Lords Sitting of 5 December 1974

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Manchester.
The Duke of Buccleuch and Queensberry—Took the Oath.

ROADS: MARKING OF THIRD LANES
Lord SWANSEA: 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 consider marking the so-called "fast" lane of dual carriageway roads, and particularly motorways, in some distinctive manner, in order to impress upon motorists that this lane should be used only for overtaking.
Lord MELCHETT: My Lords, the possibility has been considered, but my right honourable friend the Secretary of State for the Environment has concluded that the practical difficulties and expense of such a step would outweigh the benefit.
Lord SWANSEA: My Lords, I am rather disappointed at the noble Lord's Answer. Would he not agree that hogging the outside lane in this way is a peculiarly selfish habit, and is particularly dangerous as it tempts other drivers to break the law by overtaking on the near side?
Lord MELCHETT: My Lords, I am sorry that the noble Lord is disappointed at the reply. Her Majesty's Government have looked into this matter with some care. I would agree with him that it is important that motorists should follow the rules about the correct use of lanes, which are clearly set out in the Highway Code and in the publication Driving. Her Majesty's Government have taken considerable steps to make sure that this information is given to the public. Two short films have been made and shown frequently on television, and
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a short cinema film is currently being prepared.
Earl HOWE: My Lords, is the noble Lord aware that our motorway, the M1, is now so very overcrowded at certain times of the day, particularly the rush hour, that a motorist is really forced to move along the third lane rather than weave from lane to lane, which is a rather dangerous manoeuvre?
Lord MELCHETT: My Lords, I am not quite sure which lane the noble Earl is saying the motorist is forced to stay in.
Earl HOWE: My Lords, most individuals think of this lane as the fast lane. As a matter of fact, the police refer to it as the third lane.
Lord MELCHETT: My Lords, my understanding is that it should correctly be referred to as the overtaking lane, and that is the important point to stress. It is not the fast lane, and motorists should not think of it as such.
Lord THOMAS: My Lords, is the noble Lord aware that if the right-hand lane is used only for overtaking it is a waste of a great deal of good motorway?
Lord NUGENT of GUILDFORD: My Lords, is the noble Lord aware that the best way of getting effective lane discipline is to appoint a modest addition to the traffic police, whose presence on the motorway would very soon ensure correct observance of the Code.
Lord MELCHETT: My Lords, what the noble Lord says is, I am sure, quite right. It is, of course, very difficult to get motorists to observe this rule.
Lord REDESDALE: My Lords, can the noble Lord tell us what is being done to inform drivers of large articulated vehicles, particularly those from the Continent who come over and are not perhaps aware that they should not go into the third or overtaking lane? I remember an occasion when I assumed that a lorry would stay on the left-hand side but it moved over into the overtaking lane, which was rather frightening. I wonder what is being done to inform these drivers that they should not go into that lane?
Lord MELCHETT: My Lords, I have a feeling that that is a slightly

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different question from the original Question on the Order Paper about markings on lanes. My understanding was that, on the whole, Continental drivers had a better reputation for sticking to the left—or the right, in their case—than drivers in this country.

PAYE RECEIPTS
3.8 p.m.
Lord SHINWELL: 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 to state the total sums received in direct taxation from employees subject to the "pay as you earn" policy from January, 1973, to the latest available date.
Lord JACQUES: My Lords, the Inland Revenue's gross receipts of income tax through the PAYE system between January, 1973, and October, 1974—that is 22 months—were £11,900 million. This figure includes not only tax paid by employees but by office holders such as directors, Members of Parliament and judges. It also includes tax paid by occupational pensioners. Separate figures for employees arc not available.
Lord SHINWELL: My Lords, would my noble friend agree this is a vast contribution made by employed persons, even if it includes directors and Members of Parliament? Has he any idea how it compares with the contribution made by way of direct taxation by industry? And has he got in mind the additional sums paid by employed persons in indirect taxation? Has not this got some relation to the wages that some of the employed persons receive, and the vast sums of money extracted from them by way of taxation?
Lord JACQUES: My Lords, no matter who is paying, it is a vast sum. The amount collected under PAYE in 1971 was 59 per cent. of the whole of direct taxation. In 1972 it was again 59 per cent., and in the 22 months from January, 1973, up to October, 1974, it was 60 per cent., so there was a slight movement upwards. I would point out that my right honourable friend recently stated in the
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other place that he was fully aware of the effect of inflation upon income tax allowances, and he gave an undertaking to review these allowances in connection with his Budget next spring.
Lord SHINWELL: My Lords, it is very interesting to have figures furnished to Members of your Lordships' House which indicate that the employed persons of the country, whatever category they are associated with, are actually paying more by way of direct taxation than the so-called propertied classes. My noble friend will understand that I am not raising the issue of a class war, but should not these facts help to diminish the criticism that is often levelled against employed persons who ask for increases in their salaries and wages?
Lord JACQUES: My Lords, I would wholly agree with my noble friend.
Lord CARRINGTON: My Lords, is the noble Lord aware—and there is no earthly way that he could be—that I received my first pay as Leader of the Opposition last week, and the net amount payable to me was 71p? Is the noble Lord satisfied that that is more pay than earned?
Lord JACQUES: My Lords, I would point out that I was dealing with figures up to October, 1974.
Lord SHINWELL: My Lords, in view of that pathetic hard luck story that has been given to the House, may I ask my noble friend whether, with some of his colleagues on the Front Bench, he would consider taking the hat round in order to help the noble Lord?

GRENADA: USE OF AID
Lord SAINSBURY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they can confirm reports that £250,000 of British aid to Grenada, earmarked for such specific projects as the extension of the airport, and the construction of bridges, roads and primary schools, has been diverted to other purposes by the Prime Minister of Grenada including payments to his personal police force.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, the Grenada Government were recently unable to pay certain bills for development projects, although aid funds to cover these projects had been advanced by Her Majesty's Government. I am however glad to inform noble Lords that the Grenada Government have now agreed to repay these funds.
Lord SAINSBURY: My Lords, while thanking my noble friend for that Answer, may I ask whether she would not agree that in 1962 when Mr. Gairy was the Chief Minister of the Island he had to be deposed for misappropriation of public funds, and a Treasury representative had to be sent out—I put it that way—to clean up the books? Secondly, does she not feel that the advice which we were given locally, that Gairy would change the colour of his spots when he was granted independence, has proved wrong?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I am not an expert on leopards, but, nevertheless, I am of course fully aware—as were Her Majesty's Government at the time of independence—of the White Paper of 1962, which investigated the financial situation of that time. I am quite sure that noble Lords will be relieved to know that a different form of paying aid funds will now apply to Grenada—and to other countries—whereby advances are replaced by reimbursing certified claims.
The Earl of ONSLOW: My Lords, would the noble Baroness answer the last part of the Question about payment to the personal police force? Were Her Majesty's Government aware of this matter and, if so, for how long? How can they ensure that this money does not again go to abuses of a similar kind?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I think I have explained that under the new system there will not be abuses. We have no precise information about the particular application of these funds to the "police force", but again noble Lords will be delighted to know that, on Mr. Gairy's
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assurance, the "police force" has now been disbanded.
The Earl of ONSLOW: My Lords, what is Mr. Gairy's assurance worth?
Lord PANNELL: My Lords, is the noble Baroness aware that when she refers to the Government, or when questions refer to the Government, the reference is not to this Government but to the previous Government?
Lord REIGATE: My Lords, is the noble Baroness aware that, as someone who first knew Mr. Gairy in 1953, none of these facts come as any great surprise to me? Could she say exactly what type of official control in the Island there is to ensure that monies are not spent as quite obviously they have been in the past?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, there will now be two different kinds of accounts, one in the Island which will be supervised by our people from Barbados, and secondly contractors in this country will be paid here.
Lord BROCKWAY: My Lords, is the Minister aware that, uniquely in this case, many of us opposed independence because of the private Police State run by the Prime Minister? Do not the facts since show that we were correct in that opposition and in welcoming the Government's intention to revise a system in which aid is declared? Have the Government any more reason today to believe the Prime Minister than they had when independence was granted?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, it must indeed have been a unique occasion for my noble friend to have opposed independence—and I may add, so did the present Government who were then in opposition. Independence was in fact granted by the Party opposite even though we voted against it. Nevertheless, I think we must remember that we all have at heart the welfare of the people of Grenada, and that we must continue to give aid to what is a lovely and potentially prosperous Island.

CYPRUS: TURKISH REFUGEES
3.21 p.m.
Lord DRUMALBYN: My Lords, I beg leave to ask the Question which stands in ray name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many Turkish Cypriot refugees there are now in the British Sovereign Base at Episkopi, under what conditions they are living, and why they are not allowed to go to the destination of their choice.
Lord WINTERBOTTOM: My Lords, there are approximately 8,500 Turkish Cypriots at present living at Paramali in the Western Sovereign Base area. Their living conditions are relatively good and they have adequate shelter and food. There are no restrictions on their freedom of movement between the Western Sovereign Base area and the Republic of Cyprus.
Lord DRUMALBYN: My Lords, would the noble Lord not agree, in spite of what he has said, that it is in the interests of all concerned—especially of the refugees—that arrangements should be made as soon as possible for these refugees to go to the places that they choose?
Lord WINTERBOTTOM: My Lords, I would agree totally with the noble Lord. At the present Government's suggestion, Mr. Clerides and Mr. Denktash have included the problem of Turkish Cypriots in the Western Sovereign Base area in their current discussions. As a result a small start has been made and 120 Turkish students have been able to leave, while the very old, the very sick, the very young and the pregnant have also been exchanged. But the problem is still great and the rate of movement is probably too slow.
Lord AVEBURY: My Lords, may I ask whether it is the case that relatives of refugees in Cyprus have had great difficulties in tracing them, notwithstanding the efforts of the Foreign Office through broadcasts over Cyprus Radio and so on? Why is it impossible for a census to be taken of the refugees who are in the Sovereign Base area so that a list can
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be published and relatives in this country can be assured of their safety?
Lord WINTERBOTTOM: My Lords, I am speaking without exact knowledge, but I understand some such study has taken place and I will arrange to have the noble Lord, Lord Avebury, informed.
Lord BETHELL: My Lords, is the noble Lord aware that many Turkish Cypriots in the base at Akrotiri are not willing to go to Turkey and from there to the Northern part of the island? So far as my information goes, many of them wish to return as soon as possible to their homes in the Southern part of Cyprus. Will the Government undertake not to connive at any mass compulsory population movement of all these refugees, against the will of some of them, to Turkey and the North of Cyprus?
Lord WINTERBOTTOM: My Lords, as long as these 8,500 Turkish Cypriots are within the Sovereign Base area, there will be no compulsion. Freedom of movement exists and, indeed, even those who, as it were, half-settled in the Akrotiri area move over the border into the Republic of Cyprus to tend their farms and come back into the Base area to sleep at night.
Lord DRUMALBYN: My Lords, may I ask the noble Lord one other question? He said that the conditions in which these people are living are relatively good. Is he satisfied that they are relatively good for the time of the year, and will he do everything to make certain that between now and the time when arrangements are made for them to go their conditions are improved?
Lord W1NTERBOTTOM: The noble Lord is absolutely correct. We are entering the winter period when conditions will become much harsher. We must also not forget that, unfortunately, many Greek Cypriot refugees who are not in the Sovereign Base area will live under equally harsh conditions during this winter. But her Majesty's Government will do what they can.
Lord HAWKE: My Lords, is the Minister satisfied that these people have the basic needs of life such as bread, sugar and salt?
Lord WINTERBOTTOM: Certainly my Lords, the basic needs will be

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ensured. The cost to Her Majesty's Government for the aid given to these refugees is £20,000 a week.

BREAD SUPPLIES: INDUSTRIAL ACTION
Earl FERRERS: My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given Private Notice, namely:
"To ask Her Majesty's Government whether they will make a further statement on the supply of bread."
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, my noble friend Lord Beswick will answer this Question at a convenient moment after 3.30 p.m.

THE CHRISTMAS RECESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, may I now, with the leave of the House, announce the dates of the Christmas Recess? Subject to the progress of business, the House will rise for the Recess on Thursday, 19th December, and resume on Tuesday, 21st January 1975. For the convenience of your Lordships, the House will meet at 11 o'clock in the morning of Thursday, 19th December.
Lord BOOTHBY: My Lords, may I ask the noble Baroness, Lady Llewelyn-Davies of Hastoe, whether she thinks this leave for Christmas is grossly excessive in view of the crisis that we are now undergoing?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, Her Majesty's Government are always aware of any kind of emergency that may arise. I feel certain that your Lordships would concur if we thought it necessary to recall the House at an earlier date.

BUSINESS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, may I, with the leave of the House, once again intervene? The Private Notice Question, which will be answered after 3.30 p.m., will then be
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followed by a Statement on British Leyland which will also be made by my noble friend Lord Beswick.

THE GREEN, ABERDEEN (BOOTS THE CHEMISTS LIMITED) ORDER CONFIRMATION BILL
Considered on Report.
BIOLOGICAL STANDARDS BILL [H.L.]
Read 3a, an Amendment (privilege) made Bill passed, and sent to the Commons.

DISTRICT COURTS (SCOTLAND) [H.L.]
3.28 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord HUGHES): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of LISTOWEL in the Chair.]
Clause 1 [Abolition of existing inferior courts and establishment of district courts]:
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 1:
Page 1, line 19, leave out "(other than those exercisable when acting as a court of summary jurisdiction)"
The noble Lord said: This Amendment is to leave out the words:
"other than those exercisable when acting as a court of summary jurisdiction."
I find it difficult to know what those words mean. As I read this subsection, it seems to me that all functions of burgh magistrates not otherwise provided for, including a court of summary jurisdiction, shall be exercisable by a justice of the peace. This seems to me too simple an explanation, and I rather suspect there is something else in it. If so, perhaps the noble Lord will tell us so that we can understand the object of the subsection.
Lord HUGHES: Like the noble Earl, Lord Selkirk, I also had some doubt as to exactly what was the effect of these words, so I have examined the matter fairly thoroughly. I find, in fact, that it can perhaps be described as a "belt and braces" principle. When an Amendment is moved which has the effect of "adding belt to braces", it is generally the practice for Governments to say that it is not necessary to do this. I prefer consistency in the arguments which I advance rather than sticking to the wording of the Bill. For these reasons, I am prepared to accept the Amendment.
The Earl of SELKIRK: I thank the noble Lord.
On Question, Amendment agreed to.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 2:
Page 2, line 7, after "bail bond" insert "bail money, caution money"
The noble Earl said: I beg to move that the words "bail money, caution money" be inserted in the place mentioned in the Amendment. There is, I believe, bail money and caution money in the old courts, and they should accordingly be transferred to the new district courts. I beg to move.
Lord HUGHES: Clause 1(3) of the Bill provides for continuity in the handling of cases between the existing courts and the new courts. Under the provisions of the subsection the district court will be treated as a continuation of the old court, and all acts, proceedings and documents of the old court concerning the court shall have effect accordingly in the new court. Bail and caution money paid to an existing court would be returned, where appropriate, by a district court. I am informed that there is no need for an explicit statutory provision to cover this, since the clause already provides that the district court shall be treated as succeeding to and being the same court as the existing court.
I would point out that the part of the Bill which the noble Earl wishes to amend refers to documents and proceedings, and neither bail money nor caution money can be regarded as either a document or a proceeding. So in the first place it is unnecessary, as I have said, to include any reference to this to ensure that the man who properly turns up has his bail or caution money returned to him;
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nor is it appropriate to treat either of these items of money as being a proceeding or a document. I therefore feel that this Amendment is unnecessary, and I ask the noble Earl to withdraw it.
The Earl of SELKIRK: With that explanation I am very happy to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1, as amended, agreed to.
Clause 2 [District of, and exercise of jurisdiction by, district court]:
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 3:
Page 2, line 31, after first "or" insert ", in areas or in circumstances in respect of which the Secretary of State may direct.".
The noble Earl said: This Amendment is intended to bring about a slight change of emphasis, and refers to the appointment of an increased number of stipendiary magistrates. Those concerned with the work of the inferior courts in Scotland hold strong views in favour of an Amendment of this character. What it really does is to give to the Secretary of State the initiative in appointing additional stipendiary magistrates. The reason I bring this up is because of Lord Grant's Report on sheriff courts, which was published in 1967. On examining the sheriff courts he felt immediately compelled also to examine the jurisdiction of the inferior courts. He found that he was seriously concerned at the alarming congestion in the sheriff courts, and when he went on to look at the inferior courts he found that they, too, were in difficulties.
He suggested four possible improvements here. The first is closer integration between the sheriff courts and the inferior courts. These two courts should be as close as possible in working together and in a later Amendment I shall put forward a specific proposal dealing with that. Secondly, he suggested that work should be transferred from the sheriff courts to the inferior courts in so far as the latter are competent to carry this out. Thirdly, he suggested an extension of jurisdiction of the inferior courts, but not an extension or increase of their powers of punishment. As a matter of fact, the Bill does not extend their jurisdiction, but that is the point which he made. Finally, he emphasised

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quite clearly in his Report that there must be an increase in the number of stipendiary magistrates except in the areas which are not thickly populated. The importance of this is that to some ex-tent the stipendiary magistrate has the powers of a sheriff. Glasgow, I believe, is already asking for an additional stipendiary, and this should not cost any more money. Not only will the money come in from the fines, but I believe that the cost of maintaining magistrates will be at least as much as the cost of employing a stipendiary.
The weakness of the Bill as it stands, to my mind, is that the appointment of stipendiaries is left entirely to the local authority. This is in fact a national problem; it is not a problem which can be left simply to the local authorities to deal with. The Secretary of State, in making a decision in regard to this, has the advice of the Lord Advocate, who is now taking over prosecutions, and we are very glad indeed that he is. I hope to bring in the sheriff principal, who can also give advice on this matter if he is put in a position in which he can supervise all criminal jurisdiction inside his sheriffdom. I believe this will bring about greater speed in disposal; it will give a much more standard and stable quality of justice; and it will maintain the confidence. This is no reflection at all on the existing bailie system. Lay magistrates will be available whenever they can do the job, and counsellors can play their part by appointment at any time under Clause 6. I think that this is a considerable advance on form, and I believe it is right that the initiative in increasing the number of stipendiary magistrates should lie with the Secretary of State. I beg to move.
Lord HUGHES: I beg to move that the House be now resumed.
On Question, Motion agreed to.
House resumed.

