Sitting of 8 July 1954

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  HARTLEPOOL PORT AND HARBOUR BILL
  Read the Third time, and passed.
  ROYAL WAREHOUSEMEN CLERKS AND DRAPERS' SCHOOLS BILL [Lords]
  Read the Third time, and passed, with Amendments.

  TEES CONSERVANCY (DEPOSIT OF DREDGED MATERIAL) BILL [Lords]
  (Queen's consent, on behalf of the Crown, signified.)
  Bill read the Third time, and passed, with Amendments.

ORAL ANSWERS TO QUESTIONS
  CIVIL DEFENCE

    Biological Warfare (Protection)
    Mr. Haleasked the Secretary of State for the Home Department what steps he has taken, and is taking, to instruct civil defence units in defence against bacteriological warfare.
    The Secretary of State for the Home Department and Minister for Welsh Affairs (Sir David Maxwell Fyfe): A pamphlet on "Biological Warfare" has already been issued for the use of heads of sections of the Civil Defence Corps and qualified civil defence instructors which describes in general terms the essentials of biological warfare and sets out the basic principles of personal and collective protection against it. The subject is also included in the curriculum of the Civil Defence Technical Training Schools for the information of instructors who in turn pass the information on to civil defence volunteers.
    Mr. Hale: Are the results of the recent experiments in the Bahamas with H.M.S. "Lomond" to be circulated, or are they to furnish a Whitehall pigeon-hole?
    Sir D. Maxwell Fyfe: That is another question. I wish the hon. Member would put it down on the Order Paper.

    Anglo-Scottish Co-operation
    Mr. Rankinasked the Secretary of State for the Home Department what arrangements for co-operation exist between Civil Defence Services in Scotland and in England.
    Sir D. Maxwell Fyfe: There is the closest co-operation between myself and the Secretary of State for Scotland and between the Scottish Departments and the English Departments at all levels. In particular, the Civil Defence Joint Planning Staff act for both countries and the Ministerial Committee over which I preside is responsible for co-ordinating action on all matters of policy.
    Mr. Rankin: As I gather from the Home Secretary that this unification exists only administratively, may I ask whether there is also a corresponding unity and inter-change at the working level? Does it not seem absurd to him that while there should be unity of command in the case of offensive weapons we should have this separation of command where civil defence of the population is concerned?
    Sir D. Maxwell Fyfe: As regards the second part of the hon. Member's question, I would be very slow to accept from one of my countrymen that all of my countrymen would agree to lose their independence on any subject. I assure the hon. Member that, in addition to administrative matters, we are considering the arrangements which he has in mind for mutual reinforcement and the like.

    Fire Stations (Location and Siting)
    Mr. Willeyasked the Secretary of State for the Home Department whether, in view of its general importance to civil defence, he will appoint a committee to examine and report upon the location and siting of fire stations.
    Sir D. Maxwell Fyfe: No, Sir. The peace and war-time considerations are quite different. For peace-time purposes

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    it is necessary for fire stations to be situated close to the risks they protect. As I stated in the civil defence debate on 5th July, the war-time fire service will be nationalised and essentially mobile, with the bulk of the personnel and equipment organised in mobile columns available for operation anywhere.
    Mr. Willey: Will the Home Secretary agree that the possibility of atomic warfare has entirely changed the nature of the demand likely to be made on civil defence, and that an essential part of the structure of civil defence lies in the fire stations? In view of this, will the Home Secretary look at this problem again, whether or not he accepts this as a solution?
    Sir D. Maxwell Fyfe: Certainly. As I have told the House, I am going into the whole matter and I shall be very glad to pay special attention to what the hon. Gentleman has said. I should be grateful if he would perhaps elaborate his idea a little more.
    Mr. H. Nicholls: When looking into this problem will my right hon. and learned Friend take into account the facilities in the control of local industries because the great cost of maintaining fire brigades throughout the country could be minimised to a great extent if full account was taken of the fire-fighting equipment stationed throughout the various industrial establishments?
    Sir D. Maxwell Fyfe: Certainly. I should be glad to consider that point.

  HOME DEPARTMENT

    Committee on Homosexuality (Terms of Reference)
    Sir R. Boothbyasked the Secretary of State for the Home Department whether he is now in a position to announce the membership and terms of reference of the committee which is to inquire into the existing laws relating to homosexual offences and prostitution.
    Sir D. Maxwell Fyfe: The terms of reference of the committee are to be:
    "To consider—

    (a) the law and practice relating to homosexual offences and the treatment of persons convicted of such offences by the courts; and

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    (b) the law and practice relating to offences against the criminal law in connection with prostitution and solicitation for immoral purposes;

    and to report what changes, if any, are in their opinion desirable."
    I am glad to be able to inform the House that Mr. J. F. Wolfenden, C.B.E., Vice-Chancellor of Reading University, has agreed to serve as chairman. I hope shortly to be in a position to announce the names of the other members of the committee.
    Sir R. Boothby: While thanking my right hon. and learned Friend far that answer, may I ask whether he will be able to announce the other names before the House rises for the Summer Recess?
    Sir D. Maxwell Fyfe: I very much hope so.

    Obscene Publications
    Mr. de Freitasasked the Secretary of State for the Home Department if he will refuse the request of certain organisations of book sellers that he supply them with a list of books and periodicals which have been held by the courts to be obscene, since the circulation of such a list would greatly assist persons seeking obscene literature.
    Mr. McKayasked the Secretary of State for the Home Department if he is aware that the National Federation of Retail Newsagents, Booksellers and Stationers is anxious to prevent the sale of obscene books and if he will consider giving this organisation the list of such books which is in the possession of his Department, so that local agents could be informed by the national organisation, and the flow of such books be curtailed.
    Sir D. Maxwell Fyfe: I have no power to declare a publication obscene. There exists a list of books condemned by the courts in recent years, but the publication of it would be misleading apart from the mischief to which the hon. Member for Lincoln (Mr. de Freitas) calls attention and I am satisfied that it would not be in the public interest to make it public.
    Mr. de Freitas: Is the right hon. and learned Gentleman aware that I certainly did not ask whether he had any power to declare a book obscene, which was the suggestion made in the Question of my hon. Friend the Member for Wallsend (Mr. McKay)? I referred to decisions in the courts.
    Mr. Awbery: Is the Minister aware that magistrates are coming to different decisions on the same book, and would it not be better to decide whether a book is obscene before it leaves the publisher rather than leave the question in the hands of the magistrates?
    Sir D. Maxwell Fyfe: I know how much the hon. Gentleman feels about this, but, with respect, I disagree. His first suggestion would lead to the establishment of a centralised censorship and his second would take away from the regional magistrates the right of expression of their views. Both of these I consider to be important points.
    Mr. Ede: Is it not a fact that many books which, if brought before the courts a few years ago, would have resulted in a conviction, are now published and read by the public at large?
    Sir D. Maxwell Fyfe: I have noticed that myself.
    Mr. I. O. Thomas: Would the right hon. and learned Gentleman indicate what general standards, if any, prevail among people responsible for dealing with these books? What standards are current in the determination of obscenity or non-obscenity?
    Sir D. Maxwell Fyfe: That is a question which would require a careful statement, and I should like the hon. Member to put it on the Order Paper.
    Mr. Ede: Would the right hon. and learned Gentleman consider circulating to clerks to magistrates the recent remarks of Mr. Justice Stable?
    Sir D. Maxwell Fyfe: I shall certainly consider it.
    Mr. de Freitasasked the Secretary of State for the Home Department whether he will appoint a committee to inquire into the working of the law relating to obscene publications.
    Sir D. Maxwell Fyfe: No, Sir. I am not satisfied that the appointment of a committee would serve any useful purpose.
    Mr. de Freitas: Would not the right hon. and learned Gentleman agree that the present state of the law, under which respectable publishers go in grave peril, is almost universally condemned by
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    those who are interested in the development of English literature, and that the time has arrived for an inquiry into this matter?
    Sir D. Maxwell Fyfe: As I have indicated, I do not agree, but I should be very grateful if the hon. Member would submit some of his considerations. I should willingly consider them.

    Dr. Joseph Cort (United Kingdom Residence)
    Captain Kerbyasked the Secretary of State for the Home Department what considerations led him to delay by one month Dr. Joseph Cort's departure from Britain; and on what date and at what hour this extended permit will expire.
    Sir D. Maxwell Fyfe: Dr. Cort asked on 24th June far an extension of one month in order to enable him to complete his personal arrangements before leaving the country. He had been told as long ago as 24th March last that I was not prepared to grant a further extension of his stay in the United Kingdom, but it was suggested to me that his arrangements for leaving had not been completed, pending the consideration which I had been asked to give to representations made more recently on his behalf, and, in the circumstances, I agreed that his stay should be extended for a further month for the purpose stated, on the understanding that no further extension could be expected.
    Dr. Cort's permitted stay will expire at midnight on 30th July.
    Captain Kerby: While thanking my right hon. and learned Friend for making it public, may I ask whether he will now ensure that this alien leaves the United Kingdom on that date?
    Hon. Members: Shame.
    Mr. Benn: Has the Home Secretary noticed that the university at which Dr. Cort has worked with such distinction has given him three months' salary? Does he not regard that as a very fine proof of confidence in the work and character of this man?
    Sir D. Maxwell Fyfe: I do not think that that relates to the Question.
    Mr. E. Fletcherasked the Secretary of State for the Home Department if, before the expiration of Dr. Cort's

