Sitting of 6 December 1950

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

  DOUBLE TAXATION RELIEF
  The VICE-CHAMBERLAIN OF THE HOUSEHOLD (Mr. POPPLEWELL) reported His Majesty's Answer to the Addresses, as follows:
  I have received your Addresses praying that the Double Taxation Relief (Taxes on Income) (Ceylon) Order, 1950; The Double Taxation Relief (Taxes on Income) (Sarawak) Order, 1950; and the Double Taxation Relief (Taxes on Income) (Brunei) Order, 1950, be made in the form of the respective drafts laid before Parliament.
  I will comply with your request.

PRIVATE BUSINESS
  ROSS AND CROMARTY COUNTY COUNCIL (KYLE OF LOCHALSH FISHERY PIER) ORDER CONFIRMATION BILL
  "to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Ross and Cromarty County Council (Kyle of Lochalsh Fishery Pier)," presented by Mr. McNeil; and ordered (under Section 7 of the Act) to be considered Tomorrow, and to be printed. [Bill 49.]
ORAL ANSWERS TO QUESTIONS
  UNITED NATIONS

    Permanent Staff
    Brigadier Raynerasked the Secretary of State for Foreign Affairs how many of the permanent staff of the United Nations secretariat are subjects of the Union of Soviet Socialist Republics, her satellite States or of China; and what proportion that figure is of the whole staff.
    The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies): On 25th September, 1950, the permanent staff of the United Nations at the New York and overseas offices of the secretariat included 19 citizens of the Soviet Union, 66 from States under her control, and 62 from China. Together this represents 11.4 per cent. of the total staff.
    Brigadier Rayner: Is it not, therefore, safe to presume that the Soviet Union has a fairly efficient espionage organisation at Lake Success?
    Mr. Davies: The United Nations is an international organisation. It was arranged that there should be reasonable geographical representation among the staff. In actual practice, according to the percentages of the contributions to the budget on which the geographical representation is partly based, the Soviet Union and its satellites are under-represented.

    Broadcasts, China
    Mr. Walter Fletcherasked the Secretary of State for Foreign Affairs what steps he is taking, by means of the broadcasting stations in Ceylon, Singapore and Hong Kong, to make known to the Chinese people that the United Nations have no designs on any territory belonging to China.
    Mr. Ernest Davies: The British Broadcasting Corporation's Far Eastern Service broadcasts regular reports of proceedings in the United Nations. This service can be heard direct in China and is relayed by the British Far Eastern broadcasting station at Singapore and by Radio Ceylon. I can assure the hon. Member that attention has been given in these programmes to coverage of recent statements made in this House and by British representatives at Lake Success reassuring the Chinese people regarding the intentions of the United Nations.
    Mr. Fletcher: May I ask the hon. Gentleman two questions? First, what steps are being taken and what machinery exists to co-ordinate this with what the Americans and the French are saying? Second, will translated copies of these broadcasts be put into the Library for Members on all sides of the House who have shown great interest in this question to see?
    Mr. Davies: There is considerable consultation between us and the United States over their broadcasting overseas. I will certainly look into the question of placing copies in the Library and, if it is possible, I will see it is done, if it is not already done.
    Mr. Godfrey Nicholson: In what Chinese dialects are these broadcasts given?
    Mr. Davies: They are done in native languages, one of which is Kou-Yu.
    Mr. Nicholson: While appreciating the hon. Gentleman's affectionate approach, may I remind him that there are a good many Chinese dialects, the speakers of which do not understand each other?
    Mr. Julian Amery: May I ask a question relating to the placing of copies of the transcripts of broadcasts in the Library? Will the hon. Gentleman also consider—I appreciate that this is a slightly different question—putting in the Library copies of the monitorings of the broadcasts from the Chinese radio, which contain many rather interesting indications of what the attitude of the Chinese Government may be?
    Mr. Davies: I believe that the monitoring report of the B.B.C. is already available in the Library.

  AUSTRIA

    U.S.S.R. Action
    Professor Savoryasked the Secretary of State for Foreign Affairs whether he has received a reply to the protest, which he made on 10th November, to the Soviet Government against their attempt to prevent police from maintaining order during the recent Communist-inspired disturbances in Austria.
    Mr. Ernest Davies: No. Sir.
    Professor Savory: What do His Majesty's Government intend to do in the meantime to prevent the Communists being armed by the Soviet authorities with a view to riot? Surely we can do something now.
    Mr. Davies: We have no evidence that the action which the hon. Member mentioned has taken place but, in any case,
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    we have made our protest and we hope that due note will be taken of it in the appropriate quarters.

    South Tyrol
    Professor Savoryasked the Secretary of State for Foreign Affairs whether he is satisfied that the terms of the treaty with Italy, to which His Majesty's Government was a party, have been carried out so far as the rights, secured under Annex 4, of the German-speaking population of South Tyrol are concerned.
    Mr. Ernest Davies: I have no reason to suppose that the Italian Government are not carrying out their obligations in this regard.
    Professor Savory: Is the hon. Gentleman not aware of the obstacles being placed in the way of the carrying out of Article I, paragraphs b and d, relating to the parity of languages and equality of employment? I am informed that every obstacle is being placed in the way of carrying out the provisions of these paragraphs.
    Mr. Davies: This matter has been investigated further. My understanding is that the position has very much improved, that relations between Italy and Austria in this regard are very much better and that there is little dissatisfaction at the present time.
    Professor Savory: I have evidence every day.

    BALTIC STATES
    Professor Savoryasked the Secretary of State for Foreign Affairs whether, in view of the refusal of His Majesty's Government to recognise de jure the annexation by the Union of Soviet Socialist Republics of the three Baltic States of Estonia, Latvia and Lithuania, he is prepared to bring before the Security Council of the United Nations the present condition of the inhabitants of those three States, large numbers of whom are being deported.
    Mr. Ernest Davies: No. Sir. The matter does not fall within the competence of the Security Council since no threat to international peace or security appears to be involved.
    Professor Savory: Will His Majesty's Government not support his Excellency the Lithuanian Ambassador in Washington in the protest which he is now making to the President of the General Assembly of the Society of Nations in order to have an investigation carried out into these deportations, which are taking place by the hundred thousand, and the substitution of Asiatics for natives?
    Mr. Davies: I am not sure that the hon. Gentleman does not go a little beyond the facts, because I am not aware of some of the facts which he has stated. I doubt very much whether it would serve any useful purpose if we associated ourselves with the protest in the way he has suggested.
    Professor Savory: There is ample evidence here of all the facts.
    Mr. Molson: Does the Under-Secretary mean that His Majesty's Government have no information about deportations which are taking place?
    Mr. Davies: No, Sir. I do not suggest that we have no evidence of that matter, but no evidence on some of the matters to which the hon. Member for Antrim. South (Professor Savory), refers.

    ANGLO-YEMENI CONFERENCE
    Mr. Dodds-Parkerasked the Secretary of State for Foreign Affairs whether any results have followed from the recent Anglo-Yemeni Conference.
    Mr. Ernest Davies: As stated in the Press communiqué issued on 12th October at the conclusion of the Anglo-Yemeni Conference, certain proposals have been submitted to the two Governments, further details of which will be released when the two Governments have considered their delegations' reports. No communication on the subject has yet been received from the Yemeni Government and it is, therefore, not yet possible to give any further information.
    Mr. Dodds-Parker: Will the Minister make certain that, during these negotiations, the interests of those sheiks under the protection of His Majesty's Government are safeguarded?
    Mr. Davies: I will look into that, but no negotiations are going on at present. We are waiting for the views of the Yemeni Government, arising out of this agreement.

    GERMANY (CONTROL COMMISSION OFFICIALS)
    Mr. Turtonasked the Secretary of State for Foreign Affairs whether he has now investigated the discrimination exercised against Lieut.-Colonel John Stevenson, of Hamburg, following his complaints regarding the differential treatment between high-ranking and subordinate officials used by the Control Commission in the matter of prosecutions for serious offences.
    Mr. Ernest Davies: My right hon. Friend has investigated Lieut.-Colonel Stevenson's complaints and is satisfied that no discrimination has been shown against him by the Control Commission.
    Mr. Turton: In view of the great seriousness of the position and the unsatisfactory nature of the reply, I beg to give notice that I shall attempt to raise this matter on the Adjournment at an early opportunity.

    ANGLO-IRAQI TREATY
    Surgeon Lieut.-Commander Bennettasked the Secretary of State for Foreign Affairs if he will make a statement on the recent official announcement of the Premier of Iraq that this country's treaty of alliance with Iraq has become obsolete; and if he was consulted before this announcement was made.
    Mr. Ernest Davies: According to my information, the statement was made by the Iraqi Prime Minister on 28th November at the first general conference of his political party. It does not call for any statement on the part of His Majesty's Government, who were not consulted before it was made.
    Surgeon Lieut.-Commander Bennett: Does the hon. Gentleman officially hold the view that the statement was not made? Is it not effective, therefore, in our relations with Iraq?
    Mr. Davies: I am sorry that the hon. and gallant Gentleman did not quite hear me. I said that the statement was made by the Iraqi Prime Minister at a meeting of his political party.
    Surgeon Lieut.-Commander Bennett: It is not officially recognised?
    Earl Winterton: As one of the oldest friends of Nuli Pasha Es Said, who is a former brother officer of mine, may I ask the hon. Gentleman, in view of the seriousness of this matter, whether he cannot arrange for conversations between the British Ambassador and Nuli Pasha Es Said, who has for so many years been a good friend of this country, to see whether the matter cannot be resolved?
    Mr. Davies: I am sure that my right hon. Friend will take into consideration the suggestion which the noble Lord has made.
    Mr. Pickthorn: Do the Under-Secretary's replies mean that His Majesty's Government have made no inquiries since they heard this report?
    Mr. Davies: No, Sir. They do not. Our ambassador has reported to us on this speech and we have made inquiries but, in all the circumstances, we have decided that, as this was a speech made to a political party, it was not addressed to His Majesty's Government and that there was no need for any action.

    ATOMIC ENERGY (ANGLO-AMERICAN CONSULTATION)
    Mr. Blackburnasked the Secretary of State for Foreign Affairs if he will now publish the terms of the agreement between His Majesty's Government and the United States of America concerning their partnership with Canada for the development of atomic energy and the use of atomic bombs.
    Mr. Harold Daviesasked the Secretary of State for Foreign Affairs what treaties or agreements are in existence between Great Britain and the United States of America about the exchange of information on the use and production of the atomic bomb.
    Mr. Ernest Davies: As stated on 20th October, 1949, co-operation between the
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    United Kingdom, Canada and the United States of America on atomic energy matters is not regulated by a formal agreement but by arrangements made from time to time by the Combined Policy Committee, which was set up in 1943 by the three Governments and which meets periodically in Washington.
    Mr. Blackburn: Is the Minister aware that, on a matter of most grave importance, that is an entirely and utterly inadequate answer? May we have an assurance that we have the right to be consulted by the United States of America in relation to the whole atomic energy programme and on every occasion upon which the atomic bomb is dropped in action? May I ask him for that explicit assurance, because we had that right in 1943 under the agreement between the right hon. Gentleman the Leader of the Opposition and President Roosevelt?
    Mr. Davies: I cannot understand why the hon. Gentleman is not satisfied with that answer, which was entirely a statement of fact, and why he is getting so excited over this matter, because my right hon. Friend the Prime Minister made it quite clear to the House in the foreign affairs debate last Thursday that, in his view, there should be prior consultation between those United Nations countries which are participating in the Korean incident before any action was taken in this matter.
    Mr. Blackburn: In view of the evasive nature of the reply I beg to give notice that I will raise this matter on the Adjournment at the earliest possible opportunity.

  KOREA

    Objectives (United Nations Resolutions)
    Mr. Niall Macphersonasked the Secretary of State for Foreign Affairs whether he will arrange, in conjunction with the Government of the United States of America and any other Governments concerned, for the publication of the directive given to General MacArthur as to his conduct of the campaign in Korea with particular reference to his mission in North Korea.
    Mr. Blackburnasked the Secretary of State for Foreign Affairs what representations were made by him to the

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    United States Government with relation to the instructions given to General MacArthur to advance into North Korea.
    Mr. Ernest Davies: I would refer hon. Members to the statement made by my right hon. Friend during the foreign affairs debate and to the answers I gave on 4th December. As previously stated, the objectives of General MacArthur have been laid down in United Nations Resolutions and there has been appropriate consultation.
    Mr. Macpherson: Is the hon. Gentleman not aware that the Resolutions provide not only for consultation but for advice, which must be of the nature of a directive; and, that being so, can he tell the House what advice the Interim Commission of the United Nations has given to General MacArthur?
    Mr. Davies: I think there might be a little misunderstanding as advice is not given to General MacArthur by the Interim Commission, as far as I am aware. The position is that, under those Resolutions, the delegation of the United Nations conduct of the campaign was to the unified command and the United States of America were asked to appoint a commander. It is in that respect that General MacArthur is acting.
    Mr. Driberg: Is it not the case that the position in which the United Nations Forces now find themselves must have been foreseen by our own military advisers at the beginning of the affair? If so, was no advice or warning given?
    Mr. Davies: I think that if the present position in which we find ourselves had been foreseen at the beginning of the affairs it may be that the situation would not have developed in the way that it has.
    Mr. Paton: Is it not the case that the tremendously important political implications could not possibly have been foreseen in a changing situation, and is not the real weakness the fact that no machinery was created by the United Nations by which effective political decisions could be taken rapidly and made effective with the Commander?
    Mr. Davies: I do not believe that it would serve any useful purpose if we started discussing the question of political
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    control at the present time. When my right hon. Friend the Prime Minister is now discussing these matters in Washington, I think the less said the better.
    Mr. Blackburn: Is it not perfectly plain that General MacArthur has explicitly obeyed his instructions throughout, and that no representations were made by His Majesty's Government upon which General MacArthur could possibly have acted?
    Mr. Davies: I think I have made that position quite clear to the House already. General MacArthur has been acting within the Resolutions passed by the United Nations and we have no reason to suggest, nor do we wish it to be suggested, that he has gone outside the Resolutions of the United Nations.
    Mr. Henry Straussasked the Secretary of State for Foreign Affairs on what date and by what method the United Nations were informed that in the view of His Majesty's Government the forces of the United Nations should advance no further than the 38th Parallel.
    Mr. Ernest Davies: The hon. and learned Member is misinformed. His Majesty's Government jointly sponsored the General Assembly Resolution of 7th October which recommended inter alia that all appropriate steps be taken to ensure conditions of stability throughout Korea.
    Mr. Strauss: While, of course, I accept the absolute accuracy of that answer, may I ask the hon. Gentleman this question: Has he observed the statement last Sunday of the Minister of Defence, in which he said that the objectives of the United Nations in Korea had been limited and that we were to have gone up to the 38th Parallel? Can he say why the Minister of Defence made a statement which was quite untrue?
    Mr. Davies: I am aware that such a statement was made last Sunday. Any questions regarding speeches made by my colleagues should be addressed to the Prime Minister, and will be replied to in his absence by the Deputy Prime Minister.
    Mr. Strauss: Further to that—
    Mr. Speaker: The hon. and learned Gentleman is going right outside the original Question.
    Mr. Molson: On a point of order. Is it not the case, Sir, that one cannot put a Question with regard to a speech made by a Minister unless it is possible to ask whether that is the policy of His Majesty's Government? Is it not, therefore, impossible to get past the Table any Questions to the Prime Minister relating to the speech made by the Minister of Defence?
    Mr. Speaker: We had a good many Questions about that yesterday.
    Mr. Strauss: On that point of order. May I ask if the Under-Secretary was aware that I had put down my Question to the Prime Minister and that it was transferred by the Prime Minister's Department to the Foreign Secretary?
    Mr. Davies: That is perfectly true, but the Question which the hon. and learned Gentleman put down did not refer to the speech of my right hon. colleague.

    Casualties
    Squadron Leader Burdenasked the Secretary of State for Foreign Affairs what information he has received concerning casualties to the United Nations Forces in Korea; and if he will state the numbers of killed, wounded and missing in each of the national contingents.
    Mr. Ernest Davies: I have not received detailed information on casualties sustained by United Nations Forces as a whole. As regards United Kingdom casualties, I would refer the hon. and gallant Member to the answer given by my right hon. Friend the Minister of Defence on 29th November, and as regards United States casualties, to the figures published by the United States Defence Department.
    Squadron Leader Burden: Would the hon. Gentleman endeavour to obtain the figures and give them to the House and the country—our own casualties, the American casualties, and the Commonwealth casualties—before we rise for the Christmas Recess?
    Mr. Davies: I understand that a statement will be made shortly by the Minister of Defence, and I hope that that will include the figures asked for.
    Air Commodore Harvey: Will the hon. Gentleman say what steps the Govern-
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    ment have taken to keep themselves fully informed of the situation from time to time, and give an assurance that the House will be kept fully informed of the up-to-date situation?
    Mr. Davies: The assurance has already been given by the Lord President of the Council that the House will be kept informed as often as it is considered reasonable or practicable to do so; and, as I have said, a statement is likely to be made in the very near future.
    Mr. Eden: I accept that, but will the hon. Gentleman convey—that is, if he can still convey—to his right hon. Friend the wish that that statement should definitely include the most recent information about our own casualties?
    Mr. Davies: Yes, Sir, certainly.
    Mr. Emrys Hughes: Can my hon. Friend say what steps have been taken to prevent further casualties in North Korea? Does the Government realise that the time has come for a "cease fire"?
    Sir Herbert Williams: Will the hon. Gentleman say why the statement promised over a month ago in response to my Question on this very subject has not yet reached me?
    Mr. Davies: I thought that the hon. Gentleman was a most regular attendant at the House. A statement has been made since the date of that Question a month ago.
    Sir H. Williams: But the hon. Gentleman promised a statement to me.

    BRITISH GUIANA (YOUNG OFFENDERS)
    Mr. Patonasked the Secretary of State for the Colonies what provision is made for the institutional treatment of delinquents between the ages of 16 and 21 years in British Guiana.
    The Secretary of State for the Colonies (Mr. James Griffiths): None, Sir. The desirability of establishing a suitable institution is recognised, but the Government of British Guiana have not so far been able to afford the expenditure involved.
    Mr. Paton: Is my right hon. Friend aware that as far back as 1909, by the Detention of Young Offenders Ordinance

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    of that year, the Government were empowered to appoint such an institution and have not done so? Is it not time that a move was made in this matter?
    Mr. Griffiths: It is very desirable that it should be done as quickly as possible. There has been very rapid development of the probation system. The whole question has been discussed and the desirability of establishing a suitable institution is fully recognised.

  COLONIAL EMPIRE

    Punishments
    Mr. Patonasked the Secretary of State for the Colonies whether he will abolish capital punishment and corporal punishment for rape in British Colonies.
    Mr. J. Griffiths: Abolition of either type of punishment would, of course, require legislation in the territories where it exists. I will communicate with the Governors of the three territories concerned on the question of the capital penalty for rape. With regard to the abolition of corporal punishment for this offence, I would refer my hon. Friend to the written reply given to my hon. Friend the Member for Leyton (Mr. Sorensen) on 22nd November.
    Mr. Paton: Is my right hon. Friend aware that in November, 1949, the United Nations Assembly passed a resolution urging Great Britain and Belgium to abandon corporal punishment and whipping in their territories; and is it not desirable that our own practice in such matters should be brought into conformity with the practice of every other civilised country?
    Mr. Griffiths: I appreciate that, and, as I indicated in reply to my hon. Friend, I am communicating with the Governors.

    Indigenous Inhabitants
    Mr. Sorensenasked the Secretary of State for the Colonies how many committees have now been set up to study the requirements and circumstances of the indigenous inhabitants, as proposed in the Overseas Resources Development Act, 1948.
    Mr. J. Griffiths: The Corporation have not so far found that the appointment of any such committee is needed.
    Mr. Sorensen: Is it not laid down in the Act that these committees should be set up, and has not a long time elapsed since that Act was passed? In these circumstances, is nothing to be done to see that these committees are set up?
    Mr. Griffiths: I did not say that nothing was to be done, but that the Corporation find that, so far, the committees are not needed. No doubt they will watch the position and set them up if they find that they are needed.
    Mr. Sorensen: Is this proposal now found to be ineffective and useless?
    Mr. Griffiths: No, Sir. It has not been found to be necessary so far.

    Central Africa (Conference)
    Mr. Rankinasked the Secretary of State for the Colonies who are the officials of the Central African Council who will take part in the conference on Central African Federation in 1951; and if he will give an assurance that no unofficial person will be called to this conference.
    Mr. J. Griffiths: The Central African Council will be represented by its Chief Secretary. No unofficial person will take part in this conference except that the advice of an independent constitutional expert from the United Kingdom may be sought if this should be considered necessary.
    Mr. Rankin: I am sorry that owing to the din on both sides of the House I did not quite grasp all that my right hon. Friend said. Might I take it that he has given an assurance that no unofficial person will be at this conference, and that the delegation of those appointed to the Council have not yet been named?
    Mr. Griffiths: In my reply I said that no unofficial person will take part except that it may be found desirable to have the advice of an independent constitutional expert.

    West Africa (Co-operative Mission's Visit)
    Mr. Keelingasked the Secretary of State for the Colonies why the registrar of Co-operative societies of each of the three West African Colonies visited by the Co-operative Mission last year at the invitation of the Secretary of State was

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    absent from the Colony throughout the visit.
    Mr. J. Griffiths: The substantive registrars were on leave at the time, but had consultation with the Mission in this country.
    Mr. Keeling: Why did the right hon. Gentleman arrange this visit at a time when it was known that all the registrars would be on leave?
    Mr. Griffiths: It was not known at the time. I agree that it would have been very much better if it had been possible to arrange the leave times of the registrars so as to enable them to be present when the Mission presented itself.

    GAMBIA (POULTRY SCHEME)
    Mr. Crouchasked the Secretary of State for the Colonies what was the amount of food consumed during the last six months on the Gambia poultry farm; how much was produced in the Colonies; and how much imported from the dollar area.
    Mr. J. Griffiths: I would invite the hon. Member to refer to the Colonial Development Corporation, who are responsible for the management of the scheme.
    Mr. Crouch: Is the right hon. Gentleman aware that I addressed this Question originally to the Minister of Food, and was referred to the Secretary of State for the Colonies? I am now referred to another body.

  NORTHERN RHODESIA

    Executive Council
    Mr. Keelingasked the Secretary of State for the Colonies whether he will publish in the OFFICIAL REPORT the agreements of 1948 and 1949 between his predecessor and the unofficial members of the Executive Council of Northern Rhodesia, including the arrangement whereby the Governor is to call upon any such member who disagrees with his colleagues on a major issue to resign.
    Mr. J. Griffiths: Yes, Sir. I will circulate in the OFFICIAL REPORT the statements made with respect to these matters.
    Mr. Keeling: Is the right hon. Gentleman aware that one of these gentlemen who refused to resign was dismissed by the Governor on the instructions of the Colonial Office, and is he satisfied with that arrangement, which seems a very queer one?
    Mr. Griffiths: This was an arrangement made by my predecessor. The member in question was asked to resign because there had been a breach of the agreement. Perhaps the hon. Gentleman will await the further full statement which I am making in the OFFICIAL REPORT.
    Earl Wintertn: Is the hon. Gentleman aware that, even since the time of his predecessor, there has been a great increase in the status of the Colony and much interest taken in it by Europeans and Africans alike? Will he consider doing away with this utterly reactionary proposal, which his predecessor put into operation and which ill-becomes a Socialist Government?
    Mr. Griffiths: I am circulating a very full statement in the OFFICIAL REPORT, which indicates the reasons which prevailed on my predecessor to accept this arrangement. I appreciate the point put; perhaps there will be an opportunity later to consider the matter.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman say whether there is any similar rule in this country?
    Following are the statements:
    1. Statement released on 17th August, 1948:
    "Discussions have recently taken place in London between the Secretary of State and a delegation from the Unofficial Members of the Legislative Council of Northern Rhodesia on the subject of the proposals made by the Unofficial Members regarding the reform of the Constitution. The Governor of Northern Rhodesia, the Secretary for Native Affairs and two Africans selected by the African Representative Council of Northern Rhodesia also took part in the discussions. It was agreed that the proposals should not be proceeded with. At the same time it was considered most desirable that members of the non-official community should play a greater and more direct part in the administration of Northern Rhodesia.
    "It is accordingly proposed that the Executive Council should include four Unofficials, of whom one would, as at present, be one of the Members of Legislative Council nominated to represent African interests. The remaining three Unofficial Members would be appointed from among the elected Members of Legislative Council. One or two of the four Unofficial

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    Members would be given responsibility for groups of departments, retaining their seats as elected Members in Legislative Council and not becoming officials.
    "These proposals leave the door open for the advancement of Africans to appointment to the Executive Council when they are ready for this. Africans will this year for the first time have direct representation on the Legislative Council of Northern Rhodesia.
    "Under the new arrangements the views of the Unofficial Members would carry the same weight in Executive Council as they do in Legislative Council, subject to the Governor's reserve powers.
    "It was also agreed that in future the maximum statutory duration of the Legislative Council of Northern Rhodesia should be five years as was proposed in a Motion which was carried in the Legislative Council of Northern Rhodesia on 24th June, 1948."
    2. Statement released in April 1949:
    "The Secretary of State has agreed, in consultation with His Excellency the Governor and the Unofficial Members of the Legislative Council of Northern Rhodesia, that the conclusion reached in the London discussion last July that the views of the Unofficial Members of the Executive Council will carry the same weight in Executive Council as they do in the Legislative Council, subject to the Governor's reserve powers, should he understood to mean that, without prejudice to the constitutional position of the Executive Council, the Governor will accept the advice of the Unofficial Members of the Executive Council when the four Unofficial Members are unanimous, except in cases where he would feel it necessary to use his reserve powers.
    "At least one of the Unofficial Members of the Executive Council must always be a representative of African Interests.
    "In matters where the Governor is doubtful whether the unanimous opinion of the Unofficial Members of the Executive Council is supported by the Unofficial Members of the Legislative Council, the views of the Unofficial Members of the Legislative Council would be sounded by way of a Motion in the Legislative Council or by discussion at an informal meeting of all Members of the Legislative Council."
    3. Statement released on 6th January, 1950:
    "The Governor must retain ultimate power to make decisions with regard to resignations from the Executive Council just as he does with regard to appointments to it. In practice he appoints Unofficial Members* to Executive Council on the advice of their colleagues on Legislative Council, but will be entitled not to accept this advice for very strong reasons. The same principle should apply as regards resignations.
    "The Elected Members should ask for the resignation of one of their members from Executive Council, and the Governor should agree to call upon the individual to resign, only in exceptional circumstances, when the Member had lost the confidence of his colleagues through major differences of such a
    * This does not include the member nominated to represent African interests.
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    character as to interfere with the smooth and efficient working of the two Councils.
    "In addition the request should be made to the Governor only if a two-thirds majority of the Elected Members (at present seven out of ten) favour resignation.
    "The Elected Members should accept the importance of continuity and independent judgment on Executive Council, and should agree that it would be necessary for the Governor to bear this in mind in working his side of the arrangement."

    African Representative Council
    Mr. John Hyndasked the Secretary of State for the Colonies what is the composition of the African Representative Council in Northern Rhodesia; how its members are chosen; and whether, when it submits nominations for African representation in the Legislative Council, it may submit the names of any Africans, or only of its own members.
    Mr. J. Griffiths: This Council is composed of the Secretary for Native Affairs, who is ex officio its President, and 29 members, all of whom are Africans, representing the various Provinces of Northern Rhodesia. The members are elected from and by the delegates to the respective African Provincial Councils, with the exception of those from the Barotse Province who are nominated by the Paramount Chief in consultation with the Provincial Commissioner. The Council may select African members for appointment to the Legislative Council only from its own members.
    Mr. Hynd: Does not my right hon. Friend consider, in view of the difficulty of finding qualified applicants for these responsible administrative posts, that it would be an advantage to enable this Council to nominate qualified Africans from outside its own members?
    Mr. Griffiths: I understand that the reason why they are confined is because these are Africans appointed by their own people and, therefore, thought to be the best applicants for the Legislative Council.

  NIGERIA

    Railway (Report)
    Mr. Keelingasked the Secretary of State for the Colonies whether his attention has been drawn to the official report on the Nigerian Railway by a British

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    railway official, which states that engine failures in proportion to mileage were four and a half times greater in 1949 than 10 years earlier, and that repair output had declined by more than half; if he will state whether this deterioration has continued in 1950; and what are its causes and the proposed remedies.
    Mr. J. Griffiths: The causes are fully set out in the report itself, in paragraphs 63 to 71 and 134 to 163. In recent months the supply of spare parts has considerably improved, and there has been a small improvement in the figures of repair output and engine failures over the past year. In so far as the position is due to technical inefficiency and low output in the workshops, the Nigerian Government and railway administration are making vigorous efforts to effect remedial measures.
    Mr. Keeling: As this report, which reveals a deplorable situation, has not been published in this country, would the right hon. Gentleman consider giving a full reply to my Question in the OFFICIAL REPORT? Is he aware, for instance, that one of the main causes which the British official found was the dreadful decay in discipline?
    Mr. Griffiths: I will consider whether a statement can be made in the OFFICIAL REPORT, but it would be very long. I appreciate the point of the second part of the hon. Gentleman's supplementary question. Consultations are now taking place between the Government and the trade unions, whose aid we are seeking to remedy some of these matters.
    Mr. Harrison: Will the right hon. Gentleman, in judging this position, bear in mind the considerable shortage of both locomotives and locomotive parts not only in this particular part of the world but also in this country?
    Mr. Griffiths: Yes.
    Mr. Lennox-Boyd: Would not the simplest way be for the right hon. Gentleman to publish the report in question?
    Mr. Griffiths: I think that the report can be made available. If it is not already available in the Library, I will see that it is made available.

    Settlement Scheme
    Mr. James Johnsonasked the Secretary of State for the Colonies (1) whether he will make a statement on the progress of the Bamenda-Cross River Calabar Settlement Scheme in Eastern Nigeria, particularly on the number of families settled; the numbers who have been able to make their holdings pay; and the numbers who are unable to meet their financial obligations;
    (2) to what extent the area occupied by the Bamenda-Cross River Calabar Settlement Scheme in Eastern Nigeria has been transferred for plantation production; what acreage is to remain for settlement; what part the settled families are to play in the plantation scheme; and whether he is satisfied that a policy of small scale settlement is desirable in this area.
    Mr. J. Griffiths: I have asked the Acting Governor for a progress report on this scheme and will write to my hon. Friend when it is received.

  MALAYA

    Rubber (Export Duty)
    Mr. N. Macphersonasked the Secretary of State for the Colonies what is the result of the discussions that have taken place between the Government of the Federation of Malaya and the rubber interests regarding the proposed new export duty; what final form the duty is to take; how far the proceeds are to be devoted to the welfare of the industry as a whole, how far to the cost of the emergency and how far to other purposes; and whether he will specify those other purposes.
    Mr. J. Griffiths: An announcement was made yesterday by the Federation Government, the text of which I will circulate in the OFFICIAL REPORT. In addition to the new scale of export duty, a cess is to be levied when the price of rubber exceeds 60 cents a pound, the proceeds of which will be paid into a special fund to be devoted to replanting and new planting with high-yielding varieties of rubber. There will be further consultation with the rubber producers regarding the method of disbursement from this fund. The proceeds from the rubber

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    export duty itself will be paid into general revenue and will not be reserved for any specific purpose.
    Mr. Macpherson: Does the right hon. Gentleman not realise the inadvisability of depending for revenue on the tax of a product liable to such very wide price fluctuations? Would it not be better to treat this as a capital amount?
    Mr. Griffiths: I appreciate the weakness of a fiscal system which depends so much on fortuitous increases in prices. I have been discussing with the High Commissioner what further steps can be taken to broaden the basis of taxation.
    Mr. W. Fletcher: How will the right hon. Gentleman deal with the question of assisting replanting by Asiatic smallholders, whose problems are totally different from those of the big estates which have spare land available?
    Mr. Griffiths: The question of how this fund will be disbursed is to be discussed with the industry, and the question of how it can be disbursed to the smallholders will be one of the important problems to be considered.
    Mr. Harrison: Does the announcement made yesterday mean that there will be an overall reduction in the tax collected?
    Mr. Griffiths: No, Sir. It means a reduction from the original proposal put forward, but it will be an increase over the amount previously obtained.
    Mr. Gammans: Is this new arrangement regarded as satisfactory by most of the interests affected by it?
    Mr. Griffiths: I hope so. I can only repeat what I said earlier, that it is most essential, especially perhaps in these times of very temporary prosperity, that as much of the money as possible should be available to the Government and people of Malaya.
    Mr. Lennox-Boyd: Is there not all the difference in the world between the situation upon which the right hon. Gentleman expressed some comments a week ago and the new situation arrived at yesterday? Is not that new situation as a result of consultation with interests which should have taken place before the first announcement was made?
    Mr. Griffiths: There was some consultations before the first announcement was made, and I made a statement about the consultations which had taken place.
    Mr. W. Fletcher: In view of the inadequate reply given by the Minister and the statement he made at the end of his reply, I beg to give notice that I shall raise the matter on the Adjournment.
    Following is the announcement:
    >Rubber Export Duties
    The arrangements outlined below and the illustrated attached appendix will come into force on 1st January, 1951, subject to modifications stated in paragraph 5. They have been determined in the light of discussions held by the Government with representatives of the Rubber Industry.
    2. Orders under the Customs Proclamation will be made for collection of:
    (i) A duty to be calculated:
    (a) according to the formula 1.55 P-63 over 10 when price (P) exceeds 60 cents per pound,
    (b) at 5 per cent. ad valorem, when the price does not exceed 60 cents per pound.
    (ii) A cess, the proceeds of which will be made available to the industry for replanting and new planting, calculated according to the formula 0.45 P-27 over 10, when price (P) exceeds 60 cents per pound.
    (iii) The cess, the proceeds of which are payable to the Malayan Rubber Fund.
    Calculations in respect of (i) and (ii) will he taken to the nearest one-eighth of a cent.
    3. The proceeds of the cess to be made available for replanting and new planting (paragraph 2 (ii) above) will be paid into a separate fund and held in trust until a satisfactory method of disposing of it has been worked out in consultation with representatives of the Rubber Producers. It is intended to suspend the collection of this cess as soon as a satisfactory scheme has been worked out for making similar deductions at the source (i.e. when rubber is first sold) and passing the credit for such deductions direct to individual producers on production of satisfactory proof that the money will be spent on replanting and new planting. Government will give every assistance in the formulation of such a scheme.
    4. The method of determining duty will be to announce, every Thursday in the Government Gazette, the basic price for that day and the six days following (the first announcement will, however, be made on Monday the 1st January, 1951, for that day and the nine days following). This basic price will be the average noon price for Number 1 B.S.S. f.o.b. in Singapore for each of the working days in the fortnight immediately preceding the date on which announcement was made.
    5. During the period 1st January, 1951, to 4th April, 1951, the total rate of duty plus replanting cess will be 20¼ cents per pound

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    (in proportion 16⅜ to 3⅞). If, however, for any week during the same period the average price announced in respect of that week and the preceding week should yield a lower figure than 20¼ cents per pound, the lower figure will be adopted for that week. For these purposes the period 1st January, 1951–10th January, 1951, inclusive, will be counted as one week.
    6. Forward contracts for 1951 claimed to have been made bona fide prior to 24th September, 1950, will he examined by a special committee. Arrangements for this committee and for submission of claims have already been announced. Where a claim is admitted rubber concerned will attract duty at the new rate calculated on the price current at the time when contract was made. This current price will be determined as follows:
    (i) When gazetted price for the week during which contract was made is 60 cents or less, the gazetted price will be taken to be the current price;
    (ii) when the gazetted price for the week during which the contract was made is more than 60 cents, then 10 per cent. will be remitted from that price, provided that such remission in no case reduces the prices below 60 cents.
    7. The rubber industry has been invited to consider the possibility of further improving the mechanics of imposition and any representations made by them in this connection will receive the careful and sympathetic consideration of the Government.

    APPENDIX (all figures are of cents per pound).

    Price

    (i) Duty

    (ii) Replanting and New Planting

    Total of (i) and (ii) (excluding Malayan Rubber Fund Cess)

    50

    2½

    Nil

    2½

    60

    3

    Nil

    3

    70

    4½

    ½

    5

    80

    6⅛

    ⅛

    7

    90

    7⅝

    1⅜

    9

    100

    9¼

    1¾

    11

    110

    10¾

    2¼

    13

    120

    12½

    2¾

    15

    130

    13⅞

    3⅛

    17

    140

    15⅜

    3⅝

    19

    150

    17

    4

    21

    160

    18½

    4½

    23

    170

    20

    5

    25

    180

    21⅝

    5⅜

    27

    190

    23⅛

    5⅞

    29

    200

    24¾

    6¼

    31

    And so on.

    Police Lieutenants
    Air Commodore Harveyasked the Secretary of State for the Colonies how many police lieutenants have been approved for the Malayan establishment; and how many have arrived in Malaya.
    Mr. J. Griffiths: The authorised establishment is 680 and 495 are now in Malaya.
    Air Commodore Harvey: In the light of the present difficulties of South-East Asia generally, does the right hon. Gentleman think that the figure is high enough, and will he say when the remainder of those to go are expected to arrive?
    Mr. Griffiths: The question of whether the total figure is sufficient has been considered in recent talks I have had. We are doing everything we possibly can to fill all the vacancies as quickly as possible.

    Stores (Shipment)
    Mr. W. Fletcherasked the Secretary of State for the Colonies what has been the average delay between receipt of indents and despatch of goods in the case of warlike and other stores asked for by Malaya for the six months ended 31st October, 1950; and what was the maximum delay in any single case.
    Mr. J. Griffiths: The time taken before shipment of general stores for the Federation Government cannot readily be averaged, because of the large number of separate indents (nearly 1,000), the varied nature and importance of these stores, and the fact that delivery in some cases extends over a period. In the case of warlike stores, the average period between receipt of indent by the Crown Agents for the Colonies and shipment of the complete consignment was about four months, the maximum period will not exceed six months. It will be appreciated that the Federation Government, in placing its orders, gives as long notice as is practicable. The period which elapses between the receipt of the indent and the delivery of the goods is not, therefore, necessarily an indication of delay in supply.
    Mr. Fletcher: In view of the very urgent need for a good many of these stores to be supplied at once, is the right hon. Gentleman satisfied that the Office of the Crown Agents is imbued with a sufficient sense of urgency, because from reports from Malaya there seem to be frequent and considerable hold ups of very important warlike stores?
    Mr. Griffiths: I have indicated to everyone concerned that these orders must be given very urgent attention. It is absolutely essential that they should be supplied as quickly as possible.
    Mr. Charles Ian Orr-Ewing: Has the right hon. Gentleman considered engaging some of the charter air companies to take these urgent warlike stores to the theatres of war where they are urgently needed?
    Mr. Griffiths: I should not like it to be thought that there is any long delay. There have been some cases of delay, but on the whole the position has been fairly satisfactory.

  EAST AFRICA

    Locusts
    Mr. W. Fletcherasked the Secretary of State for the Colonies whether he is satisfied that adequate steps have now been taken to deal with the threat to East African agriculture from swarms of locusts.
    Mr. J. Griffiths: As the answer is rather long, I will, with permission, circulate a statement in the OFFICIAL REPORT.
    Following is the statement:
    On the basis of present information about the desert locust plague, I am satisfied that adequate steps have now been taken to deal with the threat to East African agriculture. The steps which have been taken include the following:—

    1. A Desert Locust Control Organsiation has been constituted to carry out control measures in infested areas to the North of British East Africa and in the Arabian Peninsula, and, if necessary, in the British East African territories. The headquarters of the Organisation are in Nairobi from where it directs the movement and operations of a large number of control teams. Brigadier Gamble, until recently Chief Administrator, Somalia, has been appointed Chief Locust Officer in charge of the Control Organisation, which is advised on the scientific aspects of the campaign by the staff of the Desert Locust Survey, a permanent research and reconnaissance organisation in Nairobi, and also by Dr. B. P. Uvarov, Director of the Anti-Locust Research Centre in London.

    2. Over 100 Locust Officers have been recruited and are at present employed on the campaign. Should further officers be required, no difficulty is anticipated in securing them.

    3. The vehicle resources of the Control Organisation are being supplemented by 130 vehicles of different types, together with a further 57 specially equipped for operation in desert areas. The last-mentioned vehicles are being obtained from the United States through the Economic Co-operation Administration. There is a temporary world shortage of insecticides but steps have already been taken to meet requirements and the efficacy of the control operations will not be affected. There is also a local shortage of bran, which is used for bait but everything possible is being done to make good deficiencies.

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    4. The cost of the campaign from the 1st October, 1950, to 30th September, 1951, is estimated at £1,222,000, and plans have been made for control measures on the same scale for at least a further two years. The cost will be shared by a number of Governments in the affected area. His Majesty's Government have agreed to contribute up to £331,500 from Colonial Development and Welfare funds in the first year of the campaign.

    5. Everything possible is being done to ensure the closest co-operation between all countries concerned. A conference was held in Nairobi last July, at which co-ordination of the control measures against the desert locust was discussed. This conference was attended by representatives from all the British territories concerned, and from Italy, Egypt, the Anglo-Egyptian Sudan and the Yemen. A further conference was convened by the Government of India in November at New Delhi, at which His Majesty's Government and the Desert Locust Survey were represented.

    Girl Students (Training)
    Mr. Alportasked the Secretary of State for the Colonies what opportunities for further training are offered to African girl students leaving junior secondary schools in East African territories.
    Mr. J. Griffiths: There are Government and Government-aided institutions for training African women teachers, nurses, social welfare workers, and teachers of domestic science. If the hon. Member requires any further or more detailed information, it may be necessary to ask the Colonial Governments concerned for this.
    Mr. Alport: Is the right hon. Gentleman aware that the figures of trained female African employees in the Government Service he sent me on 15th November show that the existing facilities are totally inadequate? Has he any policy for improving these facilities?
    Mr. Griffiths: They are not as adequate as I should like them to be, but we are doing our very best to meet this very urgent need.

    Hospital Nurses
    Mr. Alportasked the Secretary of State for the Colonies what accommodation is provided for African nurses in hospitals in East Africa.
    Mr. J. Griffiths: Detailed information on this point is not available in the Colonial Office, but I will ask the East African Governments for a report. I will write to the hon. Member as soon as it has been received.

  GOLD COAST

    Administration
    Mr. A. Fenner Brockwayasked the Secretary of State for the Colonies why the Governor of the Gold Coast has appointed permanent secretaries to the various departments of the Gold Coast Administration prior to the forthcoming elections under the new Constitution.
    Mr. J. Griffiths: In order to ensure a smooth transition, the central administrative machine in the Gold Coast is being reorganised into ministries in anticipation of the new Constitution, and it was considered desirable that the permanent secretaries should be available to take part in this process.
    Mr. Brockway: In view of the very important duties of these officials, would it not have been better to have left their appointment to the Government to be elected at the forthcoming election?
    Mr. Griffiths: I think it is very desirable that these officials should be there during the transitional period. I might add that the Government have decided to create six new posts of senior assistants to the Colonial Governor, and that these posts will he filled by Africans.

    Incident, Suipe (Police Action)
    Mr. Gammansasked the Secretary of State for the Colonies what reply he has sent or proposes to send, to the protests which have been made by paramount chief of Anlo in the Gold Coast regarding the alleged police attack near the village of Suipe.
    Mr. J. Griffiths: An exhaustive investigation has been made into the incident, and a full statement based on sworn testimony was made in the Legislative Council yesterday. I will send the hon. Member a copy. I much regret the loss of life, but I am satisfied that there is nothing in the conduct of the local authorities which demands a special inquiry, and that the police used firearms only in self-defence and after ample and repeated warnings had been given. I am asking the Governor to inform the Chief accordingly.
    Mr. Gammans: Will the right hon. Gentleman state the number of casualties and whether the police suffered any casualties?
    Mr. Griffiths: I should like to have notice of that question.

    Election
    Mr. Gammansasked the Secretary of State for the Colonies what deposit is required from the candidates standing at the forthcoming Gold Coast election; and how far there is forfeiture of deposit if a candidate fails to receive a certain percentage of votes cast.
    Mr. Braineasked the Secretary of State for the Colonies whether every candidate for election to the new Gold Coast Legislature will be required to put down a deposit to be forfeited if he does not obtain a certain percentage of the votes cast.
    Mr. J. Griffiths: The amount proposed is £50, which will be forfeited if a candidate fails to obtain one-sixth of the total number of votes polled.
    Mr. Gammans: Does the right hon. Gentleman realise that in a recent election in the Gold Coast one of the candidates received over 99 per cent. of the votes? As that seems likely to be repeated at the General Election, does the right hon. Gentleman not realise that this may mean that very few candidates will come forward to oppose the C.P.P., and that the whole General Election may, in effect, go by default?
    Mr. Griffiths: The fact that one candidate received that percentage of votes shows that there is nothing wrong. If I may say so, my own party receives very nearly that percentage in South Wales.
    Mr. Eden: What has led the right hon. Gentleman to put the percentage of votes required to avoid fortfeiture of deposit a little higher than it is here?
    Mr. Griffiths: I did not put forward the figure. It was recommended by the Coussey Committee, and was accepted by the committee which they set up the other day to consider these details. All I have done is to approve the details.
    Mr. Braine: Is it not highly desirable to encourage moderates to stand in this election, and will not the forfeiture of deposits discourage them?
    Mr. Griffiths: I think it is very desirable that we should adopt this proposal, which have been agreed to in the Gold Coast.
    Mr. Brockway: Can my right hon. Friend say whether he received a report from the Governor of the Gold Coast stating that the election to which the hon. Member for Hornsey (Mr. Gammans) referred was carried out in a completely fair and impartial manner?
    Mr. Griffiths: My information is that it was carried out in a fair and impartial manner.

  KENYA

    Legislative Council
    Mr. J. Hyndasked the Secretary of State for the Colonies what changes have been made in the Registration of Persons Ordinance by the Kenya Legislative Council; and whether the African and Asian members voted for the proposed changes.
    Mr. J. Griffiths: No changes have been made in the Registration of Persons Ordinance by the Kenya Legislative Council.
    Mr. Hynd: Is it not the case that a change was made in regard to registration by the finger-print method, and that one of the elected European members resigned because an alteration was made in this arrangement in the interests of racial discrimination?
    Mr. Griffiths: An investigation was recently made by a committee whose report is still under consideration by the Government.

    Coffee Growing
    Mr. Fenner Brockwayasked the Secretary of State for the Colonies why African farmers in Kiambu, Fort Hall and Nyeri in Kenya are prohibited from growing coffee.
    Mr. J. Griffiths: The growing of coffee by members of any race in Kenya is strictly controlled, to prevent the spread of disease and maintain the quality of the crop. It is not the case that African farmers are prohibited from growing it in all the areas mentioned in the Question, though they are in some. I am at present awaiting a statement from Kenya giving details of the position and will write to my hon. Friend when it is received.
    Mr. Brockway: In view of the desirability of stopping any racial discrimination in this matter, will my right hon.
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    Friend not apply to competent African farmers rules which are permitted in the case of European farmers?
    Mr. Griffiths: It is my view that racial discrimination in all things should be diminished and abolished.
    Sir H. Williams: Having regard to the fact that the statement on which this Question is based was made in this House three weeks ago, why has there been so much delay in finding out the facts?

    UGANDA (TRADE DISPUTES)
    Mr. Fenner Brockwayasked the Secretary of State for the Colonies what are the provisions of the Bill it is proposed to introduce in the Uganda Legislative Council to amend the Trades Disputes Ordinance.
    Mr. J. Griffiths: It is not proposed to introduce such a Bill.

  MAURITIUS

    Land Settlement Scheme
    Mr. Rankinasked the Secretary of State for the Colonies what provision has been made by the Government of Mauritius for labourers to farm uncultivated land.
    Mr. J. Griffiths: A pilot land settlement scheme covering a three-year period was approved this year. The scheme will make available about 600 acres, a large part of which was previously uncultivated, for small holdings and allotments. In addition, the Food Production Board has allotted extensive areas of previously uncultivated Crown land to growers.
    Mr. Rankin: Could my right hon. Friend say what is the total amount of uncultivated land in Mauritius?
    Mr. Griffiths: Not without notice.