BREAD SUPPLIES: INDUSTRIAL ACTION
3.38 p.m.
MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord BESWICK): I My Lords, with permission, I would repeat a Statement on the supply of bread:
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"Industrial action by the Bakers' Union has had the effect of reducing commercial supplies of bread by about 75 per cent. I regret the inconvenience, even hardship, suffered as a result. The independent Conciliation and Arbitration Service has been exploring urgently with the two sides the possibilities of resolving the dispute. A reference to arbitration was agreed this morning and I understand that the arbitrator will begin to hear the parties this afternoon. I very much regret however that the Union did not recommend an immediate return to work."
My Lords, that ends the Statement.
Earl FERRERS: My Lords, the House will be very grateful to the noble Lord, Lord Beswick, for repeating that Statement, because this is a situation which is causing, as he well knows, grave public concern. I welcome the fact that arbitration has been agreed to; this is a good step forward. But, my Lords, is it a fact that the bread strike is caused by a demand for a 66 per cent. wage increase? If this is so, would the noble Lord say whether this is a breach of the social contract? As arbitration has been agreed, why is it that the Secretary of State for Employment has been silent upon urging publicly a return to work by those who are involved in the strike, both to preserve the social contract and also in order to ensure—which is the Government's very direct responsibility—that there is an adequate supply of bread to the people of this country? The Secretary of State for Employment has been remarkably silent upon that. We should have expected the Government to take a sincere and direct lead.
Lord WADE: My Lords, I thank the noble Lord for repeating this Statement, and I welcome the fact that arbitration is taking place. On the other hand, a 75 per cent. cut in supplies is a very serious matter. With regard to supply and distribution pending a settlement, is there anything that the Government can do to help in this respect? Would the noble Lord agree that there are certain categories of people who are particularly seriously affected, such as a family with small children, where both the father and mother are going to work and neither can queue at the shops where there is bread? Secondly, is there any hope of those on

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strike being persuaded to go back to work pending a conclusion of this arbitration? I would hope that they might be so persuaded. Lastly, is there much evidence of people buying up supplies unjustifiably, in so far as there are supplies?
Lord BESWICK: My Lords, replying to what the noble Earl, Lord Ferrers, said about my right honourable friend the Secretary of State for Employment, he has not been silent and, in fact, made a Statement on Friday of last week. I of course recognise that there is concern, and I accept, as the noble Lord says, that the situation is serious. The difficulty here is the practicality of setting up a rationing system overnight, and especially a rationing system on the selective basis which the noble Lord understandably suggested. What the Government have concentrated upon, in the first place, is setting up an arbitration and conciliation service. Thankfully, it is apparently working and the possibilities are that it will achieve a settlement much more effectively, I might suggest, than the arrangements that were in existence a year ago.
Earl FERRERS: My Lords, could the noble Lord answer the question I asked him? If this strike is caused by a demand for a 66 per cent. pay increase, is that a breach of the social contract? Can he also say whether his right honourable friend has either publicly or privately advocated a return to work while arbitration is going on and, if he has not, will the noble Lord do so?
Lord BESWICK: My Lords, I deliberately did not answer that part of the noble Earl's question. It is a delicate area. It is delicate from the point of view of those who had responsibility for affairs last February. The basic pay of these bakers happens to be £23·80 a week for a 40-hour week. That is the situation left behind by the statutory pay code of noble Lords opposite; and it is a percentage on top of that that makes the figure demanded appear to be so great. Obviously, even 66 per cent. of that figure does not result in a very large absolute award. These are the facts of the situation. I did not want to go into it, because I do not think it is seemly and useful for the Government to get involved in an arbitration process.
Baroness YOUNG: My Lords, I quite appreciate that the noble Lord, Lord Beswick, does not really want to answer all my noble friend's questions, but would he say whether or not the Secretary of State for Employment will urge a return to work? This is an extremely serious position for the housewives of this country, for those with small children, for those who are working and who cannot spend hours in the bread queue; and this is not really a matter on which the House wants to hear debating points.
Lord BESWICK: My Lords, that is exactly the reason why I did not take up the points made by the noble Earl opposite in the debating way in which he posed his questions. But as for his point about the Secretary of State for Employment, the fact of the matter is that he made reference to this situation last Friday. In my answer to the question, I said that I very much regret that the union did not recommend an immediate return to work. These are words which were agreed with the Secretary of State for Employment. He regrets the fact that they did not agree to an immediate return to work while the arbitration process is taking place. It is possible —I put it no higher—that by tomorrow there will be an award by the arbitrator, Professor Thomason. I agree with the noble Baroness that it is unwise to stir up debating points, if there is a chance of getting an agreed settlement by tomorrow.
Baroness EMMET of AMBERLEY: My Lords, could the noble Lord tell us whether there is a sufficiency of flour and yeast to fill the present gap of bread which is not available?
Lord BESWICK: Yes, my Lord. That is a very practical question. There is a sufficiency of both flour and yeast. The difficulty is that it is in a form that does not make it easy to distribute. Packaged flour is being distributed as quickly as possible, and is being taken up very quickly. Certain yeast is being distributed in packaged form. Clearly, if the dispute is to continue something will have to be done about the stocks of yeast that are not in the sort of packages that make retail distribution easy.
Earl FERRERS: My Lords, is the noble Lord aware that the General Secretary of the Bakers' Union said that unless a

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miracle happens he cannot see any bread being available until a week on Saturday? From the answers the noble Lord has given—and I do not wish to make debating points—is he aware that we can only conclude that the Secretary of State for Employment has not, and does not, urge a return to work while this arbitartion is going on? With the greatest respect to the noble Lord, I think the Government have a great responsibility to housewives to see that there is bread available.
Lord BESWICK: My Lords, they have a responsibility and they are discharging that responsibility—and I rub in this fact —much more effectively than noble Lords opposite a year ago. This is so, and you cannot escape this fact. We have set up a Conciliation and Arbitration Service. The Conciliation Service worked quite quickly; it failed to get the two sides together but it did get them to agree to an abitrator, Professor Thomason. The arbitrator has been appointed; he started work at two o'clock this afternoon and he intends to work on as long as is necessary. It is a possibility—I cannot put it higher than that—that there may be an award which is acceptable. In those circumstances, I really think the noble Earl should take advice from the noble Baroness who sits beside him and not make debating points.
Lord DRUMALBYN: My Lords, would the noble Lord assure us that both sides have agreed in advance to accept the award of the arbitration?
Lord BESWICK: No, my Lords, I cannot give that assurance.
Baroness YOUNG: My Lords, would the noble Lord therefore not agree there can be absolutely no guarantee? In view of what the General Secretary of the Bakers' Union has said, that there is a strong possibility that there will be no bread until next Saturday, there is an extremely serious situation of the country doing without bread for two weeks which calls for some kind of contingency plans? We have Christmas only ten days' after that, and what plans have the Government in mind for dealing with this situation?
Lord BESWICK: My Lords, possibly the experience of the noble Baroness in industrial affairs is not extensive; but
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if one talks about contingency plans at this point it does not help the atmosphere within which arbitration takes place. That is the first point. The difficulty here of putting anything into effect is that Governmental machinery is not really appropriate. What is appropriate is the ordinary distributive process. My understanding is that those companies, concerns and shops who are distributing bread are co-operating extremely well without any great dramatic show. Most of them already have a voluntary rationing system in operation. Everything that can be done is being done to distribute flour and I have said that, if possible, something will be done about distributing yeast. I think that it will be better to accept that, although there is no great, dramatic Government operation, the appropriate steps are being taken.
Lord CARRINGTON: My Lords, why is it provocative to ask the people to go back to work while arbitration takes place in order to avoid hardship?
Lord BESWICK: My Lords, I have said that in the first place the Secretary of State regrets that they have not agreed to go back immediately to work when accepting this offer of arbitration. I have said that. If the noble Lord wants to know what is provocative and what is not, I suggest that he should read Hansard tomorrow in order to see what the noble Earl, Lord Ferrers, has had to say.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords with the leave of the House, may I say there will be no second Statement as I had previously announced. This was owing to a misunderstanding.

DISTRICT COURTS (SCOTLAND) BILL [H.L.]
3.52 p.m.
House again in Committee on Amendment No. 3.
Lord BALERNO: The Amendment relates to stipendiary magistrates for the lower courts, the new district courts in Scotland. The importance of the Amendment is that, while almost all the lower court work has in the past been done, so far as the towns, cities and boroughs are

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concerned, by what is known as the borough courts, it has been quite obvious that the load on the borough courts as well as on the justice of the peace courts in the country areas has been steadily increasing and that we have a mechanism in Scotland which has already been used for court work with great effect. Glasgow has used a system of stipendiary magistrates—full-time magistrates—which enables its courts to catch up with the backlog of, mostly, petty crime. I am on the Committee which advises the Secretary of State on problems of the justices of the peace of Scotland and, during the past few years, we have looked into this matter with very great care. It was only after considerable deliberation over the years that we came down strongly in favour of a substantial increase in the number of stipendiary magistrates.
This is quite essential. There is nothing very difficult in the Amendment. It merely encourages an increase in the number of stipendiary magistrates where they are required. That the stipendiary magistrate should be appointed by the Secretary of State means that it will be possible to have an even level of justice in these courts throughout the whole of Scotland. There is no reason why the local authorities should feel insulted in this matter because, as I understand it, it will still be possible for them to make requests for the appointment of a stipendiary magistrate in those areas where there is an increase of crime or a shortage of justices.
I have a second and perhaps more cogent reason for supporting the Amendment: at present, new industries are developing in Scotland. Most of these are centred on oil and the new industrial areas are developing more particularly in the North-East of Scotland—Aberdeen, the Grampians and in Ross-shire round Nigg Bay—though they are also coming to other parts on the West coast. I will not say these developments bring in undesirable characters, but they do bring in labour from other parts of the world, using the word "world" with due care and meaning. There is no reason to anticipate that the incoming labour to these parts of Scotland will be any more law-abiding than the existing population, and there is some reason for apprehension that there will be more crime, not merely because there will be more people but
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because they will be living in conditions which may be conducive to crime. Therefore, I think it is important that it should be possible, if the need arises, to have more stipendiary magistrates and that they should be appointed by the Secretary of State so that the service may be uniform throughout the country.
3.55 p.m.
Lord MOWBRAY and STOURTON: I believe my two noble friends have said everything which needs to be said upon this matter. I strongly endorse what they have said. This is a flexible provision which will enable the Secretary of State to use the new powers where necessary, as explained by my two noble friends.
3.56 p.m.
Lord HUGHES: I am afraid that there is some misunderstanding on the part of noble Lords opposite as to what exactly the Amendment would do. It is certainly not in the category implied by the noble Lord, Lord Mowbray and Stourton, who said that this was a flexible provision.
First of all, in reply to the question asked by the noble Earl, Lord Selkirk, Glasgow is not asking for an additional stipendiary magistrate: what Glasgow has done is to ask for authority to appoint a stipendiary in place of one who has retired. Therefore, the number will remain as it is. The effect of the Amendment which is under discussion would be that the benches of the district courts were manned exclusively by stipendiary magistrates. It would not, as the noble Lord, Lord Balerno, said, mean only increasing the number of stipendiaries where they are required. That is why I say that it is not more flexible. It will make stipendiaries the basis upon which the courts have to be manned, because it goes on to except those areas and circumstances in which the Secretary of State directs that lay justices may act on the bench.
Whatever view one may take of the relative merits of stipendiary and lay magistrates, I cannot advise your Lordships that an Amendment on these lines could possibly be acceptable. It seems to be contemplated that the normal position in the district court would be that one would have a stipendiary magistrate and that justices would be used only in special circumstances or in special areas—for example, in rural areas. I do not think

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that it is appreciated just how much work a stipendiary magistrate does. The one thing which is quite clear from the workload of those stipendiaries who have been operating in Scotland is that there are very few areas in Scotland where the workload falling on the lower court would be of an order to justify the appointment of a stipendiary. There could be a few cases where, by joining together a number of districts, a stipendiary might be appointed to cover those districts, but I feel that that would be going back, on the court side, to the sort of objections which many of us had when the reform of local government was going through, that far too large bodies were being created. It would be quite retrograde, having regard to the present feeling in relation to the system now coming into operation in Scotland, that we should create these large areas, the only justification for which would be to enable a stipendiary to have a proper workload.
Even if one ignored all the practical difficulties which would result if the Amendment were accepted, the resulting system of courts would be unacceptable in principle. Successive Secretaries of State, even of the same Party, do not necessarily adopt the same criteria in dealing with matters of this kind. One year lay justices might be sitting in every district court, whereas in the following year they might be allowed to sit only in a minority of districts. No doubt successive Secretaries of State would act sensibly about these matters, but what must be avoided is the uncertainty which is created by the mere existence of such powers of direction. Justices might well be loath to undergo extensive training if they were aware that at any time their services could be declared to be no longer required. Moreover, persons who were very suitable for appointment as justices might be reluctant to accept the office because of uncertainties about whether or not they would be able to sit on this bench.
I would draw your Lordships' attention to the fact that the provision contained in Clause 1(1) of this Bill, whereby the Secretary of State may direct that a district court need not be set up in a particular district, does not suffer from the grave defects of the present Amendment. First, I ask you to note that the power can
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be exercised only on or before 16th May 1975, and not thereafter. Where a district court is established on 16th May 1975—and this will be so in the vast majority of districts—then such a court will continue, as the Secretary of State has no power to decree otherwise. Secondly, if or when he is invited to exercise his power prior to 16th May 1975, the Secretary of State is required to have regard to the likely lack of business for such a court. His power is not therefore an unfettered one. To ensure that from 16th May 1975 Scotland has a nation-wide system of lower courts which can be properly established and whose future composition is not left uncertain, I must advise your Lordships that this Amendment should not be accepted.
Lord BALERNO: I really cannot follow the noble Lord, Lord Hughes, in this matter at all. He thinks that there will not be sufficient work for a stipendiary magistrate. In certain areas that is so: of course there will not be, and the lay magistrates will deal with the work very well indeed. But I would draw your Lordships' attention to one of the most important provisions of this Bill, which is that for the first time in Scotland legal aid is being introduced into these lower courts. Directly you have legal aid you will have cases being contested, and automatically the workload will go up, and it will go up quite considerably. The Scots are a litigious people, and if we can get our litigation free of charge we shall hope to get full benefit out of this new system; so there will be a substantial increase in the amount of work in these district courts, especially following the introduction of legal aid. I mentioned during my Second Reading speech that in one month in Edinburgh there were something like 280 cases, in which 250 people were found guilty right away—that is, they pleaded guilty. The entire tradition of the lower court is, "Plead guilty; otherwise you go to prison."
Lord HUGHES: I am very sorry: it may be that the noble Lord, Lord Balerno, does not understand my argument. I cannot possibly accept the point of view that he is putting forward. It may be that the Scots are as fond of litigation as he says, though I think perhaps they are not so awkward on this point as the noble Lord is himself. I hope

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he does not find occasion to appear before the district courts—I have no doubt he could keep them going for a long time on his own without any assistance from other people—but the fact is that up to the present, even in such large centres of population as my home town of Dundee, which the town clerk used to describe as being "third in population, and second in commercial importance", it has never been found necessary to suggest having a stipendiary magistrate; the load has been capable of being easily handled by eight bailies; and in Aberdeen the workload was handled by six bailies. There is nothing to suggest that it will be necessary for the expeditious carrying out of business to create stipendiary magistrates in the areas in which there is no foreseeable demand or no foreseeable likely need. Nothing that the noble Lord, Lord Balerno, has said even remotely makes me think there is justification for this Amendment.
The Earl of SELKIRK: I must say that the answer of the noble Lord, Lord Hughes, is not really very satisfactory. He says there is nothing to suggest this need. May I just read what the Grant Report said—I wonder whether he has seen it?—
"There is an urgent need for relieving the pressure both on the sheriff courts and on the district courts."
The noble Lord has made no suggestion as to how this might be done. He says that the Secretary of State would be sensible, and I agree. I do not see why the Secretary of State should misuse the powers which are here suggested. I want to make it very clear that the responsibility for the expeditious carrying out of justice is a proper one for the Secretary of State and not for the district. I think the Secretary of State must accept that responsibility: it is his business to do so. If the noble Lord says that this is not the best way of doing it, I am prepared to accept that. But would he undertake to see whether there is a better way of bringing the responsibility of the Secretary of State more clearly into this Bill which deals with the whole area of district courts? If that could be done, I should be very glad to withdraw this Amendment and see whether or not we can devise something to meet this point more fully than hitherto. This is not a Party Bill. It is one in which we are all interested. We all want to see the administration
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of justice speedily carried out, and to a good standard, throughout the country.
Lord HUGHES: I am hoping that we are now getting to the point where the noble Earl is going to withdraw the Amendment. I am quite willing to look at the question of how further stipendiary magistrates may be appointed. The position is, however, that any local authority which wants to have a stipendiary magistrate can ask for one: there is nothing to prevent that. Quite obviously, any Secretary of State who is anxious—and it is also the purpose of this Bill—to see the administration of justice improved in Scotland will not refuse the appointment of a stipendiary magistrate where obviously there is a workload for him, and the people in the district wish it. After all, lay magistrates are not anxious to kill themselves because of an overload of work in district courts, if there is the possibility that they can be relieved, as in Glasgow, of part of the work by a stipendiary magistrate. As things stand at the moment it would be quite wrong to set up, as this Amendment proposes, a situation where you have almost to prove that you do not need a stipendiary magistrate before you can have the administration of justice conducted by a layman. Up to now the position has been the other way about: you have to show that there is need for a professional judge being appointed, and where that can be done no obstacle will be put in the way.
I am quite willing, between now and the next stage, to discuss this matter further with the noble Earl; but I should like to make it perfectly clear that in such a discussion I am not in any way committing either the Government or myself to the acceptance of so radical a principle as this Amendment suggests, and which tends to turn the whole thing the other way round. I should also like to remind the noble Earl that last Thursday we passed an Order making provision for changing procedure in relation to the sheriff courts. The sheriff courts have not been ignored at the present time. I would also remind your Lordships that there is a degree of urgency about this because the reform adopted in the Local Government (Scotland) Act left certain things undone, and they were to be the subject of further Government action.

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This is one of those things, and we have to get a system which will operate as from May of next year. In a longer term look at the relationship between the sheriff courts and other courts there may well be room for changes of this kind which might well be a factor in encouraging the appointment of stipendiary magistrates, if that were to be a method of relieving the burden on the sheriff courts. That is not the problem that we are at present facing in district courts.
I am, as I say, quite willing to discuss the matter, but I would not wish to mislead the Committee into believing that I am going any way towards accepting what we believe is the erroneous principle behind this Amendment, and which, on the way it has been spoken to by the noble Earl, Lord Selkirk, and the noble Lord, Lord Balerno, is not in fact what they are wanting. They are not asking for this to be made the main system. The noble Lord, Lord Balerno, said that it was to be a way of getting more stipendiary magistrates appointed. The Government have no objection to that, where it can be shown to be needed, but it is quite wrong to go about it in this particular way.
The Earl of SELKIRK: The noble Lord has done nothing about the sheriffs. All he has done is to create fewer, but full-time, sheriffs. That has nothing whatsoever to do with the congestion of the courts, and this Bill does nothing to relieve that congestion. I do not think that the administration of justice in this sense should be left wholly to the local authority. I shall develop that later. If the noble Lord were prepared to talk on the basis of bringing in the Secretary of State with a greater initiative to ensure the speedy and full disposal of justice I should be very glad to withdraw this Amendment and have discussions to see what we can do.
Lord HUGHES: I am prepared to discuss the matter in the interval with the noble Earl. I cannot commit myself as far as he says, but I am not asking him to commit himself to taking no further action. If he is not satisfied with the result of the discussion, obviously he has a remedy in a further Amendment—I would hope of a different character—at the next stage. If the worst came to the
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worst, he could put this Amendment down. So while he has nothing to lose by discussion, I have nothing to gain by promising something which I may not be able to carry out. All I am prepared to do is to talk, and if it produces a satisfactory result then it will be useful; if it does not produce a satisfactory result, it will be a waste of time.
The Earl of SELKIRK: We have a common interest here. I recognise that the noble Lord will seek that, too. In the circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.14 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 4:
Page 2, line 31, at end insert ("with a maximum of three")
The noble Lord said: On behalf of my noble friend Lord Selkirk I beg to move this Amendment. On Second Reading the noble Lord the Minister said that Clause 2 was designed to give maximum flexibility and he acknowledged that single magistrates in burgh courts were quite often the rule, and one or two justices is the tradition in those courts. This Amendment has a very small compass. Its purpose is merely to stop what has occurred occasionally in some parts, not particularly of Scotland but other countries as well. Too many magistrates may influence the feelings of a jury, since there can be too much discussion and argument. We think that a maximum of three is adequate. I should like to hear what the noble Lord has to say about that, and I beg to move.
Lord HUGHES: I find it difficult to disagree with the sentiments behind this Amendment. In the normal course of events I think three magistrates would be perfectly satisfactory, and that when the justices committee were drawing up rotas this is what they would endeavour to do. Strangely enough, I have been subjected to two conflicting pieces of advice about the number of magistrates. I have been told by an eminent lawyer that there ought to be either one or two magistrates, but never an odd number other than one. I am also told that the law as it stands is that if you have two magistrates and they disagree on the question of guilt, the accused person must get the benefit of the doubt and

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be declared to be not guilty. Unfortunately, the law does not condescend to express a view on what happens if, having agreed that he is guilty, one being a tough magistrate wants to send him to prison, the other being a lenient one says that a fine will do. How we get out of that difficulty, I do not know. It seems that the balance of argument is perhaps against having the even number, because obviously you cannot have a casting vote to decide on these matters. The probability is that three is the likely number.
Nevertheless, we would hope that the noble Lord will not press the Amendment, because we do not think it is desirable to put on a restriction of this kind particularly in the early stages. It may well be that magistrates, for instance, who have been undergoing training would want to sit with magistrates of greater experience, and in the early stages we might find that we have more than three magistrates. I certainly hope that we never reach the situation to which the noble Lord, Lord Balerno, referred, of sitting on a bench of seven or even more magistrates. We have undertaken some investigation and obviously it would be wrong to say that it does not happen, because the noble Lord, Lord Balerno, has told us that it has happened in his experience. But we can say it is very unusual, and in most cases the justices have sat in numbers not exceeding three. There will be a certain amount of administrative guidance given in these matters, and I can assure the noble Lord that we will certainly not encourage sittings of large benches of magistrates, other than perhaps on the occasions of which I have spoken where there are one or two more. We should not encourage six, seven or eight people to sit on a bench to decide whether so-and-so had been guilty of being drunk and disorderly the night before. So I can give the assurance that very likely what the noble Lord is asking for in this Amendment is what will take place, so perhaps he will be content to let the matter rest there.
Lord BALERNO: There is one point which the noble Lord, Lord Hughes, made on which I think he must be corrected, He seemed to think it was possible to have justice done with an even number of magistrates. I think in
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the interests of justice you must have an uneven number, and that would go down with most of the practising lawyers and the Law Society who have been talking about the matter during the past month. Whatever the number of lay justices on the bench, it would be an uneven number.
Lord HUGHES: I do not know whether my accent is getting more and more difficult, but I cannot understand why the noble Lord, Lord Balerno, thinks as he does. I emphasised the fact that it was desirable to have an odd number. I pointed out that the law lays down what takes place if there is an even number, and I said that I did not think that was a good thing. Perhaps the noble Lord, Lord Balerno, and I can have another set of talks to see whether we can get on a common basis of the use of common language.
Lord MOWBRAY and STOURTON: I am glad that my noble friend has been satisfied, and in view of what the Minister has said about positive guidance being given to the courts I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Jurisdiction and powers of district court]:
On Question, Whether Clause 3 shall stand part of the Bill?
4.20 p.m.
The Earl of SELKIRK: I am given to understand that in the Summary Jurisdiction (Scotland) Acts from 1954 to 1967 there is a "tariff" between the amount of the fine and the length of the period of custody. If I am correct in this, the period of custody for a £100 fine is three months. That would mean the amount of punishment which could be inflicted by the district court is greater than at present. I suggest that it should not be; I think 60 days is probably enough. Would the noble Lord be good enough to look at this to see whether the increase to £100 would extend the period of imprisonment?
Lord HUGHES: I cannot answer that question off the cuff. I suspect that the noble Earl is right. The whole basis for changing the limit from £50 to £100 is