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    permit to stay in this country, he will, in conjunction with the authorities of the United States of America, take steps to ascertain whether, on medical grounds, Dr. Cort would be liable for service with United States forces.
    Sir D. Maxwell Fyfe: No, Sir.
    Mr. Fletcher: Is not this really the acid test of the bona fides of Dr. Cort? Does not the Home Secretary really want to find a method of extricating himself from an unworthy position?
    Sir D. Maxwell Fyfe: On the general point, I really do not think that I can add to what I have said.
    Mr. Bennasked the Secretary of State for the Home Department whether, in reaching his decision not to grant political asylum to Dr. Cort, he took into account the victimisation of Dr. Cort's student friends, following upon their interrogation by the congressional investigating committee.
    Sir D. Maxwell Fyfe: I took fully into account the statements which Dr. Cort had made about his friends who had appeared before a Congressional Committee, but I could find nothing in these statements which would justify the conclusion that Dr. Cort's circumstances qualified him for political asylum.
    Mr. Benn: Is the right hon. and learned Gentleman aware that three of Dr. Cort's friends who were with him at Yale University in the Communist Party were dismissed from their posts following Congressional hearings, and that Dr. Cort had withdrawn four offers of assistant professorships in famous universities after his name was mentioned and two other of his colleagues were inducted into the Army and instantly court-martialled for semi-political offences?
    Sir D. Maxwell Fyfe: As to the first two points, I was aware of them and I have had put to me a description of the third point. I have only qualified it because I am not sure that it was in exactly the same form as the hon. Member put it. I took those points into account.
    Mr. Mikardo: Can the right hon. and learned Gentleman say why he has refused to see a deputation on this subject from the members of the trade union to
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    which Dr. Cort belongs, led by my hon. Friend the hon. Member for Hayes and Harlington (Mr. Skeffington), who is a member of that union?
    Sir D. Maxwell Fyfe: I saw three deputations. I do not think a further one could have added anything more.
    Mr. Bennasked the Secretary of State for the Home Department how many other cases there are on record, other than the case of Dr. Cort, of the United States Embassy having advised his Department of the risk of an American citizen losing his citizenship while a resident in Britain; and if he will give details.
    Sir D. Maxwell Fyfe: There is no record of any such case. The United States authorities do not advise my Department of cases in which a United States citizen here may lose his citizenship, and did not do so in the case of Dr. Cort until a specific inquiry on the point had been addressed to them.
    Mr. Benn: Has not the right hon. and learned Gentleman admitted that this is a complete precedent and that it would be a very dangerous thing if the action of a foreign Government, by the operation of their own laws, were able to get the administrative extradition of one of their own nationals living in this country whom they could not get under the normal extradition convention?
    Sir D. Maxwell Fyfe: It was not a precedent. It would have been a precedent to have acted the other way. This does not amount to administrative extradition. As I have pointed out more than once, Dr. Cort can go to any country he wishes and need not return to the United States.
    Mr. Bing: Does the precedent the right hon. and learned Gentleman has quoted refer to such persons as Lithuanians, Latvians and Estonians, whose passports are invalid since their States have ceased to exist?
    Sir D. Maxwell Fyfe: I dealt with that point last week.
    Dr. Kingasked the Secretary of State for the Home Department what reply his Department made to the request of Mrs. Cort to be allowed to stay in this country.
    Sir D. Maxwell Fyfe: Mrs. Cort has been informed that no objection will be raised to her staying in the United Kingdom until the end of this month, and that if she wishes to remain here longer she should apply setting out fully the reasons for which an extension is desired.
    Dr. King: Is not the distressing position of Mrs. Cort just an example of the human issues involved in granting political asylum? As this is not a political but a human question, will the right hon. and learned Gentleman consider the whole issue?
    Sir D. Maxwell Fyfe: I cannot reconsider the whole issue, but I shall be willing to look into this part of it, as I have said.
    Mr. Haleasked the Secretary of State for the Home Department on what date it first became known to the Home Office that Dr. Joseph Cort had been interviewed by the British police, at the request of the American authorities, and had refused to make a statement; when, and where, this interview took place; when it became known to the Home Office that a second interview had taken place and that a full statement had been made by Dr. Cort; when, and where, this interview took place; and when a full copy of that statement was first received at the Home Office.
    Sir D. Maxwell Fyfe: A report from the Chief Constable of Birmingham dated 16th December, 1953, was received by the Home Office on 18th December. This covered two interviews with Dr. Cart at the Birmingham Police Headquarters, the first on 10th December and the second on 15th December, and enclosed a copy of a statement made by Dr. Cort on the second occasion.
    Mr. Hale: In those circumstances, is it not very deplorable that the right hon. and learned Gentleman should have stated, in answer to a Written Question on 24th June:
    "In December, 1953, it became known to the Home Office that Dr. Cort…had refused to make a statement."—[OFFICIAL REPORT, 24th June, 1954; Vol. 529, c. 49.]
    Is not that statement so near to a complete falsehood as to be utterly indistinguishable from it?
    Sir D. Maxwell Fyfe: I do not agree with the hon. Member, and I am sorry
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    that he should take that view. When Dr. Cort saw the Birmingham police for the second time he said he denied as nonsense the allegation, which he said was implicit in the communication made to him by the Birmingham police, that he did not wish to make a more detailed statement to the American authorities through the British police and that he was ready at any time to give the Home Office any information it might desire for its own use.
    It is clear that this was a refusal to answer the questions addressed to him by the American authorities, and in that way he was putting himself in the position of refusing to comply with the requirements of the United States Selective Service Act. It has, therefore, been his conduct which has created this position.
    Mr. Ede: Would it not have been fairer and have given the House full information if, after the line in the Written Answer which said that Dr. Cort
    "had refused to make a statement"
    the right hon. and learned Gentleman had subsequently added, "he did make a statement which is in my possession"?
    Sir D. Maxwell Fyfe: If the right hon. Member takes that view, it is, of course, worthy of consideration, but I thought that my answer to the Question dealt with the whole situation. After that, I had several opportunities, of which I availed myself, of hearing the fullest accounts of what had happened, and I did so.
    Dr. Summerskill: Is the right hon. and learned Gentleman aware that the education authorities of this country have allowed Mrs. Cort to obtain a British medical qualification here, and has not that served to allay some of the suspicions of the right hon. and learned Gentleman in this matter?
    Sir D. Maxwell Fyfe: I have said this afternoon that the position of Mrs. Cort is quite different because, so far as I know, there is no question of there being any danger of her losing her nationality or returnability and I am quite prepared to consider her position.
    Mr. Bennasked the Secretary of State for the Home Department why he never communicated with Dr. Joseph Cort to obtain a statement from him about his relations with the United States authorities before deciding not to renew

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    his permit to remain in Britain; and why no action was taken on this after Dr. Cort, in a signed statement to the Birmingham criminal investigation department, had expressed his readiness to do so.
    Sir D. Maxwell Fyfe: The answer to the first part of the Question is that there was no reason to suppose that any statement by Dr. Cort on the subject could affect the decision.
    In his statement to the Birmingham police Dr. Cort offered to supply information to the Home Office for its own use, but since the Home Office was not involved in the procedure by which inquiries were made of Dr. Cort on behalf of the American authorities it did not require any statement from him.
    Mr. Benn: In view of the fact that Dr. Cort, although being, in effect, extradited, is denied any sort of hearing in this country, would not the right hon. and learned Gentleman have thought it a little fairer, before exercising his undoubted discretion, to have consulted Dr. Cort, either personally or by correspondence, about his side of the case?
    Sir D. Maxwell Fyfe: I must protest against the use of the word "extradited." After all, Dr. Cort issued a long statement of his own and representatives of Dr. Cort put all the points that could be made for him, and I considered them very carefully.
    Viscount Hinchingbrooke: While congratulating my right hon. and learned Friend on his handling of this matter, may I ask him whether he would not confirm that the opinions expressed in the House on the case of Dr. Cort, taken in conjunction with the close association of this country and the United States, and the wide reporting in that country of our Parliamentary proceedings, constitute the best and fairest assurance we can give that if Dr. Cort does return to the United States he will be justly and fairly treated?
    Mr. K. Robinson: Does not the Home Secretary now appreciate that by his unfortunate decision he has delivered a shattering blow at this country's tradition of political asylum and his own reputation for fair dealing? Will he not now take this last opportunity of reconsidering his decision?
    Sir D. Maxwell Fyfe: No, Sir.

