Sitting of 11 February 1954

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

  DEATH OF A MEMBER
  Mr. Speaker made the following communication to the House:
  I regret to have to inform the House of the death of Alexander Anderson, Esquire, Member for Motherwell, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.

ORAL ANSWERS TO QUESTIONS
  TRADE AND COMMERCE

    Inflammable Materials (Labelling)
    Miss Burtonasked the President of the Board of Trade whether he will ask the British Standards Institution to recommend to the manufacturers concerned that all highly-inflammable materials, particularly those used for children's wear, should be appropriately labelled.
    The President of the Board of Trade (Mr. Peter Thorneycroft): It would not be appropriate for me to make such a request to the British Standards Institution; nor, I think, would the Institution find it easy by the means open to them to achieve the object that the hon. Member has in mind.
    Miss Burton: While agreeing with the right hon. Gentleman that it would not be easy to bring this about, may I ask whether he would consider means of making this danger a little better known to the public, because we have read lately of a great many children who have been burnt because their clothing had caught fire?
    Mr. Thorneycroft: A great many textile materials are inflammable, but it is quite impossible to start labelling them as such.

    Manufactured Goods (Standard)
    Miss Burtonasked the President of the Board of Trade whether he is aware that, while reputable manufacturers adopt high quality standards these are entirely voluntary and that there is nothing to compel bad firms to take any notice or to protect good manufacturers from unfair competition; that this countrylags behind others in such protection both for the manufacturer and the consumer; and if he will, therefore, set up a committee to study the matter and to make recommendations.
    Mr. P. Thorneycroft: We can best rely on the responsibility of manufacturers in general, and on the good sense of the public in exercising free choice in a competitive market, to maintain quality. I do not consider, therefore, that a committee is needed to study the matter.
    Miss Burton: Is the right hon. Gentleman aware that we cannot rely upon people's good sense in this matter, because they do not know what standard the goods are until they buy them, and, secondly, that many manufacturers are producing goods which are not worth buying? Would he not look at this matter again?
    Mr. Thorneycroft: There is rather a difference of approach between the hon. Lady and myself on this matter.

    Textiles and Furniture (Kite Mark)
    Miss Burtonasked the President of the Board of Trade whether he has any information to give to hon. Members with regard to the marking of rayon, cotton and woollen goods with the Kite Mark guarantee of quality which, almost two years ago, he assured the House would be done as a form of assurance to the public.
    Mr. P. Thorneycroft: I have at no time given an assurance that the Kite Mark would be applied to textiles. As I have made clear on many previous occasions,

    1335
    both the adoption of standards and the use of certification marks must remain voluntary.
    Miss Burton: Is it not within the recollection of the House that the right hon. Gentleman gave an assurance, on behalf of the rayon industry, that goods reaching this standard would be so marked?
    Mr. Thorneycroft: I gave an answer to the hon. Lady on the question of rayon goods some months ago.
    Miss Burton: On a point of order. Has the House no redress at all when a Minister gives a guarantee and does not carry it out?
    Mr. Thorneycroft: I gave no guarantee at any time that I would compel any industry to apply any mark.
    Mr. Albuasked the President of the Board of Trade if he is satisfied that furniture manufacturers are giving full support to the B.S.I. certification mark scheme based on the performance tests worked out by the Furniture Development Council.
    Mr. P. Thorneycroft: The support given to this scheme has varied as between the different types of goods, but I hope that an increasing number of manufacturers will ask for licences to apply the Kite Mark to their furniture as time goes on.
    Mr. Albu: In view of the categorical assurance given the House by the Parliamentary Secretary, when the Utility Scheme was abolished last year, that he would keep in close touch with the situation, has the right hon. Gentleman's attention been drawn to the anxieties expressed by the furniture trade operatives' trade unions on this matter?
    Mr. Thorneycroft: Yes, and I shall keep in touch with the situation.

    Exports to Argentina
    Mr. Osborneasked the President of the Board of Trade if he will now make a further statement as to how far the Argentine Government have fulfilled their promise to import £3 million worth of consumer goods from the United Kingdom; and to what trades chiefly these orders have gone.
    Mr. P. Thorneycroft: A statement furnished by the Argentine Government shows import authorisations to a value of nearly £3·3 million for goods listed in the exchange of notes of last April. The goods include diesel chassis for buses, spares for motor vehicles, office machinery, gramophone record blanks and materials and gramophone equipment, musical instruments, hand tools and cotton thread.
    Mr. Osborne: How many of these licences have really become orders? If they have not become orders, have we any hope that the Argentine Government will fulfil their promises under the last Agreement?
    Mr. Thorneycroft: The promise of the Argentine Government was to issue these licences, and I have no reason to think that they will not be taken up.
    Mr. H. Wilson: Would the right hon. Gentleman study the very violent criticisms made by Members of his party during the previous debate on the Argentine Agreement—I think it was on 3rd July, 1951—and consider how far those criticisms apply with even greater strength to the Agreement which the right hon. Gentleman has just made?
    Mr. Thorneycroft: I will consider all criticisms, violent or otherwise, but these licences have, in fact, been issued.

    British Films
    Mr. Swinglerasked the President of the Board of Trade the number of prosecutions against film quota defaulters as a percentage of the number of defaults in each of the years 1950, 1951, 1952 and 1953.
    Mr. P. Thorneycroft: For the quota year October, 1949, to September, 1950, no proceedings were instituted. For the 1950–51 quota year, prosecutions were 1·29 per cent. and 0·42 per cent. of the total number of theatres which failed to achieve the prescribed quota for first features and supporting programmes respectively. For the 1951–52 quota year, proceedings will be instituted shortly in a number of appropriate cases of failure to achieve the prescribed quotas. As regards the 1952–53 quota year, I would refer the hon. Member to the answer given to the hon. Member for Aston (Mr. Wyatt) on 28th January.
    Mr. Swingler: Would the Minister not agree that these figures are fantastically small? Is he not aware that, in the opinion of many people, this system has become almost farcical because the degree of enforcement is so small that it brings the system into disrepute?
    Mr. Thorneycroft: I think the hon. Gentleman falls into the error of assuming that if a cinema fails to achieve the quota it is thereby necessarily committing an offence.
    Mr. Wyattasked the President of the Board of Trade why the news films, "A Queen is Crowned," and "Elizabeth is Queen," were allowed to be registered under the Films Act, 1948, although they consisted mainly of newsreel material and did not employ professional actors or actresses.
    Mr. P. Thorneycroft: As the right hon. Member for Leeds, South (Mr. Gaitskell) was informed on 14th July, these two films are films to which the Cinematograph Films Acts apply and were registered as British and as exhibitors' quota films in accordance with the requirements of Sections 25 and 26 of the Cinematograph Films Act, 1938.
    Mr. Wyatt: Can the President say how that was, when the Films Act specifically says that films which consist wholly or mainly of news should not be registered in this way? As neither actors nor actresses were employed but news reels only, was this not a device by the companies concerned to gain a substantial part of the Eady Fund, which ought to be allotted to independent producers?
    Mr. Thorneycroft: I think that those films contained much more than news.
    Mr. Swinglerasked the President of the Board of Trade his estimates of the numbers of British first-feature films available, or likely to be available, in each of the quota years 1953–54 and 1954–55; and what quota he will fix for the year 1954–55.
    Mr. P. Thorneycroft: As the hon. Member was informed on 24rh February, 1953, the producers did not provide any estimates of the likely production of films for the quota year 1st October, 1953, to 30th September, 1954. I have, however, no reason to suppose the number of films of 6,500 ft. and over to be registered
    1338
    during the current quota year will be less than in the preceding year. For the 1954–55 quota year the producers estimate that there will probably be available about 78 British films which are likely to secure first-feature showing.
    As regards the last part of the Question, I would refer the hon. Member to the reply given to my hon. Friend the Member for Cheadle (Mr. Shepherd) on 5th February.
    Mr. Swingler: As the last figure which the Minister gave showed an increase on the previous year, and as the right hon. Gentleman believes in the quota system and the importance of promoting the British film producing industry, should he not reconsider his decision? Is there not a case for a small increase in the quota next year, when more films will be available?
    Mr. Thorneycroft: The figures for future production are, I think, a little uncertain, but, as far as I can judge, production is running at about the same rate and we have kept the quota at the same rate, also.

    Anti-Trust Legislation
    Mr. E. Fletcherasked the President of the Board of Trade whether he has considered introducing into this country legislation comparable to the anti-trust legislation of the United States of America.
    Mr. P. Thorneycroft: No, Sir.
    Mr. Fletcher: Now that we have had a few years' experience of the working of the Monopolies Commission, with its rather slow procedure, would not the Minister agree that, in many ways, the American system is more efficient in securing the desired objectives?
    Mr. Thorneycroft: I do not think I would agree with that point of view. Both parties have always adopted the empirical approach, which is different from the American type of monopoly legislation. I have recently expanded and strengthened the Commission and I think we should wait and see how it works.
    Mr. Fletcher-Cooke: Is the Minister aware that the enforcement of anti-trust legislation in the United States costs that country millions of dollars a year, and that, however laudable the object, we could not possibly afford that method?
    Mr. Wade: While not necessarily accepting that the American legislation is desirable, may I ask the Minister whether he does not agree that our existing legislation is really quite inadequate to deal with the problem of monopolies and restrictive practices? Can he not promise to consider improved measures?
    Mr. Thorneycroft: I think that the existing legislation is adequate for the purpose for which it is designed. The House will recall that I have recently made a reference on a general practice which is a new departure, and I think we should await that report before decisions are made.

    Monopolies Commission Investigations
    Mr. E. Fletcherasked the President of the Board of Trade what industries are now the subject of investigation by the Monopolies Commission.
    Mr. P. Thorneycroft: Copper semi manufactures; electrical machinery; pneumatic tyres; buildings in Greater London; hard fibre cordage; linoleum; sand and gravel in central Scotland; industrial and medical gases. The Commission is also investigating, under Section 15 of the Monopolies Act, the general effect on the public interest of certain widely prevalent discriminatory practices.
    Mr. Fletcher: Does the President consider that the Commission is now adequately manned to deal expeditiously with all these investigations?
    Mr. Thorneycroft: Yes, Sir.
    Mr. Gibson: Has the President any idea when the report of the inquiry into buildings in Greater London will be available?
    Mr. Thorneycroft: No, Sir.

    Export Credits Guarantee Department (Policy)
    Mr. de Freitasasked the President of the Board of Trade what changes he proposes in the policy of the Export Credits Guarantee Department to make it easier for our firms to compete in the export trade, particularly with German and Italian exporters.
    Mr. P. Thorneycroft: I have no reason to believe that credit insurance institutions anywhere in the world provide a
    1340
    more helpful range of guarantees; but if the hon. Member has in mind some special extension of E.C.G.D. facilities, perhaps he will let me know.

    Commonwealth Trade
    Mr. George Craddockasked the President of the Board of Trade what steps he has taken during 1954 to improve trade between this country and the Commonwealth; and what new agreements have been made since 31st December, 1953.
    Mr. P. Thorneycroft: Fortunately, we do not need to make regular trade agreements with our fellow members of the Commonwealth in order to foster our trade with them. Our Commonwealth trade prospers as a result of our close political and economic ties, the longstanding preferential advantages we give to one another and the regular exchange of views on economic questions between Commonwealth Governments, as, for example, at the recent Sydney Conference.
    Mr. Craddock: Does not the Minister think that that is a very indefinite reply, having regard to the fact that we have just made an agreement with Japan for the inflow of goods throughout the Commonwealth as well as into this country?
    Mr. Thorneycroft: The recent Agreement also provided for the outflow of a lot of goods from the Commonwealth.

    Eastern European Trade
    Mr. Swinglerasked the President of the Board of Trade if he will now arrange for the Minister of State, Board of Trade, to tour the countries of Eastern Europe to explore the possibilities of increasing our trade with that area.
    Mr. P. Thorneycroft: I do not think that such a visit would, at present, really serve the purpose that the hon. Member suggests.
    Mr. Swingler: As Ministers have now expressed themselves on several occasions as being in favour of promoting more East-West trade and trying to increase our exports, why should the Minister of State, Board of Trade, go to South America and not to these other markets, which could be very important to some of our industries?
    Mr. Thorneycroft: While not ruling out the possibility, I just say that at present I do not think that it would be particularly advantageous.
    Mr. Jay: As there are evidently big changes in economic policy going on in Eastern Europe, is not this an opportune moment to extend peaceful trade?
    Mr. Thorneycroft: The question the right hon. Gentleman raises is on a much wider issue. We are fostering, as far as possible, visits of individual businessmen to those countries, with, I think, some success.

    New Industry, Glenrothes
    Mr. Hamiltonasked the President of the Board of Trade whether he is satisfied that the new town of Glenrothes, Fife, is not at present in need of additional light industry; what new steps have been taken in the last 12 months to attract such industry to the town; and whether he will gave an assurance that in no circumstances will Glenrothes be regarded as a dormitory suburb of any neighbouring burgh.
    Mr. P. Thorneycroft: My right hon. Friend the Secretary of State and I are satisfied that there is sufficient factory employment in or near Glenrothes to meet the immediate needs of the non-mining population of the new town. I shall continue to watch the needs of the town, but I have no reason to think that Glenrothes is likely to become a dormitory town.
    Mr. Hamilton: Is the Minister aware that, in a speech made by the Joint Under-Secretary of State in the new town on 14th or 15th January, he suggested that there was no likelihood of any new industry at all being established in a new town within the next six years and that, in the meantime, neighbouring burghs could absorb the surplus labour? Would not the President agree that if these developments occur the whole purpose of the New Towns Act will be nullified?
    Mr. Thorneycroft: It is possible that some people in Glenrothes might work several miles away but, in general, I am watching the situation and, though I do not rule out the possibility of new industry, I am satisfied that there is no real problem at present.

    Home-Grown Apples (Duty)
    Mr. Holtasked the President of the Board of Trade if he will give an assurance that it is the policy of Her Majesty's Government that there shall be no imposition of a duty to protect domestic producers of apples, whilst the total United Kingdom consumption of fresh fruit remains below pre-war level.
    Mr. P. Thorneycroft: No, Sir. I can give no such assurance, but in considering the tariff application which has been submitted by the National Farmers' Unions, the level of supplies available to the domestic market is one of the factors that will, naturally, be taken into account.
    Mr. Holt: Since the consumption of fresh fruit per head is still well below pre-war—65 lbs. compared with 78 lbs.—is it not quite unreasonable, from the point of view of the consumer, that there should be any obstruction to the importation of larger quantities of cheap fresh fruit?
    Mr. Thorneycroft: That is no doubt one of the arguments which will be brought out in the inquiry that takes place.
    Mr. G. Williams: Will the Minister bear in mind that, in the past, apple imports have been subsidised, either directly or indirectly by Governments, and that he has every reason to protect the home market, which I hope he will continue to do.
    Mr. Thorneycroft: These are all relevant factors.

    Imported Machinery (Duty)
    Mr. Holtasked the President of the Board of Trade, with regard to the 918 applications since 11th March, 1952, to import machinery duty-free, if he will now reconsider his policy, give rebates against those applications in cases where machinery has actually been imported, and grant all future applications until the Report of the Machinery Import Duties Committee is presented.
    Mr. P. Thorneycroft: No, Sir.
    Mr. Holt: Is it not quite unreasonable, in view of the attitude of the President of the Board of Trade towards the cotton trade, under the Japanese Agreement, that

    1343
    he should give the industry no assistance in reducing its own costs with regard to machinery?
    Mr. Thorneycroft: The question of the drawback of dues is very complicated and raises a number of issues. I have referred it to a committee which is looking into it and which hopes to report in a few weeks.
    Mr. H. Wilson: Since Parliament, in 1932, laid quite clearly upon the Board of Trade the duty of pronouncing on individual applications, will the President not now agree that the Chancellor's announcement of 11th March, 1952, and his own refusal to grant rebates in all these cases since that date, is a direct and deliberate frustration of the intention of an Act of Parliament?
    Mr. Thorneycroft: No, I would not agree. I think we had better await the report of the committee.

    Private Monopolies (Tariff Protection)
    Mr. Holtasked the President of the Board of Trade the policy of Her Majesty's Government with regard to tariff protection for private monopolies.
    Mr. P. Thorneycroft: It is the policy of Her Majesty's Government to take into account, in considering tariff applications, all relevant factors, including the structure of the industry concerned.
    Mr. Holt: Is the President not aware that although one-seventh of the raw material of the cotton trade now comes from rayon staple fibre, Messrs. Courtaulds are the only producers of rayon staple fibre here and they are protected by a very high tariff of 37½ per cent.? Does he think that this is in the interests of the country?
    Mr. Thorneycroft: The hon. Member asked a very much wider question; that is, the general principle of protecting monopolies. The structure of a particular industry is a factor which must be borne in mind.

    German Celluloid Toys (Value)
    Mr. Edelmanasked the President of the Board of Trade the value of celluloid toys imported from Germany during 1953; and, in view of the danger to children of such inflammable toys, if he will prevent their further importation.
    Mr. P. Thorneycroft: The value of celluloid toys imported from Western Germany in 1953 was £1,486. I could not properly use the powers under which the Board of Trade control imports for the purpose that the hon. Member has in mind, since these powers are for the purpose of safeguarding the balance of payments.
    Mr. Edelman: Despite the laudable object of safeguarding the balance of payments, is it not more worthwhile to save children's lives? Is it not the case that the figure which the Minister has quoted covers a very large number of toys and that parents and chief fire brigade officers are greatly concerned by the fact that children now have access to these very dangerous toys? Will he not consult the Home Secretary and consider what can be done to prevent children getting these most inflammable toys in their hands?
    Mr. Thorneycroft: I am not disinterested in the lives of children, but the hon. Member will realise that the last part of his question is more appropriate for the Home Secretary than for me.
    Mr. Edelman: But will the right hon. Gentleman undertake to consult the Home Secretary, as this is a matter which lies within their joint province?
    Mr. Thorneycroft: Perhaps the hon. Member will put down a Question to the Home Secretary.

    Exports to China (Banned Goods)
    Mr. Warbeyasked the President of the Board of Trade whether rubber and rubberised piece goods, aeroplane cloth and balloon cloth are still on the list of goods banned for export to China.
    Mr. P. Thorneycroft: The embargo on certain exports to China applies to none of these goods. Raw rubber is, however, subject to the embargo.
    Mr. Warbey: Can the right hon. Gentleman say when these goods were removed from the banned list? Is he aware that Japan removed these goods from her banned list on 15th January? On this occasion did he manage to beat the Japanese, or did he, as usual, lag behind?
    Mr. Thorneycroft: None of these goods has ever been on our list.

    Industrial Estate Companies (Assets)
    Mr. Willeyasked the President of the Board of Trade the book value at the latest available date of the fixed assets, land, buildings, and other installations given separately, administered by the industrial estate companies and given separately for each of the Development Areas.
    Mr. P. Thorneycroft: The hon. Member will no doubt have seen the accounts relating to services in Development Areas, published in Volume II of Trading Accounts and Balance Sheets 1952–53 (Cmd. 22–1). With permission, I will

    BOOK VALUE AT 31ST MARCH, 1953, OF FIXED ASSETS OWNED BY THE BOARD OF TRADE IN THE DEVELOPMENT AREAS AND ADMINISTERED BY THE INDUSTRIAL ESTATE COMPANIES

    —

    Scotland

    North-East

    Walesand Monmouthshire

    West Cumberland

    North-West

    Total

    £

    £

    £

    £

    £

    £

    Land

    …

    …

    308,430

    562,826

    359,370

    12,628

    71,410

    1,314,664

    Buildings

    …

    …

    18,557,628

    13,598,513

    13,533,771

    456,769

    2,313,291

    48,459,972

    Other Installations, etc.

    …

    86,798

    57,062

    101,366

    —

    3,230

    248,456

    Total—Fixed Assets

    18,952,856

    14,218,401

    13,994,507

    469,397

    2,387,931

    50,023,092

    NOTE.—In addition to the above the estate companies in Wales and West Cumberland own and administer fixed assets valued at £2,700,776 and £1,011,867 respectively at 31st March, 1953.

    Factory, Sunderland (Employment)
    Mr. Willeyasked the President of the Board of Trade what progress has now been made in providing employment at the Sunderland factory formerly occupied by Messrs. Price.
    Mr. P. Thorneycroft: There is nothing which I can at present add to my reply to the hon. Member's Question on 21st January.
    Mr. Willey: Is the right hon. Gentleman aware that people in Sunderland are becoming increasingly disturbed at this factory remaining vacant? Will he not discuss with the firm the question of their right of assignment under the lease? We should feel more satisfied if the trading company and the right hon. Gentleman had a direct responsibility for finding a tenant for the factory.
    Mr. Thorneycroft: I should be quite happy to discuss the matter with the firm, and even more happy to discuss it with the hon. Member.
    1346
    circulate in the Official Report an analysis, company by company, of the figures given there for fixed assets.
    Mr. Willey: I await those figures, but is the right hon. Gentleman—who has examined the figures—satisfied that there is yet a reasonable relationship between the numbers employed in these factories and the amount of capital which has been invested in them?
    Mr. Thorneycroft: Perhaps the hon. Member will look at the figures. We can then include this matter in our discussions.
    Following are the figures:

    British Columbian Goods
    Commander Donaldsonasked the President of the Board of Trade if he will meet the representatives of the timber trade, the salmon packers and the fruit growers when he visits British Columbia following his opening of the Canadian International Trade Fair later this year.
    Mr. P. Thorneycroft: I have not yet settled the details of my itinerary, but I intend to spend at least two days in British Columbia, and I certainly expect to meet representatives of these important industries.
    Commander Donaldson: I thank my right hon. Friend for that answer, but will he bear in mind that there is a traditional trade between this country and British Columbia which has extended back to the time when it was a Crown Colony?
    Mr. H. Wilson: I welcome the President's decision to visit Canada and British Columbia, and I offer him my

    1347
    good wishes for a successful trip—I assure him that any representative of this country will get the warmest possible welcome from the people of British Columbia—but will he also take some time off to visit industrial centres in this country, including Manchester?
    Commander Donaldsonasked the President of the Board of Trade, in view of the large orders placed in Britain for underwater electric cable to be laid from Vancouver Island to the mainland of British Columbia, what goods have been, or are about to be, purchased from British Columbia in 1954; and what is the £1 sterling equivalent in Canadian dollars.
    Mr. P. Thorneycroft: I am very glad that a British firm has been awarded this important contract. Although we do not try to link particular purchases with particular sales, contracts of this kind, whether secured in British Columbia or in other parts of Canada, help us to finance our purchases from British Columbia, which are, in fact, immensely larger than her purchases from us.
    Commander Donaldson: Is my right hon. Friend aware that there are still other possibilities for trade between this country and British Columbia? Will he consider the possibility of consulting the Agent-General for British Columbia, with that fact in mind, before he leaves on his Canadian tour?
    Mr. Thorneycroft: Yes, Sir.

    Canadian Barley (Cost)
    Lieut.-Colonel Liptonasked the President of the Board of Trade how much Canadian barley was imported in 1952 and 1953, respectively; and its cost.
    Mr. P. Thorneycroft: Forty-six thousand tons of barley were imported from Canada in 1952, and 560,000 tons in 1953. The c.i.f. value was £1·4 million in 1952 and £14·3 million in 1953.
    Lieut.-Colonel Lipton: Is the Minister aware that this unnecessary increase of more than ten times the 1952 figures exceeds the total value of motor car exports to Canada, and is making it impossible for the Minister of Food to get rid of 1 million tons of this year's British barley harvest, except at a heavy loss? What is
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    the good of asking the British motor trade to go all out for dollars and the farmers to grow more barley when we have this unco-ordinated insanity in Whitehall?
    Mr. Stokes: How much of the 1953 imports went for the distillation of whisky?
    Mr. Thorneycroft: I could not give an accurate answer without notice.
    Mr. Stokes: If I put down a Question, could the Minister give me an accurate answer?
    Mr. Thorneycroft: I wonder what the right hon. Gentleman means by "accurate." I can say that a great deal of whisky was made from home-grown barley.
    Mr. Deedes: Can my right hon. Friend tell the House what proportion of the total figures for 1953 he was advised, from all quarters, to import prior to decontrol in order to avoid rising prices?
    Mr. Thorneycroft: I cannot give the figure, but the position is that purchasers in this country are free to buy the barley where they wish. On this occasion more barley was bought from Canada and rather less from the Soviet Union. That was the choice of the purchasers themselves. It depends on what barley is offered and at what price.
    Mr. Jay: Can the President say whether these imports are one cause of the extraordinary miscalculations of the Ministry of Food—as shown in the Supplementary Estimates published today—which have gone so far to dislocate the Chancellor's Budget?
    Mr. Thorneycroft: Any supplementary questions on the Estimates of the Ministry of Food should properly be addressed to my right hon. and gallant Friend.

    Imported Wheat (Duty)
    Lieut.-Colonel Liptonasked the President of the Board of Trade whether, in order to encourage the greatest possible volume of trade within the Commonwealth generally and the purchase of Australian wheat in particular, he will consider the advisability of an import duty on foreign wheat.
    Mr. P. Thorneycroft: No, Sir. Even if such a duty were otherwise desirable, we have undertaken to maintain entry

    1349
    free of duty for foreign wheat. Moreover, our commitments under the General Agreement on Tariffs and Trade not to create new margins of preference would preclude such action. Imports of wheat from the Commonwealth are, of course, free of duty.
    Lieut.-Colonel Upton: Is the Minister aware that we are importing as much wheat from the United States of America as we are from Australia, whom we urged to grow more wheat to help us to avoid an adverse dollar balance? Is it not the policy of Her Majesty's Government to see that
    "…the Empire producer will have a place in the home market second only to the home producer"—
    "Britain Strong and Free," page 12.
    Mr. Thorneycroft: I am glad to see that the hon. and gallant Member is a student of serious politics. At the same time, he should consider whether this constant pressure to put duties on foreign feedingstuffs is really the way to bring down the cost of living.

    Anglo-U.S.S.R. Trade
    Mr. Wyattasked the President of the Board of Trade what assistance he will give to British business-men in investigating the possibilities of the increased trade with the Union of Soviet Socialist Republics officially proposed by Mr. Ivan Kabanov, the Soviet Foreign Trade Minister.
    Mr. P. Thorneycroft: My Department was in close touch with the group of business men who have been visiting Moscow, before they left, and I shall be interested to learn, on their return, what they have to say and to give all possible advice and guidance.
    Mr. Wyatt: Will the President bear in mind that it is of the utmost importancethat we should have the fullest publicity about the offer, together with a complete analysis by the Board of Trade, so that we may clearly distinguish between how much of it is intended as mere propaganda and how much as a serious proposal to trade, and so that there will be no doubt in the public mind that we are not turning down any serious offer of trade with Russia or overlooking the possibility of propaganda?
    Mr. Thorneycroft: The Government are not turning down or accepting anything. The Board of Trade has given all the help it can to these business men on their visit to Russia, in order that they might do legitimate trade outside the strategic controls.
    Mr. Fernyhough: What were the changed circumstances between November and January? In November the Foreign Secretary condemned the business men who then wanted to make a trip to Moscow. In January the President gave his blessing to a similar party which was seeking to make the trip. Can the right hon. Gentleman say what were the changed circumstances which led to a change of attitude on the part of the Government?
    Mr. Thorneycroft: My right hon. Friend did not condemn the business men, but the organisation which was arranging the visit.

  NATIONAL FINANCE

    Gross National Product (Personal Consumption)
    Mr. Shepherdasked the Chancellor of the Exchequer the percentage of the gross national product taken in home consumption in the years 1950, 1951. 1952 and 1953, respectively.
    The Economic Secretary to the Treasury (Mr. R. Maudling): The percentage of the gross national product taken in personal consumption in each of the years 1950 to 1953 is as follows:

    per cent.

    1950

    68.0

    1951

    66.1

    1952

    64.9

    1953

    63.5

    The figure for 1953 is a provisional estimate.
    Mr. Shepherd: Would my hon. Friend, in his spare time, try to arrive at a determination of the optimum personal consumption out of the total national product?
    Mr. Maudling: I think that the optimum personal consumption is the maximum the nation can afford.

    Convertibility (Trade Losses)
    Mr. Shepherdasked the Chancellor of the Exchequer the loss of trade which he estimates would arise as a result of convertibility from the switching of orders to dollar sources in the sterling area and outside the sterling area, respectively.
    Mr. Maudling: I cannot make such an estimate, and there may be no such loss. It depends on how competitive we are at the time. Already over much of the field we face full competition with dollar suppliers.
    Mr. Shepherd: Does not my hon. Friend think that a calculation of the losses that will be so suffered ought to be made before any decision about convertibility is reached?
    Mr. Maudling: That is certainly a point, but I think the hon. Gentleman is in error in assuming that there will be such losses. Our position vis-a-vis the dollar competitors in the world market has improved greatly as my hon. Friend can see from the recent sterling quotations.
    Lieut.-Colonel Lipton: Is the hon. Gentleman aware that it would help convertibility if we bought less wheat from the United States and more from Australia?
    Mr. Maudling: I am grateful for the hon. and gallant Gentleman's support for convertibility but I cannot agree with his methods.

    Advertising Expenditure (Cost of Living)
    Mr. Mayhewasked the Chancellor of the Exchequer whether he will take budgetary steps to lower the cost of living by discouraging excessive expenditure on advertising.
    Mr. Maudling: I cannot anticipate my right hon. Friend's Budget statement.
    Mr. Mayhew: Does the hon. Gentleman realise how much money is being spent on advertising in this country? Does he realise that this situation will get worse if commercial television comes? Will he tell the House that the Government will start to pay attention to the public interest in these advertising questions?
    Mr. Maudling: I am well aware that statements of that kind are made, but I am also aware that no evidence whatever is furnished to support them.
    Mr. Vane: Would my hon. Friend suggest to the Chancellor that he follow the example of some foreign countries and arrange that advertising material displayed on hoardings should carry a Revenue stamp?
    Mr. Maudling: I am sure my right hon. Friend is always interested in any suggestion for raising revenue.
    Mr. Noel-Baker: Is the Economic Secretary aware that poster advertising has the most adverse effect both on road safety and on the tourist industry?

    London Greyhound Tracks (Betting Duty)
    Wing Commander Bullusasked the Chancellor of the Exchequer how the revenue received from the Pool Betting Duty on the totalisators at the 15 London greyhound tracks compares in aggregate in 1953 with the overall figure for the year 1952.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): The receipts in 1953 from the tracks in question were £141,468 less than in 1952, representing a drop of 4½ per cent.
    Wing Commander Bullus: Is my right hon. Friend aware that this story of diminishing returns is general at race tracks throughout the country and is almost entirely due to the discriminatory nature of the tax? Would he consult the Chancellor and make a sympathetic review for the forthcoming Budget?
    Mr. Boyd-Carpenter: I have given my hon. and gallant Friend the figures. The inferences to be drawn from them are matters for the Budget.
    Mr. Lewis: Why should this particular sport's totalisators suffer a 10 per cent. tax, whereas horse racing and other sports do not? Why should this working-man's sport be taxed in this way, and not the sport of kings?
    Mr. Boyd-Carpenter: If it is suggested that this working-man's sport is attacked by the original imposition of this tax, the hon. Gentleman should address his question elsewhere.

    Gross Earned Incomes (Purchasing Power)
    Mr. John Hallasked the Chancellor of the Exchequer the gross earned incomes required today by a married man with two children to equal, after deduction of tax, the purchasing power of gross earned incomes in 1938 of £2,000 and of £3,000 per annum.
    Mr. Boyd-Carpenter: About £9,900 and £35,500 respectively.

    British Heart Specialists (Dollar Allowance)
    . Mr. Shortasked the Chancellor of the Exchequer on what grounds dollar allowances have been refused to 14 British heart specialists who wish to attend the World Congress in Cardiology in Washington.
    Mr. Maudling: Our dollar expenditure has to be watched very carefully in this as in other fields. I am, however, arranging for this case to be reconsidered.
    Mr. Short: Will the hon. Gentleman bear in mind that the doctors concerned wish to read papers at this conference, and that from the point of view of medical science in this country it is of the utmost importance that the doctors—the very modest number of 35, I think—should be able to go?
    Mr. Maudling: I will bear in mind what the hon. Gentleman says.

    Cost of Living (Price Control)
    . Mr. Lewisasked the Chancellor of the Exchequer if he is aware of the industrial unrest in the country; the growing number of wage claims being made by the trade unions on behalf of their members to compensate for the continuing rise in the price of food; that the Government cannot give an assurance that food prices will not rise further when these are decontrolled and derationed later in the year; that coal, freight and rail fares are due to rise, bringing about a further increase in the cost of all articles and services to the general public; and whether he will make a statement on the Government's plan to control prices, reduce the cost of living and thereby bring about peace in industry.
    Mr. Maudling: The hon. Member has already received very full answers to
    1354
    Questions on these subjects from me on 19th November, and from my hon. Friend the Parliamentary Secretary to the Ministry of Labour on 26th January and 2nd February, and I have nothing to add to these replies.
    Mr. Lewis: They were not answered at all. Is the hon. Gentleman aware that what happened was that the Minister denied the fact that the Minister of Labour confirmed only on Tuesday of this week? I refer him to column 107 of Hansard for 9th February. It is there stated that the cost of living has gone up from 14 per cent. to 29 per cent. since January, 1951. Is it not time that the Government did something to implement their pledge to bring down the cost of living?
    Mr. Maudling: I can only say to the hon. Member that the facts about the cost of living are none the less facts because they are inconvenient to him.

    Staveley Iron and Chemical Company (Directors' Resignations)
    Mr. Bowlesasked the Chancellor of the Exchequer why the Iron and Steel Holding and Realisation Agency pressed for the dismissal or resignation of three directors of the Staveley Iron and Chemical Company.
    Mr. Boyd-Carpenter: The Question would appear to refer to a matter of day-to-day management which would be for the Agency, and about which the Treasury would not normally be informed. I understand, however, that in this case the resignations were tendered on the initiative of the three directors concerned, and that their retirement from the board of the Staveley Iron and Chemical Company was at their own definite wish.
    Mr. Bowles: Is the right hon. Gentleman aware that it says in "The Times" that the resignations were made by arrangement with the Agency, and that it was clearly stated in the "Daily Express" last Monday week that Mr. McKenna was quite able to do without the steel shares and that the Staveley Company was now quite prepared to do without him? Is it not quite clear that if the terms of the offer under denationalisation were not sufficiently attractive, the Agency has power to call for the resignation of these directors?
    Mr. Boyd-Carpenter: The last part of the supplementary question is, of course, quite a different question. The resignation of these gentlemen is as I have stated.
    Mr. G. R. Strauss: Does the right hon. Gentleman mean that there was no dispute or quarrel about the selling of these shares that prompted the resignation of the directors concerned?
    Mr. Boyd-Carpenter: That is, of course, a totally different question.
    Mr. Bowles: No.
    Mr. Jack Jones: Is the right hon. Gentleman aware that it is possible that these three wise men from the North acted in the national interest, rather than in the interests of vested interests, hence the trouble at Staveley?
    Mr. Boyd-Carpenter: I have no doubt that these directors, like a great many other directors, acted in the national interest. I am glad to have that from the hon. Gentleman.

    Food Subsidies (Restoration Cost)
    . Mr. G. Jegerasked the Chancellor of the Exchequer if he will give an estimate of the cost of restoring food subsidies so as to bring food prices down to the level at which they stood in October, 1951.
    Mr. Boyd-Carpenter: In order so to adjust the subsidies as to restore food prices to the level ruling in October, 1951, it would be necessary to raise their cost to between £700 and £800 million a year.
    Mr. Jeger: Is not this £700 million or £800 million the amount which is now being paid directly by consumers out of their own pockets? Does not that show that the cost of living on subsidised foods alone has risen by nearly 8s. a week?
    Mr. Boyd-Carpenter: The hon. Member omits from that calculation the important fact that much more of the foods then subsidised are now being eaten.
    Mr. Godber: Would my right hon. Friend give an estimate of the reduction in quantities of food which would bring us down to the subsistence level of October, 1951?
    Mr. Boyd-Carpenter: If my hon. Friend will put that question down, I will do my best to make the necessarily somewhat complex calculations.

    Commonwealth Economic Co-operation (Permanent Machinery)
    Mr. Grimondasked the Chancellor of the Exchequer how far the creation of some permanent machinery for economic co-operation within the Commonwealth was discussed at the recent meeting at Sydney.
    Mr. Maudling: I would refer the hon. Member to the reply which I gave to the hon. Member for Uxbridge (Mr. Beswick) on 4th February.
    Mr. Grimond: Is there not some machinery for following up the decisions made at the Conference—for instance, those on capital development? If so, what is that machinery? I am not asking for a secretariat, but there must be some machinery.
    Mr. Maudling: I can assure the hon. Gentleman, on this very important point, that there is a highly developed machinery for following up the conclusions of the Commonwealth Conference. The addition of new machinery might obstruct, rather than enhance, the rate of progress.
    Mr. Beswick: If there is such machinery, why did it not discuss the Japanese Trade Agreement? Has it not discussed anything about the surplus wheat in Australia?
    Mr. Maudling: Every relevant matter was discussed. As far as the Japanese Trade Agreement is concerned, I am sure that any discussion would have borne out the decision which the House reached yesterday.
    Mr. Gaitskell: Would the hon. Gentleman not tell us a little more about this machinery? Is there some new committee which has been set up in London or is he referring simply to the Commonwealth Liaison Committee? At what sort of level are the people who attend these committee meetings?
    Mr. Maudling: The Question referred to permanent machinery for economic co operation. I think the right hon. Gentleman is perhaps better aware than anyone

    1357
    in the House that the machinery for economic co-operation between the countries of the sterling area, through the normal channels, is extremely highly developed.
    Mr. Gaitskell: Is the hon. Gentleman aware that I have several times expressed the view that I thought there ought to be more machinery than existed, at any rate, two years ago, and that I have repeatedly asked the Chancellor of the Exchequer and other Treasury Ministers what has been done about this? I am seeking some further information on the point. Will the hon. Gentleman tell me?
    Mr. Maudling: The present Government are more concerned with action than with machinery.

    Road Passenger Vehicles (Oil Fuel Tax)
    Sir H. Williamsasked the Chancellor of the Exchequer whether his attention has been drawn to the proposal of the British Transport Commission to increase the use of diesel-engine locomotives on the railways for the purpose of attracting passenger traffic from road to rail; if he is aware that when diesel fuel oil is used on railways it pays no tax, whereas when used in road vehicles it is charged a duty at the rate of 2s. 6d. a gallon; and what action he is taking to correct this anomaly.
    Mr. Boyd-Carpenter: I am aware that the British Transport Commission has recently announced plans to extend the use of trains running on diesel fuel, partly in substitution for existing steam services. As heavy oils were made dutiable when used as road fuel because they then replace dutiable light oils, and are not dutiable when used for other purposes, their use by British Railways is not, in my view, an anomaly.
    Sir H. Williams: Why should tax be paid on the fuel of a passenger road vehicle when no tax is paid on the fuel of another vehicle, also carrying passengers? Is not that prejudicial to the use of the road?
    Mr. Boyd-Carpenter: Because for many years the duty on heavy diesel oil has been applied only when used on the roads—that is to say, in direct competition, in road use, with petrol.
    Mr. Ernest Davies: Is it not a fact that whereas the road user has his permanent way paid for by the State and the local authorities, the railways have to maintain their own permanent way?

    Teachers' Public Work (Tax Rebate)
    Mr. Grimondasked the Chancellor of the Exchequer if he will allow teachers a rebate of Income Tax for coal, oil or other heating used in their houses in connection with meetings, classes, etc.
    Mr. Boyd-Carpenter: I am not certain what kind of meetings and classes the hon. Member has in mind. If he will send me particulars of any cases in which the point has arisen, I shall be happy to look into them.
    Mr. Grimond: Is the right hon. Gentleman not aware that this is a problem in all rural areas where schoolmasters do a great deal of public work outside their routine teaching work and where they have to heat rooms for classes and meetings of committees, for instance? I will certainly send the right hon. Gentleman some particulars.

    Entrepôt Trade (Dollars)
    Mr. Grimondasked the Chancellor of the Exchequer what are the general principles governing the supply of dollars to such centres of entrepôt trade as Aden and Hong Kong.
    Mr. Maudling: Dollars for entrepôt or merchanting trade in goods to be resold outside the sterling area are provided from official sources only if dollars are being received in payment. In Hong Kong there is also a free exchange market in which residents are able to purchase dollars which are privately held against local currency.
    Mr. Grimond: Does the hon. Gentleman not agree that if Aden were allowed to do greater trade in dollars it might earn considerably more than it does now? Are not such places in danger of losing trade to neighbouring ports outside the sterling area, through being unable to provide dollars?
    Mr. Maudling: We are anxious to expand the entrepôt trade in Aden for dollars against dollars. If the hon.

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    Gentleman has any evidence of difficulties arising, I shall be very glad to examine it.

    Ballet and Opera Companies (Arts Council Grants)
    Miss Wardasked the Chancellor of the Exchequer what money has been made available to the Arts Council for the acquisition of the assets of ballet companies in 1952–53.
    Mr. Boyd-Carpenter: None, Sir.
    Miss Ward: Would I be right in assuming that grants-in-aid are not normally used for the purchase of ballet companies?
    Mr. Boyd-Carpenter: There are exceptions, but normally conditions are not attached to the grant-in-aid.
    Miss Wardasked the Chancellor of the Exchequer the total grants in aid since the setting up of the Arts Council made available to individual ballet companies and opera companies.
    Mr. Boyd-Carpenter: As the answer contains a number of figures, I will, with permission, circulate it in the OFICIAL REPORT.
    Miss Ward: As the International Ballet Company has now been put off the road, will my right hon. Friend bear in mind that I, at any rate, do not think that grants-in-aid should be used for the creation of monopolies for either ballet or opera?
    Mr. Boyd-Carpenter: I will note my hon. Friend's views.
    Mr. Snow: As the Treasury reserves the right to examine and generally scrutinise the annual budget of the Arts Council before it allows the Council to get on with expenditure, can some attention be drawn to the mining and other industrial communities, which never seem to get the services of the Arts Council in providing ballet? I am thinking of the small industrial communities.
    Mr. Boyd-Carpenter: That is largely a matter for the Arts Council, on whom falls the main responsibility of allocating grants. I am sure that it will pay due attention to the point of view which the hon. Member has expressed.
    Following is the information:
    From its incorporation in August, 1946, until the end of the financial year 1952–53 the Arts Council paid out approximately £1,533,700 in grants and guarantees to opera and ballet companies. The details are as follow:

    £

    Ambassadors Ballet

    553

    Ballet Rambert

    18,114

    Carl Rosa

    7,500

    Celtic Ballet

    200

    Covent Garden

    1,063,000

    Cygnet Ballet

    785

    Dancers from Vienna

    621

    Delius Trust

    1,500

    English Opera Group

    27,000

    Glasgow Grand Opera Society

    1,300

    Glyndebourne Productions

    28,000

    Intimate Opera Society

    9,443

    London Opera Club

    1,285

    London Opera Society

    400

    National Operatic & Dramatic Association

    25

    Opera Studios

    4,250

    Sadlers Wells

    334,750

    St. James's Ballet

    9,254

    Spanish Dancers

    2.462

    Welsh National Opera Company

    16,075

    Festival of Britain (Various Productions and Competitions)

    7,229

    In the case of Covent Garden and Sadlers Wells it is not possible to apportion grants as between opera and ballet.

    Equal Pay
    Miss Wardasked the Chancellor of the Exchequer if he will list the classes of women whose employment attracts Treasury funds who now receive equal pay.
    Mr. Boyd-Carpenter: As the answer is inevitably very detailed and complex, I will, with permission, circulate it in the OFFICIAL REPORT.
    Miss Ward: Can my right hon. Friend say why new entrants to joint pricing organisations are denied the right, in their earlier years, to have equal pay, which is now the accepted right of civil servants? Is not the whole matter in a deplorable muddle and ought we not now to start with equal pay, so that everyone may be on equal terms?
    Mr. Boyd-Carpenter: If the hon. Lady can spare the time to read the very full answer which I am circulating, I hope that it will make her much happier.
    Mr. I. O. Thomas: Will the Minister say whether women Cabinet Ministers receive the same salary as men Cabinet Ministers?
    Mr. Boyd-Carpenter: Yes, Sir.
    Following is the answer:
    I assume that my hon. Friend has in mind non-industrial employees. The classes of women who are entitled to receive equal pay, and whose remuneration is borne directly on Votes, are as follow:

    1. Ministers of the Crown.

    2. Members of the House of Commons.

    3. In the Civil Service: Deputy Secretaries, Doctors, Dentists, Medical Auxiliaries, certain Nursing and other Hospital Grades, Factory Inspectors, Grade II.

    4. In the Armed Forces: Doctors, Dentists.

    In addition, there are a number of bodies whose employees are not civil servants but whose expenditure is borne wholly, or almost wholly, on Votes. These include, for example, the British Council, where the practice regarding equal pay is the same as in the Civil Service, and the National Health Service, where the practice is the same as in the local government service.
    A large number of bodies receive grants-in-aid from Votes. The proportion of expenditure represented by the grants-in-aid, and the degree of control exercised by the central Government, vary widely. Control frequently does not extend to the specific salaries paid, and complete information is not available as to the practice of all these bodies regarding equal pay. Other grants are made to local authorities and other local bodies in respect either of their general functions or of specific services. I have no complete information as to the practice of all these authorities.