    School-Leaving Age
    Mr. Rankinasked the Secretary of State for the Colonies how many children leave school in Mauritius at the age of 10 for financial reasons.
    Mr. J. Griffiths: I am consulting the Governor on the subject and will communicate with my hon. Friend when I have received his reply.

  ARMED FORCES

    Reservist Officers (Marriage Allowance)
    Mr. A. R. W. Lowasked the Minister of Defence what steps he proposes to take to relieve the hardship caused to young Reservist officers under 25 years of age who, having married after leaving the Colours, are not given full rates of marriage allowance when recalled to the Colours.
    The Minister of Defence (Mr. Shinwell): These officers, like other officers and men recalled to the Colours in the recent emergency, are eligible to apply for National Service grants if they are unable to meet their civilian commitments from their Service emoluments.
    Mr. Low: Does not that put them in a very curious position, and should not the right hon. Gentleman reconsider the operation of the rule on this matter? Would he give an assurance that he will reconsider it?
    Mr. Shinwell: I am anxious, as I am quite sure everyone is, to avoid any hardship, but this rule has been in operation for quite a long time. I doubt whether we could do anything at present. I will look into the matter, however, to see whether anything can be done, but I cannot make any commitment.
    Mr. Turton: Is the right hon. Gentleman aware that most of the young officers who are at present Reservists in Korea are suffering this hardship, as are their families? Will not the right hon. Gentleman make the rule a universal one?
    Mr. Shinwell: There is no reason for hardship. If they apply for the National Service grant I have not the least doubt that if they can sustain a case of hardship the matter can be dealt with. I have reason to believe that where an application has been made for a National Service grant a grant has been made, and the hardship removed.
    Mr. Low: In view of the great importance and urgency of this matter—the great hardship suffered by Reservists' wives, and the particular importance of wives being able to make application themselves—I beg to give notice that I shall raise it on the Adjournment.

    Time-Expired Men, Korea
    Viscount Hinchingbrookeasked the Minister of Defence how many officers and men on Regular engagement, whose period of service has expired, are serving in the Korean theatre.
    Mr. Shinwell: The information is not readily available, but I will send the noble Lord such information as can be obtained.
    Viscount Hinchingbrooke: While everyone will agree that no one wishes to put a strain upon the wireless to Korea at this time, of all times, may I ask if the collection of these statistics is not of vital consequence, in view of the necessity to prepare a plan for release and replacement?
    Mr. Shinwell: As I have said, I shall try to get the information.
    Mr. Martin Lindsay: Is it not a fact that this information is in the hands of the record offices, and can, therefore, very easily be obtained? Is not the right hon. Gentleman's reluctance to give it a political one?
    Mr. Shinwell: I cannot imagine what political reason I could have for refusing to give this information. There are no political implications involved. If as the hon. Member says, the information is available in the record offices I shall find out, and the hon. Member and the House will have it.
    Mr. Lindsay: Does not the right hon. Gentleman agree that it is disgraceful that time-expired men have now to be kept after five years of conscription?
    Mr. Shinwell: That is quite a different question. I have been asked for the numbers of men. I have not got that information available. If I can obtain it, I shall give it.

    Tanks (Sale to Egypt)
    Brigadier Terence Clarkeasked the Minister of Defence what advice he received from the Chiefs of Staff before agreeing to ship Centurion tanks to Egypt.
    Mr. Shinwell: It is not the practice to diclose the advice tendered to Ministers by the Chiefs of Staff.
    Brigadier Clarke: Can the Minister say whether he took the advice of the Secretary of State for War on this matter? Is so, may I ask him not to take it in

    359
    future, as we do not want any more tanks to go to Egypt?
    Mr. Shinwell: I take advice from various quarters. I would even take advice from the hon. and gallant Member if I thought that that advice would be of any use to me.

    Army Recruiters (Pay)
    Viscount Hinchingbrookeasked the Minister of Defence the scales of pay and allowances given to Army recruiters; and whether he is satisfied that in all areas the pay and allowances received are broadly the same for all three Services.
    Mr. Shinwell: The pay of Army recruiters varies from £5 8s. to £5 14s. a week, according to the station. In addition, they are supplied with uniform and boots. Duties broadly similar to those of the Army recruiter are carried out in the Royal Navy by pensioners re-engaged on an active service basis, and in the R.A.F. by serving members of the Force In these circumstances, a straightforward comparison is not possible, but I am satisfied that the conditions of employment of recruiters in each Service are in keeping with their responsibilities.
    Viscount Hinchingbrooke: Is the right hon. Gentleman aware that some Army recruiters have made the calculation that Royal Navy and Air Force recruiters are receiving about £10 per week in comparison to their own £5? Will he look at the matter again, in relation to all the allowances given?
    Mr. Shinwell: I will certainly follow that point up and see what I can do.

    Coal Miners
    Mr. H. Hyndasked the Minister of Defence whether he will give immediate release to coal miners now serving in the Armed Forces.
    Mr. Shinwell: I would refer my hon. Friend to the reply given yesterday by my right hon. Friend the Secretary of State for War to my hon. Friend the Member for Ayrshire, South (Mr. Emrys Hughes).

    Defence Measures
    Mr. Blackburnasked the Minister of Defence if he will institute an immediate review of all measures of defence against surprise attack.
    Mr. Shinwell: I can assure the hon. Member that the measures necessary to guard against a surprise attack are kept fully under review in the light of the international situation.
    Mr. Blackburn: Is the right hon. Gentleman aware that in this country we have not yet taken power to inspect shipping on its arrival in our ports, as has been done in America? Is he aware that our radar defences are pitifully inadequate, and that these matters ought to be priority No. 1 for him and the Chiefs of Staff?
    Mr. Shinwell: On the question of inspection of shipping, I recently replied to a Question by another hon. Member. I would beg the House to understand that it is not possible to furnish details of the action taken because to do so would impinge on security.
    Mr. J. Langford-Holt: Is the Minister aware that about two weeks ago the Secretary of State for War said that it would take about 48 hours fully to man the present radar system? Is that adequate?
    Mr. Shinwell: I cannot say, but if my right hon. Friend said so I accept it.
    Brigadier Head: Does the Minister consider that existing arrangements regarding the Home Guard are sufficiently clear to allow rapid organisation in case of necessity?
    Mr. Shinwell: The Home Guard is another matter and I dealt with it in a Question the other day. The Home Guard has not yet been formed.

  FOOD SUPPLIES

    Pork Sausages
    Mr. Perkinsasked the Minister of Food whether, in view of the hardship caused to the public by the decision to increase the meat content of pork sausages from 50 per cent. to 65 per cent. while at the same time cutting the supplies of manufacturing pork to 25 per cent. of quota, he will consider reverting to the previous practice of a 50 per cent. meat content and reduce the price by 2d. per lb., thus providing more food at a lower price.
    The Minister of Food (Mr. Maurice Webb): There has, in fact, been no cut in the supplies of pork for manufacturing. When I made this decision to increase the minimum meat content of pork sausages I realised, and told the House, that there was bound to be some reduction, although not as great as some people have represented, in the quantity available. But in view of the very strong demand for a better quality pork sausage I think this decision was justified and the supply of beef sausages, which make up 75 per cent. of the total supply of sausages, was not, of course, affected by it.

    Condemned Pig Meat
    Mr. Shepherdasked the Minister of Food the amount of bacon which in the last three months has been condemned as unfit for human consumption either while at the Blackburn depot or subsequent to being sent on from the depot.
    Mr. Webb: I am informed that only 28 lb. of bacon was condemned in Blackburn during August, September and October. A consignment of 21 tons of imported bacon from one particular factory which was distributed among wholesalers in the North Western area in September was found to be miscured, and the shippers have accepted full responsibility. The consignment was immediately withdrawn and dealt with; but I cannot say how much of it had been sent to Blackburn.
    Mr. Shepherd: Has it been possible to detect the error which caused the loss of this bacon? What steps have been taken to see that it does not occur again, as 21 tons is a large amount of bacon?
    Mr. Webb: I am concerned about the matter, but I am sure that there is no step we could take to ensure that accidents of this kind will not occur.
    Lieut.-Commander Gurney Braithwaite: Where did the bacon come from?
    Mr. Webb: Denmark.
    Mr. W. Fletcher: Was the sending of this bacon to Blackburn, Labour's love lost?
    Mrs. Cullen: Could not my right hon. Friend stop pig breeders from feeding their pigs on fish meal, which is one of the causes of their bacon being rendered unfit for human consumption?
    Mr. Webb: That is another question; I will answer it if my hon. Friend will put it down.
    Mr. W. Shepherdasked the Minister of Food (1) the percentage of pig carcases which last year were found to be infected with tuberculosis; and the percentage which was rendered unfit for human consumption;
    (2) the percentage of pig meat which last year was rendered unfit for human consumption as a result of disease; and if he will state the broad categories involved.
    Mr. Webb: Of the pig meat handled by my Department in the last financial year, 0.51 per cent. was condemned as unfit for human consumption on account of disease and other causes, but I cannot say how much of this was the result of tuberculosis. This percentage does not include condemnations of individual cuts of otherwise sound pigs slaughtered at bacon factories, as it would not be practicable for my department to maintain records of these.
    Mr. Shepherd: As about 13 per cent. of pig carcases in some bacon factories are found to be affected by that disease, what steps is the right hon. Gentleman taking to improve the situation?
    Mr. Webb: I am not responsible for what happens to the pig before it arrives.
    A Question should be put down to another Department about it.

    Café, Torcross (Rebuilding)
    Brigadier Raynerasked the Minister of Food whether he will now sponsor a licence to rebuild the Crowing Cock Café at Torcross in Devon which was destroyed by the American Army during battle practice for D-Day.
    Mr. Webb: As the hon. and gallant Member has already been informed in correspondence by my hon. Friend the Parliamentary Secretary, we fully sympathise with this application, and have only been prevented from sponsoring it this year by the limitations on our capital investment programme. I hope that we shall be able to support it early next year.

    Ewe Mutton
    Mr. Doddsasked the Minister of Food if he can now make a statement

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    resulting from his inquiries into the charge of the sale of unsuitable ewe mutton to the public.
    Mr. Webb: I do not recollect any undertaking to conduct a special inquiry into the sale of ewe mutton. This is one aspect of our meat supplies which is constantly receiving my attention, and I can assure my hon. Friend that all possible steps are being taken, and will be taken, to keep unsuitable ewe mutton off the ration.
    Mr. Dodds: Can my right hon. Friend give the result of the inquiry resulting from the allegation made by the hon. Member for Aberdeenshire, West (Mr. Spence), when exhibiting pieces of ewe mutton in the House the other day?
    Mr. Webb: I do not think we conducted a special inquiry into that matter.

    SIERRA LEONE (RIOTING)
    Mr. Sorensenasked the Secretary of State for the Colonies what was the nature of the disturbance at Kailahun in the Protectorate of Sierra Leone; and to what extent this involved injury to the local inhabitants.
    Mr. J. Griffiths: Rioting broke out on 30th October in the district between supporters and opponents of the Paramount Chief. The conduct of this Chief had recently been the subject of a statutory inquiry. He was under suspension at the time and I have now approved his deposition. According to my information two rioters died and 10 were injured. Order was restored without the use of firearms by the police, whose action caused no casualties.
    Mr. Sorensen: Could my right hon. Friend say what is the underlying cause of the friction between the two groups?
    Mr. Griffiths: I think there has been dissatisfaction about the rule of this Chief for some time. As a result of this inquiry I hope to be able to settle the matter.

    TROOPS, KOREA (CHRISTMAS PARCELS)
    Miss Burtonasked the Postmaster-General if. in view of the suspension of ordinary mail services to our Forces in North Korea, he will grant
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    special rates by air mail for Christmas parcels from this country, such concessions to take effect immediately.
    The Postmaster-General (Mr. Ness Edwards): There has been no suspension of any mail service from this country to the Forces in Korea. After the fullest consideration by the Departments concerned I regret I am unable, on account of the cost involved, to arrange for the despatch by air of Christmas parcels to Korea at special postage rates.
    Miss Burton: Does not the Minister honestly regard his reply as completely unsatisfactory? [HON. MEMBERS: "It is shocking."] With regard to the correctness of my statement, may I inform him that this information was given to my constituents by a post office in Coventry, the name of which I have given him? Is he aware that one of my constituents, who is the wife of a man serving in Korea, took a parcel weighing 5 lbs. to the post office last week and was asked to pay 30s. postage and that another man took a parcel weighing 6½ lbs. to the post office and was asked to pay 38s. postage? Would not my right hon. Friend agree that such charges should not be imposed on the relatives of our men who are serving in Korea? Will my right hon. Friend press the Government to make considerable concessions? Could not one parcel be sent free to each man serving in North Korea, or could not a parcel up to the weight of 5 lbs. be sent at a nominal rate?
    Mr. Ness Edwards: I am in complete sympathy with the object of my hon. Friend, but in this matter I am the agent for the Service Departments. The proposal for one concessionary parcel has been put to them, but I would point out that at present £140,000 is required to subsidise this service. To send one special parcel to each soldier in Korea would cost a very considerable sum. [HON. MEMBERS: "How much?"] It would be £58,000. However, in view of the feeling in the House, and realising that I am only the agent for the Service Departments in the matter, I will certainly press this matter upon my colleagues as early as possible.
    Lieut.-Commander Braithwaite: As the Postmaster-General has just told the House that he is acting for the Service

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    Departments in this matter and as the Minister of Defence is present, could not the Minister of Defence intervene?
    Mr. Poole: In considering this matter in relation to our troops in Korea, will my right hon. Friend also give the same consideration to troops in Malaya? I know of a case where 32s. was charged for sending a writing pad by air mail to a soldier in Malaya who had nothing upon which to write home to his parents.
    Mr. Ness Edwards: I will undertake to look at the whole matter again with the Service Departments and see what it is possible to do. I would point out, however, that altogether it costs the country £800,000 to subsidise the present postal service to overseas Forces.
    Mr. Eden: Will the right hon. Gentleman bear in mind the considerable difference between the ordinary Forces overseas and men who are in action? Can we have an assurance that before the Government refuse this request, they will come back to the House and tell us exactly what would be the cost of the concession of sending one parcel both to Korea and to Malaya?
    Mr. Ness Edwards: There are certain physical difficulties, but I think I can give the assurance that we will look at it and report to the House what are our views.
    Mr. Mellish: Will my right hon. Friend bear in mind that our men in Korea are dying at the moment and that any question of cost should not even come into it?
    Sir Peter Macdonald: If Service aircraft are not available for this purpose, why not use the Auxiliary Air Force or the charter companies, who are quite willing and are able to carry out this service far more cheaply than Service aircraft can?
    Mr. H. Hynd: Cannot something be done outside the normal Post Office service, such as using Service aircraft?
    Mr. Keeling: Does the Postmaster-General appreciate that unless the matter is settled within a day or two it will be too late?
    Mr. Low: Is it not a fact that the shortage of aircraft going round the normal way has been overcome by the
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    Service Departments through an arrangement with the United States? Will the right hon. Gentleman therefore bear in mind that there is not such a bottleneck as he has been suggesting?
    Mr. Ness Edwards: I should like to make it quite clear that there are physical difficulties, but they can be overcome. The question is one of finance, and I will discuss the matter again with my Service colleagues.
    Air Commodore Harvey: As time is short, will the right hon. Gentleman undertake to inform the House of the Government's decision by the latest on Friday? May I have an answer, please?
    Mr. Ness Edwards: I will undertake to endeavour to have a conference either this evening or tomorrow with the Service Departments and see what progress we can make, and make an announcement as early as I can.

    KOREA
    Mr. Eden: Has the Leader of the House any statement to make on business?
    The Lord President of the Council (Mr. Herbert Morrison): Yes, Sir. I undertook yesterday to inform the House when a statement would be made on Korea. With your permission, Mr. Speaker, and that of the House, my right hon. Friend the Minister of Defence, will make a statement at the end of Questions tomorrow.

    ARMED FORCES (SUPPLEMENTARY ESTIMATES)
    Mr. Shinwell: With your permission, Mr. Speaker, and that of the House, I should like to make a statement on Supplementary Estimates.
    With the general approval of the House we have recently taken steps to increase substantially the strength of the Armed Forces. These steps included the extension of the period of National Service, the recall of reservists to the Navy and the Army, the retention in all three Services of men due for release from normal regular engagements, and increases in pay and other measures directed to improving regular recruiting and re-

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    engagements. I feel that I should inform the House that, as a result, the strengths of the Army and Air Force will exceed the numbers which have been authorised during the current financial year and Supplementary Estimates on Vote A for these two Services were, therefore, made available yesterday.
    We do not at present expect that the Navy will exceed its authorised numbers but, if necessary, a similar Supplementary Estimate for the Navy will be submitted early in the New Year when Supplementary Financial Estimates for all three Services will be required.
    I hope the House will agree that it would be convenient to postpone formal action until cash Supplementaries can be introduced in January. It will then be possible to take all Supplementaries together. This, however, would be a matter for discussion through the usual channels.

ORDERS OF THE DAY

  LEASEHOLD PROPERTY (TEMPORARY PROVISIONS) BILL
  Order for Second Reading read.
  3.40 p.m.
  The Attorney-General (Sir Hartley Shawcross): I beg to move, "That the Bill be now read a Second time."
  I should like on behalf of my right hon. Friend the Lord President of the Council to convey his apologies to the House that he is not himself moving the Second Reading. The Lord President has from the earliest stages taken an active part in the Bill. Until quite late last night he expected to be moving its Second Reading himself, but owing to the many heavy and additional duties which have arisen in the last few days in connection with the absence of the Prime Minister in Washington, he finds himself unable to be here sufficiently long to do that. He has asked me to make his apologies, and I appear as his very inadequate substitute. On the other hand, we are fortunate in having back with us my right hon. and learned Friend the Solicitor-General, who took an important part in the planning stages of the Bill, and who is now back from his labours at Lake Success.
  The question of leasehold reform and of leasehold enfranchisement, as one aspect of it is called, is one which for very many years has agitated political discussion, and not necessarily on party political lines at all. The Radicals in the old days used to make great play with it, and their Bill, I think in 1920, made an important contribution to the thought on this subject; and only last October the Conference of the Conservative Party at Blackpool passed a resolution, at the instance, I think, of the hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who has made a particular study of this matter and who we are all delighted to see sitting, on this occasion at least, on the Front Bench—a substantial shadow, I am sure, of more permanent things to come.
  One of the great advantages of being able to sit upon the Front Bench—and I say one of them only—is that one is able

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  to adopt without impropriety the position now occupied by the right hon. Member for Warwick and Leamington (Mr. Eden) and the hon. and learned Member for Northants, South (Mr. Manningham-Buller). I commend the same position to the hon. and learned Member for Wirral in view of the excessively lengthy and very tedious speech which I am about to make upon this very technical Bill.
  I said that the matter was one which had aroused much political interest amongst all parties, and I referred to the resolution passed only a month or two ago at the Blackpool conference. That resolution did not go as far in some respects as we would seek to go in the Bill. I think that it proposed protection for premises of the size within the Rent Acts limits only, whereas we propose to go further and to give protection to the larger middle-class houses as well.
  I do not suggest that, although the matter has been the subject of active consideration amongst all parties, there is any unity of view about it. Many on the benches opposite, for instance, believe in one form or another of leasehold enfranchisement. Some on the benches on this side, on the other hand, do not think that that is desirable. I have found few subjects in which there is more enthusiasm for doing something and less agreement as to what that something should be or how it should be done. We are told from all sides to do this or to do that, but the practical difficulties are such that there is a great deal of variety in the advice which we get as to how to do it.
  It was in those circumstances that the Speech of His Majesty at the opening of this Session of Parliament gave the following undertaking, which we now seek to implement:
  "My Ministers have under consideration the reform of the law relating to leaseholds and meanwhile measures will be introduced to provide for the continuation for a short period of ground leases relating to residential premises, so as to prevent some of the hardships which would otherwise arise on the termination of tenancies. Provision will also be made for facilitating the renewal of certain business tenancies."—[OFFICIAL REPORT, 31st October, 1950; Vol. 480, c. 8.]
  It is the Bill which implements that undertaking to which I now ask the House to give a Second Reading.
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  I cannot pretend that the Bill provides either fascinating or easy reading, even for a lawyer—its nature necessarily prevents that; nor do I suggest that it will bring clarity to a branch of the law which is already complex and complicated in the extreme. That must be left to more permanent legislation later, and I shall say something about that. Nor do I deny that in the case of many landlords it may cause inconvenience, and, in the case of some, hardship. But I do suggest and assert that the Bill provides the most practicable method available of preserving a standstill, and so avoiding the much greater volume of hardship and suffering which would otherwise have occurred if the increasing number of long leases—the result of building development after the Industrial Revolution and in the middle of the last century—which are now beginning to fall in, were allowed to fall in during the next few years without anything being done in regard to the matter.
  I say that this temporary Bill provides "the most practicable method," and I want to add this. We wanted what was done now in the Bill as a temporary expedient to be without prejudice to the permanent or long-term solution that Parliament might adopt. We wanted it, for that reason, to be as non-controversial—as non-controversial, I mean, in a party sense—as we were able to make anything which dealt with this matter. We therefore canvassed all sorts of different methods of dealing with the problem. Some of them we had actually translated into the form of draft Bills so that we could see how they would work out in legislation. Here I must pay a tribute to the Parliamentary draftsman, who has worked hard and long on these proposals, like all Parliamentary Counsel who bring their tremendous knowledge and experience loyally to carry out the varying instructions of whatever Government may happen to be in power at the time.
  After canvassing all sorts of different proposals and methods, we came at the end of the day to the conclusion that on the whole the Bill in its present form provided the most practicable solution. The Bill applies to England and Wales; a Bill for Scotland, following the general principles of the present Bill but with such modifications as are necessitated by the differences in circumstances in that country and the differences in the law,

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  will be presented by my right hon. Friend the Secretary of State for Scotland, I think, almost immediately.
  The present Bill, applying to England and Wales, is simply a first-aid, or a standstill, measure which is designed to provide a kind of moratorium in regard to the most urgent of the problems which arise, so as to give the Government time to prepare permanent legislation covering the whole of this field of law. It will maintain the status quo so that tenants now occupying their homes but liable to eviction at an early date, or perhaps already liable to eviction because their tenancies have expired, will not be caused immediate hardship, or be deprived of such benefits, whatever they may be, as it may be impossible to accord to tenants generally by the permanent legislation which, in due course, we shall introduce.
  I should add in regard to these permanent benefits, and emphasise as strongly as I can, that this Bill is entirely without prejudice to what the final solution may be, and no conclusion whatever ought to be drawn from this Bill as to lines on which we shall in due course invite the House to enact long-term legislation. Indeed, we have deliberately tried in this Bill to avoid putting in anything—for instance, anything with regard to the question of rents, the selection of one tribunal or another and so on—which might in practice prejudice the long-term solution. This Bill, whichever way it is looked at, either in benefits or hardships, or scope, or the nature of the remedy and so on, does not indicate in any way at all the shape of things to come in regard to these problems.
  Mr. Leslie Hale: My right hon. and learned Friend said a few minutes ago—and I heard it, not with enthusiasm—that in preparing this Bill the Government have set out to be as non-controversial as possible. Can we have an assurance that when the permanent legislation is brought in, that will not be the objective, but that the objective will be social reform?
  The Attorney-General: I am going to deal with the proposed permanent legislation and my hon. Friend will then see whether he disagrees with what I say. I suspect he will not, but there is no point in introducing controversial matters in
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  regard to a temporary problem in which controversy is not necessary, and we hope with regard to this Bill that controversy will not be necessary.
  I want now to turn to some of the background of this matter. As the House knows, over the last two or three years there has been long and detailed examination of the problems of the leasehold system by a Committee which was set up in the early part of 1948 under the then chairmanship of Lord Uthwatt and, when that great public servant died, unhappily and in the full plenitude of his powers, Lord Justice Jenkins was good enough to take over the chairmanship and brought his great knowledge and ability to bear on the problems. The Committee included a number of people eminent in this branch of the law and, indeed, several Members of Parliament as well, of whom my hon. Friend the Member for Oldham, West (Mr. Leslie Hale) was one and the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) was another. The reports of the Committee are very learned and important documents, and I think the House would wish me to express their gratitude and the gratitude of the Government for the reports that have been made.
  In its various reports the Committee made a number of very interesting recommendations on technical questions arising in connection with leasehold, such as repairing covenants, improvements, restrictive covenants and so forth, and the Government, of course, are giving those recommendations and others very careful consideration in connection with the whole problem and its long-term solution. But, on the main question of principle with which the Committee was concerned no one can accuse the Committee of attempting to lay down the law in this matter to the Government. Neither the interim Report, which covers business premises, nor the final Report on the whole problem was unanimous. There were—and I do not say this in any critical spirit at all—majority and minority reports and reservations. That, I think, was inevitable in the nature of things and arose in part, as my hon. Friend has just indicated, from the fact that there is a real difference of approach, social and political, to the problems which have to be solved. I shall come to that later.
  The Committee had to deal with problems which on any view were highly diffi-

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  cult and controversial, whether tenants should have the right compulsorily to acquire the freehold of their premises, leasehold enfranchisement, whether business rents should be controlled, whether protection should be given to business premises on the same lines as under the present Rent Restriction Acts, and things of that kind, and even the technical questions about the covenants and so on were not lacking in material for controversy.
  But whilst it was inevitable in the nature of things that there should be considerable diversity of opinion, the Government and the House must be most grateful to the Committee for the way in which they have analysed the difficulties of the problems involved and for the great mass of heavy work which was done by the able and busy people who formed the Committee; work of very great value in providing the material on which our further examination must now proceed. But, at the end of the day, responsibility for recommending legislation must, of course, rest with the Government.
  The majority Report recommended that a business tenant should have the right, on certain conditions, to a renewal of his tenancy, but no corresponding security of tenure was recommended in respect of residential tenants outside the limits of the Rent Restriction Acts. Although methods of protection may differ, we agree with the supplementary Report that we cannot accept this distinction between the businessman or his premises and the ordinary tenant in his home.
  If we are taken to task for not accepting the Committee's recommendations in one regard or another, I must also point this out, that the Committee's recommendations related to the long-term solution of this problem; this Bill is a temporary standstill. For the long term we have rejected nothing the Committee have recommended. We shall take into consideration all the recommendations, both majority and minority, in making up our minds, but, in view of the differences of opinion, we must re-examine the arguments by which the various sections of the Committee reached their final views and we must, as the Government, accept the responsibility for whatever recommendations we put forward to the House on these major matters of policy.
  Already we have set up a Committee of officials under the chairmanship of a
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  Minister of Cabinet rank to study the matter and to prepare legislative proposals for consideration first and introduction in due course. I must say at once—and this will not be controversial, if anything I say is controversial—that everyone will agree that there is a lot of tidying up of the existing law to be done and I hope. perhaps also, of codification of it, which might also be possible. No one familiar with this branch of the law will expect it to be anything but a very substantial and difficult task, one which would—
  Mr. Molson: Is this Committee considering the whole scope of the existing Rent Restriction Acts?
  The Attorney-General: No, I am coming to that in a minute. This Committee is dealing with the whole field of leasehold reform. The position under the rent restriction legislation is a different one and also a difficult one. I shall say a word about that in a moment. I should not like to say which is the most difficult of the problems. This problem of leasehold reform, certainly, will provide a very difficult task, one which would tax to the limit—if there were any limit, which I am beginning to doubt—the skill and ingenuity of the Parliamentary draftsmen.
  It is to tide over that work by this Committee that this Bill introduces a standstill for two years. The Bill is to last for two years and it is not intended that it should be renewable from year to year after that period. Some people may think that the period is too short, because already pressure is being put upon many tenants to renew leases on onerous terms although the leases will not expire for three, four or five years hence. Naturally, the tenants are in doubt as to what they ought to do in the circumstances. But we thought it right to choose a period of two years for this standstill Measure, because we felt that the period of uncertainty and of inconvenience, or perhaps even hardship, ought to be reduced to a minimum, and because we believe that by the end of the two years we should be reasonably sure of having permanent legislation ready to take the place of this interim moratorium Measure.
  I indicated that there were many matters on which there has been considerable difference both on principle and on method, but there has at least

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  been considerable agreement about two matters. It was agreed that in the case of ground leases and the leases of certain business premises falling in now or in the immediate future, something ought to be done. We agree with the members of the Committee, both in the minority and the majority reports, who took that view.
  The first class of case is that of the ground lease of residential properties coming to an end after a long period of years. As, of course, hon. Members know, building development in this country has taken two broad forms, apart from the case of the man who has bought his freehold piece of land and then built his own house upon it. Apart from that, there have been the cases where the speculative builder—and I do not use the term in any derogatory sense—has bought a large freehold estate, built a number of houses upon it and then let those houses at whatever rent he could get—a rack-rent as it is called. That case we do not deal with.
  The alternative method, which was very much adopted in the last century was for the owner of the land to let off plots of it for a long term of years—60, 70 or generally, I think, 99 years—at a rent for the ground only. Usually it was a small rent of a comparatively few pounds, but it was subject to a condition that the lessee would not only pay the ground rent but would built a house upon it. Under such a lease, when the 99 years, or whatever the term was, comes to an end, both the land and the house upon it revert to the freeholder the owner of the reversion.
  That, of course, is when trouble begins for the ground lessee who happens to be occupying the house at the time—not the original tenant, but very often some family descendant or someone to whom he has passed on the property—and he has to consider his position. He has no protection if the ground landlord decides to turn him out or to hold him to ransom for an increased rent, or if he decides not even to give him that opportunity but to sell the house to somebody else. Of course, at the end of the 99 years there may be grounds for some increase in rent, although there is more than one view about that. That is why I said that when we come to the long-term solution we may find ourselves involved in controversy. I
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  mention that as one of the matters on which controversy may arise.
  In the end, all this legislation for security of tenure and for control of rents that we have had over the last 30 or 40 years, has largely been due to scarcity values. Under present conditions the rents which can be demanded by landlords who seek so to do—and I do not say that all landlords do seek to—can be very exorbitant indeed. Rightly or wrongly—I am not talking about the law now; there is no doubt about the law—but, rightly or wrongly, from an ethical point of view, many of these people living in houses built by their forebears look upon the houses as their homes and as their own.
  The position in regard to that was very well described in a passage in the majority Report, although it is fair to say that it was not wholly accepted by the members of the Committee as being an accurate description. In paragraph 60 this is what they said they were told:
  " … we are told that there are still many working men, especially in the mining valleys, who own the ground leases of the houses in which they live. It is alleged that, when these leases were originally granted during the middle years of the nineteenth century, workers who took them—in many cases the fathers and grandfathers of the present occupiers—were obliged to accept the terms offered by one or other of the few landlords who owned all the land in the desired locality, and often did so without any real understanding of the limited character of the interest they were acquiring or of the obligations which it involved. It is claimed that many of these leases are now due to expire and the present occupants are thus threatened with grave hardship through the loss of their homes and the probability of heavy claims for dilapidations."
  Mr. Derek Walker-Smith: Will the right hon. and learned Gentleman read the next sentence?
  The Attorney-General: I wish the hon. Gentleman would give me a chance. I was just about to go on to summarise the effect of the next sentence, but what he asks me to do is to read the next sentence in the next paragraph. I have read the whole of paragraph 60. The next sentence of paragraph 61 says:
  "At this distance of time it is obviously impossible to adjudicate upon the charges of unfair conduct on the part of the original landlords in the granting of leases 80 or 90 years ago."
  That is why I began my quotation, if the hon. Gentleman had done me the

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  courtesy of listening to me, by saying that this description was not accepted by some of the members of the Committee. That is why, if the hon. Member had had the patience to listen to what I am now going to say, he would have heard that it is true that the majority of the Leasehold Committee did not consider the problem which had been thus described to them to be a large problem. On the other hand, contrary to the view implicit in one of the leading articles in "The Times," they did think it a large enough problem to merit legislation in order to bring these premises within the protection of the rent restriction legislation.
  I have referred to two leading articles in "The Times"—
  Mr. Walker-Smith: Since the right hon. and learned Gentleman has chosen to pray in aid the leading article in "The Times," will he say whether or not that leading article gives any support to the suggestion that "The Times" thought that this Bill was an appropriate solution?
  The Attorney-General: The hon. Gentleman is seeking to make my speech for me. I am afraid that it will be a very long speech. It will be made much longer if the hon. Gentleman seeks to anticipate the very next point that I wish to make.
  I was saying—and perhaps the hon. Gentleman heard me—that I had referred to two leading articles in "The Times" and that as I went on with my speech I should have occasion to refer to them again. Let me say this about them. "The Times" has devoted two leading articles to this question, and from time to time I shall comment on them. They were, as one would expect, reasoned and careful articles, but I rather thought—if one may be permitted to say this about such a great British institution—that they were not quite so accurate and not quite so well informed as their leaders usually are when, for instance, they are criticising the policy of His Majesty's Opposition. But I should come to some of the points in which we do not accept either the accuracy of the comments in "The Times" or the conclusions which they seek to draw.
  Whether the problem is a large one or not is a matter about which hon. Members will be very well able to judge. Hon. Members particularly from constituencies in South Wales and on the North-East Coast will all have their views about this
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  matter, and will no doubt express them. If any hon. Member considers that this is a negligible problem and we ought not to have any legislation about it, which I think is the view of "The Times" although quite contrary to the view of the Committee, no doubt he will get up and say so.
  We are dealing in this Bill in the main with small houses, although many middle-class homes are also involved. In the main these are small houses, which, in the ordinary way, would be controlled under the existing rent restriction legislation, and in which the tenants have been living for long periods of time. Yet, because these houses happen to be let on ground leases to occupying tenants, there is no protection when the ground leases come to an end. It is not surprising that the members of the Committee, however differently the leader-writer of "The Times" may think, whilst differing on the merits of the argument that these leaseholders had a moral right to the ownership of their property, were all agreed, at least in the cases of houses within the Rent Restriction Acts limits, that as much security should be given to the ground lessee as to the tenant of a similar house on a full rack rent. That is the first answer which I venture to make to the leading articles in "The Times."
  The Committee also made a recommendation on a related point, which I take up in passing. I am afraid that this is a rather technical point, but this Bill is full of technicalities. Sometimes A, a ground landlord, lets on a long lease some premises to B, and B in turn lets the premises to C at a full rent or rack rent. Until recently it was thought that on the termination of B's intermediate lease C, who was the tenant in actual occupation, would be protected under the Rent Restriction Acts as against A, the superior landlord if he had been so protected against B, his immediate landlord. But earlier this year in a case called The Knightsbridge Estates v. Deeley, the Court of Appeal held that C, the occupying tenant, had no such protection.
  That decision is likely to affect quite a large number of sub-tenants who hold from intermediate landlords, the intermediate landlords themselves being ground lessees. The occupying tenants believed themselves to be protected by the rent

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  restriction legislation, and I think it has already caused hardship in a number of cases. There has been a considerable demand for legislation to deal with the matter and the Committee recommended it. Part I of the Bill is, therefore, designed to deal with the position both of the occupying ground lessee and the subtenant at the expiration of the ground lease, although we intend to deal with the matter in a rather different way from that proposed by the Committee.
  We differ from the Committee in this temporary legislation for two reasons. Firstly, we do not know what rights the occupying ground lessee may enjoy under the new permanent legislation. All sorts of things have been suggested in regard to him. Some think he should go on as before; some that he should have the right to a new lease but still at a rent for the ground alone, although at a rent which reflects the present value of the ground, which would be higher than the value 90 years ago.
  Another view is that, failing agreement between the lessee and the landlord, the lessee should be brought within the protection of the Rent Restriction Acts and have a new rent for both the ground and the house rent fixed by some tribunal. That is a suggestion worthy of consideration in the long-term solution, but it is greatly complicated, as the majority Report points out, by the covenants and the problem of repairs, about which I shall say something later on. It really involves re-writing the whole lease. I might add that I am not rejecting it as a long-term proposal, but am pointing out one of the difficulties. Other people think the lessee should have the right to buy the freehold—enfranchisement.
  All these proposals have merits and demerits as permanent solutions, but it would take time to bring them into effective operation. The legislation would be much more complex than people realise. It would take time to set up the judicial and administrative machinery, and it would be difficult to introduce any of these proposals as merely temporary expedients. They are long-term solutions, and to introduce them now as temporary expedients would very much prejudice the question of the long-term solution.
  In the meantime, something has got to be done, and the long-term solution may
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  be very much easier if, when the time for it comes, it is dealing with a tenant who is still occupying the house as the ground lessee, and it is not necessary to go back to revive a status which the temporary legislation has terminated. Indeed, some of these proposals would involve fundamental alteration, in the existing position without providing the permanent solution. That is why we do not feel at this stage that we should adopt the proposals suggested.
  The second reason is that the Committee was thinking, mainly at all events, of houses within the rateable value of the Rent Restriction Acts. We must not assume that the permanent legislation dealing with ground lessees will be limited to the small properties of that kind. Indeed, there was a significant body of opinion in the Committee in favour of giving security of tenure to all classes of residential tenants, and it happens that all the letters I have received on this subject from individuals have been from occupiers of houses above the Rent Restriction Act limits, middle-class people, who tell me that they are suffering considerable hardship. They ought to have the protection the Tory proposals deny them. We think it right, in view of the long-term measure, to maintain the status quo for all ground lessees whatever the rateable value of their houses might happen to be and give them all, whether they happen to occupy a large or a small house, equal chance to benefit or not from the permanent legislation, whatever the legislation may be.
  What the Bill provides, therefore, is that when a ground lease comes to an end during the two years after the Bill becomes law and the lessee or a member of his family is living in the property at the time, he will continue to hold the ground lease at its existing rent, terms and conditions—subject to one matter which I shall come to—until the end of the two-year period. He does so automatically unless the tenant waives his right and gives notice to terminate the tenancy. I said that the tenant or some other member of the family must be living in the premises at that time. We do not define by statute what is meant by "family." That problem has already arisen under the Rent Restriction Acts, and the ground is fully covered by judicial decision.

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  We considered whether in giving that right we should make it subject to a condition that the tenant must have been in prior occupation for some stated period, five years, ten years or whatever the time was. Some of the arguments to that end were not unattractive, but we rejected them on various grounds. Whatever the qualifying period which was selected, it was bound to he arbitrary, there would be anomalous cases on both sides of the borderline, and it would encourage litigation as to who was living in the house at some particular period.
  On the other hand, I do not attempt to conceal from the House that the Bill as framed now will give the same protection to the man who has become a ground lessee recently as to the man who for many years has lived in the house as his permanent home. We thought that that anomaly was better than the complications which would otherwise be introduced into the operation of what is a very short and temporary Measure. Moreover, of course, from the point of view of the landlord, it does not much matter as a rule whether the tenant who gets the extra two years has been in occupation for 10 years previously or only 10 days. So far as he is concerned, it is usually fortuitous, who is the tenant for the time being. Whoever the tenant in occupation is, he gets protection by the provisions of the Bill.
  So much for ground leases which actually terminate within the two-year period. There are also cases, and it is right that I should draw attention to them, where, for one reason or another, the lease has already expired before the Bill comes into actual operation and the tenant is still in occupation, "holding over," as it is technically called. We cannot, of course, interfere with the cases where the position resulting from the termination of the lease has already been dealt with and has been accepted by the tenant, who, perhaps, has got out or has agreed to a fresh tenancy on new terms, or when, although still paying the same ground rent, he has paid a premium for being allowed to stay in possession and occupy for a further period.
  These cases will be outside the Bill, and I only mention that because the effect of this premium provision has been quite misunderstood. "The Times" did not appreciate that this favoured the landlord. Where a premium has been paid as a con-
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  sideration for staying on after the expiration of the lease, we regard that as a closed transaction, and do not attempt to disinter the old bones. Where the tenant is still in occupation, and is either paying the same ground rent or no rent at all, we shall assume that, for one reason or another, both landlord and tenant have been marking time, possibly to see what the new legislation would do, and the Bill will cover those cases. If, on the other hand, a new bargain has been made, the Bill will not affect it.
  I have been talking all this time about ground leases, building leases. It is very difficult to define them, and the Bill, as a matter of fact, uses the expression "long leases granted for more than 21 years." In practice, such leases are almost invariably, if not invariably, building leases. We shall cover by this method of definition everything we intend to protect, and it is most unlikely that we shall cover anything else. Leases of houses already built are generally for three, five, seven, 14 or, occasionally, 21 years. Although I have not heard of such a case, there may be exceptional ones where leases of already existing houses extend for more than 21 years. If we did protect an occasional house of that kind, it would be most exceptional and no great harm would be done.
  On the contrary, there were very weighty opinions behind the minority Report which recommended that all these leases of residential premises, whatever their period, whether they were building leases or not and whatever the size of the houses, should have protection, and that is certainly a matter to which we shall give most careful consideration in connection with the permanent legislation to which I am going to refer. I have said that leases of over 21 years will continue for two years on the same rent, terms and conditions, and that brings me to what I think may be the one matter of some controversy in this Bill.
  It will be said—indeed, it has already been said—that the fact that the rent continues at the same rate will cause unjustifiable hardship to the landlord, who has, perhaps, been waiting patiently for the reversion to fall in so that he might re-let the house for something like a modern rent, or who, perhaps, has mortgaged the property or wants to dispose of it in some other way, or, occasionally—for most of

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  these reversions are really held as investments—has obtained the reversion in order to get the house for himself. It may be said that it is bad enough, when the lease falls in, that the landlord should be prevented from getting possession, for a certain number of years, but it is worse still that he has to allow the tenant to remain in occupation at an out-of-date rental.
  One need not deny that there is some force in that argument, and that there may be cases of hardship. I am not suggesting for a moment that all reversioners—ground landlords—are either earls or estate companies. I am quite prepared to hear from the opposite side of the House of the case of the widow or orphan who has invested all her savings in buying a reversion. It is a legitimate investment, and if these cases exist they are hard cases. But hard cases no more make good policy than they make good law.
  It seemed to us that there were weighty reasons why these hard cases, if they exist, should not lead us into the establishment, for this purely temporary period, of any elaborate machinery for increasing the rent. This is a moratorium, a standstill Measure, designed to hold the position until we get the permanent legislation. Even from the landlord's point of view, there seems to be something to be said for not increasing the rent during that period. If we added an increase, no doubt it would have been valuable to them so far as it went, but, when we came to the later stage of permanent legislation, we might have been faced with something which was considered as in the nature of a vested interest—a rent which had already been settled and decided.
  That might prejudice the position of the landlord. And then there are administrative difficulties. It would be necessary either to adopt some arbitrary standard like a proportion of the rateable value or an increased proportion or a percentage increase of the existing ground rent, which would result in very wide anomalies and not satisfy either party. If that were not done, we would have to set up a tribunal—and there would be disputes about what tribunal—to fix the rent at a particular figure, and there are many objections to that.
  Moreover, and this point has, I think, been quite lost sight of, by people who
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  take the view that rents ought to be increased even in a temporary measure, if we raise the rent to a reasonable market rent, or a rack rent, we would have to look at the covenants, particularly the repairing covenants, which, of course, are all the more onerous upon the tenant because they are drawn on the basis that the tenant will be paying a very low rent for the ground alone.
  The majority of the Committee referred to that matter in paragraph 108 of the final Report. What is sauce for the landlord in this matter would have to be sauce for the tenant as well, and we should be involved in rewriting the whole lease. It seems to us quite inappropriate to do that for a purely temporary period, and we thought, balancing things as far as we could—the hardships that might be inflicted on the landlords on the one hand, and, on the other, the volume of hardship and suffering which might be inflicted on the average tenant—that, on the whole, the better plan would be to maintain the moratorium or the status quo principle.
  There are many precedents for doing that. I do not mean simply any general moratorium, such as one may get in wartime but, in this particular field of property law. There are in the field of rent restriction legislation 11 Statutes now, I think. There is, in another field, another code of law covering property, and the principle upon which all these Acts, passed by Conservative Parliaments for the last 30 or 40 years, has been based is that they do interfere, and may properly interfere, sometimes retrospectively, with a landlord's contractual rights, may restrict and even reduce the rents to which the landlord might otherwise be entitled and may deny him possession which he might otherwise get. I do not want to draw too close an analogy between the two classes of legislation, but we are certainly applying in this temporary expedient a principle which has been recognised for a long period of years in property legislation. And we are applying it in a case where everybody agrees that something must be done.
  As for the other terms and conditions of the lease, with one exception they will remain the same. The exception is that the lessee will be protected against forfeiture for breach of covenant except for non-payment of rent or for failure to insure. I say except for those two things.

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  There may, of course, be other covenants in special cases which ought also to be made exceptions to this general principle. We do not want Clause 4 to become, as someone has suggested it might become, a sort of brothels' charter. We are very glad to know that some landlords are waking up to their responsibilities in this regard.
  Then there may be restrictive covenants in regard to user which have been broken. These covenants are not, I think, of wide importance in regard to the class of case we are dealing with here, but we shall certainly consider in Committee any such cases as may arise. But the most difficult case is the covenant in regard to repairs. That is the chief practical problem which faces the ground lessee at the end of his lease, especially the small man who comes to the end of the term and finds himself under a very heavy penalty under the repairing covenant. Very often he has not recognised the extent or nature of his liability at all, and in the past there have been many cases where leaseholders were subjected to forfeiture by landlords enforcing the letter of these repairing covenants, or who were induced to surrender their leases before the end of the term in order to get out of their liability under the covenants.
  There are now a number of statutes which give a considerable measure of protection against the full operation of the right of re-entry on the breach of repairing covenants, and it is also true and fair to say that many landlords, if not most, nowadays do not seek to enforce the onerous repairing covenants under the long building leases because they know that the tenant simply cannot comply with them. As a matter of fact, "The Times," in its leading article today, says that the problem of repairs is quite separate from that of security, and ought not to have been dealt with in a single Bill. The Committee thought exactly the opposite; the Committee thought that these two problems were intimately connected, and obviously, the two years' moratorium would be completely illusory if, as "The Times" seems to suggest, we did not provide protection against the risk of forfeiture. You cannot provide security of tenure, especially if the rent is to go up, unless you deal with the covenants. But the practical inroad that we make on the rights of the landlord in this connection is not very great.
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  The majority Report points out in paragraph 64 that proceedings for forfeiture are often of very little practical value, and I believe from what I have been able to gather that in practice they are rarely resorted to. It may be that we are dealing here with something which is often more theoretical than real, but it is still possible for a landlord who stands on his rights in the last five years of these long tenancies either to force the lessee into the position of having to accept the forfeiture or to pay a ruinous bill for repairs. It is little use giving the lessee two years' extension of his lease if during that time his landlord has the opportunity of terminating the lease by forfeiture. Therefore, we provide the occupying lessee with a protection against the risk of forfeiture or surrender on those grounds.
  Now I come to a rather different problem, that of the sub-tenant of the rent-controlled house who is paying a full rent, who holds from an intermediate landlord and who does not continue to get protection under the Rent Restriction Acts if the intermediate landlord drops out. That is the Knightsbridge case to which I have already referred. Under Clause 5 of the Bill, the sub-tenant will be given for the balance of the two years for which the Bill operates, the same rights and duties in relation to the superior landlord as he previously had
  against the intermediate landlord. The position of the intermediate landlord holding at a ground rent and sub-letting at a rack rent was simply that he was there making a profit. It was perfectly legitimate for him to do that, but there is no reason why we should enable him to continue in that position at the expense of the superior landlord.
  Therefore, when the intermediate landlord's lease comes to an end, he drops out of the picture altogether, he disappears, and there is a kind of notional assignment of the rights and liabilities which he had against the sub-tenant to the superior landlord. The lease goes on, but now the occupying tenant is in direct relationship with the superior landlord on the same terms as before. If it was a rent-restricted tenancy it would still be a rent-restricted tenancy, and if it was a contractual tenancy it would be on the same contractual term, whatever that may be. It may be asked, and some reference—
  Mr. Manningham-Buller: Does the right hon. and learned Gentleman mean that so far as the subtenant is concerned he will be paying neither a greater nor a lesser rent than he was paying to his immediate landlord?
  The Attorney-General: Yes. During the two years' period of the Bill, it is as if his liabilities under the lease to the intermediate landlord had been assigned to the superior landlord, and he will be paying exactly the same rent and on the same conditions as before.
  That is how we deal, in the case of long building leases, with the problem which arose in the Knightsbridge case. It may be asked, why have we not undertaken a straight and permanent amendment of the Rent Restriction Acts in regard to this matter, which arose under these Acts? The answer to that question is quite simple, but it is right that it should be given. This Bill is intended to deal only with the problems which arise on the termination of ground leases. It only deals with questions which arise under the Rent Restriction Acts incidentally and in so far as they relate to long ground leases. This is not a Bill to amend the rent restriction legislation; this is not the occasion for doing that. On the other hand, we all know that the rent restriction legislation is very complicated. As I said, there are now 11 statutes and a very large number of judicial decisions interpreting the statutes, and no doubt intended to make them clearer than they were before.
  The amendment and the codification of this branch of the law presents many difficulties, but the matter is at present being studied with a view to the introduction of comprehensive legislation to cover that field. I cannot, of course, hold out any prospect of an early Bill, but this Bill certainly is not the occasion to attempt further amendment outside the field of the ground leases. Piecemeal amendment of the rent restriction legislation would only increase the existing confusion.
  Mr. Molson: Will the right hon. and learned Gentleman tell us exactly what form that study is taking? Has a committee been set up similar to the one to which he referred before, or is it a sort of desultory talk going on in the Ministry of Health?
  The Attorney-General: I hope that no studies in the Ministry of Health are desultory, but the matter is, of course, the responsibility of my right hon. Friend the Minister of Health. As far as I know, no committee of the same nature has been set up, but I am assured that it is the subject of active study. It is, of course, a very difficult subject, but, in a sense, it is a narrower one—it deals with the codification and amendment of existing legislation.
  With regard to the leasehold law generally we are dealing with problems which have not hitherto been covered by legislation. That is the explanation of the different method of study.
  I am sure that the House will be glad to know that I am getting to the end of what I have to say. I now pass to Part II of the Bill. Even if I do not—as I had hoped—receive the unrestrained and enthusiastic support of the hon. and learned Member for Wirral for Part I of the Bill, I am sure that at least, I shall receive his ungrudging approbation of Part II, because in Part II we are doing precisely what the hon. and learn Gentleman recommended in his independent report. He said:
  "Therefore while I accept and recommend a measure of temporary control in an abnormal situation (such as for example has been tried with what appears to have been considerable success in the Tenancy of Shops (Scotland) Act, 1949), I feel the time is not yet ripe"—
  and I pause there to say that that is why we are introducing interim legislation—
  "for deciding what permanent changes in the law are necessary. Holding this view, I regret that I find myself unable to agree with Chapter V of the Final Report."
  We find ourselves in complete agreement with that, and that is the view we have in effect adopted in this Bill.
  Mr. Leslie Hale: That is not really what has been said up to now, and I hope that is not what is meant. I understood the Government to say there had not been time to formulate the very complex statute which would be necessary. I hope it is not going out from the Front Bench that the time is not ripe to do it. In fact, I hope a statement will go out of a decision that it is going to be done as soon as possible.
  The Attorney-General: I am obliged to my hon. Friend. That is a more accurate way of putting it. I think the hon.