    Political Asylum
    Mr. E. Fletcherasked the Secretary of State for the Home Department how many citizens of the United States of America have asked for political asylum in this country in recent years.
    Dr. Kingasked the Secretary of State for the Home Department the number of persons to whom this country has granted political asylum since November, 1951.
    Sir D. Maxwell Fyfe: The circumstances of individual cases in which political considerations are brought forward in support of applications to enter or remain in the United Kingdom vary so widely that no separate record of the disposal of such cases is kept. I am accordingly unable to supply the figures for which the hon. Members ask.
    Dr. King: Although he cannot give the figures, would not the Home Secretary agree that political asylum has been granted consistently since the war and under his own Ministry, and that that shows he believes in political asylum? Why does he continue to refuse it to a man whose only troubles lie in the fact that he was once a Communist?
    Sir D. Maxwell Fyfe: I explained at considerable length to the House last week, first, that political asylum Still exists and is operated in exactly the same way as it has always been, and, secondly, that in my opinion the gentleman in question does not come within the rules of political asylum.
    Mr. Shurmer: Has the Home Secretary not seen the letter that has arrived in this country from Dr. Brown, of the Harvard Medical School, which proves conclusively that Dr. Cort is being sent back to be persecuted and that his life will not be worth living if he goes back? Does the Home Secretary not agree that all the facts prove that this man has every justification for claiming political asylum in this country? Will the right hon. and learned Gentleman not consider the case again?
    Sir D. Maxwell Fyfe: That is the letter that is in the "Daily Worker." [HON. MEMBERS "No."] I think it is the same one. I am just identifying the letter. If the letter is relevant I shall consider it.
    Mr. Gower: For our information, can my right hon. and learned Friend say whether political asylum has ever been sought by or granted to a person who came from a country with a free and democratically elected Parliament?
    Sir D. Maxwell Fyfe: I think that that would mean two things: first, going through the files of the Home Office for roughly 100 years and, second, deciding what constituted a freely elected Parliament.
    Mr. C. Davies: Does the right hon. and learned Gentleman realise that the writer of that letter, Dr. Brown, is a very eminent scientist? Would he not look into the letter and then make inquiries to ascertain whether the facts stated by Dr. Brown are accurate or not? If they are, would he then consider whether he should change his mind?
    Sir D. Maxwell Fyfe: I indicated time and again last week the problem which I consider to be the nub of this matter. I have considered all the points that have been raised and it would not be honest if I said that there was any hope of my altering my decision.
    Mr. Shinwell: For the purpose of information, can the right hon. and learned Gentleman say whether the United States authorities have made a request to Her Majesty's Government for the return of Dr. Cort to the United States?
    Sir D. Maxwell Fyfe: Oh, no. I dealt with that last week and I made it clear that there has been no request.
    Mr. Shinwell: If that is so, and there seems to be some doubt about this matter, would not the Home Secretary give Dr. Cort the benefit of the doubt?
    Sir D. Maxwell Fyfe: The right hon. Gentleman has not got the point, which we discussed rather a lot.
    Mr. Shinwell: Yes, I have read the OFFICIAL REPORT.
    Sir D. Maxwell Fyfe: The position is that the reason that I did not allow Dr. Cort to stay was that his refusal to answer the demands to appear before the United States' Selective Service authorities made him liable to lose his citizenship. If someone is liable to lose his citizenship and, therefore, to become unreturnable he is not kept here.
    Mr. Wyattasked the Secretary of State for the Home Department what precedents there are for not extending an alien's permit because his home Government has threatened to make him Stateless.
    Sir D. Maxwell Fyfe: As I explained in reply to the Question asked by the hon. Member for Erdington (Mr. J. Silverman) on 1st July last, it is the normal practice to require aliens who apply for an extension of their permission to remain in the United Kingdom to produce evidence that they have return facilities to another country. Whenever it appears that there is a risk of such applicants losing their citizenship or re-entry facilities permission to remain is refused.
    Mr. Wyatt: Would not the Home Secretary agree that the real precedent of the case of Dr. Cort—and one which has been set by him—is that, for the first time in the history of this country, the right hon. and learned Gentleman has allowed his decision as to whether or not a permit shall be extended to be determined by what a body outside this country may do in a future unspecified circumstance? Has he not now surrendered his own authority over whether or not to extend permits to aliens here to an outside body?
    Sir D. Maxwell Fyfe: I have not made that precedent. I have acted on the basis, which I believe is accurate and right, that if the person in question takes action which may result in jeopardising his returnability, he cannot stay here.
    Mr. E. Fletcher: Would the right hon. and learned Gentleman say whether that criticism applies equally to the case of a visitor from behind the Iron Curtain, who is then threatened with losing his status in his home country and ceasing to be returnable there if he claimed political asylum?
    Sir D. Maxwell Fyfe: There are two questions and I hope that the House will keep them clear. There is returnability, which I have explained; I have also explained that returnability is subject to the qualification of the person being able to make out a case for political asylum. In my opinion, Dr. Cort did not make out such a case.

    Mentally Defective Prisoner, North London (Treatment)
    Lieut.-Colonel Liptonasked the Secretary of State for the Home Department whether he is aware that a 19-yearold man was sent to prison for three months by the North London magistrate on 5th June last, because no place was available in a hospital for mental defectives: and whether he will take steps to suspend the sentence and arrange for suitable hospital treatment.
    Sir D. Maxwell Fyfe: This man has been certified as a mental defective since his conviction and I shall be ready to make an Order under Section 9 of the Mental Deficiency Act, 1913, for his transfer to an appropriate institution if a vacancy can be found before his sentence expires. I understand, however, that all the mental deficiency hospitals in the region have long waiting lists and it may prove impossible to find a vacancy.
    In that event, I should not feel justified in recommending any interference with the sentence imposed by the magistrate in full knowledge of all the circumstances of the case.
    Lieut.-Colonel Lipton: Is it not quite monstrous that a mental defective should have to be sent to prison solely because the magistrate said that the hospital services seem to have broken down completely? Can the right hon. and learned Gentleman say that we are civilised while such a case exists?
    Sir D. Maxwell Fyfe: The hon. and gallant Member must ask my right hon. Friend the Minister of Health about the shortage of accommodation for mental defectives, but I must point out in fairness that the magistrate said:
    "There seems to be but one thing I can do to protect the public, and that is to send you to prison for three months."
    In view of that, it would be very difficult for me to let the man out.

    Foreign Nationals (Temporary Labour Permits)
    Mr. Haleasked the Secretary of State for the Home Department how many applications have been received by the Home Office in the last 12 months, to the most recent convenient date, for the cancellation or non-renewal of temporary labour permits of foreign nationals on the ground that they have
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    not complied with the military service laws of the countries concerned; from what countries these applications have been received; and in what cases, and in respect of what countries, action has been taken by the Home Office in accordance with such requests.
    Sir D. Maxwell Fyfe: There is no record of any such application.

    Football Pools (Prosecutions)
    Mr. Alportasked the Secretary of State for the Home Department how many prosecutions have been undertaken against promoters of football pools run for the benefit of local charities and sports clubs since 1951.
    Sir D. Maxwell Fyfe: I am advised that the conduct of a football pool by a club or charitable organisation is not in itself unlawful, but, if the competition is so conducted that it is a lottery, offences against the law relating to lotteries may occur. Information as to the number of prosecutions for such offences since 1951 is not available.

    Betting and Lotteries Legislation
    Mr. Alportasked the Secretary of State for the Home Department whether he will take an early opportunity of codifying the existing betting and lotteries legislation.
    Sir D. Maxwell Fyfe: The Government have been considering the recommendations of the Royal Commission on Betting, Lotteries and Gaming, some of which have been implemented in the Pool Betting Act. I cannot, in anticipation of the Queen's Speech, make any statement about the possibility of further legislation on this subject.

    Dr. Strasser (Entry Permit)
    Captain Kerbyasked the Secretary of State for the Home Department why Dr. Otto Strasser was refused permission to visit Britain in the spring of 1954.
    Sir D. Maxwell Fyfe: I considered that it would not be in the public interest to allow Dr. Strasser to come to the United Kingdom.
    Mr. Edelman: Will the right hon. and learned Gentleman in no circumstances yield to any pressure coming from Fascist

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    or Fascist fellow-travelling sources to admit this sinister character into this country?
    Mr. Shinwell: Did the right hon. and learned Gentleman observe that his hon. and gallant Friend who asked this Question, and who has apparently some solicitude for Dr. Strasser, referred just now to Dr. Cort as an alien who ought not to be allowed to remain here?
    Captain Kerby: Is my right hon. and learned Friend aware that Hitler put a sum of 1 million marks on Dr. Strasser's head, dead or alive?
    Sir D. Maxwell Fyfe: I was not aware of the actual number of marks, but I knew that he was on the black list.

    Palace of Westminster (Queen's Coroner)
    Sir H. Williamsasked the Secretary of State for the Home Department if he will state the name of the present holder of the office of Queen's Coroner for the Palace of Westminster.
    Sir D. Maxwell Fyfe: I understand that an inquest on a body lying within the Palace of Westminster would be held by the Coroner of the Queen's Household, Lieut.-Colonel W, H. L. McCarthy, D.S.O., M.C.

  WALES

    Annual Report (Government Proposals)
    Mr. Watkinsasked the Secretary of State for the Home Department whether he will give, in the annual report of Government action in Wales and Monmouthshire for the year ended 30th June, 1954, information on the action taken on the proposals of the Government, as outlined in Command Paper No. 9014 on Rural Wales.
    Sir D. Maxwell Fyfe: Yes, Sir.

    Spas, Breconshire and Radnorshire (Use)
    Mr. Watkinsasked the Secretary of State for the Home Department whether he will consider asking the Council for Wales and Monmouthshire to inquire into the possibilities of utilising the special facilities of the spas in Breconshire and Radnorshire for the treatment of certain
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    diseases and for rehabilitation of persons who could benefit by modern medical science in good surroundings.
    Sir D. Maxwell Fyfe: It is for the council to decide on the subjects which it wishes to investigate, but I will draw its attention to the hon. Member's suggestion.

  EMPLOYMENT

    Agricultural, Engineering and Building Workers (Pay)
    Mr. Osborneasked the Minister of Labour the basic wage rates and the approximate average weekly earnings in 1939 of agricultural workers, skilled engineers and building operatives, respectively; and the corresponding figures today.
    The Minister of Labour and National Service (Sir Walter Monckton): As the answer is long and includes detailed information, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Osborne: Without having seen the figures, could I ask my right hon. and learned Friend whether the increases in wages in these three industries have been greater than the increases in productivity? Is there no relation between the productivity of the labour and the increase in wages?
    Sir W. Monckton: I think it would be more convenient to my hon. Friend if he postponed that question until he has seen these figures.
    Mr. J. Harrison: Does the Minister agree that productivity and wages are not always synonymous terms in regard to responsibility for the final product?
    Mr. Osborne: They ought to be.
    Mr. Harrison: What about machinery?
    Sir W. Monckton: Wages and productivity cannot be compared at all as a matter of arithmetic.
    Following is the answer:
    In agriculture the average minimum rate of wages for ordinary adult male workers at 1st September, '1939, was 34s. 9d. a week in England and Wales and 33s. 4d. a week in Scotland. The corresponding rates today are 120s. throughout England and Wales and 116s. throughout Scotland. For engineering fitters the average of the time rates in the principal districts of the United Kingdom was 69s. 2½d.

