Sitting of 30 May 1938

Preamble
The House met at a Quarter before Three of the Clock,Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Aldridge Urban District Council Bill,
Order for Consideration of Lords Amendments read.
Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to.
Lords Amendments considered accordingly.
The Chairman of Ways and Means (Sir Dennis Herbert): The Amendments consist of deletion of a Clause empowering the authority to deal with pavement lighting, insertion of protective provisions, and alterations of a drafting nature.
Lords Amendments agreed to.
Brixham Gas and Electricity Bill,
Order for Consideration of Lords Amendments read.
Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to.
Lords Amendments considered accoringly.
The Chairman of Ways and Means: These consist of three Amendments of a drafting nature.
Lords Amendments agreed to.
London Midland and Scottish Railway Bill,
Order for Consideration of Lords Amendments read.
Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to.
Lords Amendments considered accordingly.
The Chairman of Ways and Means: These Amendments consist of insertion of one protective Clause, and certain alterations of a verbal nature.
Lords Amendments agreed to.
London and North Eastern Railway Bill (King's Consent signified),
Bill read the Third time, and passed.
London County Council (Tunnel and Improvements) Bill (King's Consent signified),
Bill read the Third time, and passed.
Royal Sheffield Infirmary and Hospital Bill [Lords],
Read the Third time, and passed, with Amendments.
Brighton Corporation (Transport) Bill,
Lee Conservancy Catchment Board Bill,
As amended, considered; to be read the Third time.
Nottingham Corporation Bill [Lords],
Stockton-on-Tees Corporation Bill [Lords],
Wear Navigation and Sunderland Dock Bill [Lords],
West Thurrock Estate Bill [Lords],
Read a Second time, and committed.
Gateshead and District Tramways and Trolley Vehicles Bill [Lords] (by Order),
Second Reading deferred till Thursday.

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    MAIL ROBBERY (BENGAL AND NORTH WESTERN RAILWAY).
    Sir Nairne Stewart Sandemanasked the Under-Secretary of State for India whether he will obtain from the Government of India information as to the amount of mail stolen in the mail robbery on the Bengal and North Western Railway between Mau and Benares on 10th April last; and what measures are taken by the Indian postal department to guard against such robberies or to recover the stolen property?
    The Under-Secretary of State for India (Lieut.-Colonel Muirhead): I will have inquiries made from the Government of India and inform my hon. Friend of the result.

    SHOOTING INCIDENT, MYSORE.
    Mr. Edmund Harveyasked the Under-Secretary of State for India

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    whether any representations have been made to the Government of Mysore by the representative of the Crown with regard to the serious loss of life which occurred on 25th April, when a crowd was dispersed by rifle fire at the command of an Indian magistrate in a village in that State; and whether an inquiry has been instituted by His Majesty's representative?
    Lieut.-Colonel Muirhead: I am not aware of any representation having been made by the Viceroy to the Government of Mysore. I would remind the hon. Member that the State of Mysore is administered under the authority of His Highness the Maharaja. The question of an inquiry into the circumstances referred to is one for His Highness' Government. It is understood that they have appointed a committee of inquiry.

  SPAIN.
  Wing-Commander Jamesasked the Prime Minister whether he is prepared to make a further statement in regard to the scheme for the withdrawal of volunteers from the two forces in the Spanish conflict; and why there is delay in the adoption of the proposals in the Non-Intervention Committee?
  The Under-Secretary of State for Foreign Affairs (Mr. Butler): I am glad to be able to say that at the meeting of the Chairman's Sub-Committee which was held on 26th May, very considerable progress was made. All the Governments concerned have now accepted the British formula which furnishes a definition of the "substantial progress" in the withdrawal of foreign volunteers provided for in the British plan of 14th July last. Three new proposals were put forward by the United Kingdom representative designed to dispose of difficulties which had arisen in connection with the date for the restoration of observation, the balancing of the sea and land observation schemes, and the method of withdrawing volunteers. These proposals were accepted by all the representatives present, with the exception of the Soviet representative. Agreement was also reached on nearly all the provisions of the Draft Resolution, apart from a number of reservations on the part of the Soviet representative. Further meetings of the Sub-Committee
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  have been fixed for this week, when I earnestly hope that the progress recorded at the last meeting may be consolidated by the adherence of the Soviet Government.
  Wing-Commander James: Would it, therefore, appear that the reluctance to withdraw foreign nationals lies on the side of the Republican Government and their supporters?
  Miss Wilkinson: Does the hon. Gentleman think that the proposals to which objection is taken by the Soviet Government are sufficient to prevent considerable supplies of war material from reaching General Franco by sea, even during the operation of the closing of the French frontier?
  Mr. Butler: That is a matter of opinion. We attach importance to the British plan if it is accepted in toto, and we hope to gain the adherence of the Soviet Government.
  Brigadier-General Sir Alfred Knox: Is it possible for the Soviet Government's embargo to hold up the whole agreement indefinitely?
  Mr. Butler: That is why we want to gain adherence from the Soviet Government.
  Mr. Gallacher: What Governments are concerned in the withdrawal of volunteers?
  Mr. Butler: This matter has been discussed by all the members of the Non-Intervention Committee, and the Governments concerned are those which are represented on the Committee.
  Mr. Gallacher: I would like the Minister to answer what Governments—[interruption.]
  Sir Archibald Sinclair: Is it not clear that the objections of the Soviet Government are to the details of the plan, and not to the wish to have foreign combatants removed from Spain; and will the hon. Member not, therefore, repudiate the suggestion that was made just now across the Floor of the House that the Soviet Government are hostile to the withdrawal of foreign combatants from Spain?
  Mr. Butler: As I have said before, I cannot answer for another Government. We have done our best by putting for-

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  ward our plan, and we are attempting to gain the adherence of the Soviet Government to that plan.
  Captain Ramsay: Are not these objections the same as those of the Spanish Government to the—[Interruption.]
  Mr. G. Straussasked the Prime Minister whether any reply has yet been received from the insurgent authorities to the protests made by His Majesty's Government against the deliberate bombing of British ships in Valencia and Barcelona; and whether any action has now been agreed upon for the prevention of similar incidents in the future?
  Mr. Butler: The British agent has been informed that, following his representations, the Burgos authorities are making an inquiry.
  Mr. Strauss: In view of the fact that it is three weeks since the first protest was sent, and that the only effect of the protests appears to be continued and, in fact, intensified, deliberate bombing of our ships, is it not time that some definite action was taken?
  Mr. Butler: I hope that the inquiry which is being made will have some effect.
  Vice-Admiral Taylor: As these ships are in Spanish territorial waters, are they not there entirely at their own risk?
  Miss Rathbone: Is the hon. Gentleman aware that there has been a fresh instance of bombing of British ships within the last 24 hours; and are not these long delays certain to encourage the Burgos authorities to think that they can go on bombing British ships and sacrificing British lives with impunity?
  Mr. Butler: I am aware of the gravity of the situation. In this case I am answering the question on the Paper.
  Mr. Strauss: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.
  Mr. Thurtleasked the Prime Minister on how many occasions British ships bound for ports under the control of the Spanish insurgents have been stopped and searched by British naval forces?
  Mr. Butler: There have been no such occasions.
  Mr. Thurtle: Can the hon. Gentleman explain why, since on many occasions ships going to the Government of Spain have been searched, the British naval authorities are so much more zealous in examining ships—
  Mr. Speaker: The hon. Member must not put a supplementary question in that way.
  Mr. Thurtle: Surely, when there is an extraordinary disparity between the conduct towards the insurgent authorities and the Government of Spain, one is entitled to put a question on that point?
  Mr. Speaker: Yes, but not in that language.
  Mr. Thurtle: In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment at the earliest possible opportunity.
  Mr. G. Straussasked the Prime Minister whether he can make a statement concerning the bombing and sinking of the ship "Thorpehall," off Valencia, on 24th May?
  Mr. Butler: From the reports which I have received, I understand that at 2.45 a.m. on 25th May this vessel was attacked by an aeroplane which dropped two bombs. One of these struck the vessel, which sank half an hour later. From the fact that the ship was lying well away from the harbour, about ¾ mile from the end of the breakwater, and that she had been reconnoitred by a similar aeroplane on the previous evening, His Majesty's Government consider that she was the victim of a deliberate attack. Sir R. Hodgson has been instructed to bring this incident to the notice of the Burgos authorities and to request that strong disciplinary action should be taken against the crew of the offending aircraft. Sir R. Hodgson has further been instructed to impress upon the Burgos authorities the serious view taken by His Majesty's Government of the repetition of deliberate attacks on British shipping, and to request that immediate instructions should be given that such attacks should cease. His Majesty's Government have reserved their right to claim full compensation for loss and damage to persons and property resulting- from this attack.
  Sir Arnold Wilson: Is it not the fact that this ship was wholly under the authority of the Spanish Government, who have had it on charter for the last two years solely for this purpose; and can any question of compensation arise?
  Mr. Strauss: Apart from the representations which have been made to the Burgos authorities, are not these Italian aeroplanes, manned by Italian Air Force personnel, so that obviously deliberate attacks by them could not take place without the assent of Signor Mussolini; and, if so, ought not representations to be made to the Italian Government?
  Mr. Butler: We must make our protest to the Burgos authorities in this matter.
  Mr. Wedgwood Benn: When the hon. Gentleman says that it was a similar machine that made the reconnaissance, can he say what the type of machine was?
  Mr. Butler: No; I have not that information.
  Mr. Benn: Then how can the hon. Gentleman say, if he has no information, that it was a similar machine that came the second time?
  Mr. Butler: I am not certain what type of machine it was that came on the second occasion.
  Mr. Arthur Hendersonasked the Prime Minister whether he proposes to make a protest against the recent air bombardment of non-military objectives in the city of Alicante, in Spain?
  Mr. G. Straussasked the Prime Minister whether he proposes to take any action in reference to the recent bombing of the civilian population of Alicante?
  The Prime Minister (Mr. Chamberlain): His Majesty's Government have on more than one occasion expressed to both sides in Spain their profound concern at the intensification of aerial bombardment resulting in serious loss of life among the civil population, and have drawn attention to the universally accepted principle that aerial bombardment of military objectives is alone admissible. While I have not sufficient information at my disposal to judge what were the objectives on this occasion, I desire to take this opportunity of repeating how profoundly His Majesty's Government deplore the maiming and death of defenceless civilians.
  Mr. Henderson: In view of the fact that the Prime Minister himself has previously stated that this kind of aerial bombardment is contrary to international law, and in view of the fact that the Franco authorities take no notice of British protests, will not His Majesty's Government consider withdrawing Sir Robert Hodgson from any association with General Franco?
  The Prime Minister: I do not think that that would be helpful.
  Mr. Lansbury: Does the right hon. Gentleman consider that either side in Spain or in China will take much notice of our protests against this sort of warfare, seeing that Great Britain and all the great Powers are feverishly struggling to prepare even worse and more foul and vile outrages against civilian populations if war should break out?
  The Prime Minister: I do not accept that view.
  Mr. Noel-Baker: Do the Government accept the universally admitted principle that the bombardment of military objectives is not admissible if it involves danger to the civil population?
  Mr. Lansbury: Why are we devoting Wednesday to air-raid precautions if we are not perfectly well aware that we expect to bomb any enemy with whom we may be at war, and they expect to bomb our civilian population?
  Mr. E. Strauss: since His Majesty's Government have taken the lead in refusing the Spanish Government permission to buy anti-aircraft guns for defence of open towns, surely they cannot escape responsibility?
  Miss Rathboneasked the Prime Minister whether the British Embassy at Barcelona has attached to it a full complement of attaches experienced in military, naval, air, and commercial matters; and whether, in view of the importance of the British interests involved and the increasing attacks on British shipping, His Majesty's Government will consider the advisability of strengthening the staff?
  Mr. Butler: My Noble Friend is satisfied that the staff of His Majesty's Embassy and Consulate-General is fully adequate for the purpose of obtaining

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  military and naval information and for the protection of British interests in that part of Spain.
  Miss Rathbone: Is there, in fact, a naval attaché, an air attaché, a military attaché and a commercial attaché?
  Mr. Butler: The assistant military and air aé have been serving in the Embassy at Madrid, and later, at Valencia and Barcelona. No occasion has yet arisen for the appointment of a separate naval attaché.
  Mr. Benn: Did the attaché know the type of machine which bombed the "Thorpehill"?
  Miss Rathbone: Do the Government not think that the bad naval incidents that have occurred off the coast of Spain are a reason why there should be a naval attaché? What means of observation do the Government possess?
  Mr. Butler: We are perfectly satisfied with the sources of our information in Spain.
  Brigadier-General Sir Henry Croftasked the Prime Minister whether he can now give the result of the examination of the steamship "Stancroft" at Gibraltar; whether any breach of the Carriage of Munitions to Spain Act, 1936, was found to have been committed; and, if so, will he give particulars?
  Major Whiteleyasked the Prime Minister whether he can now state the result of the examination of the steamship "Stancroft," which was taken to Gibraltar under naval escort under suspicion that a breach of the Carriage of Munitions to Spain Act, 1936, had been committed; and, if so, what further action has been taken?
  Mr. Butler: I understand that, though the whole of the cargo of this vessel has not yet been discharged, it has been found to include aeroplane engines and cartridge cases. Proceedings under the Merchant Shipping (Carriage of Munitions to Spain) Act, 1936, have been started against the master but the case has been adjourned until 10th June.
  Sir H. Croft: Are steps to be taken against the owner?
  Mr. Benn: On a point of Order. The Minister has stated that this case is
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  going to be brought to the court. I submit that it is out of order, therefore, for any comment to be made on it.
  Mr. Speaker: I have not heard the question yet.
  Sir H. Croft: My hon. Friend stated that steps are to be taken in connection with the master. Might I also ask that, if the Government are satisfied that there has been an illegal traffic, steps should be taken against the owners, who have been making great profits at the expense of British lives?
  Lieut.-Commander Agnew: Has my hon. Friend any information to the effect that this ship was chartered by the Spanish Government?
  Mr. Benn: May I protest against two allegations which have been made: that the Spanish Government chartered the ship; and that the owners are making large profits out of a breach of an Act of Parliament—comments on the case that are highly improper while it is sub judice?
  Mr. Speaker: If the case is sub judice, the less said about it the better.
  Major Whiteley: Is it not a fact that it was the master of this ship, the "Stanhope"—[Interruption].

  CHINA AND JAPAN.
  Mr. Moreingasked the Prime Minister whether he is aware that the Japanese military authorities are still refusing to allow the free circulation of the tramcars of the British-owned Shanghai Electric Construction Company in the Hongkew and Yangtzepoo districts of the International Settlement, thereby preventing the resumption of work in British and other factories in the district; and what further steps he is taking to protect British interests in this matter?
  Mr. Butler: Yes, Sir. In spite of continual representations by His Majesty's authorities at Shanghai, the position remains substantially as described by the hon. Member. It cannot, however, be said to prevent the resumption of work, since the workmen can travel by other means. His Majesty's Government are bearing the matter in mind as part of the general question of the opening up of the occupied areas at Shanghai.
  Mr. George Griffiths: Could not this be dealt with through the Non-Intervention Committee?
  Mr. Moreing: While accepting what the hon. Gentleman said, that the workers could travel to their work by other means, may I ask whether he is aware that the suspension of the tramway service is causing great inconvenience to the Chinese population, and that a British manufacturer who works in the Yangtzepoo area has said that he could give immediate employment to 1,200 Chinese hands if the facilities were restored; and will the hon. Gentleman press this matter urgently upon the Japanese Government and the Japanese military authorities?
  Mr. Butler: I am aware of the great inconvenience, and that is why we are indeed pressing this matter.
  Sir Patrick Hannonasked the Prime Minister whether he proposes to request the Japanese Government to restore to the Shanghai Municipal Council their rightful control of all parts of the International Settlement, including Hongkew and Yangtzepoo, at present occupied by Japanese troops?
  Mr. Butler: since the actual fighting receded from Shanghai in November last, His Majesty's Government have lost no opportunity of representing to the Japanese authorities the desirability of the Shanghai Municipal Council being permitted to resume their normal control over the Settlement area.
  Sir P. Hannon: Has my hon. Friend received any reply from the Japanese Government?
  Mr. Butler: Not yet.
  Mr. Moreing: Is my hon. Friend aware that extensive areas continue to be occupied by Japanese troops, and that the Japanese have no more right to be there than any other nationals? British interests are being grievously injured.
  Mr. Muff (for Mr. David Adams)asked the Prime Minister whether he has any information to show the extent to which the customs revenue of China seized by Japan is being employed in warfare against China?
  Mr. Butler: I presume that the hon. Member is referring to the Customs revenues at Tientsin which are now de-
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  posited in the Yokohama Specie Bank, It is impossible to say to what precise use these sums are being put.

  BOMBING OF CIVILIANS.
  Mr. Morgan Jonesasked the Prime Minister what steps have been taken by His Majesty's Government to give effect to the unanimous Resolution of the House on 2nd February, 1938, with regard to the question of international agreement for the limitation of aerial bombing?
  Mr. Butler: As the House was informed, this question is being most carefully studied by the Government Departments concerned, with a view to overcoming the many technical and legal difficulties involved, but it has not yet reached a form in which it can advantageously be submitted to other Governments. At the same time His Majesty's Government have not failed to make clear their views about the bombardment of civilian populations and have approached the French Government and the Vatican.
  Mr. Jones: Might I ask the Prime Minister personally whether he will answer this question: Is it not a fact that this was a decision of the House of Commons, arrived at very largely at the invitation of the then Secretary of State for Foreign Affairs, and would the right hon. Gentleman not, therefore, inform the House whether the Government are prepared to do something, apart from merely studying the matter? I suggest that the Government must have studied the matter before the answer was given by the Secretary of State for Foreign Affairs. Can the right hon. Gentleman not give an assurance that something will be done immediately, if possible, on this point, by agreement among other foreign Governments?
  The Prime Minister: Yes, Sir. The hon. Gentleman is aware that what is desired is an international agreement. It is no use putting forward crude and unthought-out proposals to other Governments. The matter is one which gives rise to very great difficulties; for example, in distinguishing between the objectives which are aimed at. What we are trying to do is to get this proposition into such a form as to have some hope of acceptance by other Governments.
  Mr. Jones: Has the Prime Minister taken any steps at all, with a view to inviting other Powers to come to a conference to discuss the proposals both of our Government and other Governments, rather than wait for us to argue and think out proposals before linking up with other Governments?
  The Prime Minister: From the practical point of view it would be advantageous if we could find some scheme that, on the face of it, would be workable. That is what we are trying to do, and when we have succeeded in that, we should be in a position to invite other Governments.

  CZECHOSLOVAKIA.
  Captain Ramsayasked the Prime Minister whether, in granting visas to Members of Parliament to visit Czechoslovakia, any conditions are made regarding their participation there in purely party politics; and what steps are taken to deal with a disregard of such conditions?
  Mr. Butler: The Czechoslovak authorities do not require the passports of British subjects visiting Czechoslovakia to carry visas. The questions put by my hon. and gallant Friend do not, therefore, arise.
  Captain Ramsay: Is it in order for a Member of this House to take part in party politics in another country?
  Mr. Gallacher: Could not the Minister take some extraordinary means of prohibiting political opinions that are disagreeable to the hon. and gallant Member for Peebles (Captain Ramsay) or else stop his incessant wailing?

  MEXICO.
  Mr. A. Hendersonasked the Prime Minister whether steps are being taken by His Majesty's Government to achieve a settlement of the outstanding differences between His Majesty's Government and the Government of Mexico?
  Mr. Butler: The decision of the Mexican Government to suspend diplomatic relations with His Majesty's Government having introduced a new factor into the situation, it has been decided to defer a definite conclusion as to what course it would be
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  most appropriate to pursue until His Majesty's Government have had the opportunity of reviewing the whole position with Mr. O'Malley, whose arrival in London from Mexico is expected at the beginning of June.

  BRITISH PUBLICITY ABROAD.
  Mr. A. Hendersonasked the Prime Minister whether His Majesty's Government are taking steps to secure adequate British publicity in the countries of Central Europe?
  The Prime Minister: His Majesty's Government have had under active consideration for some time the best methods of increasing and improving British publicity, not only in Central Europe, but abroad generally. The House is aware that the Government are studying the question of the distribution of British news abroad, and other aspects of the matter are being dealt with by the Committee set up under the chairmanship of Sir Robert Vansittart.
  Mr. Vyvyan Adams: Does Central Europe include Germany?
  Mr. Bellenger: Has this Committee been able to make any substantial progress in the direction desired in Germany?
  The Prime Minister: I do not understand what the hon. Member means by "in Germany." The Committee is sitting here.
  Mr. Bellenger: I understood that the purpose of the Committee was to further British objects abroad, not at home, and I am asking whether any substantial progress has been made in this direction, or whether any obstacle has been put in the way of our propaganda abroad in Germany?
  The Prime Minister: I do not understand the reference to Germany, but I may say that progress is being made, and I am not aware of any obstacle in the way.

  FRANCE (DEBT TO UNITED KINGDOM).
  Colonel Burtonasked the Prime Minister whether he will consider the advisability of suggesting to the French Government that, instead of converting

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  36,000,000 bushels of their surplus wheat into fuel, it should be sent to this country and the value to be considered as a credit against the amount of debt still outstanding from France to this country?
  The Parliamentary Secretary to the Board of Trade (Mr. Cross): I have been asked to reply. I have no knowledge of any intention such as my hon. and gallant Friend refers to in the first part of the question. With regard to the second part, I would remind him that payments in respect of this and similar inter-Governmental debts are suspended, as stated in the footnote on page 6 of the Financial Statement.

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. Tinkerasked the Minister of Pensions whether, when evidence is submitted by an applicant for pension in which it is stated that the ex-service man's condition is due to some extent to his War experience acting on his mind, his Department calls in a psychologist to assist in determining the case?
  The Minister of Pensions (Mr. Ramsbotham): In every case in which an applicant produces evidence to show that his mind has been affected by his War service, an expert in mental diseases is consulted.
  Mr. Lawsonasked the Minister of Pensions whether he is aware that Mrs. Hackett, 6, Thornton's Fold. Beamish, county Durham, has been refused a pension as dependant of her late husband, who had been a permanent invalid since being badly shell-shocked in the War; and whether he will reconsider this decision?
  Mr. Ramsbotham: This case has been fully reviewed, but, as I have informed the hon. Member, my medical advisers find themselves quite unable to certify Mr. Hackett's death as connected with his War service. I have, therefore, no authority to vary the decision already communicated to Mrs. Hackett, but I may point out that she has a right of appeal to the independent Pensions Appeal Tribunal.
  Mr. Lawson: Is the Minister aware hat this man was an extremely bad case of shell shock, and that his whole body
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  twitched with jerks; and that the entire neighbourhood was disturbed about the refusal of a pension to the widow? Will he give the matter serious consideration?
  Mr. Ramsbotham: As I assume that the widow will have the right of appeal to the War Pensions Committee, it would be unwise for me to take action.
  Mr. Lawson: Why is it that, in a perfectly obvious case of this description, the Minister refuses to give a pension to the man's widow? May I ask the Prime Minister whether he is aware of the very serious disturbance in all parts of the country, on a matter of which this case is a very glaring instance; and will he have an inquiry into the whole matter?
  The Prime Minister: The hon. Gentleman takes me at a disadvantage, as I do not know anything about this case at all. As I understand my hon. Friend, he says the case is likely to be the subject of an appeal. If that is so, I do not see that I can do more about it.
  Mr. Lawson: Will the right hon. Gentleman—
  Mr. Speaker: We really must get on with the Questions on the Paper.
  Mr. Lawson: Could you not give a little more than ordinary latitude, Mr. Speaker, on this kind of thing, because it is a sample of the refusal of pensions which is causing considerable disturbance in all parts of the country? Could I not ask the right hon. Gentleman whether he will give the matter very serious consideration?

  TRADE AND COMMERCE.

    EXPORT CREDITS DEPARTMENT.
    Miss Wardasked the Secretary to the Overseas Trade Department whether, in view of the desirability of extending the work of the Export Credits Department, he has any plans in view?
    Mr. Cross: I have been asked to reply. The Department's organisation will be expanded as the conditions require. In particular, schemes are under consideration for the opening of additional branch offices at various provincial centres.
    Miss Ward: What provincial branch offices are under consideration?
    Mr. Gross: I can only say that the Department is considering the matter. There are at present four branches: Birmingham, Bradford, Glasgow and Manchester; and until further progress has been made on these schemes which are now under consideration I cannot say where new branch offices are likely to be situated.
    Miss Ward: Is Newcastle under consideration? Can I have an answer to that? It is rather important.

    STEEL PLATES (IMPORTS).
    Mr. Thorneasked the President of the Board of Trade how many tons of steel plates used for shipbuilding were imported into the United Kingdom from Hamburg and other German ports for the years ended March, 1936, 1937, and 1938?
    Mr. Cross: The desired information is not in my possession and I understand that it could not be compiled without an undue expenditure of time and labour.

  AGRICULTURE.

    LAND FERTILITY.
    Mr. De la Bèreasked the Minister of Agriculture whether, in order to increase land fertility in this country, he will consider offering a contribution, not exceeding £2 per acre, towards the ploughing-up and re-sowing of worn-out permanent pastures, subject to suitable conditions, such as inspection and approval by the county authority, use of specified seed manufactures, and the establishment of sound pastures?
    The Minister of Agriculture. (Mr. W. S. Morrison): I have no power to offer contributions of the kind suggested.
    Mr. De la Bère: Is my right hon. Friend not aware that contributions of this nature would do more than all half measures put together to restore agriculture to some measure of prosperity?
    Mr. Morrison: That is clearly a matter of opinion.

    PIG PRODUCERS.
    Mr. De la Bèreasked the Minister of Agriculture what further steps the Government intend to take to help small farmers who are pig producers, in view of the fact that the Bacon Bill now before the House will not benefit them to any great extent?
    Mr. W. S. Morrison: Under the provisions of the Bacon Industry Bill as it stands at present, small pig producers will be able, either individually or by means of group contracts, to enter into long contracts to supply pigs to registered curers. All pig producers will thus have an equal opportunity of benefiting from the provisions of the Bill.

    BUTTER.
    Mr. Liddallasked the Minister of Agriculture whether his attention has been drawn to the increase in the imports of butter from the small European countries, namely, Finland, Estonia, Latvia, Lithuania, Sweden, and Poland; and will he take steps to ensure that any increased supplies required in this country are met from home sources?
    Mr. W. S. Morrison: The answer to the first part of the question is in the affirmative. With regard to the second part of the question, the production of butter depends on the quantity of milk available for manufacture. My hon. Friend will appreciate that I could hardly ask the Milk Marketing Board to arrange for further supplies of milk for manufacture into butter, which is one of the least remunerative outlets, if, in the opinion of the Board, the provision of such supplies would be detrimental to the interests of the milk industry.

    MARKETING SCHEMES (PENALTIES,DEPARTMENTAL COMMITTEE).
    Mr. Dingle Footasked the Minister of Agriculture whether he now has any statement to make regarding the powers conferred by the Agricultural Marketing Acts on marketing boards to impose penalties for contraventions of the schemes?
    Mr. W. S. Morrison: The Government have decided to remit the general question of the machinery in regard to penalties under agricultural marketing and other industrial organisation schemes established under Statute to a Departmental Committee with the following terms of reference:
    " To inquire into the present arrangements for the imposition and recovery of penalties for contraventions of schemes established under Statute for the organisation of agriculture and other industries, to consider whether any modifications of these arrangements are desirable and practicable and to make recommendations."
    Mr. Foot: May I thank the right hon. Gentleman for the reply of what steps he has taken so promptly to meet the wishes recently expressed in this House? Will the committee have within its purview the penalty imposing powers which it is now proposed to confer on the Fish Marketing Board?
    Mr. Morrison: The terms of reference are drafted in the widest possible way so that the whole question may be adequately considered.
    Captain Cazalet: Has the committee been appointed?
    Mr. Morrison: No, Sir; the personnel will be announced shortly.

    FAT SHEEP AND FEEDING STUFFS (PRICES).
    Mrs. Tateasked the Minister of Agriculture whether his attention has been drawn to the steep fall in the price of fat sheep and the rise in the cost of feeding stuffs; and what steps he proposes to take to deal with the situation?
    Mr. W. S. Morrison: I am aware that prices of fat sheep have declined during the current year, but I am glad to say that last week there was a firmer tendency in the markets and no further reduction in prices. since the beginning of the year the cost of feeding stuffs has steadily declined, and in April prices were about 4 per cent. lower than a year ago. As regards the last part of the question, consultations are proceeding with representatives of the Governments of the Commonwealth of Australia and of New Zealand, on the subject of imports of mutton and lamb. Feeding stuff prices are governed by world conditions, over which the Government have no control.
    Mr. Lambert: Can my right hon. Friend say when he expects the termination of these conferences with Australia and New Zealand?
    Mr. Morrison: I cannot name a date.
    Mr. G. Griffiths: Are not these prices governed largely by tariffs?
    Sir Percy Harris: Will the right hon. Gentleman consider, as an emergency matter, the taking off of duties on feeding stuffs?
    Mr. Morrison: The duties on feeding stuffs have no real relevance to this matter.
    Mr. Leach: Can the right hon. Gentleman say why he considers it a bad thing that the price of meat should be falling?

    WHEAT ACT (AMENDMENT).
    Mrs. Tateasked the Minister of Agriculture whether he will assure the House that the promised amendment of the Wheat Act will be dealt with shortly after the Whitsun Recess?
    Mr. W. S. Morrison: I regret that it is not yet possible to say definitely when the proposed Bill for the amendment of the Wheat Act will be introduced.
    Mrs. Tate: Can my right hon. Friend give an assurance that this Bill will be introduced before we rise for the Summer Recess?
    Mr. Morrison: I am not in a position to give such an assurance, because it does not depend upon me.
    Mr. De la Bère: What is holding up this whole matter?

    DOGS (EXPORT).
    Mr. T. Williamsasked the Minister of Agriculture which body is authorised to grant an export licence for a dog; the cost of such licence and the conditions on which it is granted; and will he state the terms and conditions on which a dog may be exported to the United States of America where no licence has been issued?
    Mr. W. S. Morrison: No licence is required for the export of a dog from Great Britain unless the animal at the time of the proposed exportation is undergoing quarantine on account of its having been imported from abroad. In such a case a licence is granted by the Ministry of Agriculture and Fisheries without fee, subject to the conditions that the dog shall be transported to the vessel in a suitable crate by an approved carrying agent, who is required to report to the Ministry the arrival of the dog on the vessel. I understand that no regulations of a veterinary character are in force controlling the importation of dogs into the United States, except that dogs intended for use in the handling of livestock are quarantined for a sufficient time to determine their freedom from the tape-worm. With certain exceptions a 15 per cent.ad valorem duty is payable.
    Mr. Williams: When the owner of a dog secures a registration certificate, are the terms of import to the United States or Canada insisted upon?
    Mr. Morrison: I should require notice of that.

    BRITISH BROADCASTING CORPORATION (OPERA SUBSIDY).
    Mr. Dayasked the Postmaster-General particulars of the amount of subsidy to grand opera paid by the Government to the British Broadcasting Corporation for the 12 months ended to the last convenient date; and what is the present position with regard to same?
    The Assistant Postmaster-General (Sir Walter Womersley): The opera subsidy was discontinued at the end of 1932, for which year the amount paid was £17,500.
    Mr. Day: Was there any stipulation as to how many broadcasts were to take place for that payment?
    Sir W. Womersley: It is too long ago to remember.
    Captain Gazalet: Is my hon. Friend aware that, if the same subsidies are given to opera next year as this year through the B.B.C., it is very probable that there will be no grand opera season?

    TELEPHONE SERVICE (SHIPS).
    Mr. Dayasked the Postmaster-General what improvements are contemplated for the purpose of connecting ships, whilst in dock, with the inland telephone service; and what further reductions in the charges of the trans-Atlantic or ship-to-shore ocean telephone service he proposes to introduce in the near future?
    Sir W. Womersley: There are various methods of providing telephone service to ships in dock. The existing arrangements in each instance have been made after discussions with the dock and shipping authorities concerned and appear to be adequate to meet the particular needs at each place. My right hon. Friend is always happy to consider any requests for additional facilities. As regards the second part of the question, reductions in the charges for the services mentioned are made from time to time as circumstances permit, but my right hon. Friend
    1644
    regrets that he is not in a position at present to announce any further reductions.
    Mr. Day: Is the Minister aware that in the majority of other countries ships in dock are connected immediately, so that passengers may have telephone facilities; and is there any reason why we should be behind other countries?
    Sir W. Womersley: My information is that we give equal facilities to those of foreign countries.

    HOUSE OF COMMONS (TELEPHONE FACILITIES).
    Mr. Caryasked the First Commissioner of Works whether he will arrange for the telephone facilities in the House of Commons to be increased?
    The First Commissioner of Works (Sir Philip Sassoon): Yes, Sir. I have consulted the authorities of the House and have arranged for two cabinets for the use of Members to be placed at the north end of the Members' staircase in place of the one in the Lobby adjoining the Lower Waiting Hall, and for an additional cabinet to be installed in the Lobby of the Telegraph Office.
    Mr. Thorne: Do not forget that there is one wanted downstairs.
    Major Procter: Can my right hon. Friend see that the bells have different tones so that one may know in which cabinet the telephone is ringing?
    Sir P. Sassoon: That question should be addressed to my right hon. and gallant Friend the Postmaster-General.

    MACHINE PRODUCTS, LIMITED, CARDIFF.
    Mr. T. Williamsasked the Minister of Labour how many Germans are employed by the Plessey Company, Limited, Ilford, Essex, at their Cardiff works; what particular process these Germans are working at that could not be performed by British workmen; and how many Government contracts for the production of shells have been given to this firm?
    The Parliamentary Secretary to the Ministry of Labour (Mr. Lennox-Boyd): I assume that the hon. Member refers

    1645
    to the works of Machine Products, Limited, of Cardiff, which is a subsidiary of the Plessey Company, Limited. No permits have been granted for the employment of foreign nationals by Machine Products, Limited. I am informed, however, that machinery of foreign manufacture has been obtained from another company, and that a foreign national is temporarily engaged in supervising the installation and demonstrating the working of the machines. I have no information as to the last part of the question.
    Mr. Williams: Is the hon. Gentleman aware that there are Germans working in that particular factory who are not trained, and, therefore, cannot train anyone else, who know little or nothing at all of the business; that the managing director of the firm is a German; and can he say why English artisans have been dismissed by the managing director because the English-trained artisan told the Germans, who are untrained, that they did not know anything about the business?
    Mr. Lennox-Boyd: I think that the hon. Gentleman has been misinformed. There are no foreign nationals employed there at all, except one engaged in supervising the erection of a machine.
    Mr. Williams: Can the hon. Gentleman tell the House how long it is since the Germans to whom I refer were dismissed, seeing that the artisan to whom I referred as an English artisan was dismissed himself only about three weeks ago, leaving several Germans working there?
    Mr. Lennox-Boyd: I am not aware that there have been any foreigners recently dismissed. Perhaps the hon. Member will put down another question?
    Mr. Williams: Will not the hon. Gentleman make the inquiries he ought to have made in consequence of my question? I have the information, and the hon. Gentleman ought to have the information.

    UNEMPLOYMENT (BENEFIT).
    Mr. T. Williamsasked the Minister of Labour whether he will explain why Miss I. M. Brown, of Moorend, near Doncaster, was denied benefits for the week commencing 5th April, seeing that her employer refused to allow her to work one week's notice?
    Mr. Lennox-Boyd: Benefit was disallowed by the court of referees after full consideration of the evidence, including that given personally by the applicant.
    Mr. Williams: Will the Parliamentary Secretary say on what grounds the court of referees or, anyone else can refuse benefit to a person who is refused employment by her employer?
    Mr. Lennox-Boyd: In this particular case the court of referees came unanimously to the conclusion—
    Mr. Williams: Two only.
    Mr. Lennox-Boyd: —that the claimant had left her work without just cause.
    Mr. Williams: Is not the Parliamentary Secretary aware from correspondence sent to his Department, that the young lady handed in her resignation and was told off by her employer the same day, and that, therefore, while she was willing to work out' her week's notice, she was deprived of employment by her employer? If this is the kind of decision reached by the chairman of this court of referees, will he consider the advisability of dismissing him?

    GREAT EASTERN CABINET COMPANY, LIMITED, EDMONTON.
    Mr. R. C. Morrisonasked the Minister of Labour whether his conciliation officers have been in touch with the Great Eastern Cabinet Company, Limited, Edmonton, concerning the dispute involving 235 employés; whether the firm still refuses to recognise trade unionism or to meet representatives of the employés; and what further steps he proposes to take to bring the dispute to an end?
    Mr. Lennox-Boyd: The answer to the first part of the question is in the affirmative. It has not yet been found possible to arrange a joint meeting between the parties, but my Department will continue its efforts to assist in reaching a settlement.
    Mr. Morrison: Will the Parliamentary Secretary bear in mind that it is not fair not only to the employés of this firm who are in dispute, but to other employers who are giving decent conditions, that a firm like this should he allowed to continue in the way it has been doing;

    1647
    and will his officers make further efforts to settle this dispute?
    Mr. Lennox-Boyd: I think that in the interests of all concerned the hon. Member will be well advised to be content with my answer that the Department will continue its efforts to assist in reaching a settlement.
    Mr. Morrison: I beg to give notice that, if this dispute is not settled by Friday. I shall refer to this matter and to particular circumstances connected with the dispute on the Debate on the Adjournment.
    Mr. R. C. Morrisonasked the Secretary of State for the Home Department whether he has any information concerning the accidents to unskilled persons engaged by the Great Eastern Cabinet Company, Limited, Eley's Estate, Angel Road, Edmonton, since the commencement of the dispute at their works?
    The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): No, Sir, the only accidents reported have been accidents to two skilled workers.

    CYPRUS (IRRIGATION INQUIRY).
    Mr. Moreingasked the Secretary of State for the Colonies whether he has now received the report of the engineers appointed to inquire into irrigation in Cyprus?
    The Secretary of State for the Colonies (Mr. Malcolm MacDonald): Yes, Sir I have now received the first progress report on this investigation, and I am having a copy placed in the Library of the House.

  EDUCATION.

    SPREAD-OVER SCHOOL HOLIDAYS.
    Mr. Roland Robinsonasked the Parliamentary Secretary to the Board of Education what progress has been made following the conference of teachers, representatives of local authorities, and his Department concerning the spread-over of school holidays?
    Captain Dugdale (Lord of the Treasury): I have been asked to reply. The conference to which my hon. Friend
    1648
    refers reached the conclusion that there would be no great difficulty in arranging for school holidays to fit in with industrial holidays. Apart from details such as the most suitable date for external examinations, a matter which is at present under consideration, further progress on the educational side must await consideration of the question of spreading over industrial holidays.
    Mr. Robinson: Can the hon. and gallant Member say whether the Department has definitely accepted the recommendation of the committee with regard to the spread-over of holidays?
    Captain Dugdale: Perhaps the hon. Member will put that question down.
    Mr. Harvey: Has the Vice-Chancellor's committee been consulted with respect to examinations?
    Captain Dugdale: I will make inquiries and let the hon. Member know.
    Mr. R. Robinsonasked the Parliamentary Secretary to the Board of Education whether he has considered the advantages of the American educational system whereby a long summer vacation, beginning in June, is given in order that school children may have their holidays in good weather, while the winter vacations, when the weather is less favourable for outdoor exercise, are short; and whether he will consider such a scheme as a contribution to the spread-over of holidays throughout the summer months?
    Captain Dugdale: My Noble Friend doubts whether such an arrangement would be more beneficial to school children than the present practice. Moreover, to extend the school summer holidays in the hopes that such extension would facilitate the spread-over of industrial holidays would be to reverse the procedure recommended in the report of the Committee on Holidays with Pay, namely, that school holidays should, as far as possible, be so arranged as to fit in with industrial holidays.

    VOLUNTARY SENIOR ELEMENTARY SCHOOLS.
    Mr. Thurtleasked the Parliamentary Secretary to the Board of Education how many appeals under Section 18 (1) of the Education Act, 1921, have been received against the proposed voluntary senior central elementary schools to

    1649
    be erected in England and Wales under the provisions of the Education Act, 1936; in how many cases have public local inquiries been held; in how many have decisions been given already by the Board of Education; in how many cases have the appeals been rejected; and whether it is intended to accelerate these appeals in order to ensure the required accommodation for senior scholars at the appointed day?
    Captain Dugdale: The number of proposals against which appeals have been made to the Board is 20. In two of these cases public inquiries have been held, and in five cases decisions have been given by the Board, four of which were in favour of the proposal. As regards the last part of the question, these proposals are being dealt with as quickly as the procedure prescribed by Section 18 of the Education Act, 1921, permits.

  LAND VALUATION (SCOTLAND)BILL.
  Captain Ramsayasked the Prime Minister whether, in view of the fact that the Lands Valuation (Scotland) Bill has the support of all the parties in this House, he will give time for its discussion?
  The Prime Minister: I regret that in the present state of public business it is not possible to find time for the discussion of this Measure.
  Mr. Mathers: Is the Prime Minister aware that that answer will cause considerable dissatisfaction, that this is a fairly simple point, which could be quickly dealt with, and will the right hon. Gentleman not reconsider his decision?
  The Prime Minister: I think the hon. Member is under a misapprehension. This is by no means a non-controversial matter, but has aroused considerable opposition among Scottish local authorities.
  Mr. Mathers: Is the right hon. Gentleman aware that although the association of local authorities did not agree, it was by a very small majority that they decided against giving support to this particular Measure, which I can assure him has a very large volume of support?
  The Prime Minister: I can assure the hon. Member that it is by no means
  1650
  accepted by or acceptable to some of the largest local authorities in Scotland.
  Mr. Thurtle: Is the Prime Minister aware that if the hon. and gallant Member for Peebles (Captain Ramsay) is a supporter of this Bill, it will be scrutinised very carefully by hon. Members on this side of the House?

  BRITISH ARMY.

    SPORTS FIELD, DUKE OF YORK'S HEADQUARTERS.
    Major Macnamaraasked the Secretary of State for War whether the grass field at the Duke of York's Headquarters is normally used by Territorial rank and file; and what other persons are permitted to use it?
    The Financial Secretary to the War Office (Sir Victor Warrender): The sports field at the Duke of York's Headquarters is available for use, as such, by all members of the Territorial Army in London who care to use it. Permission to use the field for sports meetings and preliminary training is also granted to units of the Regular Army, cadets, and other bodies which assist the Territorial Army in one form or another.

    WELSH GUARDS (BEQUEST).
    Mr. Thorneasked the Secretary of State for War whether he can give any information in connection with the £3,000 bequeathed to the Welsh Guards; and whether he can state how the money is to be used?
    Sir V. Warrender: The hon. Member presumably refers to a bequest under the Will of the late Mr. R. S. Laybourne, of the Welsh Guards, who left £3,000 upon trust to the Colonel of the Regiment to provide each serving member of it with beer and cigarettes to the amount of is. a head on the anniversary of Mr. Laybourne's birthday, the remainder for the benefit of poor and needy Welsh Guardsmen from the county of Monmouth and their families.
    Captain Arthur Evans: Was any bequest made for officers as well as other ranks?
    Sir V. Warrender: Yes, Sir. Besides the sum of £3,000 mentioned in the question, a further bequest of £500 was made

    1651
    to provide champagne every Saturday night during the winter months for Welsh Guards officers on duty.
    Mr. Bellenger: Will the Minister discourage bequests like these as they will tend to undermine discipline?
    Sir V. Warrender: No, Sir. I hope the precedent will be followed.

    TERRITORIAL ARMY (GASMASKS).
    Major Macnamaraasked the Secretary of State for War when a full complement of gas masks is to be issued to the Territorial Army?
    Sir V. Warrender: Units of the Territorial Army are authorised to hold respirators on a scale of one for each man on the strength. The necessary number of respirators is available.
    Major Macnamara: Is it not a fact that the issue of respirators to the Territorial Army is at the rate of 50 per battalion of 500 or 600 men, and is it not urgent that the respirators should be fully issued in order that the battalion may be trained in the use of them?
    Sir V. Warrender: I am aware that there has been some difficulty, but I can assure my hon. and gallant Friend that the matter is being pressed on with as quickly as possible, that no time is being wasted and that the men are actually working overtime in connection with it.

    WORKMEN'S COMPENSATION ACTS(INQUIRY).
    Sir A. Wilsonasked the Home Secretary how many meetings were held by the Stewart Committee on Workmen's Compensation Acts between 23rd October, 1935, when they were appointed, and 13th January, 1938, when they reported for the purpose, respectively, of hearing evidence and preparing their report; and how many meetings for each of these purposes were, respectively, attended by each of the original, additional and substitute members?
    Mr. Lloyd: I understand that, apart from meetings of sub-committees, there were 28 meetings of the full committee to hear oral evidence and 28 other meetings. The information asked for in the last part of the question is not available.

    EUROPEAN REFUGEES.
    Major Macnamaraasked the Secretary of State for the Home Department what sort of papers or passport, for the purpose of sojourn in this country or travel abroad, are to be issued to Austrians whose Austrian passports have expired and who do not wish to apply for German nationality?
    Mr. Lloyd: I would refer my hon. and gallant Friend to the reply which was given on 7th April, to the hon. Member for the Kingswinford Division of Stafford (Mr. A. Henderson).
    Mr. Dayasked the Home Secretary whether, as it is now necessary for British subjects to obtain a visa on their passports before entering Germany, the same regulation or condition is imposed upon German subjects visiting Great Britain?
    Mr. Lloyd: The decision of His Majesty's Government to impose a visa requirement on the holders of German passports visiting the United Kingdom was announced in the House on 3rd May in reply to a question by the hon. and gallant Member for Wandsworth, Central (Colonel Nathan).

    MURDER TRIALS (JURIES).
    Major Procterasked the Home Secretary under what Statute juries trying a charge of murder are not permitted to separate until they have recorded a verdict; whether he will ascertain from His Majesty's judges their views as to the present-day appropriateness of this regulation; and whether he will introduce a brief Measure to modernise the methods of jury treatment?
    Mr. Lloyd: The legal provision is contained in the Juries Detention Act, 1897. At that date Parliament decided to except capital cases from the Bill which gave the court discretion to permit the jury to separate in trials for other felonies. What force still attaches to the considerations which led Parliament in 1897 to that decision is a question which deserves consideration, and for the present I can only say that my right hon. Friend will have the matter carefully examined.
    Major Procter: Is the Under-Secretary aware that in a recent case one of His Majesty's Judges expressed the opinion that the procedure was now out of date?
    Mr. Lloyd: That is so, but a member of the jury in the case told my right hon. Friend that many members of the jury held very strongly the view that it was a very right decision that they should not separate.
    Mr. De la Bère: Is it not a fact that Juries are not treated with the courtesy and respect which they might expect on many occasions?

    TRAVEL ASSOCIATION.
    Mr. R. Robinsonasked the Financial Secretary to the Treasury whether any decision has yet been reached as to the amount of the financial assistance to be given to the Travel Association during the current year; and whether, in view of the importance of the foreign tourist industry to this country, he will recommend such an increase as will bring the assistance given to this association into line with that given to the British Council for Cultural Relations?
    Mr. Cross: I have been asked to reply. I would refer my hon. Friend to the answer given by my predecessor on 22nd March.
    Mr. Robinson: Does the hon. Member not think it is time that some real help was given to the Travel Association to enable this country to compete effectively with foreign nations in regard to tourist traffic?

  TRANSPORT.

    RAILWAY LOCOMOTIVES (DIESELENGINES).
    Captain Pluggeasked the Minister of Transport whether he can state the number of railway locomotives in this country which are at present fitted with Diesel engines?
    The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson): I understand that the four main-line railway companies own 36 Diesel locomotives which are used for shunting purposes and 26 Diesel rail motor passenger vehicles.

    TRAFFIC CONGESTION, WILLESDEN.
    Mr. Viantasked the Minister of Transport whether he is now in a position to make a decision arising from the representations he has received from the Willesden Chamber of Commerce concerning the congestion of traffic at the corner of Waxlow Road and Acton Lane, Willesden; and has he given especial consideration to the installation of traffic lights?
    Captain Hudson: The junction is not suitable for control by traffic light signals, but at the suggestion of my Department the Willesden Borough Council have agreed to provide pedestrian crossings in Acton Lane and Waxlow Road.

BUSINESS OF THE HOUSE.
Mr. Arthur Greenwood: May I ask the Prime Minister what business it is proposed to take in the event of the Eleven o'Clock Rule being suspended?
The Prime Minister: We hope to take the business on the Order Paper down to and including the Third Order, and we do not intend to take the Import Duties Orders to-night.
Motion made, and Question put,
" That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—(The Prime Minister.)
The House divided: Ayes, 213; Noes, 97.

Division No. 222.]

AYES.

[3.40 p.m.

Adams, S. V. T. (Leeds, W.)

Briscoe, Capt. R. G.

Chapman, A. (Rutherglen)

Agnew, Lieut.-Comdr. P. G.

Brown, Col. D. C. (Hexham)

Chapman, Sir S. (Edinburgh, S.)

Anderson, Rt. Hn. Sir J. (Sc'h Univ's)

Brown, Brig.-Gen. H. C. (Newbury)

Clarke, Colonel R. S. (E. Grinstead)

Anstruther-Gray, W. J.

Bull, B. B.

Clarry, Sir Reginald

Assheton, R.

Burgin, Rt. Hon. E. L.

Colville, Rt. Hon. John

Astor, Hon. W. W. (Fulham, E.)

Burton, Col. H. W.

Conant, Captain R. J. E.

Baillie, Sir A. W. M.

Butcher, H. W.

Cooke, J. D. (Hammersmith, S.)

Barrie, Sir C. C

Butler, R. A.

Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)

Beaumont, Hon. R. E. B. (Portsm h)

Caine, G. R. Hall-

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

Bernays, R. H.

Cary, R. A.

Cox, H. B. Trevor

Blair, Sir R.

Cayzer, Sir C. W. (City of Chester)

Craven-Ellis, W.

Bossom, A. C.

Cazalet, Capt. V. A. (Chippenham)

Croft, Brig.-Gen. Sir H. Page

Boyce, H. Leslie

Chamberlain, Rt. Hn. N. (Edgb't'n

Crooke, Sir J. S.

Brass, Sir W.

Channon, H.

Crookshank, Capt. H. F. C.

Cross, R. H.

Knox, Major-General Sir A. VV. F.

Russell, S. H. M. (Darwen)

Crossley, A. C.

Lambert, Rt. Hon. G.

Salmon, Sir I.

Crowder, J. F. E.

Latham, Sir P.

Salt, E. W.

Culverwell, C. T.

Leech, Sir J. W.

Samuel, M. R. A.

Davidson, Viscountess

Leighton, Major B. E. P

Sandeman, Sir N. S.

Davies, Major Sir G. F. (Yeovil)

Lennox-Boyd, A. T. L.

Sanderson, Sir F. B.

Davison, Sir W. H.

Levy, T.

Sandys, E. D.

Dawson, Sir P.

Lewis, O.

Sassoon, Rt. Hon. Sir P.

Da la Bére, R.

Liddall, W. S.

Scott, Lord William

Denman, Hon. R. D.

Lipson, D. L.

Selley, H. R.

Denville, Alfred

Llewellin, Colonel J. J.

Shakespeare, G. H.

Doland, G. F.

Lloyd, G. W.

Shaw, Captain W. T. (Forfar)

Dower, Major A. V. G.

Locker-Lampson, Comdr. O. S.

Simon, Rt. Hon. Sir J. A.

Duckworth, W. R. (Moss Side)

Lyons, A. M.

Smiles, Lieut.-Colonel Sir W. D.

Duncan, J. A. L.

McCorquodale, M. S.

Smith, Bracewell (Dulwich)

Dunglass, Lord

MacDonald, Rt. Hon. M. (Ross)

Smithers, Sir W.

Edmondson, Major Sir J.

MacDonald, Sir Murdoch (Inverness)

Somervell. Sir D. B. (Crewe)

Emmott, C. E. G. C

McKie, J. H.

Somerville, A. A. (Windsor)

Emrys-Evans, P. V.

Macnamara, Major J. R. J.

Spears, Brigadier-General E. L.

Erskine-Hill, A. G.

Macquisten, F. A.

Stanley, Rt. Hon. Lord (Fylde)

Evans, Capt. A. (Cardiff, S.)

Maitland, A.

Stanley, Rt. Hon. Oliver (W'm'l'd)

Fox, Sir G. W. G.

Makins, Brig.-Gen. E.

Stewart, William J. (Belfast, S.)

Fremantle, Sir F. E.

Margesson, Cant. Rt. Hon. H. D. R.

Stourton, Major Hon. J. J.

Furness, S. N.

Mayhew, Lt.-Col. J.

Strauss, H. G. (Norwich)

Fyfe, D. P. M.

