Sitting of 25 March 1947

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

SELSEY PENINSULA (PETITION)
Mr. Joynson-Hicks: I beg leave to present a Petition on behalf of a large number of people interested in the preservation and proper development of the coast and countryside in the Selsey peninsula. The Petition, which is signed by upwards of 10,000 inhabitants of the Chichester city and rural district areas, recites that the petitioners are deeply and grievously affected by proposals of His Majesty's Government to create and perpetuate within their area bombing ranges to the detriment of the agricultural and fishing industries, the resorts of scores of thousands of annual holiday visitors, and the use of harbours, and to the destruction of a nature reserve and many people's livelihoods. The Petition concludes with the prayer:
"Your petitioners pray that the aforesaid proposals may be abandoned, and your petitioners, as in duty bound, will ever pray."
To lie upon the Table.

PRIVATE BUSINESS
  SWINDON CORPORATION BILL
  As amended, considered; an Amendment made to the Bill; Bill to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Police Appeals
    Mr. W. J. Brownasked the Secretary of State for Scotland in how many appeals under the Police (Appeals) Acts,
    1046
    1927 and 1943, which had been disposed of up to 30th September, 1946, had cases been remitted to chief constables for reconsideration, and with what results; in how many appeals, which had been disposed of up to 30th September, 1946, were the punishments of dismissal, enforced resignation, reduction in rank, or reduction in rate of pay, respectively, reduced, or, except in cases of dismissal, increased.
    The Secretary of State for Scotland (Mr. Westwood): The answer to the first part of the Question is that three cases were remitted to the chief constable for further consideration. In two of these cases, where the punishment was a requirement to resign, the appellant was reinstated by the chief constable. In the other case, the chief constable adhered to his decision, but the punishment of dismissal was reduced by the Secretary of State to one of reduction in rate of pay. As regards the second part of the Question the numbers are 10, six, none, and one respectively. There were no cases of increase of punishment.

    Mid-Week Football
    Mr. Carmichaelasked the Secretary of State for Scotland if he will make a statement on mid-week football in Scotland; and if he is prepared to recognise that no industrial difficulties will arise if football is permitted in the evenings.
    Mr. Westwood: The present position is that the Scottish Football Association, the Scottish Football League, and the Scottish Junior Football Association have barred the playing of any football match at which a. charge for admission is made or money raised in any form except on Saturdays or on recognised public holidays in the place where the match is played. These bodies have asked me to receive a deputation to discuss further the question of mid-week matches and arrangements for a meeting are being made. As regards the second part of the Question, I do not think that the holding of matches in the evening would constitute a guarantee against interference with production.
    Mr. Carmichael: Can the right hon. Gentleman say from his own knowledge, particularly of junior football, and in view of the fact that during the war no such interference took place, that he really desires to restrict mid-week football when

    1047
    it is played at 7 o'clock in the evening? I ask that question because in my own city more people attend the cinemas in one evening than those who attend a junior football match. Will not the Secretary of State do everything in his power to give these working lads an opportunity of playing football? There is no finance involved other than a paltry sum of money paid at the, gate.
    Mr. Westwood: I do not desire to impose any restrictions in connection with football matches. I say that as a football enthusiast myself. But these restrictions are to the credit of the Scottish Football Association which gave a lead to England in this regard, because they recognise the national problem which we are facing at the moment. As I have already indicated, they have asked me to meet them and I presume they will put their case before me.
    Mr. Rankin: Will the ban apply to five-a-side football games at sports meetings which are held during the week?
    Mr. Westwood: I have not given consideration to that aspect of the matter.
    Mr. Rankin: Will my right hon. Friend keep that point in mind?
    Mr. Cook: Will my right hon. Friend bear in mind the fact that junior football clubs depend on mid-week evening games in the summer in order to keep them going during the season?

    Agricultural Binders and Tractors
    Mr. Spenceasked the Secretary of State for Scotland how many binders and tractors have been ordered by Scottish farmers for delivery before harvest time, 1947; whether he expects these orders will be satisfied in full; and what will be the expected proportion of imported and home-produced machines involved.
    Mr. Westwood: Scottish farmers have applied for 510 imported binders for the 1947 harvest and have ordered 124 home-produced binders; applications have been received for 466 imported tractors; the known demand for leading makes of home-produced machines is 1,779. It is hoped that substantial numbers of binders and tractors will be supplied before harvest, but in view of production difficulties at home and overseas I regret I am unable to supply any estimate of probable deliveries.
    Mr. Spence: Is the right hon. Gentleman aware that he made a public statement to the Press, that he hoped the demand would be met before the harvest; that several agricultural executives were refusing orders for imported machines; that home producers of these machines were refusing orders for delivery before the harvest; and that we are importing these machines from hard currency countries and exporting them to soft currency countries? Is this not crazy?
    Mr. Westwood: I will certainly look into the points that have been raised. I am not aware whether or not the points made by the hon. Member are facts or not.
    Mr. Hector Hughes: Is the right hon. Gentleman aware that manufacturers of these machines, such as Garvie & Sons of Aberdeen, are greatly handicapped by lack of materials; and will he do what he can to facilitate the production of these machines, especially having regard to the urgency in the present season?
    Mr. Westwood: I am aware that the whole of the engineering industry is affected by shortages of materials, and that an assurance has repeatedly been given in this House that we are doing all we possibly can to help deal with that problem.
    Mr. Snadden: Is it not a fact that we exported 8,000 tractors during the past 12 months; and why cannot our home producers have some?

    East Kilbride New Town
    Colonel Gomme-Duncanasked the Secretary of State for Scotland when the publication may be expected of the sheriff's report on the East Kilbride New Town scheme.
    Mr. Westwood: I have recently received the report of the public inquiry, and I hope to be able to announce my decision at an early date. The report itself will, however, in accordance with long established practice, be treated as a confidential document and will not, therefore, be published.
    Colonel Gomme-Duncan: What is the object in publishing the proceedings of the inquiry, thereby allowing people to read about it, and, when the report on which the whole thing depends comes out, not allowing them to know what it is? Surely it is a matter of public interest?
    Mr. Westwood: I have already pointed out that this is a well-established constitutional principle. I will not publish that report, but I give the House the assurance that when I announce my decisions I will certainly see that they will be accompanied by a full statement, which will be issued to the objectors and to the public.
    Colonel Gomme-Duncan: Is the right hon. Gentleman aware that it is already public knowledge that this report of the sheriff will be very unfavourable to what he hopes to do in East Kilbride; and is not that the reason it is not being published?
    Mr. Westwood: All I can say is, that the hon. and gallant Gentleman has not the slightest idea what my decisions will be. I am responsible for making those decisions, and it will be upon my decisions that we will act in the building of new towns.
    Mr. Assheton: Does the right hon. Gentleman expect this case to go to another place?
    Mr. Westwood: No, Sir. I certainly expect that when I make my decision it will be accepted by all parties as being a decision based upon the representations submitted to me.

  HOUSING (SCOTLAND)

    Modernisation
    Lieut.-Commander Clark Hutchisonasked the Secretary of State for Scotland whether he will now announce the date of publication of the Report of the Scottish Housing Advisory Committee on reconditioning.
    Mr. Westwood: It is hoped to publish the Scottish Housing Advisory Committee's Report on "Modernising our Homes" on 15th April.
    Mr. J. S. C. Reid: Can the right hon. Gentleman tell the House how long this Report has been printing—how long it is since it was sent to the printer?
    Mr. Westwood: It is a fairly long time since it was sent to the printer, but there have been certain difficulties. There happened to be a Command Paper ahead of this, and that put difficulties in the way of my getting this Report printed as early as I should have liked.
    Mr. Reid: Does the Stationery Office only print one paper at a time?
    Mr. Westwood: No, Sir. They handle more than one paper at a time, and no one knows that better than the right hon. and learned Gentleman.
    Colonel Gomme-Duncan: Could it not have been printed in Scotland?
    Mr. Westwood: I have a faint suspicion that it was.

    Glasgow
    Mr. Stephenasked the Minister of State for Scotland the number of houses to be completed in Glasgow, permanent and temporary, under the new allocation.
    Mr. Carmichaelasked the Secretary of State for Scotland if he is aware of the protest made by the Glasgow Corporation Housing Committee against his housing allocation to Glasgow for 1947; what the allocation is, and the difference with Glasgow's own housing budget; and what are the reasons for the limited allocation in view of Glasgow's housing shortage.
    Mr. Westwood: In informal discussions between my Department and representatives of the corporation, it was agreed that it might be possible for the corporation to complete some 4,000 houses in 1947, but I understand from the Press that the corporation now desire to come in deputation to me on the matter. The estimates of the numbers of permanent houses which could be completed by each local authority in 1947 are based on a study of the labour resources of the area, the present position of the authority's housing schemes, and the over-all position with regard to the supply of materials. It is estimated that during 1947, the Corporation of Glasgow's total allocation of 2,550 temporary houses will be completed: of these 851 had already been erected at 31st January.
    Mr. Stephen: Can the Secretary of State for Scotland say why Glasgow has had to make this protest when they knew that they had sufficient labour available to provide another 4,000?
    Mr. Westwood: I cannot say why they made the protest, but I am arranging to meet them to hear their proposals.
    Major Guy Lloyd: Could the right hon. Gentleman say how many other local authorities have complained bitterly on

    1051
    the same lines, and whether they, also, are to be granted the privilege of an interview?
    Mr. Westwood: I do not know that I have ever refused interviews with any local authorities who wished to meet me. No Secretary of State for Scotland has been more willing to meet the local authorities than I am, because I am interested in them.
    Major Lloyd: On a point of Order. The right hon. Gentleman completely misunderstood my question. I made no such accusation whatever. I asked how many had been invited to attend an interview.
    Mr. Westwood: It is impossible for me to say, without notice, how many have made complaints or have already asked to see me. I have indicated that, wherever it is possible, I am always ready to meet local authorities, because I am interested in local authorities.
    Mr. Carmichael: Is the right hon. Gentleman aware that Glasgow has protested because the Scottish Department have stated that Glasgow's total allocation is too high? Can the Secretary of State state the figure specified by his Department as against the figure calculated by the Glasgow Corporation?
    Mr. Westwood: I cannot do so without notice, but I presume all these points will be brought to my notice when I receive the deputation.
    Mr. Stephenasked the Secretary of State for Scotland whether he is aware that the house factors and owners of property in Glasgow are extending their practice of holding empty houses for sale at exorbitant prices; and what further steps he intends to take for the protection of the public in view of the housing scarcity in Glasgow.
    Mr. Westwood: My latest information does not suggest that the practice of holding empty houses in Glasgow for sale is increasing, but if the hon. Member has any evidence to the contrary I shall be glad to look into it. As I have already indicated, I am fully prepared to authorise the corporation to requisition unoccupied houses in the city, which are being deliberately kept vacant for possible sale at high prices.
    Mr. McGovern: Is the right hon. Gentleman's Department aware that newspapers, especially the "Glasgow Herald," publish every day a large number of these cases of houses for sale, and does he think that he is taking sufficient steps to stop this practice?
    Mr. Westwood: As I have already indicated, wherever a local authority, knowing all the facts, applies to me for requisitioning powers in accordance with the arrangements which have been made, I will do all I can to help secure the requisitioning of the properties, where I am satisfied that they are being deliberately kept from letting for the purpose of obtaining exorbitant prices.

    Fife
    Mr. Gallacherasked the Secretary of State for Scotland if he will guarantee special consideration of housing priority and the immediate start to the building of new towns in Fifeshire, in vew of the importance of this mining area to Scotland's reconstruction.
    Mr. Westwood: The preparatory work in connection with proposals for the establishment of two new towns in Fife has reached an advanced stage, and I hope to take the necessary action under the New Towns Act in relation to the first of these projects at an early date. I am also arranging, in consultation with the local authorities, for 600 permanent houses for miners to be commenced in Fife by the Scottish Special Housing Association this year, and other measures for dealing with the housing requirements of the mining areas in the county are under consideration.
    Mr. Gallacher: Is the Minister aware that Fife contains one of the most important coalfields in the country and that great new workings are being opened which will call for thousands of men? Will he ensure that the new towns and houses are built as expeditiously as possible?
    Mr. Westwood: That is exactly what I am doing, but I am tied by the conditions laid down in the New Towns Act, and I must not prejudice myself in view of any representations which may be submitted to me following any public inquiry which may be necessary in accordance with the conditions of the New Towns Act. So far as mining needs are concerned, the county of Fife has already been allocated 600

    1053
    houses to meet immediate needs—300 at Kirkcaldy, 150 at Dunfermline, and 150 at Oakley.
    Lieut.-Colonel Sir Thomas Moore: May I express the hope that the right hon. Gentleman will not overlook the needs of Ayrshire, which is also to have a new town and produces the best coal in Scotland?
    Mr. Speaker: This Question applies only to Fifeshire.
    Sir T. Moore: With respect, Mr. Speaker, the right hon. Gentleman indicated that Fifeshire would get preferential treatment because of new towns and coal, but Ayrshire has a new town and coal too.
    Mr. Speaker: That is a different question.

    Permanent Building
    Mr. Thornton-Kemsleyasked the Secretary of State for Scotland (1) how many of the 306 permanent houses under construction on 31st January, 1947, for the Aberdeenshire County Council and of the eight under construction on the same date for the Burgh of Ballater are to be completed by the end of 1947;
    (2) how many of the 60 permanent houses under construction on 31st January, 1947, for the Kincardine County Council, of the 34 under construction for the Burgh of Banchory, of the 22 under construction for the Burgh of Laurencekirk, and of the 34 under construction for the Burgh of Stonehaven, on the same date, are to be completed by the end of this year.
    Mr. Westwood: The estimated numbers of traditional and non-traditional houses to be completed in 1947 in the areas referred to are as follows: Aberdeen County 230; Ballater 4, Kincardine County 28; Banchory 30; Laurencekirk 16; and Stonehaven 26.
    Mr. Thornton-Kemsley: Is the right hon. Gentleman aware that this announcement will give grave dissatisfaction in an area where over ten times these numbers of separate families will apparently be without houses at the end of the year?
    Mr. Westwood: Until we can finally solve the housing problem, I admit that I cannot give satisfaction to everyone,
    1054
    but I do not admit that the statement will give grave dissatisfaction, in view of the figures which I have announced to the House.
    Mr. J. S. C. Reid: Is it not an uneconomical method of using labour to cut down figures to these small penny packets?
    Mr. Westwood: It is wise to say what one can provide by way of labour and material and not cause disillusionment.
    Mr. Thornton-Kemsleyasked the Secretary of State for Scotland how many of the 30,815 permanent houses under construction in Scotland on 31st January, 1947, are to be completed by the end of this year.
    Mr. Westwood: As indicated in the recent White Paper, it is estimated that it may be possible to complete 24,000 traditional and non-traditional houses in 1947, including 2,000 private enterprise houses.
    Mr. Thornton-Kemsley: Has the Minister been able to find any local authority in the whole of Scotland which is satisfied with the allocation of houses for 1947?
    Mr. Westwood: What I find after we have collected the voices of the local authorities is that they recognise that the 22,000 which will be built by the local authorities and completed in 1947 will be 3,000 more than were completed in the peak year under Tory administration.
    Mr. J. S. C. Reid: Can the right hon. Gentleman tell us how many of these are temporary and how many are permanent; and how does the figure for permanent houses compare with the figure for permanent houses built before the war?
    Mr. Westwood: The right hon. and learned Gentleman cannot have read the Question. I have to read the Questions very carefully. This Question deals wholly and solely with permanent houses.
    Mr. Gallacher: Do the 24,000 houses represent one in 10 of the total amount being built in the country; and if Scotland's proportion is generally eleven-eightieths, can we take it that the Housing Association houses will be over and above the 24,000?
    Mr. Westwood: The temporary houses—shall I put it that way—
    Mr. Gallacher: Not temporary houses. Will the Housing Association houses be over and above the 24,000 that Scotland is getting, or will they he limited in this matter to one in 10?
    Mr. Westwood: They are limited to 24,000, because we believe that that will be what we shall be able to complete in 1947.

    Allocation of Materials
    Mr. Spenceasked the Secretary of State for Scotland on what principle allocations of materials are made to local authorities for the completion of houses under construction; and which materials, in particular, are in short supply.
    Mr. Westwood: Licences are issued by my Department for timber, steel and cast iron, in quantities calculated according to the number of houses which the particular authority is expected to be able to complete in 1947, and to the stage of progress which these houses have already reached. Other materials are acquired by contractors on priority certificates issued by the local authorities themselves. The materials in particularly short supply are timber, steel and cast iron, lead, certain types of electrical components, salt glazed pipes, and slates. I would refer the hon. Member to the detailed explanation of the supply position given in paragraphs 12 to 15 of the recent White Paper.
    Mr. Spence: Is the Minister aware that his answer shows that the allocation of houses is being made on a point of expediency, to show the maximum number of completed houses in the shortest space of time, disregarding local needs; and is he aware that this is causing very great resentment? With regard to the second part of the answer, was all the timber for these houses ever ordered; if it was ordered, which country let us down; and if it was not ordered, who was the guilty man?
    Mr. Westwood: I cannot answer all those questions without notice.
    Mr. Thornton-Kemsley: Would the right hon. Gentleman answer this one? Does he remember that on 26th November the Joint Under-Secretary of State said that the whole of the Swedish houses in Aberdeen County would be completed by 31st December last year; is he aware that the whole of those houses are completed now, except for taps which have
    1056
    been on order for four months; and can he say when those taps will be forthcoming?
    Mr. Westwood: I cannot. All I can say is that they are on tap.

    Grants
    Mr. Niall Macphersonasked the Secretary of State for Scotland in respect of how many houses have applications been received through local authorities, and have grants been made, under Clause 9 of the Housing (Financial Provisions) (Scotland) Act, 1946; on how many such grant-aided projects has work begun; and how many have been completed up to the latest date available.
    Mr. Westwood: Local authorities have received 145 applications for the increased grant and have undertaken to pay grant in respect of 94 houses. It is not possible to say how many of these particular houses have been completed or are under construction. But since the passing of the 1946 Act, 45 houses have been completed under Part II of the 1938 Act, and at the end of February, 276 houses were under construction.
    Mr. Macpherson: Will the Secretary of State make certain that where applications are made for houses which are not at present in occupation, but were in occupation at the time the 1938 Act was passed, consideration will be given to a grant?
    Mr. Westwood: I will certainly look into the point raised by the hon. Member.

  MINISTRY OF PENSIONS

    Stump Socks
    Lord Willoughby de Eresbyasked the Minister of Pensions if he is aware that issues of stump socks for wear with artificial limbs have now been reduced to three for six months; that many limbless ex-Servicemen will soon be unable, in consequence, to wear their artificial limbs and to follow their employment; and what steps he is taking to remedy the present unsatisfactory position.
    The Minister of Pensions (Mr. Wilfred Paling): Issues of stump stocks have been reduced from four to three at a time, except in new cases, because of a temporary shortage. The reduction should

    1057
    not have the consequences suggested by the hon. Member, but if, exceptionally, any limbless man finds himself in a position of real difficulty he should get in touch with his local limb fitting centre, who will help him if possible. Every firm known to be in the trade has been approached, and certain small additional supplies should become available. There is, however, a definite shortage of certain types of skilled labour in this particular industry.
    Lord Willoughby de Eresby: Is the right hon. Gentleman aware that on medical grounds it is extremely desirable that limbless men should have a sufficient number of stump socks; and will he give some priority in this matter?
    Mr. Paling: Yes, I am aware of that, and because of it we are making every effort to bring this up to the traditional issue.

    Disablement Assessment (New Rates)
    Mr. Parkinasked the Minister of Pensions whether the Report of the Interdepartmental Committee on the Assessment of Disablement due to Specified Injuries has been received; if it is proposed to publish it; and what action he intends to take in the matter.
    Mr. Paling: My right hon. Friend the Minister of National Insurance and I have received the report in question and copies of it will be available to the Vote Office tonight. It is my intention to apply the assessments recommended in the report to the cases of war disablement dealt with by my Department. The new rates will apply with effect from the first pay day in April. Pension cases of the 1939 War will be reviewed automatically, but it will take about three months to complete this task.
    It would not be possible without undue expenditure of time and labour to trace the pensioners of the 1914 War in receipt of pensions for amputation who may be entitled in future to a higher rate, and pensioners of that War will have to apply for review. To facilitate this, I will arrange for suitable publicity to be given to the types of case affected.
    Mr. Parkin: Has the Minister made any estimate of the number of pensioners who
    1058
    will derive benefit from the new conditions?
    Mr. Paling: About 7,000 cases will receive increases, at an estimated cost of £105,000 per year.

  BRITISH ARMY

    R.A.S.C. (Chief Clerks)
    Mr. Douglas Marshallasked the Secretary of State for War what is the usual pay for a temporary civilian chief clerk of a combined supply depot; what are his duties and hours of duty; what is the amount per year of rationed goods for which he is responsible; and what are his overtime rates.
    The Secretary of State for War (Mr. Bellenger): I assume that the hon. Member is referring to a command supply depot, R.A.S.C. A civilian chief clerk at such a depot may belong to one of two grades, according to the size and responsibilities of the depot. His pay varies according to his grade, age and length of service, and the location of the depot. Assuming that he is age 25 or over, as he normally would be, the minimum of the London scales is 102s. a week, and the maximum 130s. He is responsible for the control and supervision of all clerical duties at the depot. He works a 44-hour week. The chief clerk is not responsible for the supplies handled by the depot, this responsibility resting with the commanding officer. His overtime rates are time and a quarter for hours in excess of 44 a week, and time and a half for Sunday duty.

    Overseas Tour
    Mr. Geoffrey Cooperasked the Secretary of State for War the length of the tour overseas which is served by our Forces stationed in Japan.
    Mr. Bellenger: Non-Regular soldiers are still serving under Python rules, which make them eligible for repatriation after three years. The postwar overseas tour for Regular Army personnel is now three to three-and-a-half years. This period may be served in more than one overseas station, and not necessarily exclusively in Japan.
    Mr. Cooper: Is my right hon. Friend aware of the disparity between the British Forces and the Dominion Forces, who serve alongside of them? Will he give

    1059
    the matter further consideration to see if anything can be done to make their position similar?
    Mr. Bellenger: I do not think the conditions are similar as between the British Forces and the Dominion Forces, but I can hold out no hope of a reduction in this period at the moment.
    Mr. Cooper: Does it not seem rather unfair to our men, who see the Dominion Forces going home in two years' time instead of three?

    Germany (N.A.A.F.I. Prices)
    Sir Robert Youngasked the Secretary of State for War whether he is aware of the dissatisfaction among Service families in B.A.O.R. at the prices charged by N.A.A.F.I. families' shops; if he will cause an investigation to be made so that an explanation will be given why Allenbury's Food should cost 6s. 3d. and Bisto 5s. against, approximately, 4s. 6d. and 2s., respectively, in this country; and why other articles of diet, etc., cost more than 50 per cent. over home prices.
    Mr. Bellenger: I am aware that there have been complaints by Service families in Germany about the prices in N.A.A.F.I. family shops. The matter has been investigated, and the prices charged are considered to be justified. As regards the particular examples referred to in the Question, my hon. Friend appears to have been misinformed: Allenbury's Foods Nos. 1 and 2 cost, in B.A.O.R., 4s. 6d., and No. 3, 2s. a tin, which are the current prices in this country; Bisto costs 8½d. for an 8 ounce pack compared with 7½d. for a 7 ounce pack in this country. Although it is true that some goods cost more than in the United Kingdom, others cost less.
    Sir R. Young: Is the right hon. Gentleman aware that I have a long list of articles sold by N.A.A.F.I. at prices which are 50 per cent. and more higher, I believe? Will he look into it, if I send it on to him?
    Mr. Bellenger: Yes, certainly.
    Mr. Walkden: Is it not time we reviewed this whole issue, whether civilians serving with the B.A.O.R. men should be subsidised by the other customers of N.A.A.F.I.—the men of the Armed Forces? If we are going to adopt a policy
    1060
    of serving babies and mothers over there, should not the Treasury subsidise them, and not the troops, who have to find this out of their own pockets?
    Mr. C. S. Taylor: Can the right hon. Gentleman say why N.A.A.F.I. are excluded from the Maximum Price Orders produced by the Ministry of Food?
    Mr. Bellenger: I do not think the conditions are quite the same. On the whole, the prices are fair as between command and command.

    Personal Cases
    Mr. Dribergasked the Secretary of State for War if he will review specially the court martial proceedings in the case of 6085733 Private R. Rogers, No. 3 M.P. and D.B., Austria, C.M.F., who, after five years' continuous overseas service and 73 days under close arrest, was sentenced to 18 months' detention for being absent without leave for 25 days and escaping after his confinement in the guard room; and if, in view of the much more lenient sentences awarded by the same military authorities at about the same time for comparable or more serious offences, he will quash or reduce this sentence.
    Mr. Bellenger: Private Rogers was tried by field general court martial in Austria on 3rd February, and was found guilty of absenting himself without leave from 28th October, 1946, until 21st November, 1946, and, when in arrest, absenting himself without leave from 26th November, 1946, until 27th November, 1946. He was sentenced to 18 months' imprisonment with hard labour, but on confirmation this was reduced to 12 months' imprisonment with hard labour. Of this sentence Private Rogers can earn one-third remission. This soldier was 73 days in close arrest before trial, of which 20 days were spent in hospital. He has previously been convicted of absence without leave 27 times, and has convictions for other military offences. His sentence is due for review in Austria in May next, and in view of his record, and the remission of sentence which has already taken place, I am not prepared to consider any further mitigation until the next review.
    Mr. Gammansasked the Secretary of State for War if the Territorial Army and Air Force Association is under obligation to find alternative accommodation for Mr. T. Gray, late caretaker at the Terri-

    1061
    torial Association Headquarters, North Road, Highgate, who has received notice of eviction from his quarters; and what action he proposes to take to prevent this man being put into the street.
    Mr. Bellenger: No, Sir. Mr. Gray's employment is being terminated, and he has, therefore, been given notice to quit. I regret that I am not prepared to ask the Association to withdraw the notice, as the quarter is required for a permanent staff instructor.
    Mr. Gammans: Do I understand that the Socialist Government are prepared to do what they would, quite rightly, not allow a private landlord to do, and turn a man and his family into the street, without any obligation to provide alternative accommodation for them?
    Mr. Bellenger: The two cases are not comparable. Tenants know the position when they take these quarters. But, at any rate, I have got to house, sometimes, far worse cases that are in the Army, than that of some of those occupying the premises.
    Mr. Gammans: But if this man can get no alternative accommodation, are the Government going to put him and his family into the street?
    Mr. Bellenger: I have great sympathy with them; but I have also great sympathy with those who are now in the street and have no place to go to. I have to look after them.

    Training
    Sir John Graham Kerrasked the Secretary of State for War if he proposes to continue the system of training elaborated in the battle schools and other training units during the recent war, in view of its importance, as supplementary to the ordinary system of school and adult education for the training of the citizen.
    Mr. Bellenger: I am in some doubt as to the implications of the last part of the Question. As regards military training, however, methods which have proved valuable during the war will, as far as is practicable, be continued in peace.

    General Duties Dress
    General Sir George Jeffreysasked the Secretary of State for War whether colonels of regiments or senior regimental officers were consulted before it was de-
    1062
    cided not to adopt red as the colour of the new general duties dress of the infantry of the line; what is the estimated expense of red as compared with blue or green; what grounds are there for doubt as to the popularity of red as a walking out dress for regiments whose uniform has always been red; and whether he will give further consideration to this matter.
    Mr. Bellenger: When this matter was under consideration the views of a large number of officers and men of all ranks, and drawn from all branches of the Army, were obtained. The estimated cost of red cloth is approximately twice that of blue or green. The general public has not seen the Army, apart from Household Troops and regimental bands, in scarlet for over 30 years, and it was felt that this colour would no longer appeal to popular opinion. [HON. MEMBERS: "Hear, hear."] I mean, in relation to the Army, of course. I regret that I cannot now reconsider the matter.
    Sir G. Jeffreys: Is the right hon. Gentleman aware that, when these inquiries were being made, it was with the utmost difficulty that anybody was found to go to give evidence about this, as the greater part of the Army, and the whole of the Regular Army, practically, was abroad; and that, in fact, many regiments were not asked their opinions at all? Is he further aware that red is the historic colour of the British infantry? Are not this Government believed to favour that colour? Is the right hon. Gentleman further aware that the red of the British infantry in the past was not scarlet, but was a darker red? Is there any reason why that could not be adopted for red coated regiments, which are the oldest regiments in the Army?
    Mr. Bellenger: I naturally have predilection for red, and particularly in relation to the Army. It might interest the hon. and gallant Gentleman to know that I was one of the exceedingly small minority who did like the idea of red; but the reasons which I have given in my answer outweighed all that I could put before the appropriate quarters. The new dress has now been approved by His Majesty.
    Mr. Manningham-Buller: Are we to understand that green will be available to the regiments that require it?
    Mr. Bellenger: Yes, Sir, speaking from memory, I think the Rifle Regiments will have green.
    Mr. Sydney Silverman: May I ask the right hon. Gentleman whether, in view of what he said about the taste of the public in colour, he will correct any prejudice of the Imperial General Staff by also consulting Transport House?
    Sir Ronald Ross: Now that it is possible to get authoritative regimental opinion, which has not always been invited, will the right hon. Gentleman have the matter reconsidered by a really representative committee before this traditional and glorious dress of the British infantry is finally discarded?
    Mr. Bellenger: The answer is, as I have said, that His Majesty the King has given his approval to the new colour. The House is not to imagine that representative opinion in the Army was not consulted before this decision was taken.
    Mr. Gallacher: May I ask the Minister if it is not the hostility of M.I.5 that has been at work?
    Mr. Bellenger: I feel sure that the hon. Gentleman will be pleased to know that M.I.5 were not consulted at all.
    Sir G. Jeffreys: Will the right hon. Gentleman go further into this question of those who have been consulted in this matter? Will he accept from me the statement, in regard to one regiment with which I am connected, that we were asked to send a sergeant, and that it was with the utmost difficulty that we found anybody who was available who knew anything about the peacetime Army? Will he also ascertain if that was not the case with many other regiments?
    Mr. Bellenger: The hon. and gallant Gentleman will know that the investigation was undertaken by a well-known general, but I can hold out no hope whatever of this matter being reopened, as the decision has been taken.

    Pensions Commutation
    Mr. Collinsasked the Secretary of State for War if, in order to assist ex—Regular soldiers to start a new career, he will give them the option of commuting part of their long service pension into a lump sum payment.
    Mr. Bellenger: A service pensioner has already the opportunity of commuting a portion of his pension for an immediate lump sum, if he wishes, under the conditions set out in Article 1174, Pay Warrant, 1940, if he can satisfy the Commissioners of the Royal Hospital, Chelsea, that it would be a distinct and permanent advantage to him to do so. Applications for commutation should be addressed to the Commissioners.

    Prisoners of War (Thefts)
    Lord Willoughby de Eresbyasked the Secretary of State for War whether claims can be submitted to his Department for goods stolen or damaged by German prisoners of war from prisoner-of-war camps; and what is the correct procedure for submitting such claims.
    Mr. Bellenger: In cases where it is alleged that goods have been stolen or damage caused by prisoners of war, the claimant should immediately report the matter to the commandant of the prisoner-of-war camp concerned.
    Lord Willoughby de Eresby: Is the right hon. Gentleman aware that, in my own constituency, there are two cases of farmers who have recently had sheep stolen by German prisoners of war? Surely, the farmers should be able to get some compensation?
    Mr. Bellenger: I am quite prepared to look into that case.

    L.I.A.P.
    Mr. Thurtleasked the Secretary of State for War if he will make clear to officers commanding units in the M.E.L.F. that home leave due to personnel under their command is not conditional on their undertaking an extended period of service.
    Mr. Bellenger: There is no question of L.I.A.P. being conditional on an individual undertaking an extended period of service. The regulations in the Middle East for L.I.A.P. are that in order to be eligible, a soldier must have served overseas for a period of 12 months, and have a minimum of four months to complete on return from leave before becoming due for Python or release. There is, however, nothing to prevent a man who is barred by the four months rule volunteering to extend his service in order to make himself eligible.
    Mr. Lipsonasked the Secretary of State for War why leave has not been granted to men in Group 63 stationed in Singapore though it has to Groups 61 and 62 and is to be to Group 64; and if he will remove this anomaly.
    Mr. Bellenger: One of the conditions of eligibility for L.I.A.P. is that the soldier must have at least four months useful service to complete on return from leave before he becomes due to embark for the United Kingdom to be released. To comply with this condition, overseas commands have had to estimate when later groups are likely to be released in order to decide which groups must be excluded from L.I.A.P. drafts. I am not aware which groups are being excluded in South East Asia from drafts after this month, but the information is being obtained by cable and I will write to the hon. Member.
    Mr. S. Silverman: On a point of Order. Is it not the rule of this House that answers should be given in the English language? Can we not know what is L.I.A.P.?
    Mr. Speaker: I really did not hear what the hon. Gentleman was saying.
    Mr. Bellenger: Hon. Members will know that not only in the Army have we had to descend to these abbreviations, and I believe they are not unknown to Transport House. However, L.I.A.P. means "Leave in addition to Python."
    Mr. Silverman: May we be told what is Python?
    Mr. Bellenger: Perhaps my hon. Friend had better see me afterwards, because I think I should only be telling him what he already knows.
    Mr. Silverman rose—
    Mr. Speaker: If the hon. Gentleman has asked the Secretary of State and he cannot answer, and he then asks me, I cannot answer, either.
    Mr. Lipson: Does the answer to the original Question mean that these men will probably be released within three or four months?
    Mr. Bellenger: That is an entirely different question. We have not announced the dates of release for those group numbers.

    Squatters, Fort Walney
    Mr. Monslowasked the Secretary of State for War whether he is aware that squatters in Fort Walney have been threatened with eviction in order to make room for Poles and that the squatters, because of the housing shortage in Barrow, have no other place to go; and whether, in these circumstances, he will secure the withdrawal of the civil proceedings which have been commenced against them, including the claim for £100 damages in respect of alleged trespass.
    Mr. Bellenger: I am aware that proceedings are being taken to evict these squatters. It is, however, not the intention that the fort should ultimately be occupied by Poles, who are there only temporarily, pending occupation by Coast Defence personnel. The presence of emplaced guns with ammunition and explosives is a further reason why the squatters cannot be allowed to remain. I regret, therefore, that I am not prepared to intervene. My Department has however, offered some surplus huts as alternative accommodation

    Ammunition Dump, Perthshire
    Mr. Snaddenasked the Secretary of State for War in regard to the ammunition depot in Perthshire what steps he proposes taking to accelerate the present slow and falling rate of removal of ammunition and explosives.
    Mr. Bellenger: The removal ammunition has inevitably been slow during the past few months because of transport difficulties. Every effort will be made with the arrival of better weather to dispose of the ammunition quickly. Speed must not, however, be attained at the cost of safely, which overrides all other considerations.
    Mr. Snadden: Is the Minister aware that, at the present rate of removal, it will be April, 1951, before we get rid of these ammunition dumps, and will he do something to expedite the matter?
    Mr. Bellenger: I will do my best, but there are considerable difficulties which we have to overcome in all parts of the country in removing the huge stocks of ammunition built up during the war.
    Colonel Gomme-Duncan: Can the right hon. Gentleman say whether the Perth-shire ammunition dump is being moved as quickly as those in other parts of the country?
    Mr. Bellenger: Yes, Sir; I should think so, generally speaking.
    Mr. Stephen: Is the right hon. Gentleman aware that Perthshire has a much greater abundance of this ammunition than any other part of the country?
    Mr. Bellenger: The hon. Gentleman has, in his Question, given the answer to it. It is because we have such a large amount of ammunition there that it takes longer to clear.
    Mr. Snaddenasked the Secretary of State for War to what extent the civilian watchmen employed at the ammunition depot in Perthshire are subject to supervision; what record is maintained of the hours of beginning and ending each tour of duty; and what reports are submitted by these watchmen of their patrols or of the state of the dumps in the area of their watch.
    Mr. Bellenger: Civilian watchmen at this depot are periodically visited during their tour of duty by the orderly officer and orderly warrant officer. All watchmen are signed on and off duty in the presence of an officer and a record is kept of duration of each tour. A certificate is signed by all watchmen coming off duty as to the time of each check made and any irregularities arising during their tours.
    Sir Waldron Smithers: In view of the importance of guarding this ammunition, will the right hon. Gentleman ask M.I.5 to see that none of these watchmen are Communists?

    Re-enlistment (Rank)
    Mr. Snaddenasked the Secretary of State for War in reference to the campaign to attract ex-Servicemen into the Army on a Regular engagement what regulations have been issued to govern the acceptance of former war-substantive warrant officers Class 1; whether he is aware that former warrant officers Class 1, of exemplary character are normally offered re-engagement in the rank of corporal with transference to another corps from that in which they previously served; and whether he proposes to take
    1068
    any action to make such offers of re-engagement less humiliating and more attractive.
    Mr. Bellenger: A former soldier, including a warrant officer, who has been released and wishes to re-enlist in the Regular Army, is enlisted in the lowest rank. Before signing on, he is offered the re-grant of the highest war substantive rank, up to that held by him before release, for which there is a vacancy in establishment. If there is no vacancy in his own corps, he may be offered re-enlistment in another corps under the same conditions, except that in this case the re-grant of rank is governed by his experience of the duties of that corps.
    As regards the last part of the Question, once a soldier has accepted his release, it is not within my power to guarantee him the re-grant of former rank irrespective of whether vacancies exist or not. Such a guarantee is, however, given to a soldier who, whilst still serving, applies to re-enlist on a Regular engagement, since in this case the vacancy would not have been filled by promotion.
    Mr. Snadden: Arising out of that reply, which was rather complicated and difficult to follow, will the right hon. Gentleman look into the case of a young regimental sergeant-major who applied for re-entry into the Army, and was offered the rank of corporal?
    Mr. Bellenger: If a soldier pleases himself, goes out of the Army and takes release leave, and then wants to come back, he does not necessarily come back in the same position as that which he left.
    Mr. Snadden: But men are being asked to come back.

    Viscount Montgomery's Book
    Mr. Vaneasked the Secretary of State for War how many copies of "Normandy to the Baltic," by Field-Marshal the Viscount Montgomery, were printed in Germany by the Printing and Stationery Service, B.A.O.R.; what purpose was served by so publishing an edition for private circulation; and what was the cost to the public.
    Mr. Bellenger: Five thousand five hundred copies were printed in Germany. The main object of the edition was to present for study by the officers of the Rhine Army a factual account of the part

    1069
    played by 21st Army Group in the conquest of Germany. But, in view of the educative value of the volume, a wider circulation has been arranged to training establishments, General Staff reference libraries and officers' mess libraries, so that all officers of the Army may study this campaign. The cost of the edition was approximately £1,570, of which mere than half represents material and labour supplied from German sources.
    Mr. Vane: Will this book be republished as a training manual or can it only be bought through the retail trade?
    Mr. Bellenger: As to buying the book, I shall have to pay for it if I want a copy. I have not received a gift copy. But I have not heard that it is to be printed as a training manual.
    Sir W. Smithers: Can we get away from the idea of "I shall have to pay for it"? Is it not the taxpayer who has to pay?

  POLISH SOLDIERS (DETENTION)
  Mr. Dribergasked the Secretary of State for War how many members of the Polish forces are held in detention under his authority, such detention being illegal, pending the passing of the Polish Resettlement Bill; and for how long, for what offences, in what places and under what conditions each of them has been detained.
  Mr. Bellenger: According to the latest figures available, 13 members of the Polish Forces in this country are serving sentences of detention, or imprisonment. The majority are in the Military Detention Barracks, Gillingham, where they are detained under the same conditions as British soldiers serving sentences. I am sending my hon. Friend details of the offences for which they were convicted, and the sentences awarded in each case.
  Mr. Driberg: Is my right hon. Friend aware, and could he say for how long he has been aware, that this detention is in itself quite illegal, and that these men could be released at once if they applied for writs of habeas corpus?
  Mr. Bellenger: I do not think any useful purpose will be served by going into the arguments discussed when the Bill was before the House.

  NATIONAL FINANCE

    P.A.Y.E. Forms
    Lieut.-Colonel Kingsmillasked the Chancellor of the Exchequer whether it is necessary to send out 19 forms, weighing over 7 oz., in order to assess Pay As You Earn for a gardener; and if he will take steps to ensure that both the number and bulk are cut down in future.
    The Chancellor of the Exchequer (Mr. Dalton): No, Sir, and if the hon. and gallant Gentleman will let me have particulars of the case he has in mind, I will inquire into it.
    Lieut.-Colonel Kingsmill: Is the right hon. Gentleman aware that since I put down my original Question, I have had another example in which 22 forms were sent out in two cases of P.A.Y.E.? Is he aware that in the first case the gardener was an old age pensioner earning 36s. a week and, therefore, not subject to Income Tax?
    Mr. Dalton: That makes it all the more important that the hon. and gallant Gentleman should send me the particulars, so that I may look into them, and see how the mistake—which it certainly is—was made.
    Mr. Keeling: Is the right hon. Gentleman aware that these ½-lb packets are being distributed on a very big scale to people who have only a single employee? Could not a much simpler way be found of telling such people what their liability is?
    Mr. De la Bère: Is the right hon. Gentleman aware of the futile and fantastic waste?

    Imperial Tobacco Company (Issue Proposal)
    Mr. Bowerasked the Chancellor of the Exchequer on what grounds the, C.I.C. refused the application of the Imperial Tobacco Company, Limited, to issue new share's on terms which would have brought its Ordinary dividend more into relation with the real capital employed in the business; and if there has been any change in Treasury policy since his instruction to the C.I.C. last August authorising them to exercise their discretion in approving prices of issue.
    Mr. Dalton: Because such an issue would have been inconsistent with His

    1071
    Majesty's Government's policy regarding bonus issues. No new instructions have been issued since last August?
    Mr. Bower: Is it not a fact that the Chancellor is opposed to this issue, and others of a similar character, mainly because if they were made he would no longer be able to claim that these companies pay enormous dividends on their capital?
    Mr. Dalton: No, Sir, but if the companies pay out the same sum of money in dividends nominally on a larger capital the rate may be lowered, and the public thereby deceived.
    Mr. Assheton: Will the right hon. Gentleman look at the matter again, and see whether the instructions to the Capital Issues Committee are not in need of modification, in view of the changed circumstances?
    Mr. Dalton: In this case the margin was very wide indeed. It was proposed to issue for the price of £1 a share for which the market price was £7 15s. That is much too wide.
    Mr. Assheton: Would it not be wiser to give the Committee instructions to deal only with the desirability of making the issue, and not interfere with the discretion of the company as to the price of the issue?
    Mr. Dalton: I think this kind of discretion should be allowed.
    Sir John Mellor: Will the right hon. Gentleman agree in principle that it is desirable that the issued capital should be brought into relation to the capital employed in the business?
    Mr. Dalton: It must all depend on the issue proposed to be made.

    Disused Vehicles (Taxation)
    Lieut.-Colonel Dowerasked the Chancellor of the Exchequer if he will consider granting remission of motor taxation in the cases where transport firms have been unable to operate their vehicles for several weeks owing to roads being impassable through the exceptionally bad weather conditions.
    Mr. Dalton: No, Sir. This would be quite impracticable.
    Lieut.-Colonel Dower: Is the Chancellor aware that in the case of many small firms there will be a very serious loss? Is it possible to grant a remission for one month?
    Mr. Dalton: I have every sympathy with the people concerned, but this is not an administratively practicable possibility.

    Savings Deposits (Limit)
    Mr. Collinsasked the Chancellor of the Exchequer whether, in view of the tendency for increased savings, and the fact that there is no upper limit for the amounts of deposits in Trustee Savings Banks, he will increase the upper limit for deposits in the Post Office Savings Bank above the present level of £2,000.
    Mr. Dalton: The limits on deposits in trustee savings banks and in the Post Office Savings Bank are the same, and I do not propose to raise them.

    Family Allowances (Civil Servants Abroad)
    Mr. Bechervaiseasked the Chancellor of the Exchequer if any proposal is being considered with a view to making up the loss of family allowances to those civil servants who are in posts abroad.
    Mr. Dalton: Yes, Sir; I have decided that this shall be done, and payments will be retrospective to 6th August, 1946. Details will be published soon.

    Capital Issues (Consents)
    Major Bruceasked the Chancellor of the Exchequer the number and aggregate sum to date of capital issues approved under the Borrowing (Control and Guarantees) Act, 1946, and capital issues since 16th July, 1946, for which no such approval was required; and whether he will give particular totals in respect of each of the above categories, for issues in respect of the capital goods industries, the consumer goods industries and services, excluding the entertainment industry, and the entertainment industry, respectively.
    Mr. Dalton: As the answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Major Bruce: Will my right hon. Friend say whether, broadly speaking, the powers conferred on him under the Borrowing (Control and Guarantees) Act

    1073
    are adequate for this purpose, and to what extent those powers have been vitiated by a growing tendency to effect offers of sale under the London Stock Exchange regulations?
    Mr. Dalton: The answer to the first supplementary question is "Yes, Sir." Up to date, it is quite satisfactory. The second question raises another matter, and perhaps my hon. and gallant Friend will put it on the Paper.
    Following is the answer:

    CAPITAL ISSUES CONSENTED TO BY THE TREASURY DURING THE PERIOD I ST JULY, 1946-28TH FEBRUARY, 1947 INCLUSIVE.

    Number of Cases.

    Approximate Totals.

    Capital goods industries.

    98

    £36,000,000

    Consumer goods and services (excluding entertainments).

    51

    £17,000,000

    Entertainments (film industry, etc.)

    27

    £9,000,000

    Miscellaneous

    145

    £32,000,000

    Total

    321

    £94,000,000

    1. Figures are, so far as possible, for issues Involving new money.

    2. The above figures are for domestic issues only, and also exclude issues by local authorities.

    3. No figures are available for issues made under the £50,000 limit and other exemptions

    Purchase Tax Refunds
    Wing-Commander Roland Robinsonasked the Chancellor of the Exchequer whether he has considered the proposals for a refund of Purchase Tax on chargeable goods held in stock by retail traders as and when remissions or reduction of tax are announced; and whether he is in a position to announce the decision he has reached on the principle involved.
    Mr. Dalton: The hon. and gallant Member will not expect me to anticipate my Budget Statement.
    Wing-Commander Robinson: Does that mean that the right hon. Gentleman is only prepared to do justice to the retail trader once a year?

    Civil Service Claims
    Mr. Errollasked the Financial Secretary to the Treasury to what extent delay in dealing with Civil Service claims for improved pay and conditions is caused by shortage of suitable staff in the appro-
    1074
    priate branch of the Treasury; by how much the staff is below strength; and what steps are being taken to evolve a satisfactory and speedy procedure which will not necessitate the enlarging of the present establishment.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): I have written to the hon. Member on this matter. There has been no avoidable delay in dealing with these claims.
    Mr. Erroll: Does the Financial Secretary realise that the letter contains no reference to shortage of staff? Will he give an answer to that aspect of the question?
    Mr. Hall: Of course there is a general shortage of staff, but what the Government want to do, if possible, is to cut down the staff that is there.
    Mr. W. J. Brownasked the Financial Secretary to the Treasury, in view of the fact that, on 10th December last, Miss A. L. Cowell was informed by the Ministry of Labour that a decision had been taken to re-assess the pay of clerical assistants transferred from the telephonist grade, why, on 11th March, his Department informed the appropriate staff association that a decision on this matter would not be available for a week.
    Mr. Glenvil Hall: I cannot trace this case, but, if the hon. Member will give me particulars, I will make inquiries.
    Mr. Brown: May I supply particulars of the missing case when I recover my missing voice?

  MINISTERS' RESIDENCES
  Sir W. Smithersasked the Financial Secretary to the Treasury how many Ministers are allowed rent-free houses or apartments in Government buildings, or elsewhere; and whether he will give a list of these Ministers, with the accommodation allowed them and the rental value.
  Mr. Glenvil Hall: Residential accommodation is occupied rent-free by the Prime Minister, the Chancellor of the Exchequer, the Foreign Secretary and the First Lord of the Admiralty, and also by the Lord Chancellor in his capacity as Speaker of another place. In all these cases the accommodation consists of a flat or suite of rooms in a building the rest

  1075
  of which is in use for other State purposes: and it would not be realistic to assign a market rental to the residential portion.
  Sir W. Smithers: Is this how the commissars of England feather their nests?
  Hon. Members: Withdraw.
  Mr. Glenvil Hall: I think it is within the recollection of the House and the knowledge of the public that these residences have been in existence for these Government Ministers for very many years.
  Mr. Speaker: Imputations and insinuations of this kind are most undesirable.

  IRON AND STEEL EXPORTS
  Mr. Errollasked the President of the Board of Trade on what basis exports of iron and steel are allocated between individual importing countries.
  Mr. Harold Wilson (Secretary for Overseas Trade): The export quota for iron and steel is not allocated by countries. Manufacturers are free to export their quota to markets best suited to their long-term interests, subject to the fulfilment of essential requirements which are notified to them by the Board of Trade.
  Mr. Erroll: Will the President of the Board of Trade urge manufacturers to send more steel to Canada, which country urgently requires the steel and would pay us in dollars?
  Mr. Wilson: Representations are being made to the iron and steel industries to increase exports to a considerable number of countries. That is being done within the limit of the total supplies of steel available.

  FLOOD DAMAGE RELIEF (GOVERNMENT ASSISTANCE)
  Mr. Dalton: I will, with permission, make a statement on flood damage.
  His Majesty's Government fully realise and deeply deplore the heavy losses caused by the floods to great numbers of individuals and also to local authorities. They are now considering, as a most urgent matter, how they can best help to relieve agricultural and other losses, and
  1076
  also the emergency expenditure of public authorities within their areas. A further statement on this subject will be made next week.
  Meanwhile the Lord Mayor of London is opening a fund for the relief of distress throughout the United Kingdom, and I have informed him that His Majesty's Government will give a lead to other subscribers by contributing forthwith Li million to this fund. It must be the aim of us all, in face of this latest trial, to do our utmost to help our fellow citizens and to make good all damage as soon as we can.
  Major Legge-Bourke: While welcoming the fact that His Majesty's Government have decided to treat this thing on a national basis, may I stress to the Chancellor that £1 million is a drop in the ocean, even in the Fens, and that we must consider far bigger figures than that?
  Mr. Dalton: I am speaking of the action we have already taken. Far be it from me to suggest that it is the end. We are carefully considering how best we can relieve distress.
  Mr. McAdam: Will the Chancellor of the Exchequer take into consideration those districts which were badly flooded in October last year, particularly Salford, where the cost is over £500,000?
  Mr. Dalton: We are looking into the whole matter.
  Mr. Walkden: Will any of this money be made immediately available to help local authorities to provide fuel to dry the homes which have now been drained, and to provide soap for housewives to clean the homes which have been made filthy?
  Mr. Dalton: Local authorities will not run out of money between now and next week.
  Mr. Walkden: No, but they have run out of soap.
  Mr. Awbery: Will the Government produce a scheme next week whereby they will assist those people through a scheme produced by the Government?
  Mr. Dalton: I said that a further statement would be made next week on the subject.
  Mr. Snadden: Will the Chancellor sympathetically consider the case of sheep

  1077
  stocks of the country, which have suffered enormous losses and have suffered a similar disaster? Will he take that into account?
  Mr. Dalton: It is covered by the terms of my answer dealing with agricultural losses.

PRIVILEGE (MEMBER'S COMPLAINT)
Mr. Frank Byers: Mr. Speaker, I desire to bring to your notice a matter which I believe affects the Privileges of a Member of this House, namely, the hon. Member for Rugby (Mr. W. J. Brown), who would have put this matter to you if he had not, unfortunately, lost his voice. With your permission, I will state the facts as briefly as I can, and then ask for your Ruling. When, in 1942, he was elected Member for Rugby, the hon. Member was general secretary of the Civil Service Clerical Association, which he had founded and organised many years before. Upon his election to this House, he relinquished the general secretaryship but agreed to act as Parliamentary secretary to the Association. Under the terms of the agreement drawn up between him and the Association, it was made clear that, while on Civil Service matters he would, of course, do his best for the Association and its members, on general political matters he was to be completely free to speak and vote as he thought right. That document made it clear that for his actions or utterances on matters other than Civil Service ones, he would not be speaking on their behalf, and that they would have no responsibility, as an Association, for what he said or did in his capacity as Member for Rugby. This agreement was endorsed by the annual conference of the Association in 1942. It was circulated to members, and it was published in the Press.
During the last Parliament, difficulties arose about the working of this agreement, and, despite its terms, there were occasions when members of the executive committee brought pressure to bear on the hon. Member for Rugby on matters quite unconnected with Civil Service issues. This was, of course, ultra vires; but the matters were not considered to be sufficiently serious to justify his invoking, the Privileges of the House. After the repeal of the Trade Union Act, 1927, in
1078
the present Parliament, however, matters took a sharp turn for the worse. That repeal made it possible for the Association to affiliate to the Trades Union Congress, and last year it did so, without a ballot of the membership. Many members of the executive committee attended the Trades Union Congress at Brighton. It is not, of course, known what transpired there, but at the executive committee meeting following the conference strong pressure was brought to bear upon the hon. Member for Rugby not to speak or write in a sense contrary to the policies of the Trades Union Congress or the Labour Party.
To this pressure he refused to submit, and reminded the executive committee that he was elected to this House as an Independent, and that the agreement between the association and him clearly divested them of responsibility for his actions on general political matters. And he said that for no consideration, and under no circumstances, would he accept any limitation on his freedom to speak, vote or write as he thought proper as a free Member of this House. The executive committee thereupon determined that, if he would not submit, then the agreement between the Association and him should, if they could contrive it, be brought to an end, and that he should cease to be the Parliamentary secretary to the Association. The officers waited upon him and offered him certain financial compensation if he would agree to terminate the agreement.
What they proposed was subsequently embodied in a letter to the hon. Member for Rugby. The letter made it perfectly plain that what was at issue was not his work as Parliamentary secretary to the Association, to which, indeed, high tribute was paid. It was made plain that it was his political activities which were objected to. He replied to that letter that he had no wish to terminate or alter the agreement; that there were two parties to it—himself and the Association; that he did not regard them as being representative of the Association; and that, further, it would be for the annual conference to determine whether or not it wished to terminate the agreement. At a later stage, he took the opportunity of warning the executive committee that the question of Privilege might arise out of these proceedings. I wish to emphasise this point: the executive committee, at its last meeting

1079
yesterday, decided to table a motion for the annual conference to the effect that it was desirable that the agreement between the hon. Member and the Association should be brought to an end.
I claim that this is a definite act, and the matter is now being raised at the first opportunity. It is not known what will happen at the annual conference, but I ask whether it is proper that pressure should be brought to bear upon a Member of this House by an outside body to compel him to take a certain political line—a line, in this case, quite inconsistent with the basis upon which the Member himself was elected to this House—and that when the Member refuses to comply, the executive committee of that body should then attempt to terminate the agreement with the said Member for his services as an employee of the Association? In discussions at the executive, it emerged that the matters in which the hon. Member for Rugby had offended were his speeches and votes on the Bill repealing the Trade Disputes and Trade Unions Act of 1927; his known and proclaimed views on the closed shop; his alleged views on the subject of "splinter" unions; and his Parliamentary speeches and writings.
I, therefore, ask you, Sir, if you will be good enough to give your Ruling on the question whether this sequence of events does not constitute a prima facie case that a breach of the Privileges of this House has taken place. I ask you to give that Ruling, Sir, on this matter, irrespective of any legal rights or protections the hon. Member may have in respect of the agreement between himself and the Association. What is concerned here is not the personal position of the
1080
hon. Member, which is unimportant and which, it is hoped, will be vindicated by the annual conference, but the issue that an hon. Member should be free to speak, vote, or write as a Member of this House, unsubjected to pressure from an outside body, and free, if he declines to yield to such pressure, from victimisation thereafter.
Mr. Speaker: The hon. Member asks me for my Ruling on this matter, Of course, it must be perfectly clear that I do not say whether the facts as outlined are correct or not. That is a matter upon which I have no knowledge, but it is alleged that pressure has been brought on an hon. Member and, therefore, it seems to me that it is right for me to declare now that I think a prima facie case has been established.
Mr. Gallacher: On a point of Order. How is it possible to say that there is interference with an hon. Member when all the hon. Member had to do was to resign the job of Parliamentary secretary and he would be quite free to carry out his duties?
Mr. Speaker: If the matter is referred to the Committee of Privileges that is a question which, no doubt, they will be able to settle.
The Lord Privy Seal (Mr. Arthur Greenwood): In view of your Ruling, Mr. Speaker, I beg to move,
"That the matter of the complaint be referred to the Committee of Privileges."
Mr. Churchill: On behalf of the Opposition, I should like to support the Motion made by the acting Leader of the House.
Question put, and agreed to.

ORDERS OF THE DAY
  CONSOLIDATED FUND (No. 1) BILL
  Considered in Committee; reported, without Amendment; read the Third time, and passed.