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  and learned Member for Wirral, when he said the time was not ripe, really meant that there had not been time to state exactly what the long-term solution ought to be. That is the position which His Majesty's Government, at all events, take up with regard to the matter. It would have been very nice to have introduced permanent legislation if we could have done it. We thought it would take too long to introduce permanent legislation and, in the meantime, many people would have to suffer hardship.
  In fact we are re-enacting the Scottish Act, and this Bill will give shopkeepers the right to apply for a short new tenancy if the existing tenancy comes to an end within the two-year period. There is no doubt that there is a necessity for that. There is no doubt that during the years since the war businessmen have been prejudiced in the conduct of their business through inability to renew the tenancy of their premises. "The Times" lavishes praise on the Landlord and Tenant Act that is surprising. The Landlord and Tenant Act, 1927, was very much criticised by the Leasehold Committee and, as far as the security of tenure of business premises in particular is concerned, it is quite ineffective. In those circumstances it is said by some that protection should be given to all business occupiers—tenants of offices, factories as well as shops. That may be so but in this temporary Bill we do not propose to go quite so far.
  The extension of protection to all types of business premises—factories, however large, and all the rest of it—might have very wide implications and repercussions. On the other hand, within a narrower field there is the great difficulty of definition. Moreover, we think it is also true that security of tenure is probably more necessary in the case of a shop than in the case of other business premises. The goodwill of a shopkeeper is very much attached to the shop. If somebody else puts a different name on the outside that may not matter greatly. People will still go to that shop to buy their bread.
  That is not so, as a rule, with other business and professional premises. The solicitor wishing to obtain wise counsel might sensibly go, in the temporary absence from the Bar of my right hon. and learned Friend the Solicitor-General, from the Bar—modesty forbids me to
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  mention myself—to the chambers of the hon. and learned Member for Wirral. I am sure that if that solicitor found that the hon. and learned Member had left his chambers and had moved to a new address he would not be satisfied with anybody else in those chambers but would go and find out the hon. and learned Member's new address. I do not think that by any means would be so in the case of a shopkeeper. And so we propose at this stage in this temporary Measure, to follow the precedent of the Tenancy of Shops (Scotland) Act, 1949, which, as the hon. and learned Member for Wirral said. seems to have worked very well in practice, and to apply that to deal temporarily at least with what we think to be the worst cases.
  I come finally to a general matter relating to the Crown. With the exception of the two Duchies, to which special constitutional circumstances apply and which, in any event, will give effect to the principles of the Bill in practice, this Bill binds the Crown. We have thought it right that Government Departments should not be exempted from the effects of a Measure which, in protecting tenants from undoubted hardships, may cause inconvenience to many landlords. But there are two ways in which the Crown and local authorities are in a special position. They arise under Part II of the Bill in relation to shops. Firstly, under Clause 14 of the Bill, a Government Department may resist a claim for renewal of a lease. And the House will remember that the scheme of the Bill, as of the Scottish Act, is that applications have to be made to the county court for renewal, and the county court, subject to certain guidance, has a discretion whether to renew or not and, if it renews, to renew on reasonable. terms.
  Government Departments may resist a claim for the renewal of a tenancy in the county court on the ground that it would be contrary to the public interest for the renewal to be granted, and the court will decide the matter. Secondly, the court will not grant a new lease if a Minister of the Crown certifies that another use of the premises is necessary on security grounds. I expect that the House will accept that that very limited protection is appropriate in the existing circumstances. My right hon. and learned Friend the Solicitor-General

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  also reminds me that the matter is covered by Clauses 10 and 14, and not only by Clause 14 as I indicated in passing. These are the only ways in which the Crown is exempted from the general provisions.
  Mr. Manningham - Buller: The Attorney-General referred to the two Duchies. Are we to understand that the Duchies object to being included
  The Attorney-General: I think that the proper way for me to put the matter is that we thought, as I am sure the hon. and learned Member will no doubt agree, that from the point of view of the obvious constitutional distinction between the Duchies and the private estates on the one hand and the Lands Commissioners and the Government Departments on the other, what was appropriate in one case was not appropriate in the other. We have had it from the Duchies that, in fact, they will implement the provisions of the Bill.
  And so, I come back to where I began. I have tried to put the matter objectively, and in addressing the House about this interim Measure I have deliberately avoided any reference to differences of political or social outlook—whether greater emphasis should be placed on the legal rights of the landlord or the social rights of the tenants, which may divide us when we come to deal with the permanent legislation and which, of course, did divide the members of the Leasehold Committee. There are those who will agree with me that the concept of the absolute ownership of the landlord should be replaced nowadays by what Lord Uthwatt called the dual ownership of landlord and tenant. There are others who will stick to the old legal concept and the enforcement of the rights of the landlord as they have been understood hitherto. In due time we shall have to argue all these things out.
  This Bill is intended to protect the unfortunate tenant in the interim period while we on both sides of the House are preparing to deploy our arguments and to marshall our permanent proposals. Everybody agrees that something must be done now for the ground lessee and the shopkeeper whose tenancies are about to fall in. We cannot allow their position to be prejudiced merely because we must, on
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  both sides of the House, take further time before formulating our own permanent proposals.
  There are many matters relating to this Bill which we shall obviously have to examine in detail on the Committee stage, and I have no doubt that in Committee a good time will be had, if not by all, at any rate, by all the lawyers, with the exception of the miserable Law Officers. We hope to receive assistance from hon. Members in all quarters of the House on drafting matters, and we already have a number of ideas in our own minds by which we hope to be able to improve the drafting of the Bill. If there are Amendments of substance which do not conflict with the principles of this interim legislation, of course we shall be ready to give very full and fair consideration to them.
  I hope the House will consider that on the whole, dealing as it does simply with an interim situation and intended to maintain the status quo, this is a good Bill. I hope the House will regard it as a good Bill, and will resist the strong temptation we all always have of making the better the enemy of the good. We have devoted a great deal of time and study to this problem, and we believe that in view of the great complexity and difficulty of all these matters, this is the most practicable temporary solution and that it should secure general support. Therefore, apologising for the great length of time which I am afraid I have taken, I trust that this Bill will receive a Second Reading.
  Mr. Hector Hughes: May I ask my right hon. and learned Friend a question about a matter to which he has already referred? He said that it was intended to introduce a similar Bill to deal with Scotland. Will that Bill be on all fours with this Bill, and will it deal with the feuing system of tenure which is peculiar to Scottish law?
  The Attorney-General: I should be very unwise indeed if I embarked on any discussion about Scottish law. I am nervous enough when embarking on any discussion about English law. I did say that the Scottish Bill would follow the principle of this Bill, with necessary changes owing to differences in the circumstances and facts and the difference in Scottish law.
  Mr. Hughes: I am much obliged.
  4.53 p.m.
  Mr. Selwyn Lloyd: In rising from this unaccustomed place on the Front Bench, I ask for the sympathy and understanding of the whole House. I have been wondering whether the physical prop which I now have in front of me, and which I find both convenient and at the moment necessary, is really adequate compensation for the closer view than usual that I get of the master race on the Government Front Bench. I think the whole House will feel that it is not perhaps inappropriate that on a Bill which has the words "Temporary Provisions" writ large in its title, the first speaker from the Opposition Front Bench should also have the word "temporary" in large letters after his name.
  I also ask for the sympathy of the House on another ground—one to which the Attorney-General has already referred. I find sufficient difficulty in making my meaning clear to the House at any time even on simple little subjects like double taxation or the European Payments Union, but to attempt a clear exposition on the law of landlord and tenant is indeed a task sufficient to daunt anyone. The Attorney-General, at the beginning of his speech, referred to the absence of the Lord President of the Council, and of course we accept the reason for that. Personally I had a sort of sneaking feeling that it might be that he had read the Report of the Leasehold Committee, or even the Bill, and that that was the reason he had not come here.
  The Attorney-General paid a compliment to the members of the Leasehold Committee. I think we all regarded it as a misfortune to be a member of that Committee because it was two and a half years of really hard labour. The interim Report had two minority Reports. The final Report had a note from the new Chairman differing from the majority interim Report, a supplementary note on residential premises signed by five of the members, a minority Report signed by two, and my own minority Report as far as business premises were concerned. I do not think that throughout the whole of those painful proceedings there was a single issue of principle or matter of detail upon which that Committee was not deeply divided; and the Committee, on the whole, did not consist altogether of
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  unreasonable people. This gives some indication of the complexity and difficulty of the problem.
  I entirely echo what the Attorney-General said about sympathy with the draftsmen, and I should very much like to know how many drafts of this Bill were produced before this one eventually saw the light of day. I should very much like to know a little bit more about the birth pains of the Bill. The Attorney-General dealt with some of the wide matters contained in the Committee's Report, and he said something about permanent legislation. I am not going to attempt to embark upon those matters today, because I think there are other more appropriate occasions for debating general matters like leasehold enfranchisement and the question of permanent legislation.
  Before looking at the Bill in detail and stating our attitude, I want to make one or two general observations which I consider relevant to the Bill. The first—and I expect this will be regarded as controversial—relates to the general tendency to attack landlords and leaseholds as evil in themselves. The landlord has always been a convenient target. I speak as one who has always been a tenant, and I know that the landlord is a very easy person on whom to vent either one's personal ill-feeling or one's political dislike. It is rather like the weather, or the Government of the day, or the National Coal Board, or even certain Ministers. They are very convenient receptacles for what one feels generally under the impulse of the moment. It is just about the same with landlords and the leasehold system. People are apt to talk about the system as if it were radically wrong in itself. I was glad that the Attorney-General did not go that far in his speech this afternoon.
  It seems to be forgotten by a great many people that it is of real benefit to a tenant that someone else should risk his capital in providing a house or business premises for the tenant. In the case of the shopkeeper, instead of tying up his savings in the purchase of premises, it enables him to use those savings as working capital for carrying on his business. Even the building lease for 99 years has in many cases undoubtedly enabled development to take place under proper control and proper planning, and

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  there are outstanding examples of that in London itself. As for the theory of it, it seems to me that there is much to be said for the idea that the land and the buildings should revert at the end of a period of 99 years.
  Mr. Leslie Hale: No.
  Mr. Lloyd: I am dealing for the moment with the theory. To begin with, the rent is calculated on that basis. Secondly, 99 years is probably a proper life for the type of building to be constructed. After that time it probably needs either rebuilding or a substantial capital sum to be spent upon it to recondition it or modernise it. It may well be that the whole estate may need to be redeveloped.
  Mr. Hale Mr. Hale rose—
  Mr. Lloyd: I will give way in a moment. I want to finish this part of my argument; I am dealing with the theory at the moment. The theory was that when the property reverted the landlord would spend the necessary capital sum, or someone else holding a new ground lease would spend the necessary sum, in modernising the premises or in redevelopment, and that modernisation or redevelopment certainly was of benefit to society.
  On that basis many intermediate contracts have been entered into—and the right hon. and learned Gentleman has spoken of this—and the value of the residue of the lease would be exactly calculated in accordance with the number of years it had to run. In fact, that system is very much the system, it appears to me, envisaged in Section 5 of the 1946 New Towns Act. It is very much the system which is envisaged in what is called comprehensive development of blitzed sites. In theory, I submit that there is a great deal to be said for the system. Of course, the trouble is that, owing to two world wars and the consequent housing shortage, in some cases the leases are falling in when there is an acute shortage of alternative accommodation.
  Mr. Leslie Hale: The hon. and learned Gentleman, who disagreed with me so courteously for two-and-a-half years on the Committee, made two propositions about building leases upon which I wanted to challenge him. First, he said there was
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  evidence that the rental charged for the land 99 years ago bore no particular relation to the economic value of the land and was necessarily cheaper. The second proposition, with which I found even more difficulty in agreeing, was that on the whole it was rather a good thing that the house should revert at the end of 99 years to the landlord because, he said, that was about its normal economic life. If so, how does the hon. and learned Gentleman justify the proposition that the tenant has to put the property into repair before it reverts?
  Mr. Lloyd: As far as the first point is concerned, there are many cases in which plots of land were let on building leases for sums like £1 or £2 a year. I suggest that those plots of land would certainly not have been let for those sums had it not been envisaged that there would be a building lease and at the end of 99 years the land and the property would revert. As far as the second point is concerned, it is quite true that there were repairing covenants in those building leases, but my point was that owing to the change in fashion, if you like, in structural methods, it is very likely—and I think this has been proved to be the case—that after a life of 99 years, even where the property has been kept in good repair, it needs reconstruction and modernisation.
  Mr. Janner: May I ask a question on that? If that is the case, will the hon. and learned Gentleman say why so many notices of dilapidations have been served by landlords upon lessees?
  Mr. Lloyd: Notices of breaches of contract have probably been served because there have been breaches of contract. I have been dealing with the theory, and I am prepared to admit that, owing to shortages, the theory has not worked out as it should have done. I will deal with that further point in a few moments, but I must point out that the difficulty over the system has been caused by two world wars and, to some extent, by too much legislation.
  So far as the landlords themselves are concerned, the evidence before the Committee was to the effect that the majority of landlords maintain high standards and that the problem has been how to make

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  the few bad landlords conform to the code of the vast majority. I think I am accurate in that, and I am certainly saying what I believe to be true. I do not think the right hon. and learned Gentleman would dispute that proposition.
  The second general observation I want to make is that changes in the law which impose alterations in the terms of a contract are highly undesirable, because one contract may be the basis for many others, and a reversion—that is to say, the right to possession at the end of a lease—is property just as much as a motor car or some Defence Bonds, are property. It can be valued, it can be bought and sold, loans can be made using it as security; and to start monkeying about with the terms of that contract causes uncertainty and hardship in the short run and in the long run causes diminished regard for the sanctity of contract, which is the basic necessity for any civilised community.
  The Attorney-General: Is that not exactly what was done by the rent restriction legislation introduced by Conservative Governments over a period of years, quite apart from the other legislation to which I referred?
  Mr. Lloyd: The right hon. and learned Gentleman is very touchy when we emphasise the sanctity of contracts. Of course, that was one of the great disadvantages of the rent restriction laws and all other legislation which has sought to regulate relations between landlord and tenant. It is only exceptional circumstances caused by the war which has made it necessary. This business of seeking, as far as possible, to maintain the sanctity of contract is in the interests of society, which is not an irrelevant consideration.
  The third general observation I wish to make is in regard to a matter mentioned by the right hon. and learned Gentleman—the fact that the law of landlord and tenant is in a hopelessly unsatisfactory condition. The right hon. and learned Gentleman referred, not altogether with approval, to one leading article in "The Times." I want to quote to the House the opening paragraph of the leading article which appeared on 22nd November, because I think it puts the
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  case very fairly from the point of view of both the tenant and the landlord:
  "The present century has witnessed a steady stream of enactments altering the rights and duties of landlord and tenant, almost always in the tenant's favour. Housing and planning legislation, land and agricultural Acts, rent restriction, amendments of the law of property and of landlord and tenant, to which must he added the effects of property taxation and of requisitioning and other official action under emergency powers—all these have sharply tilted the scales, formerly well weighed down on the owner's side. These reforms have not been systematic. Quite apart from the jungle of laws governing the control of rents, there is a tangle of measures regulating other aspects of contracts of tenancy which needs to be judiciously pruned and set in order. There are still matters in which the law might he further modified to the tenant's advantage, many others in which the landlord deserves fairer treatment."
  I think that is a very fair statement of the situation at present. It is very easy to forget that laws designed to benefit very often have the opposite effect. I do not think anything is doing more to produce slums today than the Rent Restriction Acts, necessary though they are at the present time. Laws which make the ownership of houses for occupation or for investment, and the keeping of them in repair, unattractive and uncertain and impossible, however well meant those laws may be, will ultimately defeat their object of improving social conditions.
  This Bill does nothing to clear that jungle or to untie that tangle. It is a moratorium. I think we might call it a "house freeze," in order to be consistent with climatic conditions, the fuel situation and Government planning; it is likely to add further complications to an already complicated situation and to make confusion worse confounded. The opportunity has been lost for giving immediate effect to some of the non-controversial matters suggested in the Report of the Leasehold Committee.
  The fourth general observation I want to make is with regard to the real cause of bad relations between some landlords and their tenants; it is the shortage of alternative accommodation, because the system must depend upon a certain amount of freedom of choice to the tenant, and it cannot be disputed that that does not exist in certain areas at the present time. As I said, the cause is two world wars, the interruption of house building and the redistribution of population.
  I see that the Attorney-General agrees, but I do not expect him to nod his head

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  when I say that, added to those causes, is the Government's failure to do as much as they could for the provision of houses—the mess, muddle and maladministration of the present Minister of Health. [HON. MEMBERS: "Oh."] I do not want to be controversial, and I do not admit that that last phrase enters into the field of controversy, because it is so readily admitted; but I do maintain that the real and the best contribution to a solution of these difficulties is more houses and more shops, not more Acts of Parliament making still more unattractive the building and the owning of property. I ask for the forgiveness of the House for delaying particular consideration of the Bill by those general observations, but I maintain that they are vital to a proper appreciation of the value of the Bill.
  Now, the Bill itself is divided into several parts. I shall deal first with the second part. The right hon. and learned Gentleman was so kind as to seek to attribute to me some of the paternity of Part II of the Bill. Well, we agree that in these exceptional times some additional statutory protection is required for the tenants of certain business premises, and that view, which is held on these benches, is based on the Scottish precedent. Part II of the Bill appears to be based also on that precedent, and if we are to accept the final Report of the Guthrie Committee, then the Scottish precedent does appear to have been a success. Therefore, we welcome Part II of the Bill.
  There was some argument about the Attorney-General's reference to something in my minority Report. Let me make my own position perfectly clear. During times of exceptional scarcity, I think that there is a case for a temporary Measure such as this which is being suggested. I also think that there are certain smaller matters in relation to the tenancy of business premises which do require permanent legislation. My feeling is that it is wiser to postpone important permanent legislation on this matter, should permanent legislation be necessary—which I doubt—until we have seen how the interim scheme works out. That was my interpretation of the word "ripe," and that is what I have always said throughout the deliberations of the Committee.
  Mr. Turner-Samuels: May I ask the hon. and learned Gentleman whether he agrees with the exclusion from this Bill of premises where wholesale businesses are carried on, and offices and lock-up garages, and things of that kind?
  Mr. Lloyd: The hon. and learned Gentleman has really anticipated what I was just going to say. Although we welcome this part of the Bill, there are one or two comments that I wish to make on matters of detail. As the Attorney-General has said, the Government have excluded from their purview premises other than shops. Speaking for myself, two or three years ago I do not think that I would have agreed with that view; but my present view is that I think the Government are probably right. I put it no higher than that.
  Secondly, with regard to a qualifying period of occupation, I should have thought that it was at least arguable that there should have been a qualifying period of occupation before the tenant got protection. After all, the theory of this is that a man who has built up a business should not be turned out, there being no alternative accommodation. It seems to me that before a business is protected, there should be a business to protect and a qualifying period. However, that is a point which can be further ventilated on the Committee stage.
  Mr. Ungoed-Thomas: Or his predecessors in business?
  Mr. Lloyd: I think it would depend on the nature of the business and the circumstances under which he acquired it.
  My next point on Part II is Clause 10. That, I understand, is based on the Scottish precedent, and it gives to the court a very wide discretion as to the terms on which renewal should be granted. In Scotland—I speak with great diffidence about Scottish matters—I understand that there is more chance of uniform action by the courts because most of the shop premises in Scotland are on annual tenancies, and they all fall in at the same time of year, and because, too, the country is considerably smaller.
  In this country, however, I wonder whether we shall not get completely different treatment in the county courts in one part of the country and in the county

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  courts in another. I should think, therefore, that we might have the Bill interpreted differently in different parts of the country, and that in one place the interpretation might be very much in the tenant's interests and in another place in the landlord's interests, and that it would be a matter of chance which county court one came before.
  I think it is arguable whether one should not seek to put something in the Bill in the way of a formula for a fair rental, which we sought to define in the final Report in paragraphs 178 to 185. That is a matter worthy of consideration during the Committee stage. I think I heard one hon. and learned Gentleman asking how we should determine what a fair market rental is. If he will read those paragraphs to which I have referred, he will see—
  Mr. Turner-Samuels: Is that not impossible? During times of acute shortage, how can one determine a fair rental?
  Mr. Lloyd: It would be better if the hon. and learned Gentleman would follow my advice, because this is one of the difficulties we sought to deal with, and it is covered in the paragraphs to which I have referred. As the hon. Member for Oldham, West (Mr. Leslie Hale) pointed out, a previous attempt had been made to deal with the matter in the interim Report.
  Mr. Leslie Hale: It excludes the scarcity value, which is one of the vita] elements.
  Mr. Lloyd: "Scarcity value" is a technical term, and I think that this is a Committee point, and that we had better discuss it in greater detail when we have the opportunity on the Committee stage; but there is, according to my recollection, a difference between the definition in the interim Report and that in the final Report. The one I was putting forward was the one in the final Report. [An HON. MEMBER: "In which paragraphs?"] Paragraphs 178 to 185.
  The fourth point on Part II is with regard to Clause 13, which excludes the right of appeal. Again, I should have thought that that was very questionable wisdom. I understand that the argument for excluding the right of appeal is that it is anticipated that the Act will last only a very short time. Of course, from a
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  county court in any case there is no appeal on a matter of fact, and therefore I should have thought it would have been wiser to have left in a right of appeal on a matter of law. Once again, however, that is a matter which should be fully ventilated during the Committee stage.
  So as far as Part II is concerned, we give it a welcome from these benches, subject to those points of detail, and subject to this comment, in which I hope I shall have the support of the hon. Member for Oldham, West—that the majority interim Report was dated 9th March, 1943, and the Government have been a very long time in doing anything about it.
  Mr. Hale: Hear, hear.
  Mr. Lloyd: So much for Part II. Part I is a very different proposition. Having been almost completely uncontroversial so far, I doubt whether I shall succeed in continuing so for very long. I think Part I is remarkable for two qualities—its cowardice and complication. It is by Complication out of Cowardice. So far as its cowardice is concerned, it postpones the whole problem. The alleged reason for this postponement is to give the Government time to make further investigations—to enable some Departmental committee to go further into all the problems concerned. Well, I recollect something that was said of William Ewart Gladstone in this House; that he could persuade most people of most things, but that he could persuade himself of absolutely anything. I felt that the Attorney-General was very much like that when I heard his explanation of the need for this postponement.
  The truth is that after years of propaganda, denouncing wicked landlords and the wicked Tories in alternate breaths, and after statements such as those in "Labour Believes in Britain" that
  "Labour will take steps to reform the law so as to do justice to the tenants,"
  after years of condemnation and claptrap, the Government do not know what to do, the Government cannot agree what to do, and the Government have funked the issue, and have further postponed it for two years, because they know perfectly well that, at the end of that time, there will be a Conservative Government firmly in the saddle who will have the responsibility for taking the necessary

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  decisions, and, incidentally, for clearing up the mess caused by this makeshift Bill.
  So much for cowardice. My first observation under the head of complications concerns the very different method adopted for people covered by Part I from that adopted for those covered by Part II. The Attorney-General really admitted, inferentially at all events, the manifest injustice of continuing, even for two years, rents fixed 100 years ago without any discretion for the court to vary them. Under Part II the court has complete discretion, but under Part I there is no chance for the court to intervene, and I think that some alternative proposition to that will certainly have to be examined in Committee. A rough and ready test might be the net ratable value, or something of that sort. There are alternative methods which would be much better rough justice than this perpetuation of rents fixed 100 years ago.
  The first complication is that anyone who has bought the fag-end of a lease has it extended. For example, in August of this year a man might have bought a fag-end of a lease due to expire in a year's time for £100, with a ground rent of £5. This Bill extends that lease for two years. In other words, it makes that man a present of £190. Conversely, someone who may have spent a substantial sum of money in purchasing a reversion with the intention of living in the house, possibly carrying on a business, letting lodgings, or something of the sort, has his right to possession postponed for two years. It is at his expense that the purchaser of the fag-end is to get the sum of money to which I have referred. So, the first beneficiary under this great piece of Socialist legislation is the speculator in fag-ends. I ask the right hon. and learned Gentleman to contrast with that the method of dealing with the purchaser of fag-ends which the Conservative Government adopted when it introduced the Leasehold Property (Repairs) Act, 1938.
  The second complication is that a ground lessee who has bought the fag-end of a lease may be living in one room and letting off all the other 14 rooms of the house at exorbitant rents. He may be frankly profiteering, because I think I am right in saying that the rents of the other rooms would not be controlled. He may be paying a tiny ground rent, but he may
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  have huge rents coming in. The ground landlord seeking to obtain possession may be some perfectly worthy public body, while the ground lessee who is in occupation of only one room is protected under Part I of the Bill. Therefore, the second beneficiary under this great piece of Socialist legislation is the profiteer.
  The third complication under Part I is that a ground landlord may be waiting to re-develop and modernise a whole block of property. There may be one lease which they are waiting to fall in to enable them to carry on with this job. A tenant may have gone in well knowing the position, and that single tenant can hold up the whole scheme of improvement. So, the third beneficiary under this great piece of Socialist legislation is the obstructor of progress and development. These are the people who are protected under Part I.
  The Attorney-General very nearly anticipated my next point. He did so with regard to the question of no enforcement of covenants, except those with regard to rent and insurance. It seems very curious that it should be impossible to enforce a covenant not to assign the premises in view of the purpose of the Bill. He mentioned a covenant not to use a house for immoral purposes. That cannot be enforced under this Bill, even if an order of the court has actually been obtained but not put into effect, under paragraph 4 of the First Schedule. So, the fourth beneficiary under this great piece of Socialist legislation is the brothel-keeper.
  Added to that, for the first time, as is pointed out in the leading article in "The Times" today, there is direct encouragement given not to keep premises in repair. Therefore, the Government really come forward as supporters of rack and ruin—
  Mr. Turner-Samuels: I am sure the hon. and learned Gentleman wants to be fair.
  Mr. Leslie Hale: He does not.
  Mr. Turner-Samuels: Is there not merely a suspension for two years? There is a suspension of a right of action for two years, but at the end of that time the right of action revives and action can be brought for breach of the covenant.
  Mr. Lloyd: It is difficult to forecast the future, not knowing what this great moratorium will produce, but the plain

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  fact of the matter is that if a tenant should permit property which is now in a good state of repair to fall into disrepair in the course of the next two years, there is no means of enforcing any covenant to repair, against him in any way.
  Mr. Turner-Samuels: During the moratorium.
  Mr. Lloyd: During the moratorium there is no means.
  Mr. Turner-Samuels: I agree.
  Mr. Lloyd: When the hon. and learned Gentleman just now sought to suggest that I was not being fair in the matter, his hon. Friend joined in by indicating that I did not want to be fair.
  Mr. Turner-Samuels: No, I said I was sure the hon. and learned Gentleman wanted to be fair, but my hon. Friend doubted it.
  Mr. Lloyd: I acknowledge my gratitude to the hon. and learned Gentleman. It was with his hon. Friend that I was joining issue. I am glad that the hon. and learned Gentleman agreed with me in my most reasonable and wise proposition, because every one of the cases I have given are cases which fall within the provision of Part I of the Bill as it stands.
  Then we come to Clause 5. I do not know whether any hon., right hon. or hon. and learned Member has sought to read Clause 5. The Attorney-General gave a fairly simple explanation of what the Clause was intended to mean, but I defy him to deny that there is considerable obscurity about its terms. I hope that in reply to the debate the Solicitor-General will go in some little detail into Clause 5 and explain just exactly how it carries out the apparently simple purpose of the Attorney-General.
  I propose to read to the House a letter which appeared in "The Times" yesterday with regard to this Clause:
  "The tangled mass of rent restriction law is about to be further complicated by yet another prize example of bewildering draftsmanship. I refer to the Leasehold Property (Temporary Provisions) Bill, and give a simple example to show the complexities of Section 5 of this measure:—
  A freeholder A, in 1929, granted a lease for 22 years to B, which comes to an end in 1951. In 1940 B sublet for the remainder of the term less 10 days to C (i.e. this letting is less than 21 years). C then divided the property into
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  four separate flats which he sublet to D, E, F, and G on yearly contracts. The house as a whole is outside the control of the Rent Acts having a rateable value in excess of £100. Under Section 5, D, E, F, and G would appear each to be persons having a right of occupation derived from a sub-tenancy,' and the section gives them such rights against the 'reversioner' as they would have if the 'tenancy' were hypothetically continued for two years after the commencement of the Act.
  C would presumably he the reversioner under the 'definition' in subsection (4), but the wording is highly ambiguous. But C's lease s not a superior tenancy ' because the section defines a superior tenancy as one granted for a term of years certain exceeding 21 years. Consequently, the presumed intention of the section, i.e. to protect D. E. F, and G, is not given effect to, because under existing law D, E, F, and G are not protected by the Rent Acts owing to the decision in Cow v. Casey, December, 1948. In this case it was held that a tenant of an uncontrolled house, the rateable value of which took it outside the Rent Acts, could not by sub-letting portions create statutory tenancies of these parts valid against the landlord at the termination of the lease. Lastly, there is subsection (3). As I read this paragraph, the sub-tenancies in the above example of D, E, F, and G are not sub-tenancies at all because they are not created immediately out of a superior tenancy (which must be for more than 21 years).
  On the other hand, if the meaning of the whole section were to he construed in such a way that C were a sub-tenant and D, E. F, and G 'persons claiming under him' by virtue of the definition in the last paragraph in subsection (5), then C could again not claim protection (and consequently neither could D, E, F, or G as persons claiming under him) because C is not living in the property. Surely it is possible to avoid the trail of needless litigation which such draftsmanship as this is bound to leave in its wake. Why must the unfortunate judges he faced with the task of interpreting such ambiguity? No doubt in the House 90 per cent. of the non-legal Members will lamely permit the section to be passed in a fog of incomprehension, while the legal Members will remain justifiably baffled and probably powerless to effect any improvement."
  The Attorney-General: I want to relieve the hon. and learned Gentleman of his misery. The letter in "The Times" was written by a gentleman who had obviously given very careful and able study to this matter. I do not want to say anything in derogation of it. He assumed we wanted to catch Cow v. Casey. It was not and never has been the intention of this Bill to deal with the case of Cow v. Casey. The Leasehold Committee made no recommendation that Cow v. Casey should be dealt with. It made recommendations that Knightsbridge Estate v. Daly should be dealt with urgently. We are dealing with that on the advice of the committee. We are

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  going to deal with that one in the case of a long lease. Cow v. Casey, which seems to have given rise to no practical difficulties, we are leaving. I indicated in my speech that we are already considering a number of drafting Amendments which we want to make—and this Clause is obviously the subject of some of them—on Committee points.
  Mr. Lloyd: The right hon. and learned Gentleman seems to have pleaded guilty by that speech. The purpose of reading that letter was to emphasise the complications and obscurity of this particular Clause. The right hon. and learned Gentleman admitted them, and has indicated that the Government will try to make obscurity less obscure during the Committee stage. The fact is that, considering the purpose of this Bill and the short time it is expected to be going to have effect, it is an extremely complicated and difficult Measure. I am referring to Part I. The fifth beneficiary, I was going to say—and I adhere to that view—of this great piece of Socialist legislation will be the lawyer, or should the lawyer go off his head in trying to interpret the Bill and advise his client upon it, then the keeper of the lunatic asylum. I could give more examples of the complications and anomalies.
  This is what the "Daily Herald," in its leading article yesterday, called "Labour applying its mind to a problem." The fact is that there is a much simpler method of dealing with the problem. I admit—and I have never denied—that there is a problem. There are cases of real hardship. There are cases of people—nothing like so many as are made out, as appears in the paragraph, the first sentence of which the right hon. and learned Gentleman read—where people have been in houses for many years. If supply and demand were equated it would be a sentimental wrench for them to leave their houses, but it would be possible for them to find others as convenient or as suitable. I believe that in these matters most landlords are in fact reasonable, but it cannot be disputed that, in law, such a tenant is at the mercy of his landlord at the present time, so far as renewal is concerned.
  If the tenant has to go—and as I say it is a very exceptional case—it might literally mean that that tenant is going
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  on to the streets, because in many parts of the country it is impossible to get on to a housing list unless one is actually without a home in which to live. [HON. MEMBERS: "Oh."] For these people I believe that a very much quicker and simpler remedy is to give to them the right to a rent-restricted tenancy. As I say, that right to a rent-restricted tenancy will put them in a position to bargain on much more equal terms with their landlord. If the right is exercised, they will have their occupation of the premises protected at a comparatively modest rental.
  If, as I hope, the right does not have to be exercised, it will mean that the landlord and tenant have come together and made a new bargain on reasonable terms for the prolongation of the lease. I admit at once that even this proposition is not a simple one—there are difficulties of covenants to repair and things of that sort—but I submit that it is a much simpler proposition than Part I of this Bill.
  This was the unanimous view of the committee. It is the only thing on which the committee were unanimous, and that in itself is sufficiently remarkable for the Government to have taken some action about it. It was urged on the Government at an early stage in the deliberations of the committee. It was in November, 1948, that Lord Uthwatt wrote to the Lord Chancellor to put forward this unanimous view of the committee. It was by 17th November, 1948—I checked these dates—that he received a reply from the Lord Chancellor saying that the view had been put before the Minister of Health. Nothing whatsoever has been done by the Government since then to seek to implement that recommendation. It ended up, so far as we know, at the Minister of Health, and I can only say that on his shoulders apparently must rest responsibility for failure to take any action.
  The reason that the committee took the step of unanimously putting forward that recommendation in November, 1948, was because at that time there was about to come before this House a Measure, part of which this proposition could conveniently have been made. I say that the Government have to face a very serious indictment on this question of failure to take action to do something to help these people. There has been a lot of talk

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  about the Hammersmith case recently. I do not know the rights and wrongs of it, but I know that had this proposition, put forward in November, 1948, been carried out by the Government, there would have been no anxiety on the part of anyone in connection with the Hammersmith property. [Interruption.] It was to give the right of a rent-restricted tenancy on the expiry of a lease. I did not dispute that there were certain difficulties, but I said that it was a simpler proposition than the proposition which the Government are putting forward.
  I submit that the Government's record in this matter—and certainly so far as the majority interim Report is concerned and so far as the matter with which I have just been dealing is concerned—has been really one of procrastination and delay. They have ended up with this Bill, Part I of which, I submit, is full of anomalies, injustices and obscurity. We believe that some action is necessary. We are ready, as I have indicated, with our proposals. We propose, therefore, to give the Bill a Second Reading, and to seek in Committee to make it match more nearly the needs of the people at the present time.
  5.40 p.m.
  Mr. Ungoed-Thomas: One thing I have in common with the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) is that we are both guilty of having signed a minority Report, although not the same minority Report. On the other hand, I am pleased to know that the hon. and learned Member for Northants. South (Mr. Manningham-Buller), with whom I have signed the same minority Report, will be winding up this debate for the Opposition.
  The difficulty the Government are in is that of deciding precisely what should be done. It is very easy to come to a conclusion, as the Opposition have done, that something must be done. It is a very difficult thing to produce some proposal which, in a matter of this nature, cannot be riddled with criticisms of one kind or another. The hon. and learned Member made a number of criticisms, with several of which I am in complete agreement. They are criticisms of detail—Committee points. I was very glad to hear my right hon. and learned Friend indicate that there are matters in this Bill which the Government will consider
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  sympathetically for amendment when we come to the Committee stage.
  Let me say straight away that, on the main principle of this Bill—the question of moratorium or no moratorium—I am in complete agreement with the Government. I should like to turn to one or two matters of comparative detail, and then come to the fundamental difference of principle which separates the Opposition from this side of the House with regard to the reform of the law of landlord and tenant. I will deal with Part II of the Bill first. My first criticism is that the limitation to shops is too restricted. I am very glad that the hon. and learned Member for Wirral signed a Report at one stage which recommended that all business premises should be included in a measure of protection. I understand that he has now withdrawn from that position. I do not know how far he has withdrawn from that position, but it is now a matter of considerable doubt whether he would support such a proposal or not.
  Mr. Selwyn Lloyd: I thought that I made that clear. I said that two or three years ago I was in agreement with the proposition not to restrict it to shops, but that at the present time I thought that the Government were probably right.
  Mr. Ungoed-Thomas: That is precisely what I said. No one who has signed any of these Reports has suggested that the restriction should be to shops only. The majority Report states:
  "The protection afforded by the Act should apply to tenants of all types of business premises, including premises used for trading, manufacturing, and professional purposes, whether profit-making or non-profit-making."
  There were a few who dissented from that recommendation, but even those who dissented considered that it should be extended.
  "to trades, professions and businesses carried on for profit."
  In other words, the line of demarcation should come, not between shops and other business premises, but between profit-making premises and non-profit-making premises.
  The evidence before the Committee established that professional premises, manufacturing concerns and non-profit-making concerns are all in need of protec-

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  tion. The evidence established that all needed security of tenure, and all suffered because they have not got security of tenure.
  I will now quote from the interim Report which the hon. and learned Member for Wirral signed. Hon. Members will note the reasoning of that Report, which is as valid now as it was in 1949 when the hon. and learned Member signed it.
  "The evidence submitted to us shows that no class of business activity is immune from the dangers of exploitation by landlords. Trades, lawyers and professional men generally, trade associations and trade unions, professional and voluntary bodies of all kinds need protection equally with industrialists, shopkeepers and other businesses."
  It is established on the evidence, and it is the unanimous decision of that Committee, including the hon. and learned Member, that this should not be confined only to shops. I hope that when we come to the Committee stage the Government will consider Amendments which will propose the extension to other premises.
  The second line of criticism—and here I agree with the criticisms made by the hon. and learned Member—is the question of greater precision in the directive to the court. Clause 10 (1) follows the Scottish Act. I appreciate that it has worked in Scotland, and the reasoning of the hon. and learned Member indicating the reasons why it may not work as satisfactorily here, and there are other reasons which I could produce to support the same conclusion. The Clause leaves it wide open to the courts to decide what is to be done. The words are:
  "The court may, if in all the circumstances of the case it appears reasonable so to do, order that there shall be granted to the tenant a tenancy for such period, at such rent, and on such terms and conditions as the court in all the circumstances thinks reasonable,"
  A purely drafting point arises here. I do not know why the word "may" should be used instead of "shall," when it is followed by the phrase
  "if in all the circumstances of the case it appears reasonable so to do."
  That serves to emphasise, however, the width of the discretion that is given to the courts. There are no principles established in this Clause for the guidance of the courts. It is an "oak tree" discretion. It is an onerous duty to put on any court. We have experienced this in administering the Inheritance (Family Provision) Act,
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  where a wide discretion was given which is exceedingly onerous and difficult for the judges to administer.
  We have here the same kind of uncertainties, with the possibility of decisions which may vary with, to quote a phrase that is familiar to my right hon. and learned Friend, the "length of the judge's foot." We ought to have greater precision in the Clause. Both the majority Report and the interim Report provided greater precision than is provided in the Bill. With my hon. Friend the Member for Oldham, West (Mr. Leslie Hale), I would prefer the decision of the interim Report, which was signed by the hon. and learned Member for Wirral. The provision in that Report with regard to rent is better, unless the hon. and learned Gentleman now also wishes to withdraw from the position which he adopted originally in this Report.
  Mr. Selwyn Lloyd: When the hon. and learned Gentleman talks about my signature to the interim Report, I would ask him to read the last paragraphs in my minority Report to the final Report, in which I made it clear that there were differences of detail with regard to the interim Report. There were many kinds of differences in detail, which were readily acknowledged, and before I signed the Report I made that perfectly clear. It was generally known at the time that we were not accepting every detail and every formula contained in the Report.
  Mr. Ungoed-Thomas: I accept at once that that is so in matters of detail, but this is not a matter of detail. The rent to be assessed is a matter of vital importance. Every single Member of the House will appreciate the importance of that. Every single member of the Committee appreciated its importance. An enormous amount of time was spent on it. Meeting after meeting was spent in making the definition, which is included in the interim Report. I cannot accept the statement that what the hon. and learned Gentleman states in his minority Report can in any way be read as excluding his signature from a vital decision on rent, which is included in the interim Report.
  Passing from the rents and the terms of leases, may I come to another matter which is of importance in dealing with the precision which is required under

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  Clause 10 of the Bill. I suggest that the right of renewal given to the tenant should be a prima facie right of renewal. This is an emergency scheme. It is the practice of good landlords to continue a tenancy for a sitting tenant. For practical reasons, with which the hon. and learned Member for Wirral is familiar, it is far easier to administer a provision which provides for a prima facie right of renewal.
  This is an emergency scheme limited to two years, and it is clear that, administratively, it is far better, in accordance with the practice which has already been followed by good and responsible landlords, to lay it down quite clearly in this Clause that there shall be a prima facie right of renewal, followed, of course, by the exception that renewals should not be granted in particular cases. In the interim Report, which the hon. and learned Member for Wirral approved, the proposal was for a prima facie right of renewal. And when it came to signing the final Report, the hon. and learned Gentleman aligned himself in favour of a prima facie right of renewal. I hope that in the Committee stage we shall have the support not only of the hon. and learned Gentleman but of his party as well.
  Mr. Leslie Hale: Further, in the final Report the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) protested that the interim Report had not been put on the Statute Book.
  Mr. Ungoed-Thomas: Yes, he has done that in this House and with that I agree. I too should like to see the interim Report on the Statute Book.
  There are two other very small matters with which I wish to deal in regard to shops. There are grounds upon which refusal is made compulsory. These grounds include alternative accommodation and greater hardship. I merely make the comment that both these matters are matters of considerable complexity. The greater hardship provision, in particular, has led to great heartburnings since its inclusion in the Rent Restriction Acts. I hope both those grounds can legitimately be left out of a short emergency Measure of this kind.
  I welcome Part I of the Bill, and it should be borne in mind—and I am very glad that my right hon. and learned
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  Friend the Attorney-General emphasised it in opening the debate—that this is not so much a temporary Measure as an interim Measure. It is something to hold the position until further legislation is brought in.
  I do not conceal from hon. Members for a moment that I should have much preferred a permanent Measure at this stage. I should have preferred, as the hon. and learned Member for Wirral suggested, and as we all recommended, that the Rent Restriction Acts should be immediately applied to ground leases. I should have preferred, as my hon. Friend the Member for Oldham, West would prefer, the minority Report on leasehold enfranchisement. But I appreciate the difficulty in which the Government are in dealing with this matter, and I am afraid that some hon. Members in the House may not realise it to the full extent that lawyers do.
  It is a matter of very considerable difficulty to apply the Rent Restriction Acts to ground leases, because it involves changing the whole nature of the lease from that of a ground lease into that of an ordinary occupational, controlled rent tenancy. That involves changes in the position with regard to covenants; it means recasting the whole lease and fitting it into an entirely new setting. Not only is it difficult to recast and fit it to the Rent Restriction Acts, but perhaps even more important is the difficulty which county court judges or other tribunals will have in administering the provisions and actually working out the conversion of the leasehold from a ground lease into a controlled lease.
  Mr. Janner: I hope my hon. and learned Friend the Member for Leicester, North-East (Mr. Ungoed-Thomas) will point out that there are many people who are not in agreement with that point of view, and that it will be a simple matter to continue the leasehold of their present holding.
  Mr. Ungoed-Thomas: My hon. Friend has in mind precisely what I am not talking about. He has in mind continuing the present ground leases. That is what the Bill does in the two-year tenancy. I am dealing with the proposal of the Committee, which is entirely different, that the Rent Restriction Acts should be applied to the ground leases.

