Sitting of 22 July 1947

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

PRIVATE BUSINESS
HOVE CORPORATION BILL [Lords]
As amended, considered; to be read the Third time.

PRIVATE BUSINESS
NORTH CUMBERLAND WATER BOARD [Lords]
Read a Second time and committed.

STANFORD BATTLE AREA (PETITION)
Mr. Dye: I beg leave to present a humble petition from 6,308 sometime inhabitants of the parishes of Stanford, Tottington, Sturston, Hilborough, Ickburgh, Little Cressingham, Lynford, Croxton, Merton, Stow Bedon, Thompson and Wretham, all in the County of Norfolk, as well as dwellers in the parishes adjoining these, and others besides who are concerned for the cause of justice, for the preservation of the life of these villages and the beauty of our land, and for the urgent needs of agriculture at this time. The whole or parts of these villages have been, since June, 1942, contained within the Stanford Battle Area, in which lie 19,100 acres of land, and His Majesty's War Department—
Mr. Speaker: The hon. Member need not read the whole Petition, but should state its purpose, and read the Prayer at the end.
Mr. Dye: The main purpose of the Petition is contained in the following paragraph:
"In June 1942 at the behest of His Majesty's Government, all owners and tenants
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in this area gave up their homes and holdings at four weeks' notice, in the interests of their country then at war, sustaining much hardship thereby, but being assured by solemn promises given on behalf of His Majesty's Government by the General Officer Commanding Eastern Command at the time, General Anderson, and by the Deputy Regional Commissioner for Eastern Region, Lord Cranbrook, to many persons publicly assembled, that on the cessation of hostilities these houses and lands would be restored to them.
Two years have already passed since hostilities ceased; but His Majesty's War Department still retain their hold on the Stanford Battle Area; and now we learn that it is proposed by His Majesty's Secretary of State for War that the solemn pledges given in 1942 shall not be fulfilled, but on the contrary that those who left their homes and lands shall be deprived of them perpetually, the life of three whole villages being thereby at an end, and many farms and houses lost to the people of our country, who sorely need them."
Mr. Speaker: I think It is about time the hon. Member came to the Prayer.
Mr. Dye: Your Petitioners therefore humbly pray that, in pursuance of solemn promises given in that behalf, the said villages, parishes, land and property may be restored to the lawful owners and tenants thereof, and that the owners and tenants of the said adjoining Land may be left in peaceful possession of their homes and land, that thereby food in abundance may be produced: And your Petitioners, as in duty hound, will ever pray, etc.
Petition to lie upon the Table.

ORAL ANSWERS TO QUESTIONS

  GREATER LONDON PLAN (INDUSTRIES)
  Mr. Sparksasked the Minister of Town and Country Planning what powers he exercises in areas where decentralisation of industry and population is recommended in the Greater London Plan to prevent the continued use for industrial purposes of industrial sites and premises which are vacant or fall vacant at any time.
  The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. Fred Marshall): The Minister exercises general powers of direction over

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  local authorities, who in their turn have powers to prevent the continued use of industrial buildings, where the premises have been vacant for a period of 18 months, or where a substantial change in the industrial use is proposed. Subject to confirmation by the Minister, local authorities have also power to purchase such premises if they are required for development of a different character. More effective powers for the prevention of the continued use of land and buildings are contained in the Town and Country Planning Bill now before Parliament.
  Mr. Sparks: Is my hon. Friend aware that all efforts so far made to prevent further industrial development in congested areas have proved unsuccessful, and that continued industrial intensification continues apace?
  Mr. Marshall: I cannot accept the statement that all our efforts have proved unsuccessful in this regard. We are watching the position very carefully, and I have already indicated that powers are incorporated in the new planning Measure.
  Mr. Scollan: Would not the Minister agree that the time has come when industry should be stopped from coming to London, and should be spread all over the country, where there is plenty of room and people are looking for work?
  Mr. Marshall: So far as the London regional area is concerned, we have adopted a decentralisation policy.
  Mr. Sparksasked the President of the Board of Trade the number of approvals for extensions and new industrial projects since June, 1945, in London and the Greater London area as shown in the Greater London plan; the additional labour involved; and how the additional floor space and labour is dispersed throughout the region.
  The Parliamentary Secretary to the Board of Trade (Mr. Belcher): In the period beginning 1st June, 1945, and ending 31st May, 1947, approval has been given to 267 projects for new factories and extensions in the Greater London Area. These projects when completed and fully operating will require an additional 16,000 workers. The projects are widely dispersed throughout the area, but the information is not readily available as to their distribution in relation to the four
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  zones described in the Greater London Plan.
  Mr. Sparks: Is my hon. Friend aware that the granting of approval for industrial projects in London increases the industrial concentration in London and Greater London, and will he not ensure that more of these projects go to development and other areas?
  Mr. Belcher: I can assure my hon. Friend that before any approval is given for any extension or new building project in London, full consideration is given to the possibility of having it transferred elsewhere, and only in the most urgent and necessary cases is approval given for buildings in London.

  OLD AGE PENSIONS

    Staff, Blackpool Office
    Mr. Stanley Prescottasked the Minister of National Insurance how many persons are employed at the Blackpool branch of his Department dealing with old-age pensions; and if he is satisfied with the organisation and administration thereof.
    The Minister of National Insurance (Mr. James Griffiths): On 30th June. 2,269 persons were employed at Blacknool in the administration of the old age, widows' and orphans' pensions, of approximately four million people. As regards the second part of the Question, the decision to introduce last October the new pension provisions in the absence of a system of local offices, placed a great strain on the organisation of all three central pension offices of my Department, but particularly on the Blackpool office. I am satisfied that the necessary measures have been taken and will continue to be taken with the help of the local organisation of the Assistance Board to overcome the resulting difficulties and adapt the organisation to meet the requirements of the new scheme short of setting up the network of local offices, which must wait until next year.
    Mr. Prescott: As the right hon. Gentleman says he is satisfied, could he say how many old age pensions are still outstanding?
    Mr. Griffiths: If the hon. Member will put down a Question, I will give him an answer.
    Mr. Prescott: Is it not a fact that they are very numerous?
    Mr. Griffiths: No. I think we have made very good progress indeed
    Mr. Prescottasked the Minister of National Insurance how many employees found redundant at the Royal Ordnance Factory, Euxton, Lancashire, are now employed in the Blackpool branch of his Department.
    Mr. J. Griffiths: The number on 30th June was 48.

    Public Assistance Institutions (Inmates)
    Mr. Prescottasked the Minister of National Insurance how many old age pensioners residing in public assistance institutions have not yet received pensions at the increased rate.
    Mr. J. Griffiths: Of the 21,892 persons receiving contributory old age pensions in public assistance institutions all but 215 are in receipt of pensions at the increased rates. These 215 are in the main married women whose husbands have not yet qualified for the increased rate of pension.

    Personal Case
    Sir Waldron Smithersasked the Minister of National Insurance why Mrs. A. C. Messent, 95, Blandford Road, Beckenham, Kent, 71 years of age, has not been issued with her new pension book; and, in view of the fact that numerous letters to Blackpool have only been acknowledged with printed cards, particulars of which have been sent to him, if he will have inquiries made and take disciplinary action against the officials concerned.
    Mr. J. Griffiths: A pension book containing weekly orders at the increased rate of 16s. was issued to Mrs. Messent in October last. This was the correct rate of pension payable to her on the records held in my Department which showed that her original pension had been awarded in right of her husband's insurance.
    On 26th February the area officer of the Assistance Board reported that Mrs. Messent claimed to have an alternative right to pension at the 26s. rate based on her own insurance. Inquiries were necessary to establish that the statutory conditions of award on this basis were fulfilled. These inquiries were duly
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    completed, and a pension order book at the 26s. rate, together with an adjusting payment, were exchanged for the book from which she had previously been receiving payments at 16s. weekly, on 17th July. My inquiries show that there were unnecessary delays in the handling of this case, and I am taking suitable action.
    Sir W. Smithers: Does it not all prove that the administration of centralised control must break down, as the right hon. Gentleman was warned two years ago?
    Mr. Griffiths: I have had to administer these schemes which were built up by previous Governments.
    Mr. Anthony Nutting: Is the Minister aware that thousands of people are waiting for their pensions, and is he aware of the hardship that is being caused? If so, how can he possibly be satisfied with the administration?
    Mr. Griffiths: I have told the House more than once that this central administration was not of my creation. I do not propose to use it for the new scheme, but I have had to use the administration which was there, and which was created by previous Governments.
    Mr. Nutting: When will the Minister bring in some other scheme?
    Mr. Speaker: This Question deals with an individual pension, and not with administration.

    Supplementary Pensions, Wallsend
    Mr. John McKayasked the Minister of National Insurance if he is aware that, in the Wallsend area, men who apply for a supplementary pension are only allowed 6d., making a total of 26s. 6d., yet others living in the same building, Simpson's Hotel, paying the same rent of gs., who, apply for public assistance receive in total LI 15s.; and if he will instruct his Department to be more generous with the supplementary pension, so that pensioners have an income equal to those receiving help from the public assistance committee.
    Mr. J. Griffiths: I am making inquiries into the circumstances of this case and will write to my hon. Friend as soon as possible.
    Mr. J. McKayasked the Minister of National Insurance if he is aware that people living in Wallsend and receiving a supplementary pension of 6d., have to travel to North Shields to obtain it; and if he will either consider establishing an office in Wallsend borough, seeing that the omnibus fare to North Shields is 6d., or give instructions for the omnibus fare to be paid in addition to the supplementary pensions.
    Mr. J. Griffiths: Supplementary pensions are payable at the Post Office at which the pensioner cashes his main pension and there is no need for supplementary pensioners in Wallsend to travel to North Shields for this purpose. If, exceptionally, a supplementary pensioner is required to call at an area office, the Assistance Board tell me that their officers have been authorised to pay any necessary fares.

  NATIONAL INSURANCE

    Contributory Pensions
    Mr. Ewartasked the Minister of National Insurance if he will take the necessary steps to amend regulations made under the National Insurance Act, 1946, whereby the amount of dependants' war pension is taken into account, and deducted from the contributory pension payable to recipients of dependants' war pensions, as this regulation defeats the principle of contributory pension right under the National Insurance Act.
    Mr. J. Griffiths: The increased rates of pension introduced last October are payable under the existing Contributory Pensions Acts which, since their inception, have included specific provisions to limit the duplication of dependants' war pension with contributory pensions. Under the National Insurance Act, 1946, which is to come into operation next year, the matter is left to be dealt with in regulations under Section 30. I cannot anticipate the content of the regulations, which have to be submitted to the National Insurance Advisory Committee and subsequently to this House.

    Re-Marriage (Family Allowances)
    Sir Robert Youngasked the Minister of National Insurance whether a widower with one child, for whom no allowance is made, and a widow with two children entitled to the allowance for one child,
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    will, on marrying again, be entitled to payments for two children; and if he is aware that his Department has not yet reached a decision regarding a man and woman so placed by marriage last November.
    Mr. J. Griffiths: Yes, Sir. If all three children are below the prescribed age limits, family allowances in respect of the two younger children will be payable. I have made inquiries into the individual case to which my hon. Friend refers and find that payment of allowances at the rate of 10s. a week have now been authorised.
    Sir R. Young: Why should it take five months to deal with a simple issue like this? Is my right hon. Friend aware that I hold in my hand five acknowledgements involving time, labour and expense, and covering a period of almost five months, each giving the same answer, which obviously could not have been true if the matter was being attended to and investigated?
    Mr. Griffiths: Every communication to my Department is acknowledged by postcard. I think that is desirable. I would not accept the view that all these cases of changed family circumstances are simple, but I agree that a case of this kind ought to have been dealt with much sooner. I am taking steps to alter the methods by which we handle these changes in family circumstances which are not always as simple as they seem.

    Dental Benefit
    Mr. Symondsasked the Minister of National Insurance if he will take the necessary steps to enable approved societies to refund to their members some portion of the cost any of the latter may have had to incur in payment for dental treatment as private patients during the recent period in which dentists refused to accept dental letters.
    Mr. J. Griffiths: As I explained in reply to a Question on this subject by the hon. Member for West Harrow (Mr. Bower) on 11th March, I have considered the suggestion that I should amend the regulations to enable such payments to be made but felt bound to reject it. In any case such an amendment of the regulations could not have retrospective effect.

  EMPLOYMENT

    European Volunteer Workers
    Mr. Vaneasked the Minister of Labour what action he is taking to ensure that displaced persons now arriving in this country with experience in agriculture, horticulture and forestry, are being encouraged to take up such employment.
    The Parliamentary Secretary to the Ministry of Labour (Mr. Ness Edwards): European volunteer workers possessing such experience are quickly placed in agricultural employment, subject, of course, to no British or Polish worker being available, and we are particularly anxious to obtain from farmers applications to employ a man and his wife where suitable accommodation is available.
    Mr. Vane: Is the Parliamentary Secretary aware that a number of these Baltic displaced persons with special university degrees in agriculture and forestry are now employed in humble positions in the textile industry, and that one Balt who has a forestry degree is washing dishes near Cambridge? Will he look into this matter again?
    Mr. Ness Edwards: Certainly I will have the details about any such Balt looked at. Our intention is to try to put them into the job where they can make the best contribution.
    Is not the experience of each displaced person known and compiled before they are brought here?
    Mr. Ness Edwards: Each person is interviewed and states his qualifications, and as far as possible he is fitted into the job in our economy in which he can make the biggest contribution.
    Major Guy Lloyd: Would the hon. Gentleman agree that individuals supplied to positions of this kind are very fortunately placed compared with those applying for employment in the mines, in so far as they have not to he screened by the miners' union?
    Mr. Ness Edwards: They are not now being screened by any union.
    Major Tufton Beamishasked the Minister of Labour why the recruitment of displaced persons as European volunteer workers has not been extended to Italy; and if he will now so extend it.
    Mr. Ness Edwards: The outstanding labour demands in this country which the scheme for the recruitment of European volunteer workers is designed to help to meet are to a very considerable extent for women workers. It is understood that the displaced persons in Italy are mainly men, and that the field for the recruitment of women workers is extremely small. It was, therefore, at this stage considered desirable to concentrate on the recruitment of European volunteer workers in Germany and Austria as the most fruitful field. A high proportion of the men recruited in these countries are in fact relatives of women workers who are coming here at the same time. I shall, however, be glad to consider later the question of recruitment from Italy in relation to the progress of recruitment from Germany and Austria.
    Major Beamish: Can the right hon. Gentleman say whether or not there is any machinery in Italy for recruiting these people?
    Mr. Ness Edwards: No, Sir. We have no machinery yet, but we have had a survey made by the International Relief Organisation, and we have all the facts at our disposal.

    Poles
    Mr. Boyd-Carpenterasked the Minister of Labour how many members of the Polish Resettlement Corps there were in the United Kingdom who, on the latest convenient date, had not yet been placed in civilian employment; and what percentage this represents of the total strength of the corps in the United Kingdom.
    Mr. Ness Edwards: Approximately 70,000 at i9th July, which is about 70 per cent. of the total. Thirty-six thousand of these are employed in Polish administration or on Service Department tasks. The number placed in civilian employment up to 19th July was about 29,000.

    West Cumberland (Labour Requirements)
    Mr. Granville Sharpasked the Minister of Labour to what extent the labour requirements of the proposed atomic-energy generating station at Drigg,

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    Cumberland, conflict with those for the proposed acetate yarn plant at Sellafield; and what are the relevant labour statistics
    Mr. Isaacs: Very careful consideration is being given to this question, and I am not in a position at present to make any statement.
    Mr. Peart: Is my right hon. Friend aware that in West Cumberland we still have some unemployment, and of those who are employed many of them are on temporary work and therefore there should be no labour conflict in relation to the new factories? Is he further aware that we should like to attract back to West Cumberland the thousands of people who left the area during the interwar years?
    Mr. Isaacs: Yes, Sir. I am aware of those facts.

    Dismissed Postmen (Glasgow)
    Mr. J. S. C. Reidasked the Minister of Labour how many ex-postmen, including temporary postmen, have applied for work through his Department in Glasgow this year; how many of these men are now unemployed; and how many of these unemployed men are over 50 years of age.
    Mr. Carmichaelasked the Minister of Labour the number of persons, formerly temporary postmen, who have registered at the Glasgow employment exchanges to the latest available date; and how many have been directed to other industries.
    Mr. Isaacs: Between 1st January and 18th July, mainly since the end of May this year, 76 men who had been employed as temporary postmen registered for employment at exchanges in Glasgow. Sixty-four, including 44 over age 50, were still unemployed at the end of last week. Of the 12 who obtained employment, seven were placed by my Department and five found work by their own efforts.
    Mr. Reid: As the right hon. Gentleman cannot find work for these men through his Department, will he advise the Postmaster-General to take them back into the Post Office so that they can do some useful work?
    Mr. Isaacs: I could not give a promise to take that advice because I am under the impression that the Postmaster-General has considered the situation very
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    carefully and he is taking back the men who left to go to the Forces and who have a prior claim.
    Mr. Carmichael: As some of these dismissals were made in association with his Department, because of the Government's decision to reduce the numbers in the various Departments will the right hon. Gentleman consider the advisability of having closer contact with the Postmaster-General before dismissals take place, particularly in an area where unemployment is already much higher than it is in many other parts of the country?
    Mr. Isaacs: Of course, the Postmaster-General must be responsible for deciding the size of his staff, and which of those staff, in accordance with established customs and the agreement with the Whitley Council, are to be dismissed. It would not be for me to intervene.
    Mr. Reid: Was there any consultation between the Postmaster-General and the right hon. Gentleman before these men were dismissed, and did the right hon. Gentleman give to the Postmaster-General any forecast of the probabilities of finding employment in Glasgow for the men?
    Mr. Isaacs: So far as my recollection goes at the moment, there was no such consultation. Quite definitely, I cannot see that there should be.
    Colonel J. R. H. Hutchison: Is it not a tact that, since the dismissal of these men, female labour has been taken on to replace them; was not the purpose of getting rid of these men to make the labour available elsewhere to meet shortages; and do not these figures show that, in fact, this has not come about because the men have not been absorbed into other employment?
    Mr. Isaacs: The hon. and gallant Gentleman is basing assumptions on a position which I do not think exists. I have no information whether or not females were employed in their place. I think the hon. and gallant Gentleman would get that information from the Postmaster-General.
    Mr. Assheton: Has not the Postmaster-General made it quite clear in this House that he has had to restrict his staff and cut down the services in consequence, and would it not be better if there was some co-ordination?
    Mr. Isaacs: I assume that the Postmaster-General, in company with many other Ministers, has examined his staff in the light of the continual agitation that the staffs are too large. If a Minister finds that his staff is larger than he thinks is necessary, he ought not to be blamed if he cuts it down.
    Mr. Stephen: Is not the right hon. Gentleman aware that the action was taken by the Postmaster-General so that these men could be put into work in connection with production and, since that cannot be done, will he consult again with the Postmaster-General?
    Mr. Isaacs: Again, I must say that I cannot answer for the Postmaster-General, but I can say that, so far as I am aware at the Ministry of Labour, the Government have never given any indication that men should be discharged from one job in the hope that, being unemployed, they will be forced into another. That is totally contrary to the policy of the Government.

    Typewriter Mechanics' Training Courses
    Mr. Ronald Chamberlainasked the Minister of Labour what is the present situation regarding typewriter mechanic vocational training courses, including the size of the waiting list and the number and duration of these courses.
    Mr. Isaacs: There are at present 16 classes for training typewriter mechanics under the Government's vocational training scheme. The course lasts for 52 weeks, 215 men have been trained, 197 are in training, and 524 have been accepted and are awaiting allocation.
    Mr. Chamberlain: Is my right hon. Friend aware that one of my constituents has already been waiting for II months to go on this course and does he really think it is necessary to spend 52 weeks to train a man to deal with a typewriter? Is not that more like the time that should be allowed for learning something about an aero-engine?
    Mr. Isaacs: If the hon. Gentleman would care to go to one of these training establishments and see what these men are taught to do—completely to rebuild a typewriter, make its parts and do all the necessary work—I think he would agree that they are doing a remarkable job in 52 weeks. He may have
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    had a constituent waiting for 11 months. It is clear that the person cannot go until there is a vacancy. I would like to make it clear that the industry considers it cannot absorb the numbers awaiting training. Quite a number of these men may have to seek other opportunities. In the 524 we have under training, 291 are disabled and we shall see that they get absolute priority.

    Foreign Domestic Workers
    Commander Maitlandasked the Minister of Labour whether a decision has yet been made to allow foreigners admitted to this country to be employed in a domestic capacity for hotels, guest houses and similar establishments; when this question was first raised; and why there has been such a long delay in reaching a decision.
    Mr. Ness Edwards: No, Sir. This Question, the importance of which I fully appreciate, is under constant review, but, for the reasons given in reply to the hon. Member for West Aberdeen (Mr. Thornton-Kemsley) on 26th June, it is impossible for me to state at present when a decision can be reached to extend the field within which foreigners may be employed on domestic work.
    Commander Maitland: Has not this question been under discussion for a very considerable time, and if it is answered in the affirmative and foreigners are allowed into this country, will he not make it possible to employ these people in hotels, which is, I know, their own wish?
    Mr. Ness Edwards: We are recruiting these people for hospitals, farms, hardship households and the textile industry, which must have first claim, and we are trying to meet all demands as quickly as we can.
    Mrs. Leah Manning: Does my hon. Friend think that he will be in a position to make a decision before the holiday period, because it is during the holidays that this help is so badly needed, as the staffs in hotels and guest houses are terribly overworked at that time?
    Mr. Ness Edwards: I must impress upon the House that the textile industry has to come first. I indicated last week that we thought we had located 7,000

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    single women in the French zone, and we are taking immediate steps to recruit them, but we must meet first the needs of the textile industry.
    Mr. Vane: Would it out be a good thing to allow in a few more displaced persons for this work and so release university professors who are now washing dishes?
    Mr. Quintin Hogg: What makes the right hon. Gentleman think that, if he stops these people going into hotels, he will get any more for the textile industry?
    Mr. Ness Edwards: There is no one stopping people going into hotels. This is a question of a Government recruiting scheme.

    FREEDOM OF ASSOCIATION (I.L.O. RESOLUTION)
    Mr. Boyd-Carpenterasked the Minister of Labour whether he gave instructions to the British Government delegate at the I.L.O. Conference to vote against the resolution condemning the "closed shop," and whether, in view of the desirability of international co-operation in the suppression of such practices, he will give further instructions to the British delegate before the matter again comes before the conference.
    The Minister of Labour (Mr. Isaacs): There was no resolution condemning the "closed shop" before the recent International Labour Conference. I presume that the hon. Member is referring to the discussion on that paragraph of the resolution on freedom of association and industrial relations which relates to the validity of freely concluded collective agreements under which membership of a particular trade union is a condition of employment or continued employment. That paragraph forms part of an article of the resolution dealing in considerable detail with the right to organise and this article should be read as a whole. Read in this way, although its details did not entirely meet the views of all sections in the conference, the article commanded general agreement and was included in the resolution which was unanimously accepted by the conference in plenary session on 11th July and which, under my authority, the United Kingdom delegates supported. It is intended to embody the appropriate provisions of the resolution in one or more In-
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    ternational Labour Conventions which will be the subject of discussion at the conferences in 1948 and 1949. The exact terms in which the provisions relating to the right to organise shall be incorporated in any convention will requite the most careful examination.
    Mr. Boyd-Carpenter: While thanking the right hon. Gentleman for that very full reply, may I ask whether it is not a fact that the British Government delegate voted against an amendment proposed by the Turkish delegate which would have put on record an emphatic condemnation of "closed shop" practices, and was that action taken on the right hon. Gentleman's advice?
    Mr. Isaacs: The hon. Gentleman has not put that point to me in his Question. I have only a hazy recollection about it. There was some such action. If he will put down a Question about it, or even without putting it down, I will let him have the answer.
    Mr. Assheton: Could the Minister tell us which way the employers' delegate voted and which way the workers' delegate voted?
    Mr. Isaacs: So far as my recollection goes in this matter—I was not there when the actual vote was taken, but only during the opening discussion—I think it was by common agreement that no actual decision was taken. It was built into the wider resolution relating to freedom of association.
    Mr. McAdam: Will the Minister consider asking the legal profession for definition of the "closed shop"?

    INSURED POPULATION (STATISTICS)
    Mr. Sparksasked the Minister of Labour to what extent the insured population in each Development Area has increased since June, 1945; and by what percentage this increase compares with London and the Greater London area.
    Mr. Isaacs: The total insured population is ascertained only once a year in July, but the figures for July, 1947, are not yet available. From July, 1945, to July, 1946, the increases in the Development Areas were 10 per cent. in the North-

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    Eastern area, 6 per cent. in South Wales and Monmouthshire, 10 per cent. in West Cumberland, 13 per cent. in South Lancashire, 2 per cent, in Wrexham, and 9 per cent. in the Scottish area. The corresponding increases in the County of London and Greater London were 18 per cent. and 16 per cent. respectively.
    Mr. Sparks: Does the Minister agree that more men and more industries are coming to London and the Greater London area than are going to Development Areas?
    Mr. Isaacs: An observation of that kind could not be answered in relation to this Question.

    CALL-UP POSTPONEMENTS (APPEALS)
    Commander Maitlandasked the Minister of Labour how many appeals were made by his Department during the period April, May and June, 1947, against the decisions of Military Service Hardship Committees to postpone call-up; and in how many cases have these appeals been successful.
    Mr. Isaacs: One hundred and thirty-three appeals against the grant of postponement were made to the umpire in April, May and June, 1947, but without an unjustifiable expenditure of time examining all the personal files it is not possible to state how many of these appeals have been successful.
    Commander Maitland: Will the Minister confirm that when the Military Service Hardship Committees have agreed on a case, on some occasions his Ministry have turned down that appeal?
    Mr. Isaacs: I would not like to give an answer on that without having a chance to consider the matter.
    Commander Maitland: If I submit the matter in detail, will the Minister think about it further?
    Mr. Isaacs: Certainly.

  SCOTLAND

    Rating System
    Colonel J. R. H. Hutchisonasked the Secretary of State for Scotland whether he is considering the present Scottish
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    rating system, with a view of introducing legislation to amend it.
    The Secretary of State for Scotland (Mr. Westwood): I regret that in present circumstances I can hold out no prospect of legislation on the Scottish rating system.
    Colonel Hutchison: Is it not a fact that the English question, together with the system of block grants, is coming up for review quite soon, and is not that a suitable opportunity for considering the Scottish question, which, under the present system, and with the Rent Restriction Act, is making it impossible to keep many houses in Scotland in a proper state of repair?
    Mr. Westwood: All I can say is that, when the block grants are being considered for England, the block grants will be considered for Scotland.
    Major Lloyd: Is the right hon. Gentleman aware that no one will be more disappointed with his reply than his predecessor in office, whose views are fundamentally different from the policy of the present Government, and is the reason for the decision lack of courage or the fact that legislation for England is being pressed to the detriment of Scotland?
    Mr. Westwood: I do not know what the hon. and gallant Gentleman means by his reference to my predecessor. My immediate predecessor is now a member of another place.
    Mr. McKinlay: Will my right hon. Friend undertake to revise the answer he has given, because it is the same answer that has been given for the last 22 years?

    Water Rating (Committee's Report)
    Mr. J. J. Robertsonasked the Secretary of State for Scotland whether it is intended to embody in future legislation the main recommendations of the Walker Committee's Report n Water Rating in Scotland; and if he will give an indication when such legislation may be introduced.
    Mr. Westwood: I am general agreement with the main recommendations in the Committee's Report, but I am not yet in a position to say when legislation can he introduced.
    Mr. Robertson: While expressing appreciation of the assurance which my

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    right hon. Friend has given, may I ask him if he is aware that, while awaiting legislation, many or the local authorities in Scotland may still find themselves in financial difficulties if they proceed with the new water schemes which are so badly needed?

    Legal Aid and Advice (Committee's Report)
    Mr. Rankinasked the Secretary of State for Scotland if he has considered the recommendations of the Committee on Legal Aid and Legal Advice in Scotland; and if he proposes to take any action thereon.
    Mr. Westwood: I am considering, in consultation with my right hon Friend the Lord Advocate, the recommendations made in the Report of the Cameron Committee, and discussions are now proceeding with representatives of the legal profession with a view to preparing a scheme of legal aid and legal advice in the light of the Committee's recommendations.
    Mr. Rankin: In preparing this scheme, will my right hon. Friend keep before him the proposals of the Muir Society on this important question?
    Mr. J. S. C. Reid: May I ask whether this scheme will be ready for legislation next year, because it would be rather nice to have some useful legislation next year?
    Mr. Westwood: All I can say is that all the legislation submitted to this House by this Government is useful legislation.
    Mr. Rankin: Will not my right hon. Friend indicate whether or not he will keep the proposals of the Muir Society before him in dealing with the Cameron Report?
    Mr. Westwood: I assure my hon. Friend that we will give full consideration to all proposals when dealing with this matter.

  MINISTRY OF PENSIONS

    National Service (Pension Claims)
    Lieut.-Commander Clark Hutchisonasked the Minister of Pensions if he is yet in a position to state whether men called up under the National Service Act who sustain injuries whilst undergoing
    1030
    whole-time or part-time service will be eligible for a disability pension under the existing war pensions instruments; and if there will be any right of appeal to an independent tribunal in the case of disputed claims.
    The Minister of Pensions (Mr. John Hynd): I regret that it is not yet possible to make any announcement on the matters referred to by the hon. and gallant Member.
    Lieut.-Commander Clark Hutchison: As the National Service Act is now law, is it not high time that a decision was taken?
    Mr. Hynd: Of course, the National Service Act does not, in fact, come into operation until 1949, and the Service Departments have a large number of preoccupations with which to concern themselves. It is not to be expected that this matter should be given first priority in present circumstances.
    Lieut.-Commander Clark Hutchison: If I put down a Question immediately after the Summer Recess, will the Minister give me a reply?
    Mr. Hynd: I shall be very glad to give an answer immediately the question has been decided.

    Disabled Men (Basic Pension)
    Mr. Lipsonasked the Minister of Pensions on what date he last consulted his Central Advisory Committee about the desirability of an increase in the present basic pension of 45s. a week to disabled men; and with what result.
    Mr. J. Hynd: The increase of the basic pension and the other improvements in the Royal Warrant made within the last 18 months have met with general satisfaction, and, in the view of His Majesty's Government, no circumstances have arisen in the interim to make a further revision necessary.
    Mr. Lipson: Does that answer mean that the attention of the Advisory Committee has not, within the last 18 months, been called to whether or not it is necessary to make any increase, and in particular has the Minister asked them whether they consider that, if 40s. was considered the right amount in 1918, 45s. is sufficient today, taking account of the

    1031
    increased cost of living? Will he put that question to them?
    Mr. Hynd: In answer to the first part of the question, the increases were made in the last 18 months, and it was not considered necessary to consult the Advisory Committee, immediately after the increases were made, as to whether further increases were necessary. No further discussions have taken place with the Committee in regard to the cost of living, and I question whether it would be desirable, in the interests of the pensioners themselves, that their pension rates should be strictly allied to the variations in the cost of living in either direction.
    Mr. Lipson: Will the Minister put that point to the Committee?
    Mr. Hynd: As I have said, the Government do not consider that any circumstances have arisen in the last 18 months to justify revision at this stage. With regard to the cost of living, the increase that was made 18 months ago was not in connection with the cost of living, or following upon discussions with or representations from the Advisory Committee, but was done on the initiative of the Government, irrespective of the cost of living.
    Mr. De la Bère: Is there any evidence to show that the Government are right?
    Mr. Lipson: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise this matter on the Motion for the Adjournment at the earliest opportunity.

    PRISONERS OF WAR (PRISON SENTENCES)
    Mr. Skeffington-Lodgeasked the Secretary of State for War whether he is now in a position to make a statement about the sentence of 12 months' imprisonment recently passed on Werner Vetter for associating with an English girl.
    The Secretary of State for War (Mr. Bellenger): I have given instructions that this and all similar cases should be reviewed together. When this review has been completed, the decisions reached on the merits of each will be promulgated simultaneously.

  BRITISH ARMY

    War Graves (Relatives Visit)
    Mr. Lipsonasked the Secretary of State for War if he is aware that the near relatives of men killed in the war feel hurt that they are not allowed to visit the graves in Germany two years after the end of hostilities though others have been allowed to go there for one reason or another; and if he will now say that all obstacles to these visits will be removed forthwith.
    Mr. Bellenger: This question has recently been reviewed, but owing largely to shortage of accommodation and travel facilities it is not at present possible to make general arrangements for visits to war cemeteries in the British zone of Germany. In these circumstances, it was felt that it would be unfair to offer facilities for any such visits until an equal opportunity can be given to all who wish to visit war graves.
    Mr. Lipson: Does not my right hon. Friend realise that his answer will cause great dissatisfaction to parents who are aware that other people have been allowed to go there and who fail to understand why, after two years, they should not be allowed to visit the graves, and cannot he reconsider this matter and grant facilities to those who want to go to Germany for this purpose?
    Mr. Bellenger: If my hon. Friend will read in HANSARD my answer to Question No. 33, he will see what I am attempting to do in the way of arranging for these relatives to visit war cemeteries.
    Mr. Frank McLeavy: Will my right hon. Friend inform the House when he will be in a position to indicate when these facilities will be available?
    Mr. Bellenger: In the answer to Question No. 33, I have indicated that I am now in consultation with voluntary societies to effect that purpose.
    Commander Maitland: Does not the right hon. Gentleman believe that many bereaved people in this country, even though they themselves cannot visit their relatives' graves, would be proud if other people who could do so were allowed to go now?
    Mr. Bellenger: The situation with regard to Germany is very difficult, and I can hold out no hope of visits to Germany this year.
    Commander Maitland: Why not to other countries?
    Mr. Skeffington-Lodge: Will my right hon. Friend bear in mind that Americans are allowing ordinary tourists to visit their zone?
    Mr. Bellenger: I am only asked about the British zone, and I can assure my hon. Friend that there are very great difficulties.
    Mr. Prescott: Even assuming that relatives cannot visit Germany, can the right hon. Gentleman say why they should not be permitted to visit other cemeteries?
    Mr. Bellenger: Some are doing so.

    Military Training Area, Dartmoor (Inquiry)
    Mr. Medlandasked the Secretary of State for War if he is aware that, in accordance with the promise of the Prime Minister, a public inquiry into the use of Dartmoor for military training purposes was held at Exeter; and why, prior to this inquiry, and without notice to commoners and cattle owners, he is already using Peter Tavey Great Common without regard to the danger to pedestrians and cattle, or any clearance of the ranges except by the firing of blanks prior to using live shell.
    Mr. Bellenger: As was explained by my right hon. Friend the Prime Minister on 25th February, where a proposal to retain permanently land already occupied by one of the Services is to be the subject of a public inquiry, the land will continue to be occupied until the inquiry is held and a decision taken. Peter Tavy Great Common is part of an area which has been requisitioned under Defence Regulation 51 since 1942, and is still so held. The inquiry referred to has recently been held, and the land will continue to be used until a decision has been made. No firing of live ammunition has recently taken place in the area, but during an infantry exercise carried out periodically, smoke bombs are used.
    Mr. Studholme: As the common in question is in my constituency, may I ask the right hon. Gentleman if he is aware of the growing resentment in the Tavistock Division at the increasing disregard, since the war, by Government Departments of the rights of commoners and private individuals; and will he bear
    1034
    in mind that many of us are determined to defend these ancient rights of Englishmen?
    Mr. Bellenger: It I may say so, I welcome that belligerent attitude in a good cause, but I can deal only with one Department. So far as the Army is concerned, I will endeavour to see that the commoners' rights are not unnecessarily interfered with.
    Mr. Lambert: Is the right hon. Gentleman aware that the representatives of many of the commoners are dissatisfied with the inquiry because of their being denied the opportunity of stating their case fully, and will he ensure that an opportunity is given to them for doing so?
    Mr. Bellenger: My Department did not conduct the inquiry.
    Mr. Charles Williams: Is the right hon. Gentleman or the Government aware that the inquiry was very unsatisfactory, and caused a lot of local dissatisfaction?
    Mr. Bellenger: Perhaps it would be as well to wait and see what is the outcome of the inquiry.

    Requisitioned Land, Fylingdale Moor
    Mr. Spearmanasked the Secretary of State for War if he will give an immediate decision with regard to the question of the derequisitioning of Fylingdale Moor, in view of the fact that his predecessor, in a reply on 7th May, 1946, expected to give a decision in the course of that summer.
    Mr. Bellenger: It is not possible to give an immediate decision as to the derequisitioning of Fylingdale Moor, since the area is proposed for permanent retention as a military training area, although this proposal is under consideration by the Inter-Departmental Committee on Service Land Requirements, and a local public inquiry will no doubt be held before a decision as to permanent retention is made. I regret that investigations into the question of training areas have taken considerably longer than my predecessor foresaw.
    Mr. Spearman: Is the right hon. Gentleman aware of the dismay in the locality at the Government's inability to come to a decision in this matter, and can he give

    1035
    some assurance that in no case does he propose to fire across the Scarborough-Whitby High Road, or across that part of the moor which carries the electricity to Whitby?
    Mr. Bellenger: I think that, in answer to the first part of the Question, it only goes to show what careful examination is being given to conflicting interests. With regard to the second part, I could not answer that without notice.
    Viscount Hinchingbrooke: Does not the right hon. Gentleman realise that the retention of this area and other areas, in spite of all the pledges which have been given, is not unconnected with the lack of enthusiasm for recruitment to the Army, and will he therefore hasten on the local public inquiries, as, otherwise, the Army will grow more and more unpopular?
    Mr. Nutting: Is it not rather unreasonable to expect the Government, if they cannot carry out their promises, to carry out those of their predecessors?

    Citadel, Plymouth (Visitors)
    Mr. Medlandasked the Secretary of State for War whether he is aware that the ramparts of the Citadel of Plymouth are inaccessible to visitors; that prior to 1914 these ramparts had been opened to the general public; and if he will now revert to the practice obtaining before 1914.
    Mr. Bellenger: The Citadel is in full use as a military barracks. To admit the public would seriously interfere with the training of an important section of the Army. I regret, therefore, that I cannot accept my hon. Friend's suggestion.
    Mr. Medland: Is my right hon. Friend aware that his Department are taking more and more land, and are depriving the citizens of Plymouth of the privileges which they have held for hundreds of years?
    Mr. Bellenger: Apparently, according to my hon. Friend's Question, they have been denied this access since 1914.
    Mr. Medland: But I have not been here since 1914
    Mr. Bellenger: At any rate, this is War Department property.

    Minefield, Flimby
    Mr. Peartasked the Secretary of State for War what steps have been taken to restore to its original condition the foreshore at Flimby, Cumberland, which was used as a minefield during the war.
    Mr. Bellenger: The minefield was cleared of mines by September, 1945, and the ground under the perimeter fence was swept, and the fence removed a few months later.

    Requisitioned Site, Eastleigh
    Mr. George Jegerasked the Secretary of State for War whether he will now derequisition the derelict site at Chickenhall Lane, Eastleigh, Hampshire, so that the Southern Railway Institute and Club may resume its sports activities.
    Mr. Bellenger: The accommodation is now under the control of the Ministry of Health for temporary civilian housing purposes. The Southern Railway Sports Club has been given the use of the football ground for recreational purposes.

    COLONIAL DEVELOPMENT (ECONOMIC PLANNING BOARD)
    Mr. Blackburnasked the Lord President of the Council whether he will request the Economic Planning Board to give early consideration to the need for the rapid rehabilitation of those Colonial enterprises, such as tin production, which are potential large earners of dollars, but which are still unable to obtain the necessary machinery to achieve their prewar production.
    The Lord President of the Council (Mr. Herbert Morrison): As I announced in this House on 7th July, the primary function of the Economic Planning Board will be to advise His Majesty's Government on the best use of our economic resources, both for the realisation of a long-term plan and for remedial measures against our immediate difficulties. Problems of Colonial development and rehabilitation as such are not a matter for the Planning Board. Certain types of plant and equipment in short supply may, however, be required both for such development and for production at home, and naturally this is one of the problems to which the Planning Board would direct its attention.

  NATIONAL FINANCE

    Pensions Increases (Delays)
    Mr. W. J. Brownasked the Chancellor of the Exchequer whether he is aware that many pensioners due to receive increases under the Pensions (Increase) Act of last year, have not yet received them; and when payments will be completed.
    The Chancellor of the Exchequer (Mr. Dalton): This work inevitably takes time, but I hope it will be finished by the end of this year.

    Shipbuilding and Repairs (Foreign Yards)
    Mr. J. J. Robertsonasked the Chancellor of the Exchequer the total amount of foreign exchange expended in the building and repair of British-owned merchant vessels in foreign shipyards since the end of the war in Europe.
    Mr. Dalton: About £4 million.
    Mr. Robertson: Is my right hon. Friend satisfied that this amount of expenditure might not have been saved by the work being carried out in this country instead of abroad?
    Mr. Dalton: I am advised that the general policy has always been to have repairs done abroad only when it is necessary to enable ships to return home, or if a British shipyard has not the available capacity. We would naturally always give a preference to our own shipyards.
    Major Bruce: Will my right hon. Friend give the House an assurance that he is in consultation with his noble Friend the First Lord of the Admiralty to ensure making use of our Royal Dockyards in this way?
    Mr. Dalton: Of course, I do speak with my noble Friend from time to time on this matter, and I am in favour of minimising foreign exchange expenditure and maximising the work in our dockyards, and using the civil and Royal Dockyards at home. It is simply a question of whether the capacity is always available.
    Captain Marsden: Is it not obvious that repairs have to take place in foreign shipyards. The Question also includes building—can the right hon. Gentleman
    1038
    say whether there is any building abroad on our account?
    Mr. Keenan: Is my right hon. Friend aware of the efforts which we have made to prevent ship repairing going abroad, and that when we have approached the Minister of Transport he has said that he has no power to prevent that taking place. Is he aware of the belief that the shipowners find it cheaper to send their vessels abroad for repairs? Can my right hon. Friend prevent currency from being spent in that way?
    Mr. Dalton: All my hon. Friends in all parts of the House are pressing on an open door, as far as I am concerned. I do not want to spend foreign exchange, and I do want the work done at home. If any case can be given showing that work has been done abroad when it could have been done here, I shall be glad to go into it with my noble Friend.

    British Films (Dollar Earnings and Expenditure)
    Mr. Benn Levyasked the Chancellor of the Exchequer what dollar expenditure has been licensed to British film companies for the building, purchase of, or investment in, theatres abroad; what has been the return to date; and what is the estimated return in the future.
    Mr. Dalton: I would refer my hon. Friend to the answer of my right hon. Friend the Financial Secretary to the Treasury to my hon. Friend the Member for West Middlesbrough (Mr. Cooper) on 29th April.
    Mr. Levy: I have not the relevant copy Of HANSARD with me, but am I correct in believing that that answer does not impart any information, and, if that is the case, does my right hon. Friend agree that it is important that the House should be able to decide whether this is a good investment or not? It cannot do so without having the relevant figures.
    Mr. Dalton: My hon. Friend has a remarkably retentive memory. It is the case that in the answer to which I referred, it was explained that this is not the kind of question which should reasonably be answered in a public statement, because it relates to a single person and a single firm, and it is contrary to our practice to make such details public in Parliamentary discussion.
    Earl Winterton: Will the right hon. Gentleman also make it clear that, in spite of the attitude of his followers, people are still allowed to invest in foreign countries for the benefit of this country?
    Mr. Levy: Will my right hon. Friend bear in mind that in defending the rights of the individual to make private investments abroad, this is a case where the individual is a virtual monopolist and, therefore, has some public responsibility and obligations?
    Sir Frank Sanderson: Is it not a fact that the net result of these developments is to attract a large amount of dollars to this country?
    Mr. Dalton: This is a matter of Debate, and there are further Questions on the Order Paper. All I have said in reply to this Question is that it is contrary to practice, and I think quite rightly so, to reveal by way of Parliamentary answers the financial arrangements of particular individuals, whether they are monopolists or small men. There are other ways of raising the public aspect of the matter, and I do not think it is right to give this kind of information here.
    Mr. Levyasked the Chancellor of the Exchequer what is the dollar allowance granted to British film companies for general purposes during the last two years; and what has been the balance of dollar expenditure involved in the exchange of film stars, directors and technicians between this country and the U.S.A.
    Mr. Dalton: None, Sir, outside the usual business travel allowance. In answer to the second part of the Question, I would refer my hon. Friend to my reply to my hon. Friend the Member for West Wolverhampton (Mr. H. D. Hughes) last Tuesday.
    Mr. Levy: Is it or is it not a fact that while American actors and technicians employed over here are paid in dollars, English actors and technicians working in America are not infrequently, and for the most part, paid in sterling?
    Mr. Dalton: I gave the figures in reply to a Question last week.
    Mr. Levyasked the Chancellor of the Exchequer whether, during the last two years, British films have earned more in dollars for this country than they have cost us in dollars; what is the net figure
    1040
    for the difference; and what is the annual aggregate net figure for this and all other items of dollar expenditure incurred by the film industry over and above the £17 million to £18 million which is the admitted dollar loss on imported films.
    Mr. Dalton: I have nothing to add to my replies given to the hon. and gallant Member for "Central Glasgow (Colonel Hutchison) on 15th April and to the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) on 24th June.
    Mr. Levy: Can my right hon. Friend say whether the answers to which he has referred gave the information for which I am asking, and if not, would he give the information or, at least, give reasons for withholding information which is of the greatest public importance at a time when we are scraping the barrel for dollars even to the extent of saving a million or two on newsprint?
    Mr. Dalton: If my hon. Friend would be so kind as to check up on the answers, he will see that although, when the answer to the first of the Questions to which I have referred was given we had not got the statistics which I considered reliable, and, therefore, I could not give them to the House, in reply to the right hon. Member for Bromley I did give such figures as were available to us; but, owing to the nature of the case, a lot of these figures cannot be given with exactitude. There are masses of small payments out, and it is impossible to keep track of the whole thing without a fantastic increase in staff.
    Earl Winterton: Will the right hon. Gentleman give particulars of the many American plays brought here by persons interested in the theatre, the loss which they have incurred and the spurious nature of most of the entertainment?

    Sterling Convertibility (Correspondence)
    Captain John Crowderasked the Chancellor of the Exchequer whether, in view of the official announcement in Washington on 15th July that the U.S. Government has agreed to suspend until 15th September in respect of 14 countries the free convertibility of sterling earned in current transactions, he will publish his correspondence with the U.S. Secretary to the Treasury on this subject; and if he will make a full statement on the matter.
    Mr. Dalton: I am circulating in the OFFICIAL REPORT this exchange of letters to which I have nothing to add.
    Mr. Hollis: Can the right hon. Gentleman give an assurance that such corrrespondence will be published in this country before it is published in another country?
    Mr. Dalton: It would be rash to give any assurance that anything whatever could be published in London before it is published in Washington, if it is known in both places.
    Following are the texts of letters exchanged between the Secretary of the United States Treasury and the Chancellor of the Exchequer:—
    14th July, 1947
    My DEAR CHANCELLOR,
    As a result of recent consultations between representatives of your Government and representatives of the United States Government and in accordance with the request of your Government, the United States Government has agreed to the postponement until 15th September, 1947, if necessary, of the obligations of your Government under the Anglo-American Financial Agreement in the case of Austria, Bulgaria, China, Denmark, France, Greece, Hungary, Paraguay, Poland. Rumania, Siam, Turkey, the U.S.S.R., and Yugoslavia, with the understanding that upon the date of completion of necessary arrangements with these countries, all sterling accruing to them after 15th July, 1947, will become freely available for current payments in accordance with the Anglo-American Financial Agreement.
    It is my understanding that with the exception of the temporary extensions to which the United States Government has agreed in the case of the countries mentioned in the preceding paragraph, the British Government will carry out fully its obligations under Sections 7, 8 (ii) and 10 of the Anglo-American Financial Agreement. I should appreciate your Government's confirmation of this understanding.
    Sincerely yours,
    (S.) JOHN W. SNYDER.
    Secretary of the Treasury.
    Right Honourable HUGH DALTON,
    Chancellor of the Exchequer,
    Treasury Chambers,
    London, England
    15th July,
    Dear Mr. SECRETARY,
    Thank you for your letter of 14th July. 1947, regarding the execution of the Anglo U.S. Financial Agreement dated 6th December, 1945.
    In reply I confirm your understanding that, with the exception of the temporary extensions to which the United States Government
    1042
    has agreed in the case of the countries mentioned in the first paragraph of your letter, the British Government is fully carrying out its obligations under Sections 7, 8 (ii) and so of the Anglo-American Financial Agreement
    Yours sincerely,
    (S.) HUGH DALTON
    Honourable JOHN W. SNYDER,
    Secretary of the Treasury.
    Washington. D.C.

    Value Payments (Treasury Regulations)
    Captain Crowderasked the Chancellor of the Exchequer when he anticipates the Treasury regulations authorising the settlement of value payments will be issued.
    Mr. Dalton: Before the end of this week.

    COAL BOARD PUBLICATION (PAPER ALLOCATION)
    Mr. Boyd-Carpenterasked the Financial Secretary to the Treasury whether His Majesty's Stationery Office has imposed a reduction in the amount of paper made available for "Coal," a publication of the National Coal Board, proportionate to the cut imposed by His Majesty's Government in the newsprint allocations of daily newspapers.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): No, Sir.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman give the justification for this discrimination between the treatment of publications of Government monopolies and the publications of private enterprise?
    Mr. Glenvil Hall: There has been no discrimination. The newsprint cut to which the hon. Member is referring applies to newspapers, and not to weekly or monthly periodicals.
    Mr. Boyd-Carpenter: Is it not a fact that the paper used for this publication either costs dollars or could realise dollars if sold abroad?
    Viscount Hinchingbrooke: Are we to understand that where Government Departments use newsprint for the purpose of any publication, no cut will be made at all?
    Mr. Glenvil Hall: No, Sir. Nothing that I have said could lead the noble Lord to believe that.

  TRADE AND COMMERCE

    Newsprint Import Restrictions
    Mr. Hollisasked the President of the Board of Trade what undertaking was given by the Government, at the time of the newsprint contract of the Newsprint Supply Company with the North American suppliers, that the necessary dollars and import licences would be available.
    Mr. Belcher: I would refer the hon. Member to the statement made by my right hon. and learned Friend during the Debate on the import restrictions on 17th July.
    Mr. Hollis: Is not the Parliamentary Secretary aware that the statement made by the President of the Board of Trade gave the greatest concern to a most friendly country, and that it would be very much against the public interest if nothing further was said?
    Mr. Belcher: I think the statement made by my right hon. Friend was a perfectly full statement of the facts, that His Majesty's Government did say that the currency would be available and owing to changes which occurred in the circumstances, the currency was not available.
    Mr. Hollis: How can the hon. Gentleman say the currency was not available?

    Imports and Exports (Spain)
    Mr. William Teelingasked the President of the Board of Trade what were the amounts of imports into this country from Spain during 1946 and, as far as possible, during the first half of 1947; what were the types of goods; and what we are exporting to Spain at present
    Mr. Belcher: The value of imports from pain during the year 1946 was £12,725,000, and during the period January to May, 1947, £6,372,000 The principal commodities imported were oranges, iron ore, wine, potassium chloride, cork manufactures and sardines. The principal kinds of goods now being exported from the United Kingdom to
    1044
    Spain are vehicles, chemical products, machinery and electrical goods.
    Mr. Teeling: Does not the Parliamentary Secretary consider that the great importance of these imports, and of our exports to Spain, could possibly be very considerably increased if we spent a little less time on diplomacy by insult to that country, and if more trouble was taken to try to encourage Spanish trading relations?
    Mr. Belcher: I am afraid that the reply must be that I am not responsible for diplomacy, by insult or otherwise, in connection with Spain.
    Sir Patrick Hannon: In view of the volume of trade between the two countries revealed in the answer of the hon. Gentleman, is it not time that a more sensible and constructive view was taken of our relations with Spain than hitherto?
    Mr. Belcher: Perhaps the hon. Gentleman will put that question to the appropriate Minister.
    Mr. Skeffington-Lodge: Is it not time to deny ourselves luxuries to help to remove the tyrannical Government in Spain?

    PALESTINE (ILLEGAL IMMIGRANTS)
    Mr. Sydney Silverman(by Private Notice) asked the Secretary of State for the Colonies the present whereabouts of the 4,500 Jewish immigrants into Palestine who were removed by British Armed Forces from the vessel "Exodus 1947" in Haifa Harbour for transportation to Cyprus, who have not so far reached Cyprus, and concerning whose ultimate destination conflicting rumours are circulating.
    The Secretary of State for the Colonies (Mr. Creech Jones): The passengers to whom my hon. Friend refers, who attempted to land in Palestine illegally, are being returned to France, from which country they originally set sail on nth July. They are at present on board three British transports on route from Haifa to France.
    Mr. Silverman: Has my right hon. Friend's attention been drawn to the statements made this morning that the transport to France is intended to be only to a port

    1045
    of embarkation for transport elsewhere, and that these people are only being transported to France, en route to Colombia, in South America? Can he say whether there is any truth in those statements or not?
    Mr. Creech Jones: The only answer I can give is that the ultimate destination of these transports is France, and what will happen in France is a matter entirely for the French authorities.
    Mr. Oliver Stanley: Is it not a fact that many of these illegal immigrants had visas enabling them to go to Colombia? If they did not wish to go there, what was the object of getting those visas?
    Mr. Creech Jones: I have no official information that the visas were for Colombia, but such statements have appeared in the Press. I should add that when the ship left France it was contrary to the general regulations of the French authorities, who had laid down that she should only proceed in clear weather and without passengers.
    Mr. Gallacher: Is the Secretary of State not aware that we were informed over the radio that the decision had been taken to return them to France in agreement with the French authorities, and that since then we have been informed that the French authorities are not prepared to allow them to land in France? Can he give us any information as to what is going to happen to these unfortunate people?
    Mr. Creech Jones: The position is that the action has been taken in agreement with the French Government, and they will be received in France.
    Mr. Godfrey Nicholson: Is there adequate liaison between the Colonial Office and the Foreign Office? If there is, how came it about that the French Government were not warned of the likelihood of what occurred, because I am quite sure that the French Government did not wish to do anything inimical to this country?
    Mr. Creech Jones: I think I can say that the French Government were fully aware of the possibilities of this situation.
    Mr. S. Silverman: Are we to understand from my right hon. Friend's original answer that in no circumstances
    1046
    will British armed forces be used to compel these people to go to South America or anywhere else if they do not wish to go?
    Mr. Creech Jones: That is not a matter for the British Government. These ships will be sent to France and these passengers will be disembarked.
    Mr. Silverman: May I point out that my right hon. Friend misheard my question? What I asked him was whether we were to understand from the original answer that in no circumstances will British armed forces—for whom the British Government, presumably, remain responsible—be used to compel these people to go to South America or anywhere else against their will?
    Mr. Creech Jones: The situation as described is purely hypothetical, and I can give no undertaking what will happen in hypothetical circumstances. Ali I can say is that these people are being returned to the port at which they embarked.
    Mr. Janner: Is my right hon. Friend aware that these people, men, women and children—many hundreds of children—are victims on whom the most inhuman brutalities have been inflicted? Does he really expect them to wander over sea and land for years without any hope at all?
    Mr. Benn Levy: Since it has been the practice to send illegal immigrants on to Cyprus, what is the reason for varying that practice in this particular case? Has my right hon. Friend considered also the effect in Palestine of that action, of which there are indications already?
    Mr. Creech Jones: All circumstances were taken into most careful consideration. But surely it must be recognised that there are limits in regard to accommodation in Cyprus, and that there are very great difficulties in admitting into Palestine a very considerable number of Jews in one body.
    Mr. S. Silverman: Will my right hon. Friend bear in mind that there are also limits to human endurance? May I press him for a definite answer on the question of whether British armed forces will in any circumstances be employed to transport people against their will on the high

    1047
    seas? Surely, we are entitled to have a definite answer to a question of that kind?
    Mr. Creech Jones: I have answered the question by saying that these transports are bound for France, and that there the passengers will be disembarked.

ELECTRICITY ECONOMY (ADJUSTMENT OF WORKING HOURS)
Mr. Isaacs: I ask the indulgence of the House to make the following statement. The House will wish to be informed of the Government's plans for safeguarding next winter's supplies of power for industry. The demand for electricity has risen by 70 per cent. since 1939 and is still rising. This creates a very serious problem if nothing were done, the peak demands would overtax the capacity of our generating plant, and almost daily cuts in electrical power would cripple industry. The situation requires the adoption of drastic plans for spreading the industrial electricity load and the loyal observance of those plans by industry.
There is no single way of doing this. Various methods will have to be adopted, if the aim is to be achieved. Day-shift hours can be adjusted in different factories so that some factories start after the morning peak and others end before the afternoon peak; some factories can work staggered day shifts, others night shifts: rota schemes can be operated, and so on. There is also the question of the terms and conditions under which revised working hours should operate, and here the recent Engineering Industry Agreement affords a useful lead. I have invited the British Employers' Confederation and the Trades Union Congress to draw the attention of their constituent organisations to it, and I urge all industries to consider at once their own position in this matter. The whole country must understand that this problem of spreading the industrial electricity load is vital and urgent. Unless it is solved, wholesale load shedding will he forced upon us, production will fall and our whole prospect of recovery will be gravely prejudiced. Under-employment and unemployment will result.
The Government have laid upon the Regional Boards for Industry and their district and other committees the com-
1048
plicated but vital task of working out the plans to achieve the regional target of moving one-third of the peak load outside the normal daytime period. These bodies, on which both sides of industry are represented and with which the electricity supply undertakings and the Central Electricity Board are associated, have already achieved substantial results, and I make an urgent appeal to industry to co-operate to the full with them in completing the schemes and reaching the target.
Whilst the Government confidently rely on the wholehearted co-operation of everyone concerned in this matter, they cannot disregard the possibility that there may be cases of unreasonable failure to operate approved schemes. Following the urgent recommendation of the Joint Consultative Committee representing both sides of industry, the,Government have decided that compulsory powers must be used to deal with such cases. Once a case has been established a direction will be issued under the Defence Regulations by my right hon. Friend the Minister of Fuel and Power compelling the firm under penalty to reduce their maximum demand on the electrical supply to the required level. The district or other local committees of the Regional Board will bring such cases to notice, and the Regional Board will be required to satisfy itself that a case has, in fact, been established. Before action is taken, however, each case will be further examined by the Electricity Sub-Committee. My right hon. Friend will thus have the benefit of the advice of both the Regional Board and the Sub-Committee when he issues a direction. This matter will be kept under close review to consider whether any more stringent action is necessary, and a central record of such cases will be maintained for reference to other Government Departments should additional action be deemed necessary.
It is the Government's hope that such powers will be required only very exceptionally. The Government regard them rather as an assurance to the great majority of public-spirited men and women in industry, employers and workers, that their efforts and sacrifices will not be rendered useless by the non-co-operation of any selfish minority.
So far I have spoken only of the contribution of industry to this problem. It

1049
must, however, be realised that the position of the domestic consumer in this matter is also vitally important. Indeed, everyone—whether he uses electricity in a shop, in an office, or in his home—can help industry by avoiding the use of electricity during the peak periods. This is a matter affecting not only workers and management, but every user of electricity. The well-being of the nation is at stake. The Government are confident that all will play their part.
Mr. Eden: While fully accepting the gravity of the situation with which the right hon. Gentleman now seeks to deal, may I ask him what is the Defence Regulation under which the Minister of Fuel and Power proposes to proceed?
Mr. Isaacs: Yes, I can quote the Regulation, and perhaps I can go just a little further than that. It is Defence Regulation 55 (2A). Under that Regulation anybody failing to observe a direction is liable to prosecution, and, in the event of a successful prosecution, the penalties go as high as £500 or one year's imprisonment. That is for a failure to observe the direction. But I do want to make it clear to the House that this is only where there has been an unreasonable failure. It will not be used as a direct penalty. It will have to be proved satisfactorily through all the sifting machinery, and then to the bench of magistrates, in order to establish an unreasonable failure to comply.
Mr. Eden: Would the right hon. Gentleman consider whether it might not be better to proceed under an Order, so that the House can see the Order, and can also see what penalty should attach to the Order. I think that at this stage it is very unusual to proceed under a Defence Regulation which, certainly in the main, dealt with an entirely different situation from that to which it is now being applied.
Mr. Isaacs: We will certainly consider that. There is some little difficulty
1050
because the sort of cases with which we shall be dealing here will be individual cases. If an Order can be made, I will gladly do that, because I am satisfied that the additional publicity given by so doing will be very helpful.
Mr. Sparks: In cases where it is necessary to take action against a firm failing to, comply with an Order, can my right hon. Friend give any assurance that no victimisation of the workers in such an undertaking will result as a consequence? Many such cases arose after the recent fuel crisis.
Mr. Isaacs: If my hon. Friend studies what I have said, he will see that it is not proposed to shut down firms; it is proposed to put a penalty on firms. Whether a firm could carry on if their managing director went to prison is a question for debate. But it must also be stated here that many firms might be anxious to comply with this regulation, but they might have some recalcitrant workers. We hope that can be overcome by the very warm co-operation we are getting from the trade unions in this matter.
Mr. Hobson: Is my right hon. Friend aware that the suggestion he is putting forward will involve the use of non-selected stations on the off-peak load period; and is he satisfied that by this arrangement it will be possible for the power stations to carry out their essential repairs which are usually clone in the off-peak periods?
Mr. Isaacs: I am not briefed upon that particular point, as it is outside my scope;. but I do happen to know that all this is being done in the closest co-operation: with the electrical engineers and the electrical engineering organisations, and so on, who are giving us the best help they can in the matter

ELECTRICITY ECONOMY (ADJUSTMENT OF WORKING HOURS)

  BUSINESS OF THE HOUSE
  Ordered:
  "That this day, notwithstanding anything in Standing Order No. 14, Business other than the Business of Supply may be taken before Ten o'clock and that the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[Mr. Herbert Morrison.]

  ORDERS OF THE DAY

    SUPPLY
    [14TH ALLOTTED DAY]
    Considered in Committee.
    [Mr. HUBERT BEAUMONT in the Chair]

  CIVIL ESTIMATES, 1947–48
    CLASS IV

      PUBLIC EDUCATION, SCOTLAND
      Motion made, and Question proposed:
      "That a sum, not exceeding,£12,042,080, be granted to His Majesty, to complete the sum necessary to defray the charge which will come into course of payment during the year ending on the 31st day of March, 1948, for public education in Scotland, including certain grants in aid of the Education (Scotland) Fund; for the Royal Scottish Museum, Edinburgh, including a grant in aid; and for a grant in aid of the education of Poles."[£8 million has been voted on account.]—[Mr. Westwood.]