Mellor, Sir J. S. P. (Tamworth)

Stuart, Lord C. Crichton- (N'thw'h)

Gluckstein, L. H.

Mills, Sir F. (Leyton, E.)

Sueter, Rear-Admiral Sir M. F.

Graham, Captain A. C. (Wirral)

Mitchell, Sir W. Lane (Streatham)

Tate, Mavis C.

Grant-Ferris, R.

Moore, Lieut.-Col. Sir T. C. R.

Taylor, Vice-Adm. E. A. (Padd., S.)

Grattan-Doyle, Sir N.

Moreing, A. C.

Thomas, J. P. L.

Gretton, Col. Rt. Hon. J.

Morgan, R. H.

Thomson, Sir J. D. W.

Gridley, Sir A. B.

Morris-Jones, Sir Henry

Titchfield, Marquess of

Grigg, Sir E. W. M.

Morrison, G. A. (Scottish Univ's.)

Tree, A. R. L. F.

Grimston, R. V.

Morrison, Rt. Hon. W. S. (Cirencester)

Tufnell, Lieut.-Commander R. L.

Guest, Hon. I. (Brecon and Radnor)

Muirhead, Lt.-Col. A. J.

Wakefield, W. W.

Hambro, A. V.

Munro, P.

Walker-Smith, Sir J.

Hannah, I, C.

Nicholson, G. (Farnham)

Wallace, Capt. Rt. Hon. Euan

Hannon, Sir P. J. H.

Nicolson, Hon. H. G.

Ward, Lieut.-Col. Sir A. L. (Hull)

Harvey, T. E. (Eng. Univ's.)

O'Neill, Rt. Hon. Sir Hugh

Ward, Irene M. B. (Wallsend)

Haslam, Henry (Horncastle)

Palmer, G. E. H.

Wardlaw-Milne, Sir J. S.

Haslam, Sir J. (Bolton)

Peake, O.

Warrender, Sir V.

Heilgers, Captain F. F. A

Perkins, W. R. D.

Watt, Major G. S. Harvie

Hely-Hutchinson, M. R.

Petherick, M.

Wayland, Sir W. A

Heneage, Lieut.-Colonel A. P.

Pickthorn, K. W. M.

Wedderburn, H. J. S.

Hepburn, P. G. T. Buchan-

Plugge, Capt. L. F.

Wells, S. R.

Herbert, Major J. A. (Monmouth)

Procter, Major H. A.

Whiteley, Major J. P. (Buckingham)

Hoare, Rt. Hon. Sir S.

Raikes, H. V. A. M.

Wickham, Lt.-Col. E. T. R.

Hope, Captain Hon. A O. J.

Ramsay, Captain A. H. M.

Williams, H. G. (Croydon, S.)

Howitt, Dr. A. B.

Ramsbotham, H.

Wilson, Lt.-Col. Sir A. T. (Hitchin)

Hudson, Capt. A. U. M. (Hack., N.)

Rankin, Sir R.

Winterton, Rt. Hon. Earl

Hulbert, N. J.

Rathbone, Eleanor (English Univ's.)

Wise, A. R.

Hume, Sir G. H.

Reed, Sir H. S. (Aylesbury)

Withers, Sir J. J.

Hurd, Sir P. A.

Rickards, G. W. (Skipton)

Womersley, Sir W. J.

Hutchinson, G. C.

Robinson, J. R. (Blackpool)

Wood, Hon. C. I. C.

James, Wing-Commander A. W. H.

Ropner, Colonel L.

Wright, Wing-Commander J. A. C.

Joel, D. J. B.

Ross, Major Sir R. D. (Londonderry)

Young, A. S. L. (Partick)

Keeling, E. H.

Rowlands, G.

Kerr, H. W. (Oldham)

Royds, Admiral Sir P. M. R.

TELLERS FOR THE AYES—

Keyes, Admiral of the Fleet Sir R.

Russell, R. J. (Eddisbury)

Mr. James Stuart and Captain Dugdale.

NOES.

Acland, R. T. D. (Barnstaple)

Edwards, A. (Middlesbrough E.)

Lathan, G.

Adams, D. M. (Poplar, S.)

Edwards, Sir C. (Bedwellty)

Lawson, J. J.

Adamson, W. M.

Gallacher, W.

Leach, W.

Alexander, Rt. Hon. A. V. (H lsbr.)

Gardner, B. W.

Leslie, J. R.

Barnes, A. J.

George, Major G. Lloyd (Pembroke)

Logan, D. G.

Batey, J.

Green, W. H. (Deptford)

Macdonald, G. (Ince)

Bellenger, F. J.

Greenwood, Rt. Hon. A.

McEntee, V. La T.

Benn, Rt. Hon. W. W.

Griffith, F. Kingsley (M'ddl'sbro, W.)

McGhee, H. G.

Benson, G.

Griffiths, G. A. (Hemsworth)

Marshall, F.

Broad, F. A.

Hall, G. H. (Aberdare)

Maxton, J.

Brown, C. (Mansfield)

Hardie, Agnes

Milner, Major J.

Burke, W. A.

Harris, Sir P. A.

Morrison, R. C. (Tottenham, N.)

Charleton, H. C.

Hayday, A.

Muff, G.

Cluse, W. S.

Henderson, A. (Kingswinford)

Naylor, T. E.

Cove, W. G.

Henderson, J. (Ardwick)

Noel-Baker, P. J.

Cripps, Hon. Sir Stafford

Henderson, T. (Tradeston)

Parker, J.

Daggar, G

Hills, A. (Pontefract)

Pearson, A.

Davies, R. J. (Westhoughton)

Hopkin, D.

Pethick-Lawrence, Rt. Hon. F. W.

Davies, S. O. (Merthyr)

John, W.

Quibell, D. J. K.

Day, H.

Jones, Morgan (Caerphilly)

Ridley, G.

Dobbie, W.

Kelly, W. T.

Ritson, J.

Dunn, E. (Rother Valley)

Kennedy, Rt. Hon. T.

Robinson, W. A. (St. Helens)

Ede, J. C.

Lansbury, Rt. Hon. G.

Rothschild, J. A. de

1656

1657

Salter, Dr. A. (Bermondsey)

Stewart, W. J. (H'ght'n-le-Sp'ng)

White, H. Graham

Seely, Sir H. M.

Strauss, G. R. (Lambeth, N.)

Whiteley, W. (Blaydon)

Sexton. T. M.

Summerskill, Edith

Wilkinson, Ellen

Shinwell, E.

Taylor, R. J. (Morpeth)

Williams, E. J. (Ogmore)

Simpson, F. B.

Thorne, W.

Williams, T. (Don Valley)

Sinclair, Rt. Hon. Sir A. (C'thn's)

Thurtle, E.

Wilson, C. H. (Attercliffe)

Smith, E. (Stoke)

Tinker, J. J.

Windsor, W. (Hull, C.)

Smith, Rt. Hon. H. B. Lees (K'ly)

Viant, S. P.

Young, Sir R. (Newton)

Smith, T. (Normanton)

Watkins, F. C.

Stephen, C.

Wedgwood, Rt. Hon. J. C.

TELLERS FOR THE NOES.—

Mr. Groves and Mr. Mathers.

NAVY (SUPPLEMENTARY ESTIMATES, 1938).
Estimate presented,—of the further Sum required to be voted for the Navy for the year ending 31st March, 1939 [by Command]; referred to the Committee of Supply, and to be printed. [No. 124.]
ORDERS OF THE DAY.

  IMPERIAL TELEGRAPHS BILL.
  Order for Second Reading read.
  3.49 p.m.
  The Financial Secretary to the Treasury (Captain Euan Wallace): I beg to move, "That the Bill be now read a Second time."
  In normal circumstances the House would have been listening to my right hon. and gallant Friend the Postmaster-General introducing this Bill, and I am sure that hon. Members in all parts of the House will join with me in commiserating with him on his illness and in wishing him a speedy recovery.
  On 8th April an official announcement was issued, and I will, if I may, read the first two paragraphs:
  " The Imperial Communications Advisory Committee (Chairman, Sir Campbell Stuart), on which are represented the Government of the United Kingdom, the Governments of the Dominions, the Government of India, the Crown Colonies, Protectorates and Mandated Territories, state that, as the result of negotiations which have been in progress since July, 1936, general agreement has now been reached with Cable and Wireless, Limited, through its chairman Mr. Edward Wilshaw, and its associated companies oversea, which will enable a far-reaching scheme of reductions in telegraph rates between the different countries of the Empire to be introduced on April 25th, 1938.
  This new rates scheme brings for the first time into the sphere of oversea telegraphy the principle of a uniform rate, which has long been applied with such advantage to postal traffic."
  On the next day a White Paper, Command 5716, which I shall not assume that every hon. Member present has read, was issued to explain that the Government intended shortly to introduce a Bill to give the necessary legislative authority to those parts of this agreement for which it was required, and on the same day, 9th April, the "Times" began a leader in the following words:
  "Yesterday's announcement that henceforth telegraphic communications between all the countries of the Empire would be at uniform and greatly cheapened rates has the simplicity of all the great steps in progress, although, as an article in an adjoining column shows, the simplicity has been achieved by intricate contrivance and negotiation."
  It is because this simplicity has been achieved by intricate negotiation that I am obliged to ask for the atten-
  1672
  tion and patience of the House while I go over some previous history which is very essential to an appreciation of this Bill. In 1928, the Imperial Wireless and Cable Conference was held in London, and presided over by my right hon. Friend the Member for Pollok (Sir J. Gilmour), to examine the situation created by the competition of the beam wireless service operated by the Post Office with the cable services operated by the cable companies, with a view to the adoption of some common policy by all the Governments concerned. The Governments represented at that conference were those the names of which I have already read out. In accordance with the recommendations of that conference, after very carefully considering the problem, a company known as Imperial and International Communications, Limited, was formed, which was subsequently renamed Cable and Wireless, Limited; and it is with the affairs of that company that this Bill has largely to do.
  Cable and Wireless, Limited, was set up as an operating company to conduct the main overseas telegraphic services of the British Commonwealth. The capital of the company was fixed at £30,000,000, all in ordinary shares. An agreement was made between the company and His Majesty's Government in May, 1929, but operating as from 1st April, 1928, which can be summarised under five main heads. First, the Postmaster-General leased to the company the four Post Office beam wireless stations situated at Skegness, Bodmin, Bridgwater and Grimsby respectively. They were leased for 25 years at a yearly rent of £250,000 plus 12 per cent. of any surplus profits which Cable and Wireless, Limited, might earn over a standard revenue which was then fixed at £1,865,000, representing 6 per cent. on the capital of the company. Secondly, the Postmaster-General gave to Cable and Wireless, Limited, the free use of the necessary telegraphic circuits for working those beam wireless stations. Thirdly, and on the other side, the company paid the Governments concerned a sum of £1,267,000 for the cables which were Government-owned.
  Fourthly, a number of measures of Government control were imposed on Cable and Wireless, Limited. That is

  1673
  essential to the whole agreement, because a main point of the negotiations has been to conserve intact and in working order the Imperial cable system which, in certain circumstances, is not remunerative, but which it is very essential to keep in working order against emergencies. The first item in the measures of Government control to which Cable and Wireless, Limited, submitted under the agreement was an obligation to maintain the cables even if they were unremunerative. The second was that the chairman of Cable and Wireless, Limited, was to be approved by His Majesty's Government. Thirdly, there was, and is, power to the Government to take over the whole of the plant and staff of Cable and Wireless, Limited, in the event of war. There was then a provision to ensure that control should remain in British hands, and the Imperial Communications Advisory Committee, which is a body upon which all the Governments concerned in this great enterprise are represented, was given certain special powers over the company; for instance the company is not allowed to increase rates without the prior sanction of the Advisory Committee, nor may they dispose of any of their assets; and the Advisory Committee has to be consulted on any changes of policy. I put all those items under the fourth heading—measures of Government control.
  The fifth and last main item of the agreement was that one-half of any surplus revenue over the standard (plus the 12 per cent. which was to go to the Government straight away) was to be applied either to the reduction of rates or to the development of services. The company was, therefore, not able under that agreement to derive any direct advantage from increasing its business except to the extent of half of the surplus over their standard revenue of 6 per cent. on the capital, after paying our 12 per cent. of that surplus. The object of this agreement, as I have already indicated, was to provide for co-operation among the various Governments of the British Commonwealth of Nations, to maintain and develop under British control the overseas cable and wireless system of the Empire, operating under private enterprise in the United Kingdom, but under conditions which I think can be accurately described as quasi-public-utility.
  During the years immediately subsequent to that agreement, various events
  1674
  occurred in the world which made the world not a very good place for cable companies. Cable companies depend very directly for their prosperity or otherwise upon the flow of international communications and international trade. We have to face the fact that since Cable and Wireless, Limited, was created it has been unable to earn the revenue which everybody expected it would earn, and in fact it has never earned even the standard revenue of 6 per cent. The average dividend paid between the years 1930 and 1935 was 1.7 per cent., and in 1936 the company succeeded in paying a dividend of 2½ per cent. The result of that was that, so far as the Government and the public were concerned, there was, so to speak, no surplus cash in the kitty. The telegraph rates could not be reduced as much as was hoped, although in point of fact certain reductions were made. As the telegraph rates could not be reduced, there loomed up on the horizon the possible threat of foreign competition on Empire routes by the use of direct wireless telegraphy.
  The position was accordingly reviewed in 1936 and 1937 by this body to which I have already referred, the Imperial Communications Advisory Committee, and also by the Governments concerned. A long and complicated series of negotiations proceeded with Cable and Wireless, Limited. The result of those negotiations has been the agreement which is outlined to the House in the White Paper, and the proposals to which His Majesty's Government, with the general assent of the Governments of the Dominions and of India, are now prepared to give legislative effect, subject to the authority of Parliament.
  When a series of negotiations of this magnitude results in agreement there is generally one person on either side who has been the main driving force and to whom congratulations are most prominently due. I think that the House should recognise the great services which have been performed in this connection by Sir Campbell Stuart, the Chairman of the Advisory Committee, and Mr. Edward Wilshaw, the Chairman of the Company. The broad effects of the proposals to which this Bill gives the necessary legislative authority where it is required, are two the first one is an immediate and substantial reduction of Empire telegraph

  1675
  rates. That has already taken place without waiting for the Bill. The second is the proposal to relieve the present strain on the finances of Cable and Wireless Limited, by cancelling the rental payable to the Postmaster-General for the four beam wireless stations in return for the acquisition by His Majesty's Government of a share in the equity of the whole undertaking.
  I will, if I may, give the House very briefly the details of this agreement. First of all the freehold of the four beam wireless stations is transferred to the company as from 1st March and the rental of £250,000 a year ceases. Secondly, the Postmaster-General has agreed to give to Cable and Wireless Limited, the continued use of the inland telegraph circuits which are necessary to the working of these beam stations. In the third place it is proposed that the Government should extend the life of the licence granted to Cable and Wireless Limited, from 1953 to 1963, and it will then remain in force unless definite action is taken by the Government of the day.
  On the other side 2,600,000 £1 shares out of the existing issued capital of £30,000,000 are to be transferred to His Majesty's Government, carrying dividend as from 1st March of this year. [HON. MEMBERS: "What is their value?"] The value is £1 nominal, but they may be worth a great deal more. [HON. MEMBERS: "What is the current market price?"] I could not give it off-hand. My hon. Friend the Assistant Postmaster-General is to intervene in the Debate later and he will be delighted to answer any questions the replies to which I do not carry in my head. Obviously, it does not matter very much what the market value of the shares is at this moment. What really matters is their earning capacity in future and it is not possible for anyone to forecast what dividends this company is going to earn. It depends to a great extent on imponderables like world trade. But the dividend last year was 3½ per cent., which would mean a payment to the Government on this block of shares of £91,000 a year. The next thing, beside the giving of these shares to the Government, is that the company has agreed that the standard revenue of Cables and Wireless, Limited, shall be reduced from £1,865,000 a year to £1,200,000; that is a reduction of the
  1676
  standard revenue from 6 per cent. to 4 per cent. of the capital. The House will see from that arrangement, that there will be money available for the public's share of excess profits, that is, for further reductions in the cable rates, at an earlier point. The benefits for the consumer will begin to operate when the company has earned £1,200,000 instead of waiting until it has earned £1,865,000.
  Mr. Graham White: Has it ever earned that amount?
  Captain Wallace: The company never has actually earned the standard revenue. The fact that the company never did earn its standard revenue is one of the reasons that caused this new agreement.
  Mr. White: Has it earned the suggested standard?
  Captain Wallace: I cannot say offhand. The next point is that all the obligations which were previously imposed on Cable and Wireless, Limited, as to the maintenance of strategic cables and as to the control of the company in certain respects by the Imperial Communications Advisory Committee, are to remain. The rate reductions which have actually operated since 25th April amount to £500,000 a year on the basis of the present traffic. As I have already endeavoured to explain, the present traffic does not represent by any means the amount of traffic which we hope and believe the company will get in future.
  Those are the main features of the agreement, and there are only three subsidiary points which I must mention and which I will leave the Assistant Postmaster-General to deal with in more detail if hon. Members show any curiosity in regard to them. First of all is the waiver by the Postmaster-General of a claim in connection with the direct wireless service to Kenya, which amounts on paper to about £35,000 in a lump sum. Secondly, there is to be a joint purse arrangement for working of the European service between the company and the Post Office; and, thirdly, there is a financial arrangement between the Post Office and the Exchequer.
  I see that there is on the Paper a reasoned Amendment suggesting that the Bill should not have a Second Reading.

  1677
  The Amendment is sponsored by very eminent gentlemen and, apparently, some very big guns are to be discharged this afternoon. It is obvious that the objections to the Bill by hon. Gentlemen opposite are based on the principle of the quasi-private ownership under which this company operates. The relative merits of public or quasi-private ownership for this particular purpose, that is for operating the cables and wireless service of the Empire, were pretty exhaustively discussed in 1929. The company may not have earned since then what everyone thought and hoped for, but it is very questionable whether, if it had been a public utility, it would have earned so much. That is a very large question to beg. It seems to me an impossibility, from the practical point of view, to go back on the previous decision, and I would remind the House that we are not the only Government concerned, and that it is absolutely essential, if we are to work the Imperial communications system to the best advantage of the consumer, that we should have some form of unified arrangement which commands the assent of all the Governments who are partners in this concern.
  It is for that as well as many other reasons that His Majesty's Government remain convinced that the most efficient service will be obtained by a company working under these quasi-public utility conditions, that is, Government control in the public interest in all essentials and liberty of operation, and an element of risk for the shareholders, which would not be possible in a purely public utility undertaking in which all of us, in our capacity as taxpayers, would have to meet the loss.
  I am sorry that four hon. Gentlemen so eminent and so distinguished should see a nigger in this particular wood-pile and should have put down an Amendment to reject a Bill which is merely the continuation of a principle which was decided some years ago and which for practical reasons it would be difficult, if not impossible, to reverse. I conclude by repeating that my hon. Friend the Assistant Postmaster-General intends to intervene when he has accumulated sufficient queries from the benches opposite, and, if necessary, my noble Friend the Secretary of State for the Dominions will wind up the Debate.
  4.15 p.m.
  Mr. Lees-Smith: I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof:
  " this House regrets that, under the Imperial Telegraphs Act, 1929, public utility was sacrificed to private gain by the disposal of valuable State undertakings to private interests, regards the continuation and development of this policy by the proposal to alienate the freehold of the beam wireless stations as directly contrary to the national interest, and is of opinion that the arrangements now proposed and the financial basis of the scheme are wholly unsatisfactory."
  I begin by associating myself with the reference which the right hon. and gallant Gentleman made to the illness of the Postmaster-General. We all hope that the kindly good humour which gets the Postmaster-General through his difficulties in this House will stand him in good stead now. The Financial Secretary to the Treasury confined himself, mainly, to an exposition of the White Paper and an account of the actual financial proposals which this new scheme contains, without entering into any discussion on whether the basis of the scheme is sound or where we shall find ourselves a few years hence as a result of the alienation of the nation's property to-day. As he pointed out, this Bill has a history, and this Amendment contains our protest against this further handing over of national property which we predicted at the time would be the result, when the scheme of 1928 was forced through this House in the last days of a dying Parliament and the final signature given to it on the day before the Postmaster-General of that time left office. Indeed, the last remnants of this scheme were left to be carried through by me, when I succeeded the former Postmaster-General and found the contract already signed.
  The Financial Secretary has given some account of the reasons for the action taken in 1928. As the Assistant Postmaster-General is to reply, I suggest that he should refer to the Debates in 1928 extending over three days. He will find that the Postmaster-General of that time never said a word in those Debates. The Financial Secretary pointed out in his account of the origin of this scheme, that for many years the oversea telegraphic services of this country were carried out by those great submarine cables, which constituted one of the wonders of the world about 40 years ago. Then there came upon the

  1679
  world the amazing invention of beam wireless telegraphy due to the inventiveness of Signor Marconi and due also, it should be remembered, to the co-operation which he received during his early struggles from the British Post Office. They gave him his opportunity which he could get nowhere else, an opportunity which he remembered, and for which he expressed his gratitude in the very last conversation I had with him.
  As a consequence of this development a situation arose in which one found cable telegraphy side by side with beam wireless telegraphy, and it became clear that if the two were to compete, cable telegraphy would be swept out of existence. It became equally clear that some form of rationalisation was needed by which cables and wireless could be brought under one control. It was clear also that what common sense called for was a form of nationalisation which would prevent any competition of any kind in these oversea communications. Competition came from several sources. There are the cables competing with wireless telegraphy. There is the air mail. There is wireless telephony, which may be a very serious competitor with telegraphy and is, I think, in the ascendant as regards internal communications. In addition, there is the possibility of submarine cable telephony, which would have been developed under the auspices of the Post Office had it not been for the slump in trade. So we come to this, that a decision had to be given at that time as to what authority should control all over-sea communications. You had the cables, on the one side, by themselves. The Post Office, by its enterprise, was already in possession of the beam wireless stations and held the key position. There was the air mail and there was the possibility of oversea telephony by submarine cables becoming a factor.
  In those conditions common sense dictated that the simplest method of dealing with the problem, was that the Post Office, which had four of these services already, should buy up these obsolescent cables. It could have done so, at an exceedingly low price, because the cables people had already said that if they were not bought out they would scrap the whole system, in which case they would not have got a halfpenny for the lot.
  1680
  That was, obviously, the sensible step to take at that time, but the Government of that day were obsessed by the fetish of private enterprise and decided that at all costs they must have quasi-private enterprise, if not full-blooded private enterprise in this matter. As a consequence of sheer political prejudice in the economic sphere, and nothing else, and of old-fashioned political doctrine, a great mistake was made by which, instead of taking the simple step which I have indicated, they attempted to meet the problem by the creation of an overcapitalised, sprawling, watered, incoherent combination or combine—Cable and Wireless—which was created amid a fever of Stock Exchange speculation. The absurd solution was chosen by which these obsolete submarine cables became the dominating financial interest of the new concern and, through the combine, took over on a lease of 25 years at £250,000 a year, the beam wireless stations which the enterprise of the Post Office had created.
  That is the story. The Financial Secretary has pointed out that the Cable and Wireless Company has done badly since. Of course, everybody has done badly. But if you base a scheme of this sort on an essential error of policy at the beginning, everybody suffers, and I venture to say that if those concerned had known in 1928 what they have learned since, the advice of the Labour party then would have been accepted by the shareholders and the financial gamblers in Cable and Wireless itself. The Financial Secretary said that one of the reasons for this change, and, in fact, the main purpose of the original scheme, was to maintain our strategical cables. The whole point was the maintenance in working order of the Imperial cables system in case of national emergency. If that is the point, I can tell the right hon. and gallant Gentleman, from my experience at the Post Office, that they have not succeeded in maintaining the Imperial cables system in effective working order. I do not know the position at present, of course, but when I was at the Post Office great parts of this Imperial cables system were faulty. Great parts were absolutely broken for six months at a time, and not more than a few miles of wire and cable were ever purchased by the cable company for years together.

  1681
  If the whole point of the scheme is to preserve our strategical cables in good order, surely the best way of securing that result would be by putting the system under a State Department, where that is the only object, instead of putting it under a company who take it as an unwanted child and who all the time, if they maintain it in proper order, are spending money at the expense of the shareholders to whom they are responsible. Which is the better system has been shown in practice, and again I give my own experience. While these Imperial cables were, as I have said, broken for six months at a time, if you take the oversea cables of the Post Office—it has oversea cables still—you will not find any cases in which they were permitted to remain broken for more than a fortnight. Therefore, I do not think that the right hon. and gallant Gentleman's argument on that head is a very strong one.
  Before I deal with the financial position there is one point which has been brought to my attention, and to which I would like the Assistant Postmaster-General to give a considered answer. What is to be the security for the Post Office staff who are to be affected by this alteration and about whom nothing is said in the White Paper? The position may have altered since, but my recollection is that in the case of overseas wireless telegraphy—not Imperial telegraphy—by a rather anomalous arrangement, some of the oversea telegraphic services, such as the European telegraphic services, are under the Post Office. I think, for instance, if you telegraph to Italy you do so through the Post Office. By an arrangement—if it has not since been altered—other communications are leased to the Marconi Company, and I think if you telephone by wireless to France it is through the Marconi Company. The White Paper says that these services are to be fused. The Post Office has the right, I believe, at specified intervals, to take over the wireless telephone services leased to the Marconi Company. I am speaking only of the European services. It is proposed that these shall be fused, and we should like some assurance as to the manner in which a portion of the Post Office cables staff will be affected by the change. I have had various complaints. I have here a statement that when the Cable and Wireless Company took over the Indo-European Telegraph Company
  1682
  the staff were not guaranteed, and there have been bitter complaints that they have been left stranded. Therefore, the Assistant Postmaster-General will realise that his observations on this subject will be of considerable importance to a certain proportion of those at present under his authority.
  Now I come to the immediate financial proposals of this White Paper. As is pointed out, and as the Financial Secretary pointed out, the Cable and Wireless Company are carrying through a very considerable reduction and unification of rates. I fully appreciate the significance and value of unifying and reducing the rates for telegraphic messages from here to the other parts of the British Commonwealth, but that is not the point at issue, and I do not accept the suggestion that this reduction in rates by the Cable and Wireless Company has anything to do with financial concessions to them from the Government. After all, every postal administration knows that it has continually to reduce rates—the British Post Office does it—for telephones, telegrams, mails. It is always reducing rates, and when an administration reduces its rates, it must expect its return to come from an increase of the business which it finally does. As a matter of fact, that is where the Cable and Wireless Company expect their return to come from. Last Tuesday they held their annual general meeting, and this is from the speech of the Chairman, Lord Pender, about that matter:
  " Some decrease in the revenue of Cable and Wireless, Limited, during the initial stages of the flat rate scheme must, of course, be expected, but‥‥the directors are convinced…that the ultimate result of these proposals will be a great stimulation of traffic and a consequent increase in revenue which the holding company derives from that source."
  Therefore, there is no argument whatever for giving away the property of the nation on account of the fact that the company are decreasing their rates, which, according to the statement of the chairman himself, will pay for itself in the long run.
  Now I come to the Financial Secretary's explanation of the nature of the financial transaction between the Government and the company. The Government are giving up £250,000 in return, as he said, for a share of the equity of the undertaking, and that share amounts to £2,600,000 worth of shares out of a

  1683
  total share capital of £30,000,000, so that it is about 8½ per cent. The Government are giving up £250,000 a year and are getting in return about 8½ per cent. of the dividends of this company. That is what it comes to. What are they getting in return, in figures? I have worked them out. As the right hon. and gallant Gentleman said, last year they got £91,000, but according to the figures of the year before, when the dividend was not so high, they got only £62,000, and going back further, in 1933 they got more, in 1934 they got £50,000, in 1933 £15,000, and in 1932 and 1931 a little over £6,000, so that in return for £250,000 the Government are getting dividends which have never amounted to more than £100,000 and which go down to about £6,000. The company obviously are bound to gain, and unless a miracle which no one in this country expects should occur, the Government are absolutely bound to lose in the end. Indeed, the right hon. and gallant Gentleman inferentially admitted it; he practically said so.
  What is the reason for this transaction? The reason that we are giving these financial concessions is that the company have never earned their standard revenue. This has nothing to do with a reduction of rates. The company have been unable to earn the revenue which everyone expected them to earn, and, therefore, they are to be presented with a sum of from £100,000 to £250,000 a year. Why should they? They entered into this bargain in 1928 with their eyes open. We did not force it on them; they clamoured for it. Surely they knew, and surely the shareholders knew, when they insisted on this bargain, that they were undertaking a business in which revenue fluctuates according to the state of trade. They knew they would be under continual pressure to reduce their rates, as every communication administration always is. As soon as the chance of getting this bargain was announced, there was a boom in the shares on the Stock Exchange, and as soon as it was known that this merger was to be created, the shares of the Great Eastern Telegraph Company, for instance, went up from 148 for a £10 share to 248 in a few days. On what ground of principle accepted by either side of this House can it be said that the
  1684
  result of the fact that they had not earned their revenue was to give them this enormous sum of money of £250,000 every year? I took part in one of those ragged Debates in this House, some six months ago, on Socialism, and I heard a lot about private enterprise and a lot of credit claimed for it.
  Mr. George Griffiths: It was on 24th November.
  Mr. Lees-Smith: Yes. I remember that the great merit of private enterprise was claimed to be that those who went into it were willing to take risks. I take them at their word, and I say, therefore, that when they take up a gambling counter on the Stock Exchange and the risk goes against them, the proposition which is now being put up before the House, that a share in their losses should be borne by the nation, is one that we on this side of the House are not prepared to entertain. If the right hon. and gallant Gentleman knew the history of this company, he would not talk about it in the way in which he has talked about it; he would not speak of it as a quasi public utility concern, as if it were a highly dignified corporation willing and worthy to talk on equal terms with the British Post Office, something like the British Broadcasting Corporation, whose managers simply act as trustees for the nation, without any notion of private profit for themselves. That is not the case. I had dealings with this company when I was at the Post Office, and I say that they are a profit-making concern. Certainly the opinion which I formed then, and which I repeat now, is that their standard of conduct towards the Post Office was on a lower level than that of the other commercial companies with whom we had business relations.
  I will say something more about them. The right hon. and gallant Gentleman said they had been unable to earn their revenue, but the reason for that has largely been their own fault. They had a towering over-capitalisation, with their capital completely watered, they had the most incoherent internal administration, they had a continual rivalry and clash between the wireless interests and the old cable interests, and they had the most extravagant system of administration, with the result that soon after I left Mr. Wilfrid Greene, as he then was, was asked to inquire into the administration, and

  1685
  he explained that economies amounting to £1,250,000 could easily be effected. If that was the nature of the extravagance, the House will see that even if they had got these beam wireless stations for nothing, they would still have been in financial difficulties, owing to their own internal faults.
  The right hon. and gallant Gentleman the Financial Secretary used another argument. He said, "We are not the only people concerned," and he suggested that whatever we might think, the Dominions also would have to he considered and carried with us. The experience of the Post Office is that whatever lead the British Post Office gives, that lead will be followed by the Dominions. Therefore, there is no right to use the Dominions as any argument at all in this connection. I will give an example of that from the story of what happened when the Labour Administration was in office, and when a lead given by the Post Office was followed by the Dominions. This scheme is one by which wireless telegraphy, overseas telegraphy, is handed over to this company, but when the discussion of 1928 was taking place the question of overseas telephony came up, and no final decision was taken. Therefore, that was left open for the incoming Labour Administration to decide, and when I got there I found that the Cable and Wireless Company took the decision for granted. I got one day a very cool letter, signed, I think, by Mr. Kellaway, rather suggesting that although it was not in the deed, it was quite understood and talked over by my predecessor; and, therefore, would I meet them and make the earliest arrangement possible for handing over the overseas telephony as well to them? I replied that I was quite unaware of any such arrangement, and that I was not prepared to implement it. As a consequence, there were six months of Press attacks on the Post Office, largely emanating from this company, as we all knew, and indeed giving to the Press information which was given to them confidentially by the Government.
  At the end of it all, the matter was brought before this House and debated, and we carried through the arrangement by which we kept our national property to ourselves, and, of course, the Dominions, which had to co-operate, accepted it. They took our lead, and I
  1686
  believe that neither the Postmaster-General, nor the Assistant Postmaster-General, nor anyone else would say to-day that they would welcome it if we had handed over to a private concern this great overseas telephony service, by which we are able to talk from the Post Office at Rugby to Canada, to the United States, to New Zealand, and to over 90 per cent. of the inhabitants of the world. That is the difference between the outlook of one administration and another. The suggestion that we should let the company off this £250,000 a year for some inadequate return is familiar to me because I first heard of it when I was at the Post Office. I understood they were going to wait to revive it in full force until they had a more amenable Government to deal with. What did they claim in those days? They only claimed that they should be let off the rent, or a part of the rent; the station should belong to the Post Office and they should be let off their rent. When the original Bill of 1928 was going through the House there was some resentment on both sides and some suspicion about the circumstances, and the spokesman of the Government, in winding up the Debate, asked the House to realise that the beam stations were being let only on a lease of 25 years, but that the freehold had been maintained by the Government. Now, however, with this Government the company has managed to carry through a complete coup d'état. They have not only got their rent diminished, but the whole of our property in absolute possession without, I suppose they imagine, any hope of our recovering it.
  I began by saying that the right hon. Gentleman had not looked into the future. May I suggest some of the problems about the future which this transaction, following upon the error of 1928, now opens up? The original scheme was carried through because a new system of wireless communications had come into operation and we could not allow competition between the new system and the old. This world of wireless and cable telephony and telegraphy is a rapidly moving world. This problem is only 10 years old, and it is difficult to deal now with problems which are bound to arise in the next 20 or 30 years. In internal communications telephony is driving telegraphy out. Suppose that happens in overseas communications, where will this scheme lead us

  1687
  then? We shall have the beam wireless telegraphy and submarine telegraphy under this combine, and wireless telephony, submarine cable telephony and the air mail under the Post Office. The same competition will arise once again as the result of new inventions. What will the choice be then? We shall have to choose whether we shall go further forward with this plan that the Government have selected and hand over all the existing national property to this combine, or whether we shall go back and repair the mistake which was originally made—and I take this opportunity of warning this combine—and get the whole of this property back, not at an inflated price, but at a price which will recognise that this property to-day is being given to the combine for nothing.
  4.50 p.m.
  Mr. Benson: My right hon. Friend the Member for Keighley (Mr. Lees-Smith) has approached this matter from the point of view of the alienation of State property to a private company. I want to approach it, not from the standpoint of political and social theory, which is perhaps the more important, but from the purely commercial standpoint. I want to ask three questions: First, what are we selling? Second, what price are we getting for it? Third, to whom are we selling? We are selling two things, one which we can calculate simply, and another the value of which we cannot calculate, but which we know is very considerable. We are selling the essential and the only profitable element in the telecommunication system. We are selling the right to resume possession of this system in 15 years without compensation, because at the end of 15 years, if the lease were not renewed, the company have to go out and would not be entitled to one penny. We are selling to the company the right to claim, or virtually the right to claim, compensation upon an earnings basis because if there is a Government like the present in power and they wish in 25 years' time to resume possession, the company will be compensated on an earnings basis—and they know it, and that is the reason why they are anxious for this bargain. Finally, we are selling a 10 years' extension of their lease. These are valuable things although we cannot calculate their present value.
  In addition, we are selling something the value of which we can calculate:
  1688
  that is, the leasehold rent of £250,000 for 15 years. The value of that on a 3½ per cent, basis is £2,875,000. The price we are getting is 2,600,000 shares nominal. The Financial Secretary was asked the value of these shares on the market and he could not answer. As a matter of fact, there is no market value because the shares under agreement may not be put upon the market. It is a simple matter to calculate their market value, however, because they are part and parcel of the assets in Cable and Wireless Holdings, Limited, which are quoted. We can calculate approximately the market value of the shares if we examine the structure of this precious merger. It consists of, first, Cable and Wireless, Limited, second, Cable and Wireless Holdings, Limited, and, third, the four communication companies—Eastern, Eastern extension, Marconi and Western. These three groups are interlocked. Cable and Wireless, Limited, is the company which owns all the plant and operating machinery. It owns little or nothing else. The four communication companies own all the 30,000,000 £1 shares in Cable and Wireless, Limited. Cable and Wireless Holdings, Limited, which are quoted on the Stock Exchange, hold the ordinary, but not the preference shares, of the four communication companies.
  If we sort that out we find that the position is that Cable and Wireless Holdings, Limited, which are quoted, hold all the assets of Cable and Wireless, Limited, and, in addition, the net assets of the four communication companies. The latter amount to £7,000,000. They have £12,500,000 in investments and £5,500,000 in preference and mortgage, leaving a net £7,000,000. The present quotation for the total shares of Cable and Wireless Holdings on the Stock Exchange is £20,000,000. Cable and Wireless Holdings, Limited, hold Cable and Wireless, Limited, plus £7,000,000, and, therefore, the value, as judged by the Stock Exchange, of Cable and Wireless, Limited, amounts to £13,000,000 for 30,000,000 shares, that is, 8s. 8d. per share. So that our 2,600,000 £1 shares in Cable and Wireless, Limited, on the Stock Exchange valuation, are worth £1,100,000. That is the price we are getting for a leasehold rent which is worth £2,875,000 and all the intangible, immeasurable assets of

  1689
  holding the freehold and of the possibility of continuing it in future. There is only one word for that, and that is "ramp."
  I have no doubt that the Assistant Postmaster-General will say that that is only one part of the price and that the real price is a reduction in rates and a reduction in the standard rate of profit. Let us analyse that and see what it means. Will the Assistant Postmaster tell us whether the £500,000 is estimated on the present traffic or upon some future problematical traffic? Let us see how far the £500,000 is a real sacrifice by the company and whether it is a figure that can be included in the price that we are obtaining for the very valuable assets which are being transferred to the company. The reduction in rates can only be regarded as part of the price if we should not have got that reduction apart from this agreement. Had the Cable Company been able to maintain their position without this agreement, it might be regarded as part of the price, but that is not the position. The Cable Company would have been incapable of maintaining their rates. They have been unable to maintain them in the past and, owing to the growing competition, it was obvious that they would be unable to maintain them in future. We should, therefore, have got a reduction in rates irrespective of this bargain. As a matter of fact, it was the fear of growing competition and of a reduction in rates in unfortunate circumstances which was one of the main factors that urged the company to force this agreement upon an all too willing Government.
  In the White Paper one of the reasons given by the Government is the threat of foreign competition on Empire routes by the introduction of new direct wireless services competing with the company's system. What does the company itself say? Lord Pender put it very clearly at the last general meeting:
  " Moreover, it must be borne in mind that in the past few years rate reductions throughout the whole of the system, which we had no alternative but to introduce, have been estimated to cost from £400,000 to £450,000 per annum, and the new Empire scheme does stabilise rate reductions within the Empire for five years."
  That is what they were after—the stabilisation of rates, the crushing of competition and the attaining for themselves of a monopoly. He went on:
  1690
  " The company is to be safeguarded against direct services designed to penetrate and weaken the Empire system of communications, and this provision affords a most valuable security. The company and its associates are also afforded an opportunity of taking over competing commercial wireless services operated by the Governments of extra-European systems."
  So that is the position—not that we are getting a bargain voluntarily offered to us, but that the company have manoeuvred themselves into obtaining a monopoly inside the Empire which will enable them to stabilise rates. The company were faced with alternative positions: they had either to face reductions in rates forced upon them by loss of traffic, or they had to give a reduction in rates with a monopoly and increased traffic as a result. Naturally they took the monopoly with the increased traffic. The right hon. Member for Keighley has quoted the words of Lord Pender. I quote them again:
  " The ultimate result of these proposals will be a great stimulation of traffic and a consequent increase in revenue."
  This increase in traffic is very important, because cable companies are in rather a unique position. They have basic overhead charges which they cannot reduce, and any increased traffic is practically all profit. As Lord Pender himself said, speaking at the Cable and Wireless meeting in July, 1931, their system could carry many times the present traffic without any material increase in the cost. They are getting that already with the reduction of rates, because though the reduction has been in operation for only a short time Lord Pender said recently:
  " We have definite information that we are receiving a volume of fresh traffic which we have never had before."
  The Government's White Paper speaks of this reduction as a burden, Lord Pender speaks of it as a stimulation of profits. When the Government engineer a ramp like this they ought to put their heads together, with their accessories, and decide to tell the same tale in public. In calculating what the company paid for these assets which they are obtaining we can entirely ignore this decrease in rates. The monopoly which they are getting inside the Empire will far more than compensate them; in fact, it will lead to an increase of their already very excessive profits. To whom are we selling? This is an important point, because it is not a

  1691
  cash sale. We are accepting shares in this company; in other words, we are becoming partners in the company; and I strongly object to Government prestige being given to a concern which is utterly and completely unworthy of it. Let us look at the financial history of this company. As the right hon. Member for Keighley said, it has been a case of gross and unscrupulous over-capitalisation from the beginning. He did not give any figures, but I will. Take, first, Cable and Wireless, Limited, that is, the operating company. What are their assets? They are, first, the private cables taken over from the four cable companies. Those private cables, when they took them over, were practically worn out. The right hon. Member has given his experience of them immediately after they were taken over and while he was Postmaster-General. Apart from one or two, the cables taken over from the communication companies were junk, and nothing more, and from that time to this not only have they been steadily breaking down but they are being steadily abandoned, because they are getting into a state in which they cannot be repaired.
  A cable's life is about 45 years. When these cables were taken over practically every one of them was over 40 years old. They are being abandoned now, one after the other. What is going to happen to the strategic position I do not know. As soon as the beam wireless came into operation the cables taken over from the cable companies were not assets but liabilities, because they could not compete with beam wireless. In addition, Cable and Wireless hold the modern cables, not 40 years old, which they took over from the Government and the lease of the beam wireless. For those they paid £1,267,000. They also bought one or two other cables later for something in the neighbourhood of £1,000,000. The total cash they put up was under £3,000,000. They put up cash of under £3,000,000, added all this antiquated junk, and then capitalised it at £30,000,000. But that was not the ramp, it was the basis for a still bigger ramp. Cable and Wireless Holding, Limited, hold, indirectly, the assets to which I have just referred, and in addition hold some £7,000,000 of net assets. This was capitalised at £52,600,000 and unloaded upon an unwary public, in many cases
  1692
  at a premium. I do not propose to follow the extraordinary jumps and changes in the capital of this company, but this fantastic over-capitalisation could not possibly continue, and last year they went to court and had to cancel 70 per cent. of their A stock and 92½ per cent. of their B stock, and the owners of it lost it. That reduced their capital to £23,000,000. Immediately afterwards, by resolution, they increased their authorised capital to £47,000,000. I am utterly at a loss to explain why that paper increase took place, except that it was the first step in a future ramp.
  The Government refer in the White Paper to one of the reasons why they introduced this scheme:
  " The operating company has been unable to earn the revenue which it was expected to receive under the old conditions."
  Cable and Wireless put up £1,200,000 to purchase the Government cables and the lease of the beam, and they put up another £1,000,000 a little later, that is, under £3,000,000 in all, and this year they have earned £1,250,000. What more do they want? This is the poverty-striken Company to which the Government propose to hand over a leasehold rent of £250,000. This is the Company which the Government feel they must bolster up. I know they have paid only 3¼ per cent. upon their inflated capital, but if they put another nought on, and make it £300 millions, it would have been still a smaller percentage. I object to this bargain because the Government are willingly allowing the country to be "rooked," but I more strongly object to the Government being partners in a shark firm like this.
  5.13 p.m.
  Mr. Viant: I must confess to a measure of sympathy with the Financial Secretary to the Treasury when he was standing at the box advocating this agreement. Had he known the history of what took place in this House in 1928 I feel that he would have been less inclined to advocate the Agreement. We are invariably taunted by our opponents with the statement that State enterprise is never a success, that it lacks initiative, but in the beam wireless we had initiative by State enterprise and development carried to such an extent that it was jeopardising the business of the cable companies. Then, in 1928, the Government of that

  1693
  day, exceedingly solicitous, as is the Government of to-day, about the well-being of private enterprise, rushed in to the assistance of the cable companies. I remember that in the debates on that occasion the financial position of the cable companies was well discussed, as it has been this afternoon, by the hon. Member for Chesterfield (Mr. Benson). I feel sure that the financial standing of those undertakings did not inspire the House in 1928, and it is evident from the number of Members on the Government Benches this afternoon that there is very little inspiration among the Government supporters to-day. It can at least be said that those of us who are sitting on this side have taken the trouble to acquaint ourselves with the facts. What is more important, we outnumber the supporters of the Government on those benches, when the strength of the Opposition and the strength of the Government are compared at the present time.
  It is interesting to recall the arguments that were advanced in 1928, when we considered the Financial Resolution giving sanction to the Bill. Consider the amount of financial assistance that has already been given to this merger. As is stated in the White Paper, when the agreement was placed before the House we were informed that we could expect a sum of £250,000 for 25 years. In the period of 10 years we have received roughly £2,500,000 when we should have received about £6,250,000. We are making considerable sacrifices from the public point of view and from the public purse in foregoing or cutting through the lease. I remember that we endeavoured to impress upon the Government in 1928 that they had no right to hand over the beam wireless system or to lease it because they were only the public trustee, and they had no mandate from the country for leasing out the beam wireless system. The Government suggest to-day going even further.
  The lease is to be ended and the freehold is to be handed over. I challenge the Government that they have no right, as trustees for public property, to go as far as handing over this property to a private company. If the issue were fully understood by the country I am persuaded that authority would not be given to the Government to do this thing, which is a great abuse of power by the Govern-
  1694
  ment of the day. The power was conceded to them by the community and they are abusing it by handing this property over to a private company. It is true that some of the cables to which reference has been made were junk, but some should be perfectly good, especially the Government cables. The Atlantic cable was made in 1902 and the initial cost was £2,050,000. The Pacific cable was valued, from figures given in the House, at £4,720,000, and the West Indian cable at £364,797, making a total of £7,134,797. Are they to go to the merger for £1,267,000? It is a great gift from the public purse, not to mention what one calls, in ordinary commercial business, goodwill. It was a going concern, and all that the company had to do was to take it over and use it. No initiative was necessary.
  We asked the Financial Secretary on 21st November, 1928, the estimated cost of the beam wireless system, and he replied that he supposed it would be about £4,000,000. Possibly that was so, but if we add to it the enormous sum of over £7,000,000 for the cables, there is £11,000,000 as a gift to this company. We are now asked to accept a nominal sum in regard to shares. Various calculations have been made this afternoon as to the market value of the shares. It is well that the House should consider the manner in which this company has has already been spoon-fed financially by the Government in 1928, and now by their successors, who are giving them another gift from the public purse. Anywhere else than in this House it would not be attempted. The general public appear to be oblivious of what is taking place.
  The argument will now be advanced, of course, that we shall get benefit by way of reduced rates. That may be so, but from my experience at the Post Office I am convinced that that Department could have run this concern far more effectively and efficiently than it has been run by this private company. The services would have been better and the general public—this is far more important —would not have been robbed as they have been, on the evidence submitted by my hon. Friend the Member for Chesterfield. Those of us who have taken an interest in this matter and read the public Press have from time to time pointed out

  1695
  the financial manipulations of this company. I ask the House, in the light of that financial history, whether they are inspired with such confidence that they can willingly go into the Lobby and back up this agreement. It will, of course, be backed by those who are not present and had not heard any of the evidence submitted. Possibly a large number of Members will be quite unconscious of the White Paper embodying the recommendations. It is not fair to the country or to this House. The benches opposite are equally as indifferent to it as they were in 1928, and it is a deplorable condition of affairs.
  We sincerely believe in the Amendment which we have placed on the Paper, and we shall go into the Lobby and back it whole-heartedly. We regret that the Postmaster-General is not in his place. I remember that in 1928 the then Postmaster-General did not take part in the Debate. He had such a high regard for the Post Office as an efficient Department that he was not prepared to defend principles of this kind. Everyone acquainted with the Post Office Department is convinced of its efficiency, but the salary of the Postmaster-General would not compare with the salary of the chairman of this Company and the salaries of the heads of the Department are much less than are paid in the company. This much is to be said for the Post Office: They know their job; they are on top of their job every time. In the light of these facts, what conclusive argument can be advanced to convince this House that the Post Office should not have taken this business over and made a success of it, as it has made with similar businesses? There is no argument of a conclusive character. What it amounts to is that there is a possibility of money in it. The Government of the day will retain for private interests and private enterprise anything that is likely to yield a profit.
  I shall be interested to hear the arguments of the Assistant Postmaster-General why the Post Office could not have run this business more efficiently than this private company. We have had it suggested that the Post Office might have experienced difficulty with the Dominions in persuading them to agree to the Post Office taking over the service, but the Post Office business is of an international character, and there is no reason why it
  1696
  could not have carried on this matter. The position is rather the reverse. In its experience and history the Post Office Department has invariably overcome all difficulties and obstacles. Where the matter becomes one of having a firm grip on those communities for purposes of stategy, the argument is so conclusive, as my right hon. Friend the Member for Keighley (Mr. Lees-Smith) has sai1d, that it should remain in the hands of the State.
  On those grounds alone the Government should have refused to hand this business over to any private concern. I hope we shall hear conclusive reasons why the Government have kept out of the business and have allowed a private company to take it over. I conclude with these words: This is none other than a ramp, supported by the Government of the day, in which their own friends are dipping their hands deep into the public purse—a thing which should not have been permitted, and a thing which this House should have turned its face against in the public interest and in the interests of all concerned.
  5.30 p.m.
  The Assistant Postmaster-General (Sir Walter Womersley): May I say in the first place that I welcome the contribution which has been made to the Debate by the hon. Member for West Willesden (Mr. Viant), who occupied the position which I now occupy when the Labour Government was in office? With regard to the illness of my right hon. Friend the Postmaster-General, to which reference has already been made, I want to assure the House that, if he had been here, he would have been at this Box defending the proposals of the Bill which I have to defend in his absence. I am glad to be able to inform the right hon. Gentleman, who made inquiries, and I am sure the House as a whole will be pleased to know, that my right hon. Friend is progressing very satisfactorily. The latest report we have had is that his progress is being maintained, and the doctors hope for his speedy recovery. I am sure we shall all welcome him back to this House, and I myself shall certainly welcome him back, not only here, but at the General Post Office.
  I think it will be for the convenience of the House if I state briefly the position in regard to this particular arrangement, and afterwards deal with the points that have been raised. Our great object is to secure better and cheaper communica-

  1697
  tions at home and abroad. That is the definite policy of the Post Office, and it was the policy of the Post Office during the time that the right hon. Gentleman opposite was in charge of it. We have maintained that policy, and have done our level best to make it a success. Home communications are our own monopoly, and we can deal with these as we like. We have undoubtedly made good progress as regards terms and conditions and as regards popularising the service. For instance, it is well known that we reduced the maximum telephone charge for night trunk calls to 1s., and the day charge for trunk calls to 2s. 6d. We introduced again the sixpenny telegram. These changes have proved that we could increase the traffic by making a reduction in charges. Whether it means an increase in profit is another matter; that is not always the case; but it does undoubtedly bring in a return.
  Overseas communications are not our monopoly, but our policy there is the same, namely, to try to get the lowest possible rates that we can in order to attract people to use the services. We have demonstrated that in the methods we have been able to arrange for decreased charges for the Empire air mail services. All these arrangements are designed with one definite object, with which, I am sure, hon. and right hon. Gentlemen opposite will agree, namely, the object of bringing the Empire countries closer together, and, in addition, helping, as we can help in this way, commercial interests and furthering trade and commerce between the Mother country and the Dominions and Colonies. We want as far as we can to develop the policy of reducing charges in all directions, but we have found, as I have already said, that in the earlier stages there has been an initial loss. We have been able to stand that in our internal services, and in connection with our overseas communication services we have had to stand it for the time being, although, of course, the increased traffic has made up for any losses, and in some cases has produced a bigger profit.
  Long-distance telegraphy is not a monopoly at the present time. The right hon. Gentleman opposite mentioned, in the course of his speech, that it is not really in our own hands. We have to consider the other partners in this great business.
  1698
  In 1928, when this matter was brought before the House of Commons, the arrangement made was entered into between the Dominions and all parties concerned, and was agreed to by the Dominions as well as by the British Government of that day. I do not want to weary the House with quotations from the Debate of that time, but I was a Member of the House and listened to the Debate. Recently, in order to refresh my memory, I have carefully re-read it, and I am satisfied that the arrangement then made was, in the light of the circumstances then obtaining, the best arrangement that could be made. We are now entering into a fresh arrangement, the reasons for which I will detail shortly. It means that the Post Office will be involved in a loss of £100,000 in revenue, but the reason for that is that there are going to be rate reductions of the order of £500,000.
  May I say here, in reply to a question that was put to me by the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith), that this is calculated on the present traffic of the company, and not upon any anticipated increase or reduction of traffic; it is the amount of loss that would accrue on the basis of the present traffic from these reductions. if there is an increase in traffic, and, consequently, a lessening of the loss, the Government will get its share. The Post Office is sacrificing £100,000. Speaking for my right hon. Friend and myself, I say we are glad to do that in order to obtain these big reductions in rates, because we believe it to be the right policy, pot only as regards our internal communications but as regards our communications within the great Empire itself.
  I should like to refer to a little past history, so far as the Post Office is concerned. Under the arrangement which was approved by the House in 1928, the Post Office leased the four beam wireless stations to the company for a period of 25 years, and the company, as has already been stated, undertook to pay £250,000 a year to the Post Office, plus 12 per cent. of any surplus profits earned by the company in any year above a standard revenue, the standard revenue then being fixed at 6 per cent., which I am sure the right hon. Gentleman will agree with me was a reasonable standard rate. In addition to the use of the beam

