Lords Sitting of 24 October 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 Derby.

U.N. SEABED COMMITTEE'S REPORT
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 conclusions were reached by the United Nations Seabed Committee at their recent meeting in Geneva.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, the Committee's task has not been to reach conclusions, but to prepare for the U.N. Conference on the Law of the Sea. It has made good progress.
LORD BROCKWAY: My Lords, is the noble Baroness aware that many of us would like to hear about the "good progress"? Is there any area in international affairs where there is now such utter confusion as the seabed?—yes, my Lords, at this moment even more than the Middle East. It involves fishing, oil, nuclear weapons on the seabed and mineral rights. Are we really to wait until the Conference next year—it may be delayed until 1975—before we have any solution of this confusion?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am afraid I do not agree with the noble Lord. I should have thought that the conflict in the Middle East in causing much more concern in the world at this time. But there are great difficulties and the Seabed Committee has agreed on a list of issues with which the Conference should deal and has produced a comparative text of draft Articles which represents the major groups of opinion on the most important subjects involved. It is still hoped to
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have an organisation conference at the end of this year and to start the major negotiating Conference in 1974.
LORD BROCKWAY: My Lords, is it still proposed to hold the Conference in Chile next year? That would seem to me a more suitable place for a conference on the land rather than on the seabed. But may I ask the noble Baroness this question? What is to happen meanwhile to the mining companies which are now beginning, with very heavy investment, to operate in the international waters? What is to be done to confine them?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords. I understand that the Government of Chile has asked that the Conference should not be convened in Santiago, and the First Committee of the United Nations General Assembly has to decide where it should be convened. I think that every effort is being made to make sure that it does start substantially next year. On the other question, the mining companies have the right to explore the seabed under the 1958 Convention.
LORD SEGAL: My Lords, while "rocked in the cradle of the deep", will the Government, so far as the seabed is concerned, resist the temptation to lie down and sleep?
BARONESS TWEEDSMUIR or BELHELVIE: My Lords, I cannot see any possibility of their having time to sleep.
LORD KENNET: My Lords, would the Government consider the possibility of having a Green Paper or a consultation paper of some sort on this subject between now and the time when they have to go up to the U.N. Conference and take up a position? Is it not the case that in this country many interests are involved whose livelihoods are at stake in the future régime of the sea, and many of them have not a clue about what is happening? Could the Government's tentative views be set out for consultation purposes? Would that not clarify the matter a great deal?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I said, draft Articles have been prepared by the Seabed Committee which will be published by the United Nations for the Law

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of the Sea Conference. We had a full debate in this House on July 11 when we went into the matter pretty clearly. We could not give our detailed negotiating position, for obvious reasons.
LORD KENNET: My Lords, will the Government still bear in mind these two facts? The first is that United Nations publications do not reach the general public in this country very easily, and the second is that what is going to affect our lives is the position the Government take up. If the Government have not entirely made up their minds on this subject, as I suspect they have not, would it not be seemly, democratic and informative for the Government to set out considerations and alternatives for general discussion among those affected?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I take the point that United Nations documents are not on the whole read very easily by the general public. I will give consideration to this matter. But I think that we went quite deeply into the subject on a Motion raised by the noble Lord himself.
LORD BROCKWAY: My Lords, is the noble Baroness aware that I did not mean in the least to suggest that the appalling problem of the Middle East is not urgent? I was thinking of much more long-term considerations, where the seas of the world will become as important as the land of the world.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I would agree on the great importance of the subject, and that is why it has taken so long to prepare for this Conference which has already been postponed for one year.

COST OF LIVING: PRICE AND SERVICE CHARGE INCREASES
2.43 p.m.
LORD LEATHERLAND: 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 give details of retail price increases since June 18, 1970, in so far as the following items commonly used in ordinary households are
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concerned: Meat, bacon, eggs, bread, and fifty or so of the main fresh and packed foodstuffs, detergents, soaps, toilet requisites, radio batteries, pots and pans, over-the-counter medicaments, beer, wines and fruit juices; and also of the increased charges for postage, telephones, rents and rates during that period.
EARL FERRERS: My Lords, as the reply contains a table of figures I shall with permission circulate a Statement in the OFFICIAL REPORT.
Following is the statement referred to:
The percentage changes in retail prices between June 16, 1970, and September 18, 1973, of some items commonly used in ordinary households are as follows:—

Item

Percentage Change

Beef

+79

Lamb

+77

Pork

+58

Bacon

+83

Ham

+44

Eggs

+99

Bread

+25

Pork sausages

+44

Beef sausages

+59

Pork luncheon meat (tinned)

+45

Roasting chicken, frozen (3 lb.)

+69

Canned red salmon

+58

Butter

+26

Margarine

+32

Lard

+40

Cheese, cheddar type

+78

Milk

+20

Tea

+9

Coffee, extract, powder

+34

Sugar

+38

Jam, Marmalade

+27

Potatoes, raw, loose

—13

Tomatoes

—18

Cabbage

+55

Cauliflower

+57

Carrots

—6

Onions

—2

Apples, cooking

+28

Apples, dessert

+26

Pears

+39

Oranges

+65

Bananas

+46

Currants

+90

Sultanas

+97

Canned pears

+33

Canned peaches

+40

Canned pineapple

+34

Canned fruit salad

+36

Swqets and chocolates

+6

Food for animals

+23

Soap and detergents

+24

Toilet requisites

+9

Hardware, ironmongery

+25

Medicines and surgical etc. goods

+27

Beer

+18

Sherry

+9

Postage, etc.

+74

Telephones, telegrams, etc.

+34

Rents

+33

Rates and water charges

+40

Radio batteries

Not available

Fruit juices

Not available

LORD LEATHERLAND: My Lords, does the noble Earl mean to say that the list of price increases since this Government came into office is so long that he cannot recite it to this House? Further, may I seek a little detailed information? Is it not a fact that during September price increases amounted to 2·1 per cent., the highest figure for two and a half years? Is it not a fact that since the General Election food price increases have been 40·2 per cent.? Is it not also a fact that during the present month of October there have been further considerable increases? Finally, is it not a fact that last week the Grocer announced that 742 price increases had become current last week—and when I mention the Grocer, I mean the journal of that name and not any individual person.
EARL FERRERS: My Lords, I said that I would circulate the figures in the OFFICIAL REPORT because the noble Lord's Question asked that Her Majesty's Government provide a list of about 50 or more different items, and I thought it would be for the convenience of your Lordships to be able to read it rather than for me to depict all the items. The noble Lord, Lord Leatherland, is entirely correct when he says that the food index since the General Election has gone up by 40·2 per cent. This is of course a matter of grave concern, and is something about which Her Majesty's Government are concerned. But I would draw the attention of the noble Lord to the fact that average earnings of all workers have gone up by 44·8 per cent. and old-age pensions by 55 per cent.
LORD LEATHERLAND: My Lords, is the noble Earl aware that the Tory Party's Manifesto at the last Election promised us a high wage, low cost economy? Does he think that that promise has been fulfilled?
EARL FERRERS: My Lords, the Government are tackling that problem, which is of world-wide repute and concern. I would suggest to the noble Lord that we have had a modicum of success, even though the Government agree that they have not yet had total success.
LORD SHINWELL: My Lords, is the noble Earl aware that average earnings do not help those on the lower scale, the lower paid workers, and that average prices have to be accepted and absorbed by those on the lower scale of wage rates?
EARL FERRERS: My Lords, the noble Lord, Lord Shinwell, is of course correct, and Her Majesty's Government have always recognised this. That is the reason why we have decided to try to help the lower paid people by selective assistance, such as increasing the old-age pension and the family income supplement; and that is why the counter-inflation policy in Phase 2 has deliberately been designed to help the lower paid worker. Also in this connection, the measures taken to allow for rent allowances and rent rebates have again been designed to help those who are less well off.
LORD DERWENT: My Lords, is ours the only country where such rises have occurred?
EARL FERRERS: My Lords, it is quite true that we have experienced rises in world food prices. In the year ending August, 1973, United Kingdom food prices went up by 12·8 per cent.; in the United States by 13·4 per cent.; in Italy, 13·6 per cent.; in Australia, 14 per cent.; in South Africa, 16·5 per cent.; and in Canada, 16·7 per cent. So we are not the worst country in the league table from the point of view of increased food prices.
LORD POPPLEWELL: My Lords, when the noble Earl refers to the increase in world prices, can he inform the House how much the fall in the value of the pound is related to the prices we are having to pay for our imports? Would I be correct in saying that if the value of the pound in July, 1970, stood at 100 per cent., it now stands at 77½ per cent.? Just how does this reflect itself in the increased world prices that we have to pay and to which the noble Earl referred?
EARL FERRERS: My Lords, clearly the alteration in the level of the pound makes a difference so far as the calculations are concerned, but what I was trying to point out was that the increase in prices of food is not restricted to this country, but is common to all countries in the Western World.
LORD BLYTON: My Lords, surely the noble Earl will agree that world prices having nothing to do with the sheer inflationary policy of the Government in increasing rents to working class people under the Rent Bill? Surely this was a matter for the Government and not for outside world prices?
EARL FERRERS: My Lords, that particular question may be a matter for the Government, and that is the reason why the Government took action in allowing for rent rebates and rent allowances under the Bill recently passed by your Lordships.
LORD BESWICK: My Lords, when the noble Earl speaks about a "modicum of success", has he in mind the price of butter to the Russians?
EARL FERRERS: My Lords, I was talking about overall success in dealing with inflation.
THE EARL OF ONSLOW: My Lords, would my noble friend agree that the modicum of success is slightly better than that achieved by the previous Government?
EARL FERRERS: My Lords, there is substantial success. "Modicum" is only an approximate term.
LORD SLATER: My Lords, is the noble Earl aware that the general public are of the opinion that the Board which was set up by the Government to deal with price increases is too ready to give way to manufacturers' applications for increases in certain commodities?
EARL FERRERS: My Lords, I think that that particular question is going slightly wide of the original one, but I would answer the noble Lord with one particular instance. The prices of imported food raw materials used by food manufacturers, since the General Election in June, 1970, to now, have increased by 89 per cent.; that is the imported raw materials for food manufacuring. They have increased by 89 per cent., but the retail prices for manufactured foods have increased by only 26 per cent.
LORD JANNER: My Lords, will the noble Earl explain why, when the Government claimed that they were going to reduce prices and there would not he inflation, they did not explain to the
630
public at that time that if world prices increased our position would be different? Did they not deceive the population of this country? Will he say which other countries put forward an election claim, at the time that elections took place in their countries, that they were going to reduce prices?
EARL FERRERS: My Lords, I would not answer the last part of the noble Lord's question, because that might be a piece of research he may care to do himself. The Government never claimed that there would not be inflation. What they have endeavoured to do is to deal with inflation, and this they have done.
SEVERAL NOBLE LORDS: Oh!
EARL FERRERS: When one considers that over the past 12 months the world price of wheat has increased by 130 per cent., even the noble Lord, Lord Janner, will agree that that is outside the Government's control.
LORD DOUGLASS OF CLEVELAND: My Lords, having regard to the fact that all these questions seem to be directed to the ability of people to live in the atmosphere of inflation, is it not time that a minimum wage was established in this country which would enable all people to live even without security benefits, and that old-age pensions ought to be related to this minimum wage?
EARL FERRERS: My Lords, with respect to the noble Lord, Lord Douglass, that is a different question. But I would assure him that the Government have very firmly in mind the position of those who are less well off and those who are living on fixed incomes, and that is the reason for the action we have taken, which I suggest has met with approval.
LORD DOUGLASS OF CLEVELAND: My Lords, may I follow that up? It is one thing for the Government to have something firmly in mind; it is quite another thing for the people on these low wages to live, and even though it may—
SEVERAL NOBLE LORDS: Question!
LORD DOUGLASS OF CLEVELAND: I am going to put the question but, after all, on the opposite side they qualify questions, do they not, before they argue the case? When I have been negotiating

631
wages I have always had to argue the case before I put the question. I am now arguing the case that certain people in this country are not able to live on the income they have. Hence the question: is it not time that we gave some active consideration to the question of a minimum wage in this country?
EARL FERRERS: My Lords, I would only answer the noble Lord, Lord Douglass, by saying that the food index has gone up by 40·2 per cent. The retail price index has gone up by 30 per cent. But the average earnings of all workers have gone up by 44·8 per cent., and therefore have exceeded the two very important figures which the noble Lord is concerned with.
LORD DOUGLASS OF CLEVELAND: My Lords, I am sorry to pursue this point, but let me ask another question. This time I will ask a question to begin with. Do percentages matter when you consider incomes of thousands of pounds a year and incomes of a few hundred pounds a year in some cases?
EARL FERRERS: My Lords, that is the reason why the Government have produced the family income supplement to help families that are less well off.
LORD DOUGLASS OF CLEVELAND:Let me follow this up, my Lords, if I may.
SEVERAL NOBLE LORDS: Oh!
LORD DOUGLASS OF CLEVELAND: I am entitled to ask questions. I do not often, but I am going to. To have family income supplement is not dealing with this question at all. The question is made evident. What I want to know is when we are going to establish a minimum income, a minimum wage, for people in this country that will at least enable them to eat, if not pay their rents.
THE LORD PRIVY SEAL (LORD WINDLESHAM): My Lords, I feared when I saw this Question on the Order Paper that it would lead to a general debate. This is an example of how, when a Question is put down that covers such an enormously wide range of subject matter, we tend to have a rather disorderly Question Time. The noble Lord
632
has asked four supplementary questions. I can assure him that there will be an opportunity to discuss the Government's economic policies during the debate on the Queen's Speech. We look forward to hearing his views then.
LORD BOOTHBY: My Lords, while hesitating to continue the debate, may I ask the noble Earl—and here I have to declare a personal interest—whether the best way of dealing with the whole of this question would not be to raise old-age pensions?
EARL FERRERS: My Lords, that is what the Government have done.
LORD LEATHERLAND: My Lords, I hope I am not to take it that the noble Lord the Leader of the House is rebuking me for putting down this Question. I should like to ask, by way of a finale, this further question. When the noble Earl said that we were having to pay more for our food imports, was he taking into account the fact that one of the reasons for that was the action of the present Government in devaluing the pound?
EARL FERRERS: My Lords, the prices of imported foods are the prices at which the food comes into the country, and this takes into account the point which the noble Lord has expressed.

N.H.S. OFFICERS' SALARIES AND RETIREMENT SCHEMES
2.55 p.m.
LORD REIGATE: My Lords, at long last I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they intend to publish the regulations governing the schemes of early retirement and protection of salaries for senior officers and others affected by the reorganisation of the National Health Service.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, as soon as we have completed consultations with staff interests.
LORD REIGATE: My Lords, is my noble friend aware that in some cases

633
appointments are being made this month and the officers concerned do not yet know what are the alternatives facing them?
LORD ABERDARE: Yes, my Lords; I am well aware of this. We have done our best to push ahead with the schemes for early retirement and for the protection of salaries. We have put our proposals in the first instance to the Joint Superannuation Consultative Committee. They have made various comments on these proposals and we are about to come forward with further proposals for their consideration.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, is the noble Lord aware that it places an individual senior officer of the utmost importance to the Health Service in a most invidious position that, at the time when he applies for a position which has been brought about by reorganisation, he does not know what his own individual position is, or indeed that of his colleagues?
LORD ABERDARE: My Lords, there are a very few people who have so far received appointments, and already the general scheme has been widely publicised and the differences are mainly on only three specific parts of the proposals. But if any individual officer who is in any doubt or has difficulty would care to get in touch with my Department, we will advise him to the best of our ability.
LORD REIGATE: But, my Lords, with great respect to my noble friend, that really is a rather odd way of proceeding. Surely it is only right that the officers concerned must wait until they see in print what they are entitled to?
LORD ABERDARE: My Lords, these schemes are designed principally to help those who do not get appointments. Those who do get appointments will have plenty of time to consider their position before they take up their appointment after April 1. As I say, we will give them any help we can in the meantime. But surely it is important that the schemes we have put forward for these very vital matters are agreed with staff interests.
LORD REIGATE: My Lords, is my noble friend further aware that it is not
634
just a question of those who do not get appointments, but of those who may elect for early retirement instead of appointments? They are not entitled to claim the provisions for earlier retirement once they have accepted a post, and they may find earlier retirement more attractive.
LORD ABERDARE: My Lords, I can only repeat my offer that if there are such cases, if they will get in touch with my Department we shall be able very largely to help them to make their decision.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, is this not rather prejudicial to any individual officer who may seek to apply to the Ministry, who are in fact going to employ him in the end, for this kind of individual advice? Is the noble Lord really not aware, as his reply appears to indicate, of the very, very low state of morale among these very important senior officers simply because of this really appalling uncertainty about how to choose to proceed at this vital moment in their careers?
LORD ABERDARE: My Lords, I do not accept that at all. We have been very hard pushed because the Bill only reached the Statute Book recently. Since then the Department has been doing its best to produce all the guidance that is necessary. There are difficulties—there are bound to be difficulties with the shortage of time—but I do not think in this particular instance more than a very few people are affected; and we certainly will do our utmost to see they obtain the right advice.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, in view of the very unsatisfactory nature of that reply, and the Minister's apparent unawareness of the state of morale, I think we may have to ask for a further debate on this matter.
LORD REIGATE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the difficult position of senior officers in the National Health Service who may be offered posts in the reorganised National Health Service in view of the

635
fact that the alternative proposals of the early retirement scheme have not yet been published.
LORD ABERDARE: Yes, my Lords, it is most important that we should proceed in agreement with staff interests.
LORD REIGATE: My Lords, can my noble friend say whether the option to choose early retirement will be extended so that officers whose position is uncertain, instead of using the extraordinary and unusual and unsatisfactory course of taking the advice of his Department, may have the alternative option extended after the appointed day?
LORD ABERDARE: My Lords, this was one of the suggestions that was made after consultation with staff interests. We are putting our further proposals to them very shortly and we hope that those proposals will go a considerable way to meeting their criticism.
BARONESS LLEWELYN-DAVIES HASTOE: My Lords, is the noble Lord aware that the chaos we were afraid of in relation to reorganisation of the National Health Service is even worse than noble Lords on all sides of the House thought?
LORD ABERDARE: My Lords, I should have thought that the noble Lady would wish to help us in this matter. The National Health Service is extremely important, reorganisation is extremely important, and we are all doing our best to iron out the wrinkles. I hope that she will be a little more co-operative in helping rather than being too critical of what is a difficult task which is being done in a very short time.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, it is very difficult to co-operate in an unfair situation affecting the most senior members of the National Health Service.
LORD ABERDARE: I do not agree, my Lords, that it is unfair.
BARONESS SUMMERSKILL: My Lords, would the noble Lord not say that the duty of the Opposition is to criticise the Government if they consider they are failing in their duty? It is not the duty
636
of the noble Lord to criticise my noble friend for doing her duty.
LORD ABERDARE: No, my Lords, I would not criticise the noble Baroness for doing her duty, but I thought she was going rather wide of the Question and giving out the impression that there was loss of morale in the Sevice in general.
LORD PLATT: My Lords, how can the Department give adequate advice if the proposals for the early retirement scheme are not yet known? If the answer is that they are known, why are they not published?
LORD ABERDARE: My Lords, the proposals were put out for comment on May 31, 1973. They are, in general, known, but in detail they cannot be finalised until they are agreed with those people who represent the staff and service. That is why we cannot publish them.
LORD REIGATE: My Lords, is my noble friend aware that in fact it would be perfectly possible for the Department to issue those regulations? It would not be the first time that the Secretary of State had come to a decision without consultation.
LORD ABERDARE: I completely deny that, my Lords; that is not true. I expect my noble friend has in mind the salary question, but there were very particular reasons for that. My right honourable friend is meticulous in consulting the staff interests.
LORD SEGAL: My Lords, can the noble Lord give an assurance that when these proposals are published they will not result in the too early retirement of any senior officers in the National Health Service?
LORD ABERDARE: My Lords, there are provisions in the proposals which would allow health authorities to object to an early retirement in an exceptional case where it was important for the Service that a particular officer should stay on.
LORD FISKE: My Lords, I do not really sense in the noble Viscount's reply the feeling of urgency which this matter should have. I went through this experience some ten years ago in the reorganisation of the government of

637
London, but what one is talking about is the career decisions that lie before men over the age of 50.
SEVERAL NOBLE LORDS:Question!
LORD FISKE: I am sorry. My question is: is not the corollary to what the noble Viscount has suggested that he should issue instructions that no permanent appointments to the new Health Service should be made until his Department is ready with these new arrangements for the alternative for those who are not re-employed?
LORD ABERDARE: My Lords, in the first place, I regret to say that I am not a Viscount. In the second place, the urgency of the matter is fully realised by all of us in the Department. We are up against a very tight timetable, we are working extremely hard to get agreement with staff interests—which must be the first step, surely—and we expect very shortly to be able to issue these regulations.

GOVERNMENT STATEMENTS
EARL ST. ALDWYN: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend Lord Drumablyn will be making a Statement on supplies of oil. This will be followed by a Statement, to be made by my noble friend Lady Tweedsmuir of Belhelvie, on the recent meeting of the E.E.C. Council of Ministers.
ASHDOWN FOREST BILL [H.L.]
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWLL): My Lords, as no Message has been received from the Commons relating to this Bill, I do not propose to move the Motion standing in my name on the Order Paper.
POWERS OF CRIMINAL COURTS BILL [H.L.]
Returned from the Commons, agreed to.
MAPLIN DEVELOPMENT BILL
Returned from the Commons with the Amendments agreed to.