  DEPARTMENTAL DOCUMENTS (DISCLOSURE)
  Mr. Bellengerasked the Prime Minister what is the traditional procedure relating to the disclosure to Parliament of Departmental documents affecting policy decisions by Ministers or ex-Ministers.
  The Prime Minister (Sir Winston Churchill): So far as I am aware, no procedure has been laid down which fetters the discretion of Ministers as to the exceptional occasions on which it may be necessary to bring to the notice of the House Departmental or other documents. I certainly think that every effort should be made to inform the Member concerned that a certain document is to be brought forward.
  Mr. Bellenger: Does the right hon. Gentleman mean, therefore, that telegrams of the nature recently disclosed to the House by the Secretary of State for War, which must be marked "Top Secret" or something in that category, should be disclosed and used during a
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  debate for purely political or debating purposes?
  The Prime Minister: We have discussed that matter in relation to the actual occurrence. As I said, we were accused of what is a very grave offence—the shameful betrayal of the vital interests of the British soldier. In those circumstances, it certainly was interesting to see that in the past this matter had been discussed on very even conditions without any of these formidable accusations being associated with it in any way. But, as I have said, my right hon. Friend the Secretary of State for War tells me that he wished he had had the time and the opportunity to draw the attention of the right hon. Member for Dundee, West (Mr. Strachey) to it. Certainly, it would have been advantageous because he might have persuaded his neighbour, the hon. Member for Aston (Mr. Wyatt) not to cast the Motion in such a deeply dyed depth of villainy.
  Mr. Strachey: Will the Prime Minister draw to the attention of the Secretary of State for War the statement which he has just made—that the use of these documents should be notified to the Member concerned on the other side of the House?
  Mr. H. Morrison: Having made some advance on the previous situation, which I appreciate, will the Prime Minister accept the view that if there are to be practices or traditions or rules about this matter there cannot be one rule for him in these combats and another rule for his opponents? It is therefore wise, I always think, for a Minister to recall that what he does may be used against him in the future. No doubt the Prime Minister is keeping that in mind.
  The Prime Minister: I am certainly very content with the treatment which was meted out to me during seven or eight long years of opposition. I am not aware of having departed in any way from the general method of conducting our affairs which was maintained by the party opposite. I earnestly hope that nothing we shall do in our tenure will lead us to fall below the standard which was set.
  Mr. Morrison: But does not the Prune Minister recognise that in respect of the

  1363
  earlier incident both tie and the Secretary of State for War have been a little bit naughty, judging by previous traditions of Governments?
  The Prime Minister: No. I think the matter is very well grasped by the House and set in its proper poise and balance.

  CABINET PAPERS (ACCESS)
  Mr. Bellengerasked the Prime Minister whether he will define the rule governing the access to Departmental or Cabinet papers by former Ministers of the Crown.
  The Prime Minister: So much general agreement was expressed on Tuesday that there is little for me to add. The rule is that a former Minister may refresh his memory of any Cabinet documents which were issued to him while in office.
  Mr. H. Morrison: Or Departmental papers?
  The Prime Minister: There is no fixed rule about Departmental documents, but, especially where the matter enters the field of political controversy, it would certainly be usual to give similar facilities in regard to Departmental documents seen by a Minister or used by him during his period of office. I may say that should any disagreement occur at any time on a Departmental issue the Prime Minister of the day, who is in charge of the Administration, should certainly be appealed to.
  Mr. Bellenger: I thank the right hon. Gentleman for that answer, but is he not aware that my right hon. Friend the Member for Easington (Mr. Shinwell) was denied access to a Departmental document by a permanent official? Does he not deprecate that?
  The Prime Minister: I have looked into that in some detail, and I have written to the right hon. Member for Easington (Mr. Shinwell) a very lengthy letter, enclosing a bundle of documents. What happened was that there was a misunderstanding. There is no question that he had a right of access to the document in question, nor was it ever intended to deny it, nor was there any need to do so. So far as I can see it, this document
  1364
  was utterly without significance. Had he said on the telephone, "I wish to see the document" and requested to see it, he would have been invited to come and see it at the earliest possible convenience.
  Mr. Morrison: What did he say on the telephone?
  The Prime Minister: I do not know what the said; but it was a bona fide misunderstanding. They told him there was nothing in the document, and they thought he did not insist on any sudden appointment being made to see it. I might explain that it is not customary to circulate a document. Access is given at the office, because when we are in private life we may not all have facilities for keeping documents. I think that this is much the best way to do it. But he had an absolute right to see that document and it was not intended in any way to challenge that right.
  Mr. Morrison: I am much obliged to the right hon. Gentleman for that assurance which, I think, now puts us right. I would only ask him whether he does not recall that in the long years in which he was Minister, and in the long years in which he was an ex-Minister, he himself has been very active in asserting his right to Departmental documents, and whether he will see that he will at leastgive us the same rights—[Hon. Members: "The Prime Minister said so."]—the same rights as he has most vigorously asserted for himself? If they had been denied to the right hon. Gentleman, I can imagine the fury with which he would have addressed the Government from this Box
  The Prime Minister: I have paid some tribute to the manner in which the party opposite conducted this aspect of our affairs, and, as I said, we have every intention of continuing, as they did, to keep alive the easy tradition that has grown up. Occasions will occur when there will be disputes, like this one, and these will be the ones by which the general tenor of our ways is maintained harmoniously. I beg the right hon. Gentleman the Member for Easington (Mr. Shinwell) to wait until the letter I am sending him reaches him.
  Mr. Shinwell: I am glad to know that the right hon. Gentleman has communicated with me, but I have not yet

  1365
  received the letter. Is not much of what the right hon. Gentleman has said about this telegram business an afterthought? Is not this a discovery made after the event? Is it not true to say, and quite factual, that the Department did not advise me at the time, when I asked for copies of the document, that they would have no significance? They only informed me about that very long afterwards. All that I asked for was a copy of documents which were relevant to the debate. I was told that I could not have copies. There was not even a suggestion that I could have access to a copy of the telegram if I came to the Department. That was never mentioned to me at the time.
  The Prime Minister: In my letter and the enclosure which I am sending to the right hon. Gentleman there is a statement which was made by the persons who answered him at the end of the telephone. I think that one of them was his former private secretary.
  Mr. Shinwell: I am not complaining about that.
  The Prime Minister: They certainly thought that the right hon. Gentleman was satisfied and was not pressing the matter further. Let there be no doubt on the matter of principle. If the right hon. Gentleman wishes to have that document he has the right to have access to it, and if he wishes to do so now he has the right.
  Mr. Bowles: Would it not save a lot of trouble if back benchers also were allowed to see this document?
  The Prime Minister: I think it might make a bad precedent. It certainly would cause no inconvenience if this particular telegram and the Ministerial comment upon it were made available, but I think it would be a bad precedent.

  GENERAL NEGUIB (INVITATION TO LONDON)
  Mr. Wyattasked the Prime Minister whether he will invite General Neguib, President of the Republic of Egypt, to London so that he may discuss with him the outstanding obstacles to an Anglo-Egyptian agreement on the future of the Suez Canal base.
  The Prime Minister: I do not think that the hon. Member's suggestion would be helpful.
  Mr. Wyatt: Is not the Prime Minister aware that General Neguib has himself expressed a wish to come to London and talk with the Prime Minister? Since the Prime Minister is on record as believing in the efficiency of such talks between heads of States in smoothing out difficulties, would it not be consistent with his own declared position to ask General Neguib to come here to settle these comparatively small points face to face, so that these talks do not drag on into complete catastrophe, as they are doing at the moment?
  The Prime Minister: I think that each case has to be judged on its merits, and I do not think that this particular procedure would be helpful.
  Mr. Wyatt: Why?
  The Prime Minister: If I were to explain why, I should have to explain the whole story from beginning to end. I do not think that that procedure would be helpful but if I thought it would be there is no reason, constitutionally or in propriety, why it should not be adopted.

  DURHAM MEN (PROBATION OFFICER'S COMMENT)
  The following Questions stood upon the Order Paper:
  Mr. Grey: To ask the Secretary of State for the Home Department how many persons in the administrative county of Durham appeared before magistrates during the year ended 31st December, 1953, on a charge of inflicting grievous bodily harm upon their wives in consequence of beating them.
  Mr. Grey: To ask the Secretary of State for the Home Department whether he is aware that the probation officer's report regarding John James Cowan, a former Durham miner, stated that he came from a district of Durham where it was a common thing for men to beat their wives and that it was gene rally expected and understood; and whether he will instruct probation officers not to make such general charges in future.
  Mr. Grey: I do not know, Mr. Speaker, whether you are aware that at the Old Bailey last week a very serious statement was made regarding the male population of Durham. During the trial of Mr. John James Cowan, a former Durham miner, it was stated that he came from a district of Durham where it was a common thing for men to beat their wives and that it was generally expected and understood. Of course, this male population includes Members of Parliament from Durham, who, I have no doubt, would never beat their wives, even if they were allowed to do so, but in view of this serious statement I placed on the Order Paper two Questions, which have not been reached.
  In order that we males may defend our principles and in order that we may make people all over the country realise that Durham is as good a market place for the female population as other parts of the country, will you kindly allow the Home Secretary to answer Questions 91 and 92?
  Mr. Speaker: I have received no notice of this. The Home Secretary will answer them, of course, in writing.

  PURCHASE TAX (GOVERNMENT POLICY)
  The Chancellor of the Exchequer (Mr. R. A. Butler): I will, with permission, answer Question No. 52 in the course of this statement.
  I have received a great number of representations from trade associations and from hon. Members that uncertainty about the future level of Purchase Tax is causing, or may cause, interference with normal trade. I have carefully reviewed the situation in the light of the burdens which the Exchequer is at present carrying, and in relation to the various businesses and trades affected by the tax. I was able to make considerable concessions in the last two Budgets. These affected a variety of trades and have resulted in the reduction of all rates by a quarter or in some cases by a good deal more. More recently, in the Purchase Tax Orders which the House approved on Tuesday night, I was able to make some small adjustments and to remedy certain defects in the tax. These Orders were made under powers which, as the House is aware, enable me to alter
  1368
  the Purchase Tax rates at any time of year.
  As for the rest of the field, I have decided that, subject to any unforeseen developments, I shall make no further changes in the Purchase Tax Schedule in or before the Budget. In the light of the representations I have received, I thought it right to announce this decision forthwith. Hon. Members will have opportunities for debating the rates of Purchase Tax in the course of the passage of the Finance Bill.
  Mr. Gaitskell: May I first ask the Chancellor of the Exchequer to elucidate one important point: does he mean that there will be no other change in the Purchase Tax this year, or does he simply mean that there will be no change in individual items but that there might still be changes in the rates of tax?
  Mr. Butler: There are two ambiguities in the right hon. Gentleman's question. His expression "this year" should be interpreted in the light of what I said—either "in or before the Budget." That must be interpreted in the terms of my statement. In regard to the other matter, I mean no change whatever in the Purchase Tax Schedule in or before the Budget.
  Mr. Gaitskell: I presume, therefore, the right hon. Gentleman means that there will be no change in the rates of Purchase Tax which I think come into the Finance Bill and not into the Schedule itself.
  Mr. Butler.
  Mr. Gaitskell: In that case, why did the Chancellor wait so long before making this statement? Surely, he must have been aware that manufacturers and traders have been pressing for a statement to be made as soon as possible after Christmas. Is it not a fact that the other changes were announced either at the beginning of January or the end of December? Why should this statement not have been made then? Is the Chancellor also aware that it will be extremely disappointing to industry generally in the light of the half-promises and hints given by the right hon. Gentleman in the Finance Bill debates last year that there would be further reductions?
  Mr. Butler: The answer to the first part of the question is that, bearing the

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  responsibility I do, I did not think that I should take this decision before the Budget unless I was quite sure it was the right one to take. I therefore waited to see the reaction of public opinion, and of trades particularly, before I made this decision. I also waited for a debate in the House. I could have announced this on Tuesday night, but I decided to wait and see whether there was a general reaction in the House of Commons in favour of ending the uncertainty. I found that there was such a reaction, and I therefore decided to make the statement in good time before the Budget.
  This is an unprecedented step, and, having a great regard for the British Constitution and the practices of this House, I did not want to take an unprecedented step without the utmost care and attention. That is what I have tried to do, and I chose this occasion—a public occasion, when the House would be full of hon. Members—to make it in the most open manner possible.
  As for the second part of the right hon. Gentleman's question about disappointment, of course there will be disappointment. I fully realise that, and I took it into account before making the statement. But as I am in a position to know my own mind now, I thought it wiser to make this statement now than to wait until the Budget, with all the uncertainty that might come along. I think that that is a much more honest and honourable way to do it.
  As regards the right hon. Gentleman's final remark, I have not misled the country in any way. If my remarks have been in any way misunderstood, it must not be laid at my door. I have always tried to explain the difficulties of the situation and I am glad to say that, in spite of the difficulties, I have been able to introduce a great many reforms.
  Dr. King: Is the Chancellor of the Exchequer aware that, whatever the House and the country maythink of the nature of his decisions, the fact that he has ended the period of uncertainty will be regarded as of great benefit to trade and industry, and that our only regret is that he did not make that clear at the beginning of January when he announced his last tax changes?
  Mr. Butler: I had regard to the hon. Member's intervention in the debate and his interest in this matter in coming to my decision.
  Mr. H. Wilson: In view of the two very grave blows dealt to the textile trade in the past few weeks in relation both to raw cotton buying and to the Japanese Agreement, does not the Chancellor of the Exchequer realise that this decision not to vary the rates of Purchase Tax on textile goods will be regarded as a further grievous blow to our export trade and will be received very hardly in Lancashire? Are we to take the last few words of the right hon. Gentleman's statement about the Finance Bill as giving an assurance that the Government will not draw the Financial Resolution in such a way as to preclude Amendments on this question?
  Mr. Butler: The answer to the latter part of the right hon. Gentleman's question is, "Yes, Sir." We would intend to allow normal liberty of debate upon the rates of tax, and in drawing up the Resolution I will bear that in mind.
  In answer to the question about Lancashire, the rates of tax were reduced by one-quarter in the Finance Bill, 1952, which reduced the burden for Lancashire by about £17 million. Since then the load has been eased by a further £10 million or more through the original D levels having been left unaltered while prices have been falling, with the result that the total burden of the tax on Lancashire is some £40 million on a wholesale turnover of £1,000 million. I realise that this is a burden, but compared with other trades I do not think it is any more than they have to bear. Of course, I am anxious about the position in Lancashire, but I am thankful that trade is looking up there, as it has been for some time.
  Mr. John MacLeod: Will my right hon. Friend realise that the incidence of Purchase Tax will increase with the rise in freight charges, which has been announced and which will affect remote areas in particular if Purchase Tax goes up as a result of these increases?
  Mr. Jay: Does this very disappointing statement mean that the Chancellor has given up all hope of removing Purchase Tax on household necessities of any kind, and secondly, has he considered the implication of this procedure in future years? Does he not think that a Chancellor of the Exchequer in a future year will be asked to make a statement such as this, and that, if he declines to do so,

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  that will be taken to be a hint about the future Budget, or is he assuming that he will not be there next year?
  Mr. Butler: Discretion in this matter must always be left to the Chancellor of the Exchequer of the day. This tax, which is a peculiarly difficult tax, has led to grave uncertainties and it must be handled in the light of the circumstances as seen by the Chancellor of the Exchequer of the day. I am interpreting my responsibility in a manner calculated to reduce uncertainty to the maximum extent, and that is all I can say.
  Mr. Gaitskell: May I press the Chancellor on this point about the future? We all appreciate the difficulty of uncertainty here, but what we want to know is whether he has decided to make this statement this year—as I think rather late, but better late than at the time of the Budget—and do the same thing next year? Are we to take it that he has accepted the proposals of industry on Purchase Tax changes and that these changes are to be announced to fit in adequately with the seasonal movement of trade, with the result that Purchase Tax announcements will be made earlier in the year?
  Mr. Butler: Not every trade likes the same months. The situation is that the House has now given the Government full power to vary Purchase Tax at any time in the year. That started with the Administration previous to this one, and it has been carried on by extra powers taken by this Administration. I can give no undertaking how this will be handled in the future, but it will be handled to suit the convenience of the traders concerned in the best possible way.

BUSINESS OF THE HOUSE
Mr. H. Morrison: May I ask the Leader of the House to be good enough to state the business which it is proposed to take next week.
The Lord Privy Seal (Mr. Harry Crookshank): The business for next week will be as follows:
MONDAY, 15TH FEBRUARY—Supply [2nd allotted Day]:
Debate on Roads.
TUESDAY, 16TH FEBRUARY—Supply [3rd allotted Day]: Committee.
Civil Supplementary Estimates contained in House of Commons Paper No. 76, beginning with:
Class VIII, Vote 9, Ministry of Food.
Class VIII, Votes 1 and 2, Ministry of Agriculture and Fisheries; Ministry of Agriculture and Fisheries (Food Production Services).
Class VI, Vote 10, Ministry of Supply.
Class II, Vote 1, Foreign Office.
WEDNESDAY, 17TH FEBRUARY AND THURSDAY, 18TH FEBRUARY—Report and Third Reading: Cotton Bill, until 7 o'clock on Thursday.
Committee and remaining stages: Royal Irish Constabulary (Widows' Pensions) Bill.
Report and Third Reading: Industrial Diseases (Benefit) Bill.
Third Reading: Hill Farming Bill.
FRIDAY, 19TH FEBRUARY—Private Members' Motions.
We shall ask the House to take today the Money Resolution which the Government have agreed to give to facilitate the progress of the Slaughter of Animals (Amendment) Bill, a Private Member's Bill which will shortly begin its Committee stage.
Mr. H. Morrison: I should like to raise two points with the right hon. Gentleman. One concerns the Drogheda Report on the Overseas Information Services. Can we know whether it is the Government's intention to publish it or, in the alternative, to publish a White Paper setting out their views on the policy and the facts of the Overseas Information Services, and if so, whether they will at the same time include a section on the Home Information Services, as this would be a suitable time for a statement on their scope, on Government policy about safeguards for impartiality, and so on? If the right hon. Gentleman could inform me about this, I should be much obliged.
With regard to the business on Wednesday and Thursday, when we are to take the Report stage and Third Reading of the Cotton Bill until 7 o'clock on Thursday, can the Leader of the House say what decisions the Government have reached about putting right the illegal

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expenditure that has taken place; is it to be done in this Bill instead of in an Indemnity Bill, which I would prefer; and has he allowed for that in the allotted time of one and a half days?
Mr. Crookshank: On the first point about the Drogheda Report, I will give my right hon. Friend the Secretary of State for Foreign Affairs an account of the representations which the right hon. Gentleman has made about having it published or producing a White Paper. I think it has already been said in the House that publication of a White Paper was not precluded. I have also taken a note of the point about the Home Information Services.
The time allotted for the Report stage and Third Reading of the Cotton Bill was fixed after taking into account what we have to do. The Government, of course, have carefully gone into the issue which was raised by the right hon. Gentleman about the possibility of an Indemnity Bill, and we are advised by those who are most learned in these matters that the moving of suitable Amendments to the existing Cotton Bill would be not only within the Long Title, but would also be according to precedent, since it has happened on other occasions when somewhat similar circumstances arose. That is the course of procedure the Government will ask the House to adopt.
Mr. H. Wilson: Since there was an understanding that there were to be one and a half days for the Report and Third Reading of the Cotton Bill before this question of these indemnity provisions arose, since these indemnity Clauses are to be inserted because of the Government's negligence, and since the President of the Board of Trade can hardly expect to get them on the nod in view of their retrospective effect, will not the Leader of the House agree that extra time should be allowed to take account of that, inasmuch as we had agreed on one and a half days for discussing other very important issues which arise on this Bill?
Mr. Crookshank: No representations have been made to me that one and a half days were insufficient for this purpose. If the right hon. Gentleman looks at the Order Paper and sees what it is proposed to take on the further stages of the Cotton Bill, he will find it hard to believe that the Government Amendments will take that time.
Mr. Wilson: The right hon. Gentleman has not seen our Amendments yet.
Mr. Crookshank: I said the Government's Amendments.
Mr. Hirst: Is my right hon. Friend aware of the great dissatisfaction and disappointment felt at the time allotted for the debate on the Japanese Agreement last night, which gave very little opportunity to you, Mr. Speaker, to call Members representing textile areas, the Potteries and other areas interested, and if that is the fault of the usual channels, will my right hon. Friend kindly see that these usual channels have a better regard for the rights of private Members?
Mr. Crookshank: All I can say about that is that the time allowed for this debate was agreed in the ordinary way and announced by myself last week. I had no protests about insufficient time, and I am sorry if it turned out on this occasion, as it does on every occasion, that a number of hon. Members who wished to speak did not get it. I am afraid the blame cannot be laid upon me for the arrangements which I made.
Mr. H. Morrison: The right hon. Gentleman will appreciate that I am informed by my colleagues that the question of the time allowed for the Report stage and the Third Reading of the Cotton Bill was agreed to before this question of the illegal expenditure had come before the House. It is a new factor, and obviously time will have to be taken to debate it. The right hon. Gentleman will understand, therefore, that it may not be possible for us as an Opposition to ensure the passage of the Bill in a day and a half.
Mr. Crookshank: Of course, without giving any promise, I want to try to meet the wishes of the House. The right hon. Gentleman is dealing with Amendments which the Government are going to put down, and, as I have said, these do not number very many. I think we had better see how we get along, and, if necessary, conversations can take place.
Miss Ward: Assuming that Monday's debate will run its full time, can my right hon. Friend give us any news whether the Prayer for the annulment of the regulations in respect of medical auxiliaries will be taken on that particular night?
Mr. Crookshank: I am afraid that I do not get any early notice about Prayers.
Mr. Ernest Davies: With regard to the Drogheda Report, cannot the Leader of the House be more definite in his reply? Does he realise that this Report was received by the Foreign Office on 27th July last, that Questions have been asked frequently in this House, and that the Government have procrastinated? What is holding up the publication of this Report and the decision of the Government in regard to its recommendations?
Mr. Crookshank: Of course, it is a matter which requires detailed and careful consideration by the Government. As I have said already, I will transmit to my right hon. Friend the representations which the hon. Gentleman has added, but it is not my departmental responsibility to decide on a White Paper on Foreign Office matters.
Mr. Noel-Baker: Will the Lord Privy Seal represent to the Foreign Secretary that it might be desirable to publish this Report and to have the views of hon. Members of this House before the Government make their decision?
Mr. Crookshank: I will transmit all the representations made to me.
Mr. G. Thomas: In view of the filling-up nature of the business next week, can the Leader of the House say whether the Government have now dropped the Teachers (Superannuation) Bill and, if they have, will he accept my congratulations?
Mr. Crookshank: I do not know what the hon. Gentleman means by "the filling-up nature of the business." That happens every week.
Mrs. Braddock: On the business for Wednesday and Thursday, may I ask the Leader of the House what method it is intended to use to get the indemnity Clause? Is it intended to recommit the Bill?
Mr. Crookshank: I really must ask hon. Members to look at the Order Paper. It is set out there.
Mr. Emrys Hughes: Is the Leader of the House aware of the great difficulties under which the Scottish Grand Committee is labouring, and in those circum-
1376
stances will he give us time for the Motion signed by several Scottish Members which is standing on the Order Paper and give it precedence over the Royal Irish Constabulary Bill?
[That this House, in view of the fact that it is important that honourable Members of the Scottish Grand Committee, who represent constituencies in England, Wales and Northern Ireland should have first hand knowledge of housing conditions in Scotland, and in order that adequate facilities should be available to honourable Members and tenants and property owners interested in the discussions on the Housing (Repairs and Rents) (Scotland) Bill to attend the proceedings of the committee, urges Her Majesty's Government to make arrangements for further sittings of the committee to be held in Edinburgh and Glasgow.]
Mr. Crookshank: I have not got that Motion in mind, but I am sure that the answer is "No."
Mr. Albu: Can the Leader of the House say when the Government intend to bring forward the Industrial Organisation and Development Bill?
Mr. Crookshank: Not next week.
Mr. Albu: Never?
Mr. Jay: Can the right hon. Gentleman say what are the intentions of the Government about that Bill? Is it true, as we are told, that the Government intend to abandon it, in view of the widespread opposition of their own supporters?
Mr. Crookshank: I am dealing only with the business for next week.
Mr. H. Morrison: If the right hon. Gentleman is in serious trouble—I mean with his more right-wing supporters—could we offer our services to help in his difficulty with his own back-benchers?
Mr. Crookshank: This is all very interesting, Mr. Speaker, but I do not know what hon. and right hon. Gentlemen opposite are talking about.
Mr. Jay: Will the right hon. Gentleman consult his right hon. Friend the President of the Board of Trade and also tell him about the opposition which the Bill received?
Mr. Crookshank: If anyone wants my help with his left-wing supporters, it is available.
Mr. Rankin: The Leader of the House has dismissed somewhat lightly the plea made by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) and I want to press on him the position of the Scottish Grand Committee. Is the right hon. Gentleman aware that the Committee is meeting at the present time in conditions of extreme inconvenience to every hon. Member serving on it? It is now the largest Committee in the House, numbering 74 members, and I want to ask whether it is not possible that the Committee could meet within the precincts of this Chamber instead of in the Scottish Grand Committee room.
Mr. Crookshank: I am afraid that where Committees meet has nothing to do with me.
Mr. Speaker: Order. I do not think that question is on the business for the week.
Mr. Rankin: On a point of order, Mr. Speaker. Surely the work of Committees next week is part of the business of the House? May I press the point? If it does not come within the competence of the Leader of the House, will the right hon. Gentleman make inquiries to see what he can do to increase the convenience of that Committee?
Mr. Speaker: There is no point of order in that. We are dealing now with the business in this House for next week.
Sir R. Acland: Since we are to have a debate on roads next Monday, does the Leader of the House confirm the impression given yesterday by the Minister of Transport that the Bill on road safety, which has been vaguely promised, is not likely to be introduced this Session? If so, does that mean that road casualty figures are regarded by the Government as less important than the business of getting television into the hands of the advertisers?
Mr. Crookshank: No. Sir, no such deduction must be drawn from anything I have said here this afternoon.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order.
Mr. Emrys Hughes: On a point of order, Mr. Speaker, I understand that the Leader of the House has now discovered my Motion on the Order Paper. Now
1378
that he has seen it, would I be allowed to ask the right hon. Gentleman whether his answer is still "No"?
Mr. Speaker: That is not a point of order.

NORTHERN RHODESIA (MINISTER'S VISIT)
The Secretary of State for the Colonies(Mr. Oliver Lyttelton): I should like to report briefly to the House on my visit to Northern Rhodesia.
I made clear before leaving this country that the constitutional changes in Northern Rhodesia which were effected at the end of the year must stand.
During my visit to Lusaka I met the Elected Members of the Legislative Council and the four Members representing African interests. Discussions concerned the changes to be made at the end of the term of the next Legislative Council which will be elected this month. Assuming that this Council runs its full course, no decision affecting elections "can become effective for five years" but study of the complicated problems involved will begin at once. I hope that the Governor will be able, at the right time, to submit to Her Majesty's Government agreed recommendations on the next constitutional advances.
I also met the African Representative Council and certain Paramount Chiefs, and Chiefs with whom I had full discussions on a number of matters, including African land rights and the franchise.
I flew up to the Copper Belt and had informal discussions with the European and African mine workers' leaders and with the general managers of the mining companies. Renewed efforts are being made at a solution of the vexed problem of African advancement in the industry. I have some hopes that an answer will be found, and I am glad to notice that since I left a committee representing the unions, both African and European, and the companies has been formed and is holding its first meeting. I also met Sir Godfrey Huggins and the Governor of Nyasaland, who were good enough to come to Lusaka to meet me. They had encouraging news to give on the way

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Africans are co-operating in the Federation. The words of the right hon. Gentleman the Leader of the Opposition on this subject have no doubt contributed.
There is one further point upon which I should inform the House, though it does not arise directly out of my visit. The House will recall that I undertook in September to consider with the Governor when the time came whether a fifth African Member should be appointed to the Legislative Council as one of the two nominated unofficial Members. Since my return I have received the Governor's considered views on this and have decided that the time for this move is not ripe.
An explanation is necessary. In addition to the four African Members of the Legislative Council, there will be two Members nominated to represent African interests. Of these two, one must sit in Executive Council and in accordance with the September decisions hold a portfolio. I am satisfied that no African is as yet capable of filling this onerous post and that it must for the present be held by a European.
Mr. Moffat, who has represented African interests for so long on Executive Council and Legislative Council, cannot, for family reasons, continue to serve on Executive Council, but he is willing to continue on the Legislative Council. This means that the first nominated Member of the Legislative Council—that is, the one who is to hold the portfolio—must be a European other than Mr. Moffat. This leaves one nominated place in the Legislative Council to be filled. The Governor and I have had to decide whether African interests are best served by appointing an African to this place or retaining the services of Mr. Moffat. We have come to the conclusion that these interests will be best served for the present, and the four African Members most helped, by retaining the services of Mr. Moffat in whom the Africans repose high confidence and who is held in great esteem by all sections of opinion in Northern Rhodesia and in this country.
Mr. J. Griffiths: I should like to join with the Secretary of State for the Colonies in wishing well to these discussions that are taking place in the Copper Belt on African advancement, and to join with him in the hope that agreement will
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be reached on the best way to meet this very difficult problem.
May I put two or three questions on the Constitution to the right hon. Gentleman? First of all, there will be five years nominally between this election and the next election. What steps will be taken to seek agreement? Will there be interracial discussions, initiated by the Government? I regret that no African has been placed on the Executive Council. As to the appointment of a European, I regret that it cannot be Mr. Moffat, to whose work I pay tribute, but will the appointment of a European be for an interim period so that an African might be appointed for the period between now and the next constitutional change at the end of five years?
Mr. Lyttelton: There is no bar to an interim appointment being made if Mr. Moffat's term of office does not run for five years. With regard to constitutional questions and inter-racial discussions, I expressed the hope that an agreed solution could be forthcoming. What is first necessary is that the Government of Northern Rhodesia, in consultation with Her Majesty's Government, should try to formulate a scheme for discussions relating to the franchise, which is a particularly difficult matter. Then, of course, if an agreed solution is to be reached, that scheme will have to be a matter for discussion inter-racially in Northern Rhodesia.
Mr. Griffiths: Do I gather that any such proposals which may be put forward would be put forward on a tentative basis and would be subject to discussion, amendment and improvement, and would not be put forward as final?
Mr. Lyttelton: The matter is very complicated in present circumstances and, as I have indicated, the first requirement is for the Northern Rhodesia Government to formulate a scheme for discussion between the races.
Miss Lee: Do I understand that there is no absolute bar to the appointment of an African in the next five years if there is a vacancy and a suitable African is available? Secondly, can the right hon. Gentleman explain why his statement today should be so much less encouraging than his statement yesterday on Nigeria? Are we to deduce from that

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fact that where there is a large population of white settlers it is more difficult for native people to make headway than in places where they themselves are in the majority?
Mr. Lyttelton: The hon. Lady's deductions are quite wrong. The conditions in Northern Rhodesia and the political progress of Africans in Northern Rhodesia are quite different from conditions in Northern Nigeria. Everybody who knows the countries knows that to be so. Mr. Moffat's appointment would ordinarily run for the life of the Legislature. If he wished to resign or it appeared to him desirable to do so, there is no bar to another appointment being made.
Mr. Griffiths: I do not ask for a reply now, but since this is a long period, would the right hon. Gentleman consider making an interim appointment of a European to the Executive Council so that if the time should come within the five years when another appointment had to be made, that appointment could be made without the present Member or any other Member having to resign?
Mr. Lyttelton: We are in consultation with Mr. Moffat. I cannot give any assurance, but he is a very public-spirited man and has African interests at heart. If he thought that there was a suitable man who could discharge the duties as well as or better than he could do, I am sure that he would retire in his favour.
Mr. Fenner Brockway: Is the right hon. Gentleman aware that the disappointment of many of us today is as severe as our congratulations yesterday were sincere? Does he really think that to give two million Africans four representatives in the Legislative Council against 12 European representatives for 40,000 people is the way to obtain co operation in Central Africa? Will he not reconsider the matter?
Mr. Lyttelton: The hon. Member persists in regarding constitutions and political progress as matters of arithmetic. They are not. The plain fact is that one cannot proceed to give representation in proportion to numbers of population without retarding the whole progress of the country. That is the problem of what advances in the constitution and what alteration in the franchise are appropriate. The hon. Member persists in neglecting the difficulties of the problem, if I may say so.
Mr. Fenner Brockway: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall take the first opportunity of raising this matter in the House.

BILL PRESENTED
  CENERGYAUTHORITY
  "to provide for the setting up of an Atomic Energy Authority for the United Kingdom, to make provision as to their powers, duties, rights and liabilities, to amend, consequentially on the establishment of and otherwise in connection with that Authority, the Atomic Energy Act, 1946, the Radioactive Substances Act, 1948, and certain other enactments, and for purposes connected with the matters aforesaid," presented by Sir David Eccles; supported by the Prime Minister, Mr. Crookshank, Mr. Sandys, Mr. Geoffrey Lloyd and Mr. Boyd-Carpenter; read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 66.]
  BUSINESS OF THE HOUSE
  Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[The Prime Minister.]

  TAKE-OVER BIDS
  4.5 p.m.
  Mr. Roy Jenkins: I beg to move,
  That this House deplores recent manifestations of the technique of take-over bids in so far as they have put large, untaxed capital profits into the hands of certain individuals and seriously undermined the policy of dividend restraint. It therefore calls upon the Government to appoint a committee of inquiry into all aspects of these activities, including the effect upon dividends, share prices, and company savings, the sources of the finance used, the capital profits obtained, and the counter-measures taken by the directors of the companies concerned; such a committee to be empowered to suggest remedies as well as to investigate facts.
  This Motion seeks to do two things. First, it deplores a number of recent manifestations of the technique of take-over bids that have taken place, and secondly, it calls upon the Government to appoint a committee of inquiry to look into the whole subject, to shed a little light into dark places and to tell us something more about the way things are developing in this increasingly flexible economy of which the Government claim to be so proud at the present time. Both these objectives are eminently reasonable, and I hope that the Chancellor of the Exchequer may find it possible to accept our Motion on behalf of the Government.
  It can be argued, of course, that there is nothing new or objectionable about one company taking over another and that it has happened very often in the past. It can be said that it is in many ways quite habitual and serves the interests of economic progress. Many of our biggest and most successful businesses have been built up by a process of amalgamation. I do not dispute that such developments may be entirely reasonable, even when they involve take-over bids. If we looked among the spate of announcements of take-over bids in the Press for an example which certainly on the face of it appeared to be quite reasonable, I would be inclined to cite the case of Wiggins Teape, the paper manufacturers, who are taking over Thomas Owen and Company, who are also paper makers. There one has no cash passing, but merely an exchange of shares between two companies in the same line of business who come together and are operated in the future as one business.
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  On the face of it, that seems perfectly reasonable and a process to which no one could take objection. The only people whom I might expect to object to developments of that sort would be certain hon. Members opposite who, every year when we are dealing with Death Duties during debates on the Finance Bill, proclaim the sacrosanct nature of family businesses and ask the Chancellor to make sure by his taxation proposals that nepotism is preserved, whatever happens.
  But there is no doubt at all that a great number of the developments which have been taking place recently are entirely different from the example which I have just given to the House. There has been a great number of developments in which one is dealing with financial manipulation that is concerned not at all with the long-term development of businesses but almost exclusively with quick money returns. Even the chairman of Barclay's Bank was moved to refer to this the other day in his annual report as the "apotheosis of the spiv." Many of the people involved in developments of this sort have comparatively little knowledge of the detailed working of the businesses with which they are concerned. They are financiers, pure and simple.
  Mr. Jack Jones: Neither pure nor simple.
  Mr. Jenkins: They are straightforward financiers. [Hon. Members: "No."] They are nothing but financiers, then. Their object is to exploit what the Americans call a "special situation." How does a special situation arise? What is the situation which they try by this system of take-over bids to exploit? First and foremost, these special situations are caused by policies of conservative dividend distribution which have been taking place in recent years. Under the Labour Government there was a very large and rapid increase in the total of company profits. There was no corresponding increase, as a result of appeals from successive Chancellors of the Exchequer, of the amounts distributed in dividends. In consequence, these increases in company profits were able to take place without any very adverse distributive effect and to provide the most important source of our savings in this country.
  Of course, the money which was earned by the company and which was

  1385
  not distributed was put to reserve to increase the assets of the company and belonged, legally, certainly to the shareholders who owned the company. But, as the Stock Exchange is always primarily interested in questions of current yield, that growth in the assets of companies concerned did not find itself fully reflected in the prices at which the shares of those companies stood on the Stock Exchange. As a result, one now has a situation in which, if company dividends were pushed up much nearer to the earnings ceiling, it would be possible to raise the price of the shares of the companies very much above the levels at which they stand. That is one of the major factors in this situation which certain people are seeking to exploit.
  The other factor is that we have had a decade and more of rising prices in this country. As a result, the real value of the assets of many companies, particularly where this applies to real property, is very much higher than the value at which the assets stand in the balance sheet. Parallel with that, it is perfectly possible to have a situation—as we have in many cases—in which a company is earning quite a tolerable rate of profit on the balance-sheet value of its assets, but is earning only a comparatively small rate of profit on the real value of its assets. In that situation there is a temptation to certain people from outside to bid high prices in order to get control of the company—not because of the profits the company is earning, but because of the assets of the company—either to put the assets to a new and presumably more profitable use or, alternatively, to sell the assets off at a heavy capital profit.
  Those are the two main factors in the situation which is causing this state of affairs in which we have a great spate of take-over bids. They are certainly far more the cause than the old King Charles's head of heavy direct taxation, which is all that is mentioned in the Amendment put down to this Motion by hon. Members opposite.
  One should admit straight away that, within the framework of a free enterprise, capitalist economy, there is something—I stress "something"—to be said for the activities of these bidders for control. Certainly the arguments in favour of what they had been doing were deployed, for
  1386
  instance, very persuasively by Mr. Harold Cowen when he wrote in the January number of the "Banker." There are certain points made there, and in other articles dealing with the issue, which are of some validity. I do not think that we on this side of the House are concerned with the cosy preservation in office of directors—possibly inefficient directors—nor are we interested in the wasteful use of assets. But even if it be allowed that take-over bids may in certain circumstances help to prevent these two undesirable consequences from taking place, they do so at a very heavy price and bring in their train a substantial number of very undesirable other consequences.
  What are these other undesirable consequences about which we on this side of the House are very worried? The first and most important is without doubt that the whole technique of take-over bids drives a coach and four through the policy of dividend restraint. There is no doubt about that at all. The first thing which a threatened director, afraid that some take-over bidder will remove him from his job, does is to give his shareholders more in order to try to buy them off before the take-over bidder. There is example after example of the way in which that operates. If I may, I will briefly cite a few examples of the way in which this has been operating recently. I start by mentioning the case of the Isle of Man Steam Packet Company, for which a take-over bid is in process at present.
  Colonel O. E. Crosthwaite-Eyre: Given up this morning.
  Mr. Jenkins: That does not affect my point in the least. The point about the Isle of Man Steam Packet Company is that the dividend this year is up—not sensationally—on last year from 12½ per cent, to 17½ per cent. In addition, the existing directors, in order to stave off the attack, have made a three-for-two bonus issue. It does not matter whether the take over bid was successful or not; the interesting thing is the proportion which these directors, threatened with this take over bid, have been distributing—out of the total £106,500 available for distribution they have distributed no less than £105,000. That is not what one could call a conservative dividend policy. There is not much dividend restraint there.

  1387
  There is another example, which is not so straightforward. That is the case of J. Sears and Company, the shoe shop people, who, as many hon. Members know, were taken over by Mr. Clore about a year ago. The dividend of J. Sears and Company this year has actually gone down from 62½ per cent. to 50 per cent., Mr. Clore smoothly remarking that the present board do not favour excessive distributions by way of dividends.
  Colonel Crosthwaite-Eyre Colonel Crosthwaite-Eyre rose—
  Mr. Jenkins: I hope the hon. and gallant Member will restrain himself for a moment. The point about J. Sears and Company is that last year, when the previous directors were righting to stave off Mr. Clore's bid, they put the dividend up from 22½ per cent. to 62½ per cent. So even now, with Mr. Clore's conservatism, one is left with a dividend more than twice as high as that which previously existed.
  Colonel Crosthwaite-Eyre: I am not challenging the figures given by the hon. Member— they are quite correct—but, in stating what J. Sears and Company have done, he might remind the House that, since Mr. Clore took over in the last year, I understand that a completely new bonus system, which gives extra wages to every person employed by the company, has been instituted.
  Mr. Jenkins: I really cannot understand the relevance of that interruption. I am discussing the dividend policies of particular companies. As a matter of fact, I was discussing at this stage the actions in raising dividends which were taken, not when take-over bidders take over, but by threatened directors before they take over. It would be irrelevant to try to give an account of everything that has happened during that period. I was dealing not primarily with events after Mr. Clore's arrival but before he came.
  The third example is the case of the Savoy Hotel Company, an increase of whose dividends has recently been announced. It is understood that they will be forthcoming. There, again, we have an attempt of the directors to make the shares worth the very high price they eventually paid to Mr. Samuel for them. There is no doubt that in this business of
  1388
  take-over bids, whether threatened or actual, to vote a substantial increase in. the dividends on shares is absolutely common practice. I would quote what was said by "Lex," a commentor of the "Financial Times," writing after the Isle of Man dividend had been announced. He said:
  "It is now almost a reflex action for boards, threatened with justifiable bids to raise their dividends."
  It is obvious that this practice will not only affect companies which are-threatened with take-over bids but may have a very much wider application altogether. It may be that the bidders will succeed in taking over only a few companies and will remove from their positions only a handful of directors, but a great many other companies will read the writing on the wall and will realise that the only way in which they can safeguard their position against becoming an object to such bids is to give their shareholders as much as they can from the-company before the take-over bidders arrive.
  That is the whole tenor of activity in the City at the present time. Another brief quotation from "Lex" might be given. Writing yesterday, he said:
  "It is now a basic change in the board's policy that dividends on the market will no doubt continue to rise."
  There we have what Mr. Harold Wincott, another well-known financial commentator, had in his mind when he spoke of "a silent revolution" in the City.
  What is the Chancellor's view about all this? He still pays lip-service to the policy of dividend restraint, and I still believe that he does not want any violent change away from the present distribution of the national income; but if he is going to allow this to go on without any move, if he is going to allow shareholders, to proclaim for themselves a new deal and to reassert the principle that the duty of a company is to give the shareholders as much as possible as quickly as it can, then without doubt there will be a very big shift in the distribution of the national income, and without doubt the Chancellor will have a very difficult and continuing wages situation. There is no question about it.
  I hope that the Chancellor will really tell us this afternoon what he thinks about these issues. It is no good doing

  1389
  as some of his colleagues at the Treasury have been doing, trying to pretend that nothing of any importance at all is happening to dividends. They are contradicted every day by commentators writing in the financial Press and in "The Times," the "Manchester Guardian," and every other paper which has studied this matter. It is obvious that there is a very substantial movement going on. As Mr. Wincott has said, there is "a silent revolution." It is not good enough for the Chancellor to pretend that nothing is happening. Something very big is happening. Is he in favour of it, or is he against it?
  I turn to the second of our main objections, to what follows from this technique of take-over bids. In certain instances these bids have revealed some very ugly capitalist practices indeed. In this connection I will say something about another side of the affair of the Savoy Hotel in which almost everybody concerned behaved extremely badly. Let me briefly recount some of the facts of that story.
  In the early autumn of last year, the ordinary shares of the Savoy Hotel Company stood at about 28s. At that stage it was apparent to Mr. Clore and Mr. Samuel that if they could get control of the company and change the use of the Berkeley Hotel, they could probably make a very substantial profit. They therefore went into the market and started buying on a big scale. The board of the Savoy also wanted to rebuild the Berkeley, but to keep it as a hotel and not to let it be used as offices. They got worried at what was happening, and asked for an inquiry under the Companies Act to find out who was buying the shares. Mr. Clore and Mr. Samuel operated largely through nominees, and it was not easy to discover exactly what was happening there.
  Mr. Gerald Nabarro: It was not illegal.
  Mr. Jenkins: I am not saying that it was illegal at all.
  Mr. Nabarro: I did not attribute to the hon. Gentleman any suggestion that he had said that it was illegal. He did say that the interests concerned asked for an inquiry under the Companies Act, 1948, and it was at that point that I
  1390
  interpolated: "What could be illegal about it?"
  Mr. Jenkins: It seems to have been an irrelevant interruption. An inquiry was set up, and the conductors of the inquiry made a report which showed that Mr. Samuel, through his company, owned rather more than 20 per cent. of the ordinaries and that Mr. Clore had managed to get control of about 10 per cent. At that stage, when that report was published, Mr. Clore and Mr. Samuel came together and Mr. Clore sold his holding to Mr. Samuel, taking a handsome profit for himself. The holding of Mr. Samuel went up to 37 per cent. of the ordinary shares.
  At this stage the Savoy directors got extremely worried and they thought of that very odd device of establishing the Worcester Building Company, which acquired from the Savoy Group the Berkeley and one or two other small properties. In return for them, they gave to the Savoy Group so-called first preference shares. I say "so-called" because in fact these first preference shares were in fact equity shares, in that they had a right to the residual profits. But they were not normal equity shares in the one important respect that they conferred no voting rights at all. Those voting rights remained with the so-called ordinary shares which were preference shares in every other respect.
  The so-called ordinary shares were taken up by the trustees of the Savoy Group Staff Benevolent Fund, who were in fact the existing directors of the Savoy Hotel. The whole thing was a clever—possibly rather over-clever—device to ensure that whatever changes there were amongst the shareholders the existing, directors should continue to control what happened to the Berkeley.
  What did Mr. Samuel do then? He was extremely angry at this move, be cause he did not like people dealing with him as toughly as he was accustomed to dealing with other people. He asked for a Board of Trade inquiry into all the affairs of the Savoy Group. A few days after this, operating on two fronts at once, as it were, he offered to sell his shares to the Savoy directors at the price of 62s. 6d. The Savoy directors turned this down flat. They said the price was excessive. They said that they might pay about 40s., but they certainly would not

  1391
  pay 62s. 6d. The "Financial Times" commented:
  "The price asked was purely a 'bid' price and one only a bidder with similar plans to his (Mr. Samuels) own would be willing to contemplate."
  What did Mr. Samuel do then? He made public his demand for an inquiry, using it without doubt as a threat to the existing directors of the Savoy. The existing directors at that stage saw the red light, and within 48 hours they had paid the price of 62s. 6d., which was 22s. 6d. more than they had been willing to pay, and which involved a total sum of £1,346,000 for shares which they had said were excessively expensive at 62s. 6d. per share only a short time before.
  I do not think one can escape the conclusion, in considering this history, that the price of 62s. 6d. which was eventually paid contained a very substantial element of hush money. The Savoy directors did not want an inquiry and they were prepared to pay this price, totally in excess of what they had previously said the shares were worth, in order to avoid an inquiry taking place. When all that had been done, the Worcester Building Company was wound up, and Mr. Samuel withdrew his request for a general inquiry. How did Mr. Samuel come out of it?
  This brings us on to our third objection to the developments which have been taking place, which is that they lead to very substantial tax-free capital gains on the part of certain individuals. In its leading article this morning "The Times," which allowed that we had something on our side at any rate so far as our worries about dividend restraint were concerned, said that to link this with the question of tax-free capital gains to individuals was "an unworthy part of the Motion." I do not quite understand how it is an unworthy part of the Motion, because it is a very important part of the whole issue.
  It appears that Land Securities Investment Trust, Mr. Samuel's company, made a profit of somewhere between £200,000 and £300,000 on this deal in Savoy Hotel shares. The shares on the open market had £200,000 added to their value almost overnight as a result. I understand that this company is accepted by the Inland Revenue as an investment company, and.
  1392
  as such, it does not pay any tax on profits in the dealings in shares, although it has to use those profits for capital rather than for revenue purposes. If my information about this is correct, there is no doubt at all that there is a very large amount of untaxed capital profits about, and I should like to know what the Chancellor has to say about this aspect of the matter.
  Mr. G. P. Stevens (Portsmouth, Lang-stone): In view of what the hon. Gentleman has said, I wonder whether he knows to which company the leading article in "The Times" refers when it says that one of the principal parties was a property company which is taxed on profits of this kind. Is the hon. Gentleman's information better than that of "The Times"?
  Mr. Jenkins: I do not know to which company the leading article in "The Times" was referring. All the points which I have just given—I put them forward tentatively—I have taken from the "Financial Times," so I suggest the hon. Member for Langstone (Mr. Stevens) argues it out with his hon. and gallant Friend the Member for New Forest (Colonel Crosthwaite-Eyre), who is sitting in front of him.
  In any case, the fact that there is dispute about this adds force to our demand for an inquiry into all these and other related matters. Rather than learning what the hon. Member for Langstone thinks, I should like to know in particular what the Chancellor thinks about these very large tax-free capital profits, if they are tax-free. What does he think about the whole range of activity in the case of the Savoy Hotel deal which I have described? Does he regard these gentlemen as being worthy instruments of his policy of moving towards a more flexible economy? I do not know; perhaps he does.
  Last week, in the Commonwealth debate, the Chancellor told us, in one of those penetrating sentences that we sometimes have from him, that in economic affairs we should remain cool, calm and collected. It seems to me that Mr. Clore and Mr. Samuel remained pretty cool and pretty calm, and they have certainly collected.
  I now turn to the fourth of our objections, which concerns the possible diversion of assets away from use which is

  1393
  most in the national interest. There are some disturbing illustrations from what has been happening to certain textile companies. My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) will, I think, say a little more about this. Certainly in the case of the Isle of Man Steam Packet Company— although the deal has not actually come off, it was extremely near coming off and it is perfectly relevant from this point of view— a great number of responsible people have been worried because what they regard as important public interests could not be safely left to the pulls of the market place.
  The bidder in this case has been a Mr. Jay. One is tempted to add that his activities have caused consternation in Douglas. He does not seem to be particularly well informed about local conditions in the Isle of Man. Indeed, the directors in a recent statement said:
  "This gentleman is wholly without knowledge of an island which, it is understood, he visited for the first time in November and certainly is unaware of the nature of the business on which this company is engaged."
  But it is not merely the directors, whom one would hardly regard as being impartial witnesses in a case of this sort. We had the Governor of the Isle of Man flying over to London for talks with the Home Office and saying at the airport that Defence of the Realm Regulations might have to be invoked to safeguard the interests of the islanders in the Isle of Man. Is the Chancellor watching issues of this kind? Will he, if necessary, make a statement?
  This leads me to the whole difficult question of the responsibilities of big public companies. To whom are these companies responsible? Are the interests of their shareholders paramount, or must they be tempered by a responsibility to their employees, to their customers and to the nation as a whole? I think it can be agreed that a sort of de facto situation has grown up recently in which it has been accepted that at least the very big public companies exist for a great number of reasons other than that of making profits for their shareholders. The importance of the whole take-over bid situation is that it is a direct challenge to that understanding. Mr. Clore, Mr. Samuel and people like that are challenging that understanding by their actions, and a lot of financial commentators have
  1394
  been challenging it recently by their words.
  After the end of the Savoy Hotel affair, a leading article which appeared in the "Financial Times," referring to these other responsibilities, said:
  "But all these are comprehended in the responsibilities of the directors to their shareholders and the shareholders' interests are interpreted as they should be, in the widest possible sense."
  It may be that that is not very different, except that it is less pithy, from the remarks of Mr. Charles Wilson about what was good for General Motors when he became Secretary of Defence in America. In "The Times" this morning there appeared the statement, which is not very different either:
  "So long as private enterprise provides the main motive force in the economy, the difference must be settled in favour of those who are prepared to back their views furthest with their money."
  What is the Chancellor's view on this issue? Where do the Government stand so far as the responsibilities of big public companies are concerned? Do they think their actions can be left solely to the rules of the market place? In December the Chancellor said he was worried about this whole issue, and he issued an appeal, through the Bank of England, to the banks and insurance companies not to provide money for these speculative purposes. The leading article in "The Times" this morning said that that appeal has had little effect. What is the Chancellor going to do about it? Is he going to sit down under that or go further? We need a clear, unequivocal statement from him about where he stands on these issues at the present time.
  Also, he should accede to the demand for an inquiry. There is much which is still not known and much which is still in dispute. We ought to have more information about all these matters. After all, if there was a case for an inquiry into the Savoy Hotel shareholdings when Mr. Samuel wanted it for his private purposes—a public inquiry—surely there is now, in the interests of the public, a very strong case for a much wider inquiry.
  4.40 p.m.
  Mr. Austen Albu: I beg to second the Motion.