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to take account of the change in the value of money. We have not yet reached the point where inflation is also attacking time.
Clause 3 agreed to.
Clauses 4 to 6 agreed to.
Clause 7 [Clerk of district court]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 7:
Page 5, line 22, after ("area") insert ("who shall be an advocate or solicitor qualified to practice on his own account").
The noble Lord said: This Amendment is to ensure that only a properly qualified person will be able to act as clerk to the court. In these courts, as has been pointed out, we may not always have fully qualified people on the bench and, in the interests of justice, it should be seen that the clerk of the court is a fully qualified person. He is a man of great importance and his advice is sought. I beg to move.
Lord HUGHES: I think I may be helpful here. The basis on which the Bill was drafted was to follow the pattern, which has become more common in legislation relating to local government in recent years, not to give any more instructions to local authorities about the type of person they might employ than is necessary. But there are exceptions; in certain cases it is laid down that professional qualifications will be required for the occupants of particular posts. I said earlier that the authorities had indicated that this is what they would do. I think, having regard to all that has been said, there can be no disagreement about the need for legally qualified people, particularly in the case of the clerk of the district court. It must be accepted that the clerk of the court is someone primarily concerned in the administration of justice rather than as an official concerned with the local authority administration or procedures. I understand that Amendments Nos. 7 and 8 are related. If the noble Lord will withdraw this Amendment and not move Amendment No. 8, I will undertake to consider tabling a suitable Government Amendment at the next stage.
Lord MOWBRAY and STOURTON: I am very grateful to the Minister for
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what he said. On this understanding, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clause 8 [Court houses for district court]:
4.23 p.m.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 9:
Page 5, line 37, after ("available") insert ("to that extent").
The noble Earl said: I should like to take Amendments Nos. 9 and 10 together. These are drafting Amendments and I put them down for the purpose of making it clear that district court buildings can be used for other purposes. As the clause reads at present, it looks as if they may be used only as district courts. However, they could usefully be used for other purposes. The Amendments also provide that if they were to transfer to another building this would be fully within the terms of the Statute. I beg to move.
Lord HUGHES: Clause 8(1) places a general duty on the district or islands council to provide suitable and sufficient premises for the district court. In the early stages of the new system the existing court buildings will almost certainly be used by the district courts. In any district area there will probably be several premises used by the existing courts and it will be for the local authority to determine which accommodation should be used. In local government reorganisations some of the existing accommodation will go to the regional councils and some to the islands and district councils. Subsection (2) requires the regional islands or district authority, without prejudice to subsection (1), to make premises used for the purposes of the existing courts available for the district court.
In most areas there will probably be several premises used for the burgh and justice of the peace courts. Some are at present used for court purposes only for short periods. After 16th May 1975 the court work will for the most part be concentrated in each district in one centre and it is therefore unlikely that all existing accommodation will be required. It would not be reasonable to include a limitation restricting future use to the

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same extent as at present since circumstances will have changed. With good will I do not think that difficulties will arise.
We therefore feel that as the Bill stands we will achieve exactly the point the noble Earl has made, that the buildings should be available for the best use to be made of them, provided there is satisfactory provision of buildings for use as district courts. I hope he will not press the Amendment.
The Earl of SELKIRK: If the noble Lord is satisfied that courts can be used for other purposes, I will not press the point. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clauses 8 and 9 agreed to.
Clause 10 [Existing justices and magistrates]:
4.27 p.m.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 11:
Page 8, line 1, leave out subsection (2).
The noble Earl said: We now come to the Part of the Bill which deals with the appointment of magistrates. To some extent subsection (2) of Clause 10 is, I presume, dealing particularly with what I call the transitional stage. I am not certain what the subsection means, but as I read it it seems to me that anyone who happens to be a bailie on 15th May automatically becomes a justice of the peace on 16th May. I do not understand why the procedure under Clause 9 should not be followed. Why should he not be made a justice of the peace in the ordinary course of events with the restrictions that that implies; the use of the Great Seal, residential accommodation and possibly going on to the supplementary list? Why is it set out in an entirely different way in this sense? Would it not be simpler to take this clause right out and let those bailies who are suitable, or who want to continue, be appointed to any commission area, in the ordinary way under Clause 9? This is the correct way to proceed and, in the circumstances, is a better way. There should be no delay in appointing these magistrates; the procedure cannot take long. To have
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magistrates all on the same basis is a very much more suitable method. I beg to move.
Lord HUGHES: I cannot pretend that the Bill would collapse if this subsection were taken out, and if, in fact, we were to do what the noble Earl has suggested it would be quite possible for arrangements to be made for every one of the people who would have automatically become justices by virtue of this provision to be appointed a justice and to carry on. The reason for this provision is that in some places, particularly in the burghs, not all the existing bailies are justices of the peace. I checked, for instance, on my home town and found that exactly half were justices and half were not. I want to make it perfectly clear that I am not talking about Dundee, because this could be construed as a reflection on particular individuals. But in some cases it will be found that some of the best magistrates are not justices at the present time because they are younger men and the tendency under the existing system is that the older people have a better chance than the younger ones of being appointed justices of the peace. That may or may not be a good thing but that is the way it has tended to work.
So there is an advantage in doing this in that one at least starts off on the basis that the experienced people will be immediately available. I have made it clear that the training facilities will be under way before 16th May—and I may mention that when my wife travelled down to London yesterday she informed me that there were two letters in the post, one for her and one for me, asking us whether we were willing to undertake training as magistrates so that we could do our duties properly as from 16th May. I do not know how she is going to answer, but I know what I am, and I do not expect to be very busily engaged as a magistrate after 16th May. However, there is bound to be a certain interval, and this seemed to be an appropriate way of dealing with the situation. In the discussions with them, this is what the local authorites felt strongly should be done.
It is a long time ago since I fought an Election with the Party opposite in Scotland on the basis that the own hall

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knows better than Whitehall—and "Whitehall" is interpreted as covering Dover House and St. Andrew's House also. We are now seeking to say, when we receive this strong advice from the local authorities, that it is the wrong way round; that Dover House and St. Andrew's House do know better than the local authorities. The numbers involved are very small. There are some 5,000 justices in Scotland at the present time, and the number who would come in on this basis is a very small fraction of that total. I hope therefore that the noble Earl will find that, although there are obviously points to be made both ways, it is not worth while taking out this subsection. I have a definite suspicion that the local authorities will feel so strongly on this matter that, if we take out this subsection, another place will be invited to put it back in again, and that is a waste both of their time and of your Lordships' time. I therefore invite the noble Earl not to press this Amendment.
Lord BALERNO: I cannot see why we are making it so complicated. Let us have one uniform system for Scotland. That is the whole purpose of having the district court for the whole of Scotland, instead of the old burgh court and the old justice of the peace court. What is the difficulty of making every magistrate a justice of the peace if he so wishes to become a justice of the peace? There is plenty of time. The noble Lord, Lord Hughes, admits that he has just received a letter inviting him to continue as a justice of the peace on 15th May next—
Lord HUGHES: Not to continue as a justice of the peace but to take training to qualify to sit on the bench. I will continue as a justice of the peace but not necessarily acting as a magistrate.
Lord BALERNO: I think that if the noble Lord reads his letter a little more carefully he will see that he is also given the opportunity of going on to the retired list of the justices of the peace, which allows him to continue signing papers. As that letter has just gone out, it is surely within the wit or the ability of the Scottish Office within another month to send out a parallel letter to every magistrate of every burgh who is not already a justice of the peace asking him whether he wishes to be appointed a justice of the peace and
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pointing out to him the requisition for training. Of course we all understand that there will be difficulties in completing the training by 15th May, but what we want to know is whether they are willing to undergo the training. So I do not see that the difficulties which the noble Lord, Lord Hughes, has been making about accepting my noble friend's Amendment are justified.
Lord HUGHES: All I would say in connection with that is that there is nothing complicated about it; this is, in fact, the simplest matter. If this provision becomes law these people automatically become justices of the peace. To have to write to them individually and say: "Do you wish to become a justice of the peace?" and then, by implication, to agree to appoint each one who says: "Yes, I so want and I am prepared to act" is a much more complicated and expensive way of doing it than the procedure provided by these three and a half lines in the Bill.
The Earl of SELKIRK: The noble Lord, Lord Hughes, is always very persuasive, but he has not, with great respect, given the slightest reason why it should be done this way at all. Here is a person becoming a statutory justice of the peace whether or not he wants to. Nobody asks him whether he does; he just becomes one. There is a perfectly good system laid down in great detail under the previous clause. Does this man go on the commission of the peace? Does he remain a justice all his life? Is he on exactly the same basis as every other justice? I do not feel strongly about this matter. This is just a transitional stage, and while it may help the Government, we always want to help the Government if we possibly can and we are not worried about that; but the noble Lord might look at this point to see whether it is worth having this, frankly, rather ridiculous little procedure.
Lord HUGHES: I must say that I am impressed by those last remarks. I should dislike to think that we were forcing justice of the peace status on somebody who did not want it.
The Earl of SELKIRK: Exactly.
Lord HUGHES: Perhaps we could look at it on the basis of seeing whether we could add some words to the provision

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along the lines suggested. I cannot make a promise—it may be difficult to do—but perhaps we could word this provision in such a way that anybody who did not want the appointment would have the right to say, "No. I do not wish to be a justice after 16th May. When I cease to be a bailie, that is the end of it so far as I am concerned." Could we look at it on the basis of amending the wording so that there can be no question of people being conscripted to the justices' court and all will be volunteers? Would the noble Earl withdraw on that basis?
The Earl of SELKIRK: Yes, I am very happy to accept that. I personally think it would be much better to debate this point under Clause 9. In response to what the noble Lord said, I am quite happy to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Ex officio justices]:
4.39 p.m.
The Earl of SELKIRK moved The Earl of SELKIRK moved Amendment No. 12:
Page 8, line 30, leave out subsections (2) to (8).
The noble Earl said: We now come to a more serious part of this Bill. It is a great pity that the Government did not put out for discussion a White Paper saying what they were going to do in this connection. This was done by the previous Government and the Bill was not carried through. Not only that, but my information is that there has been no serious discussion at all between the Government and the profession in Scotland about the contents of the Bill. Clause 11 was, I think, a last minute thought and it was popped into the Bill for reasons which—I will not say I find hard to guess, but which I will not enlarge on at the present time. The crux of this clause comes in subsection (2) which states:
"Each local authority may nominate up to one third of their members to serve as ex officio justices for their area …".
This is a most extraordinary way of appointing justices. I find that it is quite misconceived, and I wonder how it is that this ever came into the mind of the Government. We have abolished burghs.
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We seem now to be anxious to set up burgh magistrates for burghs which no longer exist. I wonder just why this is being done. As I see it, this is no more than the tail end of feudal institutions which, in point of fact, should have disappeared quite a long time ago. When the burghs were set up, probably in the reign of Alexander or James IV, they had three functions, Royal burghs, burghs of barony and burghs of regality, and their three functions were defence, certain economic privileges and administration. In those days, administration included the judicial courts, just as in its early days Parliament was also a judicial court. We have travelled a long way since then, and this is simply not in line with the 20th century. I do not think that any other country in the world allows its bench to be elected by an assembly. In the United States of America they have elections at large, and that is one way of doing it. I do not approve of it very much but I would much rather have elections at large than I would have an assembly appoint its own magistrates.
It is a peculiarity of Scotland that we have allowed this system to carry on for a good deal longer than probably is absolutely wise, in view of the fact that people like Montesquieu and others have stressed the importance of the separation of powers. One sees it, for instance, in the official name of "Edinburgh", or that of any other burgh. The Lord Provost, the magistrates and councillors of the City and Royal Burgh of Edinburgh have joined together from ancient time the administrative and the judicial functions. Today they should be separated. Indeed, I think it is essential that they should be separated. How do local authorities appoint their magistrates? May I describe to your Lordships how it is done. The noble Lord, Lord Hughes, will not, I think, disagree with what I say. Before the town council meets, the caucus comes together and the chairman says, "We have three bailie vacancies. What shall we do? Shall we keep the lot, or shall we let the other Party have one, or possibly two"? It is a pure Party appointment and something which, to my mind, tarnishes the Bill.
I wonder how these nominations are made in other burghs. I have a fairly definite idea that my experience is similar

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to that of virtually every other burgh. In Scotland we do not believe that something of this kind should be continued in the new Bill. This is not a continuation of the existing system; it is a new system of district court which we are introducing in this country and I think that it is quite wrong that anything of this kind should be carried out. I am not saying this in a spirit of criticism, although there was criticism at Second Reading regarding the bailies' court; I feel that they have carried out a tremendous job over many years. However, it is not work which councillors ordinarily should do. They are elected to administer a city; they are not elected as judges or magistrates. That is not what they are there for. Under the system which is proposed in the Bill, they will be elected and will be responsible to their electors; they will have to be nominated by the council; and they will need the approval of their Party. I think that this detracts greatly from the value of the Bill, a great deal of which is common ground to us and which we like; but this is a sheer anachronism which I think should be taken out of the Bill. I beg to move.
4.45 p.m.
Lord BALERNO: I wish to support my noble friend in his Amendment, but I will not enter into the legal argument. Instead, I will give you one very cogent reason for the Amendment. One of the virtues of the Bill is that justices of the peace should be trained, and naturally that training will take quite some time; it could quite easily take up to ten or twelve lectures. Indeed, the recommendation is that there should be a weekend course for justices of the peace. If he is not already a justice of the peace what district councillor will have the time to spare to take this instruction? As an elected member, one never knows how long one is likely to remain in that position. It is not as if one remains in Office for life.
If we delete these subsections, it will still be perfectly possible for a county council to say to the Secretary of State that so-and-so of its membership wishes to be a justice of the peace and is prepared to be trained. His name will come up for consideration and the odds are that they will be only too glad to have him. But that a district council should
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nominate one-third of its members for the period that it is in Office and should then nominate perhaps a completely different third for its next period seems to me to make a nonsense of the whole idea of training. For those reasons, as well as for the reasons which my noble friend has led, I ask your Lordships to support this Amendment and to delete these thoroughly objectionable proposals.
Lord MOWBRAY and STOURTON: May I support my two noble friends in this Amendment. Politics and justice are not normally associated. If this Amendment is passed by your Lordships, it will remove politics from these courts. As my noble friend Lord Balerno has said, people do not elect their councillors primarily as magistrates. It happens more and more frequently today that councillors are elected for political reasons and, human nature being human nature, too often they tend to elect members of their own Party to these Offices. I hesitate to use the word but I shall. Tammany Hall springs to mind as a possibility of what could come about if this clause were abused.
I am sure that the noble Lord, Lord Hughes, will assure us that most of the councillors who are elected are good, honourable men who would intend nothing of that kind. I do not doubt that to be a true statement. Nevertheless, there is a way open here for that kind of situation to arise. I do not see why the Clause 9 legislation for appointing justices cannot be used as my noble friends have said. Obviously there will be councillors or eminent men in an area who are suitable to act as magistrates. All right; use the Clause 9 procedure. Why should there be this power whereby local politicians can put 100 per cent. of the magistrates on the bench? May I support, therefore, my two noble friends in what they have said.
Baroness MACLEOD of BORVE: May I support my noble friends in this Amendment. I am afraid that I am a Sassenach magistrate. Probably, therefore, I should not speak on this Amendment. However, I expect that the noble Lord is well aware that several years ago ex officio members of the local authority were prevented from being ex officio magistrates. They were able to be magistrates after their terms of mayoralty in

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their local authority, if the Lord Chancellor, in his wisdom, appointed them. But nobody is an ex officio magistrate, and that has been the position for, I think, five years.
May I make the further point that if one has local authority representatives, there are many cases coming before the bench where the local authority member has to retire purely because he knows too much about the case and also about the people involved. I can foresee a situation where you might well be left with very few magistrates to serve on the bench for that reason. I support all my noble friends who are against subsection (2) of Clause 11. I think for the local authorities to have the prerogative of appointing up to one-third of the bench is utterly wrong. It certainly would not work in this country as all the magistrates are appointed by the Lord Chancellor.
Lord HAILSHAM of SAINT MARYLEBONE: May I be forgiven for adding a word to this discussion? I have been a Member of Parliament of one House or the other continuously since 1938, and I think this may be the first occasion during that period of time on which I have ventured to utter a word on Scottish affairs. My qualification for doing so is two-fold: in the first place, I am half-American and I know something of my mother's State where the local bench was in fact directly elected, largely on Party lines. Secondly, during the period in which I was Lord Chancellor for nearly five years, it fell to my lot in England and Wales, minus the county of Lancashire, to appoint all the justices of the peace on the advice of advisory committees.
I wonder whether the Government really are wise in what they are now proposing to do, which is a sort of indirect election by local authorities of people holding judicial office. When you do justice as a magistrate, it is important that you should not be afraid that your own position will be called into question if you make an unpopular decision. That is absolutely vital to being a good magistrate. The weakness of any form of election, whether direct or indirect, is that the magistrate or the judge will lose his job if he makes an unpopular decision. When I lunched with the local judges in Tennessee I was given a card by one of the judges. To my astonishment it was
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a poll card; it was not a visiting card, and it said, "Vote for me". Quite obviously, one can see what would happen if such a person gave an unpopular decision. One has to recollect that in all contested litigation you become unpopular with one Party or the other and an unpopular decision may well lead to a campaign against you and may cause you to lose your job.
I recognise of course that in an indirect election where you are elected by the county council, this may operate in one of two ways—possibly less indirectly than in the case of a direct election, but it can still operate. Supposing you make an unpopular decision—and, as I say, some decisions are less popular than others; some arouse more public excitement than others. To begin with it may affect your position on the local authority when the next election comes. It may be said: "That is the man who did so and so when I was up before him". Indeed, when you are a judge you have to make a decision which will adversely affect somebody's financial interest or the interest of some powerful trade union or powerful minority. It must affect your chances of re-election to the local authority. Or vice versa, you speak up in the local authority against a policy. You may be in a minority or a majority, but you make enemies, and when the time comes to re-nominate the justices of the peace that conduct will be held against you. In other words, it is not possible to be a just judge and to be elected and to be liable to be re-elected on popular grounds, direct or indirect.
Of course I do not want to say a word against the personnel of local authorities. When, as Lord Chancellor, I was appointing justices for England and Wales they were among the most fruitful sources that were drawn upon for nomination by the advisory committees, but they did not depend for their jobs upon election by their local authorities. They depended for their jobs upon nomination by the independent advisory committee and by appointment by the Lord Chancellor, and in practice they would not be dismissed by the Lord Chancellor except for judicial misbehaviour or incapacity. That is the opposite of what is proposed here.
I was disturbed to hear what my noble friend Lord Selkirk said, because he was

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describing the matter from experience in Scotland. I have some experience in England of the working of local authorities in other spheres, although in this sphere happily we are not faced with such a situation. I know of two systems, both of which are bad and I do not know which is the worst. One is for the Party Whips of the majority Party to nominate the whole of, say, the governors of a school, and the other is for the Party Whips of the two Parties to carve them up on Party lines, and this is what goes on in local authorities. This is from my knowledge of England and Wales. The idea that judicial offices should be parcelled out in this way seems to me to be absolutely repugnant to our whole idea of justice. Of course it may be true that the Scots have no original sin. We know that many of them think so. They are all justified by faith, I think, North of the Border, but if they are in any way similar to the English I ask the noble Lord to think again.
4.57 p.m.
Lord HUGHES: It is certainly a new experience for me to find a former Lord Chancellor intervening in a Scottish debate, but it is none the worse for that. The noble and learned Lord will forgive me if I say that I find myself in sufficient difficulty in dealing with the legal aspects without following him into the theological fields into which he was seeking to divert me at the finish. I would also say that it is perhaps not the best qualification for considering the situation in one particular set-up to make comparisons with what occurs in other places. For instance, I thought the noble and learned Lord, Lord Hailsham, was quite wrong when he was describing these duties that we are talking about as "jobs". They are not jobs; they are voluntary duties which people are undertaking and for which they do not receive payment, other than out-of-pocket expenses. They do not get any allowances as councillors; it is the other way round, and I think this is the subject of a later Amendment tabled by the noble Earl.
I also wish to point out to the noble Baroness, Lady Macleod of Borve—and although she said that she is a Sassenach, anyone with that name, whether acquired by marriage or by birth, has no need to
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apologise for intervening in a Scottish debate—that it was not a third of the bench that they are given the right to appoint. It is a third of their number, and this perhaps is the right point at which I should emphasise that in comparison with some 5,000 justices in Scotland there would be some 400 people who will be appointed if this remains part of the Bill. So it is a very small part of the total.
I find myself in an exceedingly surprising position. Most noble Lords on the Benches opposite find themselves members of a Party whose title is "Conservative", and whenever a title is applied to the Party of which I am a member, we are not supposed to be innately Conservative. Yet I find that here am I, seeking to continue a system which has worked completely satisfactorily in Scotland, not for decades, and not just from the institution of the burgh court, because in the Second Reading debate the noble Lord, Lord Balerno, said that the burgh court was only a creation of the nineteenth century. But that was merely a change that took place in that particular Act of Parliament. We have done a little research on the matter and the earliest Act of the Scottish Parliament in which we can find a reference to the bailies is 1535. How much further back they have gone beyond that I do not know, but the fact is that throughout all this period this system has worked in Scotland and one of the justifications for refusing to make changes is that changes should not be made unless it is desirable to have change. This is a doctrine which I find myself having no difficulty to accept in this connection.
I was a member of a local authority for 27 years. For only two of those did I occupy the post of bailie. I was a Lord Provost for six years. One of the privileges of being a Lord Provost is that one manages to dodge magisterial duties, so I did not sit on the bench for those six years, although in the smaller burghs the Provost tends to take his turn on the bench along with the bailies. At no time during my period of membership of a local authority, and at no time since I ceased to be a member of a local authority—and that now goes back 14 years—have I ever heard any demand from any quarter of Scotland, inside or outside the local authority, for the abolition of the system