  1699
  stations, the rental of £250,000 covered the use of 12 Post Office telegraph circuits required for the working of the stations. This rental of £250,000 was based mainly on the profits of the Post Office from the beam wireless telegraph services when they were in their hands, and that was considered to be a fair and proper method of calculation. It must, however, be borne in mind that in the very next year the slump, which has been referred to on many occasions as a world financial blizzard, came along, and it had its effect on overseas telegraph communications just as it had upon every other form of business. Indeed, it probably had a bigger effect on that kind of business, because, even in the years of recovery, when this country internally showed a tremendous improvement, the external trade of the country, upon which these services depend for their revenue, had not expanded to the same extent as had the internal trade. Accordingly, the revenue of the company was tremendously affected by the slump in world trade, and, in addition, it had to face a good deal of foreign competition.
  I will give some figures to show what the effect was. Taking the revenue of the year 1929 as 100, the company's average index figure of traffic receipts dropped to 87 in 1930, to 74 in 1931, to 70 in 1933, and the average for the past 12 months has been 74½, while the figure for April of this year is 71½. In view of these figures, I think it will be realised that the annual payment of £250,000 arranged for was a bit of a burden on the company. Nevertheless they paid it. There has never been any question of their being granted a reduction; they have paid the £250,000 right up to date.
  Mr. Benson: Do the figures which the hon. Gentleman has just given relate to the total traffic of Cable and Wireless, Limited, or only to the beam service traffic?
  Sir W. Womersley: You are bound to take the average—
  Mr. Benson: No, you are not.
  Sir W. Womersley: There is no other way to do it. The whole intention was to put our cable and wireless communications on a sound basis, and to preserve them for this country and the Empire. We are all agreed upon that. For reasons
  1700
  which I am sure will be obvious to every Member of the House, we must take the whole business of the company, and I am giving the figures for the whole business of the company. The beam wireless system was affected by the world slump equally with the cables. The new arrangement is described in the White Paper and in the Memorandum which accompanies the Bill. The company will be relieved of the obligation to pay the £250,000 a year for the use of the beam wireless stations, and will be given greater security of tenure. My right hon. Friend the Financial Secretary has explained to the House that the Government will receive a share in the equity of the company, and this share in the equity of the company will also cover the continued provision of the 12 Post Office circuits required for the working of the stations. Sub-section (2) of Clause 1 of the Bill provides for the necessary arrangement between the Post Office and the company for the continued provision of those circuits.
  No mention has been made hitherto of that part of the Bill which deals with the agreement as regards the Kenya claim, but I want to put the whole case before the House, because it is a matter upon which there has been a little dispute between the Postmaster-General and the company, and we have had to make provision for it in the Bill because we have never reached an agreement with the company. My right hon. Friend considered that certain compensation should be paid to the Post Office, and that compensation was estimated in 1930, when the right hon. Gentleman opposite was Postmaster-General, at something like £35,000. We have been arguing with the company ever since. They said that a lesser sum should be accepted, but no figure has ever been agreed upon. The reason was that we wanted to get the main issue out of the way first. We wanted the House to leave it open to my right hon. Friend and myself to argue it out with the company, and I think we can claim at any rate that the matter is in safe hands. I will try to see that your confidence is justified.
  Now I come to Clause 2, under which it will be seen that the Post Office is called upon to sacrifice £100,000 a year. This may fairly be looked upon as a contribution towards the reductions made in

  1701
  the rates of the Empire telegraph services. The right hon. Gentleman opposite has said, "Do not use that as an argument." That is an old debating dodge, to tell your opponent not to use his best argument; but I am sure that if the right hon. Gentleman had been in the position of my right hon. Friend he would have been very pleased with such an arrangement. The company has already reduced the rates of its services. On 25th April it reduced its rate to 1s. 3d. a word for full-rate telegrams, 10d. a word for code, 7½d. for deferred, and 5d. for letter telegrams. Where a lower rate was already in force that is being retained. This new uniform rate of 1s. 3d. a word compares with a wide range of rates previously in force. For example, let me take the rate to Australia from this country, which was 2s. a word by cable and 1s. 8d. by wireless; it is now 1s. 3d. To New Zealand it was 1s. 8d.; to the West African Colonies it was 3s., and to Singapore it was 2s. 10d. From India to Australia it was 3s. 5d. Those are very substantial reductions, and they will be of very great benefit not only to the public at home but to the public overseas. We at the Post Office attach the greatest importance to these reductions because they are in harmony with our own policy of reducing rates wherever possible.
  There is also included in the Bill an arrangement with regard to European services. That is described as a joint purse arrangement, and the provisions will be found in Clause 1, Sub-section (4), which empowers the Postmaster-General to enter into a joint purse arrangement with the company. Previously there has been much overlapping and competition, and during the past few years we have tried to reduce this by making arrangements from time to time. We have now come to the definite conclusion that it is far better to have a working arrangement as between the company and the Post Office, than to work in competition with each other. This arrangement will be made to include all telegrams within the European system which make use of a service of either party, the Post Office or the company. This will achieve a threefold object. It will facilitate the interchange of traffic between the available routes, in the public interest and to the benefit of both parties; it will enable the service of both parties to be organised to the best advantage; and it will reduce the
  1702
  costs of competitive canvassing and advertisement.
  The amount of the earnings paid into the joint purse account on behalf of the Post Office and the company will be divided between them in specified proportions, based on the traffic receipts of each party in the years 1934, 1935 and 1936, subject to modifications in certain details and subject to a maximum payment in any one year by one party to the other of £25,000. The arrangement will be so designed as to give no financial advantage to either party as long as circumstances remain substantially unchanged. It will however, preserve a balance in the distribution of traffic and receipts between the two parties. The arrangement will be subject to termination or revision at the end of five years, or thereafter at six months' notice. Actually the position is this: It has to be left to our financial advisers to settle this question, subject of course to the £25,000 that, as I stated, is a limit, and I am sure that the right hon. Gentleman will agree with me that one can depend on our financial advisers to get the best arrangement possible. I am satisfied that it is a sound arrangement, and I am sure the House will take the same view.
  Mr. Lees-Smith: With regard to these services to the Continent—I am not talking about the Imperial routes—the Post Office have the right to take over those services at specified figures. Why have they entered into this joint purse arrangement at all when they can take over those services for themselves?
  Sir W. Womersley: The short answer is that we did not think it wise at this moment to take them over. I want to assure the right hon. Gentleman that we run the Post Office on sound businesslike lines, and both my right hon. Friend and myself, after applying whatever business experience we have and giving very careful consideration to the matter, were satisfied that the right thing at the moment was not to take over these services but to enter into this arrangement, and to consider it later on in the light of our experience. This House laid it down definitely in 1928 that it was necessary, in the interests of all concerned, to continue the cable services. These services have been operated since 1928 by the company's staff. The fact that the company is being given a freehold instead

  1703
  of a leasehold will not affect the staff in any way.
  We at the Post Office are in a position to deal with any staffs that may be considered redundant owing to less competition from continental services. We have already made provision that jobs shall be made for any of our people who may be affected; that there shall be no disturbance, and that their employment shall not suffer in any way through the effect of the joint purse arrangement. Our own staff will be kept, as we have made arrangements to provide employment for them in other departments where necessary. We are hopeful that the company may be able to do the same thing to any of their staff who have to be removed from these services. My right hon. Friend the Postmaster-General and myself are taking a very deep interest in the question of staffs. We have got assurances already, although I am not in a position to give details of those assurances. We are going to keep this matter carefully within our view.
  Mr. Viant: The hon. Gentleman knows that it invariably happens that when an agreement of this kind takes place certain members of the staff lose their chances of promotion for all time. Has attention been given in the present case to the possibility of these people being transferred to another department where their chances of promotion are not impaired?
  Sir W. Womersley: I appreciate that point. I know that it does often happen that when there is a large reduction in a department, and people have to be transferred to another department, their promotion chances are affected. In this case the number affected is so small that I do not think there will be any appreciable effect on promotion. That is the position so far as the Post Office is concerned.
  I want to refer to a remark which the right hon. Gentleman the Member for Keighley made, about a previous case. When the offer was made to the staff of choosing whether they should remain with the Post Office and be transferred into some other department, or go into the service of the company, a large number were so satisfied that the Post Office was the best employer that they
  1704
  remained. Others went into the company's service. I believe there have been complaints from those who went into the company's service when they discovered that their position was not so good as that of those who remained in the Post Office's service. There will be nothing of that kind this time. The only changes in staff would be those which may possibly result from the joint purse arrangement. The number affected would be very small. It would be so small on our side that it would not make any difference to promotion. We have made arrangements to meet that, and we hope that the company will do the same. My right hon. Friend and myself have both taken a personal interest in this matter.
  Mr. Viant: Is it possible to get the agreement before the Bill goes through?
  Sir W. Womersley: I do not think it is a matter which would justify our holding up the Bill.
  Mr. Viant: It is important.
  Sir W. Womersley: I am sure the hon. Member will agree that it is in safe hands. [Interruption.] I have given my pledge to the House, on behalf of my right hon. Friend and myself, that we shall give the matter close consideration.
  Mr. Maxton: Within the last 12 months we have left a matter of this sort entirely in the hon. Gentleman's hands, in connection with fellows who were engaged in collecting advertisements for the telephone directory. When the directory was taken over from the company operating it, the men were flung out on the streets, and they received no consideration whatever. The hon. Gentleman remembers that very well.
  Sir W. Womersley: I do remember it, and I remember the action I took. I was instrumental in placing in similar employment all except three, one of whom had obtained a position already, and the other two were of such an age that it was considered that they could not get an occupation of a similar kind with any other firm. I did everything I could, even for the two older men. I think that the hon. Gentleman will agree that I carried out the promise that I made to the House at the time. I went personally into the question and interviewed everyone. We cannot hold up the Bill over a matter of this kind, because we are

  1705
  already dealing with the question, and I have given a pledge to the House, and my right hon. Friend and myself will carry it out. I think that I have stated the position of the Post Office clearly, but if any other hon. Gentleman wishes to ask a question, I will try to deal with it.
  It is right and proper that the House should know exactly the position of the Post Office with regard to this agreement. The right hon. Gentleman mentioned the question of staff security, and I hope that I have dealt with the subject to his satisfaction. He also mentioned that when the company began its operations and got hold of these stations cables were in a very bad condition. Some of them were, at that time. No doubt owing to representations made by the right hon. Gentleman, immediate steps were taken to see that they were put into good condition, and they have been well maintained since. We have kept a very watchful eye on this matter because we know what it means in case of emergency if cables are not in a proper working condition. Though some of the cables at that time were temporarily out of order, they were put into repair, and I am glad to say that, since the right hon. Gentleman left office, they have been kept in good repair and condition.
  Mr. Benson: How many have been abandoned?
  Sir W. Womersley: I cannot say, but if any have been abandoned, they will have had to convince the Advisory Committee that it was in the interests of all concerned that they should be abandoned. I will get to know and let the hon. Member have the information. We are satisfied that, with the existing cables in the condition in which they are to-day, we have every facility for any strategic communications that we may require, should eventualities come along. That is a point to which the Post Office must have regard in considering the national interest. I am sorry that the experience of the right hon. Gentleman in negotiating with the company was not a very happy one. We have been a little more fortunate, probably because of the good seed which he sowed in those days. The right hon. Gentleman spoke about Stock Exchange speculation and feverish movements, and the hon. Gentleman the Member for Chesterfield had a good deal to say about it, and I would join issue with
  1706
  him. He really made a wonderful peroration, speaking of "this commercial speculation," "feverish activity" and so forth. It is the fact that, if a rumour gets around that the Government are to assist a particular industry or company, there is a rush of foolish people—I say this advisedly—to purchase shares, hoping that there will be a rise in the market price.
  I am sure that the hon. Member for Chesterfield, with his wide experience of the business of accountancy and commercial matters of all kinds, knows as well as I do that the law of supply and demand rules in the stock market as it does in every other market of the world. The hon. Gentleman knows that there are more ways of profitably investing money than investing in speculative shares. You will always have people who want to speculate and get a little from the other fellow. I have known directors of companies—I am not speaking of this company—who have done their level best to persuade people not to enter into mad speculations, because they realise that, if a£share runs up to 30s., 40s. or 50s. those who are directing the company's affairs are expected to provide a dividend, not on £1 but on the enhanced values of the shares. I have been shown a letter from a constituent of an hon. Member of this House, in which the writer said:
  " I note you are a director."—
  mentioning a particular company—
  " A few years ago I saved up a few pounds and I invested in some of your shares and paid XL for them. That brings me in five per cent., but I have discovered "—
  and he is a Welshman—
  " a neighbour of mine who is getting seven per cent. on his investment. Can I not be transferred from the five per cents. to seven per cents.? "
  If people pay an enhanced price for shares it is not for them to complain about the directors.
  Mr. Benson: I did not refer to shares of £1 running up to 30s., 40s. or 50s. I referred to the disgraceful fact that very inadequate assets were capitalised—£52,600,000—by the directors in this concern and then put on to the market. It is that of which I complain.
  Sir W. Womersley: If I was here as a director of this concern and had to defend the financial policy of the company, per-

  1707
  haps I should be able to give the hon. Member a lot of information about it, but I do not think that it is my job to do it.
  Mr. Maxton: You could do it in a businesslike way.
  Sir W. Womersley: Not on that basis. I am sure that the hon. Gentleman will give my right hon. and gallant Friend and me a little credit for not being landed into a show like that. The arrangement with the company is for the payment of a dividend of 4 per cent. The Treasury has accepted shares in the company.
  Mr. Benson: You have become guinea-pigs.
  Sir W. Womersley: As long as we get 4 per cent., which is what we expect, it will be satisfactory to us. It gives us a holding in the company, but as far as its finances are concerned, one would have to go back to the very beginnings of under-sea cables, to the pioneers and the money that was raised in the first place. The railways might be quoted in the same way. There is no doubt that the Wireless Holding Company was a very profitable concern when it was first introduced, and as trade improves it will be in the future. The right hon. Gentleman asks, "What about the future?" Some system might be introduced which might put that company right out of business, but one would not argue that it should be wiped out if it was considered to be in the public interest to keep it in existence. The hon. Member for Chesterfield dragged in a financial issue of this sort, going back into the dim and distant ages, and I do not think that it is quite fair to expect me to defend it. He also referred to the great monopoly of these people on the Empire services. It is true that they will have a monopoly as far as this country and Empire countries are concerned, and that is what we desire them to have. The right hon. Gentleman the Member for Keighley will agree that, if the State owned the services, the State should have a monopoly, but, unfortunately it cannot own them
  One of the reasons why it is desirable to reduce these rates and give the company Government assistance, is because of foreign competition. Every hon. and right hon. Member will agree that it is not in the best interests of this country
  1708
  that foreign services should be operating between countries within the Empire. It is true that the company have a monopoly up to a point, and we must give them that monopoly, otherwise, how can they compete with the foreign companies that are trying to get this traffic? If the right hon. Gentleman will study the Bill very closely and the White Paper closer still, he will agree with me that we are doing the best thing in the interests of the Empire as a whole by entering into this arrangement. A question was asked about the value of the shares the Treasury is to receive, and the hon. Member for Chesterfield replied to it on my behalf, and I am glad that he did it so well. He gave a wonderful explanation. He told the House about Cable and Wireless Holding and referred to the various companies whose shares are involved. He did not tell the House that, as far as those companies are concerned, it is something more than just a question of their being telegraph companies. He knows as well as I do that they also engage in manufacture.
  Mr. Benson: The manufacturing assets of the Marconi Company are not included in Cable and Wireless, but definitely excluded.
  Sir W. Womersley: We are dealing with the Cable and Wireless Holding, and they operate on behalf of the four companies that were mentioned.
  Mr. Benson: The hon. Gentleman is misrepresenting me.
  Sir W. Womersley: I would not like to do that.
  Mr. Benson: I was calculating the value of Cable and Wireless, Limited. These various things to which the hon. Gentleman referred are excluded from Cable and Wireless, Limited, and only included in Cable and Wireless Holdings, Limited.
  Sir W. Womersley: I am sorry to have to correct the hon. Member. I have specially obtained this information in anticipation of his question, and I want to know all about these companies myself. Three of these companies, the Eastern Telegraph, the Eastern Extension and the Western Telegraph Company, have considerable investments and other interests from which they derive dividends. The fourth company, the Marconi Company, has—and this is a definite statement—manufacturing and other interests from

  1709
  which it derives profits. The first three companies have debenture interest to pay, and the Eastern Telegraph also has to pay a dividend on preference stock before dividend goes to the ordinary shareholders. The hon. Gentleman will understand that operation.
  Mr. G. Griffiths: What about the Prime Minister? Does he understand it?
  Sir W. Womersley: He is not in the House.
  Mr. Griffiths: He is there.
  Sir W. Womersley: I want to clear up this point, and that is why I am reading from this document. I repeat that the first three companies have debenture interest to pay and the Eastern Telegraph Company has also to pay a dividend on preference stock. The greater part of the shares of these four companies has passed from public shareholders into the hands of Cable and Wireless Holding, Limited, originally known as Cable and Wireless, Limited, the holding company, which receives the dividends from the four older companies. It also receives dividends and interest from other investments. The capital of Cable and Wireless Holding, Limited—£23,649,694—is held by the public and the dividends pass to the shareholders. For 1937 the dividend was 5i per cent. on the cumulative preference stocks and shares and 4 per cent. on the ordinary stock. Therefore I submit that there is no need for me to defend the company from the alleged ramp. The hon. Member would not dare to repeat that statement outside the House. I will leave it at that.
  We regard this agreement as sound business because the reduction in rates has brought and will bring a great benefit to this country and the Empire. It will mean that we can face foreign competition. The standard net revenue above which half the profits are to be used for the reduction of rates has been reduced from £1,863,000 to £1,200,000, so that there is a prospect of further reduction in rates in the future, even greater than those that have already been made. The arrangement meets with the approval of the Empire countries. The reduced rates and the better working of the services will be of great advantage to this country, the Dominions and other parts of the Empire with which we desire to keep the closest communication whilst extending our com-
  1710
  merce with them and making the Empire more and more united.
  Mr. Edmund Harvey: Can the Assistant Postmaster-General say whether any consideration has been given to the possibility of Government representation on the board of the company, which has been described as a semi-public utility company?
  Sir W. Womersley: The hon. Member wishes to know about the question of control.
  Mr. Harvey: Government representation on the board.
  Sir W. Womersley: That is the same thing. The Government have the right to approve the appointment of the chairman. He cannot be appointed without the approval of the Government. Under the Treasury agreement, published in Command Paper 3338 resulting from the 1928 conference, many points in the constitution of the companies are fixed. British control is secured. The chairman and one other director of Cable and Wireless, Limited, are to be approved by the Government. Powers are conferred on the Imperial Communications Advisory Committee, which includes representatives appointed by the Dominion Governments, the Government of India and a representative of the Colonies. This committee must be consulted on matters of general policy, and without its consent rates must not be increased or routes discontinued. Under the United Kingdom licence further powers are reserved to the Postmaster-General. If anything happens of which the Postmaster-General does not approve he has the right to suggest to his colleagues in the Government that certain action be taken. I maintain therefore that we have complete control over the affairs of the company.
  6.20 p.m.
  Mr. R. Acland: In the course of his charming and delightful speech the Assistant Postmaster-General has raised several points of which I should like an explanation. Is there any inevitable or essential connection between the reduction of rates, to which he has referred, and the bargain that has been made about these wireless stations, which results in a loss of £100,000 or more to the Government? Throughout his speech there was a balancing of this reduction of rates and

  1711
  the bargain that has been made. Are these two things really connected, except that they happen to come before the House at the same time? As a matter of fact, the reduction of rates does not come before the House, because it has already happened. Is the connection anything more than a lucky chance, under which the reduction of rates has come at a time which has enabled the Assistant Postmaster-General to give a good deal of attention to it in proposing the Second Reading of a Bill which simply deals with the particular bargain?
  It seems to me that this is the case of a private company which was meeting with competition, just as many private companies have to meet with competition, and it found itself in danger of losing trade, or actually losing, trade, in the ordinary course of business. With the object, as the chairman's speech pointed out, of regaining trade and of making a higher profit, it reduced its rates. On that reduction it will lose money at first, but probably it will get money back later in increased revenue. Why should not this private company lose money? Why should it not earn less profit than it has been earning in the past? Why should it not, so far as this House and the taxpayers are concerned, make a loss? It has happened before that private companies have made a loss; sometimes they go out of business, as did the stage coach companies and other undertakings in the past.
  We are told that the services of this company are vital to the State and that we cannot allow them to cease to be carried on. If that is the position, would it not be better and more straightforward, if the services cannot be carried out by private enterprise, for the State to carry them out, or else to control the services, rather than to make a bad bargain, as we contend is being done under this scheme, which means that we are to lose £100,000. It is not a straightforward or reasonable way or doing business for the Government to come forward and say that unless we enter into a bargain which means a loss to the taxpayers of £100,000, the company will not be able to carry on these services which are essential to the State. Where there is a service which must be a monopoly we submit that there must be control. The Government have not sufficient control.
  1712
  We have been told, in response to an interruption, that the Government must approve the directorate; but the directorate is working in the interests of the shareholders and not necessarily in the interests of the public service. There has not been sufficient Government control to prevent a financial business which, at the very best, is a matter of question. With regard to the standard rate of dividend, I admit that it is a modest enough rate, but we have to take into account the watering of capital on which that dividend has been paid, and when we have done that, the rate of interest is quite high enough for a company which seems to be in the position of knowing that it will always receive benefits from the Government if it should be in danger of going out of business.
  There is one idea which is advocated on these benches, which I admit is rather difficult to put into practice, and that is that the man who has enterprise should receive a reward, whether he has capital or not. We say, and I believe the House says and the country will say, that that is a right principle; but the opposite principle is advocated by the Government, namely, that the man who has capital, even the man who has watered capital, must receive a reward whether he has enterprise or not. That is a serious inversion of what ought to be the proper principle, and this Bill is an example of that. I do not see why we should make this bad bargain.
  I would ask whoever winds up the Debate for the Government to answer this question. What would have been the position if this bargain had not been between a Government acting with taxpayers' money and the company, but it had been a bargain between two companies, both of them staking the money of their shareholders? I would ask the Minister to consider what would have happened if one or other of those companies had brought forward a bargain of this kind before the shareholders' meeting. If they had been dealing with shareholders" money and property in the way that the Government have been dealing with the taxpayers' money, the directors would have been dismissed by the shareholders at their next meeting. In this case, the taxpayers are shareholders in the concern.

  1713
  Is it not a fact that this company is finding great difficulty in meeting the competition of the air mail? Is not the growth of the air mail the thing that is at the bottom of the unsound financial position of this company? Is there not a danger that the air mail will do to the wireless communications exactly what the wireless communications did to the cables and what presumably the cables did to the earlier transport of letters? If that is so, are not the affairs of this company in a somewhat analogous state to those of Imperial Airways, and would it not be better to make a thorough-going job of the matter and for the Government to take over the company as a State concern which, incidentally, could make a profit, as the Post Office does? If the Debate ends at an early hour, which I hope will not be the case, I shall not be able to hear the reply of the Minister, in which case I hope the Minister will forgive my absence, because I shall have to read what he says in the OFFICIAL REPORT.
  6.29 p.m.
  Sir Arnold Wilson: If the Postmaster-General were present he would have been amused to hear the hon. Member for Barnstaple (Mr. Acland) saying that the Post Office is a public service which, incidentally, makes a profit. I am afraid that the Postmaster-General would have had a wry smile on his features, remembering his negotiations with the Chancellor of the Exchequer and the amount that the Treasury takes annually from the Post Office. There is one point I should like to raise from my own experience and knowledge in the East of the arrangements that were make when the staff of the Indo-European Telegraph Company were taken over by Cable and Wireless. The Assistant Postmaster-General has told us that the Government have effective control over the company with which this Bill is concerned. If so, I hope they will keep a careful eye upon the interests of the staff. Cable and Wireless Limited did not give a fair deal to the staff when they took over from the Indo-European Telegraph Company.
  I have many documents, but I will not trouble the House with them, showing that the staff were treated shabbily, in a manner which no Government Department would have treated the staff had the company been taken over by the
  1714
  Government. In this case the Government are dealing with a staff one or two removes, but it is none the less incumbent upon them, when they are making an agreement of this sort, to ensure that these men who are in a highly specialised service abroad are dealt with as though they were dealing with their own staff. These telegraphists are peculiarly unsuited by the nature of their work for other employment if they are transferred or removed. They have spent their whole lives abroad in distant and remote stations and in circumstances of great difficulty, and they deserve particularly favourable and kindly treatment.
  I see nothing in the Bill, although there may be something in the agreement, which will enable the Post Office to exercise some form of beneficent control over the attitude which the company may adopt to its old staff, and to any future staff they may take on. I am not in the least impressed by the argument of the hon. Member for Barnstaple that the air mail is going to destroy cables and wireless. That is not in the least likely to happen. On the contrary, improvements in communications will make for more air mail liners carrying a greater number of people, we shall have more wireless communications and better, and possibly even more cables. Whether it is for civil or military purposes, we must keep our telegraphic communications in the best possible state, and that requires the best possible staff. You can only get the best possible staff, not by paying higher salaries, but by making them realise that they are being treated in the same honourable way in which the Government of this country deals generally with its staffs abroad. I hope the Postmaster-General will bear this point in mind when we come to the further stages of the Bill.
  6.34 p.m.
  Mr. Pethick-Lawrence: The hon. Member for Hitchin (Sir A. Wilson) has brought up the question of the treatment of the staff, originally referred to by my right hon. Friend the Member for Keighley (Mr. Lees-Smith) and replied to by the Assistant Postmaster-General. I shall have something to say on that point later. Hon. Members, I am sure, must recognise that although we have had a very chatty and entertaining speech from the Assistant Postmaster-General, the crushing case made against the Bill by the.

  1715
  right hon. Member for Keighley, the hon. Member for Chesterfield (Mr. Benson) and the hon. Member for Willesden (Mr. Viant) remains entirely unanswered. It is one of the misfortunes of this House that we have a somewhat fluctuating audience, and on looking around I see present at the moment very few Members who listened to the speeches which were made by hon. Members on these benches. The Financial Secretary, in opening the Debate, imagined that the case to be put forward from this side would be a purely theoretical Socialist case, and he said that as the House was dealing with a practical question the Socialist case might be allowed to go by the board. Those hon. Members who were present and listened to the speeches from hon. Members on this side will bear me out in saying that they heard something entirely different from a theoretical case.
  My right hon. Friend the Member for Keighley, an ex-Postmaster-General, spoke from a rich experience and knowledge of the facts, and demonstrated conclusively that the arrangements made 10 years ago had not worked out in the least as expected, and that it would have been much better had the arrangement been put through in the way we thought it should have been done. He made out, in fact, a complete commercial case against the Bill, and showed that the only argument which could possibly be brought in favour of the Bill was that the Government had succeeded in bringing about a reduction in rates. The point which my right hon. Friend and also the hon. Member for Barnstaple (Mr. Acland) made, was a perfectly straightforward one; whether it would be necessary for the company to make these reductions quite independent of the concessions which are being made? There is no doubt that the company, faced with the competition which prevails and with the prospect of an increased revenue from a cheaper service, would in its own interests be compelled sooner or later to make the reductions they have in fact consented to make now. There is no proof whatever that in the long run they will not benefit very considerably from these reductions. The Assistant Postmaster-General has said perfectly accurately that the first effect would be a loss, but that does not mean that in the long run it will not be of advantage to the company,
  1716
  and there is no sign in the Bill and no argument has been put forward, that these two things, a reduction of rates and a gift to the company, are part of one scheme.
  The hon. Member for Chesterfield in a brilliant speech, as I thought, made a powerful financial attack on the Bill; and the Assistant Postmaster-General did not answer him by picking out one small point and entering into a long discussion of the financial position of the company. My hon. Friend asked, first, what were we giving away? He showed that we were giving away several things, certain things which cannot be reckoned in money, and one thing which can. Among the things which cannot be reckoned in money are the sacrifice of the freehold of these beam stations; prolonging the right of the company to the licence; and that we were giving what may be construed as almost a vested interest in perpetuity. Among the things which can be measured financially was the release of the rental which they had at present to pay, £250,000, and the substitution of shares which will not bring in an income in excess of £100,000.
  Incidentally, my hon. Friend asked to what sort of company we were making these concessions, and on that comparatively small point the Assistant Postmaster-General discussed the financial position of the company. Towards the end of his speech the Assistant Postmaster-General professed to have demolished the statistics and facts of my hon. Friend. He did nothing of the kind. What he told us was in fact what my hon. Friend had actually said. Let me say this that if instead of being the custodians of the national purse we were shareholders in a private company we certainly should not agree to the bargain which the Government are making on our behalf. That contention has been supported by the hon. Member who spoke for the Liberal party. Of course, the great bulk of hon. Members, who ought to be considering the affairs of their clients, the public of this country, have been absent from the Debate and have not heard the case, but they will come trooping into the Lobby and will vote for the Government.
  I propose to put another count in the indictment against the Postmaster-General. But before I come to that there are two minor points to be discussed.

  1717
  There is the question of the staff. However much we may differ from the Assistant Postmaster-General on this issue, he is a thoroughly honourable man and he says that we can trust him to do the straight thing. Is that enough? It is perfectly true that the House is willing to forgo having it stated in the Bill and to trust Members of the Government when they make promises, provided that those promises are of a sufficiently specific kind, but the Minister has not given us a specific promise up to the moment, and unless we can get it we shall have to maintain our attitude towards the Bill on this point. The Assistant Postmaster-General said earlier that whatever happens to members of the staff he will see that they get other positions. That is not enough. These people are civil servants. They have at the present time a contract of service, and if they are on the permanent staff it is a contract lasting for their working life, with a pension at the end. What we want to know is this: Are these civil servants going to get another position where their present rights as regards salary and rises in salary and pensions, will be just as good in their new positions as they are at present? If we can have an assurance on that point we shall be satisfied, and I think the hon. and gallant Member for Hitchin (Sir A. Wilson) would also be satisfied so far as they are concerned. As to the servants of the company, I do not see that we can ask the Minister for a specific guarantee concerning their position, for they are not under his control, but we would like to know what he can tell us in regard to them, because this arrangement will be thoroughly unsatisfactory if, while the civil servants are protected, the servants of the company are being pushed out of their jobs owing to the arrangement that is being made.
  Sir A. Wilson: Is the right hon. Gentleman aware that the Pacific Cable Board protected their staff by the following clause in their agreement?—
  " That the company will employ him [the employė] on terms at least as favourable as those on which he was employed by the board, including tenure of office, remuneration, allowances, gratuities, pensions, superannuation. sick fund, or any other customary privileges, whether enjoyed as of right or by the customary practice of the board."
  I take it that the right hon. Gentleman agrees that if that can be done by the
  1718
  Pacific Cable Board, it can be done by Cable and Wireless, Limited.
  Mr. Pethick-Lawrence: I say that all the Assistant Postmaster-General can assure us is that he will obtain adequate guarantees with regard to the men who are servants of the company. That is as much as we can expect from him in their case. But as far as the civil servants are concerned, he must give an absolute guarantee that their position will not be worsened by the change.
  There is one other small matter to which I expected the Financial Secretary to the Treasury to refer, because it seems to me to be a matter of some slight importance. The House seems to be under the impression that the Government are giving up £250,000, and that they are going to get whatever value there may be from the dividends on the shares. In taking that view, the House has not separated the two entities, the Treasury and the Post Office. What the arrangement provides is a little different from that. Under the old arrangement, the Post Office was entitled to £25,000 a year in rent, which sum went to swell the funds out of which the Post Office was entitled to so much every year, without the Treasury being able to dip their hands into the till. The Post Office is to sacrifice the whole of that amount of £250,000. The interest or dividend on the shares will not go to the Post Office, but to the Treasury, and the Treasury undertake that£150,000 shall be paid out of the Exchequer to the Post Office. The Post Office will definitely be worse off by the sum of£100,000 a year. The Treasury will have to pay£150,000 a year to the Post Office and to recoup itself, as far as it goes, by the dividend on the shares. If one assumes that the dividend will be £90,000, the Treasury will lose £60,000 and the Post Office will lose£100,000. That seems to me to be of some importance, because it affects the available surplus. Clearly, the Post Office will sacrifice£100,000 and will get nothing for itself in return. It does not seem to me to be a very desirable thing that the Post Office should suffer the whole of that loss.
  I would like now to pass from those two minor points to the main issue. The case which has been put by my right hon. Friend the Member for Keighley, my hon. Friend the Member for Chesterfield, and other hon. Members, is a

  1719
  strong one. It is that if, instead of being the House of Commons, concerned with the affairs of the nation, we were a private concern, we ought not, on commercial and financial grounds, to make this bargain. In point of fact, the case against the proposal is very much stronger than that. We are not a private concern making a bargain by which we lose part of our property; we are speaking and acting on behalf of the nation; and there are in this question large national and imperial interests which the Government are prepared to sacrifice. After all, communications are not simply commodities which can be bought and sold, which hon. Members opposite think ought to be a matter of private enterprise, and hon. Members on this side of the House think ought to be public enterprise. Communications are vital services of the nation and the Empire. They cannot be bandied about with the same freedom as in the case of merchandise.
  Of course, not only hon. Members on these benches, but hon. and right hon. Gentlemen opposite recognise that in war time it is absolutely essential that communications should be in national hands and not in private hands. Hon. Members opposite may say that that is provided for, and that it is made clear that these communications would be taken over by the Government in the event of war breaking out. But would it be as good to "swop" horses while crossing the stream as to have the same team throughout? I should have thought that it would have been very much better if these communications had been, were and would be in Government hands all the time, than that there should be a transfer of authority at a time when the greatest difficulty would be experienced in other ways at the outbreak of a war. But it is not merely in time of war that it is of such great importance that communications should be in Government hands. Even in peace time, the service of communications is of vital importance to our well-being. The Government constantly use these means of communication, they are constantly sending cables and communications of all sorts to other Governments. It would be very much better if this service were in the hands of civil servants rather than that private persons should have access to the secret and important telegrams which the Gov-
  1720
  ernment may be sending to other Governments.
  What does the Bill do? The Financial Secretary says that no doubt hon. and right hon. Gentlemen on these benches would like to reverse the 1928 decision. That, of course, is true, but it is a question which does not arise on this Bill. What the Bill does is to extend the concession, and to extend it in the most objectionable manner by alienating Government freehold property. These important beam stations, and all their apparatus, are being handed over in perpetuity to a private company. In the case of the Continental business, the Government, instead of acting upon the power which they already have, are further depriving the nation of control over this essential service of communications.
  My hon. Friends on these benches have made out the business case against the Bill. I venture to believe that I have further made out the national and Imperial case against it. I believe that if this Measure is carried, the House will be sacrificing a vital and essential national asset, and giving it up for no valid reason. Even if the Government had had to make some slight concession to the company in order to get them to agree to the reduction of rates, it was not by any means necessary to make it in this form. It was not necessary to sacrifice the freehold property of the Government. It was not necessary to hand these things over to the company in perpetuity. It was not necessary to extend for another 10 years the power of the company to run the service. None of these things need have been done. It would have been possible to retain all that was necessary in national hands under the control of the Government. My right hon. Friend the Member for Keighley said that no one can foresee what the development of communications of all kinds will be in the course of the next 15, 20 or 25 years. That is undoubtedly true; and it would have been a very much wiser course, and one much more in the interests of the country as a whole, if the Government had held their hand and not made this alienation of Government rights and property to a private company.
  6.57 p.m.
  The Secretary of State for Dominion Affairs (Lord Stanley): I apologise to the House for being the third speaker from

  1721
  this Bench to take part in a comparatively short Debate, but as soon as it was seen that the Opposition had put down a reasoned Amendment for the rejection of the Bill, it was decided that, in the general interests of the House, it would be better if the Assistant Postmaster-General spoke fairly early in the Debate and gave all the information possible, and another Member of the Government wound up the Debate. We felt that if hon. Members opposite were really doubtful as to the propriety or advisability of this agreement, we should not in any way shirk inquiries, and we should give them all the information at our disposal. I do not think any hon. Member will deny that very little was left unsaid on his own Department by my hon. Friend the Assistant Postmaster-General. I do not want to spoil the effects of my hon. Friend's speech or that of the Financial Secretary to the Treasury by vain repetition.
  One point in the speech of my hon. Friend the Assistant Postmaster-General was specifically raised by my hon. Friend the Member for Hitchin (Sir A. Wilson) and by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick Lawrence), namely, the question of staff, which is one which closely affects every hon. Member. I am glad to be able to tell the House that the Assistant Postmaster-General is able to give the assurance that the rights of civil servants will be maintained in every respect, both as regards pensions and terms of employment, and in every other way. With regard to the servants of the company, who are not directly under his control, he has given the definite promise that he and the Postmaster-General will do everything they can to see that the servants of the company are well treated in every respect. I think the right hon. Gentleman will agree that that is as far as we can go at this stage.
  Mr. Pethick-Lawrence: I do not think that goes very far. It is one of those vague utterances that do not go anywhere at all. Have they, or will they get from the company, any undertaking in the matter?
  Sir Charles Barrie: As a director of the Cable Company I can give the House an assurance that those servants who will have to be dispensed with will be treated in no worse manner than they are being treated at the moment.
  Mr. Benjamin Smith: They ought to have the protection of the Government. It should be a term of the agreement that no one should be worsened as the result of it.
  Lord Stanley: I have already said Ely right hon. Friend will assure himself that the servants of the company will not suffer in any way, and we have already had an assurance, unofficial though it may be, from a director of the company speaking only a minute ago.
  Sir John Withers: I have seen a good many amalgamations of statutory undertakings under the Board of Trade. They insist upon a clause being put in, if I understand it, that no employé of the company taken over shall be in the least worsened position than before.
  Mr. Lees-Smith: Will the hon. Member for Southampton (Sir C. Barrie) tell us that he will give that or a similar guarantee?
  Sir C. Barrie: The guarantee that the company is willing to give is what I have already stated, that the position of those servants who may not be continued will be taken care of, and they will be in no worse position than if they had continued in their present service.
  Lord Stanley: No one desires more than I do that the staff should be properly treated.
  The Debate has in no way been conducted upon theoretical, but rather upon practical lines. The right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) took a general principle which has been a sort of tenour running through the Debate that he would continue the protest made by his party in 1928, and I think that in doing so, he is falling into the same mistake as his party made 10 years ago. Their feelings are so outraged by the idea of an agreement with private enterprise, and particularly with the Cable Company, which they look upon as the weakest link in the chain of communications, that they overlook the really dominating factor of the whole business, which is the measure of agreement arrived at between ourselves and the other Governments in the British Commonwealth. The right hon. Gentleman seemed to take it for granted that they would follow the lead given by the Government, or by the Post Office, and he gave an instance where this example was followed

  1723
  during the time when he was Postmaster-General. I understand that when those discussions were taking place, before the original agreement was made in 1928, the Governments of the Dominions informed the committee that was looking into it that they would not have agreed to any sort of Imperial utility company which deprived them of their independent control and that the placing of the whole system under the control of the United Kingdom Government was equally unacceptable. I also understand that this scheme would have been almost impossibly expensive. We should have had to buy out the control of the wireless stations overseas and also take over the working of the far end of the cables, even if the owners had been ready to sell.
  There seem to be two essential questions that have to be answered. The first is whether these arrangements, which concern all the component parts of the British Commonwealth of Nations, command the support of those component parts. The other is whether the interests of the public are adequately served by the agreement that we propose to make. With regard to the first, the other Governments approved the original arrangement and also approve the present arrangement, and it is not at all clear that any general agreement could have been secured on any other basis. It is with regard to the second question that we have been mainly concerned to-day. We believe that an agreement on the lines that we propose is essential, and the whole argument is whether this particular agreement is the best that could be obtained. I think we might forget that the words "ramp," "robbery" and "favouritism" were ever used, because it is obvious that, on whichever side of the House we may be sitting, we all want to get the best agreement for the general public that we possibly can. It is no crime, surely, to sell national property provided that the sale is justified in the public interest, and we claim that the sale of these four beam stations was amply justified by the advantages that are going to accrue from the new arrangement. In the first place —a point that was amplified by the right hon. Gentleman the Member for East Edinburgh—the strategic aspect of these communications has been amply safeguarded, because it is essential that for
  1724
  secrecy and for strategic reasons these essential cables should be maintained. The other great advantage that we have got out of it is the drastic reduction of rates. We have been asked whether the reduction of rates is in any way bound up with the fact that we have let the company off the rent that they had to pay for the beam stations. Of course it has, because, unless we had done so, the company could not possibly have carried out these reductions on the terms of the original agreement.
  You cannot deal in a case of this kind with concrete factors only. There are a great many intangible factors as well, and, taking them into consideration, I feel that we have made a good bargain, because not only have we a very drastic reduction in the rates but we have also quickened communications between various parts of the Empire, we have done a great deal to assist the commercial community in carrying on trade at a very difficult time and we have completely safeguarded the strategic aspects of the question. We cannot talk as if we were one commercial company bargaining with another, because the Government must bear in mind the great responsibilities that they have and the great advantages that may accrue quite irrespective of finance. Two commercial companies would deal in terms of finance only. We have to face the question on a very much wider basis, and it is on that wider basis that I claim that the agreement is fully justified. We have also been asked whether we ought not to wait and see whether the air mail will not become a serious competitor with this company, necessitating a fresh agreement in a few years' time. I am afraid that even under the dynamic influence of the newly-appointed Secretary of State for Air it will be a very long time before the air mail can catch up with telegraphy.
  The Opposition have criticised the Government in 1928, and again in 1938 more or less on the same lines. They object to the solution that we have put forward. I think we ought to say to them that this solution is agreed upon by the other Governments, we think that it is acceptable as a financial agreement and they themselves, although they oppose what we wish to do, have never put forward a solution which has satisfied anyone but themselves. We are told that the ques-

  1725
  tion has been dealt with to-day from the point of view of business and of national and Imperial importance, and it is from all those points of view that I have a perfectly clear conscience in asking the House to support the Second Reading
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 186; Noes, 110.

  Division No. 223.

  AYES.

  7.15 p.m.

  Acland-Troyte, Lt.-Col. G. J.

  Fremantle, Sir F. E.

  O'Neill, Rt. Hon. Sir Hugh

  Adams, S. V. T. (Leeds, W.)

  Furness, S. N.

  Perkins, W. R. D.

  Agnew, Lieut.-Comdr. P. G.

  Fyfe, D. P. M.

  Petherick, M.

  Amery, Rt. Hon. L. C. M. S.

  Gluckstein, L. H.

  Pickthorn, K. W. M.

  Anderson, Rt. Hn. Sir J. (Sc'h Univ's)

  Glyn, Major Sir R. G. C.

  Pilkington, R.

  Aske, Sir R. W.

  Goldie, N. B.

  Ponsonby, Col. C. E.

  Astor, Major Hon. J. J. (Dover)

  Gower, Sir R. V.

  Procter, Major H. A.

  Astor, Viscountess (Plymouth, Sutton)

  Graham, Captain A. C. (Wirral)

  Ramsay, Captain A. H. M.

  Astor, Hon. W. W. (Fulham, E.)

  Grant-Ferris, R.

  Rathbone, J. R. (Bodmin)

  Barrie, Sir C. C.

  Gridley, Sir A. B.

  Reed, A. C. (Exeter)

  Beechman, N. A.

  Grimston, R. V.

  Reed, Sir H. S. (Aylesbury)

  Beit, Sir A. L.

  Guest, Lieut.-Colonel H. (Drake)

  Reid, W. Allan (Derby)

  Bernays, R. H.

  Hambro, A. V.

  Remer, J. R.

  Bossom, A. C.

  Hannah, I. C.

  Rickards, G. W. (Skipton)

  Boyce, H. Leslie

  Harbord, A.

  Ropner, Colonel L.

  Bracken, B.

  Haslam, Sir J. (Bolton)

  Ross Taylor, W. (Woodbridge)

  Briscoe, Capt. R. G.

  Heilgers, Captain F. F. A.

  Rowlands, G.

  Broadbridge, Sir G. T.

  Holy-Hutchinson, M. R.

  Royds, Admiral Sir P. M. R.

  Brown, Col. D. C. (Hexham)

  Heneage, Lieut.-Colonel A. P.

  Russell, R. J. (Eddisbury)

  Brown, Brig.-Gen. H. C. (Newbury)

  Hepburn, P. G. T. Buchan-

  Salmon, Sir I.

  Bull, B. B.

  Hope, Captain Hon. A. O. J.

  Salt, E. W.

  Butcher, H. W.

  Hopkinson, A.

  Samuel, M. R. A.

  Campbell, Sir E. T.

  Howitt, Dr. A. B.

  Sandeman, Sir N. S.

  Cartland, J. R. H.

  Hudson, Capt. A. U. M. (Hack., N.)

  Sanderson, Sir F. B.

  Carver, Major W. H.

  Hutchinson, G. C.

  Sandys, E. D.

  Cayzer, Sir C. W. (City of Chester)

  Inskip, Rt. Hon. Sir T. W. H.

  Scott, Lord William

  Channon, H.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Shepperson, Sir E. W.

  Chapman, A. (Rutherglen)

  Keeling, E. H.

  Smith, Bracewell (Dulwich)

  Chapman, Sir S. (Edinburgh, S.)

  Kerr, Colonel C. I. (Montrose)

  Smith, Sir R. W. (Aberdeen)

  Christie, J. A.

  Kerr, J. Graham (Scottish Univs.)

  Somervell, Sir D. B. (Crowe)

  Clarke, Frank (Dartford)

  Latham, Sir P.

  Somerville, A. A. (Windsor)

  Colville, Rt. Hon. John

  Law, Sir A. J. (High Peak)

  Stanley, Rt. Hon. Lord (Fylde)

  Conant, Captain R. J. E.

  Law, R. K. (Hull, S.W.)

  Stanley, Rt. Hon. Oliver (W'm'l'd)

  Cooke, J. D. (Hammersmith, S.)

  Leech, Sir J. W.

  Storey, S.

  Cooper, Rt. Hn. T. M. (E'nburgh, W.)

  Leighton, Major B. E. P.

  Stourton, Major Hon. J. J.

  Courtauld, Major J. S.

  Lennox-Boyd, A. T. L.

  Strauss, E. A. (Southwark, N.)

  Cook, H. B. Trevor

  Lipson, D. L.

  Strauss, H. G. (Norwich)

  Cranborne, Viscount

  Lloyd, G. W.

  Stuart, Hon. J. (Moray and Nairn)

  Crooke, Sir J. S.

  Locker-Lampson, Comdr. O. S.

  Sueter, Rear-Admiral Sir M F.

  Crookshank, Capt. H. F. C.

  Loftus, P. C.

  Tasker, Sir R. I.

  Croom-Johnson, R. P.

  Lyons, A. M.

  Tate, Mavis C.

  Cross, R. H.

  Macdonald, Capt. P. (Isle of Wight)

  Tufnell, Lieut.-Commander R. L.

  Crossley, A. C.

  McKie, J. H.

  Wakefield, W. W.

  Crowder, J. F. E.

  Macnamara, Major J. R. J.

  Wallace, Capt. Rt. Hon. Euan

  Culverwell, C. T.

  Macquisten, F. A.

  Ward, Lieut.-Col. Sir A. L. (Hull)

  Davies, C. (Montgomery)

  Magnay, T.

  Ward, Irene M. B. (Wallsend)

  Davies, Major Sir G. F. (Yeovil)

  Makins, Brig.-Gen. E.

  Wardlaw-Milne Sir J. S.

  Denman, Hon. R. D.

  Margesson, Capt. Rt. Hon. H. D. R.

  Watt, Major G. S. Harvie

  Denville, Alfred

  Markham, S. F.

  Wayland, Sir W. A

  Dixon, Capt. Rt. Hon. H.

  Mason, Lt.-Col. Hon. G. K. M.

  Wedderburn, H. J. S.

  Doland, G. F.

  Mayhew, Lt.-Col. J.

  Wells, S. R.

  Duckworth, W. R. (Moss Side)

  Mills, Sir F. (Leyton, E.)

  Whiteley, Major J. P. (Buckingham)

  Duggan, H. J.

  Mills, Major J. D. (New Forest)

  Wickham, Lt.-Col. E. T. R.

  Dunglass, Lord

  Mitchell, Sir W. Lane (Streatham)

  Williams, H. G. (Croydon, S.)

  Edmondson, Major Sir J.

  Moore, Lieut.-Col. Sir T. C. R.

  Wilson, Lt.-Col. Sir A. T. (Hitchin)

  Elliot, Rt. Hon. W. E.

  Moreing, A. C.

  Winterton, Rt. Hon. Earl

  Emrys-Evans, P. V.

  Morgan, R. H.

  Withers. Sir J. J.

  Entwistle, Sir C. F.

  Morris-Jones, Sir Henry

  Womersley, Sir W. J.

  Errington, E.

  Morrison, G. A. (Scottish Univ's.)

  Wright, Wing-Commander J. A. C.

  Erskine-Hill, A. G.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Young, A. S. L. (Partick)

  Evans, Capt. A. (Cardiff, S.)

  Muirhead, Lt.-Col. A. J.

  Fleming, E. L.

  Munro, P.

  TELLERS FOR THE AYES.—

  Fox, Sir G. W. G.

  O'Connor, Sir Terence J.

  Captain Dugdale and Major Herbert.

  NOES.

  Adams, D. (Consett)

  Benn, Rt. Hon. W. W.

  Brown, C. (Mansfield)

  Adams, D. M. (Poplar, S.)

  Benson, G.

  Burke, W. A.

  Ammon, C. G.

  Bevan, A.

  Cape, T.

  Barnes, A. J.

  Broad, F. A.

  Cluse, W. S.

  Bellenger, F. J.

  Bromfield, W.

  Clynes, Rt. Hon. J. R.

  Cove, W. G.

  Kirby, B. V.

  Salter, Dr. A. (Bermondsey)

  Cripps, Hon. Sir Stafford

  Lansbury, Rt. Hon. G.

  Seely, Sir H. M.

  Daggar, G.

  Lathan, G.

  Sexton. T. M.

  Davidson, J. J. (Maryhill)

  Lawson, J. J.

  Shinwell, E.

  Davies, R. J. (Westhoughton)

  Leach, W.

  Silkin, L.

  Davies, S. O. (Merthyr)

  Leslie, J. R.

  Simpson, F. B.

  Dobbie, W.

  Logan, D. G.

  Smith, Ben (Rotherhithe)

  Dunn, E. (Rother Valley)

  Macdonald, G. (Ince)

  Smith, E. (Stoke)

  Ede, J. C.

  McEntee, V. La T.

  Smith, Rt. Hon. H. B. Lees- (K'ly)

  Edwards, A. (Middlesbrough E.)

  McGhee, H. G.

  Smith, T. (Normanton)

  Edwards, Sir C. (Bodwellty)

  McGovern, J.

  Stephen, C.

  Fool, D. M.

  MacLaren, A.

  Stewart, W. J (H'ght'n-le-Sp'ng)

  Frankel, D.

  Maclean, N.

  Strauss. G. R. (Lambeth, N.)

  Gardner, B. W.

  Marshall, F.

  Summerskill, Edith

  George, Major G. Lloyd (Pembroke)

  Mathers, G.

  Taylor, R. J. (Morpeth)

  Greenwood, Rt. Hon. A.

  Maxton, J.

  Thorne, W.

  Griffith, F. Kingsley (M'ddl'sbro, W.)

  Messer, F.

  Thurtle, E.

  Griffiths, G. A. (Hemsworth)

  Milner, Major J.

  Tinker, J. J.

  Groves, T. E.

  Morrison, Rt. Hon. H. (Hackney, S.)

  Viant, S. P.

  Guest, Dr. L. H. (Islington, N.)

  Morrison, R. C. (Tottenham, N.)

  Watkins, F. C.

  Hall, G. H. (Aberdare)

  Muff, G.

  Watson, W. McL.

  Hardie, Agnes

  Nathan, Colonel H. L.

  White, H. Graham

  Harris, Sir P. A.

  Noel-Baker, P. J.