  RURAL HOUSING
  3.44 p.m.
  Captain Crookshank: I beg to move,
  "That this House urges the necessity of immediate action to improve housing conditions in rural areas, both by means of new building and by reconditioning of existing houses."
  If I thought that to do so would be of any use, I should feel very much like asking for the indulgence of the House this afternoon. My right hon. Friend the Member for Southport (Mr. R. S. Hudson) had intended to move this Motion, and it was only late last night that we discovered that he was not well enough to be here. In fact, my right hon. Friend has joined the Minister of Health in a bout of ill-health, instead of engaging the right hon. Gentleman in wordy warfare on this subject across the Floor of the House. So it falls to me to move this Motion, which we have put down only for technical reasons. We thought that the time had come when the House would like to discuss this question of rural housing, but in view of the fact that such a Debate might impinge upon legislation it would have been out of Order on the Consolidated Fund Bill. Therefore, by arrangement, this Motion has been put down in order to widen the scope of the Debate, and for no other reason.
  The Motion is almost platitudinous, of course, in its words. That is for the purpose of opening out the discussion. It urges the necessity of immediate action to improve housing conditions in rural areas, both by means of new building and by the reconditioning of existing houses. It is true that today one of the greatest needs which we suffer is the lack of accommodation in the countryside. I do not propose to include Scotland in anything I say, either in figures which I quote or in the points which I make. I think it is better that if Scotland is to be discussed in this aspect it should be done
  1082
  by some Scottish representative. But if we want a broad picture of the problem dealing merely with the rural aspect of housing, it is a fact that there are today some 60 rural administrative counties and 477 rural district authorities. If one studies these authorities it is quite clear that not all of them are what one would call "rural" in the real sense of the term. A great many are very mixed. For example, in the mining areas the problem for the local authority is more one of houses for miners than of houses for agricultural workers. The estimated number of inhabited houses in the rural areas is about 2,225,000, representing some 17 per cent. of the population. That is the broad picture of the situation as it is now.
  What is required? It is perfectly clear, for one thing, that a great many of the existing houses in rural areas are bad and old. After all, the countryside has existed—[Interruption.] Certainly, agriculture is the oldest of all our industries, and without it we should be in a very sorry way. I do not intend, however, to discuss the woes of agriculture today, serious though they are at this moment. I think it is generally accepted that the agricultural industry requires not only to maintain the number of workers who are employed in it, but considerably to increase the inflow into the industry. I am sure the Parliamentary Secretary to the Ministry of Health will agree with that statement. The figure has been put—and probably it is not very far wrong—that at least 100,000 more workers would be welcome as soon as they could be secured but, of course, part of the difficulty about bringing them into the countryside is the shortage of accommodation.
  Another factor which has to be considered today is that in recent years agricultural wages have risen. They have reached a point—and this is made clear in a report with which I shall deal later on—at which many people believe that there is no longer a case for dealing with special rental arrangements for agricultural workers as such. The economic position of the workers has now been raised so that they can be considered in the same sort of way as anybody else who lives in a rural area and need not be, as the Hobhouse Report says, considered as a class apart. The first factor, then, is the need for more workers in rural areas; the second is that they can now pay

  1083
  economic rents. The third factor which we must bear in mind is the adverse effect of the existing Rent Restrictions Acts. I think everybody who studies this problem would agree with that.
  A committee under the chairmanship of Lord Ridley reported on this subject early in 1945, and nothing has yet been done about it. A big argument—which I will not develop today—can be built up, and indeed is touched upon in the report on reconditioning, of the bad effects which the Rent Restrictions Acts, as they are now and in all their complications, have upon this problem of rural accommodation. That is the background, and those are the three factors to which I would particularly draw attention today.
  On the other side of the picture, what has been done? What have the Government achieved in their 20 months of office? Page 3 of the January Housing Return gives the total figures of permanent houses built as 60,438 and the total number of temporary houses built as 83,719, but if one wishes to break up this figure to see what proportion has gone into the rural areas, one finds on pages 12 and 13 that out of a total provision of 13,133 permanent houses in the rural areas, 4,955 have been erected by local authorities, and 7,790—half as many again—by private enterprise during those 20 months. Of course, 13,000 permanent houses in 20 months in rural areas is nothing to be proud of. It is a very small figure indeed. Yet it must be admitted that the proportion that thee 13,000 has to the total is rather larger than one would probably expect on a purely population basis. I will be fair to the Ministry of Health to that extent and say that it is about five to six per cent, more than would be the population figure; but if one takes into account temporary housing, of course the grand total is very much against the rural areas. If one takes the number of temporary houses erected in the rural areas, which one finds on page 20 of this document, one finds that only 5,000 odd out of 83,000 have been erected. Therefore combining the temporary and permanent houses, we find that only 13 per cent. of the meagre number built by the Socialist Government in the last 20 months have gone into the areas administered by rural authorities, whereas the population in those areas is 17 per cent, of the total. I know no particular reason why tem-
  1084
  porary houses should not have gone into the rural areas just as much as permanent houses—
  Mr. Gallacher: Compare that with your 20 years.
  Captain Crookshank: Worse still is the regrettable fact that so far 191 rural authorities have not completed a single permanent house, and 34—or 7 per cent. of the total—have not even started building a permanent house. That shows a very serious position. I am sorry to trouble the House with so many figures, but they are necessary to give the picture of what is being done. Another figure I should mention is that out of the 13,000 or so permanent houses which have been built, only 607 have secured the special grants to make them available for agricultural workers—only 607 that can definitely be identified as destined for the use of agricultural workers.
  I see that hon. Gentlemen have put down an Amendment in which they seek to call attention to what happened before the war. There again it is very difficult to identify what proportion of the houses built in the rural areas did in fact get occupied by agricultural workers, but of course vast numbers of houses were built in the rural areas between the wars—nearly 900,000, though there is no way of finding out how many were used by agricultural workers as contrasted with anybody else, except that any which were reconditioned under the reconditioning Acts were specifically used by agricultural workers. A figure of somewhere about 23,000 can be quoted there.
  That is the position, and we would like to know what immediate steps the Government will take to improve it, because it is not good. So far from taking immediate steps to improve it, all the evidence I can get hold of is that they are cutting down the proposals which have already been made by rural authorities. Instead of letting even those go ahead as fast as they can, they are cutting them down. As to my own constituency, I have a cutting here from a local newspaper in an area which is completely rural except for about four or five villages where a certain number of people live who go into the town to work. There, the Government scheme to ration labour and materials has resulted in the Welton rural district council's quota of houses for those areas being cut down from 124, which they hoped to

  1085
  build, to 70. That is going on all over the country. That is not very encouraging for rural authorities, and I hope that the hon. Gentleman will be able to reassure us on this question.
  A great deal of the trouble has possibly been that too many houses were started in too many areas, without a sufficient flow of building materials being guaranteed for them, and therefore there has had to be a check-back in order that at least some houses could be completed quickly, instead of having endless houses all over the place built only a few feet up. Possibly that is the way in which the whole scheme will be got on the rails again. I hope the Government will get the scheme on the rails. I am only sorry that it should have been derailed.
  At the moment what my hon. Friends wish to stress, as I do too, is that as far as we can judge—the Parliamentary Secretary to the Ministry of Agriculture and the Secretary of State for Scotland in his capacity as the Minister for Scotland will probably agree—we fear that there will be grave difficulties during the coming months, not only this year, but into next year and possibly the year after, on the whole of the question of food production in this country. Certainly the catastrophic damage first of all of the snow and the consequent large number of deaths in flocks and herds and livestock generally, and then the disastrous floods which have followed, makes the matter even more urgent than we had foreseen though we had thought there would be difficulties very soon in regard to the whole question of food production.
  In order to get the maximum of production, it is quite obvious that we have to try to direct—perhaps, I should say "induce," for that is the technical word—to secure the greatest possible accretion to the agricultural population. One of the prime necessities is to find roofs for them. What can the Government do? Obviously one of the things it can do—and I am still not satisfied that they have sufficiently explored the problem—is to use the camps which still exist. The Government have let the aerodromes and military camps all over the country just go to wreck and ruin. First of all the doors are taken away. Then the windows are taken away. Then the equipment is taken away most mysteriously—of course, no doubt to the advantage of
  1086
  the takers-away. That accommodation could have been made use of, and it is still possible to make use of it.
  I know that there are two in my own constituency which are being made use of to some extent, but a great number are not, and I am sure that is true of other places. I beg Ministers to look at this question to see whether they cannot get some form of temporary accommodation in that way.
  The second thing I would ask is whether the Minister cannot pocket his pride and look at the ratio of four to one to which he has so long been wedded. The House will remember that he was asked on what grounds he had selected that proportion, and in March of last year, he said of the ratio:
  "It certainly is not a figure based upon any strict statistical inquiry … but because it seems to me"—
  Because it seemed to him—
  "to bear the proper relationship to the social situation of most of our people."—[OFFICIAL REPORT, 6th March, 1946; Vol. 420, C. 454.]
  As a matter of fact, some investigations were made before the war—made for quite another purpose—and in the test which was then taken it was found that something like 60 per cent. of the houses which were inhabited in the country were either owner-occupied or had been erected without subsidies. To bring it vividly before hon. Members, and bearing in mind that this is the first day of flat racing, I would say that before the war the proportion was three to two on the private builder and now it is four to one against him. I hope the Minister will look at the problem again, if not for the nation as a whole at least from the point of view of rural areas, because there are all sorts of outlying districts where a private builder, or a landlord instructing a private builder, might be able to build one or two cottages where it would not be so easy for the rural authorities to do it. There is a good deal of evidence that the Minister might get some increase there if he were not so stubbornly in favour of the four to one ratio. That is one thing which he could do, I submit.
  Another thing he could do is to allow more labour for smaller houses. Here is a problem which is going to be universal, it is not necessarily a rural problem only. With the increase in the expectation of life there is a case for building quite small houses for single persons or old couples.

  1087
  In my constituency the local authority have been doing it for years. In that way they release accommodation which people would go on using if smaller houses were not provided. I had a case the other day where permission had been refused to build four bungalows with the object of housing three persons and one couple. If that had been done the four houses out of which they would have moved would have provided accommodation for something like 27 persons. The old people go on living in those houses, but would be satisfied to move into smaller houses. I do not know what the Minister can do about that, but I am trying to make suggestions to see whether we can get more agricultural workers in the rural areas, and those are two suggestions which do merit investigation.
  Mr. Gallacher: Could I ask a question?
  Captain Crookshank: No, I am going to make my speech, because, as I said at the beginning, I am making it at short notice, and I am not prepared to be interrupted all the time. The Communist Party can make its own speech in its own time if it is lucky enough to be called. The third point I wish to put to the Minister concerns temporary houses. As I have pointed out, the proportion of temporary houses going into the rural areas is very small indeed, but there was one type which, as I understand it, was devised specifically for the rural areas and which appears in the Housing Return as the Airey rural house. Very few of them have been completed, and not many are under construction, but I understand that even so the Government have now altered the specification.
  The Parliamentary Secretary to the Ministry of Health (Mr. John Edwards): Is the right hon. and gallant Gentleman talking about permanent houses or temporary houses, because the Airey house is a permanent house?
  Captain Crookshank: I was, as a matter of fact, talking about temporary houses, because I thought all those fancy names applied to temporary houses. I stand corrected and I apologise, but it does not alter my point. My point was that I understood that the specifications had been altered, and that, therefore, there is fresh delay in putting up those
  1088
  houses, and I have a case of one rural district in the county adjoining mine where 50 of these houses were ordered because the local authority were satisfied but the Ministry has cut the number down to only seven. That is not a very good idea.
  I hope the Minister will look at these three specific points: The possibility of changing the ratio, the possibility of a changed attitude towards the erection of smaller houses, and the whole question of the Airey house as well as the question of diverting more temporary houses into the rural areas. This last suggestion was accepted as being wise policy in the case of the mining areas. The provision of more houses in the mining areas was one of the incentives which the Government said they would adopt in order to get more coal, and I do not see why the same argument should not be applicable to the rural areas in view of the approaching crisis in food production.
  Having dealt with the erection of new houses, I would now say a few words about the reconditioning of houses, because here we have the advantage of the publication recently of the Report of the Hobhouse Committee which dealt with this problem. The history of this Committee is very strange and I do not understand the attitude of the Government towards it. The question of reconditioning houses was raised very early in this Parliament. In fact, in the Debate on the Address, as soon as the Government came into power, we had a discussion about it, and the Lord Privy Seal said on 17th August:
  "We shall deal with the question of rural houses as part of the general housing campaign … I agree about reconditioning. It is vital. It is an immediate contribution. I say we must take it in our stride as part of the general housing programme."—[OFFICIAL REPORT, 17th August, 1946; Vol. 413, c. 257.]
  Immediately after that the Hobhouse Committee was appointed. That was in September of that year. Its terms of reference were enlarged in October, and it produced an Interim Report as early as January last year, in which it was stated that apart from other considerations reconditioning was both necessary and urgent. That was reported to the Minister in January, but he did not disclose the receipt of the Report for over two months. Having told us on 28th March that he had received the Report it was not until the

  1089
  end of May that he said he was going to await the full Report before taking action. The Committee, which included three hon. Members of this House, went on with its labours and signed a Report on 25th September. There was a minority Report, a minority of one, signed on 12th October. Yet this Report did not see the light of day till 27th February. Why, I do not know, but I hope the Minister will give us an explanation, because here was something which was urgently wanted. It was a question of great importance to know whether or not it would be wise to recondition houses. The Committee, with one exception, came to the conclusion that it was necessary and desirable. It had come to that conclusion in its Interim Report as long ago as January, 1946, and Came to the same conclusion in its full Report of 25th September. We did not hear anything about it until February, and all we have been told so far is that the Minister hopes to announce his intentions before the end of this Session.
  As the Report involves legislation, that means that nothing is going to be done this Session, yet the whole tenor of the Report is that it is not only possible to recondition but that reconditioning would be a considerable contribution to the solution of the housing difficulty. I do not put it too high—it would be a considerable contribution. The reason why the Committee say that is that after taking considerable evidence they have come to the conclusion that there is labour available for this purpose. In the housing problem as in other matters we are always up against shortages of labour and materials but this Committee have come definitely to the conclusion that there is labour available for this purpose. As one of their reasons for saying this they point out that the very small builder who exists in villages and small towns is not really equipped for taking on large housing contracts, but in the very nature of his experience he is conversant with the job of repairing and altering houses and, therefore, with the necessary help and encouragement he could go ahead with reconditioning and altering, although not prepared to take on contracts for new building. The evidence about this is to be found in paragraph 18 of the Report, and it seems to be conclusive as to the value of the contribution these small builders can make, particularly when it is remembered that the small builder—a man and
  1090
  his son, for example, or a man and his nephew—are to all intents and purposes immobile. If they live in a far away village, and I daresay that is the case in many places in Scotland, as it certainly is in the remoter parts of my constituency, they cannot be counted upon as being available to do their bit in building schemes in places 20, 30 or 40 miles away. Having found out from the evidence that the labour is available the Committee come down wholeheartedly in favour of full reconditioning.
  Having put forward that argument, I will leave my hon. Friends to develop the point, but an argument which appeals to me is that by bringing these existing houses up to a higher standard it is possible to raise the general level of accommodation throughout the countryside. New houses are put there, and we will grant for the sake of argument that they are very good houses, but at the same time all those other houses exist there, some of them perhaps 20 years old, and not up to the modern standard, because we are improving all the time, but something could be done to bring them up to that standard. Other houses are older still and more needs to be done to them. Unless something is done all along the line to raise the standards of the houses which are already there, the people who live in them can never hope to get the amenities and improvements which are being provided in the modern houses erected for people exactly like themselves and on the same economic level. Therefore it is a matter of common justice between one citizen and another. If a reasonable way of doing this is devised, there is everything to be said for reconditioning and bringing up to standard as many houses as possible. The Committee argued the case so well that it is a pity to try to pick out one or two plums. Every Member will, I hope, do his best to read it for himself.
  The purpose that we had in mind in putting forward this Motion was to ask what the Government intend to do about the present situation. Are the Government ready to announce a policy today? The Minister presumably received this Report some time in October, after the signature of the minority Report. He may have received it before then. One remembers that the minority Report was signed by an hon. Member who is not unknown to him. Surely by now, the

  1091
  Government ought to have come to a conclusion whether to go ahead with this matter or not. If they are going ahead, I ask them whether any steps are being taken to recondition houses, ahead of legislation. We know that administration, especially in regard to housing, can be stretched in many directions. I hope that we can have satisfactory answers to the questions which I have asked in this Debate. If we get them, the Debate will have been worth while.
  Now I would like to recapitulate. We find that the Government have not done what they might have done in regard to housing in the rural areas. During the 20 months in which they have been in power the figures of housing completed have been tilted against the rural areas. On the other hand it is admitted that we must try to get into the rural areas as many people as we can in the interests of increasing the agricultural production. Some of those people might well be put into houses or camps for a short time to take the place of returning German prisoners of war. In the meantime, will the Government see to it that they ease their programme of permanent building by considering the development of smaller houses, wherever it can be shown that the smaller house will release accommodation in a larger house? Will the Government also announce their policy with regard to reconditioning? If they agree that reconditioning is the right line for the future, can they do anything by way of short-term administrative action to forestall legislation?
  Those are the main questions which I have in mind to put to the Minister. I would again say how sorry I am that we should have initiated this Debate in the absence of the Minister of Health himself, but urgent problems cannot always wait. We did hope that by now the right hon. Gentleman would be well enough to be back with us. Certainly the Parliamentary Secretary is capable of dealing with the matters which I have put before him. Nothing that I have said today has been startlingly new. [HON. MEMBERS: "Hear, hear."] It would have been new, if there had been some development, and if the Government had done something. When I say there is nothing startlingly new in it, I mean that my speech today is almost an echo of a speech which I made 12 months ago. Instead
  1092
  of the Government going into action on this matter, they have gone down very much since then, in this respect as in so many others.
  4.20 p.m.
  Lady Megan Lloyd George: I am sure that we all regret the absence of the right hon. Gentleman the Minister of Health from this Debate, and the cause of his absence. We shall miss his stimulating presence. The Parliamentary Secretary to the Ministry will, I have no doubt, acquit himself with credit. I am also sorry that the right hon. Member who was to have opened the Debate for the Opposition is absent. But the right hon. and gallant Member for Gainsborough (Captain Crookshank) is always able to fill any breach of any sort at the shortest notice.
  The problem of rural housing is in many respects more acute than the problem of housing in the towns. It is generally recognised that less has been done to catch up with the neglect in the rural areas in the period between the two wars and there is in rural areas a relatively higher proportion of houses built before 1914, compared with the number in the towns. All those facts are very well known to hon. Members in every quarter of the House. We all know what appalling conditions prevail in the countryside, the slum villages, the great parts of the country districts, where the elementary conditions of good housing, water and sanitation do not exist, for instance in my own constituency, and where, in some cases, conveniences and amenities are absolutely primitive. In every village in the Island of Anglesey there are rotten houses which are thoroughly unhealthy to live in. And yet families of children are being brought up today in such dreadful and overcrowded conditions. It is very little wonder that in constituencies like mine maternal and child mortality rates are often as high as they ever have been, and sometimes higher than, in the most congested industrial areas of the country. Unfortunately also the tuberculosis rate has been alarmingly high, despite the fact that this is a very salubrious and healthy part of the world. I am sorry to have to say that although hovels of the kind which I am describing are well known in Scotland and rural England, they are even more common in rural Wales. Every report, every inquiry, that has been made, including the Hobhouse Report and that

  1093
  of my right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), has disclosed that rural housing in Wales is worse than in any other part of the United Kingdom.
  Those conditions, as hon. Gentlemen opposite say in the Amendment which they have tabled, are the result of generations of neglect. There is no doubt of that. Latterly, however, much of it has been the result of the poverty of local authorities. That is a fact which must not be overlooked. Let lion. Members reflect that the product of a penny rate in my constituency or in Merioneth or Montgomery is just under £700. How is it possible, and how has it been possible, for any local authority to embark upon ambitious housing programmes with a narrow income of that size? I welcome the new subsidy provisions which the Government have brought in. They will assist local authorities very materially in the construction of new houses.
  Rural housing has been an urgent social problem for many years. Now it has become something more. It has become an urgent problem of increasing and maintaining our food production. As such, it has become a matter of immediate and vital moment. We talk of the need for attracting new recruits into agriculture—150,000 prisoners of war will be leaving the countryside at the rate of 1,500 per month, and the rate will be greatly accelerated by the end of this year. Those prisoners of war have been living in camps. The Government are saying that to make up for the departure of these prisoners they need 80,000 more people in the industry this year. The Ministry of Agriculture said at an earlier date that they want 100,000 new permanent workers in the industry. Where are those people to live? Apart from the bad housing conditions, there is also an acute shortage of houses. Where are people coming into the industry to be put?
  Mr. Gallacher: Put them into the big houses.
  Lady Megan Lloyd George: It will not he possible to attract 80,000 or 100,000 permanent recruits to the industry unless the Government provide them with decent houses in which to live. They will not be willing to live in the houses in which their forefathers and their fathers have lived.
  I ask the Government, in view of a food situation which is becoming rapidly
  1094
  more critical, whether the same priority cannot be given to agricultural workers as has been rightly given to the miners in the matter of housing. I hope that before the Debate closes we may have a statement from the Government on that very vital matter. I recognise, as every hon. Member must, the hard facts of the situation and some of the difficulties with which the Minister of Health has had to contend in the last 20 months in facing the housing problem. We are up against exactly the same problems in rural as in urban areas. There is not only a shortage of labour, hut an increasing shortage of materials, which is becoming more crippling than the shortage of labour. These are the limiting factors. The fuel shortage has intensified the difficulties. There is no doubt whatever that that is the effect of it. Inevitably it will hold up housing progress. I very much doubt whether the right hon. Gentleman will reach the target which he has set out to achieve this year. I do not see how it can be done.
  Let us look at the White Paper on the housing problem. It points out that the clay industries group — manufacturing bricks, clay tiles, drain pipes, the cement industry and the glass industry—requires the use of coal in very large quantities. The scope for economy of fuel in those industries is very small and the cut in their supplies of coal will have a directly proportional effect upon the volume of output. Those facts are indisputable. Therefore, I am convinced that we shall have to face the possibility that even the limited target set out in the White Paper will not be reached. There is also a serious shortage of timber. That is perhaps the worst bottleneck in the construction of houses. If we cannot increase the supply of timber this year, it will mean that there will be another serious brake on housing progress.
  Where can we get increased supplies? Russia needs all her timber for reconstruction, and has very little, if any, left over for export. We are told that we shall be able to get some supplies from Germany. I wonder whether the Minister will be able to give us any information as to how far negotiations have gone on that. What about Yugoslavia and Rumania? What about the Baltic countries? Why should we not try to penetrate the iron curtain? If we simply sit back and say we cannot penetrate it, we have nobody to

  1095
  blame Out ourselves for our failure. I hope that we shall have some information as to the supplies we hope to get from those countries, or the negotiations which we may be conducting with them, with a view to increasing our timber supplies. What about our own supplies? Have we combed this country for timber? I hope we may be told about that. After all, the number of houses we shall build in the rural areas depends upon these things, and not upon the ratio of four to one between local authority and the private enterprise building. They all draw out of the same pool. I myself take a very different view from that of the right hon. and gallant Gentleman the Member for Gainsborough on this matter, because I feel that the great need of this country is for houses to be built by local authorities. That is the need which was least satisfied during the inter-war period. It is the need which most requires satisfying.
  I would like to say one thing about the shortage of bricks. I believe that last year we were producing about half the number of bricks produced in 1939. Is all available capacity being utilised in this country? My reason for asking is that many months ago I wrote to the then Minister of Works and asked him whether he would consider reopening a small brick works in my constituency. The answer I got was that when there was a local demand for bricks they would reconsider opening it. When one takes into account the fact that there is quite a substantial programme for housing which has already been authorised and indeed begun in the Isle of Anglesey, it seems to be a fantastic answer, and absolutely out of touch with all reality. That was many months ago. The question has been considered and reconsidered, but the brickworks is still not opened. I hope we shall make use of all available capacity.
  I would like to say a word as one of those who signed the Hobhouse Report on reconditioning. I have always thought that hon. Gentlemen above the Gangway have greatly exaggerated the importance of reconditioning. They have always spoken about it as though it were an instrument for revolutionising housing in the country side. [HON. MEMBERS: "No."] That was the impression they have always given me; they have shown a great deal more enthusiasm about it than about the building of new houses. On the other
  1096
  hand, I think it is also possible to underrate the usefulness of reconditioning. I think it could make quite an important contribution—I put it no higher than that—to the housing problem in rural areas and in the present shortage of materials and fuel, reconditioning, which uses far less of both, is of much greater urgency than it was when the report was first presented to the Minister. I do not agree, therefore, with hon. Gentlemen opposite when they suggest that this is a matter which could be postponed or dealt with at leisure when we have the labour for it.
  I agree, and I think we all agree, that new housing must have first priority. There should be no doubt about that. The majority of the Hobhouse Committee, however, were equally convinced that there are small contractors in the villages and small towns, and that there is a reserve of labour, both unsuitable for building new houses but capable of useful employment on reconditioning work now, without any delay at all. We also were convinced that such reconditioning would provide additional accommodation. There is a good deal of confused thinking about reconditioning. There is the condemned house which is only fit to be scrapped, but there is also the old fashioned property which is good, very often substantial, which can be brought up to date, provided with modern conveniences and amenities, and made to compare reasonably with new cottages. I think myself that we cannot put too much emphasis on the need for establishing minimum standards if we are to have reconditioning, the minimum standards set out in the Hobhouse Report, which I think would be as acceptable to hon. Members opposite as it is to hon. Members on this side of the House. I do not believe that a single penny should be spent on adapting a house unless, at the end of reconditioning, it can provide a good, sound and healthy home.
  There are, of course, objections. The hon. Lady the Member for Cannock (Miss Lee) has on another occasion enumerated them. I understand those objections and very largely share them. But what is the alternative? I ask hon. Members opposite to face up quite frankly to that question. The Hobhouse Report said that there are at least 100,000 old fashioned houses in the countryside which could be brought up to a good standard.

  1097
  If those houses are not reconditioned, what will be the position? With the present shortages and the present slow progress in building new houses—and we must admit the slow progress—unless we recondition suitable houses in the countryside we shall in fact be condemning families to go on living in substandard houses for years. That is what we must face up to. I beg the Minister when he comes to reply to make a favourable announcement about the reconditioning recommendations of the Hobhouse Report. The problem of providing houses in rural areas is a social and national problem. I urge the Government to use every and any means at their disposal to cleanse the countryside of conditions which are a reproach to our civilisation.
  4.40 p.m.
  Mr. Asterley Jones: One of the most valuable contributions made towards alleviating the shortage of houses in rural districts so far has been the Airey house, and I should like to congratulate the Ministry and those others who are responsible, on the energy which they have shown in stimulating the production of this valuable type of building. There is however, one disadvantage from which it suffers at the present time. The Ministry has laid down that some, at any rate, of the internal walls of those houses shall be constructed of plaster board instead of something more substantial, and I get complaints from people, otherwise very pleased with the houses, who say that they have to treat them as though they were made of china. A little bit of heavy usage of the wall, and it is gone. It has been said to me that the only people who can afford to live in the plaster board houses are plaster saints, for if you do not behave carefully the wall goes through.
  I understand that one of the objections to using something more substantial is cost, not only in money but in materials. I put it to the Minister that the present grant of £175 payable in respect of Airey houses is not sufficient for a rural authority, because they have very low rate products and simply cannot afford to bridge the gap which exists between the full cost of an Airey house—in proper condition, not plaster board condition—and the cost of an ordinary permanent house on which the subsidy is based. There is a further point on the cost of the Airey houses; is the Minister satisfied
  1098
  that tenders from contractors for their erection are in fact a true assessment of the cost? Is it not a fact that some contractors are nervous, not being familiar with what is involved, and are tendering rather high?
  As has already been said by the hon. Lady the Member for Anglesey (Lady Megan Lloyd George) the most immediate limitation on progress at the present moment, in rural areas in particular and in the country as a whole for that matter, is the timber supply. I think it is true to say that in housing we are at present faced with a series of limitations, some of which are more close to us than others. Even if we push back the timber limitation we shall soon come up against another, but I would like to ask the Minister what progress has been made towards cutting down the amount of timber required even further than it has been cut down already? At the moment I understand that about 1.6 standards, or something of that kind, are used in the construction of the ordinary type of house. Suppose concrete were used to a greater extent. I understand it is possible to cut down considerably the amount of timber used, for instance, on the first floor, by the use of concrete. There again one would very soon come up against a limitation on concrete, probably; it may not be quite so near to us as the timber limitation, but no doubt it exists. It is of course easy enough to suggest substitutes for all sorts of things, but it is very difficult to find a substitute which is not itself in short supply. Again, I take it that the objection to the use of concrete is the increased cost.
  The next point I wish to make is this. In housing in the rural areas—I shall deal with reconditioning in a moment—I feel that we are not making sufficient use of local resources. Practically all the houses which were built in rural areas prior to the last few years have been built primarily of local materials, and the noble Lady the Member for Anglesey mentioned a very important point when she referred to her efforts to get one of her local brickworks opened. There is a brickworks in my neighbourhood, which I am perfectly certain could be used to stimulate the production of bricks, but I am told that one of the reasons why this is difficult is that the small brickworks, which very often employ only about half a dozen men, cannot as things are offer the conditions which the workers in the brickmaking industry

  1099
  are very rightly demanding. I think that is a matter in regard to which the Ministry ought to use every possible means to stimulate production. They should investigate the position and find some means of overcoming the difficulty. It is perfectly true that the bricks produced in small brickworks are rather more expensive than those which are mass produced; at the same time, when one considers how far it is necessary, in some parts of the country, to transport some of these bricks, I feel that we should probably not be much worse off, if we were to open up these local brickworks.
  On the subject of reconditioning, it is already perfectly clear that timber is the closest limitation. I fully agree with the Hobhouse Committee, and with other hon. and right hon. Gentlemen, that labour is available in a large part of the country—I do not say that it applies everywhere—in the form of small private firms, family concerns, who cannot, or perhaps will not, take on the responsibility of erecting a complete new house. Therefore, in a very large part of the country the labour is there. But I was somewhat surprised that the Hobhouse Committee should have fixed the estimate of the sum required thoroughly to recondition one of these cottages at £500. Admittedly, the conditions vary from place to place, and it is impossible to lay down a hard and fast rule. But I should have thought that more than £500 was needed in order to bring any of these old cottages up to modern standards, and I should certainly put the figure more in the region of £750, to achieve the result which the Hobhouse Committee lays down in very great detail.
  The next point on the subject of reconditioning is that, unless we bring back into occupation a house which is so bad that it has had to go out of occupation, and as regards which it is very doubtful how far it is worth while reconditioning at all, we are not, in fact, increasing the total number of separate dwellings. Again, taking a very broad view of it, it is sometimes necessary to expend about half a standard of timber on reconditioning. When that has been done three times, it means that one new house has gone. I should like to make two points about this. Obviously, we must not interfere with the erection of new houses, but has the Ministry considered—and this
  1100
  is the point which I anticipated earlier on—the use of local materials, in particular, home-grown hard woods? A very large number of these cottages are built of local materials, and I am advised—I am not an expert on the matter—that it is possible to use local hard wood for reconditioning, and to use other materials which would not be satisfactory for and could not be used in new houses. As I say, I have taken some expert advice on this matter, and am advised that that is possible.
  I am further advised that it is possible for the length of time taken to season these woods to be substantially reduced by the use of comparatively simple equipment, if only it was available. Surely the situation is so urgent that if it is possible by the introduction of new equipment to carry out quick drying of such wood, and if it is possible for this material to be used—and I see no reason why it should not be used—then that is one way of reconditioning without eating into the supplies of imported soft woods, which are needed for the erection of new houses.
  The next limitation is in regard to fittings. I should like the Minister, when he replies, to say how far the demand for the installation of bathrooms and other sanitary conveniences can be met out of the existing supply of fittings. In dealing with this matter there is, of course, always the danger of sending good money after bad. I feel that, if we are going to do this thing, it is essential that we must make a good job of it, and not stop half way.
  There is one other point I wish to make, and I do so with some reluctance, although I believe it is a matter which should be stressed. It concerns the question of the overlapping of Ministries at the regional level, particularly in their relationship with rural authorities. I had an instance brought to my notice yesterday in which, right at the start of a scheme, a rural authority sent to the Ministry of Health, and to the Ministry of Works as well—because I understand that they work together—all information regarding the pressure, type of copper, details of water ducts, the frequency in the electric current, and so on, and even the colour that it was proposed to paint the bungalows. Not long afterwards, the rural authorities received visits from various officials of the Ministry asking for this very same information. That sort

  1101
  of thing wastes the time of the very hardworking officials of a council. It wastes the time of the Ministry officials as well, and I hope that the Minister is going to insist on efficient administration at the regional level. Admittedly, he may have to work with a certain number of inexperienced people, but I think that the time has come when this machine should be settling down and working properly.
  I have had other instances brought to my notice where the local authority has faithfully filled up its census return, and then, a short time later, has been asked for the information contained in that return. The officials of these rural authorities are, for the most part, extremely loyal and devoted public servants, and it is hurting some of them very considerably to find the Ministry, whether at a national or a regional level, coming down, quite unnecessarily as it appears to them, to get information which they have already. This practice has, I think, the technical name of "swanning," at least, that is what it used to be known as by staff officers, who did much the same thing in the Army. This practice on the part of civil servants may be perfectly justified, but it appears to the man on the spot to be "swanning" without any excuse at all. I hope that the Minister will tighten up his organisation so that only the essential things are asked for, that only the essential visits are made, and that the men on the spot will be left to get on with their work.
  4.47 p.m.
  Commander Maitland: The hon. Member for Hitchin (Mr. Asterley Jones) began his speech by congratulating the Government on the energetic attitude they have taken up. I am afraid that I cannot do the same. In fact, it has always been rather astonishing to me why there has been so much delay in the introduction of a Measure to recondition houses when there has been so much agreement about it on the Government side. It started in the Debate on the Address, when the Prime Minister made reference to it, and hoped that it would soon come. Then there was the Debate on housing, which followed shortly afterwards, in which three hon. Members opposite referred to the question of reconditioning houses, and two of the three came out strongly in favour of it. Again, in November, 1946, in the course of a Debate in another place, Lord
  1102
  Quibell who, of course, is a supporter of the Government, made it perfectly clear that no preconceived ideas were going to prevent him from saying that the Housing (Rural Workers) Act should be reenacted. On the same occasion, Viscount Addison promised that it would not be very long before the Government made proposals to give help in this direction. That was in November, and the report was received in October. Now it is March. I cannot understand what the delay has been, and I hope that, when the Parliamentary Secretary replies, he will be able to tell us something. I also hope that it is not the illness of his chief which is causing him to hold off, because I think that in a good organisation, even if the commander-in-chief is away, the work ought still to go on.
  My right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank), who opened this Debate this afternoon, painted a wide picture of what is happening in rural housing today. For a few minutes this afternoon I want to paint a small picture of what is happening in a part of the country which I know very well, and which is also happening in many other parts of the country. In the rural district in which I live, there are only 129 houses, out of a total of 2,708, which are fit in all respects. There are 552 which require minor repairs, 1,395 which require repair, 387 capable of reconstruction, and 245 in respect of which it is impossible to do anything, and in a very large number of which people are still living. Since the war there have been four plus four new houses and five plus 24 under construction, and there are, approximately, 200 applicants for those houses. That is the picture of one small part of England, and a part on which the production of our food depends certainly as much as on any other part.
  As regards reconditioning, there is one argument which I would put forward, quite apart from those already submitted, which appeared in the Hobhouse Report. It is that we should take particular care to do well by the agricultural workers who have stayed by the industry, have increased their output, and are bearing the whole thing on their shoulders at the moment. Very often they are the last people to get a new house. They may be living in a house which is just not too bad, the sort of house that could be recon-

  1103
  ditioned and made into a really decent dwelling. This question of reconditioning will affect them particularly. That is one of the reasons why I feel we should not neglect to bring in reconditioning at a very early moment.
  I would now like to refer to repairs and patching. Very rightly, the Hobhouse Report separates the question of repairs and patching from reconditioning, but it is, nevertheless, an increasingly important commitment of our rural builders. In the part of the country in which my right hon. and gallant Friend and I live, we recently had a zonal conference. The chairman of that conference explained that the labour force used on the erection of new houses had increased from 33 per cent. in June, 1946, to 37 per cent. in December, 1946—a corresponding decrease of 17 per cent. in the number of men employed on repairs and maintenance. He said that this was encouraging progress, and had been achieved without creating unemployment. But I am not so sure. At the moment, and in present conditions, I do not think that that is encouraging progress, with 1,395 houses requiring repairs, and after a very heavy winter.
  That conference took place in February of this year. We should give very careful consideration to the question of materials and labour for immediate, repairs. The rural district of which I am talking is allowed to grant only £900 a month of licences. Considering that that is in respect of all farms, farm buildings and houses, I think it is entirely insufficient. I am a little worried about the question of licensing on overall costs, because I do not think we can very well differentiate in those figures between the amount of labour used and the amount of materials used. For example, a friend of mine had a chimney broken off in a recent gale. He had to have it put on again. There was practically no material involved, but scaffolding had to be rigged, and he had to pay a high figure to get his chimney put back again. That is an example of a case in which the cost arose from labour and not from material. I would like the Parliamentary Secretary to tell us if he is satisfied that labour and material are properly balanced at the moment. I am not so sure that they are.
  I would like to make two suggestions. The first deals with the immediate prob-
  1104
  lem of getting as many people as possible under cover—I put it no higher than that—at the earliest possible moment. I am certain that a strong directive from a high authority is required to direct all camps, aerodromes and Government establishments to take a certain proportion of people and rehouse them. As an ex-serving officer, I know very well that that would be resisted and I can imagine the arguments that would be used, but I know equally well that if the directive was strong and tough enough it could be done. Our houses were requisitioned in the war against Hitler, and I should have thought there was an argument for requisitioning some portion of those establishments to help us in the battle against famine.
  It is not only the Service establishments to which I refer. In my constituency a large aerodrome has been taken over by the Ministry of Works, and the inside is like an Aladdin's cave. In it are kept all kinds of furniture and equipment, most of which is used in Government offices This place is used as a great dump. There are a number of them about the country, and they are used as dumps and collecting posts for all this furniture which is taken from one Government Department, which has perhaps been derequisitioned, and pushed off to another. I am certain that if a strong directive were given to that establishment, quite a lot of temporary accommodation could be offered to the people who so urgently need it. If during the process some of the furniture could also be taken out and distributed to the people who need it, that would also be a good thing.
  I wish to refer again to the question of repairs. It is no good setting our eyes on the stars of tomorrow if we keep on tripping over the things of today. The hon. Lady the Member for Anglesey (Lady Megan Lloyd George) referred with loathing to the hovels and houses which are in a deplorable state of repair in her constituency. I could not agree with her more, but we cannot just loathe them and leave them. We have a duty to see that the people living in those houses have something done for them now. If a person is living in a cottage where the wet is coming through, with rat holes, and in a filthy state, naturally he wants a better house, but when it rains, the first thing he wants is to have that house dry. I have been very much impressed

  1105
  by the arguments put forward from all sides of the House to the effect that it is not easy to put foreign labour into the mines. I think the House has accepted that principle, but I do not agree with it as regards the building and, in particular, the repairing trade.
  In my constituency, before some of the houses which had been requisitioned by the Army were handed back, gangs of Italians were taken on to put them into a state of repair. I remember going into one of those houses one day, and when I opened the door I could not imagine what had happened because there was a noise far worse than any monkey house at any zoo. It was nearly as bad, though not quite so bad, as it is in this House when we discuss the Business for next week in our dignified manner on a Thursday. The noise was caused by a gang of Italians doing out the house, and they were doing it very well. In relation to this question of repairs, surely we can get some of the voluntary foreign skilled labour which exists both in the ranks of the German prisoners in this country, and particularly among those who are billeted—it is among those where we will find the volunteers—and also abroad in Europe. There are many Italians who want to come back to this country. Here is a job where we can employ them. I am talking about things which I understand. If I were allowed a certain number of Italian or other foreign workmen, I could do an enormous amount of concrete, of which at the moment there is no shortage—we are exporting cement—with green timber creosoted—and with things like that, and with men who could point brickwork. With a labour force of that description, I could patch up temporarily only, of course, many houses and make more comfortable many people in my constituency, and I could also put into a far better condition a great many of the farm buildings, many of which are almost falling down.
  I wish to raise a cheer, on my own if necessary, for all the local government officers and their staffs in rural areas who are in the front line of the battle today. They are generally underpaid, nearly always overworked, they are worried by the Ministry, bothered by their local Members of Parliament, pressed by the councillors and importuned by the public, vet somehow or other they get on with the work. Of course, they have their faults, too. Nevertheless, I do not think there
  1106
  is any other country in the world which could produce men who get on with their job so honestly and so well as these men who work in remote rural districts. I would also like to pay my tribute to the thousands of people in this country who are living in desperately bad conditions, who are not complaining, and who manage to keep cheerful—how, I do not know—but who are hoping and hoping that we will get something done for them quickly.
  5.10 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. John Edwards): I think it would be for the convenience of the House if I intervened at this stage, although I hope hon. Members will not mind if I leave some points of detail to my right hon. Friend the Secretary of State for Scotland when he replies. I am sure we all feel the absence of my right hon. Friend the Minister of Health, and of the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) who, I think, could have provided higher lights for this Debate than I am likely to do, or, for that matter, with all respect, the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank). I suppose I ought to ask the indulgence of the House on this my first real occasion since I came into office. I feel a certain handicap in the absence of my chief, although I assure the hon. and gallant Member for Horncastle (Commander Maitland) that my right hon. Friend's absence does not mean in any sense that the Ministry of Health stops working. The work goes on.
  Commander Maitland: I am very glad to hear that.
  Mr. Edwards: I should not like it to be thought that there is any difference of opinion between this side and the other side of the House on the matter of the care and attention which should be given to agriculture. The right hon. and gallant Gentleman who opened this Debate referred to agriculture as the oldest of our industries. I almost interrupted him to say, "and the most neglected." I do not need to argue that, in view of the completely devastating figures for which I am greatly indebted to the hon. and gallant Member for Horncastle. The figures that he gave of the area which he knows best, are enough to indict the

  1107
  governments of the past, so far as this Debate is concerned, at any rate. Those figures speak for themselves. They show neglect for which this Government are in no sense responsible, although the burden does fall upon the present Government.
  We do not want today to argue in detail about what has happened in the past, but we should remember that the tasks which now confront us are, to some extent, created by the neglect of the past. All I want to say is that the Government are anxious to see that the maximum contribution is made towards the solution of the rural housing problem at the earliest possible moment. We recognise that progress in agriculture depends in no small measure on the provision of housing and other public services. We know that the future of agriculture depends upon the intensity with which we are able to service the agricultural areas. I noted what the hon. Lady the Member for Anglesey (Lady M. Lloyd George) had to say, and I can assure hon. Members that we also appreciate that the maternity and child mortality rates and tuberculosis rates are directly related to housing conditions. Therefore, do not let us disagree in the sense of not recognising these problems. Do not let us disagree that they have got to be handled, but let us discuss whether the way in which the Government are handling this matter is the right way. Rural housing must be considered in the light of housing needs and the house building capacity of the country as a whole, and it must be recognised that one cannot deal with rural housing apart from the background of general housing. Labour and materials are not available for an unlimited amount of housing work. I noted what my hon. Friend the Member for Hitchin (Mr. Asterley Jones) said about the use of substitute materials, and I assure him that every effort is being made to provide substitutes, particularly for timber and steel. But whatever we do about substitutes, we have to face the hard economic problem that we have limited resources which we want to use for a number of different purposes.
  Perhaps I may be allowed to remind the House that the Government decided that the first consideration in providing housing, both in the rural areas and in the rest of the country, must be that of need; that must be the overriding consideration. Therefore, the Government decided to con-
  1108
  centrate primarily on the erection of new houses to provide for those families who have no homes of their own. Such families must clearly have precedence over families who already have accommodation, even if such accommodation is not as satisfactory as one would wish. Here let me pray in aid a document that is not often referred to in this House. It is entitled "Looking ahead," being the report of a Conservative housing subcommittee, in the course of which the committee are at pains to say, when talking about reconditioning and conversion:
  "Care must be taken that no such proposals shall be entertained unless their execution will effect true economy as compared with the building of new houses."
  I quote that with approval, because what one has to show is that the diversion of resources from our main objective of making new houses will not, in fact, increase the overall amount of accommodation. As long as there is a crying need for extra accommodation we cannot but accept the position that we must not go all out on any attempt to improve existing accommodation. Indeed, I would go so far as to say that we are only entitled to effect improvements in accommodation if the result is extra accommodation.
  Now let me turn, continuing the general background picture, to say a few words about the programme for 1947 and the way in which it is being distributed in localities. I do not need to summarise the White Paper, with which I take it hon. Members are quite familiar. The housing programme for 1947 is a realistic programme, based on an estimate of the total amount of work on the construction of new houses which the Government think it reasonable to expect the building industry to carry out during the year. I do not deny that the weather and the fuel difficulties in the last few weeks will show their effects and we may find that the programme will have to be modified. But the programme was related, not to a hypothetical target, but to the actual facts of the amount of labour and materials likely to be available to do the job. The programme for Great Britain for 1947, after considering these factors, was set at 240,000 houses, of which 216,000 were to be in England and Wales. Already tenders have been approved for 235,000 houses in England and Wales; and the 216,000 which it is hoped to complete will, therefore, largely be among those

  1109
  houses in the tenders already approved. In rural areas, close on 41,000 permanent houses are already in tenders approved, and these represent—as the right hon. and gallant Member for Gainsborough said; at least I think he talked of the houses completed, but the same thing is true of tenders—17 per cent. of the total. This is a fair percentage on a population basis, since approximately 17 per cent. of the population live in rural areas.
  Now, in what ways can we help the rural areas particularly? The first thing—and I hope the House will bear with me if I labour this point—is that we cannot, I think, by and large, avoid using our building labour where it lies. I noted that when the right hon. and gallant Gentleman was talking about agricultural labour he used the word "direct," and he then corrected himself and used the word "induce." I think he will agree with me that we do not want to direct labour.
  Captain Crookshank: That is what I said.
  Mr. Edwards: Then we are agreed about it. That being so, if we do not want to direct labour we are in no position to move labour out of localities. I admit, quite frankly, that we cannot avoid, in some places, having labour which gives a higher labour proportion per house, or per unit of the population—whatever you like—by comparison with other areas. But, unless we are to have direction of labour, we must use the labour approximately where it lies. I stress that point, because it is of first importance.
  Mr. Harold Macmillan: I should like to point out that labour is mobile in the country, and moves distances of 25 or 30 miles.
  Mr. Edwards: I am not disputing that.
  Mr. Macmillan: Every day building labourers are being moved from my home locality by motor a distance of 30 miles to London—from the country.
  Mr. Edwards: Up to a point, labour can be moved within a particular area, but the right hon. Gentleman is merely confusing the issue. I am saying that, broadly speaking, the labour must be used where it lies—approximately, broadly speaking, in a general kind of way—and no talk of bus journeys which some people may make, even as much as 25 miles,
  1110
  invalidates my main point. Therefore, as I see it, bearing the practical issues in mind, all that we can do in trying to give genuine help to the rural districts is to see, within any locality, that the rural districts get their fair share of the labour that is going. That is the point I want to make. It is for precisely that purpose that we have arranged, all over the country, zonal conferences comprising convenient groups of local authorities, at which conferences the representatives of the appropriate Government Departments and of the localities are collating information as to building progress and building resources. In the light of the information available, it is hoped to secure agreement in advance with each local authority as to the number of houses they can reasonably hope to complete in 1947; and, at the same time, to bear in mind the need for continuity, so that sufficient tenders are let for the work to progress into the 1948 year. At these zonal conferences agricultural interests are fully covered. We have the Land Commissioner of the Ministry of Agriculture present at these zonal conferences, and we are genuinely trying to see that the rural authorities get a fair and adequate share of the building resources that are available.
  The right hon. and gallant Member for Gainsborough, talked rather as though the rural district councils' programmes were being cut down. But since he said nothing else, that may have left the impression that the rural district councils were the only people suffering cuts. I do not suppose he intended to leave that impression. But in so far as there are cuts—and there have been cuts, in order to bring the proposals of authorities into line with the available labour in their areas—these cuts, if we call them that, have been applied not only to rural districts but to all authorities. I am advised that at the zonal conferences which have so far been held, the rural authorities have obtained a fair and adequate share in the programme for the locality as a whole.
  Captain Crookshank: I am glad the hon. Gentleman says "fair."
  Mr. Edwards: We can argue on what is fair. Certainly I do not want anyone to think that rural district councils have been cut and other people have not, which I am sure is the impression that would have been left by what the right hon. and gallant Member himself said

  1111
  I now turn to a second side of this question, which is equally important. So far, I have tried to argue—if I might recapitulate—that in an area we must take the labour we have got; that within an area we have to try to secure a fair distribution as between the various authorities, and that the rural districts are given their fair share. Secondly, we have to try to see that the rural districts are given help by the provision of particular types of houses that require less labour than others. Mention has already been made of the Airey rural house. In order to assist rural authorities to increase the number of houses completed at an early date, a special system of prefabrication has been designed for the rural areas. The Airey rural house has been designed to be erected with the minimum of on-site labour. The method of construction is relatively simple and can be carried out, I am advised, by small local firms with very little special instruction. I think the house is a good looking house, which will fir into the country background. The design has been passed by the Fine Arts Commission. Inside the house is, I think, warm and generally comfortable. Units for 20,000 of these houses have been ordered by the Government, and already over 12,000 sets of components have been asked for by rural district councils and by urban districts of a rural character.
  The right hon. and gallant Member for Gainsborough referred to changes in specification. Changes have been made. They have been made for two purposes. First, to keep down the cost; and secondly, to economise in materials that were scarce. There were changes for those two purposes, and those changes in specification have now been finalised. This has not held up the building, as far as I am aware, because local authorities were allowed to go forward on the basis of the old specification. I think the rate of building of the Airey rural house is really determined by the rate at which local country builders will overcome their fear of novelties, and put in goad tenders for this type of house. In this case, we are actually in the position of having complete sets of components in stock at the present time, with no waiting list, and we could deliver more than we are delivering at this very moment. In the same way, we are trying to give very special help to rural districts by the pro-
  1112
  vision of the Swedish type house. Close on 5,000 of those were delivered, of which nearly 2,500 were allocated to rural district councils in England and Wales, the other 2,500 going to Scotland.
  Finally, on the ways in which we are, in fact, trying to help, as the right hon. and gallant Gentleman pointed out at the outset, not all rural districts are essentially rural in character. In many cases they may be industrial in character. So, in any event, whether a rural district is truly rural or not, we have the additional problem of trying to ensure that an adequate number of the houses that are actually built are occupied by agricultural workers. I think it is too soon yet to form any real estimate on that point. I would however, remind the House—and I think the hon. Lady the Member for Anglesey referred to this point—that the Government did provide very special financial inducements under this head.
  The higher rate of subsidy, I think, is so substantial that one can say to the hon. Lady, that at no time in the history of this country have rural district councils been given such handsome and generous terms to encourage them to provide houses, not only for all their people, but, particularly, for their agricultural workers. A subsidy of £25 10s. per annum for 60 years, with the rural district contribution as low as £1 10s., and a county council contribution of £10s., compared with the standard contribution of £16 10s. and a rate contribution of £5 10s. does show that there is a real financial inducement here to the local authorities to do their best to ensure that a sufficient number of the houses are occupied by agricultural workers. I am asked why they are not doing so. My answer is that, in the state that we are now in, with the houses under construction, and bearing in mind the fact that requests for grant under this head do not come in until the houses are occupied, I think it is far too soon to pass any final judgment on the results of the scheme.
  May I turn to some of the specific points which the right hon. and gallant Gentleman and other speakers have raised? The first point was about the use of camps. I would say, that any camps that are available, granted that they are suitable—there are degrees of suitability, as any one who has seen any of the camps knows—are being utilised for housing purposes. In

  1113
  January, 1947, there were nearly 14,000 families occupying accommodation in approximately 1,000 camps. I have not the figures showing the proportion in the rural areas, but I am advised that a good proportion were in the rural areas.
  Commander Maitland: Would the hon. Gentleman consider the point which I made about seeing whether, in the camps at present occupied by soldiers and airmen and others, some accommodation could not be made available for the people who live in the vicinity?
  Mr. Edwards: So far as my Department is concerned, we are constantly on the look-out for any accommodation that comes our way. The next point is that of the ratio of four to one. The right hon. and gallant Gentleman gave some betting figures which I did not quite follow. Ho will correct me if I am wrong, but I understood that they were designed to show that the proportion of private enterprise building between the wars was much higher than the proportion now. I think that is what he was saying when he used the words "three to one on, and four to one against," the precise significance of which I do not understand. I want to say to him that, if he is talking about rural housing, the less he says about this the better, because this document—the Hobhouse Report—which he quoted in aid gives the direct answer to this point. It says:
  "The houses built by private enterprise were a very valuable contribution to the needs of the people who were able to buy their own houses, but they were largely occupied by urban workers or by retired people; and, with the exception of houses built by landowners for their own employees, they did not touch the special needs of rural areas for houses within the means of agricultural workers."
  In other words, the right hon. and gallant Gentleman can say that private enterprise built houses, but he cannot go on to say that they built houses for agricultural workers. As to this four to one rule, do not let us forget, that the four are built by local authorities to let to those who are in the most urgent need. Do not let us forget, either, that we have made arrangements for local authorities to cooperate with local builders who can only build, may be, one or two houses, and who cannot tender for the larger groups of houses. Provided those houses are of suitable size and cost they can be—and, indeed, are being—purchased by local
  1114
  authorities to form part of their programmes. Small builders are also building for local authorities in accordance with mutually convenient arrangements; but I see no reason why we should depart at this stage from the four to one principle. For as long as the great need is for houses to let and not for houses to sell, then we must have the predominant proportion of our housing directed by the local authorities, and under their control, and at their disposal, and I cannot yield, in the slightest degree, to the suggestion that this four to one ratio should be altered.
  The next point the right hon. and gallant Gentleman referred to was the subject of small houses. We are already building 160,000 temporary houses which have two bedrooms. It is true that the proportion of those in the rural areas is not as great as that in the urban areas. The main demand at present is for the three bedroom type of house; but we shall have more smaller and more larger—because the need for the larger houses is also there—when we get on further with our programme. For the time being we are doing what we can through the local authorities to encourage the transfer of families so as to have more accommodation available, whenever that is practicable.
  Mr. Gallacher: The hon. Gentleman says they are making arrangements for the transfer from the larger houses to the smaller houses. Would he consider having the small families transferred to agricultural labourers' cottages, and leave the big houses, so that 15 or 20 families of agricultural workers could be housed in them?
  Mr. Edwards: I would ask the hon. Gentleman to remember that, in these matters, we are not discussing compulsory powers. Here we are trying to arrange that the local authorities transfer families, particularly in the houses over which they have control; moving, for example, the widow or the aged couple from the three bedroom type of house into a smaller house, if one is available. We are not here concerned with the wider issues which the hon. Member raises.
  I was asked why the temporary houses were not allocated to rural areas. I hope that the hon. and gallant Gentleman will accept this explanation, because I believe it to be completely valid. First of all, the type of house, the temporary house—not to be confused with the houses that I

  1115
  have mentioned—the type of temporary house was not so suitable for rural as for urban areas, particularly because it is small. Moreover, the temporary house needs more services, for instance gas, and or electricity, and in not every case were these services available in the country. The temporary houses were particularly suitable for blitzed areas where replacement of destroyed homes was very urgent. It was harder to secure speed and economy of construction in the rural districts than in the towns. Perhaps, I ought also to say that it is desirable that temporary houses, on the whole, should be built in sizable groups, and in the rural areas one does not often get the chance to put down a block of, say, fifty houses all at once.
  Another point to which I must reply is one to which several Members have referred, the last Hobhouse Report. Members have asked particularly about the date of its publication. I will have a little to say about the Report in a moment; but on the specific point, I do want to say that there was no deliberate hold—up of publication. There is, as everybody knows, now a good deal of congestion in the printing of these things; it does take a long time to get reports printed; and it did happen to run into the fuel crisis at the beginning of the year. My right hon. Friend made a statement about the Report immediately it was published. I am sorry that I cannot today take the discussion of reconditioning any further than it was taken when my right hon. Friend announced his view of it at the time of its publication. I am sorry, but there is no option but for the House to accept this: the point of what my right hon. Friend said when the Report was published still stands. The Housing (Rural Workers) Acts expired in September, 1945 and were not renewed. The Minister at the time—the Government at the time—decided not to reintroduce reconditioning because of the necessity to devote all resources to new building.
  I do not, at the moment, at any rate, take the view that one adds in any way to accommodation that is available if one diverts resources to reconditioning; nor do I accept the view that, even in the rural areas, there are unemployed resources which are not being used. I think that there are resources which are being used for repair work; and, possibly, it
  1116
  may be said that they could be used for reconditioning. I am not sure about that; but I do not accept the view that there are resources actually unemployed in the rural areas; and as long as there is a crying need for extra accommodation, then, I think, we must put that first. However, as far as reconditioning is concerned, I can only say—and what I say, I think, also goes for the Secretary of State—that we shall listen with care and attention to everything that is said during the course of this discussion, and that we hope that it will be possible for the Government to declare their intentions before the end of the Session.
  Captain Crookshank: That is not until October.
  Mr. Edwards: There is a Scottish report which has not yet appeared, and it is desirable for the two administrations to be in step in this regard; and, therefore, although I welcome the discussion, and shall take the greatest note of everything that is said, I am not able to advance on the statement that was made by my right hon. Friend, or take any other line today than that of insisting that, so far as we can see, we must devote our major efforts at the present time, to this business of providing new accommodation.
  I am sorry if I am taking a rather long time, but there are two other points to which I must refer before I sit down. We must remember that the provision of houses alone is not enough. I was interested to see what some of my hon. Friends have put in the Amendment which is on the Paper. All too frequently in the past people have been satisfied to put up houses without seeing that they had proper services, either in the form of water supplies or in the form of proper sanitation. Now I can claim—I hope quite rightly—that, granted the shortages of men and materials, and the demands for housing, we are trying not only to put up houses in the countryside, but, also, to see that they are properly serviced.
  Under the Rural Water Supplies and Sewerage Act, 1944, we have received formal applications for grants from 190 local authorities in England and Wales for schemes estimated to cost nearly £21 million. Some 570 water supply schemes estimated to cost over £20 million, and 570 sewerage schemes estimated to cost over £21 million have

  1117
  already been submitted. It is important, not only that we should deal with rural housing, but that we should also provide for proper sanitation and water supply, and I think I have shown in this short summary, that the volume of work that the local authorities have done is very considerable.
  Captain Crookshank: But what has been accepted? That is the point.
  Mr. Edwards: I have not got the full details, but, at the present time, in regard to water schemes, we have accepted schemes of a total cost of £2,300,000, affecting 802 parishes, which have been finally authorized, while others are under consideration at the present time.
  Mr. McKie: Do those figures cover the whole country, including Scotland?
  Mr. Edwards: No. These figures are for England and Wales. No doubt, the Secretary of State will be able to give the Scottish figures.
  The right hon. and gallant Gentleman left an impression that the Government, and the Department for which I speak, have fallen down on their job. He implied that we have not done all that we could have done, and he suggested that we ought, within 20 months of taking office, to have achieved more. I very nearly interrupted him to ask him if he knew the figures for 20 months after the first world war, but what I do say to him—and perhaps he will listen—is this. I wonder if he knows that the rural district councils, in the 20 years between the wars, completed a total of 160,000 houses; and will he compare that with the 41,000 tenders already in tenders approved by rural district councils in 20 months since we took office? The truth of the matter is that the local authorities have played a magnificent part, and, for the first time in our experience, the rural district councils are now, almost 100 per cent., mobilised in this great housing drive. To suggest that we have fallen down on the job, which is, I know, what we must expect from the Opposition, is quite wrong. On the contrary, it is true that the rural district councils have achieved an enormous amount in this relatively short time, in a quite unprecedented way.
  5.49 p.m.
  Mr. York: I do not think the hon. Gentleman who has just spoken made
  1118
  a maiden speech to the House; it was a maiden speech as a Minister. I must congratulate him upon the facility with which he dealt with the more controversial side of his subject, but I cannot compliment him on the promise of help which he now offers to the rural areas. In point of fact, I gathered that where he was going to help the rural areas was in the direction of seeing, that labour in the localities would be fairly distributed—that is obvious—that the rural areas will get their fair share of labour—and I can hardly imagine that that will be of great importance—that his Department has designed an Airey house and provided some Swedish wooden houses, and, in addition, has provided a special subsidy for the agricultural workers, which, apparently, is being very sparingly used.
  The whole of the help which is offered by the Parliamentary Secretary is being offered to the rural areas, but it does become increasingly obvious that this help is not being brought to the direct advantage of the agricultural workers, that the agricultural workers are in a small minority of those who are actually getting the houses, and that is the point to which I wish to address my remarks. I was gravely disturbed to hear the Minister use these words, and I took them down, because I do not wish to misrepresent him in any way:
  "Rural housing must be considered in the light of the general housing conditions in the country, and of supplies of materials."
  I want to reinforce the plea made by the hon. Lady the Member for Anglesey (Lady M. Lloyd George) that the position today is so desperate that we must, in fact, consider whether priorities are not necessary for the rural areas, as they are for the mining areas.
  Mr. Edwards: I do not want to suggest in any way that special consideration would not be given to rural areas; in my statement, I said that we cannot talk about rural housing in isolation, but must consider the rural housing problem in the light of the general housing problem, and it does not mean any more than that.
  Mr. York: I am very grateful to the Minister for that admission, but the hon. Gentleman did not allow that impression to go out from his speech, because he built up his remarks on the plea that the overriding consideration in the provision of houses was need, and, by that,

  1119
  I took it to mean individual need and not national need. The point I am making now is that the national need should come before the personal need, and, since I cannot take the Minister's intervention to mean that he is prepared to reconsider his attitude on that point, I take it that he merely means that he does not wish his general statement to be limited to any particular medium.
  Mr. Edwards: I do not want anything I say to be interpreted as meaning that we are not giving special attention to the problem of the rural areas and not doing everything we can to push on the building of houses specifically for agricultural workers.
  Mr. York: I am glad to hear that, and I think it is a valuable admission, and I therefore feel that, in my submission to the House, I shall have the support of the hon. Gentleman. Today, we know that we are suffering from a serious food shortage, and I feel that that food shortage is going to become increasingly grave over the next few years. I feel that in such a way as to make me certain that a very desperate situation has to be met by desperate remedies. The remedy which I am putting forward, along with the hon. Lady the Member for Anglesey, is not one which is very easy to make, because all hon. Members for urban areas—and incidentally, my constituency has, perhaps, two-thirds of its electorate living in towns—when they see the pressing cases of hardship brought to their notice, hesitate before trying to alter the present system, whereby need is put first. I feel that the provision of food supplies for this country in the future is of more importance than the provision of homes for individuals, and, therefore, I am putting forward a plea for the reconsideration of the problem of special priority for agricultural workers over all other considerations.
  We know that the American loan will provide food for us during the next year, and any charity which we may receive after that is a gamble. Let us, therefore, for once be prudent and take the only insurance policy which is available to us on the market today, and ensure, by the only available means, that our own food supplies are increased during 1948, 1949 and 1950. It is admitted that the main cause for worry, and the main
  1120
  barrier to increased production, at the moment, is the shortage of labour, and it is agreed that the way to attract labour to under-manned industries is to provide attractions and incentives in those industries. The mining areas have been so favoured already, and quite rightly so.
  I am asking today that the agricultural areas should receive the same treatment in regard to that commodity, houses, which is most in short supply all over the country. If we are able to obtain, within the next year, an additional 50,000 houses for agricultural workers—and that is a possibility if a high-level decision is made—it will have a vast effect upon agricultural production for the next three years, and I suggest that a decision taken on that ground will produce increased production in 1948. Of course, along with that must go the provision of water and electricity, and, in this connection, much could be done if priorities were given for poles and insulators to be made available for rural schemes.
  But I must go further than priority for housing, and I must ask—and I realise that this is an equally unpopular issue to put forward—that over a period of years, perhaps, and certainly for the next year or two, those houses which are being built in rural areas shall be allocated to agricultural workers alone. I am fully aware of the dangers of making such a request—the danger of arousing unpopularity for the industry—but again, I am certain that the estimate which has been made that only to per cent. of the houses provided in rural areas are being occupied by agricultural workers, makes this step essential. I go on from that to suggest that this proposal which I have made could be put into effect and could be accepted by the people of this country, including the urban dwellers, by a much better effort in public relations, and I think such an effort is necessary. The reasons for these priorities will have to be put forward to the townspeople, and we must accept the Prime Minister's conversion to our policy of putting first things first. If he does that, he must surely see that one of the first things to do is to increase the labour force of our most important industry. Food and coal are first in this dangerous time, and I strongly press on the Government the necessity of seeing that these two industries are given the chance to do their job.