  SCOTLAND (EDUCATION)
  3.47 p.m.
  Commander Galbraith: When, during the course of the last Parliament, the House passed that Act which we now know as the Education (Scotland) Act, 1945, it produced a skeleton and nothing more. It left to the Secretary of State for Scotland, as the Minister of Education for Scotland, to the education authorities, and to the teaching profession in Scotland as a whole, the duty of adding flesh and blood to that skeleton, and of feeding and clothing it so that it might grow into a virile and living entity. Therefore, in my opinion, it is the duty of this Committee to inquire from time to time how the Secretary of State and the education authorities are using the powers which the House entrusted to them, and whether the vast sums of money which the Treasury now make available for education are being
  1052
  used to the best possible advantage. It was for these purposes that we on this side of the Committee asked that this very important subject might be debated today.
  The very great change which has come about since the passing of the 1945 Act has been the raising of the school leaving age, and it will be very interesting for the Committee to learn today from the right hon. Gentleman how that situation has been dealt with, what additional number of teachers he has found will be required, how many of those teachers he has been able to secure, and what additional accommodation he has been able to provide to meet the needs of the greatly increased school population. If, by the raising of the school leaving age, larger classes and more cramped accommodation has resulted, that is very much to be deplored, for that can only result in a lowering of the general standard of education rather than raising it, at least in so far as the present school generation is concerned.
  It has always seemed to me, as a result of my own personal experience, that the first essential to education was the foundation which was laid in the elementary stages. If that foundation is to be capable of bearing the weight of the superstructure which is afterwards to be erected on it, then it must be laid with the very greatest possible care. The classes ought to be small, and every child should have at least some opportunity of receiving individual attention from its teacher. That, I know, was not the case before the passing of the 1945 Act. The size of the classes in our primary schools was then about 40. That was the average for the country as a whole, and there were many instances, particularly in the industrial areas, where the average number in the classes was much higher; indeed, I know of one primary school where the class was composed of no fewer than 70 pupils. A situation such as that means that the teacher is faced with an absolutely impossible task, and that all but the brighter pupils move on to their subsequent years having gained little if anything at all. I hope we shall be told today that some progress has been made towards reducing the size of classes in primary schools, and that the position has not been worsened as a result of the raising of the school leaving age. I do not see how, until the size of these primary school classes has been reduced to a

  1053
  reasonable proportion, we can hope to achieve any general raising of the standard of education in our country.
  Cramped accommodation is another detriment to education. In many of our secondary schools, built to accommodate 800 pupils, we now have a population of some 1,300. That, of course, has been accomplished as the result of introducing floating classes, which have no form room of their own, but move about from room to room, and I am told that they even move from one school to another. A class in one school is sent to another school where it receives a particular course of instruction, and then it moves back to its original school. I was further told that one of the schools in Glasgow was threatened with no fewer than 12 of these floating classes; that is to say, some 400 pupils had no place for their books, no desks of their own and no school room of their own. It would appear that, under such a system as that, both discipline and the inculcation of orderly habits becomes altogether impossible.
  In that connection, I am reminded that we were told in the Debate on the Supplementary Estimates, which took place in February, 1946, that the estimated requirements were for 800 new school rooms and 750 new practical working rooms. The proposals received, at that time were only for 343 school rooms and 373 practical working rooms. I look forward to hearing exactly what is the position now, and to what extent, if any, these requirements have been increased, and to what extent they have been met, and how many new school rooms will be available at the start of the new school year in a few weeks' time. In that connection, the Minister no doubt has in mind the recommendations he received from the working party of architects, which he appointed to consider, during the period of the brick shortage, the type of construction which should be adopted for our permanent schools. He may remember the recommendation was that they should be structural steel-frame buildings infilled with concrete blocks and precast concrete floors and roofs. These austerity type.of schools were later to be furnished, when the materials became available, with a good finish to make them equal to normal permanent schools. Can the right hon. Gentleman tell us today fit progress has been made with that
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  project, and how many, if any, of this type of school have been completed?
  I hope, in considering new schools, the right hon. Gentleman will see that our new secondary schools are smaller than those built in recent years before the late war. I have noted, in the Report of his Advisory Council, that the opinion is expressed that no school other than the omnibus school should have more than 600 pupils. I, personally, should like to see that as the absolute limit for all types of school. Today, the majority of our secondary schools in the large cities house about 1,000, and some 1,000 to 1,500. In one case, the school population is in excess of 1,700. Schools of that size are far too big for efficiency and proper supervision, and I doubt whether the headmaster of a school like that can even know his whole staff, let alone any of his pupils. If a school is to be properly run, the headmaster should know his staff intimately and supervise their work, and should also know his senior students. There is another important reason for having smaller schools.
  As I see it, the great difficulty today, in keeping an alert, live and interested staff, arises from the slow rate of promotion. Today, a teacher, no matter how brilliant and efficient he may be, has very little chance of ever reaching headmastership of a city school. I am told, for example, that no teacher can possibly expect promotion until he has put in 10 years' teaching, and even then, only if he is particularly brilliant and has a great scholastic career behind him, can he be considered as a head of a department in a secondary school. Another 10 years must pass before he can be considered for a headmastership of a primary school, and another six or seven years before he can find his name on a short leet of those who have applied for promotion to headmaster of a secondary school.
  If these facts are correct—they are correct in so far as our major education authorities are concerned—it means that before a man can become a head of a primary school he may be well on in his forties, and before he can become a headmaster of a secondary school he must be in his fifties. Headmasters should be very receptive to new ideas, but at these ages, and after all the long grind of 10 or 25 years of teaching, it seems to me that many of these men cannot but have

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  lost a great deal of their enthusiasm. What we want is younger men to fill these highly important positions. We want men with the very highest qualifications, with a considerable amount of teaching experience and still young in outlook, whose enthusiasm has not been withered by hope deferrea or frustration.
  The point I wish to make is this: that smaller schools would provide more rapid promotion, and would be of direct benefit to the teaching profession and to the standard of education in Scotland. The great danger I see is that promotion should be by seniority alone. I do not know whether there is such a thing, but I hope that there is some system which seeks to find brilliant men in the teaching profession and keeps track of them, not allowing them to remain too long in one post, but encouraging them continually by stepping them up. The English public school system has achieved that as far as headmasters are concerned. Seldom will there be found headmasters of English public schools who on first appointment are as old as the newly appointed headmasters of our primary schools in Scotland.
  That leads me to wonder whether our educational authorities are not too big. Glasgow has some 200 schools under its control. Can the director of education really know with any degree of intimacy the 200 headmasters under him, let alone the 6,000 odd teachers who fill the junior posts? Can the education committee know the schools sufficiently well to take a lively interest in them? If we want to have efficiency, we may have to find our way back to some smaller administrative unit than that which exists at present in Glasgow and some of our other large cities. There are, of course, school management committees, but in the cities these committees have little authority. They are principally concerned with interviewing parents of children whose attendance has not been good. I suggest that in the cities these committees should be given wider functions, such as are delegated to the management committees in rural areas. If these powers can be delegated to management committees in rural areas they can be delegated to management committees in our cities.
  The Secretary of State for Scotland (Mr. Westwood): At the moment, there are no school management committees in the counties or the cities. The education committees operate only in the county areas.
  Commander Galbraith: I am glad to have the correction, which would seem to make my case even stronger. I believe that these authorities have too wide areas over which to exercise control, and that there must be some devolution of function introduced into these places. In relation to the larger authorities, such as Glasgow, can the education committee, or the sub-committee of the education committee, really know the professional merits of the hosts of applicants who come forward for promotion? Can they decide on the best man to fill a particular position? I can think of nothing more damaging to the character or enthusiasm of a professional man, such as a teacher, than for him to be passed over following a short interview with a committee which he knows can know little of the work he has done, or his capabilities. There should be some greater devolution than there is at present.
  I feel that under existing salary scales there is too little differentiation between those who have the highest qualifications and those who have lesser qualifications. That is particularly true of women teachers. The life of the woman school teacher is comparatively short—maybe six or seven years on the average—and then she leaves school to get married. If she goes for the highest qualification, the honours degree, she can never financially make up the sum she has lost by not going straight to a school when she had the ordinary degree. That also applies, to a large extent, to male teachers. Not sufficient incentive is being provided to get men to go for the highest possible qualifications. After all, we need men of that type today. We have many brilliant boys in our schools who need brilliant teachers, and I hope the Secretary of State will encourage teachers, in every possible way, to obtain the greatest qualifications available to them.
  I hope that the Committee has been in general agreement with me so far. Now I want to turn to a subject on which

  1057
  there may well be the greatest possible differences of opinion. We separate cur primary schools entirely from our secondary schools and, generally, I agree with that course, but I have some doubt whether that system is in the best interests of some of the pupils who reside in remote rural areas. Our children go to a primary school at the age of five, and they advance through the school until, at the age of 12, they pass to the secondary school. There is the control examination at 11½, but whether or not the child succeeds in qualifying in that examination, he is passed on to a secondary school at the age of 12. So we have, passing on to a secondary school, children who, for one reason or another, have been unable to assimilate their primary education. If they were unable to do that it is quite certain that they will be unable to take in the higher education provided in the secondary school. That seems to be entirely wrong.
  Further, if the pupil fails to reach a certain standard in his first or second year he passes on into his succeeding year. I am told that that is due to lack of proper accommodation, that if such children were held back it would result in more serious overcrowding than there is today. That is a poor excuse, and is a matter which ought to be put right. These children are not only wasting their own time, but are wasting the time of brighter pupils and are pulling down the w hole standard of education. I do not blame the children; their failure may well have been due to illness, or the size of the classes in the primary schools, or some other cause, but this is a situation that must be tackled. Let me revert again to the English public school system. No boy is admitted to an English public school unless he passes a qualifying examination designed to prove that he has reached a standard which will enable him to benefit from the education that the school provides. If he fails to qualify he is not admitted. When admitted, if he fails to reach the standard of his particular class he is retained for another period, but if he fails to qualify by a certain age his parents have to remove him from the school. I am told that that system applies in Government schools in the Dominions and in America—
  Mr. William Ross: Is the hon. and gallant Gentleman suggesting that that does not apply in senior secondary schools in Scotland?
  Commander Galbraith: The point I am making is that no child should be allowed to pass from the primary to the secondary school unless he has qualified for the standard of the secondary school. The child should have to qualify at the control examination.
  Mr. Rankin: Would the hon. and gallant Gentleman define a little more closely what he means by "secondary school," because there is no such problem? It is a case of grading for the type of further education for which the pupil is qualified.
  Commander Galbraith: I understand that no matter whether the child has reached the required standard or not, he passes automatically from the primary to the secondary school. I leave it to hon. Members who have a greater knowledge of the teaching profession that I have, to correct me if I am wrong.
  Mr. Gilzean: Is the hon. and gallant Gentleman aware that there are two types of secondary school, and that if a child is below the standard of attainment he goes to the lower secondary school?
  Commander Galbraith: If the hon. Gentleman can assure me that what I have described does not happen, I shall be delighted. But I have it on reliable authority that the system I have described is the one which is imposed at the moment. I can think of nothing more damaging or demoralising to a child than that he should he put into a class where he is completely out of his depth and where he feels that his day is uselessly spent. A child placed in that position becomes lazy, indifferent, resentful, or rebellious. I do not agree, if that is the system, that the junior and senior secondary schools should be united.
  I consider that the multilateral school, in existing circumstances, is nothing less than a menace. If it offers everything from needlework to dynamics and Greek, for the economic deployment of the staff it is obvious that the school will have to be a very large one. I am given to believe that to get a specialised class, let us say, in dynamics, it would require a

  1059
  school population of about 1,500. I have already stated my objections to schools of that size. I know that the right hon. Gentleman's Advisory Council has stated its objections to adopting the English system of grammar schools, technical and modern schools, but that division seems to me to accord with the facts with which we are confronted. Surely provision has to be made both for those capable of high academic attainments and those not so favoured and, therefore, there must be a division at some period. I hope that today it is realised that high technical abilities demand just as great intelligence, although perhaps of a different kind, as high academic abilities.
  Miss Herbison: That was a point which I was about to raise. The hon. and gallant Gentleman seems to like the division in England into three types of school, but does he not realise that if we have that division and pupils are chosen in the way the Act suggests, we shall not get the best brains among our technicians, which an industrial nation like Scotland or Great Britain must have?
  Commander Galbraith: That is a matter open to argument. It may be that the hon. Lady is right and that I am wrong. I think that she was referring to the report made by the Advisory Council, which rather tends in the direction in which she has spoken, but it may be that other people would not accept that point of view. I was saying that I hope that today it is realised that high technical abilities demand every bit as great intelligence, although perhaps of a different kind, as high academic abilities; and our country, as the hon. Lady has said, needs a very great number of well trained technicians. I do not think that we are ever going to get these if promising technical pupils are educated in the same class as pupils who are only capable of imbibing a minimum of knowledge.
  That is surely what is happening in our multilateral schools today. Those of poor attainments, if they are boys, are put in the technical departments, and if they are girls they are put in the domestic departments. Pupils and parents alike take for granted that these are inferior departments in the schools, and that seems to them to be proved by the fact that if pupils fail to reach a standard of academic attainment they are sent to those departments to mark
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  their failure. I suggest that the line of division should be between pupils who are capable of good intelletual attainment, no matter of what kind, and those who are not so capable. It is at least arguable that boys and girls in primary schools who give evidence of intellectual ability should, as I understand the system is at present, be sent straight to the senior secondary schools, and, either at that moment or later, they should be allowed to follow their bent whether it be technical or academic. The remainder should pass to the junior schools and those who later on show ability should have an opportunity of being promoted to the senior schools.
  I am in some difficulty in regard to those clever pupils who do not desire to continue beyond the school leaving age. It may be in their interest if they were placed in the junior schools where they could get a complete course of instruction, finishing at the school leaving age. It may be better for them to take such a course than to have to leave a senior school half way through the course. I am quite certain that the retention of these clever boys in the junior schools would be very much to the benefit of those schools. They would provide a mental stimulus both to the teachers and pupils, and would, indeed, become the backbone of the school. They would also have a chance of leadership such as would not be available to them in the senior secondary schools which they have to leave before the end of the course.
  I have endeavoured to indicate from a layman's point of view—I make no claim to being an expert on this subject of education—what appear to me to be the weak points in our educational system. The remedies, as I see them, are fairly obvious. We should have a reduction, both, in size of classes and the size of schools, such as would enable us to provide a sound educational foundation for every pupil and which would offer a greater encouragement to teachers and give better opportunities to the more talented pupils. Only in that way can we hope to recover the educational prestige which we had and which during the past 30 or 40 years we have lost to a great extent; and only in that way do I believe that we shall be able to arm our future citizens with the knowledge necessary to enable them +o meet the testing times which undoubtedly lie ahead.
  4.16 p.m.
  The Secretary of State for Scotland (Mr. Westwood): This is an opportunity, to which I am sure the Scottish Members always look forward, to discuss education, which is always of great interest to Scotland. I shall try briefly to deal with one or two of the points that have been raised by the hon. and gallant Member for Pollok (Commander Galbraith) in a very kindly way for the purpose of getting information, and, I am sure, for the purpose of helping with the problem of the administration of education in Scotland. I entirely agree with the statement that one of the most important things which we have to consider today is the administration of the Act of Parliament passed in 1945—the new Education (Scotland) Act—because, although it was placed upon the Statute Book in the last days of the Coalition Government, it has been left to me to administer and to put into operation.
  Commander Galbraith: I think that the right hon. Gentleman will remember that the Bill actually passed through its Committee stages and through this House during the days of what was called the Caretaker Government.
  Mr. Westwood: I accept the correction, but I, along with others, had all the hard work in making the preparations in connection with that Measure. It will be well known by the hon. and gallant Gentleman how difficult it was at that late stage to get the Bill on the Statute Book, although I must admit, it was done with cooperation on both sides of the House. If I slipped up by referring to the Coalition Government, I apologise, but, of course, the Caretaker Government lasted only five or six weeks, and no one remembers anything that happened during that time.
  The most important step that so far has been taken in the implementation of the Act of 1945 was the decision to raise the school leaving age to 15 on 1st April this year. The hon. and gallant Gentleman has put certain questions to me as to what provision is being made in the way of classroom accommodation to meet the needs associated with the raising of the school leaving age. I think that it would he true to describe the raising of the leaving age as an act of faith, particularly in view of all the difficulties we were facing and are facing at the present time. It was an act of faith in
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  the value of education and in the future of our country. Notwithstanding the difficulties of the time, I felt justified in making sacrifices to improve the education of our children, to give them a better opportunity of attaining a better all round development, and the possibility of increased usefulness and happiness, as a result of increased education.
  The raising of the school leaving age has meant an increase in the number of pupils in the upper classes of the schools. That increase will make itself felt in the autumn of this year and it will reach its maximum in about a year's time. This is not the only way in which the number of pupils will be affected. In the last few years, as will be known to Members on all sides of the Committee, there has been a marked increase in the birthrate, as a result of which there will be a very substantial number of additional pupils who will begin to appear in the infant classes in 1948 and will pass up the schools in the succeeding years.
  The effect of these changes is that the total number of children—when I deal with the problem of accommodation I have to take both sides of this question which was put to me by the hon. and gallant Member—for whom our schools will have to provide will increase considerably in the next few years. A preliminary estimate which we have made suggests that by 1952 the total roll will be at least 12 per cent. above the 1946 figures. We have to take this into account when we were estimating the number of additional teachers which we would require during the next few years, and also when considering the number of classrooms that we would require.
  Before I come to the problem of the classrooms, I will, if I may, touch upon the question of teachers. I am sure that if I do not, someone will raise the question of the possibility of a shortage of teachers as a result of the change in the school leaving age. We expect to obtain the additional number of teachers required partly from the normal output of the training centres and partly from the emergency training scheme. We estimated that we should require nearly 3,500 teachers from the emergency training scheme. I am glad to say that our expectation has been fully realised. Approximately 8,550 candidates applied to be trained under the emergency

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  scheme. Of that number, some 3,900 have already been accepted, and about 1,000 remain to be interviewed. There may be some shortage of teachers in 1947 and 1948, but it should not be serious enough to cause insoluble difficulties in the school. From September, 1948, when the full effect of the raising of the school leaving age will be felt, the position will improve, because of the steps we are taking in the emergency scheme. The National Committee for the Training of Teachers is now satisfied that, except in a few categories—for example, teachers of physical training—they will be able to secure a sufficient number of men and women teachers to meet the needs of the schools. For most of the extra accommodation that will be needed we shall of course have to rely on standard prefabricated huts.
  Mr. Willis: Before my right hon. Friend leaves the subject of teachers, will he tell me whether the estimate he has just given was based upon retaining the size of classes, or upon a reduction of the size of classes?
  Mr. Westwood: It is based on a policy that we have. I always believed that there ought to be a reduction in the size of classes, and I have always argued for it. I believe in it. I also have always believed in the raising of the school leaving age. Although I know it was the law of the land for some years, no one standing at this Box accepted the responsibility of raising the leaving age until I came here. No one sought to raise the age or to fix the appointed day. I had to keep all my ideals in mind when I proceeded to raise the age. Those ideals included the point just raised by my hon. Friend the Member for North Edinburgh (Mr. Willis) about the smaller class. I have always believed in the two-teacher school as we used to speak of it in the old days—I mean the school of 750. I used to think that was large enough for a headmaster to look after, and to retain personal contact with his scholars. We called it the two-teacher school—in other words two classes at the same stage of advancement, until they were ready to be passed on to the supplementary classes, as they were then, or on to the secondary schools.
  I have always believed, as I say, in the reduction in the size of classes, but it can only come as part of a general policy.
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  Under the set of circumstances prevailing at the moment, the raising of the school leaving age was more essential than anything. We had pledged ourselves to it for so long. Also, it was part of the Act of 1945. No one would be more ready to accuse me of having failed to give effect to the principles of the 1945 Act than hon. and right hon. Gentlemen opposite. That Act having been placed upon the Statute Book, it was my duty to see that the school leaving age was raised, and it was raised from 1st April this year.
  Mr. Thornton-Kemsley: Is the Minister, after his long and rather involved answer to the hon. Member for North Edinburgh (Mr. Willis), meaning to imply that in fact he did take into consideration the smaller classes, in giving his rather optimistic answer or estimate as to the number of teachers? Or has he made no allowance for making the size of the classes smaller?
  Mr. Westwood: The fact is that we were taking into consideration the whole picture but, until we change the code, we cannot reduce the size of classes from 50 to 40, or in some cases from 40 to 30. We shall have to go by stages in getting smaller classes. I was taking a very broad general picture of the situation as it is. The requirement in 1948 is based upon the present position, keeping in mind that we have to go back to reduce the size of classes. Keeping the present code in mind, we shall—at least I am satisfied that we shall—have the requisite number of teachers by 1948 to deal with that problem.
  Most of the extra accommodation that will be needed will be the standard prefabricated huts. We hope to obtain about 1,370 rooms in this way. On 15th July, 1947, preliminary proposals for 1,341 rooms had been submitted by education authorities. In dealing with these, we had to keep in mind the recommendations of the committee of architects. We considered their recommendations and we sent them to the authorities. Those recommendations have provided the basis for some of the schools and they have been kept in mind by the local authorities responsible for building them. The Ministry of Works have received final instructions to proceed with 1,142, and 634 are in course of construc-

  1065
  tion. None are yet finished, but some are now very near completion. Progress has been less rapid than I had hoped, in spite of the help given by the Minister of Works, but I need not remind the Committee of the difficulties which have hampered building work in all directions. The Ministry of Works are creating reserves of substitute materials and equipment which may be used, as a temporary measure, to complete projects which are in an advanced state. In collaboration with my Department they are also concentrating their efforts on the most urgent cases where the requirements must be met by a particular date.
  I do not intend to claim that all the extra accommodation that we shall need will be available everywhere and at the moment when it will be required, but one thing which I do know is that the local authorities are now doing their best, as we are doing our best, because the age has been raised. If we had not raised the school age we should still have that lackadaisical attitude on the part of so many of the authorities who would not have been facing up to their responsibilities. They are now tackling the problem of providing the accommodation necessary for the children who are being taken into the schools. I think I can claim that the problem is being tackled with energy, and that the most urgent cases are being dealt with first, that there is good reason to hope that in most places the provision will be reasonably satisfactory, and that elsewhere it will not be too long before the arrears are made good.
  Commander Galbraith: The Minister said that 634 of these rooms were in course of construction but that none had been completed up to the present moment. Could he say how many he hopes to have completed by the end of the year?
  Mr. Westwood: I will try to obtain that figure before the end of the Debate so that my hon. Friend the Joint Under-Secretary may be able to give it when he replies. The question of salary scales was raised, and in reply I would say that that is a matter for the education authorities in consultation with the teaching profession. The promotion of head teachers is also a matter which we may entrust to the education authorities to carry through. I always find that the person who does not receive promotion
  1066
  is the one who is dissatisfied and who complains of the system, and that the person who does receive promotion is satisfied and says that the system works very well. As for the salary scales they are, as I have said, negotiated between the teaching profession and the education authorities. A further point was raised that children were being passed on to a higher stage so as to provide the necessary accommodation for children coming up from the lower stages of the school. I can assure the hon. and gallant Gentleman that the Department have no evidence that less able children from the first year of the secondary school are forced to go on to the second year for reasons of accornmodaticn.
  Commander Galbraith: Would the Minister consider this point again, because I have definite information that it is a fact that children are pushed on before they are ready to go and before they have reached the required standard?
  Mr. Westwood: If any evidence is forthcoming, either during this Debate or afterwards, I am willing to look into the matter. I think that will avoid the necessity of dealing with it just now, and if an actual case is brought to my attention I will have full investigations made so that I can deal with the particular problem. My advice, however, is that there is no evidence that less able children from the first year of the secondary school are forced to go on to the second year for reasons of accommodation.
  A complaint has been lodged because we have primary and secondary education, the two forms which already exist in Scotland. I remember that in my early days during my fight for education one of the bitterest memories I had was that the educationists of that day thought that a person could be educated only if he or she could benefit from academic teaching and an academic career. Time and again I have argued against that. The educational courses of those years were entirely wrong and were fitted only for the child who could take probably two languages other than English, and they did not cater for the child who could not take a language other than English. The result was that we concentrated on academic teaching, and really lost to the nation much of the ability which would have stood Scotland in good stead at the

  1067
  present time, if it had been properly trained.
  It all depends on the interpretation of the word "secondary" and the number of courses that we have in the secondary schools. It is true that the smaller secondary school may have its advantages, but the omnibus secondary school may also have advantages because, with the ability of the headmaster, we can fit the child into the niche where he can best benefit. If he cannot benefit from languages or even from science, he can fit into the course where he can get the best advantage from the teaching that is there We can draw out of the child what is there, and give the best possible advantage from the educational facilities which are being provided. It all depends upon what is contained in the curriculum of the secondary school and the number of courses provided.
  I certainly do not agree with the hon. and gallant Gentleman that there is anything wrong with the system in which we have the two forms of education, primary and secondary. What can be worse for the growing boy of 4—and now going on up to 15 year of age—than if, simply because he cannot take the ordinary form of education that is being provided, he has to play in the playground and be in the same classroom with children of eight, nine and To years of age? If he is not good at one thing, he may be good at another, and, therefore, he ought automatically to go on to the secondary department when he reaches a certain age instead of being kept in the lower department. I make no apology for the fact that we have primary and secondary education in Scotland at the present time.
  I think I have dealt with the main questions which were raised, and I should like now to put forward one or two points connected with the Estimates which are now before us. I submit that it is essential that for the pupils concerned, the additional period of schooling should not be merely a period of marking time, but that they should obtain—and be recognised by their parents to be obtaining—something not available to them within the limits of the previous leaving age of 14 plus. I have, therefore, sent a circular to the education authorities suggesting how the additional period may be used to provide a real culmination of the pupils' school education, by which the acquirements of
  1068
  earlier years are extended and integrated and at the same time, through the adoption of a realistic approach, are related to the needs of the everyday world where the pupils must in due course play their parts alike as workers, as citizens and as individuals.
  What I have said so far has been concerned mainly with the administrative framework which is necessary to provide the material conditions in which the work of education can go forward. We must never let preoccupation with these administrative details obscure our view of the main purpose of education. So far as the schools are concerned, that purpose must be to secure that every child receives an education which, in the words of the Act, is suited to age, ability and aptitude and that the child is in such a state of health that he will be able to derive the full benefit from the education. Incidentally, I may mention that as a result of the tests that have been made in the great City of Glasgow, I find that the provision of midday meals and free milk and the development of these services-88 per cent. of our children in Scotland are taking advantage of the free milk provided—has resulted in an improvement in our children's health despite the difficulties with which we are faced. I think they are.88 inches taller and 3 lbs. heavier than they were in the prewar years.
  We must also see that the education is given in schools which are properly planned and adequately equipped, and by teachers who are well qualified and who enjoy proper conditions of service. This is a task which will demand all the energies of administrators and teachers alike. In carrying it out we have the advantage of the advice from the Advisory Council on Education in Scotland, and particularly the advice which has recently been published on primary and secondary education. These reports from the Advisory Council contain much wise counsel, and I know that they have attracted favourable attention outside as well as inside Scotland. We are greatly indebted to the Advisory Council for the immense amount of work which they have put into the preparation of these reports, and for rendering such valuable assistance to Scottish education administration.
  There is only one further point with which perhaps I should deal, because I know there are many who want to

  1069
  take part in this Debate. It is a point which has been giving and causing a certain amount of concern in Scotland during recent months. I refer to the senior leaving certificate examination. I am sure if I do not deal with it somebody else will, so that it is better that I should forestall them and deal with it now. This year, as last, the results of the examinations have been widely discussed in the Scottish Press, and the Department have been subject to criticism which I suggest, was often ill-informed and based on misunderstanding of the procedure. There are too many people in this country today who think that certificates are the only real tests of education. I am not prepared to admit that, because I do not think I ever got a single certificate, but I know some who got many of them and they envy me the position that I occupy at this Box today. I have no envy for the positions which they occupy.
  Lord John Hope: The right hon. Gentleman may he the exception that proves the rule.
  Mr. Westwood: I cannot too strongly deprecate the publication of figures—we saw it in connection with the Glasgow schools—showing the percentage of passes gained by particular schools or comparative percentage figures for all the schools in an education area, and it is satisfactory to have the assurance of the teachers' organisations, as I have, that they agree with me in regarding this practice as most undesirable. It is harmful to the schools, and quite misleading to the general public.
  I must repeat what I have more than once endeavoured to impress upon this House when I have been taking part in previous Debates on education, that these percentage figures have no real or precise significance. Any school can have 100 per cent. passes if it presents only those candidates who are certain to pass. Fluctuation in the percentage from year to year may be due to any or all of a number of factors quite without the control of the Department, and quite independent of the standard exacted by them as examiners. It would be easy for me to instruct the Department so to adjust their standards as to ensure that as large a percentage of pupils receive the certificate in 1947 as in 1946 or in 1939,
  1070
  but I have been careful to issue no such instructions.
  In a circular sent out in July, 1945, when the normal procedure was resumed, it was announced that
  "the standard required by the Department before they award the certificate or accord a pass in any subject will generally be the same as that which obtained in 1939."
  The Department, with my full approval, are conscientiously endeavouring to carry out that undertaking. Were I to countenance any breach of it, I would be guilty of dishonesty towards the 60 or 70 professional and other examining bodies which accept the leaving certificate as exemption from their own examinations, and it would soon lose the high respect which it has so long enjoyed. What is more, I would be doing a grave disservice to Scottish education after my many years' service, for with the increasing presentation of weak candidates from year to year the standard of the certificate would be progressively lowered. There is good ground, if I may say so, for suspecting that in 1946 and in 1947 a substantial number of weak candidates were, in fact, presented as part of the total, which has risen this year to 1,167 above the figure for 1939 and 339 above last year's figure.
  I hope that I have made it perfectly clear that I have not the slightest intention of reducing the standard of Scottish education or of the standard necessary for obtaining the higher grade certificate. In fact, last year's figure of 4,522 receiving the certificate was 436 above the total for 1939, which is the right year on which to base a comparison. I promised that this would be the last main point with which I would deal, for I know that there are many who want to take part in this Debate.
  There is, however, one thing more I do want to touch on, and that is in regard to the great discussion in Scotland as to the need for a new university. I submit that one of our main needs in Scotland today is the development of technical education and the development of technical schools with a view to providing for our children that scientific and technical education which will fit them to go out into industry to hold our place, as we do at the moment, as the finest craftsmen and the finest skilled workers in certain directions which there are in the world today.
  Mr. Rankin: Would my right hon. Friend agree with me when I say that the submission he has just made is an argumer also for fuller university preparation?
  Mr. Westwood: I am in entire agreement, but I think the universities today can provide the accommodation. We are, however, definitely short of accommodation as far as technical education is concerned. We must bear in mind that the young worker, the young man or woman, the young social being and the young citizen are inextricably bound up in the one person. We cannot educate the one in isolation from the others. When the young worker had to obtain all his technical education in the evening there was scarcely time for anything else. Once day-release becomes general, as it will when we fully develop the 1945 Education Act, the situation will be very different. That does not mean that evening continuation classes will drop out. It means that technical education will be less narrowly vocational than it has tended to be, and that there will be time to cultivate other interests. We must ensure that the young worker has both the opportunity and the desire to cultivate worth-while interests and to develop his or her potentialities in various directions.
  Through school, day-release classes, junior and technical colleges, adult education classes, the opportunities for which are provided under the Education Act, 1945, and through youth clubs and community centres, there is one aim we must keep continually before our eyes—to create responsible citizens. At every stage there must he emphasis on responsibility, on the national importance of honest work, on the need for every one to contribute his best his school, in his work, in his social life and in his citizenship of Scotland and of the wider community of which Scotland forms a part. If we can develop a general sense of responsibility, it will be a great achievement. If we can through our technical education make our workers technically efficient,it will also be a great achievement. But we shall be far short of our goal unless we can also help people generally to develop and cultivate worthwhile interests in which they find lasting happiness. It is our aim to do all these things. When that aim has been achieved
  1072
  we shall have gone far towards realising the great hopes we entertain for Scotland's future.
  4.52 p.m.
  Major Guy Lloyd: All hon. Members of the Committee would agree that the Debate so far has been in very happy contrast to the atmosphere created the last time we gathered together to discuss housing. Then, conflicting controversial viewpoints destroyed what ought to have been a constructive Debate. Thank goodness that, so far, politics have been kept out of these vitally important educational questions. Politics have been kept out by hon. Members on this side, but one never knows what hon. Members opposite will do later on.
  Mr. Scollan: We know what you will do.
  Major Lloyd: From the point of view of those on this side of the Committee who are deeply interested in Scottish education, it is a matter of encouragement that the right hon. Gentleman's statement did not attempt to taunt the Tories with all the faults in education or to suggest that it will take a long time for the Socialists to do away with 50 years of Tory misrule. It is encouraging to know that such fantastic and childish methods have not been adopted so far in this Debate.
  No hon. Member is more deeply interested in or better qualified to talk on Scottish education matters than the right hon. Gentleman. We gladly pay tribute to his lifelong interest in these questions. But he knew that he had not quite such an easy task as he would like us to believe in trying to defend the "act of faith," as he rather speciously put it, of having plunged Scotland into the raising of the school leaving age, in my judgment, and perhaps the judgment of history will agree, too rapidly. "An act of faith" sounds very well but history may say that there was a good real of the gamble about it. Still, the right hon. Gentleman has tried his best with great sincerity and I accept the fact that by and large he has produced fairly satisfactory statistical figures to show that up to date that act of faith has not gone quite so badly as some people thought, but I think that he will agree that it is still a bit early to judge whether it was not too soon to do it. Maybe this time next year he will be in a better position

  1073
  to state the facts and the figures which will tell a more accurate tale as to whether that was an act of wisdom or not.
  The right hon. Gentleman was at pains to show—and had some figures to show it—that the number of teachers which we had been able to gather together for this new situation was on the whole very satisfactory and also that the number of teachers coming forward allowed a fairly ample selection which, one would presume, gave those who selected them an opportunity to pick the best. That is a rather surprising and most satisfactory situation. I well remember, as a member of the Advisory Council earlier on in the war, that we considered the position when the war was over and some of us were very worried—the right hon. Gentleman was too—as to whether we would be able to cope with the postwar position in view of the shortage of teachers. It is a very remarkable thing that we should have been able to find these men and women in Scotland from the Services and elsewhere to come forward to enter the teaching profession and to find them apparently in comparatively sufficient quantities. I join with the right hon. Gentleman in saying that that is a very satisfactory situation.
  On the other hand, I am bound to say that the right hon. Gentleman did not make out a very good case with regard to the sizes of classes. I believe that the average teacher in Scotland is definitely of the opinion that the extension of the school leaving age, even though we will almost certainly get the teachers in due course and have done very well up to date, will for a long time to come be at the expense of extra work for him or her. The raising of the school leaving age was the unanimous recommendation of the Advisory Committee to the Secretary of State for Scotland during the war, so there are no politics in it, and no particular political party can say that they were the ones who wanted the school leaving age raised and others did not. It was a unanimous decision passed by a coalition Government and based on the unanimous recommendations of a highly representative advisory committee for education in Scotland. But I believe that the average teacher feels very sore at the fact that this great decision has to a large extent been made at his or her expense in that it has not
  1074
  reduced the size of classes at which they were aiming and because the tendency for quite a long time may be the other way.
  In the matter of accommodation, a very important question, the right hon. Gentleman was able to say that a considerable number of buildings of certain specifications, not ideal but probably satisfactory under the circumstances, has been approved. He was able to say the same kind of thing when he talked about the housing problem. No doubt the number of plans approved by the local authorities for houses is very substantial, but he had to admit at the end of the figures he gave, which were not so bad, that in fact not one single hut, or whatever is the right word to use, had been completed. At least I gathered that was so. There, too, there is an "act of faith," for some considerable time may well elapse before the accommodation required in connection with the raising of school leaving age has been provided, and while that hiatus exists—and it may be much longer than some of us would like —the educational organisation in Scotland will suffer a severe strain in the size of classes and from the point of view of accommodation.
  I want to refer to something about which one can produce no evidence, but I think all sections of the Committee will agree that to produce the requisite number of teachers for what we need in Scotland is not enough; what is infinitely more important than mere numbers is the right quality. I would not like to be misinterpreted in that connection but I say that anything which the administration of education at St. Andrew's House and the local authorities and the personal influence of the right hon. Gentleman ' can do, should be done to provide the finest possible type of teacher with a real vocation for a none too easy task, not too well paid, and with no very important prospects, because it is of the utmost importance to the future of Scotland. I think the concentration upon quality should have priority over concentration upon mere numbers. I know the right hon. Gentleman agrees, and when he says: "We have enough teachers, they have come forward in sufficient numbers; we shall not suffer materially from the number of teachers "I know he realises that statement is not satisfactory

  1075
  unless accompanied by an assurance that not only are the numbers sufficient, but that the quality of the individuals is of the highest possible standard, in accordance with the great traditions of Scottith education
  Another point which is causing a great deal of dissatisfaction among the teachers is the increasing tendency to put all kinds of other duties upon them, which have nothing to do with education or teaching. They are becoming domestic drudges because of the menial duties they have to perform in connection with the provision of meals and other things. In addition, some of the teaching staffs spend far too much time filling up forms in connection with administration, which has nothing to do with their teaching duties, for which they have never been trained, and for which I assume they do not consider they are paid. Many teachers feel strongly upon this question. I realise the difficulties. There is an increasing tendency for legislation in almost any walk of life to place extra duties upon a number of individuals involved in that legislation, for which they get no extra remuneration and, in many cases, for which they have no special qualifications and which they did not expect to undertake when they entered the profession. Therefore, I nope the education authorities in Scotland will do their best to reduce these extra-educational duties to an absolute minimum, so that the teachers may be able to concentrate upon teaching, instead of wearying themselves for the greater part of the day by doing jobs that have nothing to do with teaching.
  The right hon. Gentleman would like, if he could do so, to give more encouragement to the Committee and to the people of Scotland who are interested in this, about the prospects of technical education. He paid high tribute, rightly, to the various reports of the Advisory Council on Education. I hope those reports are not just being accepted with the usual courtesy and compliments at which the right hon Gentleman is so expert, and that they will not be pigeon-holed but will be taken down constantly, dusted, looked at, and that many of the recommendations, which have little or nothing to do with legislation, will be implemented as opportunity offers. I think all in Scotland realise that
  1076
  we are still desperately short of opportunities for further technical education, and I hope the right hon. Gentleman and the Education Department will concentrate upon ways and means of expediting methods of improving the technical education of our young people under our educational system which is possible under the Education Act of 1945 and is in accordance; with the unanimous recommendations of the Advisory Council.
  Another point of interest to the people of Scotland, though not directly associated with education is the health of the children. The right hon. Gentleman referred to the increase of weight and height, but some of us are awaiting with great interest an up-to-date report on the health of the school children. I do not think we have bad one since 1945 and surely that is rather a long time ago—two years—we have not had one since the General Election. The food position of the country has materially altered since then, and it would be interesting to have this report. When may we expect it? Not only is it of great interest to parents, but it will be a criterion from many points of view. I hope this question will not he ignored and that whoever replies will inform us when we may expect the report, which is substantially overdue.
  I shall not take up time by detailed criticism of the right hon. Gentleman's report of his administration since he took office, and especially during the last 12 months. On the whole, we on this side of the Committee are not prepared to indulge in any substantial criticism. We recognise that the administration of education in Scotland has been done, under the circumstances, probably as well as it could have been done, and that there has been no direct political bias. We are not prepared to produce a substantial indictment of any kind, but my hon. and gallant Friend the Member for Pollok (Commander Galbraith) has mentioned, and other hon. Members will no doubt bring forward, certain points for consideration which might he amplified or which the Secretary of State did not emphasise as much as he might have done. Underneath the whole business, however, those interested in education know that there is one great thing lacking—the reform of the administration side of our educational system. That

  1077
  was omitted from the Education Act by agreement, because the Act was rushed through at the very last minute, on the distinct understanding that revised administrative Clauses would be brought forward at the earliest opportunity. Until that great lack is made up, education in Scotland can never be fully satisfactory—
  Mr. Westwood: I am sure the hon. and gallant Member will agree with me when I make the claim that I was one of those who did not want to drop that. I pleaded for its retention, and the responsibilty for dropping it must rest on the other side of the Committee and not on this side.
  Major Lloyd: I fully endorse the right hon. Gentleman's statement that he was not in favour of those highly controversial Clauses being dropped, but I feel quite sure the right hon. Gentleman will, in turn, admit that there was unanimous understanding that in fact at the earliest opportunity if they were dropped, in order to get agreement on the remaining Clauses, those particular Clauses would be reintroduced in revised form at an early date. Our Education Act with all its advantages and possibilities, is definitely deficient of the vital reforms in administration which are so necessary in Scotland. We all know it lacks them, and I urge on the Government to take their courage in both hands, and the Secretary of State to use his influence to see that some measure of reform in administration, as far as possible without political bias is brought in before this Government leave office.
  Mr. Carmichael: Would the hon. and gallant Member give some evidence of where the administration at the moment is wrong, and what reforms he has in mind?
  Major Lloyd: I do not think I could begin to do that—if I did so I would continue for another hour.—[HON. MEMBERS: "Go on."] The Secretary of State is fully aware of the contents of the Clauses, and I think, incidentally, he is equally fully aware that the Education Act lacks complete fulfilment because of the lack of efficient administration. There is great scope for reform, but you would rule me out of Order, Sir, if I dealt with that, because it is obviously a subject for legislation.
  Mr. Carmichael: Surely, the hon. and gallant Member could give us something?
  Hon. Members: Answer.
  Major Lloyd: For the sake of the time of the Committee, I cannot do so. I could do so if the Committee were prepared to listen to me for another hour—[HON. MEMBERS: "Hear, hear"]—but as the Committee surely do not wish to do so, I will not be enticed or seduced into a discussion which would be out of Order, and which I know perfectly well, Sir, you would rule out of Order, ere I had more than begun.
  5.14 p.m.
  Mr. Rankin: I am sure the hon. and gallant Member for East Renfrew (Major Lloyd) and the hon. and gallant Member for Pollok (Commander Galbraith) will forgive me if I do not follow the line of argument they have sought to develop. In passing, however, I would like to refer to the closing passage of the speech of the hon. and gallant Member for East Renfrew when he was invited to give some concrete examples of his criticisms. He refused, as he said, to be "seduced"—a somewhat alarming use of that word in an educational sense—for the simple reason that, in my opinion, he had no alternative to offer.
  Mr. McGovern: "Reduced."
  Mr. Rankin: I do not share in the,non. and gallant Member's reference to the fact that politics have been kept out of the discussion. Far too often in this House we are 'told that this or that matter is above politics. We on this side of the Committee, at least, are here because of politics. If hon. Members occupy the other side because of lack of politics that is their business, not ours. Politics, after all, is simply the method of organising a group of people to live together in a community, and education is one of the weapons, one of the instruments, whereby we seek to get them to live properly in that community. Therefore, by that very fact, education is a political question. The fact is that hon. and right hon. Gentlemen opposite have in the past used it as a political weapon for their advantage. They desire that we

  1079
  should still keep it aloof from the life of the community.
  The hon. and gallant Member for Pollok, if I followed him aright, seemed to indicate that there was something wrong with the organisation of our present educational units because the director of education could not possibly get to know all the teachers under his control. That is a peculiarly lop-sided view of the question, because there are more than teachers involved in the work of education today. There is an increasing band of other important people. There are janitors, clerks, milk attendants, dinner attendants, and, in some authorities, joiners and masons and so on. Is the hon. and gallant Member for Pollok going to suggest that by virtue of his position as director of education the director ought to know every single one of the people engaged in those occupations? Obviously the criticism is nonsense, and I would do the hon. and gallant Gentleman the credit of suggesting that his heart and mind did not wholly accept the criticisms which he put forward.
  I was reading recently the report of the Central Advisory Council for Education. In the midst of a number of very important conclusions I read:
  "No substantial advance in education can be made until the number of pupils per teacher has been reduced to a point which makes modern methods in education possible in all schools, and secondly until unhealthy and unsuitable buildings have been replaced."
  It is with the second conclusion that I would like to deal in some little detail. It might indeed be said that the second conclusion includes the first. Under Section 20 of the Education (Scotland) Act, 1946, my right hon. Friend has power to make regulations fixing the areas of premises of schools. As I understand the position, nothing has yet been done in that regard. I submit that these regulations should be made forthwith. I would say that they are almost overdue, for already local authorities are submitting layout plans for their new housing areas, and in these new areas the Scottish Education Department is recommending four-and-a-half acres for the sites of primary school premises and from eight to nine acres for the sites of secondary school premises. Unfortunately, in the layout plans which are now being submitted, some local autho-
  1080
  rities are allowing less than four acres for primary and less than seven-and-a-half acres for secondary schools. When we consider that in our built-up areas today the area for the premises of primary schools varies from a half to three-quarters of an acre, and is less than two acres for secondary schools, the increase which is now being adopted by local authorities may seem quite reasonable.
  When we remember further, that housing and industry today are each getting one-and-a-half times their former space, this fourfold increase for schools may even seem fair; but I hope that my right hon. Friend will weigh this matter well before he departs from the areas recommended by the Scottish Education Department, because the demands on the schools of the future, as he himself has admitted today, will be very great. The nation requires more and more teachers, doctors, dentists, technicians, administrators, at a rate and of a quality never before required. This means that the multilateral secondary school, the common type in Scotland, will require to provide a wide diversity of courses because of the demand which this House is placing on the schools, if the plans we are putting through in legislative form are to be met. Here I would say that I disagree completely with the attitude of the hon. and gallant Member for Pollok in his criticism of the multilateral secondary school. In turn, this demand, to which I have referred, increases the needs of the school for space. In lesser degree, perhaps, this is equally true of the primary school. Already, music, arts and crafts, broadcasting, the cinema and the 'kitchen place a demand on space which was previously unknown.
  Let me look at this problem from another point of view. How do we compare with England in our treatment of space for school premises? In assessing or arriving at the size of a school, that is, its accommodation, a fraction of 1¼22 per house is allowed for primary and secondary pupils in the city of Liverpool. In Birmingham a fraction of.96 is allowed, and in Manchester.90. I am speaking of these areas because they are comparable areas in England to that which I know best in Scotland, namely, Glasgow. In Glasgow the fraction allowed is.75 per house. That means that in a housing scheme of a thousand houses, Glasgow would build or prepare

  1081
  accommodation for 750 pupils, whereas in Liverpool, accommodation would be prepared for 1,220. That is an alarming difference in space treatment as between Liverpool and Glasgow. It is obvious that there is no safety margin so far as Glasgow's school accommodation is concerned. Therefore, it is clear that the schools are being squeezed today from two directions. First, they are being restricted by this decreasing of the area devoted to the premises of the school; secondly, they are being restricted by the small figure which is used as a basis for calculating the number of school children.
  I ask my right hon. Friend to realise that school space today is very quickly eaten up. I think of Shawlands secondary school in my own area, one of the most modern and best equipped schools in the city of Glasgow, which was opened only about 15 years ago, and was given an allocation then of 9¼7 acres. Within 15 years that acreage is being eaten up, and the surplus will almost certainly disappear in the near future. As a result of that 9.7 acres being given for Shawlands secondary school, recreational activities were possible next to the school. Unfortunately, the school had no assembly hall, and now that recreational space, an absolute necessity for the school, has to be utilised because of this need for an assembly hall. In addition, there will be a further eating into that surplus space by the new demands which are being placed upon all our secondary schools as a result of legislative action within the House. The demands for space in the future will be an increasing factor. It is worth noting in passing that in the new planning projects for schools in the city of Glasgow, there is no provision whatever for playing fields for pupils. To meet this need it is proposed to provide a playing field at East Kilbride, which is eight miles from the city. Further, it should be noted that at present Glasgow is short by 1,270 acres of the minimum standard laid down or recommended by the Scottish Education Department for recreational purposes.
  I present these two points to my right hon. Friend to reinforce the plea that he will not reject the recommendations of his Department with regard to the areas of the premises for school purposes, without the most careful consideration being given to this matter of space, because
  1082
  in the long run every problem affecting the school is a problem of space. That is true as it applies to the normal child. It is equally true of the handicapped child. We may evade the problem within our city boundaries and contribute towards the creation of the handicapped child. Then in order to treat that child we must go to the outskirts, to the periphery of our great cities, and create conditions to deal with the handicapped child which we have failed to provide for the normal child within the city's boundaries. I hope we will not overlook this fact in dealing with the layout plans for our new housing areas. In conclusion, I want to point out that to me the decision which we must take on this matter of space accommodation, so far as it affects the area of school premises, is a fundamental one. It will determine the shape of things educationally for the next 50 or 60 years. When we deal with it, as we must, I hope that whatever decision we reach will be one arrived at with open eyes.
  5.32 p.m.
  Colonel J. R. H. Hutchison: The right hon. Gentleman the Secretary of State in a survey over very wide territory such as education must always provide, used words to the effect that the great purpose behind his endeavour was to offer scientific and technical education to those who are going out into the world in order to equip them for industry. It is on that theme that I would like to offer a few observations. Hon. Members on both sides of the Committee who have sought to complete their political education, will have studied that far-seeing and profound document known as the Industrial Charter. They will have realised, therefore, that one of the aims of that charter is to see that those who are going to take a hand in industry, get such an education as will equip them to carry out the task to the benefit of themselves and of the community. In short, it is to offer the greatest possible opportunity to all sections of the community to succeed in life.
  That presupposes immediately the fitting of square pegs into square holes, and that fitting is the subject matter of the report known as the Ince Report, which makes recommendations that the

  1083
  Ministers of Labour and Education should undertake certain very essential changes. Hon. Members opposite are now at one with us—though they were not in the past—on the necessity for production and work. Therefore, this is no party issue. I hear an ejaculation from an hon. Member opposite who finds it too hard to be able to agree, in spite of the fact that his leaders are touring the country exhorting efficiency and production which we have exhorted for a generation. Coué-ism, the lighthearted statement that every day in every way trade is getting better and better, is now not enough.
  Here is one small step which may be taken and which may benefit trade, by seeing that juveniles, when they have finished their school, will get into a position where they can benefit themselves and trade. Therefore, let us look for a moment at what is said in the broad lines of the Ince Report. There is no time to go into the mass of details which that very able report contains. In broad outline, the report is that all schools should be forced to supply to a local advisory committee or that committee's officer, a statement of the capabilities, the bents and the intelligencies, of all juveniles who are going out into the broader life. That same advisory committee, or the same officer, shall also be entitled to demand the attendance of the child and his parents in order to offer advice. That is the length to which compulsion would go, and I thoroughly approve of it. Human beings are such that often they are not prone to take advice, but it would be a difficult matter to go further than that offer. We who have to examine our consciences and wonder whether we had given these children every opportunity of making good in life, at least would have the satisfaction of knowing that the child and the parents had been given this advice about where best the child can be fitted in.
  The appointment of these officers is a difficult and an important task. They will have to know not only all about the child from the school, but also about the local requirements of industry. They will have to know what are the prospects, how far there is a shortage or a surplus, and which are go-ahead concerns and which are not. Having married all these statistics together, then they would be well qualified to say to the parents of a
  1084
  juvenile, a boy or girl, "That is a job for which I think you are best designed and in which you are most likely to succeed. Those are our recommendations." In fact, what has happened? I am informed that already one part of the recommendation, the setting up of a national advisory council, had been carried out. I would like confirmation of that. I am also informed that a central juvenile employment executive has been set up and that both organisations have Scottish representatives. Perhaps the Joint Under-Secretary of State will confirm that. I am told also that a Scottish Advisory Committee has been set up.
  But something more than this is needed. There are certain powers for which legislation is required which are available in England and which can be made use of now, but which are not available in Scotland. I hope I am not going out of Order in pointing out that this requires legislation. There are other legislative matters which are recommended in the Ince Report. I want to see the formation of local advisory committees. We now have the top storey set up, the grand national advisory committee with Scottish representatives, and I want to see committees with their local tentacles all over the country so that this great advantage, this great setting off point for juveniles, may become omnipresent. Will the Joint Under-Secretary of State enlighten us about what is to happen in this matter? Will he tell us how far steps have been taken? If none of these steps have been taken, will he tell us what is brewing and what plans he has? Scotland has always plumed herself upon her educational system. Let her add another feather to that plumage and let her lead the way in what is a recommendation to the whole of Great Britain and towards which we might easily take the first step.
  5.40 p.m.
  Miss Herbison: I was rather surprised to hear it stated time and time again by the hon. and gallant Member for Pollok (Commander Galbraith) that this subject should not be controversial. I was more than ever surprised, because one of the things that made me interested in politics was the realisation, even before I became a teacher, that one of the main things we needed in Scotland was equality of oppor-

  1085
  tunity and experience, which I heard preached from one political platform after another in dealing with this question of education, and in trying to get our Scottish people to realise that great improvements were very necessary.
  There is one question which I want answered at the end. There has been great praise of the Secretary of State today about the Advisory Council on Education and its work. There was published a few months ago by that Advisory Council a report on secondary education, and I should like to know when the Secretary of State and his Department are to decide whether or not they are accepting the recommendations that are to be found in that report, because, if they are accepting them, then much of what was said by the hon. and gallant Member for Pollok would be proved completely wrong. We, on this side of the Committee, have always felt that it was altogether wrong to segregate children at the tender age of II into junior and senior secondary schools. Indeed, in Glasgow, where I worked, we had three divisions. Local education authorities in Scotland have, I know, been asking the Scottish Education Department about plans for the future of secondary education in the counties and the cities. I should like these authorities to know what is the opinion of the Secretary of State and of the Department on this report on secondary education. That report suggests that there should be a common secondary school—I do not believe in having the children divided up—in which the leaving age would be 15. Thereafter, there could be technical colleges, junior colleges and colleges for those who want a purely academic education.
  There is an important reason for that recommendation, and it is not only that we should not segregate the children, but that, today, in this country, we want the very best brains to go for the technical jobs. If we follow what is suggested by the hon. and gallant Member for Pollok, we find that, in the types of school which he admires so much—the technical schools, grammar school and common or modern school—undoubtedly at the age of 11, when the segregation takes place, we shall not enable the children to develop their bent. That will ensure that those who have done best in the senior schools can go in for an academic course, and
  1086
  the second-class brains for the technical schools. A country like Great Britain cannot afford that kind of thing. If we take all our children into the same schools until they are 15 years of age, there will be a great variety of courses, arid, at the age of 15, the child will, by then, have discovered what his or her bent is, and will be able to make up his or her own mind whether technical, academic or other education is desired. It is most important to have this decision reached at the earliest possible moment.
  There was also a suggestion made from the other side of the Committee that it would be a good thing to have children of all types of ability in the one school, but that is not so. At the school where I worked—the Alan Glens School in Glasgow—we had a system whereby the very brilliant scholars were given opportunities to reach the best education suitable for them. It is the same, not only in Scotland, but in many parts of the world. This type of school has produced some of the finest technicians and engineers to he found anywhere in the world. I am sorry that I have not the time to develop this further, but I know from my own experience in teaching in the common secondary schools, that there is not much chance at all, in a properly run system, of the poorer children militating against the interests of the other children. If it were known at the age of 11 that a child was going to leave school at 15, the junior school would be the place for it no matter how brilliant it was. We cannot have it both ways, and we cannot say, if we have to have a common school, that the poorer child is going to keep back the brilliant child. It was suggested by the Opposition that that would prove a detriment to the poorer children, but I think that that was a suggestion of the worst kind of class distinction. I would say that, if we put all our children in the common secondary schools and make these schools the excellent places that they can become, there is no doubt about it that education in Scotland would again become as good as that in any other country in the world.
  Both the hon. and gallant Member for Pollok and the hon. and gallant Member for East Renfrew (Major Lloyd) spoke about the problems facing us over the raising of the school leaving age, and it was suggested by the hon. and gallant Member for Pollok that we had plunged

  1087
  into this. It was a very slow-motion plunge, because, on the Statute Book of this country, we have had from 1918 until the present time, the power to raise the school leaving age to 15 whenever we wished to do it. Over all that time, local education authorities in Scotland had the chance of making the preparations, geting their buildings ready and obtaining the necessary teachers. Indeed, if the war had not come, there was a definite obligation on every local authority to keep children at school until 15 years of age after September, 1939. Very few local authorities in Scotland had made any preparations at all for the raising of the school leaving age, and were they not thankful—not that the war came, because I would never say that anybody was thankful for a war—but that they did not have to raise the school leaving age in 1939? I have many teacher friends, and I know that there are great problems facing us, but I am just as certain that, if we had postponed the raising of the school leaving age we would have met with the same thing from many local authorities, particularly the reactionary ones. The Government have now decided that the time has come for raising the school leaving age. They are faced with great difficulties, but these problems must be faced and we must see to it that they are solved.
  The hon. and gallant Member for Pollok said that it had been the aim for a very long time of hon. Members on both sides of the Committee to lower the size of classes. I wonder. After I had taken my degree and finished training as a teacher, I was interviewed with a great many more at a training college. Indeed, on that day the Lanarkshire students filled the lecture hall. The Assistant Director of Education came along and said to the women students who were looking for a job, "I am sorry, but if you can get married, do so, because there will not be a job for you in Lanarkshire for at least three years." I, with my qualifications, was unemployed for nine months. Some of my friends came down to London and to other parts of England to teach. One went on the buses as a conductress, and others, again, served in shops in Glasgow. These fully qualified teachers could not be absorbed while, at the same time, the classes in all our industrial areas were far too big to give the
  1088
  children in the elementary schools the chance they ought to have had. No attempt was made by the Government of that day or by the local authorities to reduce the size of the classes, even though they had on their doorstep these men and women for whom they could not find a job.
  The next point with which I want to deal is the quality of the teachers we are getting under our emergency training scheme. Again, the hon. and gallant Member for Pollok wondered whether the quality would be high enough, and said that we must not be concerned only with numbers. I have no fear about the quality. Was there any sifting of teachers before the war? There was none at all. If a person got the higher leaving certificate in Scotland, and did not want to take a degree, the mere fact of having that certificate gave him or her the right to enter a training college. There is no doubt that, in the past many people went in for teaching who were not suitable for it. The people who are being taken in today under the emergency training scheme, not only have to have the requisite qualifications, but are taken before a committee which interviews them and really makes every effort to find out whether they are going to be suitable as teachers.
  I have learned from friends of mine in the training college that they are delighted with the type of young men and women from the Services who will become the teachers of the future. We are fortunate in Scotland that we are getting this type of person into our schools. I noticed on the Estimates that in Scotland we are spending £200,000 for the education of Poles. I do not object to money being spent for these people when we have entered into obligations with regard to them, but, as a point of interest, I turned up the Estimates for England and Wales, and found that they were spending £900,000 for the same purpose. It seems to me that we in Scotland are taking more than our proper share in educating these Polish people. I am not grumbling about the money; there is something far more important than that; but it must mean that we are giving a greater proportion of places in our universities to those Poles, than England and Wales are giving in theirs.