  Whiteley, W. (Blaydon)

  Harvey, T. E. (Eng. Univ's.)

  Oliver, G. H.

  Wilkinson, Ellen

  Hayday, A.

  Paling, W.

  Williams, E. J. (Ogmore)

  Henderson, A. (Kingswinford)

  Parker, J.

  Williams, T. (Don Valley)

  Henderson, T. (Tradeston)

  Pearson, A.

  Wilson, C. H. (Attercliffe)

  Hills, A. (Pontefract)

  Pethick-Lawrence, Rt. Hon. F. W.

  Windsor, W. (Hull, C.)

  Hopkin, D.

  Price, M. P.

  Young, Sir R. (Newton)

  Jones, Sir H. Haydn (Merioneth)

  Quibell, D. J. K.

  Jones, Morgan (Caerphilly)

  Ridley, G.

  TELLERS FOR THE NOES.—

  Kelly, W. T.

  Ritson, J.

  Mr. John and Mr. Adamson.

  Kennedy, Rt. Hon. T.

  Robinson. W. A. (St. Helens)

  Bill read a Second time.

  Bill committed to a Committee of the Whole House for To-morrow.— [Captain Margesson.]

  IMPERIAL TELEGRAPHS [Money].
  Considered in Committee under Standing Order No. 69.
  [Captain BOURNE in the Chair.]
  Motion made, and Question put,
  " That, for the purposes of any Act of the present Session to enable the Treasury and the Postmaster-General to carry out certain arrangements made by His Majesty's Government in the United Kingdom with Cable and Wireless, Limited, and in connection with those arrangements to amend the law with respect to the calculation of the Post Office net surplus, it is expedient to authorise—

  (a) the payment into the Exchequer of any dividends or other sums received by the Treasury in respect of any shares in Cable and Wireless, Limited, accepted by the Treasury under such arrangements;

  (b) the waiver by the Postmaster-General of a claim against Cable and Wireless, Limited, in respect of a right conceded to that company to operate a wireless telegraph service with Kenya;

  (c) the payment out of the Consolidated Fund of such sums as may become payable there from under Section thirty-nine of the Finance Act, 1933, into the Post Office Fund by reason of the inclusion for the purpose of the statement required to be made under Section thirty-eight of the Finance Act, 1933, in the revenue of the Post Office of a sum calculated at the rate of one hundred and fifty thousand pounds per annum.''—(King's Recommendation signified).—[Lord Stanley.]

  The Committee divided: Ayes, 183; Noes, 109.

  Division No. 224.]

  AYES.

  [7.24 p.m.

  Acland-Troyte, Lt.-Col. G. J.

  Broadbridge, Sir G. T.

  Cooke, J. D. (Hammersmith, S.)

  Adams, S. V. T. (Leeds, W.)

  Brown, Col. D. C. (Hexham)

  Cooper, Rt. Hn. T. M. (E'nburgh, W.)

  Agnew, Lieut.-Comdr. P. G.

  Brown, Brig.-Gen. H. C. (Newbury)

  Courtauld, Major J. S.

  Amery, Rt. Hon. L. C. M. S.

  Bull, B. B.

  Cox, H. B. Trevor

  Anderson, Rt. Hn. Sir J. (So'h Univ's)

  Butcher, H. W.

  Cranborne, Viscount

  Aske, Sir R. W.

  Campbell, Sir E. T.

  Crooks, Sir J. S.

  Astor, Major Hon. J. J. (Dover)

  Cartland, J. R. H.

  Crookshank, Capt. H. F. C.

  Astor, Viscountess (Plymouth, Sutton)

  Carver, Major W. H.

  Croom-Johnson, R. P.

  Barrie, Sir C. C.

  Cayzer, Sir C. W. (City of Chester)

  Cross, R. H.

  Beechman, N. A.

  Channon, H.

  Crossley, A. C.

  Belt, Sir A. L.

  Chapman, A. (Rutherglen)

  Crowder, J. F. E.

  Bernays, R. H.

  Chapman, Sir S. (Edinburgh, S.)

  Culverwell, C. T.

  Bossom, A. C.

  Christie, J. A.

  Davidson, Viscountess

  Boyce, H. Leslie

  Clarke, Frank (Dartford)

  Davies, C. (Montgomery)

  Bracken, B.

  Colville, Rt. Hon. John

  Davies, Major Sir G. F. (Yeovil)

  Briscoe, Capt. R. G.

  Conant, Captain R. J. E.

  Denman, Hon. R. D.

  Denville, Alfred

  Law, R. K. (Hull, S.W.)

  Rowlands, G.

  Dixon, Capt. Rt. Hon. H.

  Leech, Sir J. W.

  Royds, Admiral Sir P. M. R.

  Doland, G. F.

  Leighton, Major B. E. P.

  Russell, R. J. (Eddisbury)

  Duckworth, W. R. (Moss Side)

  Lennox-Boyd, A. T. L.

  Salmon, Sir I.

  Edmondson, Major Sir J.

  Lipson, D. L.

  Salt, E. W.

  Elliot, Rt. Hon. W. E.

  Lloyd, G. W.

  Samuel, M. R. A.

  Emrys-Evans, P. V.

  Locker-Lampson, Comdr. O. S.

  Sandeman, Sir N. S.

  Entwistle, Sir C. F.

  Loftus, P. C.

  Sanderson, Sir F. B.

  Errington, E.

  Lyons, A. M.

  Sandys, E. D.

  Erskine-Hill, A. G.

  Macdonald, Capt. P. (Isle of Wight)

  Scott, Lord William

  Evans, Capt. A. (Cardiff, S.)

  McKie, J. H.

  Shepperson, Sir E. W.

  Fleming, E. L.

  Macquisten, F. A.

  Smith, Sir R. W. (Aberdeen)

  Fox, Sir G. W. G.

  Magnay, T.

  Somervell. Sir D. B. (Crewe)

  Fremantle, Sir F. E.

  Makins, Brig.-Gen. E.

  Somerville, A. A. (Windsor)

  Furness, S. N.

  Margesson, Capt. Rt. Hon. H. D. R.

  Stanley, Rt. Hon. Lord (Fylde)

  Fyfe, D. P. M.

  Markham, S. F.

  Stanley, Rt. Hon. Oliver (W'm'l'd)

  Gluckstein, L. H.

  Mason, Lt.-Col. Hon. G. K. M.

  Storey, S.

  Glyn, Major Sir R. G. C.

  Mayhew, Lt.-Col. J.

  Stourton, Major Hon. J. J.

  Goldie, N. B.

  Mills, Sir F. (Leyton, E.)

  Strauss, E. A. (Southwark, N.)

  Gower, Sir R. V.

  Mills, Major J. D. (New Forest)

  Strauss, H. G. (Norwich)

  Graham, Captain A. C. (Wirral)

  Moore, Lieut.-Col. Sir T. C. R.

  Stuart, Hon. J. (Moray and Nairn)

  Grant-Ferris, R.

  Moreing, A. C.

  Sueter, Rear-Admiral Sir M. F.

  Gridley, Sir A. B.

  Morgan, R. H.

  Tasker, Sir R. I.

  Grimston, R. V.

  Morris-Jones, Sir Henry

  Tate, Mavis C.

  Guest, Lieut.-Colonel H. (Drake)

  Morrison, G. A. (Scottish Univ's.)

  Tufnell, Lieut.-Commander R. L.

  Hambro, A. V.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Wakefield, W. W.

  Hannah, I. C.

  Muirhead, Lt.-Col. A. J.

  Walker-Smith, Sir J.

  Hannon, Sir P. J. H.

  Munro, P.

  Wallace, Capt. Rt. Hon. Euan

  Harbord, A.

  O'Connor, Sir Terence J.

  Ward, Lieut.-Col. Sir A. L. (Hull)

  Haslam, Sir J. (Bolton)

  O'Neill, Rt. Hon. Sir Hugh

  Ward, Irene M. B. (Wallsend)

  Heilgers, Captain F. F. A.

  Perkins, W. R. D.

  Wardlaw-Milne, Sir J. S.

  Holy-Hutchinson, M. R.

  Petherick, M.

  Watt, Major G. S. Harvie

  Heneage, Lieut.-Colonel A. P.

  Plokthorn, K. W. M.

  Wayland, Sir W. A

  Hepburn, P. G. T. Buchan-

  Pilkington, R.

  Wedderburn, H. J. S.

  Hope, Captain Hon. A. O. J.

  Ponsonby, Col. C. E.

  Wells, S. R.

  Hopkinson, A.

  Procter, Major H. A.

  Whitsley, Major J. P. (Buckingham)

  Hudson, Capt. A. U. M. (Hack., N.)

  Ramsay, Captain A. H. M.

  Wickham, Lt.-Col. E. T. R.

  Hume, Sir G. H.

  Ramsbotham, H.

  Wilson, Lt.-Col. Sir A. T. (Hitchin)

  Hutchinson, G. C.

  Rathbone, J. R. (Bodmin)

  Winterton, Rt. Hon. Earl

  Inskip, Rt. Hon. Sir T. W. H.

  Reed, A. C. (Exeter)

  Withers, Sir J. J.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Reed, Sir H. S. (Aylesbury)

  Womersley, Sir W. J.

  Keeling, E. H.

  Reid, W. Allan (Derby)

  Wright, Wing-Commander J. A. C.

  Kerr, Colonel C. I. (Montrose)

  Remer, J. R.

  Young, A. S. L. (Partick)

  Kerr, J. Graham (Scottish Univs.)

  Rickards, G. W. (Skipton)

  Latham, Sir P.

  Ropner, Colonel L.

  TELLERS FOR THE AYES.—

  Law, Sir A. J. (High Peak)

  Ross Taylor, W. (Woodbridge)

  Captain Dugdale and Major Herbert.

  NOES.

  Adams, D. (Consett)

  Hall, G. H. (Aberdare)

  Muff, G.

  Adams, D. M. (Poplar, S.)

  Hardie, Agnes

  Nathan, Colonel H. L.

  Adamson, W. M.

  Harris, Sir P. A.

  Noel-Baker, P. J

  Ammon, C. G.

  Harvey, T. E. (Eng. Univ's.)

  Oliver, G. H.

  Barnes, A. J.

  Hayday, A.

  Paling, W.

  Bellenger, F, J.

  Henderson, A. (Kingswinford)

  Parker, J.

  Benn, Rt. Hon. W. W.

  Henderson, T. (Tradeston)

  Pearson, A.

  Benson, G.

  Hills, A. (Pontefract)

  Pethick-Lawrence, Rt. Hon. F. W.

  Bevan, A.

  Hopkin, D.

  Price, M. P.

  Broad, F. A.

  John, W.

  Quibell, D. J. K.

  Bromfield, W.

  Jones, Sir H. Haydn (Merioneth)

  Ridley, G.

  Brown, C. (Mansfield)

  Jones, Morgan (Caerphilly)

  Ritson, J.

  Burke, W. A.

  Kelly, W. T.

  Robinson, W. A. (St. Helens)

  Cape, T.

  Kennedy, Rt. Hon. T.

  Salter, Dr. A. (Bermondsey)

  Cluse, W. S.

  Kirby, B. V.

  Seely, Sir H. M.

  Clynes, Rt. Hon. J. R

  Lansbury, Rt. Hon. G.

  Sexton, T. M.

  Cove, W. G.

  Lathan, G

  Shinwell, E.

  Cripps, Hon. Sir Stafford

  Lawson, J. J.

  Silkin, L.

  Daggar, G.

  Leach, W.

  Simpson, F. B.

  Davidson, J. J. (Maryhill)

  Leslie, J. R.

  Smith, Ben (Rotherhithe)

  Davies, R. J. (Westhoughton)

  Logan, D. G.

  Smith, E. (Stoke)

  Davies, S. O. (Merthyr)

  Macdonald, G. (Ince)

  Smith, Rt. Hon. H. B. Lees- (K'ly)

  Dobbie, W.

  McEntee, V. La T.

  Smith, T. (Normanton)

  Dunn, E. (Rother Valley)

  McGhee, H. G.

  Stephen, C.

  Ede, J. C.

  McGovern, J.

  Stewart, W. J. (H'ght'n-le-Sp'ng)

  Edwards, A. (Middlesbrough E.)

  MacLaren, A.

  Strauss, G. R. (Lambeth, N.)

  Edwards, Sir C. (Bedwellty)

  Maclean, N.

  Summerskill, Edith

  Foet, D. M.

  Marshall, F.

  Taylor, R. J. (Morpeth)

  Frankel, D.

  Mathers, G.

  Thorne, W.

  Gardner, B. W.

  Maxton, J.

  Thurtle, E.

  Greenwood, Rt. Hon. A.

  Messer, F.

  Tinker, J. J.

  Griffith, F. Kingsley (M'ddl'sbro, W.)

  Milner, Major J.

  Viant, S. P.

  Griffiths, G. A. (Hemsworth)

  Morrison, Rt. Hon. H. (Hackney, S.)

  Watkins, F. C.

  Guest, Dr. L. H. (Islington, N.)

  Morrison, R. C. (Tottenham, N.)

  Watson, W. McL.

  1730

  1731

  White, H. Graham

  Williams, T. (Don Valley)

  Young, Sir R. (Newton)

  Wilkinson, Ellen

  Wilson, C.H. (Attercliffe)

  Williams, E. J. (Ogmore)

  Windsor, W. (Hull, C.)

  TELLERS FOR THE NOES.—

  Mr. Whiteley and Mr. Groves.

  Question put, and agreed to.

  Resolution to be reported To-morrow.

  MENTAL DEFICIENCY BILL.
  Order for Second Reading read.
  7.33 P.m.
  The Minister of Health (Mr. Elliot): I beg to move, "That the Bill be now read a Second time."
  The necessity for this Bill arises out of a decision of the Court of Appeal. The Court in fact, in giving the decision, recognised that legislation would probably be the consequence. The case turns upon a very narrow point, namely, the interpretation of Section 11 of the Mental Deficiency Act, 1913. The Act says that an order shall expire at the end of one year from its date, unless continued under certain procedure, and the Board of Control took the view that they had a certain right to regulate their procedure. Before the Board of Control can continue an order they have to investigate the documents concerned, and the Board of Control, acting on legal advice, have proceeded for many years on the view in general that, provided that the consideration of the special reports and certificates had been concluded by the Board, and that they had satisfied themselves in due time that the continuation of the order was required the final sealing and issuing of the order might be done administratively with such reasonable delay as was unavoidable. That view was upheld by a Divisional Court of the High Court, including the Lord Chief Justice, Mr. Justice Humphreys, and Mr. Justice du Parcq, but that decision was reversed by the Court of Appeal.
  Now Parliament must consider the position. The Government, having considered it, have come to the conclusion, set out in the Bill, that the reasonable latitude of one month should be allowed. The Bill also validates orders which have been invalidated by the previous assumption. I hope the House will agree that it is an advantage to the persons concerned, because it allows time for due consideration of the report and for making up the Board's mind, which otherwise would have to be compressed within a very narrow margin of time with
  1732
  the risk that it might be overstepped. That is briefly the case for the Bill. The Attorney-General will deal with any legal point which might arise, in view of the division of legal opinion on this matter, but I think the non-technical case is fairly clear, and it is as I have stated it.
  7.36 p.m.
  Mr. Rhys Davies: Every Minister of this Government seems much more at home in dealing with mental deficiency than with any other problem; it was quite becoming, therefore, of the right hon. Gentleman the Minister of Health to introduce this Bill. He has given us very little information about the Bill, and I propose to extract from the Attorney-General some more details. What surprises me about the Bill—and I am sure that every Member of the House will be as surprised as I 'am—is that legal advisers should have quarreled as to the interpretation of the Mental Deficiency Act, 1913. I should have thought the legal advisers of the Board of Control would indeed be persons who could give the very best interpretation on this issue, and I want to know whether the learned Attorney-General was himself one of those advisers to the Board that led them into this trouble. Let me now come to some detailed points about this very small Measure, and perhaps it will comfort the right hon. Gentleman if I say right away that we do not intend to oppose the Bill. This gives an opportunity, within a limited space, of saying a word or two upon the work of the Board of Control itself; and I think the House will agree with me when I say that they have indeed a very difficult and onerous task to perform. Incidentally the number of mental defectives seem to grow just in proportion to the period of office of the present Government; and if they go on very much longer, there will soon be more people inside institutions than outside.
  I understand quite clearly, although I know very little about law, that the intention in Sub-section (1) is to provide an additional one month to the present 12 months in which visitation and certification can take place; but I have wondered since I read the Bill how it came about that the Board of Control and its staff could not do all this work

  1733
  within the 12 months as the law provides. What virtue is there in adding four more weeks? There is no balancing of accounts here; you need not prepare a balance-sheet and submit it to a delegate meeting or to shareholders, and it seems to me that all that the Board of Control need do is to request the staff to commence on this work four weeks before the statutory period ends, and then the job ought to be done within that period. But the whole administration of public affairs in this country seems to have gone to rack and ruin since the present Government came into power.
  If the Attorney-General will turn to Sub-section (2) of Clause 1, I think he will find that that carries us very much further than giving an extension of one month to the 12 months provided by Section 11 of the Act of 1913, and some of us are apprehensive that it will do more even than indemnify the Board of Control against the errors that they have cornmitted, probably in good faith. We would like to know whether Sub-section (2) does not in fact increase the power of the Board of Control to detain persons in institutions which they do not possess at the present moment. If that is so, while we do not intend to oppose the Bill, I think we shall be entitled, unless we get a proper understanding on this point, to table some Amendment to this Measure.
  As we are dealing with mental deficiency, I think it is proper to ask this question: Are we right in the assumption, looking at the increased figures of mental defectives in this country, that the increase is natural, or does the increase come about by a closer diagnosis and ascertainment of cases? The figures really are appalling; I never thought they were as bad. I find that the number of mental defectives under care at the end of 1936 was 82,726 and that there was an increase of 3,985 under care in 1936 over 1935. Not all these cases, of course, will be affected by this Bill, but I suppose that a goodly number of them will be. I have been rather alarmed too at the total figures, not only of those who are detained in institutions, but I find that the total number of imbeciles, idiots, and mental defectives, apart altogether from lunatics, in this country is over 120,000, giving us 2.88 per thousand of the total population. That is rather a heavy toll, and I wonder whether the right hon. Gen-
  1734
  tleman will be able to tell us something about this matter, if not to-day, when we come to the Vote for his own Department.
  For the moment, as I say, we do not intend to oppose this Measure. We think it is necessary, except that we criticise two points in it. First, how comes it about that it is necessary to have four weeks in addition to the 12 months, when, in our view, with better administration the whole of the work could be done before the year ends? We cannot see how that difficulty has arisen at all. The second point is as to whether the particular individual, the imbecile in this case, is in any way adversely affected by Sub-section (2) of Clause 1. That is all that I need say at present.
  7.43 P.m.
  Mr. Moreing: I do not know how far it would be in order to make some observations as to the reason for the increase in the numbers of mental defectives.
  Mr. Speaker: Only in passing. It would hardly be in order to discuss it in detail.
  Mr. Moreing: The point that I wanted to put was this: The hon. Member for Westhoughton (Mr. Rhys Davies) asked whether the increase in numbers was due to some extent to improved classification and diagnosis. There is this difficulty in connection with mental deficiency, which I came across when I was chairman of a mental hospital under the London County Council, that there is a tendency now with juvenile delinquents to take the view that the individual's erring from the strict path of rectitude is due to mental deficiency, and he is treated under the Mental Deficiency Act instead of being handed over to the jurisdiction of magistrates. That is having an increasing effect on the number of people being certified for treatment under the Act. I would like to suggest that the matter should be looked into very carefully, and perhaps the Government will consider it in connection with the proposed Penal Reform Bill, to see how far these matters should be taken into general consideration in dealing with abnormal behaviour.
  7.45 P.m.
  Mr. Logan: I am not able to understand the reason for this extension of the period, because one imagines that the Board of Control would be able to know

  1735
  of a person's mental condition stage by stage during the period of detention. The people concerned are not imbeciles or lunatics. They are as a rule people who have been committed under the order of a court and detained, supposedly for the benefit of their health. I have seen some of these cases lately, and in the majority of them the Board of Control is doing a wonderful work, but I am doubtful, taking it all round, whether the board really do exercise that supervision which is essential for the welfare of the individual placed within their care. The right of the individual to liberty is something about which we must be very careful, and I am convinced that any further extension of the period would be an abuse rather than an advantage from the point of view of proper surveillance. Very often these cases arise because they are a little defective; magistrates do not like to send them to gaol and they are committed instead to an institution.
  I have often brought cases to the notice of the authorities, and no matter what the report about the individual may be, I am always told that he cannot be released until the end of the 12 months. Detention for that period seems to be the invariable custom and we are told that he is detained because of his home environment. I do not attach any importance to that reason because you would have to make accommodation for go per cent. of the people in my division if they had to be taken out of their environment. I do not think the Board of Control should have any extension of the period and I do not agree with my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) when he says that we have no objection to this Bill. I had a case a few months ago of a young man with a good record and character. He was found guilty of getting over a wall. He went over to get a football and picked up a ledger from a heap of refuse. He was brought before the bench and was considered to be weak in mind. He was sent away to a mental home. The magistrate in that case was almost a mental case himself, but he unfortunately had the power to send this young man away. He was detained for 12 months although many attempts were made during that period to get him out.
  At the expiration of 12 months he was allowed out under the Board of Control
  1736
  on condition that he reported periodically to them. The process of reporting consisted of someone visiting his home and seeing whether he was there and whether everything was all right. This young man got married after he had been away from the mental home 12 years and now has a child. He had spent four years in the Territorials. He became tired of notifying and did not want his wife to know he had been in a mental hospital, so he refused to report and went away from his address. When he was found he was locked up and taken back to the mental home in which he had been detained 13 years previously. Who certifies on such a case as that, and what method of inspection has the Board of Control to ascertain whether the person is mental? If anyone wants control it is the Board of Control itself in its inefficiency and in its loose method of dealing with the life and liberty of the subject. I remember on the Regency Bill hon. Gentlemen below the Gangway raised the question of who would have to decide whether the King was right or wrong.
  Mr. Speaker: That would not be in order as an analogy.
  Mr. Logan: I am pointing out that the extension of time does not appear to me to be requisite. The Government, I understand, want to protect themselves against being sued in the court for compensation for illegal detention. The Bill will enable a person to be detained for a month over the period for which he can be detained under the present law in order, it is said, that the fullest investigation can be made. If a person has been under observation for 12 months because he is a little weak in character—and there are very few in our great cities to-day who are strong in character—and has to be detained another month, the system of observation must be very loose. I should be mentally unfit to be a Member of this House if I were a party to accepting a Bill which gives power to incarcerate a person wrongly for a further period over the 12 months.
  What guarantee have we that the Board of Control will tighten up their system of observation and surveillance if the period is extended to 13 months? Orders are made now, I believe, year by year. At the end of the 12 months another month is now to be added so that

  1737
  the papers can be put in order. I would like to know why it is not possible, with the day to day observation of the medical men, to certify as to the state of the detained person by the end of the 12 months. It may be that there are cases at the present moment that are not valid under the law in which compensation should be paid because there have been irregularities in the system. Will the extension of a month enable that difficulty to be got over? I believe that under proper supervision no one does greater work than the doctors, and those who are in our institutions deserve thanks for what they do. The individual who is taken into a mental institution should stage by stage have his condition certified and at the end of the 12 months it should be possible to know exactly what his condition is. Twelve months is long enough to detain anybody without certification.
  7.56 p.m.
  Sir Francis Fremantle: I want to endorse the plea made by the Opposition that we should have a little clearer explanation of the necessity for this extra month. I would say to the hon. Member for the Scotland Division of Liverpool (Mr. Logan), who, we know, takes such a great interest in this matter, that as regards patients being sent to an institution always for a year, there is a definite provision that the Board of Control may direct the order to expire on the quarter day next after the admission. If the board are carefully watching, as I believe they do, over these cases, they have the power, although they may not always find it advisable to use it, to limit detention to three months. Again, with regard to discharge, every provision is made by which patients should be detained only after the 12 months when there is a medical certificate by two practitioners, including one who at the request of the defective or his parent or guardian, or any relative or friend, has made a medical examination, and considers that it is in the interests of the patient that the order shall be made. Therefore, it is not a case of wrongful detention under the present law as long as the Board of Control are doing their job. The board do their work as well as any institution does.
  Mr. Logan: In the case I mentioned two medical men have certified that the man was not insane, yet the board refused
  1738
  to let him out in spite of repeated applications.
  Sir F. Fremantle: Even the Board of Control are human and make errors, and if this is an isolated case I trust that it is being properly inquired into. None of us would suggest that the Board of Control may not occasionally make a mistake. Of one thing I am clear, and that is that this Bill is an administrative requirement. We are dealing with a large number of institutions and this arrangement has naturally got into a groove. That groove is governed by the 12-months period, as so many things in life are, and these matters come naturally up for review at the end of 12 months. I take it that what has happened has been that occasionally the review of a case—I do not mean the supervision or superintendence, but the review of the case as a whole—has slipped past the 12 months by a day or two, and I can well understand that with the racketing nature of the duties in these mental deficiency homes.
  Mr. Kelly: Does the hon. Member suggest that a patient entering a mental defective colony is not allowed to be released under a term of 12 months?
  Sir F. Fremantle: No, I have already explained what the position is; but, as I was saying, I think it is quite natural that the administration may from time to time overslip the mark at the end of the 12 months, and in such cases it is advisable to allow the further month. I do not think the hon. Member for the Scotland Division is fair in suggesting that it is an extra month's imprisonment. It is not an extra month for the patient. This will not interfere in any way with the patient's release.
  Mr. Stephen: Supposing this extension of a month is granted and then the racket is such that they overrun the month. Will the Government then come forward with another Bill to give them another four weeks?
  Sir F. Fremantle: I think all this shows that we need an explanation from the Attorney-General. I am giving only the very superficial view that I have of this Bill. I should be loth to agree to this extra period unless a very clear case were made out for it, but I was pointing out how, from the administrative point of

  1739
  view, and while wishing to do the very best for a patient, it may be necessary to allow this extra month. Still we do want to have it clearly understood that it will not affect the patients concerned.
  Mr. Maxton: Will the hon. Gentleman tell me how it will not affect the patients concerned? Whom else will it affect except the patients?
  Sir F. Fremantle: This extension is asked for simply in order that the report may be sent in, but I take it that it does not deal immediately with the patient. It is a difficulty of administration. We are asked to give that extra time in order to give an opportunity for the board to decide. I quite agree with the point which has been made, but I do not think it is right that I should try to make the position clear before the Attorney-General has spoken.
  8.4 p.m
  Mr. Ede: It was explained to the House by the Minister of Health that this Bill is necessary because the Board of Control have assumed that if they reached their decision before the end of the period for which the existing certificate held good it did not matter whether they announced their decision before or after the expiration of that period. It appeared that in some case where the actual decision was not announced until after the 12 months and the defective had a sufficient sum of money to be able to go to the courts, the Lord Chief Justice and two other judges held that the Board of Control was right but the Court of Appeal decided that the Board was wrong. It was laid down that the decision should be announced before the end of the first period, or of the running period, and a new certificate issued for a further period of detention. I understand that is the position on which the Bill is founded—that the Board of Control had either been wrongly advised by their legal advisers or, perhaps, having been rightly advised, had declined to take the advice.
  I welcome the fact that it is being made clear that even the Board of Control is subject to the law of the land. As an administrator who has had to appear before the Board of Control, or its officers—not for certification, I hasten to add, but in regard to administrative matters—I think it is as well that it should
  1740
  be occasionally brought home to this most autocratic Department that it has no powers other than those which have been given to them by this House. If this case does nothing else, I hope it will bring that position home. I share with my hon. Friend the Member for the Scotland Division (Mr. Logan) a disinclination to extend the period by a month, because it is a serious thing to impinge further upon the liberty of the subject unless a very good case is made out. I have no great respect for medical certificates. I recollect the Bill of 1913 coming before the House and the action then taken by my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), who was a nominal supporter of the Government then in office. I have been in this House since when he has been supposed to be a supporter of the Government in office, and I recollect a Minister of the Crown saying to me, when he had announced his intention of carrying on a little private opposition: "He is a host in himself." He pointed out on the Second Reading of the Bill of 1913 that under the definition of "mental defective" given in that Bill there was no Member of the House—the House as it was then constituted—who had not at some time or other been a mental defective within that definition. Anybody who had generously given half a crown to a bad cause could have been held to be a mental defective.
  Sir F. Fremantle: Not with a medical certificate.
  Mr. Ede: I do not trust doctors at all. I trust the hon. Member except when he is acting as a doctor, and then I lose faith in him. The point I want to make is that this definition of a mental defective is wide, and that local authorities and others have of late years tried to persuade people to go into mental institutions on the plea that it will be for only a limited period and that a short stay will probably prove completely effective. That being the position it is very undesirable that anything should be done which may make the period of detention any longer. Much has been said about administration, but I cannot help thinking that all that is necessary is that the assembly of the papers should start a month or a fortnight earlier than now. If that were done the second certificate could be ready by the end of the period for

  1741
  which the first certificate exists. If it is alleged—though it has not been alleged—that there is an accumulation of arrears, adding a month will prove to be only a temporary cure, because then the arrears will begin to accumulate again, and the extra month will not be effective. But that was not stated by the Minister, and I gather that it is not the case.
  In view of the importance of preserving the liberty of the subject, and making quite sure that these certificates do not run beyond the period for which they are granted, surely it would be better for steps to be taken inside the Board of Control to collect the papers earlier, so that the decision may be announced within the period for which the certificate runs, rather than have an extension of the period. I regret that my hon. Friend the Member for Westhoughton (Mr. R. Davies) did not withhold his blessing of the Bill until we had received some assurance on this point. Without wishing to impede the work of the Board of Control I can only say that it ought to make out a very much stronger case for the Bill than it has yet done.
  8.12 p.m.
  Mr. Dingle Foot: It is easy to understand the reasons for Sub-section (2) of Clause 1 of this Bill, and we can understand the great difficulties in which the Board of Control must have been placed by the recent decision of the Court of Appeal, but like the hon. Member for South Shields (Mr. Ede), I find a little difficulty in understanding the need for Sub-section (1). The Board of Control have acted in perfect good faith on the advice received, but it has been discovered that their action has not been in accordance with the law, and it is therefore proposed to alter the law I should have thought it would have been a much simpler matter to alter the administration of the Board of Control. I did not think the right hon. Gentleman who moved the Second Reading of the Bill really gave us any reason why there should be any greater virtue in the thirteenth month than there is now in the twelfth month, and that is the point we have to consider on Second Reading. Why are we troubled with Sub-section (1) at all? Why should not the Board of Control conform to what has now been discovered to be the law, and alter their practice, so that the continuation orders
  1742
  shall be made within the statutory time laid down in the Act of 1913?
  8.13 p.m.
  The Attorney-General (Sir Donald Somervell): Before I come to the main point which is exercising hon. Members I should like to say a word with regard to certain criticisms which have been directed against the Board of Control. From this point of view let us also accept whatever blame is due to us as legislators —on behalf not of ourselves but of our predecessors, because our predecessors in the legislation which they passed obviously were not completely clear. They imposed upon the Board of Control instructions which the board thought were to be interpreted in one way, whereas the Court of Appeal said—quite rightly—that that was not the correct interpretation of the Statute, and that what had been done was not in accordance with the law. In considering the apportioning of blame I think that as a Legislature we might take a. little of it to ourselves, in view of the fact that our predecessors were not clear in the instructions they gave to the board. An hon. Member asks me whether I was one of the legal advisers. I believe it would be contrary to all precedent for me to answer that question, but perhaps it might be relevant to say that I fancy that this advice was given many years ago.
  The main point is the question of Clause 1 and the extension of one month. Hon. Gentlemen in all quarters of the House will be aware that under the scheme of the Mental Deficiency Act there has to be a review by the Board of Control at the end of the first year, another at the end of the second year, and reviews thereafter at intervals of five years, among other safeguards. I leave aside to deal with separately the question of discharge. One of the factors which Parliament had in mind when it originally laid down the review at the end of the year was that it is important that the case should not be considered too soon. Unfortunately in a great many of these cases there is no possibility of recovery but the cases about which we are exercised are those in which there is a possibility of recovery. If you start your reports at the end of nine months or io months you have a month less for the possibility of recovery or improvement than if you did so after 10 months or 11 months. When the matter

  1743
  came to be considered it was thought on the whole better in the interests of the patients to extend the time which at present exists between the original adjudication and the order than to shorten the time for the medical officers' reports required for the annual review. If you put the date back, the medical officer will have to submit the report roughly a month sooner. That was the motive for providing for the extension of a month.
  Under the present scheme the board will have a certain latitude for the exceptional cases and for final making of orders. The reports of the medical officers come in, so that in normal cases the whole thing can be disposed of before the end of the quarter day. There is no intention of postponing that procedure. The medical reports will come in after the Bill is passed on exactly the same dates as at present. The general instruction as to when they should come in will hold good and in the vast majority of cases they can be considered before the quarter day. Those cases in which release can be advised, will be seen to and considered immediately. There is no reason why a patient who should be released on his reports will not be released as soon after this Bill is passed as he would be now. You may get a case where, on the original report, you would want to refer back for some further report or because of administrative difficulties the orders could not be got out before the quarter day. In such cases it is important to have the extra month that has been provided. If you get a case in which the Board of Control think that further inquiries should be made, the Bill gives time to consider all possible questions that might arise. It is therefore better to leave the present procedure as it is so that the time between the date of the report and the quarter day should be as short as possible. It is better to give the extra month, which the board have no intention of using for delay, in order to enable the board to deal with exceptional cases and give them time for the necessary administrative procedure.
  Mr. Logan: Cannot all the precautions that you have taken with regard to extension be brought into operation within the 12 months, under an efficient system?
  The Attorney-General: Yes, but only by putting back the date at which you tell your medical officers and others to
  1744
  send in their reports. My right hon. Friend thinks that it is fairer not to push that date back but to leave the full 11 months for the reports particularly where there is a possibility of recovery. The reports will come in on exactly the same date as they do now. There is no reason to apprehend that there will be any delay, but it will enable the machinery to work.
  Dr. Haden Guest: If this procedure is required for the exceptional cases only, as the Attorney-General has just said, should that not be stated in the Bill?
  The Attorney-General: I do not think it will operate only in the exceptional cases and I am not saying so. My right hon. Friend made that clear. The interpretation put on the Statute allowed a latitude after the quarter day for the administrative business of getting out the orders. There is no intention of delaying the consideration of the reports on the patients. Hon. Gentlemen have not perhaps considered the importance to the patient of having a report at the latest possible date, particularly in the case of persons likely to recover.
  I would say a word or two in answer to the hon. Member for the Scotland division (Mr. Logan), whose interest in this matter is well-known and appreciated. He raised the case of the power of discharge at an intermediate date. The board have full power to discharge at any intermediate date. Clause 25 (2) of the Bill says:
  " Any Commissioner shall have power to discharge at any time any person detained in a certified institution or a certified house or under guardianship under this Act."
  There is the further safeguard in addition to the annual and quinquennial reviews, that every case is reviewed by the visiting justices at the age of 21. The Board of Control have very difficult duties to perform. In the number of cases where there is a possibility of recovery and the medical officer or visitor visiting under the local authority so advises, there is no reason to believe that that position will not be considered and acted on as promptly after this Bill as before. There are figures showing that cases are very carefully reviewed; in some cases the person is released from the institution on licence. In cases where persons on licence are found to be creating difficulties they have had to be taken back.

  1745
  Other persons are found to be able to take their place in the life of the community and are discharged. I hope I may have satisfied hon. Members in all parts of the House as to the reasons which led my right hon. Friend to take this course, and as to the obvious importance of seeing that these reports come in for consideration as late as possible before the date when the matter has to be considered.
  Sir Robert Tasker: Would it not be better, in the interests of the patient and of the general public, that the Board of Control should be advised by a medical officer, instead of by someone who knows nothing about mental cases?
  The Attorney-General: They are.
  Sir R. Tasker: The Board of Control at the present moment are not advised by a medical officer.
  The Attorney-General: The point we are discussing is the review by the board which has to be made at the end of the first year, at the end of the second year, and quinquennially, in the light of the special reports and certificates which come from the medical officers. The matter is under review all the time by the medical officers, and it is with their reports that the board has to deal.
  Sir R. Tasker: May I send my hon. and learned Friend a case?
  The Attorney-General: Yes, I shall be glad to consider it; but at every step the Board of Control acts on medical advice.
  8.29 p.m.
  Mr. Ritson: I can answer the question of the hon. Member for Holborn (Sir R. Tasker). The Board of Control are all doctors, and that is the trouble.
  Sir R. Tasker: I was talking about the men who report to the Board of Control, not about the Board of Control itself.
  Sir F. Fremantle: I must ask the hon. Member for Durham (Mr. Ritson) to withdraw what he has just said, because the Act requires that four members of the board shall be legal commissioners.
  Mr. Ritson: The weight of intelligence of the doctors is so great that I did not notice the other poor fellows. I withdraw that statement.
  1746
  I wish that the provision as to the period of 12 months could be deleted. We have no end of trouble owing to that period of 12 months, because the parents of a mentally defective child of very low grade come to the conclusion that in any case the child is only to be in the institution for 12 months. During that period it may appear that there is no possibility of the child getting better again, but nevertheless the parents are under the impression that he will be cured at the end of 12 months. With reference to the sad case which has been mentioned by my hon. Friend, I cannot understand any magistrate being content to send anyone away without consultation with at least two medical men. When I am on the bench, I always object to anyone being sent away subject to the review of the prison doctor, because I feel that the best man to deal with mental cases is a mental specialist.
  However clearly the Attorney-General may deal with the legal side of this matter, it has a practical side. As my hon. Friend the Member for South Shields (Mr. Ede) knows, I am on the great board which covers South Shields, North Shields, Sunderland, West Hartlepool, Darlington and Middlesbrough, and on that board we have had great trouble because of the necessity for waiting until the period of 12 months has elapsed. I do not know of any medical superintendent who would wish to keep a mental defective for six months longer than is necessary. The object of all medical superintendents is to show is high a recovery rate as possible, and, indeed, they sometimes go to dangerous lengths in order to get a recovery rate which is not actual, by sending people out before the proper time. I am particularly anxious in regard to the children who come before the bench in sex cases. The parents naturally say that their child is not as bad as is stated, but sometimes, on the basis of the medical evidence and of practical knowledge and experience, magistrates are compelled to find that the child is insane. This work is very harassing to the magistrates, but I think it is worth while. I wish, however, that, instead of 12-month provision, some other Clause could be drafted which would make it possible, under the orders of the Board of Control, for the patient to be discharged if the doctors decide that he is really mentally fit.
  Bill committed to a Committee of the Whole House for To-morrow.—[Major Harvie Watt.]

  SEA FISH INDUSTRY BILL.
  Order for Consideration of Lords Amendments read.
  Lords Amendments considered accordingly.

  SEA FISH INDUSTRY BILL.

    CLAUSE 2.—(White Fish Industry Joint Council.)
    Lords Amendment: In page 3, line 7, at the end, insert:
    " (b) a person shall not be taken to carry on the business of selling white fish by wholesale, or the business of a fishmonger, by reason only that he sells white fish preserved in any airtight container."
    8.36 p.m.
    The Minister of Agriculture (Mr. W. S. Morrison): I beg to move, "That this House doth agree with the Lords in the said Amendment."
    On the Report stage, my hon. Friend the Member for Blackpool (Mr. R. Robinson) asked whether, if a grocer sold a tin of sardines, that would make him a retailer of fish. I said that that was not the inteption, and the object of this Amendment is to make that point clear.

    CLAUSE 3.—(Registration of persons engaged in the white fish industry.)
    Lords Amendment: In page 5, line 3, at the end, insert:
    " and any person registered in the Commission's register as carrying on a designated business shall, whenever requested in writing by the Commission so to do, make to the Commission a written declaration stating whether or not he is carrying on that business as a nominee of another person, and, if so, specifying the name of that other person."
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    My hon. Friend the Member for North Aberdeen (Mr. Garro Jones), in the course of our Committee discussions, drew
    1748
    attention to the desirability of enabling the Commission, when compiling this register, to ascertain whether the person carrying on business was really the proprietor of the business or whether he was carrying it on for another person. I promised to consider the point, and this Amendment has been brought forward as a result.
    Subsequent Lords Amendment in page 5, line 17, agreed to.

    CLAUSE 4.—(Power of Commission to regulate marketing of white fish)
    Lords Amendment: In page 5, line 26, at the end, insert:
    " (b) for prohibiting, except in relation to white fish of such description or quality as may be so defined, the use, in any manner or circumstances specified in the regulations, of such designation, mark or other means as may be so prescribed for indicating that such fish are of that description or quality ".
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    This is to prevent good fish suffering from competition with inferior fish sold under a misleading description.
    Lords Amendment: In page 6, line 14, leave out from "may" to, "make", in line 15.
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    Under the Sub-section as originally drafted all regulations made by the Commission apply only in relation to premises used for fish markets. It became obvious that sales of fish on commission may be made outside registered premises,, and accordingly this Amendment was put down.
    Subsequent Lords Amendments to page 6, line 28, agreed to.
    Lords Amendment: In page 6, line 29, at the end, insert:
    "(c) for requiring that where, in the case of any white fish consigned for sale on commission, the salesman makes a charge by way of commission or otherwise, he shall enter in a book kept by him for the purpose the names of the owner or consignor of the fish and of every purchaser, and the price paid or agreed to be paid by each

    1749
    purchaser, and shall, as soon as practicable after the sale, send by post or deliver to the owner or consignor an account containing the following particulars:

    (i) the actual price paid or agreed to be paid for the fish and, where there is any variation in price, the number, weight or quantity sold, or agreed to be sold, at each price,

    (ii) the commission or other charge made by the salesman for selling the fish, together with details of any charges made for services in connection with the sale,

    (iii) the amounts, if any, paid or payable by the salesman on behalf of the owner or consignor in connection with the sale, with details thereof, and

    (iv) if any of the fish are bought by the salesman or by any person on his behalf, a statement that those fish have been so bought."

    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    In the course of the discussions on the Report stage, the hon. Member for North Aberdeen (Mr. Garro Jones) moved an Amendment which was designed to incorporate in the Bill the substance of other legislation laying an obligation on those who sell on commission to keep certain records and so on. I accepted the principle of the Amendment. This draft follows very closely the text of the legislation to which I have referred.
    8.41 P.m.
    Mr. Shinwell: The right hon. Gentleman has tried to meet the point put by my hon. Friend the Member for North Aberdeen (Mr. Garro Jones) and other of my hon. Friends on the Committee stage. This is a proposal which is designed to protect the consumer, and I think it goes a long way in that direction.
    Subsequent Lords Amendments to page 9, line 24, agreed to.

    CLAUSE 7.—(Constitution of boards to administer marketing schemes.)
    Lords Amendment: In page 9, line 28, leave out from "scheme" to the first "that" in line 29.
    8.43 p.m.
    The Under-Secretary of State for Scotland (Mr. Wedderburn): I beg to move, "That this House doth agree with the Lords in the said Amendment."
    This Amendment and the two following Amendments should be read together. It
    1750
    was found that the Bill as first drafted imposed on the Minister a continuing obligation from day to day to satisfy himself that the existing members of the Commission did not acquire such financial or commercial interests in the industry as might be likely to affect the proper discharge of their functions. It was considered sufficient that the Minister should so satisfy himself from time to time. Amendments were then inserted. The three Amendments here are designed to achieve the same object with regard to members of the marketing boards appointed by the Minister.
    Subsequent Lords Amendments, to page 9, line 32, agreed to.

    CLAUSE 9.—(Licensing provisions of producers' marketing schemes.)
    Lords Amendment: In page 13, line 25, after "scheme" insert "or."
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    8.44 P.m.
    Mr. Foot: The two Amendments which are on the Paper in regard to page 13 seem to go together. I want to object to the next Amendment. Will it be more convenient for me to do it on this or on the next Amendment? The next Amendment appears to follow from this one.
    Mr. Deputy-Speaker (Sir Dennis Herbert): Yes, I think that that will be the best way, if the Minister sees no objection.
    Mr. W. S. Morrison: The Amendment which we are now discussing is in line 25, after "scheme" to insert "or."
    If the Amendment is accepted by the House and agreed to, I think that the further Amendment will stand and enable a discussion to take place upon it in its proper place.
    Lords Amendment: In page 13, line 27, leave out from "licence" to the first "to," in line 30.
    8.46 p.m.
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."

    1751
    Clause 9 provides for regulation, by the producers' marketing board, by means of a system of licences, in relation to boats and landing of white fish in Great Britain. Under certain conditions these licences may be refused, and paragraph (ii) (d) of this Clause, which has now been amended, gives the right of appeal to the Commission to any person aggrieved by a decision of the board in respect of a licence. The words proposed to be left out have this further effect. They enable the right of appeal to be exercised, not only with regard to the refusing or revoking of a licence, but with regard to directions given by the board with reference to the day-to-day administration of the scheme. On consideration it appeared obvious that, if persons were recalcitrantly minded, they could, by issuing an appeal against every day-to-day determination of this character, hold up a scheme and bring it to nought. It is felt that, while it is desirable to retain to the full the right of appeal with regard to the matter of licences, it would be a useless practice to permit appeals upon these matters of day-to-day working, bearing in mind that everyone aggrieved by the working of the scheme still has the right of referring the matter to the Committee of Investigation. If the Amendment is accepted, it will make possible the smooth working of the scheme.
    8.47 P.m.
    Mr. Foot: I object very strongly to the Amendment which is now proposed. It may be within the recollection of the House that when the Bill came before us on the Report stage, we on this side of the House drew attention to this particular Clause and to the very limited rights of appeal which are contained in the words as they stand. It is not provided that there should be right of appeal against every decision of the Marketing Board but only such appeal as may be prescribed by the marketing scheme. It is proposed by the Lords Amendment to cut down the right of appeal from the decisions of the board still further. The right hon. Gentleman has suggested that, by leaving out these words, we are simply taking away the right of appeal against comparatively trivial directions of the board. We are cutting out the words:
    " or by any direction given by the board in exercise of powers conferred on it by virtue of paragraph (c) of the preceding Sub-section."
    1752
    Paragraph (c) of the preceding Subsection is on page 11 of the Bill and refers, among other things, to the power which is to be given to the board to give
    " directions for limiting the quantity of white fish (taken either in any waters whatever or in any particular waters) which may be landed from the boat in Great Britain or any part thereof."
    The board will have the power not only to refuse a licence to the fisherman but to prescribe how much fish he may land from his boat. There are two ways, therefore, in which it would be open for the board to put a fisherman out of business. In the first place, they can refuse him a licence, but, if they do not choose to do that, they have also the power to fix the quantity he can land from his boat at such a low figure that it would be impossible for him to carry on business. I do not say that that would be likely to happen, but that is the power we are proposing to entrust to fish marketing boards. It is obvious that the power to regulate the quantity to be landed from a boat is an exceedingly wide and important one. Supposing the board does this and puts this very strict limitation on the amount of business that a fisherman may do—for that is what it amounts to—it is provided by this Amendment that he is to have no right of appeal to the Commission at all, or to any independent body.
    The right hon. Gentleman said that he could invoke the Committee of Investigation, I presume, similar to committees of investigation under the Marketing Acts. That is a very cumbrous procedure, such as is applicable, I should have thought, in cases where there is some general grievance that the price of the commodity to the public is too high or something of that kind. It would be entirely unsuitable in cases where you simply get an individual grievance of a particular fisherman. We have conferred this power of limitation of output already in some of the Agricultural Marketing Acts, and this power which it is now proposed to confer on marketing boards under this Bill is a very considerable power to give to anybody. It limits the extent to which a man can carry on or can develop his own business, and if an unreasonable limitation is put on by the board—one can quite conceive that a number of fishermen might consider such limitations were unreasonable—surely, it is fair to ask that there should be some right of appeal.

    1753
    There appears to be no case for this Amendment at all.
    8.53 p.m.
    Sir Douglas Thomson: I should like to support what the hon. Gentleman the Member for Dundee (Mr. Foot) has said. It would be very much better to give the fisherman the right to appeal. If a number of frivolous appeals were made, the fact that one or other of them was refused would tend to discourage the making of frivolous appeals. If we give fishermen no power of appeal at all except to the Committee of Investigation, surely, that committee only reports to the Ministers if any provisional marketing scheme is contrary to the interests of consumers or to any persons affected by the scheme. It certainly would be contrary to the interests of consumers, and, if the Cornmittee of Investigation have to study all the detailed questions of individual fishermen, you will be no better off than if the Commission did this. How much further on are you by handing on these things to the Committee of Investigation, who are already making other investigations regarding the public interest, than if you left them to the Commission? Some right of appeal to the fisherman, who can have his livelihood taken away by any improper use of this power, should, without doubt, be given.
    8.54 P.m.
    Mr. Shinwell: I am in considerable sympathy with the views that have already been expressed, and I cannot understand why the Minister is so ready to accept the Amendment. The purpose of the Amendment is to ensure that the Commission will not be hampered in their operations—that was the reason given by the Minister—but if revocations or suspensions of licences are frequent, clearly there is some need for an appeal. On the other hand, if revocation or suspension of licences took place infrequently, it could hardly be claimed that the board would be hampered by an ordinary appeal. Therefore, I cannot understand why the right hon. Gentleman has come to this conclusion. It has occurred to me that, in the revocation of licences, where there is a loss of livelihood—and I take it that that is bound to occur— the question of compensation arises, and where there might be some difficulty of assessing or even obtaining compensation, surely, it is only right that the aggrieved person should
    1754
    have the right of appeal. It is of substantial importance to the person concerned.
    As regards the suggestion of the right hon. Gentleman that matters of this kind may be referred to the committee of investigation, I am bound to say that it had never occurred to me during the Committee stage—and this matter was under review for a length of time—that the committee of investigation was to be used for this purpose. I understood that the committee of investigation were primarily a consumers' concern and had nothing to do with the question of the revocation or suspension of licence. If that is not a sound argument to advance, I would submit this point to the right hon. Gentleman, that a committee of investigation, however influential it may be, is only an advisory body, and it may well be that the personnel of the committee is not qualified to come to a conclusion as to whether a licence should be revoked or suspended. The board is in a much more powerful position to judge than the committee of investigation can possibly be. Moreover, if the committee of investigation is to consider such an appeal it must, whatever its conclusion, refer the matter to the board, so that in the end the board have to consider the matter. It would surely be much better to allow the person aggrieved to go direct to the board, instead of proceeding in this roundabout fashion. Therefore, I am not convinced by the argument of the right hon. Gentleman, and as there seems to be no practical defence in favour of this Amendment, I hope the right hon. Gentleman will reconsider it.
    8.57 p.m.
    Sir A. Wilson: I had intended to make the point that has been made by the hon. Member for Seaham (Mr. Shinwell). The Committee of Investigation, as I read the Bill, has no power to allow an appeal to be made from such a decision. It is not an adjudicating body, and I hope my right hon. Friend will consider the question further. Every other marketing board with which I am acquainted has made provision for an appeal.
    8.58 p.m.
    Mr. Beechman: I should like to support what has been said by my hon. Friends opposite. The appeal which was given in the Bill as it stood seemed to me to have been of the greatest importance.

