Lords Sitting of 18 March 1975

Preamble
The House met at half past two of the clock: The Lord CHANCELLOR on the Woolsack.
Prayers-Read by the Lord Bishop of Saint Albans.
The Lord Kennet—Took the Oath.

NORTH SEA OIL: TAX RELIEF
The Earl of LAUDERDALE: 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 amending their petroleum revenue tax proposals to enable producers in the smaller fields to accumulate over several years the right to exemption on the first million tons of crude oil produced each year.
The MINISTER of STATE, DEPARTMENT of ENERGY (Lord Balogh): No, my Lords. The relief to which the noble Earl, Lord Lauderdale, has referred is only one element in the Government's proposals which are designed primarily to assist marginal fields in the North Sea. There is no liability to PRT until the capital expenditure, plus 75 per cent, uplift—that is to say, one and three quarter times the capital cost of the field—has been recovered. Liability is then offset or reduced by the oil allowance for each six monthly period. Where the oil allowance is not wholly used, no PRT liability arises, and it would be unjustifiable to carry it forward from the periods when no PRT can have been paid.
The Earl of LAUDERDALE: My Lords, in thanking the noble Lord for that reply and wishing that I could praise him for flexibility whereas I must regret his inflexibility, may I ask him whether he would not agree that there is a certain slump in offshore oil exploration all over the world, as witnessed by the fall by about 25 per cent. since last autumn in day charter rates for semi-submersible rigs? Is he not aware that several of
600
the major oil companies involved in the North Sea have raised this matter with great anxiety and apprehension, as it is damaging their prospects of successful exploitation of smaller fields?
Lord BALOGH: My Lords, I think the noble Earl is under a misapprehension. No taxes need be paid on marginal fields to the extent to which the exemptions apply. It is not really an arguable point that fields have been discouraged by the Government's proposals for PRT. If the noble Earl tables a Question about rigs, I shall answer it. But I should have expected the cost of rigs to go down, because at last many new rigs are coming into service. Unfortunately, there are now bottlenecks, apart from the number of rigs in existence, which regulate supply and demand in the offshore industry.
The Earl of LAUDERDALE: My Lords, while thanking the noble Lord for that reply, may I ask him this question? Without wishing to press him unduly—and as he knows I never do press him unduly—would he not admit that there might be cases in smaller fields, perhaps with reserves of 200 to 300 million barrels only, where the possibility of rolling up and carrying forward this six monthly allowance of half a million tons of tax-free oil would make a considerable difference to the margin of profitability and would, therefore, provide a greater incentive for further exploration?
Lord BALOGH: My Lords, I must ask the noble Earl to wait until our next duel takes place, perhaps over the petroleum tax Bill, which, I think, will be in the very near future. When we see the eventual text as it emerges from the Commons, perhaps we can then state our views both privately and publicly. This is a very technical question and I crave the noble Earl's indulgence.
Lord WYNNE-JONES: My Lords, does not my noble friend feel that perhaps Her Majesty's Government have gone too far by being excessively generous towards these smaller companies? Does he not agree that the terms which have been offered to them amount to virtual exemption from taxation unless they make a handsome profit?
Lord BALOGH: My Lords, I thank my noble friend for that question. Of

601
course there are exemptions, but I cannot say that they are too generous, because it is a very risky venture and this risk has to be recognised. That is the object of the 75 per cent, uplift and the exemption limit. All these proposals, as I have said, will have to be looked at on the basis of the Bill as it emerges from the Commons, and my noble friend will see that these are concessions from a very high level of taxation. The taxation will amount to something like 70 per cent, of the total profits for fields which are successful. Obviously the tax on those fields which are not successful—or are only marginally successful—will be correspondingly lower ; but I think I can defend that point in any assembly the noble Lord cares to name.
Lord STRATHCONA and MOUNT ROYAL: My Lords, can the noble Lord tell us how a field will be defined for this purpose? Will it be based on a geological judgment, and will the final arbitration on this be left to an independent geological body rather than to either the Ministry or the Inland Revenue?
Lord BALOGH: My Lords, I thank the noble Lord, Lord Strathcona and Mount Royal, for that question. The intention is that this should be done field by field on a geological basis. However, the noble Lord might wish to wait until the petroleum Bill is published. That Bill will deal with all these matters in great detail. We hope it will be published before Easter, but since it is a very complicated matter, it is possible that it will not be ready until just after Easter.

STATE RETIREMENT PENSIONS
2.45 p.m.
Baroness BURTON of COVENTRY: 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, as State retirement pensions are not taxed in New Zealand, Finland and the United States of America, they would be prepared to consider a similar taxation concession in this country.
Lord JACQUES: My Lords, tax exemption for State retirement pensions is not common practice. The three countries named in the Question are exceptions. My right honourable friend does not consider it the best way of helping the elderly. Straightforward increases in pension and a tax allowance for those over 65 years of age with incomes of £3,000 per annum or less are more effective ways of helping those in need.
Baroness BURTON of COVENTRY: My Lords, is my noble friend the Minister aware that we might define a little more widely than he does the description of those in need? Is he aware that it seems unfortunate that we are unable to think of some way of helping those who have put by a little for their old age, and who are now having those savings taken away from them when they exceed that ceiling? Could not the noble Lord look again at that aspect of the matter?
Lord JACQUES: My Lords, I must point out to my noble friend Lady Burton of Coventry the effect of what she is advocating in her original Question. What she is advocating really means the greater the income the greater the relief, and the smaller the income the smaller the relief. That is inconsistent with the policy of this Government.
Lord DAVIES of LEEK: My Lords, is my noble friend aware that, as usual, his reply is precise, it is pungent, but it is also pregnant with alternative possibilities?
A Noble Baroness: How can it be pregnant?
Lord DAVIES of LEEK: My Lords, a question can be pregnant because something alive may come out of it. Therefore, I ask my noble friend whether he considers that giving supplementary benefits to pensioners who have paid income tax may sometimes be more expensive to the Government than giving more allowances in income tax to these people? Would the noble Lord be kind enough, with his kindly heart, to look at the matter in a little more depth, and give a reply in more depth to the Question of my noble friend Lady Burton of Coventry?
Lord JACQUES: My Lords, when a Budget is due in April it would be quite wrong to begin speculating on alternatives in March.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, would not all this trouble be avoided if the Government would look again at the tax credit scheme, without prejudice, and without partisanship?
Lord DAVIES of LEEK: My Lords, we are not joining in that!
Lord JACQUES: My Lords, that is a matter of opinion.
Lord SHINWELL: My Lords, why does my noble friend assert that he knows what is best for the elderly? Is he a better judge of what is best for the elderly; or should he not leave it to the independent judgment of the elderly themselves?
Lord JACQUES: My Lords, if this were left to the elderly themselves, they would pay no tax at all.
Baroness WARD of NORTH TYNESIDE: My Lords, in view of the fact, as I understand it, that the Government want ideas for the Budget, and that something could be done if the Government were so minded, would the noble Lord consider this as one of those ideas? Could my noble friend say that this matter will be looked at, and an answer as to why it is not being done given in the Budget Statement?
Lord JACQUES: My Lords, I cannot possibly give an undertaking of that kind.
Baroness BURTON of COVENTRY: My lords, may I ask the noble Lord the Minister whether he realises that a good many of us on all sides of the House are rather disturbed at this aspect? Is he aware that no one questions the consideration of the Government for pensioners? Alternatively, I think no one questions the consideration of the Government for high wage-earners. Does the noble Lord realise that in between these two categories there is a category of people who have saved, who are now over retirement age, and who really do pay excessive taxation once the ceiling of £3,000, which is not enormous today, is exceeded?
Lord JACQUES: My Lords, while £ 3,000 is not enormous, when one is considering helping the needy it is obviously quite substantial.
Lord AVEBURY: My Lords, is the noble Lord the Minister aware that this is an extremely odd proposal to come from the Benches behind him, and one with which we personally cannot sympathise? If any money is available for pensioners, it should be used by the right honourable gentleman the Chancellor of the Exchequer to increase the basic rate to help those in greatest need, and not those who already have money.
Lord JACQUES: My Lords, I thank the noble Lord for his question.
Lord DAVIES of LEEK: My Lords, that was the purpose of mine, too.

COMMONWEALTH: FOOD AND RURAL DEVELOPMENT
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the Commonwealth Conference on Food Production and Rural Development.
Baroness LLEWELLYN-DAVIES of HASTOE: My Lords, the Common-wealth Ministerial meeting took place in London from the 4th to 12th March, under the chairmanship of my right honourable friend the Minister of Overseas Development. I think the best way fully to answer my noble friend Lord Brockway, is to arrange for a copy of the Report to be placed in the Library of the House.
Lord BROCKWAY: My Lords, may I ask my noble friend the Minister whether she is aware that those of us who have seen this Report regard it as one of quite remarkable achievement for which a great tribute should be paid to the Minister of Overseas Development? Is it not a fact that the general public, and even most Members of Parliament, are completely unaware of the decisions made at this Conference; and would the Government look for some way in which they could be made known to the public other than the proposal she has made of laying the Report in the Library of the House?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, of course I cannot speak for Members of Parliament, but I should think it unlikely that they are totally ignorant of this extremely important Conference. I should like to thank my noble friend for what he said about my right honourable friend and to echo it. I think this was an extremely important Conference, principally because the best result which came out of it was the declared intention of both developing and developed countries that a much higher priority should go towards improving development in the rural communities. I should welcome very much any assistance from my noble friend and any other noble Lords in getting greater publicity, but as your Lordships know, sadly, nothing which we do here gets much publicity.
Earl COWLEY: My Lords, as the noble Baroness has mentioned the importance of rural development, could she say to what extent the Government feel that Intermediate Technology can play a part in this process?
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I think Intermediate Technology is an extremely interesting subject. It is complex and although its application, as the noble Earl will know, is often rather chancey, I should like to give it all the encouragement I can.
Baroness EMMET of AMBERLEY: My Lords, is the Minister's reply an encouragement to my debate on fish farming on 9th April?
Baroness LLEWELYN-DAVIES of HASTOE: Yes, my Lords. I am delighted the noble Baroness asked her question, because I was going to say, if anybody asked me, that she would be glad to hear that "food production" includes fisheries.

BANGUI CONFERENCE: LOMÉ CONVENTION
2.52 p.m.
Lord MERRIVALE: 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, bearing in mind the ACP/EEC Lomé Convention and the desirability of Euro-African co-operation, what conclusions can be drawn from the recent Summit Conference at Bangui in so far as this country is concerned as a co-signatory to the Agreement, and whether they will make a Statement.
The PARLIAMENTARY UNDER-SECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the conference at Bangui on 7th March was essentially a Francophone affair, at which Her Majesty's Government were not invited to be represented. As a signatory of the Lomé Convention Her Majesty's Government welcome those passages in the final communiqué which affirm the need for discussion and solidarity between developed and developing countries.
Lord MERRIVALE: My Lords, while thanking the Minister for his Answer, I should like to ask him whether Her Majesty's Government are satisfied that the French are not endeavouring to build up or consolidate a closed shop sort of political association with Francophone Africa, bearing in mind, too, the decision taken at Bangui that these discussions should be yearly? Secondly, would not the Minister agree that if we are to keep to the spirit and the letter of the Lomé Convention we should seek development of our relationships with and knowledge of Francophone Africa, not only economically but also culturally?
Lord GORONWY-ROBERTS: My Lords, at a Press conference at the end of the Bangui Conference the French President made it absolutely clear that the objective of the French Government was not to seek to create a zone of influence. On the second point, I can give an unqualified affirmative answer.
Lord BROCKWAY: My Lords, is it not the fact that the representatives of

607
the ex-French Colonies have taken the initiative to secure co-operation with other colonies in Africa which were under other régimes and it is on their initiative that a united conference has been held to make proposals in regard to this subject?
Lord GORONWY ROBERTS: My Lords, that is substantially so and indeed the response from our own partners in the Commonwealth, of English-speaking African States, was equally strong and marker. We must not, however, minimise the role which this country has played at Kingston and at Lomé in making it possible for the association of both Francophone and English-speaking States in Africa to play a part in relation to the EEC, which will lead to greater exchange of expertise and trade between the EEC and the whole of Africa, including the Francophone and the English-speaking States.
Lord GLADWYN: My Lords, would not the noble Lord agree that it is no more surprising for the members of the old French community to meet together occasionally than it is for the British Commonwealth countries to meet together occasionally?
Lord GORONWY-ROBERTS: Not at all. Indeed, I see that the Bangui Conference decided that there should be annual meetings of the Francophone African States with France, very much as we increasingly arrange meetings between Commonwealth countries, both in New York and in other locales.
Lord SLATER: My Lords, could my noble friend tell us the main reason why no invitation was made to Her Majesty's Government to attend this particular conference which has raised so many questions, one from the Liberal Benches and one from the Conservative Benches?
Lord GORONWY-ROBERTS: My Lords, I welcome that question which, as usual from my noble friend, has real point to it. I am quite sure that there was no particular reason for this except that the traditional relationship of the French Republic with the former Colonies, now the successor Francophone States indicated periodic meetings to discuss common questions, very much as we have with our own former colonies in the Commonwealth. But I can assure
608
my noble friend that we in no way discern in the lack of invitation to us to attend the Bangui Conference any kind of animus or discrimination.
Lord MERRIVALE: My Lords, following the previous question which was put to the Minister, would he not agree, though, that we should be concerned or involved to a greater extent with discussions of this kind? The main problems that were discussed at Bangui were economic and financial and were concerned principally with energy and raw materials, certainly subjects in which we too are involved and interested.
Lord GORONWY-ROBERTS: My Lords, I think the noble Lord's suggestion is included in the new arrangement whereby the EEC will now have discussions with all successor States which are in a difficult position in regard to their exports. It is a new departure, and one of the positive results of the EEC is that both Francophone and English-speaking countries in Africa will now deal jointly with EEC. From this I expect there will be great advantages, both to Europe and to Africa. There will be an export of European expertise to these countries. There will also be an expansion of trade, because certain aspects of the Lomé Convention, as the noble Lord knows, are preferential.

GOVERNMENT STATEMENT
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will repeat a Statement on the European Community.
QUEEN'S ROAD BRIGHTON BURIAL GROUND BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
JAMES HUGH MAXWELL (NATURALISATION) BILL [H.L.]
Read 2a, and ordered that any Petition praying to be heard against the Bill be deposited not later than Tuesday, 8th April next.

PIER AND HARBOUR PROVISIONAL ORDER (FISHGUARD AND GOOD-WICK HARBOUR) BILL
Lord MELCHETT: My Lords, I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Recommitment be discharged.
Moved, That the Order of Recommitment be discharged—(Lord Melchett)
On Question, Motion agreed to.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution), Bill read 3a, and passed.

NURSING HOMES BILL [H.L.]
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a second time. It is a pure consolidation Bill. It consolidates the Nursing Homes Act 1963 and the relevant provisions of the Public Health Act 1936, the Mental Health Act 1959 and the National Health Service Reorganisation Act 1973. The Bill will be referred to the Joint Committee in the usual way. My Lords, I beg to move.
On Question, Bill read 2a and referred to the Joint Committee on Consolidation Bills.

UNSOLICITED GOODS AND SERVICES (AMENDMENT) BILL
Read 3a, and passed.

HOUSING RENTS AND SUBSIDIES (SCOTLAND) BILL
3.3 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
House in Committee accordingly.
[The Earl of Listowel in the Chair.]
Clause 1 [New system of rents for public sector housing]:
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 1:
Page 1, line 6, leave out subsection (1).
The noble Lord said: Subsection (1) would repeal five sections of the 1972 Scottish Housing Act concerning rents in the public sector. My object in moving this Amendment is to show that this is unnecessary and, indeed, a retrograde step, and this will probably be the main debate today at the Committee stage. The principle of those five sections of our 1972 Act is being retained. That principle, I would remind your Lordships, is quite different from the one in the 1972 Housing Act for England and Wales. Much of the substance of those five sections is retained and reintroduced in Clauses 1 and 2 of this Bill.
Both the noble Lord and his noble friends opposite are in favour of the principle which we established in Scotland in 1972 of councils balancing their housing revenue accounts. For example, in Section 28(2) of our Scottish Act of 1972 we specifically provided for rents to be reduced if that were needed to obtain a balance, and that is similar to subsection (5) of Clause 1 in this Bill, which asks local authorities not to provide for surpluses. But what is lacking is any provision in this Bill to assist local authorities in doing what is necessary in carrying out the principles to which both sides of your Lordships' House agreed. There is nothing to guarantee fairness to all tenants in different areas, and also to the ratepayers who otherwise have to make up most of the deficits.
We know that some councils in Scotland will follow the principle in this Bill and the principle which was in our 1972 Act. Some of them have been doing it, and were doing it before the 1972 Act, but we also know that there are others who are unlikely to do so. I know that local authorities in Scotland are to change in May of this year, and in two months' time there will be a different set of authorities—a year after the change in England and Wales. But the housing authorities in some areas are covering much the same ground as before, and it is in the areas where in the past we have

611
found differences in approach that there will be a temptation for some councils to leave rents very low—much lower than in England and Wales, incidentally—despite the rebate schemes which were brought in by our 1972 Act, which is where the unfairness to other tenants and to ratepayers arises.
The 1972 Act was fair to all tenants, because the average standard rents could not rise by more than a gradual step each year—namely, £26—while on the way to balancing the revenue accounts. What the Government are doing in this Bill is simply repealing five sections of the 1972 Act, but at the same time reintroducing their substance in the vaguest terms, leaving it to chance whether it is carried out. The only purpose can be to continue the charade based upon mythology fabricated about the 1972 Act.
At that time I met many families in Scotland who had been alarmed by the false scare stories that their rents were to be increased steeply, when in fact their rents were to be reduced under the rebate scheme which the Act introduced. In every case, when I followed up those stories they were traced to the false descriptions of the 1972 Act— the mythology being deliberately circulated. But the clearest proof of this came only the other day from the lips of a Minister of State at the Scottish Office. Unlike the Housing Act for England and Wales, the Scottish Act made no provision for housing commissioners in case of default. There is no system of such commissioners in Scotland, but on 20th January 1975 in another place, at column 1181 of the Official Report, the other Minister of State, Mr. Millan, said:
"Many local authorities believed that if they did not carry out the provisions of the Act, … the Secretary of State for Scotland would send in a local commissoner. But the then Secretary of State"—
that was myself—
"funked that. We did not have any commissioners in Scotland "—
the Minister continued—
"although that action was open to him."
It seems incredible that the Minister should have exhibited his ignorance of the Act in that way. Again, he was presumably referring to the mythology about the Act, and so has himself been deceived by propaganda which obscured the facts. But in that event he has made
612
my case for me. Many local authorities, he said, believed that commissioners would be sent in. If any local authorities in Scotland believed that, it could only be because of the propaganda which was being circulated. There was nothing in the Act about it and there is no such system in Scotland. If he believes that the Scottish Act provided for commissioners, what else does he think is in the 1972 Act? Your Lordships will notice that he has also accused me of "funking", because I did not adopt a system which did not exist, and I think that all the Parliamentary conventions require that he should take the earliest opportunity of withdrawing his remarks.
The choice before me at the time—I think your Lordships should know this —was either to let the issues go to the courts in Scotland, or to arrange for the Scottish Office to take over the housing functions from the local councils concerned which were in default. The latter course would surely have been labelled as confrontation by the Labour Party, if the Scottish Office had tried to take over the functions from a council. The first of these courses was pursued with the result that every council in Scotland eventually carried out the Scottish Housing Act. One result also was that many tenants who had been paying rent found that they were no longer required to pay any rent at all, owing to the rebate scheme in the Act and their personal circumstances.
I completely absolve the noble Lord, Lord Hughes, from any of this. He him self has not been guilty of any errors or, if I may say so, discourtesy. I do not think that anybody can say that I am oversensitive about criticism—one has to possess a thick skin to have been Secretary of State for Scotland for any time. But I think that unless it is put right this is a way in which another false myth can be created. The noble Lord, Lord Hughes, like most people in Scotland who are more concerned about housing than about political tactics—and I believe that he is—must know that this is a retrograde step. Perhaps only his diary records his real sensible views on this.
Of course we now have access to the diary of the late Dick Crossman, and he was saying in 1966:
"Of course I am in favour of putting up the rents of tenants who can afford to pay and

613
using the money for rent rebate, but it is not a popular view in the Labour Party."
That was from the Minister who was then responsible for this matter in England and Wales. Of course, his personal view went further than what we carried out in Scotland, because the subsidies covered about 90 per cent, of the rebate scheme. It was not the other tenants who were financing the rebate scheme; the greater part of it was done by the Exchequer. In 1972, many English Labour Members of Parliament expressed approval of this system in the Scottish Act and tried to change the Act for England and Wales so that it had the same system; argument developed between them and the Scottish Labour Members about this. Again, I am afraid that the Scottish Members were at that time more involved with the mythology than with the facts.
For all these reasons, we must regard the attempt to repeal these five sections as continuing what I would call this "charade", because the 1972 Act has been condemned by certain people and painted in colours which are quite unrecognisable if one reads it. That part of it concerning public sector rents now has to be repealed but the principle of it, and quite long chunks of it, are being re-enacted here in Clauses 1 and 2, quite unnecessarily taking up the time of Parliament. We would suggest to the noble Lord and his colleagues that this is a retrograde step and that it would have been much better to leave the sections in the 1972 Act. I beg to move.
3.14 p.m.
Lord HUGHES: I can well under-stand the reasons why the noble Lord, Lord Campbell of Croy, found it desirable to put down this Amendment. I can also understand the very strong defence which he has put up of the provisions of the 1972 Act . I do not know whether he was regarding it as a matter of compliment to Her Majesty's Government, or as a matter of criticism, that we are retaining sections of the 1972 Act. I can assure him that we have gone through the 1972 Act with a powerful microscope so that we could preserve those parts of it which were good. As I have said on more than one occasion, it is almost beyond the wit of man to produce an Act of Parliament which is wholly wrong. The 1972 Act is in the same category as
614
almost any other, and in fact I have put down an Amendment for a later stage in the proceedings, the effect of which is to restore a part which was previously being omitted, because on second thoughts we found it better to revert to the previous position.
I regard it as perfectly reasonable that a former Secretary of State for Scotland should find it necessary and desirable to defend the provisions of a previous Act of Parliament for which he was largely responsible. I would say in passing that if, from the Government's point of view, one had to choose the lesser of two evils, in the method to be selected in Scotland of getting towards a balanced housing revenue account rather than a profit-earning revenue account—which was the principle adopted on this side of the Border—he showed better wisdom than his colleagues in the Government who were responsible for English affairs. From our point of view, it was merely a choice between evils.
As I said, I regard it as reasonable that he should find it necessary to defend the attitude that he has taken, particularly because of the way in which he differed from the English Act. But I do not find it necessary to repeat the reason why we are against the 1972 Act, and why these changes have been made. After all, what is the best way of doing it is a matter of opinion. No amount of talk from the noble Lord will persuade me that his method was the better one, and no amount of counter-talk from my-self will persuade him that he was wrong and that ours is the better one. So with one exception I would prefer to let the matter rest there. I was not aware of the fact that the noble Lord intended to quote what my honourable friend the Minister of State said in relation to the 1972 Act, and without having had the opportunity of referring to what was said, and to the context in which it was said, I can neither defend nor criticise what my honourable friend said.
If I heard rightly what the noble Lord, Lord Campbell of Croy, said, I think perhaps there is a certain element of confusion. He quoted my honourable friend as saying that local authorities thought that certain things were going to be done, that commissioners were going to be introduced and that the then Secretary of State, who was the noble Lord,

615
had funked the issue. It is perfectly true, as he said, that the Act of 1972 in Scotland made no provision for housing commissioners, but it made provision for something very similar. It made it possible for the Secretary of State to assume the functions of a housing authority if an authority was not complying with the Act. In some cases, I think—I am now speaking from memory— it was the intention of at least one authority to attempt to force the Secretary of State into that position. As he knows, he did not take over that function in any case in Scotland for reasons which he alone can tell, and which I have no doubt seemed perfectly sound to him. I may say I was very glad that he did not exercise that function, which would have produced a degree of confrontation making a difficult situation even worse. That is all I wish to say in relation to our differences as between 1972 and 1975.
Amendments similar to this were moved in another place on both this Bill and the preceding English Bill, but they were not called because I think it was generally accepted that they were what is termed "wrecking Amendments". In fact, Clause 1 stands at the heart of our policy for local authority rents. Quite simply, it is a determination to restore to local authorities the freedom to deter-mine rents which for the first time was removed by the Act of 1972. We pledged in our Manifesto that we would repeal the rent-fixing provisions of the 1972 Act.
One reason is that we think it quite illogical to provide, as the Act did, that rents for every area of Scotland from Lerwick to New Galloway should be fixed in exactly the same way with no possible allowance for varying local circumstances. This Bill provides flexibility by replacing the 1972 Act system with the concept of reasonable rents which empowers local authorities to take all relevant circumstances into consideration when they are determining rents. The efforts of the Opposition in another place to define reasonable rents were, in my opinion, misconceived. It is already generally held to imply—and I am using these words very carefully—that in determining rents a balance must be struck between the interests of tenants and those of ratepayers.
616
Housing functions will be exercised by new authorities from 16th May, as the noble Lord, Lord Campbell of Croy, has recognised. What I think is quite wrong is to assume that any of these successor authorities will follow any pattern deter-mined by existing authorities. I think it would be both unreasonable and illogical that we should start off the new authorities in a spirit of mistrust. The one thing which is quite certain about Housing Bills is that, no matter how enthusiastically Ministers may bring forward a Housing Bill as being the ultimate solution of the housing problem in Scotland, the ink will hardly be dry upon the Act before there begin to emerge the conditions which make it certain that another Housing Bill will be brought forward in due course. We think that the present Bill will be an improvement on the 1972 position but—and I say this without any hesitation —I am quite certain that if another Housing Act for Scotland is not passed at Westminster, an early one will certainly be passed in Scotland when the Assembly comes into existence.
I do not think that we shall be totally wrong in our belief that the new authorities will act reasonably in this matter and will accept that there are three parties to council housing transactions—the Government through their subsidy, the rate-payer through his subsidy and the tenant through the amount that he pays in rent —and that it is a primary duty of the new housing authorities (the district councils and the island councils) to accept that they must be fair to both tenant and ratepayer in the way that they divide the burden between them.
It is in that context that I and my honourable friend the Under-Secretary of State have recently been meeting district councils up and down the country. I find that they are going into the new régime with enthusiasm for doing a good job on housing. I think that that is very largely due to the fact that the only major function which the new district authorities have is housing, and I believe they recognise that they will stand either to fall or to be praised in public estimation by the way in which they tackle their housing problems. They cannot be regarded as having successfully tackled those problems if they have not dealt fairly on the rents issue. It is for that reason that