    2329
    at 1st September, 1939, and is now 146s. For bricklayers the corresponding figures are 73s. 4d. in 1939, and 168s. today; for building trade labourers they are 55s. 1d. and 147s. 4d., respectively.
    Figures of actual earnings are only available for broader industry groups, the latest pre-war figures relating to October, 1938, and the latest post-war figures to October, 1953. For all categories of adult male wage-earners in the metals, engineering and shipbuilding industries the average weekly earnings at these two dates were 75s. and 202s. 10d. For all adult male wage-earners in building and contracting they were 66s. and 183s. 8d.
    Average earnings in agriculture are not avail- able for 1938 or 1939. During the year, April, 1952, to March, 1953, the average weekly earnings of hired regular adult male workers in agriculture in Great Britain amounted to 133s. 2d.
    NOTES
    1. Agriculture. For agriculture the figures of both rates and earnings include the value of certain allowances in kind.
    2. Engineering. The rates given for engineering fitters are the averages of the recognised district time rates of fitters in 16 principal centres in the United Kingdom.
    3. Building. In the building industry the agreements specify only hourly rates. The weekly rates have been computed by multiplying the hourly rates (the average of recognised rates in 39 large towns in the United Kingdom) by the average number of hours in a full ordinary week, summer and winter hours being taken into account for this purpose.

    Glamorgan
    Mr. Gowerasked the Minister of Labour how many people in Glamorgan were registered as unemployed at the latest convenient date; how many notified vacancies there were on that date; and how these figures compare with those of a year ago.
    Sir W. Monckton: The number of un- employed persons on the registers of employment exchanges in Glamorganshire at 14th June, 1954, was 10,636, and the number of vacancies notified to those employment exchanges and remaining unfilled at 30th June was 4,647. The figures for corresponding dates in 1953 were 13,800 and 4,530 respectively.

    Barry
    Mr. Gowerasked the Minister of Labour how many people in the borough of Barry were registered as unemployed at the latest convenient date; how many notified vacancies there were at that date; and how these figures compare with those of a year ago.
    Sir W. Monckton: The number of unemployed persons on the registers of the Barry employment exchange and youth employment office at 14th June, 1954, was 460 and the number of vacancies notified to these offices and remaining unfilled at 30th June was 185. The figures for corresponding dates in 1953 were 414 and 193, respectively.

    Buckinghamshire
    Mr. John Hallasked the Minister of Labour the number of persons registered as unemployed in Wycombe and the county of Buckinghamshire, respectively, as at the last recorded date, as against the same period in 1952 and 1953.
    Sir W. Monckton: For the High Wycombe Employment Exchange and Youth Employment Office the figure for 14th June, 1954, was 220 compared with 815 at 16th June, 1952, and 329 at 15th June, 1953. The corresponding figures for all employment exchanges and youth employment offices in Buckinghamshire were 641, 1,399 and 848, respectively.
    Mr. John Hallasked the Minister of Labour the number of employment vacancies registered in Wycombe and the county of Buckinghamshire, respectively, as at the last recorded date, which could not be filled at that date.
    Sir W. Monckton: At 30th June, the number of vacancies remaining unfilled was 1,050 for the High Wycombe Employment Exchange and Youth Employment Office, and 4,481 for all employment exchanges and youth employment offices in Buckinghamshire.

  NATIONAL SERVICE
  Mr. Keenanasked the Minister of Labour the total number of those medically rejected for National Service after being called up, and those called up after deferment, for 1948, 1949, 1950, 1951, 1952 and 1953, figures for each category being shown separately.
  Sir W. Monckton: As the answer contains a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
  Mr. Keenan: I thank the right hon. and learned Gentleman for his effort to satisfy me in this matter. Do the figures

  2331
  indicate what I have been seeking to ascertain, namely, the numbers of those who are medically rejected after deferment? Will the Minister consider the point that medical examination might always be carried out when a person is eligible for call-up, and so avoid difficulties that emerge later?
  Sir W. Monckton: If I may first deal with the second part of the hon. Gentleman's supplementary question, it would be difficult to arrange that conveniently because deferment might cover a number of years and it would certainly be necessary to examine persons again if that was so done. In reply to the first part of the hon. Member's supplementary question, I would point out that it is difficult to explain, by the table of figures which I have given in answer to his Question, the fundamental point, which is that if one takes the class of a particular year, one has to go through the whole period during which that class would be liable for call-up in order to satisfy oneself whether people are really escaping, which is what the hon. Gentleman wants to know. I have written to the hon. Member explaining how that can be shown.
  Following is the table:

  Year

  Number of men rejected on medical grounds

  Estimated number of men who had been deferred and were called up in year

  (1)

  (2)

  (3)

  1948

  …

  27,750

  22,000

  1949

  …

  36,370

  44,000

  1950

  …

  47,314

  62,000

  1951

  …

  43,856

  57,000

  1952

  …

  42,829

  54,000

  1953

  …

  42,112

  62,000

  COST OF LIVING
  Mr. Leatherasked the Minister of Labour to publish a comparison of the trends in the wages index and the cost-of-living index from June, 1947, up to the latest available date.
  Sir W. Monckton: As the answer is in tabular form I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Leather: While I appreciate that the figures may be somewhat lengthy,
  2332
  may I ask the Minister what is the increase in the respective figures since this Government came to power?
  Sir W. Monckton: I am not sure that I could give that figure exactly, but I would say that the comparison between the Rates of Wages Index and the Retail Prices Index is that they started with the wages index below and they are now approximately the same
  Following is the table:

  Period

  Rates of Wages Index

  Retail Prices Index

  June, 1947

  100

  100

  Average of:

  July-December, 1947

  102

  102

  1948

  106

  108

  1949

  109

  111

  1950

  111

  114

  1951

  120

  125

  1952

  130

  136

  1953

  136

  140

  January-May, 1954

  140

  141

  May, 1954

  142

  141

  Mr. G. Darlingasked the Minister of Labour to what extent the Retail Prices Index has been influenced by the high prices for fresh vegetables in May and June.
  Sir W. Monckton: The index figures for June are not yet available. In mid-May, apart from a small rise in the prices of potatoes, vegetable prices were generally no higher than in mid-April and they did not therefore induce any upward movement of the index figure for May. Between mid-March and mid-April, however, seasonable increases in the prices of fresh vegetables had raised the all items figure of the retail prices index by nearly one-half of a point.
  Mr. Darling: Is the right hon. and learned Gentleman satisfied that the index correctly measures the changes in the cost of living? Surely the present abnormally high prices for fresh vegetables should make a greater difference to the index than he had indicated.
  Sir W. Monckton: I do not think that there is any inaccuracy. In the Ministry of Labour Gazette we point out from time to time any changes of this sort which occur, and they can be differentiated from the whole index

  2333
  figures. I can show the hon. Gentleman relevant extracts from the Gazette, if it will assist him.

  MINISTRY OF HEALTH

    Mental Patients
    Sir G. Lloydasked the Minister of Health in what circumstances patients in mental hospitals are allowed to take up paid outside work; and, when they do so, what contribution they pay towards the cost of keeping them in hospital.
    The Minister of Health (Mr. Iain Macleod): The patients concerned are those who have reached a stage at which employment in paid occupations outside the hospital is possible and likely to aid progress towards recovery. The amounts paid by such patients as a contribution towards the cost of maintenance in hospital vary according to earnings, but the maximum amount recoverable is £2 15s. a week.
    Mr. Manuel: What precautions are taken to see that mental defectives employed outside the institutions get the proper rate for the job?
    Mr. Macleod: It is the responsibility of the medical superintendent of the hospital to make individual arrangements.
    Mr. Hector Hughesasked the Minister of Health if he is aware that many local authorities are reluctant to allow homes for the after-care of mental patients to be set up in their areas; and what is the policy of his Department in this matter.
    The Parliamentary Secretary to the Ministry of Health (Miss Patricia Hornsby-Smith): No case of this kind has been brought to my right hon. Friend's attention. He would hope and expect that local authorities would deal with such proposals in the same way as they treat other kinds of convalescent accommodation.
    Mr. Hughes: Will the hon. Lady take it from me that many of the people who have the misfortune to be afflicted suffer the terrible penalty of being treated as "untouchables" in regard to employment and social contact? Will he try to rescue them from that terrible fate?
    Miss Hornsby-Smith: I think that the hon. and learned Member is referring to a different matter when he mentions employability.
    Mr. Shinwell: May I ask the hon. Lady what is represented by the flowers she is wearing?
    Hon. Members: Answer.
    Mr. Speaker: Order. That is a matter which does not fall within the administrative responsibility of the hon. Lady.
    Mr. Hector Hughesasked the Minister of Health how many homes for the after-care of mental patients exist in England and Wales; where they are situated; what their accommodation is; how many patients they contain; and of what categories.
    Miss Hornsby-Smith: Precise information on all these points is not available. The Mental After-Care Association provides directly or indirectly 23 homes in Kent, Surrey, Sussex, Suffolk and Northamptonshire, with accommodation for 524 patients and 463 at present in residence. Two homes are reserved for short-term cases; the remainder provide for long-term cases and for patients on holiday from mental hospitals. The Ex-Servicemen's Welfare Association provides two homes for 50 patients in all.
    Mr. Hughes: While thanking the hon. Lady for that reply, may I ask whether she would put me under a further obligation by telling me how those figures compare with the corresponding figures for Scotland?
    Miss Hornsby-Smith: That is not within the purview of my Department.