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of lay justices as practised in the burghs. In fact, the request for this is not a last minute thing. It was referred to by the Secretary of State as far back as 15th July, and we came into office only in March.
The system is requested by the local authority associations, and it was emphasised in these requests that the view put forward was irrespective of politics. All Parties engaged in local authority activities in Scotland wished a system of this kind to continue. But I would remind your Lordships that still in local government there are considerable parts of the country where the political system does not operate in local government, and whether they were the bigger areas where it does operate, where the parties work, or in the rural areas where it does not, the same position prevailed—they wished to have a continuation of, or something resembling, the present system.
During the passage of the Local Government Bill last year, one of the points which the then Secretary of State, Mr. Gordon Campbell, was anxious to perpetuate was that the chief magistrate in the four cities should continue to use the title of "lord provost" and that is in the Bill. We amended the Bill during its passage through this House, to ensure that the title of "provost" would also be available for use in district councils if it was the wish of the district council that the chairman should be known by the term "provost". They have all taken the decision; some have decided that the term "chairman" should continue, some decided for "convenor", some have decided on the term "provost". The feeling has been that in those districts largely based on the former burghs, they have chosen the title "provost", so it shows there is anxiety to hang on to things which have certain merit.
One thing which has been under consideration is whether there was any way of preserving the title of "bailie" which, notwithstanding what the noble Lord, Lord Balerno, said on Second Reading, is still held generally in high repute. I am told, for instance, against what the noble Lord, Lord Balerno, said, that there is a considerable number of cases heard in these courts, and only the few such as he quoted ever got any mention in the Press. I have spoken of my own experience. In the two years that I was on the bench, in
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the succeeding elections I never had raised as a possible reason for not reelecting me to the council any decision which I took on the bench.
Lord HAILSHAM of SAINT MARYLEBONE: There could be no reason for not re-electing the noble Lord.
Lord HUGHES: I should like to think that the noble and learned Lord, Lord Hailsham of Saint Marylebone, is right, but obviously he does not know Dundee. I should think that at least one-third of the population in any given time would be able to give reasons why I should not be re-elected, or as to why I should even exist It was never a source of difficulty. After all, we are not comparing like with like. The powers of the district court, as the powers of the former bailie's court, are limited, and the opportunity for making oneself either popular or unpopular by sitting on either bench is very limited indeed. I am quite certain no one from the home State of the mother of the noble and learned Lord is likely to emigrate to Scotland for any pickings he will get from being nominated as a member of the justices court of a district council.
The noble Lord, Lord Balerno, raised a point which has to be answered, because it seems to me to be a reasonable one. The noble Lord said that the district council will have a great deal of work to do. He asked whether it will be likely or possible for people to take the extensive training required, and then put in the time required on the bench. It has been possible for people to undertake the duty of a magistrate, which does not cover any training at this stage, on the basis that they were all-purpose authorities in the cities. The district councils will be a mere shadow of the burghs compared with the burghs, much less than the large burghs and cities. They are not education authorities, social work authorities or strategic planning authorities. The only major function they have will be as members of the Housing Committee. I should suspect that one of the reasons why the local authorities are so anxious for this to be done is because they want to ensure that those people who take election to a district council are continuing to have a worthwhile job to do. This is something which they would regard as being worth while.

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I do not want to go on much longer, because if there is anything I hate (as most Scots do) it is waste. I know perfectly well that the longer I stand here, the more I am wasting my breath and your Lordships' time, because that side of the House has already decided to divide on this Amendment. All that remains is for me to say that this is a fundamental part of the Bill. We have commitments to the people of Scotland to legislate along these lines.
I advise your Lordships: do not follow the example which I have just attempted to do, in that I am wasting your time and my own breath. Do not waste further time by taking this out of the Bill, because if you do, it is the intention of Her Majesty's Government to reinstate it in another place. I have no doubt whatsoever, notwithstanding the fact that I have been told you have the major support of Miss Winifred Ewing, that the Government will be able to put into this Bill what the people of Scotland have shown by their views they want. But it is the privilege of your Lordships' House to give the other place the chance to think they had been totally wrong in this matter. I am merely telling your Lordships what our intentions will be: that we regard this as a fundamental part of the Bill, and would consider ourselves to be failing in our duty if we did not attempt to reinstate it in another place. Having said that, I am quite prepared to encourage my small part of the House to follow your large part of the House, but not into the same Division Lobby.
Lord BALERNO: I have listened to the apologia for burgh courts, but I cannot understand why they have not been continued if they are so wonderful as the noble Lord, Lord Hughes, has made them out to be. I cannot understand why every burgh in Scotland has not been allowed to continue this legal system; that is to say, if the system is as wonderful as the noble Lord, Lord Hughes, makes it out to be. As he said, he believes the people of Scotland want to continue the burgh courts. This is not a bad thing. But I do not think the people of Scotland care two hoots about this. The people who do are a few local authority representatives, people who like to be called a bailie. As the noble Lord, Lord Mackie of Benshie, said in the
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Second Reading debate, "once a bailie, always a bailie". There is no sound argument adduced along those lines by the noble Lord. The proposal of one-third of the elected representatives of an authority is neither fish, fowl, nor good red herring. I remind your Lordships of the quotation I made of a lawyer in Scotland who I am sure expressed the feelings of the great majority of the lawyers there, that the burgh courts are a blight on our society.
The Earl of SELKIRK: The noble Lord, Lord Hughes, has done his best. It is an absolutely indefensible clause by any conceivable standard. He has said he is continuing a system. If he reads Lord Cooper's Introduction to the Legal History of Scotland, he will find it was decaying at the end of the seventeenth century. This system really should have gone out long ago. It is a tribute to the standard set by our bailies that it has worked as well as it has; I give them full credit for having worked against a very bad system, and having done it tolerably well. The noble Lord said he is not aware of any demand, and I will tell him why. It is because he has not listened; he has refused to see anybody; not a member of the profession went to talk to him. In any case, the Bill was published only about three weeks ago and nobody saw that clause until then. So he simply cannot say that there is no demand.
Lord HUGHES: Then I will correct my statement. I will say this; nobody outside the legal profession has asked for this.
The Earl of SELKIRK: Probably nobody outside the legal profession read the Bill. One point is perfectly clear. This is not fundamental to this Bill. This is simply a little pimple which was pushed in at the last moment, and the main feature of this Bill rests as it is. If any councillor wants to become a justice, let him go through Clause 9; that is the proper way to do it. I think we must divide on the point.
Lord ERROLL of HALE: Before we divide, I should like to intervene briefly on a very important point put by the noble Lord, Lord Hughes. He said there was really no point in the Committee dividing because the matter would be put right in another place. I think that is

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a very dangerous doctrine to be accepted by your Lordships. We should divide when we think it is appropriate to do so. What may happen in another place is for that other place to decide, particularly as the Bill has not yet been to the other place. To suggest that we should not waste time dividing because some juggernaut in some other part of the building is going to over-rule us is not, I suggest to the genial Lord Hughes, the way to treat your Lordships.
Lord HUGHES: I did not say it would not be right. I said it would be a waste of time from the point of view of altering the Bill. We regard this as a fundamental part of the Bill. No one knows better how to operate a juggernaut than the noble Lord who has just criticised
Resolved in the affirmative, and Amendment agreed to accordingly.
it. I remember, as a member of a local authority, being on a deputation when he was a Minister at the Board of Trade and we got "juggernaut" then under his very efficient operation. He need not lecture me on how to operate a juggernaut. I know what another place will want to do on this; I know what the Government want to do. I am advising your Lordships that you can certainly do what you will, and it is quite obvious that you are going to do it; but I am saying that it will be a waste of time in the end because it will not stick.
5.14 p.m.
On Question, Whether the said Amendment (No. 12) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 41.

CONTENTS

Aberdare, L.

Essex, E.

Moyne, L.

Airedale, L.

Ferrers, E.

Northchurch, B.

Aldenham, L.

Glenkinglas, L.

Nugent of Guildford, L.

Alexander of Tunis, E.

Goschen, V.

Oakshott, L.

Amherst, E.

Grenfell, L.

Ogmore, L.

Amherst of Hackney, L.

Grimston of Westbury, L.

Onslow, E.

Arbuthnott, V.

Hailsham of Saint Marylebone, L.

Rankeillour, L.

Auckland, L.

Reay, L.

Balerno, L.

Hankey, L.

Redesdale, L.

Belstead, L.

Hanworth, V.

Reigate, L.

Berkeley, B.

Henley, L.

St. Aldwyn, E.

Bessborough, E.

Hereford, V.

St. Helens, L.

Birdwood, L.

Hornsby-Smith, B.

Saint Oswald, L.

Boyd of Merton, V.

Hylton-Foster, B.

Sandys, L.

Bradford, E.

Killearn, L.

Selkirk, E. [Teller.]

Braye, L.

Lauderdale, E.

Sharpies, B.

Colwyn, L.

Lloyd of Kilgerran, L.

Somers, L.

Colyton, L.

Long, V.

Strange, L.

Cottesloe, L.

Lothian, M.

Strathcona and Mount Royal, L.

Courtown, E.

Lyell, L.

Cowley, E.

Macleod of Borve, B.

Strathspey, L.

Denham, L.

Mancroft, L.

Swansea, L.

Derwent, L.

Merrivale, L.

Teviot, L.

Drumalbyn, L.

Meston, L.

Thomas, L.

Ellenborough, L.

Milverton, L.

Tweedsmuir, L.

Elliot of Harwood, B.

Monck, V.

Vernon, L.

Elton, L.

Mowbray and Stourton, L. [Teller.]

Waldegrave, E.

Emmet of Amberley, B.

Young, B.

Erroll of Hale, L.

NOT-CONTENTS

Amory, V.

Hale, L.

Phillips, B.

Archibald, L.

Harris of Greenwich, L.

Popplewell, L.

Beswick, L.

Henderson, L.

Royle, L.

Birk, B.

Hughes, L.

St. Davids, V.

Brockway, L.

Jacques, L. [Teller.]

Shepherd, L. (L. Privy Seal)

Burton of Coventry, B.

Janner, L.

Shinwell, L.

Castle, L.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L. [Teller.]

Champion, L.

Lovell-Davis, L.

Summerskill, B.

Crowther-Hunt, L.

McLeavy, L.

Wells-Pestell, L.

Donaldson of Kingsbridge, L.

MacLeod of Fuinary, L.

White, B.

Elwyn-Jones, L. (L. Chancellor.)

Mais, L.

Williamson, L.

Fisher of Camden, L.

Melchett, L.

Winterbottom, L.

George-Brown, L.

Morris of Grasmere, L.

Wootton of Abinger, B.

Gordon-Walker, L.

Pannell, L.

Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Disqualification of Solicitor who is a justice]:
5.22 p.m.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 13:
Page 9, line 40, afer ("area") insert ("on which such solicitor is sitting").
The noble Earl said: Clause 13 deals with the position of justices of the peace who happen to be solicitors. It disqualifies them from practising in the area in which they are solicitors, regardless of whether they are on the bench, and their partners must not practice before the courts of which they are a justice. I think that this goes too far, and I should like the noble Lord to look at this.
What he is saying is that neither the partner of a justice, nor one of his staff, may directly or indirectly take any part in a case which will come before a court in a commission area in which one of the partners is a justice. I think that this is going too far. I suggest that they should not come before a court in cases in which the justice is sitting on the bench. That would obviously be wrong. But to say that one of the members of the staff—not a partner—cannot take part directly or indirectly seems to me to be going much too far. While I certainly would not suggest anything that would make it easy for justices to plead before their colleagues, I think that this is perhaps suggesting that there is a conspiracy with justices in an area and that they will all try to help each other, and it is quite unnecessary to make a suggestion of this sort. I do not know what "directly or indirectly" means. Does it mean that you may not ask the advice of any member of the staff on a case which might come before the justices in an area? If it means that, I think that it is unduly harsh.
The second point is that if you put in this rule it will become increasingly difficult to get solicitors who may be suitable to become J.P.s. In some areas the choice of suitable people may not be very great. It is for this reason that I suggest that the disqualification extends to all cases where a partner of a firm, or one member of a firm, is sitting on the bench. When he is not sitting, it does not seem to me that
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it is essential to impose a disqualification. I beg to move.
Lord HUGHES: This is not a proposal which has been brought forward for the first time in this Bill. This is merely a continuation of the law as it has existed for 68 years. These are the provisions which are in the existing law in Section 3 of the Justices of tie Peace Act 1906, in Section 4 of the Justices (Scotland) Act 1856—I have not gone back in my reference to the years, because that applies only to the ex-officio justices, and that will no longer apply as a result of the Bill—and in Section 9 of the Justices of the Peace Act 1949, which makes an exception for justices on the supplemental list.
Its effect is to allow solicitors to be appointed as justices, but to preclude them from practising directly or indirectly, personally or through their partners, before any court on which their fellow justices in the same area sit. This is a sweeping disqualification, but it removes any possibility of the appearance of impropriety in the actings of the justices as a body, or of the individual justice as a solicitor. It has been the law both of Scotland and of England for a very long time, and there has been no complaint about its operation. In fact, solicitors have regarded this as a basis of protection for themselves, and it would definitely be a retrogade step to seek to change this after so long a period of perfectly satisfacory operation in both countries.
The Earl of SELKIRK: I wonder whether the noble Lord can answer two questions? Does this cover stipendiary magistrates, and do the previous Acts cover staff as well as partners?
Lord HUGHES: I am sorry, but I cannot give an answer. My first thought is about whether a stipendiary magistrate would be operating as part of a legal practice, having partners and so on. I should have thought that he would be a full-time justice, and therefore it would not apply to him.
The Earl of SELKIRK: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 13 agreed to.
Clause 14 [Courses for justices]:
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 16.
Page 10, line 5, leave out "may" and insert "shall".
The noble Earl said: I hope that this Amendment will encourage the noble Lord to see that the schemes for training for magistrates really take place. I beg to move.
Lord HUGHES: I mentioned on a previous discussion that it is 13 years since I came here, and I think I would be fairly comfortably off if I could collect a £1 for every time that this argument had come forward. Every Government, without exception, resists the use of the word "shall" when the Bill uses the word "may". Once again I must follow the precedent and ask that it should remain. However, because of the way in which the noble Earl put it forward, I think I can satisfy him that it is not necessary to make this amendment for the purpose he has in mind. In the case of training schemes and courses for justices under Clause 14, there is no question but that these will be introduced, and that justices will be required to accept training appropriate to their experience.
The reference to training in Clause 15(2)(d) would not have been inserted in the Bill if the Government had not so intended. This is one of the justifications for the use of the word "may". If the Government did not intend to use it they would not insert it at all. We are inserting the reference with "may" with the intention that this is what the Government are likely to do. Indeed, the outline of the training scheme has already been discussed with the Central Advisory Committee and justices of the peace, to which the noble Lord, Lord Balerno, was good enough to refer in favourable terms during Second Reading. I can assure the noble Earl and your Lordships that these training schemes are to go ahead. I hope that with that assurance the noble Earl will be at least as content as were all his predecessors on the argument that "may" should remain and that "shall" should not go in.
Lord AIREDALE: I believe that such invariable practices of Governments, to which the noble Lord referred, are not
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without exception, and that the noble Lord sitting beside him may remember that in the Bill which set up the Office of the Director General of Fair Trading I succeeded with an Amendment exactly like this one which said leave out "may" and insert "shall".
Lord HUGHES: That must have been on the one occasion when it was difficult for the noble Lord to give a satisfactory assurance about what "may" would do.
The Earl of SELKIRK: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON had given Notice of his intention to move Amendment No. 17:
Page 10, line 9, at end insert—
("(2) Justices of the peace, unless otherwise qualified, will be required to attend the courses referred to in subsection (I) above before acting as a member of the district court.")
The noble Lord said: This Amendment is not the same as my noble friend's last Amendment, and while speaking to it I must thank the Minister for having sent a full letter concerning the Government's intentions on this matter. I know that the Government intend that justices should do these courses, but I ask the Minister and the House whether it would do any harm to have my proposed improvement to ensure that untrained magistrates did not sit in the courts in a judicial capacity. If this proposal were accepted there is one point which I would ask to be changed in the Amendment. I would take out the word "qualified" and insert "suitably experienced" instead because we thought "qualified" was too vague.
The DEPUTY CHAIRMAN of COMMITTEES: The noble Lord's Manuscript Amendment to the Amendment will insert the words "suitably experienced" for "qualified".
Lord MOWBRAY and STOURTON: Yes, that is so. I beg to move.
Amendment moved—
Page 10, line 9, at end insert—
"(2) Justices of the peace, unless otherwise suitably experienced, will be required to attend the courses referred to in subsection (1) above before acting as a member of the district court."—(Lord Mowbray and Stourton.)
Lord HUGHES: The object of the Amendment is one with which I cannot possibly say I did not sympathise because I do. But we think it is rather a clumsy way of trying to ensure that there is appropriate training. It is intended that no justice should adjudicate until he has received instruction suitable to his experience. The situation is, however, very complex and there is comparatively little time in which to complete preparations for the justices courts to open for business on 16th May 1975. At that date there will be available for court service burgh magistrates with varied experience, serving justices, some with court experience and others with none, and newly appointed justices, including those nominated by district councils. That is my prediction as to what will take place. The objectives will be first to ensure a smooth transition from the existing courts to the new courts and, secondly, to give all new justices who sit in new courts at least the minimum instruction according to their needs.
It is proposed to issue a scheme of basic instruction together with a memorandum of guidance on how to use the scheme of instruction in the varied circumstances of each area. This will be considered first by the appropriate officers of district councils and then by the justices committee as soon as they are appointed. There are some matters—in particular legal aid—on which all justices, even the most experienced, will require instruction before they sit in the new court. But the scheme of instruction is not simply a matter of lectures; it will include experience of attending court, of discussions with other justices and visits to institutions.
It must be left to the justices committee in each area to determine what their colleagues need and in what order the various needs can be usefully met. For instance, a total prohibition such as the Amendment proposes on sitting in court until courses have been attended would make it impossible to include sitting on the bench as an observer as part of the syllabus. This is generally agreed to be a most valuable experience which illuminates what is said in lectures given both before and after it. It is not intended simply to throw the scheme of instruction out to the Justices Committee and leave them to their own devices. We
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intend to keep in touch with the local arrangements, to help the Justices Committee to make contact with universities and other educational establishments which might provide lecturers and other facilities, and to ensure that ideas developing successfully in one area are taken up in others.
As regards sanctions against individuals who may be unwilling to comply with these arrangements, there may be three stages, where necessary, in preventing justices of the peace, who have not completed adequate training, from sitting on the bench. First, the justices committee, who have to approve the duty rota of justices under Clause 16(1)(b) will not put any name on the rota until they are satisfied that a justice has received training appropriate to his experience. No doubt this will work smoothly and amicably in most cases, but if any justices should persist in attending court when not qualified then the Secretary of State may transfer their names to the supplemental list under Clause 15(2)(d) and so disqualify for judicial functions any justice who neglects training. The Secretary of State would normally take this action on the advice of the Justices Committee. Thirdly, in an extreme case, the Secretary of State's general power of removal under Clause 9(2) might be invoked. This will apply to ex-magistrates who become justices under Clause 10 (2) and ex officio justices under Clause 11, as well as appointed justices.
To sum up, it is intended to give the scheme of training teeth, but especially in the short period before 16th May it will be essential to work flexibly, with the goodwill and common sense of the local justices, and statutory compulsion to accept training would increase the difficulties of dealing suitably with the great variety of local and individual circumstances. I hope that what I have said, and what I wrote to the noble Lord, Lord Mowbray and Stourton, is sufficient to assure him that he and I are thinking on exactly the same lines, and that it is more likely to work satisfactorily without the Amendment than it would do if the Amendment were incorporated in the Bill.
Lord MOWBRAY and STOURTON: I appreciate what the Minister has said, and I fully appreciate that time is not completely on our side in this matter.

