Sitting of 4 June 1945

Preamble
The House met at a Quarter past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]

BUSINESS OF THE HOUSE
Mr. Attlee (by Private Notice)asked the Deputy Leader of the House whether he can now state the position regarding the Family Allowances Bill, and whether there is still a possibility of it reaching the Statute Book before the General Election.
The Chancellor of the Exchequer (Sir John Anderson): I have been asked to reply. The Government are desirous of seeing this Bill pass into law before the General Election. This will only be possible if agreement can be reached immediately on the outstanding points. As my right hon. Friend the Leader of the House stated last Thursday, discussions are taking place. I fear, however, that there are difficulties which still have to be overcome.

BUSINESS OF THE HOUSE BILLS REPORTED

  EAST GRINSTEAD GAS AND WATER BILL
  Reported, with Amendments, from the Committee on Group A of Private Bills (with Report on the Bill).
  Bill, as amended, and Report to lie upon the Table; Report to be printed.

  WEAVER NAVIGATION BILL
  Reported, with Amendments, from the Committee on Group B of Private Bills (with Report on the Bill).
  Bill, as amended, and Report to lie upon the Table; Report to be printed.
  Proceedings on Government Business exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).—[Mr. Bracken.]

  ORDERS OF THE DAY

    FINANCE (No. 2) BILL
    Order for Second Reading read.
    2.22 p.m.
    The Chancellor of the Exchequer (Sir John Anderson): I beg to move, "That the Bill be now read a Second time."
    I do not think that it would be in accordance with the wishes of the House, nor indeed is it necessary, for me to make a lengthy speech in moving the Second Reading of the Bill now before us. The House has seen in the Bill that was withdrawn last week the full provisions which would have been submitted to them for their approval had the circumstances of the Session been normal. We should have had a Finance Bill of ordinary dimensions, covering not only the whole of the proposals which I outlined in my Budget speech but a variety of minor and miscellaneous provisions which it was not necessary to describe in that statement. In view of the early Dissolution, we have thought that it would only be right, and indeed would only be practicable, to ask the present Parliament to pass, in these closing weeks, those few provisions which are absolutely essential to the ordinary management of our financial affairs through the summer months.
    This does not mean, of course, that we attach little importance to those provisions of the earlier Bill which have now

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    disappeared for the time being. Some of them, such as the tax exemption for Service gratuities, to which the Government and all parties are pledged, will in due course become essential, and all of them are, in the opinion of this Government, desirable. Perhaps by way of further illustration I may refer to the six Clauses which appeared in the previous Bill to give the necessary legislative sanction to the agreement on double taxation which we have concluded with the United States of America, and which we hope to conclude with the Dominions and other foreign Governments. The agreement with the United States received a very general welcome, and I am sure that it would be the wish of Parliament to pass the necessary legislation at an early date. I have proceeded on the assumption that a further Finance Bill will be necessary in the Autumn in any event.
    As regards the actual provisions included in the present Bill, we have, in the first place, to reimpose the tax which forms the main prop of our fiscal system, the Income Tax, together with the Surtax, which is properly to be regarded as part of the Income Tax. This is done in standard form in Clauses 3 and 4. Since, under the Provisional Collection of Taxes Act, the Resolution imposing these taxes ceases to be valid if a Dissolution takes place before they have been confirmed by legislation, it is absolutely essential that these Clauses should be passed into law before the Dissolution. We have also to reimpose one other tax, the hops duty, which is the subject of Clause 1. It will be remembered that I mentioned this matter in my Budget speech. A Customs duty of £4 per cwt. on imported hops was first imposed for a period of four years in1925, in order to give some protection to the market for English hops. It has since then been renewed each time when it expired. There is a preferential rate of two-thirds of the full rate on Empire hops. The duty involves consequential duties on hop oil and other preparations made from hops. The Customs Duty on imported beer and the Customs and Excise drawbacks on beer exported, include an additional amount in consequence of the duty on imported hops. The necessary consequential provisions on these matters are included in the Clause.
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    Here again, because the present authority lapses in the middle of August, immediate legislation is necessary. During the war the imports affected by this duty have been very small indeed. It is uncertain to what extent they may return to a more normal level in the next four years. The matter has been the subject of discussion with my right hon. Friend the Minister of Agriculture, and with the interests concerned, and all are agreed in recommending that it would be undesirable at the present time to introduce any change in a policy which has shown beneficial results. I therefore recommend that the duty should be continued, as provided in the Clause.
    There is one provision which involves a relief to the taxpayer, that which is included in Clause 5. In my Budget statement I made a proposal, which I explained at some length, for a further extension of the measures which we took last year to lighten the burden of Excess Profits Tax on small businesses. I will not weary the House by repetition of what I said in my Budget statement, but it will be remember that what I proposed was a general relief for all businesses whose profit standard falls short of £12,000. The relief is modelled on one which was applied to National Defence Contribution, and involves an addition to all standards below £12,000 of one-tenth of the amount by which the particular standard falls short of that figure. This gives a relief which is highest, of course, in the case of very small businesses, and which dwindles to nothing as the existing standard approaches £12,000. It does not affect in any way any business where the existing standard already amounts to £12,000 or more. This is, of course, a comparatively small matter but it has been recognised in all quarters of the House that the Excess Profits Tax continuing year to year must have a harmful effect on the growth of small and young enterprises. The proposal which I made in the Budget was generally welcomed, and it seemed to me desirable, that, in a matter of this kind, there should be no uncertainty in the minds of those affected. I have no doubt that the House will be ready to enact these provisions as one of the urgent measures to be included in this Emergency Bill. As this is an entirely new departure there could be no feeling of certainty, notwithstanding what I said

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    in my Budget Speech, until the proposals had actually taken shape in legislation.
    Clause 2 concerns questions of procedure in connection with Purchase Tax on utility goods, which I mentioned in the Budget. It amends Section 19 of the Finance Act, 1942, which empowered the Treasury, by Order, to give relief in respect of Purchase Tax on utility goods. The Board of Trade are already using other statutory marks which do not come within the definition of a utility mark, and they may find it necessary to introduce further such marks in the future. In order to bring the operation of the Purchase Tax provisions into line with this development—an excellent development, I think—of the system of statutory marks, it is desirable to substitute for the legislation of 1942 a general provision to include any marks the use of which the Board of Trade have power to regulate. It is, of course, still the case that any Treasury Order relating to Purchase Tax which might be made in this connection would, under general provisions already on the Statute Book, have to be approved by Resolution of the House of Commons.
    Finally, the Bill includes, in Clause 6, provisions in standard form fixing the National Debt charge for the present year at the figure of £465,000,000, which I mentioned in my Budget speech. This Clause also includes powers which have been given in every year since 1933 to borrow to meet certain contractual sinking funds. This completes my explanation of the provisions contained in this Bill. It only remains for me to commend the Bill to the House, and to repeat the hope, expressed last week by the Leader of the House, that Parliament would be willing, in present circumstances, to give it a speedy passage into law.
    2.31 p.m.
    Mr. Pethick-Lawrence: I do not anticipate that the wish expressed in the last few words of the Chancellor of the Exchequer's statement will be frustrated. It is in no one's interest to hold up the Finance Bill of the year, and in view of the early Dissolution I feel sure we shall all be willing to carry the Bill through all its stages in this House, and I have no doubt that in another place the Bill will receive equally speedy treatment. The Chancellor divided his remarks into two parts, one dealing
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    with the omissions from the larger Bill and the other with the provisions of this Bill itself. With regard to the omissions, I feel quite sure that whatever Parliament is elected after the Dissolution will be glad to ratify the remission of taxation on the war gratuities, and also to ratify the arrangements with regard to double taxation that have formed part of an agreement between this country and the United States.
    There is, however, another omission from the Bill to which I do not think the Chancellor made any reference. That is the change in motor taxation. When I spoke on the day following the Budget Statement I said that, provided the announcement which the Chancellor had made was an agreed solution, I, for my part, would support it, and I thought that it would be supported by the House. Since that Debate, I have learned that the proposals of the Chancellor in that respect are by no means agreed upon by the interested parties as a whole. In fact, as I understand it, the trade itself is divided, and it is very doubtful whether the main object of changing the form of motor taxation, namely, the desire to promote the British export trade, would be very much aided if the proposals which the Chancellor of the Exchequer laid before us in his Budget speech were, in fact, to become law. I am a child in these matters, and I do not profess to be able to form a complete judgment, but it has been represented to me that there are other forms of change, involving perhaps an increased duty on petrol and removing at any rate some part of the duty from the capacity of the engine, whether it be measured as at present or by cubic capacity, as in the Chancellor's proposal, which might have a better effect in promoting the export trade than the changes contained in the Chancellor's proposals.
    Obviously we cannot decide that on the present occasion. The Chancellor will, I presume, continue to look at this matter, and if it should prove to be the case, that he is in the same office after the Election, he will then consider whether he can make a somewhat larger change that might have the effect of stimulating the British export trade. As it is at present, the British export market has certainly been adversely affected by the precise form of motor taxation. Motor exports may in the future be a considerable source of revenue, and if there be a way of pro-

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    viding the same amount of revenue from motorists to the Exchequer and yet giving the means by which the export of motors will bring in a substantial export surplus, then an investigation of any proposal of that kind ought not to be neglected. I hope that the Chancellor of the Exchequer will keep his eye on that, and that his officials will look into various methods of improving the situation.
    That concludes my remarks with regard to the omissions. With regard to the parts that are still in the Bill, not very much need be said. Clause 2, as I understood it from the Chancellor, is a fairly simple one, though it deals with a rather technical matter, and I do not suppose that the House will take any exception to that. I dealt, on the last occasion, with the question of Excess Profits Tax. I said, and repeat, that I do not think there will be any opposition in my Party to the slight remission of burdens on the small people affected by the Chancellor's proposals. The tax in its existing form has pressed very heavily on small businesses, and the alleviations which Clause 5 will effect will be welcome to a very large number of small people. I think that none of my hon. friends will take any exception to the Chancellor's proposals.
    In Clause 6 we have the amount fixed for the servicing of the National Debt. It is a heavily mounting figure, and I am afraid it will be a long time before it comes down again. But we must needs foot the bill. No one in any part of the House stands for repudiation of any kind, certainly no one on this side of the House, and I imagine no one on the Government Benches. Therefore; unfortunate as it may be, the money has got to be found. We shall certainly offer no opposition to finding it. That concludes my remarks on this Measure and I hope, with the Chancellor, that it will not be necessary to take a very long time over its discussion.
    2.40 p.m.
    Lieut.-Colonel Sir Assheton Pownall: Like my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence)—if I may still call him my right hon. Friend—I welcome the abridged version of the Finance Bill which has been introduced by the Chancellor this afternoon. I want to speak upon it, however, from a rather special
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    angle. I happen to have been for many years a Member of the Public Accounts Committee, and for the last three years I have been in the chair of that Committee. I am not now speaking on behalf of the Committee, but I am speaking with a fairly wide experience of its work in these last years. We have, of course, the head of every Department in the State before the Committee from time to time, and I want to pay a very warm tribute to the Treasury for the help they have given, not only to the Committee but to the nation as a whole, in regard to the very difficult problems that have confronted us.
    There arises from time to time need for urgent decisions by the Treasury. If they are matters which concern the Public Accounts Committee, that Committee is always consulted and is asked its views before any changes are made in the existing Treasury practice. That is a very considerable Parliamentary safeguard on the Service Departments.
    The Treasury also set up, at the beginning of the war, an Inter-Services Committee, with a Treasury officer as chairman, and this has done a great deal to co-ordinate our great Service Departments. Otherwise you might easily have Departments clamouring for, say, an area of land for an aerodrome or for manoeuvres—many possibilities leap to the eye—or competing for man-power, or for essential armaments of war. The Inter-Services Department has been of the greatest value. These things are not generally known to the public: if they were, there would be fewer complaints about Treasury control. Broadly, I should say, contract prices have been kept at a reasonable level. There has been an occasional slip-up, and those slips very often get into the Press; but, broadly, the Treasury control and the Departmental control have been reasonably exercised throughout the war. Some firms are rather liable to take the line, "It does not matter how much we charge; it will be taken off us in the form of Excess Profits Tax." The Committee have set their faces firmly against any such procedure, because it would lead to gross waste. We regard the Public Accounts Committee, not as a wicket-keeper but as a long stop, in cases where excessive profits have been taken.
    Another thing about which the Treasury have been most helpful, is the

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    question of inflation. Those of us who were in the House immediately after the last war remember how prices rocketed when the war ended. The cost-of-living figure went up not by one-third, as it has done in this war, but nearly three times. Subsidies, though not to the same extent as at present, were in existence after the last war. But this time keeping prices fairly stable has been of the greatest value in stopping inflation. I am often asked what is to happen in connection with the immense war debt accumulated in the last six years. The answer is much simpler than most people realise. I have turned up the Budget of 1919. The debt charge then, outside the fixed debt, was £330,000,000, and inside the fixed debt my recollection is that it was £30,000,000 in interest and sinking fund on the "pre-last war" debt. That is a total of £360,000,000. The House has heard that the interest charge on debt now is £465,000,000 as against £360,000,000 then. Our national income, as shown by the very interesting figures circulated with the Budget each year, is roughly double what it was after the last war. The figure then was roughly £4,000,000,000 and it is now £8,000,000,000. The percentage charge after the last war—and the percentage is the fairest way to calculate—was roughly nine per cent. of the national income; now it is six per cent. It is one-third less, although we borrowed these very large sums. The reason is quite simple. The Chancellor mentioned in his last speech that the charge was something over two per cent. I remember, in 1919,sums being borrowed at five per cent. Our borrowing rate has been about a third of what it was then, and it is that which has enabled us to treble our National Debt and, at the same time, to have an interest charge appreciably less in proportion than that of many years ago. That gives us hope for the future.
    I have been talking in millions, but now I will give a simple illustration; because, unless one gives simple illustrations, people find it hard to realise the extent of the problems of finance. A man of great wealth, who has some £2,500 to invest, if he puts it out at 3 per cent. will find the annual interest not enough to pay for his daily copy of the "Daily Telegraph." If any man of great wealth among my hon. Friends opposite wants to invest money, he will have to invest
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    more than £1,600 in order to have a penny a day to buy the "Daily Herald." That gives some idea of the very severe taxation which this country has gladly taken upon itself to win the war and the measure of taxation, which we hope before very long will be appreciably lightened. I hope that if a fresh Budget is introduced later, we shall find that the man of good will who introduced the Budget a few weeks ago, will be the person to introduce it.
    2.48 p.m.
    Sir Herbert Williams: I am sorry to be in disagreement with my hon. and gallant Friend the Member for East Lewisham (Sir A. Pownall), but I think he is much too optimistic about the burden of National Debt. The national income in 1918 was not £4,000,000,000, but about £5,500,000,000. The debt charge in this Bill does not show the true debt charge, because the Chancellor in this year is paying interest on only half the borrowings for the year. If he ceases borrowing at the end of this year, his debt charge next year will be up about £25,000,000 on this year. Also, Chancellors pay virtually no interest at all on Savings Certificates, so a great deal of the National Debt is being concealed, and is becoming a new capital charge. We shall find that we have ahead of us a much bigger burden; even worse, we have the immense burden of £3,000,000,000 of sterling indebtedness to India, to Egypt, I think, to all sorts of countries, as my hon. Friend here reminds me. That will involve, in due course, capital payments to people abroad, the money for which we shall have to raise in this country either by taxation or by further borrowing.
    I hope we shall not run away with the idea that this burden is going to be easy. It is going to be an oppressive burden that will hamper our lives in a great many respects for many years to come. I would ask the Chancellor also to remember the immense floating debt. I agree that the Treasury have been exceedingly skilful in borrowing cheaply, despite the destructive efforts of the hon. Member for Ipswich (Mr. Stokes), but I am quite satisfied that there is a good deal of floating debt, at very low rates of interest, which the Chancellor may find himself compelled, later on, to convert to higher rates.
    Sir A. Pownall: If my hon. Friend will allow me, may I say that the position as

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    regards the floating debt was also very serious after the last war? I happened then to be serving on a Committee which was dealing with the possibility of a capital levy on war taxes and the then Chancellor, Mr. Austen Chamberlain, told us how very anxious he was about the very large amount of floating debt in 1920.
    Sir H. Williams: I quite agree; and it is about twice as, much now as it was in 1920. That is what is worrying me. It is not going to be easy, and I think it is a great mistake to let the people think otherwise. They will have to carry, in debt charges, heavier burdens than were borne after the last war, and nobody will be in favour of repudiation, because the owning of the debt is now so widespread. Every person in this Chamber is about £20,000,000,000 richer than the State, because all the State has is the power to tax us—and it will be just as well to bear this in mind at the General Election.
    Mr. Ivor Thomas: Will the hon. gentleman not agree that that may be considerably altered by the result of the Election?
    Sir H. Williams: I agree that, if the other side win, it will be about £40,000,000,000, and it is one of the arguments in favour of keeping them out. Not many hon. Members will remember the occasion when the present First Lord of the Treasury introduced this hops tax. The present Prime Minister, in those days, was not so devoted to the principle of Imperial Preference as he now is, and, in introducing the hops tax, he expressed the hope that there would be no undue controversy, because those who thought that hops were food were in favour of food taxes, and those who did not think so did not believe in taxes on food, and, therefore, both would be satisfied. It is as well to remember the ingenuity with which the present Prime Minister commended this tax to the House 20 years ago.
    The next Clause in the Bill provides that inferior goods should be exempt from Purchase Tax. I do not like this very much. I think the Chancellor has inherited it from the right hon. Gentleman who was the President of the Board of Trade and who designed what are called "utility" goods. If you make utility
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    goods, they do not pay Purchase Tax. If they are designed by any of the innumerable professors at the Board of Trade—unless, in the meantime, these return to the London School of Economics—they are exempt from Purchase Tax. I had a suit made some little time ago, which was of the utility variety, so I suppose—I do not like the suit—that, as a result of the Bill passed some time ago, it was not taxable. I have another suit in process of construction, and, as it was not designed by the Board of Trade, I have to pay twice as much for it. I do not see why we should encourage the purchase of inferior goods by discriminatory taxation, and I ask the Chancellor to look into the principle involved.
    I think we are all agreed on the merits of Clause 5. Excess Profits Tax has been exceptionally burdensome. All the businesses started in a small way just before the war were growing, as was reasonably to be expected, but those people will find nearly the whole of their profits swept away by the Excess Profits Tax. The result will be that they will be unable to make even a very small provision for the expenses which they will have to incur as soon as the demand for munitions diminishes to a substantial extent, and they have to start peace-time production. I am quite satisfied that this is a real headache to many small firms. This concession will do a great deal to promote employment at a time when the provision of employment will not be so easy. I am certain that this Bill ought to go through. In the autumn, when the Chancellor brings forward a much more pretentious Bill, those hon. Members who are sitting opposite will be more chastened than they are at present, and, as a result of the lessons learned from the General Election, will be able to devote more consideration to these problems than they can give at present.
    2.56 p.m.
    Mr. Craven-Ellis: While I appreciate the importance of getting this Bill through as urgently as possible, I would ask the House to take note of one or two points in connection with it. Clause 6 provides for the annual charge for the National Debt. I think it is as well to bear in mind that this charge is just about half the amount of the Budget total of 1938. It is an indication of the kind of burdensome taxation which we

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    shall have to face when this war is over. I cannot but ask whether this country will be in a position to meet these charges without having to suffer very great hardship. I go back, for the purpose of a zero line, to 1938. At that time, the amount of national and local taxation represented 24 percent. of the national income. Taxation is now reasonably high, and I have seen nothing suggested by the Chancellor—in fact, I am disappointed in the Chancellor's statement—which offers any prospect of decreased taxation. Unless we can maintain the national income at between £8,000,000,000 and £9,000,000,000 a year, I cannot see any prospect of the period of reconstruction being kept within a reasonably short time.
    Therefore, I ask the House to consider very carefully the request of the Government for perpetual Votes of Credit, because these mean, every time, an increase of taxation. I raised this matter the other day in a Question. I asked the Chancellor what was the explanation of the Treasury Bill rate being 100 per cent. to-day in excess of what it was in 1936. The Chancellor, probably, was not free to give an explanation, but the fact remains that it is this kind of charge which is responsible for adding considerably to the permanent annual charge for the National Debt. I ask the Chancellor whether it is possible for the charge in respect of the Treasury Bill rate to be reduced.
    The right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) referred to motor taxation. I feel that the proposal put before this House a few weeks ago is not a solution of this problem. I gather from the information I receive that there never will be agreement within the industry on the basis of motor taxation. I am informed that the reason is that there are two or three very large industries manufacturing cars, and the formula which we have used for motor taxation has suited their purpose, and these great concerns have now become such a powerful vested interest that the Chancellor's hands are tied. Having regard to the position within the trade, it is the responsibility of this House to decide what is to be the method of taxation. We must decide on a formula that will enable that industry to expand, on a basis which will give us an increased home trade, as well as a motor car which will be serviceable
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    and useful in any world market. If we wait for the trade to arrive at an agreement, I am afraid we shall lose our trade as far as export is concerned.
    Finally, my hon. Friend the Member for South Croydon (Sir H. Williams) referred to the overseas debt of £3,000,000,000. I do not take the gloomy view he has taken of that matter because, as long as we are not forced to accept the Bretton Woods proposal, that overseas debt can be converted into short term loans of 1½ per cent. to 2½ per cent. and can be used within the sterling area for the purposes of expanding export trade. That amount of money which is now owing to India and other countries represents generally what the Ottawa Agreement set out to do, and that was to provide a volume of international money. The amount of international money which the £3,000,000,000 or £4,000,000,000 represents is something very considerably higher than it was ever expected could be carried, at the time of the Ottawa Agreement.
    Sir H. Williams: Supposing a gentleman in India wants £50,000,000 worth of goods from this country and is going to finance it out of credit, somebody has to find the £50,000,000.
    Mr. Craven-Ellis: I agree, but the £50,000,000 to which my hon. Friend refers would come from the profits arising out of the turnover in industry which it is possible for this £3,000,000,000 to bring about. At the present time, to take the course to which my hon. Friend has referred, the £3,000,000,000 becomes an absolute dead weight, and if we are forced to accept the Bretton Woods proposal, the position will be that this country will have to create very heavy loans in the United States of America. That would be disastrous not only to British trade, but to world trade. On that point I ask the House to be very careful in deciding what we do with regard to the Bretton Woods proposal when it comes forward. I strongly advise that we should remain on the sterling standard. It is the only basis on which we can carry out our international trade, and hope to make the liability into an asset to our country and to the sterling area.
    3.4 p.m.
    Mr. Ernest Bevin: I want to express my regret that the question of motor taxation has been

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    dropped. Any Government that may be elected must face the problem of this very important trade in the reconstruction period, and I agree with the hon. Member for Southampton (Mr. Craven-Ellis), that this matter has been prejudiced by the very favoured position of one or two groups in the motor-car industry. I ask the House why we should perpetuate the misery of any artisan or member of the lower-paid middle class having to ride in a car with his knees in his mouth. If he were my weight, he could not get under some of the cars. When I entered the Government, I happened to come in as Minister of Labour, and I found that the Treasury had all motor cars graded, and I was allowed a Morris 10. I said to the then Chancellor that if I could not get a bigger car, I would ask him to purchase a shoe-horn to enable me to get into it. The business of this miserably-designed car, which has enabled certain of the groups to contribute millions to charity, has prejudiced British industry. I carefully estimated that if this thing were revised and put on a proper basis, as I have submitted to the Chancellor over and over again, nearly another 500,000 people would be permanently employed in the motor-car industry of this country. My suggestions have always included a block tax.
    I admit that, with the revenue as it is—and I make a present of this point to the Chancellor, as I have always done—and with the war debt and the cost of the war, the right hon. Gentleman cannot in totality reduce the revenue. But it is a question of adjusting or revising, in order to achieve the greatest object. Therefore, I have taken the view that the one thing to aim at is a greater measure of standardisation. In the United States of America you can roll sheets 12 months on end without changing the roll. In this country you cannot roll more than a week because of the idiosyncrasies of the motor-car manufacturers. The result is that the cost of a motor car in the United States of America, per pound weight—at three times the wages—is 9d. a lb. on 1938 prices. In this country it is 1s. 4d. That is private enterprise in Britain.
    Sir Irving Albery: The same year?
    Mr. Bevin: The same year, 1938.
    Mr. Craven-Ellis: It is private enterprise in America, of course.
    Mr. Bevin: Yes, but it is private enterprise with a difference.
    Sir H. Williams: It is restricted by the State.
    Mr. Bevin: It is restricted by the State in this country. It has been designed in order to meet certain types of motor-car manufacture. We have given the McKenna Duties of 33⅓ per cent. which, in my opinion, is all they need. If anyone cannot manufacture within the 33⅓ per cent. duty, then he is inefficient. But to that we add a motor-car tax which has been far worse than the 33⅓ per cent. It has resulted in the manufacture of a car that we cannot export, and they have openly said to me when I have discussed it with them, "If we go in for the export trade, we endanger the home market." I claim that the motor-car industry has to make its contribution to the 50 per cent. increase in exports like every other industry in this country. That will not be disputed by anybody.
    My suggestion to them has been, over and over again, that they should agree to one tax up to 14.9 horse power. Whether it is measured in cubic feet capacity or in some other way, it would produce the same result. The result would be that, in this country, you would still have the home market but you would get a family car. Why do we make a car in this country in which only two people of normal size can ride on the back seat? [An Hon. Member: "Normal."] I was very careful to say normal. I think I am a man with a big future, but in any case I want a good family car in which the family can drive comfortably, and which would be better for driving, better for safety, and better for manipulation. Secondly, why have we always laid down that in working men's houses, such as Ministry of Health housing estates, you must not have a garage? Why should this class distinction be drawn, that I can have a garage at my house, but, if I live on a housing estate, I must not have a garage unless I put it up surreptitiously?
    Sir H. Williams: That is a municipal stipulation.
    Mr. Bevin: Yes, but it was laid down by this House under the last Government by the party opposite, when they passed

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    the Housing Acts which restricted the municipalities from doing the decent thing.
    When you get beyond the 14.9 you reach the bigger car of the export trade, and I would jump straight to the 26 h.p. or the 30 h.p. I do not believe that going up one horse power at a time is advantageous to the British motor car industry, and I do not think that one millionaire is sufficient compensation for the loss of the export trade. May I put another side? When we entered the war we found that the management of the motor-car trade was one of the most disastrous in the country. Will my friends from Birmingham admit to me that the pressure of cut prices drove the drop-forging trade almost to disaster? When this war broke out, the motor-car manufacturers, by playing off one little drop-forging maker against the other, in spite of the profits they were making, made it almost impossible for us to find the drop-forgings for the aircraft industry.
    There is nothing that is a more natural concomitant of defence than the motor-car industry. It is almost bound up with the need that arises if we get into trouble, yet I suggest that that industry never once considered what I call real national service, and its contribution to the State. All they were concerned about was this enormous profit over small cars. If the matter cannot be dealt with in this Bill, then I quite agree with my hon. Friend the Member for Southampton that it ought not to be left to them any longer. We ought to take the whole motor-car industry right from the component, the drop-forging, through to the car itself, and lay down a system of taxation and organisation so that not only have you a profitable export trade, a decent home market but, in addition, you have, as a result of your commercial enterprise, a good line of defence if you get into trouble.
    One last word about Bretton Woods. I have never been finally convinced about Bretton Woods. I take the line, and my Party takes the line, that, neither directly nor indirectly, will we again be anchored to gold in any circumstances. The export trade of this country carried about 1,750,000people. There are over 14,000,000 people employed in the home trade. I shall never be a party to any international agreement which, either as a result of the fluctuation of exchange,
    582
    speculation, or international action of that kind—which is not always of the highest moral standard—would prevent me from insulating the home market from the violent repercussions which will break down the home price level when these wide fluctuations take place on the international price level. However, I will join with anyone in finding a rational basis for an international price level, properly organised, provided it does not reflect itself in depressing the standard of life on the home market. As yet, neither the Chancellor nor Lord Keynes has ever been able to persuade me that there are sufficient safeguards in the Bretton Woods proposals to achieve that object.
    3.17 p.m.
    Captain Gammans: I do not want to follow the right hon. Gentleman the Member for Central Wands worth (Mr. E. Bevin) into a discussion on Bretton Woods. I have never been able to see that the Bretton Woods proposals in themselves would do very much to increase the volume of international trade; to me they seem rather like taking a man who is on his way to the bankruptcy court into a "pub" and giving him a drink and a "pep" talk, instead of taking him straight to the court.
    I would like to deal with a point raised by one or two speakers in this Debate in regard to motor-car duties. I do not know that I altogether agree with my right hon. Friend that a country must necessarily have a motor-car trade before it can build up a munitions industry.
    Mr. Bevin: I did not say that.
    Captain Gammans: That was certainly not the case with regard to Germany. Also, I do not go all the way with him in his denunciation of the motor car manufacturers, because I know for certain that at least two of them are bitterly opposed to the amended proposals which the Chancellor of the Exchequer brought forward a little time ago. However, the point I want to make is this. I am very glad that in this Finance Bill the Chancellor of the Exchequer has omitted the original proposals to substitute a cubic capacity tax for the old horse-power tax because, in fact, it was the horse-power tax under another name.
    I do not think anybody could have been quite happy about the motor car trade even before the war. We were producing