  1089
  Almost every time that I interview my constituents, young boys and girls who have gained the higher leaving certificate, and who have got the certificate of fitness to enter the university, come to me and ask whether there is any chance of their getting in, or, possibly, tell me that they have been turned down because 90 per cent. of the places are being kept for ex-Service people. That being the case, I say that England and Wales should take their proportion just as Scotland is doing. I will finish by again stressing the need for the common secondary school in Scotland, not only in order to give equality of opportunity, but also to provide for that country of ours the best education and the best type of citizens we can get.
  5.55 p.m.
  Lord John Hope: I shall detain the Committee only for a few minutes. I will begin by asking the Minister one question, and will then make a few observations on what I believe to be an important aspect of education not hitherto mentioned in this Debate today. The question I wish to ask the Minister is in regard to the building programme. As he knows, no bricks have been made available for school building. As he probably also knows, there are brickyards in Scotland which are running only part time because they cannot sell their stocks. That is the stark reality of the position. That being so, I wonder whether the Minister will reconsider the original decision not to make bricks available for this type of building. In passing, I would refer the Committee to the speech made by the Secretary of State last week in which he said that new brickworks were going into production. Cannot some of the bricks produced in these new works he used for educational buildings?
  I want to make a plea, and I think that now, just as we have reached the stage of the raising of the school leaving age, is a good time to make it. We have heard a good deal in this Debate about the great advance that has been made in education on the technical side. I should be the last person to criticise in any way the tremendous advance that has been made. But no one has mentioned—and there is an increasing tendency in educational circles and throughout the country to leave this matter aside—the parallel decline in
  1090
  the study of the humanities. I think there is a great danger—and it is a danger that will increase unless it is checked—that the study of the classics will decrease as technical development increases. I noted what the right hon. Gentleman said about the difficulties and handicaps of being forced to undergo an academic education, but there need be no question, if the matter is properly tackled, of a child having to learn Greek or Latin in order to be given, at his or her most impressionable age, the groundwork in the humanities. I hope that point will be remembered.
  It cannot be denied by any who really thinks the thing out that there is no better background to any trade or career than some sort of study of the classics. In my opinion, it is not much use training children to be experts in manual skill and completely ignoring, luring their formative years, their training in at least the elements of what really amounts to the study of truth and goodness. To get that, one has to go back to the cradle of learning; one has to go back to the start of the heritage which was passed on by Greece and Rome. I do not think 12 years of age is at all too young to become initiated in the elements of this tremendous story, and I therefore make that plea, hoping that it may be heard and echoed in quarters where it can produce some definite result.
  I am not going to join the argument which threatened to develop with regard to the inclusion of politics in education. The hon. Member for Tradeston (Mr. Rankin) gave a conveniently wide definition of the word "politics" which, no doubt, suited his own case, although it was irrelevant to the point made by my hon. and gallant Friend the Member for Eastern Renfrew (Major Lloyd) which the hon. Member for Tradeston was then trying to answer. I believe that what I have been saying about the necessity for not neglecting the humanities in education is directly relevant to this question, and politics need not and should not enter into the study of the humanities at all, because truth and goodness are absolute qualities and have nothing whatever to do with the political conflict between hon. Members on this side and those on the other side of the Committee.
  6.2 p.m.
  Mr. Gilzean: It is a pleasure to follow the hon. Member for Northern Midlothian and Peebles

  1091
  (Lord John Hope) in the line that he has taken, inasmuch as he was advocating something which is fundamental to education. It is to be hoped that some attempt will be made in future to make more widely known the great lessons in the humanities.
  I was very disappointed at the opening speech in this Debate, because I consider that such a speech should present a case which is in line with the facts as they happen to be at the time. I am sorry the hon. and gallant Member for Pollok (Commander Galbraith) said what he did concerning the intake of ex-Service men and women into the teaching profession.
  Commander Galbraith: I did not mention it.
  Mr. Gilzean: I am sure the hon. and gallant Gentleman did. He deplored what was taking place concerning the work of the provincial selection boards in connection with the augmentation of the teaching profession. I would like to say one or two words on that subject. This is in line with what was pointed out by my hon. Friend the Member for North Lanark (Miss Herbison), namely, that this intake of men and women, who have not been trained in the ordinary way for the teaching profession, has proved a tremendous success. I happen to be a member of one of the provincial selection boards which was engaged in that work, and our experience was that, generally speaking we got some very fine men and women from that source. It was a question of separating the corn from the chaff, but experience has shown that these men and women will do very good work in education in the near future.
  I would like to say a few words with regard to the multilateral schools. They were severely criticised. I know of no system which is likely to be of more assistance to education than the multilateral school. One of the troubles in education is that the systems which have been followed up to now have had the effect of leaving children with an inferiority complex, feeling that they are not so clever as the others with whom they have been in contact in the primary schools. When it comes to a question of separation it is agreed that children whose intelligence quotient is not sufficiently high, cannot be put into posts for which they are
  1092
  not suited. The advantage of the multilateral school is that while the children can be separated according to their intelligence and their attainments for class purposes, there is no reason why they should not associate in the recreational part of school life. In any of the famous schools in the country the children are all treated as members of the one school and, while the more intelligent children may convey something that is worth while to the less intelligent, it is just possible that the less intelligent may he able to help the more intelligent. Therefore I hope that whatever happens in the future, there will be a decided trend towards increasing the number of multilateral schools until ultimately we will have no schools other than that type.
  I now come to the question of fee-paying schools and their general effect on the community. I admit this is not a universal problem in Scotland, but it is a problem, and it is high time we faced it. If a man desires to pay the whole cost of his child's education, that is his business and not mine, and I would not attempt to interfere, but we have the position in which a parent pays a small contribution towards the education of his child and a big contribution is paid by the community, and, because of that, the parent demands all sorts of privileges and advantages. Furthermore, the number of fee-paying schools is far too small for the demand that is now made for them, with the result that there are all manner of heart-burnings and disappointments in the community because aspiring parents cannot get their children into these schools. The time has now arrived when we ought to clear up the whole business and make up our minds that if people are going to demand these privileges and advantages they must pay for them, but they cannot expect to get them on the basis of making a small contribution while the community pays the rest.
  With regard to the raising of the school age, it is extraordinary that it has taken us all these years to exercise power that has been in the hands of the community. I am glad that, in spite of all the difficulties—and I know the difficulties concerning the lack of space in schools and the shortage of teachers—but I am glad that the attempt has been made. An attempt had to be made some time, and

  1093
  a decision had to be taken; and whatever that decision may bring to us in the way of immediate difficulty, the broad fact remains th the decision has been made, and that consequently, the problem of solving the difficulty will be confronting the community. We had to do it somehow or another. I am delighted that this has been accomplished, in spite of its having been proposed in the most unpropitious time in which we could have attempted to do it.
  I feel that we are on the verge of great things in connection with education, and that the more we can spend in this direction, the more we shall reap in the years to come. Far too many children have been coming out of school in a half baked condition—less than half baked. Let us make up our minds for the future that we are going to give every child all every opportunity of which it is capable of taking advantage. I am perfectly sure of this—that if we do that, the reward to Scotland will he great indeed.
  6.13 p.m.
  Lieut.-Colonel Sir Thomas Moore: I feel somewhat diffident at intervening in this Debate, especially before so many obvious experts who have given their adult lives to the great calling of education. I speak merely from my observation of education—of its results. I confess I know very little about the mechanics of education at either the giving or the receiving end. Between you and me, Mr. Beaumont, the only distinction I ever received at school—it was an intense surprise to me—was for Scripture. It was a great surprise to the master, too. So you will realise that my observations must be of a general nature rather than of criticism or comment on those speeches which have gone before. They were delivered by experts. I am not an expert. I am merely trying to put those views I have on the general trend of our educational policy. I think you will agree with me, Mr. Beaumont, that it is rather difficult to do so without going out of the bounds of Order; and I do not want to take any risk of causing you to have to resort to the unpleasant necessity of calling me to Order. But there are many other Government Departments that are intimately concerned with education, and that is why it is very difficult to discuss it, and present a fair picture of it, without embarking on dis-
  1094
  cussion which would obviously be out of Order.
  I feel the trend of our general educational system now is inclined to be narrow, unimaginative, and I think, impersonal. That, of course, comes from one trouble—the large size of classes for many, many years past. In the old clays, when we had, as the right hon. Gentleman has recalled, the two-class school, we had the dominie or master—or later, the rector—who knew intimately the character and personality and capacity of practically every boy in his school. Then the classes became larger and larger, and so there grew up a lack of personal contact, which is, I think, today the fundamental evil of our educational system. The second point I should like to make is that I think that there is too much attention—this has already been said—paid to having a certificate as a definition of a well educated child, and that the child is too much impressed with the value of the certificate, rather than with the value of achieving an all round education, not only in philosophy, or arithmetic, or geography, but in the humanities, as my hon. Friend the Member for Northern Midlothian (Lord John Hope) said, and in the formation of character, which should, surely, be the main inspiration of our system.
  The impression I get is that there is too much effort made to teach children to be teachers rather than to be citizens. Although we welcome the presence of so many competent teachers in this Committee, I think it would be a pity if the Committee consisted only of teachers and no one else. I think it would be wise in our educational policy to teach those four or five qualities that make a boy or a girl ready to face life, and to conquer the difficulties which face them. Too much attention is paid, undoubtedly, to what one learns at school—or what one is supposed to learn at school. From my own experience—and I suppose it is the experience of every hon. Member of this Committee—what good is in us is acquired at home. I think that courtesy, which is a fundamental part of everyone's make-up, is learnt in the streets, in the way of learning how to behave amongst our fellow men. Cleanliness is. learned not only at school but anywhere. Humanity is learned largely in the countryside, where we see nature at its best. All these considerations, of course,

  1095
  involve me in a breach of Order. Many of our homes are today without the privacy which means so much to the adolescent and to the growing child, and I cannot see how character can be formed unless the child has a good home, and can have that privacy which is essential. Therefore, I am involved in an argument on the housing situation. I should be similarly involved in other subjects beyond the scope of this Debate if I pursued that line of argument, and, therefore, to be in Order, my speech must be strictly limited.
  I hazard the remark that whatever I have criticised in our educational system is not due to those responsible for administering it, because I have talked to many teachers, including some in this Committee, and I have discovered that many of them are maddeningly conscious of their failure as school teachers, deprived as they are of the assistance they should be getting from the home and from the various other co-operators in forming the character and mental development of the child. Without in any way bringing in the political issue, I may say too that the time for raising the school age is singularly unpropitious. When I heard the Secretary of State say that he had acquired something like 1,700 schoolrooms, I felt that he was putting the cart before the horse. Those rooms should have been devoted to providing homes, which would have given proper surroundings in which the children could be brought up, and the question of raising the school leaving age should have been deferred for the time being. Every one of us knows, in his heart of hearts—and the Secretary of State knows it himself—that we have neither the schools, the teachers nor the textbooks with which to educate the additional children whom we are now retaining at school. However, he has done it and we must try to make a success of it. We have to try to get the right type of teacher, and to give them proper training, which is a point on which I agree so much with the hon. Member for North Lanark (Miss Herbison). Unless we get teachers with the humanities in them, to which my hon. Friend the Member for North Midlothian referred, we will not be able to impart to the future generation the real basis of citizenship.
  The Secretary of State for Scotland has wonderful opportunities now. He has
  1096
  raw material which never offered itself to any of his predecessors. The children of today are more beautiful, more bright eyed, more intelligent and more firmly limbed than any I have ever seen in my lifetime. This, we know, is due to the policy of the last Government—I will not dwell on that, for it might stir up antagonism among hon. Members opposite—to the milk at schools, cod liver oil, vitamins, orange juice, and open air, which children at school have now enjoyed for some years past. The Secretary of State has a great field to work on, and great raw material from which to mould great future adolescents and adults of our country. To sum up, we want smaller classes, smaller schools, and the best possible type of teacher. Let the Secretary of State take his courage in both hands and fight this battle for Scotland, which has a great tradition in education—far higher than England. True, he has to live up to far higher obligations, but let him take his courage in both hands and give Scotland the lead in education which she has so nearly lost.
  6.23 p.m.
  Mr. Carmichael: I understand from previous speeches that in this Debate it would be very wrong to link politics and education. I want to be quite frank at the outset. I cannot separate them in the way in which some of my hon. Friends attempted to do. I go further, and I remind the Committee that my predecessor in the representation of the Bridgeton Division of Glasgow claimed that he entered politics because of his intimate association with education as a teacher, and because of his experience of the suffering of the children in the schools at which he taught. I say, quite frankly, that I cannot divorce education and politics.
  In listening to the Debate today my fear was that an attempt was being made to discover the able and intelligent child merely by the ability of the child to qualify in examinations based on the school textbooks. I do not know that it is a sound method of discovering intelligence, to examine the capacity of a child to understand textbooks and give the correct answers at examinations. During the Debate there has been an attempt to protect the child with a technical bent and the child with a classical mind. No one suggests that those things should be ignored, and children

  1097
  should be given every opportunity to develop their aptitudes; but I thought that there was a tendency to neglect the child who did not attain certain standards which had been set. One of the startling features at the end of the education term this year was the number of complaints by parents regarding the higher leaving certificate. In almost every town in Scotland there were complaints about the failure of so many children at the examinations.
  The Secretary of State himself said that he would not be a party to reducing the standard of education. Well, nobody wants that. That is not the way to solve the problem. What I ask is: How is the standard determined? That is of the utmost importance. When children are in their last year prior to the examination, is any instruction given about the size of the classes, and is there any relationship between the number of children in the classes and the number who are presented for examination? From my knowledge, as a member of an education authority in the past, there has been a tendency for headmasters to present only the children they were satisfied would pass, which was often determined by some peculiar outlook on the part of the teachers; certain teachers have peculiar views, they have their likes and dislikes among the pupils, and they put forward children for examination accordingly. Have the Department made a serious examination of the returns in regard to the higher leaving certificate, and are they satisfactory?
  Up and down the country people who claim to be authorities on education have decried the method of determining the standard of education of a child or an adult on an examination which lasts only a few days. Everyone who has had any experience of this problem recognises that cognisance must be taken of the whole year's work. I know that from my own children. I have a daughter and, if I may be permitted to say so—although I do not say she takes it from me—she is a very competent and clever girl. But when she sits for an examination her nerves give way. Yet I have a son, and I do not think he would be disturbed in the slightest if the building were falling down; and he can sit an examination without being disturbed. Surely, some day we will decide that the test shall be, not merely an
  1098
  examination lasting three or four days, but perhaps the examination taken in conjunction with the year's work. I know the year's work is not ignored completely, but I do not think it is given the weight to which it is entitled.
  Mention has also been made of the fee-paying schools. I have always noticed that a distinction between classes usually indicates a distinction in politics. My hon. Friends have mentioned that a particular type of education seems to pro-dude a particular brand of politics. That introduces the fee-paying schools. A few years ago we had a very serious controversy in Glasgow about fee-paying schools. People claimed: "We have the right to send our children to the fee-paying schools if we are anxious to pay that extra money." But it is only a fraction of the money spent on their education. When we examined the matter thoroughly we discovered that the places in special fee-paying schools were allocated to special pupils. Not one of the children from the area I represent—with all the influence and wirepulling imaginable—could ever enter a fee-paying school in the city of Glasgow.
  It was not that they had anything against the child, but that they usually discovered the father was a labourer or a miner, or did not belong to one of the professions. I dislike saying these things, but it is dishonest not to say them, because they are the truth. There is a real attempt on the part of those in public life to give children the very highest standard of vocational training and education in citizenship, which is too often missed. I think we shall recognise that children should not be brought into schools on the basis of the profession, trade or calling of the parents, but on the basis that the children of the community are entitled to get the best. If we approach the matter in that way, I am satisfied that fee-paying will be abolished, as it should be in an intelligent community.
  My last point is in regard to administration. If there are serious faults in administration, as the hon. and gallant Gentleman the Member for East Renfrew (Major Lloyd) suggested, we should be given some evidence. I asked him to state what they were, but he said that it would take too long. There is this important point—and I am sorry to find that

  1099
  the, Secretary of State is associated with him—that the education committees are looked upon as being divorced from the councils. In other words, the education committee is the final authority in the real work of education. It is true that the council have certain duties, such as the appointment of directors, but the intimate matters associated with education rest entirely with the committees. It means that in many of the big cities, because of the co-option of members, the education committees can formulate a policy which is at complete variance with the elected authority, namely, the council. That is a grave mistake. If I remember rightly, the 1929 Act laid down that co-opted members were primarily to protect religious rights, and nothing else. No one suggested that when they became members of an education authority they should give their full weight to other aspects of education. I find, from long experience—and I do not think the hon. and gallant Gentleman the Member for Pollok (Commander Galbraith) will dispute this, although we are in opposite camps in politics—that decisions were regularly taken which were at variance with the local council. I hope that nothing will be done which will permit co-opted members of any particular party or group to have sufficient powers to make decisions contrary to the democratically elected members of the local authorities. I do not think co-opted members have a right to determine the educational policy in an area where there is a properly elected democratic body.
  I think that the administration of education in Scotland is on a very high plane. There are handicaps arising out of the war, which means that the machinery is not always working as smoothly as we should like. I am not going into the question of the lack of accommodation, as these matters have already been referred to. The intimate side of education is the task of the teachers, but I think that the wider administration is well looked after by the elected members.
  Mr. Westwood: May I remind the hon. Member that even the Coalition Government, in 1945, were anxious to get rid of the co-opted member, and that it was the Caretaker Government which dropped the administrative Clause already referred to today?
  Mr. Carmichael: The co-opted member remains. I was trying to stress that the power is in the hands of the Secretary of State for Scotland in regard to the divorcing of these committees from the councils. However, I want now to pass from that matter.
  Do not let us over-emphasise the deterrents to education. I think that we are advancing. The Secretary of State made two important points; firstly, that the health of the child, measured in weight, was better today than at any time, and, second, that the health of the child, measured in height, was better than ever before. We on the Socialist benches have always contended that by giving a child a healthy body we are taking the first step towards giving the child a healthy mind. It will be a very sad reflection on this House and on the Government if the generations coming out of childhood into manhood are not a great advance even on our generation.
  6.37 p.m.
  Mr. Alex. Anderson: I count myself fortunate in being able to join the great company of educational experts. Until I came to the House, it was my function to be one of the drudges of education who pumped into children a curriculum imposed from outside by those who had been elected by the community. The course of this Debate has shown that we have not progressed very much further from the discussions we used to follow so eagerly in our education committees. A good deal of irrelevant matter has been talked about today. Hon. Members have spoken about the benefits of school dinners, of milk in schools, better classrooms, and better types of teachers, which are all important. It is true that the children should be well fed if they are to take advantage of their education. It is important that buildings should be adequate and that teachers should be properly trained, but the most important thing of all is what the children are to be taught, and only one hon. Member has made any slight reference to school curricula. It is what we teach our children today, that will decide the type of citizen we shall have in this country tomorrow.
  I wish to give a brief picture of education in our schools. Our children go to the infant schools at five years of age. They get an excellent infant education. Classes are small, and efforts are made to

  1101
  have the school rooms nicely decorated and suitable for the job. We have specialised teachers. They teach children quickly to read by a phonetic method, and at the age of seven, the child has progressed so far that he is a constant wonder to his parents, and is often able to ask awkward questions which the parents find difficult to answer. But, having left the infant school, the child passes to the primary school and for five years works in a different environment—overcrowded classes, overworked teachers, and an obsolete curriculum. Two valuable years of the child's life are spent in teaching him that plough is "plow," that cough is "coff" and that though is "tho." Another year is spent in teaching the child an obsolete system of notation, and at the same time there is insistence on the benefits of scientific training, so that when the child goes to a secondary school he first of all has to acquire knowledge of a decimal system, as a supernumary, which, finally, supersedes the old system of notation. No educationist, no Secretary of State has yet had the courage to face up to the question of simplified spelling, yet after wasting three years on these obsolete things we wave flags and beat drums, because we have raised the school leaving age by one year.
  At the age of 11 plus, the child, whose parent is often much more ignorant, has to decide whether he will be a technologist or a professional worker. I am quite certain that the Secretary of State for Scotland, at the age of 11 plus, did not deliberately decide that he would be Secretary of State for Scotland, and not the Archbishop of Canterbury. Every child in our schools, or his parent for him, has to make a decision at 11 plus. I submit that that is far too young an age. It is impossible to decide with a child who shows diverse abilities, and say what his future should be. At the age of 11 plus we put these children through the education riddle, and a certain number of them eventually qualify as being fit to benefit by secondary education.
  Of course there are some incorrigibles who, because of mental inability, do not qualify. I have often wondered what became of these people. Now my hon. Friend the Member for North Lanark (Miss Herbison) tells us that some, whose parents had the money, bought their way into fee
  1102
  paying schools. From internal evidence, both of grammar and of content, I had always suspected that an undue proportion of these became journalists and that one or two, even less gifted, became newspaper proprietors; some became politicians and a few, particularly ungifted, found their way even to the Front Bench. But the great mass of children of 11 years plus come up in a great tide to the secondary schools. A handful will be the bosses; they will take academic courses, and go to universities. Another handful will diverge, and become technologists, but the great bulk will go to what the Secretary of State calls secondary education. That is the sixth name which that type of school has had in my generation. Actually, 75 per cent. of these children will go to schools inferior in construction, staffed by teachers of lesser qualifications, who will be paid less, and who will teach a different type of curriculum.
  I do not believe that the function of a school is to be the handmaiden of industry. The duty of a school is not to turn out docile people who will work for given wages. It is to turn out intelligent, thinking, citizens. I believe that every child who passes the school leaving examination should go to a proper secondary school and not a mock secondary school, and get the same courses as other children at other schools. Divagation should come later. We shall have children of 11½ to 15 in our schools who will have acquired, by that time, the tools with which they can educate themselves. What are we going to teach them? Are they to be taught an overloaded curriculum which makes them neither good citizens, scholars, nor workmen?
  The biggest condemnation of schools today is the circulation of the penny newspapers. If the schools were doing their duty, thousands of readers would take the place of the millions who read these papers. Today, we have an opportunity to give our children a cultural background. In these days it has become common for everybody who is a laboratory attendant to become classified as a scientist. I believe that the best education is to be obtained from the classics. One thing in this world we need is an appreciation of the beauty of the Greek and the law and discipline of the Roman. I do not believe that teaching classics to children from 12 to 15 should follow the old lines. I remember my own course,

  1103
  which was purely classical. I sweated and worried translating from English into Latin and Greek, which was of no use to me, but I found joy in translating from Greek and Latin into English.
  I believe that it is not beyond the wit of educational experts to devise a curriculum which would provide for culture and preparation for life, while, at the same time, preserving a proper proportion of utilitarianism which would fit people for industry. I urge my right hon. Friend the Secretary of State to think carefully over the 11 plus bar in a child's life. I urge him to watch the child without wealth, and the child with careless parents, to give that child its opportunity. I would prefer that he set schools and teachers free to perform their proper task, because there is nothing in the world so dangerous as people who are ignorant and easily led.
  6.49 p.m.
  Mr. Niall Macpherson: I am sure that in all parts of the Committee there will be a great measure of agreement with the eloquent speech which we have just heard from the hon. Member for Motherwell (Mr. Alex. Anderson). I do not wish to follow him in the few minutes that I have at my disposal, except to say that we are all agreed that the main purpose of education is to create good citizens, and not make children into this or that type of tradesman or skilled artisan.
  There were, I thought, one or two rather striking omissions from the speech of the Secretary of State with which, I hope, the Under-Secretary will deal when he replies to the Debate. The right hon. Gentleman made a passing, although very laudatory, reference to the authors of two Reports we have had this year on secondary education and primary education, but he said very little about how he meant to implement those Reports. We have heard a good deal about the recommendation regarding the concentration of multilateral schools, but little from the Minister himself. There are many parents of boys and girls who are wondering what kind of examination their children will have to pass on leaving school. The right hon. Gentleman did not say anything about that, and I hope that his hon. Friend will say something in his reply.
  1104
  Another question about which, I think, hon. Members must by this time be beginning to agitate themselves is that of junior colleges. We are enormously handicapped at the present time owing to building difficulties. I hope that it will not be suggested that junior colleges should be set up "more or less on paper" and possibly carried on in premises which are specially constructed for schools. I hope that the Under-Secretary will have something to say about our junior colleges, because this matter arises out of the 1945 and 1946 Acts. I am certain that I shall have the assent of the whole Committee when I say that we very much hope that these sections of these Acts will not become a dead letter as they did in the case of the Acts after the last war.
  There are two points with which I wish to deal rather particularly. The first was referred to by the hon. and gallant Member for East Renfrew (Major Lloyd)—the overloading of staff and particularly headmasters with administrative duties. It seems to me an extraordinary thing that headmasters should be chosen to a large extent for their attainments in scholarship and their capacity as teachers and that, as soon as they become headmasters, they should immediately become administrators. If they are to be in a position to keep real contact with their pupils, both from the point of view of education in character and also from the point of view of advice as to the careers which those pupils are to follow—because, undoubtedly, under the new regulations for the payment of fees for their education, education authorities are bound to consult headmasters on the suitability of careers that are selected by students—they must be in a position to advise at first hand on them, and they must know the pupils. Undoubtedly, they are going to have a large say in the placing of pupils in jobs, whether directly or indirectly, and if they are to perform these functions they must not waste their time in looking after all the multifarious activities which are associated with a school at the present time. We know that they have travelling, feeding and clothing considerations which involve a tremendous amount of administrative work.
  If they are to do that, I can see only one reasonable solution, and that

  1105
  is to apply in some measure the lesson of the Forces. After all, we may say that a headmaster is responsible for the transport arrangements, feeding and so forth. Of course, he is responsible, but so also is a commanding officer in a battalion responsible for the welfare and moral and physical wellbeing of his troops, in addition to the stores and everything else that is on his charge. He has both an adjutant and a quartermaster to help to look after some 800 or 900 men. Would it not be a good thing to create an educational administrative staff? There are employees in the schools who assist the headmaster, but because they have not the status required, the headmaster has a great deal more to do with the actual details and routine than he would otherwise. I hope that in the not too distant future that may be considered.
  The second matter with which I wish to deal is of some importance, especially in rural areas. I would like to draw the attention of the Committee, first of all, to the report of the Advisory Council on Education in Scotland. In Paragraph 628 they state:
  "But the most serious deficiency of all is in the meagre provision for advanced technical education whether on the mechanical or on the agricultural side."
  Having myself had a classical education, and I hope having derived some measure of comfort from it, I am a strong supporter of the classics and humanities. That does not mean that where conditions are favourable, there should not be a very definite effort to support the technical, and particularly the agricultural, side of education. The Report goes on to refer to the very small number of pupils who are presented annually for the senior leaving certificate in agriculture. Apart from the Wallace Hall Academy, Dumfries, only four such certificates were obtained in higher agriculture in the years 1938 to 1942 inclusive. The Report recommends that education authorities should either singly or jointly set up for appropriate areas or regions senior secondary schools specialising in rural, domestic and technical courses, but not general or academic courses, leading to school and higher school certificate presentation. It goes on to say that attached to such schools there should be appropriate hostels.
  If agriculture is to be run on sound lines in this country, it is obvious
  1106
  that those running it, and those taking part in it, should have a proper scientific background, otherwise agriculture will not generally be progressive. Facilities should certainly be provided in the secondary and high schools in predominantly rural districts for the study of science which is given against a favourable background. The Report objects to the words "agricultural bias" but I think it favours "rural background" or some similar phrase. I do not advocate that what is taught to school children in predominantly rural districts should be in any way designed to keep them in those districts. There must be the possibility to go out and reach out for a career of one's own, but I think that there are few careers that would not benefit, and which have not benefited very largely in the past, from a knowledge of nature. In my view, the advantage of a country child learning science with an agricultural bias is that their studies can be continually carried on in what they are seeing and experiencing in their daily lives. I should like to see this extended also to the town child.
  There are in my view three major obstacles to that at the present time. The first is that there are far too few men and women qualified to teach these subjects. I believe that almost every teacher in the country should be capable of giving this rural bias, and it would be highly desirable if they attained a certain standard in their own school leaving certificate in agricultural science. Here we are in a vicious circle. We can never get such teachers, because there is no one to teach them at the present time. A very interesting paper was written by Dr. J. W. Patterson, former Professor of Agriculture and then Vice-Chancellor of Perth University in Western Australia, in which he showed how they built up the study of agriculture in Western Australia by making use of ordinary science teachers and enabling them to have text-books at their disposal from which they could give the appropriate bias, to the point where now almost every school in Western Australia is presenting students for examination in rural subjects.
  I will just mention very quickly it I may the other two obstacles which seem to me to exist. The first is the building and equipping of hostels and I hope that it will be possible in the future for those

  1107
  education authorities in the richer urban centres to get into touch with education authorities in the rural areas and make arrangements by which pupils will be taken from the towns and given an education in the country, thus enabling hostels to be set up which predominantly rural councils would not be able to afford themselves. The last point, which is a very important point, is that there is a great obstacle at the present time to agricultural science being recognised as a subject for the purpose of entrance to universities. In the Report of the Advisory Council on Education in Scotland there was a strong recommendation that it should be so, and I would urge the Department of Education to get into touch again with the universities and try to reach a compromise at least on this, so that a subject may be presented which need not necessarily be called agriculture, but may simply be science with an emphasis on agriculture.
  7.2 p.m.
  Lieut.-Colonel Elliot: It is always true that the Debates on Scottish education are Debates with a character of their own. There is no doubt that we cannot keep politics out of any argument in which Scotland and Scotsmen are concerned, but the interesting point about Scottish education is that one is never quite sure from which side the politics are coming. Of course, some of the old familiar flags were raised again, and one or two coats were trailed. The hon. Member for Bridgeton (Mr. Carmichael) for instance, raised the question of fee paying. In my view, it is democratic that there should be a charge as it allows the parent freedom of choice of school. What is more, I cannot understand the argument that fee paying should be done away with. It mixes up the classes so that the so-called upper classes send their children to schools where they would mix with other children. To do away with fee paying for those schools means that those parents will send them to other schools where no mixing takes place at all. To advocate that as a democratic step seems to me to be a paradox, which I cannot understand. I have therefore always on this question of fee paying held the view that it was a good thing educationally and democratically. We had speeches such as the admirable one from the hon. Member for Mother-
  1108
  well (Mr. Alex. Anderson) who raised, if that is possible, my opinion of the family of Andersons. It seems to me that he must have been reading the speech delivered by my right hon. Friend the Member for the Scottish Universities (SirJ. Anderson) in Edinburgh. I do not think there is a line of his speech to which any of us on this side of the Committee could have taken the slightest exception.
  The difficulty about all this, is of course, the crushing of this vast subject into the relatively short space of time which is available. There are one or two points which I should like to make and one or two general observations which I should like to offer to the Committee. The first of the points on which I should like the Joint Under-Secretary of State to give us some information is with regard to health. The hon. Member for Motherwell said that he considered that while meals and milk were of great importance the really important thing was what the children were going to be taught, which was the sound, orthodox dominie point of view which has existed in Scotland for five or six hundred years. But I am a little iconoclastic about that. I think perhaps a sound body is more important than a sound mind, and therefore, my sympathy is with the hon. Member for Tradeston (Mr. Rankin) who complained about the eroding—if I may use that word—the whittling away, of the school playground space by various authorities and town planners round about. When it came to the supreme example which he gave of a new school whose playing field is to be eight miles away, it seemed to me to be too extravagant an example of the merits of town planning. I do not think that a playground eight miles away from a school is any real advantage.
  Mr. Westwood: And the present Secretary of State for Scotland agrees with the right hon. and gallant Gentleman.
  Lieut.-Colonel Elliot: That simply emphasises and reinforces the statement that I made at the beginning of my remarks that we can never tell which side of the Committee the politics are going to come from in this Debate.
  There are other things which the Secretary of State said which did not, if I may say so, bear out that view, because, while it is important to have space outside the school, it is also important to have space

  1109
  inside the school. The Secretary of State has plumped for the raising of the school leaving age. He himself has admitted that that meant a postponement of the reduction in the size of classes and that the teaching staff which he is getting together is a staff for the extra year and not primarily for the reduction of the size of classes. I think that is a decision which will be looked at with considerable uneasiness.
  I had occasion recently to look over the statistics of epidemics of scarlet fever and measles both in Scotland and in England. I can only refer in passing to the figures for England. The figures for London show the biennial swing to which all educationists are accustomed. That biennial swing suddenly stopped when the evacuation of school-children took place in 1939 because of the fear of the blitz. When the school population was dispersed the swing of the epidemics in London disappeared almost immediately. The Scottish figures which I recently obtained in reply to a Question, showed a similar tendency, though not so pronounced because the closing-down of the schools was not so complete in Scotland. But the interesting thing about the figures was, that even in Scotland there was a change over entirely after the evacuation, there was a different rhythm in the case of measles and of scarlet fever. It is clear that crowding played a great part in the spread of these diseases.
  It is important further to remember that no matter what anyone says about nutrition we are all agreed that the adolescents are tightly pressed for an adequate diet. All nutrition experts are agreed upon this, and all the more so since the scales which have been brought out recently indicate that if a person in heavy work cannot get access to canteens—and there are a great number of them in industrial life—the only way that he can make up his diet short of eating ten to fourteen pounds of potatoes every day which, even without considering the obtaining of the potatoes is an absurdity, is to draw on the family pool which, in effect, means drawing on the rations of the women and children. It may well be—and this will be of great interest to the hon. Member for Coatbridge (Mrs. Mann) who says that adolescents eat a great deal more than their fathers—a serious thing to have to balance the man's rations by drawing on the rations of the younger members of the family.
  1110
  These factors certainly increase the danger of the mass infections which are going about just now, and in Scotland the mass infection of tuberculosis in particular. The English figures of tuberculosis are more satisfactory. They show a certain decline. It may be that they show a real decline in deaths over the prewar figure. But the Scottish tuberculosis deaths have never yet come down to the figures of prewar. That is a thing at which we have to look very carefully, especially when we are running our adolescents on so very narrow margin of safety. For that reason I deplore the decision of the Secretary of State to go all out now for the raising of the school age while neglecting for the time being the reduction of the size of the classes. I listened with some apprehension to his statement that of the 1,500 rooms—I think that was the figure—which he desired for the purpose of class accommodation he had 1,100 promised, 634 started, but none yet completed. The danger of overcrowding existing premises will be quite considerable, the more so since some of these new reforms are not having exactly the results which we had expected from them.
  I read with some interest, as we all did, the Health Report and the Education Report, and I may say in passing that I agree very much with my hon. Friends that now in the middle of July we should have a Health Report a little more up to date than for the year ended 30th June, 1945.
  The Deputy-Chairman (Mr. Hubert Beaumont): I would point out to the right hon. and gallant Gentleman that we are dealing now with education and not with health.
  Lieut.-Colonel Elliot: May I call your attention, Mr. Beaumont, to the fact that this Report deals both with health and education. The Health Report, as you will see, deals with both matters.
  The Deputy-Chairman: We are not now concerned with the Report, but are dealing with Estimates relating to education.
  Lieut.-Colonel Elliot: Yes, Mr. Beaumont, and I am about to confine myself very strictly to that part of the Report which deals with education, namely, the supply of school milk. This

  1111
  is very closely bound up with the school. The interesting part about this new reform is that the extension of the tree milk has led to a reduction of the amount of milk going to 14 per cent. of the children in the schools. The Committee will see on page o of the summary report on education that from 6th August, 1946, the quantity of milk was restricted to one third of a pint per pupil per day, and that, according to the table, from the years 1943 to 1945 there were 14 per cent. of the children taking more than one-third of a pint per day, a figure which runs down to 0.5 per cent. as soon as the free milk supplies come in.
  I should be glad if the Under-Secretary would explain that figure. It is no doubt due to the fact that it was not possible to obtain larger supplies of milk, but when does he expect to be able to raise the supply? Obviously, the 14 per cent. taking a larger supply than the one-third of a pint per day were doing so because they or their parents considered that it was worth while and would do them good. This has been cut off, and the position of those children is, to that extent, worse than it was before the free milk came in. Although the Secretary of State pointed out with justifiable pride that the heights and weights of the children had continued to increase, yet I think he was exaggerating a little when he put that down to the free meals. He will see that in 1943 the percentage of children in schools taking meals was 21, and in 1946, after the introduction of free meals, it was 32 per cent. That is not a very great increase, and I do not think that it bears the weight of the argument the right hon. Gentleman put upon it.
  Mr. Westwood: The right hon. and gallant Gentleman will remember that I coupled free meals with the supply of free milk.
  Lieut.-Colonel Elliot: Yes, but I have just been dealing with the supply of free milk, and, after all, even with the supply of free milk the increase in numbers went up only from 67.3 to 80 per cent. Neither of these figures would stand the weight of the argument which the Secretary of State sought to place upon them. The fact is that the general rise in height and weight in the school population of this country was a phenomenon which had been going on long before the war and
  1112
  during periods for which many other Secretaries of State were responsible. Indeed, from the figures given, it seemed to me that the rise had actually slackened recently because the increase, both in height and weight, during many of the periods I remember was more striking than that to which the right hon. Gentleman called attention. It is quite true that it is very creditable that a continual rise in height and weight has been maintained, but I do not think the rise is as dramatic as the Secretary of State would have us believe.
  Turning to more general considerations, the odd fact is that although we are continually reforming Scottish education everyone says that it is not as good as it was. That is a very paradoxical result to conclude upon. The hon. Member for Motherwell said that the condemnation of the educational system of our cities was to be seen in the millions circulation of the very cheap Press. That circulation is certainly not diminishing. If it is true that we are constantly improving our education, why is it that not all of us are satisfied with the results? It seems to me that there are two reasons. One is that the greatly increasing pressure of inflation on the incomes of the middle class is driving a great many people out of education and teaching into business, and into other fields where the rewards are higher. That tendency is increasing at present, and has been the subject of a good deal of complaint in England. I think it is also taking place in Scotland. Headmasters, specialists and form masters are no longer receiving the honour, or, let us be frank, the income in comparison with other members of society which they received in the old days. It is certainly true of professors and I am sure it is true of headmasters and senior teachers generally.
  There is a drain of the high potential intelligence and character away from the field of education. Somehow, somewhere, and not only by leaving it to the local authorities to negotiate with the teachers, it will be necessary to restore the gradient again and to restore the position of the people who are going to do one of the most important jobs in the country—the teaching of the young to be citizens of such a country as ours. Their position must be restored to something like that of the dominie of the old days, so that he can feel that he is in no way

  1113
  inferior to other sections of the community in social prestige, honour and, for that matter, in the matter of income also.
  Mr. Scollan: Can the right hon. and gallant Gentleman say to which part of the old régime he referred? Does he know that in the days of John Knox the dominie had to work as potman in public houses to make up his weekly wages?
  Lieut.-Colonel Elliot: A lot of very (Ricer things happened in the days of John Knox. John Knox and the other ministers played at bowls on Sunday. They would certainly be debarred by the Presbytery from continuing their charge if they did it now. I am not going to say what the position of the potman was, but we all know that in Scotland the proudest thing in the world that any boy could look forward to or that any mother could hope for her boy was that he would eventually be able to "wag his pow in a poopit." The position of professor was a high and dignified one. It was well paid as compared with the rest of the community. These things are diminishing now. Neither the pensions nor the lump sums with which these people go out of their jobs are able to maintain them at anything like the standard of living to which they would have been accustomed to look in the past.
  Our society is suffering from the enormous severance of the natural and normal education of the young person who was taught by his father or by some elder person in the almost insensible way in which it was possible in the old days, when the boy followed his father in the fields and the smith's son would hand his father the hammer and could eventually learn, himself, to become a craftsman. Nowadays, owing to our industrial structure, all that has been cut off. A young person cannot go into a factory or a workshop. Our society is still looking for some way in which to substitute another education for that which has been severed by the conditions of our modern life. The only thing on which I quarrel with the hon. Member for Motherwell is that he seemed to think that an education which was not the classics was not true education. The essence of education should be that somebody should be applying himself eagerly to the subject which is being taught.
  Many boys who will spend an indefinite time tinkering about with a radio set, a
  1114
  model aeroplane or a motor bicycle, will go to sleep if anybody tries to teach them French irregular verbs. For those whose task it is to teach such boys French irregular verbs it is a little disappointing to see how the boys will flee from the classroom and apply themselves with the utmost diligence to a different and a very difficult form of education of their own, of the kind they get in workshops, tinkering about with tools. We have not solved that problem, or are we likely to solve it by the proposals which the Secretary of State put before us.
  I can only say that these are matters about which we in Scotland are now keenly anxious. We have not yet found a way, but we shall continue to discuss them, and we shall need to continue to do so for years to come it may be. But if we continue to discuss them in the friendly and frank way in which they have been discussed in this Committee tonight, it may be that we in Scotland will be among the first of the nations to come to the solution.
  7.24 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser): I think it will be agreed that we have had a very useful discussion and for a change there have been no complaints on either side about the scope of the discussion. The right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) asked me to say a further word on the position regarding milk in schools. He quoted from the Annual Report, and he was a little perturbed to find that the number of children taking more than one-third of a pint, as a percentage of the total receiving milk, had gone down considerably in 1947, as against 1946.
  Lieut.-Colonel Elliot: In 1940 as against 1943.
  Mr. Fraser: It has gone down still further in 1947 as against 1946. I thought the right hon. and gallant Member made reference to the latest figure, but he could not have done so, as he was quoting from the 1946 Report. The figure continues to go down. It went down considerably after the introduction of free milk in schools because of the vastly increased number of children taking milk in schools. The fact is that we have to limit the children taking more than one-third of a pint to those who

  1115
  could be found to be in need of more than one-third of a pint. We find that 485,000 children were taking milk in schools in February,1946,but no fewer than 580,000, or an increase of 95,000, were taking milk by February, 1947. Only 5 of the total are now taking more than one-third of a pint. Those children are the children who need extra milk. We should be justified in assuming that the vast majority of that 95,000 additional children who are taking milk in schools are children who are in need of milk, and who did not get it before the introduction of free milk in schools because the parents could not afford the milk, or for some other reason.
  Mr. Stephen: Was the total amount of milk that was taken in 1945 larger or smaller?
  Mr. Fraser: It has gone up slightly over the earlier years. The vastly greater number taking it caused us to impose the condition about the provision of more than one-third of a point to any one child.
  A lot has been said in the course of the Debate today about the Government having taken what some hon. Members described as an unpopular decision to raise the school leaving age to 15 years. Fortunately or unfortunately, the present Government have no right at all to claim the credit for raising the age or to be given the blame, if blame there be, for the decision to raise the school leaving age. I well remember the decision being taken by the House of Commons in 1944, when the English Education Bill was being considered. The then Government proposed that there should be a provision in the Bill for raising the school leaving age to 15 years as soon as it was found practicable to do so. The House of Commons revolted and said that the Secretary of State for Scotland had been given that power in 1918, and up to the end of 1944 fie had never exercised it, and that there was no indication that postwar Governments would be in any greater hurry to introduce that provision than Governments in the interwar period.
  The House of Commons insisted that in the Statute of 1944 there should he a provision that the school leaving age should be raised to 15 on 1st April, 1946, or not later than one year thereafter. If we are to be criticised, it is only for not introducing amending legislation in this
  1116
  Parliament to negative or annul a decision of the Coalition Parliament. The decision was taken when there was a war on. We did not know how long the war would last. The decision was taken in 1944 and it was repeated in the Education (Scotland) Act, 1945, when the war was still on. Hon. Members opposite, if I remember aright, foresaw in 1945, when the war with Germany was brought to an end, that the war against Japan might very well continue for 18 months. Yet they insisted, together with the Labour hon. Members, that this provision should be put in the Statute. Now they deplore the decision of His Majesty's Government not to revoke a decision arrived at by the Coalition Parliament.
  Major Lloyd: The hon. Gentleman has put in a word which I never heard from these benches—"deplore" the decision. Whoever said that the decision was deplored? Surely, all that has been suggested is that there was a certain risk? Some may have used the word "gamble." "Deplore" is the hon. Gentleman's word and not ours.
  Mr. Fraser: Perhaps I do not use the same word as hon. Members opposite all the time, but this was referred to as "an unfortunate decision." If one hears this referred to as "an unfortunate decision" in a certain tone of voice, surely, it is not incorrect to place that interpretation upon it. I ought to give some further information to that given by my right hon. Friend about the provision of accommodation. Hon. Gentlemen have been uncertain as to our estimate of the additional classroom accommodation. We estimate that no fewer than 1,850 additional rooms will be required, including classrooms and practical rooms. As my right hon. Friend said in his opening speech, at the 15th of this month preliminary proposals covering the erection of 1,341 had been submitted by education authorities and the Ministry of Works had received final instructions to proceed with 1,142. He also said that 634 are in course of construction and that none has yet been completed. The fact is that one or two have been completed, but they are not listed as having been completed because they have not as yet been handed over to the education authorities. We estimate however that about 270 additional rooms will be required by 1st September next

  1117
  but we do not anticipate that we shall have 270 completed by that date. We anticipate that about 150 might be completed by September and that the total required by September will be completed by about the beginning of November.
  We are concentrating on getting the class rooms and practical rooms completed in certain danger areas. We have what we call danger spots about the country where the need is greater than in other parts. I might mention particularly Perth and Dundee. I have been very worried about Perth and Dundee, and a long time ago I had consultations with them. I asked them to come and see me rather than wait for them to ask to be received by me. I think that was the case in both instances. It was certainly so in the case of Dundee. Those authorities, particularly Perth, were a little perturbed about the position inasmuch as they had some big housing schemes a bit out of the town and did not want to provide even temporary hutted accommodation in a part of the town which would in three, four or five years' time be considerably removed from the part from which the children would be coming to school. They therefore wanted to merge the work of the schools building programme into their other housing programme, and the plans had to be made concurrently and at the one time. In some cases, including Perth and Dundee, they did not find it easy to make good their needs by the provision of this temporary accommodation.
  Commander Galbraith: May I interrupt in order to try to get the position clear in my own mind? I think the hon. Gentleman has told the Committee that 1,850 rooms will be required. Those rooms are all to meet the increase in the population of the schools arising out of the later leaving age? Two hundred and seventy will meet the position as at September of this year, of which 150 will be ready? Is that correct?
  Mr. Fraser: That is correct. Since I have indicated that we do not at this date expect to have the requisite number of rooms completed by 1st September when the first influx of additional school population comes along, we have to ask ourselves what we are going to do in the circumstances. We want if possible to
  1118
  avoid any part-time or half-time education. We want to avoid that, if possible, and to avoid that we have asked the authorities to do their nest, where the need is great and where it looks as if gross overcrowding or part-time education will result, to acquire very temporary accommodation. It does not seem to me to be wrong that we should ask the authorities to acquire by agreement church halls and other places in which to take their classes for a month or two until the hutted accommodation is completed for them. I have some reason to believe that the authorities who are in greatest difficulty are in fact proceeding to acquire such temporary accommodation.
  We have a programme of other school building going on. At the present time the authorities are hurrying on with the completion of unfinished buildings, buildings started before the war and discontinued and now being completed, generally speaking, on austerity lines. Some new permanent buildings, again built on austerity lines, have been approved by the Department, and work on them should begin at a reasonably early date. These schools will not, of course, be ready in time to provide accommodation this year, but some of them will be ready in time to take on some of the influx of pupils coming along in the course of 1948. The authorities will make an annual payment to the Department of 8 per cent. of the cost.
  Lord John Hope: I did not realise that the hon. Gentleman was leaving the part of his speech dealing with buildings. Would he answer the question I put to him about the allocation of bricks for building?
  Mr. Fraser: I would have done so if the hon. Gentleman had waited a few moments, but I do not mind his interjection. The bricks position is easier now than it was at one time. Local authorities have been informed that they can make use of bricks for their building programme, and they are in fact doing so at the present time. We prefer bricks to the cement blocks which they have been using.
  Sir T. Moore: Before the hon. Gentleman passes from that, will he say what he is doing, or what can be done to provide the necessary number of textbooks for the additional children?
  Mr. Fraser: I do not think that question has been raised before, and I hesitate to interrupt my replies to hon. Members who have already made speeches to answer any new points.
  Sir T. Moore: But I made that point in my speech.
  Mr. Fraser: I am sorry, I had to go out to get some sustenance when the hon. and gallant Gentleman was speaking. We are, of course, aware of the great need for textbooks, and my right hon. Friend and my right hon. Friend the Minister of Education are in the closest consultation with the President of the Board of Trade in the matter. Questions are asked in the House from time to time, and I assure the hon. and gallant Gentleman that we shall not be easily put aside when making our representations in favour of getting the requisite amount of paper to provide the textbooks required. I was proceeding to say that the authorities, to make payment for the hutted accommodation provided by the Government and erected by the Ministry of Works, will make an annual payment to the Department of 8 per cent. of the cost of the huts so erected. I hasten to say, however, that these payments will attract State grant and, therefore, although it will look as if the local authorities were paying 8 per cent. per annum of the cost of the huts erected, the ratepayers will only be paying really about 4 per cent. of the cost of these huts per year.
  I wonder if I could use the time of the Committee for two minutes to tell hon. Members what further we have done to secure that the organisation and curriculum of the schools will be adapted to meet the new position arising from the raising of the age? I think my right hon. Friend made some reference to the circular we sent out on the 20th February this year. That circular, if I may quote it, said:
  "The Secretary of State regards it as essential that the additional period of schooling should not be for the pupils concerned merely a period of marking time, but that they should get—and be recognised by their parents to be getting—something not available to them within the limits of the present leaving age. This additional period, therefore, should be used to provide a real culmination of the pupils' school education, by which the acquirements of earlier years are extended and integrated and at the same time, through the adoption of a realistic approach, are related to the needs of the
  1120
  everyday world where the pupils must in due course play their parts alike as workers, as citizens and as individuals."
  Further in the circular, it is said:
  "It is of particular importance that all pupils who are required to continue at school for an additional school year should receive adequate training in practical subjects, including science. It is appreciated that shortage of accommodation may make this difficult, but the fullest use should he made of existing accommodation—including accommodation in neighbouring schools to which it may be found practicable to send pupils for instruction. If, notwithstanding, the normal amount of instruction cannot be provided for all classes and if some temporary curtailment of that amount proves to be inevitable, it should take place so far as possible in the earlier years of the course rather than in the new final year."
  I quote from that circular merely to make quite clear to the Committee that my right hon. Friend wants, if nothing else, to secure that this new extra year of school for 14-year-olds will be a useful year, and will not just be a case of marking time.
  A good deal has been said today about the size of classes, and I should remind the Committee that the decision to make the raising of the age a priority over the reduction in the size of classes was a decision taken by the House of Commons which my right hon. Friend is merely endeavouring to carry out. However, he is not unmindful of the desirability of reducing the size of the classes. Perhaps I should say that the Day Schools Code requires that, except in special circumstances, the number of pupils on the roll of any class under one teacher shall not exceed 50 in an infant or primary division, 40 in the first three years in the secondary division, and 30 in the fourth and subsequent years. My right hon. Friend, of course, would like to get away from that, and he hopes to do so in the not' far distant future, but his immediate aim is to reduce the 50 mentioned in the Code to 40, to make 40 the maximum number in an infant or primary school and, in certain circumstances, to make it 30, and to make 30 the maximum size of class in the secondary schools.
  I sometimes feel—and today one got that impression—that the position is thought to be slightly worse than it is, although I am not saying it is good. The over-sized classes in all the divisions under this present Code average 3 per cent. of the total, and in

  1121
  primary divisions where the position is always felt to be worse, the percentage of over-sized classes is 1.6. I wonder if I may give some further figures? I find that the number of classes under education authorities in the whole country is 22,081, the number of primary classes altogether is 16,137, of which 4,839 are classes of less than 30 pupils, and a further 6,023 are classes of less than 40 pupils, so that just more than two-thirds of the total of primary classes have less than 40 pupils in the class.
  Commander Galbraith: But the hon. Gentleman surely recognises that the figures he has read out are far too high to give efficient teaching. Is some attempt being made to get these figures down?
  Mr. Fraser: Yes, I am trying to make clear that my right hon. Friend wants to bring them down and wants to introduce a new code as soon as possible, but he must have regard to the decision of the House to put the raising of the age first, though we must not be unmindful of the desirability of reducing the size of the classes. I also find that of the senior secondary classes, the fourth and later years, we have 801 in the country, 697 of which have fewer than 30 pupils, and, indeed, 391 of which have less than 20 pupils in the class. I give these figures to make it quite clear that not all the classes in the country have 45, 50 and 60 pupils. Nevertheless, we are unhappy about the percentage where the classes are still too big, and we must not relax in our endeavours to have them reduced substantially.
  The hon. and gallant Member for Pollok made some observations about the need for some delegation of responsibility for educational administration. As lie was making his speech, I remembered that some such provision is made in the Local Government Bill which comes later in the evening, and I picked it up and checked it to find that, in Clause 109, provision is made for the sort of delegation in the cities which he seemed to have in mind in the course of his speech.
  One or two hon. Members have spoken about the quality of the teachers under the new emergency scheme. I think my hon. Friend the Member for North Lanark (Miss Herbison) said that as far as she could learn the quality of the students
  1122
  we got under this scheme was very high. That is our information. Indeed, perhaps I should again refer to what my right hon. Friend said in his opening speech. He told the Committee the number of applications under the scheme and the number of acceptances and gave information in order to show the Committee that more than twice as many applicants came forward as were required. The Committee to which my hon. Friend the Member for North Lanark referred were able to exercise the greatest care in the selection; and training authorities agreed that the trainees under the emergency scheme were of very good quality.
  There have also been remarks about sites in Glasgow and playing fields and so on there. This is a local question of very great complexity, and not a little difficulty. It has already been the subject of discussion between Glasgow and the Department. My right hon. Friend has definite views on this matter which have been made known to the Glasgow authorities through the Department, and the Glasgow authorities can be in no doubt whatever as to what those views are. I was asked by one or two hon. Members —including my hon. Friend the Member for North Lanark, who made a most excellent speech—what my right hon. Friend was going to do about the Advisory Council's Report on secondary education. I would like to give expression to personal views on this matter also. Someone reminded me a few minutes ago that when the Education Bill was before the Committee in 1945, I made myself responsible for certain Amendments that sought to bring about the sort of change that has been advocated from different sides of the Committee today—changes based upon suggestions in the Advisory Council's Report. But my right hon. Friend is as yet unable to make a pronouncement on the Report. He is discussing the recommendations with the teachers, headmasters, and bodies interested, bodies who have regarded existing teaching in secondary schools and existing certificates as a test of educational training for certain occupations, and admission into certain institutions. The Committee will agree that my right hon. Friend should collect the views of these people before he makes any decision. We do not want to have any unnecessary delay, but we very much want, when a decision is made, that the decision should be the right one.

  1123
  I was asked by my hon. Friend the Member for North Lanark about the sum of £200,000 which is being spent on education of Poles. I do not think she would wish to be nationalist in this matter. It is true we are spending more proportionately than in England on the education of Poles, although I do not think we are going to spend so disproportionately as the present Votes suggest, because of certain decisions which have been taken about the setting up of educational establishments for the Poles. But we have a greater number of Polish ex-Service men in universities in Scotland proportionately, than there are in England. I have no doubt that is because we had a greater proportion of Poles billeted in Scotland during the war years when they gained admission to Scottish universities, those who were desirous of continuing their education, and able to continue their education in that way. In addition, we are required to provide education for Polish children under the provision of the Polish Resettlement Act, and a United Kingdom Committee has been set up to administer the education of those Polish children. I do not think any of us wishes to be nationalist and to instruct the United Kingdom Committee to ensure that we in this country educate precisely eleven-eightieths of the Polish children to be educated in the United Kingdom.
  The hon. Member for Bridgeton (Mr. Carmichael) asked certain questions about the presentations for the leaving certificate. The number of pupils so presented is determined by the headmasters themselves, and they are merely given some general guidance by the Scottish Education Department. I was also asked questions about agricultural education, and the hon. Member for Dumfries (Mr. N. Macpherson) asked if we could encourage the provision of rural education, education with a rural background? We are doing that, and are encouraging county education authorities to provide centres where courses can be given to young people for education in the correct rural setting. He also regretted that the Scottish Universities Entrance Board did not regard agriculture as a subject that would
  1124
  gain for them acceptance to the universities. The Secretary of State has already made an approach to the Board on the subject, and indicated his views, but he has no power to force the Board to change their policy.
  Mr. Snadden: Before the hon. Member leaves that point, I wish to put a question. Is. it not a fact that the Secretary of State has recognised, or accepts, the Alness Report in regard to the degree course in agriculture at the universities?
  Mr. Fraser: My right hon. Friend is not empowered to give any instructions. Parliament has not yet decided that he should be given such power, and he has not got it.
  A good deal has been said about the development of technical education, and the need for such development. We all regret that Scotland did not make more progess in this direction in the interwar years, but I think it is to the credit of the Scottish people that today all sections of Scottish opinion seem to be favouring a rapid and considerable development in technical education facilities. One finds the trade unions and employers co-operating with education authorities in the building up of those facilities. We find that the release of apprentices required to go to school, where they will not only get a narrow vocational training but also quite a general education, is for ever on the increase. At the present time no fewer than 5,457 young people are attending the release classes. We must continue to see this new development expand, and it is already possible to say that we have both the trade unions and the employers in Scotland co-operating with the education authorities in building up these new facilities.
  Mr. Westwood: I hope it will be for the convenience of the Committee and will meet with their approval, if, in order to enable us to proceed to the next Estimate on the Order Paper, I ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  SCOTLAND (FISHERIES)
  Motion made, and Question proposed,
  "That a further sum, not exceeding £40, be granted to His Majesty towards defraying the charges for the following services relating to Fisheries, Scotland, for the year ending on the 31st March, 1948, namely:

  Civil Estimates, 1947–48.

  Class VI, Vote 23, Fisheries, Scotland

  £10

  Class VI, Vote 24, Herring Industry

  £10

  Class X, Vote 3, Ministry of Food

  £10

  Class VI, Vote 1, Board of Trade

  £10

  £40 "

  —[Mr. Westwood.]
  8.2 p.m.
  Sir Basil Neven-Spence: I thank the right hon. Gentleman for having made a gesture in this matter by withdrawing the previous Motion. It is a pity we have such a short time in which to discuss the fishing industry, in view of its great economic importance to Scotland, and the contribution it can make to our food supplies at the present time. On 30th June the Chancellor of the Exchequer made, in this House, a statement of extreme gravity. He said:
  "… in some cases imports may be restricted by shortage of supplies, and the possibility of cuts in particular foods, including rationed goods, cannot be ruled out."
  The gloom with which that statement was received on both sides of the House was little relieved by the succeeding remark that we might perhaps count on increased imports of animal feedingstuffs. Animal feedingstuffs can be converted fairly quickly into eggs and butter, much more slowly into mutton and still more slowly into beef. We have had a cut in the protein ration in the form of a reduction in the meat ration. It is a foregone conclusion that further cuts will come in the days ahead. The Chancellor went on to say:
  "In order further to reduce our adverse balance of payments, we must make available for export an increasing proportion of our production …"— [OFFICIAL REPORT, 30th June, 1947; Vol. 439, c. 961.]
  Both those statements have a considerable bearing on the fishing industry.
  I do not think that the Government have yet got across to the man in the street the grave threat to the food supplies of this country which faces us. I noted in
  1126
  "The Times" this morning, a leading article which stressed the need for winning great quantities of food and coal from the soil. Considering that we draw hundreds of thousands of tons of first-class feeding-stuffs from the sea, it is rather remarkable that the writer did not refer to the possibility of increasing our food supplies from this source. One of our objects in selecting this subject for Debate today is to probe the policy of the right hon. Gentleman with regard to food production from the sea, and to expose shortcomings which have come to light in the course of the past year, and to stimulate him to make greater efforts. The Government have been at pains to tell us what they are doing, or failing to do, in the way of increasing food supplies for this country. We would like to see a far more determined effort to increase food supplies by stimulating the agricultural and fishing industries, and more particularly the fishing industry, which is of such great economic importance to Scotland.
  To take the white fishing industry first, the right hon. Gentleman will no doubt tell the Committee, with pardonable pride, that during the first five months of this year British fishing vessels have landed at Scottish fishing ports 15,000 tons more of white fish than they did during the corresponding period of last year. I want to warn him that that figure is not necessarily so satisfactory as it looks, and also that Scottish trawlermen who operate in the near and middle waters hive been complaining that the yield from those waters is falling off. That means that more effort and expense will be entailed to catch a very much smaller number of fish, until at last production will become uneconomic. In other words, the grim spectre of over-fishing is rearing its head once more. The Government were warned that this would happen. As far as I know they have taken no active steps to deal with the situation. A fishery ought to be managed on exactly the same principle as a forest. The aim should be a sustained yield. In other words, it should be managed so that the correct proportions of fish of different ages are present and preserved in the fishing ground, because it is in that way that the largest quantity of mature fish can be taken each year without reducing future yields.
  The last thing I should urge the right hon. Gentleman to do is to increase the

  1127
  taking of fish from the North Sea. I am concerned that we should not depress the opportunities for future yields from that area. That is a difficult problem with which to deal; control is necessary Even the scientists now admit that, though up to 1939 they were always opposed to it, the weight of evidence is in favour of control. What has the right hon. Gentleman done about this problem of over-fishing in the near and middle waters, because those waters are of supreme importance to the Scottish trawling industry? It was built to fish there, and is not capable of proceeding to the more distant grounds. Three methods of control are available to the right hon. Gentleman. All are necessary, but none of them is really being applied effectively; two are not being applied at all. They are, to control the size of the mesh used for taking fish, to control the tonnage of vessels or the landings of fish, which are much the same thing, and also to close successive areas in the North Sea in order that the spawning grounds may be rested, and the young fish given a chance to grow.
  What has been the result of the international conference which took place in the spring of last year? I know that a Convention was drawn up prescribing the minimum size of mesh to be used for nets, and also the minimum size of fish to be landed or sold, a very important point, which concerns not only the trawling industry but also the seine fishing net industry, because it is no use disguising the fact that the seine net fishing industry is just as destructive of immature fish as is the trawling industry. That Convention does not begin to operate until two months after the last ratification. I know that the Government have ratified it, but how many of the other nations which took part in that conference have done so? I believe that a considerable number have not. What pressure is being put upon our Government to put pressure on those Governments to come into line with us on this matter? I hope that the right hon. Gentleman will use the whole weight of his influence to get this done. It is an equally urgent matter, again requiring international agreement, that the nations interested in these near and middle waters should not build excessively large fleets of fishing vessels, which will only end in
  1128
  ruining the fishermen of their own nation, and those of the other nations who fish in those waters.
  The third remedy is to divide the near and middle waters into areas and to rest each of them in turn. Of course, that would involve adequate policing of the rested areas by the fishery protection vessels of the various nations concerned. It is obvious we cannot expect any great increase of fish in the immediate future from the near and middle waters. This subject also raises the question of the condition of the Scottish trawler fleet, which was built to fish in these waters. Before the outbreak of the war the Scottish trawler industry was in a very depressed state and the fleet itself was very far from being an efficient instrument. Eighty per cent. of the fleet were over 20 years old before the war. They have not grown any younger since then and these aged trawlers were literally scraping a living from the bottom of the North Sea from the ever dwindling supplies available. Because of their small size they could not exploit the far more prolific distant waters of the Barents Sea, the seas around Bear Island, the shores of Greenland and the remoter parts of the Norwegian coast.
  Hull exploited these waters and they got into difficulties partly because of unregulated landings but chiefly because they failed to devise and apply any satisfactory method of preserving the fish caught during the early part of the voyage. Thus they landed large quantities of fish inferior in condition and sold them for uneconomic prices, in that way depressing the prices for the whole fishing industry. Experiments have been conducted at the Torry research station in Aberdeen which have shown us how fish ought to be handled. It is for the Aberdeen trawling industry acting, I hope, under advice, guidance and pressure from the Minister, to apply the results of these experiments. They will have to build larger vessels so that they may take part in more distant fishing. We want bigger, faster, better equipped and more comfortable trawlers than the men have now. They must be provided with proper facilities for freezing the first half of the catch.
  There is a great opportunity for the Scottish fishing industry here. Hull has not done this yet. Why should we not leap into the breach and build the most

  1129
  up to date trawlers that can be built to bring back nothing but prime quality fish. Can the right hon. Gentleman tell us exactly what is being done about modernising the Scottish trawling fleet? Are any new trawlers being built? Is the industry able to find the money to do the job or is any advantage being taken of the Industrial and Commercial Finance Corporations? There is no time to be lost over this. In the very near future the Scottish trawling industry will find itself faced with severe competition from abroad. I saw an announcement that the largest trawler ever built for Iceland was launched in Aberdeen last week. That is the fourth modern trawler to be built for Iceland in Great Britain, and I am told that they have 34 on order at the moment.
  Where are they going to sell the fish which they catch? It is a thousand to one that they are aiming at the British market. What they will send to us, unless I am very much mistaken, will he prime frozen fillets. Already our fishermen are asking for restriction on the imports of fish. I do not think that we would be warranted in keeping that prime quality fish out of this country, certainly not in present circumstances, unless we could produce something as good ourselves and in sufficient quantity. I hope that the right hon. Gentleman is doing everything in his power to restore prosperity to our white fish industry by encouraging a rapid increase in its efficiency. I ask him particularly not to neglect our inshore fishing industry which is a very important part of our fishing industry. The inshore fishing industry catches one-fifth of the white fish landed in Scotland. We have every reason to be grateful to these hard-working and hardy men for the splendid job they did during the war in maintaining fish supplies as well as they could at a time when the trawlers were engaged elsewhere. A big problem faces these men in the lack of nets and gear. A very steep rise has taken place in the cost of gear. Their produce is superior to that of the trawling industry, but they are subject to the same maximum price control which allows nothing for the superior quality of inshore fish. I hope that the right hon. Gentleman will use his influence with the Minister of Food when this matter comes up for discussion, as it will in the near future when he has a conference with representatives of the
  1130
  Scottish Herring and White Fish Catchers' Association.
  The provision of adequate harbours is another thing which calls for urgent action by the Government. The inshore fishing industry, unlike the trawling industry, has been modernising itself, and they are working with a new and larger class of boat. In the old days, the fishing boats were drawn up or kept in safe harbours during the winter, but now they are in use all the year round, but there are many parts of the coast where the harbour facilities are really not good enough for modern vessels. These boats are very valuable, and £10,000 or more can be spent on some of them, yet it is a deplorable fact that the owners of some of these boats are unable to insure them through the winter because there is no safe harbour in which to keep them.
  I pass now to the herring fishing industry, and here we have an entirely different picture. Before the war, we were taking 150,000 tons of herring out of the waters round the Scottish coast. To go a little farther back, 40 years ago, we were taking 300,000 tons of herring out of Scottish waters, without having any appreciable effect on the shoals of herring. Contrast that 300,000 tons with the 109,000 tons which we took last year from Scottish waters. In the Scottish waters, we have a great untapped, or rather under-tapped, source of food from which an additional 200,000 tons of food a year can be obtained—food of the very highest quality, with proteins, fats and vitamins all in one. The country may well be very glad to make the fullest possible use of the food which can be obtained from that source. But the Government's handling of some of the problems connected with the herring fishing industry have not inspired that industry with very much confidence in the Government.
  The problem of the herring fishing industry has long been one of marketing, but it is complicated by a number of other factors, such as the seasonal nature of the industry, the unpredictable movements of the herring, the spasmodic landings which occur, not to mention the lamentable failure of the industry itself to modernise its methods. In spite of practically unlimited supplies, the fact remains that, owing to our adherence to antiquated methods, we cannot yet land in Great Britain enough herring to supply

  1131
  the needs of the market throughout the whole year. The days when that gap could be filled by salt cured herrings has gone, so far as Great Britain is concerned, for ever, and it is most certain also that it is coming to an end in other parts of the world where salt cured herrings have been sold in the past. The aim of the herring industry ought to be unrestricted fishing, but, before that can be achieved, a really flexible outlet must be found for the products of the industry, and the answer, beyond doubt, lies in quick freezing and the utilisation of surplus herring for the manufacture of herring meal and oil.
  The Herring Industry Board has established two experimental quick freezing plants at Lerwick and Fraserburgh, where they can process 100 and 200 crans a day respectively, but that capacity will have to be increased many times before even average landings can be dealt with. The point that I want to stress is that there is in the world a vast potential market for the consumption of herrings, frozen herrings and frozen kippers—in South Africa, Australia, New Zealand, South America and the Far East. Indeed, so great are the possibilities of disposing of herrings in that form that I think we can look forward to replacing a very large part, if not the whole, of our lost markets by selling frozen herrings and kippers. Refrigerating transport is already available in those parts of the world which I have mentioned, and cold storage facilities already exist there.
  But what about our own end of the business? We must have adequate cold storage facilities in this country, and that is what we have not got. Lerwick is the only important herring fishing centre in Great Britain which has those facilities. Those facilities will have to be provided, and I want to know 'hat the right hon. Gentleman is going to do about it. They will have to be provided at all the principal herring fishing ports, Stornoway, Lerwick, Fraserburgh and Peterhead. I am not saying anything about England, because that would be out of Order. Has the right hon. Gentleman given any thought to the question of the provision of refrigerating space on the vessels serving Shetland, which has long been one of the principal centres of the herring fishing industry?
  Mr. Edward Evans: On a point of Order. The hon. Gentleman said that if he were to refer to the East Anglian herring fishing, he would be out of Order. Surely, the East Anglian fishing industry comes under the jurisdiction of the Herring Industry Board, which, in turn, comes under the jurisdiction and control of the Secretary of State for Scotland, and, therefore, it ought to be possible to put the English point of view in this Debate?
  Sir B. Neven-Spence: The hon. Member is perfectly right, and I am sure I could leave the case of the East Anglian fisheries in his hands.
  The Temporary Chairman (Sir Robert Young): If the hon. Member looks at the words on the Order Paper, he will see that the Motion relates to "Fisheries. Scotland."
  Sir B. Neven-Spence: Great as may be the prospect of developing the processing of herring and kippers by quick freezing, we are still faced, for the time being, with the necessity of saltcuring a very large part of the catch. For that purpose, barrels are needed, and, if we are to have barrels, we must have the hoops with which to hold them together. I think that the Government deserve to be roundly condemned for the way they handled the question of timber for herring barrels and the question of strip iron for hoops last winter. There was a great lack of foresight in arranging for supplies of these things. I do not think that the right hon. Gentleman can escape his share of the blame for this, because it is part of his duty to ensure that this great primary food producing industry in Scotland is given the tools with which to get on with the job, and given them in time. It is no good waiting until the fishing season starts; the barrels must be ready long in advance.
  The same applies in respect of iron tot hoops Again and again last winter, coopers had to be put off because no strip iron was available with which to make the hoops for the barrels. I think that is very deplorable and very damaging to the reputation of the Government —not that I am going to lose any sleep over that. The non-delivery of timber last winter threw the whole industry into a state of the gravest uncertainty. The