  The subject, which my hon. Friend the Member for Stechford (Mr. Roy Jenkins)

  1395
  has so admirably covered, is not only highly technical but has wider implications; quite apart from the economic effectiveness or non-effectiveness of the actions which we are at present discussing. It has been said by some of the financial commentators that the recent spate of take-over bids and the revolution in the boardrooms which has followed from them has, in fact, given the lie to the arguments that have sometimes been deployed in recent years about the managerial revolution that has taken place in large-scale industry during this century.
  I believe that, in fact, no significant changes have taken place. I do not believe that the respective relationships of the participants in industry have been changed to any significant extent at all, but that, in fact, these actions have only been engendered by a very small number of financiers acting as shareholders, and that they could not have taken place without substantial support in the City, and. as I believe, with the willing connivance of the Government by its financial policy. If, in fact, shareholders are really taking a greater part in the management in industrial undertakings, then I would refer the House to a report in the "Evening Standard" in December referring to the annual general meeting of the B.S.A.:
  "For half an hour, Sir Bernard"—
  that is, Sir Bernard Docker—
  "read a 4,000-word speech. At the end of it all, Sir Bernard congratulated shareholders on their attendance. Nine turned up this year—two fewer than last time."
  Again, dealing with the British Motor Corporation, it said:
  "Promptly at 11 o'clock today Mr. Leonard Lord, boss of the Austin-Morris merger, opened a shareholders' meeting. At 11.3, he sat down—meeting over."
  Some hon. Members may have seen a very interesting letter which appeared in the "Financial Times" of 13th February from a lady who owned some shares in a small manufacturing company which was not doing very well, and who wrote:
  "On the appointed day, I duly arrived at the company's offices and explained the reason for my presence to a clerk in an outer room. From behind a grille he surveyed me with horrified surprise, and, unable to cope with the situation, he disappeared and returned with a senior, who appeared equally shattered.
  1396
  I was covered with confusion in the realisation that I had committed a major indiscretion in coming. It is bad enough to feel guilty when one has had fun in being indiscreet; there was no fun in this situation, which was doubly distressing."
  Mr. Charles Pannell: On a point of order. The other day Mr. Speaker ruled 'that conversations in the chamber should not be loud or prolonged. May we not have some protection against file committee meeting which has been going on on the other side of the House.
  Mr. F. J. Erroll: Further to that point of order. We have all heard of the letter which the hon. Member for Edmonton (Mr. Albu) is quoting and have read it for ourselves.
  Mr. Deputy-Speaker (Sir Charles MacAndrew): I did not hear any noise, and I was perfectly able to hear what the hon. Member was saying.
  Mr. Pannell: As I am very much nearer to the hon. Members concerned, will you take it from me, Mr. Deputy-Speaker, that there has been a subcommittee in session all the time?
  Mr. Derek Walker-Smith: I am very much nearer to my hon. Friends than the hon. Member for Leeds, West (Mr. Pannell), and I have heard with interest every word spoken by the hon. Member.
  Mr. Albu: It is my experience that, when matters are being discussed which hon. Members opposite do not like or which get under their skins, they always kick up a row.
  May I now finish the quotation:
  " 'No shareholders ever attend these meetings,' announced the senior clerk severely."
  It is hardly surprising that the letter is signed "Frustrated Female."
  It is perfectly true that the actions we are discussing today are on a comparatively small scale, but they are of great importance, taken together with the general movement of financial policy, in changing the climate of the dividend policy of companies and leading to a very substantial Stock Exchange boom, which itself must have led to very substantial capital profits, whatever the particular actions concerned may have produced.

  1397
  There are two classes of take-over bids. The first is by a group or by a company with manufacturing or trading knowledge in a particular industry which intends to use the productive resources of the company which it is taking over for beneficial reasons. The second is that by a group of financiers who intend to exploit the assets of the company by the sale of its property or by increases in the distribution of its profits. There is no doubt a considerable justification for the first type of take-over bid. There is certainly no atom of justification for the second. It is clear that, in the first case, where a company takes over a business in a similar line, there may be very good opportunities of an increase in the scale of operations and so of efficiency, an improvement in management and in the better and more efficient use of technical resources, with lower overheads and so on.
  The second type is a very different matter indeed, and it can in no way be acceptable to hon. Members on this side of the House. It involves the complete or partial destruction of an enterprise in order to realise enhanced property values by a number of financiers and on behalf of those who have played no part in the management and operation of the business. But, in truth, purely economic considerations are insufficient; there are other considerations which are by no means unimportant when we are considering this matter. Industry is not only an economic process; it is also a social process, and when we are considering industry and the practices of industry, we must be careful, and industry itself must be careful, that these practices do not offend the natural feelings of justice which are so strong among the people of this country. If these feelings, in fact, are harmed, enormous harm would be done to the economic life of the country.
  Accusations are often made by company directors, capitalists, financiers and others, supported by hon. Gentlemen opposite, that the workers are ignorant of the financing and operation of industry and of how profits are made and distributed, and it is said that we have created an exaggerated suspicion in their minds. I would remind hon. Members of what Professor Gilbert Murray said when speaking of Greek religion:
  1398
  "The best seed ground for superstition is a society in which the fortunes of men seem to bear practically no relation to their merits and efforts."
  I invite hon. Members opposite to apply those words to this situation. If it happens that the present institutions of our society cannot function efficiently except under conditions such as have been described by my hon. Friend, then the institutions of our society will have to be changed. It is not for hon. Members on this side of the House to defend these institutions which we have been criticising for so long. Let hon. Members opposite defend them, if they can, in economic and social terms, but also in terms which correspond to the very urgent need of the country for increased production.
  I will also remind bon. Members that these bids have been welcomed, not only on economic grounds, but have been substantially welcomed throughout the financial Press because they have broken down the policy of dividend restraint. The arguments for higher dividends for shareholders are extremely confused. I have had some argument in the Press with the hon. Member for Langstone (Mr. Stevens)—it was in the "Daily Herald"—and also in private conversation, and I have watched with interest the letters which have been written on this subject in the Press.
  Two arguments are used, and they are really, if not in contradiction of each other, at least irrelevant to each other. The first is that the shareholders are entitled to more money and a higher distribution from profits at the present time because the increases in dividends since before the war have not kept pace with the increases in wages and salaries. I have seen this argument attacked in the Press by those who support higher dividends on the grounds that the real justification for higher dividends is purely economic. In my opinion, there can be absolutely no justification for higher dividends to shareholders solely on account of the fact that their incomes and their rewards have not risen commensurate with those which come from wages or salaries.
  Mr. Stevens: Would the hon. Gentleman not agree that a very large number of organisations which are very much trustee in character, such as the life

  1399
  assurance companies, friendly societies and others, do invest a substantial proportion of their surplus funds in ordinary shares as a hedge against inflation?
  Mr. Albu: That is exactly the point I was coming to, but, of course, if we are arguing solely from this point of view, then what about pensioners, some of whom, I agree, have had an increase, and what, in particular, about those other savers who put their money into fixed-interest securities? Are they not also entitled to hedge against inflation if the case is based solely on the argument that those who save and those who invest are entitled to get more at the present time?
  On this argument alone there is no difference between the ordinary shareholders and those who put their money into fixed-interest securities. But this argument is frequently muddled up by people who try to confuse the issue with the second and economic argument, which is quite different. Let us be sure which argument we are having, because the hon. Member for Langstone in the "Daily Herald" argued, not on the ground of economic justification, but on the ground that people with money invested in ordinary shares ought to get more at the present time. That is a very different argument.
  The second argument which is based on the economic justification depends on the function of the shareholder and the way in which the process of investment is carried out at the present time. It is frequently said that there must be a higher return for equity shareholders because there are insufficient savings in the community and not sufficient risk capital. Is it seriously suggested that the operation of take-over bids and the increased distribution which results from them are going to increase the total savings of the community and are going to provide more risk capital? I do not believe that there is any reason for believing that at all, and, with the present distribution of the national income, a higher distribution in the form of dividends will undoubtedly mean less investment, because, no doubt, a very large proportion of it will be spent.
  As to the other argument sometimes used, that somehow the market is a better judge than the directors of companies
  1400
  themselves of how investment should take place, I do not think there is much to choose between them. I do not like either method, and I am certainly not prepared to rely on the market and on the City of London to determine the way in which investment shall go in the next 20 years or so. Today, most new investment is carried out by institutions. It cannot be argued in the majority of cases that the present returns on investments, certainly in large public companies, do not adequately cover the risks involved.
  We on this side of the House welcomed the trend towards greater equality which took place during and immediately after the war, and particularly have we welcomed the relative increase in earned income as against unearned income, and the majority of shareholding incomes are unearned incomes. We believe—and this is where my hon. Friend's questions to the Chancellor are so relevant—that the Government have, in fact, encouraged the reversal of this trend towards greater equality and a more just society.
  Therefore, we shall very seriously have to consider what we are going to do when we get back into office to prevent the continuance of the reversal of the trend which has been encouraged by the present Government. There are a number of things that can be done. We can consider a very considerable extension of the public ownership of the shares of these companies; we can consider a very substantial increase in the taxation of the profits of these companies, or we can consider some form of dividend limitation.
  Personally, I have always favoured some form of dividend limitation, in spite of the well-known difficulties involved. It is interesting that a growing number of industrialists have recently been suggesting that an attempt should be made to assess what is the fair reward for capital invested in different industries, and to limit the return in accordance with that.
  It is not only hon. Members on this side of the House and those who have Socialist leanings who hold this view. This sort of view is spreading quite widely through a large part of industry. Hon. Members may have seen the remarks made by Lord Reith at the annual conference of the British Institute of Management last year, and the hon. Member for

  1401
  Langstone may have read the very interesting article by Mr. A. H. Boulton in the journal of the Chartered Institute of Secretaries, not, I think, exactly a revolutionary body. Mr. Boulton pointed out the limited risk undertaken by the modern non-entrepreneurial investor.
  I can assure hon. Members that these feelings are very widespread indeed, and cannot be neglected if there is to be that co-operation in industry which we all agree is so badly needed. In my opinion, these feelings of injustice, which are real and justified, are among the most powerful of the deterrents which are holding back the productive energies of our people.
  4.56 p.m.
  Colonel O. E. Crosthwaite-Eyre: The two speeches to which we have just listened fulfilled, I think, very much what was expected by hon. Members on this side of the House when this subject was first placed on the Order Paper. Indeed, the hon. Member for Stechford (Mr. Roy Jenkins) showed—and I say this in all seriousness—a sense of political dishonesty for which it is difficult to find a parallel. To give one example, he wrote only last month in a periodical called "The Socialist Commentary." In his speech this afternoon, he seemed to forget many of the arguments that he advanced in that periodical.
  Mr. Albu: Not a single one.
  Colonel Crosthwaite-Eyre: I will quote one which he conveniently forgot. When talking about the increase in the amounts distributed through dividends, he forgot to mention the fact that he carefully wrote in his article thatthe rise in the distributed profits between 1946 and 1951 was less than the fall during that period in the value of money. So that, in fact, according to his own article, the shareholder received less in 1951 than he did in 1946.
  The hon. Gentleman also quoted the "Financial Times," and here I must declare an interest, because I am a director of that paper. He chose very carefully all the quotations that suited his argument and did not mention any that did not suit him. For instance, he forgot that convenient quotations by "Lex" were offset by other statements in the paper. It is also true that it was the
  1402
  "Financial Times" who were the first people to complain about the way in which the Savoy take-over bid and counter take-over bid were made.
  Mr. Jenkins: The hon. and gallant Gentleman opened his speech with what I thought was deliberately strong language, to which I do not object at all. I hope, however, that he is going to say more than that. I did not read out every article I have written in the last month, nor did I read out the whole of the "Financial Times."
  Colonel Crosthwaite-Eyre: That is quite true. My case is that the hon. Gentleman carefully chose those passages in his own articles and from the "Financial Times" to suit his own arguments.
  Mr. John Strachey: Come off it.
  Colonel Crosthwaite-Eyre: As we on this side of the House listened without interruption to what seemed to us partisan statements by hon. Members opposite, perhaps I might be allowed, in my turn, to develop my speech.
  Mr. Ernest Popplewell (Newcastle-upon-Tyne, West): Prove it.
  Colonel Crosthwaite-Eyre: I will prove it, or try so to do, which is all that any hon. Member in this House can say. For instance, the hon. Gentleman quoted in support of his argument Mr. Wincott in the "Financial Times." He also quoted "Lex," but he forgot to say that in its first editorial today the "Financial Times"very severely questions the arguments which he has put forward. He went on to talk about bankers, and quoted Barclays Bank in particular. He said that the bids were styled by the chairman as "the apotheosis of the spiv." Those were the words, but he did not quote the statement made this morning by the chairman at the annual general meeting when he said that any remarks he may have made were not to be construed as meaning that higher dividends were not in his view a thing that might be of genuine benefit to the country.
  The hon. Gentleman forgot to tell the House that the other chairman, Mr. Bibby, of Martins, happens to be the banker for Mr. Wolfson of the Great Universal Stores. Here we have a banker

  1403
  on the one hand opposing these take-over bids and on the other lending credit to a person who is responsible for more take over bids than any other undertaking.
  Mr. Hugh Gaitskell: Does the hon. and gallant Gentleman suggest that if a banker disagrees with a customer he should sack the customer?
  Colonel Crosthwaite-Eyre: If one takes the line taken by the hon. Gentlemen who have spoken so far, it is essential that the full facts should be brought out and not only those facts which happen to suit the case. After having listened to the hon. Gentlemen, I feel that they are not so much concerned about take-over bids. In fact, the hon. Member for Stechford said that most take-over bids never even reached the Press, and very few of those which did reach the Press ever became the subject of party propaganda. There it is. He has seized on two today out of the countless thousands that he knows about.
  Mr. M. Follick: They are the most glaring.
  Colonel Crosthwaite-Eyre: Yes, because they suit him. I have to argue with him about Sears, one of the two specifically quoted, because he forgot to tell the House that, while the dividend had been reduced, equally the conditions of the workpeople had been improved. That is something which should be brought to the notice of the House. It is a factor in considering whether that take-over bid was of value to the community or not. Surely that is fair. That is all that I would ask hon. Gentlemen opposite to do when they report these matters to the House. They should give all the facts and not just the ones that merely happen temporarily, because of political considerations, to suit them.
  Mr. Roy Jenkins: I understand the hon. and gallant Gentleman to suggest that it was unfair for me to concentrate upon the Savoy and one or two others and that I should have given exactly equal space to a great number of other bodies. Would he tell me whether the "Financial Times" does that?
  Colonel Crosthwaite-Eyre: I do not see what that has to do with the debate, but I would say that we pride ourselves
  1404
  as a paper on the fact that we give all the news affecting industry. If the hon. Gentleman finds an instance where we do not, we shall be the first to accept his criticism. It is true to say that we try to report what happens, be it favourable or unfavourable to any case we may wish to make.
  What I think is the truth in this matter is that we have from hon. Members opposite yet another attempt to decry, because of their pathological hatred of profit, anybody who makes money. That may well be because they have been singularly unfortunate in the public sector of enterprise in their dealings. The hon. Member for Stechford talked about the price of shares, especially with regard to the Savoy as though it was something very wrong that they should have risen.
  There is an element of truth in what he said, but how much more fortunate would he have been if he could have quoted any share in the public sector that has gone up. We on this side of the House remember what happened to "Daltons" and many other stocks of nationalised interests that have been put up.
  Mr. Albu: Has the hon. and gallant Gentleman seen the reports of the steel companies?
  Colonel Crosthwaite-Eyre: I am not talking about companies but the value of stocks issued by the late Government. Perhaps the hon. Gentleman would listen and then his interruptions would be of more value. What has happened is that since 1938, whilst there has been a considerable amount of restraint in demands for wages, there has been a far bigger restraint in dividends.
  Figures are given in the Press this morning which show that, between 1938 and the last available date, while wages have gone up 180 per cent., dividends have gone up only 60 per cent. It might be more realistic to take the period between 1946 and 1951, which is a post-war period. There again, whereas dividends have gone up by only 40 per cent., wages have gone up by 60 per cent.
  I feel, and I say it without any hesitation, that it is time that we realised that investors are equally entitled to a larger share of a larger national cake. [Hon. Members: "No."]

  1405
  I say that without any fear at all. Why should they not? There seems to be some idea among hon. Gentlemen opposite that the investor is a great moneyed gentleman. There seems to be the idea that there are very few of them and that they are immensely rich. Nothing could be further from the truth. A recent investigation into the holdings of ordinary shares in companies showed that 70 per cent. to 80 per cent. of such shares are held by people who invested less than £100.
  Mr. Albu: In each company?
  Colonel Crosthwaite-Eyre: In each company. The hon. Gentleman may think that he has scored a debating point, but is it likely that the big investor will go round investing only £100 in each company so as to try to describe himself as a small investor? The idea is nonsense. It is a typical remark by the hon. Member.
  Mr. Albu: Can the hon. and gallant Gentleman tell the House how many there are?
  Colonel Crosthwaite-Eyre: No. What is true is that the vast majority of British industry is owned by the small shareholder, and his interest comes from his personal savings from the amount which he has been able to put by, generally during a lifetime of work, in order to give himself a settled income when he retires. It is time that we realised that these people are equally entitled to have a further and better share so as to promote their way of life. That is my conviction. It is a view from which I will not diverge.
  It is equally true if we assume—as hon. Members opposite do—that the people who own industry are the great moneyed investors, that it does not matter to them how much dividend they get. They are taxed so heavily that even if one accepted the figures given by hon. Gentlemen opposite, it could not make the slightest difference to their net income. It would be taken away entirely by the present rate of taxes.
  It is the same with capital profits. Why should not the small investor be allowed a capital profit if he puts his money into shares with prudence and foresight and, as a result, those shares go up? If he puts money into a gold mine why should not he be entitled, if the shares go up,
  1406
  to reap the benefit of the risk he has taken? There is no reason at all why not, except the prejudice put forward by hon. Members opposite—
  Mr. FoIIick: On a point of order. We are not talking about shares but about take-overs. Surely the debate is about take-overs.
  Mr. Deputy-Speaker: I always imagined that shares were taken over.
  Colonel Crosthwaite-Eyre: May I thank you for your Ruling, Mr. Deputy-Speaker, that it is impossible to make a take-over bid without acquiring shares.
  We have heard of these take-overs which are alleged to bring great capital profits. The only case which has been advanced is the one by the hon. Member for Stechford about the Savoy. I am willing to give him everything he says about the Savoy case. It was thoroughly bad, and I think that every section of responsible opinion attacked it. But he would not be able to tell me of another single occasion in which a capital profit of this nature had been made. There is no such evidence whatsoever. I have gone into this matter with great care, and if he or any other hon. Member opposite can bring any evidence which will bear investigation, we shall be grateful to hear about it.
  May I also refer to the vague fears—and again this is what I disliked so much in his speech—vague fears which he raised, without ever producing concrete examples, except again the case of the Savoy, to show on what they were based. He talked about how people might sell their assets, how they might divert them against what he called the national interest in the feathering of the nests of the people who bought them. There is no evidence whatsoever in any take-over bid of something like that having occurred.
  The only evidence available shows just the reverse. In a case such as I have quoted, that of J. Sears and Company, the real truth is that no one would make a take-over bid unless, in his prudence and with the consent of his colleagues, he knew he could use the assets of a company more appropriately and more efficiently. That is a fact which hon. Members opposite acknowledge with lip-service, but do not realise to be the real truth. I suggest that before asking, for committees, before considering all these

  1407
  allegations which appear on the Order Paper, it would be well if we had a little more information.
  I think it was the hon. Member for Edmonton who talked about the Isle of Man Steam Packet Company. He again forgot to tell the House that the first thing Mr. Jay came to do after his bid had been submitted was to offer to talk to the unemployed in the Isle of Man to see how far the assets of this company could be used to better advantage to meet the special unemployment problem in the Isle of Man. Surely it is necessary that the House should be informed of these things before we listen to all these vague innuendoes. The truth of the matter is very simple. Hon. Gentlemen opposite do not want any profit to accrue to the individual. They have an intense dislike of it.
  I am afraid that they have another idea at the back of their minds, which is that the cheaper they can keep the price of shares on the Stock Exchange the more easily they will be able to further their nationalisation programme if they ever come back to office. [Hon. Members: "No."] Hon. Members opposite may say "No," but it is remarkable that the right hon. Member for Leeds, South (Mr. Gaitskell), who at the time I am referring to was the Minister of Fuel and Power, spent a long time explaining that the Stock Exchange was the mirror of truth, that the share values displayed on the Stock Exchange adequately represented the sum it was fair to offer to the investor. Both he and his colleagues spent a long time proving that when they took over great industries and paid Stock Exchange prices that they were dealing fairly with the shareholders.
  The hon. Member for Edmonton and the hon. Member for Stechford have made it clear that they do not believe that Stock Exchange prices represent fairly the value of companies. They do not want to see those prices represent fairly and adequately the value of companies, so that one is justified in saying that it would suit their political aims if those prices were depressed.
  I hope that the Chancellor of the Exchequer will have nothing to do with this Motion, which is not founded on any evidence, but is designed purely as spiteful and vicious party political propaganda. I
  1408
  should like the Chancellor to state that he will have no part in depressing the investor, but rather that he recognises the vital part played by the small investor in the economic life of this country. Hon. Members on this side of the House realise the part played by the thrift and initiative of the small investor in our full economic recovery. I hope that my right hon. Friend will say this and that he will couple with it the comment that those who, through their initiative and effort, benefit the community should have a just and fair reward.
  5.15 p.m.
  Mr. W. T. Williams: The hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) might, as it were, sit in the place which could be called the apotheosis of financiers—and I, who make no claim to be an economist or anything of that kind, am somewhat encouraged by his speech—but he appears to me to be the epitome of a quip which I once heard, that if all the economists in Britain were put end-to-end they would still point in all directions. That is inevitable when economics are divorced from what I may perhaps be permitted to call political morality and social morality.
  These take-over bids, like that of the Savoy, quite rightly cause alarm. The hon. and gallant Gentleman is not prepared, and nor would any other hon. Member be prepared, to defend that kind of activity. We are all agreed that it is a bad thing that purely speculative transactions should occur, and, as the "Manchester Guardian" put it. that a few quick-witted gentlemen—I beg your pardon, Mr. Deputy-Speaker, I have got it wrong, the "Manchester Guardian" did not speak of quick-witted gentlemen, but a few quick-witted City men—should carry out financial raids of this kind.
  These take-over bids serve no social purpose and achieve no end other than that of lining the pockets of adventurers. It is understandable that in this extreme example even people who support the general practice are themselves disgusted. It would apear to me—and it is about this that I wish to speak—that it is these extreme examples which point to the real danger of things which, in normal practice, are not complained about. For there is really nothing in these operations which

  1409
  is not in the classical or, perhaps, supra-classical view the normal financial practice in this country, and indeed in the whole Western world. They are the logical conclusion of things which, if not carried to their logical conclusion, arouse no complaint in particular from right hon. and hon. Gentlemen opposite.
  It seems to me that the true significance of these events lies in the fact that these take-over bids do not so much reveal any evil in themselves but rather the danger inherent in a pattern of society in which they are. As the hon. Member for Kidderminster (Mr. Nabarro) said, they are not only possible, but legally possible. It would appear that the rottenness of some of the fruit of this tree is born out of the fact that the roots of the tree themselves are rotten. As long as company finance in this country is permitted to proceed upon the lines on which it is now operated, this kind of thing is ultimately inevitable.
  As I see it, this is a matter not so much of economics but of social philosophy. If an inquiry were held within the terms of reference asked for, it is my opinion—and I would agree that I am perhaps more radical in this than some of my colleagues—that such an inquiry would achieve little more than ensure that financiers who do not want their activities inquired into would run to cover for a while. The real sin is to use money as an end in itself, and not as a means of achieving a society in which all classes of people might live with decency and dignity.
  I am one of those who makes no claim to much knowledge of finance but who feels that there is something rotten in a State in which this kind of evil—which is repudiated even by the adherents of the system—happensmore than once. The activities of the take-over bidders perform a social evil far greater than any financial good they might do. They create in the minds of ordinary people a feeling of unrest, and in particular persuade working people that, in the distribution of wealth, the scale is being tipped against them. That is a matter of sociology and moral philosophy that must profoundly disturb those who are concerned to see Britain, and the world, a decent place for decent people to live.
  I know that hon. Gentlemen opposite—and I suppose their opinion is shared
  1410
  perhaps in some cases on this side of the House—quite sincerely hold the view that, without a capital or profit motive—for which I have no bitter hatred, although I do not like it—finance would not be forthcoming, directors would not direct and commerce would cease. Many people believe quite sincerely that the evils in this system are necessary evils because the system, on the whole, leads to "the greater good of the greater many." I suggest, however, that at the same time as the great joint stock companies grew during the last century and capitalism moved into its present phase, there has been a less spectacular, but sounder, and ultimately a much more socially important development in this country, which has spread to all parts of the world.
  I refer to the co-operative movement, and here I declare my own interest. I am a co-operative Member of this House, but I have not great vested interest in the movement. Indeed, I have insufficient capital to hold as many shares as I would be entitled to under the Industrial and Provident Societies Act. The co-operative movement has profound social significance, and I would commend it to the House as being probably the most significant development in this country and a means of developing an alternative form of capital, activity, and industry which could be of greater help to mankind than these rather unreal incentives described by the hon. and gallant Member for New Forest as being absolutely essential for capital development and to keep the wheels of industry and commerce turning.
  Sir William Darling: The hon. Member must be aware that some societies, and particularly the London Co-operative Society, have entered into a number of take-over bids. The London Co-operative Society took over a large store in Camden Town some time ago.
  Mr. Williams: I do not complain when other people score debating points. I have no objection to take-overs; but the whole gravamen of my argument is that something which serves a socially useful purpose and assists in the creation of a society in which people can live with dignity fulfills its existence. I do not criticise all take-overs. If, by them,

  1411
  Mr. Clore ensures that the people who work in Sears get a better living, that is, in itself, desirable. What is undesirable is that, in doing these things, these people do not give their primary, secondary or even tertiary concern to the welfare of the people employed; their concern is to collect a profit, as Mr. Samuel collected a cool half-million pounds profit.
  I am not asking other people to share my view that, in spite of any special advantage that might be created, any financial benefit that might accrue, any clearing out of incompetent or undesirable directors that might be achieved by these take-over bids, they are, in themselves, so socially evil that their ultimate social significance outweighs any good they might achieve casually and, as it were, by the way.
  The merit of the co-operative movement, on the other hand, is that the benefits from any take-overs that may occur—for example, the case of the London Co-operative Society—do not accrue to any one individual. There is no artificial dealing in shares; no complete lack of interest in the organisation and running of the society so characteristic of modern finance and shareholding. Shares in the co-operative society are withdrawable but not transferable, and there are no share transactions between shareholders. Dividends are paid out in proportion to purchases made, not on the value of shares held. Distribution of surpluses is not a function of money, but of an active and significant participation in the dealings of the society itself. Co-operative shares are always at par, and their value does not depend on dividend expectations, because it is the member of the society—the person who deals with the society—who receives a dividend and not merely a shareholder with no interest in the running of the organisation.
  The method of running the co-operative society has been tremendously significant socially, because of the contribution it could make to the creation of the more just and equal society in which I believe. However worthy or powerful a man may be, he cannot buy himself into a dominating position in a co-operative society. He cannot hold shares worth more than £500 and cannot take over other people's shares, because that is expressly made illegal. Even if Mr. Samuel wanted to,
  1412
  and could buy a huge block of shares, it would avail him nothing in terms of voting power. In the society one man or woman has one vote—no more and no less.
  The real point is that it is people who count, and not money. I gather that there are hon. Members who would not want to be members of a co-operative society, but its membership is easily known to everybody. Its list of members is open to inspection, but it often takes a Board of Trade inquiry to discover who are the shareholders in big joint stock companies. In the case of the co-operative societies there are no nominee shareholders, there is no secrecy, and no need for a Board of Trade inquiry to ferret out the truth.
  Although it is the case in the co-operative societies, as everywhere else, that there is a great deal of apathy on the part of the general run of members, and most members are not actively concerned with the affairs of their society, there is no reason why members in their thousands should not take an active part in its conduct. A member of a co-operative society votes because he is a person, and not because he happens to hold a block of shares which gives him privileges and advantages over others.
  Mr. Deputy-Speaker: Order. The hon. Member is getting a little away from the Motion.
  Mr. Williams: With respect, Mr. Deputy-Speaker, this Motion suggests that an inquiry should be held and that the committee which carries out the inquiry should be empowered to suggest remedies as well as to investigate facts. I suggest, for the consideration of the Government and hon. Members, that if and when this inquiry is undertaken it might be very profitable to consider whether there are not other ways of keeping industry and commerce going than by means of these joint stock companies.
  The retail co-operative societies, with shares whose value do not change, with fixed dividends, and with limitations laid upon them by law and in practice, have successfully accumulated over £225 million in capital and have developed, in the Co-operative Insurance Society, the Co-operative Permanent Building Society and the Wholesale Society, a tremendously powerful contribution to the life of this country.
  Sir W. Darling: On a point of order. Should not the hon. Member declare his interest?
  Hon. Members: He has done so.
  Mr. Williams: I am grateful to the hon. Member for that interruption, because it shows how much attention hon. Members opposite pay to speeches made by hon. Members on this side of the House. The hon. Member was present when I declared my interest. It appears that, on economic grounds alone, this practice which has grown up in modern capitalist society is undesirable, but, apart from its undesirability on economic grounds, there are also political grounds. Even from the point of view of morals, the assumption that, within the law, it is right for people to do the kind of thing with which we have been concerning ourselves today, should be inquired into, and I suggest that when this activity is undertaken far more consideration should be given to alternative forms of building up our industry and commerce than has been the practice in years gone by.
  5.35 p.m.
  Mr. G. P. Stevens: The hon. Member for Hammersmith, South (Mr. W. T. Williams) clearly believes—as he said with great sincerity—that take-over bids spring from a financial system which is evil throughout. Our debate this afternoon is too short to enable me to reply to that very very large proposition, although I shall be very happy to do so on a suitable occasion, on the same high moral plane on which he pitched his speech.
  I wish I had time to continue my friendly though acrimonious correspondence with the hon. Member for Edmonto (Mr. Albu) in the columns of the "Daily Herald," on the theory of ordinary dividends in relation to inflation. I should have thought that inflation is certainly a form of risk. I should like to express my very cordial agreement with one thing which the hon. Member for Edmonton said. He was deploring the remoteness of many individual shareholders, and he told us a story of the rather depressing experience of a girl friend of his called "Frustrated."
  Mr. Albu: She is not my girl friend.
  Mr. Stevens: She must have been the girl friend of the hon. Member for Stechford (Mr. Roy Jenkins).
  1414
  I could not agree with him more. I hope that, realising the situation as he does, he will henceforth—as he has not done in the past—bend his energies towards lowering the rates of death duty on private companies. That is one of the reasons why remoteness has sprung into the relationship between shareholders and their companies.
  The Motion deplores the recent manifestations of take-over bids for two reasons. The first reason is that
  "they have put large, untaxed capital profits into the hands of certain individuals.…
  and the other is that they have
  "seriously undermined the policy of dividend restraint."
  I notice that in all the speeches which have so far been made by hon. Members opposite not a great deal has been said about the question of large, untaxed capital profits. Far more has been said about undermining the policy of dividend restraint.
  I am not surprised. When I saw the Motion on the Order Paper I was puzzled. I wondered if, in Socialist eyes, there was something inherently anti-social and evil about the receipt of large, untaxed capital gains. I wondered if there was something inherently evil in the receipt of football pool winnings, or in cashing in on the paper profit made by buying a house in 1937 and selling it at an inflated price in 1948, or even in 1954.
  I wondered what was the objection, in principle, to large, untaxed capital profits. If the right hon. Member for Leeds, South (Mr. Gaitskell) believes that all large, untaxed capital profits should be brought within the net of the Inland Revenue, I hope that he will tell us this evening whether he thinks that, "Vote for me and let me tax your football pool winnings" would be a wonderful election cry. That is really what this Motion means, if it means anything at all, which I doubt.
  I leave that manifestly absurd part of the Motion and come to the part which is at least supposed to have some kind of meaning—the part which deals with the undermining of dividend restraint. We have heard a great deal about that. If I knew nothing whatever about the history of dividends in the last 14 or 15 years I might have thought, as the "Daily Herald" has so frequently stated

  1415
  in the last few weeks, that large and powerful organisations have been distributing an ever-growing quantity of largesse to their wealthy shareholders.
  I have taken the opportunity which is accorded to hon. Members of this House to obtain from Her Majesty's Stationery Office an interesting booklet, which I commend to hon. Members opposite. It is Cmd. 9030, and is the 96th Report of Her Majesty's Commissioners of Inland Revenue for the year ended 31st March, 1953. There, instead of party propaganda and the sort of language that comes from Transport House, one gets the true and factual story with regard to what has been happening in relation to dividends in the last 15 years.
  In this book the results of companies are treated as a percentage of their gross proceeds on sales, and that is treated is 100. The trade and industry of the country are split up into 14 convenient groups. I shall not bore the House with the figures for all 14, but let me take one group, chemicals. The percentage of gross proceeds paid away by way of dividend in 1938–39 was 14·6 per cent.; in 1951–52, the last year for which figures were available—and this book was published only last month—the percentage was reduced to 4·6, which is a reduction of 68·5 per cent.
  In the case of the electrical group, dividends expressed as a percentage of takings were down from 6·4 per cent. in 1938–39 to 3·1 per cent., less than half, in 1951–52. If the stories we have been hearing today of the rising trend in dividends, the abuse of the quest for dividend restraint, and all that kind of thing are true, why do not these figures show it?
  Mr. F. Beswick: These comparisons of amounts distributed with total turnover are misleading. Would not the true picture be obtained by comparing the total distribution with the amount of money originally put in by the shareholders?
  Mr. Stevens: There are some children on both sides of the House, but I have never heard such a childish question as that.
  Mr. E. Fernyhough: Answer the question.
  Mr. Stevens: I will certainly answer the hon. Gentleman's question. How can we have a fairer comparison than that of the gross proceeds on sales one year with the gross proceeds of another, and split them up into the various slices of the available cake? That is precisely what these figures do.
  If the hon. Gentleman the Member for Uxbridge (Mr. Beswick) really thinks what he says is correct why did he not get in touch with his right hon. Friend the Member for Leeds, South who, when he was Chancellor of the Exchequer, had a great deal of responsibility for the facts that are published in this booklet? Why did he not get in touch with him and say, "Sorry, chum, you are doing it all wrong. You ought to do it the other way"?
  Mr. Beswick rose—
  Mr. Stevens: I have given an adequate answer, and if the hon. Gentleman does not understand it, I suggest he reads the OFFICIAL REPORT tomorrow to study it.
  I admit that these figures are a year out of date. They go only up to 31st December, 1952, and we have been concentrating today chiefly on the year following, but I pray in aid "The Times" in support of my own experience and observation. If one looks at the whole gamut of the trade and industry and finance of the country, it is always possible to pick out, as the hon. Gentleman the Member for Stechford did with such felicity, such glee, such practised ease, some particular example to suit one's case. "The Times" tries to do these things more objectively, and dealing with last year's results it says today:
  "The rise in dividends has lagged far behind the rise in profits and far behind the rise in wages and prices. Many individual companies have lagged so far behind that the market value of their shares is much below what it would be if the board paid dividends more in line with the 1954 level of profits, wages and prices."
  There is a fair and objective statement of what has happened.
  I was glad that, at any rate, some hon. Members opposite admitted that some share take-over bids can be good. Of course, there is nothing new in take-over bids. They have been going on since

  1417
  the first joint stock company was formed nearly 100 years ago, and in some forms they are good, for they inject new blood into industry and can put a board of directors on their toes, or, in the case of very successful bids, enable the bidders to put their own people onto the board of directors and so give a new impetus to the business.
  The real trouble has been that direct taxation in recent years has been so high that the income game has not been worth the candle for the merchant venturer of the very best type. If any hon. Gentleman opposite does not like the term "merchant adventurer" I commend to his attention the valuable work done by a company with which I am not in any way associated, the Gallant Company of Adventurers Trading into Hudson's Bay. I think that if we had a few more merchants of that sort we should have no need to feel any gloom about the future.
  There was a 6d. reduction in the standard rate of Income Tax last year, but even so only Is. is left out of every £ in the top ranges of incomes. The consequence is that the objective of the take over bid has tended to change. It has not wholly changed, but it has tended to change into activities which, if well devised, bring to the people who make these bids a profit which is not caught in the taxation net. I agree that that as a practice is lamentable, and I believe a reduction in the standard rate of Income Tax would put that right.
  This Motion comes ill from the right hon. Member for Leeds, South, who was principally responsible for the three greatest take-over bids in the history of this country, the bids for taking over the fuel and power enterprises, the transport businesses and the iron and steel businesses. This is not the time to talk about those, but a great many people deplored those particular take-over bids more than any that had occurred before them. If the taxation of incomes of individuals and of limited companies can be reduced to reasonable proportions these new forms of take-over bids will not be necessary, and the old form of take-over bids will continue to play its part in developing the trade and industry of this country for the benefit of all.
  5.47 p.m.
  Mr. John Strachey: Whatever take-over bids are or may be, and whether they are successful or unsuccessful, and whatever their motives are, good, bad or indifferent, their effect is to put up the rate of dividends. There can be no doubt about that whatever, and it is a thing we are seeing in the Stock Market today so very sharply.
  What we have to consider today is the breaking through of the barriers of dividend restraint, which had existed up to 1951, and about which hon. Members opposite kept quoting figures to show—
  Mr. Stevens: The right hon. Gentleman said up to 1951. I did say quite clearly up to 1952.
  Mr. Strachey: Those were not the figures to which I was referring. I was referring to hon. Members who had spoken earlier, who quoted figures up to 1951, figures which showed a great deal of dividend restraint.
  The point is that after that there has not been that restraint, and in recent months, above all, it has broken down, and the battering ram that is breaking it down for good or evil—hon. Members opposite think for good—are these take over bids. The effect of dividend increases and of the capital gains that go with them, that are indissolubly associated with them—anybody who looks at the Stock Market can see that very easily—is a stark counter-redistribution of income towards the well-to-do. There can be no doubt about that whatever.
  If the hon. and gallant Gentleman the Member for New Forest (Colonal Crosthwaite-Eyre) is in any doubt about the number of shareholders there are, he has only to look up one of the books on the City of London by the late Hargreaves Parkinson whom, I am sure, he will accept as an authority on the subject, to see that there are about a million and a quarter, say 3 per cent. of the population as a whole. Those are the people benefiting. It is not a few hundred, of course; it is not a few millionaires; but still it is a very narrow section of the population who are the people benefiting from the extraordinary financial game going on today.

  1419
  That counter-redistribution of income will have the most marked sociological effects. It will make nonsense of the appeal to the trade union movement for restraint in wages. If it is thought good to go back to free-for-all laisser faire private enterprise, good to have take-over bids and unlimited dividend distribution, how can we ask the organised workers of this country to show restraint in using their economic power and their economic leverage? When hon. Members opposite support this kind of policy they should think of the consequences in the new world in which we are living and in which all the economic power is not on their side. It can have very different consequences indeed from those which they expect.
  I have in mind a second very important consequence. I believe that the general raising of the level of dividend distribution has the opposite effect to that which is claimed for it. It has been held that it helps the accumulation of capital. I believe it has exactly the opposite effect. The main source of the accumulation of capital—and we all agree, on all sides of the House, that this accumulation is of the utmost importance today—lies in undistributed profits. The main way in which this country accumulates capital and is able to invest in new equipment is by keeping dividends down.
  It is by the great public companies of this country not distributing their full profits, but reinvesting them, not necessarily, even, in their own company—not necessarily ploughing them back; for they can invest their reserves in each other, as it were, so that the capital may circulate between firm and firm and industry and industry. It is precisely by the raising of the dividend level that this collective or semi-collective accumulation of capital is dissipated.
  Furthermore, the higher dividends paid out to the shareholders today are by no means all saved. A considerable amount will be spent. I believe it has the effect of dis-accumulation, which is precisely the opposite effect to that which hon. Gentlemen opposite claim.
  To my mind, the chief interest of the debate today is that it has been held at all. In the older form of capitalism, the one for which hon. Members opposite still hanker, there could be no criticism
  1420
  of take-over bids or increases in dividends. The way in which the capitalist system was supposed to work was precisely by maximising profits in all circumstances. By means of the hidden hand of Adam Smith, that was supposed to maximise the public interest.
  The very fact that the increase in dividend distribution, which is the real essence of this debate, is being questioned, and questioned not only by us but also in that uneasy article in "The Times" today, shows the change in the social and economic climate in which we are living. The great corporate bodies, the great companies of this country, have at least partly realized that they are no longer simply profit-spinning organisations, that they are no longer simply organisations which have one duty and one duty alone—to maximise the distribution of profits to their shareholders.
  It shows that the mental climate of the country is changing. It shows that at any rate the major public companies of this country have many duties and many obligations, and that their obligation to pay some return on their borrowed money, whether on preference shares or an equities, is only one of those obligations. In addition, there are their obligations to their employees and, to my mind the major obligation, their obligation to the community to carry on the productive life of the community.
  What we say on this side of the House is that the take-over bid, this battering ram which has broken down dividend restraint, is carrying the country back from the point which it reached and at which it was seen that our major productive units were no longer simply profit-making organisations at all costs and in all circumstances; but were becoming national institutions: that they were becoming—and this is what hon. Members opposite do not like—semi-socialised institutions. The take-over bid is making us regress from that back to the older conception of capitalism as it existed in this country right up to the last war—the conception of it as a pure profit-making organisation.
  Hon. Members opposite must realise that that will never work again. It is only in so far as the major organisations, the major companies of this country, realise the changed social climate in

  1421
  which they are working, it is only in so far as they show the greatest restraint in their dividend distribution, that the system of which they are a part will be tolerated.
  5.58 p.m.
  Sir Walter Fletcher: The hon. Member for Stechford (Mr. Roy Jenkins), who moved the Motion, and the hon. Member for Edmonton (Mr. Albu), who seconded it, made a very successful take-over bid for the time available for the debate, occupying over an hour and leaving very little time for other hon. Members. As a consequence, I will cut as short as possible what I have to say.