  1121
  In the Hobhouse Committee Report on reconditioning, it is suggested that the grant should not be made solely on the grounds that the house is to be occupied by agricultural workers. I ask the Minister to consider, when he takes into consideration the whole Report—as apparently he is going to do—whether that provision is wise. On a longterm view, and without a food crisis, I would agree with the Hobhouse Committee. But, on the short-term view, if the Minister is going to introduce legislation to include the provision of widening the giving of a grant to all rural dwellers, that would be a mistake at the present time. I hope the Minister will suggest some condition in his new Bill which will hold up that provision, at any rate for a year or so.
  The question of a ratio of four to one has been answered, not very convincingly, by the Parliamentary Secretary. His objection to allowing private enterprise to build more than the ratio of four to one, is that the houses they build are for sale. But, in the rural areas, there are a large number of people, farmers and landowners, who want to build houses for agricultural workers either to let, or for service cottages. I wish to press on him the urgency of taking away the restrictions on the issue of licences where someone other than the builder of the house is to occupy it.
  Mr. Collins: Would the hon. Member say what particular restrictions he has in mind? Are there not already provisions for farmers' subsidies to build houses in that way?
  Mr. York: No, they are restricted by the number of licences the rural district council can issue. I am asking that the rural district council should be given discretion not to follow closely the four to one ratio where the house for which the licence is asked is for letting, or for service cottages. I think the hon. Member for Taunton (Mr. Collins) will agree that that is not an unreasonable request.
  Where a private owner wishes to obtain a licence for a sub-standard small house, that licence should not be refused, as it has been in the past. The local owners can find opportunities for moving their retired people, and perhaps widows, and they can do it by agreement, without any unpleasantness to the tenant of those
  1122
  houses, perhaps better than the local authorities can do it. Where they wish to build these small houses, I strongly urge that they should be allowed to do so. Local offices of the Ministry of Works should be encouraged to give licences as freely as possible for reconditioning cottages. Whether there is a grant or not, we must argue another time. The Government have admitted that the food position is very bad. But, if they are prepared to reject the policy I put forward, they must be saying, first that the food supplies for 1948,-'49-'50 are assured, and secondly, that they have another policy to put forward. All I can say is that the food position, to my mind, is graver today than it has ever been throughout the war, and possibly throughout our history, and the Government's policy on housing has been kept secret up to date. I warn them that unless these steps are taken in the early part of 1947, the risks of a more serious food crisis than we believe is coming upon us, would be their responsibility. We on this side of the House have done all we can to warn them of it, and to suggest practical steps that they could take as their part in making that crisis less harmful to the country.
  6.7 p.m.
  Mr. Mitchison: I confess I hear with some impatience these complaints against the Government's policy over rural housing. One hon. Member opposite was good enough to recognise that we—as he put it—have a duty in this matter. The hon. Member for Ripon (Mr. York) indicated that his policy was putting first things first. So remarkably successful has been the policy of putting first things first in the part of the country which I represent, that it is full of large houses, which at present are empty, that those houses have water supplies, that the villages have no water supplies, and that, on a county investigation of working-class dwellings in the Kettering district, of those investigated no less than one third were unfit to live in and incapable of being made fit at any reasonable cost. I represent, in addition, the people who have had to live for very many years in such houses as well as their forebears, the Pytchley Hunt, and the Duke of Buccleuch. Pytchley happens to be one of the worst housed villages in the constituency and one where there is an undue proportion of houses—
  Lord William Scott: Does the hon. and learned Member suggest that the Pytchley Hunt has anything to do with the Duke of Buccleuch?
  Mr. Mitchison: I made no such suggestion. All I can say is that it seems to me a queer form of putting first things first and that in that, as in many other parts of rural England, we should find bad conditions as regards working class houses and the amount of available money represented by these large houses and the sporting facilities provided by the Pytchley and other hunts. I want to go a little further, I think the—
  Lord William Scott: Will the hon. and learned Member, having made a rather unpleasant assertion, please explain to the House what connection he believes the Duke of Buccleuch has with the Pytchley Hunt?
  Mr. Mitchison: I have already answered that question and I am not going to answer it again.
  Lord William Scott: The hon. and learned Member has not.
  Mr. Mitchison: May I go a little further—
  Lord William Scott: A most unpleasant assertion has been made against my brother. I ask the hon. and learned Gentleman either to withdraw it, or substantiate it.
  Mr. Mitchison: I have nothing either to withdraw or substantiate. May I assure the noble Lord that I have no intention of making any offensive reference to his relative—if that meets the case.
  May I go a stage further, and consider for a moment what in my experience has been the result of the Government's housing activities in this same area. The right hon. and gallant Member for Gainsborough (Captain Crookshank) said that rural areas had not had their due proportion of houses which have been built. That in fact is incorrect if we take permanent houses. Of course it was perfectly true that the main use for the temporary prefabricated houses has been in urban areas and they have served the particular purpose of filling gaps in "blitzed" cities. They were quite obviously the type of house least likely to be used in rural areas. It will be found from the tables
  1124
  in the latest housing returns, that the proportion of permanent houses or permanent prefabricated houses actually put under construction and also the proportion completed in the rural areas bears a higher ratio to the total than does the rural population to the total population of the country. That is to say that, man for man, the rural areas have had rather more than their share of all permanent housing whether traditional or prefabricated.
  Secondly, as regards the programme in which the rural houses have themselves had at least their fair share and indeed rather more, a very simple comparison can be made from the figures given by the right hon. and gallant Member for Gainsborough between what was done between the two wars and what has already been done by this Government. If he leaves the flat racing odds and gets on to steeple-chasing he will find some high jumps on the last two pages but one of the Housing Return. If he compares the figures of completed houses in those returns, he will find that already after the dislocation of six years of war, this Government have equalled in permanent houses, and much more than equalled in other forms of rehousing, the average of a year's building as stated by him in the interwar period. There surely can be no answer to that. If the total number of families rehoused is taken, the figure is absurdly higher, not only than what was done immediately after the last war, but than the average of all the prewar years.
  There remains the point in the Hobhouse Report that the rural building between the wars was not building which met the needs of the agricultural worker. It was very largely building for weekenders, and only to a very small extent of the type of houses to let for agricultural workers that is required now. There is a suggestion in the Motion, and a similar suggestion was made in many speeches from benches opposite, that much more ought to be done by way of reconditioning. Both the majority Report and the minority Report of the Hobhouse Committee recognised the need for reconditioning. It is not correct to say that on that point there is a difference between them. But, I suggest that there must be certain conditions attached to reconditioning.
  Here again I doubt if there is much difference between the two Reports of the Hobhouse Committee. The first of them

  1125
  must be that reconditioning must not interfere with the imperative need for new houses. There is the question of the use of the small builder. It is significant that at the end of the Hobhouse Report are the comments of various county councils on this matter. Northamptonshire and Warwickshire are similar counties; they differ on this point. Northamptonshire takes the view that there is definitely some labour available for reconditioning which cannot serve any other purpose. Warwickshire, on the contrary, considers that any labour available for reconditioning could also be used for building new houses.
  The Ministry itself—I do not think that this has so far been stated—is not only encouraging the rural housing authorities to make full use of the small builder; it has given them rather elaborate directions how to do so, and has gone so far as to arrange for the issue of building licences, which are not to be included in the one-in-four ratio, and which are described in the Ministry's circular as U licences, solely for the purpose of seeing that none of that type of labour is left out of a job. One of the specific objects for which that type of labour can be used under a U licence, if it cannot be used for new housing, is the repair of farm buildings. Therefore, I beg leave to differ from the suggestion that has been made from the benches opposite that there can be, at this moment, labour suitable for farm building repairing and suitable for no other purpose, which any Government action has prevented from being used. The attention of the Ministry has now, in no less than three circulars, been directed to that one object.
  That, I suggest, is one limiting of the conditions as to reconditioning. There is a second very important condition. An objection which has always been taken from these benches, and by many other people who would not necessarily agree with us on other points, about the Rural Workers Housing Acts, is twofold. First, I should at once state to the House that I am myself the owner of one or two tied cottages, and that I have myself used the Rural Workers Housing Acts in Scotland where, I believe, much more and more intelligent use has been made of those Acts than at any rate in some parts of England. Having said that, I still say that I find it a little hard to reconcile
  1126
  that with my conscience as an individual and still harder to reconcile with my Parliamentary viewpoint, that a private owner should receive benefit out of public funds without much more stringent conditions than are imposed by the Rural Workers Housing Acts. For that reason, I welcome the suggestion in the minority Report that such assistance should only be given, where it is necessary—that is to say, that these grants should not be a matter of course—and secondly, the suggestion in the minority Report that they should carry with them certain rights of pre-emption by the local authority with regard to these assisted cottages.
  That is the first objection. The second is an even more serious one. I am not prepared to object to tied cottages in all circumstances and in all places, but I do say that the practice of tied cottages for the ordinary farm worker is quite wrong, that it ought never to have reached anything like the state it has reached in this country, and also that the number of tied cottages ought to be reduced, and in most cases, subject to certain exceptions, tied cottages should be abolished altogether. Certainly grants from public funds, whether national or local for the reconditioning of tied cottages ought not to be allowed. Therefore, I welcome the suggestion in the minority Report of the Hobhouse Committee that no assistance should be given for the reconditioning of tied cottages. I cannot believe it is right, and I find it hard to see how any moral case can be made out for it.
  Mr. York: Read page 26 of the Report.
  Mr. Mitchison: I have read the whole Report rather carefully. This happens to be a matter which interests me greatly. One must be one's own judge on moral questions. The Hobhouse Committee is not there to tell me what is right but to make certain public recommendations, which it has made.
  I would like to say one word more about reconditioning. It seems to me that reconditioning is not the same thing in most cases as repair, and there has been a tendency on the benches opposite to treat them as the same thing—[HON. MEMBERS: "No."] I am very glad to hear that. It is obvious that repairs to the roof or drains are one thing and reconditioning another, although what is meant by reconditioning may in some cases be conveniently done with the

  1127
  repairs, as indeed the Hobhouse Committee suggests.
  Mr. Baldwin: Will the hon. and learned Member agree that in all reconditioning, the plans have to be approved by the local sanitary surveyor, who will take good care to see that repairs are not included? If he does not do that in any case, he has not done his job properly.
  Mr. Mitchison: I quite agree. That is reconditioning for the purpose of the Rural Workers Housing Acts, but the wording is so loosely used, that I was not sure whether it had been loosely used in this Motion. Certainly, references from the benches opposite have been to repairs and not to reconditioning, using that word in its ordinary sense.
  The gross and flagrant lack of repairs in many villages is a matter which should be remedied. It is extremely urgent. I do not regard that as a matter which is the same as reconditioning. The difficulty is that in a great number of cases the landlord himself is unable, or refuses, to repair. I have known cases in my own constituency where a landlord has deliberately said to the tenant, "You have a Socialist Government in now. They had better do it." That is not the business of the Government, it is the business of the landlord. If there are holes in roofs, they ought never to have grown to the size to which they have now grown, and they ought immediately to be repaired. It should be perfectly clear that that is the obligation of rural landlords.
  The hon. Member for Ripon suggested that some absolute priority ought to be given to agricultural workers in the provision of houses. All over Northamptonshire, there is a great deal of countryside which appears to contain purely agricultural villages. When one looks a little further, one finds that they are actually inhabited by boot and shoe makers and iron ore quarriers, who have to do their job in the country. They are entitled to decent housing just as much as the agricultural workers. More than that, they suffer, just as much as the agricultural workers do, from all the faults and omissions of the past. Therefore, this somewhat peculiar attempt to dislocate the whole rural economy is wrong in principle, and does not fit in with the
  1128
  facts. It would lead to a kind of countryside in which there are to be those actually engaged in agriculture, and no one else. I would be extremely sorry to see any such countryside in this country.
  The life of the country will have to be built up with the same variety and complexity and at least similar amenities to those of towns. What we are dealing with is not merely housing of individuals, not merely a question of agriculture, but how we are to evolve a type of rural community to replace that type, which the changes in our national life have made completely out of date. The old village of the squire, the parson, the farmer, and those who work for them, has now disappeared, and I am not sorry. In its place we have to get a democratic village life, with the village group centring round the educational facilities of a rather larger village than some to which we have been accustomed, having a kind of amenity that is not wholly dependent on the larger town, having larger facilities for recreation, larger facilities for all the common life, multiple both in its amusements and in its occupations. It is in the hope of communities of that sort, that one welcomes the contribution which the Government have made to encourage decent housing by public local authorities in the villages of this country, which have been neglected for far too long by those whose human duty it was to make them into communities of that kind.
  Mr. Assheton: Would the hon. Member be so good as to correct a misapprehension which results from his speech? He made a comment which led Members on this side of the House at least to think that he had made a serious misrepresentation. He said that the village of Pytchley was in a very bad condition. I do not know anything about that. He also linked that up with the Duke of Buccleuch, who, I understand, owns no property whatever in the village of Pytchley.
  Mr. Mitchison: I have already said that I have no intention of taking his Grace as any more than a typical large landlord. I did not intend to make any personal attack on him. I believe that the right hon. Gentleman is perfectly right—certainly I know nothing to the contrary—in saying that the Duke of Buccleuch has no land in the village of Pytchley. He is, I believe, a good landlord.
  6.27 p.m.
  Sir Ian Fraser: Various speakers opposite, including particularly the Parliamentary Secretary, tried to make it clear that the Government's policy for rural housing must of necessity be linked up with housing policy as a whole, for the whole country. That is obviously true, up to a point, but part of our case from this side of the House is that there is a special situation at the present time which threatens the country with peril in the next two or three years unless we immediately aid the bringing of men on to the land to take the place of the German prisoners, and fill up the gaps that are there. It is because of that fact that we wish to challenge the assertion that rural housing must necessarily receive only its fair and adequate share of the facilities that are available. "Fair and adequate" were the words used by the Parliamentary Secretary, as though, by claiming that the share which rural districts had had was fair and adequate, the matter was dismissed altogether. We are now faced by a position in which, unless rural housing is more than mathematically fair, and more than barely adequate, we shall not have the men on the land. That means we shall not have the food.
  In my constituency, which is the Lonsdale Division of Lancashire, there is a special situation. I doubt if there is any Division in Lancashire where there is a Greater demand for houses. It is an old custom there for the bulk of the farm workers to live in the farm houses rather than in cottages. It is a custom of days gone by, and it imposes an extremely severe effort and labour upon the farmer's wife. I believe that in most parts of the country 80 per cent. of all the farm workers live in the farm houses. It is true to say that when a young farm worker gets married, when he is 21, it is very likely that he will leave the industry altogether because he cannot find anywhere to live.
  I have one or two suggestions to make in my brief speech regarding ways in which some of these difficulties might be overcome. Before I do that, may I indicate my view about where houses should be placed? Nothing much has been said about that during this Debate. It is, naturally, the first thought that we should put country cottages in the village and, as far as possible, together, because that is economical and places them near the school, and so on. That, however, does
  1130
  not wholly meet the situation. The farms around the village very often are small farms and while it is true that cottages in the village will house labour for the farms near the village, many of the larger farms two or three miles away get no help at all. It may be said that we cannot make the children walk two or three miles to school. The alternative is to make the farm labourer walk two or three miles to work and he just will not do that if he can avoid it. He waits for a vacancy on a farm nearer to the village and then he leaves the more isolated farm.
  I suggest that we must meet this situation. We must get cottages for farm workers on the bigger and more remote farms which may be two, three, or more miles from a village. We must put them in twos or threes, so sited that the occupants can work on adjoining farms. If need be, arrangements must he made to take children by bus to school, as is done already in many cases. Also, consultations should take place with the local agricultural committees to decide where to put the cottages. By that means the bigger farms, and farms which are remote from small centres of population, will be helped.
  Why is it that housing has been held up? I do not want to speak for the whole country. Other hon. Members will speak for their own parts, but I know why it has been held up in my constituency. It is because of lack of labour and materials. Also, I am told, it is due to the fact that plans which the local authority think are finalised are then altered in some relatively unimportant detail by the Ministry of Health—either by the regional office or by the Ministry itself. Perfection is all right, but do not let us sacrifice the good for the best. If we can cut out even a delay of a week or two by taking a chance that the local authority will be all right, and if we stop fiddling so much in the Ministry, probably it will help to cut down some of the waste of time.
  What can we do? One suggestion would lead me into a general argument which might not be in Order, but I will just touch upon it. It is the general argument in answer to the question, "What can we do to get more houses in rural areas?" We must work toward a better economic system in rural England. At present it does not pay a man to work on the land. He can get much better wages in the

  1131
  town. It does not pay a farmer to grow this and that, because the price is not high enough. It does not pay a landlord to build houses. The whole economy of rural England is based upon the assumption that the law of supply and demand has ceased to exist. That is not true. The only way to cure this ill, as in the case of most of our economic ills, is to bring the law of supply and demand to our aid so that it pays people to do the things which we want them to do in the national interest. I have no time to develop that argument, but I believe that it is the main solution towards which we should work. There is much history involved in our present situation.
  Landlords should be encouraged to build. Wherever a landlord or a farmer-owner can build for the use of his own stockman or farm hand he ought to be given a licence at once without any question of whether it is on a ratio of four to one or 10 to one. The Government should make it pay people to do what they want as national policy. They should say to the landlord or the fanner, "If you are willing to build, for goodness sake come along and build. You shall have a licence; and thank you very much." Instead of making him fill in a million forms and then refusing to let him do it, the Government should bring to their aid the profit motive and the good will of these people. That is the way in which they will get something done. They should make it worth while. An hon. Member says: "We do not want a profit motive." We must have a profit motive. It is one of the most potent aids to help us overcome all the difficulties from which the nation suffers.
  I ask hon. and right hon. Gentlemen opposite to cease making propaganda about the tied cottage. It may have helped them to win seats in the rural areas because they were able to create so much prejudice about it, but it will not help them very much in the future. Nor will the 20 years of Tory misrule appear so important as what they have done in the years while this Government have been in office. Here, I venture to think, is the essence of the matter about the tied cottage. The Government should encourage the man who owns land to build. The way to encourage him is to say that he can keep the cottage which he has built for the purpose of his land.
  1132
  If they take away that right from him by any legislation, whether it is the abolition of tied cottages or the kind of legislation that safeguards tenants in all dwelling-houses, at once they remove the whole purpose of the cottage from the point of view of the person who can be induced to build it. The Government should aid people in their difficulties instead of alienating them.
  Where a cottage is built by an owner, it should be tied to the purpose of the land involved. Where it is built by a local authority, I still think that, at present, it should be tied to agriculture. In my own constituency two of the 10 cottages built two years ago, during the period of experimental building, are now occupied by officials of the Ministry of Health. Others are occupied by people not concerned with agriculture I agree with other hon. Members that we do not want our rural districts to be lop-sided or out of balance. We want all kinds of people to live in them, but if we are to get more men on the land we must tie the cottages to the land in the sense that we must make sure that agricultural workers are given preference and that cottages are not taken by others.
  I wish to make one final small suggestion. There are many big farms in my part of the world, and maybe there are in others, which used to be occupied by four, five, or six farm workers whom the farmer and his wife looked after. They cannot get the numbers now and in some cases a whole wing of one of these big old-fashioned farm houses may be empty. A licence should readily be given in any case where the farmer or the landlord is willing to cut off a wing and to make it into a flat for his stockman or foreman. That is another way in which to secure an additional unit of housing. These are the only points I want to submit to the House. I end as I began by saying that unless the Government recognises that rural housing should have the first priority, I am sure that by 1948 we will have such a grievous shortage of food in this country that the whole of the people will suffer. For that reason, the Government must give absolute priority.
  6.40 p.m.
  Mr. J. J. Robertson: I hope the hon. Member for Lonsdale (Sir I. Fraser) will forgive me if I do not follow him in the proposals which

  1133
  he has put forward, except to say that perhaps the points which he made have been tried and tested in the past history of rural areas. It is very largely because they have been tried and tested that we find the rural areas in such a deplorable state today. I would like to say a few words about the speech of the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank), who opened the Debate in the usual engaging way in which he always captures the interest of the House. At the end of his contribution he stated that he had said nothing new. I was hoping that perhaps he might have thought of the opportunities which he had in the past history of this House, when his party was in power, to make the type of speech which he made today in criticising the Government for lack of progress in this very vital housing question.
  If that speech had been made, for example, at a time when there was plenty of material and labour available, we might not have found it necessary to be debating this topic of the lack of housing in rural areas today. I join with him, however, in giving credit to the importance of this Debate. Indeed, it would he very difficult to exaggerate the importance of this matter not only to the people who live in the countryside, but also to the economy of the country as a whole. The present state of rural housing is nothing new. As many hon. Members have said, it is the result of long years of neglect. We find in the rural areas today villages with insufficient water, lack of drainage, grossly inadequate provision for the removal of refuse, widespread absence of decent sanitary conveniences, and ramshackle, damp farm workers' houses over 100 years old.
  This is one of the legacies which this Government have inherited from an age that is past, though perhaps some hon. Members opposite are rather reluctant to say goodbye to it. It is an age which this Government have been brought in to abolish or to supersede by something more in keeping with the spirit of our times. The question of housing is probably the greatest single factor which prevents people from finding useful employment in the countryside. The present need for workers in the agricultural areas is well known. I think it was the Minister of Agriculture who recently made a statement that something like 100,000 extra
  1134
  workers were required in the rural areas. I am bound to say, however, that no special concession has been made to any extent, so far as housing is concerned, to meet the needs of the people who want to find employment in the rural areas. I invite my right hon. Friend the Secretary of State for Scotland to give a little attention to certain areas in Scotland, particularly in the constituency which I have the honour to represent, where, very often, I discover cottages which are used exclusively by town dwellers for pleasure during the summer season. A considerable number of those cottages might be requisitioned and used for accommodation for the people who are producing food on the countryside.
  The Government's agricultural policy is a sound policy but that policy will not be effective unless modern conveniences and amenities in the way of houses, transport, electricity and water are brought to the countryside. The Government's policy of grouping houses in the country areas is also a sound policy. Those new villages should have shopping facilities, adequate recreation facilities, village halls, etc. So far as reconditioning is concerned, hon. Members opposite have very frequently criticised the Government's abolition or suspension of the Housing (Rural Workers) Act. That Act would not have been of any great benefit to us at the present time because many of the applications to recondition under that Act have not been fulfilled. The applications have been made and the Scottish Department of Health have approved them, but perhaps something like 1,000 applications have not been acted upon. There is, therefore, no point in making the case against the abolition of that Act when so many applications have not, as a matter of fact, been fulfilled.
  As to the position of rural building in Scotland, I am profoundly dissatisfied with the lack of progress which has been made. It is extremely unsatisfactory. An analysis of the new building taken from the January Housing Return shows that only seven of the 33 counties in Scotland built any permanent houses at all during the last two years. These built between them only 140 permanent houses. Twenty-six counties built no permanent houses at all. Twenty-six counties did, however, succeed in building a number of temporary houses.

  1135
  Altogether 390 temporary houses were built. Four counties have only completed one temporary house each. The county which has the greatest record of house building in Scotland is Lanarkshire in West Scotland which succeeded in building 103 up to the end of January.
  I would not like to lay the blame entirely on the local authorities because many rural local authorities have been handicapped by the fact that they have been waiting to proceed with water and drainage schemes, etc. I notice that the hon. Member for Galloway (Mr. McKie) points to the Secretary of State for Scotland to indicate that the Secretary of State for Scotland is entirely responsible for this. That is really not the case. If we want to trace the history of this, we have to go back to the inadequate grant made under the Water Act by the previous Government.
  Take the case of Berwickshire, which had a scheme for the introduction of a water and sewerage system before the war. The scheme has been before the Department of Health since 1939. The difficulty was, however, that it was quite impossible to carry out the scheme because of the fact that there was not enough in the way of a grant to proceed with it. However, sanction has now been given, and I want to thank the Secretary of State for Scotland for the expeditious manner in which he dealt with this when it was brought to his notice. Berwickshire has a shockingly large number of communities without any water supply whatever. But the county has now approval to proceed with a modified scheme. Nevertheless, out of the total programme of about 300 houses, only one temporary house has been built. That is an extremely unsatisfactory situation in a county in a part of Scotland which is badly in need of additional labour forces, particuarly for the agricultural industry.
  There is a labour problem in Berwickshire. There is no unemployment so far as agriculture is concerned in the rural areas of East Lothian and Berwickshire which I represent, and there is a difficulty in getting labour to proced with farming and, at the same time, the preparation of sites, water schemes and so on. I have a suggestion to make to the Secretary of State for Scotland. We have at the present time in Scotland a considerable
  1136
  number of the Polish Forces who will be merging into the Resettlement Corps. It might be considered if some of those Polish people could be settled in the rural areas in camps where they could be used for civil engineering works and site preparation. They would then be on the spot in case of any emergency at harvest time and when potato lifting, for example, required additional labour.
  This country has a rather lopsided economy in the sense that we have swollen populations in the cities which ought now to be directed to the countryside. The Government have an excellent opportunity of putting into reverse what used to be called "the drift from the land." We should now get people leaving the towns and going out to the countryside. I appeal to the Minister of Health and the Secretary of State for Scotland to seize this opportunity while we have it and to go ahead with the building of houses in the rural areas in order that we may attract into the countryside the over-swollen populations of the towns. Miners, agricultural workers, fishermen, merchant seamen, transport workers and bricklayers are more important to the country today because they are producers of real wealth than the city clerk, the civil servant or even the lawyer.
  To redress the balance of our national economy it is imperative that the Government should get more and more people back into productive employment by making it possible for them to find health-giving and useful employment on the land in both agriculture and forestry work. The first step in attracting the people from the over-populated towns is to provide adequate and modern houses in the countryside. When we fought the General Election one of the subjects we discussed was the building of a new Britain. It is with some considerable concern that I view the slowness on the part of certain people engaged in the building industry today. We shall not build the new Britain at the rate of 350 bricks a day. There must be some means by which we shall be able to get the building trade operative and the builder as well to co-ordinate their work in such a way that there is some incentive by which the houses can be built at a more rapid speed than they are going up at present.
  It seems to me that payment by results is the logical solution to that problem. I

  1137
  cannot say whether this suggestion or a direct appeal to the workers engaged in the industry may have the best result. However, the Government will have to take some steps to overcome the slowness in the erection of houses, which is very largely due to the chaotic condition of the building industry under private ownership. The trades unions have responsibilities in this matter as well. I hope that the trade unions will co-operate with the Government in every way possible to see that the actual work of building is speeded up as far as possible. Let the trade unions, therefore, face up to their responsibilities to the nation as a whole. If the Government and the trade unions combine to do this, the dividend which will result from a happier and contented people following useful employment in the countryside, will be rich in the extreme.
  6.57 p.m.
  Commander Galbraith: The House generally will agree with a great deal of what has been said by the hon. Member for Berwick and Haddington (Mr. Robertson), and we would particularly find ourselves in agreement on the need for speeding up house building. That is a matter which deserves the immediate attention of His Majesty's Government. We are today discussing rural housing. It has always seemed to me that housing shortcomings are much more obvious in the towns than they are in the country, and as a result of that there is a tendency to neglect the latter. That is a tendency which requires to be corrected. As the hon. Lady the Member for Anglesey (Lady Megan Lloyd George) said today, conditions of overcrowding, lack of sanitation and lack of other conveniences are as prevalent in the country as they are in some of the worst slums in our towns. That tendency should be corrected at once. What we have to aim at is to see that the standards of housing in town and in country are raised simultaneously. To do, that is a matter of urgent and, indeed, of primary importance to the whole of our national economy, as the hon. Member for Berwick and Haddington told us.
  That we need to produce in our country today the greatest possible proportion of our food is altogether unchallenged. As my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) said, when the prisoners of war have returned to their own countries
  1138
  we shall be very short of the labour force that will be required for that purpose. Not only, therefore, have we to keep on the land those who are presently engaged on the land, but we have also to see that many more people are attracted to the service of the land. In the towns there are attractions which the country cannot offer, but I know many people in Scotland presently living in towns who would be very glad to live and work in the country if only adequate housing accommodation was available there.
  In providing that housing accommodation, we fall short in two respects. There are in the first place insufficient houses, and in the second place the houses which do exist have not the conveniences which are available to people who dwell in the city. Until that balance is restored we shall not get an adequate number of people living on the land. So long as the balance remains as it is today there will aways be the danger that those on the land may move into the towns. It is essential, therefore, that the Government should concentrate on both these aspects. I do not believe that it would be possible to provide the number of new houses required in any reasonable period of time. These houses must, to a great extent, be scattered in twos and threes about the countryside. I do not think that building in villages is ever going to provide the answer to our problem in Scotland, and that is all the more reason why this matter should be tackled with energy, with resolution and with speed. If it is being tackled with resolution and energy today it is certainly not being tackled with the speed which we would desire.
  In the meantime, while these new houses are being provided, every effort has to be made to improve existing conditions, not only in fairness to the rural population but also to give an indication that it is the Government's intention to make good these conditions at the earliest possible moment. We have before us the report of the Central Housing Advisory Committee on reconditioning in rural areas. I believe that that points the way, and I hope that in the interests of the whole of the country the Government will speedily implement those recommendations. Here I say with very great regret that the companion report of the Scottish Housing Advisory Committee is not available to help us in our discussions. On 30th April last we were told that that

  1139
  report would be available shortly. On 3rd December we were told that the first part of it had gone to the printers in July, and that it would be published as a complete report in January. It is now nearly the end of March, and the report is not yet to hand. I would direct the attention of the Secretary of State to the fact that the English report was signed on 25th September last and was published on 27th February. My right hon. and gallant Friend the Member for Gainsborough pointed out that the Minister of Health had been somewhat dilatory, but the Secretary of State for Scotland is lagging even further behind.
  The Parliamentary Secretary tried in his speech to defend the dilatoriness in making these reports available by pointing out that it was very difficult to get reports printed in these days, but here I have the interim report of the Cost of Living Advisory Committee, which, I observe, was signed in London on 7th March and is today available in the Vote Office, so that that really is not a good explanation. The long delay on the part of both Ministers in publishing these very important reports seems to show that they are not very much interested in rural housing, or at best that they can see little need of urgency. In any event, it is extraordinarily unsatisfactory that we are unable to discuss the two reports together today. It does not speak very well for Government planning, or for that coordination between Departments which from Ministerial announcements we are led to expect but seldom experience.
  Scottish Members on this side of the House have decided that it would be better for them, instead of participating in this Debate today, to await the issue of the Scottish report, particularly as many English Members desire to speak in the present Debate. They intend to take a later opportunity of discussing Scottish housing more fully when the report is available to them. But the English report does bear out in every detail the advice which has been tendered to the Government time and again from this side of the House, and not least by Scottish Members, ever since the autumn of 1945, when the Lord Privy Seal announced that the Housing (Rural Workers) Act was not to be continued. I have no doubt in my mind, particularly now that this report has been published, that the decision then
  1140
  taken by the Government was not taken on principle or on merit, but was a matter of vindictive spite, in the mistaken belief that it was going to hurt the landlords, but it has been made abundantly clear in the report that the hardship falls upon the tenant and not upon the landlord at all.
  The tendency of the Government to concentrate on the building of urban houses is very well illustrated in the figures which appear in the Housing Return for Scotland dated 31st January this year. The total number of permanent houses which have been built, according to this document, is 5,874, but only 1,232 have been completed in the counties. That interesting comparison can be carried a little further. In some of our counties many of the population are employed in mining and in industry. I should say that the counties of Lanark, Ayr, Fife, Stirling and Dumbarton all come within that category. Of the 1,232 houses in the counties 793 were in the counties I have just mentioned. So we come to this conclusion, that out of the 5,874 permanent houses completed, only 439 are in areas which are predominantly agricultural and outside the industrial belt. The fact is that in the great agricultural counties of Aberdeen, Inverness, Perth, Argyle and Dumfries only 139 permanent houses have been completed. I wonder if the hon. and learned Member for Kettering (Mr. Mitchison), if he were here, would agree that that was fair. Certain it is that the hon. Member for Berwick and Haddington was not satisfied with these figures. It is bad enough to know that although the Government, when they came into power, found 3,832 permanent houses actually in the course of erection, they have, after 18 months, been able to complete only 5,210, but it is far more serious when we realise that out of that number only 439 are in the agricultural areas of Scotland. That, to my mind, is a record of which even this Government ought to be ashamed, although the Parliamentary Secretary during his speech seemed to be satisfied with the progress that was being made.
  So far as temporary housing is concerned, the position is very little better. Out of 13,351 houses which have been erected, only 1,702 are in predominantly agricultural areas. I say to the right hon. Gentleman that by one means or another he must correct those proportions if we are to get from agriculture the food which the

  1141
  country requires. I wonder whether he will tell us whether his policy in Scotland is the same as that which was indicated by the Parliamentary Secretary, that a preference would be granted to agricultural workers in regard to housing. In a written answer which the Minister of Health gave on 27th February, he said that the recommendations in this report would
  "involve legislation and as the House is aware there will be no Parliamentary time for legislation this Session. However, the Government hope to be in a position to announce their intentions before the end of the Session."—[OFFICIAL REPORT, 27th February, 1947; Vol. 433, c. 331.]
  I was very sorry indeed to hear the Parliamentary Secretary say that in spite of having had time to study the report, he had not changed his mind. I trust that that is not also the view of the Secretary of State for Scotland.
  Reconditioning is urgent. It is vital. It is of far greater importance than the great bulk of the legislation which is presently before the House. I suggest that time must be found for it. If the right hon. Gentleman is not able to persuade his colleagues to find that time then other means must be found, as suggested by my right hon. and gallant Friend who opened the Debate. Why is there all this delay? Why is there delay in publishing the report? Why is there delay in getting legislation, or in taking some action to remedy the present situation? I begin to wonder whether the right hon. Gentleman is waiting until all his water schemes have been completed and he is able to give us a piped water supply in all areas in the country.
  Does he find that money allotted to him is sufficient for that purpose? If he finds that it is insufficient I would like to know what steps he has taken to obtain more. We know that in many of the country areas no indication has been received that any grant is forthcoming in regard to the water schemes that have been submtted to the right hon. Gentleman.
  The Secretary of State for Scotland (Mr. Westwood): Is the hon. and gallant Gentleman sure of what he says?
  Commander Galbraith: I am perfectly sure of it. I have letters here that tell me that that is the correct position. Indeed, is it not a fact that the right hon. Gentleman in a written reply which he gave to a Question on 4th March, said
  1142
  that it was a fact? Did he not say that it had not been possible
  "on account of the limited amount of money available, to select water supply schemes submitted by the following local authorities, namely:
  The county councils of Ayr, Bute, Clackmannan, Dumfries, Dunbarton, Fife, Kinross, Kirkcudbright, Lanark, Midlothian, Moray, Nairn, Peebles, Perth, Renfrew, Roxburgh, Stirling, West Lothian. The town councils of Aberfeldy, Auchtermuchty, Duns, Eyemouth, Findochty, Grantown-on-Spey, Gatehouse of Fleet. Gove and Kilcreggan, Inverbervie, Lochgilphead, New Galloway, Rothes, Turriff, Stornoway, and the following water boards: The East Lothian Water Board, Stirlingshire and Falkirk Water Boards, The Airdrie Coat-bridge and District Water Board."—[OFFICIAL REPORT, 4th March, 1947; Vol. 434, C. 31.]
  The right hon. Gentleman should remember a reply which he gave to the House as recently as 4th March.
  I want the right hon. Gentleman to get a move on in this matter of finding the money that is necessary to carry out these schemes. If it is not found, much delay is caused by the holding up of those water schemes. Can it be that the delay is due to the Secretary of State not believing in reconditioning? Does he not believe that it can be successful? If that is so, let me remnd him of the many houses of distinction in this country which have been reconditioned again and again and that it has been proved beyond any matter of doubt that many of the old cottages of our country of substantial construction, built by craftsmen and suitable to our climate, can be modernised to provide not only good houses but also good homes.
  In any event if that course is not to be authorised, are the rural community to be condemned, as the hon. Lady the Member for Anglesey (Lady M. Lloyd George) said, for a generation at least to an inferior standard of housing than that which is enjoyed by their brothers arid sisters in the towns? Is the wife of the rural worker to go without those fitments and appliances which could be provided and to which she has an equal right with her urban sister? Surely it is not the intention of the right hon. Gentleman, or even of the Government to condemn the rural worker to live in out-moded conditions while the world moves on, or to condemn the agricultural worker's wife to a drudgery which the right hon. Gentleman has often condemned as being unnecessary under modern conditions?

  1143
  I would say this to the right hon. Gentleman: We expect him in the first place to redress the balance in new building as between town and country, and to introduce legislation which will modernise existing buildings. He knows perfectly well from the English report that it will not interfere with labour. He knows that it is an economic and sound proposition and that, practically, it is inevitable. All that is lacking is the will to act. I hope therefore that the right hon. Gentleman will press his colleagues and will make them produce that will to act.
  7.15 p.m.
  Mr. Dumpleton: I beg to move, to leave out from "House," to the end of the Question, and to add instead thereof:
  "welcomes the steps which the Government has already taken to repair the consequences of many years of neglect in rural housing and urges the necessity of continuing action to improve water supplies, sanitation and housing conditions, by means of new building first, and. when conditions permit, by re-conditioning suitable existing houses for occupation on a tenancy by agricultural and other workers."
  I am sure that all Members welcome the initiative which the right hon. and gallant Member for Gainsborough (Captain Crookshank) has shown in utilising this opportunity to raise the question of rural housing, indeed of housing in general. We have very much sympathy for the right hon. and gallant Member in that he had to open the Debate at very short notice, in the absence of his right hon. Friend the Member for Southport (Mr. R. S. Hudson). The task which he had to undertake, was however, well within his power. Those of us who are less experienced in Debate envy the facility with which he carried out this task. The right hon. and gallant Member described his own Motion as platitudinous. Indeed, his speech was in keeping with his Motion, it was unexceptionable; but what is implied in the Motion, and in much of what has been said, is criticism of the Government for the way in which they are tackling the problem of the rural areas, calls for comment. It is right and reasonable for us, in looking at the Motion and in considering what has been said, to survey and weigh up the task which the Government have to tackle in respect of the problem of housing in the rural areas.
  As has already been said by several other Members on the other side of the
  1144
  House, one must take into account not only shortages of labour, materials and components but also, if we are to survey the matter fairly, the legacy which the Government have inherited from the past. This is referred to in the opening words of the Amendment. There is no doubt that the six years of practical "standstill" in house building during the war have had a worse effect in the rural areas than in the urban areas. It is felt much more strongly there because of the accumulation of conditions, which have been described by many hon. Members in the Debate, as they existed in the years leading up to 1939.
  In the urban areas one person in four lives in a house built since 1918, whereas in the rural areas it is one in 10, so that the greater number of people live in the very much older and obsolete property which we know exists in the rural areas. There are a lot of reasons for that situation. One reason is that, by and large, the rural district councils who have been the housing authorities have varied to a considerable extent in the enterprise and energy with which they have tackled housing in those inter-war years. On the whole, though there was this great variety, it cannot be claimed on their behalf that it was well done, with energy and with vigour.
  Comparing them with the urban authorities, the present situation is that in the towns one family in eight is housed in a house provided by the municipal authorities, while in the rural areas one family in 13 is housed in a municipal house. One could take sample areas from different parts of the country to see how that comparison works out. For instance, in the Holland Division of Lincolnshire, one person in eight actually lives in a house provided in the inter-war years by the local authorities, whereas in Dorset, Devon and the Lindsey Division of Lincolnshire the proportion is less than one in 20. In the North Riding and Cumberland it is less than one in 35, in Herefordshire it is one in 100, and in Westmorland it is less than one in 100. This was borne out by the earlier report of the Hobhouse Committee published in 1944. That earlier report said that while the best councils had been exceedingly active, there were very many which did not have a good record. It said:
  "At the other end of the scale we find rural district councils who have been almost entirely inactive in housing. There are

  1145
  several districts where no new houses have been built by the council since 1919. Complete inactivity is fortunately rare, but an attitude of complacency in housing matters is found in a number of rural districts."
  That was one of the reasons for these conditions of neglect which form a part of the problem the Government have to deal with at the moment. Another reason, which in these more recent months has been remedied, was of course the inadequate subsidies that were given to local authorities to enable them to tackle the problem in those areas. Then there was the unsatisfactory position in the prewar years regarding the inspection and maintenance of housing by the local authorities, which again is referred to in the earlier report of the Hobhouse Committee. While active councils carried out their inspections regularly, at least once in five years, inspecting all the houses in their district as a matter of routine and seeing that the repairs were carried out, there were others which proceeded at a rate which would take them round their district about once in 70 years. The earlier report said:
  "We are satisfied that in a certain number of districts, which we should put at roughly 15 per cent. of the total, the local authorities have been content with far too low a standard of housing, both as regards the condition of the old and the number of the new ones that are required."
  So we have an accumulation of neglect and low standards and conditions. I think there is every justification for reviewing this past history of the rural housing position, although one realises the importance of facing the present situation and of "facing the future" in this matter. My hon. Friend has quoted from a document issued by the Conservative Party called "Looking Ahead." I am not concerned to argue what is the precise difference between "looking ahead" and "facing the future," but I am suggesting that in assessing the problems facing the Government one is entitled to look back and see what they have inherited from the past. I think one is also entitled to mention the responsibilities of many of our rural district councils, and their failure to be as active as they might have been in seeing that a high standard of repairs was maintained and proceeding with new building with much greater activity and vigour.
  One should not at the same time omit the responsibilities borne by the county councils. They had special powers under
  1146
  Section 88 of the Housing Act of 1036, either by co-operation and agreement with the rural district councils or, in default, by stepping in and carrying out housing responsibilities. Again, the earlier Report of the Hobhouse Committee remarked that only a few of them seemed to have realised their responsibilities. A large proportion of the county councils appeared to have been content to receive a yearly report from their rural district councils and to leave it at that. That is part of the task with which the Government are dealing. The hon. and gallant Member for Pollok (Commander Galbraith) in the housing Debate on 30th July last year made this extraordinary statement:
  "As a result of the drive for houses in the inter-war years the problem of England and Wales … had practically been solved by September, 1939."—[OFFICIAL REPORT, 30th July, 1946; Vol. 425, C. 788.]
  I submit that in view of the circumstances which he himself has mentioned this afternoon, and the conditions of some of the houses in our rural districts which have been referred to by many other speakers in this Debate, nothing could have been further from the facts of the situation than that statement.
  The Parliamentary Secretary has given a very good account of his Ministry this afternoon in the description of the work being done in the light of the background of the whole rural situation and the availability of labour and materials. He has also dealt with the problem as a whole and the way in which the Ministry is seeking to help the rural areas by the additional weightage and advantage given to them by the extra subsidy. That will satisfy the country that everything that can be done is being done to press on with this question of providing new houses in the rural areas.
  I would like finally to say a word or two on the subject of reconditioning, which has been referred to by many hon. Gentlemen opposite and is mentioned in the Amendment. I think it should be noted that the more recent report of the Hobhouse Committee, if hon. Members will look at paragraphs 13 and 14, admits that under the old Act, the Housing (Rural Workers) Act which lapsed in 1945, some of the reconditioning for which grants from public funds were made was not in fact satisfactory and amounted to very little more than patching up. I

  1147
  do not think that anyone would deny that as soon as conditions and the availability of materials and labour permit, as soon as it can be done without diverting valuable materials and labour from the first priority of providing new buildings, there is everything to be said for improving, by reconditioning, the standards of some of our rural houses.
  I would refer to the Ministry of Health's Annual Report for 1934–35 on the question of reconditioning houses under that old Act which were really not suitable for reconditioning, and upon which public money ought not to have been spent. In that year, the Ministry of Health said that there were many country cottages, the reconditioning of which would merely serve to perpetuate living conditions which can no longer be tolerated. I submit that the time is not yet when reconditioning can be relied upon as a solution, or as a real contribution to the housing problem in the rural areas. The Hobhouse Report, after a very careful survey and the taking of evidence, estimates that in the countryside there are available some 100,000 houses, which it classifies as being reconditionable. A house that is reconditionable must be a house which has not yet reached the stage when it ought to be demolished, and which has a certain level of habitability.
  But we have no evidence in the Hobhouse Report that those 100,000 houses will necessarily provide extra additional accommodation. If the accommodation is of a standard which is habitable, the chances are, in these days, except in one or two rare instances, perhaps, where there are buildings which might be converted, that it would not provide the additional required accommodation. In the main, where reconditioning has already taken place, it has not been to a satisfactory standard, and one wants to see the people who are compelled to live in such conditions given better standards as soon as possible. But I submit that there is no evidence in the Hobhouse Report that the reconditioning of these 100,000 houses would supply an appreciable amount of additional accommodation, which is what we badly want in the rural areas. Therefore, we ought to do nothing just yet which will draw away any material or labour needed for the provision of new houses.
  1148
  I know that reference has been made—and my own experience bears it out—to the availability in the villages of some labour which may not be available for the building of new houses because of the remoteness of the area and the immobility of that labour. But it is not only a question of labour and materials. One has to remember that, if the standards recommended in the Report are to be adopted, reconditioning would probably mean the adding of bathrooms or additional lavatory accommodation, and that the necessary baths and sanitary fittings would have to be drawn from the available pool, which is in very short supply, for the building of new houses. I submit that the question of reconditioning should only be considered—and I hope that the Government will only consider it—on certain conditions. First of all, it should not be encouraged until the materials and components are available without prejudice to new house building. Secondly, only those houses should be reconditioned which are of a fairly high standard, and the standard of reconditioning should be at least equal to that recommended in the Hobhouse Report, and a much better standard than that under the old Act, and, finally, that none of the houses that are requisitioned should remain as "tied" cottages.
  Something has already been said about the evil of tied cottages. The hon. Member for Lonsdale (Sir I. Fraser) accused hon. Members on this side of the House of raising at the General Election a prejudice against the tied cottage. There is no need to raise any prejudice; the bitterness is already there, owing to the bitter experience which workers in the countryside have suffered. I will leave other hon. Members to deal with the "tied" cottage.
  In conclusion, I want to ask the Secretary of State for Scotland, who is going to reply, to answer just one question about the availability of Canadian cedar-wood houses. The fifth report of the Select Committee on Estimates referred, in paragraph 51, to the Canadian cedar-wood houses, and stated that a licence had been granted for 250 of them to be imported. It was stated in evidence that it would be possible to import 1,000 of these houses next year. The Parliamentary Secretary said something about the Swedish houses,

  1149
  and I should be glad if we could hear something about the Canadian cedar-wood houses.
  Mr. Speaker: May I remind the House before I call the next hon. Member that a number of Members wish to speak in this Debate, and that there is not very much time? We used to do about four speeches an hour; now we are doing barely two and a half. Hon. Members do not seem to be able to concentrate as well as they used to do.
  7.37 P.m.
  Mr. Collins: I beg to second the Amendment. I shall endeavour to bear in mind your injunction, Mr. Speaker. I think this Debate has been comparatively free from the kind of recriminations and harking back to the past which have characterised previous Debates on housing. I welcome that fact, and will try to keep my remarks on a similarly constructive level and to use comparisons only where they are necessary to illustrate the point. The people of this country are perfectly well aware where the main responsibility for the lack of houses lies. At the same time, this Government have accepted the responsibility for supplying houses, and it is a responsibility which they will discharge. I agree that the provision of houses in rural areas is one of vital importance. Its importance is emphasised today by the question of food supplies. But there is already evidence—I know that this is a fact—of the priority which is given by the Ministry to allocations of houses in rural areas. Examination of the zonal allocations now being made reveals that there is that priority. The question of houses actually completed, however, is, to some extent, influenced by the past, because, in many cases, local authorities have been slow starters.
  There is one local authority in my own area who were slow starters, but who will, by the end of the year, have produced 126 new rural houses, that is, in a period of, say, two and a half years. But if one looked back at their previous record, one would find that they only produced 90 houses in the preceding 14 years. Therefore, it will be seen that they have got a move on to the extent of some five times their previous rate of building. Many more instances of that kind could be quoted. I think that the employment by the Government of the local authorities as
  1150
  their chosen instruments has been justified up to the hilt. One very encouraging sign has been the enthusiasm of members of local authorities to get the houses built. We are often told that only the profit motive will give that drive and incentive which will get the houses built, but anyone who reads the reports in local newspapers of council meetings will realise how keen are the authorities on their job. Indeed, they have infected hon. Members opposite with their enthusiasm. We have heard speeches today, including that of the hon. and gallant Member for Pollok, in which he urged the Government to do something on behalf of the housewife, emphasising the sufferings which we know only too well are being experienced. We welcome that enthusiasm, though, perhaps, with a faint regret that those speeches were not made even as late as 1935, when many more houses could have been built than actually were built.
  It has been suggested that the rural district councils are not allocating a sufficient proportion of the houses to farm workers. I do not know what the position is all over the country, but I can assure the House that the authorities which I know are giving priority to farm workers, either by giving additional points because they are farm workers, or by allocating houses according to a slightly different system which gives preference to agricultural workers. However, it would be most unwise to give 100 per cent. allocation to farm workers as suggested by the hon. Member for Ripon (Mr. York), because it would completely ignore the fact that farm workers depend on other rural workers who must be housed. They depend on the people who build the houses and who, in turn, must be housed. One fact that has escaped notice is that 34,000 more regular workers have come on the land in the last 12 months, and they are already housed in one way or another. For the first time in recent years we have a Government which have stemmed the drift from the land and have started to turn the tide in the other direction. It was suggested by the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) that we should change the ratio from four to one in the building of local authority and privately owned houses to six to four, or something like that, but I would remind the House that the giving of shorter odds in this way

  1151
  would mean much longer odds against the farm worker getting a house. Therefore, it would defeat the very object of getting more houses for farm workers. We must remember that with this Government, the farm worker and the miner is no longer the outsider that he has been with previous governments.
  On the question of reconditioning I do not want to go over ground which has already been covered, but I submit that we cannot agree that houses should be reconditioned if that will take labour away from new building or if it will involve in new building less use of materials in short supply. There is confusion between minor repairs and reconditioning. There is an arrangement whereby elderly non-mobile workers in rural areas can be given a licence to build a new house, and the skill and possibly the materials required for a major reconditioning, which is what is recommended in the Hobhouse Report, are such that if those workers have that skill they can and should build a new house. The only justification for this kind of reconditioning would be if it could be shown that it could be done with a very minor amount of materials, and that there was in the area concerned no possibility of employing that labour immediately upon the construction of new houses.
  I want to deal with a point which has received little attention during this Debate, but which is the overriding factor in the building of houses. It is not so much the labour problem. It is the question of materials. One of the major materials, timber, is a matter over which we have no immediate control, but I urge the Government to take every possible step to get any supplies of timber which may be available and suitable for houses. I think there are a number of building materials the production of which can be increased to a higher level than obtains at present. With regard to some of them, at least, I regret to observe a serious decline which I hope the Minister will be able to explain when he replies. It may be due to seasonal conditions or to exceptionally bad weather conditions, but this decline, in part, will be continued unless some special arrangement can be made with regard to fuel. I would refer to roofing tiles and bricks, such as the single-lap clay tile which is made and sold all over the country. During the war there was
  1152
  almost a complete closure of the kilns where these tiles were manufactured. The kilns have now been reopened and new labour has been introduced Men have been given a new skill, and production is considerably increased.
  I notice that the production of roofing tiles has increased to nearly 3½ times, at the peak period, over 1945, although it has since dropped a bit. I understand that in one big kiln at Bridgwater they contemplate the necessity of closing down altogether because their realistic fuel allocation has been reduced to 33 1–3rd per cent. of normal. These people have gone to very considerable trouble, and have made a drive to increase this essential production which makes a very big saving in timber in the construction of roofs. The fact is that the fuel which they need is for the final process. It is not until these tiles are fired that they are finished, and a possible reduction of 20 per cent. in their fuel allocation means a drastic reduction in their output. I recognise the shortage of fuel, but if there is a possibility of getting a new realistic allocation of fuel I ask the Minister of Fuel and Power to give instructions to his regional officers to see that brick and tile makers who may be about to shut down their kilns, or who may have already done so, should be given an idea of their allocations for the future. There is a firm in Wellington in my Division where I understand a kiln will be allowed to go out this week which has not been out for 60 years. If it is unavoidable it is very regrettable, but if by some means of investigation, we can avoid letting that kiln go out, it would be disgraceful if it was not avoided, because the kilns must be kept going. We cannot let the men down in this way.
  Mention has been made of the Airey house which is being produced at the Royal Ordnance Factory at Puriton, Bridgwater. I know the men there have not been given any information as to the target figures. They see these houses lying about in parts, and they believe they are not wanted. All sorts of tales of that kind get about, and that reduces effort They should be told the target. They should be made to know exactly where they stand. With regard to electric fittings, production has considerably increased, but the priority system is not working properly because we all know of houses which are ready except for a few

  1153
  small components. I saw some new houses in my division on Saturday. Ten more houses could have been opened that day but for the want of a little bracket to connect up the electric wiring outside. Matters of that kind require much more co-ordination. Then there is the question of the china clay waste concrete blocks. Many attractive houses have been built, and a lot more could be made with these blocks. At one works at St. Austell half a million of these blocks are lying about because there is nowhere to send them. They cost only half as much as Belgian imported bricks, and they are much more attractive. I hope the Minister will bear that point in mind.
  Mr. Douglas Marshall: I trust the hon. Gentleman realises that the production of china clay is now very precarious owing to the shortage of fuel. I hope the Minister will take due note of this fact, and will take the necessary action.
  Mr. Collins: The same position obtains with bricks and tiles, but there are many in stock, according to my information. My last point is the vital one of water and sanitation. I am aware, as no doubt are other hon. Members, of housing which is being held up, and in some cases deliberately held up, by the local authority because they know that by the time those houses will be built there will be no water. It is a fantastic situation to read in local newspapers in the country, as I did in a Taunton newspaper a week ago, that in a month or two there will be a water famine, when practically half England is under water. That, unfortunately, is one of the major results of the miraculous unenterprise of the past. This problem needs tackling urgently. I was gratified to hear the Minister say that some £63 million worth of schemes had been submitted for water, drainage and sanitation. But then he very much depressed me, at any rate, by saying that of the £20 million worth of water schemes submitted only some £2 million worth had been accepted. I say that 10 per cent. is not nearly good enough, and I hope this will be treated as a matter of major urgency.
  Last Saturday I saw a farmer in my own district, and he told me that they have a pipe water supply but have had no water on the farm for seven weeks; and for the last two or three months all the water for cattle has had to be taken out of a ditch, which will be empty in, possibly,
  1154
  two or three months' time. This is a matter of vital importance. The question of sanitation is not perhaps so urgent, and I do suggest that housing should never have been held back because main drainage may not be immediately available. Better a dry lavatory temporarily than to hold back a housing scheme. Too long have we had these justified complaints from people living in the country: "My lavatory and larder are next door to each other, and I have an open, leaking cesspool just outside my kitchen window." They are disgraceful things, which one can only imagine; and if the builders or so-called planners of those days—and fairly recent days, too—were sane, then they just did not care. That is the only thing one can assume. But that cannot be tolerated any longer. These are matters of considerable and overall urgency.
  In spite of all the difficulties, I feel that something very considerable has been achieved in the rehousing of some one million people, in addition to the very heavy burden of war damage repairs. It is, indeed, a spectacular achievement. But "complacency" is not the order of the day. Every possible effort that can be made must be made in order to house adequately the people of this country. And I suggest that in that effort agricultural and rural houses must be given a top priority, every bit equal to that given to miners. We must maintain the high standards of building which are now being achieved in the countryside; standards of housing for people in the lower income groups, which were never even imagined a few years ago, with components and fittings which are suitable for any type of house. They are the standards we need, and they are the standards which are being provided by this Government. We must go for quantity while maintaining the quality; and let no effort be spared to produce the houses the people of this country need.
  7.55 p.m.
  Mr. J. H. Hare: When I first saw this Amendment on the Order Paper I had hopes that there was a certain section of the party opposite, even if the Members of it happened to sit on the back benches, prepared to stand up and tell the Government that they were not satisfied with what was being done as far as rural housing is concerned. I very much regret that we have had to