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  My hon. Friend is in complete agreement with Part I of this Bill and suggests it should be a permanent provision. That was not, in fact, the recommendation of the Committee. All I am saying now is that I, personally, would welcome the Rent Restriction Acts being applied to ground leases, but that I appreciate the difficulties with which the Government are faced in enacting that at this moment.
  I did refer to this as an interim Measure. I hope that the interim Measure will be preliminary to four permanent pieces of legislation: first the extension of the Rent Restriction Acts to occupying leases; secondly, leasehold enfranchisement; thirdly, a permanent scheme of security of tenure of all business premises; and fourthly, a permanent scheme of security of tenure for all residential tenants outside the Rent Restriction Acts.
  What are to be the principles of the permanent scheme and the principles we should have in mind in approaching this Bill? The differences that existed in the Committee are of some significance. They were not differences of a technical nature but were fundamental differences of principle based upon differences in social and political outlook. One can claim, as a result of the workings of the Committee that all those four Measures to which I have referred, and which I hope will become permanent, are perfectly feasible.
  It is purely a matter of political decision whether or not they will be put on the Statute Book. Our principles on this side of the House are entirely different from those of hon. Members of the Opposition. We consider that a landlord's interest in property is purely financial, whereas the tenant's interest is that of user. The landlord's interest is in what he can get out of the property, while the tenant's interest is in the actual use of the property itself. The tenants, therefore, have a closer and more real interest in their homes or business premises, than have the landlords, who are now considered as predominantly the owners.
  We consider that the landlord's absolute ownership should be replaced by dual ownership of landlord and tenant. The Opposition are basing themselves the whole time upon the sanctity of contract and the rights of property. Those matters are fully discussed in both the majority and minority Reports. We do not take
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  the view that there is sanctity in a contract which we consider unjust in its origin and in its incidence. We do not consider that there is a justifiable right of property when that right does not serve the happiness of human beings but cramps their enjoyment in the use of the property.
  The Liberal position in relation to this great problem is one of some ambiguity and difficulty. In the past, the Liberals have been very strong in their condemnation of the ground lease system.
  Mr. Emrys Roberts: And still are.
  Mr. Ungoed-Thomas: Unfortunately, that is not true of every one of them. The Select Committee of 1886 which considered this matter produced one of the great Reports on the subject. The minority Report favoured a measure of leasehold enfranchisement and its signatories included all the Liberals on the Committee. They stated that the building lease system was proved—and here I quote—
  "(1) To have been maintained by private Acts of Parliament framed on the lines of ecclesiastical and family settlement avowedly in the interests of the landowners. (2) To have led to bad building. (3) To have imposed vexatious and harassing covenants on lessees. (4) To have kept property in insanitary and dilapidated condition at the 'fag-end' of the lease. (5) To have charged lessees with exorbitant fees and law costs. (6) To have separated ownership and occupancy and to have brought in being a number of intermediate interests of middlemen and ultimately of house jobbers. (7) To have inflated rack rents on both houses and tenements."
  The late Mr. Lloyd George, when he was Chancellor of the Exchequer, considered this matter to be of such vital interest for the Liberal Party that he set up the Land Inquiry Committee, which reported in 1912, before the First World war. This is what that Report said about the building lease and ground lease system:
  "Speaking generally, the introduction of the system has only proved possible where landowners were few and acted in actual or tacit combination. Its parents are the monopoly of the landlord and the necessity of the tenant, and its creation has aggravated all the evils of land monopoly."
  It is remarkable, after all that, that we should not have had signing the minority Report in favour of leasehold enfranchisement the solitary Liberal Member who was on that Committee.

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  Not only did that hon. Gentleman not sign the Report in favour of leasehold enfranchisement, but in the majority Report he commended for investigation a proposal that, not the lease owner, but the freeholder, should have a right of compulsory purchase—a complete reversal of the Liberal position.
  Mr. Emrys Roberts: The hon. and learned Gentleman, in reviewing the Liberal position, should take note of the Liberal election manifesto last February which stated specifically that the Liberal Party were in favour of leasehold enfranchisement and of enabling leaseholders to buy freeholds at a fair price. The hon. Member to whom reference has been made by the hon. and learned Gentleman is unavoidably absent.
  Mr. Ungoed-Thomas: I am very sorry. I fully expected the hon. Gentleman in question to be here. However, I am dealing with the Liberal Party and fortunately there is a Member of the Liberal Party present who can speak for the Liberal position. The hon. Gentleman to whom I have referred has his own mind and is entitled to his own views, but I am entitled to deal with the position of his party. I am delighted to hear from the hon. Member for Merioneth (Mr. Emrys Roberts) that on this issue the Radical wing of the Liberal Party has prevailed. I hope the Liberal Party will give unanimous support to the Bill.
  Mr. Emrys Roberts: Perhaps I might use the Liberal phrase, "Wait and see."
  Mr. Ungoed-Thomas: I hope the hon. Gentleman is not backsliding already in his nervousness about his companions.
  Taking the Bill as an interim Measure and a stopgap to hold the present position until other arrangements can be introduced, I am wholeheartedly in favour of it. I hope that in the Committee stage it will be improved in some respects, and that all hon. Members will participate in strengthening it and in preventing any steps which might be taken, as already indicated, to weaken it. I strongly support this Measure.
  6.9 p.m.
  Mr. Donald Wade: May first, congratulate the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) upon his elevation to the Opposition Front Bench, although he says
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  it is temporary? I am sure we all wish that it may be permanent and not limited to only two years.
  I find myself very much more in agreement with the hon. Member for Leicester, North-West (Mr. Janner), than with the hon. and learned Member for Wirral on this occasion. Although the Bill could be improved in Committee, the House should support it on Second Reading as an attempt to deal temporarily with grievances which undoubtedly exist under the leasehold system and under our present law of landlord and tenant. This is only a stopgap Measure. The Attorney-General calls it "a temporary standstill." I should be happier if a Measure had been introduced immediately after the interim Report, for in that case, by now we might have been in a position to discuss legislation of a more permanent nature. Had that been done perhaps many of the hardships which have occurred during the last two years would have been avoided.
  But however much one might wish that something had been done sooner, that is no reason for not supporting this interim Measure now and the sooner it is put on the Statute Book the better, because leases are still falling in and tenants are still being given notice to quit. If the Bill does not become law until the end of January or February—I am only surmising that—there may be many more cases of hardship with which the Act will not deal.
  I have been studying the Bill to try to reach a conclusion about the position of those whose leases have come to an end or have been given notice to quit, but are still in occupation when the Bill comes into effect. A lease may come to an end, but the tenant may still be in occupation and willing to pay the rent and to continue his tenancy. The rent may not, however, have been accepted by the landlord. A retailer may have received notice to quit, but may not actually have left the premises when the Bill comes into force. Clause 2 contains the words:
  "… living in the property … in continuation of the tenancy .."
  In Clause 8 there is the expression:
  "… occupier of a shop under a tenancy …"
  I am not sure whether the cases I have mentioned would be regarded as "in continuation of the tenancy" or "under a tenancy." Though he might still be in possession, in such circumstances the

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  occupier might find that he has no remedy under the Act. On the other hand, if the test is actual occupation it would seem that there is every reason for the landlord to hurry up and get the man out or get him to agree to a higher rent before the Bill comes into force. I am not suggesting that all landlords would do that, but some might do it. Whichever view one takes, it is clear that the sooner the Bill is passed the better. Also, the sooner permanent legislation is introduced the better, because this is just another case of piecemeal legislation, and we have had far too much of that already.
  I agree that as a temporary measure it is necessary to divide the Bill into two parts, one dealing with long leases and the other with retail businesses, although there is a strong case for including other business tenancies. As a Yorkshireman I have not the experience of long leases which some other hon. Members have, for in Yorkshire there is a preference for owning the freehold. I do not know whether that is due to the sturdy independence of Yorkshiremen or to their foresight. I must not pursue that too far because the greater part of my own division is leasehold. The builder in Yorkshire has always preferred to buy the freehold of his land, and if necessary, raise a mortgage. He has always disliked long leases. Some of the evils of the leasehold system have undoubtedly been avoided as a result of that.
  In paragraph 64, on page 24, the Report says:
  "One witness with great experience in conveyancing attributes the deterioration often observable in urban leasehold property towards the end of a long term to the multiplicity of interests commonly intervening between the freeholder and the occupying tenant. …"
  To a certain extent we have been able to avoid that evil in Yorkshire through not having the long lease system. To those who uphold the leasehold system, I would say that experience in Yorkshire suggests that that system is not inevitable or necessary and that we can get along without it.
  As to Part I of the Bill, I can appreciate the reason for not creating a tribunal to which application should be made but giving a right to continue for a limited period. I am not entirely happy, however,
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  about the covenant to repair. I am thinking not so much of claims for dilapidations as of essential repairs, and I suggest that an Amendment might be introduced to deal with essential repairs within the period of two years.
  Mr. Janner: Does the hon. Gentleman appreciate that if a repair is really essential the local authority has the power to enforce the carrying out of the repair?
  Mr. Wade: I appreciate that, but it is only in very extreme cases.
  As to permanent legislation, I feel that it would be outside the scope of the discussion on this Bill to give at any length my views as to what should be done.
  Mr. Leslie Hale: Why not? This is the Second Reading.
  Mr. Wade: If I may put my view briefly, our aim should, be first, to remove the injustices which undoubtedly exist and, second, to encourage the ownership of property by occupiers, and, particularly in the case of dwelling houses, I would favour the tenant having the right, with due safeguards, to apply for the transfer of the freehold. I am only speaking in very general terms, but those are my views.
  Another point which I wish to raise concerns the word "family," which is used in Clause 2. It is true that it has been defined by a series of cases, but it has led to a good deal of litigation under the Rent Restriction Acts and it would be helpful if the word could be defined.
  Mr. Turner-Samuels: Is not the reason for that, that it would create inconsistency and complications between the meaning of the word as used in the Rent Restriction Acts and in the Bill, if such a definition as the hon. Member suggests were included in this Measure?
  Mr. Wade: I appreciate that. The real remedy, in the long run, is the overhaul of the Rent Restriction Acts.
  Mr. Turner-Samuels: With that I entirely agree.
  Mr. Wade: I support Part II of the Bill, which gives the retailer greater security of tenure. I have already mentioned that I should like to see this extended to other business tenants. I have always been a critic of the Landlord and Tenant Act, 1927. I can recollect

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  the outcry about the leasehold system which led to the introduction of that Act. I can remember being very critical of the Act, I admit that I was only a law student in those days and had not reached the age at which one appreciates how little one knows.
  Mr. Follick: How old is that?
  Mr. Wade: The Landlord and Tenant Act, 1927, was intended to give greater security of tenure, but so many conditions were inserted for the benefit of the landlord that it has not been of very great value to the business tenant, particularly as regard security of tenure. As hon. Members will appreciate, the tenant has to prove a great deal before he gets a renewal of a lease. He has to prove that he is entitled to a claim for loss of goodwill—which is not easy under the Act—that the granting of compensation would not be adequate, and that he can only be relieved by a renewal of his tenancy. I welcome this part of the Bill, but I should like to see a radical reform of the Landlord and Tenant Act, 1927.
  In the meantime, there is a considerable degree of uncertainty, which really is my main criticism of this temporary Measure. It leaves both landlord and tenant in a state of uncertainty. The latter does not know quite what to do about alterations and improvements, because be does not know what is to happen at the end of his 12 months or of his second year.
  I refer now to Clause 13, in connection with appeals. I appreciate the wish not to put great legal expense on to tenants, or landlords either, for that matter, but if there is no right of appeal, on matters either of fact or of law, and no guidance is given as to how the Act should be administered as regards fixing rents, imposing conditions, and so forth, then there is bound to be very considerable variation between the decisions in different county courts. That will lead to a sense of grievance where comparisons are made between one decision and another.
  Lastly, on the subject of uncertainty. This affects my constituents to a considerable extent—I refer now to both parts of the Bill—because the greater part of Huddersfield is leasehold. I do not think I should be unfair in comparing it with the Bournville Estate, which is referred to
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  on page 138 in the minority Report. In a reference to the Bourneville Village Trust, there is this sentence:
  "There is here no exploitation of a monopoly position or divorce between social function and ownership."
  It so happened that in September, 1920, the Huddersfield Corporation acquired practically the whole of the centre of Huddersfield and a considerable part of the suburbs from the Ramsden Estate. I think that that was a wise step. The policy which has been pursued has been in keeping with that sound Liberal doctrine that land values created by the community should accrue to the benefit of the community. As leases have fallen in, the practice has been to grant renewals when applied for, the adjustment in the rent being in accordance with the increase in site value. From time to time applications are made for extensions for longer periods, and these are dealt with on a similar footing. For some little time, however, these applications have been held up because of the uncertainty about the legal position.
  When permanent legislation is introduced I shall probably contend that cases such as the Bourneville Estate and the Huddersfield Corporation should be dealt with in a special category.
  Mr. Ungoed-Thomas: The minority Report proposes that.
  Mr. Wade: Yes, but I thought it only right to mention it.
  On the general position, taking the leasehold system throughout the country as a whole, I do not find myself able to accept the argument about sanctity of contract in this respect because, while we do not know a great deal about the circumstances when the leases were originally created, it seems probable that there was not equality between the parties at that time; at any rate I do not feel able to put great weight upon that particular argument. Be that as it may, there are undoubtedly many grievances and injustices under our leasehold system and under the present law of landlord and tenant so far as it affects business tenants. Therefore, I believe that reform is urgently needed, and I hope that it will not be long delayed.
  Mr. Llewellyn: Would the hon. Member say whether it is still the long-term policy of the Liberal Party to enfranchise leaseholds?
  Mr. Wade: I hesitate to speak for the whole of the Liberal Party. [Laughter.] I made that remark well knowing that it would probably cause laughter at my expense. I believe that a distinction has to be made between dwelling-houses and business premises, but I think I am right in saying that that is still the long-term aim of the Liberal Party.
  6.27 p.m.
  Mr. Donnelly: I feel very diffident in intervening in the debate, as I am, I believe, the first layman as yet to have had the temerity to open his mouth. I think that probably one of the great difficulties of the whole leasehold problem has been that too many lawyers have been mixed up with it already. As I have been listening to the debate, I could not help thinking that there was a good deal of truth in the lines which G. K. Chesterton wrote about another great Welsh social issue—the question of Welsh disestablishment. He then directed his attention to Mr. F. E. Smith and said:
  "For your legal cause or civil
  You fight and get your fee;
  For your God or dream or devil
  You will answer not to me."
  I should like to parody that and to add:
  "But the homes of Christian peoples—Chuck it, Smith."
  As far as the social issues are concerned, some of us ordinary mortals who see them from the purely social angle, have a right to say something about the ultimate policy and then to invite the co-operation of our learned friends to help us to achieve the ultimate goal which we have in view.
  I am very glad that the hon. Member for Huddersfield, West (Mr. Wade), has come down in favour of leasehold enfranchisement. I hope that tomorrow his colleague the hon. Member for Cardigan (Mr. Bowen) will read his speech and learn a great deal from it, because it is a matter of considerable interest to a great many people in West Wales.
  Perhaps I may say a word or two about some of the astonishing remarks with the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) opened the debate from the other side of the House. I was amazed and surprised to hear him say that the whole leasehold problem was a new one, aggravated by two world wars. As the hon. Member for Huddersfield,
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  West, and my hon. and learned Friend the Member for Leicester, North-East (Mr. Ungoed-Thomas) have said, the Liberal Party were fighting for the cause of leasehold enfranchisement long before the First World War; and the Tory Party know that only too well, for their friends lost every seat in Wales in the General Election of 1906, because the Liberal Party then championed leasehold enfranchisement.
  Mr. John Hay: And the Liberal Party did not bring it in.
  Mr. Donnelly: I was just coming to that. The fact that they did not then do anything about it when they had power to do so, is the reason why the Liberal Party are in the position they are in today.
  Mr. Llewellyn: Is the hon. Member aware that on 1st May, 1931, a Socialist Member introduced a Bill for leasehold enfranchisement in this House, and so little interest was taken in it by the Socialists of the day that the Bill was counted out, as there were not 40 Members present?
  Mr. Donnelly: I am very interested to hear the remarks of the hon. Member for Cardiff, North (Mr. Llewellyn), but, as I think his party had nearly 200 Members in the House at that time, they must share the burden of responsibility.
  Everyone will agree that this Bill is only a temporary provision. Everyone is equally in agreement that permanent provision should come as soon as possible so that we can end the whole uncertainty in the quickest way. I agree with the hon. Member for Huddersfield, West, on that point. However, there is a very real need for having this Bill at this time.
  I represent a constituency where this leasehold problem is at its most acute. In the town of Pembroke Dock, 96 per cent. of the properties are leasehold and at this moment whole streets are falling in, with the result that ground rents of £2 or £3 a year are going up to £30, £40, or even £50 a year in specific instances. This represents a real hardship and problem for the ordinary people of that area. In addition, there have been some monstrous examples of the operations of landlordism in my constituency in the last few months. It is within the recollection of the House that in July I raised the question of cottages in Marsh Road, Tenby, where the

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  leases fell in last March. The householders were served with notice of trespass and had county court orders brought against them unless each was prepared to pay £1,000 for the freehold. This was despite the fact that some of the tenants had been living in the cottages all their lives.
  That, I think, is as good an example of the operation of landlordism in the 20th Century, as one can find today. It is no good trying to say that landlordism in its wickedest form is a thing of the past. It is a very real and wicked problem as far as those people are concerned, when they are faced with the difficulty of having to pay large sums for the freehold of their cottages and when they could not raise the sums without assistance from outside sources.
  A similar problem exists in the City of Cardiff, and my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), on many occasions in this House has raised the problems of people faced with eviction in the City of Cardiff. I believe that only the other day a family was evicted in the constituency of my hon. Friend the Parliamentary Secretary to the Admiralty in particularly unfortunate circumstances.
  I feel very strongly about this matter and am very glad indeed that the Government have introduced this Bill at this time in order that there shall be no continuance of what I think are monstrous social injustices while we continue to consider a permanent form of legislation so that we shall have an opportunity of dealing with the whole problem without prejudice and shall have the maximum time to look round without at the same time prejudicing people whose leases are falling in at the moment.
  I am sorry that all building leases have not been included in the Bill. I cannot see why one type of building lease should be included, but not all. If this Bill were really to be without prejudice to any permanent solution, all building leases should be included, and I hope the Government will consider that point on the Committee stage, which I hope will be in a very short time.
  I am also sorry that the term of the standstill is not five years instead of two, because, if the Government are to bring in a permanent Measure in a very short time, it would not matter whether the
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  period were five years or 50 years, as the permanent Measure will repeal this temporary provision. But five years would give people who had this sword of Damocles hanging over their heads a great deal more security and certainty in their lives. The hon. and learned Member for Wirral said that he thought this Bill was a kind of house freeze, but I hope he will realise the great warmth of security which has been brought to people's homes already as a result of this Bill. It means a great deal if they can have that security extended to five years.
  My third point of criticism is the one point on which I agree with the hon. and learned Member for Wirral, the rather complicated question of Clause 5. I hope we shall have an opportunity of looking at the Clause again and seeing whether it can be simplified and any anomalies removed.
  To my hon. and learned Friend the Member for Leicester, North-East, we on this side of the House owe a great debt, as we do to my hon. Friend the Member for Oldham, West (Mr. Leslie Hale), for their minority Report contained in the Jenkins Report. I wish to reinforce the argument of my hon. and learned Friend for the inclusion of all business premises. I see no reason at all why, if shops are included, we should not include all business premises.
  This Bill has been criticised by legal correspondents of "The Times" and by the spokesman of the Tory Party, who has given a clear indication of what the Tory Party think about leasehold reform—something we will remember when the time is opportune. But this Bill is greeted with considerable rejoicing in the valleys of Wales, where the people have thought about leasehold reform for many more years than I have been alive. I think there is no more fitting way of concluding, as a representative of a Welsh constituency, even if I am not a Welshman, than to remind the House of the famous words of David Lloyd-George when speaking in Newcastle-on-Tyne in 1909:
  "Who gave the land of Britain to 10,000 people as a perquisite? And who made the rest of us trespassers in the land of our birth?"
  The answer to David Lloyd-George's question was that the Tory Party have made us trespassers in the land of our birth and ultimately the Liberal Party acquiesced in that system. I am glad

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  to have been in this House when the Labour Party set out to alter that monstrous injustice.
  6.39 p.m.
  Mr. W. T. Aitken: As a director and shareholder in the company which has been so often depicted in the House as the big bad bold wolf of the leasehold system—I refer to Western Ground Rents Limited, of Cardiff—I feel I must disclose that interest. I have also had some practical experience in various matters relevant to the Bill and I propose briefly to discuss some matters in connection with the occupiers of leasehold houses and, perhaps, one or two other matters relating to the Bill.
  As a shareholder in a great landlord company I certainly favour proposals for the reform of the law of landlord and tenant as far as household property is concerned and as recommended in the majority Report of the Leasehold Committee. I also favour and realise the necessity for temporary measures to meet the immediate needs and safeguard the interests of leaseholders under present conditions of temporary scarcity. I can assure hon. Members that all responsible investors, who, perhaps, invested quite recently in freehold ground rents, will support any constructive proposals designed to prevent hardship and injustice to leaseholders, whether those hardships or injustices arise out of Socialist mismanagement of our housing programme or the machinations of property speculators.
  It is interesting to me to see that the Leasehold Committee, which was set up by the Government, and which started out as a witch hunt, found remarkably few witches. Indeed, the leasehold system and the vast majority of landlords came out remarkably well as a result of that very thorough expert examination which was carried out by the Leasehold Committee. It is also very interesting to see that both the majority and minority Reports of that Committee acknowledge the perfectly legitimate interest of the investor in freehold ground rents not only in the income from his investment but in the reversion as well. Both sides recognised that quite clearly.
  I do not agree with the principle of leasehold enfranchisement, not only on
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  grounds of public policy but for other reasons which are highly controversial. It is noteworthy that the Socialists on the Leasehold Committee, while supporting the doctrine of leasehold enfranchisement, which they are quite entitled to do, rejected the view of some of their less informed colleagues that the principle of the compensation which should be paid to the ground rent owner in the event of leasehold enfranchisement should be based on the capitalised value of the ground rent only. They fully recognised that there were certain inherent rights in the reversion. In any of these discussions, it has to be recognised, however strongly one may feel about this matter, that the people who have had an opportunity of looking into this question very carefully, believe that there are certain fundamental rights which must be considered.
  The hon. Member for Cardiff, West (Mr. G. Thomas) does not, I assume, believe in the leasehold system, and he is quite right to put forward his views, both here and elsewhere, with all the vigour he can command. I regret, however, that I was not here on many occasions when he did so, because it seems monstrous to me that he should use his privileged position as a Member of Parliament to single out by name, and both directly and by implication attribute to Western Ground Rents, Ltd., all the evils and abuses which he sees in his conception of the leasehold system. By direct misstatement and exaggeration he has placed in the minds of many people the impression that the hardships which we are now discussing, and which the Bill is designed to mitigate, are far more prevalent in Cardiff than is really the case.
  I remember reading in HANSARD. and I regret that I was not in this House at the time to hear it myself, that the hon. Member referred to Western Ground Rents as owning 20,000 houses in Cardiff. They actually own 11,000. He said that over the next 10 years half the city would be taken over, presumably by Western Ground Rents. The fact is that only 167 leases owned by Western Ground Rents are due to fall in during the next 16 years. The only other ground rent concern which can in any way compare with Western Ground Rents is the Tredegar Estate, which is in a very similar position. It owns in Cardiff 4,150 properties. In the

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  next five years only 56 of those leases expire, and no others expire for another five years after that.
  Mr. Janner: Would the hon. Member say what conditions have been imposed by the Tredegar Estate or by his own company when leases have fallen in?
  Mr. Aitken: I will gladly do so in a moment, but I wish to continue my argument. I will refer to the conditions which I believe we should impose on people when leases fall in.
  Another statement made by the hon. Member for Cardiff, West, was that in Grangetown Ward there were 4,000 houses, which would be taken away from their purchasers, unless something was done about the matter in the present Parliament. There are 3,139 houses in the Grangetown Ward. In this housing area 951 ground rents are owned by Western Ground Rents. None of these leases falls in before 1974, and only 62 fall in between 1974 and 1989, an average of two a year after 1974. Again, last month, the hon. Member said that between now and Christmas many homes in Cardiff would be lost if the Government did not protect people. The fact is that there are no leases whatever falling in between now and Christmas on the Western Ground Rents Estate or on the Tredegar Estate.
  Mr. George Thomas: I have not interrupted the hon. Member earlier because anything that Western Ground Rents say against me, will only do me good in Cardiff. I should like to ask the hon. Member, however, whether he is speaking of the whole of the city in what he is now saying?
  Mr. Aitken: I am referring to the properties owned by Western Ground Rents in Cardiff. The statements from which I am quoting were all associated either directly or indirectly with Western Ground Rents.
  Mr. Thomas: Would the hon. Member mind reading any passage where I have connected the statement about Grange-town with Western Ground Rents?
  Mr. Aitken: I think I can do that. I have HANSARD here. Any reasonable person is entitled to assume, from the hon. Member's speech of 7th March, a link
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  between Cardiff and the enormous number of houses which, he assumes, are owned by Western Ground Rents. I think that further in his speech the hon. Gentleman referred to Grangetown.
  Mr. Thomas: The hon. Member is surely not making charges against me without having the quotation on which he relies.
  Mr. Aitken: If I am allowed to look at the quotations—I have them here—I will do my best, but I do not intend to be put off, because the hon. Member knows perfectly well that in every speech he has made, he has associated all these matters with Western Ground Rents. If he cares to tell me that he was not referring to Western Ground Rents when he made that reference to Grangetown that is all right, I will accept that. But it should be borne in mind that they own 951 houses there and it is only natural that the hon. Member should assume that they have a very big interest in Grangetown. I refuse to be put off, or to accept that intervention by the hon. Member as in any way a defeat or a rebuke.
  Another point which interests me is that some years ago the hon. Member, in an article in "Tribune" referred to the fact that thousands of leases were falling due each year, and that this was the speculator's opportunity. This again linked up with a previous statement about the activities of Western Ground Rents. The fact is that between 1938 and 1950 two ground leases on houses owned by Western Ground Rents in Cardiff fell in. One of the tenants was given a life tenancy. The other—and here I come to the point made by the hon. Member for Leicester, North-West (Mr. Janner)—was offered a statutory tenancy at £1 a week.
  Mr. Janner: Would the hon. Gentleman now say how much was the ground rent for which £1 a week was charged as a rack rent?
  Mr. Aitken: I will put it in another way. I will answer the question hindside foremost, because that is the way in which hon. Members opposite have twisted the whole of the principle of the ground rent system. I could give the exact figure, but if I say that it is a small one will the hon. Member be satisfied?
  Mr. Janner: Yes.
  Mr. Aitken: It was a very small ground rent. The house was not offered for sale; it was offered on a statutory tenancy. That is a proper action for a responsible landlord to take. We are doing exactly what is recommended by the various people who have discussed this matter in the Leasehold Committee. When a lease comes to an end, people are given a chance of remaining as statutory tenants. That is what this company have done.
  A number of other statements were made on this subject. All were inaccurate. They were certainly designed to convey a misleading impression of a perfectly legitimate business in Cardiff. It is a business which has the same interest in the development, the amenities and welfare of that great city as any of the big banks, insurance companies, chain stores or building societies who do business there and in other great cities throughout the country. However sincere the hon. Member may have been in making these statements, they do him no credit in the eyes of a people who really know the leasehold situation in Cardiff.
  Mr. W. T. Williams: The hon. Gentleman has spoken at considerable length about the position in Cardiff. Would he not agree that this is misleading in respect of Western Ground Rents generally? Is it not true that the interests of Western Ground Rents in South Wales cover a very much larger area than Cardiff and that in South Wales generally, especially in the Welsh valleys, it is true that a large number of ground rents will fall due in the next 10 or 20 years?
  Mr. Aitken: No, that is not true. Western Ground Rents own a great deal of different kinds of property and businesses, but they are not purely and entirely a property company. The vast amount of their assets are in Cardiff, especially their house property. This is an enormous company, holding a lot of different kinds of property, and unless the hon. Member can give specific cases I cannot go into the details. I can assure him, however, that the property owned outside Cardiff is comparatively small in relation to their holdings in Cardiff.
  The main object of the Bill is eminently desirable. Western Ground Rents gave evidence to this effect and recommended it on the various occasions when they
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  appeared before the Leasehold Committee. A good example is that the company own 11,000 houses in Cardiff and only 61 are affected by the Bill, and 26 of those are occupied by the leaseholders themselves. The whole of this business can be very much exaggerated, especially by the propaganda carried on by the hon. Member for Cardiff, West, and his friends.
  My main criticism of the Bill so far as it concerns house property is that it is a great pity, in view of the present housing situation, to take any action which removes even a skeleton of a policy for maintenance and repairs. Under Clause 4 (1) all the covenants of the leases are suspended, with the exception of the payment of rent and insurance. This is a most undesirable feature. Even if the pledge of the right hon. and learned Gentleman that the Bill will not be extended beyond two years is fulfilled, it seems to be a great mistake to suspend maintenance covenants.
  Even in the Leasehold Property (Repairs) Act, 1938, it was found necessary to state specifically that certain actions must be taken. That Act was designed for the same general purpose as this Measure—to help to release the leaseholder of some of the burden of excessive covenants in the way of repairs. In the Act of 1938 exceptions were made in any relief given in respect of any action necessary or proper for putting or keeping a property in a sanitary condition, or for the maintenance or preservation of the structure, and also of any statutory liability to keep the house in all respects reasonably fit for human habitation. These are absolute fundamentals of normal good house maintenance. I hope that in due course an Amendment will be made at least to maintain the bare bones of good maintenance of property.
  6.58 p.m.
  Mr. Hayman: I also speak as a layman on this question, but the Attorney-General said that this was not altogether a legal problem and that it was also a social problem. It is from the latter point of view that I wish to speak. I give a great welcome to this Bill, which will obviate a lot of hardship among thousands of people and give to thousands of others a hope that in time

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  they may be able to own the house which either they or their fathers built.
  My constituency is that of Falmouth and Camborne, but I will take those two towns in the reverse order. I should like to quote from evidence given to a mining commission in 1864, where it was said:
  "There are 800 houses in Camborne, the property almost entirely of labouring miners, which they have built themselves and which they have on a lease of three lives."
  How many of those houses are owned today by the families of those who built them? Almost every house has reverted to the ground landlord who did nothing to provide amenities or other facilities of that kind. When I have heard hon. and right hon. Gentlemen opposite talk about the great town planning benefits conferred on this town, it has made me smile derisively.
  Mr. Hay: If the hon. Member has finished smiling derisively, perhaps he will tell us how, if it had not been for these particular leases way back in the middle of the last century, these houses which are still there ever could have been built?
  Mr. Hayman: The hon. Gentleman may have heard another hon. Member, I think the hon. Member for Huddersfield, West (Mr. Wade), speak about Yorkshire, where they built their houses on freeholds. Our people in Cornwall and the people in Wales have always wanted their freeholds, but cannot get them.
  My postbag has contained many more letters on this question of leasehold reform than I have received on the Festival of Britain, and my constituency, after all, is in a Nonconformist part of the country. I should like, if I may, to quote the example of my own family. One of the 800 houses already referred to was one built by my grandfather under the Cornish system of three lives. When my grandmother was 75, she was called upon to prove the existence of the third life. Those who know anything about Cornwall are aware that our people emigrated in thousands because they could not get work in Cornwall, and so my grandmother was unable to prove the existence of the third life. She was therefore evicted from her cottage, and there was no widow's pension in those days.
  So much for Camborne. I will now refer to Falmouth. A great part of
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  Falmouth is owned by the Earl of Kimberley, who in recent months has seen fit to send to his tenants a letter inviting them to renew their leases at considerably increased ground rents. In the past few days, I have received one or two letters on this particular question. I would point out that the increases in these ground rents will affect the compensation which may be payable if and when the Government bring in a Bill for leasehold enfranchisement, and we hope that time will not be long delayed.
  A widow came to me to inquire what she ought to do. She had a property with a fair number of years to run, and she wanted to spend £1,000 on it and turn it into two flats. The Earl says: "Yes, you can do that, provided that your ground rent of £2 15s. is raised to £15 a year, and, in order to have another flat, you must pay an extra £2 10s. a year." So that the compensation which, on the original ground rent of £2 15s., at 25 years' purchase, might have been £68 15s., would, under this new lease, become £437 10s.
  The hon. Member for Bury St. Edmunds (Mr. W. T. Aitken) said that the Leasehold Reform Committee had not heard very much evidence from leaseholders themselves. That may be so, but I can assure him that there is—
  Mr. Aitken: I did not say that. I said that the Leasehold Reform Committee had heard a great deal of evidence, but I did not say that it had not heard evidence from any particular body.
  Mr. Hayman: I think I said "evidence or complaints from leaseholders."
  Mr. Aitken: I think the hon. Gentleman is confusing what I said with what he read in the Leasehold Report. I did not say it, but I think it appears in the Leasehold Committee's Report.
  Mr. Hayman: The Leasehold Report, I think, did refer to the fact that there had not been many letters from leaseholders, but I can assure the House that, in my constituency at least, there is a good deal of agitation about this question of leaseholds and ground rents. I hope that this House will not consider legal contracts too much, because these legal contracts were enforced on people who wanted to build their own houses, and,

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  therefore, one has to consider both the moral rights and the social rights.
  I hope this Bill will have an easy passage, and that the time will not be too far distant when we shall have a leasehold enfranchisement Bill, so that the whole question of leaseholds may be placed on a proper basis.
  7.5 p.m.
  Mr. Henry Brooke: This Bill is so exceedingly difficult for almost all of us to understand that I think the hon. Member for Falmouth and Camborne (Mr. Hayman) has taken a wise course in directing most of his remarks to the problem in his own constituency, and I intend in a moment to follow his example by relating my remarks to my constituency.
  First, however, I would submit to the House that, while the hon. Gentleman who has just spoken complained in his speech that the leasehold system had created many problems in his constituency, he failed to prove that the Bill is the best or the only way of solving these problems. I think he said that, when he heard from the Tory benches references to the great town planning benefits which the leasehold system brings, he smiled derisively. May I make reference to those benefits by reading this passage:
  "The difficulties of carrying out adequate planning would be much increased if such houses were all separately owned, some probably by occupiers who would be unwilling to part with their freehold until long past the reasonable life of the building had expired."
  Mr. Turner-Samuels: What page?
  Mr. Brooke: I am not reading from the Leasehold Committee's Report; I am reading from the evidence which was submitted by the Socialist-controlled London County Council to the Leasehold Committee, for I want to prove that this matter of the planning, benefits of the leasehold system should not be seized upon as a Tory argument. It is not a partial view; I would have thought that it was an almost universally accepted view, by all who attempt to approach this subject as the hon. Member for Pembroke (Mr. Donnelly) said we should—without prejudice.
  My constituency happens to be one of those which includes several large leasehold estates, and my mind goes back to
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  the remark of the hon. and learned Member for Leicester, North-East (Mr. Ungoed-Thomas), who is not at present in his place, but who expressed the view that the interest of the landlord is a purely financial interest. The hon. and learned Gentleman said that that was Socialist belief on the whole matter. Certainly in Hampstead, we have a contrary experience in dealing with a number of large estates, which have not taken only the narrow, pecuniary view of their responsibilities, but have attempted, at times in mistaken ways, some may perhaps think, to take a long view and ensure the development and the redevelopment of the land and property in a manner that will be of general public benefit.
  I find it so much easier to visualise the problems of the Bill in the concrete if I look at a particular case, and not at the obscure wording of the Bill itself. I cannot possibly be a beneficiary under the Bill, because I am not a lawyer, neither am I a lessee. One estate which I have in mind owns about 1,000 houses in the borough of Hampstead. They were built in the last century, and, in the last six years, the leases of about 100 have fallen in. In the next three years, which will, presumably, be the period to which the Bill applies, 183 further leases will fall in.
  Of the 100 which I have mentioned, the great majority were found, when the leases fell in, not to be occupied by the lessee himself, and this estate normally pursues the practice of refusing to extend or renew a lease to a lessee if he is, in fact, an absentee. As regards occupying lessees its practice, which, I think, is in accord with the practice of the responsible large ground landlords of London—I stress the word "responsible"—has been to re-let the houses either at normal annual rents related to market value or on quarterly, monthly or weekly tenancies.
  Mr. Janner: So that we may know exactly what the position is, can the hon. Gentleman give us an illustration by referring to the ground rent paid before the lease fell in and to the amount of rental charged subsequent to the lease falling in? That is the important matter that we want to consider.
  Mr. Brooke: Yes, this particular estate let these plots of land at very low ground rents 100 years ago and is now, quite

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  rightly, raising those rents to market value, to reasonable rack rents for the property. When the lessees entered into a contract 100 years ago for a limited term they did not bind the ground landlords to require only that limited rent in perpetuity. The hon. Member appears to be wishing that the terms of the contract made 99 years ago had been varied at the time.
  To return, an estate like that—and I wish to say that I have no personal connection with any such estate—runs in these days against two or three difficulties. First of all, it is extremely hard to get the necessary licences for reconditioning and modernising. As my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) pointed out, one of the essential purposes of the leasehold system is to ensure that at the end of a period of about 100 years the property is either pulled down or thoroughly modernised.
  Secondly, there is the difficulty that a number of lessees, in spite of their covenants, and possibly through not understanding them, and possibly, again, through the great increase in costs in these days, have not got the necessary money for carrying out their responsibilities for repairs. I think we are all agreed that the rise in the cost of repairs is one of the factors which necessitate the whole problem of the leasehold system being very carefully looked at, in relation to the leases that are running out at present.
  The third, and, possibly, the greatest, difficulty is the misunderstanding by many lessees of the terms of the contract they have entered into. Frankly, I think that the report of the Leasehold Committee does not give sufficient weight to that factor. My own belief is that there are considerable virtues in the leasehold system, and that it can give public benefit for the long-term development of our towns. Nevertheless, unless we can secure means by which those who are lessees clearly understand when they enter into the contract and throughout the term of it what their obligations are, I entirely agree that the leasehold system has a black mark against it in that respect.
  The trouble is that though the leasehold system is not working well at the moment because of those two or three difficulties that I have mentioned, the Bill fails to give any help whatever in any of those respects. Nor does it help to do what is surely the most essential
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  thing of all—to hold the balance fairly between the parties, when that balance is tipped in one direction or the other. At present the balance is tipped in favour of the ground landlord because of the housing shortage, as the lessee whose lease is running out has not—
  Mr. Turner-Samuels: Not only ground landlords, but all landlords.
  Mr. Brooke: —got a free choice. He cannot risk having nowhere to go. But the Bill, instead of taking the right step, as recommended in the majority Report, to restore the balance, claims to deal with the problem merely by tipping that balance heavily in the other direction.
  As I said, in the estate I have mentioned there are some 183 leases soon to run out, of which only 40 or 50 are, in fact, occupied by the lessees, and in most of those cases the lessees are not in what is called single family occupation, but have just a flat or a room on the premises. That means that during the currency of the Bill about 4 per cent. of the total number of houses in such an estate will be affected by its provisions. To protect that 4 per cent. against the possibility of exploitation, the Bill offers those particular lessees exceptionally favourable treatment in relation, not only to the ground landlord, but also to other lessees, for instance, those whose leases ran out a year or two beforehand and who have renewed their tenancies or entered into some other arrangements on less favourable terms than the exceptional treatment which the Bill offers.
  The real remedy is to find some means of restoring the balance fairly now that it has been tipped, and I see no better solution for that than the one contained in the majority Report. That would protect the lessee against possible exploitation by the lessor, and it would also, as I see it, protect against exploitation by the lessee because, let the House be under no illusion about this, there are cases in the country where the lessee, the owner of the head lease, is in enjoyment of premises at a very small ground rent, and has let them off into flats or even into single rooms at such rents that he is seeing a very considerable income from them. The Bill's contribution to that particular piece of exploitation is to say that it may go on, uninterrupted, for a further two years.
  Mr. Frederick Elwyn Jones: No.
  Mr. Brooke: The right course, if we are to have this Bill, is, as my hon. and learned Friend the Member for Wirral said, to adjust the rent during those two years to something comparable to the rack rent of the premises. My hon. and learned Friend threw out one or two suggestions well worth looking into in Committee as to the way we should do that.
  I strongly agree with my hon. Friend the hon. Member for Bury St. Edmunds (Mr. Aitken), that there can be no defence for anything in the Bill which will stand in the way of keeping properties in good repair. Any of us who know the great cities must look with dismay at the rapidity with which one street after another is falling into disrepair through the operation of rent restriction or the difficulty of obtaining licences, and now come the temporary provisions of this Bill. It cannot be right in the national interest that the obligation to keep a house in good repair should be set aside and jettisoned as the Bill proposes. The trouble with it in that respect, as with the Rent Restriction Acts, is that it strikes blindly.
  My main difference of opinion with hon. Members opposite comes down to this, that they are inclined to talk as if all landlords were bad and all tenants were responsible citizens. The fact is that landlords are good and bad and tenants are good and bad, and we have to frame legislation in this House so that it will deal hardly with the bad landlord or the bad tenant and will deal justly with the good landlord or the good tenant who is trying to fulfil his contract, and do his duty by the nation.
  I quite agree that in conditions of housing shortage some statutory protections are needed for the lessee who is liable to eviction. They are equally needed for the sub-lessee against the lessee. But I cannot accept the suggested solution that the lease should be continued at the existing ground rent for a period of two years or, as the hon. Member for Pembroke wanted, for a period of five years.
  Let us look at this analogy. Suppose there was a Government 5 per cent. stock due to be repaid in 1951, and suppose somebody said, "That will cause great hardship. We will prolong the term of the stock by two years. The holder may
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  claim repayment at par in 1951 or he may continue to draw 5 per cent. up to 1953." Everybody would say that that was an arrangement unfair to the Government.
  Mr. Granville West: Would the hon. Member draw a distinction between the investment of £100 capital stock by the investor and the expropriation of a building which has been erected by another person, as is done under the present leasehold system?
  Mr. Brooke: The hon. Member is trying to bring the debate back to the whole system of leasehold and leasehold enfranchisement. I am trying to apply myself to the terms of the Bill. What the Bill does, in fact, is as if, in a case like that, the holder of the stock was allowed not only to continue with his enhanced rate of interest for another two years, but also to get, as a stock-holder could, an increased cash value for his holding if he wished to sell. The Attorney-General may point out that I am wrong, but I can find nothing in the Bill to require a lessee who is a beneficiary to remain in occupation for the two years. It strikes me that at any time he can dispose of his asset at an increased value. The Bill seems to ignore entirely these words in paragraph 105 of the Leasehold Committee's Report:
  "We think that any scheme of compulsory renewal would be open to strong and wholly justifiable criticism if it merely had the effect of providing the fortunate tenant with a cheap leasehold interest which he would be free to assign or sublet at a profit."
  Surely we have to see to the amendment of the Bill in that respect.
  I cannot think that the Bill provides the best way to protect the under-dog. I shall not oppose the Second Reading, of course, because there is a problem here and at last we have a Bill to deal with it, a Bill for which some of us, who have watched the proceedings of the Committee and have read their Reports, have been waiting for a long time. I am certainly not one of those, referred to by the Attorney-General, who think that at the present time this is a negligible problem. The Bill is an almost negligible contribution to the solution of the problem. but we must seek to improve it in Committee, and I was happy to hear the Attorney-General say that he hoped we should all join in doing so, irrespective of party.
  7.25 p.m.
  Mr. Gibson: Unlike the hon. Member for Hampstead (Mr. H. Brooke). I do not think one can discuss this matter without realising and emphasising the social implications of this problem. I agree that this Bill does not solve the problem, but at least it gives us a period of two years in which injustice may be lessened a little while really comprehensive legislation is worked out to deal with this question of leasehold, the whole question of landlord and tenant relationship and, as was said earlier from these benches, the Rent Restriction Acts and other Acts which deal with this matter.
  In the meantime there is a growing and very serious social and personal problem in this country. I do not think, and I do not believe this House will agree, that the merely legal rights of landowners ought to be allowed to impose tragedy and hardship on many people in this country who have bought a house and thought it was theirs and who now discover, at the end of their lease, that the house is not theirs at all and that the landowner can take it from them or impose onerous conditions upon them.
  The fact is that there is a large number of people in the country, and in London, who have bought their houses or at least who thought they had bought them. They are members of what is sometimes called the working class—a phrase I do not like very much—and members of the so-called middle class. They are people who have spent the whole of their life savings in buying a small house in which they thought they could live their lives out and raise their family in security. As the hon. Member for Hampstead said, they are not lawyers. They do not understand, and I doubt whether many other people understand,
  including lawyers—
  Mr. Manningham-Buller: Would the hon. Member explain how they reconcile being owners of the houses with paying a ground rent?
  Mr. Gibson: That is not the point I am making. The point I am making is that they have taken a lease and built or paid for a house which is on the ground and they are paying ground rent to the landowner, but they do not understand—and I doubt whether there are many people in this country who do
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  understand—all the complications of the law relating to landlords and tenants.
  Mr. Turner-Samuels: This sounds like a reflection on the legal profession. Is the hon. Member saying that people buy houses and then find that they have not bought them at all? If so, what evidence has he for saying that?
  Mr. Gibson: I will quote from letters I have received.
  The Attorney-General: They think it is a thing like tithe in so many cases.
  Mr. Gibson: The fact is that thousands of people—and many in my constituency have written to me in the last few months—are under the impression, rightly or wrongly, that the house they have built out of their own life savings belongs to them and that at the end of the lease, whether it be 20 or 90 years, it is still theirs. What they do not understand is why, at the end of the term of that lease, the landlord can take the house from them and evict them. They are now beginning to realise this, and I suppose we are all receiving letters from our constituents. I have certainly received some. I should like, briefly, to give the House two illustrations of the kind of problem about which I receive queries.
  There is in my constituency a family, the father of whom was a railwayman. Somehow from his railway wages—I do not know how he did it; he was a hero—he saved enough money to buy a house. Then, unfortunately, he died just after he took occupation, and his widow has been left with it. She has tried to get the landowner to sell her the freehold because she now realises that in seven years' time, that house will disappear from her ownership. She has been unable to get any agreement from the landowner to sell her the freehold, and the poor woman and her family are worried out of their lives about their position in a few years' time when the lease runs out. My view is—and I am sure it is the view of all decent-minded people—that there ought to be some security for a person like that.
  Let me give another example. I should like to quote a letter which was written to me by a constituent. He writes:
  "I am an old trade unionist now past work at the age of 78. My wife is 76, and some time ago so that we should have some comfort in our old age I bought the above small house."