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Bearing in mind the Government's intentions and the noble Lord's words, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 agreed to.
Clause 16 [Justices' Committees]:
5.38 p.m.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 18:
Page 12, line 3, at end insert—
("( ) The sheriff principal of the sheriffdom in which the commission area is situated shall by virtue of his office be chairman of the justices' committee.")
The noble Earl said: I have tried to make one point all the way through the discussion; namely, to bring together the two branches of the criminal court, the sheriff court and the district court. This is a very positive attempt to do just that. I would say it was a real step towards what Lord Grant and his Committee speak of—flexible machinery for deciding which summary court should take which cases. I propose that the sheriff principal, who quite recently we made full-time—therefore he is full-time with the sheriff—should have supervision of all criminal jurisdiction in his sheriffdom. He could do this best by being a member of the justices' committee and presiding at their gatherings. He could do a great deal there; his experience would be of very real value to them. If I may give precise examples of the subjects which are here referred to, he could advise the local authority on the administration of the district court, on adequate training arrangements and on the administration of justice in the district court. In all those matters he could be of great value to them, and add to the knowledge and experience of the district court. But it will, I believe, bring together and serve to integrate two sets of courts which are fairly wide apart and which should supplement each other—and it is in the long-term interests that they should do so.
This is really quite a small step, but I think it is an important one. In this Bill we are providing for the take-over of the prosecution of all cases by the Lord Advocate, and we strongly support that. I think the step we propose is a second one which can be taken; it would bring a little closer the benches in both
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the sheriff court and the district court. I hope the noble Lord will be able to do this, because I think it is an important step which could have a long-term effect. It does not really involve anybody in any work. I am not suggesting that the sheriff should necessarily be there, but that he has access and can preside when it is convenient for him to do so. I beg to move.
Lord HUGHES: May I say right away that I hope very much that the senior members of the judiciary—the sheriffs, the sheriffs principal and the High Court judges—will take an active interest in the work of the justices and make available to them the benefit of the wisdom and experience which they have accumulated while sitting on the bench, but the proper place for this will not be in a justices' committee. The justices' committee will in many ways be a business committee—assisting and advising the local authority concerned on any matter relating to the administration of the district court, approving the duty rota of justices and making arrangements for training. In the busier districts, the justices' committee are likely to have a good deal of work to do and be required to sit relatively frequently.
While the sheriff principal, because of his experience in the administration of the sheriff courts, might be expected to be a source of advice and guidance on the effective running of courts, he would not have sufficient personal knowledge of the district courts to make him the most suitable chairman. Your Lordships must remember that he is not to be, as at present, an ex officio justice of the peace; so what we would in fact be doing is to bring about the situation that when the sheriff principal chose to come along he would, while not being a member of the committee, automatically become its chairman. I do not think the justices' committee are likely in all cases to take kindly to having a chairman imposed on them from outside.
Under the new arrangements the sheriff principal will be kept fully occupied in the sheriff courts within his sheriffdom. Within each sheriffdom there will be, on average, about nine or ten justices' committees, and it would be quite impossible, even if it were desirable, for him to become actively involved in the business of that number of committees. I do not

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know whether the sheriffs principal have been consulted about this Amendment. I suspect that they have not, because I do not think that they would regard this as the most effective way in which they could help the work of the justices' committee. Therefore, I am sorry I cannot encourage your Lordships to accept this Amendment.
Lord BALERNO: I think this Amendment is vital. In Scotland we suffer, and have suffered, from the fact that there has been no legal supervision of these lowly courts, the burgh court and the justices of the peace court. That is why the injustices in the burgh courts which I related in my Second Reading speech—and it is no exaggeration to use the word "injustices"—have continued; and the bailie or the judge in the burgh court has continued with his almost, one might say, illegal practices, whereby it was known that if so-and-so was sitting on the bench you had better plead guilty because you would then be just fined and be away, and that would be that, whereas if you pleaded not guilty—
Lord HUGHES: I must ask the noble Lord to allow me to intervene. This repeated slander of bailies—because it is no less than that—I really cannot allow to go unchallenged. To suggest that this is common practice in burgh courts, even in Edinburgh—because that was the particular place to which the noble Lord was referring—I think cannot possibly be supported by any evidence, and it certainly is not the sort of thing that I have ever heard suggested outside the remarks of the noble Lord, Lord Balerno.
Lord BALERNO: The evidence to which I refer is the evidence of a solicitor practising in the court, and I have no reason to doubt that he would be supported by other solicitors practising in the burgh court of Edinburgh. As I said before, if your Lordships do not believe the individual scandals which I have mentioned, I would draw your Lordships' attention to the very fact that so few people appearing in the burgh court at Edinburgh plead other than guilty. That is what I feel is so important. Now there must be some form of legal oversight over these lowly courts, over the district court. In England there is a pretty close oversight, I understand, of the justices of
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the peace courts by the Lord Chancellor himself; and this is a plea, really, for some similar oversight in Scotland. While it is the fact that the sheriffs principal are now full-time officers, I disagree with the noble Lord, Lord Hughes, very much in saying that they will not have the time to pay attention. They will hear if there are scandals in the lower court, and they will be able to take the appropriate action. I do not say that the occasions when there are scandals in the lower court are more common than when there are not scandals, but they do exist, and I think that some measure of oversight would give the people of Scotland more confidence in these new district courts; that is, if they knew that somebody was keeping a kindly legal eye upon them. Therefore I support this Amendment.
Lord HUGHES: In this connection, on the principle that people are likely to be classified along with the worst of their kind, may I suggest that if there was a scandal about a justice or about a number of justices in particular areas the people who would have the most direct need to have the matter dealt with would be the other justices, who are liable to be accused of being one of the same kind. I said that I would be surprised if this was a matter which was acceptable to the sheriffs principal themselves. I would suggest that the Amendment be withdrawn at this stage and the opportunity taken to consult sheriffs principal as to how they would react to such a duty being imposed upon them.
Baroness PHILLIPS: As an Englishwoman, I hesitate to intervene in this debate because, quite frankly, the more I listen to debates on Scottish law the less I understand about it. I should like to say only this to the noble Lord, Lord Balerno, as a member of what he describes as a humble court—I think he said the lowest court in England—that is, as a magistrate. We certainly elect our own chairman and our own deputy chairmen, and would resent very strongly any interference in this privilege, which is a very old one. I am a little confused when he says that we are under the jurisdiction of the Lord Chancellor. This is certainly so, but I cannot recall an occasion when the Lord Chancellor has intervened in the way in which I imagine the sheriff would intervene under this Amendment.
The Earl of SELKIRK: I must say straight away that of course I have not consulted sheriffs principal because there are only two. It has been impossible to consult them, and I have not done so. What the noble Lord has not faced up to is the need to integrate the criminal courts. This Amendment gives the sheriff a status with the district courts, and I think he should have that status. The noble Lord says that the sheriff principal would not have anything particular to offer. I should have thought he had an enormous amount to offer about, for example, adequate training arrangements. This is the very subject on which he could give a great deal of advice. Then there is the administration of justice in the district court. Is that not precisely a matter on which the sheriff principal would be able to offer advice? I should have thought this was a field in which he could play a part. But the noble Lord has paid no attention at all to the need for a more flexible system between two sets of courts, to which the Grant Report draws attention—and I refer to that Report again because this will be the last serious examination of this problem. The noble Lord really has not made any contribution at all to the solution of this problem. I must ask him to say that he will look at this carefully or, alternatively, I must ask the Committee to insist on this Amendment, because I think it is right in the long-term interests of the administration of justice in Scotland.
Lord HUGHES: I will certainly undertake to look at the matter, and I am prepared to see that there are consultations with sheriffs principal as to what their views would be on this matter. I quite agree with the noble Earl that the sheriff principal is obviously a person who could give advice. In fact, that is what I have just said. But it is not necessary that he should become chairman of the justices' committee in order to give them advice on the various matters as to which his advice would be both valuable and welcome. We believe it is likely to be better received if it is advice coming to them from outside, rather than appearing to be something imposed on them, and that its value would then most likely be greatest. But I would certainly be prepared to examine
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whether there is any merit in doing this. Quite frankly, I cannot see the merit at the present time, but at least we could ask the two sheriffs principal who are full-time at the moment just exactly what they think of the proposal, and any way in which they would regard themselves as being better able to serve the ends of justice, whether of integration or otherwise, by being chairman of a justices' committee, rather than by the method which the Bill implies, which is giving such advice as they feel desirable from outside.
The Earl of SELKIRK: With great respect, the Bill gives no such guidance whatsoever. There is no indication whatever in the Bill of advice being given from outside. If I may take the noble Lord's statement as it stands: very well, do not make them chairmen, make them ex officio members. Would the noble Lord think about that? Because I think the two systems must be brought together. But in view of what the noble Lord has said I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Allowances]:
5.50 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 20:
Page 12, line 20, at end insert ("or, in the case of a justice who is self-employed, as an alternative to the financial loss allowance, a fixed attendance allowance to be decided by the Secretary of State in addition to travelling allowance and subsistence to which he may be entitled.").
The noble Lord said: This is a small Amendment which I think meets a need in Clause 17. It is perfectly easy for people who are paid by the day or by the hour to come out at the end of the day and say what their loss of earnings is for any given time during which they have been doing their duty as a justice. But in Scotland we have many people, especially in rural areas, who are self-employed. The farming community springs to mind immediately. Therefore, this Amendment asks the Secretary of State to consider what he thinks is a suitable rate which such people would then be able to claim without their having to do some very complicated and, at best,

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wild guesswork as to how valuable was their time per hour. I beg to move.
Lord HUGHES: The effect of this Amendment is to extend the allowances payable to a self-employed justice to include, as an alternative to the financial loss allowance, a fixed attendance allowance to be decided by the Secretary of State. I cannot claim to be an expert on the complex subject of allowances. The allowances system is now operating for local authorities this side of the Border and will come into operation in due course in Scotland. I do not think I am exaggerating when I say that it has not been received with universal approval; that in fact it is doubtful whether it is any more popular than was the former system.
I understand that Clause 17 re-enacts essentially the existing provisions governing the payment of allowances to justices in Scotland; but the principles underlying these provisions apply much more widely than simply to Scottish justices. Successive Governments have taken the view that justices should be treated for allowance purposes in the same way as many others giving service in which there is an element of public duty. The tradition has been, and is, that where there is an element of public service a limit has been placed on the rate of compensation paid for loss of earnings. This applies to jury service, to witnesses in court cases and to non-elected members of local authorities.
I appreciate that the objective of the present Amendment is to ensure the introduction of attendance allowances for a restricted group of justices; namely, those who are self-employed, as an alternative to the financial loss allowance where in many cases it is almost impossible to establish whether or not there is a loss. I therefore accept that the financial loss allowance provision may not operate very effectively in all cases for self-employed persons. With respect, it is far from clear that the alternative scheme proposed is likely to be any more equitable in practice. It might possibly serve to remove inequalities in some types of case at the expense of creating injustices for others. No doubt a good number of employed persons could claim with justification that an attendance allowance would be better for them than the financial loss allowance.
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I hope, therefore, that I have said enough to show that the principles thrown up by this Amendment go far beyond the scope of the present Bill. We must accept, albeit with reluctance, that the Bill must concentrate on the essentials if Scotland is to have a system of lower courts in operation on 16th May 1975. I must therefore ask the noble Lord to withdraw his Amendment. I am sure that this matter will be looked at in a general way, because there is no doubt that we do not have a satisfactory solution to these problems. But it is not something which ought to be seen in this rather narrow field of justices, for there are so many other areas in which it could be argued that the injustice of the system is just as great. I hope that when the opportunity arises to look again at the position in general, the position of the justices in particular will not be overlooked.
The Earl of SELKIRK: The noble Lord's brief is very narrow and harsh. He talked about inequity and essentials. May I ask this question. When the noble Lord arranges to start paying local authority councillors, which I understand is likely to come shortly—and I gather that this will be next year—will he be able to pay justices who are self-employed on the same basis or will he require statutory authority to do so? If he requires statutory authority, this is where it should be.
Lord HUGHES: No, this is not where it should be. The position will be that all councillors, as is the position here, will be entitled to such allowances (up to a maximum laid down by the Secretary of State) as may be determined by the local authority themselves. They cannot exceed the maximum but they can pay less if they are so inclined. This will be payable to any member of the authority, whether employed, self-employed or whatever his status; for they are all on the same basis. So far as the justices are concerned, the position is that everybody is on the same basis. The allowances do not apply to them; what applies is the financial loss system, whether the person is employed or self-employed.
If we were to import this principle of giving allowances for the self-employed, obviously there will be inequality between

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the man who loses wages and could get only financial loss allowance up to a given maximum, and the self-employed person who gets an allowance. Equity would require the system of allowances to be applied to everybody, even justices. If you are going to do this, why deny it to members of juries, why deny it to witnesses coming into court, why deny it to all other than the elected councillors who are subject to the system of financial loss allowances? It is because this is a narrow part of a wide field that it is wrong that we should attempt to do this in this Bill. If it is going to be done and is regarded as an injustice that there should not be allowances, then it must be done in the context of the whole scheme and we cannot alter the law of the land in relation to this wide field by making a special decision in relation to a comparatively small number of people.
Lord MOWBRAY and STOURTON: I never like the argument that a small number of people do not make good law: they do. However small the number of people concerned, that has nothing to do with the principle. However, I take the noble Lord's point that the Government are aware that there are anomalies here and that they are not sitting back content to do nothing about it. I understood the noble Lord to say that the Government were actively considering ways of how to rectify these anomalies, and, provided that we have the assurance from the Government that they recognise this, I am prepared at this stage not to press the Amendment. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
6.3 p.m.
Clause 18 [Appointment and duties of clerk of peace]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 21:
Page 13, line 26, leave out ("an") and insert ("a duly qualified").
The noble Lord said: This amendment is similar to a previous Amendment. It is just that the words "an officer" seem a little vague. I am sure that the noble Lord will tell me that he has no intention of advising the courts, but why not put
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in "duly qualified"? It would not hurt the Bill: it would only strengthen it. I beg to move.
Lord HUGHES: This Amendment, as the noble Lord, Lord Mowbray and Stourton, has said, is similar to that already discussed on Clause 7. What is proposed here is that a local authority, in appointing an officer to act as clerk of the peace, should be required by Statute to appoint a "duly qualified" officer. As I have already explained, the general approach on the question of qualifications for local authority officials is to avoid specifying qualifications in Statute and to leave it to responsible local authorities to appoint officials with the skills and experience required for the post. I have indicated that I should be prepared to see a departure from this policy in the case of the clerk of the district court, accepting that there a suitable legal experience is what is needed and that we should find a way of putting that into the Bill. However, I think that that post can be distinguished from that of the clerk of the peace and, for that matter, of the clerk of the licensing court provided for in Clause 22. They do not fall into this category, not being legally qualified persons.
In these cases where the duties to be performed are essentially of an administrative nature, there does not appear to be any need to specify qualifications. In any event, what is a "duly qualified" officer? When it comes down to law, this is really meaningless. If they were so foolish, the local authority could go and pick up any Tom, Dick or Harry out of the street and say, "We are appointing this man because he is duly qualified". That would be the end of it. So we must accept that the local authority will want this to work and will in fact appoint the sort of person whom they think is duly qualified. We do not think in this case, as opposed to the one in which I have already conceded, that there is a need to specify any particular qualification. I hope therefore that the noble Lord will be content to rest on the good sense of the new authorities.
Lord MOWBRAY and STOURTON: I am sorry that the Minister did not offer to come up with some suggestion of words that we should have been happy to assist in putting through on Report but, in view

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of what he says, I will not press this and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clauses 19 and 20 agreed to.
6.7 p.m.
Clause 21 [Amendment of Legal Aid (Scotland) Act 1967 and Legal Advice and Assistance Act 1972]:
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 22:
Page 15, line 39, leave out ("a district court") and insert ("the case of a district court by a local legal aid committee").
The noble Earl said: This is a question of how legal aid should be granted in district courts. We are all very glad that legal aid is being granted. The Bill suggests that it should be granted by the bench—that is, by the magistrate sitting on the bench. I am suggesting in the Amendment that legal aid should be granted by the local Legal Aid Committee. I should like in a few words to say why. It is true that a slight time advantage may be gained by having it granted by the justice sitting on the bench, but this involves a preliminary view of the case and means that the justice who will actually judge the case will have a preliminary view and may take up a prejudiced position before the case comes to trial. Secondly, it means that different standards are being set all over the country.
I am quite aware that the noble Lord will say that at the present time the sheriff does grant legal aid in Scotland, but the truth is that that presents the sheriff with a very real problem. He must decide what is in the interests of justice. With great respect if this point has to be examined before the case is actually heard, it is very nearly impossible to conceive that the justice when he hears the case comes to it with a completely open mind. I recognise that there are advantages on both sides, but I think, on the whole, that the justice who takes a case should not be in a position to have to take a preliminary view as to where the interests of justice lie before the case comes before him. I ask the noble Lord to look at that to see whether he would consider that legal aid should not be granted by the Legal Aid Committee who, I am given to understand, are perfectly
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prepared to have a duty officer in all the courts at the appropriate time. I beg to move.
6.8 p.m.
Lord HUGHES: The noble Earl concluded by asking me to have a look at this, so I take it that he is not necessarily anxious to press this matter now. This would be a novel procedure, I am informed. I am also told that the Amendment as it stands is technically defective. I have been trying to find out exactly why this is so, but, though I have been told, I still do not know why it is so defective. It might be easier for the noble Earl to understand why this is so, but that is by the way. If it were otherwise acceptable, the technical defects could be removed fairly easily, but the view which we have taken is that in summary criminal cases in the sheriff court and, for that matter, in English magistrates' courts, legal aid is granted by the court itself. It would be entirely consistent with the present system for the justices to take legal aid decisions in the district courts.
This arrangement has the advantage of being quick, decisive and inexpensive and, more important, the statutory test on merit for granting legal aid in summary cases is that it is in the interests of justice that legal aid should be made available to the accused person. It is more appropriate for a test of this sort to be applied by a court rather than by any other body. As I have already said, training in legal aid matters is being given high priority in the training of justices and, with such training, I can see no reason why the justices should not be able to carry out this part of their work effectively. However, although the advice that I have is that the practice which is already applied in these other courts is shown to be a good one, that is no reason why I should not accept the noble Earl's invitation to look at the matter, and I will take an opportunity of discussing with the Department what has been said by the noble Earl today. If it would help him in the matter, I will write to him in ample time before the next stage, so that if he wishes to return to the matter on Report he will not be denied an opportunity to do so.
The Earl of SELKIRK: I thank the noble Lord. I can only say that I found what he said just now hopelessly misleading in certain respects, but I readily

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accept his assurance that he will look at this again. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported with an Amendment.

SOCIAL SECURITY AMENDMENT BILL
6.11 p.m.
Lord WELLS-PESTELL: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Wells-Pestell.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Baroness WOOTTON of ABINGER in the Chair.]
Clause 1 [Contributions]:
Lord ABERDARE Lord ABERDARE moved Amendment No. 2:
Page 2, line 20, leave out from "2,500)" to end of line 21.
The noble Lord said: May I begin by declaring an interest as a self-employed person, as I did on Second Reading? May I also say very briefly that I am sorry not to have been able to move the first Amendment, because I feel strongly about the married woman's option. But in view of the importance of this Amendment and the lateness of the hour, I thought it best that we should pay more attention to this one.
I should like to remind your Lordships of the facts. Under the 1973 Act we proposed that the self-employed man should pay a flat rate stamp at the rate of £1·68 per week and 5 per cent. on his Schedule D profits in the band £1,150 to £2,500. This Bill now proposes a flat rate sum of £2·41 and 8 per cent. on his Schedule D profits in the band £1,600 to £3,600. I say again, as I did on Second Reading, that we have no quarrel with the increased band of profits, which is
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effected merely by inflation, but we think it wrong and unjustified to increase the percentage on the Schedule D profits from 5 per cent. to 8 per cent. for no extra benefits whatever. The purpose of this Amendment is simply to restore the situation to what it would have been, so far as percentage is concerned, in our 1973 Act; that is, to reduce the percentage from 8 to 5.
We realise that more money has to be found to finance the extra benefits that have been announced, and that therefore the 1973 Act has to be amended, as it is by this Bill. But we believe that the way in which the Government have distributed the burden of these extra contributions is unfair to the self-employed. The employed person comes out of this Bill very well. In almost every case he will in future pay less than at present, because of the abolition of the flat rate stamp. At the same time, the self-employed man will be expected to pay substantially more, and we ask: is this fair on the self-employed man? He has no powerful trade union to defend his interests. He has no part in the social contract. Not much, I fancy, was said about the self-employed at the recent Labour Party Conference, and yet, as the noble Lord, Lord Wells-Pestell, himself said, they form a most valuable and indeed an indispensable part of the community.
Lord WELLS-PESTELL: May I interrupt? I am sorry, but as I understood him, the noble Lord started by referring to the flat rate contribution of £1·68 under the 1973 Act. I think I am right in saying that it was the Conservative Government which raised the contribution to £1·99 last January and, if I am right in my recollection, it would be much fairer to talk about £1·99 and not £1·68. That gives the impression that this Government are raising the contribution to a very substantial amount.
Lord ABERDARE: I am not talking about the flat rate stamp. In the first figures I gave I was comparing the 1973 Act with this present Bill. But my quarrel is with the percentage increase and not with the flat rate contribution, because of course the flat rate is now £2·41 so there is no change in the flat rate. I am talking about the increased percentage from 5 per cent. to 8 per cent. If we