EUROPEAN PARLIAMENT: DESIGNATION OF MEMBERS
3.6 p.m.
LORD WINDLESHAM LORD WINDLESHAM rose to move, That the Marquess of Lothian he designated a Member of the European Parliament in the place of the Lord Brecon. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. Its purpose is to propose that my noble friend Lord Lothian should replace the noble Lord, Lord Brecon, as a Member of the European Parliament. In moving the Motion I should like to put on record the appreciation of the Government, and that of the House as a whole, of the great services which the noble Lord, Lard Brecon, has rendered as one of the first group of Members of the European Parliament. For many years now the noble Lord, Lord Brecon, has had a career of wide and varied public service in Wales and in Great Britain as a whole. Now, over an exceptionally demanding period, he has earned our thanks for the time and energy he has given as a member of the British delegation to the European Parliament.
I am sure that most of us in this House are proud of the contribution which the House of Lords has been able to make to the European Parliament in a highly significant phase of its development. Not only have we been able to field a strong and enterprising team of Peers but they have been most ably supported by the Parliament Office. As a result of his recent appointment as Chairman of the Welsh Water Authority, the noble Lord. Lord Brecon, has felt obliged to resign from the European Parliament, and I am very pleased to be able to propose to the House that the noble Marquess, Lord Lothian, should take his place. As the House knows, the noble Marquess has had considerable experience of overseas affairs, both while he was at the Foreign and Commonwealth Office and before. Moreover, in regional terms, what is Wales's loss is Scotland's gain. I am sure that the noble Marquess will be a great addition to the European Parliament and will make a noteworthy contribution to its proceedings.
My Lords, there is one other matter to which I should like to refer in moving this Motion. When the original group of eight Peers were nominated last

639
December as Members of the European Parliament the noble Earl, Lord Jellicoe, who was then the Leader of your Lordships' House, said—and I quote:
"There is the question of the duration of this Order. All I would say is that this .is debatable ground. It is certainly usual in this House for a Motion of this kind to have currency for the Session only. If the House wished to appoint the Members for the duration of the Parliament. I am advise' that this should be stated specifically in the Motion; and it is not so stated. So it is my understanding that this is a Sessional Order, although it is my hope that we shall have—and I think it would be of great pity if we did not have— a large degree of continuity in our delegation to the European Parliament, because we all have to feel our way."—[OFFICIAL REPORT, 20/12/72, Hansard, col. 1111.]
As the noble Earl, Lord Jellicoe, said this was "debatable ground Your Lordships will see from Hansard of December 20 last that my noble friend was speaking "off the cuff" and with "off the cuff advice" from the Table. After Lord Jellicoe's Statement on December 20 last, he asked the Table for a considered opinion. The considered advice tendered by the Clerk of the Parliaments was that the Order designating the Lords Members of the European Parliament was of indefinite duration, though it could be varied or revoked by the House at any time. The Clerk of the Parliaments reached this conclusion because he did not consider that the Order of December 20, 1972, fell within the categories specified by Erskine May as being limited in duration to the current Session; and also because the European Parliament has an existence independent of either House of Parliament in this country.
Since my noble friend Lord Lauderdale was good enough to give me notice of his intention to return again to-day to the question of how Members of the European Parliament are selected and the duration of their term, I have looked into this matter with some care. It is for this reason that I am taking a little longer in moving this Motion that might otherwise be the case. I want to be as frank with the House as the noble Earl, Lord Jellicoe, himself would have wished to be. I find that earlier this year, having received the considered advice of the Clerk, he put on record—and this has been made available to me—his intention
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to find a suitable opportunity to modify what he said in December. Perhaps I might quote my predecessor's own words from the record he made:
"I shall have to take a suitable opportunity of modifying what I said in the House of Lords on December 20 last, in replying to Lord Lauderdale's Amendment which sought (inter alia) to limit the term of appointment of the Lords designated to the current Session. I said then that it was my understanding that the designation of the Lords Members of the European Parliament was to be regarded as a Sessional Order. I see no difficulty in modifying this, as I warned the House at the time that the question of the term of the appointments was 'debatable ground', and it would not be difficult for me to say that on reconsideration I wished to amend the tentative view that I then expressed."
I am aware that some doubts remain about the best method of selecting Members of both Houses of Parliament to serve as Members of the European Parliament. Indeed my noble friend Lord Lauderdale has put down an Amendment to this Motion to-day, as he did on the previous occasion when, in December, we discussed the nomination of noble Lords to the European Parliament, to draw attention to his preference for a system based on a process of election. An electoral mandate is something that we shall continue to consider in the future, as indeed we are bound to do under the terms of the Articles governing the Institutions of the Community. Article 138(3) states that the Assembly (that is the European Parliament)
"shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all member States."
But, my Lords, important as these considerations are for the future, the broader issues do not really arise on the filling of a casual vacancy. All the present Motion does is to propose that my noble friend Lord Lothian should take the place of my noble friend Lord Brecon, who is standing down for the reasons I have already given. I hope, therefore, that your Lordships will agree that the noble Marquess should make his way to Strasbourg and Luxembourg with our full support and encouragement. I beg to move.
Moved, That the Marquess of Lothian be designated a Member of the European Parliament in the place of the Lord Brecon.—(Lord Windlesham.)
3.15 p.m.
THE EARL OF LAUDERDALE THE EARL OF LAUDERDALE rose to move as an Amendment to the Motion: at end to insert "for the remainder of this Session; and those Lords designated Members of the European Parliament thereafter shall only be so designated after a process of election". The noble Earl said: My Lords, I beg to move the Amendment standing in my name on the Order Paper.
May I say, first of all, that this is in no sense a criticism of the noble Marquess whose personality we all cherish with affection, whose ability we cherish with envy and whose unfailing kindness and courtesy we seek to cherish by emulation. Nor, if the situation had not seemed to compel it, would I personally have wished to make new trouble for a new Leader of the House whose appointment we have hailed with delight. My concern is not mischief but principle.
As the noble Lord, Lord Windlesham, said, the Amendment I now move is the one I moved on December 20 last when the first nominations for Strasbourg were made. May I without rancour recall the background at that time. The Executive in this country had just treated both Houses of Parliament to the unpalatable medicine of a complicated Bill to which not even a comma, let alone the innocent conjunction "that" was allowed to be added or taken away. Unamended the Bill reached us, and unamended it left this place. That Bill set up a new relationship between this country and eight of our neighbours, one different in kind from our relationship with such international organisations as the United Nations, NATO, the Western European Union and the Council of Europe. It conceded to the European Economic Commission direct powers over the everyday life of the citizen against which, save for a rare veto in the Council of Ministers, only the European Parliament was trumpeted as the eventual democratic long-stop.
Just now my noble friend quoted, but selectively, from the Treaty of Rome about methods of appointment to the European Parliament. He did not quote, as I rather hoped he would, another passage from Article 138 which meantime requires Members of the European Par
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liament to be appointed from national Parliaments, namely:
"by procedures laid down by each Member State".
Other countries have long since laid down their procedures: Belgium, Holland and Luxembourg, by a process amounting to election, pick members from both Houses; Germany does the same from the Bundestag; France and Italy have an open election in both Houses for the choice of delegates. Britain has so far laid down no clear procedure, and I say "laid down no clear procedure" referring to the assignment of Members of this Parliament to the membership of that Parliament. I can only speak for the Party to which I continue, despite occasional stresses, to be loyal; however my noble friend Lord Lothian was selected—and I am sure that had his appointment been put to the vote he would have got in unanimously—there was in fact no overt system of election or choice within our Party. I am glad to see that my noble friend Lord Balfour of Inchrye is now with us on the Front Bench below the gangway, for as he said so pregnantly on December 20 last:
"here we have the Executive…encroaching upon our Legislature and saying who is to be a member of a European Legislature".—[OFFICIAL REPORT, col. 1104.]
He added that it was an "Executive-packed team" that both Houses were sending.
I do not wish to prolong these proceedings unduly and to wear out your Lordships' ever-indulgent patience, but may I just recall that last December I made three essential points. The first was that this was evidently an appointment for an indefinite period. That view has now been contradicted by my noble friend on the Front Bench, and I shall return to it. My second point was that a system of election could very well have been devised without raising the prickly problem of inter-Party relationships. There could have been, and there could now be, and there could be when Parliament reassembles for the new Session, a system of lists for which Members of any Party could put themselves forward, so that we could then vote according to the lists. If one list was blank, so be it, but we could at least have a system of election. In addition, when we debated this matter briefly last December

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my noble friend Lord Balfour of Inchrye cited the example of procedures in the Commonwealth Parliamentary Association, and I would add to that the procedures of the Inter-Parliamentary Union.
For good measure let me now offer a third alternative; namely, that the inter-Party problems could be overcome, and the Whips' patronage dispensed with, if the terms of reference of the Committee of Selection were so altered as to enable that Committee, which is independent of the Whips and represents all sides of the House, to make the selection. My main point was one of principle last time, as it is now, that if Parliament is to send representatives to a new kind of European Parliament, which is to be a sort of longstop in defence of the citizens' rights those representatives should not—repeat "not"—be Government placemen. They should be freely elected by the House or Houses, until some better method is chosen. It might be well if we were to draw upon the wisdom of the great Gibbon, who wrote:
"The principles of a free constitution are irrevocably lost when the legislative power is nominated by the Executive".
It is easy to quote selectively from the debate on December 20 last, partly because it was a little ragged, but with your Lordships' indulgence I have chosen to put in a logical order a number of the things which my noble friend the then Leader of the House said at that time. First, he said it was a sessional appointment. I shall return to that. Then he said:"…this is an important matter, and one that we should not underestimate…it is one which I hope we shall come back to in this House. Perhaps we may do so quite soon." He went on:
"I have taken full note of what has been said by your Lordships…It is an important matter and one to which the Government certainly intend to…address themselves." [Col. 1113.]
He added that he cordially agreed
"that we certainly need to work out in the lifetime of this Parliament (preferably in this coming Session)…"
—that of course referred to the Session which we are now concluding—
"our procedures by which we select, or elect, Members of this House who will be delegates to the European Parliament."
Finally, he showed that his mind was open to a considerable range of alternatives. From that moment until this there has, on this subject, been silence from the Front Bench. Ten months have gone by and we have been told nothing about the procedures which the Government then pledged themselves to consider and which they recognised should be worked out quickly: nothing, that is, until those of us who were forewarned by the Peterborough column of the Daily Telegraph on Monday, looked over our Order Paper yesterday and found only twenty-four hours' warning of this Motion—and that. mark you, my Lords, as if the matter had not been ventilated last December; as if no pledge had been given that this was a Sessional appointment (I shall again come back to that) and as if there had been nothing said then that such questions of selection or election procedures would be further and urgently discussed.
With the very greatest respect, I must submit to your Lordships that this is trivially short notice. There might be some of your Lordships who would even feel that it borders on something not very far removed from a little discourtesy to the House. At any rate. I believe that this short notice is unworthy and I sincerely hope that it was genuinely accidental. Otherwise, why raise matters in this House at all? The power of the Executive has increased, is increasing, and ought to be diminished. This is common ground, except between the Front Benches.
SEVERAL NOBLE LORDS: Shame!
THE EARL OF LAUDERDALE: My Lords, is the Executive now so heavily out of control that when, from courtesy and a desire to assist, one by leave withdraws a critical Amendment, that must henceforth be the end of the matter? Or can we now recover our faith that matters raised on such an occasion do mean something and that the assurances given by the Government do in fact mean what they suggest? Or does it mean that in future when one has tabled a critical Amendment one should be prepared, willy-nilly, to press it in the Division Lobby?
On the question of the Sessional appointment, my noble friend Lord Windlesham has at least saved my noble friend Lord Lothian from a 24 hours'

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appointment, because as things stood until two minutes ago for all we knew this was a Sessional matter and we were going through this rigmarole to appoint him for 24 hours. But should not the House have been told before? We quite appreciate that the noble Lord's predecessor had intended to acquaint the House: how is it that that acquaintance has now to be prised out of the Government only by proposing an Amendment?
The Government have resorted to two arguments on this whole subject. They have said, or tended to say, one way or another, "Oh well, this is how delegations to the NATO Assembly, to W.E.U., to the Council of Europe and so on have been selected in the past, through the exercise of the Whips' selection" I am glad that my noble friend has not attempted to use that argument now. As to the Whips' custom, I would draw his attention to King James VI's words about smoking:
"It is a custom loathsome to the eye, hateful to the nose and harmful to the brain."
Not only is the custom of the Whips hateful in a matter of this sort; it is irrevelant also. For appointments to these other various international bodies in any case are only Sessional whereas we now learn that this is not; they are to bodies which are no more than consultative while we are here speaking about appointment to a Parliament—at any rate a body that claims to be Parliamentary—with a very important role to play, quite different from the other bodies.
Then the Government have tended to say—and did say in the past—that they had been prevented from devising or proposing a proper system of selection because of inter-Party difficulties. But again, as an interim measure, the extension or revision of the terms of reference of the Committee of Selection would have got over that difficulty without any heads being broken.
My Lords, it was Simon Fraser, Lord Lovat, on his way to the scaffold, who replied to the jeering mobs in the City:
"The greater the mischief, the better the sport".
It is not my purpose either to make sport or to raise mischief, beyond a degree that is perhaps healthy to the Whips—for whom we have such a strong personal affection. But I do believe that those
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Peers who sit in this House by virtue, not of merit, not of accomplishment, not of career success but by the accident of birth have a very special duty to perform. It is a duty not unlike that of being picked for jury service. If they have one obligation more than another which is laid upon them by history, it is the guardianship of our constitutional processes. Such indeed was something that stood out in the philosophy of the late noble Marquess, Lord Salisbury, who, as Leader of the Opposition in this House, declared the principle in the 1945 Parliament that at any rate Conservatives would make it their business to ensure that any Party endowed with a temporory majority in the other place should not be enabled to make irrevocable constitutional changes unbacked by the electorate. I do not want to go into the past history of this general controversy now, but there is a matter of principle at stake. It is because of this that I rise reluctantly at this moment humbly to remind your Lordships that the greater the power, the greater the abuse, and that all power is a trust. We are accountable for its exercise. I beg to move.
Amendment moved—
At end to insert:
"for the remainder of this Session; and that those Lords designated members of the European Parliament thereafter shall only be so designated after a process of election."—(The Earl of Lauderdale.)
3.31 p.m.
LORD BESWICK: My Lords, we are witnessing one of the most interesting ironies of this House. On the one hand we have the noble Earl, Lord Lauderdale, the strongest voice on the Benches opposite against the idea of joining the European Economic Community, the one man who put forward great arguments against going into the European Parliament at all, and on the other hand we have the noble Lord the Leader of the House, Lord Windlesham, a great believer in and champion of the European idea, turning down the proposals made in good faith by the noble Earl, Lord Lauderdale, for giving a vestige of respectability to the European gathering. I should have thought that the noble Lord the Leader of the House would have been a little more forthcoming and would have been in a better position to welcome what was said on the Back Benches there. After all, it would be something of a fig

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leaf for this European Parliament, would it not?—the one element of democracy either in this House or that—if we had some process of election for those whom we send there. Irrespective of whether we agree with sending anyone to Strasbourg, I should have thought we ought to learn of these things here and not through the channel of the gossip column of a newspaper. That is not good enough for this House, and I hope that the noble Lord the Leader of the House will have some inquiry made as to why it was able to he learnt in Fleet Street in that way instead of being properly announced in this House.
My Lords, having said that, I wish to make just two other comments. I agreed with a comment made by the noble Lord the Leader of the House when he said that the European Parliament has a position —and I quote, I think, correctly—"entirely independent of either House of Parliament". "Entirely independent"; of course it is entirely independent. I must say I thought some of the phrases he used in his speech were a little over-colourful when he said how proud we were of those who represented us in Stras-bourg, and spoke of the strong and enterprising line they had taken. May I ask whether the noble Lord the Leader of the House, when he comes to reply, can give some indication of what benefits have accrued to the British people as a result of the strong and enterprising line taken by the noble Peers in Strasbourg? Will he also say, when he refers to the resignation of the noble Lord, Lord Brecon, and to the appointment of Lord Lothian, what he meant by there being a loss to Wales but a gain to Scotland? Would he indicate a little more precisely the areas in which Scotland will gain as a result of the representation by Lord Lothian in Strasbourg? I should have thought that in this connection, as was originally announced, we ought to be given a little more information as to what the noble Lord the Leader of the House bases his speech on.
My other point is this. As is well known—it has not been hidden—the Party for which I speak does not send anyone by any process to Strasbourg. Therefore I do not think that we are entitled to say how noble Lords opposite are selected or elected. I think this is a matter which, for the time being, at any rate, has to be
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settled on the Benches opposite. At the same time. I feel that the noble Earl, Lord Lauderdale, put forward a strong case, and it is with great interest that I look forward to hearing what the noble Lord the Leader of the House has to say in reply.
3.38 p.m.
LORD GLADWYN: My Lords, as a Liberal Member of the delegation to the European Parliament and in the presence of the fact that the Labour Party spokesman has just said that he does not really want to intervene in the practicalities of the election of representatives to the European Parliament for the moment, I should like to make a few remarks about the important questions of principle which have emerged, both in the declaration of the noble Lord the Leader of the House and in the statement of the noble Earl, Lord Lauderdale. I was glad to hear that the noble Lord the Leader of the House, on behalf of the Government, maintained that direct elections were a desirable objective and, indeed, forming part of the Treaty of Rome, represent an obligation on us. We must work for that. I believe that it is the intention of the Government to do so. But we must all recognise that in practice it will be a long time before these direct elections on a European scale can in fact be organised. Apart from anything else, at the moment it is very difficult to apply a scheme for the constitution of a House with, say, 500 to 600 people elected from all over Europe in accordance with the same electoral law, probably by proportional representation, which is not accepted by all member States at the moment, and so on, in which naturally the smaller States would have less representation than at present. That is a difficulty that has to be faced and overcome. It will happen.
Equally, we must make more progress than at present with the emergence, so to speak, of the constitution of the European Union which has been laid down as an objective to be achieved as early as 1980. As your Lordships will know, the Parliament, Commission and, indeed, Ministers are bending their minds towards forms of a European constitution involving many more powers for the Parliament. The way in which the new Community will work is now under active consideration in the Parliament. The work is not as appreciated as it might

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be by the noble Lord who has just sat down. Work is indeed being carried on on the whole structure of the democratic community that we are pledged to establish in 1980. But it cannot happen now, and probably will not happen before 1980, or whenever the full constitution is agreed upon and becomes applicable.
In the absence of direct elections in accordance with the Treaty, it is however entirely possible to form a Parliament out of delegations which are nominated by the various Parliaments of the Member States. The system by which these delegations are nominated varies in the various Parliaments at this moment, as the noble Earl, Lord Lauderdale, said. There is no doubt a form of election in some Parliaments among the members of those Parliaments. Our system is not that; it is nomination, as we all know, by the Whips. It has been criticised by some, but at least it has this virtue: that it does provide for adequate representation for the Oppositions. In the case of the Liberal Opposition I fear it is not adequate—indeed, we think it is quite unfair. It would be more suitable, in our view, if the proportions of the Parties in the Delegation reflected the votes cast in a General Election. However, we find it difficult to imagine that we shall be able to persuade the authorities of the justice of our view. I repeat, the present system is inherently unjust. Anyhow, at the moment the delegates are nominated by the Whips, and at any rate the Labour Party, if it cared to join in the work of this Parliament, in this constructive work, which it will not do at the moment, would find itself adequately represented, from the point of view of numbers at least.
There is, however, a case for suggesting that even in our system of nomination there might be within all the Parties concerned an election of the members whom the Party itself desires to represent it in the Parliament of Europe. I cannot see any particular objection to that, although naturally it would have to be laid down in advance how many Peers should in principle form part of the delegation, and out of the total delegation how many should represent the Tory, Liberal and Labour Parties. But, given that, within the Parties themselves, I think there might be a case for free election among
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the members of the Party in Parliament, and I suggest that it might at least be considered by the Whips. It might even give considerable satisfaction to the noble Earl, Lord Lauderdale, who would, if that system were adopted, have every chance of forming part of the delegation.
THE EARL OF LAUDERDALE: My Lords, I appreciate the compliment which I rather sensed the noble Lord was coming to. I would not run.
LORD GLADWYN: My Lords, I am sorry to hear it. When the noble Earl realises what is happening there in a year or two's time he may regret his words. Anyhow, it seems to me that we must at the moment go ahead with some system of nomination to this Parliament of Europe. The only difficulty, and it is a serious one, is that though this system of ours is workable it results in the nomination of very hard-worked Members of Parliament—and indeed, even some Peers may be said to be very hard-worked—so hard-worked indeed that there is a danger of the whole system's breaking down. For unless the Member of Parliament is not intending to fight the next election, in which case he need not spend a great deal of time in his constituency, he will find it increasingly difficult to attend an increasing number of sessions in Strasbourg, Luxembourg and Brussels, committees and so on during the whole course of the year. From the next year he may find it almost beyond his powers. There are to be no fewer than 14 plenary sessions of this Parliament in 1974. There were only 11 last year. The number of committee meetings is going to increase as well. All the Members are supposed to be members of two committees, so your Lordships can work it out. They may have to attend up to 110 to 120 working days outside Parliament. If they are Members of the House of Commons this will be extremely difficult. In fact, I do not think they will be able to carry on. The system really is in some danger of collapse.
Now, if that is so, there is only one other practical solution, it seems to me, and that is to contemplate the direct election of Members to the European Parliament on a national basis of some