    583
    a car which was inferior, in many ways, to the American car, and for what we were getting for our money it was immeasurably more expensive. As the right hon. Gentleman pointed out, one of the great points of difference between this country and the United States was that, over there, many more of the artisan section of the community were able to afford a motor car than was possible in this country, and one only had to see them outside the big works in Pittsburg, or Detroit, or elsewhere, to realise what a very large percentage of the American working men went to work in a motor car instead of, as over here, in a public vehicle. I, for one, do not want to accept a standard of inferiority in that respect as compared with the United States. I sincerely hope that after this war a motor car will not be regarded as a luxury to a small section of the community to be used on Saturday afternoons, but will be available to the community as a whole. Even before the war that was not possible, and after the war, if we keep the horse-power tax in any shape or form, I am sure that that end will not be attained.
    For 25 years the British motor industry has suffered two handicaps under the horse-power tax. First, it has meant a multiplicity of models. Many of the bigger manufacturers, before the war, turned out seven or eight models, and only two or three days ago, I saw that they proposed to continue in that way. That is absolutely fantastic. [An HON. MEMBER: "Why?"] There is no mystery about it. What they were trying to do was to make a motor car which was not based on sound principles of engineering, but was designed to dodge the Chancellor of the Exchequer. In other words, we allowed a purely arbitrary thing like taxation to determine our engineering policy, which is as unsound and illogical as the old window tax. The second handicap from which the trade has suffered is that it was necessary for us to make a special model for export.
    When I was in the West Indies, about this time last year, I asked, in every island I visited, what were the prospects of an increase in the number of motor cars after the war from this country, even with the Imperial preference which the West Indies give us. One of their importers took me along to his garage and showed me two cars, one of 12 horse-
    584
    power, a British car, and the other of 30 horse-power, of American make. He said, "Both are the same price, so which would you have?" If you had to choose, there was no question about which you would have. One was a proper motor car, designed to meet conditions which prevail in that part of the world, with hills and not particularly good roads; the other a little bucket affair designed merely to dodge the Chancellor of the Exchequer in this country. That is the condition which prevailed before the war, and if we perpetuate the horse-power tax after the war in any shape or form that condition will continue. I thought the Chancellor made a fair offer to the motor industry. He said, "I have to get a certain amount of money from you, and I do not much mind how I get it." But he also said, "If we are to change our basis of taxation I hope it will be in a way which will increase our export trade in motor cars." I want to tell my right hon. Friend that he will not attain that end if he perpetuates the horse-power tax in any shape or form. What are the alternatives? I believe—
    Mr. Speaker: I am afraid I did not realise in the early part of this discussion what implications would be involved, but I must now point out that it is out of Order to discuss motor taxation in full detail because it is a matter which is not dealt with by the Bill and therefore not relevant in detail.
    Captain Gammans: Then may I conclude by saying that I am glad that my right hon. Friend has excluded his original proposals from this Bill. I hope that between now and the time when the new Bill comes along in the autumn he will reconsider the whole question of devising a car tax, which will assist the export trade.
    3.25 p.m.
    The Financial Secretary to the Treasury (Mr. Peake): I think I should reply briefly to one or two points which have been raised in this Debate although I understand, Mr. Speaker, that the Ruling you have just given prevents me from replying to the major part of this afternoon's discussion. First, I should like to thank my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) for his speech, and for his statement that the Government's

    585
    pledges in regard to war gratuities being exempted from tax will, in his view, undoubtedly be honoured by any Government which is returned at the General Election. I should also like to thank him for accepting the Clause in regard to the alteration in the Excess Profits Tax standard for small traders. I am sure that my right hon. Friend is right in saying that E.P.T. does bear very hardly upon the small and growing businesses which we need so badly in this country at the present time. I should also like to thank my hon. and gallant Friend the Member for East Lewisham (Sir A. Pownall)—no, I will not thank him because he is no longer in his place, but he did pay a tribute to the Treasury. My hon. Friend the Member for South Croydon (Sir H. Williams) has also gone, I see, and I think I had better leave him out of the picture, too.
    Mr. A. Bevan: Why should we be denied the nice things which the right hon. Gentleman intended to say about him?
    Mr. Peake: Very well then, I will make my observations. My hon. Friend fell into an error in assuming that the sterling debts overseas, commonly described as sterling balances, were an addition to the gross figure of the National Debt. They are, of course, largely included in the National Debt, and do not then form an additional liability. My hon. Friend then went on to take some exception to the Clause in the Bill which deals with the extension of utility marks by the Board of Trade. I would only point out that this Clause does not in any way weaken the control of this House over changes in the rates of Purchase Tax. In the course of the last few weeks quite a number of Motions for affirmative Resolutions have appeared on the Order Paper in my name, relating to such things as mattresses containing steel springs and aluminium hollowware, and I can assure my hon. Friend that similar Motions will continue to appear on the Order Paper, whoever the next Financial Secretary to the Treasury may be.
    My right hon. Friend who spoke from the Front Opposition Bench and who is, I think, the Member for Central Wandsworth (Mr. Bevin)—I am not sure because I have rarely heard him described by reference to his constituency—touched
    586
    on the Bretton Woods Agreement. We have been careful on all sides of the House, hitherto, to avoid a full-dress Debate upon Bretton Woods. No doubt that is a subject which will be raised early in the new Parliament. However, we have taken note of what he has said and my only word would be one of advice to hon. Members generally to keep off this topic on the public platform during the Election, because it is one which lends itself to a good deal of misunderstanding. There is, as my right hon. Friend the Chancellor said, very little in the Bill; there is nothing which is controversial, as I think is shown by the fact that all the speeches which have been made upon it have been devoted to a subject to which you, Mr. Speaker, have forbidden me to reply.
    Question put, and agreed to.
    Bill accordingly read a Second time.
    Bill committed to a Committee of the Whole House, for To-morrow.—[Mr. Cary.]

    INCOME TAX BILL
    As amended, considered.
    CLAUSE 3.—(Balancing allowances and balancing charges.)
    3.30 p.m.
    Sir Arnold Gridley: I beg to move, in page 5, line 32, at end, insert:
    "(6) Notwithstanding anything in the preceding provisions of this Section no balancing allowance or balancing charge shall be made to or on any person by reason of the sale or transfer of the relevant interest in any building or structure if such sale or transfer is made as part of or in connection with a transaction which involves the sale or transfer of the trade or undertaking for the purposes of which such building or structure is being used or of any part of that trade or undertaking which is capable of being carried on as a going concern and either—

    (a) the trade or undertaking the whole or part of winch is sold or transferred is a statutory undertaking within the meaning of Sub-section (7) of Section thirteen of the Town and Country Planning Act, 1944, and either—

    (i) the sale or transfer is made to a purchaser or transferee who has power under provisions enacted or authorised by Parliament to acquire compulsorily the trade or undertaking or part thereof; or

    (ii) the deed or other instrument of transfer is approved by a Government Department in the United Kingdom; or

    (b) the sale or transfer is made by one company with limited liability to another such company and either—

    587

    (i) one of the companies owns not less than 90 per cent. of the issued share capital of the other company either directly or through another company or other companies with limited liability, or

    (ii) not less than 90 per cent. of the issued share capital of each of the companies is owned by a third company with limited liability either directly or through another company or other companies with limited liability."

    I wish to ask your guidance, Mr. Speaker, on whether, while I am addressing my remarks to this Amendment, it would be in Order to refer at the same time to an Amendment in my name to Clause 14 which is in precisely the same terms.
    Mr. Speaker: I have decided not to call the second Amendment, so I think the hon. Member might refer to it.
    Sir A. Gridley: The House will remember that during the Committee stage I submitted an Amendment which was on somewhat similar lines to the one we are now considering but which I recognise was, in the circumstances, probably too widely drawn. I tried to make a case for such a proposal, narrowed down to the cases of public utility undertakings purchasable under Statute and to other sales which might take place on prescribed terms. The Chancellor of the Exchequer was good enough to say then that he thought there was a special case relating to this type of undertaking, and while I agree that he in no way committed himself he did promise to look into the matter again. I had hoped in the intervening period to see Amendments put upon the Order Paper or to have an opportunity, which has recently been afforded me, of a short discussion on this particular point.
    I do not know what view the Chancellor will take to-day upon these Amendments, but in justification of them I must point out that there is a very large number of electricity supply undertakings which, but for the war, would probably, ere now, have been purchased by local authorities. Their purchase by agreement has been deferred, but the purchase rights remain and may still be exercisable after the war. The undertakings are purchasable on terms prescribed by Parliament, which decided that they must be sold on the then value, and the then value immediately after the war, or whenever the permission
    588
    to revive these purchase powers is granted, may show a large or small capital appreciation—one cannot say until the valuations are made. But I do not think it is right that a balancing charge should apply, as it may unless this Amendment is accepted, in the case of undertakings which are saleable under terms prescribed by Parliament.
    Then there is this point, upon which I venture respectfully to suggest that very few Members are really well informed. There is no industry of which I have experience, in which the capital expenditure bears so high a proportion to the annual turnover, as the industry of electricity supply. If an undertaking has laid out £1,000,000 in capital expenditure it is fortunate if the total gross income which it obtains from consumers as a result of that expenditure is more than between £150,000 and £200,000 a year. In other words, it takes five or six years' annual income to equal the capital expenditure. Therefore, a balancing charge in the case of an undertaking whose capital bears such a very high relation to the annual income is much more serious than in the case of more normal businesses. Income Tax at 10s. in the £, as it is to-day, is also a very much more serious matter for undertakings that would be sold, perhaps, during the next two or three years than it was in the case of undertakings which were purchasable when Income Tax was only 5s. or 6s. 6d. in the £.
    We do not know what legislation will be brought before Parliament in the near future dealing with this industry. We all know that, splendidly as electricity undertakings have performed their duties, there are possibilities of improvement in organisation in various ways. I think it is generally agreed that far too many separate undertakings are operating today, and that in the near future steps should be taken to reduce that number by combinations or groupings. Human nature being what it is, we should all agree, I think, that that can be done more rapidly and much more pleasantly by voluntary agreements than by compulsion, and I do not want this House to take any steps in this Bill which will frustrate the objectives which many of us with experience in these matters are keeping rightly in view, and that is combinations by voluntary means.
    There is another point which I would ask the House to note. If a sale is con-

    589
    templated the undertaking which is selling its property can adopt one of two methods. It can sell its shares for shares in the purchasing undertaking or it can take cash. If a balancing charge is to apply then I think a share deal will result, and there will be one unfortunate consequence of that. It will mean that the selling company which exchanges its shares for shares in the purchasing company will still remain in existence; it will have a corpus; it will have to present annual accounts and have them audited; and we shall thus be perpetuating a large number of concerns which ought to be wound up. That is a point which I think the Chancellor will have to meet. There may be great injustice to municipalities if they are called upon to part with their undertakings, because they have not a share capital construction as companies have, and if they are called upon to sell, they will, presumably, part with their assets for cash, and they may attract a balancing charge, which I think would be an injustice.
    This is, I agree, a very complicated Amendment. It is by no means an easy one to explain and perhaps I myself do not really understand it as thoroughly as I ought to. But I have given the Treasury four or five days in which to consider these Amendments, which I sent to them before they appeared on the Order Paper, and I hope the Chancellor, with his experts, has been able to consider the statements which I have presented for their consideration, and that to-day I shall hear that he is prepared to accept these Amendments, which deal both with buildings and plant and machinery, and, if not, that he will hold out some hope that in the near future, possibly by another Bill, he will be prepared to meet what is admittedly a difficult situation.
    Mr. David Eccles: I beg to second the Amendment.
    I confess that I have only seen this Amendment to-day, but the point that strikes me in connection with it is this. If two companies have a share capital like the two great cable companies which have so recently amalgamated, no balancing charge can arise, but a utility undertaking, in the terms of the Statute governing that undertaking, must, when its assets are transferred, sell as an undertaking. Then a balancing charge is
    590
    attracted, and it is really not fair to make this distinction against a concern which has not share capital. Anyone interested in bringing electricity to the rural areas must hope for amalgamations as soon as they can be carried out, and it is certain that if a large financial obstacle is placed in the way, such amalgamations will be less likely in the near future.
    3.45 p.m.
    The Chancellor of the Exchequer (Sir John Anderson): The subject-matter of this Amendment is complicated and technical, but I shall endeavour to put the case as it appears to me as simply as possible. As I understand it there are two quite separate issues, both of which, as my hon. Friend the Member for Stockport (Sir A. Gridley) said, were raised in Committee. They were raised in Committee at comparatively short notice, and I said that I would consider the remarks of my hon. Friend to see whether, on more mature consideration, I thought there was a case for some alteration in the scheme of this Bill in regard to the two really separate matters that were raised. The first matter concerns transactions between associated concerns and the case that was put to me was that such transactions should not be treated on exactly the same footing as transactions by way of sale of plant or machinery between concerns which were quite separate. I think my hon. Friend will recognise that the Amendment which I have on the Paper does go a very long way to meet the case that was put forward; in fact, I think it is somewhat more favourable, in one respect at any rate, than his own proposal, because it deals with, all cases where there is a majority interest, and not merely with cases where there is a 90 per cent. or greater interest, as is proposed in the Amendment. I do not think I need say anything more about that part of my hon. Friend's proposition.
    The other part of his proposal raises a question which I said I would look into. The question is this. Do the circumstances of compulsory acquisition of assets create a case for exceptional treatment as compared with voluntary acquisition? That, briefly, is the substance of the matter. I have considered my hon. Friend's representations, I hope he will believe, very carefully and sympathetically. I am sorry to say that I cannot see that a case has

    591
    been made out for the exceptional treatment for which he asks; in other words, I cannot regard compulsory acquisition as creating a situation calling for different treatment from that which would be given, according to the scheme of the Bill, to precisely the same transaction carried out on a voluntary basis.
    My hon. Friend naturally devoted his remarks in the main to the position of electricity undertakings; although the Amendment would cover every form of compulsory acquisition. What is the position in regard to those electricity undertakings, to which I propose to devote my remarks? Those undertakings have been allowed to engage in business under a licence, an essential provision of which was that they were under the liability of being taken over compulsorily in certain specified circumstances. There is nothing in the law governing compulsory acquisition from which it could be inferred that such a provision as we are proposing now to introduce could properly be regarded as a breach of a statutory undertaking or a statutory understanding. Nothing of the kind. That is what I was looking for, and I found nothing of the kind. I can see only a transaction the financial effect of which is exactly the same as would be the case with a similar transaction voluntarily entered into. If we accept that the purpose of this Bill is to write off capital expenditure incurred in earning profits—and inasmuch as the rate at which the expenditure is written off must inevitably be more or less arbitrary, it is an empirical rate—we have, therefore, to introduce, in order to avoid inequalities and injustices, the conception of a balancing charge, or a balancing allowance, the two being co-relative, for the purpose of correcting, in the light of ascertained facts, the operation of the empirical allowance which is given year by year after the initial allowance. That is the purpose of it.
    If that principle is accepted, it seems to me that it is applicable in just the same way to the case of compulsory acquisition as to the case of voluntary acquisition. After all, it may be bad luck—I will not seek to deny it—that transactions may come along in the near future in respect of assets which have perhaps temporarily an enhanced value and that enhanced value on realisation will attract taxation; but it may at other times be the other wav round, and assets may be aquired
    592
    compulsorily at a rate considerably below the written down value—because the current market value is the basis—and in that case, of course, there would rightly be a balancing allowance. If the point were pressed, I think one would be justified in asking oneself, why should an undertaking, which from its very inception was subject to the liability of compulsory acquisition, be put in a position when it goes out of business—when the contingency contemplated at the outset actually arises—to go away with a substantial profit due to an enhancement in values without making its due contribution in the way of taxation according to the general scheme of the Bill? Therefore, for these reasons, which I hope I have explained adequately, I do not feel it is possible, at any rate as I am at present advised, to accept this proposal, and I hope my hon. Friend will not press it.
    As regards the point made by my hon. Friend the Member for Stockport, the point about the purchase of shares as an alternative to the purchase of assets, I am not quite sure I followed him. I was under the impression that where an electricity undertaking is acquired by a public authority, the transaction has to take the form of an acquisition of the assets. That, I think, is not really relevant to the case I am seeking to make against the Amendment, and I do not propose to pursue the matter further.
    Mr. Ede: I agree generally with the proposition that the Chancellor of the Exchequer has advanced, but I would point out to him that the matter is exceedingly complicated by the exact point in time that we have reached with regard to the development of the electricity supply industry. Under the principal Act which governs this matter, where a local authority allowed its Order to be developed by a company, the purchase rights mature 45 years after the date on which the transfers took place. That means that during the war there have matured all the Orders that were granted between 1895 and 1900, or thereabouts. That period was a very active time in the promotion of these Orders, with the result that a very large number of them have matured during the war, and a considerable number will mature during the next few years. The matter is already terribly complicated owing to the fact that the House, in 1888, decided that this service should be originated and conducted on a

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    parochial basis. Since that time there have been so many readjustments of local government boundaries, and the development of electricity has gone so much beyond the confines of mere parish boundaries, that the problem of compulsory purchase is now very complicated.
    I speak with some feeling on the matter because an authority of which I was chairman, the London and Home Counties Joint Electricity Board, carried through more compulsory purchases, I believe,—the number was six—in the period immediately before the war than any other undertaking in the country, and, therefore, I have had some experience in the witness chair and elsewhere of having to deal with the complications that existed before the war. I tremble to think how any witness is to be able to give reasonably truthful answers on the whole of the detailed propositions that will be put to him in the near future when he will be confronted with the old complications, plus the complications of postponement of purchase, plus the complications that are dealt with in the Amendment. I was hoping that we might have had some indication from the Chancellor of the Exchequer that when the electricity supply industry comes up for consideration, as it must do in the very near future, the whole of these complications will be borne in mind when the legislation is discussed, including the kind of complications with which the hon. Member for Stockport (Sir A. Gridley) is dealing in the Amendment. I think the hon. Member, in depicting the serious plight of the municipalities, went a little beyond what could really be based upon this Amendment; personally, I am not nearly so frightened about what will be the effect upon municipal management as he appeared to be. But the whole subject has become so complicated that this additional complication is only an added reason for some early settlement being reached as to what the future organisation of the electricity supply industry is to be.
    Sir A. Gridley: I am bound to say that I am bitterly disappointed the Chancellor has shown no inclination to meet me in this matter. I am reinforced in my remarks because I have support from my right hon. Friend the Member for South Shields (Mr. Ede) who, I know, has had
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    many years' experience in assisting in the management of an important section of the industry in and around this great Metropolis. If we are to allow this Clause to go through—
    Mr. Speaker: The hon. Member may not make a speech in withdrawing the Amendment.
    Sir A. Gridley: I was about to beg to ask leave to withdraw the Amendment, but I am not unhopeful that the Chancellor will think again about this matter, and, if he does, I think he will see that there would be some advantage in what I am trying to secure.
    Amendment, by leave, withdrawn.
    CLAUSE 8.—(Definition of "industrial building or structure.")
    Mr. Hynd: I beg to move, in page 11, line 44, after "structure," insert:
    "used for the purpose of the repair of motor vehicles; or."
    The general principle, with the details of which this Amendment deals, was discussed on a much wider basis on the Committee stage, but as far as the motor repair trade is concerned, I think some further consideration ought to be given to the proposition. On the Committee stage the Chancellor informed us that the general basis of the concession in Part I is in line with the derating arrangements. That is an arbitrary line. I believe the purpose of the concession is to encourage the development of the industries concerned for the purpose of enabling them to make up for lost time and get into their stride after the war. In the motor repair trade, the repair shops, which are an essential part of the trade, are not given the same concession as is applied to the repair shops of the big industrial concerns. I think no one will deny that during the war the motor trade repair works have played a considerable part, and that, compared with other industries, they are in no less need of all the encouragement that can be given to enable them to get on with the tremendous amount of post-war work. I do not propose to argue the case at any length, because the general principle was fairly well discussed, and I think it is understood by the whole House. I hope the Chancellor will give some consideration to this section of the trade in the application of the concession.
    Mr. Deputy-Speaker (Mr. Charles Williams): As there is no seconder, I call on the right hon. Gentleman who is to move the next Amendment.
    4.0 p.m.
    The Financial Secretary to the Treasury (Mr. Peake): I beg to move, in page 11, line 45, after" at," insert "or in connection with the working of."
    This is little more than a drafting Amendment to meet a point raised by my hon. Friend the Member for Chippenham (Mr. Eccles) in Committee. I do not think the House will require an explanation of a matter which is extremely technical in its character.
    Amendment agreed to.
    CLAUSE 21.—(Expenditure on alterations to buildings in connection with the installation of machinery or plant.)
    The Attorney-General (Sir David Maxwell Fyfe): I beg to move, in page 24, line 3, leave out "in connection with," and insert "incidental to."
    The object of this and the next Amendment—in line 4, leave out from "trade," to "the" in line 6—is to redefine the scope of the Chancellor's new provision, now Clause 21, which enables certain building alterations to rank for allowance as though they were part of the plant or machinery in connection with the installation. We discussed the matter and the examples are well known to the House. The sort of example that we had in mind was air-conditioning plant and the putting-in of double windows in order to have the plant in a proper situation.
    Sir John Mellor: I thank the Attorney-General for these Amendments, especially the second, but I should like him to explain the distinction between the expressions "in connection with" and "incidental to." It seems to me a rather fine distinction and I am not quite sure how it will work out in practice.
    The Attorney-General: "In connection with" has a wider connotation. "Incidental to" denotes rather than connotes an ancillary process dependent on another. It is not too narrow. That is the general distinction, and the example that I gave is a good one of something which is really incidental, that is, putting in a refrigerating plant, and where you have to have a certain type of window. It is easier for a tribunal or for
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    anyone who has to consider the matter to determine that something is incidental, whereas the words "in connection with" have a wider connotation, and my right hon. Friend did not feel that he could go as far as that. I think it will cover, as it is designed to cover, all the examples that were quoted and generally approved as being necessary in this connection.
    Amendment agreed to.
    Further Amendment made: In page 24, line 4, leave out from "trade", to "the", in line 6.—[The Attorney-General.]
    CLAUSE 25.—(Expenditure to which Part III applies.)
    4.5 p.m.
    Mr. Peake: I beg to move, in page 26, line 3, after "building," insert:
    "where the whole of the building was."
    The object of this and the following Amendment is to make it clear that, if an office of a mine or oil well is part of a building or structure the rest of which qualifies for allowance, and the office part represents not more than a tenth of the whole, it will not be excluded from allowance under Part III of the Bill.
    Mr. Eccles: I thank my right hon. Friend for these Amendments, but I should like to ask what happens if an office has a welfare room, though it was not constructed originally for that purpose. Would an apportionment be made?
    Mr. Peake: I should rather think that the test for tax purposes is the user of the premises and not the purpose for which they were constructed, but I should hesitate to lay down the law on a point of that character.
    Amendment agreed to.
    Further Amendment made: In page 26, line 4, at end, insert:
    "(vii) any expenditure on so much of a building or structure as was constructed for use as an office, unless the capital expenditure on the construction of the part of the building or structure constructed for use as an office was not more than one-tenth of the capital expenditure incurred on the construction of the whole of the building or structure."—[Mr. Peake.]
    CLAUSE 30.—(Regulations.)
    Amendments made: In page 30, line 34, after "potential," insert "future."
    In line 34, leave out "the purposes of any such provision," and insert "any of those purposes."—[Sir J. Anderson.]
    CLAUSE 43.—(Interpretation of Part V, etc.)
    Amendment made: In page 42, line 37, after "Provided," insert. "that."—[The Attorney-General.]
    CLAUSE 49.—(Valuation.)
    Amendment made: In page 46, line 4, after the second "the," insert "net."—[The Attorney-General.]
    CLAUSE 55.—(Manner of charging tax and granting of allowances in case of traders.)
    Mr. Peake: I beg to move, in page 48, line 45, at end, insert:
    "(2) If, in the case of a trade which consists of or includes the working of a mine, oil well or other source of mineral deposits—

    (a) a balancing allowance falls to be made under Part I of this Act for the last year of assessment during which the trade is carried on;

    (b) the event giving rise to the allowance is the mine, oil well or other source ceasing, to be worked or the coming to an end of a foreign concession;

    (c) the allowance is in respect of expenditure on a building or structure which was constructed for occupation by, or for the welfare of, persons employed at, or in connection with the working of, the mine, oil well or other source; and

    (d) full effect cannot be given to the allowance because of an insufficiency of profits or gains for the said year of assessment,

    the person entitled to the allowance may claim that the balance of the allowance may be given for the last preceding year of assessment, and so on for other preceding years, so however that no allowance shall be given by virtue of this subsection for any year earlier than the fifth year before the first mentioned year of assessment."
    This Amendment meets a point raised by my hon. Friend the Member for Chippenham (Mr. Eccles) in Committee, and it provides that balancing allowances in certain cases where a mine or oil well comes to an end may be spread back over the six years preceding the conclusion of operations at the mine or well in question.
    Amendment agreed to.
    CLAUSE 59.—(Special provisions as to certain sales.)
    Amendments made: In page 52, line 31, leave out
    "provisions of the next succeeding Sub-section," and insert:
    "succeeding provisions of this Section."
    In line 39, at beginning, insert:
    "subject to the provisions of the next succeeding Sub-section."—[Sir J. Anderson.)
    Mr. Peake: I beg to move, in page 53, line 5, at end, insert:
    "Provided also that where the sale is one to which paragraph (a) of Sub-section (1) of this Section applies and took place before the appointed day and the seller acquired the machinery or plant on or after the sixth day of April, nineteen hundred and forty-four, paragraph (a) of this Sub-section shall not apply."
    This and the following Amendment provide that in the case of transactions between associated companies balancing charges shall not be made in respect of what are in fact simply book transactions—transfers from one pocket of the concern to another.
    Amendment agreed to.
    Further Amendment made: In page 53, line 16, at end, insert:
    "(4) Where the sale is one to which paragraph (a) of Sub-section (1) of this Section applies and paragraph (b) of that Sub-section does not apply, and the parties to the sale by notice in writing to the surveyor so elect, the following provisions shall have effect:

    (a) Sub-section (2) of this Section shall have effect as if for the reference to the price which the property would have fetched if sold in the open market there were substituted a reference to that price or to the sum hereinafter mentioned, whichever is the lower;

    (b) paragraph (b) of Sub-section (3) shall not apply; and

    (c) notwithstanding anything in the preceding provisions of this Section, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances or deductions in connection therewith as were done by or allowed to the buyer.

    The said sum is—

    (i) in the case of an industrial building or structure, the residue of the expenditure on the construction of that building or structure immediately before the sale, computed in accordance with the provisions of Section four of this Act;

    (ii) in the case of machinery or plant, the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with the provisions of Section nineteen of this Act;

    (iii) in the case of assets representing the expenditure to which Part III of this Act applies, the residue of the expenditure attributable to those assets immediately before the sale computed in accordance with the provisions of the said Part III; and

    (iv) in the case of patent rights, the amount of any capital expenditure on the acquisition thereof remaining unallowed computed in accordance with the provisions of Section thirty-six of this Act:

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    Provided that in computing the said sum in the case of any buildings, machinery or plant, any sums provisionally allowed under Sub-section (2) of Section nineteen of the Finance Act, 1941 (which relates to exceptional depreciation allowances) shall be left out of account."—[Mr. Peake.]
    CLAUSE 68.—(Other provisions as to interpretation.)
    Amendments made: In page 59, line 8, after the second "farm," insert "or forestry."
    In line 11, after the second "farm," insert "or forestry."—[Sir J. Anderson.]
    Motion made, and Question proposed, "That the Bill be now read the Third time."
    4.13 p.m.
    Mr. Eccles: I should like to thank the Chancellor for this Bill, which will be a very useful one. I am specially familiar with the parts dealing with agriculture and mining, and both of those sections will be of real help. I should like to ask my right hon. Friend whether under Clause 30, when the Regulations are made and the rules laid down which will govern the treatment of the mining industry, representatives of the industry will be given the fullest possible chance to discuss with his advisers what those Regulations shall be. It will be very hard to make Regulations which will fit every kind of mine. I am sure that the representatives of the industry, if they are given a chance to discuss them, will do so with pleasure and with profit to the Treasury.
    4.14 p.m.
    Mr. Pethick-Lawrence: I am very glad that in the massacre of the innocents this ewe lamb has escaped the general slaughter. I think that the Chancellor's concessions, which will not probably cost a great deal in terms of to-day's figures, will be of some benefit to the further enlargement of industry. I hope they will have a substantial effect in that direction. We shall watch the results with anticipation. We on this side wish the Bill well and hope that, when it comes into operation, it will promote prosperity and will prove as useful as its authors hope it will be.
    4.15 p.m.
    Sir J. Anderson: In regard to the point raised by my hon. Friend the Member for
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    Chippenham (Mr. Eccles), I readily undertake that there shall be consultations with those concerned before the Regulations under Clause 30 come into effect. I am grateful to my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) for his observations on this Bill, which has been described, not, I think, quite accurately, as a modest attempt to do something for industry. I thought, and I still think, that it was rather an ambitious attempt. It broke new ground, and I think it will be really helpful to industry, not merely by what it contains, but as an encouragement by indicating that it is the desire of the Government, in a regime of inevitably heavy taxation, to pay due regard to the effect of taxation upon productive industry. I am grateful to hon. Members in all quarters of the House for the manner in which they have facilitated the passage of the Bill.
    Question put, and agreed to.
    Bill accordingly read the Third time, and passed.

    DISTRIBUTION OF INDUSTRY BILL
    As amended (in the Standing Committee), considered.
    NEW CLAUSE.—(Buildings erected under ss. 1 and 5 to comply with planning schemes.)
    The Board of Trade shall not erect any building or carry out any work in pursuance of Section one or five of this Act so as to contravene the provisions of any scheme in force under the Town and Country Planning Act, 1932, the Town and Country Planning (Scotland) Act, 1932, or any enactment repealed by either of those Acts or by any enactment thereby repealed.—[Mr. Lyttelton.]
    Brought up, and read the First time.
    4.17 p.m.
    The President of the Board of Trade (Mr. Lyttelton): I beg to move, "That the Clause be read a Second time."
    This new Clause is introduced to carry out the undertaking given by my predecessor in Standing Committee during the Debate on an Amendment in the name of the hon. Member for Stone (Sir J. Lamb).
    Question put, and agreed to.
    Clause read a Second time, and added to the Bill.
    CLAUSE 9.—(Supplementary provisions relating to s. 8.)
    Mr. Lyttelton: I beg to move, in page 6, line 3, leave out "or extension of an industrial building."
    This and the next two Amendments are consequential on the deletion of the original Clause 9.
    Amendment agreed to.
    Further Amendments made:
    In page 6, line 17, leave out "or extension."
    In line 22, leave out "or extended."—[Mr. Lyttelton.]
    CLAUSE 14.—(Interpretation.)
    Mr. Lyttelton: I beg to move, in page 8, leave out lines 24 and 25.
    This Amendment is also consequential on the deletion of the original Clause 9.
    Amendment agreed to.