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compare the self-employed man with the employed man, and take, for example, a man earning £50 a week, we find that the self-employed man will be paying £205 per annum and the employed man will be paying £111 per annum; that is, £94 less. On a weekly basis, whereas the self-employed man pays £3·94—that is, taking into account the flat rate and the percentage—the employed man will be paying £2·14 or £1·80 less. Yet the fact is that many of these self-employed people are themselves small employers and as employers they see their own contributions going up by a further 1 per cent. from 7½ to 8½ per cent. and, as self-employed people, they see their contributions going up from 5 per cent. to 8 per cent., while their employees continue to pay 5½ per cent. as at present. How can they be expected to think that this is a fair way of distributing the burden?
During the Second Reading, the noble Lord, Lord Wells-Pestell, based his whole case on the fact that the self-employed were not being asked to pay more in proportion than they would have paid under the 1973 Act. Just to get the position quite right, I should like to quote his words:
"The fact is that under the Bill the self-employed will pay exactly the same share of the cost of benefit as they would have done under the 1973 Act."—[OFFICIAL REPORT, 2/12/74; col. 41.]
The noble Lord went on to say:
"This…is not in dispute."
But it is in dispute.
I am sorry to have to go into figures, but I must refer to some figures because both this Bill and the 1973 Act were accompanied by Reports from the Government Actuary, and figures are given in both of them for the contribution income in the year 1976–77. These two documents are Cmnd. 5143, which was the Government Actuary's Report relating to the 1973 Act, and Cmnd. 5652, which is a similar Report relating to the Bill which we are now discussing. Under the 1973 Act, the self-employed would have paid £143 million in the year 1976–77; that is, 3·8 per cent. of the total of all contributions. Under this Bill, the self-employed will pay £224 million in that year, which is 4·2 per cent. of total contributions. So I really cannot see how
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the noble Lord can say that this Bill is maintaining the same proportion as the 1973 Act. If we are to keep the proportion the same as the 1973 Act, then the self-employed should be paying 38 per cent. of the total contribution and that would be some £21 million less than they are being asked to find. That is what would be achieved by this Amendment, reducing the proportion from 8 per cent. to 5 per cent.
On the last occasion a number of your Lordships spoke about the value to out economy and to our way of life of the self-employed. I do not wish to go over all that again because I am sure it is well in your Lordships' minds, so I will content myself with making one more point. I may well be asked how this cost of £21 million is to be found if it is not to be raised from the self-employed. There are a number of ways of doing this, a number of ways in which the contribution of other people to the fund could be altered; indeed it could be taken from the Treasury supplement. But I very much doubt whether it is necessary to find this money. I believe that the fund itself can well afford £21 million.
Again, I am afraid that I have to refer to the Government Actuary's report, but according to that the fund will be in deficit by £52 million in the year 1975–76, and thereafter there will be a handsome surplus. But the extraordinary fact is that this deficit is calculated on a rate of increase in earnings of only 8 per cent., and it is specifically stated in the Government Actuary's report that the Government have instructed him to take that figure. That is far below a realistic figure. The present figure for the increase in earnings must be more than double the rate of 8 per cent., and if a realistic figure is taken there will certainly be no deficit in 1975–76.
Indeed, the Government Actuary himself has acknowledged that there will not be a deficit, because since this Bill was introduced another Bill has gone to the other place—the Social Security Benefits Bill—which brings in a host of new benefits. Although there are new benefits and no new contributions the Government Actuary, left to his own devices and not being told by the Government what rate of increase to assume, has assumed an increase of the order of

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17½ per cent. per annum, and has therefore arrived at a surplus in 1975/76 of £268 million. This is the latest figure in the latest Government Actuary's report for the surplus of the fund in 1975/76. Surely from that figure £21 million could be used for the benefit of such an important group of people in our community as the self-employed. I beg to move.
6.22 p.m.
Lord WADE: I think that this Amendment should be supported, mainly because it reduces the figure from 8 per cent. to 5 per cent. and that, as is apparent, is less of a burden. Although, as I pointed out on Second Reading, I do not suggest that there is a deep difference of principle between 5 per cent. and 8 per cent., this proposed 8 per cent. is a steep additional burden on those self-employed with a net income of between £1,600 and £3,600. There is undoubtedly a wide range of people affected, including musicians, writers, persons with small businesses and many others who were referred to on Second Reading. Of course we have to weigh up the arguments about the distribution of the burden, and if your Lordships feel that too great a burden is being placed upon the self-employed then I hope you will support the Amendment moved by the noble Lord, Lord Aberdare.
But in discussing this Amendment I find that I must go a little wider than a comparison of the figures of 5 per cent. and 8 per cent. I do not wish to go over the whole debate on Second Reading, but I hope I shall be forgiven if I go a little wide of the Amendment before the Committee. It seems to me that three basic questions have to be asked. The first is: is this 8 per cent. imposition—if I might call it such—fair? The second question is: how strictly must we rely on the Government Actuary's calculations, having regard to the fact that the premises on which he worked are not decided by him, and we are not questioning the calculations? The third question which we have to ask in deciding whether 5 per cent. or 8 per cent. is right is: is the method of arriving at the amount payable, which is mainly by taking a percentage of net profit after
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tax or net income after tax, justified or necessary?
On the first question as to whether this is a fair or an unfair burden, the point has already been made by the noble Lord, Lord Aberdare, that the contributions do not produce increased benefits. In the leaflet NP18, which has been prepared in advance in order to make the position as simple as possible to those who wish to understand what is happening, there is a quite fair statement on the second page. It states:
"Clause 4 contributions will not entitle you to any additional benefit"
It then goes on:
"The purpose is to ensure that the self-employed as a whole pay a fair share of the cost of pensions and benefits."
That is the question: is it a fair share?
As your Lordships are aware, there were pleas on all sides of the House to the effect that the burden falling on the self-employed was not fair. I am not going over all that ground again, but there is an additional point—and if I am wrong I am sure that the noble Lord, Lord Wells-Pestell, will correct me. I understand that it is now provided that a director of a company who works part-time, or perhaps whole time, for the company of which he is a director may be treated for contribution purposes as being employed, and it seems to me that he will be in a more advantageous position than a self-employed person who is not a director of a company. But we must be realistic about this. I do not think there are many self-employed musicians who can turn themselves into limited companies, unless they are right at the top of the financial tree.
On the second question, I am not going over all the ground as to whether it is fair; that is a matter of judgment. But must we be strictly bound by actuarial calculation, which is based on the assumption that there is a National Insurance Fund? I am bound to say that I am a little sceptical about this National Insurance Fund which we have already been told does not exist. I want to be fair about this. The noble Baroness, Lady Phillips, asked what noble Lords had done when the 1973 Bill went through. I admit I did not take part; I had other responsibilities. The question was rather like: "What did you do in the Great War, daddy?" My answer to the noble

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Baroness is that I did not do very much in 1973 as I had other tasks. But in days gone by I have on a number of occasions, mainly in the other place, taken part in these discussions about the contributions when a Government have brought in some new pension scheme.
We have had lengthy discussions about the calculations. We heard of the year 2004, now the calculation is the year 2010. Were the contributions too much or too little? Again, I say, it was rather unreal. Within a few years the discussion is forgotten because the calculations have become out of date. Therefore I for one must look at these calculations with some scepticism., This is important because it may affect the amount at a particular time that we have to pay into this somewhat mythical National Insurance Fund. It does, as your Lordships will know if you look at Cmnd. Paper 5652, go up to the year 2010. There is even one estimate of the cost of administration in the year 2010–11. I wonder whether it is possible to assess the administrative costs of a somewhat mythical fund in the year 2010. In passing, one wonders how many self-employed there will be in the year 2010. I suggest one is entitled to be a little sceptical about the Government Actuary's figures without for one moment questioning the arithmetic.
I do not think there would be any cataclysmic adverse effects if, for example, one adopted the 5 per cent. proposed in this Amendment without necessarily making other alterations. I understood the noble Lord, Lord Aberdare, to be making the same point. We can rightly consider temporary alterations to this Bill. My main point is that I think this must be a temporary Bill. I hope it will not be long before tax credits are introduced, or there is a major change in our tax laws. When this is done the whole question of Social Security contributions will have to be looked at again.
My third question is whether it is right to take a percentage of net profits after tax in the case of the self-employed; in other words, their contribution cannot be set off against income for the purposes of arriving at their tax liability. In this case —only in the case of the self-employed—the percentage is taken on the net profits after tax. Here may I very briefly correct a remark I made on Second Reading.
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At column 19 of Hansard on 2nd December I was dealing with a case of a self-employed small businessman receiving £2,500 after tax. I said he would pay a flat rate plus £200 per annum. That was a mistake on my part—I meant £200 per annum including the flat rate tax. It did not affect the material point that I was making; namely, that the self-employed person who has to put capital into his business may have to find it out of what is left after paying tax, and he will have that much less if he also has to pay these contributions out of what is left after tax. I think this is a serious point so far as those who come within the band are concerned. It will be a very serious problem for people with small businesses; it is difficult enough as it is. Here you have a situation where they have to pay their tax and then, out of what is left, they have to pay these substantial contributions.
There is a temptation, as I mentioned on Second Reading, that people will try so to arrange their affairs that the net figure is lower in order that their contributions will be lower. I do not think that is a good idea. Therefore, for various reasons, I think it would be reasonable to reduce the figure from 8 per cent. to 5 per cent. I go much further, because I should like to see a complete revision of this method of arriving at liability. I should like to see the employed and self-employed put on a similar basis. But, within the terms of what we can do under this Amendment, some relief should be afforded. I think it is reasonable, and I hope the Amendment will be supported.
6.35 p.m.
Lord SANDYS: I support my noble friend Lord Aberdare in his Amendment, and in so doing I declare an interest, both as a self-employed person and as one interested in the agricultural industry. Your Lordships may be somewhat impatient at this late hour and, for that reason, I will speak only briefly. But I feel it important to stress the particular problems of the agricultural industry in this context. Your Lordships will be aware there are over 280,000 self-employed persons in this industry. There is a special problem concerning Schedule D in the farm context. It is a very complicated and difficult matter. The best explanation on which I can lay hands, which your Lordships may have

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seen and read, is the Annual Review of Agriculture 1974. It is very brief. It is Cmnd. Paper 5565, and it says:
"… farm income is not directly comparable with incomes in most other sectors of the economy, since it includes elements of wages and changes in stock valuations as well as profits. It provides the return to farmers and their wives for their manual and managerial labour. It also provides the return on occupiers' investment in the farm business"
This is a special problem. If you are assessed under Schedule D and you have a farm, or you are a tenant of a farm, your particular problem is not how you stand at the end of one year, but at the end of a group of years.
Perhaps I may quote a personal experience. In the years when the tax system was changed, between 1965 and 1966, no less than three years of my personal taxation were in the hands of the Inland Revenue until the first, second and, finally, the third years were evolved. Farmers are totally unaware how they stand in relation to the Inland Revenue from year to year because of changes being made, because of the problems of their own stock valuation and because of the specific problem of the alterations of the tax position. I support what the noble Lord, Lord Wade, said in almost every respect and I should like your Lordships to consider the problem of assessment. The self-employed are not making muted mumblings; this is a real problem and they are seething with rage about it.
Lord GEORGE-BROWN: I want to support this Amendment from a different point of view from that of the last speaker. Clearly, I have no self-interest to declare. I am, and always have been, an employed person. As an employed person, one also has to look generally at justice being done across the whole community. I have given as much attention as I could since the Second Reading debate to the Government's own case as it has, through the courtesy and kindness of my noble friend Lord Wells-Pestell, been given to me. I do not think that they, although trying very hard, make a case in justice for what the Bill does.
There is one question we must get clear and perhaps my noble friend will clarify it in winding up. The self-employed people, organised variously as
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they are, believe that they do not obtain a widow's pension for their self-employed contribution. My noble friend whispers to me that they do. We have to get this point very clear because many of them seem to think that they do not and that there is no widow's benefit in consideration of paying a self-employed contribution. Would my noble friend like to make that point clear now?
Lords WELLS-PESTELL: Yes, if the noble Lord would be good enough to give way. This is a matter, if I remember rightly, that the noble Lord, Lord Aberdare, raised when we were considering the question on Second Reading. I was able to say that, in addition to sickness benefit, invalidity benefit, maternity benefit, retirement pension, child special allowance, death grant and guardian's allowance, they are entitled to widow's benefit.
Lord GEORGE-BROWN: To that extent I am relieved. I must tell the noble Lord that that will take a great deal of worry from many people's minds because for some extraordinary reason nobody seems to believe it. That point diminishes the case I want to make, but I trust my noble friend is right.
Baroness PHILLIPS: I do not want to confuse the issue, but the Minister said, "Widow's benefit". There is the widow's allowance which a widow receives for so many weeks after her husband's death. There is also the widow's pension. Perhaps the Minister would indicate what he is referring to.
Lord WELLS-PESTELL: I was referring to widow's pension.
Lord GEORGE-BROWN: So long as my noble friend will stand by that. I see a little consternation showing up in the Box—which when I was a Minister I got used to. I will keep talking for a while so that they may pass a note. But if the Minister is really committing the Government to the view that a self-employed man's contribution provides entitlement when he dies to a widow's pension, as an employed man's widow would be entitled, that to a large extent diminishes the case I was about to make.
Lord WELLS-PESTELL: I am obliged to the noble Lord for giving way. I am informed that I am right.
Lord GEORGE-BROWN: I am so glad. There is a case for the Officials' Box after all. But I hope no Minister in the other House will walk away from it. To that extent, admittedly, the case I was to make is diminished, although politically it still stands. There are other benefits which the self-employed man does not receive, even on the Government's own case. The exceptions which the Government themselves make about unemployment, industrial injuries and earnings-related supplements are considerable. As I understand it—and I will give my noble friend and the Government credit for trying to state the case as fairly as they can—the situation is that they reached a point where the Government actuaries said: "If you do the thing right on the figures"—which, after all, is what actuaries are employed to provide—" you will have to put up the Class II rate"—and Class II, I gather, refers to the employed people—"to £2·70 a week." The Government decided—I do not think wrongly—that that would mean that a lower-paid worker earning, perhaps, £15 would be asked to pay much too large a proportion. The Government had to decide then whether to bear that additional burden on taxation, or redistribute it between the employed and the self-employed. They chose to do it by redistributing between the employed and the self-employed. As a result they pushed up the contribution of the self-employed from 5 per cent. to 8 per cent. in order to keep down, quite rightly, the contribution which the lower-paid person should pay.
The essence of this case is whether that was the right decision, or whether the right decision was, in fact, to put the cost on to taxation, which means, if I may declare my interest as a Socialist, putting it on to the shoulders best able to bear it. There is no reason, I submit to my noble friend (with whom I have had friendly talks on this matter behind the Chair), to assume that because a man or a woman falls into the category of being self-employed, like the lady from whose shop every morning I buy my papers, his or her shoulders are best able to bear it. We Socialists have always believed that the test of whether one's shoulders are best able to bear it is the income one has to return at the end of the year. Many employed people, including some friends of mine, have shoulders much better able
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to bear it than some people who happen to be described as "self-employed". I frankly think that my Government—I say "my Government"—have been tempted wrongly here by the bureaucrats. I say to my noble friend: "If you aren't awfully careful, they'll get you wrong." I have a great deal of experience of this. They have been tempted to go the wrong way.
I take the figure the noble Lord, Lord Wade, gave. I have no figure to controvert it and I assume he has done his homework. He said it was £21 million or something of that order. If it was that which had to be distributed, then a better way to have done it, I submit, would have been by general taxation, placing the burden anywhere you like—placing it on me, if you like, because I am obviously better able to bear it than the lady in the newspaper shop; or placing it on some of the chaps on the other side of the House, if you wish, because they are obviously better able to bear it than I am: but, seriously, placing it appropriately, but not on individuals called "self-employed" who may well be a good deal less well off than the employed person in Ford's or Chrysler or a director who also can have himself described as an employed person.
I believe that this is where they have gone wrong. Having tried very hard, as the noble Lord asked me, to see whether I could find myself able to agree with their thinking, and having allowed for the fact that he has put right the question of the widow's pension—I trust for all time —and having to that extent diminished my argument, I still feel that they have put the burden in the wrong place. A figure of 8 per cent. instead of 5 per cent. in the case of somebody who is earning between £1,600 and £3,600, is putting hardship on to a section of our community which is suffering great hardship already.
There was a day when I thought that £1,600 to £2,000 was a hell of a lot of money, but I do not think so any longer. We have to remember that Members of the Lower House will become employed persons as from next April, having been self-employed persons until now. They are earning £4,500, plus a number of other things. I ask my noble friend, not as a farmer, not as a Conservative, not as any of these other things but as a

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Socialist, how one explains to somebody who is working as hard, if not harder, than any other worker but who just happens to be doing it in his or her own name, that Members of Parliament get out of the self-employed category at the very moment when the impost on the self-employed, who are getting less than they are, goes up. To my regret—and I hope that my noble friend will accept that it is to my regret—I intend, if the Committee is divided on this issue, to vote with those who divide the Committee against the Government.
On Second Reading my noble friend said that if we did that we should hold up some benefits for some other people, and I am very conscious of the burden which I will share with them in doing that. I asked the noble Lord to consider whether he could put through the nicer parts of the Bill and hold back the other part, but for reasons which I understand he cannot do so. Having given a lot of thought to the matter, I shall vote with those who divide the Committee against the Government on this Amendment. I simply do not feel that one can divide this country between those who are employed by employers and those who work technically in their own name. Very often, the richer people are among those who can call themselves employed. A lot of my poorer friends are among those who have to call themselves self-employed. I wish that die Government could reconsider this point but, for timetable reasons, I understand that they cannot do so. I invite any of my noble friends who feel able to do so to follow me this time, with however a heavy heart, into the Lobby of those who divide the Committee against the Government on this Amendment.
Lord DARWEN: May I support what my noble friend has just said, and may I point in particular to the very diminished benefits which the self-employed get? I noticed that on Second Reading my noble friend Lord Wells-Pestell said that, naturally, the unemployment benefit is not paid to the self-employed. Why "naturally"? After all, self-employed people can become unemployed, just as employed people can become unemployed. Very often, a self-employed person is a specialist in a certain field. It may be that because his business goes bust, or because he is unable to carry on for
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financial or health reasons, he becomes; unemployed. Surely, therefore, in paying the rate that is now proposed he should be entitled to unemployment benefit. I do not see why it is "natural" that he should not be so entitled.
6.56 p.m.
Lord PLATT: At this hour I will be as brief as I can, especially as nearly all the arguments which were fully deployed during the Second Reading debate have been deployed again this evening, with some interesting and important additions. However, may I make one or two points? The noble Lord, Lord Wells-Pestell, favoured me also with a document which I think is the same as the document which he gave to the noble Lord, Lord George-Brown. Whereas I see in it a good many of the mathematical arguments, I cannot pos- sibly accept its logic because this is not a matter of mathematics and actuaries; it is a matter of opinion and feeling.
To a simple-minded chap like myself who has no training as an accountant or actuary, it seems to me that the position is this. The employed person pays a contribution for certain benefits and his employer adds something to that contribution—something very substantial, I understand. I do not know what the figures are, but the point is that there are two people who are subscribing to his benefit. The self-employed man must, presumably, shoulder all of the burden himself, because he does not have an employer to shoulder some of it for him. If, therefore, you are going to have logic he ought to pay his own contribution, plus the employer's contribution, but nobody in this House thinks that that would be just. Then you say, "Forget about logic. Ought he to pay 40 per cent., or 50 per cent. or 60 per cent. of the double contribution—his own and his employer's?" It is entirely a matter of opinion as to where one thinks that the burden should fall and who can best pay it. Therefore, I do not think that logical arguments based upon statistics and the calculations of actuaries will get us very far.
My second point, which I am very surprised has not been raised, is not irrelevant to this Amendment, although at first sight your Lordships may think that it is irrelevant. In columns 43 and 44 of the Report of the Second Reading debate,

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the noble Lord, Lord Aberdare, and, later on, the noble Lord, Lord George-Brown, both pressed that accredited organisations—that was one of the terms which was used—or, at any rate, respectable and responsible organisations which stand for some of the groups of self-employed such as authors and musicians (in which personally I am most interested) should have the chance of putting their case either to the Secretary of State or to the Minister of State. In reply, the noble Lord, Lord Wells-Pestell, gave an assurance that this ought to be done and that he would put it to his right honourable friend. That was on Monday of this week. It is now Thursday. There has been no time whatever for those consultations. I know that at least the body in which I am interested has written about the matter to the Secretary of State, but there has not been time for a reply. You may perhaps say that that is not wholly relevant to the Amendment before us, but it is wholly relevant because obviously to take the extreme case, if all these bodies—musicians, authors, self-employed shopkeepers and so on—came to the conclusion that it was perfectly right for them to pay 8 per cent. (which would be rather surprising, but supposing they did) obviously it would influence my position and my decision as to which way I would vote.
My final point is that on Monday evening on Second Reading, the noble Lord, Lord Wells-Pestell, put the case for the Government and of the eleven speakers not a single one spoke in his favour. Now is the opinion of this House being sought or is it not? If it is being sought, then there was 100 per cent. against the case which was being put forward—perhaps very reluctantly, I do not know—by the noble Lord, and to that number has been added one new speaker this evening, which seems to me to make twelve. If that is just to be cast aside and no notice taken of the influence of this House, I think it is a serious insult to this House and a very serious criticism of the whole of the Parliamentary system.
Lord HOUGHTON of SOWERBY: Although I shall not follow my noble friend Lord George-Brown into the Lobby in support of this Amendment, I have some sympathy with the case he
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put and the case that has been put on behalf of the self-employed. In a few moment, if your Lordships will permit me, I will explain my position on this matter. First, however, I want to dispose of the misunderstanding about widows' benefits and the self-employed contribution. So far as I can recall, widows' benefits have always been attached to a self-employed contribution. I do not recall that ever was the widow's benefit not part of the insurance cover of a self-employed person. The two major benefits affecting the self-employed which it was originally proposed should not be attached to a self-employed contribution were sickness benefit and unemployment benefit. But Parliament decided, wisely, in 1947 that sickness benefit should be part of a self-employed contribution which unemployment benefit should not, and that is how the matter stands.
Now I must dispose of the position of Members of Parliament. It has been suggested that Members of Parliament are most conveniently being transferred from self-employed contributors to employed contributors, because it seems that the employed contributor will pay rather less than the self-employed contributor and therefore it is to the advantage of Members of the House of Commons that this change should be made at this point. That is purely coincidence.
SEVERAL NOBLE LORDS: Oh!
Lord HOUGHTON of SOWERBY: I can assure your Lordships that it is. As Chairman of the Parliamentary Labour Party, for years I was pressing for the revision of the mistaken classification of Members of the House of Commons as self-employed contributors. It was never right. They were assessed for tax purposes under Schedule E. All employed persons are assessed under Schedule E, whereas self-employed persons are assessable under Schedule D, and it would have been to the advantage of Members of Parliament to be assessed as self-employed people for tax purposes, but they were not. They were always regarded as employed persons for the purposes of taxation. This was a grievous anomaly. When Members of Parliament lost their seats in the House of Commons there was no unemployment benefit, and after the General Election in 1970, the Parliamentary Labour Party Benevolent