    1755
    My right hon. Friend has said that by taking away the right of appeal, in its context, we are only taking it away, if we do take it away, in regard to minor matters. There I must dissent. I think we are taking the right of -appeal away on matters of major importance. The question of revocation of licence may be a matter of life and death to the producer.
    Mr. W. S. Morrison: We are not taking away any appeal in respect of a decision to revoke a licence. It is only in respect of matters referred to in paragraph (c) of the preceding Sub-section that the right of appeal is taken away. The right of appeal against revocation of licence is maintained in its entirety.
    Mr. Beechman: If that be so—and I say with great respect that it is not at all clear—it takes away the appeal in regard to matters of consequence. We seemed to be making a step forward in having this right of appeal. My right hon. Friend has referred to the Committee of Investigation. I should like to endorse what has been said, namely, that that committee has only general powers, and I fail to see that it has any power to consider a particular instance. Under its general powers it can say whether a scheme is working properly, but it is not invested with the mandate to consider one particular instance. I hope, therefore, that my right hon. Friend will not insist on endorsing the view that has been taken in another place.
    9.1 p.m.
    Mr. Law: I have a good deal of sympathy with some of the arguments used against this Amendment. My right hon. Friend the Minister of Agriculture supports the Amendment by the argument that although it does remove the right of appeal it removes it only from an extremely limited field and that it is only on matters of more or less routine administration that the right of appeal will be taken away. I submit that paragraph (c) deals with highly important matters. As I understand it, the Board could, theoretically, institute a northern waters order for 12 months of the year, which would be much more vital than merely revoking a licence for one part of the year. That would affect not merely the trawler but every branch of the industry, and yet if this Amendment is to be accepted it
    1756
    appears that even action so drastic as that could be taken and there would be no right of appeal against it, except through the somewhat cumbrous method of the committee of investigation. I can see the point of my right hon. Friend that it is no use having a Board if it is to be hampered in its day to day routine, but it seems to me that the Amendment goes far deeper than that, and I should like him to think again before he accepts it.
    9.2 p.m.
    Mr. Ede: The Minister interrupted the hon. Member for St. Ives (Mr. Beechman) to say that there was no power to revoke a licence dealt with in paragraph (c). I would point out that in paragraph (c) there is reference to paragraph (c) of Subsection (1). That paragraph (c, iii) refers to any decision of the Board to
    " revoke, or suspend the operation, of a licence in relation to any boat in the event of a contravention," etc.
    9.3 P.m.
    Mr. W. S. Morrison: It is very important that the House should realise what the Amendment does, because some of the criticisms directed against it have proceeded on the assumption that it removes the right of appeal from a much wider category of matters than it really does. If we accept the Amendment the Sub-section will read as follows:
    " enabling any person aggrieved by any refusal of the board to grant, renew or transfer a licence under the scheme, by any decision of the board to revoke or suspend the operation of such a licence, to appeal to the Commission, and determining the powers exercisable by the Commission on any such appeal."
    Therefore, in all that very important category of matters affecting trawlers the right is by this Sub-section, even if we agree to the Amendment, absolutely retained. The only matters that are affected by the Amendment are those matters dealt with in paragraph (c) of the previous Sub-section. If the House will turn to that paragraph they will see why I described those matters as matters of day to day administration and of lesser importance, and I think they will agree that the description was accurate. In the first place the directions, against which it is proposed appeals should not be allowed, are referred to in paragraph (i); that is to say, directions with regard to equipment to be used on board ship.
    Mr. Shinwell: Is that a matter which could properly be referred to the Committee of Investigation?
    Mr. Morrison: Certainly. For example, regulations with regard to equipment can be referred to the Committee of Investigation and, if the Committee of Investigation thinks the complaint well-founded, the Minister has power to give directions to correct the matter at once. Hon. Members will find that in Clause 15. But the most important matter referred to here is in paragraph (c) (ii) where, set out in legal phraseology, is what is known as the trip allotment system. The whole desire of the producers of white fish in asking the House for these powers is that they feel that if they have power among themselves, by their own democratically elected body, to allot to each one of their members the amount of fish which can be caught and disposed of it would be to their advantage in preventing the wasteful destruction of fish or the disposal of it at uneconomically low prices. If you are to have the system of trip allotments, which the House has already accepted, how can you combine that system with appeals day by day from producers because they have pot been allowed to catch a greater amount of haddock? It would hold up the whole scheme, and the producers would not be able to regulate the catch to their own advantage.
    Mr. Foot: The paragraph does not refer to the allotment of one trip, but the board would have power to regulate the number of landings of white fish which might be effected by any boat during any specified period. It might determine the number of landings for a whole year. If you take an extreme case, one particular trawler might have only one landing during the 12 months, and under the Amendment there would be no right of appeal.
    Mr. Morrison: What the hon. Member is forgetting is that the Clause deals with the powers of a democratically elected board, the producers' marketing board, and any body which acted in that way would be acting quite contrary to our experience of democratically-elected bodies. In this House we have power to pass Acts of Parliament of the most injurious description, but we know what would be our fate if we were to indulge
    1758
    overlong in that practice. It would be quite impossible for these producers to regulate their day-to-day catch and so preserve the amount of supply reasonable for the people and remunerative to themselves. It is impossible to have day-to-day regulation of landings if every individual producer is to have the right to say that he ought to be able to catch more haddocks than his own board have allotted to him. In all questions of importance such as the revocation and suspension of a licence, matters which are vital, the right of producers to appeal to the Commission is maintained.
    Mr. Shinwell: I am trying my best to understand the right hon. Gentleman. May I put this question to him? He is proposing to strike out the words:
    " or by any direction given by the board in exercise of powers conferred on it by virtue of paragraph (c) of the preceding Sub-section."
    Paragraph (c) of the preceding Subsection says:
    " To vary from time to time, or revoke, any directions given by virtue of this paragraph… to revoke, or suspend the operation, of a licence."
    Those are the powers which the right hon. Gentleman proposes to delete. That is how it appears to me. It may be that this involves a contradiction. It seems that the right hon. Gentleman is proposing to leave in the words:
    " renew or transfer a licence under the scheme by any decision of the board to revoke or suspend the operation of such a licence."
    And at the same time to delete the words which follow.
    Mr. Morrison: The difficulty of the hon. Member is possibly the word "direction." If he will look at the paragraph we are proposing to amend he will see the words
    " or by any direction given by the board."
    If he turns to the preceding sub-section he will see that power is given to give directions to vary or revoke these directions, and if he reads on
    " to revoke or suspend the operation of a licence."
    To revoke or suspend a licence is not a direction, and not being a direction is saved from a denial of appeal by the words which still remain in the Bill, namely
    " any decision of the board to revoke or suspend the operation of a licence."
    A suspension or revocation of a licence as a decision of the board still remains

    1759
    open for appeal to the Commission. The only limited categories in which we say that a right of appeal should not be exercised are when directions are given on such matters as equipment and trip allotment.
    9.14 p.m.
    Sir Percy Harris: The Minister has been criticising the proposals in his own Bill. We are considering Lords Amendments, and the right hon. Gentleman is now finding fault with the words of the Bill he presented to the House. We appreciate that the right of appeal in the case of the revocation of a licence still remains, but the right hon. Gentleman has indicated that it is too much to give this right in reference to directions as to the quantity of fish to be caught. I suggest that these words should not be left out of the Bill at the direction of another place. The right hon. Gentleman seems afraid that fishermen will be unreasonable and bring the Bill to a standstill by constant appeals. I do not imagine that fishermen will be constantly resorting to what to them will be the alarming process of an appeal from a decision of their own board, except in those cases where they feel a real grievance. All this interference with trade and with the occupations of people who are trying to earn a livelihood should be viewed with very great suspicion. We have been assured by the Minister that the individual will get ample protection from needless interference by having the right of appeal. I hope that the right hon. Gentleman will stick to the original drafting in the Bill. The other place has its qualities, and on some big problems such as that of coal, Noble Lords are probably more learned than hon. Members, but the simple problem of catching fish, of going out in trawlers to earn a living from the sea, is surely one with which the House of Com
    mons is more qualified to deal. Very few Noble Lords have to earn their living in that way. They are more familiar with coal than with fish. I hope the House will resist this Amendment.
    Lieut.-Colonel Heneage: I should like to ask my right hon. Friend whether the power to revoke licences and the appeal under this Sub-section will come within the terms of reference of the Committee which he has set up to-day, or will that Committee deal only with penalties and fines?
    9.17 p.m.
    Mr. W. S. Morrison: Although I do not recollect the precise terms of reference of the Committee which has been set up, I know that the intention is that it should deal with the monetary penalties imposed by Marketing Boards and not with matters such as the hon. Member has mentioned.
    Mr. R. Law: With the leave of the House, I should like to ask my right hon. Friend whether, under Sub-section (2), the board are to have the power not merely to limit the quantity of fish, but to ban altogether certain landings?
    9.19 p.m.
    Mr. W. S. Morrison: A matter of that sort would be a matter for the Government under the ordinary procedure. What is provided here is that they may, for example, say that for a certain space of time not more than a certain quantity of Bear Island fish shall be landed so as to give the near-water fishermen a chance, but the wholesale prohibition of the landing of all fish, throughout the country or in different districts, would be a matter for the Government.
    Question put, "That this House doth agree with the Lords in the said Amendment."
    The House divided: Ayes, 131; Noes, 85.

    Division No. 225.

    AYES.

    9.19 p.m.

    Acland-Troyte, Lt.-Col. G. J.

    Christie, J. A.

    Dugdale, Captain T. L.

    Adams, S. V. T. (Leeds, W.)

    Clarke, Frank (Dartford)

    Eckersley, P. T.

    Agnew, Lieut.-Comdr. P. G.

    Clarke, Colonel R. S. (E. Grinstead)

    Edmondson, Major Sir J.

    Aske, Sir R. W.

    Conant, Captain R. J. E.

    Elliot, Rt. Hon. W. E.

    Baldwin-Webb, Col. J.

    Cooper, Rt. Hn. T. M. (E'nburgh, W.)

    Emrys-Evans, P. V.

    Beit, Sir A. L.

    Courtauld, Major J. S.

    Entwistle, Sir C. F.

    Bossom, A. C.

    Cox, H. B. Trevor

    Evans Capt. A. (Cardiff, S.)

    Boyce, H. Leslie

    Craven-Ellis, W.

    Everard, W. L.

    Bracken, B.

    Crooks, Sir J. S.

    Fleming, E. L.

    Broadbridge, Sir G. T.

    Cross, R. H.

    Fremantle, Sir F. E

    Brown, Cot. D. C. (Hexham)

    Davies, C. (Montgomery)

    Fyfe, D. P. M.

    Brown, Brig.-Gen. H. C. (Newbury)

    Denman, Hon. R. D.

    Goldie, N. B.

    Butcher, H. W.

    Dixon, Capt. Rt. Hon. H.

    Greene, W. P. C. (Worcester)

    Chapman, A. (Rutherglen)

    Duckworth, W. R. (Moss Side)

    Gretton, Col. Rt. Hon. J.

    Grimston, R. V.

    Guest, Lieut.-Colonel H. (Drake)

    Mayhew, Lt.-Col. J.

    Simon, Rt. Hon. Sir J. A.

    Hambro, A. V.

    Mills, Major J. D. (New Forest)

    Smith, Sir R. W. (Aberdeen)

    Hannah, I. C.

    Moore, Lieut.-Col. Sir T. C. R.

    Somervell, Sir D. B. (Crewe)

    Harbord, A.

    Moreing, A. C.

    Somerville, A. A. (Windsor)

    Haslam, H. C. (Horncastle)

    Morrison, G. A. (Scottish Univ's.)

    Stanley, Rt. Hon. Lord (Fylde)

    Haslam, Sir J. (Bolton)

    Morrison, Rt. Hon. W. S. (Cirencester)

    Stanley, Rt. Hon. Oliver (W'm'ld)

    Heilgers, Captain F. F. A.

    O'Connor, Sir Terence J.

    Stewart, J. Henderson (Fife, E.)

    Holy-Hutchinson, M. R.

    Palmer, G. E. H.

    Storey, S.

    Heneage, Lieut.-Colonel A. P.

    Perkins, W. R. D.

    Strauss, E. A. (Southwork, N.)

    Herbert, Major J. A. (Monmouth)

    Pownall, Lt.-Col. Sir Assheton

    Strauss, H. G. (Norwich)

    Hoare, Rt. Hon. Sir S.

    Procter Major H. A.

    Stuart, Hon. J. (Moray and Nairn)

    Hope Captain Hon A O J

    Radford, E. A.

    Tasker, Sir R. I.

    Hopkinson, A.

    Ramsbotham, H.

    Thomson, Sir J. D. W.

    Hutchinson, G. C.

    Rathbone, J. R. (Bodmin)

    Tufnell, Lieut.-Commander R. L.

    Keeling, E. H.

    Reed, A. C. (Exeter)

    Wakefield W. W.

    Kerr, Colonel C. I. (Montrose)

    Reed, sir H. S. (Aylesbary)

    Walker-Smith, Sir J.

    Kerr, J. Graham (Scottish Univs.)

    Reid, W. Allen (Derby)

    Wallace, Capt. Rt. Hon. Euan

    Latham, Sir P.

    Law, R. K. (Hull, S.W.)

    Remer, J. R.

    Ward, Lieut.-Col. Sir A. L. (Hull)

    Leech, Sir J. W.

    Rickards, G. W. (Skipton)

    Watt, Major G. S. Harvie

    Leighton, Major B. E. P.

    Ropner, Colonel L.

    Wayland, Sir W. A

    Lipson, D. L.

    Ross Taylor, W. (Woodbridge)

    Wedderburn, H. J. S.

    Lloyd, G. W.

    Rowlands, G.

    Wells, S. R.

    Loftus, P. C.

    Royds, Admiral Sir P. M. R.

    Whiteley, Major J. P. (Buckingham)

    Lyons, A. M.

    Salt, E. W.

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Mabane, W. (Huddersfield)

    Samual, M. R. A.

    Womersley, Sir W. J.

    Macdonald, Capt. P. (Isle of Wight)

    Sandeman, Sir N. S.

    Wright, Wing-Commander J. A. C.

    McEwen, Capt. J. H. F.

    Sanderson, Sir F. B.

    Young, A. S. L. (Partick)

    Magnay, T.

    Sassoon, Rt. Hon. Sir P.

    Margesson Capt. Rt. Hon. H. D. R.

    Selley, H. R.

    TELLERS FOR THE AYES.—

    Markham, S. F.

    Shepperson, Sir E. W.

    Mr. Munro and Mr. Furness.

    NOES.

    Adams, D. (Consett)

    Hall, G. H. (Aberdare)

    Pathick-Lawrence, Rt. Hon. F. W.

    Adams, D. M. (Poplar, S.)

    Harris, Sir P. A.

    Price, M. P.

    Batey, J.

    Harvey, T. E. (Eng. Univ's.)

    Quibell, D. J. K.

    Beechman, N. A.

    Henderson, T. (Tradeston)

    Ridley, G.

    Benn, Rt. Hon. W. W.

    Hills, A. (Pontefract)

    Ritson, J.

    Benson, G.

    Hopkin, D.

    Salter, Dr. A. (Bermondsey)

    Broad, F. A.

    John, W.

    Sexton, T. M.

    Bromfield, W.

    Jones, Sir H. Haydn (Merioneth)

    Shinwell, E.

    Brown, C. (Mansfield)

    Kelly, W. T.

    Smith, E. (Stoke)

    Burke, W. A.

    Kennedy, Rt. Hon. T.

    Smith, T. (Normanton)

    Cape, T.

    Lansbury, Rt. Hon. G

    Stephen, C.

    Charleton, H. C.

    Lawson, J. J.

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Cluse, W. S.

    Leach, W.

    Strauss, G. R. (Lambeth, N.)

    Cove, W. G.

    Leslie, J. R.

    Summerskill, Edith

    Daggar, G.

    Logan, D. G.

    Taylor, R. J. (Morpeth)

    Davidson, J. J. (Maryhill)

    McEntee, V. La T.

    Tinker, J. J.

    Davies, R J. (Westhoughton)

    McGovern, J.

    Tomlinson, G.

    Davies, S. O. (Merthyr)

    Maclean, N.

    Walkden, A. G.

    Dobbie, W.

    Marshall, F.

    Watson, W. McL.

    Dunn, E. (Rother Valley)

    Mathers, G.

    Welsh, J. C.

    Ede, J. C.

    Maxton, J.

    Wilkinson, Ellen

    Edwards, Sir C. (Bedwellty)

    Milner, Major J.

    Williams, E. J. (Ogmore)

    Foot, D. M.

    Muff, G.

    Williams, T. (Don Valley)

    Gallacher, W.

    Noel-Baker, P. J.

    Wilson, C. H. (Attercliffe)

    Greenwood, Rt. Hon. A.

    Oliver, G. H.

    Windsor, W. (Hull, C.)

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Owen, Major G.

    Woods, G. S. (Finsbury)

    Griffiths, G. A. (Hemsworth)

    Paling, W.

    Young, Sir R. (Newton)

    Groves, T. E.

    Parker, J.

    Guest, Dr. L. H. (Islington, N.)

    Pearson, A.

    TELLERS FOR THE: NOES.—

    Mr. Whiteley and Mr. Adamson.

    Question, "That this House do now adjourn," put, and agreed to.

    CLAUSE 10.—(Marketing provisions of distributors' marketing schemes.)
    Lords Amendment: In page 14, line 22, at the end, insert:
    " and the scheme may provide for determining any of the matters aforesaid either generally or in relation to particular areas or particular descriptions of white fish."
    9.27 p.m.
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    1762
    This was inserted in order to meet the point raised by the hon. Member for Dundee (Mr. Foot) and the hon. Baronet the Member for Berwick-on-Tweed (Sir H. Seely). It was represented by them and by others that a certain amount of elasticity was desirable because the conditions for the distributive trade were not the same in every part of the country. The effect of the Amendment is to enable the various matters that are to be determined by the scheme to be determined in relation to different areas of the country.

    CLAUSE 13.—(Provisions as to the submission, confirmation, amendment and revocation of marketing schemes.)
    Lords Amendment: In page 18, line 17, leave out from "operation" to the end of line 20.
    Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    This has to be read together with the proposed new Clause on page 37, line 20. It is really a drafting matter and the Amendment is designed to achieve the same object in a more compendious manner.
    Subsequent Lords Amendments, to page 52, line 15, agreed to.

    CLAUSE 53.—(Increase of certain penalties.)
    Lords Amendment: In page 54, line 26, at the end, insert:
    " and Sub-section (2) of Section 6 of the principal Act shall have effect as if in paragraph (c) of that Sub-section for the words ' liable to be forfeited in pursuance ' there were substituted the words ' taken or used in contravention.' "
    9.32 p.m.
    Mr. Wedderburn: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    This Sub-section repeals Section 3 of the principal Act, which enables local sea fisheries committees to forfeit fish taken or instruments used in contravention of their by-laws. It was found that such a penalty was unsatisfactory. It is not intended to abrogate the power to seize fish or gear for the purpose of producing evidence in court. As the principal Act stands, fish or gear liable to forfeiture may be seized. If we abolish the right of forfeiture, the right of seizure would lapse, and the Amendment is intended to rectify that by enabling fish or gear to be seized if it has been used in contravention of the by-laws.
    Mr. Foot: If it is seized for the purpose of being used for evidence in court, will if afterwards be returned?
    Mr. Wedderburn: It depends on the state of the fish.
    Mr. Foot: Is there any provision for returning gear?
    Mr. Wedderburn: The right of forfeiture is abolished, and that means that it cannot be taken away. It must be returned. It is only intended to enable officers of local committees to seize and keep them in their possession for the purpose of evidence.
    Subsequent Lords Amendments to page 6o, line 14, agreed to.

  FIRST SCHEDULE.—(Incidental provisions as to the White Fish Commission.)
  Lords Amendment: In page 6o, line 24, leave out:
  " or who is a member of the Commission."
  9.34 p.m.
  Mr. W. S. Morrison: I beg to move, "That this House doth agree with the Lords in the said Amendment."
  This continues the obligation which rests upon Ministers to secure that persons appointed to the Commission do not have any financial interest.
  9.35 p.m.
  Mr. J. J. Davidson: I think the Minister might amplify his explanation. The Bill says:
  " It shall be the duty of the Ministers to satisfy themselves, with respect to any person whom they propose to appoint to be a member of the Commission or who is a member of the Commission."
  Does not the Minister think that circumstances may arise with regard to statements being about a member of the Commission entering into certain obligations which will require him to take some action?
  Mr. Morrison: That is precisely the point. This makes it necessary for the Minister to satisfy himself from time to time that such a person has no financial interest which will interfere with the proper execution of his duty.
  Remaining Lords Amendments agreed to.

  GAS UNDERTAKINGS ACTS,1920 TO 1934.
  Resolved,
  " That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 192o to r934, on the application of the Mayor, Aldermen, and Burgesses of the borough of Walsall,

  1765
  which was presented on the 4th day of April and published, be approved."
  Resolved:
  " That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Portsmouth and Gosport Gas Company, which was presented on the r2th day of April and published, be approved."
  Resolved:
  " That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Woking District Gas Company, which was presented on the 3rd day of May and published, be approved."—[Mr. Cross.]
  The remaining Orders were read, and postponed.

  WAR-TIME SERVICE ENROLMENT(CO-ORDINATION).
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Furness.]
  9.40 p.m.
  Captain Arthur Evans: I wish to call the attention of His Majesty's Government to the necessity for closer co-operation and co-ordination between the various Defence Departments and the Civil Departments in their appeals for voluntary man-power in the event of war. My right hon. Friend the Minister for the Coordination of Defence was kind enough to notify me of his intention of being present when the Adjournment was moved to-night. Unfortunately, the Adjournment has taken place earlier than was generally anticipated, and I am afraid that my right hon. Friend may not be back from an important public duty which he is discharging, for some time yet. In the meantime, I hope that my hon. Friend the Assistant Postmaster-General will be kind enough to note the remarks which I propose to make, and convey them to the proper quarter at the opportune moment.
  As the House is aware, the Cabinet, in their wisdom, have decided that during the time of peace, or at least during the lifetime of the present Parliament, no form of conscription will be introduced. The Prime Minister also informed the House, in reply to a question by an hon. Member of the Labour party, that no
  1766
  national service register of man power would be put into operation during the lifetime of the present Parliament. Therefore, I do not propose, to-night, to argue the case for or against conscription. I propose to address myself only to the position as we find it and to our dependence, solely on voluntary effort in a time of emergency preparation. We find ourselves in this position. In organising and recruiting for the various requirements of the Defence Department and the Civil Departments, including the police authorities, we are entirely dependent on the response which the young men of this country and, indeed, the young women find themselves able to make to the appeals of the various Departments of the Government. That being the case, I think the House will agree that efficient co-ordination and co-operation between the Ministers concerned is of paramount importance. When I ventured to raise this matter at Question Time a week or so ago, my right hon. Friend the Minister for the Co-ordination of Defence, in reply, used these words:
  " The co-ordination of the needs of the Defence Departments is undertaken by a Sub-Committee of the Committee of Imperial Defence, on which the Defence Departments and the Home Office are represented."
  My right hon. Friend then dealt with another matter and went on to say:
  " Every effort is made to secure that men of the ages which would most urgently be required for the active Defence Forces are not accepted for duties that could be performed by older men."—[OFFICIAL REPORT, 18th May, 1938; cols. 402–403, Vol. 336.]
  While it is the case that such a subcommittee of the Committee of Imperial Defence has been established, there appears to be definite evidence that cooperation is not proceeding as smoothly as the House would desire. I propose to call attention to one or two instances. The first which I have in mind is the recent appeal which was made by the Commissioner of the Metropolitan Police for no fewer than 19,000 medically fit young men, of a minimum age of 30, for the Police War Reserve in London alone. I was privileged to listen in to that broadcast appeal, and I have since refreshed my mind with a copy of the actual broadcast, which was furnished me by the Home Secretary. I find that in most cases these men, when they are called up for service, will be able to live at home, and they will be required for eight hours'

  1767
  duty per day or per night in the 24 hours. For these services they are to receive rates of pay of 60s. per week, and in the event of their being unable to live at home and being transferred to another part of the Metropolitan area, they will receive an additional 6s. per week.
  I think the House will agree that these are indeed most attractive terms of service, especially when one compares them with the rates of pay which the Territorial soldier will receive on mobilisation. As the House well knows, the rate of pay which the Territorial soldier will receive in the event of his being mobilised in a national emergency is exactly the same rate of pay as the Regular soldier would receive, and indeed enjoys to-day. The basic rate is 14s. a week, and I am advised by the War Office that at the present cost of living the food which a soldier consumes costs the War Office 14s. 4d. per week. If you add to these two figures the cost of accommodation in barracks, or indeed in billets, at exactly the same rate which the Commissioner of the Metropolitan Police is prepared to allow, namely, 6s. a week, you get a total of 34s. 4d. per week which the Territorial soldier will receive either in money or in kind in the event of his being mobilised, as against the 66s. a week which a policeman of the War Reserve will receive if he has to live away from his home. That is a difference of 31s. 8d. in favour of the War Reserve policeman. When I pressed my right hon. Friend the Home Secretary on this point in this House in a supplementary question on 19th May, he replied:
  " We think that the first obligation of younger men is to the Territorial Army and the fighting Services.''—[OFFICIAL REPORT, 19th May, 1938; col. 572, Vol. 336.]
  No wonder my hon. Friend the Member for Evesham (Mr. De la Bère) asked, "Is not the whole matter inexplicable?" because he knew, as indeed the whole country knows, that in spite of the most commendable and strenuous efforts of my right hon. Friend the Secretary of State for War, backed up as he is by the Territorial Army Associations throughout the country, the Territorial Army to-day is still short of over 25,000 medically fit men between the ages of 18 and 38. I was astounded when I listened to the broadcast which I have mentioned that no mention was made by the Commis-
  1768
  sioner of Police to this fact, in spite of the Home Secretary's view that
  " the first obligation of younger men is to the Territorial Army and the fighting Services."
  I want to ask His Majesty's Government, why this unfair discrimination in rates of pay? I think that hon. Members on all sides of the House must be forced to the conclusion that one Department is trying to outbid another in its natural desire to recruit as many men as necessary, and perhaps at a later stage—if not to-day, on some other suitable occasion—a representative of the Treasury will be able to explain this to the House in greater detail. It is not so much a question as to how much a soldier, including all the overheads, costs the Treasury as against a police war reservist; it is a question in the minds of potential recruits of how much they receive, and if you were to offer an inducement to one particular class of men of 66s. a week as against 31s. 8d., I think that in the natural course of events, and human nature being what it is, they might be tempted to look with favour on a form of national service which recognises their service, from a financial point of view, in a more generous way than another form of national service.
  I also find that this question of appealing to men who, in my judgment and, I think, in the judgment of most hon. Members, should be in the Territorial Army, is not confined to appeals by the Commissioner of Police. I have read very carefully a recruiting pamphlet which has been issued by the Home Office in connection with air-raid precautions, a pamphlet which I find is not only addressed from the Home Office, but is also published under the auspices of the Scottish Office. I find that for air-raid warnings the services of active men of 30 years of age are also wanted, that in the fire brigade reserve fit men over 25 years of age with fire brigade experience are wanted, that for first-aid purposes fit men over 30 are applied for, and their duty in the event of an emergency, I gather, is to work in parties of four men to go to the scene of any casualties and to give first aid to the wounded before having them removed to a first-aid post or to a hospital. There are many other instances where men are invited to join His Majesty's civil authorities in the event of war. I find that messengers are

  1769
  eligible to join the A.R.P. service, and in this particular case men of 3o years of age who are medically fit are invited to offer their services.
  I do not wish my right hon. Friend the Minister for the Co-ordination of Defence to feel that I have seized this opportunity to make a personal attack on the Commissioner of Police; I only raise this matter because it struck me that here was concrete evidence of a lack of co-ordination, not only between the Departments, but also within the Departments, because, after all, the Minister of the Crown who is responsible in this House for the Commissioner of Police is the Home Secretary. He tells me, in reply to a question, that young men of the category to which I have referred should offer themselves to the Territorial Army, but when a responsible officer of his Department is appealing to the vast numbers of young men who may feel inclined to come along and offer their services, no mention at all is made of that essential fact.
  The time has come when His Majesty's Government should make clear to the House of Commons and to the various civil authorities throughout the country what is their actual policy in this matter of voluntary enlistment. It is, indeed, a question of high policy. His Majesty's Government must first make up their minds, after consultation with their various military and civil advisers, what they think will be the possible direction of the next war. There is an important school of thought which holds the view—which, I think, is rightly held—that the potential enemy might well try what is known as the knock-out blow, and, amassing all the possible aeroplanes at their disposal, would make an attack on London alone with the idea of paralysing the nerve centre of the country, and thus make it impossible for us to mobilise our resources.
  If that takes place it does not need much imagination to visualise the terrible destruction, and perhaps panic, which might take place. I think that that is a reasonable assumption and that it is also fair to assume that the police force alone would not be able to deal with those circumstances. I imagine that one of the first things which the House would do is to declare a state of emergency and even, in certain circumstances, martial law. That is, I understand, according to the
  1770
  considered policy of His Majesty's Government, where the Territorial Army and, in some circumstances, the Regular Forces will play their part. The Secretary of State for War, in introducing the Army Estimates on 10th March, used these words:
  " The first purpose of our Army is home defence. In preparing the Army for war the menace of air attack is a primary consideration. On the outbreak of war defence against air attack may be the primary requirement. In this major respect home defence is in the first category of importance and in a form unknown in 1914."
  These are the words which I would ask the House to mark:
  " The priorities in home defence are, in their order, air defence; internal security, which assumes a widened scope in the light of air-raid precautions…"—[OFFICIAL REPORT, 10th March, 1938; col.. 2136, Vol. 332.]
  That being the considered view of His Majesty's Government, surely it is vital that every possible effort should be made to bring the Territorial Army up to strength in the shortest possible time. In view of the broadcast appeals to which I have referred and the pamphlets which have been issued by the Home Office, there must be some natural doubts in the minds of young men who are anxious to come forward at this time and do the best they can to strengthen this country against any possible act of unprovoked aggression from abroad.
  I feel that for the type of work to which I have referred, in particular the police war reserve and air-raid precautions, a minimum age for the rank and file of 40 years would not be too low, and, in some circumstances, men under 40 who are not no per cent. physically fit to offer themselves to the active fighting forces of the Crown. For instance, I come within that category, and I do not look upon myself as being entirely decrepit. I feel that I would be able from the physical point of view to discharge the tasks of which I have read in the air-raid precautions recruiting pamphlets. I also feel that if I were to years younger and medically fit my place would not be in those services but in the active fighting forces of the Crown.
  Mr. Ellis Smith: We have heard that story many times.
  Captain Evans: I do not quite understand what the hon. Member means by that. I do not think such an interruption is fair to him, because I am sure he would be one of the first in the event of emergency to offer his services to the nation. On the other hand, it may well be that in a future war, whatever the circumstances are, this country will never again be in a position to send a vast and important army abroad as it did from 1914 to 1918. No one can say that for certain. That is another hypothesis. In any case, we might be called upon to send large forces of our Regular and Territorial troops abroad to defend certain parts of the Empire. If that be the case, surely it is of the utmost importance that a large number of suitable men should be available in the civil population for those Services without having to drain the air-raid precautions, the police and other civil departments of men who arc far more fit for the Army than for those services.
  In the event of the terrible calamity coming upon us the Government of the day might decide that they would not pursue the same policy as that pursued by the Government in the late War, and that the only fair thing would be to conscript the whole services of the nation, whether in man power or in wealth, for the nation's defence. That, however, is not the policy of His Majesty's Government at the present time. I believe that in our efforts to-day not only young men, but older men and young women, are anxious to play their part if their course is made clear by the Government. I rise to-night to ask my right hon. Friend the Minister for the Co-ordination of Defence to take this opportunity of making the position clear beyond the shadow of doubt to the Home Office and the civil authorities, and to lay it down clearly to the sub-committee of the Committee of Imperial Defence so as to ensure that the requirements of the priorities are regarded as of paramount importance. The people of this country, male and female, young and old, will then know exactly where their services will be of best value, and the nation will be able to join together in a supreme effort to avoid the necessity of some form of conscripted service during the period of emergency preparation.
  10.5 p.m.
  The Minister for the Co-ordination of Defence (Sir Thomas Inskip): I hope
  1772
  that my hon. and gallant Friend and the House will accept my apology for not having been present at the beginning of his speech, but I think 1 have inferred from what I have heard, and from the questions he has asked me on other occasions, what is his main purpose. I have no doubt that he only wants the Government to state clearly the arrangements which they are making for securing recruits to the various services in peace time. To-night we are not in a position, and could not be expected to be in a position, to make any statement, except a very general statement, as to what the policy in war time would be in connection with the use of our man-power. We are dealing to-night, as I think my hon. and gallant Friend intends, with the arrangements solely in time of peace. The first thing we must all appreciate is that any Government dealing with the use of man-power to-day would be almost criminal if they did not take account of the lessons of the Great War.
  My hon. and gallant Friend has referred to some of the experiences in 1914. With those experiences in mind the Government Departments concerned have given a great deal of consideration, over a number of years, to the best use of man-power in an emergency. There is certain to be in the event of war an authority—what may be called, in the language used in the last War, a "competent authority"—who will allocate, according to the age and capacity of each individual person, a suitable position for that person to occupy. Nobody can escape from the obligation which will be placed upon in those circumstances by choosing a position, possibly one which he might think a more appropriate position for himself, in peace time. In other words, if anybody elects for one or other of the many services which are asking for recruits at the present time he will do so with the full realisation that he will not thereby be exempt from any obligation which Parliament may impose upon him in time of war.
  The next fact we must all realise is that there can be no compulsion in peace time. We are not in a position to tell men to join any particular service, nor, indeed, do I think it is necessary that we should have compulsory powers. One of the happy features of the present time, when public service is very much to the front, is that, generally speaking,

  1773
  there is an adequate flow of recruits to the different services. No doubt the number of air-raid wardens being asked for is a very large number but I think my right hon. Friend the Home Secretary has given figures which will satisfy the House that, generally speaking, the public are responding to the appeals which are being addressed to them. And so, at the present time, with the Auxiliary Forces, the Territorial Army in particular. Therefore, I should not admit for a moment that the youth of this nation require to be shepherded into particular occupations. I believe the public spirt of the moment is such as to result in a proper choice being made of the most appropriate service, in the great majority of cases.
  But, just as it is undesirable or impossible to apply compulsion now, so is it undesirable to reject offers of service. Nothing could be more discouraging than for a young man or, for that matter, an older man, to come forward and make his offer in a genuine spirit of patriotism, and to find his services rejected, and we wish to avoid that mistake. Then we realise, all of us, that a great many positions have to be filled in time of peace. Half a million is the number of air-raid wardens required, and as with air-raid wardens so in the case of fire brigades, reserve constables and persons to fill the ranks of the first-aid parties in connection with air-raid precautions, it is essential that we should take measures in time of peace to see that the ranks of those services are adequately filled.
  What can the Government do in these circumstances, with no compulsion and no rejection of any reasonable offer of service, and at the same time the necessity for filling the ranks of the services? I suggest to the House that we have taken the proper course. We have decided that there shall be certain downward age limits below which persons shall not be accepted for a particular service. As an illustration, in the case of fire brigades it has been decided that there shall be a lower age limit of 25, but that is not to suggest that we intend that the fire brigades shall be wholly or largely composed of men between the ages of 25 and 30. We thought that a downward limit of 30 in the case of fire brigades would be a very suitable limit to fix, but in fire brigades there must of necessity be included many young and active men for
  1774
  the sometimes dangerous service which the fire brigade undertakes. After fixing the downward limit of age at the point which we think best, we then leave each individual to apply for that service which suits his capacity or suits his bent.
  Let there be no mistake about it, we do realise that some of the services ought to have, and we ask that they should have, priority. Supposing there is a man of, shall I say, 25 or 26 years of age. Although he is eligible for the lire brigade service we should like to think that, if he is able, in health and in spirit, to enter one of the Auxiliary Forces, the Territorial Army in particular, he will give that his first preference. All the Auxiliary Forces are at the moment finding a good supply of recruits, but there is still a great deal of need for those who are willing to give their services.
  As in the case of fire brigades, who sometimes will need active young men for special services, so in the case of reserve constables. I think my hon. and gallant Friend spoke about air attack being possibly an attempt at a knock-out blow. There is one point in particular at which such a knock-out blow would be aimed, and that is this great centre of population, London. It is certain that the ordinary police force is not of a size adequate to deal with an emergency of that kind, and it would be fantastic to suppose that reserve constables enrolled to supplement the ordinary police force would be either middle-aged or elderly. They must for the most part be young, or comparatively young, and active men. That leads me to the reflection that to some extent the Territorial Army and the reserve constables are in competition for men of the same age.
  My hon. and gallant Friend suggests that it is rather a pity that the salary of £3 per week has been fixed for those who enter as reserve constables whereas if they enter the Territorial Force in war time they will receive very much less. I have already pointed out that men of suitable age for military service would be called upon by Parliament to render that service if it is thought to be more important to do so than to serve in the police force. Let there be no mistake about it that service in the police force might be just as dangerous and require precisely the same qualities as service in the Territorial Army.
  Captain Evans: Would my right hon. Friend kindly deal with the suggestion I made that in the event of a knock-out blow being partially successful it would be the duty of the military authorities, according to the Secretary of State for War, to assume charge of the situation and of the police, and that it is of the utmost importance that the position should be understood at the earliest possible moment?
  Sir T. Inskip: It is impossible to foresee the demands that may be made upon the forces competent to deal with such a situation and such a danger as an air attack upon London. The existing police forces might obviously be inadequate for services of that kind, and you would supplement them to some extent; and it may be that even the supplementary reserves may be inadequate to meet the situation. It seems of necessity to follow that the available military forces would be asked to aid in putting right the general disorder that might occur or to take over the services which ordinarily would fall to the police. The Government recognise that at first sight competition in those different services seems to lead to some avoidable confusion. I hope that the House realises that there can be no compulsion and that, on the other hand, we want to accept every willing offer of service; and that all the Government can do is to fix a proper downward limit of age and to trust to the good sense and the manhood of this nation to choose the proper service, always bearing in mind that, in the event of war, ultimately the proper position would be allocated to every man, according to his age and capacity.
  I must say a word about the matter of pay for the reserve constables. I realise that at first sight men might be attracted by the prospect of£3 which is more than they would receive in the Territorial Army, but, speaking for myself, I rate our public spirit a little higher than to suppose that there would be any rush for the reserve constabulary forces because of the superior attraction of the rate of pay. There might be one or two men who would choose the reserve constable forces but, if they were suitable, they would be put into the necessary service, and if they are to be members of the police forces and even of the supplementary reserve, they must be remunerated under the law on similar scales to those who are already serving.
  1776
  My hon. and gallant Friend asks for co-ordination in these matters, and in his questions to myself or to the Home Secretary he has suggested that there has not been sufficient co-ordination. That is a misapprehension. It is not possible, by rule of thumb, to sort everybody into his right place in time of peace, but we shall arrange that there shall be a body always available for dealing with situations in which different Departments come into competition with each other. In so far as that body is not able to dispose of the question or settle the point of principle, it will then be referred to me, and I shall dispose of the matter, either by a decision of my own or by referring, perhaps, an important question of principle to the Committee of Imperial Defence. I think my hon. and gallant Friend will find that every case has been foreseen. I am not suggesting that all our age limits are rigid or unalterable; they would be adjusted to meet changing situations. If we find that the influx into one particular service is more than into the other services, it may be that some adjustment of the age limit would be required, but at the present time I think the age limits we have fixed are those most likely to guide men into the proper channels, and if they respond with the same spirit of public service as we are, happily, experiencing at the present moment, we shall find, as we are accustomed to find in this country, that good sense does more to provide good order than regulation.
  10.22 p.m.
  Mr. Ede: I do not think the House can be very satisfied with the reply of the right hon. Gentleman to the case put forward by the hon. and gallant Member for Cardiff, South (Captain A. Evans). It seems to me, as an ex-Territorial, that there is a very great difference between the obligations that are assumed by the man who joins the Territorials and the obligations undertaken by the man who joins the air wardens or any of the other forces that have been mentioned this evening. The Territorial is attested; he takes the oath; and from that moment he is under military discipline. He cannot of his own volition get out of the obligations he has undertaken. He does not have to wait until the outbreak of war before he has to make himself efficient. If during any of the years for which he has enlisted he fails to become an efficient Territorial,

  1777
  he is liable to a fine; if, without sufficient excuse, he does not attend camp, he is liable to a fine; and when the outbreak of war comes, his place is definitely settled, and he cannot regroup himself. He has lost all power of volition. And may I say I think that this is an obligation which a man of the age mentioned by the hon. and gallant Member ought, unless he has conscientious objections to war altogether, to be prepared to undertake. I want to be quite frank on that point. I joined the old Volunteers at 17 years of age, became a member of the National Reserve at the end of my period of enlistment, and re-enlisted again in my old unit at the outbreak of the War. Therefore, I have no doubt as to what ought to be the attitude of a young man who has no conscientious objection to war.
  There is no similar obligation in the case of an air warden. As far as I know, a person puts down his name to be an air warden, and this House has imposed no similar obligation on him to become an efficient air warden. He can, as far as I know, resign from being an air warden on any day that he likes. I do not know with regard to the other forces, but I have not noticed going through this House any Statute imposing on the reserve fire brigade man any liability of the kind voluntarily undertaken by the Territorial. I am not so sure about the reserve constables; I do not know whether they undertake any obligation, from which they cannot escape, similar to that undertaken by the Territorial. I am bound to say that the right hon. Gentleman's memory seems to me to be rather short about what happened in the late War. I know that he was engaged in the Admiralty, on the Intelligence Staff, and therefore may not have had much time to devote to what was going on outside; but I can assure him that if he had been with the Forces in France he would have heard the most sarcastic allusions to people who were pressing to get into the special constables, in order to avoid being called up under the various Acts passed by this House.
  Sir T. Inskip: That is just what they will not be able to do in this case. Provision has been made for that very purpose.
  Mr. Ede: I have not heard anything about it from the right hon. Gentleman this evening.
  Sir T. Inskip: The hon. Member did not do me the honour of listening very carefully.
  Mr. Ede: I listened very carefully to every word.
  Sir T. Inskip: I said that the essential feature of the arrangements for war was that the competent authorities should allocate to every man his service, and that he would not be able to escape that military service, if Parliament so decided, by enlistment now in another service.
  Mr. Ede: Then we may understand that, although it has not been brought before this House, and may not be brought before it in the lifetime of this Parliament, or before the outbreak of war, there is in existence a conscription Bill which will put everybody in his appropriate niche. What the right hon. Gentleman has said cannot mean anything but that. On the day the emergency arises the legislative machinery is all ready for bringing that about. I do not think he will deny that that is the exact meaning of what he said.
  Sir T. Inskip: I said so as plainly as I could.
  Mr. Ede: It is the first time it has ever been plainly stated. I hope it will be noted by these people who join these various services, because it cannot give much encouragement to local authorities to go on recruiting air-raid wardens and other people while that position holds, for they may be training people who, when the emergency arises, will be withdrawn from that service and put into another. I cannot think that that is a thing that is going to make for efficient working when the emergency arises. We are led to believe, and the existing practice justifies us in believing it, that this emergency may arise far more suddenly even than the last. I am told that my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) has even had to argue in court that there is a war in China. I forget which side he took, though I have no doubt he did his best for his client. He said it was quite clear, from what had been said by some distinguished lawyer in the past, that his view was right; but I gather, from the decision of the court, that they took the contrary view. This emergency may arise with the same suddenness as it has arisen in other places. If that is

  1779
  so, what is to be done with regard to filling these people's places?
  Speeches like the right hon. Gentleman has made to-night make it almost impossible to believe that the Government regard the situation as being as serious as they sometimes say. When one contemplates the expenditure on armaments and the appeals that are being made for recruits, to say that there is already a Statute in preparation that will be placed on the Statute Book the moment the emergency arises, that will draft these people off, such as have made the wrong selection, into other branches of service, seems to me to indicate no clear conception of the confusion that will arise.
  In the last War we often used to thank the Almighty that we had a Navy. If we had known that there was in the Intelligence Department at the Admiralty a person prepared to act on the lines that we have heard to-night in connection with this matter, I think that we should have preferred to rely on the Army a bit more than we did. This is a very serious matter, and the way in which it has been dealt with by the right hon. and learned Gentleman this evening cannot give the House any confidence in the methods that are being adopted by the Government. There was one thing said by the hon. and gallant Gentleman the Member for Cardiff, South that I have heard said by other Members of this House—it was said in my own constituency by the right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair)—and that is, the position of the man-power of this country with regard to sending a force abroad. The hon. and gallant Gentleman assumed that we should send no large force abroad. The right hon. Gentleman the Member for Caithness and Sutherland said in my constituency that it would not be the duty of this country to send a large force abroad. All that I could say in reply to the right hon. Gentleman in my constituency was that no one imagined that he would have the responsibility of saying anything about it when the time came. But it is being frequently stated, and the right hon. and learned Gentleman said nothing this evening in reply to the statement.
  Captain Evans: I did not venture to be so foolish as to make a definite statement of that kind. I said that it was
  1780
  an assumption which the House of Commons were not justified in ruling out as a possibility.
  Mr. Ede: I was very careful to say that the hon. and gallant Gentleman assumed the position. There seems to be a general assumption. I know of nothing that ought to allow it to be assumed in this confident way. When one is talking of dealing with the man-power of the country one may be placing a good many people under quite a wrong delusion if he allows this assumption to go unchecked. If there is to be any co-ordination in this matter, there should be a general understanding that people who accept recruitment to any of these forces should regard themselves as being bound to that force in the same way that the Territorial is bound to his force. I believe that any other form of recruitment is bound to break down when the emergency arises, and I regret very much that the right hon. Gentleman has not been able this evening to assure the House that the arrangements now being made will be those which will be carried into effect when the state of emergency arises. If it were any other Government than the present, one could only draw the inference from the speech to-night that the state of emergency is a great deal further away than the Government have hitherto led us to believe. My own belief is that in this matter we are really drifting along in a spirit of complacency in the hope that, somehow or other, the emergency may be avoided, because no one could imagine, from the speech made this evening, that the emergency is imminent.
  10.35 p.m.
  Mr. Magnay: What does the hon. Member exactly mean by conscription? Does he suggest that the right hon. Gentleman said that conscription will come into operation at the time of emergency, and that he objects to that? What is an emergency? Does the hon. Member want conscription now?
  Mr. Ede: I never asked for anything of the sort.
  Mr. Magnay: I am sure the House understood that the hon. Member's objection to conscription at the time of emergency was that there would be a hopeless muddle. What is his alternative? Does he want conscription now?
  Mr. Ede: I was not asking for conscription now. What I said was that persons who enlist now, voluntarily, in the various Services in a similar way that they enlist in the Territorial Army, should have that similar obligation and should be assured that when the emergency arises they will be able to continue in that form of service. There is, surely, nothing wrong or contrary to the voluntary system in that
  Mr. Magnay: With all due respect to the hon. Member, it is as clear as mud.
  Mr. Ede: Coming from Gateshead, the hon. Member knows a good deal about mud. We get a rather better scour at my end of the Tyne.
  10.37 p.m.
  Mr. Markham: I apologise for intervening, but I am not clear on the statement that we have heard from the Minister. As I understand the position, it is that the Government have the right to allocate to all men who are attested or registered under Territorial schemes or police schemes any such duties as they think fit for them in the event of a national emergency arising. Am I right in that understanding?
  Sir T. Inskip: I do not think I can put it any more explicitly or plainly than I did at the beginning. I do not know whether the hon. Member was here. I said that our plans envisage the setting up of a competent authority which will have power to allocate to everybody his proper position in time of war according to his age and capacity. I hope that is plain.
  Mr. Markham: That is precisely the point I am driving at. As I understand it, that statement means conscription, and if it does mean conscription I think it is rather an appalling thing that the Government should make a statement of that magnitude on a Motion of—I say this with all due respect to my hon. and gallant Friend who raised the question—relatively small importance. It is a statement that should have a full dress Debate in the House, and I hope that an opportunity will be found for it at the earliest possible moment.
  10.38 p.m.
  Mr. Lansbury: I intended to make the same kind of statement that the hon. Member has just made. As he has made
  1782
  that statement, I will not repeat it. I should also like to say that this afternoon, at Question Time, we were all terribly indignant and shocked because of what is happening in China and Spain with regard to air bombardment, and so on. Here we are to-night calmly preparing our minds for the day—if words mean anything the words of the right hon. Gentleman meant that that day may take place at any moment—when this great city is going to be subjected possibly, if not probably, to one of these bombardments, and Berlin or Paris or some other capital is to be subjected to the same thing from us. I can only stand here and say that I cannot understand the indignation that has been poured out in regard to what is happening elsewhere, when what is said to be a civilised Europe is making these gigantic preparations for the same kind of thing.
  I may be asked, what else can we do? Lots else could be done, if the Government adopted what I propose. Nothing could be worse than what will happen if this catastrophe takes place. I see neither in this country nor elsewhere any effort being made to stem the tide towards the barbarism that is taking place or contemplated. Surely somewhere in the world some authoritative voice will be heard calling the nations to sanity before this happens? That is all I have to say tonight. I am appalled at the quietness with which we are sitting here visualising this terrible barbarity which we are told is almost upon us.
  Mr. Tomlinson: If plans are to be prepared for conscripting the manhood of the country in an emergency may I ask whether it is intended at the same time to conscript wealth? If plans are being made on the lines indicated I think plans should be made not simply to conscript the life of the community.
  10.42 p.m.
  Mr. Beechman: I should like to ask whether in his survey the Minister for the Co-ordination of Defence has considered the setting up of a national register? Hon. Members have spoken to-night as though conscription was already upon us, but I would ask hon. Members to consider that because His Majesty's Government have in mind the possibility that there may be a measure of conscription, as was the case in the last war, that is

  1783
  not conscription now. It occurs to me that if we are to have such a measure introduced we ought now to be preparing the material.
  Mr. Speaker: The suggestion of the hon. Member would involve legislation, unless it is to be a voluntary register.
  Mr. Beechman: The register I have in mind is a voluntary register. What I have in mind is this; that there should be a call to every citizen to indicate what service he or she is prepared to offer. It is clear to me that there is in this country a great desire to offer service. There are only two ways in which to forfeit liberty. One is by compulsion, and the other by inactivity. As I understand it, the country is determined not to lose its liberties in either way. It will not suffer compulsion and at the same time it is anxious to offer service, which at the moment it has no opportunity of offering. What I am suggesting is that there should be an opportunity given to the country as a whole to say what service it is prepared to offer in the event of emergency. I do not see how it is possible for His Majesty's Government adequately to consider the measure of conscription which has been indicated without having such material prepared in advance. Finally, let me say that nothing would impress countries all over the world, and particularly dictator countries, so much as the fact that not through compulsion but out of a sense of responsibility, realising that democracy involves service as well as rights, the people in this country, every man and woman, desired to offer service.
  10.45 p.m.
  Mr. Mander: The Minister for the Coordination of Defence has made an exceedingly important statement which will be received with the greatest interest tomorrow throughout this country and the world. The right hon. Gentleman has referred to legislation, and although I cannot go into that, I would like to suggest to him and to the Government that, now that we know that legislation is contemplated, it would be desirable at the earliest possible moment that the terms of the contemplated Measure should be known so that they can be discussed and considered by the people whom they will affect rather than that, on the day on which war is declared, the right hon. Gen
  1784
  tleman should come to the House and say that he wants the Measure passed in five minutes. The country would not be satisfied with that. The scheme must be a carefully considered and agreed one which has the backing of public opinion and which can be taken up when war is declared, but not before.
  I agree with the hon. Member for Farnworth (Mr. Tomlinson) that if anything of this kind were brought forward, it would be absolutely intolerable unless the conscription of wealth was dealt with concurrently. I rather think that a promise of that kind was made by Lord Baldwin a few years ago, and I hope that on some other occasion the right hon. Gentleman or some Member of the Government will say whether there is a Measure ready to deal with the conscription of wealth as well. It is essential that all schemes for National Defence, whether they be conscription or anything else, should have the backing of a public opinion which believes in the Government's foreign policy. But public opinion does not believe in the Government's foreign policy at the present time. I quite agree that public opinion believes in what the Government did the week-end before last —[An HON. MEMBER: "That is our foreign policy."] I am talking about the general run of foreign policy, apart from that very happy lapse. Unless a foreign policy is pursued which has the support not only of the Conservative party, the National Labour party and the National Liberal party—all very important, but after all, not representing the whole nation—but of those who sit on this side of the House, all the schemes will fail, and this country will be landed in disaster.
  10.48 p.m.
  Mr. A. Hopkinson: The curious thing in this Debate is that neither of the Opposition parties seems to have any conception of the meaning of the word "democracy." When the Minister for the Coordination of Defence makes a plain and simple statement to the effect that he and his advisers have got down to the necessary preliminary work with regard to preparing for the introduction of a Bill to give powers to certain competent authorities, hon. Members opposite seem to regard the whole thing as finished. They never seem to imagine that the consent of the people of this country has to be obtained before the necessary register could be established. They seem to re