    FIRST SCHEDULE.—(Development Areas.)
    The following Amendments stood upon the Order Paper:
    In page 10, line 8, after "Lanark," insert "Linlithgow."
    In page 10, leave out lines 22 to 25.—[Mr. Mathers.]
    Mr. Mathers: May I ask whether you are proposing, Mr. Deputy-Speaker, to call the Amendments in my name?
    Mr. Deputy-Speaker (Mr. Charles Williams): It is not proposed to call these Amendments, because they would extend the scope of the Bill.
    Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Lyttelton.]
    4.19 p.m.
    Mr. Dalton: I would not like this Bill to pass to another place without saying a word or two on it, since I, when sitting on that side of the House, originally introduced it. Broadly speaking, the Bill has been well received by the House and, although we have in Committee upstairs eliminated one Clause, I regard what remains as being of the greatest importance and of the greatest immediate value to large sections of the community—those 6,000,000 people who live in the Development Areas as scheduled in the Bill. Had this Bill not gone forward before Parliament was dis-
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    solved, I should have regarded it as a great disaster for these industrial communities. I trust that it will now be possible for my right hon. Friend, who has come back after a short absence to the Board of Trade, and who is, therefore, so well acquainted with all the arrangements which have been made there, to allow certain plans to go forward as an administrative matter, even perhaps, in the midst of the strife of coming events. He will find those plans there, and my right hon. and gallant Friend the Parliamentary Secretary is very well acquainted with them. I hope also that he will enable certain industrial developments, for which plans had been made and which had been held up pending the obtaining of these legal powers, to go forward rapidly. They are plans with regard to factory development, trading estate development, and the like, and I trust that we shall be able to hear soon from my right hon. Friend or through other channels of publicity of progress being made in those directions.
    With regard to the Clause that has been dropped, the matter with which it dealt is not, in my mind, immediate. The fears that were felt in some quarters of the House as to the rapid and drastic application of Clause 9 were, in my view, unfounded. There was no immediate danger to any of the areas who thought that they might be restricted under the Clause. However that may be, I think it was a good bargain to get rid of opposition to the rest of the Bill by postponing consideration of that other matter until after the Election. We shall then be able to look at it with a freshness which will be enhanced by the fact that the composition of the House will be different, and, we hope, beneficially changed. We shall be able to consider it in that new setting. I thank my immediate successor at the Board of Trade and my right hon. and gallant Friend, who shared with me for over three years the burden and heat of long days and nights, for the assistance they have given in putting this Measure through. If this were the last Measure which was embarked upon by that great coalition Government, which has now been dissolved into its component parts, it would be no bad Parliamentary ending for that joint venture.
    4.24 p.m.
    Lieut.-Commander Bell: I would ask for that indulgence which the

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    House customarily shows to those addressing it for the first time and which is more especially needed in my own case as one who is taking part in Debate within such a short interval of being introduced into the House, but apart from the rate at which we in this House live, or perhaps I should say die, in these days, I am particularly anxious to have this opportunity to speak upon a Measure which is not only a Measure of great national importance, but one which closely affects the constituency which I represent and, indeed, the whole area in which it is situated. We in those areas, which were originally called "Depressed" Areas, then "Special" Areas and now "Development" Areas, are beginning to feel a little depressed again, because we have been promised this Bill for a long time and we were looking forward to great things from it. We were very grateful when this Bill was introduced, because it seemed at last that we were to get some of that treatment to which we had been looking forward. We are still grateful for the Bill as it emerges on Third Reading, but we are grateful rather in the manner in which people are grateful for very small mercies. I agree with the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) when he says we had made a good bargain, and I want to thank the Government for dropping Clause 9 and saving the Bill. The mere fact that it has been saved at a time when so many have been lost will itself be accepted by the people in the Development Areas as a proof that the Government mean business this time.
    I must, however, in a small measure join issue with the right hon. Gentleman, because there is an element of time in this matter. It is true that the actual implementation of the Clause which has been dropped would not have taken place for some considerable time, but there is an advance effect of which we in South Wales and Monmouthshire have had some experience. The knowledge that a certain Measure is coming into effect influences conduct in advance, and we have had cases of people who have said, "We will come to your area if we have to, but if we have not to, we are going to London." These people, I am afraid, may now start making arrangements for going to London or a similar area. That is a detriment from which we suffer immediately, or, at
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    any rate, will suffer in the near future, from the transformation which this Bill has undergone. At the same time, we are grateful to the Government for pressing the Bill forward, and I certainly agree that, had that contentious Clause not been dropped, we should not have had the Bill by the end of this Session. I am far from blaming those people who have felt it necessary to oppose the Bill, because the Clause which has been dropped was rather drastic in its scope, and, had I been a Member for an area not included in the Schedule as a Development Area, I should have felt it my duty to examine it very closely before it was put on the Statute Book.
    We in the Development Areas do not wish to enjoy any prosperity at the expense of any other parts of the country. We are asking the Government for a Measure which will break the vicious circle that is caused by the cumulative effect of success, on the one hand, and failure, on the other. That is all we want. We do not want to deprive other areas of the development and growth of their native industries to which they are fully entitled, and it is not in any such selfish attitude that we shall at a later date press the House for further measures. There are certain enabling Clauses in the Bill which will be of great value if the Minister uses them, as I hope he will, with vigour and imagination. One of the greatest difficulties we have in those areas in persuading industrialists to establish industries in them is the difficulty of obtaining houses for key workers. That is a serious practical difficulty at the moment, and I hope my right hon. Friend will give it his early and sympathetic attention. If the Board of Trade use the powers which are left in the Bill to the best advantage, there is much that can be done for the benefit of those areas in the period between now and when it will be possible to take further measures, because those powers are very useful, though they are of a rather miscellaneous character.
    Apart from that, there is little left in the Bill that is not familiar to us. There is, of course, the familiar non-controversial measure of milking the Treasury, which I notice usually survives all party controversy, and I am far from regretting that any money should come to the Development Areas out of the Bill. But I should be sorry if a policy of casual grants and loans were to take the place

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    of a coherent policy of distribution of industry. It would be very dangerous to the national interest if we were to go ahead with a policy of miscellaneous powers and casual grants and loans without the other side which has now been dropped. That would result either in the job not being done thoroughly, or else in the expense being formidable, and we would have in those areas a number of industries established by Government assistance which would have got into the habit of waiting with their mouths open for more and more to be put in from the Treasury, and that is certainly not what we want.
    I have made these points with the sole intention of drawing the attention of my right hon. Friend to the fact that we shall be coming back to him later. We have been promised a Distribution of Industries Bill and we are now given something which is called a Distribution of Industries Bill, but I very much wish that the Title of this Bill had been changed. I hope I am not out of Order in saying so. I wish the Title of the Bill had been changed by the Committee because it puts us in a very bad tactical position for the future. We have, apparently, got what we asked for, but in actual fact this Bill is no more a Distribution of Industries Bill than it is a Matrimonial Causes Act or something of that kind. It is simply an Industries Facilities Bill, and it has not even touched the fringe of distributing industry in one way or the other. So I assure my right hon. Friend that we shall be worrying him about this matter again. If he is in the same position in the new Parliament, as I hope and am sure he will be, and if I am in the same place in the new Parliament, as I may perhaps be forgiven for hoping I shall be, I can assure my right hon. Friend that I shall be importuning him very early indeed in the Session with requests for a further dispensation which will not merely palliate the long-standing ills of these areas, but will give back to them that independent vitality to which they have been strangers for so long.
    4.32 p.m.
    Mr. Colegate: It is a great privilege to have the opportunity of congratulating the hon. and gallant Member for Newport (Lieut.-Commander Bell) on his very able speech. I feel that
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    not merely is he to be congratulated, but his constituency is to be congratulated on having someone who shows such ability to plead its cause and necessities in this House. I hope he will come back here, and then I am sure we shall listen to any case that he cares to put forward on the lines that he has advocated. I welcome the Bill in the rather altered form in which we are now asked to pass it. I was very glad that the original Clause 9 was dropped, because it was a matter which was far too controversial to be threshed out in the limited time which was available if we were to get the Bill at all.
    Mr. Deputy-Speaker (Mr. Charles Williams): The hon. Member cannot discuss, on the Third Reading of the Bill, a Clause which has been dropped. I think he should abstain from discussing it.
    Mr. Colegate: I was not proposing to discuss the Clause, but surely it is in Order on the Third Reading to welcome the fact that the Clause has been dropped.
    Mr. Deputy-Speaker: The hon. Member cannot on the Third Reading discuss anything that is not in the Bill. If he mentions the omission it will have to be with great discretion.
    Mr. Silverman: If the hon. Member is entitled on Third Reading to congratulate the Government on dropping the Clause, will I be entitled later to regret that they have dropped it?
    Mr. Deputy-Speaker: That is where the matter of discretion would have to come in, but I really thing we had better not argue about it.
    Mr. Colegate: I have no more to say about it except that I really was glad that the Clause had not been proceeded with. What I wish to refer to in particular is my regret that owing to the shortness of time we have not been able to discuss the First Schedule as fully as we would have liked, because that Schedule raises large questions of principle as well as of the inclusion of particular areas which appeal to hon. Members on both sides of the House. I understand how that was, but I would point out that owing to the fact that the Schedule confines the best part of the Bill, with the exception of what is now Clause 8, to the Development Areas one of the most useful Clauses is of very limited application. I refer to Clause 5.

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    In my opinion, Clause 5 is most valuable because of the power which it gives to the Board of Trade to deal with derelict areas, which to many of us mean areas where there are tip heaps, some of them dating back generations. I believe this is the first time that any Government have taken the responsibility of dealing with those tip heaps. There may be under the Town and Country Planning Act certain powers with regard to planning, but this is a Clause which gives the Board of Trade the power and the money to do it. In many of these areas it is impossible for local authorities—sometimes small local authorities—to face the expense of removing thousands of tons of earth and finding a place to put that earth when it has been removed, which is not always easy. I did appeal to my right hon. Friend to deal with this matter, and he pointed out that it could have been dealt with in a very simple way by leaving out the word "development" in line 2 of Clause 5, but I understand that would have been out of Order because it would have raised the question of further expenditure, and therefore the Bill would have had to be re-committed.
    If in a few weeks' time my right hon. Friend is still in the position he occupies now I will ask him to add one Clause to the Bill to deal with this subject. It raises wide feeling in large industrial areas, and I think there would be plenty of support if Clause 5 were put in another form so that it would be applicable to any industrial area where it is necessary to remove tip heaps. I would say in connection with the inclusion of certain areas under Schedule 1 that it would have been desirable, had we had time, to thresh it out in order to try to get a principle upon which to settle whether or not an area should be included in that Schedule. That has not been done. The First Schedule simply consists of the old distressed areas. I think I am right in saying that no new areas have been included, but in certain small areas there is as acute distress and as great a need for the application of the first part of this Bill as there is in the areas which have been actually scheduled. There, again, we must hope that we may come back to see whether we cannot do something further in that respect.
    Mr. Deputy-Speaker: The hon. Member is again trying to insert something into the Bill. He cannot do it now.
    Mr. Colegate: I was indicating in a very simple way some of the points which arise on the First Schedule, particularly the question of principle. Perhaps I have wandered a little, and if so I am sorry. I was on the principle of the matter, and that, I think, I am entitled to discuss.
    One other point is that there is in this Bill a very valuable provision by which houses for managers and key workers can be provided. As the hon. and gallant Member for Newport said, that is a vital matter, because if industries are transferred from one place to another one of the first things to do is to provide managerial houses and to start what are commonly called staff houses and key workers' houses. Local authorities have no power to do that, but under the Bill the Board of Trade have the power to do so. We must hope that in the future there will be provision for that kind of thing in all areas. Having said that, I am bound to say that I welcome this Bill. I believe a good deal of work can be done under it, and I am certain my right hon. Friend will do it, and that those in industrial areas can look forward with confidence to getting a fresh start after the war.
    4.40 p.m.
    Mr. Silverman: Ever since I have been a Member of this House discussion has continually been directed to the distribution of industry and to the absence of industry in certain parts of the country. The discussion has always been directed to inducing the Government to take powers to control and to direct industry, to enable the community as such to have some say in where industries shall go and who shall be employed. At last we have a Bill that does something about it, and to that extent we are all satisfied to welcome it and to give it a Third Reading.
    There are in the Bill things which limit its usefulness. I say nothing about those things which are not so limited, but there is a Schedule, and the effect of the Schedule is to take away from the Government powers which at long last it is, in principle, admitted the Government should have. Nobody denies that the Government ought to have powers to say to industry, "You shall not go where you like. It shall not be left to you to take such risks as you think proper. It is not a matter which can safely be left to the private initiative of commercial or indus-

    609
    trial undertakings. It is a matter in which the community as a community has an interest, because the community pays for the mistakes that are made, and the risks that are taken are not taken by the industrial and commercial undertakings in their own affairs but are taken with the community's wealth, property and welfare." During the 10 years I have been a Member of the House of Commons we have had to fight to persuade the Government that they ought to take a share in these matters, and at long last, on the eve of the Dissolution of this Parliament, we have a Bill which concedes the principle—a principle advanced by a Government who propose to go to the country and ask for a mandate not to interfere at all, but to leave all these things to the private judgment of selfish persons and concerns with only their own interests to consider. [Laughter.] I do not know why the hon. Gentleman laughs, but from what I heard of his speech I should have thought he would have agreed with me.
    Mr. Colegate: With much of what the hon. Member has said, I agree, but it is useless to try to prejudice the initiative of anybody by calling it selfish.
    Mr. Silverman: I am not seeking to prejudice anybody in saying that a private company look after their own affairs. It is not a charge against them. What else can they do? It is no good the hon. Member shaking his head. The duty of a board of directors is to their company and to the shareholders.
    Mr. Deputy-Speaker: I am sorry to interrupt the hon. Member, but I must point out that the Bill has nothing to do with the duty of a board of directors.
    Mr. Silverman: If I have transgressed, it was only in reply to an interruption which I gave way to hear, and which was allowed. I repeat that the Bill concedes a principle for which we have contended in this House for many years, which that side of the House have always contested and which, from all announcements, they propose to contest in the coming General Election. I suppose that is why we have a Schedule which makes it necessary for an area to fall into a very devastated and derelict condition before it gets the benefit of these powers. I now see that the Minister shakes his head. He ought to know—unless I am greatly mistaken—that the Schedule con-
    610
    tains a list of areas, and that every one of them was either a special area within the meaning of the last Act passed by Parliament on the subject, or is so closely adjacent to a special area as to be part of the general area and to share its fate.
    I, therefore, repeat that the Schedule consists of areas which have been allowed to fall into the worst possible condition, and that it is only in those areas that the powers which the House is now giving to the Government may be exercised. I know there is a Clause which allowed the Minister to add other areas to the Schedule, but he is not to be allowed to use his own unfettered discretion in the matter. He has to add areas which are like the areas already in the Schedule. [An HON. MEMBER: "No."] Yes, when he is satisfied that unemployment in any area has reached a particular stage or a bad stage.
    Mr. Lyttelton: I do not want to interrupt the hon. Member unnecessarily, but the adding of areas to the Schedule depends upon the danger of unemployment being foreseen by His Majesty's Government. I think the hon. Member was not doing full justice to the words in the Bill, because he was speaking of the areas in the Schedule having reached a state of devastation or unemployment which would warrant their being added to the Schedule, but that is not the case. It is within the discretion of the President of the Board of Trade to add them to the Schedule if he anticipates—and I think the word is correctly used in the Schedule—that there is danger of unemployment.
    Mr. Silverman: I am very grateful to the Minister, but I do not know that his intervention alters, or need alter, anything that I said.
    Mr. Lyttelton: It does.
    Mr. Silverman: I think not. Certainly the Minister has power to add other areas to the Schedule if he anticipates certain dangers, and he has power to do so before the dangers eventuate. If there is a danger which has not yet become a fact he can put an area into the Schedule. I quite recognise that, and it is perfectly true; but what is the danger? If things reach such a pass that the Minister is satisfied that unless he puts an area into the Schedule there is a danger, which means more than a possibility, of that

    611
    area too falling into the same kind of devastated condition as those special areas always were in up to the outbreak of war, he can act. That is exactly what I say. It is only within the ambit of devastated areas of that kind that the Minister has any power to add areas to the Schedule, where are included now only areas which were special areas within the meaning of the Special Areas Act. That is a very limited power. It is a grudging, half-hearted concession by people unwilling to make the concession, who are convinced against their will and who remain of the same opinion, and therefore do as little as they can and then go to the country and pour scorn on the very principle which, half-heartedly, reluctantly and to a small degree, they have had to concede.
    Mr. Henderson Stewart: It is the late Minister's Schedule.
    Mr. Silverman: It is all very well to say that it was my right hon. Friend's Schedule. We all know the facts, which are that my right hon. Friend was a Member of the Coalition Government and had to speak for the Government, including its most reactionary Members. He could not put in anything he wanted. It was a Government Bill, introduced by him because he was the Minister in charge of a great Department.
    Mr. Henderson Stewart: He did not report any opposition.
    Mr. Silverman: Did the hon. Member expect him to report any opposition? Is it the business of a Member of a Coalition Government to report dissensions in the Cabinet?
    Mr. Deputy-Speaker: These remarks are not in Order upon a Third Reading Debate.
    Mr. Silverman: They would not be in Order anyhow, and the hon. Member knew that very well when be made his intervention. He hoped I did not. Here we have a Bill which concedes reluctantly and in very small degree a principle which was forced upon the Government, which they were no longer able to resist but upon which they do as little as they are able to do. I suppose we shall have our remedy later, but I do urge hon. Members opposite, in their campaign in the coming weeks, to remember the Bill
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    on which they hope to get a unanimous Third Reading to-day, and not to be too enthusiastic about the danger of the community interfering in its own affairs.
    4.56 p.m.
    Mr. Erskine-Hill: I do not want to add too much, to what has been said already, but the fact that the Bill will pass its Third Reading today says a great deal for the good sense of the House of Commons as a whole, as well as of the Ministers and ex-Ministers of his Majesty's Government. The whole sense of the House is that we should do something practical for those areas which have been depressed in past years. The difficulty of the Government was to give some practical help to those areas without at the same time tending to cause uncertainties which result in businesses in other parts of the country not going forward in the way which they and every Member of this House would like. The Government have acted wisely in the Bill.
    There is one point I wish to make. When we were dealing during the Committee stage with the Schedule the Minister made certain promises to me to consider the position of various local authorities. I referred him to the instance of Leith. He would do well, as would whatever Minister is in power, to reconsider that Schedule very carefully at a future date. If it were not for that promise, one might transgress the Rules of the House by pointing out the claims of various places to be included in the Schedule; but having that promise I feel certain that the President of the Board of Trade, whom I hope we shall see in his place some months from now, will carry it out. I congratulate him. If it had not been for his pertinacity and that of his colleagues, the Bill would not have come forward now. I hope the House will wholeheartedly respond to the Minister's request for a Third Reading.
    4.58 p.m.
    Mr. Mathers: If the hon. and learned Member who has just spoken had had me for one of his colleagues on the Standing Committee, I would have been able to prove to him that the Bill does not go far enough in certain directions. You were good enough to explain, Mr. Deputy-Speaker, why the Amendments which I put down for the Report stage were not in Order, because conditions have changed between the Com-

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    mittee stage and the Report stage. The Amendments would have been in Order on the Committee stage although not in Order on the Report stage. Therefore I am brought to the point of making some observations, hoping very much to be able to keep in Order and not transgress the rule about discussing Amendments on Third Reading. I would like to get some indication from the Minister as to how he can meet the position in my constituency which is left cut through in the middle by the provisions in the Schedule, and how that position is to be met by the local authorities involved.
    Clause 6 gives the Minister opportunities of dealing with the Schedule by taking into consideration from time to time the question of altering it. Sub-section (2) goes on to say that where at any time it appears to the Board of Trade that there is likely to be a special danger of unemployment, certain things can be done, but, as I see it, that special danger can be proved by the fact that unemployment had taken place already in the years before the war. That kind of representation can very well be made by the local authorities, the county council and the burgh councils in my constituency. It can be shown that there had been a greater measure of unemployment in the portion that is left out than in the area of my constituency which is scheduled. That would seem to me to be prima facie proof of the fact that there was, when peace conditions return, a special danger of unemployment that would entitle the whole of the county to be brought within the Schedule.
    I wish to know from the Minister what kind of representations are necessary, and when he will be willing to receive the representations that may be made to him in order to get him to implement the powers that are given to him in Clause 6. He will be helping greatly people who are very much concerned about the failure of this Bill to deal with the northern part of my constituency if he can show how quickly and easily the representations can be made, and if he will give an undertaking that on having sound and sensible representations made to him he will give effect to them, and bring within the Schedule of this Bill the whole of the county, instead of only part of it. Representations have already been made along those lines.
    Mr. Deputy-Speaker: I have been fairly patient in this matter. The hon. Member is quite entitled to say that part of his constituency ought not to appear in the Bill. If he wishes to do that he can do so, but he must not say that part of his constituency which is outside the Bill must come in. I know that under Clause 6, as amended, it is possible for other areas to be brought in, but that aspect must not be developed too far.
    Mr. Woodburn: On a point of Order. Would it be possible to argue that one might regret that only part was in the Bill?
    Mr. Deputy-Speaker: I have tried to explain that the hon. Member is rather over-emphasising the part he wanted included in the Bill. I hope he will not develop that point.
    Mr. Mathers: It seems to me that to regret that only a part is in would perhaps be inviting the Minister to take that part out, and I have no wish to do that. I want to have the Bill so for as it goes. It is simply that I want it to go further. The point I was desirous of putting to the Minister concerns many representations that have been made by the local authorities, by trade unions and others to the Board of Trade. I wish to know if these will be considered now in the light of the passing of this Bill, more particularly owing to the fact that upstairs in Committee many Amendments were slaughtered, and I feel that I must not complain that in that slaughter of innocents my twin ewe lambs, because my Amendments were twins, should also be slaughtered. Will the Minister take into account the representations that have already been made, in order to enable him to judge as to whether parts of my own constituency should be added under the Schedule?
    5.5 p.m.
    Miss Ward: As a Member for one of the special areas I wish to take this opportunity to say how glad I am that this Bill, though amended, is to reach the Statute Book, and to congratulate my right hon. Friend very warmly on that achievement. I was rather interested in the point made by the hon. Member for Nelson and Colne (Mr. Silverman), because he was at some pains to explain that the deficiencies in the Bill

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    were due to the restrictions which possibly had been placed upon the late President of the Board of Trade by the rest of the Members of the Government. I would prefer to put it the other way round and say, on this occasion, that it was a joint measure of co-operation of all the political parties to make a contribution to the special areas problem.
    Mr. Silverman: Would the hon. Lady?
    Mr. Deputy-Speaker: I do not think we need discuss now what happened in the Cabinet of another Government. There will soon be an occasion for that.
    Mr. Silverman: My question was not on that point. I was only going to ask the hon. Lady whether she would not concede that the principle of this Bill is the principle of Government or communal restriction and control of the flow and placing of industry, and whether that is not in conflict with any view that these questions could be decided by private enterprise?
    Miss Ward: I had no intention of transgressing the rules of the House and entering into a political argument on this occasion. I am looking forward, in the General Election, to arguing in my own area about what my own Party has been able to do, because I am glad to be able to say that private enterprise has played a very large part during the war—
    Mr. Deputy-Speaker: Here I must interrupt the hon. Lady as this matter is really not in the Bill.
    5.8 p.m.
    Mr. Lyttelton: I will not detain the House for more than a few minutes. I had and still have several pleasant duties to perform. My first duty was to have been to congratulate my predecessor at the Board of Trade on having got this Bill, but after listening to the speech of the hon. Member for Nelson and Colne (Mr. Silverman), who I do not think has read the Bill—
    Mr. Silverman: The right hon. Gentleman has given way because he has more manners than some Members. I am sure he would not wish to persist in a remark which, whatever its jocular appeal, would do me an injustice. I never take part in the discussion of a Bill which I have not
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    read. My intelligence may be limited, but I have read the Bill.
    Mr. Lyttelton: I certainly apologise to the hon. Member. I might put my remarks in another form and suggest that he re-reads the Bill. I hope that will meet his point in a courteous manner. After listening to the speech of the hon. Member I realise that the late President of the Board of Trade is not to be congratulated at all, but in spite of that I shall congratulate him. I should next like to congratulate the hon. and gallant Member for Newport (Lieut.-Commander Bell) for a most interesting and able maiden speech. We shall hope to hear him often, particularly on these industrial questions. In describing the Bill as "small mercies" he anticipated some of the remarks of the hon. Member for Nelson and Colne, who has the habit of looking gift horses in the mouth and then saving that they have no teeth.
    As far as the special areas are concerned, this Bill is a very positive one. I must say about the points that the hon. and gallant Member for Newport raised that as far as the Development Areas are concerned these positive matters in the Bill will help them, and I do not regard the mercies as small. I would like to thank right hon. Gentlemen and hon. Gentlemen in all parts of the House for the constructive work they did on the Bill in the Standing Committee upstairs, and the expedition with which the late stages of the Bill were taken. It has been improved in very important respects. For example, the obligation of the Board of Trade to consult with local authorities about the operation of Clause 6 has been added to the Bill, and is part of it, and has not taken the form of a mere administrative pledge. Then there was another matter about which hon. Members advanced considerable anxieties, that was, the provision under which the building of factories of more than 3,000 sq. ft. involved notification to the Board of Trade. That has been altered to 10,000 sq. ft., and I think that many of the anxieties which hon. Members expressed about this particular matter have been thereby allayed.
    The Government want the Bill as a matter of urgency. It has from the beginning been the subject of very close discussion between my predecessor and myself, and I must repudiate any suggestion that I am insincere, which was

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    the suggestion of the hon. Member for Nelson and Colne.
    Mr. Silverman: On a point of Order. I did not accuse anybody of being insincere. I do not think it is in Order to suggest that I did.
    Mr. Lyttelton: My definition of "insincerity" may be different from that of the hon. Member.
    Mr. Silverman: The right hon. Gentleman must not impute words and put them in my mouth.
    Mr. Deputy-Speaker: We might all keep to that rule.
    Mr. Lyttelton: If the hon. Member made any suggestion of that kind I assure him that I am entirely sincere in my support for this Measure. My name was on the original Bill, and any idea that these proposals, which have my whole-hearted support, are other than perfectly constructive ones, I must deny. The matter is urgent. At this moment industry is in a very fluid condition. Industrialists are now thinking more closely about the location of new plants, the extension of their existing undertakings, and all other forms of extension which the partial change from war production to peace production entails. Furthermore, the Board of Trade, under schemes framed by my predecessor, have many plans on paper, so to speak, for building new plants and for developing trading estates, and the positive powers which this Bill gives are necessary if these paper plans are to take form, as quickly as possible. If we were not to get the Bill these plans would remain on paper, and would not be realised.
    With regard to the Schedule, which went very quickly through the Committee, I would like to be able to give some reassurances to the hon. Member for Linlithgow (Mr. Mathers). During the Committee stage I gave a pledge that I would at once look at any Amendments which had been proposed, with the hon. Members who had proposed them, to see if a case—which I again emphasise is not, under Clause 6, a case in which devastation has occurred or in which unemployment has begun to be rife, but is a case in which, in the opinion of the Board of Trade, there is a danger of such unemployment arising—
    Mr. Woodburn: In regard to the constituency of my hon. Friend the Member for Linlithgow (Mr. Mathers) and my own, the railway line is the border. The part South of the railway line is to be developed, but quite conceivably, in order to benefit the part South of the railway line, it might be more convenient to put something just over the line—on the wrong side of the line—for development purposes. I hope that in such development common sense will rule, not just the letter of the law.
    Mr. Lyttelton: The point I am making is that it is open to hon. Members, as soon as this Measure becomes law, to make representations to the Board of Trade in the ordinary way—the doors are always open—to see if a case can be made out that there is a special danger of unemployment, whether from the causes mentioned by my hon. Friend or from other causes. Then there is everything to impel the Board of Trade, subject to the approval of Parliament, to add those areas to the Schedule. We did not, as my hon. Friend the Member for The Wrekin (Mr. Colegate) mentioned, have a very long discussion on the Schedules, because it is clear that it could have gone on almost interminably. But, in order to allay anxieties which hon. Members felt, I gave a most specific pledge, which I now reiterate, that I am prepared, as soon as the Bill becomes law, to enter into discussions with any hon. Member, to ascertain whether there are any special dangers in areas with which they are concerned. As the transition from war to peace production proceeds, we shall get a much better idea of what further areas, if any, should be added to the Schedule. I hope that that assurance will allay anxieties.
    I think that this Bill is a useful, and in no way vexatious, instrument for carrying out a purpose which I believe is common to all parties. It is a weapon which can be used against unemployment, by bringing about diversification and by trying to balance industries in the various areas, so that when one is slack and another is active the slackness does not fall upon a particular part of the country. It will, I believe, preserve some of the social capital, as it has been called, which might otherwise be lost. Lastly—and perhaps I speak more with the voice of the Minister of Production in this matter—it tends to disperse those vital in-

    619
    dustries which are necessary for the waging of war and the sustenance of our population during war, rather than concentrating them in one place. I think that is another reason why the Measure will be extremely useful and beneficial to the nation as a whole.
    Question put, and agreed to.
    Bill accordingly read the Third time, and passed.