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kind. All kinds of schemes have been put forward to this end. One is that all 36 delegates should be directly elected in various constituencies in the United Kingdom, and temporarily designated European Peers of Parliament, perhaps for the period of the sessions in Strasbourg. It is not so extreme as one might think; there is something to be said for it. They would be Members of Parliament; they might even be allowed to go into the Smoking Room of the House of Commons. They would represent directly electorates all over the country and they would therefore form a very good team to send to Strasbourg on a national basis. At any rate the system has the advantage that it would not break down. For they would obviously he able to spend a great part of their time there when they were not in their constituencies. It seems to me logical, perhaps inevitable, that this sort of thing is going to happen in the next few years, and I hope it will.
The final question is whether it is right for the nominated Members of this Parliament to be appointed for only the session, or for the period of the Parliament, or indefinitely. On the assumption that it would in practice be for the period of the Parliament. I appreciate what the noble Lord. Lord Windlesham, said and would associate myself with it. It seems to me only sensible, apart from all the constitutional implications, which are very complicated, that nominated Members of the European Parliament should be appointed for a fairly long period. If they were appointed only for Sessions they would not have any security of tenure; and I assure noble Lords that it takes at least a few months to get into the work and to play an intelligent part in the important committees, monetary and political, and so on. It is impossible to play your part properly unless you have several months' experience, which you would not have if you were appointed for only a session. Therefore, on purely practical grounds, I am certain that it is right to do as the noble Lord, Lord Windlesham, suggested: to nominate our Members of Parliament for an indefinite period on the assumption that it would in fact be for the life of the Parliament.
3.47 p.m.
LORD SHINWELL: My Lords, your Lordships' House has just witnessed a
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most remarkable transformation. From the euphoria which over a long period of years accompanied the speeches which the noble Lord, Lord Gladwyn, indulged in, we now have a speech delivered in the most muted tones.
LORD GLADWYN: Not at all!
LORD SHINWELL: It was one continuous apology: he says this is the very best we can do; he offers no reason at all why it should be regarded as having any quality whatever. It was almost a transmogrification.
LORD GLADWYN: My Lords, I can only suggest that the noble Lord is hardly interpreting what I said in the right way. I said that the Parliament was doing a lot of extremely valuable work. I regretted that the Labour Party was not there to help. I hope it will do better work in the future. That is what I said. I said that years ago and I say it now.
LORD SHINWELL: The noble Lord has not heard the end of it. I really do not want to trouble him unduly. I wanted to indulge in a very few observations, and I give this assurance, as did the noble Earl, Lord Lauderdale, that there is no personal criticism of the noble Marquess, Lord Lothian, for whom I have a high regard, as indeed, if I may say so in parenthesis, I had for his father many years ago, a man of remarkable brilliance. So there is no question of prejudice, or bias or malice. We are concerned with the principle. I really must say I have been astonished at the language used by the noble Lord, Lord Gladwyn, and by the noble Lord the Leader of the House. Both of them have spoken about the "European Parliament". There is no such thing as the European Parliament. There is the European Assembly. There is a delegation from your Lordships' House and from the other place. But there is no European Parliament, there is nothing Parliamentary about it. Nobody will suggest there is anything in the nature of democracy about it. There is not even, as in the case of your Lordships' House (which, as everybody knows, is not entirely democratic in principle or constitution) the hereditary principle, for which there is a great deal to be said. They decide that some people will go over there and that they will talk, and that is indeed all that they are being

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permitted to do. It is just a farce from beginning to end. I am not the only one to say that; the Press say it. There is hardly a Press comment about what has been going on in this European Assembly that has not been sometimes humorous, sometimes sardonic, or sometimes downright critical. It is just a farce. What impact have they made on the Commission? Perhaps the noble Lord the Leader of the House will tell us, in his reply, whether the Commission pay the slightest attention to them.
There was a suggestion some time ago that the Assembly would tell the Commission where they got off, give them the "brush-off", shrug them aside; but everybody knows that the Commission treat them with contempt. The noble Lord, Lord Gladwyn, says they do not. How do the Commission treat them then? Do they do what the European delegations say?
LORD GLADWYN: My Lords, the members of the Commission attend all, or most, of the meetings of the committees. They send very high level experts to the meetings of the political committee. They are invariably there when the plenary meets. They are interrogated. They make suggestions together with the Parliament. They help the Parliament's work and the Parliament helps them. The Parliament has now a great ally in the Commission. You ask any member of the Commission. It is true. The noble Lord does not know what is happening.
LORD SHINWELL: My Lords, the noble Lord should keep his breath to cool his porridge rather than indulge in this sort of thing in the presence of intelligent people. Of course the Commission know what is being said in this so-called "European Parliament" which, as everybody knows, is just an assembly. There is not a single achievement which they can claim, unless it is that they are able to talk. I know that that is sometimes regarded as an achievement.
I want to express sympathy with the noble Marquess, Lord Lothian. He was relegated from an honourable position in the Government on the Front Bench to the Back Bench. Well, it has happened with other people. I had to suffer it myself many years ago, though there was something voluntary about it. I must say that I am full of sympathy for him
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for being sent over there with all the trouble. Your Lordships' House is different from another place. Reading from the newspapers, who know all about it, it appears that those in the other place fly off in the morning from Gatwick or Heathrow, and they are no sooner there than they have to fly back again because the Whips demand their presence h the other place. They go backwards and forwards in a kind of constant shuffle. What a farce this is. Why should we put up with this sort of thing? It is bad enough to enter the Common Market without having this farce accompanying it.
With the greatest respect to the noble Earl, Lord Lauderdale, who made a fine speech (as he always does), indicating remarkable research on his part, one does not need intensive research to understand what is going on. Intuition is enough; instinct is sufficient; common sense or horse sense is enough without intensive research. I repeat that it is just a farce. I should like the noble Lord the Leader of the House, when he replies, not to use the term "European Parliament". There is nothing in the Treaty that provides for a European Parliament of this character. It is an assembly, and no more than that, with no authority whatever, and incapable of making an impact that is worth tuppence worth of gin. Why do we not stop it?
VISCOUNT BARRINGTON: My Lords, before the noble Lord sits down, could he perhaps explain to the House —or at any rate to me—what he means by the expression "a constant shuffle", which seems to me (at first hearing) a contradiction in terms?
LORD SHINWELL: My Lords, T must confess that I am interested in boxing, and I remember Muhamed Ali indulging in a "shuffle", or a "re-shuffle", when boxing. That is where I got the phrase.
VISCOUNT BARRINGTON: My Lords, I was merely questioning the adjective "constant".
3.55 p.m.
LORD BALFOUR OF INCHRYE: My Lords, when moving his Amendment the noble Earl, Lord Lauderdale, quoted some words of mine when we last debated this issue. He reminded your

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Lordships of my objection, which was shared by many noble Lords on all sides of the House, to the Executive having the power to appoint Members of a Legislature. That was my fundamental objection at the time and it still remains so, and I regret to say that since we last debated this issue it has been intensified by two things: one positive, and one negative. The positive is that we are constantly reading of the attempts of the European Assembly, or Parliament, call it which you like, to obtain more power and control over the Commission, more power over the affairs of the E.E.C.
I do not make any criticism of that, but it is a fact that the negative is that since we last debated this matter in your Lordships' House, and while that surge towards greater power is going on all the time in the Assembly, Her Majesty's Government do not seem to have advanced in any way at all as regards proposing some method other than nomination by the Executive of Members to what the noble Lord, Lord Shinwell, called the "pseudo legislative body"—call it what you like, but a body which is aiming to be a legislative body. Her Majesty's Government seem to have done nothing, and I should be very disappointed if, when he replies, my noble friend the Leader of the House cannot give us some indication as to when Her Majesty's Government are going to go to the first stage, that being some alteration of the present system of selection behind the scenes, through the usual chancels, but nothing seen obviously by all Members of your Lordships' House.
The second stage is one envisaged by the noble Lord, Lord Gladwyn, which I think is some long way ahead, some form of direct election. I am not touching on that matter at all. I would only ask for some information from Her Majesty's Government on the progress that they are making, and when they hope to be able to tell us that they have thought enough on the subject to introduce some new system of selection for those who are to be Members of the European Parliament. When I last spoke, in the speech to which the noble Earl was good enough to refer, I quoted the Commonwealth Parliamentary Association system of a form of indirect
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election, as any member of the C.P.A. knows. The Leader of the House, in those days the noble Earl, Lord Jellicoe, said that note was being taken of all suggestions made. He did not deal in his reply with the C.P.A. proposal. I was very willing to hear it knocked down if it was entirely unsound, but I heard nothing except a promise that the Government were thinking very seriously on this matter, and hoped soon to be able to say something. That is months ago, and I think that we are entitled to ask the noble Lord the I eader of the House in his reply to give us some measure of satisfaction on what progress has been made so far, and how soon the Government hope to be able to bring forward a Bill to change from the present under-the-table methods.
BARONESS HYLTON-FOSTER: My Lords, in the absence of our coordinator, the noble Lord, Lord Strang, I should like it to be known that by a method of informal election the Cross-Bench Peers selected a Peer to go to Strasbourg. With due respect to the noble Earl, it would not have been the slightest bit of good to prick people, as for sheriffs, because there are not so many noble Lords who could spare the time—and a lot of time is needed—for this very important job.
4.0 p.m.
LORD BOOTHBY: My Lords, may I add just one word? I am sure that I echo the congratulations and good wishes of all your Lordships on the appointment of the noble Marquess, Lord Lothian, to the European Parliament. We all have the highest possible regard for him, and I have no doubt that he will do well. But as one who sat in the Council of Europe for seven years, in the days when the appointment was made through the Whips' Office, perhaps I may say that the system worked pretty well because the Council of Europe never made any pretence at being a Parliament of any kind. It never had any real power. What it did was to bring the nations of Europe together. To a large extent it brought about the Franco-German rapprochement. The Council of Europe did quite a lot of good work, and I think it might have done a lot of better work if it had been more

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encouraged. But this is an entirely different situation; and I want to point out that this show is not working at the present time. I agree with my noble friend Lord Shinwell that the system is breaking down; and I was very interested to hear my noble friend Lord Gladwyn admit that as it is running at the present time it is in fact breaking down.
The stresses are becoming greater every day. Members of another place who have to go there have to be absent from their constituencies for weeks on end, and that is a situation which cannot be tolerated indefinitely by any constituency. Members of this place are hard-pressed and have to swirl about between Strasbourg and Brussels. That, in itself, is a crazy arrangement—having two centres. It is absolute madness to have Brussels and Strasbourg, with all the enormous expense of transporting the officials and the documents from one place to the other about every three weeks. The whole thing is breaking down, and I beg the noble Lord the Leader of the House to say, when he replies, that the Government will give serious consideration to this aspect. I do not think the other place will be able to stand it for much longer. Most of your Lordships who go there—and I am sure the noble Lord, Lord Gladwyn, will agree with me—are out of pocket, or very nearly out of pocket, as a result of going there. Anyway, it is a "frightful sweat" going there all these times.
I believe there is only one ultimate solution, and that is a system of direct election to this Assembly (and I am prepared to call it an Assembly) by the country, apart altogether from election to another place. There is no election to this House, nor should there be, but I should be delighted to stand as Member of the European Parliament for the North of Scotland any day—and I bet I should be elected. So, my Lords, that is my conclusion: I say "Direct elections; and Boothby for the North of Scotland!"
LORD INGLEWOOD: My Lords, in order to clear up any misunderstanding, may I ask my noble friend to let us know in his reply to this rather unsatisfactory situation exactly what is the period for which the noble Marquess is proposed to be appointed. It was said earlier that this
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was debatable ground. Can my noble friend tell us precisely what this period is, and whether it is the same as the period for which various noble Lords were appointed ten months ago?
4.5 p.m.
LORD WINDLESHAM: My Lords, perhaps I may conclude the debate on the Amendment which has been moved by the noble Earl, Lord Lauderdale. We have of course ranged very wide. We have been talking about the Motion to replace Lord Brecon by Lord Lothian, and the noble Earl, Lord Lauderdale, has again put down his Amendment. We have had a very wide-ranging debate on the European Parliament and on the way in which people should be selected to serve on it; on the tensions on them once they are there and on what the future pattern might be. I do not object to that at all, particularly because I accept entirely that the motivation of my noble friend Lord Lauderdale is the finest one that a Parliamentarian could bring to an initiative of this sort; and that is the vigilance shown by somebody who sits on the Back-Benches or on the Opposition side of the House to see that the Government are not getting away with more than they should. That is his motive, and I applaud it.
I am well aware that the noble Earl, the noble Lord, Lord Shinwell, and the noble Lord, Lord Blyton (who has not spoken to-day), are keeping a very keen eye on the Government in this field. That is one of the functions of Parliament. It may be very uncomfortable for Ministers at times, but it is necessary, acceptable and desirable, and I regard it in that light. The noble Lord, Lord Inglewood (if I may deal at this point with his direct question at the end of the debate), asked what would be the term of office for the noble Marquess, Lord Lothian, and the other Peers who serve in the European Parliament. The answer is that, on the advice given to us by the Clerk of the Parliaments, they would serve for the term of this Parliament. The noble Lord might like to look rather carefully in Hansard at what I said about the Clerk's advice. He will find the reasons spelt out there.
My Lords, may I now deal with one or two of the main points of criticism—and they have been points of criticism, strongly

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expressed sometimes—which have arisen in the debate? The noble Earl, Lord Lauderdale, and the noble Lord, Lord Beswick, made great play of the lack of notice. They spoke of a period of only 24 or 48 hours' notice that the House had of this Motion. The inference was of either discourtesy or sharp practice—at any rate, something which was undesirable. I have checked during the course of the debate, and I find that the Motion was put down last Thursday. It was put down in the middle of last week. It appeared on the Order Paper of Thursday, October 18, which was distributed to all your Lordships; and it has been on the Order Paper since then. The noble Lord, Lord Beswick, made great play of an article in the Daily Telegraph. He was outraged that he had seen this in the Daily Telegraph for the first time. That article appeared on Monday of this week: our Order Paper for Thursday showed the Motion down on the Order Paper.
The main point at issue, I think, is the question of what Parliament—both Houses of Parliament, incidentally—should do—
LORD BESWICK: My Lords, it is not a particularly important point but when the noble Lord refers to the Order Paper of Thursday he means the one dated Thursday which was posted Thursday night and probably reached us Monday morning. Is that it?
LORD WINDLESHAM: My Lords, I think the noble Lord had probably better look at what he said in his first intervention, and his second, to see if it is quite in line with that. Yes, it is the Order Paper for the 18th, which was received by Members, by post, on the 19th. The Daily Telegraph article appeared on Monday. So the inference, I think, that the Government have tried to slip this in at the last moment does not hold water. The noble Lord is a fair-minded man, and he will feel, perhaps, that that was not the strongest argument he would have wished to use had he had time to consider it.
The main point before this House and another place is what we should do now, in this early stage—after all, we joined the enlarged Community as a full member only at the beginning of this year—about Members of Parliament, and
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of your Lordships' House, who serve in the European Parliament. I do not want to take issue with the noble Lord, Lord Shinwell—it is always unproductive to do so—but he did not like the words "European Parliament". He said he would not have them used. I must tell him that the Assembly resolved on March 30, 1962, to change its name to the "European Parliament". My Lords, in this ten-month period, for reasons that I do not intend to go into now, there has been no consensus between the major Parties on whether or not Members of Parliament and Peers should serve at Strasbourg and at Luxembourg. I regret that. It is not a matter that we need to debate between us now, but it is a fact that there is no consensus. In the British Parliamentary system, so much depends on agreement between both sides: the Party in power and the Party out of power, the Independents, the Party on the Liberal Benches, whose interests are taken into account as well; and, in the main, the Government and the Opposition try to move in the same way.
In these circumstances, it seemed to my predecessor—and I would have done exactly the same if I had been in his shoes—and it seemed to the Lord President of the Council in another place that the best thing to do in this interim first stage in the development of the European Parliament—in the new relationship between the British Parliament and the institutions of the Community—was to proceed through the normal Parliamentary processes. I am not saying that the normal Parliamentary processes are the best for all purposes, or are necessarily the most appropriate; but I can claim —and I think the noble Lord, Lord Boothby, and other experienced Parliamentarians will agree with this—that the normal Parliamentary processes are that names are put before the House after a process of consultation. This is how the Select Committees are appointed. They speak with the authority of the House; they are not regarded as placemen of the Whips, and still less as placemen of the Government. This is how, outside Parliament, Members of Parliament and Peers have been appointed to the Council of Europe, to NATO, Parliamentarians to the Western European Union and to the various other bodies to which my noble friend Lord Lauderdale referred.

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It is wrong—and I say this to the noble Lord, Lord Balfour of Inchrye, with some deference—to assume, because the answer is not the one that one would like to see, that nothing has been done. My noble friend Lord Jellicoe said in the debate on December 20 that he would take very careful note of what was said in that debate and that he would discuss it with his colleagues elsewhere. I have studied the records and the papers, because the noble Earl, Lord Lauderdale, was good enough to give me advance notice last night of his intention to raise this matter; I have had the opportunity of looking at the background. I find that my noble friend honoured that obligation. But for the reasons that I have given he came to a conclusion, and he would have reported to the House, either during this debate or during the debate on Lord O'Hagan's Motion, in which he intended to take part, what his conclusions were. They are those that I have said: that in these circumstances it seems to us, the Government representatives in this House and in another place, that the best we can do is to continue with the system. This is not to say, as I tried to imply in my opening remarks, that we rule out any question of an electoral mandate. It is in the Treaty of Rome itself that there should be a move towards direct elections.
The noble Lord, Lord Gladwyn, who speaks with considerable experience as a Member of the European Parliament tells us that he thinks that maybe that ought to be achieved in two stages. He advocated an interim step to achieve some form of electoral membership and lighten the burden on the existing Members.
LORD GLADWYN: My Lords, simply because otherwise the existing system could break down.
LORD WINDLESHAM: My Lords, the noble Lord, Lord Boothby, spoke on these lines. Everyone who is close to the issue —and we must not assume that it is those with the strongest opinions who are closest to the issue—are aware that this is so. Therefore the Government want to consider all these matters. We want to do it on the basis of consensus. We want to do it with the co-operation of the Party opposite, because to set up new constitutional procedures of great significance without the consent of the major Opposition Party would be asking a great deal.
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I should like to repeat again what my noble friend Lord Jellicoe said in December when the same Amendment was discussed at the initiative of the noble Earl, Lord Lauderdale: that the Government are not dismissing this as a matter of no importance. We are aware of the great significance both in terms of the burden on the individuals and in terms of the mandate that the members of the British Parliament carry with them. But I would reject absolutely and completely the allegation that the European Parliament has no part to play, that it is a farce, that it is a charade. That is not so. If one goes into a new institution that is going to last for a very long time on that basis it is a most destructive way of looking at things. It must be our aim, as it is the aim of the noble Lord, Lord Gladwyn, to strengthen the European Parliament, to make it more effective; and that is the course the Government are set on.
4.15 p.m.
THE EARL OF LAUDERDALE: My Lords, if I may I will tender my apology to my noble friend the Leader of the House for the quite sincere belief, but evidently a mistaken one, that this Motion appeared on the Order Paper only yesterday morning instead of last Monday. I feel sure that my noble friend will accept my apology for not having studied the Order Paper closely enough. I should like to thank those who were good enough to join in this short exchange. I was interested to notice that the noble Lord, Lord Gladwyn, now accepts the view that meantime it would be well to have some electoral system within Parliament.
I was rather disturbed at one point made by my noble friend Lord Windlesham who was so courteous in his reply and who has been so careful to deal gently with me to-day. He mentioned the memorandum from his predecessor. According to my recollection, that can have been written only before, or around the time of, the Whitsun Recess. If it has been sitting in the Government in-tray from last Whitsun until now—which, if it was from his predecessor, must have been the case—surely it is not satisfactory that it should have been kept quiet for so long. That is my

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first point. I know that the noble Lord deserves and will have at all times the indulgence of the House when accidents occur; but it does emerge that a different view had been established in the mind of the then Leader of the House and was not disclosed, although it existed before last Whitsun, until now.
Then my noble friend continues to use the argument that unless there is consensus between the major Parties no progress on this matter can be made. He has not commented on the three or four suggestions which were repeated to-day. He has not commented on the suggestion that the terms of reference of the Committee of Selection could well be widened and that the effect of that would be to take this matter out of the problems of a Party consensus. My noble friend has said that the Government have this possibility very much in mind. This is what we were told last December. I should like to feel sure, which at the moment I do not, that we shall hear at some definite time—let us say, by Christmas or by the time Parliament reassembles in January—that the Government have come to a conclusion and that they will declare it to the House. I will gladly give way for a moment if my noble friend can answer just that point.
LORD WINDLESHAM: My Lords, the noble Lord can put down a Question for Oral or Written Answer at any time he wishes posing that exact Question and I shall answer it.
THE EARL OF LAUDERDALE: My Lords, I am not clear whether my noble friend is by implication inviting me not to press my Amendment; but I rather sense from the tone of that reply that he does not mind whether I press my Amendment or not. May I ask him whether he would like me to press my Amendment and clear the matter now by a Division or whether he would prefer that I ask leave of the House to withdraw it?
LORD WINDLESHAM: My Lords, neither the noble Earl nor the House will be astonished to hear that I prefer the latter.
THE EARL OF LAUDERDALE: My Lords, before asking the leave of the House to withdraw—and I should like to
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ask that leave but it is for the House to decide whether or nay—I would say to my noble friend with the greatest respect that, while I am doing my best to accept literally what he has said just now—as I accepted last December what his predecessor said—I am sure he will understand that if this matter arose again and we had once more to go through this rigmarole of a discussion, I cannot be quite so certain that I should feel so agreeable to the idea of seeking leave to withdraw my Amendment. However, with that caveat I beg leave of the House to withdraw the Amendment, and I believe that it would probably be to the interest of the House that that leave should be given if the House so wish it.
Amendment, by leave, withdrawn.
On Question, Motion agreed to.