617
I think that the Government are not wrong to act on the basis that the new authorities must enter on their tasks with a degree of trust.
I hope, therefore, that the noble Lord, having not unfairly stated the position which he represented in 1972 and the views which he still holds, will not find it inconsistent with that position not to press the Amendment.
Lord STRATHCLYDE: I rise in sup-port of the Amendment so ably moved by my noble friend. I do so because, unlike the noble Lord, Lord Hughes, as a result of some 40 years' experience of government, both local and national, I have not that confidence in certain of our Scottish local authorities to act in a reasonable manner so far as rents of council houses are concerned. I seriously envy the noble Lord his optimism that the new district authorities will be reason-able in regard to what they may consider to be reasonable rents ; it appears to me to have no basis in fact nor to be sup-ported by the evidence over many years of this century. From 1933 onwards, I have been engaged in an endeavour to obtain for ratepayers and council tenants houses rented according to a system having regard to what would be fair to all concerned. By that, I mean the fixing of an economic rent for all local authority houses which would be payable by all tenants and which would ensure, through rebate schemes, that those who circum-stances prevented from being able to pay the economic rent could still enjoy the same standard of housing as was available to others. I have never been able to understand the justice of allowing those capable of paying an economic rent to obtain a modern house at a cut-price rent at the expense of ratepayers, a large proportion of whom are not so well off and who are living in houses lacking the standards which those more fortunate people enjoy.
The insistence on low rents which has long existed in Scotland has been the cause of much of our sub-standard housing. In that connection, I can still very vividly remember an intervention by Arthur Woodburn, then Secretary of State for Scotland, in a debate on housing in the Scottish Grand Committee when he made that very point and did so with
618
considerable force, to the obvious dismay of his own supporters. It is well known that there is nothing which my fellow countrymen like better than a bargain, and they clearly considered that council rents were a very good bargain, at least for those who enjoyed them. Perhaps noble Lords will bear with me if I quote the rents payable at different dates and fixed by different authorities. To take the average rents in the cities and using Glasgow as an example— and may I add that Glasgow's rents were not always the lowest— in 1938 the rent was 5s. l0d. a week ; in 1949 it had gone up to 6s. 2d.; in 1964, after 15 years, it had risen to 12s. 2d, and in 1969 to 22s. 11d. Now I must take yearly rents because that is the way they are given in the returns. That figure corresponds to £59·8 per annum ; in 1972, that had gone up to £92·46 and in 1973 to £131·67. Those last two figures show the difference between the local authority's reasonable rent in 1972 and the fair rent in 1973—an increase of no less than £42·21 a year.
So far as the large burghs are concerned, there is the same gradual increase over the years to 1972, when, taking Kirkcaldy as an example, the average rent under the reasonable rents system was £87·86. Under the fair rents system, that figure rose in 1973 to £145·95. That shows an increase of no less than £50·12.
Thinking that perhaps the counties might show a different picture, I took Ayrshire as an example. In 1971 the average rent was £48·52 and in 1972 it was £72·49, while in 1973 it was £98·89, an increase of £50·73 over 1971 and £26·40 over 1972. Surely these figures prove that the ratepayers in general must, under the local authorities reasonable rent schemes, have been subsidising council rents and in consequence carrying an unjust rating burden over the years until the Act of 1972 became law.
Would the noble Lord, Lord Hughes, explain why the Government are now going back to a system which is so obviously unjust? Does the noble Lord deny the greater justice of the 1972 Act and, if so, will he says where it fails in that or in any other respect? The only reason which the noble Lord has given, and he more or less repeated it today, is that the change back, as he said on Second Reading,

619
"restores freedom to local authorities to determine for themselves what rents should be charged for the houses built and managed by them."
The noble Lord went on:
"It does so by restoring the well-tried principle of reasonable rents which allows authorities to have regard to local circumstances in determining rent levels."—[Official Report, 4/3/75; col. 1204.]
In the light of the figures which I have given, all of which are taken from the Development Department's Rented Houses Owned by Public Authorities in Scotland annual return, would it not be more accurate to say that Clause 1 restores the principle of robbing Peter to pay Paul? I will tell your Lordships why the Government are going back to that well-tried system, and I trust that in this matter I shall not offend your Lordships. I am sure that I will not offend the noble Lord, Lord Hughes, who I have good reason to believe despises mealy-mouthed people. The explanation is quite simple. The Labour Party in Scotland, playing on their fellow countrymen's love of a bargain, have gained control of practically every local authority in the Scottish industrial belt by what was, in essence, noth-ing short of political bribery. The bribe was letting it be understood, "If you give us your vote we in return will give you low rents and save your pocket." With the passing of the 1972 Act that bribe was no longer available to them, hence Clause 1. I support the Amendment.
Lord CAMPBELL of CROY: May I—
3.33 p.m.
Lord HUGHES: Perhaps the noble Lord, Lord Campbell of Croy, will permit me to intervene at this stage to reply to his noble friend Lord Strathclyde— and only the traditions of the House prevent me from referring to him as my noble friend also. He knows the very high regard in which I have always held him, though I do not know why this should continue because we never seem to find any subject in this House on which we agree, so obviously our friendship is of an extra-Parliamentary nature. It is only in respect of the final point the noble Lord made that I intervene. He said that the Labour Party had gained control of all the major authorities in the Scottish Central Belt and that we had done so by reason of the bribery which
620
this provision would permit us to restore. I remind the noble Lord that the major authorities in the Central Belt have nothing at all to do with housing. The regional authorities do not have the housing function, so how we could possibly bribe the Strathclyde, Lothians and Central Regions into getting people to vote for us when housing has nothing to do with their functions, I find difficult to follow.
It may be that the noble Lord, having gone back to 1933 in his search for statistics, was confusing the past situation with the present one. I suggest that it does not serve any useful purpose to go as far back as 42 years. That was the time when I was first elected to a local authority, and I remember well that the basis on which I made my maiden speech in the Dundee Town Council was on a motion to reduce town council rents by 10 per cent. If I were a member of the town council this year I would not be moving such a motion, so what I did in 1933 or what anybody else did at that time, although perhaps relevant to the circumstances then—we recall the mass unemployment that existed at that time—is quite different today. Over quite a long period of time there was little or no alteration in council house rents and there was accepted in the majority of Scottish local authorities a pattern that a number of rent increases at regular intervals, of comparatively modest amounts, would eventually reach a balanced revenue account with the mini-mum of opposition, whereas big increases, while perhaps not unreasonable in regard to the total housing burden, produced a measure of resistance which made it difficult to carry them out.
It was said of the previous Labour Government that the pattern of rent increases which took place was greater than under any previous Government. That is perfectly true and I made a point, as did other Ministers in that Government, of emphasising to local authorities the benefit of a good rent rebate system. Of course the important word there is "good", because one can have rent rebate systems which are an absolute farce. But the one which is in operation and which we are continuing is a good system. With a good rent rebate system it is possible to shield the great majority of people from real hardship in the payment of rent.

621
If I were to go further I would simply be retracing what I said on Second Reading and what I have said on this Amendment. Whatever the pattern of the previous authorities, I do not think that any of your Lordships have the right to assume that the authorities which begin to exercise their functions in May will act in the same way as some of their previous constituent authorities may have acted. I admit—I have already admitted this but I do it again—that I may be wrong, and perhaps I am being optimistic rather than realistic in saying that, but I believe that the best way of ensuring that we get a satisfactory situation and realism is to start off by trusting the new local authorities to act reasonably. It will be time enough to remove powers from them, as against all the patterns of recent years, when it has been shown that they fail to exercise their powers reasonably, and until that happens we should work on the basis that the new authorities will do the job which Parliament has entrusted to them.
Lord CAMPBELL of CROY: My noble friend Lord Strathclyde has warned us of what could happen again in future, based on his wide experience of local government and Ministerial office at the Scottish Office. The noble Lord, Lord Hughes, hopes that the new councils will act reasonably. I am sure that all your Lordships do, and so do I, but they will want guidance and some form of yard-stick to help them to decide what is reasonable. We can go into this matter later, because the debate on the clause stand part will be the appropriate stage at which to discuss what the Government think is a reasonable rent.
As regards my reference to the Minister's remarks in another place, I did not expect the noble Lord, Lord Hughes, to reply today, because he has never said anything like that. The system of com-missioners cannot possibly be confused with the alternative—which I mentioned in my statement earlier—of the Scottish Office taking over the administration from a council. The system of commissioners exists in England and Wales, but it did not appear in the 1972 Scottish Act. The noble Lord, Lord Hughes, is himself very reasonable and I would say that if all councillors in Scotland consisted of people like him we should have no diffi-
622
culties at all. But a cynical few people in Scotland may regard what has happened over the past three years as a skilful exercise in misleading and frightening a lot of people about the 1972 Act. Then, in order to keep up the deception, one has to go through the motions of repealing sections of it, even though they are being reintroduced in another form. This may get some votes, and I fear it will encourage rent "politicking" for local councils in the future; but it discredits politics and politicians in the eyes of the public. As the noble Lord said, this Amendment would be a wrecking Amendment at this stage in the Bill, and he knows that I was not intending to press it. I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.41 p.m.
Lord CAMPBELL or CROY Lord CAMPBELL or CROY moved Amendment No. 2:
Page 2, line 5, at end insert—
("( ) In discharging the functions conferred by subsections (2), (3) and (4) above a local authority shall take into account that a normal average rent increase for their standard rents in any period of 12 months should be £26, but no more, when a greater increase would be required to balance their housing account.")
The noble Lord said: Moving on from Amendment No. 1, and given that the Government are not prepared to leave in the 1972 Act the sections which were carrying out useful work, we believe that local authorities would at least benefit from—and many of them would welcome —the guidance which this Amendment would give them. It would not be mandatory. It is proposed to insert in the Bill a provision which would indicate to them what was a reasonable step in order to raise the average rent each year, if that were needed to help balance the housing account. It would help councillors if a norm like this were prescribed, because otherwise in different areas it would be found difficult to decide what rent increases should be made if they were well short of balancing their housing revenue account. In balancing their revenue account, all the relevant subsidies coming from the Government are counted on the credit side, so these are taken into account. Furthermore hardship does not arise, because of the rent rebate scheme, and we are dealing with the better-off tenants; not those who are eligible for rebates.
Guidance of the kind indicated in the Amendment would reduce the burden on the already overpressed ratepayers in those areas where a council may decide against any increase, or may decide on a derisory increase, when it is a long way from balancing its accounts—and at a time when, in any case, rates are rising for other reasons. We will be asking the Government during discussion on the clause stand part about reviews, because under this clause rents are to be reviewed from time to time. But there is nothing to indicate at what intervals they will be reviewed, or what the criteria should be. At least in order to assist councils, with guidance, we believe that what is proposed in the Amendment would be helpful, even though as a result of our last Amendment not being accepted it would not be mandatory. I beg to move.
Baroness ELLIOT of HARWOOD: wish to support the Amendment, since one of the most difficult things in the world is to make councillors decide at what point they will make their housing revenue accounts balance. It is extremely easy to bring down rents, but it is very difficult to put them up. Anything which gives councillors guidance in this matter is to be welcomed, particularly when deficiencies in housing revenue accounts are greater than they should be and are not of a manageable character. If the Amendment were approved it would be possible to point to the Act as being guidance and helping councillors to do some-thing which is extremely unpopular. Most people are elected to councils and they do not want to do unpopular things, because people may say, "I am not going to vote for so-and-so because he put up my rent." Councillors try to avoid putting up rents; lots of them try to bring rents down, which is an easier way of currying favour with the electorate. Very few people have the courage to put up rents. It would be much easier for the county councils or town councils concerned, if there was some guidance to show at which point rents must be put up.
This is a very good proposal and it would be extremely helpful not only to those who win seats on the Labour side of an authority, but also to those on the other side, because those members are in the same position as any one else. Putting up rents is very unpopular and if one
624
wants to get elected to a council one does not want to be unpopular. I there-fore support this Amendment which I regard as extremely reasonable.
The Earl of CROMARTIE: Before the Minister replies, I should like to speak on this Amendment not only—as the noble Lord knows—as a convener of a Highland county, but also because I am on the new district. We have put up our rents without any trouble whatsoever, and we have a very good rebate system under which people who are in difficulties get rebates. We arc in the middle of an oil area, and I appreciate that that has made a big difference. I think that this proposal is a good idea, and I am not thinking of our rather advanced, good, well-run Highland counties; I am thinking of further South, where this Amendment might be very useful.
3.47 p.m.
Lord HUGHES: I do not disagree with the sentiments expressed by the noble Lord, Lord Campbell of Croy, in moving the Amendment, nor the sentiments contained in the support given to him by the noble Baroness, Lady Elliot of Harwood. It is perfectly reasonable that guidance should be given to the local authorities— particularly as they are new authorities— on what policies should be followed. Unfortunately, the Amendment which has been moved would not give guidance. It would—and it is quite obvious from the way that the noble Lord, Lord Campbell of Croy, spoke, that this was not his intention—restore the situation to that of a mandatory increase. One would have thought that the wording could be interpreted as guidance, but, possibly because of the way these matters are interpreted, it would be taken as something that the authorities must do.
I think that I indicated on Second Reading that we wish to give guidance to local authorities on the matter, and to that extent I may have some responsibility for encouraging the noble Lord to put down an Amendment along these lines. But what we had in mind and what we think is appropriate—and the noble Lord, Lord Campbell of Croy, knows how often he has done this—is administrative guidance by circular from the Scottish Office. In matters of this kind this is preferable to attempting to give guidance in an Act of Parliament.

625
A circular is to be issued to local authorities, I think within the next few days, and almost certainly before we reach the next stage of the Bill. The circular will point out to the local authorities the background of rising housing expenditure against which authorities should decide how that expenditure net of subsidies should be met between rent and rates. It will touch on the question of when a review should be undertaken. I wish only that it had been possible to produce the circular in time for today, because obviously I cannot expect the the noble Lord to accept that what we are doing in a circular will produce the result which he would hope to get from this Amendment when he has not even seen the circular. However, in view of the totally reasonable way in which he has put forward this proposal, I should not expect that he would find great difficulty in acceding to the request I now make that he would withdraw this Amendment, study the circular in due course and if he then feels that the subject must be returned to, we shall have a reasonable interval during which he will have time to give thought to the matter.
Lord LYELL: Perhaps the noble Lord might be able to explain one point in the answer he is giving—
The LORD PRIVY SEAL (Lord Shepherd): I think it may be for the convenience of noble Lords if we were to take the Statement and then to continue the debate on this Amendment.
House resumed.

EEC: GOVERNMENT RECOMMENDATION
3.51 p.m.
Lord SHEPHERD: My Lords, with the permission of the House, I should like to repeat a Statement that is being made by my right honourable friend the Prime Minister in another place. May I express sincere apologies to the noble Lord, Lord Carrington, and the noble Lord, Lord Gladwyn, that they have only just received the Statement. If it is any consolation to them, I shall be reading it with them for the first time. I shall use the Prime Minister's own words. The Statement is as follows:
626
"Mr. Speaker, with permission I should like to make a Statement on the European Community.
"I regret that this will inevitably be somewhat lengthy, but this is one of the most important parliamentary occasions in our history, and I feel a duty to state the Government's position here in the House, rather than make a short, even perfunctory statement here, and a lengthier statement outside the House, where it is not subject to Parliamentary questioning.
"Her Majesty's Government have decided to recommend to the British people to vote for staying in the Community.
"Last Wednesday, after Dublin, I told Paliament that the renegotiations, begun last April, had now gone as far as they can usefully go and that while some of our objectives—if Britain remains in the Community—can be pursued in the continuing meetings of the Council of Ministers, we have now reached the point where Government, Parliament, and then the country must take the decision.
"The House will be familiar with the renegotiation objectives we set out, in the Manifesto for the February 1974 Election, and confirmed in October.
"While the judgment of honourable Members, and of the electorate, may, in taking their decision, go far wider than the terms achieved in the negotiations, I feel it is right to give the House my assessment of what has been achieved.
Objective One
"Major changes in the Common Agricultural Policy so that it ceases to be a threat to world trade in food products, and so that low cost producers outside Europe can continue to have access to the British food market.
"My right honourable friend the Minister of Agriculture gave precision to these objectives in his statement to the Council of Ministers on 18th June, on which he reported to the House on 19th June. He asked for:—

1. The establishment of firm criteria or pricing policy, taking account of the needs of efficient producers and the demand/supply situation.

627

2. Greater flexibility, taking account of the need for appropriate measures to deal with special circumstances in different parts of the Community.

3. Measures to discourage surpluses and to give priority to Community consumers in the disposal of any surpluses which arise.

4. Improvement in the marketing régimes for some major commodities, particularly beef, with a view to avoiding surpluses.

5. The improvement of financial control.

6. Better access for certain commodities from outside the Community, with particular regard for the interests of Commonwealth producers and of the consumer.

"Now as to the outcome.
"On the 'supply of food at fair prices', in the three CAP price settlements since the Government took Office, the Minister of Agriculture has succeeded in keeping price increases below cost increases, and thus in real terms reinforcing the downward trend in CAP prices. This would benefit consumers and taxpayers and also is designed to reduce the risk of surpluses.
"Increasingly price proposals are being related to the costs of efficient producers and the supply/demand situation, and this approach is reaffirmed in the Commission's Report on the CAP stock-taking.
"On the 'greater flexibility for special circumstances and improved systems of market regulation, especially beef', the Minister has secured changes for beef under which member-States are no longer obliged to maintain high prices for producers by buying beef into store and denying it to consumers. Instead, they can let it go to consumers at reasonable prices and make up returns to producers by deficiency payments partly financed by the Community.
"In addition special encouragement has been given for sugar production in the United Kingdom. More generally the monetary arrangements have been used to differentiate the percentage price increase between member-States.
628
There has been more flexibility in the use of national aids.
"On the 'requirements of measures to discourage surpluses and to pay more regard to consumers', the downward pressure on CAP prices is itself a safeguard against surplus production—together with our proposals, now being pursued, for the reduction of support buying prices for milk products and cereals when surpluses start to arise. Then there is the recent practice that any surpluses which do develop are run down by cheap supplies to Community consumers rather than being unloaded on world markets. We have had this in the beef subsidy for pensioners and in the increased butter subsidy. British consumers again benefit from the monetary import subsidies paid to countries which have devalued, and from special measures to keep Community prices below world prices, particularly the sugar import subsidy which is financed by the Community.
"On the objective of 'improved financial control' some progress has been made—better estimates of costs and budgetary implications of new proposals, tighter monitoring of expenditure and the introduction of precautions against fraud.
"On 'access for third-country food stuffs', in 1971 we condemned the failure to provide security for Commonwealth Sugar Agreement producers. We constantly criticised the lack of arrangements for Commonwealth Sugar Agreement supplies after the end of 1974, which in fact turned out to be a time of world sugar famine—hence the crisis we faced. But we have now got assured access for up to 1·4 million tons of sugar from developing countries, for which we pressed from 1971 onwards, so this objective has been achieved.
"During this period of shortage British refiners and manufacturers have purchased 170,000 tons of sugar to maintain continuity of supplies with the aid of Community subsidies of £36 million.
"On 'access for New Zealand dairy produce', in the autumn of 1974 we secured an increase of 18 per cent. in the prices paid to New Zealand to ensure continued supplies, and at

629
Dublin we got agreement on the broad lines of the continuing arrangements for access of New Zealand dairy produce after 1977.
"No commitments had been made in 1971, but so far as butter is concerned, the Commission have been instructed to prepare in the next three or four months a draft based on the maintenance of butter imports from New Zealand to Britain at around the level of 1974–75 deliveries, together with price proposals to which the New Zealand Government attach the greatest importance.
"On cheese, the Protocol to the Treaty of Entry ruled out any more access for New Zealand cheese of the kind provided for in 1973–77. But last week's statement has left the matter open and we have given notice that we shall pursue it in the Protocol 18 review. We shall press this very hard.
"Improved access for other food-stuffs has been secured as a result of GATT negotiations, the trade sections of the Lomé Convention, the Mediterranean Agreement and the Community's 1975 Generalised Scheme of Preferences, which has now been agreed. Improved access, too, for tropical oils, Canadian Cheddar, soluble coffee and lard, though no achievement yet on access for certain other foods such as canned fruit and hard wheat. We have requested levy-free quotas for hard wheat and flour, and put on record that we shall at an early date seek elimination or reduction of the tariff on New Zealand lamb.
"Objective Two
Community Budget
"The Manifesto commitment was: New and fairer methods of financing the Community budget. Neither the taxes that form the so-called 'own resources' of the Communities, nor the purposes mainly agricultural support, on which the funds are mainly to be spent, are acceptable to us. We would be ready to contribute to Community finances only such sums as were fair in relation to what is paid and what is received by other member countries.
"It rapidly became clear that we could best secure our objectives not by
630
seeking to overturn the system of financing the budget from 'own resources' but by correcting its unfair impact by a mechanism which would provide a refund to us.
"I reported to the House a week ago, and set out the corrective mechanism proposals which, as I said, were an improvement on the Commission's proposals, and which satisfactorily met what we then proposed, involving a refund of up to £125 million a year.
"Objective Three

ECONOMIC AND MONETARY UNION
The Manifesto commitment is as follows:
'We would reject any kind of inter-national agreement which compelled us to accept increased unemployment for the sake of maintaining a fixed parity … We believe that the monetary problems of the European countries can be resolved only in a worldwide framework'.
"Since that commitment was made there has been a major change in the attitude of other European Governments to the practicability of achieving EMU by 1980. As a long-term objective it was restated in the Paris communiqué but for all practical purposes it has been tacitly abandoned. For example, the second stage due to start on 1st January 1974, 15 months ago, has never been adopted and practical work has been virtually at a standstill for a long time.
"There is no prospect of our coming under pressure to agree to an arrangement, whether in relation to parity commitments or otherwise, threatening the level of employment in Britain. As for EMU remaining as a long-term Community objective, its realisation in the foreseeable future is as likely as the ideal of General and Complete Disarmament, which we all support and assert.
"Objective Four
Our Election Manifesto of February 1974 stated our objective as:
"The retention by Parliament of those powers over the British economy needed to pursue regional, industrial and fiscal policies".

REGIONAL POLICY
"Since the turn of the year, and in the context of our renegotiations, the

631
Commission have had an intensive discussion with us and other Governments and have now formulated the principles under which they propose to implement their role in the co-ordination of regional aids.
"Their hierarchy of assisted areas conforms to ours. No forms of national aids are ruled out in principle, and there is no interference with our existing regional aids. There is a particular problem relating to assistance given by the Highlands and Islands Development Board, for which a derogation is being obtained. In discussing the way in which regional aids might be changed to meet new circumstances, the Commission have furthermore acknowledged that national governments are the best judges of what is required in their own country, and that the Commission will be prepared to consider changes in national aid systems compatible with the Common Market, when they are justified by problems of employment, unemployment, migration and by other valid requirements of regional development policy which constitute essential national problems. The Commission have further accepted that urgent action by Governments may be necessary and that Treaty procedures will not hold this up.

INDUSTRIAL POLICY
"We have not met with any serious difficulties from the EEC in the conduct of industrial policy during the past year. We have reported aids given under Articles 7 and 8 of the Industry Act 1972. Article 222 of the Treaty of Rome specificaly permits nationalisation; and Government participation in the equity of a firm does not in itself raise problems under the Treaty. The Commission have accepted that in urgent cases we will provide aid with-out first giving them an opportunity to comment. In such rescue cases a solution might be that when we prepare a plan to restore the firm concerned to viability we should discuss it with them within the following six months. This would not be an onerous requirement.
"The Commission have not yet commented on the Industry Bill. The pro-
632
posals for the National Enterprise Board and for Planning Agreements have much in common with arrangements in other member-States; they are in no way incompatible with the Treaty, provided that the Government's powers are not exercised so as to damage the competitive position of undertakings in other member-States— a principle which we accept, as we have in the case of regional policy.
"I should add that as regards State Aids we had just as stringent an injunction on us as members of EFTA, and non-Market EFTA countries who have agreements with the EEC have accepted obligations just like the EEC obligations without having any part in EEC decisions in these fields.
"I believe that this meets our objective. Steel is more difficult, partly for inherent reasons, partly because of action taken by the previous Government when they repealed Section 15 of the Iron and Steel Act.
"I am satisfied that potential problems over prices can be resolved by the close contact between the Government and the Steel Board, and possible difficulties about mergers are also capable of a solution.
"There is nothing in the Treaties of Rome or Paris or in practices or policies under the Treaties which precludes us from extending nationalisation of the present private sector, even total nationalisation.
"On the control of private investment there were, until the repeal of Section 15, powers to prevent investment by non-British non-Community country steelmasters—and the much publicised mini-mill proposal at Newport could have been dealt with if Section 15 was still in force.
"My right honourable friend the Foreign and Commonwealth Secretary gave notice at the Council of Ministers on 3rd March that it might be necessary to ask for Treaty revision, if there is no other way of solving this problem. If, as part of the control of the economy, the Government, any Government, have to hold back the level of new investment in the public steel sector, it is unacceptable that the private sector should be free to expand where it wants, and by as much as it

633
wants, thus adding to the inflationary pressure on resources—quite part from the location and regional problems, for example, in areas where steelmen have been made redundant by technological change.
"Since it is well known that other member countries have met with those and similar problems, and have found administrative means of dealing with it, I told the other Heads of Government in Dublin that we would study the methods they have used, whether by environmental controls, planning controls, industrial development certificate controls, or other means.
"Were this to fail, we could still have recourse to extending public ownership, or to proposing Treaty revision. The reference in the Manifesto Objective to fiscal policies has not proved difficult. There are proposals for certain measures to harmonise the structure of some indirect taxes but any which were objectionable to us would require our agreement. I will come to this again on VAT.
"Objective Five.
Capital movements.
The Manifesto commitment says:
'Equally we need an agreement on capital movements which protects our balance of payments and full employment policies.'
"We have made use of the relevant Articles of the Treaty of Rome to revert to broadly the same exchange control régime as applied before entry. We can continue to take action under those Articles to protect our balance of payments.
"Objective Six.
The Commonwealth and developing countries.
The Manifesto said:
'The economic interests of the Commonwealth and the developing countries must be safeguarded. This involves securing continued access to the British market and, more generally, the adoption by an enlarged Community of trade and aid policies designed to benefit not just "associated overseas territories" in Africa but developing countries throughout the world '.
"I have referred to Commonwealth sugar, and New Zealand dairy products.
"Another major achievement was the Lomé Convention.
"What was achieved, and a great tribute is due here to the work of my right honourable friend the Minister for Overseas Development, is the transformation of a paternalistic arrangement with a restricted range of mainly ex-French and Belgian Colonies or Territories, in which they had to offer the Community reciprocal trade benefits, into a relationship based on co-operation with 46 countries in Africa, the Caribbean and Pacific (22 from the Commonwealth). The new Convention governs access, without requiring reciprocity, a completely new scheme for stabilisation for commodity earnings, and much increased aid. It has rightly been described as historic. For this and other reasons, almost all Commonwealth countries, advanced and developing, have expressed their hope that Britain will stay in the Community.
"As to Asian countries such as India, Sri Lanka, Bangladesh and Pakistan, a good deal has been done for them already. They have benefited from EEC emergency aid to those countries most seriously affected by the oil price rises. India has an agreement with the EEC and the other three are negotiating them. The Generalised Scheme of Preferences has been much improved, and earlier this month the Council of Ministers agreed to work for continuing improvements to the Scheme, with particular emphasis on the interests of the poorest developing countries, including those of the Indian sub-Continent.
"But it cannot at this stage be claimed that all the problems so far as Asian countries are concerned have as yet been solved. In principle, Yes, but there is so far no commitment about financial provision.
"Objective Seven.
Value Added Tax (VAT).
The Manifesto commitment is:
'No harmonisation of Value Added Tax which would require us to tax necessities'.
"The proposals now being discussed in the Community are concerned with agreeing a uniform assessment base for VAT. They provide for our system of zero-rating. We will be able to resist any proposals which are un-acceptable to us.
"Contrary to the situation four years ago, this is no longer a real threat. So far from harmonising, a number of countries are insisting on increasing the number of VAT rates within their own tax systems and it seems there is no danger to our freedom here at all.
"To sum up, therefore, I believe that our renegotiation objectives have been substantially, though not completely, achieved.
"I have set out at some length the outcome of the negotiations on each objective mentioned in the Manifesto, including those where the passage of time has diminished or eliminated the threat we foresaw.
"What now falls to be decided is whether, on these terms, the renegotiated package as a whole, the best interests of Britain will be best served by staying in or coming out.
"It will be seen from what I have said that the Government cannot claim to have achieved in full all the objectives that were set in the Manifesto on which the Labour Party fought and won two Elections last year. Some we have achieved in full; on others we have made considerable progress, though in the time available to us it has not been possible to carry them to the point where we can argue that our aims have been completely realised.
"It is thus for the judgment now of the Government, shortly of Parliament, and in due course of the British people whether we should stay in the European Community on the basis of the terms as they have now been renegotiated.
"So, I do not believe that in taking this decision we are entering into a narrow regional grouping to the detriment of our worldwide relationships. My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe. We have to face the fact that practically the whole Commonwealth, deciding on the basis of their own interests, want Britain to stay in the Community. Many have diversified their trade away from Britain—in many cases they felt themselves forced to do so as a result of the 1971 decision and terms. But a number also, New Zealand for example,
636
have entered on a radical reorientation of their political stance related to the region surrounding them.
"Again, I would not commend the Government's policy to this House if this meant in any way weakening our transatlantic relationships. Relations with the United States are closer and better than they have been at any time certainly in this generation and in some contrast to what they have been in very recent times. Nothing in today's decision will in any way weaken that relationship.
"Mr. Speaker, Her Majesty's Government have decided to recommend to the British people that they should vote in favour of staying in the Community on the terms which I have described. I have given the Cabinet's view.
"I have only this to say before I sit down.
"One, while perhaps some of these things might have been improved even if the Government had not entered into these tough negotiations—the renegotiations have themselves been more than a catalyst of change; they have been an initiator of change.
"The second thing is this. Many of us, including myself, have been half terrified by reading the legal jargon, the apparently fussy legalism and theology, not to mention some speeches and statements of enthusiastic supporters. The Foreign Secretary and I have found the Market much more flexible than I think either of us expected, both on individual questions and in what we have noted as a substantial shift of power over these past twelve months.
"Renegotiations, agricultural and financial crises, whatever it may have been, all have played their part in putting more power into the hands of national Ministers meeting in the Council of Ministers. Few would have thought, even a year ago, that we would have got agreement, through what the Minister of Agriculture negotiated on beef, to what in practice is freedom to return to the principles of Tom Williams' Agriculture Act of 1947 in the matter of deficiency payments, which had been specifically excluded as a means of farm price guarantees