    EDUCATION (SCOTLAND) BILL
    As amended (in the Standing Committee), considered.
    CLAUSE 29.—(Attendance at junior colleges.)
    5.18 p.m.
    The Joint Under-Secretary of State for Scotland (Commander Galbraith): I beg to move, in page 19, line 20, leave out from beginning, to "is," in line 22, and insert:
    "If a pupil satisfies the education authority that any religious observance or any part of the instruction at a junior college which the pupil is required to attend."
    During the Committee stage representations were made from each side of the House to the effect that this Clause, as it stands, does not give sufficient protection in respect of religious beliefs. An undertaking was given that the Clause would be examined anew and that, if possible, a form of words would be inserted to meet the apprehensions which had been voiced. The Amendment contains the new form of words. The effect is simply that, if a pupil satisfies the education authority that any religious observance or any part of the instruction at a junior college is contrary to his religious belief or likely to give offence to his religious feeling, he shall be permitted to withdraw from such observance or instruction. I believe that that will fully meet the apprehensions which were expressed, and will give full protection to religious beliefs.
    Captain McEwen: The merit of this Amendment lies in the words "or any part of the instruction." As the original Amendment was down in my name, and as the hon. Member for Greenock (Mr. McNeil), who is also interested in the point, is unavoidably absent, I would like to tender my thanks to my hon. and gallant Friend—
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    whom we are delighted to see making his bow at the Box—for having so promptly come forward with a revised version of this Sub-section, to meet a difficulty which, he knows was a real one.
    Amendment agreed to.
    Further Amendments made:
    In page 19, line 23, leave out "and."
    In line 24, after "shall," insert:
    "permit the pupil to withdraw from such observance or instruction and shall."—[Commander Galbraith.]
    SIXTH SCHEDULE.—(Enactments repealed.)
    Commander Galbraith: I beg to move, in page 82, line 48, column 3, leave out "three."
    This Amendment is consequential on the dropping of Clauses 46 and 47 from the original Bill. Those Clauses dealt with the abolition of school management committees. In consequence of the Clauses being dropped, the school management committees remain, and, therefore certain Amendments are required. There was no time to make them during the Committee Stage.
    Amendment agreed to.
    Further Amendments made:
    In page 83, line 9, column 3, leave out:
    "in Sub-section (5) the words 'or a school management committee under Section three of the Education (Scotland) Act, 1918.' "
    In line 15, column 3, leave out:
    "and paragraph (iv) of the proviso,"—[Commander Galbraith.]
    Motion made, and Question proposed, "That the Bill be now read the Third time."
    5.23 p.m.
    Mr. Westwood: Before we pass on this Bill to another place, for, I hope, the same speedy consideration as has been given it by both the Scottish Grand Committee and this House to-day, I think a tribute ought to be paid to the negotiating ability and work of the ex-Secretary of State for Scotland, my right hon. Friend the Member for West Stirling (Mr. T. Johnston). But for that genial way of his and for his undoubted ability in overcoming obstacles, it would have been impossible, with a Bill of this magnitude, to have achieved so much common ground. There

    621
    was a common desire among the people of Scotland that, notwithstanding its rather controversial administrative Clauses, we should at least get the Bill, even in the limited time at the disposal of the House. That common desire was reflected in the Scottish Grand Committee. There are people who say that the machinery of Parliament is slow and cumbrous, and that if you want difficulties you will find them in superabundance when Scotsmen get together to discuss Scottish problems in Scottish Grand Committee. But I think we have taught not merely England but the world a lesson as to how speedily we can do things when there is a common desire to get them done. In an hour and a half we were able to pass the 92 Clauses of the Bill and the Schedules.
    Mr. McIntyre: Shame.
    Mr. Westwood: I will leave somebody else to deal with the "Shame": I am proud of the achievements of the Committee in getting something on which we shall be able to build a real education system for Scotland. This Bill does not give everything that we want. I can deal only with the subject-matter of the Bill before the House, but it is a fair day's march towards an educational system which will provide equality of opportunity in accordance with the aptitude and the ability of our children in Scotland, provided always that the Regulations that are to be made under the Bill will give us the educational structure. The Bill is not an educational structure, it is merely the foundation on which it is possible to build the new educational structure for Scotland. The Bill contains many improvements on the existing Education Acts. Some of those Acts have optional Sections, and many of those options have now been turned into duties of the education authorities. It is the duty of the education authorities, under this Bill, to provide books and requisites for education, such as spectacles for those with limited sight, to enable the children to benefit by the educational opportunities that are provided.
    Success will depend upon the Regulations and upon the new Code provided for in the Bill. Unless these Regulations are well framed, unless there is a keen desire on the part of those who have to direct the administrative work of the local
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    authorities, the Bill may be merely some black hieroglyphics on paper and of no use whatever to Scotland. It is not the Act of Parliament that gives us the things that are effective, it is the will that operates the Act of Parliament, and the will of the administrators. There must be an adequate supply of teachers. Clauses49 and 50 make it possible not merely to get an adequate supply of teachers, but to get teachers trained to deal with the new problems. The Regulations must also provide for proper accommodation. Without teachers and without proper school buildings, it will be impossible to get the best results.
    There must be the will and the desire among parents in Scotland to make a success of this Bill when it becomes an Act. There must be a determination on the part of the local authorities of Scotland, because the Bill places the responsibility for Scotland's educational progress not only upon the Secretary of State for Scotland but also upon the local education authorities. They must act with determination if we are to make a success of the Measure.
    Finally, all these things can be of no real avail unless there is the proper oil for the machinery. It is more than possible that the local authorities may find the new burdens to be placed upon them almost too heavy to bear, and, consequently, if we are to make a real success of the Bill, not only will we require all those things to which I have referred, but further financial assistance from the Treasury. I have very much pleasure—real pleasure, because I can now see embodied in the Bill some of the ideals for which I have fought for almost 30 years—in supporting this Bill, and in hoping sincerely that it will become an Act before this Parliament goes out of existence.
    5.31 p.m.
    Lieut.-Commander Hutchison: I have taken a very close interest in this Bill ever since the original version appeared before the end of last Session. I think it has been a very great relief to all Scots hon. Members that we have been able to save this Bill and to ensure its passing into law before the Dissolution, because it would have been a terrible misfortune if all the work done upon it at the Scottish Office, and the consultations with local authorities, had been wasted. The Bill is very important indeed to the future of Scottish education.

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    I think the proceedings in the Standing Committee on Scottish Bills showed a very good example of the remarkable degree of co-operation that can be achieved among Scottish hon. Members of all parties in an emergency, but I should not like to take this unduly rapid procedure as being a good precedent. Unfortunately, a very great many important parts of the Bill were not discussed in any detail whatever, although many of us would have liked to make suggestions in regard to certain Clauses. For that reason, as the right hon. Member for Stirling and Falkirk (Mr. Westwood) has said, the Bill is imperfect in some ways, but, nevertheless, it does mark a very useful advance on the present education arrangements.
    For my own part, there are two points on which I would like to comment. The first is the Amendment to Clause 2 which strengthens the provisions in regard to technical education. This is, I think, a matter of the greatest importance, because I understand that Scotland has been rather lagging behind England in recent years in regard to technical education. Secondly there is the Amendment made to the original Clause 53 to ensure that the increase of salary for teachers was antedated as from 1st April of this year. This is very satisfactory, for it brings a measure of justice to a profession which is very hard pressed and which is not always fully appreciated in the country. I trust that the Bill will speedily pass into law in another place before the end of the present Parliament.
    5.34 p.m.
    Mr. Thomas Fraser: I want to express the greatest regret that we had to pass this Measure with the speed with which we have passed it. It is all right to pat ourselves on the back and say we have done a wonderful job of work in putting through 93 Clauses in one morning, but we could only do that by what, I think, is a shameful sacrifice of democratic rights. There were many Amendments on the Order Paper put forward by hon. Members from all sides of the House, and great bodies of opinion outside—important bodies of opinion, too—thought the Bill could be considerably improved in the Scottish Grand Committee, and I agree that it could have been improved, but it would seem that the Tories have insisted upon having an early election—
    Lieut.-Commander Hutchison: The Labour Party walked out.
    Mr. Fraser: The hon. and gallant Member says the Labour Party walked out. Well, that is something we can argue another time.
    Mr. Westwood: It is not true.
    Mr. Fraser: The Labour Party, I believe, wanted to remain—
    Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew): I do not think we can discuss that matter.
    Mr. Fraser: I think it is most regrettable that the hastening of the election has necessitated these sacrifices of our democratic rights, because it has meant that, if we wanted anything at all in the shape of a new Education Act for Scotland we had to withhold any criticism of the Bill as printed. It was stated clearly on Second Reading that, on this side, we would make a fight over the payment of fees. We thought that the payment of fees in local authority schools in Scotland ought to be completely abolished, but we could not insist on arguing that matter in Committee. If we had gone into arguments on it, we could not have had the Bill. There are other matters, such as the exemption of school children, on which we felt very strongly indeed, as was fully indicated by hon. Members on this side during the Second Reading Debate, but we had no opportunity of putting our opinions in the Committee. If we had insisted on making our views known in Committee we could not have had the Bill, and I very much regret that, in order to get this Bill through all its stages, we had to make that great sacrifice, which is what it was.
    I hope it will not be taken as a precedent, and I hope, too, that we will not go out and say that we have a right to claim some pride for ourselves for passing this Bill in such a speedy fashion. There are other countries in which they put Bills through even more speedily, but we do not agree that their system of Government is a good one. We think it is good Parliamentary practice to have full opportunities for Debate in Committee, and, indeed, at all stages of the passage of legislation, and I feel all hon. Members will agree that it must be a matter of regret that we have had to push this Bill through Committee in the way we have.
    5.38 p.m.
    Major McCallum: I do not want to argue here with the hon. Member for Hamilton (Mr. Fraser) as to who caused the General Election. I do know that my right hon. Friend the Member for West Stirling (Mr. Johnston) and my right hon. Friend the Member for Stirling and Falkirk (Mr. Westwood) were both very keen, with all of us, to get this Bill, or some Measure to improve Scottish education, on the Statute Book, but I would suggest, with all respect to the hon. Member for Hamilton, that we are not going to serve the cause of Scottish education very much by accusing either Socialists or Tories of delaying the Bill or preventing a proper discussion of it. The point is that we had to get the Bill through as it stood or not have it at all. I represent a constituency where they would have been quite prepared to do without it, and I have said so all along, but, in order to fall in with the majority of hon. Members on all sides, I am very glad that we did attain that measure of co-operation and succeeded in getting it through.
    The right hon. Member for Falkirk expressed views in which I should like to join in his appreciation of the work done by the former Secretary of State. I am sure all hon. Members on this side will agree about the tremendous amount of work the right hon. Gentleman did and the great interest which he took in the matter. I would also like to include in this tribute the right hon. Gentleman the Member for Stirling and Falkirk, who also put in a tremendous amount of work. I know, as he has said, that the Bill will be fulfilling some of the ideals for which he has worked for so many years, and I therefore pay my tribute to both the right hon. Gentlemen for the work they have done.
    I want to ask the Minister who replies for some assurances. In Clause 27 we define what is to be a walking distance for children, and we have brought it down from three miles to a maximum of two miles. I imagine that everyone interested in the education of children is very glad to see that reduction, but it does mean a very considerable addition to the cost of transport in some localities. In a widespread area such as my constituency this question of transport is one of very great importance and difficulty, and it is a
    626
    source of ever-increasing cost to the ratepayers. Again, there are the questions of school meals, and of a standard salary for teachers, both of which mean additional expenditure. In a county such as Argyllshire, which has a very poor rateable value, it may be, as the right hon. Gentleman the Member for Stirling and Falkirk said, that we shall have to come to the Scottish Office and ask for very considerable assistance towards meeting these additional expenses. I am told by my own authority that we do get some considerable assistance from the block grant for purely educational purposes, but I believe it is argued by the Scottish Office that transport is not a purely educational matter and, therefore, does not qualify for grants. I would like to have an assurance from the Lord Advocate that, when these extra expenses are incurred in these difficult areas, and they become an unwarranted burden on the local finances, the local authority may go to the Scottish Office or the Treasury with some confidence that they will be given some measure of financial assistance in addition to that for purely educational purposes. I would like to say that I welcome the Bill and hope that it will become an Act before this Parliament comes to an end.
    5.44 p.m.
    Mr. Kenneth Lindsay: I, like other hon. Members, wish to say that I think the Secretary of State and the Under-Secretary have worked very hard, but I do not think they have achieved what has been said this afternoon. There has been a disgraceful and incomplete discussion of a great Scottish Measure. For five years we have had many Bills before this House. So little does somebody care—who it is I do not know—about Scottish education that this Bill has come right at the very end, after we had been pressing and pressing and asking, as the hon. Member for West Fife (Mr. Gallacher), with good humour, has asked time after time, when the Bill was coming. At any rate, it has come just before the Election. But I will not go into that, as I am not concerned with it. I am concerned with the fact that we have got to this pass. My right hon. Friend the late Under-Secretary of State for Scotland was obviously speaking in a good humoured way when he talked of the rapid passage of scores of Clauses, and it is as well to preserve a sense

    627
    of humour at this time. But do not make any mistake about it—it is a very bad thing for a Bill to go through without a detailed discussion. We spent 16 solid days on the English Bill and we improved it.
    I gave my views on this Bill on Second Reading and I am not going to repeat them, but I would ask why this has happened. Why was it that my right hon. Friend, who worked hard enough, could not get decisions in Scotland? Why were not decisions arrived at? What is there at the moment which is preventing agreements between local authorities and the Department in Scotland? We arrived at agreements on difficult questions with the right hon. Gentleman the Minister of Education in England. The question of Part III authorities was very difficult, as was the religious question. I do not think that the present Minister of Labour has greater shrewdness and negotiating power than the late Secretary of State for Scotland. The whole basis of this thing is wrong. We ought to have a strong central drive by the senior partner in Edinburgh. Look at the revelations we had from the right hon. Gentleman the other day about authorities which have not even a director of education and education committees which are snubbed by county councils. What had the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot) and the right hon. Gentleman the Member for Caithness (Sir A. Sinclair) and the rest of them been doing as Secretaries of State for Scotland all those years? I can perhaps say now with greater freedom that I have tried to study the question during the last 11 years and have been trying to get at the bottom of it, to find out why there is this educational weakness. There will have to be a revival of education in Scotland, and I had hoped that it was going to be discussed during the Committee stage. The Debates on the English Bill were read throughout the world, because they threw new light on the subject.
    I do not believe that the finance of this Bill is sound and I do not believe that the finance of Scottish education is sound. I doubt whether certain local education authorities can put through these large measures and whether we shall get junior colleges during the next five years. Un-
    628
    less some radical steps are taken in order to get teachers, I do not see the school-leaving age being raised. Perhaps it is well that a Bill which has not had proper discussion should go on to the Statute Book, and that some further discussion should take place in the next Parliament. There will have to be further discussion on education, but administration has yet to be thought out. We had one day of real discussion in the Standing Committee on Scottish Bills and we unearthed in the very first Clause a great dispute about what was meant by secondary education. We unearthed later that Scotland was unable to deal with certain types of voluntary authorities. If these two things could be brought to light in one morning we might have unearthed more things with further debate. I make my protest, but I hope that my hon. and gallant Friend who has been many years on a local education authority will not take this as any criticism either of himself or of his chief. There seems to be some obstinacy or something still prevailing which prevents the getting of that agreement which is the only basis for an improvement in Scottish education.
    5.51 p.m.
    Mr. Woodburn: It is true to say that Scotland and Scottish Members suffer from a certain sense of frustration in not having been able to discuss Scottish education. There was a very interesting discussion on the English Bill, and if the English people required many days in which to discuss English education, half a day in which to discuss Scottish education does not satisfy Scottish Members. I had a dual capacity in connection with this Bill, having had something to do with the struggle to get agreement in Scotland, and happening to be chairman of a committee of our party which considered the Bill. There is no question at all that nobody could have achieved more than the late Secretary of State in getting what agreement he did in Scotland. If he failed it was not through any lack of initiative or tact on his part, but because, in certain parts of the Bill, we were up against a fundamental disagreement between town and county, on the one hand, and between certain counties and other counties. It would be impossible to get an agreed Measure on these matters of administration. In the final result, it was a question

    629
    of either sacrificing the Bill or throwing out certain Clauses and leaving them until further time was available for discussion.
    When we talk about a sense of time and a sense of frustration, we have also to keep our sense of proportion. When we regard the Bill as it is now being passed and the Bill as it would have been if we had spent longer time on it in Committee, we must admit that the overwhelming part of it is as it would have been had it gone through all stages with full discussion. Therefore, we had better welcome the Bill and do something about it later on rather than not have the Bill and be left hoping to get a Bill later.
    We have one regret, and that is, that we did not make a clean sweep of fees in Scotland. That came up as a very difficult problem. In certain towns there are traditional schools where there is no population around them. But the tradition amounts to something. I am sure that no Scottish Member wants to do away with, for example, the tradition of the Royal High School, Edinburgh, or of the High School in Glasgow or of various other schools. It "gives pupils a kick" to feel proud of their school and their school tradition. In my own area, Dollar Academy has a long tradition, and I am sure that people all over the world would regret it if its tradition were swept away by a general abolition of fees. On the other hand, my hon. Friends feel that we have spoilt the ship for a "ha-porth of tar." When the Bill goes through there will only be 18 or 20 schools in the whole of Scotland charging fees, and I think some other method could have been found of selecting pupils for these schools.
    I do not think it is right for pupils to go into the traditional school merely because their parents are prepared to pay the fees. A father who may be a book-maker or in some anti-social sphere of life may be able to put his son into one of these schools, whereas somebody who is doing a good job of work in some reputable industry is debarred by the fees. The test ought, to be selection by merit. Here we come up against the problem that the teachers and the educationists object to that on the ground that it would mean creaming the top of the scholars away from the ordinary schools and putting them into a central school. That is true, but my reply is that teachers do not object to the substrata being taken
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    off and put into special schools. Bursaries and other things are, at the moment, creamed off to some degree. I think that of the two evils that is the lesser.
    I suggest to the Ministers present to-day that when the time comes—if it happens to be they who are in charge, and naturally I hope it is not—they should give serious consideration to some other method of selecting pupils for these traditional schools in Scotland and make a final and clean sweep of this fee-paying business, and make education a matter of merit, of the aptitude and the ability of the child to assimilate education rather than one of the mere ability of the parent to pay for the privilege. The matter is left in the hands of the local authorities, who have power under the Bill to abolish fees. Fife have already done it and other areas can do it, and as soon as circumstances permit and a proper method is adopted, fee-paying should be abolished and Scottish education made free. I know it is said that England has no fee-paying schools, but that is a piece of humbug, because the great majority of fee-paying schools are outside the education authorities. We have not abolished fees in Scotland, but we have nearly done it, and I hope that at no great distance of time it will be done away with entirely.
    5.59 p.m.
    Mr. Henderson Stewart: I am glad the hon. Member for East Stirling (Mr. Woodburn) has addressed the House on the Bill because, as he said himself, he occupied in the last Government and in respect of this Measure a somewhat important position in that he was Parliamentary Private Secretary to the Secretary of State for Scotland. The remarks which the hon. Gentleman has made are, therefore, to be treated with some care by the House. With regard to the last subject he raised, I think he will agree with me that the criticism he himself has offered, and which he indicated to the House was the view of his party, was not the view of his right hon. Friend. The late Secretary of State for Scotland told us here in this House, and many of us outside, that he did not agree with the criticism of fees and that he took a different view. I am not going to argue that now, but I think I am right in saying that the late Under-Secretary shared that opinion.

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    I do not press that point, but I rather think I am right—
    Mr. Woodburn rose—
    Mr. Stewart: May I finish my argument? I will give way in a moment. The point I am trying to make is this. I do not wish to go into the pros and cons of fee-paying, but I want to record that this is not a matter upon which there is really a party view. This is a very difficult technical matter, and it is one for much further and closer examination than we have yet had.
    Mr. Woodburn: My right hon. Friend the former Secretary of State did not express his own views in regard to whether fees should be abolished or not. His view, which was also that of the Under-Secretary, as I understood, was that the matter should be left to the local authority, and should not be imposed as a policy from Parliament.
    Mr. Stewart: That of course is quite true. In other words, the right hon. Gentleman was saying, "I do not object to fees so much, and I am willing to leave it to the local authorities to decide." That was what I was saying. With regard to the matter raised earlier by the hon. Gentleman, I think on all sides we regretted that our Committee stage had to be so curtailed because, as the hon. Member for Kilmarnock (Mr. Lindsay) said, even in the one day's Debate we had, a great many things were revealed which some of us did not know, and undoubtedly, had the Debate gone on for the half dozen or more days that were expected, we should have learned a great deal about Scottish education, and might, perhaps, have greatly improved the Measure. However, I think we ought to be clear about this and fair about it. The Bill was delayed in its presentation to the House, I should say, almost entirely because of the Clauses proposed to be inserted, dealing with the machinery of administration. It was that part of the Bill which held it up from presentation to this House. The great remaining mass of the Bill, indeed that which remains with us now, was not seriously contested by anybody in Scotland. Minor points, I agree, such as fees, little points here and there were argued, but in substance all the rest of the Bill could have been presented to this House six months or a year ago and
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    would have won general acceptance, and, of course, have been considered with great care in the Committee. So the only reflection I have to make upon the work of my right hon. Friends the late Secretary of State and the Under-Secretary—to both of whom I pay my warmest tributes because I know what they have done—is that for the sake of obtaining these administrative Clauses they held up this Bill, and I am sorry it was so. I think it would have been better if, instead of inserting these Clauses at all, we had produced the educational Clauses much earlier—
    Mr. Westwood: The fact is that neither of us had the slightest idea that this Parliament would have been ending before 5th July. Consequently, as we were willing to go on until November if necessary, in order to get in these points, we were of opinion then that there would have been full time to discuss these particular problems. It is true that the administrative machinery in operation to-day satisfies no one, and that is the reason why there was a possibility of a committee of inquiry to deal with the whole problem of educational administration as it affects Scotland.
    Mr. Stewart: I am sure my right hon. Friend is right and I accept what he has said, but I am entitled to express the opinion which I have expressed to the House as to the wisdom of the course taken. Nevertheless we have not lost everything, because the question of administration has just been postponed and one day it must be faced. One day we must examine the matter in Scotland, and this House. We will have to review the whole problem of local administration and it will be a very interesting discussion when it comes.
    I have two other points to make. The first is a point which I made on Second Reading, and which I feel is of the utmost importance. We have here a Bill which gives large powers and holds out considerable hopes; but this is not education. This Bill does not begin to be education. This is only the foundation, as the right hon. Gentleman has said. Unless we can get, first, well-trained teachers, much better-trained teachers than there are now, and schools much better equipped than they are now, and much more numerous and the real enthusiasm of Scotland behind

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    it, we shall not get education at all under the Bill. Therefore, do not let Parliament or the Scottish people think we have solved the problem this afternoon. It is not so. We have only taken the first tentative step, the only step which Parliament could take; the rest remains with the Department, the teachers and Scottish public opinion.
    And this leads me to the last reflection I would like to offer to the House. We have paid our tributes, as we ought to have done, to the ex-Secretary of State and his Under-Secretary. They deserve those tributes. But I am sure we would all desire to pay a tribute to the Scottish Education Department itself and its officials. As a member of the Advisory Council, like my hon. Friend opposite, I have been able in these last two or three years to see inside the doors of the Scottish Education Department, and to watch what the officials do. A Measure of this kind is very largely the product of years of work by these officials gathering material, sifting, examining, collating and ultimately presenting it in a series of draft Clauses to whoever is the Secretary of State. That is long, tedious but vital work and that work is done by the civil servants in the Education Department in Scotland. No tribute from this House can be too great for the work these men have done. Therefore, in extending our congratulations to the two right hon. Gentlemen, I feel sure that all of us would desire to include the great work that the civil servants have done.
    6.7 p.m.
    Captain W. T. Shaw: I am probably alone in thinking that this Bill has been improved by its losses. A Scottish proverb says, "Little said is soonest mended," and I take the view that the Clauses taken out of this Bill have really been for the benefit of Scottish education. I dare say that some other system will have to be found, but I do not think it will be possible to find a better system than that suggested in the Bill presented in this House. I do not think one can find anything in the Bill which indicated what the special qualifications would have been, and I expect we would have had a lot of flaws in electing members for educational purposes. We should have had first-class members and second-class members. There would have been a tendency in the county council to say,
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    "These people have been elected for education; leave it to them," and they would probably have been people who simply talked about education, with no children of their own, or very little experience of bringing up children. I am very pleased indeed that that part of the Bill has been dropped. On Second Reading I tried to catch Mr. Speaker's eye because the then Secretary of State for Scotland indicated that the constituency I represent was very penurious in the matter of education. He seemed to think, as probably many Socialists think, that the way to ensure success is to spend a great deal of money, but that is not so. I venture to say that the academic attainments of the children in the County of Angus will match and probably surpass those of the children in Kirkintilloch or West Stirling. They are not to be measured by the amount of money spent, and people in Angus get the worth of their money, for they know the value of money. Teachers say that it is far better to teach the children of Angus for a lesser sum than children in other constituencies who are so dull. The educational attainments of the children of Angus compare very favourably with those in many constituencies in Glasgow, or probably Kilmarnock.
    6.10 p.m.
    Mr. McIntyre: I meant to confine my remarks very particularly to two points, but unfortunately the hon. Member for that constituency whose name I cannot remember which is on the South bank of the River Forth has goaded me into saying something else. He suggested that we should be proud of the passage of this Bill. He suggested that it is due to some peculiar electioneering troubles in this Metropolis, but I would like to remind him and other Scottish Members that they have in their hands an easy way of getting rid of electioneering troubles for which they personally are, no doubt, not responsible. The suggestion that full agreement on such a Measure is of itself a great thing is surely a very extraordinary idea. The most classic example of full agreement in the biological world that I know of was the case of the Gadarene swine—there was not one exception to the rule.
    I come now to the two matters on which I would like an assurance from whoever is to reply to this Debate. I am not satisfied with the assurance I have so

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    far received on the subject of the size of classes. Will it be definite that teachers and materials will first be used in order to reduce the size of classes and not to put into operation the junior colleges? Because it is quite useless either to raise the school age or to establish junior colleges unless classes are of a reasonable size. I should also like to know the views of the Government on the question of early specialisation brought up on an Amendment to Clause 1. That Amendment was defeated, but I would like to know whether it is the intention of the Government to make early specialisation compulsory or whether they are going to leave it open to the children for some time after they enter secondary schools.
    6.14 p.m.
    The Lord Advocate (Mr. J. S. C. Reid): I should like to begin by expressing the indebtedness, which, I am sure, Scottish Members in all parts of the House feel, to my right hon. Friends the Members for West Stirling (Mr. T. Johnston) and for Stirling and Falkirk (Mr. Westwood) for the great efforts they put forth in the preparation of this Bill. They were good enough to take me into their consultations from time to time and, therefore, I speak from personal knowledge of the immense amount of work done and the careful consideration which was given to all manner of suggestions. Several hon. Members who, perhaps, did not have the opportunity to realise these matters, have complained about the delay in bringing forward this Bill. Indeed, it was suggested that that delay was chiefly because of difficulties about devising suitable machinery Clauses. That certainly is not so. There has been a host of substantial Amendments to other parts of the Bill, introduced between the first and the second editions. Indeed it would have been impossible, it would have been wrong, to rush this Bill through the Scottish Grand Committee if that earlier process of sifting had not taken place. But I can say, with complete assurance, that every suggestion made at any stage of the preparation of this Bill by any Member or any outside organisation of any standing at all was most carefully examined. It is highly desirable that in the preparation of our Bills that examination should take place. I agree that it could not take the place of examination in the Grand Com-
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    mittee, and should not do so, but that examination in this case was so thorough that I think we can rest assured that further examination in Grand Committee would not have resulted in very substantial Amendments, other than substantial Amendments with regard to the machinery Clauses.
    I know that my hon. Friend the Member for Kilmarnock (Mr. K. Lindsay) dislikes a great deal of this Bill, and would have liked extensive alterations. But in that matter he is completely out of sympathy with the mood of Scotland. I think that in no quarter of the Committee was there any substantial desire for extensive alteration of these other Clauses. Although it certainly was unfortunate that we had to rush this Bill—and I do not object to that description—the result has not been disastrous. It has lost us very little, because of the extensive preparations which took place before the Bill reached the Committee stage. We had narrowed the issues a great deal, although it is true that there was one substantial issue which we had not got rid of, namely, the fee-paying issue.
    It is true that Members were deprived of any opportunity of expanding their point of view, and I am sure that in order to save time to-day they have not quite expressed to those who are unaware of the contents of this Bill, just how far this Measure goes in the direction they desire. I am sure that it was only to save time that they omitted that, but it is right that I should put on record the great change which takes places under this Bill. This Bill lays it down that it is the duty of every local authority to ensure adequate provision for free primary and secondary education in public schools. That, I am sure, is not fully recognised in Scotland. Not only are boys and girls entitled to the fullest education of which they are capable of taking advantage, but if they want to go into a free, non-paying school, they have the right to go there. I should have thought that that would have met, at least nine-tenths of any criticism, the rest being more theoretical than practical. Therefore, I do not think that any hon. Members have been deprived of any opportunity at all except, if I may say so in a friendly spirit, the opportunity of airing their theories.