OIL SUPPLIES
4.20 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, with permission, I will now repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry.
The Statement is as follows:
"During recent months we have increased our stocks of oil. We now have stocks of 79 days on a forward consumption basis and there are in addition some 30 days supply on the ocean. We are now in a position to meet requirements for some months ahead if there were an emergency.
"As to future supplies, there have been some losses through the pipelines to the Mediterranean; and the Arab States announced last week their intention to make cumulative cuts in their oil production. It would appear that there will be some variations between countries as to the extent and the manner in which such cuts will be applied and the future impact is uncertain. The effect of these various restrictions on United Kingdom oil supplies is so far slight.
"On prices, the OPEC countries have announced a steep and immediate increase in oil costs equivalent to 2p a gallon in breach of agreements. The Government are discussing these increases with other consumer nations.
"Given the uncertainties overall the Government consider that it would

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be prudent that certatin measures should be taken. It is naturally a time when we must ask the public to do everything in their power to avoid any wastage not only of oil but also of our total energy resources. I would ask that motorists should endeavour to cut down on petrol consumption and to use public transport to a greater extent where that is available. I would also hope that industrial and commercial users of energy would carefully examine any areas where they can make useful savings. I would ask domestic users to make all the savings that are possible in their homes, particularly with regard to heating appliances.
"In urging economy at home we clearly cannot permit exports to be uncontrolled. The Government will therefore take such powers as appropriate to control the export of oil and oil products beyond the Community.
"The Government do not consider it necessary to introduce a rationing scheme. In case we do ever need such a scheme, contingency plans have been brought to a state of readiness. There will of course be full prior consultations with industry, the oil companies and the motoring organisations should the Government decide that the implementation of these schemes is necessary. We shall, if required, bring before the House an enabling Bill that will grant us the powers to introduce these controls.
"Long before the recent announcements on the cost and supply of Middle East oil, the Government have been pursuing policies to develop our alternative energy supplies swiftly.
"We will continue to do everything possible to speed up the development of our oil and gas resources in the North Sea and we have asked the oil companies concerned to inform us of any delays that occur in developing their projects, and any matters that hamper them from proceeding as fast as possible with new schemes.
"The Coal Industry Act has had an important impact in arresting the decline in our coal production that had been allowed to take place in previous years, and we are in the course of discussing with the National Coal Board their long-range plans for further development of the industry.
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"We have reorganised the nuclear power industry and we will be making important decisions as to the development of nuclear power stations during the next few months.
"I will keep the House informed of further developments."
My Lords, that is the end of the Statement.
4.24 p.m.
LORD KENNET: My Lords, the House will be grateful to the noble Lord, Lord Drumalbyn, for repeating this Statement which, though it is not long, is certainly broad, and we shall all want time to read it to-morrow. The Statement probably marks the end of the era of profligacy with this valuable and increasingly scarce energy source, which may not be without salutary effect. I wonder whether the noble Lord would answer one or two questions, even so early as this? The Statement speaks of a price increase of 2p a gallon. Is this a flat rate across the board on all petroleum products or will it affect only some, and, if so, which? And above all, who will choose what it will affect?
I think that all noble Lords on this side of the House will wish to endorse the Government's appeal to the public to do everything in their power to avoid wastage, and to use public transport to a greater extent where that is available. Would not the noble Lord agree that the words, "where that is available" are the important part of this sentence? Can the Government soon get a decent prices and incomes policy so that urban transportation authorities will be enabled to keep going at all?—because they are rapidly folding up in many of our big cities. It will be a question of relating the wages of bus drivers to those of car makers.
My Lords, I think we must endorse the hope, indeed the request, that North Sea oil exploitation will proceed as fast as possible. Will the Government not lose sight, in this salutary haste, of the need for sound land use planning. And lastly, on the question of the coal industry and nuclear power, while it obviously becomes more urgent than ever that both these should be developed, will the Government now take charge of energy policy as a matter of urgency; will they determine it and will they enforce it in a way in which they do not at present? And on the question of nuclear energy,

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can the Government undertake that there will be no purchase of American reactors until the matter has been debated in this House? Lastly, my Lords, will the Government now increasingly make direct contact with the Governments of the Arab oil-exporting States instead of leaving the negotiations to the discretion of great multinational corporations?
4.27 p.m.
LORD GLADWYN: My Lords, the noble Lord will correct me if I am wrong, but as I understand it the Arab States are employing what they call cumulative cuts in oil production and doing so to the extent of 5 per cent. per month, and in the case of Saudi Arabia 10 per cent. per month, until such time as Resolution 242 of 1967 is fully implemented, presumably by the Security Council. If that is so, it is evident that unless we get some kind of settlement under Resolution 242 in the reasonably near future, the supplies of oil may be entirely cut off before long. Certainly if the negotiations last 10 months, which is quite possible, there will be no more oil anyhow from Saudi Arabia if this declaration is to be taken seriously. Therefore, would not the Government make serious representations to the Arab States involved to the effect that, at any rate, Her Majesty's Government are in favour of the implementation of Resolution 242? They have constantly declared their intention to put it into effect if they can, and the entire Security Council has come out in favour of that also. Would the Government therefore approach the Arab States in this sense, and represent to them that it is totally unreasonable to effect these cuts progressively, in any case to a country like Japan who has no interest in the dispute at all so far as can be seen, and also to ourselves who, after all, are doing our best to get a settlement within the limits of our possibilities?
LORD JANNER: My Lords, will the noble Lord—
LORD DRUMALBYN: My Lords, if I may I will answer those questions first, which I think would be in accordance with the usual practice. On the question of the size of the price increases, this is simply a calculation of what the increase in the Government "take" by
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Arab States amounts to right across the board, expressed in terms of pence per gallon. It does not mean that there will be a uniform increase for all products; it is a calculation. Secondly, on the question of urban transportation policy, I think that the noble Lord, Lord Kennet, will have ample opportunity to debate that in the debate that we shall he having next week. Thirdly, on the question of North Sea exploration and exploitation (I am not certain which the noble Lord mentioned but I think that they both apply), we shall be going ahead with this as fast as we can and we are very much aware of the need for sound land use planning in this connection.
The noble Lord asked whether the Government will take charge of the energy policy. The noble Lord may not be aware of it, but the Government have firm charge of the energy policy. The various strands of the energy policy are gathered together in the hands of my right honourable friend Mr. Boardman and I think that he is doing all that he can in these matters. So far as the purchase of American reactors is concerned, I am not in a position to give a guarantee to the noble Lord on this point myself, but I shall certainly convey what he has said to my right honourable friend Mr. Boardman.
With regard to the direct contact between Governments and oil exporting States, the British Government are in contact with the oil exporting States. Of course, this is now obviously necessary because what they are doing is affecting everyone; but I think one has to bear in mind at the same time that direct negotiations are a matter for the oil companies, and not least because five of the seven oil companies operating in these countries have strong American interests.
I take note of what the noble Lord, Lord Gladwyn, said. I do not think there is anything between us on this matter. As I said, the Government are in touch with the Arab States concerned with these matters, and I am sure that what they have to say will certainly take account of the particular point he raised.
LORD JANNER: My Lords, I thank the noble Lord for what he has said, but surely it is time we realised, in view of the kind of action that has been taken from time to time by the oil States, that

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energy problems should have been attended to long ago. May I ask the noble Lord whether he will see that our country will not succumb to blackmail (I call it "blackmoil") on the part of the Arab States? We have already seen the results of giving way to threats. If I may give an example, the Grand Mufti, whom we appeased, actually joined Hitler in the course of the war against us. Will the noble Lord keep these things in mind, and see to it that if there is an attempt to blackmail us we shall not succumb to it?
LORD DRUMALBYN: My Lords, the noble Lord talks about the preparation of energy policies. I would remind him that, as his noble friend Lord Kennet has mentioned, this covers the whole sphere of energy. He will be aware that we have been paying great attention, for example, to the development of our coal resources, and, indeed, are going to spend something of the order of £150 million to help coal next year. We have to a large extent stopped the rundown of the mines and the rundown of manpower. On the oil side, one has to bear in mind that at the moment the situation is not clear. We are not in a position to make clear decisions because we do not know what the situation is. The noble Lord asks whether we are going to succumb to blackmail. It is not in the nature of this country to succumb to blackmail, and I can assure him that we shall not do that.
LORD DAVIES OF LEEK: My Lords, while thanking the noble Lord for the Statement, may I ask whether the Government have considered the implications of the policy that has been suggested in this constructive Statement to both Houses of Parliament to-day? First, if we are asking motorists to help by carrying passengers from their homes to their offices or jobs, there should be some discussion with insurance companies to cover contingencies of accidents. This should be looked into. Secondly, without belabouring the point and asking long supplementaries, I want to endorse wholeheartedly the supplementary question of my noble friend on the Front Bench about nuclear reactors. There is a conspiracy of silence about the consequences of using nuclear reactors, and the world must realise that it is not a feasible policy to get either a 40 or 50 per cent. power energy as our knowledge of waste
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materials stands to-day. Therefore, may we be assured of the possibility of a thorough debate in the near future on the energy policy, particularly in relation to nuclear energy, and before we adopt this polluting reactor that it has been suggested in the Press we are to get from America?
LORD DRUMALBYN: My Lords, I am grateful to the noble Lord, Lord Davies of Leek. The point he makes about insurance is one of which we are all aware from past experience. I am sure it will be borne in mind, but I will make sure it is by drawing it to the attention of my right honourable friend. On nuclear reactors, as I said, the Government will be making an announcement in due course. I should have thought, in the light of that announcement, then would be the right time at which to have a debate.
LORD KENNET: My Lords, I wonder whether I may press the noble Lord a little further about energy policy and nuclear reactors together. The noble Lord may remember that about a year ago we had a debate on energy policy, and I think there was a general feeling in the House that it was difficult to know what was true about the costs of different forms of energy, because there was no unified authority whose job it was to find out. We were at the mercy of conflicting claims. The noble Lord spoke eloquently on the way in which Mr. Boardman holds all the threads in his hands, but I have not even now seen any independent unified assessment of the costs of different forms of energy. It is this that we desperately need. May I once again press the noble Lord to go as far as he can in giving an undertaking to this House that there will be no purchase of American civil nuclear reactors until the matter has been debated once again in Parliament?
LORD DRUMALBYN: My Lords, the noble Lord will be aware that to a certain extent the costs of producing nuclear energy must be speculative, because we have not yet got the advanced gas-cooled reactors in operation, compared with the Magnox reactors and so on. However, I am certain that this is a point that is being well looked after at the present time. It would be absurd to attempt to make decisions without a comparison of the estimated cost. It would remain true

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that they are to some extent speculative as we are dealing with such a new field. On the question of not making a decision to buy the light water American reactor before referring the matter to Parliament, as I said, I am not in a position to give a guarantee, but I will ask my right honourable friend about this and I will write to the noble Lord.
LORD BESWICK: My Lords, can the noble Lord clarify one point about the cost to be passed on to the consumer? Will it be the actual increase of cost of the raw material, or will it be the increased cost of the raw material plus, according to the Price Commission formula, the usual profit percentage? Can the Government give an assurance on that point?
LORD DRUMALBYN: My Lords, this is obviously a matter for the Price Commission. I am afraid I cannot answer that question.
LORD BESWICK: My Lords, what is involved here is so important that the Government themselves should accept responsibility in this matter.
LORD DRUMALBYN: My Lords, I am sure the Government will have a look at this matter, but it is governed at present by the law and the rules laid down by which the Price Commission have to operate.
BARONESS GAITSKELL: My Lords, may I ask the noble Lord how he thinks public transport and the Coal Board will manage to help us in this present position, particularly as when we debated both the coal strike and the railways the Government were out to squeeze both these nationalised industries in a really bad way?
LORD DRUMALBYN: My Lords, the noble Baroness will be aware that these matters are under discussion at the present time. So far as road transport is concerned, if, as I hope, there is a response to my right honourable friend's appeal to motorists to use public transport when necessary, this will greatly reduce the number of cars on the road and will therefore make it easier for public transport to be used in this way.
LORD ARCHIBALD: My Lords, may I ask the noble Lord whether he thinks
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that the appeal to motorists to use public transport is likely to be helped by the situation which I find, having anticipated this Bill, and having used public transport not only to-day but on other occasions, that when you go into the tube station there is a notice saying that owing to the shortage of staff there will be fewer trains and passengers will be delayed whatever their destination? And when one knows that the shortage of staff is due to the Government's pay policy, how does the noble Lord reconcile this appeal with the policy the Government are carrying out on transport staff pay?
LORD DRUMALBYN: My Lords, we know the position as to shortages of staff, but one can reconcile this perfectly easily on the basis of the same kind of public spirit that the noble Lord has himself shown.
LORD JANNER: My Lords, while thanking the noble Lord for his Statement with regard to what I call "blackmoil", may I ask him whether, now that we are members of the E.E.C., he will seek ways and means by which the dastardly action on the part of the Arab States in refusing the Netherlands any oil will be considered, to see how that event can be dealt with by the European Community?
LORD DRUMALBYN: My Lords, I think this is a matter for negotiation and that on an occasion like this it would be a mistake to throw around recriminations of this kind. We shall have to negotiate with the Arab States on these matters and I hope we shall find a satisfactory solution in the end.
LORD GARNSWORTHY: My Lords, is the noble Lord aware that members of the public go to catch buses and Green Line coaches, and they just do not run? Where I live, if a Green Line does not run to London it can mean waiting over an hour for the next one. May I ask the noble Lord what the Government are prepared to do to improve the service, so that members of the public may be in a position to respond to his appeal?
LORD DRUMALBYN: My Lords, obviously that question does not arise immediately out of the Statement that I have made, but of course I shall study

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what the noble Lord has said and bring it to the attention of the Minister of Transport.

COUNCIL OF THE EUROPEAN COMMUNITIES
4.42 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like, by leave of the House, to repeat a Statement being made in another place by my right honourable friend the Chancellor of the Duchy of Lancaster about the main matters considered in the Council of the European Communities since last reported to the House on July 25. The Statement is as follows:
"There have been six meetings—Foreign Ministers (twice), Agriculture Ministers (twice), Economic Ministers and Finance Ministers.
"Economic Ministers met in Tokyo on September 11–12 in preparation for the GATT ministerial meeting which successfully launched the multilateral trade negotiations.
"Foreign Ministers met on September 20 and October 15. They considered: the question of the Community's participation in negotiations for a new International Sugar Agreement; relations between the Community and the Council for Mutual Economic Assistance (COMECON); the Commission's proposals for an industrial and technological policy programme; measures to improve working relations between the Council of Ministers and the European Parliament; the mandate for a new association agreement between the Community and certain developing countries in Africa, the Caribbean and the Pacific; and a report on progress with the proposals for a Regional Development Fund.
"Finance Ministers met on September 21 to discuss the Committee's Budget for 1974, which is now being considered by the European Parliament. It amounts to 5,026 million units of account (mua), slightly lower than the revised budget for 1973. The United Kingdom contribution will be about £206 million gross and £90 million net which is of the same order as the forecast in last year's Public Ex-
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penditure White Paper (Cmnd. 5178). Finance Ministers agreed that as soon as the amount of money to be allocated to the Regional Development Fund had been decided, funds would be made immediately available.
"At the meeting of Agriculture Ministers on September 24–25, my right honourable friend raised the subject of animal welfare and the Commission undertook to carry out an urgent study of these problems. They also had a preliminary discussion on the Commission's proposals for the future Community sugar régime.
"At their meeting on October 22–23 the Agriculture Ministers held a detailed discussion on the Commission's draft directive on aids for mountainous and less favoured agricultural areas, including the criteria for assistance, the measures to be applied and the level of FEOGA contribution. They also considered the possibility of extending some form of assistance for dairy cows in these areas; and invited the Commission to put forward proposals for further consideration. The Council will seek to reach firm conclusions on these matters at its next meeting in November."
My Lords, that is the end of the Statement.
4.45 p.m.
LORD SHEPHERD: My Lords, I feel that I must thank the noble Baroness for repeating this Statement and for fulfilling the undertaking which the Government gave, I think some 12 months ago, that they would keep the House informed on matters which have been dealt with in the Council of Ministers. Prior to the Statements we had a debate, and whether or not the House was satisfied at the end with the explanation of the noble Lord, Lord Windlesham, I believe it would be agreed that there was a sense of unease at the Parliamentary control, both at Strasbourg and I think in this country. We now have this Statement. Unless one had kept in very close touch with one's newspapers, much of this Statement would mean absolutely nothing. I therefore question again the adequacy of our existing Parliamentary arrangements which Parliament uses to have some control, some influence, on ministerial actions at Brussels. There is a Report of my noble friend Lord Maybray-King now before the

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House. It may be that from that Report we shall be able to devise ways and means by which Parliament may exercise control and influence, and particularly we may be able to take these Statements off the Floor of the House and to ask the more pertinent questions which these Statements justify.
I have only two points I wish the noble Baroness to confirm. We have been told that the Foreign Ministers considered
"the question of the Community's participation in negotiations for a new International Sugar Agreement".
Would the noble Baroness confirm that the Ministers could not reach agreement as a consequence of the French attitude; that the Common Market was not able to be present at the Conference on International Sugar, and that the whole field of sugar manufacture, of refining and of growing, is now in complete disarray, and that much of the Government's undertakings cease to be bankable? Would she confirm that it was a consequence of the French action that the E.E.C. could not be present at the meeting?
In regard to the Regional Development Fund, could the noble Baroness give any indication when Parliament will know what funds are likely to be available for regional development in this country? I was pleased to see that some steps have been taken to help in the more mountainous and less favoured agricultural areas, particularly those in Scotland, and I wonder whether the noble Baroness would give us some further information about assistance, particularly to dairy cow operations in that area. We hope that the Government will stand up very firmly in this particular field, because these more backward areas of our country are in need of assistance. It is difficult to go any further with this Statement in the light of the time, but I hope that perhaps by the next time we have a report we may have the machinery for a proper examination of the conduct of the Government at Brussels.
LORD GLADWYN: My Lords, I should like to thank the noble Baroness for keeping us informed to the extent that she has kept us informed, but to note, however, that it is not a very informative Statement, as such. I would
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also ask whether she would not agree that if the Labour Party would like to be further informed as to what is happening behind the scenes and to get all the gossip, which we fortunately have, with regard to progress in all these spheres, they merely have to nominate a delegation to the European Parliament.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like to thank the noble Lord, Lord Shepherd, and the noble Lord, Lord Gladwyn. I agree that the question of Parliamentary control, allied to the Report now issued by the noble Lord, Lord Maybray-King, is one of great importance to this House. I note what the noble Lord, Lord Shepherd, says about a possible arrangement for taking Statements such as these off the Floor of the House. It is true that when we meet together after the Summer Recess, and one wishes to undertake one's obligations of reporting to the House and has to report on six meetings, the Statement is bound to cover a great number of subjects.
On the question of the International Sugar Agreement, it is perfectly true that no agreement has yet been reached, but I would say again that Her Majesty's Government stand firmly by the assurances which were given to the developing sugar-producing members of the Commonwealth Sugar Agreement at the meetings in Lancaster House in June, 1971, and in March, 1973, about the access of their sugar into the enlarged Community after the Commonwealth Sugar Agreement expires at the end of 1974; and despite the fact that we have not yet reached agreement, we are encouraged by the fact that the Commission seemed to agree with our interpretation of the Community's undertaking on sugar. Proposals on sugar which were tabled in July and which are now under consideration include the provision for the import of 1·4 million tons of sugar from developing countries covered by the Protocol 22 of the Treaty of Accession and India. Despite the fact that the noble Lord suspects that the French delegation at the moment are not themselves convinced of the total merits of this proposal, I can say that I am confident that these proposals will eventually be accepted.

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The noble Lord asked about the Regional Development Fund and the decisions on setting up the Fund. The matter of the size of the Fund will be taken later in the autumn by the Council itself. On the question of dairy cows, of course we are not in agreement ourselves on this arrangement. We were hoping that the assistance to the hill areas would be confined to sheep, but there are mountainous areas within the Community where cows are pastured, and some members of the Community feel that assistance should also be applied to them; but no decision has yet been taken. On the point raised by the noble Lord, Lord Gladwyn—who has suddenly fled this House—I can only say that I entirely agree with him that if members of the Labour Party were able to join the Parliamentary Assembly in Europe they would be able, I am sure, to make a great contribution.
LORD SHEPHERD: My Lords, I am really surprised that the noble Baroness can find any connection with one of these "fly-by-night" Peers who make quite outrageous statements and then do not even have the courtesy either to hear the Minister's reply or to hear a possible retort. All I can say, through Hansard, which presumably the noble Lord, Lord Gladwyn, reads, is that we might catch a flea when we have the gracious Speech next week.
LORD BALERNO: My Lords, may I ask my noble friend whether the mountainous regions could possibly also include the island regions? There are more dairy cows and more need for milk in the islands off Scotland than there are perhaps in the Highlands. There are very few Highland dairy herds producing milk, though there are some, but milk for the Highlands can be easily transported, whereas milk for the islands cannot be so easily transported, and the dairy farmers on the islands have to pay exceedingly high freight. That, coming on top of the very high feeding costs at the present time, is almost going to ensure that there will be no dairy cows on the islands off Scotland unless something is done about it.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I will certainly convey the feeling of my noble friend Lord Balerno to my right honourable
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friend concerning the island regions. I have myself, of course, been to the Outer Hebrides and many of the islands off Scotland, and I agree that the freight charges do make the transport of milk from the Mainland which happens now very expensive. I will certainly bear that in mind.
LORD DAVIES OF LEEK: My Lords, may I suggest to the noble Baroness two crisp points? Is she aware that we need not be at either Brussels or Strasbourg, when they move the gipsy caravan of Parliament from place to place, to know what is going on? Some of us who try to follow meticulously and fill up the forms to get the information know that members must be overwhelmed with Statutory Instruments and pieces of paper, and things are passed which neither the Government side nor our side knows about. That ought to be altered. Secondly, regarding agriculture, as somebody who has taken an interest in it over many years may I ask whether we are going to co-ordinate on one important factor: the attack on foot and mouth disease? Are we getting a guarantee from the E.E.C. that the same meticulous care will be given to the eradication of foot and mouth disease as has been given by any Government's policy for agriculture in this country for our animals?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, on the question of whether too many documents are available, may I say that at one time there was a complaint that there were not enough documents. I suggest that this could be the kind of matter to debate when we have an opportunity to discuss the Report of the noble Lord, Lord Maybray-King. On the question of the protective measures on foot and mouth disease, these are, of course, of prime importance to this country, and if we are going to have a unified policy within the European Community this must be one of the arrangements.