637
as a result of the 1971 negotiation package.
"A fundamental change not in the Treaty, but in the practice, has been brought about by the new system of Heads of Government Summits, started with that convened by President Giscard d'Estaing in Paris last September, and continued by the December meeting, and now the Dublin meeting. This system has, already, de facto reasserted a degree of political power at top level, not only over the month by month decisions, but over the general method of operation of the Market. This does not mean it has become a Europe des patries. It is a Community. But, as compared with even a year ago, vital interests of individual nations are now getting much more of a fair hearing, and the political power in asserting those interests has certainly increased more than appeared possible in the battles of 1971, 1972 and 1973—more, in my view, than even a year ago, when the result of the February Election made the Manifesto objectives for the first time no longer a domestic, political argument, but a Governmental man-date for renegotiation.
"My right honourable friend the Leader of the House will announce our proposals for a two-day debate immediately after the Easter Recess. What I have said this afternoon, including the announcement of the Government's decision, means that, for that Parliamentary debate, the case now rests, and thereafter, following the Referendum campaign, the case will then rest for the people to decide."
My Lords, that is the end of the Statement. In regard to a debate in your Lordships' House, this is clearly a matter which we can discuss through the usual channels.
4.22 p.m.
Lord CARRINGTON: My Lords, may I congratulate the noble Lord the Leader of the House on that mammoth performance. It says much for his ability and his capacity that he not only sounded as if he understood what was being said— because, of course, he did—but he also sounded as if he had written it, which is even more remarkable, since he had
638
not even seen the Statement. I wonder, though, whether I could beg him to see whether or not the machinery regarding Statements could be improved. If the Prime Minister can get up in another place at half past three with a copy of this Statement, it cannot be beyond the wit of man to produce a Statement for the noble Lord the Leader of the House to read at twenty-five minutes to four. Perhaps he could do something about it.
This afternoon I do not intend to comment in detail upon what the noble Lord the Leader of the House has said. I could hardly agree with some of the points which have been made in the Statement. One or two of the statements, like the passage about the Anglo-American relationship, are rather tendentious and rather unnecessary to have inserted in the Statement. However, I do not intend now to go into that matter; nor do I intend—though, Lord knows! there is scope for it—to make any gibes about the situation into which noble Lords opposite have placed themselves, or about the events which have led up to this Statement, or, indeed, more seriously, about the position into which the Government have put the country over the Referendum. I shall leave that aside, and probably I shall not make another joke about it until after the Referendum. After the Referendum, I hope to goodness that it will not be necessary or relevant to make a joke about it.
All I shall say is that I think that the outcome of this Statement is wholly desirable. I congratulate the Government upon it and welcome their decision to support this country remaining in the Common Market. I think that the most significant matter in this Statement is that on two occasions the Prime Minister has said that Her Majesty's Government have decided to recommend to the British people that they should vote to stay in the Community. Her Majesty's Government have decided this—not just a section of Her Majesty's Government, or a section of the Cabinet, but Her Majesty's Government. May I ask the noble Lord the Leader of the House to give us an assurance that, because he has used that phrase, the Prime Minister, with his colleagues, will do everything he can to ensure that the right solution, the right answer, is found to the Referendum.
4.26 p.m.
Lord GLADWYN: My Lords, I can say only that the decision of Her Majesty's Government, contained in the mammoth Statement which we are so much obliged to the noble Lord, Lord Shepherd, for reading out is—I think I am right in saying—without a single exception, very welcome to noble Lords on these Benches. We are indeed glad that the Labour Government have at last returned to the conclusion that they arrived at in 1967 and again in 1970; namely, that Britain should be a member of the European Economic Community. Also, for our part we agree with the various concessions which the Government have induced our partners to make. Concessions to legitimate British points of view are very welcome, even though they could probably have been obtained by the usual process of discussion and negotiation through the ordinary Brussels machinery, without any implicit or explicit threats of withdrawal from the Community.
The only specific comment which I should like to make in advance of the promised debate which we shall have after Easter concerns the renegotiated terms. The Prime Minister, rather contemptuously, says in the Statement that the achievement of a European Monetary Union is about as likely as the achievement of the ideal of general and complete disarmament. I believe that, on the contrary, in a few years' time—we do not know how many years—this project will be discussed once again. Nor do I believe that, if properly negotiated, after the achievement of some common industrial policy it will be in any way a menace but, rather, a great help to our national integrity and, indeed, to our national well-being.
In conclusion, all I would say is that we must now hope most sincerely that the Prime Minister will put his full weight and full backing behind a campaign to convince the British people that their future lies in gradually constructing some democratic entity of a new type which will abolish international tensions in at least a very large area and thus set an example to the rest of the world.
Lord SHEPHERD: My Lords, the noble Lord, Lord Carrington, has already expressed apologies that he has another engagement. I apologise to him for
640
having kept him from it. However, may I say to him that I am very grateful for the way in which he has responded to the Statement. There always arises a degree of argument, but that is what politics and your Lordships' House are about.
May I say to both of the noble Lords that, as we said in our Manifesto, the Government went into the renegotiation to obtain new terms that were satisfactory to us, with the objective of remaining within the European Economic Community. We have taken the view that these terms are such that we can com-mend them to the country. Therefore, I can give the noble Lord, Lord Carrington, the noble Lord, Lord Gladwyn, and the House the assurance that it is now the determination of Her Majesty's Government to ensure that the British people are made aware of the importance of this decision and that we get the right answer.
Lord SHINWELL: My Lords, is my noble friend aware that, speaking for myself, for many Members in another place and for a large number of people in the United Kingdom, I regard the terms which the Government have accepted as totally unacceptable, and completely inconsistent with the repeated declarations made by a large majority at Labour Party Conferences in the past few years, and indeed as a betrayal—and I emphasise the word "betrayal"—of decisions previously made by prominent Members of Her Majesty's Government? My noble friend may also be aware that, like the noble Lord, Lord Carrington, it is not my intention to enter into detail, except to mention that I take my stand on the article which appeared in The Times newspaper the other day under the name of its economic editor, Peter Jay, who declared that there had been no fundamental change as a result of the alleged concessions the Government claim to have received.
Is my noble friend also aware that it is my intention, even with my very modest influence, along with many others with greater influence, to carry the fight into the country, without any arrogance and certainly with no malice intended? It is simply a matter of wrong ideas on the other side of the political fence, and in some quarters of the Labour Party.

641
It is my intention to carry the fight in the sternest, most relentless, resolute and determined fashion in order to prevent this country rushing into disaster—a disaster which I predicted many years ago when Harold Macmillan made the first pronouncement in the House of Commons of the intention of the Government of the day to enter into negotiations. Is he further aware that those of us who take the stand which I have ventured to indicate in these few remarks, do so not because we are opposed to the best interests of this country but because, on the contrary, we are concerned with its fundamental interest, taking a long-term view. Let it be clearly understood that what I am now saying will be carried out with the utmost resolution, irrespective of the consequences.
Lord SHEPHERD: My Lords, my noble friend is one in your Lordships' House, in another place and in the country, who has consistently opposed Britain's entry into the EEC. May I say to him that my respect for him and those who hold his view would be very much less if he did not take the line that he has indicated this afternoon. I hope that we will have a good debate on the Referendum because flowing from that I believe we shall then have a sizeable vote at the Referendum. The decision in itself can then be decisive and this country will know where its future lies.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord, Lord Shepherd, aware that while circumstances have perhaps made it inevitable that we should remain a member of the Community, even at first hearing the people who have played a detailed part in the last ten to twelve years on this important issue will recognise this Statement for what it is —a bucketful of camouflage? It produces no fundamental change; the principle that exists now after that Statement is almost precisely the same as existed before, and I think it ought to be clearly on the Record that a Government that gains election on any anti-Common Market vote as a consequence of their statements was elected under false pretences and, whatever may be the out-come of the discussions upon this matter, it is a cynical manoeuvre which I believe
642
is a betrayal of our Parliamentary system.
Lord SHEPHERD: My Lords, the noble Lord is a newcomer to your Lord-ships' House and I am sure that our debates will be enlivened by his joining us. This Government were elected on a Manifesto which said that we would seek to renegotiate the terms, and there it was quite clearly said "with the intention of remaining within the EEC". I do not think that is open to question, even by those on my side of the House who may take a different view from the Government and myself. This is a matter which no doubt we shall continue to debate. I hope we shall have a good debate and I am looking forward to it very much indeed.
Lord DAVIES of LEEK: My Lords, can my noble friend further inform the House on this statement which the noble Lord, Lord Carrington, was careful to underline? The phrase was "His Majesty's Government recommend—"
Several Noble Lords: Her Majesty's Government.
Lord DAVIES of LEEK: My Lords, consequently we were given to understand that, despite the fact that the phrase, "Her Majesty's Government" may be used, members of the Cabinet who take a different point of view may be able to campaign against entry into the Common Market. Is that statement still to hold, or must members of the Cabinet who voted against the principle of entry now accept the full statement of support?
Lord SHEPHERD: My Lords, the Cabinet met this morning and after a long debate and full assessment of the renegotiated terms they came to a decision, and that is the decision of the Cabinet and the decision of the Government. It is the decision that the Government will put to the country. But, as my noble friend is aware, because of the unique character of the negotiations, those members of the Government who declare their dissent from this view—and we all know their views— are being allowed to speak to the country, explaining their views and making their case. I have no doubt that the Referendum will be better as a consequence of that decision.
4.37 p.m.
Lord GORE-BOOTH: My Lords, may a voice be heard from these Benches— though I cannot claim to represent anyone but myself—to express the relief and, indeed, enthusiasm felt by many people, after months of doubt, at the declaration that has been made this afternoon. We are used to historic moments in the history of our relations with Europe, and certainly this is one of the really important ones. I should like to make two comments. One is that, in some passages of the notable declaration and performance of the noble Lord the Leader of the House, we had a feeling that the noble Lord was addressing himself to a slightly different audience, but we respect and understand the reason why some of this Statement should have been phrased in such a manner.
I should like to put in one word of warning and then, if I may, add two notes of congratulation. The only note of warning is simply that there is always a slight suggestion that if our industrial performance does not improve the Community will still continue to owe us a living. This is a heresy which I have pointed out before, and I hope it is not to be interpreted in that way. In my view the first of the two welcome points is that the Government should with great honesty have confirmed in this Statement that the wish of the Common-wealth at large is that we should take this step. This is extremely important. The other point is that I greatly hope that the way in which the Statement concluded will at last dissipate some of the legends that the Community is simply a large bureaucratic machine.
It is clear that the Government have discovered—and I am sure that they knew it before—that, after all, the people from the other eight countries are human beings with whom one deals as human beings, and when one negotiates and discusses with them, while they are perhaps different from you and me they are not so different as all that because we are all human beings together, trying to solve a neighbourly problem.
Lord SHEPHERD: My Lords, I am grateful to the noble Lord, Lord Gore-Booth. Of course, the Statement is writ-ten for another place and, by custom, we repeat it. I agree with the noble Lord
644
that we cannot find salvation for this country within the European Economic Community. On the other hand, being within it, if we are to seize our opportunities, then life will be a little easier as a consequence.
My Lords, turning to the Common-wealth, there is no doubt at all about what the Commonwealth feel in this matter. As to the bureaucratic machine of the EEC in Brussels, I hope that one thing we may be able to do is to slow down on some of the harmonisation and on some of the unnecessary number of Orders which are being issued. I hope we may perhaps be able to devote greater concentration to some of the more fundamental matters. If I may here express a personal view—and it is something I should like to discuss with the leaders of the Parties and with other noble Lords— I believe that if we as a country decide to remain within the EEC, Parliament (that is, the other place and your Lord-ships' House) will need seriously to look at its procedures in order to be able to maximise the time available to us, the energies we have, so as to deal with the mass of legislation coming out of the EEC as well as our own domestic legislation. I personally do not believe that Parliament as it now is with its procedures which have gone on for very many years, if not centuries, is capable of dealing with the great challenges which will confront it if, as I hope, we remain within the EEC.
The Earl of ARRAN: My Lords, I am sorry to intervene, and I will try to be brief. In the event of the pro-Marketeers winning in a Referendum, may I take it that those who oppose it in Cabinet will resign?
Lord SHEPHERD: My Lords, the position has been made perfectly clear by my right honourable friend the Prime Minister. The noble Earl, Lord Arran, is quite aware of it, since I believe he reads the newspapers from time to time.
Lord BRUCE of DONINGTON: My Lords, is my noble friend aware that the sentiments expressed by my noble friend Lord Shinwell will command support among millions of our fellow-countrymen? There are many of us in this House, in another place, and also outside these walls, who will do their very best to ensure that the sovereignty of the British

645
people is restored to where it properly belongs—here in the Palace of Westminster.
Lord SHEPHERD: My Lords, to my noble friend Lord Bruce of Donington I would only say that I have no doubt at all that sovereignty remains with the British people. Sovereignty is devolved to Parliament for a period of time, and reverts to the people when they make their decision at a General Election. I do not believe that remaining within the EEC, and the devolution by Parliament of certain of our sovereign responsibilities, in any way weakens the sovereignty or the overall responsibility of Parliament. May I say to my noble friend that Parliament can give and Parliament can always take back.
Lord GLADWYN: My Lords, before we come to the end of this discussion, may I ask the noble Lord the Leader of the House, with regard to what he said about the difficulty of dealing with a flood of legislation, whether the Government agree that the only sensible way of dealing with this is directly to elect Members of Parliament of Europe?
Lord SHEPHERD: My Lords, that is something further away than I am prepared to contemplate at present. I would want to see first of all how we can win the Referendum on the advice given by Her Majesty's Government.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, would the noble Lord the Leader of the House agree that it is time we stopped making our Referendum speeches, and resumed the Business before the House?
Lord SHEPHERD: My Lords, may I thank the noble and learned Lord, Lord Hailsham of Saint Marylebone, for that most helpful suggestion.

HOUSING RENTS AND SUBSIDIES (SCOTLAND) BILL
4.45 p.m.
House again in Committee.
Debate resumed on Amendment No. 2.
Lord LYELL: Before we were interrupted on perhaps greater business, I was seeking to clarify one point in the comments made by the noble Lord, Lord Hughes. I think I understood rightly that the noble Lord believed that this Amendment would make some councils understand that it was mandatory to increase rents by £26 in any one year. The noble Lord may be right. But on reading this Amendment, it seeks—and I hope any layman would take it as such— to enable councils to raise an average rent by £26, but no more. If the noble Lord takes the last clause, he will find it is most important when a greater increase is required to balance the housing account. It is only when a greater increase is required, and the councillors decide there is a need to raise rents, that we find guidance that the amount should be £26 as a maximum; but there is absolutely no need at all to raise rents, if the working balance, as we are calling it, is within sight. I wish to clarify in the mind of the noble Lord that there is no mandatory significance in this Amendment.
Lord HUGHES: I indicated that I understood that the motive of the noble Lord, Lord Campbell of Croy, and the support indicated by the noble Baroness, Lady Elliot of Harwood, and, now, the view of the noble Lord, Lord Lyell, were to give guidance to local authorities. As the noble Lord pointed out, this would be particularly applicable where the deficiency on the housing revenue account was such that an increase of £26 would not wipe it out.
The advice which I have been given is that it is easier to express a wish on these matters than to put it into language which carries that wish into law. The effect of the Amendment would be to make it mandatory on every authority, whose accounts would not be balanced by a sum of £26 or less, to impose an in-crease. In fact, that would be contrary to the intention of the Bill, which is to

647
restore freedom to local authorities. It may well be that £26 is a reasonable figure in relation to circumstances. But whether or not it is a reasonable figure two, three, four or five years from now is very difficult to say. It might easily be more; it might less easily be less. But the point is that we are saying that the best way is to let the local authorities decide the circumstances.
If I may anticipate a further point on the rent reviews, the period between them will, of course, be a matter for the local authorities to decide in terms of the Bill. Some may favour a policy of frequent small increases, whereas others may prefer longer intervals, which would almost inevitably mean larger increases. Personally, I hope the second way is not the way in which it is done because that is the path which meets the greatest resistance. I want to make it perfectly clear that at this stage I am merely stating a personal opinion, but it is one which I have ventured already in discussions with various district authorities. I have expressed to them the correct path to follow when they are considering their annual budgets and determining what will be the level of rates for the ensuing year. That is an appropriate time to consider what the level of their rents will be for the ensuing year. If authorities do this, I think it is more likely that a district authority, the greater part of whose expenditure will be on housing, will find this is the right time in which to consider rent proposals. If this is done, then I think we shall almost naturally flow into a pattern where the balance between the ratepayer and the rentpayer will be more evenly held than has been the case in the past.
I shall not cease to urge upon local authorities the desirability of making this part of their financial arrangements. It has the merit that whatever the pattern of increase is, it is obviously easier for people to adjust themselves to these changes than if they are faced with something very much more substantial at intervals of two or three years. They would resent in one instalment something which they would have accepted if it had been divided by two or three over a corresponding period of years. I think that when, very soon, noble Lords opposite see the circular which we are issuing they will find that, while we may
648
have considerable differences in our general approach to the problem, there is not very much difference in the guidance which we should like to give. But we are of the opinion that administrative methods are the right way of giving guidance, and that we should not have to give advice in a Statute, particularly as with the best will in the world it has not been possible to put this advice in a form which would prevent it from being an order. It might be for the convenience of noble Lords opposite if I made arrangements, when the circular is issued, for a copy to be sent to the noble Lord, Lord Campbell of Cray, and if he desires to the noble Lord, Lord Lyell, so that if they are contemplating further action at the next stage they will be able at the earliest moment to consider their attitude.
Lord CAMPBELL of CROY: As my noble friend Lady Elliot of Harwood pointed out, most councillors in Scotland would welcome guidance on this subject. The noble Lord, Lord Hughes, has told us that the Government recognise this fact and that they intend to give it in the form of a circular. The difficulty is that there is no way of making sure that the guidance is followed. We will come back to this subject in the debate on whether the clause shall stand part, when we start inquiring into what the Government think will happen if a local authority simply takes no notice at all of the guidance which it is sent.
We have a chicken and egg situation, because, as I understand it—and this has arisen on previous Bills—the circular of guidance is usually not sent to local authorities until the Bill has been enacted, which is reasonable, because until the Bill has finally received the Royal Assent it cannot be assumed what will be in the Act. So that we shall have to wait, I imagine, until the Bill has completed its passage through Parliament before the circular sees the light of day. I hope it will also take into account other points which we shall be raising in later debates.
I am glad that the noble Lord has already raised this question of the rent review, and I will comment on it now in this debate rather than in a later one. Unless I misunderstood him, he was advocating that the review should take place

649
every year, and this I entirely agree with. I think we shall be very fortunate if every council in Scotland does that, because, as we know, there were some in the past who did not. They are new authorities, but none the less what has happened in the past can be repeated. It is interesting that when the equivalent Bill on rents and subsidies in England and Wales was passing through this House a few weeks ago, and it was suggested that the review should take place every three years, that proposal was rejected by the Government. I certainly accept a review every year, which is a great improvement so far as Scotland is concerned; I only hope it will be carried out. This leads us on into the debate which we shall come to later in this Committee stage. I am sorry that the Government do not feel able to accept this Amendment, because they say that although the words "take into account" appear in it a strict interpretation would make it mandatory in the circumstances visualised. I, therefore, beg leave to with-draw this Amendment.
Amendment, by leave, withdrawn.
4.55 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 3:
Page 2, line 13, at end insert (",but subject to the Note at the end of that Part.")
The noble Lord said: I beg to move Amendment No. 3, and I would suggest to the Committee that this is part of a group comprising Amendments Nos. 3, 5, 10, 11, 12, 13, 16 and 17. Six of these Amendments are paving Amendments for No. 16, and the remaining one is consequential. If it should have been the case that the Guinness Book of Records ever cast their eyes upon your Lordships' House, they would have found Amendment No. 16 perhaps worthy of consideration. It certainly is the first time I have ever in this place—and I certainly hope it will be the last—moved an Amendment which runs to 14½ closely printed pages. I hasten to assure your Lordships that it is not nearly so formidable as it looks. In order that I might diminish the consequences for myself, I took the precaution of sending an informatory letter about these Amendments to the noble Lord, Lord Campbell of Croy, on the assumption, which proved correct, that he would be interesting himself in these matters.
The main Amendment, No. 16, inserts a new Schedule 10A in the Housing Act 1974, for reasons which I shall explain to your Lordships shortly. Because of the extent of the further Amendments to the Housing Act 1974 which we are seeking to incorporate in the Bill, Schedule 1 is being split into two, and the miscellaneous Amendments at present in Part III of Schedule 1 will, together with the further Amendments we are now proposing, form a new Schedule 2A. In turn this necessitates purely consequential drafting Amendments to Clauses 1, 3, 11 and 13.
The main Amendment covers two separate points. The first and major part of the Amendment re-enacts Sections 109 to 116 and Schedule 10 to the Housing Act 1974 so far as they relate to Scotland. These provisions are concerned with the difficulties which can arise where local authorities are under an obligation to demolish property because of action they have taken under Housing Act powers. They deal with two separate types of case: first, where an authority is under a duty to demolish a building which has subsequently been listed as of special architectural or historic interest; and, secondly, where an authority changes its mind and wishes to rehabilitate houses which it had originally decided to demolish. These provisions were welcomed by all sides of this House when they were incorporated in the 1974 Housing Bill on Report. Some noble Lords may remember that the provisions were introduced into the 1974 Bill by your Lordships at a very late stage in the Bill's proceedings. Unfortunately, perhaps because of the haste with which they were drafted and the complexities of the slum clearance legislation, it has been found that there are certain ambiguities and errors in the present provisions which should be corrected.
The necessary Amendments were made in the Housing Rents and Subsidies Act 1975, again at Report stage in your Lordships' House, but since that Act applies only to England and Wales those Amendments cannot apply to Scotland, where the ambiguities and errors therefore remain. The present sections as applied to Scotland are cumbersome and difficult to follow, and the necessary Amendments to remove these ambiguities and errors would make them even more so. We have therefore decided that the sensible

651
course is to re-enact as Scottish provisions the sections and Schedules, as amended, and this is what we are now doing by the Amendments to Schedule 1 and the introduction of the new Schedule 2A. The effect is that the provisions of Sections 109 to 116 and Schedule 10 of the Housing Act 1974 will be re-enacted for Scotland as Schedule 10A to that Act. The re-enactment, like the original provisions, is lengthy and detailed. This is inevitable because of the complexities of the procedures, but I think that the provisions will now be much easier for local authorities and others concerned to follow.
I think that a reading of the new Schedule makes it very clear how complicated the situation is, and no one could say that it is one which any layman would understand in its entirety at its first reading.
The point is that it is more convenient and easier for those who have to operate the legislation to do it in this form, than if we were to make the situation worse by amending further the 1974 Act. So, while it perhaps makes a little more work for the printers and for your Lordships, it will make things easier for those who have to operate the legislation. I ought to assure your Lordships that the provisions are essentially unchanged. I asked my advisers why the word "essentially" was included, because to my simple mind to say that something was essentially unchanged meant that in some degree it was changed. The reasons for including that word are twofold. One is that there are two minor procedural changes which are taking place—and I will refer to these shortly—and the other is that if one were to make a comparison between the provisions in the existing Act and what is being re-enacted in the new Schedule, one would find that in some places the words are not exactly the same. Where it has been possible we have used words which conform to the Scottish law on the subject, rather than words which were more acceptable when they had to apply both North and South of the Border. But I assure your Lordships that where the language is slightly different it does not in any way change the effect, so the legislation remains exactly as it is.
I should mention the two minor procedural points in paragraph 10 of the new Schedule, which relates to the serv-
652
ing of notices on the making of the re-habilitation order. The first change is that these notices must now be served not only on those directly affected, but also on all others with an interest in other property in any clearance area, or housing treatment area, to which a rehabilitation order relates. The second is that my right honourable friend the Secretary of State has been given power to dispense with the service of notices in any particular case. Such dispensation will not be given lightly, but one can envisage circumstances where the requirement to serve notice on any person who received notice of the making of the earlier compulsory purchase order would be unduly onerous, and, indeed, unnecessary.
For example, one could have a very large clearance area, or a compulsory purchase order covering several acres, with a rehabilitation order covering a single tenement block of houses on the edge of the area. It is quite clear that the properties on the far side of the area covered by the compulsory purchase order, some hundreds of yards distant from the tenement to be rehabilitated, would be in no way affected by the proposed rehabilitation, and in such a case the authority should be relieved of the time and trouble of serving unnecessary notices.
The re-enactment excludes the original Section 113 which was never brought into effect and is now no longer necessary. The new provisions require my right honourable friend the Secretary of State to prescribe certain forms. Because of the procedural difficulties to which I have referred, no forms have yet been pre-scribed. Amendments made in the course of re-enactment will enable the necessary forms to be prescribed and will allow local authorities to use these powers if they wish to do so. The last part of the Amendment rectifies an omission in the Housing Act 1974; a consequential Amendment which should have been made when Section 17(4) was amended. I beg to move.
Lord CAMPBELL of CROY: I echo the sentiments of the noble Lord, Lord Hughes, when he says that he hopes he will never have to introduce so many pages of Amendments again in your Lordships' House. When I discovered only yesterday that 19 printed pages of Government Amendments had just been