  1785
  gard my right hon. Friend as a sort of Hitler or Mussolini who prepares these schemes for the destruction of liberty in peace time and who, immediately on the outbreak of war, will proceed to make the necessary decrees to put them into force. One thing that is obvious in this country is that, even in the years that have elapsed since the end of the War, the meaning and understanding of democracy has developed immensely in the minds of our people. It is rather pathetic that, when the people of this country and hon. Members on this side have appreciated the simple fact that this country is democratic and that nothing can be done in this country without the real support of the people, hon. Members of both the Opposition parties have failed to appreciate it.
  10.50 p.m.
  Mr. Kelly: I hope that this Debate will be continued in another form before long. The hon. Member for South Cardiff (Captain Evans) raised what appeared to be a simple proposition, asking whether or not a person who joined the special police force would be allowed to continue in it if his service would be of more use to the State elsewhere. The reply, which came as a very great surprise to the whole House, was that in the event of a state of emergency each man in the country would be told the position that he had to occupy, and the work he had to engage upon.
  Sir T. Inskip: I must correct the hon. Member. If I used the word "emergency" he has certainly misunderstood the sense in which I used it. I used it in no sense except as referring to a state of war.
  Mr. Kelly: I am very glad that I raised the matter. There was another statement at which, I hope, the right hon. Gentleman will look in the morning. I called the attention of the hon. and gallant Member for South Cardiff to it at the time it was made. It was that in the event of difficulties the military would then be in control. I am sure he never intended that. [HON. MEMBERS: "He never said it."] Hon. Members opposite may not have heard it, but the hon. and gallant Member for South Cardiff heard it, and we both spoke of it.
  Captain Evans: I am afraid the hon. Member misunderstood the undertone in which this conversation was carried on. I was listening intently to my right hon.
  1786
  Friend. The hon. Member said to me, "Would the military be in control of the police or would they assist the police in certain circumstances?" My reply was, "That is the point."
  Mr. Kelly: Again I am not at all sorry that I have raised the matter. I ask that this question shall not be left to the mere reply of the hon. and gallant Gentleman. I hope that at an early date the House may be able to debate whether or not conscription is intended and what is the proposal of the Government.
  10.54 p.m.
  Mr. Wedgwood Benn: The right hon. Gentleman seems to have made a very important announcement by way of an obiter dictum, and it is only right that a full explanation be given on a more formal occasion when more Members are present. The Chancellor of the Exchequer resigned from the Government in 1914 because of the proposal of conscription before the voluntary principle had been tried. He is certainly occupying a very modest position on the Treasury Bench at the moment but, no doubt, he will take part in the Debate and explain why he has changed the view which he supported then with so much enthusiasm. I should like to know whether the unification and nationalisation of the different parties in the Government have proceeded to a point when the Chancellor who resigned a most important position in 1914 is now preparing to resign, or what he is preparing to do in the light of the Government's present plans. That, however, is merely a personal matter. What is important to note is the Government's intention, that when the moment comes, they will have conscription. [HON. MEMBERS: "Of course!"] Of course, "say hon. Members. But everyone said that in peace time the Government would never introduce conscription." In circumstances of emergency, ' we are told now, they intend to do so and obviously they would not wait for the outbreak of hostilities. [HON. MEMBERS: "No!"] There are so many official and semi-official spokesmen of the Government that it would be of advantage if the right hon. Gentleman could see his way to suggest to the Chief Whip that at some suitable time we should have a clear explanation of this plan which exists in the Government's documents, for the introduction of conscription.
  10.56 p.m.
  Mr. A. Bevan: There will be considerable consternation when the country reads the pronouncement which the right hon. Gentleman the Minister for the Coordination of Defence has made. The attempt at a belated justification by the hon. Member for Mossley (Mr. Hopkinson) was rather beside the point. He suggested that this was a democratic procedure because before conscription could be introduced the permission of the House of Commons would be necessary. Everyone who experienced what occurred at the outbreak of the War knows how much democracy enters into circumstances of that kind. As I am attempting to reply to the hon. Member for Mossley, I hope he will try to achieve an unusual degree of Courtesy and listen to me. [HON. MEMBERS: "Withdraw!"] He made an attempt to show that the proposal of the right hon. Gentleman was democratic because the consent of the House would be necessary but the consent of the House in circumstances of the kind contemplated, would be prejudged. The plans, I understand, are being made and when the time came the newspapers would stampede the popular mind, the right hon. Gentleman and his friends would stalk through the country, saying that this was necessary for the national defence, and the House of Commons would be overwhelmed with emotion. I suggest that the proceedings in that case would be a travesty of democracy.
  I would like to put a further question. What are the strategical implications of the right hon. Gentleman's statement? Conscription came during the War, because it was found necessary to send large expeditionary forces abroad. What sort of war has the right hon. Gentleman in mind? Conscription will not be necessary for mobilising the Air Force or the Navy. It can be contemplated only for the purpose of a much larger Army. If that be the case, we ought to know what sort of war the right hon. Gentleman has in mind. Who is the enemy? What is the strategical background of these proposals? [Laughter.] Hon. Members may laugh, but the Government are supposed to be engaged in providing plans for a possible contingency. They now say that conscription may be necessary. Do hon. Members deny that it will be necessary only for a much enlarged Army? [HON. MEMBERS: "No!"] No, it is for the
  1788
  civilian population. In other words what is in mind at the moment is not conscription for the purpose of providing the military resources necessary to carry on a war, but conscription in order to keep the civilian population docile.
  That is what the right hon. Gentleman has in mind, and we shall require in some future Debate an amplification of this proposal before we permit the Government to go on any longer making plans of this kind. As my right hon. Friend has said, a member of the Cabinet resigned in 1915 or 1916 because of a proposal of this kind. We ought to be told a little more about what the right hon. Gentleman has in view, before we allow the Government to go any further with a plan of this kind. We are alarmed by this proposal. It contemplates the conscription of the manhood of this country, but have any plans been prepared for the conscription of the wealth of the country?
  It being Eleven of the Clock, the Motion for Adjournment lapsed, without Question put.
  Question again proposed, "That this House do now adjourn."—(Captain Margesson.)
  Mr. Bevan: If plans are being made for conscription of the manhood of the country, for my own people in my constituency, people with whom I have been brought up, who are going to be placed under the control of the police, it is difficult to suggest that the police will have any paramount role at all. It will be found in practice that once you have conscription, the generals and the brass hats will be in charge of the whole of the resources of the country, and we already know how abysmally stupid they will be in circumstances of that kind. It is interesting to note that it is now anticipated that one of the principal means for defending democracy in this country will be the immediate abandonment of democratic rights on the part of the population. One vicious aspect of the proposal is that, as the Department over which the right hon. Gentleman presides concentrates on conscription as the first resort in the case of war, they have evidently turned down any alternative proposition. A number of other proposals might be mentioned, but as they have now informed the House that they have conscription in their minds in the case of an outbreak of war, they will

  1789
  therefore not have concentrated on any other alternative for mobilising the resources of the country, and in the absence of other plans that would lead to the voluntary organisation of the people's services, they would be compelled to come to the House and ask the House immediately to accept conscription.
  The proposal is a novel one. There are no details. It has been sprung upon us. There have been no preparations for it. We have had indications before of the sinister psychology of the Government, but very few of us apprehended that behind that suave and urbane exterior such designs had been hatched. I listened to those soothing accents over the radio this evening, but the right hon. Gentleman did not tell the country that a part of the preparation that he is making for the defence of democracy in this country is a proposal that every man over 18 years of age should surrender his liberty immediately war breaks out. He made no statement of that sort. He has blurted that out maladroitly on an inconspicuous occasion in the House of Commons, but he will hear more about it, and I can assure him that the industrial masses of Great Britain will learn with alarm and indignation that proposals are being made for conscripting the manhood of Great Britain and that no proposals are being made for mobilising the private interests of property and the wealth of the nation in circumstances like that.
  11.4 p.m.
  Mr. James Griffiths: I heard only part of the right hon. Gentleman's speech, but I want to join my hon. Friends on both sides in expressing our regret that an announcement of this kind was not made on a more formal occasion. It is regrettable that a matter which will get the headlines in the Press to-morrow has been just hinted at in this Debate to-night. I do not want to say a word beyond what has been said by my hon. Friend about the military aspect of the problem, except that I want to join in expressing the view that the Government and the right hon. Gentleman will mistake very seriously the temper of this country if they think they can put forward any measure to conscript men's lives which leaves the wealth of the country outside their proposals. I also want to express the regret which we must all share at the fact that this important announcement has been made on this occasion. The right hon. Gentle
  1790
  man is engaged in negotiations with the trade union movement, and I want to say a word as one who has had, like my hon. Friends, trade union experience. There are industrial implications in this statement. As I understand it, it is that plans are being prepared in case of a national emergency to provide for allocating to the men over 18 years of age their place in the national scheme. They involve allocating their places not only in the Air Force, the Navy and the Army—that will be the smaller part of the problem if what we are told about the kind of war it is likely to be is true—but industrial conscription as well. If it does not mean that, how can you allocate men to their places unless you have power to tell them, "There is your job and you stand by it; you must not strike while you are there. There is your job in the pit or in the factory." If it does not imply that, it is meaningless.
  The Prime Minister has made a pronouncement to the trade unions that he is not a Fascist and that he believes in democracy and freedom. These statements have been made because the Government's policy has caused the trade unions a good deal of apprehension. I want to ask a question which will not only be asked in the House when we get the Debate which we are entitled to get, but will be asked by millions of trade unionists in the country. Our leaders have been in consultation with the Government, and the Government have asked them for their help in this state of emergency, and in the serious position that confronts the Government in the making of armaments. We have now been told that the plans are ready which will destroy the trade union movement and bring in industrial conscription, for that is what they mean in effect. Here is a bit of news for the Engineering Union Conference when it discusses the Government's negotiations to-morrow, namely, that late at night on Monday on a Motion for the Adjournment, the Minister for the Co-ordination of Defence said, "We are appealing for your help now, but our plans are ready and you will be conscripted when the time comes."
  In the discussions which the Minister and the Prime Minister have had with the trade unions, has any intimation been given that plans are ready for what must clearly be industrial conscription? We have had our experience of this sort of thing. We

  1791
  know what it meant during the years 1914–18. We know of the promises that were made. They are beginning to be made again. I remember representatives of the Government— the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and Mr. Runciman—coming to a conference in Cardiff and making promises galore. They were not kept. In the private and confidential conversations which the Minister has been having for some weeks with the trade unions, has any intimation been given to them that the Government have plans complete by which, when an emergency comes, the labour of the country will be conscripted to the service of the State? If that was not done to the trade unions they will read this with a great deal of regret to-morrow.
  11.10 p.m.
  Sir T. Inskip: As the hon. Member has addressed a question to me I will, with the permission of the House, say a few words with reference to it. My hon. and gallant Friend the Member for South Cardiff (Captain Evans) asked me a question of which he had given me notice as to the competition between the different services which at the present time are calling for volunteers. In stating to him and to the House the arrangements which had been made I made the statement in that connection that the plans envisage the creation of a competent authority who will allocate to the persons concerned their proper place, according to their age and capacity, in the public service. Now upon that statement, which is dealing with what my hon. and gallant Friend raised, no more must be built than is either expressly stated on some future occasion or is necessarily inferred. When the hon. Member suggests that I have announced a policy of conscription of labour that is not justified by any statement that I have made. Nothing was further from my thoughts, and, as far as I know, there is no plan or preparation for such a possibility as that.
  Mr. Bevan: Did not the Prime Minister say in his speech last Wednesday that one of the advantages of the war situation was that they did not require any conscription of labour, because they were able to say to a man, "Either you do what we want you to do or you join the
  1792
  Army"? Conscription involves industrial conscription.
  Sir T. Inskip: That is a question as to something which the Prime Minister said a week ago, and I do not recognise the statement which the hon. Member has made, but, at any rate, this is not the occasion to deal with that, and I think the House clearly understood the statement I made in reference to the question asked by my hon. and gallant Friend. Let me add this: I am sure that the House also appreciates that whatever may be contemplated by any plans which the Government have, could never be carried out without discussion in this House and without submission to this House at the proper time, and it is one thing to say that plans envisage the creation of a competent authority and another to say that the Government's policy at the present time is to bring in now a plan for conscription. Hon. Members opposite—and I do not complain of it at all, as they have had their opportunity—have tried to graft on to what I have said something which goes a great deal further than anything I have said to the House, but if the House would be good enough to pay heed to the words which I have used, and the sense in which I used those words, I think they will find that there is no ground for any apprehension that the liberties of anybody can be interfered with except in accordance with the decision of this House.
  11.14 p.m.
  Mr. Benn: I think it is obvious that this matter cannot be cleared up to-night. By a most unfortunate choice the right hon. Gentleman took this occasion to announce some plans which the Government have—
  Sir T. Inskip: That is not quite fair to me. My hon. and gallant Friend and the whole House know that I could not make a proper statement unless I stated the facts. If I had kept back anything then I should indeed have been open to that remark.
  Mr. Benn: I certainly withdraw the word "unfortunate" and say that it is fortunate that the right hon. Gentleman has put us in possession of plans which certainly will have to be discussed. He made no secret about there being plans for conscription. [Interruption.] The

  1793
  hon. Member for St. Ives (Mr. Beechman) based his arguments upon it. While it is impossible at this time of night to pursue the matter I think hon. Members in all parts of the House will agree that the Government should take the earliest opportunity of explaining the position to the House. I must say that the right hon. Gentleman made one very great concession, which was that conscription would not be introduced without the consent of the House of Commons. That went a long way to prove that he was opposed to Fascism in any form. There must be an opportunity for the Minister for the Co-ordination of Defence or the Prime Minister to explain to the House clearly what those plans of the Government are for the introduction of conscription.
  11.16 p.m.
  Mr. Markham: I support the request that has just been made for the fullest and frankest statement by the Prime Minister on this point. It was only about three-quarters of an hour ago that I specifically asked the Minister for the Coordination of Defence whether his statement referred to the attested or to the registered men, and he took me back to his original statement that he referred to all concerned. The inference of the House—I think rightly—was that the Government had in preparation plans for the conscription of the man-power of this country in the event of an emergency. As we know from the last War, if you are thinking in terms of the armed Forces alone—and by that term I include the police—you must have military and industrial conscription as regards manpower. There can be no half-way measures, as we found out by experience during the last War. Speaking for myself, I hope that the Government will not leave this matter to be haggled over and boggled over, but will give the House a full-dress Debate at the earliest possible moment.
  11.18 p.m.
  Captain Evans: As I was in a small way responsible for this storm in a teacup, perhaps I might be permitted to explain to the House what I understood from my right hon. Friend's reply. I endeavoured to raise a very small issue, regarding the claims of the Defence Departments as against the claims of the civil Departments in appealing for man-power in times of peace. I understood my right
  1794
  hon. Friend to explain that if certain young men had offered their services to the civil Departments in times of peace, the Government of the day, when war broke out, must of their own accord, in accordance with the view of the House of Commons, as expressed on that occasion, be free to review the position of those men, in view of the situation facing the country at the time.
  11.19 p.m.
  Mr. Ede: I am afraid that the right hon. Gentleman has forgotten the way in which he reproved me for not having accepted his original statement and told me when I repeated it that he had tried to make it as plain as he could. He went a great deal further than the hon. and gallant Gentleman has said. The hon. and gallant Gentleman is like the greyhound who has bitten the electric hare that he was supposed to be chasing. He is beginning to regret the position in which he has placed his right hon. Friend. I merely want to ask the right hon. Gentleman one specific question, and so that there may be no misunderstanding I shall ask it in one sentence: In "age and capacity" does the right hon. Gentleman include ability as a munition worker?
  11.20 p.m.
  Mr. Davidson: I would ask the Minister to reconsider the position from the point of view that, if plans are completed with regard to even one or two sections of defence which affect the civil population, those schemes should be placed before the House. I am sure that not only the Minister himself but his right hon. and hon. Friends, despite the continued support of the Noble Lord who still retains one Government position at least, must feel very uneasy. As representing very important sections of the community, I think the Minister should understand that, if there are plans complete, if he has definite policies with regard to the coordination of certain defences that affect particular sections of the community, it is his duty to lay those plans before the people affected by them. It is wrong for the Minister, in order to vindicate his own position, to say, in view of the criticism that comes from his own side, that schemes are complete, and then, when those schemes are inquired into to ascertain the rights of the people, to say that they will only come up in time of emergency. I think it is felt in all quarters

  1795
  of the House that schemes which will affect the lives of these people ought to take in the entire resources of the community, and I do not think that the House of Commons will tolerate part-time schemes affecting only particular sections.
  I am sure that the news that Members have received to-night has come as a great surprise. If any plans are completed, what is the real reason for not detailing them? I think we should have a reply on this part of the policy with regard to labour, and I would ask the Minister for a reply on that point. If he does not intend to reply, he might ask the Patronage Secretary on behalf of the Government at least to give us some inkling of the Government's plans. I am chiefly concerned with Scotland, and the way in which the Minister's plans affect the Scottish people. If the Minister thinks that he can come forward at the last moment with some scheme about which no one knows anything, and which no one on the Front Government Bench can amplify, and that it will be as accepted immediately by Scottish workers, he is making a great mistake. It is bad management for any Minister to believe that he can come forward at the last moment with proposals such as that and put them before the workers of this country.
  As one who is anxious to see the Minister making progress, who desires to see the true co-ordination of all our efforts in one Minister capable of that particular job, I would ask the Minister to tell us what he intends to do in future. I do not think it is right that on a question such as this we should receive the statement we have had from the Minister. The right hon. Gentleman has been very good in stonewalling on this particular subject. It may be good Parliamentary tactics for Ministers of other Departments to stonewall Opposition criticism, but I suggest that it is not good Parliamentary tactics and not good patriotism, that the Minister, despite continual requests from all sections in the House, should stonewall and give very inadequate replies. I would ask the Minister to consider, in view of to-night's Debate, coming forward honestly and straightforwardly. I believe his difficulty is that he is an honest man trying to do his best in the company he
  1796
  is in. I believe his intentions are good, but that he is pulled this way and that, and that he is afraid of making a definite statement. I ask him to forget the chiefs of staff and the surroundings he is in, and say, "Here am I, the Minister for the Co-ordination of Defence, these Members, representing many constituents, are entitled to a fair statement of the Government's policy, and I am going to tell them honestly what the policy is"; or what I believe to be more to the point, that he should tell us that the Government have no policy.
  11.27 p.m.
  Mr. Leslie Boyce: It would be entirely misleading to the country if it went from this House to-night that my right hon. Friend has made any important pronouncement in regard to conscription. The alarm that hon. Members opposite are trying to engineer—it has been obvious to everybody who has listened to the Debate—has been a false alarm from start to finish. The Prime Minister has said categorically that we shall not have conscription in this country in time of peace. Lord Baldwin said that in the event of war we might have to pass legislation which would give us some form of conscription. We have been reminded by hon. Members opposite that Lord Baldwin said that the form of conscription might have to be on a broader basis than in the late War, when we were forced to have conscription.
  All that my right hon. Friend has said to-night is that he is getting on with his job and considering what forms of legislation will be necessary in the event of this country going to war. The suggestion that the country is going to be alarmed to-morrow because the right hon. Gentleman has said that he is getting on with his job and doing what Lord Baldwin said would have to be done, and what our present Prime Minister has said would have to be done, namely to give consideration to these different forms of legislation— such a suggestion as that is utterly fantastic.
  Adjourned accordingly at Twenty-nine minutes after Eleven o'Clock.

  KINGSTON BY-PASS (LIGHTING).
  KINGSTON BY-PASS (LIGHTING).
  WEST INDIES (ECONOMIC CONDITIONS).
  WEST INDIES (ECONOMIC CONDITIONS).
  NORTHERN RHODESIA (LOANS AND GRANTS).
  NORTHERN RHODESIA (LOANS AND GRANTS).
AGRICULTURE.
  LAND DRAINAGE (RIVER OGMORE).
  LAND DRAINAGE (RIVER OGMORE).
  MUTTON AND LAMB (PRICES).
  MUTTON AND LAMB (PRICES).
  WHEAT ACT QUOTA.
  WHEAT ACT QUOTA.
  ALLOTMENTS, NOTTINGHAM.
  ALLOTMENTS, NOTTINGHAM.
  LAND FERTILITY SCHEME.
  LAND FERTILITY SCHEME.
  FISHERY PROBLEMS RESEARCH, MIDLANDS.
  FISHERY PROBLEMS RESEARCH, MIDLANDS.
EDUCATION.
  JUNIOR AND INFANT SCHOOLS.
  JUNIOR AND INFANT SCHOOLS.
  SCHOOL BUILDINGS (COST OF MATERIALS).
  SCHOOL BUILDINGS (COST OF MATERIALS).
  VOLUNTARY SENIOR SCHOOLS.
  VOLUNTARY SENIOR SCHOOLS.
  TERRITORIAL ARMY ASSOCIATIONS (LAND PURCHASE).
  TERRITORIAL ARMY ASSOCIATIONS (LAND PURCHASE).
  WOMEN FACTORY WORKERS (MATERNITY).
  WOMEN FACTORY WORKERS (MATERNITY).
  AIR-RAID PRECAUTIONS.
  AIR-RAID PRECAUTIONS.
  IMPERIAL TELEGRAPHS.
  IMPERIAL TELEGRAPHS.
  INLAND WATER SURVEY.
  INLAND WATER SURVEY.
  COASTAL PRESERVATION.
  COASTAL PRESERVATION.
  RATES.
  RATES.
ELECTRICITY SUPPLY.
  RURAL AREAS, WALES.
  RURAL AREAS, WALES.
  COAL CONSUMPTION AND PRICES.
  COAL CONSUMPTION AND PRICES.
  ROYAL NAVY (OFFICERS' RETIRED PAY).
  ROYAL NAVY (OFFICERS' RETIRED PAY).
  UNDERTAKINGS (PROFITS).
  UNDERTAKINGS (PROFITS).
TRADE AND COMMERCE.
  IRON AND STEEL INDUSTRY.
  IRON AND STEEL INDUSTRY.
  POWER ALCOHOL PRODUCTION (REVENUE CONTROL).
  POWER ALCOHOL PRODUCTION (REVENUE CONTROL).

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor informed the House, that he had received from the Senior Registrar in Bankruptcy a certificate that Hardinge Goulburn, Earl of Halsbury, was on the 29th day of April, 1938, adjudicated a bankrupt.

ROAD HAULAGE WAGES (No. 2) BILL.
Brought from the Commons; read 1a; and to be printed.
WEST SURREY WATER BILL. [H.L.]
Returned from the Commons, agreed to, with an Amendment: The said Amendment considered and agreed to.

COAL BILL.
House again in Committee (according to Order):
[The EARL OF ONSLOW in the Chair.]
Third Schedule:

THIRD SCHEDULE.
PROVISIONS AS TO COMPENSATION PAYABLE UNDER SECTION SIX OF THIS ACT.
PART III

  VALUATION.
  Claims and Valuation Proceedings.
  II.—(1) …
  (4) When the Regional Valuation Board have settled a draft of their valuation of a holding they shall give notice thereof in the prescribed form to the claimant, and, if the valuation relates to subsidiary coal hereditaments within the meaning of Section six of this Act, to the Commission, and, if the claimant, or, in the case aforesaid, the Commission, so require in the prescribed manner and within the prescribed period, the Board shall give him or them an opportunity of being heard by a person experienced in the valuation of minerals or in the management of mineral estates, or in the case of a claimant, in person, and where in the case aforesaid a hearing is required either by the Commission or the claimant the Board shall give to the other of them also an opportunity of being heard as aforesaid. The said notice
  716
  to the claimant shall contain an intimation of his right to be so heard.
  12.—(1) …
  (6) In the case of a valuation that relates to subsidiary coal hereditaments within the meaning of Section six of this Act, the foregoing provisions of this paragraph shall have effect subject to the following modifications, that is to say—
  (a) …

PART IV.

  >PAYMENT AND DISPOSAL OF COMPENSATION.
  Payments on account.
  19.—(1) At any time before the vesting date, or after that date but before the relevant certificates have become conclusive under paragraph 17 of this Schedule, the Commission, if they are satisfied that the compensation for any holding, or the aggregate of the compensation for a number of holdings to which the same person is entitled, will be not less than a particular amount, may make payment of such sum not exceeding that amount as they may think fit on account of the compensation for the holding or holdings: Provided …
  (3) A payment on account made under this paragraph before the vesting date, together with interest thereon for the period between the date on which the payment is made and the vesting date at the rate of three pounds per cent. per annum less Income Tax at the standard rate, shall be treated in account as a payment on account of the capital of the compensation made on the vesting date, and the said interest shall be deemed for all purposes, including the purposes of the Income Tax Acts, to be paid on each anniversary of the date of the payment on account that occurs before the vesting date and on the vesting date.
  Disposal of compensation as between beneficial interests.
  20.—(1) Subject to the provisions of this paragraph the compensation paid in respect of a holding and the income thereof shall be held and disposed of for the benefit of the persons whose interests are comprised in the holding and their successors in title respectively, in such manner as to confer on them the like benefits, so far as may be, as they would have had from the premises in which the holding subsisted and the income thereof if they had not been acquired by the Commission.
  (2) In the case of a holding that could have been sold as mentioned in sub-paragraph (a) of paragraph eighteen of this Schedule under powers conferred by the Ecclesiastical Leasing Acts, the compensation paid in respect thereof and the income thereof shall be held and disposed of, and the said Acts shall have effect, in like manner as if the compensation had been money paid to the Ecclesiastical Commissioners upon a sale under the said Acts of the premises in which the holding subsisted:
  Provided that if the holding was a reversion and the rent reserved by the lease was subject,

  717
  by virtue of a scheme in force under the said Acts, to a direction for the payment thereof to the Ecclesiastical Commissioners for the benefit of their common fund, the direction shall have effect in relation to the income of the compensation as it had effect in relation to the rent.
  21. Where a payment on account under paragraph 19 of this Schedule is made on a date before the vesting date, then, as between the persons interested in the capital and income respectively of the compensation, the income accruing before the vesting date from the investment of the sum paid shall be set aside as capital.
  LORD MIDDLETON LORD MIDDLETON moved to insert the following new paragraph:
  11.—(1) In the case of any holding in respect of which an apportionment of rent is prescribed under Section ten of this Act the regional Valuation Board shall make the apportionment as soon as may be after notice of registration in relation to the holding has been given to them under the last preceding paragraph and shall give notice thereof in the prescribed form to the claimant, to any persons intervening, and to the lessee (which expression for the purposes of this paragraph means the person who at the valuation date was liable to pay the rent to be apportioned).
  (2) Within the prescribed period after service upon him of the notice of apportionment the claimant or any person intervening or the lessee may give notice in the prescribed manner to the Board of Trade that he claims to have the apportionment referred to and determined by the High Court and if any such notice be given the apportionment shall be so referred and determined in accordance with rules to be prescribed.
  The noble Lord said: Certain Amendments to Clause 10 were accepted by the Committee last time we met, and the two Amendments that now stand in my name appear to be necessary to supplement the provisions of the new Clause 10 as it stands at present. I do not know how far it will be accurate to say that the Amendments are consequential on the altered condition of Clause 10, but they would appear to be corollary to the clause in its new form. Perhaps it would serve a useful purpose if, quite briefly, I were to go into the procedure in regard to claims and valuations that will take place. Within the prescribed time an owner must give notice that he intends to make a claim. In due course he is provided with a certificate of the registered particulars of the coal in question. The claimant must then take in an estimate of the valuation of his holding. The Regional Valuation Board arrive at a draft valuation, which is served upon the claimant, who, if he differs from the Board, has a
  718
  right to be heard by them. The Regional Valuation Board then arrive at their final decision, and if the claimant still has points of difference, then he has a right of appeal to the referee.
  Unless the Schedule is amended, it would appear that the claimant, in taking in his estimate of valuation, would not know what apportionment of rent had been made by the Regional Valuation Board in accordance with Clause 10. The estimate of value by the claimant therefore might be on one basis and the valuation of the Board might be on a totally different basis. The result, it is easy to see, might be an immense number of appeals to the referee. This Amendment is intended to obviate that possibility, and its object is to throw upon the Valuation Board the obligation of making the apportionment required by Clause 10 immediately after the receipt of the notice of registration, and to serve it not only on the claimant but also on any person intervening, and on the lessee. I would stress this service on the lessee, because the lessee under a mineral lease is also entitled to receive notice of the apportionment, as the apportionment of his obligation under the lease under which he holds the minerals would appear to be a matter in which he is vitally interested, and his comments would undoubtedly be of value to the Regional Board.
  The next part of the Amendment deals with the right of claimants, the intervening parties or the lessees to appeal to the High Court. As Clause 10 stands at present it would appear that any matters of difference in regard to valuation are referred to the referee, but any questions in regard to apportionment are dealt with by the High Court. My next Amendment, on page 65, line 38, to add certain words to sub-paragraph (2) of paragraph 11, seeks to provide that the time limit within which an estimate of value must be delivered by the claimant shall run from the date of the service of the notice requiring delivery or the date when the apportionment has been finally settled, whichever is the later. I have tried to be as brief as I can, and I hope that I have made the intention of the Amendments clear. I think they improve the machinery, and I hope they will serve to reduce the number of appeals to referees and save time and considerable expenditure. I beg to move.
  Amendment moved—
  Page 65, line 21, at end insert the said new paragraph.—(Lord Middleton.)
  THE LORD CHANCELLOR (LORD MAUGHAM): This Amendment raises, as I understand it, two very different questions. The first, to which I am afraid I must make a somewhat uncompromising opposition, raises the question whether the lessee shall be a party to a proceeding in which an apportionment of rent is made as between two people who are entitled as landlords—for instance, the Commission, who are going to be landlords of the mines, and the landowner who is going to be landlord of the surface. It does not seem to me to be right or expedient, or likely to save cost to have the lessee there. It is only necessary that he should know that, instead of paying x pounds a year to A, he has now to pay a smaller sum to A and the balance of the total sum, whatever it may be, to B. So long as he knows what he has to pay to the two, and the total amount payable does not exceed what he had to pay before, it does not seem to us in the least relevant to consider precisely how that sum is apportioned. It is an apportionment of a sum which he owes to one or the other, and the sum of the two must amount to not a penny more than he had to pay before. Accordingly, as regards the presence of the lessee, the view taken on behalf of the Government is that the lessee is not properly a party to the valuation.
  LORD MIDDLETON: I wonder if I have not made myself clear. I did not suggest that he should be present, but that he should receive a notification at the beginning of the proceedings. I did not suggest that he should be present anywhere.
  THE LORD CHANCELLOR: I am afraid then we have misunderstood the object of the Amendment in that respect—that the notice of the claim to all persons intervening is intended to be a notice which entitles them to appear—but if all the noble Lord wishes is that the lessee shall have notice of the result of the apportionment, which is a thing with which he is concerned, I think it ought to be provided for. I think it has been rather assumed that he would get such a notice, but I see no reason why it should not be made perfectly clear.
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  In that case it is notice of the result of the proceedings, and that he certainly should have, because he has to know what he has to pay to A and B, A being the Commission and B the owner of the surface. There is no difficulty in that, and I am prepared to meet the noble Lord.
  The other point is this, that as the matter stands the apportionment made by the Valuation Board has the degree of finality proposed by the new Clause 10, which the House has already approved, and as to that there is a question whether some Amendment of that course might not be proposed. It is undesirable, I think, in such a case as an apportionment of rent, that there should be any large expense involved. The noble Lord is probably aware that in a large number of existing leases, where there is a lease of the surface and of the minerals, the lease itself contains a separate rent for the minerals and for the surface. Therefore in those cases there is no difficulty; but I agree that there may be cases of difficulty, and there may be cases in which the persons concerned, the owner of the surface and the person who is going to become the owner of the surface, might wish some other tribunal than the Valuation Board to settle the matter.
  The best suggestion I can make, without at the moment pledging the Government to it, is that it might be proper to introduce at the appropriate place a provision that the owner should have an option to go before the Commission for the purposes of the apportionment, or should have a right to go to arbitration. But it should be observed that the position suggested, that there may be both a proceeding before the Commission and, as I understand it, an apportionment subsequently by the High Court, is a cumbrous proceeding, which will involve the landowner in a good deal of costs. It would be, I think, much more satisfactory, in a case which is not a very complicated one, to have a decision once for all.
  If the noble Lord cared to move on another stage that the landowner ought to have the option which I have mentioned—when I say "landowner" that is intended to be a short way of stating the claimant or any other person intervening—the Government would be very

  721
  glad to consider it, and as at present advised I do not think it would be an unreasonable course. The Coal Commission will probably have enough to do, and will be quite glad to have a certain amount of relief in respect of apportionment in difficult cases, but in the vast majority of cases it would be perfectly easy, partly because the apportionment is already done in the lease and partly because in numerous cases there can be no doubt of the rent payable in respect of the surface, being something which can be readily ascertained. That is the proposal which I make. The Amendment in its present form I am unable to accept.
  LORD MIDDLETON: May I ask one question? If I understood the Lord Chancellor aright he is saying that in these difficult cases the matter should be referred to arbitration rather than to the Court.
  THE LORD CHANCELLOR: I was suggesting to the noble Lord that the landowner, or persons intervening, if agreed, should have the option either to go before the Coal Commission, and if they do to accept their finding, or to the arbitrator, and in that case accept the arbitrator's finding. I do not want two bites at this very small cherry. That is all I suggested.
  LORD MIDDLETON: I am prepared to accept that. I will withdraw my Amendment, and reconsider the matter before the Report stage.
  Amendment, by leave, withdrawn.
  THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE)THE PRESIDENT OF THE BOARD OF EDUCATION (EARL STANHOPE) moved, in sub-paragraph (4) of paragraph n, after "Act," to insert "or to coal or a mine of which a person is entitled to require a lease to be granted to him under Section twelve of this Act." The noble Earl said: This is really, in a sense, consequential on the last Amendment on the Paper, which stands in my name. Your Lordships will see that there it is proposed that the freeholders of coal should be left in the same position after the passing of this Bill as they are in to-day. The result of that is that they have no incentive to see that the valuation is properly made and need not take trouble about putting in all the full particulars. Therefore, to safeguard the
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  situation, it is proposed that these words should be inserted to say that the Coal Commission shall have the right of appearing before the Regional Valuation Board if they have reason to think that me of the particulars perhaps have not been put in which ought to have been put in. I think the Amendment only gives to the Coal Commission the opportunity to do what we believe to be necessary.
  Amendment moved—
  Page 66, line 10, after ("Act") insert the said words.—(Earl Stanhope.)
  LORD HASTINGS: In this sub-paragraph the words are:
  "When the Regional Valuation Board have settled a draft of their valuation of a holding they shall give notice thereof in the prescribed form to the claimant, and, if the valuation relates to subsidiary coal hereditaments within the meaning of Section six of this Act, to the Commission, and, if the claimant, or, in the case aforesaid, the Commission. …"
  Should it not be "to the Commission also"? There are certain ambiguities, it appears to me, in the words that follow after that. I would suppose that the claimant would be given particulars of his valuation of subsidiary coal hereditaments just as he would of his valuation of principal coal heraditaments, but it does not say so.
  EARL STANHOPE: I think my noble friend is right, though I am not quite sure. Perhaps he will leave it over till Report.
  LORD HASTINGS: I will with the greatest pleasure. I will put it down on Report.
  EARL STANHOPE: Another slight Amendment would be necessary in the next line; it would now be necessary to say "cases aforesaid," and not "case aforesaid."
  VISCOUNT HORNE OF SLAMANNAN: I am very glad to acquiesce in the proposal now made on the ground that we have now arrived at agreement in principle upon what ought to be said in Clause 12. I take it that the words which the noble Earl is proposing on Clause 12 are subject to such Amendments as we may think necessary to propose upon the Report stage, if there is any variation of words which would better satisfy the meaning at which I think we have both arrived?
  EARL STANHOPE: It will certainly be open to the noble Viscount to propose Amendments on the Report stage, either of substance or verbal Amendments.
  On Question, Amendment agreed to.
  EARL STANHOPE EARL STANHOPE moved, in subparagraph (6) of paragraph 12, after "Act," to insert "or to coal or a mine of which a person is entitled to require a lease to be granted to him under Section twelve of this Act". The noble Earl said: This is a similar Amendment to the last and allows the Coal Commission to appear before a referee if a case should be put to the referee.
  Amendment moved—
  Page 67, line 35 after ("Act") insert the said words.—(Earl Stanhope.)
  On Question, Amendment agreed to.
  LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, in sub-paragraph (1) of paragraph 19, to leave out "before the vesting date, or after that date but before the relevant certificates have become conclusive under paragraph 17 of this Schedule" and insert "before or after the vesting date." The noble Lord said: Paragraph 19 of this Schedule has to do with payments on account. As the Bill stands it gives discretion to the Commission to make payments on account at any time before the vesting date, or after that date but before the relevant certificates have become conclusive under paragraph 17 of this Schedule. It seems to me there is no reason why the discretion of the Commission to make payments on account should be limited in that way. After the relevant certificates have become conclusive an interval will elapse before payment must be made, and what I desire to secure by this Amendment is that the discretion of the Commission to make a payment on account during that period shall not be limited.
  I imagine that as the Bill stands it is clear there can be no payment on account after a certificate is conclusive. It may be very important for the royalty owner to receive a payment on account, possibly in order to satisfy demands under mortgages. I think in any case an interval must elapse after the relevant certificates have become conclusive, even if there is no dispute. But I imagine that the whole matter might be held up by a dispute. For those two reasons—the fact that in any case there is an interval, and
  724
  that in certain circumstances of litigation there might be a long interval—it seems only reasonable that the Commission's discretion to make payments on account should be unfettered. There is nothing mandatory about it; it simply gives the Commission the discretion, which I think your Lordships will agree they ought to have. This point was raised in another place, and on the assurance of the Minister in charge of the Bill that the point would be looked into, the Amendment was withdrawn. I have no doubt that since then the Government have had the opportunity of examining the point, and if the noble and learned Lord cannot give way I shall be glad to know the reason why the words cannot be put in.
  Amendment moved—
  Page 72, leave out from ("time") in line 26 to ("the") in line 28 and insert ("before or after the vesting date").—(Lord Balfour of Burleigh.)
  THE EARL OF MUNSTER: This paragraph is required only to enable the Coal Commission to make payment on account before the payment of compensation is due; that is to say, after the vesting date and before the certificate of valuation has become conclusive. As soon as the payment becomes due the Commission can of course pay either part or whole, and I am advised that it really does not need the insertion of a special paragraph.
  THE EARL OF DUDLEY: That does not quite answer my noble friend's question, because he pointed out that under paragraph 17 (1) (a), in the case of dispute the High Court may by interim order direct the Commission to suspend the payment of compensation on the basis of the certificates sent. That dispute may take some time, and meanwhile why should not the payments on account continue over that period? It may mean that the claimant will go without his conclusive certificate or payment on account for a very considerable period, and I cannot see the reason why it should not be extended beyond the period in doubt.
  LORD BALFOUR OF BURLEIGH: The noble Earl the Leader of the House told us a day or two ago that the inclusion of half a dozen extra words was a matter of real importance so far as printing and stationery are concerned. This Amendment is much simpler and clearer and saves at least a line and a half. I hope that argument will please the noble Earl.
  THE LORD CHANCELLOR: I am not sure that the noble Lord has quite appreciated the first two lines of paragraph 19. The risk is not that there may be a period after the vesting date and before the relevant certificate has become conclusive, because this paragraph authorises payments on account at any time before the vesting date, or after that date but before the relevant certificates have become conclusive. So that, supposing there is an appeal or something of that nature, with the result that the relevant certificate has not become conclusive, the clause will apply and the Commission can pay sums on account. But after that moment when the certificate is conclusive and the vesting date has come, there is a debt due from the Commission to the owner of the coal. The Commission can be sued for it, and they are bound to pay. There may be a moment of time, so to speak, before they actually do pay, but you may be quite sure that not only will they want to pay, but if they cannot pay the whole debt when it is due, they will be most anxious to pay as much as they can. But you do not want an Act of Parliament to say that a man who owes a debt should pay half of it if he can. Here we are dealing with a debt due, and you do not want to say they may pay half, three-quarters, or all of it; they are bound to pay the whole of it. Therefore you do not want the Amendment.
  LORD BALFOUR OF BURLEIGH: Is it not the fact that the Commission have to give three months' notice in writing? I was under the impression there was a three months' gap. If there is no gap after the relevant certificate has become conclusive, then of course I at once agree with the noble and learned Lord, but if there is a gap they ought to have discretion.
  THE LORD CHANCELLOR: I agree with the noble Lord, but the gap has only reference to payments on account before the vesting date, except by consent. It was thought that if you are asking a person to take payment on account before the vesting date has arrived, you ought to give him three months' notice. He might say, "I would rather have the money now," in which case he takes money on account. But the gap does not apply after the vesting date. The Commission owe the money, and there is no
  726
  doubt they ought to pay at once if they can.
  LORD BALFOUR OF BURLEIGH: I thank the noble and learned Lord for his explanation, and I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  EARL STANHOPE EARL STANHOPE moved, in sub-paragraph (3) of paragraph 19, to leave out "all purposes, including." The noble Earl said: These words were put in in another place but they went too far. What is intended here is that the interest shall be treated as capital for purposes of Income Tax and Surtax so that tax has not to be paid on that interest. The words "for all purposes" go too far, and might put the person who received the payment in a difficulty in regard to other claims made upon him, possibly by those who have settlement claims and so on. Therefore it is thought, in the interests of the person who receives the payment, that these words "all purposes, including" should be left out and that the provision should apply only to Income Tax and Surtax.
  Amendment moved—
  Page 73, line 10, leave out ("all purposes, including").—(Earl Stanhope.)
  On Question, Amendment agreed to.
  LORD DARCY (DE KNAYTH)LORD DARCY (DE KNAYTH) moved, at the end of sub-paragraph (3) of paragraph 19, to insert "and shall be treated for the purposes of Income Tax and Surtax as a charge upon and a proper deduction from income." The noble Lord said: The noble and learned Lord has very kindly explained to me the position in regard to this matter. As regards the words "substantial justice requires," we are in complete agreement. There is, however, some scope for argument as to the effect of the actual words in the Bill, and I think the noble and learned Lord agrees with me in regard to that. There is a further matter. The noble and learned Lord also considers there is scope for some improvement in the words of my Amendment, and I am in complete agreement with him in that. I beg to move.
  Amendment moved—
  Page 73, line 13, at end insert the said words.—(Lord Darcy (de Knayth).)
  THE LORD CHANCELLOR: These paragraphs are, as every one will agree, not easy to understand. The view of the Government is that sub-paragraph (3) on

  727
  page 73 carries out the intention and precludes the sum which is to be treated as capital being a sum in respect of which the recipient is to be liable for the purposes of the Income Tax Acts. But, as I am all in favour of clarity, I should be willing if the noble Lord will substitute for the words he wants to add at the end of line 13, these words which I will now read out:
  "and accordingly shall be treated as a proper deduction from income."
  If he will substitute these words for the words which he has in his Amendment, we shall be ready to accept the Amendment, and that will finish off Schedule 3. Then we can get rid of that, and to some extent relieve the Report stage.
  LORD DARCY (DE KNAYTH): In these circumstances I beg leave to withdraw my Amendment and thereafter to move in the form suggested by the noble and learned Lord.
  Amendment, by leave, withdrawn.
  LORD DARCY (DE KNAYTH): I beg to move the Amendment suggested by the Lord Chancellor.
  Amendment moved—
  Page 73, line 13, at end insert ("and accordingly shall be treated as a proper deduction from income").—(Lord Darcy (de Knayth).)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS had given Notice of an Amendment to leave out sub-paragraph (1) of paragraph 20. The noble Lord said: I put this Amendment on the Paper before the noble and learned Lord put down his Amendment completely altering the character of paragraphs 20 and 21. My purpose in putting the Amendment down was to enable me to discuss the difficult situation which will arise in such cases as will happen when the compensation payments made are only sufficient to meet the mortgage charges and the capital required to be set aside for the amount of annuity and so forth. As the noble and learned Lord has put down an Amendment to deal with the whole paragraph, I would prefer, if the Committee will allow me, to await his explanation of the new paragraph, which is exceedingly difficult to follow. Therefore I will not move my Amendment, but take leave to debate the question on the noble and learned Lord's Amendment.
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  That would be the more convenient course, and, in point of fact, if I were to speak to my own Amendment and press it to a Division, it would not really help me in achieving what I desire. It was only put down as a means of asking questions and raising debate.
  THE LORD CHAIRMAN: Perhaps I ought to explain, in regard to the next Amendment standing in the name of the noble and learned Lord, the Lord Chancellor, that the Question I will put will be to leave out paragraph 20 only in the first place, because the noble Lord, Lord Cromwell, has an Amendment on the Paper at the end of paragraph 20, and in addition to that the noble Earl, Lord Dudley, has three Amendments as follows, as Amendments to the Amendment by the Lord Chancellor:
  In sub-paragraph (5), line 8, after "shares" to insert "or the ordinary, preferred, or deferred or other stock or shares";
  in sub-paragraph (5), line 11, after "United Kingdom" to insert "or the Legislature of any British Dominion, Colony, State or Dependency";
  in sub-paragraph (5), line 14, leave out "five" and insert "three."
  THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out paragraphs 20 and 21, and insert:
  "20.—(1) The compensation for a holding when paid by the Commission to the person entitled to receive it from them, including any sum paid on account thereof under the last preceding paragraph, and the income thereof, shall, in order to its being applied as compensation to the persons whose interests are comprised in the holding, be held and disposed of for the benefit of those persons, or their personal representatives or assigns, in accordance with the succeeding provisions of this paragraph.
  (2) In the case of a holding that consists of or comprises an estate or other interest subject to a settlement within the meaning of the Settled Land Act, 1925, or to a trust for sale the proceeds whereof are subject to a settlement by way of succession, the trustees of the settlement or the Court, and in the case of the Court on the application of any beneficiary under the settlement, may require and cause the compensation, or the part thereof attributable to that estate or other interest, as the case may be, to be laid out, invested, accumulated, and paid in such manner as, in the judgment of the trustees or of the Court, as the case may be, will give to the beneficiaries under the settlement the like benefit therefrom as they might lawfully have had from that estate or other interest, or as near thereto as may be, regard being had, when the circumstances so require, to the fact that that estate or other interest was property of a wasting character:

  729
  Provided that—

  (a) where a payment on account of the compensation for the holding has been made under the preceding paragraph before the vesting date, the net income accruing to the trustees before the vesting date from the investment of the sum paid up to an amount sufficient to make good to the capital of the settlement the interest on that sum brought into account under the last preceding paragraph against the capital of the compensation, shall be set aside as capital of the settlement;

  (b) subject as aforesaid no part of the income of the compensation shall be required or caused by virtue of this subparagraph to be set aside as capital of the settlement.

  (3) In the case of a holding that comprises an estate or other interest subject to a mortgage, the compensation (other than any part thereof that is attributable to an estate or other interest not subject to the mortgage) shall be held and disposed of in like manner as if it had been money arising under a power of sale conferred by the mortgage.
  (4) In the case of a holding that could have been sold as mentioned in sub-paragraph (a) of paragraph eighteen of this Schedule under powers conferred by the Ecclesiastical Leasing Acts, the compensation paid in respect thereof and the income thereof shall be held and disposed of, and the said Acts shall have effect, in like manner as if the compensation had been money paid to the Ecclesiastical Commissioners upon a sale under the said Acts of the premises in which the holding subsisted:—
  Provided that—

  (a) if the holding was a reversion and the rent reserved by the lease was subject, by virtue of a scheme in force under the said Acts, to a direction for the payment thereof to the Ecclesiastical Commissioners for the benefit of their common fund, the direction shall have effect in relation to the income of the compensation as it had effect in relation to the rent; and

  (b) where a payment on account of the compensation for the holding has been made under the preceding paragraph before the vesting date, the net income accruing before the vesting date from the investment of the sum paid shall be set aside as capital of the compensation.

  (5) Money representing compensation attributable to an estate 01 other interest subject to such a settlement as is mentioned in sub-paragraph (2) of this paragraph, or vested in trustees on or for charitable, ecclesiastical or public trusts or purposes, may, notwithstanding anything in the relevant trust instrument, be invested not only as authorised by law or by the trust instrument but also in or on the debentures or debenture stock or the preference or wholly or partially guaranteed stock or shares of any company incorporated by a special Act of, or provisional order confirmed by, or by or under a Public General Act of, the Parliament of the United Kingdom, or incorporated by Royal Charter, being a company which has paid dividends upon its ordinary capital at the rate of at least three per cent. per annum for at least the five years next before the time of investment (of which fact a letter purporting to be signed
  730
  by the secretary of the company or by a banker or member of a firm of bankers or by the secretary or manager of a joint stock bank or of any branch thereof shall be sufficient evidence):
  Provided that the power conferred by this sub-paragraph—

  (a) shall not extend to any stock shares or securities to bearer or subject to any liability for calls or other payments; and

  (b) shall be exercisable subject to any consent that would have been requisite if the money had been proposed to be invested as authorised by law or by the trust instrument.