  1133
  curers could not engage their female staff, because they did not know what number of barrels would be available. The number of staff taken on is directly related to the, number of barrels available for the cured herrings. These arrangements have got to be made months before the beginning of the herring season. I do not think it ought to be necessary for hon. Members of this House to have to exert the sort of pressure which had to be exerted last year in connection with this matter. The whole affair would have been ludicrous if it had not been so serious for the herring industry. Licences for hundreds of standards of timber had been issued without the slightest effort to see that there was any timber available against those licences. I hope the right hon. Gentleman will do all he can to see that timely steps are taken this winter so that we shall not have that anxiety again.
  The industry had no sooner recovered from that shock, and made all possible preparations for the summer herring fishing—and, in fact, some of the boats had already started fishing—when again the industry was thrown into a state of confusion and anxiety owing to the extraordinary delay by the Government in fixing up the contract for the supply of salt herrings to Germany. That caused great embarrassment to the Herring Industry Board. They had suddenly to borrow £1 million from the bank, because they were faced with the prospect of themselves having to buy the whole of the output of cured herring in the hope that they would be able to sell it somewhere. That was very disturbing to the industry, more particularly because Germany has been the best customer of the Scottish herring industry for many years past. This year it was more important than ever that trade should be done with Germany, because the ancient markets in the Baltic—Lithuania, Latvia, Esthonia and the free State of Danzig —have all gone, as those countries have been swallowed by the Russia python. It will be unwise to count on these markets ever being recovered.
  One of our best prewar customers was Poland, and she has no money with which to buy the herring. Neither is the Russian market to be counted on. Russia has only made occasional purchases of herring ever since 1919, and almost
  1134
  invariably these have been block purchases at a most uneconomic price for our herring fishermen and curers. Germany, therefore, remains the market which is of outstanding importance to the Scottish herring fishing industry—at least, until the quick freezing of herring and kippers comes into its own, and other world markets are opened up.
  Let me say a word or two on the vexed question of the disposal of surplus herring. From time to time the dumping of herring has been condemned, usually most vehemently by hon. Members who know least about the practical difficulties involved in dealing with surplus herring. Dumping, of course, is associated with gluts, and gluts are an act of nature which cannot be foreseen.
  Mr. Scollan: It is not an act of nature.
  Sir B. Neven-Spence: The trouble is that when the men shoot their nets at night they do not know there is going to be a glut. It is only in the morning when the nets are laden with herring, and when tens and perhaps hundreds of thousands of pounds are lost by the men, that they know anything about it. They have to deal with it after nature has provided the glut. The two chief reasons why the herring are dumped are, in the first place, that it is a physical impossibility for the crews who are assembled at the ports to handle more than the normal catch of the fleets at those ports. Obviously, it would be quite uneconomical to have crews of workers and ships with full crews standing by throughout the whole season, in order to deal with a glut which may possibly never occur at all. The second reason for dumping is the state of the herring which are landed late in the day when there is a glut. They are soft owing to the time that has been taken to haul the nets, and the long delay of the heavily laden boats in getting to port. Soft herring are useless for curing.
  Mr. Scollan: Is the hon. Gentleman making an excuse for dumping the herring into the sea, when the fishermen have been offered a price and have not taken it?
  Sir B. Neven-Spence: It the hon. Gentleman will wait a moment, I will come to that point. There is, in fact, only one practicable way of dealing with surplus herring, and that is to convert them into

  1135
  herring meal and oil, for which they are worth 16s. a cran at current prices. That is a process which has been woefully neglected in this country up to date. Norway has got 79 factories for making herring meal and for the extraction of herring oil, and Norwegian fishermen are earning great money at the present time in fishing principally for meal and oil. Before the war they even found it worth while coming to the Shetlands to collect, not herring, but herring offal, and to take it over the North Sea, there to process it. In Scotland there are at the present time only two such factories, one at Lerwick and the other at Fraserburgh, and both are far too small for the job. Nothing could possibly, to my mind, exceed the stupidity of the men who recently dumped 180 tons of herring at Fraser-burgh rather than take the £1,600 offered them for the catch, which was useless for anything else except conversion into fish meal and oil Our fishermen have got to get rid of the old-fashioned idea that it is wrong to send herring to what they call the "gut factories." They really are food factories, and that is the way in which they should be regarded.
  It is of the utmost importance to this country that we should augment our supply of fish meal and, more particularly, of edible oil at the present time; and the prospect of increasing our supply from herring is quite good. What is needed is an adequate factory at each of the herring ports of Scotland, Stornoway, Lerwick, Peterhead, and Fraserburgh. Such factories offer the only practical solution. They are admirably adapted to that purpose because they can store herring for five days quite well, which will produce first class herring meal, which is valuable for feeding to cattle and poultry, while the oil.is useful for turning into margarine. Indeed, it is commonly used in Norway without any conversion at all simply as a cooking oil. I have a bottle here, if any hon. Member would like to see it. It looks like olive oil, and is odourless and practically tasteless. The factories can store herring up to three months, and still produce a nearly first-class product though at greater cost. I am sure the Committee will not object to my paying a special tribute to the Shetland fishermen, and I should rather hope that the
  1136
  right hon. Gentleman will take this opportunity of backing up what I say. I say it for these reasons: because Lerwick is the only herring fishing port which is today co-operating too per cent. with the Herring Industry Board; last year they had the highest gross earnings of any other port in Scotland; and there is every prospect that the results will be even more striking this year. The whole emphasis there is on production—every one in the industry there has got his coat off ready to get on with the job. I cannot help thinking that a little more of that spirit spread throughout the herring industry at the present time would not only lighten the task of the Herring Industry Board, but would improve the long-term prospects of the industry itself, and encourage the Government to play a more active part in dealing with all the problems that undoubtedly exist.
  8.35 p.m.
  Mr. Westwood: I associate myself with what was said by the hon. Member for Orkney and Shetland (Sir B. Neven-Spence)as to the importance of the fishing industry, and, like the hon. Gentleman, I should have liked very much, if there had been more time, to deal with what is a vital and important industry, particularly so far as Scotland is concerned. I will endeavour, in as short a time as possible, to deal with as many points raised by the hon. Member as I can. I entirely agree that the aim of the fishing industry should be a sustained yield—I think they were the words he used—of those foodstuffs which are gathered from the sea.
  The hon. Member asked me what action had been taken in connection with the recent international conference. The 1946 Conference drew up a convention which laid down increased sizes of the mesh of nets, and increased sizes of fish which may be landed. The convention has been ratified by Britain, and he asked me how many other nations had ratified the convention. It has been ratified by three other countries—Sweden, Portugal, and one other which I do not recollect at the moment. The Government have taken several opportunities of reminding the other countries of the desirability of ratification, and it is understood that the countries concerned intend to ratify as soon as the necessary preparatory steps have been taken. Control of the tonnage

  1137
  of the North Sea fleet was the method of conservation proposed by the British delegation to the standing advisory committee on over-fishing, which met in January and April of this year. The limit proposed was 85 per cent. of the 1938 tonnage. At present the figure is 67 per cent. Closed areas and policing have been proposed by other countries as alternatives to the control of tonnage. I think that answers the main point which was put to me. I will try to deal with the other points before finish.
  The fishing industry, as already indicated by the hon. Member, is one of Scotland's major industries, and relatively it is a more important factor in the Scottish economy than it is in England. In 1946 nearly one-third of the British catch of wet fish was landed in Scotland. It is fitting, therefore, that a part of one of the Scottish Estimates days—although I regret that we have not more time in which to discuss it—should be devoted to discussion on fisheries, and I welcome this opportunity of reviewing the situation. Judging by the quantities of fish landed, I submit that the fishing industry has made a good recovery from the dislocations of the war. Here, I wish to associate myself with the tribute paid by the hon. Member for Orkney and Shetland to a brave, hard-working and fearless body of men who, both in war and in peace, are ever ready to do their duty by the country. Two-thirds of the steam drifters and trawlers, and half the motor boats over 45 feet in length, were requisitioned by the Admiralty, and about 45 per cent. of Scottish fishermen were on naval service during the war.
  Indeed, the landings of white fish by British vessels, in Scotland in 1946, were about 20 per cent. above the 1938 figure. This was attributable partly to a greatly increased catch by inshore fishing vessels, which landed almost a million hundredweights, and partly to the higher catches obtained by the reduced fleet of deep-sea vessels fishing in the North Sea and other waters, which had been rested during the war. Landings of white fish, for 1947, show a further increase compared with the first half of 1946, and with consumption of fish at a considerably higher level than before the war one might be tempted to think that the fishing industry has nothing to worry about. There are signs, however, that the present position will
  1138
  not be maintained, unless changes and new ideas are introduced in the industry.
  The Committee, which was presided over by the hon. Member for Orkney and Shetland, drew attention to the obsolescence of the Scottish trawler fleet, and the fact that before the war production in the near and middle waters had become uneconomic. The higher prices which have ruled during and since the war, and the higher yield from the Mirth Sea grounds in the last two years, have combined to make conditions more remunerative. But the yield of trawlers fishing in the North Sea is again on the decline, and is already considerably below the high level achieved in 1945. This suggests two things—that the improved stocks in the North Sea are again diminishing, and that if the deep-sea fishing industry is to avoid falling back into the condition in which it was before the war, efforts should be made to increase the efficiency of catching fish.
  The Committee will be aware that considerable attention has already been given to the overfishing problem, and that the Government have taken a leading part in the matter. The Overfishing Conference, in 1946, recommended that a committee should be set up to consider appropriate measures of conservation I have already given an indication of what we have been doing in that direction. It appears, therefore, that the industry ought to look further afield, for developments in the future, to the more distant grounds. This may require bigger trawlers than have been operated hitherto in Scotland, with better accommodation for crews, and with refrigerated space for preserving in good condition the fish caught in the early part of a long voyage.
  The Committee to which I have referred presided over by the hon. Member tot Orkney and Shetland, carried out a wide survey of the fishing industry in Scotland, and produced two valuable reports, which were published in the early part of 1946, containing a great many recommendations. Many of these dealt with matters for which the industry or others, such as harbour authorities, are responsible, and only about a quarter of the committee's proposals directly affect the Government I am glad to say that a number of these recommendations have already been followed up. The Inshore Fishing Industry Act, 1945, gave effect to the principal

  1139
  recommendation of the committee's first report—the provision of financial assistance for the purchase or building of inshore fishing vessels. In so far as the other recommendations involve legislation, the Government will announce its proposals in due time when an opportunity of legislation presents itself.
  Up to the end of June the total sums offered to Scottish fishermen and accepted for these boats, for M.F.V.s and secondhand boats, amounted to £200,000 by way of grant, and £340,000 by way of loan. In addition, grants and loans are available, under the Herring Industry Act, 1944, for the construction or purchase of boats to be used mainly for the herring fishing, and £110,000 by way of grant and £198,000 by way of loan have already been offered, and accepted, in respect of 41 new boats, 19 ex-Admiralty boats and 12 second-hand boats. Building yards are busy all round the coast and most of them have waiting lists.
  Let me say a word about the Highlands and Islands where fishing has always, with agriculture, been one of the main occupations. The Highlands and Islands Advisory Panel, set up earlier this year, has paid special attention to this industry, among others, and appointed a Fisheries Group under the chairmanship of my hon Friend the Member for Motherwell (Mr. Alex. Anderson). This Group has already travelled many miles, visiting the fishing communities in the Highlands and discussing with them their problems and ways of dealing with them. At one of its first meetings the committee supported a scheme put forward by the Scottish Agricultural Organisation Society for the purchase and equipment and administration of some small ex-Admiralty motor boats for use by lobster fishermen, and this scheme has since received grant aid from the Development Fund. It is hoped that it will enable the small crofter fisherman to obtain boats which will extend his radius of operation, and enable him to fish more continuously for lobsters. I can assure the Committee that the group and the panel are tackling their task with vigour and I am sure that they are performing a useful function in discussing with local interests the problems confronting them. A great many schemes for the improvement or extension of fishery harbours have been, and are being, dealt with. The war put a stop to all work
  1140
  except the most urgent repairs, and there are considerable arrears to overtake. Since the beginning of 1946, a total of £379,000 has been offered by way of grant or loan to harbour authorities, including £212,000 for an important scheme at Stornoway.
  Now I turn to the herring industry, which has been a good deal in the news of late. I think it was suggested that the Government—and that means myself in this case—were rather lackadaisical in dealing with some of the problems connected with the herring industry, particularly as regards the supply of wood and steel for making the necessary barrels. I am not apologising for any action which I took. I acted in conjunction with the Herring Industry Board, and I was able to provide for the industry the wood they required when it was extremely scarce. It was an extremely difficult job. On one occasion we had to buy wood which we did not require to get the staves we did require. Having solved that problem, I discovered that there was a shortage of steel for making hoops, but, here again, I was able to provide 1,100 tons of hoops to enable the necessary herring barrels to be made for the industry.
  I have no apologies to make, and I am sure that the Board and fishermen in Scotland are deeply grateful to the present Secretary of State for the action he took to enable contracts to be completed with the Control Commission. I would remind right hon. and hon. Members opposite that we were the sellers of herring; we could not compel the Control Commission to buy. We had to make contracts with them, because it so happened that there were others in control of Germany as well as ourselves. That must be kept in mind when we are dealing with this problem. We had to face up to the difficulties, and instead of being criticised in the way I was by the hon. Member, I think that I should have been complimented on being able to get a 20,000 tons contract, the staves necessary to make the barrels, and the steel necessary to make the hoops and carry out the contract.
  Mr. J. S. C. Reid: I thought the Germans were hungry?
  Mr. Westwood: You do not supply people because they are hungry. Do not let us "kid" ourselves. The fishermen are not willing to supply herrings without a price attached to them. They have to

  1141
  be bought and paid for, and. consequently, a contract had to be entered into. I think we did a "dashed good deal" so far as the herring industry is concerned. I have no apologies to make, none whatever.
  In order to see the position in its proper perspective it is well to remember that between the wars the herring industry was in a very depressed state, mainly on account of the contraction of former markets abroad for cured herring. These conditions resulted in a herring fleet with a catching capacity greatly in excess of the demand for herring, much of it consisting of old boats requiring replacement. In the buyers' market created by these conditions the fishermen often received very low prices for their catches and fishing became unremunerative. This in turn led to a further deterioration in the fleet. In an effort to strengthen their position, the fishermen were often led to dumping substantial quantities of herring rather than accent very low prices for them, and to restrict the number of boats fishing and the number of nets in order to avoid catches greatly in excess of demand.
  It was in these circumstances that in 1935 the Herring Industry Board was set up with the duty of re-organising, developing and regulating the industry. Before the war the Board had made a start in their task; as a result of their propaganda the demand for fresh herring and kippers was already on the upgrade. If all the kippers that were put on the market were properly kippered instead of some of them being dyed; if we were really providing only the best of the herring for kippering, we would not lose the market which we reckon to lose if we are to have dyed kippers instead of properly cured kippers. The other day, I had one of the finest meals I have ever enjoyed—a really good meal—of kippers. I did not get it in a London hotel because the producers supply the London hotels with dyed kippers instead of properly cured kippers.
  During the last two years the position in the industry has been quite different from what it was before the war. The demand for herring at home is at an increased level but the result of the war has been to jeopardise the markets abroad which were open to us between the wars. The herring fleet, which was greatly reduced by requisitioning and the call-up
  1142
  of fishermen during the war, is growing, and, though it is still below the prewar level, is capable of catching far more herring than are required to meet the home market demands. The future prosperity of the industry depends very much therefore on our ability to regain the former export market or to find new outlets for herring. As hon. Members will know, the Board in their 11th Annual Report published in November last year set out their plans for the reorganisation of the industry in a most interesting survey.
  Taking a bold line, the Board aim not merely at restoring the level of production between the wars, but at regaining the level of production which obtained before the first world war when it was, generally speaking, at about twice the level in the inter-war years. To achieve this task, the Board emphasise the need for developing new outlets for herring and particularly quick freezing and conversion of herring to oil and meal. The processing of herring to oil and meal has the advantage that, within limits, it can take varying quantities of herring from day to day because the herring can be stored before processing; it can therefore act as a buffer between the fluctuating daily landings and the more or less regular demand of the home market and other outlets. I agree that we have to develop that side of the industry. It has the additional advantage at a time like the present of adding to our supplies of fats and of meal for cattle food, always providing they do not dump them. Both quick freezing and conversion to oil and meal are tried processes, hitherto operated on a small scale only in this country and new plants would be required for their development on any scale. The Board believe that both processes can be successfully developed to the advantage of the herring industry as a whole and of the fishermen in particular.
  Mr. E. Evans: Can the right hon. Gentleman tell us what was the exact price offered for the dumped herrings. The hon. Member for Orkney and Shetland (Sir B. Neven-Spence), who opened this Debate said it was 16s.; my impression was it was 30s.
  Mr. Westwood: I will give my impression of that before I am finished. At any rate I will try to deal with it.

  1143
  The Board made it clear, however, that their target can only be achieved by the expansion of new and of existing outlets if all sections of the industry co-operate in the interests of all. The Committee may well ask what are the prospects for realising these high aims as far as the herring industry is concerned? The Board tell me that their proposals have on the whole been favourably received by all sections of the trade, and there is general agreement with the aim of developing each section of the industry by enabling it to operate to full capacity and at the same time ensuring a degree of stability which will encourage expansion. The Scottish Herring Producers Association, representing the Scottish fishermen, have, however, made certain reservations with regard to oil and meal though they have expressed their willingness to give the proposal a trial.
  I must confess that the happenings at certain Scottish ports during the current season do not augur too well for the future. What is the position? Under the present system of price control and the arrangements made by the Herring Industry Board and the Ministry of Food there is an assured market at stable prices. Herring for the fresh and kipper market fetch between 89s. 10d. per cran—the maximum price fixed by the Ministry of Food—and 85s. 10d., a voluntary minimum price agreed between the fishermen and the buyers. Herring for quick freezing and canning are sold at 70s. per cran agreed between the fishermen and the processors. Before the season opened and before any definite order from Germany had been placed, the Herring Industry Board undertook to purchase the whole cure at a fixed price; in virtue of this undertaking the fishermen agreed to sell herring to the curers at 55s. per cran. The Board arranged that the same price would be paid for herring for klondyking.
  Lastly, the point raised by the hon. Member for Lowestoft (Mr. E. Evans) the Ministry of Food maintain a standing offer to purchase at the subsidised price—and I emphasise "subsidised price"—of 30s. per cran, for processing into oil and meal, all herring surplus to other requirements up to the capacity of available processing plants. The Ministry's subsidised offer had the double object of encouraging the fishermen to supply herring for conversion
  1144
  into much needed oil and meal, and at the same time of creating conditions in which the fishermen could be sure of supplying to capacity the home market for fresh, kippered frozen and canning herring and also the curers and the klondykers.
  The offer has been willingly accepted by English catchers, many of whom are now fishing from Scottish ports and also by the fishermen in the Shetlands. It has been willingly done by the fishermen in the Shetlands who have played their part nobly and well. They are doing their best to help this country and the Government in dealing with this problem, and I pay my meed of praise to the fishermen of the Shetlands for the way they are dealing with it. I should have liked to deal with many other points, but I realise many others Members want to take part in this Debate.
  I thought it was necessary at least to indicate to the Scottish fishermen how much I regret—I am talking now of the Buchan fishermen—the line they have been taking. We are doing everything possible to help. Bear in mind that the Government are often criticised for maintaining controls that are not required, and I would just say to the fishermen that it may well be that the present arrangements will have to be reviewed unless the objects for which they have been made can be fully realised. Two must keep a bargain when the bargain is made. Again, from this Box, as Secretary of State for Scotland, I make my appeal to the fishermen to face up to this problem. What the English fishermen and the fishermen of Shetland can do, surely all fishermen can do to enable us effectively to carry through this work of dealing with a great industry and a major industry as far as Scotland is concerned. If for no other reason than that it gives me an opportunity of paying my compliments to the Shetland fishermen, and of making my appeal to other fishermen to fall into line and enable us to tackle this problem effectively, I welcome this Debate.
  9.3 p.m.
  Sir John Graham Kerr: There is a poem written by one of the select band of poets which emanated from the University of Oxford. It purports to be a guide to members of that

  1145
  university who are proposing to go up for university examinations. One of its most striking passages is this:
  "Steer clear of facts
  The fool who deals in those,
  A mocker he inevitably goes"
  —a wise bit of advice which no doubt has helped many eminent men from that university in scaling the giddy heights at which we see them today. I am going to risk wounding their feelings by not steering clear of facts: this is no time to do so. I am sure I shall be supported in this by those who have the vision to see forward into the future and to see the abyss towards which we are steadily moving, in which lurks universal ruin, with starvation for many and death to many. It is surely no time to evade the facts. It is time rather to grapple with the facts and to see what we can do to make use of them to enable us to evade the horrors of the abyss I have mentioned.
  I propose to deal with a few facts. They have to do with our Fisheries. It is a great subject. I am not going to spend time over the ordinary existing fisheries because they will be debated fully by other speakers just as they have been admirably treated by the two speakers who have preceded me. Nor need I say anything to emphasise the importance of the fisheries in general to Scotland. We all recognise their importance though perhaps we do not always remember that Scotsmen have been great world pioneers in the realm of fishery science. It was the old Scottish Fishery Board which was one of the very first government fishery departments. The successor of that Board, the Home Department of the Scottish Office, has followed its great traditions. It has got its active centre of fishery research at Torry, which has been referred to tonight, staffed by an able set of specialist scientists, and it has, in close alliance with it, that great laboratory at Millport, which, although not controlled by Government—it is privately owned—is financed mainly by Government, through the Development Commission
  Rather than spend time on those parts of the subject, I would like to follow the point with which the right hon. Gentleman dealt, regarding the need of new developments in our fishery industry. It is now just about 40 years ago that by studying the charts of the West Coast of Scotland I was able to select a particular
  1146
  West country loch, Loch Sween, as a most admirable place to study what might he called fishery science. I returned to that place year after year, and devoted much time to it. My greatest interest came in studying what are called plankton, that is to say, that great population of tiny little creatures which dwell in all the seas of the world, especially in temperate and cold climates, and which constitute an immense food supply. They are fed upon by great numbers of marine animals. The herring, mackerel and the whale are among such marine animals, and all of us know the nourishing quality of the flesh of herring and mackerel. In these days, too, I have no doubt that many hon. Members have had the experience of tasting whale steaks, and they know how nourishing they are. Each of these three animals subsists entirely on plankton.
  It would be interesting to see a development of our fishery department in the direction of making use of that same plankton. I have sailed through many square miles off the West coast of Scotland, where the sea water was almost like soup from millions of plankton organisms, yet at another time one hardly found any; just as, sometimes, in Loch Fyne you will find any amount of herring and a great herring fishery while at another time the,herring have vanished. What has happened? They have not, of course, passed out of existence. What has happened is that the herring has followed the concentrations of plankton. If we could follow those concentrations we should be able to get herring in all seasons. The first question I have to put to the right hon. Gentleman is, What is being done or contemplated in the way of developing this aspect of the matter, of devising means of tracking down those concentrations of plankton? Once they are tracked down, what will be done to develop means of collecting the plankton on a commercial scale, packing it and making use of it for food? For in it we have a vast potential additional food supply waiting to be tapped.
  One of the great plankton feeders is that group of shellfish which includes the oysters, mussels and clams. In Loch Sween and in other Scottish West Coast lochs there once lived a tremendous population of oysters. They have apparently been killed out by a fine mud which has settled down on the floors of

  1147
  those lochs. Apart from that I have actually witnessed them disappear during these 40 years. At the beginning of that time I used to get lots of big oysters, but they gradually became fewer and fewer, and at last they almost disappeared, smothered by the deposit of mud. It is not want of food because there is still an abundance of plankton there today—the minute plankton on which the oyster feeds.
  My second question, then, is what is being done now to develop or to revive oyster fisheries in the West Scotland lochs. I should add that while abundant oyster food is available, there is also an important negative feature about those lochs, namely, that there are no towns upon them with sewage going into the lochs and causing danger to public health. Before I sit down might I ask just one other question although, Mr. Beaumont, you may declare it out of Order because it has to do with education? It is to ask whether the Government are able to do anything to infuse a little of what we may call fishery science into the curriculum of the schools in the neighbourhood of great fishery ports such as Aberdeen. Such an infusion would not only be a great thing in education but would be an immense help to the fisheries in teaching pupils to appreciate the scientific development on which the success of the fisheries rests.
  9.13 p.m.
  Mr. Malcolm MacMillan: One of the most fascinating features of some of the speeches from the Benches opposite—notably that of the hon. Member for Orkney and Shetland (Sir B. Neven-Spence)—was the tendency among the Tories to demand of the Socialist Government that they should bring this industry, which was allowed to lapse into chaos and decrepitude, into shape and order by more controls and more planning. There are one or two small criticisms of the Scottish Office that I may have to make—rather reluctantly but necessarily for public reasons—in respect of fisheries development in the Western Islands and Highlands. However, I should like to soften any criticism by telling the Secretary of State that the kippers which he said he so much enjoyed the other day were sent to him anonymously by myself.
  Mr. Stephen: I will send the hon. Gentleman my address.
  Mr. MacMillan: In Scotland we very much appreciate the fact that the Secretary of State is corning himself to visit the Western Island and Highlands and to have a look at the situation in the industry and the fishing communities of that area. We will welcome him very much and would have welcomed him even more had we been quite as happy about progress in the Scottish fishing industry as he appears to be himself. I must be a little critical here because I do not think any Minister in this Government or in previous Governments can afford even to sound the least bit complacent about the progress we have made in the development of this industry. Some of us speak today as Members for constituencies in an area which comprises about one-fifth of Great Britain with a population of about one-third of a million.
  A good deal of the depopulation of that area is due to the procrastination and lack of decision of past Governments. The depopulation is alarming even on the seaboard area and the islands because of the neglect of the fishing industry. That industry and agriculture are the two primary producing industries of this country which we have neglected so badly in the past. We cannot afford for a long time to be complacent, and I hope we never will be. Two years have passed with our own Government in office, and we have had two busy Sessions, but I hope we are coming to the point now when a good deal will be done to put this industry on its feet and give security and a more guaranteed future to the men in it than has been done through the Herring and White Fishing Industry Acts of past Governments under which certain measures were taken. However, they were inadequate in themselves and I see them only as a first step towards the goal to which we must help the Scottish fishing industry to advance.
  When we ask for the development of the fishing industry areas, in the Islands especially, we seem to come right up against a financial decision on almost every occasion. I would like to know just where policy is framed in this respect. Is it solely and finally a Treasury decision, yea or nay, even after a declaration of policy, or of sympathy at all events, by the Secretary of State and other Members

  1149
  of the Government? The Secretary of State said he had set up an advisory panel for the Highlands and Islands. I have the honour to be Chairman of that panel, on which hon. Members sit with me, which is representative of all the counties of the Highlands and Islands of Scotland. I do not think anybody inside or outside that panel will deny that it has worked hard. Its members have travelled around seeing at first hand what could be done to develop those areas. If I may single out one, because of its greater physical activity than almost any other group, the fisheries group, under my hon. Friend the Member for Motherwell (Mr. Alex Anderson), has done a great amount of work investigating at first hand the conditions in the fishing areas around the Highland coast and they and I are going out again into the Islands in the near future. Here is a point of criticism, however. When this panel was set up, the Secretary of State inaugurated its meetings and deliberations with a call to "action," and the panel promised, with me, at that time that he would get action and recommendations for action for the development in those areas, of roads, bridges, piers and harbours. We recommended strongly constructing a bridge to link up Benbecula, North Uist in the Outer Hebrides, a scheme essential to all economic and fishery development.
  After months of waiting, we have not yet had a decision from the Secretary of State and the Minister of Transport. I would draw his attention to the fact that he asked for action at the first meeting and those of us who have sat in this House for quite a number of years now pleading for those developments as individual Members, do not feel like wasting two years, or possibly more, of our private and public lives upon a panel which has been asked for action but which, when it gives it, does not find the adequate and urgent response which was anticipated at that time. I shall not be too harsh with my right hon. Friend in that regard because, so far, we have been waiting only months where already we have waited unsuccessfully years for other Governments to move. Nevertheless, we expect, and the people of this country expect, in months, the things they would not have expected of Tories in years. Therefore, we are setting a faster pace for the Minister and the Scottish Office. It
  1150
  is in fact the best compliment the Government could be paid.
  There is the danger all the time, which we Members for agricultural and fishing constituencies feel, that there is an industrial 'area mentality among hon. Members of the Government who are tackling these problems, and it is difficult to get over that, just as it would be difficult for me, as a person born in a crofting constituency coming to a city, immediately to adapt myself temperamentally and in every other way to the demands and the feelings and the needs of an industrial area. Therefore, it falls upon us to put pressure upon Ministers who were themselves born in industrial areas, who have been brought up in them, who have been surrounded by industrial problems in an industrial environment all their days, and I make allowance for the Secretary of State and Under-Secretary to that extent, that they have not had the same background as the hon. and gallant Member for Argyll (Major McCallum) and myself and certain other rural hon. Members on both sides of the Committee. But they must realise that we still live off the land, and that we were practising agriculture and fishery long before we were practising even the now all-important business of coalmining, and that fundamentally we depend on the land and sea. In some respects we are thrown back on our original resources more than on coal-mining itself. Let us not forget the importance of keeping that balance between agriculture and fishery, on the one hand, and industrial activities, on the other. Time and again members of the Scottish Office have not had that background, or native interest, or native ability, to grasp the needs and requirements and feelings of the fishing and agricultural areas of this country. But this is a time when they will have to strike that balance between town and country, and to remember the interests of the communities of these primary producers in the landward areas.
  When talking of fishing, we must not forget we are talking of human beings, because fishermen do not live at sea all the time. Their families have the same social background and want the same comforts as other people. The Secretary of State and the Government really must get down to this problem and treat it

  1151
  as a special area problem, which it is admitted to be. It is admitted to be a special area. The Highlands and Islands Medical Service is an acknowledgment of that fact; so is the MacBrayne steamer subsidy. We are not asking for eternal charity, nor need we apologise for demanding attention. In every war as it comes along, disproportionate claims are made on these areas, and they never fail. We want to see these areas given the essential capital equipment with which to get on and produce, and help to contribute to greater production for the country as a whole.
  The hon. Member for Orkney and Shetland made claims for the native virtues of his own constituency, which we would not contest but would only ask to be allowed to share in the Western Islands, and other parts of the North-West. The hon. Member for Ross and Cromarty (Mr. MacLeod) is present, and I have no doubt that he would be staking claims for his home ports, which might come into conflict slightly with the Western Islands. But we have no real conflict; though, there may be little local competitions and arguments. We are all here determined to see that whatever Government is in power these fishermen shall no longer be neglected as they have been neglected in the past. They can be neglected only to the peril of this nation, and the expense of the community as a whole. Here we are as a nation pressing them every day to produce more food, and to bring more fish
  into the shops. That cannot be done indefinitely, with obsolete vessels and expensive gear which has to be replaced from time to time. We cannot increase production substantially unless there is a new fleet.
  The former Secretary of State for Scotland, Mr. Tom Johnston, gave an appalling picture of the aged condition of the herring fleet not many years ago in a speech here during the war. We are anxious about getting reconditioned boats, and new boats for our constituents. This should have very high timber priority, because it is a food priority after all. We are anxious that the engines and gear should come forward more quickly than they have been coming forward. The fishermen are willing to fish. Younger men
  1152
  are more anxious today to fish along the coasts of the Western Islands than they were in the past despite the depletion of the waters and the depredations by illegal trawlers. They are very tired of the neglect of Governments of the proper protection of inshore fishery grounds. I have little time, and have to speak even more rapidly than is my wont.
  We should have an immediate inquiry into the whole McBrayne steamer service now. I would ask the Secretary of State, together with the Minister of Transport, to have a look at the conditions under which lobsters are being transported from our islands to the South. Our fishermen are losing hundreds of pounds every week of the year because they cannot get their lobsters sold in time to arrive alive at Billingsgate. It may be that they are shunted from the passenger train into a siding at Broad Street, instead of being taken direct to Billingsgate. That should be examined at once. The men are going out with the encouragement of good prices, and encouragement to produce more food, and they find themselves running into heavy losses because of some hitch in transport, because of someone's carelessness or because of a lack of coordination in distributing the lobsters.
  The question of flying consignments of lobsters South has been raised It has been stated that the cost of doing this from Stornoway to London worked out at £500 or £600, which J find difficult to accept as a real figure. I think it is an estimate intended to dissuade us. We should call in an expert who can tell us dispassionately what the cost of these consignments might be. I would like the Secretary of State to go over the various recommendations of the panel quickly; to go over them this week and next week, to go over them before his visit to the Western Isles in August. Popular as his visit will be, and glad as we shall be to see him there, we shall be many times more grateful to him, on behalf of our constituents, if he carries out the advice he gave to the panel on its inauguration and gives us this action now.
  I am tired of saying, year after year, many of the things which I have said to Minister after Minister occupying the place which is now being adorned by my hon. Friend. One gets tired of it, and the time has come when, in our own interests, in the interests of food supply and in the interests of main-

  1153
  taining for strategic and other reasons. a population in the Highlands and Islands of Scotland, in the interests of employing them instead of having them on public funds, on which they do not want to depend, the Secretary of State should be taking action, to use his own words, taking prompt decisions and forcing decisions on the Treasury, and keeping his own officials as well as his fellow Ministers right up to scratch. We do not want to see the recommendations from this panel of ours subject to the time-lag of months and years that has occurred in the past between previous recommendations and their being carried out. We have all been very weary of that in the past.
  The time has really come for action in these areas and already certainly the Dominions overseas are taking action. Australia, New Zealand and Canada today, once again, after the second world war, in which our men have contributed out of all proportion to their numbers, are clamouring for these men, for the most enterprising, active, and adventurous men that there are. They want them across the Atlantic and in Australasia. They know that they are the finest stock to populate their Dominions. We should be competing with them to make sure that these men do not go, that they are able to live in their own country and there make their proper contribution to it and to the world.
  9.29 p.m.
  Mr. Boothhy: We have had an interesting and useful Debate. It was not so long ago that the Minister of Health said that we lived in an island which was filled with coal and surrounded by fish. He went on to say that it would take a genius to produce simultaneously a shortage of both. We can congratulate the Government on having produced the shortage of coal, but we most seriously hope that they will not bring off the double, and manage to produce an unnecessary shortage of fish at the same time, because we may, before the next six months are out, depend on fish to a greater extent than many people in this country realise at the present time
  I have very little to add to the admirable speech made by my hon. Friend the Member for Orkney and Shetland (Sir B. Neven-Spence) upon the subject of the white fishing industry, upon which he is an admitted and acknowledged expert.
  1154
  He was, I thought, extraordinarily inter esting and sound. I think that the right hon, Gentleman, from his observations agreed with practically every word that my hon. Friend said. I want to emphasise, with him, the very great danger of over-fishing certain grounds in the North Sea. I share the regret that he expressed that we have not yet got a satisfactory international agreement with regard to this matter. The right hon. Gentleman the Secretary of State for Scotland said that two or three nations had ratified the very mild agreement that already had been arrived at, but that there were several others that had still to ratify it. I think the opinion of hon Members on both sides of the Committee is that the agreement in itself does not go far enough. So far as white fishing is concerned, we are heading straight for exactly the same situation as confronted us between the wars. We are going to have a tragic shortage of fish within the next three or four years in the North Sea if we go on as we are doing now.
  The right hon. Gentleman ought to make the strongest possible representation, as Secretary of State for Scotland, to the Foreign Secretary to bring the maximum pressure to see if we cannot get a decent agreement with regard to the preservation of these most valuable grounds in the North Sea. I would like to add to what my hon. Friend said a word about the dangers of catching immature fish in our home waters. The inshore white fishing industry in this country is far from blameless in this matter. At present many boats are fishing round our coasts with far too small meshes. Some of the fishermen themselves have said to me, "We feel ashamed to be fishing with a mesh of this kind. We know it does harm. We catch immature fish. It is doing damage to the spawning grounds, but we cannot get any other nets." I would like to stress the importance of nets If the Government can give the inshore fisherman the necessary nets, I think he would be only too glad to fish with a bigger mesh. If he cannot get any other nets, he must go on fishing with the present mesh which in many cases is far too small.
  Of course, the remedy is to restrict fishing altogether at certain times in certain areas of the North Sea and, I think, to prohibit it in some of our home waters.

  1155
  The right hon. Gentleman knows very well the pleas that have been put up in Parliament after Parliament for excluding foreign trawlers from the Moray Firth, one of the great spawning and breeding grounds of fish. The need is just as great today as ever it was. Why no Government in this country—and I include all the Conservative, National and Labour Governments of the past as well as the present Government—has ever had the courage to close the Moray Firth to foreign trawlers, and to tell them that we are doing it in the interests of the fishing industry as a whole, I do not know. I agree with the hon. Member who suggests that that should apply to the Minch as well. I have never been able to understand what is the Foreign Office's objection. Nobody is going to declare war on us because we clear the Moray Firth and the Minch, in the interests of fishing as a whole. I would ask the right hon. Gentleman to see if he cannot do what no Secretary of State for Scotland has ever yet been able to achieve—to make the Foreign Office move in this matter. It is a very serious situation, and we will give him a laurel wreath if he succeeds.
  I turn for the remainder of the not very long remarks I am going to make, to a subject with which I am more familiar than the trawling industry, and that is the herring industry. Here, as the right hon. Gentleman very truly said, an entirely contrary situation prevails to that which exists in the white fishing industry. We are not catching enough herring; that is the root trouble of the herring fishing industry today. When the fisherman dumped a few crans into the sea at Fraser-burgh the other day, the Ministers were indignant, and the public were shocked; but that was a fleabite, because what, in fact, is going on at the present time, and has been going on for the last three years and for long before that, is that thousands and thousands of crans of herring are dumped into the sea every year by not being taken out of it. It does not really much matter whether we do not bother to haul them on board, or whether we haul them on board to push them back again. The result is much the same. We cannot deplete the herring shoals, or do any harm by catching the maximum amount of herring. Ever since the reign of Queen
  1156
  Elizabeth, when, by the mercy of God, they left the Baltic Sea and came to the shores of Scotland and East Anglia, it has been impossible to catch too many. It is true to say that, every time we deliberately cut down the number of boats or reduce the number of men, we are in effect dumping herring.
  There was a shocking example last autumn at Yarmouth and Lowestoft, because we knew then that there was starvation in Western Europe. We knew that the German people were going to have a hell of a winter and be seriously undernourished; yet here we had an article of food which has probably more pure nutritional value than any other article of food. It has proteins and it has fats, both of which are absolutely vital. We could have shipped all these herring to Germany, if we had taken the most elementary measures to deal with that situation. We could have sent thousands of crans. I was down there and saw the situation at the docks, and the hon. Member for Lowestoft (Mr. Edward Evans) was there, too. There was a glut; and the fleet generally was restricted, and for certain periods there was practically no fishing. If that situation had been foreseen, and proper steps had been taken to cure and barrel these herring, even if they were only rough cured, and klondyked, a great deal of starvation would have been prevented last winter in Western Europe.
  Mr. E. Evans: Is the hon. Member being quite fair? Was not the real cause the chaos which was due to the lack of integration in the industry itself? Was it not the fault of the system of internal organisation?
  Mr. Boothby: I have not the time to go into that, but I believe that the hon. Gentleman is entirely wrong. There were the fishermen, there were the boats, and there were the herring. What steps were taken to deal with the herring when they were landed at the docks? There was practically no transport, no barrels and no labour, while the most elementary precautions on the part of the Government could have seen that these things were provided. Had the Government acted some months earlier, this situation would not have arisen; but it was bound to happen when they failed to exercise any foresight, and that was the cause of the trouble.

  1157
  Having said that, I would be the first to admit that, in the smaller difficulties, when brought to their notice, the Government have been most helpful. There was the question of timber. I agree that the right hon. Gentleman did his very best, although I think he might have foreseen that there was likely to be a shortage of timber before he did. Once we drew attention to the fact that there was serious shortage of timber both for boat building and for making barrels, he did his level best, and brought strong pressure to bear on the Cabinet, and got some timber. When we also drew his attention to the fact that there were no nets, he did persuade the President of the Board of Trade to stop exporting them from this country, and that, I quite agree, was a most creditable action on his part. Some of us thought that, had the President exercised a little foresight or imagination, he would never have exported the nets at all, but perhaps that was asking too much. When we did draw the attention of the right hon. Gentleman to the fact that Scottish fishermen had no nets while we were exporting nets in considerable quantities to Europe, he took the necessary action and it was stopped.
  Then there was the question of the M.F.Vs. Again the right hon. Gentleman brought pressure to bear on the Admiralty. After a good deal of struggle, and after many of these vessels had been kept for several months rusting away in ports up and down the coast, and with strong support from all of us on this side of the Committee, he at last induced the Admiralty to part with some of them, when they could not think of anything else to do with them. He will be glad to hear that these M.F.Vs. have been a surprising success; even though they were kept on their bottoms on mud-flats, they have turned out to be much better than was anticipated. Quite recently, too, I made the suggestion that the deck watches of some of the smaller craft should be sold to the fishermen at a reasonable price. The Government have made that concession, although I think they might have given them to the fishermen. However, I appreciate what they have done; they are selling them at a reasonable price, and I am grateful.
  Nevertheless, I would like to remind the hon. Gentleman who is going to reply that the shortage of timber and the
  1158
  shortage of nets continues to be acute. We have not solved either of those problems; they are slightly better than they were, but they are by no means cured. If some of the older fishermen had not, in their wisdom, stored up nets, which they have now given to their sons and nephews who have come back from the war, a great many of these young ex-Service men would not be at sea today. It is only because their fathers and uncles showed wisdom in preserving the nets, which, in many cases, belonged to the prewar era, that they have been able to go to sea.
  On the larger issues, I do not think that the Government have displayed much vision, foresight or courage in dealing with the problems of the herring fishing industry. In the shoals around our coast, we have a mine of infinite value. What are we going to do with it? A question which the right hon. Gentleman should ask himself is: Are we going to exploit it to the full? As the Herring Board has pointed out, we shall need about 1,000 craft with which to catch no less than 3 million crans of herring a year. That is the maximum amount; that is what the mine is worth. If we are going to do that, we shall, as the right hon. Gentleman said, have to have an outlet for occasional gluts. Unless we have that outlet we can never hope to catch to capacity. Does this outlet exist? Of course it does, and we all know it. The outlet for occasional surpluses is the manufacture of oil and meal; there is no other. As my hon. Friend pointed out, there are no fewer than 79 of these factories in little Norway at the present time, as against two small factories of an experimental type in this country.
  The right hon. Gentleman the Secretary of State for Scotland had a harsh word to say about the Buchan fishermen, whom I have the privilege to represent. I would like to put in a word or two from their point of view. They remember very vividly the years between the two wars when the price of herring was forced remorelessly down by economic conditions over which they had no control, and when they lived on the border of starvation. They know now that costs are high, and rising. There is no tendency for the cost of coal or nets to go down; on the contrary, the tendency is the other way. I say quite frankly to the right

  1159
  hon. Gentleman that I do not think he will get them to go to sea—and I emphasise that—for the purpose of catching herring at 30s. a cran, which is a very different thing from selling surplus herring at 30s. a cran.
  Mr. Westwood: I am sure the hon. Gentleman does not want to do me an injustice. I made no appeal to the fishermen to go to sea to catch herring at 30s. a cran. My appeal to them was that if there was a surplus it should not be thrown back into the sea, in view of the fact that food is so necessary and we can obtain oils and meals from such a surplus.
  Mr. Boothby: I was hoping that the right hon. Gentleman would make that important intervention On this occasion I was dangling a red herring, and I am glad to have extracted that remark from him, because it is very important. The fishermen do not quite see the difference. Why they do not, I cannot say; but they are not yet persuaded that their earnings will increase with an increased turnover. They have not yet got that into their heads. In time, I think they will. The right hon. Gentleman well knows mat in this, as in every other matter connected with economics, I am an expansionist by conviction; but we shall never put over to the fishermen an expansionist policy unless we produce a plan which fires their imagination, and also instal the necessary plant with which to carry it out. We must, first of all, guarantee a fair price for all the herring that can be caught for freshing, kippering, curing and canning and satisfy them that the necessary plant exists to enable these branches of the industry to be exploited to the full.
  The right hon. Gentleman has talked upon the subject of quick freezing. Only the Government can do that; no private firm can do it. We have only just begun a small experimental plot in Shetland. It is nothing. The time has come when the Government ought to go forward and not be afraid to spend money on it. Then there is the question of methods of distribution. There is a vast scope in this connection, especially from the point of view of distribution of herring in our rural districts. Many people in the country never see a herring, whether it be fresh, kippered or any other kind of herring, from one end of the year to the other;
  1160
  and that, of course, includes the question referred to by the right hon. Gentleman, of proper cold storage facilities. We shall only persuade the fishermen to go all out, and allow the surplus to be sold at a reduced price for conversion into meal and oil, if we satisfy them completely, as we are not satisfying them at the moment, that every possible avenue is opened up for the sale of herring, at a fair price for freshing, curing, kippering, canning and so forth. The fishermen are conservative by nature, but if and when they are persuaded—and the time will cone when they will he persuaded—they can change their outlook. There is the example of the conversion from the old steam drifter to the modern diesel engine, dual-purpose craft. That conversion took a long time: but, now that it has come, it is very thorough.
  Finally, I say to my right hon. Friend: Do not forget the bases. No fleet can operate to capacity unless it operates from an efficient base. The Government must see that the harbours from which the Scottish summer fishing is conducted—Lerwick, Fraserburgh and Peterhead—are kept in good order. They are asking for money now; and, in my view, they ought to get it. There is no harbour in Scotland that is not asking for money and, in most cases, with full justification; but at the actual bases of the herring fleet, the need is most urgent.
  Mr. J. J. Robertson: Will the hon. Gentleman state why all this was not done during the many years when the party to which, I suppose, he still bears some allegiance, was in power?
  Mr. Boothby: I recommend the hon. Gentleman to read all the speeches I made for 23 years on this subject He will learn a lot about it. I think this is about the 25th. In any case, the condition of the harbours at Fraserburgh and Peterhead was very much better in 1938 than it is today, but I am not blaming the Government for that.
  Let me say this, in conclusion I do not think that we should go back to the free market. I believe the right hon. Gentleman agrees with that. But I do say that circumstances may make that—not, perhaps, necessary—but possible, or even inevitable if there is no co-operation, if there is no goodwill, if there is no spirit of comradeship in this industry. I am personally strongly opposed—and I think

  1161
  I speak on behalf of all my colleagues on this side of the Committee—we are against a return to a free market. But the only logical alternative to a free market in herring is to arm the Herring Board with sufficient powers, and with sufficient financial resources, which it has not at present got. I know that if I develop this theme I shall be out of Order, for I shall be discussing legislation, but the right hon. Gentleman knows perfectly well what I mean.
  The curse of this industry at the present time is suspicion—suspicion between every section of it; and also suspicion between the industry as a whole and the Board. It is a tragedy. We must try to eradicate it. We shall eradicate it, I think. But, in order to eradicate it, the right hon. Gentleman will have to exhibit a good deal of guts and a good deal of imagination, and so will the Herring Industry Board—rather more imagination, rather more guts than they have exhibited in recent months. If they do show those guts and that imagination, and stop paying the rather saponaceous tributes to the fishermen that we have heard for a long time —the fishermen did their duty during the war, as everyone else did, and they do not claim to have done more than that —and take constructive action on the lines I have indicated, then, I think, this industry has very likely a greater future before it than it has ever had in the past.
  9.52 p.m.
  Mr. T. Fraser: Let me in the few minutes at my disposal say how very much I regret that many hon. Members who wished to take part in this Debate have not been able to do so. I feel that this discussion, if it had been possible to continue it longer, might very well have been most productive of ideas. The hon. Member for East Aberdeen (Mr. Boothby) has talked about the further need of control over the fishing industry. He himself said that if he expanded that argument he would be out of Order. If I seek to reply to him I shall be very much out of Order. But I should endeavour to make some sort of reply to some of the points made. The hon. Gentleman said there was still a great shortage of nets and timber and gear in the fishing industry, and we accept that. My right hon. Friend, although he did
  1162
  say in the course of his speech much had been achieved in the past 12 months, nevertheless, appreciates that he will have to continue to represent the needs of this industry, and actively secure that the amount of nets and gear is kept at the maximum.
  The hon. Member for the Scottish Universities (Sir J. Graham Kerr) made a most interesting speech earlier on in this discussion. He asked me if I would reply to certain questions he put. He was concerned about the development of oyster fishing in the West of Scotland lochs. I can only say to him that research is being very actively carried out by the Scottish Marine Biological Association at Millport, and that for the research it is doing it receives a grant from the Development Fund of about 90 per cent. of its expenditure. He had some interesting observations to make about the concentration of plankton moving from one part of the seas to another, and the fact that herring, particularly herring, followed those concentrations of plankton; and he asserted it was because of the plankton having gone from Loch Fyne that the herring that used to be found there in such very great quantities were no longer to be found there.
  In 1942, experiments in the artificial cultivation of fish were begun in Loch Sween, which were conducted by scientists from Edinburgh University, and by other scientists. Those experiments continue. The theory behind the experiments is that the food on which the fish feed can be made more abundant, and the fish are able to increase more rapidly in size and weight than they do normally. The Herring Industry Board have made available an experimental vessel for the making of plankton surveys in various herring fishing areas. I do not know whether they hope to do as the hon. Member suggested they might do, namely collect the plankton where it can be found and bring it to Loch Fyne, or any other part of the seas or lochs in the Western Highlands from which the herring seem to have gone. Nevertheless, if they can trace the plankton, as he put it, it should be possible for the herring fishing industry to be directed to where the herring are most likely to be obtained.
  I was also asked about the cost of transporting lobsters from the Highlands and Islands to London. We have discussed

  1163
  this question with the Ministry of Civil Aviation, but as yet we have not got their final reply. However, the indications are that the cost would be prohibitive, even if the total catch were increased greatly from the present quantities. A recent commercial quotation for one journey was £600. I am informed that that would make the transportation of lobsters by air a hopelessly uneconomical proposition. My hon. Friend the Member for the Western Isles (Mr. M. MacMillan) and the hon. Member for East Aberdeen both said that we, the Government, had better see to the harbours around the North Coast of Scotland. My hon. Friend also had in mind the harbours in the Islands to which these fishermen might have to return, very often with small craft. Both hon. Members asked for increased grants, and also that the grants should be made available more readily. I have with me a list of about a score of harbours on which work is being done, or in respect of which work has been approved, which are enjoying grants from the Development Fund.
  My hon. Friend the Member for the Western Isles, who asked that the Secretary of State should take his own advice and disclose some action in regard to recommendations from the Highlands Advisory Panel, did less than justice to himself. He talked about the North Ford, but he knows it is under active consideration, and is not a matter which can be considered in isolation, and
  1164
  certainly not in the same way as it was being considered in 1935, because the position just now is somewhat dependent on whether certain airfields will be laid out. It may well be that airfields which have been planned for the North Ford—
  Mr. M. MacMillan: I had all those considerations in mind, and referred to them a year ago. They could have come to a joint decision between them by this time.
  Mr. Fraser: The Highlands Advisory Panel recommended that grants should be made towards the carrying out of an extension at Stornoway harbour, and a grant of £100,000 and a loan have been approved.
  Mr. M. MacMillan: The negotiations took a year.
  Mr. Fraser: I should have thought my hon. Friend would have given the Secretary of State some credit for so readily accepting the advice of the Highlands Advisory Panel, and getting this project carried through. I have a list of at least a score of harbours around the North of Scotland and in the Highlands on which work is being carried out at the present time, assisted considerably by grants from the Government.
  It being Ten o'Clock The CHAIRMAN left the Chair to make his Report to the House.
  Committee report Progress; to sit again Tomorrow.

  EDUCATION (EXEMPTIONS) (SCOTLAND) BILL [Lords]
  Not amended (in the Standing Committee), considered.
  Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Westwood.]
  10.2 p.m.
  Mr. McKie: I should like to congratulate the Government on having had the courage to bring in this Measure. We on this side of the House must not be taken to be altogether consenting parties to it. We realise the dire necessities in which the Government find themselves in regard to agriculture and other matters, and that the Government, having made such sketchy plans for the uncovering of the potato crop of Scotland, are still left with a deficit of some 22,000 people. It is proposed, therefore, to raise by this Measure an additional 22,000, by permissive exemptions which this Bill envisages. So far so good, but I must say that while I offer my congratulations, I am amazed that this Bill, bringing in a modified measure of child labour, should have been introduced by this Government. I notice that the right hon. Gentleman shakes his head. I am supporting him, but I am entitled on Third Reading to criticise what is in the Bill, and to express my surprise that this should have been introduced by a Socialist Government, and in particular by the Secretary of State for Scotland, who speaks more or less for the extreme left wing of his party. When hon. Members opposite occupy the benches on which we now sit, I express the hope that they will show the realism in Opposition which they are now showing in regard to the carrying on of the business of Government. I well remember a former Member of this House—
  Mr. Deputy-Speaker (Mr. Hubert Beaumont): The hon. Member knows that he has got right outside the scope of the Bill which is now having its Third Reading.
  Mr. McKie: With great respect. I thought that I was well within the scope of the Bill.
  Mr. Deputy-Speaker: On that matter we differ.
  Mr. McKie: I was merely saying that this is a Bill comprising three Clauses. The first Clause is the kernel of the whole Bill. It is permissive so far as the parents of these children in the various areas administered by these educational committees are concerned. I was proceeding to say that I well remember a former lady Member of this House alluding to the necessity of child labour in regard to the gathering of the raspberry harvest, saying that there were a lot of little things for little hands to do. She was held up to derision by, amongst others, the Secretary of State for Scotland.
  Mr. Westwood: I cannot allow that to pass. There is not an iota of truth in the suggestion made by the hon. Member.
  Mr. McKie: I am sorry that the right hon. Gentleman gets so—
  Mr. Deputy-Speaker: I fail to see what relationship these remarks have to the Third Reading of this Bill.
  Mr. McKie: I was merely endeavouring, by way of illustration in regard to a suggestion made in the past, to show what I feel in regard to the sponsoring of this Bill by the present Government. After all, we on this side have never objected to the principle of employing children in a healthy occupation. That is where we differed, in the old days, from the complete laissez faire which was extolled by the party opposite. While the Secretary of State and his colleagues feel somewhat apologetic, and no doubt Members behind the right hon. Gentleman condemn this policy root and branch, we say that within reasonable limits, provided it is not abused, this kind of healthy occupation, in the holiday months of the year may well be for the benefit of the children who are thus employed. Although this Measure is another glaring illustration of the Government's general incompetence in providing proper labour for industries, particularly agriculture, we certainly shall not oppose its Third Reading tonight.
  10.7 p.m.
  Mr. Carmichael: I know the impatience and desire on the part of the Government to get this Bill through, but it would be unreasonable if I sat here and willingly agreed to its passing. I gather that nobody is happy about it, but that everybody wishes to

  1167
  be silent so that it will pass quickly. There are certain weaknesses associated with this Bill which I must mention. One of the strongest points in the 1945 Education Act was the denial of the right of a local authority to grant exemption under any conditions. The present Government were responsible for passing that Act, and now they are the first to break it. As a matter of interest, I should like to know how many children will be employed in the potato fields of England and Wales during their educational hours this coming harvest? I do not know whether any will be employed.
  The hon. Member for Galloway (Mr. McKie) has said that potato gathering is a healthy occupation. I should imagine that Members on the Labour benches are tired of statements that if working class children are taken into industry it will be good for their health. We are always being told that. There may be one or two young persons from comfortable homes in Scotland who will be engaged in the potato harvest, but the great percentage of those who will be employed will be from working class homes. The local authority have no power in the matter if a parent grants consent. That is a new approach to education. In the past, in the development of education, and because of the necessity for developing communal life and citizenship, parents were pushed on one side, or told that they must accept certain laws and regulations. In this matter, parents will give their consent, because it may give the child a holiday in the country. Secondly, the children will agree to it because there is a touch of adventure. People associated with the education of children know that it is not always wise, and rarely wise, to give children the right to walk out of school to do things which they enjoy because there is a touch of adventure about them. Employers, if they employed young boys even for two hours a day, would be punished. It would be breaking the Act, and, as I said in Committee, firms are regularly taken to court and punished because boys are working for two or three hours of the week either in the morning before school or after they leave school in the afternoon.
  I note because of the great amount of talk in many quarters today of the direc-
  1168
  tion of labour—and I want this point appreciated—that the first time the Government have decided on the direction of labour is in connection with children. I know there is no compulsion, but the Secretary of State admitted in Committee that it was vital to get children for this work. We cannot get in the harvest without children. In passing this Bill it is important to note that the local authority is not consulted. Why? The local authority is not consulted because many local authorities regard this as a very serious encroachment on the education of the children. I speak of one authority—the Glasgow education authority—which is definitely opposed to the idea of any of the children being taken for potato lifting because they believe that it encroaches on their education, not because of a few weeks in the fields, but because it has a disturbing influence on the general education.
  It is not a nice job. People say that it is a healthy job. I have tried it in a very small way, and it is a back-breaking job. The direction of labour is often talked about in this House. I hope that the Secretary of State for Scotland, in consultation with his Scottish Cabinet colleagues, will try to devise ways and means not of directing people already registered as insured workers or school children, but of getting hold of a whole lot of idle people in this country.
  Mr. Deputy-Speaker: The hon. Member is getting wide of the Bill.
  Mr. Carmichael: One of the things that I was trying to pride myself on was that I was escaping any irregularities. I bow to your Ruling, Mr. Deputy-Speaker. I was saying that if we are accepting the principle of direction of labour, we should not start with the school children. I am a lone hand—a party by myself—and I am not suggesting that the House should be divided on an issue of this kind. I simply record my regret—I do not put it stronger than that—that this Government has found it necessary to exempt children so that they may engage in a particular harvest in Scotland this year.
  Question put, and agreed to.
  Bill accordingly read the Third time, and passed, without Amendment.

  ACQUISITION OF LAND (AUTHORI SATIOIN PROCEDURE) (SCOTLAND) BILL [Lords]
  Order for Second Reading read
  10.14 p.m.
  The Lord Advocate (Mr. G. R. Thomson): I beg to move, "That the Bill be now read a Second time."
  The purpose of this Hill is clearly stated in its Title. It is described as an Act to re-enact in a form in which they apply to Scotland the provisions of the Acquisition of Land (Authorisation Procedure) Act, 1946. That Act laid down the code of acquisition of land for local authorities and Government Departments. It consisted of ten Sections, and the ninth Section dealt with Scotland. It was a long Section and it became a difficult matter for local authority officials and ordinary practitioners to follow the terms of the original Bill. The Bill, the Second Reading of which is being moved tonight, is really a Scots edition brought up to date, and when this Bill becomes an Act Scottish local authorities and Scottish practitioners will be able to have the matter clearly before them. The Bill was introduced in another place and was referred to a joint Committee of both Houses on Consolidation Bills. Certain changes were made which were incorporated with a view to bringing the Bill up to date.
  10.16 p.m.
  Mr. J. S. C. Reid: This Bill, so far as procedure is concerned, is a novelty. It has been rendered necessary because last year Scotland was combined with England in the United Kingdom Bill when there should have been separate Bills for the two countries. The result was that we had an extremely cumbersome Bill so far as Scotland was concerned, and the Lord Advocate was perfectly accurate when he said that the Scottish practitioner could not fairly be asked to deal with it. This Measure is one of relief for the Scottish practitioners, legal and otherwise, who have to take part in the procedure on the acquisition of land, and I quite agree that this Bill will put the position in Scotland in much better shape than it is at this moment. Therefore, I have to agree with the Government, who are to be congratulated on their ingenuity in devising this scheme
  This scheme should never have been necessary. This Bill only removes one of
  1170
  the three main difficulties which existed last year. It removes the difficulty about the Scottish practitioner not being able to handle his practice easily, but the other two difficulties are that we had great difficulty in handling the Bill in this House with this enormous application Clause; and the Bill had to be considered by a Committee upstairs on which there was only a mere handful of Scottish Members. The law in Scotland would have been a good deal better today if we had had our own Act. I do not want to prolong my remarks, but I wish to stress that, grateful as we are for small mercies, we sincerely trust that the Government do not think that by the discovery of this method they have discovered some substitute for separate Scottish Bills. This method is not a satisfactory substitute in any sense, and it does not entitle them to refrain from introducing separate Scottish Bills in circumstances where separate application Clauses are required and where conditions are different.
  I agree that this Bill does not alter the the law in any shape. Therefore, I do not think it would be proper and, indeed, it would not be in Order, to discuss what the existing law is, but it does alter the method in which the law is stated That is all to the good, but it does not define difficulties which are inherent and inescapable when we combine Scotland and England in one Bill in circumstances where that should not properly be done. I welcome without perhaps great enthusiasm the passing of the Bill, but I hope that it will not be regarded as a good thing in future, and that better methods will be used for obtaining this object.
  Mr. Thornton-Kemsley: The first question I want to ask the learned Lord Advocate is this. If it was thought necessary to have a separate Scottish Bill, why was this not produced in 1946 at about the time of the introduction of the English Bill? The House will remember that the English Bill received its Second Reading in April, 1946, 15 months ago. It seems to me that there are two separate techniques—both of which have been adopted by this Government—with regard to Bills which are required, on the one hand, for England and Wales, and, on the other, for Scotland. The first technique is that which was adopted in the case of the Town and Country Planning Bill where there were

  1171
  two separate Bills which had almost identically the same contents, one for England and Wales and the other for Scotland. The other was the technique adopted in the case of the National Health Service Bill and which I hope and believe will be adopted in the case of the Agriculture Bill. In that case there are separate Bills with a time lag in between which allows for improvements to be made in the case of the Scottish Measure which is introduced separately.
  The first point I want to make is that I regret that in the present case His Majesty's Government have followed the second course and not the first. By so doing they will reap the disadvantages of both courses. The learned Lord Advocate said that this was an improved edition of the English Bill, and I shall devote a minute or two to that statement in a moment. I would say here that we have the disadvantage of the time lag but that there has been no profiting by the experience which the lapse of time has made possible. I have no objection at all to codification, and I agree with everything which my right hon. and learned Friend the Member for Hillhead (Mr. J S. C. Reid) has said about it. I have no objection to the codification of Clause 1, but before we codify, we want to be absolutely certain that we have arrived at a final adjustment between conflicting interests which is not likely to be upset in the comparatively near future.
  I make this point in particular with reference to Clause 2 of the Bill. If hon. Members have rendered themselves familiar with the contents of this Measure they will see that under the terms of Clause 2 during a period of five years from the date of the passing into law of the English Act, any confirming authority which has the power to authorise the compulsory purchase of land by a local authority may, if it is satisfied that it is expedient that the local authority shall purchase the land for that purpose and that it is urgently necessary in the public interest that the acquiring authority should be enabled to obtain possession of the land without delay, proceed in accordance with the terms of the Third Schedule of the Bill and may in due course give its written authority for the land to he acquired.
  What does the Third Schedule say? This may be a vital matter to many owners of land acquired under the Bill.
  1172
  The acquiring authority roust first of all publish in a local newspaper notice of its intention to acquire. It must also serve written notice on the occupier of the land. In both cases it has to give the owner 14 days—that is all—in which to make his written objection to the proposal that his land is to be acquired. The authority must then consider any representations which have been made before it gives its authorisation to the local authority to proceed with the acquisition.
  There is nothing in the Bill to say that the Minister is to decide. There is no provision, for a right of appeal or for the affected party to be brought before the Minister to state his case. His property is to be taken from him without any kind of appeal, although he has lodged written objection to the proposal. After those merest forms and elementary courtesies, the acquiring authority has to wait, not for months or for weeks, but for a period of seven days. It has to wait impatiently for seven days. Then it can walk on to the man's land and take possession, in advance of acquisition and of negotiation on the price at which the land is to be acquired. My second point is that this harsh, ruthless and cruel procedure has been perpetuated in the Bill. I am sorry that that is the case.
  My third point is that it is being perpetuated without any real need. The justification for the speedy acquisition procedure of Clause 2 used to be that the land was needed for housing purposes. I ant surprised that the Lord Advocate made no kind of justification for taking upon himself these powers and for perpetuating this scheme of procedure of Clause 2. I thought he would at least tell us why he wants these powers. I hope to show the House that he cannot possibly want them for housing purposes. As long ago as the early part of 1945, Mr. Tom Johnston, who was then the Secretary of State for Scotland, told the House that local authorities in Scotland had housing sites for as much as—
  Mr. Deputy Speaker (Major Milner): I am sorry to interrupt the hon. Member, but I must point out that this is a Bill to re-enact in a form in which it can apply to Scotland the Requisition of Land (Authorisation Procedure) Act, and it is not, therefore, competent for the hon. Gentleman to suggest, as I gather he is doing, that there should be some adjust-

  1173
  ment or alteration in the procedure. It is only a question of whether the Bill should be passed to re-enact the existing Act of Parliament in a form in which it can apply to Scotland.
  Mr. Thornton-Kemsley: I am absolutely in your hands, Mr. Deputy-Speaker, but I thought I was in Order on the Second Reading in calling attention in a sentence or two to the fact that the Bill lays down a procedure for the speedy acquisition of land. I was trying to show that there was no need for this harsh procedure to be applied to Scotland. On the Second Reading—
  Mr. Deputy-Speaker: The scope of the Debate is very narrow. The sole question is whether the Act already passed by this House should be re-enacted in a form applying it to Scotland. We cannot go into the details as the hon. Member is apparently doing.
  Mr. Thornton-Kemsley: As I say again, Mr. Deputy-Speaker, I am entirely in your hands and I will of course bow to your Ruling. The points I wanted to make were against re-enactment at present, and I am against that course on three grounds. The first ground is, as I have said, that I thought we had already sufficient powers under the present Act; the second is that I object to the powers which we already have under the existing legislation; and the third is that these powers are unnecessary. I understand that I am out of Order, and, having made these points, I hope clearly, I will not take up further time in view of the lateness of the hour and of your Ruling, Mr. Deputy-Speaker.
  Question put, and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Popplewell.]