653
circulated, I also felt that some of your Lordships would be alarmed about the limited time available in which to consider them. The noble Lord, Lord Hughes, was good enough to write to me, although that was not until Friday, when I was in the North of Scotland. Therefore, his letter, with the Amendments, did not reach me until yesterday. It is no good my making a forwarding arrangement to the North of Scotland, because anything that leaves here on a Thursday night or a Friday does not reach me before I leave home at 6 a.m. on a Monday morning to board the 7 a.m. plane to London. Mail is not delivered on Saturday. So many of us are in the position where we could not possibly consult interested bodies outside this House about this 14-page new Schedule.
I accept entirely, the noble Lord's assurance that this is simply a re-enactment to remedy defects in earlier legislation in a convenient way for those who have to operate it later and that in essence there is no new material introduced. I think "in essence" are the words rather than the word "essential". For my part, I do not dissent from the two procedural points which the noble Lord has described as being new, but for the moment I must reserve my position because there has been no opportunity for anybody, who might be affected by them, to comment. I must reserve my position in case there is need to raise questions about them at the Report stage in this House, or, perhaps, in another place later, although the opportunities in another place will be limited.
I should like to raise a point about Amendment No. 12 which, if I heard correctly, is one of those being discussed. I have no objection to the related Amendments to Amendment No. 16 being discussed. I do not wish to raise a point of substance, but I have an important constitutional point on Amendment No. 12. By that Amendment, the Bill is being extended on certain points to cover England and Wales. This is a Scottish Bill, but the device is being used to extend it to relate in certain matters to England and Wales. When the Bill was in another place it must have been certified by the Speaker as being a wholly Scottish Bill, with the result that it was referred to a Scottish Committee there,
654
upon which no English or Welsh Members sat. There is no opportunity in another place for English or Welsh Members to have a Committee stage on a point affecting England and Wales. Their only opportunity arises if this House decides to send a Message to the other place with any Amendments.
I should like to ask the noble Lord whether there are any precedents for ex-tending the Bill—I recognise that these may be fairly minor points—to England and Wales by an Amendment in this House after it has already been through its stages in the other place, including being certified as a wholly Scottish Bill. I think it is an important constitutional point and we ought to know whether this is a correct procedure. I would certainly wish it to be brought to the attention of Members of the other place who represent England and Wales.
On the main Amendment, No. 16 in this group, I accept that the Government are attempting to re-enact for the convenience of all those who are going to have to operate the system, particularly the rehabilitation orders, what was found to be less satisfactory. On this very short notice we have to accept from the Minister that he is not introducing any-thing new which we would find controversial.
Lord HUGHES: I am grateful for the fact that the noble Lord deliberately extended his remarks to enable me to reply. The position is that this does not, as I understand, raise any conflict with another place. The purpose of Amendment No. 12, which he rightly assumed I associated with the main Amendment No. 16, is to exclude England and Wales from the operation of the new Schedules which we are putting in. Therefore it remains a purely Scottish Bill, in that we are amending an Act which applies to England and Wales for Scottish purposes. The effect of Amendment No. 12 is not to apply to England and Wales any of the things which we are doing for Scotland, so I do not anticipate that this will cause any difficulty in another place. If I should be wrong on that I have no doubt I will hear about it in due course.
Lord CAMPBELL of CROY: The noble Lord might like to have a little more time on this question. If he is not briefed on it, I do not expect him to try

655
to answer straight away because it is a constitutional, and not an easy, point. Amendment No. 12 is not related to Schedules to other Acts; it is an Amendment to Clause 13 of this Bill, the clause stating that the Bill extends only to Scotland. The Amendment says, "With the exception of this section", which is at present one of the clauses, "and section 11 of this Act …" and then brings in England and Wales. I should like to accept what the noble Lord has just said but at first sight I find that difficult. I am perfectly ready to wait for a later stage, if that would be a more convenient time for him to give us a more considered explanation.
Lord HUGHES: I have just received another brief. Basically the position is as I have stated it. As I said in explaining the Amendment, we are in fact proposing Amendments which have already been accepted in the main Bill for England and Wales. We are re-enacting these in a purely Scottish section. Obviously, as the noble Lord has raised the question, I must take it up with my right honourable friend to ensure that we are not stoking up any difficulties for him when the Bill goes back to another place. I have a suspicion that when the Bill returns to another place with this mass of Amendments they will not recognise it as being their Bill at all, so obviously we do not want to make any unnecessary difficulties. I will certainly take up the point that the noble Lord, Lord Campbell of Croy, has raised, and perhaps it would be his wish that when it has been considered I may write and let him know the position.
Baroness ELLIOT of HARWOOD: I have tried to read this Schedule but, being only a Back-Bencher, I have not had the opportunity of reading the letter which the noble Lord, Lord Hughes, has sent to the noble Lord, Lord Campbell of Croy. The matter is quite incomprehensible to any ordinary person who knows anything about Scottish local government —and I think I know a certain amount about it. When the noble Lord says that it is going to make things easier for those who are concerned with housing operations in Scotland, I question that very much. I may be quite wrong; I do not know. As the noble Lord knows, a very controversial matter in connection with housing, is the question of compulsory purchase, whether of houses or of land.
656
Does Amendment No. 16, to which he has referred—and which he rightly said covers eight or nine pages—do anything about compulsory purchase? I see that it allows the alternative, either to agree to demolish or to change your mind and not demolish. I should have liked to hear the noble Lord make a Second Reading speech on this Amendment alone. Those of us who are involved in local government are, on this occasion, completely flummoxed by such a vast Schedule with apparently nothing but references to other Acts and things which have been done in the past or are likely to be done in the future. It is such a muddle that I wonder whether it can possibly be easier for those who are trying to administer local government.
Lord HUGHES: If the noble Baroness thinks that the new clause is difficult to understand I would suggest that if she has two or three days on her hands she should look at Sections 109 to 116 in the former Act and the two Schedules referred to, and take the Amendments which were made for England and Wales and apply them to these sections. I think she will discover that by comparison this new complicated Schedule is a child's guide to legislation. That is about as far as I can take the question of complexity or simplicity.
On the matter of compulsory purchase, as we are just re-enacting legislation which is already on the Statute Book the position in relation to a compulsory purchase order does not change. In the particular part to which the noble Baroness has referred we are enabling an authority which was going to demolish a house to change its mind and rehabilitate it. While it does not alter the compulsory purchase procedure in any way, it makes it possible for an authority to revoke a compulsory purchase order which was already made because it was going to demolish the house and which would not be necessary if the house was going to be rehabilitated. It might in fact be rehabilitated by its existing owner. While we are not altering the law in relation to compulsory purchase, we are making it possible for the circum-stances in relation to a compulsory purchase order to be changed if it is shown that it should no longer be necessary because the authority has changed its mind. The position as it stands is that

657
once an authority has made a compulsory purchase order because of a decision to demolish, it can change its mind even though the circumstances have changed which make it clear that the original decision was wrong. We want to make it possible for a second decision to emerge.
On Question, Amendment agreed to.
5.20 p.m.
On Question, Whether Clause 1, as amended, shall stand part of the Bill?
Lord CAMPBELL of CROY: As I indicated earlier, this clause raises the whole question of what is a reasonable rent, because the wording leaves it to local authorities to decide in the light of circumstances which they choose to take into account. It also raises the question of reviewing from time to time, but the noble Lord, Lord Hughes, gave what was from our point of view a satisfactory answer about what he thinks is the right time for reviews; that is, once a year. I would agree with that, provided it happens. The trouble is that there is nothing in the clause to bring it home to a wayward or laggard local authority, which might not have reviewed its rents for, say, four years or more, that it ought to review them.
As regards reasonable rents, how are these to be judged? Have the Government in mind some comparison with other expenditure by a household, or possibly a percentage of average earnings in Scotland? We must remember that we are not dealing with the less well-off tenants, because the rent rebate scheme ensures that no family in Scotland needs to pay a higher rent than it can afford. That situation was brought about by our 1972 Act which introduced the rebate scheme, so we are dealing with the better-off tenants and the question of what should be the standard rent.
In the Abstract of Regional Statistics some figures are given. Some of these have been obtained by sample surveys, but they are none the less reliable guidance from the Central Statistical Office. If the Government were thinking in terms of a comparison with expenditure by households, would they, for example, take into account the figures given for expenditure on tobacco and alcohol? It is
658
interesting to look at the year 1972 on which, for Scotland, it says that the average amount spent by the average house hold on tobacco was £1·72 and on alcohol £1·65. The average standard rent towards the end of that period—in November 1972—was £1·82; that is to say, the combined expenditure on tobacco and alcohol of the average family in Scotland was nearly twice as much as the standard rent. I think that noble Lords can come to their own conclusions on whether this is the kind of factor which ought to be taken into account when a council considers what is reasonable.
What will the Government be putting into the circular which the noble Lord, Lord Hughes, said would be going out? Is this kind of index of expenditure to be considered, or are there other indices which should be considered? I am glad that the noble Lord said in an earlier debate that the rent rebate scheme which was to be introduced was a very good one, and that we need not worry about that. We agree that provided the rebate scheme is properly operated there should be no question of hardship. It is simply a question of standard rents and of what should be taken into account as criteria. In putting this forward, I am assuming that the housing in question is in a good state and I am not considering substandard housing. In our debate on Second Reading, I mentioned that I understood that there were over 1,000 local authority houses in Glasgow which were empty. This has been stated by a Glasgow Labour Member of Parliament as being the situation in November and the noble Lord, Lord Hughes, gave us another figure of about 250. I understand that the apparent discrepancy results from the fact that 250 are available for letting, but that many others are impossible to let because they are not wanted owing to their state. Apparently, the total comes to about 1,000 or more, or did so in November. As I said, that was stated by a Glasgow Member of Parliament and was not contradicted in the other place.
Lord HUGHES: The figures which I gave were more up to date, and in the interval many of the houses which were not wanted in November have been let. This is very largely because of the changed circumstances in relation to the possibility of house ownership.
Lord CAMPBELL of CROY: I am glad to hear that. That is good news, because it has been one of the problems for local authorities and central government that there has been such a high proportion of houses in certain areas which were apparently unlettable. It helps me with my point that what we are considering for a standard rent is a house in a good state and not one of those houses which, unfortunately, have in some cases been the targets of vandalism. Those are not houses which could be offered by a local authority for a standard rent.
Then I come to another point. It is sometimes stated, and certainly was when the 1972 Act was first brought into effect, that people ought not to be asked to pay certain rents because of high unemployment in the area. That was of course a completely false argument, because the unemployed were covered by the rent rebate scheme. In Clydebank, in regard to which this was stated and where there was such high unemployment at the time, the unemployed were, on the whole, paying less rent when the 1972 Act came into force than they had been paying earlier, because a proper rebate scheme had been introduced for the first time. So, again, this question of the criteria for a reason-able rent ought no longer to take into account the question of whether there is unemployment or some similar situation in the area, provided the rebate scheme caters for that, as it should, and provided it is being carried out in the way the noble Lord, Lord Hughes, commended just now.
Lastly, may I ask what is to happen if a local authority is deemed by the Government not to be carrying out its duty under the clause? What would happen if it had failed to carry out any review of rents for some time and had made no adjustment; and if, clearly, the rents were intolerable from the point of view of the ratepayers who had to make up the difference? Are we going back to the system of an inquiry appointed by the Secretary of State for Scotland? If the inquiry found the council to be at fault, that would leave him to decide whether or not to make a surcharge. I remember that situation back in the early 1960s. It is not a very good system. It is exceedingly difficult for an inquiry to decide whether or not the local authority had
660
carried out its duties properly. Without guidance under the clause, and without criteria laid down by the Government both as to what is a reasonable rent and as to when a local authority is not carrying out its duty under the clause, a local authority will be in great difficulty. I ask for my own information whether, in the event of a local authority clearly not carrying out the purpose of the clause, the Government contemplate going back to the system of an inquiry and then a report to the Secretary of State. This is a very important clause, and I believe that it is the basic clause in the whole Bill. So I hope that the Committee will not mind my having taken a few minutes to put forward these important points arising from the Bill.
Lord HUGHES: The noble Lord has put a number of points in connection with the way in which the new rent policy is to operate, and has introduced a fascinating range of possibilities as to how a reasonable rent might be determined. I was interested to hear him say that the Amendments which are down apply only to houses which are properly up to standard. So far as I recall, he made no such distinction in regard to the 1972 Act because the mandatory £26 had to apply to all the houses in a local authority's housing revenue account, whether in a good, bad or indifferent state. I see the noble Lord, Lord Sandford, shaking his head in dissent, but he will remember that we are talking about the Scottish measure and that attention has already been drawn to the fact that the Scottish one is better than the English one.
Lord CAMPBELL of CROY: The noble Lord seems to have misunderstood me. The point about the 1972 Act is that it was an average and local authorities could charge a higher rent for superior houses and a much lower rent for houses which were less good. The £26 was an average and every house was not tied to that figure. We had a limit of £39 for any single house, but we shall come to that when we discuss the next Amendment. The noble Lord has misunderstood the position because, looking at local authority housing at that time, there was not, as we saw it, any authority which had a majority of houses which were in such a bad state as to have affected the £26 average.
5.32 p.m.
Lord HUGHES: No, I did not misunderstand and I pointed out that the £26 mandatory increase was an average. In so far as the noble Lord went out of his way when referring to the Amendment to except the position of the substandard house or the house which was in a poor state of repair, through vandalism or anything else, in the 1972 Act these houses had to be taken into account in determining the average, and because of their state they were diminished. The effect of maintaining a mandatory £26 average meant that the rents of houses had to be increased beyond what would be reasonable, simply because other houses were in a bad state. This is one reason why it is better to leave the determination of rent to the local authority, who know the circumstances. Given the will of the then Government to legislate along these lines, it would have been quite impossible for them to devise a method of saying, " What proportion of houses in a particular area will be in this state, how can we take account of this, and will this, perhaps, require an authority to have an average of £24 or £23 rather than £26? " That would have been an impossibility and it is one of the defects of legislating along these lines.
I come to the noble Lord's main point of how we shall determine a reasonable rent. He offered various suggestions, such as making a comparison between what the average family in Scotland spends on tobacco and alcohol. I wonder—because the noble Lord has never revealed his inner thoughts on the matter —which of these criteria he depended on and to what extent, when he found the figure of £26, apart from the fact that it was the figure adopted South of the Border. He might tell us what factors the Government as a whole took into account in determining the figure of £26. Certainly I should be happy if this became an element—not in determining rents because I am an owner-occupier and therefore do not pay rent— in relation to the payment of rates; for example, if the suggestion was that these items should be a percentage of what one spent on tobacco or alcohol. I should get off very lightly, being a non-smoker and almost a tee-totaller, but I should hate it if what I had to pay in one direction was deter-mined by what somebody else spent on
662
tobacco and alcohol. I hope that we shall not import into local rent-fixing the argument that those who do not smoke should pay a lower rent than those who do.
An obvious example as to the way in which it will be determined whether or not the local authority is fixing a reasonable rent is the way in which it holds the balance between the amount of money that it is taking in rent and the amount it is taking in rates. I think there is an increasing recognition on the part even of existing authorities—and I believe that it will certainly be the position of the new authorities—that they should fix a reasonable rent. The advantage of doing it at the time when they are doing their annual budgets is that they can see quite clearly then exactly what the consequences of action or no action on rents will be on the rating situation. Thus, I do not think that there is any formula for determining what a rate of increase should be for Scotland as a whole. I think, however, that an acceptable formula is that the local authority should not be loading too much at one time on one side or the other.
That applies equally to fixing too low a rent and to fixing too high a rent, if the consequence is fixing too low a rate or too high a rate. This brings me to the noble Lord's final point: what do we do if the local authority pays no attention, does not review rents and there-fore does not implement this measure? I confess that I should prefer to cross that bridge if we ever meet it. But I confirm that we should, indeed, if less formal pressures did not produce the desired results, be back to the position of local public inquiries into rents. We must keep this in perspective. We must remember that, despite all the criticisms of the previous local authorities, between 1958 and 1971, when there were 234 local authorities with housing powers, it was necessary to hold only four local inquiries. That is not an unsatisfactory position and I am certain that there are other fields of our activities where, if the proportion was as good as that, we should be very much happier. I am quite certain that what I am saying will not be a satisfactory answer to the noble Lord, but I am satisfied in my own mind that, at the end of the day, the result will be one which is capable of defence.

663
Earlier in our proceedings the noble Earl, Lord Cromartie, indicated that the new authority of which he is chairman, and which is a housing authority, had reviewed its rents and had decided what its policy is to be. Perhaps the noble Earl would like to give a practical indication of how his authority set about doing that, what it has considered a reasonable rent, what it has done in the matter and whether it took such things as the incidence of smoking or "boozing" into consideration in the fixing of rents?
The Earl of CROMARTIE: The noble Lord, Lord Hughes, will realise that the new district council could not yet have done anything, because it is not a statutory body until 16th May. It is still the old county council. We have a problem which does not affect many parts of Scotland, in that we have areas in which houses can bring in probably £300 to £400 a week, because we are an oil area. I do not think that we in Ross and Cromarty would care to take into consideration such matters as the number of bottles of whisky consumed by one family as compared with another. Goodness knows where we should end up if we started doing that! We in the oil areas have considerations which do not apply to many other parts of Scotland. This is a big industry and a great deal of money is involved. As for my district council, the rents have not been fixed and we are carrying on with the rents presently being charged by the county council.
Lord HUGHES: I am sorry, I must have misunderstood the noble Earl. I thought he said that the authority had decided. I know that some authorities have already decided what their policy will be in certain directions when they assume Office; after all, they will be the ones who will have to produce the budget for the ensuing year. I am sorry that—
The Earl of CROMARTIE: The noble Lord is right up to a point. We talked about it quite a lot, but we have not yet actually come down on any considerable alterations, although we may well do so.
Clause 1, as amended, agreed to.
Clause 2 [Limitation on increases in standard rents of individual houses]:
5.40 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 4:
Page 2, line 30 at end insert—
(" ( ) A local authority shall not increase the income receivable from the standard rents of ail the houses to which their housing revenue account relates so that the average rent increase for those houses is more than £26 in any period of 12 months.")
The noble Lord said: In Clause 2 the Government have reintroduced what was in the 1972 Act, in placing a limit of £39 on the increase in rent to be made for any individual local authority house. But in the 1972 Act there was also the limit—which we were discussing just now —to the average increase. A local authority could not increase rents as a whole in such a way that the average would be more than £26. In theory under this Bill, if a local authority were conscientious and enthusiastic, it could put up the rents of all its houses by £39—a greater increase than was possible under our 1972 Act. We believe that one of the means of instilling confidence among tenants— who, as we know, are easily alarmed at the thought of rent increases, particularly if there are scare stories, as there were in 1972—is to ensure that any increases are gradual, that they should be made by gradual steps each year. This is fair as between one area and another. A conscientious local authority might be so carried away as to put up all the rents by £39 under this clause, whereas another one, as we pointed out earlier, may make no change at all, even though it was further in the " red" in its housing revenue account than the first authority. Therefore I hope that this Amendment —if not the others—commends itself to the Government. I beg to move.
Lord HUGHES: The noble Lord, Lord Campbell of Croy, has undoubtedly put me in a very difficult position on this Amendment, which is not the sort of Amendment one customarily gets from the Opposition Front Bench in regard to matters of rent. In the past there has been a much greater enthusiasm for putting rents up rather than for putting them down—
Several Noble Lords: Oh!
Lord HUGHES: I am talking about the Front Bench opposite and the noble Lord, if I may say so, is not in so good a position as I am to determine what were the views of the Front Bench of which he has so recently become an occupant. It may not necessarily be his own view, but he has been at great pains to. point out how differently he did things in the 1972 Act from what was done in the other Housing Act.
Clause 2 of the Bill is essentially part of the counter-inflationary machinery. It is a long-stop with an element of flexibility about it; and this, as I have emphasised more than once, is what was so markedly absent from the 1972 Act. Apart from anything else, the Amendment is misplaced, because it could not properly be applied as an Amendment to Clause 2 which deals with the rent of individual houses. We could not, there-fore, import into that clause an Amendment which affected the rent of all houses. The noble Lord will undoubtedly have to withdraw the Amendment because, if nothing else, it is in the wrong place. However, I will certainly take the opportunity of drawing the attention of my right honourable friend to the effect of this Amendment, and make quite certain that I have his views on whether or not this is something which would be generally consistent with Government policy. We thought it desirable to make certain, as part of counter-inflationary procedure, that nobody should be subjected to an unduly large increase, and therefore the limit of £39, similar to the previous limit, is made for an individual house. Whether as a counter-inflationary measure it is necessary to impose an over-all limit on what the local authority might do is a different matter altogether. It comes close, not to imposing a rent freeze permanently, but to doing something of the same order, and the rent freeze which was imposed and which comes to an end on 15th May this year was for limited duration.
One possible objection would be if the counter-inflationary measures were not successful. The £26 limit overall might then turn out to be a guaranteed method of ensuring that the burden on the ratepayers should be increased disproportionately, which would make it impossible for the authority to hold a fair
666
balance between the rent payer and the ratepayer. While it may be possible, if we do this, to impose a limit on what the tenant should have to pay overall— and I accept that we are effectively doing that at the £39 figure—we cannot impose any limit on what is then going to be asked from the ratepayer. I certainly should want to look very closely at the principle which the noble Lord has put forward in this Amendment. I have no doubt, having started by saying that the Amendment is in the wrong place, that if he withdraws it at this stage we will see something like it again at Report stage, at which time I would be in a better position to give the Government's considered view on the principle of the Amendment.
Lord CAMPBELL of CROY: I am glad the noble Lord said that the Government will consider this point, but I must draw attention to the very strange attitude which the noble Lord has taken to this Amendment which states that no local authority in Scotland can put up its standard rent each year in such a way that the average would go up by more than £26. The noble Lord is saying that this could be some form of rent freeze, but that is the maximum under the 1972 Act by which any local authority could put up rents. That is what caused all the fuss. It is this amount of £26 which caused several local authorities to decide not to carry out the Act when it first came into being. It caused the Clyde-bank fuss and the £20,000 fine in the courts. It is a very strange change that the noble Lord should refer to this as a freeze when it is the maximum amount permitted in the 1972 Act.
Thus I am astonished, but it confirms what I said earlier. Here is the mythology about the 1972 Act now being exposed. There is this talk about freezing rents because they could be put up by only an average of £26 a year, which is the maximum amount allowed under our 1972 Act. The Amendment may be in the wrong place, but I put it into this clause because I wanted to point out that under this clause the maximum increase has been raised to £39, if any local authority wanted to do it; whereas under the 1972 Act, which still applies this day, local authorities cannot put up their rents, except by a gradual step, more than an average of £26.

667
If that is going to cause a rent freeze, it is very new language. I only wish that the noble Lord had been saying that two and a half years ago, because it might then have helped us a great deal with the troubles when some local authorities were regarding this as if it were iniquitous in terms of the amount of the rise permitted; some were going around giving the 1972 Act a blackened name—apparently, now, we find, quite unnecessarily. As the Government are to look at this matter again, and as I should like to reserve the position offered to me to raise it again at a later stage—
Lord HUGHES: Before the noble Lord concludes, may I say that his remarks emphasise the extent of the complete difference of approach on this matter between the previous Government and the present Government. We have taken the line that the local authority is the best judge of its circumstances. If we do that, we must accept that there will be cases where a local authority will find it perfectly proper to increase its rents by a figure which might exceed the average of £26. What we felt was that in an inflationary situation there could not be total freedom in this regard and that we ought to impose an upper limit, not in rent control procedure but as a counter-inflationary measure.
It is the wrong thinking in relation to local authorities which enables the noble Lord to make the comments he has just made. It assumes that every local authority has a problem similar to that of another authority; and that therefore every local authority would be compelled to raise its annual rents by £26 every year on average until it reached the point at which its housing revenue account was in balance. What may be a totally acceptable figure of £26 or £30 or £35 in one authority may be totally unacceptable in another. Even a figure of £20 might be unreasonable in another authority. It is to enable authorities to consider what is acceptable in their area in regard to their circumstances that we restore freedom.
The only restriction placed on the powers of local authorities is to set this upper limit of £39 per house. Within that limit any sensible reading of the Bill must lead to the conclusion that it permits some authorities—if they are so
668
inclined and think it right—to increase the rent by more than £26 on average. By the same token, it permits other authorities to fix lower levels if they think that is right. What I said was that it was almost getting back to a permanent rent freeze; in that it was being said to an authority—even when the circumstances might justify something bigger—" in no circumstances are you to exercise your judgment as to what is the proper balance between rentpayer and ratepayer." All the arguments on Second Reading and at this stage have been about the injustice which might be perpetrated on the ratepayers. This Amendment, whether it be a good or a bad one, certainly imports the provision that the tenant is to be protected at a particular level irrespective of the consequences to the ratepayer.
The noble Lord cannot have it both ways. He cannot argue the tremendous injustice which a local authority may be doing to its ratepayers by fixing the rents too low, and then saying in regard to another Amendment, "Ah, yes, but we will perpetrate a possible injustice to the ratepayers by compelling an average rent increase which may be less than you consider is reasonable in your circumstances." But it is an interesting point. When I said that the Government would have to look at this, I did not necessarily imply that we were going to accept it; but it seemed to me to be a completely new concept of control which was being suggested and which was going much further than we do in the Bill. I certainly feel that I am under an obligation to draw to the attention of my right honourable friend the Secretary of State the fact that if we were to say that no local authority was to increase its rents by more than £26 a year on average, we should look at whether or not it was something that we wished to do.
Lord CAMPBELL of CROY: I am grateful to the noble Lord for that long intervention before my closing words. But I can assure him that I have never heard it suggested that the maximum average increase in rents now permitted under the 1972 Act was unfair to the rate-payers of Scotland. That is a new concept that he has put forward. But what he is suggesting could be unfair as between tenants in different parts of Scot-land. The important point was when he

669
said that something might be "unacceptable" to some councils, and then went on to say that it might be considered "unreasonable". In 1972 the old Clyde-bank Council found the £26 maximum unacceptable. But I think that the ratepayers of Clydebank, to a man, did not think it was unreasonable.
My point is that, because of the way the Bill is now drafted, a local authority in one part of Scotland could put up all its rents by £39—a great deal more than it can now under the 1972 Act—while another authority which probably ought to put up its rents more, because it is, as a county, more out of balance, need not put up rents at all and might even put them down. It is a fact that reactions vary in different parts of Scotland, and the attitudes of councils cause unfairness not only to ratepayers but to tenants. As for the freedom of the local authorities, which is the one argument that the noble Lord raises to explain what he is doing, I must point out that between 1972 and 1974 we relaxed or abolished about 300 controls over local authorities in Scotland. This was done largely as part of the Local Government Reorganisation Bill, but there we did away with the previous requirement for local authorities to obtain approval for financial expenditure, and many other things, from central Government; so that our record of setting the local authorities free is there to be seen by anybody.
In this matter of housing, as we argued on earlier Amendments, it is helpful to many local authorities to be given a yardstick and a guide from central Government as to what to do. In order to be fair to tenants in different parts of Scotland, we believe that there should be these gradual increases which people can see beforehand will not be over-whelming, and which can be carried out by local authorities where necessary. As I indicated I was about to do before the noble Lord intervened, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 [Amendments relating to housing subsidies]:
5.58 p.m.
Lord HUGHES: I have already spoken to Amendment No. 5. I beg to move.
Amendment moved—
Page 2, line 36, at end insert (", but subject to the Note at the end of that Part.")—(Lord Hughes.)
On Question, Amendment agreed to.
Clause 3, as amended, agreed to. Clauses 4 to 7 agreed to.
Clause 8 [Termination of decontrol of controlled tenancies by reference to rateable value etc.]:
Lord HUGHES Lord HUGHES moved Amendment No. 6:
Page 6, leave out lines 13 to 17 and insert ("sections 34, 35 and 38 of the 1972 Act shall cease to have effect.").
The noble Lord said: I beg to move Amendment No. 6 and to associate with it Amendment No. 20 to Schedule 3. These are tidying-up Amendments. As drafted, Clause 8 provides for the repeal of Section 36(1)(a) of the 1972 Act. This takes general provisions about the con-version of controlled tenancies into regulated tenancies and relates them to con-trolled tenancies converted by means of the automatic decontrol provisions of Section 34 of the 1972 Act. Even though Section 34 of the 1972 Act is to be repealed, we are advised that it is inappropriate to repeal this provision. The effect of these Amendments is simply to leave Section 36(1) (a) in the Act. I beg to move.
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
6 p.m.
Clause 9 [Increases of rent under con-trolled tenancy permitted towards cost of repairs]:
Lord HUGHES Lord HUGHES moved Amendment No. 7:
Page 7, line 12, leave out from ("accruing") to end of line 14 and insert ("to the dwelling-house and to the other premises from the carrying out of the repairs.")
The noble Lord said: This is a purely drafting Amendment, the object of which is to make it clearer that where repairs are carried out to the benefit of a dwelling-house—for example, a flat in a tenement which is let on a controlled tenancy—then, even though repairs are not carried out to the dwelling-house itself, the landlord shall be entitled to recover 12½ per cent. of a proportion of the cost of repairs. The proportion is to be determined according to the extent to