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Fund paid out £8,000 in a matter of two weeks to Labour Members of Parliament who had lost their seats and who were in need. It was disgraceful that Parliament should in that way treat its Members who had lost their seats.
The Boyle Report relating to the conditions of Members of Parliament generously revised those harsh conditions. The change from self-employed to employed contributions for Members of the House of Commons is long overdue and has been awaiting legislation for a long time, and the fact that it is being done now has nothing to do with the change in the contributions. That disposes of Members of the House of Commons.
I now come to the general proposition. What is wrong is the continuation of the mythology of the insurance principle. It was originally believed that under the insurance principle, the premium—which I think it is convenient to call it—was composed of two parts: the premium paid by the employer and the premium paid by the employee, and to the joint contribution an Exchequer contribution was made by the State. So it was thought that if a person was self-employed it would satisfy the insurance principle only if the self-employed person paid the two contributions which in the case of employed persons were payable by two separate persons, the employer and the employee. It seemed to the architects of the original scheme that the self-employed contributor must pay both as his fair part of the contributions to an insurance scheme.
But it is no longer an insurance scheme and it has not been so for a very long time. Therefore, when the contributions are switched from the flat rate principle to an earnings related principle, the principles of taxation come into this because it has nothing to do with insurance any more. It is a form of social tax, and in looking at taxation one should look at the equity of the matter, because the benefits that the self-employed contributor gets are no better, and in some respects are not so good, as the benefits of the employed contributor. Yet he can be asked to pay more for those benefits than is paid correspondingly by an employed contributor on the same income.
This is the injustice of what is proposed, and I think it should be rectified before long. The question is whether this is
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the moment to attempt to do it. I fear that if this Amendment is carried, the Bill will be left in a very ragged state. If I may say so, it does not achieve the purpose that it sets out to achieve and it leaves the Bill almost incoherent in the structure of the contributions. It does not do the job. Nor, of course, does it deal with the substantial lowering of the contribution income which would come from the passing of the Amendment. Therefore I think it would be a mistake to make this change, though my message to the Government is that when the big change comes about next year—or so we are led to understand—then the opportunity should be taken to rid the Scheme of this nonsense that it is an insurance scheme. If that is done, I think the contributions can be put on a rational and equitable basis related to income, and related also to the common level of benefits to be given under this Scheme.
Lord GEORGE-BROWN: Supposing we carry this Amendment, which the noble Lord, Lord Houghton, thinks would leave the Bill in a ragged state, but which he clearly thinks itself is justified, we will have left the Government with £21 million, or whatever the figure is, to find from some other place. Is that not what the noble Lord is saying? Does he not think the Government, between now and next spring, could then find that out of what he calls social taxation?
Lord HOUGHTON of SOWERBY: I am sorry, but my noble friend is mistaken here. The Exchequer contribution is fixed under Act of Parliament as a percentage of the total contributions by employers, employees and other contributors to the Scheme. If more of the burden of the benefits is to be thrust on the Exchequer, then it means revision of the Exchequer contribution. It is not merely a matter of putting it on taxation. It would disturb the relationship between the ratio of the Exchequer contribution to the total of contributions coming from other sources. But it would do more than that. It would maintain the self-employed contribution at a static level at a time when the Bill is increasing the contributions of the employed contributor. That anomaly would be left in the Bill, and would have to be rectified somehow, somewhere, if this Amendment were carried. I beseech your Lordships not to

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mutilate this Bill now. This is the wrong moment, the wrong way. Let us keep our powder dry until we see the shape of the major proposals coming next year. I submit with great respect that then we can look for the riddance from social security of this outdated mythology that it is an insurance scheme, and we can no longer justify asking self-employed contributors to pay a disproportionate amount on the obsolete theory that they ought to pay two premiums instead of one.
Baroness BURTON of COVENTRY: I rise with some diffidence to disagree with the noble Lord, Lord Houghton, because on these matters I would think there is no greater expert than he in either House. I do not propose to offer the Committee any figures tonight; I have none to offer. When this proposal first came before this House, and before the Second Reading debate, instinctively I did not like it. I read the Second Reading debate with great care, and I have listened tonight to what has been said. I think this proposal is unfair. I find that a very simple statement to make, and I find it very difficult to avoid action to try to prevent unfairness taking place.
I note what was said by the noble Lord, Lord Houghton. I, for one, would not dream of disagreeing with him. I am sure he is right when he proposes that if this Amendment is carried it may leave jagged edges. But I do not think that is our concern, because after all—and speaking entirely in a non-Party sense—if Members of Parliament feel that something is unfair, I do not think we are ever going to get anywhere if we sit down and say, "We will leave it until there is a better time". I am sure those of us who have been in either House for some time, and particularly in another place, know that the only effective way of making a protest is to make it across the Floor of the House. It does not make one popular, but it carries more weight than making it upstairs in a Committee room, or in sitting down here and letting something go through.
I think this is unfair. What disturbs me is that I do not like to hear my Government—because while I am a nuisance I still like to think of it as my Government—being accused of something that is not fair. I think this is mean. It is attacking
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a section of the community which is not able to fight back. I would go further. I do not think such an attack would be made on a section of the community which could fight back. I am sorry to contribute to the ragged edges, but unless by noble friend Lord Wells-Pestell can convince me otherwise, I shall vote for this Amendment tonight.
The Earl of LYTTON: I should be more delighted one day to take part in a debate with the noble Lord, Lord Houghton of Sowerby, on the abuse of insurance. It is evident we share the same kind of view. But I shall not do so tonight. I should declare an interest. For the last half of my life I have been a self-employed person. I am expecting to become an employed person as inflation progresses. I make my protest at the unfairness of this discrimination against the self-employed. I made a random list last night of 76 different groups of people in one-man jobs, one-woman jobs, man and wife jobs, father and son, two friends, brothers —hardly any of them employing anyone, and all of them on the first rung of the middle-class ladder and thereby engaging in work for an 80-hour instead of a 40-hour week. These are the small men and women who will be mightily hit by this. I feel certain it must have been done by some kind of accident. I shall support the Amendment.
Lord WELLS-PESTELL: It would appear that I am batting on a sticky wicket. But first of all, I want to say to your Lordships that following the Second Reading on Monday, I gave an undertaking that I would consult my noble friend the Minister of State for Social Security in another place, and in turn he would consult the Secretary of State for Social Services. I fulfilled that undertaking. A good deal of thought has gone into the matter since we discussed this on Monday last. In some ways regretfully, but I think quite rightly that, having said that, I must resist this Amendment. I do so because I personally believe it is right that this Amendment should be resisted.
The noble Lord, Lord Platt, complained with some feeling about various organisations not having an opportunity of consulting with the Secretary of State, but let us be quite frank about it. The Bill was introduced in another place in

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June of this year. It had an unopposed Second Reading. Am I to be told that the various organisations which represent self-employed people did not know what was in the Bill? Of course they did. But there has been no move on their part, until presumably quite recently, to discuss this matter. My right honourable friend the Secretary of State, in the absence of applications which could have been made months ago and were not, presumably, is entitled to assume that the conditions that were laid out very clearly in the Bill—
The Earl of LYTTON: With great respect, may I interrupt the noble Lord. I find the Bill absolutely incomprehensible. It was not until someone jogged my elbow late in the day that I realised the peril in which my self-employed working friends were.
Lord WELLS-PESTELL: In that case, the noble Lord must blame the Party on the other side, because this is based solely upon their 1973 Act. The only difference between us is whether it will be 5 per cent. or 8 per cent.
The Earl of LYTTON: I really do not want to blame anyone. I am a Cross-Bencher and in search of justice.
SEVERAL NOBLE LORDS: Hear, hear!
Lord WELLS-PESTELL: It is quite extraordinary to hear members of the Opposition saying, "Hear, hear", when the structure of the Bill is entirely theirs. I am not complaining about it. We accepted the structure of the 1973 Act.
Lord MOYNE: I said "Hear, hear" from an independent point of view; it was put by the noble Earl, Lord Lytton, and that is why I said "Hear, hear"; I said it from a non-Party point of view. This whole debate has taken place from a non-Party point of view. If other Parties or our Party have made mistakes, never mind. We want justice.
Lord WELLS-PESTELL: It is very refreshing to hear the noble Lord put it like that. But from this side of the House, when there are so many "Hear hears" from the other side, I naturally ask myself what noble Lords opposite did when the Bill was introduced by them, when it was available; I do not know what action noble Lords on the other side took in respect of this matter. All I am saying
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is—and it may be quite wrong—that so far as the Bill is concerned we have built the Social Security Amendment Bill 1974 upon the 1973 one.
After last Monday I made a point of seeing various Members of your Lordships' House because I felt, and I still feel, that there is some misunderstanding; I tried to get rid of that misunderstanding by giving them certain information to which my noble friend Lord George-Brown referred, because I thought it might help the situation. If I may put it like this, it has been the practice over a good many years that contributions should move in line with earnings. The noble Lord, Lord Houghton of Sowerby, has raised the point that perhaps we ought to look at our entire insurance scheme again, but we have always accepted that this has been the fairest way of dealing with it. It may well be that it is no longer the right way, but this has been the philosophy not only of the Government in power at the moment but a whole succession of Governments who preceded them. If we have to look at it afresh it may well be that the time has come, but at the present moment, basing the Social Security Amendment Bill on the structure of the previous Government's Act, it seems to me thta what we are suggesting is the fairest possible way for the self-employed man.
The noble Lord, Lord Aberdare, quite rightly pointed out that there is the flat rate of £2·41 per week for every self-employed man in receipt of an income after he has had an opportunity under Schedule D of deducting his overhead expenses and so on; it will be on net profit or net gain of over £1,600, and do not let us forget this. He will be dealt with under Schedule D and this means that he will have an opportunity—quite rightly so as a self-employed person—of being able to set against tax overhead expenses and so on, a good many of which are allowable out-of-pocket expenses which the income tax authorities permit. After the £1,600 he will be required to pay, we want 8 per cent. of the net gains or profits. If I may come to the question of benefits, I do not want to go through them all again.
Lord GEORGE-BROWN: Could we just get one point quite clear. I do not know how generous my noble friend's particular income tax inspectors are, but

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we are quite clear, are we not, that the £1,600 represents the income of the self-employed person? He has not charged any wages before that. He may have charged his stamps or his stationery. I would hope my noble friend would not—I know he would not—even by inadvertence, mislead the House. The £1,600 represents the total income of the man after he has been allowed to charge whatever he is allowed to charge.
Lord WELLS-PESTELL: Let us put it in very simple terms. It is the net income, not the gross income. Those of us who have been self-employed for a good many years know that there are some advantages in being a self-employed person.
Lord REIGATE: Before the noble Lord leaves that point, what are these advantages he draws attention to? In column 38 of Hansard at Second Reading he referred to the expenses which many employed people have to bear but cannot set against taxes. Is he suggesting that a self-employed man is in a particularly privileged position, or is there some fiddle?
Lords WELLS-PESTELL: I think the self-employed man is in a privileged position when compared with an employed person.
Lord PLATT: Is this not just the trap I pointed out on Second Reading, that because expenses are free of tax people think one is getting ones fares. Let us say a musician goes to Glasgow and he gets a set fee for that. He has to pay his fare, and he can claim back about one-third of it by not paying tax on that fare, but he has still paid the other two-thirds, has he not?
Lord WELLS-PESTELL: With great respect, I would ask your Lordships to allow me to continue. I am merely saying that it is a well known fact that a person who is self-employed—and I have been self-employed for a good many years myself until fairly recently—can set against income tax certain kinds of expenditure, and the better the accountant the better you succeed. What I want to return to is the benefits which the self-employed people receive. I mentioned a moment ago that they are entitled to all
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the benefits with the exception of unemployment benefit, industrial injury benefit, and earnings related supplements in relation to certain other matters. It is on that basis that the previous Government and we have determined the rate of contributions. I ought to explain at this stage that the term "widow's benefit" is a collective one for all the benefits to which a self-employed person is entitled; namely, a widow's allowance which is payable for the first six months of widowhood, a widowed mother's allowance payable to widows with children, and a widow's pension. We refer to these three benefits, all being available to the self-employed person, as "widow's benefits".
The Government Actuary estimates—and I do not want to burden your Lordships with figures, because I think they can be misleading and can be used to suit almost every argument—that the National Insurance benefits to which self-employed people are entitled is something like 90 per cent. in cost of all National Insurance benefits. The precise figures vary from year to year. From 1949 to 1950, and from 1950 to 1951, a self-employed person was entitled to 95 per cent. of the National Insurance benefits. It went up to 97 per cent. from 1960 to 1961; it was 91 per cent. in 1970–71, and in 1973–74 it was 93 per cent. So it means that to pay fully for what they get back in benefit the self-employed contributions should be—because it would not be unreasonable for them to be—90 per cent. of the employee-employer Class 1 contribution, but never at any time have the self-employed persons in this country been required to contribute that amount in terms of their own national insurance payment.
At the present moment the Class 1 payment—that is the payment made by the insured person and the employer—amounts to a total of 14 per cent. If we were to say—as the Government Actuary has said since about 1942 when we were considering the Beveridge Plan —to the self-employed person, "You have 90 per cent.; you are entitled to 90 per cent. of the benefits which the employee gets, therefore you ought to pay that amount", then we should be entitled, any Government would be entitled, to ask the self-employed person to contribute 12·4 per cent. In point

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of fact, what we are suggesting in our Bill, the Social Security Amendment Bill 1974, is that they pay 8 per cent. and not what the Government Actuary has said over a period of time should be much higher.
I concede that the point between us is whether it should be 8 per cent. or 5 per cent. If it is 5 per cent., obviously —and I do not think the noble Lord, Lord Aberdare, would disagree with this —the flat rate of £2·41 per week would have to be increased to £2·70.
Lord ABERDARE: I do not agree with that. I tried to explain in my speech that there was surplus money in the Government Actuary's own figures which would meet the £21 million difference. I do not accept that.
Lord WELLS-PESTELL: But, you see, benefits have to be met and paid for out of contributions, and always assuming—and I would accept—that there is a surplus, one has to bear in mind that the Government are committed to raising pensions and benefits in April next year and again in December. One has to keep a surplus in order to raise benefits and pensions in the coming year. It seems that the whole structure of our system has been that benefits should be related to contributions. As I said at the beginning, it may well be that the time has come when we have to think out this situation again, but what we are faced with at the moment is benefits related to contributions. We feel, rightly or wrongly, that when dealing with self-employed people—and it has been represented in your Lordships' House on Monday and again today that there are many who are receiving far less than £1,600 a year—it would, in our view, be quite wrong that we should raise the flat rate contribution, which would have to be done, from £2·41 to £2·70 in order to maintain Class 4 at 5 per cent. We feel that relieving the burden a little on the part of the flat rate and putting it on, shall I say, to Class 4
contribution by raising the 5 per cent. to 8 per cent., is the right thing to do.
We have thought of this again very carefully this week, and I feel that if your Lordships are concerned about the plight of the lower paid self-employed person then it is far better that he, or she, should have a flat rate that is being kept down, and that the balance which one loses as a result of that should be obtained from those who are financially better off.
Lord DARWEN: May I ask whether my noble friend thinks that that is the only possible alternative; namely, to vary the flat rate in order to recoup the money?
Lord WELLS-PESTELL: As the situation is at present, the basis upon which we calculate contributions—not only this Government, but previous Governments—the present structure requires us to do that, yes.
Lord ABERDARE: I am sure that the Committee is ready to come to a decision on this matter. I am grateful to those noble Lords from all parts of the House, the Liberal Benches, the Government Benches, and the Cross-Benches, who have supported this Amendment. This represents the feelings of a great many self-employed people and organisations throughout the country, and it would be right that this House should express its view on this matter. I do not agree with the noble Lord, Lord Houghton, that this leaves any jagged edges. If there are jagged edges, then all we are doing is giving another place a chance to look at this again, to take into consideration the strong views that have been expressed in this House, and any jagged edges can be "unjagged".
7.35 p.m.
On Question, Whether the said Amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 87; Not-Contents, 28.

CONTENTS

Aberdare, L.

Belstead, L.

Courtown, E.

Airedale, L.

Bledisloe. V.

Cowley, E.

Amherst of Hackney, L.

Boyd of Merton, V.

Darwen, L.

Amory, V.

Brougham and Vaux, L.

de Clifford, L.

Arbuthnott, V.

Burton of Coventry, B.

Denham, L. [Teller]

Balerno, L.

Carrington, L.

Derwent, L.

Barnby, L.

Colwyn, L.

Drumalbyn, L.

Barrington, V.

Cottesloe, L.

Elles, B.

Elliot of Harwood, B.

Long, V.

St. Aldwyn, E.

Elton, L.

Lucas of Chilworth, L.

St. Davids, V.

Emmet of Amberley, B.

Lyell, L.

St. Helens, L.

Falmouth, V.

Lytton, E.

Saint Oswald, L.

Gainford, L.

Macleod of Borve, B.

Sandford, L.

George-Brown, L.

Merrivale, L.

Sandys, L.

Goschen, V.

Milverton, L.

Seear, B.

Gowrie, E.

Monck, V.

Selkirk, E.

Greenway, L.

Mowbray and Stourton, L. [Teller]

Somers, L.

Grimston of Westbury, L.

Stamp, L.

Hacking, L.

Moyne, L.

Strathcona and Mount Royal, L.

Hailsham of Saint Marylebone, L.

Northchurch, B.

Nugent of Guildford, L.

Strathspey, L.

Hanworth, V.

Oakshott, L.

Swansea, L.

Harvey of Tasburgh, L.

Peddie, L.

Terringon, L.

Hereford, V.

Platt, L.

Teviot, L.

Hornsby-Smith, B.

Polwarth, L.

Trefgarne, L.

Inglewood, L.

Rankeillour, L.

Vernon, L.

Killearn, L.

Reay, L.

Wade, L.

Lauderdale, E.

Redesdale, L.

Wakehurst, L.

Lindsey and Abingdon, E.

Reigate, L.

Waldegrave, E.

Lloyd of Kilgerran, L.

Robbins, L.

Young, B.

NOT-CONTENTS

Balogh, L.

Hale, L.

Melchett, L. [Teller]

Beswick, L.

Harris of Greenwich, L.

Milner of Leeds, L.

Birk, B.

Houghton of Sowerby, L.

Pannell, L.

Brockway, L.

Jacques, L. [Teller]

Shepherd, L. (L. Privy Seal)

Castle, L.

Janner, L.

Strabolgi, L.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Wells-Pestell, L.

Davies of Leek, L.

Lovell-Davis, L.

White, B.

Elwyn-Jones, L. (L. Chancellor)

McLeavy, L.

Winterbottom, L.

Fisher of Camden, L.

MacLeod of Fuinary, L.

Wynne-Jones, L.