PENSIONERS' PAYMENTS AND NATIONAL INSURANCE BILL
4.56 p.m.
LORD ABERDARE: My Lords, I beg to move that this Bill be now read a second time. Your Lordships will I am sure be familiar with the purpose of this Bill,

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which is to enable a special payment of £10 to be made to some 8 million pensioners during the last week of November. Our intention to make this payment was announced by the Prime Minister in connection with Stage 3 of our counter-inflation policy, and of course it follows the example of the similar lump sum payment made this time last year.
As was last year's payment, it must be seen in the context of our anti-inflation policy and as an additional payment in the exceptional circumstances of 1973. It has no part in our long-term strategy for pensions which, as your Lordships are well aware, is based on an annual review designed at least to keep pace with the rise in the cost of living. This annual review has resulted in considerably increased pensions from the beginning of this month, an extra £1·60 for a married couple, an extra £1 for a single person. That is an increase on the former rate of almost 15 per cent. compared with an increase in the cost of living from October, 1972, to September, 1973, of just under 8 per cent. Like the previous increases of 1971 and 1972 this is a considerable real improvement in purchasing power—almost certainly a higher rate than in either of those two years, and possibly higher than in any previous period of 12 months. The lump sum payment therefore has nothing whatever to do with our long-term strategy of increasing pensions to keep them at least in line with the increase in the cost of living, but it has a lot to do with one of our objectives in countering inflation; that is, to improve the position of pensioners. Last year this was generally accepted as a welcome provision and I trust that once again your Lordships will welcome it.
I doubt whether I need to go through the clauses of the Bill in detail, but perhaps I should draw attention to one or two aspects. So far as Clause 1 is concerned, I need only say that the payment is not taxable and will be disregarded for any means test. Clause 2 sets out the various qualifying benefits and Clause 3 the method of payment. Clause 5 concerns the "nitty-gritty", the method of financing most of this payment by increased weekly flaterate contributions from employers, the self-employed and the non-employed. And, of course, these higher contributions will attract the usual Exchequer supple-
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ment. We estimate that these increased contributions, which are due to come into effect on January 21 next, will yield about £14 million in the present financial year and about £90 million in a full year. The yield of these higher contributions and the Exchequer supplement by the autumn of next year will approximately equal the £80 million which these special lump sum payments will cost.
The only other clause to which I would draw attention is Clause 6, which ensures that, as at present, disablement benefit will continue to be awarded in all cases in which pneumoconiosis as defined in the Industrial Injuries Act is diagnosed by a pneumoconiosis medical board. A recent report of the Industrial Injuries Advisory Council has concluded that they can no longer support the view expressed in 1953, that virtually everyone in whom pneumoconiosis is diagnosed ought to have an award of disablement benefit. We have carefully considered the Council's report and have decided that, because of the special nature of pneumoconiosis, it would be wrong to make a change in the present position with regard to the diagnosis and assessment of this disease. I can only say that as one who comes from the coal mining area of South Wales I confidently recommend this clause to your Lordships, and I am sure that it will be welcomed not only by my friends from Wales but also by all those who come from coal mining areas.
In conclusion, may I again express the Government's gratitude to the Post Office staff, to sub-postmasters and to the staff of my own Department on whom will fall the burden of implementing the major provision of this Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Aberdare.)
5.1 p.m.
BARONESS PHILLIPS: My Lords, I thank the Minister for introducing the Bill in his customary straightforward manner. After some of the long speeches that we have had on other matters, we are dealing here with a very important matter in a very practical and commonsense way. Of course on this side of the House, as in all parts of the House, we welcome the payments to the pensioners. I am intrigued to see that we refer now to "lump sum" payments. Perhaps £10 is not as good a lump sum as the sum

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which the chairman of a meat company received recently; but nevertheless it is of course welcome by those who are fortunate enough to collect it; those who come within the somewhat arbitrary lines which have been drawn by the Bill. The Prime Minister mentioned this recently, but I should like to draw attention to the question of who is giving this cash—if it is a gift at all—to the retirement pensioners.
The total cost of the special payments, according to the Preamble, will be £80 million, and the noble Lord has confirmed this. I used to teach mathematics (and I know that I will be told that my calculations are wrong) and I calculate that the increase in the flat rate contributions will yield £90 million in a full year. If we are to have an increase after an annual review, I feel certain that the Government will again come back and ask for an increase in the flat rate contributions to pay for it. I think we can assume that on this occasion, as on any other occasion in connection with Insurance, the employers or employees or some section of the working population, are paying for anything given to the pensioners. This may come from the National Insurance Fund, but I remind your Lordships that this is not a fund which comes by magic; it is a fund to which people are contributing. I am not suggesting that people would not wish to contribute, but it must be clear that this is no magic godmother or godfather gift—this is something which comes from the National Insurance total.
I notice that the administrative cost of implementing the Bill is substantial—about £1 million—but that it will have no effect on manpower. I also notice that the Minister in another place said that there was no need for any pensioner to make a special application; that this sum would be paid at the Post Office as was the case before. I am rather intrigued to know what costs £1 million. If we are not employing any extra staff and there is no special application to be made, one can only assume that it will cost £1 million to print the books. I suggest that there must be an easier and cheaper way of doing this. I do not wish in any way to look a gifthorse in the mouth, and I would not want to rehearse the arguments that there are other people who need this £10 as much as
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those who will be receiving it: the young widows, the younger men or women on invalidity pension. I will not cover that ground again.
There is one clear anomaly which the Government should have looked at from last year; namely, that the spouse of somebody living on retirement pension does not receive this benefit if she is not over 60. I would remind the Government that the actual retirement pension is paid jointly. In our debate on the Social Security Act—as it is now—there was great emphasis placed on the fact that the wife is still described as a dependant. If somebody has retired and is living on retirement pension—or existing on retirement pension—and is receiving a joint pension for himself and his wife, it seems reasonable that whatever her age, if she happens to be 59½, she should equally be given the £10 and should not on this one occasion only be regarded as a single assessment.
I wholeheartedly congratulate the Government on one clause—the Minister will he delighted to know that. I can hand him one accolade, and that is the one on pneumoconiosis. I am delighted that the Government have resisted any suggestion that there should be a change. I remember many years ago resolutions which came to me from the mining areas on a disease which until quite recently was not accepted as one which ranked for any consideration tinder the Industrial Compensation Acts. It was a disease which killed many people but which was never diagnosed as the reason for their deaths.
My Lords, we wish great joy to all those who receive this benefit, and the Government have very sensibly allowed it to be given a little earlier this time. I am happy to see that, unlike a widow, a gentleman who cohabits, provided he is over 65, may also receive £10 for himself and his cohabiting lady.
5.7 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, neither do I want to look a gift horse too much in the mouth, and we should be grateful for small mercies. But this is an occasion when one or two of the inadequacies which are implied by this Bill should be brought out. In fact I find three real inadequacies. First of all, I find the amount inadequate in that

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it is, by my reckoning, which may be a little out, 16 per cent. less than last year which I think is a great pity. If the Government were going to repeat this £10 gift, it should have at least kept pace with the rise in the cost of living over the past year. We all know that one of the reasons why this is not done is that it would draw undue attention to how much the rise in the cost of living has been.
Secondly, I find an inadequacy of extent in this Bill. The noble Baroness, Lady Phillips, touched on this, but there are also a few other categories. I would particularly mention the people on disability pensions and people receiving chronic sickness allowances under this particular age. I do not see why, given that the Government have planned this in plenty of time and not, like last year, had to do it rather suddenly, something should not have been done to help the really poor in those categories, and that the benefit should not just be confined to retirement pensioners.
Thirdly, the main inadequacy is the inadequate way in which we treat our old people. For Mr. Heath or Mr. Barber to play Santa Clause is not enough. I pay tribute to the Conservative Government's decision to have annual reviews of pensions, even though I do not pay tribute to the amount of inflation that has made it absolutely essential that they should do so. The fact remains that our State pensions for the elderly in this country are among the lowest in Europe. In real terms they are probably lower than anywhere except Ireland and Italy in the European Economic Community. Pensions are well below the level of weekly income guaranteed by the Department of Health and Social Security for survival in this country, which is the reason why one-third of all pensioners qualify for supplementary benefits.
I think there are many things that can be done about this. There are many ways of helping the pensioners which we do not sufficiently explore. I was particularly interested in the idea put forward by Des Wilson recently at Hove, that possibly there should be a special rate support grant, for those towns which attract a large number of the elderly in retirement, in order to enable them to produce better facilities for the elderly. But when we get down to the root of it,
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that root is: what is the pension going to be? What is it going to be tied to, and how adequate is it going to be, compared with other people's incomes? I think we have not yet gone far enough. I honour the Government's pledge that they will try to ensure that pensions keep pace with the rise in the cost of living, but it is no use merely keeping pace with the rise in the cost of living if the base from which they start is totally inadequate.
My Party have said that the only real basis for pensions is to tie them to 50 per cent. of average male earnings for a couple and 33⅓ per cent. for a single person. This is expensive, and the cost in a full year would probably be £1,100 million. That is a very great deal of money. We would raise it as a social security tax, with a larger proportion from the employer than at present, as is the custom on the Continent most of the time; and we would make the graduated tax continue as a percentage of income, however big a person's income or salary was, right up the scale. My Lords, £1,100 million is a lot of money: perhaps this country cannot afford it. Perhaps we can afford to pay £800 million on Maplin, £800 million on the Channel Tunnel, £600 million on Concorde but not £1,100 million a year on old age pensioners. Of course I take the point that those three things are "one-off" ventures, but we appear to be having at least one of these "one-off" ventures every year, if not two every year. I shall also be told that these are productive investments.
The question which society as a whole, and Parliament on behalf of society, must eventually decide, and must decide in a different way from the way it has done so far, is what is really the return that we want on our investment in this country? I should have thought it was a comfortable old age, relieved of the distress and real poverty which now exists, and that that was probably the best investment we could ever make. This Bill shows a welcome flexibility from the Government in producing a special bonus at this particular time, and I welcome it. When I first proposed it, four years ago, I was told by the Government that it was impossible, but I am delighted that the Government now find it is possible. But that it should be necessary to pass this "Santa Claus" Bill each year for two years seems to me to

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be a dreadful indictment of the whole pensions scheme and of the priorities that we give to the old in our society.
5.15 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, I apologise to the House for not having put my name on the list of speakers, but I was listening to the news last Saturday morning on the B.B.C. and then to the proceedings of the previous day in Parliament, when a reference was made to an inclusion in one of the clauses of the Bill, which I will mention in a moment. Before coming to that, may I say to the Minister, joining my noble friend Lady Phillips, that we welcome this Bill. We welcome the payment of the Christmas bonus to the retired pensioners. I notice that the Minister was careful to say that it was a payment to pensioners. That is not quite the case: the adjective needs to be put in because so many other pensioners are excluded and it is a payment to retirement pensioners under the National Insurance Act.
There is one thing I should like to say to the Minister on the question of finance. I notice that additional contributions are to be levied on the employers, the self-employed and the non-employed, with a contribution from the Exchequer; and the total of the two figures, as I understand it from the Bill, will be £113 million, or something of that nature. The cost of the bonus, payment, benefit, or whatever you like to call it, is in the neighbourhood of £80 million and I should like the Minister to make an observation on the amount that is to be collected in the way that I have indicated, plus the amount that the Exchequer is going to pay. May I also make this observation: that while the payment is welcome, I do not think we are giving enough attention to the needs, particularly, of the retired pensioners. I should like to see the pension so increased as to bring it up to £10 a week for a single person and at least £16 a week for a married couple, and I hope that when the Government come to make their annual review they will think in more substantial terms than a yearly bonus at Christmas time.
The other thing I want to say is in reference to Clause 6. I must confess that when I heard that programme on the radio, and when I arrived here yesterday
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and received the Bill, I was somewhat surprised to see that the question of the pneumoconiotics was embodied in a Bill of this kind. But when I read what the Minister said in another place last Friday, I perfectly understood the reason. The reason he gave was that the National Industrial Injuries Advisory Council had been examining respiratory diseases for quite a long time and had made a certain recommendation. May I say that, like the Minister, I come from a mining area and I have been wrestling for many years with this question of respiratory diseases. I was astounded to discover that the Minister in another place said last Friday that this clause was included because of a certain recommendation that had been made by the National Industrial Injuries Advisory Council. It was to the effect—and this somewhat alarmed me—that if this clause was not put in this particular Bill, and if the medical people who made the assessments for pneumoconiosis followed the recommendations of the Advisory Council, it would mean that those with very small assessments might lose them and that those who might be assessed in a similar way, so far as size is concerned, might not get any pension at all for the disease of pneumoconiosis. The reason Clause 6 is inserted in the Bill is to preserve the status quo.
I want to express a note of gratitude to the Minister who announced the Government's decision, in contradistinction to the recommendation of the Advisory Council on Industrial Injuries. I see people every week who suffer from this disease. Those of us who have been looking at this problem and grappling with it for many years know not only the physical disablement that it causes, but the mental distress, and I am extremely grateful that at any rate for the moment, until we can perhaps debate, discuss and apply our minds to the Report put out by the Advisory Council on Industrial Injuries, those who are in receipt of pensions because of small assessments (and I will not go into the question of how it works) will have those pensions safeguarded, and those who come up for examination before pneumoconiosis panels will not be jeopardised either.
My Lords, in conclusion may I say that it is unfortunate that this Report was not in our hands some time ago? It was available only yesterday, I believe.

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It is an interesting document. One of the things that disappoints me about the recommendations, or non-recommendations, of the Council is the question of other respiratory diseases than pneumoconiosis. I have for a very long time been of the opinion that what is needed is that both emphysema and chronic bronchitis, like pneumoconiosis, should become prescribed diseases. I am not a doctor, but a very ordinary layman. I know that the doctors argue that the general population can become victims to these two diseases, but I say this: those who work in dusty conditions, particularly coal miners, are not only facing the hazards of the polluted atmosphere, as put forward in evidence by the medical profession, but something plus as well; that is, the dust of the coal mines.
While expressing my gratitude for Clause 6 in this Bill, I hope that the Government will give some attention to the prescription in the not too distant future of emphysema and chronic bronchitis.
5.22 p.m.
VISCOUNT AMORY: My Lords, I rise with extreme diffidence to make two brief observations. I say "diffidence" because I have reached such an advanced age that, so far as I can see, I am likely to be numbered in the category of beneficiaries under this Bill. I have one point to make in regard to what the noble Lord, Lord Taylor, has just said. I am sure we shall all be delighted to see that sufferers from pneumoconiosis are included in this Bill because it is one of those diseases about which I think everyone in the country feels particularly deep sympathy, because so many who suffer from it have given honourable and continuous service over a long period to their industry and to their country.
My second point is in reference to what the noble Lord, Lord Beaumont of Whitley, said. With the tone of his speech we shall be in sympathy, and particularly when he said that his desire, and that of everybody else, was that the elderly should be treated with generosity. That is something that public opinion in this country desires very much. Every Gallup Poll on this matter shows the high priority that people generally wish to be attached to this objective. There-
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fore the noble Lord will forgive me if what I have to say now may at first sound a little harsh, though it is not intended that way. The noble Lord mentioned the £1,100 million as being a very large sum. I thought from the way he mentioned it that he was fully conscious of the difficulty of giving effect to the particular proposal he made, at any rate all at once. My only point was that, apart from being a very large sum, if a sum of that order were to be added to the total expenditure in this country at the present time it would be wildly inflatory. So, if that objective he seeks becomes possible—and I am sure he will agree it would have to become possible—it would have to be done in a way that would not necessarily add a very large sum to the total of consumer expenditure at the time; that is to say, some other priority would have to be left to make room for it. With his aim, if it is regarded as feasible, and one to be achieved, I would not quarrel at all, but I do not believe that it is practical politics at present. In the present circumstances we must be grateful that the Government have found it possible to go as far as they have done, and to make once again this symbolic payment to show their sympathy with the objective.
5.25 p.m.
LORD ABERDARE: My Lords, I am grateful to all those who have spoken in this debate, at least for not opposing the Bill, even if in some cases they gave it a fairly lukewarm welcome. The noble Baroness was kind enough to give it a fairly reasonable welcome to set it on its way, and I am most grateful to her. So far as the method of raising money and where it comes from are concerned, the noble Baroness, no doubt moved by a spirit of non-discrimination between the sexes, referred to there being no magic godfather, whereas we generally refer to a fairy godmother; but in this case, unfortunately there is neither a godmother nor a godfather. The money has to come either from the pocket of the taxpayer or from the pocket of the contributor. In this particular case, however, the bulk of the contribution comes from the employer and not the employee. I am sure the noble Baroness would think that was right in present circumstances.
BARONESS PHILIPS: My Lords, my only point, to have it on the Record, was that it is not the Government who are the godfather, but the contributor.
LORD ABERDARE: The contributor, not the taxpayer; the Government are at the mercy of people whether they be taxpayers or contributors; in this case those people are the employers.
The noble Baroness asked me about the administration cost: mainly cost of the administration by the Post Office in making payments on my Department's behalf. She spoke of an anomaly with the wife getting the payment only if she is herself over 60. I do not think it is really an anomaly; if you are drawing a line, of people over a certain age at a point when they normally retire, that figure is 60 for women. This is the same figure as we relied on last time, and I think it is a justifiable figure.
The noble Lord, Lord Beaumont of Whitley, in an interesting speech, chose to widen the debate somewhat beyond the modest scope of this Bill into rather wider matters of pension policy. I did, I hope, seek in my own speech to make it quite clear that this extra £10 was part of our counter-inflation policy rather than our main pension policy, of which we are proud; since we came into office we have increased the pension by 55 per cent., which is quite a considerable achievement. Also he talked about the limits of the extent of this particular payment. It is difficult to draw a line at a particular point, but it is much easier to draw the line at the point of retirement than to give extra to other well-deserving people below that line. Again, I think we have done a great deal, with the invalidity pension, and helping the chronic sick with the attendance allowance. I do not think we have anything to be ashamed of there. Our pension, the noble Lord said, is lower than elsewhere in Europe. These are very difficult comparisons to make, because in comparing pensions I think one ought also to take into account other forms of social benefit, particularly perhaps the free Health Service, which is not enjoyed by people in other member States of the Community.
My noble friend Lord Amory spoke about doing more and facing up to the cost of the £1,100 million, and my words will merely echo what he said about the difficulty of doing so in present circum-
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stances, though we would all wish to do more for the elderly if we could.
VISCOUNT AMORY: My Lords, if the noble Lord will allow me to emphasise what he has said, the present Government's record in this matter is extremely good relatively. The substantial increase in three years to which he referred is something of which I think the Government can feel very proud.
LORD ABERDARE: My Lords, I am extremely grateful to my noble friend.
With regard to the figures mentioned by the noble Lord, Lord Taylor of Mansfield, he mentioned overall receipts of £113 million. That would be in a full year; but between January, when the contributions first come in, and autumn of next year the contributions will raise about £80 million. So the sum does in fact balance.
I am very grateful to all of your Lordships who have welcomed Clause 6. It was not so much that the Industrial Injuries Advisory Council Report was not available before the Bill came in; it was rather the other way round; that we saw an opportunity of putting this in the Bill quickly in order that we could put the matter right at the earliest possible moment. The Report was published as soon as possible, and, as the noble Lord knows, it was available yesterday. I hope I have answered most of the questions which noble Lords raised.
On Question, Bill read 2ª: Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to the Resolution of October 15), Bill read 3ª, and passed.