  1155
  listen to nothing but a mutual admiration society—the back benchers scratching the backs of the front benchers. I was particularly interested to hear the hon. Member for St. Albans (Mr. Dumpleton), who moved the Amendment, say that everything that can be done is being done to press on with rural housing. But just before he said that, he said that complacency in housing matters is found in a number of rural districts. I suggest that he is ignoring the beam in his own eye, and that that complacency of which he complains in a certain number of rural authorities is very evident today amongst supporters of the Government.
  Mr. Dumpleton: When the hon. Member refers to the quotation which I read from the Hobhouse Report about complacency in certain rural areas, he will realise that I was referring to the description in that Report of some of the rural areas as they were before the war, and not at the present moment.
  Mr. Hare: I understood the hon. Gentleman quoted that presumably with the object of saying that he agreed with it. I did not wish to misrepresent him in any way. I had a fear that the Parliamentary Secretary, and the other front bench speakers today, would, in fact, show the complacency which we have had to suffer today, because in the Debate last week on the redistribution of manpower I was astounded and horrified to see that the Minister of Agriculture introduced that very atmosphere when answering points which had been raised in connection with agriculture during the course of that Debate. I am sorry that that right hon. Gentleman has not found it possible to be present at this Debate, although I am glad his Parliamentary Secretary is with us. However, I feel that on a Debate of this importance to agriculture, we might have hoped to have had the presence of the Minister. Last week the Minister of Agriculture added to the general volume of praise which the Government front bench is getting from its supporters, when, in describing the functions and difficulties of the Minister of Health, he said:
  "The Minister can provide the subsidy; he can do his best to provide the manpower; but it is the local authority which determines how many houses should be built, and how many are to be allocated for agricultural workers. As far as the Minister of Health is concerned,
  1156
  he has fulfilled his share of the bargain."—[OFFICIAL REPORT, 19th March, 1947; Vol. 435, c. 447.]
  There we have the Minister of Agriculture saying, in so many words, that he is entirely satisfied with what is being done; that he intends in no way to urge on his right hon. Friend that there are measures which could be taken to improve the supply of accommodation for the farming community.
  What he said was a fallacy. It is wrong to suppose that, in fact, local authorities determine the number of houses they are able to put up. We all know that zonal conferences, as they are called, are going on today, at which local authorities are being told: "You may want to build 200 houses, but, in fact, you will be allowed to build 125 this year." Or maybe, as my hon. Friend remarks, very likely 50. The unfortunate local authority, with the best intentions in the world, thinks it can complete its original programme, and is told it has to reduce by so much. Why? Merely because the whole of the Government's housing programme is wholly lopsided, and the Government do not know what to do to get it back on an even keel.
  The second fallacy enunciated by the Minister of Agriculture is the supposition that the Government are powerless to influence the proportion of houses to be allocated to agricultural workers by rural authorities. Surely, the Minister of Agriculture, if he feels that that is a good thing, has merely to persuade his Cabinet colleagues that it is a good thing, and it will be possible for the Government to direct the rural authorities to make a certain allocation of their new houses to agricultural workers?
  What, in fact, is the record of the Minister of Health? We are sorry not to see him with us tonight. The first thing that he has done on taking office has been to repeal the Housing (Rural Workers) Act and to stop reconditioning during the past LS months. I should like to quote one short paragraph from an article in "The Times" of 17th March. "The Times" said:
  "Evidence received from local authorities confirms the opinion that thorough reconditioning will provide modernised houses for about half the expenditure of labour and materials required for the same quantity of new houses. There is labour in the countryside able to do the work of reconditioning which is not available for building new houses. The small

  1157
  builder employing two or three men can well undertake the careful individual work required in reconditioning, although he cannot undertake new housing contracts. It is true also that many of the craftsmen in villages are more conversant with the repair of old buildings than the erection of new."
  I am not pretending that reconditioning is by any means the major part of the problem which faces the Government. What does horrify me is that the hon. Gentleman the Parliamentary Secretary to the Ministry of Health gets up and tells us today that, for far as he is concerned, he is completely prepared to ignore the advice of the Hobhouse Committee. Probably another two years will elapse before fresh legislation takes its place.
  Mr. J. Edwards: I must point out that at no stage did I say anything that even remotely could be construed in that way.
  Mr. Hare: I do not wish to misrepresent the hon. Gentleman, I am sure. What he said was that he was not prepared to urge his master or his colleagues to bring in legislation this Session in order to allow reconditioning to take place.
  Mr. Edwards: That is entirely different. The suggestion which the hon. Member made in the first instance was, that I categorically denied the validity of the Hobhouse Committee's Report. I did not say anything of the kind. I said the Government hoped to announce their intentions before the end of the Session. I should like the hon. Member to do justice to what I said, and not to make up words in his imagination.
  Mr. Hare: I do not want to enter into a long argument with the hon. Gentleman: I do not wish to delay the House too long. But the point is that the Hobhouse Report made it absolutely clear that this is an urgent matter, and that urgent steps should be taken; and it is perfectly obvious that the hon. Gentleman has no intention of taking any urgent steps at all. There is the first piece of constructive help which the right hon. Gentleman the Minister of Health has given to the farming community. The second point is that he has, as my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out, stressed that the rural authorities are completing a larger proportion of new permanent houses than other local authorities In fact, the number of new
  1158
  permanent houses provided by local authorities for agricultural workers amounts to the insignificant figure of 600. We maintain that that is a totally inadequate number to fill the gap of what is really required.
  The next thing that the right hon. Gentleman has done is to go on insisting on this four to one ratio. It is quite obvious that that four to one ratio this year is, in fact, going to go down to five to one, and that it is going to work more and more against the private individual who is prepared and willing to erect farm cottages to let to farm workers. These are the great contributions that the Minister of Health has rendered to the farmers, as far as improving their conditions of housing in the countryside is concerned.
  What should be done? I should like, first, to join my hon. Friend the Member for Ripon (Mr. York) by saying that for a limited period—and I would suggest three years—rural district councils should be directed to allocate a number of their new houses to agricultural workers. I would not agree with the proportion suggested by my hon. Friend. I would say that 50 per cent. of all new houses completed by rural district councils should be allocated to agricultural workers for the next three years. I say that because the points system on which the majority of local authority houses are allotted does, in fact, work against the agricultural worker. He is not receiving the priority that the hon. Member for Taunton (Mr. Collins) said he is. The probability that he is not an ex-Service man puts the agricultural worker down ten points on the list. I am not suggesting that such a decision would not create hardship. I am not saying that the present system, all things being equal, is not fair. But the point is that we are about to face a really major crisis in agriculture, and we must be prepared to alter our existing priorities in the allotment of houses.
  Next, I suggest that the regional planning officers really must pay more attention to local advice in the whole of this housing question. My hon. Friend the Member for Lonsdale (Sir I. Fraser) brought out this point well. I have two recent examples in my own constituency, where, although the rural district council and the county council have urged the regional planning officer at Cambridge to

  1159
  approve the selection of two certain sites for the construction of houses, the recommendations have been turned down on the general directive which that regional planning officer has from the Minister of Town and Country Planning. The sites were turned down on the basis that the communities for which they were to be built were too scattered for the necessary permission to be given. I am glad to say that in one case the decision has been reversed. But in areas like East Anglia, we do not have great numbers of large villages; and we have scattered parishes which are entirely devoted to farming. If the Minister's present policy of concentrating the vast majority of the new rural housing into large villages is continued, it means that a large proportion of the farmers in my part of the world, anyhow, will not be able to get new houses built for their workers by the local authorities.
  The next point I do most urgently ask the Government to consider is the point which, I thought, was ably expressed by the hon. Lady the Member for Anglesey (Lady M. Lloyd George). The hon. Lady said, in words far more eloquent than mine, that the Government must seriously consider treating the needs of the mining and agricultural workers, so far as housing is concerned, on an equal level. The Economic White Paper gave a certain lip service to that idea, although the recommendations about the mining workers were stressed in very much stronger terms than those concerning the agricultural workers. I strongly submit that farm workers deserve to get a large proportion of the prefabricated type of house out of the general pool, and that they should be treated in a similar way as the mining community. The final measure which I suggest the Government should take is that they should reintroduce legislation on the lines of the Housing (Rural Workers) Act and as quickly as possible. We are introducing foreign labour to help to solve our short-term labour problem, but we must not in this House for one moment take any other view but the view that the encouragement of more British labour into the agricultural industry is the only sound, long-term solution that will create a healthy agriculture in this country. A bad start has been made. Although a large number of men who were formerly in the Forces are now back at their farm-
  1160
  ing occupations as a result of demobilisation, we had hoped to get a considerable recruitment of new labour into agriculture from demobilised members of the Forces. It is true that the vocational training scheme, in which 54,428 men have taken part, has, on the whole, been a great success, but, out of that 54,000 who participated in this scheme, only 3,958 took the agricultural course. Considering the importance of agriculture in our present economic position, that is a very low figure indeed. It becomes even more serious when we realise that, out of the 3,958, only slightly more than 600 actually completed the course.
  The only way in which we can get men back to the land, and in which we can prevent young people who are born in the countryside from continuing to drift into the towns, is to do what all hon. Members of this House want to see done, and that is, provide them with houses with the normal facilities of electricity, piped water supply and so on, which are available to the townsman. It is no use doing what so many hon. Members like to do—singing a song about the evils of the past. It is a present problem which we have to face, and on the success of the measures to deal with this problem, I believe the whole future of our country may depend.
  8.14 p.m.
  Mr. Lambert: Nearly every hon. Member who has spoken on this side of the House has been concerned with our food situation during the next year or 18 months. I am surprised that no hon. Member on the opposite side has shown any concern at all about what the food situation will be during the coming year. I do not think I exaggerate the position when I say that we may well face starvation unless we can very drastically increase our output of food. It is probably for this reason that hon. Members of the party opposite appear to be so satisfied with the performance of the Government so far with regard to rural housing.
  If I am not too optimistic, I would like to discuss for a few moments the question of the long-term provision of houses. Many hon. Members opposite are convinced that all new houses should be built near a village. I admit that that policy has great advantages, but I suggest that it

  1161
  would be an advantage if at least a proportion of the houses were built near where the men have to work.
  Mr. Stubbs: Does the hon. Member mean tied cottages?
  Mr. Lambert: If we are going to build cottages, some should be built near where the men have to work. The first advantage is that the workman can go home for his midday dinner, and the next is that, if he is to look after stock, it is essential for him to tend them early in the morning and late in the evening. Often, he has to be there in the middle of the night. Cows have an awkward habit of calving in the small hours of the morning, and, unless a man lives close to his work, he cannot look after his stock properly, and, unless he does that, we cannot produce more milk and more meat, as we are urged to do at the present time.
  Mr. Alpass: The hon. Member wants to tie the man, as well as the cottage.
  Mr. Lambert: We want the houses built near the farms. I am not obsessed with the question of the tied cottage, which, like so many other things, seems to worry the hon. Member. After the last war, a few houses were built in rural areas. The Minister responsible has since gone to another place. Apparently, he lasted only a short time at the Ministry of Agriculture, owing to the very limited success of what he did in 1920 in trying to provide houses. One thing we find about his houses is that they are very rarely occupied by farm workers, and there would appear to be two reasons for this. First, the rent was too high when wages were low; and secondly, the occupiers of these houses were given no facilities for keeping pigs or poultry, and it is vital, to my way of thinking, that the countryman should be enabled to keep some livestock. If he is built a house away from the village, it is obvious that he can have more land. Thus he will be able to keep pigs, ducks and fowls, and possibly grow a few fruit trees, and nothing is better for a family than the feeling that they own something.
  I was disappointed to hear that the Parliamentary Secretary was not going to do anything drastic at once about the Housing (Rural Workers) Act, because if we are going to get more food quickly,
  1162
  we must not neglect any opportunity to get more men back to the land, and we can best do this by improving their accommodation. In Devonshire, in the past, we have made great use of that Act. Two thousand houses during the interwar years, were modernised, and now there are a further 6,000 waiting to be done, and they are worth while doing. I hope that, if this Act is ever re-introduced, the rural district councils will be given the completest latitude. I deplore the way in which the present Government is gradually taking all power away from the rural district councils, while saying that they co-operate magnificently. I would like to point out that they are popularly-elected representatives of the people. They, if anyone, should have a knowledge of the requirements of the district. In my constituency there are four rural district councils, all keen to get on with the housing programme. Yet at every turn they have to get permission from Bristol. If they want to buy a building site, they have to send 10 copies of the plan of the site to various authorities. When they want to build houses, they have to send detailed plans for approval by the regional architect in Bristol. All that this official in Bristol does, is to reduce the nominal cost of the house, by specifying inferior materials, by reducing the outdoor and indoor fittings, such as built-in cupboards, kitchen dressers and outside water tanks. That is no saving, because, at some future date, all these fittings will have to be put into the house. I am told that the cost of Government and local authority staffs supervising housing is about £300 per house.
  Mr. Stubbs: Who told the hon. Member that?
  Mr. Lambert: A distinguished architect. I would like to be told by the Parliamentary Secretary that I am wrong. If I am incorrect, I would be very grateful if he could give an estimate of the figure. This detailed control from above, is only having the effect of delaying the building of houses.
  The rural district council in the area in which I live in Devonshire were offered eight Swedish timber prefabricated houses. Knowing they could get no other houses, they jumped at the offer, and decided to put four in one village, and four in another. Then began a long corre-

  1163
  spondence with the regional office in Bristol. They could not get replies to letters, and eventually decided to send the surveyor to see the architect. He apparently was a busy man, and could not make an appointment for three weeks. The appointment was duly made, but, after a week, they were told that the appointment could not be fulfilled, because the regional architect was going on a holiday. Meanwhile, the wooden partitions of these houses had been dumped in fields. I went to see one lot of four houses. The only protection they had against the weather was torn balloon fabric, for which the council had to pay a rent of 30s. a week. This fabric was kept in position by stones, and branches, and gave little or no protection against the gales that came off Dartmoor, the rain, and the sun. I cannot help thinking that this form of "seasoning" did not improve the comfort of the houses.
  I urge the Parliamentary Secretary to give rural district councils much more latitude, especially as they have shown that they are so willing to co-operate. I admit that there may be a few who are perhaps not so keen, but it is not worthwhile holding up the whole housing programme because one or two are not playing the game completely. Unless we can get more houses, especially in the countryside, we shall go short of food during the next two or three years, and, from the longterm point of view, the country can have no better investment than a prosperous, happy, and contented, peasant population.
  8.25 p.m.
  Mr. Dye: One advantage a Member has in sitting through a Debate like this, and being called on fairly late, is that he is able to sum up the trends of thought of hon. Members opposite. I have been surprised by two of these trends. In the first place, hon. Members opposite seemed very willing to blame the Government for any shortcomings on the part of the rural district councils. From my experience of rural district councils, I should say they are largely composed of Conservatives. If, therefore, there are shortcomings on the part of the district councils in the building of houses, hon. Members opposite ought to overcome that by giving the necessary advice to their friends in their constituencies as to how they can get on
  1164
  with the job. I have also noticed that not a single hon. Member opposite has breathed a word about a landlord or farmer providing a new house. As they represent the party which has been connected with the ownership of land, and as this Government have made special provision, by means of subsidy, for landowners and farmers to build new houses, without any restriction whatever—
  Mr. Lambert: I have a case in my pocket. I did not mention it, because of shortness of time, but it is the case of a farmer not being allowed to build a house owing to restrictions.
  Mr. Dye: I am not going into any particular case, but I am pointing out that nothing has been said since 3.30 p.m. today by any hon. Member about a farmer or landowner providing a new house. All they are asking for is that these same people should be allowed by means of Government grants to recondition houses which they already own. There never was a time in the history of this country when the owners of land and farmers were in such a beneficial position to provide new cottages for their people. When, therefore, hon. Members opposite speak of the shortcomings of rural district councils in this respect, they might well turn to their friends and ask why, if the district councils, which are largely composed of Conservatives, cannot get on with the job, the owners of the land do not step in and make good the deficiencies. There is nothing whereby a district council can withhold a licence or a permit from a farmer or owner whose plans are approved as suitable and prevent him from getting on with the task. They have equal priority with any district council in building cottages for farmworkers. In that respect they have a privilege enjoyed by no other class in the country. No other employer, or capitalist, is in that position today. Yet landowners have completely failed in that respect—
  Mr. J. H. Hare: There seems to be complete divergence of opinion on a point of fact. I wonder whether the Parliamentary Secretary could tell us whether the hon. Member is right?
  Mr. Dye: Part of my time is spent as a rural district councillor, and part as a county councillor, dealing with these problems every week, as I have done for the past 14 or 15 years. From that

  1165
  experience, I know I am speaking the truth in this matter. I know that some of the most enlightened farmers in Norfolk are building cottages under the conditions laid down by the Minister, and are receiving subsidy in respect of that. If hon. Members opposite are sincere in their desire, and if their constituents are sincere in their desire, for a great step forward in rural housing, they have abundant means of getting on with the task.
  Another thing on which there seems to be a difference of opinion is the question or reconditioning of cottages. It is no good trying to decide this on a basis of any abstract belief. It seems to me that we have to examine the problem of housing in rural Britain and decide what are the essential steps to be taken to meet it. There is no doubt that the first need is to meet the requirements of families who are without homes of their own, whether they are in village or town, whether they are agricultural workers or workers of any other industry. Those people, who are living with their "in-laws," most of them having been married in recent years, and who have one, two or three children, should have the first claim on the new houses, and it is the duty of rural district councils to provide them.
  The second class for whom rural district councils should build are the new entrants required to go into agriculture. In neither of these two cases will reconditioning of cottages meet the case, unless the cottage happens to be empty. As there are few empty cottages there would seem to be little scope for reconditioning in that respect. The next class of people are those who are now living in the very worst cottages, which are insanitary, damp and without any amenities. Very few of those cottages can be suitable for reconditioning, and even if they can be classified as suitable, the families must be got out of them first. In my experience of the reconditioning of rural cottages the most satisfactory instances are those in which a pair of cottages have been turned into one. That reduces the number of separate dwellings, and before that kind of reconditioning can be undertaken there must be additional new houses. Therefore, on all counts, the Government must pursue, and get the district councils to pursue, the path of concentrating all available building labour and materials into the building of new houses.
  1166
  I do not know how long it will take the district councils to make up that leeway. There is, quite clearly, a difference in the speed with which the councils are getting on with their task in different parts of the country. Some hon. Members complain that their local authorities have hardly begun, but then, if the proportion of new houses being built is in relation to the population dwelling in the rural and urban districts, it means that if some councils are behind others are ahead. I happen to be in one of those localities where the rural district councils are well ahead of anything that they have ever done in the past. Hon. Members opposite complain of the scheme of allocating houses between the different authorities. Surely, the purpose of that is to see that one authority does not have permission to go to tender for more houses than it has building workers available to complete this year; to see that they do not poach on the grounds of their neighbours, but that all in the neighbourhood have a chance of obtaining the available building workers.
  The authority of which I am a member, the Swaffham rural district council, is an authority which went into conference and came out with a greater number of houses than had previously been allocated to it, because it showed, by the number of contracts it had already entered into, and the number of building workers engaged on those contracts, it could reasonably be expected to complete a greater number of houses by the end of this year. If we compare the progress of this one local authority with what it did in the years between the wars, we find that up to 1940 this district council built a total of 230 council houses. It has already, since the war, completed 28 houses, which is a more rapid rate than that at which the council ever built in prewar years. But it is permitted to complete, up to the end of this year, an additional 160 houses, so that in about two to three years it will have built more houses, some of which are already started and well on the way, than in the whole of the 20 years between the wars. Why? Because it has taken every step open to it to speed on the task of building houses. Neighbouring local authorities have not made quite the same progress, yet the general position in Norfolk today is that the programmes before the district councils for completion this year are anything from

  1167
  three to ten times greater than they were in the average years before the war. So we can say that district councils are getting on with their task, that the Ministry is aiding those which are determined to get on, and that within a reasonable time we can expect the leeway to be made up.
  But I wish to urge on the Minister that we must not fail in this task of housing. The people of rural England have turned their attention and their desires towards having their share of the new Britain. They have shaken off much of the apathy and indifference of the past; they now want to share in the advantages of really good housing conditions. The Government having carried through, in the Agriculture Bill, a sound agricultural policy which will give confidence and hope for the future, we now turn to those who live and work on the land and say, "We shall not let you down. We will not only go in for the ordinary traditionally built house, but will speed up, if necessary, by building methods and types other than the Airey house, the number of houses that can be made available in rural Britain either this year or next year."
  8.38 p.m.
  Mr. Derek Walker-Smith: I welcome the opportunity of taking part briefly in this Debate, not least because, in my maiden speech in this House, in the Debate on 17th August, 1945, to which reference has already been made, I stressed the need for rural housing and amenities. I did so at that early stage of this Parliament because it was a subject uppermost in the minds of a great many of my Hertfordshire constituents. That subject remains uppermost in their minds because of the unsatisfactory, slow progress made under the policy of the present Government. What is the problem with which we are faced in this matter? As I see it, the problem is really three-fold. First we have to extend and improve accommodation in the countryside in order to prevent any recurrence of that disastrous drift from the land in which 250,000 people left the countryside between the wars.
  Mr. Gallacher: Under Tory rule.
  Mr. Walker-Smith: I will not reply to the interruption of the hon. Member for
  1168
  West Fife (Mr. Gallacher) as I have given a guarantee not to speak too long. I will merely content myself by saying that his interjection is of the low standard typical of all his interruptions in this House.
  Mr. Gallacher: Very clever.
  Mr Walker-Smith: The second problem is to provide accommodation for the additional workers who are required on the land today. That involves accommodation for the additional 39,000 workers envisaged in paragraph 128 of the Economic Survey for 1947. It involves, also, accommodation for those farm workers whom we hope will replace the 100,000 to 130,000 prisoners of war who are due to leave the country in the comparatively near future.
  The third aspect of this problem is, in my view, a rather wider one. It is to give to the countryside as good housing and good amenities as can be found in the urban areas. This I consider to be a most important aspect of the problem. It is essential if we are to have a right social and economic balance in this country of ours. It is necessary that we should bring to the countryside as good housing and amenities as can be found in the towns in order to put the country people and country pursuits on at least an equality of regard with urban people and urban pursuits. We want to make the term, "a country cousin," a term of respect and even of envy instead of the amused and rather contemptuous indulgence with which it is regarded today.
  The solution of this threefold problem demands the enlargement and improvement of rural housing both by new building and reconditioning. I entirely agree with the Parliamentary Secretary that we cannot sever the rural housing problem from the housing problem as a whole. It is true, as has been pointed out, that since the war the proportion of houses built in rural areas to the whole number has been slightly higher than the proportion of the rural population to the total population. On that I say that the whole housing situation, of which this is a part, is unsatisfactory and there is a greater need in the countryside on balance than there is elsewhere except, of course, in the blitzed areas of our towns and cities. Reference has already been made by my hon. Friend the Member for Woodbridge (Mr. Hare)

  1169
  to the speech of the Minister of Agriculture in which he said:
  "As far as the Minister of Health is concerned, he has fulfilled his share of the bargain."—[OFFICIAL REPORT, 19th March, 1947; Vol. 435, c. 447.]
  I cannot agree that that is so. The responsibility of the Government is not so limited as the Minister appeared to imagine. The Government have voluntarily assumed responsibility in respect both of materials and of policy. It is true that the Minister of Health may divorce himself as an individual from responsibility for materials, but the Government cannot do that. I do not intend, in the limited time at my disposal, to go into the question of materials. I hope that in due course another opportunity may present itself. However, to say that the Government have fulfilled their share of the bargain is like a trainer saying to the boxer when he puts him in the ring, "I have tied one hand securely behind you. I have starved you for some time of the sustenance necessary to your strength. I have, however, given you my gracious permission to indulge in this hopeless contest. I have fulfilled my share. Now it is up to you. Go in and win." That is precisely the position which this detached attitude of the Government represents. The policy of one hand rendered useless arises from the Minister's insistence on his arbitrary ratio of four to one against private enterprise.
  As far as the general application of that goes, I had a good deal to say in the Debate before the Easter Recess in 1946. Tonight I say that it is especially important in rural areas. Housing in rural areas is particularly a job for the small and medium builder. The Parliamentary Secretary stated that we must have regard to our house building capacity in our housing programme. I entirely endorse that view. I have been trying to impress two things on his right hon. Friend for nearly two years now. They are, first, that the building industry is, in essence, still an industry of small and medium men in spite of the fact that there are some very big figures in it; and second, that the Minister of Health has habitually assumed an interchangeability in the building industry which does not, in fact, exist. It is not, in practice, possible usefully to absorb the whole of the small and medium builders in the countryside into the complex machinery of contractual
  1170
  building. That is the real distinction which this House should have in mind. It is not the distinction trotted out of houses to let and houses to sell. It is the basic distinction in the composition and capabilities of the building industry. I found his right hon. Friend very stubborn on this. I hope that the Parliamentary Secretary brings on open mind to the office which he now holds.
  He referred to the point of houses for sale and houses for letting. I would remind him of the existence of Ministry of Health Circular 92 of 1946. If he has not yet met that in his Department, I strongly advise him to look it up in order that he may inform the House of the progress made by private builders building for sale to local authorities in the countryside. I referred just now to the composition of the building industry in support of my contention that the four to one ratio is not practical in putting to work the full resources of the building industry. On the Ministry of Works Census of Builders, which was taken during the war, though the figures are still substantially right for my present purpose, there were only 260 firms in the country employing over 500 men; there were 1,245 firms employing between ion and 499 men; 5,918 employing between 20 and 99 men; 16,012 employing between five and nineteen men; 31,761 employing between one and four men; and there were 31,718 firms employing no labour at all.
  I think it is clear from that that there are large numbers of very small builders who cannot conceivably fit into the grandiose schemes of the Minister of Health. What is to happen to them under this fixed ratio? Are they to be condemned to inactivity merely for the sin of being small? If so, the right hon. Gentleman will be guilty of denying to the house-hungry people of this country the full resources of the building industry. What can these small men do? They can do two things. They can build houses in penny packets, not in great schemes, and they can recondition houses. They are admirably suited to both these purposes. They have local knowledge, they can command local resources, which have been referred to by the hon. Member for Hitchin (Mr. Asterley Jones), and they have a small nucleus of local labour. They can also do one further thing which is highly relevant in regard to the needs of agriculture. They can build houses in

  1171
  fairly isolated places in small numbers. They are more likely to do that than is a rural district council.
  It has been suggested that hon. Members on this side of the House have not claimed that farmers or land owners are anxious to build houses for their workers. Of course, they are anxious, but they are pegged down by the ratio. They are anxious to do it and they can do it with the help of the Finance Act of 1945, and, if it is not a tied house, with the help of Section 13 of the 1946 Act. If they can get the necessary licences, they can do it—
  Mr. Dye rose—
  Mr. Walker-Smith: I regret that I cannot give way to the hon. Member, because I have promised to be very short. So far as reconditioning goes, the same considerations apply; only, if anything, more strongly. As is well known, the shortage of material is greater than the shortage of labour, and that is an argument for putting the small man on to the business of reconditioning.
  I have some other figures regarding the houses put up by builders in the course of a year. I will not read those figures out in detail because of the shortage of time; but by comparing the two sets of figures which I have it is clear that there are a great number of builders in this country who build fewer than six houses a year on the average and many who do not build houses at all. It is right that those men should be employed on this work of reconditioning. That point is recognised in the evidence of the Ministry of Agriculture given before the Hobhouse Committee. The Report says on page 36:
  "It is believed that such a programme would be without significant effect on schemes for the erection of new houses, because it can be carried out by small rural builders who are generally unsuitable, because of their size, for employment in new construction."
  Perhaps the Parliamentary Secretary to the Ministry of Agriculture will pass that on to his hon. Friend the Parliamentary Secretary to the Ministry of Health. Only one voice is raised in opposition to the Hobhouse Report on this question of reconditioning including privately owned houses and that is the voice of the hon. Lady the Member for Cannock (Miss Lee). As far as that goes, the voice may be the
  1172
  voice of Jacob but the hand seems to be the hand of the right hon. Esau who is not with us today. A good deal of the phraseology there strikes me after a period of two years as very familiar indeed. The right hon. Gentleman passes for a strong man in the present Government and I hope he will show his strength in this to be even stronger than that of Samson, and that he will resist the advice given him, even though it comes from such a source.
  In that maiden speech to which I referred I said that the housing of the people of this country was of infinitely more importance than party politics. I still believe that to be so, and I urge action upon the Government both in the building of new houses in the countryside and in the reconditioning of old ones so as to improve and extend accommodation. They must do this if the people of this country are not to become disappointed and disillusioned with the promises which were held out to them in 1945 by those who are now in power.
  8.54 p.m.
  Mr. Alpass: The professed zeal of the party opposite for the provision of houses and more amenities in rural districts would carry greater weight if it were not so woefully belated. It was my good fortune to be a Member of this House in the Parliament of 1929 when the present Lord Privy Seal as the Minister of Health introduced a very important Measure to deal with the question we are debating. That Bill was described by the hon. Lady the Member for Anglesey (Lady M. Lloyd George) in a felicitous maiden speech as a bold and comprehensive Measure for dealing with this important social problem. It set a target of 40,000 houses to be built within a few years. That target was practicable and realisable. What happened to the Act? Successive Tory Governments refused to operate it and it became a dead letter. We are to-day suffering from the indifference and the callous neglect of those Tory Governments to implement that important Act.
  A little while ago the right hon. Member for Saffron Walden (Mr. R. A. Butler) deplored the lack of housing and other amenities in the countryside and in his own constituency. The best answer I can give him is to quote a letter I received from a gentleman, by no means sympathetic to the Labour movement, who held a position of pre-eminence in education in Western

  1173
  England and who is not unknown to the right hon. Member for Saffron Walden. What did he say?
  "I am now an old man. In going back to the country after many years, I can see how much worse the position is than it was 50 years ago."
  That confirms what I have said about indifference and neglect when the Tories had the opportunity and the power to deal with this question in an effective fashion.
  The right hon. and gallant Member for Gainsborough (Captain Crookshank) used a racing term. I will follow his example and say that the Tory Party are now running true to form. Their traditional policy has been to come out before every General Election as great reformers and also to be great reformers when they are in opposition, but when they have had the opportunity and the power to implement their promises, their enthusiasm has simply evaporated and they have begun to make excuses why they could not carry out the promises with which they had deluded the electors in times past.
  What is the record of the present Government on this question? I submit, with all respect and despite everything which has been said on both sides of the House about difficulties, that it is a record of which the Government have no need to be ashamed. What are the figures? Up to 31st January this year 18,450 permanent and temporary houses have been built in rural districts and 32,864 are now under construction. No one will say—not even the Minister himself—that he is satisfied with the rate of progress. but compare this record with the miserable figure of 124 houses—mainly built for people who were able to buy them—in the first 12 months after the 1914–18 war—
  Captain Crookshank: Lord Addison again.
  Mr. Alpass: There is always that gibe. The Opposition have short memories but the people are not going to be fobbed off in the future as they have been in the past.
  On the question of priorities I suggest that it would be most unwise on this point to interfere with the discretion of the local housing authorities, especially rural district councils. As my hon. Friend the Member for South-West Norfolk (Mr. Dye) has said, they are composed largely of land-
  1174
  Owners and farmers, and surely they are able to assess the needs of the people in their districts better than anyone outside. If the Government suggested dictating to them then they would be called dictators. We ought to trust them. In my constituency we have one or two district councils which certainly understand the needs of the people better than anyone in Whitehall or anywhere else. I suggest that the over-riding, dominant consideration in this matter should be human needs.
  With regard to reconditioning, I suggest that the acid test of its efficacy is not what hon. Members may say, and not what landowners or farmers may wish, but what the people who have to live in those reconditioned houses feel about them. What does the organisation which speaks for the agricultural workers in the main say about it? I will quote briefly from their evidence to this sub-committee:
  "We do not think that in the majority of cases accommodation is increased."
  They go on to point out that in many cases it has been decreased, and I have seen that in my own division.
  "Comparatively few of the houses reconditioned have had water or electric light laid on, or baths or sanitation provided, as most of the cottages were situated"—
  and here is one of the snags in reconditioning—
  "far from essential services and many far from village communities. Our fear is that the reconditioning of houses will require skilled labour at a time when skilled workers will be urgently needed for new buildings."
  What do the Association of Sanitary Inspectors say about it? The members of this Association are persons who are up against these problems in the country districts every day, and sometimes every hour of their lives, and they are in a position to speak with undoubted authority. They say:
  "The Association feels strongly that the time is not opportune for such a scheme and emphasises the view already expressed that the present building force should be concentrated on the erection of the maximum number of new buildings."
  They go on to say:
  "There has been a tendency in some quarters,"
  and this I know is true, from my own experience,
  "to retain cottages which had reached the end of their useful life."

  1175
  My chief objection to this reconditioning is that it will perpetuate the unjust system of the tied cottage, and there is nothing which the agricultural workers resent more than that system, borne of bitter actual experience. I want to say that I object very strongly on principle and that as long as I am in public life I shall continue to object. I am accused of being bitter towards landlords. I am bitter towards the system of private land ownership, and want to see it overthrown as soon as possible, and will do all I possibly can to bring that about. I am opposed on principle to grants out of public funds to private landowners to put their property in order, an obligation and duty which they have neglected up to now.
  I wish there were more time to develop some of the other arguments, but I agreed to speak for ten minutes only and I conclude by saying that the real remedy for dealing with houses needing reconditioning is for the local authorities to acquire them, where it is desirable and practicable, at their present value, put them in a fit state of habitation, and then let them to tenants under an ordinary tenancy agreement. With the Minister of Health, one of the finest Ministers of Health we have ever had, applying his energy, skill and statesmanship, and with the wholehearted co-operation of local authorities; and the building industry—and if they realise the need the building workers will put their backs into this job—I am certain that before this Government goes out of office it will have made a really substantial contribution to the solving of this most important question.
  9.5 p.m.
  Mr. Molson: I would like to summarise the point of view of hon. Gentlemen on this side of the House as to what requires to be done about rural housing. May I, as one who was associated with the two Hobhouse Reports which have been under discussion today, say on behalf of my colleagues on that committee, how much we appreciate the way in which the two reports have been cited as though they were—as I think they were—honest efforts on the basis of the evidence put before us to make constructive and helpful suggestions to improve the standard of housing in rural districts? The Parliamentary Secretary, as at present advised, is still unable to accept
  1176
  the view which was unanimously put forward by us. That view was to the effect that there is building labour available in the country districts for the reconditioning of houses, and that labour is not, for one reason or another, available for the building of new houses.
  In a very important passage in his speech, the Parliamentary Secretary indicated that he continues to hold the view that that is not correct. He is at a great disadvantage. Hon. Gentlemen on all sides of the House felt that his speech was very lucid and a masterly exposition of the point of view of the Ministry which he represents. The Minister of Health expressed certain views at a time before the Hobhouse Committee had issued its report. In the absence of the Minister it would be quite wrong, of course, for the Parliamentary Secretary to accept the report which has been presented. We are all at a disadvantage because of the indisposition of the Minister, which we all very much regret. When the Government ask an impartial committee—our committee was impartial because it represented Members of all parties, and the dividing line which did take place was not on the line of party—to make a finding upon a matter of fact, it would be reasonable for the Government to accept the findings to which the committee have come. In spite of what the Parliamentary Secretary had said, the Hobhouse Committee accepted the outstanding importance of the building of a large number of new houses in the country districts. The first point which was referred to us was: Would reconditioning draw away labour from the building of new houses? Unanimously we came to the conclusion that there is labour in the country districts which is not available for the building of new houses and which could be used for reconditioning.
  Last year the Government introduced their Housing (Financial Provisions) Bill, which was passed into law. Hon. Members on this side of the House criticised it on certain grounds, but they did say they were naturally most anxious that the maximum number of houses should be built and recognised that the Government were making a special effort in the case of housing in the rural districts. How is it turning out? It appears that under that Act 12,736 houses have been built in rural districts. Those are the last returns we have got. Of those, 5,007 were

  1177
  built by local authorities and 7,729 were built by private enterprise. I do not know whether we were at fault in criticising the Act on the ground that it gave a very much smaller subsidy to private enterprise, and that the balance was being tilted against private enterprise, but in spite of that fact it appears as though private enterprise has managed to do more than the local authorities, although it has had so much less assistance. Special provision was also made in the Act to ensure that local authorities which built houses which in fact were occupied by rural workers should receive a very large subsidy, namely, £28 10s. for 60 years. It represents the greatest generosity that has ever been shown to the rural districts in helping to find houses for agricultural workers, and hon. and right hon. Gentlemen apposite have reproached us with the smaller contributions made by legislation promoted from this side of the House.
  We find that, of the 5,007 houses built, this larger subsidy has been claimed in respect of only 607–607 out of 5,007. The Parliamentary Secretary explained quite correctly that this subsidy is a rather peculiar one. In the case of ordinary houses people are offered the subsidy by the Government before they build the houses, but this, what I may call the Section 3 subsidy, is only payable where, after the house has been built, it is in fact occupied by an agricultural worker. Local authorities have built 5,007 houses and have only claimed this large subsidy in respect of 607 of them. The local authorities have built the remaining houses without claiming the subsidy from the Government. That appears to me to mean that out of the 5,007 houses built in rural districts, only 607 are in fact being occupied by rural workers.
  The Parliamentary Secretary said that there was no difference between the two sides of the House in our anxiety at the present time to do everything we can to assist agriculture, and I am sure that is so. Indeed, I have felt recently that there has been a great warming of feeling on the other side of the House towards agriculture; the great distress of the country makes it obviously very important that everything possible should be done, and I think the Government realise that. Therefore, when the Secretary of State for Scotland comes to reply he will perhaps explain to us how it comes about that,
  1178
  though these 5,007 houses have been built, the large subsidy payable in respect of occupation by agricultural workers has only been claimed in respect of 607. If the explanation is what I believe it to be, the suggestion of my hon. Friend the Member for Ripon (Mr. York), that in the special predicament we are in some special effort should be made to make the houses available only for agricultural workers, would, surely, be very largely justified.
  These figures seem to indicate that the Act of 1946 is not succeeding very well. I am going to suggest three reasons why it has failed. The first is planning limitation. It sounds all right to have your agricultural houses in the villages rather than out on the farms; but the hon. Member for Lonsdale (Sir I. Fraser) explained the case of his own constituency in Lancashire where, I believe, there are very wide areas, and where farms are isolated from the villages. In the second place, there is this licensing, this one-four rule. As my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out, last year the Minister of Health said that this was only a sort of rough and ready calculation of what, in fact, the needs would be. I believe that the other reason why the Act of 1946 is not actually producing the houses for the agricultural workers is because this one-four rule, which is just a rule of thumb, is not working out satisfactorily. Thirdly, Section 13 (3) of the 1946 Act prevents the subsidy from being made available in the case of what is called the "tied cottage." I am not in the least afraid of facing the critics upon the subject. I called it doctrinaire prejudice in the last Debate, when the right hon. Gentleman was here, and I think, in fact, that that is proving to be the case.
  If we are genuinely desirous of helping agriculture at the present time, we must really try to build a large number of houses for those people who are willing to work upon the land and who are going to be near their work. It is no use having a prejudice against the tied cottage and not to give assistance when the Act fails. But, in point of fact, we have not done the one thing necessary—built the houses in the places where they are required. What the Government have done in this, as in so many other matters, is that they have suspended the free play of economic forces, and have tried to sub-

  1179
  stitute planning. I am not against planning. Indeed, I have been criticised by some of my hon. Friends on this side for being almost a pink Socialist, because I believe in planning. But I believe in good planning, and what has undermined my faith in planning is that those who have spoken about it for so many years have not, in the last 20 months during which they have had the opportunity to put their ideas into practice, done what is necessary. When I look at hon. Members opposite I realise that it is not because it is impossible to plan, but because they are not very good at planning.
  I have no hesitation in talking about tied cottages. I want more tied cottages, not fewer tied cottages. As long as we are in this difficult housing situation, I want to see the policy of the tied cottage greatly extended. In answer to a supplementary question by my right hon. Friend the Member for Southport (Mr. R. S. Hudson), the Minister of Supply said that his Ministry had provided houses for men employed in the royal ordnance depots, and that when they cease to work in the ordnance depots they should no longer occupy the houses which have been built by the Government in order that the workers in those ordnance factories should live near their work. One of the troubles which has to be faced by the agricultural landlords is that in a small village there is the schoolmaster who has to be provided with a house, and there are the postmen and the constabulary who also have to be provided with houses. Why should not these public authorities provide their officials with houses and have them tied for whoever is performing those public functions? Why should the agricultural landlord be required to provide houses for those who are employed by the Government or by local authorities? Why should not the principle of the tied house which, after all, does not seem to have been a great hardship so far as vicarages and rectories are concerned during the last few centuries, be applied in the case of all these public functionaries? Apart from the neglect of the Hobhouse Report, there has also been the neglect of the Ridley Report. That was another impartial committee, representative of all parties, which was asked to deal with the question of rent restriction, and they came to the con-
  1180
  clusion that one of the main causes of bad agricultural housing is that the rents paid are not sufficient to enable the houses to be kept in order.
  Mr. Gallacher: Is it not the case that the wages paid made it utterly impossible for the labourers to pay larger rents?
  Mr. Molson: So far as the wages are concerned, when our committee reported in 1936, we took the view that the average wage at that time was 32s. 6d. a week, and we found that the agricultural labourer could pay 3s. rent and 2S. rates, making 5s. altogether. We found in 1943 that the wages were 65s. and that the labourer could pay 10s. or 11s. In 1947 the minimum wage has gone up very substantially; the average earnings have probably gone up to about 90s. a week, and a comparable increase in rents could perfectly well be paid by agricultural labourers.
  Mr. Dye: Why?
  Mr. Molson: If the hon. Gentleman, who interrupts me from a reclining posture, had read the Ridley Committee's Report, he would have found that their recommendation was that tribunals should be set up and should lay down a rent which should be proportionate to the quality and amount of the accommodation provided. That is the recommendation made, and that is the only way to deal equitably, fairly and on a sound economic basis with all these questions of rent restriction. After 20 months of office we still do not know the attitude of the Government upon this matter of rent restriction. I maintain that where a fair wage is paid to the agricultural labourer, a fair rent should also be paid for good accommodation, and until that principle is established we will never bring about a general improvement in the standard of agricultural housing.
  I have dealt at some length with the matter of new houses, because the reproach has been brought against us that we are thinking all the time of reconditioning and not of new houses. We are anxious that there should be provision of a large number of good new houses, but it is plain that at the same time it is possible to improve the conditions of the existing houses. At the present time the first thing I ask of the Government is not to accept our Report and to re-introduce the grant, but to give a licence for re-

  1181
  conditioning to be carried out when a landlord wishes to do it. I bought a cottage when I bought my own house; I did not wish to be a slum landlord, and because there was no water laid on in the cottage I had plans prepared by an architect for reconditioning it. However, I could not get that done because under, not the last but a recent circular issued by the Ministry of Health all I could do was to have the minimum amount done, which would actually make the roof watertight. My tenant still cannot have water laid on, although it is quite nearby. That is the first thing I ask of the Government, that they withdraw that circular and enable those who are willing to do these things without asking for any grant, at any rate to carry out such improvement of their property. When that has been done there will perhaps be more justification than there is at the present time for the gibes which come from hon. Members opposite against landlords, some of whom are most anxious to carry out these improvements but are prevented by the right hon. Gentleman the Minister of Health from doing what they want to do. The labour is available; that is a finding of fact.
  Mr. J. Edwards indicated dissent.
  Mr. Molson: The Parliamentary Secretary cannot accept that yet? When his right hon. Friend returns, let him ask, and then perhaps he will be able to accept it. Let me give one example which does not actually appear in our Report. There is a little town in South Devonshire, in which we found that the builders had come together and formed a syndicate, in order to be able to tender for the building of new houses. If they had not been able to form that syndicate they could not have undertaken the financial responsibility, nor could they have found the labour for building the new houses. If it had been several isolated villages instead of being a small town in South Devonshire, they could not have formed that syndicate, and, therefore, could not have tendered for the new houses. That was a most interesting example, I thought, which I wanted included in the Report in order to show that there are a number of people whose businesses are too small to enable them to undertake contracts for building new houses, but who are perfectly able and willing to accept the reconditioning of
  1182
  houses. Where it is of very great importance to resume reconditioning, what is the effect if that reconditioning is not resumed? It is that the old residents in the villages, those who are working on the land at the present time, will be the last to be given any decent housing conditions. There is the parable of the labourers in the vineyard: Those who come last will get preferential treatment.
  The Ministry of Agriculture submitted some remarkable evidence to the Hobhouse Committee. Why the same evidence was not given to the Minister of Health before he discontinued the Housing (Rural Workers) Act one does not know, of course. Perhaps the Minister of Health was not willing to pay the same attention to the evidence that we were. They want 100,000 extra workers in the agricultural industry. Are they all to have new houses? And, at the same time, are all those who are at present living in country districts to be kept in cottages without modern amenities? Is that fair and reasonable? Are they likely to stay upon the land if that is the treatment they get? If there are a large number of new houses going up, surely, that will emphasise more than ever how difficult and unfavourable are the housing conditions under which they live?
  I come to the question of the tied cottage. I wish to say something on behalf of certain members of the Hobhouse Committee who, I know, were opposed to the existence of such a thing as the tied cottage. Yet they signed this Report, and were in favour of the grant being made available for the reconditioning of tied cottages. Their reason was this. However strongly opposed they are to tied cottages, when they are on the Central Housing Advisory Committee their job is to do what they can to improve the general housing conditions of the people. If this grant were not to be made available to those people in tied cottages, for whom they have every sympathy because they have no security of tenure, it would mean that when a general improvement takes place in housing conditions elsewhere, it would be denied to those who are in tied cottages. However much they may—and do—deplore the existence of tied cottages, they took the view that, looking at it from the point of view of improving the general housing conditions of the country, it would be a monstrous piece of discrimina-

  1183
  tion against that particular category of people, if the general improvement they were aiming at were denied to those living in tied cottages. They were not influenced by the doctrinaire approach I attributed to the Minister of Health. The right hon. Gentleman nominated the hon. Lady the Member for Cannock (Miss Lee) to our Central Housing Advisory Committee, and she presented a dissenting report. Of course, it is entitled to careful, sympathetic consideration; but it is the dissenting report of one member, and all the other members of the committee, of all political views, took the contrary view. We shall await with interest the decision of the Minister of Health on this subject. I cannot believe that he will give excessive weight to the minority report, however weighty and influential may be its solitary signatory.
  May I summarise what I have tried to say? We on this side of the House recognise that nothing must be done to interfere with the production of the maximum number of new houses; but we are unable to say, on the figures as given to us, that the Housing (Financial Provisions) Act, 1946, is, in fact, working out very satisfactorily, or is, in fact, providing the houses for the agricultural workers who are in such great need of them. And, indeed, the country is in great need of agricultural workers. In the second place, most of us here, I think, believe that tied houses are necessary for the efficient working of farms, and for the maximum food production; but we do not wish that, because cottages are tied to those who are engaged in producing food, those people shall be denied the advantages of a grant for the reconditioning of their houses. In the third place, we believe that, as a result of the increased wages, agricultural workers are now able to pay something very much nearer to an economic rent for their houses, and we ask for the implementation of the recommendations of the Ridley Committee, which did, in fact, say that, where a landlord provides a good house, he should get a higher rent than he does if he provides a bad house. In the fourth place, we ask that, while everything possible is being done to provide new houses in agricultural districts, those who have lived there for a long time in unfavourable housing conditions shall not be denied an improvement in those conditions.
  1184
  I have undertaken to give the right hon. Gentleman the Secretary of State for Scotland ample time to reply. I had intended to indulge in a little knockabout stuff with the hon. Member for Thornbury (Mr. Alpass)—to go back over the last w years, and to point out that the Socialist Wheatley Act of 1924 and the Greenwood Act of 1930 were, on the whole, rather ineffective in the rural districts. Hon. Gentlemen opposite draw their support from the towns and do not really understand rural constituencies. The Hobhouse Committee, in its first Report, did say that it was the Acts of 1935 and 1938 which made the most hopeful advance towards solving the rural housing problem in this country. I should be quite willing to advance that argument, but, tonight, we on this side of the House are far more anxious to try to make honest and constructive suggestions how hon. Gentlemen opposite, now that they are in office, can do something to bring about a great improvement in living conditions in the country, and, by so doing, help to promote the production of food at a time when this country stands more in need of strengthening the agricultural population than at any previous time in its history.
  9.36 p.m.
  The Secretary of State for Scotland (Mr. Westwood): The high standard which was set by the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) in opening the Debate has been maintained right to the end. There has been no attempt on either side of the House to make mere petty party points, but there has been an earnest desire to try to focus the attention of the House, and, through it, the attention of the people in the country, on the real need for dealing with what is a really serious problem. I entirely agree with what has been stated by more than one speaker in the Debate—that rural housing is just as important as urban housing—and I entirely agree with what was said by the hon. and gallant Member for Pollok (Commander Galbraith) that we may well get in the rural areas, just as bad slums and as much overcrowding as in urban areas. I think it will be agreed on both sides of the House that, for two or three decades now, there have been two industries to which we have always turned in time of war or in time of real economic difficulty—agriculture and

  1185
  mining—and that neither received fair treatment, either in the way of industrial conditions, or, particularly, in the way of the provision of decent housing conditions for the workers. I think it will be agreed that anything seemed to be good enough for the agricultural worker in the past, and anything seemed to be good enough for the mining community.
  I have lived in mining villages and in the rural areas, and I do know that the Party to which I belong is not responsible for the need for the reconditioning of the houses in our rural districts. The houses were there, without their water supplies; they were there, without the amenities which we now demand under modern conditions; and it is left to us now to try to solve a problem which was handed on to us and was one of our heritages when we took office. The hon. Member for Ripon (Mr. York) suggested that there was need for a publicity campaign to convince the people in the urban areas of the desperate position in the rural areas, so far as housing is concerned.
  Mr. York: That is certainly a gross misrepresentation of what I said. What I said was that a publicity campaign was needed in order to convince the townspeople that first priority must be given to rural housing.
  Mr. Westwood: I accept the correction for what it is worth; it means practically the same thing. All I was going to suggest was that a Debate of the kind in which we are engaged is one of the finest methods of calling the attention of the urban worker to the needs of the rural areas. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) used the word "reconditioning," and it has been used very much today. I do not like the word "reconditioning" in connection with housing. So much do I dislike it, that when I was responsible for setting up a sub-committee of the Housing Advisory Committee for Scotland, and giving them a remit—we use the word "remit," whereas in England the term "reference" is used—I never used the word "reconditioning" but the word "modernisation"—[An HON. MEMBER: "It is the same."] Oh no, there is a vast difference. Even with my limited knowledge of the English language, I know the difference between "reconditioning" and "modernisation." The remit to the Committee was to con-
  1186
  sider modernisation. I was asked by the hon. and gallant Member for Pollok if I believed in modernisation. I do. Apparently there is no dispute between us as to the need for modernisation. The only dispute between us is about who shall own the property after the money has been spent by the State in modernising it.
  The hon. Member for Lonsdale (Sir I. Fraser), and several other hon. Members, suggested that it was not altogether advisable to concentrate on building houses for agricultural workers in the villages or existing communities, but that we should concentrate on building on the farms. May I remind the House that in recent times three committees have made reports in connection with the siting of houses for the agricultural population. Two of those committees dealt with England, and one with Scotland. The Scott Committee on Land Utilisation, and the Dudley Committee on the Design of Houses, were the English committees, and the sub-committee of the Scottish Housing Advisory Committee, of which I was chairman, set up to deal with the distribution of 500,000 houses needed in Scotland, all considered this question of siting houses for the agricultural community. Their recommendations were that new agricultural cottages should, where possible, be sited near existing villages, and they emphasised the fact that it was of the greatest importance that the agricultural labourer and his family should enjoy the amenities of village life. If we are to attract back to the countryside that agricultural population which is so desirable, we have not only to build houses, but we have to see that amenities are provided for our agricultural population. The old idea that the agricultural labourer should always have to remain on a farm may not have been a bad one when there were no transport facilities such as we have today, but it is not altogether a good one now. The agricultural labourer wants to have something more in the way of amenities than has been his lot in the past. That cannot be achieved by the building of the isolated houses which have been advocated so much in the Debate today.
  In dealing with amenities, and indeed with rural housing, we also have to see that there is an adequate water supply. I am sure that the Minister of Health for England is in just the same position as the Secretary of State for Scotland. There

  1187
  was need for the provision of an adequate proper piped water supply for our rural districts. Speaking for Scotland, I can say that we are now almost ready to distribute the £16,250,000—provided by the Coalition Government, I admit—to help in connection with Scottish rural water supplies. Fourteen counties have already been notified to get on with the job in accordance with the schemes which we have already approved. Percentages which are to be paid have not yet been definitely fixed, but the schemes have been provisionally approved. Incidentally, that will mean an expenditure of approximately £13 million for the development of rural water supplies in Scotland. I have no reason to apologise to this House for that bit of work which has been done for Scotland. If it will help my colleagues from Scotland, I would say that it was a good interpretation of the Goschen formula, because in that case I think that England received £15 million for its water supplies and drainage, and the Coalition Government enabled me to get away with £6,250,000 for Scotland. Why? Because our needs were so great, due to the fact that past Governments had not dealt with this vital problem. Therefore, it becomes my responsibility now to see that that £6,250,000 is fairly and wisely distributed as between water supplies and drainage in the rural areas in Scotland.
  It was suggested, I think by my hon. Friend the Member for Berwick and Haddington (Mr. Robertson), that there was a certain amount of delay in some cases, and that it was not due to the fault of the local authorities. That is perfectly true. Some local authorities, and I presume that this applies equally in England as in Scotland—and in Wales—could not get on with housing because, as I have already indicated, they had not the reasonable and adequate water supplies that were necessary. It is perfectly true that local authorities have had delays. We are trying to overcome that in relation to Berwick. Berwickshire happens to be one of the areas which is to get a grant out of this £6,250,000. Perhaps I might deal with another question which was put by the hon. and gallant Member for the Pollok Division. I agree at once that that will not be an adequate supply of finance to enable us to solve our problems. We are looking at this question at the present time. It will require fresh legis-
  1188
  lation, and that is being considered at the moment, so that as we face our work, so we shall be able to get finance.
  I say quite frankly to the House that if I had £20 million instead of the £6,250,000, I would not be prepared to allocate the whole of that sum, because of the shortage of labour and materials. If we were to distribute more than we are distributing to local authorities at the present time all that would happen would be that excessive costs would have to be paid by the local authorities.
  Mr. Gallacher: If any of these local authorities who are not sharing any part of this £6 million commence waterworks or drainage works, will not that prohibit them from getting consideration for this type of work in any further monies which the Minister gets?
  Mr. Westwood: Speaking from the Scottish point of view, we have met the local authorities' associations and informed them that schemes must be approved before any grant can be given, but I am considering ways and means whereby we may be in a position later on to provide grants to enable the schemes to be proceeded with. The hon. Member for St. Albans (Mr. Dumpleton) put a question in connection with the Canadian cedar-wood houses. The number for which import facilities have been given is 250 and no proposal has yet been put before us to increase that number. If a proposal is made it will receive sympathetic consideration.
  To return to one or two of the points put by the hon. and gallant Member for Pollok, it is perfectly true that overcrowding is as great in the country as it is in the towns. It is suggested that the Government must concentrate on the rural problem. A complaint was made at the delay in the publication of the Scottish Report on modernisation. If I remember rightly, the hon. and gallant Member for Pollok quoted another instance where there had been, shall I say, speed in the printing of a particular paper. No one knows better than my hon. and gallant Friend that the one which was printed so speedily was a Command Paper. Command Papers have a preference in printing. At Question time today I pointed out that there was another Command Paper in Scotland which had preference over the Report about which complaint has been made. Incidentally, sometimes my difficulties in

  1189
  getting printing done are a little more difficult in Scotland than in England. I prefer to have the delay and have the printing done in Glasgow than to send the order for printing to London. I do not think any of my Scottish colleagues on either side of the House will complain about that.
  A word about what we are actually doing. [HON. MEMBERS: "Hear, hear."] If I had not dealt with the questions which were put there would have been complaints. Now I am being cheered for having dealt with the questions and because I ask for a little time in which to deal with some of the things which we are doing. Because of the urgent need to increase manpower in the agricultural industry, I have recently arranged for the production of 400 Weir steel houses and 200 Atholl houses for occupation by agricultural workers. I am receiving the full co-operation of the local authorities. In view of the importance of milk production and the urgent need for increasing the labour force in the industry, we are starting in the West and South-West districts. These 600 houses will be built in the counties of Dumfries, Kirkcudbright, Wigtown, Ayr, Lanark, Dumbarton, Renfrew and Stirling. These houses are intended for the exclusive occupation of agricultural workers working on farms. I was not satisfied that where we were building houses in rural areas the agricultural community were actually becoming the tenants of these houses. The 600 houses to which I have referred must be let to agricultural workers.
  It is proposed to build them in small groups of eight to serve farms on sites which will be part of existing villages. There has been a suggestion that we should build them in ones and twos, but there is a difficulty there because with this type of house we must build four. I am willing to consider breaking them down to fours instead of eights, but I want to concentrate on building in the villages as far as I can. That does not, however, rule out building four houses near farms where they may be in a position to serve one or two farms. I place the greatest importance on the building of new houses in the country districts. Whatever decision may be reached about the modernisation of houses—and the Scottish Report will be available on 15th April—I hope to be in a position, as is the position with the Minister of Health, to make an announcement of the Govern-
  1190
  ment's policy before the end of the Session. Someone suggested that was in the month of October. That is not what is at the back my mind. I am hoping that the end of the Session will be about the end of July or the beginning of August. And that means that I have in mind that the decision will be announced towards the end of July—
  Captain Crookshank: Towards the end of July. Does that mean, whether that turns out to be the end of the Session or not?
  Mr. Westwood: I would hope to be in a position to make an announcement as to Government policy towards the end of July. I have tried in the limited time at my disposal to deal with questions raised in a United Kingdom Debate dealing with both England and Scotland. There is one thing this House can rest assured on. The agricultural community must get a fairer deal in the future than it has received in the past—[HON. MEMBERS: "Hear, hear."] We must definitely see that housing conditions are better than they have been and that the two apartment house without amenities, water supplies and sanitary conveniences must only be remembered as a bitter black spot that was handed over to us by previous Governments—
  Mr. Molson: Could the right hon. Gentleman say what the Government's intention is with regard to the report of the Ridley Committee on the question which I raised?
  Mr. Westwood: I cannot say what the intention of the Government is as to the Ridley Report. That deals with rent restrictions—
  Mr. Molson: Quite right.
  Mr. Westwood: That is an even more intricate problem than the problem of dealing with the reconstruction or modernisation of our buildings, and I was concentrating on what the Government were proposing to do and saying that a statement of their policy would be made towards the end of July. I have nothing to add to what I have already said so far as these Reports are concerned.
  Mr. Spence: Will the right hon. Gentleman say why the Cruden housing programme

  1191
  has been cut from 3,000 to 1,000 houses for this year?
  Mr. Westwood: No, I could not in the time at my disposal. There is no time to deal with it in the few minutes left. I am quite willing, as I do in connection with other matters so far as Scotland is concerned, to see that the hon. Member who was raised this gets a reasoned reply.
  Captain Crookshank: Will the right hon. Gentleman say whether he accepts the Motion which I moved or the Amend-
  ment which has been moved thereto? He must know the answer to that one.
  Mr. Westwood: I have a minute in which to deal with that. I prefer the Amendment to the Motion, and would be willing to accept that, if the right hon. and gallant Gentleman opposite is willing to withdraw his Motion.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 100; Noes, 241.