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    I agree with my right hon. Friend the Member for Stirling and Falkirk that this Bill does not get to the heart of our educational problems. Those problems are not machinery problems at all; they are human problems which can be solved only by the co-operation, in the right spirit, of those whose duty it is to take part in this enterprise—and I use the word, "enterprise," deliberately. There are the local authorities and their officers; there are the teachers and the parents, and the children themselves—do not let us forget them.
    Mr. Henderson Stewart: And the Scottish Office.
    The Lord Advocate: Unless we can get co-operation among all those who are interested, we shall get nowhere, but if we can get that co-operation I believe that this Bill gives the tools with which the job can be tackled. I will not say, "finished," because we shall never finish the job of education, and it would be a bad thing if we ever thought that we had. My hon. Friend the Member for East Fife (Mr. Stewart) interjected a reference to the Scottish Office. It is quite clear that, contrary to what certain hon. Members would like, the Scottish Office has deliberately kept in the background here. It has said that education if it is to be a real thing must be conducted on the spot by the people who have responsibility, and who know they have, and are capable and willing to carry it out. The Scottish Office does not want to direct practical education from St. Andrew's House. It wants to give local people the tools to do it, and so far as it can, to leave everything else to them. I think that is the right line of approach.
    One or two points were raised, with which I wish to deal briefly. With regard to the question of increased expense of transport, I can give my hon. and gallant Friend the Member for Argyll (Major McCallum) this assurance—that the matter is being kept closely in view in the preparation of the new grant regulations. The question of small classes or the raising of the school-leaving age in the new junior colleges was also raised. I can give no specific assurance at this moment, because all this has to be worked out as a practical proposition, and the results may be slightly different indifferent areas, but obviously a reduction in the size of
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    classes is the primary object of any educational policy. Every one of us agrees that there is nothing more important than the reduction of the size of classes to a manageable size. We are under a statutory obligation to pursue the raising of the school-leaving age to 15 at the earliest possible moment, and these two matters must have extremely high priority. But that is not to say that we are not going to get on with other matters as fast as our resources will allow. The question of teachers and buildings and other things have to be gone into, and I cannot now give an assurance about the speed at which it will be found possible to do what is required.
    Mr. Westwood: Would it not be possible, as I am sure it would, for the Lord Advocate to give us an assurance that the regulations in this Bill will lay it down that, in any new building, the classrooms must be of such size as to provide for no more than 40 pupils?
    The Lord Advocate: The right hon. Gentleman knows that that has been under contemplation. I cannot give an absolute assurance, but, obviously, if that is the main object of our policy, it would be an act of stupidity, unless there is a special case, to build any classrooms which would be too large for the numbers we intend to put into them. That point will be kept in mind.
    Mr. Henderson Stewart: I am a little disturbed about the right hon. and learned Gentleman's statement about priorities. I hope that does not represent a cooling off with regard to the position of junior colleges, to which many of us in Scotland attach the highest value.
    The Lord Advocate: I deliberately said that I was not going to put them in any special order. It is true that junior colleges are extremely important and valuable, or rather, that we expect they will be, but I think I am expressing the views of Members in all parts of the House, and those who were in the Grand Committee, when I say that Members as a whole have tended to put in the highest priority the reduction of the size of classes and the raising of the school-leaving age to 15. I am not, however, in the least ruling out the development of junior colleges. That must proceed alongside the other matters. In conclusion, I commend this Bill to the House as one

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    which takes not only a step but a great step forward in providing adequate machinery for the development of education in Scotland. I agree that there may easily be questions of finance to be considered as we go along. I have never shut my eyes to the likelihood that in the immediate post-war years, all manner of questions of local finance may have to be considered and solved by whoever occupies the position of Secretary of State for Scotland. That may well be so, but it is too early yet to foresee exactly what might happen. Apart from that, I believe this Bill gives us a great deal of useful material for working out the progress of Scottish education, and that Scottish Members, in co-operating throughout in the preparation of this Measure, have performed a very real service to our country.
    Question put, and agreed to.
    Bill accordingly read the Third time, and passed.

    LIABILITIES (WAR-TIME ADJUSTMENT) (SCOTLAND) BILL [Lords]
    Considered in Committee.
    [MR. CHARLES WILLIAMS in the Chair]

    LIABILITIES (WAR-TIME ADJUSTMENT) (SCOTLAND) BILL [Lords]

      CLAUSE 1.—(Application for adjustment of debtor's affairs.)
      6.28 p.m.
      Mr. Neil Maclean: I beg to move, in page 1, line 11, after "incurred", insert:
      "or that his assets are worth preserving and that an adjustment on the part of his creditors whether by reducing or postponing payment of their debts or otherwise compromising the same will be of ultimate advantage to themselves as well as to the applicant."
      I hope the Lord Advocate will be able to accept some of these Amendments on the Order Paper, because I am of opinion that they will not merely clarify some parts of the Bill, but will also bring within its scope a larger number of people than it at present sets out to include. The purpose of this Amendment is to prevent a debtor company from being put into an awkward situation whereby it is likely to lose not merely moneys, but also property, and machinery within such property, through being in debt. We must bear in mind that this Bill ought to have been brought in three years ago,
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      following the English Bill of a similar nature. Since then there has been, to my knowledge, at least one company which has suffered grievously because of the delay on part of the Scottish Office in following up the English Act with this Measure.
      The Lord Advocate (Mr. J. S. C. Reid): I do not think the hon. Member quite realises how wide the terms of the Bill are already, and I suggest to him that the objects of this Amendment are already met by Clause 3 of the Bill, and in particular by Sub-section 2 (e and f). Those paragraphs provide:
      (e) for postponing the payment of the debts or any of them for such period as the court thinks fit;
      (f) for postponing the realisation for such period as the court thinks fit of property which it would be unreasonable to realise immediately owing to its temporary depreciation in value or for any other sufficient cause.
      It seems to me that those provisions which allow very great elasticity for delaying the realisation or postponing the debts, really meet the point, which is a very real one, that the hon. Member has in mind. My only reason for being unable to accept the Amendment is that the hon. Member's objects are already adequately met.
      Mr. Maclean: Does the Lord Advocate mean that the case about which he and I have already had discussions on the Floor of the House will be brought within the scope of the provisions which he read to the Committee?
      The Lord Advocate: No, because they would not have been brought within the scope of the Amendment. We have had all this out twice before in the House, and I did not intend to go into the matter again. I expressed my view clearly on the last occasion. There is nothing in the Bill which would have appealed to the hon. Gentleman's friends as being valuable to them, and I do not think there is anything in his Amendment which would avail them in any way. On the last occasion I said that in my view the circumstances of the case did not come within the scope of the Bill. It was possible for the hon. Gentleman's friends to apply for relief under the Bill, but they would not have got anything that made it worth their while under the principles of the Bill.
      Mr. Maclean: Am I to take it, then, that this Bill does not apply to certain companies which, because of war circumstances, have been placed in a very difficult position already, and that there is no possibility of that particular firm being able to get out of its difficulties by an amending Act which will take other companies out of their difficulties? The Lord Advocate will remember that in the Debate when the other Bill was introduced less than a year ago, the feeling of the House was so strongly against him that one hon. Member, who had been a Minister, declared that if he were to bring in a Bill of Indemnification and explain the reason for its being brought in with regard to this company, it would be carried by a majority of Members, because they would be sympathetic to the company. The Lord Advocate now brings forward a Bill which does not fit the purpose at all, after leaving the whole matter, as it affects Scottish firms, till almost four years after an Act was passed to give security to English firms. The whole matter is disgusting.
      The Lord Advocate: If the hon. Member wants to reopen the matter, I must ask the Committees indulgence for a few minutes. The facts of the case which the hon. Member has in mind are as follow. The hon. Member's friends—
      Mr. Maclean: They are not my friends. It is merely a firm in my constituency to whom I wish justice to be done.
      The Lord Advocate: Three of the hon. Member's constituents came up to the House of Lords. Two of them failed on the merits of the case, and the third might have had a case if, not this Bill, but another Measure altogether—the Courts (Emergency Powers) Act—had been brought up to date. I say they might have had a case, because it is by no means certain that they would have had one. Let us assume for a moment that they would have had a case—a big assumption. Then, all that they lost by reason of not having this Act to fall back upon was the costs which they were required to pay for their unsuccessful appeal. That appeal covered a multitude of other things as well as this point. That is by the way. They have suffered no other prejudice of other sort or kind financially, apart from the order to pay costs. If that order is still out against
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      them, they are entitled to consider this new Bill and, if they think it worth their while, to ask for a scheme or arrangement with their creditors in order that those costs may be brought into the general picture. But from what I know of the case, I should not have thought it was likely to pay them to take that line, although they are free to do so. They must say whether they want to come in or not.
      Mr. Maclean: Am I to understand that firms which have not been protected up to now, and will not be protected until this Bill becomes an Act, may in some cases not come within the protection afforded by the Bill, although under the war circumstances mentioned in the Bill they had suffered damage, either financially or in other ways? Am I to take it that these firms still remain outside the Bill?
      The Lord Advocate: I cannot make it plainer to the hon. Member. Everybody is entitled to come in if he wants to do so and is affected by war circumstances in the manner provided in Clause 1, but it may not pay a person to come in because he may not get any very great advantage out of coming in. It is for him to consider whether or not he will get an advantage.
      Amendment negatived.
      The Chairman: I ought to tell the hon. Member for Govan (Mr. Maclean) that the next Amendment in his name—in page 1, line 26—if he wishes to move it, will come in Clause 3, page 4, line 36.
      Clause ordered to stand part of the Bill.
      Clause 2 ordered to stand part of the Bill.
      CLAUSE 3 (Provisions of schemes.)
      Mr. Maclean: I beg to move, in page 4, line 36, at the end, insert:
      "(c) in the case of a private company within the meaning of the Companies Act, 1929, for the settlement of debts by the issue of shares and/or debentures in such company or for the reorganisation of the capital structure of such company in order to provide shares or debentures in satisfaction in whole or in part of such debts."
      The Lord Advocate: This Amendment, which refers to private companies, suggests that there are circumstances where it would be proper that the creditors of the company should take payment either by way of an issue of debentures or by way of a further issue of shares. So far

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      as debentures are concerned, the matter is already covered by the terms of the Clause, because under Sub-section (2, c) the granting of security is included in the methods of drawing up a scheme, and a debenture is nothing but a security. So far as shares are concerned, the matter is a little bit different. If all the parties agree that a further issue of shares to the creditors is a proper way of clearing up the matter, they are free to agree to that as the Bill stands, but we do not think it would be desirable to allow a further issue of shares to be forced upon an unwilling private company. It would be extremely embarrassing if a scheme of that sort had to be drawn up, particularly in view of the fact that there are very often in private companies severe restrictions about the entry of new shareholders without the consent of the directors. Therefore, I think the matter ought to remain as it now stands in the Bill. Debentures may be issued by agreement, or under a scheme which is prepared failing an agreement. So far as shares are concerned, they ought only to be issued by general agreement and ought not to be forced upon an unwilling company.
      Amendment negatived.
      Clause ordered to stand part of the Bill.
      Clause 4 ordered to stand part of the Bill.
      CLAUSE 5.—(Protection and vesting orders.)
      The Lord Advocate: I beg to move, in page 6, line 2, after "any," insert "civil."
      It has been suggested to us that the existing terms of the Clause are rather wide and that the words "any proceedings" might include proceedings in the nature of criminal proceedings where a penalty is called for. There is no intention to protect people from proceedings of that kind, and accordingly, I am moving to insert the word "civil" to make clear the object of the provision.
      Amendment agreed to.
      The Lord Advocate: I beg to move, in page 6, line 3, after "property," insert "in respect of any provable debt."
      Under the Clause it might be thought that a protection order operated so as to protect the debtor against debts subsequently incurred after the order. We
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      do not think that is right. The protection order ought to be a standstill order for anything that has occurred before its date, but if the debtor incurs other obligations afterwards, the law should take its ordinary course.
      Amendment agreed to.
      Clause, as amended, ordered to stand part of the Bill.
      Clauses 6 to 12 ordered to stand part of the Bill.
      CLAUSE 13.—(Appointment and remuneration of trustees.)
      The Lord Advocate: I beg to move, in page 10, line 23, at the end, insert:
      (2) There shall be paid to any such trustee such remuneration and expenses as the Treasury may determine and such remuneration and expenses shall be defrayed out of moneys provided by Parliament.
      This is a Privilege Amendment.
      Mr. Maclean: This Amendment is not on the Order Paper.
      The Chairman: It is not on the Order Paper. It is a Privilege Amendment, and is already in the Bill.
      Amendment agreed to.
      Clause, as amended, ordered to stand part of the Bill.
      Clauses 14 to 18 ordered to stand part of the Bill.
      CLAUSE 19.—(Exemption from stamp duties and court dues.)
      The Lord Advocate: I beg to move, in page 12, line 1, to insert:
      "(1) Where a protection or vesting order is made, or an adjustment scheme is approved, under this Act—

      (a) every deed, conveyance, assignation or other instrument relating solely to property which was the property of the debtor at the date of the protection order or of the approval of the scheme and which, after the execution of the instrument, is or remains his property or the property of a trustee appointed under the order or for the purposes of the scheme;

      (b) every writ, order, certificate, affidavit, bond or other instrument required for the purposes of the liabilities adjustment proceedings;

      shall be exempt from stamp duties."
      This also is a Privilege Amendment.
      Amendment agreed to.
      Clause, as amended, ordered to stand part of the Bill.
      Remaining Clauses ordered to stand part of the Bill.
      NEW CLAUSE.—(Proceedings to take place in camera.)
      The proceedings in any application under this Act shall take place in camera and all diligence or execution at the instance of any creditor shall be suspended and sisted on the presentation of a petition to the court.—[Mr. Maclean.]
      Brought up, and read the First time.
      Mr. Maclean: I beg to move, "That the Clause be read a Second time."
      The Lord Advocate: There are two points on this Clause. The first is that proceedings should take place in camera, and the second is a provision with regard to diligence or execution being suspended. With regard to proceedings being in camera, we do not think we can accept that. There are arguments on both sides but what influences us is this. We are depending, under the terms of the Bill, on the debtor giving a full and true account of his liabilities. As long as everything is to come out ultimately into the open, it is unlikely that debtors will attempt to leave out part of their liabilities. They will gain no great advantage if they do so, and they may cause a great deal of trouble. If proceedings are in camera, there is a certain temptation not to be too candid, and it is really for that reason that we think it would be undesirable that these proceedings should take place behind closed doors. With regard to suspending, diligence, I think the matter is almost covered already, because, under Clause 17 if any creditor tries to exercise his rights against a debtor, who might plead the terms of this new Bill but has not yet done so, he can be stopped and, under Clause 5, once the debtor has come into court and asked for protection he can also ask for a protection Order, which would stop the kind of thing the hon. Member has in mind. We think we have covered the whole ground that the hon. Member has in view, and this half of the Clause is unnecessary while the other half might lead to abuse.
      Motion and Clause, by leave, withdrawn.
      Bill reported, with Amendments; as amended, considered.—[King's Consent signified.]
      6.50 p.m.
      Motion made, and Question proposed, "That the Bill be now read the Third time."
      Mr. Woodburn: The Bill provides for the setting up of an honest broker to negotiate and settle between the two parties, the assumption being that the debtor will always be the person who is in difficulties. Is there anything in the Bill to cover the point when the creditor is in difficulties? Both parties might be "broke," and it might be rather more difficult if both have suffered from the war.
      The Lord Advocate: There is no specific provision to that effect but what we intend, and I think what we provide, is that the broad equities of the situation will be considered. In the first place, the duty of the official appointed is to try to get agreement. Plainly, at that stage the equities on all sides must be considered. If that fails, the trustee has to prepare a scheme. Again, it is his duty to consider the equities. I do not think there is any serious risk of embarrassment in the way the hon. Member suggests.
      Question put, and agreed to.
      Bill accordingly read the Third time, and passed.

    CAMPS BILL [Lords]
    Considered in Committee.
    [Mr. CHARLES WILLIAMS in the Chair]
    6.52 p.m.
    Clauses 1 and 2 ordered to stand part of the Bill.
    Bill reported, without Amendment.
    Motion made, and Question proposed, "That the Bill be now read the Third time."
    The Parliamentary Secretary to the Ministry of Education (Mrs. Cazalet Keir): My right hon. Friend explained on the Second Reading the object of the Bill and why it was necessary. As Members on all sides have welcomed it, I do not think it is necessary to do more now than say I hope it will receive its Third Reading.
    Question put, and agreed to.
    Bill accordingly read the Third time, and passed, without Amendment.

    NAVY, ARMY AND AIR EXPENDITURE, 1943
    Resolutions reported:

    "I, Whereas it appears by the Navy Services Appropriation Account for the year ended the 31st day of March, 1944, that, as shown in the Schedule hereunto appended, the total surpluses and deficits on Navy Votes for that year are as follows:

    Total Surpluses, namely:

    £

    s.

    d.

    £

    s.

    d.

    Surpluses of actual as compared with estimated receipts (Votes 2–6 and 8–16)

    33,072,113

    13

    3

    Total Deficits, namely:

    Deficiencies of actual as compared with estimated receipts (Votes 1 and 7)

    39,883,473

    12

    10

    Excesses of actual over estimated gross expenditure

    683,750,591

    9

    0

    723,634,065

    1

    10

    Net Deficit (charged to the Vote of Credit)

    £690,561,951

    8

    7

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of surplus receipts realised under Votes 2 to 6 and 8 to 16 towards making good the deficit in receipts under Votes 1 and 7."

    1. "That the application of such surpluses be sanctioned."

    [For details of Schedule, see Official Report, 1st June, 1945; Vol 411, c. 560–564.]

    "II. Whereas it appears by the Army Services Appropriation Account for the year ended the 31st day of March, 1944, that, as shown in the Schedule hereunto appended, the total surpluses and deficits on Army Votes for that year are as follows:

    Total Surpluses, namely:

    £

    s.

    d.

    £

    s.

    d.

    Surpluses of actual as compared with estimated receipts (Votes 2–15)

    18,939,450

    14

    1

    Total Deficits, namely:

    Deficiencies of actual as compared with estimated receipts (Vote 1)

    25,790,946

    16

    7

    Excesses of actual over estimated gross expenditure

    947,451,024

    18

    2

    973,241,971

    14

    9

    Net Deficit (charged to the Vote of Credit)

    £954,302,521

    0

    8

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of surplus receipts realised under Votes 2 to 15 towards making good the deficit in receipts under Vote 1."

    2. "That the application of such surpluses be sanctioned."

    [For details of Schedule, see Official Report, 1st June, 1945; Vol. 411, c. 560–564.]

    "III. Whereas it appears by the Air Services Appropriation Account for the year ended the 31st day of March, 1944, that, as shown in the Schedule hereunto appended, the total surpluses and deficits on Air Votes for that year are as follows:

    Total Surpluses, namely:

    £

    s.

    d.

    £

    s.

    d.

    Surpluses of actual as compared with estimated receipts (Votes 2–11)

    100,825,385

    11

    7

    Total Deficits, namely:

    Deficiencies of actual as compared with estimated receipts (Vote 1)

    117,185,389

    7

    6

    Excesses of actual over estimated gross expenditure

    483,173,914

    6

    6

    600,359,303

    14

    0

    Net Deficit (charged to the Vote of Credit)

    £499,533,918

    2

    5

    And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of surplus receipts realised under Votes 2 to 11 towards making good the deficit in receipts under Vote 1,"

    3. "That the application of such surpluses be sanctioned."

    [For details of Schedule, see Official Report, 1st June, 1945; Vol 411, c. 560–564.]

    Resolutions agreed to.

    PURCHASE TAX (CHARGES) (UTILITY MATTRESSES)
    6.55 p.m.
    The Financial Secretary to the Treasury (Mr. Peake): I beg to move,
    "That the Purchase Tax (Charges) (No. 2) Order, 1945, dated 15th May 1945, made by the Treasury under Section 20 of the Finance (No. 2) Act, 1940, a copy of which Order was presented on 29th May, be approved."
    By the Purchase Tax (Exemption) (No. 1) Order, 1943, bedding and certain other articles of a utility nature to which certain marks are affixed are exempted from Purchase Tax. During the war only mattresses of a utility character have been manufactured, but now the manufacture is being resumed of mattresses containing interior springs. These articles, which perhaps are not entirely of a luxury character but are halfway between a luxury and a necessity, should, it is proposed, bear Purchase Tax at the basic but not at the luxury rate, the basic rate being 33⅓ per cent. The Board of Trade have fixed maximum prices for these articles, and hon. Members who can afford them, and indeed other people, will be able in future to sleep on these mattresses containing interior springs and have the satisfaction of reflecting during their slumbers that they have made some contribution towards the revenue of the country.
    Captain McEwen: My right hon. Friend, I think, mentioned some other articles of bedding besides mattresses. Are they included
    650
    in the Order, or will it apply solely to spring mattresses?
    Mr. Peake: It applies only to mattresses. They are the only new articles in respect of which a provision of this kind is required.
    Question put, and agreed to.

    DEBTS CLEARING OFFICES
    6.58 p.m.
    Mr. Summers (Secretary, Department of Overseas Trade): I beg to move,
    "That the Clearing Office (Turkey) (Amendment) Order, 1945, dated 15th May, 1945, made by the Treasury under Sections 1 and 3 of the Debts Clearing Offices and Import Restrictions Act, 1934, a copy of which Order was presented on 18th May, be approved."
    The Clearing Office Order dated 15th May arises from an agreement made in 1945, the terms of which were made public in Cmd. Paper 6632. The object of this Order is to remove the obligation which was placed on exporters to make their funds available to the Clearing House under the terms of the principal Order, which they have had to do since 1936.
    Question put, and agreed to.
    ADJOURNMENT
    Resolved: "That this House do now adjourn."—[Commander Agnew.]
    Adjourned accordingly at One Minute to Seven o'Clock.

Preamble
The House met at two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Lord Plunket—Sat first in Parliament after the death of his father.

GOVERNMENT OF BURMA (TEMPORARY PROVISIONS) BILL.
Brought from the Commons, and read 1a.
LONDON COUNTY COUNCIL [MONEY] BILL.
Brought from the Commons; read 1a, and referred to the Examiners.

ENNERDALE GAS ORDER, 1945.
LORD TEMPLEMORE: My Lords, I beg to move that the first Resolution standing in my name be agreed to.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved.—(Lord Templemore.)
On Question, Motion agreed to.

CLEARING OFFICE (TURKEY) (AMENDMENT) ORDER, 1945.
LORD TEMPLEMORE: My Lords, I beg to move that the next Resolution standing in my name be agreed to.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved.—(Lord Templemore.)
On Question, Motion agreed to.

HOUSE OF COMMONS (REDISTRIBUTION OF SEATS) ORDER, 1945.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (THE EARL OF MUNSTER): My Lords, I beg to move the first Motion standing in my name.
Moved, That the Special Order, as reported from the Special Orders Committee on Thursday last, be approved.—(The Earl of Munster.)
On Question, Motion agreed to.

ELECTORAL REGISTRATION (No.2) REGULATIONS, 1945.
THE EARL OF MUNSTER: My Lords, I beg to move the other Motion standing in my name.
Moved., That the Special Order, as reported prom the Special Orders Committee on Thursday last, be approved.—(The Earl of Munster.)
On Question, Motion agreed to.

WATER BILL.
2.10 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Munster.)
On Question, Motion agreed to. House in Committee accordingly:
[The LORD STANMORE in the Chair.]
Clause 1:
Duty of Minister in relation to water.
1. It shall be the duty of the Minister of Health (hereafter in this Act referred to as "the Minister"), to promote the conservation and proper use of water resources and the provision of water supplies in England and Wales and to secure the effective execution by water undertakers, under his control and direction, of a national policy relating to water.
LORE STRABOLGI LORE STRABOLGI moved, after "Wales," to insert "to prevent the pollution of water supplies." The noble Lord said: This Amendment follows on the speech made by my noble friend Lord Addison on the Second Reading of this very important Bill, when my noble friend drew attention to the growing evil of pollution and contamination of rivers. Although it may be the intention of His Majesty's Government that the Minister, amongst his duties, shall have that of preventing, checking, prohibiting or putting a stop to pollution of water supplies, it does not actually say so. The first clause says it shall be the duty of Minister "to promote the conservation and proper use of water resources and the provision of water supplies," but nothing about seeing that the water is pure. I am
306
sure your Lordships will agree with me that this is a very important matter and it might be made a little more clear if the Government could see their way to accept my Amendment.
In this matter I am speaking for thousands of farmers whose cattle and stocks are dependent on rivers for their drinking water. If the water is contaminated the stock sickens and great harm is done to the whole industry of husbandry. Secondly, I am speaking for the angling fraternity. There are not only wealthy anglers; I am speaking for, I suppose, a hundred thousand fishermen the great majority of whom are artisans and working men. These form a most reputable and respectable body of people, who do no harm to anyone, who nearly always are good citizens and good fathers, and who are, in spite of the legends to the contrary, as truthful as any other section of the community. When a river or canal is contaminated by carelessness the fish are killed and these poor fellows are deprived of their harmless recreation. Also in these hard times the supply of freshwater fish is not by any means to be despised as a means of increasing the food supplies of the nation. If our rivers were properly looked after, stocked and conserved, I believe the food supply could be greatly increased. In any case the supply of freshwater fish is valuable and useful.
Now under the Bill the duty of preventing pollution of rivers and other water supplies is, as before, laid on various local bodies, boards of conservators, and so on. The truth of the matter is that these people have not the powers or the money in these days to prevent pollution. On Friday last I was talking to a very experienced member of the Hampshire river conservators who told me that both the Test—a very valuable river from the point of view of the farmer and of the supply of fish—and the Avon have been badly contaminated. They are two very famous Hampshire rivers. In both cases analyses have been taken of the water, which has been found to be less pure than it has been within living memory, with very bad results for both farmers and fishermen. The board of conservators have not much money, they have not much power, they do not want to make trouble and they really are no: the best people to proceed against those

307
who are responsible for polluting the rivers. Sometimes the war factories are responsible, and I suppose that that was inevitable. There would be a good deal of pollution in various parts of the country as a result of these new industries which have been established for war purposes. Partly also it is due to the growth of population and the neglect of local authorities— perhaps not through their own fault again but through war conditions— to provide drainage and sewage disposal plants. But the net result is that a great many rivers in this country are in a worse state than they have been for generations.
Last year, as the noble Earl no doubt knows, the Kennet, a very important river, was badly poisoned. The farms suffered very much. The farmers had to keep their cattle away from the water and thousands and thousands of prime fish, which would be very welcome at the present time, were made unfit for food. I have only given three examples, the rivers Test, Avon and Kennet. If the Minister would accept responsibility for this matter his inspectors could go about the country. He has his representatives and in any case they could trace cases of contamination and pollution and then take action on behalf of the Crown. That is a very different story from a local board of conservators proceeding against some wealthy and powerful manufacturing company, say a brewery, which may be poisoning the water. I think that explains the object of my Amendment. I am sure it has the sympathy of the noble Earl and the Government and I hope of all your Lordships. I beg to move.
Amendment moved—
Page 1, line 1o, after ("Wales") insert ("to prevent the pollution of water supplies").—(Lord Strabolgi.)
THE EARL OF MUNSTER: My Lords, the noble Lord who moved this Amendment is quite correct in saying that the insertion of the words which he proposes has the sympathy of His Majesty's Government. I do not disagree with the views he has expressed. As the noble Lord pointed out, the purpose of the Amendment is to add to the Minister's functions under this Bill the general duty of preventing the pollution of water supplies. There are, I am advised, a number of separate Acts dealing with pollution and its prevention. There are the River Pollution Prevention Acts of
308
1876 and 1893, the Salmon and Fresh Water Fisheries Act of 1923, and the Public Health and Drainage of Trade Premises Act, 1937. There is also a projected Bill, as my noble friend is probably aware, to set up river boards. I think that Bill will be the place at which to raise the Minister's position as regards the pollution of water supplies. The occasion for such a thing to be done will be when the general question of pollution is before Parliament. The Bill to which I have just referred will amend the general law with regard to pollution.
It is quite true that this Bill in certain clauses does touch upon the question of pollution, but it does so primarily in relation to the duty of public undertakers to prevent the pollution of any water, whether surface or underground, which belongs to them or which they are authorized to take. The Minister's duty in the Bill is to see that the water undertakers exercise their powers and perform their duties in this particular respect. That is already covered by the words "to secure the effective execution by water undertakers, under his control and direction, of a national policy relating to water." I think I have said enough to show my noble friend that I am not wholly against the proposal in his Amendment but it would not be possible to insert the words in this Bill. It would in fact be proper that these words, or words to a similar effect, should be inserted in the River Boards Bill which I hope will come along in the new Session. For these reasons I hope my noble friend will see his way to withdraw his Amendment.
LORD STRABOLGI: I am much obliged to the noble Earl for his sympathetic reply. Do I understand that the River Boards Bill is already drafted? If not, perhaps it could be considered whether these words, or similar words, could be inserted in it.
THE EARL OF MUNSTER: I am not at all certain whether the Bill has been drafted, but I will convey the noble Lord's suggestion to the appropriate quarter.
LORD STRABOLGI: I am much obliged and wish, by leave, to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clauses 2 to 14 agreed to.
2.15 p.m.
EARL DE LA WARR EARL DE LA WARR moved, after Clause 14, to insert the following new clause:
"If any statutory water undertakers by reason of toe construction of any well, borehole or other similar work or the extension of any existing well, borehole or other similar work, interrupt, or diminish the supply of water in use upon y neighbouring land (including any supply derived from a well or borehole and whether or not flowing in any defined channel) the statutory undertakers shall make provision for alternative supplies or pay full compensation to all parties interested for all damage sustained by them by reason of such interruption or diminishment of such water supply as aforesaid."
The noble Earl said: The point I venture to put before your Lordships is really an extremely simple one. It was referred to during the Second Reading debate on the Bill. It is this. A company or any water authority is entitled to enter into an area and sink bores or wells and thereby, it may well be, extract the total water supply that is available in that area. It may be that there is a whole community dependent on its own wells and in consequence of what is done the water supply of that community may recede. I mentioned on Second Reading the question of the watercress industry, but in fact it tray well happen that a whole village community of a few hundred souls may be deprived in this way of their water supply. If your Lordships will turn to Clause 14 you will see that by this clause they are deprived of any possibility of protecting themselves. At the present time, under the law as I read it, they have at least a possible means of protecting themselves—I do not say it is a satisfactory one— by sinking new wells, probably at a much greater depth. But under Clause 14 they are deprived even of that right, because the Minister is now in a position of being able to make an order prohibiting the sinking of any alternative borehole or wells whatsoever. They have no redress at all, if they are deprived of an existing right, of going over to an alternative, and have no right to be given another supply of water nor yet of being paid compensation. I suggest to your Lordships and to His Majesty's Government that this is a matter which requires consideration. It may be that the words of my Amendment are not the best way of dealing with the problem, but I am sure your Lordships will agree that there is a very real
310
problem and one to which it is right to draw the attention of His Majesty's Government and ask them to see to it before this Bill is passed that this undoubted grievance is put right. I beg to move.
Amendment moved—
After Clause 14 insert the said new clause.—(Earl De La Warr.)
LORD SALTOUN: Before saying anything in support of the noble Earl's Amendment, perhaps your Lordships will permit me to say what a pleasure it is to me that His Majesty's Government have seen fit to strengthen themselves by the addition of a young and distinguished kinsman of mine. I live in the country where the water supplies are scanty and capricious and I find among the country people, who are generally well up in the Common Law of the land, a theory that under the Common Law every man has a right to the waters that arise on his own land. I am bound to say that I feel a great deal of anxiety when that principle is threatened. Moreover, in the case where the Minister did not prohibit competition with the statutory undertaker, I think that an affected village would soon witness what I call a well race. I am bound to say that any private person who engages in a well race with a statutory undertaker will have a very difficult task ahead of him. I hope therefore His Majesty's Government will consider this Amendment very carefully.
VISCOUNT MAUGHAM: I think this is a matter which requires careful consideration. My justification for saying anything about it is that I have been concerned with a number of cases relating to similar matters, where water has been abstracted with very serious consequences. Your Lordships are no doubt aware that as the law stands, and until this Bill shall pass, there is no right to complain of the abstraction of water even by your nearest neighbour if in doing so he only interferes with water in an undefined channel. There have been many cases in which that has been enforced by order of the court. In other words, if there is a definite channel through which water flows you have a right, but if the channel is undefined you have not a right.
One observation that arises on this proposed Amendment— my noble friend with his usual candour says he is not wedded to the precise language of the Amendment— is that as the Amendment stands it