SOUTHERN RHODESIA (DISTRIBUTION TO CREDITORS) ORDER 1973
5.35 p.m.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE)THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE) rose to move, That the Southern Rhodesia (Distribution to Creditors) Order 1973, be approved. The noble and learned Lord said: My Lords, I rise to move the Motion standing in my name giving approval to the Southern Rhodesia (Distribution to Creditors) Order 1973. This is a highly technical Order, but I will

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try to describe its effect so far as possible in popular language without misleading the House as to the legal technicalities.
Though the need for making the Order arises solely from the state of affairs created by the illegal Declaration of Independence, none of the political issues associated with that declaration which commonly engage the attention of the House arise in connection with the Order. I therefore make no reference to those issues in my remarks to-day, and I imagine that other speakers will not wish to discuss them either.
The subject matter of the present Order was first raised in the House in a Question put down by my noble friend Lord Napier and Ettrick on February 14 and subsequently referred to by myself in a Statement made on April 18, which at that time seemed to command general support in the House. However, I think perhaps I should remind the House of the circumstances which gave rise to the Order and the previous discussion. These circumstances arise out of the rights of the stockholders of Southern Rhodesian Stock registered in London under the Colonial Stock Acts, the principal Act being the Act of 1877. These Acts provide for the registrar of the colonial stock (in this case the Bank of England) or—and I am quoting—"other agent of the colonial government to meet the redemption payments and interest out of monies of that Government.
Since the unilateral and illegal Declaration of Independence the necessary funds to meet the Southern Rhodesian Stock, the interest and redemption payments to date, have not been provided to the Bank of England by Mr. Smith's Government, and the stockholders in the United Kingdom have remained unpaid. I understand that at least some stockholders outside the United Kingdom have been paid, but of course of that I have no certain or precise knowledge. To the best of my knowledge and belief the amount remaining unpaid and outstanding by way of interest payments and redemption payments is now about £53 million.
This is, of course, not the only obligation in the United Kingdom which the Government of Southern Rhodesia—by which I mean (and I will not repeat it
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throughout) the lawful Government of Southern Rhodesia, which does not at present exist—have failed to meet, and which, when and if lawful authority is restored there, they will have to meet in due course. There are other creditors of the Southern Rhodesian Government who stand in the same situation, notably Her Majesty's Government here, who are owed a good deal of money which they have had to pay out to the International Bank for Reconstruction and Redevelopment to service debts for which the Government of Southern Rhodesia are primarily responsible. That is, they have had to pay the International Bank, as guarantors, and also by direct Exchequer loans, whereby the Government of Southern Rhodesia are in default of repayment. It is impossible to estimate the full amount which may be due to other creditors unless and until this is established either by court proceedings or, if this Order is approved, by proceedings under that Order. I think that the total amount outstanding to Her Majesty's Government is about £37 million.
The Colonial Stock Acts make it absolutely plain beyond a peradventure that Her Majesty's Government here are not liable to make good the loss of the stockholders in respect of their redemption and interest payment. But exceptionally the Acts do envisage a situation in which proceedings could be brought in the British courts in effect against the Colonial Government (in this case the Southern Rhodesian Government), in the case of non-payment. The procedure provided for in the Act of 1877 is known as a Petition of Right, and takes the form of a Petition to the Queen. I see the noble and learned Lord, Lord Gardiner, is in his place, and he will remember that when we first went to the Bar this was a fairly familiar procedure, but I do not suppose that many noble Lords at present in this House know much about it. It became obsolete for every other purpose after the Crown Proceedings Act 1947, and although it was generally believed to have been abolished by a section of the Cyprus Act 1960—I think it is so stated to have been repealed in Halsbury's Statutes—a Mr. Henry Franklin, one of the stockholders concerned, established in the courts last year that this universally held belief was erroneous. Following his success he, and other stockholders, commenced proceedings by way of Petition

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of Right, and in some cases have received judgments establishing the amounts due to them. No doubt other stockholders would be able to do so; that is to say, the list of those who have actually brought proceedings is not complete.
However, as noble Lords will probably know, and all of us who practise in the courts know very well, it is one thing to receive a judgment but, as many judgment creditors find out to their cost, it is altogether another thing to be paid, and these judgments will be absolutely fruitless (that is to say, they will yield nothing), unless it can also be established that there are assets available in this country belonging to the lawful Government of Southern Rhodesia to meet them; in fact, assets in the hands of an agent, to quote the Colonial Stock Act, of the Southern Rhodesian Government, to which Section 20 of the Colonial Stock Act applies. They must be in the hands either of the Registrar (that is, the Bank of England), or some other agent of the legitimate Government.
Whether there are any such assets apart from the sum of £41, is a matter of dispute, and it is a matter of dispute which will ultimately have to be decided by the courts as a question of law. As regards the sum of £41, I do not propose to say anything more about it because it has already gone. The first of the petitioners has taken it under his judgment. In any event, I suppose that the House would think, as I do, that a sum of £41 to distribute between £53 million-worth of creditors under the stock can safely be ignored. At any rate, it has gone and no longer exists. Therefore, whether there are any such assets available to meet these potential or actual judgments is a matter of dispute which ultimately has to be decided by the courts as a question of law. The Bank of England has already commenced proceedings in the commercial court for a declaration that these are not funds available to meet the judgment, and the governor, or whatever the appropriate phrase is, of the Reserve Bank of Southern Rhodesia, has also commenced a similar action for a similar declaration. These questions will have to be decided by the courts as a matter of law.
The question of law depends principally upon the status of the funds of the Reserve Bank of Southern Rhodesia, which has a number of funds frozen in
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this country. The funds are substantial (I think the figure is between £8½ million and £9 million), but they are quite insufficient to meet the claims of the stockholders, which proved to date amount, as I have said, to the best of my knowledge and belief, to £53 million, and still less to meet the other creditors of the lawful Government of Southern Rhodesia, including of course Her Majesty's Government who have had to pay out these sums by way of guarantee and who are also entitled to receive the repayment of the direct loans.
One argument would be that the Reserve Bank of Southern Rhodesia is to be treated as an entity separate from the the lawful Government of Southern Rhodesia, and that its funds are not liable to meet the judgments, and it is not an agent of the Government within the meaning of the Colonial Stock Acts. That is one side of the case, and presumably that will be put by the plaintiffs in the two sets of proceedings I have referred to. On the other hand, it could be argued that some, or all, of the Reserve Bank's Funds are available to meet the judgments on the basis that the Reserve Bank is an agent of the lawful Southern Rhodesia Government. As this question is obviously sub judice between the claimants and the Bank of England and the Reserve Bank, I must not express any opinion whatever as to which of these two alternative views is the right one. It will fall to be decided by the courts.
The consequences of what I am about to say are material. If the Reserve Bank and the Bank of England are right, the consequence will be that the claimants will get nothing, so far as one can tell, until the restoration of lawful authority in Rhodesia, when of course they will have their rights and no doubt there will be assets to meet them. Their judgments until then would remain barren until the restoration of lawful government in Southern Rhodesia. However, since the funds are totally insufficient to meet all the claims even of the stockholders, let alone the other creditors, I am afraid that we cannot simply adopt a supine attitude and do nothing whatever about it until the courts have decided the question. If we did that, as I explained to the House in April on the former occasion to which I referred, the funds would be

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seized on a first-come first-served basis. The early birds would get the whole worm, and the later birds would remain wholly unfed. I do not propose to give the details, but although there are one or two fairly small early birds most of them are the large birds who have both the know-how and the funds to have protected their rights. So the general effect would be that the smaller the claimant the less he would get. This would be quite contrary to every principle of justice and law, and I think that this was accepted by the House on a former occasion.
One alternative to "First come, first served", would have been to stay all civil proceedings in this country in respect of claims against the Southern Rhodesia Government by an Order made, like this, under the Southern Rhodesia Act. Such a course had great merits on the grounds of simplicity, and I think it would have had considerable merits on the grounds of public morality. As I told my noble friend Lord Napier and Ettrick on February 14, it was at one time at any rate being contemplated as the right course by Her Majesty's Government. Even now it may turn out to have been the best course to take. But, rightly or wrongly—and I shall submit rightly—the Government decided against that course; and they decided against that course, which would certainly have been highly controversial, because of arguments of principle which personally I find quite overwhelming. It would have involved all the controversy incurred by the then Government in the Burnnah Oil case (and there have been one or two other cases in recent years where retrospective legislation has been passed to deprive litigants of a right that they had) since it would have taken away ex hypothesi a right of action in the claimants which the courts, rightly or wrongly, had decided to exist, and it would have done so retrospectively after the courts had decided that the remedy was available. On balance, therefore, and on reflection, the Government abandoned the second alternative, and as they had already rejected the "first come, first served" principle, they reached, as the only just and practicable solution, the solution proposed in the present Order.
Now the solution proposed in the present Order is based on existing legal
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principles when a debtor or a fund has insufficient assets available to meet the claims upon it; and, as I have already pointed out, in this case either the fund has no assets or, on the alternative view, the fund does not have anything like enough assets to meet the claims upon it. Of course, if it has no assets no prolem arises: any judgments which may be obtained will be altogether fruitless, even if this Order is not passed. But the Order proceeds on the basis that that view cannot be treated as certain unless and until the courts so decide. We have therefore got to legislate against the possibility that the courts will decide in the opposite way, and we have got to legislate against that possibility while it is still in the future; and in that event we shall be faced with what I submit is the familiar situation, that a fund or a debtor exists upon which there are claims in excess of the total amount of the fund.
Now the answer which we give in the Order, and which I gave when I made my Statement to the House, is, in effect, that the rules of bankruptcy or companies winding up should prevail by analogy. What happens, if I may explain rather simply, is this, as noble Lords will be aware. Suppose somebody gets a judgment against a debtor who cannot pay. If the debtor is an honest man, he will present his petition of bankruptcy and then all the creditors are brought in and they get paid a dividend from the funds which he possesses and which are available to meet the payments. Their right of action is excluded; the right which remains is a right to a dividend in the bankruptcy. The essence of this, which has been the basis of our system of commercial morality for many years—I do not like to think how long—is that all the creditors are then treated equally, except for secured creditors and a few preferential creditors, and a dividend or dividends is declared until the fund is exhausted. I put this forward as the only view which does substantial justice here between all the claimants.
My Lords, at this stage I should like to deal with a criticism which has been levelled on behalf of the stockholders. I do not want to criticise the stockholders in any way. They are people who are entitled to redemption payments from the Southern Rhodesian Government, and who have not received them; they are

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entitled to interest, and they have not received that interest. But, of course, the effect of what they are seeking to do is to get their debts preferred in this country over any other creditors there may be; and, quite apart from legal technicalities, one has to consider whether that is substantial public justice or not. This is the question which has to be considered. The stockholders claim that they alone should share in the fund—that is to say, the fund about which the courts will decide aye or no whether it is available to meet this debt—if the courts declare it to be available. The Order provides that all the creditors let in under the Order should be treated equally. This is the rule in insolvency, with one qualification; namely, that some insolvency debts owed to Her Majesty's Government would have preference over ordinary debts—and Her Majesty's Government claim no such advantage here.
The Acts—that is to say, the Colonial Stock Acts—make no difference in the quality of the debt or right which the stockholders possess and those of other creditors. The Colonial Stock Acts do not make them preferred creditors and do not make them secured creditors. They have no preference over other creditors; they are neither secured nor preferred. They have only the one procedural advantage, which is to bring the proceedings in other words, they have the advantage which can trigger off the insolvency of the fund by obtaining a judgment, and thus establishing that there is an insolvency. It is to be understood that they will naturally seek to obtain an advantage over other creditors. These things are perfectly legitimate in the way of argument; but my submission is that if they were allowed by Parliament to do so it would be an unfair advantage.
The effect, if this were a private affair, would be that the debts which were provable in bankruptcy would include all debts or liabilities, present or future, certain or contingent, to which the debtor is subject at the date of the receiving order or to which he might become subject before his discharge by reason of any obligation incurred before the date of the receiving order, and ordinarily would include foreign creditors. Of course, the only reason why foreign creditors cannot obtain judgment in these courts is that they would normally have to seek a
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judgment in Southern Rhodesia, but for obvious reasons they cannot do that because the only people whom they could sue in Southern Rhodesia would be the illegal Government, and we do not want to encourage that. Equally, the only reason why the Crown could not sue is that, on the hypothesis that the funds are available, the Crown already has the funds in its own hands, and cannot sue itself. It could, however, without passing an Order, transfer the funds from one pocket into another, and so render them not available. In fact, it has not sought to do that. What it has sought to do is to treat itself like any other creditor in a bankruptcy.
Now there are one or two minor matters which I think I ought to establish. It may be the case that other funds alleged to be funds of the Southern Rhodesian Government emerge, but if so they will be dealt with in the same way under the Order. At present, the only funds in question are those of the Reserve Bank held in the Bank of England on its behalf. I am told, as I have said, that these amount to between £8½million and £9 million. Both the Bank of England and the Reserve Bank have brought test proceedings against Mr. Franklin, who is the first of the petitioners, to establish that the funds are not funds of the Southern Rhodesian Government available to meet claims against the Southern Rhodesian Government. That matter, as I have said, is sub judice. If the actions succeed, then the judgments will be fruitless: if they fail, then the assets of £8½ million to £9 million will fall to be distributed under the Order. As I have said, the claims against the assets amount to £53 million, and so far as is known there is in addition between £30 million and £40 million more in respect of other creditors, including Her Majesty's Government—say, about £90 million in all.
My Lords, with this explanation I do not think that I need deal, unless I am asked to do so, with the actual form of the Order. Article 2 has already taken effect to meet the gap between the making of the Order and its coming fully into operation with the approval of Parliament. It has therefore no practical significance for the purpose of the debate. If the Motion fails, the Article will fall with it. If it succeeds and the Secretary

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of State decides to bring the Order into operation, it will be superseded by the Order. The organ selected for administering the funds is the Foreign Compensation Commission, and probably the House will agree that it is the most suitable body for the purpose. It is a judicial body staffed by lawyers. We could not use the Companies Winding-Up Court or the Bankruptcy Court for an operation of this kind, and I think the analogy of a bankruptcy would break down if we tried to do so, because the claims submitted will include, or may include, a number of claims which would not strictly be provable in a bankruptcy. I have done my best to explain this highly technical matter, and I think the best thing to do now is to move formally and to leave the House to discuss the merits of the Motion.
Moved, That the Southern Rhodesia (Distribution to Creditors) Order 1973, be approved.—(The Lord Chancellor.)
6.0 p.m.
LORD SHEPHERD: My Lords, I am sure that the House will be indebted to the noble and learned Lord for his very full explanation of what is a very highly technical Order. Like the noble and learned Lord, I shall not refer to the cause of the Order, the seizure of power in Rhodesia by the Smith régime; but perhaps the noble and learned Lord would confirm that there is nothing within our sanctions policy which would prevent the Government of Rhodesia from paying these stockholders if they so wished.
When the noble and learned Lord (I think on April 18) made the Statement which this Order follows, my noble friend Lord Beswick, speaking at fairly short notice, said that we on this side of the House approved and agreed with the decision taken by the Government. After a good deal of anxious thought we are still of the same view. It seems to us that there are two issues which have to be decided. The first is that if the stockholders are to have the first entitlement to what sums may be available, is it right that it should be on the basis of "first come, first served"? We think that the figures given by the Solicitor General in the House of Commons last week illustrate what the noble and learned Lord has said: that it is not the small individual stockholders who are at the head of the queue. The Solicitor General
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said that there had been some 86 claimants who had entered claims amounting to about £3 million, of which some £2¼ million had come from the banks. I understand that there are a number of pension funds that may be affected, but I think that it would be quite wrong to believe that what we are doing by this Order is prejudicial to the small claimant. In many ways perhaps he will be better off as a consequence of this Order. So I should not have thought that in equity there could be any disagreement with the Government proposals here.
The most controversial aspect, I suppose, is whether the Government on behalf of the taxpayer, since it is the taxpayer's money, should put themselves into the same position as the stockholders for any claim that could be made on the assets of Rhodesia. One can have sympathy with a stockholder but I think that in equity one needs to protect the taxpayer's interest, and I therefore feel, with some reluctance, that the Government have made out a case in this regard.
My Lords, I should not like to sit down without saying one word about Mr. Franklin, whom my honourable friend Sir Elwyn Jones referred to as a modern John Hampden, who created the present difficulties by his success in the courts. This is the second piece of legislation of this type in which I have been involved. The noble and learned Lord referred to the Burmah Oil legislation. In that particular case, of course, the Burmah Oil Company had been clearly warned by at least two Administrations that if they did succeed in the courts certain steps would be taken to see that they did not eventually succeed. They proceeded in the full knowledge of this. However, to the best of my knowledge, Mr. Franklin was not warned as to what would be the consequence of his success in the courts. Undoubtedly he has incurred considerable cost in making his case in the courts. While I can fully appreciate the view of Her Majesty's Government that as they were not party to the recent court cases they had no responsibility in the matter, in equity, since the Government are in fact now making an Order which (shall we say?) will delay any settlement of Mr. Franklin's claim, I should hope that the Government would give very sincere consideration to ways and means by which Mr. Franklin's expenses could be met

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without necessarily creating a precedent. While I personally—and I am sure that this applies also to most Members of this House who have studied this particular case and who have a certain anxiety about this Order—would accept that it is necessary in the public interest, I feel it would make everyone a good deal happier if Mr. Franklin had not to suffer the considerable loss that he obviously will suffer as a consequence of it. With those words I would say to the noble and learned Lord that we on this side of the House give support to this Order.
6.6 p.m.
LORD WADE: My Lords, I share the views which have just been expressed by the noble Lord, Lord Shepherd, with regard to Mr. Franklin. In my view he certainly deserves our sympathy. But I am not in agreement with the noble Lord, Lord Shepherd, on some of his other observations. I think that we shall all agree that this Order does not make particularly easy reading. I shall endeavour not to add to the complexities, but in my view there underlie this Order some issues of principle. At the outset I should mention that I am a holder of a small amount of this stock, not on my own behalf but in the capacity of a trustee. Strictly, therefore, I do not think it is necessary to declare an interest because I have no beneficial interest either directly or indirectly. Nevertheless, it is perhaps worth mentioning briefly the circumstances of this trust. The stock was purchased, on the advice of the trust's brokers, some time before U.D.I. The beneficiaries are as to part charities and as to part an elderly lady who has an interest for life; and ultimately the capital all goes to charity.
In some respects this is typical of other funds where part of the capital is invested in this particular stock. One thing is clear—and on this I know we all agree. The political controversy of U.D.I. does not arise here. It is true that this Order became necessary as a direct consequence of U.D.I. but we are not arguing about the Smith régime—that is irrelevant. The issue is between the Government and the stockholders. I would differ a little from the remarks made as to the type of stockholders. I should have thought that the particular trust I have mentioned was in some
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respects fairly typical. I think that there are probably a number of persons of comparatively small means who are affected. Some of the stock is held by individuals, some by trusts for pension funds, some by trustees for individuals.
THE LORD CHANCELLOR: My Lords, I think that the noble Lord has misunderstood the point that was made. There are a number of quite small beneficiaries in one way or another and I did not mean to suggest anything to the contrary. What the noble Lord, Lord Shepherd, was referring to, and what I had referred to was that if the stockholders were met out of inadequate funds on a "first come, first served" basis we already know, from the order in which people have obtained their judgment, who would come first. In the main they are not small stockholders.
LORD WADE: My Lords, I was quite well aware of that particular point and I was going on to deal with it later. But there have been some references to a large amount being held by banks, and I was going to say that, so far as I can ascertain, these moneys are, or may be, held on behalf of individuals. So again we really cannot distinguish between large holders and small holders. In any case, I am not suggesting that one should not have sympathy for the stockholder because it is a bank. But I should have thought the sympathy should lie with Mr. Franklin and his fellow stockholders.
But much more is involved here than sympathy. It seems to me a question of principle. The whole history of this matter has, I think, shown the Government not in an entirely satisfactory light. I am thinking particularly of what was said, or was not said, when Mr. Franklin started his proceedings. One could take statements point by point of argument, but I would prefer to keep to what I regard as the crucial point. As your Lordships are aware, Mr. Franklin embarked on a long legal battle. The Government put forward such defences as were available to them, but Mr. Franklin did succeed in obtaining the Petition of Right and the court said, "Let right be done." It was following that decision, and following the decision to ascertain what funds were available, that the Government introduced this Order; and I suggest that this Order is intended

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to alter the rules in the middle of the game.
It is interesting to compare this with the Burmah Oil case. The noble and learned Lord the Lord Chancellor was in another place at that time, but I think I am right in saying that he did not regard the War Damage Bill with great enthusiasm—perhaps that is an understatement. Of course, my Lords, this case is not precisely the same as the other; two cases never are precisely the same. But there is a certain similarity; namely, that the rules were altered in the middle of the game, or should, I say, in the middle of the proceedings. In the Burmah Oil case the question was whether the claimant was entitled to compensation. It was fought right up to the House of Lords, and in its judicial capacity the House of Lords decided that the claimant was entitled. The amount still remains to be considered, but the House of Lords decided that on principle the claimant was entitled to compensation; and before any further stage could take place the Government of the day altered the rules so that the claimant could not receive any compensation.
In this case it would seem to me that the question was this: Was the petitioner entitled to proceed with the claim9 The decision of the court was, "Yes". The Petition of Right was granted, and the Government then decided to alter the law under this Order; not by taking away the right altogether from Mr. Franklin and other stockholders, but by diluting the pool by bringing in other creditors—the main one being Her Majesty's Government—and in that way diminishing Mr. Franklin's prospect of recovering what is due to him. I was interested to read a remark of the Solicitor General in another place on October 17 of this year, which was only last week. I am quoting from Hansard, column 368, and he used these words:
"…by accepting now claims by creditors other than stockholders, the pool has to that extent been diluted."
I think that that really is the main issue.
Turning to the Order, and without going into it in any detail, I think that there are two main purposes, apart from the procedural matters such as bringing in the Foreign Compensation Commission. The first is to ensure that the stock-
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holders should take pari passu. As I understand it, all parties are agreed about that. There is really no dispute that the stockholders should take on an equal basis and not "first come, first served". Whether an Order is necessary to bring that about I should not like to say. I am not absolutely certain that it is necessary, but if it is, I should have thought there would be no dispute on that issue. But the second purpose of this Order is to dilute the pool after Mr. Franklin had obtained his Petition of Right, and it seems to me that that is open to very strong objection on grounds of principle. I know it has been suggested that this is justified because the general taxpayers would benefit. While listening to the noble and learned Lord the Lord Chancellor I kept on thinking to myself: why should the justification of helping the general taxpayer be brought in, if it was all so clear on legal principles anyway? I think the argument that it is necessary—
THE LORD CHANCELLOR: My Lords, I think that again the noble Lord, Lord Wade, has misunderstood the point I was putting. The point I was putting was not that the Order was justified on the basis that the general taxpayer was benefited but that the general taxpayer was also a creditor of the lawful Southern Rhodesian Government and therefore just as much entitled to his money as Mr. Franklin is to his.
LORD WADE: My Lords, I do not want to take up a great deal of time by quoting the Solicitor General, but I have in mind some of the remarks made in another place and I was not referring specifically to the noble and learned Lord the Lord Chancellor. It seemed to me that it was put forward as an argument and I suggest that that particular argument should be regarded with great caution. Of course the Government must be concerned with the interests of the taxpayer, but where does this particular argument lead? It seems to me that if it is taken to the logical conclusion, whenever a claim succeeds against the Government or a petitioner succeeds in a claim which will or may affect the possibility of money accruing to the Government, the Government would, on that argument, be entitled to alter the law for the benefit of the taxpayer, and I think that that is a dangerous line of argument.