  (6) Subject as aforesaid the compensation for a holding and the income thereof shall be held and disposed of in such manner as to confer on the existing owners whose interests are comprised in the holding, their personal representatives or assigns, the like benefits so far as may be, as they would have had from their respective interests in the premises in which the holding subsisted if those premises had not been acquired by the Commission."
  The noble and learned Lord said: As Lord Hastings has pointed out, this Amendment is of an elaborate character and to some extent, at any rate, may be thought to alter the provisions of paragraph 20 as it stands in the Bill; but the substance of it is really the same, only the circumstances which may arise when compensation has to be divided up as between diverse beneficial interests are so complex that it is very desirable, not perhaps so much when the case goes before the Court, but when the case is settled without application to the Court, to state with the greatest possible care the principles on which that compensation should be disposed of. I hope I am not saying anything I ought not to say when I add that I have taken the greatest care, with the advice of people who are eminent in their particular spheres, in connection with the draft of the Amendment so as to state all the various circumstances, as far as I could, which have to be taken into account in making this division. Perhaps your Lordships will allow me to say this at this stage. The noble Lord, Lord Cromwell, has a somewhat elaborate provision, the subject of the next Amendment, where, apparently as the result of very considerable care, he has put down the species of Amendment which he thought was proper, but I think in reference to the old paragraph and not the new one. Without desiring to anticipate anything which Lord Cromwell may say, I was interested to see that his Amendment to a very large extent was identical in substance with the Amendment which stands on the Paper in my name and the

  731
  name of the noble Earl, Lord Stanhope. I was proposing to take one or two passages from his Amendment and, on the Report stage, to put them in this present elaborate Amendment standing in my name and that of the noble Earl, Lord Stanhope, in order, as far as humanly possible, to get a perfect clause stating the circumstances that have to be taken into account on the division of compensation in these circumstances.
  What we have done is this. In subparagraph (1) we state the general principles on which the compensation is to be divided. It may, of course, be paid to a person absolutely entitled to receive it or it may be paid to persons entitled other than the original person; for instance, there may be a person who has a charge, or there may be, unfortunately, a death, and some of the compensation may go to personal representatives. That is all general and there is no difficulty. That has been separated from sub-paragraph (2), because (1) does not relate to settlements and sub-paragraph (2) does relate to settlements, and here we get a very complex state of things in certain circumstances. There may be a settlement within the meaning of the Settled Land Act, 1925, in the ordinary way, or there may be, after the legislation of 1925, a settlement by way of a trust for sale, because there is a statutory trust for sale, or there may be a statutory or other trust for sale and a provision with regard to the proceeds of the sale which go by way of succession to various people. Then the trustees of the settlement or the Court—and, in the case of the Court, on the application of any beneficiary under the settlement—may require the compensation to be laid out, invested, accumulated and paid in such manner as in the judgment of the trustees or the Court, as the case may be, will give to the beneficiaries under the settlement just the same benefit and interest, or as near thereto as may be, as they might have had before the operation of this Bill.
  Then there are provisos that where a payment on account is made—I should mention this because, inferentially, it deals with another Amendment that stands on the Paper—before the vesting date (I am not sure that that ought not to be before the vesting date or before the relevant certificates have become conclusive).
  732
  "the net income accruing to the trustees before the date from the investment of the sum paid, up to an amount sufficient to make good to the capital of the settlement the interest on that sum brought into account under the last preceding paragraph against the capital of the compensation, shall be set aside as capital of the settlement."
  That carries out almost, I think, exactly the Amendment which your Lordships are going to have read to you in due course. Then, subject to that, no part of the income of the compensation shall be required or caused by virtue of the sub-paragraph to be set aside as capital of the settlement. Sub-paragraph (3) says that in the case of a holding that comprises an estate or other interest subject to a mortgage, or charge, the compensation is to be disposed of as if it had been money arising under a power of sale conferred by the mortgage. Then I must state quite frankly to my noble friend Lord Hastings, that the Government take the view that if there is a mortgage on the property the mortgagee must be paid. There is, unfortunately, no possible method known to legislation or the law under which a mortgagee who has a debt secured on property shall not be paid from the property in priority to the mortgagor.
  There follow, in sub-paragraph (4), provisions which relate to the Ecclesiastical Leasing Acts with which I think I need not trouble your Lordships because they have been agreed, as I understand, with the Ecclesiastical Commissioners. Then (5) relates to investment. We have thought it right to authorise investments on terms substantially wider than those permitted to trustees under the Settled Land Act, 1925, or under other General Acts of that character, and substantially wider than is usual in regard to persons who hold money substantially as trustees and who have a Special Act. What we propose to add to the ordinary law in this respect is that we propose that investment should be authorised in debentures or debenture stock, or the preference or wholly or partially guaranteed stock or shares of any company incorporated by a special Act of, or provisional order confirmed by, or by or under a Public General Act of Parliament, or incorporated by Royal Charter, being a company that has paid dividends upon its ordinary capital at the rate of at least 3 per cent, per annum for at least the five years next before the time of investment.
  There is a provision with regard to evidence of that, and then we exclude, as everybody would wish to exclude, the stocks to bearer which occasionally lead to disastrous consequences when they are held by trustees, and stocks which are subject to liability for calls. We are also dealing with the question of consent, because in many investment clauses there is provision for the consent of the tenant for life or somebody of that character—that the power shall be exercisable only with his consent—and we make that apply also to investments made under sub-paragraph (5), subject to the compensation for a holding, and the income is to be held and disposed of as far as possible so as to confer on the existing owners the like benefits as they would have had if the premises had not been acquired by the Commission. There are some things in the Amendment of the noble Lord, Lord Cromwell, which in my view make the matter clearer. Therefore I propose on behalf of the Government to assent to those parts of his Amendment which I think are not included in the Amendment which stands in my name. It will be for him to say whether he would like on the Report stage these things to be included or not. I would not want in the least to bind him at the present moment.
  That is the general effect of the proposed new paragraph 20 on page 73. It is more elaborate and it will occasion a little bit more in printing. The comment by my noble friend Lord Balfour of Burleigh must therefore be considered as affecting my conscience. I cannot help it. I have thought it absolutely essential to provide for a paragraph which will really make the matter reasonably clear to any person or any Judge who has to fulfil the task of dividing up the compensation. It will be for the noble Earl, Lord Dudley, to move his Amendments and I shall have some difficulty in assenting to them because I think they go too far. However, it would be premature to deal with that now. I hope that the explanation I have given is a sufficient one for the purpose of my noble friend Lord Hastings, and if there is any other question which he wishes to ask on this elaborate Amendment I can only say that I will do my best to answer him.
  Amendment moved—
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  Page 73, line 21, leave out paragraphs 20 and 21 and insert the said new paragraph.—(The Lord Chancellor.)
  THE LORD CHAIRMAN: I will put the Question that paragraph 20 stand part of the Bill, leaving aside paragraph 21 in order to save the Amendments of the noble Lord, Lord Cromwell. The noble Earl, Lord Dudley, has handed in three Amendments to the proposed Amendment.
  THE EARL OF DUDLEY: Is it time for me to move them?
  THE LORD CHAIRMAN: That is the usual course. If the Amendment to the Amendment is negatived then we can take the Amendment.
  THE EARL OF DUDLEY: I beg to move the manuscript Amendments which have been read by the Lord Chairman. As the noble and learned Lord, the Lord Chancellor has told your Lordships, they make the provisions of sub-paragraph (5) in his Amendment rather wider. There was an Amendment standing in my name after Clause 7 which referred to the investment by trustees of compensation moneys. I thought at first that it was covered by the Amendment of the noble and learned Lord, but I find that my Amendment was a good deal wider in that I proposed that the investment should apply to ordinary shares and stocks of companies and not limited, as it is in the Amendment of the noble and learned Lord, to
  "debentures or debenture stock or the preference or wholly or partially guaranteed stock or shares of any company incorporated by a special Act of, or provisional order confirmed by, or by or under a Public General Act of, the Parliament of the United Kingdom, or incorporated by Royal Charter,"
  and so on. I do feel that it is only fair and right that compensated royalty owners should be given the opportunity of making up the loss in income which they will have to suffer by investing these moneys in the ordinary shares and stock of companies.
  The royalties have been assessed at a 7 per cent. risk. The Greene Committee, as we know, applied the 7 per cent, table to them and regarded them as a 7 per cent. risk. We have been told frequently during the course of these debates that royalties are a wasting asset and can by no means be regarded in the same category

  735
  as a gilt-edged investment. Therefore it does seem rather illogical to narrow down the investment range of the trustees of the compensation money to debentures and stocks which cannot possibly give anything like the yield of 7 per cent. on which the valuation was made. I feel that they ought to be allowed to invest in ordinary stocks or shares. As the Bill at present stands the royalty owners would be precluded, for instance, from investing compensation money in the ordinary shares of the colliery company engaged in working the coal which was lately their property. They could not, either, purchase a partnership in a well-established business, which I maintain they ought to be allowed to do. I hope that the noble and learned Lord will see his way to give the matter further consideration. I make a very earnest appeal to him to consider the matter further and see whether he could not possibly widen the power to the same extent as I propose in the second part of my Amendment—that is, to widen the power of investment from the United Kingdom to Colonial and Dominion stock as well.
  The third part of my Amendment is to provide that the investment should be limited to a company which has paid a dividend upon ordinary capital at the rate of at least 3 per cent. per annum for at least the three years next before the time of investment, instead of five years as in the Amendment of the noble and learned Lord. I think three years is the usual time in these cases and five years is a little too long. I hope I shall have your Lordships with me, because I think that you will agree that it is only right that compensated royalty owners who are suffering a great loss of income should be able to make up that loss in this way and turn the compensation money to better account than they are likely to do under the noble and learned Lord Chancellor's Amendment.
  Amendment to the proposed Amendment moved—
  In sub-paragraph (5), line 8, after ("shares") insert ("or the ordinary, preferred, or deferred or other stock or shares").—(The Earl of Dudley.)
  THE LORD CHANCELLOR: I confess that I wish I could consent to this, but it would be contrary to all proper dealing with trustee stocks. The Amend-
  736
  ment which the noble Earl wishes to make would include shares in all sorts of companies which are really by no means satisfactory investments. There are many companies at the present time which have paid over 3 per cent, interest for over three years, and which pay at the present time a far greater dividend than 7 per cent. There are many, against which so far as I know nothing can be said, which pay over 10 per cent. On the Stock Exchange they are not considered to be investments that can safely be relied upon to go on making that payment. In other words, they are considerably worse than any ordinary investment in coal and would provide for the tenant for life a far larger rate of interest.
  When dealing with trustee stocks it is necessary for the legislator, so far as he can, to permit only investments which, if not absolutely gilt-edged investments, are such that there is a reasonable probability of their being regarded as permanent investments, which will not result in any very large loss of capital at any time. In those circumstances, much as I should like to increase the scope of the investments mentioned in sub-paragraph (5) of this paragraph, I cannot see how we are to do it without letting in investments which are wholly unsuitable for trustees. If I could, I would, and if between now and Report stage the noble Earl will think of something which is almost certain, an investment such as trustees might use for trust moneys and yet will not include in its scope something that might normally be described as a wild-cat investment, I should be very happy to accept it. The present Amendment, however, I am unable to accept.
  THE EARL OF DUDLEY: I would not of course dream of arguing with the noble and learned Lord in regard to the law and what is fit and proper for trustees to do. But I should like to point out that under the provisions of both Amendments the trustees in the name of the tenant for life are prevented from making a wild-cat investment. They are not, for instance, allowed to invest in a Russian oilfield, or anything of that sort, because the provisions do not permit them to do so. Of course I am not going to press this Amendment, but I hope that the noble and learned Lord will consider, between now and Report stage, whether there is not any possibility of widening the

  737
  powers of trustees in this respect. It would save to a great extent the hardship which the royalty owners feel in having to suffer this loss of income. With regard to loss of capital, of course almost any investment runs, that risk, particularly gilt-edged, in these days. I hope the noble and learned Lord will look into the matter, because I feel that it is necessary to do justice to the royalty owners.
  THE LORD CHANCELLOR: I shall be only too glad to look into the matter, and I hope the noble Earl himself will look into the matter and perhaps produce some Amendment which can be accepted.
  THE EARL OF DUDLEY: I am very grateful to the noble Lord, and I beg leave to withdraw the Amendment.
  Amendment to the proposed Amendment, by leave, withdrawn.
  LORD HASTINGS: I was very glad to refrain from speaking to my own Amendment until after the noble and learned Lord had spoken to his, because the explanation of the very complicated provisions which that Amendment contains has been helpful, not only to myself, but also to the Committee in general. It is quite evident that the Amendment standing in the noble and learned Lord's name deals with, or deliberately omits to deal with, three specific points. It deals with the case of the trustees, of a tenant for life who, in the interests of the tenant for life, would desire to seek a wider range of investments than is now permitted. It deals also to some extent with the case of the trustees for an annuitant or other person with a charge upon the estate, and it deliberately omits to deal with the third case, which is that of the mortgage, when a corporation, individual or firm has a mortgage charged, in the main, not upon income but upon the minerals themselves. I think I am right in saying that it is the intention of the Amendment to deal with these three points, or to omit to deal with one of them.
  THE LORD CHANCELLOR: Not to omit to deal with one. Paragraph 20 (3), at the top of page 4 of the Order Paper, deals with the case of mortgages. Is anything more wanted?
  LORD HASTINGS: It does in a sense, but as I read it, it says that nothing can be done in the matter.
  THE LORD CHANCELLOR: That is true.
  LORD HASTINGS: It deals with it in that sense. That, of course, is strictly accurate. In the case of an annuity or other form of charge upon mineral income, it appears that the Amendment intends that either the trustee of the settlement or a beneficiary can move the Court into determining a proper division of the compensation moneys. That meets what appears to me to be a very grave risk, not fully but to a reasonable extent. A number of cases have come to my personal notice in which the trustees for the tenant for life in some cases, the absolute owner himself in other cases, are fearful that when their compensation moneys are paid over to them—taking the average basis of fifteen years' purchase, of course, because no man can tell at the moment actually how many years' purchase he will receive—the charges upon the estate of which they are trustees, or absolute owners, as the case may be, may absorb the whole of the compensation money. There are certain cases in which that will inevitably and unquestionably occur. In how many cases it will occur, it is impossible for me or for any one else, I think, to say. It would be very useful if we could say. But quite clearly the Mineral Owners' Association has no means of ascertaining the facts, and I doubt whether there is any organisation or authority who has any means of ascertaining the facts. The only persons who might conceivably be able to do so would be the Special Commissioners for Surtax, but I doubt whether they would ever do it, because so many of these cases come below the Surtax-paying level and therefore outside the purview of the Special Commissioners.
  It is not the larger owner but the relatively smaller owner who is endangered by the provisions of this Bill. The public have been brought up to believe that all royalty owners are persons of great wealth, which is absurd. Although it is granted that some few are, there are a very large number of persons deriving a few hundred pounds a year from mineral income who are almost entirely dependent upon that income, and it is those persons who have been agitating to find out how their case can be met. If you have compensation money paid over on the basis of fifteen years' purchase, which will mean about half the capital sum when related to present income, and you have a mortgage combined

  739
  with charges which will absorb the whole of it, then of course the nominal owner of the minerals who is receiving the compensation will be left penurious. It is a very serious situation. It is a social question, of course, and one which requires the greatest thought by the Government. The noble and learned Lord has told us that neither he nor the Government see any way of meeting the case in this Bill. I am sure the noble and learned Lord would not have said that unless it were strictly in accordance with fact. Of course I clearly do not suspect anything of the kind. But, acknowledging that it is impossible to put it into this Bill, that does not mean that the Government are really immune or, shall we say, free from some responsibility for what must result in a certain number of cases. What will happen in three and a half years' time, when the vesting date comes along and a substantial number of persons are driven into the Bankruptcy Court who say: "I am not bankrupt through any fault of mine; I have been deprived of half my resources by the action of His Majesty's Government; I am a bankrupt, and the people who have made me a bankrupt are His Majesty's Government"? What is to be done about it?
  No noble Lord on that side of the House would like to hear that sort of thing said. Think of the consequences to the country. Here, this unhappy Bill has made enough enemies for the Government already, in all conscience. How many more will it make if cases of this kind develop in any number? There may be relatively few mineral owners, relatively few persons up and down the country affected by the Bill at all, but they are, in the majority of cases, people of some influence, people upon whom this Government are dependent for good will in the constituencies, and they are very essential from a practical point of view. You cannot deliberately, with your eyes open, go and drive your own supporters into the Bankruptcy Court. Surely it ought to be possible, in consultation with the Treasury, to provide that there shall be a sum set aside for meeting all hard cases, so that persons placed as I have envisaged they will be placed will be able to go to the Court and apply for additional aid—that is what it will come to. I do not think you can allow this Bill to pass out of this House
  740
  and pretend, ostrich-like, that those cases are not going to occur. It is a matter which has got to be dealt with, and I have not been able to devise, of my own drafting, an Amendment which I could apply to this Bill. The noble and learned Lord told us that it is impossible, and I accept it as a fact; but of course it is not impossible to provide some sum, supplemental, let us say, to the subsidiary hereditaments sum, for which these persons shall have leave to apply when their case is of a kind which definitely requires relief, to prevent them from sliding into the condition of penury which this Bill will otherwise push them into.
  With regard to the matter of annuities, and so on, although it is difficult to understand, I think probably I have an obligation to be satisfied with the endeavour which the Government have made to see to it that the whole of the compensation money, or an unfair share of the compensation money, is not taken away by the trustees for a settlement, leaving the nominal owner of the minerals destitute. That, I am sure, is the intention of the Government in the paragraph, and I could not myself devise a better method than has been adopted. With regard to the point on which Lord Dudley was not entirely satisfied, but on which the Government gave us clearly to understand that they were not able to give way, tenants for life will be anxious that there shall be a wider scope for trustees' investments. Others, the remaindermen, may take a different view of the matter. I am not disposed to intervene in that. The Government have a certain responsibility which they cannot give away. They are responsible for this particular thing, and cannot afford to extend the scope of trustee investments further. That is reasonable, and I am not disposed to contest what the noble and learned Lord has said.
  To revert once more to the question of mortages, I say that the Bill cannot leave this House until some sort of provision is made for the cases of hardship which are bound to result, to the immense disadvantage of the good name of this Government, and also in contravention of ordinary equity, in itself an extremely important matter. I therefore make an appeal to the Government that they should endeavour on the Report stage to think out some means by which these hard

  741
  cases may be provided for. Really I should be disposed to treat the matter so seriously that, if nothing finds its way into the Bill, I shall move the rejection of the Bill on its Third Reading. I do not propose to disagree with the Amendment on the Paper. I am grateful for it, but it does not go far enough.
  EARL STANHOPE: May I say that we have looked into the cases which the noble Lord quotes, and we have done our best to meet them as far as possible. I think he recognises that to deal with the question of mortgages means the raising of additional public money, and that, as the noble Lord knows, is not within the purview of this House, but would have to be done in another place.
  LORD HASTINGS: The noble Earl, the Leader of the House, and the noble and learned Lord are in a far better position than I am to approach the powers that be, who control affairs in another place, to see whether something can be done with their consent.
  LORD CROMWELL: May I ask a ruling from the Lord Chairman as to when I shall have an opportunity of speaking on my Amendment?
  THE LORD CHAIRMAN: I am entirely in the hands of your Lordships, but the procedure I suggested was that we should leave out paragraph 20 and then, if your Lordships agree, put in the Amendment of the noble and learned Lord. Then come the two Amendments of Lord Cromwell which will be taken in the ordinary course. After that the noble and learned Lord can move the omission of paragraph 21, as consequential on his Amendment.
  On Question, Amendment to leave out paragraph 20 and insert the proposed new paragraph agreed to.
  LORD CROMWELL LORD CROMWELL moved to insert the following new sub-paragraphs in paragraph 20:
  "(3) For giving effect to the provisions of sub-paragraph (1) of this paragraph—

  (a) In any case in which an acquired interest was at the valuation date settled land within the meaning of the Settled Land Act, 1925, or vested in trustees upon trust for sale, or vested in a personal representative, and the compensation is not paid into Court, the trustees of the settlement or the trustees for sale or the personal representatives, as the case may be, may and

  742

  (b) In any such case as aforesaid, or where the compensation is paid into Court, or to trustees appointed by the Commission pursuant to sub-paragraph (c) of paragraph 18 of this Schedule, or in any other case, the Court may, on the application of any person interested in the compensation,

  require the compensation to be laid out, invested, accumulated and paid in such manner as, in the judgment of the trustees, the personal representative, or the Court, as the case may be, may be, proper regard being had

  (i) to the terms of any settlement trust, or power affecting the acquired interest or the proceeds of sale thereof, and

  (ii) where the acquired interest is at the valuation date comprised in a subsisting coal-mining lease, to the terms of such lease, including the amount of any minimum rent payable thereunder, and to the amount of any undergetting of coal by the lessees thereunder, and

  (iii) in the case of unopened or unworked mines of coal, and coal, to the date on which working of the coal might reasonably be expected to commence or to recommence, and

  (iv) in all cases to the period within which the coal might reasonably be expected to be worked out, and to all other relevant circumstances.

  (4) All applications to the Court under this paragraph shall be made, in accordance with Rules of Court, to the Chancery Division of the High Court of Justice.
  Provided that the powers of the Court may, as regards compensation payable in respect of an acquired interest comprised in a holding situate in the County Palatine of Lancaster or the County Palatine of Durham be exercised also by the respective Courts of Chancery of those Counties Palatine, and, where the amount of the compensation does not exceed the sum of £500, the powers of the Court may be exercised by any County Court within the district whereof is situate any part of the holding.
  Provided also that any application in respect of compensation paid into Court shall be made to the Court into which the same is paid."
  The noble Lord said: I am very much obliged to the noble and learned Lord for the compliment he has paid me in saying there was something of substance in my Amendment. I would particularly like to thank him for the very generous way in which he has treated me over this matter. I do not know quite whether I should at this stage inform your Lordships that I am prepared to withdraw my Amendment, or whether I may be allowed to say a few words and ask the noble and learned Lord to say a few words in reply. Then I shall be very happy to withdraw my Amendment. If I may be allowed, I want to put three points. The first is whether the noble and learned Lord is satisfied that his

  743
  Amendment, with the addition of some of what appears in my Amendment, inserted on the Report stage, will cover this point, whether sufficient pressure will be put upon the trustees to make an apportionment. Of course it is not intended that the jurisdiction of the Court should be taken away. But I should like to be satisfied that in his clause as it will appear on Report there will be sufficient pressure placed on the trustees to make an apportionment if they can, because I think the trustees will, from the very nature of things, fall back on the Court to make a decision if they possibly can.
  I presume that the principle of the apportionment is based on a section of the Lands Clauses Act, 1845, and with the utmost respect I would say that some of the decisions given by His Majesty's Judges have not proved very satisfactory to those concerned. There was a case in which a tenant for life was given in addition to his income an amount arrived at by dividing the compensation by the number of years required for working out the coal. In the very short term which was left for the coal to be worked out it will work out very well in that case for the tenant for life, but in the case of some who have coal for, we will say, three or four hundred years, and who are only getting fifteen years' purchase, it will work out very much in the opposite direction. There is just one final point. Does the noble and learned Lord think that some clause should be inserted whereby tenants for life receiving such apportionment in addition to their income should not be absolved from paying Income Tax and Surtax on those amounts as, in the nature of things, they are capital?
  Amendment moved—
  Page 73, line 42, at end insert the said new sub-paragraphs.—(Lord Cromwell.)
  THE LORD CHANCELLOR: The position of the trustees in such a case as the noble Lord refers to must depend upon the particular circumstances of the case. There may be a good many cases in which the trustees, either with or without an opinion of counsel, can readily determine how the compensation money is to be distributed, and I think it is almost impossible to put in this paragraph any definition of the cases in which the trustees can act with or without the
  744
  opinion of counsel, and where the opinion of the Court may be desired. So that while I cannot say that there is anything in the clause which stands in my name and I think there is nothing in the noble Lord's Amendment which really brings pressure to bear upon the trustees in such a matter, they have to act reasonably, having regard to the circumstances of the case. That is all I can say with reference to that. In the other respects I am not quite sure that I understand the noble Lord's question. The provision with regard to tax is dealt with in the new paragraph 20, sub-paragraph (2) (a), and that seems to me to go as far as can properly be done. Anything more drastic than that might receive much opposition from the Chancellor of the Exchequer. What we have done here, I venture to think, is a fair compromise in regard to settling what income shall be set aside as capital, if paid on account before the date of vesting. Regarding the noble Lord's other question I am afraid I was not quite able to follow exactly what was needed, but perhaps the noble Lord, if he has any query to make on which I can satisfy him, would be so good as to make it after these proceedings are over, and I shall be very glad to help him as far as I can.
  LORD CROMWELL: I am very much obliged, and I beg leave to withdraw. My only wish is to ensure as far as possible that litigation shall not be entered into except in very exceptional circumstances.
  THE LORD CHANCELLOR: May I add that I presume, if Lord Cromwell approves of the suggestions I have made, he will move on the Report stage certain Amendments to the new paragraph 20 which I venture to think to some extent improve that paragraph, and make it clear as to what the Court or the trustees have to consider.
  Amendment, by leave, withdrawn.
  Amendment moved—
  Page 74, lines 1 to 6, leave out paragraph 21.—(The Lord Chancellor.)
  LORD DARCY (DE KNAYTH)LORD DARCY (DE KNAYTH) had on the Paper an Amendment in paragraph 21, to leave out "shall be set aside as capital" and insert "up to an amount equal to any sum set off against compensation in respect of interest on such payment on account in pursuance of subparagraph (2) of paragraph 19 of this

  745
  Schedule shall be set aside as capital and as regards any balance thereof shall be treated as income." The noble Lord said: I would take the opportunity of thanking the noble and learned Lord for meeting us in this matter. He has incorporated the point we had in mind in that long Amendment which he has just moved, and therefore I do not move.
  On Question, Amendment agreed to.
  LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved to insert at the end of Part IV of the Schedule:
  "Expenses of Surface Damage Claims.
  23. The Commission shall pay the costs and expenses reasonably incurred by any person after the vesting date in connection with a claim for compensation in respect of damage arising from the working of coal to the land buildings or other property of such person and to which he may be entitled under the provisions of paragraphs 5 and 6 of the Second Schedule to this Act."
  The noble Lord said: This Amendment is one to which I attach very great importance indeed. It is designed to remove one of the minor blemishes from this unhappy Bill, as the noble Lord, Lord Hastings, described it. I must confess I have searched my vocabulary for another epithet which would be more appropriate to the Bill than "unhappy," but I have failed to find anything which would fall within the limits of ordinary Parliamentary usage. This blemish to which I refer is in fact one of the minor blemishes on the escutcheon of this Bill. In any other Bill it would be something very much more than a minor blemish, because it infringes every possible principle of fair play and there are circumstances which I think the Government must admit require attention. I have in mind the very normal position of the royalty owner who is also at the present time the owner of the surface. He is to receive a sum in compensation based upon an elaborate series of calculations, one of which is the deduction from the globular sum of the capitalised amount of expenses. The annual expenses of the royalty owner in management of his minerals is capitalised, and that is deducted as an expense from the global total.
  In the case to which I have referred—the royalty owner who is also the owner of the surface—a proportion of those expenses will be continuing. We will take the case of the royalty owner who
  746
  has let his minerals under a lease which provides for compensation by the lessee in respect of surface subsidence. Nothing will be changed in that respect by the passage of this Bill. The lessee will still be responsible for damages, and the surface owner will still be entitled to that compensation by the lessee. He will still have to take steps to cover it, he will still have to employ a solicitor, very likely a surveyor, and possibly a mining engineer. All these expenses will continue, and yet in respect of them a sum has been capitalised and deducted from the compensation which he is to receive. It is to meet that situation that I beg to move this Amendment. Without developing the matter further, I would just express the hope that the noble and learned Lord will accept it or, if not, that he will tell us in what way he proposes to meet this obvious and glaring injustice.
  Amendment moved—
  Page 74, line 41, at end insert the said new paragraph.—(Lord Balfour of Burleigh.)
  THE LORD CHANCELLOR: The suggestion I have to make to the noble Lord is that this Amendment is so bound up with the consideration of paragraphs 5 and 6, or only one of them, in the Second Schedule, which are to be found on Page 53 and 54 of the Bill, that it would almost be better to postpone consideration of it until we come to deal with these paragraphs on Report. Your Lordships will perhaps remember that I agreed there was something to be carefully considered by the Government in reference to the claim that the Commission should either pay the compensation payable to a surface owner whose land was let down, or should at any rate stand behind the lessee in regard to any such claim. That is the same thing in effect. The question arose of whether that liability, whether it be a liability of the lessee alone or of the lessee and the Commission, was to be determined by action in the Courts or by arbitration. One or the other must be the case, and the consideration which I have to put before the noble Lord is this.
  Supposing there is a man who says he has suffered damage to the extent of £100 in respect of cracks that have been occasioned, let us say, to the wall of his house. What happens in real life is this. The person who is liable to pay, and who does not want to have an expensive

  747
  litigation about nothing at all, when he hears there is £100 claimed, sends his surveyor to look at the damage. He is advised in all probability that £50 would cover it, and he either pays £50 into Court, if it is an action in the County Court or the High Court, or, if it is a matter sent to an arbitrator, he makes an unconditional offer to the claimant to pay him £50 and tenders that amount to the claimant. He offers also to pay the costs up to date, whatever they may be. If he has paid money into the County Court it automatically covers costs up to date if the offer is accepted. That is a normal case, and I am quite sure the noble Lord, though it is true he uses the words "reasonably incurred," does not wish that the Commission should pay costs incurred by a person after the vesting date in connection with a claim for compensation where he has received an offer which turns out to be ample to satisfy his proper claim.
  Something in the drafting of this paragraph will depend upon the course which the Commission think fit to take in reference to paragraph 5 on Page 53 of the Bill. It will be perhaps in a different form if it is an arbitration to that which it will follow if the matter has got to go to the Court. If the House imposes upon the Coal Commission an obligation to pay damages or compensation in respect of any injuries done by a lessee who gets his lease from the Coal Commission, it will necessarily follow that all reasonable costs incurred, except in regard to such cases as I have mentioned, will have naturally to be paid by the Coal Commission. If you make a man a debtor and he does not pay what is lawfully due, and proceedings, whether in the nature of an action or an arbitration follow, the prudent plaintiff or claimant gets his costs unless he has acted in such a way as to deprive himself of them by not accepting a proper offer or not accepting a proper payment into Court. That I think must follow. In other words that rather long sentence is simply meant to say that if the House imposes upon the Coal Commission an obligation to pay compensation, the provision as to costs follows, except it may be as regards some verbal phrase which will depend rather on the nature of the case. In these circumstances I suggest to the noble
  748
  Lord that, though this is a matter that is likely to be dealt with, it is dependent so much on the obligation placed on the Commision that at the moment it is impossible to deal with it effectively.
  LORD HASTINGS: It occurs to me that the Lord Chancellor has carried his mind rather further ahead than the date which was in the mind of my noble friend Lord Balfour of Burleigh. He referred on more than one occasion to where the Commission have given a lease to a lessee. What was in Lord Balfour's mind, and certainly in mine, is the case of a lessee of the present lessor who, of course, if still bound by the terms of that lease to the surface owner. The surface owner is not going to be unfair. These leases are not going to be brought to an end. Royalty rent is going to be paid to the Commission in future and not to the owner of the surface who was, up to the vesting date, the owner of the minerals; but if there is any compensation payable it will be under the lease which the mineral owner has given to the existing lessee. If that existing lessee is contumacious and not found to be agreeable to the payment of reasonable compensation, it is not a question of inducing the Commission to pay the compensation or inducing the Commission to compel the lessee to pay the compensation. The surface owner is the person who is bound to force the lessee to pay the compensation, and it will cost him money.
  As Lord Balfour has pointed put, hitherto these expenses have come out of his normal expenses of management which have been capitalised and deducted, and therefore there is nothing out of which he can meet these managerial expenses which are normal to the management of mineral estates. Lord Balfour's Amendment suggests, not that the Commission shall be in any way responsible for the payment of compensation, not that there should be any interference between the Commission and their lessees when they have lessees, but that the Commission shall be responsible for paying the costs of the surface owner in recovering damages from the lessee who, up to the vesting date, was his own lessee and continues under that lease to be responsible to him for letting down his surface. I think the situation is one which is more narrow than that visualised by the noble and learned Lord, and I beg to support my noble friend Lord Balfour.
  LORD BALFOUR OF BURLEIGH: Before the Lord Chairman puts the Question I think the noble and learned Lord was going to say something.
  THE LORD CHANCELLOR: If your Lordships will allow me, I was going to say that as I understand the Amendment it applies not only to paragraph 5 on page 53 but also to paragraph 6 on page 54. I must admit I did not fully appreciate what the noble Lord, Lord Hastings, says with regard to the cost as it applies to paragraph 5 alone, but as it stands it does apply to both cases. Now with regard to paragraph 6 it is plain that we have not yet finally determined what the position of the Coal Commission is to be, but if we take it only as applying to paragraph 5—that is to say, as applying to existing leases—I must state frankly that at present I cannot agree that the Commission shall in all cases pay the costs which have been occasioned by the improper conduct of a lessee to whom the Coal Commission have not granted a lease, and with regard to whom they have no right of telling the lessee what he has to do.
  As Lord Hastings has pointed out, the Commission cannot affect an existing lease. The lessee can snap his fingers at the Commission, providing he complies with the clauses in his lease and pays the rent thereby reserved. Would it be just or equitable to impose upon the Commission an obligation to pay costs incurred by a lessee who, contrary to the wishes of the Commission, chooses not to comply with the terms of his lease, and not therefore to make the compensation which the terms of his lease require him to make? That would be wholly wrong and unjust. It is for that reason that if this Amendment as it stands is confined to paragraph 5, so to speak, or a claim for compensation to which he may be entitled under the provision of paragraph 5, I confess that I am unable to consent to it. It must be wrong in that form not only because the Commission have nothing in the world to do with it, but also for the reason that I have mentioned, that the refusal of the surface owner may be an unreasonable refusal, and it may involve payments by the Commission for costs although, in fact, the surface owner has brought an action under which he has recovered less than he has been offered or in which, for all I know, it may be that he has recovered nothing at all. I
  750
  have known cases of claims for subsidence where the whole action has been dismissed with costs.
  Your Lordships will remember that in an action for subsidence you have to prove that the defendant has occasioned the damage. In this House quite a short time ago we had an action in which a claim was made for subsidence and it was dismissed. It came from the Court of Session in Scotland, and they had dismissed it because there was nothing really due to subsidence in the case at all. But whether because the claim fails—and as drafted the Amendment means any claim for compensation—or because it is a claim which ought not to entitle the surface owner to costs because he has refused an offer which was made to him, or because—which is more important still as regards paragraph 5—the Commission have had nothing whatever to do with the liability of the surface owner, and nothing whatever to do with the refusal of the tenant to pay what he ought to have paid—for all those reasons together the Amendment is one which cannot, as I submit, be accepted, though when we have decided what the liability of the Commission may be at a later date it may then be that some such paragraph will be of use.
  VISCOUNT RIDLEY: This paragraph seems to me to refer to the normal expenses of management which recur every year, and is not necessarily connected with misbehaviour on the part of the lessee in any shape or form. This is a normal thing under a lease and occurs almost every year. A farm tenant will apply to the lessee for surface damage, and he will always have a reasonable claim adjusted by the machinery which at present exists. There is not in a case of that sort any necessity for arbitration or for any of the two methods suggested as a part of the machinery proposed. The management expenses in this connection consist, not of expenses of going to law to enforce a claim, but of the normal process of having the damage surveyed by an expert, who will state to what extent the damage could be said to be caused by the particular form of working which is going on underneath the property, and the expenses of a surveyor who has to estimate the cost that would be necessary to put the land back to its proper agricultural condition.

  751
  I may be reading this Amendment quite wrongly, but it seems to me what is suggested is this. Expenses of management include the sort of things I have suggested and also another kind of expense which is more a question of the letting of leases and negotiations with coalowners. That class of expense of management will cease, but expense which entails a day-to-day adjustment of matters as between the surface owner and the lessee will continue; yet a deduction has been made from the amount to be paid to the royalty owners of over 4 per cent., which was said to represent, and I think did represent, the total expenditure on all accounts for management expenses. It therefore remains that that part of the management expenses continues, although a deduction of payment is being made in respect of it. It seems to me in that case, if I have read this Amendment aright, it is nothing but reasonable. If in fact the expenses continue and a deduction has been made for them, it is surely only reasonable that an adjustment should be made. The Coal Commission have taken on the responsibility of paying this sum for the royalties, less deductions for management expenses, and it seems to me, therefore, that they should have some liability on account of those expenses. I think the Amendment is an eminently reasonable one.
  LORD CROMWELL: I think the words that have fallen from the learned Lord Chancellor have only accentuated the grave trouble that will arise through the severance of the coal from the surface. I was very surprised to learn, although no doubt it is true, that the Commission are in no way responsible. They have taken over the rents, they have taken over the money which was spent in managing the property, and they in their turn, having taken over all the assets, are not prepared to take over any of the liabilities. It seems to me also strange that, having taken away all the money by capitalising managerial expenses from the original owner of the coal, he should be left to carry on, with a reduced staff perhaps, but with a staff of some sort, to keep in touch with what is going on underneath. There was a very outstanding statement made earlier in the debate, that in fact the surface owner would not be in a position to know, and was not now
  752
  in a position to know, what was going on underneath. Anybody with any knowledge of the coal industry would know that that is absurd. He obviously at the moment knows to the very inch on the map where the coal face is reached, and to know that he employs an expert surveyor. He will still have to go on employing some staff to keep himself in touch with whatever damage occurs. He must be in a position to know how that damage was likely to have been caused. I think that this Amendment is very reasonable and that it should be pressed to a Division.
  THE LORD CHANCELLOR: I think I have been misunderstood. It may be my fault, and that I have not said something sufficiently clearly. In order that I should not be further misunderstood let me say that the Coal Commission are going to stand after the vesting date in the position that is now occupied by the coalowners, the landlords of the existing leases. I have not said, I hope—at any rate, if I did I did not intend to say—that they would not be liable to everything to which the present owners are liable in respect of leases. As landlords they must perform all their obligations as landlords. But this Amendment seeks to put upon the Commission as landlords an obligation which at present rests with the tenants—the existing tenants I am speaking of. These tenants are entitled to do what they think fit under a lease so long as they adhere to the terms of it.
  LORD BALFOUR OF BURLEIGH: No doubt owing to my failure to explain the point the noble and learned Lord still does not appreciate what I am trying to do. This Amendment does apply to existing leases. The noble and learned Lord says that after the vesting date the Coal Commission are going to stand in the shoes of the royalty owners. They are not going to do so in this case, and I am trying to explain why. They are not going to own the surface. They are going to own the coal. The royalty owner is still going to own the surface. The noble and learned Lord said it was unjust to put any expense in this matter on the Commission because they would not have had anything to do with the lease. It is not unjust; it is the essence of fairness. The expense has been deducted from the global compensation and the Coal Commission are therefore paying less than

  753
  they would have paid had that deduction not been made.
  The former royalty owner—in future the surface owner—is going to have a continuing expense. A deduction has been made from what the Coal Commission are to pay. Therefore the surface owner is going to have to pay twice. He must have his agent, solicitor, surveyor and mining engineer to pay, although he has already paid to the Coal Commission—by deduction from the sum he received—for this very expense. I submit that the logic of that is unanswerable. I think it a great pity that the Government cannot say at once that there is a case and that they will meet it. The noble and learned Lord talks about new leases. This deals with existing leases. The case is clear. I appeal to your Lordships to show that sense of fairness which you have hitherto shown, and in the absence of getting satisfaction I must press this Amendment to a Division.
  VISCOUNT HORNE OF SLAMANNAN: May I venture to say one word? I think that the noble Lord has put forward an irresistible argument for making the Coal Commission liable for damage done by a lessee of the coal if the Coal Commission had been in the position of a person to whom the coal had been transferred, say by purchase, where he naturally took the liabilities of the person who previously owned the coal. But the Commission are to take over the coal in totally other circumstances, in circumstances in which a certain amount is being paid to the person who previously owned the coal under deduction of expenses which he in the ordinary course incurred. These expenses were kept alive, so that the result is that the amount he received by way of compensation is less by the amount of the expenses which it was assumed were coming to an end. That was the assumption. But the expenses do not come to an end. The fact is that if you make him pay these expenses which the noble Lord's Amendment seeks to get rid of, he is really paying those expenses twice over. Whoever ought to pay these expenses it cannot be right that this unfortunate royalty owner, who has already paid them in capitalised form, should be compelled to pay them again. I think the Government must find some way of meeting that obligation, whether it is by the Coal Commission paying or by some other body paying.
  754
  May I add this consideration? Under paragraph 5 it seems to me the argument which I have ventured to urge is applicable, but under paragraph 6, where my noble and learned friend the Lord Chancellor has suggested that the obligation for payment of expenses would fall in case of dispute upon the Coal Commission automatically, I think it is possible that there are some expenses which would fall outside what would be awarded by a Court or an arbitrator—for example, the kind of expenses to which the noble Viscount, Lord Ridley, referred—namely, the expenses of a surveyor who goes into the matter. There may never be any dispute at all, but this expense of the surveyor will have been incurred. Again, as I am sure my noble and learned friend the Lord Chancellor knows very well, in a great many cases of dispute, the complainant is compelled to meet expenses which are not allowed in the end by the arbitrator, or perhaps he only gets a portion of them. These are expenses which are ordinarily incurred, and which I am certain went into the figure of deduction by which the global sum was lessened. I hope the Government will take some means of putting the matter right, because it does seem that it would be an act of great injustice to impose these expenses upon a person who has in fact, by their deduction from the global sum, already paid them.
  THE LORD CHANCELLOR: I must express my regret that in the remarks I made on this Amendment I appear not fully to have understood the object of the Amendment. I confess that I thought it was mainly to do with the costs of litigation or of an arbitration which was undertaken by, for instance, a surface owner as against the lessee, being a lessee over whom the Coal Commission have no control. It was not until the noble Lord, Lord Balfour of Burleigh, made his last observations that it became apparent to me that there was something else which was involved which I had not fully understood. I had not appreciated that this question referred to expenses reasonably incurred by a person after the vesting date in connection with a claim to compensation. What I thought was being dealt with was the cost of an actual proceeding in the nature of litigation, as regards which I had a somewhat different view from that of Lord Balfour, as I understand it, and one which I have

  755
  already endeavoured to express. But with regard to the question of these expenses, as the noble Lord has said and as the noble Viscount, Lord Horne, has repeated, I think there is something to be considered by the Government, and as our object is to be perfectly fair, and as it cannot be right to let anybody pay anything twice over, I should be very glad on behalf of the Government to consider that. But I ought frankly to say that it does not mean that the whole of this Amendment as it stands will probably be accepted by the Government. I think the matter will require some further Amendment. All I can say is that the point that Lord Balfour and Lord Horn have mentioned in regard to the expenses, which have already been included, in a sense, in the global sum, or rather, have been reflected in the global sum, will be very carefully dealt with by the advisers of the Government, and we shall endeavour to meet that point on the Report stage.
  LORD BALFOUR OF BURLEIGH: am much obliged to the noble and learned Lord, and I think, in view of what he has been so kind as to say, that the most convenient course to your Lordships will be to put the Amendment into the Bill now, and then the onus will be on the Government to find their Amendment and not on me. It has been admitted, after considerable argument, that there is something in our case, which they would not admit for a very long time. So I suggest that the Committee should agree with the Amendment, and that then the Government should introduce their Amendment on the Report stage.
  EARL STANHOPE: The Government are quite unable to accept my noble friend's suggestion. The normal arrangement, commonly made, is that the Government make an offer to reconsider before Report and then, if the mover does not accept that suggestion, he presses the Amendment. If he wins, he takes the chance of its remaining in the Bill. If he loses, the Government's offer drops.
  LORD BALFOUR OF BURLEIGH: Does the noble Earl mean to say that, if these precise words were not accepted now, he would be a party to enshrining in the Bill what is admitted to be a patent injustice?
  On Question, Amendment negatived.
  Third Schedule, as amended, agreed to.
  Fourth Schedule:

FOURTH SCHEDULE.
Procedure for separation of vested and non-vested premises that are demised together by a subsisting lease.
2.—(1) A person to whom a copy of a draft has been delivered under the preceding paragraph may within six weeks after the delivery thereof serve notice on the Commission of his objection to the terms thereof on the ground that the proposed substituted lease does not comply with the provisions of Section ten of this Act, or that the proposed substituted security or other instrument does not comply with the provisions of the preceding paragraph, as the case may be, and where notice is so served the terms of the draft may be modified by agreement between the parties concerned, and in default of agreement the terms thereof shall be settled by an arbitrator selected by agreement between the parties or, in default of agreement, by the Board of Trade.
LORD TEYNHAM LORD TEYNHAM moved, in subparagraph (1) of paragraph 2, to leave out "Board of Trade" and insert "Lord Chancellor in the case of England and the Lord President of the Court of Session in the case of Scotland." The noble Lord said: I move this Amendment on behalf of my noble friend Lord Gain-ford. For the convenience of your Lordships I might suggest that the further Amendments, one in the Fifth Schedule, page 82, line 36, and one manuscript Amendment in the Sixth Schedule, page 85, line 19, might be discussed together. The purpose of these Amendments is to relieve the Board of Trade of their obligation to appoint an arbitrator. As the Board of Trade can give general directions to the Coal Commission, it would seem more appropriate for the appointment of an arbitrator to be made by an independent authority, as is set down by the Amendment standing in my name. I beg to move.
Amendment moved—
Page 79, line 36, leave out ("Board of Trade") and insert ("Lord Chancellor in the case of England and the Lord President of the Court of Session in the case of Scotland.")—(Lord Teynham.)
THE LORD CHANCELLOR: The Amendment at the bottom of page 8 will, I think, drop, because the Fourth Schedule is bound to drop. Its omission has not yet been moved, but it cannot

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help going out, having regard to the previous Amendments accepted by the Committee. But the similar Amendment to page 82, line 36, in the Fifth Schedule, will be in order.
THE EARL OF DUDLEY: If I might interrupt the noble and learned Lord, there is another manuscript Amendment to the same effect standing in my name, which applies to page 85, line 19, in the Sixth Schedule. The principle is exactly the same, and I should be willing that it should be taken at the same time.
THE LORD CHANCELLOR: Let that be taken, too.
THE LORD CHAIRMAN: I beg the noble and learned Lord's pardon, but that Amendment has not been handed to me.
THE LORD CHANCELLOR: I have not seen it either, but that does not matter; I can follow it.
THE EARL OF DUDLEY: I handed it in.
THE LORD CHANCELLOR: It would seem a matter of no great importance whether one more burden is placed upon the unhappy shoulders of the Lord Chancellor for the time! What I have to submit to your Lordships is that the appointment of an arbitrator, unlike the appointment of a judicial officer of any kind, is an appointment with which, prima facie, the Lord Chancellor is not usually concerned. If it were a question of any sort of judicial officer, it should no doubt go to the Lord Chancellor, but if it is the appointment of somebody who is not a person of that kind, it is thought better, on behalf of the Government, that such a matter should go to the Board of Trade as a proper body to determine the question who the arbitrator should be, and as one which is more likely to be able to do that with success than the Lord Chancellor. As I have said, it is not a matter of great importance, but if the Committee do not agree with me I shall—with a groan!—accept the obligation that is placed upon me. I venture to think, however, that it is not really right and that the Board of Trade is the proper tribunal, or body, to exercise this function.
THE EARL OF DUDLEY: I very much nope that the noble and learned Lord will undertake this responsibility, together with the Lord President of the Court of
758
Session in the case of Scotland. I feel quite certain that it would give a great deal of added confidence m these cases where agreement fails. There is an idea, and the idea, indeed, is not without precedent, that the Board of Trade are apt to appoint a solicitor of their own and not an independent person. I can see no objection from the Government's point of view to the Lord Chancellor, if he is willing to do so, accepting this responsibility instead of the Board of Trade, and I am perfectly certain that it would give a far greater measure of confidence to those whose affairs have to be arbitrated upon in a case of dispute.
EARL STANHOPE: Does the noble Lord move? The Schedule has gone.
LORD TEYNHAM: I understand that the Schedule has gone, so I do not move the Amendment.
THE LORD CHANCELLOR: It has not gone, but it is going in one minute!
THE LORD CHAIRMAN: I asked the noble Lord, and he said he did move.
LORD TEYNHAM: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: I beg to move to leave out the Fourth Schedule. This Schedule necessarily drops out and disappears, because the clause which provided for the Fourth Schedule has already been taken out of the Bill. I beg to move.
Amendment moved—
Leave out the Fourth Schedule.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Fifth Schedule:

FIFTH SCHEDULE.
Lease Consolidation Schemes.
1.—(1) A lease consolidation scheme, and the single lease to be granted pursuant thereto, shall be prepared by the Commission in agreement with the working lessee.
(3) The said lease shall not (except with his consent) impose upon any person any liability not being a liability to which he would have been subject by virtue of a subsisting working lease, or render more onerous whether as regards extent, duration, terms, conditions or otherwise, any liability to which any person would have been so subject.
3. The Commission shall further prepare in connection with a tease consolidation scheme a draft substituted lease, being such a substituted lease as the Commission are authorised to prepare under Section ten of this Act, of the premises comprised in each of the subsisting working leases other than the premises that are to be comprised in the single lease to be granted pursuant to the scheme.
6.—(1) The standard amount of rent in respect of any reversion may be determined by agreement between the Commission and the person for the time being entitled to recover the rent attributable to that reversion, or in default of agreement either the Commission or that person may refer it for determination to an arbitrator selected by agreement between them, or in default of agreement, by the Board of Trade.
9. Copies of a draft substituted lease prepared by the Commission in connection with a lease consolidation scheme under paragraph 3 of this Schedule shall be delivered in like manner as copies of draft substituted leases are required to be delivered under the Fourth Schedule to this Act and the provisions of that Schedule shall have effect as if the draft had been a draft prepared for the purposes of Section ten of this Act, subject to the modification that for the references therein to the vesting date there should be substituted references to the date of the taking effect of the scheme.
11. The costs reasonably incurred in giving effect to the provisions of this Schedule by any person other than the Commission or the working lessee shall be paid by the Commission, and sub-paragraphs (2) and (3) of paragraph 5 of the Fourth Schedule to this Act shall have effect in relation to such costs.
LORD BINGLEY LORD BINGLEY moved to add to sub-paragraph (3) of paragraph 1 "or deprive him of the benefit of any covenant condition or provision of the subsisting working lease affecting or relating to any premises other than coal." The noble Lord said: The Amendment standing in my name was, I understand, moved in another place, as an addition to sub-paragraph (3). That sub-paragraph aims at securing that no liability shall be imposed which is not already existing, and this is merely a suggestion securing that any benefit shall remain which a person already is receiving. It is a small matter, and I understand that the Attorney-General in another place agreed that the point should be discussed and considered. I would therefore like the noble and learned Lord to tell us whether the Government are prepared to accept the Amendment now.
Amendment moved—
Page 81, line 26, at end insert the said words.—(Lord Bingley.)
EARL STANHOPE: The Government are prepared to accept this Amendment, if my noble friend will move it with additional words, so that it will conclude with the words "relating to any premises other than coal or a mine of coal."
THE EARL OF DUDLEY: Will the noble Lord explain the object of this addition?
THE LORD CHANCELLOR: All through the Bill we have used the phrase "coal or mine of coal," because there may be cases where there is a hole or passage in the ground which has not any coal at all in it, but is part of a mine. If the phrase be used throughout, if this Amendment is accepted we had better include the words here.
LORD BINGLEY: I will withdraw the Amendment in order to move it in the form suggested.
Amendment, by leave, withdrawn.
Amendment moved—
Page 81, line 26, at end insert ("or deprive him of the benefit of any covenant condition or provision of the subsisting working lease affecting or relating to any premises other than coal or a mine of coal.—(Lord Bingley.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, to leave out paragraph 3. The noble and learned Lord said: This is consequential. The paragraph is unnecessary, having regard to alterations which have been agreed to.
Amendment moved—
Page 82, line 1, leave out paragraph 3.—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD TEYNHAM LORD TEYNHAM moved, in sub-paragraph (1) of paragraph 6, to leave out "Board of Trade" and insert "Lord Chancellor in the case of England and the Lord President of the Court of Session in the case of Scotland." The noble Lord said: This is the same Amendment as was moved previously, with regard to the appointment of an arbitrator by the Board of Trade.
Amendment moved—
Page 82, line 36, leave out ("Board of Trade") and insert the said new words.—(Lord Teynham.)
THE LORD CHANCELLOR: If I thought there was any general desire on the part of the House that the Lord Chancellor—not myself but perhaps some future Lord Chancellor—should undertake this duty, I should consent at once, but I am not quite sure that your Lordships realty want that, or why the President of the Board of Trade should not be an excellent person to perform this duty. If without a Division I can find out what it is your Lordships want I shall comply.
THE EARL OF DUDLEY: Would the noble and learned Lord reply to the point I put, that this is only to prevent the Board of Trade from appointing their own solicitor?
THE LORD CHANCELLOR: I think it is so unlikely.
THE EARL OF DUDLEY: I understand there is a precedent for that, and there is nothing in the clause which would ensure that the arbitrator was an independent person.
LORD CROMWELL: I should have thought that the Board of Trade would be an interested party because they have to issue instructions to the Commission.
THE EARL OF DUDLEY: The Board of Trade have already given instructions to the Commission, and it seems illogical that they should also appoint the arbitrator.
THE LORD CHANCELLOR: In those circumstances let me say at once that the Government accept the Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out paragraph 9 and insert:
"(3) The provisions of Section ten of this Act shall have effect in relation to a severance effected by the determination of a subsisting working lease under the last preceding sub-paragraph as regards a part of the premises comprised therein, as they have effect in relation to such a severance as is mentioned in that section of the reversion on a lease subsisting on the vesting date, so however that the apportionment of the rent reserved by the subsisting working lease shall be made on the basis of the apportionment made for the purpose of the determination under this Schedule of the standard amount of rent."
The noble and learned Lord said: This is consequential on Clause 10. As your Lordships know, there was an elaborate alteration of Clause 10 to provide for a severance without the necessity for separate leases, where there was a
762
separation of vested and non-vested premises demised by an existing lease. These provisions simply provide for carrying out that arrangement.
Amendment moved—
Page 83, line 17, leave out paragraph 9 and insert the said new paragraph.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph 11, to leave out all words after "paid by the Commission" and insert:
"under and subject to the provisions of this paragraph:
Provided that, in relation to costs payable by virtue of sub-paragraph (3) of paragraph 8 of this Schedule, the provisions of Section ten of this Act shall have effect to the exclusion of the provisions of this paragraph.
(2) In case of difference as to the amount of the costs, other than costs of a reference or award, to be paid under this paragraph, the Board of Trade may direct in what manner they are to be taxed.
(3) An arbitrator may direct that the Commission shall not be liable to pay any such costs as aforesaid, being costs of a reference or award incurred by a party to a reference who appears to the arbitrator to have been guilty of any such unreasonable failure to agree with the Commission or any other party, or of any such negligence or default, as to disentitle him to payment thereof."
The noble and learned Lord said: This is purely consequential on what has already been done.
Amendment moved—
Page 84, line 21, leave out from ("Commission") to end of the Schedule and insert the said new words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Fifth Schedule, as amended, agreed to.
Sixth Schedule [Grant of leases to freeholders in possession of coal immediately before the vesting date]:
LORD TEYNHAM: The Amendment which I move in paragraph 3 is in conformity with what we have done on the last Schedule.
Amendment moved—
Page 85, line 19, leave out ("Board of Trade") and insert ("Lord Chancellor in the case of England and the Lord President of the Court of Session in the case of Scotland").—(Lord Teynham.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The Amendment in my name is purely consequential.
Amendment moved—
Page 85, line 32, leave out ("5 of the Fourth") and insert ("11 of the Fifth").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Sixth Schedule, as amended, agreed to.
Seventh schedule:

SEVENTH SCHEDULE.
AMENDMENTS OF 20 & 21 GEO. 5. c. 34, s. 13.
1. In Section thirteen, after subsection (1) thereof, there shall be inserted the following subsection:
"(1A) The following provisions shall have effect with respect to any scheme submitted to the Board of Trade by the Coal Commission—

(a) the scheme shall provide for the consideration to be given to each of the constituent companies from which property is to be transferred (hereinafter referred to as a transferor company), being given out of the securities of the new company or of the constituent company to which that property is transferred, as the case may be (hereinafter referred to as the transferee company) and not otherwise, and for the amount of the consideration being determined upon the basis of the value at the date of transfer of the property and liabilities of each transferor company transferred by the scheme; the value of the property being assessed at what would have been the value thereof at the date of transfer as between a willing buyer and a willing seller;

(b) the scheme shall determine the classes of securities of the transferee company which are to be given to the transferor companies in respect of the different classes of property transferred to it, and shall make provision for the determination of the amount of the consideration to be given to each of the transferor companies out of those securities, in so far as it is not determined by the terms of the scheme, being finally determined upon principles specified therein, by arbitration or otherwise, after the scheme has come into operation;

2. For subsection (2) of the said Section thirteen there shall be substituted the following subsection:
"(2) In relation to any scheme submitted to the Board of Trade under this section by the Coal Commission, the Act of 1926 shall have effect as if for the proviso to subsection (2) of Section seven thereof and Section eight thereof (which both relate to the consideration of schemes by the Railway and Canal Commission) there were substituted the following proviso, that is to say:
Provided that the Railway and Canal Commission—

(a) shall hear such persons, whether in support of or against the scheme, as they think fit, including representatives of persons employed in any undertakings affected by the scheme; and