  Every age brings in new words. Recently, "disinflation" and "convertibility" have come upon us. Now we have "take-over bids." The hon. Member for Stechford admits that these have always been known. He said there were only two categories but, as my hon. Friend the Member for Langstone (Mr. Stevens) said, there is a third which is the most reprehensible of all. That is the Government take-over bid, where the market has been carefully rigged against the shareholder by the Government.
  That was the take-over bid of the Bank of England shares and the take-over bid of the nationalised industries, where the shareholders never had a chance of getting a proper value for their shares because the Government of the day most carefully saw to it that there was a delay in payment and an entirely wrong system of fixing prices.
  Mr. Follick rose—
  Sir W. Fletcher: I cannot give way.
  We have to go back a little way to understand this situation because, to my regret, this afternoon nearly everybody has discussed the symptoms without discussing the malady. What the take-over bid is based on is the delayed action effect of the catastrophic fall in the value of money. We heard, 70 times seven, from the right hon. Member for Leeds, South (Mr. Gaitskell), when he was Chancellor of the Exchequer, in clear-cut terms," We shall not devalue." But we did devalue to the extent of about 40 per cent. The delayed action effect, which has taken several years since then, is the
  1422
  main cause of the situation which allows the take-over bid.
  Let me prove that. Suppose I am a Belgian citizen living in Belgium and I hold in this country shares in a hotel business. On the day on which devaluation to the extent of 40 per cent. takes place, I say to myself, "The asset is worth 40 per cent. more and should rise to that extent." But it did not happen at once. It has happened only very slowly. Those of us who have seen three devaluations in France since the end of the war have seen this strange effect: on the first two occasions of devaluation, prices have adjusted themselves very rapidly, but on the third occasion the adjustment has taken place only very slowly.
  There has been this fall in the value of sterling. We have not noticed it in this country, but it is there. Let me prove it. Let us take the hotel business and the example of a hotel built in the West End of London 50 years ago. It has been maintained year by year, out of profits, in the original state of being a first-class London hotel—the state in which it was originally built. It has had its face lifted several times and quite horrible, tortured, steel furniture has taken the place of good club upholstered arm chairs. Tweed has replaced brocade. But the service remains admirable and the hotel is today exactly in essence the same as when it was built 50 years ago.
  It has been maintained out of revenue in perfect condition. It has the same perfect service. Its intrinsic value has not altered in any way at all. Its replacement value has gone up by 150 per cent. That proves, if any proof is needed, my contention that the real difficulty is the catastrophic fall in the value of money, which was not mentioned by the mover or the seconder of the Motion.
  Of course, when people see that the replacement value is very different from the book value, when assets were being maintained out of profits, the take-over bid is the natural result, but it is only a partial remedy. The take-over bid is a very useful corrective from time to time, but it puts the directors in a difficult position. Neither the mover or the seconder of the Motion were present in the old days of the Finance Act which arose from the Report of the Cohen Commission. I should like to go back to that,

  1423
  because it was then that we saw the main difference between the two sides of the House.
  All the way through that Committee stage right hon. and hon. Gentlemen on the other side of the House looked upon the directors and the shareholders as being natural enemies and having no community of interests—one had to be protected against the other—and huge safeguards were put up in the way of accountancy, it being forgotten that 75 per cent. of the shareholders did not read accounts and 90 per cent. could not understand them. That may be true of directors to some extent. We on this side of the House believe, by and large, that there is a community of interest between directors and shareholders.
  Let me get back to my hotel business. What is the primary duty of the director of a company? It is not only on the financial side of dividends. It is this. The shareholder invests in a company because it is the type of company into which he wants to put his money. Once he put it into the best type of London hotel, into textiles or something else, and, therefore, the first job of a director is to preserve continuity in the type of business of which he is a director. He is put in a very awkward position if the take over bid is made which would represent a very large capital profit arising from the delayed effects of the great inflation brought about by the extremely bad financial policy over five years of those who were in charge on the other side of the House.
  Mr. Follick: Two world wars.
  Sir W. Fletcher: And one American loan thrown away through the policy of the right hon. Member for Bishop Auckland (Mr. Dalton).
  Nevertheless, what is the truth of this matter? Dealing with the symptom rather than the malady, it is this. The spirit of private enterprise centred, as I will describe shortly, in the small man who gradually increasing his business, assisted by the machinery in the City of London, has opened up progress in the way of increasing business and the building of property of every sort. I am saying this because the Chancellor saw fit in December to send out a reminder, not a new notice, which I think was sent out
  1424
  with the best intentions, to the City of London not to encourage the wrong type—and there is a wrong type—of take over bid. That has been seized upon to exaggerate and use wrongly: it was not a criticism but an appeal.
  I want to say a word, declaring my interest as a director of one of the oldest insurance companies, on what has resulted from that. How have the great businesses of the City of London, the banks and the insurance companies been built up? They have been built up largely in this way. A small man, an auctioneer's clerk or a grocer's assistant, perhaps, in a small town, saves a little money. His Auntie May dies and leaves him a few hundred pounds, and he says, because he is interested and has a sense of real values, "I will buy a small block of shops with flats over them." They need improving.
  He says to his friend, whom he meets playing darts in the "local" in the evening, and who is the representative of one of the insurance companies, "Do you think your people would help me out. I have about £600." The insurance company sends down its assessor, and he says, "This is worth so and so; we can safely lend so and so."
  Mr. Follick: How much?
  Sir W. Fletcher: I will not give actual figures because they are not relevant. The man puts up his proportion of the risk, and the premium interest of that goes into the insurance company.
  He goes on doing that for 20 years, not always successfully. He has his failures. Some of the take-over bids on agricultural land a few years ago do not look so happy at the present moment. There is this point, too. In time the premium income accruing to the insurance company—the amount of business and new enterprise that flows from the association of small individuals gradually becoming bigger—is one of the greatest possible assets that we have in this country.
  The right hon. Gentleman who was Chancellor of the Exchequer paid many tributes to the insurance world for the magnificent work they did by way of their great dollar earning power. But they could never have existed if they had not gone in for finance exactly of that particular order.

  1425
  The real value of these companies is now much greater than it was. That causes a great many of the take-over bids. The shareholder is not hurt because he nearly always has the opportunity of cashing in and selling his shares. What we have to be very careful about—and here I agree with the Chancellor in many ways—is that the delayed result of inflation transplanting itself into take-over bids should not go too far or be too violent; but as a manifestation of its own it is a criticism of the catastrophic fall in the value of money more than anything else—and hon. and right hon. Gentlemen opposite were responsible for that.
  I have noticed throughout this debate and many others how every opportunity is taken by hon. Members opposite to drive a nail into the coffin of the City of London. That is egregious folly. They may not like the City of London because they do not understand it, but it is the instrument which they have to use for the development of the Empire and Colonies for many years to come. No doubt they sit back and in their secret planning say that the insurance offices provide the ripest plum on the wall, and that once they can get there they will cull it and eat it. That will turn out to be bitter fruit, because if the insurance companies were not run by private enterprise on the basis I have suggested, they would entirely lose their value, in exactly the same way as the Bank of England has lost its value, has now become an East End branch of the Treasury and can exercise no individual voice.
  Mr. Follick: Like the other central banks all over the world.
  Sir W. Fletcher: The Bank of England was not like other banks and that is why the money market remained in the City of London and not in any other city.
  I suggest that the eyes of the world are still financially centred on the City of London, and that the adjustment that goes on for a certain length of time, but not for ever, when translated into take-over bids should not be subject to some of the uninformed criticism which we have heard today. There have been people who have undoubtedly abused the process, and there may be others, but in the great proportion of cases it is a sort of renaissance. It is the infusion of new blood and new ideas and of a new sense
  1426
  of values which has taken a long time to come to the surface.
  It was staggering the day after we had announced that our currency was devalued by 40 per cent. that it had no effect. We move slowly in this country and not in the same way as other countries, but the effect is now being felt. When the effect is over, and under the admirable financial guidance that we now have, and when sterling is a climbing, instead of a sinking, currency, we shall find that this freedom which we possess to make take over bids, to change the directors of companies, and for directors to watch the type of business and not only the profit and the profit distribution, will be of great value.
  The profit distribution which has come in for so much criticism must to some extent follow and be guided by the value and purchasing power of money. The small rentier—and there are a great many of them—is still a useful source of investment and helps to finance Government loans and other issues, but if the purchasing value of the dividend that he receives is reduced by something like the 40 per cent. of the devaluation that the right hon. Member for Leeds, South brought about, his position is enormously worsened. We have heard nothing from the other side of the House other than talk about the benefit that it is. It is. not a benefit; it is making up a little bit the terrific handicap that was placed upon them by the devaluation which took, place.
  I suggest, therefore, a slightly different outlook on this matter. It would not be at all harmful if right hon. and hon. Members on the other side of the House were to look at these things as somebody resident not in this country but outside it. They would learn a very great deal and would see for themselves that the criticism that they have levelled, at such length and with such facility, without seeing the malady, was ill-founded, spiteful and done for purely political motives to harm the City of London and for no other reason at all.
  6.13 p.m.
  Mr. Eric Fletcher: This debate has already covered a wide field and I am sure that the hon. Member for Bury and Radcliffe (Sir W. Fletcher) will not expect me, therefore, to follow him in his argument about the effect of

  1427
  devaluation. I prefer to revert to the specified and more limited terms of the Motion.
  I have not yet heard in any of the speeches made on the benches opposite any reason why we should not have the inquiry which is all that the Motion asks. We have heard a number of alternative explanations as to why takeover bids have become so frequent in recent months, but we have heard no denial of the considerable ground for alarm in the country at these recent developments.
  May I summarise, quite briefly, what seem to me to be six evils that result from the abuse of take-over bids in the modern technique? I do not deny—every other speaker has mentioned it—that there have been a great many take-over bids, both in the past and in the recent past, that have been sound, legitimate transactions and have served useful purposes; but there have come to light recently a number of take-over bids affecting important companies which have produced in the minds of the public a considerable sense of alarm, calling first for inquiry and subsequently, as I think, for action.
  The six evils to which I refer are these. First, it looks as if very large capital gains have been made by certain individuals which are not subject to taxation. This has been disputed. We do not know the facts. If there were an inquiry, we should at any rate get an answer. There is no doubt that this can take place and the fact that as a result of Stock Exchange manipulations of this kind enormously large fortunes can be made in a few weeks and are not subject to taxation is regarded by a great many people as socially unhealthy and socially undesirable.
  Second, there cannot be any doubt whatever, that the fact that these large tax-free gains occur and the public knowledge that they occur produces a considerable psychological effect, at any rate, on all workers in industry. It is quite impossible to tolerate this kind of thing happening and at the same time to expect workers to observe restraint in wage claims. It is socially unhealthy and is calculated to produce a disturbing effect in industrial relations.
  I do not put it any higher than that as I am trying not to exaggerate the argu-
  1428
  ments, which seem to me to call for an inquiry. Indeed this subject ought not to be a matter of political division, because it is obvious from what has appeared in all sections of the Press, including sections generally favourable to the Government, that there is considerable disquiet and unrest. One has found this in recent weeks over and over again in articles in the "Financial Times," the "Economist," and so on.
  The third of the undesirable consequences that has emerged from these recent take-over bids—and this is an incidental evil which, I should have thought, affected Members on the opposide of the House and their supporters more than it affects most of those whom we on this side represent—has been the excessive Stock Exchange fluctuations. Take-over bids inherently give rise to rumours—sometimes false rumours, sometimes deliberately false—with the result that there is excessive and undesirable speculation—again, a most disturbing and unhealthy effect on the general finance and economy of the country.
  The fourth evil I need not stress, because the arguments for it have been put so forcibly by my hon. Friend the Member for Stechford (Mr. Roy Jenkins), who moved the Motion; and it is, perhaps, one of the most serious, if not the most serious. The fourth evil which, we contend, justifies our demand for an inquiry is that these take-over bids inevitably tend to promote excessive dividend distribution by all companies—not merely the companies in which take-over bids take place, not merely the companies which are threatened, or think they are threatened, with take-over bids, but among all corporations throughout the country, the vast majority of whom have for the last few years loyally observed the behest of successive Chancellors of the Exchequer for restraint on dividends.
  Now that these take-over bids are becoming so frequent, there is an inevitable tendency for all companies to increase dividend distribution. Whatever may have been the cause—and I am not arguing that with the hon. Member for Bury and Radcliffe at the moment—for the frequency of take-over bids, there cannot be any dispute about the result. They are bound to lead to an increasing extent to a policy of dividend distribution by all companies. That must be a bad thing. It

  1429
  must be contrary to the public interest. It must lead to a diminution of the reserves of available capital that are required for re-investment in industry in this country.
  The fifth evil that has been revealed in these take-over bids is the counter-measures that are taken to try to defeat them. The Savoy Hotel case is a glaring example of that. I do not know whether there are other cases or not. One hon. Member challenged us to give evidence of this, but it is not always easy to produce evidence of that kind.
  The Savoy Hotel case is symptomatic of the kind of unscrupulous and reprehensible device to which boards of directors are driven when faced with take over bids. It is quite true that in the Savoy case that device was eventually cancelled, and the company suddenly formed to take over the Berkeley Hotel was put into liquidation. But that episode is symptomatic of that problem and is one of the reasons which justifies an inquiry.
  What has happened? The Savoy directors' device was condemned in all quarters as unprincipled, dishonest and a breach of trust. Listen to what the "Economist" said about it:
  "It is difficult to find condemnation too severe for what the Savoy Hotel have done. They have set a precedent which can divest the shareholders in any company of their legal assets, leaving them wholly at the mercy of directors over whom they could be powerless to exercise any control."
  It is unfortunate that in the circumstances which arose there was no opportunity to test the validity of the Savoy directors' device, but I am perfectly certain—and I say this without fear of contradiction—that if that device had been challenged—and it would have been challenged if necessary—by any shareholder in any court of law, its legality could not have been sustained for a moment. But there was no opportunity to challenge it. I would say that the counter-steps taken in the Savoy case and perhaps in other cases throughout the country, have in themselves produced a state of things calling for an inquiry.
  Sixthly, and to come to the last point, I think the most important thing that has emerged in our discussion tonight and from previous discussions in the Press on this subject was touched upon by my
  1430
  right hon. Friend the Member for Dundee, West (Mr. Strachey) and other speakers, who drew attention to the changing nature of the whole conception of large important corporations in our social and political system.
  Hon. Members on both sides of the House have recognised that whatever the legal position may be—and I am glad that we have the Solicitor-General with us listening to this debate, because there is a very important legal aspect of this problem on which we should like to have the benefit of his views—de facto today in our social system directors of big companies have duties and responsibilities not merely to their shareholders within the limits of the Companies Act, but also to their employees, to industry as a whole and to the nation.
  I am sure that the Solicitor-General would confirm that there has been no change of the duty of directors of a company in the strict legal conception since the first Companies Act was introduced in 1861 and that it is the same now as it was 100 years ago. There is a legal duty to the shareholders and the shareholders alone, but there has come to be imposed upon that duty, and in some ways limiting it very considerably and sometimes introducing a conflict, a very widely recognised de facto obligation to regard not merely the interests of the shareholder but the interests of the employees of the company, and of the community as a whole. This is particularly so in the case of very large companies.
  If it were not so, how is it that government Departments are able so successfully to make appeals to companies to follow policies of dividend restriction and so forth? One takes the example of a company like I.C.I. It is a vast combine made up of amalgamations of many interests, which incidentally was built up as a result of a number of take-over bids. I am not criticising I.C.I. It is a most successful company.
  I do not know what my trade union friends would say, but I imagine that trade unions would prefer to deal with a company of that size than with such an undertaking split up into several small component parts. There are often advantages to employees, the staff and the nation resulting from amalgamations, but one of the consequences is that directors of a company of that kind have an

  1431
  obligation which transcends the limited obligations to their shareholders.
  I do not suggest for a moment that I.C.I. would be threatened with a take over bid, because the size of the operation would probably be too large to make it feasible, but there are all kinds of other companies up and down the land which are performing a national service and which respond to appeals which the Chancellor of the Exchequer makes, but which are threatened with take-over bids. Therefore, the one thing I had hoped would have resulted from an inquiry of the kind which we suggest in this Motion was some further evidence of how this aspect of our social problem works at title moment. I can conceive the difficulties in framing any amending legislation, but the day moist come when legal recognition must be given to the changing, de facto conditions that operate throughout the whole of the private sector of industry.
  I would add this. This demand for an inquiry is not confined to opponents of the Government. The need for some action was stressed in a speech the other day by Sir Harry Pilkington, President of the Federation of British Industries, reported in "The Times" of 22nd January, 1954. Indeed, when this matter was raised in the House, the Chancellor admitted that he was watching the situation and that he had taken certain steps, including a circular to the banks and the insurance companies.
  But may I remind the Chancellor of the Exchequer that the action which he took and announced in the House on 15th December does not seem to be efficacious, because the President of the Federation of British Industries called upon the Government in January to take further action? He pointed out that industry wanted investors with a genuine interest in industry, and he was concerned about the evil consequences that might result from the take-over bids. He called upon the Government to intervene, and he used these words:
  "But the Government can still exercise a control against that kind of abuse in more than one way."
  He listed one or two ways in which they could do it.
  I hope that the Chancellor of the Exchequer, having listened to this debate,
  1432
  will realise, forgetting some partisan political elements which have been introduced into the debate, that there is involved a widespread demand in various sections of the country, political, non-political, financial and industrial, for an inquiry into this matter to get at the facts, then to examine what are the consequences of these steps, and what action ought to be taken to prevent the abuses to which attention has now been directed.
  6.30 p.m.
  Mr. F. M Bennett: If I do not follow the speech of the hon. Member for Islington, East (Mr. E. Fletcher), he will realise that it is because I wish to keep my remarks short in order to enable other hon. Members to contribute to this debate. In the first place, I want to correct a misleading statement made by the right hon. Gentleman the Member for Dundee, West (Mr. Strachey), who has now left the Chamber.

  The right hon. Gentleman produced some figures, which I cannot say were right or wrong, to the effect that there are only about 1½ million shareholders in this country. From that he went on to deduce that these represented 3 per cent. of the population. That deduction of course totally ignores the fact that a substantial proportion of the population is under the age of 21 and therefore cannot hold shares. It also ignores the fact that in many married families the shareholding is probably in the name of the husband and is therefore a family holding. It also ignores the large trade union holdings of shares, which presumably hon. Gentlemen opposite would agree were held for the benefit of the trade unions' members. It ignores too co-operative holdings, trustee holdings and a wealth of others. Therefore, to suggest that a figure of 1½ million individual shareholders means that only 3 per cent. of the population of this country are shareholders is grossly misleading.
  I am pleased that in this debate we have at least heard a number of frank admissions from the benches opposite that there are good and bad take-overs. It is particularly appropriate because, as my hon. Friend the Member for Bury and Radcliffe (Sir W. Fletcher) said, those opposite, when in power, were not exactly guiltless in their political practice of

  1433
  take-over bids of one sort. I was particularly glad to hear mention of the Bank of England, because if ever there was a case of shares being taken over at an unreal value, it was in the case of the Bank of England. No account was taken for the shareholders of the fixed assets of the property in the City of London, to take only one item. I am prepared to suggest that the premises of the Bank of England in the City amount to a much more substantial sum than was handed out to the shareholders in what must be a record take-over bid of all time—I am quite prepared to give way to the perpetrator of this; if the right hon. Gentleman wishes to intervene.
  Mr. Hugh Dalton: May I inform the hon. Gentleman that, on the whole, I was astonished at the time at the small amount of opposition to that act of Socialism? There was much to-do about others later on, but when I took the line I did at the time, that we would treat the Bank of England stock as being the equivalent of Government stock, there was very little objection. It was taken over at the market values of that time and hardly anybody made any criticism.
  Sir W. Fletcher: The right hon. Gentleman did not recognise evil when he saw it.
  Mr. Bennett: The fact that little or no protest was made at the time makes no difference to facts. I cannot believe that the right hon. Gentleman would deny that it was a classical example of take over bids as we know them today. I have said there are take-overs of several sorts. Another one, of which we have not heard much criticism, is that in which a moribund company, or one making insufficient use of its reserves, is taken over by a more active one. That is obviously good, because it is in this way that fresh blood can be injected into our free enterprise system for the benefit of all of us.
  Now I come to the few specific examples mentioned today of evil takeovers. I was glad that nobody on either side of the House for a moment defended those cases, because no one would suggest that they are defensible. However, I have one or two words of caution to offer about the evils which we think will flow
  1434
  from them. It has been said that these result in large tax-free capital gains going by way of income to the perpetrators. I do not know, because I am not in the Inland Revenue, but it would be premature to suggest, that those who go in for those activities as a trading practice, whether corporate or individual, might in the long run be excused or be free of assessment for tax purposes; that is not for me to say.
  A more serious aspect of these few evil take-over bids is one which has received little mention today, and that is when the fixed assets of a company are sold to another business concern and then rented back. Serious because if we come on lean times or a slump, or a depression, which would be just when a company wanted its reserves most in order to keep going, it would be robbed of them.
  Mr. Gaitskell Mr. Gaitskell indicated assent.
  Mr. Bennett: I am glad to see the agreement of the right hon. Gentleman opposite, because I make no secret that to my mind this is the chief danger in those cases I have described.
  There is another aspect which must not be forgotten, and this is on the credit side. These occasional take-over bids, even of the bad kind I have mentioned, may, and probably do, have a useful purgative effect as long as they do not go on, for they may serve to stimulate some other concerns which are not making sufficiently productive use of their reserves to do so.
  In my concluding remarks I shall touch more on the reasons why we are having these troubles. My remarks will be much shorter than they would have been because my hon. Friend the Member for Bury and Radcliffe made this point so excellently and fully in his speech that he has saved me from taking up the time of hon. Members by speaking about the same thing, I have no doubt not nearly so well.
  In addition to the devaluation cause he mentioned, it is true, that I should have thought unarguable, that whether high taxation and dividend restraint are justified or not—I am not arguing one way or the other now—they have certainly contributed to creating a climate which is inviting certain people to adopt take-over bids. At the same time, the way in which

  1435
  tax has been levied at a higher rate on distributed dividends than on dividends held in reserve has contributed to a position where there are much larger reserves than might otherwise be held. And at a time of full order books in the past, when there was no excess of available labour ready to take on for new undertakings, I have no doubt that some concerns have not gone as far as they might have done in starting new enterprises.
  Finally, I come to the question of remedies. I cannot believe that right hon. and hon. Gentlemen opposite really believe that an inquiry and recommendations would accomplish much more than the publicity about these cases has already done. If there were to be an inquiry and the recommendations were to have any greater effect, they would have to be followed by legislation. As long as we have our present economic system and the present working of the City of London—I do not imagine that any of us anticipate an early ending of that—I cannot see how it would be possible legally to differentiate between the motives of different kinds of take-over bids and incorporate them in an Act of Parliament. Indeed, I would be anxious to hear suggestions as to how that could be done.
  Therefore, I think that the best way to cope with this undoubted problem is to leave things, as regards the short-term case, to the Chancellor of the Exchequer and the action that the Treasury and the Bank of England have already taken in issuing advice to the large financial institutions of this country as to the kind of conduct that they should adopt. I am perfectly confident that those institutions will live up to the high standard of responsibility which they have always shown. It is by that method, by advice and consultation, and by trusting to the sense of responsibility of the leaders of the big financial institutions in this country, that we are most likely to avoid too many examples in future of the kind of case about which we rightly heard complaints today.
  I should liked to have developed too the question of long-term policy, but this is not the time. I would just say that to avoid this kind of contingency occurring in the future, it might be well worth considering introducing no par shares,
  1436
  because a close study of that particular system shows that there are aspects embodied in it curative of this evil if it were ever to threaten to develop into a serious aspect of our economic life.
  6.42 p.m.
  Mr. Hugh Gaitskell: The hon. Member for Reading, North (Mr. F. M. Bennett) agreed with us that there was a serious problem here, and indeed I do not think that he questioned the analysis of the situation which has been put forward from these benches. His difference with us was on the remedy. He thought that it was sufficient to leave everything to the Chancellor of the Exchequer and that there was no need for an inquiry. I hope to try to convince him a little later that on the matter of the remedy there is a good deal more to be said for our proposal than he imagines.
  Generally, very little that has been said in the course of the debate has in any way controverted the clear, objective, and convincing speech of my hon. Friend the Member for Stechford (Mr. Roy Jenkins). Whilst various hon. Members opposite, and particularly the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) questioned his motives—I thought very unworthily—none questioned his facts. Questioning motives is just a political dodge, but questioning facts is a much more difficult operation.
  Indeed, the attitude of supporters of the Government on the back benches opposite has been rather curious. It seems to me that most of them have been prepared to admit the abuses, to say "Yes, the wrong things have been done and there are dangers here," but apparently they are not prepared to do anything about it. They are prepared to concede these weaknesses, but by way of compensation they set up Aunt Sallys and say that, of course, they are not against all take-over bids and that it is wrong to be against all take-over bids.
  We have never suggested that all take over bids are wrong. It is not our purpose to make any such denunciation, and it is certainly not our desire to support through thick and thin any board of directors who may happen to exist at the moment. Indeed, this whole subject throws a most interesting light on the structure of industry today, and particularly on the question of ownership and

  1437
  control. The fact is that in all large firms, or in all but fairly small firms, the direction today is overwhelmingly in the hands of a self-elected and re-elected oligarchy. So long as they do not make such a mess of the situation that the lethargic shareholders are stung into doing something about it, by and large they are allowed to carry on.
  I shall not suggest in criticisms which I shall make later on of certain take-over bids that directors who merely sit there and do nothing and who stick in the mud deserve any sympathy at all from any of us. Indeed, the situation in which they have all this power and are responsible to nobody is, to our mind, profoundly disturbing and is part of the situation that exists today which we think requires investigation.
  We also have the strong impression that this power that they hold today is sometimes a reason for inefficiency, that they are not stimulated sufficiently from any quarter to achieve the greatest efficiency, which we all agree is essential for our country. Sometimes, I would agree, a take-over bid is a healthy way of dealing with a situation like that. There is no doubt about it. The shareholders in a sense become organised, because somebody buys a sufficient number of shares to make his opinion felt.
  Nor, as my hon. Friend the Member for Stechford has made plain, would we question the very common case where one firm in an industry combines with another firm through amalgamation on getting control of the shares. But, unfortunately, there is also no doubt at all that in certain instances—and there have been quite a number recently—this has not been the character of the take over bids. On the contrary, there have been certain undesirable features about the whole mechanism, and certain equally undesirable consequences which have followed and, I am afraid, will follow what has been happening.
  My hon. Friend the Member for Stechford referred to statements made by the chairman of Barclays Bank, and the hon. and gallant Member for New Forest made a very odd reference to the chairman of Martins Bank. I should like to quote what Mr. Bibby, the chairman of Martin's Bank said on this matter of
  1438
  take-over bids. I thought that it was very much to the point.
  He said:
  "Too often the victims…are companies that have virtuously responded to dividend restraint and have financed expansion by ploughing back instead of by competing for capital in the open market."
  Nobody could say that Mr. Bibby was any particular friend of the Labour Party. Indeed, if I carried out the wishes of the hon. and gallant Member for New Forest I would read a good deal more of his speech, which would succeed in evoking cheers from the Government benches but would be irrelevant to this debate. But he said, in spite of his political prejudices, that take-over bids are aimed at companies that have behaved in what we would always regard as a highly public-spirited manner.
  My hon. Friend the Member for Stechford can take care of himself when attacked by the hon. and gallant Member for New Forest, but in defence of Mr. Bibby I must say that he is perfectly entitled to allow whom he likes to use the facilities of his bank, whether or not he happens to agree with that person. The prospect held out by the hon. and gallant Member that before one has a bank account one must find out what the chairman thinks about everything and whether he might decline the account is so extraordinary that I am surprised that he should have introduced it.
  Colonel Crosthwaite-Eyre: I do not think that the right hon. Gentleman wishes to misinterpret what I said. I said that before the hon. Member for Stechford (Mr. Roy Jenkins) quoted the banks he should make quite certain what was their policy and how they carried out the advice which he was so anxious to press upon the House.
  Mr. Gaitskell: I think that the hon. and gallant Member must be referring to something quite different. I was referring 1o the remarks made by the hon. and gallant Member about Mr. Wolfson of Great Universal Stores being a client of Mr. Bibby's. However, we will leave it at that.
  Sir John Braithwaite, the chairman of the Stock Exchange, very properly criticised some highly undesirable premature leakages and false rumours that had been flying round in connection with some of these take-over bids. I agree that, as far

  1439
  as that kind of thing goes, the Stock Exchange Council is able to take care of it, and I hope that it will watch it very carefully.
  In referring to this, the "Economist" went on to say something about the whole problem—and I hasten to add that the "Economist" sometimes takes one view and sometimes takes another.
  Colonel Crosthwaite-Eyre: I agree.
  Mr. Gaitskell: The "Economist" said:
  "Many people also feel that there are dangers in a situation where the best-known and richest bidders have the power of ensuring a temporary rise in almost any shares that they buy and with which they associate their names, and that one of these dangers is that they may bludgeon their way on to the board of companies that they could gut, as well as on to those of companies that could be improved by managerial disturbance."
  I think that puts our anxieties on this matter extremely well.
  I should perhaps be a little more precise and say that our anxieties fall into four separate categories. In the first place, we are concerned—as I think everyone is concerned in the light of speeches which have been made by hon. Members opposite—with the behaviour of some of the directors who were threatened with take-over bids. That is a matter to which we must return. I have in mind the Worcester Buildings episode.
  Secondly, we do take a serious view, for reasons which I shall attempt to elaborate, of the tax-free profits which were made in an important case. We are seeking information here, as we are in the whole field of this subject. We have never said that we know all about this, but we know sufficient to justify a demand for a further inquiry. We have some worries about the change in use of resources resulting from take-over bids to one of which the hon. Member for Reading, North referred, and I will revert to that topic. Finally, the most important matter of all is that we are seriously concerned with the consequences on dividend restraint and, therefore, on wage claims, which seem to us to be inevitable, following the present course of events.
  I return to the question of the Worcester Buildings episode. There is
  1440
  no need to record the facts again, as my hon. Friend has done that, but there we had a situation in which the directors of a company hived off part of the property—an important part of it—to a separate company and, by a device, put the control of that separate company entirely beyond the original ordinary shareholders of their own company. They put it in the hands of trustees who were to elect their own successors. That is a most extraordinary situation.
  I have already drawn attention to the gulf between ownership and control that already exists in a broad way. But here is an extreme case in which, even if the shareholders bothered to interest themselves in the affairs of the Savoy Hotel Company, they could have done nothing whatever to influence any decision made about the distribution of dividends, amounts put to reserve or the use of the premises of the Berkeley Hotel. I must ask the Government a very specific question here.
  Was the action of the directors in this matter within the law, or was it contrary to the law? If it was within the law—if there was no breach of the law being committed there—do the Government, nevertheless, approve of what they did; and, if the Government do not approve of what the directors did, when are the Government going to change the law? I think those are perfectly fair and reasonable questions for us to put. I think that the country in general, and certainly the City in particular, would be very glad to have an answer.
  There is another aspect to which I am afraid I must also refer. That is the rather remarkable way in which the directors of the Savoy Hotel changed their minds about the price that they were prepared to pay to Mr. Samuel for his shares. It will be recalled that he offered to sell those shares to the directors—I think that by then he held about 30 per cent. of all the shares, or more—at a price of 62s. 6d. They rejected that offer because they said it was an excessive price for them to pay and they pointed to the undoubted fact that Mr. Samuel had begun bidding for these shares when they were 28s. and must have acquired a very substantial proportion at a price far below 62s. 6d.
  It is said that they offered on their side to buy the shares for 40s. yet, two days

  1441
  later, they had accepted Mr. Samuel's original proposal for shares at 62s. 6d. Two conditions were attached—I do not know whether they laid down the conditions, but I know that these coincided. Mr. Samuel dropped his request for an inquiry by the Board of Trade and the directors of the Savoy agreed to put into liquidation the Worcester Buildings Company.
  That is really a most alarming development. It does suggest, as my hon. Friend said, in the clearest possible manner that they paid 62s. 6d.—more than double the original price of the shares—to avoid a Board of Trade inquiry. I should like to know what the Government think about that. I am not quite sure what the position of the Board of Trade is in this matter. When someone asks for an inquiry, is it possible for him to change his mind and to say, "Please do not go on with it after all"? I see that we have the President of the Board of Trade and the Parliamentary Secretary present. I think we should have a definite answer on those points.
  In any case, even if the Board of Trade was entitled to say, "We will not proceed with the inquiry because you have asked us not to," was it right in so doing in the light of what happened? Did not the whole episode call for inquiry? Yet we have not heard from the Government any suggestion that under the Companies Act such an inquiry is to be put in hand. The fact that there has been no statement from the Government so far is another very good reason for our Motion.
  It has been said by several hon. Members opposite that the only reason why we are bringing this Motion forward is that we wish to smear the City. Believe me, that is not our intention. The fact is that what has happened has smeared the City and we should like to see an inquiry which would clear the whole thing up. Surely it is useful when some very regrettable incident occurs—as occurred in Kenya not long ago—to have an inquiry to find out what has been happening and to clear the good name of those concerned.
  I pass to the second point to which we attach importance. That is the misuse of property. I would not deny that very frequently existing directors may be slothful in their habits and may not be putting the property of the company
  1442
  to the best use in the strict sense of earning the greatest profit. I was glad to hear what the hon. Member for Reading, North said, because the same point occurred to me. It is that the sale and re-letting of properties at very much higher rents is imposing on the company concerned a very much heavier burden. I am doubtful whether there is anything particularly virtuous about that change but there are some other aspects in this matter which at any rate call for some consideration. I do not press them too strongly.
  Not long ago I received a letter from a gentleman in Manchester about a take over bid, or a transaction of this kind, carried out by the company to which the hon. Member referred, the Great Universal Stores. The letter pointed to the fact that recently they acquired two firms—the Eccles Spinning and Manufacturing Company and Rylands and Sons. Rylands and Sons is a very large textile firm. According to my correspondent—I have done my best to check up on it—they have calmly closed down the first-named firm and dismissed 480 highly skilled workpeople, sold off the plant piecemeal and are using the one remaining weaving shed as a warehouse.
  In the case of Rylands, a very large firm which I understand they bought for about £4 million, and the assets are worth about £10 million, the same process appears to be taking place. I gather that they are closing down the spinning mill at Wigan, where a lot of people will be thrown out of work, the weaving department is to be closed down gradually and the Chorley dye works have already been closed down.
  One is bound to ask whether the Government are wholly indifferent to this question. Does it not matter at all that an important textile firm can be bought up in this way, a firm which had a very substantial export trade, and the whole business turned into a warehouse? I do not deny that there are difficulties in deciding when to intervene in these matters, but I think that the question is a fair one to raise. I hope that if the President, if not already familiar with the details, will look into the matter and see whether he is satisfied about what has happened. Apart from anything else, the workpeople would seem to have received extremely

  1443
  scant attention from those who bought up these companies.
  On the other hand it is a regrettable feature of the whole of this sort of business that the directors of the original company are in a position to bargain so as to take care of their own position. This is what Mr. Cowan, whose article was referred to by my hon. Friend, said about it:
  "As all practitioners in the take-over or deal traffic will agree as a rule the crucial point in such negotiations, for all that may be said to the contrary, is whether directors threatened with displacement feel that they will be adequately looked after."
  I dare say some of the workpeople cannot however fairly feel that they have been too adequately looked after.
  I pass to the third point, that of tax-free capital gains. I do not know exactly what happened, but we know two things, Mr. Samuel's company, the Land Securities Investment Trust I think it was called, appears to have made profits of about £200,000. According to the "Financial Times" which certainly appears to be well informed, no tax was payable on it so long as the money was not distributed as dividends. There As no doubt at all that the shareholders in this company took this for granted because the value of their shares increased after the deal by just about £200,000 in all.
  I wish to ask hon. Members opposite to put themselves in the position of workers, for example, in the engineering industry who are involved in wages disputes and whose leaders, on their behalf, are asking, not for hundreds or thousands of pounds, but for a half-penny more or a penny more an hour. What sort of feeling—[Interruption]—I ask the hon. and gallant Member for New Forest to contain himself and try to use his imagination—what sort of impression is made upon those people when individuals can apparently, by manipulation—I use that word because I think it is a fair word to use—achieve this enormous and apparently tax-free gain?
  One must take account of the state of public opinion on this matter. The hon. Member for Langstone (Mr. Stevens) asked why we did not object to football pools. It is a fair question, and I think I know the answer. The gains to the
  1444
  individual—if we are talking about the £75,000 pool—are so enormous that people say, "Good luck to you if you can get away with it." Anybody can enter a football pool, but anybody cannot go into the City of London and make a take-over bid and clear these enormous sums—
  Mr. Stevens: Would the right hon. Gentleman be good enough to estimate the odds against merchant adventurers making similar profits in the industrial sphere?
  Mr. Gaitskell: What I will do is to refer the hon. Gentleman to the quotation from the "Economist," which, as I said, sometimes takes one view and sometimes another. But the question which is clearly the point here is that the richest and most powerful investors to a certain extent have it in their power to achieve this result. No one denies that losses are sometimes made—[Hon. Members: "Oh!"]—yes, of course they are, but here we are concerned not with the whole question of whether a risky investment should receive a due reward but with a particular type of transaction, and incidentally a type of transaction to which many people outside our ranks take an extremely strong objection. I was frankly surprised that apart from the hon. Member for Reading, North there was not more criticism of these transactions from the Government side.
  I pass finally to the most important question of dividends. As my right hon. Friend the Member for Dundee, West (Mr. Strachey) said, there can be no doubt that in the vast majority of cases, certainly all the spectacular ones, these recent take-over bids have been in part caused—and I think this is accepted by hon. Gentlemen opposite—by the existence of dividend restraint and by the fact that companies have been paying out in dividends a smaller proportion of their profits than was previously the case.
  It follows, therefore, that if dividend restraint breaks down, if dividends are increased, there is bound to be a reduction in corporate saving. I am not the only person who makes that point. Sir Harry Pilkington, the President of the F.B.I., made it only the other day when arguing for an educational campaign—I thought rather hopelessly—to educate shareholders to accept and indeed to favour companies putting large amounts

  1445
  to reserve. For if we have to have an increase in dividends at least part of which will go into consumption it does affect the general level of savings.
  That is one point, perhaps the least although a fairly serious point. The other is the consequence on wages and here we cannot cut ourselves away from the history of this matter. In, I think, 1948, through the activities of Sir Stafford Cripps, we negotiated with both sides of industry an understanding about both wages and dividends. That understanding was faithfully carried out by both sides, and often I have paid tribute from the Despatch Box opposite to the way it was carried out. But I admit that in 1951 it was beginning to break down, and as a consequence I was obliged—because of the anxiety felt by everyone about inflationary danger—to indicate that if it went on we should have to introduce a compulsory statutory limitation on dividends. There is no doubt about it that there has been a further breakaway.
  Mr. Stevens Mr. Stevens indicated dissent.
  Mr. Gaitskell: The hon. Gentleman shakes his head but we remember his unfortunate and—if I may say so—offensive remark to my hon. Friend about a childish suggestion which the hon. Member had made that figures about the period of 1951–52 were relevant to the present period.
  Mr. Stevens: Why does not the right hon. Gentleman make that remark in the context of his own efforts and those of Sir Stafford Cripps in 1948 and 1949?
  Mr. Gaitskell: Because we are not talking of that period. We are talking of the recent period. That is the whole point. Indeed, to some extent, what we are concerned with here—as our Motion makes plain—is the recent manifestation of the evil consequences on dividend restraint generally.
  I can well understand that there may be some who can pick out one or two cases and say that it is not so over the whole field. Yet there are many cases. My hon. Friends have mentioned a few and I will refer to two others. Lobitos Oilfields announced recently its intention to double the ordinary dividend.
  The "Economist" comment on that was:
  "Surprise and delight were reflected in the marking up of the companies ordinary stock
  1446
  by 13s. 6d. to 52s. 6d. The bird in the hand was certainly plump."
  Indeed it was. They go on to comment
  "Lobitos can hardly be classed among the take-over bids though rumours have gone round and been denied, but the directors would appear to be doing their best to ensure that it will not become one."
  That is very typical.
  Another case is English Sewing Cotton, the directors of which were perturbed at the take-over bid and in order to counter it put out a statement saying that the existing reserves were sufficient to support an appreciably higher dividend—promising more or less that it would be 20 per cent. instead of 12½ per cent. as at present.
  Indeed the "Financial Times," the paper of the hon. and gallant Member for New Forest says:
  "It is now almost a reflex action with firms faced with justifiable bids to raise their dividends."
  There is no doubt about it that this tendency is now sweeping across industry and trade and giving an impetus all along the line to increasing dividends.
  I can well understand some hon. Members opposite saying, "So what? Why should not dividends go up? Is it not fair? Is it not about time they went up? They have not gone up as much as wages did since 1938." That is perfectly true, though I do not know why hon. Members opposite should assume that we are prepared to accept or that the country is prepared to accept the distribution of income in 1938 as something inviolate to which we always have to return.
  We do not take that view at all. But while that may nevertheless be the view of some hon. Gentleman, I did not think it was the view of the Chancellor, and I must ask him, particularly in view of the statements made by his hon. Friend, whether he still wants to see dividend restraint. That is a plain question, and it deserves a plain answer.
  Secondly, I want to ask him—these are the two crucial questions on policy—whether he still holds the views which he expressed last December. I thought it a reasonable statement, as I think I made plain in my supplementary question. He pointed out that the take-over bid covers a very wide range of transaction. We quite agree. But he said that others

  1447
  might be open to criticism on several grounds.
  Then he went on with the well known statement that, with his concurrence, the Bank of England had told the banks and financial institutions to exercise special care in cases where there appeared to be a speculative element. The right hon. Gentleman was taken to task by his hon. Friend the Member for Bury and Radcliffe (Sir W. Fletcher) on that statement. Is he prepared to stand up to his hon. Friend and say that he believes that was right and that the banks should keep a very tight hold on this matter?
  If he believes that, I think we deserve some definition of "speculative." What exactly does the Chancellor mean by that word?
  Sir W. Fletcher: The right hon. Gentleman ought to know some similar word.
  Mr. Gaitskell: I do not wish to interrupt any advice which the hon. Gentleman may wish to give, but I will give a definition which I think would definitely be accepted by many hon. Members opposite. It is the definition given by Mr. Cowan in the article to which reference has been made. He criticised the right hon. Gentleman's statement as
  "…the free economy's tool for healthy change to sustain a due equilibrium in an unstable world."
  Is that the Chancellor's definition? If not, how does he define it? I hope he will not let us down and will not just tell us that he is watching the situation and hopes that people will behave. I want to know whether he takes the same view as his hon. Friend, that there should be complete freedom, that the time for dividend restraint has gone and that we should go back to a free-for-all. On the other hand, if he thinks that dividend restraint should go on, exactly what is he going to do about it?
  In this debate we have not said that we think there is an easy and simple solution to the problem. I concede at once that it is a difficult problem, and we do not pretend that we know all the facts. However, we say that the case for an inquiry is overwhelming. It will be all the more overwhelming, if the Chancellor, as I fear, fobs us off with vague and indecisive answers this evening.
  1448
  We have the case of the Worcester Buildings Company. What are the Government going to do? Is there no case for an inquiry? Should there not be some investigation into the sources of finance? Such an investigation would help the Chancellor in his efforts to prevent so-called speculative deals. There should certainly be some examination of the problem of taxation in relation to these capital gains. Perhaps the Chancellor can tell us something about that.
  Finally, on broad social and economic grounds there is an overwhelming case for examining the consequences of this technique on dividends and on reserves and, therefore, on wages. We all know how serious the situation of the country is, for the Chancellor is always telling us about it. Here is an opportunity for him to show that he meant something by his statement and intends to get down to brass tacks and tackle the problem.
  7.15 p.m.
  The Chancellor of the Exchequer (Mr. R. A. Butler): The debate is now drawing to its close. I certainly agree that it was introduced in true Parliamentary manner by the hon. Member for Stechford (Mr. Roy Jenkins). It has since been followed up by hon. Gentlemen on both sides of the House, and we have had some very useful speeches from my hon. Friend the Member for Langstone (Mr. Stevens) and my hon. and gallant Friend the Memberfor New Forest (Colonel Crosthwaite-Eyre).
  I do not agree with the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) that I suffered a savage attack at the hands of my hon. Friend the Member for Bury and Radcliffe (Sir W. Fletcher), who happens to know quite a lot about this subject, and that is not a bad credential for taking part in the debate.
  We ought also to show some satisfaction after the recent article in "The New Statesman," which I read with some interest, by the right hon. Gentleman the Member for Dundee, West (Mr. Strachey), who has also taken part in the debate, and I hope many hon. Members will read his article in "The New Statesman" of last week.
  I was somewhat perplexed by the morality of the right hon. Member for Leeds, South. Evidently a spiv going in

  1449
  for the pools can be wished good luck, but an adventurer going into the City must be condemned as a villain on any account. I hope he will defend these sentiments in the very thoughtful and idealistic sections of his own constituency and try to differentiate between the two.
  My moral position is absolutely clear. Perhaps that makes a good preface to the short speech I wish to make to the House. I dislike every type of spiv who gets something for nothing, however he gets it. That applies to this problem just as it does to any other that we have to meet in the ordinary course of events.
  Let me now examine the problem and try to delineate a little more carefully just what it is. A great variety of transactions is covered by the genial phrase "take-over bid." It may be, for example, that the case is an absolutely normal one. Some reference has been made to some of these cases. For instance, a retailer with limited scope for selling his goods may buy a controlling interest in another undertaking in the same line of business. It may well be that the creation of a somewhat larger economic unit will lead to cheaper goods for the consumers as well as increased profits for the retailer, in which case I am certain that there are very fewhon. Members on either side of the House who would regard such a transaction as being anti-national or abnormal. If we were to do so, we should fall into the dialectical and general difficulty into which the right hon. Member for Leeds, South nearly fell,in that he does not want it said about him that he wishes to keep cushy directors immovable in their places, but also does not wish it to be said that he desires to upset them in some way and wants to stop any type of adventure which involves risks and speculation.
  Mr. Gaitskell: The right hon. Gentleman has just said that he is against all speculation.
  Mr. Butler: Not at all. I said I was against any spiv who gets something for nothing, but a man who risks his all, as has been shown in the history of commerce and industry in this country, very often achieves a great deal for his country and for his fellow citizens.
  That type of undertaking—the acquisition by a brewery of a smaller brewery,
  1450
  the acquisition by a firm of a smaller firm, the acquisition by a Co-op. of a smaller grocery, or anything of that sort—seems to me—I think it would be accepted by the hon. Member who interested us by his speech about the co operative movement—quite usual in the world and not unduly unhealthy. At any rate, I am convinced from the political philosophy with which I approach the matter that if we were to keep industry and commercial activity absolutely static, we should get nowhere. There must be a sense of adventure, a sense of risk and, at times, a sense of acquisition.
  Someone said that we want to avoid "sharks." In any case, we cannot avoid whales or the normal natural law of either these great sea mammals or other animals. I suppose the easiest definition of take-over bids was provided when the whale swallowed Noah—[Laughter.]—I mean, Jonah—and finally decided that this was an utterly indigestible asset which had to be brought up at all costs. That illustration, simple though it may be, illustrates that, in the general law of nature, acquisition by one person of another person's property cannot be altogether stopped. Adventure and risk are good for the body politic and for the economic life of the country.
  Having established that—and on this point the right hon. Gentleman was more or less in agreement, because he said he did not want oligarchies, whatever they may be, and another hon. Gentleman said he did not want cosy assurance in business, and "The Times" leading article said that it did not want business to rest on its laurels—having taken all these hon. Gentlemen and learned scribes as being in agreement, we therefore start from a common platform: namely, that risk is a good thing, that we cannot stop ordinary nature, and that there will be acquisition at one point or another, whether we like it or not.
  Then we come to another type of take over bid. It may have become apparent to a purchaser that the capital resources of a company are not being used to the best advantage, and there may be scope in such cases for buying these resources from the existing proprietors, for a price with which they are wholly satisfied, in order that the purchaser may develop them more profitably. That, I think, would be counted as fairly normal.