311
looks as if when a water undertaker constructs a well, borehole or other similar work, and some person in the neighbourhood conceives that his supply of water has been diminished, he will bring an action and will apparently be entitled to bring an action, although it may be that in fact the amount of abstraction or the diminution of supply has been exceedingly doubtful or very trivial. Although I have not had the opportunity of discussing it with the noble Earl, what I think would be a reasonable clause and one which might prevent a great deal of heartburn and trouble would be a clause so worded that it applied to cases where interruption or diminution was established. In other words, I should provide that "if it is established" that any statutory water undertakers have interrupted or diminished a supply of water—the words "have interrupted" would come in instead of "interrupt"—"whether or not flowing in any defined channel," and so on, statutory undertakers shall make provision for alternative supplies or shall pay (or be liable to pay, it should be) full compensation to all parties interested for such damage.
Such a clause would have the effect that it would apply only in the somewhat unusual cases in which you could prove your case and in which you were bound to prove your case. That might be some years after the damage had been done. Your Lordships know perfectly well— the White Paper on which this Bill is founded explains it with clarity— that you cannot tell the effect of a boring or anything of that sort at the time it is done, or even a year after it is done, because the amount of water supply is affected so much by the rainfall. Scientific people tell us that it has been known that it is not until three years after a particular operation which ultimately affects the supply of water in the neighbourhood that the effect of it is noted, observed, proved and the cause of it established. If the interference which Clause 14 contemplates is confined to known channels, it seems to me perfectly clear that the undertakers would then be liable, but I go further in support of my noble friend and say that the right of action should apply also to cases where water has come through unknown channels if it is established that the result of it has been to dry up a well or make a
312
stream cease to flow, or there has been some other, it may be, terrible effect on the neighbourhood of the operations of the undertaker in question.
Therefore I strongly urge on the Government, if they want to prevent a feeling of injustice to any people who are concerned with streams and wells, where the water supply, it may be for many years, has rested simply on these sources of supply, that they should accept either this clause or some other clause which will make water undertakers aware when they embark on some major operation under Clause 14 that they will have to compensate the persons who prove beyond a peradventure that they are damaged by what has been done.
2.26 p.m.
The EARL OF MUNSTER: The object of this Amendment, as clearly stated by the noble Lords who have spoken, is to require statutory undertakers to make provision for alternative supplies or pay compensation to the interested parties where, as a result of the abstraction of underground water by a borehole or new well, or the extension of an existing well or an existing borehole, the supply obtainable on neighbouring land is interrupted or diminished. I think it is clear to your Lordships that this proposed new clause is a matter of some importance, and perhaps therefore you will bear with me if I deal with the subject at considerable length.
I have no wish whatever to cross swords with the noble and learned Viscount, Lord Maugham, who has expressed to your Lordships his views upon the Common Law of England, but as I understood the remarks made by the noble and learned Viscount he was in point of fact supporting Clause 14 as it stands in the Bill at the present time. I am informed that under the Common Law of England every owner of land is entitled to take any underground water under his land which is not flowing in a defined channel; that is unless he or his predecessors have parted with this natural and normal Common Law right. He can, I understand, do exactly what he likes with it. He can abstract the water for his own personal use or for business use; he can sell or dispose of it; he can even open up and waste a flow of water which he does not require. I think normally there is enough water to provide for many wells without serious damage to

313
any, but is true that in some parts of the country, where underground water forms one of the main sources of supply for all purposes, this unfettered right has often led to competitive boring or waste of water. South Lincolnshire provides a well-known example of the difficulties likely to arise in a critical area.
The Common Law is, of course, the same in critical areas as in any other part of the country. Any one dependent on boreholes or wells for his supply has no remedy whatever if the activities of the neighbouring landlord result in interruption or in diminution of his yield of water. Statutory water undertakers, whether local authorities or companies, might be expected to have as landowners the same right as other landowners and at the same time be subject to precisely the same disabilities. But, in fact, as creatures of Statute, they are quite unable to exercise the ordinary right of a landowner to sink wells on their own land. To do that, they have got so have the express authority of the Minister of Health or of Parliament, and that authority is given not generally but only in relation to a well on a specified piece of land. The result, clearly, is that where the statutory water undertakers propose to sink boreholes or wells to abstract underground water from their land, there is an opportunity for objections to be made by all those who fear that they may be detrimentally affected.
On the other hand, the statutory water undertakers, on whom an enormous number of people are solely dependent, both for domestic water and trade water supplies, have, in general, no protection whatever against any unreasonable exercise by the adjoining landowners of their unfettered Common Law rights. I think it is true to say— and I think that it was, perhaps, suggested here to-day— that this has long been felt to be quite indefensible in areas where underground water is the main source of supply for all purposes, particularly in those areas where the strata are such that wells can affect each other's water over a considerable distance, and the total water resources are limited in relationship to the prospective demand.
To meet the problem, the Central Advisory Water Committee, under the Chairmanship, as your Lordships well know, of Lord Milne, recommended in
314
their first report, which was published in 1938, a measure of general control by licensing, in such critical areas, and on those recommendations Clause 14 of this Bill has, in point of fact, been drafted. Moreover, the White Paper published by the Government some time ago showed our intention in this matter quite clearly. That White Paper was published in April, 1944. Now this proposed new clause, which has been moved by the noble Earl, takes no regard of this system of control, but it does seek to perpetuate, and even to increase, the disabilities of the statutory water undertakers which I have just endeavoured to describe. In fact, it does intend to alter the whole of the Common Law on this matter in this country, but not for all alike— which would be understandable, though indeed a very big issue to raise at this stage— against the statutory water undertakers alone. It would, I am advised, compel them, and them alone, amongst owners of land, to pay compensation or to provide for alternative supplies where, for instance, the result of pumping from a new well, a newly extended well or a borehole, was to reduce the yield of water from some neighbouring well or borehole.
This, it seems to me, is a wide general obligation, and one which Parliament has never put upon water undertakers in all the very many hundreds of local Acts which have been passed from time to time in the House of Lords. It seems to me quite indefensible that such a general obligation should now be placed on statutory water undertakers everywhere in England and in Wales, and that no complementary obligation should be put on near-by landowners to compensate and provide for alternative supplies for statutory water undertakers where the yield from their wells might be interrupted or diminished by the activities not of themselves but of others. It is true to say that what Parliament has sometimes done is to include in local legislation in special circumstances, and in special circumstances only, and on shown cause, a protective provision limited to the specified zone of the water undertaker's well and its neighbourhood. This, usually, I am informed, does confer certain rights, on proof of damage, on owners of existing wells within a specified distance of the new well. There is an example of

315
this kind of clause in the East Worcestershire Water Act, 1941.
In the critical areas, which are areas such as I have described, in Lincolnshire, where underground water forms the main source of supply for practically every purpose, it is, I think, usually recognized that the general abstraction of underground water by all persons should be controlled in the interests of all those persons in such an area as that which would, probably, and properly, form the subject of a Provisional Order under Clause 14 of the Bill, and the system of licences would afterwards come into operation, in conjunction, in the case of water undertakers, with the authorization of works by statutory, orders so as to have regard to the general good, and riot to favour one or other sectional interest, whether public water supplies or not. The Milne Committee took the view that it would be impracticable to provide for compensation in respect of any control so imposed on all alike in these particular critical areas. In such areas and in the rest of the country where no such controls may be in operation, the Bill is designed to secure— through the provisions of the First Schedule to the Bill— the fullest publicity for the proposals of the statutory water undertakings, the widest possible opportunity for objection, and for the holding of local inquiries when the undertakers apply for the Order of the Minister under Clause 23 of the Bill.
This procedure, it seems to me, will enable all the facts of the particular cases to be brought out, and evidence to be given with regard to arty possible or probable interference which may be caused with the neighbouring supplies of a particular owner of a portion of land, and will enable all those liable to be affected to ask for the protection before the works are constructed. My right honourable friend will be willing, and indeed would feel hound, to consider on individual cases what is the proper and fair arrangement for all the interested parties concerned; and, on the facts shown to him, he will include in the Order authorizing the work suitable provisions to safeguard other interests on the same lines as Parliament has done in the case of some local Acts. In other cases, if necessary, he might include a provision for compensation in water; I think he would be against cash
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compensation. I would not go so far as to say that cash compensation would never be appropriate, but each case must be dealt with on the facts and on the merits.
I apologize for delaying the Committee for so long, but let me attempt to sum up what I have endeavoured to establish. To make drastic changes today in the existing Common Law, as this Amendment endeavours to do, and to deal with rights in underground water in the one-sided way which is proposed, would, in our opinion, be unfortunate and a mistake, when there are practicable methods of control in critical areas such as are described in Clause 14 of the Bill and the safeguards which are provided under the procedure in the First Schedule. The proper way to deal with these matters is that which I have just described. My right honourable friend feels strongly that the proper method is to consider each case on its merits and to give a licence or make an Order dealing with that particular case. I hope that, for the reasons which I have given to the Committee, the noble Earl will see his way to withdraw his Amendment.
EARL DE LA WARR: Will the noble Earl be good enough to answer one specific question? Let us assume that there are twenty cottages all dependent on shallow wells. A scheme is carried out in the district, and all those wells dry up. What will be the position and the rights of those cottagers? I am assuming that the Minister is right in allowing the scheme in the general public interest. He is appealed to, and he rightly allows the scheme to go through; but unfortunately those twenty cottages are deprived of their water-supply. What would be their position?
THE EARL OF MUNSTER: Off-hand, I cannot tell the noble Earl; but he will observe that, if they are deprived of their water-supply, they must have been deprived of it for some reason, and the reason why they have been deprived of it is, as I understand his argument, that the statutory water undertakers have come along and taken their water. I am afraid that my noble friend has not read the proposals in the First Schedule. Those cottagers would be the first people to lodge an objection with the Minister against the proposal of the statutory water undertakers to sink wells or bore

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shafts to obtain water, and take the water supply away from them.
EARL DE LA WARR: I do not think that the noble Earl can have heard the whole of my question. I am assuming that they did lodge a complaint.
THE EARL OF MUNSTER: Then the Minister will consider it.
EARL DE LA WARR: That will not give them any water. It may well be that if the noble Earl or I or any one of us were the Minister, one would, in the general interest, feel compelled to allow the scheme to go through, but that will not give these people water, nor will they have information before the scheme goes through that in fact their wells are going to dry up.
THE EARL OF MUNSTER: But they will have an opportunity of knowing that a scheme will operate in their district. I think that the noble Earl will agree with me that, when they have lodged their objection to the Minister, he will decide, and I cannot tell the noble Earl on a hypothetical case whether the Minister will or will not take action. When a case is put up it will be considered.
2.45 p.m.
LORD O'HAGAN: I would point out that it is often a considerable time before a shortage such as has been described takes effect. Under those conditions, I think that the noble Earl has not covered the case which has been put to the Committee.
THE EARL OF PORTSMOUTH: The noble Earl who speaks for the Government is so persuasive that he is very often difficult to deal with; but, as my noble friend has just said, it is often going to take a considerable time before we know whether such a disaster take place. There may be three or four wet years in which there will be no result, and then will come the disaster. I am well aware that that is probably a reason for refusing this Amendment, because it is going to be so difficult in law to establish the fact that there has been this loss of water; but I do not think that the noble Earl who replied for the Government is quite accurate when he says that the only people singled out are the statutory water undertakers. If you read Cause 14 you will find that those who allow water to go to waste are liable to
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get into trouble, and there the existing water owners are being penalized on another score, so that the proposed penalization of the water undertakers is in line with that of others who are to be penalized for wasting their existing water.
After all, the new water undertakings envisaged by the Bill will be almost entirely statutory water undertakings because it is necessary to get a licence to bore otherwise, and they are the people who are most likely to use water and ultimately to waste it. It is almost inevitable that we shall -start with a small scheme, perhaps 10,000 gallons a day, which may affect nobody; but by the time that people have put in bathrooms and a small garden suburb has sprung up, there may be 100,000 or 200,000 gallons a day being used, and that will be the time when the water undertaking will deprive other people of their water rights and start drying up the underground water-table.
I do not believe that this Amendment will work in practice. Nevertheless, I still strongly support it, because I believe that it will be a deterrent. If local statutory water undertakers are going to be faced with the possibility that, if they bore unfairly to their neighbours, they will have a large case on their hands, they are not going to go for the easiest and most available form of water, which may destroy the underground water-tables of the countryside; they are going to think again and go for slightly more expensive originally, but far more sensible ultimately, forms of water usage, and use waste water by purification; bringing it back to the land, where it is badly needed. I strongly support the Amendment, there fore, in spite of what my noble friend Lord Munster has said. I believe that we shall need all the time we can get to learn about underground water supplies, about which we know very little at the moment. If this Amendment acts as a deterrent to statutory water undertakers from the irresponsible use of water, I think it will have achieved its object.
THE EARL OF MUNSTER: I have no desire whatever to delay the proceedings of the Committee, but I think that the noble Earl who has just spoken has not really read through the whole Bill, if he will forgive me for saying so. Under Clause 14, which deals with critical areas, everybody is subject to licence, including

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the water undertakers; but, in spite of that, the water undertakers must not only get a licence, like everybody else, to bore for water, but also an Order made under Clause 23 of the Bill to authorize them "to construct, acquire by agreement, alter or continue…waterworks and works connected therewith." It seems to me that the cottages to which the noble Earl referred are amply protected by Clause 23. Further, I think that the noble Earl will forgive me for saying that he seems to have missed Clauses 28 and 29, which make it a duty resting on owners to provide water in pipes whenever possible, so that the Minister will consider carefully whether it was possible for the owners of those particular cottages to provide piped water, as is their obligation under Clauses 28 and 29.
VISCOUNT MAUGHAM: I am very loth to speak again, but we have heard a great deal about the Common Law from my noble friend who speaks for the Government here.
THE EARL OF MUNSTER: And from you.
VISCOUNT MAUGHAM: Not so much from me, but I want to say this. It is true that in the Common Law of England you may dig on your own ground and ruin your neighbour by abstracting his water, but how has that grown up? It has grown up from an age when there were very few houses in this country, and when water was not the necessity that it is now. There was very little provision for baths, and very little for washing up of dishes for food, and very little, in fact, for all the uses to which water is now put; and, after all, if we are doing something to prevent injustice by the deprivation of water is it a drastic alteration of the Common Law? It was not decided, until the case of the Corporation of Bradford, in which a gentleman named Pickles was concerned, that you could take away the water by sinking wells on your own ground in order to get the corporation to buy you out. Instead of the country, or the lawyers as a whole, thinking that that was a glorious proof of the justice of the Common Law, every one I have ever met considered it was a monstrous abuse, and a thing which ought not to be allowed.
I cannot believe that it will generally be considered to be a dreadful thing that
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when people are given special rights under this Bill, under Clauses 23 and 28, and so far under Clause 14, they should not seriously interfere with the water supply of the neighbouring area without giving compensation. Where the noble Earl is wrong in his argument that you have a right to appear before the Minister and ask for a provision as a condition of the licence for the work to be done, is that lie does not realize that when you get before the Minister with a claim, where a well has been sunk and any major operation for removing water has been effected, it is impossible to prove that damage will occur by what is being done except in the rarest of cases. You are helpless when you get before the Minister and it is only the lapse of time which will establish that your houses are worthless and ruined.
THE EARL OF MUNSTER: Do I understand that the water undertakers should have the obligation of paying compensation or giving an alternative supply of water for ever?
VISCOUNT MAUGHAM: You certainly ought not to understand that. If your water has been taken away you should have a reasonable opportunity of going to the Minister, if the clause takes one form, or to the court, if it takes another. If anyone is doubtful as to what is a reasonable time, you could put in a five-year or a six-year limit. I do not believe that less than a five-year limit would be fair. If you show that in wet seasons and in dry your water supply has dried up and you can no longer carry on your business, I cannot see that anything exists which ought to prevent you getting compensation.
LORD SALTOUN: It has been the invariable practice to assess what compensation is needed. Clause 28 refers to a supply of water for houses and schools, but it says nothing about farms.
2.54 p.m.
EARL DE LA WARR: I do not think it is necessary to trouble your Lordships with very much more as to the propriety of inserting this Amendment or something in the way of amended wording. I cannot help commenting on one of the remarks of my noble friend Lord Munster, in accusing me of not reading Clauses 28 and 29, which provide that owners shall

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if possible lay down a water supply. If I may say so that is a most appropriate provision. I thank Lord Maugham for what he has said on the subject of the Common Law. I always understood that it was the function of most legislation to alter the law of the land, whether it be the Common Law or some other law. So far as I see it, my Amendment only alters the Common Law in so far as it compensates the private individual for the loss to which he is being submitted of a right that he already has under the Common Law. They have the right to practise this at the moment. This Bill is depriving them of that right, and I am endeavouring to get some compensation inserted in the Bill for that purpose.
With the approval of your Lordships, I should like to move my Amendment in a slightly different form, in the light of the suggestions made by Lord Maugham. It seemed to me a valid criticism of the Amendment as I had framed it that it would be difficult to administer, and might cause a great deal of litigation, to decide whether damage had been done or not. I would ask leave to move the Amendment in the following form:
"If it is established in the opinion of the Minister within a reasonable period that any statutory water undertakers by reason of the construction of any well, borehole or other similar work, or the extension of any existing well, borehole or other similar work, have interrupted or diminished the supply of water in use upon any neighbouring land (including any supply derived from a well or borehole and whether or not flowing in any defined channel) the statutory undertakers shall be liable to make provision for alternative supplies or pay full compensation to all parties interested for all damage sustained by them by reason of such interruption or diminishment of such water supply as aforesaid."
I would suggest to the noble Earl that he should accept that Amendment, it being clearly understood that he and his advisers should examine it before the Report stage with regard to any necessary drafting alterations. I beg to move.
Original Amendment, by leave, withdrawn.
Amendment moved—
Page 17 line 6, insert as a new clause:
"If it is established in the opinion of the Minister within a reasonable period that any statutory water undertakers by reason of the construction of any well, borehole or other similar work, or the extension of any existing well, borehole or other similar work, have interrupted or diminished the supply of water in
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use upon any neighbouring land (including any supply derived from a well or borehole and whether or not flowing in any defined channel), the statutory undertakers shall be liable to make provision for alternative supplies or pay full compensation to all parties interested for all damage sustained by them by reason of such interruption or diminishment of such water supply as aforesaid."—(Earl De La Warr.)
3.1 p.m.
THE LORD CHANCELLOR (VISCOUNT SIMON): I am at a serious disadvantage because, being engaged on other public business, I have only been here for the last few minutes of this discussion. I must beg forgiveness, therefore, if I have not precisely understood the situation in which we stand at this moment, but I gather that the Lord Chairman is putting to the House, no doubt most properly, an Amendment which is not the Amendment on the Paper, and that there are manuscript changes, apparently changes rather difficult to read, of which the noble Earl has been good enough to inform us by word of mouth. I must confess— perhaps it is because I have not been here all the time— that I really do not understand, and I very much doubt whether a great many other noble Lords understand, precisely what it is we are asked to vote for. Surely the least the Government can ask is that they should be given reasonable time to consider the Amendment in the new form.
I was able to hear the end of my noble and learned friend Lord Maugham's speech with reference to propositions of law, but obviously this is much more than a lawyer's dispute; it involves enormous public interests. It is not, of course, the usual practice of this House to play ducks and drakes with these enormous public interests. But this may put fearful burdens upon various public authorities, and it is being done by an Amendment partly in manuscript which I will be bound to say the majority of members in this House do not understand. I should hope that your Lordships will not be prepared at this stage to accept this combination of words. Anyhow, that is not the way in which we ought to proceed and I would ask my noble friend— who spoke most persuasively, I am sure, on the merits of his proposal— and others who sympathize with him to recognize that the right course is not to put in this Amendment here on the Committee stage, but on the contrary, to have it put down in

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its proper form when it can be dealt with on Report.
EARL DE LA WARR: With all deference to the noble and learned Viscount, I understand that I am in perfect order in moving an Amendment slightly amended to suit the needs of the debate. The Amendment to my Amendment was put before your Lordships extremely clearly by the noble and learned Viscount, Lord Maugham, and I simply adopted his words. The principle of the discussion we have had is extremely clear, as, I suggest, is the nature of the Amendment, and therefore I would ask your Lordships to support me in pressing this Amendment on His Majesty's Government; it being perfectly clearly understood that there is a Report stage coming in the future, when it will be possible for His Majesty's Government to move any drafting Amendments if they so desire.
LORD TEMPLEMORE: In view of what my noble friend has said, I should not like him to be under any misapprehension. He said there is a Report stage coming. If there are no Amendments accepted there will not be any Report stage.
LORD STRABOLGI: The Lord Chancellor will perhaps have another opportunity.
THE LORD PRESIDENT OF THE COUNCIL (LORD WOOLTON): On Third Reading.
THE LORD CHANCELLOR: I was technically inaccurate. There is an opportunity of putting Amendments in on the Third Reading.
LORD WOOLTON: I hope the noble Earl will let this go. I hope I am not going to annoy any of your Lordships, but I am extremely anxious to get this Bill. I make no disguise of the fact that I do not like the speed with which, during this next week or ten days, we are passing legislation; that, your Lordships will agree, is something which at any rate we did not want. But here are the facts. This Bill is something of very great importance. When I brought in the White Paper and spoke on the matter your Lordships gave it very warm support and I know that you all want the main principles of this Bill to be carried into law. I am afraid— and it is obvious to your
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Lordships that I am not using any threatening language when I say this— that if we pass substantial Amendments that have already been discussed in another place—
EARL DE LA WARR: This has not been.
LORD WOOLTON: I am very anxious to make the position on this issue quite clear. If we pass substantial Amendments, or Amendments that have been discussed in another place, then the Parliamentary time available in another place will not make it possible for us to get this Bill. Therefore, much as I dislike the rush and the hurry, I am rather anxious to preserve this somewhat precious Bill. If the noble Earl will be good enough to let this go now we will look at it on the Third Reading. I make no promises without consultation with the Minister or consideration of the state of Parliamentary business in another place. It may be that subsequent legislation will have to be introduced, but I hope your Lordships will do your best to let us have this Bill to-day.
EARL DE LA WARR: When the Leader of the House makes an appeal, and particularly during these very difficult times, one is most anxious to fall in with his request. Unfortunately this is a matter of vital importance, possibly to quite small communities, but it is in order to help these small and important communities that this Bill is specifically put before us. I do feel that we shall be doing a great disservice to many people in the countryside if we let this Bill go through in its present form. The noble Lord has suggested that we may possibly lose this Bill if it has a major Amendment or an Amendment dealing with a subject that has been discussed in another place. I venture to suggest to your Lordships that, in fact, although important and dealing with an important matter, this is not a major Amendment, and that if it were put before the House of Commons as an Amendment accepted by the Government it might take possibly half a minute of time there. With regard to the other point, this has not been discussed in another place. It was in fact put down by a member on behalf of the Farmers' Union, who was unfortunately ill, and therefore it was not even considered. Those are the two points the noble Lord

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put to us. I suggest to your Lordships that neither of them is valid, and therefore that we should press forward with this Amendment.
Resolved in the negative and Amendment disagreed to accordingly.
Clauses 15 to 23 agreed to.
Clause 24:
Power of statutory water undertakers to acquire land by agreement or compulsorily.
(7) A compulsory purchase order made under this section may authorize the purchase of any land belonging to the National Trust notwithstanding that such land is held by the Trust inalienably, but where any such order authorizes the acquisition of land so held inalienably or of any land forming part of a common, open space or allotment, the order shall, subject to the next following subsection, be provisional only and not have effect until it is confirmed by Parliament.
(8) So much of the last foregoing subsection as provides that any such order as aforesaid shall be provisional only and not have effect until it is confirmed by Parliament 'shall not apply where the order provides for giving in exchange for such land other land, riot being less in area, certified by the Minister of Agriculture and Fisheries (in the case of a. common or an allotment) or the Minister of Town and Country Planning (in the case of land held inalienably by the National Trust or an open space not being a common or an allotment) to be equally advantageous to the persons, if any, entitled to commoable or other rights and to the public:
On Question, Whether the proposed new clause shall be there inserted?
Their Lordships divided:—Contents, 22; Not-Contents, 42

CONTENTS.

Reading, M.

Samuel, V.

Meston, L.

Wimborne, V.

Monkswell, L.

Carlisle, E.

Monson, L.

De La Warr, E. [Teller.]

Amulree, L.

O'Hagan, L. [Teller.]

Portsmouth, E.

Denham, L.

Rea, L.

Strafford, E.

Dorchester, L.

Saltoun, L.

Faringdon, L.

Strabolgi, L.

Easher, V.

Herlech, L.

Winster, L.

Maugham, V.

NOT-CONTENTS.

Simon, V. (L. Chancellor.)

Long, V.

Macmillan, L.

Margesson, V.

Ormonde, L. (M. Ormonde.)

Norfolk, D. (E. Marshal.)

St. Davids, V.

Rankeillour, L.

Northumberland, D.

Sankey, V.

Rushcliffe, L.

Stansgate, V.

St. Oswald, L.

Ailesbury, M.

Simonds, L.

Normanby, M.

Chesham, L.

Soulbury, L.

Salisbury, M.

Ebbisham, L.

Southwood, L.

Elgin, L. (E. Elgin and Kincardine.)

Stanmore, L.

Cavan, E.

Stratcona and Mount Royal, L.

Dundonald, E.

Greville, L.

Fortescue, E. [Teller.]

Hindlip, L.

Templemore, L. [Teller]

Iveagh, E.

Hindlip, L.

Jersey, E.

Jessel, L.

Thurlow, L.

Lucan, E.

Latham, L.

Wolverton, L.

Munster, E.

Lovat, L.

Woolton, L.

Shrewsbury, E.

Provided that—

(a) before giving any such certificate the Minister of Agriculture and Fisheries or the Minister of Town and Country Planning, as the case may be, shall give public notice of the proposed exchange, and shall afford opportunities to all persons interested to make representations and objections in relation thereto, and shall, if he thinks it necessary, hold a local inquiry; and

(b) the order shall provide for vesting the land given in exchange in the persons in whom the land acquired was vested, subject to the same rights, trusts and incidents as attach to the land acquired, and for discharging the land acquired from all rights, trusts and incidents to which it was previously subject.