671
which the repairs benefit the dwelling-house concerned. This is the usual provision, that where something is being done which is to the common benefit of all they should pay a due proportion. As the Bill stands, it is not clear that this is permitted to be done in the proper and customary way. I beg to move.
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 8:
After Clause 9 insert the following new clause: Eligibility for housing association grant and revenue deficit grant.
(" . The fact that a housing association is a society registered under the Industrial and Provident Societies Act 1965 and that its rules restrict membership to persons who are tenants or prospective tenants of the association and preclude the grant or assignation of tenancies to persons other than members shall not render it ineligible for housing association grant under section 29 of the Housing Act 1974 or for revenue deficit grant under section 32 of that Act.")
The noble Lord said: I should like to associate with this Amendment, Amendment No. 22 relating to the Title of the Bill. The effect of the new clause is to lift certain restrictions imposed by Sections 29 and 32 of the Housing Act 1974 on the payment of grants to housing associations registered with the Housing Corporation. These restrictions prevent grants being paid to those associations (defined in Section 18(1)(b) of the Act) which have full mutuality between tenants and members; that is to say, where the rules restrict membership to people who are tenants or prospective tenants of the association and preclude the grant or assignation of tenancies to people other than members. A similar Amendment to these sections of the Housing Act 1974 has already been made for England and Wales by means of Section 6 of the Housing Rents and Subsidies Act. I beg to move.
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 9:
Insert the following new clause—
Continuation of right to recover excess rent, etc., under Counter-Inflation Orders
(" . —(1) Article 5 of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) Order 1974 (recovery of excess rent) shall continue to have effect, for the purposes of that Order and of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) No. 2 Order 1974, so as to enable a tenant to recover
672
rent at any time when he is able to recover it in terms of that Article, whether or not Part II of the Counter-Inflation Act 1973 (under which the Orders were made) is in force.
(2)Article 8 of the Order first mentioned (jurisdiction of sheriff) shall continue to have effect, for the purpose of both of the said Orders, in respect of any proceedings commenced before the expiry of a period of two years commencing on 16th May 1975, whether or not Part II of the said Act of 1973 is in force.
(3)Section 38(2) of the Interpretation Act 1889 (effect of repeals) shall apply in relation to the said Orders as it applies in relation to Part II of the said Act of 1973 by virtue of paragraph 4 of Schedule 3 to that Act.")
The noble Lord said: The purpose of this new clause is to extend until two years after the expiry of the Counter-Inflation (Residential Rents—Private Sector) (Scotland) Orders 1974 on 15th May the right of a tenant to recover any rent which was in excess of what the landlord was legally entitled to charge under the Orders, and to extend the jurisdiction of the sheriff over any proceedings to recover any such excess rent. Article 5 of the Counter-Inflation Order to which I have referred at present provides that the tenant shall be entitled to recover any such excess rent for a period of up to two years after the date on which it was paid. Since Part II of the Counter-Inflation Act 1973 under which the Orders were made, will, however, expire in March 1976, it is necessary to provide that the right of the tenant to recover excess rent shall be extended to cover the period between March 1976 and 15th May 1977. I beg to move.
Lord LYELL: I should like to thank the noble Lord for explaining this Amendment to us. He has already pointed out that we have not had all the time we might have wished to consult all the bodies which might be interested in this Amendment. We should like to reserve our position on this Amendment, but subject to that we accept it.
On Question, Amendment agreed to.
Clause 10 agreed to.
Clause 11 [Miscellaneous and consequential amendments and repeals]:
Lord HUGHES: I have spoken to Amendment No. 10 already. I beg to move.
Amendment moved—
Page 8, line 19, leave out ("1") and insert ("2A").—(Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES: I beg to move Amendment No. 11.
Amendment moved—
Page 8, line 22, leave out from ("this Act") to end of line 23.—(Lord Hughes)
On Question, Amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Citation, commencement and extent]:
Lord HUGHES: I beg to move Amendment No. 12.
Amendment moved—
Page 9, line 10, at beginning insert ("With the exception of this section, and section 11 of this Act so far as relating to paragraph 13 of Schedule 2A to this Act (which extend also to England and Wales),").—(Lord Hughes.)
On Question, Amendment agreed to.
Schedule 1 [Miscellaneous and consequential amendments] :
Lord HUGHES: I beg to move Amendment No. 13.
Amendment moved—
Page 10, line 3, after ("Amendments") insert ("relating to Housing Revenue Account and Housing Subsidies").—(Lord Hughes.)
On Question, Amendment agreed to.
Lord HUGHES Lord HUGHES moved Amendment No. 14:
Page 12, line 24, at end insert—
("The Land Compensation (Scotland) Act 1973
9A. In section 27 (right to home loss payments where person displaced from dwelling)—

(1) For paragraph (d) of subsection (1) there shall be substituted the following paragraph—

"(d) the carrying out of any improvement to the dwelling or of redevelopment on the land by a housing association which has previously acquired the land and at the date of the displacement is registered."

(2)At the end of subsection (2) there shall be added (but not as part of paragraph (b)) the words "and in a case within subsection (1)(d) above, unless the displacement occurred on or after 31st July 1974 (on which date the Housing Act was passed).".

(3)At the beginning of subsection (9) there shall be inserted the words " Subject to subsection (2) above,".

9B. In section 34 (disturbance payments for persons without compensatable interests)—

(1) For paragraph (d) of subsection (1) there shall be substituted the following paragraph—

674

"(d) the carrying out of any improvement to a house or building on the land or of redevelopment on the land by a housing association which has previously acquired the land and at the date of the displacement is registered,".

(2) At the end of subsection (2)(c) there shall be added the following paragraph—

"(d) in a case within subsection (1)(d) above, unless the displacement occurred on or after 31st July 1974 (on which date the Housing Act 1974 was passed).".

(3) At the beginning of subsection (9) there shall be inserted the words "Subject to subsection (2)(d) above,".

9C. In section 80(1) (general interpretation) the following definitions shall be inserted in the appropriate places—
"housing association" has the meaning assigned to it by section 208(1) of the Housing (Scotland) Act 1966;
"registered", in relation to a housing association, means registered in the register of housing associations established under section 13 of the Housing Act 1974;").
The noble Lord said: This Amendment widens the scope of the whole loss and disturbance payments made by registered housing associations when they displace tenants in order to carry out redevelopment or improvement projects. The Land Compensation (Scotland) Act 1973 provided for home loss payments in Section 27 and for disturbance payments in Section 34. These were extended to tenants of registered housing associations for the first time by amendments contained in the Housing Act 1974. The effect of these Amendments to the Housing Act was to provide for payments in respect of displacements which took place at a time when the association was registered, but there was also a provision that it should apply to land acquired when the association was registered. It had not been our intention to confine payments to land which was acquired at a time when the association was registered: this was an accidental limitation, and we wish to remove it. This Amendment will benefit the people concerned. I beg to move.
Lord CAMPBELL of CROY: We had assumed this would be for the benefit of the housing associations, as the noble Lord has just said. Again, as these Amendments reached us only yesterday it is virtually impossible for anyone outside this Chamber, including the housing association movements, to have seen them. I assume that the Government will have had discussions with them beforehand, but

675
I must again reserve our position in case those concerned have any comments to make when they see these Amendments for the first time.
Lord HUGHES: The noble Lord will not be surprised to learn that some of these Amendments have arisen following representations that have been made to us.
On Question, Amendment agreed to.
5.59 p.m.
Lord HUGHES Lord HUGHES moved Amendment No. 15:
Page 12, line 30, at end insert—
(" 10A. In section 17 of the Housing Act 1974 (loans and grants limited to registered housing associations), at the end there shall be added the following subsection—
" (5) Nothing in subsection (1)(b) above shall prevent a local authority from making loans under section 152(2)(a) of the Housing (Scotland) Act 1966 to an unregistered self-build society, as defined in section 12 above, for the purpose of enabling it to meet the whole or any part of any expenditure incurred or to be incurred by it in carrying out its objects.".
10B. In section 119(3) of the Housing Act 1974 (option mortgages), for the word "section", in the second place where it occurs, there shall be substituted the word "subsection".").
The noble Lord said: This Amendment covers two separate points. The purpose of the Amendment to Section 17 of the Housing Act 1974 is to enable local authorities to make loans under section 152(2)(a) of the Housing (Scotland) Act 1966 to self-build societies, which have not been registered by the Housing Corporation, on or after 1st April 1975. Under Section 17(1) of the Housing Act 1974, the making of certain loans and grants to housing associations is limited from 1st April 1975 to those associations registered with the Housing Corporation under Section 13 of that Act. Subsection (1)(b) of Section 17 provides that loans under Section 152(2)(a) of the Housing (Scotland) Act 1966, which enables local authorities to make grants or loans to housing associations, are restricted in this way.
This Amendment removes that restriction in the case of self-build societies. Although it is a basic principle to assist only registered housing associations, we recognise that self-build societies, which are housing associations by definition in Section 208(1) of the Housing (Scotland)
676
Act 1966, should not be required to go through the complicated system of registration and deregistration. This is because the self-build societies are inevitably transient by nature, since on completion of the project the houses are transferred to individuals and the society wound up. But the Government wish to encourage an expansion of self-build activity alongside the development of registered housing associations. The Housing Corporation may lend to unregistered self-build societies under Section 9(1)(b) of the 1974 Act.
The Amendment to Section 119 of the Housing Act 1974 is quite straight-forward. That section provided for amendments to the option mortgage scheme introduced under the Housing Subsidies Act 1967. It had originally been intended to bring the whole of Section 119 of the Housing Act 1974 into force on a single day. But in the event this has not happened, and there will need to be at least two commencement orders for the section. Paragraph 10B therefore provides, for the sake of clarity, that the appointed day for the purposes of subsection (3) is the date on which subsection (3) comes into force. I beg to move.
On Question, Amendment agreed to.
6.11 p.m.
Lord HUGHES: I have already spoken to Amendment No. 16, which I now beg to move.
Amendment moved—
Page 12, leave out lines 31 to 37 and insert—
(" 11. Sections 109 to 116 of the Housing Act 1974 and Schedule 10 thereto shall cease to have effect as respects Scotland.
12. After section 116 of the Housing Act 1974 there shall be added the following section—
"Provisions for Scotland in place of sections 110 to 116 and Schedule 10.
116A. Schedule 10A to this Act shall have effect for the Purpose of making provision for Scotland in relation to the matters dealt with in section 110 to 112 and 114 to 116 of this Act and Schedule 10 thereto.".
13. In section 131 of the Housing Act 1974 (short title, extent, etc.), in subsection (5), after "108" there shall be inserted "110 to 116", and in subsection (6), for the words " Section 107 of this Act extends "there shall be substituted the words "Sections 107 and 116A of this Act extend".
14. After Schedule 10 to the Housing Act 1974 there shall be inserted the following Schedule—

SCHEDULE 10A
PROVISIONS FOR SCOTLAND IN PLACE OF SECTIONS 110 TO 116 AND SCHEDULE 10

PART I
CONSENT TO DEMOLITION OF LISTED BUILDINGS IN HOUSING ACTION AREAS, ETC.
Buildings subject to compulsory purchase orders for demolition subsequently listed
1.—(1) In this paragraph, references to a compulsory purchase order are to a compulsory purchase order made, before or after the coming into operation of this paragraph, under the provisions of—

(a) Part III of the Housing (Scotland) Act 1966, or

(b) Part I of the Housing (Scotland) Act 1969, or

(c) Part II of the Housing (Scotland) Act 1974,

in so far (as respects such an order made under the said Act of 1969 or 1974) as the order relates to a building acquired for demolition under those provisions.
(2)Where a building to which a compulsory purchase order applies is (at any time after the making of the order) included in a list of buildings of special architectural or historic interest under section 52 of the Town and Country Planning (Scotland) Act 1972 or under any corresponding enactment repealed by that Act, the local authority making the order or its successor in the exercise of its functions relating to the order may, subject to sub-paragraph (3) below, apply to the Secretary of State (and only to him) under section 53 of the said Act of 1972 for consent to the demolition of the building.
(3) No such application may be made by virtue of sub-paragraph (2) above after the expiry of the period of three months beginning with the date on which—

(a) the building is included on the said list, or

(b) this paragraph comes into operation, whichever is the later.

(4) The following provisions of this paragraph shall have effect where—

(a) an application for consent has been made under the said section 53, by virtue of sub-paragraph (2) above, and has been refused, or

(b) the period of three months mentioned in sub-paragraph (3) above has expired without the authority having made such an application,

and in this paragraph "relevant date" means the date of the refusal or, as the case may be, of the expiry of the period of three months.
(5) If, at the relevant date—

(a) the building has not vested in the authority, and

678

(b) no notice to treat has been served by the authority under section 17 of the Lands Clauses Consolidation (Scotland) Act 1845, in respect of any interest in the building,

the compulsory purchase order shall cease to have effect in relation to the building and, where applicable, the building shall cease to be comprised—

(i) in the case of an order referred to in sub-paragraph (1)(a) above, in a clearance area;

(ii) in the case of an order referred to in sub-paragraph (1)(b) above, in a housing treatment areas;

(iii) in the case of an order referred to in sub-paragraph (l)(c) above, in a housing action area.

(6) Where a compulsory purchase order ceases to have effect, by virtue of sub-paragraph (5) above, in relation to a house which does not meet the tolerable standard, the authority concerned shall, in respect of the house, forthwith—

(a) serve a notice under section 24 of the Housing (Scotland) Act 1969 (power of local authority to secure repair of house in state of serious disrepair), or

(b) make a closing order under Part II of the Housing (Scotland) Act 1966,

whichever is appropriate.
(7) Where sub-paragraph (5) above does not apply, the authority shall cease to be subject to the duty imposed by the enactment specified in head (a), (b) or (c) of sub-paragraph (1) above to demolish the building, and in relation to any interest in the building which at the relevant date has not vested in the authority the compulsory purchase order shall have effect as if—

(a) in the case of a house, it had been made and confirmed under Part VII of the Housing (Scotland) Act 1966, and

(b) in any other case, it had been made and confirmed under Part VI of the Town and Country Planning (Scotland) Act 1972.

(8) If the building, or any interest in the building, was vested in the authority at the relevant date, it shall be treated—

(a) in the case of a house, as appropriated to the purposes of Part VII of the said Act of 1966, and

(b) in any other case, as appropriated to the purposes of Part VI of the said Act of 1972.

(9) As respects a building falling within subparagraph (2) above, where no notice to treat has, at the date on which the building is included in the list referred to in that subparagraph, been served under section 17 of the Lands Clauses Consolidation (Scotland) Act 1845, the authority shall not serve such a notice until after the relevant date.
(10) In this paragraph and in paragraphs 2 and 3 below, unless the context otherwise requires—
"housing treatment area" means an area defined under section 4(1) of the Housing (Scotland) Act 1969;

679
"housing action area" means an area defined under section 15 or 17 of the Housing (Scotland) Act 1974;
and other expressions which are also used in the Housing (Scotland) Act 1966 have the same meanings as in that Act.
Buildings acquired by agreement for demolition subsequently listed.
2 . —(1) Where any of the enactments specified in paragraph 1(1) above applies to a building purchased by a local authority by agreement, and at any time (before or after the coming into operation of this paragraph) the building is included in a list of buildings of special architectural or historic interest under section 52 of the Town and Country Planning (Scotland) Act 1972 or under any corresponding enactment repealed by that Act, the authority or its successor in the exercise of the powers conferred by the enactments specified in paragraph 1(1) above may, subject to sub-paragraph (2) below, apply to the Secretary of State (and only to him) under the said section 53 for consent to the demolition of the building.
(2) No such application may be made by virtue of sub-paragraph (1) above after the expiry of the period of three months beginning with the date on which—

(a) the building is included on the said list, or

(b) this paragraph comes into operation, whichever is the later.

(3) Where—

(a) an application for consent has been made under the said section 53, by virtue of sub-paragraph (1) above, and has been refused, or

(b) the period of three months mentioned in sub-paragraph (2) above has expired with-out the authority having made such an application,

the authority shall cease to be subject to the duty imposed by the enactment specified in head (a), (b) or (c) of paragraph 1(1) above to demolish the building, which shall be treated—

(i) in the case of a house, as appropriated to the purposes of Part VII of the Housing (Scotland) Act 1966, and

(ii) in any other case, as appropriated to the purposes of Part VI of the Town and Country Planning (Scotland) Act 1972.

Residual cases where buildings subject to clearance orders are subsequently listed
3 . —(1) Where a building, to which a clearance order made under Part III of the Housing (Scotland) Act 1966 continues (by virtue of Schedule 5 to the Housing (Scotland) Act 1969) to apply, is, at any time after the confirmation of the order, included in a list of buildings of architectural or historic interest under section 52 of the Town and Country Planning (Scotland) Act 1972 or under any corresponding enactment repealed by that Act, the local authority making the order or its successor in the exercise of its functions relating to the order may, subject to sub-
680
paragraph (2) below, apply to the Secretary of State (and only to him) under section 53 of the said Act of 1972 for consent to the demolition of the building.
(2) No such application may be made by virtue of sub-paragraph (1) above after the expiry of the period of three months beginning with the date on which—

(a) the building is included in the said list, or

(b) this paragraph comes into operation,

whichever is the later.
(3) Where—

(a) an application for consent has been made under the said section 53, by virtue of sub-paragraph (1) above, and has been refused, or

(b)the period of three months mentioned in sub-paragraph (2) above has expired with-out the authority having made such an application,

the building shall cease to be comprised in a clearance area and to be subject to the clearance order.
(4) Where a house, which does not meet the tolerable standard, ceases to be included in a clearance area by virtue of sub-paragraph (3) above, the authority concerned shall, in respect of the building, forthwith—

(a) serve a notice under section 24 of the Housing (Scotland) Act 1969 (power of local authority to secure repair of house in state of serious disrepair), or

(b) make a closing order under Part II of the Housing (Scotland) Act 1966,

whichever is appropriate.
(5) Where a payment in respect of a house has been made by a local authority under section 49 of the said Act of 1966, in connection with a clearance order, and by virtue of this paragraph the house is excluded from the clearance area, then ,if the person to whom the payment was made is entitled to an interest in the house he shall, subject to sub-paragraph (6) below, repay the payment on demand to the authority or to its successor as aforesaid.
(6) No repayment shall be required by virtue of sub-paragraph (5) above in a case where the authority have made a closing order in respect of the house and—

(a) no appeal has, within the time allowed, been made against the making of the order, or

(b) such an appeal has been made and has failed.

PART II

  REHABILITATION ORDERS
  Application and effect of rehabilitation orders
  4 . —(1) This Part of this Schedule applies to any house which—

  (a) is included in a clearance area under Part III of the Housing (Scotland) Act 1966, or

  (b) is included in a housing treatment area under Part I of the Housing (Scotland) Act

  681
  1969, where the resolution for the area provides for the demolition of the house,

  being a house which—

  (i) has been purchased by agreement or compulsorily at any time before 2nd Dec-ember 1974 under section 38 of the said Act of 1966 or section 7 of the said Act of 1969 (provisions regarding acquisition of land in such areas), or

  (ii) is subject to a compulsory purchase order which was made under the said section 38 or under the said section 7 (but not confirmed) before 2nd December 1974 and which, before 2nd March 1975, has been confirmed in accordance with Schedule 3 to the said Act of 1966 or (as the case may be) in accordance with Schedule 1 to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 as applied by the said section 7, or

  (iii) has been included in the area by virtue of section 41 of the said Act of 1966 or section 9 of the said Act of 1969 (land already belonging to the local authority).

  (2) Where any house to which this Part of this Schedule applies in terms of sub-paragraph (1) above does not comply with the full standard as defined in paragraph 13 below and, in the opinion of the local authority, it is capable of being and ought to be improved to that standard, the authority may make and submit to the Secretary of State an order (in this Part of this Schedule referred to as a "rehabilitation order") in relation to the house.
  (3) In addition to applying to any house to which this Part of this Schedule applies in terms of sub-paragraph (1) above, a rehabilitation order may, if the local authority think fit, be made to apply to any other relevant land, as defined in paragraph 13 below.
  (4)On the date on which a rehabilitation order becomes operative, the local authority shall cease to be subject to any duty, to demolish or secure the demolition of buildings on any land included in the order, imposed by Part III of the said Act of 1966 or Part I of the said Act of 1969.
  (5) Where by virtue of sub-paragraph (4) above a local authority are freed from the duty to demolish or secure the demolition of a house which does not comply with the full standard, the authority shall take such steps as are necessary—

  (a) to bring the house up to the full standard, or

  (b) where it is not vested in the authority, to ensure that it is brought up to that standard.

  (6) A local authority may accept under-takings for the purpose of sub-paragraph (5)(b) above from the owner of a house, or any other person who has or will have an interest in a house, concerning works to be carried out to bring it up to the full standard and the time within which they are to be carried out.
  Miscellaneous provisions relative to rehabilitation orders
  (5) Where the owner of a house to which this Part of this Schedule applies in terms of paragraph 1(1) above, and which does not comply with the full standard, requests the local authority to make a rehabilitation order in respect of the house, and the authority refuse to make the order, they shall give him in writing their reasons for so refusing.
  (6) Where a local authority have made a rehabilitation order they shall not, until after the date on which the order becomes operative or on which confirmation of the order is refused,

  (a)serve notice to treat, under section 17 of the Lands Clauses Consolidation (Scotland) Act 1845, in respect of any land included in a compulsory purchase order made and confirmed by virtue of section 38 of the said Act of 1966 or section 7 of the said Act of 1969 which includes notice land as defined in paragraph 13 below; or

  (b) demolish, without the consent of the Secretary of State, any building on notice land.

  7 . —(1) Where—

  (a) land included in a compulsory purchase order, made and confirmed by virtue of the said section 38 or the said section 7, is comprised in a rehabilitation order, and

  (b) the rehabilitation order becomes operative in respect of that land, and

  (c) no interest in the land has vested in the local authority before the date on which the rehabilitation order becomes operative, and

  (d) neither the local authority nor a previous local authority entitled to serve a notice to treat in respect of any interest in the land under section 17 of the said Act of 1845 have done so before that date,

  the compulsory purchase order shall cease to have effect in relation to that land on that date, and if the land is included in a clearance area or housing treatment area, it shall cease to be so included.
  (2) On and after the date on which a rehabilitation order becomes operative, in a case where sub-paragraph (1) above does not apply in relation to an area of land comprised in that order, any compulsory purchase order relating to that land and confirmed by virtue of the said section 38 or the said section 7 shall have effect in relation to any interest in that land which at the said date was not vested in the authority—

  (a) in so far as it relates to a house, as if it had been made and confirmed under Part VII of the said Act of 1966, and

  (b) in so far as it relates to land other than a house, as if it had been made and confirmed under Part VI of the Town and Country Planning (Scotland) Act 1972.

  (3) Where a rehabilitation order becomes operative in respect of an area of land and any interest in that land is vested in the

  683
  local authority at the date when the order becomes operative—

  (a) any such interest in a house shall be treated as appropriated to the purposes of Part VII of the said Act of 1966, and

  (b) any such interest in land other than a house shall be treated as appropriated to the purposes of Part VI of the said Act of 1972.

  8. A rehabilitation order may be made and confirmed notwithstanding that the effect of the order in excluding any land from a clearance area or from a housing treatment area is to sever that area into two or more parts; and in any such case the provisions applicable to the area in Part III of the said Act of 1966 or in Part I of the said Act of 1969, relating to the effect of a compulsory purchase order when confirmed and to the proceedings to be taken after confirmation of such an order, shall apply as if those parts formed on clearance area or housing treatment area, as the case may be.
  Procedure for making and confirming rehabilitation orders
  9. A rehabilitation order shall be made in the prescribed form and shall describe, by reference to a map—

  (a) the houses to which, in terms of paragraph 4(1) above, it applies, and

  (b) the other land to which, in terms of paragraph 4(3) above, it applies.

  10 . —(1) Before submitting a rehabilitation order to the Secretary of State for confirmation, the local authority, except in so far as the Secretary of State directs otherwise—

  (a) shall publish in one or more news-papers circulating within their district a notice in the prescribed form stating that such an order has been made and describing the land to which it applies, and naming a place where a copy of the order and its accompanying map may be seen at all reasonable hours, and

  (b) shall serve on any such person as is specified in sub-paragraph (2) below a notice in the prescribed form stating—

  (i) the effect of the rehabilitation order,

  (ii) that it is about to be submitted to the Secretary of State for confirmation, and

  (iii) the time within which the manner in which objections to the order can be made.

  (2) The persons mentioned in sub-paragraph (1)(b) above are—

  (a) every person on whom notice was served of the making by virtue of section 38 of the said Act of 1966 or section 7 of the said Act of 1969 of any compulsory purchase order which, at the date of its confirmation, included any land subsequently comprised in the rehabilitation order ;

  (b) every successor in title of such a person;

  (c) every owner, lessee and occupier of the relevant land other than a tenant for a month or a period less than a month;

  684

  (d) creditors in heritable securities over relevant land, so far as it is reasonably practicable to ascertain such persons; and

  (e) every person on whom notice would have been required to be served under head (c) or (d) above whose interest has been acquired under the said section 38 since the clearance area was declared to be such an area or (as the case may be) under the said section 7 since the housing treatment area was declared to be such an area.

  (3) A notice under this paragraph shall be accompanied by a statement of the grounds on which the local authority are seeking confirmation of the rehabilitation order.
  (4) A notice under this paragraph shall be served in accordance with section 5(3) of and paragraph 19 of Schedule 1 to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947.
  11.—(1) If no objection is duly made by any of the persons on whom notices are to be served under paragraph 10 above, or if all objections so made are withdrawn, the Secretary of State may confirm the order with or without modifications.
  (2) If any objection duly made is not withdrawn, the Secretary of State, before confirming the order, shall cause a public local inquiry to be held or afford to any person by whom an objection has been duly made and not withdrawn an opportunity of appearing before and being heard by a person appointed by the Secretary of State for the purpose.
  (3) After considering any objection not withdrawn and the report of the person who held the inquiry or of the person appointed under sub-paragraph (2) above, the Secretary of State may confirm the order with or without modifications.
  (4) The Secretary of State may require any person who has made an objection to state the grounds of the objection in writing, and may disregard the objection if he is satisfied that it relates exclusively to matters which can be dealt with by the tribunal by whom any compensalion is to be assessed.
  (5) The Secretary of State's power to modify a rehabilitation order includes power, subject to sub-paragraph (6) below, to extend it to any notice land.
  (6) The Secretary of State shall not extend the application of a rehabilitation order to any land unless he has served on the following persons, namely—

  (a) the local authority who made the rehabilitation order,

  (b) every owner, lessee and occupier of that land, except a tenant for a month or a period less than a month, and

  (c) so far as it is reasonably practicable to ascertain such persons, on the creditor in every heritable security over any such land,

  a notice stating the effect of his proposals, and has afforded them an opportunity to make their views known.
  12. Paragraphs 6, 15 and 16 of Schedule 1 to the acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 (notification challenge of validity and date of operation of

  685
  orders) shall apply in relation to rehabilitation orders as if—

  (a)any reference to a compulsory purchase order were a reference to rehabilitation order and any reference to compulsory purchase were a reference to rehabilitation under this Part of this Act;

  (b)any reference to the acquiring authority were a reference to the local authority ;

  (c)the reference in the said paragraph 6 to paragraph 3 of that Schedule were a reference to paragraph 10 of this Schedule;

  (d) the reference in the said paragraph 15 to any such enactment as is mentioned in section 1(1) of that Act were a reference to this Part of this Schedule;

  (e) the references in the said paragraph 15 to any requirement of that Act and to any requirement of that Schedule thereof were references to any requirement of this Part of this Schedule and of any provision of that Act (or that Schedule, as the case may be) applicable to the rehabilitation order;

  (f) the references in the said paragraphs 15 and 16 to a certificate under Part III of that Schedule were deleted.