  Division No. 113.]

  AYES.

  [10.0 p.m.

  Amory, D. Heathcoat

  Haughton, S. G.

  Nutting, Anthony

  Baldwin, A. E.

  Headlam, Lieut.-Col. Rt. Hon. Sir C.

  O'Neill, Rt. Hon. Sir H

  Beamish, Maj. T. V. H

  Hinchingbrooke, Viscount

  Peto, Brig. C. H. M.

  Beechman, N. A.

  Hogg, Hon. Q

  Prescott, Stanley

  Bennett, Sir P.

  Hollis, M. C.

  Ramsay, Maj. S.

  Birch, Nigel

  Hope, Lord J.

  Ross, Sir R. D. (Londonderry)

  Boles, Lt.-Col. D. C. (Wells)

  Howard, Hon. A

  Scott, Lord W.

  Bowen, R.

  Hurd, A.

  Smiles, Lt.-Col. Sir W

  Buchan-Hepburn, P. G. T.

  Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

  Snadden, W. M.

  Bullock, Capt. M.

  Hutchison, Col. J. R. (Glasgow, C.)

  Spearman, A. C. M.

  Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

  Jennings, R.

  Spence, H. R.

  Byers, Frank

  Joynson-Hicks, Hon. L. W

  Stoddart-Scott, Col. M.

  Carson, E.

  Keeling, E. H.

  Stuart, Rt. Han. J. (Moray)

  Clarke, Col. R. S.

  Lambert, Hon. G.

  Studholme, H. G.

  Clifton-Brown, Lt.-Col. G.

  Langford-Holt, J.

  Teeling, William

  Corbett, Lieut.-Col. U. (Ludlow)

  Legge, Bourke, Maj. E. A. H.

  Thomas, J. P. L. (Hereford)

  Crookshank, Capt. Rt. Hon. H, F. C.

  Lipson, D. L.

  Thornton-Kemsley, C. N.

  Crosthwaite-Eyre, Col O E

  Lloyd, Selwyn (Wirral)

  Thorp, Lt.-Col. R. A. F.

  Cuthbert, W. N.

  Lucas, Major Sir J.

  Vane, W. M. F.

  Dodds-Parker, A. D.

  Lucas-Tooth, Sir H.

  Wadsworth, G.

  Dower, Lt.-Col. A. V G (Penrith)

  McCallum, Maj. D.

  Walker-Smith, D.

  Drayson, G. B.

  Mackeson, Brig. H. R.

  Ward, Hon. G. R.

  Drewe, C.

  McKie, J. H. (Galloway)

  Wheatley, Colonel M. J.

  Dugdale, Maj. Sir T. (Richmond)

  Macmillan, Rt. Hon. Harold (Bromley)

  White, Sir D. (Fareham)

  Eden, Rt. Hon. A.

  Macpherson, Maj. N. (Dumfries)

  White, J. B. (Canterbury)

  Elliot, Rt. Hon. Walter

  Maitland, Comdr. J. W.

  Williams, C. (Torquay)

  Fleming, Sqn.-Ldr. E. L.

  Manningham-Buller, R. E.

  Willink, Rt. Hon. H. U.

  Foster, J. G. (Northwich)

  Marlowe, A. A. H.

  Willoughby de Eresby, Lord

  Fox, Sir G.

  Marples, A. E.

  Winterton, Rt. Hon. Earl

  Galbraith, Cmdr. T. D.

  Marshall, D. (Bodmin)

  York, C.

  George, Lady M. Lloyd (Anglesey)

  Maude, J. C.

  Gomme-Duncan, Col. A. G.

  Molson, A. H. E.

  TELLERS FOR THE AYES:

  Grimston, R. V.

  Morris-Jones, Sir H.

  Commander Agnew and

  Hannon, Sir P. (Moseley)

  Morrison, Maj. J. G. (Salisbury)

  Major Conant.

  Hare, Hon. J. H. (Woodbridge)

  Neven-Spence, Sir B.

  NOES.

  Adams, W. T. (Hammersmith, South)

  Bowles, F. G. (Nuneaton)

  Crawley, A.

  Allen, A. C. (Bosworth)

  Braddock, Mrs. E. M. (L'pl, Exch'ge)

  Daggar, G.

  Allen, Scholefield (Crewe)

  Braddock, T. (Mitcham)

  Daines, P.

  Alpass, J. H.

  Brook, D. (Halifax)

  Davies, Edward (Burslem)

  Anderson, A. (Motherwell)

  Brawn, George (Belper)

  Davies, Harold (Leek)

  Anderson, F. (Whitehaven)

  Brown, T. J (Ince)

  Davies, R. J. (Westhoughton)

  Attewell, H. C

  Bruce, Maj. D. W. T.

  Davies, S. O. (Merthyr)

  Awbery, S. S.

  Burden, T. W.

  de Freitas, Geoffrey

  Ayrton Gould, Mrs. B.

  Burke, W. A.

  Diamond, J.

  Bacon, Miss A.

  Callaghan, James

  Dobbie, W.

  Baird, J.

  Carmichael, James

  Driberg, T. E. N.

  Balfour, A.

  Champion, A. J.

  Dugdale, J. (W. Bromwich)

  Barstow, P. G.

  Chelwynd, G. R.

  Dumpleton, C. W.

  Barton, C.

  Cocks, F. S.

  Durbin, E. F. M.

  Bechervaise, A. E.

  Coldrick, W.

  Dye, S.

  Bellenger, Rt. Hon. F. J.

  Collick, P.

  Edwards, John (Blackburn)

  Berry, H.

  Collins, V. J.

  Edwards, N. (Caerphilly)

  Bing, G. H. C

  Colman, Miss G. M.

  Edwards, W. J. (Whitechapel)

  Blenkinsop, A.

  Cook, T. F.

  Evans, E. (Lowestoft)

  Blyton, W. R.

  Cooper, Wing-Cmdr. G.

  Evans, John (Ogmore)

  Boardman, H.

  Corlett, Dr. J.

  Evans, S. N. (Wednesbury)

  Bottomley, A. G.

  Corvedale, Viscount

  Ewart, R.

  Bowden, Flg.-Offr. H. W

  Cove, W. G.

  Fairhurst, F.

  Farthing, W. J.

  Lewis, A. W. J. (Upton)

  Smith, C. (Colchester)

  Fletcher, E. G. M. (Islington, E.)

  Lewis, T. (Southampton)

  Smith, Ellis (Stoke)

  Follick, M.

  Lindgren, G. S.

  Smith, S. H. (Hull, S.W.)

  Foot, M. M.

  Longden, F.

  Scrensen, R. W.

  Forman, J. J.

  Lyne, A. W.

  Soskice, Maj. Sir F.

  Foster, W. (Wigan)

  McAdam, W.

  Sparks, J. A.

  Fraser, T. (Hamilton)

  McKay, J. (Wallsend)

  Stamford, W.

  Freeman, Maj. J. (Watford)

  Mackay, R. W. G. (Hull, N.W.)

  Steele, T.

  Freeman, Peter (Newport)

  McKinlay, A. S.

  Stewart, Michael (Fulham, E.)

  Gallacher, W.

  Maclean, N. (Govan)

  Stress, Dr. B.

  Ganley, Mrs. C. S.

  Macpherson, T. (Romford)

  Stubbs, A. E.

  Gibbins, J.

  Mallalieu, J. P. W.

  Silvester, G. O.

  Glanville, J. E. (Consett)

  Mann, Mrs. J.

  Taylor, H. B. (Mansfield)

  Goodrich, H. E.

  Manning, C. (Camberwell, N.)

  Taylor, R. J. (Morpeth)

  Gordon-Walker, P. C.

  Marquand, H. A.

  Taylor, Dr. S. (Barnet)

  Greenwood, Rt. Hon. A. (Wakefield)

  Marshall, F. (Brightside)

  Thomas, D. E. (Aberdare)

  Greenwood, A. W. J. (Heywood)

  Mathers, G.

  Thomas, Ivor (Keighley)

  Grenfell, D. R.

  Mikardo, Ian

  Thomas, I. O. (Wrekin)

  Grey, C. F.

  Mitchison, G. R.

  Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

  Grierson, E.

  Moody, A. S.

  Thurtle, E.

  Griffiths, O. (Rother Valley)

  Morgan, Dr. H. B.

  Tiffany, S.

  Griffiths, Rt. Hon. J. (Llanelly)

  Morley, R.

  Timmons, J.

  Griffiths, W. D. (Moss Side)

  Morris, P. (Swansea, W.)

  Titterington, M. F.

  Guest, Dr. L. Haden

  Moyle, A.

  Tomlinson, Rt. Hon. G

  Guy, W. H.

  Murray, J. D

  Turner-Samuels, M.

  Hale, Leslie

  Nally, W.

  Ungoed-Thomas, L.

  Hall, W. G.

  Naylor, T. E.

  Usborne, Henry

  Hamilton, Lieut.-Col. R.

  Neal, H. (Claycross)

  Vernon, Maj. W. F

  Hannan, W. (Maryhill)

  Nichol, Mrs. M. E. (Bradford, N.)

  Viant, S. P.

  Hardy, E. A.

  Nicholls, H. R. (Stratford)

  Walker, G. H.

  Harrison, d.

  Noel-Buxton, Lady

  Wallace, G. D. (Chislehurst)

  Hastings, Dr. Somerville

  O'Brien, T.

  Wallace, H. W. (Walthamstow, E.)

  Herbison, Miss M.

  Oldfield, W. H.

  Watkins, T. E.

  Holman, P.

  Paling, Rt. Hon. Wilfred (Wentworth)

  Watson, W. M.

  Holmes, H. E (Hemsworth)

  Pargiter, G. A.

  Weitzman, D.

  House, G

  Parkin, B. T.

  Wells, W. T. (Walsall)

  Hoy, J.

  Paton, Mrs. F. (Rushcliffe)

  Westwood, Rt. Hon. J.

  Hubbard, T.

  Paton, J. (Norwich)

  Whiteley, Rt. Hon. W.

  Hudson, J. H. (Ealing, W.)

  Pearson, A.

  Wigg, Col. G. E.

  Hughes, Hector (Aberdeen, N.)

  Peart, Capt. T. F.

  Wilcock, Group-Capt C. A. B.

  Hynd, H. (Hackney, C.)

  Porter, E. (Norwich)

  Wigg, Col. G. E.

  Irving, W. J.

  Porter, G. (Leeds)

  Wilkins, W. A.

  Isaacs, Rt. Hon. G. A.

  Pritt, D. N.

  Willey, F. T. (Sunderland)

  Janner, B.

  Proctor, W. T.

  Williams, D. J. (Neath)

  Jeger, G. (Winchester)

  Pursey, Cmdr. H

  Williams, J. L. (Kelvingrove)

  Jeger, Dr. S. W. (St. Pancras, S.E.)

  Randall, H. E.

  Williams, Rt. Hon. T. (Don Valley)

  John, W.

  Rankin, J.

  Williams, W. R. (Heston)

  Jones, D. T. (Hartlepools)

  Richards, R.

  Williamson, T

  Jones, Elwyn (Plaistow)

  Robertson, J. J. (Berwick)

  Willis, E.

  Jones, P. Asterley (Hitchin)

  Ross, William (Kilmarnock)

  Wills, Mrs. E. A

  Keenan, W.

  Scollan, T.

  Woods, G. S.

  Kenyan, C.

  Sharp, Granville

  Yates, V. F.

  Key, C. W.

  Shawcross, C. N. (Widnes)

  Young, Sir R. (Newton)

  Kinghorn, Sqn.-Ldr. E.

  Shawcross, Rt. Hn. Sir H. (St. Helens)

  Younger, Hon. Kenneth

  Kinley, J.

  Shurmer, P.

  Zilliacus, K.

  Lang, G.

  Silverman, J. (Erdington)

  Layers, S.

  Simmons, C. J.

  TELLERS FOR THE NOES:

  Lee, F. (Hulme)

  Skinnard, F. W.

  Mr. Snow and Mr. Popplewell

  Question put, "That the proposed words be there inserted."
  The House divided: Ayes, 232; Noes, 93.

  Division No. 114.]

  AYES.

  [10.09 p.m.

  Adams, W. T. (Hammersmith, South)

  Boardman, H.

  Collins, V. J.

  Allen, A. C. (Bosworth)

  Bottomley, A. G.

  Colman, Miss G. M.

  Allen, Scholefield (Crewe)

  Bowden, Flg.-Offr. H. W

  Cook, T. F.

  Alpass, J. H.

  Bowles, F. G. (Nuneaton)

  Cooper, Wing-Cmdr. G

  Anderson, F. (Whitehaven)

  Braddock, Mrs. E. M. (L'pl, Exch'ge)

  Corlett, Dr. J.

  Attewell, H. C.

  Braddock, T. (Mitcham)

  Corvedale, Viscount

  Awbery, S. S.

  Brook, D. (Halifax)

  Cove, W. G.

  Ayrton Gould, Mrs. B.

  Brown, George (Belper)

  Crawley, A.

  Bacon, Miss A.

  Brown, T. J. (Ince)

  Daggar, G.

  Baird, J.

  Bruce, Maj. D. W. T.

  Daines, P.

  Balfour, A.

  Burden, T. W.

  Davies, Edward (Burslem)

  Barstow, P. G.

  Burke, W. A.

  Davies, Harold (Leek)

  Barton, C.

  Callaghan, James

  Davies, R. J. (Westhoughton)

  Bechervaise, A. E.

  Carmichael, James

  Davies, S. O. (Merthyr)

  Bellenger, Rt. Hon. F. J

  Champion, A. J.

  de Freitas, Geoffrey

  Berry, H.

  Chetwynd, G. R.

  Diamond, J.

  Bing, G. H. C.

  Cocks, F. S.

  Dobbie, W.

  Blenkinsop, A.

  Coldrick, W.

  Driberg, T. E. N.

  Blyton, W. R.

  Collick, P

  Dugdale, J. (W. Bromwich)

  Dumpleton, C. W.

  Kenyon, C.

  Silverman, J. (Erdington)

  Durbin, E. F. M.

  Key, C. W.

  Simmons, C. J.

  Dye, S.

  Kinghorn, Sqn.-Ldr. E.

  Skinnard, F. W.

  Edwards, John (Blackburn)

  Kinley, J.

  Smith, C. (Colchester)

  Edwards, N. (Caerphilly)

  Lang, G.

  Smith, Ellis (Stoke)

  Edwards, W. J. (Whitechapel)

  Lavers, S.

  Smith, S. H. (Hull, S.W.)

  Evans, E. (Lowestoft)

  Lee, F. (Hulme)

  Sorensen, R. W.

  Evans, John (Ogmore)

  Lewis, A. W. J. (Upton)

  Soskice, Maj. Sir F.

  Evans, S. N. (Wednesbury)

  Lewis, T. (Southampton)

  Sparks, J. A.

  Ewart, R.

  Lindgren, G. S.

  Stamford, W.

  Fairhurst, F.

  Longden, F.

  Steele, T.

  Farthing, W. J.

  Lyne, A. W.

  Stewart, Michael (Fulham, E.)

  Fletcher, E. G. M. (Islington, E.)

  McAdam, W.

  Stross, Dr. B.

  Follick, M.

  McKay, J. (Wallsend)

  Stubbs, A. E.

  Foot, M. M.

  Mackay, R. W. G. (Hull, N.W)

  Sylvester, G. O.

  Forman, J. C.

  McKinlay, A. S

  Taylor, H. B. (Mansfield)

  Foster, W. (Wigan)

  Maclean, N. (Govan)

  Taylor, R. J. (Morpeth)

  Fraser, T. (Hamilton)

  Macpherson, T. (Romford)

  Taylor, Dr. S. (Barnet)

  Freeman, Maj. J. (Watford)

  Mallalieu, J. P. W.

  Thomas, D. E. (Aberdare)

  Freeman, Peter (Newport)

  Mann, Mrs. J.

  Thomas, Ivor (Keighley)

  Gallacher, W.

  Manning, C. (Camberwell, N.)

  Thomas, I. O. (Wrekin)

  Ganley, Mrs. C. S

  Marquand, H. A.

  Thomson, Rt Hn. G. R. (Ed'b'gh, E.)

  Gibbins, J.

  Marshall, F. (Brightside)

  Thurtle, E.

  Glanville, J. E. (Consett)

  Mathers, G.

  Tiffany, S.

  Goodrich, H. E.

  Mikardo, Ian

  Titterington, M. R.

  Gordon-Walker, P. C.

  Mitchison, G. R.

  Tomlinson, Rt. Hon. G

  Greenwood, Rt. Hon. A. (Wakefield)

  Moody, A. S.

  Turner-Samuels, M.

  Greenwood, A. W. J. (Heywood)

  Morgan, Dr. H. B

  Ungoed-Thomas, L.

  Grenfell, D. R.

  Morley, R.

  Vernon, Maj. W. F

  Grey, C. F.

  Morris P. (Swansea, W.)

  Viant, S. P.

  Griffiths, D. (Rother Valley)

  Murray, J. D

  Walker, G. H.

  Griffiths, Rt. Hon. J. (Llanelly)

  Nally, W.

  Wallace, G. D. (Chislehurst)

  Griffiths, W. D. (Moss Side)

  Naylor, T. E.

  Wallace, H. W. (Walthamstow, E.)

  Guest, Dr. L. Haden

  Neal, H. (Claycross)

  Watkins, T. E.

  Guy, W. H.

  Nichol, Mrs. M. E. (Bradford, N.)

  Watson, W. M.

  Hale, Leslie

  Nicholls, H. R. (Stratford)

  Weitzman, D.

  Hall, W. G.

  O'Brien, T.

  Wells, W. T. (Walsall)

  Hamilton, Lieut.-Col. R

  Oldfield, W. H.

  Westwood, Rt. Hon. J.

  Hannan, W. (Maryhill)

  Paling, Rt Hon. Wilfred (Wentworth)

  Whiteley, Rt. Hon. W.

  Hardy, E. A.

  Pargiter, G. A.

  Wigg, Col. G. E.

  Harrison, J.

  Parkin, B. T

  Wilcock, Group-Capt. C. A. B.

  Hastings, Dr. Somerville

  Paton, Mrs. F. (Rushcliffe)

  Wilkes, L

  Herbison, Miss M

  Paton, J. (Norwich)

  Wilkins, W. A.

  Holman, P

  Pearson, A.

  Williams, D J. (Neath)

  Holmes, H E (Hemsworth)

  Peart, Capt. T. F.

  Williams, J. L (Kelvingrove)

  House, G

  Porter, E. (Warrington)

  Williams, W. R. (Heston)

  Hoy, J.

  Porter, G. (Leeds)

  Williamson, T.

  Hubbard, T.

  Pritt, D. N.

  Willis, E.

  Hudson, J. H. (Ealing, W.)

  Proctor, W. T.

  Wills, Mrs. E. A

  Hughes, Hector (Aberdeen. N.)

  Pursey, Cmdr. H

  Woodburn, A.

  Hynd, H. (Hackney, C.)

  Randall, H. E

  Woods, G. S

  Isaacs, Rt. Hon. G. A.

  Rankin, J.

  Yates, V. F

  Janner, B.

  Richards, R.

  Young, Sir R. (Newton)

  Jeger, G. (Winchester)

  Robertson, J. J. (Berwick)

  Younger, Hon. Kenneth

  Jeger, Dr S. W (St. Pancras, S.E.)

  Ross, William (Kilmarnock)

  Zilliacus, K.

  John, W

  Scollan, T.

  Jones, D. T. (Hartlepools)

  Sharp, Granville

  TELLERS FOR THE AYES:

  Jones, Elwyn (Plaistow)

  Shawcross, C. N. (Widnes)

  Mr. Studholme and

  Jones, P. Asterley (Hitchin)

  Shawcross, Rt. Hn. Sir H. (St. Helens)

  Lt.-Col. Thorpe.

  Keenan, W

  Shurmer, P.

  NOES.

  Agnew, Cmdr. P. G.

  Drewe, C.

  Joynson-Hicks, Hon. L. W

  Amory, D. Heathcoat

  Dugdale, Maj. Sir T. (Richmond)

  Keeling, E. H.

  Baldwin, A. E.

  Eden, Rt. Hon. A.

  Lambert, Hon. G

  Beamish, Maj. T. V. H

  Elliot, Rt. Hon. Walter

  Langford-Holt, J.

  Beechman, N. A.

  Fleming, Sqn.-Ldr. E. L.

  Legge-Bourke, Maj. E. A. H

  Bennett, Sir P

  Foster, J. G. (Northwich)

  Lipson, D. L.

  Birch, Nigel

  Fox, Sir G.

  Lloyd, Selwyn (Wirral)

  Boles, Lt.-Col. D. C. (Wells)

  Galbraith, Cmdr. T. D.

  Lucas, Major Sir J.

  Buchan-Hepburn, P. G. T.

  Gomme-Duncan, Col. A. G

  Lucas-Tooth, Sir H.

  Bullock, Capt. M.

  Grimston, R. V.

  McCallum, Maj. D.

  Butler, Rt. Han. R. A. (S'ffr'n W'ld'n)

  Hannon, Sir P. (Moseley)

  Mackeson, Brig. H. R.

  Carson, E.

  Hare, Hon. J. H (Woodbridge)

  McKie, J. H. (Galloway)

  Clarke, Col. R. S.

  Haughton, S. G.

  Macmillan, Rt. Hon. Harold (Bromley)

  Clifton-Brawn, Lt.-Col. G

  Headlam, Lieut.-Col. Rt. Hon. Sir C

  Macpherson, Maj. N. (Dumfries)

  Conant, Maj. R. J. E.

  Hinchingbrooke, Viscount

  Maitland, Comdr. J. W.

  Corbett, Lieut.-Col. U (Ludlow)

  Hogg, Hon. Q.

  Manningham-Buller, R. E

  Crookshank, Capt. Rt. Hon. H. F. C.

  Hope, Lord J.

  Marlowe, A. A. H.

  Crosthwaite-Eyre, Col. O E

  Howard, Hon. A

  Marples, A. E.

  Cuthbert, W. N.

  Hurd, A.

  Marshall, D. (Bodmin)

  Dodds-Parker, A. D.

  Hutchison, Lt -Cm. Clark (E'brgh W.)

  Maude, J. C.

  Dower, Lt.-Col A. V G (Penrith)

  Hutchison, Col J R (Glasgow C)

  Molson, A. H. E.

  Drayson, G. B

  Jennings, R

  Morrison, Maj. J G (Salisbury)

  1196

  1197

  Neven-Spence, Sir B.

  Spence, H. R.

  While, Sir D. (Fareham)

  Nutting, Anthony

  Stoddart-Scott, Col. M.

  White, J. B. (Canterbury)

  O'Neill, Rt. Hon. Sir H.

  Stuart, Rt. Hon. J. (Moray)

  Williams, C. (Torquay)

  Peto, Brig. C. H. M.

  Teeling, William

  Willink, Rt. Hon. H. U

  Ramsay, Maj. S.

  Thomas, J. P. L (Hereford)

  Willoughby de Eresby, Lord

  Ross, Sir R. D. (Londonderry)

  Thornton-Kemsley, C. N.

  Winterton, Rt. Hon. Earl

  Scott, Lord W.

  Vane, W. M. F.

  York, C.

  Smiles, Lt.-Col. Sir W.

  Walker-Smith, D.

  Snadden, W. M.

  Ward, Hon. G. R.

  TELLERS FOR THE NOES:

  Spearman, A. C. M

  Wheatley, Colonel M. J

  Cmdr. Agnew and

  Major Conant.

  Main Question, as amended, put, and agreed to.

  Resolved:
  "That this House welcomes the steps which the Government has already taken to repair the consequences of many years of neglect in rural housing and urges the necessity of continuing action to improve water supplies, sanitation and housing conditions, by means of new building first, and, when conditions permit, by re-conditioning suitable existing houses for occupation on a tenancy by agricultural and other workers."

  DISABLED EX-SERVICEMEN (EMPLOYMENT)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
  10.20 p.m.
  Mr. Teeling: I want to raise the question of the employment of disabled ex-Servicemen. This question applies to the whole of the country, and is of very considerable importance at the present moment. We had a Debate last week which, I understand—I could not be here—related more to the finding of employment for disabled ex-Servicemen who have not yet found employment. I do not want to take up too much time, because I understand that others wish to speak on this subject, but I want to specialise on the subject of disabled ex-Servicemen who are already in employment, and who are likely to be dismissed in the next few months owing to the Government decision to cut down Government staffs. It is a very laudable idea that we should considerably decrease the employment of civil servants, but I maintain that it is absolutely disgraceful that those who have become completely disabled in the war should be among the first to go out. Naturally, those who have been completely or partially disabled during the war did not get into the Civil Service, temporarily or otherwise, until, presumably, the middle or the latter part or even the end of the war. The present regulation is that those who came in last
  1198
  should go out first, whether they were ex-Servicemen or whatever they were, and, therefore, these wretched people are, in many cases, among the first to be turned out when it comes to a question of cutting down expenses.
  I will get back if I may to the question of the regular ex-Servicemen. Because of this war, and because of the vast number of people who were called up and fought in it, we are apt to forget the regular soldier, sailor and airman, and to confuse them with those who were called into the Services for the duration of the war. Now we are beginning to appeal for men to join up and become regular soldiers, sailors and airmen. How are we likely to make people feel keen on this profession with always the possibility in the long run, of another war coming on, if we cannot show that everything possible will be done for them at the end of their service? In last week's Debate, in reply to questions as to why disabled ex-Servicemen were not being employed, as we considered, in sufficient numbers in the Ministry of Food, the hon. Lady the Parliamentary Secretary to the Ministry of Food said that it was grossly unfair that people who were regular civil servants with pensions coming on should in any way be displaced for the sake of others. That may be true, but we must realise that we are asking men to go into the Forces, and they will not stay in the Forces for as long as civil servants stay in their jobs; they will go into the Forces for the regular period of time, but they will not be in a position to go into good jobs afterwards—they will be too old for it—unless the Government realise the nation's responsibilities for having asked these people to serve in the fighting Forces. When they have ceased to be of use in the Forces the Government should put them into Government employment and see them through the same period as any ordinary civil servant would go through. If we do not do that, we are not likely to get as many recruits as we want.
  That was recognised as far back as 1906 when, in a Royal Commission, it

  1199
  was pointed out that the Government Departments, and especially the Service Departments, should go out of their way to see that the people who serve in wars should be given the first employment in the War Department or in the Navy Department, and then only afterwards should others get employment in those Departments. That was as far back as 1906. Today, the position is considerably different. But do not let us talk about the plight of ordinary ex-Servicemen only. How much more serious is the case with regard to disabled ex-Servicemen, and still more with regard to completely disabled ex-Servicemen. We had our first problem on this subject after the 1914–18 war. At that time my right hon. Friend the Member for Woodford (Mr. Churchill), who always had a pretty good interest in the fighting Forces, saw to it that after the war the disabled ex-Servicemen were given complete priority in Government Departments. So much so, that, even with the agreements which have been made after this war, nobody who was disabled in the 1914–18 war can be kicked out of a Government job until all the others have gone first: They have complete and absolute priority because our present Leader of the Opposition jolly well saw to it that the men who fought in that war had everything done for them after it.
  Have the present Government of this country—who, towards the end of this war, and during the period of the General Election, spent so much time in telling the troops how they were their friends, and what they would do for them—raised one finger to try seriously to help the disabled ex-Servicemen of this war? Why is it that the disabled men from the 1914–18 war have this priority? It is because our Party insisted on it after that war. But after This war the Labour Government have not got the guts to do the same thing for the fellows who fought. What actually happened was, that at the end of the war Sir Walter Womersley, who is unfortunately no longer a member of this House, and the present Foreign Secretary, who was then Minister of Labour, came to an agreement that after the war disabled ex-Servicemen, and those civilians who were disabled by bombing, or were wounded in any particular work in which they were taking part, would be given full priority. But those were the days of the Coalition. Then the Coalition
  1200
  Government went out and the present Government came in. What has happened? The present Government have given way completely to the Civil Service Association, to the pressure brought on them by that well organised organisation to see to it that the disabled ex-Servicemen, instead of having the priority suggested as far back as 1906, whereby they came first and others only afterwards in the Service Departments, now have the wonderful opportunity of being allowed to remain to the extent of 3 per cent. That is all the present Government think of those who have become disabled in this last war. I know it is said that the civilians worked just as hard. Nobody denies that they worked very hard. But after all, a man who loses a limb, who is shaken in a variety of ways when fighting in the Services, needs a bit of extra encouragement. I should like to ask whoever is to reply, what has been done about the definite statements that were made. I have in front of me a brochure from the Ministry of Labour and National Service, dated January, 1945, with regard to the Egham Centre to help disabled men back to work. I quote a paragraph from it:
  "The aim is to get the disabled person fit for work or for training for work, not just any work. Even with serious disabilities men can in most cases be fitted for jobs in which they will earn as good a living as their neighbours and be able to do as well for their families. Reassurance on this score is indeed half the cure, for it dispels the mistaken idea that a disabled man cannot tackle life on equal terms with his fellows."
  Will the right hon. Gentleman tell us if anything is happening with regard to the Egham Centre? What are the figures; how many are being given jobs and given places?
  Then again we have the Disabled Persons Employment Act of 1944 which only appeared in September, 1945. That Act provides that preference of employment be given to ex-Servicemen and women who were registered as disabled. This means that if an employer notifies the local office of a vacancy for a disabled person, and there are several applicants suitable for the job, it will be the duty of the office to submit first the name of any ex-Serviceman or woman as the case may be, and this preference applies to all Service people. What has happened to that? What is the present position? We know what really did

  1201
  happen. The Civil Service Association put pressure on to the present Government—not the Coalition Government—with regard to what was going to happen when it became quite obvious that these Departments, which had grown tremendously during the war, were going to be cut, as they are now being cut. At the Party Conference which took place in my own constituency in Brighton last year, this matter was brought up. The Disabled Ex-Servicemen's Association then criticised Mr. White and his organisation. They said they had not been allowed to come in on this, and the men on the big Association answered "On the contrary. We have ex-Servicemen working on our organisation. You have been fully represented, and everything that has been needed has been said in your favour and on your side." That, in actual fact, is not the truth. There is no doubt at all that the Disabled Ex-Servicemen's Organisation in the Association has had practically no say in it whatsoever, and were not even allowed to come in and take part in this discussion.
  What is the net result? The net result is that you have this Civil Service Organisation where a vast majority took no active fighting part in the war, and they are in the present position that they can put pressure, and have put pressure, so that they, and not the ex-Servicemen, get the benefit. The net result is that only the employment of three per cent. of ex-Servicemen, according to this arrangement, is allowed. What is going to happen to other ex-Servicemen is already happening in my constituency. We have there the R.E. Records, where something like 160 ex-Servicemen are being turned out. Instead are being left people who are in many cases women and those who have got other employment as well. The completely disabled men are in the position that they can practically find no other work at all; they go to the Labour Exchanges, and the Labour Exchanges admit they can do nothing.
  The Government has got to find jobs for these disabled ex-Servicemen, and not just say they are going to provide work and leave them, at the present moment, high and dry. If they must turn out these men they must find them other employment. But there is no reason to turn them out because there are many of those who are being left who could do the other work that is needed today—the work of
  1202
  reconstruction in the country—whereas these disabled ex-Servicemen quite definitely cannot. Therefore, I suggest that the Government is doing an evil thing at the present moment in not recognising the position of these people who have become completely disabled and who want very anxiously and very keenly to help the country, and whom the Government has always encouraged before and said that something will be done for them. In actual fact the Government is not doing anything, no matter what the right hon. Gentleman is going to say. I know the cases. Nothing is being done for them, just the usual remarks made by the Government that something will be done one day. I maintain that it is both callous and unjust.
  10.35 p.m.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): I am delighted that the hon. Member for Brighton (Mr. Teeling) has raised this matter tonight, because it is quite obvious that if anyone needs educating on this matter, the hon. Member does. I have rarely heard in this House a speech which contains so many inaccuracies as the speech to which we have just listened. I do not know whether I heard the hon. Gentleman aright, but I would like to make this point before I forget it. I understood him to say that at the Labour Party Conference held in his own constituency at Brighton, the Civil Service Clerical Association brought pressure to bear on the party, and, through the party, on the Government.
  Mr. Teeling: I said that at the party Conference the ex-Servicemen asked Mr. White's organisation why they were not allowed to come in on this.
  Mr. Glenvil Hall: Is the inference that Mr. White's organisation was in on this? If so, I would like to tell the hon. Gentleman that the Civil Service Clerical Association is not affiliated to the Labour Party, and was not present or represented at the Conference. The position, so far as the Civil Service ex-Servicemen are concerned, is that temporary members of the Civil Service are discharged on redundancy grounds on the principle "last in, first out." We think that is normally a good principle, and about the only one in these days which one can have if one is to do justice.
  Mr. Manningham-Buller rose—
  Mr. Glenvil Hall: I have not much time, but if the hon. and learned Gentleman wants to raise this matter he should get an Adjournment Motion of his own.
  Mr. Manningham-Buller: I only want to put a question. It is an important point on this doctrine of "last come, first go." Does the Financial Secretary say that is a principle that should apply with regard to the employment of ex-Servicemen, and in giving preference to Irish labour in Ministry of Supply depots?
  Mr. Glenvil Hall: I must answer this Debate in my own way, and I will answer the points put to me by the hon. Member for Brighton. I am just laying down broadly the principle, that was agreed upon by the Whitley Council between the staff side and the employers' side in July, 1945. This agreement, broadly speaking, was that, where civil servants are temporarily employed and, later on, redundancy occurs, the last in should be the first out. Where we get, as we are getting today, temporary civil servants who have been employed in the Armed Forces, the Merchant Navy, the Mercantile Marine, or similar services, and temporary civil servants are redundant, a temporary civil servant who has been in the Army for five years and in the Department for only two months will stay on, where a temporary civil servant who has been in the Department for five years will go. We think this not unfair.
  Major Haughton: I dislike to interrupt the Financial Secretary, but he made the plea that we cannot debate the subject in this way unless we seek to do so on the Adjournment, on another occasion. I would point out that the argument put forward by my hon. Friend was on behalf of the disabled ex-Servicemen.
  Mr. Glenvil Hall: I am coming to that, if my hon. and gallant Friend will allow me, and if I am not interrupted too much. I have just indicated to the House what, broadly, is the principle followed in declaring civil servants redundant. The ex-Servicemen of the 1914–1918 war are in a special position. After the last war a pledge was given to them that they should stay on, and that others should go. The same pledge has not been given this time, but it is not because the right
  1204
  hon. Gentleman the Leader of the Opposition gave that pledge last time, and that this time there is a Labour Government in office which has not given the pledge. This matter was discussed and decided before this Government came into office. If the hon. Member for Brighton will look at Command Paper No. 6567, he will find that it gives the whole story. It was decided during the tenure of the last Government, before the war came to an end, and there is a definite reason for it. This time, in contradistinction to the end of the previous war, nearly all of us had been in the war, and many people who had served in the Civil Defence services, went through more danger and risk than some of the men and women who were in the Armed Forces. It was felt that there should not be any straight line drawn between those who had served in the Forces and those who did not, and, therefore, no pledge was given.
  Mr. Teeling rose—
  Mr. Glenvil Halt: It is not true to say that it was a question that this Government was not doing the right thing by the ex-Servicemen, and—
  Mr. Teeing: I was talking about disabled ex-Servicemen men.
  Mr. Glenvil Hall: When adopting this principle of "last in, first out" the Whitley Committee bore in mind that an Act was on the Statute Book which lays down the quota for every employer. He must employ a quota of three per cent. of disabled men in his firm, factory, or workshop. I should like to tell the hon. Gentleman, in regard to his gibe that only three per cent. was the number to be employed, that this was passed by the Government of which the right hon. Gentleman the Member for Woodford (Mr. Churchill) was head.
  Mr. Manningham-Buller: Did not that Act make express provision for raising the quota in certain circumstances?
  Mr. Glenvil Hall: Generally, the quota was three per cent. Regarding certain occupations, which are described as "designated occupations," such, for instance, as that of lift attendant, other considerations apply, and the posts were set aside for disabled men. Generally, disabled men had to be employed up to a percentage of three. That Act does not apply to the Government, but the Gov-

  1205
  ernment have seen to it that it has implemented the Act so far as Government employees are concerned. Moreover, I have figures which show that, in outside employment, employers need only employ three per cent, while in the Government service the percentage is much higher. Each Government Department has to employ at least three per cent. of disabled men, but taking the Government service as a whole, Department by Department, the percentage of disabled men employed is 5.1 per cent. In the case of the War Office, which I think is the Department the hon. Member had in mind when making his remarks, the figure is 6.7 per cent.—more than double the figure laid down in the Act, to which most employers work. These figures do not, furthermore, express the fact that, in most Government Departments, jobs like lift attendants have been "designated" and set aside particularly and specially for disabled men.
  Major Haughton: Are these included in the 6 per cent.?
  Mr. Glenvil Hall: No, they are in addition to the 6.7 per cent. of the War Office and to the 5.1 per cent. for other Government Departments. I think I can claim that the record of the Civil Service in this matter is exceedingly good, and tonight I have nothing to apologise for on behalf of this Government, and nothing to be ashamed of. It is clear, in spite of the examples I have given, that occasionally you do get cases in which ex-Service men who should be kept on, are in spite of the quota, and all the rest of it found to be redundant, and under the general scheme of things may be given notice by the Department concerned. I say here and now, on behalf of the Government, that we are rather worried about this, and that a few cases have occurred. There has been one at Brighton of an ex-Service man who lost both his legs and became redundant, who was a temporary servant and an excellent clerk. He was given notice, but I am glad to say that he has been kept on. This instance brought to our attention the fact that here and there these kind of cases do occur. You do get men like that for whom the Government of the day, whatever its complexion, should do what they can, particularly as men of that kind must be considerably limited in the kind of work they can do. Often we could
  1206
  keep such a man in the Civil Service and make it possible for someone much more able to go out to some other form of production where he could serve the State with greater capacity.
  I would tell the hon. Member and the House that we are going into this question to see what can be done. Quite obviously if we can do anything to help men in that position we will do so, but the general position is as I have outlined it to the House. With regard to the Disabled Persons Employment Act, of 1944, which was passed by the last Government, we are working well above the percentage there laid down as a quota. We are doing everything we possibly can to help all disabled and ex-Service men generally to fill a productive and useful place in society in the years that lie ahead.
  Finally the hon. Member asked me a question about Egham and other Government Centres. Those centres are continuing to do great work, helping men to re-equip themselves for civil life. They are sending men out as the months go by, with renewed hope in life and the knowledge that they are of some use to their fellows, and to the industrial life of the community in general. I can assure the hon. Member and the House that we are watching these things; we are doing what we can to re-equip these men, and, as and when they are equipped, to see that they do find their proper niche in society and industry.
  10.48 p.m.
  Mr. Manningham-Buller: The right hon. Gentleman has dealt fairly fully with this question of disabled ex-Service men employed in the Civil Service. I remember, and I expect the Financial Secretary also remembers, an assurance being given when the Bill dealing with the subject being discussed in this House, that the Government would set an example with regard to the disabled ex-Service men. There was one point on which the right hon. Gentleman could not touch, because I had no opportunity of putting it to him, but I have put a Question to the Minister of Supply with regard to ex-Service men generally. Ex-Service men were sent from their associations for employment by the Ministry of Supply; they had regular and good employment, and then when the question of redundancy arose, they were

  1207
  discharged on the principle "last in, first out," while certain Southern Irish workers and conscientious objectors were retained. I want to ask the right hon. Gentleman a question about that. I understand from the Minister of Supply that that is in accordance with an arrangement made with the trade unions. I take that from his answers which I have here. I think it is extremely unfortunate if trade unions in fact take up such an attitude, and I ask the right hon. Gentleman if he will look into that matter again. I asked the Minister of Supply whether he had consulted with the British Legion on that question. To that I had no answer, but although it may be right, speaking generally, that "last in, first out" should be the principle, I do say this, that when
  1208
  an ex-Service man is taken into the employment of a Government Department on the recommendation of his regimental association then he should get some priority over the Southern Irishman who until recently not only retained his employment but also got lodging allowance in addition. There should be some priority of retention under the Government. I think that applies to all Government Departments.
  The Question having been proposed after Ten o'clock and the Debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Order made upon 13th November.
  Adjourned at Ten minutes to Eleven o'clock.

BRITISH ARMY
  Commissions (African)
  Commissions (African)
  Huts, Whitchurch
  Huts, Whitchurch
  Personal Cases
  Personal Cases
  Release Groups
  Release Groups
  Illegal Jewish Immigrant Camps (Guard Duties)
  Illegal Jewish Immigrant Camps (Guard Duties)
  War Graves, El Alamein
  War Graves, El Alamein
  Troopship "Rajula"
  Troopship "Rajula"
  Civilian Clothing
  Civilian Clothing
  Record Office, Edinburgh (Dispersal)
  Record Office, Edinburgh (Dispersal)
  Compassionate Cases
  Compassionate Cases
  M.E. and E.A. Commands
  M.E. and E.A. Commands
PRISONERS OF WAR
  Pay
  Pay
  Camp Staffs
  Camp Staffs
  Correspondence (Members of Parliament)
  Correspondence (Members of Parliament)
  Civilian Alien Workers
  Civilian Alien Workers
  Employment, Kincardine and Aberdeen
  Employment, Kincardine and Aberdeen
  B.B.C. (PARTY POLITICAL BROADCASTS)
  B.B.C. (PARTY POLITICAL BROADCASTS)
NATIONAL FINANCE
  Dollar Expenditure
  Dollar Expenditure
  Flood Damage Relief
  Flood Damage Relief
GOVERNMENT DEPARTMENTS
  Motor Cars
  Motor Cars
  Posters (Cost)
  Posters (Cost)
CIVIL SERVICE
  Common Cold Research (Volunteers)
  Common Cold Research (Volunteers)
  Overseas Staffs
  Overseas Staffs
TRADE AND COMMERCE
  Bazaars and Jumble Sales (Coupons)
  Bazaars and Jumble Sales (Coupons)
  Cotton and Wool (Foreign Processing)
  Cotton and Wool (Foreign Processing)
  Women's Shoes (Licensed Imports)
  Women's Shoes (Licensed Imports)
  Footwear Production
  Footwear Production
  Fuel Allocation Committees
  Fuel Allocation Committees
  Units and Dockets
  Units and Dockets
  Floor Coverings
  Floor Coverings
  Imported Handbags
  Imported Handbags
  Engine Generator Sets (Loan)
  Engine Generator Sets (Loan)
  Utility Wool Cloth (Rebates)
  Utility Wool Cloth (Rebates)
  Men's Suitings
  Men's Suitings
  Weights and Measures
  Weights and Measures
  Crockery (Shortage)
  Crockery (Shortage)
  Merino Wools
  Merino Wools
  Wool Industry (Statistics)
  Wool Industry (Statistics)
  Exports to Italy and Portugal
  Exports to Italy and Portugal
  Day-Nurseries (Factory Premises)
  Day-Nurseries (Factory Premises)
  Books (Imports)
  Books (Imports)
  Import Restrictions
  Import Restrictions
  Flood-Damaged Homes (Assistance)
  Flood-Damaged Homes (Assistance)
  Box-Making, Aberdeen
  Box-Making, Aberdeen
  Mining Areas (consumer Goods)
  Mining Areas (consumer Goods)
  Mattresses (Output)
  Mattresses (Output)
  Clothing Coupons (Ex-Servicemen)
  Clothing Coupons (Ex-Servicemen)
  Agricultural Corduroy
  Agricultural Corduroy
TOWN AND COUNTRY PLANNING
  Planning Manual
  Planning Manual
  Stevenage Development Corporation (Pay)
  Stevenage Development Corporation (Pay)
NATIONAL INSURANCE
  Family Allowances
  Family Allowances
  Old Age Pensions
  Old Age Pensions
  Unemployment Benefit, Tottenham
  Unemployment Benefit, Tottenham
  Retirement Conditions
  Retirement Conditions
  Disablement Assessment (New Rates)
  Disablement Assessment (New Rates)
EMPLOYMENT
  Miners (Service Release)
  Miners (Service Release)
  Dispute, Eccles
  Dispute, Eccles
  Ex-Officers
  Ex-Officers
  Poles
  Poles
  Placing
  Placing
  Training, Hartlepools
  Training, Hartlepools
  Coalmines (Irish Workers)
  Coalmines (Irish Workers)
  Displaced Persons
  Displaced Persons
  Automatic Looms (Overlookers)
  Automatic Looms (Overlookers)
ROYAL AIR FORCE
  Mobile Generators
  Mobile Generators
  Leave, Middle East
  Leave, Middle East
  West Indian Airmen
  West Indian Airmen
  COTTON WOOL
  COTTON WOOL
  COLONIAL LOANS (CONVERSION)
  COLONIAL LOANS (CONVERSION)
  YUGOSLAVIA (FOOD SUPPLIES)
  YUGOSLAVIA (FOOD SUPPLIES)
  NAVAL DETENTIONS
  NAVAL DETENTIONS
Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
The Lord Hesketh—Sat first in Parliament after the death of his father.

WEST AFRICAN EXECUTIONS.
THE MARQUESS OF DONEGALL: My Lords, I beg leave to ask His Majesty's Government the following question of which I have given them private notice: Whether they have any statement to make regarding the executions of the West African natives, Aaron Eugene Dankwa, Kwasi Pippin, Kwame Kugwa?
THE LORD CHANCELLOR (LORD JOWITT): My Lords, as announced from the Colonial Office last night, three men under sentence of death for murder were executed in Accra yesterday. The executions of two others were postponed by the Governor on receipt of notice of intention to lodge a petition with the Judicial Committee of the Privy Council.
THE MARQUESS OF DONEGALL: My Lords, I would like to thank the noble and learned Viscount for his answer. I owe him an apology because I gave him very short notice, and it is indeed gratifying to me that he was able to answer it at all. I wish to make my position clear. I am not questioning the justice of the verdict; I am merely questioning the procedure and the long time that these things have taken. The noble and learned Viscount's answer will help me to decide whether to put down a Motion and to move for Papers.

BUSINESS OF THE HOUSE.
THE LORD CHANCELLOR: My Lords, I beg to move the Motion that stands in my name on the Order Paper.
Moved, That the Order of the House for receiving the Report of Amendments to
682
the Companies Bill this day, be discharged, and that the Bill be re-committed to a Committee of the Whole House forthwith.—(The Lord Chancellor.)
On Question, Motion agreed to, and ordered accordingly.

SUNDAY ENTERTAINMENTS ACT, 1932.
COUNTY BOROUGH OF HUDDERSFIELD ORDER:
BOROUGH OF BRIDGWATER ORDER:
URBAN DISTRICT OF BLAYDON ORDER.
LORD WALKDEN: My Lords, I beg to move that these Orders be approved.
Moved, That the Orders made under the Act by the Secretary of State for the Home Department, for extending Section I of the Act to the said areas, be approved—(Lord Walkden.)
On Question, Motion agreed to.

VIOLATION OF TREATIES.
2.38 p.m.
THE EARL OF PERTH: My Lords, I beg to ask the question standing in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government whether in the future they will arrange for the insertion in any bilateral treaty or agreement which they may conclude, of a clause to the effect that in case of a violation or of an allegation by one of the parties of a violation of the terms of such treaty or agreement the matter will be referred to the United Nations; and whether they will endeavour to secure the insertion of an analogous clause in any multilateral treaty or agreement to which they may become a party.]
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, His Majesty's Government have in the past endeavoured, and will continue in the future to endeavour, to insert in both bilateral and multilateral treaties and conventions to which they are parties a provision to the effect that disputes arising out of the interpretation or application of the instrument in question shall be referred to the International Court of justice. Such a provision seems particularly suitable in view of the fact that the Charter states, in

683
Article 36, that legal disputes should, as a general rule, be referred to the International Court, and that Article 36 of the Statute of the Court describes legal disputes as, inter alia, those concerning the interpretation of a treaty and the existence of any fact which, if established, would constitute the breach of an international obligation.
THE EARL OF PERTH: My Lords, arising out of the answer, for which I thank the noble Viscount, may I ask him whether he considers this is a reply to the question on the Order Paper? I asked whether in the case of an allegation by one of the parties of the violation of the terms of such treaty or agreement the matter will be referred to the United Nations. The noble Viscount refers to the Court of International Justice. I hope, therefore, that he will reconsider the point I have raised, because I believe it would be of great help in carrying out the policy of all-round good faith which His Majesty's Government so strongly support.
LORD VANSITTART: My Lords, before the noble Viscount replies to that question, may I ask him another one? Is the reply which we have just received a mere statement of principle, or does it foreshadow that that state of things will, in fact, be embodied in any future treaty? If it is merely a statement of principle, I do not think it answers the purpose for which I imagine the question was asked. What I would really like to see included in any treaty—bilateral or multilateral—concluded in future would be a clause covering the points proposed by the noble Earl. I cannot tell whether or not the answer that we have received foreshadows that as a prospect. Will there be included in any treaty a clause drawn in the terms of the noble Lord's reply? Even if there is I do not think it will be quite satisfactory, but without it will be wholly unsatisfactory.
VISCOUNT HALL: I am advised that Article 36 of the Charter does provide for what the noble Earl has asked. That is the advice I have received, but I will certainly look at Article 36 and ask my right honourable friend who deals with this matter to take into consideration the points which have been put.
VISCOUNT SAMUEL: May I ask, on a point of order, for the sake of establishing precedent, whether it is in order for any noble Lord other than the one who has put the starred question to ask any supplementaries?
THE LORD CHANCELLOR: In so far as it is for me to reply, though I have no more authority than any of your Lordships, I understand the Rules of Order to say that it is not in order.

MALAYA CONSTITUTION.
2.41 p.m.
VISCOUNT ELIBANK: My Lords, I beg to ask the question standing in my name.
[The question was as follows:
To ask His Majesty's Government, whether a draft of the Revised new Malaya Constitution will be laid before Parliament at an early date so that there may be full opportunity to debate it before it takes legislative shape.]
VISCOUNT HALL: My Lords, my right honourable friend the Secretary of State for the Colonies has arranged for copies of the constitutional proposals now under discussion in Malaya to be placed in the library. These proposals were published in Malaya in December last, and shortly thereafter a Consultative Committee was appointed by the Governor, for the purpose of affording to all interested individuals, bodies and groups in Malaya, full and free opportunity for expressing their views on them. This Committee have been charged with the task of collecting all such views, and will present their report to the Governor of the Malayan Union for consideration in his Advisory Council. Shortly thereafter the Governor hopes to submit his recommendations for consideration by His Majesty's Government. Before any final decisions are reached, Parliament will have the opportunity of commenting upon the recommendations, but I regret that, I cannot at present forecast with any certainty when they will be available to the House.
VISCOUNT SWINTON: My Lords, I will defer in a moment to my noble friend Viscount Elibank, but I wish to ask a supplementary question, particularly in view of what was said by the noble Viscount, the Leader of the Liberal Party. May I with great respect, put to the noble

685
and learned Viscount on the Woolsack that it is quite in order for a noble Lord, other than the noble Lord who puts the question, to ask a supplementary question provided he does not make a speech? That, I venture to submit, has been the uniform practice with regard to supplementary questions in the ten or twelve years I have been in this House. Perhaps the noble and learned Viscount would deal with that point.
THE LORD CHANCELLOR: I am now better able to answer than I was earlier. I understand that the Rule of Order is that a supplementary question may be asked by any Peer, but it must be strictly a supplementary question and not a speech.
VISCOUNT SAMUEL: I must apologize for having raised a false point, but I did so on what I thought was the best advice I could obtain.
VISCOUNT ELIBANK: Perhaps I may now ask my supplementary question, being naturally gratified at the statement which has just been made, and which I think represents the practice that has always obtained in this House. I wish to thank the noble Viscount for the reply which he has given, and for the hope it sets out that Parliament will have full opportunity to consider these proposals before they come into force. I should, however, like to ask the noble Viscount, as my question indicates, whether these proposals will be put into legislative shape before we have had an opportunity of considering them. In his reply he did not actually answer that point, and I should be grateful if he would be good enough to do so now, because it is a very important point. As proposals we can discuss them and mould them. If we have them as a Bill, we have not the same opportunity for moulding them.
VISCOUNT HALL: May I, for the benefit of the noble Viscount, repeat the latter part of the reply: "Before any final decisions are reached, Parliament will have an opportunity of commenting upon the recommendations, but I regret that I cannot at present forecast with any certainty when they will be available to the House." I think that meets the point.
VISCOUNT ELIBANK: Thank you.
LORD BARNBY: My Lords, may I, with the indulgence of the House, before putting my question, ask for a further interpretation of the matters that have just been discussed? With regard to starred questions, is it in order for any Peer to intervene with a supplementary question before the Peer who asks the original question has had a chance to ask a supplementary question? Having been absent abroad for three months, I wondered if there was any change?
THE LORD CHANCELLOR: I understand the practice—it was always the practice in the other place—is that the Peer who asks the question is entitled to the first supplementary; and thereafter other Peers may ask supplementary questions.
LORD BARNBY: Thank you.

WOOL BALE DISPOSALS.
2.45 p.m.
LORD BARNBY: My Lords, I beg leave to ask the question which stands in my name on the Order Paper.
[The question was as follows:
To ask His Majesty's Government if they are prepared to publish as soon as possible after March 31 figures supplied to them of total wool bale disposals by the Joint Organization up to that date from the stocks taken over by them officially on July 1, 1946.]
LORD CHORLEY: My Lords, it is the intention of the Joint Organization to publish from time to time information similar to that issued to the Press in August last. Any necessary revision of published figures for earlier periods will be made at the same time.
LORD BARNBY: Do I understand from that reply that the Government are in possession of the information and it is to be withheld?
LORD CHORLEY: I cannot follow the point of the noble Lord.
LORD BARNBY: The question asks for definite information. The reply given by the noble Lord indicated that the Government are in possession of the information. Is it to be understood from his reply that it is not the intention to give it now?
LORD CHORLEY: It will be made available very shortly. I am not able to inform the noble Lord of the exact time, but certainly it will be quite soon.