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The purport of what I am saying is that it tends to undermine the basis of the rule of law. When I turn to the Order itself, my difficulty is that it is not amendable. If it were, it would be a simple matter to attempt to delete a portion by amendment in Committee. That we cannot do, and therefore I should have thought the proper course for those who are unhappy about this would be to ask the Government to take the Order away and bring it back in another form. Failing that, I should have thought that in this case the proper course for those who are uneasy about this Order would be to resist it, and I hope that the majority of your Lordships will be of the same opinion.
6.18 p.m.
LORD GRIDLEY: My Lords, I intervene in this debate only because many people of standing and repute and of varied interests have expressed to me their concern about this Order. I am a completely disinterested party in the sense that I do not own and have never possessed any Rhodesian stock and I have no financial interest in the outcome. Also, my Lords, I am not a lawyer, and on the legal complexities which seem to stem from the Order in Council, naturally, I have had to receive advice. I feel extremely nervous about putting forward some of the advice that I have received because it is completely contrary to what the noble and learned Lord the Lord Chancellor stated in his speech from the Woolsack. I am, as I have said, quoting from advice received and not speaking as a qualified solicitor or lawyer. The advice I have received is that the Order in Council would appear to represent an attempt by the Government to nullify retrospectively that court decision by a Petition of Right that went against them. As regards the rights of an individual, as I think the noble and learned Lord has confirmed—he will correct me if I am wrong—an individual Colonial stockholder can sue in the United Kingdom in respect of Crown debts incurred in Colonial or former Colonial territories: and I am advised that in the case of Mr. Harry Franklin, the procedure for him to do so was in order and covered by Section 20 of the Colonial Stock Act 1877 and the Crown Proceedings Act 1947. It would seem therefore—I say this advisedly and based upon advice,
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and repeating words which I think were stated by the noble Lord, Lord Wade—that in the middle of the game the Order would appear to be an attempt to change the rules.
My Lords, many other points on this issue have been drawn to my attention, and no doubt they will be covered by other noble Lords who will follow me in this debate. It would be utterly tedious for me to mention them all, and I will confine myself to two only. Here, while not questioning anything the noble and learned Lord has said, I would refer to a debate in the other place on October 17 when this Order in Council was debated. My honourable and learned friend the Solicitor General, at column 347 of Hansard, in reply to a question, had this to say regarding Rhodesian funds:
"There is no way in which those sums due to Her Majesty's Government, which are sums due to the taxpayer, can be recovered."
While agreeing that it is possible that there was no legal way, is it not the case that at least some of the Southern Rhodesian funds have already been spent? For example, in 1967, was not £275,000 paid to the German printer of Mr. Smith's Government's bank notes. I do not know, but was not this a payment from Southern Rhodesian Government funds? Again, referring to this debate on October 17, and referring to column 348, my honourable and learned friend the Solicitor General, in reply to a question as to whether he knew what funds were available for distribution, said that he did not know. With respect, I find it difficult to follow that the Government really did not know, for by an Order in Council in 1965 the Government took over the Reserve Bank and appointed Sir Sidney Cain and new directors to run it, charging them to take control of all Southern Rhodesian assets.
The Order in Council would appear to have given the Secretary of State for Foreign and Commonwealth Affairs complete power to instruct the Bank and to control its affairs. Surely, if the Government now do not know, or did not know, what funds were available for distribution, they have the power to secure this information. Since 1967, and since the Second Reserve Bank of Rhodesia Order, Sir Sidney Cain and his fellow directors have ceased their operations. They had called in all the assets, and

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there was no more work for them to do. Sir Henry Hardman is now Governor and Trustee, with no directors.
It is for these reasons that I have anxiety and doubt about the present Order which we are debating, and I have no doubt that some noble Lords will echo some of the sentiments that I have expressed. I am disturbed by the Order in Council.
6.24 p.m.
LORD EBBISHAM: My Lords, I wish to intervene only quite briefly in this debate. At the outset I should perhaps mention that although I have no personal interest in any foreign bond, I am a member of the. Council of Foreign Bondholders. My noble friend Lord Trevelyan, who is the Chairman of the Council, has asked me to express his apologies to your Lordships as he has had to leave for an inescapable engagement. Had he been here, I understand he would have put forward views which are similar to those which I wish to put forward, and doubtless he would have done it much more ably than I shall.
Like other noble Lords who have spoken, I would give a welcome to the effect of the Order, which enables the holders of Rhodesian stock to be treated equally in any distribution of funds that there may be. That is obviously right. But what fills me with dismay is the power which the Government are taking to put their claims on an equal footing with the stockholders. As the noble and learned Lord has made quite clear, if a distribution were made on this basis there would be precious little left for the stockholders. I cannot say that I have been fully persuaded by the arguments of the noble and learned Lord on the Government's rights in this respect. Noble Lords may have seen last week an article in The Times by Mr. Bernard Levin which sets out what I think can only be described as the wriggles and prevarications to which the Government have resorted in this matter. Even now, I understand there is still an unsettled question as to whether a representative Petition of Right can be presented. The Council of Foreign bondholders many months ago presented such a Petition, and I believe the papers are still in the Attorney General's Department, and still unanswered.
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My Lords, whatever the legal position in this matter may be, I am quite persuaded that in the minds of many people the action which the Government are taking regarding their own claims is morally very questionable. I was hoping that the noble and learned Lord on the Woolsack might have been able to say that, even though the Government were taking this action, they would not insist on their claim being made, but I realised as the noble and learned Lord went on with his speech that this was not likely to be said. However, I would ask him to see whether the Government might not even at this stage take second thoughts on this matter, even though the Order may be passed.
6.28 p.m.
LORD FOOT: My Lords, as the noble and learned Lord who sits on the Woolsack began by saying, this is a very complicated matter. But, to my mind, when you have stripped it of some of the technicalities, the issue that confronts the House this evening is a simple one. It is also an important issue, and one which ought to be of particular concern to this House, because I believe it involves constitutional questions of some importance. I do not want to introduce a jarring note into this debate, which has been fairly blandly conducted up to now, but I am bound to say that I believe that a very great wrong is being done under this Order, and I would crave the indulgence of the House to explain why I take that view.
I am hound to say, my Lords, that I am greatly disappointed that both in the other place and here to-night the official Opposition should have given their approval to this Order. We therefore are left on these Liberal Benches with what assistance we might get from the Cross-Benches, and possibly from some noble Lords who sit on the Government Back Benches.
The noble and learned Lord when opening this matter was talking about the alternative courses which the Government considered when Mr. Franklin was successful with his Petition of Right and when he successfully got his judgment. He said, as I understood it, that the Government had then considered whether they might not introduce an Order which would simply stay all proceedings against any funds in the hands

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of agents in this country which might be funds of the Rhodesian Government. He said, "We rejected that course because that would have been to act retrospectively; that would have had all the objections of retrospective legislation." My Lords, I cannot understand—and I still hope that the noble and learned Lord the Lord Chancellor may be able to explain this to me—how anybody can contend that this Order is not a piece of pure retrospective legislation. Because what has happened? Mr. Franklin seeks his remedy by Petition of Right. On that matter he is strongly opposed by the Government, who say that the law is not behind him. He, however, carries the day and is proved to be right and the Government are proved to be wrong. Then, having got his Petition of Right, which enables him to sue in the English courts, he in fact sues and obtains a judgment which says that such-and-such a sum of money shall be paid to him because he is entitled to it as a right.
What does this Order propose to do so far as Mr. Franklin's judgment is concerned? It proposes, not entirely to abrogate the judgment; what it proposes to do is to diminish the judgment by saying to him: "You are not going to be paid and we are going to make arrangements whereby you will not be entitled to the money which the court has said you should have." If the Government had thought that the court was wrong about that, or if the Reserve Bank of Rhodesia or the Bank of England had thought that the court was wrong, they could have taken the matter to appeal. But they have not, because they are not prepared to challenge the finding of the High Court. So under this Order the Government are taking the course of saying: "Though the court has said 'Let right be done' and has specified the right that should be done, let that right be undone and let them substitute for it different rights, rights vested in different people." That is the situation so far as Mr. Franklin's judgment is concerned; the noble and learned Lord will tell me if I misinterpret it.
If only the Government would concede frankly and openly that this Order is in fact retrospective, then we could go on to discuss the real issues in this
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case. I suggest that the real issue is this: are there any circumstances in which retrospective legislation can be justified; and, if there are, is this one of them? Is this a case where retrospection is something which can be tolerated and justified? I suggest that that is the real issue. If one comes to look at the matter in that way, one can see that this Order has one retrospective aspect which is justifiable and one retrospective aspect which is unjustifiable. The first of them is the part of the Order which provides that, instead of Mr. Franklin and those people who have got judgments being allowed to take all, leaving those at the end of the queue with nothing, there shall be a pro rata, pari passu distribution among all the stockholders according to their holdings. When I speak about distribution, I am assuming, as the noble and learned Lord has throughout, that we have to await the outcome of the present proceedings brought by the Bank of England and the Rhodesian Reserve Bank to decide the issue as to whether they are in fact in possession of funds belonging to the Rhodesian Government and they are therefore available for distribution.
On this question, therefore, as to whether all the stockholders should rank equally there is no dispute, no argument; nobody is arguing that at all, and for a very good reason. Because when Mr. Franklin took his proceedings as an individual and established that he was entitled to the Petition of Right and got his judgment, although under our legal processes it was no doubt necessary for him to act as an individual, in reality he was acting as the representative of all stockholders. When he obtained his judgment, what was affirmed was not only the right of Mr. Franklin to the monies that were due to him but the right of all the other stockholders to be paid from the available funds in this country to meet their claims for capital redemption and interest. So nobody is arguing about that. But if the state of the law is in such disorder that there was ever a risk that first come would be first served, and the people at the head of the queue would get all they were entitled to and the people at the end of the queue would get nothing, then there was every justification for introducing an Order of this kind—although it is technically retrospective so

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far at any rate as Mr. Franklin was concerned because it diminishes the amount of money he personally will recover. But that is a pure technicality.
When we turn to the other side of this Order whereby the Government are saying, "We are not only going to ensure an equal and fair distribution between the stockholders who have established their legal right to this money, but going to pass an Order which will put on the same level as the stockholders all the other creditors of the lawful Southern Rhodesian Government, whether it be the British Government themselves or whether it be someone else", they are engaging in an exercise of an entirely different nature; and engaging in retrospective legislation, which I would suggest is wholly objectionable for this reason. At the same time, this Order does two things. First of all, it takes away a legal right vested in the stockholders as has been determined by a British court of law, and it diminishes the amount of monies that might be available to meet the claims of those people who have established a legal claim. We know what the extent of the reduction is. We know that if in this future action which still has to take place it is determined that the funds which are in the hands of the Reserve Bank of Rhodesia are in fact available for distribution, that sum is in the nature of about £9 million. If this Order were not passed, and if we had regard only to the stockholders, there would be £9 million available for distribution among the stockholders, who have total claims of £53 million. If, on the other hand, the other creditors are brought in on an even basis with the stockholders, it means that the amount which the stockholders will receive will not be £9 million but about £5·3 million. That is very significant to the stockholders. It is a reduction of a little less than half of the amount which they might receive, and it will be significant to them.
What, however, will be the benefit to the other creditors if they are allowed to come in and share equally with the stockholders? The noble and learned Lord has told us that the main creditor is Her Majesty's Government, on behalf of the British taxpayer. How much will they get out of this £9 million? If they are to be treated on equal terms with the
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stockholders they will get about £3·7 million, which is absolutely insignificant when one considers the taxpayers as a whole. It matters nothing to the taxpayers, it matters a great deal to the stockholders—but that is a practical point.
The matter of principle, which I suggest is really the issue here, is that the Government should not deprive a person of a right which the court says he has and at the same time confer upon the other creditors a right which they cannot enforce in any English court. The ordinary creditor of the Rhodesian Government has no right of action in respect of his claim in the English courts. The only persons who have such a right of action against Rhodesian funds in this country are the stockholders, under the procedure of the Petition of Right. So what the Government are doing is vesting in the creditors a right which they could not enforce in law and at the same moment taking away from the stockholders a right which the courts say they ought to have. That is what is happening here to-night; that is what the Government are doing, and I suggest that this is a matter that ought to be one of considerable concern to this House.
I do not know Mr. Franklin: I have not met him and would not recognise him if I saw him; I do not know if he is here to-night. But it is a little ironic that this man, who has gone through all this effort, who has successfully defeated the Government on a matter of law, who has established this right on behalf of himself and his fellow stockholders, should have to listen to what is quite clearly a piece of retrospective legislation taking away his right, being proposed by the Lord Chancellor of England. It seems to me that the Motion for the approval of this Order comes singularly ill from the noble and learned Lord who sits on the Woolsack. In recent weeks, and indeed over the years, I have listened many times to the noble Lord, speaking as eloquently as he does about the rule of law, about the importance of obedience to the law, and saying that the people should accept the law whoever they may be—employers, trade unionists or anybody else; that this is the basis of any kind of decent social existence. Only recently, I heard him, at secondhand, speaking at the Tory Party conference—and a very eloquent

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speech it was. It is an irony that it should fall to the lot of the noble and learned Lord to come to this House to seek approval of an Order that will take away or diminish rights which the courts of this land have declared are vested in individuals.
6.44 p.m.
THE LORD CHANCELLOR: My Lords, I will not reply to the personal attack with which the noble and learned Lord, Lord Foot, concluded his remarks because I shall proceed to show both that they prove the wrong thing and that he is entirely misleading the House about the legal position. Quite obviously, if we did not have to legislate at all the law would remain as it is—that is to say, "First come, first served", and everybody who has spoken hitherto, including the noble Lord himself, has recognised that we cannot proceed on that basis. In other words, we have got to change the law, and the question is in what sense we have to change it, and how and on what principle.
The first thing I want to say is this. Assuming that we have to change the law, is it true and to what extent are we taking away anybody's rights? The answer is that we are not taking away anybody's rights. We are arranging, after judgment has been obtained, for the proper distribution of a fund which is insufficient to meet the legal claims that are put upon it. The stockholders have their rights; Mr. Franklin has his rights—he is a stockholder; the Government have their rights as a guarantor because they have to satisfy the claims of the International Bank for Reconstruction and Development, and as guarantor they are entitled to recover, as a matter of law, from the lawful Government of Rhodesia what they have had to pay under the guarantee. The Government have their legal rights as a lender in respect of the balance of their debts which they have lent to the lawful Government of Rhodesia and in respect of which it is in default. It is therefore on exactly the same footing as the stockholders.
I agree with the noble Lord, Lord Wade, that this is a question of principle, but I earnestly ask the noble Lord, Lord Wade, who put his case with great courtesy, if he will allow me to say so, and the noble Lord, Lord Foot: who is right on the question of principle? I put to
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the House that the question of principle must be decided in favour of the principle on which the Order is based because, supposing you have a number of creditors, it is right to prefer one class of creditor to another if he is a secured creditor. That is to say, if he can say, "I have a charge on the assets", he can be in advance of those who have no charges on the assets; but one thing which has not been advanced on behalf of the stockholders is that they are secured creditors. They are not secured creditors.
The second way in which you can advance one class of legal creditors to another is on the ground that they are preferred creditors. It has not been suggested that these people are preferred creditors; they are ordinary creditors; they are not entitled to preference as a matter of law. If the assets available to meet the obligation, which has not been taken away, are insufficient to meet the obligation they are not in law preferred creditors; they are ordinary creditors. How therefore can it on any principle of morality be said that they ought to be given an advantage over other classes of creditors? Now it is said by the noble Lord, Lord Foot, that the other classes of creditors would have had to sue in Southern Rhodesia but not in these courts. Be it so. But I am not satisfied that that is so, because Her Majesty's Government, who are the principal creditor, are entitled to their money in right of Her Majesty's Government, and the only procedural reason why Her Majesty's Government cannot sue is that, on the hypothesis that the assets are available, which is the hypothesis upon which the Order proceeds, they already have the money in their pocket and they are perfectly well entitled, I would have thought, to transfer it from one pocket to another, which as a matter of fact they are not proposing to do.
But be it so; let us assume that the argument of the noble Lord, Lord Foot has a certain amount of validity. The fact is that when an insolvency is created foreign creditors—namely, precisely those who are entitled to sue in foreign courts and not ordinarily entitled to sue in English courts—are allowed to prove in bankruptcy. That is elementary law. If it be as the noble Lord, Lord Foot says, which I do not accept, that all these creditors are entitled to sue only in the

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Rhodesian courts, I would have submitted humbly that the mere fact that you are proceeding on bankruptcy principles means that you have to apply bankruptcy principles, and foreign creditors, who, for these purposes, the creditors would be, would be entitled to rank pari passu with all other creditors, including the stockholders.
LORD FOOT: My Lords, I hesitate to interrupt the noble and learned Lord, but I did not say that these other creditors might be able to sue in Rhodesia. What I said was that the other creditors—and if we may leave aside the British Government for a minute and just consider the other creditors as such, as opposed to the stockholders—have no right of action against Rhodesian funds in this country. That is what distinguishes them from the Rhodesian stockholders who have been found to have a special remedy, and that is the Petition of Right and the judgment under the Petition of Right. It is in that sense that I was saying that the stockholders are, if I may use the words, as it were, in italics, preferred creditors.
THE LORD CHANCELLOR: My Lords, I was trying to explain to the noble Lord why he was wrong. Obviously the petitioners in the Petition of Right have a right of action in this country, and, equally obviously, if we did nothing to change the law those Petitions of Rights would yield judgments, and those judgments would be satisfied on a "first come, first served" basis. That is admittedly not what we are going to do. I am pointing out to the noble Lord that if you apply bankruptcy principles, and the whole philosophy of this Order is that you do, so far as they can be applied equally, you have to admit those without a right of action to sue in the British courts. You have to allow foreign creditors to prove in the bankruptcy.
What I have said to the noble Lord, and what is beyond dispute, is that the words "secured creditor", the words "preferred creditor", have a technical meaning in English law. The noble Lord, Lord Foot, really owes it to the House to admit candidly that the present stockholders do not have that status in English law, either as secured creditors or as preferred creditors. I am sorry to
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speak with a little heat about this because it is a technical matter, and it is quite intelligible that people at first sight would not understand what I admit to be questions of principle underlying this particular argument. But the noble Lord, Lord Foot, saw fit to close his remarks with a peculiarly offensive personal attack on me, and I think I am entitled to rebut it with a certain amount of feeling on my part.
Having said that, I go back, with thanks, to the noble Lord, Lord Shepherd, at the beginning of the debate. I am grateful to the noble Lord, Lord Shepherd, because he agreed that this was a difficult matter. He conceded that his Party had had a certain amount of anxiety about it, which I can say was shared by everybody on behalf of Her Majesty's Government who considered the matter too. We came down on the side that we have, and I was heartened to know that with exactly the same kind of doubts and difficulties the Labour Party came down on precisely the same side, and therefore I should like to thank him. If I may return to the matter of costs at a later point, I will try to do so if the noble Lord reminds me. There is one other point in his speech with which I will deal now. He appeared to be under the impression that Mr. Franklin had not been warned that special action would be taken. He was told on December 22 (at least I think it was he) by a letter written on behalf of the Attorney General:
"Accordingly, steps may be decided upon which may preclude or postpone relief being obtained in the United Kingdom by your client".
That was in connection with the Petition of Right. The phraseology of the letter was appropriate to the action which was then being considered, and which gave rise to the question by the noble Lord, Lord Napier and Ettrick.
LORD SHEPHERD: My Lords, I was only seeking to show the slight difference between the Burmah Oil case, where the Burmah Oil Company was told in specific terms that the Government would take action, whereas in this case there was a degree of doubt.
6.55 p.m.
THE LORD CHANCELLOR: My Lords, I was about to come, in connection with Lord Wade's speech and, subject to the question of costs which the

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noble Lord, Lord Shepherd, asked me to deal with, to the Burmah Oil case. With respect, there is no analogy between that case and this at all. He is right in saying that after careful and considerable argumentation I spoke in the House of Commons in a former Parliament against the decisison of the then Government. But I did so in terms which were quite different from those which the great majority of my own Party would have supported. I had a particular point of view with which I will not trouble the House at this late hour. But it was critical of the then Government.
All I want to establish now is that there is no analogy at all between the Burmah Oil case and the present one. The Burmah Oil case was one in which the Government retrospectively, rightly or wrongly (and that is an argument I will not enter into), decided to deprive a party of his right of action. This is a case in which, the right of action having been established, the question is how you distribute inadequate assets when the right of action has been established, and nobody is going to get a penny of this fund who does not establish a right of action, a debt. The stockholders do it by Petition of Right until the Order is brought fully into operation and thereafter by proving in the "liquidation", if I may call it that. Other creditors will have to prove in the liquidation, too. They are in exactly the same position; none of them is deprived of his right of action, but they are asked to share on an equal footing in what limited assets may be available. The question is whether the stockholders should be given an advantage, which I claim to be an unfair advantage, or whether they should be made to share and share alike with other people with legal rights, even though some of those other people might have had to sue in the Rhodesian courts to get their rights instead of in the courts of this country.
That deals with the point about altering the rules. Of course, all bankruptcy, in one sense, alters the rules. If you get judgment against your neighbour in this country for £1,000 and you find that he can pay, you get judgment for £1,000; and if he does not pay you satisfy it by levying execution on his goods and chattels and you are satisfied in full. If he subsequently goes bankrupt, you are
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all the luckier because you do not have to disgorge if it was an honourble transaction. But if you get judgment against your debtor for £1,000 and he or any one of the other creditors brings a petition of bankruptcy, the bankruptcy relates back to the act of bankruptcy relied upon and you will not get your £1,000. You will have to share in the insolvency. That is exactly what is proposed here. The only sense in which we are altering the rules is that of course bankruptcy and winding up, which are the analogies adopted, do not apply to a lawful Government of either a colonial country or an independent country. The nearest approach that I can find whore the Companies Winding-up Rules did apply was the case of the Russian Bank for Foreign Trade in about 1933. A Czarist Russian Bank was discovered to have a branch with assets in this country long after the Soviet Revolution, and the Companies Winding-up Rules were applied to the assets in this country. This, I should have thought, was a fairly close analogy with what is now being approached here. But except in the sense that we are applying bankruptcy rules, which seems to me to be the right analogy, I completely deny that we are altering the rules while the game is in progress.
Of course the real issue is exactly what was put, I think by my noble friend Lord Ebbisham. The question is whether on a limited fund the stockholders should get the whole fund and share it between them, or whether other creditors should be entitled to share in it, too. This is a question of principle, and I do not deny it. I do not think it is quite as easy a question of principle as the noble Lord, Lord Foot, seemed to think. He has misled himself and, in consequence, misled the House. But the case I have put could not be more shortly stated. The advantage which is claimed for the stockholders could be claimed legitimately only if they were preferred creditors or secured creditors: and they are neither; they are ordinary creditors.
I do not want to delay your Lordships for too long, so perhaps I may deal briefly with the question of costs. I do not want to say anything which is in any way depreciative of Mr. Franklin. This kind of argument goes on much more widely than one would necessarily