  1451
  But then we come to another type: I would rather not, in my position, quote any individual firms, but would rather respect the anonymity of any examples brought to my attention. In such a type of case, it is alleged, and experience has shown, that it is the sole intention of the purchaser to make a capital gain; and that he cares little whether he destroys some long-established business, or whether he saps the financial strength of the business by distributing profits which ought, in fact, to be ploughed back. That is the type of case to which I think the majority of opinion in the House wants to turn its attention today.
  In regard to that type of case, I can only repeat the point of view of the Government regarding which, as I said on 15th December, we have taken certain steps; in the course of my speech I propose further to elaborate on these. I also said that we want to plan some limitation of the extent of the damage which is alleged to have been caused by this practice. I will give an invitation to any hon. or right hon. Gentlemen to bring to my attention and that of the Treasury any case which they think is a genuine abuse. For example, I will certainly look into the case mentioned by the right hon. Gentleman opposite with the aid of my right hon. Friend the President of the Board of Trade. But I must say, as to limitation of the extent of that abuse, that we have no evidence, from the very wide examination we have made of this matter, that any such business has been literally destroyed or has had its resources plundered in order solely to realise capital gains. We have evidence of abuse—and I am going on to talk of the taxation point—but we have no evidence of widespread plundering or destruction of businesses.
  It is against this background that we must now consider the various aspects of this Motion. The Motion, first of all, suggests—and I will take the main points of the right hon. Gentleman in dealing with it—that this practice has undermined the policy of dividend limitation. That was the view both of the right hon. Gentleman the Member for Dundee, West and of the hon. Member for Stechford, who said that a coach and four had been driven through the policy of dividend limitation.
  1452
  I maintain that that is not the case. If it were the case, it would be a serious matter. In my opinion, however, there is no reason to connect any general increase in dividend distribution with these take-over operations. I have taken the trouble to analyse this matter, and have also looked into what the Motion itself says, because the rises in dividends began in the early part of 1951 before these take-over operations were thought of or noted.
  Let me prove that point with these figures. In 1951, dividends were 8·8 per cent. higher than in 1950, and the right hon. Gentleman referred at that time to his own anxiety in this matter. In 1952—and I hope these figures will be noticed—dividends were only 3·9 per cent. higher than in 1951, as compared with 8·8 per cent. in the year before. These figures indicate that there was not the runaway lack of restraint in dividend distribution which the right hon. Gentleman suggested. When we come to 1953, taking into account the decrease in taxation, which we have to do, the comparative figure, as compared with an increase of 8·8 per cent. between 1950 and 1951, is 6 per cent.; that is, 10 per cent. before considering taxation, and, after the reduction of tax in the Budget of about 4 per cent., a figure of about 6 per cent. The alleged runaway trend of dividend distribution, in fact, started before this practice came upon the scene but restraint is now not completely abandoned and destroyed, as the right hon. Gentleman and others have been trying to make out. In fact, the situation of a runaway character of dividend distribution is not as bad now as it was in the years when the right hon. Gentleman was Chancellor of the Exchequer.
  Mr. Gaitskell: I do not quarrel with these facts, which I used against the right hon. Gentleman on another occasion, but I ask him if he believes that a 10 per cent. gross increase or 6 per cent. net is sufficient to fulfil the undertaking with regard to dividend distribution.
  Mr. Butler: I am coming to that. The right hon. Gentleman also asked me what I thought about the policy of dividend restraint, but, before I come to that—and I have a note of his main question to me—I want to follow up with these figures of what ordinary shareholders are

  1453
  getting. There has been very much talk about a runaway distribution of dividends, with great unfairness, and the House and the country ought to have these figures in order to understand what the real facts are.
  The figures of shareholders' return on capital employed,—including reserves in the business—after deduction of tax, are as follows: In 1949, 3·4 per cent.; in 1950, 3·3 per cent.; in 1951, 3·1 per cent.; in 1952, 2·8 per cent.; and in 1953, 2·9 per cent. Moreover, if we have regard to the reduction of tax in the last Budget, this last figure is 2·8 per cent.; namely, the exact equivalent of the figure for 1952. That indicates a steady drop, on a comparable basis from 1949 to this day, of the amount returned to shareholders on the capital employed—including reserves in the business—and after deduction of tax.
  These are very important figures for the country, because it seems very often that it is the absolute or total amount paid in dividends which is mentioned, and the reason why they have increased is the quite simple, natural and commonsense reason that the amount of capital employed has increased more than protanto. It is therefore in fact unfair to quote these large figures instead of the ones I have given to illustrate the validity of my point.
  Mr. Gaitskell: Does not the right hon. Gentleman realise that that argument is really a very dangerous one to use? We have repeatedly said, in trying to persuade people to exercise wage restraint, that they should be concerned only with actual payments in dividends, and not with what is put to reserve. Now, the Chancellor is drawing attention to the fact that, year by year, the shareholders acquire additional property, and we have to take that acquisition of property into account when comparing the rewards to wage earners and to shareholders.
  Mr. Butler: That I fully understand, but it is small comfort to the shareholder to feel that a proportion of what earlier was available for distribution is now put to reserve. I was well aware that the right hon. Gentleman would make the point he has just put, but it does not detract from the value of the figures I have given, which indicate a definite decline, on an equivalent basis.
  1454
  The right hon. Gentleman asked me whether the policy of dividend restraint still remained, and I want to link this point with another raised in the debate. It is the point whether a company is right, when wishing to protect itself against a take-over bid, to give as an inducement a greater return to the proprietors of the company either by way of an increase in dividend or in other ways. It would honestly not be right if I said that it would be of no importance to concede that this was legitimate in certain cases; because, quite clearly, whether the proposed distribution is sound or not, must depend upon the circumstances of each individual business.
  What I should like to make clear today on the policy of dividend restraint is this. The board that is likely to retain the confidence of its shareholders is not the board that "milks" the business by distributing all it can; rather is it the board that gives the shareholders a fair return on the capital employed, while retaining enough reserves to cover future risks and future development.
  That is my definition of how, I think, companies ought to approach this matter. I am not desirous, nor are the Government, of seeing the policy which we describe as dividend restraint abandoned by companies. The Government adhere to it, and it is in the best interests of the shareholders. But that definition which I have given affords, I think, sufficient liberty to managements to defend themselves if necessary; it is a sufficiently common-sense definition to indicate how they can look after the legitimate interests of their shareholders, and also the legitimate interests of their company and of the country, by putting money to reserve in the future.
  I want to mention a comparison with wages, because it is quite clear that the conception that we are just letting this matter go would not be good in the general industrial situation. I want to look, at the moment, at the comparison with wages and prices. The following figures which I am now going to give compare changes in average earnings—which are based on Ministry of Labour statistics—with the movements of the total ordinary gross dividends—whidh are based on figures given in the National

  1455
  Income Blue Book—and of the Consumer Price Index.
  In 1952, average earnings were 184 per cent. higher than in 1938, and 30 per cent. higher than in 1948. Dividends paid in 1952 were 40 per cent. higher than in 1938, and 23·5 per cent higher than in 1948. Prices were 122 per cent. higher in 1952 than in 1938, and 22 per cent. higher than in 1948. I think it is important for hon. Members to get some relation as between the respective rises in these various sectors of the economy which are of so much importance to us all.
  Now I come to the points in the right hon. Gentleman's speech about the Motion. I have already dealt with the question of dividends, share prices and company savings. I do not think that an inquiry is necessary, as we see the situation at the present time, so that is the answer to the right hon. Gentleman's first point. I do not think that the situation is out of hand. I believe that companies understand their duty, and I hope that what I have said will reinforce the general views that the Government have made known before, and which I most sincerely share.
  The right hon. Gentleman's second point related to sources of finance used. On that, I would reiterate what I said on 15th December, namely, that I continue to support the guidance given by the Bank of England to banks and other financial institutions for special care in dealing with requests for facilities for take-over transactions in cases where there appeared to be a speculative element. The right hon. Gentleman asked me to define exactly what I mean by "speculative element." The funny part is that I believe that the Bank of England and the banks understand this matter just as well as any right hon. or hon. Member of this House. I am perfectly satisfied, from inquiries that I have made during the last few days, that this instruction that credit facilities—and I am defining it a little more closely—should not be given for the speculative buying or holding of securities, real property or stocks of commodities, is being followed by the banks and other institutions concerned. I believe that this is a valuable and appropriate way of dealing with the sources of finance. If it is not, I undertake that we shall watch the situation,
  1456
  and that if it is necessary to follow it up, it will be followed up.
  The third matter raised by the right hon. Gentleman was the capital profits obtained—the question of taxation. I have dismissed the necessity for an inquiry over the field of dividends on the information which we have at present. I have dismissed the need for an inquiry over the sources of finance used. On the question of taxation, I regard an inquiry as an entirely unsatisfactory method of ascertaining the position. A committee of inquiry is not the proper method of investigating the tax affairs of individual persons.
  The right hon. Gentleman said—and he knows a lot about this matter—that it is almost impossible to tell what capital profits are, in fact, being made. But I can assure him that the Inland Revenue are watching the position with that same perspicacity, ability and knowledge which we all associate with their activities. Further, while I cannot say any more today, because it is out of order at this season, before I have to undertake certain activities a little later in the year, I can assure him that this whole question is under the closest possible review, not only in regard to the personal activities of certain people, but also in regard to any policy which might have to be adopted to deal with them.
  That deals with the first three matters, and it only remains for me to deal with the counter-measures that may or may not have to be taken by companies. What are these counter-measures? The company or the management of the company can advise the shareholders not to sell to the bidder because the shares are worth more than the bid, or will be worth more if the company continues to be managed by the present board. Or they can retain the shareholders' confidence by unfolding the board's plans for developing the concern and by making full use of the company's assets. Or they can take other action to make the company unattractive to the bidder by placing restrictions on the use or disposal of the company's property, provided they are entitled to do so under the Companies Act. All these things the companies can do to defend themselves.
  The right hon. Gentleman did not doubt any of these points, but he asked the question about the particular position

  1457
  of the Savoy business and of the Worcester Buildings Company. On that there has been a good deal of misunderstanding and anxiety. My right hon. Friend the President of the Board of Trade gave an answer to the hon. Member for Aberdeenshire. East (Sir R. Boothby) on 4th February in which he said that there was no reason to think that the remedies available under the existing law are inadequate to protect shareholders against action by boards of directors which is ultra vires or in breach of trust or oppressive.
  All I can add to that—and this was the specific question asked by the right hon. Gentleman—is that, regarding this question of the transfer last December of the freehold of the Berkeley Hotel to a new company, the Worcester Buildings Company (London) Ltd., my right hon. Friend the President of the Board of Trade is considering whether he should appoint an inspector under Section 165 (b) of the Companies Act, 1948, to investigate the transaction. It appears, from the information before the Board of Trade, that this transaction affords ground for such an investigation. My right hon. Friend is at present awaiting the observations of the Savoy directors, for which he has asked, before coming to a decision. Therefore, we cannot pursue that matter further today. But, in that sphere to which the right hon. Gentleman referred, he will see that the Government are fully alive to the situation, and are awaiting the developments for which they have asked.
  I therefore sum up by saying that while I think this debate has been valuable and while it has been a good thing that we should have aired the situation and looked at it, I do not think the case has been made out for an inquiry. On the question of credit, on the question of taxation, on the question of the action companies may take, and on the question of this transaction about this Buildings Company, the Government have already taken action or are watching the
  situation with a view to taking action if necessary.
  Therefore I should not be ready to accept the Motion. I do not think that the Motion, as drafted, is necessary. But I will say this. All of us, whatever our views, adhere to two propositions. First, in a sound, developing, lively, flexible economy like our own, adventure of the proper kind should be encouraged. But, at the same time, adventure of an antisocial type with a view to speculative profit for one's own personal self without proper regard for the company should not only be watched but should be discouraged and action taken wherever possible. That remains the view of the Government, and I believe it to be the view of the House.
  When I am asked whether we should at this moment regard the institutions, whether in the City or in industry, from the economic or the social angle, I say to the hon. Member for Edmonton (Mr. Albu) who raised the point that we should regard them from both angles. We should regard them from the economic angle with a view to earning future results for the benefit and the prosperity of our country, but also from the social angle because unless we take into account the industrial situation, the views of the workpeople, and the ideals of our people generally, we shall not carry with us the whole spirit of industry.
  It is in this spirit that I believe the City of London is looking at this problem. I know they have been distressed by the bad features of it, but that does not mean that either in the City of London or in big business in this country—or in small business for that matter—we have not got standards of social belief and standards of social practice as good as any other country in the world.
  Question put.
  The House divided: Ayes, 223: Noes, 251.

  Division No. 34.]

  AYES

  [7.42 p.m.

  Acland, Sir Richard

  Bing, G. H. C.

  Brown, Rt. Hon. George (Belper)

  Adams, Richard

  Blackburn, F.

  Burke, W. A.

  Allen, Arthur (Bosworth)

  Blenkinsop, A.

  Burton, Miss F. E.

  Bacon, Miss Alice

  Blyton, W. R.

  Butler, Herbert (Hackney, S.)

  Baird, J.

  Bottomley, Rt. Hon. A. G.

  Callaghan, L. J.

  Barnes, Rt. Hon. A. J.

  Bowden, H. W.

  Carmichael, J.

  Bartley, P.

  Bowles, F. G.

  Castle, Mrs. B. A.

  Bence, C. R.

  Braddock, Mrs. Elizabeth

  Chapman, W. D.

  Benn, Hon. Wedgwood

  Brockway, A. F.

  Chetwynd, G. R.

  Benson, G.

  Brook, Dryden (Halifax)

  Clunie, J.

  Beswick, F.

  Broughton, Dr. A. D. D.

  Collick, P. H.

  Corbet, Mrs. Freda

  Jones, David (Hartlepool)

  Reid, William (Camlachie)

  Cove, W. G.

  Jones, Jack (Rotherham)

  Richards, R.

  Craddock, George (Bradford, S.)

  Keenan, W.

  Roberts, Albert (Normanton)

  Crosland, C. A. R.

  Kenyon, C.

  Robinson, Kenneth (St. Pancras, N.)

  Cullen, Mrs. A.

  Key, Rt. Hon. C. W.

  Rogers, George (Kensington, N.)

  Daines, P.

  King, Dr. H. M.

  Ross, William

  Dalton, Rt. Hon. H.

  Lee, Frederick (Newton)

  Royle, C.

  Darling, George (Hillsborough)

  Lee, Miss Jennie (Cannock)

  Shackleton, E. A. A.

  Davies, Ernest (Enfield, E.)

  Lever, Leslie (Ardwick)

  Shinwell, Rt. Hon. E.

  Davies, Harold (Leek)

  Lewis, Arthur

  Short, E. W.

  de Freitas, Geoffrey

  Lindgren, G. S.

  S
  ilverman, Julius (Erdington)

  Deer, G.

  Lipton, Lt.-Col. M.

  Silverman, Sydney (Nelson)

  Delargy, H. J.

  MacColl, J. E.

  Simmons, C. J. (Brierley Hill)

  Dodds, N. N.

  McGhee, H. G.

  Skeffington, A. M.

  Donnelly, D. L.

  McGovern, J.

  Slater, Mrs. H. (Stoke-on-Trent)

  Ede, Rt. Hon. J. C.

  McInnes, J.

  Slater, J. (Durham, Sedgefield)

  Edelman, M.

  McKay, J. (Wallsend)

  Smith, Norman (Nottingham, S.)

  Edwards, Rt. Hon. John (Brighouse)

  McLeavy, F.

  Snow, J. W.

  Edwards, W. J. (Stepney)

  MacMillan, M. K. (Western Isles)

  Soskice, Rt. Hon. Sir Frank

  Evans, Albert (Islington, S.W.)

  McNeil Rt. Hon. H.

  Sparks, J. A.

  Evans, Edward (Lowestoft)

  MacPherson, Malcolm (Stirling)

  Steele, T.

  Fletcher, E.

  Mallalieu, E. L. (Brigg)

  Stewart, Michael (Fulham, E.)

  Fienburgh, W.

  Mallalieu, J. P. W. (Huddersfield, E.)

  Stokes, Rt. Hon. R. R.

  Fletcher, Eric (Islington, E.)

  Mann, Mrs. Jean

  Strachey, Rt. Hon. J.

  Follick, M.

  Manuel, A. C.

  Strauss, Rt. Hon. George (Vauxhall)

  Foot, M. M.

  Marquand, Rt. Hon. H. A.

  Stross, Dr. Barnett

  Forman, J. C.

  Mason, Roy

  Summerskill, Rt. Hon. E.

  Fraser, Thomas (Hamilton)

  Mikardo, Ian

  Swingler, S. T.

  Freeman, John (Watford)

  Mitchison, G. R.

  Sylvester, G. O.

  Freeman, Peter (Newport)

  Moody, A. S.

  Taylor, Bernard (Mansfield)

  Gaitskell, Rt. Hon. H. T. N.

  Morgan, Dr. H. B. W.

  Taylor, John (West Lothian)

  Gibson, C. W.

  Morley, R.

  Taylor, Rt. Hon. Robert (Morpeth)

  Glanville, James

  Morris, Percy (Swansea, W.)

  Thomas, George (Cardiff)

  Gooch, E. G.

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

  Thomas, Ivor Owen (Wrekin)

  Greenwood, Anthony (Rossendale)

  Moyle, A.

  Thomson, George (Dundee, E.)

  Grey, C. F.

  Mulley, F. W.

  Thornton, E.

  Griffiths, David (Rother Valley)

  Nally, W.

  Tomney, F.

  Griffiths, Rt. Hon. James (Llanelly)

  Neal, Harold (Bolsover)

  Turner-Samuels, M.

  Griffiths, William (Exchange)

  Noel-Baker, Rt. Hon. P. J.

  Ungoed-Thomas, Sir Lynn

  Hall, Rt. Hon. Glenvil (Colne Valley)

  O'Brien, T.

  Usborne, H. C.

  Hall, John T. (Gateshead, W.)

  Oldfield, W. H.

  Viant, S. P.

  Hamilton, W. W.

  Oliver, G. H.

  Wallace, H. W.

  Hannan, W.

  Orbach, M.

  Warbey, W. N.

  Hargreaves, A.

  Oswald, T.

  Webb, Rt. Hon. M. (Bradford, C.)

  Harrison, J. (Nottingham, E.)

  Padley, W. E.

  Weitzman, D.

  Hastings, S.

  Paget, R. T.

  Wells, Percy (Faversham)

  Hayman, F. H.

  Paling, Rt. Hon. W. (Dearne Valley)

  Wells, William (Walsall)

  Healey, Denis (Leeds, S.E.)

  Paling, Will T. (Dewsbury)

  Wheeldon, W. E.

  Henderson, Rt. Hon. A. (Rowley Regis)

  Palmer, A. M. F.

  White, Henry (Derbyshire, N.E.)

  Hebson, C. R.

  Pannell, Charles

  Whiteley, Rt. Hon. W.

  Holman, P.

  Pargiter, G. A.

  Wigg, George

  Houghton, Douglas

  Parker, J.

  Wilkins, W. A.

  Hoy, J. H.

  Parkin, B. T.

  Willey, F. T.

  Hubbard, T. F.

  Peart, T. F.

  Williams, Ronald (Wigan)

  Hudson, James (Ealing, N.)

  Plummer, Sir Leslie

  Williams, Rt. Hon. Thomas (Don V'll'y)

  Hughes, Emrys (S. Ayrshire)

  Popplewell, E.

  Williams, W. R. (Droylsdon)

  Hughes, Hector (Aberdeen, N.)

  Porter, G.

  Williams, W. T. (Hammersmith, S.)

  Hynd, H. (Accrington)

  Price, Philips (Gloucestershire, W.)

  Wilson, Rt. Hon. Harold (H_yton)

  Hynd, J. B. (Attercliffe)

  Proctor, W. T.

  Woodburn, Rt. Hon. A.

  Irvine, A. J. (Edge Hill)

  Pryde, D. J.

  Wyatt, W. L.

  Irving, W. J. (Wood Green)

  Pursey, Cmdr. H.

  Yates, V. F.

  Jay, Rt. Hon. D. P. T.

  Rankin, John

  Younger, Rt. Hon. K.

  Jeger, George (Goole)

  Reeves, J.

  Jenkins, R. H. (Stechford)

  Reid, Thomas (Swindon)

  TELLERS FOR THE AYES:

  Mr. Holmes and Mr. James Johnson.

  NOES

  Aitken, W. T.

  Bennett, F. M. (Reading, N.)

  Bullard, D. G.

  Allan, R. A. (Paddington, S.)

  Bennett, Dr. Reginald (Gosport)

  Bullus, Wing Commander E. E.

  Alport, C. J. M.

  Bevins, J. R. (Toxteth)

  Burden, F. F. A.

  Amory, Rt. Hon. Heathcoat (Tiverton)

  Birch, Nigel

  Butcher, Sir Herbert

  Anstruther-Gray, Major W. J.

  Bishop, F. P.

  Butler, Rt. Hon. R. A. (Saffron Walden)

  Arbuthnot, John

  Bossom, Sir A. C.

  Campbell, Sir David

  Assheton, Rt. Hon. R. (Blackburn, W.)

  Bowen, E. R.

  Carr, Robert

  Baker, P. A. D.

  Boyd-Carpenter, R. Hon. J. A.

  Cary, Sir Robert

  Baldock, Lt.-Cmdr. J. M.

  Boyle, Sir Edward

  Channon, H.

  Baldwin, A. E.

  Braine, B. R.

  Clarke, Col. Ralph (East Grinstead)

  Barber, Anthony

  Braithwaite, Sir Gurney

  Clarke, Brig. Terence (Portsmouth, W.)

  Baxter, A. B.

  Bromley-Davenport, Lt.-Col. W. H.

  Colegate, W. A.

  Beach, Maj. Hicks

  Brooke, Henry (Hampstead)

  Cooper-Key, E. M.

  Beamish, Maj. Tufton

  Brooman-White, R. C.

  Craddock, Beresford (Spelthorne)

  Bell, Philip (Bolton, E.)

  Browne, Jack (Govan)

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

  Bell, Ronald (Bucks, S.)

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Crosthwaite-Eyre, Col. O. E.

  1460

  1461

  Crouch, R. F.

  Johnson, Howard (Kemptown)

  Rayner, Brig. R.

  Crowder, Sir John (Finchley)

  Jones, A. (Hall Green)

  Redmayne, M.

  Crowder, Petre (Ruislip—Northwood)

  Joynson-Hicks, Hon. L. W.

  Rees-Davies, W. R.

  Darling, Sir William (Edinburgh, S.)

  Kaberry, D.

  Remnant, Hon. P.

  Davidson, Viscountess

  Kerr, H. W.

  Renton, D. L. M.

  Deedes, W. F.

  Lambert, Hon. G.

  Robertson, Sir David

  Digby, S. Wingfield

  Langford-Holt, J. A.

  Robinson, Roland (Blackpool, S.)

  Dodde-Parker, A. D.

  Leather, E. H. C.

  Robson-Brown, W.

  Donaldson, Cmdr. C. E. McA

  Legh, Hon. Peter (Petersfield)

  Rodgers, John (Sevenoaks)

  Dormer, Sir P. W.

  Lindsay, Martin

  Roper, Sir Harold

  Doughty, C. J. A.

  Linstead, Sir H. N.

  Ropner, Col. Sir Leonard

  Douglas Hamilton, Lord Malcolm

  Lloyd, Rt. Hon. G. (King's Norton)

  Russell, R. S.

  Drayson, G. B.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Ryder, Capt. R. E. D.

  Dugdale, Rt. Hon. Sir T. (Richmond)

  Lockwood, Lt.-Col. J. C.

  Sandys, Rt. Hon. D.

  Duncan, Capt. J. A. L.

  Longden, Gilbert

  Schofield, Lt.-Col. W.

  Duthie, W. S.

  Low, A. R. W.

  Scott, R. Donald

  Eccles, Rt. Hon. Sir D. M.

  Lucas, P. B. (Brentford)

  Scott-Miller, Cmdr. R.

  Elliot, Rt. Hon. W. E.

  Lucas-Tooth, Sir Hugh

  Shepherd, William

  Erroll, F. J.

  McAdden, S. J.

  Simon, J. E. S. (Middlesbrough, W.)

  Fell, A.

  McCallum, Major D.

  Smithers, Peter (Winchester)

  Fisher, Nigel

  McCorquodale, Rt. Hon. M. S.

  Smyth, Brig. J. G. (Norwood)

  Fleetwood-Hesketh, R. F.

  Macdonald, Sir Peter

  Snadden, W. McN.

  Fletcher, Sir Waller (Bury)

  Mackeson, Brig. Sir Harry

  Soames, Capt. C.

  Fletcher-Cooke, C.

  McKibbin, A. J.

  Spearman, A. C. M.

  Ford, Mrs. Patricia

  Mackie, J. H. (Galloway)

  Speir, R. M.

  Fort, R.

  Maclay, Rt. Hon. John

  Spens, Rt. Hon. Sir P. (Kensington, S.)

  Foster, John

  Macleod, Rt. Hon. Iain (Enfield, W.)

  Stanley, Capt. Hon. Richard

  Fyfe, Rt. Hon. Sir David Maxwell

  Macmillan, Rt. Hon. Harold (Bromley)

  Stevens, G. P.

  Galbraith, Rt. Hon. T. D. (Pollok)

  Macpherson, Niall (Dumfris)

  Steward, W. A. (Woolwich, W.)

  Galbraith, T. G. D. (Hillhead)

  Maitland, Comdr. J. F. W. (Horncastle)

  Stewart, Henderson (Fife, E.)

  Garner-Evans, E. H.

  Maitland, Patrick (Lanark)

  Stoddart-Scott, Col. M.

  George, Rt. Hon. Maj. G. Lloyd

  Manningham-Buller, Sir R. E.

  Storey, S.

  Glover, D.

  Marlowe, A. A. H.

  Strauss, Henry (Norwich, S.)

  Godber, J. B.

  Marples, A. E.

  Stuart, Rt. Hon James (Moray)

  Gomme-Duncan, Col. A.

  Marshall, Douglas (Bodmin)

  Studholme, H. G.

  Graham, Sir Fergus

  Maude, Angus

  Sutcliffe, Sir Harold

  Gridley, Sir Arnold

  Maudling, R.

  Taylor, Sir Charles (Eastbourne)

  Grimond, J.

  Maydon, Lt.-Comdr. S. L. C.

  Teeling, W.

  Grimston, Sir Robert (Westbury)

  Medlicott, Brig. F.

  Thomas. Rt. Hon. J. P. L. (Hereford)

  Hall, John (Wycombe)

  Mellor, Sir John

  Thomas, Leslie (Canterbury)

  Harden, J. R. E.

  Molson, A. H. E.

  Thompson, Lt.-Cdr. R. (Croydon, W.)

  Harris, Frederic (Croydon, N.)

  Moore, Sir Thomas

  Thorneycroft, Rt. Hn. Peter (Monmouth)

  Harris, Reader (Heston)

  Mott-Radclyffe, C. E.

  Thornton-Kemsley, Col C. N.

  Head, Rt. Hon. A. H.

  Nabarro, G. D. N.

  Touche, Sir Gordon

  Heald, Rt. Hon. Sir Lionel

  Neave, Airey

  Turner, H. F. L.

  Heath, Edward

  Nicholls, Harmar

  Turton, R. H.

  Henderson, John (Cathoart)

  Nicholson, Godfrey (Farnham)

  Vane, W. M. F.

  Higgs, J. M. C

  Nicolson, Nigel (Bournemouth, E.)

  Vaughan-Morgan, J. K.

  Hill, Dr. Charles (Luton)

  Nield, Basil (Chester)

  Vosper, D. F.

  Hill, Mrs. E. (Wythenshawe)

  Nugent, G. R. H.

  Wade, D. W.

  Hinchingbrooke, Viscount

  Oakshott, H. D.

  Wakefield, Edward (Derbyshire, W.)

  Hirst, Geoffrey

  O'Neill, Hon. Phelim (Co. Antrim, N.)

  Wakefield, Sir Wavell (St, Marylebone)

  Holland-Martin, C. J.

  Ormsby-Gore, Hon. W. D.

  Walker-Smith, D. C.

  Hollis, M. C.

  Orr, Capt. L. P. S.

  Ward, Hon. George (Worcester)

  Hope, Lord John

  Orr-Ewing, Charles Ian (Hendon, N.)

  Ward, Miss I. (Tynemouth)

  Hornsby-Smith, Miss M. P.

  Orr-Ewing, Sir Ian (Weston-super-Mare)

  Waterhouse, Capt. Rt. Hon. C.

  Horobin, I. M.

  Osborne, C.

  Watkinson, H. A.

  Horsbrugh, Rt. Hon. Florence

  Page, R. G.

  Webbe, Sir H. (London & Westminster)

  Howard, Hon. Greville (St. Ives)

  Peake, Rt. Hon. O.

  Wellwood, W.

  Hudson, Sir Austin (Lewisham, N.)

  Perkins, Sir Robert

  Williams, Rt. Hon. Charles (Torquay)

  Hudson, W. R. A. (Hull, N.)

  Peto, Brig. C. H. M.

  Williams, Gerald (Tonbridge)

  Kurd, A. R.

  Pickthorn, K. W. M.

  Williams, Paul (Sunderland, S.)

  Hutchison, Sir Ian Clark (E'b'rgh, W.)

  Pilkington, Capt. R. A

  Williams, R. Dudley (Exeter)

  Hutchison, James (Scotstoun)

  Pitman, I. J.

  Wills, G.

  Hyde, Lt.-Col. H. M.

  Pitt, Miss E. M.

  Wilson, Geoffrey (Truro)

  Hylton-Foster, H. B. H.

  Powell, J. Enoch

  Iremonger, T. L.

  Price, Henry (Lewisham, W.)

  TELLERS FOR THE NOES:

  Jenkins, Robert (Dulwich)

  Prior-Palmer, Brig. O. L.

  Sir Cedric Drewe and Major Conant.

  Johnson, Eric (Blackley)

  Raikes, Sir Victor

  Question put, and agreed to.

ORDERS OF THE DAY
  CIVIL DEFENCE (ELECTRICITY UNDERTAKINGS) BILL

    Order for Second Reading read.
    7.53 p.m.
    The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I beg to move, "That the Bill be now read a Second time."
    This rather small Bill must, I confess, be considered as having unsimple phraseology, but its objects are quite clear and perfectly simple. Briefly, the objects of the Bill are to enable my right hon. Friend, as Minister of Fuel and Power, to make regulations to require and to assist the electricity industry to take measures to ensure its due functioning in the event of hostility, or in times of emergency. The expression "due functioning" is well understood by the House, because it was first used in the Civil Defence Act, 1939. It really means that the object we are seeking to achieve is to ensure that the industry is able to maintain its services, so far as is reasonably practicable, despite the results of hostile attack.
    The House will want to know why we have to introduce a Bill for this purpose, because hon. Members will remember there have been Civil Defence Acts in the past. A rather curious situation arose as a result of the history of the electricity industry. The 1939 Act contained a specific provision very largely covering the requirements which we now need to enable the electricity industry to function duly. But after the 1939 Act we had the nationalisation of the industry, and, during the course of the Electricity Act, 1947, which nationalised the industry, it necessarily followed that the Central Electricity Board and the Electricity Commissioners were done away with. Possibly by mistake, in the course of doing away with those two bodies in the 1947 Act, the provisions in the 1939 Civil Defence Act which gave a grant to the industry were repealed. We are now seeking to make good that inadvertent repeal.
    The effect of this Bill is therefore to reintroduce into the 1939 Civil Defence Act the electricity industry which was removed from it during the course of the
    1464
    Nationalisation Act. We propose to do it by amending Section 39 of the 1939 Act so as to delete the exception, which was the electricity undertaking, from that Section. That is the sum and substance of the Bill. Hon. Gentlemen will probably agree that, although the method may on the face of it appear to be slightly tortuous, it is the best, because it has the effect of bringing this industry, and the methods and machinery of its due functioning, into line with the other industries.
    As I have said, this is entirely an enabling Bill to enable my right hon. Friend, as the Minister designated for the purpose by Order in Council, to make Regulations to revive the grant provisions, and to cover the purposes, of the 1939 Act so far as they apply to due functioning for the electricity industry. The Bill does not set out to refer to, or to deal with, any specific works, grants or anything of that sort. Indeed, I think I would be ruled out of order were I to refer to them. Those are matters which in the event of the Bill passing into law, will come before the House as subject for an affirmative Resolution. This is purely an enabling Measure and one which I think the whole House will probably agree is desirable. Certainly it is wanted by the industry, and it is needed to ensure that the industry has not only the obligation but the opportunity to take these due functioning measures.
    If the House desires any further or more elaborate explanation I shall be very happy to try to reply to any questions at the conclusion of the debate, if I am permitted to speak again, but possibly what I have so far said will be sufficient to introduce the subject.
    8.0 p.m.
    Mr. James MacColI: The Parliamentary Secretary's introduction of this Bill was able enough, but he seemed to be walking delicately over some rather dangerous ground. The substance of this Bill was one of the matters commented upon by the Select Committee on Estimates as an example of the apparent inefficiency with which the Civil Defence services were being administered. As I was a Member of the Estimates Committee, and of the particular sub-Committee which was charged with this inquiry, I feel that I should not lose the opportunity of drawing the attention of the House to

    1465
    the substance of the complaint made by the Estimates Committee about the procedure which led up to the introduction of this Bill.
    I want to make it clear that I shall not attempt to make any party political points. It would be a deplorable thing if the function of this House as a vigilant and dispassionate watch-dog over the safeguarding of public money—the kind of function which is the duty of the Select Committee on Estimates and of the Public Accounts Committee—became a matter of party criticism. I am not apportioning blame as between any of the responsible Ministers at the time when these proceedings were taking place. My right hon. Friend will know to what extent these difficulties arose in his time, and the Parliamentary Secretary will know to what extent they arose in his time.
    In dealing with the Bill which we are now discussing and the Order in relation to the gas industry, which we are going to discuss in a moment, the House should be reminded that in paragraph 33 of the Report of the Estimates Committee of this Session these words appear:
    "Your Committee were perturbed to discover that difficulties had arisen over the grant regulations which have to be made before the industries can be reimbursed. The undertakings are reluctant to incur very substantial capital expenditure until they are assured that they can be reimbursed and Your Committee find it incomprehensible that in the five years since the passing of the Act, the Department concerned have not been able to find a solution to the legal difficulties."
    Some comments on this Report have suggested that the Members of the Committee were a little hasty in some of their conclusions, and that they indulged in unduly strong language. That is not the view which I should take, and it is certainly not a point that can be made in regard to the use of the word "incomprehensible."
    It is interesting to notice that in their reply, as set out on page 13 of the Second Special Report of the Select Committee, the Government say:
    "As regards the delay in making progress with the Civil Defence plans of the railways and the electricity and gas industries, it is acknowledged that the delay in settling the financial arrangements for these industries has slowed up progress."
    It is common ground that there were delays and that those delays have held
    1466
    up progress in equipping these industries for protection against any possible enemy attack.
    It is only fair to say that that is not the whole story. The fact that there have appeared, for two years, estimates of expenditure which have not been spent at all, is not due only to the administrative hold-up; it is also due to a shortage of materials. The Committee was told in evidence that in 1952–53 the problem was one of availability of plant. The difficulty lay in being able to do the actual work, in physical terms. Even then we were told, and I am now quoting from Answer No. 1537:
    "For that which was delivered we are not able to do anything about it because we have not got yet our grant regulations which are necessary before we can make actual payments."
    I have made it sufficiently clear that there has been some administrative hold up in the presentation of this Bill, which has handicapped the equipping of these industries, and the Government should have given us a little more explanation how this happened and what was the trouble. As far as the Select Committee was able to discover, as early as 1949 the requirements for due functioning were known to the Department. It appears that the technical officers of the Department knew by then what was required for the purposes of carrying out those functions. There was then a delay of about 2½ years, until the spring of 1952. Exactly why that delay occurred was never made quite clear. In the spring of 1952 proposals for the due functioning expenditure were approved. That was two years ago.
    Before that time there had apparently been some discussion about the legal position and on the question whether these grants could be made under the Civil Defence Act, as it then was—for the reasons mentioned by the Parliamentary Secretary—but in 1951 the legal advisers of the Ministry of Fuel and Power and of the Home Office were agreed that it was best to do it under the existing legislation. In 1951—about three years ago—the Treasury appeared to have formulated their grant proposals, so there was no hold-up on the financial side.
    When we received evidence from the Department—which was in April, 1953, very nearly a year ago—we were told,

    1467
    however, that there were these legal hitches, and that the matter was still being argued out and would have to go before the Law Officers. If the draft had already been submitted in April, 1953—as we were told it had—and the technical and financial side of the matter had been settled, and for six or nine months there had been consideration of the method of getting over these legal problems, it is not unreasonable to ask why it has taken from April, 1953, until February, 1954—all that time of somewhat portentious travail—to produce this rather ridiculous mouse. Here we are presented with what is virtually a one-Clause Bill, which merely brings into Section 39 of the Act provisions which had been inadvertently repealed by the nationalisation Act.
    I am not an expert Parliamentary draftsman, but it would seem pretty easy to concoct a Bill of any size on this subject, and get it through the House without any really serious criticism—because everyone agrees on its desirability. Putting it at its most charitable, it is a matter for comment that it has taken since April, 1953—when we heard evidence—until now to produce this Bill. In fact, it has taken very much longer, because, when we were hearing evidence on the subject, it was already pretty old history. It had been going on for at least six or nine months.
    This is a particularly good illustration of some of the problems that caused the Estimates Committee to indulge in some rather strong language, and I think the House will agree that they did so with a good deal of justification. We have the admission of the Government that they have been playing about with different methods of securing a perfectly straightforward result, about which everybody was agreed, whether the argument was that it could be done without legislation or that a one-Clause Bill was needed. The evidence we had before the Select Committee showed that this delay was holding up the physical requirements of the electrical industry. I really can do no more tonight than remind the House of this Report of the Select Committee that was charged with responsibility for looking into these matters.
    I conclude with two questions. What is to be tine nature of the grant and what are to be the terms of the
    1468
    grant? Will it be similar to or different from the grant under the gas industry Order? It is not quite clear.
    8.11 p.m.
    Mr. Arthur Palmer: Like my hon. Friend the Member for Widnes (Mr. MacColl), I do not quarrel about the introduction of this Bill and I do not think the House will quarrel about it, but I am certainly of the opinion that the Bill should have been brought in previously. It is a very necessary Bill, and it is a great pity that we have not had it before tonight. My hon. Friend, with his usual clarity and ability, brought before us the remarks of the Select Committee on Estimates about the delay there has been, because of these technical legal difficulties about making the grants, in getting something done about Civil Defence protection for electricity supplies. That is a somewhat serious matter which should not be dismissed too lightly.
    The Parliamentary Secretary said that the purpose of the Bill was to ensure the due functioning of the electricity undertakings, as far as that could be ensured, in the event, which we all hope will never happen, of hostilities occurring again. Just how far is this money likely to go? It is estimated that in the coming year just over £1 million will be spent. Since that is roughly 50 per cent, of what will be spent altogether in the coming year it seems we are likely to spend just over £2 million, that is to say, if the plant and equipment are available to make the spending of the money realistic. Towards ensuring the due functioning of electricity undertakings in the event of attack that amount of money will obviously not go very far. I should like the views of the Parliamentary Secretary on that point.
    This money is not to be devoted to training. That is a matter for the Home Office. I know that that is the case. Were we talking about training we could say that the electricity industry already has a fairly high proportion of trained people in Civil Defence. The money is mainly for the provision of spare plant, extra transformers, switch gear and so on, easily replaceable if standing plant should be destroyed or damaged.
    We are still very much in the dark, because there is so much general secrecy about it, as to what effect another war will have, should it come, and what effect

    1469
    it will have on the functioning of public utility undertakings. I am wondering if the Government are looking to the effective functioning of the electricity undertakings in this connection. For instance, I suppose that with atomic warfare it will be necessary to design very special types of emergency power stations, some, perhaps, deep underground, to provide a minimum electricity supply should the normal over ground power stations be destroyed or put out of action. I should like to hear the Parliamentary Secretary's views on that.
    I have had some experience of this matter. I was engaged in electricity supply in London during the war. I have been in large power stations during and soon after an attack. A surprising feature was how a large power station could swallow up bombs fairly easily without being put out of action. That was contrary to previous speculation. Everything depended on where the bomb fell; not upon the area of the damage it could do, but often whether by luck it hit a particularly vital part of the plant.
    It is no longer a secret, and I may recall what from the enemy's point of view was a very lucky raid—although unfortunate for us—when a small bomb penetrated the centre of Battersea Power Station and put the control room out of action one misty September afternoon in 1940. Because it was the control room the great power station was out of action for a day or so, but also because it was the control room alone it was possible for emergency connections to be made and the station put into action again in a reasonably short period.
    I do not want to weary the House with tales of that kind. The experience of another war, should it come, may be very different. I am wondering, therefore, looking at the trivial nature of this present suggested financial grant, if the matter is really being studied seriously, because if it is a job to be done at all it certainly should be well done. I should like some guidance from the Parliamentary Secretary about how far the precautions to be taken are likely to be effective in the event of another war under the new circumstances of atomic bomb attack.
    8.18 p.m.
    Mr. Philip Noel-Baker: The Parliamentary Secretary has given us a clear explanation of why the Bill is
    1470
    required, and there is nothing in what he said that I wish to contest, and, of course, we shall not vote against the Bill. My hon. Friends have asked him some questions arising out of the Report of the Select Committee, and I would emphasise their requests to him to say whatever he can in answer to their observations. I shall not say more on that point because I think, and I certainly hope, that in the near future we may have another opportunity of debating that most important and very carefully documented Report.
    I should like an explanation of the very curious percentage of grant which is to be made to the British Electricity Authority—52¾ per cent. I think I used to understand the history of that percentage once upon a time. Perhaps I could repeat it now, but I am not sure. I think it will be quite useful to have a clear official explanation of this figure placed on the records of the House, so that everybody can know why the British Electricity Authority will get 52¾per cent, grant only while the other boards and authorities will get much more.
    I do not want to ask the Parliamentary Secretary to say anything which, on security grounds, he might wish to avoid saying, but if he could say something about the probable efficacy of the measures Which the Government hope to take through this £1,200,000 which they intend to spend at once, that would be worth while. We probably all have varying opinions about the general efficacy of any measure of Civil Defence in a future war. We may hold—some no doubt do—that nothing would be much good against a large-scale attack by atomic bombs if the bombs were dropped near their target. It is airways possible, however, that there may be another war conducted by conventional weapons with atomic bombs in existence but never used, just as we and Hitler had poison gas in the last war but refrained from dropping it on each other's country.
    I have no doubt 'that Hitler refrained only because we made it extremely clear to him what would happen to Germany if he started. It may be that we could stop a future aggressor by that means. Personally, I do not think it very likely.
    I think that if a man in the 20th century, after his experience of the last war, is resolved to start a war; if he has atomic bombs and if he understands what