    Mental Defectives, Durham (Accommodation)
    Mr. Shinwellasked the Minister of Health the number of mentally defective persons for whom application has been made for admission to suitable institutions in the county of Durham and for whom no accommodation is at present available.
    Mr. Iain Macleod: One hundred and sixty-one.
    Mr. Shinwell: Is not this a somewhat alarming figure and does not it disquiet the right hon. Gentleman? Is he aware

    2335
    that among these cases are several of young persons? Will he hurry up the provision of accommodation for them?
    Mr. Macleod: All waiting list figures disquiet me, and it is true that these are perhaps the worst of all. We are doing what we can. Since the appointed day there have been 550 new beds provided in the region and there is a scheme in hand for a further 200 beds, so that about 750 extra beds have been provided since the appointed day. The problem still remains, but, as I say, we are doing what we can.
    Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that mental defectives are having to be sent to prison because there is no room available for them in mental hospitals? Will he look at an answer given by his right hon. and learned Friend the Home Secretary today on this subject which "passes the buck" to the Minister of Health?
    Mr. Macleod: Yes, Sir, I have seen that, and I am in communication with my right hon. and learned Friend on the matter.

    Children in Hospital (Parents' Visits)
    Mrs. Jegerasked the Minister of Health with whom authority rests to determine the frequency of visiting by parents to children in hospitals under the National Health Service; and what difference is made in the rules in such hospitals if the children are in pay beds.
    Mr. Iain Macleod: Visiting arrangements, for both National Health Service and private patients, are the responsibility of hospital management committees and boards of governors.
    Mrs. Jeger: Has the Minister followed the correspondence which appeared recently in the "Manchester Guardian" on this subject, and which indicates that while there has been a wide welcome to the lead given by his Department there are still many hospitals which adopt a very unhelpful attitude towards parents in this situation? Can he tell the House whether or not he is quite powerless to help?
    Mr. Macleod: I have issued a circular which has been welcomed, and I am following it up. But there are many cases
    2336
    of special circumstances in the hospitals—for example, infectious diseases hospitals—which make it difficult for those responsible for the running of the hospitals to do as much as I, and I have no doubt, as they would like to do to allow parents to see their children.

    Smoking (Lung Cancer)
    Mr. Gowerasked the Minister of Health what information has been gained by officers of his Department about investigations in other countries into the relationship between smoking and cancer of the lung; and what steps he is taking to make this information available in the United Kingdom.
    Mr. Iain Macleod: Officers of my Department and of the Medical Research Council have been in close touch with investigations into this question in other countries, all of which have been or will be published in the medical and scientific Press and are freely available to persons concerned.
    Mr. Gower: Will my right hon. Friend do all that is possible in this matter? Will he bear in mind that there are thousands of smokers who are anxious to know that cancer of the lung is not caused by smoking, and that there are few topics about which so many people are seriously worried?
    Mr. Macleod: I recognise the great public interest in this matter, but I have no intention of speculating in advance of proof.
    Mr. Bottomley: Is not it a fact that cancer of the lung is the most serious of all the cancerous growths, and does not an increase in the disease coincide with heavy smoking by women, particularly since 1925?

    Maternity Home Fire, Reading (Report)
    Mr. F. M. Bennettasked the Minister of Health whether he is yet in a position to publish the result of his inquiry into the recent Dellwood Maternity Home fire, in Reading.
    Mr. Iain Macleod: I have given most careful consideration to the report of the Regional Hospital Board Committee of Inquiry into the fire and I am satisfied that it has covered very thoroughly all

    2337
    aspects of this most tragic and unfortunate disaster. The report is now available to hon. Members in the Library and copies will be supplied to parties directly interested on request to my Department.
    Looking back on tragic events of this nature it is always possible to have second thoughts, but I consider that the action taken by the hospital authorities both in the provision of the accommodation and in the matter of medical and nursing supervision was reasonable, and that there was no negligence or breach of duty on their part. The steps taken for the rescue and subsequent treatment of the babies were, in my view, in accord with the highest traditions of the hospital service.
    My Department is preparing advice to hospital authorities on fire precautions generally and I will see that this takes account of the lessons to be learned. I also understand that my right hon. Friend the Minister of Housing and Local Government is considering possible strengthening of the relevant building byelaws.
    Mr. Bennett: While agreeing that no monetary grant can possibly compensate parents in their tragic loss, may I ask whether my right hon. Friend can say that irrespective of the question of strict legal liability he is prepared sympathetically to consider ex gratia grants to those concerned?
    Mr. Macleod: On the question of compensation, as I have said, in my view death was not caused by neglect or breach of duty, but was due to misadventure, and that was the verdict of the coroner. Nevertheless, I am sure that if there are cases where particular circumstances are involved the hospital management committee will be very glad to look at them as sympathetically as they can.
    Mr. Bennett: May I thank my right hon. Friend for that generally sympathetic answer and ask him whether he can say that, in effect, his words mean that each case will be judged individually and sympathetically?
    Mr. Macleod
    Dr. Summerskill: Can the right hon. Gentleman say how often this hospital has been inspected?
    Mr. Macleod: It is inspected regularly. In fact, it has one of the very finest records in the whole of the country in regard to the number of deaths, both maternal and infant, that have taken place.

    Elderly Married People (Homes)
    Mr. H. Johnsonasked the Minister of Health (1) whether he is satisfied that adequate powers are possessed and adequate provision made by local authorities for homes for aged and infirm married couples;
    (2) whether he will send a circular to local authorities calling attention to the desirability of publicising the existence of homes for elderly married people where they are allowed to live together.
    Miss Hornsby-Smith: County and county borough councils have all the necessary powers under Part III of the National Assistance Act and my right hon. Friend is satisfied that the proportion of accommodation for old people provided for elderly and infirm married couples is normally reasonable. Before approving proposals for the construction of residential accommodation for elderly people in need of care and attention, care is taken to ensure that a number of double bedrooms for married couples are included. Local authorities are well aware of that policy and have undertaken in their schemes for development of the service to make this type of provision.
    Mr. Johnson: Has my hon. Friend's attention been called to the tragedy of Mrs. Lily Dudgeon, who died on the beach at Brighton after sleeping out because she feared that if she went into a local authority residential home she would be separated from her husband, who was an old-age pensioner? Can my hon. Friend confirm that, in fact, the woman was offered accommodation by Brighton Corporation and that any separation would have been only temporary? Does she not think that it would be good to have additional national publicity to dispel this ignorance and to avert any further tragedy of this nature?
    Miss Hornsby-Smith: My right hon. Friend is aware of the tragedy of this case but, in view of the publicity that has been given to it, it is fair to point out that, when this couple were evicted from

    2339
    their accommodation, on the day they made application to the local authority they were offered Part III accommodation, which they declined. It is not always possible immediately on application to find double married accommodation, because that would mean leaving some idle and empty which might be used for priority cases. The couple were told that it was hoped within a reasonable time to give them joint accommodation. They refused the offer of Part III accommodation, and we all regret the tragedy which ensued.
    I hope that the publicity given to the Question and answer will assure those who have criticised the service that the local authorities offered accommodation and proper shelter to this couple.

  MINISTRY OF FOOD (FUTURE)
  Mr. Hurdasked the Prime Minister whether arrangements have now been made to disband the Ministry of Food and transfer the few remaining functions to other Departments.
  The Prime Minister (Sir Winston Churchill): I have nothing to add to what I told my hon. Friend on 6th April.
  Mr. Peart: In view of the uncertainty on meat prices and the uncertainty in the farming community on the policy of the Government towards marketing, will the Prime Minister be very cautious in this matter and not heed the doctrinaire people behind him?
  The Prime Minister: I will certainly heed the injunction of the hon. Gentleman.

  WAR PENSIONS (FREE VOTE)
  Sir I. Fraserasked the Prime Minister if he will make a further statement on war pensions and war widows' pensions; and if the Government will allow a free vote of the House following a debate on this subject.
  The Prime Minister: I am sorry to disappoint my hon. Friend. I cannot add to the Chancellor of the Exchequer's statement on this important subject of 12th April.
  2340
  The answer to the latter part of the Question must be in the negative. It is the duty of the Government to accept responsibility for any action of this character proposed.
  Sir I. Fraser: Will my right hon. Friend ask the Ministers concerned to read the report of the proceedings of the British Legion conference at Whit-sun? Further, is he aware that all the facts in this matter are known and can he say whether the Government will deal with this much-overdue question as soon and as generously as possible?
  The Prime Minister: I am sure that due attention will be paid to the report of the proceedings in question and that any hopeful suggestions which arise will be given effect to in due course.
  Mr. Mikardo: Is the unwillingness of the right hon. Gentleman to allow a free vote in this matter due to the fact that he does not again want to be bullied by some of his hon. Friends into ignoring the findings of the House?