719
think. It is perfectly legitimate for stockholders to seek to protect their rights, but he chose to pursue a course of action against which he was warned and which I myself think was wrongheaded. This was because I think he was trying to get an advantage which in equity he should not have got. I can quite understand why he did it and there is no kind of criticism which applies. He was entitled to do it.
He took out an originating summons for a decision as to whether a Petition of Right lay. He was opposed by the Crown and he won. I understand he got an order for costs. That was because he was a successful litigant, and it is not proposed by the Crown that that right to costs should be diminished in any way because the order is against Her Majesty's Government in right of the United Kingdom. So I can see nothing unjust about that. He then went on with a Petition of Right, and whether or not he was entitled to costs on that Petition I do not know. It is a question for the courts to decide. Again I do not see that there is any call for Her Majesty's Government to intervene: either he is entitled to them or he is not. He then sought to interrogate the administrator of these stocks in the Bank of England by way of cross-examination. His application failed and it was in fact held to be a misguided application. I do not think he was entitled to costs there. He undertook proceedings and he failed. Whether there was an order made against him or not I do not know, but at any rate he did not succeed. Finally, there are two sets of proceedings which are pending against him. One is brought by the Bank of England: if he wins he will certainly get his costs, and I understand that the Bank of England has promised to pay his costs even if he loses. There is a similar proceeding by the Reserve Bank, in which case the Reserve Bank will be liable for the costs if he wins, but I do not think any similar undertaking to pay his costs if lie loses has been made by the Reserve Bank.
I think that covers the costs. So far as I am familiar with the situation as it exists at the moment, there will be costs to which he is entitled. They will be greater if he wins. There will be some costs payable to him in any event and
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others that he will not get if he loses. I do not think any special action by Her Majesty's Government is called for. If and so far as—as the noble Lord, Lord Foot, says—he is acting on behalf of persons similarly placed, I should have thought he had a very strong moral claim to be indemnified, at any rate to their share of the amount at stake, by his fellow suppliants. But that is a matter between them and him.
I hope I have said enough to indicate, first, that I am not abrogating the rule of law, contrary to what the noble Lord, Lord Foot, said—and many of the things which the noble Lord said are at any rate open to question. I have suggested that he was plain wrong. Of the speeches to which we have listened from my noble friend Lord Gridley (to whom I must say a word in a moment) and my noble friend Lord Ebbisham I make no complaint at all, but I have tried to answer them, except in one point. May I say, in passing, that I fully understand the difficulties under which my noble friend Lord Gridley was labouring in a highly technical matter, and I do not complain at all that he should have made it very plain in this House that he was relying upon information which he had received from a professional source. The only point I wish to make to him relates to a payment of £275,000 which, to tell the truth, I had never heard of until he raised the matter; but I understand that the Reserve Bank did pay £275,000 to meet the cost of the destruction in Germany of Rhodesian banknotes printed prior to U.D.I. by a German firm. That, of course, was a liability of the Bank. What is in dispute here is whether the funds in the Bank are the liability of the Bank at all, and that is sub judice. That is the best answer I can give the noble Lord at the present time.
Of course I know nothing of the internal affairs of the Reserve Bank and its relationship to the Rhodesian funds. I imagine that there are members of Her Majesty's Government charged with this matter who would know a little more; but broadly speaking—and I am speaking now without prior instruction from those who know better—I think I am right in saying that, on the whole, when Her Majesty's Government appoint people to operate a bank of this kind on behalf of an institution which is no longer operative they would not seek to

721
look into the details of a customer's account. That would explain any defect in the detailed knowledge which my learned friend in the House of Commons may have shown.
I am afraid I cannot take the matter any further, unless there is anything I have not dealt with. Despite what the noble Lord, Lord Foot, said, I ask the House to believe that I have tried to apply my mind honourably to this. I have come to an answer different from his. This is both our misfortunes, but I do not myself think that I have anything to be ashamed of.
LORD WADE: My Lords, may I ask the noble and learned Lord the Lord Chancellor just one point, in case there is any confusion? Would he agree that there is a very great difference between a Petition of Right and a petition in bankruptcy?
Resolved in the Affirmative, and Motion agreed to accordingly.

LEGAL AID (FINANCIAL CONDITIONS) REGULATIONS 1973
7.15 p.m.
THE LORD CHANCELLOR: My Lords, I rise to move that this House approves the Legal Aid (Financial Conditions) Regulations 1973 and the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulation 1973. It was my intention in moving this Motion to include the comparable Scottish Regula
THE LORD CHANCELLOR: Oh yes, my Lords; there is no resemblance at all. A Petition of Right was the old proceeding against the Crown which used to exist before the Crown Proceedings Act to give a suppliant (as he was technically called) the right effectively to enforce a contract between him and the Crown. There is no relationship between that and a petition in bankruptcy. This is not a petition in bankruptcy. The whole point which I am trying to establish is that where there is a fund which is certainly insufficient, and which may be non-existent, you ought to apply bankruptcy principles to it, in which case all unsecured and non-preferred creditors have to be treated alike.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 9.

CONTENTS

Aberdare, L.

Garner, L.

O'Neill of the Maine, L.

Amory, V.

Garnsworthy, L.

Phillips, B.

Auckland, L.

Gowrie, E. [Teller.]

Rankeillour, L.

Balerno, L.

Greenwood of Rossendale, L.

St. Aldwyn, E. [Teller.]

Blyton, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

St. Just, L.

Brecon, L.

Sandys, L.

Brooke of Cumnor, L.

Hall, V.

Shepherd, L.

Brooke of Ystradfellte, B.

Hood, V.

Somers, L.

Clifford of Chudleigh, L.

Hoy, L.

Tenby, V.

Colville of Culross, V.

Inglewood, L.

Terrington, L.

Colwyn, L.

Long, V.

Tweedsmuir, L.

Davies of Leek, L.

Luke, L.

Tweedsmuir of Belhelvie, B.

Denham, L.

Macpherson of Drumochter, L.

Vernon, L.

Digby, L.

Merrivale, L.

Wakefield of Kendal, L.

Dundonald, E.

Monckton of Brenchley, V.

Walston, L.

Falkland, V.

Mowbray and Stourton, L.

Windlesham, L. (L. Privy Seal.)

Ferrers, E.

Northchurch, B.

NOT-CONTENTS

Beaumont of Whitley, L.

Gardiner, L.

Platt, L.

Ebbisham, L.

Gladwyn, L.

Seear, B.

Foot, L. [Teller.]

Gridley, L.

Wade, L. [Teller.]

tions, but for a reason I do not wholly understand they do not yet appear on the Order Paper. However, I hope when they do come forward they will be found to raise no separate question and will not give rise to a separate debate.
The Legal Aid (Financial Conditions) Regulations 1973 are made under the provisions of Sections 2, 3 and 12 of the Legal Aid and Advice Act 1949, as amended by Section 1(1) and (2) of the Legal Aid Act 1960. Under the provisions

723
of Section 1(3) of the Legal Aid Act 1960, the Regulations require an Affirmative Resolution of both Houses of Parliament. These Regulations, if passed, will benefit a considerable number of people. In the first place, Regulation 4 of the Financial Conditions Regulations provides transitional provisions for re-assessing contributions in current cases. All those whose "period of computation," which means a 12-months period covered by the assessment of an applicant's resources, have more than one month to run will thus be re-assessed, so that there will be an immediate advantage for those in current cases except where the effect would be minimal. There are 11,300 people with current certificates who will have their contributions reduced. In future, about 41,000 people a year will pay less contribution, and about 7,500 people a year will qualify for legal aid who would now be wholly outside the financial limit.
My Lords, if I may now come to the actual provisions, the Regulations increase the financial limits within which people are eligible for legal aid, both without charge and on payment of a contribution; that is to say, they increase the income limits. The capital limits, which are not altered by these Regulations, have already been increased, in December last year, following recommendations made by the Legal Aid Advisory Committee in their 21st Report, when the amount of disposable capital which cannot be called upon for a contribution towards legal aid was raised from £125 to £250, and the limit of disposable capital above which a person may be refused legal aid was raised from £500 to £1,200. The present income limits are £300 for free legal aid and £950 a year for contributory legal aid. This is the disposable income. In their Interim Report of February 6, 1973, the Advisory Committee made recommendations for increasing the income limits. They proposed that the lower limit should be increased to £400, and the upper limit to £1,250.
My Lords, I am sorry to say that because of the great need for economy in public spending, the Government have not felt able to agree that the Advisory Committee's recommendations should be implemented in full. Instead, it is proposed that three-quarters of the recom-
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mended increases should be made. The limits provided by the Regulations are, therefore, £375 a year for free legal aid and £1,175 a year for contributory legal aid; the increases are 25 per cent. and 24 per cent. respectively. Although it has not been considered practicable to do all that the Advisory Committee have recommended, the proposed changes will, as I have shown, help a great many people.
As I have said, the financial limits relate to what is called "disposable income"; that is to say, the income which an applicant can be expected to receive during the 12 months from the date of his application after deductions are made in respect of maintenance of dependants, repayment of loans, income tax, expenses of employment, rates, rent and other matters for which provision can reasonably be made. The Supplementary Benefits Commission are responsible for calculating the disposable income of an applicant.
Before 1970 a separate allowance was made for payments such as hire-purchase instalments, insurance premiums and so on, amounting on average to £54. By the 1970 Regulations such payments are set off against a new fixed sum of £104 of income which, by those Regulations, is now to be disregarded. At the time the Regulations were made the effect, therefore, was to allow the average applicant about £50 more than he used to be allowed. This had the same result as if the lower income limit had been raised to about £350 and the upper limit to about £1,000. Since then, the average payments in respect of hire-purchase and so on by applicants for legal aid have risen to something of the order of about £100, and this benefit has, therefore, largely been dissipated. This point has been taken into account in the proposed increase. It is estimated that the cost of meeting the increases will be £916,000 in 1974–75 rising to £1,017,000 in 1977–78.
It has for a long time been unsatisfactory that the income limits have been reviewed only at fairly long intervals. This has led to their being eroded by inflation in the meantime. The Government accept that it is not reasonable for the limits to be dealt with in this way, and it is therefore proposed that they

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should be reviewed annually so that they do not compare unfavourably with supplementary benefits. This is, I believe, a really considerable improvement.
My Lords, I now come to the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations, 1973. These Regulations are made under the Act of 1972 which we discussed not so long ago, and in particular under the provisions of Sections 1 and 11. Under Section 11(2) of the Act the Regulations are subject to an Affirmative Resolution of each House of Parliament. These Regulations increase from £20 to £24·50 a week the maximum income which a person may have if he is to be allowed legal advice and assistance under the 1972 Act. Your Lordships will remember that legal aid, broadly but not wholly speaking, implies representation; legal advice and assistance means what it says, assistance outside the court and legal advice. As my Advisory Committee pointed out, the upper income limit for advice and assistance is now, broadly speaking, the same as the upper limit for legal aid. The former is now £20 a week or £1,040 a year, but allowances of £104 which are given under the Legal Aid Scheme are built into the Advice and Assistance Scheme so as to simplify the process of assessing an applicant's resources, which is done by the solicitor in this case and not by the Supplementary Benefits Commission which act in the legal aid cases. It follows that the present limit compares favourably with the legal aid limit of £950.
To increase the weekly income limit from £20 to £24·50, as I propose, that is to say to £1,274 a year, would, if one takes into account the built-in allowances to which I have referred, give an upper limit of almost exactly the same as the proposed contributory legal aid limit and maintain the relationship between the Legal Aid Scheme and the Legal Advice and Assistance Scheme. I propose also to increase from £11 to £12·50 the limit above which contributions are payable. The Regulations do not alter the capital limit for legal advice and assistance, which was increased from £125 to £250 a year by the earlier regulations which came into operation on April 2, 1973. This was done in order to maintain the relationship to the capital limits under the Legal Aid Scheme.
My Lords, I think I should say that the Regulations before the House, the two sets of Regulations I have described, cannot be read alone. They must be read in conjunction with another set, a third set called the Legal Advice and Assistance (Financial Conditions) (No. 3) Regulations, 1973. We are not debating this third set, as they are subject to the Negative Resolution procedure. This third set of regulations will come into force on January 1 next year, when the Regulations we are debating now will come into force and they will increase from £11 to £12·50 the disposable income above which a person in receipt of advice and assistance is required to pay a contribution, and prescribe an improved scale of contributions to replace those in Schedule 1 of the Act of 1972. The contributions will start at £1 for a person with a disposable income of between £12·50 and £13·50 a week rising in eight stages of £2 to £15 for a person with a disposable income of between £22·50 and £24·50. It is estimated that the cost of meeting these increases will be £79,500 in 1974–75 rising to £111,000 in 1977–78. This is the second and third set of Regulations. It is also estimated that about 8,500 people who would now he liable to pay a contribution will pay no contribution at all, and that about 28,000 will pay less contribution.
My Lords, this is. I think, a relatively modest step, and I hope the House will agree with it. It is intended to benefit as many people as I can, and I am sure that it represents an important improvement to the Scheme that the review will now be annual instead of being at long rests, in order to meet the cost of inflation. I beg to move the first Motion standing in my name.
Moved, That the Legal Aid (Financial Conditions) Regulations 1973, he approved.—(The Lord Chancellor.)
7.27 p.m.
LORD GARDINER: My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor, for explaining these Regulations to us, and we welcome them, although we regret they are made so late and they are on such a mean basis. For some time now it has been increasingly usual to refer to legal aid as being the Cinderella of the Social Services. It may be that it is because it is the only social service, I

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think, for which the Minister for Social Services is not responsible, but I will not go into that now.
Whatever Government is in power, I think it is fair to say it has always been a question of too little and too late. The reasons are, I think, mainly these. Legal aid—and by that I mean civil legal aid, for which alone the noble and learned Lord is responsible—is, of course, administered by the Law Society. To find out what is happening in this field, therefore, one has to rely on the Annual Report on Legal Aid of the Law Society. Their legal aid year ends on March 31. It usually takes 6 to 9 months to get out their Report, which is not only financial but on how the thing is working. It does not at that stage get published at all, but goes to the noble and learned Lord's Advisory Committee, who take another 6 to 9 months. There is no complaint about this at all. I have been assured by the Law Society that they cannot do their part quicker, and the Advisory Committee are, of course, private citizens doing all this good work in their spare time. The result is that the two Reports are published together, and usually in about July of the year after the year ended March 31; that is to say, about 15 months after the end of the year. Of course, by that time, with an inflationary situation, things are getting out of date.
On this occasion the Advisory Committee, quite unusually considered the position, and the need to alter the income limits and to do it soon, so serious that they presented the noble and learned Lord with a special Interim Report, in which they said:
"We think it urgently necessary to inform your Lordship of our conclusion on income limits. It is important that they should be considered by your Lordship before Part 1 of the Act comes into operation on April 2."
This Report was made in January of this year. It was published in February, and, seeing that, I put down a Question on February 14 and asked the Government whether they accepted all, or some, and if so which, of the recommendations contained in this special Report. The noble and learned Lord said that all the recommendations were still under consideration. I then said, at column 1544:
"While thanking the noble and learned Lord for that Answer, may I ask him whether he is aware that in paragraph 3 of the Report
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the Committee say: "We think it urgently necessary to inform your Lordships of our conclusions on income limits …if your Lordship accepts our recommendations, we regard it as essential that the revised income limits should come into operation at the same time as the introduction of Part I of the Legal Advice and Assistance Act 1972'".
I then added:
"May I ask the noble and learned Lord whether that date is not April 2, and therefore if the recommendation of the Committee is to be accepted, would it not be necessary to bring a Statutory Instrument into force next month?"—
that is to say, March. The noble and learned Lord said:
"I think the answer to the whole of that question is, Yes, my Lords."
March came and went; April came and went; May came and went: June, July, August, September. It is only now, in October, that we get these Orders put forward, implementing, but only partly, the recommendations which the Committee had said it was essential, in their view, should be agreed by April 2.
The first question I ask the noble and learned Lord is why there has been this considerable delay, bearing in mind the fact that in an inflationary situation when income limits are not altered it means that every month there are men who would have been entitled to legal aid last month but will not be entitled to it now because the income limits have not been altered. When this goes on month after month for about eight months, I think that we should know why. Secondly, now that we get the regulations we find that they are all on a cheeseparing basis. There has to be both a limit above which a man cannot get any legal aid at all and there has also to be a bottom limit on which a man with that income, but no more, is entitled to legal aid without making a contribution. The Committee have gone into this very fully, and what they have recommended is that the stoppage for legal aid, the top limit of which was £950, should be increased to £1250. The Government do not do that on the grounds that the noble and learned Lord has told us, of economy; they have cut it down to £1,175. As to the bottom income limit, it was £300, which the Committee said ought to be £400; and they have cut it down to £375. This piece of cheeseparing is put forward on the ground of economy.

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I hope it will not be thought from anything that I have said that I am intending to be in any way critical of the noble and learned Lord on the Woolsack. I have occupied his position and I know what the Treasury is. This is one of the reasons why I have always wondered whether it might not be better (indeed, I remember discussing this with Mr. Crossman when he was Minister of Health and Social Security) that the Minister of Health and Social Security should do this, because he has £5,000 million approved by the Treasury to spend and has considerable discretion as to how he spends it. Unfortunately, the Lord Chancellor has to battle away against the Treasury all by himself. I am not in any sense criticising the noble and learned Lord, but it is unfortunate that his Government should come along with this so late, and even then not carry out the recommendations of this admirable Advisory Committee and be too mean even to do exactly what they recommend. Since January 15, which was the date on which the Advisory Committee made this Report on the cost of living as it then was, how much inflation has there been? One of the hardships of putting these things off month after month is that if, some nine months out of date, you carry out the Committee's Report, by that time you have a further degree of inflation.
I welcome the fact that in future this is to be an annual event. That is an improvement. We welcome the Orders as a whole, but for the reasons which I have ventured to give we regret that they are made late, and that in the case of each of these Orders the recommendation made by the Advisory Committee has been a little cut down on the grounds of economy of a very cheeseparing kind.
7.36 p.m.
THE LORD CHANCELLOR: My Lords, I must thank the noble and learned Lord for the extreme enthusiasm and warmth of the welcome which he has given these Regulations. I do not quite know what to say, because he has so exonerated me from the strength of his strictures that I almost blush from shame. I should like to tell him one figure about which I reciprocate his kind understanding of the difficulties under which I have laboured with a similar understanding about the difficulties under which he may have laboured in the past. I should like
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to tell him one figure which may lead him to modify his strictures on the present Government. When the last Government, of which he was an ornament, left office, they were spending about £9 million on legal aid; we are now spending about £24 million on legal aid. Cinderella or not, she certainly is one of the fastest-growing, percentage-wise, of the social services.
I do not think that I should like to comment on the theory that my right honourable friend the Secretary of State for Health and Social Security would get more than the Lord Chancellor. It is open to question. You can be lost in a crowd much more easily than you can be lost if you are the one petty ewe lamb of a small Ministry. Moreover, looking, as I do, at the correspondence I get from Members of Parliament about the administration of the Scheme, I give every letter that I get, with the Law Society, individual attention, which I think counts for something in dealing with M.P.'s correspondence. I doubt whether they could hope to get anything like that from other masters of the big battalions.
There are a number of questions about legal aid one gets in the course of business which it is possible that the Lord Chancellor's Office, with its considerable expertise, can answer better and more helpfully than a great Civil Service Department. I do not think that one wants to take that too tragically. It may be that a future Government will come to a different conclusion, but at present, being mildly Conservative, I think that I prefer the status quo.
The noble and learned Lord asked what had been the rate of inflation since a date in January. He kindly gave me some notice of this question. I can only tell him what I am told. The retail price index from mid-February to mid-September, which is the latest figure available, has risen from 172·4 to 181·8, an increase of 5½ per cent. I am also told that in arriving at the agreed uprating of the legal aid limits regard has been paid to the increase in the cost of living up to and including the time when the authority for the increase was given. I then inquired what was the time when the authority for the increase was given, and I was rather happy to see that it was October 15, which is only a few days ago.

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It is true that the noble and learned Lord put down a Question and I gave the Answer that he attributed to me. I do not think he would be right to assume that either I or my minions have been altogether idle during that period. What we have achieved—and I think this is of considerable value—is tile annual review, and I think it was worth getting it in the terms in which it has been obtained. Of course, as the noble and learned Lord is well aware, what one gets is a package, and one sometimes has to work for it. I think I have done the best I could in the circumstances for the customers, who are the people in need of legal aid and legal advice and assistance.
I do not think one should despise the obligation of loyalty which a spending Minister, even a modest spending Minister like myself, with a relatively small budget, has to owe to his Treasury colleagues. The Treasury are always given the reputation of being mean, but of course it is not their money they are dispensing; it is other people's money. There is no question of meanness about their own. We are constantly being asked to reduce public expenditure, and here am I coming along with a proposal to increase it by more than £1 million a year. I can quite understand people saying that that is a very small sum when we are spending I do not know how many thousands of millions a year in the Budget; but I think the fact is that you have to practise as you preach, and if one Government Department is told to practise economy with a very large sum, I suppose those who are less lucky and have to practise economy on rather smaller sums have to show a like example.
I certainly am not one who would deprecate in any way the importance of legal aid or the desirability at some stage of considering the whole scope of this social service. The truth is that since 1949 successive Governments have operated a bottom limit which is not much above National Assistance level, and so long as that remains the statutory basis for the thing there are very considerable limits on what can be done to improve matters. This is clearly one of the matters that future Governments must think about, but they must think about it in the context of the national economy
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and of other calls on our purse. The thing about legal aid, apart from criminal legal aid, is, of course, that if you win your action or are successful in your defence to an action for which you get legal aid the unsuccessful litigant pays, and the Fund is to that extent recouped; and, of course, if you recover money as a plaintiff, to the extent that the unsuccessful defendant does not pay the actual money recovered is charged—rather cruelly, but I think justifiably—with the recovery of the costs. So it is not quite as expensive as it would otherwise be; and one has therefore to look at the rather modest limits of income and capital both in the light of deductions in this regard which are made and in the light of these considerations. But since the noble Lord has been so generous in his praise of these new Regulations, I shall not say any more.
On Question, Motion agreed to.

LEGAL ADVICE AND ASSISTANCE (FINANCIAL CONDITIONS) (No. 2) REGULATIONS 1973
7.43 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that these Regulations be agreed to. I have already spoken to them.
Moved, That the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations 1973, he approved.—(The Lord Chancellor.)
On Question, Motion agreed to.