  Interpretation of this Part of this Schedule
  13.—(1) In this Part of this Schedule, unless the context otherwise requires—
  "clearance area" means a clearance area under Part III of the Housing (Scotland) Act 1966;
  "full standard", in relation to a house, means the standard of a house which—

  (a) meets the tolerable standard;

  (b) is in a good state of repair (disregarding the state of internal decorative repair) having regard to the age, character and locality of the house; and

  (c) is provided with all of the standard amenities ;

  "house" has the same meaning as in the Housing (Scotland) Act 1966 ;
  "Housing treatment area" means a housing treatment area under Part I of the Housing (Scotland) Act 1969 ;
  "local authority" has the meaning assigned to it by section 1 of the Housing (Scotland) Act 1966 ;
  "notice land" means land in relation to which a notice is to be served under paragraph 10 above;
  relevant land" means—

  (a) land in the clearance area or housing treatment area (as the case may be), including land which has been included in that area by virtue of section 41 of the said Act of 1966 or section 9 of the said Act of 1969 (land already belonging to the local authority); or

  (b ) land surrounded by or adjoining that area which the local authority or a previous local authority entitled to purchase the land under section 37 of the
  686
  said Act of 1969 have determined to purchase (whether or not it has been so purchased);

  "standard amenities" and "tolerable standards" have the same meanings as in the Housing (Scotland) Act 1974.
  (2) The references to the Housing (Scotland) Act 1966 in section 197 of that Act (power to prescribe forms, etc.) shall include references to this Part of this Schedule.

  PART III
  APPLICATION OF ENACTMENTS RELATING TO COMPENSATION ON COMPULSORY PURCHASE, ETC., TO CASES UNDER PART I OR PART II OF THIS SCHEDULE.
  Compensation
  14.—(1) It is hereby declared that where, under Part I or II of this Schedule, a compulsory purchase order is to be treated as made under Part VII of the Housing (Scotland) Act 1966 or Part VI of the Town and Country Planning (Scotland) Act 1972, compensation for the compulsory acquisition of the land comprised in the complusory purchase order is to be assessed in accordance with the provisions applying to a compulsory acquisition under the said Part VII (or as the case may be, the said Part VII).
  (2) Where, under Part I or II of this Schedule, land or any interest in land within any area is to be treated as appropriated by a local authority to the purposes of the said Part VII, compensation for its compulsory acquisition shall (where it increases the amount) be assessed or re-assessed in accordance with the provisions applying to a compulsory acquisition under the said Part VII.
  (3) Where, under paragraph 2 of Part I of this Schedule, or under Part II thereof, any interest in land acquired by a local authority by agreement (after the declaration of a clearance area, housing treatment area or housing action area which relates to that land) is to be treated as appropriated for the purposes of the said Part VII—

  (a) compensation shall (where sub-paragraph (2) above would have increased the amount) be assessed and paid as if the acquisition were a compulsory acquisition, under Part III of the Housing (Scotland) Act 1966, Part I of the Housing (Scotland) Act 1969 or Part II of the Housing (Scot-land) Act 1974 (as the case may be), to which the said sub-paragraph (2) applied; but

  (b) there shall be deducted from the amount of compensation so payable any amount previously paid in respect of the acquisition of that interest by the authority.

  (4) Where sub-paragraph (2) or (3) above applies, the local authority shall serve on the person entitled to the compensation a notice in the prescribed form giving particulars of the amount of compensation payable in accordance with the provisions applying to a compulsory acquisition under the said Part VII, and if the person served does not, within twenty-one days from service of the notice, accept the particulars, or if he disputes the

  687
  amount stated, the question of disputed compensation shall be referred to the Lands Tribunal for Scotland.
  (5) The notice shall be served not later than six months after—

  (a) the relevant date, as defined in paragraph 1(4) of this Schedule, or

  (b) the date on which the rehabilitation order becomes operative for the purposes of Part II of this Schedule,

  (as the case may be), and paragraph 19 of Schedule 1 to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 (service of notices) shall apply to the notice.
  (6) Sub-paragraph (2) above shall be left out of account in considering whether, under sections 117 and 118 of the Lands Clauses Consolidation (Scotland) Act 1845, compensation has been properly paid for the land; and accordingly sub-paragraph (2) above shall not prevent an acquiring authority from remaining in undisputed possession of the land.
  (7) Where sub-paragraph (2) above makes an increase in compensation to be assessed in accordance with sections 56 to 60 and 63 of the said Act of 1845 (absent and untraced owners)—

  (a) a notarial instrument executed under section 76 of that Act before the latest date for service of a notice under sub-paragraph (4) above shall not be invalid because the increase in compensation has not been paid, and

  (b) it shall be the duty of the local authority, not later than six months after the said date, to proceed under the said sections and pay the proper additional amount into the bank.

  (8) Any sum payable by virtue of this paragraph shall carry interest at the rate prescribed under section 40 of the Land Compensation (Scotland) Act 1963 from the time of entry by the local authority on the land, or from vesting of the land or interest, whichever is the earlier, until payment.
  (9) In this paragraph, references to an increase in compensation shall be read as if any payments under—

  (a) section 49 of the Housing (Scotland) Act 1966, section 11 of the Housing (Scotland) Act 1969 or section 30 of the Housing (Scotland) Act 1974 (payments in respect of well-maintained houses and payments to owner-occupiers),

  (b) section 160 of the said Act of 1966 or section 38 of the Land Compensation (Scotland) Act 1963 (allowances to persons displaced),

  (c) sections 18 to 20 of the said Act of 1969 (payments to owner-occupiers and others in respect of unfit houses purchased or demolished), and

  (d) section 34 of the Land Compensation (Scotland) Act 1973 (disturbance payments for persons without compensatable interests),

  were, to the extent that they were made to the person in question, compensation in respect of the compulsory purchase.
  (10) In this paragraph "prescribed" means prescribed by order made by the Secretary of State for the purposes of this paragraph; and any order under this sub-paragraph shall be contained in a statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
  Extension of time limits for exercising powers under certain compulsory purchase orders
  15. In section 116 of the Lands Clauses Consolidation (Scotland) Act 1845 (time limits for exercising powers under compulsory purchase orders), there shall be added at the end the following paragraph—
  "For the purposes of this section no account shall be taken of any period during which an authority are, by virtue of Schedule 10A to the Housing Act 1974 (which relates among other things to buildings in clearance or housing treatment or housing action areas), prevented from serving notice to treat under section 17 of this Act.".".
  15. In Schedule 14 to the Housing Act 1974, in paragraph 2(b) (transitional provision concerning loans by the Housing Corporation), for "(c)" there shall be substituted " (e) ".").— (Lord Hughes.)
  On Question, Amendment agreed to.
  Schedule 1, as amended, agreed to.
  Lord HUGHES: I beg to move Amendment No. 17.
  Amendment moved—
  Transpose Part III of Schedule I to after Schedule 2 as Schedule 2A (Miscellaneous and Consequential Amendments).—(Lord Hughes.)
  On Question, Amendment agreed to.
  Schedule 2 [Phasing of rent increases where rent for dwelling-house under regulated tenancy is registered]:
  6.13 p.m.
  Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 18:
  Page 15, line 6, at beginning insert—
  ("In the case of rents registered after the commencement of this Act,").
  The noble Lord said: An anomaly arises in the private sector of rented housing in Scotland from this Bill, and the effect of this Amendment would be to remove that anomaly. The anomaly has arisen from additions to the Bill that were made by the Government at very short notice at the Report stage in the other place, so that there was no opportunity for the situation to be realised in time to be raised there. The anomaly can best be demonstrated by what has happened with one group of about 3,000 houses in the Glasgow area which are owned and managed by one company

  689
  They were all built between 1928 and 1932 and are of the same size and design.
  In 1973, with, I understand, the full support of the rent assessment officers and other authorities, all the 3,000 tenants were offered an agreement by the company which would raise their rents in three stages, arriving at the third stage at a figure of £240, which was £100 less than the fair rent which had been assessed from test cases. In Scotland, the fair rent system operates in the private sector but not of course in the public sector. A large number of the tenants signed, leaving only 57 who did not. This relieved the rent officers and the appeal committees of an immense amount of work and also, I think, of public expenditure.
  However, what then happened? By accident of timing the rents of those who signed the agreement were frozen—that is nearly 3,000—and the rents of the 57 who for one reason or another did not were frozen. By the late additions which the Government made to the Bill in the other place, the opportunity of evening up the rents and removing the anomaly was removed. What it means is that the large majority of these tenants, who were told at the time that they would do better by signing the agreement because they were going to pay a rent at the third stage considerably less than the fair rent —and they were advised I think by everybody from whom they sought advice, including I understand the rent officers, to go ahead with this—have, quite by chance, ended up by being worse off. They were told that they would do better if they signed the agreement and by the chance timing of the freeze they have unintentionally been let down, as they may well feel. The 57 tenants are in a better position by accident.
  Moreover, this did not happen in England and Wales. There was a similar situation there, but the Bill on rents and subsidies for England and Wales has not made it impossible for this anomaly to be removed. I must make it clear that there is no question of the amount of money involved here being more than negligible. The point is one of principle. And no hardship arises because the tenants who cannot afford to pay the rents are covered by the rents allowance system. But it is the future we must
  690
  think about. The situation could be damaging on the prospects of obtaining similar agreements between landlords and tenants, which both sides of your Lord-ships' House recommend, if the accident which has happened here were allowed to damage tenants' confidence in agreements. Every one agreed that the agreements were welcome. They avoided overloading the rent assessment system. But with this glaring anomaly of the small minority who did not sign the agreement appearing to benefit in relation to the others, what are the chances of many tenants in the future signing agreements of this kind? This situation will be reached when the three-year period ends.
  The Government must surely want to avoid the trouble and expense of many unnecessary cases going through the rent assessment system, which was avoided for this three years. Otherwise, in Scotland it might well mean additional rent officers having to be taken on because of the greatly increased work. All this would add to public expenditure, which need not be incurred, so I hope the Government will look at this matter. The difficulty could be avoided quite simply by this Amendment. If the Government think they have a better way of doing it, of course I shall be only too happy, but I understand that this Amendment provides one way of removing this anomaly which could upset the confidence of a large majority of tenants in a position of this kind in the future. If the Government, who I know are familiar with this problem—they have had many points to consider under this Bill—cannot accept this Amendment today, I hope they will at least consider putting down one of their own for the Report stage. I beg to move.
  Lord HUGHES: As the noble Lord, Lord Campbell of Croy, knows, and as was indicated in his remarks, this has been an exceedingly difficult problem to deal with. It is not confined to the one company, notwithstanding that they are the biggest single example. The result of the Amendment, which is not one which the Government can accept, would be to draw an arbitrary distinction in the post-freeze period between those steep increases which should be moderated by a counter-inflation limit and those in-creases which should not be so affected— because the £1·50 is a counter-inflation

  691
  limit. The question whether the limit should apply would be determined solely by reference to the date of registration. The limit of £1·50 a week in any year was included in the Bill as a counter-inflation safeguard similar in purpose to the limit on individual increases for public sector houses. It is an essential part of our provisions to enable rents to be increased progressively, where appropriate, in the post-freeze period. The Amendment would bring about a completely inequitable situation after 15th May, with the dividing line drawn by reference simply to the date of rent registration between a majority of tenants who would benefit from the overall limit or increase and a minority who would not.
  Under the terms of the Bill, all tenants who had rents registered during the freeze will begin phasing on 16th May. In most cases, their phasing will run until May 1977. If this Amendment were accepted, during that period certain tenants would face increases of more than £1·50 per week, while other tenants, who happened to have had their rents registered after 15th May, would be protected from increases above that amount.
  In moving his Amendment, the noble Lord has had in mind the benefits, or otherwise, to the interests of the particular group of tenants of the unnamed company. I gather from the attitude of certain tenants that they would regard the company not only as unnamed but as unmentionable! The Government have to attempt to take a wider view and consider equity for private tenants throughout Scotland. It cannot reasonably be expected that the Government will make an exception of a particular group of tenants who had their rents registered during the freeze, although I infer from the Amendment that the noble Lord sympathises with the general purpose behind the limitation of rent increases.
  The noble Lord has referred to the 57 tenants of this particular company. But it is not only these 57 tenants who are affected. I cannot give the total number throughout Scotland, but the number of tenants affected is very much greater than the 57 tenants of this particular company. I am told that the figure is probably 500 tenants throughout Scotland—not 500 tenants of this com-
  692
  pany, but 500 tenants who are in a position which is comparable to that of the tenants of Western Heritable. However, I know that today the draftsman has been working on another Amendment. I mentioned this to the noble Lord, Lord Campbell of Croy, earlier in the day. However, as the Amendment had not been submitted to me for consideration before I came to this House, I do not know whether the Amendment will be helpful in any way to the position to which the noble Lord has referred. If. therefore, as I advise, the noble Lord withdraws this Amendment, it would be completely without prejudice to his position. I will ensure that the new Amendment is sent to the noble Lord and to his noble friend Lord Lyell as quickly as possible so that they may have the earliest opportunity of deciding how they wish to deal with this matter.
  Lord LYELL: May I thank the noble Lord for the speed and ability with which he has answered, or tried to answer, some of the queries which have been raised. I am interested to learn that he believes that 500 tenants all over Scotland are in a comparable position. No doubt the noble Lord is nearer to the truth than we are; we understood that the number was nearer 100. Nevertheless, there is a point of interest here—that rent officers all over Scotland must be having a fair time negotiating what is, or what is not to be, the proper rent. The extra cases which the noble Lord has pointed out will be a fair burden upon rent officers. May I stress that in the representations which have been made to us the companies have stressed how much they admire and appreciate the good work which has been done by the rent officers. Since the noble Lord has told us that the draftsman is working on a further Amendment today, I think that we can reserve our position and look at the matter again on Report.
  Lord CAMPBELL of CROY: I am glad that the noble Lord is looking at this point. My noble friend has indicated that, because the numbers are few, we did not think this anomaly would cause much difficulty for others. However, I beg leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  6.26 p.m.
  Lord HUGHES Lord HUGHES moved Amendment No. 19:
  Page 15, leave out line 40 and insert ("(b) the period of delay shall begin ").
  The noble Lord said: I beg to move Amendment No. 19. This is a minor Amendment to the paragraph of Schedule 2 which deals with cases where a rent agreement is made after the commencement of the Bill and within two years a rent is registered. The paragraph provides that in such a situation, phasing shall begin from the date upon which the rent agreement took effect. To give effect to this intention, a period of delay is denned in the Bill as it stands as a period of two years, beginning from the date when the rent agreement took effect. In any case where the maximum increase of £1·50 per week applies, it does not follow that the period of delay should be limited to two years. This Amendment simply omits from the definition the reference to a period of two years.
  If I may be strictly out of order, I should be remiss if I failed to deal with the fact that I have recollected that I omitted to mention a point which the noble Lord raised earlier. I do not wish the House to be misled. In his reference to the circular, the noble Lord assumed that it would not be sent out until the Bill had completed its passage through Parliament. In fact, because of the time factor, we intend to send out the circular while the Bill is going through Parliament. If local authorities are to do what both the noble Lord and I want; namely, to have the necessary consideration of the rental position along with the budget position, they ought to know the views of the Government on this matter as early as possible. Therefore, we are taking the rather exceptional step of assuming that Parliament will eventually pass the legislation, and this circular will give preliminary guidance on the matter. The usual detailed circulars which follow the passing of legislation will be issued, and if the eventual form of the Bill should necessitate any change to the preliminary circular—which one would expect to be only minor—this would be done.
  This has got absolutely nothing to do with the Amendment. However, I thought that it would be wrong to let the House
  694
  remain under the impression that the circular is not to be issued for some weeks. To return to order, I beg to move this Amendment.
  Lord CAMPBELL of CROY: On this Amendment, as on others, I wish to reserve the position of those outside this House who cannot have had a chance to see the Amendment and who may have comments to make.
  On the other point which the noble Lord has raised, I welcome the fact that he has chosen this opportunity to tell us that the circular will be sent out before the Bill is enacted. Governments always take a risk when they do that; I believe that the Government will be accused of trying to beat the gun before Parliament has finally decided what should happen. For my part, provided that the noble Lord is trying to describe what the Government consider should be the criteria for deciding upon reasonable rents and how often the review should be carried out, may I say, without prejudice to what may be done in Parliament, that I do not mind how soon the circular is sent out, because it will give us an opportunity to discuss it before this Bill has completed its passage through Parliament.
  On Question, Amendment agreed to.
  Schedule 2, as amended, agreed to.
  Schedule 3 [Repeals]:
  Lord HUGHES: I spoke to this Amendment when I dealt with Amendment No. 6. I beg to move.
  Amendment moved—
  Page 19, leave out line 42.—(Lord Hughes.)
  On Question, Amendment agreed to.
  Lord HUGHES: I beg to move Amendment No. 21 which is purely a drafting Amendment listing the repeals of the provisions of the Housing Act 1974 and of the Land Compensation (Scotland) Act 1973, which were made by the earlier provisions of the Bill as amended in Committee today.
  Amendment moved—
  Page 20, column 3, leave out lines 6 to 11 and insert—
  ("In section 29(1), the words "other than associations falling within section 18(1)(b) of this Act".
  In section 32(1), the words "or paragraph (b)".
  Sections 109 to 116.
  Schedule 10.
  In Schedule 13, in paragraph 42(1)(a), the words from "and at" to the end of head (a), and paragraph 43(1)(b).")—(Lord Hughes.)
  On Question, Amendment agreed to.
  Schedule 3, as amended, agreed to.
  In the Title.
  Lord HUGHES: I spoke to this Amendment on Amendment No. 8. I beg to move Amendment No. 22.
  Amendment moved—
  Line 5, after ("1974") insert ("to render certain housing associations in Scotland whose rules restrict membership to tenants or prospective tenants and preclude the grant or assignation of tenancies to persons other than members, eligible for housing association grant and revenue deficit grant under the Housing Act 1974;").—(Lord Hughes.)
  On Question, Amendment agreed to.
  The Title, as amended, agreed to.
  House resumed: Bill reported with the Amendments.

  CONSOLIDATED FUND (No. 3) BILL
  Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read la.

  SPECIAL CONSTABULARY: LAW ENFORCEMENT
  6.32p.m.
  Lord BOURNE Lord BOURNE rose to ask Her Majesty's Government whether they will promote legislation to form specialised sections of the special constabulary for electric power, gas, sewage and docks, in order to ensure essential supplies to the public and that the law is enforced in the ordinary way without the help of the Armed Forces. The noble Lord said: My Lords, in the defence debate which we had on 17th December 1974 it was suggested that, as well as a threat from overseas, there would also be a threat from within. In the debate on the 26th February 1975 on subversion and extremism, the noble Lord, Lord Chalfont, and many other speakers spelt out that threat in some detail. My Question to Her
  696
  Majesty's Government stems straight from those debates. If there is a possible threat from within, it is the duty of the Government to meet it, and to my mind it should be in the form of a deterrent as well as being deployed if events justify it. Let us hope that the obvious readiness of the Government will act as an effective deterrent and that the means will never have to be used.
  I suggest that the planned order of meeting this threat—which will probably take an unexpected form, in the same way as a future war is unlikely to be like the last —should be in three stages. There will be no harm, by the way, in the general public knowing what these stages are; in fact, I see advantage in bringing the subject into the open.
  The essence of these three stages is that use of the Armed Forces is left to the last, and if the Government reach Stage 3 they will almost certainly have to win—either that or give up democracy, and there can be no question about that. The stages I suggest are as follows: first, the Special Branch. This is a long-range look out and a short-range look out, and the other Whitehall agencies are MI5 and MI6. I have probably got the titles wrong because I am a little out of date, but your Lordships will know what I mean.
  The second stage is action by the police and the special constabulary. The third stage—probably after the declaration of an emergency—is the regular Armed Forces—the Navy, Army and the Air Force, and the TAVR and their equivalents—the Royal Naval Volunteers and the RAF Volunteer Reserve. It would be very serious if the emergency had to be declared: far better, obviously, if the police force, in the second stage, kept law and order. Just before I go on to the next part of the argument there is the question of Government control. The various organisations involved should be under Government control and the control of no one else. We are a democracy and must use the power of Parliament and the Government.
  With regard to the possible tools for the various jobs, we are fortunate in this country in having an efficient Special Branch. I could tell your Lordships a story about Malaya and Singapore, but I shall not burden you with it. They felt

  697
  the same in the end. The Special Branch can watch subversions of all kinds—Communist, terrorist, hijackers, IRA, and so on, and we can leave it to them.
  We now come to the police. Unfortunately, from the emergency point of view the force is divided into small county and borough forces, but this cannot be helped and we have to deal with it as it exists. The Government can immediately use a police force and a Special Constabulary, which is a great advantage. In most cases, the police can deal with subversion, particularly if specialised sections of special constabulary are formed as I propose. Our best defence against subversion is a general awareness, and outvoting the subversives so that rightminded people, including the leaders of the trade unions, have control. But if they resort to force and violence the Government must have control of the forces to deal with them. Unfortunately, the police are under strength at the present moment and are also badly strained in dealing with crime and demonstrations. I am told that the average working week in the police force is 60 hours. It is too much.
  With regard to the special constabulary as it exists today, it is difficult to get figures, but at present they are badly under strength. In 1969, according to the Report of the Police Advisory Board to the Home Secretary, their establishment was about 114,000. Their strength in 1973 according to the Report of the Chief Inspector was approximately 23,000, plus 1,800 women. The importance of the "Specials" was evidenced by the fact that there was only one paragraph in the Inspector's Report referring to them, and that was only seven lines long. They are called out by the chief constables and are trained in basic duties. About 12,000 of them turn out regularly, but they have the powers of a constable when they are on duty, and incidentally they are unpaid. I fail to see why they should not be paid level with the TAVR, who are paid for drills and weekend training. In fact they are treated—this will be challenged—as a "poor relation" and they ought not to be.
  There is then civil defence. Unfortunately, this organisation was destroyed about five or six years ago and in my opinion that was a false economy. It is
  698
  now only a rump and the liaison officers at local authorities have beautiful map rooms but nobody to man them. Incidentally, we cannot bring the force back into being again. I come now to the Armed Forces. They will do their duty, however unpleasant, and they will not strike; nor will the police. It is a pity that the technicians of electric power, gas and sewage are not subject to the same regulations about not going on strike, as I believe they were before the war. After all, they provide essential services to the public.
  However, we have to deal with a situation as we find it. The Services are not so effective as they were 50 years ago at the time of the General Strike. The power stations have become so technical that they cannot be run so efficiently by the Services. I very much doubt whether the Services would get more than 80 per cent. of power from the power stations. The Armed Forces are also very badly stretched. The TAVR, the equivalent Naval Volunteer Reserve and the Royal Air Force Volunteer Reserve no longer have internal security as one of their roles, except possibly for a few. Their main duty is to reinforce BAOR. They are not like the old Territorial Army which, whatever its faults, was in close touch with, and good friends of, the people. It was also a very good intelligence organisation. I am told that the TAVR are probably not to be called out until the Regulars have been called out. Their role should be examined. Whatever they do, the Armed Forces are likely to be called strike-breakers, but all they will be doing if they are so employed is maintaining essential services to the public.
  My Lords, turning to the volunteers, we all understand their value. This country has been practically built on the volunteer system, so we are quite accustomed to it, especially if the volunteers have been carefully selected and have among them people with specialised skills. But they suffer from the defect that they are not designed to defeat violence by themselves, nor have they the powers of the constable and the backing of the court. They must be invited by the Government of the day. They clash with my earlier observation with regard to the Government, and nobody else, having control of all organisations. In short, there is no place for volunteers in my scheme.
  I propose that the special constabulary should have their role widened. I believe they should have specialised sections to deal with electric power, gas, sewage and the docks. I feel sure many young men are likely to join these specialised sections. Retired specialists of these kinds will want to serve their country in an emergency, and their age can be allowed for. I do not think it matters very much. I have complete confidence about recruiting. They will thus have the powers of a constable and, as such, will not need protection. If this step requires legislation, the sooner it is enacted the better. These people have to be trained like everyone else.
  If I am told that it is not the job of a policeman to run a power station— although I think otherwise—my reply is, "Nor is it the duty of the Navy, the Army or the Air Force. They are trained as fighters to win battles, not to ensure essential supplies to the public, but they will also obey orders". My whole scheme aims to keep down the temperature, and to ensure essential supplies to the public; that is to say, you and me. It will also be subject to the law. The people will understand that. It is much less provocative than the use of the Armed Forces or volunteers. Indeed, if these forces have to be employed the emergency may become a crisis, with all that that involves.
  My Lords, I come now to my conclusions. First, I ask Her Majesty's Government the Question on the Order Paper. The police and trade unions would naturally be concerned, and would be consulted before legislation was introduced. At the end of the debate on subversion, which was opened by the noble Lord, Lord Chalfont, my noble friend Lord Harris of Greenwich said two things which impressed us all. First, my noble friend said:
  "It is the responsibility of the police to deal with violence…."
  Later on, my noble friend said:
  "The police neither want nor need the assistance of self-appointed …".—[Official Report, 26/2/75 ; Col. 950.]
  I cannot think of the word he used, but I think he used the word "bodies". The fact remains that this country can and may be brought to a standstill without violence by the withholding of essential supplies to the public.
  I imagine that the police will welcome any addition to their powers to deal with difficult situations. They are already badly strained, handling crime and demonstrations and so on. The trade unions are largely patriots who, in a crisis, must put the interests of the general public before those of their members. They do not, however, seem to be in full control of individual unions and, consequently, are not always able to protect the public. Of course, they will insist on safeguards, but they will be as determined as Parliament, the Government and the majority of the people on the defence of this country against a threat from within. If the reply of the Government is that they are not contemplating the raising and training of specialised sections of the special constabulary in the broad way that I have described, I should be grateful to hear from my noble friend Lord Harris of Greenwich, who is to wind up, what they are planning to do. My procedure would be to meet a crisis within the law, not by declaring an emergency, and not by employing the Armed Forces.
  Lord WILLIS: My Lords, will the noble Lord, Lord Bourne, allow me to ask a question? I am interested in the question of supplying essential services in time of need. Would the noble Lord also be in favour of the special police having a section which could supply surgeons and medicine?
  Lord BOURNE: My Lords, one can add to my list. I have deliberately kept it to only four sections, but one could have any number of others. I am sure that the noble Lord, Lord Willis, is right in his suggestion, but I have not included surgeons in my list for that reason. My plan aims at keeping down the temperature, and at keeping the public supplied with the essentials of life within the law. The Government cannot deal with the possible threat any more than can the Regular Forces who constantly train and have to meet a threat by doing nothing. I hope it is taking action.
  6.50 p.m.
  Lord BARNBY: My Lords, when I saw this Question from the noble Lord, Lord Bourne, on the Order Paper it appealed to me, particularly because it is put by an eminent General who has held high and responsible command. In

  701
  the event, he has used arguments and reasons skilfully deployed and convincing in their character. I hope the noble Lord will receive strong support from my own Front Bench, and also that the Government spokesman will encourage us in the hope that the Government will give it strong consideration. How much more worth while is this debate than the debate which yesterday occupied so much time in an attack on traditions, conventions and patriotic respect, in which I was burning to participate, to try to pour scorn on the suggestion of dismantlement of our historic procedure. This debate today is of a much more important character.
  This is a time of dissidence, violence and disruption, and there is an urgent need for additional support of a civilian character. We might even have had some help in ensuring that the clocks in the Palace of Westminster were giving the right time; or we might have found some volunteer to bring some copies of Hansard here, which we would find helpful. But this era is one when we find the undoubted influence of Communism militating against what ought to be the natural instinct of a citizen to support law and order and give voluntary service in any way that he can. This dissidence is dismaying. It is in the Press, in the media, in the faculties of universities, even in schools. I was shattered when I read yesterday that universities are encouraged to have indoctrination by what is known as lightning disruption. I had not heard of that before, but it appears to be a new method of prosecuting disruption. It even comes into the schools. It is terrifying to read of the disruption that sometimes occurs in schools.
  I was shattered today also to read on the front page of The Times three items in large print. The first was a warning by the Head of Scotland Yard against complacency over extremists. The second was a hooded UVF spokesman stating that their organisation killed two UDA officers. Another item read:
  "Prisoner shot dead as IRA gunmen storm jail".
  There is not much law and order there. That makes me think of the subversion debate which your Lordships' House con-
  702
  ducted some two to three weeks ago. I was out of the country at the time. I regret that I missed hearing it, but I read it and was immensely impressed by it. That certainly showed the contemptuous disregard for law. I think of the case of Northern Ireland, where the disbandment of the "B" Specials must certainly have contributed a good deal to the intensity of the disruption there, an absence of the civil as against the military, whose different roles are most important, as the noble Lord, Lord Bourne, has emphasised.
  I have just returned from a visit to Southern Africa, which included Rhodesia. Looking from that distance, when one read of the continual murders and disorders in the North of Ireland, one wondered what can be the thinking of people in other countries as to the ability of Britain to govern a small province of 1½ million people without having this terrible carnage. In Rhodesia there is complete law and order. It is impressive that there the civilian security auxiliary forces, both black and white, are ready to help the civil authority. In passing, I may say that a Minister in the Cabinet of the South African Republic said that the conflict in Africa is not black versus white, but Communist versus non-Communist.
  That is why I feel that this support which the noble Lord has recommended would at least go some way towards meeting our need. I think it was folly disbanding the Yeomanry and reducing the Territorial force. It is further evidence of the view of the Government responsible; that is, that the need for provision against internal disorders is declining instead of, as it is, increasing.
  There has been diffidence in some quarters about discussing this question. In fact there were expressions of sensitivity about it. I can see no reason for that. I can see strong reasons for supporting the Question put by the noble Lord. There is a one-world movement. It is dangerous. I find myself perplexed. Apparently instead of there being a worldwide Communist movement, there is a tendency, I read, towards strengthening individual countries' Communist movements. That may be the right interpretation of movements which are taking place. Anyhow, it emphasises more strongly the need for a civilian auxiliary force such as my noble friend is recommending.