  EUROPEAN DEFENCE COMMUNITY (FRANCE)
  Mr. Edelmanasked the Prime Minister whether, following his discussion with President Eisenhower on South-East Asia and the European Defence Community, he will invite the French Prime Minister to London in order to coordinate British, United States and French policy.
  Mr. Wyattasked the Prime Minister whether he will now invite the French Prime Minister to London to discuss British policy towards the European Defence Community Treaty.
  The Prime Minister: Both before and since the visit of my right hon. Friend the Foreign Secretary to Paris for talks with the French Prime Minister on 20th June, we have maintained the closest contact with the French Government. This contact will, of course, continue. Much though I should welcome a meeting myself with Monsieur Mendès-France, I would not feel justified in pressing him, at the present time, while he has so many urgent problems to occupy him.
  Mr. Edelman: While thanking the Prime Minister for that reply, may I ask him whether it might not be for the general convenience if a personal meeting of that kind could be held before 20th July?
  The Prime Minister: The Foreign Secretary will be meeting M. Mendès-France after Monday at Geneva.
  Mr. Wyatt: Does not the Prime Minister think that, now at last there is a French Government with a Prime Minister who looks like achieving stability—[HON. MEMBERS: "Oh."]—it would be better to talk to him about possible variants of the European Defence Community Treaty rather than to issue a communiqué together with President Eisenhower telling him to do something which he says he cannot do and which the French Parliament will not let him do?
  The Prime Minister: That is a matter of opinion which is not included in the Question on the Order Paper.
  Mr. Noel-Baker: Will the Prime Minister tell the French Prime Minister that in view of his very gallant part in the R.A.F. during the war he will be a very welcome visitor to London when he can afford the time to come?
  The Prime Minister: No doubt his attention will be drawn to the right hon. Gentleman's very apposite question.

  MINISTER OF DEFENCE (VISIT TO WASHINGTON)
  Mr. Wyattasked the Prime Minister the purpose of the projected visit of the Minister of Defence to Washington.
  The Prime Minister: My noble Friend is visiting the United States on the invitation of Mr. Charles Wilson, the United States Secretary of Defence. He will have general discussions with Mr. Wilson and his advisers and will visit a number of establishments at which the latest types of American arms and equipment are being developed. There are also military and strategic questions on which there will be an interchange of opinion with the highest professional authorities in the United States.
  Mr. Wyatt: Does the Prime Minister think that his noble Friend will be more successful than he was in bridging differences with the United States?
  The Prime Minister: Comparisons are odious.

  UNITED STATES AID
  Mr. Donnellyasked the Prime Minister whether he will express the thanks of the British people to the Government of the United States of America for all the financial aid that has been received, and, at the same time, inform the United States Government that, in view of present circumstances, Her Majesty's Government does not propose to accept any more.
  The Prime Minister: I am ready at all times to express the thanks of the British people for the massive aid we and other free countries have received from the United States of America. For the future, most of the aid we expect to receive will be in the form of military equipment. Her Majesty's Government will accept and put to good use this contribution to the common defence of the free world.
  Mr. Donnelly: Does that answer mean that the right hon. Gentleman thinks that, in view of the amounts involved, it would lead to a much better Anglo-American relationship if we did not accept the financial aid which is given in financial form for military equipment usually manufactured here? Can he say why it is essential for us to have what is not a vast amount which is involved at present?
  The Prime Minister: It is well known that this country bore an altogether unique and exceptional strain on its economy by the exertion which it made in the late war during a large portion of which its people were the sole defenders of the cause of freedom. I have not, therefore, at any time felt ashamed to receive aid from loyal allies and friends devoted to purposes in which their interests are as keen as ours.
  Mr. Pannell: Does not the right hon. Gentleman remember that during the period of office of the Labour Government he sneeringly referred to American aid as charity?
  The Prime Minister: It has that aspect, but I think that that does not necessarily detract from its usefulness or welcome character.
  Mr. H. Morrison: Are we then to take it that if a Labour Government receives American aid—which we and, I think, the country appreciated—that is charity, but if a Tory Government receives American aid it is an expression of good will between the two countries?
  The Prime Minister: The right hon. Gentleman is evidently endeavouring to pick a quarrel.

  PRIME MINISTER (APPOINTMENT OF SUCCESSOR)
  Mr. Pagetasked the Prime Minister if he will introduce legislation to amend the constitution by authorising the Prime Minister to appoint his successor.
  The Prime Minister: No, Sir. This is a prerogative of the Crown. It is for the Sovereign to decide whether to ask the opinion of the first Minister of the Crown about the choice of his successor and whether to act in accordance with that opinion. No legislation is needed.
  Mr. Paget: In that case, will the Prime Minister tell us by what authority he announced in the United States that the Foreign Secretary would be his successor? Did not that announcement infringe not only the Prerogative of the Crown, but also the prerogative of the 1922 Committee?
  The Prime Minister: The hon. and learned Gentleman is endeavouring to be offensive all round. I certainly do not recall ever having said anything of the kind. I have always held the opposite view very strongly. If the hon. and learned Gentleman will send me that quotation, I will look into it; I may well have been misreported. I certainly should not presume to commit such a constitutional error as that.
  Mr. A. Henderson: Is the right hon. Gentleman aware that the Labour Party would prefer their own leader should be the Prime Minister after the next General Election?
  Hon. Members: Which one?

BUSINESS OF THE HOUSE
Mr. Attlee: May I ask the Leader of the House to state the business for next week?
The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:
MONDAY, 12TH JULY—Report stage of the Address relating to the Gift of a Mace to the Federation of Rhodesia and Nyasaland.
Third Reading: Finance Bill, which it is hoped to obtain by about 7 o'clock;
Report and Third Reading: Electricity Reorganisation (Scotland) Bill.
Committee and remaining stages: Summary Jurisdiction (Scotland) Bill [Lords], which is a consolidation Measure.
Committee stage: Army and Air Expenditure, 1952–53; and
Greenwich Hospital and Travers' Foundation.
Lieut.-Colonel Lipton: Is that all?
Mr. Crookshank: If hon. Members study the business in further detail, they will find that it is not very oppressive.
TUESDAY, 13TH JULY—Report and Third Reading: Town and Country Planning Bill.
WEDNESDAY, 14TH JULY—Supply [21St Allotted Day] Committee:
Debate on Foreign Affairs.
Report and Third Reading: Transport Charges, &c. (Miscellaneous Provisions) Bill.
THURSDAY, 15TH JULY—Supply [22nd Allotted Day] Committee:
Debate on Industry and Employment in Scotland.
FRIDAY, 16TH JULY—Second Reading: Isle of Man (Customs) Bill.
Committee and remaining stages: Gas and Electricity (Borrowing Powers) Bill.
Further consideration: Pests Bill [Lords].
Report and Third Reading: Charitable Trusts (Validation) Bill [Lords].
It may be convenient if I inform the House that a debate will take place on Crichel Down during the week after next—probably on Tuesday, 20th July.
Mr. Woodburn: With regard to the Scottish business next Thursday, since there is to be a continuing debate for two days, will the Government arrange as far as possible to have the following Supply Day as near as they can to the one on Thursday?
Mr. Crookshank: I can only note what the right hon. Gentleman says.
Mr. T. Brown: Will the Government find time to discuss the Motion relating to the social and economic conditions of the old-age pensioners, which has been on the Order Paper for some time?
[That this House, having regard to the increased cost of living in the basic essentials of life, agrees that a substantial increase in old-age pensions is most urgent and necessary.]
Mr. Crookshank: I am afraid that I have no time to offer for that purpose.
Mr. Ellis Smith: In view of the worldwide interest aroused by the visit of the Prime Minister and the Foreign Secretary to Washington and the important statement which the Prime Minister is to make on Monday, would it not have been advisable to have had the statement debated so that the opinions of the British people could have been reflected in this House by their elected representatives when the statement was made?
Mr. Crookshank: I am not quite clear what the hon. Gentleman has in mind, but I did say that there will be a debate on foreign affairs on Wednesday, which may suit him.
Mr. Blenkinsop: In view of the "small" amount of business announced for Monday, would is not be possible to squeeze in the Food and Drugs Bill?
Mr. Crookshank: I think that the amount of business for Monday looks longer and more complicated than it will probably turn out to be. The Government hope to be able to find time for the Second Reading of that Bill before we rise for the Summer Recess.
Mr. Edward Evans: Might I ask you a question on business, Mr. Speaker, and that is whether you have yet decided the fate of the Ministers of the Crown (Fisheries) Bill, which had its Second Reading on 25th June and in respect of which you said last week that you would give us a decision this week?
Mr. Speaker: I intend to make a statement about it today after the Prime Minister has made a statement on another matter.
Dr. King: Is the Leader of the House aware that it is now some months since the House unanimously requested the Government to do something for pensioners and others living on fixed incomes? Will he not bring before the House before the end of this month some proposals of the Government to meet the unanimous request of the House?
Mr. Crookshank: I am afraid that that is another matter.
Mr. Harold Davies: In view of the vital importance of the results of the visit of the Prime Minister and the Foreign Secretary to Washington, does not the Leader of the House think that we ought to have a two-day debate, as it will be three months before we meet again and in the interim vital and far-reaching decisions may be made?
Mr. Crookshank: That does not rest with me. There are Supply Days. One of the Supply Days has been chosen by the Opposition for this purpose. If they want other days for it, no doubt they will themselves suggest it.
Mr. Bing: Does not the right hon. Gentleman consider foreign affairs to be of sufficient importance for the Government to give a day of their time to it?
Mr. Crookshank: The fact is that we are rapidly approaching the end of July, and therefore the number of Government days is strictly limited—unless there are suggestions that we should sit into August and possibly into September.