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  He gives the address—
  "Owing to the housing shortage I had to pay a good deal more than it was worth. Now, under the present law, the ground landlords who did not put a single brick to the house have the power not only to practically steal the house, but can demand a large sum being spent in repairs."
  Obviously he did not know he was in for all this when he took the lease. He goes on to say:
  "It will not actually affect me as both my wife and myself will have passed on before the lease expires, but I was hoping to leave it to my only daughter. Surely if I purchased and paid for anything it should he my own property?"
  What we are saying is that the law should be reformed to enable property which people have bought to remain their own.
  Mr. Turner-Samuels: This Bill does not do that.
  Mr. Gibson: I know it does not, but for two years it protects people from eviction, so that during that period this difficult and complicated subject of landlord and tenant shall be discussed and a Bill prepared which will bring the law up to date and will, I hope, give to tenants the security and justice to which they are entitled.
  I make one final point relating to the period of two years. During the last few months I have taken some closer interest in the legal complications of this matter—I am not a lawyer—and I am beginning to doubt very much whether in two years it will be possible to sort out this matter and get a new Measure passed through this House. I therefore ask that if at the end of two years this House has not passed the comprehensive legislation for which we are all hoping, the present Measure will be extended for a further period so that the hopes of these people will not be frustrated.
  The root of this problem, as of so many other social problems, lies in our present land ownership system. I know that hon. Members opposite think that the private ownership of land is morally, ethically and legally right. I do not think we shall ever completely solve this problem, or many other social problems, until this House decides to deal with this question of land monopoly. I hope that the hint which the hon. Member for Hampstead gave when he read from the report of the evidence which the London County Coun-
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  cil gave to the Committee will come about, and that land will become publicly owned in this country. If the land is publicly owned, these problems can be dealt with much more easily. They will not be solved until the land in this country does return to the ownership of the common people.
  Mr. Speaker: Sir Austin Hudson.
  Mr. G. Thomas: On a point of order, Mr. Speaker. In view of the speech which the hon. Member for Bury St. Edmunds (Mr. Aitken) made earlier, in which there were constant references to myself, may I ask whether it is not the custom of the House that an opportunity should be given to me to reply?
  Mr. Speaker: It is not for the hon. Member to challenge the selection by the Speaker of those who are to speak. Sir Austin Hudson.
  7.35 p.m.
  Sir Austin Hudson: I am not a lawyer and I am not a landlord, but I am one of those Members who, like the hon. Member for Clapham (Mr. Gibson) and my hon. Friend the Member for Hampstead (Mr. H. Brooke), sit for constituencies of a dormitory type and to whom these leasehold Bills are of vital importance.
  Like the hon. Member who said that he had sat for two years on the Leasehold Committee, I sat for two years on the Ridley Committee which dealt with rent restriction; and many of the problems which we had to solve then, particularly the problem of the eviction of tenants, rather than the amount of rent they paid, were very much the same on both those Committees. I was sorry that the findings of the Ridley Committee could not be implemented during the last Parliament. Still, they are there, and it may be that in this Parliament—I am encouraged by what the Attorney-General said—a comprehensive rent control Measure will be introduced.
  I should like to say a few words about the timing of the Bill. We had the interim Report of the Leasehold Committee in March, 1949, and I understand that the reason why that interim Report was put in and the reason for the hurry was that the Government wanted to deal immediately with the pressing problem of shops and business premises. However, until now nothing has been done. I am

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  not a lawyer, and I do not have to deal with these matters from day to day as part of my business, but I am told that a great deal of property is being disposed of, shopkeepers are being evicted, and so forth, even now. I have been told of a case in Halifax concerning a place called the Arcade Royale—why it was spelt in French I do not know—which is a large block of shops. All the leases have fallen in, all the tenants are being evicted, and I believe that the Co-operative Society is to take over the lot. That is hard luck on the people who are being evicted and who would have been protected by this little Bill had it been brought in earlier.
  The final Report relating to the housing side of this Bill was introduced in June, 1950; we are now in December, and we have only an interim Bill. The Attorney-General announced that we shall have further legislation within two years. I have been wondering about that period of two years, and I came to the conclusion that that is as long as the Government think they will last. Obviously, if there had been agreement among the whole of the party opposite about the long-term solution, then more permanent legislation would have been introduced. It is clear from the speeches made by hon. Members opposite, as it may be clear from speeches made on this side of the House, that this is not the sort of thing about which everybody in every party is unanimous.
  This is a subject upon which the Government must make up their mind and must then introduce their final legislation and try to pass it through the House. I should have thought that a House composed, as this is, of almost an equal number of hon. Members on each side would not have been a bad one in which to bring forward this issue, because there are divisions on both sides of the House and, after discussion, after threshing out the subject between us, we might have produced a Bill which would have lasted for some time.
  I want to say a few words on future legislation. I read the Report of the Jenkins Committee with great interest and I thought the reasons advanced by the majority of the Committee against leasehold enfranchisement were pretty formidable. The objection which, it seemed to me, could not easily be overcome was that which pointed out that it
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  is a social advantage if we can provide for a number of leases all to fall in at the same time. That is particularly the case in London. I am thinking, in particular, of part of my own constituency of Lewisham, where it would be an advantage if leases all fell in at the same time. At present the buildings are made into flats in the most inconvenient way, whereas if the leases of blocks of buildings fell in together, the buildings might be modernised and converted into more suitable dwellings. I will not continue on that subject, however, because it is something with which we shall have to deal when we consider the permanent legislation.
  There is one point which I want to mention in particular. It has already been mentioned by my hon. Friend the Member for Hampstead. It is the question of disrepair. House after house in Lewisham is falling into disrepair simply because the landlord is unable to effect the repairs. It is not a fact in most cases that he is unwilling to do so; it is that he is unable to do so, either because the rent is fixed too low or because he cannot obtain the licences, and so on. I am frightened about the effects of Clause 4 of the Bill, which protects the tenant for two years with penalties for breach of covenant. We must go into that very carefully on the Committee stage. Two years will make a good deal of difference to some of these houses. Their roofs are sagging already, the walls are crumbling and they need repair at the earliest possible moment. We must be careful about that.
  In Lewisham we have a problem which I think is peculiar to only a few parts of London and, in fact, to only a few parts of England. It is the problem of tenants of Crown property. There seems to be quite a lot of Crown property in Lewisham—possibly an overflow from Greenwich. Although these tenants occupy the same kind of house as that which next door is rent restricted, their houses are not subject to rent restriction, and the result is that certain unscrupulous people have in some cases bought up the leases and are putting the screw on the sub-tenants who are in occupation, or have already put the screw on them, either to push up the rents or to evict the tenants—and that is where this Bill might operate. The Government know that this problem exists because I

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  have told the Minister of Health about many cases. He told me that in suitable cases he is giving authority for the local authority to use requisitioning powers. He said that he wants to deal with the problem at the earliest moment, but he thought that it could not be dealt with under this Bill.
  I want to ask the Government whether the eviction of these tenants and subtenants comes within the provisions of Clause 14 (1) of the Bill. I am afraid that it does not, because if we look at the last few lines of the first page of the Bill—Clause 1—we see that it says:
  "The tenancy shall continue after the date of expiry as if it had been granted for a term expiring at the end of the said period of two years but otherwise (save as hereinafter provided) on the terms and subject to the conditions of the tenancy."
  Unfortunately, the terms and conditions of the tenancy of these people are that, first of all, their rents can be increased—although I agree that that cannot be dealt with under the Bill—and secondly, that they can be evicted. If the right hon. and learned Gentleman would look at that point and deal with it, it would be of great advantage to a number of these tenants who live in my constituency and with whose cases I have been trying to deal for some time.
  For those hon. Members who may be interested and who think that the Crown tenant is subject entirely to what we might call Buckingham Palace, I would explain that we seem to have come closer and closer between Crown and Government, because when I first took up these cases I wrote to the Commissioners of Crown Lands and, after a suitable delay, I received a reply from the Minister of Agriculture and Fisheries, who said that these Crown lands came under his jurisdiction and who gave me a very polite reply on the exact state of the law. Thus, in pleading for these tenants of Crown land, I am, in fact, pleading with the Government for tenants of their own land.
  As my hon. Friends have said, we intend to support the Second Reading of the Bill because we realise that there is a social evil which we have to put right. We do not altogether like the drafting of the Bill, particularly that of Clause 5 and of Part II of the Bill, and we shall feel ourselves at liberty to move and vote for Amendments when the time comes.
  7.48 p.m.
  Mr. Granville West: There seems to be a fundamental conflict between the two sides of the House about the problem we are discussing today, although there is no conflict so far as the Measure before us is concerned. The conflict would appear to be one between law and equity—the party opposite representing the law and this side of the House, I think, representing the equity. Several hon. Members opposite have dealt with the question of hardship and I have detected that they are rather more concerned about the hardship to the landowner than the hardship to the building lessee.
  Some of them, I noticed, have referred to the question of repairs. I do not know whether hon. Members opposite take the view that the exacting of premiums from building lessees and the increasing of their ground rent at the expiration of their term is likely to enable them more effectively to carry out repairs upon their property. In my view, the terms which are imposed upon them make it very difficult for them to put their properties in repair.
  The hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who opened the debate on behalf of the Opposition, made some general observations with regard to the theory of building leases, and he endeavoured to put forward the proposition that it had enabled development to take place under proper planning and control and, further, that in deciding the rent to be charged to a building lessee the lessor had taken into consideration the house that was to be built and the repairs which would be carried out during the period of the lease. I would like to ask the hon. and learned Gentleman who is to reply on behalf of the Opposition whether there is any evidence at all which was given to the Leasehold Committee to indicate that there is a single case where the ground landlord ever made a reduction in the ground rent in consideration of the building lessee erecting the house and undertaking to keep it in repair.
  Mr. Manningham-Buller: I was asked whether there was evidence before the Leasehold Committee. I was not on the Leasehold Committee and I do not know whether any such evidence was given.
  Mr. West: I think we can assume that no such evidence was before it, if there had been I think we should have found

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  it in the Report, and there is no evidence in the Report to indicate that building lessors at any time had made a concession in the ground rent.
  I think it is clear that there is some misconception about how the building lease began to operate. It is suggested that the building lessor determined as a policy the planning and development in the country. In point of fact, the historical truth is entirely to the contrary. In my view, the development of the building lease followed on the decay of villein tenure in this country when the landowner was unable to develop his land, and he had therefore to let it out to other people to farm it for him. That and the law of primogeniture, whereby the land descended to the eldest son tended to promote the accumulation of large estates in the country, which passed as a whole to a single inheritor.
  When the Industrial Revolution came about, what happened was that people flocked to the urban areas of the country and wanted plots of land on which to build houses in which to live, and they had to deal with one landowner, a monopolist in that area. They could not get land for sale. They had to take the terms which the landlord insisted upon. He imposed upon them the building lease, for the simple reason that he wanted to preserve his estate in one whole, and not out of any consideration for planning or control. I suggest that when the landowner in those days granted his building lease, he extracted from the building lessee the highest rent he could obtain.
  Hon. Gentlemen who are members of the legal profession and who have been in practice as solicitors will know full well—and let us have no humbug about this—that when they have acted for building lessors or building lessees, the building lessor always extracted the best rent he possibly could for the land he leased. [Interruption.] It is not the way in which we advised him, but the way in which he instructs those who act for him.
  Some hon. Gentlemen opposite have pooh-poohed the suggestion made by my hon. Friend the Member for Clapham (Mr. Gibson), who spoke about working people buying leasehold property not really understanding what they were doing. I ask hon. Gentlemen who are members of the solicitors' branch of the
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  profession: how many times have working people brought contracts into their office which they had signed after having bought properties at public auctions, the only reference being that the title should commence with a lease of such and such a date? No covenants or conditions in the lease had been explained to them, and when they came into the solicitor's office the solicitor tendered the advice that, having signed the contract, and having bought it at a public auction, they were bound to take the property.
  Mr. Hay: Since the hon. Gentleman seems to be looking at me, may I say that my own personal experience is that frequently people come into one's office and say, "I have bought this property at an auction." One explains to them what they have done. The hon. Gentleman's point is that at the end of their lease these people believe that they have the freehold.
  Mr. West: When the hon. Gentleman opposite explains to them what they have done, he also explains to them that it is much too late for them to get out of it. If it is too late to get out of it, and he has found it necessary to advise them on what they have done, then he recognises that they have been misled.
  Mr. Hay: Not necessarily.
  Mr. West: If the hon. Gentleman advises them on what they have done and advises them that it is impossible for them to get out of it, he must recognise that those unfortunate people have been led into a situation into which in fairness and in equity they ought not to have been brought. That is the view which I take with regard to this building lease system.
  There is no question but that large numbers of people are completely misled with regard to the operation of this system; one has only to go into the mining villages of Monmouthshire and South Wales, to Newport, Mountain Ash, Aberdare and the Rhondda—and the hon. and learned Gentleman talks about planning and control! I would suggest that the hon. and learned Member for Wirral should go into these industrial areas of South Wales and he will appreciate that this problem is very acute. Let him go there and see whether this building lease system has been responsible for orderly

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  development and good planning, and then he would know what are the views of the hundreds of householders in those areas.
  There is no doubt that in South Wales, in particular, the conditions are due to the operation of the building lease system, because no one could get a plot of ground on which to build a house except under the building lease system. The landowners were monopolists and could impose what terms and conditions they pleased.
  In a speech which I made in the debate on the Address, I stated that I had seen leases in which the building lessor imposed a condition that if the building lessee at any time embraced the Roman Catholic religion, the property was to be forfeited. Can anyone suggest that such a system should be operated in this country. [Interruption.]
  I am making use of that example to indicate the power which the landowners had to impose harsh and iniquitous terms on building lessees because they were powerless to enter into negotiations with them. It was the power of the monopolist. Therefore, when the hon. and learned Member for Wirral, who I am glad to see has returned to his place, says that the building lessor, when he granted the lease, made concessions in the ground rent for the obligation which the building lessee undertook to build the house and keep it in repair, I ask him whether there was a single scrap of evidence brought before the Leasehold Committee to show that any building lessor had in fact made any such concession.
  Mr. Selwyn Lloyd: So far as the evidence was put before that Committee, I think that it was a matter of agreement that we should not state what it was.
  Mr. West: I gather from the Report that general statements on behalf of the freeholders had been included, and I think that they set out the conventional arguments, but I do not see even in the conventional arguments that they say that the building lessor had granted leases at a rent less than that which he could have extracted at that time. Therefore, I think that I am entitled to take it that no evidence came before the Leasehold Committee that any reduction in rent had
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  been made at all. In fact, I suggest that the lessee had to pay the highest rent which the landlord could possibly extract from him.
  The view which I take in regard to this Bill is this: I welcome it, but I do not think that it goes far enough. I know that there are arguments, and perhaps strong arguments, against the inclusion of all building leases in this Bill because there are some who will say that to include all building leases is merely to substitute one landlord for another; that is, if the person who owns the building lease is not in occupation, and this Bill applies to him and his lease is extended for two years, he merely continues on as the owner receiving the rack rent of the property instead of the ground landlord stepping in and taking it. But has the ground landlord a better claim to the rack rent than the person who has built the house and maintained it in repair and paid all the outgoings in respect of it?
  I would say that there is a much stronger case for the building lessee, even though not in occupation, to continue being regarded as the owner of the property than that the ground landlord should come in and take it over. I would say further—and I draw the attention of the House to this—that the Leasehold Committee expressed the view that under the Town and Country Planning Act, if leasehold enfranchisement were brought about or options to purchase were incorporated in the lease, it would tend to kill the leasehold system.
  As far as I am concerned, I should like to see the building lease system completely killed. I do not think it has any place at all in the law of our land today. Unless the building lease system is killed, the ground landlord has one very good way of circumventing the operations of the Town and Country Planning Act. Under that Act, the development value in land is taken away from him. He gets his compensation out of the £300 million fund. But I have not yet come across a case where the building lessor has been taking any less rent than he was taking before the Town and Country Planning Act was passed, because the development value of that land has been taken away from him.
  Anyone who takes the land now should take it only on the basis of its existing use value. But the ground landlord is

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  obtaining the same ground rent for the land that he could have obtained before the passing of the Act. When the building lessee wants to build his house upon it, he has to pay a development charge to the Central Land Board. Let us put it at £500. What happens, if the building lease system is permitted to operate, is that the building lessor, or his descendants, at the expiration of the lease will take the land, the building on it and the value of the development charge. Therefore, the continuation of this building lease system will completely circumvent the desire of the Government expressed in the Town and Country Planning Act. For that reason and for others, there is no longer any purpose in maintaining this building lease system in our country.
  There is one other short point I should like to raise with my right hon. and learned Friend, which has been referred to before in connection with the debate, and that is the definition of "family." I know that the right hon. and learned Gentleman said that it has been sufficiently clarified by judicial decisions. As I understand the position, "family" has been taken by judicial decision to include, as well as the wife and children, the tenant's husband. That was decided in the case of Salter and Lask. A case was required to decide that. In another case in 1930, that of Price and Gould, it was decided that brothers and sisters were members of "a family" Further, by Brock and Wollom, it probably means that stepchildren and illegitimate children may be regarded as members of "a family."
  The text book I have referred to in regard to this matter says that probably grandchildren, nephews and nieces who live with the tenant are members of "a family." No legal decision has yet decided that they are members of "a family." The point is that unless we get a proper definition, we may have some exacting landlord who will take a tenant to the Court of Appeal to decide whether his nieces or grandchildren are members of "a family." I see no difficulty in introducing some definition in the Bill.
  If the right hon. and learned Gentleman says that these people I have referred to constitute "a family," what is the difficulty in putting it in the Bill? If there are others who ought to be included, then why not put them in as
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  well? Why should a tenant have to run the risk of going to the Court of Appeal to decide whether he is a member of "a family" or not? Further consideration should be given to this, to see if some definition cannot be included to make this a more workable Measure.
  8.7 p.m.
  Mr. Molson: A good deal of the speech of the hon. Member for Pontypool (Mr. Granville West) was devoted to a general discussion on the policy of building leases and directed, no doubt, to the time when permanent legislation will be introduced to deal with that matter in accordance with the promise of the Attorney-General. The latter part of his speech dealt with Committee points, and I trust that he will acquit me of any discourtesy if I do not follow him in any great detail in this respect.
  I shall read with special care and attention what he has had to say about circumventing the provisions of the Town and Country Planning Act. In those parts of the country with which I am familiar, the effect of that Act, to which I gave general support, has been almost to bring to an end all development by private speculators. I do not know whether I shall not welcome the discovery that the ingenuity of South Wales men has enabled them to continue to build houses despite the provisions of the Town and Country Planning Act.
  I want to say a few general words about the Bill. It is a remarkable thing, when this Government of planners has been in power for more than five years, that we should now be confronted with an interim Measure of this kind. A number of Members opposite have told us how great, how pressing and how long standing is this problem, In those circumstances, we should have expected that as soon as the Government came in, being anxious to liberate tenants from the tyranny of the system which has been described to us, almost the first action they would have taken would have been to set up a committee to investigate the matter.
  Since we are told that this is a problem which particularly harasses South Wales, we might have assumed that the Minister of Health, upon his appointment to that office, would have thought what a happy

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  coincidence it was that he should be appointed especially to be responsible for matters of this kind, remembering all the hardships under which he and his fellow Welshmen have suffered since their childhood. Although the right hon. Gentleman went to the Ministry in 1945, it was not until 1948 that he thought of setting up the Committee under Lord Uthwatt. So impressed were the Government with the need to deal with this matter, that they presented an interim Report in March, 1949, but it has taken them from then until now to agree upon an interim Measure. And what a strange interim Measure it is. It has no relationship to the recommendations of the Leasehold Committee which had been set up, and whose Reports they had been considering for so long.
  The Bill is divided into two parts. The principles which it applies in one part have no application in the other. Indeed, one might say that in both cases there is no general and permanent principle applied at all. Little expedients have been resorted to to deal with two kinds of leasehold. We have been told—and this, indeed, I welcome—by the Attorney-General that the Minister of Health and his Department are examining the Rent Restriction Acts with a view to codifying and amending them. I trust that the study will be conducted with greater expedition than has been the case with the Bill now before us. I urge that something be done to bring rents generally into line with the prices of building and repairs.
  Let me deal, very briefly, with Part II. To that I can give a general welcome. Much as I dislike any interference with the free play of supply and demand I recognise, and the party to which I belong recognise, that to prevent the consumer from being exploited where there is a state of acute shortage, it is necessary for the State to step in and to exercise some control. At present the State is exercising control over all building, and very few shops are now allowed to be built in this country. Therefore, it is only fair, right and reasonable that shop occupiers should enjoy reasonable protection.
  I welcome the method which the Government have adopted in dealing with this matter and which bears a certain resemblance to the proposals of the Ridley Committee on Rent Restrictions. I agree
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  with my hon. Friend the Member for Lewisham, North (Sir A. Hudson), and I hope that the Government will give careful attention to the recommendations of that Committee. The county court is probably a good substitute for the rent tribunal, but I hope that the Government will agree that some guidance should be given to the county court. The courts should take into account all relevant considerations and not only what Parliament thinks should influence their discretion, which is unfair to the courts. It would be reasonable to require the courts to take into account the increase in the cost of repairs.
  I welcome those provisions. A constituent of mine who has occupied a shop for 10 years has paid a yearly rent of £65. When the rent was due for renewal he obtained the opinion of a valuer, who suggested that at present a fair rent would be £90 a year, an increase of approximately 50 per cent. over the 10-year period. The landlord sought to obtain a rent of £250. We on this side of the House do not wish to enable landlords to take advantage of a temporary condition when there is an acute shortage of accommodation of that kind. I suggest that it is necessary that the county courts should be given guidance as to what would be a reasonable increase in the rent as a result of the change in the purchasing value of money.
  The Attorney-General: I listened with great interest to what the hon. Gentleman has just said. Does he think that we should have some provision to exclude scarcity value?
  Mr. Molson: Yes, that is my personal opinion. I entirely agree that scarcity value should be excluded. That is the reason why I am in favour of the local tribunal; but I am asking that the landlord should be entitled now to receive a rent which makes adequate provision for the increased costs which he has to bear as owner of the property.
  I now turn for a moment to Part I. I can see no justification whatever for a purely arbitrary extension of all leases as they fall in, for two years. I listened with attention to cases which were mentioned by hon. Gentlemen opposite. I do not exclude at all the desirability of the State intervening to prevent exploitation of a tenant in cases where the owner of

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  land has enjoyed a monopoly. It appears to me that exactly the same line of reasoning that I have applied to shops, where there is shortage of shops, can logically be applied in cases of building leases. I do not suggest that the same has applied in the case of all building leases. Building leases given at different times in different parts of the country, have all been treated in exactly the same way.
  The Attorney-General, who said that we cannot legislate to deal with hard cases on the principle that hard cases made bad law, might also bear in mind the opposite and equally true statement that bad law certainly does make hard cases. In any case there should surely be some increase in the grants which are allowed in these cases. The fact that the Government are providing for this in Part II shows, according to their own line of reasoning, that there can be no justification for refusing it in Part I. As these leases dealt with in Part I are of very long standing, the fall in the value of money in 99 years is very much greater than the fall in the value of money in the last 10 years.
  I hope the Attorney-General will keep an open mind about Clause 4. I was interested in the argument which he advanced at one point in his speech. He was showing why the Government had not been willing to introduce a statutory rent restrictive tenancy in place of the building lease. On a question of altering the rent, he said that if that were done it would be necessary in each case to take into account the provision of the lease requiring repairs, and so forth and so on. I think that was an impressive argument, but surely he must realise that it is unreasonable to continue the duration of these building leases for a further period of two years, and suspend the operation of all conditions that apply. That is inequitable.
  Here, I must refer to the speech of the hon. Gentleman the Member for Clapham (Mr. Gibson). He said that he would deal with the matter from the social and not from the housing point of view, as was done by my hon. Friend the Member for Hampstead (Mr. H. Brooke). What greater social interest is there than the preservation of houses in a good state of repair? I am not sure that if somebody, 100 years hence, writes a really impartial book upon the housing records of this
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  Government, the greatest criticism will not be that they did so little to prevent the existing housing stock of the country from falling into a state of disrepair during the time they were in office. Surely to give tenants a continuation of their leases and make no provision for their houses to be kept in a reasonable state of repair is the most anti-social action that could be taken.
  I hope, also, that the various conditions which are at present requiring to be kept by tenants will be noted by the Government during the Committee stage, and that all the provisions of that kind that are fair and reasonable will be preserved in operation during these additional two years. I hope, further, that the Attorney-General will not overlook the unfairness of giving a fortuitous advantage to those tenants who happen to be in possession at the present time. It may be that if someone who has suffered hardship in the way hon. Gentlemen opposite have mentioned has sold the remainder of his lease to another person to avoid the liability for repairs, and so on, the purchaser will enjoy a benefit to which he has no entitlement either in law or in equity.
  I regard this as a typical piece of legislation by the present Government. It is hand-to-mouth legislation. They have postponed for another two years the time when a decision will have to be taken upon these difficult subjects. For five years this Government of planners have been unable to decide upon their plan, and they have to take two more years at least to consider further this very important question.
  8.25 p.m.
  Mr. Weitzman: I hope it will be appreciated that this problem is not confined to South Wales. I have the honour to represent what is the largest London constituency, and there are many difficulties arising from occupation of leasehold property in that constituency, with which my constituents are concerned. The hon. Member for The High Peak (Mr. Molson) taunted the Government with having brought in what I imagine he would call a stop-gap Measure. The evil which the Bill seeks to remedy has existed for many years. The difficulties of the Rent Restriction Acts, the Landlord and Tenant Act. Leasehold

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  enfranchisement and such other subjects have been continuously before the public.
  There were many years before the war when there was plenty of time for the Conservative Government in power to tackle this matter. Therefore, it hardly lies in the mouths of hon. Gentlemen opposite to taunt the Government for not having done anything, particularly when we are faced with a majority Report, and a number of minority Reports on this intricate question. How anyone could expect legislation dealing with matters such as are set out in the majority Report to be brought before the House in the conditions under which we are working today I do not know.
  I very much welcome this Measure, but I, too, would like to criticise it in some respects, because I feel that it does not go nearly far enough. My main criticism is this. Although it is true that on the final Report of June, 1949, it would have been impossible to bring in an agreed Measure on leasehold enfranchisement, there was a great deal of agreement in that Report, and a Measure could have been brought in containing a great deal more than is contained in the present Bill.
  Reference has already been made to paragraph 68 of the interim Report. That paragraph had the support of very many members of the Committee. Paragraph 68 explicitly recommended an extension of the provisions of the Landlord and Tenant Act, 1927. Considerably beyond what is set out in this Bill. The paragraph says:
  "The evidence submitted to us shows that no class of business activity is immune from the dancers of exploitation by landlords. Doctors, lawyers and professional men generally; trade associations and trade unions; professional, learned and voluntary bodies of all kinds need protection equally with industrialists, shopkeepers and other businesses."
  Having got agreement on that point, was there any reason why Part II of the Bill should not have been drawn up so as to include all these people? I can understand the argument of the Attorney-General that the law of landlord and tenant contains many thorny problems and that one could not get agreement on all of them, but when in the Report of a Committee there is agreement about a Measure of that kind, and when it is patent to all that here is an evil which ought to be dealt with as quickly as pos-
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  sible, why was it not possible to draft a Clause specifically extending the right to continue occupation not only to shopkeepers but also to professional people and all the others mentioned in paragraph 68?
  I turn now to a number of matters arising out of the Clauses in the Bill. I strongly agree with the criticism which has been uttered of Clause 10 and the use of the words:
  "… the court may, if in all the circumstances of the case it appears reasonable so to do …"
  The result of a Clause of that kind is to leave a person at the mercy of the tribunal. We know that county court judges are very fine people, taken as a class—and I should not venture, especially in this House, to offer a word of criticism against them—but they are only human beings and they differ from one another in what they think is reasonable. In cases under the Rent Restriction Acts, in which the word "reasonable" is used, there is very often a great deal of feeling over the way in which this term is interpreted. Surely we should make clear in the Bill how the court should act in this matter. Some guidance ought to be given to the tribunal It is true that Clause 10 (3) lays down conditions in which a court shall not order the grant of a new tenancy. That may help in some degree, but it does not deal with the point. Something ought to be done to prevent any difficulty arising from the use of these words.
  A curious provision is contained in Clause 12 (4). Under the Landlord and Tenant Act, 1927, in regard to a right of compensation one had to show occupation for a minimum period of five years. Why it should be said in Clause 12 (4) that in considering the period of occupation one has not to take into account the period of extension given to the tenant I do not know. The tenant is still there, carrying on the business, and I can see no reason for the inclusion of the subsection.
  I deprecate excluding the right of appeal as provided for in Clause 13. I know that it was thought proper to shut out the right of appeal in the rent tribunal legislation, and I know that it was said that it ought to be cut down in those cases because they were simple cases, but when we get complexities in a Bill of this nature, such as the use of the

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  word "reasonable." what harm is there in preserving the ordinary rule in regard to actions in the county court, that if there is any appeal on a question of law the litigant has a right to pursue it? I hope that we shall not in any way limit the very important right to go to the court of appeal.
  The Attorney-General: And the House of Lords?
  Mr. Weitzman: My right hon. and learned Friend knows perfectly well that when one goes to the Court of Appeal one must get leave to appeal to the House of Lords. Unless there is a very important question at stake, or unless the House of Lords gives leave to appeal, there is no question of going to the House of Lords. The problem, therefore, is a simple one.
  The Attorney-General: I do not want my hon. Friend to think that I am not impressed by his argument or am not interested in this question, but it would help me very much if someone would suggest the kind of point of law which might be taken to the Court of Appeal. The question of reasonableness would, normally, be one of fact, turning on the circumstances of each case. I do not see how there can be a question of appeal on what is "reasonable." That is essentially a question of fact.
  Mr. Turner-Samuels: The whole Bill is to last only two years. Going to the House of Lords would certainly take longer than that.
  Mr. Weitzman: There is nothing in the argument of my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels), because one can do a great deal even within two years. To my right hon. and learned Friend the Attorney-General, I say that if one could not conceive of any point of law in regard to the meaning of the word "reasonable," the difficulty does not arise; there would then be no right of appeal.
  It is difficult when a Bill is before the House to anticipate what complexities will arise in its operation. My right hon. and learned Friend will know that when the Workmen's Compensation Act was passed it was not thought that there would be any question of taking any matter to the Court of Appeal, but one has only to look
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  at the decisions which have been made to realise the wealth of learning which followed in many decided cases. If it would do no harm, and if there is a possibility that a case might arise in which a point of law can be taken surely the right to go to the Court of Appeal should be preserved.
  I turn now from Part 11 to Part I of the Bill. I certainly welcome, as far as it goes, the right of continuing a tenancy for two years, but there are one or two points about which I want to inquire on this part of the Bill. I should like my right hon. and learned Friend to give some meaning to the expression "member of a family." A great deal of legal definition is contained, I know, in cases. The words of the Rent Restriction Acts show that a member of a family was a person who had been living with the tenant for a period of six months. In the Bill, Clause 2 contains the words:
  "either the person who was the tenant immediately before the date of continuation or a member of that person's family."
  What does that mean? Does it mean, for example, that a person who was in occupation for one day only has a right to continue there? This illustrates the sort of case which requires that a proper definition should be given. I should like to know, also, what is the meaning of Clause 2 (4). If it means what I think it means, it is very badly expressed. I should not like to put my suggestion forward, but I should like the wording to be looked at to see whether it can be clarified in some way.
  I agree with some of the criticisms that have been made that forfeiture of a lease should not be restricted only to the questions of non-payment of rent or a breach of the insurance clause. I was not present when this aspect may have been referred to by other Members, but it is clear that if a person misuses premises—for example, if he uses a house as a brothel, or there is a wrong user of the premises in some other way—the right to forfeiture ought to remain. These points can doubtless be dealt with in Committee, but my main criticism of this part of the Bill is that it does not go nearly far enough: it merely nibbles at the problem.
  The final Report contains many clauses which received the support of most of the

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  members of the Leasehold Committee. I am looking now, for example, at page 99 of the final Report. I look at recommendation 2, which recommends:
  "That the provisions of the Leasehold Property (Repairs) Act, 1938, should be extended to all types of premises, irrespective of their rateable value. …"
  That is a very important recommendation. I also read other provisions, for example, recommendation 6, which suggests that "rent" should be defined because of an obvious difficulty which arises under the Housing Act, 1930. Then, if we look at recommendation 9 we find that
  "a standard form of weekly tenancy agreement for incorporation in the rent books required by the Rent Acts for weekly lettings of controlled houses"
  is recommended.
  If we look at the recommendations, on page 118, we find
  "that absolute covenants against assignment or sub-letting should be construed as if they were covenants against assignment or sub-letting without licence or consent, and should thus be subject to the proviso that consent is not to be unreasonably withheld."
  Surely we have there a great many recommendations which are not of a controversial kind in regard to which everyone is agreed on matters by which vital changes of the law could be made.
  One hon. Member opposite said, and I very strongly agree, that in a Parliament of this kind, where, very often, we have a lot of time to do certain things, those are the sort of things we should deal with in the Measures brought forward. We must recognise that however thorny the field of the law of landlord and tenant may be, and however impossible it is to get rid at the moment of the complexities and difficulties of the Rent Restriction Acts, there are a very large number of recommendations of a vital kind, agreed by everyone, and I should have thought that this Bill could have introduced these measures of reform and remedied a great many evils which exist. I regret exceedingly that that has not been done.
  I support the Bill as far as it goes; I think it is very important for the short benefit it confers, but I hope that at an early date something will be done to remedy the many present evils in the field of law of landlord and tenant.
  8.42 p.m.
  Mr. Black: Possibly I may have an interest in this matter which it would be proper for me to disclose. I am interested in various companies which own land and property. I cannot recollect any cases of ground leases expiring within the next two years, so it may be that I have no personal interest, but, if I have an interest then I declare it now.
  In the very short time for which I can speak, I do not want to go in great detail into the case for or against leasehold enfranchisement, but I feel that there are two classes of people in regard to leasehold enfranchisement to whom reference has not been made in the very moving and appealing speeches on the subject to which we have listened from the benches opposite. In my constituency there are a good many houses belonging to the local borough council which are let to tenants. In some cases the tenants are anxious to buy their houses and the borough council is willing to sell the properties to them but, owing to the intervention of the Minister of Health—without whose consent council houses cannot be sold—those occupiers are deprived of the opportunity of buying the homes in which in many cases they have lived for many years, although the owners of the property, the local authority, are willing and anxious to sell them.
  There is also the case of those people who own the freeholds of their own homes in the new town areas and have enjoyed the ownership of those freeholds for many years past, and who are now to be dispossessed of their freeholds and will only have the opportunity of acquiring leasehold interests in place of the freeholds. I am sorry that more regret has not been expressed from the benches opposite in connection with this subject of leasehold enfranchisement for those two sections of the community whom it is within the power of the Government quite easily to assist, but who are deprived of the opportunity of acquiring or retaining their freeholds by the action in the one case of the Minister of Health and in the other of the Minister of Town and Country Planning.
  The differences of opinion in regard to this Bill and in regard to the leasehold system generally which have emerged from our debate today seem to me to arise very largely because of a difference of view

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  as to the merits of the leasehold system itself. There are, quite clearly, Members on the benches opposite who hold the view that the leasehold system is a bad one, and that the sooner it can be brought to an end the better it will be for leaseholders and for the community at large. That view is not, I think, held by Members on the benches on this side of the House. We would subscribe to the view expressed by the Leasehold Committee when they say:
  "We ourselves take the view that the leasehold system is a convenient and even an essential feature of our real property law."
  Mr. Ungoed-Thomas: Of course, the hon. Member must draw a distinction, as a distinction is drawn in these Reports, between the building lease system and the general application of rack rent leases?
  Mr. Black: I am obliged to the hon. and learned Gentleman. I fully appreciate that that distinction exists, but I still say that the leasehold system has by and large conferred great benefits down the years, and that the advantages of the system far outweigh the disadvantages to which reference has been made in today's debate.
  Mr. H. Hynd: When the hon. Member says that it has conferred great advantages, on whom does he mean it has conferred those advantages?
  Mr. Black: It has conferred great advantages on sections of the community who could not otherwise have secured a long-term interest in the ownership of property because they had not sufficient money both to pay the purchase price of the land and put up a house, and whose finances, but for the fact of their being able to acquire a site on a long lease, would not have enabled them to acquire a house at all. That is a section of the community on whom the ground lease system has conferred great advantages.
  But it is agreed on both sides of the House that there is a case for a Bill to deal with this matter. That fundamental point is not really at issue at all, but I wish to occupy the few minutes that remain to me in pointing out the difficulties and disadvantages of legislation of this kind. Such legislation is often open to the danger, in the process of seeking to cure a certain class of grievance, of creating more grievances and more difficulties than the grievances and difficulties that
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  are cured by means of the legislation. I am not at all sure, that this consequence may not follow from the type of legislation which we are now discussing.
  Interference with the right of contract between landlord and tenant, and particularly with the landlord's right to recover possession of his property at the end of the contract, inevitably leads to less and less property being available for letting, and to landlords taking up the position that they will sell their properties only when those properties come into their possession. The Rent Restriction Acts are a good example of that. No house is re-let today when it falls vacant. It is sold, and thereby the renting public are deprived of the opportunity of a tenancy. The same is true of farm properties. Farms are invariably sold today when they come into possession, because the landlord cannot be sure of getting back possession of the property if he lets it when the contract expires. Therefore, he prefers to sell on a favourable market rather than to let with all the uncertainties that will follow.
  I give one example to illustrate the point I am seeking to make. It follows from the operations of the Landlord and Tenant (Rent Control) Act, 1949, which introduced an element of uncertainty as to the rents which will be obtained by builders of new property or by persons converting existing properties into flats. In my constituency there are many big houses which were in process of conversion into flats when this Act came into force. We can agree that it is advantageous from the point of view of the community at large that houses which are too big for single occupation should be converted into several flats, thus making a contribution to the solution of the housing problem.
  In the five years before the passing of this Act—the years 1945 to 1949 inclusive—the rate of conversion per year of houses into flats in the borough of Wimbledon was an annual average of 76 houses converted into 314 flats. For five years we had on an average over 300 new flats a year put on the market as a result of the conversion of big houses for multiple occupation. But in the year that has followed the putting on to the Statute Book of this Act the number of houses converted into flats has been 12 and the number of flats provided has been 37. Therefore, we reach the position that when we control, unreasonably as the

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  landlords may feel, the right to fix a rent by negotiation with the tenant, at the same time we dry up the source from which new housing units are made available to the public.
  The fact that in the year following the passage of that Act the number of flats provided by conversion of large houses has fallen to little more than 10 per cent. of the average number provided in each of the previous five years, is a good example of the argument that interference with the ordinary operation of contract between landlord and tenant dries up the supply from which new houses and flats come.
  Mr. Mitchison: Do I gather that the hon. Gentleman and his right hon. Friends are in favour of repealing the Rent Restriction Acts?
  Mr. Black: No, Sir. We regard the Rent Restriction Acts as essential owing to the failure of the Government in the past five years to build houses in adequate numbers. Because this emergency arises as a result of the shortage, we look upon the legislation as inevitable.
  Mr. Turner-Samuels: Is the hon. Gentleman in favour of including in the Rent Restriction Acts the selling of the very same houses in connection with which the leases are restricted?
  Mr. Black: On this matter I agree with the view which has been expressed on a number of occasions by the Minister of Health that it is impracticable to do so, and that any attempt to control the selling prices of individual houses would be bound to break down because of the administrative and legal difficulties.
  I want to conclude on the point I was making that, while under present abnormal conditions there is a case for a Bill, the detailed provisions of this Bill will have to be looked at most carefully in Committee, as there is a very real fear that, if the Bill is not carefully and wisely framed, more harm than good will result.
  8.55 p.m.
  Mr. Manningham-Buller: Having listened to most of the debate, I must say that the Bill has not been received with any remarkable degree of enthusiasm. Indeed, ever since it first saw the light of day it has been subjected to severe criticism, and not least by "The
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  Times," which published an excellent leading article only equalled in its severity by the articles it published about the proposals of the party opposite for the nationalisation of iron and steel.
  Some of those who are prepared to accept this Bill have made it quite clear that they are willing to give more time to the Government to think about what should be done, while regretting that the Bill contains no proposals of a permanent nature. The hon. Member for Pembroke (Mr. Donnelly), who made an eloquent speech, and the hon. Member for Clapham (Mr. Gibson), who made a somewhat confusing speech, did not think that two years was long enough. They may be right. It may take five years for the Government to make up its mind what should be done, they may be right in their view of the Government, but, if the Bill is extended beyond two years, its extension will, in my opinion, have deplorable consequences.
  I hope that the right hon. and learned Gentleman, in view of what has been said from his own side of the House in the debate, will make it clear beyond doubt, when he comes to reply, that it is the intention of the Government that the Bill should only be temporary, and that it will not be extended by the Government for more than the two years which is provided in the Bill.
  Before saying any more on this matter, I think I must comply with the usual custom of the House and declare that I have an interest indeed, two interests. I have no interest in Western Ground Rents, but I am a trustee and also a beneficiary of an estate. I have made inquiries, and I think it is just possible that there may be four cases which come within Part II of the Bill and possibly one which comes within Part I. But I have, of course, another interest. I once wrote a book on this very technical subject of landlord and tenant, and, if the Government had introduced a permanent Measure of the magnitude contemplated by the Report of the Committee, I feel quite certain that an invitation would have been extended to someone, and perhaps to me, to prepare a new edition.
  I hope that, having declared these interests, I shall not be thought to be prejudiced against this Measure, but perhaps to be more qualified to express a view about it. Before making any com-

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  ments on the Bill itself. I should like to draw attention to what is a rather curious coincidence in our political life, in that the opening speeches from the Front Benches on either side of the House were, on this occasion, made by members of the Northern Circuit, and the winding-up speeches from either side will be made by members of the Midland Circuit.
  I am sure that the right hon. and learned Gentleman will agree with me when I say that we of the Midland Circuit always enjoy watching how those of the Northern Circuit do their work, and, in this connection, I should like, if I may, to pay a tribute to the delightful, and at the same time devastating, speech made by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). He triumphantly surmounted the ordeal, and it is an ordeal, of speaking for the first time from this Box. I hope the House will not take it amiss if I offer him my congratulations, and congratulations not only upon his speech today.
  The right hon. and learned Gentleman, in moving the Second Reading, gave us a detailed explanation of the Bill. Indeed, he established today, contrary to what has been happening elsewhere, that the stickier the wicket the longer he bats—but without making many runs. But it is indeed a disappointing Bill—disappointing to some because it does not go further. At the same time, there is the possibility that we can make it, if not a good Bill, at least a fairer and better Bill in the course of the Committee stage, if only the Government are prepared to listen to the suggestions put forward from this side of the House. It is in the hope that the Government will pay attention to the views that we put forward that we are prepared to give the Bill a Second Reading without a Division tonight. In the light of what happens during the Committee stage we shall, of course, consider what our action shall be on the Third Reading.
  As I have said, it is a disappointing Bill. After all the trumpeting at the General Election, after the Lord President's broadcast, in which he said:
  "One important reform we shall introduce will he the law of leaseholds which, at present, does injustice to many tenants, including thousands of small shopkeepers and businessmen."
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  —after all that, we have this Bill. This is the important reform—
  The Attorney-General: Oh, no.
  Mr. Manningham-Buller: —which is instituting a "house freeze," as my hon. and learned Friend said. I think that the first question that really requires to be answered and which has not been answered as yet is: Why was this Bill, or a Bill of this nature, imposing a freeze, not introduced before?
  Mr. Turner-Samuels: It is only a half freeze.
  Mr. Manningham-Buller: The hon. and learned Gentleman can modify my words in that connection if he wishes whenever the party opposite gets into difficulties it causes a freeze of one kind or another. First, the "wage freeze," then a "house freeze," and one can guess what the next freeze will be when the supply of coal runs out.
  Why was a Bill of this character not introduced before? There was the interim Report, which was presented to the Government in March, 1949. But nothing was done in spite of the pressure by the hon. Member for Pembroke and others at Question time. Nothing was done, and now we have this standstill Measure, which does not fulfil the Government's election pledges. I should be interested to know the reasons for the delay. Is it because the right hon. and learned Gentleman and the Government want time to think, or is not the true reason that the Government want time to make up their minds? I am all in favour of their being given time.
  It is always easy to make a cheap gibe at landlords, and we have had examples of that today. But hon. Members opposite must decide whether they are in favour or opposed to the leasehold system, and, if they are opposed to it, to what lengths their opposition goes. They must decide whether, as a general principle, they are in favour of people keeping their word when they have given it or breaking it—and when one talks, using the familiar phrase, of the sanctity of contract, to put it in ordinary language it really means that one is in favour of people keeping the word they have given.
  I quite agree that where people are tricked into contracts by fraud they should be relieved of the obligation to

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  keep their word. The same applies where an improper advantage is taken, but we in this House ought to be extremely careful when we interfere with bargains which have been made and when we relieve people of the obligation to fulfil their promises.
  Mr. Turner-Samuels Mr. Turner-Samuels rose—
  Mr. Manningham-Buller: I will give way to the hon. and learned Member just this once.
  Mr. Turner-Samuels: I agree with the sanctity of contracts, and every decent person will. Suppose one gets a case of economic pressure where people are forced to enter into a contract which is morally unfair. I still say that there ought to be enforcement, but ought not the Government to intervene to protect the public against the abuse of that economic pressure?
  Mr. Manningham-Buller: Owing to economic pressure largely arising in so many spheres, from the policy of His Majesty's Government, many people, no doubt, will have to go to their banks to try to secure overdrafts. They will make a contract to repay the overdraft. Does the hon. and learned Gentleman really think that an obligation to repay a loan—a loan obtained on account of economic pressure—should be freed because of what the Government have done?
  Mr. Turner-Samuels Mr. Turner-Samuels rose—
  Mr. Manningham-Buller: I said I would give way to the hon. and learned Member once.
  Mr. Turner-Samuels: I quite agree that once a contract is entered into it ought to be carried out. I am talking about the future and not about the past.
  Mr. Manningham-Buller: I have not had the advantage of hearing the hon. and learned Member's views about the future. I am talking about contracts entered into a considerable time ago and I was referring to ground leases.
  I come back to my theme. The party opposite must make up their minds where they stand on this matter. The majority Report of the Leasehold Committee, on page 30, made quite clear the views they hold about these leasehold tenures. They said:
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  "We ourselves take the view that the leasehold system is a convenient—and even an essential—feature of our real property law. It enables the residential tenant to avoid the initial outlay, risk of capital loss, and permanent choice of a particular place of residence involved in buying the house he lives in. It is an invaluable aid to the financing of many schemes of development or accommodation for businesses to be obtained without locking up in the purchase of the freehold capital required for other purposes. Financial considerations apart, it provides means, hardly to be replaced, by which the development and use of given areas can be carried out and controlled in accordance with a uniform policy in the best interests of the neighbourhood and of the community generally, whether by private owners of large estates or by Local and other Public Authorities."
  Mr. David Grenfell Mr. David Grenfell (Gower) rose—
  Mr. Manningham-Buller: I am limited for time. I am asking the right hon. and learned Gentleman the Solicitor-General to deal with these matters, because we really must know where the party opposite stands. That view was expressed by the majority in that Report. The hon. and learned Member for Leicester North-East (Mr. Ungoed-Thomas) will correct me if I am wrong, but I do not think I have read anything in the minority Report, signed by him, dissenting from that proposition.
  Mr. Ungoed-Thomas: The minority Report is confined, of course, to the occupying ground lessee and the hon. and learned Member will appreciate that much of the statement in the majority Report dealing with the leasehold system deals with the rack rent system.
  Mr. Manningham-Buller: No doubt.
  Mr. Grenfell: Does the hon. and learned Member appreciate that all these building leases or agricultural leases were at a value more than 20 times the value of the original purchase?
  Mr. Manningham-Buller: I am sure that that is not the case generally. It may be so in some places, but I will come back to that in a moment.
  I think it is clear from what the hon. and learned Gentleman said, and indeed from the other speeches, that the real objection of hon. Members opposite is to any form of ground lease. I will ask them to consider this: when we had the 1947 Town and Country Planning Act under consideration there were proposals for dealing with blitzed and blighted

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  areas. It was provided that no one within those areas should be able to acquire the freehold. There had to be long leases limited, I think, to 99 years.
  When we had the New Towns Bill before us it was laid down that there should be long leases but no freeholds. According to my recollection, we on this side of the House during the passage of both those Bills, pressed for people within the areas affected to be allowed to acquire the freeholds. That was opposed, and it is really very inconsistent for the party which opposed that, to come forward today and tell us that they are the champions of leasehold enfranchisement. If, indeed, they believe in people having the freeholds, I am surprised that they did not help us to secure that during the discussions on the New Towns Act.
  Mrs. Middleton: Surely the hon. and learned Gentleman draws a distinction between the ownership of land by a local authority in the public interest, and the ownership of land by people purely for private interest.
  Mr. Manningham-Buller: I draw no distinction at all. The Government have not done so in the Bill. I do not accept the proposition that the State or a local authority always prove the better landlords. If I may take the hon. Lady's memory back to the 1927 Landlord and Tenant Act, what led to the passage of that Measure was not the conduct of the private landlord. It was the State, and the huge rents demanded for fresh leases of Regent Street properties.
  Mrs. Middleton: That was under a different Administration.
  Mr. Manningham-Buller: That argument will not hold.
  As I was saying, it is by no means right to assume that the State is the better landlord. I am sure the hon. Lady will admit that private landlords, in this matter, have played a very useful part. But for the private landlords, the West End of London would not be like it is today.
  Mr. Gibson: Nor the East End.
  Mr. Manningham-Buller: The good lay-out of the West End has been due to the owners of large estates, and I am sure that has been to the advantage of the community.
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  In the debate today we have not heard very much about leasehold enfranchisement. It has been made clear to us that on this issue the Liberal Party are once again, unfortunately, divided. I must say that I am very surprised at the violence of the attack which has been made concerning ground leases. I think perhaps the most savage attack came from the hon. Member for Pontypool (Mr. Granville West). He asserted that in fixing the ground rent, the value of the building to be erected was not considered. I am sure that that is not right. Does anyone believe that if a landlord is trying to let a building he will not get a higher rent than if he tries to let the land free of buildings? The bargain which is made in relation to a ground lease is this: in return for the erection of a building which will ultimately become the property of the landlord—that is, the original bargain made—there will be a very much lower rent.
  Mr. Grenfell: I do not agree with that point of view.
  Mr. Manningham-Buller: But hon. Members opposite do not suggest that if the landlord builds the building himself and lets it at a rack rent then, at the end of the lease, it should become the property of the tenant. They have not suggested that at all in the debate, and yet we can find ground lessees occupying premises at present at a much lower rent than the rack would be, and less than the rack rent of equivalent premises.
  Mr. Gibson: Because of building the house.
  Mr. Manningham-Buller: Because the building of the house has been taken into account in the original assessment of the rent.
  Mr. Gibson Mr. Gibson indicated dissent.
  Mr. Manningham-Buller: It is no good the hon. Member for Clapham indicating "No"; earlier today he tried to assert that people who bought ground leases thought they were buying the freehold, and I must say that I found that an argument which was very difficult to follow.
  Mr. Grenfell: I do not know of a single case of a landlord becoming a building speculator. He does not do it in that way. He puts up a sign "Land to let for building," and people who must have land go

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  to ask his price. He generally asks as much for the building plot of one-eighth of an acre as he would ask for the whole acre before building began.
  Mr. Manningham-Buller: That is not the point. I am sorry if I have not made it clear to the hon. Gentleman, but that is not the point I was trying to make. Obviously, in a free society the owner of a plot of land will try to get what rent he can, but obviously he will get a higher rent if he has incurred the cost of putting up a building. In the case of the ground rent, instead of putting up the building he receives a lower rent, and the cost of putting up the building represents the difference in the rent. I hope I have made that clear. It seems to me astonishing that, whereas, in the case of rack rent, no one opposite has suggested that the tenant should be relieved, as a general principle, of the obligation to keep his word, yet, when the contract is a little different, that is strenuously pressed.
  Hon. Members on all sides of the House sympathise on this question, with tenants who have lived in the same house all their days, as have, perhaps, their families before them, but I cannot help thinking that the number of ground lessees who are doing that is very limited indeed. The hon. Member for Bury St. Edmunds (Mr. Aitken) clarified the position in relation to Cardiff. about which some confusion has been caused by the hon. Member for Cardiff, West (Mr. G. Thomas). Indeed, the Report of the majority of this Committee, as shown in paragraph 61, is to the same effect. It says:
  "Such factual information as we have been able to obtain from South Wales and other localities where the leasehold system is predominant, suggests that relatively few ground leases of working class dwellings are now held by the actual occupants, who in the majority of cases held weekly tenancies from intermediate landlords. We have, moreover, heard of practically no cases in which occupying ground lessees have in fact been compelled to quit their holdings on the expiration of their leases."
  That is a very astonishing statement. One would have thought that if cases of that kind had occurred, they would have been brought to the notice of the Committee. At the same time, I must say that no one in the House wants to see that class of tenant moved out of the premises which he has occupied for so long. We are all in agreement about that and I am
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  sure that no good landlord wants to see it, either, whether we pass this Bill or not.
  We can give protection to that category of tenant by the extension of the operation of the Rents Restriction Acts, as suggested in the majority Report of the Leasehold Committee. That would be much easier to introduce than the procedure foreshadowed in the Bill. I know there is a difficulty about covenants, but I think that could be overcome. We could secure that they had security of tenure, we could secure that their rents were controlled, but even though one may wish to do that it is not always desirable or possible—and I think this must be recognised—to secure that people who have lived in a house or shop for a long time shall continue to do so. It may be that planning considerations have to be taken into account—the widening of a road or something of that sort—or, indeed, it may be that a new purchaser, because the weight of taxation has forced the old ground landlord to sell out, has come along who adopts a different attitude to the tenants than the former landlord would have done had he remained in occupation.
  My hon. Friend the Member for Lewisham, North (Sir A. Hudson) referred to the case of the Arcade Royale at Halifax. There, there is a row of shops, all bought by the Co-operative Society, and the tenants of these shops are all given notice to quit. Well, I suppose something of that sort may from time to time have to happen in the cause of planning and co-operative progress, but I feel sure that there again we should like to see—and we are united in wanting to see—some protection in these days of scarcity against the shopkeeper, the small man, being abused by a bad landlord. But I am sure that these cases are few in number.
  It really is an anomaly, and has been an anomaly, that the tenant under a ground lease of a house that would otherwise be within the Rent Restriction Acts is not protected by these Acts. I believe that would be a much easier change. It it really curious to reflect that until the Knightsbridge case, quite recently, the sub-tenants of a house held on a ground lease were always thought to be within the Rent Restriction Acts. I should not have thought that it would be so very difficult to put them back again.