  703
  Such might easily have helped in the situation we hear about in Glasgow. I have not been to the city to see it, but think of the waste being uncollected for nine weeks! What an appalling situation in a civilised country to let the world read about!
  I submit that National Service is something that should be encouraged; that is, community work, not military National Service. How much better we should be as a nation if we had obligatory service of some kind, community service in whatever form it is put forward. That is why I have the greatest pleasure in supporting the noble Lord in this Question, and I repeat that I hope it will receive some intense consideration by the Government.
  6.59 p.m.
  Lord HUNT: My Lords, I need to start with an apology to the House and in particular to my noble friend Lord Bourne for not being in my seat when he started his speech. I noticed that he had completed about one and a half minutes and I trust that I did not miss anything especially vital that he said beforehand. I may also have to offer an apology to the House and to the noble Lord, Lord Harris of Greenwich, because the timing of the start of this Unstarred Question has somehow gone haywire. On a previous calculation, I thought the debate would be safely finished before I had to leave for a previous engagement. If I should have to leave, I apologise in advance.
  I am glad that my noble friend Lord Bourne tabled this Unstarred Question and that he elected to do so at this time. I shall not follow the noble Lord, Lord Barnby, for whom I share the affection of the whole House, in being drawn into the contentious question of the B Specials. My remarks are really focused on the terms of the Motion and the need to keep running the wheels of industry in its vital key areas in times of a crisis in Britain. I had already noted that my noble friend Lord Brookeborough was here to speak from the Northern Ireland point of view in any case, so, sorely tempted though I am, I will control myself and not be drawn by the noble Lord, Lord Barnby.
  It is hardly necessary to make the point that the subject of this Question—the eventuality in which it is set—is a deli-
  704
  cate and difficult one. But I do so simply to express my view that there are dangers in skating over and underrating it, as indeed there are in magnifying and overexposing it. I am not at all sure (and I told my noble friend in advance that I would say this) that the proposal embodied in the Unstarred Question of the noble Lord is appropriate to the undoubted need for action which could arise in certain circumstances. But I am sure that it was right and courageous that such a Question should be tabled and that it is in the public interest that an answer should be given by the Government regarding their preparedness for the kinds of emergency which the noble Lord, Lord Bourne, has in mind.
  It is particularly timely that the Unstarred Question should have been put down so soon after the debate initiated two weeks ago by the noble Lord, Lord Chalfont, but I am not returning to the area which that debate covered. In the minds of many people around the country I believe there to be a good deal of complacency, on the one hand, and a good deal of anxiety, perhaps overanxiety, on the other, about the dangers represented by militant extremists in our industries to which the noble Lord, Lord Chalfont, drew our attention, among other things, the other night. It would be pointless to try to quantify those elements of feeling because, of course, against that there is a vast area of sound, good common sense, but to the extent that there is both a good deal of complacency and of anxiety about a breakdown of the essential supplies and services in this country, neither of those sentiments is a healthy symptom for the body politic.
  In my view what is badly needed is a widely shared blend of realism, concerning the political, as well as the economic, dangers of industrial disruption, and confidence that the Government of the day have both the will to exert their democratic authority to sustain the essential services and supplies under conditions of order and that they have the means so to do. One does not have to be an admirer or a supporter of General Sir Walter Walker, and others like him, in order to share the concern and at least to understand the frustration of many informed and thinking people in this country at this time when we

  705
  see lawful authority wilting under pres-sure from extremist minority groups in neighbouring European countries.
  It is important, and consistent with the prevailing demand for more open-ness in Government, to call on the Government for reassurance about both the will and the means. To all this I should like to add my own concern about those voluntary initiatives. I have mentioned that of General Sir Walter Walker. I was indeed relieved to read—because I could not stay to the end of the debate —remarks covering that area which were made from the Front Bench the other night by the noble Lord, Lord Harris of Greenwich. However well-intentioned these initiatives may be (and I am sure they are) which are borne of frustration and a lack of confidence in established authority, and which stem from a lifetime of professional leadership, it is something which can get out of hand in certain circumstances, raising the temperature of a tense situation to boiling point. I believe that such organisations could even take the law into their own hands for lack of a lead from the Government.
  As to the means proposed by my noble friend Lord Bourne for keeping power supplies and vital communications operating, I here tend to part company with him. I question the wisdom of attaching the responsibility for the services, which he has listed in his Unstarred Question, to the police. There is no precedent for this kind of duty to be laid on police officers, whether regular or reserve. If and when it is right to put any uniformed forces, equipped with the appropriate skills, into these key areas of industry, then I think it wiser to stick to precedent and to look to the Armed Forces and their specialist reserves. It may be thought that the essential difference between my noble friend and myself is simply a matter of the colour of the uniform, but I believe that this is a matter of established precedent or, if you like, tradition, and is very important in this highly sensitive area.
  As an old soldier, I have no more liking than the noble Lord for the employment of troops, sailors or airmen in an industrial situation. I have no liking for this for the reason that the noble Lord gave; that is, the training and main priority job of the Armed Forces. But
  706
  I object also because it creates tremendous bitterness in the industrial scene, a bitterness which could easily enlarge the trouble.
  My Lords, I like even less the notion of raising a new and purpose-built force for these jobs within the ambit of the police forces. Whereas the use of troops is always a recourse of last resort, it has become accepted, albeit reluctantly, as a result of custom. I very much doubt the acceptability, either to the police or to the public, of new and special forces from that quarter to intervene upon the industrial scene. From that standpoint, to which I adhere, my questions for the Government are: Have they the necessary pool of skills from the regular forces, and from those various categories of reservists which still exist? We have had doubt thrown upon that situation by the noble Lord, Lord Bourne. Could the reservists be called up under the present law and used in industrial emergencies? Could they be used in time? If the answer is "No" to any or all of those questions, then, surely, the question of enabling legislation, of a big "thinkagain" about what has been done to reduce and remove the various categories of reserve, should be rethought and recruitment should begin again.
  My Lords, there is, as the noble Lord, Lord Bourne, mentioned, the possibility of compiling a register of skilled civilian volunteers who would be competent to man the key industries and who would have police protection afforded to them when they were called upon by the Government in a crisis. Here again I differ from my noble friend Lord Bourne. My view is that whereas this would, at least for the time being, be politically unwise, it would almost certainly be provocative of trouble in the trade unions. None the less, I think the time could come, perhaps after an actual crisis had occurred which spelt out the prospects of real disaster for all to see the writing on the wall. That could be the time when a call to public-spirited citizens to offer their services to the Government might conceivably be appropriate. But I do not believe that that time has yet come.
  Finally, my Lords, I realise that the terms of the Unstarred Question put down by my noble friend refer only to a special kind of constabulary and I hope that the

  707
  Government and the noble Lord, Lord Harris of Greenwich, when he comes to reply, will be able to say something about the current strength of the regular and reserve police forces as compared with their establishments. We have been told by my noble friend Lord Bourne that they are under strength, but it would at least be a starting point to know where they stand. I should like to feel that the Government will give us at least the assurance that they are keeping under review the question of increasing police establishments to cope with increasing demands. The actual demands and the prospective future demands being made on the police in respect of civil disturbance were mentioned in this morning's Press reports of Sir Robert Marks' speech at Bramshill.
  Perhaps even more important than the Question put down by my noble friend Lord Bourne, is our search for an assurance from the Government to the public that in the case of more severe political or industrial troubles than we have experienced so far, the police will be strong enough to allow ordinary citizens and willing workers to go about their jobs and their ordinary lawful business unintimidated, without hindrance and without harm.
  7.13 p.m.
  Lord MAIS: My Lords, I shall not delay your Lordships long and, like the noble Lord, Lord Hunt, I apologise to the noble Lord, Lord Bourne, for arriving a minute or two after he rose to speak. I have just returned from Brussels where I have been on your Lordships' business and the plane was a little late. I should like in principle to support the noble Lord, Lord Bourne, in what he has said to your Lordships' House. I firmly believe that no single group, whether it be small or large, has any right to hold the country to ransom in any shape or form, nor do I believe that they have any right to cause inconvenience or great distress to thousands of innocent people. I believe that any disruptive element that sets about achieving either of those two objectives must be dealt with, or at least the facilities must be available to enable the country to deal with them.
  Like the noble Lord, Lord Hunt, I have slight reservations about whether the proposals of the noble Lord, Lord Bourne, to put these special squads into the uniform of the special constabulary
  708
  is necessarily the right answer. Again I have doubts whether they should come under the umbrella of the police at all because, whatever form they take, they would undoubtedly in certain circumstances require protection themselves. Then you come to the next point: Who will protect such squads if they go in under difficult circumstances? The obvious answer is, first of all the regular police force, which is terribly under strength at the moment. If circumstances such as are envisaged should arise, undoubtedly they would be fully stretched, possibly in other directions. We then come to the question: Who else could provide protection? There we come back to the Regular Army. The Regular Army is fully committed and also is not of any great size at present. So we come down to the Territorial Army and the volunteer reserves.
  Here one can say without any risk of Party politics that successive Governments over the years have torn that great force to pieces. It is nothing like what it used to be and can no longer provide an effective force or protection in the event of a major disturbance. Those concerned would do their job as they have always done, but they are terribly under strength. I believe that the requirement to which the noble Lord, Lord Bourne, has referred, would be better served by expanding the units of the TAVR. They have ready-made units in the form of the Royal Engineer units, the REME units and the Ordnance units, all of whom have the requisite trades, or could recruit the requisite trades, to man such installations as power stations and the like. I believe also that we lost a great deal in this country when we did away with National Service, but I will not press that point. We did an even greater disservice when we so drastically reduced the TAVR.
  I am digressing for a moment, but I will come back to the main point. We are suffering at present more than during any period in my lifetime from a great gap between people from different walks of life. I believe that this is due largely, and for this I am very glad, to the fact that we have not had a war for 30 years. Therefore the two extremes do not have the opportunity of meeting and serving together, learning a bit of discipline and finding out that there is a great deal of

  709
  good in all men. When the TAVR was at full strength it to some extent filled this gap. That is my principal reason for saying that if this is a requirement— and I believe we have such a need— it would be better to form such special squads by expanding the TAVR.
  I accept the fact that whenever you bring in forces, whether they be regular or reserves, that can be provocative. But let us face facts. Whether you bring in the Regular Army, the TAVR or the special constabulary, such a situation is provocative and explosive anyway. The great thing is to try to keep the heat out of it as much as possible. I hope there-fore that Her Majesty's Government will give serious consideration to seeing that such special units are available to maintain, if not all, at least a substantial part of, the essential services which the ordinary citizen of this country is entitled to expect. One thing I think we are inclined to overlook is that 90 per cent. plus of the ordinary trade unionists or men who strike are as loyal as any one of us in this House or elsewhere in this country. I believe that most of them do not wish to strike or to have anything to do with violence. Therefore, whatever we do it is essential that we do not turn the vast majority of men who want no part in violence or disruption into taking part or joining with the violent element simply because they have been provoked. I am probably posing more problems than I am trying to solve, but the fact remains that the average man in this country must realise that in the end it is in his own interests that the essential services of the country are maintained.
  Now I am afraid that I may seem to be rather starry-eyed. I should like to feel that the Government would put these facts fairly and squarely to the trade unions, and would point out to them— and, as I have said, the majority of trade unionists are good and loyal men—where situations such as have occurred in the past and may occur in the future are driving the law-abiding citizens of this country. The fact that the noble Lord, Lord Bourne, has raised this matter and that we are sitting here debating it this evening, shows that many of us are very concerned with the preservation of law and order and the safety of essential installations should there be industrial
  710
  strife. I believe that it would be far better to try to find a joint solution with the trade unions and at the same time to give serious consideration to strengthening our reserve forces. I hope that this will be done.
  7.22 p.m.
  Viscount BROOKEBOROUGH: My Lords, I should like to welcome the opportunity which the noble Lord, Lord Bourne, has given us to debate this subject and to say how pleased I am that the noble Lord, Lord Harris of Greenwich, is replying to the debate, because there are few people who have such clarity of speech in answering what I believe to be a very important Question. My noble friend Lord Hunt covered a good deal of ground in which he described the aims of the terrorist, but i feel it is worth while repeating—possibly in slightly different words—that one of the aims of the subversionist and terrorist is to make the citizens of a country doubt the capacity and the will of their democratic Government to maintain that democracy in the face of their subversion. It is therefore absolutely essential for the Government to make it clear that, no matter what the attempts of that subversion and terrorism, democracy will survive.
  My Lords, the Question which the noble Lord, Lord Bourne, has posed falls into two categories. First, there is the possibility of forming a reserve of specialists to maintain essential services; and secondly, there is the formation and employment of an enlarged special constabulary in a manner which could enable us to delay the employment of the Armed Forces in an emergency. I speak today because I feel that I have had a certain amount of experience in both spheres. I was a junior Minister in the Government of Northern Ireland in the Ministry of Commerce, which was responsible for the electricity supply in Northern Ireland, when we had, first, an industrial dispute and, secondly, last year, a political dispute. I speak with a great deal of experience on the formation of a special constabulary, because I was more closely involved than any other member of our Government in recruiting and in doing our best to get people to join our reserve police, which is the equivalent of the special constabulary in Northern Ireland. Two members of my family are in that reserve and are very proud to be so.

  711
  Last year, we had a political strike which was, as your Lordships know, the Ulster Workers' Council strike. Of course it is quite possible that we shall have a strike in this country which will start off by being an industrial dispute and will, either through mishandling or, indeed, through deliberate subversion, be converted into a political strike. The area which the noble Lord, Lord Bourne, is discussing in speaking of specialists in regard to the electricity industry—and I am speaking entirely about that industry, as it is of that that I have personal experi-ence—is what I should describe as the middle management area; that is, the power station engineers and engineers who manage the switchgear.
  Each power station is a different entity, and is run by the accumulated experience of the resident staff. When a power station is commissioned, the manufacturers spend some months training the resident staff to run the station. After the station has been commissioned it is developed, modified and changed, and from that moment, the manufacturers of the station no longer have that experience. In any case, there are only a few manufacturing companies in the country, so one is left with the problem that the only people who can run the station are the resident staff. We simply could not draft in engineers to run, say, 20 power stations in this country. We could not even do it in Northern Ireland which is a small country. To draft in unskilled people would produce catastrophic damage to the grid supply of the country. In Ulster, during the political strike to which I have referred, the manual workers withdrew. The trained enginering staff remained and they performed a duty which, as I am sure noble Lords with knowledge of grid work will say, went far beyond known technology in maintaining a power supply in the face of the problems with which they had to deal because of the withdrawal of manual labour. Finally—and this is really the crux of what I have to say—due to intimidation of themselves and their families, the engineers were eventually forced to shut down the power supply. They did so with great skill, so that there was no damage to the system, and when it was restarted it was done at a speed which again was beyond the known technology of the time.
  712
  My Lords, I am absolutely confident from my knowledge of that strike and of the other strike to which I referred, that any attempt to replace the striking workers with anybody in uniform of any description would have been disastrous, no matter what the uniform. To have involved the special constabulary or the reserve police would have been a negation of the objective of a police force, which is to serve the community as such. They would at once have been classified as strike-breakers. So in that sense I part company with the noble Lord, Lord Bourne. The engineers would not have remained if these people had been brought in, because they would have believed that their duty to their country was to make sure that permanent damage was not done to the electricity supply industry. They would have been afraid —and rightly so—that to split the industry down the middle with them remaining in would do far greater damage to the country than would the temporary loss of the supply. There is no reserve of skilled manpower to deal with our most complicated life today.
  My Lords, I have said it is my opinion that to have recruited a special force to go into those power stations would have been catastrophic. The engineers in Ulster stayed at their posts because they have a most responsible attitude to their duty to the country and to their industry. They must have—and this may be relevant—a prestige in the community and a remuneration which recognises their special place in the life of the community. That may have something to do with my opinion about the present negotiations. We must recognise their special place and realise that without them we are in a difficult position. Having said all that, I must say that the noble Lord, Lord Bourne, said something which I felt was very important. The noble Lord, Lord Harris, and his Party are fast running us into a totally Socialist State. Perhaps we should go Russian and make it illegal to have strikes in these industries. The noble Lord, Lord Bourne, was right to say that they might be included in the Civil Service, and it could then be made illegal for them to strike. But one must, at the same time, recognise their position and prestige, and their remuneration must be sufficiently high.

  713
  I come to the second and, in my view, the more productive area of the matter; that is, the question of the enlargement, deployment and role of the special constables, which I will call the reserve police wherever possible because as the noble Lord, Lord Hunt, will agree, the use of the word "Specials" in Northern Ireland can sometimes cause controversy. I said that the electricity supply in Ulster was brought to a standstill by intimidation. If we are to expect skilled workers to stay at their posts it is our duty to see that there are sufficient forces available to ensure that there is no intimidation. I believe that the size of the police force in this country is totally inadequate, and I agree with noble Lords who have said that it is a very serious matter indeed to bring in the Army in a state of emergency. There may be a case for a third force—a subject with which I will not deal tonight—to deal with appalling problems such as Red Square. However, we must face the issue of the special constabulary or the reserve police fairly and squarely, because it is there where we have room to do something.
  I understand that there is an establishment for about 100,000 regular police in the country, and for the special constabulary or reserve police of about 120,000. But I gather that even the Metropolitan Police are 30 per cent. under strength. Pay is an area where we can do something. The special constabulary is completely unpaid. It is staggering to think that 20,000 people in this country can put themselves at risk of being manhandled yet still receive no pay. What patriotism they have! Possibly we in this House comprise one of the other few forces in the country who are also unpaid when we come here. When I see my hotel bill for a stay overnight, I appreciate what a short distance money goes. We pay the Territorials when they are on duty and we also pay the RNVR. We really should change our principles and pay the special constabulary.
  In Ulster we now have a really first-class reserve police force and they are paid, and I believe that in this country we should follow suit. In the last six months or so, following some very sensible modifications which the Government carried out in regard to recruitment, the numbers of our reserve police now equal those of our regular police,
  714
  and this is what we should aim at. We have about 4,400 reserve police and once the Government got the male numbers up to strength they then concentrated on recruiting women. We now have over 500 police women, who do duty exactly the same as the men and take on all their tasks. What a tragedy it was that Police Constable Mrs. Harrison was blown up and foully murdered the other day in the constituency in which I live. I feel sure that when I go to her funeral tomorrow, which I shall do most sadly, I will be in order in expressing the feelings of this House to her gallant husband and his family.
  These people take on very dangerous tasks and are doing everything that the ordinary police are doing in Northern Ireland, and there is a good case for having the same sort of service in this country. If one multiplies the 4,400 we have in Northern Ireland, we should have 88,000 to 90,000 people in the special constabulary here, and I do not think it is very much to ask people in the country to volunteer for that. They are required to do a certain minimum service and we have a right to ask that of them because they are paid. But that minimum service, whereby they attend a number of parades, is arranged to suit them, and by this means we can get the full recruitment.
  People will say that to pay these very honourable men may change the content of recruitment, but in Ulster we have people from right across the strata. We have university students, who comprise a very important section, even if they do only a year's service. If they are involved in law enforcement during that time, it has an excellent effect. The chair-man of our planning appeal body, a man of great ability, is perfectly content to play his part as an ordinary constable on the beat and to accept his pay. At first there was a certain amount of opposition from the regulars. It is difficult to be certain about this, but I think there was a feeling that, somehow or other, to have a large special constabulary would downgrade the regular police or debase their bargaining power. That may have been at the root of it, but practice has proved that that is no obstacle, because recruitment to the police is not based on pay alone. The weekends are the times when the "demos" and football crowds require the maximum effort from the regular

  715
  police, and that is the time when the reserve police can be mobilised at their highest level, which is why the police should welcome this development.
  I return to the basis of the debate. If in dealing with essential supplies we can have sufficient numbers in the force spread right across the community, we can prevent intimidation, which is one of the major weapons of the terrorist. And then, if the specialists are properly paid, they will serve the country and keep the service going.
  7.38 p.m.
  Lord GRIDLEY: My Lords, we have had a remarkable debate. We have had the experience of the noble Lord, Lord Bourne, who was Director of Operations in Malaya when I was in the Service there. It was his job to carry out policy directives and to succeed in certain dispositions; it would certainly have been the responsibility of the civil administration to keep him primed with all the information. He was followed by the noble Lord, Lord Hunt, another Army officer, and it was interesting to note that, while they did not disagree that the situation was serious enough to warrant action being taken by the Government, they did suggest rather different procedures to be adopted. We also had an interesting speech from the noble Lord, Lord Mais, who I think rather favoured the Territorial Army Volunteer Reserve to be brought in to help the Government in certain eventualities, and he was followed by a very interesting speech from the noble Viscount, Lord Brookeborough, who spoke of his experience in Ireland.
  I may be the only noble Lord who has had a rather unique experience—I say this because I feel that tonight we are discussing a matter which is designed to avoid the loss of our freedom; our freedom is being very seriously threatened at the present time—and I can tell your Lordships that I know of no more terrifying experience than the breakdown of government, the terrified looks on peoples' faces when they do not know who is in control in a given situation. This is not something that I should wish on any of your Lordships, or on anyone in this country.
  I consider that what we are discussing tonight is of great relevance in the situa-
  716
  tion facing this country today. Before I develop that argument a little further, I should like to say that I feel that the trade unions by and large—that is to say, the rank and file of the people who are members of the trade unions—are some of the most loyal subjects we have today in Britain. Therefore I hope that in any comments I make it will be understood that these are the views I hold, and which I hold most sincerely. In the present situation, I suppose some might think that it would be better if we did not debate this subject at all, because it is contentious; better to avoid it as it revolves around a very sensitive area. If that view were held and sustained—or held to any degree for any length of time —in my opinion it could result only in the further disrepute of our institutions and the loss of belief in the capability of your Lordships' House to make constructive suggestions as to how we should deal with the present situation.
  I support the idea put forward by the noble Lord, Lord Bourne. I do so because, as other noble Lords have said —I do not wish to dwell on this too long —people are very worried at present. They are fearful of the powers of certain sections of our community, and the damage to their interests, their freedom and their way of life. So they are forming organisations to protect themselves and their interests. I do not believe—and neither do I believe that they believe— that the Government have any power (this might have been a criticism levelled at us when we were in power) at present to hold the balance fairly as between conflicting interests and as between sections in our society. I feel rather sorry tonight that we do not have joining us in this debate some of the most distinguished Members of your Lordships' House who have been members of trade unions. It would greatly have enhanced the value of the debate had we been able to listen to some of their views. I do not seek to make Party points. The situation, as I have said, is very serious—too serious for that! I have said previously that the problems existed when we were in power. But with regard to the organisations which exist, and which have sprung up over the past few months, I suggest to the Government that the time has now surely arrived when it would be better and safer for the Government to harness

  717
  and to bring under their own control and discipline these patriotic people—for the most part—who have set up these organisations, primarily to protect their own interests, but who also have deep feelings of loyalty to this country.
  It would be possible, in some shape or form, to include these people as specialists within a special constabulary. Judging from what I have heard in the debate, I hope that all the suggestions which have been so ably made by other noble Lords will be answered by the Government at the close. I hope that the answer we get from the Government this evening will not be one which indicates that, if they did as is asked by some noble Lords, then this would be a form of "union-bashing", and that, therefore, it could not be considered. I do not deny that it may take courage on the part of the Government to act. Nobody who listened to some of the outstanding speeches made in your Lordships' House on 27th February about subversive elements, and at the Committee stage of the Trade Union and Labour Relations (Amendment) Bill on 10th March, can have any doubt about the organisations which exist to do harm in this country. Nobody can have any doubt either—I say this in affection for the trade unions —about the deep and genuine suspicions which exist in the unions about the law as it affects their own interests. They are reluctant to consider it.
  My Lords, in a sense I feel that it is most unfortunate that unions feel this way, and so far as I can reason it seems unnecessary that they should do so. But great sacrifices have been made to establish man's freedom under the law. If individual freedom was lost, it would be the end of trade unionism and all the benefits that union leaders have secured for their own members. An organisation of specialists, within the specialised constabulary, to keep the essentials of life, in movement to the community, is no threat to any union. It would help to preserve the unions. But there are dangers and problems existing everywhere, including the problem of Ireland. We must take notice that the disruptive elements in our society would be the first people to welcome a breakdown of law and order, particularly at this time when they feed on the discontents and cruelties
  718
  thrown up by inflation. Clearly the Government should have—any Government ought to have—a fall back position to meet the situation. But have they?
  I say to the noble Lord, Lord Harris of Greenwich, whose views I respect, and who will be replying for the Government at the conclusion of the debate, that if the Government are not prepared for all eventualities, are not the Government, any Government, guilty of a dereliction of duty to their citizens? I hope that when the noble Lord replies we shall have a complete answer to some of the most important points which have been raised so capably by other noble Lords.
  7.47 p.m.
  Viscount HANWORTH: My Lords, you will be relieved to know that I do not intend to speak for more than about seven minutes. We can judge the merits of the various proposals put forward only against a background of the future developments which are likely to occur in the country and in our society. I therefore propose to deal with this point almost exclusively in my speech. First, as the noble Lord, Lord Goodman, said recently, this nation has for some time been undergoing a bloodless revolution in its social structure, but I foresee that the strains will become far greater in the future. Our unions have today immense power politically, but far too little power when it comes to controlling labour in a way that can help this country out of its difficulties on an overall national basis, or prevent the evils of uninformed and unfair mass rule. Some of them are, frankly, afraid of losing control of their members, and afraid of dissociated groups, who are, almost certainly, Communist-inspired, taking over control and more and more dictating policy by strong arm methods. This is something which is not often said, but I have very little doubt that if one asked most of the union leaders one would find that they have this fear in the back of their minds.
  If we look around at the way things are going, I do not think we can accept the view that the same sort of thing has always been occurring and that the situation is no worse than it used to be. That view was put forward in the recent debate initiated by the noble Lord, Lord Chalfont. The whole structure and stability of our older society has changed, and