COMPANIES BILL. [H.L.]
2.47 p.m.
House in Committee (according to Order) on recommitment of the Bill.
[The Earl of Drogheda in the Chair.]
Clause 1 agreed to.
Clause 2:
Length of notice of meetings and of business thereat.
2.—(I) For paragraph (a) of subsection (I) of Section one hundred and fifteen of the principal Act (which, subject to the company's articles, provides that a meeting of a company other than a meeting for the passing of a special resolution may be called by seven days' notice in writing) there shall be substituted the following paragraph:-
"(a) a company's annual general meeting may be called by twenty-one days' notice in writing, and a meeting of a company other than an annual general meeting or a meeting for the passing of a special resolution may be called by fourteen days' notice in writing;"
and, notwithstanding anything in the said subsection (1), any provision of a company's articles shall be void in so far as it provides for the calling of a meeting of the company (other than an adjourned meeting) by shorter notice than that specified in this subsection.
(4) In the provisions of the principal Act hereafter mentioned in this subsection there shall be substituted the longer for the shorter time limit so mentioned, that is to say—
(c) in subsection (3) of Section one hundred and thirty-two (which relates to notices of resolutions as to the appointment of a company's auditors at the annual general meeting) twenty-eight days for fourteen days, in both places, and twenty-one days for seven days, and in proviso (a) to subsection (4) of that section (which makes similar provision as respects auditors appointed before the first annual general meeting) fourteen days for seven days.
LORD SALTOUN LORD SALTOUN moved, at the end of subsection (I), to insert:
"Provided that in the case of an unlimited company any meeting may be called by such notice (not being less than seven days) as is enjoined in the company's articles."
The noble Lord said: My Lords, I have put down the Amendment which stands in my name as an expression of anxiety for the protection of minority share-
688
holders, especially in unlimited companies, and I venture to think that this Amendment gives that protection. In dealing with those companies, about which our official advisers have no or very little information, I must ask your Lordships to consider them not so much in terms of companies as in terms of partnerships, because that is what they really are. Some unlimited companies I know do most of their business through their directors, in whom they have great confidence, but it is quite common for partnerships to have frequent meetings to decide the policy of the partnership; in fact, I think that is probably a rule in most partnerships.
Three weeks' notice for any meeting of an unlimited company is, I think, contrary to the interests of the shareholders of the company, because, as in most partnerships, they are in the habit of meeting and taking a real live part in their proceedings. I know of no business where matters drag on for three weeks—not if it is a live business. Things come up from day to day and are settled very quickly. The result of the Bill as it stands might well be that for members of an unlimited company there would actually be three notices of a meeting out at any one time. Moreover, these notices must be incomplete, because by giving three weeks' notice in advance, matters arising out of a meeting which is to be held in a week cannot be put down. Therefore the result of the Bill as it stands, as applied to unlimited companies, will in many cases be that the shareholders of such companies will be compelled to put a great deal more power in the hands of their directors, and confine their tasks to what in Scotland we call homologating the acts of the directors. They will therefore be deprived of a great deal of management of their own concerns, and for this reason I cannot help thinking that it is a great mistake to apply to these partnerships the same iron law that you are applying to big limited joint stock companies. I beg to move.
Amendment moved—
Page 2, line 40, at end insert said proviso.—(Lord Saltoun.)
THE LORD CHANCELLOR: The noble Lord has referred to "big joint stock companies." Let him consider, for a moment, the quite small exempt private companies. What reason is there that I should grant to these companies which

689
are dealt with in his Amendment—unlimited companies—concessions which I have not granted to small exempt private companies? There is no essential difference between the two. In this respect meetings of both of them, the exempt private company and the unlimited company, if they have sufficiently few members—and they generally have—could be called at short notice. Both might be inconvenienced by the longer period laid down in the clause. I have been asked for no special treatment for these exempted private companies, and I cannot see any reason why I should make a special concession with regard to the unlimited companies. After all, there is this objection to the Amendment. It is extremely awkward, in a general Bill of this kind, to have one rule for a meeting of one class of company and another rate for a meeting of another class of company. If it is necessary to protect the minorities in one case as in the other, I suggest we had better make the unlimited companies adhere to the same rule as is applicable to the small exempt private company.
LORD SALTOUN: With a part of what the noble and learned Viscount has said 1 am in agreement. I think there is a very strong case for adopting, my Amendment for exempted private companies. But There is a reason for this Amendment, which I shall possibly emphasize later on, and it is one which has been mentioned by the noble and learned Viscount in the course of our debates on this Bill. It is that the liability of the members of these companies cannot be measured. There is that difference. But if Parliament does decide that these people must have three notices of future meetings at one time, and carry on their business under this handicap, then they must do it. I venture to suggest to the noble and learned Viscount, however, that. the argument of uniformity is not a very good argument in a Bill which applies to every single detail of British business, which is possibly the most varied thing on the face of the earth. I will not press my Amendment, but I feel it my duty to put before your Lordships and His Majesty's Government the really cogent reasons I have for moving it. If the noble and learned Viscount is determined, then I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: The next is a drafting Amendment, anticipating the Amendments to Clause 17 which we shall come to presently. It is concerned with the appointment of auditors. This particular Amendment merely deals with the appointment of auditors before the first annual general meeting. That is the subject matter of Section 132 (4) of the Act of 1929, and the effect of this Amendment is to provide notice of fourteen days instead of seven days. I beg to move.
Amendment moved—
Page 3, line 40, leave out paragraph (c) and insert:
"(c) in proviso (a) to subsection (4) of Section one hundred and thirty-two (which relates to notice of a proposal to appoint other auditors in place of a company's first auditors): Fourteen days for seven days.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (5) to insert:
"(6) Where by any provision hereafter contained in this Act special notice is required of a resolution, the resolution shall not be effective unless notice of the intention to move it has been given to the company not less than twenty-eight days before the meeting at which it is moved, and the company shall give its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice thereof, either by advertisement or in any other mode allowed by the articles, not less than twenty-one days before the meeting:
Provided that if, after notice of the intention to move such a. resolution has been given to the company, a meeting is called for a date twenty-eight days or less after the notice has been given, the notice though not given within the time required by this subsection shall be deemed to have been properly given for the purposes thereof."
The noble and learned Viscount said: This Amendment defines what is meant by "special notice of an ordinary resolution." As your Lordships will remember, in the Bill we have now there are many illustrations of this type of resolution—that is to say, a resolution which is going to be carried by a bare majority, which is therefore like an ordinary resolution, but which is a resolution of which twenty-eight days' notice must be given. Here I am, setting out what is meant by if "special notice of a resolution"; that is to say, twenty-eight days' notice to be given to the company, and then the directors have to give twenty-one days' notice to the shareholders. I beg to move.
Amendment moved—
Page 4, line 10, at end insert the said subsection.—(The Lord Chancellor.)
VISCOUNT MAUGHAM: There is one thing I would like to say on the Amendment as moved, and that is with reference to advertisement. After saying that the company shall give its members notice of any such resolution, the Amendment says:
"at the same time and in the same manner as it gives notice of the meeting or, if that is not practicable, shall give them notice thereof, either by advertisement or in any other mode allowed by the articles, not less than twenty-one days before the meeting."
In another part of the Bill there is also a reference to notice by advertisement. I confess I do not quite know when that will be desirable, but if we are going to insert the provision in the Bill, I venture to think that we must state what we mean by "advertisement." I would suggest the addition after "advertisement," of the words "in a newspaper circulating in the neighbourhood of the registered office of the company." If we do not do that, the advertisement might be in some local newspaper a long way from the company's office, and nobody would see it. So far as I know, whenever notice by advertisement is' authorized by any Act of Parliament it has always been found desirable to state what is meant by "advertisement," and to make the best endeavours to cause the advertisement to reach the minds of the persons whom it is intended to affect. I did not invent these words. They are, in substance, what is to be found in Table A of the principal Act, which deals with a case of advertisement. The Act states that it must be a newspaper circulating in the neighbourhood of the registered office. I do not think that will in any way harm the Amendment of the noble and learned Viscount; in fact, I think it will serve to render it more nearly perfect.
THE LORD CHANCELLOR: This illustrates the usefulness of having this discussion in Committee instead of on Report. I think there is great substance in what the noble and learned Viscount has said, and this is what I would suggest. A great many Amendments will be thrown up and will have to be considered in another place, and I think this is plainly one of them. My own doubt about it is that I am not certain that "the neighbourhood of the registered
692
office of the company" is the right form of words. We had some illustrations given—and we shall no doubt have some more—of a company incorporated in Scotland with all its shareholders in London. Therefore, it might be that the location of the registered office is not the right test. However, on principle I think there is great force in what the noble and learned Viscount has said. He will remember—indeed I think he has said it—that this provision about advertisement, without a definition, is already in the Act of 1929. It would be useful to have some kind of a definition, and the matter will certainly be looked into.
VISCOUNT MAUGHAM: I would just like to add that I thought it was in Table A in the principal Act, but I may be wrong. In any case, with regard to the question of the registered office of the company, I have taken that from Table A, and it is a little difficult to give an alternative. I knew that we could not amend it here, but I thought it could be done on the next stage of the Bill.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 and 4 agreed to.
Clause 5 [Voting at meetings]:
THE LORD CHANCELLOR: This is a small drafting Amendment to insert the words "of a private company", purely to meet the point made by the noble Lord, Lord Balfour of Burleigh, about the difficulty of having various nominee clients who might want to vote in different ways. I beg to move.
Amendment moved—
Page 6, line 22, after ("member") insert ("of a private company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is consequential on the Amendment we have just moved. I beg to move.
Amendment moved—
Page 6, line 28, after ("proxy") insert ("or, where that is allowed, one or more proxies ").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 6, line 28, leave out ("the") and insert ("a").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a drafting Amendment. In Clause 108 (4) we state that the expression "officer" shall include a director, and therefore we do not want the word twice. I beg to move.
Amendment moved—
Page 6, line 44, leave out ("director or other").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next is a drafting Amendment on the same point. I beg to move.
Amendment moved—
Page 7, line 4, leave out ("a director or other") and insert ("an").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Meetings attended by single member]:
THE LORD CHANCELLOR: In looking at this clause we find that the word "may" occurs twice—"directions which may be given may include." We do not want that, and this Amendment is designed to leave out the second "may." I beg to move.
Amendment moved—
Page 7, line 35, leave out ("may").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 6, to insert the following new clause:
"Exemption from obligation to print certain resolutions etc.
.Notwithstanding anything in subsection (I) of Section one hundred and eighteen of the principal Act, an exempt private company need not forward to the registrar of companies a printed copy of any resolution or agreement to which that section applies, if instead it forwards a copy in some other form approved by the registrar."
The noble and learned Viscount said: This is to meet the point raised by the noble Lord, Lord Hawke, that documents, so long as they have sufficient legibility and durability, need not be in print. I beg to move.
Amendment moved—
After Clause 6, insert the said new clause.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clauses 7 to agreed to.
Clause it [Books of account]:
THE LORD CHANCELLOR: The next Amendment is to meet a point raised by the noble Lord, Lord Cozens-Hardy; that is to say, where books of account are kept outside Great Britain, a company need disclose its financial affairs only at intervals not exceeding six months, instead of three months. I beg to move.
Amendment moved—
Page II, line 4, leave out ("three") and insert ("six").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause II, as amended, agreed to.
Clause 12 [Periodical accounts (including consolidated accounts of group)]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out subsections (2) to (4) and to insert:
"(2) A company's balance sheet and profit and loss account shall comply with the requirements of the First Schedule to this Act, so far as applicable thereto:
Provided that the Board of Trade may, on the application or with the consent of a company's directors, modify the said requirements in relation to that company, for the purpose of adapting them to the circumstances of the company."
The noble and learned Viscount said: The effect of this Amendment is to leave out nearly the whole of the existing Clause 12. There follow—this makes it a little difficult I am afraid—four new clauses, which take the place, in slightly different language, of our old friend Clause 12. It is a little hard for those of us who have become familiar with that clause to try to pick it up again in four new clauses, but that is the task we have to face. I have endeavoured in the four new clauses—and perhaps I may discuss them rather generally on this Amendment—to give effect to the general wish expressed in the House that the requirements in regard to accounts should be made more elastic and should, so far as possible, be simplified. In the redraft, account has been taken of all the points which have been raised by your Lordships and, so far as I am aware, I have given effect to all the undertakings I then gave.
The first and most important concession is that under the new layout the directors of a holding company may give in some other form the information which would be required in consolidated accounts. Consolidation remains the standard way of presenting the position of a group, but the directors may, if they think it is better for the purpose of presenting the same or equivalent information, or of so presenting it that it may be more readily appreciated by the company's members, prepare group accounts in a different way. In particular, they may do so by presenting more than one set of consolidated accounts, each dealing with different groups of companies; or by separate accounts dealing with each of the subsidiaries; or by statements expanding the information about the subsidiaries in the company's own accounts; or by any combination of these four. But, of course, it must be observed that the group accounts, in whatever form they may be presented, must always give a true and fair view of the state of affairs and the profit or loss of the company and the subsidiaries dealt with thereby as a whole, so far as concerns members of the holding company. That is the first alteration made in the new clauses.
As to the second alteration, we have allowed a wide discretion to the directors of a company in determining whether a subsidiary should or should not be dealt with in the group accounts, but they can omit it only if they consider that to include it would be impracticable or of no real value to the members of the company, in view of the insignificant value of the amounts involved, or would involve expense or delay out of proportion to the value to members of the company. Where, however, a subsidiary is left out of the group accounts, certain essential information, which is laid down in paragraph (4) of Part II of the First Schedule, has nevertheless to be given with regard to the subsidiary so omitted. Thirdly, where there is a group or chain of holding and subsidiary companies, consolidated accounts are not required where the holding company is a wholly-owned subsidiary of another company incorporated in Great Britain. That is the substance of the clauses which are coming. I hope I have not been out of order in discussing the matter, but I thought it relevant to point
696
out why I was proposing to leave out the great bulk of Clause 12 in order that presently I may put in the substance of it with this greater amount of elasticity. I beg to move.
Amendment moved—
Page 11, line 12, leave out from beginning to end of line 26 on page 12 and insert the said new subsection.—(The Lord Chancellor.)
VISCOUNT SWINTON: If I may follow the example of the noble and learned Viscount, the Lord Chancellor, and deal very briefly with the new clauses which follow, I should like most sincerely to congratulate him and those who have worked with him on a most admirable and practical piece of work. As he said, we were all at one in our intentions. We wished consolidated accounts to be the common form and the normal way of presenting the affairs of a company which has, through its subsidiaries, many ramifications. We also desired that there should be the fullest possible information given. The more we went into the matter, I think, the more we were impressed with the impossibility of having a sealed pattern. Companies vary as much as the manifold businesses conducted in this country vary, and it would be almost impossible to present the accounts of every company in precisely the same form. I do not propose to go again into the sort of questions we discussed on earlier stages of this Bill and which, to anybody with any experience of either Company Law or business practice, make the matter abundantly plain.
Therefore, the noble and learned Viscount, the Lord Chancellor, as I see it, set to work to find a model that will normally be followed, in so far as it is practicable and convenient and in the interests of the company and its shareholders. But that may be varied to suit the exigencies of different cases, provided always that there is the fullest disclosure of profit and loss and that the requisite information is given. If I may say so, I think the form which this clause has now taken is admirable. I would like, if I may, to pay a compliment to the draftsmen. Not only is the requirement now to be imposed by the law the right one for those who have the management of companies, but the method laid down is the convenient way for them to meet that requirement. It has been translated into language which even I can understand, and it is a very remarkable piece of work.
LORD RENNELL: May I follow in all he said the noble Viscount who has just sat down? I would express precisely the same view. I would, however, like to ask a question on one thing which is not quite clear to me. If I may anticipate, again, the term "group" is used, I think for the first time, in the series of Amendments to which the noble and learned Viscount referred, which will be inserted after Clause 12. I think we all know what is meant colloquially by "group accounts," but I am not sure that it is not a new term and might require some definition. A subsidiary may be a company with subsidiaries, and there may be subsidiaries of those subsidiaries. Any one company need not, however, be the subsidiary of a particular company, but may be the subsidiary of two or more companies collectively. There is a point in one of the proposed new clauses where the word "group" is used. It appears in the Marshalled List of Amendments on page 5, and makes clear what is meant. It says: "The company and the subsidiaries thereby dealt with as a whole." I wonder whether the use of the word "group" does not constitute an innovation which might require qualification, either in the interpretation clause or somewhere else.
LORD SALTOUN: I would like to consult your Lordships, and especially the Lord Chairman, with regard to my position. I had an Amendment down to the clause as it stood in the Bill when it left committee. Now that clause is going to be swept away and another one substituted. I conceive that if we accept this Amendment—which I hope we shall—it will then be out of my power to move an Amendment to something your Lordships have already approved; yet the subject of my Amendment is quite different from the point we are now discussing. I should like to ask the Lord Chairman if, after this Amendment is disposed of, I may move my Amendment, or how the matter is to he taken.
THE CHAIRMAN OF COMMITTEES: The noble Lord can move an Amendment to the Amendment already moved by the noble and learned Viscount. Perhaps he would put in manuscript what he wishes to move.
LORD SALTOUN: I will certainly do that. My Amendment was to insert "not being an unlimited company," but with
698
the Amendment we are now discussing that would make bad English. I would prefer to say:
"The balance sheet and profit and loss account of a company, not being an unlimited company …."
That would make reasonably good English, if your Lordships would accept my Amendment in that form to the Amendment of the noble and learned Viscount, the Lord Chancellor.
THE CHAIRMAN of COMMITTEES: The Amendment can be taken now, if the noble Lord will -move it in that form.
LORD SALTOUN: This is a very serious Amendment and one of great importance. The object of it is to exempt unlimited companies, that is, partnerships, from presenting their accounts in the form laid down in the schedule. I know perfectly well that in America a great deal of information is given about the affairs of companies. I have had to study American returns, as no doubt have many of your Lordships. It is the object of this Bill to introduce something of a similar system in the business of limited companies in this country. The point about these companies is that they are limited, and, if harm comes, at any rate the shareholders lose only their shares. There is one point about what we arc doing, which I expect has engaged the attention of your Lordships. Perhaps some noble Lords thought it did not matter very much, but it has a big place in my own mind. It is that this disclosure, while in some ways it may be a good thing for the shareholders, will operate rather unfairly as between big companies and small companies. I will pot quote any names, but your Lordships could probably think of ten or twelve of the biggest companies whose balance sheets you are in the habit of studying. You can ask yourselves how much additional information about the company's affairs the provisions of the schedule will give you.
On the other hand, smaller concerns will have to put all their cards on the table, and one of the effects of that, I think, will be to give a great advantage to those companies which I always compare, in my own mind, with Aaron's rod—the rod that ate up all the other rods. I am bound to say that I do not always approve of the activities of these great concerns which eat up all The little

699
concerns. I nave often criticized them in my own heart very strongly. This Bill, when it comes into law, will make such activities easier. I may be wrong, but I think I am right. In the case of unlimited companies, every member of the company has a liability which can never be measured. It happened not very long ago—and without my having anything to do with the company whatsoever and without any fault of my own to which I could assign it—that I fell under the shadow of an unlimited liability. I sincerely trust that none of your Lordships may ever lie for as long as I did under that shadow. It was a liability which could not be measured, which would eat up everything I had two or three times, and no action of mine could avoid it if it fell. It is a most appalling position to be in.
We have heard from the noble Lord, Lord Lucas of Chilworth, I think in the debate on this Bill—I hope it was not outside this House—that anybody in business can find out his neighbour's affairs by Gestapo methods. Take, for instance, a village Inn which is a family concern and which is an unlimited company. It has a secretary and a clerk, and perhaps a small boy. Fifty pound notes is not a very big sum to spend. It is not an enormous price for Gestapo work for a small boy. It is all very well to say that whatever form the accounts are in, they are absolutely secret; they are not; and it means that this partnership has to give a great deal of information which other partnerships do not in practice give, and would not give. I suggest that it is a very rash thing to do. I go farther and point out to your Lordships that this is a matter on which Parliament has no official knowledge at all—the Department have no official knowledge at all. This is a subject which was not examined by the Cohen Report. As a matter of fact, it was suggested to one of the members that they should examine it and they chose not to take the opportunity.
I suggest it is a dangerous thing to legislate in the dark, simply for the sake of uniformity, and what is more I think any of those who have been working on this Bill, if in consequence of this Bill something were to happen which brought down any of these companies, would find himself loaded with a reproach that he
700
would be sorry to have incurred. Even when I was an apprentice working in Scotland not very long ago, I found that amongst the clerks in my office there was a bitter memory of the City of Glasgow Bank and the Trust that had to take over the assets of that Bank. You would be surprised how long these thoughts reign in the hearts of people. I agree with the noble and learned Viscount, the Lord Chancellor, about minorities in unlimited companies—that it might be a good thing to give them some protection. As a matter of fact, that is a matter to which I turned my mind before we began discussing this Bill, and I have a suggestion which I will make, with your Lordships' permission, when we come to the question whether this Bill be reported, in order to show which lines I think should be adopted. But I do not see how the inclusion of unlimited companies in this part of the Bill is for the protection of minorities. I think it is not for the protection of minorities, and the risks of minorities in this case are much greater than in the normal case of a limited company which has the great privilege of limited liability. I think, therefore, that unlimited companies might very well be left out of the provisions of this clause. I beg to move.
Amendment to Amendment moved—
In the proposed new subsection, leave out line r, and insert:
("The balance sheet and profit and loss account of a company, not being an unlimited company,").—(Lord Saltoun.)
VISCOUNT MAUGHAM: May I say one word in support of this Amendment? I have always understood that the price of limited liability was one of disclosure, and I am not at all surprised that at intervals—generally of twenty years or so—the amount of disclosure that has to be given by a limited company is increased. But I have never understood that an unlimited company got anything from the State or Legislature beyond the fact that they are entitled to a name which represents the corporation and, if you like, a seal, and that they therefore have a slight advantage in the sense of having a heading to their notepaper and a signature to their letters. I am quite unaware of any reason for imposing upon a partnership that have turned themselves into an unlimited company the obligation to disclose their affairs to the extent to which they would be subject under the clause in the Bill.

701
Much injustice and inconvenience would be caused to certain companies of unlimited liability if they had to make this disclosure. Some of them would be bound to wind themselves up, and revert to the position of ordinary partnerships. A. partnership may not, if I remember rightly, consist of more than twenty—though I do not know what happens if they have more than twenty. Nobody ever bothers about it. But it is an advantage to be able to have an unlimited company which is, in substance, a partnership with more than twenty persons. I am very desirous of not putting any difficulties in the way of a perfectly straightforward and honest partnership, carrying on business with unlimited liability, and with the advantage of becoming as I have stated, persona in law but having in that respect not a single advantage as between itself and its creditors or in respect of the ordinary carrying on of its business. Accordingly I support this Amendment and hope the noble and learned Viscount will be able to accept it.
THE LORD CHANCELLOR: I am sure I could not accept this Amendment. It is riot necessary. It is not a question of imposing an obligation to publish accounts. There is no obligation on an unlimited company to publish accounts. They must keep accounts; even if you are a partnership you must keep accounts. Clause 26 of this Bill makes the matter plain, I think. It is a fact that an unlimited company has not got to publish its accounts.
VISCOUNT MAUGHAM: I am sorry to interrupt. Can the noble and learned Viscount tell me the section to which he is referring?
THE LORD CHANCELLOR: For the moment I cannot, but I will look at it again later. Let us assume it as a fact. It is not a question of publishing accounts; it is a question of keeping accounts. I do not care whether it is an unlimited company or a partnership. I cannot conceive of a law in Scotland where a partnership, as an entity separate from the partners—there may be a subtle distinction between a partnership and an unlimited company in Scotland; in England a partnership consists of its members—does not keep accounts. I do not see why accounts should not be kept in the rather elastic form we have allowed in the First Schedule. I agree that they should not
702
have to be published. There is no reason why they should, any more than an exempt private company has to publish its accounts. I will satisfy myself between now and the Report stage that these accounts have not to be published to the world, but I see no reason whatever why the accounts of an unlimited company should not be kept in what is now regarded as the appropriate and right form, with that very large degree of elasticity which we haveo now given. For that reason, and on that assumption, I cannot possibly accept the Amendment.
LORD SALTOUN: Of course, unlimited companies keep accounts. They keep accounts just as do ordinary companies. What I was trying to get removed was the obligation to produce a profit and loss account and balance sheet in the prescribed form, because while every member of a company may know the company's business very well, these things are apt to fall into the wrong hands. Nobody ever comes into your office and steals the whole of your books, but there may be people, some of them minors (even in spite of the Law of Trustees, minors can hold shares in unlimited companies—sometimes they have to) whom information reaches. Where you have to circularize these things it is easy for this information to fall into wrong hands. I agree that those concerns ought to keep books. I have nothing against Clause 26—if it is Clause 26 that deals with the point. I am very sorry that the noble and learned Viscount, the Lord Chancellor, will not accept this Amendment, because I think it touches a very important matter of principle. It is with the greatest reluctance that I do not press my Amendment. I do not suppose that any noble Lords will support me, but if anyone wants to do so I will divide the House on it. I think I am right, and I believe that the future will show that I am right. I am very sorry to have to withdraw this.
Amendment to the Amendment, by leave, withdrawn.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is consequential.
Amendment moved—
Page 12, line 31, leave out ("subsections (1) and (2)") and insert ("subsection (I)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
3.32 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (5), to insert:
"(5) Subsections (1) and (2) of this section shall not apply to a company's profit and loss account, if—

(a) the company has subsidiaries; and

(b) the profit and loss account is framed as a consolidated profit and loss account dealing with all or any of the company's subsidiaries as well as the company, and—

(i) complies with the requirements of this Act relating to consolidated profit and loss accounts; and

(ii) shows how much of the consolidated profit or loss for the financial year is dealt with in the accounts of the company."

The noble and learned Viscount said: This Amendment allows a holding company to dispense with a separate profit and loss account of its own business, so long as it supplies a consolidated profit and loss account embracing all the companies in the group as a whole as well as itself. From a practical point of view there is no advantage in giving a separate profit and loss account of the holding company, and to do so might be prejudicial to the interests of some companies and their shareholders—such, for instance, as insurance companies.
May I take this opportunity of saying, since I have used the word "group" here, that I agree with Lord Rennell that there is no definition, hitherto, as to what is a group account? I do not think that there is. I would myself attempt to describe it—not to define it—in this way. We know what is a consolidated account: the essence of that is that you bring all the accounts into one. A group account obviously differs in that they need not all be brought into one. If I wanted something further, I think I would look at page 5 of the Marshalled List of Amendments, where there is something nearer in the way of a definition. If you look at a passage about a quarter of the way down the page you will see this:
"The group accounts laid before a company shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole so far as concerns members of the company."
If there is that positive obligation (negative in that they need not all be embraced and brought into a consolidated account) I think it describes what I understand a group account to be. I consider this
704
Amendment is a necessary one, and I beg to move.
Amendment moved—
Page 12, line 32, at end insert the said new subsection.—(The Lord Chancellor.)
VISCOUNT ELIBANK: May I ask the noble and learned Viscount if he means by group accounts that the accounts shall be attached to each other? Can they be on separate sheets so long as they are attached?
THE LORD CHANCELLOR: Yes, I think that that would do. So long as a true and fair picture of the activities of the association, of the group as a whole, is given, it need not necessarily be in one account in the way that a consolidated account would have to be.
LORD RENNELL: I feel a certain difficulty about this matter of a group. I accept what the noble and learned Viscount has said about a group, and I think that the description in the Amendment on page 5 to which he has referred is accurate. But it comes a little way down the clause from the first reference to the word "group." I do not wish to press this, but I wonder if, for the sake of clarity, it would not be desirable to consider describing or defining group accounts somewhat more clearly, either at the beginning of the clause or in some other appropriate place where a definition can be given.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is merely drafting. I beg to move.
Amendment moved—
Page 12, line 34, leave out ("the accounts of the company") and insert ("any accounts laid before the company in general meeting").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next one is drafting also. I beg to move.
Amendment moved—
Page 13, line 10, leave out ("accounts") and insert ("balance sheet or profit and loss account").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This too, is drafting. I beg to move.
Amendment moved—
Page 13, line 21, leave out ("or consolidated accounts").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 12, as amended, agreed to.
3.39 P.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR had given notice to move to insert, after Clause 12, the following new clause.
"Obligation to lay group accounts before holding company.
.—(I) Where at the end of its financial year a company has subsidiaries, group accounts dealing with the state of affairs and profit or loss of the company and the subsidiaries shall, subject to the next following subsection, be laid before the company in general meeting when the company's own balance sheet and profit and loss account are so laid.
(2) Notwithstanding anything in the foregoing subsection—

(a) group accounts shall not be required where the company is at the end of its financial year the wholly owned subsidiary of another body corporate incorporated in Great Britain; and

(b) group accounts need not deal with a subsidiary of the company if the company's directors are of opinion that—

(i) it is impracticable, or would be of no real value to members of the company, in view of the insignificant amounts involved, or would involve expense or delay out of proportion to the value to members of the company; or

(ii) the result would he misleading, or harmful to the business of the company or any of its subsidiaries; or

(iii) the business of the holding company and that of the subsidiary are so different that they cannot reasonably be treated as a single undertaking;

and, if the directors are of such an opinion about each of the company's subsidiaries, group accounts shall not be required.
(3) If any person being a director of a corn-patty fails to take all reasonable steps to secure compliance as respects the company with the provisions of this section, he shall, in respect of each offence, be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:
Provided that a person shall not be sentenced to imprisonment for an offence under this section unless in the opinion of the court dealing with the case the offence was committed wilfully.
(4) For the purposes of this section a body corporate shall be deemed to be the wholly owned subsidiary of another if it has no members except that other and that other's wholly owned subsidiaries and its or their nominees."
The noble and learned Viscount said: This is the first of the new clauses. I have rather anticipated what I had to say. The first part deals with the obligation to lay group accounts before a holding company, and your Lordships will see that by subsection (2) (b) it is laid down that:
"group accounts need not deal with a subsidiary of a company if the company's directors are of opinion that—

(i) it is impracticable, or would be of no real value to members of the company, in view of the insignificant amounts involved, or would involve expense or delay out of proportion to the value to members of the company; or

(ii) the result would be misleading, or harmful to the business of the company or any of its subsidiaries; or

I am a little worried about that. I know that some directors of companies take what I think is too restrictive a view about this matter, and think it is harmful to the interests of the company to publish anything at all. Therefore, I am proposing an Amendment: o that by adding at the end of paragraph (b) these words:
"Provided that the approval of the Board of Trade shall be required for not dealing in group accounts with a subsidiary on the ground that the result would be harmful, or on the ground that the difference between the business of the holding company and that of the subsidiary is so great that they cannot reasonably be treated as a single undertaking."
If you are going to leave out one of the subsidiaries from your group accounts on the ground, not that it is a trivial or small matter, or too expensive to deal with, but on the ground that it would be harmful to the interests of the company to state its accounts, then in that case you ought to get the approval of the Board of Trade to leave it out. With that qualification of the Amendment as drafted, I beg to move the first of these new clauses.
Amendment moved—
After Clause 12, insert the said new clause as amended.—(The Lord Chancellor.)
LORD BARNBY: Whilst appreciating the attempt of the noble and learned Viscount to be helpful by his elucidation of this rather difficult point, I would respectfully ask his interpretation of one point. Is he not thereby rather inclined to throw an obligation on the Board of Trade? I admit that at the moment I should have a difficulty in finding an alternative to involving the Board of

707
Trade in intimate examination of the details of a large organization and its subsidiaries, thereby bringing to light a great deal of its information (to which I would admit there might be no objection) which would normally be disclosed to the Inland Revenue Department and not to the Board of Trade. Inevitably the Board of Trade to-day, under the tendency of Regulations, would become informed of operations which, while legal, might yet be to the disadvantage of the company concerned.
THE LORD CHANCELLOR: I do not think there will be great difficulty. In the case of an ordinary decent company—not being dishonestly run—a vast mass of detail would not be required. I think the directors will go to the Board of Trade and say: "We propose to leave out this controlled subsidiary's account altogether. It is quite true it does not come under (a)—that is to say, the amount involved is substantial—but we want to leave it out because to include it would do our business some harm and possibly enable our rivals to do us an injury. These are the facts, and we want your approval to leave it out."
VISCOUNT SWINTON: I see the difficulty in this matter, and, generally speaking, I do not much like giving this amount of discretion to Government Departments. It is much better if we can lay down what is to be done, and then people can follow it. On the other hand, we are here giving—and rightly giving—very wide discretion to directors to publish or withhold certain information. If these words stood with no proviso at all, the result would be that directors could really defeat the object which we all have in view. The great majority of them would not, but someone who wished to present accounts in the form which some of us have met—where everything is put under a single head—could do so. All they would have to do would be to say, "We think it is in the interest of the company."
With great respect to the noble Lord, Lord Barnby, I do not think that it is either necessary, or indeed, would it be the intention of the Board of Trade, to go into details of how the company is run. Prima facie the board is entitled not to present group accounts if one of these three conditions is fulfilled, and the people who
708
are to be the judge of that are the directors. But they have to be honest judges. They have to direct their minds, and the Board of Trade have to be satisfied that the directors have honestly directed their attention to the questions which are set out in (i), (ii), and (iii). If the Board of Trade are satisfied that that is the honest opinion of the directors after directing their minds to that problem, then it is not for the Board of Trade to quarrel with them in their honest judgment; it is only for the Board of Trade to refuse if what the directors have done is not to direct their minds at all to the particular matters they have to consider. I would venture to advise the House that this is a reasonable and necessary proviso to impose on the very wide latitude which it is intended to give here.
LORD RENNELL: I entirely agree with what the noble Viscount has said. I think it is a necessary provision; otherwise a coach-and-four could be driven through the whole of the consolidation proposals.
LORD DE L'ISLE AND DUDLEY: At the risk of harking back to what has been discussed already by the noble Lord, Lord Rennell, may I express the opinion that what has been said does rather reinforce his point: we ought to have a definition of group accounts. There might even 'be differences between the Board of Trade and the directors of a company about the definition of group accounts. What happens where a company has an interest in another company which is not a wholly-owned subsidiary or is not a subsidiary within the meaning of the Act, but is definitely within the grouping? I think it would be extremely helpful to all directors of companies and to the Board of Trade if the noble and learned Viscount could address his mind to this very important subject.
LORD BALFOUR OF INCHRYE: I wonder if I might ask one question? Are we going to run into an administration difficulty here? Directors are under an obligation to get their accounts out within a certain period of time. Supposing there is a conflict between directors who as a matter of policy do not wish to publish, and the Board of Trade who do not agree with that policy of the company. Obviously the Board of Trade will have to go into the matter fairly deeply, and rightly so. You may get a position where

709
the Board of Trade, through this duty, is going to overrun the time that is allotted to the company.
THE LORD CHANCELLOR: Difficulties may arise, but, of course, wise people start preparing their accounts a good time in advance, and allow themselves time for it. I think such a difficulty would be quite exceptional.
LORD SALTOUN: I beg the noble and learned Viscount's pardon, but the object of many companies is to get the accounts to the end of the financial year as soon as possible after the close of that financial year.
On Question, Amendment agreed to.
THE LORD CHANCELLOR moved, after Clause 12, to insert the following clause:
Form of group accounts.
—(I) Subject to the next following subsection, the group accounts laid before a holding company shall be consolidated accounts comprising—

(a) a consolidated balance sheet dealing with the state of affairs of the company and all the subsidiaries to be dealt with in group accounts;

(b) a consolidated profit and loss account dealing with the profit or loss of the company and those subsidiaries.

(2) If the company's directors are of opinion that it is better for the purpose—

(a) of presenting the same or equivalent information about the slate of affairs and profit or loss of the company and those subsidiaries; and

(b) of so presenting it that it may he readily appreciated by the company's members;

the group accounts may be prepared in a form other than that required by the foregoing subsection, and in particular may consist of more than one set of consolidated accounts each dealing with different groups of companies, or of separate accounts dealing with each of the subsidiaries, or of statements expanding the information about the subsidiaries in the company's own accounts, or any combination of these forms.
(3) The group accounts may be wholly or partly incorporated in the company's own balance sheet and profit and loss account.
The noble and learned Viscount said: This is the second new clause. In view of the observations made by the noble Lord, Lord Rennell, and the noble Lord, Lord De ('Isle and Dudley, it is worth studying. It starts:
"Subject to the next following subsection, the group accounts laid before a holding company shall be consolidated accounts comprising,—"
710
Therefore the norm of group accounts is a consolidated account. Now you get the next subject:
"If the company's directors are of opinion that it is better for the purpose—

(a) of presenting the same or equivalent information about the state of affairs and profit and loss of the company and those subsidiaries; and

(b) of so presenting it that it may be readily appreciated by the company's members;

the group accounts may be prepared in a form other than that required by the foregoing subsection,"—
that is to say, it may be other than a consolidated account. Then it goes on—and this answers the question of the noble Viscount, Lord Elibank—
"And in particular may consist of more than one set of consolidated accounts each dealing with different groups of companies, or of separate accounts dealing with each of the subsidiaries, or of statements expanding. the information about the subsidiaries in the company's own account, or any combination of these forms."
I think that gives us a pretty fair definition. The group accounts are. normally to be consolidated, but if the. company's directors think it is better, and these two conditions (a) and (b) are satisfied, then a considerable variation is allowed as to the way in which the group accounts are presented, without consolidation. This is an illustration, therefore, of considerable latitude being allowed to directors, which we all desire, and at the same time it gives, perhaps as nearly as anything can give, a definition of what group accounts should be. I beg to move.
Amendment moved—
After Clause 12 insert the said new clause,—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 12, to insert the following new clause:
Contents of group accounts.
.—(i) The group accounts laid before a company shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole, so far as concerns members of the-company.
(2) Where the financial year of a subsidiary-does not coincide with that of the holding: company, the group accounts shall deal with: the subsidiary's state of affairs as at the ends of its financial year ending with or last before that of the holding company, and with the subsidiary's profit or loss for that financial year.
(3) Without prejudice to subsection (I) of this section, the group accounts, if prepared as consolidated accounts, shall comply with the requirements of the First Schedule to this Act, so far as applicable thereto, and if not so prepared shall give the same or equivalent information:
Provided that the Board of Trade may, on the application or with the consent of a company's directors, modify the said requirements in relation to that company for the purpose of adapting them to the circumstances of the company.
The noble and learned Viscount said: This carries on the good work and makes it plain that "the group accounts laid before a company shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with thereby as a whole, so far as concerns the members of the company." That again is another qualification attaching to group accounts. The remainder of the clause, apart from that subsection which I have just quoted, is lifted almost entirely from the old Clause 12, which we passed on the previous Committee stage and, therefore, I do not think I need trouble your Lordships by discussing it further at this stage. I beg to move.
Amendment moved—
After Clause 12 insert the said new clause.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 12, to insert the following new clause:
Financial year of holding company and subsidiary.
—(I) A holding company's directors shall secure that, except where in their opinion there arc good reasons against it, the financial year of each of its subsidiaries shall coincide with the company's own financial year.
(2) Where it appears to the Board of Trade desirable for a holding company or a holding company's subsidiary to extend its financial year so that the subsidiary's financial year may end with that of the holding company, and for that purpose to postpone the submission of the relevant accounts to a general meeting from one calendar year to the next, the Board may on the application or with the consent of the directors of the company whose financial year is to be extended direct that, in the case of that company, the submission of accounts to a general meeting, the holding of an annual general meeting or the making of an annual return shall not be required in the earlier of the said calendar years.
The noble and learned Viscount said: The fourth new clause, again, is stolen from the old Clause 12. It provides that
712
a holding company's directors shall secure that except where in their opinion there are good reasons against it, the financial year of its subsidiaries shall coincide with the company's own financial year. As a matter of practice, that would be a very great benefit in reading the accounts of a group of companies. I beg to move.
Amendment moved—
After Clause 12 insert the said new clause.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 13 [Meaning of "holding company" and "subsidiary"]:
THE LORD CHANCELLOR: This and the next Amendment give effect to an undertaking I gave to put down an Amendment to express that which the noble Lord, Lord Rennell, was moving. Its effect is that any shares held or power exercisable by a company the ordinary business of which includes the lending of money as security, should be disregarded in deciding whether that company is a holding company in relation to the company in which it holds shares. I beg to move.
Amendment moved—
Page 14, line 26, leave out ("following paragraph") and insert ("two following paragraphs.")—(The Lord Chancellor.)
LORD RENNELL: I am much obliged to the noble and learned Viscount.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I have already referred to this Amendment.
Amendment moved—
Page 14, line 38, at end insert—
("(d) any shares held or power exercisable by, or by a nominee for, that other or its subsidiary (not being held or exercisable as mentioned in the last foregoing paragraph) shall be treated as not held or exercisable by that other if the ordinary business of that other or its subsidiary, as the case may be, includes the lending of money and the shares are held or power is exercisable as aforesaid by way of security only.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
3.55 P.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 13, to insert the following new clause:
General provision as to liability of directors for defective accounts.
.—(I) A director shall not be liable to fine or imprisonment under Section one

713
hundred and twenty-two or one hundred and twenty-three of the principal Act or any provision contained in the sections of this Act relating to a company's accounts for failing to take reasonable steps to comply or secure compliance with any provision of that Act or this Act, if he shows that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that that provision was complied with and was in a position to discharge that duty."
The noble and learned Viscount said: My Lords, this is to meet a point that was raised by the noble and learned Viscount, Lord Maugham. I said I thought there was no need for the new clause but, as so often happens when I find myself in conflict with the noble Viscount, I find on reflection that he was right and I was wrong. It is to meet this point. Your Lordships will remember that throughout this Bill we are confining the possible penalty of imprisonment to cases of wilful default. Negligence might be dealt with by a fine. I was asked to make it quite plain that if, for instance, directors had gone away—I think it was said to Malaya, or something of the sort—and entrusted the work to somebody whom they believed to be competent over here, there was no risk that they would be fined. I said I thought there was no such risk, but, as I say, on reflection I think it is much better to deal with the matter. I am grateful to the noble and learned Viscount, Lord Maugham, for calling my attention to it, and I hope that this new clause meets the point which he indicated on the previous occasion. I beg to move.
Amendment moved—
After Clause 53 insert the said new clause.—(The Lord Chancellor.)
VISCOUNT MAUGHAM: I am grateful to my noble and learned friend the Lord Chancellor for having been able to agree this new clause on behalf of the Government. To my mind, it is a clause of great value. I quite appreciate what he says as to the somewhat remote example of the director who was sent to Malaya, but it also meets the much more common case of a director who, full of honesty and integrity, is yet wholly unable to look at the book of accounts without a feeling of nausea and complete inability to understand it. Such a person as that ought not to be treated as if he were a criminal, because the position of directors, as is not always understood in the general business world, is a very singular one. They are
714
not trustees. They have not got property in their hands. They are, in a sense, trustees of the powers committed to them. Even so, their powers are limited, because in general they only relate to actions at a hoard meeting—sometimes once a fortnight, sometimes at even more remote intervals—and in the meantime they are not obliged to think of the company. They may live a long way away; they turn up at the board meeting and give their best attention to what takes place, and that is the end of their obligation.
Their duties being intermittent and generally exercised at a time when they are liable to be out-voted by other members of the board, and since they are, very often, people who are appointed to exercise particular duties in connexion with the company——such as, for instance, helping in matters of transport or matters of sales of property and things of that kind, and in no way concerned directly with the accounts—I thought it was most dangerous to pass the new clauses in this Bill, which direct them to do certain things in relation to accounts, and which provide that profit and loss accounts and balance sheets are not deemed to be proper accounts unless they meet all the obligations that we are imposing upon the company. I was afraid it would be said that directors had to do very much more than they had ever thought of doing, or than they were in general competent to do, because everybody knows that these questions of accounts are done by staffs of accountants, or by special accountants who are appointed by the company, and that the directors are bound to trust them.
This clause, which I know has been the subject of a good deal of consideration, exactly meets the difficulties which I thought might arise in its absence. It satisfies what I think is just: it imposes upon directors a certain obligation to see that certain work is done by people who are properly supposed to be competent and reliable. But, once that is done, there is no personal liability on the directors in relation to the particular matters with which the clause is concerned. Accordingly, I thank the noble and learned Viscount, the Lord Chancellor. I am content with this clause, and I think it will be of great use hereafter, to various honest directors who are attacked because something has gone wrong with the accounts, whether by accident or fraud, so that a company gets into difficulties. In such

715
cases as those of the City Equitable Insurance Company and the National Bank of Wales, perfectly honest directors have been attacked, but unsuccessfully attacked, under the law as it stands. And I am glad to think that that will still be the case after this Bill has passed into the legislation of the country.
VISCOUNT SWINTON: Speaking neither as a lawyer nor as one who is nauseated (though I am sometimes somewhat puzzled) by accounts, I should like to thank the noble and learned Viscount, the Lord Chancellor, for this clause. If I may say so, I think it clearly defines the position of a director—and not only a director who is merely a part-time director. It is equally important from the point of view of the whole-time executive directors of whom I hope there will be increasing numbers. Whichever they are, in this matter I regard it as the function of a director in relation to accounts, and a common function of the board, to be satisfied that there is a thoroughly competent chief accountant appointed. I would go further, and say that the relations with the auditors are those which a company should always have as to the general form of account. But having established that position, whether they are part-time directors or whole-time executives, technical directors, or sales directors, it is quite impossible for those directors continually to examine the accounts to see whether the chief accountant is carrying out his duties. If they were to attempt to do that, they would be grossly neglecting the job for which they were employed, and any chief accountant worth his salt would immediately resign his position and be snapped up by a company which conducts its business more satisfactorily. I thank the noble and learned Viscount for putting down this Amendment. From the practical point of view I think it is wholly satisfactory.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: May I move that the House be now resumed, in order that I may make a short statement?
Moved, That the House be now resumed.—(The Lord Chancellor.)
On Question, Motion agreed to.
House resumed accordingly.

FLOOD DISTRESS.
4.3 p.m.
THE LORD CHANCELLOR: My Lords, the following statement is now being made by the Chancellor of the Exchequer in another place:
"His Majesty's Government fully realize, and deeply deplore, the heavy losses caused by the floods to great numbers of individuals and also to local authorities. They are now considering, as a most urgent matter, how they can best help to relieve agricultural and other losses, and also the emergency expenditure of public authorities within their areas. A further statement on this subject will be made next week. Meanwhile the Lord Mayor of London is opening a fund for the relief of distress throughout the United Kingdom, and I have informed him that His Majesty's Government will give a lead to other subscribers by contribution forthwith £1,000,000 to this fund. It must be the aim of us all in face of this latest trial to do our utmost to help our fellow citizens and to make good all damage as son as we can."

COMPANIES BILL. [H.L.]
Clause 14 [signature and copies of accounts]:
THE LORD CHANCELLOR: This Amendment is consequential on the new clause we have just passed. I beg to move.
Amendment moved—
Page 15, line 5, leave out ("consolidate") and insert ("group")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment enables the directors, whilst approving the profit and loss and group accounts, to sign only the balance sheet. I beg to move.
Amendment moved—
Page 15, line 7, leave out from ("and") to the end of line 17 and insert ("approved by the board of directors before the balance sheet is signed on their behalf.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE CHAIRMAN OF COMMITTEES: The next Amendment is consequential.
Amendment moved—
Page 15, line 20, leave out ("consolidated") and insert ("group").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Extension of rights and duties of auditors]:
THE CHAIRMAN OF COMMITTEES: This is a similar consequential Amendment.
Amendment moved—
Page 15, line 45, leave out ("consolidated") and insert ("group").—(The Lord Chancellor.)
On Question, Amendment agreed to. Clause 15, as amended, agreed to.
Clause 16 [Extension of disqualifications for appointment as auditor]:
LORD CHORLEY: My noble and learned friend has been bowling for a very long time, during which he has bowled a substantial number of maiden avers, if I may say so; in fact, I think except for one half volley which he bowled to the noble and learned Viscount, Lord Maugham, he has had very few runs scored off him. This Amendment to Clause 16 is inserted purely for the purpose of enabling the Board of Trade to recognize the Institute of Chartered Accountants in Ireland as a body of which the members are qualified to audit accounts of companies. They are practitioners here, and it is obviously very desirable that the; qualification of this Institute should be accepted. I beg to move.
Amendment moved—
Page 16, line 36, leave out ("Great Britain") and insert ("the United Kingdom").—(Lord Chorley.)
On Question, Amendment agreed to.
THE CHAIRMAN OF COMMITTEES: The next is a similar Amendment.
Amendment moved—
Page 15, line 40, leave out ("Great Britain ") and insert (" the United Kingdom ").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next Amendment is purely drafting. I beg to move.
Amendment moved—
Page 17, line 1, leave out from ("exempt") to end of line 3 and insert ("private company").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, at the end of subsection (I), to insert:
"(2) In the application of the foregoing sub-section to a person who on the said eighteenth day of July was or had within the preceding six months been—

(a) engaged in a whole-time capacity in war service; or

(b) detained or interned in any enemy or neutral country as a prisoner of war or otherwise in consequence of war;

there shall be substituted for the reference to that day a reference to the first day of January, nineteen hundred and forty-seven; and for the purposes of this subsection the expression 'war service' means service in His Majesty's Forces and any employment which the Board of Trade consider may properly be treated for those purposes in the same manner as service in those forces."
The noble Lord said: This is an Amendment which we have put down to meet an undertaking given to the noble Lord, Lord De L'Isle and Dudley, in order to cover the position of ex-Servicemen who have not yet been able to embark upon the profession of accountancy. The date fixed in the Cohen Report was felt to be rather unfair to them. We have considered the suggestion which the noble Lord made and, as your Lordships will see, we have inserted the date January 1, 1947. It seems undesirable to fix a later date than this, and I hope your Lordships will agree that the difficulty has been effectively met. 1 beg to move.
Amendment moved—
Page 17, line 3, at end insert the said few subsection.—(Lord Chorley.)
LORD DE L'ISLE AND DUDLEY: I should like to express my gratitude to the noble and learned Viscount, the Lord Chancellor, for having this Amendment inserted. I think it should meet the hardship which might haw been caused by the words which stood in the Bill as originally drafted. It now gives an opportunity to ex-Servicemen who have come back and who will not, I trust, find that their livelihood has been removed by this Bill.
On Question, Amendment agreed to.
LORD CHORLEY: This next Amendment is an attempt to meet the difficulty which arose in connexion with the disqualification of employees of directors and officers of the company from appointment as auditors. In English law, your Lordships will remember it was pointed out that the appointment of a firm as auditor would have the same effect as the appointment of the individual partners in the firm, but in Scotland, where a firm is a legal entity, the position is different. I beg to move.
Amendment moved—
Page 17, line 12, at end insert ("and to any Scottish firm of which a director or officer of the Company is a partner").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next Amendment is consequential. I beg to move.
Amendment moved—
Page 17, line 17, leave out from ("exempt") to end of line 19 and insert ("private company").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 16, as amended, agreed to.
Clause 17:
Appointment and remuneration of auditors.
17.—(i) The auditors of a company appointed at any annual general meeting shah be appointed to hold office from the conclusion of that, until the conclusion of the next, annual general meeting; and at any annual general meeting a retiring auditor, however appointed, shall be reappointed without any resolution being passed, unless—
(b) a resolution has been passed at that meeting that he shall not be reappointed (whether or not the resolution appoints some other person instead of him); or
(3) A resolution that a retiring auditor shall not be reappointed without the appointment of another person instead of him shall require the same notice to the company as would have been required had the resolution extended to the appointment of another person instead of him; and where notice of the intention to move ouch a resolution is given to the company, the company shall give notice thereof to the auditor and members of the company as if it had extended to the appointment of another person.
(4) The notice to be given to a retiring auditor of an intended resolution that he shall not be reappointed or that some other person shall be appointed instead of him, shall be given forthwith after receipt by the company of notice of the resolution.
LORD CHORLEY LORD CHORLEY moved to leave out paragraph (b) of subsection (I) and to insert "(b) a resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed; or". The noble Lord said: This Amendment and the Amendment to line i of page 18 go together. They give effect to an undertaking to give further consideration to Clause 17, especially in so far as it might make it unduly difficult for directors to change their auditors for good reasons. The Amendments provide in effect that the retiring auditor shall be reappointed unless a resolution is passed either appointing somebody in his stead or providing expressly that he shall not be reappointed, and that anybody wishing to put forward such a resolution must give twenty-eight days' notice to the company in the ordinary way. I beg to move.
Amendment moved—
Page 17, line 33, leave out paragraph (b) and insert the said new paragraph.—(Lord Chorley.)
LORD SALTOUN: With great deference, I do not really see how these Amendments improve the present position, and indeed I think that if they are carried they may well lead to the creation of some difficulties. If I am rightly informed, the present position is perfectly simple. Nobody except the existing auditor can be appointed as the auditor of a company unless his name has been put forward and appears on the notice convening the meeting, and if that is done the existing auditor must be perfectly well aware of it. I am quite agreeable to a provision requiring that notice shall be given, but here there is the possibility of a negative resolution, because the proposed new paragraph (b) contains the words "or providing expressly that he shall not be reappointed." I cannot help thinking that that is rather a dangerous provision. I do not think it improves the present position, which is perfectly clear and which gives to the auditor the certainty that he will be reappointed unless somebody else is nominated and appointed.
This proposal puts it within the power of any member of a company to give notice to the directors that he is going to propose that the auditor shall not be reappointed. That member may be merely an ordinary trouble-maker or he may be the representative of the hidden

721
hand of an enemy. In that event the directors will immediately be placed in a very difficult position. The resolution may or may not be carried, and being a purely negative resolution it will not propose the appointment of another auditor. The directors will not want to be left without an auditor. Are they to put forward another name, or are they not? It seems to me that this procedure would place them in a great difficulty and would not improve the present position. I respectfully beg His Majesty's Government, therefore, to reconsider this matter. These proposed Amendments do not strengthen the auditor's position but they do weaken the position of the company as a whole, because they put it within the power of any single member of the company to place the company in what might be a position of some difficulty.
VISCOUNT MAUGHAM: May I say a word upon this clause, which I have always thought was rather troublesome arid difficult? I am not quite sure that I understand how it is going to work. I am assuming that we are discussing not only the Amendment at the bottom of page 7 of the Marshalled List but also that at the top of page 8, which provides that special notice shall be required for a resolution appointing as auditor a person other than a retiring auditor. If somebody gives notice within the required period of twenty-eight days that he intends to put forward a resolution that the existing auditor shall not be reappointed, that resolution will be discussed at the meeting and may be carried. In the meantime, what arrangements can be made for the appointment of somebody to take the place of the man who is being, in effect, dismissed? If notice of the intention to move that the existing auditor, Mr. A., shall not be reappointed has been given only twenty-eight days before the meeting, there will not be time for the directors to say, "If that resolution is passed, we shall propose Mr. B. as auditor"; and if the resolution is passed the position will be that there is no auditor appointed to act after the meeting.
Let us suppose that the other course is taken and that a shareholder gives notice that he will move that Mr. A be not appointed but that Mr. C be appointed in his place. What is the position of the directors then? They may approve of Mr. C or they may not. What is their
722
proper course? They probably want Mr. B to be appointed in the event of the appointment of Mr. A not being agreed to. I can see that they are going to be in a position of great difficulty in dealing with the matter. If the Amendments we have before us are agreed to and. Clause 17 of the Bill comes into effect, Section 132 of the Act of 1929 will remain, except in so far as it is altered, as the code for the appointment of auditors. With the greatest respect to the noble Lord and to those who are assisting him, I think it would be desirable to reconsider Clause 17 with a view to seeing whether it can be made a little easier for the ordinary company to deal with this matter in the event of somebody wanting to appoint a new auditor. The precise form in which that should be done is not a matter on which I am at the moment in a position to help, but I am quite sure that some procedure could be devised which would be a little easier to work than Clause 17 would be if these Amendments were passed.
LORD RENNELL: I think the noble and learned Viscount has made a very good point and one that requires further consideration. There is yet another point that arises on the wording of Clause 17 as it would be if these Amendments were passed, and it concerns the word "expressly." Your Lordships will recollect that when this clause was debated at an earlier stage in Committee, one of the points made was that a company might wish to change its auditor for the perfectly bona fide reason that the auditor hitherto employed had not the capacity or the qualifications to carry on the business of a larger company, or that the company had developed along particular lines and that the auditor therefore ought to be changed. It ought to be possible to change the auditor in such a manner as not to injure the outgoing auditor by having to make a statement that he is no longer sufficiently qualified, or something of that sort. I am going to ask the noble and learned Viscount exactly what is intended by the word "expressly," which is twice used. I submit it might be read that the word "expressly" means that where a resolution is tabled providing that an auditor shall not be reappointed, it shall be explained why he was not to be reappointed. At least that is an interpretation which might be put upon the word "expressly."