  LOCAL GOVERNMENT (SCOTLAND) BILL [Lords]
  Order for Second Reading read.
  10.31 p.m.
  The Secretary of State for Scotland (Mr. Westwood): I beg to move, "That the Bill be now read a Second time."
  The Bill to which I ask the House to give a Second Reading deals broadly with the machinery of local government and provides a framework of general powers
  1174
  within which local authorities can exercise the functions which they already possess or may obtain in the future. The Bill before the House has been considered in another place, but it originated in a relict left by the right hon. and gallant Gentleman opposite, the Member for the Scottish Universities (Lieut.-Colonel Elliot), who, in 1937, was Secretary of State for Scotland. He appointed a Committee which included representatives of the Scottish local authorities' associations, the three main political parties and the Departments concerned. I am sure that the right hon. and gallant Gentleman will be glad to see that his action is about to bear fruit. Indeed, as I shall briefly explain, his interest in the Bill has not been confined to those days before it actually was the law. The Chairman of the Committee was Sir John Jeffrey, a former permanent Under-Secretary of State for Scotland, of whose death recently hon. Members will have learned with regret. The right hon. and gallant Gentleman, the Member for the Scottish Universities, and I represented our respective parties on the Committee, and the Liberal Party was represented by the late Sir Robert Hamilton. The Committee was asked to consider—and I think it right to make this explanation because there is a feeling that the Bill, while it is I think strictly within the rules of the House should be open to Amendment—local government and public health laws in Scotland, with such amendment as might be necessary to facilitate consolidation, and to secure simplicity, uniformity, and conciseness.
  After a long, weary journey, we were able to introduce the Bill into another place in 1946. We were not able to get the Bill through in that Session, but that enabled further consultation to take place with the local authorities, with the result that the Bill was re-introduced this Session. The Bill came before another place last March. There it was referred to a Joint Committee of both Houses of Parliament. That Committee included Members of both Houses who had had experience of local government in Scotland, and in England and Wales, and it was presided over by the right hon. and gallant Gentleman, the Member for the Scottish Universities. As the report of the Committee shows, it sat for two and a half days, it examined the Measure with great care and, as a result, it introduced a number of minor

  1175
  Amendments in order to prepare it for the consideration of both Houses of Parliament. I would like to pay tribute to the trouble and skill with which the Committee, under the wise guidance and chairmanship of the right hon. and gallant Member for the Scottish Universities, applied itself to its onerous task.
  This Bill is desired very much by the local authorities in Scotland and by those who are responsible for administration, which falls under Acts more than a hundred years old. By this means, which is something a little more than consolidation—by amendment and consolidation—we are able to get into one set of covers administrative legislation of the past 60 years. I do not think that there is any need for me to take up any more of the time of the House. This is a nonparty Measure, something for which all parties have worked and striven. Ten years ago I was appointed to that Committee and it gave me an excuse, if I may say so, to retire from local government, for I really wanted to give my services in helping to bring about a consolidation of local government law. I pay my tribute to all who took part, and particularly to the right hon. and gallant Member for the Scottish Universities, who set up the Committee, which made possible the Bill now before the House and who sat on the Joint Committee, which, as a result of its deliberations, produced this Bill.
  10.37 p.m.
  Mr. McKie: This is largely a consolidating Measure of 382 Clauses and 14 Schedules. The Secretary of State has paid tribute Lo the wise guidance, in the drafting of the Measure, of my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot) for anything that he sponsors, particularly as relating to Scottish Measures, would only be done after due deliberation and careful thought. I would refer particularly, however, to Clauses 133 and 134, which deal, respectively, with the formation of new burghs, and, further, Clause 134 refers to the dissolution of existing burghs. As the right hon. Gentleman the Secretary of State for Scotland will be aware—after all, he comes from the Kingdom of Fife—there are a very large number of small burghs.
  Mr. Westwood: May I assure the hon. Gentleman that this does not affect in any shape or form the existing small burghs, and will, therefore, not affect a single small burgh in the County of Fife?
  Mr. McKie: I am aware that there will be a serious limitation with regard to the formation of new small burghs in the future.
  Mr. Deputy-Speaker (Major Milner): That question may properly be discussed in Committee. It is not a matter for discussion on Second Reading
  Mr. McKie: With great respect, Mr. Deputy-Speaker, I had thought that I was entitled to discuss that aspect of the matter. It does affect the size of burghs, and many existing small burghs are seriously disturbed. However, under Clause 134, with regard to the dissolution of existing small burghs, there is at least one in my own constituency, the ancient and royal burgh of Galloway, which derives its charter from a grant by Charles I. There are many Members on all sides of the House, I feel sure, who will wish to address themselves to the provisions of these two Clauses on Committee stage.
  10.40 p.m.
  Mr. McLean Watson: There is one observation which the Secretary of State for Scotland made and that was that those dealing in local government matters in Scotland would welcome this Measure, because it puts into one volume, all the information required by town clerks and county clerks in a useful form. But, when we come to the Measure itself, it is an entirely different matter. I do not know how far we can go in discussing this Bill when we find that a very large part of it embodies the Local Government (Scotland) Act, 1929, whole Sections of which were passed through this House without a word of debate. Here again, it is being re-enacted without a single opportunity for having a discussion on these very important matters. It is a most extra-ordinary position. We are on delicate ground, Mr. Deputy-Speaker, and I fear you may rule me out of Order. I know that the Bill has been before another place, and Amendments have been made by the Joint Committee. I do not know how far we can go in proposing Amendments, for it may be that this is a consoli-

  1177
  dating Measure and we cannot amend it. There are respects in which I want to see it amended. During the proceedings of the Joint Committee, the Chairman, the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot), confessed that he was disappointed that the district committees had so little power. If he casts his mind back to the discussions on the 1929 Act, he will recall that we fought for these committees to be given a great deal more power than we are giving in this particular Measure. We were told that that Measure was in the interests of efficiency and economy, but that there was overlapping between district and county councils, and that this Measure was to be more efficient and would override all those difficulties.
  I wonder if the right hon. and gallant Gentleman who, as Under-Secretary of State for Scotland at that time, played so large a part in getting that Measure through the House, is satisfied that the economies which were so much desired have been effected by the change? Is he satisfied that these services can now he compared with those we had before 1929? As I have said previously, I am wondering how far we can go in discussing a matter of this kind, but I do want to state, quite frankly, that town clerks and others who have charge of local administration in Scotland will welcome this Bill because it does give them, in complete form, the Acts of Parliament which concern them.
  During the course of discussions on the Fire Service Bill, we heard comparisons between the English and the Scottish systems, and we discovered that, in England, district councils had some real duties to perform under county councils. In Scotland, the district committees have practically nothing to do. They are a mere skeleton of what they were prior to 1929. I would have liked to describe to the House what the district committees did prior to the 1929 Act coming into operation. As a matter of fact, the district committees of the county councils were really effective bodies. County councils, it is true, held the purse-strings —the finance committee of the county council had control of the district council —but so far as the administration was concerned, that lay in the hands of the district council.
  1178
  It was considered far safer to have this county council control over district committees because the burgh councils, both small burghs and large burghs, as we know them under the 1929 Act, were becoming dangerous. Labour majorities were beginning; things were beginning to move; municipal houses were beginning to be seen and a number of things were beginning to be done. The right hon. Gentleman the Secretary of State at the time, thought that the best plan was to have them under the control of the county council. County councils at the time were, of course, good Conservative bodies which could be depended upon. Now, we re-enact in this Bill all the objectionable features that the Secretary of State for Scotland himself took a very large part in opposing when this Measure was before the House in 1929. He has a different story to tell tonight.
  Mr. Gilzean: Mr. Deputy-Speaker, I want to draw your attention to Clause 330 of this Bill. Clause 330 deals with the question of the convener—
  Mr. Deputy-Speaker: I am sorry, the hon. Gentleman is drawing attention to a single Clause. It is quite clear that that would he a matter to raise in Committee. The hon. Gentleman the Member for Dunfermline Burghs (Mr. Watson) did make his observations rather more general. It is not competent for the bon Gentleman to raise matters on the Second Reading of the Bill which it would be more appropriate to raise in Committee.
  Mr. Gilzean: Would you tell me, Sir, when I can raise this question?
  Mr. Deputy-Speaker: When the Bill comes before the Committee.
  Mr. Gilzean: When may I understand that the Bill will be before the Committee?
  Mr. Deputy-Speaker: We shall have to go through the usual 7rocesses of this House and no doubt, in due course, the hon. Gentleman will have the opportunity to raise his question
  Question put, and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House for Thursday next.—[Mr. Popplewell.]

  NATIONALISED INDUSTRY (ORGANISATION)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Popplewell.]
  10.49 p.m.
  Mr. Geoffrey Cooper: It has become practically a custom in this House in a Debate on the Adjournment, for a Member to apologise for keeping the House. I do so, none the less, on this occasion. It is a custom also for hon. Members to seek to justify detaining the House on the score of the importance of the matter to be raised. The question of the organisation of our nationalised industries is one which is going to affect, as I see it, very vitally the productivity of this country.
  In the Debate on the productivity of labour, the Lord President of the Council used the phrase "produce or perish," a phrase which has been 'bandied about rather freely. At the present time, in view of the seriousness of the situation facing this country productivity is vastly important. In that Debate, the Lord President of the Council referred particularly to the productivity of the coal industry. That industry's productivity is going to be affected very considerably by whether nationalisation is going to be successful or not. The Government have embarked on a scheme of nationalisation and I think we are justified in asking ourselves whether it will really produce the goods; in other words, will the industry be more productive than before? We have got to see that the productivity of the coal industry is vitally important, otherwise we are going to be up against an extremely serious economic situation. The Minister of Fuel and Power, during the time that the Bill for the nationalisation of the coal industry was before the House, referred to this move into nationalisation as somewhat of an experiment. Anything that is an experiment involves the possibility of success or failure. I believe that this need not be an uncertain experiment. I believe that we have the experience in this country to ensure that nationalisation will be an unbounded and overwhelming success. But it will only be a success if we do really learn from the experience of running large-scale industry, and benefit from it.
  So far I believe, nationalisation has come to the people of this country only
  1180
  in name. It does not really mean anything vital to them. The test will be whether it succeeds, and whether the people, as consumers or producers, feel that nationalisation is something vital which concerns them. For instance, take the example of the L.P.T.B. If we get into conversation with bus drivers and conductors, so far as one can gather nationalisation does not give them a sense of responsibility which brings out the best in them. This is shown in the disturbances and unofficial strikes which occur. The opinion of the public, as yet, is such that they do not feel that sense of enthusiasm they should feel for an industry which is publicly owned. It is a questions once again that the proof of the pudding is in the eating. It is no use just passing a Measure to nationalise industry unless we can ensure that the method of running it afterwards is going to be exemplary in every detail.
  When the present Parliament assembled two years ago, I realised that it was going to be vital to this Government that we should show at an early date that those industries could be well run after they had been nationalised and I got together a small group of industrialists who had really first-hand managerial experience in industry, and those who had experience as industrial consultants, and a certain number of hon. Members from this side of the House who had experience in running industry. It is noticeable that there is no Member of the Government with executive experience at the head of large scale industry. I make no reflection on the Cabinet for this, since it is merely the force of circumstances that has brought this situation about, and there is no blame attaching to them, but it does impose obligations on the Government, as I see it, to take note of the experience of industry, in getting their ideas and suggestions from those with proved ability, and to apply it to the way in which our nationalised industries are run.
  Before the Civil Aviation Bill came to the House this group of individuals had some useful suggestions to make on the best of running nationalised industry, and put forward a memorandum to the Minister concerned. Unfortunately the Minister of Civil Aviation took little or no notice of these suggestions, and I think it is, in some measure, on that account that the Act has not proved the success it might have been. The present Minister of

  1181
  Civil Aviation has admitted to me—and I am giving away no secrets—that the Act for our nationalised civil aviation has, in some instances, proved a serious failure. It did not incorporate, and it did not give an opportunity for, the new management principles to be developed, and such things as a fully developed consultative system has consequently failed to come into being. It did not make it obligatory to incorporate these principles.
  I believe that the Minister, through turning a blind eye and a deaf ear to these proposals, was led later to turn his back upon his own supporters. They argued vigorously for Amendments giving effect to these suggestions, and it eventually resulted that that particular Minister was turned out of his job. That fact indicates something of the seriousness with which some hon. Members on this side of the House view this particular problem. What we wanted was that there should be formed a fully representative advisory council, on a level with the Board of Control, in charge of each of the corporations. If that representative council had come into being, it would have enabled representations to be made to the corporations so that they would quickly absorb these new ideas of scientific management which some Members on this side of the House wished to be brought into effect in the nationalised industries immediately the Bills were passed.
  I do not want to go into these methods too closely because it is largely a technical matter. Fortunately, the hon. Member for Reading (Mr. Mikardo) is now associated with the Air Transport Joint Advisory Council, and he is endeavouring, in an unofficial way, to do what the Bill failed to do. That however, unfortunately, is not providing a clear channel for suggestions to go forward to the corporations, nor is it the way to enable them to become effective immediately. It will now entail, unfortunately, a long process of education rather than a short one, as could so easily have happened if these corporations were used as a channel for these new and successful methods of organisation in socialised industry to be demonstrated.
  Regarding the coal industry, a similar memorandum was passed by this group, with which I have been associated, to the Minister of Fuel and Power before the Coal Bill came to this House. Although
  1182
  it was turned down, it was interesting to notice that their suggestions lined up with the suggestions put forward by the Mine Managers' Association. This fact, I suggest, indicated that the suggestions we tried to make were of a practical nature based on ideas coming to those associated with the industry over a considerable number of years. In the Bill itself, adequate description was made of the executive side of the industry, the Coal Board, the regional boards, the district and area boards, down to the pits themselves, but no clear indication was given of the advisory and consultative side of the industry which modern methods have shown to be so vital, and which progressive industries are demanding and relying upon for a 'clear chain of contact on the consultative side with every man from the bench up to the management, just as in the past contact was maintained on the executive side by the board of management down through the managers, foremen and charge hands to the man at the bench. The one side can make orders and give introductions, while the other can watch problems which arise and help to clear bottlenecks, and this can be done through continuous advice and consultation taking place at every level throughout the organisation. I believe that the Bill should have incorporated some ideas on modern management methods of the type which I have just described.
  Since nationalisation of the coal industry, I have visited a pit and sat at a joint production committee meeting. It was clear to me that some eight or ten members of that committee—and it was the only form of joint consultation that there was in that pit—were quite unable to bring their ideas intimately to the knowledge of some 2,000 men employed in that pit, and the result was that quite frequently there were unofficial strikes, and stoppages taking place from day to day, and week to week, which could easily have been avoided, by those who know joint consultation methods intimately, because a channel at every level from the coal face to the manager's office would have been provided for the clearing of grievances—on the spot where particular grievances occur.
  I believe that the Minister of Fuel and Power at one time appreciated something of the need for giving an opportunity for the new management methods to express themselves in the coal industry, because

  1183
  before the Coal Board came into being he actually signed a minute in the Ministry giving support to the appointment of a number of personnel managers for the coal industry. The idea of those personnel managers was that they would work alongside the mine manager and relieve him of a great deal of the detailed work, particularly applicable to personnel problems I believe it to he a fact that under nationalisation, the mine managers are finding themselves grossly overworked and personnel managers could cover some of the particular defects which have arisen.
  A certain individual who had experience in large-scale industry; particularly of personnel management, was about to be appointed to act as adviser to the Minister of Fuel and Power but because the Minister of Fuel and Power would not give him an assurance that he would be taken over by the Coal Board when it was formed, this man could not afford to risk not having a job if he was not taken over by the Board. In fact, he was prepared to sacrifice quite an extensive salary, which he could have got in private industry in order to undertake what he believed to be a public service in the coal industry. I believe it was an unfortunate thing that that particular adviser was not appointed.
  I understand that in the North Midlands where a few such personnel managers are appointed, the executives of the Mineworkers' Union have advised that no notice should be taken by the mineworkers of the proposals put forward by these personnel managers. It is an unfortunate situation which has arisen and it would have been avoided if the Coal Board had given their backing to this idea of having personnel managers in the industry, a procedure which in those industries where it does apply has proved to be so effective in aiding production and improving staff relations. This matter was dealt with in a brief article in the "Observer" on 29th June, under the heading "The Man in the Mines." It was by C. A. Lidbury, and the writer indicated in that article that he knew from experience that improvement in the rhythm of production could come from the appointment of personnel managers. He also used these words in that article:—
  1184
  "In 1943 Mr. Ernest Bevin—then Minister of Labour—spoke at an industrial conference of the immense part that personnel management could play in securing this rhythm by improving industrial relations, and he stated that no industry could afford to neglect this help."
  He wrote that the President of the Board of Trade had frequently said similar things. He then went on:
  "One would have thought that in the mining industry, where industrial relations have been so uphappy in the past, there would have been a crying need for this technique. Unfortunately, there is no sign yet of its application—in spite of ominous signs that output under the 5-day week is falling off."
  I believe the defects to which I have referred would have been overcome if a real lead were given by the Coal Board. I believe it is not coming from the Coal Board because the members do not understand the new management techniques which have evolved during the past few years. They have been associated with the old way of running industry, which I might refer to as the "Powell-Duffryn" influence, and which in the minds of miners of South Wales is associated with the autocratic torm of control which was so unsuccessful in the past. The Powell-Duffryn group were not renowned for their particularly happy or efficient methods of operation On the other hand, there are those on the Coal Board with a Civil Service past. Those who have grown up in the Civil Service do not appreciate modern management methods. I note with dismay that a recent appointment to the Electricity Board is again to be of a senior civil servant who has done some splendid work in the Ministry of Civil Aviation but his background is not that of industry. It has been for long an assertion of the Labour Party that we do not intend to run nationalised industry as a a form of Civil Service. Yet here we see some of the most important posts being filled by those with a Civil Service procedure as their background, and they are being placed in charge of administration.
  I believe we have to take a third course—a middle course between the autocratic and bureaucratic forms of management, namely, to provide some democratic form of control. We have to steer between the "Yes man" who traditionally served the autocratic powers of private industry in the past, and the" No man," who comes from the" no man's land "of Whitehall, and who

  1185
  makes a habit of saying" No "to every progressive suggestion.
  During the past year, while the Coal Board has been operating, there have been tried three methods—exhortation, inducements such as special food for miners and the five-day week, and now threats of fines and imprisonment of those who participate in unofficial strikes or stoppages. I believe those are not the ways in which to get men to respond to their responsibilities in public undertakings. These three methods have all been tried, before attempting to employ the proved and successful ways of scientific management processes.
  I want to give an opportunity for the Paymaster-General to reply, and am going to cut my remarks short and sum up by suggesting that in public undertakings we have to provide a new climate for the men to feel that nationalisation is something in which they can play an intimate and responsible part. If any Member of this House were to ask of anyone employed in a nationalised industry the question, "What does nationalisation mean to you compared with the previous conditions under which you worked?" I think he would find that the chief reaction was a sense of dissatisfaction and discontent. I feel that is due to a sense of frustration, due to the individual worker not being given an opportunity to express himself as an intelligent and vital member of a communal enterprise. Until the new boards appreciate that they have to take specific responsibility for introducing these new methods into nationalised industry, I think nationalisation will fail. In so far as nationalisation has been a main plank in this Government's policy, we shall not be able to make a good case out to the electorate when we next go to the country, unless we can show a marked change in the running of nationalised industry compared with that which applies to the methods of running it at the present time.
  11.10 p.m.
  The Paymaster-General (Mr. Marquand): The hon. Member has not left me a great deal of time to reply to such a widely ranging subject. However, I hope I may get an opportunity to say something more constructive and less argumentative than I might have been tempted to do if I had more time. I could not agree with everything the hon. Member
  1186
  has said. For example, I could not agree for a moment with his statement that nationalisation did not mean anything to the workers in nationalised industries. That was not the impression I gained in talking with miners recently in the Forest of Dean in South Wales, whence I come. Though I do not agree with the hon. Member that there has been nationalisation in name only, with no significant change to the workers in the industry, I will agree that the enthusiasm of the work-people in those industries for the nationally-owned undertakings needs to be canalised, if it is to have its full value. We wish to canalise that enthusiasm.
  We accept in full the principle of joint consultation in industry. The Government want to foster joint consultation between the workers and the management in public, as well as in privately-owned, industries. My right hon. Friend the Minister of Labour, in these last few days, has been devoting a great deal of his time and attention in consultation with his National Joint Advisory Council to encouraging the speedy setting up of joint production committees, and the like, in privately-owned industries. We certainly wish to encourage the same sort of joint consultation in publicly-owned industries. I quite agree with the hon. Member that we should, in doing so, apply, where it is reasonably possible, the experience of successful privately-owned industry to the publicly-owned industries. But in doing so we must lay it down that in no case must this system of joint consultation between management and workpeople be regarded as a substitute for trade unionism; nor can it be used in any way as a substitute for the regular machinery of collective bargaining on wages and hours and conditions of work. Nevertheless, there is a field, even when these conditions are laid down, within which joint consultation in publicly-owned industries can be of very great value indeed. I must point out to the hon. Member that provision has been made in all the nationalisation Acts for joint consultation—for the provision of consultative machinery. In the Civil Aviation Act it is to be found in Section 19, in the Coal Industry Nationalisation Act, in Section 46, in the Electricity Bill now before the House, in Clause 53, and in the Transport Bill, in Clause 95. Each of these Acts or Bills lays on the Board of the industry the duty of consulting with the appropriate workers' organisations, to

  1187
  establish consultative machinery by agreement to cover such matters as the safety, health and welfare of the staff, and other matters of mutual interest, including
  "the conduct of the operations they work at."
  Those words are taken from the Coal Industry Act.
  There is adequate provision, I think, in the Acts for the establishment of consultative machinery. In Civil Aviation, to which the hon. Member particularly referred, as a result of the passing of the Civil Aviation Act, there has been set up a national joint council for civil air transport, and under this system there are ten local and national panels covering pilots, engineering officers, draughtsmen, and so on. In that industry, as in the coalmining industry, provision has been made for joint consultation. In the coalmining industry, consultative committees have been set up on national, divisional, and pit levels, and these committees can discuss anything of mutual interest. They are entitled to get reasons for all that the Coal Board does; and I am sure that the Coal Board is trying to give the fullest possible information on production, research, welfare, finance and so on, to these committees.
  As the hon. Member said, the Coal Board has appointed officers on divisional or regional levels to help with these consultative arrangements. The hon. Member says that the channels of consultation are not, in his experience good enough, and are not yet working smoothly enough. That may be so. I do not seek to deny it. We do not pretend that every one of these committees is, necessarily, working perfectly at the present time. Some time must be allowed for the working out of machinery of this kind. The Coal Board has been fully in control of the mines for only a few months, and it has taken over a very difficult responsibility in an industry with a tragic history of misconceived industrial relations. It can hardly be expected that in an industry with a history such as that, that in a moment of time, or a matter of days or only of months, it would be possible completely to change the atmosphere and transform the relations between the work-people and the management so that every pit works smoothly and every grievance is settled. We cannot escape the past
  1188
  history of the industry and we must, I am sure, use in that industry people who know and understand the atmosphere of the industry. I do not say that in that situation we should not take into account what is being done in other industries. I am sure we should. We cannot expect to build Rome in a day in this particular industry, where there is a long and tragic past history.
  I feel convinced that the National Coal Board is moving towards a better system of industrial relations in that industry at all levels and that it is beginning in a proper way by obtaining and securing the confidence of the National Union of Mineworkers. Without that, we can make no progress in the mining industry. I think it would be a mistake—anxious though I am to see the best possible relations established in the industry—to try to advance too rapidly, to try to adopt too suddenly, too surprisingly, all kinds of experiments and ideas which may have been tried out in other industries. The men must be trusted to go slowly in this difficult work. Here as elsewhere, good managements can make joint consultation work. So tar as I have studied this subject, my conclusion on the question is that where there is a really good management, one can make joint consultation work, and in so far as coalmining and civil aviation and other nationalised industries are concerned, the task will be, in the first place, to secure good managements. A good management can make it work and with it, sometimes, one can work miracles.
  I am sure that the way we are trying to proceed in this matter is the right way. I do not want the hon. Member for West Middlesbrough (Mr. Cooper) to think from what I have said that we feel that everything in the garden is lovely, and that there is nothing which needs to be done. I do not rule out the desirability of these industries studying the practice of other industries. I am sure that in the summer schools and similar educational efforts, the Coal Board will take the opportunity of introducing miners and managers to other industries in so far as they can learn something useful from them.
  Question put, and agreed to.
  Adjourned accordingly at Eighteen minutes past Eleven o'Clock.

NATIONAL INSURANCE
  Old Age Pensions
  Old Age Pensions
  France (M.P.s' Visit)
  France (M.P.s' Visit)
EMPLOYMENT
  Manpower
  Manpower
  Juveniles
  Juveniles
  MINISTRY OF LABOUR (STAFF REMOVALS)
  MINISTRY OF LABOUR (STAFF REMOVALS)
  NATIONAL SERVICE (RELEASE PROGRAMME)
  NATIONAL SERVICE (RELEASE PROGRAMME)
SCOTLAND
  Scarlet Fever
  Scarlet Fever
  Measles
  Measles
  Shop Premises (Inquiry)
  Shop Premises (Inquiry)
BRITISH ARMY
  War Graves
  War Graves
  Service Patients (Relatives' Visits)
  Service Patients (Relatives' Visits)
  Court-Martial Proceedings
  Court-Martial Proceedings
  Leave Ration Allowances, Palestine
  Leave Ration Allowances, Palestine
  Officer's Arrest Egypt
  Officer's Arrest Egypt
  Families (Overseas Accommodation)
  Families (Overseas Accommodation)
  R.E.M.E. Camp, Burma (Poles)
  R.E.M.E. Camp, Burma (Poles)
  Voluntary Recruitment
  Voluntary Recruitment
  Families, India (Return)
  Families, India (Return)
  Military Mission, Greece
  Military Mission, Greece
  Military Tattoos, Germany
  Military Tattoos, Germany
  Special Campaign Pensions
  Special Campaign Pensions
  Venereal Disease (B.A.O.R.)
  Venereal Disease (B.A.O.R.)
NATIONAL FINANCE
  Income Tax (Soldiers' Emoluments)
  Income Tax (Soldiers' Emoluments)
  PRISONERS OF WAR (REPATRIATION)
  PRISONERS OF WAR (REPATRIATION)
  Espionage, Canada (Royal Commission Report)
  Espionage, Canada (Royal Commission Report)
TRADE AND COMMERCE
  Paper Manufacture (Straw)
  Paper Manufacture (Straw)
  Factory, Stoke Orchard
  Factory, Stoke Orchard
  Royal Agricultural Show (Catalogues)
  Royal Agricultural Show (Catalogues)
  Cotton Control (Cost)
  Cotton Control (Cost)
  Motor Cycle Tyres
  Motor Cycle Tyres
  Children's Footwear
  Children's Footwear
MINISTRY OF SUPPLY
  Ordnance Factory, Radway Green
  Ordnance Factory, Radway Green
  Second-Hand Looms (Price)
  Second-Hand Looms (Price)
  ALIEN'S VISIT
  ALIEN'S VISIT
  INTERNATIONAL REFUGEE ORGANISATION (DISPLACED PERSONS)
  INTERNATIONAL REFUGEE ORGANISATION (DISPLACED PERSONS)
  BUILDING LICENCES, GLASGOW
  BUILDING LICENCES, GLASGOW
  TEACHERS (SALARY SCALES)
  TEACHERS (SALARY SCALES)
  R.A.F. STATION, COMPTON BASSETT (MEDICAL EXAMINATIONS)
  R.A.F. STATION, COMPTON BASSETT (MEDICAL EXAMINATIONS)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
  INVERNESS BURGH ORDER CONFIRMATION BILL.
  Brought from the Commons; read 1a; to be printed; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2a and reported from the Committee.

LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL.
THE LORD CHANCELLOR acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that no further Standing Orders are applicable to the London County Council (Improvements) Bill.
The same was ordered to lie on the Table.

PROPERTY OF COLONIAL CIVIL SERVANTS.
2.34 p.m.
LORD FARINGDON: My Lords, I beg to ask the first question standing in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government whether it is true that property has been acquired by certain Colonial civil servants in the territories in which they are stationed; if so, in what territories and by which officials; and whether the Government do not consider this an undesirable practice and what steps they will take to prevent it.]
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, cases of the acquisition of property by Colonial civil servants are not usually reported to the Colonial Office. Generally speaking, locally recruited officers are under no restriction in this matter. Under Colonial
36
regulations, which in this respect are applicable primarily to externally recruited officers, an officer may acquire property or any other financial interest in the Colony in which he is stationed only with the prior approval of the Governor, who has to be guided in his decision by whether the officer's private affairs might be brought into real or apparent conflict with his public duties through such acquisition. It is impossible for my right honourable friend the Secretary of State for the Colonies to say what officials have acquired property in the various territories.
From time to time Governors seek guidance as to the exercise of their discretion in particular classes of cases from the Secretary of State. My right honourable friend feels that the regulations are thoughtfully administered by Governors in the public interest.
LORD FARINGDON: My Lords, arising out of that answer, may I take it that the practice on the whole, since it is clearly under rather strict control, would not be approved; and would it not be a good thing if the Secretary of State had rather more information on the point? There is a third point, if I may put it. I think there is a rule that retiring Governors, at any rate, do not settle down in the territory from which they are retiring until at least five years after their retirement. I should like to know if that is in fact the rule, and whether it applies to anybody below the rank of Governor.
VISCOUNT HALL: The last point put by the noble Lord is one about which I shall have to make inquiries. I know of no regulation which prevents an ex-Colonial Office official from settling down in the territory from which he has retired.
LORD FARINGDON: It is the case with Governors, I think.
VISCOUNT HALL: I will make inquiries and let my noble friend know about that. With regard to the question of the Secretary of State for Colonies being made acquainted with these matters, I think it is right to say that I know of no complaint which has been registered by any aggrieved party as to any person acquiring territory, as is suggested. If my noble friend knows

37
of any cases which he thinks ought to be brought to the notice of the Secretary of State, and he will let me know of them, I will certainly see that they are brought to the notice of my right honourable friend.
VISCOUNT ELIBANK: Is it not a fact that the Colonial Office regulations have contained orders in these matters for generations, and that in the course of many years they have hardly ever been transgressed?
VISCOUNT HALL: So far as I know, that is the case. There are quite a number of regulations and, as I have explained to my noble friend, I personally know of no case, and I know of no case registered at the Colonial Office, in which these regulations have been transgressed.

SUDAN DEFENCE FORCE.
LORD FARINGDON: My Lords, I beg to ask the second question standing in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government whether they can now make any statement concerning the infliction of flogging on members of the Sudan Defence Force.]
THE CHANCELLOR OF THE DUCHY OF LANCASTER (LORD PAKENHAM): My Lords, the Governor-General of the Sudan has informed my right honourable friend that the General Officer Commanding has issued orders forbidding floggings except in cases of crimes with violence and of offences in the lines. Floggings can only be ordered by commanders of battalions. The effect of these rulings is that the penalty of flogging is now only inflicted in a very few cases. The Governor-General is forwarding statistics to my right honourable friend which I shall communicate to the noble Lord as soon as they are received.
LORD FARINGDON: I should like to thank the noble Lord for his reply, and particularly for the promise contained at the end of it. I would, however, like to ask him whether in fact the provision which he mentioned at the beginning of his reply does in any way change the situation as it existed before. I ask that question in particular, because ever since
38
the end of the war I have made repeated inquiries in this matter and have been assured that as soon as the Force was put on a peace-time basis the whole matter would be thoroughly overhauled.
Is there any change? I cannot quite see where the change is. Offences of violence and offences in the lines seem to me to cover almost everything.
LORD PAKENHAM: I think it mould be as well before replying to that to wait until we receive the further information which I have promised to the noble Lord.

SHORTAGE OF NEWSPRINT
EARL HOWE: My Lords, in putting the question of which I have given Notice, may I say that I put it as a member of the general public? I have no sot t of interest in the Press in any shape or form. I beg to ask the question that stalks in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government, whether their attention has been drawn to the very serious restriction of the size of the national newspapers, due to the shortage of newsprint: whether they ace aware of the serious effect of this restriction both at home and overseas; whether they can indicate the reasons which have produced this situation, and what steps they propose to take 1:o remedy it; and whether a similar reduction is being forced upon Government publications.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT ADDISON): My Lords, I very much regret that my noble friend who is due to answer this question is not here. I am afraid I do not know the answer myself.
EARL HOWESpeaking colloquially, "so what"?
VISCOUNT ADDISON: My noble friend Lord Ammon has a copy of the reply.
LORD AMMON: My Lords, owing to the growing stringency of the balance of payments position, it has been necessary to review the import programme for the twelve months beginning July 1, 1947; and, among other reductions in the programme, a reduction in the expenditure for newsprint has been made. Following discussions with the newspaper pro-

39
prietors, deliveries of newsprint due from North America during the coming six months are to be deferred to the extent of 48,400 tons, and the position will be reviewed at the beginning of next year. It has been necessary to reduce the consumption of newsprint accordingly. Every effort is made to reduce the amount of paper used by Government publications to a minimum and this will continue to be the case.
EARL HOWE: My Lords, may I ask His Majesty's Government how they expect that the electorate of this country can be lined up satisfactorily behind the Government in the appallingly difficult international situation with which we are faced to-day, if the Press is to be restricted in size and unable to report in detail? May I also ask how it is expected that the British public will be fully able to understand the position in such parts of the world as Greece, Palestine, India, Egypt, America, and various other places, and the position of U.N.O., unless we are able to get full information as to what is going on? Furthermore, may I ask the Government whether they are aware of the extent to which the great newspapers of this country are read overseas? I refer to such papers as the Daily Herald, The Times and the Daily Telegraph. I have been abroad lately and I have had the opportunity of a good deal of discussion with foreigners about opinion in this country. They ask many questions and are very anxious to study British newspapers. Does the noble Lord not think that it is a very mistaken decision to reduce the size of the newspapers as has been done? Moreover, if economies are necessary, surely there are other economies which could have been made in national expenditure which would have been much more fruitful, such as cuts in films and so on. I do not want to argue the point, but I cannot put it down as a Motion and therefore I have put it down as a question.
VISCOUNT ADDISON: My Lords, I am sure the noble Earl will allow me to say, without in the least deprecating the importance of the matter which he has raised, that starred questions are not open to discussion, and I must ask him to observe the rules of the House. I will do my best to supply him with the answers he requires.
THE MARQUESS OF SALISBURY: Possibly the noble Earl is influenced by the fact that it is impossible to ventilate his views in the Press.
VISCOUNT ADDISON: I think the proceedings in this House receive very generous notice in the Press, and I have no doubt that this will be amongst them. I am solely moved to maintain the usual practice of this House.
EARL HOWE: My Lords, of course I entirely agree with the noble Viscount, the Leader of the House, and I am entirely on his side in this matter, but there is no opportunity of putting this down as a Motion. I do hope the noble Viscount will bear in mind the questions I have raised.
LORD BARNBY: Could the noble Lord state what proportion of the cut of 48,000 tons affects supplies from Canada and what proportion affects supplies from the United States of America, and whether, in the case of Canada, it is to be understood that it involves the breaking of existing contracts?
VISCOUNT ADDISON: I could not answer those questions without notice.

BRIGHTON CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 2a (according to Order), and committed.
MEXBOROUGH AND SWINTON TRACTION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 2a (according to Order), and committed.

HOUSE OF LORDS OFFICES.
Order of the Day for the Consideration of the Fourth Report from the Select Committee read.
The Committee reported as follows:
1.—Reporting Staff.
The Committee sanctioned the salary payable to Mr. A. A. Reid, former Editor of Debates, on his temporary re-employment as a sub-editor. The Committee also sanctioned the engagement of an additional temporary reporter and the scale of fees to be paid to persons holding that position.
The Committee approved an arrangement made with Messrs. H. Craig-Kelly Limited for the supply of additional typists on occasions when the House sits after dinner.
2.—Meal Allowance.
The Committee sanctioned the payment of a meal allowance to officials working late in the evening after a normal day's duty.
3.—Gratuity to Legal Personal Representative of a Retired Doorkeeper.
The Committee sanctioned the payment of a gratuity under Section 2(2) of the Superannuation Act, 5909, to the legal personal representative of Mr. George Charles Hogbin, doorkeeper who retired on the 31st December, 1945, and whose death occurred on the 12th of November, 1946.
4.—Custodians.
The Committee agreed to the final arrangements made by the Clerk of the Parliaments in regard to the establishment of members of the Custodian Staff who are under 65 years of age.
5.—Porters.
The Committee authorised an increase in the weekly wage of the porters.
6.—Additional Housemaid.
The Committee sanctioned the appointment of an extra housemaid for the cleaning of additional rooms.
7.—Refreshment Department.
The following Report from the Sub-Committee on the Refreshment Department on proposals for the amalgamation of the kitchen accommodation of the two Houses was laid before the Committee and agreed to:
"The Sub-Committee on the Refreshment Department report to the House of Lords Offices Committee that, in their opinion, the considerations which influenced the decisions of the two joint Committees of 1936 and 1944–5 still obtain, and that an amalgamation of the two systems is not at present desirable; that the accommodation asked for by the Commons is essential to the use of the House of Lords, for which it is already inadequate, and would not in any event meet the needs of the House of Commons as represented to the Committee."
8.—Official Report (Hansard).
The Committee approved the arrangements made with the Stationery Office for the publication of a weekly Hansard of Lords Debates.
9.—House of Lords, Ventilation of.
The Committee approved the proposals made by representatives of the Ministry of Works to carry out certain experiments to improve the ventilation of the Chamber.
10.—Extra Duty Allowance.
The Committee sanctioned the application of Treasury Establishment Officers Circular No. 62/47 for payment of an extra duty allowance to any officer of the House of Lords to whom it may be applied.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DROGHEDA): My Lords, I beg to move that the Fourth Report of the Select Committee be now considered.
Moved, That the Report be new considered.—(The Earl of Drogheda.)
On Question, Motion agreed to.
THE CHAIRMAN OF COMMITTEES: My Lords, there are two matters to which I might refer in this Report. The first is that arrangements have been made with the Stationery Office to publish a weekly Hansard of our debates. That will take place as from the beginning of the next Session. The other matter is with regard to the ventilation of this House, which some people think is not quite ideal. It is not a very easy matter to remedy and the Office of Works are going to carry cut various experiments to see how best the matter can be remedied. I beg to rove that this Report be now agreed to.
Moved, That the Report be now agreed to.—(The Earl of Drogheda.)
On Question, Motion agreed to.

ELECTRICITY BILL.
2.49 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 Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair.]
Clause I:
Main functions of Electricity Boards.
1.—(1) There shall be established an Authority, to be known as the British Electricity Authority, and it shall be the duty of that Authority as from the vesting date to develop and maintain an efficient, co-ordinated and economical system of electricity supply, for all parts of Great Britain except the North of Scotland District …
(2) There shall be established Boards, to be known by the names mentioned in the first column of the First Schedule to this Act, for the areas which are described in general terms in the second column of that Schedule and are to be defined by orders made under this Part of this Act, and it shall be the duty of every such Board as from the vesting date to acquire from the British Electricity Authority bulk supplies of electricity and to plan and carry out an efficient and economical distribution of those supplies to persons in their area who require them.
(6) In exercising and performing flier functions the Electricity Boards shall, subject to and in accordance with any directions given

43
by the Minister or Secretary of State under this Part of this Act—

(a) promote the use of all economical methods of generating, transmitting and distributing electricity;

(b) secure, so far as practicable, the development, extension to rural areas and cheapening of supplies of electricity;

(c) avoid undue preference in the provision of such supplies;

(d) promote the simplification and standardisation of methods of charge for such supplies;

(e) promote the standardisation of systems of supply and types of electrical fittings;

and shall also promote the welfare, health and safety of persons in the employment of the Boards.
VISCOUNT SWINTON VISCOUNT SWINTON had given Notice of three Amendments to this clause—namely, in subsection (1), after "There shall be established," to insert "not later than six months before the vesting date"; in subsection (2), to omit "There shall be established" and insert "(2) The British Electricity Authority shall not later than three months before the vesting date constitute"; and, in subsection (2), after "made," to insert "not later than three months before the vesting date." The noble Viscount said: I beg formally to move the first Amendment in my name and to refer to my three Amendments to this clause, because I think the noble and learned Viscount, the Lord Chancellor, has met the points on certainly two of the Amendments, and possibly also the third in an Amendment which is in his name on the paper. As your Lordships will see, the objects of the Amendments are: first of all, that the British Electricity Authority—which is, of course, the Central Board—should be appointed not less than six months before the vesting date; secondly, that the area boards should be appointed not less than three months before the vesting date; and thirdly, that the areas to be covered by these boards should be properly defined at least three months before the vesting date. At a later stage—I think on Clause 14—the noble and learned Viscount, the Lord Chancellor, has down Amendments which I think satisfactorily meet all three of my points. Perhaps it will be convenient, therefore, if I formally move, in order that the Lord Chancellor could make a statement confirming that the points are covered—in which event I shall ask leave to withdraw my Amendment.
Amendment moved—
Page 1, line 8, after ("established") insert ("not later than six months before the vesting date").—(Viscount Swinton.)
THE LORD CHANCELLOR (VISCOUNT JOWITT): The noble Viscount's Amendment has the object of securing that six months before the vesting date the Central Electricity Authority shall be established, and by that, I mean the personnel of the authority shall be established; and that three months before, the personnel of the area boards shall be made plain. In principle, I entirely agree with that. The noble Viscount's Amendment is, I am told, wrong in form, in that the Central Authority is established, apart from its personnel, by the passage of this Bill. I wanted to meet the substance of the Amendment and I have three Amendments down. If I may take the first one, I think it is convenient first of all to look at Clause 14, page 18, line 9. I there propose to insert:
"The vesting date shall not be less than six months after the establishment of the Central Authority and not less than three months after the establishment of all the area boards and the definition by order made under Part I of this Act of all the areas for which those boards are established."
So there I give the noble Lord his three months after the establishment of the area boards and the definition of the areas and six months for the personnel of the Central Authority.
As your Lordships will remember, the personnel of the Central Authority is fully perfected only by the appointment of some of the area board Chairmen, just as the area boards in their turn are only fully perfected by the appointment of the consultative council. I have therefore put down two more Amendments. On page 6, line 17, there is an addition to subsection (2) of Clause 3 which reads as follows:
"Provided that, until the area boards have been established, the Central Authority shall be deemed to be properly constituted notwithstanding that the members to be appointed under paragraph (b) of this subsection have not been appointed or have not all been appointed."
Then, on page 6, line 31, at the end of subsection (3), there is the other Amendment which reads:
"Provided that, until the consultative council has been established, an area board shall be deemed to be properly constituted notwithstanding that the board does not include

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the member referred to in paragraph (b) of this subsection."
I think I can fairly say that I have in these Amendments met entirely the substance of what the noble Viscount had in mind.
VISCOUNT SWINTON: I am much obliged to the noble and learned Viscount for such an auspicious beginning and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD HAWKE LORD HAWKE moved, in subsection (2), after "Act," where that word occurs for the second time, to insert "after consultation with the British Electricity Authority." The noble Lord said: The Amendments of the noble and learned Viscount, the Lord Chancellor, to Clause 14, secure that the Central Authority will have six months to work before the vesting date and three months before setting up area boards and defining their areas. By this Amendment we seek to secure that during those three months the Minister shall consult with the Central Authority as to the delineating of the areas of the area boards. As I see it, there might well be three stages in this delineation. There would be first a preliminary consultation as to the adequacy of the numbers and the location; then there would be further consultations about the setting up of the boards and the more precise definition of their boundaries; and finally, which may well be later than the vesting date even, the final delineation. I hope that the noble and learned Viscount will be able to accept this Amendment, which seems definitely to be one of common sense. I beg to move.
Amendment moved—
Page 2, line 13, after ("Act") insert ("after consultation with the British Electricity Authority.").—(Lord Hawke.)
VISCOUNT ELIBANK: I wish to support the noble Lord, Lord Hawke, in this Amendment. He has put the case very clearly indeed, and it requires very little elaboration from me. I should like, however, to add to what he has said, that if the British Electricity Authority are to have the responsibility on their shoulders for the general well-being of the electrical industry in the country, I think it is highly important that they should be taken into consultation from the beginning by the Minister and that the Central Electricity Authority should have a say in the definition of areas, how they are
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laid down, and generally in regard to those matters.
THE LORD CHANCELLOR: I have no difficulty in accepting this Amendment in principle, but I suggest to the noble Lords in whose names it stands that it would be more convenient if we had the Amendment on Clause 4, because there this precise question is dealt with. There is an Amendment down to Clause 4 in the names of Viscount Elibank arid the Earl of Rothes, and I do not think we want these words in twice. I think that that clause, if it is amended in the way suggested, will completely meet the point, and I suggest that the noble Loll; concerned should not ask to have the Amendment made here. I will accept the Amendment when we come to Clause 4.
LORD HAWKE: I thank the noble and. learned Viscount for pointing this out. think he is perfectly right and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
2.58 p.m.
LORD RENNELL LORD RENNELL moved, in paragraph (b) of subsection (6), to leave out "so far as practicable." The noble Lord said: I drew attention on the Second Reading of this Bill to a matter relating to agriculture and the development of electricity supplies in agricultural districts. If I seemed slightly jubilant then, I am more sober now. Paragraph (b) of subsection (6) as it stands does no more than advocate the development and extension of electrical supplies to rural areas and to cheaper supplies A electricity. The insertion of the words "so far as practicable" seems undesirable, as giving everybody the greatest possible opportunity of procrastination. The use of the word "development" does not mean that extension of electricity supplies to every farmhouse has to be undertaken immediately; but this proviso seems to make the provision of these necessary supplies unduly remote. I would, therefore, like to see these words taken out.
In order to save your Lordships time, I might perhaps be permitted to add here on this Amendment what I think perhaps ought more appropriately to have been added on the Motion that the clause shall stand part, and that is to deplore the lack of any real statement

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of policy about the development of electricity in rural areas. I would have liked really to move the insertion of another paragraph just after paragraph (b) dealing with that very vexed question of capital charges for the extension of electric lines and supply mains in country districts, but I have not done so because I am aware that there is a very great difficulty in making a uniform charge on people in any rural district on the same basis as those living in an urban district. The question bristles with difficulties. They are difficulties which are recognized even in the most highly electrified countries in the world, like Switzerland and certain parts of North America.
It is idle to suggest that everybody should have a supply at the same rate, but I do ask the noble and learned Viscount who is going to reply to this Amendment to consider between now and the Report stage whether something could be put in, either here or in whatever appropriate place may be found, to hold out some hope of a coherent development whereby rural industries, and agriculture in particular, are not penalized by very heavy connexion charges on capital account, which in fact preclude the private person and the small farmer from receiving electricity. The matter is of some complication because I believe it should be considered in connexion with certain clauses in the 1899 Act—which will be reached in the Fourth Schedule in due course—where the original scheme which is still carried on to-day was laid down. I think it is a contention of the farming industry generally that the provisions there laid down are no longer applicable in to-day's circumstances and require very drastic revision. I do not think it is possible to have, and it is not for me to suggest, Amendments which would remove those difficulties at this stage, but it is a difficulty which I am sure His Majesty's Government will recognize and will wish to do something about if they have the development of our rural areas and agriculture in particular at heart, as their spokesmen have so frequently stated.
I therefore ask them to omit in the first place the words "so far as practicable" from paragraph (b) of subsections (6). I would also ask the noble and
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learned Lord to consider whether an additional paragraph could be inserted dealing with those difficulties of capital charges for connecting remote and rural districts and for dealing with a logical and coherent development as compared with the rather spotty development of electrical supplies in rural areas on account of the working of those clauses in the 1899 Act referred to in the Fourth Schedule. I beg to move.
Amendment moved—
Page 3, line 16, leave out from ("secure") to ("the").—(Lord Rennell.)
THE LORD CHANCELLOR: This Amendment is to leave out the words "so far as practicable." I am quite willing to have placed upon the Electricity Board the duty of calling on "spirits from the vasty deep," but I cannot have them responsible for whether or not the spirits come. Paragraph (b) of subsection (6) reads:
"secure, so far as practicable, the development, extension to rural areas and cheapening of supplies of electricity."
I sincerely hope that they will be able to achieve all those ends, but I cannot promise it. It is quite possible that the supplies to rural areas on the scale on which we should all like to see them would cost a great deal of money which will, I think, as some of your Lordships have already said in the course of the Second Reading debate, mean an extra charge on the urban people who will carry the rural people on their backs.
Then, with regard to cheapening of supplies of electricity, the price of electricity depends primarily upon the cost of coal. I sincerely hope that we shall be able to cheapen the cost of coal, but no human being can say more than this, that he will do the best he can to secure that end. I cannot guarantee that anybody will succeed in that, and, therefore, it seems to me essential that we should keep in the words "so far as practicable." Consider what would happen otherwise. Suppose there were some cantankerous-minded farmer living a long way from anybody else to whom no electricity was brought. He might try to mandamus the Board and say: "You have not done your duty towards me. By the Act of Parliament, without any qualification, you were to secure the extension of supplies and the cheapening of supplies, and yet you are asking me to

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pay a very high price or you are not going to do anything at all." We cannot put the Board in that position. We must be in a position, I quite agree, where we will do the best we can, but no Board can do more than that and, therefore, in these uncertain conditions, I cannot say more than that.
With regard to the additional paragraph which the noble Lord speaks of, I am not sure I quite understand exactly what he wants. If he wants a statement of our policy, that one of the most important things we can do when we have got the machinery of this Bill is to try to extend to the rural areas the benefit of a coherent supply, I entirely agree with that. It may cost a good deal of money but it may be one of the conditions without which we shall not get people to live in the rural areas, and it might, therefore, be absolutely essential for our continuance as a great people. Therefore, one must consider the question of cost in that relation. That assurance I can give the noble Lord, and I will gladly consider any new provision which he wants to introduce; but, as it seems to me, I am afraid that I cannot do more than repeat that for the reasons I have given it is essential that we should maintain those words "so far as practicable."
VISCOUNT SWINTON: I think the whole House will he grateful to the Lord Chancellor for that serious and very realistic speech. It comes as a most agreeable change. We have hitherto been told, not by the Lord Chancellor or by the Leader of the House, that the justification for this Bill would be cheap arid abundant electricity, that the valleys would blossom like a rose and that every farmhouse should get a nice cheap supply. All these speeches were made and of course it was all going to be so much cheaper. But now we know it is not. We know on the authority of the Lord Chancellor, perfectly rightly, that it all depends on coal, and if the price of coal continues to rise then the price of electricity, which under the free enterprise of the municipality has kept level although the price of coal has risen like that, will rise also.
The Lord Chancellor was equally realistic about the country. He said that if we all had belief in the country and it was quite right that we should give the people in the country electricity and give
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them it at prices which would be agreeable to the people who live in the country, there was only one way in which that could be done, and that is to charge the people in the towns mere. This is more realistic. I am not saying that that may not be a necessary course to take. I am not sure; we may have an opportunity at a later stage of discussing the very important questions of policy of whether areas should pay for themselves or one area should subsidize another. I am very glad we are entering upon these debates in this new a ad realistic spirit, but I cannot refrain from adding that if this had been the kind of speech which had been made on the General Election it is extremely doubtful whether there would have been a mandate for this Bill.
LORD RENNELL: I am very grateful to the noble and learned Viscount for what he has said, which I think will do very much to remove the disappointment which I know has been felt in the agricultural world at the insertion of these words "so far as practicable." To clear up one point which he asked me in regard to what I would like to see as an optimum, it is that there shall be no connexion charges, but not necessarily that there should be a uniform rate throughout the country for supplies. It was in that direction that I would have liked to have seen a paragraph inserted. I think that answers the question, and, with the assurance that he has given, and I hope the publicity which will attend it, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause I shall stand part of the Bill:
THE EARL OF LYTTON: On the Motion that Clause r stand part of the Bill, I would like to put a question to the noble Viscount, the First Lord of the Admiralty, with regard to the last words in subsection (6). Your Lordships will remember that when I was speaking or the Second Reading of the Bill I mentioned the number of rights, privileges and interests enjoyed by workers under the existing conditions, and I asked the Government if they could give us an assurance that these would be continued under the new set-up. The First Lord of the Admiralty was good enough to reply to me, and I have the reference in

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Hansard in which he assured me that there was provision contained in the Bill for the purposes of protecting the pension rights and the promotion of the welfare, health and safety of persons in the employment of the boards. The noble Viscount perhaps had in mind Clauses 53 and 54, to which Lord Lucas had also drawn my attention earlier in the discussion. I quite admit that Clause 54, dealing with pensions, does deal with one point, and I am quite satisfied that pensions will be protected; but Clause 53 does not meet the case at all. Clause 53 is dealing with the Central Authority and what I was concerned with was provision by the area boards with regard to health and so forth.
I am not proposing any addition, but I would like once more to ask if an assurance can be given that the workers will not be worse off in the future than they have been in the past. The noble Viscount, Lord Hall, mentioned on the Second Reading the matter of co-partnership. He expressed some doubt as to whether that could be continued, because co-partnership, as he rightly pointed out, depends upon profits and, as the industry was not going to be conducted for profit, there might not be any profits out of which co-partners could be paid. That I quite understand, but I thought he also said that in that case compensation would be paid. With regard to all the other matters I am not, as I say, doing more than asking for an assurance that all the existing benefits will be continued or, where that is not possible, that some equivalent will be paid. The workers in my own company have assured me that they have in fact received such an assurance from the Minister, and I feel that, if that is so, the right place for such an assurance to be given is in Parliament. I therefore ask the noble Viscount, the First Lord of the Admiralty, whether he can give me the assurance which I asked for on the Second Reading.
VISCOUNT HALL: I have made further inquiries arising out of the speech of the noble Earl, and I find that I can repeat the assurance which I then gave him. The noble Earl did refer to Clause r, subsection (6). That does deal with electricity boards and, in the reference to boards, it means that the Central Authority and the area boards shall promote the welfare, health and safety of
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the persons in the employment of the boards. By this provision it is intended to place upon the boards an obligation to behave, in a real sense, as the model employer. I do not want to repeat at length what I said on the Second Reading, but I do know that the Minister is in touch with the trade union representatives representing 95 per cent. of the industrial workers. I am not including, of course, the clerical workers in that, but the guarantee which is given to the industrial workers will also cover the other workers at the same time. If the noble Earl desires to discuss this matter at any time in the future, and if there is any doubt in his mind with regard to the assurance which I am now giving for the second time, then I shall be very glad to meet him and discuss the matter further.
THE EARL OF LYTTON: I am very much obliged to the noble Viscount. I have no doubt in my mind at all, but I only wanted the assurance to be stated publicly.
Clause 1 agreed to.
Clause 2:
Additional functions of Electricity Boards.
(3) The Central Authority shall have power—

(a) to manufacture electrical plant and electrical fittings;

(b) to sell, hire or otherwise supply electrical plant and electrical fittings and to instal, repair, maintain or remove any electrical plant and electrical fittings; and

(c) to carry on all such other activities as it may appear to the Authority to be requisite, advantageous, or convenient for them to carry on for or in connexion with the performance of their duties under the foregoing section or with a view to making the best use of any assets vested in them by or under this Act:

Provided that this subsection shall not empower the Central Authority to manufacture electrical plant or electrical fittings for export.
(4) Any area board shall have power—

(a) to sell, hire or otherwise supply electrical fittings and to instal, repair, maintain or remove any electrical fittings; and

(b) to carry on all such other activities as it may appear to the Board to be requisite, advantageous or convenient for them to carry on for or in connection with the exercise and performance of their functions under the foregoing section or with a view to making the best use of any assets vested in them by or under this Act:

Provided that nothing in this subsection shall empower an area board to exercise or perform any of the functions referred to in paragraph (a) of the last foregoing subsection or paragraph (b) of the last foregoing subsection so far as it relates to the sale, hire or supply of electrical plant.
3.18 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved to leave out paragraph (a) of subsection (3). The noble Viscount said: This is a very short, but very important point. If your Lordships look at page 4 of the Bill, at subsection (3), you will see:
"The Central Authority shall have power—

(a) to manufacture electrical plant and electrical fittings;

(b) to sell, hire …"

or otherwise dispose of such fittings, and the area hoards have a power to sell. I have nothing to say at all against the boards selling. I think they certainly ought to have that right. It is convenient and right that the distributors of electricity should be able to sell fittings to their people. Many of the companies have done it successfully. It enables them to promote standardization and so on. But that is a very different thing from manufacturing.
I cannot conceive that in any circumstances the Central Authority, which is the body which is given this power to manufacture, will really go into this business. It is not as if it was a small and simple business, it is not; it is a most complex business, requiring vast machinery, great knowledge and, indeed, vast use of patents sometimes. A great many patents are pooled, and even more often now than the use of patents there is the use of what the Americans call "the know-how." There is a tendency—certainly in America, and I am not sure whether it is spreading—not to go in so much for patents, but to go in for your knowledge of particular forms of manufacture, and a particular improvement. No business, or hardly any business, which is successful in retailing goes into manufacturing. If you take what I suppose are the two most successful retail businesses in this country—and there are others like them—take Woolworth's or Marks & Spencer, or indeed any of the great retailing firms of this country; nothing would induce there to go and put their money into manufacture. They make very good bargains with the people who manufacture goods
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for them. They buy on a large scale, and they make extremely advantageous contracts; but they would not be mad enough to engage in manufacturing themselves.
So far as the question of standardization is concerned, this body will have every opportunity of securing standardization because they will be the sole placer of orders in this country. Therefore, they can ensure standardization in any way they like. I hope that they will not go rather to the extreme in the matter of standardization because, sometimes, if you try to bring about the most complete and universal standardization you tend to put a stop to progress. The only other argument which can be advanced on tie Government side is that this undertaking may find itself up against a ring. I cannot imagine anyone more compete at to deal with a ring than an organization such as this which, as I say, is the only body which can place any orders. I remember Mr. Deakin once saying—I think it was at an Imperial Conference: "In the market to-day the seller is courtier and the buyer is king."
It is true, or we hope it is, that we are moving into an era of freer trade. If you are up against a ring, and are not able to break it with the very complete monopoly power that you wield—which to me is inconceivable—then surely the right way of dealing with it is not to go into manufacture, which may mean your losing a great deal of money because you will probably manufacture more dearly than the ring, but to have a proper investigation and to have the whole facts ascertained. I submit that that would be the right thing to do, and I would strongly support the Government if they took such action with a view to forcing the breaking of a ring. But the worst way of breaking a ring, if it exists, is to go into a very complicated, highly technical and scientific industry like this and to try to manufacture the goods your.. self. While, therefore, I sympathize with what is behind this, I am quite sure that the Government by this power—which I cannot believe that they will ever exercise—are acquiring means to do the right thing in the wrong way. I beg to move.
Amendment moved—
Page 4, line 6, leave out paragraph (a).—(Viscount Swinton.)
LORD LLOYD: I would like to support the Amendment which has been moved with such admirable clarity by my noble friend Viscount Swinton. Under this clause it seems to me that the Government are taking a power as it were to go into State trading. One of the chief reasons which they have advanced for taking this power is that in the past many of the companies have had such a power. On that point I would just like to say that the companies have practically never used that power. The reason they have not done so is the reason that has been given by my noble friend Viscount Swinton, that except in very rare cases it was not an economic proposition for them to do so. I am sure the Government have no intention of using their power in this connexion. The Minister, in fact, has said so quite clearly in another place, and he has given the very reason to which I have just referred, saying that in his opinion it would not be economic. Furthermore, it was not within the Government's mandate to do so.
If that is the case, the Government are taking a power which they are not going to use. I suggest that it is bad legislation continually to take powers which are not to be used. That is the first thing I wish to say. The second thing I wish to say is this. I would like to reinforce what my noble friend Viscount Swinton has said about methods of breaking rings and cartels. I quite appreciate what other noble Lords have said in this connexion. The noble Lord, Lord Lucas of Chilworth, I think it was, speaking about this on Second Reading, made a particular point about a lamp ring. I do not know as much about lamps as Lord Lucas, and I daresay he may have been right. But I do not believe that this is the way to "bust" a lamp ring. The Government have started a Royal Commission to make inquiries concerning the Press. That may be a laudable object or it may not—some noble Lords think that it is not. If there is a lamp ring, what is to stop the Government launching a Royal Commission to investigate it? That is the way to deal with such a matter. It is not the right way, I suggest, to do what is proposed to be done in this clause. Therefore, I would like strongly to support the Amendment.
LORD WOLVERTON: I also would like to support the Amendment. I think it is entirely wrong that the Government should go into the business of manufacturing in this way. Lord Lucas talked about a lamp ring during the Second Reading debate, and he said that he hoped that the Government would use these powers in an offensive and not a defensive way. I have been supplied with some figures which I should like to read to your Lordships, as I think that they are quite convincing. The Electric Lamp Manufacturers' Association, which represents a number of the largest of the lamp manufacturers in Great Britain, in the year 1921 produced 20,000,000 lamps of 6o watt size, the retail price of which was 5s. 6d. each. In 1939 they produced 83,000,000 such lamps, and the price dropped to 1s. 7d. each. In 1945 they produced 109,000,000 such lamps and the price then was down to 1s. 3d. That is quite clear evidence that they have been driving down prices very rapidly, although there certainly is an organization. It should not be forgotten, however, that many organizations of this kind were set up in the difficult times between the two wars, when there was not a sellers' market but a buyers' market and it was very difficult to protect the British industry from foreign competition.
Now let us look at what the Association have been doing lately. In the first quarter of 1938 they exported 4,900,000 British lamps, and in the first quarter of 1947 they exported 9,100,000. So I do not think there is much justification for attacks on a so-called lamp ring. These people have been helping us, be it remembered, to get badly needed foreign currency. With those few words I should like to support what has already been said on this Amendment.
THE EARL OF LYTTON: Although I have complete sympathy with the objects of my noble friend, Viscount Swinton, I find it impossible to support this Amendment, and I would like to give your Lordships my reasons. I agree that clearly we do not want the Central Authority to go in for manufacturing electrical plant on a large scale. But I am very much afraid that my noble friend's Amendment might have a more restrictive effect than he quite realizes. My noble friend has pointed out that