  719 in the flux which now exists the Communist task of calculated disruption is made immensely easier. In this situation the moderates are also much less certain of the right direction and are correspondingly less effective in combating the extremists. I do not believe that there are many on the extreme Left of the Labour Party who want a fully Communist State, because the more intelligent know perfectly well that real communism simply cannot work without autocracy and an intolerable loss of freedom which goes with it—intolerable to our nation which at the moment seems so concerned for its sovereignty. What I think they fail to appreciate is that where there is a radical change there is always a tendency for the pendulum to swing to extremes. I believe that it will be extremely difficult to found the Socialist State of their dreams without skidding into communism. I cannot help saying in parenthesis, although it is not part of this argument, that in my view it is immensely foolish to go on making doctrinal changes which can have no possible effect on the quality of life for anyone until the profitability and the gross national product has increased. Such philsophy positively de-creases the likelihood of any recovery now taking place.
  My Lords, for some time I have thought that there were really only three likely ways in which the future will develop. First, we may continue in a gradual and continuing decline in our ability to become competitive with other European nations. This decline would be gradual and no major crisis will develop —I consider this highly unlikely because, from what I have already said, crises are almost bound to occur. Secondly, our decline will reach a point where all good men will rally round and do what is necessary (often unselfishly) to put the country on its feet. Many of the people I have talked to think that this will not happen until the present situation gets a great deal worse. Thirdly, as a result of our economic difficulties and failure to obtain credit abroad, there will be a collapse of our economy, with massive unemployment and a great reduction in real wage levels, possibly coupled with hyper-inflation.
  In these circumstances, effective action by central Government would have to be taken if anarchy was to be avoided. The use of the military in these circum-
  720
  stances would be likely to result in some-thing approaching civil war and, ultimately, in an extreme authoritarian type of government. In this context the difference between fascism and communism would be largely meaningless.
  My Lords, I believe that we would have been perilously near that sort of situation if the late Conservative Government had pursued their fight against the miners to its logical end. From my analysis of the situation, I conclude that even if by some miracle our economic situation started to improve tomorrow, we should still be faced with crises due to social change. However, the odds against the country recovering without a very unpleasant situation developing seem to me to be very small indeed.
  In all these circumstances from my point of view, the use of the military is likely to be disastrous, and the failure of the Government to preserve essential services and some degree of order under chaotic conditions even more disastrous. It is for these reasons that I believe that we must push forward immediately with some of the ideas which have been suggested this evening. I personally favour increasing the reserve police force, which I think, on the whole, has been what most noble Lords have said. Finally, I hope it will be realised sooner or later that by these sort of measures the unions probably have more to gain in the long run than almost anyone else and, correspondingly, have more to lose; because in a situation where there is no longer any control their whole future and credibility will immediately be at stake. I think we should find that they would no longer exist in the way they have existed. Before it is too late I hope that they can see the sense of this and therefore support any measures that may be put forward to try to keep law and order in this country if the crises of the sort I think are very likely to occur in fact do occur.
  7.55 p.m.
  Lord INGLEWOOD: My Lords, I hope that my speech can be even shorter than that of the noble Viscount, Lord Hanworth, who I believe was not only a Regular soldier but a Sapper in his soldiering days, and therefore must have thought a great deal professionally about some of these questions at the time he

  721
  was serving. I am glad that this un-starred Question has been raised this evening for it is an important one. I must declare an interest. I have never been a special constable but I have served in the Territorial Army for a number of years, and hence perhaps can be excused for, at least in my mind, making comparisons between the two Services. But I am left in no doubt that we in this country have under-estimated the importance of the service which special constables can give. I am certain that we have given lip service, but from my inquiries up and down the country— and I have been closely interested in the subject for about a year—I have found that the support by the county authorities, by the general public and by the regular police varies greatly from area to area. Apart from this regional variation, there is some responsibility in the hands of the Home Office.
  The support that the special constabulary get ought to be uniformly strong throughout the country. In the last Report that I could get hold of by the Commissioner of Police for the Metropolis for the year 1973, there is one page devoted to special constabulary out of the 100 pages in the Report. From the figures I can see that the special constabulary in the Metropolitan area are not 30 per cent. under strength, as has been reported in this debate, but 80 per cent. under strength. I hope that those figures are out of date and that when the noble Lord replies he will be able to give us a more comforting picture.
  Many noble Lords will doubtless have read The Times of 12th February last, in which there was a most impressive letter from Sir Eric St. Johnston who had been Chief Constable in his time both of County Durham and of Lancashire, and was Her Majesty's Chief Inspector of Constabulary for England and Wales at the end of his service. There is a great deal in that letter (which is too long to read now) which is of interest to noble Lords here this evening. He makes one point which is worth reading. He says:
  " I would like to nail one completely untrue assertion often made by the Police Federation in this matter. They often allege that Police authorities and Chief Constables use the Special Constabulary to avoid increasing the establishment of the regular Police. In all my dealings with Police authorities through-
  722
  out the long time I served as a senior officer in the Police service in this country, I never once heard it suggested or hinted at by any member of any Police authority that by the employment of the Special Constabulary we need not increase the number of regular policemen employed."
  I mention that view because I believe it is strongly held, not among the majority of rank and file police in this country but by certain influential members of the Police Federation. I hope that the noble Lord will address himself to that point when he replies. I have spoken to members of the forces of all ranks in different parts of England, and they have all mentioned this outmoded fear on the part of the Police Federation, not just with regard to establishments but also with regard to status generally. It is really an outmoded fear and a luxury that we cannot today afford to allow to continue.
  In the county of Cumbria where I have the honour to live, the training of the special constabulary is described basic-ally as training for emergencies; and this, I think, meets the need of the noble Lord opposite. They are not just weekend standins for traffic wardens—and I am not saying that disparagingly; because the two services are equally important, but they are different. There are 450 special constables in Cumbria, a scattered rural area, doing duty regularly, apart from many others who cannot do so regularly but who are none the less valuable. They do regular weekend training courses and they work on an equal basis with the regular forces. That is how it should be throughout the county, although I believe there are certain areas where a division is still maintained. If we can succeed in strengthening the special constabulary by recruiting those with specialist skills and interests, they will get the chance to develop those interests. Rather than recruiting specialists into specialist detachments, as the noble Lord, Lord Bourne, suggested, I should prefer, at least in the first instance, to see recruiting done on a general basis. That is the priority I should give.
  I have not been to Malaya and have not seen the break-down there, but anyone who was in Belgium in May 1940 and saw the break-down within 48 hours of the administration of a country so close to us will never forget it. Indeed, they will remember all the emergency

  723
  policing that was done by the regimental police of the British Army at that time, and how valuable was the work done by that small handful of men. Therefore, when the noble Lord replies, I hope that even if he cannot be precise in his answer to the Question put by the noble Lord, Lord Bourne—and I suspect that he may not be able to be entirely precise this evening in reply to an Unstarred Question —I hope that he will leave us in no doubt whatever that the Government intend to see recruitment carried out so that the special constabulary may be brought up nearly to full strength, if not completely up to full strength, and, also, that they will consider some system of payment. I should have thought at least that the latter question was simple and is the least that the noble Lord could tell us. I hope the Government will no longer let either apathy or mistaken fears continue, nor allow the present unsatisfactory state of affairs to remain.
  8.2 p.m.
  Lord STRATHCONA and MOUNT ROYAL: My Lords, one common thread throughout the debate this afternoon has been the general agreement that this question is an extremely difficult one. The very difficulty of the issues concerned merely serves to underline the importance of the Question put by the noble Lord, Lord Bourne, and this point was made most eloquently by the noble Lord, Lord Hunt. I should like to join with other noble Lords who have spoken from all sides—although regrettably not from the noble Lord's own side—in hoping that when he replies he will be able to convince us that the Government are taking the matter seriously and that the question is being studied with the sense of urgency that I think we all agree it deserves.
  The noble Lord, Lord Bourne, deserves special congratulation on the timing of his debate, as matters have turned out; and it reflects a great deal of credit on this House because of the way in which your Lordships have lived up to the obligation placed upon you today to say nothing which would be liable to have an adverse influence on the extremely delicately-poised situation which we are facing in Glasgow at the present time. Perhaps it is best to say no more on that point.
  Probably the best thing I can do without widening the scope of the debate too
  724
  much is to look for a moment at the wide range of possible situations with which the kind of force which was suggested by the noble Lord, Lord Bourne, might reasonably be expected to deal, as a body capable of being interposed between the police, on one hand, and the Armed Services, on the other. The noble Lord referred to the breakdown of essential services, and, of course, this could happen because of accident, natural disaster or attacks from outside, as well as from sabotage, subversion or, indeed, from strikes. Perhaps situations of national crisis or emergency are in some respects slightly different from local disruption or breakdown for other reasons. We have talked about civil disorder and what I might call the "Red Square syndrome," which was referred to by my noble friend Lord Brooke borough in a rather nice Freudian slip—I beg your Lordships' pardon! I have now followed my noble friend in the same Freudian slip by saying "Red Square". I meant to say the "Red Lion Square syndrome".
  There is one issue which has not so far been mentioned today; that is hi-jacking and kidnapping carried out by international terrorists coming from out-side the country concerned. It seems to me that ideally each contingency calls for a slightly different response, which might be prepared for by means of employing the slightly different training and skills which are needed. On a previous occasion I have referred to the need to have some body which might be used as an intermediate step between the orthodox police reaction and a full-blown military intervention. It is a sad fact that in an increasingly technically sophisticated world we seem to be breeding at the same time increasingly ruthless and sophisticated groups who threaten our society. As other noble Lords have mentioned, this issue was dealt with exhaustively in the very timely debate which was recently initiated by the noble Lord, Lord Chalfont.
  In certain circumstances—fortunately rare so far but, I fear, likely to become more common—countering such actions can be beyond the powers of our own unarmed and undermanned police force. Of course, they have built up a reputation which is probably the envy of almost every other country in the world. In fact,

  725
  the police do not have a very long tradition behind them, so it is perhaps astonishing that they should have got themselves into this enviable position, and it is something that we should seek at all costs to retain. But incidents like those in Red Lion Square and the London Airport security operations call for some kind of buffer force which, while more fully equipped and trained than the police to deal with the kind of emergencies we are talking about, would avoid the necessity of playing our last card too early in the game.
  We have also talked about the danger of a vacuum being filled by "unofficial organisations"—which is an expression I prefer to use rather than "voluntary organisations", because we have mentioned that voluntary service is one of the ways in which we might hope to fill some of the existing gaps. If we look at historical precedents, we are in danger— though I do not want to sound over-alarmist about it—of meeting what might be called the "Red Revolutionaries" on the one side and the "Jackboot" on the other. Given the kind of threats which need little imagination to envisage, the public will very promptly judge hardly any Government which have not made any preparations to deal with these situations. As has been said already, one of the first objectives of any subversive organisation is to undermine the confidence of the people in the power of their Legislature and Administration to maintain the ordinary basic necessities of orderly life.
  Turning to the essential services, which the noble Lord mentions in his Question, we should probably have to add to the list, as he suggested, transport and essential food supplies. I think we can immediately identify both a practical problem and a political problem. The practical problem was emphasised in one particular instance by my noble friend Lord Brooke borough. Power stations are highly sophisticated affairs nowadays. I dare say that a number of noble Lords have been brought up, as I have, with stories from their fathers of doing what we have all wanted to do—to go and drive a steam engine during the General Strike. I know something about operating steam plants, and I am told there being a number of damaged boilers in the railway system after the General Strike was
  726
  one of the reasons why it took a great deal of time to recover from it. And that was in the good old days when the equipment was a great deal less complicated than it is today. It is indeed hard to envisage special constables readily being able to avail themselves of the requisite skills to undertake tasks of this kind—and indeed for work in power stations. We can also include waterworks, or even those rather unromantic things, sewage plants. These are no longer simple devices.
  In spite of what the noble Lord said, I cannot help wondering whether a solution might not lie in the Civil Defence organisation, which he no doubt accurately but somewhat rudely referred to as "a rump". However, rumps have their uses. We also still have, I believe, a vestigial organisation in the counties where there is an emergency officer who is available for organising services in any kind of a disaster. Could we not envisage one or other of these organisations forming the nucleus of some kind of an emergency arm? Perhaps this might point the way to getting over this politically sensitive, emotive problem, mentioned by a number of noble Lords, which concerns the element of strike breaking. That inevitably comes into consideration of maintenance of essential services. We have to face the fact that the power of people to have their way relies on inconveniencing the public. I do not believe there is any way of burking this particular issue. I say no more.
  It would be, as again was said by a number of noble Lords, disastrous if opprobrium were to attach to anybody in uniform because he was seen by some to be engaged in a strike-breaking operation. Even if the public at large claim very properly that it is the Government fulfilling their duty to maintain essential services, this is not the way those who work in those industries are going to see it. I thought it very interesting that the noble Lord, Lord Hunt, made the point that maybe the Forces have built up a tradition of acceptability in this area. I would question how much of this tradition exists; but I would accept totally that probably they have more acceptability than certain other forces, and notably, I would believe, people who would be dressed in police uniform in these circumstances.

  727
  I do not think we need to exaggerate the damage which can literally be damage to life if the kind of services we have in mind are disrupted. This was seen during the power strike. We know that old people have to be kept warm as well as fed. Of course we recognise that human beings have a remarkable capacity to survive, as was shown during the war. But the cost of even quite minor interruptions of essential services in our sophisticated society today can be very high indeed. I was trying to think of a name for the service one would envisage. I came up with a rather unfortunate series of initials in that I thought it might be called the Maintenance of Essential Services Squad, whose initials would spell "Mess". Certainly that is the kind of situation we should be in if we were calling for the use of such a force.
  All that I have attempted to say— I think it was agreed by most noble Lords—makes me question very much whether the noble Lord, Lord Bourne, is entirely sound in suggesting that we should look to the special constabulary as the vehicle through which to channel what we all agree is an essential need. May I entirely support and endorse all the words that were said about the value of the special constabulary? I have never ceased to wonder that we get these fantastic services from these people without their being paid. I do not want to become involved in the whole issue of whether we should continue to rely on voluntary service. I merely say that it is quite evident to me that it is going to be something that will become increasingly difficult as life goes on. We want, my Lords, to find some means of postponing the drastic decision to call in troops— that is the term always used: "We must call in the troops". It is precisely for this reason that we need perhaps both a highly trained cadre of technicians and also some kind of heavy squad. But I am sure it is essential that both of these organisations remain under Home Office control. It is for this reason, if none other, that I shall look forward with particular interest to what the noble Lord, Lord Harris of Greenwich, is going to tell us in reply to this debate.
  8.17 p.m.
  The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, the House will agree that
  728
  this has been a useful and indeed a valuable debate, and for that reason we are all indebted to the noble Lord, Lord Bourne, for having instigated it. Inevitably the debate has covered some of the ground that we proceeded over during the debate initiated by the noble Lord, Lord Chalfont, a few weeks ago. Tempting though it is to repeat admirable speeches one has made of one's own, I would apologise to the noble Lord, Lord Gridley, and the noble Viscount, Lord Hanworth, because, tempting though it is, the rest of the House might conceivably be a little impatient if I were to do so. The noble Lord, Lord Hunt, asked me to apologise for the fact that he had to slip away because of another engagement. I do not intend to follow the noble Lord, Lord Barnby, tempting though it would be.
  I should like to speak briefly about the role of the special constabulary, who have been referred to in this debate. But first I would deal with specific points made about the regular police; they were made by the noble Lord, Lord Hunt, the noble Viscount, Lord Brookeborough, and indeed by the noble Lord who has just resumed his seat. The strength of the regular police rose by around 1,500 in 1974, and at the end of the year we had a regular police force of over 102,000 men. That left a deficiency on establishment of 12,500. A number of police forces in this country are not under establishment at all. In one or two areas it is quite difficult to get into the local police force. They happen, not surprisingly, to be some of the more attractive areas in which to reside.
  The real police problem in this country is in London, South Yorkshire, Merseyside and Greater Manchester. And it is exactly in these areas that, of course, the most difficult police problems arise. Here are the areas where there is the greatest shortage of policemen. It is a serious problem, and I would not want in any way to minimise it. Nevertheless, having said that, it is only right to recognise that there was an increase in the effective size of the police last year; there was a substantial improvement in the last quarter of the year, just after the police pay award was determined. This

  729
  improvement in recruitment is continuing, although, as I have indicated, the position in London is still very unsatisfactory. There was a small increase last year in the size of the Metropolitan Police; but before we become too enthusiastic about that small increase we have to recognise that it was solely due to the fact that the Metropolitan Police took over the police responsibility at London Airport. Therefore, the British Airports Authority police became members of the Metropolitan Police. If that had not been the situation, there would have been another reduction in the size of the Metropolitan Police last year.
  So much for the position so far as the regular police are concerned. I turn now to the subject of this debate, which is the position of the special constabulary. As has been said by a number of your Lordships during this debate, all of the special constables are volunteers. They are unpaid and they are drawn from every section of the community. That is a very important point which was touched on by the noble Lord, Lord Strathcona and Mount Royal, during his speech. They are appointed by the local chief officers of police to assist the regular police in carrying out their duties. Under the Police Act 1964, a special constable is under the direction and control of the local chief officer of police who has complete discretion with regard to the operational use which is made of the force. As police officers, special constables are required to show the same impartiality in keeping the peace and enforcing the law as the regular police. Special constables provide a valuable service in support of the regular police. In an emergency situation, they can play a useful part in taking on some of the more routine duties, so releasing regular officers for more difficult tasks.
  However, I must make it quite clear to the House that neither the special constabulary nor the regular police is trained to run emergency services. Such training would not be relevant to their duties as constables. I am bound to say that any support of the proposal that the police, whether specials or regular, should be trained and used in this way would be certain to undermine the almost unani-
  730
  mous acceptance of the police in this country as an impartial law enforcement agency. That is a fundamental feature of our democratic society. The fact is that a group of people who are trained and used to run essential services would not be police officers, as we understand that term. The use of the police in this way would perhaps be the quickest way of bringing about the situation which I am sure the noble Lord who introduced this debate seeks to avoid. For that reason, the two parts of the noble Lord's Question seem to me to be contradictory rather than complementary.
  It is well known that successive Governments have prepared and maintained a number of emergency plans in order to maintain the essentials of life to the community in a whole range of emergency situations. This Government have continued the practice. We are taking steps to strengthen the special constabulary, and national and local recruiting campaigns over the past two years have achieved considerable success. The point was raised by the noble Lord, Lord Inglewood, about the number of special constables in the Metropolitan Police; this, in fact, increased last year by 20 per cent. A Working Party of the Police Advisory Board is now carrying out a comprehensive review of the employment of the special constabulary.
  Lord INGLEWOOD: My Lords, an increase of the size the noble Lord has mentioned is obviously very satisfactory, but it still leaves the special constabulary well below 50 per cent. of their strength.
  Lord HARRIS of GREENWICH: My Lords, I should make it clear that establishments of special constables, given the fact that they are not paid, are determined by chief officers of police, not by the Home Office. Therefore, it is left to the judgment of the individual chief officer of police. Obviously, we have a common interest in getting the largest possible number of special constables, and I do not wish to minimise in any way the problem that exists. The need to recruit far more special constables should be one of the central objectives of policy.
  As I have already said, a Working Party of the Police Advisory Board is now carrying out a comprehensive review

  731
  of the employment of the special constabulary. I have no doubt that their conclusions will be concerned—and it is important to recognise this—with the use of special constables in support of the regular police in the proper exercise of their functions, and not for any other purpose. As I have said in reply to the question which has just been asked by the noble Lord, Lord Inglewood, we need a substantial extra number of special constables. But nothing would do more to damage this recruitment than the acceptance of the proposition which was made in good faith by the noble Lord, Lord Bourne. I am quite sure that this would do substantial damage to recruitment for a series of reasons which I will try to give to the House.
  First, I come to the point which was mentioned by the noble Lord, Lord Strathcona, during the course of his very interesting and thoughtful speech. Arguably most unfairly, they would be represented and believed by a substantial number of their fellow citizens to be a corps of licensed strike-breakers. That is not a role for the police force in this country. Incidentally, during the course of the speech made by the noble Lord, Lord Barnby, the question of political extremists being the cause of industrial dislocation, strikes, and so on was raised. If, however, one looks at the terms of the Question put by the noble Lord, Lord Bourne, we see that the first group of specially trained special constables he specified would be to deal with the problems of Electricity Power.
  I am bound to say that the Electrical Trades Union is probably one of the most moderate trade unions in the country. The present leader of that union became the leader as a result of the most bitter battle with an entrenched Communist leadership. That battle eventually went to the courts where my noble and learned friend Lord Gardiner presented the case for the anti-Communist element within that union. As the House will recall, after an extraordinarily long hearing, the courts found in favour of the anti-Communist elements within the union, on the grounds of the impropriety of the elections of the then Communist leadership. This is an indication of why it is a mistake to assume that all industrial disputes are caused by Communist militants. They are not.
  732
  My second point is that when moderate men are involved it is particularly foolish for a Government to take any step which can embitter relations between the Government on the one side, and moderate men who belong to a trade union on the other. That is a situation which we want to go to very substantial lengths indeed to avoid.
  Lord GRIDLEY: My Lords, the noble Lord has dealt with the position of the police, and has said why it would be most undesirable for the police to be used in any form of emergency, likening them to strike breakers. But what will the Government do if they find themselves in a situation where the life of the country cannot be carried on? Is the country to be allowed to collapse and the people to starve?
  Lord HARRIS of GREENWICH: My Lords, I hope to come to that point in a moment. I am trying to deal with the position so far as the police are concerned. If I may, I will come to the remainder of the speech made by the noble Lord, Lord Bourne, at the end.
  If I may return to the problem which the House must recognise of using special constables for this purpose, which is the issue before the House this evening, I think that the situation would be even worse, if we were to contemplate it. It would affect not only the special constables. As I have indicated to the House, special constables act under the instruction and under the direction of the local chief officers of police—the Commissioner of Police in London and the local Chief Constable in the case of all forces outside London. Therefore, the men under their control would be dragged into a large range of industrial disputes and during the course of those disputes would be used as agents of the State in an attempt to force a Government victory.
  I cannot conceive of any situation which would do more to embitter relations between the regular police forces of this country and the community as a whole, than conduct of that sort. I put it to the House that I do not believe any Government on either side of this House would in fact embark along that road. It is fraught with the gravest risks and I very much hope that Members of the House, disturbed though they are by the facts just mentioned by the noble Lord, would

  733
  agree that we should be hesitant before we adopted courses of that sort.
  As I have indicated, this problem comes to us at a time when the regular police are already facing a number of formidable difficulties. We have a situation of rising crime, a disturbing increase in violence and, in recent months, the problem of terrorist violence which we have seen in Great Britain for the first time, though in Northern Ireland they have had this problem a great deal longer. It seems to me that at no time in the immediate past would it have been more inappropriate to take steps of the sort advocated today than it is at the present time. As I indicated a moment or two ago, in this situation the police require the whole-hearted support of the entire community. I believe this support would be jeopardised if the police were involved in some of the practices recommended here today. This is the reason why I must tell the House quite bluntly that the police service in this country is strongly opposed to any suggestion of the sort that has been made in this Question today. There would be strong support for that view from all ranks of the police service in this country, and I think the House recognises that.
  The noble Lord interjected a moment ago to ask a perfectly reasonable question, and indeed it was asked earlier by the noble Lord, Lord Bourne. He asked: If you say this cannot be done, then what can be done? If I may say so, the answer to that is, to some extent, the existing legislation which is available to Government; namely the Emergency Powers Act of 1964. This touches on a question which was mentioned a moment or two ago by the noble Lord, Lord Strathcona and Mount Royal—the kind of situation with which we are confronted in Glasgow at the moment. That is a situation where the officials at the Scottish Office and the Glasgow Area Health Board have indicated that they believe there is an acute danger to the health of the citizens of Glasgow. As a result of that the Government have decided, and my right honourable friend the Secretary of State for Scotland made a Statement to this effect in another place yesterday, that troops will
  734
  be used. Indeed, they will be moving into Glasgow tomorrow. A thousand men will be involved, with 250 vehicles sup-porting them.
  This is not an unprecedented situation. When the late Government were in Office there was a similar situation—strangely enough, also in Glasgow—when there was a dispute in the local fire service and when troops were again used. Indeed, there have been two other examples since 1970 when the same thing has been done. So it is quite wrong to say that no power exists: the difficult question, so far as governments are concerned, is: what is the appropriate moment to act? Obviously, all governments want to have a peaceful resolution of a difficult industrial situation. If troops are used too early it can sometimes lead to a dangerous deterioration of the situation.
  On all these occasions in recent years, governments of different political persuasions have decided to use the military, and I think they were right to do so, and I am sure that is the appropriate way to deal with the problems which have been raised in this debate today. As I have indicated, in my view troops should be used only as a last resort. I say this as a Home Office Minister who is aware of the calls on the police, but one also has to recognise the very heavy calls on the resources of the Army, not least in Northern Ireland where I had the opportunity of seeing the problems faced by the military, and indeed by the Royal Ulster Constabulary, only a few weeks ago.
  I have tried to indicate today why I believe that the use of special constables in the way recommended by the noble Lord, Lord Bourne, would be a mistake. But in saying that I do not want in any way to give the impression that the Government or I try to deny the existence of some of the problems which have been outlined in this debate. So far as we are concerned, there is absolutely no complacency about what is a very real problem, and all I would say to the House is that it is important for the Government to consider with great care before they act in this extremely sensitive area. I have tried to outline why I think that the course recommended by the noble

  735
  Lord would in our judgment be a mistake, and why I think that in difficult situations of this sort the correct way of dealing with the problem is by the use of the powers conferred on the Government by the Emergency Powers Act of 1964.

  EXPORT GUARANTEES AMENDMENT BILL
  The LORD CHANCELLOR acquainted the House that the Bill had been endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911.

  CORN EXCHANGE BILL
  MERSEYSIDE METROPOLITAN RAILWAY BILL
  OCEAN TRANSPORT AND TRADING (DELIVERY WARRANTS) BILL
  STANDARD AND CHARTERED BANK BILL
  Brought from the Commons; read 1a, and referred to the Examiners.
  House adjourned at twenty-four minutes before nine o'clock