Lord, Lord Hale, even if I did not follow it all the way. I would say to him that it was only the other day that I myself intervened, I am ashamed to say, in a speech of Lord Shinwell concerning the remark of my noble friend Lord Butler about doubling the living standards of the people of this country in twenty-five years. My burden then—as it is now—is that this has been achieved by successive Governments, and indeed that it is not enough; but I do not think we can say, with the noble Lord, Lord Hale, "Where have all the flowers gone?" Some of them are still around. I would say to him on the housing question that house owners can still borrow at 9½ per cent., admittedly not nearly so favourable a rate as when the noble Lord was fortunate enough to buy his house. But we must, I think, look at the capital stake of people in the economy now as against the capital stake of people in the economy when he bought his house. Householders are favoured fiscally, and we are of course known to encourage wider house ownership.
My Lords, I must come to an end. The Government have been teased for saying that our problems are the problems of success, but this success is not simply one of government—a high note, so to speak, in the process of blowing one's own trumpet. The success is surely
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the success of the British people and the British economy in their response, at a difficult time, to the chances which the Government have given. Inflation, which is at least useful in sharpening our sensitivity to inequity and injustice, could have wrecked this challenge and this response; but, thanks to the counter-inflation policies, with all our irritation with some of their effects, we in this country have not been wrecked. Far from it: we are in a position to go from strength to strength so long as we have the will and the confidence to do so. I believe that this Order can only reinforce and make credible that confidence and that will.
On Question, Motion agreed to.

AGRICULTURE (TRACTOR CABS) (AMENDMENT) REGULATIONS 1973
10.3 p.m.
EARL FERRERS EARL FERRERS rose to move, That the Draft Agriculture (Tractor Cabs) (Amendment) Regulations 1973, laid before the House on the 25th of July last, be approved. The noble Earl said: My Lords, the main objective of these Regulations is to reduce the level of noise inside the modern tractor safety cab so that a threat no longer exists to the driver's health. Tractor cabs have undoubtedly saved lives, but they also concentrate the noise of the tractor inside the cab; and the new Regulations are designed so that, if they are agreed, all new tractors sold to the farmer after September 1, 1975, will be required to be fitted with a safety cab in which the noise level at the driver's ear does not exceed 90 decibels on the A scale. Furthermore, after September 1, 1977, the same noise limit will be applied to all other cabs sold; but cabs fitted to tractors before September 1, 1977, will not have to be exchanged for quieter ones.
Older tractors present a different problem in that it is technically difficult and expensive to make cabs which are fitted to old tractors quieter to the driver's ear. We have therefore decided to allow cabs which are not covered by this new noise regulation to be fitted to old tractors until September 1, 1977, when all tractors used by workers must be fitted with a safety cab. We also use this

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Regulation to introduce certain minor Amendments to the Tractor Cab Regulations. One is to ensure that tests on cabs are made to the latest British standards. Others sort out certain anomalies that occur in existing Tractor Cab Regulations. I hope that, with those brief comments, your Lordships will approve these Regulations.
Moved, That the Draft Agriculture (Tractor Cabs) (Amendment) Regulations 1973, laid before the House on the 25th of July last, be approved.—(Earl Ferrers.)
LORD HOY: My Lords, we are grateful to the noble Earl for moving these Regulations. As one who had the privilege of introducing the rule which provides for the fitting of tractor cabs, its purpose being safety on the farm, I am delighted that the effort has been carried a stage further. When we introduced it the safety problem was the first that we considered; we did not consider noise in that respect. But we are grateful that the Government have recognised that noise is another problem that ought to be dealt with. Whatever we are doing, we are doing something to ensure not only safety but comfort for the people working on the farm. We therefore support the Regulations.
VISCOUNT AMORY: My Lords, I should like to support what the noble Lord, Lord Hoy, has said. I think we all know of the surprising number of tragic accidents that occur with tractors on the land. Anything that can be done to increase their safety, such as lowering the centre of gravity and so on must be right. I cordially support the proposal made by my noble friend.
On Question, Motion agreed to.

NORTH WALES HYDRO-ELECTRIC POWER BILL
The Queen's consent signified, and the Bill reported with Amendments.