MEMBERS' EXPENSES (SESSIONAL ALLOWANCE)
The Prime Minister: With your permission, Mr. Speaker, I will make a statement on the same topic as I mentioned to the House a fortnight ago today.
The Government have already recognised the financial difficulties in which many hon. Members find themselves. Those difficulties are unusual because they arise largely out of the nature of a Member's duties, which require him to expend substantial sums in their discharge—sums which, if expended in any other employment, would properly be reimbursed by the employer. In most cases, no doubt, the most important item is subsistence—the extra costs of living which are incurred by attendance at Westminster. For most hon. Members this means not only being obliged to take many more meals away from home than most other people, but incurring also the much more significant cost of residence in two places.
Having examined the precedents in Commonwealth Legislatures and overseas, the Government have decided that the most equitable and practical way of meeting this situation is by the institution of a sessional allowance. This will be payable to those Members who choose to draw it at a rate of £2 for every day (other than a Friday) on which the House sits. It can be drawn monthly or at such other times as may be arranged to suit the convenience of individual Members. A Supplementary Estimate will be laid as soon as possible.
This allowance will constitute a cash reimbursement, related to the actual sittings at Westminster, of the subsistence and other expenditure which Members are obliged to incur. Members will still remain eligible under the existing law for relief from Income Tax on their salaries (as distinct from the new allowance) in respect of expenses "wholly, necessarily and exclusively" incurred in the performance of their duties. They will continue under their existing obligation to justify to the Inland Revenue authorities their claims in respect of their total expenses. The justification to the Revenue will therefore include those expenses in respect of which they draw the sessional allowance. The sum drawn in the form of the new allowance will be deducted
2348
by the Inland Revenue from the total expenses on which the Member would otherwise be entitled to claim relief.
The allowance will not be drawn by Ministers or by the Officers of the House.
Mr. Attlee: The Prime Minister will realise that hon. Members on this side of the House consider that the arguments advanced by the Select Committee appointed by the House in favour of a straight increase of salary are still valid, and that the Committee examined various alternatives. We also believe that it is right that, where there is a matter concerning the House of Commons which is decided by a majority of the House of Commons, the Government of the day should implement that decision. The present proposal undoubtedly will assist some Members, and, so far as that is concerned, it does relieve what I think bears a good deal of weight in the minds of hon. Members who do not like to feel that their colleagues in the House are suffering.
I should like to ask the Prime Minister as from what date this proposal will come into force. I would finally say that, although it does something, I do not think that the line that has been taken is really in accord with the dignity and authority of this House, and I am quite sure that the right hon. Gentleman, in his visit overseas, has seen a curious comparison in the treatment of Members of other Legislatures, who I do not think work harder than hon. Members here.
Mr. C. Davies: May I ask the Prime Minister whether a further and full opportunity will be given to this House to debate the Government's proposal, for the reason that the Government have now decided to ignore, and in fact to flout, the opinion of a substantial majority of this House, after inviting the opinion of the House as to what should be the correct attitude to be adopted by the Government?
The Prime Minister: I think it would be better to get this settled at once, without prolonging the present severe conditions in order to have a further debate upon a matter which has been most thoroughly examined, not only in the Chamber, but in the minds of bon. Members and indeed throughout the country. [HON. MEMBERS: "Date?"]

2349
Further discussions will take place through the usual channels about the date.
Mr. Lee: Is the Prime Minister aware that even the most rigorous of religious bodies does not make every Friday a fasting day, and why should Members of Parliament?
The Prime Minister: It is not thought that the special conditions which constitute a heavy expense to Members operate as fully on Fridays as on other days.
Mr. Mellish: Is the right hon. Gentleman aware that, although some of my hon. Friends and I fast on Fridays, even so, we still eat?

PRIVATE MEMBERS' BILLS (WITHDRAWAL)
Mr. Speaker: I have a short statement to make in answer to a question put to me by the hon. Member for Lowestoft (Mr. Edward Evans).
I was asked at this time last Thursday a number of questions concerning the withdrawal of the Ministers of the Crown (Fisheries) Bill, and I promised to look further into the points raised. Having done so, I find that what I then said was a correct statement of the practice of the House.
A Public Bill presented or introduced by a Private Member remains in the charge of that Member, and he retains over it certain rights not possessed by any other Member. The Manual of Procedure, in paragraph 224, states that:
"A Bill other than a Lords' Bill may also be withdrawn by notice given at the Table before the day on which the Bill stands as an Order of the Day."
I find that, from 1932 to 1939, five Private Members' Bills were so withdrawn by the Members in charge of them, after they had been read a Second time and committed to a Standing Committee. In four of these cases, the Bills had been allocated to a particular Standing Committee. In one, as in this case, the Bill had not been so allocated. The most recent example I can find was in January, 1953, when the hon. Lady the Member for Lanarkshire, North (Miss Herbison) withdrew the Foundry Workers (Health and Safety) Bill after the Bill had been read a Second time and allocated to a Standing Committee.
It is therefore clear that the withdrawal of the Ministers of the Crown (Fisheries)
2350
Bill was in accordance with the practice of the House.
Mr. Edward Evans: May I thank you, Mr. Speaker, for that considered judgment. In view of the fact that the hon. Member who introduced this Bill canvassed the support of Members on all sides, which was very readily accorded to him, but took no opportunity to consult with them when, having supported him right through the Second Reading of that Bill, he took it upon himself to withdraw it, is not that against the tradition of courtesy between Members on both sides of this Chamber?
Mr. Speaker: I am afraid that those circumstances do not affect the points of procedure and practice to which I have given some attention.
Mr. Bing: Further to that point of order. Perhaps it would be possible for you, Mr. Speaker, to express some opinion on this matter. The five Bills which you cited, I think I am right in saying, were Bills which were debated in this House for only a short time, and this was a Measure which occupied the whole of a Friday. It does seem unfortunate that one hon. Member, after a long debate on the Bill, when he was refused permission to withdraw and when the Bill had received a unanimous Second Reading from the House, should be in a position to do what the House had refused him permission to do. Surely there would be considerable public difficulty if the Chancellor of the Exchequer, abandoning his position, were to withdraw the Finance Bill? We cannot possibly exclude these possibilities.
In these circumstances, I hope it will be possible for you to express the view that it is undesirable that an hon. Member should introduce a Bill, occupy a whole day with it and then be able to withdraw it without the permission of the House.
Mr. Speaker: That is not a point of order. It does not affect the position of the hon. Member in question as the Member in charge of the Bill.
Mr. Hector Hughes: Further to that point of order. Where is the line to be drawn between one Bill and another—for example, between a Private Member's Bill and the Finance Bill? [Interruption.] Does this not put hon. Members and the House into a difficulty when, after

2351
discussing the Measure—[Interruption]—it is withdrawn, whether it is a Private Member's Bill or the Finance Bill?
Mr. Speaker: I find it hard to give a coherent answer to the hon. and learned Gentleman's question, or to so much of it as I heard distinctly.
Mr. I. O. Thomas: Could you indicate to the House, Mr. Speaker, for its future guidance, at what stage in the proceedings on a Bill the House acquires complete possession of it?
Mr. Speaker: The House has possession of the Bill when the Bill is before it and the House is discussing it.
Mr. Pannell: On a point of order. Your predecessor once said that it was reasonable that the House should allow an hon. Member to speak, so that you could hear what the hon. Member was saying. Can you state that you heard what my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) said?
Mr. Speaker: I heard sufficient of it to guess its general tenor. If it concerned itself to some extent with the contingency of the Chancellor of the Exchequer withdrawing the Finance Bill, that is a hypothetical circumstance.
Mr. Hector Hughes: Further to that point of order. You could not have heard correctly what I said, Mr. Speaker. I spoke distinctly, but there was such a noise in the House when I was putting my question that it must have been difficult for you to hear it. It was quite other than what you apparently thought it was. My question was: Where is the line to be drawn between one Bill and another? When an hon. Member introduces a Bill and invites the House to discuss it for a whole day, presumably the House has some possession or power over the Bill, some power of decision whether the Bill should go on or not. Es there any difference in kind between the Finance Bill, on the one hand, and this Private Member's Bill, on the other hand?
Mr. Speaker: I have stated the practice of the House in this matter. I have expressed no opinion on the merits of the action of individual Members in withdrawing or not withdrawing Bills. That does not fall within my province at all.
Mr. Edward Evans: Would it be competent for me to re-introduce the Bill at any time?
Mr. Speaker: Yes. The Motion which the hon. Member sought to withdraw was, "That the Bill be now read a Second time." The hon. Member could introduce it again. The Bill is now withdrawn, put out of existence, but it can be reintroduced.
Mr. I. O. Thomas: I hope that I am mistaken, Mr. Speaker, in thinking that you did not grasp completely the point I was putting. My question was: At what stage in the proceedings on a Private Member's Bill does it become the complete property of this House, when the House has authority to determine that the Private Member cannot withdraw it? Your answer was that it remained the property of this House. [HON. MEMBERS: "No."] In that case, it would appear to contradict the practice of this House that the Bill has been withdrawn. Therefore, I again put the question to you: At what stage in the proceedings on a Bill does it become the complete property of this House, and the Private Member's right to withdraw the Bill is terminated?
Mr. Speaker: The answer I gave to the hon. Member was, I think, sufficient. The Bill is the property of the House when the Bill is before the House for discussion. Between stages, as the precedents show, the hon. Member in charge of the Bill can withdraw it.

BUSINESS OF THE HOUSE
Motion made, and Question proposed,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House)."—[Mr. R. A. Butler.]
Mr. Mikardo: On a point of order, Mr. Speaker. Which hon. or right hon. Gentlemen moved this Motion?
Mr. Speaker: The Chancellor of the Exchequer.
Question put, and agreed to.