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  But the main criticisms of the Bill remain. The right hon. and learned Gentleman, in moving the Second Reading, said that it would be fortuitous who is protected by the Bill. It is one thing to protect the kind of tenant to whom I have been referring—the man who has occupied a house or a shop for a long time; it is another thing to extend the provisions of this Measure to all and sundry—to the five categories specified by my hon. and learned Friend the Member for Wirral. I think that he has summed it up very well, except that he put the lawyers in the wrong place. [An HON. MEMBER: "Where did he put them?"] Last. I think that ultimately he moved them into the asylum.
  Why have the Government departed from the recommendations of the majority about this? It was suggested that the protection should be given to those who had been in occupation for three years. That is an arbitrary line, it is true, but we often have arbitary lines. The inclusion of some provision of that kind would eliminate the speculator in fag-ends, the profiteer and the obstructor to progress. For that reason, I should have thought it desirable. Even in the hon. and learned Member's minority Report, we find it suggested that it would not be unreasonable, although he ultimately decided against it, to include a provision limiting the protection to those who had been in occupation for at least three years.
  Then there is the question of rent. This question has been touched on a good deal. I must say, listening to the right hon. and learned Gentleman, that I could see no valid reasons whatsoever for continuing the existing ground leases for a further two years at the rents fixed 80 or 90 years ago, particularly when we bear in mind that the rent under Part II in relation to shops is to be adjusted, and when we bear in mind that the right hon. and learned Gentleman made it clear that where there is a ground lessor, tenant, and sub-tenant, the tenant will be eliminated and the sub-tenant will go on paying the rent he paid to the tenant, so that the ground lessor in that case will be getting a rack rent. In that case, the ground lessor will be getting an increase in rent. If that be so, what is the justice in differentiating in that way between that
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  ground lessor and the ground lessor, where there is a direct lease and the ground lessee is in occupation?
  Mr. Ungoed-Thomas: The occupation remains the same in each case.
  Mr. Manningham-Buller: He may be paying the same in each case; but that is not correct, as there will be no increase in what the occupying ground lessee is paying. It may mean having tenants in adjoining houses paying entirely different rents, with one paying the rent to the tenant and the other paying rent direct to the ground lessor. It seems to me to be a matter of fairness and justice that, when we are interfering with a contract which has been voluntarily entered into, we should at least in equity provide for the payment of a fair rent to the ground lessor.
  Something has been said about covenants. Clause 4 (1) will obviously have to be much altered. It is quite wrong to think of covenants being merely for the protection of the landlord. I have taken the trouble to get a copy of a draft lease for London, and I should like to read part of it to the House. This is the covenant entered into by a tenant for a long lease of more than 21 years. It states:
  "That the tenant will not do or suffer to be done in or upon the demised premises or any part thereof any act or things which shall or may be or become a nuisance damage or annoyance to the landlords or their tenants or the occupiers on any adjoining or neighbouring property."
  If the Bill is passed in its present form, the landlord will not be able to take any action to protect the neighbours from nuisance. I do not suppose that he will often do so, but because there is the power to do so it often prevents a nuisance from arising. It goes on:
  "Or permit in or upon the demised premises or any part thereof any open shop or offensive noisy or dangerous trade business manufacture or occupation nor use the same nor allow the same to be used for any immoral or illegal purpose."
  Mr. Champion: Hear, hear.
  Mr. Manningham-Buller: I am glad that the hon. Member is at least with me in that. These are typical covenants, and steps must be taken to assure that they can be observed. We shall have to go into Clause 4 (1) in great detail.

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  I only want to say this one word about the shop provisions. It is true that they are temporary. I do not know that there is so much demand now for them, but I would say this as a general observation; that I am sure it is true that it is to the landlord's interest to retain a good tenant. It is worth keeping a good tenant, because if you lose him he may be replaced by a bad one.
  We regard the Bill as a most disappointing Measure. It is a bad and unsatisfactory Bill. It freezes the situation, and it fails to tackle the injustices. It will create a multiplicity of anomalies of all kinds. The only justification for it is that it is a temporary Measure, due to the appalling failure of the Government's housing programme and rebuilding. There is a need for reform of the law about landlord and tenant, particularly with regard to repairs and dilapidations, but that is not tackled here. In the hope that we can do good work on this Bill in Committee, we shall not oppose the Second Reading.
  9.30 p.m.
  The Solicitor-General (Sir Frank Soskice): I should like at the outset of my observations to join in the congratulations on the appearance of the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) on the front bench opposite. He acquitted himself extremely ably in the speech that he made. I wish I were able to congratulate the hon. and learned Gentleman the Member for Northants, South (Mr. Manningham-Buller), but the only thing upon which I can congratulate him is that he did not say he was going to be entirely non-controversial. He made use of a good deal of the time allotted to him in making what seemed to be rather extravagant and ill-thought-out statements. Having made them and spent a lot of time in doing so, he crushed into a few minutes at the end of his speech those criticisms which I think he intended to voice about the Bill when he began to speak.
  Some of the things he said seemed a little bit hard to take seriously. He said we had to make up our minds whether we believed in the sanctity of contracts or not. [HON. MEMBERS: "Hear, hear."] Hon. Members say "Hear, hear," but just conceive the case of a lease granted in
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  1851 at a few pounds a year, which had devolved down from generation to generation until now, in 1950, the assignee, a descendant of the family to which the lease was first granted, is in occupation. The lease comes to an end, and he, having thought—as do many people in this country—that the premises were to all intents and purposes his own, finds himself faced with the prospect of eviction unless this interim Bill is passed. To give him two years' extra protection is said to indicate an attitude of contempt by the Government for the sanctity of contracts. It is a little extravagant to talk in these terms unless the hon. and learned Gentleman does not want to assist the House in considering this Measure, but wants to make a little rather cheap propaganda for his own party.
  He said that we had to make up our minds whether we approve or disapprove of leasehold interests. That remark seemed to be on a par with his previous ones. It was a Conservative Government, unless my memory serves me wrongly, which sponsored the Moneylenders' Act in 1927, It was also a Conservative Government which brought in the Landlord and Tenant Act which was passed in 1927. Both those Acts interferred most drastically, very effectively and greatly to the public benefit in contracts entered into freely between borrower and lender in the one case and tenant and landlord in the other. They were attempts to afford some modicum of protection to the public, and were Measures passed by the Conservative Government to which I have already referred.
  Mr. Manningham-Buller: Could the right hon. and learned Gentleman give us the evidence which shows the numbers of people who honestly think that their houses are their own, when for years they have been paying rent on them?
  The Solicitor-General: I can very easily do so. If the hon. and learned Gentleman has not received heaps of letters from people who honestly think that these houses are their own, I can only suggest that he should consult with large numbers of his colleagues in this House who certainly, over and over again, have received such letters. I should have thought that that was almost a matter of commonplace, especially where a family have been leaseholders under a 99

  481
  years' lease for a period which extends many generations back.
  Mr. Drayson: Would the Solicitor-General say whether the real point is not that these people think that these houses are their own, but that at the end of the term they should have the opportunity of buying them?
  The Solicitor-General: That just is not the case. People who occupy houses which have come down to them through the various generations of their families for practically 100 years find it difficult to conceive that these houses do not to all intents and purposes belong to them. It is a great shock to them to find that they run the risk of being turned out at the instance of a landlord who happens to be the reversioner at the expiration of the 99 years' lease. It is just that sort of situation which the Government had in mind in framing this Measure.
  I agree that there are cases in which that provision causes hardship to landlords, but one has to consider the generality of cases and to see where the balance of hardship lies. Certainly it lies, in the view of the Government, with the very large number of persons who find themselves confronted with the danger of being turned out from what they regard as their own homes after the lapse of so many years. It is for those reasons that we considered alternative ways of going about this protection, and we thought that it was preferable that tenants should pay what they had heretofore paid and should continue to do so during the two years when the protection is afforded.
  It is very difficult to see on what alternative basis we could have proceeded. It has been suggested that the right way was to bring the leases within the protection of the Rent Acts. The hon. and learned Member for Wirral suggested that, and it has been suggested in other quarters as well. If one did that in this interim Measure, it would necessitate very nearly rewriting the contracts, if we wished to convert these long-term building leases into ordinary occupational rent-controlled leases. One could not do it realistically unless one reconsidered and readjusted the burdens contained in the covenants of the leases so as to make them conform to what would be modern occupational rent-controlled leases.
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  It has been said over and over again that one has to remember that this is purely an interim Measure to preserve the status quo until permanent legislation can be put upon the Statute Book. In this interim Measure it would be inappropriate, the Government feel, to try to reconstruct, in the very elaborate form that would be necessary, the provisions of these ground leases so as to convert them into rent-controlled occupational leases. Even the hon. and learned Member for Wirral accepted that it would be a matter of considerable difficulty. I think he used the expression that the rent payable should be reasonable in the circumstances.
  If we converted these leases as I have said, and converted the ground rent into a reasonable rent, we could do so only by approaching the matter realistically and rewriting the covenants to adjust the burdens evenly between landlords and tenants and in the form in which they would be drawn in rent-controlled occupational leases, at a reasonable, controlled rent. Therefore. after having listened to all the arguments, we feel that that part of the Bill, at any rate, is perfectly right and that the only proper approach to this is to fix upon the existing rent as the rent which should continue to be paid.
  In the concluding moments of his speech, the hon. and learned Gentleman called attention to what he thought was an illogical contrast between Clauses 1 and 5. He said that in the case of Clause 5 one might have a sub-tenant who, as the result of that clause, had to pay a rack rent to the freeholder of the house in which he lived. He said that it was unreasonable that the sub-tenant should have to pay the same rent as he had previously been paying, which amounted to a rack rent, and that the tenant under a building lease should continue to pay the small ground rent for which the lease provided.
  There is nothing illogical or inconsistent at all. In each case the, tenant continues to pay the rent he was heretofore paying. Under Clause 5, the tenant continues to pay the identical rent to the freeholder. Under Clause 1 the tenant continues to pay the rent he has been paying under the terms of the ground lease. There is nothing inconsistent about this, and it certainly does not point to any

  483
  desire on the part of the Government unnecessarily to interfere with the operation of contracts freely entered into.
  The hon. and learned Gentleman and other hon. Members referred to the provision with regard to the non-enforcement of covenants. The hon. and learned Member for Wirral paraded before us the various people whom he thought would be beneficiaries as the result of the clause. May I say at once that in the Committee stage—I say this entirely without giving any form of undertaking—we would desire to reconsider the arguments with regard to some forms of covenant—for example, a covenant against use for immoral purposes, or something of that sort. That is perhaps the sort of covenant which should be excluded from the operation of Clause 4; but we certainly do not think that a covenant to keep the premises in proper repair should be taken out of the scope of the clause.
  If we did that we should really be giving the tenant what would amount to a purely illusory protection. We give him two years, and if we then enable the landlord to re-enter if the tenant does not comply with the covenant to keep the premises in repair, we are taking away with one hand what we are giving with the other, because in nine cases out of 10 the landlord can re-enter because of breach of the covenant to keep the premises in repair. That covenant is certainly one which should remain within the scope of Clause 4, but the kind of covenant relating to use for immoral purposes should not.
  Mr. Molson: I hope that the Solicitor-General will not exclude the possibility of requiring reasonable repairs to be undertaken by the tenant in order to keep the house in a decent condition. The provisions should not be so onerous as completely to destroy the protection, but I hope he is not ruling out the possibility of requiring a place to be kept in a reasonable state of repair.
  The Solicitor-General: I am giving no kind of undertaking whatever in regard to any covenant. I said that we might be prepared to consider excluding the sort of covenant which requires that premises must not be used for some illegal or immoral purpose. I would point out that the operation of Clause 4 is far less onerous on the landlord than has been
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  suggested in the debate. After all, although the landlord cannot re-enter for breach of covenant, he can, when the two years have expired sue for damages for breach of covenant. Not only that, but while the two years are still in course of elapsing he can go to the court, if he wants to do so, and ask for an injunction against use for some purpose contrary to the provisions of the lease. It is not. therefore, as if the landlord is left in any sense unprotected. He can ask for an injunction, and in many cases the remedy by way of injunction is, in fact, the most effective way of preventing any continued breach of the covenant. It may well be, in the particular circumstances, of more use to the landlord than the right of the landlord to re-enter within the last two years of a long lease of 99 years.
  I should like to deal with a point that was made in an article in "The Times to which reference has been made. Clause 2, as the House knows, provides that the tenant, in order to enjoy the benefit of that clause, must be occupying the premises at the same rent. It was suggested that possibly the effect of the First Schedule to the Bill, particularly paragraphs 3 and 4, would be that the tenant, if he paid a premium, could set off that premium against the rent and stay on although he paid the premium. That is a misreading of the Schedule, paragraph 3 of which would not apply to premiums.
  We propose, however, during the Committee stage to make it perfectly clear by way of an Amendment that if a premium has been paid Clause 2 will not be applicable, because, as my right hon. and learned Friend the Attorney-General pointed out, under the terms of the Clause, when a different rent is payable, or when the circumstances are such as to indicate that the parties have accepted that the lease has come to an end, the tenant will not be entitled to the benefit of Clause 2 We therefore propose to make that clear by an Amendment which we will introduce in the Committee for that purpose.
  The hon. and learned Member said that really the Bill would have the most unfortunate effects in that, after all, a tenant who was allowed to remain on for the two years could assign or could occupy only a portion of the premises and sub-let the rest at a substantial profit. That is only partly true. No doubt he can assign the tail end of the lease—the two years

  485
  which he is given—but it is an asset of very doubtful financial value having regard to the fact that the right to claim damages for breach of covenant still exists and could be enforceable against the assignee, as that is a right which runs with the land.
  Therefore, if the tenant, being given the extra two years, sought to try to capitalise that situation by assigning for value the residue of the lease, he would get only very little, if anything, for it if in fact there were a liability to damages for breach of covenant, because the assignee would have to pay those damages. This also is a matter which no doubt can be very profitably discussed during the Committee stage.
  I would, however, issue this warning. If it is suggested that we should in any way change the Bill so as to provide that a tenant, by living in a part of the premises and sub-letting the rest, deprives himself of the protection of Clauses 1 and 2, we would be running into very serious difficulties of definition. Therefore, although without commitment I say that we will think about the question of assignment to see whether any change ought to be made in the Bill to prevent an assignment, we would think it extremely difficult to contemplate a change which would prevent a tenant from living in part of the premises and sub-letting the rest at a profit during the remainder of the two years.
  Clause 5, it has been said, is at first sight of some complication. It really is a good deal simpler than it seems, and deals with the comparatively simple case of a freeholder who has granted a lease for over 21 years at a rent which is less than two-thirds of the rateable value and that lease comes to an end. What the Clause does is to provide that a sub-tenant who is in occupation, either by himself or his family, shall be in those circumstances entitled as against the freeholder to the same rights to which he would have been entitled against the lessee had the lease continued. That is really all that it does. I think that some hon. Members have possibly made rather heavy weather of the Clause which, when looked at more closely, works perfectly satisfactorily.
  Here, again, there is a slight change which I think we might desire to make in order to effect an improvement, as a
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  result of the letter which appeared in "The Times under the signature of Mr. Fischl, and which the hon. and learned Member read out. This letter pointed out a slight defect in the Clause, that is, in the case of the sub-tenant who is not in occupation himself but lets the premises to sub-tenants. We would desire to amend the Clause so as to give those subtenants equal protection, but that could be done by a quite simple Amendment on the Committee stage, and that is an Amendment we would be disposed to make.
  The other matters of principle which have been discussed can be said to be those which centre upon Clause 8, which deals with shops. Several hon. Members thought Clause 8 too restrictive, and felt that it should go further and deal with all sorts of business premises, or at least with professional premises. There are serious difficulties in the way of doing that. As my right hon. and learned Friend explained, we limited the operation of Clause 8 and succeeding Clauses to shops because in the case of shops there is a plain and obvious need. As my right hon. and learned Friend pointed out, goodwill attaches to shops, and therefore it is urgently necessary, whatever other protection is afforded by the Bill, that shops should receive the protection which Clauses 8 to 10 give them.
  The difficulty about adopting too wide a definition is that if one adopts a definition which includes factories and workshops and things of that kind, the repercussions throughout the industrial world may be considerable, and it would be rather difficult to see precisely what the results of a very drastic Clause of that kind might be. It would be extremely difficult as a matter of definition to go half way and try to bring in professional premises whilst excluding business premises in the larger sense. But there again, if any hon. Members are able on the Committee stage to suggest some form of wording which might get over the difficulty of definition, certainly the Government—and again I can give no kind of commitment about this—would be interested to see the proposed form of words and give them consideration. But that again, although it is a matter of principle, is a matter which could with great advantage be gone into further on the Committee stage of the Bill.

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  There were criticisms of Clause 10, and it was suggested that the Clause would not really operate satisfactorily because it would allow too great a lack of uniformity in decisions throughout the country. It was suggested that there should be some test or guide of a more reliable character provided in the terms of the Clause for the learned county court judges who would have to administer it and that in its present form it imposes a heavy burden on them. I would say in regard to that matter that the Scottish Act, which as the House knows is very much in the same form as the Measure the House is considering, does not contain any very precise guiding criteria in its relevant sections, but no difficulty has been experienced in the administration of that Act.
  That Act is very similar in form to this Measure and, inasmuch as there has been no particular difficulty in the administration of that Act, it is felt that probably in this interim Measure it would be better to leave to the judge the duty to decide in the language which at present is in the Clause, rather than to attempt to introduce precise criteria which, I suppose, would mean calling a great deal of expert evidence to try to determine on which side of a test a particular case came, and which would in consequence almost certainly introduce a great deal of complication which in the circumstances might appear to be quite unnecessary. After all, the learned judge in each case would be dealing only with a lease of one year's length and it would be a great pity, particularly as the Scottish Act has worked perfectly easily, to overload this new Measure, which is an interim Measure, with a great deal of burdensome elaboration which is unnecessary. Our present view is that we should leave the Clause in its present form.
  There is one other matter with which I should like to deal, namely, the question of appeals. That arises under Clause 13. Some Members felt that an appeal should be possible from the decision of the county court judge in a case that comes before him. There are a number of objections to that suggestion, one being that in these cases, if an appeal were desirable at all, it would nearly always be an appeal on a question of fact. Not many questions of law would be likely to arise when there was a dispute or when the parties felt
  488
  dissatisfied with the finding of the county court judge; it would generally be that they disagreed with a view of fact which he had taken.
  Mr. Manningham-Buller: Would it not often be a disagreement with an order made by the judge in fixing the covenant or in saying that a particular covenant was unnecessary?
  The Solicitor-General: That would be an appeal against the order, and there would no doubt be cases of that sort. But, in endeavouring to look forward, and conjecturing the kind of case that would arise, we think, having considered the matter, the probability is that in most cases the appeal would be because the parties disagreed with the view of fact which the county court judge took. The hon. and learned Gentleman knows very well that an appeal to the Court of Appeal would be on law only; therefore, it would, generally speaking, be ineffective for the purpose for which an appeal was desired.
  It seems to us that the more basic objection is that one is, as I have said, considering only a yearly lease. Supposing the tenant were refused a lease, it would be impracticable to expect him to vacate the shop premises while the appeal was pending inasmuch as the appeal quite naturally takes a little time to hear, particularly if there is to be an appeal to the House of Lords. I do not know whether that is desired or not. In such a case the period of the lease in question would to a certain extent, and possibly to a large extent, have elapsed before the appeal had been disposed of.
  Under the provisions of Section 111 of the County Courts Act, 1934, there is already machinery available for removing the case from the county court to the High Court if matters of importance are involved, so that if the parties so desire it would be perfectly possible ordinarily to secure that the case was heard in the High Court instead of in the county court. What is really desirable is that there should not be two hearings in a matter of this sort. As the law now stands, there can be either a hearing in the county court or, if important issues are involved, in the High Court.
  Those appear to me to be the points of principle that have been canvassed in the debate. As my right hon. and

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  learned Friend said, it cannot be too much emphasised that this is a purely interim Measure. It would be wrong to consider this as a permanent Measure, and to consider its contents with that degree of examination. In those circumstances, I commend the Measure to the House.
  Question put, and agreed to.
  Bill read a Second time.
  Committed to a Committee of the whole House.—[Mr. Sparks.]
  Committee upon Monday next.

  LOCAL GOVERNMENT (SCOTLAND) [MONEY]
  Resolution reported:
  "That, for the purposes of any Act of the present Session to make provision for increasing the amount which may not be exceeded by town councils in Scotland in respect of certain expenditure; for raising the limit on special district rates leviable by county councils in Scotland, and to restrict the power of county councils and town councils in Scotland to borrow money for certain purposes, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the Exchequer Equalisation Grant payable under Part II of the Local Government Act, 1948, which is attributable to increased expenditure by a town or a county council in pursuance of the said Act of the present Session."
  Resolution agreed to.
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Sparks.]

TROOPS, KOREA (CHRISTMAS PARCELS)
9.59 p.m.
Mr. Speaker: I shall call on the Postmaster-General to make a statement which, according to my information I understand it is on the "tape"—is a concession. I take full responsibility for doing so. The Postmaster-General came to me at eight o'clock and asked if he might have the debate interrupted so that he might make a statement. That would have been an innovation, a bad precedent. Then he said that he was afraid hon. Members would object because they had not been told first. I said that I would take full responsibility, and that I thought that Members would not be so ungenerous, seeing that the parcels have to be posted, I think by the 11th, or at all
490
events very soon, and that we would wish to give the fullest possible notice to everyone who wishes to send parcels to our soldiers in Korea.
It being Ten o'Clock, the Motion for the Adjournment of the House lapsed. without Question put.
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Sparks.]
10.1 p.m.
The Postmaster-General (Mr. Ness Edwards): I am extremely grateful to you, Mr. Speaker, for giving me permission to make this statement. As promised in the House this afternoon, I have had further consultations with my colleagues about the question of Christmas mail for Korea. I think it right to inform the House that I have issued to the Press and the B.B.C. this evening an announcement that one postage free Christmas parcel up to 3 lb. in weight will be accepted for each member of the Forces in Korea up to 11th December, and that every effort will be made, subject to operational conditions, to effect delivery in time for Christmas. As an extension of this concession those who cannot have their parcels ready for 11th December may post up to 14th December, although no expectation can be held out that delivery will be possible by Christmas Day for these later postings.
Miss Burton: I wish to thank my right hon. Friend for this action, and to tell him with how much appreciation this gesture will be received not only by Members in all parts of the House but by all those with relatives serving in Korea.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Hon. Members will appreciate that this is taking part of the half-hour devoted to the debate to be initiated by the noble Lord the Member for Edinburgh, Pentlands (Lord John Hope). I think that an opportunity for further questions will arise later. There will be a statement on Korea tomorrow, and I think it will be in order to mention this matter then.
Mr. Eden: I should like to take just a few seconds to thank the Minister and to congratulate the hon. Member for Coventry, South (Miss Burton), to whom we owe this concession. Will the Government bear in

491
mind that they were going to consider Malaya? I do not ask them to say anything about that now, but will they bear it in mind for a later statement?
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Hon. Members will realise that they are taking up the time allotted to the noble Lord.
Captain Duncan: I should like to ask one question of the Postmaster-General. In view of his statement, how will the parents or friends of Service men abroad know that those Service men are in Korea or serving in Korean waters?
Mr. Ness Edwards: As far as the Army is concerned, I think it is fairly simple. With the Navy there are some difficulties. We shall get over these by issuing a special announcement so that people will see what steps they should take. With regard to the Air Force, I understand that there is no difficulty at all. We will do our best to get the matter settled.

RUSSIAN PROPAGANDA
10.4 p.m.
Lord John Hope: I am obliged to the Under-Secretary of State for Foreign Affairs for coming to the House tonight. He did not have very much notice that I wished to raise this subject, but as you know, Mr. Speaker, that was not my fault. The subject was changed because it was no longer necessary to raise the original subject on which I balloted for the Adjournment as the Government gave way on every single point about which I had asked them.
Some of us have felt for some time—certainly I have felt it very strongly—that foreign policy has been pursued and publicised by the Government in an ad hoc fashion, with little apparent recognition of the pattern to which our enemies have been working and with little effort, therefore, to work for the inevitable pattern on our part which alone can ensure our survival. Therefore, it is not surprising that the public does not know exactly what is going on and, more important than that, why it is going on.
492
The Government have never explained, but have always hedged when it has come down to a question of what exactly the enemies of the free world are doing. The Government had a great chance in the debate on foreign affairs last week to explain to the people just what this Communist master plan consists of, and to put the events as they occurred in the correct setting of that background. They failed to do that and I think it was a great pity, because, after all, however much back benchers may make up for the Government's deficiencies, it is never the same thing in terms of publicity, and that means so very much.
For instance, I wonder how many of the people of this country know that Stalin has quite openly said—and, in so doing, has followed Lenin, who said it equally openly—that war between the Communist ideology and the capitalist society is inevitable. Stalin talks about the war with the capitalist countries which is inevitable—
"but which may be delayed either until proletarian revolution ripens in Europe or until the Colonial revolution come fully to a head, or, finally, the capitalists fight among themselves over the division of the Colonies."
Mr. Frederick Elwyn Jones: What is the date of that?
Lord John Hope: 1925.
Mr. Elwyn Jones: But has not Stalin since then said that they can live together?
Lord John Hope: I will complete the quotation for the benefit of the hon. Gentleman. Stalin said:
"Therefore, the maintenance of peaceful relations with capitalist countries is an obligatory task for us. The basis of our relations with capitalist countries consists in admitting the co-existence of two opposed systems."
That is simply a cynical warning to his own followers on the tactical necessity of maintaining peace until it is time for this inevitable war to come off. I do not mean to say that I think that war is inevitable. All I am saying is that it is no good trying to pretend that the Russians and their system have not looked upon it as such.
I wonder how many of the people of this country read the words of my noble Friend the Member for Lanark (Lord Dunglass) in the debate last week, in which he quoted the words of a leading

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French Communist leader, M. WaldeckRochet, who said at Limoges:
"You will say, 'Why does not the Soviet Union intervene in Korea?' It is certain that if she did the war would soon be over and the Americans thrown into the sea. That is true, but it would start a world war, which, for the time being, is contrary to the peace policy of the Soviet Union."—[OFFICIAL REPORT, 29th November, 1950; Vol. 481, c. 1272–3.]
All these things ought to have been told to the people by the Government a very long time ago, but they have never yet said a word about this Communist key plan, and what I am asking the Government to do is to initiate a campaign of information.
Like other hon. Members on both sides of the House, I spent a certain amount of time during the war on the General Staff, and I know that, if you have to ask people to undergo privations, discomfort and unpleasantness you will not get them to be prepared to do so unless you tell them exactly and precisely why, and that is what the Government have not yet done. If they do not do it now, then, in my opinion, more and more decent people in this country—but ignorant people, because they have never been told the facts—will begin to lose their nerve and fall into the Russian trap of peace at any price.
I want to bring to the attention of the House an example of what I believe is Government softness towards Russian propaganda at its worst. The Under-Secretary has had notice that I was going to bring up this point. I refer to the pamphlet issued under the aegis of the Soviet Embassy called "American Armed Intervention in Korea." It was the subject of a Question a few days ago. Before I go into that side of it, I want to remind the House that this pamphlet of 28 pages, well printed, was sold at 1d. and that that, in itself, makes it quite clear that it was being subsidised by someone. It is circulated by the Soviet Information Bureau. It is surely clear from the title of that pamphlet—"American Armed Intervention in Korea"—that its circulation by a foreign Embassy in this country must be a breach of diplomatic privilege. The Under-Secretary was asked about this specific point during Question Time the other day, and he went so far as to say:
"My right hon. Friend has no legal power to interfere in such publications. Of course, we consider that there is a limit to which
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diplomatic privilege can be extended, and we consider that it should be observed in such cases."—[OFFICIAL REPORT, 27th November, 1950; Vol. 481, c. 788–9.]
Will he tell us tonight—because he did not on that occasion—whether he considers that that limit was passed by the publication of this pamphlet, and, if so, what action he proposes to take? If he does not think that limit was passed, will he say what exactly was the point of his remark on that occasion?
There is another publication to which I wish to draw the Minister's attention. It is called "The New Central European Observer." That piece of Communist propaganda is subsidised, I understand, by the Czech Government, and we allow it to be circulated at will in this country. I am fully aware of the strength of the argument that in a free democracy the more stuff of this kind that the people are allowed to see the quicker they are likely to be disillusioned about its contents.
I think that is a strong argument, but, in this case, I suggest to the hon. Gentleman that to allow a Government—I mean the Czech Government—which refused to allow the British Council to continue its extremely good activities in Czechoslovakia and which refused to allow our Foreign Office Information Service to continue its services in that country, to publish Communist and, therefore, anti-British propaganda in this country, is really going too far. I would suggest to the hon. Gentleman that even if we have no other weapons, we could at least use the weapon of retaliation in this and other similar cases to persuade those who are so keen to circulate nonsense of this sort in this country to allow us to circulate what they consider is our nonsense in their country. If that were done, I know who would win.
I also want to ask the hon. Gentleman about the East, and I propose to ask him that only very shortly because I want to give him plenty of time in which to reply. We have, I understand, a broadcasting station for counter-propaganda in Hong Kong. I am informed that that station is so powerless in terms of strength as to be virtually useless. I want to know whether that is so, and, if it is, what the Government are doing about it. Is there any alternative source or potential alternative source of broad-

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cast propaganda in the Far East through which we can broadcast our message, particularly to the Chinese people?
I also want to ask the hon. Gentleman whether there is any tie up with the Americans over the question of broadcasting counter-propaganda against the Communist lies.
Mr. Orbach: We do not want any of their advertising.
Lord John Hope: I think the hon. Gentleman's intervention does no service whatever to the cause of anti-Communist propaganda. I thought that, apart from one or two, we were all against that sort of thing, but it would appear that I shall have to amend that point of view with regard to the hon. Gentleman.
I would suggest to the Government that they should inaugurate a carefully planned and co-ordinated campaign to inform the people of this country just what is at the back of Russian diplomacy in all its aspects at the present time. They have never done it, but I hope that they will.
Secondly, I suggest that they must make an extra effort to increase the amount of newsprint in this country because, short of the B.B.C. which is doing excellent work in its way, the public must rely upon the Press. The Press, in its present emaciated state, cannot possibly give enough space to a general survey of how this Communist plan is built up and the steps taken by the free world to overcome it. I was impressed by a remark made in that excellent booklet "Defence in the Cold War" brought out by Chatham House. Its writers told us how impressed they were by evidence from many people that they had to go to the American Press for actual objective information as to what is happening throughout the world, because they cannot get it from the British Press.
There is no question of panic in this country. There never has been and there never will be, but, at the same time, the situation is gravely urgent. I do not think that any hon. Member would deny that. Tell the people the facts and trust them to see the job through.
Mr. Nally: I would not have intervened at all except for one comment
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by the noble Lord the Member for Edinburgh, Pentlands (Lord John Hope) which, if I may say so, marred a speech with which I found myself in a good deal of agreement. That was his introduction of the point about newsprint. It is really sheer hypocrisy to pretend that the policy of the broad, popular British national Press, or its lack of policy, in exposing the range of the great Stalinist conspiracy, is governed by the newsprint allowance.
If the noble Lord were to take last Sunday's newspapers and take a rule measure to find out how many columns were devoted to "sexy" serials, to football pool advertisements, and to crime and sex in their manifold aspects, he would find that those made up the bulk of the popular national British Press. I make no complaint about this, but simply state it as a matter of fact. To introduce into a matter of this kind the caricature that His Majesty's Government, by withholding newsprint, are preventing the Press Lords from flooding their columns with information about the conspiracy we face, is quite silly and handicaps the noble Lord's case. There is nothing to prevent the Sunday newspapers next Sunday from abandoning the "sexy" serials and football pool advertisements and printing this information.
Lord John Hope: The hon. Member knows quite well that if a newspaper has four or five pages only and devotes most of them to Stalinism rather than to sex, it will not sell a copy. Give the newspapers 30 pages and then one gets just the right dose of each.
Mr. Nally: If I interpret the noble Lord rightly, what he means is that photographs of semi-clothed chorus girls are an essential part of a newspaper's technique in keeping people interested in the Communist plot.
Lord John Hope: I was not thinking only of the "Sunday Pictorial."
10.20 p.m.
The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies): In spite of the kindness of the noble Lord the Member for Edinburgh, Pentlands (Lord John Hope), in informing me of some of the points he was going to raise, I must confess that I am not altogether clear about what is his complaint. As he well knows, we are completely aware of

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the nature of Soviet propaganda and we consider that through our information services we do all we can to counteract it. I must confess that I am not altogether clear what exactly he thinks we ought to do that we are not already doing in connection with the propaganda which comes from the other side of the Iron Curtain. He referred to this pamphlet on American intervention in Korea, about which there were certain Questions in this House. If he wants people in this country to be aware of what Soviet propaganda is, surely it would be a mistake for us to prevent any Soviet propaganda from being distributed in this country.
We take a very definite line on this matter. We take the attitude that if we take action to prevent the circulation and dissemination of propaganda, through the Soviet Embassy, the "Soviet News" and the other methods which are available for the propagation of Communist propaganda in this country, then quite clearly the country will not be aware of the propaganda which they are carrying out. The point is that it is far better for the people of this country to be aware of the Soviet line and to be aware of what they are trying to get across to our people. We have sufficient faith in the intelligent democracy of this country where people are able to judge for themselves whether what are put across as the facts by the Communist propagandists are facts or not. In other words, we consider that the democracy of this country is able to judge for itself what is truth and what is not.
We think that far more harm would be done if at this time we took any action to prevent the dissemination of propaganda by the Soviet Union and their satellites and to prevent the circulation of the pamphlet to which the noble Lord referred. The noble Lord referred to the reply I gave to an hon. Member opposite about this pamphlet, in which I stated that there was a limit to the lengths to which it was possible to go. I consider it is for the foreign embassy concerned to decide what is that limit; it is up to them to decide how far they should go, and we do not want to be driven to take any action. I cannot say that at the present time we see any justification for taking any action whatsoever.
The noble Lord referred to one or two matters on which he wished me to reply. There is, for instance, the question of the
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"New Central European Observer." He may recall that some time ago there were Questions in this House concerning this publication, and that in reply to those Questions we said that we were considering what action could be taken. I am sure he will be gratified to know that, following that reply, action was taken and that, as a result of the intimation we gave to the Czechoslovak Embassy, the publishing offices of the paper were removed from the premises which had diplomatic immunity to other premises, which is precisely what we expected would occur if we took any action against them.
In other words, as long as we have freedom of the Press in this country, as we have, if we suggest to any embassy that they should cease activities in the propaganda field, it is within their competence to see that commercial firms carry on the publication of such papers or periodicals. That is precisely what has happened in the case of the "New Central European Observer." We have no power to close down any papers which are operated under British law and by British citizens. I do not think hon. Members would desire us to take power to close down periodicals in this country. We prefer to maintain the freedom of the Press and to allow people to publish and disseminate whatever views they wish to publish or disseminate rather than to take action in imitation of totalitarian countries.
The noble Lord also raised the question of the Hong Kong broadcasting station. He appeared to be disappointed that this station did not have a wider range. I should like to point out to him that it was never intended that the Hong Kong station should have a range wider than that necessary to serve the area of Hong Kong itself. It does serve that area, but it is not regarded as one of the stations serving the whole of the Far East.
There are other stations in the area—in Ceylon and in Singapore—which are broadcasting and, as I said in reply to a Question put to me today, are serving the whole of the Far East. The Hong Kong station is purely a local station and there is no reason why the hon. Member should show concern about it. It is serving the purpose which it is intended to serve. We are satisfied that there are adequate facilities at present, or that other

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facilities will be provided—and they are now being prepared—for covering the whole of the area.
We are conscious all the time of the propaganda being sent out by the Soviet Union and its satellite countries. There is a system whereby all the broadcasts and all the published material of those countries is analysed and assessed by the appropriate Government Department. I think the noble Lord is aware of the B.B.C. monitoring service, which listens to all broadcasts in all languages from the Soviet Union and its satellite countries and which prepares a report which is published daily, which is circulated to Government Departments and which is also available in the Library of the House. From it any hon. Member who wishes to do so can ascertain what is the propaganda line of the Soviet Union and its allied countries. I do not see, therefore, what the complaint is, if there is a complaint.
Major Legge-Bourke: Quis custodiet—?
Mr. Davies: We consider that it is quite possible today for anybody to know what is the propaganda line of the Soviet Union. After all, the "Daily Worker"
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is still published in this country and any body who wants to know their attitude can read the "Daily Worker." They can read the "Soviet News," which is published from the Soviet Embassy, and other Soviet Government publications in this country, and there is no difficulty whatsoever in ascertaining what is their line. With these and other sources available the Government are well able to ascertain what the line is and to take counter propaganda measures, if they are considered desirable.
Hon. Members opposite sometimes attack us for the expenditure which we incur on the overseas information services. The expenditure we incur on the overseas information services and propaganda is an essential factor in counteracting this foreign propaganda. Next time the hon. Member or his colleagues suggest that that expenditure is excessive, I hope he will refer back to his speech tonight and remember that, on this occasion, he said we are not taking adequate measures to counteract the propaganda which comes from the Soviet Union and her satellite countries.
Question put, and agreed to.
Adjourned accordingly at Twenty-nine Minutes past Ten o'Clock.

  JAPANESE STERLING LOANS
  JAPANESE STERLING LOANS
  TUNISIA (BRITISH CLAIMS)
  TUNISIA (BRITISH CLAIMS)
  INDONESIAN FOREIGN MINISTER (VISIT)
  INDONESIAN FOREIGN MINISTER (VISIT)
KENYA
  Schools (Beecher Report)
  Schools (Beecher Report)
  African Affairs (Report)
  African Affairs (Report)
  AFRICAN TRANSPORT CONFERENCE
  AFRICAN TRANSPORT CONFERENCE
  MAURITIUS RAILWAY
  MAURITIUS RAILWAY
  NIGERIA (PRISONERS)
  NIGERIA (PRISONERS)
  SEYCHELLES (IMMIGRANTS)
  SEYCHELLES (IMMIGRANTS)
  SINGAPORE (POLICE DISMISSALS)
  SINGAPORE (POLICE DISMISSALS)
  GOLD COAST (MINISTERS' EMOLUMENTS)
  GOLD COAST (MINISTERS' EMOLUMENTS)
  WEST INDIES (CLOSER ASSOCIATION)
  WEST INDIES (CLOSER ASSOCIATION)
GIBRALTAR
  Government Lottery (Receipts)
  Government Lottery (Receipts)
  Trades Tax Ordinance
  Trades Tax Ordinance
FOOD SUPPLIES
  Vegetable Prices, Scotland
  Vegetable Prices, Scotland
  Eggs
  Eggs
ROYAL NAVY
  Motor Torpedo Boats
  Motor Torpedo Boats
  Ratings (Release)
  Ratings (Release)
  Publication "Annual Fleets"
  Publication "Annual Fleets"
  Ships (Transfer Abroad)
  Ships (Transfer Abroad)
  Coastal Craft (Strength)
  Coastal Craft (Strength)
  Aircraft Carriers
  Aircraft Carriers
  Destroyers (Conversion)
  Destroyers (Conversion)
BROADCASTING
  Weather Forecasts
  Weather Forecasts
  Foreign Interference
  Foreign Interference
TELEPHONE SERVICE
  Merton and Morden
  Merton and Morden
  Kiosks, Newport
  Kiosks, Newport
  Applications, Blackpool
  Applications, Blackpool
  Supervisors
  Supervisors
  TELEVISION (INTERFERENCE SUPPRESSORS)
  TELEVISION (INTERFERENCE SUPPRESSORS)
POST OFFICE
  Stamps (Slot Machines)
  Stamps (Slot Machines)
  Vans (Delays, London)
  Vans (Delays, London)
ROYAL AIR FORCE
  Reserve Pilots (Age Limit)
  Reserve Pilots (Age Limit)
  Aliens (Enlistment)
  Aliens (Enlistment)
  OMNIBUS STATIONS (PUBLIC CONVENIENCES)
  OMNIBUS STATIONS (PUBLIC CONVENIENCES)
  STROMNESS HARBOUR
  STROMNESS HARBOUR
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
His Royal Highness the Duke of Gloucester—Singly took the Oath.