764

(b) shall not have power to make, or require to be made, in the scheme modifications inconsistent with any provisions required by the enactments relating thereto to be included in schemes submitted to the Board of Trade by the Coal Commission but subject as aforesaid may make such modifications, if any, as they consider necessary for enabling the amalgamation or absorption affected by the scheme to be carried out upon terms and conditions that are fair and equitable to all persons affected by the scheme, and are calculated to avoid' financial injury to any of the constituent companies and to enable the undertaking of the transferee company to be efficiently carried on; and

LORD TEYNHAM LORD TEYNHAM moved to leave out "and not otherwise" in paragraph (a) in the substituted subsection (1A) in paragraph 1. The noble Lord said: I beg to move this Amendment on behalf of Lord Gainford. With regard to it I would suggest that the further Amendments which stand in my name, page 86, lines 4 and 20, and page 87, lines 20 and 21, might be discussed together. These Amendments are intended to make provision whereby in suitable cases of amalgamation the expropriation of the undertaking may partly or wholly be compensated by a cash payment. The Amendment would have the effect of restoring the power of the Railway and Canal Commission under the Acts of 1926 and 1930, by which under Section 7, subsection (2) of the 1926 Act the Railway and Canal Commission were given power in cases of amalgamation where they considered it fair, and not otherwise, to order that compensation should be paid in cash. I would suggest that it is very desirable that this present power of the Railway and Canal Commission in this respect should not be interfered with. In connection with amalgamation cases there will obviously arise many in which shares in the transferee company cannot provide proper compensation, but if the words "and not otherwise" are allowed to remain in the Bill both the Coal Commission and the Railway and Canal Commission will be precluded from providing for cash compensation, even though there may be no difficulty in finding the cash.
In another place the Minister for Mines has stated that in the case of any particular scheme going before the Railway and Canal Commission, if they come to the conclusion on the facts that unless cash was paid in a particular case it

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would be unfair, clearly they must reject the scheme. It would seem, as the Bill stands, that the Coal Commission are in the unfortunate position that if they produce a scheme of amalgamation which the Railway and Canal Commission decide is inequitable except by cash compensation, they would have no power to proceed any further with the scheme, as they are prohibited from sanctioning a scheme unless it is fair and equitable, so that, while the scheme itself might be a sound one, it would thereby be jeopardised. It is quite clear that cases of amalgamation will arise in which it is proposed to add one or two small undertakings to a larger one, and the larger one would prefer in some cases to pay out the small ones in cash, rather than have to issue shares and possibly have to contemplate a reconstruction of the company. It has been argued in another place that this Amendment might have the effect of forcing a transferor company out of the industry, but my Amendments merely make provision for the Railway and Canal Commission to determine the method of compensation which they consider would be fair and equitable.
Amendment moved—
Page 86, lines 4 and 5, leave out ("and not otherwise.")—(Lord Teynham.)
EAKL STANHOPE: This raises the whole question of the arrangement under compulsory amalgamation, and I am very glad that my noble; friend has suggested that we should have a discussion on the whole situation. The matter was discussed in another place, and it was pointed out that there were considerable difficulties if compensation could be paid in cash. In the first place there was the case where a company has unwillingly to be swallowed up and wishes to remain in the industry. Obviously it would be unfair that perhaps bigger companies should compel it to take cash instead of taking shares and continue in its management of its part of that combined industry. Then there is the other case, where a company might desire to be paid out in cash and might go to the other companies saying, "We desire to have cash." That might cause great difficulties. It might be that none of the other companies had liquid cash available. If it was cash set aside for working expenditure it would cripple them if they had to pay over part of that work-
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ing capital when the amalgamation took place. In other cases it might be necessary for them to go to the public and raise money. Could anything be more difficult than to go to the public and ask them to subscribe capital to put into an amalgamation company if some of the constituent companies themselves refused to go into it and receive shares? Obviously if you went to the market then and said, "Here are certain companies which refuse to go into this amalgamation, but we ask you to come into it as a suitable investment," you would be very unlikely to get the money you required.
For all these reasons the Government felt that the only way really in which amalgamations could proceed would be by each of the constituent companies being asked to take stock in the new company, and not receive cash. I need hardly point out that where an amalgamation is proposed and a company say, "Well, if you pay us out in cash we agree," that would cease to be a compulsory amalgamation, and would simply proceed as a voluntary amalgamation, in which the various constituent parts could make their own arrangements among themselves without any difficulty whatever. Our feeling was that it was partly because this was one of the things that was necessary under the 1930 Act that compulsory amalgamations have been so few and so far between. It was found a crippling condition under that Act, and that was one of the reasons why we did not wish to continue it in this Bill.
VISCOUNT RIDLEY: The noble Earl, the Leader of the House, has put the case very much more clearly than it was put in another place. Reading the Report of the debate there I could find no reason whatever for the Government's position, except that the matter could be put right by the Railway and Canal Commissioners. But in fact it seems that the only power they have is simply to refuse to sanction any scheme if in their opinion it would cause financial injury to any constituent party. The point to my mind is that what is suggested in this Amendment is not that any of the companies which are to be formed into the amalgamated company are to have the right to ask for cash, or part cash and part shares, or that any of the other companies are to have the right to insist that one of the companies

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should be given part cash, but simply that the Commissioners are empowered, in a case where it is found reasonable and necessary, to suggest that it should be partly on a cash basis. That, to my mind, could never be done if it did in fact involve the necessity of the new company having to go into the market to obtain money. Nor could it be done in a case where one of the companies was a small company which did not want to be swallowed up. I am rather at a loss to know why this provision should be left out when it was inserted in the 1930 Act. I have not really heard of any reason which has caused a change in the situation. I do not think that under the 1930 Act any amalgamations have taken place where the provision of cash has been necessary, but it seems eminently fair and reasonable that under certain circumstances that should be possible.
THE EARL OF DUDLEY: The noble Earl says quite rightly that a case might arise where a company was paid out in cash which wished to carry on in the new amalgamated company and it would be an unfair burden upon it not to be allowed so to do. That is quite true. But on the other hand a case might easily arise when it is almost impossible, without imposing great unfairness on it, not to pay it out in cash. A case might arise where the Railway and Canal Commission would have to turn the whole scheme down unless a company were paid out in cash. I feel that there ought to be some provision if necessary for either paying the company out in cash or partly in cash and partly in securities. A case might arise such as this. You might have as a party to an amalgamation scheme a company whose shares were very much more valuable than the shares of the company with which it was proposed it should be amalgamated. Its shares might have been paying a dividend for some years past, and the shares of the company with which it was to be amalgamated had not been paying a dividend. It is possible that the shares of the company with which it was proposed that it should be amalgamated might be worth a quarter or a half what its own shares were worth on the Stock Exchange. In a case of that sort it might be impossible to amalgamate such a company on a share basis without imposing great hardship on it, and perhaps the fairest and simplest
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way would be to pay it off in cash. But if a scheme of that sort were put to the Railway and Canal Commission they might have to turn it down because they had not in fact the power to make a cash payment. I do think this principle wants looking into a great deal more closely before it is finally laid down that a mining company can only be amalgamated on a share basis.
EARL STANHOPE: I do not know if my noble friend thinks that a company would necessarily have to take over exactly the same number of shares in the amalgamated company as it had in its own company. That would be done on a valuation basis, and on the date on which amalgamation goes through these shares would be valued at their price in the market on that day. Therefore, if one set of shares were valued high and the other were valued low, the compensation would be arranged accordingly. The noble Earl is quite right in saying that if injustice were being done through shares being handed over to one of those who were opposing amalgamation, the Railway and Canal Commission would have to turn the scheme down, but frankly I do not see that a payment of cash would be any fairer. If you cannot get a fair basis by handing over shares of a certain value, then probably you cannot get a fair basis by handing over a sum of money. Therefore, the Railway and Canal Commission as the Court concerned would have no alternative but to say: "This is unfair to some of those involved in the amalgamation and therefore we must inevitably turn down the scheme as not being fair to everyone concerned." I do not think that the distinction between stock and cash in that case would make any difference.
THE EARL OF DUDLEY: I do not know that the noble Earl has explained the objection to bringing in the alternative, which I understand was an alternative before, of paying out an individual company in cash if that were found necessary. The noble Earl has admitted that the Railway and Canal Commission might have to turn down a good and reasonable scheme because they did not think it fair to pay off a company in cash in cases where it might be simpler to do so, and I do not quite see the objection to that principle if it were in the Bill before.
EARL STANHOPE: The real objection is that one or other of the parties would object. Either the people being paid in cash would object to taking cash, or the people on the other side would object to paying cash because it might cripple their resources and put the amalgamated company in a difficult position. There is the final case in which every one agrees that cash should be paid. There is just that one case which the Government might be prepared to consider. A normal case would, I think, inevitably become voluntary amalgamation and not compulsory amalgamation, and therefore drops out of the whole of this altogether. The only case that is left is where some company is being compelled to come into the amalgamation and every one concerned would like to pay cash. That is really the only thing not covered by the Bill as it stands that possibly requires amendment. The noble Earl has made a point of that, and I should be very glad to consider that before the next stage if that is the point he is pressing.
THE EARL OF DUDLEY: That is the point I am pressing, and that is the point, I think, the movers have in mind—that extreme case.
EARL STANHOPE: All the Government are really concerned with is that cash shall not be forced on either side against their will. That is the big point as far as we are concerned.
LORD TEYNHAM: In view of that explanation, I beg leave to withdraw.
Amendment, by leave, withdrawn.
THE EARL OF LINDSAY THE EARL OF LINDSAY moved to add to paragraph (a) in the substituted subsection (1A) in the first paragraph:
"and that no scheme shall be submitted to the Board of Trade unless the Commission have certified that the values of the undertakings of the transferor companies at dates specified in the scheme have been so assessed for the purposes of the scheme."
The noble Earl said: The object of this Amendment is to ensure that the values of a transferred undertaking shall be specified in the schemes. This is subject, of course, to the necessary adjustment in respect of changes between the dates of valuation and transfer. As the Bill stands at present, a scheme need only specify the principles, which I suppose means the skeleton, of the arrangement on which
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the valuation may be left to be determined by arbitration or otherwise after a scheme has come into operation. Obviously it would be extremely difficult for a transferred company, who only know after a scheme is drawn up what they are going to get, to go to the Railway and Canal Commission and make objections. They must know exactly where they stand. As showing how important this is, it is necessary to state that very many colliery companies have large numbers of shareholders, and they will naturally be very anxious to know how they stand. They will want to know what they are getting either in the way of ordinary shares or preference shares, and it is obviously most unfair for a scheme to go through before this information is available. Owing to the habit of referring to colliery companies as the coal owners' the impression has perhaps been created that these companies have only a few shareholders, but in the case of a very great number of colliery companies there is a free market in shares on the Stock Exchange and there are a very large number of shareholders, many of whom are people of small means, and it is very necessary that these people should know where they stand.
Another reason why this Amendment should be agreeable to the Government is that it will facilitate, as they desire, amalgamations. It must not be understood that I entirely approve of amalgamations—certainly not compulsory amalgamations, and only to a modified extent voluntary amalgamations. There has been a great deal said about them. I entirely disapprove of what fell from the noble Viscount, Lord Samuel, the other evening when he stated that one of the advantages of amalgamations would be that they would facilitate selling arrangements and prevent undercutting and underselling. They cannot possibly do that because already, as things are, it is impossible for a company to sell an ounce of coal without the approval of the selling agencies set up in the various districts, so that in that respect amalgamations will be of no assistance. As far as amalgamations carried out on a voluntary principle are concerned, if fair compensation is given to those who wish to take part in them, I suppose amalgamation will be all to the good. For these reasons I beg to move.
Amendment moved—
Page 86, line 12, at end insert the said words.—(The Earl of Lindsay.)
EARL STANHOPE: We think my noble friend's Amendment is unnecessary, and if he would look at the beginning of the paragraph he will see also that the words will not do either. What it says is that "the scheme shall provide," and then, turning to his own Amendment, "no scheme shall be submitted to the Board of Trade." Obviously that does not make sense. The Railway and Canal Commission has to be satisfied that a scheme is fair and equitable as between all parties. The only way in which they can do that is by going into the details of each of these companies, seeing what value they have and what prospects they have, and drawing up a scheme and considering a proposal on these lines. My noble friend wants figures put in, and of course figures will be put in, but you cannot put in the final and definite figures until the date of the amalgamation. There is the case of the value of stocks on the market; perhaps you have to take the actual value of each of those stocks on the actual date on which the amalgamation took place, and give them a few more or a few less according to whether the price fell or rose. Someone would also have to take into consideration the amount of coal they had on the premises. You would have to take into consideration the amount of outstanding debts, whether those who bought the coal had actually paid for it and had given cash, or whether there was still an amount due to the amalgamated companies. Therefore all those final details cannot really be settled until it comes to the actual date of the amalgamation itself.
I think my noble friend will realise that the Railway and Canal Commission have put upon them the duty of seeing that all these conditions—the actual value of the stock, the coal, and the price due and so on—are taken into consideration before they can accept this scheme at all. Therefore, every one of the shareholders, large or small, will have almost an exact idea of what he will receive, but he will not have an absolute idea because these matters vary from day to day, and therefore cannot be settled until the date of the amalgamation actually arrives. I hope my noble friend will see that really he is only putting into the Bill what is already a
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duty of the Railway and Canal Commission, and that to suggest that the actual figures should be put in is really not possible because of the sliding scale which he himself suggests it will have to operate.
THE EARL OF LINDSAY: In view of what has fallen from the noble Earl I withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TEYNHAM LORD TEYNHAM moved to add to paragraph (a) in the substituted subsection (1A) in paragraph 1 "and shall provide for the purchase at a price to be fixed in default of agreement by arbitration of any undertaking considering the terms of amalgamation financially injurious." The noble Lord said: I beg to move this Amendment on behalf of my noble friend Lord Gainford. The matters dealt with in this Amendment are somewhat similar to those discussed on the last Amendment, and I suggest that this and the following Amendment on page 86, line 17, in the name of Lord Gainford and other noble Lords, should be discussed together. The objects of these Amendments are very similar to those of the last Amendment. They are to ensure that the valuations of the transferred undertakings are specified in any scheme for amalgamation. It will obviously be impossible for a transferor company to put before the Railway and Canal Commission a case to show that it will be financially interested unless the consideration which it is to receive is specified in the scheme itself when it comes before the Railway and Canal Commission. It would be very difficult for the parties concerned to argue whether their shares in the proposed new company are fair and equitable if they do not know what those shares are going to be.
As the Bill stands at present the scheme of amalgamation need only specify the principles on which the values may be left to be determined by arbitration or otherwise after the scheme has come into operation. I cannot see that there would be any practical difficulty in specifying the amount of the property and the actual consideration to be given in shares which are to be brought into the combined undertaking. It would, therefore, be unnecessary to have recourse to arbitration over this matter after the scheme has

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been confirmed by the Railway and Canal Commission. It has been argued in another place that the shares or stock to be taken over will vary from day to day, and that the amount which will actually be taken over at the time of the amalgamation may differ materially from the amount at the time the scheme was submitted; but, as suggested by the Secretary for Mines in another place, it might be possible to have some sliding scale for determining the varying elements concerned which, of course, may vary between the date of the submission of the scheme and the date on which the amalgamation actually takes place. I do not, however, think that this is any reason why it should not be possible to lay down the precise shares which are to be allocated.
Amendment moved—
Page 86, line 12, at end insert the said words.—(Lord Teynham.)
EARL STANHOPE: This is exactly the same point we have just been considering, except that it goes a little further and makes it a little more difficult. What my noble friend proposes in his Amendment is that there should be submitted to the Board of Trade the actual price that has to be paid—"shall provide for the purchase at a price to be fixed in default of agreement." That of course means absolutely definite figures. Similarly, in the case of the word "specify," that also means quite definite figures, and apart from the actual stocks and shares, as I mentioned just now, there is also the question of the coal and the amount of debts outstanding. One has to take into consideration also the question of the mine itself. It might be that between the time the scheme came up and the time of the amalgamation a fault might appear, or there may have been a fall or a fire; therefore to lay down before the amalgamation takes place exactly what price is to be paid is, I think, quite impossible.
On Question, Amendment negatived.
LORD BALFOUR OF BURLEIGH: The Amendment on page 86, line 17, to leave out "make pro vision for the determination of" and insert "specify," which has been passed over, is in my submission essential to the comprehension of the Bill. I know we have passed it because the noble Lord said it was taken with another Amendment, but if my noble
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friend the Earl of Lindsay will move it we could discuss it. It is merely a drafting Amendment, but it is a very excellent Amendment.
THE LORD CHAIRMAN: I am afraid we have already passed it.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, in paragraph (b) of the substituted subsection (1A), to leave out "or otherwise." The noble Lord said: I move this Amendment on behalf of my noble friend Lord Lothian. My task would have been very much easier if your Lordships had assented to the Amendment in the name of my noble friend Lord Lindsay on page 86, line 17, to leave out "make provision for the determination of" and insert "specify," because the words in the Bill are the most appalling example of Parliamentary drafting I have ever seen. I will read them to your Lordships and you will see that without the Amendment which, unfortunately, we have not made they are almost incomprehensible. Paragraph (b) says:
"the scheme shall determine the classes of securities of the transferee company which are to be given to the transferor companies in respect of the different classes of property transferred to it, and shall make provision for the determination of the amount of the consideration to be given to each of the transferor companies out of those securities, in so far as it is not determined by the terms of the scheme, being finally determined "—
How can the "determination of the amount of the consideration" be finally determined? It makes sense if you substitute the word "specify" for the words "make provision for the determination of." Then it would read—
EARL STANHOPE: On a point of order, I think my noble friend does not realise that we have already gone beyond that Amendment.
LORD BALFOUR OF BURLEIGH: I will speak to the Amendment which I have moved on behalf of my noble friend Lord Lothian. I was trying to explain that it was an error that the Amendment of the noble Earl, Lord Lindsay, to which I have referred, had not been taken, but I must not go into that. The intention of this Amendment is to leave out the words "or otherwise." The point to be determined is the amount of the securities which has to be transferred, and this section says it has to be settled by "arbitration or otherwise" after

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the scheme has come into operation. I want to omit the words "or otherwise." If it had been by arrangement or failing an arrangement by arbitration I could have understood it, but I want to ask the noble and learned Lord what the words "or otherwise" mean in this connection. I think there is something a little bit sinister about the words "or otherwise", because they suggest that if it is not to be arbitration, it is to be something else. Is that the Ogpu method we heard about earlier in our debates, or is it not? It might be quite consistent with the arrangement that the scheme might provide that the compensation should be fixed by a valuer appointed by the Coal Commission. If that were the case, of course justice would not necessarily be done. It is because I think it ought to be by arbitration and not "or otherwise" that I move this Amendment.
Amendment moved—
Page 86, line 23, leave out ("or otherwise").—(Lord Balfour of Burleigh.)
THE LORD CHANCELLOR: I am very sorry that any sinister effect has been attributed to these words. In a case with which I think all your Lordships are familiar a very sinister meaning was attributed to the words "chops and tomato sauce." It really seems on rather the same principle that a sinister motive is attributed to these words. I will say something in a minute about the suggestion that there might be a wholly improper person appointed who would in effect be an arbitrator but would be himself interested in the matter. The words "or otherwise" are intended to cover, so far as I know, only two things which really are not very difficult to understand. One possibility is that the matter may be determined by agreement, by negotiation. Then you do not want arbitration. The other thing that may happen is that instead of arbitration the question may be remitted to the Court to determine what amount of consideration is to be given to the transferor company.
All sorts of things arise on an endeavour to amalgamate in these circumstances—for instance, methods of calculating the valuation of a particular estate, and, of course, there may be all sorts of assets which are concerned here, stock in trade, machinery and subsidiary works, and so on. It may be necessary to deter-
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mine a question of law which may arise as to the meaning of some agreement or obligation imposed upon a particular transferor company. It may be necessary for the Court to determine what amount of stocks or shares, or for all I know debentures, ought to be payable to that company in respect of the particular asset which I have in mind. It may be that the better way of determining that would not be by arbitration but by one of the methods I have been considering. But if it is suggested that a valuer may be appointed who would be interested in the matter, or something of that sort, or who would be so concerned with the matter that he is not a proper arbitrator, it would not help anything to call him a valuer because there is a question to be determined which would make him an arbitrator. I do not think it is right to suggest that in such a case either the Board of Trade or the Houses of Parliament would be likely to consent to a scheme in which some wholly improper arbitrator was appointed to determine how much consideration should be given to one of the constituent companies. I do not think the noble Lord is really pledged to that. Accordingly I would submit, having regard to the explanation I have given as to the words "or otherwise," that my noble friend might think it wise not to press this Amendment.
LORD BALFOUR OF BURLEIGH: I am much obliged to the noble and learned Lord. What troubles me is that the powers of the Railway and Canal Commission to alter parts of a scheme are being very much curtailed. The matter will arise again on the next Amendment which stands in my name, and after what the noble and learned Lord Chancellor has said I will not press this Amendment but will raise the matter on my next Amendment.
Amendment, by leave, withdrawn.
LORD TEYNHAM LORD TEYNHAM moved to add to proviso (a) in the substituted subsection (2) in paragraph 2, "shall not confirm a scheme unless satisfied that it will result in lowering the cost of production or disposal of coal." The noble Lord said: I beg to move this Amendment on behalf of my noble friend Lord Gain-ford. The object is to reimpose one of the safeguards for the consideration of amalgamation schemes which are already

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contained in the Coal Mines Act, 1930. Before proceeding with a full explanation perhaps I might be permitted to remind your Lordships that the Government have agreed to add to Clause 43(2), which refers to the duty of the Coal Commission to reduce the number of coal mine undertakings, these words:
"and such report shall set forth the proposals of the Commission in regard to that area and the advantages which are expected to follow therefrom."
I should like to have the view of His Majesty's Government as to whether these words are intended to provide that the Railway and Canal Commission shall not confirm a scheme unless they are satisfied that it will result in lowering the cost of production or disposal of coal. If that is intended, I shall beg leave to withdraw.
Amendment moved—
Page 87, line 14, At end insert ("shall not confirm a scheme unless satisfied that it will result in lowering the cost of production or of disposal of coal").—(Lord Teynham.)
THE LORD CHANCELLOR: I cannot, I am afraid, give the noble Lord the assurance he requires, because I am unable to agree that no scheme shall be confirmed unless the body considering the matter has come to the conclusion as a matter of evidence that it is certain that it will result in lowering the cost of production or disposal of coal. The position is this. The question whether a scheme will so result is not capable of direct proof. It is a question of weighing all the circumstances—the future course which the coal trade may take, whether the export of coal can continue, the state of trade in the country, and a number of circumstances which I cannot at the moment enumerate but which the noble Viscount, Lord Samuel, if necessary, can tell my noble friend—in an endeavour to ascertain whether a particular scheme will result in lowering the cost of production or disposal of coal per se. It may so result.
What is to happen? In the first place, under Clause 42, the Commission have got to come to the conclusion that the number of separate undertakings to which the coal in any area is leased is so great as to be detrimental to the efficient working, treating or disposing thereof. Thereupon it may be their duty to effect a reduction in the number of such undertakings, if it can be done. Then there is to be a representation to the Board of Trade recommending that the powers
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of the Commission under the clause should become exercisable in any area. Then the matter comes in effect before Parliament in the form of a Provisional Order which is to be the subject of debate in special Committees. Those Committees have got to be satisfied as a matter of reason that there is a probability that as a result of the undertakings being combined they will be carried on more economically and efficiently, so far as human beings can tell, owing to the fact that there has been the amalgamation. That will be a thing that everybody can talk about in Committee, and a thing on which the Committees will have to be satisfied. The matter has to go before the Board, and Parliament may make a Provisional Order declaring—that is what I want to say—that it is expedient in the national interest that the number of coalmining undertakings should be reduced in the area with respect to which the recommendation is made. That Provisional Order will not be made unless Parliament is satisfied that there is good reason for it. It will not be made unless probabilities are satisfied in that matter.
That does not mean that Parliament will have definite positive evidence to show that there must be a reduction in the cost of production of coal or in its marketability. Accordingly the words proposed are not possible to accept. That is the stage at which things are a matter of policy, and that is not a matter with which, under the Bill as it stands, the Railway and Canal Commission will be charged. The question of policy has already been determined when the matter has resulted in the Provisional Order becoming part of the law of the land, and then the questions of law, and questions which can be determined by strict evidence, will finally come before the Railway and Canal Commission. But as the Amendment stands it requires the Railway and Canal Commission to be satisfied that the scheme will result in lowering the cost of production or disposal of coal—a thing that is not intended to be submitted to the Railway and Canal Commission at any stage in their duties, a matter which is one of policy and probability and which is to be determined on the Provisional Order. These words cannot possibly be accepted.
LORD TEYNHAM: I have very fully considered the views put forward by the noble and learned Lord, but I should

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like to remind your Lordships that when the 1930 Act was before this House, an Amendment was carried which prevented the Railway and Canal Commission from confirming a scheme of amalgamation unless they were satisfied that it would lower the cost of production and disposal of coal. I hardly think that your Lordships would wish to exclude from this Bill this very necessary provision which your Lordships have already inserted in the 1930 Act.
EARL STANHOPE: The point is that, since the 1930 Act, Parliament has been brought into the matter to consider the whole of that aspect of the question. In the 1930 Act the whole thing was left to the Railway and Canal Commission. Now Parliament is brought in. The Board of Trade have to make a report to Parliament, and both this House and another place have to consider the matter from its broader political aspects; only the technical aspects are now left to the Railway and Canal Commission. It is a different procedure from what was enacted in 1930.
LORD TEYNHAM: In view of the assurance which has been given by the noble and learned Lord and the noble Earl that the matter of the lowering of the cost of production of coal will also be considered when the matter comes before a Committee of Parliament, I beg leave to withdraw.
Amendment, by leave, withdrawn.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, in paragraph (b) of the substituted subsection (2) in paragraph 2, to leave out "inconsistent with any provisions required by the enactments relating thereto to be included in schemes submitted to the Board of Trade by the Coal Commission" and insert "on the ground that the reduction of undertakings as provided for in Clause 43, subsection (1) of this Act is desirable or otherwise." The noble Lord said: On behalf of the noble Marquess, Lord Lothian, I beg to move the Amendment which stands in his name. This paragraph has to do with the powers of the Railway and Canal Commission, and I am very much concerned at what appears to be the effect of proviso (b). It appears to limit those powers to a degree much greater than has, I think, been generally realised. There appears
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to be a general impression that, apart from the fact that the Railway and Canal Commission are no longer to judge whether a scheme is in the national interest, their powers and duties are not affected. But if my reading of this very complicated paragraph is right, they are affected to a very great extent. This proviso (b) provides that the Railway and Canal Commission
"shall not have power to make, or require to be made, in the scheme modifications inconsistent with any provisions required by the enactments relating thereto to be included in schemes submitted to the Board of Trade by the Coal Commission"—
and so on. If I understand it aright, the effect of those words is that a modification in the scheme would be inconsistent, and therefore prohibited, if the scheme after the proposed modification would contradict provisions dealing with reserved matters.
I do not know if the noble and learned Lord Chancellor follows what I mean, but what I understand is that all these matters referred to on pages 85 and 86 of the Bill under the heading:
"The following provisions shall have effect with respect to any scheme submitted to the Board of Trade by the Coal Commission,"
are excluded from the purview of the Railway and Canal Commission. Then we have:

"(a) the scheme shall provide for the consideration to tie given to each of the constituent companies … out of the securities….

(b) the scheme shall determine the classes of securities"

and so on. I read this proviso (b) on page 87 as excluding all these matters from the purview of the Railway and Canal Commission.
Amendment moved—
Page 87, line 16, leave out from ("modifications") to ("but") in line 20 and insert ("on the ground that the reduction of undertakings as provided for in Clause 43, subsection (1) of this Act is desirable or otherwise.")—(Lord Balfour of Burleigh.)
THE LORD CHANCELLOR: If the noble Lord will allow me, I can assure him that, although I know that view has been entertained in a certain quarter, it is not right. If the noble Lord will look at page 87, line 15, the beginning of proviso (b), and just follow me, I think I can make it clear that the fear which others have entertained is incorrect:

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"shall not have, power to make, or require to be made, in the scheme modifications inconsistent with any provisions required by the enactments relating thereto to be included in schemes submitted to the Board of Trade."
That is to say, that where there is a provision required by the enactments—and I emphasize the words "by the enactments"—the Railway and Canal Commission have to bear those in mind and cannot go beyond them. But the reserved matters which the noble Lord has mentioned are matters not "required by the enactments relating thereto," but matters which ate provisions of the scheme. The very object of the power to modify may be to modify the provisions of the scheme that are before them. For instance, it would be inconsistent with the provisions of the enactments if the Court were to award consideration to a constituent company otherwise than in the form of securities in the company to which this property is to be transferred, because that is one of the enactments, or if they assessed the consideration otherwise than on the basis of the value of the property ascertained as between a willing vendor and a willing purchaser, or again if they omitted from the scheme a provision for the final determination of the consideration by arbitration or otherwise. Those are the things in the enactments, but the other things which it is feared would not be permitted are not in any way touched by this proviso.
LORD BALFOUR OF BURLEIGH: May I ask if in a word it is merely the national aspect of the matter which is withdrawn from the Railway and Canal Commission, and other things remain within the purview of the Commission?
THE LORD CHANCELLOR: It is not only the national interest but the basic agreement by which constituent companies are to be bound as between themselves and the transferee company. They have in the Bill as provided, and in the Act of 1930, certain safeguards for their protection, and the safeguards and the actual provisions required by the enactments relating to the scheme are immutable and are not to be affected by anything that the Railway and Canal Commission may do.
LORD BALFOUR OF BURLEIGH: I am very grateful for the patience with which the noble and learned Lord has
782
tried to explain this complicated matter. I expect the explanation given will carry comfort to those high legal minds which have expressed doubt. If not, if I withdraw my Amendment now, perhaps he will allow me to return to it on the Report stage.
Amendment, by leave, withdrawn.
Seventh Schedule agreed to.
Eighth Schedule:

EIGHTH SCHEDULE.

  AMENDMENTS OF 20 & 21 GEO. 5. c. 34, ss. 5 AND 8.
  1. In subsection (2) of Section five, after the words "Board of Trade" there shall be inserted the words following—"the person to be appointed as chairman shall be a member of the legal profession,".
  2. For subsection (3) of Section five there shall be substituted" the following subsections:—
  (3C) The chairman shall be present at every meeting of a committee of investigation. Any such committee may take evidence on oath, and for that purpose the chairman shall have power to administer an oath. Any evidence taken by a committee shall, except in so far as it relates to any particular business or under-taking or unless the committee for any special reason otherwise decide, be taken in public, and the decision of the committee upon every complaint shall be delivered in public. Subject to the foregoing provisions of this subsection, the meetings and procedure of every committee of investigation shall be regulated in accordance with rules made by the Board of Trade for the purpose."
  LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved, at the beginning, to insert:
  "1. After subsection (1) of Section five there shall be inserted the following new subsection:
  '(1A) If it appears to the Board of Trade to be expedient that more than one district committee of investigation should be constituted for any district with a view to the investigation of complaints relating to different matters or to different localities by different committees, two or more such committees may be constituted therefor and shall be charged respectively with the duty of investigating any complaint with respect to the operation of the district scheme for that district made in relation to such matters or to such localities as the Board may direct.'"
  The noble Lord said: I need not take up much time in moving this Amendment, because I understand that the Government are prepared to accept it. It provides for the further protection of consumers. The districts are to be very large, and the Bill only provides for one

  783
  committee of investigation in one district. This Amendment gives a discretion to the Board of Trade to appoint additional committees of investigation in cases where they think it is desirable.
  Amendment moved—
  Page 88, line 4, at the beginning, insert the said words.—(Lord Balfour of Burleigh.)
  On Question, Amendment agreed to.
  VISCOUNT HORNE OF SLAMANNAN VISCOUNT HORNE OF SLAMANNAN moved, in the substituted subsection (3C) in paragraph 2, after "investigation" at the end of the first sentence, to insert "and any question at such meeting shall if the votes of all the members present and voting thereon are not unanimous be determined by the chairman." The noble Viscount said: The object of this Amendment is to bring the Government back to their original ideas upon the subject of committees of investigation. I indeed hope they will do something to recapture in this matter their first fine careless rapture. If your Lordships will remember, committees of investigation are set up, before which consumers are allowed to appear and state their complaints. You have both a National Committee of Investigation, and district committees of investigation. With regard to district committees of investigation, with which alone my Amendment is concerned, they are composed of five persons—namely, a chairman, two people representative of the consumers, and two others representative of the coal interest. One of the last represents the colliery proprietors and the other the coal miners. The Government originally, in making this provision, altered the composition of the committee under the previous Statute to provide that there should be a compulsory chairman, and that he should be a person expert in the law. The rest of the committee remained as it was.
  In this sub-paragraph it is provided that the chairman should be present at every meeting of the committee of investigation, and then I propose to re-insert what the Government, under some duress in another place, left out from the Bill as presented to this House, namely:
  "and any question at such meeting shall, if the votes of all the members present and voting therein are not unanimious, be determined by the chairman."
  I think in the interests of everybody it would be wise to regard the representatives of the conflicting interests as really
  784
  assessors in these committees, and that the ultimate decision should be taken by the chairman alone. It is quite conceivable that you have clashes of interest taking place which may bring about a quite untoward result.
  Indeed in another place Captain Osbert Peake gave illustrations of what happened before such a committee. The representatives of the coal interest always stood with a well-established and formidable front, whereas you found a difference of opinion always continuing between the representatives of the consumers. One of those representatives was appointed by the large consuming interest, and the other by the small consuming interest, and the rivalry between these two elements on the committee very often resulted in one or other going over to the coal side. I think in circumstances of that kind it would be much more proper, and lead to much better conclusions, if these people were to be regarded simply as advisers or assessors of the committee, and that the ultimate decision should rest with the entirely independent legal expert, the chairman. I beg to move.
  Amendment moved—
  Page 88, line 39, after ("investigation"), insert the said words.—(Viscount Horne of Slamannan.)
  THE EARL OF MUNSTER: It is perfectly true, as the noble Viscount has said, that this Bill when originally introduced did provide that if the members of these committees were not unanimous the vote of the independent chairman should prevail. Where there was no appeal from the committee's decision there was a good deal to be said for giving the independent chairman a deciding vote, but where, as the Bill stands at the present moment, there is being set up an Appeal Tribunal to which all these cases can be taken from these committees of investigation, anybody who is aggrieved by the decision of one of these committees may appeal, and we think the existence of this tribunal does away with the necessity of giving to the chairman of the committee dictatorial powers. I think, if I may be so brave as to offer a few words of advice to my noble friend, he would be well advised to leave the Bill as it stands and as it came to us amended by the Government in another place.
  VISCOUNT HORNE OF SLAMANNAN: If the Government disdain their own original wisdom it is not for me to force it upon them. I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  LORD MIDDLETON LORD MIDDLETON moved to insert after paragraph 2:
  "3. At the end of subsection (5) of the said Section five the following words shall be added:
  "and the complainant also shall furnish the committee with such returns, accounts and other information as the committee considers relevant to the investigation"
  The noble Lord said: This Amendment is not one of major importance, but it is considered that it will improve the Bill, and I understand that the Government accept that view. I beg to move.
  Amendment moved—
  Page 89, line 6, at end insert the said new paragraph.—(Lord Middleton.)
  EARL STANHOPE: I accept the Amendment.
  On Question, Amendment agreed to.
  VISCOUNT ELIBANK VISCOUNT ELIBANK moved, after paragraph 7, to insert the following new paragraph:
  "8. In Section six of the said Act, at the end of the section, there shall be inserted the words 'The Board of Trade may require the executive board of any district to keep an accurate list of the permit prices current for the time being in their district, and to allow any consumer who satisfies the executive board that he has a bona-fide interest in the matter to inspect such list at all reasonable hours.'"
  The noble Viscount said: I am moving this Amendment on behalf of the consumers. The consumers really have been rather a Cinderella during the past few days and nights, and the royalty owners and colliery owners have perhaps been uppermost in the thoughts of your Lordships. This Amendment is really put forward on behalf of a very large body of consumers, the National Union of Manufacturers, and other consumers who think like them. An Amendment moved by the noble Lord, Lord Balfour of Burleigh, has certainly eased the position in which those consumers will be placed by securing additional investigating committees. But that does not go so far as this Amendment. Under the selling schemes which will be set up it will be necessary for consumers to apply for a price for the particular coal which they require. They will
  786
  then be given that price, but they will not have available at the same time the prices of other types of coal that may be competing with it. If they desire to obtain those other prices, under the Bill as it stands they have to go to an investigating committee to obtain that information, if they can, and that means time and expense.
  This Amendment merely asks that the various collieries shall send to the executive boards lists of prices of the different coals they supply, and that these lists should be brought up to date from time to time, and be available for consumers who wish to purchase coal through the central selling scheme. The collieries may say that that means more clerical labour, but to-day they have to provide for the manufacturers the prices of all the different types of coal which they are able to supply, and I do not see why, when this Bill is passed, they should not be in the same position. The manufacturers will be under great disabilities if this Amendment is not agreed to. I am aware that there is a good deal of opposition to it on behalf of the colliery owners and others, but I hope that the Government on this occasion will side with the consumers, instead of the colliery owners, as they have done so often in these debates.
  Amendment moved—
  Page 90, line 44, at end insert the said new paragraph.—(Viscount Elibank.)
  VISCOUNT HORNE OF SLAMANNAN: I would venture to support my noble friend. The consumer undoubtedly is placed under great disabilities under this measure, and the setting up of district committees and a Central Committee for the selling of coal imposes upon a consumer the obligation of disclosing why it is, for example, that he wishes to change his supply of coal. He is not allowed to make a complaint if his sole reason for changing the supply is because of the price. That puts him in great difficulty, because very often he wants to get a cheaper coal which is of a different grade. His object is not to get a cheaper price for a coal of the same grade, but to get something cheaper for his purpose in a different grade. It is obvious, therefore, that it is highly important for him to have a list of those prices in the various grades, and I think it would not impose a very severe burden on the colliery proprietors if they were to have a list of those prices

  787
  in the various grades to which the ordinary consumer could have access. I do not say it is a matter of immense importance, but it is a point which the colliery proprietors might concede, and which the Government in the interests of the consumers at large might support.
  THE EARL OF DUDLEY: It is on very rare occasions that I find myself in disagreement with my noble friend, but I hope the Government will resist this Amendment. It would be impracticable, and indeed impossible, for an executive board to keep an accurate list of permit prices current in the district, for the simple reason that there are no such things as fixed permit prices for various classes of coal in any district. These permit prices are settled in individual inquiries having regard to all the circumstances affecting the particular contract, such as the amount of tonnage involved, the period of the proposed contract, the state of the market at that particular time, and the relative state of demand for the various classes and sizes of coal. It would really be quite impossible to keep from time to time permit prices in respect of all these various classes of coal, just like the catalogue of a store.
  VISCOUNT ELIBANK: Will the noble Earl say what the exact practice is now, because prices have to be supplied by collieries all the time?
  THE EARL OF DUDLEY: That is what I have already attempted to do. Each permit price is settled in each case in individual inquiries and in regard to the particular contract, and all the factors that enter into it. Apart from that objection, there are over a large part of the industry central selling schemes which have been set up under previous Acts, and in such cases there are no such things as permit prices, for the body administering the scheme is itself the seller of the coal. Indeed, as matters stand at present, the committees of investigation have power to call upon the body administering the scheme for such information as to prices as they may require in order to enable them to deal with complaints.
  THE EARL OF MUNSTER: I am informed that the proposed Amendment of my noble friend makes a general departture from the principle which has been followed with regard to the 1930 Act schemes since that Act was passed.
  788
  Amendments of the schemes and the duties of the boards under the schemes are not imposed upon the industry except by consent, and apparently, from what my noble friend Lord Dudley has said, there is no consent on the part of the coal industry to this Amendment. Further, it would be impossible to comply with the request of the noble Viscount which is contained in his Amendment. He asks that a list of prices should be brought up to date from time to time, but prices vary frequently, and constant and frequent alterations would be necessary in any such proposal. The Amendment is quite unacceptable to the Government, and it is not acceptable in any way to the Mining Association either.
  VISCOUNT ELIBANK: I do not propose to press this Amendment, but I did hope it would have been possible to make this position a little more elastic than it will be when the Bill becomes law. At the present moment there are very few selling schemes in force in the country, but when the country becomes permeated with selling schemes I can see the consumer, in the respects of which the noble Viscount, Lord Horne, and I have spoken, in a difficult position very often. It is not a question of complaint, as the noble Earl, Lord Dudley, has said. It is a question of the ordinary flow of business to enable a man to compete with the manufacturer alongside him and the manufacturer overseas. I beg leave to withdraw.
  Amendment, by leave, withdrawn.
  Eighth Schedule, as amended, agreed to.
  Clause 12, the further consideration of which had been postponed till after the consideration of the Schedules:
  Right of freeholder in possession of coal to lease thereof.
  12.—(1) A person carrying on the business of coal-mining immediately before the vesting date, who is then beneficially entitled (whether or not subject to a mortgage) to the entire fee simple in coal or a mine of coal that is not subject at that date to any coalmining lease, shall have the right, if he has made an application in writing in that behalf to the Commission before the vesting date, to a grant from the Commission of a coalmining lease comprising any coal or mine of coal specified in his application to which he is so entitled and any property and rights that vest in the Commission therewith:
  Provided that a person shall not be entitled under this section to a lease the grant of which would interfere with the exercise of

  789
  a right granted by a working facilities order, or with the use or exercise under a coalmining lease of any poperty or right comprised therein.
  (2) A lease granted, under this section shall be granted for such a term, commencing on the vesting date, as the person entitled to the lease may require, not being longer as regards the coal comprised therein than may be reasonably requisite for enabling that coal to be worked out, and subject to conditions with respect to rent and otherwise not more onerous to the lessee than the conditions customary in the district or, where there are no customary conditions or the customary conditions are not applicable, than the conditions to which a person not entitled to the benefit of this section might reasonably have been expected to agree, and the Commission may grant a lease to the person entitled on conditions less onerous than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise lie unduly unfavourable as compared with his situation in that respect as owner of the fee simple in the premises.
  VISCOUNT HORNE OF SLAMANNAN VISCOUNT HORNE OF SLAMANNAN moved, in subsection (1), after "entitled," to insert "and was so entitled before the tenth day of November nineteen hundred and thirty-seven." The noble Viscount said: The Amendments which have been put upon the Paper were put forward in more or less general terms in the speech I previously made in Committee. As your Lordships know, Clause 12 was postponed for consideration until the end of the Schedules on the indication that the Government recognised that a considerable injustice was being perpetrated on what are known as the freehold owners of coal if the Bill was carried through in the shape in which it then stood. Since then conversations have taken place between the noble Earl who leads the House and several of those concerned in moving the Amendments, including myself, with the result, as I understand it, that the Government and those who proposed the Amendments are really more or less at one in the general principle which ought to be carried out.
  The Government have suggested in the clause they have put forward certain terms in which they would be prepared to amend Clause 12, and these terms are now before the Committee in the subsequent Amendments to be moved by my noble friend the Leader of the House. At this moment I am not prepared entirely to accept the phraseology adopted by the Government as being the best form of
  790
  words in which the views both of the Government and of those who moved the Amendments can be expressed, but in principle undoubtedly they meet the point which we had urged. Accordingly, if my noble friend Lord Stanhope is willing to allow us to move on the Report stage any Amendments that we choose to the form of words which he has adopted in his Amendment, I will be willing to withdraw the Amendments which stand in my name, amongst others, on the Paper.
  Amendment moved—
  Page 14, line 18, after ("entitled") insert ("and was so entitled before the tenth day of November nineteen hundred and thirty seven").—(Viscount Horne of Slamannan.)
  EARL STANHOPE: I entirely accept what my noble friend said. I think we are agreed in regard to the principle of the matter, and it is merely a question of finding words. We hoped on both sides we had found suitable words, but my noble friend says he is not quite sure that they go far enough. I am not quite sure that they do not go a shade too far, and therefore both of us will be free, on the further stages of the Bill, to make such Amendments as we consider necessary and desirable. The noble Viscount is quite correct in saying we are all agreed as to what we wish to arrive at, and it is merely a question of words to carry out that principle. So far as I am concerned, I am quite prepared to move the Amendments standing in my name on the full understanding that I or the noble Viscount will have full liberty to amend the wording later on, if necessary.
  LORD STRABOLGI: If I may be so bold, I should like to ask for a little more information about this arrangement which apparently has been made between the noble Viscount, Lord Horne, and his friends and the Government. Do I understand that all these Amendments are more or less agreed for the time being—all the remaining Amendments on the Paper?
  EARL STANHOPE: Only those in my name.
  LORD STRABOLGI: Do I understand the Government are accepting the two Amendments in the name of the noble Viscount, Lord Horne?
  EARL STANHOPE: No.
  LORD STRABOLGI: These are not being accepted, but the two standing in the name of the Leader of the House are, I understand, for the time being acceptable to the noble Viscount and his friends. I am very glad to see this harmony amongst the Government supporters restored. It has saved us perhaps another late sitting, but I hope, when the noble Earl moves his Amendments, we can have just a word of explanation, particularly as to the effect on the financial provisions of the Bill.
  VISCOUNT HORNE OF SLAMANNAN: I beg leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  EARL STANHOPE EARL STANHOPE had given Notice of two Amendments to subsection (2)—namely, to leave out "not" ["not more onerous"] and insert "which shall not in any case be" and to leave out all words from, and including "Commission" in order to insert:
  "conditions of the lease shall, where the person entitled thereto acquired the fee simple in the coal before the tenth day of November nineteen hundred and thirty-seven, be so framed as to secure that his financial position in respect of his business of working the coal shall not be adversely affected by the operation of this Part of this Act."
  The noble Earl said: I do not know if your Lordships would like me to take both Amendments together. They deal with the same subject. Briefly they leave the situation in regard to freehold coal exactly as it was before this Bill came into operation. It will be left in the same financial position in regard to the amount the owners pay in the matter of rent, taking into consideration the amount they have paid for the coal in the first instance. As regards the finance of the Bill, the Amendments will have no effect whatever. The freehold coal will be valued with other coal and in exactly the same way. Then the amount that will be paid in rent will come in on the other side, and it will not affect the finance of the Bill one way or the other. The whole valuation will come into the £66,450,000, and therefore the finance of the scheme is not affected.
  Amendment moved—
  Page 14, line 39, leave out ("not") and insert ("which shall not in any case be").—(Earl Stanhope.)
  LORD STRABOLGI: I only want to say I feel a very heavy responsibility in
  792
  this matter. As your Lordships know, my noble friends and I make no pretence of speaking for any one on this question other than the Miners' Federation who are members of our Party and are, after all, those most nearly affected. In all the Amendments we have moved and all the discussions in which we have engaged we have been acting openly and, I hope, honestly on behalf of this great organisation. We have been trying to speak for the 700,000 or 800,000 workers in the coal industry. I am not in a position to say what their views are on this particular Amendment. I recognise that it is an important one. I know it meets a genuinely felt grievance, and I am not going to say it is not in the national interest, but I am afraid it will have to remain where I leave it, as far as we are concerned, until there has been time to consider it.
  EARL STANHOPE: So far as I can see it will not affect any miner at all, certainly not adversely.
  LORD CROMWELL: I do not propose to oppose the Amendments to this clause which appear on the Paper in the name of my noble friend the Leader of the House, but I am afraid I am unable to give silent assent to them, and as briefly as possible wish to make my position clear. Throughout the debates it has been agreed from all quarters of the House that an owner of coal has an undisputed right to the same, both legally and morally, and therefore it cannot be claimed that any particular section had more right than any other. It is true to say that this clause, as amended, will not draw any distinction in so far as the compensation goes, but no one can deny that it implies that one section of the royalty owners is not getting a fair deal, and obviously, if this is true, then it is equally true of all of them.
  It has been argued that colliery companies owning coal should be treated differently to private individuals also owning coal because, in fact, the former have risked their capital and the latter have not. The fallacy of this is obvious, and, if I may say so without offence, even the Government see through it, but at the same time they are anxious to placate an influential body of people providing they do no actual material injury to the despised and unimportant private royalty owners. It is true that no actual damage

  793
  is being done to the royalty owners but the Government certainly cannot escape from their dilemma, and I challenge them to deny that Clause 12, as amended, is an admission that the £66,000,000 for which they propose to acquire all the coal in the country is a totally inadequate figure.
  VISCOUNT SAMUEL: I do not rise to challenge the principle of this Amendment, but only to ask the noble Leader of the House if he could give a little further elucidation in regard to the financial aspect. The coal in question is about one-eighth of the whole of the coal in the country; therefore, presumably, about one-eighth of the value of the whole of the coal in the country. The owners of this coal, the freehold owners who are also working the coal, will now not pay anything under this Bill and will not receive anything, so I gather, and when the valuation is made they will have no special interest to secure that their value is as high a one as the circumstances of the case require. My point is whether under this new arrangement the noble Earl, the Leader of the House, is sure that the valuation will really be adequate and will represent the sum which this coal is really worth, because if not, then the other royalty owners will be receiving something up to one-eighth more than they would otherwise receive. I have no doubt that would be very welcome to them.
  LORD HASTINGS: And deserved.
  VISCOUNT SAMUEL: I should like to know whether that is so, because if it is we ought to know just what we are doing. It may be said that this does not matter to anybody, because it will all come out of the £66,000,000 and the State will not be required to find any more money, but if there is some ultimate residue conceivable for general purposes, or if it is desired to use this money in some way beneficial to the industry, the position will have been altered. I do not want to go into that; I only want to know whether in any respect the finances of the Bill as regards the valuation of this great property and the use of the proceeds are in any way affected by the Amendment which we are now asked to accept.
  THE EARL OF LINDSAY: I should like to say, speaking as one interested in the question of freehold coal, that I do not think it is wise to look a gift horse in
  794
  the mouth. I think those colliery companies possessing freehold coal should be grateful to the noble Earl and the Government for the clause he proposes to insert. It must be borne in mind that in many cases colliery companies have paid more than fifteen years' purchase for their coal, so that there should be no complaints about what they are getting. Moreover, the fact remains that they may have paid for the coal several years back and at the same time have stood out of the interest on the money so expended. I mention these facts to show that the owners of freehold coal are not getting any special privilege at the expense of other royalty owners.
  VISCOUNT SAMUEL: The noble Earl has misunderstood me. I was not suggesting they were.
  LORD HASTINGS: But what the noble Viscount suggested was that other royalty owners were going to get money at the expense of the general fund. I have a vivid recollection of about three days ago supporting the noble Viscount on a financial point, and now that I have that in front of me I say: "Never again; never again!" The noble Viscount may be absolutely certain that whoever gets anything out of this it will not be the royalty owners, but we shall not forget that the noble Viscount did try to prevent it.
  EARL STANHOPE: I do not know if the noble Viscount, Lord Samuel, was here during the earlier part of the proceedings. If he had been he would—
  VISCOUNT SAMUEL: I have been here throughout the proceedings.
  EARL STANHOPE: I am sorry, but I must not have made myself clear in moving some Amendments to the Third Schedule which dealt with this particular point.
  VISCOUNT SAMUEL: I was out for about ten minutes.
  EARL STANHOPE: I think I can state their effect very shortly. The point was this, that we recognised that there was really nothing which would cause the freehold owner of coal to see that a proper valuation of coal was put in and, therefore, we thought it necessary to insert Amendments to safeguard that position and see that full particulars were for-

  795
  warded, so that the valuation should be put on a proper basis. If the Coal Commission thought that that was not being done then, under the first Amendment, they would have a right to appear before the Regional Committee and make their case that the valuation should be reconsidered. The second Amendment dealt with the matter before a referee. There again the Coal Commission have a right to intervene in all these cases of freehold coal. Thus a provision was inserted to safeguard the position and to see that the valuation was done on proper lines and that the freehold owners did not get away with a very small value of coal so that other coalowners should get more than they were entitled to.
  VISCOUNT SAMUEL: I am very grateful to the noble Earl for the explanation.
  On Question, Amendment agreed to.
  EARL STANHOPE: I beg to move the Amendment in my name at page 15, line 2.
  Amendment moved—
  Page 15, line 2, leave out from ("the") to the end of the subsection and insert ("conditions of the lease shall, where the person entitled thereto acquired the fee simple in the coal before the tenth day of November nineteen hundred and thirty-seven, be so framed as to secure that his financial position in respect of his business of working the coal shall not be adversely affected by the operation of this Part of this Act.")—(Earl Stanhope.)
  On Question, Amendment agreed to.
  Clause 12, as amended, agreed to.
  House resumed.

BUSINESS OF THE HOUSE.
LORD BALFOUR OF BURLEIGH: Before the House adjourns will it be proper to ask the noble Earl if he could give us some indication when we might expect to take the Report stage of the Coal Bill?
EARL STANHOPE: We are proposing to put it down, if it suits your Lordships, for Tuesday and Wednesday, June 21 and 22.
House adjourned at eight o'clock.