723
If that is so, this Amendment will produce precisely the result which we have been seeking to avoid in altering the terms of the original draft of Clause 17 as it appeared in the printed Bill. Whether or not the new draft of paragraph (b), to which the noble and learned Viscount, Lord Maugham, has referred, is right or not on the procedure, I submit that the word "expressly" is unnecessary and perhaps dangerous in the Amendments which appear in the Marshalled List. Even if the Amendment were to satisfy the points raised by the noble and learned Viscount, Lord Maugham, the clause is not strengthened by the use of the word "expressly," and would be just as strong from the point of view of those who drafted the Amendments if that word was omitted, both in this Amendment and in the one following.
LORD CHORLEY: With regard to the last point made by the noble Lord, Lord Rennell, as to the meaning of the word "expressly," I am rather inclined to agree with him. I think it is intended to mean in terms the interpretation the noble Lord put forward, and it might be possible to leave that word out and improve the draftsmanship. We will certainly look at it, and I am much obliged to the noble Lord for his suggestion. With regard to the more substantial point which has been made by the noble Lord, Lord Saltoun, and the noble and learned Viscount, Lord Maugham, I really doubt whether there is all this difficulty. This resolution has to be brought forward at the Annual General Meeting, and I should think it will be very rarely that anything of the kind happens. But I would have thought it was only right that shareholders who had an objection to the auditor should be allowed to table a resolution to the effect that he should be removed, and it does seem to me that it is unlikely to give rise to so much difficulty as noble Lords anticipate. After all, the directors still have a week at their disposal in which to find an alternative auditor, in the event of the twenty-eight days' notice having been given. If, by the end of that period, they cannot find another auditor and the company is left without one, there is always the power left in the Board of Trade who, in the event of an auditor not being properly appointed, have powers to appoint one themselves. We cannot
724
envisage a situation in which a company would be left without an auditor.
VISCOUNT MAUGHAM: Would the noble Lord forgive me for one moment? It is quite possible that he is right, and I am not in the least dogmatic about this matter. But is not the difficulty partly this: that the Amendment requires special notice for a resolution which is to be proposed at a company's annual general meeting appointing as auditor a person other than a retiring auditor? The board of the company, when they receive notice of a resolution to displace the existing auditor, may not have twenty-eight days during which to give notice that they want to appoint somebody else. I hope I have made myself clear.
LORD SALTOUN: I do not think the noble Lord is really dealing with my point. My point is that you are putting the directors in a hole. If I am an ordinary shareholder, perhaps having one share in the company, and I write in and say, "I am going to move that the present auditor be not re-appointed," I put the directors in a hole. They may disregard me, but I may have been lobbying behind the scenes, and they do not know whether to stick to their auditor, who may be a good man, or put up somebody else in his place. The present position is perfectly clear, and the auditor is just as strong under the present law as he can be: he is going to be reappointed unless he is not re-elected at the meeting. If any rival comes into the field he has to be named in the notice of the meeting. I do not see that these Amendments give him a stronger position.
VISCOUNT SWINTON: With great respect, I should have thought that the directors were in a better position if notice was given. As the noble Lord says, a shareholder may have a grudge against the auditor, or he may be a nuisance shareholder with one share. If he really wants to make himself a nuisance what he does is not to give the directors twenty-eight days' notice, but he goes round collecting a lot of other nuisance people and turns up at the meeting and votes against the auditor. The directors are much less likely to be taken by surprise if they have twenty-eight days' notice, and naturally if their auditor is a good man they will stand up for him and will fortify themselves with an

725
adequate number of proxies. The other point is more difficult, but with that one I think we agree.
LORD RENNELL: The point in my mind was that if a shareholder waits until the last possible moment to put in a special resolution, under the terms of this clause the directors may not then have time within the twenty-eight days to put forward an alternative suggestion.
VISCOUNT MAUGHAM: They have to hunt for the man, and it may take them a week to find a suitable person.
LORD CHORLEY: There may be some practical difficulties there, I quite agree, but nothing like the difficulty which arises when the shareholders act in the way the noble Viscount, Lord Swinton, suggested, and carry out this nefarious scheme actually at the meeting. But surely one has to look at this from the commonsense point of view. On how many occasions is this thing going to arise in practice? I should imagine practically never. In the one case in a thousand where it does arise there is the reserve power in the Board of Trade to appoint an auditor because no auditor was appointed at the annual general meeting. I shall, however, be glad to have a look at the matter, and if we think something ought to be done we will put an Amendment down.
On Question, Amendment agreed to.
LORD CHORLEY: I have already dealt with this Amendment. I beg to move.
Amendment moved—
Page 18, line I, leave out subsections (3) and (4) and insert—
("(3) Special notice shall be required for a resolution at a company's annual general meeting appointing as auditor a person other than a retiring auditor or providing expressly that a retiring auditor shall not be reappointed.
(4) On receipt of notice of such an intended resolution as aforesaid the company shall forthwith send a copy thereof to the retiring auditor (if any).").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18 agreed to.
Clause 19 [Director and secretary]:
4.30 p.m.
LORD CHORLEY LORD CHORLEY moved, after subsection (3), to insert:
"(4) A provision requiring or authorizing a thing to be done by or to a director and the
726
secretary shall not be satisfied by its being done by or to the same person acting both as director and as, or in place of, the secretary.
The noble Lord said: This is a small but, I think, useful Amendment. Except where a company has only one director, a director may also be the secretary. There are, on certain occasions, requirements that documents shall be signed both by a director and the secretary—for example, the annual return. Obviously it is very undesirable that one person should fulfil the functions of both secretary and director for a purpose of this kind. The Amendment has been drafted to meet this difficulty. I beg to move.
Amendment moved—
Page 19, line 23, at end insert the said new subsection.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 19, as amended, agreed to.
Clause 20:
Register of directors.
20.—(i) Every company shall, in the register of its directors required to be kept by Section one hundred and forty-four of the principal Act, include with respect to the secretary or each of the joint secretaries of the company the following particulars, that is to say
(a) in the case of an individual, his present Christian name and surname, any former Christian name and surname and his usual residential address;
and accordingly;—
(ii) in subsection (2) of the said Section one hundred and forty-four any reference to directors shall include a reference to the secretary, and in subsection (4) thereof the references to subsections (I) and (2) thereof shall include a reference to this subsection.
(2) The period within which a company is required to make a return to the registrar of companies under the said subsection (2) of the particulars specified in the said register shall in relation to the particulars so specified with respect to any person who is the company's secretary at the date of the coming into force of the last foregoing subsection, be fourteen days from that date.
(4) Paragraph (d) of subsection (I) of section one hundred and forty-five of the principal Act (by which every company to which that section applies is required in all trade catalogues trade circulars. show cards and business letters to state with respect to every director his nationality of origin, if his nationality is not the nationality of origin) shall cease to have effect.
4.32 p.m.
LORD CHORLEY: There are a number of Amendments here which, with

727
your Lordships' permission, I should like to take together. They are to line 26, line 32 and line 42 of page 19, and to line 6 on the next page. These Amendments all go together and are framed to give effect to an undertaking to put down an Amendment to make it clear that Scottish firms could be appointed as the secretary of a company, and also to meet the point raised by the noble Viscount, Lord Swinton, to provide that in England where a firm is appointed secretary, information will not have to be given in the Register of Directors and Secretaries regarding the names and addresses of each of the partners of the firm. Where there are a number of partners in the firm this might be a very onerous business, as pointed out by the noble Viscount, Lord Swinton, and this little group of Amendments is framed to meet these difficulties. I beg to move.
Amendments moved—
Page 19, line 26, leave out ("or each of the joint secretaries").
Page 19, line 32, leave out ("in the case of a corporation, its corporate name") and insert (" in the case of a corporation or a Scottish firm, its corporate or firm name ")
Page 19, line 42, at end insert—
("(2) Where there are joint secretaries, the particulars required by the foregoing subsection shall be given with respect to each of them, except that where all the partners in a firm are joint secretaries, the name and principal office of the firm may be stated instead of the said particulars.")
Page 20, line 6, leave out ("the last foregoing subsection") and insert ("subsection (I) of this section").—(Lord Chorley.)
On Question, Amendments agreed to.
LORD CHORLEY: This Amendment is really consequential on an Amendment inserted previously on the Motion of the noble Viscount, Lord Bridgeman, relating to the statement of nationality of origin.
I beg to move.
Amendment moved—
Page 20, line II, at beginning insert—
("So much of subsection (I) of the said section one hundred and forty-four as requires a director's nationality of origin to be stated and").—(Lord Charley.)
On Question, Amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 agreed to.
Clause 22:
Removal of directors.
22.—(1) A company may by ordinary resolution, if notice is given in accordance with the next following subsection, remove a direc-
728
tor before the expiration of his period of office, notwithstanding anything in its articles or in any agreement between it and him:
Provided that this subsection shall not, in the case of a private company, authorize the removal of a director holding office for life on the eighteenth day of July, nineteen hundred and forty-five, whether or not subject to retirement under an age limit by virtue of the articles or otherwise.
(2) Notice of intention to move a resolution under this section shall be given to the company not less than twenty-one days before the meeting at which it is to be moved, and the company shall forthwith after receipt of any such notice send a copy thereof to the director and shall give notice thereof to the members of the company, either by advertisement or in any other mode allowed by the articles, not less than fourteen days before the meeting:
Provided that if, after notice of the intention to move the resolution has been so given, a meeting is called for a date twenty-one days or less after the notice has been given, the notice, though not given within the time required by this subsection, shall be deemed to have been properly given for the purposes thereof.
(3) Where a director is removed by virtue of this section, the appointment of another person in his place at the meeting at which he is removed shall be business which may be transacted at that meeting without notice; but, if at that meeting the vacancy is not filled, it may be filled as a casual vacancy.
(5) Nothing in this section shall be taken as depriving a person removed thereunder of compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director.
LORD CHORLEY LORD CHORLEY moved in subsection (1) to leave out "if notice is given in accordance with the next following subsection." The noble Lord said: This and the next Amendment go together. They have been framed in order to give, effect to the undertaking which was given to the noble Lord, Lord Rennell, to move an Amendment to ensure that the same notice be given of a resolution to appoint a director in place of one removed, as is required under the clause in the case of a resolution to remove an auditor. The effect of the Amendment is to require that in both cases twenty-eight days' notice of any resolution to remove or appoint somebody should be given to the company, and the company shall then give to its members in the ordinary way notice of not less than twenty-one days.
Amendment moved—
Page 21, line I, leave out ("if notice is given in accordance with the next following subsection ").—(Lord Chorley.)
VISCOUNT MAUGHAM: I should like to say this, before passing from this clause. As I indicated on the previous occasion, I strongly object to this clause, because 1 think it will lead to very great trouble and be of no real use to companies. It would be much better if the matter had been left as it exists under the Act of 1929. However, I am not going to repeat my arguments. I am only going to suggest that you are putting it in the power of a single, ill-intentioned shareholder who has a grudge against a particular director to attempt to remove that director by a bare resolution, and the directors are bound to have printed and to take all the trouble that is involved in sending out the notice of the resolution to maybe a thousand shareholders. There are cases where it is clone out of spite, where the resolution is not supported and where it is probable that the whole thing in done to annoy by a disgusted shareholder. There should be a provision under which the expenses incurred ought to be paid by the person who insists on the resolution being sent out to the shareholders. Otherwise it seems to me you are giving a chance to some of those people whose one idea is to make trouble and to advertise themselves in some way, and who are also spiteful and vindictive. You are giving them an opportunity to advertise themselves and to do all these things at no expense to themselves at all, and I do not believe that that will be good.
My recollection of companies goes back a long way, and I have known in my day at least half a dozen people who went about making trouble. Some of them were stopped by provisions which had been put in other Acts. I can mention the names of some people who were an absolute terror to company directors and who were deliberately trying to make trouble in such ways as by attacks on directors, and so forth. If you are resolved to retain this Clause 22, which enables a bare resolution to have this very serious result against a director, you should know that even the fact that the resolution is to be proposed has a very serious effect on professional men. Directors ought not to be removed unless there is really a good reason. The mover of the resolution has not to give any grounds whatever. He cannot be attacked by proceedings in slander. He need say nothing except propose that the director should be removed. The Government
730
should consider whether there should not be put in this Bill a provision imposing the expense of applying for the notice, sending it out, and so forth, on the shareholder. If that is done, I think it will in many cases prevent useless and vindictive resolutions being passed.
VISCOUNT SWINTON: I am in favour of this clause. Here I differ from my noble and learned friend. 1 think there ought to be a right to move a resolution to remove a director, and I agree it ought to be by ordinary resolution. I said on a previous stage of the Bill that, whether approving of or removing a director over the age of seventy, majority rule ought to hold. But I do think the noble Viscount has raised a great point of substance in regard to this clause being abused, and here I speak not at all in the interests of the particular director but in the interests of the company. It might be a most serious thing for a company if some mischievous person who buys one share in it—and it might be a company with 8o,000 shareholders—should proceed, either for fun or for spite, to put in three or four resolutions (your Lordships will observe that they will have to be separate resolutions) expressing his desire to get rid of certain directors—they might be Lord Rennell, Lord Balfour and Viscount Maugham. This mischievous person, we will assume, puts all these resolutions down one after the other, The result is that the board have to go to the expense of printing these resolutions and also of issuing some statement, as no doubt they would wish to do, making it clear that they entirely disapprove of the resolutions. There would be the expense of printing (and, be it remembered, we are short of paper) and the expense of postage. And after all this expenditure it may well be that when the matter goes to the poll, the proposer of the resolutions may poll only one vote in a company with a capital of £20,000,000. That really would be perfectly outrageous.
The person who moved these resolutions might be a sort of practical joker. It might be that he would not bother to turn up at all at the meeting to move his resolutions or to vote. He might simply-make himself a nuisance by putting them down. There is a very good rule concerning General Elections, by which,: I believe, candidates who fail to get one-eighth of the total votes polled forfeit their

731
deposits. I think that there ought to be a similar sort of rule applicable to cases such as those of which I am now speaking, so that in the more serious cases the culprit would be required to forfeit a deposit. I believe that when investigations are called for, which are, of course, matters of greater substance, a deposit is required. I am not sure how what I suggest ought to be accomplished—whether there ought to be a discretion vested in the Board of Trade, or whether the company ought to be able (and I am sure this would be a fair thing) to put the matter to the majority vote of the shareholders. I think the latter course would be very reasonable. I throw this out as a suggestion.
If a person proposes resolutions of this kind he ought to make some sort of a deposit, and then it should rest with the company to vote whether the company itself should bear the expense of this business. Or, if the resolution were thrown out, I will not say by a bare majority but by a big majority, the kind of majority which, in proportion, causes a man to lose his deposit at a general election—that is to say, if the proposer fails to get the votes of one-eighth of the shareholders for his resolutions—then he should forfeit to the company a deposit which would roughly cover the expenses to which the company has been put. I think that this is really a substantial point. I dare say that the sort of situation which I have visualized would not happen very often, but I am sure that what I have suggested would be a great deterrent to mischief makers and frivolous people who might be inclined to do this sort of thing.
LORD CHORLEY: I was interested to note that the disgruntled shareholder of whom the noble Viscount, Lord Swinton, spoke did not include the noble Viscount himself among the directors whom he proposed to throw out. The noble and learned Viscount, Lord Maugham, has referred to a bare resolution. The difficulty would, of course, be exactly the same if it were required to be a special resolution. The difficulty lies in the expense and the trouble of sending out notices. Therefore, it does not really matter whether it is a bare or a special resolution. There obviously is a possible difficulty here, and we will look into it between now and the
732
Report stage. I am much obliged to the noble Viscount for his suggestion about deposits.
On Question, Amendment agreed to.
Amendment moved—
Page 21, line II, leave out subsections (2) and (3) and insert—
"(2) Special notice shall be required of any resolution to remove a director under this section or to appoint somebody instead of a director so removed at the meeting at which he is removed, and on receipt of notice of an intended resolution to remove a director under this section the company shall forthwith send a copy thereof to the director concerned.
(3) A vacancy created by the removal of the director under this section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy."—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is purely a drafting Amendment.
Amendment moved:—
Page 21, line 38, at end insert ("or as derogating from any power to remove a director which may exist apart from this section.")—(Lord Chorley.)
On Question, Amendment agreed to.
VISCOUNT MAUGHAM: Before we leave this clause may I say—and the Government have kindly consented to consider this—that the real point in substance (though in a sense it is a strange one if you are not accustomed to dealing with these things) about the Amendments which we are making in reference to removing directors is that practically nobody, except in cases of crime or grave misconduct, has ever thought that they could get an extraordinary resolution passed to remove a director. Since the passing of the Act of 1929, I do not suppose there have been more than two or three such attempts during the whole period of nearly twenty years. This has got nothing to do with the merits of the matter, but as soon as you make an alteration in the law so that a bare resolution can effect this object you will at once get into a different country altogether. You will find that people will put down a resolution with the hope of getting a majority of those present at a meeting. They will have a shot at it so to speak, whereas under the existing section of the Act of 1929 they would never have dreamt of trying to get such a resolution passed. Accordingly, I do invite the Government to consider this as a much more serious

733
matter and one much more likely to occasion trouble under the present dispensation than has been the case since 1929.
Clause 22, as amended, agreed to.
Clause 23:
Retirement of directors under age limit.
(4) A person appointed director in place of a director retiring by virtue of subsection (2) of this section shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the person in whose place he is appointed was last appointed a director; but, except as provided by this subsection, the retirement of a director out of turn by virtue of the said subsection (2) shall be disregarded in determining when any other directors are to retire.
(5) Nothing in the foregoing provisions of this section shall prevent the appointment of a. director at any age, or require a director to retire at any time, if his appointment is made or approved by ordinary resolution and his age is disclosed at the meeting at which the resolution is passed.
(6) This section shall have effect subject to the provisions of a company's articles, except in so far as the next following section provides that it shall have effect notwithstanding the articles.
LORD CHORLEY LORD CHORLEY moved to leave out subsections (4) to (6) and insert:
"(4) Subsection (2) of this section shall not apply to a director who is in office at the date when it comes into force so as to terminate his then appointment before the conclusion of the third annual general meeting commencing after that date, but shall apply so as to terminate it at the conclusion of that meeting if he has attained the age of seventy before the commencement of the meeting.
(5) Nothing in the foregoing provisions of this section shall prevent the appointment of a director at any age or require a director to retire at any time, if his appointment is or was made or approved by the company in general meeting. but special notice shall be required of any resolution appointing or approving the appointment of a director for it to have effect for the purposes of this subsection and the notice thereof given to the company and by the company to its members must state or must have stated the age of the person to whom it relates.
(6) A person reappointed director on retiring by virtue of subsection (2) of this section, or appointed in place of a director so retiring, shall be treated, for the purpose of determining the time at which he or any other director is to retire, as if he had become director on the day on which the retiring director was last appointed before his retirement; but, except as provided by this subsection, the retirement of a director out of turn by virtue of the said subsection (2) shall be disregarded in determining when any other directors are to retire.
(7) In the case of a company first registered under the principal Act after the beginning of the year nineteen hundred and forty-seven, this section shall have effect subject to the provisions of the company's articles; and in the case of a company first so registered before the beginning of that year—

(a) this section shall have effect subject to any alterations of the company's articles made after the beginning thereof; and

(b) if at the beginning thereof the company's articles contained provision for retirement of directors under an age limit or for preventing or restricting appointments of directors over a given age, this section shall not apply to directors to whom that provision applies."

The noble Lord said: I rise to move this and the following Amendment with mixed feelings. My noble and learned friend described me as "the world's greatest authority" on the original Clause 23, which now, if your Lordships accept the Amendment, will be eliminated. I was not the world's greatest authority on anything else, so I shall no longer be the world's greatest authority on anything. But even the "world's greatest authority" on the original Clause 23 was not altogether satisfied that he understood the whole of the clause as it stood. Therefore it may well be right that we should place the new clause, which I think your Lordships will agree is very much clearer, on the Statute Book. The main difficulty in drafting, of course, arose in connexion with the Cohen Committee transitional recommendations, which were embodied in the original Clause 23 (now Clause 24) which it is proposed to remove. We promised before that we would try to simplify that clause. We also promised, at the same time, to try to amend the earlier clause, Clause 22 as it then was, so as to require adequate notice to be given of any resolution to appoint or keep in office any director who had passed the retiring age.
The effect of the new provision is that a company is free to do whatever it. likes under its Articles with regard to the retirement of its directors. Existing company provisions, such as those allowing directors to stay in office until they attain a given age, will be allowed, even though that age might be over seventy. With regard to those directors who are already in office on the date when the Act comes into force, it provides that they will now have a period of grace, and they will not leave until the third annual general meeting commencing after that

735
date. That will have the effect in some cases of extending the period, but in other cases, where they have been appointed for a long period of time, say five or ten years, it will, in fact, cut them down. Of course, the very large majority of these cases are cases of three years' appointment, so that in practice it probably will not make very much difference. I hope your Lordships will agree that this clause as it is now proposed to be amended is a very great improvement over the earlier clause, and that you will accept it. I beg to move.
Amendment moved—
Page 22, line 9, leave out subsections (4) to (6) and insert the said new subsections.—(Lord Chorley.)
VISCOUNT SWINTON: This certainly makes it all very intelligible, and we can now share with Lord Chorley the understanding of what it really means. For my part, I was always quite prepared to accept the general rule that people should retire at seventy, and that shareholders should have a right to say, by an ordinary resolution with a bare majority, whether they wanted to keep them or not. I would have been quite happy to stick to that. I think it is not a great matter—a year or two this way or that—and I am rather glad that people who would go on until they are 101 are going to be removed before they reach their second childhood. That certainly is an improvement, and, broad and large, I think the seventy-year-olds get a good run for their money.
VISCOUNT MAUGHAM: I would only add this, in oblique reference to what has fallen from my noble friend, Viscount Swinton. I have never thought it would be an insult to any man to be removed from the office of director at seventy. It is a very different thing for him to be removed from a directorship when he is twenty-five years old, simply upon a vote of a majority of members.
VISCOUNT SWINTON: I did not think we were in disagreement over this.
On Question, Amendment agreed to.
Clause 23, as amended, agreed to.
Clause 24 [Application of age limit to directors of existing companies]:
LORD CHORLEY: This Amendment is consequential on the last Amendment.
Amendment moved—
Page 22, line 26, leave out Clause 24— (Lord Chorley.)
On Question, Amendment agreed to.
Clause 25 agreed to.
Clause 26 [Power to restrain fraudulent persons from managing companies]:
LORD CHORLEY: With your Lordships permission I would like to take this Amendment and the next Amendment together. They are both consequential to another clause which defines the expression "officer."
Amendment moved—
Page 24, line 23, leave out ("a director or") and insert ("an").—(Lord Chorley.)
On Question Amendment agreed to.
Amendment moved
Page 25, line 14, leave out (" "director" ") and insert (" "officer" ").—(Lord Charley.)
On Question, Amendment agreed to.
Clause 26, as amended, agreed to.
Clause 27 agreed to.
Clause 28:
Prohibition of loans to directors.
28. It shall not be lawful for a company to make a loan to any person who is its director or a director of its holding company, or to enter into any guarantee or provide any security in connexion with a loan made to such a person as aforesaid by any other person:
Provided that nothing in this section shall apply either

(a) to anything done with the approval of the company in general meeting, where

LORD CHORLEY LORD CHORLEY moved to leave out sub-paragraph (a) and insert:

"(a) to anything done by a company which is for the time being an exempt private company; or

(b) subject to the next following subsection, to anything done to provide any such person as aforesaid with funds to meet expenditure incurred or to be incurred by him for the purposes of the company or for the purpose of enabling him properly to perform his duties as an officer of the company; or ".

The noble Lord said: Again we have two Amendments which go together, and with your Lordships' permission I would like to take them together. These Amendments have been framed in order to give effect to two undertakings which were given on the previous occasion. In the first place, an undertaking was given to put down an Amendment to express in

737
correct form an Amendment which the noble Lord, Lord Saltoun, moved to allow a loan to be made by the directors of a company to one of their members to be approved by the company in genera) meeting after the making of the loan. The other one was an undertaking given to the noble Lord, Lord Balfour of Inchrye, to put down an Amendment to exempt private companies from the clause. We have given the noble Lord, Lord Saltoun, a rather greater period than he asked for, and the Amendment allows the loan to be approved at the next annual, general meeting, so it will not be necessary to call a special meeting for the purpose of approving the loan. This I am sure he would say, if he were here, was an improvement on the Amendment which he himself moved. I beg to move.
Amendment moved—
Page 26, line 2, to leave out paragraph (a) and insert the said new paragraphs.—(Lord Charley.)
On Question, Amendment agreed to.
Amendment moved:
Page 26, line 16, at end insert—
"(2) Proviso (b) to the foregoing subsection shall not authorize the making of any loan, or the entering into any guarantee, or the provision of any security, except either—

(a) with the prior approval of the company given at a general meeting at which the purposes of the expenditure and the amount of the loan or the extent of the guarantee or security, as the case may be, are disclosed; or

(b) on condition that, if the approval of the company is not given as aforesaid at or before the next following annual general meeting, the loan shall be repaid or the liability under the guarantee or security shall be discharged, as the case may be, within six months from the conclusion of that meeting.

(3) Where the approval of the company is not given as required by any such condition the directors authorizing the making of the loan, or the entering into the guarantee, or the provision of the security, shall be jointly and severally liable to indemnify the company against any loss arising therefrom."—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 28, as amended, agreed to.
Clause 29, agreed to.
Clause 30 [Register of directors' shareholding, etc.)]:
4.48 p.m.
LORD CHORLEY LORD CHORLEY moved, after subsection (2) to insert:
738
"(3) Where a director is concerned only in a fiduciary capacity with any shares or debentures recorded in relation to him in the said register, that fact shall, if he so requires, be indicated in the register.
(4) The company shall not, by virtue of anything done for the purposes of this section, be affected with notice of, or put upon inquiry as to, the rights of any person in relation to any shares or debentures."
The noble Lord said: This Amendment has been framed in order to give effect to an undertaking which we gave to the noble Lord, Lord Rennell, to put down an Amendment to make it clear that directors who are merely concerned as trustees or in some other fiduciary capacity should be able to have words to that effect put against their names on the register of the directors' shareholdings. I beg to move.
Amendment moved—
Page 28, line 22, at end insert the said new subsections.—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: There are again two Amendments which go together. These Amendments give effect to our undertaking to put down an Amendment to express in correct form the Amendment moved by the noble Lord, Lord Rennell, with a view to securing that the register of directors' shareholdings should be open for inspection by the members of the company, not only for the period of fourteen days before the date of the annual general meeting, but also for a period of three days afterwards.
Amendment moved—
Page 28, line 30, leave out from beginning to ("it") in line 33 and insert ("(a) during the period beginning fourteen days before the date of the company's annual general meeting and ending three days after the date of its conclusion").—(Lord Charley.)
On Question, Amendment agreed to.
Amendment moved—
Page 28, line 38, at end insert—
"In computing the fourteen days and the three days mentioned in this subsection any day which is a Saturday or Sunday or a bank holiday shall be disregarded.")—(Lord Charley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is purely a drafting amendment.
Amendment moved—
Page 29, line 4, after ("subsection insert ("or (2)").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 30, as amended, agreed to.
Clause 31 [Particulars in accounts of directors' salaries, pensions, etc.]:
LORD CHORLEY: The next Amendment gives effect to an undertaking which we gave to look into the criticism which was made by the noble Lord, Lord Saltoun, that Clause 31 imposed a duty on the company, as opposed to the directors, to give information of sums received by a director from persons other than the company, and that the company will not be able to fulfil its obligations to disclose if the director does not give the company the necessary information. I was not quite convinced that there was this difficulty, but the position should be made quite clear, and we have, therefore, tabled this Amendment in order to safeguard the position. I beg to move.
Amendment moved—
Page 29, line 31, at end insert ("so far as the information is contained in the company's books and papers or the company has the right to obtain it from the persons concerned").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 31, as amended, agreed to.
Clause 32 [Particulars in accounts of loans to directors and officers]:
LORD CHORLEY: There are a number of small consequential Amendments following which, with your Lordships' permission, I should like to move together—one at Page 32, line 27, one at line 29 on the same page, one at line 3o and one at line 31. They are really all the same point; they are consequential on Clause 108 (4) which we have already looked at earlier this afternoon. I beg to move.
Amendments moved—
Page 32, line 27, leave out ("directors and");
Page 32, line 29, leave out ("a director or") and insert ("an");
Page 32, line 30, leave out ("a director or") and insert ("an");
Page 32, line 31, leave out ("a director or") and insert ("an").—(Lord Chorley.)
On Question, Amendments agreed to.
Clause 32, as amended, agreed to.
Clause 33 agreed to.
Clause 34 [General duty to make disclosure]:
LORD CHORLEY LORD CHORLEY moved, in subsection (I), after "has" to insert "at any time during the preceding five years." The noble Lord said: This Amendment gives effect to an undertaking given to the noble Marquess, Lord Reading, and
740
to the noble Lord, Lord Balfour of Inchrye, to limit the period from the date of retirement within which a past director is put under an obligation to give notice to the directors of the company of which he was formerly a director of such matters relating to himself as may be necessary for the purposes of the clauses relating to the disclosure of payments to and interest of directors. The noble Marquess, Lord Reading, moved an Amendment to limit the period to the preceding ten years and an assurance was given that an Amendment would be put down on Report to give effect to his suggestion, on the understanding, however, that the period would be less than ten years.
LORD RENNELL: The noble Marquess, Lord Reading, is very much obliged.
Amendment moved—
Page 34, line 6, after ("has") insert ("at any time during the preceding five years").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next Amendment is consequential on Clause 108 (4). I beg to move.
Amendment moved—
Page 34, line 17, after ("officers") insert ("other than directors").—(Lord Charley.)
On Question, Amendment agreed to.
Clause 34, as amended, agreed to.
Clause 35:
Inspection of company's affairs on application of members.
(4) If an inspector appointed under the said Section one hundred and thirty-five thinks it necessary for the purpose of his investigation that a person whom he has no power to examine on oath should be so examined, he may apply to the court and the court may if it sees fit order that person to attend and be examined on oath before it on any matter relevant to the investigation, and on any such examination—
(c) the person examined shall answer all such questions as the court may put or allow to be put to him, but may at his own cost employ a solicitor with or without counsel, who shall be at liberty to put to him such questions as he court may deem just for the purpose of enabling him to explain or qualify any answers given by him;
and notes of the examination shall be taken down in writing, and shall be read over to or by, and signed by, the person examined, and may thereafter be used in evidence against him.
(5) If an inspector appointed under the said Section one hundred and thirty-five to investi-

741
gate the affairs of a company thinks it necessary for that purpose to investigate 'also the affairs of any other body corporate which is the company's subsidiary or holding company or a subsidiary of its holding company or a holding company of its subsidiary, he shall have power so to do, and shall report on the affairs of the other body corporate so far is he thinks the results of his investigation thereof arc relevant to the investigation of the affairs of the first mentioned company.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (4), at the end to insert:
"Provided that, notwithstanding anything in paragraph (c) of this subsection, the court may allow the person examined such costs as in its discretion it may think fit, and any costs so allowed shall be paid as part of the expenses of the investigation."
The noble and learned Viscount said: This Amendment gives effect to a Government undertaking, given to the noble Lord, Lord Balfour of Inchrye, to put down an Amendment to provide that where an inspector appointed by the Board of Trade to investigate the affairs of a company applies to the Court for an examination before the Court of a person whom the inspector has no power to examine on oath, the Court may have discretion to order the costs incurred by the person examined to be borne by the Board of Trade. I beg to move.
Amendment moved—
Page 35, line 47, at end, insert the said proviso.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: With regard to the next Amendment, Clause 35 (5) gives an inspector appointed by the Board of Trade to investigate the affairs of a company power to investigate, if he thinks it necessary, the affairs of any other body corporate which is a member of the same group. This Amendment secures that this power shall extend to a company which has been, but is no longer, a member of the group. I beg to move.
Amendment moved—
Page 36, line 4, after ("is") insert ("or has at any relevant time been").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 35, as amended, agreed to.
Clauses 36 and 37 agreed to.
Clause 38 [Expenses of 'inspection of company's affairs]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (I), to insert:
742
"(2) The report of an inspector appointed otherwise than of the Board of Trade's own motion may, if he thinks fit, and shall, if the Board so direct, include a recommendation as to the directions (if any) which he thinks appropriate, in the Egli,: of his investigation, to be given under paragraph (c) of the last foregoing subsection."
The noble and learned Viscount said: This is my effort to meet the criticism that arose on the question of inserting the word "adversely". As your Lordships may remember, I promised to consider suggestions made by the noble Marquess, Lord Reading, and the noble Viscount, Lord Swinton, that we should try to introduce some safeguard against the possibility that the Board of Trade might try to recover the costs of an investigation from a company which had been within the purview of the investigations but which had. not been adversely referred to in the report of the inspector. I beg to move.
Amendment moved—
Page 39, line 3, at end, insert the said subsection,—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 38, as amended, agreed to.
Clause 39 [Appointment and powers of inspectors to investigate ownership of company]:
THE LORD CHANCELLOR: The next Amendment leaves out subsections (5) to (11) of Clause 39, in order to reinsert them after subsection (12) as two separate clauses which we will come to in a moment. I beg to move.
Amendment moved—
Page 40, line 30, leave out from the beginning to the end of line 17 on page 42.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 39, as amended, agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 39 to insert the following new clause:
Power to require information as to persons interested in shares or debentures.
".—(1) Where it appears to the Board of Trade that there is good reason to investigate the ownership of any shares in or debentures of a company and that it is unnecessary to appoint an inspector for the purpose, they may require any person whom they have reasonable cause to believe—

(a) to be or to have been interested in those shares or debentures; or

(b) to act or to have acted in relation to those shares or debentures on behalf of someone interested therein;

743
to give them any information which he has or can reasonably be expected to obtain as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who act or have acted on their behalf in relation to the shares or debentures.
(2) For the purposes of this section, a person shall be deemed to have an interest in a share or debenture if he has any right to acquire or dispose of the share or debenture or any interest therein or to vote in respect thereof, or if his consent is necessary for the exercise of any of the rights of other persons interested therein, or if other persons interested therein can be required or are accustomed to exercise their rights in accordance with his instructions
(3) Any person who fails to give any information required of him under this section, or who in giving any such information makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material particular, shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both."
The noble and learned Viscount said: We now come to two new clauses. I hope they are quite clear to your Lordships. I believe they are. The object is to put into different, and plainer, language the provisions previously in Clause 39, which we have now deleted. The only thing I need observe, if 1 may take them together for the moment, is that subsection (3) of the second new clause is new. It provides for an appeal to the Court against an order of the Board of Trade restricting the transfer and exercise of voting rights in respect of any shares or debentures. I am not sure that any of your Lordships pressed me with regard to this, so I shall account this little bit of righteousness unto myself. I beg to move.
Amendment moved—
After Clause 39 insert the said new clause.—(The Lord Chancellor.)
LORD BALFOUR OF INCHRYE: We are very grateful to the noble and learned Viscount, the Lord Chancellor, for putting these clauses in plainer language. There are only two points I should like to mention. In the first line of the first new clause it says: "Where it appears to the Board of Trade that there is good reason to investigate …" Would it not be more appropriate to put in these words: "Where the Board of Trade consider it in the public interest", because "good reason" is very indefinite? It does seem to me that a purpose which would cause the Board of Trade to conduct an investi-
744
gation is the public interest. Perhaps the noble and learned Viscount would consider that point. The other remark I would like to make is as regards the stopper on share dealings. We think it is absolutely right to have this inserted, although we are grateful that provision is made for appeal to the Court in the case where a person affected considers himself aggrieved.
THE LORD CHANCELLOR: Your Lordships will remember that we all agreed when we gave up the clauses about nominees that we should give a very wide power to the Board of Trade in regard to inspection or investigation. I do not like the phrase "in the public interest," for this reason. It might be simply a case of a majority oppressing some individual, and if the Board of Trade thought there was such a case they should have the right to investigate. There is no public interest, of course, save this: that it is always the public interest that no individual should be oppressed. I want to use the widest possible words I can here, and that is why I selected these words.
LORD BALFOUR OF INCHRYE: The noble and learned Viscount has given us so much in other directions that I will not press it.
On Question, Amendment agreed to.
5.10 p.m.
THE LORD CHAIRMAN OF COMMITTEES: The next new clause has already been referred to.
Amendment moved—
After Clause 39 insert the following new clause:
Power to impose restrictions on shares or debentures.
".—(I) Where in connexion with an investigation under either of the two last foregoing sections it appears to the Board of Trade that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), and that the difficulty is due wholly or mainly to the unwillingness of the persons concerned to assist the investigation as required by this Act, the Board may by order direct that the shares shall until further order be subject to the restrictions imposed by this section.
(2) So long as any shares are directed to be subject to the restrictions imposed by this section—

(a) any transfer of those shares, or in the case of unissued shares any transfer of the right to be issued therewith and any issue thereof, shall be void;

745

(b) no voting rights shall be exercisable in respect of those shares;

(c) no further shares shall be issued in right of those shares or in pursuance of any offer made to the holder thereof;

(d) except in a liquidation, no payment shall be made of any sums due from the company on those shares, whether in respect of capital or dividends.

(3) Where the Board of Trade make an order directing that shares shall be subject to the said restrictions, or refuse to make an order directing that shares shall cease to be subject thereto, any person aggrieved thereby may apply to the court, and the court may, if it sees fit, direct that the shares shall cease to be subject to the said restrictions.
(4) Any order (whether of the Board of Trade or of the court) directing that shares shall cease to be subject to the said restrictions which is expressed to be made with a view to permitting a transfer of those shares may continue the restrictions mentioned in paragraphs (c) and (d) of subsection (2) of this section, either in whole or in part, so far as they relate to any right acquired or offer made before the transfer.
(5) Any person who—

(a) exercises or purports to exercise any right to dispose of any shares which, to his knowledge, are for the time being subject to the said restrictions or of any right to be issued with any such shares; or

(b) votes in respect of any such shares, whether as holder or proxy, or appoints a proxy to vote in respect thereof; or

(c) being the holder of any such shares, fails to notify of their being subject to the said restrictions any person whom he does not knew to be aware of that fact but does know to he entitled, apart from the said restrictions, to vote in respect of those shares whether as holder or proxy;

shall be liable to imprisonment for a term not exceeding six months or to a fine not exceeding five hundred pounds or to both.
(6) Where shares in any company are issued in contravention of the said restrictions, the company and every officer of the company who is in default shall be liable to a fine not exceeding five hundred pounds.
(7) A prosecution shall not be instituted in England under this section except by or with the consent of the Board of Trade.
(8) This section shall apply in relation to debentures as it applies in relation to shares.") —(The Lord Chancellor).
On Question, Amendment agreed to.
Clause 40 [Saving for solicitors and bankers]:
THE LORD CHANCELLOR: This Amendment gives effect to an undertaking which I have previously given. The solicitor will now have to reveal only the name and address of his client.
Amendment moved—
Page 42, line 26, leave out ("and any person for whom his client acts or has acted").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 40, as amended, agreed to,
Clause 41 [Power to keep register where made up]:
THE LORD CHANCELLOR: This and the next Amendment really go together. The Amendments give effect to a Government undertaking which I gave to the noble Viscount, Lord Bridgeman to put down an Amendment to provide that the register of members may he kept at the office of the company, or of its agent, at which the work of compiling the register is done. I beg to move.
Amendment moved—
Page 42, line 32, at beginning insert—("A company's register of members may be kept at any office of the company where the work of making it up is done, instead of at the company's registered office, and").—(The Lord Chancellor.)
LORD BALFOUR OF INCHRYE: With the permission of your Lordships I will deal in my remarks with these two Amendments and the Amendment in my name, which really cover the same point. It has been represented to us that the Amendment of the noble and learned Viscount does not meet the case for Scottish accountants and others, who are anxious that the register should be able to be kept in England, where a. majority of the shareholders in a Scottish company might live. Indeed, in an earlier Amendment this afternoon, the noble and learned Viscount, the Lord Chancellor, was postulating that particular possibility. I hope the noble and learned Viscount will be able to say whether my point is a good one, and, if so, if he could reconsider the matter. My Amendment stipulates that the location of the register shall be recorded in the annual return, which I think must meet the point that the register must be kept by responsible people in a responsible place.
THE LORD CHANCELLOR: I confess, as a mere Sassenach, that I think the noble Lord's Amendment is not unreasonable, and I have therefore approached my friends in the Scottish Office. Your Lordships know what these Scotsmen can do when they get together. The noble Lord no doubt remembers it very well in regard

747
to a certain airfield. I am told that Scotland will not have this at any price. I am sorry about it, but whatever we may think, the Scottish Office are quite insistent that if the company is registered in Scotland that is the place where its register and documents must be kept. It is no good saying that you may come and transfer yourself to England, merely because there are a majority of your shareholders in England. I sympathize with the noble Lord, but I cannot promise to accept his Amendment. Indeed, it is odd, as he is a Scot himself, that he should be the one to put forward such a shocking proposal.
LORD RENNELL: The noble and learned Viscount has no doubt represented that this was a view expressed by certain members of that community in cases where a company was largely owned in England, and where most of the share transfers did take place in England. May I ask the noble and learned Viscount if that was represented to his colleagues in the Scottish Office, and that nevertheless this view was held?
THE LORD CHANCELLOR: It certainly was, and I was lucky to leave the Scottish Office alive !
LORD HAWKE: Could the noble and learned Viscount tell us whether the arguments of the Scottish Office are based on the fact that they wish to impose patriotism on the Scots, or whether they do not wish an English company to be allowed to keep its register in Edinburgh, for instance?
THE LORD CHANCELLOR: They assume the principle that Scots have the patriotism without it being pressed upon them,
VISCOUNT ELIBANK: May I, on behalf of Scotland, thank the noble and learned Viscount for having resisted this Amendment and not given way?
LORD BALFOUR OF INCHRYE: Lest I may be thought a renegade Scot, let me clear my position. I put this Amendment forward on strong representations by Scottish accountants who are noted for accuracy and integrity, and who are employed by many English companies, to the advantage of those English companies. However, if the Scottish Office in London (I assume that it was the London Branch of the Scottish Office)
748
cannot agree, I do not feel disposed to press the matter.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I have already dealt with the next Amendment. I beg to move.
Amendment moved—
Page 42, line 36, leave out ("the company's registered office") and insert ("an office of the company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 41, as amended, agreed to.
Clauses 42 to 44, agreed to.
Clause 45 [Inclusion in annual return of accounts of private companies]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved in subsection (2) to leave out paragraph (a) and insert:
"(a) that the conditions contained in the Third Schedule to this Act are satisfied as to the persons interested in the company's shares and debentures; and".
The noble and learned Viscount said: The effect of this Amendment is to transfer to the Third Schedule the bulk of the conditions which a private company has to satisfy in order to qualify as an exempt private company; that is to say, a company which has not to file its accounts. It was necessary to do this because I gave several undertakings on this clause. I gave an undertaking to the noble Viscount, Lord Swinton, to put down an Amendment to provide that a company should not be disqualified from being an exempt company merely because some of its shares are held by another exempt company, provided, however, that the total number of shareholders in the exempt company does not exceed fifty. I gave an undertaking to the noble Viscount, Lord Bridgeman, to put down an Amendment to provide that a company should not be disqualified from being an exempt company merely because shares have been acquired in it, not necessarily on its formation, by a banking or finance company, provided that no more than 20 per cent, in the aggregate of the voting power is exercisable by banking or finance companies. When I came, to try to redraft an already complicated clause to give effect to these Amendments, I came to the conclusion that the only thing to do was to put them in a Schedule. That is the explanation of this Amendment. I beg to move.
Amendment moved—
Page 45, line 34, leave out paragraph (a) and insert the said new paragraph.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, to leave out subsections (3) to (5). The noble and learned Viscount said: This is the same point; it is all part of the striking out. Your Lordships must not, however, imagine that you will not get it all again in the new Schedule because I am afraid you will.
Amendment moved—
Page 46, line 1, leave out from beginning to end of line 41 on page 47.—(The Lord Chancellor.)
LORD COZENS-HARDY: I should have made my remarks on the previous Amendment but, with the leave of the House, I should like to thank the noble and learned Viscount for the Amendment to Clause 45 and for the new Schedule. The position is now much clearer and much improved, but there is still one point to which I think the noble and learned Viscount might direct his attention before the next stage. If a shareholder in an exempt private company wants to benefit the company's employees by settling some of his shares on some form of employees' benefit trust fund, he cannot carry out that generous intention without making the company a nonexempt private company, because the trustees of the fund could not comply with the second basic condition. Similarly, if a private company to-day has trustees of a benevolent fund as shareholders it is, by that fact, prevented from becoming an exempt private company under the Bill, even though it may comply with all the other stringent conditions which are necessary for exemption. I hardly think that the noble and learned Viscount wishes to discourage schemes for giving employees an interest in their employer's success, and I hope, between now and the next stage, he will consider whether it would not be right and proper to make an exception from the second basic condition in favour of shares settled on trustees for the benefit of employees, past or present, and their families.
THE LORD CHANCELLOR: Perhaps we might have a discussion on this when we get to the new Schedule. If that is convenient to the noble Lord, I think that
750
would be the convenient time at which to discuss it.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a mere drafting Amendment. I beg to move.
Amendment moved—
Page 47, line 42, leave out ("an exempt company as defined in this section") and insert ("an exempt private company.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 45, as amended, agreed to.
Clauses 46 to 50 agreed to.
Clause 51:
Allotment of shares and debentures to be dealt in on stock exchange.
51.—(I) Where a prospectus, whether issued generally or not, states that application has been or will be made for permission for the shares or debentures offered thereby to be dealt in on any stock exchange, any allotment made on an application in pursuance of the prospectus shall, whenever made, be void if the permission has riot been applied for before the third day after the first issue of the prospectus or if the permission has been refused before the expiration of three weeks from the date of the closing of the subscription lists.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of subsection (I) to insert:
"or such longer period not exceeding six weeks as may, within the said three weeks, be notified to the applicant by or on behalf of the stock exchange."
The noble and learned Viscount said: This Amendment is intended to make more effective Clause 51, which provides that where a prospectus states that application has been or will be made to a stock exchange for permission to deal in the shares offered, if permission is refused within three weeks from the date of the closing of the subscription list, the money subscribed shall be returned to the subscribers. That is insufficiently elastic in just those cases where it is essential to get more information which would not be forthcoming in the limited period of three weeks. So the stock exchange is allowed, under this Amendment, to extend the period not beyond six weeks from the closing of the subscription list. That is important. I think the stock exchange, before they decide to act, should be given reasonable time to make such inquiries and investigations as they desire. I beg to move.
Amendment moved—
Page 50, line 38, at end insert the said words.—(The Lord Chancellor.)
LORD RENNELL: I think this is a great improvement on subsection (I) of Clause 51. There is one very small point in the proposed Amendment to which I would like to draw the attention of the noble and learned Viscount. When I first read it, I was not absolutely clear about what was meant and I had to read it a second time. I do not know whether my suggestion makes as good English as the Amendment as at present drafted, but I suggest that instead of saying "or such longer period not exceeding six weeks as may, within the said three weeks, be notified …", we should say "or such longer period not exceeding six weeks as may be notified, within the said three weeks, to the applicant by or on behalf of the stock exchange."
THE LORD CHANCELLOR: I will certainly look at that.
On Question, Amendment agreed to.
Clause 51, as amended, agreed to.
Clause 52 [Facts to be stated in prospectus to which Section 35 of principal Act applies]:
THE LORD CHANCELLOR THE LORD CHANCELLOR had given notice that he would move, at the end of subsection (I), to insert:
"(2) The said paragraph 8 shall not apply to any property if

(a) the contract for its purchase or acquisition was entered into in the ordinary course of the company's business; or

(b) the amount of the purchase money is not material;

and in paragraph 9 of Part I of the said Fourth Schedule the expression 'any such property as aforesaid' shall be construed accordingly."
The noble and learned Viscount said: This Amendment gives effect to a Government undertaking, which I gave to the noble Marquess Lord Reading, to put down an Amendment to secure that small routine contracts shall not be required, by paragraph 8 of Part I of the Fourth Schedule, to be disclosed in a prospectus. When I came to look at the clause as we have it here, I was not happy about it. I was not happy about it for this reason. It seems to me that what we want here to eliminate altogether are small routine contracts, made in the ordinary course
752
of business, which really have no relevance whatever to the particular matter of disclosure we are here discussing. Accordingly, I beg to move the Amendment in an amended form.
Your Lordships will see that this differs from the Amendment on the Paper by the insertion of the words "the contract not being made in contemplation of the issue nor the issue in consequence of the contract." If we do not include those words, I am afraid the clause will be too widely drawn, and will enable a coach and four to be driven through the very wholesome doctrine of disclosure. With your Lordships' permission, I beg to move the Amendment in that form.
Amendment moved—
Page 53, line it, at end insert:
("(2) The said paragraph 8 shall not apply to any property—

(a) if the contract for its purchase or acquisition was entered into in the ordinary course of the company's business, the contract not being made in contemplation of the issue nor the issue in consequence of the contract; or

(b) if the amount of the purchase money is not material;

and in paragraph 9 of Part I of the said Fourth Schedule the expression 'any such property as aforesaid' shall be construed accordingly.")—(The Lord Chancellor.)
LORD RENNELL: The noble Marquess, Lord Reading, moved an Amendment in this sense during my unavoidable absence. It was an Amendment which stood in my name. I think the Amendment as now moved by the noble and learned Viscount, the Lord Chancellor, entirely meets the point which I had in mind, which was not, as a matter of fact, confined to small contracts or to contracts which were not material. It related to a difficulty which had arisen over paragraph 8 of the Fourth Schedule of the principal Act. I entirely agree that the Amendment in the Marshalled List was far too wide, but the Amendment now proposed entirely meets the point, and makes it perfectly clear that what are required to 'be disclosed in the prospectus are all those contracts which would affect a subscriber to, or a purchaser of, the shares or debentures mentioned in the prospectus, and does not require disclosure of contracts which the company has in the ordinary course of business, which it might be injurious to disclose

753
to its competitors and which would in no way affect securities offered for sale.
On Question, Amendment agreed to.
Clause 52, as amended, agreed to.
Clause 53 agreed to.
Clause 54 [Issue and registration of prospectus]:
LORD CHORLEY: Before we come to the next Amendment I would like to remind your Lordships that when we were discussing subsection (I) of this clause the noble Lord, Lord Saltoun, raised a point as to the penalization of a company which had just been formed. He said that if it were penalized at that stage it might be very unfortunate from the point of view of the subscribers. I promised to look at the matter with a view to seeing whether anything could be done to meet that point. I would remind him that this matter is entirely within the discretion of the Court which deals with it, and obviously the fact that the company had only just been formed would be a very material matter to be taken into consideration, and would undoubtedly have due weight given to it in deciding on the amount. This is not on an Amendment, bat on a matter which was raised by the noble Lord, Lord Saltoun. There is nothing on the Amendment Paper about it but I wanted to explain to him that we have in fact looked into the matter.
The Amendment I have to move is, after subsection (4), to insert:
"(3) Where any such contract as is mentioned in the last foregoing subsection is wholly or partly in a foreign language, the reference in that subsection to 'a copy of the contract shall be taken as a reference to a copy of a translation thereof in English or a copy embodying a translation in English of the parts in a foreign language, as the case may be, being a translation certified in the prescribed manner to be a correct translation."
This Amendment deals with the question which may arise on a material contract which has to be disclosed, but which is in a foreign language. The Amendment is intended to enable that contract to be translated and the translation filed in its place. There is a precedent for this in Section 110 to (3) of the principal Act. I beg to move.
Amendment moved—
Page 56, line 6, at end insert the said subsection.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 54, as amended, agreed to.
LORD CHORLEY LORD CHORLEY moved, after Clause 54, to insert the following new clause:
"Exclusion of s.35 and relaxation of Fourth Schedule in case of certain prospectuses.
—(I) Section thirty-five of the principal Act shall not apply to the issue of a prospectus or form of application relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being dealt in or quoted on a prescribed stock exchange.
(2) Where—

(a) it is proposed to offer any shares in or debentures of a company to the public by a prospectus issued generally; and

(b) application is made to a prescribed stock exchange for permission for those shares or debentures to be dealt in or quoted on that stock exchange;

there may on the request of the applicant he given. by or on behalf of that stock exchange a certificate of exemption, that is to say, a certificate that, having regard to the proposals (as stated in the request) as to the size and other circumstances of the issue of shares or debentures and as to any limitations on the number and class of persons to whom the offer is to be made, compliance with the requirements of the Fourth Schedule to the principal Act would be unduly burdensome.
(3) If a certificate of exemption is given, and if the proposals aforesaid are adhered to and the particulars and information required to be published in connexion with the application for permission made to the stock exchange are so published, then—

(a) a prospectus giving the particulars and information aforesaid in the form in which they are so required to he published shall be deemed to comply with the requirements of the Fourth Schedule to the principal Act; and

(b) section thirty-five of the principal Act shall not apply to any issue, after the permission applied or is granted, of a prospectus or form of application relating to the shares or debentures;

and the section of this Act relating to applications for and allotment of shares and debentures in pursuance of a prospectus issued generally shall not apply in relation to a prospectus to which either paragraph of this subsection applies.
(4) Where a (prospectus is deemed by virtue of a certificate of exemption to comply with the said requirements, the provisions of this Act relating to the registration and (inspection of a copy or (memorandum of any contract required by the Fourth Schedule to the principal Act to be stared in the prospectus shall apply in relation to any contract which, or a copy or memorandum of which, is required to be available for inspection in connexion with the application for permission made to the stock exchange.
References in this subsection to a copy of a contract include references to a copy of a translation thereof or a copy embodying a translation of parts thereof."
The noble Lord said: This is a new clause which has been drafted in order to deal with the problem of placings. This question of placings, of course, has given rise to considerable difficulty, and there have been a number of abuses which have often been commented upon in financial journals and elsewhere.
The main abuse in connexion with placings has arisen because of the impossibility of defining legally where the public begins and ends, and whether or not clients of the firm dealing with the matter are members of the public. Clause 58 implies that members or debenture holders of a company, or clients of the person issuing the prospectus, may be members of the public. That is a useful provision and will prevent a good deal of the abuse. On the other hand, it may make the existing provisions unduly restricted and expensive for those placings which are perfectly bona fide, and which should not be held up or impeded. Therefore, I hope we have evolved a rather useful method of dealing with the matter by bringing in the stock exchange. In these cases there is nearly always an application to a prescribed stock exchange for permission to deal or for a quotation. Before giving such a permission or allowing shares to be quoted, of course, the stock exchange imposes rather stringent conditions which, although not so costly to comply with as the strict provisions of the Companies Act relating to prospectuses, are nevertheless perfectly adequate. This clause, therefore, has been framed to bring in the stock exchange. The effect of it is to allow this stock exchange arrangement as an alternative to full compliance with the prospectus requirements. I hope your Lordships will agree that this is a happy solution. I beg to move.
Amendment moved—
After Clause 54 insert the said new clause.—(Lord Chorley.)
VISCOUNT SWINTON: I do not want to go into the details of this clause. I agree with the noble Lord that it is both convenient and practicable. I think it gives the right kind of safeguard and, at the same time, affords reasonable facilities. There is only one point upon which I would like confirmation. Your Lordships will remember that on the previous stage of the Bill either the noble Lord, Lord Rennell, or myself—I forget
756
who it was—moved an Amendment to make clear that offers of shares to existing shareholders were authorized, and also an offer to an individual, or an individual institution, who intended to retain the shares and not to place them. The noble Lord, Lord Chorley, said last time that he accepted my view on both those cases, and he thought it was covered by the existing law that they were free (if I may so put it) and that it was therefore unnecessary to put in any special provisions here. I feel sure that the existing law already covers this, and that both those cases are met and do not require anything in the nature of a prospectus.
THE LORD CHANCELLOR: May I just say this? So far as existing members are concerned, of course, the existing law does not hit them at all. So far as the other point is concerned in Clause 58, page 59, line 34, we have an Amendment on the Marshalled List.
VISCOUNT SWINTON: I am much obliged to the noble and learned Viscount.
On Question, Amendment agreed to.
Clauses 55 and 56 agreed to.
Clause 57 [Statements in lieu of prospectus]:
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 59, line 20, at end insert—
("(5) Subsection (2) of the said Section twenty-seven and subsection (3) of the said Section forty (which penalize contraventions of those sections) shall apply in relation to subsections (I) and (2) of this section as they apply in relation to the provisions respectively mentioned therein.")—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 57, as amended, agreed to.
Clause 58 [Interpretation of provisions relating to prospectuses, etc.]:
LORD CHORLEY: This next Amendment is the one to which my noble and learned friend referred. It meets the point which was made by the noble Lord, Lord Rennell, under which the professional investor is provided for. I beg to move.
Amendment moved—
Page 59, line 34, at end insert—
("Provided that the said references shall not include any offer or invitation limited to persons carrying on a business which involves the acquisition and holding of investments, where the offer or invitation is intended to be

757
accepted by them on their own behalf for the purposes of that business, and not as agents or with a view to the sale by them of the shares or debentures or the right thereto.")—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 60, line 9, at end insert ("or statement in lieu of prospectus").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 58, as amended, agreed to.
LORD CHORLEY LORD CHORLEY moved, after Clause 58 to insert the following clause:
"Certification of transfers.
—.(I) The certification by a company of any instrument of transfer of shares in or debentures of the company shall be taken as a representation by the company to any person acting on the faith of the certification that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title to the shares or debentures.
(2) Where any person acts on the faith of a false certification by a company made negligently, the company shall be under the same liability to him as if the certification had been made fraudulently.
(3) For the purposes of this section—

(a) an instrument of transfer shall be deemed to be certificated if it hears the words 'certificate lodged' or words to the like effect;

(b) the certification of an instrument of transfer shall be deemed to be made by a company if-

(i) the person issuing the instrument is a person authorized to issue certified instruments of transfer on the company's behalf; and

(ii) the certification is signed by a person authorized to certificate transfers on the company's behalf or by any officer or servant either of the company or of a body corporate so authorized;

(c) a certification shall be deemed to be signed by any person if—

(i) it purports to be authenticated by his signature or initials (whether handwritten or not); and

(ii) it is not shown that the signature or initials was or were placed there neither by himself nor by any person authorized to use the signature or initials for the purpose of certificating transfers on the company's behalf."

The noble Lord said: This is a new clause which has been drafted in order to give effect to the recommendation which was made by the Cohen Committee and
758
which was not carried out in the Bill as originally drafted. The recommendation is contained. in paragraph 139 of the Cohen Report. The effect of the new clause is to clarify the position in connexion with the transfers of a company. Difficulty has arisen and there have been quite a number of cases before the Courts where a shareholding is split up and a transfer is lodged. The action of the responsible official, the registrar of the company, may give rise to estoppels and this might give rise to the question as to whether there had been negligence. The company will not be held by the certification of the instrument of transfer to warrant the genuineness of the documents submitted to it, but if there is fraud or negligence on the part of a duly authorized officer of the company, the person who suffers as a result will have a remedy.
Amendment moved—
After Clause 58 insert the said new clause. —[Lord Chorley.)
On Question, Amendment agreed to.
Clause 59 [Redeemable preference shares]:
LORD RENNELL: I raised on Second Reading and on Committee stage a question in relation to shares which it was not possible to meet by an Amendment. That is the question about what happens to redeemable preference shares which cannot be redeemed when the time comes. I did not feel capable of putting down an Amendment myself, as it seemed it could have been done better by the noble and learned Viscount, with his advisers. Provision was made under the 1929 Act, but the subject is very obscure and no indication has yet been given before a Court as to the position of shareholders who hold redeemable preference shares which are to be redeemed at a certain date and after that date has arrived the company finds itself neither in a position to redeem the shares out of funds, nor to make an issue out of which to redeem the shares. I submit that this is a gap in the 1929 Act which might have properly been filled in the present Bill, and I must regret it has not been found possible to make provision for it.
LORD CHORLEY: That is one of three points raised—two of them by the noble Lord who has just sat down—in regard to the question of redeemable preference phases. The matter has been gone into

759
in the interval since he made his point. There are very considerable difficulties in the way of the suggestion which he made, and on the whole it seems much better to leave the matter to the parties to the contract. There arc parties to the contract, and if circumstances are such that it is difficult to fulfil the contract it is a matter for negotiation between the parties.
LORD RENNELL: I am not sure, in this case, who the parties are. The shareholder is part-proprietor of the company, and he paid for his shares on the basis that at a certain date he would receive his capital back; but I do not know who the other party to the contract is.
LORD CHORLEY: The contract is between him and the company.
LORD RENNELL: He is part-owner of the company.
LORD CHORLEY: It is in the nature of a contract. I think the substance of what I said holds good, and it is a matter of arrangement between those who represent the company as such and the shareholders who hold this particular type of share.
VISCOUNT ELIBANK: May I ask the noble Lord, Lord Rennell, what his suggestion is for meeting this point?
LORD RENNELL: I did not make any suggestion, but certain suggestions have been made to me that when the time comes and the period has expired the directors of companies and holders of ordinary shares of the company should not be allowed to take a dividend until the redeemable preference shares have been redeemed. If any one is a holder of redeemable preference shares on the date for redemption, and wishes to make application to a Court to enforce his right, against whom is he to make his application?
THE LORD CHANCELLOR: May I make a suggestion? We must leave something for other people to do, if only to earn their salaries. We have had a great many things to consider and I have not yet been able to give to this point the mature consideration which I would have liked. But when this Bill passes from your Lordships' House and is sent to another place, I, and those who advise me, will continue to exercise our ingenuity upon it.
VISCOUNT SWINTON: I do not want by passing it in silence to let it be supposed that I accept the suggestion that Lord Rennell has thrown out, that if there is a failure to redeem preference shares, ordinary shareholders should be penalized and get nothing until sufficient is put aside to redeem the preference shares. I am not sure that that would be a good arrangement.
LORD RENNELL: I said it was a suggestion made to me. I did not put it forward as a solution myself.
VISCOUNT SWINTON: Then I hope we need not consider it unduly. I am inclined to agree with the noble Lord, Lord Chorley, that the matter should be left for arrangement between the parties, whoever they may be. I do not think it would be right to lay down a hard and fast rule in the present case.
Clause 59 agreed to.
Clause 60:
Application of premiums received on issue of shares.
(3) The share premium account may, notwithstanding anything in subsection (I) of this section, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.
LORD CHORLEY LORD CHORLEY moved, at the end of subsection (3), to insert:
"in writing off—

(a) the preliminary expenses of the company;

(b) the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;

or in providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the company.
(4) Accordingly in proviso (d) to subsection (I) of Section forty-six of the principal Act (which requires the premium, if any, payable on redemption of redeemable preference shares to be provided for out of the profits of the company) after the words 'the profits of the company' there shall be inserted the words 'or out of the company's share premium account'."
The noble Lord said: This Amendment gives effect to an undertaking which we gave as a result of an Amendment which was put down in the name of the noble Viscount, Lord Elibank, who wished to allow initial expenses to be paid out of share premiums. We agreed with him in principle, and we agreed to look into

761
the best way of effecting it. We put down this Amendment, and it covers rather a wider field than he himself originally suggested when he moved the Amendment, because it provides, in addition to paying for preliminary expenses, that share premiums should be allowed to be used to pay the premium on redeemable shares or debentures or used to write off expenses of or discount allowed on any issue of shares or debentures of the company.
Amendment moved—
Page 61, line 19, at end insert the said words.—(Lord Chorley.)
VISCOUNT ELIBANK: I wish to thank the noble Lord for going so carefully into the matter, and for explaining it in a way which has been of great help and value.
On Question, Amendment agreed to.
Clause 60, as amended, agreed to.
Clauses 61 and 62 agreed to.
Clause 63:
Liability of trustees for debenture holders.
63.—(I) Subject to the following provisions of this section, any provision contained in a trust deed for securing an issue of debentures, or in any contract with -the holders of debentures secured by a trust deed, shall he void in so far as it would have the effect—
(b) absolving him, otherwise than by entitling him to rely on opinions formed or information supplied by others, from showing the degree of care and diligence ordinarily required of a trustee in discharging his functions according to the terms of his trust.
(3) Subsection (I) of this section shall not operate—
(a) to invalidate any provision in force at the corning into force of this section so long as any person then entitled to the benefit of that provision remains a trustee of the deed in question; or
LORD CHORLEY LORD CHORLEY moved in subsection (I) to leave out paragraph (b) and insert "conferring on him any powers, authorities, or discretions". The noble Lord said: Before I move this Amendment; there are two points which were raised on the question of redeemable and irredeemable preference shares, to which I might perhaps refer very shortly. The noble Lord, Lord Rennel, suggested, and he received very substantial support from, I think, the noble Lord, Lord Simonds, and from the noble Viscount, Lord Maugham, that there should be a pro—vision to enable a company to convert irredeemable preference shares into re
762
deemable preference shares. I promised that that would be looked into, and we have in fact, looked into it. I am advised that the best way of dealing with this matter is to have recourse to the machinery provided in Section 153 of the Companies Act of 1929 for arrangements and reconstruction. That is not a very expensive type of procedure, and it is suggested that if this position is reached there should be recourse to it and a reconstruction carried through. The other point was raised by the noble Lord, Lord Latham, who suggested that where redeemable preference shares had been issued for the purpose of raising money in order to acquire a particular asset which was subsequently sold, the proceeds of the sale of that asset might then be used for the purpose of redeeming those shares. I agreed that that should be looked at, and I am advised that the proper course for dealing with the situation is for the company to reduce its share capital, which is a well known procedure and is provided for by Section 55 of the Companies Act.
Turning to the Amendment which stands in the name of my noble and learned friend, I may say that it has been framed in order to give effect to an undertaking which we gave to consider further the wording of Clause 63. The effect of the Amendment is to allow the trustee for debenture holders the benefit of the provisions in the trust deed which the Cohen Committee considered should be allowed to him. I beg to move.
Amendment moved—
Page 62, line 20, leave out from ("deed") to end of line 26 and insert ("conferring on him any powers, authorities, or discretions").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, in subsection 3 (a), after "provision" where that word occurs the last time, to insert "or afterwards given the benefit thereof under the next following subsection." The noble Lord said: This Amendment gives effect to a Government undertaking, which we gave, to put into correct form an Amendment which was put down by the noble Viscount, Lord Swinton, to secure that, in the case of any trust deed in operation at the date of coming into force of the clause, the debenture holders may, by extraordinary resolution, extend to a new trustee, either in whole or in part, the benefit of the indemnity provisions contained in the trust deed. I beg to move.
Amendment moved—
Page 62, line 42, after ("provision") insert ("or afterwards given the benefit thereof under the next following subsection").—(Lord Chorley.)
VISCOUNT SWINTON: I am much obliged; I think these words are much better than mine.
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved, at the end of subsection (3) (b), to insert:
"(4) While any trustee of a trust deed remains entitled to the benefit of a provision saved by the last foregoing subsection, the benefit of that provision may be given either—