    1471
    devastation he might reap by a surprise attack, that attack is very likely to be made. He will be a maniac, and if he is a maniac, why should he refrain from using the most devastating weapon at his command?
    I do not think it very likely that we shall have that kind of war, with atomic bombs in existence but not used while conventional weapons do what they did last time, and I confess that I think the new development of atomic artillery does not increase the chance. Personally, I regard that with grave misgivings.
    My hon. Friend the Member for Cleveland (Mr. Palmer) told us a little about his experiences in London. I wish he had told us a lot more, because they were very interesting and valuable as a guide to future efforts. Having to deal with a larger scale of bombing that we ever had to endure, the Germans proved—and we proved this up to a certain point—that measures of Civil Defence against high explosives can provide a remarkable result, and that life can go on when it might seem that it is impossible for any normal production or activity to take place.
    Even against this atomic bombardment, I think measures could be devised which would produce a real effect, but I think it likely that they would be extremely expensive, far beyond our present power to provide. If we must choose, I am afraid it is likely that our best defence against the dangers of the future is to put more money into active military defence and less into passive Civil Defence. That is a grim thought, but I am afraid it is true.
    As Sir John Anderson, now Lord Waverley, said in the first debate on Civil Defence in this House after the war, we must try to find some middle way between doing nothing and attempting the impossible. I should like to know whether the Parliamentary Secretary can tell us what are the sort of measures which he intends to take, some of them no doubt designed to deal with the effects of attack by conventional weapons and some, I hope, designed to deal with the possibility of atomic bombs. Let me point out that under the second of those types of attack, the danger to power stations is very great.
    1472
    Attached to the evidence given to the Select Committee, there is an Annex No. 1 called "Civil Defence and Atomic Attack." It describes the four different kinds of danger which an atomic bomb produces—blast, heat-flash, gamma radiation and residual radioactivity. The Committee has written this Annex in terms of what it calls a "nominal" bomb—of 20 kilotin size—which is about the same, it says, as that which was dropped on Nagasaki.
    We ought to bear in mind that atomic bombs exist today which are 10 times as powerful as that which was dropped on Nagasaki, and I believe it is a conservative estimate that a hydrogen bomb would be 100 times as powerful. Let us, however, consider the matter in the terms of the "nominal"20 kilotin bomb. Blast will cause severe devastation up to three-quarters of a mile and considerable devastation up to two miles from the point at which the bomb falls.
    Heat-flash will cause burns to those who are not protected up to one-and-three quarter miles. One bomb would probably start 1200 fires in an area where all the roads were blocked by rubble. Gamma radiation will cover a very wide area, with grave danger to those who are not protected, perhaps up to one-and-three-quarter or two miles.
    But by far the greatest danger to the power stations is the residual radio activity, because an atomic bomb dropped in water produces a terrible effect and our power stations, by their nature, must be close by water. Many of them are on the coast, including some of our new stations and our best stations. Some are in the estuaries of great rivers. Some of them are on the Thames very near to here. I do not think we could get the kind of effect produced at Bikini from the River Thames, but it is the same kind of effect which we must bear in mind.
    This is what Annex I has to say:
    "It is in the case of surface, or below surface, bursts"—
    particularly in water—
    "that the dangers of residual radioactivity assume greater proportions. Our knowledge is incomplete, but from published information about the American atomic test at Bikini it can be calculated that if a burst of this type occurred inshore and the radioactive mist and spray drifted on to the land, an area of several square miles would be so heavily contaminated

    1473
    that the chance of survival of people in that area would be very small indeed. A water-burst of this kind in or adjacent to a port with an onshore wind might therefore produce casualties on a scale comparable with those from an air-burst. This type of attack on ports cannot be ruled out"—
    any more than it can on power stations—
    "and it is a major Civil Defence task to study how to deal with such a situation. Any general decontamination of the area is out of the question and indeed the free use of the area by personnel might not be possible for weeks or even months."
    I believe it is a fact that ships which the Americans used at Bikini could not be decontaminated and after 18 months were sunk. That is the kind of danger which might confront us in trying to protect our power stations. Whatever else the Parliamentary Secretary may be able to do, I hope he will do his utmost to provide some underground shelter for the personnel and for the controls which will give them what security there can be and which will leave the personnel some route of possible escape from this contaminated area. It will not be very easy and it will be very expensive, but I think it ought to be attempted.
    Every time we introduce any new measure to deal with Civil Defence against a future war, I think we must remember that the only defence is not to have the war and that the only certain way not to have the war is to work for all-round international disarmament under international control. There are, of course, other ways of preventing war. Two nights ago, the Government refused to increase their contribution to the Technical Assistance Programme of the United Nations. The sum which will be used for power stations under this Bill is double that contribution. I hope that it may produce as great a result.
    8.30 p.m.
    Mr. Joynson-Hicks: I think that I should say, if the House will allow me to reply to the debate and speak a second time, that we have had an exceedingly interesting although, perhaps, a slightly unexpected debate on this rather small Measure. I should like very much indeed to follow the right hon. Gentleman the Member for Derby, South (Mr. Noel-Baker), in the exceedingly knowledgeable and well-informed information which he has been giving us, on the question of the principles, possibilities and anxieties of atomic warfare. I should hesitate to do
    1474
    so, however, Mr. Deputy-Speaker, not only because it is a subject with which I am nothing like so conversant as the right hon. Gentleman, but also because it might lead me into trouble with you, if you were to regard the limitations of the debate with that degree of strictness for which we respect your Rulings.
    I should like to remind the right hon. Gentleman and also the hon. Member for Cleveland (Mr. Palmer), who raised the same questions in a different form, that the points to which they have drawn attention are very well within the knowledge and scope of those who are responsible for the Civil Defence of the industry. I would say that anyone who has attended, as I have, the Civil Defence exercise at the British Electricity Authority's place at Horsley Towers could not fail to be struck by the exceedingly realistic and practical way in which we are endeavouring to learn how to tackle this problem. This evening we are primarily dealing with the question of physical defence on the generating side of the industry. That is the business for which this Bill is being introduced.
    It is, as the right hon. Gentleman said, very largely a question of striking the right balance between doing nothing or attempting the impossible. One can, as he intimated, go exceedingly far in the direction of attempting the impossible, and then very likely it would not prove successful, even if an emergency occurred. What, therefore, is intended to be done by virtue of these powers is to try to ensure that the most vulnerable points are either protected or duplicated so that if there is some part of the system eliminated or temporarily put out of action, something else will be able to be switched in to take its place, or that there will be repairs or alternative supplies immediately available.
    That brings me to a point of considerable difficulty. I appreciate very much, if I may say so, the welcome which the right hon. Gentleman gave to this Bill in his approach to the subject and the very helpful way in which he made his speech. I want to reciprocate and to be helpful, but he particularly asked me to explain how we arrived at the figure of 52¾ per cent. I would remind the right hon. Gentleman that that figure is not referred to in the Bill. I wonder if he is

    1475
    going to be here for a few minutes longer, because this subject might be very well discussed on the next Order, and possibly we can cover the point then.
    So far as the question of the hon. Member for Cleveland is concerned, as to how far the money will go, there we are on safer ground, because I think that he was referring to the Financial Memorandum to the Bill. The answer to that is that the estimate is not going very far this year, but it is a figure which we believe the industry will be bard pushed to spend during the course of the financial year. Obviously, it is not a once for all payment. Protection will have to be continued as the industry develops.
    That very largely brings me to the speech of the hon. Member for Widnes (Mr. MacColl). I appreciate very much what he said and I am delighted that we have a member of the Select Committee in the House to assist us and help discuss these matters and to explain personally the anxieties and fears which that Committee very fully set out in its Report and to which we have given due attention and careful study. The hon. Member asked what were to be the terms of the grant. He will appreciate that no grant is specifically referred to in the Bill. It is an enabling Bill, to enable the Minister to make regulations which will deal with the grant and fix its rate. The regulations will be debatable by reason of the necessity for them to be subject to an affirmative Resolution.
    On the question of timing and delay, it is quite clear—I hope the right hon. Gentleman will accept his share of responsibility in this—that there has been considerable delay in arriving at the decision, not only as to what the powers should be, but that they should be taken and put into operation. But I do not think anything has been lost by it. It is true that after the question of the rate of grant, which was the first thing to be decided, had been discussed and agreed between the industry and the Government, the next question was how to put it into operation.
    I ask the House to bear in mind, however, that during all that period, to which the hon. Member referred, the industry was stretched to its absolute limit in order to provide additional generating capacity.
    1476
    As a very great deal of the due functioning expenditure must necessarily be incurred in stockpiling, especially of essential and vulnerable parts, it may well have been more advantageous to the country, in the circumstances which have happened, that those particular parts were brought straight into practical use in order to increase the generating capacity to the extent that we have succeeded in getting through the past fortnight without any power cuts. As the hon. Member very fairly stated, there were in the early stages also the difficulties occasioned by shortage of materials and non-availability of plant, and there were the problems, which took a considerable time to settle and decide, as to what was the right and proper rate of financial contribution to be made.
    Finally, however, I accept the hon. Member's criticisms. There was the problem of how legally these matters should be implemented. I take it as rather a compliment to my opening remarks that the hon. Member has given the impression that the task has been so easy, because I assure him that it is an exceedingly difficult problem and one which has taxed the ingenuity of the lawyers for a long time.
    What I did not refer to is that there is another Act—the Civil Defence (Suspension of Powers) Act, 1945, which suspended the Civil Defence Act, 1939. Then we had the Electricity Act, 1947, which, as I mentioned, repealed the relevant provisions—Section 42 of the 1939 Act—which at that time were in suspension. The point as to what happens when a provision which is in suspension is repealed gives rise to a great deal of difficulty.
    The Civil Defence Act, 1948, gave power to revive and also to amend and vary the 1939 Act. Can one revive, amend or vary a provision, which has been repealed while it is in suspension? It is a matter of considerable difficulty, and I do not think the House would have appreciated it had we come along and misled hon. Members on this exceedingly technical point, on which I would only claim to speak upon advice. In the end it was felt that the doubt, as the hon. Member has indicated, was of sufficient weight to warrant the introduction of another Bill rather than run the risk

    1477
    involved in utilising the powers in the 1948 Act and seeking to revive the powers of the 1939 Act by means of Regulations.
    Mr. MacColl: What puzzles me is that if there is this difficulty, surely the wise thing to do is to assume the worst and to assume that these tricky claims with their various suspending Acts will not work, and so straight away cut the Gordian knot and bring in a straight forward reinstatement under Section 6 in order to help the undertakings in the industry. I can quite imagine the lawyers having a "whale of a time" discussing this matter for two or three years and devising ways of doing something which could have been simply done in the straightforward way I suggest. We cannot understand why the simple thing was not done straight away.
    Mr. Joynson-Hicks: I can quite appreciate the hon. Gentleman's point of view, but if there is a way of avoiding the introducing of an Act of Parliament, it is a normal reaction of one's legal advisers to try to find out. It is by no means an easy thing to do, and I think the House will agree that the fewer the number of unnecessary Bills that are introduced the better the House is pleased.
    I think I have replied substantially to the points which have been raised, and I am glad that all the problems and difficulties have now been overcome and that we are, if the House is agreeable, in a fair way to putting the matter in order, by enabling my right hon. Friend to make the regulations to assist the industry to have these due functioning measures, which we are all agreed are necessary and desirable.
    Bill accordingly read a Second time.
    Committed to a Committee of the whole House.—[Mr. Legh.]
    Committee upon Monday next.

    CIVIL DEFENCE (ELECTRICITY UNDERTAKINGS) [MONEY]
    Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
    [Sir RHYS HOPKIN MORRIS in the Chair]
    Resolved,
    That, for the purposes of any Act of the present Session to enable grants to be made in respect of measures taken to secure the due functioning of electricity undertakings in Great Britain in the event of hostile attack, it is expedient to authorise any charge on moneys provided by Parliament which may result from amending section thirty-nine of the Civil Defence Act, 1939, so as to make it applicable to electricity undertakings, and making section six of the Civil Defence Act, 1948, apply to the said section thirty-nine as so amended.—[Mr. Joynson-Hicks.]
    Resolution to be reported upon Monday next.

    CIVIL DEFENCE (GAS UNDERTAKINGS)
    8.45 p.m.
    The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I beg to move,
    That the Draft Civil Defence (Gas Undertakers) Regulations, 1954, a copy of which was laid before this House on 2nd February, be approved.
    Now we come to the other side of the picture. My right hon. Friend, as the designated Minister, has powers to make Regulations for ensuring the due functioning of the gas industry, and these are the Regulations which have been laid before the House and which we are anxious to make. In them hon. and right hon. Gentlemen will see that the first Regulation provides that the Minister may serve a notice on any gas board to ensure that they shall report what measures for the due functioning of their undertakings they are taking. Conversely, the Minister also has power under the Regulation to call upon the board to take such measures for the due functioning of their undertakings as he may think fit.
    I am delighted that the right hon. Member for Derby, South (Mr. Noel-Baker) has been so patient, and I am grateful to him. I now come to the matter in which he is interested, and it is a substantial one. The second Regulation authorises

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    the Minister to pay in these circumstances out of moneys provided by Parliament, grants not exceeding 52¾ per cent. of the expenses. In the 1939 Act the figure was 50 per cent. The reason for the present rate is that it is based on a cumbersome and technical mathematic calculation which depended upon the rate of tax. The object of this grant is that it shall be in substitution of the benefits which the industry would be able to derive if it was paying for these due functioning measures out of income and was able to set them off against its tax liabilities and set them off against its tax liabilities and depreciate them in the ordinary commercial manner.
    What is done, therefore, is that the Treasury and the industry calculate together and agree upon what the tax benefit would be, and this is paid to the industry as a grant on the initial capital expenditure which it incurs. The industry undertakes that it will not claim depreciation or any other tax benefits against the expenditure for which it has received a grant.
    I hope that the right hon. Gentleman will not press me as to how that calculation comes out at 52¾ per cent. I can only assure him that this is the figure which I am advised has been agreed between the Treasury and the industry. For the rest, I do not think there is anything which will be of general interest to the House in these Regulations. The additional Sections of the 1939 Act which are revived are primarily of a formal character—the serving of notices, penalties and the requirement by the Minister that he shall be entitled to receive proper accounts. That is probably the most important of the requirements contained in Regulation 4.
    I think the House now knows what kind of work it is intended to deal with under the due functioning measures. So far as the gas industry is concerned, it is much the same as in the case of the electricity industry.
    8.50 p.m.
    Mr. James MacColI: There is a further explanation which I should like to have from the Parliamentary Secretary. The point arises out of the First Report of the Select Committee on Estimates, 1953–54. In answer to question
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    No. 1551, on 27th April last year—a long time ago—we were told in evidence:
    "In the last resort I do not think the nationalised industries, being nationalised industries, would refuse to go ahead with projects which we think are essential for defence but naturally they do show or will show reluctance to saddle boards with substantial expenditure unless the position is clear. It is rather our anxiety to get these grant regulations through so that we can go to industry and say, 'Everything is clear for you now. Press ahead as fast as you can.'"
    That was April last year. It is now February, 1954.
    Apparently the Ministry has been wishing all through that period to get ahead with these Regulations. As I understand it, there is no difficulty at all about presenting these Regulations in connection with the gas industry. It is perfectly clear that they are being laid in pursuance of Section 8 of the Civil Defence Act, 1948, and there is no doubt that they can be laid in pursuance of that Section.
    I accept the explanation from the Parliamentary Secretary that there was a legal difficulty in the case of electricity. Whether those difficulties were solved as they should have been is another matter which it would be out of order to discuss now, but in this case there is no trouble at all about the parent Act. If we were told very nearly a year ago that there was a danger of the industries being held up because they did not know where they were, why has it taken until now to lay these Regulations? I hope that the Parliamentary Secretary can answer that point.
    If I may anticipate my right hon. Friend the Member for Derby, South (Mr. Noel-Baker), the only other question I want to put is about the grant. I have made a calculation, which I hope is correct, that 52¾ per cent. is approximately 10s. 6d. in the £. That seems to have had some connection with 9s. 6d. in the £, which at one time was connected with Income Tax. I do not want to worry the House with details of the calculation, but I have checked it and I think that it is right. One divides by five.
    Mr. F. Blackburn: Do not go into any explanation.
    Mr. MacColl: I think that my hon. Friend is right. It would be wise not to lay oneself open too much.

    1481
    If Income Tax is now altered, should not there be an alteration in the percentage, and will there be a change in the grant every time there is an alteration in the Income Tax? If so, that seems to me rather confusing. To anyone with experience of local government it seems an extraordinarily mysterious way of doing it. I thought that one had ranged through all the possibilities of queer grants in the ordinary financing of social services, as my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) used to do. But this is unique. No one in his wildest dreams would ever think that a local authority would be paid on the basis of 52¾ per cent. Why is it necessary to have this queer figure? How is it calculated, and will it vary every time the Income Tax is changed?
    8.54 p.m.
    Mr. Philip Noel-Baker: I do not want to stand between my hon. Friend the Member for Widnes (Mr. MacColl) and the Parliamentary Secretary, but I hope that in administering these Regulations and using these powers the Parliamentary Secretary will pay the greatest attention to valves for isolating sections of the gas system. Power stations are dangerous targets, as I have explained. Gas plants are very dangerous targets, because gasometers may explode and fire may spread along the mains. I do not know what we can do about it except isolate the system in sections by means of valves. I hope that the hon. Gentleman will bear that in mind.
    8.55 p.m.
    Mr. Joynson-Hicks: We share the view of the right hon. Gentleman that his point about valves is important. I have no doubt that it will be noted. Possibly I slightly misled the hon. Member for Widnes (Mr. MacColl) with my remarks about the 52¾ per cent. That percentage was originally based upon the tax element, in the manner to which I referred, but
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    it has now become a fixed item and no longer fluctuates. So, once the hon. Member can digest and become accustomed to that figure he will be quite comfortable with it. He need not fear that it will change or upset him in any way.
    There is one other point which I noted in the course of the remarks of the hon. Member—the delay since April. There is not there the same substance as there was in the question of delay which he was raising a little earlier. We are still in the same financial year. So long as the industry were assured, as they were assured, that the recoupment, or grant would be able to be made to them during the financial year, they were quite happy.
    Resolved,
    That the Draft Civil Defence (Gas Undertakers) Regulations, 1954, a copy of which was laid before this House on 2nd February, be approved.

    SLAUGHTER OF ANIMALS (AMENDMENT) [MONEY]
    Considered in Commitee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
    [Sir RHYS HOPKIN MORRIS in the Chair]
    Resolved,
    That, for the purposes of any Act of the present Session to implement certain recommendations of the Committee of Inquiry into the Slaughter of Horses and otherwise to amend the enactments relating to the slaughter of animals, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the said Act—

    (a) in the administrative expenses of the Minister of Food or the Secretary of State; or

    (b) in the sums payable out of money so provided under Part I or Part II of the Local Government Act, 1948.—[Major G. Lloyd George.]

    Resolution to be reported upon Monday next.

    LAKE WINDERMERE (CARAVAN SITE)
    Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Legh.]
    8.58 p.m.
    Sir Ian Fraser: I am sure this House would wish to cherish the beautiful places in Britain, and the matter which I beg leave to bring to notice is one which concerns one of our most beautiful places, namely, Lake Windermere. It is also a matter which raises a general principle, to which I hope the House will not be unwilling to devote its attention.
    There is a proposal to establish a caravan site, or a site where chalets may be built on the lakeside of Lake Windermere. The appropriate authority which deals with these matters is the Lake District Planning Board. I propose to give the House the facts in this case, but, before I go into detail, I wish to summarise by saying that at the moment a proposal is under consideration for the establishment of such a caravan site. There is an acute difference of opinion in my constituency as to whether this is a desirable thing—as to whether it is desirable in itself and also as to whether it may not be the thin end of a wedge which, as time goes on, might change the character of Lake Windermere. That is the way in which my constituents look at the matter and why I have brought it to this House.
    Under the Town and Country Planning Act, 1947, Parliament set up a new local authority called, in this instance, the Lake District Planning Board, to look after these beautiful places, such as the Lake District and other select spots in Britain; to see that no untoward development takes place and that nothing is built or done to destroy their character and beauty.
    This Board is a kind of supra-authority. Local authorities are represented on it and also certain societies interested in the amenities of the countryside. When a person desires to create new development in a National Park he goes to this local planning authority and asks for a licence, which may or may not be granted to him. Under Section 16 of the Town and
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    Country Planning Act, 1947, if an applicant succeeds in securing his licence, there is no more to be said. He goes ahead, and no one can say him nay. No one can question the matter and, for all practical purposes, that is the end of it.
    But supposing the applicant fails. Then, under Section 16, he can go to the Minister and say, "I have failed in my application. May I now demand reconsideration of it? May I demand an inquiry?" The Minister may cause the whole matter to be reconsidered. He may set up a public inquiry to go into the merits of the case. But, if the applicant is successful, no objector may appeal to the Minister or, if he does, there is, for all practical purposes, nothing the Minister can do about it.
    I will show later that there is one thing the Minister may do and which I will ask him to do, but there is not the same freedom of appeal for the objector who is hurt by the proposed development as there is for the unsuccessful applicant. That would seem to me, and to many of my constituents, to be extremely unfair. I cannot imagine how this House—
    Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): That would seem to be a criticism of legislation and not of administration.
    Sir I. Fraser: Having regard to the fact that Parliament passed this Act, it seems to me that an obligation rests upon the Minister to deal with the situation which I have outlined by administrative action. That is one of the requests which I wish to make to him.
    Hon. Members may be aware that an applicant may come to a committee of this Lake District Planning Board, or similar authority, and that such a committee may sit in private. The applicant may put this case before the committee and no one who is interested or affected need know anything about it. No notice is required to be given, the whole thing can be secretly arranged and practically fixed and settled in the committee of the planning board, and the only time it comes to the notice of the people is if somebody happens to talk about it, or, at the last moment, when it goes to the full Lake District Planning Board and is then discussed in public. But, until that moment, no one whose interest may be affected or is concerned about the

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    public interest need know anything whatever about it.
    A very special responsibility rests upon the Minister, by administrative act, to avoid the consequences of the unfortunate chain of events to which I have referred. The Minister certainly has power to cause a public inquiry to be held, and if we were to cause the local planning authority to give notice when a proposal had been made for a very large and substantial development which might affect a great many people's interest, all those whose interest might be affected or who were concerned about what they thought to be the public interest could attend and make their representations. We should at least be assured that all objections were properly heard. But that is not the way it works. It can be secretly fixed up and practically brought to a final conclusion before being ratified at the public session.
    I ask the Minister to give us an assurance that, either now or when such cases arise in future, he will instruct local authorities, or advise them if he cannot instruct them, when development scheme applications are made, to cause the applicants to advertise them and give notice of them with sufficient particulars so that those whose private interests are affected or who think the public interest is affected will know about it. We should thus at least make sure that nothing could occur which would be secret to those whose interests may be affected.
    I also ask that where there is a substantial body of local opinion which makes itself known as adverse to or critical of any proposed development, the Minister should, in advance of a decision by, say, the Lake District Planning Board, cause a public inquiry to be held. Due notice having been given, all sides could have their say at the public inquiry. Those who felt that it was good development could attend and say so and those who felt that it was bad and affected their interests or the public interest could also say so.
    Having been advised of this matter by a member of the Ulverston Rural District Council, I wrote on 18th December to the Minister of Housing and Local Government bringing these facts to his notice and asking him to set up such a public inquiry. I told him that the Lake
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    District Planning Board would meet on 5th January and asked him to set up a public inquiry before that date or to defer the date of the meeting if, because of the Christmas vacation, he could not set up the inquiry in time.
    I had a letter from the Minister on 6th January, the day after the meeting of the board, and in it he said that he thought that the circumstances of the matter were fairly well known locally and that he did not see any need for a public inquiry. That is very unsatisfactory. The matter was known only because one or two people happened to hear of it. There was widespread feeling of resentment about the matter among my constituents, but the opportunity for making representations at a proper public inquiry was not provided. Who knows but that very much larger numbers of persons might have come forward on either side and given evidence? I am bound to say that I have not as yet heard from one single person in my constituency who desires this caravan site to be encouraged or enlarged, or even allowed at all, whereas very considerable numbers have expressed themselves to me as being opposed to it.
    I want to ask the Minister four questions. Firstly, will he do whatever he can do administratively to see that, where an application is made which prima facie touches private interests or the public interest, he will see that public notice is given of it? That is the first thing. Secondly, where as a result of such notice there is a substantial degree of opinion expressed against the application, will he ensure that a public inquiry is held before the decision of the local Planning authority? Thirdly, if I were to suggest that the Town and Country Planning Act should be amended, you, Mr. Deputy-Speaker, would say it was out of order, so I will not say it. Fourthly, may I point out to the Minister that, under Section 21of the Town and Country Planning Act, he has power to revoke an order, and that he has used something like that power in the case of the television proposals for Dartmoor? He can use that power, because, although I admit that it is an ultimate sanction, he can revoke an order under Section 21 and cause the whole matter to be reconsidered.
    Easier still, I am not at all sure that, technically, the licence applied for must

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    inevitably be refused and a new licence issued, because what the Lake District Planning Board did was not to refuse the application but to give a modified licence, subject to certain conditions, or, at least, that is what they said they will do. Technically, it may be that they may have to reject the original application and give instead a much more limited licence with these conditions. If that be so, there appears to be a moment at which, the refusal of the original application having been made and the new licence subject to conditions not yet having been granted, there is no licence at all, but a sort of negative vacuum.
    During it, it seems to me, the Minister, without invoking the heavy machinery of revocation, could say that a case had been made out for a public inquiry. Let us hear whether the people who are concerned really want it or not, and, therefore, my final request to the Minister is that he should take advantage of the opportunity which is now presented to him either of revoking an order, or, if that is not necessary, ordering a public inquiry at which the whole of the circumstances may be heard.
    The Ulverston Rural District Council, which is a very important and well respected local authority, the parish council, the county agricultural executive committee, the Friends of the Lake District, and a very large number of my constituents of all kinds anl classes think that this proposal is not only out of character with the essential nature of Lake Windermere, but that it adversely touches their interests and the public interests.
    A final word about the character of Lake Windermere and the tests which local planning boards should apply in judging what developments are desirable. I am the last to say that mass entertainment, or considerable organised holiday camps, or groups of caravan sites, and all the fun of the fair which may go with them are not desirable things. On the contrary, they are most desirable, and contribute greatly to the well-being and happiness of many people. In my constituency the famous watering place of Morecambe provides exactly that for very large numbers of our people. But the people of Morecambe would not wish Windermere to be changed from what Windermere is.
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    One of the great attractions about going to Morecambe is that one can take a charabanc and go for the day to the Lake District to see something, not necessarily better or worse, but different in character. It would be no contribution to the well-being of the people in the great towns and cities if Windermere were the same as Morecambe. The great and enormous advantage is that these places are different. Morecambe, I think, is the best place of its kind to provide the kind of entertainment, relaxation and rest which its visitors can afford.
    Let Windermere remain what it has always been—one of the most beautiful lakes in the world, surrounded by quiet scenery. Do not let it develop into a place where all the fun of the fair can be had, and where caravans, chalets and other developments out of character and out of type may spring up. The promoters may say that nothing could be further from theirthoughts than such development, but directly a new element is introduced it is not known how far it will go. There may be utter confidence in the promoters, but what about their successors, and the vested interests that may be brought into being by possible development at the side of this great lake?
    Public interest contains a number of elements. There is the interest of the people living around Lake Windermere—they do not want this proposal. There are those in such places as Blackpool. Morecambe and Southport—they certainly do not want it. There is the interest of the public living in London, Birmingham or other big towns; I confirm that they do not want it. If they want to go to Morecambe, Blackpool or Southport—and I especially commend Morecambe to them—they will enjoy what they expect to enjoy and what is there—the best of its kind and nature that can be provided. But if they want to go to the Lake District they want the attractions of the Lake District—not find some 2,000 people in charabancs polluting the water, killing the fish, annoying their neighbours and changing the character of the place.
    For all those reasons, Iask the Minister seriously and earnestly to consider doing the four things for which I asked. I shall repeat them. First, will he see that notice is given of projects of

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    this kind; secondly, will he see that a proper public inquiry takes place before anything so inimical to the interests of the people concerned is begun; ray third point was out of order, and, lastly, will he use his powers to revoke what has been done and cause a public inquiry to be instituted forthwith?
    9.20 p.m.
    Sir Wavell Wakefield: I am indebted to the courtesy of my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser), who advised me that he was going to raise this matter on the Adjournment. I am completely at one with him in his desire to preserve the amenities, the beauty and the loveliness of the southern part of Lake Windermere, in the National Park. For nearly half a century, since I was a small boy, I have spent my holidays on that part of the lake. I continue to do so with my daughters and grandchildren, and there is nothing further from my thoughts than that I should be a party to the lake becoming another Morecambe. Heaven forbid!

    It is fantastic to suggest that that beautiful part of the lake is going to be turned into a kind of Morecambe Bay, ringed with Butlin camps and all the rest. Such an idea is quite preposterous, and to suggest that this proposal seeks to do anything of the kind is about as far from the truth as we are from the moon. This site, which it is proposed to develop, on the eastern shore of Lake Windermere, belongs to a company of which I am the chairman. It is a private family company, and this property has belonged to my family for upwards of 150 years.
    It is an 80 acre site, 65 acres of which are full of trees and coppice, five acres of rough grazing—and, believe me, it is very rough grazing, consisting mostly of rock and heather—and 10 acres of pasture, some of which is frequently flooded by the lake. This site has been used as a chalet and caravan site for most of this century. My hon. Friend said that the proposal was to establish a caravan site there, or a site where chalets may be built, but the proposal is nothing of the kind. These caravans have been there for 40 years or more. For some time about 40 chalets and caravans have been placed there. The proposed development is to increase the number of caravans to 75, or rather fewer than one per acre.
    Sir I. Fraser: That is not what was proposed.
    Sir W. Wakefield: That is the proposed development. Originally, the proposal was for up to 300 caravans, or rather more than three caravans per acre.
    Let us consider what is required in these National Parks. First, the Lake District Planning Board, which was set up to supervise the planning of these Parks, is there to preserve the amenities, on the one hand, and to provide facilities for public recreation on the other. In its first annual Report the Lake District Planning Board stated that frequently there was difficulty in reconciling the preservation of amenity and the provision of public recreation.
    The Board was always in a difficulty in that matter, so my family, when we read of the policy of proposed development, offered to develop this site, because, in the words of the Planning Board, this site was
    "conforming to their future policy by which organised caravan camping sites should be established roughly on the perimeter of the National Park. They feel that this site by reason of its siting on the edge of Winder-mere, the configuration of the ground and the cover provided by the trees and other vegetation is ideally sited for caravan camping."
    Colonel Ralph Clarke (East Grin-stead): Was the intention that this site should be a temporary caravan camp for people on holiday for perhaps a fortnight or a month, or was it for residential purposes, for caravans to be there for, perhaps, six months or a year or longer—really a form of housing?
    Sir W. Wakefield: The intention was to develop that site in conformity with the Lake District Planning Board's requirements. The offer was made that this site should be used for whatever purpose the board considered to be in the public interest.
    Colonel Clarke: I thank my hon. Friend.
    Sir W. Wakefield: The offer was made to plant trees if required; to try out various kinds of chalets, if required; to provide caravans for weekly people, if they were wanted. The company offered to do whatever the Board wanted for carrying out its statutory duty to provide recreational facilities for the public, at the same time

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    preserving amenity. That was the position. My family and I considered that as landlords in that National Park it was our public duty to do what we could to further the publicly-stated aims of the board and of the National Parks Commission.
    I would draw attention to what the National Parks Commission says in page 12 of its Report for the year ended 30th September, 1953. In that report the Commission says that:
    "The Park Planning Authorities, moreover, have given attention to the provision of authorised camp sites, each accommodating a number of caravans or tents appropriately placed or screened. Good new camp-sites to accommodate a limited number of caravans or tents, properly sited and well-run, will be a welcome addition to the facilities in the Parks for open-air recreation: furthermore, such sites when available will be an asset to the Park Planning Authorities in their task of controlling caravanning and camping generally."
    The Commission refers to the Lake District Planning Board's policy and says:
    "The Planning Officers further recommended the selection of potential small sites on the dales and lake shores for small groups of caravans suitably screened or tucked away into the landscape; encouragement to owners of such sites, when found, to make them available and at the same time to discourage the use of other parts of their land for caravanning.…"
    We considered it our duty as landlords in that part of the National Park to make this site available to assist the planning board to carry out its duties as laid down by Parliament.
    The Report goes on:
    "…and the establishment, under the aegis of the Board, of a few suitable sites on a larger scale, properly laid out and serviced, within easy reach of towns or villages."
    This site is ideally suited for those people who wish to boat or fish or swim or enjoy the walking and other facilities in that part of the National Park. The whole idea of assisting the board in developing the site is to enable such people to have privacy. Anyone who has been to Canada and seen the camps there, in the trees and thickets, where people can find privacy and enjoy fishing and boating, will fully appreciate what could be done with this site so that the amenities which my hon. Friend described in that part of the lake are not destroyed. They can be preserved, while allowing the public to enjoy the boating, fishing
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    and bathing facilities which exist in the National Park.
    My hon. Friend told-us that the local landlords objected. There are only a few local landlords who object, very influential and very powerful landlords; and they have objected to this proposed further development on a long-established site. What are their objections? They were heard at a public hearing. It is true, as my hon. Friend said, that various other public bodies interested in walking, caravanning and similar activities were not given an opportunity to support this development because they knew nothing about it. But the local objectors knew all about it and turned up in force to object as strongly as they could.
    What were their objections? I think it is right that the House should know them. First of all, an objection was "damage to amenities." I have already told the House that this site is ideally suited for preserving the amenities. The next objection was that the site was unsuitable, but the planning board itself, after very careful examination of this and other sites, said that it is ideally suited for caravan camping.
    Another objection was that the site uses agricultural land. I have explained that out of the 80 acres, five acres are rough grazings and 10 acres are pasture. It will be possible to continue farming on those 15 acres. I do not know what the local landlords told the agricultural executive committee, but there will be no interference with farming on that site.
    Finally—and this is supposed to be the trump card—the objectors stated that adequate provision had already been made in the district for caravan campers. If adequate provision exists elsewhere, that means that the site will not be used—so what on earth is all the fuss about? What are they objecting to? If these few, influential constituents of my hon. Friend say that there is already adequate provision for caravan campers and that there is no need for the extra development, what are they worrying about? They want to have their cake and to eat it; and all this shows the hollowness of their case.
    Sir I. Fraser: Would my hon. Friend permit me to answer his most friendly questions? They are not just a few influential constituents. I consider all my

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    constituents influential. Many hundreds of them, including of course two local authorities—the rural district council and the parish council—as well as the National Farmers' Union and the county agricultural committee, are involved here, not just a handful of influential constituents. I have not met a single one in favour of the project.
    Sir W. Wakefield: Has my hon. Friend consulted shopkeepers, garage proprietors, boatkeepers and a lot of others who are interested to see that there should be enjoyment of this National Park by some members of the public other than his few friends?
    Why is it that the Ulverston Rural District Council approved this site, approved everything, and then, when pressure was brought on it, changed its mind? On what grounds? I have not heard. I do not know on what grounds in view of these publicly stated facts and in view of the carrying out of the policy of the board, as laid down in its various publications. There have been no adequately stated reasons that I know of why the council should have changed its mind.
    As for the parish council, as my hon. Friend knows as well as I do, the parish council is to all intents and purposes the few people on that particular shore of Lake Windermere. I do not want to detain the House longer, but I think that the House should be thankful to the hon. Member for raising this matter, because it shows that if we are not very careful the public will not be allowed to enjoy the National Parks in the way that Parliament has laid down.
    There is this Planning Board there, which is doing its duty to the best of its ability, very carefully carrying out the preservation of the amenities and, at the same time, seeing that the public have proper right of access. I hope very much that the Minister will not do what my hon. Friend suggests, and stop this further very modest development for the public to enjoy the amenities of boating, fishing and bathing in that public park, because if the Minister does that he will be going exactly contrary to the wishes of Parliament and, to what the board is trying to carry out in accordance with its declared policy; and it will not be very much encouragement to other owners of property who believe they are doing their duty in furthering the plans of the board if the
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    Minister says that what they are doing is contrary to public policy.
    9.38 p.m.
    Mr. A. Blenkinsop (Newcastle-upon-Tyne, East): I want to intervene for a moment because, like many others I know this area very well, not only the area concerned at Windermere, but the whole of the Lake District, and I am among many who are most anxious that the efforts of the National Parks Commission to maintain proper standards of amenity are fully supported.
    It might have been thought that I might very well have intervened in order to prevent development by the addition of further caravans on a site like this. On the other hand, I recognise that if the public are to have an opportunity of enjoying this area it is absolutely essential that suitable sites in the Lake District shall be made available in a proper way for caravans and camping in order to avoid the general spread of caravans, and something very much worse than caravans, shacks of one sort or another, all over the Lake District.
    Therefore, I am quite sure that we should want to support the Lake District Board in trying to secure suitable places for camping and for caravans so that people shall have a proper opportunity of enjoying the area, which is indeed part of the whole purpose of the National Parks Act, and to avoid the destruction of amenities elsewhere. Therefore, the point which one has particularly to consider is whether development in this particular spot is right and suitable. I think that we in this House would be very ill-advised to disregard the declared advice of the Lake District Board itself in this matter. We have on the Lake District Board a wide representation of the amenity interests and other bodies representative of the local authorities and so on, who are, I should have thought, in much the best position to decide the actual location of the sites.
    Therefore, although I might have had some sympathy for the plea made by the hon. Member for Morecambe and Lonsdale (Sir I. Fraser), I have a good deal less sympathy after listening to the comments of the hon. Member for St. Marylebone (Sir W. Wakefield), and also because of my knowledge of some of the difficulties in the area concerned and, to

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    my way of thinking, a very difficult attitude that many local residents have put up towards the proper access to the area concerned in the recent past.
    For example, I know that it was hoped to establish reasonable access to the path round the lakeside. All kinds of difficulties have been put in the way of this modest and proper desire to establish a right of way by, I suspect, some of the very persons for whom, I fear, the hon. Member for Morecambe and Lonsdale has been speaking.
    Sir W. Wakefield: The Lake District Planning Board asked my company if we would agree to a public right of way along the lake and to a tree preservation order. We gladly agreed to both these requests.
    Mr. Blenkinsop: The fact that these difficulties have been put up by some local owners and residents does not predispose me to support the plea of the hon. Member for Morecambe and Lonsdale this evening. We have to hold very carefully the balance between the opportunity of use of the areas and the defence of their amenities. I cannot think of any better body to hold that balance than the body set up by Parliament to do so, and it seems to me that they are doing their best to carry out their duties.
    The hon. Member for St. Marylebone referred for a moment to the national parks and the use of them in Canada. I know them and have used some of them in America. There is no doubt that although America has these enormous areas, which, alas, we have not got, we must attempt to find a reasonable compromise so that the enjoyment that many people certainly get in America from that type of holiday can be made possible in this country to the limited extent that our much smaller areas provide. Therefore, although I have the utmost sympathy with the desire to protect the amenities of this area, and even more particularly the amenities of the area lying further into the mountains, I also recognise that if we are to carry out the duties that Parliament laid upon the Lake District Board, we must ensure that people have the opportunity of using caravans and camping sites. This seems to me to be one possible way of doing that.
    9.43 p.m.
    Mr. W. M. F. Vane: I apologise to you, Mr. Speaker, and to my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) who raised this question tonight, that I was unfortunately not present when he opened his debate; it began somewhat earlier than we expected.
    I was extremely glad to hear the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) make a plea for moderation. I have always felt that the greatest danger to which the National Parks were exposed are the fanatics. If we are to exist happily and to develop along the lines that Parliament hoped the National Parks would develop, the most important thing of all is to save ourselves from the fanatics—and there are a great many on both flanks.
    The people who live in such parts of England as have been designated National Parks have been extremely apprehensive of those vociferous elements in what, generally speaking, are called amenity societies. There was one village in the Lake District which, while the Bill was going through the House three years ago, started a society whose aim was to save themselves from the attentions of these people; and I think they had reasonable grounds for doing so, bearing in mind some of the extraordinary things that were said in the Committee upstairs.
    On the other side, there are people who look at any tourist areas as a suitable place where they can cash in. What I am sure this House wanted was to steer a middle course between those two extremes. There are far too many examples in this country of beautiful places which have been ruined because no one had second or third thought.
    I am not concerned here with any narrow constituency point of view but with the general principle. I feel that the National Parks administration should not be looked at as an extremist code, but as the normal planning code, plus some features appropriate to the character of their areas.
    If we go any further we are going to lose the good will of the people living there. We have to earn our living by one means or another. We cannot sit back just to be looked at by the tourist, and on the other hand we do not want

    1497
    to do anything other than what is our clear, obvious duty to the country at large. As I came into the Chamber tonight I thought I heard a tag end of a speech describing a particular case. I think that most out of place here. Any message going from this House ought to be a message of moderation. Our idea of the future planning of the National Parks should be a reconciliation of all interests and the maintenance of those principles which I know the hon. Gentleman the Member for Newcastle upon Tyne, East has very much at heart and which were laid down originally in the Dower Report. If we depart from them we lose everything.
    I hope we are not going to become worked up about one particular instance or another. There are planning boards with adequate powers. They represent the local people and the local authorities. They are people who have the district at heart and include members with specialist knowledge.
    I hope we will all encourage these planning boards to do their job and discourage them if we should ever find them aiming at extreme courses, whether of the left or of the right.
    9.48 p.m.
    Mr. Philip Noel-Baker: In a general way, like the hon. Member for Westmorland (Mr. Vane), I am for moderation, but when I think of the devastation which has been wrought on our countryside in the last 50 years since I first knew it, and recall that the landowners have not been without their share of the guilt, I am also for a little healthy fanaticism as well.
    I first walked the hills of Cumberland and swam in its lakes and rivers when I was an undergraduate at Cambridge many years ago. Except during the periods of the two world wars, I visited the Lake District regularly many times a year, and I could find my way over much of it in any weather and in the dark. I regard it as my spiritual home, and I feel very fanatical when people attack the amenities or beauties of that matchless country.
    I have supported the Friends of the Lake District in many matters. I have always fought with them against the project of a road across the Styhead Pass. When I was at the Ministry of Fuel and
    1498
    Power I resisted the suggestion of pylons in Borrowdale and beside Ullswater—
    Mr. Vane: Shame.
    Mr. Noel-Baker: There are other ways of supplying electricity—
    Mr. Vane: May I ask the right hon. Gentleman if he has electricity in his house?
    Mr. Noel-Baker: Yes, and I want everybody to have electricity in their houses. It can be had in Borrowdale without pylons at a little extra cost, which the general body of consumers ought to bear in order to preserve the amenities of the Lake District valleys. I would support that view against anybody, as indeed I did when I stood at that Box a few years ago.
    As a matter of general policy I am in agreement with the first two points put forward by the hon. Member for Morecambe and Lonsdale (Sir I. Fraser). I am not against notice being given to all. They ought to know about this kind of thing and they usually do. I am not against a public inquiry. If it were in order, I would say that I do not oppose an amendment of the law.
    On the fourth point, however, of asking the Parliamentary Secretary to revoke what has been done in the matter of this camping site—the permission to allow 75 caravans with a prospect of increase if it proves to be all right—I am strongly against the hon. Gentleman, and I hope that the Minister will do nothing of the kind. And as I know that the Parliamentary Secretary is himself a distinguished mountaineer, who is familiar with all these peaks and valleys, I am sure that he will give the right advice to his Minister after this debate.
    Now may I deal with some of the points raised by the hon. Member for Morecambe and Lonsdale? Deviating from his general line, he said in a courteous aside that he was sure the present developers of this site would be all right, but what about their successors? I hope the successors will not materialise for many years to come because we want the hon. Member for St. Marylebone (Sir W. Wakefield) to remain here. The hon. Member for Morecambe and Lonsdale suggested that his successors would bring all the fun of the fair and envisaged Butlin camps around Windermere.