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some of the existing undertakings do today enjoy the power of manufacturing, and I would like to tell your Lordships how it is used. I would also like to say that if that use were to be restricted by the passing of this Amendment, I think the efficiency of the industry in the future might be impaired. The power has been used in the past by the interests concerned for such purposes as setting up a foundry to make their own spare parts, or setting up engineering shops for the manufacture of special parts which they use in their own plants. I am sure your Lordships will all appreciate the immense difficulty that there is, in these times, in obtaining spare parts, or in obtaining delivery of many other things of that kind in the circumstances which now exist. If you are going to take away from the Central Authority, who will take over the responsibility for generating electricity, the power to make these spare parts so as to ensure immediate delivery, you will be likely to promote inefficiency, because delays are instances of inefficiency. It would be very unfortunate to take away this power.
There is another reason why it would be unfortunate, and that is one to which the Lord Chancellor has referred. One use to which this power has been put in the past, arid which it is desirable to continue, is for experimental development. It is very desirable that this generating authority should have the power to manufacture on a laboratory scale for experimental purposes in order that they may secure the best development of electrical plant. As my noble friend's Amendment would have the effect of preventing any such manufacture, I think it goes further than he would wish and I believe it would have an unfortunate effect on the efficiency of the industry in the future.
LORD LUCAS OF CHILWORTH: trust my noble and learned friend, the Lord Chancellor, will reject this Amendment, for reasons which I will give. The noble Viscount, Lord Swinton, seemed to base his argument in support of the Amendment on the fact that no retailer with any sense goes into the manufacturing side of the business and, I suppose, vice versa. I would like to tell the noble Viscount that English industrial and commercial history abounds with examples of retailers having to go into the manufacturing business to prevent themselves
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being held to ransom by manufacturers, and of manufacturers who have had to go into retailing for a similar reason. I hope the noble Viscount will not be offended if I point to the great and glorious example of the co-operative societies who started as retailers and had to go into the manufacturing business. There are noble Lords sitting on the other side who hale had a like experience. I can assure pair Lordships that my hope is that the Central Electricity Authority will use this power as an offensive weapon. I will repeat what I said on the Second Reading of this Bill: "There is to field of consumer goods which has been so exploited as that of electrical fittings and electrical components."
The noble Lord, Lord Lloyd, advanced a reason why all the supply companies who have had powers of manufacture have not exercised them. The noble Lord will forgive me, but he rather naively did not mention the interlocking directorates between the supply companies and the component manufacturers, which I think is an all-sufficing reason. The noble Lord, Lord Wolverton, replied to the criticism I made upon Second Reading by giving some figures, but the figure the noble Lord did not give was what the lamps cost to manufacture. It is one thing to put forward reduction in price to the public, but what we would like to know—perhaps the noble Lord can obtain the information from the source from which he obtained his figures—is the progressive reduction in cost of manufacturing these lamps over the years, and then we can see the ratio of profit that was made. I would join with the noble Earl, Lord Lytton, in saying that it is necessary for the authority to have power to experiment; but experiment means something more than technical experiment, because of the close link between experiment and the cost of manufacture. I hope the Authority will use these powers to enable them to supply the electricity consumers with all the fittings and machines, including lamps, they want at bare cost prices, if the private enterprise manufacturing industry cannot supply them.
THE LORD CHANCELLOR: The Government take the view that it would be a mistake to omit this power. We think that this power must obviously he retained for the experimental purposes

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to which the noble Earl, Lord Lytton, referred. I agree with what has been said behind me by the noble Lord, Lord Lucas: it is difficult to see where experiment ends and production begins. Having said that, I do say quite frankly that we do not anticipate we shall have to go into large-scale manufacturing so far as one can perceive, at any rate for the next few years, except as a weapon of defence. We must have this power in case we find ourselves, as we think, hardly dealt with by rings. It is all very well for the noble Viscount, Lord Swinton, to say the seller is courtier and the buyer is king. Is the buyer the king today? When I look at prices, I am bound to say the seller is the king to-day. And if conditions remain as they are, it might possibly be that these manufacturers might—I do not say they would; I am not making an attack on them at all, but economic circumstances might be such that they might—charge higher prices in the full knowledge that if they did not sell at home they could sell abroad. It is essential that these powers should be given.
Nevertheless I am enabled to give your Lordships this assurance. I am not dealing now with the small manufacturers, but so far as large-scale manufacturers are concerned, it is not intended that this power will be used except where danger of such practices as I have referred to arise. If there are no objectionable practices these powers will remain in abeyance, but if there are grounds for supposing that we are not getting things we require on reasonable terms, as cheaply as we ought to get them, then we shall hold these powers in reserve, and I think it might well be that the mere fact that we have these powers may make it unnecessary ever to use them. The analogy of the Coal Board might be prayed in aid. They were given power to manufacture goods "which can advantageously be produced … by reason of their having materials and facilities for their production."
If it be argued that this power is new and unnecessary, I would say that the Central Authority ought to possess the same powers as those of the industry into whose shoes they are stepping, and the fact that that industry did not find it necessary to use these powers must be
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remembered in conjunction with the fact—and I say this in no objectionable way—that the relationships between these people and the manufacturers were very close and friendly. I do not anticipate we shall have to use these powers—I devoutly hope not—but I feel quite certain that we must have them, and the fact that we have them is the very best augury that they will not have to be used.
VISCOUNT SWINTON: The noble and learned Viscount, the Lord Chancellor, has spoken very reasonably on this subject and I find myself a great deal more in agreement with him than with the noble Lord, Lord Lucas. I agree with Lord Lytton that no one would wish to take away power to manufacture bits and pieces and to do foundry work which is essential; I am concerned with large-scale manufacture. I am sure it is not worth our falling out about this. Personally I regard it as entirely academic. I am sure the power will not be used, and if the noble and learned Viscount likes to have it because somebody believes it is a stick, there it is. It is a seller's market to-day but I do not think it is going to remain a seller's market. In fact, already the reaction is beginning to set in, and that was one of the reasons why it was so important to get on early with the export drive. I do not think this power is a real stick. If we ever have to deal with a cartel we shall agree that the right stick is not bad manufacture but good publicity and, if necessary, legal action following upon that publicity. If what I have read in the Press is true and if the noble Lord, Lord Lucas, is to adorn one of these undertakings, I hope he will not again engage in offensive manufacture because then our electricity will certainly cost us more.
LORD BARNBY: I hardly feel satisfied with the reassurance which the noble and learned Viscount has given, although I appreciate the reassuring way in which he has put it. I regard this as an important matter of principle, and would like to see if some compromise might not be possible between the effective way in which the noble Viscount put the Amendment, and the assuring way in which the noble and learned Viscount, the Lord Chancellor, replied to it. I take it that this applies in the main to the generating side and not to the distribution side. It

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is, therefore, something which would apply to this very large group of vital manufacturers in this country who deal with the production of heavy generating electrical equipment. I put this angle to it. My mind does not go back to the Act of 1926, but the noble and learned Viscount intimated that the contemplated authority had the powers now under discussion. I have not the recollection whether they have those powers under the Act of 1926. If they have, as one who has sat on the Electricity Board since that date, and has seen the large amount of electricity equipment purchased, and seen the operation of it, I doubt very much whether there would ever be the necessity for invoking this clause in the Bill as a defensive measure.
If it does indicate insistence on the part of the Government to retain the power of manufacturing this heavy equipment. I would like to remind the Committee that it is the progress which has been made in generation in this country, through centralized purchase, and rendered possible by the wisdom of Parliament through the Act of 1926, that has put the heavy generating equipment industry of this country into the forefront of the world, and actually pre-eminent even over the United States and Germany. With due respect to the noble and learned Viscount, I think your Lordships should give consideration to this thought: that to promote legislation which gives the Government power to manufacture this most intricate equipment—I am not entering on controversial ideologies, but merely stating facts—and to tell the world in which we enjoy pre-eminence that the Government are contemplating entering into manufacture, might involve the country in great danger. The noble Earl, Lord Lytton, speaks with a wealth of knowledge and experience, and is entitled to every respect in these matters, but fully realizing the anxieties which he expressed, I suggest that the two points on which he laid emphasis are no justification for his misgivings about the Amendment we are discussing.
With regard to the point of experimentation, with due respect to the noble and learned Viscount, I suggest that the Industrial Organisation Bill which this House recently passed would provide for that, because the Government would have powers under that Act to manufacture
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anything of an experimental character. With due respect to the noble Earl, Lord Lytton, I suggest that the two points he made, fundamental as they are, are met. If it be true that the Government have no intention of going into the manufacture of generating equipment (certainly there will be no need for it from a defensive point of view such as has been suggested), then instead of the word "manufacture" we might insert "reconstruct." That would meet all cases which could be technically contemplated, such as the noble Earl has very properly put, and would give effective powers to the Government for anything that might be required. Then paragraph (a) would read as follows:
"to reconstruct electrical plant and manufacture electrical fittings."
THE EARL OF LYTTON: I would remind the noble Lord, Lord Barnby, that I am concerned not only will repairs, but with the manufacture of small parts in the foundries and workshops. I do not know whether he is suggesting words which will meet that. If so, the Amendment is a different Amendment from that which we are discussing. If the effect of the Amendment of the noble Viscount, Lord Swinton, is to prevent the Government from having any powers of manufacture, I think it would be contrary to efficiency. If there is any way in which our interests can be satisfied, I shall be only too happy to consider it.
LORD BARNBY: If the words were "to, reconstruct electrical plant and electrical fittings," it would get over any material point that has been made.
VISCOUNT RIDLEY: I hardly think that that would lead the industry to carry out the work which was necessary, apart from ordinary experimental and development work. I have sympathy with the meaning of this Amendment, but I would he very sorry to see it passed in it present form. I think in what the noble and learned Viscount, the Lord Chancellor, said, he covered the question of the manufacture of fittings, but I do not think he referred to the question of plant. If it were fully understood that the intention of the Government, in the operation of this Act, was not to seek to manufacture plant from the beginning, I think that would probably remove many difficulties. I cannot imagine that the Central Electricity Authority would contemplate

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doing so. If the noble and learned Viscount could say that he would include that in the same category as the fittings to which he referred, I should have thought the point would have been met.
THE LORD CHANCELLOR: I should have thought that that was an a fortiori case, though equally even in regard to plant you might try some experiment in your laboratories to see whether you had got something.
VISCOUNT SWINTON: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.49 p.m.
LORD HAWKE LORD HAWKE moved, in paragraph (c) of subsection (3) to leave out "or in connexion with." The noble Lord said: This Amendment, and the next but one on the Marshalled List, are simple Amendments designed to remove what is probably a drafting error in the Bill. If your Lordships read the powers which the Bill gives to the Central Authority, I think you will agree that the words we seek to strike out are quite unnecessary. The Authority have got every conceivable power in the world without those words. I think the words have crept in during drafting somewhere in Whitehall, where it is very much easier to put everything you can possibly think of rather than to get permission from a busy superior to leave out one jot or iota. I beg to move.
Amendment moved—
Page 4, line 13, leave out from ("for") to the first ("the") in line 14.—(Lord Hawke.)
LORD TWEEDSMUIR: I would just like to add a word or two to what my noble friend Lord Hawke has said. The point of this Amendment is so crystal clear that it needs no explanation. As it stands, this clause is far too loosely worded. Even if the Amendment is accepted the subsection will still be very broad in its interpretation. I think that this Amendment is in all conscience wide enough and it gives a concrete measure of coherence to the clause, because the duties which are to be defined are those laid down and listed in paragraphs (a) and (b). As at present worded it might be open to the widest interpretation, even to the extent of taking over and running a restaurant merely because it had electrical plants.
THE LORD CHANCELLOR: I do not think there is any drafting error about this. Indeed, I think it is a very good piece of drafting, because it has shortened what we had in the Transport Bill into a very much more convenient form. Might I ask your Lordships to consider such a thing as the building of houses for your workers? That is not directly for the promotion of your duties, but on the other hand, it is quite plainly in connexion with your duties, because you cannot get happy workers if you house them badly or make them come a long way to work. This paragraph is to enable housing loans to be granted so that people may get proper housing facilities. Observe how we did this in the Transport Bill. Instead of using this convenient form—I am afraid I have not the reference to the clause at the moment, but the noble Lord will, I am sure, find it—we specified in detail the various powers which it was desired that the Transport Commission should possess. There the catalogue took up nearly two pages. When we discussed that Bill your Lordships' ingenuity—which knows no bounds—suggested that in our catalogue of powers we ought to leave out two things and you asked us to put in, and we did put in, two further heads. The first was to provide houses, hostels, and other like accommodation for persons employed by the Commission, and the second was to make housing loans to persons employed by the Commission to assist them to acquire housing accommodation. I have no doubt the noble Lord has that in mind.
That was the way in which it was done in the Transport Bill, and I think the way it is done here is much better. General powers are set out and then paragraph (c) says:
"to carry on all such other activities as it may appear to the Authority to be requisite, advantageous, or convenient for them to carry on for or in connexion with the performance of their duties… . "
That is how we have done it here and that is how we have saved three pages. Although we have by this means given your Lordships no adequate scope for ingenuity, I hope the draftsmen will be awarded high marks for having adopted this much shorter form. I am quite sure that the words "in connexion with" are necessary to get the things I have in mind. I have no doubt that if your Lordships look through the catalogue in the Transport Bill you will find many other powers

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which might not come under the words "or convenient for," but which would come under the words "in connexion with." Therefore, I must ask your Lordships to retain these words.
LORD HAWKE: In reading this clause—and of course I am subject to correction here—I thought the words "or convenient for" would cover precisely those things which the noble and learned Viscount catalogued. He, of course, is a master of interpretation of Bills and if he assures me that in fact that is riot the case I certainly will not press this Amendment.
THE LORD CHANCELLOR: I think that is nor the case, because "convenient" comes before the preposition "for."
LORD HAWKE: In that case I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
3.56 p.m.
VISCOUNT RIDLEY VISCOUNT RIDLEY moved to insert after subsection (6):
"(7) The Central Authority shall consult with each area board as to the operation of the generating stations within the area of that area board and where it is shown that the operation of such stations can be carried out efficiently and more economically by the area board the Central Authority shall, subject to the approval of the Minister, authorize the area board to carry out such operation on behalf of the Central Authority."
The noble Viscount said: This Amendment is a suggestion that the Central Authority should, wherever possible, delegate the operation of generation stations to the area boards in whose areas they are. First, I should say that, although on principle I would have liked to have seen it put rather more strongly than this, one must accept the fact that the geographical arrangement of the industry under the proposed fourteen area boards—or indeed any other—would not allow of such a system to be put into force completely at present. I remember that when this Bill was first introduced it did not go quite so far as it now does, and to that extent I think it is a little better since it has been discussed in another place. There was some discussion on a similar Amendment to this, and there was a certain amount of Government opinion expressed, I think, by the Parliamentary Secretary to the Ministry of Fuel, saying that of course as the Bill
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now stands it would be possible for the Central Authority to delegate generation. I think he also said that the Government envisaged that that would not be the ordinary arrangement but that they would in fact prefer to separate the tai o. As at present the normal arrangement is not for the Central Electricity Board to generate themselves, but for power companies to do so, so I suggest that we should follow the same principle in future. That does not, of course, write off entirely the Central Authority as the controlling and guiding interest and also as the owner and operator of the grid system.
The reasons for suggesting the complete integration of generation and distribution in the area so far as possible are in practice very strong. In parts of the country where this system operates—and here, I must confess, I am only familiar with one in detail, but there are ethers which do to some extent approximate—you fir d always that the generating station is a large centre of distribution—as it is bound to be—at present owned and operated by the same undertaking. There is a common staff engaged on the supervision and running of the station and the supervision of the distribution system, as well as a common system supply of spares which are required for both parts of the undertaking. Further, there is the simplification of such matters as accountancy arrangements for the pay of all the men working on the same station and so or. Those are minor matters, but I mention them to establish the point that at present the two are completely integrated in detail.
Now as to the commercial side of the activities, which in this connexion is important, one must remember that the sale of electricity to industry forms more than half of the supply of energy in this country and it is the sale of energy to industry which dominates the commercial considerations I have in mind. If it is possible in selling so to adjust the term; on which the current is taken that it work:; in with the remainder of the generating programme, it is clearly more efficient and economical to do so. And one must remember that if the electric supply industry in future cannot supply current to industry at the terms and on the conditions needed, there will still be a competition whereby industry can obtain power from other sources by the installation of their

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own plant, using process heating and so on; so that each area board must have a great deal of commercial flexibility in their operations. They must have direct access to the power stations in the area, so that they can completely co-ordinate the whole process from start to finish.
I should be interested to know why—accepting the principle of the area boards and the Central Authority—the Government have framed this Bill so as to separate the generating and the distributing side of the business. I see no advantage in it, keeping in mind, of course, the influence of the present Central Electricity Board, which may well change over and be replaced by the Central Electricity Authority; and without any further explanation as to the point of this change, bearing in mind the very considerable upset, inconvenience, increased expenditure, and difficulty in operating the business I feel that it is not justified. There are of course cases in which it cannot directly be done at the present time, and so the Amendment is framed to make it as easy as possible for the Central Electricity Authority to do this delegation. They are not to be in a rigid framework, and they are left with freedom to operate different areas in different ways. I feel convinced that that is the right way to operate the industry.
I should be sorry if the Central Authority took on to itself too much detailed control. Perhaps the Central Electricity Board may at times have wished that they had more control than they have had up to date, though I am not saying that they have shown any signs of doing so. I believe their influence has been very wisely exercised, and the sort of arrangement up to now might well be a model for the new authority to follow. At the same time I feel that the influence of the Central Electricity Board may rather be in the direction of central control. I hope very much that your Lordships will agree that we should put this Amendment in, so as to keep before the Central Authority the importance of delegating where possible, and also of making conditions suit each area, different as their requirements may be. I beg to move.
Amendment moved—
Page 5, line 14, at end insert the new subsection.—(Viscount Ridley.)
THE EARL OF LYTTON: I should like to add one word in support of this Amendment. It is rather a technical matter perhaps, but your Lordships may not all realize how close is the connexion between generation and distribution of electrical current. Electricity is a commodity which it is not possible to store. Every time one of your Lordships turns on a switch you are in fact connecting up with the current which comes straight from a generating station. It may have gone through a different process in the meantime, but there is no possibility of completely divorcing distribution from generation. I rather question the wisdom, therefore, of requiring that one authority should deal exclusively with generation and another exclusively with distribution. They are very closely connected. However, the policy of the Bill is to set up the Central Authority as a generating body and the area board as distributors and I accept the Bill in its general form.
But there may be certain areas in which it is definitely more economical and more efficient that the area board should themselves generate the current which they use, and the Central Authority themselves may quite well realize that it is the case that under the Bill as it stands there is no power of delegation. All my noble friend asks for is that in those circumstances, where they exist, where all parties are agreed, the Central Board should have the power of delegating to the area boards. I think it is an eminently sensible and practical suggestion and I hope your Lordships will accept it.
VISCOUNT ELIBANK: I, too, should like to support this Amendment. I think it is a most practical suggestion, because the centralization of all generation in one body will not be for the good of the industry as a whole. The power stations, scattered as they are all over the country have for that reason been at a great advantage in the distribution as well as the generation of electricity. It should be remembered that industries are very dependent, in many parts of the country, on being able to get their power practically on the spot, and not only that, but to be able to negotiate agreements with those who understand the situation on the spot. There are, as we know, many kinds of industries in the country, and those industries have a different way of taking their

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supplies. Where one agreement for supply on a certain basis is apposite, in the case of another it is not so; consequently the nearer the industry is to the generator, in so far as fixing up these agreements is concerned (owing to the fact that they understand local conditions in a way that the Central Authority in London can never do), the better it will be for the industry in the future. All that my noble friend is asking is a permissive power, not a mandatory power, to enable this to be clone, to make the whole thing more flexible, not to make it rigid at the centre. I feel sure that the Central Electricity Authority, when it is established, will be very grateful for a power like this in their possession which they will be able to administer where they might think fit.
LORD WOLVERTON: I also should like to support this Amendment which is one of great importance. Subsection (6) says:
"Subject to the approval of the Minister, t he Central Authority may authorize any area hoard to exercise or perform on behalf of the Central Authority any of the functions of that Authority."
My noble friend Viscount Ridley said that this goes a bit further and says "shall, subject to the approval of the Minister." I feel it is a great mistake. There is so much inter-connected between the distribution and the generation, sides. In many cases it makes it extremely difficult for the distribution side to carry on efficiently, because they have to keep in close liaison with the generation side. You have to try to keep an even curve all the way along, or you cannot get the supply you want. If you entirely divorce generation from distribution, I feel it will he a very great mistake, and I think the Central Authority should carry out the policy and, with the Minister's permission, wherever possible, especially in industrial areas, delegate the powers of generation to the area boards.
VISCOUNT HALL: The noble Lord who moved this Amendment and the three noble Lords who have supported it spoke with great authority as a result of many years of practical experience on the generating and in some cases, think, on the distributive side. The purpose of the Bill, of course, is to set up the two separate kinds of organization. The first is the Central Authority, for the purpose of controlling generation; secondly, there
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is the area board set up for the purpose of distribution. I am rather interested in the arguments which have been used with regard to the desirability of linking the one with the other. I have had some practical experience as a member of a local authority who acted as undertakers for the distribution; we purchased from a private company and experienced little difficulty either with the sale of electricity after purchase from the company generating, for the purposes either of lighting or power in the home, or indeed of bulk supply to industrialists. f am not, for a moment, suggesting that my experience is comparable with the experience of any of the noble Lords who have supported this Amendment, but we do not want to go to the practical experience of noble Lords to deal with the advantages or disadvantages.
After very close consideration of this matter the Government decided on this kind of set-up for the purpose of controlling this industry. The Government are supported in this by the fact that the. Weir Committee, who reported in 1925 and whose Report led to the setting up of the Central Electricity Board by the Act of 1926, definitely recommended that generation and main transmission should. be separated from distribution. There was an impartial inquiry and a Report by an impartial Committee. I wonder, it this Amendment were carried out literally, how far the area boards could go, for it must be remembered that the 142 selected generating stations which were controlled and are now controlled by the Central Electricity Board are all within areas which will be controlled by area boards for distribution. Does it mean that there should be a kind of inquiry as to the economic generation of electricity for each of those selected generating stations, or, indeed, for many others from whom the Central Electricity Board purchases electricity?
After all, it must be remembered that this is a great national scheme. It may be, as the noble Viscount, Lord Ridley, rightly said, that there are certain areas where you can generate electricity very much more cheaply than in other areas. Indeed I have been for a very long time. an advocate of confining the power-producing industries, so far as possible, to sites as near the pit top as possible.. Instead of conveying coal from Newcastle to London for the purposes of generating

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electricity in London, and then conveying electricity through the grid back from London to Newcastle in power of an entirely different form, in my view—and in the view of the Government—it is absolutely imperative that the Central Authority should be responsible for the generation of electricity. I think the area boards, if they do their job and do it well, will have as much as they can do for the purposes of looking after the distributive side and developing the distributive side into areas where the people are clamouring for a supply of electricity.
I have heard the arguments in favour of the Amendment and have taken into consideration the point of view of the Government on this matter, which has always been that the present arrangement under which the Central Electricity Board exercise a supervisory control over the operations but do not own the stations, is wrong. In particular, it leads to serious disadvantages, both from the point of view of the planning and construction of generating stations where they are most needed and in regard to distribution of staff. I am sorry that I cannot accept this Amendment, and I cannot see that a case has been made out for it. Unless you are going to start biting into the powers of the Central Authority and adding to the powers of the area boards—which, I repeat, may well have sufficient to do if they are to carry out their work and the job of distribution—it is much better that it should be carried on in the way I have indicated. Therefore, I ask the noble Viscount if he will withdraw his Amendment.
VISCOUNT RIDLEY: I am sorry that we do not seem to agree on this point. I must confess that I definitely want to bite into the powers of the Central Authority, and so, I am afraid, we are not likely to get agreement on it. I feel that I cannot press this Amendment much further, but before I withdraw it, I should like to make a comment on the noble Viscount's explanation as to why the Government had decided that they would deliberately separate generation and distribution. The noble Viscount said in his answer that they were anxious to give generation to the Central Authority for the purposes of planning and the construction of generating stations. That is what I understood his reply to mean. Of course, what I am proposing in this Amendment does not
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affect the planning or construction of stations, because it would still leave the Central Authority as the owner of the stations, as the people who build the new ones, as the people to decide where they will be and who will be generally responsible for the arrangements of them within the industry.
The point I am trying to make in this.; Amendment is that operation should be definitely a function of the area boards. The most successful results are achieved by having the work of distribution and generation together. The noble Viscount has referred to the practice of buying electricity from a power undertaking, and as a supply authority selling it. That is a normal occurrence. But one of the things which I understand this Bill does is to enable us to abolish that very practice. It is to take away the small undertakings and combine them into large areas, with large area boards which can cover a big area with a good deal of responsibility.
I believe that area boards would be strengthened by having the generation under their control for operational purposes, and I believe that the experience of the industry now demonstrates that the noble Viscount is not quite correct in saying that they have enough to do in looking after distribution without having to look after the generation as well. I think it is a very great pity that the Government have taken such a strong line about this, because I think it will make the efficient operation of the industry more difficult, and it will prevent the Central Authority from having the advantage of co-ordinating the industry in the way that they do now. However, I feel that there is nothing more I can do than to withdraw the Amendment, and I beg leave to do so.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3:
Constitution of Central Authority and Area Boards.
3.—(1) The Central Authority and every area board shall be a body corporate with perpetual succession and a common seal and power to hold land without licence in mortmain.
(2) The Central Authority shall be constituted as follows:—

(a) the chairman and not more than six other members shall be appointed by the Minister from amongst persons appearing to

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him to be qualified as having had experience of, and having shown capacity in, industrial, commercial or financial matters, applied science, administration, or the organisation of workers;

(b) four other members shall be appointed by the Minister from amongst the persons for the time being holding the office of chairman of an area board, and such appointments shall be made from the area boards in rotation; and

(c) there shall be one other member who shall be the person for the time being holding the office of chairman of the North of Scotland Board.

(3) Every area board shall be constituted as follows:—

(a) the chairman and not more than seven other members shall be appointed by the Minister from amongst persons appearing to the Minister to be qualified as having had experience of, and having shown capacity in, electricity supply, local government, industrial, commercial or financial matters, applied science, administration, or the organisation of workers; and

(b) there shall be one other member who shall be the person for the time being holding the office of chairman of the Consultative Council established under the following provisions of this Part of this Act for the area of the area board.

(5) The Minister shall appoint one or more of the members of the Central Authority to be deputy chairman or deputy chairmen of that Authority, and shall appoint one of the members of each of the area boards to be deputy chairman of that board.
(6) There shall he paid to the members of the Central Authority and to the members of each of the area boards such remuneration (whether by way of salaries or fees) and such allowances as may be determined by the Minister with the approval of the Treasury, and, on the retirement or death of any member in whose case it may be so determined to make such provision, such a pension to or in respect of that member as may be so determined.
Any such remuneration, allowances and pensions as aforesaid shall be paid by the Central Authority or, as the case may be, the area board concerned.
(7) The Minister may make regulations with respect to—

(a) the appointment of, and the tenure and vacation of office by, the members of the Central Authority and any area board;

(b) the quorum, proceedings, meetings and determinations of the Central Authority and any area board;

(c) the execution of instruments and the mode of entering into contracts by and on behalf of the Central Authority or any area board, and the proof of documents purporting to be executed, issued or signed by the Central Authority or any area board or a member or officer thereof; and
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(d) any other matters supplementary or incidental to the matters aforesaid for which provision appears to the Minister to be necessary or expedient.

(8) Subject to the provisions of any regulations made under the last foregoing s sub-section, the Central Authority and every area board shall have power to regulate their own procedure.
4.22 p.m.
LORD LLOYD LORD LLOYD moved, in paragraph (a) of subsection (2), after "not," to insert "less than four or." The noble Lore. said: This Amendment is one which I hope will commend itself to the no )le Viscount. It is a simple Amendment and I think it puts into the Bill what the Government themselves would like to have in the Bill. It concerns the co n-position of the Central Authority. If noble Lords will look at page 6 of the Bill, they will see that the maximum possible number who can sit on the Central Authority would be twelve people, consisting of a chairman and not more than six other members appointed by the Minister, four chairmen of area boards and a chairman of the North of Scotland Board.
If noble Lords will look at paragraph (a) of subsection (2) they will see that the Minister can appoint "the chairman and not more than six other members"—which means, in other words, that he could appoint a chairman and only one other member. We feel that this Central Authority are a very important body, with a big job to do, and if noble Lords look at the Bill they will see that the qualifications required of members of this authority, the interests that they have to represent, are very extensive. There is one interest which is not in the Bill, but which I hope we are going to put in shortly; that is the interest of electricity. We feel, therefore, that it is most important that this Authority should be a Board consisting of a certain number of people. We do not wish to see this power of the Minister to appoint only—as he can dc, although I have no doubt that he would not do it—a chairman and one other.
When this matter was raised in another place the Minister resisted a similar Amendment, on the ground that h wanted to keep, very reasonably I think, a couple of vacancies up his sleeve, in case he could not get hold of the people he thought desirable at the right moment I am sure that that is a reasonable desire

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but this Amendment meets the Minister's wishes on that point by saying that he shall appoint a chairman and not less than four other members, and no more than six. I think this a reasonable and a simple Amendment, and, as the noble Viscount who is to reply is himself so very reasonable, I hope he will be able to accept it.
Amendment moved—
Page 6, line 3, after ("not") insert ("less than four or").—(Lord Lloyd.)
VISCOUNT HALL: This Amendment is a very reasonable Amendment; we like it, and therefore we will accept it.
On Question, Amendment agreed to.
VISCOUNT HALL: The next Amendment is moved for the purpose of dealing with an Amendment which is on the Order Paper and moved by the noble Lord, Lord Teynham. We were quite prepared to accept that Amendment, but we thought it was in the wrong place, and I suggest that the Amendment should be inserted in line 6 of page 6 in the same terms as would have been moved by the noble Lord. I beg to move.
Amendment moved—
Page 6, line 6, at end insert ("the generation and supply of electricity").—(Viscount Hall.)
LORD TEYNHAM: I am grateful to the noble Viscount for setting down his Amendment, which in fact covers my Amendment on page 6, line 7. I think the position that he has indicated is a better position than mine, and therefore I shall not move my Amendment.
VISCOUNT ELIBANK: As I was supporting Lord Teynham on the other Amendment, I wish also to express my thanks to the noble Viscount for accepting it in this place. The reason why I want to add a word to what Lord Teynham has said is that this question of representation on the Central Electricity Board by someone representing the supply and generation of electricity is a very important one. After all, the Central Electricity Board are to have control of the whole of the generation of electricity in the country. What I was going to suggest, if our Amendment had been moved, was that not only one but at least two persons understanding the
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generation and supply of electricity should be placed on that Board. At the present time we have a Central Electricity Board consisting, I think, of eight members—although I am open to correction—of whom all but two or three are electrical engineers. Consequently, the business of the Central Electricity Board has run extremely smoothly and extremely efficiently in a very technical industry. I hope that the noble Viscount will suggest to the Government that they put at least two representatives with electricity experience upon the Central Electricity Authority.
On Question, Amendment agreed to.
LORD RENNELL LORD RENNELL moved, in paragraph (a) of subsection (2) after "commercial" to insert "agricultural." The noble Lord said: It may be convenient to the Committee, and I have arranged with Lord Hawke, that I should discuss this Amendment with that at page 6, line 24, which also stands in his name. The Amendments are to include in the composition of the Central Electricity Authority, and in the area boards, a representative of agriculture to safeguard the agricultural industry. It is, of course, in the area boards that his presence will be most desirable, but I submit that he would also be desirable in the Central Authority, to ensure that the highest authority should have an advocate of the agricultural industry in their composition.
Amendment moved—
Page 6, line 7, after ("commercial") insert ("agricultural").—(Lord Rennell.)
VISCOUNT HALL: I want the noble Viscount, Lord Elibank, to know that I will convey to the Minister his remarks about the need for additional members on the Central Board with practical knowledge of the industry. I am sure he will appreciate the difficulty, in view of the fact that in the Amendment moved by my noble friend Lord Rennell we are asked to add this other qualification. I think it can be said that the Minister has a fairly wide selection, and I have no doubt that it is his desire to see that the persons who will be appointed to the Board have the necessary qualifications to see that both the Central Authority and the area boards are well run and run by men with knowledge of all branches of the industry.
I think that a case can be made out for a representative of the agricultural in-

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dustry to be considered for a seat upon the area boards. I am not prepared to enter into any agreement, but perhaps the noble Lord, Lord Rennell, seeing that the proposal for an agricultural representative on the Central Authority cannot be accepted, will be satisfied with an assurance that a place for an agricultural representative might well be considered in connexion with the area boards? It will be understood that I cannot accept his Amendment, at page 6, line 7, after "commercial" to insert "agricultural," but I can accept his Amendment to insert "agricultural" after "commercial" in line 24, which will mean that an agricultural representative will be considered for a seat upon the area boards. In those circumstances I trust that the noble Lord will not press this first Amendment.
LORD RENNELL: I am much obliged to the noble Viscount. I agree with him and I meet him on that point, I think there is a better case to be made for an agricultural representative on the area boards than on the Central Authority and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD RENNELL LORD RENNELL moved, after subsection (2) to insert as a new subsection:
"(2) Each of the members of the Central Authority appointed under paragraph (b) of the last foregoing subsection shall hold office for a term of four years and no more. Provided that of the four members appointed upon the constitution of the area boards one shall be appointed to hold office until the first anniversary of the date of his appointment and shall then retire, one shall be appointed to hold office until the second anniversary of his appointment, and one shall be appointed to hold office until the third anniversary of his appointment."
The noble Lord said: This Amendment provides that the four members appointed upon the constitution of the area boards shall retire by rotation. The practice of members appointed in that manner retiring by rotation so as to preserve continuity has already been accepted by the Government in respect of other and similar boards, notably the Board of the Bank of England and the Public Works Loan Board. I do not think that the desirability of continuity needs much argument. If one of each of the four members retires until the rotation is complete at the end of the fourth year then each of the members will have a full four years of office and they will each retire one at a time after a full four years' service.
I beg to move.
Amendment moved—.
Page 6, line 17, at end insert the said new subsection.—(Lord Rennell.)
LORD HAWKE: In addition to the point made by my noble friend, Lord Rennell, there is this to be put forward. As the Bill stands, the Minister may make regulations regarding the tenure of office of the Central Authority, and those regulations could, of course, cover the terms of office of the area board chairmen serving thereon. But if the Minister can make a regulation he can unmake a regulation, and I submit that it is very much better to have down in black and white in the Bill something which each of the chairmen of the area boards knows to be fixed and immutable. However much they may antagonize anyone or toady to anyone, they would know that it would mean no difference in their tenure of office. They are there for a fixed period of four years and then they have to clear out. In the circumstances I hope that the noble Viscount will accept the Amendment.
VISCOUNT HALL: Although in principle it is recognized that there is considerable value in avoiding the simultaneous retirement from the Central Authority of all tae four chairmen, it is considered that tae arrangements envisaged under this new subsection would not be satisfactory, since they would give a period of service of only one year to one of those chairmen, a two-year period of service for the second, and so on. These periods, it is suggested, are too short. But there is a good deal of force in what has been said, and if tie noble Lords will agree to withdraw the Amendment I will consult with them as to the framing of suitable words for insertion in the regulations, to cover the point upon which I think noble Lords feel that they ought to have some guarantee.
LORD RENNELL: I am very much obliged, but I would like to point out that in the case of two of the examples I quoted a certain proportion of the appointees will in fact serve only for one year. So the argument which is applicable in this case is applicable in the other case also. But in view of the assurance which the noble Viscount has given, I shall be very glad to withdraw the Amendment on the understanding that a similar Amendment will be inserted hereafter.
LORD HAWKE: Perhaps in discussing the matter with my noble friend, the noble Viscount will remember that even under our Amendment the last area board chairman to get on to the Central Authority will take eleven years to get there, and we do not wish to see that period made any longer.
Amendment, by leave, withdrawn.
VISCOUNT HALL VISCOUNT HALL moved, in subsection (2), at the end, to insert:
"Provided that, until the area boards have been established, the Central Authority shall be deemed to be properly constituted notwithstanding that the members to be appointed under paragraph (b) of this subsection have not been appointed or have not all been appointed."
The noble Viscount said: I beg to move this Amendment which I think covers a point made by the noble Viscount, Lord Elibank, and the noble Lord, Lord Lloyd, in the Amendment which follows.
Amendment moved—
Page 6, line 17, at end, insert the said proviso.—(Viscount Hall.)
LORD LLOYD: The noble Viscount suggested that this Amendment covered the point of an Amendment which is down in the name of my noble friend, Viscount Elibank, and myself. I do not think that is so. That Amendment is parallel to one which I moved recently.
VISCOUNT ELIBANK: Am I to understand that the Amendment down in the name of my noble friend, Lord Lloyd, and myself is regarded as a reasonable one? Lord Lloyd's Amendment with regard to the minimum number of members for the Central Electricity Authority was accepted as a reasonable Amendment.
VISCOUNT HALL: I am afraid that what I said just now was wrong. This Amendment does not cover the points in the Amendment to be moved by my noble friends, Viscount Elibank and Lord Lloyd.
On Question, Amendment agreed to.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved, in paragraph (a) of subsection (3), after "not" to insert "less than five or". The noble Viscount said: The reasons relating to this Amendment have been put very clearly by my noble friend, Lord Lloyd, speaking in regard to the appointment of a minimum number of members for the
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Central Electricity Authority. This Amendment is to have a minimum number of members for the area boards. I think that it is quite a reasonable suggestion, and I hope that the noble Viscount will accept it.
VISCOUNT HALL: It is accepted.
On Question, Amendment agreed to.
4.40 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in paragraph (a) of subsection (3), after the second "the" to insert "Central Authority with the approval of the". The noble Viscount said: I hope the Government will be equally reasonable over this Amendment, which is one of even more importance. The object of this Amendment is to empower the Central Authority and not the Minister to appoint area boards. There is no dispute between us that the Minister will have to appoint the Central Authority. I can shorten the discussion on this because we have already discussed it at great length on the Transport Bill. On the Transport Bill your Lordships will remember this House decided that the Transport Commission shall have the appointment of the transport Executives, which are similar to the area hoards in this Bill. An even closer parallel is the parallel which emerged from the Coal Act. There the Minister himself proposed and Parliament agreed that while the Minister appointed the Coal Board, the regional boards, which are exactly similar to these regional boards for electricity, should be appointed not by the Minister but by the Coal Board. That was not an Amendment moved and accepted; it was the Minister's own idea. Therefore all the precedents are on the side of our Amendment.
I am bound to add also that the Minister himself supplied one of the strongest arguments by his extraordinary statement on the Report stage of the Bill that, when he came to make his appointments, in no circumstances would he appoint to a regional board a man who had been opposed to nationalization, when most of us thought the only possible test to apply was whether a man was the best man to do this highly responsible and technical job. The First Lord of the Admiralty did his best, and I sympathize with him, to defend the Minister when he replied in the debate on Second Reading and the argument he

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used was a rather curious one. I have been refreshing myself from the text of Hansard. He said that the Minister had appointed quite a good Coal Board. I never said he had not. We may have all our opinions of how good or bad the Coal Board is and how successful it is in getting coal. But what we are concerned with here was what the Minister was going to do in appointing these subsidiary boards. The First Lord said the Minister had made a very good Coal Board and were not the appointments to the district coal boards very good ones? I dare say they are; I do not say they are not. But it was not the Minister who made the appointments to the district coal boards. It was the Coal Board. Let us have the same system under this Bill.
The only argument which I think will deflect your Lordships from the decision taken on the Transport Bill and that the Government themselves took on the Coal Bill would he that there was something so different between the relationship of the Central Authority here to the regional authorities as compared with those in relationship under the Coal Act or under the Transport Bill, that we ought _to make the whole system of appointments completely different. If your Lordships will follow the terms of this Bill you will see from the whole structure of the Bill how similar are the relations and how wide are the general powers of the Central Authority. Take Clause 1. The Central Authority is to
"maintain an efficient, co-ordinated and economical system for electricity supply for all parts of Great Britain"
—and subsection (c) lays down—exactly parallel to the main Coal Board and to the Transport Commission—that the Central Authority is
"to co-ordinate the distribution of electricity by area boards and to exercise a general control over the policy of those boards."
You cannot have a closer relationship between the broad policy and the executive action to be carried out by the boards.
Then Clause 2 says that the Central Authority are to control the functions of the area boards as regards research. When the noble Viscount, Lord Ridley, moved a previous Amendment, the importance of their powers were then used
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by the Government to invite Lord Ridley to withdraw the Amendment. The Central Authority can authorize any area board to exercise any of the functions of the Central Authority on their behalf. In Clause 6 the Central Authority may give directions to area boards for co-ordinating distribution and for exercising control over policy. Clause 37 gives the Central Authority power to direct area boards as regards the fixing and variation of tariffs. There is not a thing of any importance where the real policy and the control of policy is not vested in the Central Authority with these subordinate bodies as their subordinate agents. I am not arguing whether it is right or wrong, but that is the structure of the Bill. The Central Authority are to give directions about fixing of tariffs, but in order to make quite sure their orders are carried out the boards must comply with the directions given to them by the Central Authority, whether general or specific.
Again they have no independence oil finance at all. As a matter of fact, W2 have been pressing the Government to give them a little more elbow room on even the sort of day-to-day work of finance. Just observe what happens. The Central Authority may require any area board to contribute towards the satisfaction of the obligations of the Central Authority that are set out in Clause 41. I will not go through them, but they are all the obligations which the Central Authority have to meet They have no money of their own, but they make this great: issue of hundreds of millions of electricity stock. That stock is to have its interest paid upon it; we understand that: somewhere in the dim and distant future it may be redeemed, and, therefore, a redemption fund has to be created. But are these area hoards to have any say about that?
Not at all. It is to be the Central Authority who are to tell each and every area board that they shall each year contribute so much; and, indeed, unless we vary the Bill, they may tell one area board that they have to contribute three times as much in proportion to their neighbour. They can favour one, and prejudice another. So that all that obligation and that power lie with the Central Authority.
Then, the Central Authority may create their own reserve fund. Not out of their own money, but out of the money of the area boards. The Central Authority will tell the area boards how much they are all to contribute to that. They are not even to manage their own reserve funds; the Central Authority have jurisdiction over the size of the reserve funds, and over the management of the reserve funds. In Clause 44, in case any small matter had escaped the eagle eye and the vast control of the Central Authority, where any of the area boards have an excess of revenue the Central Authority are to tell the area board how it is to be dealt with. I must not call that excess of revenue "a profit." It is rather nice the way the word "profit" is most carefully avoided. Your Lordships observe the new terminology. We do not make a profit—and perhaps we shall not; after the speech of the noble and learned Viscount, I think it is probable that we shall not—but if we do make a profit, we must not call it a profit; we call it "an excess of revenue." And, as I say, that excess of revenue is not to be dealt with by the area board. The Central Authority are in each case to tell the area board how their excess of revenue—in coarer language, their profit—is to be dealt with.
That is the structure of the Bill. Your Lordships will see that as in the case of transport—I am not sure that it is not even more than in transport or in coal—every time it is the Central Authority who are to have the jurisdiction over the policy, the conduct, and the finances of these boards. Be it right, or be it wrong, that is the structure of the Bill. In those circumstances, I say it would be most improper, as well as utterly opposed to every precedent which even the Government themselves have hitherto created, that the appointment of these area boards should not be vested in the Central Authority but in the Minister. There can only be one reason for vesting this authority in the Minister, and that is to give him an excess of patronage. There are to he fourteen boards, but there is power to add to their number. To give this authority to the Minister is wrong in principle; it is wrong in administration; it is wrong by every business precedent, and it is wrong politically.
Any doubt on the matter has been removed by the statement of the Minister
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himself, not, I regret, in an unguarded moment—nobody pays much attention to what he says at the week-end—but made in another place, that he would not put on to any of these boards a man who had been opposed to nationalization. We should be doing less than our duty if we did not insist that the appointment of these boards should be by the Central Authority and not by the Minister. I beg to move.
Amendment moved—
Page 6, line 20, after ("the") insert ("Central Authority with the approval of the").—(Viscount Swinton.)
LORD RENNELL: I do not want to recapitulate any of the catalogue of reasons given by the noble Viscount, Lord Swinton, to show what I think must be accepted on all sides of the House—namely, that the area boards are in fact subsidiaries of the Central Authority in what is one single industry. It is impossible to take the electricity industry and cut it into two pieces, and to say there are two entirely different industries, one being generation and the other distribution. That does not by any canon make sense. And if it is to be considered as one single industry, with the area boards as subsidiaries, or the distributing end of the manufacturing business, there can be no logic, either on business or other grounds, in separating the two and empowering the Minister to appoint servants (as they are) of the Central Authority. In the course of the remarks which I made in your Lordships' House at the time of the Second Reading of this Bill, I asked the noble and learned Viscount, the Lord Chancellor, if he could state what the reasons were for adopting this procedure. I was disappointed in his reply because, as the noble Viscount who has just sat down said, he adduced reasons to show why it would work, but he did not produce any reason for following this particular procedure. In default of a good reason, I find myself opposed to the provisions of the Bill, and fully in support of the Amendment proposed by the noble Viscount, Lord Swinton.
THE EARL OF LYTTON: I would like to acid a word in support of this Amendment. In doing so, I am in no way influenced by anything which the Minister may have said. I disclaim any suggestion of political jobbery on the part of the Minister. After all, we must remember that this procedure will continue, but Ministers come and go, and the Parties

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change. Whoever may be the Minister, and to whatever Party he may belong, let us consider this question of principle on its merits. It is from the point of view of efficiency that I support the proposal that the Central Authority should appoint the members of the area boards, rather than the Minister. The Minister, of course, appoints the Central Authority. They cannot appoint themselves, and they cannot come into existence by spontaneous generation. The Minister appoints the Central Authority. It is right and proper than he should make that appointment; there is really no alternative.
But when you come to the area boards there is an alternative. The question before us is simply whether it is better that the members of the area hoards should be selected by a Government Department—I will not say by a Minister but by a Government Department, because that is what it comes to, as a Government Department will remain after an individual Minister goes—or by the Central Authority who are responsible for the general efficiency of the industry as a whole, and who must know better than anybody else who are the available people with the necessary qualifications, experience and knowledge to constitute the membership of the boards. It is really only a question as to who would be the best judge. This is in no sense a Party issue. I would take exactly the same view whatever Party were in power at this moment, and whatever individual was Minister of Fuel and Power. The issue before us is whether it is better that the members of the area boards should be appointed by a Government Department or by the Central Authority, who are the authority responsible for the efficiency of the industry. For the reasons I have mentioned I am in favour of placing the appointment in the hands of the Central Authority.
LORD LLOYD: I would like to add just one word to what was said by the noble Viscount, Lord Swinton. I think he made it abundantly clear to your Lordships that the position of the area boards vis-à-vis the Central Authority was really that of subsidiary companies vis-à-vis holding companies. I am fortified in that view by reference to the Report stage in another place, because there I find that the Parliamentary Secretary, although
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dealing, I admit, with another matter, which was the possibility of outside interference in the fixing of tariffs by the Central Authority, said this:
"It is, in fact, in precisely the same position"—
this is referring to the Central Authority—
" … of a holding company in relation to subsidiary companies. Surely, he is not suggesting that the terms on which a holding company may dispose of electricity to a subsidiary should be subject to outside arbitration?"
If that does not make my noble friend's case for him I do not know what does. For that reason, I feel I must support what he has said.
VISCOUNT RIDLEY: I would like briefly to support this Amendment. As the noble Earl, Lord Lytton, has said, it is a question of what is the most convenient way of appointing the subsidiary branches of the Central Authority. I would draw your Lordships' attention to, the arrangements made under the Coal Industry Nationalisation Act, where a different arrangement was made to what is now proposed. The regional boards or the area boards are quite definitely appointed by the National Coal Board, and it seems to me a perfectly right and proper thing that the responsibility for the whole business is on the Central Authority with a certain amount delegated to the area boards as their agents. Therefore, it seems only right that they should appoint them, give them instructions, keep in touch with them and control them.
Further, in the Transport Bill we had some discussion upon this. There is, I think, a difference, because there it was a question of different types of transport being operated by different Executives, whereas here we have the whole of one industry being divided into sections and these sections being put under one coordinating authority. It seems much clearer than it was in the Transport Bill that they should have the sore control of these matters. In an Amendment which I recently moved, I was trying to make the area boards as independent as possible of the Central Authority, and it may perhaps seem illogical to support this Amendment which puts the appointing of the members of these boards in the hands of this Authority. I think it is clearly right that they must be appointed by somebody and that they must have re-

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sponsibility to the Central Authority. The point to my mind is that the Central Authority should approach this business in the spirit of decentralization as much as possible, and that does not seem to defeat the very simple principle that they must appoint the people who are to be their agents.
VISCOUNT HALL: I am rather sorry that the noble Viscount who moved this Amendment reverted to a question which was mentioned on the Second Reading of this Bill. I do not propose to follow him other than to say that I am pleased that other noble Lords did not give the same reason for supporting this Amendment. I can understand why noble Lords are somewhat anxious concerning the appointment of these boards. I do not think the area boards to be set up under this Bill are in any way analogous to the regional boards set up under the Coal Act. The regional boards under the Coal Act have no separate existence at all. They are agents of the Central Coal Board for the purpose of producing coal, and the result is that they are part and parcel of the Central Coal Board in that sense.
The difference between the Coal Act and this Bill is that here the Central Authority, who are the producing authority, are an authority responsible for the production of the electricity to be sold to the area boards. It is true, as noble Lords have argued, that the Central Authority have certain powers over the area boards. I think that is all the more reason why we should have some authorities independent of the Central Authority to make up the area boards and who are not just to be servants of the Central Authority. There are two distinct functions, one being the generation of electricity; and the other distribution. It is for that reason that the Government are very anxious that the area boards (which are corporate bodies) from the angle of appointment should be quite independent of the Central Authority. Indeed, as your Lordships know, four of the chairmen of the area boards will become members of the Central Authority.
It has been argued in support of this Amendment that the Coal Act set up one board only. Well, that is so, and I have given reasons why that was necessary. In contrast, the area boards under
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this Bill are to be the distributors and the retailers of electrical energy, thus providing a supply in the homes, the offices, the factories and the farms of the persons within that area. It may well be that there will be a clash between the area board and the Central Authority on matters which are likely to arise in the course of their duty, and I would infinitely prefer that they should go to the person who appointed them in the event of difficulty of that kind rather than have their differences settled by the body with whom they are in dispute.
In all these circumstances, His Majesty's Government are convinced that while a certain measure of co-ordination of their activities is necessary in the higher interests of the country as a whole—this co-ordination is provided for in the Bill—these area boards should be powerful bodies untrammelled by supervision by the Central Electricity Authority as far as possible in the performance of their day-to-day functions in their area. For that reason it is proposed that members of the area boards should be appointed by the Minister. I do not want to repeat what I said on the Second Reading of this Bill. It may not have been convincing but I thought that the reasons I gave were very good reasons.
I will call to the support of the Government an independent authority in this matter, for in the Economist of June i8 there was a quite impartial article on this very important Bill, and on this particular subject this is what the Economist said:
"There is a real distinction between the Central Authority and the area boards, between the functions of generation and wholesale distribution on the one hand and of retail distribution on the other. All public power stations under grid are to belong to the Central Authority. The distribution systems that come into contact with the consumer and his varied requirements are to be in the hands of fourteen area boards. Moreover, it is apparently the intention, despite the enormous powers given to the Minister, to leave the area boards in comparative independence both of the Central Authority and of each other. All of them, it is true, are to be appointed by the Minister, but it is difficult to suggest any form of local appointment or election which would produce efficient boards, and appointment by the Minister is likely to give the boards more independence than they would get if they were appointed by the Central Authority, which would be the only practical alternative."
That is the view of the Government. We think that it is very much better that they

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should have the independence that being appointed by the Minister would give them, and we think that it is in the interests of the electrical industry that that should be so.
THE MARQUESS OF SALISBURY: I wonder if I might make one more appeal to the Government. I think we all appreciate the frankness and sincerity with which the noble Viscount who has just spoken has put to the Committee the Government's case, and I believe that he himself is convinced of that case. But to many of us, the position of the Government is still a very unconvincing one. This is, of course, no new issue at all. It is an issue which has arisen in one form or another in every nationalization Bill we have had before us. I do not say that the circumstances are identical, but the position is the same. The position as we understand it is this. Whether you have an industry privately owned or publicly owned, I think it is common ground between us all that it should be managed on business principles. The existing boards of directors will be done away with and they will be replaced by Commissions or Central Authorities or whatever you like to call them. I wonder why the Government choose a different name for these bodies in each Bill. They are exactly the same thing—boards of directors representing the community, who are shareholders in the new set-up. That is how I understand the position. Surely it is right that those new nationalized boards of directors should have something of the same authority that the old ones had, something of the same powers and duties.
The noble Viscount, Lord Hall, argued this afternoon that in this particular case the situation was different from that in other Bills. He said that under the present Bill the regional boards would have a great deal more independence, that they would be really, in effect, independent bodies, and therefore it was natural that they should go direct to the Minister, who is head of the whole concern, rather than to the Central Authority. But is it really true that they are so independent? It seemed to me that there was a lack of logic in that portion of the noble Viscount's argument. If one looks at Clause 6 it really says that the Central Authority are to give directions to the area boards for co-ordinating distribution and for control
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over policy. For those purposes they are to be under the direction of the Central Authority. Is it sound, therefore, from the point of view either of the area board or the Central Authority that they should have direct access to some completely different person?
After all, the Central Authority are an expert body. I remember the noble Lord pointing out the other day that Lord Citrine could be regarded as an expert because he had spent a large part of his early life in the industry. He is to be the Chairman, and I suppose there are to be a number of other persons who know about the industry, and that that is why they are to be there. They are, I presume, men fitted to give advice and direction to the area boards. When you come to the Minister, he is a person who is selected for his post for quite different reasons—for his political opinions. I do not intend that as a criticism, became politics is a profession—and a more reputable profession than some people think. But it is not the same profession as that of managing the electricity industry. I cannot believe that the advice which will be given by the Minister or his very competent permanent officials, will be as good as advice given by a board composed of people who have been all their lives in the industry. However, we still feel that the area boards ought to be responsible to the Central Authority and that the Central Authority, therefore, ought b have the power of appointing the are boards who are responsible to them. T0 me it seems logical and right, and I cannot see any really strong argument against it.
There is another point to be borne in mind and that is the question of the actual position of the Central Authority themselves. I have no doubt that the Government want it to be the sort of body that all the great people in the electricity industry will want to join. But they will not join a Central Authority in which they have a purely fictitious power and when all the power over their own subordinates is vested in the Minister. That is not mere theory. It would certainly be my position if I were asked to be a member of the Central Authority. People so asked would say: "What powers are we going to have?", and if they found in fact that not only would they be overridden but very often would not even be consulted

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at all—the area board may go straight to the Minister who had appointed them—a great many of these important people would say, "No thank you; I think I will not." You will get a number of only second-rate people. If you are going to build up this great pyramid in stages, with the area board responsible to the Central Authority, and the Central Authority responsible to the Minister, and the Minister responsible to Parliament and the country (it is not for me to give advice to the noble Lords opposite on how a nationalized industry should be built up) that is the only basis on which I think it could work. It is for that reason, and not for any ideological bias, that we still think, in spite of speeches made to us, that we are on the right side in this Amendment, and that is why we are prepared to press it to a Division. If we come to a Division on this point, it will not be on political grounds; it will merely be because we regard it as a technical Amendment and we are trying to make a technical improvement in the scheme.
THE LORD CHANCELLOR: I know your Lordships are always willing to listen to an argument, even at the last moment. I feel so strongly that what we are here proposing is right that I want to address this argument to you, and particularly to the noble Marquess. I entirely agree with him that there is no ideological question at all between us here, and I think we can make up our minds what, in all the circumstances, is the best and most convenient arrangement; it is nothing more than that. So far as precedents go, I do not think they throw much light. Your Lordships may remember that under the Coal Industry Nationalisation Act regional bodies have no separate existence at all. If they enter into a contract, or anything of that sort, they make that contract for and on behalf of the Coal Board. That being so, it is inevitable, therefore, that the Coal Board should appoint these people who are their agents. You will remember that this same question arose under the Transport Bill, and the majority of the House thought differently from the Government; consequently the various Executives are now, by an Amendment moved in this House, to be appointed by the Commission. We shall see in the course of a day or two the view that is taken of that in another place. But I think it would be unwise at this
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stage to base any argument on the fact that on the Transport Bill we did something different from what we are doing now. It may be—I gather that it probably will be—that the Amendment will be debated in another place and that it will come back to us to decide what to do. I tell your Lordships now, leaving out precedents, that I think it is desirable that the appointment should be made by the Minister.
What I am concerned with here, to be quite frank with you, is the criticism which was made, and most forcibly made, by some of your Lordships on the Second Reading debate, that the area boards are mere puppets of the Central Authority. I am hound to say, as I listened to some of the speeches, that they had very great force. The noble Viscount, Lord Ridley, said this:
"… The only way to make this plan work is to have these area boards as completely autonomous, independent units."
I think that is putting it too high, but we must try to preserve some spark of autonomy. The noble Lord, Lord Barnby, said:
"I am convinced that the area boards should have greater authority and should have imposed upon them some measure of financial authority."
Lord Hawke said:
"In other words, the area boards are complete puppets of the Central Authority."
I think all their Lordships exaggerated slightly in those statements, but I think they all have a very great deal of truth in them.
I think they are pointing out a danger. You realize that the Central Authority, who are the suppliers of the electricity which the area boards are hound to take, have the right to fix the price which their customers, the area boards, shall pay for the electricity. That is Clause 37. It is for that reason that I think it is important, although to some extent I agree that the area boards are the puppets of the Central Authority, that we do not let this puppetry go further than is absolutely necessary. I do beg your Lordships to consider that; I really do. I do ask your Lordships to try to give the area boards some sort of little independence from these people who are performing a different function in the main—that of generation; while the area boards are dealing with distribution. Try to en-

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courage them to be able to speak up when they get into controversy with the Central Authority.
What is the good of adding to all these things? You are piling Pelion upon Ossa. You say that already the Central Authority have this right and that right; they can make these area boards to some extent dance to their tune. What on earth is the good of making the personnel of the area boards dependent for their existence upon the wish of the Central Authority? It is most important—and there are no politics in this; it is mere common sense as I see it—to try to get some degree of independence from the Central Authority in the area boards. I believe that you will do that better if you relieve the Central Authority from the obligation of appointing the personnel of the area boards. I believe in that way we shall do better in avoiding that to which the noble Lords, Lord Ridley, Lord Barnby, and Lord Hawke, all called attention on the last occasion with great force—namely, the risk of these area boards becoming the complete puppets of the Central Authority. I say that that is intensified if, in addition to the necessary powers which the Central Authority have under this Bill, they can appoint the personnel of the area boards.
For that reason, I beg your Lordships to consider this matter. The issue of the Economist for the 18th of January—I believe that is right—surveyed the question, went over it, and said this was the best form of appointment in order that those authorities might have some independent existence, independent of the Central Authority, and independent of each other, so that a young electrician going into the industry could see fifteen different people with whom he could deal. That is what was said in the Economist. It is because I feel that this Amendment would have the inevitable effect of making the area board still more dependent upon the Central Authority that I beg your Lordships not to force this Amendment upon us.
There is one further point I might add, for which I am much obliged to my noble friend, Lord Chorley. There is an Amendment on the Paper, almost the next one, asking that there shall be consultation. It is the Amendment to page 7, line 22, standing in the name of Viscount
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Elibank and the Earl of Rothes, that the Minister should do this and should only do it "after consultation with the Central Authority." In that way, we do get the Minister consulting the Central Authority, and I suggest that that is a way which perhaps would be satisfactory.
VISCOUNT SWINTON: That is only in regard to the size of the areas.
THE LORD CHANCELLOR: If there is not an Amendment to meet this point, I am perfectly prepared to accept an Amendment that, in appointing the Personnel of the area hoard, the Minister shall consult with the Central Authority. I thought there was such an Amendment down, but I cannot find it.
LORD RENNELL: I think the Amendment is the one to Clause 6, page 10, line 15, about the Minister giving directions to the area hoard "after consultation with the Central Authority."
THE MARQUESS OF SALISBURY: The Lord Chancellor has drawn attention to an Amendment which apparently deals with a rather limited point, but he has said that he might be prepared to devise an Amendment which would spread that more widely over the whole field. I think that perhaps we ought to look at this. I do not feel entirely happy about it, because I still feel that the scheme will not work—I may be entirely wrong—and that you will get the area boards constantly short-circuiting the Central. Authority. They will take orders direct from the Minister, or go direct to the Minister. They will be appointed by the Minister and he will be responsible for them. They will not tie puppets, which was the word the noble and learned Viscount used. I do not think it is quite a fair word to use. You can always say that anyone who is appointed by anyone else is a puppet. Under the noble and learned Viscount's definition they will either be puppets of the Central Authority or puppets of the Minister.
I do not believe that you will have a coherent scheme unless the area hoards receive their instructions from the Central Authority, and the Central Authority receive their instructions from the Minister. Without such a system I do not believe that the scheme will work. At the same time, if the noble and learner: Viscount thinks he can draft an Amendment before the Report stage which gives