3.17 p.m.
VISCOUNT ESHER VISCOUNT ESHER moved, in subsection (8), at the beginning, to insert "Except in the case of land inalienably held by the National Trust as aforesaid." The noble Viscount said: I hope this Amendment, which I am about to move, will be considered sufficiently small not to rock the Government to its foundations. When this Amendment was moved in another place, the Minister of Health endeavoured to maintain that there was no essential difference between National Trust

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properties and common land, and that it was quite reasonable for National Trust land to be exchanged under the same method by which the Government proposed to exchange common land. Surely there can be no comparison between the two things. Commons are selected for no particular quality except a low agricultural value. They are, in fact, lands which nobody in particular wanted to enclose, so that one piece of land is very much like another. On the other hand, the properties of the National Trust have been selected from the point of view of natural beauty or historic interest and have, for the most part, reached the Trust as gifts from those who loved them and were ready to make sacrifices in order to preserve them.
The State has recognized the special character of these properties by Acts of Parliament drawn up in order to protect them, and has given the National Trust the power to declare these lands inalienable for all time. Mr. Keeling (in another place) gave as an example Runnymede, and I cannot see how the noble Earl is going to maintain that if we were to take Runnymede away from the nation and give the nation in exchange two fields near Egham, he would have treated the nation fairly, or that it would be the same thing to lose the historic interest of the land at Runnymede and get, in exchange, something which has no historic interest at all.
I would draw your Lordships' attention to the name National Trust. It indicates not only that its properties belong to the nation but that they are held in trust on behalf of those who gave them to the nation. The Government propose to give themselves the right to break that trust, to take away land which the owner gave and to substitute for it land which the donor did not give. The Government of course would plead necessity, that they cannot carry out their water schemes unless they have these powers, and necessity disregards trusts and knows no law. I do not know where the Government got the arguments from but they seem to me familiar and I do not like the sound of them. I would venture to suggest to the noble Earl that he would be on sounder and more English ground if he remembered the words of Burke: "If I cannot reform with equity I won't reform at all." beg to move.
Amendment moved—
Page 26, line 23, at the beginning insert (" Except in the case of land inalienably held by the National Trust as aforesaid ").—(Viscount Esher.)
THE EARL OF MUNSTER: Clause 24 of the Bill gives power to statutory water undertakers to acquire land by two methods— either by agreement or by compulsion. If the land is to be taken by compulsion and objections are maintained, then a public inquiry has to take place in accordance with the proposals set out in the Second Schedule to the Bill. Land which is held inalienably by the National Trust can, it is true, be taken by a Provisional Order or by order of the Minister if there is other land offered in exchange, and if that other land is certified by the Minister of Town and Country Planning to be equally advantageous to the public. Again, if there is any objection in this particular sphere a public inquiry has to be held. It seems to me the body for which the noble Lord speaks and whose good work we are all acquainted with is really amply safeguarded.
Let me see if I can explain exactly what the Minister intends to do. It is quite impossible to give equally advantageous land in exchange for lands of unique historical importance but what my right honourable friend is concerned with is this. Suppose that on a portion of property now in the hands of the National Trust there are a group of cottages situated at a high level on the land and they could only be satisfactorily provided with public water if a tank was put in on a higher piece of land above the cottages. If in fact that happened to be the only place where it could be effective in order to give the cottages concerned their pipe supply of water, that would be done. That is all my right honourable friend intends to do. He is not of course in any sense suggesting that he should take enormous acres of beautiful countryside that has been left by some man or woman to the National Trust to be held forever for the benefit of the British public. Indeed, I will go so far as to say that my right honourable friend is very much against taking any land from the National Trust unless it is absolutely essential. The example which I have given is the one which I know my right honourable friend has at the back of his mind, but I assure your Lordships there is no intention whatever that the Minister

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should ever take any large area of land which is at present in the hands of the National Trust. I hope therefore my noble friend will see his way to withdraw this Amendment. I appreciate the fear which he might have that it is the intention of the Minister to take a large portion of such land, but I assure him the Minister has no such intention.
LORD STRABOLGI: If the noble Earl was the Minister we could accept exactly what he says and leave these priceless heritages safely in his hands, but unfortunately our experience of Government Departments is very different. My noble friend Lord Esher mentioned Runnymede. I know something of what had to be done in taking the initiative in preventing Stonehenge from desecration. Our greatest difficulty there was the Air Ministry, which had some hideous buildings on the skyline. Those buildings were of no use whatever, being relics of the first world war, but they completely spoiled the wonderful escarpment and the skyline. Yet the Ministry persistently refused to remove them. Eventually, by enlisting all sorts of authorities on the highest level, we got these accretions taken away. In the case of Stonehenge we raised a large sum of money, a great portion of which came from the United States of America. Americans were as anxious as we were to preserve this unique monument of the downs. If it should happen that there were cottages in Stonehenge that required a water supply, from what we know of Government Departments we know they would not hesitate at all. The relics of the Druids would mean nothing to them. They would say, "There is nothing in the regulations about that." Or take the case of Lulworth. Lulworth is not a place of unique historic interest, it is only beautiful, and we had the very greatest difficulty in preventing it being turned into a tank training ground. I am only calling attention to this as an example of soullessness and lack of imagination and vision and of an historic and national sense on the part of Government bureaucratic offices. I think the words of this Amendment are necessary and I should support them.
VISCOUNT ESHER: It is as much as one's life is worth to press any Amendment on this Bill, therefore I feel constrained to accept the noble Earl's suggestion,
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especially as I understand he proceeded to give what amounts to a Parliamentary undertaking that the provision will be administered in the reasonable manner which he has described. That being so I beg leave to withdraw my Amendment.
THE EARL OF MUNSTER: Certainly I give the noble Viscount that assurance and I am delighted to do so.
Amendment, by leave, withdrawn.
Clause 24 agreed to.
Clauses 25 to 6o agreed to.
Clause 61:
Saving for protective provisions in other Acts.
61. Except with the consent of the persons interested, no order made under Section thirty-two of this Act shall abrogate or affect—

(a) any provision contained in a local enactment for the protection or benefit of any specified person or class of persons or body of persons, whether incorporated or not;

(b) any provision contained in a local enactment for conferring on or preserving to the public rights of enjoyment of air, exercise and recreation on land or rights of access to land for those purposes or for conferring any right of way;

(c) any provision contained in a local enactment with respect to the quantity of compensation water to be discharged into any watercourse or the periods during which or the manner in which such compensation water is to be discharged.

3.28 p.m.
LORD WINSTER,LORD WINSTER, who had given Notice of five Amendments to this clause, moved, at the end of paragraph (a), to insert "or any provision contained in a local enactment with respect to the discharge of compensation water into any watercourse or the periods during which or the manner in which such compensation water is to be discharged." The noble Lord said: The Amendment I am proposing to Clause 61 involves also certain other clauses of the Bill. I gather that it would be for the convenience of the noble Earl if I deal with the whole matter at once. As it will be for my convenience also I am very happy to do so. What my Amendment is concerned with is the preservation beyond all possible doubt of the public's right of access to water catchment areas. I shall have to refer to the Birmingham clauses 'by which the legal rights of the public to access for air, exercise and recreation to commons passing into freehold possession of water takers, have been preserved. These clauses have preserved to the public a

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right of access to some 200 square miles, and as in this country the public have access only to one-tenth of the area occupied by commons and hills, to preserve 200 square miles of them is of some importance.
The present Bill gives the Minister the power to repeal such clauses. He has power to do so under Clauses 33, 23 (I) (a), and 9 (3). Clause 33 is the principal one of these clauses. Under that clause the Minister may— these are the words—
"by order repeal or amend any local enactment relating to the supply of water …"
Conditions under which water is collected obviously relate to its supply, and consequently any undertaker could appeal for repeal or limitation of the Birmingham clauses on such grounds, for instance, as that there would be risk of pollution unless the statutory rights of the public to access to the catchment area were withdrawn or limited. It is important to note that this power of repeal of the Birmingham clauses was not contained in the Bill as introduced. What was then Clause 59 and is now Clause 61 expressly limited the Minister's powers. It said that no repeal should abrogate or affect any provision of a local enactment conferring public rights of enjoyment of air, exercise and recreation. But having got over what might have been rather an awkward fence in this way on introducing the Bill, the Minister then proceeded to withdraw the limitation during the Committee stage and unfortunately during the proceedings in Committee the effect of his Amendments was not recognized, so that the Minister got away with it.
On the Report stage, when the inwardness of what had been done in Committee had been perceived, the Minister stated that he had no intention of issuing any order so to amend local Acts that the Birmingham clauses and the legal rights of access they conferred would be abrogated or affected. That is merely a statement of good intentions on the part of the present Minister. Like cooks and caretakers, Ministers come and go. It is not a question of the good intentions of the present Minister. The fact remains that the legal power to amend these local orders and affect the Birmingham clauses are in the Bill. I agree that if a serious objection were raised to any Order made under Clause 33 and maintained at a public
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inquiry the Order must be confirmed by Parliament. That is in Clause 33, but what that amounts to is simply that voluntary societies must do the work which should be done by Parliament. In my opinion vigilance on the part of voluntary societies is not a satisfactory form of protection. That is merely transferring the onus of protection which in the past had laid upon Parliament to the backs of voluntary societies, which will have to discover the meaning of an Order, which is not always easy, which will have to get a local inquiry held and will then have to get the whole business through Parliament. Those are very heavy tasks indeed to throw upon the backs of voluntary societies.
Parliament by this clause throws off its duty of initiative and its duty of protecting public rights and transfers that duty to voluntary societies. In the 1943 Bill, which presented an exactly similar problem, the Minister admitted that this was an insufficient protection and he accepted an Amendment to remedy it. But in the Bill which we are now considering we are back at the state of affairs which in 1943 the Minister agreed afforded only an insufficient protection. What is contained in Clause 33 permits the repeal of any local enactment relating to the supply of water and those words are wide enough to permit anything. The 1943 Bill gave us a perfectly firm commitment; the 1945 Bill gives us only a verbal assurance. I submit that in matters of such importance as this affecting the public right of access to land for air, recreation and exercise, a most important legal right, a verbal assurance only is an objectionable and unsatisfactory way of dealing with the matter. Therefore it seems to be right to bring forward Amendments again in a form which will bring the Bill as regards Clause 23 (1) (a) into line with what the Minister expressly accepted in 1943. Under the terms of my Amendment Clause 61 would expose the Birmingham clauses to Clause 23 (1) (a) and would protect them from Clause 9 (3) and Clause 10 (3) and above all from what is to my mind the highly objectionable Clause 33. Words which the Minister himself wrote into what then was Clause 59 and is now 61, which was opposed at Second Reading, gave the public absolute protection. The Minister obviously saw no objection to the public being given protection.
I think we ought to have unqualified protection, but my Amendment is modest. If it is accepted I agree that it only gives qualified protection. It in fact gives the Minister more than he asked for in the first draft of the Bill. That being so, I ask how the Minister can object to this Amendment. If he does object then let him go back to his original intentions and have unqualified protection, leaving any necessary minor Amendments to be dealt with, as they quite well could be, by short private Bills, and not taking away pubic access rights conferred by Parliament. If the Minister's assurance is to hold good for all time, why not put it into the Bill? It is the written word that remains and not the good intentions of a temporary Minister. My Amendments give effect to the considerations which I have ventured to lay before your Lordships. I beg to move.
Amendment moved—
Page 55, line 40, at end insert ("or any provision contained in a local enactment with respect to the discharge of compensation water into any watercourse or the periods during which or the manner in which such compensation water is to be discharged.")—(Lord Winster.)
THE EARL OF MUNSTER: The Amendments which stand in the name of the noble Lord, Lord Winster, were put down, as I understand it, to secure that what is commonly called the Birmingham clause shall not be interfered with. I quite frankly admit that I agree generally with the spirit which prompted the noble Lord to move this Amendment, but I hope in my reply to succeed in persuading him that the Amendment is not really necessary and that my right honourable friend has no intention whatever of interfering with the principle underlying what is known as the Birmingham clause. If I may make just one observation on Clause 33, which my noble friend mentioned, I would like to say that in point of fact he has ample safeguard. First of all, there is the Minister's assurance, and secondly, there is the fact that an Order made under Clause 33 of the Bill is provisional. It can have no effect until it is confirmed by Parliament. Clause 33 or a similar clause was not included, it is true, in the 1943 Bill. Indeed I have been told that there has never been a clause such as the Birmingham clause included in any Water Bill or its predecessors, the Water Undertakings Bills in
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1939 or 1943. Indeed, the very insertion of such a clause within the Bill must, I think, automatically refer to the specified tracts of land, and is not really appropriate to any Act of Parliament which deals with the general subject of water as a whole.
There was, and there still is, in Clause 61 of the Bill, provision designed to safeguard the Birmingham clause when the Minister comes to apply the new waterworks code, which is put in the Third Schedule to the Bill. In applying that code to a water undertaking he will have to review and to modify any existing local Acts or Orders. As the noble Lord's Amendments are drafted, they would prohibit the Minister from making an Order under any provision of the Bill except Clause 23, which authorizes the construction or acquiring by agreement, the alteration or continuance or maintenance of waterworks and works connected therewith, cutting down in any way the rights of access which are secured to the public under the Birmingham clause.
My right honourable friend went to the trouble— and indeed he went to considerable pains in another place— to show that it might be necessary in very rare cases to alter the Birmingham clause. But I think he went so far as to say that the only time he intended to alter it was when it was not practicable for some work to be executed anywhere except on some small piece of land to which the Birmingham clause is appropriate. I give as an indication the erection of a small pumping station, or some such establishment. I think that the guarantee which was given, that there was no question of any arbitrary or wholesale wiping out of these very valuable and useful provisions in the Birmingham clause, was sufficient for the purpose. I might add that these Amendments which the noble Lord seeks to include in the Bill, give the appearance of importing an express power to interfere with the Birmingham clause. The Minister does not seek the appearance of any express power, and he would, himself, not wish to have these particular words thrust upon him. I can say no more than to give the assurance which was given by my right honourable friend in another place, that it is not intended to destroy the Birmingham clause in every Water Bill which is passed through Parliament, but it is only in the very small and limited number of cases where land

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is required for a pumping station and such-like work that my right honourable friend would then seek to amend the Birmingham clause so far as it affected that particular area.
LORD WINSTER: As I forecast, in my remarks, that he would do, the noble Earl has referred to the fact of his right honourable friend having no intention of doing certain things. He speaks about the provisions of Clause 33 being guaranteed by a verbal assurance which has been given by his right honourable friend. The noble Earl also said in reference to this matter, that the Order would be provisional if opposed. As I pointed out in my earlier remarks, the onus of opposing an Order is being shelved by Parliament and is being thrown on to the backs of voluntary societies, which, obviously, will be at great loss in this matter. The noble Earl referred to an Order being made under Clause 33 of this Bill.
But let us look at the words. The original wording was:
"No repeal effected by or under this Act…shall abrogate or affect any provision contained in a local enactment for conferring on or preserving to the public rights of enjoyment of air, exercise and recreation."
Those words were clear and categorical, but they have been changed to this:
"Except with the consent of the persons interested, no Order made under Section thirty-two of this Act shall abrogate or affect any provision contained in a local enactment for conferring on, or preserving to the public rights of enjoyment of air, exercise and recreation. …"
If we come to look at Clause 32 we find that that only provides for embodying the third Schedule, which deals with the modernization of waterworks codes— in other words Orders which the Bill authorizes. The third Schedule cannot possibly touch the Birmingham clauses, so Clause 61, so far as that matter is concerned, concedes literally nothing at all.
I agree with the noble Lord— and indeed my Amendment concedes the point— that there is no objection to the Birmingham clauses being varied or abrogated to enable, for instance, extensions to reservoirs being carried out, or to permit of the erection of cottages necessary for workmen whose employment is connected with the reservoirs. That, as I say, is correct, and my Amendment makes allowance for
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that fact. Certainly there is no objection to the Minister varying the Birmingham clauses by Order, to permit of necessary works being carried out.
Really all that fie noble Earl's remarks on this head amount to are this. He repeats the assurance of his right honourable friend that it is not intended to do anything at all at variance with the Birmingham clauses except in regard to such minor matters as those that I have agreed it is appropriate he should have a right to do. The noble Earl is only repeating the verbal assurance given by his right honourable friend. I can only repeat that in a matter which concerns rights which have been granted to the public by Parliament, I do not think that a verbal assurance on the part of a Minister is sufficient. This assurance which is given should be translated into words in the Bill which will make it binding upon his successors.
On Question, Amendment negatived.
Clause 61 agreed to.
Remaining clauses agreed to.
Schedules agreed to.
Bill reported, without Amendment.

WELSH CHURCH (BURIAL GROUNDS) BILL.
3.50 p.m.
Order of the Day for the Second Reading read.
THE EARL OF MUNSTER: My Lords, this very short Bill resolves finally the problem of the transfer of the Welsh Church burial grounds, a matter which has been outstanding for a large number of years. Most noble Lords with Welsh interests at heart, and the noble and learned Lord Chancellor, who tackled this question during his tenure at the Home Office, will be happy to learn that the end of this difficulty is now in sight. The Welsh Church Act, 1914, which was the Act which disestablished the Church in Wales, vested its property in the Welsh Commissioners, and directed them to transfer it to various beneficiaries.
As regards burial grounds, the Welsh Commissioners were required to transfer the "modern" grounds— that is to say, grounds given as private benefactions to the Church after 1662— to the Representative Body of the Church in Wales,

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while the ancient grounds, the burial grounds existing before 1662, were to be transferred to small local authorities. For various reasons, into which I need not enter to-day, the local authorities refused to accept these ancient grounds, and some 700 burial grounds still remain in the hands of the Welsh Commissioners. Considerable discussion has taken place with the various representatives of public opinion in Wales, and indeed with Welsh Members of Parliament in another place, and, as a result, the present Bill can be truly said to be an agreed measure. The Bill provides for the transfer of all burial grounds which are now vested in the Welsh Commissioners to the Representative Body, and thus amends the Act of 1914, under which the Welsh Commissioners were required to transfer to different authorities the different categories of burial grounds which became vested in them by that Act. The new transfer will now take place on two conditions, which have been agreed to by the Representative Body: that there must be no discrimination in the arrangements for the burial of Nonconformists, and that the responsibility for the upkeep and for the maintenance of these grounds is to lie with the Representative Body.
If I may turn to the short Bill which is now before the House, I will briefly explain one or two of its clauses. Clause transfers en bloc all burial grounds now vested in the Welsh Commissioners so as to vest them in the Representative Body, on a day which will be appointed by the Secretary of State, but subject to one proviso— namely, the right of persons who were incumbents at the time of the passing of the 1914 Act to have these grounds vested in them during the remainder of their incumbency. Clause 2 deals with transferred burial grounds. Where a burial ground has, under the Act of 1914, already been received by a local authority, or would in fact be received on the termination of an existing incumbency, provision is made for the Representative Body to agree with the local authority concerned for the transfer of the ground to the Representative Body.
Clause 3 places an obligation on the Representative Body to maintain in decent order the burial grounds which will be transferred to them under the provisions of the Bill, a matter to which I have previously referred, and it is provided
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that the Representative Body shall perform this duty in such manner as to preserve public amenities. The only other clause to which I need refer is Clause 4, which specifically provides, as I have already mentioned, that there shall be no discrimination in the matter of burial between members of the Church in Wales and other persons. This Bill is largely due to the considerable amount of work put into it by my right honourable friend Mr. Morrison, and it is largely due to him that it now comes before your Lordships' House, and I trust will shortly become an Act of Parliament. I beg to move that it be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Munster.)
3.55 p.m.
VISCOUNT SANKEY: My Lords, I hope you will permit me, as Chairman of the Representative Body of the Church in Wales, to congratulate the Government upon this Bill, which transfers the ancient Church burial grounds to the Church in Wales. It is an agreed Bill, which will be widely welcomed in Wales, and it owes much to the friendly and tactful negotiation with which the then Home Secretary, Mr. Morrison, brought the parties together. It will cure a sore which has for years been an open sore in Welsh Church circles. On the date of disestablishment in 1920, these churchyards became vested in the Welsh Church Commissioners appointed by the Crown, and it was their duty to transfer them to various local authorities. There were some 850 of these consecrated churchyards, and the vast majority of them surrounded ancient parish churches in the rural districts of Wales. They had been in the possession of the Church for centuries, and had been cared for as a sacred trust. Seven hundred of the local authorities refused to accept the transfer. The Welsh Church Commissioners could not administer the churchyards, many of which were in remote parts of Wales, and sought the help of the incumbents as a temporary remedy. The cost of upkeep has been considerable, and is increasing.
The attitude of the Representative Body of the Church in Wales has always been clearly stated, and has always been the same. We said: "We are prepared to accept the trusteeship of these churchyards, to keep them in decent order and

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to see that all the parishioners, whatever their religious beliefs, have equal rights to burial in them." In 1927 a Bill was introduced into your Lordships' House to enable churchyards which had been refused by the local authorities to be transferred to the Representative Body, but it came to naught. There were not, however, wanting many men of good will among the Churches, the universities and the local authorities in Wales who were not satisfied with such a state of affairs, and who endeavoured to reach a settlement. It is the beginning, it is hoped, of a new era, and it is with a sense of deep satisfaction that I believe that it emphasizes the growth of a better understanding between the Christian Churches in Wales, and removes a source of sectarian strife and bitterness; and it is in accord with Welsh public opinion. Lastly, it has been brought about by friendly negotiations between the Government, the Welsh Parliamentary Party, the Welsh university, the local authorities and the Christian Churches in Wales. I am 'glad that at last this source of sectarian strife and bitterness is about to be removed, and I commend this Bill to your Lordships.
4.2 p.m.
LORD STRABOLGI: My Lords, this is a very historic occasion, as those of us who are old enough to remember the bitter controversies over the disestablishment of the Church in Wales, and particularly over this question of the burial grounds, will recollect. When you touch upon the question of the burial grounds of any people, you are dealing with something very deep and very human, and the strong feelings engendered in Wales will be remembered by all of us who look back on those times. Now, as the noble and learned Viscount has reminded your Lordships, we have this remarkable compromise, and I do not think it is fitting that the Bill should pass its Second Reading without a recognition by those who sit on these Benches of its great historical importance.
4.3 p.m.
LORD HARLECH: My Lords, as a Welsh member of another place at the time, I opposed most vigorously the Act we are now seeking to amend, and championed the continued right of the Church
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to retain its churchyards, a right which was defeated by some of my friends in the other camp. We welcome, naturally, this act of peace between the various parties and denominations, which are now unanimous in Wales, and rejoice that the ancient churchyards are going to be administered without sectarian bitterness or differentiation once again. We felt very bitterly on this matter in 1914, and some of us ventured to say then that we did not believe that the handing over of the churchyards to the local authorities would work. We were convinced that it would never work, and that the local authorities would not want them. The bulk of the local authorities refused to have anything to do with the matter. Then it was suggested that the universities, the main beneficiaries under the Act, should take responsibility. I was Pro-Chancellor of the University of Wales and Chairman of its Council. I want to make it quite clear, especially in view of a letter in The Times, that the Welsh University did not and does not, under the Act, acquire one single churchyard. Yet it was suggested that the Welsh University would have to pay for their upkeep and maintenance when the local authorities declined to do so. We pointed out that under the Act we are not entitled to do so.
The only properties concerned were the diocesan estates, largely landed property vested in the Ecclesiastical Commissioners. We were unable, as a university, to use university funds to maintain some of these very historic churchyards with their ancient trees and monuments and records going back to the Middle Ages. It is tragic that a great many of them have been sadly neglected, but in accordance with the provisions of this Bill an undertaking has been given to restore them, maintain their decency and improve the amenities which have been neglected. Everyone in Wales, irrespective of Party denomination, is delighted. May I say that we owe the deepest debt to Mr. Herbert Morrison for his courage and initiative in healing what was in my young days in Parliament a matter of extreme bitterness? The whole question is now satisfactorily settled.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

REQUISITIONED LAND AND WAR WORKS BILL.
4.7 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR: My Lords, if you have possessed yourselves of a copy of this Bill you will see that it is a long and complicated measure and I would add the information that it is in some respects a very dull measure, although it is a Bill of the greatest importance and of much urgency. I think I am bound to give your Lordships somewhat full information as to its contents, although I trust that the conclusion will be that after it has been very considerably modified in another place, it will be found now to be in a state which will receive your Lordships' approval. This is a measure which is quite essential for the transition from war to peace. It is essential among other reasons for the protection of vast sums of the taxpayers' money which have been expended during the war and which to a certain extent may be recovered. At the same time, opportunity has been taken in it to make certain improvements in the machinery for derequisitioning property, to which reference will be found in Part VI, and in certain instances some improvements in the provisions for compensation. Those will be found in Part IX.
This Bill deals with a number of problems arising out of the use by the Government, for war purposes, of land which remains in private ownership. Of course, if the land has been acquired under the Defence Acts and has become the property of the Government, there is nothing more to be said. But vast areas of land have been made use of by the Government during the war without being purchased by the Government. Some of the land has been requisitioned and the ownership remains where it was. In some cases possession has never even been temporarily taken because by Defence Regulation No. 50 there was power for Government Departments to do work on land without even so much as taking possession. You might have an anti-aircraft gun put in the corner of some field without actually taking possession of the ground upon which it was placed. Owing to the necessity for speed in erecting factories, the creation of airfields, the improvement
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of communications, providing accommodation for troops and workers and so forth, very large sums of public money have been spent on buildings and other works which have been erected on land which the Government have never acquired, for the most part on requisitioned sites.
The question now is: What is to be done? On the one hand, all proper respect ought to be paid to the owners of property who have willingly agreed that their land should be used, and one does not overlook the rights of such people, in appropriate cases, to ask for it back. On the other hand, there are many cases in which the land which was requisitioned were unimportant areas and on those lands there have been erected at Government expense enormously costly and valuable buildings, factories and all sorts of things. Therefore your Lordships will see that there is a very nice question here as to how we are going to adjust these rights. Sometimes works have indeed been constructed, largely or wholly at the expense of the State, by arrangement with the owner of the land, without the exercise of any statutory powers at all— a very strong illustration of the universal public spirit with which everybody behaved during the war.
I cannot give the House exact figures, but to show your Lordships what a really serious problem this is, I am provided with an estimate that the past expenditure of the Government in these matters is of the order of £700,000,000. That is very largely in connexion with these modern airfields, with their immense cement runways and the like; and I am told that £60,000,000—a small sum compared with the amount I have just mentioned, but quite a considerable figure— represents factories built at the Government expense on ground that they have not acquired. Your Lordships know that if we left things as they were and simply retreated, this enormously expensive construction which has been put on the top of the soil would belong to the owner of the soil, who in the first instance let us have it as bare land.
Of course a very large part of that expenditure will simply have to be endured, it will be part of the war debt. The Scripture enjoins us to beat swords into ploughshares. Well, that is very good, and the more economical the Government are the more this admirable transforma-

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tion will take place, but there will be a certain amount of loss in the process, and the object, or one of the objects, is, while doing everything fairly, to do it without putting an undue burden upon the public. Whatever happens, a disagreeably large proportion will have to be borne as war debt. The question is what are we to do with this large collection of public assets in the shape of buildings, airfields and so on, which possess great value and a high degree of future usefulness? As I pointed out, unless we do something these things will all revert to the persons who own the land on which they were constructed, and there is no question, of course, of any adjustment being made.
Now what are the reasons why the State may be concerned to obtain ownership of the original land? Thinking it out, I feel that there are perhaps three reasons. The first and most obvious reason is that the State continues to need for its own use— urgently needs— the land and the buildings that have been erected upon it. You may have a military camp or barracks which will be needed for the post-war Army. There are many airfields which will doubtless be needed for the post-war Air Force. Some factories and other establishments may be needed for continued Government production and storage space. That is one consideration, which will apply in instances which need not be multiplied.
Then there is a second reason. The second reason would be that the Government may find it essential that we have the right to determine the post-war use of the property. I do not desire, especially to-day and at this hour, to have any controversy about the continuance of any control, but I think people who feel most deeply the necessity of promoting by every means in their power the export trade may think it not unnatural, within certain limits, that there should be some security that the public whose money has built the factory should not find the whole of their money wasted, and the factory used in directions which are of no assistance at all to the real needs of the country. We want to promote production to the maximum of our power, we want to take the steps, or encourage the step, which will secure the maximum amount of employment. And so it is important that the Board of Trade, the
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Department specially concerned, should have some say in the way in which the Government-built and Government-paid-for factories are used. I think a reference to Clause 8, subsection (5), will trate what I mean. That is the second reason.
And there is the third reason, and the third class of case is this. It is the case in which the Government may have no particular interest as a matter of policy in the future use of what the taxpayer has built and constructed, but yet it may be very sound public policy that, instead of retreating and giving this windfall to the fortunate subject, the Government should have in the name of the public the right to sell the factory, or dispose of it in some other way, so that it really may at once be put to a good use and may provide some measure of contribution to meet the public outlay.
What I have said has been in the endeavour roughly to sketch the needs of the situation. The next question is: If those are the needs which have to be met, what should the powers be that will enable those needs to be satisfied? A great many Departments are involved in this complicated matter. Certain of the Departments concerned— the three Service Departments, the Ministry of Supply and the Ministry of Aircraft Production— have power under the existing law to buy for defence purposes under the Defence Acts. Not everybody can do it— the Home Office cannot do it— but those Departments can do it. In this Bill steps are taken to ensure that the position of the Ministries of Supply and Aircraft Production is to be in substance the same as the position of the Fighting Services, who have always had rather more extensive powers. If your Lordships care for a reference you will find it in Clause 33, subsection (2), of this Bill. Apart from those Departments, there really is no need to go much further, except to say that the Ministry of Works have a general right to buy for all sorts of Departments what is necessary.
But there is another side to this, the importance of which your Lordships will be the first to recognize. There is one thing more we really must be sure of, and that is that when there is a question of giving notice to acquire what is at present not Government property, the Government pay the right price. There are some cases, of course, where if you left things