    1499
    What about the Lake District Planning Board? Are they not going to be there? Will they not keep the successors of the hon. Gentleman in order? Of course they will. The hon. Member for Morecambe and Lonsdale said that since I live in London and do not possess a house near Windermere, I can stay at Morecambe and drive in a motor coach to enjoy the beauties of Windermere and the other lakes. Well, 18 months ago I lived at Morecambe, and the House will not misunderstand me when I say that for other reasons besides the weather, I do not want to go back.
    I do not like Morecambe and I detest motor coaches. But is the hon. Gentleman really arguing that I cannot stay in a National Park unless I have enough money to stay in an hotel? I do not like hotels, I much prefer the system of Canadian camps, and with the screening which the hon. Member for St. Marylebone will give to his caravans, and with the woods there, I do not believe they will be an eyesore. They will not be visible from the lake or from the road. They may be visible from the mountain peaks but so far off that they will look about as agreeable as the people sitting on the beach.
    This question must be judged in a reasonable spirit but also in the light of the intention of the Act which established the National Parks, and in the light of the principles which the Planning Board itself has laid down. At the cost of repeating one or two sentences used by the hon. Member, I shall quote from the Board's first Annual Report, which covers the period from 1951 to 1953.
    It refers to the difficulty of
    "The preserving and enhancing of the natural beauty of the areas…"
    and
    "…promoting their enjoyment by the public."
    On page 22 the Board points to the fact that
    "…much of Windermere's eastern shore has been so developed with private houses that it is now hardly possible to create a footpath along most of its length."
    And not all the private houses are quite of the kind that a man like me would desire them to be.
    1500
    In a paragraph dealing with camping and caravans the Board says:
    "Organised sites for tents and caravans are a different matter. Many folk desire the amenities, sanitary or other, which can be found in a well-conducted commercial site. Such sites must inevitably be located well down the dales where they can be sufficiently screened and command the necessary water supplies and proper drainage. Subject to this proviso, they are to be encouraged in that they add to the total accommodation available and enable more fresh visitors to come to the Lake District."
    Then the Board said, in a communication to the Lake District Estates Company—that is the hon. Member for St. Marylebone—that the Board considered that this site at Hill of Oaks and Blakeholme was
    "…conforming to their future policy by which organised caravan camping sites should be established roughly on the perimeter of the National Park. They feel that this site, by reason of its siting on the edge of Winder-mere, the configuration of the ground and the cover provided by the trees and other vegetation is ideally sited for caravan camping."
    I think that that makes a pretty strong prima facie case for the contention of the hon. Member for St. Marylebone.
    I should like to deal with one or two arguments which have been used in the local Press. I have read these letters.
    Sir Ian Orr-Ewing: Would the right hon. Gentleman explain what is meant by "fresh visitors"?
    Mr. Noel-Baker: People who have not hitherto been able to find accommodation but who will now be able to do so, thanks to the hon. Member for St. Marylebone and his camp.
    Sir I. Fraser: If one can provide a few more beds it is, of course, a good thing, but if one develops large numbers of a new kind of place round the lake shore one may perhaps please a few hundred more people, but one will change the character of the district for the thousands who want to see it as it is now. Have we not to balance those two things?
    Mr. Noel-Baker: Of course, and we change the character of the place by providing accommodation for a few hundred people by allowing private houses to be built along the shore. The camp which we are considering tonight will not be visible. It will not change

    1501
    the character of the place from the point of view of the general public who will be visiting there.
    I do not want to exaggerate it, but there has been made, by a half-implied innuendo, a rather mean suggestion about the hon. Member for St. Marylebone. It has been said that he wants to exploit this site at Hill of Oaks and Blakeholme for commercial profit. I differ with the hon. Member for St. Marylebone on many matters of public policy, and my hon. Friends and I would say that the words "profit and private enterprise" summarise much of the difference between the hon. Member and us.
    But I have known the hon. Member, as we all have, for many years. I have known his work on behalf of the National Playing Fields movement and in support of physical recreation of many kinds. I have served with him on many committees, including the Parliamentary Committee on Sports and Games, and I know that he has done devoted service and given a great part of his life to helping those who have not had a fair chance of enjoying the countryside and manly sports and games, to have a better chance than they have had in times gone by. I hope that that suggestion about the hon. Member for St. Marylebone to which I have referred will be entirely discounted and that evidence from this side of the House will help to end it.
    The suggestion has been made, and indeed it is made in the extract from the report of the Planning Board which I have quoted, that it has been difficult to secure a right of way, a walk for visitors along the shores of the lake. I believe that that is true of the eastern side and the southern end of the lake. Thanks to the hon. Member, I think it ought to be less true.
    I should like to urge on the Minister that he should see to it—
    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. Kaberry.]
    Mr. Noel-Baker: I urge the Parliamentary Secretary to see to it that the Board should acquire a zone of 50 yards from the shore of the lake so that there
    1502
    may be a right of way and a place for people to picnic by the lake, to swim, to land from boats, to fish and so on. I cannot believe that that would damnify the owners of private houses in any way which in the 20th century they are entitled to resent. I believe that the houses are all a quarter of a mile or more from the shore of the lake. They are largely screened by woods, shrubs, bushes.
    I know Buttermere very well. One can walk all round the lake of Buttermere and there is a private hotel called Hasness, which the Parliamentary Secretary knows. One can walk along the shore along the bottom of the land of Hasness. Does that do anyone harm? I have never heard the people of Hasness complain. I think it is something which visitors to Buttermere value very much indeed. But, to read some of the letters appearing in the local Press, one has the feeling that to some people Windermere is regarded as a private and not a National Park.
    This is a National Park dedicated by Parliament to the nation. While we are all agreed that nothing should be done to desecrate the lovely British beauty of this mountain scenery, we on our side of the House are resolved that nothing should be done to keep the people of the country out of this park, which is theirs.
    10.2 p.m.
    The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Ernest Marples): We have had a debate which has been more interesting and, perhaps, prolonged than is usual for an Adjournment debate because of the uncertainties which often arise in this House. One thing seems quite clear— that, whatever I say, some people are not going to be pleased. That is quite certain, because so many opinions have been expressed tonight.
    I should like to make one or two points in answer to the right hon. Member for Derby, South (Mr. Noel-Baker). He asked, if there is a camp by Buttermere, does it do any harm? It depends on how the camp is carried on. If it is carried on under proper conditions and those responsible are reasonable, it does no harm. If it is carried on in a disreputable way, it does harm. Broadly speaking, if conditions are reasonable, it does no harm.

    1503
    My hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) did not want this planning permission confirmed. My hon. Friend the Member for St. Marylebone (Sir W. Wakefield) wanted the permission confirmed. The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), who has been courteous enough to send me a note to say that he has to go to Newcastle—which is a considerable distance away—wanted the permission confirmed provided that reasonable precautions were taken. My hon. Friend the Member for Westmorland (Mr. Vane) wanted moderation and thought perhaps that on balance it would be a good thing. I can tell him that he will get moderation in certain things, but not when it comes to such things as the discussion we are having tonight, because people feel so passionately about this subject, possibly rightly. They feel passionately because of feelings which govern them in considering National Parks.
    I have spent a great deal of my life in the Lake District, and the right hon. Member who represents the Opposition tonight would, I think, agree that I know more personally about this area than any hon. Member who has taken part in the debate.
    Mr. Noel-Baker: But I have lived longer.
    Mr. Marples: The right hon. Member has lived longer, but perhaps not more intimately with the problem. Many of my younger days were spent there living under the very rocks of Gimmer. I hope that my hon. Friend the Member for Westmorland will climb on the Gimmer rocks with me. Then we will have to have a by-election where we shall have a safe majority. I know that I have slept out under these rocks year in and year out when I was—I will not say small and young, because I am still small, but not so young.
    The right hon. Member for Derby, South spoke passionately on this matter. For years he has advocated National Parks and devoted a great deal of his lifetime to that cause. When he said that he would stoutly resist the construction of a road over Styhead Pass, I was with him one hundred per cent. If he will resist it, so will I. If ever a road
    1504
    is suggested over that Pass, I will go into the Division Lobby against any Whips of any party, and I am sure the right hon. Gentleman will be with me.
    To some extent, this debate has been stolen from my hon. Friend the Member for Morecambe and Lonsdale, to whom hon. Members will be grateful for bringing up the matter. I am grateful to him for giving me notice of the points he intended to raise in a manner both exhaustive and lucid, which enabled me to grasp with ease what he had in mind.
    He said he hoped we should all cherish the beautiful places of England, and I agree that, of all the places in England—I do not mention Wales, though there are no Welsh hon. Members thronging the benches opposite—the Lake District is perhaps the most beautiful—and possibly the wettest.
    Mr. Vane: May I ask my hon. Friend if he is aware that over the last two or three weeks, when the greater part of England was suffering from the most intolerable weather, the Lake District has had the most perfect weather in Europe?
    Mr. Marples: That may be so, but of course the last two or three weeks do not justify the weather over the last 50 years.
    Mr. Noel-Baker: It may be changing?
    Mr. Marples: I hope it is, and if so it will be even more beautiful than for the last 50 years. But, in spite of the rain, it is the most beautiful spot and something which we ought to cherish.
    Mr. Noel-Baker: Is it not the fact that Seatoller has the highest rainfall in the country and that is why the Lake District is so beautiful?
    Mr. Vane: It is Seathwaite.
    Mr. Marples: It is Seathwaite, and it is the wettest part in England. What has been happening in the last two or three weeks does not detract from the fact that the Lake District is the wettest, though the most beautiful, part of England—at any rate we have reached agreement about that.
    My hon. Friend the Member for Morcambe and Lonsdale exhibited considerable skill in skating over the difficulty about mentioning legislation. He presented his case with great Parliamentary ability, and succeeded in representing the

    1505
    views of his constituents in a most able manner. Morecambe itself, to which he referred, is, in my opinion, a very nice place from certain aspects. It has great Parliamentary sagacity. One can scarcely see the sea there, but one can obtain some excellent shrimps.
    I feel bound to say that my hon. Friend rather overstated his case, which is an unusual thing for him to do. He made two points, the first on this particular case which we are discussing, and the second on the general principle. He argued that when a planning authority allowed an application, third parties who might be adversely affected if development took place could not object to the decision arrived at, or even have the matter ventilated. My hon. Friend asked that in such cases the planning permission should be revoked and a public inquiry held to hear representations from both sides. In general, he said that the planning board should give public notice that they had received such an application and, if there was strong opposition, that the Minister should order a public inquiry before the planning board determined the matter. I believe that summarises the case made by my hon. Friend. One ought to say what happened in this case, and so I will deal with the case first and the general issue afterwards.
    The Ministry first knew of this case from a letter from a firm of solicitors which explained that an application for planning permission to develop as a caravan site 80 acres of land on the eastern shore of Windermere was under submission to the Lake District Planning Board. It also stated that the land was leased to a client of the solicitors who owned other property nearby as well. The letter asked the Minister to call in the application under the Town and Country Planning Act, 1947, for the Solicitors represented the application as a serious threat to the most beautiful parts of the Lake District.
    I have two points to make on that. The first is that no such representation was received from any of the several organisations which normally protect the amenities of the Lake District from any attentions which they consider to be unwelcome. As far as my personal experience goes, if there is any district in the country which has friends who will stoutly resist any encroachment upon their
    1506
    area, it is the Lake District. I should place the Lake District first, Wales second, and the Peak District third or joint second. Certainly the first place would go to the Lake District. Yet none of the societies made representations to the Minister, which in itself showed that those concerned with the amenity interest—I do not use the term offensively—were quite happy that the project was reasonable.
    Secondly, six of the18 members of the Lake District Planning Board are appointed by the Minister after consultation with the National Park Commission, and they are persons resident in or near the Lake District who are familiar with its traditions and have a special interest in preserving its amenities.
    The hon. Member for Newcastle-upon-Tyne, East, a former Parliamentary Secretary and a far better one than I shall ever be, said that he thought that this power ought to be left in the hands of the local planning board. I feel great sympathy with his point of view. There is no point in a Minister setting up a planning board and then over-riding any decision which an individual hon. Member thinks is disagreeable. What should be done is to reconstitute the board rather than continue to reverse its decisions, because its members will then lose confidence in themselves. These two points are most powerful.
    I will now describe how the board dealt with the application. In all fairness, I must straight away say that the information which I have has been obtained from the planning board. I have no doubt that it will be accurate and not over-stated, but I have not had sufficient time to check whether or not both sides agree on the statements that I shall make. The application was considered by the board's development committee, who at an early stage consulted the appropriate committee of the rural district council.
    The first reS5CV0523P0I0761action of the rural district council was favourable, although later it changed its mind slightly. For its part, the committee was disposed at that stage to favour the proposals, subject to safeguards, which one can understand, and further discussion with the applicants followed. Certain criticisms were then ventilated, and so the committee invited to an informal meeting all who had expressed an interest in the matter.

    1507
    The meeting was held in November. The critics were given a short but reasonably comprehensive statement of the applicants' proposal and had an opportunity of putting forward their views. I am told thatat the meeting there were representatives of the rural district council and the parish council, the Friends of the Lake District, the Lancashire branch of the Council for the Preservation of Rural England and a number of private residents. I think most of the interested parties had some opportunity of taking their point of view, and, after all that, the committee decided not to take a final decision on the application, as it was one which the board themselves ought to take.
    Sir I. Fraser: Would it be true to say that they recommended against the proposal?
    Mr. Marples: No; the committee decided that they could not themselves grant this application, and that the decision should be made by the board itself. The responsibility for this decision rests upon the board and not upon any committee. The matter came before the board on 5th January, and was debated in public at great length, the Press being present throughout. The board decided to instruct the committee to grant the application, subject to a number of safeguards, and, in the "Westmorland Gazette" of 9th January, four days after the board met, this appeared in black type:
    "After one of the longest discussions since the inception of the Board two years ago, an application for the use of the site was granted with a number of conditions, including one which limits the number of caravans to 75."
    So that it seems to me that it was a long discussion, and that all interested parties were represented. I understand that a meeting will be held next week to discuss further details, and that the Rural District Council has been invited to send representatives. So far, no planning consent has been given, so that the question of revocation does not arise.
    Those are the facts, and I honestly think—and I think that on reflection my hon. Friend will agree․that, in view of the notice in the Press and of what I have said, every person who had any interest in this matter has had ample opportunity of representing his or her objections.
    Sir I. Fraser: Will my hon. Friend allow me again? He makes the point that the "Westmorland Gazette" says that a long discussion took place, but no evidence was given. This matter was discussed between two elements in the committee who were opposed, and it was only by a majority that the decision was reached. No evidence was given there.
    Mr. Marples: All I am saying is that it was a long discussion and that every person really interested had an opportunity of putting his point of view forward.
    We must remember when we are discussing local interests that we on this side of the House have always stood by local government, and have said that the people adversely affected have themselves voted for the county council or rural district council, and that by doing so they put their representatives on these authorities. The council then place their members on the committee which is to decide what shall happen, so that all the people who really object have already voted in the election of their particular representatives.
    Therefore, if they are dissatisfied with the way in which their representatives carry out their duties, they should use their opportunities to remove those representatives and replace them by someone else. They should not, when they have given a particular decision, want to find some other method of reversing it when they are dissatisfied. We have always stood by the policy of local government, and I suggest to my hon. Friend, who has been very tenacious and skilful in the presentation of his argument, that particular objectors, who have voted people on to the rural council, the county council and the planning committee, really have not much complaint afterwards if those representatives decide to vote in favour of a particular proposal.
    May I now come to the general question involved? My hon. Friend said that there should 'be notification to and a right of appeal by third parties. The 1947 Act gave developers a right of appeal if they are refused permission, or if they object or feel aggrieved by any conditions imposed by the planning authority. There is no provision for third parties to appeal against the granting of a permission to an applicant. My hon. Friend suggests that there should be such a right of appeal

    1509
    —perhaps that could be done without legislation, though maybe I am out of order in briefly referring to it. One will never, in any human society, get 100 per cent, of the people agreeing to any particular course of action. Even Hitler was Only able to get 98·7 per cent. of the people voting for him; Stalin did slightly better—he got 99 per cent., but never 100 per cent.
    If my hon. Friend really thinks that anyone in disagreement with a planning proposal should have the right of a public inquiry it would mean a public inquiry in every single, solitary case of planning, which would bring the whole procedure to a standstill. I tell my hon. Friend that last year, at the Ministry we had nearly 4,500 appeals lodged, and, therefore, it looks as if there are hundreds of thousands of planning decisions made throughout the country by local planning authorities. If we are to have a public inquiry in every case where anyone disagrees, the whole procedure would have to be thrown over. It could not be done.
    We have always said that we would rather the local people—the town hall—decide it than Whitehall, and I think the right hon. Member for Derby, South who represents the Opposition in this matter, would agree that it is better that the central Government should not step in every time there is disagreement about something which the man next door may want to do.
    Sir I. Fraser: Might the R.D.C. have the right to appeal?
    Mr. Marples: The R.D.C. has a great influence now. It is able to sway the county council, and if sufficiently well known, and stimulated by my hon. Friend, I have no doubt it would have an opportunity to make its views known.
    Sir I. Fraser: So the Parliamentary Secretary would let it have the right to appeal?
    Mr. Marples: No, I said that its views could be properly represented to the county council, which is the planning authority. Any individual can, through his local councillor, or direct, make representations to his local authority. The local authority is bound to consider those representations, for many reasons; first of all is that its members might not get
    1510
    elected next time if they took no notice, because they are democratically elected.
    My hon. Friend asked if public notice could be given when planning decisions were made. The 1947 Act requires local planning authorities to keep a register of applications for planning permission. This is available for public inspection, including inspection by the Press, so that the very notice he wants, is, in fact, already given, providing people will take the trouble to look at it. One cannot really circularise everybody and say, "Something is going to happen in your district." There is a register which they can look at, just as they can look at the register for births, marriages and divorce—which seems to be pretty fruitful judging from the Sunday Press. There is no reason why this register should not be popular also.
    The planning authorities in practice often invite the views of organisations and people, whom they think might be interested, before reaching a decision. In this case that is exactly what the board did. They asked everyone who they thought was interested in this case to give their views, to ventilate them fully before the board. The matter was ventilated fully in the Press. I have three columns here from the "Westmorland Gazette"—an excellent newspaper—with double column headlines. It is a most revealing report; it was discussed in the Press and elsewhere.
    I do not think that the Minister can interfere in this particular case. Certainly I do not think he could use the procedure of the Town and Country Planning Act for calling in an application. That is a very drastic step and any Minister must be frightfully careful before using such a severe measure. I think the message that this House should give to the country is what my hon. Friend the Member for Westmorland said—that we should be moderate in our approach to the National Parks and unanimous on three points.
    I feel deeply on this question, not only as a Parliamentary Secretary but as a person who has enjoyed in these National Parks a great deal of the best of my younger days, and I hope that in the late summer—I will not say the autumn—of my life I shall enjoy them a little more, perhaps with more decorum and less

    1511
    vigour than before, but none the less with a certain amount of enjoyment. I have spent many months of my life among the lakes of North Wales, and I owe them a great deal.
    There are three things which we must do—and I say this more as a human being than as a Parliamentary Secretary, who is never considered to be a human being; he is considered as perhaps the lowest form of political life. First, the district as a whole should retain the characteristics which have made it beautiful. Second, the inhabitants should have the amenities which are enjoyed by the rest of the country. That is most important. I have stayed in Borrowdale and I have heard the protests of the inhabitants because they are denied electricity. The inhabitants of that district should not be deprived of the inventions and improvements which modern society in the 20th century has brought about, merely because other people want that district to remain as it was in the 18th or 19th century.
    Third, people should be enabled to enjoy the beauties of our Island, and the National Parks in particular, by having suitable accommodation provided for them. I disagree with the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) in this respect. I do not think that we can compare this country with Canada or America. I have been to both those countries—the Rockies in Canada and the National Parks in America—and there is simply no comparison between conditions there and here. Here we have 50 million people crowded into a very small island, and Canada has 14 million people in an area I do not know how many times larger.
    As we are a smaller country we should be all the more careful to see that pro-
    1512
    vision for accommodation is given to the people nationally and that it is in accordance with the characteristics of the particular district. In the Lake District this can be done tastefully. The right hon. Member for Derby, South and I are members of the Climbers' Club. It is the only club of which we are both members. He is not in the Conservative Party, and I am not in Transport House, but we meet together as members of the Climbers' Club. In North Wales this club has a number of huts which merge and harmonise with the landscape. Development in regard to accommodation for visitors to the Lake District should follow that example.
    Mr. Blackburn: Did the hon. Member refer to the Crime Club?
    Mr. Marples: Nobody on this side of the House has anything to do with crime. That is confined to hon. Members opposite.
    I hope and pray that the planning boards will be given a chance to do their work. I think they are the right instrument. I appreciate the views of my hon. Friend the Member for Morecambe and Lonsdale, and I know that he feels deeply about the matter. He has deployed his case skilfully, moderately, and very tenaciously, but in this case I do not think that my right hon. Friend can intervene, nor can he, in general, alter the Act as it now stands. In any case, a discussion on that would be out of order. I hope that my remarks have met most of the points which have been raised in this debate.
    Adjourned accordingly at Twenty-nine Minutes past Ten o'Clock.

TRADE AND COMMERCE
  Light Industries, Radnor
  Light Industries, Radnor
  Welsh Tourist Board (Grant)
  Welsh Tourist Board (Grant)
  Performing Animals (Import Licences)
  Performing Animals (Import Licences)
NATIONAL FINANCE
  Purchase Tax (Government Policy)
  Purchase Tax (Government Policy)
  Bank Rate
  Bank Rate
  Horse and Dog Racing (Tax)
  Horse and Dog Racing (Tax)
AGRICULTURE
  Myxomatosis
  Myxomatosis
  Glasshouse Cultivation (Top Soil Supplies)
  Glasshouse Cultivation (Top Soil Supplies)
  Smallholdings
  Smallholdings
  Hill Sheep Subsidy
  Hill Sheep Subsidy
  Public Inquiries (Representation)
  Public Inquiries (Representation)
  Gin Traps
  Gin Traps
  Road Grants, Wales
  Road Grants, Wales
  Executive Committees and Advisory Service
  Executive Committees and Advisory Service
  Landrace Pigs
  Landrace Pigs
  Foot-and-Mouth Disease
  Foot-and-Mouth Disease
  Fowl Pest
  Fowl Pest
  Sugar-Beet Factory Facilities, Southern England
  Sugar-Beet Factory Facilities, Southern England
  Staple Foods
  Staple Foods
  Crops, Cornwall (Acreages)
  Crops, Cornwall (Acreages)
  Lakenheath Fen (Government Decision)
  Lakenheath Fen (Government Decision)
  CARLTON HOUSE TERRACE
  CARLTON HOUSE TERRACE
HOME DEPARTMENT
  Homosexuality
  Homosexuality
  German National (Landing Refusal)
  German National (Landing Refusal)
  Visitors (Temporary Detention)
  Visitors (Temporary Detention)
  Discharged Prisoners Aid (Government Decision)
  Discharged Prisoners Aid (Government Decision)
  Older Ex-Prisoners (Employment)
  Older Ex-Prisoners (Employment)
  Wife Beating, Co. Durham
  Wife Beating, Co. Durham
  Poisons List (Calomel)
  Poisons List (Calomel)
POLICE
  Convictions
  Convictions
  Widows (Pensions)
  Widows (Pensions)
  Juvenile Liaison Officers
  Juvenile Liaison Officers
FIRE SERVICE
  Boroughs and Urban Districts (Whole-time Firemen)
  Boroughs and Urban Districts (Whole-time Firemen)
  Malicious Calls
  Malicious Calls
  Celluloid Toys (Fire Factor)
  Celluloid Toys (Fire Factor)
  NATIONAL SERVICE (AGRICULTURAL WORKERS, LANARK)
  NATIONAL SERVICE (AGRICULTURAL WORKERS, LANARK)
EMPLOYMENT
  Painters, Edinburgh
  Painters, Edinburgh
  Weekly Wage-Rates and Earnings (Increase)
  Weekly Wage-Rates and Earnings (Increase)
MINISTRY OF HEALTH
  Dartford Hospitals (Powdered Milk)
  Dartford Hospitals (Powdered Milk)
  Mental Institutions (Patients)
  Mental Institutions (Patients)
  Corsham Hospital, Bristol (Mortuary)
  Corsham Hospital, Bristol (Mortuary)
  Mental Hospital, Stapleton (Accommodation)
  Mental Hospital, Stapleton (Accommodation)
  Hospital Patients (Costs)
  Hospital Patients (Costs)
  Water Supplies (Flooridation)
  Water Supplies (Flooridation)
  Haemophilia
  Haemophilia
  Graig Hospital, Pontypridd
  Graig Hospital, Pontypridd
  Convalescent Homes (Old People)
  Convalescent Homes (Old People)
  Old-Age Pensioners (Chiropody)
  Old-Age Pensioners (Chiropody)
  Ineducable Children
  Ineducable Children
  Joint Pricing Committee Staff (Equal Pay)
  Joint Pricing Committee Staff (Equal Pay)
EDUCATION
  School Classes (Size)
  School Classes (Size)
  Secondary Education, Staffordshire (Statistics)
  Secondary Education, Staffordshire (Statistics)
  Independent Schools (Colour Bar)
  Independent Schools (Colour Bar)
  Schools Television Service (L.E.A. Co-operation)
  Schools Television Service (L.E.A. Co-operation)
  School Buildings (Heating)
  School Buildings (Heating)
  New School Places
  New School Places
  Teachers' Superannuation Fund (Contribution Increase)
  Teachers' Superannuation Fund (Contribution Increase)
  MONOPOLIES COMMISSION REPORTS (ELECTRIC LAMPS AND CABLES)
  MONOPOLIES COMMISSION REPORTS (ELECTRIC LAMPS AND CABLES)
LOCAL GOVERNMENT
  Sewerage and Water Schemes, South Wales
  Sewerage and Water Schemes, South Wales
  New Towns (Tenants' Complaints)
  New Towns (Tenants' Complaints)
  EGGS (PRICES)
  EGGS (PRICES)
  SHEEP STEALING, SCOTLAND
  SHEEP STEALING, SCOTLAND
  CONVENTION ON HUMAN RIGHTS (PROTOCOL)
  CONVENTION ON HUMAN RIGHTS (PROTOCOL)
  DISABILITY PENSION (PERSONAL CASE)
  DISABILITY PENSION (PERSONAL CASE)

Preamble
The House met at four of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

CONSTITUTIONAL CHANGES IN NORTHERN RHODESIA
4.5 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER): My Lords, my right honourable friend the Secretary of State for the Colonies has made a statement in another place to-day about his visit to Northern Rhodesia, and I am anxious to make a similar statement in this House. My right honourable friend made it clear before leaving this country that the constitutional changes in Northern Rhodesia which were effected at the end of the year must stand. During his visit to Lusaka he met the Elected Members of the Legislative Council and the four Members representing African interests. Discussions concerned the changes to be made at the end of the term of the next Legislative Council which will be elected this month. Assuming that this Council runs its full course, no decision affecting elections "can become effective for five years "but study of the complicated problems involved will begin at once. My right honourable friend hopes that the Governor will be able, at the right time, to submit to Her Majesty's Government agreed recommendations on the next constitutional advances.
My right honourable friend also met the African Representative Council and certain Paramount Chiefs, and Chiefs with whom he had full discussions on a number of matters, including African land rights and the franchise. My right honourable friend flew up to the Copper Belt, and had informal discussions with the European and African mineworkers' leaders and with the general managers of the mining companies. Renewed efforts are being made at a solution of the vexed problem of African advancement in the industry. He has some hopes that an answer will be found, and was
836
glad to notice that, since he left, a committee representing the unions, both African and European, and the companies has been formed and is holding its first meeting. He also met Sir Godfrey Huggins and the Governor of Nyasaland, Sir Geoffrey Colby, who were good enough to come to Lusaka to meet him. They had encouraging news to give on the way Africans are co-operating in the Federation. The words of the right honourable gentleman the Leader of the Opposition in another place and of the noble and learned Earl, Lord Jowitt, on July 14 last in this House on this subject have no doubt contributed.
There is one further point upon which I should inform the House, though it does not necessarily arise directly out of my right honourable friend's visit. The House will recall that he undertook in September to consider with the Governor, when the time came, whether a fifth African Member should be appointed to the Legislative Council as one of the two nominated Unofficial Members. Since his return, he has received the Governor's considered views on this and has decided that the time for this move is not ripe.
An explanation is necessary. In addition to the four African Members of the Legislative Council there will be two Members nominated to represent African interests. Of these two, one must sit in Executive Council and, in accordance with the September decisions, hold a portfolio. My right honourable friend is satisfied that no African is as yet capable of filling this onerous post, and that it must for the present be held by a European. Mr. Moffatt, who has represented African interests for so long on the Executive Council and Legislative Council, cannot, for family reasons, continue to serve on the Executive Council, but he is willing to continue on the Legislative Council. This means that the first nominated member of the Legislative Council—that is, the one who is to hold the portfolio in the Executive Council—must be a European other than Mr. Moffatt. This leaves one nominated place in the Legislative Council to be filled. The Governor and my right honourable friend have had to decide whether African interests are best served by appointing an African to this place or retaining the services of Mr. Moffatt. They have come to the conclusion that

837
these interests will be best served for the present, and the four African Members most helped, by retaining the services of Mr. Moffatt, in whom the Africans repose high confidence and who is held in great esteem by all sections of opinion in Northern Rhodesia and in this country.
4.11 p.m.
VISCOUNT ALEXANDER OF HILL SBOROUGH: My Lords, I am obliged that the statement made in another place by the Colonial Secretary has been male to your Lordships this afternoon. I regret to say that it was put into my hands only two or three minutes ago, and I have had no opportunity to study it or to confer with my leading colleagues upon the matter. Therefore, I should wish to reserve what we may have to say about the important decisions which the Colonial Secretary has reached. On examination, they may prove to be right decisions, but it may be that it will prove necessary for us to have a debate on them. I welcome the statement by the noble Earl that my noble and learned leader, Lord Jowitt, who is at present away in Africa, and. the Leader of the Opposition in another place, have been helpful in the matter. But this is of such vast importance that I should have liked longer notice than has been given to me, despite the fact that I have been in the House of Lords the whole of the day. I would only repeat now that I am obliged that the statement has been made; we will consider it and see what action, if any, need be taken.
THE EARL OF MUNSTER: My Lords, I would only add this. I would not guarantee that I told the noble Viscount who leads the Opposition, but I certainly mentioned to one of the Whips on the other side of the House yesterday the fact that I was proposing to make a statement to-day on the subject of my right honourable friend's recent visit to Northern Rhodesia.
VISCOUNT STANSGATE: My Lords may I, as an unofficial Member of the House, ask what is being done about people who come here day after day, intending to try to discharge their Parliamentary duties, and who then find that at half a minute's notice a statement is made which bristles with controversial issues? There is the question of the mine
838
dispute, the question of African representation, and others. These things are hurled at us, interlarded with self-congratulatory remarks about the success of the policy, and no opportunity whatever is given to anybody to know what is going to be said so that a question may be asked. There will be no opportunity of discussing it for some time to come. I would ask the noble Earl, whose courtesy one acknowledges gratefully, whether it is not possible to improve the machinery of this House in this respect, so that Members of the House who wish to know what is going on and try to exercise their proper duties, may know a little more timeously. The noble Earl said that he told somebody yesterday. Why is it not possible the night before, or at some time, for an ordinary Member to be told, "There is going to be a statement "? The Member need not even know the subject, but he can be prepared to examine it. If I may say so respectfully, I consider this to be a very important point, if this House is really to function usefully.
THE EARL OF MUNSTER: I have never denied that it is an important point, and the whole purpose of making a statement in this House is to repeat what was made in another place. It is not always possible to give the noble Viscount twenty-four hours' notice. I have done it only out of civility to the Opposition. If the noble Viscount does not wish for any statement to be made in future unless he gets prior notice, that is a different question.
LORD SALTOUN: May I say that in the whole of my experience—which is not very long, only thirteen or fourteen years —I have never known a debate take place on a statement. It is always received with reserve by the Opposition and taken for study later, in order not to delay the House by a debate of this kind when we want to get on with other business.
VISCOUNT ALEXANDER OF HILLSBOROUGH: That is not quite the point. I have already thanked the noble Earl for making the statement made by his right honourable friend. In this House we are always glad to have those statements made. But it is a question of having moved rather from the general practice of the Leader of the House to

839
give to the leading members of the Opposition as long notice as possible of the detailed statement to be made. So far as I am concerned, my Chief Whip has had no previous notification whatsoever of the matter. As I say, I have been in the House the whole of the day, yet I get the statement at five minutes past four.
VISCOUNT STANSGATE: I should think it an inadequate description of the functions of this House, as given by the noble Earl, to repeat what is said in another place. I understood that this was a separate House, which discussed things and conducted business in its own way. Inasmuch as this was known last night, quite apart from Official Members, Whips and so on, why was it not possible for the noble Earl to come to this House and say, "To-morrow we are going to have a statement surveying the visit of the Colonial Secretary to Africa," so that Members who wished to ask questions (we cannot debate a statement, because that would be contrary to Standing Orders) could come prepared, and so make this House a useful House?
THE EARL OF MUNSTER: As I repeat, I was only making a statement which was made in another place to-day. So far as I am aware, it is quite contrary to all practice in this House to give notification the previous night that a statement will possibly be made on a certain subject the following day. I have followed precedent. I have done exactly the same as was done under the previous Government, when it was originally decided that it would be wise for this House to receive statements similar to those which are made in another place. Therefore I am somewhat surprised that the noble Viscount, Lord Stansgate, should come along and say that we should not have a statement made in this House similar to that which is made in another place.
VISCOUNT STANSGATE: The noble Earl is quite mistaken and has misinterpreted—I hope unintentionally—what I have said. I never said that statements should not be made in both Houses. What I said was that when the Government knew they were going to make a statement in this House, they should inform the House. I am not interested in Party machinery at all; I am interested
840
in Members of the House. If the noble Earl knew yesterday that he was going to make this statement to-day, then I contend respectfully that it was his duty to the House to give that information, so that Members might come prepared to listen to his statement and to make any comment, or ask any question that they wished.
THE EARL OF MUNSTER: If the noble Viscount had listened to my first observation in reply to a supplementary, he would know that that is what I did.

CHARITABLE TRUSTS (VALIDATION) BILL [H.L.]
4.20 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The LORD MERTHYR in the Chair]
Clauses 1 and 2 agreed to.
Clause 3:
Savings for adverse claims, etc.
(2) No proceedings shall be begun by any person to enforce his right to any property by virtue of the foregoing subsection after the expiration of one year beginning with the date of the passing of this Act or the date when the right first accrues to him or to some person through whom he claims, whichever is the later, unless the right (before or after its accrual) either—

(a) has been concealed by the fraud of some person administering the imperfect trust provision or his agent; or

(b) has been acknowledged by some such person or his agent by means of a written acknowledgment given to the person having the right or his agent and signed by the person making it, or by means of a payment or transfer of property in respect of the right;

and if the period prescribed by this subsection for any person to bring proceedings to recover any property expires without his having recovered the property or begun proceedings to do so, his title to the property shall be extinguished.
This subsection shall not be taken as extending the time for bringing any proceedings beyond the period of limitation prescribed by any other enactment.
(3) For the purposes of the foregoing subsections, a right by reason of the invalidity of a disposition to property comprised in, or

841
representing that comprised in, the disposition shall not be deemed to accrue to anyone so long as he is under a disability or has a future interest only, or so long as the disposition is subject to another disposition made by the same person, and the whole of the property or the income arising from it is held or applied for the purposes of that other disposition.
LORD NATHAN LORD NATHAN moved, in subsection (2), to omit all words from "Act" down to the end of paragraph (b). The noble Lord said: I know that the noble and learned Lord, the Lord Chancellor, arranged for the postponement of the Committee stage from Tuesday until today in view of the fact that I, who am interested in this Bill, was abroad. I am grateful to him for that. It was for the same reason that the Amendments standing in my name on the Order Paper could not be put down until yesterday, and I trust that that: fact has not been an inconvenience to any of your Lordships. The matters dealt with by these six Amendments are really the same point or, rather, the same point, looked at from somewhat different angles. The Bill, the Second Reading of which took place on January 19, has as its object the removal, for the benefit of trustees and beneficiaries of charitable trusts, of uncertainty as regards trusts which combine both a charitable and a non-charitable purpose and which in the ordinary course of law therefore might be held to be invalid.
The Bill seemed to me, except in one particular, to answer admirably the purpose at which it was directed. The exception was this. Whereas the Bill provided that in general the period of uncertainty should be limited to a year from the date of the commencement of the Bill, during which legal proceedings might be taken, an exception was made for the benefit of those under disability, such as infants, who were permitted a longer period—in the case of infants until they were twenty-one; as regards others under disability until the disability ceased; and as regards persons in whom rights had not actually accrued, until their rights had accrued. That meant that: whereas the general period of one year would apply, in particular instances a much longer period might elapse. It is quite possible—I could give many instances of this but I will not weary your Lordships with them unless the noble and
842
learned Lord, the Lord Chancellor, so desires—that a period of fifty or sixty years in certain circumstances might pass daring which uncertainty might persist.
The purpose of these six Amendments—which are only one Amendment divided into a number of Amendments so as to effect the object I have in mind—is to limit the period of uncertainty for all purposes so that all persons, whether under disability or not, should alike be limited to a period of one year within which to make any claims they have by reason of the fact that the trust appears to be invalid.. In other words, they must begin proceedings, or must give express notice of their intention to begin proceedings, within one year of the commencement of the Bill. The Bill as drafted provides, as I have said, for what is in effect an extension of time in the case of those under disability; but there have been instances in legislation in the past—legislation of rather a different character, it is true—where no such extension of time has been given to infants and others under disability. I quote the Fatal Accidents Act, to which I referred on the Second Reading of this Bill, where the period is six months after the death, during which a claim has to be made, without any reservation in favour of infants or others under disability. There is the Copyright Act, in a different kind of field, where the period is three years. But the Act which appears to me to have the greatest analogy to the present Bill is the Inheritance (Family Provisions) Act, 1938, under which it is provided that claims must be made within six months of the grant of letters of administration of the estate of a deceased person. Parliament deliberately on that occasion, or at any rate in fact, made no provision in favour of infants or others under disability. When the period thereby allowed—six months from administration—had elapsed, claims were barred.
The effect of the Amendments upon the Order Paper would be that infants and others under disability in the case of these imperfect trust instruments would in principle be the same as under the Inheritance (Family Provisions) Act, and that there would be a limitation to one year, not only in the general cases but as regards those under disability. The

843
great advantage of that would be that trustees and beneficiaries of imperfect charitable trusts would, at the end of the year, know where they stood. It is the main object of this Bill to ensure that that purpose should be fulfilled. There is this gap at present in the fulfilment of that purpose. I hope the noble and learned Lord may find it possible to accept these Amendments, which will, as I think, fit in with the general scheme of the Bill and fulfil the object which all concerned have in mind. I beg to move.
Amendment moved—
Page 3, line 1, leave out from ("Act ") to end of line 11.—(Lord Nathan.)
LORD SALTOUN: I hope Her Majesty's Government will not accept this Amendment, for two reasons. The first is that, if I understand the Bill aright, it refers to imperfect trusts that may be formed in the future as well as those that have been formed in the past—
LORD NATHAN: No.
LORD SALTOUN: Very well. My second reason still stands. If the noble Lords carries his Amendment, he puts the representatives of minors in the position that they have to act within a year or not act at all, but it leaves the minor, when he attains his majority, the right of action against his trustees in case they have acted wrongly in refraining from pursuing their right under this Bill. That would put the trustees in the position of being practically forced to take action which otherwise they might avoid.
4.27 p.m.
THE LORD CHANCELLOR (LORD SIMONDS): I am sorry to say that I cannot on behalf of Her Majesty's Government accept this Amendment. I do not think the noble Lord thought that I would. I venture to think that he has approached the matter from a somewhat wrong angle. This is a Bill which is intended to confer great benefits upon charities, and this is the benefit substantially which it confers. It does not deal with cases in which there is any dispute, but, on the contrary, it confirms an invalid disposition: that is to say, one giving to a charity or charitable institution property which in law it is not
844
entitled to hold. We may or may not like the law, but that is the position. The Bill is aimed to rectify what is regarded as a grievance, but to rectify it by conferring a title on charities which at present they do not have. It is thought —rightly, I think—that that benefit ought not to be conferred without some qualification: that is to say, that those who were in a position to challenge the validity of the disposition under which the charity purports to hold, and reclaim property which is in law theirs, should not be debarred from making their challenge and recovering their property as long as their demands were not stale.
Accordingly the Bill saves the rights of those to whom the rights accrued less than six years from the relevant date—December, 1952—and provides, further, that in any case the claim must be made within one year after the coming into force of the Act. Then the question arose which divides the noble Lord from myself: what is the position of persons under disability? We can confine it, I think, for the purposes of this argument, to the case of an infant. The position of an infant has always been safeguarded in law, in regard to the right to recover property, with a single exception with which I will deal and to which the noble Lord referred. Always his rights are preserved until he has attained his majority and can assert them. That is what, in effect, we do here, because we say that, in the case of an infant, he shall be able to assert his rights within one year of being able to assert them —that is to say, attaining the age of twenty-one years. I venture to think that, in legislation of this kind, which is, in a sense, of a retrospective character and which confers upon institutions property to which they are not in law entitled, that is the least we can do for an individual whose rights are being taken away from him.
Secondly, I would say this to the noble Lord. I venture to think that, if he had his way, it would be much worse for the charity than if he did not—and for this reason. I conceive a probable case to be that, when an infant comes of age, and is in a position to assert his claim, he will appreciate, as those who are now adults appreciate, that he might be defeating the intention of the testator or settlor by asserting his rights, and will refrain from asserting them. That is a common case,

845
no doubt, to-day. If you put it upon the infant, within one year of the date when the Bill comes into force and becomes an Act, to assert his rights, that means that the rights must be asserted, if by anybody, by his guardian: and most assuredly his guardian will not take upon himself the responsibility of saying: "I will not recover for the infant the property which is lawfully his." Accordingly, I should imagine that in every case where the infant was the person entitled, the guardian would take steps to recover the property. There is, of course, the other case, where there is no guardian—at any rate, no natural guardian, a parent, father or mother—and where a guardian might have to be appointed by the court. Are we to go through that sort of process in order to find somebody who can claim on behalf of the infant? I suggest not. It would be doing a grave injustice in that case, as I think, to the infant himself. In those circumstances, I venture to hope that, in the interests of the charities which he so ably represents, the noble Lord, Lord Nathan, will think fit to withdraw this Amendment, or at any rate, will not press it.
With regard to the Acts to which he has referred, he has very fairly staled that they are in a rather different context. For instance, in regard to the Inheritance Act, which deals with a very different situation, you have somebody who is making a claim on something which is not, in law, his. He seeks to set aside the will, which is a valid will, of the testator, in order that, under the provisions of the Inheritance Act, he may recover certain relief. Surely it is right that, if he seeks to set aside the provisions of a will, he should do so within a limited time. The Fatal Accidents Act stands on a footing of its own because it is clear that the facts must be investigated within a short time of the fatal accident. Otherwise, of course, the evidence would not be available and the circumstances would have changed. The Copyright Act provided for three years. I am bound to say that I do not quite know why that was so, but it clearly stands in a context of its own. For these, amongst other, reasons—I will not detain your Lordships any longer—I cannot assent to the first Amendment which the noble Lord proposes. I think the noble Lord will agree with me that, in dealing with the first, we cover them all,
846
because the others are, in effect, consequential. I am sorry that I cannot accept them.
LORD NATHAN: I have listened with great respect to what has been said by the noble and learned Lord the Lord Chancellor and by the noble Lord, Lord Saltoun. I hope they will agree that, although I put forward a case with which they do not agree, nevertheless I put it forward reasonably. I regard the answers that I have received, and the comments to which I have listened, as convincing. In those circumstances, I beg leave to withdraw this Amendment; and with that Amendment the others fall.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: This is an Amendment which is intended to fill a gap in subsection (5) of Clause 3. The Bill preserves, in certain cases, the right of the beneficiary to sue the trustees who have been administering the trust if they have been doing so in disparagement of his rights after having had notice of that.
As the clause is drawn, it provides that the preceding clauses shall not prejudice the beneficiary's right, by virtue of his interests in the property, to damages in respect of any dealing with the property. The relief which the claimant in such a case might have might be by way of damage, or it might be by invoking the equitable jurisdiction of the court and asking for the administration of the trust and account; or it might be for other relief, such as an injunction. Accordingly, all that we propose is that after the word "damages" we should insert the words "or other relief." So the clause will now read
"…damages or other relief in respect of any dealing with the property.…"
I think that the noble Lord, who has interested himself in this case, will agree that this is a necessary addition. I beg to move.
Amendment moved—
Page 3, line 40, after ("damages") insert (" or other relief").—(The Lord Chancellor.)
LORD NATHAN: All I will say is that I accept the views of the Lord Chancellor that this seems to be a most desirable Amendment.
On Question, Amendment agreed to.
Clause 3, as amended, agreed to.
Remaining clauses agreed to.
House resumed.