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what he believes to be a greater nexus of consultation, I think the Committee would be wise to look at it. At any rate, to divide now, without even looking at the Amendment which has been proposed, would not be quite fair. Therefore, if the noble and learned Viscount is prepared to discuss an Amendment with us before the Report stage, we can still insist upon our view if we are not satisfied.
VISCOUNT SWINTON: Of course, consultation about the size of an area is something quite different. Do I understand the proposal to be that the Minister, in appointing, if he is to have the power to appoint area boards, shall do that in consultation with the Central Authority?
THE LORD CHANCELLOR: That is the point.
VISCOUNT SWINTON: It is not in the Bill now.
THE LORD CHANCELLOR: That is right.
VISCOUNT SWINTON: I want to be quite clear what the proposal is. As the Bill stands, the appointments are entirely with the Minister. As this stands, I do not think the First Lord read it quite accurately. I think I am right that the Amendment, which was put down rather carefully, aims at having the words: "the Central Authority with the approval of the Minister." That goes a very long way; it gives the Minister the chance of vetoing. The Lord Chancellor's proposal is that the Minister should not have the power of veto upon the recommendation of the Central Board, but that the Minister should appoint after consultation with them.
THE LORD CHANCELLOR: That is right. That is exactly the nature of the Amendment which I might put down. I was wrong in thinking there was one on the Paper. Such an Amendment would simply make it quite plain that before the Minister appoints an area board he has to consult with the Central Authority. I do not think it matters much whether it is done that way, or whether it is done the other way. For the reasons I have given, I prefer that, and I hope that your Lordships will look at that Amendment before you decide to press this to a Division.
VISCOUNT ELIBANK: May I say one word, as I am very interested in this particular Amendment? Looking at Clause 6 of the Bill, I feel that the area boards are placed right in the hands of the Central Authority so far as directions and policy are concerned, and I do not altogether agree with the suggestion that by being appointed by the Minister the area boards will become puppets of the Central Authority. I take a different viewpoint. It is most important, as was stated by several noble Lords in the Second Reading debate, that these boards should be as autonomous as possible; and there is a way of making them autonomous, and less amenable to Clause 6, by having them appointed by the Minister with the approval of the Central Authority. I am sorry not to go the whole way with some of my noble friends on these Benches, but, again, I would like to refer to the question of Scotland. I think it is important that the area boards in Scotland—that is for the southwest and south-east of Scotland—should be appointed by the Secretary of State, with the approval of the Central Electricity Authority, because, looking to the future, it may be easier to merge into another state in that part of the country.
VISCOUNT SWINTON: In view of the proposal made by the Lord Chancellor, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.37 p.m.
LORD RENNELL: The next Amendment is one to which the noble Viscount referred earlier on. It involves the insertion of the word "agricultural" in regard to representation on the area boards. I beg to move.
Amendment moved—
Page 6, line 24, after ("commercial") insert ("agricultural.")—(Lord Rennell.)
VISCOUNT HALL: This Amendment, as I explained, is accepted.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is one of the matters which arose out of the first Amendment on our discussion in regard to six months and three months, and I then had to provide that the area boards and the consultative councils should be properly appointed. This is really to meet that Amendment. I beg to move.
Amendment moved—
Page 6, line 31, at end insert:
"Provided that, until the consultative council has been established, an area board shall he deemed to be properly constituted notwithstanding that the board does not include the member referred to in paragraph (b) of this subsection."—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD HAWKE LORD HAWKE had given Notice that he would move in subsection (6), to leave out "and to the members of each of the area boards." The noble Lord said: This Amendment is tied up with the long discussion we have just had. If the noble Viscount is prepared to give me an assurance that when he is drafting something to meet that other Amendment he will consider re-drafting to the effect that the pay of area boards shall be fixed by the Minister in consultation with the Central Authority, I will not move my Amendment here.
VISCOUNT HALL: I think they do depend very largely upon the arrangement which is arrived at and which was referred to by the Lord Chancellor, and I can give that assurance.
LORD HAWKE: Then I will not move this Amendment.
LORD TEYNHAM had given Notice of three Amendments: to leave out paragraphs (b) and (d) of subsection (7) and at the end of the clause to insert:
"including the manner in which matters subject To the determination of the Central Authority and the area board are to be determined by or on behalf of the Central Authority and that area board respectively"
The noble Lord said: For the convenience of your Lordships may I suggest that this and the next two Amendments standing in my name and that of my noble friend Lord Lloyd be taken together? The whole object of these three Amendments is to hive greater freedom to the Central Authority and the area boards so that they can regulate their own proceedings without interference by the Minister.
Ministers have frequently gone out of their way to emphasize that these national corporations should be considered as business corporations and conducted as such; yet we now have a clause which would have the opposite effect. A little further on in the Bill, in Clause 5, it is laid down that the Minister may give
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"such directions of a general character as to the exercise and performance by the Authority of their functions under this Act as appear to the Minister to be requisite in the national interest."
This, presumably, is intended to indicate that matters outside the national interest would be left to the determination of the Central Authority. It is true that the proceedings of the Central Authority and the area boards are to be determined by regulations made by the Minister, but I suggest, whatever the manner in which it is done, that it is a great interference vita the organization and authority of the Central Authority and the area boards. For these reasons I beg to move.
Amendment moved—
Page 7, line 8, leave out paragraph (b).—(Lord Teynham.)
LORD LLOYD: I would like to say just a word in support of this Amendment I think that the noble and learned Viscount has almost made a case for tits Amendment for us. He has told the Committee how important it is that these area boards—and this, of course, concerns the Central Authority—should have the maximum of independence. Yet, when we turn over a page of the Bill, we find that they are tied up with every kind of red tape as regards most simple matters: as, for instance, their quorum and proceedings. There is no such provision with regard to the Central Electricity Board at the present time. They are entirely free to settle their own proceedings and procedure, except that their quorum must not be less than one-third. I submit that we must assume—at any rate we must certainly hope—that these bodies, when constituted, will be constituted of men of some eminence, men with knowledge and sense of responsibility. If that is not the case, then all I can say is that it is a very poor lookout for the electricity industry. I submit that these people ought to be allowed to settle these very ordinary matters for themselves, without being treated to a lot of regulations by the Minister, just as though they were children. It seems to me that to treat them in such a way would be rather ridiculous, and I hope that the noble Viscount will be able to accept this Amendment.
VISCOUNT HALL: It is not for the purpose of extending any red tape that we ask that the Amendment should net be pressed. As I understand it, it is quite the usual practice for committees and

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boards to have their general procedure covered by Articles of Association, approved by some persons of authority outside themselves. All the matters referred to in paragraphs (a), (b) and (c) of this subsection deal with matters covered in the Articles of Association of a company. They are matters which are commonly covered, in the case of a company, by the Articles of Association which are approved by the members or shareholders of the company. I cannot see why any objection should be raised to any of them.
Perhaps I may give an example: the Central Authority and the area boards are to be composed of whole-time and part-time members, and it may be essential to provide under paragraph (b) that at all meetings at least one full-time member should be present to take the chair. It is also desirable that Parliament and the public should be informed as to the manner in which the business of these bodies is being conducted. The omission of paragraph (d) would render it impossible for the Minister to provide in the regulations for supplementary matters which may be necessary—such as, providing that a Board shall have power to act notwithstanding a vacancy among its members, or that all acts done at a meeting of a Board shall be valid notwithstanding that some defect in the appointment of a person purporting to be a member was subsequently discovered. I feel sure that noble Lords will recognize that these provisions are not unnecessary or excessive, and that there is ample commercial precedent for them, quite apart from the precedent of other legislation. Indeed, in the Transport Bill, these matters were laid down in the First Schedule. For these reasons I hope that the noble Lord will see fit to withdraw his Amendment.
LORD TEYNHAM: In view of what has been said by the noble Viscount, I do not propose to press this Amendment. I am certainly interested in his analogy about Articles of Association, which is, to a certain extent, quite true. There is truth too, I feel, in what he says with regard to paragraph (d), that if there were any defects in an appointment it would create difficulties. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
Clause 4:
Definition of and variation of areas.
4.—(1) The Minister shall before the vesting date by order define the areas for which area boards are established under this Act, and each area shall be so defined by reference to a map, and copies of the map of each area shall be available for inspection at such places and at such times as may be specified in a notice published by the Minister in the London Gazette and, in the case of an area in Scotland, the Edinburgh Gazette, and (in all cases) in such newspapers circulating in the area as the Minister thinks fit.
5.45 p.m.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved, in subsection (1), after "order," to insert: "made after consultation with the Central Authority." The noble Viscount said: After the discussion which has recently taken place I presume that the noble and learned Viscount will be prepared to accept this Amendment. It refers to the definition of areas. Three Amendments were moved by the noble Viscount, Lord Swinton, under which the vesting date would not be for six months, the area boards would not be appointed for three months, and the Central Authority would be appointed at the commencement of the six months, and there will be ample time for the Minister to define the areas in consultation with the Central Authority. I beg to move.
Amendment moved—
Page 7, line 22, at end, insert the said words.—(Viscount Elibank.)
THE LORD CHANCELLOR: I can accept this Amendment.
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Clause 5 agreed to.
Clause 6:
Powers of Central Authority and Minister in relation to Area Boards.
(2) In the exercise and performance of their functions as to training, education and research, every area board shall act in accordance with a general programme settled from time to time in consultation with the Minister.
(3) The Minister may give directions to any area board as to the use or disposal of any assets vested in the board by or under this Act which are not connected with the distribution of electricity, and the board shall give effect to any such directions.
5.50 p.m.
THE EARL OF LYTTON THE EARL OF LYTTON moved, in subsection (2), to leave out "Minister," and insert "Central Authority." The noble Earl said: I propose to leave out the last word of subsection (2) of this clause and to substitute the words "Central Authority." This subsection deals with the area boards' "exercise and performance of their functions as to training, education and research." My Amendment proposes that in exercising those functions the area boards shall act in accordance with a general programme settled from time to time in consultation with the Central Authority. It is merely a matter of administrative procedure. If your Lordships will turn back to page 9 of the Bill and look at Clause 5 (3) you will see that it there states:
"In the exercise and performance of their functions as to training, education and research, the Central Authority shall act in accordance with a general programme settled as aforesaid"—
In other words, where the Central Authority are engaged in matters of training, education and research they shall work to a general programme which has been settled in consultation with the Minister.
Surely, when it comes to the next stage, that of carrying out that programme in detail, the Central Authority who have settled their programme with the Minister, should scale the details with the area boards. There should not be two stages with the Minister settling programmes, first with the Central Authority and subsequently with the area boards. I submit that administratively it is much better that the Central Authority, having fixed their programme in consultation with the Minister, should carry out the detail of it in consultation with the area boards and that interference by the Minister, proper at the first stage, would not be proper in the subsequent stage. I beg to move.
Amendment moved—
Page to, line t4, leave out ("Minister") and insert ("Central Authority").—(The Earl of Lytton.)
VISCOUNT MAUGHAM: I wish to support this Amendment. It is true, as the noble and learned Viscount, the Lord Chancellor, said, that area boards are not agents of the Central Electricity Authority. But it is also true, as he said, that
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it is very desirable they should be as autonomous as possible. They have to work in intimate relationship with the Central Authority, and they can do nothing without the help of the Central Authority; and it does not seem to me right that the general programme of the area beards should have to be settled in consultation with the Minister who is not really aware of the clay to day relations between fie Central Authority and the boards. I would add that there is no Amendment to subsection (3), where the noble Earl who moved this Amendment is quite content that the Minister might give direction to any area board as to the use or disposal of assets. But this matter of the general programme ought to be settled between the Central Authority, or at any rate with a very strong reference to the Central Authority, to see that they concur with the general plan which may be laid down by the Minister. I support the Amendment. I think it is simple, and I think it will do good.
VISCOUNT RIDLEY: I do not q know why there is a separate subsection dealing with training, education and research, and I support the noble Earl la saying that such matters should be agreed, primarily, between the Central Authority and the Minister and, secondly, between them and the area boards. I would like to say something about the independence of the area boards. The noble and learned Viscount, the Lord Chancellor, I am glad to say. was emphatic about his belief in their independence and referred to what was said by myself and of to noble Lords on Second Reading. Granted that we wish to preserve the maximum degree of independence within the proper exercise of their functions, I feel that it is rather a moot point whether we shall be able to preserve it by having the area boards appointed by the Minister in consultation with the Central Authority. I take the view that if this whole business is to work, it can only work by the Central Authority appreciating the importance of putting the area boards on their feet and in a position to manage their own affairs. I have some fear that Ministers—not this particular Minister, but Ministers in general and in the future—advised by their Departments as they would be, would not be so inclined to try to keep them separate and independent, and for that reason I support this Amendment. I

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very much appreciate what the Chancellor said about trying to keep them separated. I am glad that he, speaking for the Government, expressed that view.
THE LORD CHANCELLOR: The significance of this is quite simple. With regard to the general programme—I stress the adjective "general"—I think the Minister ought to have the last word. You will see in Clause 5, subsections (2) and (3) particularly on page 9, line 25, that it is provided that "the Central Authority shall act in accordance with the general programme settled as afore-said"—that is, settled from time to time in consultation with the Minister. When it comes to the area boards we thought that we ought to have the same words there also, so that they would be subject to the same restrictions as the Central Authority. The reason is that there are many Departments of the Government which are dealing with these questions of research and education, and it is very desirable, as all your Lordships will agree, that we should not duplicate.
If the Minister of Education has some training scheme, or some committee is already investigating such a subject as coal conservation, or, still more obviously, something which I think is becoming possible within the next twenty years, the use of atomic energy, it would be perfectly hopeless to have the Central Authority and the area boards each conducting their particular experiments in these things, instead of all making use of the experiments the Government are conducting. Everybody will agree with that. That being so, we thought it better that the last word should be with the Minister, because he keeps in touch with his colleagues in other Departments much better, and would be able to see that there was no overlapping which would lead to waste and more expense. It is purely for that reason that we thought that, as in the case of the Central Authority so in the case of the area boards, the general programme should be settled in consultation with the Minister.
LORD HAWKE: Do I understand from the noble and learned Viscount, the Lord Chancellor, that over this particular matter the area boards will have direct access to the Minister to settle questions? Because that was not how I originally read
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the Bill. I read that the Central Authority would agree a general programme with the Minister—that is in Clause 5 (3)—and I imagine that a general programme must properly embrace the whole country and would include most of the activities afterwards to be delegated to the area boards. If the area boards are not going to fit into that programme, which has been settled with the Minister by the Central Authority, surely chaos will result. I cannot see that the area boards have any reason for going direct to the Minister. Surely they must go to the Central Authority, the body who have settled all their programme.
THE LORD CHANCELLOR: The noble Lord, Lord Hawke, of course will realize that in considering the programme of training, education, and research, the Minister has to co-ordinate the programmes both of the Central Authority and of the area boards. It is very possible—I say this only for illustration—that the Central Authority will confine themselves to research and education in connexion with generation, and it is quite possible that the area boards will confine themselves to distribution, but obviously there is overlapping—we cannot have a hard and fast line—and it is desirable that the Minister should be able to settle both programmes in order to avoid overlapping between the Central Authority and the area boards, and, more important, between his Department and other Departments.
VISCOUNT MAUGHAM: Would the noble and learned Viscount consider that subsection (1) is obviously overlapping subsection (2)? The Central Authority have to give to the area boards every direction necessary for the purpose of coordinating the distribution of electricity by area boards and exercising a general control over the policy of these boards, and the area boards must give effect to such directions. That seems to me to be an overlap. Subsection (2) says that a general programme has to be "settled from time to time in consultation with the Minister."
THE LORD CHANCELLOR: The general programme to be settled from time to time in consultation with the Minister is to be settled "in the exercise and performance of their functions as to training, education and research." Those particular things are to be settled by the Minister.
THE EARL of LYTTON: I read the Bill in the same way as my noble friend Lord Hawke, and that is why I moved this Amendment. I was under the impression that under Clause 5, subsections (2) and (3), the Minister, in consultation with the Central Authority, was to work out a general programme of training, education and research for the whole country, and that in Clause 6 we are merely dealing with the details of that programme which will be carried out by the area boards. Therefore, I thought it was not necessary to bring the Minister in twice—first, for the general programme and, secondly, for the carrying out of the detail. The noble and learned Viscount has pointed out that that is not the case but that there will be two different areas for this training, education and research, one in generation and the other in distribution. For that reason it is desirable that the Minister—who, I agree, must co-ordinate with other Government Departments—should have the last word, both with the Central Authority and the area boards. In view of the noble Viscount's explanation, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
VISCOUNT ELIBANK VISCOUNT ELIBANK moved, in subsection (3), after "may," to insert "after consultation with the Central Authority." The noble Viscount said: This is another Amendment with regard to the Minister doing something after consultation with the Central Authority. In this case it refers to
"the use or disposal of any assets vested in the board by or under this Act which are not connected with the distribution of electricity."
I think it is just as well that the Minister should have the same consultation in that case as in others. I beg to move.
Amendment moved—
Page 10, line 15, after ("may") insert ("after consultation with the Central Authority."—(Viscount Elibank.)
THE LORD CHANCELLOR: I, too, think it is just as well, and, therefore, I have pleasure in accepting the Amendment.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7:
Consultative councils.
7 .—(1) A consultative council shall be established for the purposes mentioned in this section for the area of every area board.
(2) Each of the said councils shall consist of not less than twenty nor more than thirty persons to be appointed by the Minister of whom—

(a) not less than half shall be appointed from a panel of persons nominated from amongst members of local authorities in the area by such associations as appear to the Minister to represent those authorities; and

(b) the remainder shall be appointed, after consultation with such bodies as the Minister thinks lit, to represent agriculture, commerce, industry, labour and the general interests of consumers of electricity and other persons or organizations interested in the development of electricity in the area.

(4)Each of the said councils shall be charged with the duties—
(a) of considering any matter affecting the distribution of electricity in the area, including the variation of tariffs and the provision of new or improved services and facilities within the area, being a matter which is the subject of a representation made to there by consumers or other persons requiring supplies of electricity in that area, or which appears to them to be a matter to which consideration ought to be given apart from any such representation, and where action appears to them to be requisite as to any such matter, of notifying their conclusions to the Area Board; and
6.4 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2) (a), after "half" to insert "nor more than three-fifths." The noble and learned Viscount said: In another place the Opposition were anxious to get in some limitation to the number of persons to be appointed from local authority members. I have drafted this Amendment in order to go as far as I can to meet the arguments which were then advanced, and I hope it will appeal to your Lordships. I beg to move.
Amendment moved—
Page 10, line 35, after ("half") insert ("nor more than three-fifths").—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD LATHAM LORD LATHAM moved, in subsection (2), after paragraph (b), to insert:
"In making the appointments mentioned in paragraph (a) of this subsection, the London County Council shall be regarded as an association and."
The noble Lord said: This Amendment involves no question of principle, nor indeed of structure, and should not occupy your Lordships for any length of time. It is designed to preserve a locus for the London County Council as regards the setting up of the consultative

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councils by the Minister. It will have been observed that in Clause 7 (2) (a) the appointments are to be made from persons nominated "from amongst members of local authorities in the area by such associations as appear to the Minister to represent those authorities;". The London County Council are not members of any of the associations of local authorities. They act, and have acted for many years, in co-operation with them, and have been recognized as having a parity of status with the associations. But they are not members of any of the associations of local authorities. Accordingly, as the clause now stands, the London County Council would have no right of nomination of persons to be considered for appointment to the consultative council.
For many years the London County Council have carried responsibilities for safeguarding the consumers' interests as regards electricity supply in London. They are represented by six members on the London and Home Counties Joint Electricity Authority. I had the privilege of representing the London County Council on that authority for some six years, and I remember very well struggling with the problem of consumers' benefit, which could be very illusory at times. Nevertheless, there is cast upon the London County Council the obligation to make representations, and to protect in so far as they can the consumers' interests, both as regards charges and as regards supply. In those circumstances, I feel sure your Lordships will agree that the London County Council should have a right, similar to that intended to be given to associations of local authorities, to submit nominations to the Minister. I beg to move.
Amendment moved—
Page 11, line 1, at beginning insert the said words.—(Lord Latham.)
THE LORD CHANCELLOR: There can be no doubt to any of us who have studied these matters that the London County Council have played a distinguished and prominent part in watching the consumers' interests. They have always been consulted by all sorts of Government Departments, and they certainly always will be consulted. It would be ridiculous nowadays to suggest that they should not be consulted. If
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the noble Lord presses me, I will accept his Amendment but, quite frankly, if he will take my advice he will not press me to do so, but will rest content with the assurance that I give him that we do intend to consult the London County Council.
The reason for that suggestion is this. The word "association" which we have used here has a somewhat long history behind it. Whether or not technically the London County Council come within these words, the fact is that under other Bills they always have been consulted, and under this Bill it is our intention that the following associations of authorities should be approached as to a panel of nominees: The County Councils Association, the London County Council, the Association of Municipal Corporations, the Metropolitan Boroughs Standing Joint Committee, the Urban District Councils Association and the Rural District Councils Association. That is the list which is normally used by the Ministry of Health for similar purposes, and your Lordships will see that the London County Council are included. There are many enactments drafted by the Ministry of Health in which the London County Council are not specifically named but, in spite of that, it is the well-established practice of that Department to consider the London County Council as an association. For instance, draft regulations to be made under subsection (1) of Section 67 of the National Health Service Act, 1946, just published, include the following:
"a contributory employee or local Act contributor falling within such class or description of persons as the Minister may designate, after consultation with such associations of local authorities as appear to him to be concerned …"
The principal association of local authorities in that case are the London County Council, although the term "association" is not expressly extended to cover the London County Council. It would be foolish (in that particular case, quite obviously foolish) not to consult the London County Council.
Why I advise the noble Lord not to press me to accept his Amendment is because I have given him a most explicit assurance that the London County Council will be consulted. If I put this in the Bill it may have the effect of some ingenious person saying: "You have specified in this Bill that the London

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County Council are an association, and unless you specify it in other Bills we must take it that they are not an association and you cannot consult them." This would have the opposite effect to what both the noble Lord and I desire. Therefore, on the assurances I have given him, I hope the noble Lord will not press. his Amendment, but if he wants to press it. I will accept it.
LORD LATHAM: In view of the very ample assurances given by the noble and learned Viscount, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.10 p.m.
LORD TEYNHAM LORD TEYNHAM moved, in subsection (4), to add to paragraph (a), "and to the consumers or other persons by whom representations have been made as aforesaid." The noble Lord said: For the convenience of your Lordships, may I suggest that I deal with this Amendment and the next—to add a paragraph to subsection (7)—together? These are two very simple Amendments, which I think are really self-explanatory. Their object is to ensure that the consumer who has made a complaint or representation to the consultative council shall be informed what action has been taken on the matter. The two Amendments really provide that the consumer must be informed by the consultative council if they are taking action, and also if the Central Authority themselves are taking action in the matter. We think it only right that a consumer should be kept informed as to what is being done, because otherwise he may feel that his complaint has been pigeon-holed, when in fact something really is being done. We do feel that if these two Amendments are not accepted, the consumer would be dissatisfied, and that dissatisfaction would no doubt breed a large number of dissatisfied consumers. We think that these Amendments are very necessary to the Bill. I beg to move.
Amendment moved—
Page 11, line 29, after ("board") insert ("and to the consumers or other persons by whom representations have been made as aforesaid").—(Lord Teynham.)
THE LORD CHANCELLOR: If the consultative committee is doing its job I have no doubt that in nine cases out of ten it will keep the consumer informed. The
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consumer will naturally follow up his complaint, and the council will want to justify themselves by telling the consumer what they are doing about it. It certainly would be our desire to get the consultative council to work in that way. On the other hand, I do not think it is desirable to impose this as a statutory obligator. I think that is asking too much of these people, and I think it would very likely defeat its own object. I suspect that there will be some cases in which the consultative councils will deal with a complaint and will pass it on to the area board. They will get an answer from the area board which shows that the consultative council have gone off the deep end, and gone off backwards as it were, not really quite understanding what the problem was. I do not think it is desirable that they should have to pass on that sort of correspondence to the consumer. Therefore, I suggest that: we should not impose this statutory obligation upon them, out leave it to them as a matter of good sense to justify their existence to their various constituents by assuming they will answer letters. If you impose a statutory obligation I am not quite sure where we shall get, and I think that in the circumstance; the best course to take is to leave the matter where it is.
LORD WOLVERTON: The only trouble is that it is rather a lengthy process. The consultative council have to go to the area boards and the area boards to the Central Authority, who in the last resort take it to the Minister. It might take some time. and that is why we do feel rather anxious that consumers should be informed as to what course of action has been taken and what progress is being made.
LORD TEYNHAM: In view of the assurance given by the noble and leaned. Viscount that the consultative committees will in fact inform the consumers that a. complaint is being examined, I do not propose to press my Amendment.
Amendment, by leave, withdrawn.
Clause 7, as amended, agreed to.
Clauses 8 to 12 agreed to.
Clause 13:
Bodies to Whom Part of Act applies.
13.—(1) This Part of this Act applies to—

(a) the bodies specified in the Second Schedule to this Act thereafter in this Act referred to as "authorised undertakers")

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being the bodies who fall within the class in the next following subsection;
(2) The class of bodies referred to in paragraph (a) of the last foregoing subsection are—

(i) bodies who supply electricity, under the authority of any enactment, in any area of supply in Great Britain; and

(ii) bodies who supply electricity, under the authority of an enactment, to the bodies mentioned in paragraph (i) hereof or to the Central Electricity Board:

Provided that the said class does not include—
6.15 p.m.
LORD MORRISON LORD MORRISON moved in the proviso in subsection (2), to insert: "(a) the North of Scotland Board." The noble Lord said: On behalf of my noble and learned friend, the Lord Chancellor, I beg to move this Amendment. Although the North of Scotland Hydro Electric Board falls within the definition of authorized undertaker given in Clause 13, it does not appear in the list of undertakers in the Second Schedule to the Bill. The reason for this is that the Board itself becomes an Electricity Board under Clause I, and the acquisition provisions of Part II of the Bill are inappropriate to it. The Amendment covers its exclusion from the Schedule by excluding it from the class of bodies who are authorized undertakers for the purposes of the Bill. I beg to move.
Amendment moved—
Page 17, line 1, at end insert ("(a) the North of Scotland Board").—(Lord Morrison.)
On Question, Amendment agreed to.
LORD MORRISON LORD MORRISON moved to add to the clause:
"(6) Where an agreement under Section eighteen of the Act of 1943 for the transfer to the North of Scotland Board of the whole or any part of the undertaking of any undertakers comes into force between the passing of this Act and the vesting date, and the undertakers thereupon cease to fall within the class described in subsection (2) of this section, this Part of this Act shall not apply to them."
The noble Lord said: The Second Schedule to the Bill specifies the authorized undertakers to whom Part II of the Act will apply, and includes Fort William, Lerwick and Wick Corporations. Under Clause 14 these undertakings will, on the vesting date, vest in the North of Scotland Board. The Board has, however, reached agreement with the undertakers for the transfer of their undertakings to the
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Board by agreement under Section 18 of the Hydro-Electric Development (Scotland) Act, 1943, but the formal documents have not yet been signed and the agreements are not effective until this has been done. It is probable that before the vesting date the formal agreements for the transfer of the undertaking to the North of Scotland Board will have been effected. In such circumstances the undertakers will no longer be bodies who supply electricity in any area of supply, and it would no longer be inappropriate for Part II of the Act to apply to them. The Amendment provides accordingly. If in any case the agreement is not concluded by the vesting date, the undertaking will automatically vest in the North of Scotland Board under the Act. I beg to move.
Amendment moved—
Page 17, line 44, at end insert the said subsection.—(Lord Morrison.)
VISCOUNT ELIBANK: The object of this is that they are taken right out of the Bill? They are taken over by negotiation with the North of Scotland Board and taken right out of the Bill?
LORD MORRISON: That is so.
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14:
Vesting of assets of electricity undertakings.
14.—(1) Subject to the provisions of this Part of this Act all property, rights, liabilities and obligations which, immediately before such date as may be appointed by order of the Minister (in this Act referred to as "the vesting date") were property, rights, liabilities and obligations of a body to whom this Part of this Act applies, shall on the vesting date vest by virtue of this Act and without further assurance in such Electricity Board or Boards as may be specified in the following provisions of this section or determined thereunder.
(11) Subject to the next following section, every body to whom this Part of this Act applies shall be dissolved on the vesting date.
6.18 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (1), after "date," where that word first occurs, to insert "not being a date earlier than the first day of April in any calendar year." The noble Viscount said: The object of this Amendment is to ensure that the vesting date shall not come before April 1 in any calendar year. I think everybody will

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agree that this is a provision convenient to everybody concerned, the Government, the local authorities and the companies. It is a convenient date for the Government because consequent upon the Amendments to which we have already agreed there are to be six months at least to enable the Central Authority to get into their stride, and then three months after that the area boards come into being. It is obviously convenient from the point of view of local authorities, because I understand that all their financial years close at the end of March. It is also obviously convenient from the point of view of the companies, because your Lordships will have observed that under the Bill the companies are empowered, and indeed directed, to declare a dividend for their last financial year. A great many of the companies end their financial year on December 31. It takes a certain amount of time to get in all the accounts, certainly two or three months, and it is not any easier now—in fact it is more difficult with the shortage of staff and so on—than it was. Therefore, if April I—or if that were not considered a good date, some other date in April—were taken, everybody's interests would be served, and everybody could be as happy as they could reasonably expect to be under the new dispensation. I beg to move.
Amendment moved—
Page 18, line 3, after ("date") insert the said words.—(Viscount Swinton.)
THE LORD CHANCELLOR: I think I can go some way to meet the noble Viscount here. I may be able to go further on Report stage, but I can go as far as this now. If your Lordships will look at the Supplementary List, you will see that the next Amendment is one which I have put down. It says:
"The vesting date shall not be less than six months after the establishment of the Central Authority and not less than three months after the establishment of all the area boards …"
and I think I might add:
"and shall not be earlier in any particular year than April f of that year."
I am not in a position to say I can do that at the present moment, but I will consult with the Minister and find out whether I am in a position to do so. I can say now that I will suggest that it should not be earlier than April I, 1948.
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Perhaps it would be better not to put the words in now, because I will see between now and the Report stage whether I can get any additional words for the noble Viscount. But if he would be happier if he had those words in now, I am willing to put them in.
VISCOUNT SWINTON: I am very much obliged to the noble and learned Viscount. I am sure he will not withdraw his offer. For all practical purposes perhaps these words are good enough, because I imagine the thing will vest some time next year; but it is conceivable that if it is desired to go on with this interregnum for a considerable time, the argument would apply will equal force. Supposing it were decided that we were not to vest in 1948 but it 1949, all the arguments apply just as much, irrespective of what particular year it falls in. I think it would be more convenient to pass the Lord Chancellor's Amendment when we come to it and let him put down the best he can lo for me when it comes to Report staff re. I am very grateful to the noble and learned Viscount, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: This is the Amendment to which I referred just now. I beg to move.
Amendment moved—
Page 18, line 9, at end insert:
("The vesting date shall not be less than six months after the establishment of tie Central Authority and not less than three months after the establishment of all the area boards and the definition by order made under Part I of this Act of all the areas for which those Boards are established.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next is a drafting Amendment. I beg to move.
Amendment moved—
Page 18, line 35, after ("all") insert ("rights, liabilities and obligations under")—(The Lord Chancellor.)
On Question, Amendment agreed to.
6.25 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved to leave out subsection (11). The noble Lord said: I must ask your Lordships to bear with me while I deploy a rather complicated series of proposals. I am sure it will be

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convenient to deal with the whole business now, because I have to get rid of subsection (11) having regard to the long clause standing in the names of Lord Rennell, the Earl of Lytton and myself, which follows immediately after, and a great many other Amendments, all of which are consequential upon that. Therefore, with your Lordships' permission, I will explain just what it is we want to do. We want to make provision for the continuation of two types of company. As your Lordships will have appreciated, setting aside what are called composite companies—that is, companies which are electrical companies and which also have gas or water in addition—all the companies which have 75 per cent. or more of their stock or loans in the generating or distributing industry are taken over completely under this Bill.
The date is also important, because the test date is not the date of the passing of the Act, but January I, 1946, and circumstances may have changed meantime in relation to those companies' investments. Clause 13 (1), however, provides that if, on January 1, 1946, 75 per cent. of their stock or loans are invested in generating or distributing electricity in the United Kingdom, then their businesses are taken over; they have no option to carry on. Composite companies are exempted, but if any other company, not what is technically called a composite company here, comes within the 75 per cent. category, then all the assets of that company, although they have nothing whatever to do with the purpose of this Bill, which deals with the generation and distribution of electricity in the United Kingdom, must be taken over. That is obviously wrong from the point of view of the Government and the electricity Authority and the boards, and it is obviously equally unfair to the company, which may have assets abroad. I imagine that nothing could be more inconvenient to the Central Authority or the area boards than to be landed with a number of investments which consist of electrical undertakings—or it may not be an electrical undertaking at all; it might be anything; it might be a tramway or a bus company; it might, for all I know, be a trading business or an hotel or something abroad. Obviously, nothing could be more embarrassing, and what they would have to do would be to get rid of it as soon as they could.
If the company which owns this asset abroad would like to go on owning it and running it as part of its undertaking, it would be common sense as well as fair that the company should be enabled to do that. It is not only assets outside this country; there may be other assets inside Great Britain which have nothing whatever to do with the generation or distribution of electricity, or anything that is ancillary. Anything which is reasonably associated with this electrical business and ought to go with it, obviously goes over; but in a number of cases there are undertakings wholly alien which again must be embarrassing to the Authority or the board. They would certainly want to get rid of these undertakings.
Therefore, what we say is this: if there is a holding company which owns assets, which I may conveniently call extraneous assets, though I include assets which are either outside this country or inside it but which are not concerned with the purposes of the Bill—the generation and distribution of electricity—then we say that that company should be allowed to remain in being, it should part with all that it should part with to the Central Authority or the appropriate board, but it shall be allowed to retain these extraneous assets. There is the main big Amendment which follows and then there are a number of consequential Amendments. It may be that with thought even this could be simplified. There may be a simpler way of doing this, but the broad principle that we ought to find a way of doing it I do not think anybody would gainsay. A company of that kind would, of course, carry on with its undertaking as long as it wished to do so; its life would be continued.
There is also another type of company which we have to consider. I am not sure about this because I am not sure that, if the stockholder's representative is a director and the appropriate director of the company, this is so important, but I will certainly put it. A company whose assets are all taken over and which consists entirely of quoted securities is a simple proposition because all that is wanted is a mathematical sum. That obviously can be done by a liquidator and then the process of paying out on the bank plan goes on. There are a number of companies—about 140 of them—where

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you cannot proceed by a simple mathematical sum because some part or all of their assets are unquoted assets. Therefore, the Bill provides that the purchase price shall be settled by agreement or, in default of agreement, shall be assessed by arbitration, the arbitrator being given a rather odd direction. I do not know that I altogether envy him because, if I may paraphrase it in this way, he has to try to get as near as possible to what would have been quoted if there had been a quotation. It is odd, if one gets away from the ordinary test of compensation and of what a thing is worth, how difficult it is to try to substitute something else. That is the job which the arbitrator has to do. Someone has got to negotiate the agreement on behalf of this company; it has to go to arbitration if there is no agreement. My friends and I have thought that the right way to do that was to leave the board, who are after all representing the interests of the shareholders, to do that. Then, as soon as the agreement is made or the arbitrator has given his award and it is known how much money has to be paid out, the thing becomes merely a matter of liquidation and the company can go into liquidation.
I apologize for having dealt with this point at some length but I hope that I have made it plain; I think it is convenient that I should have deployed the whole position, both as regards the companies that want to have a continuing life because they have valuable assets with which they want to carry on and also, of secondary importance, those who have a temporary life because they have to get an agreement or go to arbitration about their assets. I cannot deal with either of those unless I get rid of this subsection, and therefore I beg to delete it.
Amendment moved—
Page 22, line 19, leave out subsection (11). (Viscount Swinton.)
LORD RENNELL: With your Lordships' permission, I would like to take the Amendment which stands in my name, to insert a new clause after Clause 14, at the same time as the Amendment moved by Viscount Swinton. If I deal with the first of the two main points made by Viscount Swinton, it is not to say that I do not agree with him over the second one about the directors of the company being the right persons to negotiate; but it is on the first point that I want mainly to draw
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your Lordships' attention to the difficulties that arise, and have arisen for the Government, in the policy that they have adopted. What I have to say about my Amendment for inserting a new clause after Clause 14 and the deletion of subsection (11) is really not unconnected with what is going to come up later on Clause 20 with regard to the compensation to companies, because it seems to me that all the difficulties that arise about continuing companies of the sort described by Viscount Swinton arise out of the same, as I think, mistaken policy conducted in drafting this Bill in these proposals.
The properties that are in question and that are to be taken over are to be taker. over by compensating shareholders, broadly speaking, with electricity stock. Now the companies to which Viscount Swinton has referred which own properties that are not necessary to the electricity scheme as a whole—namely, electrical properties abroad and properties which are not electrical in this country—could continue to remain in possession of them if those properties which the Bill seeks to take over were paid for, not by compensating the shareholders with electricity stock but by giving the companies themselves value for the properties taken over.
Let us take the case of the company of the type referred to by Viscount Swinton having, say, 75 per cent. of its assets the sort of assets which the Bill seeks to take over and 25 per cent. of them assess that either are not in this country (the tramway undertakings and the bus companies abroad which Viscount Swinton referred to) or assets in this country wide a are not electrical assets. All those asset, whether those that are taken over or those that are not taken over, are not the property of the shareholders; they are the property of the company. If the compensation envisaged in the Bill, instead of being payable to the shareholders and, therefore, logically requiring the dissolution of the company as is stipulated in subsection (11), were not payable to the shareholders but were payable to the companies, the companies having assets which are not taken over would automatically continue to be in existence and that would, therefore, obviate having to insert after Clause 14 the clause which I propose should come after Clause 14, which admittedly is a piece of patchwork. It would also obviate all she difficulties

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which arise in the Bill, and which will arise even more when we come to discuss Clause 20, of appointing a stockholders' representative to represent the stockholders in the place of the directors who are normally the stockholders' representatives.
In other words, the whole structure of the Bill could be simplified, and it is my submission that it should so be simplified, to alter the basis of compensation which has every form of historical precedent to support it—namely, to pay the compensation to the owners of the property and not to a third party. I know that this raises a very big issue and is obviously one that probably should not be settled by the discussion of particular Amendments even on the scale of inserting new clauses. I am also quite well aware that the Bill needs recasting not only as regards the general tenour of Clause 17 but also, much more so, as regards the general tenour of Clause 20. But I cannot help feeling that it would not only be more satisfactory from our point of view—which is obvious, because that is why I am speaking from this side on the subject—but it would also probably be much more satisfactory from the point of view of the Government, to follow the precedent which has been laid down for many generations in this country, that where the sovereign authority of the State decides to do something, the people who should be compensated for what is being done should be the owners of the property.
The noble and learned Viscount will correct me if I am wrong, but I believe that has been departed from in only one Bill hitherto—namely, the Transport Bill, or Act as it will shortly become, I have no doubt, where the railways are taken over by compensating the stockholders directly. I suppose it is on that analogy that this procedure has been followed in taking over electricity undertakings. I believe that a much better case could be made following that line on the Transport Bill than could ever be made, with all the skill and persuasiveness of the noble and learned Viscount, in the case of electricity undertakings. Your Lordships will, perhaps, forgive me if I have apparently wandered rather far from the point, which is the Amendment to delete subsection (11), but it was with the purpose of pointing out that the alternative
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to following us through the many difficult Amendments which are consequent upon the thesis put forward by the noble Viscount, Lord Swinton, is that of paying people for the properties they own instead of paying third parties.
In the reply which the noble and learned Viscount will give, I feel that it is our right and privilege to be told why the precedent (subject to the exception of the Transport Bill) is to be created here of not paying compensation to the people who are entitled to have it, and what are the strong arguments in favour of this unprecedented course which have led them into these complications, when an easier course might have been followed. 1 think that is all I need say on this matter, because it will come up again on Clause 20. I shall be very glad if the noble and learned Viscount can persuade me that the Government are in the right. I do not see offhand what the grounds are, except the one ground which I hope we shall never hear—namely, that this is a cheaper way of taking people's property away from them.
THE EARL OF LYTTON: The actual Amendment before us is to leave out subsection (11), but we are in this difficulty, that the purpose that my noble friend Lord Swinton, has in leaving out this subsection is in order to make room for a new clause, and a number of subsequent consequential Amendments in the Bill, and it is impossible to tackle this first Amendment without reference to some of the later ones, which will be consequential. But, without entering into discussion on the elaborate and complicated machinery which is involved in some of the later Amendments, or to the very important but controversial subject raised by my noble friend Lord Rennell on the principle of compensation as applied under Clause 20, may I just call your Lordships' attention to the reason for the new clause which it is proposed to insert after Clause 14, if we leave out subsection (11)?
Your Lordships will see that it has a marginal note: "Electricity holding companies having external assets." The purpose of this clause is to deal with holding companies which possess external assets which are in no way connected with the generation or distribution of electricity, whether those extraneous assets are in this country or outside this country. When this matter was being discussed

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in another place, the spokesman of the Government stated on several occasions that it was not the desire or the intention of the Government to take over anything that was entirely dissociated from the generation or distribution of electricity, but up to this moment they have not produced any Amendment which will give effect to that intention, and my noble friends are proposing these Amendments with the object of giving effect to the policy which the Government has declared it wishes to follow. May I give your Lordships an example of a holding company, one of the subsidiaries of which owns property such as flats, and that sort of thing—nothing whatever to do with the generation or distribution of electricity? Under this Bill as it stands, that company will be taken over including those assets, and then the Central Authority will be required to consult with the Minister as to how they should dispose of that property, which they do not want, and which they have no reason to lake over, and which they have no intention of retaining. What we ask your Lordships to say is that, in the case of such a company, those assets should not, in fact, be taken over, and that the company possessing them should have the right, after two months, after giving notice to the Minister of its intention, to take out of the operation of this Bill those extraneous assets, and, if that is so, there are a number of Amendments which will come on later to say how these matters shall be dealt with.
Without entering into that machinery, I do want to impress upon your Lordships the main point, which is that we should provide for electricity holding companies having assets that are wholly disconnected with electricity, either generation or distribution. The rest is a matter of machinery and other detail. The Government have shown a very reasonable attitude so far in our proceedings as regards some of the points, and I think they will also admit that noble Lords on this side of the House have been reasonable in accepting their arguments when they have put up some good case. I would, therefore, plead most strongly to the noble and learned Viscount, the Lord Chancellor, that he should either accept this Amendment as it stands, or give us an assurance that, before we part with this Bill, there will be an Amend-
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ment from the Government side to give effect to the pledges which were given in another place, but which have never yet been met. Until we can get that, I hope my noble friends, Lord Swinton and Lord Rennell, will press this Amendment.
THE LORD CHANCELLOR: I gladly join in helping any discussion on this difficult problem, and follow the excellent ample which has been set. This is a very difficult clause, and it is very difficult to isolate this proposal to leave out a relevant subsection from the Amendment to Clause 20. I agree that it is difficult to separate it from the whole basis of compensation If, as a rather experienced advocate myself, I may be allowed to pay a tribute to your Lordships, I would say that you have succeeded in a very few minutes in putting the salient points of this extremely complex facade to all these matters. I shall try to follow suit. I should like, first of all, to say a word or two about compensation under Clause 20. So far as I know, with the exception of the Transport Bill, this. is the first time that this has been done. I have not made any researches, but I do not recall another case. On the other hand, when we come to Clause 20, as I am afraid your Lordships have rather anticipated, I shall remain adamant about adhering to the scheme proposed, not because we want to get property, paying less money for it, but because I believe it is quite impossible to assess what the fair price is. I believe that what is proposed is as good a way as any; indeed, I think you will probably get nearer to the assessment of a fair price by this method than by any other.
Why do we want to take over holding companies? Your Lordships, of course, appreciate that if a holding company own as less than 75 per cent. of electricity under-takings and so on, it escapes altogether. It is only if it holds 75 per cent. or more that we take it over. Now why do we want to take over holding companies? For one very simple reason. You find that the structure that has grown up is this. You have a large number of authorized undertakers, and this very convenient device of a holding company is frequently employed to do all sorts of things. It is employed, for example, to service the undertakers, and to male arrangements for repairs; the staff of the holding company superintend the under-

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takers. If we are going to take over undertakings without taking over holding companies, we shall find ourselves landed with a whole lot of undertakings without the expert staff and skilled management necessary to run them. Therefore we say that we must take over the holding companies—assuming that they are within the description of holding more than 75 per cent.—we must take them over lock, stock and barrel. We must take over everything that they have. We must transfer to ourselves contracts of servants and other people who are with them so that we may employ their skilled staff in managing what is going to become our business.
In addition, as I have mentioned before, if you are going to accept the Stock Exchange basis—that is why I referred to Clause 20—you can only do it if you take over holding companies, because to a great extent subsidiaries are not quoted on the Stock Exchange, whereas a holding company normally is. If you are going to apply that basis—and that is a matter which we shall have to discuss when we come to Clause 20—you must take over the holding company.
Now I come to this difficulty. It is the fact that the holding company may hold up to 25 per cent. of what have conveniently been called extraneous assets. It has been said in another place, and I say it again now, that the Minister has no desire whatever to take over these extraneous assets. I am assuming that they really are extraneous, and not ancillary or anything of that sort—a block of flats, or—to quote the example given by Lord Rennell—foreign investments. We do not want them at all. But why is there nothing in the Bill at present? For this reason. If a holding company wants to get rid of those extraneous assets to some third party, it can get rid of them until the vesting date. The only prohibition on the operations of the holding company is that they must not dissipate their assets. They must not throw them away, or make improper bargains. So long as they receive a fair price for their extraneous assets, the holding company are entitled to get rid of them. We do not want them, and we have no objection whatever to the use of a device like this, for instance. In parenthesis I should say that you must be careful not
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to make a holding subsidiary for the holding company, otherwise you are done for. But there would be no objection to a company being formed consisting of shareholders or, if you like, directors of the holding company, who will declare themselves trustees for the existing shareholders. Any competent solicitor could give you half a dozen other devices in a few minutes. By all means sell these extraneous assets to some such company as that.
What will the holding company then have? They will have—I am assuming that this has been an honest bargain—instead of these extraneous assets, the money which has been paid for those assets. The only criticism that could possibly be levelled against the holding company for doing that, would be if someone were to come along and say: "I am going to make a complaint to the Tribunal; you did not get enough for the assets." If you are frightened of a complaint of that sort being made—and may I say that I can well understand people being nervous, and I myself, if concerned with a matter of this sort, would want to be sure that no one was going to have a shot at me, however remote the chance was of being hit—go to the Minister. He is willing to approve these transactions. He has no desire to make money out of this scheme at all. So long as the transaction by the holding company in disposing of their extraneous assets is fair and above board, and the assets are disposed of at their fair value, so that in place of these assets there stands in the books of the holding company the real value of the assets in the form of cash or stocks, or whatever it may be, the Minister will make no complaint.
As I say, if the holding company want to be reassured they can go to the Minister and say what they propose to do; and if the Minister is satisfied that there is no hanky-panky going on, that a fair price is being obtained and so on, he will have no objection to approving. It is not the case, as noble Lords will see, of any Amendment being required. Indeed, there can be no Amendment. The holding company are masters of the situation down to the vesting date, but when the vesting date comes, they are dead. So they can only act before the vesting date. Before that, they are the masters of their

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own assets. The only thing they have to fear is that in the future someone may say: "You have been dissipating your assets," and, as I have said, they can guard against that by getting the approval of the Minister.
VISCOUNT ELIBANK: May I be allowed to interrupt the noble and learned Viscount in order to ask this question? Would the Minister give absolution to the directors, because it is the directors who will be responsible and very much responsible under the Bill, if they do not act correctly? Would the Minister give them absolution and make their position absolutely secure?
THE LORD CHANCELLOR: I speak subject to my recollection being at fault, but: I think Clause 26 is the clause dealing with this. I must confess that I am getting rather confused between all these various Bills but I believe that to be true. I think it is there that you will find this dealt with. I think you will find it stated there that directors are completely indemnified so long as they get the approval of the Minister. That clearly should be so, because as the noble Viscount, Lord Elibank, says, they are the people who are liable if assets are dissipated and it is they who want the approval of the Minister. I think you may take it that so long as they get the approval of the Minister they have nothing to fear. That is the suggestion that I make to your Lordships. We must adhere to the Stock Exchange values, we must adhere to the proposal to take over holding companies lock, stock and barrel for the reasons that I have given. And we must adhere to the rule that the holding companies come to an end on the vesting date. But we do not want the extraneous assets. We are perfectly prepared that holding companies should between now and the vesting date distribute their extraneous assets, and if the directors are hesitant or frightened about it, let them by all means go to the Minister. The Minister wants to make no money out of this. He wants to see that a fair price is being received, and that, your Lordships will agree, is fair. He wants to see holding companies obtain a fair price.
In so far as foreign assets are concerned, we would be very willing to have nothing to do with them. If the holding companies can devise a scheme by which they can pass them to some other com-
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pany, there is no reason why that should not be done and I suggest to your Lordships that that is the right way of doing it. Therefore I cannot accept this Amendment. I hope your Lordships will agree, because this Amendment will not be acceptable in another place, and it might be better to agree with your adversary quickly when there is some hope of agreement with him, so that we can have something of practical utility here. I do the best I can. I suggest that the Amendment should not be pressed and. that your Lordships should try to work things out on the line I have indicated by the distribution of extraneous assets to some third person so that they might be dealt with hereafter.
VISCOUNT SWINTON: Would it be more convenient if we went on with this now and adjourned later?
THE LORD CHANCELLOR: I think we should adjourn now.
[The sitting was suspended at three minutes past seven o'clock and resumed at half past eight.]
THE LORD CHANCELLOR: If your Lordships are now fortified and refreshed you will be able to withstand a few further words on this topic. I am sorry the noble Viscount, Lord Elibank, is flat here, because I want particularly to answer a question which he addressed to me. He pointed out that the people who are liable to be "shot at" if anybody claims that there has been a dissipation of the assets, are the directors. That is true. That matter really arises under Clause 26, to which I referred, and Clause 29, to which I did not but should have referred. If your Lordships will look at Clause 26, it seems to me that the relevant position is at the top of page 40, where it says:
"Where, at any time after the tenth day of January, nineteen hundred and forty-seven, any such body as aforesaid"—
that includes the whole of the companies to be taken over—
"have, without the approval of the Minister"—
done various things. The third thing is:
"distributed assets other than money to their members;".
It is true that those words are defined in subsection (6), but the offence, if offence there be, is committed because those

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things have been done without the approval of the Minister.
That refers only to a distribution to members. The corresponding case, where you distribute to somebody outside—if you like, a company formed for the purpose—is dealt with in Clause 29. If your Lordships will look at the bottom of page 47, you will see the proviso, which says:
"Provided that this section shall not apply:"—
and now I read sub-paragraph (iii)—
"to any payment or other transaction … which has been approved in writing by the Minister, either generally or specially, and whether before or after the date of the payment or other transaction."
So that in either case, whether you are transferring assets to your members, or whether you are transferring assets to outsiders, the offence is that of disposing. For instance—I read from paragraph (b) on page 47—
"sold or disposed of any of its property or rights without consideration or for an inadequate consideration;".
If you get the approval of the Minister in writing, then no one can be heard to question the transaction.
I know of one case—I am not certain of my facts, and I am afraid I am a mere theorist on this; therefore I will not give the name of the company, but it is a very well-known company—where I understand the position is this. It is mainly concerned in such things as manufacture, finance, and so on. It does not itself own shares in other undertakings, but it has a wholly-owned subsidiary which does own a good many undertakers—or some undertakers, at any rate—and, in addition, owns some outside assets, particularly, in this case, foreign assets. It is a holding company which the parent company owns. Under this Bill the holding company will be taken over, but the parent company will not. That is a very easy case to deal with, because if the holding company, which possesses foreign assets, agrees with the parent company (which I understand in this case wants those foreign assets) to transfer them to the parent company in return for a fair consideration, then the assets of the holding company which will be taken over will be, not the foreign investments but, in their place, what is, ex hypothesi, a fair sum. That can be done in that way.
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In other cases, where you have not that set-up, it may be necessary to constitute a company for the purpose. I am not going to advise as to how that can be done, but I am perfectly certain it does not defeat the wit of man. There are many eminent solicitors who understand this thing—some of whom may have heard our debates to-day—who can tell you far better than I can how this can be done. I quite understand that they want a statement from me, and they will get it. The Minister will not be concerned to look upon this course with disapproval at all. So long as the holding company gets a fair price for that of which it disposes, that is all he wants. He does not want extraneous assets. He wants to guard against dissipation, and all your Lordships will agree with that. That is as far as I can go, and I hope that the assurance I have been able to give—which I have given, I need hardly say, with the authority of the Minister and his advisers—goes some way to satisfy your Lordships that we do not want to be unreasonable about this matter and we do not want to take over extraneous assets, but we only want to see that extraneous assets belonging to companies which we are taking over are not parted with unless fair consideration is given for them.
VISCOUNT SWINTON: We are all deeply indebted to the noble and learned Viscount for the interesting and clear exposition which he has made of a complicated situation and, if I may respectfully say so, of the rather difficult situation in which he finds himself. Let us see our measure of agreement here. The Lord Chancellor says that it would be quite wrong for the Government to take over what I have conveniently and compendiously called extraneous assets—assets outside this country and assets inside this country which are not concerned with the generation and distribution of electricity. The noble and learned Viscount says further that the Minister does not wish that an excessive price should be paid for those assets. In fact—correct me if I am wrong—he wants to try and deal as fairly as he can with these holding companies. But I am bound to say that the proposition so far put to us does not do very much to help them. Let us observe what it is he has told us. After all, these companies only want to continue to exist, owning and managing under-

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takings which they have bought because they thought it a wise investment on behalf of their shareholders. Those undertakings they are running very competently and some of them may be bringing in hard currency. All they ask, oddly enough, is to be left alone with those assets which nobody except themselves wants.
The noble and learned Viscount said, "I will give you a very good tip. We should agree with our adversary." I always agree with my adversary if it is a deal, but frankly I do not give something for nothing. We even got fourpence for ninepence in the old days—or was it ninepence for fourpence? The position is now reversed. just observe—and I am sure the Lord Chancellor will agree with this—what this sporting offer is which he has made. It is this. You can go and establish a new company—it is rather a labour to do this—and get your shareholders to subscribe to it; and then, with the Minister's approval, you can sell it at a fair market price—observe the expression, because that is what it is—as between a willing buyer and a willing seller; you can sell to the new corporation which you have created, and upon which you have paid extra stamp duty, at a fair market price, what already belongs to you. It is "curiouser and curiouser."
I do not want to look a gift horse unduly closely in the mouth, but that extraordinary transaction is well within the powers of any company to-day without any facilities in this Bill. Why have we to do this? Because the Lord Chancellor says the Government, the authority, must take over all the holding companies and all that is theirs—including all things they do not want—because they need their expert service. Your Lordships will remember the episode of Uriah. It was not a very agreeable one. David coveted Uriah's wife and the only way he could get Uriah's wife was to liquidate—I understand that is the right expression, legally> and otherwise—Uriah. So, as here, Uriah was liquidated, and the lady was transferred to the "central authority." It was not an agreeable transaction, not a transaction which has been held up to us, whether it be in a public school or in a Socialist Sunday school, as one to be emulated, provided at any rate
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that it can be avoided without undue inconvenience!
I think I can say to the noble and learned Viscount, the Lord Chancellor—and I am sure the Lord Chancellor is the last person to emulate David in this capacity—that I can save him from this. I would make him this proposition. He can get the equivalent of the wife, these expert persons engaged in the conduct of the undertakings. Under the Bill as it stands, he can get at a fair price the assets he wants to acquire. I am not going into Clause 20 for this purpose because I know he wants the Stock Exchange values. We shall have to debate Clause 20 presently, and adverse view s will be expressed upon it. But even the hardiest advocate of compensating shareholders in Stock Exchange values would, I think, hardly stand for this anomaly, that you should take over the whole of the undertaking, the whole of the assets of a holding company, at one comprehensive Stock Exchange value, and then compel that company, in order to retain what it desires not to part with and what the Lord Chancellor does not desire to acquire, to buy back at an excessive price.
I say "at an excessive price" because quite obviously the price at which they would have to buy back would be higher than that to which the Lord Chancellor was referring. Let me make that plain It is certainly true. He buys what is elegantly called "the whole caboodle" at the Stock Exchange value, and that contains a very large number of unquoted assets. This method is selected because it is easy, of course; also it avoids valuing those unquoted assets, the value of which in the aggregate, even on the form of valuation which we are directed to take under the Bill, may be considerably more than what is to be given for the total holding company on this Stock Exchange quotation. But observe this, further. The holding company has then to buy back its extraneous assets. At what price does it buy them back? A fair price. What do you mean by a fair price? The Lord Chancellor has told us there must not be a dissipation of assets. It is to be what a willing buyer would give to a willing seller; it is to be the same value that the Minister would give if he put up the assets to auction.
If the whole transaction were open and above board, and you had bought the whole of my undertaking at its fair value

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as between a willing buyer and a willing seller, and I had a right of pre-emption to buy parts of it back, of course I would buy my part back-but on the same terms as those on which I had parted with the whole. It would, however, have been grossly unfair to take my whole at the artificially deflated price and then force me to buy back what I ought never to have been made to part with, I will not say at an unfair price but at a higher price—namely that as between a willing buyer and a willing seller.
There is a very simple way out of this. We all want these companies to go on; we all want them to continue to hold their extraneous assets; we all want them to part with the whole of their internal electrical assets and also to part with the services of all these gentlemen who are concerned to-clay with running these subsidiary electricity companies. That is our common intention and surely we can do that without putting these wretched holding companies into liquidation and going through this curious procedure of getting a solicitor to form some new company to which the shareholders come along and subscribe. Why cannot you leave a poor tenant in possession? After all, you do not turn people out of their houses to-day; they are allowed security of tenure. Surely the poor holding company, which has done a very good job, as the Lord Chancellor has said, can be allowed to continue to have security of tenure.
What is a holding company exactly? It is a shareholder. It is a shareholder which has two things: it has a number of subsidiary electricity companies—75 per cent. or more—it also has a number of other assets, exactly as any one of us who is a shareholder in an electrical undertaking and a shareholder in something else. You take over from us our shares in electricity, you do not take over the other share investments we possess, and you pay us for our shares in electricity in accordance with the Bill. If it is quoted you pay us the quoted value of our security; if it is unquoted you pay us the value which we agree, or which is settled by arbitration, as nearly as possible on the lines as if it were quoted on the Stock Exchange.
Treat the holding company as what it is—namely, an investor, who holds certain things you wish to take over and certain things you do not wish to take
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over. Take over from this holding company investor all the electricity undertakings, and value them exactly as you lay down in the Bill that they should be valued. If they are shares in companies which are quoted on the Stock Exchange, take the Stock Exchange value. If they are companies whose shares are not quoted on the Stock Exchange, take the agreed value or the arbitration value, as is laid down in the Bill. When you come to pay, I do not even ask you to pay in cash. Pay to this investor, the holding company, as you would pay to any other investor in the land; pay him out the value of his investment, as laid down in your own Bill without a single amendment, and pay him in the way you lay down in your Bill—namely in Electricity Stock of the equivalent value at the date of issue. Then you have got all you want. You have taken over the whole of the assets which ought to be transferred to you, you have taken them over in exactly the manner and at exactly the valuation which, in your own Bill, you lay down as the right and the fair way to do, and you leave him in possession of the assets you do not want to take over.
I am advised—and I have managed to have five minutes' consultation on the only point I wanted to clear up—that so far as the transfer of this expert staff is concerned (which I quite understand you want and which we feel, subject always, of course, to people's rights, should go over to you), you will take them over and will have assigned to you the benefits of all those agreements. I am advised that it is already provided, under a clause of the Bill, that when you take over these undertakings you will take over the benefits of the contracts of service, whether they are with individual companies or with a comprehensive entity. At any rate, that could easily be the subject of arrangement. That broadly is the proposition I put to your Lordships. I should like to make quite sure that it is watertight. I think I have carried the Committee with me that it is eminently fair; I think I have carried the Committee with me that it is eminently reasonable. The great thing to do, after all, is to transfer to the Government what the Government ought to have, and to leave outside, for somebody else's possession, what they ought not to have, and what they do not want. I am advised that,

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with the skilful draftsmen that are available, this thing can be done in a simple clause, with two or three extra Amendments, with much less complexity than by the Amendments I have previously put on the Order Paper and deployed to the Committee. On those lines I think we could deal fairly, to the common advantage of all.
It is not fair to ask the Lord Chancellor for a final answer to that now, but I am sure he will give it that usual consideration which I have found he always gives to any considered proposition with which he is met, particularly as I am sure he must feel in his heart that equity moves with good sense and convenience in this matter. I do not wish to withdraw my Amendment immediately, and I would therefore propose, if my noble friends agree, that when we have discussed this a little further—I do not know whether my suggestion will find general favour, but I think it will—I will then withdraw the Amendment, if there is a clear understanding that we try to come to an accommodation on these lines. But, of course, if we should not reach such an understanding I would reserve my full right to put an Amendment down on these lines on the Report stage. We shall then have had our full debate and tested one another's minds in this matter, and I am sure we ought to he able to arrive at a rapid conclusion and an agreed, just and final conclusion.
LORD RENNELL: There are two points arising out of the speech of my noble friend, Viscount Swinton, which I think it only right that I should add. I believe that the noble and learned Viscount, the Lord Chancellor, would agree that a great deal of what he said was not likely to carry conviction so far is I am concerned. To say that a holding company with a 25 per cent. residual interest of extraneous assets can sell them and—to put a gloze on what the Lord Chancellor said—had better sell them while the going was good, through one or other device, is certainly not an argument, I am sure, that he would consider a fair or reasonable one to put forward. Anyone who sells under duress, who sells because he has to sell, before the vesting date, is not likely, in any circumstances, to get a fair price. I do not think the Lord Chancellor would
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suggest that or would put forward that argument.
The second point which I think has possibly also escaped attention—though not perhaps of the noble and learned Viscount, the Lord Chancellor, because he must be well aware of it—is this. A holding company which sells certain assets, which it is required to sell under duress, at any price it can get, will (or its shareholders will) receive in compensation Stock Exchange values for it; securities. If it sells those assets, even under duress, to a willing buyer, the Chancellor of the Exchequer will take 9s. in the £ out of what profit has been made in the difference between book value, and sale value. Can either of those two plans be considered as fair treatment for the shareholders or anyone else? Bear in mind that the price at which these extraneous assets are sold during the interval prior to the vesting date can have no possible effect on the Stock Exchange value of the security on the dates referred to in the Bill. To have put forward that plea, as the Lord Chancellor did, a justification of this method of the holding company disposing of its extraneous assets, is surely an action which on second thoughts he would not wish to press.
If some other compromise can be found on the lines which the noble Viscount, Lord Swinton, has suggested, I shall welcome it, but I could not accept any of the arguments put forward by the Lord Chancellor for proceeding along the lines of the Bill. Least of all could I accept the two justifications which I understood him to make for proceeding on those lines. One was that in abolishing the holding companies the Government wished to buy staff. My Lords, the Government can buy generating plant and buy a share, but I have yet to learn that this or any other Government can buy staff in that way. The second justification was that there was no other method of valuing the assets of holding companies. That is surely art exaggeration. The underlying assets of holding companies can be and have been valued, not only in this country but in America, on countless occasions. The real assets underlying in the form of plant have been valued, and the value of a running concern can be assessed. Indeed, it has been assessed, or an attempt has; been made to assess it, in the Coal Act as the maintainable revenue of a coal mine.