Gordon-Walker, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
7.43 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 3:
Page 3, line 33, at end insert—
"(5) No Class 4 contribution shall be payable in respect of self-employed persons over pensionable age."
The noble Lord said: The object of this Amendment is to seek special concession from the Government in favour of those self-employed people over retirement age; that is, for men over 65 and women over 60. Many of these people are finding life pretty hard at the moment. They may well have saved throughout their lives only to find that their savings have been eroded by inflation, so that they are more or less forced to go on working beyond their normal retirement age. The Amendment suggests that to help them they might be relieved of the burden of paying Class 4 contributions of 8 per cent.—or, I suppose now, 5 per cent.—over the prescribed range of earnings.
There are several other instances where the Government have made concessions to the elderly, and only recently the Chancellor of the Exchequer put their exemption limit for investment income surcharge
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at £1,500 instead of the normal £1,000. Indeed, in Clause 1(2) the Bill itself contains a concession to those over pensionable age. This is a complicated subsection, but it is summed up in the Explanatory Memorandum which states:
"Subsection (2) provides that no primary Class 1 contributions shall be payable by retirement pensioners or by certain other persons over pensionable age".
Here is a valuable concession being made once again to employed persons. Why is it that if the employed earner is to be excused from paying Class 1 contributions on retirement in certain circumstances, no similar provision is made for the self-employed? Here, again, there seems to be discrimination against the self-employed. But, as the noble Lord has admitted, it is a complicated Bill. I may not have correctly understood the position, and I shall not press the Amendment; my object is to find out what is the real position. I beg to move.
Lord WADE: I want only to take the opportunity of asking a question. At column 11 of Hansard of 2nd December on the Second Reading debate, the noble Lord, Lord Wells-Pestell, said:
"Clause 1 also amends the 1973 Act so as to remove all contribution liability from retirement pensioners who go out to work, and I

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am sure that this has the approval of the whole House."—[OFFICIAL REPORT, 2/12/74; col. 11.]
Does that mean all retirement pensioners, whether they were self-employed or in some other category? I just wanted some elaboration of that sentence.
Lord WELLS-PESTELL: As I understand it, the purpose of this Amendment is to secure that self-employed people over pensionable age have no liability for Class 4 contributions. I think it would be fair to say that the Amendment is inconsistent with the contributions structure set up by the former Conservative Government under the Social Security Act 1973. The whole purpose of the Class 4 contribution established under that Act is to make the contribution arrangements for self-employed earners as close as possible to those of employed earners, and this is what I tried to say when we were discussing the previous Amendment. Although it is not possible to make contributions for the self-employed wholly earnings-related, as I accept they will be for the employed, the Bill goes a good way towards this by introducing the earnings-related Class 4 contribution.
This contribution ensures that the self-employed with higher earnings make a greater contribution towards the general cost of current benefits than those with lower earnings, as in the case with employed earners. Just as the liability of the employed earners under the new arrangement will continue beyond pensionable age if they do not require to retire, so will the self-employed persons' liability for contributions continue. There could be no justification for excepting the self-employed from paying Class 4 contributions without a corresponding reduction in the liability of employed earners for Class 1 contributions. So far as retirement pensioners are concerned, whether working as employed or self-employed, they will not be liable to pay contributions.
There is another factor. The loss of income to the National Insurance Fund which would result from the Amendment would, in isolation, be something like £1 million a year, and while the amount is comparatively small the point is that this Amendment could not be met in isolation. To do that would undermine the purpose of Class 4 contributions and
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would produce a situation which was grossly unfair to employed earners. If anything were done it would have to apply to the employed earners as well. If all people were relieved of liability for contributions on reaching pensionable age, even though they did not retire, the loss of income to the fund would be something like £18 million a year, and this loss would have to be made good by increasing the burden on those below pensionable age. In fairness, this would have to include the self-employed, and in view of the Opposition's comments about the amount of contributions which the self-employed will have to pay from next April, I cannot think that they would wish to take any action which might increase it. If I may just say this, the Amendment talks about people over pension age who have not retired.
Lord ABERDARE: I am grateful to the noble Lord, and I understood what he was telling me. There is only one more point about which I should like to ask him, and perhaps he would like to write to me later on it because it is a little complicated. Under Clause 1(2)(a) an employed person does not pay contributions if he is retired from regular employment, and that is also true of the self-employed. But, with employed persons, equally they do not pay contributions if they have not so retired but do not satisfy the contribution conditions for a Category A retirement pension on obtaining that age. This is a concession to the employed man. If his contributions do not entitle him to a Category A retirement pension when he reaches retirement age, he does not have to go on contributing. The question I should like to ask is: does this concession also apply to the self-employed person who has reached retirement age but who has not satisfied the contribution conditions for a full pension? However, I have said that I do not expect the noble Lord to answer me straightaway, and perhaps we could talk about it later.
Lord WELLS-PESTELL: If the noble Lord would allow me to look at Hansard, then perhaps I could write to him or see him in order to reply.
Lord ABERDARE: I am much obliged to the noble Lord. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.52 p.m.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Lord ABERDARE: Before the Question on Clause 1 is put, I think the noble Lord, Lord Janner, and I are on to the same point with regard to people who are employed and self-employed and are liable to pay contributions under Classes 1, 2 and 4. It seems rather extraordinary that a person who receives only the same benefits as he would from paying Class 1 payments should be expected to contribute under Classes 1, 2 and 4. I can understand that if he is not doing a whole-time job and is filling in part of his time as a self-employed person, then there could be a case for asking him to contribute under these three different categories. But there are cases—and I am quoting particularly from the Council of Engineering Institutions—where engineers are fully employed in academic posts, in universities and polytechnics, where they are paying a full Class 1 contribution, but where, at the same time, they do consultancy work, which is very valuable to industry and very valuable to them in keeping in touch with industry, where they are expected to pay Class 2 and Class 4 as well. This is a particular case —and I am sure the noble Lord, Lord Janner, may wish to say a little more about it—and it is something that is worrying the engineers.
Lord JANNER: I am obliged to the noble Lord for having raised this point. It has been brought to my notice as well, and I think that before we finish with Clause 1 I should like to ask my noble friend to deal with this matter. There is a large number of people, mostly in the professional field, who may find themselves obliged to pay not only Class 1 contributions but Class 2 contributions as well, in certain circumstances even Class 4 contributions in addition to that. As the noble Lord has said, this issue is causing particular concern to the Council of Engineering Institutions, which coordinates the activities of the leading institutions of professional engineers in this country, such as the Institutions of Civil Engineers, Technical Engineers, Chemical Engineers, Mechanical Engineers and so on, numbering 15 in all. They point out, for example, that many engineers hold academic posts in universities, as the noble Lord has said, or in polytechnics
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and so on, and in addition to their salaried employment at such places they are frequently involved as consultants or advisers in practical engineering projects.
This can obviously be of the greatest benefit to industry and to the universities, in so far as it keeps the academics in touch with up-to-date practice in their professions. It can be of particular value in the field of technical and technological education. The anxiety of the engineering institutions has not been in any way allayed—indeed, the contrary—by a paragraph in the leaflet entitled New Contribution System for the Self-Employed and Non-Employed, (NP 7), which reads as follows:
"If you have two jobs at the same time, one as an employee and the other in self-employment, then you will have to pay both Class 2 contributions and, as an employee, Class 1 contributions. However, if you pay more than a specified amount, the excess will generally be refunded. In certain circumstances, you may apply for liability for Class 2 and Class 4 contributions to be deferred until after the end of the tax year. Details will be available from local Social Security offices in September 1974".
Of course, this kind of leaflet which is sent out is not very easily understood, particularly by people who are not accustomed to reading or to following legislation.
There appears to be no assurance in this paragraph that there will necessarily be any refund of the double or treble contributions, and unless the Minister can give some such guarantee there is obviously much trouble ahead. It is unfair in any event, I believe the Minister will agree, that one professional engineer earning a certain sum of money a year as an employee and another as a consultant—that is, shall we say, £5,000 or £6,000 in all—should have to pay substantially more in contributions than a colleague earning the same amount solely as an employee or solely as a consultant. I should like my noble friend to explain the position and to let us know how this is going to work in practice.
Lord WADE: I, too, have received this letter. I will not repeat what has been said but I shall be interested to hear the answers to the questions which have been raised. The only point which has occurred to me is that I do not know the date of the leaflet attached to the letter,

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and that may possibly make some difference.
Lord WELLS-PESTELL: I am grateful to the noble Lord, Lord Aberdare, for mentioning this matter to me last night, and also to my noble friend Lord Janner, who did likewise. There is a leaflet—the noble Lord, Lord Wade, referred to it earlier today—NP 18, which refers to "Your contribution liability if you have more than one job". It sets out that, if you have more than one job and pay more than the prescribed amount of contributions for a year, you may obtain a refund; and then it sets out the ceiling of the contributions. Obviously, one cannot give a definite answer as to what the situation is in relation to people in that position generally. These matters have to be dealt with individually. It may well be that one person is employed almost whole-time, or whole-time, as a Class 1 contributor. He may be half and half; and these matters will have to be looked at individually. I would concede that perhaps the leaflet itself is not of very great help to people who are doing two or three jobs, because it has to be determined on the amount of time they spend in each job.
The only advice—and the best advice —I can give in the circumstances to people who find themselves in that situation, is that it would obviously be to their advantage, financial and otherwise, to go along to their local office of the Department and discuss their own position. The officers at local offices have been informed of this situation, and they are expecting people to put their own positions to them so that the level of contributions can be determined. If in any one year they do pay more, they can apply for a refund.
Lord ABERDARE: The only thing that is still unsatisfactory is the wording of the leaflet. When it says that if your contributions exceed a certain sum you may get a refund, it rather sounds as though you might not. I should have thought that if your contributions exceed a certain sum, you will get a refund.
Lord WELLS-PESTELL: With very great respect, the noble Lord will know that there are always exceptions, and I think it would be quite wrong in an official leaflet to say you "will" when
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at the time the leaflet was issued no-one could possibly know the individual circumstances of everybody to whom it would apply.
Lord ABERDARE: If the leaflet gives a ceiling, if it says there is a limit to the total contributions you need make, then if your contributions exceed that limit you certainly should get a refund, I should have thought.
Lord WELLS-PESTELL: If it goes out from your Lordships' House to everybody who is likely to be involved that they can get on-the-spot, expert help and advice in regard to their own position by going along to the local office of the Department of Health and Social Security, I think this would meet every situation.
Clause 1 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported with an Amendment.

FUEL AND ELECTRICITY (CONTROL) ACT 1973 (CONTINUATION) ORDER 1974
8.2 p.m.
Lord BALOGH Lord BALOGH rose to move, That the Fuel and Electricity (Control) Act 1973 (Continuation) Order 1974, laid before the House on 20th November, be approved. The noble Lord said: My Lords, before I move my Motion may I apologise for having unwittingly crossed before the Mace, because it had disappeared from my view. I do apologise, and I hope your Lordships will forgive me.
I am sure that noble Lords on both sides of the House will agree that this Order represents a cautious and therefore wise precaution, and will support it in that spirit. During the debates on the Bill last year, both Parties recognised that it contained powers that would be useful in dealing with the longer term situation. Powers were taken in the first instance for a year; and, to quote the noble Lord, Lord Drumalbyn (whom, to my loss, I do not see here at the moment) in the Second Reading debate almost exactly a year ago, he said:
"I am sure your Lordships will agree that they are sensible weapons to have in our

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armoury now and in the future, to deal with temporary energy difficulties."
The rest is history and I will spare the House yet another of my not very well received analyses of the then position which is vividly etched in all our minds. Rather, I think it would be more helpful to the House for me to review developments since 1974 in the energy sector and to indicate future prospects. It has been a period of great activity. A number of important decisions have been taken, but there can be no question of resting on our laurels, if any. The major aims of the Government's strategy so far have been, first, developing our indigenous resources; secondly, turning the country's attention to energy use as well as supply; thirdly, giving proper weight to scientific research and development; and, fourthly, pursuing international cooperation, by making sure that our sovereignty over our resources is not impugned.
I will now go through the various sectors of the energy situation. We have had the interim and final reports of the coal industry examination. We are setting out to reverse the decline in the last 15 years, which is a formidable task. We have endorsed the plan for coal which should enable the NCB to stabilise deep-mined output at around 120 million tons. This may not be attained this year. Short-term fluctuation in oil prices will not influence our investment decisions on coal, but coal must remain competitive in the light of long-term trends. There is an unparalleled opportunity for the industry with its future now virtually assured. It is up to all concerned in the industry to ensure that this opportunity is not lost and that the plan for coal is really realised.
My Lords, I now turn to nuclear power. We have taken the long awaited decision on reactor choice and published our White Paper in July. The issues were difficult, but we believe the decision we took was the right one. The SCHWR has substantial advantages. It should provide power reliably and give particular scope for British technology while meeting the test of public acceptability. It is essential that public confidence in nuclear power should be maintained. It is obviously sensible to start with a
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relatively modest initial programme, not more than 4,000 mw over the next four years. So far as North Sea gas is concerned, this is very much a success story, as the House will know. The facts speak for themselves. Eleven million out of 13 million gas consumers are now using natural gas directly. There are proved and probable reserves of about 35 million million cubic feet, worth at today's oil prices about £30,000 million, and sufficient to support a production of 5,000 million cubic feet a day towards the end of the decade, and production might increase to 6,000 million cubic feet a day. That is twice the amount we had in 1972 if the Norwegian Frigg gas is included. A great deal has been achieved and the future looks good.
My Lords, we now come to North Sea oil. The picture here is constantly changing—five new discoveries have been made since the Brown Book was issued and twelve fields are now considered commercial. Proved and probable reserves from these fields are now increased to 1,160 million tons—at today's prices worth around £40,000 million. A great deal more exploration will take place and we are confident that huge quantities will still be discovered. Oil production in 1980, allowing for future discoveries could be between 100 and 140 million tons. There is a good chance that in 1980 we shall be producing all the oil we need. Such a miracle would have seemed unthinkable even a few years ago. With regard to the White Paper on the North Sea, noble Lords will be familiar with our proposals, so I do not need to go over them again. The necessary legislation will come forward this Session. I would stress that we regard it as an entirely reasonable, comprehensive package, which will establish a firm base on which oil companies can plan their future investment in the knowledge that we shall be providing a fair deal for them as well as for the nation, which will leave them with ample material incentive.
I am able, therefore, to report substantial progress in the energy sector. But there is still a great deal to do. We believe that we now have the country's energy strategy on the right lines. But we have to remember that we are only at the beginning of a period of change and that many of the risks still remain.
Let me consider those risks. I shall consider the present outlook briefly. First there is the coal industry. As my right honourable friend the Secretary of State for Energy said on 25th November in another place:
"I want to be frank with the House. I think that it will be extremely difficult for the NUM and the NCB, even now, to get 120 million tons, but I still think that coal stocks and our electricity system are secure this winter. Assuming that even without any productivity scheme, normal supplies come through this winter, our electricity system will be secure".
I would remind the House that the National Union of Mineworkers have fully pledged their determination to achieve the best possible performance and we still think that coal stocks and our electricity system are secure this winter, given normal levels of working in the industries.
The current international oil situation appears to be satisfactory from the supply point of view, though, as we all know from last winter, there can never be complete certainty as long as we are dependent on foreign oil. As noble Lords will appreciate, the main problem is that of oil prices. The Chancellor of the Exchequer and the Chancellor of the Duchy of Lancaster are busy dealing with the consequential difficult financial problems. Of the other fuels, nuclear power provides a further measure of diversification, and thus security, to our supplies: but the amount we can have available is of course limited until the policies put in hand by the Government come to fruition —and the time-scales for this are inevitably long. Gas continues to provide a valuable and secure source of energy, though it could not of course totally replace any of the other fuels if their supply were for some reason to be interrupted. To sum up, we cannot afford to be complacent and it would be foolish to assume that difficulties cannot arise but, as I have said, we believe that with normal supplies our energy demands will be secure this winter.
I now return to the Order before the House, which seeks continuation of the Fuel and Electricity (Control) Act of 1973. The Act contains flexible and wide ranging powers. These powers have been used both for crisis management—by the last Government in the winter of 1973–74 —and for specific measures concerned with the continuing management of our
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energy resources. It is this latter use of the Act that is the immediate occasion for bringing forward the Order now, so that the powers in the Act can continue to be used instead of lapsing, as they otherwise would have done, on 30th November. The Order extends for a period of one year, to 30th November 1975, the powers contained in Sections 1 to 8 of the Act. These powers enable control to be exercised over petroleum and its products, over any other substances used as fuel, and over electricity. Thus the powers extend to coal and gas as well as to electricity and oil.
The powers in the Act are currently being used to relieve the British Gas Corporation from its statutory obligations under the 1972 Gas Act to meet demands for large new or additional supplies. The need to provide this relief arises from the change in the world energy situation in the last year or so. The attractiveness of gas has greatly increased—particularly for commercial and industrial use. It became obvious early this year that if the Corporation had to meet in full every request for large new and additional gas supplies which fell within the terms of their statutory obligations this would endanger the continuing security of supply to other users in the winters preceding the arrival of the Frigg gas and afterwards of Brent. Authority under Section 4 of the Fuel and Electricity (Control) Act to disregard this statutory obligation as respects new or additional supplies exceeding 25,000 therms per annum was therefore given to the Corporation on 25th March 1974. With this relief, the gas supply position in the coming winters should be secure. Without it, the continued pressure of demand could place the supply in jeopardy; and no other powers are at present available to maintain the relief from the statutory obligation of the Gas Board.
The Act includes powers to regulate oil product prices. It is clearly essential that these powers are continued in the face of the continuing uncertainty over security of world supplies from the Middle East and the increasing frequency of demands by oil producers for higher prices of crude oil. At present, the powers are only exercised over the maximum retail prices of petrol, derv and paraffin. These controls were introduced during the difficult supply situation last December, and we

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are, of course, keeping them under continuing review so that we do not maintain them longer than is necessary.
It is further intended to use the powers of the 1973 Act to give directions to oil companies restricting disposal of oil stocks in order to implement our international obligations to hold minimum stock levels. The United Kingdom is obliged under the International Energy Programme and an EEC Directive to hold certain minimum stocks of oil. Because of the continuing uncertainty in the Middle East, such stocks are an essential part of our security of supply. With the huge increases in the price of oil, we can no longer rely on companies voluntarily holding high stocks. Therefore, in order to ensure that the United Kingdom has sufficient security this winter, directions will need to be given very soon to each supplying company ordering it to hold minimum stocks of oil. At present, the only powers under which companies can be directed to hold stocks are those in Section 2 of the Fuel and Electricity (Control) Act which, but for this Order, would now expire. Indeed, my Lords, no other suitable powers exist at the present time under which we can continue with any of the three measures I have described. This is accordingly the first reason for continuing the operative provisions of the Act in force. Consideration is, however, being given by the Government to taking alternative powers under other legislation which would enable us in due course to dispense with the use of the 1973 Act for these particular purposes. Continuing the Act in force will of course also provide powers to introduce any emergency measures that might be necessary should the normal flow of energy supplies be interrupted during the coming 12 months. But that is not the Government's prime purpose in laying this Order. If it were, we could simply have left the Act in abeyance. I therefore hasten to reassure noble Lords that there is, on the part of the Government, no present expectation of difficulties. Should such a need arise, I expect that my right honourable friend would seek to make a Statement to Parliament before the powers in the Act were so used or, if the need were immediate, at the very earliest possible opportunity afterwards. My Lords, I
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commend this Order to you, as I said at the beginning, as a cautious and therefor wise precaution, and I ask for your support in that spirit.
Moved, That the Fuel and Electricity (Control) Act 1973 (Continuation) Order 1974, laid before the House on 20th November, be approved.—(Lord Balogh.)
Lord LYELL: My Lords, I believe that we on this side of the House should thank the noble Lord, the Minister, for his very full explanation of the energy situation as it stands at this point, and I think in general we would seek to assure him that he can count on our support in continuing this Order. Nevertheless, there are three or four brief points we seek to bring to his attention. The first point on which I would ask for clarification refers to coal stocks. From information we have gleaned of the overall situation, it appears that coal stocks, not merely at the pit head but at various National Coal Board storage depots, as well as in private industrial stores and at power stations, are considerably below the figures for last year—in some cases by as much as 30 per cent. We also noted with a tinge of regret the Statement in another place that the National Coal Board is not likely to achieve its targeted output of 120 million tons during the year 1974–75. Be that as it may, we can only hope that the coming winter will not be too severe and that the existing stocks will see us through.
One more small question hangs over the problem of petroleum supplies. As a result of the Budget last month, there was a very steep increase in the value-added tax applied to petroleum. I understand this tax has to be paid on delivery by both wholesalers and retail garages. This additional tax represents the cost of the sale and thus the retailer has had to meet considerably increased costs. For this reason he will require an increased margin but, as your Lordships will be aware, the margins are fixed on a cash basis and are not allowed to rise as a percentage. This has led to serious liquidity problems and to difficulties in remote, outlying areas all over the country. Perhaps the noble Lord would be kind enough to clear up these points. Also in the Budget Statement was a promise that we might look forward to a very definite Statement on energy conservation from the Department of Energy.

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I understand that had been promised by the end of November. We are five days beyond that now, but I hope that we can look forward to this Statement before rising for the Recess.
Finally, North Sea gas, as the noble Lord pointed out, is in very considerable demand and we would seek clarification from the noble Lord that this Order does not relieve the Gas Corporation from the obligation which I understand they had until November, 1973, of attempting to meet the demand and being virtually obliged to supply gas to any consumer seeking to use it. We would hope that this Order will not be used to damp down the supply of gas and reduce demand too much. In conclusion, we would seek to add our support to the measures to conserve energy at this somewhat critical period.
Lord WYNNE-JONES: My Lords, I should like to ask my noble friend the Minister whether I understood him correctly when lie referred to, I think, the EEC Directive with regard to keeping stocks in this country. I had understood that this Directive was at the moment a draft Directive. I wonder whether there is another Directive which has become operative? Because it would seem to be a serious matter if we were already being governed by a Directive which, as I understand it, is still in the draft stage.
8.26 p.m.
Lord BALOGH: My Lords, may I thank the noble Lord opposite for his helpful and kind remarks and constructive questions. I should also like to congratulate him on speaking for the first time from the Front Bench. So far as coal is concerned, the undistributed coal stocks held by the National Coal Board-currently amounting to just over 6 million tons—are, roughly speaking, half of what they were a year ago; but they are low because the Board have been endeavouring since the Strike to get all available supplies into the hands of consumers.
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They have been successful in rebuilding distributed stocks to normal levels. Stocks at power stations—now about 13½ million tons—represent some eight weeks' normal winter demand and correspond to the early winter stock-holding in normal years. Preceding the three crisis winters of the previous Administration, abnormally high stocks were built up in readiness for industrial conflict in the energy industries, with the results which we have seen.
So far as the value-added tax is concerned, I have noted the noble Lord's question. It is not entirely within my field and perhaps he will allow me to communicate with him on this matter in writing. So far as energy conservation is concerned, I understand it has been announced in another place that at an early date a Statement will be made in both Houses. I hope the noble Lord will bear with patience until that time.
The gas situation is an extraordinarily complicated and interesting one. It originates in our very great success in obtaining North Sea gas at very low prices, so that the price of gas as a result, relative to other prime costs, was rather low. As recent Governments from both Parties have used these prices to stabilise and diminish inflationary pressure for the moment, the relative price of gas is still very low. As a result of that, there has been a concentration of rather large-scale demand on the gas industry. If the Order were not adopted we might face the danger of the Gas Corporation being sued by large-scale consumers throughout the country, thereby causing great difficulties and probably a failure of gas for those already on the grid. We must hope, of course, that this will not be continued indefinitely; and although there has been some delay in the Frigg plans I think that when Frigg ends and other gas fields in the North Sea come in, we shall have a unique situation in which we shall have a relatively plentiful supply.