SECURITY OF THE MAILS
4.38 p.m.
THE EARL OF LUCAN THE EARL OF LUCAN rose to ask Her Majesty's Government whether they are satisfied that the arrangements for safeguarding mails are adequate; and to move for Papers. The noble Earl said: My Lords, I ask your Lordships to turn your attention to a subject which is extremely topical. No one would deny that there is a considerable degree of public anxiety on this subject of the security of the mails. We look forward to a statement from the noble Earl, the Postmaster General, which, we hope, will reassure us. We hope it will be something more than what has been called those "round and soothing phrases" that have fallen from him recently. While we have no wish on this side to make any Party capital out of this question, we reserve the right to consider the Government's reply and to make such criticisms as we think necessary of the way in which they are discharging their responsibilities.
There have always been mail thefts—there is no doubt about that—and it is as well to keep a sense of proportion in this matter. That is difficult, in these days, when the headlines strike our eyes evening after evening. It would reveal a lack of a sense of proportion to become alarmed over the figure of losses of mailbags which the Government have given—723 bags lost last year out of 350 million carried—more especially as that figure of 723 represents a considerable drop on the figures prevailing in the first year or two after the war. The ordinary hazards of carrying property about the country must, of necessity, mean certain losses, and nobody is going to get worried about the odd mailbag that is snatched off a station platform, the odd bags that are rifled in the course of a rail journey, or the odd van that is driven off when it is left unattended for a moment. To guard against that, to achieve anything like 100 per cent. security of the mail, would, I am sure, mean an altogether excessive cost in money, in manpower and in effort. I think it must be accepted that a certain proportion of losses will always occur. After all, they do in every walk of life; that is one reason for the existence of insurance companies. So let us not get worried about that.
What is alarming, however, is that of recent years there has been an apparent increase in the number of planned raids which have, to a large degree, been successful from the criminals' point of view, and clearly have been aimed at consignments of mail of high value. It is clear, also, that these raids have been carried out by criminals who have access to accurate information which can only come from the inside. I say "an apparent increase," because that is a point on which, so far, the Government have not given any satisfactory figures. The overall figure of loss of 723 bags is really irrelevant to the present situation. We are entitled to know more about the nature of the different losses, to have an analysis of the different types of loss—which are the bigger robberies with the valuable hauls; which robberies have taken place when the mails were in Post Office charge, in Post Office vehicles in charge of Post Office personnel; and which robberies have occurred when the mails were in the charge of the railways. Moreover, one would like to know which are the robberies obviously carried out by a gang and planned and organised; which are thefts on the spur of the moment, and which have been accompanied by violence.
All that is information which I think the Post Office should already have given—and may I say, in parenthesis, that public relations at the Post Office do not seem lately to have been functioning as well as they should. Everybody knows that confidential information should not be given to the public; but there is plenty of information which is perfectly well known to the criminals and could well be published, with, to my mind, a great gain in public confidence in the Post Office and in the measures taken by the Government to combat these crimes. Until we know these figures, showing the relation of minor to major crimes, we cannot tell whether we are faced simply with a slight intensification of a perfectly normal situation, the old problem of thefts, high-lighted by one or two spectacular robberies like the one of May 21, 1952, and marked at the present moment by a perfectly fortuitous occurrence of a number of bold robberies; or whether we are facing a new situation, some association of criminals who have what amounts to a

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general staff, an intelligence service which collects information about the mails, the means of rapid communication of that intelligence, and the planning and organising ability to carry out these raids. If it is clear, from the information that the Post Office can give, that there is some new situation of that sort, then I think the measures that the Government take have to be judged accordingly.
Glancing through newspaper tiles of recent years one finds an alarming catalogue of robberies. Only last Friday there was the hold-up of a van on a lonely country road near East Grinstead. Fortunately, on that occasion the criminals' intelligence was at fault and there was nothing of high value in the van; but it was a hold-up by a gang which used violence to the driver. A few days before that a bag was stolen in Regent Street; that is the subject of criminal proceedings going on now. In January of this year a Post Office van was driven away from outside a post office in Walthamstow. It was one of a line of vans and only somebody with some knowledge of post office routine and methods would have known that that was the particular van containing large sums of remittances going out to a local post office. In that case the criminals got away with £4,700. In November last year there was a robbery from a London to Brighton train, to the amount of £9,700. In September, 1952, there was a robbery on a Doncaster to Barnsley train when one bag was taken, and it happened to be the bag containing £14,000. In May, 1952, there was another case on the London to Brighton line, when a van was broken into and £10,500 was taken. On May 21 of that year, there was the famous might hold-up near Oxford Circus, when the haul was £236,000.
In March of the same year, 1952, a van was held up outside a post office in Tottenham and £6,000 was taken. That was the only case of which I can find record in which a member of the gang—eight were concerned in the hold-up—was subsequently caught and convicted. We hope that perhaps the Postmaster General will be able to give us news of some others. In January, 1952, on the Salisbury to Eastleigh line, a bag was taken from a train and the haul was £5,000. In the twelve months before that, at least four eases of Post Office
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vans being stolen and driven away were recorded. Apparently, in those cases there were no losses of valuables from the vans. In March, 1950, there was a theft from a train on the London to Manchester run of £14,000 worth of jewellery. I should like your Lordships to note that crime especially, because it affords a remarkable instance of the possession of inside information by the thieves. The criminals chose one bag out of 400 on the train. They cut open the bag, and they chose one packet. They cut that, packet open, and it was the one that had the £14,000 worth of jewellery in it. The furthest back that I wish to go is April, 1949, when there was another robbery on a train, to the tune on that occasion of £40,000. Those facts—I trust they are accurate—I have taken from newspaper cuttings. I hope that the Post Office authorities will confirm them. They show that recently there have been a number of big robberies.
The feature common to all these robberies is the very accurate information that the criminals possessed about the movement of the high-value packages among registered mail. Another feature—which of course has nothing to do with the Post Office—is the very high degree of success which the thieves have had in disposing of the money and the valuables. We have heard very little about the recovery of notes and so on, that have been taken. I hope your Lordships will agree that it is useless to give a total figure of all bags lost, extending over all cases, because that does not throw any light on the immediate problem. And the immediate problem, as I said, arises from the fact that a gang, or gangs—and we do not know what evidence there is to show which is the case—with a high degree of organisation, discipline and intelligence are operating. And what are the Government doing to fight that?
It surely is imperative that machinery should be set up to organise resistance to this campaign of crime. It is not a simple problem, for a number of different authorities are concerned. The Post Office has its own investigation branch. But when mails are carried by the railways, responsibility for guarding them rests with the railway police. Outside of railway property and Post Office vehicles, responsibility for prevention and detection of crime rests on the police,

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as also does responsibility for the pursuit of the criminals and the recovery of the stolen property. But the police are not one body under one command. The police consist of a large number of autonomous forces all over the country. Take the case of a consignment which may be missing in transit between London and Glasgow. The Post Office and the railway police come into it, and there are also the Metropolitan Police, the Glasgow police and all the intervening police forces, all of which have to be co-ordinated. I hope that the Government will be able to tell us that they have set up some co-ordinating body, or some system for allocating responsibility and for co-ordinating the activities of all these different organisations.
EARL WINTERTON: May I ask the noble Earl a question? Would he extend his argument a little? Does he suggest that this co-ordination—which must be a tremendous undertaking, having regard to the number of autonomous police forces involved—should be confined merely to thefts of mailbags? Or would the noble Earl suggest that it should be extended to deal with crime as a whole?
THE EARL OF LUCAN: We are dealing at the moment with mails. Presumably the Government also have in mind the problem of mails, and have made their arrangements accordingly.
Another point I would raise with regard to the fight against these crimes is this. May we have an assurance that there is no departmental jealousy holding up, or causing friction in, the efforts to fight this campaign of crime? There is no place in this sort of situation for any jealousies or ill-feeling, or for working in water-tight compartments. I am sure that each of the authorities concerned is highly efficient in its own sphere. I am a believer in specialisation. I believe that the Post Office investigation branch are experts in their own line. Those attached to it have spent all their careers in the one task of preventing and detecting crime in the postal service. I do not believe that we could find anyone better qualified to combat these crimes.
But outside the official world there are other people concerned with those robberies—I refer to the insurance com-
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panics. I wonder whether we can hear to what extent they have been brought into consultation with the Government. We have been told that the Post Office liability on lost packages is limited to £5 each, no matter what the value of the package, so that all the rest of the loss must be borne by the insurance companies. I wonder what their views are and whether they are satisfied with the methods being adopted to deal with the situation. I wonder, too, whether their investigation staffs are being called into consultation by the official world. I believe that some years ago there was very successful co-operation with the insurance companies in dealing with a wave of arson.
One matter which has, I am sure, been disturbing the personnel of the Post Office is that a great deal of the information which gets into the possession of the criminals must come from inside. Is there a Fifth Column in the postal service? One need not jump to conclusions, because there are many thousands of men who have worked for short or long periods, or on temporary duty, or as what they call "Christmas casuals," who have gained some knowledge of the inside working of the Post Office. Their information could be very valuable to a gang of crooks. Nevertheless, it must be faced that there may be people in the Post Office service with undesirable associations. I am sure that those who are most anxious to root out such people from the Post Office service are the men and women in the Post Office. I wonder whether the noble Earl can assure us that he has appealed to the personnel of the Post Office for their co-operation and assistance. I am sure that that appeal would not go unheard.
Another precautionary measure is the checking of the credentials and characters of prospective entrants into the Post Office. We have been assured that that is being done and that methods of recruitment are being tightened up. Nobody will quarrel with investigations with the object of disclosing any criminal past, but I should like to give a warning. Once we start investigating people's pasts, it can only too easily degenerate into a Gestapo, into an investigation into their morals and politics. In this country we do not like inquisitions of any sort and I hope the Government will bear in mind

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that these investigations must be kept strictly to the criminal past, if any, of applicants for the service. The best assurance against leakage from the service is that conditions shall be such as will attract the best men and women into the service and keep them there for long periods, and attract their families, in the way which I believe was general before the war.
Finally, a word about physical means of protection for mails and those in charge of them. Men who are given charge of valuable property are entitled to ask for the best possible protection. That applies not only to Post Office employees, but also to railway employees. Of course, I do not ask the noble Earl to give any particulars of what measures have been devised to make the criminal's task harder, but we should like to know whether the noble Earl is satisfied that the progress of fitting any devices thought necessary is sufficiently rapid. We should like to know, too, if that progress is not being speeded up, what is stopping it? Is there any financial red tape, anything to do with Annual Estimates or anything of that kind, which is holding it up, or is provision going ahead as rapidly as possible? There is no doubt that this is a serious situation; how serious we shall not know until we get more details. I am sure the public will not be satisfied with any vague assurances. We must be satisfied that the Government are taking this matter seriously, have set up machinery and are seeing that it works. I beg to move for Papers.
5.5 p.m.
LORD TEYNHAM: My Lords, I cannot help feeling that far too much prominence has been given in the Press and elsewhere to these mail robberies. I suggest that this sort of prominence may well incite others to go and do likewise. I was glad to hear that the noble Earl, Lord Lucan, does not share that "considerable alarm" which was evinced by his friends in another place and is able to look at the matter a little more dispassionately. It is perfectly true that more mail robberies have taken place than before the war, but, on the other hand, the figures have been decreasing year by year since 1947. I think I am correct in saying that the losses have gone down from three to two bags per million during
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the last six years. It is sometimes forgotten that the primary job of the Post Office is not the protection of its vans and postmen, but the quick and efficient delivery of the mails. The Post Office is like a very large business organisation, and to expect it to give full protection to its goods, in addition to police protection, is really nonsense.
Undoubtedly, there is a serious crime wave in this country, in my opinion largely due to too lenient sentences, a crime wave which is being felt not only by the Post Office but by many other organisations. Sonic of your Lordships may think that criminals engaged in these robberies are rarely caught. This is quite untrue. I believe that in 1952 to 1953 more than 2,303 criminals were caught and punished for dishonesty against the Post Office, including 457 for thefts from the mails. I should be the first to agree that there is every reason for tightening up the security arrangements. I have little doubt that the noble Earl the Postmaster General has this matter well in hand and will tell your Lordships something about it later.
It has been suggested in some quarters that Post Office vans should carry armed guards in addition to their usual staff. I need hardly point out to your Lordships what has already been mentioned by the noble Earl, Lord Lucan: that this would be enormously expensive and would far outweigh any losses which are being experienced now or likely to be experienced in the future. Of course, in very special cases this could well be done and no doubt will be done, but I suggest that there is no reason for any drastic steps of this nature covering the whole system; that would be quite impossible. It may well be that a few undesirables have filtered into the Post Office organisation, but that is likely to happen with any large business, and I have no doubt that the Postmaster General will look carefully into the checking of new recruits that come into the service. In my limited association with the Post Office as a member of the Post Office Advisory Board, I have always found a spirit of great pride and efficiency in the service. I am sure your Lordships will agree that this service is second to none in the world.
5.8 p.m.
THE EARL OF LISTOWEL: My Lords, I am sure your Lordships will agree that the tone of the speeches to which we have just listened has shown that in this House, at least, there is no desire to discuss this matter in terms of Party interest. It is a great advantage that your Lordships can discuss the position in this way and I am certain there is no wish on any side to make political capital out of the difficulties of the Post Office. One thing is certain about the outcome of the recent mail van robberies, and I think everyone would agree with this conclusion: at no time since the war has the Post Office occupied so much space in the columns of the daily Press. It is almost as though the Postmaster General had inadvertently placed the head of Malenkov upon a new postage stamp. I have tried to follow Press comment on the Post Office fairly closely for a number of years and it is interesting to note that the fact that we have one of the most efficient postal services in the world—a fact that those of your Lordships who travel will know from experience—and also that our Christmas mail is punctually delivered every year, often under the most trying conditions, receives the most scanty, and indeed, sometimes almost monosyllabic acknowledgment. But crime, especially when it is spiced with violence, brings the Post Office right into the head-lines and attracts a vast number of editorials and news articles.
I feel that we must be fair to the Press about this. I am sure that the Postmaster General will agree with me when I say that the attitude of the Press to the Post Office has always been friendly and open-minded. I am sure that is true, as a general rule. I am not for a moment suggesting that there is any bias against the Post Office, a bias that might possibly have arisen because it is a nationalised service. The Post Office was nationalised in the reign of Henry VII, and it has acquired a venerable air of respectability, as well as an established record of efficiency, which its juniors, I fear, cannot expect for several centuries. It would also be unfair to the Press to suggest that the newspapers have been solely interested in the sensational aspect of these crimes, or indeed, that Press comment has been generally inadequate in matters
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of fact and unreasonable in criticism. Some papers have certainly shown a very authentic concern for the public interest and the safety of the mail, and a real willingness to suspend judgment until they have a fuller knowledge of the facts.
Nevertheless, I am afraid that the treatment of these crimes in certain newspapers with a considerable circulation may have had some harmful effects. This must have tended to undermine the confidence of the public in the Post Office, and to make the Post Office staff feel that they are not trusted by the public. These psychological reactions, however little justification there may be for them, are genuine reactions and must be taken into account. It cannot, therefore, be too often repeated that, even if there are some black sheep in the Post Office—and, of course, there are such in every profession: in the Army, in the law, and in all walks of life—the vast majority of Post Office servants are as honest as the day and extremely proud of their work. I doubt whether many people outside the Post Office are aware of the tremendous esprit de corps in all the branches of the postal service. There are Post Office families just as there are Army and Navy families, that have served in the Post Office for several generations. Traditions of this kind, which ought to be supported so far as possible, are certainly not encouraged by a good deal of undiscriminating criticism.
But no one would wish to overlook the very real concern felt by the public, and rightly expressed by the newspapers, about the safety of the Queen's mail. This is a genuine and legitimate anxiety, which can be removed only if the Post Office can satisfy public opinion that everything possible is being done to prevent dishonesty and crime. People are, I think, beginning to doubt whether the mail is as safe now as it was in times past, and even to wonder whether the Post Office may not be neglecting its duty to protect letters and parcels entrusted to its care. These doubts can be set at rest only by the fullest possible information being given about what is being done to protect the mails, including an assurance that fresh security measures are in hand. I think my noble friend Lord Lucan was fully justified in addressing a number of questions to the noble Earl opposite, and I hope that in his reply he will take the

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public as fully into his confidence as may be possible in the circumstances. People are thinking—your Lordships must have heard opinions of this kind expressed in casual conversation—that mail bags may be exposed to more risk than should be taken, and that there may be leakages of information about valuable mail inside the Post Office. My noble friend Lord Lucan referred to several thefts which suggested that there might have been inside information available to the criminals. Anything the Postmaster General can say about fresh security measures to meet these dangers, and any assurance he can give that such improvements are not being held up for lack of funds, will, I am sure, be widely welcomed.
But while we are entitled to expect the Post Office to do everything possible to prevent the continuation and recurrence of these crimes, and to give the public the fullest possible information about its security policy, there are two things which I feel should not be forgotten b at which people are sometimes inclined to forget. The first is that it obviously would be most unfair to ask the Post Office to describe publicly the details of its security arrangements. Such a detailed description, of the specific security measures would give criminals exactly the information they want to have. Of course, only the Postmaster General is in a position to judge what information can be given to Parliament, to the Press and to the public, without helping potential criminals. The second thing is this. Crime, of course, is costly; but so is its prevention. It would be unreasonable to expect the Post Office to adopt a drastic, revolutionary measure, such as providing a guard for every van with valuable mail, which would add enormously to the cost of the service and might result in an increase in the present rate of postage. All Governments since the war have been trying to reduce the number of persons employed in the Civil Service, because we have felt that such persons could be more usefully occupied elsewhere. If the Post Office were now to recruit an enormous army of security officers, they would be taken from occupations in which obviously they would be doing the country far more good. So that cost and manpower must be seriously
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considered when assessing the value of possible improvements in Post Office security policy.
As my noble friend Lord Lucan rightly said at the commencement of his remarks, we must, I fear, as rational beings, accept a proportion of loss in mail every year, even after every reasonable security precaution has been taker. So, while I am. sure the whole House would welcome as much information as the Postmaster General can give about the measures; that the Post Office are taking and intend to take to deal with crime, we do not wish to press him to say anything more than what he thinks is right and wise in. the public interest.
5.19 p.m.
LORD BALFOUR OF INCHRYE: My Lords, one happy feature about this debate is that it gives noble Lords who take part in it an opportunity, apart from considering this particular question of robberies, to pay a tribute, as the noble Earl, Lord Listowel, has done, to the grand work of the tea; of thousands of postmen throughout the country who are not in any way concerned with the subject we are debating to-day. I feel that my noble friend Lord Lucan rather brushed aside the satisfactory down-drop in the loss of mail bags which has taken place during the last six years. I understand that the figure is now two per million bags, as compared with three per million some six years ago. That is a satisfactory background against which we can debate this particular series of crimes. At the beginning of his remarks the noble Earl, Lord Lucan, said that he wished to make no Party capital, but reserved the right to criticise Her Majesty's Government. Equally, I am sure he will grant that it is our right to criticise views: expressed by noble Lords on the Front Bench opposite.
I was rather amazed at the numerality expressed by the noble Earl. I do not dispute what the noble Earl, Lord Listowel, said: that we may have to accept certain losses. But the noble Earl, Lord Lucan, said, "No one is going to be worried about the odd bag." The people who own something in the odd bag which is lost are going to worry. The whole system of pace outside and security within the Post Office will, I hope, worry about that single bag. I trust that we ate not going to develop

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a mentality which says, "The big robbery matters, but, please, we do not worry about the little one." A sort of "Stop me and 'swipe ' one" mentality.
THE EARL OF LUCAN: I think the noble Lord will recollect that the public anxiety about mailbag losses is a thing of fairly recent growth. During the many years when there were, as I have said, the odd bags being stolen, the public took it in a very rational common-sense way. It was only when the big robberies started that public alarm began.
LORD BALFOUR OF INCHRYE: Let me get this right. Do I understand that the noble Earl would like to withdraw the expression, "No one is going to be worried about the odd bag"? He does not really mean that.
THE EARL OF LUCAN: I mean that the public as a whole would not be concerned with trivial thefts, such as go on all the time, and always will go on, in every society. That is not what is causing the public anxiety.
LORD BALFOUR OF INCHRYE: I am sorry, but I am afraid that we have a different outlook. Noble Lords who concur with me will not condone crime because it is only a small one, but will endeavour, to the best of their ability, to condemn all crimes, small or large. I think these crimes are a reflection of the general increase of lawlessness that we are seeing in a post-war period. As the noble Earl, Lord Lucan, said, "Let us keep a sense of proportion." He said, "We have always had mail robberies." It is quite true that there are always mail robberies. I find in the Journals of your Lordships' House for May 1, 1668:
"The Committee for the Bill against thefts and robberies on the highways are to meet this afternoon."
So your Lordships will see that we are not debating this particular subject of robberies on the highway for the first time. Far from any expectation of immunity from this crime wave, I think the Post Office must expect to get its full share of the increase. If I were a robber, young, vigorous, determined and ruthless, I think a Post Office robbery would show many advantages over other forms of attempted robbery. It has many favourable factors, of which I should like to submit one or two to your Lordships.
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First of all, disposal of the "swag" (I believe that is the technical term) is very easy, compared to the disposal of other forms of possessions taken by robbers. But the most favourable factor for the robbers is the regular routine of the Post Office. I understand that a figure of 177 million miles a year are run by Post Office vehicles, and the majority of that mileage is on regular scheduled routes, which it is difficult to alter because connections have to be made with trains and boats, and because there are timed deliveries at the other end. The mails go on regular scheduled mail trains; they go on standard vehicles, and they go at standard times. Everything is there for the robber—advantages that he does not get when he tries to break into a private house. He does not know the most likely and favourable time for getting jewellery, and he does not know who will be there. There are many unknown factors in private robbery. That is why we see so many robberies in houses at about dinner time, because it is then that the burglar thinks he has the best chance of getting what he knows he can get at a set hour, as when he endeavours to rob Her Majesty's mails. Therefore, I think the Post Office cannot expect anything except, possibly, a greater pressure on its security forces to withstand burglaries and robberies while this crime wave is on.
I will conclude by saying this about prevention and punishment. I hope the Postmaster General will be able to tell us that the most modern and scientific devices are being used in the field of prevention. The Post Office could have two-way radio. The noble Earl may well have it already, but I do not think it would be giving away anything secret if he could tell us that it was being used. No doubt automatic warning devices on vehicles and in post offices are already being used, but perhaps they could be used to a greater extent in the future. With regard to punishment, I should like to see much heavier penalties imposed by the courts for this class of crime. I believe that the Post Office are having the light of public anxiety and public opinion focused upon their work at the present time. My own view is that they have done a fine job in the past, and I am not frightened or alarmed that they will not be able to withstand fully the scrutiny of the public of this country.
5.27 p.m.
LORD AMMON: My Lords. I venture into this discussion in the mood of one visiting the scenes of his childhood, and at the same time commenting that, "They were the days." They certainly were, in many senses compared to the present time. I propose to be reminiscent, because I think something can be gained from applying to the present situation the experience of the past. The first thing I would say is that the Post Office is not the only public service which suffers from robbery: both the railways and the docks were largely in the news a little while ago. The Post Office, however, is a Department which touches everyone and, therefore, is good news, and hound to receive wide publicity. I think there is something to be said, too, for the fact that in the days gone by there was a different method of recruitment from that which prevails at the present time; and the whole service has undergone tremendous changes. Whether or not the administration have kept pace with them is a matter for discussion.
I joined the Post Office more than sixty years ago—that is a long time—and at that time recruitment was, first of all, by lads who made the Post Office their life service. In addition, they had to take examinations, and their references were vetted and discussed. Therefore, there was a continuous stream of people who were well vouched for. Also, there grew up in the service—I think this has been mentioned by my noble friend Lord Listowel—a sense of pride, which is still there, largely with those who have had a long acquaintance with the service. It was felt generally that they were part of the Civil Service, and that they had a position of some significance in the land, a position of which they were proud. It is ironical, though true, that conditions of employment then were very different from those of the present time. I went to work for eighteen shillings per week, and had to get up at four o'clock in the morning and walk three miles to get to my work. I do not think you would get a very large queue nowadays for that kind of job. Nevertheless, there was this pride in the service that I have mentioned. The employees felt that they belonged to a service of which they could all be proud. It is true that conditions in the old days were such that the late
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Will Crooks, on one occasion during a discussion in another place on Post Office conditions, when the usual Government reply was given, to the effect that the job was permanent, said, "It is quite true that it is starvation—but thank God it is constant! "That, perhaps, more than anything eke, is an indication of the state of affairs in those days.
It was the noble Lord, Lord Teynham, I think, who made reference to this pride in the service. It would be a very bad thing indeed if that were in any way lost to us. As I see it, the present difficulties are part of the general malaise which possesses the community at the present time. I believe that it is beginning to show signs of dying out, but there are steps that can be taken which will help to make it more difficult for these raids to be carried through. We have had signs of this malaise in the docks—I am sure the noble Viscount, Lord Waverley, will bear me out in that—and we have had it on the railways. Speaking of the docks, I recall the case of a man who appealed to me once when I had something to do with the docks. He had been dismissed because he had been convicted. I sent him the usual letter saying that the: matter would be inquired into. I found upon investigation that he had, in fact, had one or two convictions. I thereupon wrote him a letter saying that his dismissal would have to stand, and I received from him the stimulating reply, "You said you would look into it and you certainly have done so!"
The Treasury, I think, have something to say, as they always have, in regard to the Post Office. In days gone by, I had to take part in the inside and outside work on behalf of the staff. I edited their journal for over twelve years, and for over twenty years I took part in the leadership of the organisation. But the Treasury then, as now, were very reluctant to help, and made it difficult for us to be able to spend money or to take the steps that would have met the altered circumstances. They are reluctant now to take the precautions that may be necessary to put some check on the robberies that are taking place. I was once travelling in a train from the West of England, in company with another Member of your Lordships' House, and I had a fair indication of how some of

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these incidents occur. At the end of the first-class corridor, quite near the entrance to the dining saloons, there was something like a small safe on the floor, underneath which were mail bags. There was no fastening whatsoever. They were quite close to the window and to the door near which we sat. We were there for some hours, yet nobody came down during all that time to have a look at the bags. It would have been the easiest thing in the world for someone to open them or, with collusion from outside, to toss the bags through the window; a robbery could have taken place without any difficulty. That sort of thing should be stopped; but it quite definitely goes on at the present time. I took this matter up the other day with the Post Office people, and they admitted that that sort of thing is happening.
The noble Lord, Lord Balfour of Inchrye, spoke about prison sentences. There is a tremendous amount of undue leniency in this direction. In the old days of which I have spoken conditions were bad; pay was low and conditions generally were very poor, yet the standard of honesty was high. Someone said to me recently that our national reputation for honesty has deteriorated simply because there are not so many policemen in the streets. There may be something in that. But in those days the sentence for such thefts was never less than seven years, even for a small case of theft in the Post Office. Nowadays you almost expect sometimes that a man will be patted on the back and told, "Go away and be a good boy, and don't offend in the future." I am certainly not going to advocate the infliction of heavy sentences, but at the moment we seem to be going too much in the other direction; and having regard to the state of affairs at present it looks as if a little of the older method might be necessary.
There is another point to which I wish to refer. There must surely be some return to the former method of recruitment. After all, in a service such as this, the Post Office being the custodian of the property of the public, it has a bounden duty to ensure, so far as possible, that the personnel it employs can be trusted. It has been forced at the present time, by pressure of circumstances, to take on
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numbers of people of whom it has little or no knowledge, without making all the fullest investigations that it would normally make. Moreover, the age of entry has been altered. Above all, there is the question of the engagement in the Post Office service of a type of people that were not known in the old days. During the war years we found that there was much careless talking in public places, as a result of which information could be pieced together, to their advantage, by those who were concerned, and that is one of the dangers we suffer under present conditions. I suggest to the Postmaster General, with the greatest friendliness (and I am still speaking as one who is jealous of the good name of the postal service) that all possible steps should be taken to overcome this problem. If the Treasury stand in the way, I am sure that the noble Earl has only to come to either House with the certainty that they will take the necessary steps to give him all support possible.
I do not want to exaggerate in any way the situation which exists, and which we all deplore. I believe that it will pass, as it has on other occasions. It is, as I have said, a result of the terrific upheaval we have endured and the general malaise, and of the collapse of moral principles including honesty. These are things which we have to work out. We must give the Postmaster General, in his difficult job, all the support we can, and we must not do anything to make the genuine and honest members of the staff feel that they are in any way under suspicion or that there is any lack of confidence in them. We must give them every help, and hope that they will co-operate to the utmost with those responsible for the administration of the service.
5.38 p.m.
EARL WINTERTON: My Lords, I feel myself very fortunate in having to follow the noble Lord, Lord Ammon, who has been a personal friend of mine, though not a political one, for many years. I think I am expressing the views of all your Lordships when I say that we have listened with delight to his reminiscences of the good, or bad, old days—I am not sure which: he seemed to hover between the two. I am particularly pleased to follow him to-day, because on a previous occasion I had the honour to follow him in a debate

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when he attacked the Dean of Canterbury—with such effect that the Dean has not since made a single Communist speech from the pulpit of Canterbury Cathedral.
I want to keep your Lordships for two or three minutes and follow a custom which prevailed in another place when I first became a Member (it has not always been followed there, or here, in your Lordships' House) of taking up a point made by a previous speaker. I agree that this is a general question and not a particular one. If I make one criticism of Lord Lucan's speech, it is that he seemed to suggest that this was a particular question. It is, in fact, a general one. The noble Lord, Lord Ammon, is quite right, in my opinion, in saying that there is a general malaise (I think was the word he used) in the country which is responsible for crime of all sorts. In fact, as a distinguished man, not a member of your Lordships' House, said to me the other day, the real fault with the people of this country is that a portion of them, not the whole of them, have ceased to follow the Ten Commandments, and especially have they ceased to have any regard for the Eighth Commandment. I think that what the noble Lord, Lord Ammon, has said is true, though it is not a subject that one can pursue on this occasion: that it is a question whether the leniency of some sentences does not make the position worse.
I think, therefore, that this is a general problem, and the point which we have to consider this afternoon is whether any additional steps need to be taken. As has been instanced by two of my noble friends on this side of the House, the problem is really not such a large one: it is a matter of only two bags out of a million. The question is whether any special steps ought to be taken. I do not think a security service that would cost a great deal of money is needed in the Post Office. I was not quite clear what the noble Earl, Lord Lucan, meant by that. I thought he hinted that there should be some form of security service which should inquire into the bona fides of members of the Post Office. Perhaps I do him an injustice in saying that. I do not think it is necessary.
I suggest that two things should be done. First—and it is easier for a Back Bencher to say this than it is for the
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Postmaster General, though I feel that he would agree with me in regard to it—I think that the railways should do more to protect the mails in their care. It is their responsibility. I agree with the noble Lord, Lord Ammon, on that point and I would go further and say that the situation on some main line stations is scandalous. No one is in charge of mail bags or people's luggage. No other country in the world has the system that we find on British Railways. A porter puts private luggage or mail bags in the train, and anyone can walk among them and take them away. That was all very well in the days when we had a high reputation for honesty, but when we no longer have that reputation it is very dangerous. Another point is a "King Charles's head" of mine—I have referred to it both here and in another place—and that is, to try to wake up the public, the Government and the local authorities of this country to the fact that we are in a position of extreme danger because the police force is so undermanned. It is a terrible situation that, in this great city of London, with a bigger population to look after than ever before the war, the police are 4,000 under strength. It is all very well for us to get up and complain and ask why mail bags are being stolen. What we need to do is to bring the pressure of public opinion to bear upon the question of how we are to get more police. I do not want to speak any longer, but I should like to say, as a new recruit to this House, that I think it has been a useful debate, and we are looking forward to what the Postmaster General has to say.
5.44 p.m.
THE POSTMASTER GENERAL (EARL DE LA WARR): My Lords, I think we all agree with what the noble Earl, Lord Winterton, has just said: that this has been a most interesting and valuable debate. I should also like to echo his words that I ant glad, as a comparatively new recruit to the Post Office, to follow that great veteran of the Post Office, Lord Ammon. We all enjoyed his speech very much. I am particularly grateful to the noble Earl, Lord Lucan, for putting down this Motion, and for the manner in which he moved it. He put certain rather critical questions—but why not? We all know that the country is

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worried about this matter, and it is much better to be clear and open upon it. One of the main reasons for worry is that it is not only a matter of the material value of the losses that are being inflicted on the public; the whole question of public confidence in the Royal Mail is involved. The mail of this country is one of the very foundations of our social and business life. Therefore, I regard it as my first duty to maintain that confidence. not only by ensuring that the Royal Mail is safe, but, almost equally important, by ensuring that it is felt to be safe.
The public cannot possibly decide whether to have continued confidence in the mail unless they know the facts. That is why I ventured the other day to put out certain figures, some of them not quite so complete as I should like to give your Lordships to-day. I start by making this assertion, and making it with all the strength at my command: that the safety of the mail is not decreasing. Losses are not increasing, nor is it true to say, as I have heard it said, that it is easy to get away with robbery of mail and that few people are caught. Some of the figures I am going to use have already been referred to this afternoon. I ask your Lordships to forgive me if I repeat them, because I want to put them on official record as coming from the Minister who is responsible for the conduct of the post. If some of the figures I am about to give are rather less alarming than the prominence which has recently been given to this subject may seem to indicate, I beg your Lordships to believe that I want in no way to be-little the gravity of the problem. But if the public are to judge, they are entitled to the facts, and all the facts, whether those facts be good or bad.
Incidentally, it is not only the public who should have those facts. I was grateful for what one or two noble Lords have said about the effect of publicity upon the criminal world. I want to give facts and figures which will not only be reassuring to the public but will bring it home to the criminal world that the Post Office is not quite such "easy money" as some statements which have lately been made may suggest. I have heard that it was stated the other day in another place that postal losses had increased since this Government came into office. It is
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utter rubbish to think that criminals care what particular Government is in office; but, in order to make it clear that this is not in any way a matter of Governments or of Party politics, I want to point out that the figures I am about to give and which show a steady decline of losses are taken over six years, and that the decline started under the ægis of my predecessor.
What are the facts and figures of the situation? It is our duty to undertake the collection, transport and delivery of registered mail worth well over £2,000 million a year. The average compensation we have paid out during the last six years has been £71,000. The noble Earl, Lord Lucan, has asked me not to give round figures, and he also spoke of "round phrases." However, he must forgive me; I really cannot take him into every item of postal loss over the last five or six years. When dealing with a question of policy, we must deal in what are necessarily rather general figures. The figures that your Lordships have already heard this afternoon are correct. In 1947 the Post Office lost 1,200 mail bags—that is, three bags per million. Last year 720 mail bags were lost, or two per million. During the same period—here again the noble Earl, Lord Lucan, asked me to be as specific as I could; therefore I am going to give him the figures—losses of and from registered letters fell from 11,000 to 7,000, and registered parcels from 6,900 to 2,300.
The noble Earl asked which incidents were violent and which were not. I am afraid that whilst I can give him the figures about incidents, it becomes a subtle point as to whether or not violence has been used in a robbery. Moreover, it would involve making an examination of old records, a task which would be difficult. I will give him the incidents, but it is difficult to divide them up as between the railways and our own vans because of the number of undiscovered crimes, and we are not entirely clear about the source of loss. I think I am right, however, in saying that recent losses on the railways about which we are fairly sure amounted to 29. I can be a little more specific on the question of losses on the road but, again, I cannot always say whether they were with or without violence. Perhaps the noble Earl would not press me in regard to that matter.

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There were 30 incidents in 1947, 13 in 1950, and 9 in 1953. The whole tendency is downwards. I mention only some of the figures, because it complicates the question to give too many. So far this year there have been three incidents about which your Lordships have recently read.
One last point to which I would call your Lordships' attention is the fact that there has been a reduction in value in the losses of our registered letters and parcels. This has gone steadily down over the last six years. I was particularly glad that the noble Lord, Lord Balfour of Inchrye, gave the figures of convictions. Your Lordships will remember that I said that just over 700 bags were lost last year. Although one cannot point to a particular number of arrests or of bags lost in a particular year, nevertheless these figures are related: whereas 720 bags were lost, 457 people were caught last year for robbery of the mail, I hope your Lordships will desire to join with me in congratulating the police, aided of course by our own investigation branch, for the very considerable success of their activities lately. I welcome the opportunity of assuring the noble Earl, Lord Lucan, of the close collaboration that exists, when necessary, between the police, the railway police (where the loss concerns the railway) and our own investigation branch. I have inquired as closely as I could into the question of the alleged jealousies that exist between the two forces, but I confess that I can find no evidence at all in that direction: on the contrary, there is a great deal of evidence of very close collaboration. The noble Earl asked me also about insurance. As it happens, only recently my Department were told by an important firm of transit insurers who deal, amongst other things, with many of our consignments, that in their experience postal transit is as safe as any other, and that if it were not so insurance companies would have raised their premiums, but they have not done so and are not thinking of doing so.
The figures I have given your Lordships certainly show a decrease, but I want to pause on this point and to say that the fact that: the figures are decreasing is no reason at all for complacency or for thinking that things are entirely satisfactory. In my view—it would be monstrous if this were not my view—
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any loss of mail matters. It was probably an unfortunate phrase which was used by the noble Earl, Lord Lucan, but certainly I should associate myself with the noble Lord, Lord Balfour of Inchrye, in saying that I did not much like the noble Earl's reference to no one worrying about an odd bag being lost. I worry very much about an odd bag. But with these figures before me, I should not he doing my duty if I allowed myself to be stampeded into spending public money on remedies which I knew perfectly well would cost many millions of pounds and would save, if the remedies were successful, only a very small amount in thousands of pounds. When talking about the Post Office we must remember that we are talking about an organisation which handles other people's money. Noble Lords have referred to the vastness of our operations—the fact that we have 24,000 post offices all over the country, that we have over 10,000 vans traversing every lane and by-lane and travelling, as the noble Lord, Lord Balfour of Inchrye, said quite truly, over 170 million miles a year. Thousands of trains and railway stations are concerned. It would be easy for me, in order to stave off public criticism for the moment, to adopt some of the suggestions that have been made, and at the end of it to have made nothing more than a gesture, and a very expensive gesture, in relation to the public.
I think the noble Earl, Lord Lucan, and the noble Lord, Lord Ammon, asked me the same question in regard to financial 1imitations imposed by the Treasury. I can tell them that during the last few years I have spent large sums on security, and on no occasion has any question been raised from the Treasury; in fact, in regard to the larger part of my expenditure I have not had to go to the Treasury. No honest remedy that is likely to be effective or that has any reasonable relation to the losses involved would ever, for financial reasons, be turned down by me—and it is a question for myself rather than for the Treasury.
My Lords, it is my duty to deal with realities, and one reality that we must face is, as many noble Lords have said, that there is now more crime in this country than there was before the war, and that, in common with other private citizens and business organisations, the Royal Mail is having is share of suffering

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from that crime wave. But, having said that, I hasten to add that the public are entitled to an assurance from me that the postal service is making every effort to adjust itself to these unhappy conditions. I take this opportunity of giving that very solemn assurance. But what I will not do, because I cannot, is to promise immunity. With the number of criminal gangs and thugs that are going about today, it is inevitable that we shall have more attacks. We who are responsible for the mail feel our responsibilities very deeply, and we shall do our best to repel and throw off these attacks by the precautions which we take. But it would be most dishonest and most foolish of me to suggest, in view of the state of lawlessness which now exists, that for some subtle reason the Post Office alone is likely to be chosen to be left immune from the attacks of criminals.
What have we done so far? Since the war—I stress "since the war," because it is not just a matter of the last two years—the Post Office has been concentrating its efforts on security, and all the steps that have been taken to that end have been taken in the closest touch with the railway authorities and with the police. I am afraid that for very obvious reasons I must speak in rather general terms. Criminals, as well as your Lordships, can read. We have overhauled our safeguards; we have considered all sorts of possibilities, including some of those to which Lord Balfour of Inchrye has referred—namely, types of warnings such as radio warnings and so on. Your Lordships will not expect me at this juncture to say anything more under that head. Not only have we overhauled our security precautions, but we have taken strong steps to impress them on all our staff. We have doubled the strength of the Post Office Investigation Branch, and we have worked particularly closely with the railways on improving precautions at stations. Incidentally, very large sums have been spent in this connection. I should like to refer particularly to a matter which Lord Ammon, and, I think, Lord Winterton also, mentioned. There has been a good increase in the provision of locked cages in corridor trains on the main railway lines. The noble Earl, Lord Lucan, asked me whether I was satisfied with what is being done in that direction. I
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would say that until the task is completed, I do not think anyone could be satisfied. But I am satisfied that a great deal is being done, and I am taking every step that I can to see that these operations are being speeded up.
After the great robbery of 1952, I appointed a special expert committee to investigate conditions surrounding that robbery, and extensive steps have been taken as the result of their considerations. But I came, at a very early moment, to the conclusion that it was most important that the committee should continue in being as a standing committee, because this is a continuing problem. As the result of their activities, all the arrangements at railway stations have been reviewed and looked at again. One particular point that may interest your Lordships is that, in consequence of the committee's work, all the routes that were followed by what we call our "high value packet service" were examined. As the direct outcome of that, it was decided that there were strong security reasons against the Redhill to East Grinstead route. So it was that high value packets, which doubtless the robbers were looking for, were not in the mail which was taken in the recent robbery. There was some registered correspondence, some of which has been recovered. But there were no packets of high value. One does not want to build too much on one event, but I think that was definitely an encouraging circumstance.
What I must remember all the time—and, indeed, we must all keep it in mind—is that there is no winning shot in this game. We are up against skilful gangs who plan ahead. I am not going to tell your Lordships how much I think this problem arises from the operation of skilful gangs and how much from thuggery—I think there are elements of both. But there are skilful gangs at work, who are capable of planning ahead; and of one thing we can be sure—they are going to think up new methods and new plans. In these matters, the price of security, certainly, is eternal vigilance. Nor must we concentrate our energies only on the very valuable consignments in the mail. I can assure your Lordships that we are not doing so. Naturally, our energies were first concentrated in that direction, but steps have

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been taken, and will continue to be taken, to strengthen precautions for the normal mail vans.
There are two incidents to which I should have liked to refer. The first is the Regent Street incident; but I am afraid that I must not deal with that, for arrests have been made, and the whole matter is now sub judice. With regard to the Walthamstow affair—to which reference was made, I believe, by the noble Earl, Lord Lucan—the position was quite clear. The van in question was a special Post Office remittance van, and it should not have been left unattended, Instructions were disobeyed. It is a question of breach of regulations, and all I can say to your Lordships is that suitable action will be taken as and when every fact has been completely clarified.
I think those two incidents lead me to my last point, which has already been referred to by two or three of your Lordships. I refer to the feeling that some of these crimes indicate that a great deal too much inside information and inside knowledge is possessed by the perpetrators. It is true, as Lord Lucan has said, that hundreds and thousands of men have passed through the Post Office and know our methods. We employ from 100,000 to 150,000 temporary workers every Christmas. We cannot pretend that our methods are a great secret. The postal staff comprises over 160,000 men and women. I do not believe that anyone running any organisation, even if it were a great deal smaller than that, would pretend for a moment that it had no weak links in it. Certainly I do not. But I assure your Lordships that the matter is closely present in my mind. I would ask the noble Earl, Lord Lucan, and the noble Lord, Lord Ammon—who, I know, are greatly interested in this point, and who have asked me one or two rather definite questions about it—to allow me to leave the matter at that, and to accept my firm assurance that the matter is very much in my mind.
But if I say nothing on that point, I want to say with great force that the backing which we have received from the postal staff generally in meeting this present challenge—and it is a very great challenge—has been admirable. I know how deeply they will appreciate a great deal of what has been said in your Lord-
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ships' House to-day. The strength of a regiment runs parallel with its morale. Your Lordships will forgive my speaking with a certain amount of feeling on this point. I do not believe that anybody can become associated with the Post Office without having a deep and (judging from the way in which the noble Earl, Lord Listowel, has spoken to-day) abiding feeling for that organisation. These postmen, tens of thousands of them, are doing a good, steady job for us day after day.
By all means press for a continuance of my efforts and an increase of them. Do not spare me, as the Minister, if you feel that the measures I have outlined are insufficient. I earnestly hope that noble Lords, if they have ideas on particular problems, and fee] that there are steps which might be taken, will place them before me. I hope that the House will allow me—and from the speeches delivered to-day I believe that I can take it for granted that; your Lordships will allow me—to give a message of confidence to the men who, under trying conditions, are doing a difficult job, and doing it not entirely without success, as the figures I have ventured to give to your Lordships show. There is no "medicine for the troops" better than a message of encouragement and understanding.
6.12 p.m.
VISCOUNT WAVERLEY: My Lords, I am sure that we have all listened with interest, and certainly not without sympathy, to the speech we have just heard from the noble Earl the Postmaster General. It is perfectly clear that during recent years Her Majesty's Post Office has been in an exceptional measure a victim of the activities of organised criminal gangs. As the Postmaster General himself has suggested, it may be that the Post Office has suffered also from foe activities of individuals following in the wake of the organised gangs, very much as jackals are believed to follow in the steps of marauding lions and tigers. But clearly, in the main, the Post Office has had to reckon with gangs of criminals, organised, cunning. resourceful, clever and determined.
But there is nothing really very new in that situation. From my ten years as permanent head of the Home Office, I can

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remember cases when in various places—Sheffield, Cardiff and Glasgow, for example—gangs of criminals operated with an intensity and to an extent that caused great public alarm. In the course of time, by appropriate measures, peace and confidence were restored. Now no doubt, it is the job of the Post Office to take, and no doubt it has taken, all sorts of measures within its own sphere—protective and warning devices (various kinds have been suggested by my noble friend Lord Balfour of Inchrye), sudden and frequent changes of route and changes of timing. But that sort of thing is by no means the whole story. In this matter I am absolutely convinced that noshing can ever take the place of steady, patient and unspectacular police action.
In this connection, I do not think there is any reason for misgiving, such as I believe the noble Earl, Lord Lucan, expressed, as regards the distribution of the responsibilities of the police of this country among a number of different forces. I believe that, on the whole, co-ordination for dealing with this and other forms of criminal activity is very good indeed. If I may be reminiscent for a moment, I have had personal experience of the suppression of conspiracies of violent criminals in various places, in Ireland and in India, and the experience is the same everywhere. It is by good, sound police action, with adequate information, that the forces of law and order get the better of those criminal activities. In this matter success is cumulative, and cumulative in quite a spectacular way. As the police begin to have success in the apprehension of criminals, suspicion is sown in the minds of the criminals themselves. Information begins to come in. Men begin to suspect that their associates are "giving the show away," and in the end, very often, "give the show away" themselves. To my mind, that is the line on which this disturbing development of the post-war years has to be attacked.
I do not know, but perhaps some of your Lordships may have suffered personally from the activities of violent criminals, "cat" burglars, smash-and-grab raiders, whatever they may be. It
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is bad enough to lose one's own property in that way; it is even worse to lose valuable property with which one may be entrusted, and it would be just too bad if one were to be pilloried after that had happened. So far as that is concerned, I am sure that my noble friend the Postmaster General has absolutely no reason to complain of the tone of the speeches to which we have listened this afternoon in the course of an interesting and useful debate. I have no doubt whatever that the improvements which the Postmaster General has been able to record will continue, and that in the end we shall re-establish the reputation for honesty and good order of which in the past we have had every reason to be proud.
6.19 p.m.
THE EARL OF LUCAN: My Lords, it only remains for me to thank all noble Lords who have taken part in the debate this afternoon. In particular, I should like to thank the noble Viscount, Lord Waverley, for the speech he has just made, in which he put more clearly than I could the point which was in my mind, and which I am afraid I failed to get over to the noble Earl, the Postmaster General—namely, that the threat was from gangs and not from casual criminals. I was glad that the noble Viscount mentioned that, because to my mind it tends to refute those noble Lords who, if I may so describe it, tried to "ride off" on "the crime wave" and to put everything down to what they consider to be the deterioration of morals at the present day. This is no moment at which to raise that subject.
I am sure that gangs are the problem, and that is what led me to use the phrase about the mail bags which the noble Lord, Lord Balfour of Inchrye, misunderstood. I still think that the public are not deeply concerned with trivial crime; it is the big scale, spectacular, successful crime that has caused the present acute anxiety. The noble Earl, Lord De La Warr, in his reply, although he was not so specific in his figures as I should have liked, gave a number of encouraging facts. In

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particular, I should like to congratulate him on the first success, one might say, of the campaign which diverted a high value package from one route to a less vulnerable route. I should like to endorse what the noble Earl said about the spirit and integrity of all grades in the Post Office, and I am sure that all your Lordships send your best wishes to the Post Office for a successful conclusion of the present campaign. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

SPEAKER OF THE HOUSE
THE LORD CHANCELLORacquainted the House that Her Majesty had (by Commission) revoked certain Letters Patent and had appointed the Chairman of Committees for the time being, the Earl of Drogheda, the Earl of Clarendon, the Viscount Mersey, the Earl of Listowel, the Earl Jowitt, the Earl Fortescue, the Lord Ammon, the Viscount Wimbome, the Lord. Teynham, the Lord Merthyr, the Lord Blackford, the Lord Kershaw, the Lord O'Hagan, the Lord Terrington, the Lord Shepherd, the Earl of Buck ingha m-shire, the Viscount Hall, the Lord Rea, the Lord Milner of Leeds, Speakers of the House in the absence of the Lord Chancellor: The said Commission was read.
  GERMAN WAR CRIMINALS
  GERMAN WAR CRIMINALS