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The underlying assets of a holding company cannot be valued in accordance with the value of holding company shares in Stock Exchange prices. That is manifestly not in accordance with practice or experience.
9.1 p.m.
THE EARL OF SELBORNE: I rise not only to support what my noble friends have said but to protest against the transparent inequity of the plan explained to your Lordships by the noble and learned Viscount, the Lord Chancellor, just before the adjournment. In the first place, it is clearly very arbitrary to take these figures of 75 per cent. and 25 per cent. If the difference of treatment is as big as it is in this Bill, then it must be very inequitable to those companies who are just on one side or the other of the border line. And that to my mind is in itself an important consideration and an important criticism of the Government's plan.
In the second place, just consider how the plan that the noble and learned Viscount explained to us would work. He boldly faced the dilemma in which the directors would be placed, as to whether or not they are getting a fair price for the extraneous assets which they wished to dispose of, and which indeed he invited them to dispose of. If they sell to an outside body, as the noble Lord, Lord Rennell, has pointed out, they are not likely to get a fair price. With the Sword of Damocles hanging over their heads, and everybody knowing that they have to settle before the vesting date, they would not be likely to get a fair price. But the Lord Chancellor practically invited them to engage a clever City solicitor who would show them the way by which a new company could be formed, consisting of their own shareholders, or some other such device. I assume that that is the plan which most holding companies would prefer in such circumstances. They are faced with the dilemma which the noble and learned Viscount also faced—they have to charge their own shareholders a price which the Minister will regard as fair when he comes to take over the holding company and the Lord Chancellor's solution was to invite directors to submit that price to the Minister himself.
I ask your Lordships to visualize what would happen. There must be a
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number of companies in such a position. Every one has its own extraneous assets with their own complications. There are difficulties in each case about the valuing of the assets, and the companies would be queueing up in front of the Minister who has to give them a decision. We all know what it is when we have to write to a Government Department or approach it on a difficult matter. We do not expect an answer in a short time. All that time the company would be kept on tenterhooks waiting for a decision, and I venture to suggest that the directors would not get a decision until the eleventh hour. That obviously would put them in a very awkward position.
Consider another aspect. Let us say that the price agreed by the Ministry was £100,000. The shareholders would be invited to find £100,000 of new money to buy their own property in a new company; they would pay that £100,000 over to the holding company, and ultimately, when the settlement came, they would be given 100,000 of Government securities in exchange—Government securities which might well be unsaleable at that moment! That, to my mind, is a most inequitable way of treating shareholders whereas the plan proposed by my noble friend Viscount Swinton is not only clearly equitable but also clearly feasible, where you buy one asset and do not buy the other. That, one would imagine, was common sense. I hope very much that the Government will reconsider their plan, because it is not only extremely elaborate but it seems to me that it is bound to act with the greatest inequity in cases where it is applied.
THE EARL OF LYTTON: I do not know whether the Committee are clear as to where we stand on this matter. I do not feel quite clear in my own mind, and I would like, if possible, to try and clear the position. My noble friend Viscount Swinton said that he was reluctant to look a gift horse in the mouth. So am I. But I am not sure whether it was a gift horse which the noble and learned Viscount, the Lord Chancellor, offered to us. I may be mistaken, but I want to clear the matter up. I am a holding company with extraneous assets. The Lord Chancellor tells me that he does not want those assets. So I say to him: "May I keep them?" Then I understand him to say: "No, but

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you may sell them." But, having sold them, the money I receive for them will then pass under this Bill to the new authority. In other words, I may sell my assets; but I must not keep the money I get for them.
THE LORD CHANCELLOR: The noble Earl will forgive me. You cannot keep both the assets and the money.
THE EARL OF LYTTON: No. I do not want to. I ask to keep my assets. The Lord Chancellor says: "No, but you may sell them, and having sold them you must give me the money which you receive for them." I say: "Thank you for nothing." It is useless to labour the fact that the Minister is sure to give his consent. He will certainly give his consent. All the Lord Chancellor is offering to me is that I may save the Minister the trouble of taking the assets over and selling them himself by selling them in advance. If that is what is proposed, I do not feel that he has really made a very great concession to us. I may be wrong——
THE LORD CHANCELLOR: It is possible.
THE EARL OF LYTTON: —and the noble and learned Viscount will correct me if I am. However, that is what I understood him to say. Now the noble Viscount comes along with another proposal, and before I can say whether that is acceptable to me I would like to clear my mind about it. The noble Viscount said that we are all agreed that the holding company should go on in respect of their extraneous non-electrical assets. If that is so, I am satisfied. But I thought that was not the view of the Government, and that they were not anxious that they should go on. They say: "On the contrary, we are going to take over the holding company lock, stock and barrel, with all its assets, whether they are electrical Or not."
VISCOUNT SWINTON: They would like them to go on if they could see a way free to do it.
THE EARL OF LYTTON: I hope that is so. I hope they would like them to go on, and I hope the noble and learned Viscount will offer them a way by which it can be done. In that event, I shall be glad to support his alternative procedure. I have supported the Amendment of my
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noble friend Lord Rennell in the belief that it would have the effect which I desire—namely, that the holding companies should continue to hold assets which tie Government do not want. If the Government are willing to accept that Amendment—and my noble friend Viscount Swinton has an alternative way of doing it—I shall be very glad. But I would ask my noble friend to be sure that he is right in thinking that the Government want the same thing as we want, and that we shall get it by his alternative form of words. It is, of course, a little difficult to take in, without a draft Amendment before one, exactly what is proposed, but if the noble and learned Viscount understands what it is that the holding companies desire—and I believe he wants to achieve the same end—if he will put on the Paper an Amendment which will carry out that purpose then we shall be only too glad to accept it.
THE LORD CHANCELLOR: May I just answer the last observations? If tie noble Earl reads to-morrow what he has just said, I think he will see that he has not really appreciated the position as I see it at all. We are looking at the thing from completely different points of view. You may or may not think that the Stock Exchange method is a fair one—for the moment I am assuming it is. On that hypothesis, the Stock Exchange value which you would give is the value of tie assets of the holding company, the assets of the holding company of both electricity and extraneous assets. Therefore, tie shareholders are paid for the value of the extraneous assets by getting the Stock Exchange value. They are assets which tend to swell the total value of the company.
Now that that is plain, my proposition is this. I am not concerned with whether or not they sell these assets, but if anybody does want to sell these assets I am ready to facilitate that in any way I can. If they do not want to sell them there is no question of sale under duress. If tiny want to sell them, they are perfectly free without going within a hundred miles of the Minister. But if they do they run the risk of somebody saying hereafter, "You sold at an under-value." Therefore, to try and meet that point I say that if you want to go to the Minister, the Minister is perfectly prepared to approve the transaction if he thinks it is a fair transaction; and that relieves you of your

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worries. Do not trouble to go to him unless you want to; but do realize that if you do not somebody may say it is not enough. I think that is perfectly fair.
I have made it plain that from the Government's point of view they must take over the holding company altogether. You cannot take over a bit of the holding company, even although it is a large bit, because you cannot apply the Stock Exchange value at all; and neither can you bring about an assignment by operation of law which results from the taking over the whole of the holding company, all its contracts and everything else. That is the point I put, and I do venture to think, with the very greatest respect, that the noble Earl—for whose judgment I have the most profound regard—will see that by the remarks he made just now he has rather made light of the considerations which I have advanced. He will see also that I am not trying to do anything in the way he suggested, and it is not right to say that the Minister would automatically give his consent. By no means would he automatically give his consent, because obviously if these foreign assets were being sold for an old song, then the Minister would have to pay the Stock Exchange value for those assets. The Minister would want to see that the price which was being obtained was a fair price.
I would add this. I myself think that one of the methods he would adopt in seeing whether it was a fair price would be this. It might he, of course, shares in some foreign company which are quoted, and you would know what the value of those assets were. More probably they would not be quoted, in which case I should imagine that he would look at the revenue of the holding company and see, for example, that one-tenth of its revenue came from foreign investments. Then he would say: "What price am I to give for the holding company? £x therefore it is fair to give one-tenth of £x for the foreign investments." But to ensure that there can be no misunderstanding about where I stand I would only Say that I am anxious to do what I can. I need hardly say that any Amendments which are put down I will always consider, but I must not in any sense be taken as committed, and I must not be thought to have gone further than in fact I have gone in my explanation of the Government's point of view.
LORD RENNELL: I should like to clarify one point. Let us take the example of a holding company that has a Stock Exchange quotation of the value of its shares at (say) 25 per cent. of its assets; and extraneous assets to that value are then sold. Let us assume that the 25 per cent. is sold for cash at any time between to-day and the vesting day. The holding company receives the cash for those investments. How much more British Electricity Stock will shareholders get by reason of those assets having been sold between now and vesting day, as compared with what the shareholders would have received in British Electricity Stock had this portion of extraneous assets not been sold?
THE LORD CHANCELLOR: Of course, they get nothing. The assumption is that they have been sold for a fair value. If they have been sold for a fair value the assets of the holding company now, instead of being British Electricity Stock and foreign investment, are British Electricity stock and cash representing this portion of the investment sold; and if the cash fairly represents the foreign investment it should make no difference to the shareholders. You cannot say there is a Stock Exchange valuation attributable to that 25 per cent. There is not. The only Stock Exchange valuation is attributable to the whole thing. You cannot allocate a particular part of a Stock Exchange valuation—say £x—to particular assets, and so long as they are sold at a fair valuation, whether they fetch £2x or £½x does not matter.
THE EARL OF SELBORNE: Would it be fair if they were sold at the valuation at which they stand in the books of the company?
THE LORD CHANCELLOR: Not necessarily.
VISCOUNT SWINTON: The interchange which has just taken place has made it abundantly plain that whether it be fair to take Stock Exchange value or not, one thing is grossly unfair; and that is that the Minister should pay Stock Exchange values when it suits his purpose, but that the wretched holding company which wishes to hang on to its shares, and has to buy them, should not be allowed to buy a quota on the Stock Exchange value but should have to buy

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for what is called "a fair price as between a willing buyer and a willing seller." I am not going into that point again but it does show, at any rate that the proposal I have put to the Committee saves the Minister from putting himself in the grossly unjust position that he exacts the highest possible price for something he does not want by forcibly taking it from an unwilling seller and then merely remunerating that gentleman.
I shall leave it at that. All that I have said may be studied, and I know the Lord Chancellor will study it because he did not follow it altogether, but he will when he reads it in Hansard to-morrow. I have not departed in a single sentence from the measure of assessment and value laid down in the Bill. You will buy what you require to buy at what you yourself, in the Bill, have said is a fair price to pay, whether it be a quoted or whether it be an unquoted asset. I think that is a much better form of transaction than the very complicated one which we, whilst we proceed by trial and error, have put on the paper. I propose to do this: I propose to withdraw the formal Amendment to delete subsection (11) which we are now discussing. I would then suggest to my noble friends who have been associated with me in this matter that we should take out, as we proceed through the Order Paper, all those innumerable Amendments which fall consequent upon this, but that we reserve our full right to put down and certainly to propose on Report an Amendment on the lines which I indicated in my opening speech. With those words, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14., as amended, agreed to.
Clause 15 [Provisions as to undertakings of local authorities]:
LORD CHORLEY: This is substantially a drafting Amendment. I beg to move.
Amendment moved—
Page 24, line 7, after ("undertakers") insert ("or whether any property is or was (for the purposes of the last foregoing subsection) held or used partly in the said capacity and partly in other capacities").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This again is purely a drafting Amendment. I beg to move.
Amendment moved—
Page 25, line 21, leave out ("which") and insert ("whom").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 15, as amended, agreed to.
Clause 16:
Right of pre-emption for local authorities in respect of land vested in an Electricity Board.
16.—(1) Where any land of a local authority vests by virtue of this Act in an Electricity Board, the local authority shall, for a period of ten years from the date of the vesting of the land, have the right of pre-emption conferred by the subsequent provisions of this section.
9.24 p.m.
LORD HAWKE LORD HAWKE had given notice to move in subsection (1) after "authority" where that word first occurs, to insert "or of a composite company or of a company to which section of this Act applies." The noble Lord said: With your Lordships' permission, I will speak to all the Amendments to this clause which stand in my name, they all being consequential on the first. As the Bill stands, if any land belonging to a local authority passes to the Electricity Board as a consequence of this Bill, and the Electricity Board does not require it, the local authority has an option for ten years on the first refusal to buy that piece of land. In my Amendment, I seek to extend that option to composite companies and also such holding companies as may be allowed to continue in existence as a result of the Amendments which we have put down to the Bill. In another place, an Amendment was moved on Report to deal with this question of composite companies, and the Solicitor-General gave an assurance that he would accept the principle, but in practice I cannot find that he has implemented that promise in any way. It seems perfectly fair that if the company has parted with the land to somebody who does no: want it——
LORD CHORLEY: If it would assist my noble friend, I would point out that it is in fact implemented in the Amendment to Clause 17.
LORD HAWKE: I apologize to the Committee for wasting their time. I should have noticed that, and I will not move my Amendment.
Clause 16 agreed to.
Clause 17:
Composite companies.
(4) Subsections (2) and (4) of section fifteen of this Act shall apply to a composite company in like manner as they apply to a local authority, subject to the modification that for references to the Minister of Health there shall be substituted references to the Minister.
(5) Regulations may make provision—

(a) for the apportionment of, and the making of financial adjustments with respect to, any liabilities incurred by a composite company partly in their capacity as authorised undertakers and partly in other capacities, and for any necessary variation of mortgages and incumbrances relating to such liabilities; and

(b) for the apportionment of cash and investments held by a composite company partly in their capacity aforesaid and partly in other capacities.

LORD CHORLEY LORD CHORLEY moved at the end of subsection (4) to insert "and the last foregoing section shall also apply to a composite company in like manner as it applies to a local authority." The noble Lord said: This is the Amendment to which I referred a moment ago and, as I pointed out to the noble Lord, Lord Hawke, it implements the promise that was given in another place. But, of course, it only goes so far as the composite companies. The noble Lord's Amendment covered not only composite companies, but also any holding company that would be left as a result of the negotiations and discussions which will proceed. To that extent it meets the noble Lord's object, and I am sure he and the Committee will be willing to receive it. I beg to move.
Amendment moved—
Page 27, line 13, at end insert the said words.—(Lord Chorley.)
LORD HAWKE: I take it that the noble Lord will insert suitable words to include any holding company that is allowed to continue as the result of any change of mind the Lord Chancellor may have?
LORD CHORLEY: Yes. In so far as a holding company exists, obviously it would be right and proper that the same rights of pre-emption should be extended to it as are extended to the composite companies.
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved after subsection (4) to insert:
"(5) No part of the cash and investments of a composite company shall vest in an
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Electricity Board under Section fourteen of this Act, and the last two foregoing subsections shall accordingly not apply thereto, but regulations shall, subject to the provisions of this Part of this Act with respect to the final payment of dividends and interest, provide for the apportionment, as between the Board and the company, of the whole of the cash and investments of the company, together with any income accruing thereon pending such apportionment, in such shares as may be agreed between them or, in default of such agreement, determined in accordance with the regulations.
Any references in the following provisions of this Act to property which vests by virtue of this Act shall include a reference to property apportioned to an Electricity Board under this subsection."
The noble Lord said: There are other Amendments consequent upon this Amendment, and also Amendments to Clause 27 which are dependent upon it. It is rather complicated, and I hope to take it as shortly as possible. The clause to which it is an Amendment provides machinery for the vesting of cash and investments of a composite company, and also for the provision of funds for paying dividends after the vesting date—what is referred to as the final dividend. The arrangements contained in the clause as it stands have been found to be not altogether satisfactory, and the new subsection has been tabled in order to provide an improvement.
The scheme under this proposal will deal with the position, so to speak, in four stages. First of all, no part of the cash and investments is to vest automatically, but all is to be apportioned, subject to the provision for final dividends, between the board and the company in accordance with the regulations. Secondly, the net revenue of the company for the final financial period is to be ascertained and certified by an auditor appointed by the Minister. It is in that regard that an Amendment to Clause 27, at page 25, lines 13 to 16, will be moved. Thirdly, the amount required for final dividends is to be ascertained and certified by that auditor (that is where the second Amendment to Clause 27 will come in). Finally, only to the extent that the net revenue exceeds the amount of the third item—that is the amount required for the final dividends—will it come within the apportionment to which I referred at the beginning. So the net effect will be to allow the company for the time being

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to keep all cash and investments at the vesting date, to deduct from them the final dividends and then to apportion the remainder. I beg to move.
Amendment moved—
Page 27, line 13, at end insert the said subsection.—(Lord Chorley.)
VISCOUNT ELIBANK: I would like to ask the noble Lord this question, which I think is a very important question. How are these assets to be apportioned? To what regulations does the noble Lord refer? If they are not regulations that have been made, how are they to be made, and upon what lines? I think we ought to be told how the apportionment is to be made and what is to be the basis of the apportionment. The noble Lord has not told us that.
LORD CHORLEY: That will be provided for in the regulations which will be issued by the Minister. Obviously, the object will be to achieve an equitable method of apportionment of this type of assets between the two interests involved. If the noble Viscount expects me to give him a draft of the Amendments, I am afraid that I am not in a position to do that. I do not suppose that the Amendments have actually got to the stage of being drafted yet.
THE LORD CHANCELLOR: May I see if I can help here? Any items which are earmarked, either for the electricity undertaking or for the non-electricity undertaking, will go accordingly. If they are not earmarked and you do not know which pertains to which, they will go, I should say, on the basis of a comparison of the value of the electricity undertaking and the extraneous undertakings. They will be allocated in that proportion.
VISCOUNT ELIBANK: I understand that there is still a difficulty. We might have composite companies in which the electricity and gas interests are operated together to a large extent, or the organization which controls them may be one and the same. It is not always easy to see how you are to decide how much you will apportion to one or the other.
THE LORD CHANCELLOR: It is not easy but I think that that is the way we should try to do it.
On Question, Amendment agreed to.
LORD CHORLEY: This is preparatory to the next Amendment. I beg to move.
Amendment moved—
Page 27, leave out lines 21 to 24.—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, at the end of the clause to insert:
"(8) References in the following provisions of this Act, except Section twenty-six thereof, to bodies to whom this Part of this Act applies (not being references which expressly exclude composite companies) shall be construed, in relation to a composite company, as referring to that company in their capacity as authorised undertakers."
The noble Lord said: This is a complementary Amendment designed to bring the composite company into relation with the local authority. It does not apply to Clause 26 because securities being common to all the authorities of a composite company the control of dividends can only be exercised in respect of the company as a whole. I beg to move.
Amendment moved—
Page 27, line 41, at end insert the said sub-section.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clauses 18 and 19 agreed to.
Clause 20:
Compensation to holders of securities of bodies other than local authorities.
(7) For the purposes of this section, the value of any securities of any such body, not being securities to which subsection (2), (3), (4)or (5) of this section applies, shall he such value as may be agreed between the Minister and the said stockholders' representative or, in default of such agreement, as may be determined by arbitration under this Act, and the arbitration tribunal, in determining the value of those securities shall have regard, as far as may be, to the value of securities to which subsection (2) of this section applies (as determined under that subsection), being securities which, as respects all matters affecting their value, are most nearly comparable to the first named securities, and if, in relation to any class of securities to which this subsection applies, such a fresh issue or conversion of securities as is mentioned in subsection (3) or subsection (4) of this section his occurred, the arbitration tribunal shall also have regard, as far as may be, to the manner in which the value of securities is. to be determined in case s to which the said subsection (3) or subsection (4) applies.
The LORD CHANCELLOR: This Amendment is one of the least controversial in this Bill. I beg to move.
Amendment moved—
Page 30, line 19, leave out ("which") and insert ("whom").—(The Lord Chancellor.)
On Question, Amendment agreed to.
On Question, Whether Clause 20 as amended shall stand part of the Bill?
VISCOUNT ELIBANK: Before the clause passes, I would like to ask the noble and learned Viscount whether he would explain subsection (7), which refers to the valuation to be applied to securities which are taken over independently from the holding companies who do not surrender the whole of their rights. It says that these shall be most nearly comparable to securities which are quoted: Suppose that it is not possible to decide what the comparable value should be; on what basis are these securities to be taken over: It is true that an arbitration is provided in the event of the company not being satisfied, but that is not how these securities are to be taken over. It is left absolutely in the air, and it is of considerable concern to holding companies who will not come within the 75 per cent. quotation and will dispose of electricity subsidiaries upon the basis of this particular subsection.
THE LORD CHANCELLOR: The noble Viscount has raised a very difficult question. It is easy enough to answer him, but it is difficult for the Arbitration Tribunal to find the answer. The answer to him is that it is for the Arbitration Tribunal to settle. The Tribunal would have the advantage of hearing the arguments by learned counsel on both sides, which would probably occupy several ways, and the Tribunal would deliberate at great length and come to a result which may or may not afford satisfaction for both parties. They will then have to do the best they can. I cannot say more than that.
VISCOUNT ELIBANK: Who will pay the costs—the companies?
THE LORD CHANCELLOR: I presume each side will pay their own.
VISCOUNT ELIBANK: Might I suggest that the McGowan Report made certain suggestions on which this sort of company should be taken over and would ask,
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in the light of the alarming prospect the noble and learned Viscount has held forth as to arbitration, and to the enormous fees which will be paid by the companies to learned counsel, whether he will look into this question a little more closely and give us something on Report stage.
THE LORD CHANCELLOR: The stockholders' representatives can argue their case, but if argued by counsel the costs are paid by the Central Authority.
VISCOUNT ELIBANK: I do not think that answers the point I have put forward.
THE LORD CHANCELLOR: I think it does.
On Question, Clause 20, as amended, agreed to.
LORD RENNELL LORD RENNELL moved, after Clause 20 to insert the following new clause:
Adjustment of compensation to holders of securities of bodies other than local authorities.
".—(1) If it shall be proved to the arbitration tribunal by the Minister or by any body to which this Part of this Act applies being a body in respect of whose securities compensation is payable under the provisions of the last foregoing section that the aggregate of the values of such securities ascertained in accordance with the provisions of the last foregoing section (which values as so ascertained are in this section referred to as 'Stock Exchange Values') is less or greater than the amount which the property, rights, liabilities and obligations of that body might have been expected to realise if this Act had not been passed and if they had been sold as a going concern on the vesting date in the open market by a willing seller to a willing buyer, the difference (in this section referred to as 'difference in value') shall be deducted from or added to the Stock Exchange Values of the securities of that body in the manner mentioned in subsection (3) of this section and the values of those securities shall be treated as less than the Stock Exchange Values by the amount of the difference in value or the difference in value shall be treated as part of the values of those securities, as the case may be, in determining the compensation to be paid to the holders of such securities.
(2) If the Minister or any body shall desire to offer proof of the matters set forth in the last foregoing subsection and shall, not less than twenty-eight days before the vesting date, serve on the body or on the Minister, as the case may be, a notice of such his or their desire, the question whether there is any, and if so what, difference in value shall be determined by arbitration under this Act, and where such a notice is so served the provisions of subsection (11) of section fourteen of this Act shall not apply to such a body.
in any arbitration held under the provisions of this subsection the arbitration tribunal shall determine all questions in dispute between the parties in relation to the value of any of the securities of the body in question.
(3) Any difference in value determined under the provisions of the last foregoing subsection shall be deducted from or added to the Stock Exchange Values of the securities of the body concerned or of any class or classes of those securities in such manner as shall be settled by a scheme assented to by such majorities of the members of each of the classes as are prescribed by subsection (2) of section one hundred and fifty-three of the Companies Act, 1929, or, in default of such assent, approved by a tribunal to be established by regulations and in such settlement due regard shall he had on the one hand to what the relative expectations of income yield front the several classes of securities would have been if this Act had not been passed and on the other hand to the rights of priority conferred on such classes respectively by the statutory provisions and other documents relating thereto:
Provided that where the beneficial interest in any securities of the body concerned was held immediately before the vesting date by another body to whom this Part of this Act applies (hereinafter referred to as 'the holding company') and for that reason no compensation is payable in respect of those securities, any deduction made from the Stock Exchange Values of those securities shall be deemed not to form part of the property and rights of the holding company at the vesting date and the said property and rights shall be deemed to be diminished thereby and any addition made to the Stock Exchange Values of those securities shall be deemed to form part of the property and rights of the holding company at the vesting date in addition to any other property and rights belonging to them."
The noble Lord said: This new clause refers to the question of compensation, which has already been touched upon in Clause 14 and in other places, but in another context. In moving this additional clause we are facing the direct issue of compensation without any extraneous matters which were the subject of the debate on Clause 14. The noble and learned Viscount, the Lord Chancellor, stated in his replies on Clause 14, as I am sure is correct, that with the exception of the compensation clauses in the Transport Bill so far as railway stockholders were concerned, this is the first time in our history in which His Majesty's Government propose to compensate, not the proprietors of a property, but somebody else, for the confiscation of that property. We certainly live in strange times, and no doubt from time to time new precedents have been created. Put may I remind your Lordships that in the
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taking over of no other property hitherto has this procedure been followed.
In order to carry this through, the principle of a Stock Exchange valuation has been adopted. The noble and learned Viscount says that is because no other valuation is possible. I find it difficult to believe that the Lord Chancellor will continue to sustain the argument that no method of valuing public utility undertakings other than by their Stock Exchange values is possible. He has only to look at what has been constant practice in the United States of America, both before and after the New Deal, in dealing with holding companies and public utility undertakings, and he will see that the practice of valuing public utility under-takings on other than a Stock Exchange valuation has been adopted there, as it has been frequently adopted in this country in the course of the last two generations. I need only refer the noble and learned Viscount to the valuations made of certain properties belonging to what has now become the Port of London Authority, the National Telephone Company and the London Passenger Transport Board, where the properties were valued, so far as I know, as running concerns. If they were valued as running concerns, and the earning capacity was assessed, can there be any justification for saying that that cannot be done in the case of electricity companies? If there is justification for saying that, hope the noble and learned Viscount will enlighten us upon it.
My second point is that the basis which has been taken as the valuation is the Stock Exchange values. I think there are two reasons for that, if I may take them out of the mouth of the spokesman of His Majesty's Government—though perhaps he would not put them in quite the way I shall. The first of the two reasons is that it is the easiest and idlest method of doing it. It certainly takes less time, and is far less trouble, if it can be justified. I shall hope to show that it cannot be justified. The second reason is that by taking the Stock Exchange values of these properties, they will be confiscated at a cheaper and lower rate, for the very simple reason that by and. large Stock Exchange values are based on the ordinary capacity of the securities involved; and the ordinary capacity of the securities involved, especially of the

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equity securities, is the function of what is distributed and not what is earned. It may be the function of both, but it is more usually the function of what it is distributed.
In your Lordships' House I need hardly take the very simple example of a company which earns 10 per cent., and pays 5 per cent. The valuation of its shares on the Stock Exchange will, by and large, be based on the 5 per cent, distribution and not on the 10 per cent. earnings. The balance of those 10 per cent. earnings which will have been ploughed back, and are likely to go on being ploughed back if the company is left alone, will inure to the shareholders hereafter. This future benefit is neglected in a Stock Exchange valuation or is at any rate to a large extent neglected. I do not want to exaggerate that point. If the noble and learned Viscount will consider the yields on current securities of all sorts, including electricity securities before the critical dates, he will find that by and large the values are based on dividend yields and not on earnings. There are a few exceptions, but they are very few. In other words, the valuation which has been proposed is one based on a distribution of only a small or conservative part of the earnings of the company, and not on the whole earning capacity.
The Amendment which is before your Lordships is to provide the alternative of taking Stock Exchange valuations or a valuation based upon arbitration on the claim of either party and not of one party only—the Minister can claim, and the company can claim. That seems to me a fair and equitable basis. I do not feel that it is one which is likely to be accepted by the Government, but I would like them to feel that if they persist in insisting on a Stock Exchange valuation they will, so far as I am concerned—and I believe I have the support of a number of noble Lords on this side of the House—be doing something which we believe to be unjust, which cannot be defended except for the reasons I have adduced, and which cannot be justified on the grounds of public necessity because there is no other alternative method. I beg to move.
Amendment moved—
After Clause 20 insert the said new clause.—(Lord Rennell.)
THE EARL OF LYTTON: Before the noble and learned Viscount replies I would like to add a word in support of my noble friend Lord Rennell. I will not take the argument which he has already developed. As he has pointed out, the Bill, proceeding on the basis of compensation on Stock Exchange values, is making a departure from precedent in all our previous legislation. In fact, the word "compensation" in this Bill is a misnomer. What the Government are doing is acquiring property and paying for shares. As the noble Lord, Lord Rennell, has pointed out, it is not buying shares but buying property, and the argument throughout the Government speeches that Stock Exchange value represents the full market value of the undertaking is a complete illusion. However, as the Lord Chancellor has already told us that he cannot depart from that basis I want to confine myself to pointing out to him that even on that basis there may be injustices which I am sure he would not wish to inflict, owing to the date chosen for a particular valuation. There are companies which had large additional business during the war and whose capacity was consequently increased, and the market value of those companies' shares may have been in no way diminished. On the other hand there were other companies who during the war suffered very considerable damage, who have at times suffered a loss of revenue, had to raid their sinking funds, had to reduce their dividends, and were only able to make good in the last year of the war, and who are now going to be paid out on the Stock Exchange value at a time when their war losses were still affecting their prices. That, I maintain, is an injustice, and I am sure the Government do not wish to do an injustice if it can be avoided.
But I quite understand that you cannot legislate for particular hard cases which may arise, and so I want to suggest to the Government that they should at any rate be willing, even if they will not depart from the Stock Exchange value, to agree to a company having the right to lay its case before an arbitrator if it can prove that the date selected for the valuation on which compensation is to be paid will work hardly against it; and in the same way that it should be open to the Minister to represent that Stock

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Exchange value may represent more than the fair market value of the undertaking and go to an arbitrator on the same point. There are such cases. Whilst I accept the arguments of the noble Lord, Lord Rennell, and support the Amendment he has put down, I would ask the noble and learned Viscount, the Lord Chancellor, to consider the matter I have mentioned and see how far he can meet us on such a point.
THE LORD CHANCELLOR: This Bill, unlike the Town and Country Planning Bill, was not subject to any kind of guillotine in another place. It was very fully considered, and therefore we find ourselves inevitably in the position that all the big matters raised here were discussed in the other place. We cannot help it. All these battle-grounds are well marked with previous victims, and battles have been won and lost on this particular matter. These points were discussed at great length in the other place, as your Lordships well know. Therefore you will not be surprised to hear that I have nothing to give at all on this matter. It seems to us that this system is fair, and I am surprised at this challenge. In the Town and Country Planning Bill I was asked, in considering development values, to consider the case of people who had paid Death Duties, and whether it was not right and fair and appropriate to take the Death Duties as the development value. What happens here? If any of these shareholders dies, possessing these shares, on what would he pay Death Duty? On the Stock Exchange value. Are your Lordships really saying that all estates that have been wound up, say in the last twenty years, must be reopened and the unfortunate people have to pay more?
THE MARQUESS OF SALISBURY: The argument there surely was that the Government were being even more unfair and were not paying Stock Exchange value. They took a global figure of £300,000,000 and divided that sum as best they could. The position in the Town and Country Planning Bill was even worse than this, but that does not make this fair.
THE LORD CHANCELLOR: I agree. But the goal held out to me, the star which I had to follow, was the figure taken for Death Duties. At what price did these shareholders buy their shares?
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Unless they were original shareholders, they bought them at Stock Exchange values. If any of the shareholders had wanted to sell his shares, he would have got Stock Exchange value. What on earth is the injustice of giving him Stock Exchange value? Lord Rennell knows more about these things than I do; 1 ant a child in these matters, but I had the great advantage of learning something about them for very many years from eminent people such as Lord Plender and Sir William McLintock and others, used to preach to me when I was almost a boy that it was just as much to the interest of shareholders to put money to reserve as to distribute it. Am I to be told that eminent people in the City of London do not know that?
It is not as if these shares had been dealt with by people who know nothing about these matters, such as country parsons. These shares are held by very experienced people in the City of London—people who know how to read a balance sheet, who understand the elementary Let that money put on one side and ploughed back into the company is just as valuable to the shareholders as money distributed in dividends. Am I really to be told by the noble Lord that those who invest in these shares are such simpletons that they regard it only as a very substantial fall in the amount of dividend that is paid, and have no regard whatever to the amount that is going back into the company?
THE EARL OF SELBORNE: The only objection I have is that the shareholder who is allowed to continue in the enjoyment of his share is in a different position from the shareholder who is having his property removed from him. The two circumstances are not comparable, as the noble and learned Viscount knows.
THE LORD CHANCELLOR: Investment trusts and insurance companies hold these shares. Am I really to be told—a statement which I cannot follow although I am ignorant about this—that these eminent people from the City of London, who understand all about trading and finance, are such simpletons that all they look at is the amount of dividend paid, and have not the slightest regard to the elementary fact of what a company puts back into its own business' I do not believe it. I see no injustice, whatever in giving these people that which they would have got had they

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required to sell these shares or that on which they would have had to pay duty when the day comes when they will have to depart this wicked world. It is on that that they will pay Death Duties. Is it so unfair that the test which you take as being a fair test for Death Duties should be taken as the value of these shares? It is the value which we pay. It may be that in some cases we pay too much; it may be that in some cases we pay too little, but what is the alternative?
I never said that it is impossible to attempt to value a public utility on the basis of net maintainable revenue. I have attempted to do it myself many times. But in this particular case, the problem is so exceedingly difficult that it is not like a simple elementary sum in mathematics. It I ask two mathematicians to do the same sum, they may, if they are good enough, certainly arrive at the same answer. In this case, no two people would arrive at the same answer if they tried to do it on the basis of net maintainable revenue. I venture to say that, if you had three people, all eminent and all highly qualified, trying to arrive at a valuation on that basis, their valuations would be radically different. Probably what they would do would be to add the three figures together, divide by three and arrive at the average.
Why is it so very very difficult in this case? It is very very difficult in this case because of the franchise, and it is very difficult in this case too because I think it is legitimate to consider the recommendations of the McGowan Report. In the case of power companies that Committee recommended that there should be an effective sliding scale. If we had not introduced this legislation, and if we simply had legislation on the lines of the McGowan Report, is it not quite certain that no one would have claimed compensation on the basis of this stipulation for an existing sliding scale?
There are those difficulties, and I do maintain that it is impossible to arrive with any scientific precision at what the figure ought to be on the basis of net maintainable revenue. That being so, we adopted the Stock Exchange value. I believe the Stock Exchange value to be fair and reasonable. It may err one way or the other, but I do not think it is any
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more likely to err one way or the other than is the other figure. It is certainly simpler and much easier to arrive at, but it is not merely because we are lazy that we are desirous of accepting it. If we were satisfied that there was some alternative method which would enable us to arrive with precise accuracy by scientific means at a figure we would gladly adopt that other method, even though it might be more costly, and more laborious. It is because we believe in this particular case, having regard to the franchise difficulties and the like, that you cannot possibly arrive at any precise figure, that we claim we are doing no injustice by taking the Stock Exchange figure.
With regard to what the noble Earl, Lord Lytton, said, although I do not know anything about the market in regard to these shares, and I do not know the particular significance of the date we have taken, I do know that we have endeavoured to select alternative dates, the one, I think, before and the other after nationalization was announced. We endeavoured to select those two alternative dates so that the holders might get whichever of the two was the better for them, and we believe that in this way we are acting fairly and, in the circumstances, in the only practical way. Therefore, although I am only repeating what was said at much greater length in two days of debate in another place, I regret I have to stand quite firm.
VISCOUNT SWINTON: I would add only one or two words, because I said something on this subject on the Second Reading. I am sure that the Lord Chancellor did not mean to suggest this, but it would be a pity if, because a matter has been debated in another place, it were considered not right for it to be discussed again, especially when it is a matter of this importance. I know the Lord Chancellor did not mean to give his words that particular meaning. After all, as Lord Cecil said very well on another occasion, Parliament, by its very name, is a place where people talk and where the country can have the benefit of what is said and be instructed—not that we lecture the country, but we inform the country, so that the country can make up its mind. In recent months certainly, and I think all through this session, the country in the debates which have taken place in this House, has had a great

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deal about which to make up its mind and on which to form fair judgments, and nobody has borne greater testimony to that fact than the Ministers themselves.
The Death Duty argument I have never found in the least convincing, because death comes to all of us, and we all have to pay Death Duties. Therefore it is said the Stock Exchange value is the right thing. But what happens when you pay Death Duties? Unless you are one of those very few millionaires now who happen to keep a few millions in cash or in the bank—I do not suppose you keep Treasury Bills any more—with which you can pay your Death Duties, you spend a large part of your estate in paying them. How do you pay? You sell your investments, and you can only sell your investments on the Stock Exchange. Obviously therefore, the Stock Exchange value is the only practical value to take for Death Duties. It does sometimes, as a matter of fact, work one way and sometimes the other. I have known it to work extremely hard against some estates, and I have known it work the other way in regard to others. I have known it work very hard where somebody has died when values were high, and they could not get probate; and before the executors have received probate a fluctuation has come in the shares, and half as many shares again have had to be realized in order to pay the duties. It is an entirely irrelevant argument.
Nor is it relevant to say that the Stock Exchange value must be a fair sum to give, because if I want to sell my shares the only place where I can sell them is on the Stock Exchange. I agree that that is so. No one complains about it. If we want to sell our shares we have to get a price on the Stock Exchange. But the whole gravamen of the charge here is not that you are taking something from people who want to sell their shares, but that you are taking property from people who do not want to part with it. I am not going to follow the noble and learned Viscount the Lord Chancellor into the question of what constitutes the Stock Exchange value of a share, but it is not as simple as he says. The price is not made by Messrs. Morgan Grenfell and Company and a few trust companies. The price varies ac-
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cording to the number of people who buy and sell the shares. If you go and look at the registers of these companies you will find that though there are a certain number of quite large holdings, the great bulk of the shares are held by very sir all people. Actually what constitutes Stock Exchange value is whether people are in the market to buy and sell shares. No one is better informed on this than the Chancellor of the Exchequer. If anyone will consult him and ask him what makes the price of Consols or Treasury 2½ per cents. to-day he will learn that it is whether people want to buy them. If he wants to put up the price he has to go into the market and buy rather a lot.
The real question is, what is a fair price to give to a person who does rot want to sell. There are many people who have bought—in many cases the buyers have been investment trusts—and have made a wise investment in these interest. I agree that they are probably the wisest investors. People who want security will acquire debenture or preference stocks in these companies. As I say, the investors in many cases are individuals, but there are also charities who get back their Income Tax. The debate, we have had upon this subject has been a very interesting one. The debate we had on the matter of the holding companies has at least shown that this method does work extraordinarily unevenly. I could give the noble and learned Viscount the Lord Chancellor an example of which I happen to have knowledge. A subsidiary company, one of these holding companies, holds investments of a very high value—property investments which have been wisely made. If they got the real value for them, as if they buy them back is between a willing buyer and a willing seller, that would add probably ten shilings or twelve shillings to the value of these shares.
The Lord Chancellor has told us how he learned in the old days from the great accountants. I have worked with them too. I put this to him. He has been, as I have been—he at the Bar and I in business—concerned in the buying of businesses and in making amalgamations. Has he ever had, in all his experience with the great accountants he has quoted, an amalgamation of two businesses where Stock Exchange valuations were taken? I dare wager, never. In every case two

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valuers have come in and have not found it difficult to come to an agreement. Like the noble and learned Viscount, I have been involved in plenty of these amalgamations. I tell him that no one in his senses would go into an amalgamation on a Stock Exchange valuation. The only way one goes into an amalgamation is on a genuine valuation of the real position, made with all the facts disclosed by the auditors and to the auditors.
The provision under the Bill is a compulsory amalgamation. I tell you beyond doubt that there is one thing you are going to do by it and it is well we should emphasize it. Do not think that this is going to affect only the shareholders in these particular undertakings. It is going to have an effect all through the country. I am not talking about political effect. This Bill will not do us any harm politically, but economically it is going to penalize the most conservative, the people who have ploughed back profits, year after year, into the business. The people who look as though they are paying 7 or 8 per cent. on their issued capital have ploughed back into the business sometimes twice the issued capital or as much again, and the real rate is not 7 or 8 per cent., but much nearer 3 or 4 per cent. That is what has built the strength of British industry. That is what the Chancellor of the Exchequer is urging everybody to do. By this method of valuation you are deliberately saying to the people who have been conservative, wise and prudent in their finance, "What fools you have been! If you had declared the highest dividend you could all along the line, your shares would stand higher and you would get a better price." You are discouraging thrift, sound, wise and prudent finance, and you are rendering a grave disservice to the industrial strength of this country.
THE EARL OF SELBORNE: May I add one word to what my noble friend has said, because it is so very true and these facts ought to be borne in mind. I am not going to mention any names, but I am willing to give the noble and learned Viscount names and all the facts and figures privately, if he so desires. A company which I happen to know about whose shares were quoted on the Stock Exchange, for a certain purpose had a valuation made by an eminent firm of
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chartered accountants to see what the valuation of the shares really was. It was no less than double the value quoted on the Stock Exchange, where the shares were quoted at a very considerable premium. I just give that instance. Other noble Lords who have experience in these matters could no doubt quote many other cases. It is a commonplace. The Stock Exchange valuation is no criterion of the real valuation of a company. Profits are ploughed back into a company for the purpose of continuing the business, of weathering unforeseen storms and for providing a sound foundation. They are ploughed back by people who do not intend to sell, and nine times out of ten the value of the money ploughed back is not appreciated on the Stock Exchange, is not known on the Stock Exchange, and is not reflected in Stock Exchange prices. Therefore the whole basis of the Stock Exchange valuation may be fair in the sense that what the Government gain on the swings they may lose on the roundabouts. But it may be grossly unfair to private individuals who are forced to part unwillingly with their property.
It seems to me that in adopting this method the Government are doing two things, both of which will be very prejudicial to the economic health of this country. In the first place, they are committing an injustice to individuals which they really cannot sustain and defend in argument. It is all very well for the noble and learned Viscount, the Lord Chancellor, to say, with an air of great assurance, "That seems to me to be perfectly fair." I could not help wondering to myself whether he would really think it fair if he were in the position of one of these shareholders. But the Government are doing another thing—they are encouraging companies not to plough back their profits into the business, but in future to distribute up to the hilt and to do everything they can to keep up the value of their shares on the Stock Exchange.
I know of a case (again I can give the facts to the noble and learned Viscount. if he desires to have them) where this is being done deliberately at the present time. The Chairman of a company has said to me: "We have never distributed up to the hilt before, but we are going to do it now, because if ever our industry is nationalized we want to secure the best price we can for our shareholders." That

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has only to go on for so long to get the whole of British industry in a very precarious plight. The strength of British industry has largely been built up by the conservative and self-denying policy of those who have had charge of it. The Government, by this rough and ready and, as I maintain, inequitable method of valuation, are undermining that great tradition of British finance.
LORD RENNELL: I intend to withdraw this Amendment, by leave of your Lordships, but before doing so I want to say three things. The noble and learned Viscount says that he considers his basis of valuation to be fair. I am afraid I do not. In the second place, I know he does not say that this is the only basis on which a valuation of the assets of these companies can be made; there is another, but it will be laborious. The third thing I have to say is that I do not propose to traverse, as I think I could, the noble and learned Viscount's remarks about the merits or otherwise of Stock Exchange valuations. Quite frankly, and with all respect, I do not consider that they are germane to this argument, because what the Government are buying is not the stock of the companies but the assets. If they were buying the stock of the companies there might be something to be said for taking Stock Exchange values. They are buying properties under compulsion, on a basis which has no regard for the value of the properties. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 21:
Appointment of stockholders' representative.
21.—(1) In the case of any body to which this Part of this Act applies, being a body in respect of whose securities compensation is payable under the last foregoing section, there shall be appointed, before such date not later than the vesting date as may be prescribed, an individual, in this Act referred to as the "stockholders' representative", to represent the interests of all holders of securities of that body in connection with the determination of the amount of compensation payable in respect of those securities, any payment made after the vesting date of interest or dividend in respect of those securities, and any other matters arising under this Part of this Act affecting the interests of the holders of those securities, and it shall be the duty of the stockholders' representative, in carrying out his functions under this Part of this Act, to represent the interests of the holders of those securities.
10.19 p.m.
THE LORD CHANCELLOR: This next Amendment comes again as a little comic relief. I beg to move to leave out "which" and insert "whom."
Amendment moved—.
Page 33, line i8, leave out ("which") and insert ("whom").—(The Lord Chancellor.)
On Question, Amendment agreed to.
VISCOUNT SWINTON VISCOUNT SWINTON had given Notice that he would move, in subsection (1), leave out "last foregoing section" and insert "provisions of section twenty of this Act and to whom subsection (11) of section fourteen of this Act applies." The noble Viscount said: With regard to this Amendment I would like to be sure that I carry my noble friends with me. The original Amendments we had were for two purposes. First of all, they were To deal with the holding company. That matter we have agreed we will deal with on Report by the new clause. The second purpose was to preserve in being a company and its board of directors where that company had to state what it was to receive in stock, either by agreement or by arbitration. The stockholder clause has now been so amended that the share holders of the company appoint the stockholder's representative. They can appoint, and presumably normally would appoint, the most suitable director to carry on the negotiations for them; and it is only if the shareholders fail to appoint that the Minister appoints somebody. I under-stand that that stockholder receives his remuneration from the Central Electricity Board and has all his proper charges paid. For my own part, I am inclined to think that the negotiations are sufficiently well drafted in the interests of the company, and my own inclination is not to pursue that particular hare further. As there seems to be general agreement in the Committee on that point I will not move my Amendment.
Clause 21, as amended, agreed to.
Clause 22 [Compensation to local authorities]:
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 34, line 46, leave out ("next following section") and insert ("two next following sections").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23:
Further compensation to local authorities in respect of severance.
23. There shall be paid by the Central Authority to local authorities, by way of compensation in respect of the severance of their electricity undertakings from their other activities, the sum of five million pounds, and the said sum shall be divided among such of the said local authorities as satisfy the prescribed conditions, and the amounts to be paid to the individual authorities shall be determined in such manner and in accordance with such principles as may be prescribed.
10.24 p.m.
LORD RENNELL LORD RENNELL moved to leave out all words after "activities" and to insert:
"such respective sums as may be agreed or in default of agreement settled by arbitration under this Act as fair compensation for the net losses likely to be suffered by these local authorities respectively by way of overhead expenses or establishment charges in consequence of the passing of this Act."
The noble Lord said: We now come to an entirely different section of those Amendments which deal with the rights of, and injustices suffered by, companies. We now come to the second category, where I believe a further injustice has been committed in the present wording of the Bill. I refer to the compensation payable to local authorities in respect of severance, and I would like to develop that thesis a little.
When local authorities' electrical undertakings are taken over those local authorities may suffer certain damage on account of severance. As a matter of fact they suffer other damages which are not referred to in this clause, but to which I feel it is perhaps appropriate to refer at this point. Apart from the basis on which their undertakings are to be taken over—which is not under discussion—the only compensation for damages or injuries which they may suffer is that in this clause, assessed at an arbitrary figure for the whole country of £5,000,000. May I take first the assessment of £5,000,000? Fixing a round figure, irrespective of the actual damage suffered, seems to be rather a curious procedure. It rather seems to me similar to that figure of £300,000,000 which appeared in the last Bill—of which the noble and learned Viscount had charge—as being the best shot, if one may say so, that could be made. No real assessment had been made, however, to ascertain whether the £300,000,000 was right or wrong, too big or too small.
So far as I know, the figure of £5,000,000 which is provided for in this Bill to compensate local authorities has been arrived at in rather the same way. Admittedly, between the time the Bill was drafted and this date it would have been impossible to arrive at an actual figure for investigating the claim of each individual local authority whose electrical undertaking has been taken over. But that is no reason for not making those investigations hereafter and allowing these claims, if necessary, to go to arbitration. That is the object of the Amendment I have put down. Perhaps one of the criticisms that will be advanced against the Amendment is that it is, on the whole, rather too narrow, and should include compensation not only for severance but also compensation in respect of overhead expenses or establishment charges, quite apart from compensation in respect of other fixed contributions from rates or the repayment of contributions from rates in the past.
Both in the compensation clause in respect of companies and in these compensation clauses to local authorities it seems to me, as a supporter of the Bill and of all the principles underlying it (wherein I probably differ from other noble Lords below the gangway) a pity to mar a sound approach and a right development at this stage by allowing injustices of this sort to be perpetuated in a Bill—especially if they could be avoided by taking more time, or if another course could be adopted. But it might take a very long time. In the matter of compensation of local authorities, I agree that arbitration on their claims would take time; and so would the assessment of their claims. Even so, does it not seem a pity to mar the Bill and leave a bad feeling at the back not only of shareholders' minds, but at the back of the minds of the local authorities themselves and of the ratepayers, that they have, on account of hurry and urgency which is alleged, but which I cannot see, to be made to suffer some injustice which could have been avoided?
It is to mitigate that, so far as possible, that I have put down this Amendment, and I would ask the noble and learned Viscount, the Lord Chancellor, to consider it. It does riot specify a fixed maximum amount within which all compensation to local authorities has to be set, but would allow these claims to be deter-

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mined by arbitration hereafter. In certain cases the cost of arbitration for local authorities might be heavy, but I am led to understand that by and large they would prefer to suffer those costs on the chance of getting more to finding themselves fitted in to a Procrustean bed of £5,000,000, whatever their claim is. That is the basis of this Amendment, the basis on which I ask the Lord Chancellor to consider it: of not trying to hurry, but of taking time to see that justice is done to the many local authorities who to-day feel aggrieved. I beg to move.
Amendment moved—
Page 36, line 16, leave out from ("activities") to the end of clause and insert. the said new words.—(Lord Rennell.)
LORD ADDINGTON: May I say a word or two before the noble and learned Viscount replies? This does concern local authorities and I would like generally to support the principles laid down by my noble friend who has moved this Amendment. It seems to me far better to get some figure that has some basis upon the actual losses concerned, rather than take the arbitary figure of £5,000,000. So far as that figure is concerned, on which there has been some discussion both here and in another place, I would wish to point out that the associations concerned, certainly the Association of Municipal Corporations, have supplied no figure to the Government and given no information on which the figure of £5,000,000 could have been calculated. They have in no case acquiesced or agreed to the sum, and although they have requested an opportunity of discussing the matter with the Minister that request has so far not been acceded to.
The only way in which any views have been expressed was by two officers at a meeting called for another purpose. Such discussions by officers are not binding on the local authorities, and it is only when agreements are made by the councils themselves that they can have any such effect. The noble and learned Viscount referred to the discussion in another place. So far as I understand there has been no real discussion on the adequacy of the £5,000,000, nor has there been any real explanation of the principles on which that particular figure was arrived at. I happened to be talking on the way up here to-day with a councillor of one of the corporations whose electricity supplies are likely to be
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taken over. He expressed the opinion that in that particular borough the result of this Bill would be an increase in the rates to meet the losses that have been incurred owing to severance. I think again that it is unfair that the ratepayers should have to bear these losses because they have not been adequately compensated with regard to severance.
I have one observation to make about the wording of this Amendment, and I believe that in order to cover all the losses that might be involved the words should read:
"by way of overhead expenses and establishment charges"—
instead of "or," as in the Amendment—
"and such other expenses as may be shown to have arisen by reason of the severance."
I believe that those words would cover fully all the circumstances which should be taken into account, and that might also arise on the next Amendment in the name of Lord Wolverton regarding con-panics. I think, as is suggested, that it might be settled by agreement as well as by arbitration. If it can be settled by agreement, it will avoid a good many the difficulties concerned with the cost of arbitration. I think there are probably sufficient data on which an agreement might be reached and there are sufficient facts, particularly when taking particular instances on which a fair and a proper estimate of the losses incurred could be ascertained. I therefore hope very much that the noble and learned. Viscount will be able to accept this Amendment.
THE LORD CHANCELLOR: I am sorry that I can do absolutely nothing here at all. I thought this was not an ungenerous figure, and I am bound to say that it surprises me to hear that the local authorities object to the rough and ready way in which it was arrived at. What they object to is the fact that they do not consider it enough. No doubt if we had put a little extra to it, they would not have troubled about it being rough and ready; not a bit of it. They would have liked it very much if they could have had a bit more. We really think that we have treated them handsomely. It is true that they have had no discussions with the Minister himself, but they did have the very fullest discussions with the officials of the Ministry. On

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those discussions the Minister took the matter up and had guidance from his colleagues as to what figure he might offer; and this figure of £5,000,000 was the figure which we accepted.
The claim has been put forward to the officials on three grounds: First of all the loss of the right to use the profits of the electricity undertaking in relief of rates; secondly, the loss of benefit in respect of Income Tax set-off (I confess I do not think very much of those two claims); and, thirdly, the loss of contributions made by the electricity undertaking towards central establishment charges and other overhead expenses. The third is the real objection. The total amount actually contributed by electricity undertakings towards the central establishment charges and other overhead expenses of local authorities cannot be ascertained precisely, but it is accepted by the Minister, and by the Associations representing the authorities, that it falls within the range of £500,000 to £1,000,000 per annum. The amount of the contribution is not, of course, necessarily an accurate measure of the loss. Some of the liabilities which the contributions are intended to meet may be automatically liquidated by transfer to the electricity boards on vesting dates; others will be liquidated over varying periods of years.
Under those circumstances I quite agree that you cannot estimate the total loss with any accuracy; but it is clearly likely to be considerably less than £1,000,000 in the first year—as I say, it ranges from L500,000 to £1,000,000—and to diminish rapidly thereafter. Consequently, our figure of £5,000,000, which would allow of loss at the maximum rate of contribution for a period of five years, is likely in our view to be a generous one and sufficiently liberal to provide a margin to cover smaller items which the local authorities may also regard as losses consequent upon severance. Although I think the claims are bad, I may say that the first two types of claim no doubt influenced us to some extent in putting our figure as high as five times the £1,000,000, which is the agreed maximum of the contribution. We may be criticized as having gone a little too high there, but I do not think we can he criticized for having gone too low, and, as a broad and general principle in these Bills, I am inclined to
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think that where you have a transfer of an undertaking from one public authority to another public authority, it is really not a case which calls for compensation. But, for the reasons I have given, we did decide to give something, and we have given this figure of £5,000,000. I do claim that it is not an ungenerous figure and consequently I cannot go beyond this figure; nor can I accept this arbitration which I think would be complicated and very difficult. It would also be questionable whether any such arbitration would result in advantage to the local authority.
LORD RENNELL: I am very much obliged to the Lord Chancellor for his sympathetic handling of this Amendment. Of the three points which he made, I entirely agree that the Income Tax point is not one which can really be justified. He will probably agree that there is more, as he said, in the claim for compensation in respect of the contributions of the undertaking to rates. I accept, of course, what he says: that that fact had its influence in fixing this figure at £5,000,000, and that the total claims are unlikely to exceed that figure. My information from certain sources (which is nothing like so complete as that of the noble and learned Viscount) is that the figure might be exceeded if the first of those claims, the contribution to rates, were taken into account. But, whether the figure is right or generous or not generous, I am not entirely persuaded by the argument that arbitration, or arbitration in default of agreement as suggested by my noble friend Lord Addington, is not the proper course, and would not leave a greater sense of justice having been done than the fixing of an arbitrary figure, which it is difficult to justify, to each individual authority. However, in view of remarks which the noble and learned Viscount, the Lord Chancellor, has made I do not feel inclined to press this Amendment. I therefore beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clause 24 agreed to.
Clause 25:
Compensation to composite companies.
25.—(1) Every composite company shall be entitled to be paid by the Central Authority, by way of compensation for the vesting in that Authority or in any other Electricity Board of property and rights of the company,

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and in lieu of any other compensation in respect of that vesting, an amount calculated as follows:—
(c) the amount of the compensation shall be an amount bearing to the aggregate value of the said securities the same proportion as the said average net revenue of the electricity undertaking bears to the said average net revenue of the company's undertaking as a whole.
10.41 p.m.
LORD WOLVERTON LORD WOLVERTON moved, in subsection (1), at the end to insert:
"(d) there shall be added to the amount calculated in accordance with paragraph (c) of this subsection such, if any, additional amount by way of compensation for the severance of the electricity undertaking of the company, as may be agreed between the Central Authority and the company or (in default of agreement) as may be determined by arbitration under this Act as being fair compensation for the anticipated net loss resulting to the company by way of overhead expenses or establishment charges in consequence of such severance."
The noble Lord said: This Amendment is one which I think is justified, because under Clause 23 local authorities are to be given some £5,000,000—though we still do not know how it is to be divided up—in respect of severance. In Clause 25 there is no such provision for composite companies. As your Lordships know, they appear on Page 1oo of the Bill. They are not very big concerns but I do submit that what is fair in one case should be fair in the other. They are mostly gas and electricity concerns, although there are one or more which deal with gas, water and electricity. We on this side of the House feel that they should be treated in the same way. The Amendment seeks to arrange it so that if agreement cannot be reached they should go to arbitration under Clause 31 which sets up the abitration tribunals. There is a precedent for asking for this. Under the Electric Lighting Act, 1888, companies are taken over compulsorily by local authorities and there is a provision in that Act in respect of severance. I beg to move.
Amendment moved—
Page 37, line 22, at end insert the said paragraph.—(Lord Wolverton.)
THE LORD CHANCELLOR: I must tell the Committee quite frankly that I have no authority to agree to this Amendment, and therefore I am not going to do so. Equally, while hoping that these words will not be used in evidence against
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me hereafter, I rather wish that I had authority to agree to this Amendment or something like it. If the noble Lord will agree to withdraw it now, I will see if I can get authority to help him on this matter on the Report stage. If I may say so with respect, I think that in the noble Lord's own interest, it would be better that he should take the course I suggest. He will then at any rate have had my advocacy behind the scenes. I do not know—perhaps he does not either—how far this is a practical issue, and what there really is in this matter. As I have said, I will look into it. I cannot agree to arbitration. I have just denied arbitration to the local authorities, and if I were to concede arbitration to these people, I should get into even worse trouble than that into which I have already got. I can tell the noble Lord that this will require a little ingenuity, but I will do my best to get the necessary authority to help him between now and the Report stage if he will agree to withdraw the Amendment.
LORD WOLVERTON: I am very grateful to the noble and learned Viscount for what he has said, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 25 agreed to.
Clause 26:
Control of dividends, interest and other payments.
26.—(1) Where any body to whom this Part of this Act applies, being a company, have paid after the tenth day of January, nineteen hundred and forty-seven, interest or a dividend on any of their securities in respect of the last complete financial year before the said day or any subsequent period, being payments which, regard being had to any interest or interim dividend paid before the said day in respect of that year or period, are in excess of the payments of interest or dividend permitted under this section, all persons who were directors of the body at the time when the resolution of the directors was passed authorising or recommending the payments shall, subject to the provisions of this section, be liable to pay to the Central Authority an amount equal to the total amount of the excess.
(2) The payments of interest or dividend permitted under this section are as follows:—
Provided that:
(i) such payments shall only be made out of the net revenue of the body for the period in respect of which the payment is made, or, with the approval of the Minister, out of a iv reserves applicable for the purpose of maintaining interest payments and equalising rates

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of dividend, and any payment shall, so far as it is made otherwise than out of that revenue, or, with the approval of the Minister, out of those reserves, not be permitted under this section; and
(7) Any claim under this section by the Central Authority against the directors of any such body as aforesaid shall be determined by arbitration under this Act, and, if the arbitration tribunal decides the claim in favour of the Central Authority, it shall make such orders against the said directors as will secure the payment to the Central Authority of the total amount for which the directors are liable on the claim, but the tribunal may exempt any director from liability, on the ground that he was not responsible for the acts giving rise to the claim, and may order different amounts to be paid by different directors, having regard to the extent to which they were respectively responsible for those acts.
10.45 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON moved, in subsection (1) after the first "paid" to insert "pursuant to a resolution passed." The noble Viscount said: I think the noble and learned Viscount, the Lord Chancellor, will agree that it is right that the test date should be the date when the resolution is passed. The test date ought to be the date when the resolution was passed and not when payment was made. Is that right?
Amendment moved
Page 38, line 29, after ("paid") insert ("pursuant to a resolution passed").—(Viscount Swinton.)
THE LORD CHANCELLOR: I am prepared to accept this Amendment at once.
On Question, Amendment agreed to.
LORD HAWKE LORD HAWKE moved, in proviso (i) of subsection (2), to leave out all words after the first "or" and insert:
"out of any undistributed profits properly applicable for the purpose of maintaining interest payments or equalising rates of dividend."
The noble Lord said: In this Amendment we seek to provide that where a company is allowed under this Bill to pay certain interests or dividends and finds that the period in question is almost certain to be the last year before sequestration, the company may, out of proper funds, make up the amount to the maximum it is allowed to distribute under the Bill. The Government may possibly claim that the point has already been covered by the small Amendment which the noble and learned Viscount is making
172
to this clause. It may meet one point. Possibly our wording was not quite correct technically, but our Amendment takes out "the approval of the Minister." It seems to me quite unnecessary to drag the Minister into a matter of this sort.
It is laid down, and perfectly well known, what maximum the company is allowed to pay and it will be perfectly well known to the directors of a company and their accountant advisers what funds are available from which it is right and proper to pay dividends. It is further provided in the Bill that if the directors of a company pay dividends out of funds which are not properly available for those payments, the Minister can immediately pounce on them. Therefore why is it necessary to bring in the Minister. It seems to me somebody's safeguard in the back of their minds that the Minister and the Ministry must have a finger in every pie. It is merely piling unnecessary work on the Minister. I hope the noble and learned Viscount will agree with that, and on that basis accept the Amendment. I beg to move.
Amendment moved—
Page 39, line 15, leave out from ("or") to ("and") in line 21 and insert the said new words.—(Lord Hawke.)
THE LORD CHANCELLOR: I thought I had met the noble Lord very fully by putting in the word "funds" which is a rather wide word, instead of the narrower word "reserves" but I agree with what he has said, that by my Amendment I have left in words "with the approval of the Minister." I will see what I can do to help him on that. I have not the authority at the present moment. I think I shall have to accept his "properly applicable." So long as they are taken out of funds "properly applicable," there is a case for considering whether the approval of the Minister is necessary. It was not until to-day that I was aware of this difficulty and I have not had time to get instructions. I will take up the matter to see if I can move a further Amendment on Report stage, the effect of which will be to leave out "with the approval of the Minister" and put in the words "properly applicable" or something on these lines.
VISCOUNT SWINTON: May I suggest the words, "in accordance with normal practice"?
THE LORD CHANCELLOR: I think that that would not be at all bad—"applicable in normal cases," or something like that. I will look into it. I have not any instructions, but I am willing to do what I can to help. If the noble Lord will withdraw his Amendment, and allow me to have mine, I will see if I can go one better on the Report stage.
LORD HAWKE: I certainly agree with "funds," and in view of the assurances which I have been given, I am only too glad to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: I beg to move the next Amendment, to which I have referred.
Amendment moved—
Page 39, line i6, leave out ("reserves") and insert ("funds").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the next Amendment.
Amendment moved—
Page 39, line 21, leave out ("reserves") and insert ("funds").—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD TEYNHAM LORD TEYNHAM moved, in subsection (7), after "shall be" to insert:
"made before the expiration of a period of twelve months beginning with the vesting date, and if so made, shall be."
The noble Lord said: The object of this Amendment is to secure that there should be a time limit on claims which may be made by the Central Authority against directors in respect of contravention of subsection (7) of this clause. I venture to point out that there is already a time limit which I think is twelve months, in Clause 29 (2). I can see no reason why there should not be a similar time limit in this case. I beg to move.
Amendment moved—
Page 41, line 9, at end insert the said words,—(Lord Teynham.)
THE LORD CHANCELLOR: I think this is reasonable, and that I ought to accept the Amendment.
LORD TEYNHAM: I am grateful for the acceptance of the Amendment.
On Question, Amendment agreed to.
VISCOUNT SWINTON VISCOUNT SWINTON referring to an Amendment of which Viscount Maugham had given Notice, in subsection (7), to leave out all words after "orders" and insert "as it shall think just, having regard to all the circumstances," said: There is nobody else here to take the place of the noble and learned Viscount, Lord Maugham, in whose name this Amendment stands. If the Lord Chancellor is going to accept this Amendment, I will gladly move it but if it is one of those difficult legal points which require a brace of Lord Chancellors to determine, I hesitate to do so. Does the noble and learned Viscount think that we might take it at half past two to-morrow?
THE LORD CHANCELLOR: Your Lordships will see that I have the next Amendment down to Clause 26. It is not on the Marshalled List, but on the Supplementary List. I asked the draftsman to put into appropriate language the substance of the Amendment of the noble and learned Viscount, Lord Maugham. I feel quite sure that I have met the noble and learned Viscount by my new Amendment.
LORD HAWKE: I had some words with the noble and learned Viscount. Lord Maugham, on the subject, and he thought he had been met by the Lord Chancellor.
VISCOUNT SWINTON: Then I will not move the Amendment.
THE LORD CHANCELLOR: This is the Amendment I have just mentioned. It puts into appropriate language the substance of the Amendment of the noble and learned Viscount, Lord Maugham. I beg to move.
Amendment moved—.
Page 41, line 12, leave out from ("against") to the end of the subsection and insert ("all or any of the said directors in respect of their liability on the claim as it thinks just, having regard to all the circumstances").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: the next Amendment is a drafting Amendment. I beg to move.
Amendment moved—
Page 41, line 44, after ("(1)") inset ("(3)").—(The Lord Chancellor.)
On Question, Amendment agreed to.

LONDON TRAFFIC ACT, 1924.
London Traffic (Station Parade, Gerrards Cross) (Amendment) Regulations, 1947, dated 15th July 1947, made by the Minister of Transport: Laid before the House (pursuant to Act) and ordered to lie on the Table.
METROPOLITAN NORTHERN AREA (CONSERVATION OF WATER) ORDER, 1947.
Order of the 15th July last relating to the Special Procedure Order, discharged.
METROPOLITAN NORTHERN AREA (CONSERVATION OF WATER) ORDER, 1947.
Special Procedure Order (together with a Certificate from the Minister of Health): Laid before the House, pursuant to the Statutory Orders (Special Procedure) Act, 1945.

GOVERNMENT OF INDIA (GOVERNOR'S ALLOWANCES AND PRIVILEGES) (AMENDMENT) ORDER, 1947.
GOVERNMENT OF BURMA (GOVERNOR'S SALARY, ALLOWANCES AND PRIVILEGES) (AMENDMENT) ORDER, 1947.
GOVERNMENT OF BURMA (HIGH COURT JUDGES) (AMENDMENT) ORDER, 1947.
Report from the India and Burma Orders Committee, That they have examined the Draft Orders as required by the Standing Orders of the House: That in their opinion the Orders do not raise important questions of policy or principle: That the Orders are founded on precedent: That in the opinion of the Committee the Orders can be passed by the House without special attention and that no further inquiry is necessary before the House proceeds to a decision on the Resolutions to approve the said Orders; read, and ordered to lie on the Table.
House adjourned at three minutes before eleven o'clock.