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as the law now is the Government will pay a great deal too much. Let us take the case of bare land on which, at the public expense, there have been great factories built. As I have already said, they might let things be, the requisition would cease, the Government would retreat, and the fortunate owner of this piece of bare land would find himself the owner of a vastly more valuable building. If instead of retreating the Government said, "No, after all, we want your factory, we must buy it from you," and the ordinary notice to treat is given the Government have to pay not merely the price of the bare land but the value of the factory, too, because the notice to treat requires that the value to be paid is the value of the whole property at the time when the notice is given. It would be the height of absurdity, if the taxpayer first of all found the money to build the factory and then proceeded to pay the money over again to somebody else who acquired the property under the existing land laws.
That is a case where far too much will be paid; but there are also cases in which, under the present system of compensation, much too little would be paid, because it may be that the result of the use of this requisitioned land has been to ruin it. You run tanks for three or four years over good ploughed land, wear off the good soil and get the whole thing in a hopeless state of ruin and decay. The same principle that you only pay compensation for the thing in the state in which you find it when it is acquired would enable the State to acquire that property at a cheap price, and of course it ought to pay more than the value of the land when it acquires it. Therefore we have to take great care that this is adjusted and you will find in Part VIII of the Bill a series of provisions, very cleverly drafted I think, which you may say in summary mean that you take the land and treat it as though it were conventionally taken back to the condition in which it was when the land was first requisitioned, and pay compensation for it. That is perfectly just and absolutely right to both sides.
Then there is a further thing I must mention. There are many Departments which have been vested, under the Defence Regulations, with power to requisition or otherwise make use of land, but they have no power compulsorily to
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acquire it at all. The Ministry of Works is a notable example, and there will be cases where the Services and Supply Departments themselves will need to purchase for a purpose, for example for resale, which they have no right to do as the present law stands. They had temporary powers but we want to provide that those powers shall go on a little longer, and the temporary powers of compulsory purchase taken in the Bill will endure for the remainder of the war period and a further two years thereafter. The war period ends when the emergency powers end.
A great deal of thought has been given to this matter. Nobody wants to maintain these exceptional powers longer than is needed but, it having been looked at very closely, there is no doubt at all that you have to provide longer than just the war period, and a further two years is the right period, as I think everybody now agrees. Ministers other than those at the head of the Service and Supply Departments to whom these temporary powers are given would be, for example, the Minister of War Transport, in connexion with the roads; the Postmaster-General, in connexion with telephones, telegraphs and all that sort of thing; and the Minister of Works. The Minister of Works comes in as a generally useful office boy. Of course, the Minister of War Transport and the Postmaster-General have their definite fields, but the Minister of Works is the general agent for everybody else, and it is much better that these dealings in the nature of land purchase should be in the hands of a limited number of Departments and not generally conferred on the whole range of Ministerial Departments.
The next point is one which was a very troublesome one and required a great deal of analysis. Power is taken in this Bill to acquire easements and rights restrictive of the use of land, subject to the payment of compensation. It is really very important. There is no such adequate power now and, as things stand at present, if you are not able to acquire the easement— that is to say, to acquire, for instance, the right of the neighbour to cross a field— you have to buy the whole field. It is plainly right that the Departments should in proper cases be given this power, so that, for example, when land is being acquired for use as an aerodrome

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less land would need to be acquired to get free access.
You may think I have plunged into the middle of a complicated affair and should have begun at the beginning. The first part of the first clause sets up a new Commission. It is called the War Works Commission and the Chairman of it is to be appointed by His Majesty. In Part II of the Bill you have provisions which show what is the degree of control over all this business which this Commission will exercise. That has been the subject of very long and careful debate in the other House, and it is in respect of this Part of the Bill that considerable changes have been made, with the result, I am glad to say, that both the Second Reading and the Third Reading of the Bill in the other place were carried unanimously, though there were considerable alterations in Committee.
I would wish to say, on behalf of the Government, that we do most fully appreciate that the mere fact that during the war the Government have had the use of somebody's land and have spent a lot of money on it does not, in itself, entitle us to say we will deprive the private owner of this land. It is necessary to do it where the case is fairly proved, but it is not in the least necessary, nor would it be right, to do it as a matter of course. You therefore want a War Works Commission and this is what the Commission is going to do. When objection is taken by anybody interested in the Department's proposal, if the Department makes a proposal to acquire land which it does not at present possess but which has on it the buildings which I have described, the objection to the Department's acquiring the land under these new proposals in the Bill has to be referred to this independent Commission. The intention is that the Commission shall be as strong and impartial a body as we can put together; and it will adjudicate, I have not the slightest doubt— it is not an instrument of Government in any way— as fairly as ever it can between the interests of the Government on the one hand and private interests on the other.
I may point out to your Lordships who are interested in this perennial controversy about private enterprise and Government, that this present topic presents a pleasing variation to the normal tune, because not only is there a possibility
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of controversy between the Government, on the one hand, and the private owner, on the other, but it is quite possible that there may be very considerable controversy between one Department of the Government and another Department of the Government. You will have the Minister of Town and Country Planning, who probably does not care so much about recovering money for the Treasury as does the Chancellor of the Exchequer.
There is the amenity consideration and there is the industrial consideration. Although properly under our Constitution different Ministers and different Departments will look after these different aspects, I anticipate that the Commission will not spend the whole of its life applying in a practical way the considerations which distinguish between private enterprise and the State. It will spend quite as much of its time in determining which view is right between, let us say, the Air Ministry on the one hand and the amenities on the other. I think I heard the noble Lord, Lord Strabolgi, in an earlier debate to-day, observe caustically that it was no good arguing with certain Government Departments about the historic importance of Runnymede. There is a Department which is interested in that aspect and I dare say this may be the sort of thing in which it may be very useful to have the War Works Commission.
Suppose the War Works Commission has one of these disputes brought before it because the Government plan is opposed, what is the degree within which it can decide the matter? There are two cases in which the decision of the War Works Commission— I am assuming for this purpose that it vetoes this proposal— is absolutely final. There are two other cases in which it is not final, but Parliamentary intervention is provided for. These are the two cases in which, if the Commission reports against the Department's proposal, that is the end of the whole matter. Noble Lords who are following with the Bill might like to know that it is Clause 5 (1) (a) combined with Clause 9 (1) with which I am dealing. The first case is that where the Government's reasons for wanting to purchase are purely financial, which is no more than saying, "We have spent a vast amount of money on this and we want to save on the deal." If in a case like that the Minister asks to exercise compulsory powers and the Com-

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mission says "No" (but of course before it says "No" it hears all sides) then that is the end of it and the Government have got to accept this as the final decision.
Perhaps as we are doing this a little carefully, I may refer to Clause 11 by which the Commission is required to address its mind not merely to the cost of works to the Government but the advantages or disadvantages which would accrue to any objector if the land were or were not acquired. As I pointed out, there will be many cases where if the land is not acquired the private objector will go off with a substantial booty. Another clause to be looked at in this connexion is Clause 10. The Commission can report that the land should not be acquired if any interested person is prepared to pay a reasonable sum, the sum specified by the Commission in respect of the value of the Government's works. Obviously that is quite reasonable. It may be that the owner of the land will come forward and say: "I recognize that you have built these splendid premises on my land and of course it is a great advantage to me. If you leave my land alone and if you let me have the buildings, I will make you a fair payment." If the Commission say that is the proper thing to do then what the Commission says goes. That is a case in which the decision of the Commission is quite final.
We have also thought that we ought in this Bill to give a very special protection in the case where the land that is claimed by the Government consists of dwelling-houses or gardens and things of that sort. The case is very much stronger for giving these things back than it is for giving back the bare land. I have in mind dwelling-houses, gardens and grounds essential for their proper enjoyment. Here again any negative report by the Commission saying that the Government ought not to acquire, although they want to do so, is final, and the Minister is required to report against the proposal to purchase unless such important conditions as those in Clause 11 (4) are fulfilled. One can easily see how an exception might arise. You might have the case, say, of a farmhouse which is now incorporated in a series of buildings connected with an airfield. You could not disentangle them and in a case like that it might be quite right to acquire
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the farmhouse. But that will all depend upon the circumstances of each case. That is the pleasant side of the matter from the point of view of the private owner.
Here are the two instances in which, even though the Commission do report that an acquisition should not take place that is not the end of the matter. There are cases in which the Government of the country, whatever be the composition of the Government, cannot surrender all their responsibility to the Commission. There may be cases where the Government feel that it is absolutely essential in the public interest that they must have a certain property, or at any rate the right to control its use, and that they cannot simply accept the decision of the Commission and there be an end of it. But if the Commission's report is adverse the Minister is not stopped from proceeding with his proposals for a purchase. There now comes in a parallel process very familiar to us all— namely, that the Minister would have to lay the Commission's Report, which of course, would be adverse to the Government, with its reasons and his own reasons before both Houses of Parliament. Provision is made that within the next forty sitting days a Motion in either House can reject the Minister's claim and then it is finally defeated. In other words, the House will appreciate the position that the Government will really depend upon the support of Parliament. The action of Parliament will be quite enough to prevent an acquisition taking place if that is the view which Parliament of the time takes.
It will be said that in another place they are sometimes so busy that it is not easy to get time for all this, for really these negative Resolutions depend for their success on getting a House after eleven o'clock. Well, your Lordships' House, sitting in a more confined space but possibly with less continuous preoccupation, will, I apprehend, be able without inconvenience to entertain such a proposal before five o'clock in the afternoon. I do not think myself there will be many such cases because by that time the rights and the wrongs will have been fully worked out. Though very unkind things are sometimes said of Departments, especially by gentlemen who for the moment are not in the Government but who hope shortly to be so, the real truth

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is that one does arrive in the end at a reasonable conclusion. I do not at all anticipate that there will be very fierce and constant Parliamentary wrangles on this subject. Public policy must have the support of Parliament. If Parliament rejects this as a definite piece of un-wisdom, then that will put an effective stop to the activities of the Minister.
I hope I shall be forgiven for a rather long speech, but the Bill is of great importance and it may be that future stages will not occupy much time. I must call attention to Part III. That deals with cases where highways have been stopped up or diverted under emergency powers to facilitate operations in airfields or factories or other war services, or which have been interfered with by the laying of mains, cables, railways, tramways and other things. There again the question is whether these war works should be retained. In some cases no doubt the tramway will be ripped up and the cable will be no longer needed, but where the retention of the war works is authorized it may be either impracticable to restore the original highway or, alternatively, restoration might seriously diminish the value of the Government asset. Therefore we have a provision closely parallel to those I have already explained. In such cases the Minister of War Transport may, by Order, authorize the permanent stopping up or the diversion of a highway if he is satisfied that it is necessary or expedient.
Such an Order may provide for the provision of a substituted highway going further round instead of straight across, if that is really necessary, and proper compensation will be paid. If you force a local authority to maintain a road that is four miles long because you have stopped up a road that is three miles long, the local authority has the burden of maintaining an extra mile and must be paid for that. Public notice must be given of this proposal and if any objection is received the Order has to be referred to this War Works Commission for report. The Commission may report that the Order should be made as proposed without modification, or may say that there ought to be certain modifications, or may say that the Order ought not to be made at all. If the Minister of War Transport still feels that in spite of
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that impartial pronouncement he must proceed in the face of an adverse report, he has to lay before Parliament a copy of the Commission's report and a copy of his own reasons for disregarding the recommendations. Again, a negative Resolution in either House within forty sitting days would stop his attempt.
In Part IV there are clauses which deal with work done under emergency powers during the war by the post Office. I see my noble friend Viscount Samuel making a note. Nobody knows the way to the Post Office better than he does because he used to preside over it. The point here is not so much the need to purchase the land as the need to maintain the works. That is the important thing. You may have great difficulty in doing it under the existing law and so we provide that telegraph lines, constructed under emergency powers, are to be treated as having been constructed under the ordinary powers of the Post Office, under the Telegraph Acts, subject to the rights of any person, whose consent to construction would have been required under those Acts, to require the removal of the lines. There are cases where quite grave inconvenience would be caused to the owner or occupier. There is power to the Postmaster-General to refer the question to the appropriate tribunal.
Part V deals with cases where not the Government but the local authorities are primarily concerned. What has happened during the war— probably only those closely interested in local government work are aware of it— is that we have used emergency powers to enable local authorities to occupy or use land for a purpose which in peace-time would only have been possible if they had bought under compulsory powers. I believe there is one case— there may be others— where houses for factory workers have been constructed on requisitioned land by a local authority. The Bill does not add to the power of compulsory purchase possessed by local authorities, but enables them to buy in such cases under a simplified procedure. If a local authority had it in mind to acquire land and construct houses upon it, the matter would begin with a local inquiry at which evidence would be given in order to get a report from the inspector of the Ministry of Health as to whether it was a good or bad scheme. It is no good going through all that if you have

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the houses on the land already. Therefore we have got round all that by a simplified procedure which I think I need not further describe.
Lastly the Bill contains a number of very important miscellaneous provisions. I ought perhaps to mention briefly one or two of them. The power of compulsory purchase is not the only power needed. We also need power to remove valuable works and we need power to repair damage clone to land which there is no need to purchase. In many cases the Government have put into a factory most valuable plant which under the ordinary law of landlord and tenant could not be removed, although of course it ought to be removed. It has been paid for by the Government, the Government want it, and in the end no doubt will sell it. There must be power for that. Again, you want power by which you can repair damage clone to the land, because sometimes land has been most frightfully damaged. In proper cases it ought to be possible to repair the land and so reduce the amount of compensation ultimately to be paid.
LORD STRABOLGI: Is my noble and learned friend dealing with Part VI?
THE LORD CHANCELLOR: This is contained in Clauses 28 to 30.
LORD STRABOLGI: May I ask a question? I am sure my noble and learned friend will not mind the interruption. In Part VI power is given to enter upon land to remove property, but if I read it aright there is no obligation to remove obstructions. For example, there are cases, with which no doubt the noble and learned Viscount will be familiar, of road blocks or anti-tank obstructions on private property. There is power to enter the land to remove, but there is no obligation to do so if I read the Bill aright. Perhaps the noble and learned Viscount will explain that. The compensation seems to be only for damage in removing the obstruction and not for any damage done to the unfortunate occupier when obstructions are not removed.
THE LORD CHANCELLOR: I think the noble Lord will find that the position is this. There is provision for payment of compensation. If you leave on the premise s some obstruction such as he described, compensation would have to be compensation which took info account the
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fact that the land was suffering from that obstacle. Alternatively, if the obstruction is something which should be removed then, of course, there is power in the Bill to remove and there is provision for payment for the damage done in the course of pulling it out. I think that the noble Lord will see therefore that the scheme operates one way or the other. It compensates the person whose place was left in this damaged condition and ensures that something may be paid to him for the depreciation of the value to his property caused by the presence of the obstacle there. That is to say where the Government do not pay for leaving the obstacle there, they may pay what is right for the damage that may be done in removing it.
LORD MOTTISTONE: I should be glad if the noble and learned Viscount could make this plain. Are we to understand that a citizen has not got the right under this Bill to require authority to remove the obstruction? Is he only compensated if the obstruction is removed by the Government? The removal of these things is vitally important in the case of many gardens and areas of agricultural land.
THE LORD CHANCELLOR: I am fully alive to this point. I think the explanation which I have given is clear. I do not think that the citizen, under this Bill, can ask for a mandatory injunction because the thing is settled either one way or the other. If the Government should leave on the noble Lord's property some unsightly pyramid, which it was hoped would check the advance of the largest German tank, no doubt that would cause injury to the noble Lord— though, of course, he could grow creepers over it. If it is left there he would be compensated for the damage done to his property, for he would have a proper claim. May I just add this? Part VIII of the Bill, as I think I have already said, provides for the necessary adjustment of compensation. We must be sure that we pay fair compensation, but not pay over again for something which we ourselves created and yet do not ourselves acquire at what may now be a very small value, because of the damage that exists because we ourselves have smashed it up. That is the object of Part VIII and it has indeed a very wide application.
My Lords, I am afraid that I have done what is not uncommon in a long speech and have said prematurely that there is

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only one more thing I wanted to say. I hope that I may be forgiven. This Bill comes winding its great length along and you hardly know when you have got to the end of it. The only remaining clause to which I must draw attention is Clause 52. It is not always that the doing of war work on land by the Government enhances the value of that land. In some cases it depreciates 'the value. There are cases where the provisions of the present Compensation Act are not wholly adequate. I will not go into detailed explanations after what already I have tried to say. The Bill has been before the public and it has been very much examined by a wide range of critics now for I think five months. It has been very closely scrutinized, I am sure, by some of your Lordships, and I should not be surprised to learn that some of you did not think that the Bill as introduced was satisfactory. I believe, though, that you will be very much more disposed to accept it now that it has been altered in quite important respects.
One of the things which at one time greatly stirred public feeling was the treatment of open spaces. I have not mentioned this matter in the résumé which I have given, because really, the point has disappeared. Originally, it may have seemed harsh that open spaces should be dealt with as the Bill when introduced provided. But now the open spaces clause is quite in line with the rest of the Bill, and if I do not spend time to defend it or expound it, I am sure that your Lordships will be satisfied. Commons or open spaces may not be purchased under Part II of the Bill without an affirmative Resolution of the House of Commons— not a negative but an affirmative Resolution. You have got to get this positive authority before you can do anything at all, unless the appropriate Minister certifies that equally advantageous land is being given in substitution. There are cases in which that might be so. Clause II, subsection (5) provides:
"Where the proposals are for the acquisition of any land under Section five of this Act and—

(a) the land to be acquired consists of or includes the whole or any part of a common, open space or fuel or field garden allotment; and

(b) the Commission are of opinion that the works in question are not both substantial raid permanent in their nature,

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the Commission shall, notwithstanding anything in the preceding provisions of this section, report that the proposals, so far as they relate to land consisting of or forming part of the common, open space or fuel or field garden allotment shall not be proceeded with."
That will, I believe, relieve a great deal of anxiety.
The Bill has now had introduced into it in all appropriate places directions as to the necessity of getting the opinion of the Minister of Town and Country Planning, and his view as to whether a particular acquisition is justified will naturally turn on his opinion as to whether these valuable schemes, either local or national, are interfered with. He is given a position of special prominence in the Bill with special powers in order that he may be quite certain that that most important aspect of the matter is not overlooked.
There is the Bill. A number of very important changes have been made in it, in the course of its passage by the whole House of Commons, in order to improve it. Efforts have been made not only for the purpose of providing protection for private interests but even more with a view to safeguarding public amenities, commons and open spaces. As a result of this I can only tell your Lordships that in my belief your Lordships will think that the Bill as it now stands does represent a just balance and a fair solution of what I am free to confess I have been led to regard as perhaps the most difficult and complicated subject arising out of the war that I have ever had to handle. I beg to move the Second Reading of this Bill.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
4.59 p.m.
VISCOUNT SAMUEL: My Lords, the Lord Chancellor has clearly shown to your Lordships that a Bill of this nature is quite essential in the public interest. The amount of Government work involved is enormous. The noble and learned Viscount who sits on the Woolsack mentioned the figure of £700,000,000. We have been dealing with such colossal sums during the years of the war that anything less than £1,000,000,000 is hardly noticed. In fact it is regarded almost as something in the nature of petty cash. But this sum of £700,000,000 is about equal to the whole of the British National Debt immediately before the last war, and in addition there

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are apart from this matter of money some 800,000 acres of agricultural land affected by these works— a most important consideration.
This Bill was introduced in January and in a form which led it to be regarded, and properly regarded, as a very highhanded measure. It gave the Ministers most arbitrary powers. It gave those who objected to the exercise of those powers recourse, it is true, to a Commission, but to a Commission which was to be appointed by the Treasury, and which evidently was expected to deal mainly with financial considerations. It showed scant regard for many public rights and amenities, and no regard at all for town and country planning. The Minister of Town and Country Planning was not even mentioned in the Bill in its original form, and apparently the Departments concerned with the drafting of the Bill had never heard that there was such a thing as town and country planning which was a matter of national importance. Land, it appeared, could be requisitioned by the Government, and then, if afterwards retained but not found to be necessarily needed for Government purposes in perpetuity, and therefore sold to private owners, it would be sold having been freed from all town and country planning restrictions by having been converted for a time into Crown property. I say this on the authority of one of the leading town planners, Sir Patrick Abercrombie, who gave the facts in a letter to The Times at that period. Commons and amenities were injuriously affected.
The result of all this was a storm of protest against this Bill. The town and country planning movement was naturally indignant; the National Parks Committee protested; the Commons Preservation Society made complaints, and in the House of Commons the Bill was most strongly criticized. The result of all that was quite effective, and it shows the valve of Parliamentary control over a bureaucracy, and the usefulness of stern and vigorous criticism in Parliament. The Bill has now been transformed. The Minister of Town and Country Planning has been given a proper status and an opportunity to speak on behalf of the interest with which he is charged. Amenities are dealt with in Clause 8 (2), and commons in Clause 12. All these matters have been treated to the
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satisfaction on the whole, I think, of the interests concerned. In the process, the Bill has been extended from forty pages to fifty-two. As to the War Works Commission, which has to-day so important a role in the whole matter, that is not now to be appointed by the Treasury, but by His Majesty. That applies not only to the Chairman of the Commission, as I think the noble and learned Viscount said by a momentary slip, but to all the members of the Commission also.
THE LORD CHANCELLOR: Yes.
VISCOUNT SAMUEL: That Commission will perform a useful function, as the noble and learned Viscount said, by on occasion arbitrating between two Departments which may easily come into conflict with one another and have differences of opinion on some of these matters. My noble and learned friend was good enough to refer to the fact that: more than thirty years ago I held the office of Postmaster-General. At one time I also held the office of Chancellor of the Duchy of Lancaster, and at one moment. I found myself in one capacity involved in quite a bitter controversy with myself in the other. As Chancellor of the Duchy of Lancaster it was my duty to claim certain sums as wayleaves from the Postmaster-General, while as Postmaster-General it was my duty to resist that claim, holding that the Duchy of Lancaster was a quasi-public Department, and therefore could not claim such way-leaves. The correspondence between us (if I may use the word "us") became at one time quite heated, and was liable to cause a breach in our normal friendly relations. Fortunately, when the matter was just approaching a climax and both Departments were becoming seriously disturbed, I surrendered the Duchy of Lancaster to another Minister, and I do not know to this day which side won; because very soon after that I ceased to be Postmaster-General and became Home Secretary, and the keen and warm interest which I took in the controversy at one stage was dissipated.
That this War Works Commission under the Bill does not have ultimate authority to reject representations from a Minister is something of which I do not complain. I think it is right that, as provided in the Bill, the Minister may have recourse to Parliament; because, after all, this Commission is an indepen-

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dent body, responsible to no one, while the Minister is responsible to Parliament, and, as these are not judicial matters proper to be treated by a court of law, it is, I think, the right conclusion of the whole matter that a Minister, if he is dissatisfied with the verdict of the Commission, should be allowed to have recourse to Parliament.
I and my noble friends on these Benches support the Second Reading of this Bill, and we have no Amendments to propose. I can assure the noble and learned Viscount, however, that if the Bill had been first introduced into this House in the form in which it reached Parliament, it would have had a very different reception. Indeed, I feel bound to say that the Government are open to much criticism for having permitted a Bill so drafted to be introduced into Parliament by them. It caused a great deal of trouble. It gave rise to the necessity for a considerable amount of agitation in other quarters, and it took up a good deal of Parliamentary time. To-day, however, my only duty is to shake a warning finger and to advise the Government not to do it again.
5.8 p.m.
LORD SALTOUN: My Lords, I cannot agree with the noble and learned Viscount that this Bill is dull; it is one of the most exciting Bills which has ever been before your Lordships' House. While I have great sympathy with his exposition, to which I have listened with care, it does appear to me that we may have in this Bill the principle that a man who has laboured all his life to acquire property may find in the end that he has a weaker claim to it than somebody else whose principal claim to it is that he wants it. I can illustrate the whole matter, out of many examples known to me, by one case which may turn out to be a case of particular hardship, and with which I am sure that every member of your Lordships' House will have the greatest sympathy.
A farmer of my acquaintance, towards the end of a long life, purchased a farm of which he was the tenant; and, being very skilful in the art of drainage, in a very short time he improved this farm considerably. He had associated with him on the farm his son, whose health had been broken by service in the Merchant
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Navy in the last war. During this war, a very large number of sites had been taken from his farm for use in connexion with an air station. I say "taken," because, as I expect many of your Lordships know, in most cases these sites were taken and occupied and works constructed on them before they were requisitioned. In nearly every case the first intimation which this man had of any works supposed to be done on his farm was the actual construction of the works concerned. On one occasion, however, he ascertained what was going to happen; and, as it involved a good deal of unnecessary damage, he asked me to go with him to the authorities to find out what was going to be done and to ask that some change might be made. I went with him, and we were able to obtain an alteration of the site which in fact has done no harm to anybody and has been satisfactory all round, but during the course of the conversation we pointed out that in no case had either of them been approached with a requisition or consulted about the work, and as a result in many parts of the farm the whole system of field draining had been cut, considerable areas of the best land had been flooded, and valuable crops had been lost. Moreover, the drains had been connected up in such a way that all the cattle troughs were filled with sewage. When this was pointed out the contractor merely said, "We will alter the connexions."
By this Bill it appears to me that the whole of this trouble is going to be perpetuated. When we complained to the requisitioning authority about the drains we were told that the agricultural executive committee knew all about them and had given permission for the work to go on. That, of course, is an absurd statement. Among other things a dwelling site was erected on the catchment area of the water supply to a populous village. Most of the enlightened county councils— I think Dumfries is one of them— insist that where a sewage-pipe crosses a water main the whole crossing should be shrouded in concrete for 30 feet on either side. Your Lordships will realize, therefore, the risks to which disregard of this kind of provision has subjected all the people in that parish. These things may very well go on during the war. These two farmers have said all along: "We can make a fuss, but we are not going to. This is only

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going on until the end of the war, and anything we do now will merely hamper the national war effort, and we are content to suffer all this until the end of the war." But, if the provisions of this Bill are exercised against these people, they will have a very serious grievance. There is no compensation which can compensate them for taking away some of the most valuable land on the farm. Everybody in your Lordships' House knows that the capital and fixed equipment for a large farm is quite uneconomic when it is applied to a much smaller farm. I have searched the Bill in vain for any provision which enables the whole farm to be acquired. One might say: "We have done a great deal of damage, and so we will buy the whole property;" but even so I do not think that the Bill does justice to the private owner, because you assess this farm on 1939 prices and he will have to buy another farm on the basis of prices in 1946, and I do not think anyone can say that that is fair and just treatment.
I should be happier about the Bill if in Clause paragraph (c) in subsections (2) and (3) had been paragraph (a), and if (a) had become (c). I do not like it to appear that hardships should be the last consideration to which the Commission should have regard. I think that change would greatly improve the Bill.
THE LORD CHANCELLOR: What is the suggestion?
LORD SALTOUN: It is with reference to Clause II, subsections (2) and (3). In subsections (2) (c) and (3) (c) you will see that "the degree of loss or hardship" is the last consideration. I should like to see that in the place of paragraph (a). I think that might even alter the spirit of the Bill. I feel that these are points which deserve consideration and I venture to bring them before your Lordships.
5.17 p.m.
THE LORD CHANCELLOR: The details of the case to which my noble friend refers are quite unknown to me. Even if the details have been checked I do not really think that those who are interested in the case need, be too much concerned, nor do I consider that the suggested change in Clause 11 would result in altering the spirit of the Bill. If you have got to list three things, (a), (b) and (c), (c) is just as important as (a). It is not a class list. It is not something which
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places the least deserving at the bottom; it is simply arranged for convenience. The consideration in paragraph (c) is just as much and as forcibly in our minds as the question of (a). If part of the farm is bought, it is quite true that there is no way in which the man who is going to lose that part can compel the Government to buy the whole of it. That is not the way in which our law works. If part of the farm is bought the amount to be paid is not merely the value of that part considered by itself; the compensation would also have to include what was considered to be appropriate for what is called injurious affection and for the severance which would have taken place. That is part of our regular law. I think there is no reason to believe that, because part of the property is taken, it would necessarily result in injury to the loser; you have to include an additional amount as a compensation for injurious affection, as the land may be made less valuable by the fact that it is divided into two. I cannot give any particular assurance, but I think the noble Lord should bear that in mind.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BURMA STAR
5.19 p.m.
LORD STRABOLGI: My Lords, I beg to ask the first question standing in my name.
[The question was as follows:
To ask His Majesty's Government whether the Burma Star graciously approved by His Majesty is to be issued only to those who have actually served in Burma in the present campaign, or whether it is to be issued to those who have done all their service in connexion with the Burma campaign in India.]
THE DUKE OF NORTHUMBERLAND: My Lords, the question is whether the Burma Star should be issued only to those who have actually served in Burma in the present campaign or whether it is to be issued to those who have done all their service in connexion with the Burma campaign in India. The qualifying area for land operations is service in Burma since December 11, 1941. In addition, service on land from May, 1942, to December, 1943, in the provinces of

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Bengal and Assam and since January, 1944, in those parts of Bengal or Assam east of the Brahmaputra will qualify subject to the prescribed conditions.
LORD STRABOLGI: Is the noble Marquess aware that this means that an officer who has served all his time at an office desk is entitled to the Burma Star, and does he think that that is fair?
THE DUKE OF NORTHUMBERLAND: I am not in a position to answer the noble Lord's question. As a matter of fact, the whole situation has been described in Command Paper No. 6633. Actually, the Provinces of Bengal and Assam were included for the period stated because the threat by Japan was then more serious. When the situation improved it became possible to restrict the qualifying service in India to service east of the Brahmaputra.
LORD STRABOLGI: I am sorry to press the noble Duke, but this is a matter that is felt very deeply by the fighting soldiers in Burma. Is he aware that according to the White Paper it means that the whole of the base staff in Calcutta will be entitled to the Burma Star if they were there between these dates?
THE DUKE OF NORTHUMBERLAND: I can only assure the noble Lord that I will bring what he says to the notice of the proper quarter and see that what he says receives every attention.

ARCTIC CONVOYS.
5.21 p.m.
LORD STRABOLGI: My Lords, I beg to ask the second question standing in my name.
[The question was as follows:
To ask His Majesty's Government, whether it is proposed to recommend to His Majesty that a special medal or star be awarded for service on the Arctic convoys to and from Northern Russia.]
THE DUKE OF NORTHUMBERLAND: My Lords, subject to the prescribed conditions, service with convoys to and from North Russia is to be recognized by the grant of the Atlantic Star.
LORD STRABOLGI: I am sorry to persist again, but is the noble Duke aware that this answer will not satisfy a great
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many of the officers and men of the Royal Navy and the merchant service, who performed most arduous duties in the Arctic convoys? The warfare was quite unique in its hardship and risk. And will the noble Duke be good enough to convey the suggestion that there might be a special decoration for this remarkable service?
THE DUKE OF NORTHUMBERLAND: I will again convey that suggestion to the proper quarter.

INCOME TAX BILL
Brought from the Commons; read 1a, and to be printed.

PONTYPOOL GAS BILL [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the promoters do not intend to proceed further with the Bill.
Ordered, that the Bill be not further proceeded with.

MID SOUTHERN UTILITY BILL [H.L.]
Reported, with Amendments.
  ARMY AND R.A.F. CASUALTIES.
  ARMY AND R.A.F. CASUALTIES.