AIR CHARTER SERVICES
2.35 p.m.
VISCOUNT SWINTON VISCOUNT SWINTON rose to call attention to the policy of the Minister of Civil Aviation with regard to independent air operators and charter companies; and to move for Papers. The noble Viscount said: My Lords, in order to appreciate the situation in which the independent operators find themselves to-day, I feel it is necessary to review the changes in Government policy since the Civil Aviation Act was introduced. When the noble Lord, Lord Winster, introduced that Bill in this House, he held out fair hopes to the charter companies. He said that the Corporations' main function would be carrying out the scheduled services; that far from there being any hostility, there was every wish to encourage charter operators in their bona-fide sphere of work. When the noble Lord was pressed by my noble friend, Lord Balfour of Inchrye, he elaborated that and said that the Corporations should not be excluded from encouraging any charter work, because—and these are the noble Lord's own words—
"there may be a demand for charters outside the powers of the charter firms to supply."
The noble Lord went on to add something which I thought was most interesting. He said:
"It will enable interesting comparisons to be made between services run by the public Corporations and services run by private enterprise."
He thus gave us just that yardstick of comparison we so badly need in all the nationalised industries. I must say, looking back over the five years that have passed, that I regret that the noble Lord, Lord Winster, was not left to carry out his promises. In due course he was succeeded by the noble Lord, Lord Nathan. I do not think I have any criticism to
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make of Lord Nathan on this subject, because I cannot find that he really did anything very much at all: in the best Gilbert tradition, he did nothing much, but I have no doubt that "he did it very well." In the meantime, under that benevolent neutrality, the independent operators developed their charter business. They also went on and provided services for the public which the Corporations were either unable or unwilling to undertake.
Then there came the noble Lord, Lord Pakenham, a more orthodox and sterner Socialist. I have heard it said—and certainly I believe Lord Pakenham bears it out—that political converts often incline to prove their orthodoxy by a measure of intolerance. Certainly in nationalised undertakings the appetite grows with eating. I will come in a moment or so to the interference of the Ministry of Civil Aviation, and their children, the Corporations, with the pure charter business which Lord Winster had promised for the independent operators. But the first thing that shocked the noble Lord, Lord Pakenham, was that the charter companies, at their own risk and with no cost to the taxpayer, were providing services which the public needed and which the Corporations, in spite of their vast subsidies, were unable to undertake. This appeared to be very shocking and heretical to the noble Lord, Lord Pakenham, and he was determined to stop it. So we had the famous directive of January, 1949-that one might almost call the "Pakenham Bull "—my metaphor is theological. Ne quis contendat—"Lest anyone should attempt to compete." That put a pretty damning ban upon competition.
The salient clauses of the Bull were the Government policy that scheduled British Air Services to and from the United Kingdom and internally shall normally be undertaken by British Corporations. As interim policy, in certain cases Corporations should appoint independent operators as associates to help them perform their functions. No subsidies would be granted. Another clause was that fares and freight rates on routes operated by the Corporations, or that might be held to compete with such routes, and the contention of what might be held to compete in the eyes of the Corporations tends to widen, should not be less than those charged by the Corporations, except in

769
agreement with them. Another clause was that the period of an associate agreement should not normally exceed two years. Then it was provided that associate arrangements should in general be in respect of the following types of service: internal ferry and cross-country services, and internal seasonal services. The final comprehensive clause was that those conditions might be varied by the Minister from time to time.
Your Lordships may remember that as soon as possible I voiced my criticisms and fears as to the consequences of this edict. In the first place, I suggested that the Air Transport Advisory Committee, to whom applications were to be made, is only advisory. The Minister, as is always the case with these nationalised industries, was to remain judge in his own cause. Then I asked: Why should these charter services not operate outside the United Kingdom if the Corporations cannot give adequate service? We then—or very soon afterwards—had the shocking case of the refusal to allow the Nigerian char-ter service. There, as your Lordships will remember, the Nigerian Government, under the noble Lord, Lord Milverton, who was then the Governor, wished to have an adequate service to their great Colony, without any cost to either their taxpayers or ours. The nationalised Corporations being unable or unwilling to undertake the service, the Nigerian Government arranged with a charter company to run a satisfactory regular charter service, with suitable aircraft, across the Sahara in twenty-four hours to Kano. And that service involved no sort of cost to the taxpayers of either country. That service, however, was forbidden; it was regarded as heretical. One of these Corporations—B.O.A.C, I suppose—put on unsuitable aircraft to do the job. It was stated at the time—and it was not challenged—that every one of their flights cost the taxpayer £10,000.
Why do the charter companies have to be associates? Why cannot they operate on their own? At one time I understood the difficulty. They were charged some-thing for the privilege of association. At first—and again this point was never challenged when I raised it—they were charged a "rake-off" of 10 per cent. Under protest that was reduced to 5 per cent., and was finally abolished. But, as I said at the time, what would be said
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of a private business which, rendering no service whatever, imposed upon some rival firm, with Government connivance, a "rake-off" or an unearned increment of 10 per cent.? That has gone now, however.
Then I asked, if the charter companies can render services which the Corporation do not render, why should not these extend to freight as well as to passenger services? The question was asked by many of your Lordships: What is the justification for inserting in the conditions a clause that the charter companies are never to charge lower freights or fares than the nationalised Corporations charge? And remember, my Lords, they have no subsidy. They have to operate at their own risk. If they can make money whilst charging a lower fare than the subsidised nationalised Corporations, why on earth should they not do so? We have heard a good deal about iniquitous price rings. This is the most drastic and the most iniquitous price ring that I have yet come across.
I went on to say that two years as the period of an associate agreement was quite inadequate. The period should at least be enough, say five years, to enable a charter company to write off the life of an aircraft. It seemed to me, and I think to many of your Lordships, that those limitations with which the grudging permission to operate was hedged around were very unjust to the charter companies. I said at the time that it might well be that charter companies, at their own risk—for they were to get no subsidy—would develop a route which the Corporations had not thought worth undertaking, but which might prove successful, after some initial loss. In the early stages it would no doubt be developed at a loss. Then I said that, if that route proved successful under the Act the nationalised Corporations were entitled to come along and take it over. Your Lordships will see, if you bear with me, that that is exactly what has happened to-day. That seems a new application of the principle of the meek inheriting the earth! I said that no doubt they would leave to the charter companies the ventures which were not successful. That is exactly what has happened; that is "the new freedom." The Minister said that the charter com-

771
panies were very happy with this solution, though he was not encouraging them to come in. I must say I thought that the Minister overrated their contentment: and certainly their happiness has proved very short-lived.
Then we thought that the prospect was getting brighter, because the following year it appeared that the Ministry were taking a fairer attitude and one more in the interests of the general public. On July 6 this year the Parliamentary Secretary said in another place:
"There is another field in which private operators have a part to play, and which my Department have encouraged under the system of associate agreements. There have been various criticisms against these associate agreements and in particular against the period for which the agreements have hitherto been granted.
"Here again the viewpoint of the private companies has been listened to sympathetically, and my noble friend has decided to amend the directive to the Air Transport Advisory Council in one important respect. The general terms of the directive will be the same, but I can say that it will be possible to extend the period of the agreements in suitable cases up to a maximum of five years, which should make it a much more realistic pro-position, especially for those companies which may have to contemplate the purchase of new aircraft."
That looked like a great improvement, but, of course, all would depend on what were going to be regarded as "suitable cases."
Here I think it would be very desirable that the Advisory Council should have absolutely unfettered discretion to decide in the interest of the travelling and the freight-sending public what a suitable case would be. I read a few weeks ago, in a statement to the Press by the Charter Association, that after this announcement the Charter Association—that is, the association of independent operators—had met the Chief Executive of British European Airways and that this Chief Executive had said that he would support the Association's view that future agreements should be for a minimum of five years. But apparently that was not the master's voice. When B.E.A. showed their hand, I gather with the Minister's support, it was seen that the five years would be granted only for the less attractive routes and for those which B.E.A did not think worth while undertaking. The more popular and remunerative routes would
772
not be available to the independent operators although they had operated them, and in a number of cases initiated and developed them, with great success in the past.
These operators had earned the full approval of the Advisory Council. That Council stated in their Report for 1949 that the Minister's decision not to deny to the public the benefit of facilities which charter companies were prepared to provide was thoroughly well justified in the event. But now the routes offered to the charter companies exclude them from holiday resorts like the Channel Islands and the Isle of Man—routes which they have operated admirably in the past. These are to be taken over by B.E.A., and B.E.A. even propose to take over routes which the Government Corpora-tion had discarded but which charter companies had taken up and worked successfully. There is certainly one instance of that—namely, the service from Manchester to London. It would appear —I state this on the published authority of the independent operators—that in a year or two B.E.A. intend to take over something like 80 per cent. of this part of the independent operators' business. Of course, that would put them out of business entirely. They cannot carry on the completely unremunerative 20 per cent. if all the cream is skimmed by the Government Corporation.
What is even more extraordinary is this: that B.E.A. do not possess the air-craft with which to run these routes. They are going to filch them from the independent operators. They are pro-posing to acquire from charter companies aircraft belonging to the charter companies in order that B.E.A. may run these routes, having first of all made it impossible for the charter companies to use the aircraft on those routes. Supposing that were done in private big business—and there is no business so big as the nationalised businesses—what would be said? Of course, I know that the Minister can quite well say, "I am acting strictly in accordance with the letter of the law. Whatever hopes may have been held out to these people, I am"—and I do not deny this—"strictly within the letter of the law in the course of conduct I am pursuing." He is within the letter of the law, but
"the letter killeth, but the spirit giveth life."

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Then I come to what I think is really the gem of the whole collection. Following this the B.E.A. Press Branch issued a manifesto or a "hand-out" to the public, and I cull from it this "gem of purest ray serene":
"A new era has opened to the private operators."
Well, I suppose in one sense it would be true to say that a new era opened for the early Christians when they were introduced to the lions. That seems to be the kind of new era that has been afforded to the independent operators by being introduced to B.E.A. Surely this is very unfair to the charter companies. It is equally damaging to the travelling public.
So much for the services. Not content with this, the Corporations are trying to muscle in on the pure charter work of the operators. This is charter work which Lord Winster said, or implied, the nationalised corporations would do only if there were a demand for charters out-side the powers of the charter companies to meet, There is no possible question that the charter companies can supply those charter services to-day. We know the sorry story of the Nigerian charter to which I have referred, but the story of the Overseas Food Corporation charters is equally illuminating. The matter was fully exposed in another place in December of last year, but perhaps I might recall the salient facts to your Lordships' attention. The Food Corporation entered into a contract with the charter firm of Hunting's for a period of a year. I believe it was entirely satisfactory. Hunting's tendered again, but B.O.A.C., the other national Corporation, wanted the job. Their offer was a good deal more expensive than that of Messrs. Hunting's.
What happened? The Ministry of Civil Aviation or the Food Ministry—I am not sure which; possibly both—dis-closed to B.O.A.C. what were the terms of Hunting's tender. If there is one practice which is quite intolerable and would not be undertaken by any decent business it is, having invited tenders, to disclose to one tenderer the offer of another tenderer in order that the first tenderer may alter his tender in order to get the job. Not only that, but they also refused to let any other firm tender. Another very reputable charter firm, Airwork, wished to tender. We all thought it was going to
774
be a fair field and no favour, and that the best offer would win. Airwork were told that their services would not be required. They were told the same thing again this year when again they offered to tender. B.O.A.C., having had the opportunity of amending their tender, got the contract, and I am informed (the noble Lord, Lord Pakenham, will correct me if I am wrong) that the accepted tender of B.O.A.C. is something like 10 per cent. higher than the Hunting offer. How does all that square with the assurances of the noble Lord, Lord Winster, that the Corporations would come in only where charter companies were unable to fulfil charters? I am sure the noble Lord, Lord Winster, would never have countenanced anything of the kind.
There came to my notice just before this debate another example of unfair com-petition in the charter field. The Air Ministry recently called for tenders for carrying the families of Service men to Egypt. Airwork, an independent operator, quoted a price, using Vikings, of approximately £50 per seat. All or part of that contract has been awarded to B.O.A.C. Although that was quite contrary to the principle laid down by Lord Winster, that the Corporations would not come in if a decent charter company could do the job, my criticism would not be so severe if it were all in a fair fight. Yet your Lordships will be amazed to learn that B.O.A.C. are carrying out this contract with Stratocruisers, American aircraft paid for in dollars. When the question of the purchase of these Stratocruisers was under discussion, we were assured that it was necessary to spend dollars on buying Stratocruisers because they would be used on the Atlantic services to earn more dollars. Now we see them carrying the wives of Service personnel to Egypt.
The operating cost of the Stratocruisers, we know, is high. The Chairman of B.O.A.C. has said that it is £200 an hour. Even that is not the whole story. B.O.A.C. carry Service personnel out in these dollar-purchased Stratocruisers. On the return journey, they advertise for fare-paying passengers back from Egypt.. Your Lordships may say that that is a business proposition. I am not quite sure-whether it is in the terms of I.A.T.A. or not, but, if they can do that, surely in common fairness the independent operators should have the same chance.

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Yet they have not. The independent operator is forbidden by the Minister to take passengers back on the return journey. Does that not mean weighting the dice against the independent operator? Is this really fair competition?
I think I ought to raise this question, for it should be clarified. I am sure the Minister will enlighten us on it. It would appear to me, from such study as I and those who have been helping me are able to make of the Corporation's accounts, that B.O.A.C. are apparently being subsidised to compete with the charter companies. As I read their Report, it shows a profit only on non-scheduled services—that is, on charter work—by charging those charter services nothing for operating overheads. I shall be delighted to be corrected if I have wrongly read the Report. But if it is accepted, and it is not unreasonable to do so, that operating overheads in respect of charter operations are not less than the average for all operations—that is to say, 12.9 pence per capacity ton-mile, according to the B.O.A.C. Report—then a sum of £332,000 should be added to the operating costs of the charter services, making the total operating costs not £507,584, which is the figure given, but £839,584. The total revenue from charter services was £767,856, so that, if I am right in thinking that overheads have not been charged here, then the true balance of the account for charter flying is a loss of nearly £72,000, and not, as shown, a profit of some £250,000. I have tried my best to understand this matter, but I shall be only too pleased to be told that I have misunderstood the Report on this point.
I come now to what to me is the most serious side of this business. To-day, this attack on the independent operators transcends the issues of nationalisation and abrogated assurances. It raises grave defence issues. The charter companies, as your Lordships know, played a great part in the Berlin airlift. They earned the highest tributes from the Chief of the Air Staff and from the air officers in charge of that remarkable enterprise. In May, 1949, when that great enterprise came to an end, independent operators were providing forty-two four-engined transports, against five provided by the Corporations. I am not blaming the Corporations: they were running their regular services, as they
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should be doing. But just look at the service that the independent operators rendered. Where should we have been in the Berlin airlift if we had not had those forty-two four-engined Transports?
Think of the training which that experience provides for any possible emergency. In any emergency, their aircraft and their experienced personnel will be needed. It really is folly, to put it at its lowest, to destroy this valuable and experienced defence reserve. The Air Ministry fully appreciate this. Only last September, in another place, the Under-Secretary of State for Air said this:
"It is recognised that aircraft charter firms will play a valuable part in supplementing Transport Command in war time, and the British Air Charter Association were informed some time ago that their helpful suggestions had been taken into account in the general plans which have been drawn up. The formation of reserve transport squadrons from the resources of charter firms has been decided on in principle, and it is in fact hoped to make a start with the first of these squadrons in the near future."
The Air Ministry are absolutely right. There are many ways in which those charter companies can help us in defence. The varied flying of the charter companies is admirable training. There is no more valuable training for navigators and pilots than this flying all over the place, in all sorts of weathers. Of course, the work of their ground staffs is also admir-able training. What a help that will be to the Air Ministry—or will be if the noble Lord does not stop it—by releasing pilots for the fighting combat squadrons of the Royal Air Force, and releasing this experienced ground staff, of which we have been told, in debate after debate, the Air Ministry are terribly short!
Let me take another example. The charter companies can relieve the Royal Air Force of a great deal of Army co-operation work in the practice which Anti-Aircraft Command requires. They can fly the target 'planes for the anti-aircraft guns and the searchlights. All that can be done by these charter company pilots and navigators. Then there is the ferrying of aircraft. That was done in the last war by the Air Transport Auxil-iary and will, I hope, be increasingly necessary as the output of 'planes, to-day grievously short but I hope gathering momentum, increases. All these aircraft can be ferried by these companies. They could even help the Ministry of Civil Aviation, if it is not too proud to accept

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help, by undertaking the management of smaller airfields which are used only by independent operators and not by the Corporations, and which I believe are very extravagantly managed to-day. They could perfectly well be managed by these independent companies, one of them prob-ably using the airfield, and with one resi-dent overseer from the Ministry to see that everything was properly done. With the millions that we are spending, and our "out-of-pockets" on civil aviation, I should have thought the Ministry would be on the look-out for possible economies.
Then, and perhaps the most important of all, there is the transport of troops and stores by air. I have already mentioned the Berlin airlift. In the Navy, we have the precedent of the Merchant Navy. How invaluable it was, both to the Royal Navy and to the Merchant Navy that the troop-ing was carried out by ships of the Mer-chant Navy! We should never have dreamed of doing anything else. In all the years that I was President of the Board of Trade, arranging trooping contracts, never did the Admiralty suggest that they should be taken away from the Merchant Navy. On the contrary, they always re-garded the Merchant Navy as a tremen-dous resource and ally, in ships and in men, should war come. However, in regard to this airlift of troops and stores, which will increase, are the charter com-panies to be invited to tender, or is it true that the Minister of Civil Aviation wants to seize all this for his own Corporations?
I ask specifically: Are B.E.A. being invited to tender for trooping? If they are, have they the aircraft? If they have the aircraft, why are they carrying aircraft which are surplus to requirements at the taxpayers' expense? Is it a fact that they are trying to get aircraft for this work from the independent operators? If these independent operators are to play the very valuable part they can and should play in defence, in war or emergency, they must have an opportunity to do enough business to carry on, otherwise they will be killed stone dead. Already the number of pilots with valid licences has fallen in three years from 2,493 to 1,616. These operators do not ask for subsidies, as the nationalised Corporations do. They ask only for a fair field and no favour in order that they shall be able to play their vital part in our scanty defences. I am going to ask this final question: Have the Minis-
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ter of Defence and the Chiefs of Staff been consulted on the defence aspect of putting these independent operators out of busi-ness? My Lords, in these grave days when we all desire to he united in getting our defences right, I do beg those in charge of our defences not to let monopo-list prejudice or ideology deprive us of this line of defence. I beg to move for Papers.
3.15 p.m.
THE MINISTER OF CIVIL AVIA-TION (LORD PAKENHAM): My Lords, I believe it is the wish of the noble Vis-count and of the House generally that I should reply now, and perhaps the House will allow me to say a few words by way of further reply at the end of the debate. If that is so, it may be convenient if I do not deal during my present remarks with all the points that the noble Viscount has raised, but leave some of them, at any rate, for a later review. Even so, this is an important occasion, and the House will perhaps bear with me if I detain your Lordships for a considerable time. I am sure we are all grateful to the noble Vis-count for giving us this opportunity for a full-scale discussion of Government policy towards the charter companies. In my view, and I dare say in the view of others (this may be one of the few points on which I can agree with the noble Vis-count), this issue has suffered somewhat in the last few years, from the fact that, when it has been discussed in public, it has been discussed in a piecemeal fashion. It has arisen in connection with some par-ticular contract, or perhaps some mis-understanding. I think nothing but good can come of a wide and candid review and discussion, such as we are having to-day, which gives the Government every opportunity of restating our policy and, if necessary, of clarifying it.
The noble Viscount has stressed—and I know that it is very close to his heart— the need for unity in these times. I can-not feel that his speech to-day has assisted unity on this particular subject. The noble Viscount has been very frank and perfectly open, in a Parliamentary way, and has accused me of intolerance and many other offences, comparing me un-favourably with the noble Lord, Lord Winster. I have no recollection, however, that when he was in office the noble Lord. Lord Winster, found any favour in the noble Viscount's eyes. Perhaps it is only

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too true that we are popular only when we are dead. However, we must earn what favour we can from the noble Vis-count, and from others still more quali-fied to judge of these matters.
My feelings towards the charter com-panies are those of good will. I enter-tain towards them nothing but feelings which are entirely Christian and humane, but I can never forget my responsibilities as a watchdog for the taxpayer. I should greatly dislike to appear churlish, or to appear to say anything which was dis-courteous to the charter companies—or, of course, to the noble Viscount; but really it would be particularly wrong— and I am afraid that events even since I have been in office have underlined this lesson—for me to say fair words which might afterwards be misunderstood, and which might create an impression that I was promising things that I never had any intention of promising. The noble Viscount attempted to belabour me, with all the ability of an old parliamentarian and a skilled speaker, but I think he will forgive me if I say that there was some-thing indescribably "ham" (if I may use a colloquialism which I submit can be used to this House) about some of his attacks. Frankly, the noble Viscount is quite disqualified from launching this sort of attack, although there may be some others present who would be in a position to do so. When one recalls the noble Viscount's own record, it would appear that he is the last person who should appear at all in this House on an occasion of this kind.
I have read the Daily Express for many years, and I have recharged my memory with a quotation from the Daily Express of March 2, 1945. We find there the headline:
"Airline woman challenges air plan."
In the article the airline woman says:
"At a meeting called by Lord Swinton"—
who was then of course the Minister—
"on February 14, an offer was made to the independent operators which amounted to what I consider would be their total extinc-tion."
In the circumstances, in view of his rather peculiar past in this connection, perhaps the noble Viscount will allow me to hope that this war he has launched can be charitably regarded as a "phoney" war.
VISCOUNT SWINTON: Will the noble Lord ask the charter companies to-day whether, from their point of view, they consider my offer to them or the Minister's present conduct is preferable?
LORD PAKENHAM: I am in very close touch with the charter companies.
VISCOUNT SWINTON: So am I.
LORD PAKENHAM: I know that the noble Viscount is in close touch with them, because I have here a delightful picture of the cocktail party given by the Charter Association. Here we find representatives of the charter companies standing by him, with admiration written all over their faces, while the noble Viscount seems to be almost indescribably happy—and, indeed, why not?—in their company. The smile of beatific satisfaction on the noble Viscount's visage is most affecting. In view of his past, I think he has every reason to be glad to be taken back into the fold, with this debate and other events impending. I may perhaps be allowed to hope that in years to come, I shall be treated similarly: that I, too, shall be regarded as an ally, and that I shall be allowed to meet these people on an equally hospitable basis.
The noble Viscount, however, has a long past in these matters. Frankly, I am surprised at the attack which he has made to-day. I will not weary your Lordships with many quotations, but I must give one more. It comes from a speech made by the noble Viscount in March, 1945, when, of course, he was Minister of Civil Aviation. And may I say here that I consider the noble Viscount's work for civil aviation was for the most part of lasting benefit to this country? This is what he said:
"Unless you give what you may call, if you please, a monopoly"—
"monopoly" sounds strange after what we have been hearing; at any rate it was not a bad word five years ago, when the noble Viscount was Minister—
"upon the lucrative routes, what will happen will be that we as taxpayers will have to carry the unremunerative routes, while two companies divide a lucrative route between them."
That is what the noble Viscount said. Really, the situation has changed much less than he would lead the House to suppose.

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Very properly, in my opinion, he has called attention to the defence aspect of this matter. Though his Motion singles me out for particular censure, he will, I hope, agree that it is right that there should be a statement on behalf of the Government as a whole. He has attacked me in terms. May I say that we were in touch with the Defence Ministries before launching what he calls, I am afraid rather absurdly—if he will forgive me for the use of that word—an attack on the charter companies? I can assure him, that we are in the closest touch on all these matters with the various Defence Ministries. I share his feeling, and I know it is fairly widespread, that the charter companies, or at any rate the major ones —there are well over 100 known to my Ministry, and I am not talking of them all—represent a valuable war potential, and from the standpoint of defence, their state of health cannot be regarded with indifference. There has been a great deal of satisfaction at the fact that a Royal Auxiliary Air Transport Squadron is being formed from personnel of one of the major charter companies, who will undertake special training outside the company's normal range. It is a fact that the Air Ministry will be making available R.A.F. transport aircraft and equipment for this purpose. The Air Ministry are also discussing similar schemes with certain other companies.
I hope that the country and the House will judge the Government as a whole, and will assume that Ministers are in close touch with one another. It is not a question of the Minister of Civil Aviation trying to "do in" the charter companies while the Defence Ministers are trying to prop them up. That would be quite a distorted impression if it got abroad. But few members of the public, and few noble Lords in this House, perhaps, realise how much business already reaches the charter companies through Air Ministry channels. It is a much larger sum than I think most of us without special information would suppose. It has long been the practice of the Air Ministry to place contracts with civilian firms for reserve flying training, anti-aircraft co-operation and similar work. The value of these con-tracts has been running at a figure of about £1,200,000 a year. That is subject to qualification in connection with the charter companies, as a good many of
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those contracts are held by firms in the aircraft industry or specialising in flying training—in other words, not charter companies—but I understand that the charter companies receive about half the total of £1,200,000 a year. The figure is somewhat higher if we include contracts that have been placed for the ad hoc carriage of Service personnel and Service families to overseas commands and for carriage of personnel and equipment to annual camps. Therefore the total which goes to the charter companies through Air Ministry channels is rather more than half the annual sum which I have mentioned.
I know, because I have talked to the charter companies—in fact, I have had many very agreeable talks with them— what it is that all charter companies particularly desire, and that is some kind of assurance about the future. It is inevitable in their line of business. They say: "On the whole, business is quite good." Some have spoken to me along the lines of the noble Viscount's remarks about the number of aeroplanes. His statement that in the last two months charter company business has been good is quite correct, but the companies say it is difficult to see clearly for some time ahead. I am still talking on the defence side. Speaking on behalf of my right honourable friend, the Secretary of State for Air, obviously 1 can-not give financial guarantees this afternoon, but I have been in close touch with my right honourable friend and what I am authorised to say will, I think, be encouraging to the charter companies. My right honourable friend informs me that the amount of business of this character will probably increase. For example, certain new contracts for flying training are being placed as a result of the expan-sion of the Royal Air Force. Much of this work is likely to be a firm requirement for some years to come. That, I imagine, is the kind of thing that the charter companies want to hear. I am assured that whenever possible long term contracts are being and will be placed. Before turning to my own direct responsibility, as defence is in the minds of us all I must leave no one under the delusion that the defence aspects of the charter companies is being neglected by any branch of the Government, least of all by the Ministries most immediately concerned.
And now for the civil side proper— though it is difficult to establish a strict

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dichotomy between the civil and military aspects. The noble Viscount and I, I am sure, are anxious to seek agreement. Perhaps after this afternoon we shall come closer together—on his previous form there was not very much between us. The noble Viscount and I are in agreement in thinking that there is a section of our national air transport industry in which we can look forward to seeing the charter companies flourish. Where we may differ is over the size and scope of that section. What, then, is the role which one could envisage for the charter companies in British civil aviation? I hope that the House will bear with me if I answer that question with some reference to history and, of course, with particular reference to the Civil Aviation Act. I feel that although it is difficult it is not impossible to abstract this matter from Party politics and to regard it as a question of transport economics. After all, in any discussion of the present roles of the Corporations and the independent companies the fundamental question is not the relative merits of State-owned Corporations and privately-owned companies: the fundamental question is surely the form of organisation, the pattern best calculated to secure expansion of our national air transport effort with the efficiency, continuity and standard of service to which the public, both as traveller and as taxpayer, is entitled.
One could tackle this question either in the abstract or in comparison with other countries, and some noble Lords may wish to do the latter; but the House will forgive me for saying a few words about the history of this matter. One over-whelming lesson from the study of the history of British civil aviation stands out a mile—if I may be forgiven the colloquialism—and that is the impossibility, gradually recognised by all who have had to handle these questions at firsthand, of allowing within our own aviation effort unfettered freedom to compete, of per-mitting full license of the air. We must recognise the necessity of rationalising or regulating to a very great extent the num-ber and size of the units concerned.
In the reports of various committees (and there have been quite a number which considered these problems during the inter-war years), we find identity of viewpoint on at least two basic factors. The first is that where the main effort
784
of any industry such as civil aviation is supported by subsidy, competition from unsubsidised elements is not admissible, and the number of organisations charged with the development of the industry should be strictly limited. Secondly, adequate incentive to efficiency in this industry is provided by international com-petition. These considerations progress-ively impose themselves upon the makers of Government policy. They influenced the Hambling Committee of 1923 to recommend discontinuance of the policy of subsidising a number of small companies and concentration of responsibility in a new organisation "with a privileged position as regards subsidies." The emergence of Imperial Airways in the following year as the chosen instrument to develop international routes with subsidy assistance was the result. Again, much the same considerations appear to have influenced the Maybury Committee in 1937, which concluded that the development of successful internal services in this country was dependent on the need "to apply restrictions to avoid undue competition," and recommended an exclusive licence for five years to a single company, or to an integrated combination of companies, to operate certain important internal routes.
Again, in the following year, the Cadman Committee, which benefited from the membership of the noble Lord who is now Lord Woolton, whose absence we all regret so much today, endorsed the principle of concentrating subsidised air transport on two organisations. The Government of the day, however—and it was not a Labour Government—decided to carry the policy of concentration a stage further and to adopt a single chosen instrument, the B.O.A.C, with exclusive rights to subsidy. It is clear from the general tenor of these Reports—and I do not think the noble Viscount, Lord Swinton, will quarrel with this history, whether or not he thinks it bears on his own argument—that the prime consideration in their minds was the need for a policy of concentration on units of substantial size. By giving these units exclusive rights to subsidy in the pre-war years (I emphasise that my present remarks refer to the pre-war years) they secured the rights to exclusive operation —and one can have an exclusive right to subsidy without an exclusive right of

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operation—in an industry which was still far from self-supporting.
During the war it became apparent that the monopoly of subsidy by itself was unlikely to secure to the chosen instrument protection from unsubsidised com-petition in the post-war period. The then Lord Privy Seal, Lord Beaverbrook, who was charged with the responsibility for post-war civil aviation policy, made it plain that any future policy would not allow freedom of competition on remunerative routes from unsubsidised companies, leaving the subsidised undertaking to provide services required in the public interest on the less remunerative routes. In his own picturesque words, there could be no "taking the eyes out of the carcase. "When the noble Viscount, Lord Swinton, was the first Minister of Civil Aviation, he found it necessary to protect his proposed three Corporations with exclusive rights on certain routes to be scheduled in any legislation. I readily admit he con-templated that two of his Corporations could operate without subsidy, but the significant point, as I see it, is that we witness for the first time in the proposal of the noble Viscount a structure founded on substantial units, with express provision—this is the point—for the protection of their exclusive rights on the routes allocated to them. I should add that charter services would have been open under this proposal to anyone wishing to compete.
VISCOUNT SWINTON: My Lords, in fairness, the noble Lord should complete the history which he has given so fairly. While the assigned routes, which were to be in the Schedule to the Bill, were to be operated by the Corporations, in which the independent operators would have been partners, as regards future routes, after the passage of the Act these were to be open to either the Corporations or the independent operators, whichever could best discharge them. The noble Lord will see that in a White Paper.
LORD PAKENHAM: The noble Vis-count, of course, naturally knows more of what was in his own mind.
VISCOUNT SWINTON: It is in the Government White Paper, published by the National Government and promulgated as their policy and as the policy with regard to future routes. That is what we are discussing.
LORD PAKENHAM: I have studied the White Paper carefully and I can only surmise what would follow from it, but I am glad that so far I have not distorted history. The noble Viscount will acquit me of any desire to misinterpret him. This left a residue of possible routes open to the Corporation and private companies alike, to be allocated under a licensing system. But I would venture to suggest that it is a permissible interpretation of his policy to say that the bulk of the main routes, operated by B.O.A.C. and B.E.A. to-day, both internal and external, would have been allocated to the Cor-porations.
VISCOUNT SWINTON: My Lords, we shall differ about some things vitally, but upon facts let us agree. The only routes which were going to be assigned to the Corporations were those routes which they were there and then prepared to operate. The other routes of the future, which is what we are now considering, were, as the noble Lord fairly said, to be the subject of a licensing authority which was to decide who would have them.
LORD PAKENHAM: My Lords, I shall have the opportunity later, when I have the White Paper in hand, of replying to this point in detail, but I do not think there is any difference between the noble Viscount and myself. He has not challenged the accuracy of what I have said. But I go on to stress the close organisational similarity between the two policies. I do not think it is an unreasonable deduction that the noble Viscount's policy would have concentrated the main responsibility for scheduled services on the three Corporations, leaving only a marginal fringe available for licensing either to private companies or to the Corporations. That is the interpretation which is put by many excellent judges on the policy outlined by the noble Viscount, but of course, I must not press the point, because the noble Viscount had his own plans. He alone knew what he was in-tending to do. But that is the interpretation of the White Paper of many experts, and it is my own interpretation. While there may be differences of degree between the two policies as regards the marginal fringe, I doubt, after a good deal of study, whether those differences would have been of much significance.
I should like to say a few words at this point in vindication—though not, Heaven

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knows, complacent vindication—of the policy of concentration on the two Corporations and on the grant to them of exclusive rights to operate scheduled ser-vices. We have not had a debate on civil aviation in your Lordships' House for about a year, and perhaps the House will bear with me while I give a few facts to illustrate these points. The monopolistic character of the present structure may be criticised, but when we look at the trend of progress I claim that whether we take the test of prices to the consumer or the test of economical operation, it is impossible to sustain a valid criticism. The fares and freight rates charged on the inter-national air routes, which account for the vast bulk of our effort, are regulated internationally through I.A.T.A. I felt that the noble Viscount failed to bring that out at the point in his speech when that might have been appropriate. There is thus no opportunity to pass on to the consumer the price of inefficiency, unless it is common to all international operators.
There is no question of the British operators "ganging up," having a little monopoly of their own and raising the prices—it is an international affair. In fact, the rise in air transport fare levels, as compared with pre-war rates, is less than the average rise in surface transport rates, and substantially less than the rise in wholesale prices. It is worth while pointing out that B.O.A.C.'s fares have risen only about 44 per cent. above their pre-war level, while wholesale prices have risen by about 168 per cent. I feel that that fact shows that monopoly has not led to an extortionate rise in fares. As regards efficiency and economy, there the international competition operates very strongly. And I would add that the very keen interest which the general public, and Parliament in particular, have taken in the fortunes of the Corporations has undoubtedly had a healthy and energising effect.
I should like briefly to give the House a few statistics. I know that they are difficult to follow when read out, but I think it will be agreed that it is worth putting them on record. Since 1946, when the present Corporations were formed, the capacity offered has been more than doubled—from 74,000,000 capacity ton-miles in 1946–47, to 159,000,000 capacity ton-miles in 1949–50.
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Over the same period, the total number of passengers carried has increased from 208,000 to 907,000-that is by four and a half times. Side by side with this ex-pansion, the costs of providing the services have declined, down to March, 1950. from 71d. to 48d. per capacity ton-mile, in the case of B.O.A.C. (including B.S.A.A. in both periods), and from 143d. per capacity ton-mile to 53d. per capacity ton-mile, in the case of B.E.A.
I am glad to say that the most recent results—those during the first six months of this financial year—give renewed evidence of the fight of the Corporations to overcome post-war difficulties. In the first six months of the current financial year, B.O.A.C. flew 35 per cent. more passenger miles than in the corresponding period last year, and earned 21 per cent. more revenue, with an increase of only 2 per cent. in operating expenditure. B.E.A. flew 27 per cent. more passenger miles, and earned 33 per cent. more revenue, with an increase of 23 per cent. in operating expenditure. There was again a reduction in the unit operating costs. B.O.A.C.'s costs per ton-mile of capacity offered were cut by 10 per cent., and B.E.A.'s by 8 per cent., compared with the previous year. Productivity, as measured by capacity ton-miles offered per head of staff, was also much higher —by 35 per cent. for B.O.A.C. and by 27 per cent. for B.E.A. I know that these figures are difficult to absorb when handled rapidly, but I place them before the House as revealing a most encouraging trend.
Finally, let us have a glance at subsidies. Although the aggregate sums paid in subsidies in the post-war years may seem heavy, compared with pre-war payments, the actual rate of subsidy in terms of output has declined, being only about three-quarters of the pre-war figure—that is to say, 1s. 8d. against 2s. 3d. per load ton-mile. Nevertheless—and I do not want to fall into any conceivable error of com-placency—the burden on the taxpayer remains heavy. It must be brought down, and the Corporations are deter-mined to bring it down. They are deter-mined to make our great airlines pay, though no one in his senses pretends that that result is just round the corner. Last year, B.E.A. halved their deficit. B.O.A.C. were afflicted by many adverse factors. for the most part outside their control— above all by the Tudor disaster, but also

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by aircraft delays and devaluation, which, of course, hit B.E.A. as well. In the event, the total reduction in subsidy over both Corporations was about £500,000, an appreciable amount, but much less than most of us had hoped. Nevertheless, it did represent, as everyone concerned with the Corporations knows, a vast amount of solid work and a real effort to cut costs wherever possible.
During the first six months of the current financial year we have seen some very encouraging improvements in this sphere—and these are figures that I would emphasise most of all. In the first six months of this financial year, B.E.A. made a net profit of £260,000, compared with a net loss of £52,000 for the same period of the previous year. B.O.A.C.'s net deficit was cut by 45 per cent., this year, compared with last year—that is, from £4,000,000 in period from April to September, 1949, to £2,200,000 in that from April to September, 1950. I hope the House, which is generous in its praise and sometimes generous in its censure, will wish to congratulate the Corporations on these results. But, of course, the lean winter months are with us now, and the outcome for the last half of the year is bound to be a good deal worse—I should not dream of disguising it—than that for the first half, for which I have just given the House the figures.
Viscount SWINTON: When does the financial year start?
Lord PAKENHAM: April 1.
As the House is aware, B.O.A.C., the taxpayer and the general public are being severely damaged by a strike at London Airport. It would be out of place to inject a consideration of that matter into our discussions this afternoon, but I should be doing much less than my duty if I did not make it quite plain that the management of the British Overseas Air-ways Corporation—and, to avoid misunderstanding, let me add both Corporations—possess my entire confidence. I rely on them, with whatever assistance can be given by the Ministry of Labour, or other-wise, to make sure that counsels of good sense and patriotism prevail as rapidly as possible before still further loss is incurred. Nevertheless, it would surely be wrong to allow this temporary setback to obscure our view of all the cheering progress to which I have been referring. In the light of it, I believe that few unpre-
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judiced people, whatever their Party, will question the soundness of the policy of the Government in reserving the scheduled services to the Corporations. In two and a half years as Minister, talking to many experts here and abroad, I can recall hardly a single expression of opinion in an opposite sense.
However, as I said earlier, and as Government spokesmen have always asserted, our policy recognises that there is a place in our air transport development for the independent private company. In the genuine charter field the companies are entirely free, and I should like to repeat and endorse what the noble Lord, Lord Winster—whose words, I father, this afternoon can be quoted as though they came from Sinai—said in your Lordships' House at the time of the Second Reading of the Civil Aviation Bill in July, 1946. He said—and I am following out the Winster policy, which was always the policy of His Majesty's Government:
"Legitimate and bona fide charter operators will be encouraged, not merely permitted but encouraged, to continue with charter flying."
And, again, he said:
"I repeat that far from there being any hostility there is every wish to encourage the charter operators in their bona fide sphere of work."
I fully endorse these two statements. Even though charter work, in common with other forms of air transport work generally—and this is a point that I think should be mentioned in the course of the discussion—has not provided the scope expected of it, it is certainly the field on which the charter companies must primarily rely.
It is worth noticing here that over the period April, 1949, to September of this year the Corporations have introduced to the charter companies business amounting to a total of £233,835. So we really must not carry away a picture of these wicked Corporations trying to sabotage the charter companies and preventing them from getting any business. The Corporations have introduced a great deal of solid business, amounting, as I say, to nearly a quarter of a million pounds. This figure includes both payments for aircraft chartered by the Corporations themselves, and contracts placed by the Corporation as agents. These sums, naturally, do not take account of the business which the charter companies

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have obtained from the general public by their own independent efforts. I think it is fair to say, therefore, that possibilities in the genuine charter field are not lightly to be dismissed as negligible.
Turning for a moment to the rather different, though related, sphere of Government contracts, my Ministry alone have during the past fifteen months placed with the charter companies contracts to the value of £216,000 on behalf of other Government Departments, while, as I said earlier, the Air Ministry have also placed contracts to an annual value of some £600,000. The figures I gave for my own Ministry are for rather more than a year, but if your Lordships scale down those figures to an annual rate—I ask the House to dwell upon this figure perhaps more than any other that I am placing before your Lordships—it means that contracts worth over £900,000 a year have been given to the charter companies and, as I have already mentioned earlier, the amount of Air Ministry business is likely to increase. In the light of those figures I can only say—and I am not saying it ironically or in any provocative sense— that the Government have proved the most substantial customer and the most reliable which the charter companies possess.
At this point, however, I should make plain the position of the Corporations in relation to charter work. As Government spokesmen indicated at the time of the passing of the Act—and the noble Viscount has quoted some of their utterances —it has always been the intention that the Corporations should have the right, if they wish, to undertake genuine charter work. The only condition has been that they should not take unfair advantage of their subsidy in order to secure such work. That position holds good today. They still accept the condition that they should not take unfair advantage of their subsidy in order to secure this work. I would stress that in this charter field proper—which is the field which Government spokesmen had in mind when they were making statements on this subject at the time of the passing of the Act—the activities of the Corporations will be incidental to their main business. If that is of any comfort, as perhaps it may be, let me repeat that charter activities will be incidental to their main business.
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There is however—and I wish to speak with absolute frankness—one field of activity in which the Corporations will certainly compete without any self-denying ordinance at all. A number of private companies to-day are engaged in offering services on a regular basis to particular classes of the community. These services do not constitute the normal type of charter operation, but they take on the character of regular services which represent the legitimate field of the Corporations. The Corporations regard these classes of traffic—I am not talking of charter traffic proper—as their lawful entitlement, and with my support and encouragement will not hesitate to use their resources in accordance with normal commercial practice to compete for such traffic.
VISCOUNT SWINTON: These so-called services are not services within the meaning of the Act, because otherwise the charter companies would not be able to have them.
LORD PAKENHAM: As I have said, these operations take on the character of regular services and do not form part of the genuine field of charter operations to which any assurances given by my predecessors would apply.
VISCOUNT SWINTON: This is governed by an Act of Parliament—the Civil Aviation Act—which defined the sched-duled services which were to be the exclusive right of the Corporations in a certain way. Quite clearly, I suggest to the noble Lord that these things which he is calling services are not services as defined in the Act, because otherwise the charter companies would not have the right to engage in them, and they would be the property of his Corporation. Therefore, they are services which he is trying to seize.
LORD PAKENHAM: I take the point which the noble Viscount has in mind. I would say only that these services are not charter operations as envisaged in the Act. May I now finish my sentence, because it is rather important that what I say should be quite clear and intelligible? I naturally speak with great caution in matters which approach the legal field, but I can say only—and I want this to be clearly understood—that if the inten-tion of the Act were persistently thwarted

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in this way it would create a position which the Government could not accept indefinitely.
THE MARQUESS OF SALISBURY: My Lords, I rise merely on a point of information. The noble Lord, Lord Pakenham, and my noble friend Lord Swinton know exactly what these services arc, but most of us in the House have no notion of what Lord Pakenham is referring to. If he could explain in simple words the type of business he has in mind it would be helpful to the House.
LORD PAKENHAM: I do not want to come too close to any particular example, because, as I say, one must be rather careful there. I am thinking, however, of the kind of services which would be run regularly, and which might in fact be run by a charter company, although they would be open to a very large section of the general public.
THE MARQUESS OF SALISBURY: With all respect, the noble Lord ought to tell us what he has in mind. This is Parliament, and we have a right to know. It appears to me that the noble Lord's hesitation and anxiety arise from the fact that he does not want to mention any of these particular cases, because that would be embarrassing to the Corporations.
LORD PAKENHAM: It is not for that reason at ail. In all these matters, where the Act is not always very easy to interpret, the question of whether or not it is legally permissible for charter companies to run a particular service has to be very carefully considered on legal advice. I would not wish to prejudice any proceedings which might arise in any particular case. I hope the noble Marquess will accept that.
THE MARQUESS OF SALISBURY: I realise that I may have put the noble Lord in some embarrassment, but I want to know the type of business he has in mind. I have not a notion of it, and I am sure that other noble Lords are in exactly the same position.
LORD PAKENHAM: Let us look at the Act. Section 24 of the Air Corpora-tions' Act, 1949, says:
"(l) Subject to the provisions of this section, it shall not be lawful for any person, other than the corporations, their associates, and the servants and agents of the corporations and their associates, to carry passengers or
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goods by air for hire or reward upon any scheduled journey between two places of which at least one is in the United Kingdom.
(2) In this Act the expression ' scheduled journey' means one of a series of journeys which are undertaken between the same two places and which together amount to a systematic service operated in such a manner that the benefits thereof are available to members of the public from time to time seeking to take advantage of it."
An operator might run a regular service and it might be arguable as to whether it was open to the public, although in fact he was throwing it open to a very wide section of the public indeed.
VISCOUNT SWINTON: What the Act means, my Lords, can be construed only in a court of law, and if the Corporations felt that charter companies were doing something they ought not to do, I should have thought that the right thing was for them to take the matter to court. That is their perfectly clear remedy. I am quite clear as to what I had in mind when these Acts went through. I thought that "open to the public" meant that any member of the public could go and book on a scheduled service, just as any-body can go to King's Cross station and book on a train leaving there.
LORD PAKENHAM: I cannot tell, of course, what is in the noble Viscount's mind, but the fact is that a class of service has arisen that was not foreseen when the Act was under discussion. Putting it quite simply, that is the case. It is a type of service which gives rise to con-siderable legal difficulties. That is putting the matter the simplest way.
THE MARQUESS OF SALISBURY: With deference to the noble Lord, this is an important point. The way that the Government, I understand, propose to deal with this difficulty is not to take action—that is to say, to limit themselves in no way in their competition with this service. But surely it would be far better to test the legality or non-legality of the matter in the courts. I do not think it is the right way to deal with the matter for the Government to run these people out of business by the whole weight of the Government machine. That does not seem to be the fair way to do it.
LORD PAKENHAM: I am perfectly ready to attend to what all noble Lords say on this matter, and after to-day's debate I shall, of course, think over all

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these matters very carefully. I cannot say more than that. The position is that this is a class of business which, clearly, was not envisaged at the time the Act was being passed, and it is certainly not the kind of business that was thought of as charter business by those who were drawing up the Act. That is the historical fact. It will be recalled that it was not the noble Viscount's Act but our Act; and our people, therefore, would know what was in their minds.
I would, however, say a few words about the associate agreements. It may be asked whether there is any scope at all for the charter companies in the field of what are indisputable scheduled services. My answer is, Yes, but only within the associate agreements scheme. I do ask the noble Lord who I think is to follow me to give me some share of his attention, because this part of my speech has been drafted with some care to tell him exactly what is in the mind of the Government. I can fairly claim to have taken the greatest personal interest in promoting and supporting this scheme. Frankly, I do, in a friendly way, resent the suggestion that I have attacked the charter companies or launched some kind of active aggression against them. I cannot help recalling what I said when the scheme was first introduced. I cannot help recalling the statement made by the British Air Charter Association when these associate agreements were brought in. So far from denouncing me, at that time they were kind enough to say, "The statement by the Minister of Civil Aviation to-day is welcomed by the British Air Charter Association"—and it is generally recognised that the present directive, whether or not it is perfect, is more friendly to the charter companies than the directive which was issued in January last year. If they welcomed it in January, I should feel it a little ungrateful if they began complaining about it when it was improved in their favour some time later. I must say those things, as the noble Viscount, I think, would leave a rather different impression on other people's minds.
I have taken the greatest personal interest in this associate agreement scheme. Soon after I became Minister, I asked my noble friend Lord Douglas, who was not at that time, of course, Chairman of
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B.E.A., to look into the whole question of those sections of the Civil Aviation Act which enable the Air Corporations to appoint associates or agents, and I announced the scheme, it may be recalled, at the beginning of January last year. I still say—and I challenge anybody who has been into the matter to deny this—that the scheme, with all its limitations, has been of real assistance to the charter companies, and has been so regarded.
I would venture to remind the House, however, of the meticulous care that we took in our debate of February 2, 1949, to avoid saying anything on the Government side that would lead the charter companies "up the garden path." I am sure the noble Viscount will recall what happened, as will the noble Lord, Lord Balfour. The greatest possible pains were taken to avoid persuading these companies to commit their money to these ventures. I said, to quote my own words:
"I am not asking or encouraging these charter companies to step in."
I was determined on the one hand to avoid a dog-in-the-manger policy, any sort of "We can't, so you shan't" conception. But I saw no reason, if a route was not being developed by the Corporations, why the charter companies should not try their luck at it. I also had in mind—and anybody who looks back to that debate cannot doubt it—that we in the Government had no intention (and we have no intention to-day) of altering the well-known policy whereby all scheduled services are reserved to the Corporations if they want to run them. The noble Viscount—I am afraid I am holding his attention very much less than usual, and I should be grateful for just a few minutes' personal interest on his part—has suggested that we have indulged in sharp practice by hounding these people off the routes, and that we have behaved in the most abominable fashion. If he looks at his words he will see that they are very strong. I told these companies at the beginning of 1949 that I was anxious to help them, but that I could not encourage them to spend a penny of their money on these routes. I made it clear that they would have to take all the risks themselves, and it is very misleading to say anything to the contrary.
What has happened to this scheme since February, 1949? The main thing that has happened is that I have tried to meet the

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criticisms which have been voiced by— among others—the noble Viscount, Lord Swinton, and, even more, by the noble Lord, Lord Balfour of Inchrye, who has argued that two years is too short a period for the maximum for associate agreements. The noble Lord, Lord Balfour, particularly made a good deal of that point. He argued that there ought to be a considerably longer period, if it was to be made a business proposition. I have tried to meet that point. I have revised my directive this summer so as to permit, in suitable cases, the making of agreements for periods up to five years—that is to say, in cases where a five years' agreement will not cause overlapping or competition with the Corporations' planned programme. The revised directive also broadens somewhat the field available to associate companies, and I think this has gone, or should have gone, some way to meet the point in the mind of the noble Viscount, by providing for the approval of international services on the same conditions as internal services. That was a point in which he took a great deal of interest, I know. I should just add that I welcomed, and certainly do welcome, the initiative taken by B.E.A., who have gone out of their way to try to help the charter companies. B.E.A., for no selfish reason, have helped the charter companies; for patriotic reasons they have done all they can during the present year to see whether they can be of assistance within the terms of their own duties.
I would pause on that point. Lord Douglas, I believe, is here, but of course he cannot take part in the discussion. I pause on this, because no one would possibly judge from the statements issued by our friends the charter companies that B.E.A. had taken a great deal of trouble to help them. In the first place, the Corporations decided what internal routes they would operate over the next five years. Then they approached the charter companies and had meetings with them, and they tried to explain to the charter companies the way in which the B.E.A. routes were to be developed during that period. B.E.A. have also offered to form an association of associates to enable inter-line agreements to be made between B.E.A. and the charter companies running scheduled services, and they tried to help to rationalise fares and conditions of service. None of that is of any selfish interest to B.E.A. That is, if you like,
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a patriotic duty that they have sought to perform. Finally, Lord Douglas has assured me that he has been at special pains to go over, again and yet again, the B.E.A. comments on the charter companies' applications to the Air Transport Advisory Council in order to make quite sure that B.E.A. have approached this whole matter in a spirit of liberality and breadth.
My Lords, we meet at a moment (it is perhaps not altogether fortunate that it should be so) when a good deal is happening on this particular front, and when it would be impossible, and indeed improper, to indicate the final decisions for the year. Last week the Air Transport Advisory Council—presided over with so much wisdom by noble friend, if I may so call him, across the House, Lord Terrington, and on which sits also the noble Viscount, Lord Runciman, who is I think a Liberal sitting in a different part of the House—completed its study under the new directive for applications for the next five years' services.
I would break off to emphasise the genuineness of these examinations of applications for associate agreements. The noble Viscount, with what authority I know not, gave us to understand what no doubt he sincerely believes, that the noble Lord, Lord Douglas, would be acting on my instructions in this matter. I would remind the noble Viscount that Lord Douglas is a virile gentleman who is no "stooge" of mine, although I hope he is my friend. The noble Lord, Lord Terrington, and the noble Viscount, Lord Runciman, are not going to play the rubber stamp either to myself or to the noble Lord, Lord Douglas.
VISCOUNT SWINTON: I never suggested that they would. I did say that I thought that certainly the policy of B.E.A. and the policy of the Minister was to "collar" all they could get, and in that they were together. But if the Minister differs front the noble Lord, Lord Douglas, of course I accept it.
LORD PAKENHAM: My Lords, I am not very old, but I am not quite so young as that Because I said that the noble Lord, Lord Douglas, was not instructed by me, that does not drive a wedge between the noble Lord, Lord Douglas, and myself. He is acting on his own initiative in this matter, and very wisely, I am sure. The simple fact is that these