(a) to all trustees of the deed, present and future; or

(b) to any named trustees or proposed trustees thereof;

by a resolution passed by a majority of not less than three-fourths in value of the debenture holders present in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose in accordance with the provisions of the deed or, if the deed makes no provision for summoning meetings, a meeting summoned for the purpose in any manner approved by the court."
The noble Lord said: This Amendment goes with the one to line 42, and it is covered by what I have already said. I beg to move.
Amendment moved—
Page 62, line 47, at end, insert the said new subsection.—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 63, as amended, agreed to.
Clause 64 [Alteration of company's objects]:
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 63, line 4, after ("resolution") insert ("under section five of the principal Act").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is another drafting Amendment.
Amendment moved—
Page 63, line 15, after the first ("capital") insert ("or any class thereof").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 64, as amended, agreed to.
Clauses 65 and 66, agreed to.
Clause 67:
Membership of holding company.
(2) Nothing in this section shall apply where the subsidiary is concerned as personal representative, or where it is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust.
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 65, line 43, leave out ("or a nominee for its subsidiary").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY LORD CHORLEY moved at the end of subsection (2) to insert "and is not so interested only by way of security for money lent in the ordinary course of its business." The noble Lord said: This is an Amendment which has been framed to deal with a situation of the following kind. A bank nominee company which is a subsidiary of a banking company may hold shares in the banking company which have been mortgaged to the banking company as security for the overdraft of a customer. But for the Amendment, this very common and quite harmless practice would be prevented by the provisions of the clause restricting the holding of shares in a holding company by its subsidiary. I beg to move.
Amendment moved—
Page 66, line 4, at end insert ("and is not so interested only by way of security for money lent in the ordinary course of its business").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 66, line so, at end, insert ("(4) Subject to subsection (2) of this section, subsections (I) and (3) thereof shall apply in relation to a nominee for a body corporate which is a subsidiary, as if references in the said subsections (I) and (3) to such a body corporate included references to a nominee for it").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next two Amendments are both drafting Amendments of the same kind, and I beg to move them together.
Amendments moved—
Page 66, line 12, leave out ("references") and insert ("the reference").
Page 66, line 14, leave out ("references") and insert ("a reference").—(Lord Chorley.)
On Question, Amendments agreed to.
Clause 67, as amended, agreed to.
Clause 68 agreed to.
Clause 69 [Documents of and relating to Scottish companies]:
LORD CHORLEY LORD CHORLEY moved in subsection (I), after "secretary". where that word occurs a first time, to insert "for the words 'in Scotland' there shall be substituted the words according to the law of Scotland', and". The noble Lord said: This Amendment makes a small drafting alteration in Section 29 (4) of the Act of 1929. It deals with the case where a deed to which a company is party and to which Scottish law applies is executed on behalf of the company outside Scotland. I beg to move.
Amendment moved—
Page 67, line 21, after the first ("secretary") insert ("for the words 'in Scotland' there shall be substituted the words 'according to the law of Scotland,' and").—(Lord Chorley.)
On Question, Amendment agreed to.
Clause 69, as amended, agreed to.
Clauses 70 and 71 agreed to.
Clause 72 [Special provisions as to statement submitted to receiver]:
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move.
Amendment moved—.
Page 70, line 9, leave out ("directors or").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 72, as amended, agreed to.
Clause 73 agreed to.
Clause 74 [Receivers appointed out of Court]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2), after "functions" to insert, "except in so far as the contract otherwise provides." The noble and learned Viscount said: This Amendment gives effect to an undertaking which I gave to the noble Viscount, Lord Maugham, to consider further whether any Amendment was necessary to make it clear that the receiver or manager of the property of a company, appointed under
766
the powers contained in any instrument, will not be personally liable on any contract entered into by him in the performance of his functions if the contract provides that he shall not be liable. I beg to move.
Amendment moved—
Page 71, line 44, after ("functions") insert ("except in so far as the contract otherwise provides").—(The Lord Chancellor.)
VISCOUNT MAUGHAM: I am much obliged to my noble and learned friend for what he has done here. I have always taken the view that an Act of Parliament ought to resemble ,a cross word puzzle in only a very remote degree. Accordingly, I beg to thank the noble and learned Viscount, the Lord Chancellor.
On Question, Amendment agreed to.
Clause 74, as amended, agreed to.
Clauses 75 to 78 agreed to.
Clause 79 [Amendments as to fraudulent preference]:
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 75, line 25, at end, insert ("In the application of this provision to Scotland, for the reference to three months there shall be substituted a reference to sixty days.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 79, as amended, agreed to.
Clauses 80 to 85 agreed to.
6.2 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after Clause 85, to insert the following new clause—
Liability for rentcharge on company's land after dissolution or disclaimer.
".—(I) Where by operation of law land in England vests subject to a rentcharge in the Crown or any other person eithers—

(a) on the dissolution of a company; or

(b) on a disclaimer under Section two hundred and sixty-seven of the principal Act;

that shall not, subject to the next following subsection, impose on the Crown or the said other person or its or his successors in title any personal liability in respect of the rentcharge.
(2) This section shall not affect any liability in respect of sums accruing due after the Crown or the said other person, or some person claiming through or under the Crown or the said other person, has taken possession or control of the land or has entered into occupation thereof.
(3) This section shall apply to land vesting and sums accruing due before, as well as after, the coming into force thereof.
(4) In this section the expression 'company' includes any body corporate."
The noble and learned Viscount said: This is a complicated matter. The new clause is really a corollary to Clause 86, which enables the Crown to disclaim onerous property vesting in it on the dissolution of a company. It provides that, where land subject to rentcharge vests by operation of English law on a dissolution of a company or disclaimer in the Crown or any other person, the Crown or that other person shall not be personally liable for the rentcharge unless and until they take possession or control or enter into occupation of the land. It has always been realized that this provision was to some extent ineffective in respect of freehold land, since the theory of English law is that every subject holds his land as of the Crown and, in the absence of a tenant holding of the Crown, the Crown is entitled to the land. The result is that where a liquidator disclaims freehold land, and thereby determines the company's estate in the land, the land becomes vested in the Crown by title paramount, except in very rare cases (which may still occur) where a subject was interposed as the mesne lord of the land between the Crown and the company. Under Clause 86 of the Bill a disclaimer by the Treasury Solicitor has the same effect as a disclaimer by the liquidator, and therefore, in the case of freehold land the Crown's title does not derive from the company but by title paramount.
With regard to freehold land not subject to a rentcharge there is not much risk of any undue liability falling on the Crown. The Crown's immunity from actions in tort is preserved in cases of this sort, unless and until the Crown takes possession of the land by Clause 39 (4) of the Crown Proceedings Bill. The burden of landlord's covenants, in the case of land subject to a lease, or of the mortgagor's covenants, where land is subject to a mortgage, would not in such a case run with the land so as to bind the Crown, and it is of the essence of the equitable doctrine of restrictive covenants that the burden only runs with the land where it does not impose any onerous duty upon the landowner.
The position, however, of rentcharges is unique. The law, in general, seems to be reasonably well settled and to be as follows. First, the amount of the rent-charge which may be imposed on any parcel of land may exceed the yearly value of that land by any amount. Secondly, the freeholder entitled to the rents and profits of the land is personally liable to pay the rentcharge out of his own pocket, whether he has gone into actual possession or not. Thirdly, the personal liability of the freeholder is not limited, any more than the liability of the land itself, by the yearly value of the land. There are dicta in some of the cases to the effect that the personal liability of the freeholder depends on privity of estate, but it is not thought safe to rely on these, inasmuch as the cases in general proceed on the broad general principle that the right to receive rents and profits carries with it the liability to pay the rentcharge.
What is the result of all this learning? The result is that the Crown may, without any act on its part, find itself burdened with a liability enforceable by action in the Courts to pay, say, a rentcharge of £1,000 a year because, on the dissolution of a company, land worth £50 a year passed to it. This state of affairs obviously gives everyone who becomes aware of it a convenient method of acquiring a Government annuity. The clause, therefore, provides that the Crown or the mesne lord shall be under no personal liability for the rentcharge, so long only as they do not take possession or control of the land, or enter into occupation of it. This will not debar the owner of the rentcharge from enforcing his remedy against the land, but merely deprives him of his rights (if any) to sue the Crown or the mesne lord personally for the amount of the rentcharge in respect of any period before the Crown or the mesne lord exercises some act of ownership over the land. I beg to move.
Amendment moved—
After Clause 85 insert the said new clause.—(The Lord Chancellor.)
VISCOUNT MAUGHAM: I do not know whether anybody here is learned enough to criticize the statement that has been made by the Lord Chancellor. I certainly am not, though I think I did hear things that I once heard a long time ago and, so far as I could gather, they were, on the

769
whole, perfectly correct. I think the House will be perfectly safe in approving this Amendment.
On Question, Amendment agreed to.
Clause 86 [Property of dissolved company]
THE LORD CHANCELLOR: This is consequential on the Amendment to insert a new clause after Clause 85. I beg to move.
Amendment moved—
Page 81, line 15, after ("Act") insert ("and the last foregoing section of this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 82, line II, leave out from ("property") to ("in") in line 12.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 86, as amended, agreed to.
Clause 87:
Miscellaneous amendments as to civil and criminal liability.
(3) Subsection (I) of Section two hundred and seventy-four of the principal Act (which penalises the persons responsible where proper books of account were not kept by a company throughout the two years immediately preceding the commencement of its winding tip) shall have effect and be deemed always to have had effect as if after the words "the period of two years immediately preceding the commencement of the winding up" there were inserted the words "or the period between the incorporation of the company and the commencement of the winding up, whichever is the shorter".
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3), at the end to insert:
"and as if, in the phrase 'unless he shows that he acted honestly or that in the circum- stances in which the business of the company was carried on the default was excusable' for the word 'or' there were substituted the word 'and'".
The noble and learned Viscount said: This Amendment corrects a small drafting error in Section 274 of the Act of 1929, relating to the liability where proper books of account have not been kept by a company in liquidation. Therefore, in one sense it is a drafting Amendment—or it would have been were we discussing the Act of 1929. It is merely a drafting blemish which has been on the Act of
770
1929 ever since that time, and we are now putting it right. I beg to move.
Amendment moved—
Page 83, line 13, at end insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 87, as amended, agreed to.
Clause 88 [Production and inspection of books where offence suspected]:
THE LORD CHANCELLOR: This is consequential. I beg to move.
Amendment moved—
Page 84, line 2, leave out ("a director or") and insert ("an").—(The Lord Chancellor).
On Question, Amendment agreed to.
Clause 88, as amended, agreed to.
Clauses 89 and 90 agreed to.
Clause 91 [Amendment as to persons liable for certain offences]:
THE LORD CHANCELLOR: This Amendment gives effect to an undertaking I gave to the noble Viscount, Lord Maugham, to insert the words "knowingly and wilfully" in Clause 91 (2) in order to make certain that a director who unintentionally fails to comply with Section 113 was not to be liable to a penalty. I beg to move.
Amendment moved—
Page 87, line 7, after ("is") insert ("knowingly and wilfully").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 91, as amended, agreed to.
Clauses 92 to 95 agreed to.
Clause 96 [Prospectus of foreign company]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (3), to insert-
"(4) Where any such contract as is mentioned in the said paragraph (b) is wholly or partly in a foreign language, the reference in that paragraph to a copy of the contract shall be taken as a reference to a copy of a translation thereof in English or a copy embodying a translation in English of the parts in a foreign language, as the case may be, being a translation certified in the prescribed manner to he a correct translation.
(5) The section of this Act excluding Section thirty-five of the principal Act and relaxing the Fourth Schedule thereto in the case of certain prospectuses shall extend to prospectuses to which Section three hundred and fifty-four of the principal Act applies with the substitution for references to Section thirty-five of that Act of references to Section three hundred and fifty-five of that Act."
The noble and learned Viscount said: This Amendment applies to prospectuses of companies incorporated outside, but carrying on business within, Great Britain certain Amendments which apply to prospectuses of companies incorporated in Great Britain. The first of the two subsections which the Amendment seeks to insert is really consequential on the Amendment to Clause 54. The second of the subsections which the Amendment seeks to insert applies to the new clause which follows Clause 54.
Amendment moved—
Page 90, line 40, at end insert the said words.—(The Lord Chancellor.)
On Question Amendment agreed to.
Clause 96, as amended, agreed to.
Clause 97 [Power of foreign companies to hold land.]
LORD RENNELL: On Clause 97, my noble friend the Marquess of Reading raised a point in Committee stage the last time. It was suggested that power should be taken under this clause to include certain countries by Order in Council in order to provide a bargaining counter in commercial treaties I see that no Amendment has been put down. I was wondering if the noble and learned Viscount could say if that matter had been considered, and if it had been found that the present powers are sufficient.
THE LORD CHANCELLOR: Yes, I have looked into this matter; indeed have spent some time over it, and on reflection this is how it strikes me. As your Lordships know, any foreigner can own land in the United Kingdom, and any foreign company can incorporate a subsidiary in this country to hold land. It is anomalous, therefore, that a foreign company should not also be able to own land, and the fact that it cannot do so is a survival from the old mortmain laws. It is an embarrassing point to have to raise every time a commercial treaty is being negotiated, and appears to be out of all proportion to its importance. We were asked whether we should retain power to make the concession reciprocal. We have considered that, and frankly we thought it would be more trouble than it is worth. We think the bargaining value is negligible and it might involve discrimination contrary to our most-favoured nation policy. Whatever the merits of that policy, we
772
feel this is not the point at which to raise the issue. Accordingly, I will answer the noble Lord by saying that we have considered 'this matter, and have come to the conclusion that we had better not do it.
Clause 97 agreed to.
Clause 98 [Accounts of foreign companies]:
THE LORD CHANCELLOR: We might take the next two Amendments, if your Lordships will agree, together. Under Clause 98, foreign companies are subject to exactly the same requirements as British companies. This, however, may be inconvenient, particularly as regards laying consolidated accounts, and having to disclose matters under British law which they might not have to disclose under foreign law. The accounts provisions are there mainly for the protection of shareholders, and the shareholders of a foreign company would not be in this country. Moreover, under Section 348 of the principal Act, every foreign company has to exhibit conspicuously the country in which it is incorporated, and has to give this information also in legible characters in all bill heads, letter paper, notices, and so on. Anybody dealing with a foreign company knows, therefore, that he is doing so. It is possible that if we seek to apply these requirements to foreign companies there may be awkward repercussions for British companies abroad, and for that reason power is taken to make exceptions. I beg to move.
Amendment moved—
Page 91, line 34, after ("Act") insert ("subject, however, to any prescribed exceptions").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendment moved—
Page 91, line 34, after ("shall") insert ("subject as aforesaid").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is a consequential Amendment. I beg to move.
Amendment moved—
Page 91, line 36, leave out ("consolidated") and insert, ("group").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is consequential on the limitation to exempt private companies

773
from the privilege of not having to file accounts. I beg to move.
Amendment moved—
Page 91, line 46, leave out from ("that") to end of subsection (2) and insert (",had the provisions of this Act relating to exempt private companies extended to Northern Ireland, it would at the date of the certificate have been an exempt private company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 98, as amended, agreed to.
Clauses 99 and 100 agreed to.
Clause 101 [Bankruptcy, 4 & 5 Geo. 5., c. 59.; 3 & 4 Geo. 5., c. 20]:
THE LORD CHANCELLOR: This Amendment which I move is consequential on the insertion of the new clause after Clause 85. I beg to move.
Amendment moved—
Page 93, line 14, at end insert ("(5) The provisions of this Act relating to the liability in respect of a rentcharge on land disclaimed under section two hundred and sixty-seven of the principal Act shall apply also in relation to land disclaimed under Section fifty-four of the Bankruptcy Act, 1914.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 101, as amended, agreed to.
Clause 102 [Registration of business names, 6 & 7 Geo. 5., c. 58]:
THE LORD CHANCELLOR: This Amendment gives effect to the undertaking given to the noble Viscount, Lord Swinton, to amend the Registration of Business Names Act, so as to remove the requirements in that Act as to the disclosure of the nationality of origin of persons trading under business names in cases where their nationality of origin is different from their present nationality. I beg to move.
Amendment moved—
Page 93, line 32, at end insert ("(3) So much of any provision of the Registration of Business Names Act, 1916, as requires a person's nationality of origin to be stated shall cease to have effect.")—(The Lord Chancellor.)
VISCOUNT SWINTON: I am much obliged to the noble and learned Viscount.
On Question, Amendment agreed to.
Clause 102, as amended, agreed to.
Clauses 103 to 107 agreed to.
Clause 108 [Construction and application of principal Act and this Act, 19 & 20 Geo. 5., c. 23]:
THE LORD CHANCELLOR: This Amendment defines "exempt private company" by reference to Clause 45 (the contents of which are transferred by Amendments to Clause 45, page 45, line 34, Clause 45, page 46, line 1, and to page 109, line 27, to a new Schedule). I beg to move.
Amendment moved—
Page 98, line 4, at end insert ("the expression 'exempt private company' has the meaning assigned to it by the section of this Act relating to the inclusion of a private company's accounts in its annual return;").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 108, as amended, agreed to.
Clause 109 [Short title, citation, commencement and repeal":
THE LORD CHANCELLOR: This is a drafting Amendment. I beg to move—
Amendment moved—
Page 98, line 44, leave out ("the Eighth Schedule to this Act") and insert ("Part I of the Eighth Schedule to this Act, and the provisions of the Registration of Business Names Act, 1916, specified in Pert II thereof ")—.(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 109, as amended, agreed to.
First Schedule [Accounts]:
THE LORD CHANCELLOR: I beg to move to leave out from the beginning to end of line II, and to insert the words on the Marshalled List. This is a drafting Amendment.
Amendment moved—
Page 99, line 8, leave out from beginning to end of line 11, and insert ("The first seven paragraphs of this Part of this Schedule apply to the balance sheet and are subject to the exceptions and modifications provided for by Part II thereof in the case of a holding company and by Part HI thereof in the case of companies of the classes there mentioned").(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment, too, is a drafting Amendment. I beg to move.
Amendment moved—
Page 101, line 12, leave out ("so far as it relates to provisions").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This next Amendment gives effect to an undertaking I gave to consider further paragraph 7 (6) of Part I of the First Schedule, which requires disclosure in the balance sheet of the aggregate amount, or estimated amount, if material, of contracts for capital expenditure so far as not provided for. The Amendment provides that the information need be given only where practicable. I beg to move.
Amendment moved—
Page 102, line 15, at beginning insert ("Where practicable").—(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 102, line 35, leave out from ("modifications") to end of line 37 and insert ("provided for by Part of this Schedule in the case of a holding company and by Part III thereof in the case of companies of the classes there mentioned ").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is a consequential Amendment. I beg to move.
Amendment moved—
Page 104, line 23, leave out from beginning to ("there") in line 24, and insert ("Where group accounts are not submitted").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment Is consequential. I beg to move.
Amendment moved—
Page 104, line 26, leave out ("consolidated") and insert ("group").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment results from the fact that the omission of a subsidiary from "group accounts" is now to be done at the discretion of the directors in accordance with the Amendment, which I moved to-day, subject to the provisions as to approval by the Board of Trade.
Amendment moved—
Page 105, line 8, leave out from beginning to end of line is and insert—
("Provided that the Board of Trade may, on the application or with the consent of the company's directors, direct that in relation
776
to any subsidiary this sub-paragraph shall not apply or shall apply only to such extent as may, be provided by the direction.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This and the Amendment to line 44 are both consequential, and I can take them together. I beg to move.
Amendment moved—
Page 105, line 40, leave out from ("accounts") to ("but") in line 42.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendment moved—
Line 44, leave out ("for that purpose,").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is a consequential Amendment. I beg to move.
Amendment moved—
Page 106, line 21, leave out ("consolidated") and insert ("group").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The effect of this Amendment is to secure that where the financial year of the subsidiary does not coincide with that of the holding company, the subsidiary's financial year is to be stated, so that those looking at the accounts may have a better idea as to the disparity between the two. I beg to move.
Amendment moved—
Page 106, line 27, after ("accounts") insert ("the subsidiary's financial year and").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This, too, is a drafting Amendment, resulting from the transfer of a paragraph from Part IV to Part III of the First Schedule. I beg to move.
Amendment moved—
Page 107, line 9, at end insert ("(3) In this paragraph the expression 'banking or discount company' means any company which satisfies the Board of Trade that it ought to be treated for the purposes of this Schedule as a banking company or as a discount company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment dispenses insurance companies from having to state the basis on which the amount, if any, set aside for

777
United Kingdom Income Tax, is computed. This might, by implication, give away some of the facts which they are not required to disclose, and in any case it would be a very troublesome provision for some of the Life Offices to comply with. I beg to move.
Amendment moved—
Page 107. line 17, at end insert ("and subparagraph (10)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: This Amendment arises in the following way. Some assurance companies do not themselves do their investment business but have a subsidiary company to do it for them. This company's business is an integral part of that of the parent company and should obviously be entitled to the same privileges with regard to the disclosure of reserves as the parent company. This is a necessary consequence of the privilege given to assurance companies. I beg to move.
Amendment moved—
Page 107, line 24, at end insert—
("(2) Where an assurance company is entitled to the benefit of this paragraph, then any wholly owned subsidiary thereof shall also he so entitled if its business consists only of business which is a necessary adjunct to assurance business of the classes carried on by the assurance company.
(3) For the purposes of this paragraph a company shall he deemed to be the wholly owned subsidiary of an assurance company if it has no members except the assurance company arid the assurance company's wholly owned subsidiary and its or their nominees").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after paragraph 2 of Part III of the First Schedule to insert:
"3.—(I) A company to which this paragraph applies shall not be subject to the following requirements of Part I of this Schedule, that is to say—

(a) as respects its balance sheet, those of paragraph I (except so far as the said paragraph relates to fixed and current assets) and paragraphs 2, 3 and 4; and

(b) as respects its profit and loss account. those of sub-paragraph (I) (a), (e) and (f) of paragraph 8;

but a company taking advantage of this paragraph shall be subject, instead of the said requirements, to any prescribed conditions as respects matters to be stated in its accounts or by way of note thereto and as respects information to be furnished to the Hoard of Trade or a person authorized by them to require it.
(2) The accounts of a company shall not be deemed, by reason only of the fact that they do not comply with any requirements of the said Part I from which the company is exempt by virtue this paragraph, not to give the true and fair view required by this Act.
(3) This paragraph applies to companies of any class prescribed for the purposes thereof, and a class of companies may be so prescribed if it appears to the Board of Trade desirable in the national interest:
Provided that, if the Board of Trade are satisfied that any of the conditions prescribed for the purposes of this paragraph has not been complied with in the case of any company, they may direct that so long as the direction continues in force this paragraph shall not apply to the company."
The noble and learned Viscount said: We had some discussion on the Committee stage (I think the noble Viscount, Lord Swinton, raised the point) with regard to the desirability of exempting shipping companies from having to disclose their inner reserves. I promised to look into the matter, and I have done so. It occurs to me that the powers might have to range wider than shipping companies. Consequently this Amendment has been so framed that the Board of Trade may grant these concessions to companies of any class prescribed for the purpose. They can only do so, however, if it appears to them to be desirable in the national interest. I stress that point. It is not in the company's interest, but in the national interest. This means that a case will have to be made out either on grounds of defence or of other matters of highly important public interest. It is not a concession to be given either in the interests of the company, or in the interests of the shareholders, but in the interests of the nation. Moreover, I would like to stress this. The grant of this privilege will not be by any means one-sided. The company taking advantage of the paragraph will be subject, instead of the requirements referred to in sub-paragraph (I) (a) and (b), to "any prescribed conditions as respects matters to be stated in its accounts or by way of note thereto, and as respects information to be furnished to the Board of Trade or a person authorized by them to require it."
An essential condition will be that if a company pays dividends otherwise than out of the profits of the year, that fact will have to be indicated clearly in the accounts, or in a note thereto. This in itself will, I think, go a very long way to preventing the abuse of that privilege,

779
a privilege which I had occasion to remember when I was Attorney-General not many years ago in connexion with an important case. Generally, it is intended to secure that the accounts shall give a fair picture of the company's position, in the sense that it may be an understatement, but never an over-statement. If reserves are put aside for future use, they are put forward essentially to meet contingencies which cannot be exactly foreseen, and they are put aside for that reason in the national interest no less than in the company's interest. The Board of Trade is empowered under the provision—and it will exercise that power—to get full information, and an inspector may be appointed for the purpose. It may be assumed for these reasons that no company will take advantage of this provision unless it feels that it is really essential that it should do so. It may be noted, finally, that the Board of Trade may withdraw the privilege from any company which has not complied with the requirements imposed upon it. That is the endeavour I have made to meet the position put to me, and I hope your Lordships will think that this is a fair way of meeting this point. I beg to move.
Amendment moved—
Page 107, line 24, at end insert the said new paragraph.—(The Lord Chancellor.)
VISCOUNT SWINTON: I accept absolutely and entirely the suggestion the noble and learned Viscount the Lord Chancellor has made. As he is well aware, I put this forward entirely on the grounds of national interest. Those are the grounds on which the Cohen Committee recommended, and the Bill in terms excludes in the matter of these reserves banks, insurance companies and discount companies. As the noble and learned Viscount has said, there is no question of giving a benefit to the company as a company, or to the company's shareholders as individual investors. That was never in the mind of any of us. There can be only one consideration, and that is what is in the national interest; and I think its quite right and proper that the responsible Ministry or Ministries of the Government of the day should decide. I not only accept that, but I should like to associate myself entirely with every word the noble and learned Viscount has said. I fully accept the Amendment which he has proposed in its terms and in its spirit.
LORD RENNELL: There is one small point I would like to make on what the noble and learned Viscount the Lord Chancellor has said. I suppose it is clear that the Board of Trade will have the power to withdraw the privilege which is accorded in the national interest to a company or a group of companies also in the case where it is no longer necessary in the national interest that that exemption should be given. The noble and learned Viscount said that the privilege would be withdrawn if certain provisions were not complied with. It is not only a question of certain provisions being complied with. There may come a time when the necessity no longer arises. The Board of Trade should quite clearly have the privilege of withdrawing the exemption granted, without reason given, when in its opinion the exemption is no longer required in the national interest.
THE LORD CHANCELLOR: I quite assent to that; that, I think, is plainly so.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is consequential on the new paragraph 3. I beg to move.
Amendment moved—
Page 107, line 25, leave out from beginning to ("the") in line 26, and insert ("Where a company entitled to the benefit of any provision contained in this Part of this Schedule is a holding company,".—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is also consequential. I beg to move.
Amendment moved—
Page 108, line 18, leave out paragraph 2.—(The Lord Chancellor.)
On Question, Amendment agreed to.
First Schedule, as amended, agreed to.
Second Schedule [Matters to be expressly stated in Auditors' Report]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph 3 (i), after "and", to insert "(unless it is framed as a consolidated profit and loss account)". The noble and learned Viscount said: It is obvious that where a holding company presents only a consolidated profit and loss account, as it may do under the new provisions, the consolidated profit and loss account cannot be in agreement with the books of the holding company alone. I beg to move.
Amendment moved—
Page 109, line I, after the first ("and") insert ("(unless it is framed as a consolidated profit and loss account").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in sub-paragraph (2) of paragraph (3), to leave out "as required by this Act". The noble and learned Viscount said: With your Lordships' permission, I propose to take this and the next Amendment together. These Amendments are designed to make it clear that the auditors' certificate as to the accounts giving a true and fair view is given subject to the qualifications in Part III of the Schedule for banks and insurance companies. I beg to move.
Amendment moved—
Page 104, line 7, leave out ("as required by this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendment moved—
Page 109, line 12, at end insert ("or, as the case may be, gives a true and fair view thereof subject to the non-disclosure of any matters (to be indicated in the report) which by virtue of Part III of the First Schedule to this Act are not required to be disclosed").— (The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, to leave out from the beginning of paragraph 4 to the end of the Schedule and to insert
"4. In the case of a holding company submitting group accounts whether, in their opinion, the group accounts have been properly prepared in accordance with the provisions of the Act so as to give a true and fair view of the state of affairs and profit or loss of the company and its subsidiaries dealt with thereby, so far as concerns members of the company, or, as the case may be, so as to give a true and fair view thereof subject to the non-disclosure of any matters (to be indicated in the report) which by virtue of Part III of the First Schedule to this Act are not required to be disclosed."—(The Lord Chancellor.)
The noble and learned Viscount said: This Amendment falls into two parts. The first part is really consequential upon allowing group accounts in place of consolidated accounts. Secondly, it dispenses the auditors from having to certify as to the validity of the reasons given by the directors for not including subsidiaries in the group accounts. It has been represented that this is a matter for the directors on which the auditors cannot
782
reasonably be expected to pronounce. I beg to move.
Amendment moved—
Page 109, line 23, leave out from the beginning to end of Schedule and insert the said new paragraph 4.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after the second Schedule, to insert

THIRD SCHEDULE.

  CONDITIONS AS TO INTERESTS IN SHARES AND DEBENTURES OF EXEMPT PRIVATE COMPANY.
  Basic conditions.
  1. The basic conditions as to the shares or debentures of the company whose exemption is in question are—

  (a) that no body corporate is the holder of any of the shares or debentures; and

  (b) that no person other than the holder has any interest in any of the shares or debentures;

  but these conditions arc subject to the exceptions provided for by the following paragraphs of this Schedule.

Exceptions for normal dealings of a business nature.
2.—(I) The rules contained in the following sub-paragraphs of this paragraph shall apply for the purposes both of the basic conditions and of the exceptions from those conditions.
(2) Where any share or debenture or any interest in any share or debenture is subject to a charge in favour of a banking or finance company by way of security for money lent in the ordinary course of its business as such

(a) any interest under the charge, whether of the banking or finance company or a nominee for it, shall be disregarded; and

(b) if the barking or finance company or its nominee is the holder of the sharer debenture, the person entitled to the equity of redemption shall be treated as the holder, whether he has a present right to redeem or not.

(3) Any interest under a contract for the transfer of any share or debenture or of any interest in any share or debenture shall, until execution of an instrument of transfer by the parties, be disregarded unless execution thereof is unreasonably delayed.
(4) Subject to sub-paragraph (2) of this paragraph, on execution of an instrument of transfer of a share or debenture, the transferee shall be treated as the holder, notwithstanding that the transfer requires registration with the company unless registration is refused.
Exceptions for cases of death and for family settlements.
3.—(I) The basic conditions shall be subject to exceptions, for—

(a) any shares or debentures held by the personal representatives of a deceased holder

783
thereof, so icing as administration of his estate has not been completed; and

(b) any shares or debentures held by trustees on the trusts of a will or family settlement disposing of the shares or debentures, so long as no body corporate has for the time being any immediate interest under the said trusts.

(2) For the purposes of this paragraph—

(a) the expression "family settlement" means a settlement made either—

(i) in consideration or contemplation of an intended marriage of the settlor or any of the settlor's issue or in pursuance of a contract entered into in consideration or contemplation of any such marriage; or

(ii) otherwise in favour of any of the following persons, that is to say the settlor, his parents and grandparents, and any other individual who at the date of the settlement is a member of the company or, in the case of a settlement of debentures, a member or debenture holder of the company, and the wife or husband and issue, and the wife or husband of any of the issue, of the settlor, his parents, or any such other individual, and persons taking in the event of a failure of the issue or any class of the issue of any person taking under the settlement;

(b) the expressions "parent", "grandparent" and "issue" shall be construed as if the stepchild, adopted child or illegitimate child of any person were that person's child;

(c) any reference to a wife or husband shall include a former wife or husband and a reputed wife or husband;

(d) the expression "will" includes any testamentary disposition;

(e) any reference to a will or family settlement disposing of any shares or debentures shall include a will or family settlement disposing of an interest under another will or family settlement disposing of the shares or debentures.

Exception for shares held by exempt private companies.
4.—(I) The first of the basic conditions shall be subject to an exception for shares held by another private company which is itself an exempt private company:
Provided that this exception shall not apply if, taking all the following companies together, that is to say—

(a) the company whose exemption is in question (hereafter in this Schedule referred to as "the relevant company");

(b) any company holding shares to which this exception has to be applied in determining the relevant company's right to be treated as an exempt private company; and

(c) any further company taken into account for the purposes of this proviso in determining the right to be so treated of any company holding any such shares as aforesaid;

784
the total number of persons holding shares in those companies is more than fifty, joint shareholders being treated as a single person and the companies themselves being disregarded.
(2) Where the relevant company and another company hold shares in each other, the other company shall he treated for the purposes of the foregoing sub-paragraph as an exempt private company if—

(a) in determining its right to be so treated the exception in that sub-paragraph would apply to the shares in it held by the relevant company, on the assumption that the relevant company was an exempt private company; and

(b) in all other respects the other company is entitled to be so treated;

and where another company's right to be so treated depends on the application to any shares in it of that sub-paragraph, and the application thereof to those shares depends indirectly on the relevant company's right to be so treated, this sub-paragraph shall apply as if those shares were held by the relevant company.
(3) Where by virtue of this paragraph any shares are excepted from the first of the basic conditions, the second of those conditions shall be subject to an exception for any interest in those shares which any person has by virtue of debentures of the company holding those shares.
Exception for banking or finance company providing capital.
5.—(I) The first of the basic conditions shall be subject to an exception for any shares or debentures held by or by a nominee for a banking or finance company, where the banking or finance company acquired the shares or debentures or its interest therein in the ordinary course of its business as such and by arrangement with the relevant company or its promoters:
Provided that this exception shall not apply if the banking or finance company has the right (or, where there is more than one such company holding shares or debentures to which this exception has to be applied in determining the relevant company's right to be treated as an exempt private company, they have between them the right) to exercise or control the exercise of one-fifth or more of the total voting power at any general meeting of the relevant company.
(2) Where by virtue of the foregoing subparagraph any shares or debentures are excepted from the first of the basic conditions, the second of those conditions shall be subject to an exception for any interest in those shares or debentures which any person has by virtue of debentures of the banking or finance company.
Meaning of "banking or finance company."
6. In this Schedule the expression "banking or finance company" means any body corporate or partnership whose ordinary business includes the business of banking and any other body corporate whose ordinary business includes the business of lending money or of subscribing for shares or debentures,

785
except that it does not include any such other body corporate unless either—

(a) its shares are quoted or dealt in on a recognized stock exchange; or

(b) it is designated for the purposes of this paragraph by order of the Board of Trade; or

(c) it is a subsidiary of a body corporate whose shares are so quoted or dealt in or which is so designated.")

The noble and learned Viscount said: This Amendment transfers to a schedule the bulk of those conditions which have to be satisfied by a private company in order to qualify as an exempt private company. It takes care of the various undertakings I gave—an undertaking to the noble Viscount, Lord Swinton, to make it plain that a company should not be disqualified from being exempted because some of its shares were held by another exempt company, and an undertaking to the noble Viscount, Lord Bridgeman, dealing with banking and finance companies. The stipulation, however, that there shall be no more than fifty members is, I think, as far as I can go. I think we should be rather careful about extending this privilege of not having to publish accounts. Although I know there are many very worthy schemes whereby workers in the business get shares and so on—and I certainly do not want to discourage them—I think that if a company gets beyond fifty members it reaches a stage at which it ought not to be relieved from the obligation which attaches to any ordinary company, private or public, to publish its accounts. Anticipating something which the noble Lord, Lord Cozens-Hardy, asked me just now, may I say that I cannot go above the figure of fifty, which to my mind is the absolute limit, no matter what the quality of the shareholders may be. I beg to move.
Amendment moved—
After the Second Schedule, insert the said new Schedule.—(The Lord Chancellor.)
VISCOUNT SWINTON: So far as I am concerned, this is very nice, neat and clear, and I think it gives effect to all the undertakings which were given by the Government.
LORD COZENS-HARDY: I am afraid I did not exactly follow the noble and learned Viscount in what he said just now. I was not suggesting that there should be any increase in the numbers; I was merely suggesting that because a particular
786
exempt private company happens now or in the future to have trustees for employees as shareholders it should not thereby either cease to be an exempt private company or be unable to become an exempt private company. It does not seem reasonable that one of the reasons determining whether a company can be exempt or not should merely be whether some generous shareholder happens to have given some of the shares of the company to a benevolent fund.
LORD HAWKE: May I raise a point which I think the noble and learned Viscount will be able to answer at the same time? Subparagraph (b) of paragraph r uses the words "that no person other than the holder has any interest in any of the shares or debentures". Where you have a family trust represented by certain names, the income from that holding may be divided among a considerable number of persons—a number of persons which will be diminishing by death and increasing by birth at perhaps frequent intervals. Does this affect the limit of fifty for the shareholders of a private exempt company?
THE LORD CHANCELLOR: I think the noble Lord will find that that is covered by the family settlement provisions in paragraph 3. Your Lordships will see it is there said that the basic conditions—and the noble Lord, Lord Hawke, referred to the second of those conditions—"shall be subject to exceptions for", and then there are set out the exceptions. I think it will be found that we have met that sort of point. We certainly do not want to prevent a company of the sort described from keeping its exemption. If the noble Lord looks at paragraph 3 I think he will see that we have managed to achieve that result. I will look at the point put to me by the noble Lord, Lord Cozens Hardy, to see if I can meet it.
LORD HAWKE: I thank the noble and learned Viscount. It is the assurance that I value more than my interpretation.
On Question, Amendment agreed to.
Third Schedule [Amendments to Third and Fifth Schedules to Principal Act]:
LORD CHORLEY: This Amendment is consequential on an Amendment to Clause 52. I beg to move.
Amendment moved—
Page 110, line 6, at end insert ("2.—,(I) In the said Third Schedule there shall be inserted at the end of the entry relating to the vendors of property purchased or acquired or proposed to be purchased or acquired the words 'except where the contract for its purchase or acquisition was entered into in the ordinary course of business or the amount of the purchase money is not material'.
(2) At the end of the corresponding entry in the Fifth Schedule to the principal Act there shall be inserted the words 'except where the contract for its purchase or acquisition was entered into in the ordinary course of the business intended to be carried on by the company or the amount of the purchase money is not material'.").—(Lord Chorley.)
LORD RENNELL: This is consequential upon an Amendment, but that Amendment was amended by the noble and learned Viscount. That involves a consequential Amendment to this Amendment, does not it?
LORD CHORLEY: This is the consequential Amendment.
LORD RENNELL: The wording used here is the wording of the first Amendment which was down on the Marshalled List and not the Amendment finally adopted by the Committee.
LORD CHORLEY: I will look into that, but I understand this is consequential on the Amendment as agreed.
LORD RENNELL: I think it is consequential on the Amendment as stated in the Marshalled List but not consequential on the Amendment as finally agreed by the Committee.
LORD CHORLEY: I am much obliged to the noble Lord for pointing that out. We will certainly look into it and make quite sure.
On Question, Amendment agreed to.
LORD CHORLEY: This is a further consequential Amendment, this time on an Amendment to Clause 54.
Amendment moved—
Page 110, line 10, at end insert—
("(2) In both the said Schedules there shall be inserted at the end of the entry relating to a time and place for inspection of material contracts the following words—
'or (I) in the case of a contract not reduced into writing, a memorandum giving full particulars thereof, and (2) in the case of a contract wholly or partly in a foreign language, a copy of a translation thereof in English or embodying a translation in English of the parts in a foreign language, as the case may be, being a translation certified in
788
the prescribed manner to be a correct translation.'")—(Lord Chorley.)
On Question, Amendment agreed to.
Third Schedule, as amended, agreed to.
Fourth Schedule agreed to.
Fifth Schedule [Provisions applied to unregistered companies]:
LORD CHORLEY: There are two Amendments which, with your Lordships' permission, I will take together. They are both consequential on the insertion of new clauses in the Bill. I beg to move.
Amendment moved—
Page 113, line 25, leave out ("seventeen") and insert ("eighteen").—(Lord Chorley.)
On Question, Amendment agreed to.
Amendment moved—
Page 113, line 37, leave out ("thirty-nine") and insert ("forty").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The next Amendment is a drafting Amendment. It is necessary to bring in the Eleventh Schedule in order to give effect to Section 362 of the Act. I beg to move.
Amendment moved—
Page 113, line 56, leave out ("Schedule") and insert ("and Eleventh Schedules").—(Lord Chorley.)
On Question, Amendment agreed to.
Fifth Schedule, as amended, agreed to.
Sixth and Seventh Schedules agreed to.
Eighth Schedule [Enactments of Principal Act Repealed]:
LORD CHORLEY: This is consequential on the Amendment to Clause 17. I beg to move.
Amendment moved—
Page 116, line 26, leave out from ("subsection (2)") to ("in") in line 27 and insert. ("and subsection (3)").—(Lord Chorley.)
On Question, Amendment agreed to.
LORD CHORLEY: The first part of this Amendment is consequential on the Amendment to Clause 20, and the second part is consequential on the existing provisions of Clause 20 (4). I beg to move.
Amendment moved—
Page 116, line 45, at end insert ("In paragraph (a) of subsection (I) of Section one hundred and forty-four, the words 'and, if that nationality is not the nationality of origin, his nationality of origin'.
Paragraph (d) of subsection (I) of Section one hundred and forty-five.")—(Lord Charley.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is the last, and may I take this opportunity of thanking your Lordships very much for the way in which you have assisted as to get this Bill through. This Amendment is consequential on the Amendment to Clause 102, and I hope you do not think that I was inconsequential myself in tendering my thanks to all your Lordships. I beg to move.
Amendment moved—
Page 118, line 17, at end insert—

PART II.
Enactments of Registration of Business Names Act, 1916, repealed.
In subsection (I) of Section three, the words 'and if that nationality is not the nationality of origin, the nationality of origin', in both. places where they occur.
In subsection (I) of Section eighteen, the words and if his nationality is not his nationality of origin his nationality of origin' in paragraph (a), and the words 'and if the nationality is not the nationality of origin, the nationality of origin' in paragraph (b).
In the Schedule, the words 'and if that nationality is not the nationality of origin, the nationality of origin'.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Remaining Schedule, as amended, agreed to.
VISCOUNT SWINTON: If I might also inconsequentially give the noble and learned Viscount, the Lord Chancellor, a Roland for his Oliver, I may say that we have made great expedition, and we have made it, thanks not only to the courtesy and knowledge of the noble and learned Viscount, but to the way in which he has co-operated with us all through this Bill. I well know that he has had a very great deal of hard work outside. The Lord Chancellor has a great many jobs to do—as all Lord Chancellors have—besides leading the House and taking charge of Bills. I do not think this Bill could have come from a better place than this House. I should think we have discussed eighty pages of Amendments in the Committee and recommittal stages. We have not had a single Division, and I, and all my friends on this side of the House, are most grateful to the noble and learned Viscount for what he has done inside and outside your Lordships' House. I think we have given not only to the
790
lawyers, but to the business community, a really good charter.
LORD RENNELL: May I add my personal thanks to the noble and learned Viscount and his advisers, not only for the help that I have personally received and for the courtesy I have experienced from their hands, but also for the very great deal I have learned. It is perhaps an example of what can be done to a Bill when all the interested parties in your Lordships' House have had but one single object in view, which was to produce the best Bill it was possible for them to produce, on a subject which was reputedly non-controversial hut which does not only contain controversial matters in the usually accepted sense, but where differences of personal opinion were held and were sustained, but upon which there has been no Division and upon which full agreement has been found as the result of experience and of the giving and taking of each other's point of view. I would like to add my most sincere personal thanks to the noble and learned Viscount, to the noble Lord, Lord Chorley, and all his advisers for what they have done for me personally.
LORD SALTOUN: I should like to concur entirely with what has been said, but there is one quite general point on this Bill which I would be very grateful if the noble and learned Viscount would take into consideration. I am making this suggestion really on what he said at the last stage of this debate. I hope he will not be angry with me if I say that personally I think -le minority shareholders of unlimited companies have not had their position improved by the Bill. That is a point on which we may differ, but I had that matter under consideration long before we started talking on this Bill. The reason I did not put down an Amendment at this stage was because I could not find the form of words which the noble and learned Viscount's advisers would accept. I think we should have in this Bill something to the effect that the minority shareholder of an unlimited company can call upon the directors to accept or find an acceptor for his shares, subject to notification to the creditors and other shareholders of the company and directors and auditor. My reason for saying that is that a lot of these unlimited companies have secretaries who are given small numbers of shares. Supposing it

791
is the secretary, and supposing the board of that company is managing that company quite contrary to his views and wishes; he is trapped and he can never get out and he has unlimited liability. I would he very grateful to the noble and learned Viscount if he would consider that, because I feel he realizes it is a material point.

PENICILLIN BILL. [H.L.]
6.48 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Listowel.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF DROGHEDA in the Chair.]
Clause I:
Control of sale and supply of substances to which this Act applies.
1.—(I) Subject to the provisions of this section, no person shall sell or otherwise supply any substance to which this Act applies or any preparation of which any such substance is an ingredient or part unless—
(a) he is a duly qualified medical practitioner, a registered dental practitioner or a registered veterinary surgeon, or a person acting in accordance with the directions of any such practitioner or surgeon, and the substance or preparation is sold or supplied for the purposes of treatment by or in accordance with the directions of that practitioner or surgeon; or
(2) The last foregoing subsection shall not apply to the sale or supply of any such substance or preparation—
(d) to any authority or person carrying on a hospital, clinic, nursing home or other institution providing medical, surgical, dental or veterinary treatment.
LORD MARLEY LORD MARLEY moved, at the end of subsection (2) (d), to insert:
"under the direction of a duly qualified medical practitioner, a registered dental practioner or a registered veterinary surgeon or a person acting in accordance with the directions of any such practitioner or surgeon; "
The noble Lord said: My noble friend the Earl of Listowel moved the Second Reading of this Bill in such a persuasive way that it seems a little odd that there appears to be a wide open gap in Clause paragraph (2) (d). It would be in-
792
teresting, I think, if the noble Earl would explain why this gap has been left. It looks as though it is a deliberate gap. It looks as though it may be because there are certain organizations which deal with the cure of animals belonging to poor persons— I do not know. An unqualified or unregistered person may buy and use—that is to say administer—penicillin, provided that he is linked with another unqualified person or a so-called nursing home, hospital, clinic or other institution. This has caused some anxiety among qualified medical officers, and among registered veterinary surgeons, and accordingly the Bill has been considered by the National Veterinary Medical Association of Great Britain and Ireland. They are very anxious that the Government should safeguard the position by removing the gap which exists in the Bill, which in fact opens up a break in the embankment, and which might have to be closed later on.
I have been approached by the National Veterinary Medical Association with a view to putting down an Amendment along the lines of that standing in my name. Furthermore, I may say that this matter has been considered by the Parliamentary and Scientific Committee which contains many members of both Houses and from all Parties, and they are definitely concerned with this gap in the Bill. I would like to call attention to the fact that in Clause 4 of the Bill the word "supply" includes "administer by way of treatment," and therefore in fact the unauthorized persons, that is to say the unqualified or unregistered persons, linked together under institutions such as nursing homes, dental or veterinary establishments, can buy and supply these substances and also use them for treatment. I hope therefore that if the Government feel they are unable to accept this very reasonable and simple Amendment, they will explain precisely why the gap has been left in the whole object for which the Bill was designed.
LORD BARNBY: It seems an eminently reasonable Amendment. It can hardly be considered controversial and, as your Lordships have heard, it has the support of the Parliamentary Scientific Committee. That Committee has a composition such that I think it would not go wrong in a recommendation of this character. As a member of that Committee I certainly support the Amendment

793
and I hope the noble Earl will see his way to accept it.
THE POSTMASTER-GENERAL (THE EARL OF LISTOWEL): I have listened with great sympathy to what the noble Lords have said, and I think we all agree that the object they want to achieve is to prevent nursing homes or veterinary institution; run by "quacks" from obtaining penicillin for use in connexion with treatments given to their patients. But I think if noble Lords will look more closely at Clause i they will see that they are already safeguarded by subsection (I) (a), because under this subsection it becomes an offence for anyone who is not a qualified medical practitioner, registered dental practitioner, or registered veterinary surgeon, or person acting in accordance with their directions, to administer penicillin. Clause i (2) (d), to which the noble Lord, Lord Marley, is referring in his Amendment, turns only on supply to, and not supply by, a hospital, nursing home, or similar institution. Now, only these institutions, under this paragraph, can obtain freely a supply of penicillin. They cannot supply or administer it to their patients, except in accordance with subsection (i) (a) of the clause which I have just quoted. In other words, in theory a nursing home or veterinary institution of doubtful reputation might be able to hold a supply of penicillin, but under this paragraph they could not lawfully use it for treatment on their" patients, except in accordance with the directions of a qualified practitioner.
I hope your Lordships will agree that this is sufficient safeguard against the abuses to which reference has been made. Another difficulty arising out of the noble Lord's Amendment is that it would make it very difficult for bona fide nursing homes, hospitals and institutions to obtain penicillin, which is something very far from what the noble Lord desires to bring about. In these circumstances, I hope that the noble Lord will, on further consideration, withdraw his Amendment.
LORD MARLEY: I would not say that it makes it more difficult for bona fide nursing homes with qualified medical practitioners to obtain penicillin. I cannot see why the Amendment should not be accepted.
THE EARL OF LISTOWEL: The reason is that it adds a lot of red tape to the
794
procedure which would be entailed each time one of these institutions wanted permission to obtain a supply of penicillin. Under the Bill they have only to prove that they are a nursing home, hospital, or whatever it may be. Under the Amendment they would also have to prove the sort of treatment which they gave, and this would clearly be subjecting them to a very great deal of red tape. This would waste their time and involve them in expense which I think is clearly undesirable.
LORD MARLEY: I need hardly say that is one of the most extraordinary statements that I have heard for a long time. The Bill before your Lordships' House enables unqualified and unregistered people to buy such penicillin as they want, but contains rather doubtful powers to preclude them from using it. Why not tighten up the Bill so that they cannot obtain it, rather than allow large quantities of penicillin to get into the hands of entirely unqualified and unregistered persons in the hope, presumably, that they are only buying it to put on the shelf, and that they will never use it? It seems to me so illogical and so unacceptable in an otherwise reasonable Bill, and I fail completely to understand it. I cannot see that there is anything in the red tape argument. After all, there is red tape in a qualified medical practitioner having to sign some form of document before he can get penicillin. If this is red tape, I suppose it is red tape to have to stick a stamp on a letter, in order that the Postmaster-General will pass it through the post. So far as I am concerned, it seems very unsatisfactory, and I hope that there will be an opportunity for my noble friend to think this over again before a later stage, so that on that occasion there may be an opportunity to tighten up this gap which now exists.
Amendment, by leave, withdrawn.
Clause I agreed to.
Remaining clauses agreed to.
House resumed.
Bill reported without Amendment.

STOCKS OF WOOL TOPS.
7.0 p.m.
LORD BARNBY asked His Majesty's Government, if, following reply given on December 4, 1946, they are now able to

795
state if it is their intention to arrange publication forthwith for the benefit of the Industry as a whole, the monthly stock of wool tops, and how soon they expect to be able to supplement this with similar figures on top production and consumption?
The noble Lord said: My Lords, this question reverts to a reply given to a question put in this House on December 4 last year, which at that time, while indefinite, gave hope that early action might be expected. I must ask the indulgence of your Lordships if, in putting this question, I give a little explanation to show you what lies behind it. The noble Lord who was good enough to deal with the question which I put earlier this afternoon, quite unintentionally, I am sure, gave a reply which showed that information had not been supplied to him by the Department concerned which would have enabled him to give a full and satisfactory reply. The information for which the question asked must have been available to the Department, I think. If the reverse were the case it would suggest that a commercial organization which is responsible to the Board of Trade in this matter is not carrying out its duties in a way which, in the commercial sense, is usual. That would be disquieting. But I feel certain that that is not the case, and, in the circumstances, I hope that the noble Lord will convey my remarks to the President of the Board of Trade and, that he will, perhaps, urge him to give an early reply or to make some authoritative statement with regard to the matter. It is a matter which is of vital importance to a very large number of people in the Dominions as well as in this country.
In raising this matter, I wish to emphasize that factual guidance as regards stocks is now essential. This reply to which I have referred might give rise to disquieting feelings. The worsted industry, which makes so substantial a contribution to our exports, is dependent on supplies of these tops, without which the spinning and manufacturing of cloth cannot proceed. Uncertainty at any time is disadvantageous. Under present conditions, ignorance as to present stocks is an added cause of perplexity and doubt. There is reason to believe that these figures are within the knowledge of the Board of Trade. In any case, if some
796
records have recently lapsed, figures on production and consumption plus exports should present no difficulty in the way of the rapid preparation of the essential figures. Anticipating the reply I may get, and in view of the answer given me last time, I feel sure that the noble Lord will not hesitate to press that these should be prepared.
Before I put my question, I feel compelled to make a reference to the general wool situation, to explain the additional matter on which I am asking for information, and to which I have already drawn the attention of the Board of Trade. The situation arising internally out of Board of Trade control regulations seems to me to be chaotic. In saying that, I am not actuated by any objection, in principle, to controls. I believe that, at the present moment, some degree of regulation is both essential and timely. But the point I wish to make is that bureaucratic methods work too slowly in an industry geared largely for exports yet reacting swiftly and sensitively to movements in raw material markets open to world operations. The present practice, whereby export prices, applied to fully or semi-manufactured products, are recommended to bear the cost of heavy subsidy to the utility programme at home is, in effect, driving up world wool prices (and this is a point which I wish particularly to stress) against the utility programme, to the disadvantage of the domestic consumer. It means that United Kingdom wool users are being held in a strait-jacket of Governmental regulation on prices. They have had to stand by and let necessary wool supplies pass on auction to other countries—wool supplies which should have been secured to supply future clothing requirements of the United Kingdom population, at prices substantially less than the higher price now being paid. Now, large production has been lost by the stoppage, and this has contributed very much to the need of these figures being published. It seems to me to be essential that if this industry is to avoid the very serious situation to which I have drawn attention, there shall be allocated to wool-combing, which is a process steam-using section of industry, allocations of coal, for a period at least, which will cover their requirements. And let that action be swift, otherwise lost production may soon be perilous to the succeeding sections of the industry,

797
dependent on wool tops, which will be brought to a partial standstill. That in turn will affect the garment industry in which a large labour force is employed.
I would presume, with your Lordships' permission, to give one additional note of warning, and that is with regard to Canada. So far as Canada is concerned encouragement has been given for her industry to be geared largely to supplies of semi-manufactured materials from this country for clothing her population. At the present moment we have placed a complete embargo on exports of semi-manufactures to Canada. The result of this, may well be that Canada's machinery will be brought into a dangerous position, if not to a standstill, with a very adverse effect on employment. I submit that in view of the extremely generous treatment which Canada has extended to us in the matter of food supplies it would be dangerous to disregard this matter.
It is of vital importance, I suggest, to keep the wool-combing section of the industry employed, and so to prevent further deterioration of the position. That is the feeling which has stimulated me to put clown this question. To summarize, urge that there should be early action to publish the statistics of stocks of wool tops, and as soon as possible, also, of production and consumption. I hope that the noble Lord will be able to assure me that that is going to be done. In addition I would ask that he should convey to my right honourable friend the President of the Board of Trade the recommendations that there should be an early recasting or the utility price structure and that there should be an allocation forthwith, for a period at least, of coal supplies to this small section of the wool textile industry. With that explanation, I beg to put the question standing in my name.
LORD CHORLEY: My Lords, I am afraid that the noble Lord will be a little bit disappointed because there are no recent figures of wool stocks. They are not available. My right honourable friend the President of the Board of Trade hopes shortly to bring up to date the figures which were published in the Board of Trade Journal on May 18, 1946, showing the production and consumption. The noble Lord has raised a number of points with regard to the correlation of home prices of wool crops as used in the utility trade and the prices for export
798
products, and in regard to the position as between this country and Canada. I can assure the noble Lord that these matters are very well known to my right honourable friend and they are under constant consideration. That, I am afraid, is as far as I can go, but I will bring to the attention of my right honourable friend the observations which have been made on the subjects of these figures, and in due course the figures relating to the production consumption will be published.

SMALL SAVINGS
7.12 p.m.
LORD HAWKE LORD HAWKE asked His Majesty's Government what is the target for small savings for 1946–47, and up to date what has been the figure of net savings achieved, excluding accrued interest? The noble Lord said: My Lords, your Lordships' appetite is never very great for figures, particularly at ten minutes past seven, and I do not propose to produce any. One of the foundations of the greatness of our country was thrift, and I believe that every political Party is united in that we must endeavour to inculcate thrift among the only people who have the wherewithal to exercise thrift in these days. My purpose in putting down this question was twofold: First of all, to discuss what had been the achievements of the National Savings Campaign in the financial year just about to close; secondly, to make a suggestion with regard to the next financial year. Unfortunately, I cannot see the figures which the noble Lord is going to give before commenting on them, but the Press has come to the rescue.
In the course of the last day or two I have seen figures purporting to represent the figures of the Savings Campaign up to date. From these it seems clear that the target given to the Savings Campaign has now been achieved, but I submit that such a victory is a purely Pyrrhic victory, because the target took no account of withdrawals or encashments, and these withdrawals have been extremely heavy. There is no record of what the figure of encashment might have been expected by the Chancellor of the Exchequer, but I have little hesitation in suggesting that the figure which has resulted is a bigger one than he expected, and that the National Savings Movement achievement is, as I have said, a purely

799
Pyrrhic victory. For the financial year just about to commence I do earnestly suggest to His Majesty's Government that some method should be found of setting a realistic target, and one which takes into account the incomings as well as the outgoings. I fully appreciate the administrative difficulties. If you are to have competition between one village and the next it is extremely difficult to take account of withdrawals. I absolutely appreciate all those points, but I do submit that the British public are being fooled if it is led to believe that the Savings Campaign has reached its target when, in fact, half of what has been put in has been taken out again. I beg to ask the question standing in my name.
LORD AMMON: My Lords, I hope the noble Lord will be pleased with my answer, so far as the amount that has been saved is concerned. I think that perhaps he might even be agreeably surprised that the amount of encashment and withdrawals are not as much as he expected. At the National Savings rally in the Albert Hall on April 2, 1946, the National Savings Movement undertook, in response to the Chancellor's challenge, to raise £520,000,000 in small savings in the financial year 1946–47. For this purpose, small savings consist of purchases of National Savings Certificates and Defence Bonds, and increases in the balances of depositors in the Post Office and Trustee Savings Banks. On March 13 Sir Harold Mackintosh, the Chairman of the National Savings Committee, reported to the Chancellor that the target of £520,000,000 had been reached, and that the Movement expected to raise a total of £550,000,000 by the end of the financial year.
Particulars of both purchases and withdrawals of small savings, with separate figures of accrued interest, have been published quarterly by the National Savings Committee in the course of the year. The Committee's statement of gross and net savings, for the nine months to December 31, was issued early in January; a copy of this statement, which involves tables of figures, is being sent to the noble Lord and will appear in the OFFICIAL REPORT later. The figures for the complete year will be published by the Committee at the end of March.

CONSOLIDATED FUND (No. 1) BILL.
Brought from the Commons, read Ia.
CERTIFICATES FROM EXAMINERS.
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 following Bill:
COTTON INDUSTRY WAR MEMORIAL TRUST.
The same was ordered to lie on the Table.

SUNDAY ENTERTAINMENTS ACT, 1932.
Orders made by the Secretary of State for the Home Department extending Section I of the Act to the

City of Sheffield;

County Borough of Halifax;

Urban District of Church Stretton;

Rural District of Hambledon:
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.
Supreme Court of Judicature (Consolidation) Act, 1925—Rules of the Supreme Court (No. 2) 1947, dated 18th March, 1947, made by the Lord Chancellor: Laid before the House (pursuant to Act).

  SERVICES' LAND REQUIREMENTS.
  SERVICES' LAND REQUIREMENTS.
  BRITISH DEAD IN GERMANY.
  BRITISH DEAD IN GERMANY.