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applications are made by charter companies. B.E.A. put forward their own views. Those views have been overruled on some occasions by the noble Lord, Lord Terrington, and his colleagues, and it is therefore a very independent and objective tribunal. If the noble Viscount says: "Ah, well, the Minister has the last word. The whole thing is nothing but a facade"—I hope the noble Viscount would not use such language about the conduct of the noble Lord, but if anybody less instructed than the noble Viscount suggested that, I would point out that nothing could be further from the truth. It is an absolutely genuine tribunal, and so far from my overruling them on a great many occasions there has been only one occasion when I did venture to over-rule them, which I think proves that the whole proceedings are entirely as we should wish them to be.
The recommendations for the present year I have received in the last day or two. Naturally we always give them very careful investigation before I approve them. I cannot give your Lordships statistics to-day, but I would say at this point that 109 applications have been received so far this year, that the pro-portion of applications turned down by the council is not a high one, and that a number of five-year agreements have been recommended. I should like to emphasise that point. The noble Lord, Lord Balfour of Inchrye, will pick it up. A number of five-year agreements have been recommended. The number of in-stances in which the Council have differed from B.E.A. is sufficient to indicate that kind of masculine independence which we associate with my noble friend Lord Terrington, while at the same time they are insufficient to suggest a whole series of irreconcilable conflicts. That is the position up to the moment. It would be imprudent to say more at this stage, except to re-emphasise my sense of good fortune and gratitude at having obtained the noble Lords, Lord Terrington and Lord Runciman, and their colleagues on the Air Transport Advisory Council, to undertake this invidious task.
I have said my say for the moment, though I understand that, with the leave of the House, I may be permitted to speak again. This question of the charter companies is not one in which all the facts
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are easily come by. No one, I think, will accuse me or my officers of being unready to meet representatives of charter companies at any time. I have had a number of agreeable talks in particular with Mr. Rylands, the energetic chairman of the British Air Charter Association. I read in the Aeroplane of November 17 that large charter aircraft have come into their own for the past two months, but I am prepared to be told that this is a flash in the pan, and I appreciate that what they really want is some certainty about the future. There are at least three attitudes that could be assumed by a Minister towards a possible decline in the charter companies, which I should not wish to see: he could view it with positive enthusiasm, he could regard it with indifference or he could meet it and recognise in the face of it an unreserved responsibility for arresting it by governmental action, at the expense, it might well be, of the Corporations. My Lords, none of those three courses expresses my attitude or that of the Government. We regard the charter operators as honest citizens who have embarked, under a Government policy, repeatedly stated, on activities in the world of aviation, where, within the framework of existing policy, it is my own duty to assist wherever I can. That duty I endeavour to perform and find no difficulty in performing in a friendly and sym-pathetic spirit which, in personal dealings at least, I have always found reciprocated by the charter companies themselves. But I can never overlook, and I venture to say no Minister in my position, whatever his Party, could honourably overlook, my prime responsibilities for the Corporations, in whom so much of our national resources is invested and to whom falls inevitably by far the greater part of the great national task and challenge of giving us the same place in the air as we have so long possessed on the sea.
4.17 p.m.
LORD STRABOLGI: My Lords, I apologise to the House for addressing it twice in one week, but, as has been said, we have not had a debate on Civil Aviation for a long time, and very important things have been happening in that field. We have had two weighty speeches to-day from opposite sides of the House. It all seems to me to sum up to this: that the objects and the policy of both the noble Viscount, Lord Swinton, and the noble

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Lord, Lord Pakenham, are in fact the same—to foster and support the independent charier companies. My only reason for intervening for a short time is that I have one or two constructive suggestions to offer which open up a new line of country altogether. I hope your Lordships will forgive me for putting them before you. With regard to the general attack on my noble friend, Lord Pakenham, I think it is perfectly true to say that it is really an attack on the Civil Aviation Act and the previous instruments of the present Government. My noble friend can do no other than carry out the objects of the Acts of Parliament.
No mention has so far been made in this debate—I would not have expected it from my noble friend—about the heavy burden which falls in this country on private flying, commercial flying, the charter companies and everyone else, and that is the increase in the tax on light hydro-carbon oils; in other words, aviation petrol. I believe I am right in saying that this is the only country in the world which puts a tax at all on aviation spirit. The way in which the tax works out in practice is absolutely grotesque. In the first place, the Corporations, who, after all, are the major users, are running at a reduced loss, but still at a loss; therefore what they pay in taxation on their petrol only adds to their deficit and is made up from another pocket, so to speak, of the Treasury. Therefore, what the Corporations pay back to the Exchequer or give to the Customs and Excise in tax on their petrol is made up again by my noble friend and the Treasury in a subsidy to them. The people most affected are the charter companies and the private owners.
I am informed that actually—I do not know whether my noble friend can throw light on this point, but this is my information and advice, which comes from a key source—in practice the cost of collecting this tax just about covers the amount of revenue derived from it. In short, the Exchequer makes little if anything out of it at all. Furthermore, 65 per cent. of the taxed aviation spirit last year was used in testing engines, trial flights and training, and therefore is a direct burden on the manufacturers who, after all, are competing in the export market. It is therefore an extra cost on manufacture. My noble friend will probably say that this is a matter for the Chancellor of the
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Exchequer; that he is very sorry indeed, but he cannot anticipate the Budget. I do not ask for any anticipation of the Budget. This matter is so serious that there ought to be a special Bill brought in before the Budget. I think that Bill would pass through both. Houses without any opposition at all.
There is one other side-light on the curious way in which this business of the petrol tax works out. A concession has been given to the flying clubs, for which I am sure we have to thank my noble friend the Minister of Civil Aviation, but it has not been given to the private owners. It works in this way. Mr. Jones has to make a journey and, being a member of a flying club, he hires or borrows one of the club machines. In that case his petrol does not bear the increased tax. But if he uses his own private plane and happens to keep or hangar it at the club, then he is charged the higher tax. I think that situation is quite indefensible. My noble friend re-echoed what was said by Lord Swinton in stressing—I use my noble friend's words— "the valuable defence potential of the charter companies." Lord Swinton laid great and justifiable stress on the strategic aspect, and 1 should have thought that from that point of view alone it was necessary to encourage and foster private owners. The private owner is also an asset in time of emergency. He is usually his own pilot, and he knows the country. I suggest that an arrangement might be come to whereby he is exempted from the tax on aviation spirit, on condition that if he is otherwise fit he shall join the Reserve Forces. I think the whole case is a very strong one indeed, and I cannot imagine that my noble friend is unsympathetic towards it. Some pressure should be brought to bear in the way I suggest to put this matter right before the Budget.
I have what I hope is one other constructive suggestion. My noble friend spoke of about 100 charter companies doing charter work, but I suppose he was including some quite small companies. I think there are about forty major companies, and I am told that several of them are in a bad way and that at least fifteen are likely to go out of business before the end of the year. That is a very serious state of affairs. The last debate on air defence in your Lordships' House produced some warnings about the weak state of Trans-

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port Command. It is notorious that Transport Command has not yet been built up again as part of the rearmament programme and is still in a very weak position. That being the case, the charter companies, and, for that matter, private flyers as well, are of great potential value in case of emergency. Why cannot we adopt some system such as the War Office adopted a few years ago, when they wanted a reserve of heavy commercial vehicles for the Army? They paid an annual subsidy—it was not very much, but it was valuable and produced the right results—for certain types of heavy commercial lorries, so long as they were kept in good order and were available in case of mobilisation. I suggest that some annual sum should be paid for every civil aeroplane, not in the Corporations of course, but belonging to either a private owner or to the charter companies, so long as it is airworthy and useful for service. There might also be an annual payment for every trained pilot or technician. I suggest that this payment should be justified on exactly the same ground as the War Office justified its payment to the owners of certain heavy commercial vehicles needed for the Army in case of mobilisation. I throw out that suggestion to my noble friend who, I am sure, is quite genuine in wishing to support private flying and the charter companies as well. I think it is worthy of consideration.
Having seen the documents, I entirely agree with my noble friend that the Corporations and of course the Ministry of Civil Aviation as well, have tried to play the game with the charter companies. I think the idea of stabilising for five years, presumably until the helicopter becomes more generally used and more advanced, is most valuable, and I suggest that the accusations, made in perfectly good humour by Lord Swinton, about attempting to squeeze out and crush these people are not well founded. As for the sup-posed tremendous extravagance of the Corporations, I have not the figures for B.O.A.C. but I have the overheads for B.E.A., and compared with the American private companies I think they make very interesting reading.
VISCOUNT SWINTON: I am sure it was my fault, but the noble Lord has misunderstood me. I was not discussing
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at all whether the Corporations were or were not extravagant. I never mentioned that matter. The point I did ask to be enlightened upon was whether a share of the overheads was charged to charter work or whether those overheads were debited exclusively to the regular work.
LORD STRABOLGI: I was particularly interested in the noble Viscount's speech but I was not addressing myself to his remarks on that point. I was referring to the general accusation of extravagance or bad management. In that connection I have four figures I should like to quote. The direct overheads in relation to B.E.A. are 44.4 per cent. The figures for the three great American air lines, run by private enterprise although indirectly heavily subsidised by the American Post-master-General, and so on, and not making much money either, are as follows: Western 50.1 per cent.; T.W.A., 53.3 per cent.; and the great Pan American air line, which we are always told is so wonderfully efficient (though I must say I have never noticed it, and I have flown a great many thousand miles with them), stands at 53.9 per cent. Comparing those figures with the B.E.A. overheads of 44.4 per cent., I do not think the charge of extravagance has been made out. In addition to that, my noble friend has given some very impressive figures of the cutting down of expenses and the increase of efficiency, and so on.
My last point is that this being a broad debate on civil aviation, we all have the same object in view—namely, to encourage British commercial aviation in every way we can and from every point of view. A great many complaints have reached me about certain of the air facilities on the air routes through the Colonies. Although this is a Colonial Office question more than a Civil Aviation matter. I hope my noble friend will forgive me if I ventilate these grievances because I think they are of some importance. With one or two exceptions on the more important Colonial routes there are still grave deficiencies in meteorological services, ground communications, navigation aids and so on; and perhaps the most notorious of all which I have had represented to me by recent visitors is the state of the aerodromes in Kenya, and particularly those at Eastleigh and Nairobi West. I am told that the aerodromes themselves are fairly good but that the accommodation for

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passengers is particularly poor, out of date, and, indeed, in some cases insanitary. This has given a very bad impression. If in regard to these matters my noble friend can bring pressure to bear upon the Colonial Office and the Colonial Governments, civil aviation generally can be helped, indirectly but to a valuable extent.
On the other hand, I must take the opportunity of congratulating everyone concerned on the magnificent new aerodrome at Livingstone which my noble friend recently opened. That is a credit to the whole Commonwealth. I wish we had more Livingstones, expensive as they are. The sort of spirit that laid out, built and developed the Livingstone Aerodrome, applied to some of the other Colonial routes would be of great value to the Commonwealth and to civil aviation as a whole. As I understand it, noble Lords in all parts of the House wish only to assist civil aviation and to help and maintain commercial flying at the highest state of efficiency in every branch. Therefore I suggest that the proposals I have ventured to put before your Lordships' House should receive some consideration.
4.30 p.m
LORD MONTAGU OF BEAULIEU: My Lords, many good reasons have been put forward this afternoon to show why the existence of air charter firms in this country should be encouraged. I think everyone is agreed that their existence is entirely necessary to the welfare of civil aviation. We have heard—and, again, I am sure everyone is agreed upon it—that the main reason is that their 'planes and staff form a valuable reservoir upon which the R.A.F. can draw in the event of an emergency. In this connection, the obvious example which can be quoted is that of the Berlin airlift. I believe that B.O.A.C. may have to charter some private 'planes in view of the present strike difficulties. I should like to mention one or two other respects in which I feel that air charter firms can be of enormous benefit to this country. One is the building up of an air merchant marine capable of carrying goods and earning foreign currency in all areas, thus spreading British trade, prestige and influence to the far corners of the earth. A second point I should make in this connection is that in my view air charter firms ought
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to be allowed to develop and build up a second or tourist class of air travel.
Before I get on to that, however, I wish to make one or two comments about air charter work in general. I am sure the noble Lord, Lord Pakenham, will agree with me that it would be very unjust if the Government were to use air charter planes only in time of emergency—as in the case of the Berlin airlift—and during the rest of the year when the companies were not needed for such purposes, were to be hostile to them. In spite of the very attractive figures which the noble Lord gave us—figures designed to show how much business his Department gave to air charter firms last year—I would remind him that during the past year sixteen private air charter companies have "gone broke." In addition, it seems very significant that whereas in 1949–50 there were 231 applications for associate agreements, this year, so far, there have been only 109. I think it is agreed that air charter firms must be able to plan ahead.
LORD PAKENHAM: May I break in for a moment? Can the noble Lord tell us up to what date he 230 applications which he has mentioned were received? As I understand it, they have not been received at this stage. I do not want to quibble, but perhaps the noble Lord can clear up that point.
LORD MONTAGU OF BEAULIEU: I think the noble Lord has told us that there have been 109 applications so far this year. Last year there were 231.
LORD PAKENHAM: Not at this point.
LORD MONTAGL OF BEAULIEU: The planning of a route and the development of it is a matter of great importance to air charter firms. I do not think any-thing has been said 10-day by the noble Lord which is calculated to alleviate the fears of the charter firms that they are to be used as stooges, to pioneer routes, to develop them and spend money advertising them, and then, after they have made a success of them, see those routes taken away. A question which arises in this connection is this. When routes are to be taken from private air charter firms will the routes only be taken, or will the services be acquired as well? In other words, are the 'planes which have been specially bought for the services, and the personnel which has been specially

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trained, to be thrown out of work, or are they not?
I should now like to revert to the very important subject of the formation in this country of second-class air travel. That is not a new thing, but it would be new in this country. State airline services are quite rightly recognised as being really first-class, by reason of their efficiency and regular service. Everyone knows that they run scheduled services. But they charge first-class fares. I put it to your Lordships that one function of air charter firms is to provide tourist or second-class travel for people in this country, at second-class fares. This sort of service exists in America, in France and in many other countries, and it forms an important part of air travel facilities. In France, for instance, second-class facilities are set out in the official time-table alongside the details and fares of the first-class facilities. And it is a recognised fact that the intending passenger is at liberty to choose for himself which form of travel he prefers, having regard to what he can afford.
A further point which I should like to put is that the public which B.E.A. and B.O.A.C. cater for is a public of a completely different type to that which normally travels by charter planes. It seems strange, in view of the great levelling out and socialisation process which has taken place in this country, that the Government have created air services which cater entirely for the rich people, and that private enterprise firms, which are trying to run cheaper services for the ordinary people, should not be put in a position to operate as efficiently. I am not contending that these second-class services should run on scheduled routes. On the other hand, there is no reason why charter 'planes should not fly to the same countries as the scheduled services, though perhaps not to the same airports. Take the case of flights to Italy. It might be that the charter companies should fly not to Rome, but to some other place in Italy. Their object should be to take passengers on different routes at a lower fare, thus providing for the tourist just what he wants. It must be remembered that these people will never fly by B.E.A. They will travel, perhaps, by a charter 'plane run by a company that arranges for its clients to have holidays abroad at an inclusive fee.
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I would now turn to another matter. As in the days of old, there is an enormous amount of business to be done in this country, and with other countries, in the carrying of freight to the far corners of the globe. We all know how the British merchant marine became famous for carrying not only British but foreign goods as well all over the world. I believe that the existence of a strong fleet of freight carriers of the air—rather like the tramp steamers of the sea—would ensure that the British sphere of influence would not be neglected, and that a steady stream of foreign currency continued to flow into Britain. In addition it would help to keep the British Empire and the Colonial Empire in touch with each other.
With regard to associate agreements, I should like to point out that firms which secure an associate agreement with B.E.A. sometimes find themselves forced to make higher profits than they would wish to make. Let me give one example to show how one British charter firm is losing business. Last year an Austrian travel agency—it is an Austrian State organisa-tion—used a British air charter company which had an associate agreement with B.E.A. to fly their passengers to Innsbruck. B.E.A. insisted that the company should charge a fare of £39. This year Swiss Air have undercut this fare by £10. Their method will be to fly people to Zurich and then send them on by chartered planes to Innsbrück. So it seems that a British firm will lose valuable business, and, of course, there will be a consequent loss of Swiss francs and other foreign currency to this country. I am sure we are all agreed that these are non-Party problems. No one is trying to make Party capital out of these matters. I submit that all interested parties should get together and discuss the whole matter properly. I am sure that the Air Ministry and the noble Lord, Lord Pakenham, are only too willing to help the air charter companies to carry on efficiently. But it seems to me that the Government are like a twin-engined aeroplane, with the starboard engine not knowing which way round the port engine turns. Let me hasten to add that, in saying that, I am not making any political analogy. I ask the Minister to use his influence to organise a round-table conference of interested parties at which these problems can be thoroughly threshed out.
4.40 p.m
LORD BALFOUR OF INCHRYE: My Lords, the position of charter companies has been fully deployed during the debate, first by my noble friend Viscount Swinton, then by the noble Lord, Lord Strabolgi, and again in an able and interesting manner by the noble Lord, Lord Montagu of Beaulieu. I listened with great interest to the speech of the noble Lord, the Minister of Civil Aviation. He started off by expressing his good will, an admirable sentiment which I am sure is welcomed on all sides of the House, although good will does not necessarily mean that action will automatically follow. The noble Lord outlined as he saw it the best pattern for the air transport field. He justified the doctrine of large units, of the Corporations, their monopoly of operation on scheduled routes, their monopoly of subsidies, and the need for them to have freedom from competition on those scheduled routes. Those are very large questions, which are arguable, but they are not strictly germane to the main subject of our debate to-day, However, we are very glad to have those views and to hear of the progress of the Corporations, given in the interesting figures which I shall read in Hansard to-morrow and then be able to absorb, because it is difficult to take them all in during a debate.
In talking in general terms of the major policies, the noble Lord did not deal with the encroachment of the monopoly Corporations into fields which we have under-stood hitherto were primarily for private enterprise. That seems the point which was lacking in the noble Lord's speech. The real issue seems to me to be—and I do not think the noble Lord will disagree with me—the equitable apportionment between the Corporations and private enterprise of the air transport traffic which exists. The noble Lord him-self admitted that there is a field for private enterprise in charter work. The position is that, by Statute, the Corporations have exclusive rights to operate scheduled services which are available to the public—I stress the words, "available to the public." Any services not coming within this description have been normally regarded as non-scheduled or charter services. The declared policy of the previous Minister, and I think of the Corporations, has been that the Corporations did not in-tend to develop charter operations to a major extent. I would remind the noble
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Lord of what the noble Lord, Lord Winster, said on July 23, 1946. He said:
"I do not think there is much between the noble Lord "—
he was referring to me—
"and myself on this subject, because, broadly speaking, it is not my intention to allow the Corporations to have unfair advantage over charter companies. I do not intend that they should be able to use the resources of the State to the disadvantage of the charier operators."
The mere fact of the Corporations going into these non-scheduled and charter services must mean that they are using the resources of the State in pursuit of this purpose, the operation of these services. Hitherto we have been always under the impression that although the Corporations had statutory liberty to execute charter work, nevertheless, it was not the intention of the Government that they should use any major portion of their resources upon charter and non-scheduled operations.
LORD PAKENHAM: That is still the intention of the Government.
LORD BALFOUR OF INCHRYE: If that is the intention of the Government, then the value of that statement must depend upon the interpretation of the word "charter."
LORD PAKENHAM: I do not wish to interrupt, the noble Lord but I am anxious to be fair. What I said in my intervention only repeated what I said in my speech, that this work would be incidental. I used the word "incidental" and I used it twice. It was a carefully chosen word.
LORD BALFOUR OF INCHRYE: I would put this to the noble Lord. If the Corporations undertook not to engage in charter operations which fell outside the description of scheduled services which are available to the public, there would be sufficient business left to the charter companies for them to lay the solid foundations of a valuable mercantile marine of the air in this country, and they would be able to do that without encroaching on the main preserves of the Corporations. The noble Lord says that that is the Government's general intention, but, if I may say so, he has to-day declared war upon the chartered companies in respect of all repetitive services, whether available to the public or not. If the noble Lord

811
will look at the 1946 Act, Section 23, sub-section (2), he will see this definition:
"In this Act the expression 'scheduled journey' means one of a series of journeys which are undertaken between the same two places and which together amount to a systematic service operated in such a manner that the benefits thereof are available to members of the public from time to time seeking to take advantage of it."
The Corporations are contriving to tender, and to tender with the noble Lord's support, as he said to-day, for any repetitive service of a major character, even if such a service is not available to the public. He has not explained how he can get round the fact that the Act says that availability to the public is a necessary condition for a scheduled service. The noble Lord is encouraging the Corporations to undertake all repetitive services, even if they are not available to the public. If a repetitive service not available to the public is a scheduled service, then the people operating it are breaking the law. As the noble Marquess, Lord Salisbury, said, if people are breaking the law, take them to court, and let the judiciary deal with the matter, but do not try to con-duct a trial within the Department, find the operator of the service guilty, and then use the resources of the State to drive that operator out of business. It would be far better to take the case to court. If we have the position the noble Lord said we are to have, it is possible that the Corporations may tender for every repetitive service.
LORD PAKENHAM: I did not say that. I chose my words very carefully.
LORD BALFOUR OF INCHRYE: I understood the noble Lord to say that the Corporations could tender for all repetitive services, with his full support.
LORD PAKENHAM: I did not say that.
LORD BALFOUR OF INCHRYE: I should be glad if the noble Lord would correct me, because this is very important.
LORD PAKENHAM: I do not want to delay the House, but I said actually that a number of private companies to-day are engaged in offering services on a regular basis to particular classes of the community. I further said that those services do not constitute the normal type
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of charter operation, but take on the character of regular services. I was not referring under that head to, shall I say, the Anglo-Persian leave scheme. It would not cover a service run by a particular company for its employees. That would be pure charter work. But I give the example here of the Anglo-Persian contract as something to which I was not referring.
LORD BALFOUR OF INCHRYE: The noble Lord gives an example of something to which he is not referring, but may I ask him whether he would consider that the Sudan Government leave services come within the ambit of a scheduled service which the Corporations should run, even though that Sudan Government leave service is not available to the public, but only to Sudan Government employees? Which way does that go?
LORD PAKENHAM: Does the noble Lord wish me to answer?
LORD BALFOUR OF INCHRYE: Yes.
LORD PAKENHAM: I certainly am not going to answer that question to-day. The noble Lord can wag his head, but I am not going to interpret the law this afternoon in relation to particular companies in any conceivable case of this sort. In my place the noble Lord would not dream of doing so.
LORD BALFOUR OF INCHRYE: The noble Lord says he is not going to interpret the law. I wish that he and his Department would not interpret the law. If they feel that these charter companies are encroaching on the field of scheduled services, let them take the charter companies to court, and let the court decide. They should not use the whole resources of the Corporations in an endeavour to substantiate the Government's and the Corporations' position. As things are going at the present time, if the policy of the Corporations in quoting for every repetitive service is to be executed, it will drive these charter companies right out of that particular market. The Corporations can always underquote a charter company, and justify themselves in so doing.
Let us assume for a moment that the prime cost of running an aircraft is £30 an hour, of which £20 goes in direct

813
operating costs and the other £10 in general administration, overheads, insurance, and other items. The Corporations could come along, and if they quoted £21 they would be £9 per hour under the economic price for running that aircraft. yet they could still make out a case that they were adding a £1 per hour contribution to their overheads, because they would be using the whole of their organisation. They could say that this was merely some extra work which they could take on at a cut rate, provided that the cut rate was slightly above the direct charge. I do not think it can be denied that this policy must eventually lead to the charter companies' being driven out of this repetitive service market. Maybe it is the Government's policy to do so. If so, I disagree with it. But let us face the fact that that will be the logical conclusion of the policy which the Minister is at the present moment following.
LORD PAKENHAM: I have corrected the noble Lord once, and it is on the record. However. I would repeat that I do not accept his use of the word "repetitive" in that way.
LORD BALFOUR OF INCHRYE: Let me come to another proof of this under-standing which I put to the House, and with which the noble Lord was good enough to agree: that it was not the intention of the Corporations to engage in charter work, other than incidentally to their main task. Let us look at that matter again, in the light of what is happening. The charter companies have been energetic, full of initiative and have worked in co-operation with the Baltic Exchange air charter section built up by the charterers. Since the charterers built up their position there, the Corporations have come along and become members of the Baltic Exchange, and they have appointed, or are appointing, representatives on the Baltic Exchange, presumably in order to quote for all charter work which is going.
LORD DOUGLAS OF KIRTLESIDE: We are on the Baltic Exchange not in order to obtain charier work, but in order to obtain freights for our regular freight services.
LORD BALFOUR OF INCHRYE: Then I presume that a deaf ear will be turned by the Corporations' representa-tives on the Baltic Exchange (and let it
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be on the record for all time that it is so) to any offer of charter work. They are there only to obtain freights for regular freight services. I am sure that, to that extent, we are relieved that the charter companies are not to be under-cut in the enterprise which they themselves set up.
The next proof that this understanding, that charter work was incidental to the Corporations, has not been carried out, lies in these associated agreements of British European Airways. The noble Lord, Lord Pakenham, made out that British European Airways were a sort of benevolent uncle to the charter companies, and that all they wanted to do was to help them. Of course, British European Airways have given a great deal of work to the charter companies. But was it not work which was surplus to the capacity of their own aircraft, and which they would have preferred to execute themselves? Here may I digress for a moment to say that I feel sorry for my very good friend Lord Douglas of Kirtleside, who has to sit here through the debate and hear this and that said, but who is unable to make any comment? We have other noble Lords in this House who are members of Boards, such as the B.B.C., the Colonial Development Corporation and the trans-port Corporations, who under the present Government directives are precluded from speaking on their own subject. I remember that Mr. Baldwin once defended his silence or. certain defence matters on grounds of security. If I remember rightly, he said that his lips were sealed. We sympathise with those noble Lords in their condition: their seats are sealed, and they are unable to rise and correct statements which are made with which they disagree.
I hope the noble Lord, Lord Douglas, will not take it amiss if I say that, in my view, there was a good deal of propaganda humbug in the Press announcement of B.E.A. that they were giving unprecedented opportunity to the charter companies by these associate agreements. No routes were left for five-year agreements which justified the purchase of new aircraft. It is true, as the noble Lord, Lord Pakenham, said, that I raised in a previous debate the need for a long-term agreement on any line which would allow an aircraft to be bought and to be written off over five years. True, the five-years'

815
agreement has come, but not on routes which are in any way economic for the purchase of new aircraft. My noble friend Lord Swinton spoke about the Channel Islands and the Isle of Man. Those routes have gone. I understand that the London to Manchester route cannot be given a five-year associate agreement because the Corporation at some time in the future may wish to run it themselves. The routes remaining, including the five-year routes, are irregular and light in traffic; and in the main they are not worth concentrating on for development.
LORD PAKENHAM: Then why are people putting in for them?
LORD BALFOUR OF INCHRYE: Hoping to get a little milk—no cream— and in due course hoping that the Government will either change or relent in their present policy. An analogy is this. Sup-pose that a public bus transport runs from Salisbury to Winchester under private enterprise and along comes a nationalised bus corporation who say: "You must get off this route which you have built up, but we will give you an unprecedented opportunity of five years from Nether Wallop to Middle Wallop." That would not be a very attractive offer for the purchase of new buses. That seems to me not an unfair analogy to what is happening on these five-year associate agreements.
The result of Government policy is that non-scheduled services of any value, in the way of nourishment for private charter companies, are to be withheld from them, by reason of the ability of the Corporations always to undercut the charter company. Without such nourishment, the charter companies are bound, in due course, to die. Of course, as the noble Lord said, the Government give much work to the charter companies in many directions—Army co-operation work and special contracts. Nevertheless, a global figure of £600,000 a year does not really mean anything, unless one knows what is the size of the enterprises which are executing the work, how many aircraft they have, what their insurance total is and what their depreciation total is. The fact is that the charter companies are being reduced in number, and the number of commercial pilots is going down. That is because the policy which we all under-
816
stood was to be adopted is not being carried out—that is to say, that charter work would be incidental to the Corporations' main activities and that their principal resources should not be used for that purpose. In fact, just the opposite is happening. If it is the Minister's policy to allow the private charter industry to continue to exist, it is necessary that the present attitude to this problem should change.
I will conclude by saying a few words upon the defence aspect. We all welcome the contribution to national defence which these charter companies can make, and indeed could make to a greater extent in the future, if they were so permitted. In time of war—and my noble friend Lord Runciman knows this as well as I do, be-cause we were working together on this problem, although not always seeing eye to eye—the job of the Corporations is to keep open world communications; and, believe me, in war time that is a full-time job for any Corporation. The Corporations will not be able in time of war to contribute in man-power, in aircraft or in technical skill, in the way of auxiliary transport squadrons, to support the Royal Air Force. They will be fully occupied in keeping open the world's air routes. Therefore, if the Minister of Defence and the Air Ministry want a contribution from civil aviation for air transport in time of war—and Korea is certainly showing us the need for the maximum of air transport—it can come only from these charter companies.
The noble Lord, Lord Pakenham, said that his Department were in the closest touch with the Secretary of State for Air and the Ministry of Defence. Without prying into business which is purely Government business, may I ask him this question: Are the Secretary of State for Air and the Ministry of Defence in absolute agreement with the policy which the Ministry of Civil Aviation are following, and which must mean, in the long run, that these charter companies will be unable to make the contribution to auxiliary air force transport squadrons which they might make if they received a greater degree of encouragement from the Air Ministry in their permanent bread-and-butter work?
LORD PAKENHAM: It is not usual to answer that kind of question.
LORD BALFOUR OF INCHRYE: It is not usual, but there is never any harm in asking. One may not always receive a reply.
LORD STRABOLGI: I think there is always agreement.
LORD BALFOUR OF INCHRYE: The issue is that the Minister must decide whether it is in the interests of the country that private air transport of the charter description survives, or whether he wishes his doctrinaire policy of public control to be continued to the point of elimination of this branch of private enterprise.
The Minister said in his concluding remarks that his primary duty was to the Corporation, May I, with great respect suggest to him that that is not so? I would say that his primary duty in this charter business at the present time is to the interests of national needs and national safety. I would say that his second duty is to air transport as a whole, and his third and last duty is to his nationalised Corporations. That is lie order in which I would put his duties, whereas he puts his duty primarily to the Corporations, I think he said his second duty was to be watchdog for the taxpayer. I would implore him to reconsider that allocation of priorities in his mind—to put national defence and national needs first; air transport as a whole second, and the Corporations third. If he will do that, then I think he may review his policy up to to-day—even some of the things that he said in his speech to-day—and civil aviation charter companies will then have a greater chance than they have at present.
5.7 p.m.
LORD PAKENHAM: My Lords, I always enjoy listening to the noble Lord, because he is hitting out the whole time and to-day has been no exception. He is essentially an aviation man—it is in his blood—and I know how deeply he feels about all these things. I consider that on the whole a very unfair line of criticism has been developed by the noble Lord. I feel that quite strongly, and I am sure that he will allow me to say so, because, to be quite frank, I have taken a good deal of trouble over the charter companies since I have been Minister. I know their opinions perhaps almost as well as noble Lords opposite know their contemporary opinions. Although they
818
obviously regret a number of things about the present Act, I should be amazed if they were, in fact, to regard it as casting the sort of doubt on my attitude towards the charter companies which has been presented to your Lordships.
I am bound to say that I think it is most unfair to treat me as somebody who has taken away something from these companies, because, honestly, I have in certain ways developed the Act and modified its workings so as to be of special assistance to the charter companies. That is the actual fact, and I must put it on record in view of what has been said. If any-body listened to the two noble Lords opposite without hearing the few remarks that I ventured to address to the House, they would think that the whole business was some effort to winkle away from the charter companies some business that has always belonged or has always been coming to them. That is wildly remote from any semblance of truth. It was business which was closed to them previously, and which after a start had been made by my predecessor I have opened to them to the fullest extent possible. I cannot help repeating, and repeating again, that they did welcome it when it came out, and it has been of assistance to them since.
The noble Lord actually said that the whole associate agreement, or my approach to it, was another proof that I was mistaken in saying that the charter business was incidental to the work of the Corporations. Although I know how acute minded he and the noble Viscount are, I noticed in both their speeches a complete confusion on this point. They talked as though associate agreements had some-thing to do with charter business. The associate agreements: are given for scheduled services and therefore cannot have anything to do with the suggestion that the noble Lord has made that the Corporations are muscling in on the charter business. It is something completely different, and I venture to suggest that when he reads his remarks in the Official Report on that point he will wish to redraft them—and if he does correct his remarks I shall not object in any-way at all.
We are told that the: charter companies are disappearing. It is not easy to get the facts, as I think noble Lords are aware. The best figures I can give the House—I give them with great reserve because there

819
are all sorts of different people who per-haps do not come very much into our review this afternoon, certainly when we are talking from the standpoint of defence —are that before the war there were fifty-three private companies, that after the war there was a considerable increase in the charter business (possibly under the inspiring influence of the noble Lord, Lord Winster) and on January 1, 1948, 105 charter companies were known to be operating. The number now is 146. Taking the numbers operating large or medium-sized aircraft, there were thirty-eight in 1948 and there are thirty-four now, so that in that section there is a slight decrease; but there is nothing very much in it on any figures available. I do not want to rest too much on the fact that the numbers do not point to any general disappearance or any all round decline in charter companies. I merely lay it before the House as a fact, to the best of my belief. I realise the anxiety, but I do not accept the suggestion that charter companies are disappearing while we are talking here.
My Lords, I have many faults, but one I do not possess is the fault of not listening to what your Lordships say. I have paid a great deal of attention to the arguments that have been advanced by the noble Viscount, and also by the noble Marquess in a series of interventions, and by the noble Lord, Lord Balfour, regarding a certain type of case which I mentioned had emerged since the Act was drafted. I think I can put the position with absolute frankness. If it does appear that a loophole has been discovered in the Act there may be three courses open to us: one is to test it in the courts; another is to bring forward new legislation; and the third is to go ahead and in a particular place compete according to the laws of the land. Those are three courses; there may be others. I lay that before the House with absolute frankness, because I want to make it plain that various perfectly honourable but ingenious gentlemen have naturally exerted themselves to the best of their ability to see whether there is any way of running regular services avail-able to large sections of the community without infringing the Act. That is the simple point, and I say nothing more about it except to repeat that I shall think very carefully and very long over what
820
has been said on that subject in this debate this afternoon.
May I turn back for a moment to one or two other points? The noble Lord, Lord Strabolgi, argued forcibly against the petrol tax. On that matter, of course, my lips must be sealed. It is not for me to comment on the dispensations of the Chancellor of the Exchequer, but no doubt what the noble Lord has said will be studied in the proper quarters. I do not find it in my heart to denounce him, at any rate, for mentioning the point this afternoon.
VISCOUNT SWINTON: That is deviation.
LORD PAKENHAM: I do not know whether it is a Left wing or a Right wing deviation, but at any rate I feel that the noble Lord has shot an arrow which may land in some helpful spot, but none of us can say.
The noble Lord, Lord Montagu of Beaulieu, was full of very interesting ideas. I ventured to correct him on his suggestion that 109 associate applications had been put in this year as against 230 last year. I am told that up to this point in the year the figures are about the same as they were last time—that is putting it broadly. So he seems to be bringing in some later figures for last year. I am told there is not very much in it up to the present time; and, of course, this year there is no doubt at all—though I have not finally ratified the recommendations of the noble Lord, Lord Terrington, and his friends—that, unlike last year, there will be a number of five-year agreements granted, as I feel everyone would wish. The noble Lord, Lord Montagu of Beaulieu, suggested a round table conference. My door is always open to charter companies. I have never shown myself reluctant to see them. Some of them have been to see me, and I have visited one of them. So far as I am concerned I am ready for talks with any-body at any time. But perhaps if the noble Lord wishes to develop that thought a little more fully he will discuss it with me afterwards. I am not quite aware how it would serve a particular purpose at the moment.
There was one detailed point that the noble Viscount put to me, and I have sought the information. He asked about

821
the Stratocruiser service for the contract for carriage of families to the Middle East. This contract was placed by the Air Ministry, and it was awarded to B.O.A.C. after perfectly fair competition. The noble Viscount asked whether, if the Stratocruisers were being used for this kind of service, it was not a proof that they had been obtained, as one might say, for false purposes. The answer which will perhaps occur to the noble Viscount is that the frequency of the Stratocruiser service across the North Atlantic is reduced in the winter and the aircraft are therefore available for a job of that kind. That I should take as a rather good example of what is known as incidental business. Remembering the sums invested in the Corporations and the money spent on buying these aircraft, I do not think that anybody here could seriously think that the Corporations ought to lay the aircraft up for the winter and not try and use them on other work. Their use in this way would seem to me an eminently sensible and reasonable use of the nation's money. I was not aware of all the details and I am glad now to be able to inform the noble Viscount.
My Lords, I hope that in spite of any friendly acrimony—if the phrase is not a contradiction in terms—the general impression left will be one of the conviction of the Government that the principal or the important charter companies could be of real assistance as a war potential. In these times that should certainly be in the minds of all of us. But when people talk about our need to build up a merchant marine in the air, it seems to me rather unfair in that connection to forget the Corporations. After all, the Corporations have for the most part four-engined aircraft, and if we are building a reserve potential and thinking of a merchant marine in the air we need not entirely neglect the possibilities that the Corporations themselves offer. The noble Viscount asked me in terms whether when it came to air trooping the matter would be considered. I think it was in his mind to ask whether that would be considered in conjunction with the Service Departments.
VISCOUNT SWINTON: I asked whether the independent operators would be in-vited to tender.
LORD PAKENHAM: The whole matter is under consideration but I should
822
be very much surprised if the answer to that particular question were, in the ultimate event, unsatisfactory to the noble Viscount. I am perfectly ready to give way to any noble Lord who feels that certain points that have been raised have not been answered.
LORD STRABOLGI: I should like to ask the noble Lord whether any consideration can be given to he proposal to pay a modest annual sum for aeroplanes to be kept at the disposal of the Government in case of emergency.
LORD PAKENHAM: I certainly will consider any scheme that the noble Lord has in mind. I am not quite sure to what he refers. Does he mean V.I.P. planes?
LORD STRABOLGI: No. I mean some sort of scheme like that which existed under the War Office, who paid an annual subsidy for heavy commercial vehicles to be kept ready for mobilisation. I am suggesting the same sort of scheme for aeroplanes, which should be kept in a certain state of airworthiness and placed at the disposal of the Government in the event of an emergency
LORD PAKENHAM: I will, of course, consider any scheme put forward by the noble Lord, but at the moment there is some danger of surplus aircraft from the commercial standpoint. Therefore, I do not think we need be too much worried about this matter at this particular moment of time. I conclude by saying to noble Lords that we all want the same thing. We want to see air transport succeed. There may be—in fact there are —some differences of opinion as to the precise place of the charter operators. I wish them well. I hope I can say that without being accused of sanctimonious-ness or, alternatively, some months later of having failed to honour these words. I wish them well. I hope that fortune will be kind to them and all I hope, still more prayerfully, is that we shall not need them in the particular way present to the minds of so many of your Lordships this afternoon.
5.22 p.m.
VISCOUNT SWINTON: My Lords, we are much obliged to the noble Lord, Lord Pakenham, for having spoken so fully and having answered immediately, which has made the debate much more vital and

823
informative than it would otherwise have been. The noble Lord began, as is quite fair in debate, by an incursion into my lurid past. I will stand by my past, but I am always prepared to learn. The day on which one should get the sack is the day when one thinks one knows every-thing.
LORD PAKENHAM: As the noble Viscount accuses me of the zeal of the convert, I hope he will not suffer from that particular vice, in view of his new-found knowledge.
VISCOUNT SWINTON: I hope that I shall apply it wisely and discreetly, but I have refreshed my memory now from the book. I find that I was right and, with great respect, the noble Lord was wrong. I said that under the National Government plans the services which were to be put into the Schedule to the Act were those to be operated at once (subject to there being a few services which the Corporations were prevented from operating be-cause the war was still on—for instance, the services into Germany which Trans-port Command had to operate for the time being). Those, and those alone, were the services which would be the monopoly of the Corporations, and all future services which would develop would be open to whoever would discharge them best. Let me have on record this extract from the White Paper (Cmd. 6605):
"In the future, as air traffic develops, the need for new routes will emerge. It is not intended to make any present commitment as to the right to operate new routes. The Government consider that any new routes should be left open to whatever operator—whether one of the main Corporations or some entirely new operator—can establish that he is best fitted to run them."
Therefore, new routes were left completely open. I think—I am not sure about this; it was stated certainly in debate—that the decision as to how those subsequent routes should go was to be made by a licensing authority or the tribunal which was to be set up. That is only to verify the past.
LORD PAKENHAM: On that point, I do not wish to interrupt the noble Viscount unnecessarily. I am not for a moment trying to dispute the noble Viscount in a recollection of his past, but I will not accept it that I am wrong. I put that on record. I have the opinions
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of, and a great deal of advice from, those who were concerned with it at that time.
VISCOUNT SWINTON: Never make a mistake in your logic; the facts remain at your disposal. I am founding myself upon the White Paper—
LORD PAKENHAM: So am I.
VISCOUNT SWINTON: —which I, on behalf of the Government, presented to Parliament. For all the ingenuity of the noble Lord and his advisers—and I have never seen a more ingenious lot of people —I do not know how those words can bear any other possible interpretation than that which I have given them. At all events, that was what the Government meant at the time. I was a member of the Government and my noble friend was not. It was I who wrote the White Paper, and he did not. I presented it to the Cabinet and he did not. Perhaps if we could have an exegesis I may be regarded as something of a contemporary authority, not only on what was said but on what was meant.
Then there is the point about the fares which the charter companies must charge. The noble Lord said that that was governed by I.A.T.A.—which is an inter-national organisation of some kind. Surely he is wrong in that. Surely I.A.T.A., laying down the fares which are to be charged, applies only to the international routes, where a number of international companies all run airlines along the same route—for instance, between here and America or South America—and it does not apply to the internal services.
LORD PAKENHAM: I did not say it did.
VISCOUNT SWINTON: Then, with great respect, the introduction of I.A.T.A. was rather a red herring, because the great bulk of nearly all these associate services are not services along competing international foreign routes; they are internal services in this country or to our internal dependencies—the Channel Islands and the Isle of Man. Upon reflection, the noble Lord will see that the I.A.T.A. argument is not a very sound one.
LORD PAKENHAM: I was not altogether free from a certain amount of hustling myself, and for a time I had the

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greatest difficulty in securing the attention of the noble Viscount during my prolonged remarks. If he will study my observations in the Official Report, the noble Viscount will see that I used the I.A.T.A. argument for a different purpose —to show that, in spite of the monopoly, we have not high rates and fares because we had this international competition, and in any case the fares were fixed by I.A.T.A. I was not dealing with the point mads by the noble Viscount. If I could have gained his attention a few minutes earlier, all would have been well.
VISCOUNT SWINTON: I apologise to the noble Lord. At that very moment, I was being asked by my noble Leader to try to explain what the noble Lord had just said! It is very difficult to play this sort of three-handed Canasta. One other point which has loomed large, but not too large, in the debate, is: When is a scheduled service not a scheduled ser-vice? It seems to me to be perfectly clear what the law is—I will not say what the interpretation of the law is. The Act of Parliament lays down and defines what is a scheduled service, and anything which is not a scheduled service within the definition laid down in the Act which Parliament has passed is obviously a charter service, for which independent operators are entitled to tender. If there is a dispute, and it is alleged that there is some service—I forget what it was called—
LORD PAKENHAM: Repetitive service.
VISCOUNT SWINTON: —a repetitive service which the noble Lord and his Corporations contend ought to be their monopoly, but which the charter people say ought not to be their monopoly, it can be simply tested in a court of law. But what I understand—I do not at all want to misrepresent the noble Lord—is that he does not now propose to take that course; presumably he is not going to challenge because he does not think he would be successful if he went to a court of law.
LORD PAKENHAM: I have not said so.
VISCOUNT SWINTON: I know the noble Lord has not said so, but he is a pretty good fighter, and the noble Lord, Lord Douglas, fights like a tiger for his
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Corporation. If he could find even a sporting chance of winning in a court of law, I am sure he would not hesitate to go there to justify himself.
LORD PAKENHAM: May I just make one further point? Suppose that a particular type of service emerged—if you like, we will call it a borderline case, because this Act, in which I am bound to say I had no part, is not in all respects quite so clear as the noble Viscount imagines, in spite of the part he played in helping it through. But if we found a borderline case, and if a charter company were allowed to continue in that situation, the service that the charter company would run in that particular case would not be the kind of service that my colleagues had in mind when they made these remarks in Parliament. Their remarks in Parliament: were pledges about a charter service as they understood it. Now a new type of service has raised its head, a type of service which they had not in their minds and which no noble Lord in the House had in mind when those pledges were given.
VISCOUNT SWINTON: Either a service is within the Act, or it is not. If it is alleged that it can be Drought within the Act, the law courts would decide. If it is not, and the noble Lord wishes to treat the service as if it were within the Act, then the proper course is for him to come to Parliament and say "I want the Act amended"; then we could discuss it on its merits. Now what he is going to do is not to contest it in the courts, because presumably he does not think he would be successful—and, of course, he is quite right not to bring an action which might not succeed. But he says: "I shall encourage my Corporations to go in and compete and get these charters if they can." I want to ask the noble Lord a specific question. Until he has established in a court of law that these are scheduled services, forbidden to the charter companies, then the charier companies are entitled to undertake them; and the charter companies ought to do so on at. least equal terms with his Corporations. Is that going to be so in the spirit, as well as in the letter? In tendering, are overheads going to be properly made out?
There was the case of a Stratocruiser taking airmen or airwomen to Cairo. As I understand it, B.O.AC, were enabled to

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give a special quotation for those Stratocruiser flights because they were able, having got their Stratocruiser to Cairo, to offer to bring back from Cairo any member of the public who wanted to make the return journey. Of course, you do not have to return empty but can get a load, and unless you manage your business very badly you can give a lower quotation than the man who has to return empty, unless he is lucky enough to get a charter back. The charter companies cannot do that because they cannot offer themselves to the general public. They would be running a scheduled ser-vice. It seems to me that it would be grossly unfair for the subsidised national Corporations on a charter tender to use their privileges and their privileged position under the Act. That would not be competition on a fair basis. If the noble Lord cannot answer now we will return to this matter at a later stage, by Question
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and Answer. I am sure he wants to do the fair thing, but in the opinion of the House, as I sensed it during the earlier part of the debate and again now, I do not think he would be regarded by the House as treating the charter companies fairly unless he were able to give and to implement such an undertaking.
My Lords, I add only that I am glad to find that it is common ground that these companies are very valuable in defence. But the landscape does not get brighter, and they can be of value in defence only if they have enough business to carry on. I hope that that will be fully remembered and weighed in the balance when their fate is at stake. My Lords, I am much obliged to your Lordships for hearing me again. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.
House adjourned at twenty-four minutes before six o'clock.