SCOTTISH ESTIMATES
Committee of Supply discharged from considering the Estimate set out hereunder and the said Estimate referred to the Scottish Standing Committee:
Class VIII, Vote 12, Department of Agriculture for Scotland.—[Mr. Crookshank.]

ORDERS OF THE DAY
  FINANCE BILL
  As amended (in Committee and on recommittal), further considered.
  FINANCE BILL

    Clause 16.—(NEW PROVISION FOR "INVESTMENT ALLOWANCES.")
    3.58 p.m.
    Mr. Hugh GaitskellI beg to move, in page 11, line 19, to leave out "instead of," and to insert "in addition to."
    We make no apology for returning to this important Clause on investment allowances. The Amendment I am moving was discussed in the Committee as one of a number of Amendments put down by my hon. and right hon. Friends. We have selected this particular one as, on the whole, the most attractive of the various alternatives which we put to the Government in Committee.
    The purpose of the Amendment is to allow the initial allowance to continue in addition to the investment allowance in the case of industrial building. The Chancellor of the Exchequer gave us an undertaking in Committee that he would look at the whole question of allowances for industrial building between the Committee and the Report stages. He said:
    "I may be of the same opinion on Report, but as this is a point on which we wish to keep the goodwill of industry and get an improvement in investment, I will give the undertaking to look at all the speeches and all the Amendments again before the Report stage."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2035.]
    We had hoped that, as a result of that examination, the Chancellor of the Exchequer would have felt able to put down a Government Amendment to meet us on the point that we are making, but as he has not done so we are once again arguing that some change should be made in the Bill as regards allowances for industrial building.
    I do not need to go over the argument at great length but, briefly, this is our case. We believe that it is right that industrial building should be stimulated. I should like particularly to refer to the, not one but several, speeches of my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes), who has stressed the great importance to industry of being given some encouragement in this direction. He has gone into this matter in
    2354
    detail and has made a number of suggestions, including, for instance, that there should be greater standardisation of types of factories for particular purposes. I understand that his suggestions have been very well received in industry generally.
    4.0 p.m.
    Therefore, I say that industrial building should be encouraged. I do not think that the Government are at odds with us in that. It is true that the Chancellor of the Exchequer said in Committee that the Government gave priority, as it were, to investments in plant and machinery, but he certainly also wished to stimulate industrial building.
    The question then arises as to how an increase in industrial building is possible on physical grounds. Obviously, if the Government had been able to show that in present circumstances there was really no possibility of additional building resources being made available for industrial building, that would have been a good argument against providing any further stimulus: but that is not the position according to the Chancellor of the Exchequer. This is what the right hon. Gentleman said on 16th June:
    "The right hon. Gentleman asked whether industrial building was living up to its resources or whether there was any slack. Unfortunately there is more slack in the building industry than in other industrial sectors. It is possible and important that this sector of the building industry, namely, industrial building, should come to the front whether there is slack or not. It is important to encourage it for the sake of industrial output, While I am not acknowledging that there is much slack in the building industry"—
    that was slightly contradictory to what the right hon. Gentleman had said before—
    "I say that this is a priority and that in any case the matter is important."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2032–3.]
    It is quite evident, therefore, that, so far as physical capacity is concerned, the Chancellor is satisfied that it is available.
    The next question is whether the provisions of the Bill are designed or are likely to encourage industrial building. I do not think that now there can be any doubt about what the effects of the change-over from investment allowances to initial allowances amount to. We have stressed continually from this side of the House and in Committee that the change from initial allowance to investment allowance leaves the industrialist

    2355
    who wishes to build, as before, with the 10 per cent. allowance in the first year. In the case of the investment allowance, all that it does is to add an extra five years at 2 per cent. from the forty-fifth to the fiftieth years of the life of the building. I cannot see how anybody can argue that this small concession, to be enjoyed 45 years hence, is likely to have any significant effect on the willingness of any industrialist to go in for new building.
    I am not criticising the Government wholly for the fact that there is so little stimulus. There is no doubt that the law as it stands has, in recent years certainly, given greater encouragement to the purchase of plant and equipment than to industrial building. I said in Committee that there were good reasons for that because of the tightness of the building industry and the scarcity of resources which was natural after the war. But whatever the reason may be, there is an enormous difference in the kind of encouragement which the investment allowance gives to introduce new plant and machinery, not only because it is a higher rate—20 per cent.—but also because of the way in which the depreciation is calculated, on a steadily reducing basis, and because the rate of life of the plant and machinery is so much shorter.
    Therefore, there can be no doubt that there is this difference between the encouragement given by the investment allowance as it now stands to industrial building, on the one side, and to the introduction of plant and machinery, on the other side. The series of Amendments that we moved last time were designed to correct that. We were encouraged by what the Chancellor had to say on this subject during Second Reading to put down our Amendments. He made it plain that he recognised that we had a point of considerable substance, and we were very disappointed when he agreed to none of the Amendments during the Committee stage. Now, we return to this particular Amendment, which on the whole we prefer to the others.
    What the Amendment does is to allow the initial allowance to continue so that, in effect, the industrialist who decides to
    2356
    go in for new building is now able to obtain, not only the investment allowance at 10 per cent. in the first year, but also an initial allowance of the same amount of 10 per cent. Against that, he would lose the last five years of the capital allowance, which he would receive under the Bill as it now stands. In other words, the industrialist gets the writing off in the first year—the full 10 per cent.—instead of the 2 per cent. in each of the years between the forty-fifth and the fiftieth years. I do not think there can be much doubt that that is bound to be much more attractive as a proposition to any industrialist who contemplates new building.
    When we put this proposal forward among the other alternatives in Committee, we had no adequate answer whatever from the Government. All that the Chancellor said was:
    "I do not like the second alternative of reintroducing the initial allowances."
    The reason he did not like it was never disclosed. The Financial Secretary had given a rather more elaborate but equally unconvincing explanation why the Government would not accept it. Speaking of the method of having the initial allowance and investment allowance both applying, the Financial Secretary said:
    "It would be a somewhat complicated and cumbersome method which would involve those engaged in industry in a great deal of trouble and, as my right hon. Friend explained at an earlier stage, it is one of the main purposes of this Clause to substitute the investment for the initial allowance over a very large part of the field in which the initial allowance is at present operating."—[OFFICIAL REPORT, 16th June, 1954; Vol. 528, c. 2034, 2021]
    The second part of that explanation was merely to repeat that it was the purpose of the Clause to replace the one allowance for the other, but it was not an explanation why that should be done. As for the argument that this proposal is a "somewhat complicated and cumbersome method," I do not think the right hon. Gentleman can have meant that seriously. As compared with the complexities of capital allowances generally in relation to taxation, this is certainly a minor matter. The right hon. Gentleman would agree that it is not very difficult to calculate the extra 10 per cent. that would be allowed in the first year in place of the 2 per cent. between the forty-fifth and fiftieth years. We cannot accept that

    2357
    as a serious explanation of the Government's refusal to accept the Amendment. It is, in fact, insulting both to the Inland Revenue and to industrialists to suppose that they could not possibly work the system or that there was any particular difficulty about it.
    The only other argument that has been used is that of cost. The cost, we are told, in the first year would be £4 million and in the second and some subsequent years £7 million. But since this is a case of reintroducing the initial allowance, that, at any rate, is something which in theory, at least, is ultimately repayable to the Treasury. In other words, there would be a reduction, as I have said, in the extent to which the industrialists could write off the buildings a long time ahead. It is arguable that by then some other new buildings would be being built and, therefore, that the Treasury would always be out of pocket. But the Government themselves accept this distinction between initial allowances and investment allowances—and I do not want to go into that argument any more—so they cannot argue very seriously that this is an exceptionally heavy expense.
    If the Government still press that argument, I would very strongly stress two points. First, I do not think that in terms of inflationary pressure there will be any danger of the increased expenditure here giving rise to anything that we really need worry about. As I have argued previously it would be offset by an increase in undistributed profits—in corporate saving. I think that there need be no anxiety on that account.
    Secondly, if we are right in this—and I think that we have good reason to believe that we are—to the extent that the initial allowance does stimulate a little more industrial building it will be abundantly worth while. It will be just as worth while as the increase in investment in plant and machinery which it is the object of the 20 per cent. allowance to bring about.
    We feel that up to now we have had no satisfactory answer whatever to this particular proposal. We think that the Government have simply paid lip-service—and only lip-service—to the very legitimate complaint that, as this now stands in law and as it is in the Bill, industrial building simply will not get the encouragement that it ought to get. I hope
    2358
    that even at this very late stage the Government will change their minds. This is a simple Amendment. There can be no argument as to drafting; there would be no difficulty in the Government accepting it on those grounds. I very much hope they will see their way to do this.
    Mr. Anthony Crosland: I have never been able to understand why, if the Chancellor wants to hurry the Finance Bill through, he does not offer a substantial monetary bribe to those of us on the back benches always to persuade our right hon. Friend the Member for Leeds, South (Mr. Gaitskell) to open the debates. He does so in such an admirable manner that there is very little left to be said by those of us who previously thought of intervening. I shall therefore speak only briefly to underline one or two of his remarks.
    Like him, I was both surprised an disappointed that no Amendment was put on the Order Paper by the Chancellor himself, in view not only of his encouraging hints during the Second Reading debate but of the course the debate took in Committee. I think no detached and fair-minded observer who listened to our debates on the various Amendments on industrial building which we put down in Committee could possibly have denied that the Government had very much the worse of those debates. An extremely strong case was made out from these benches.
    The Financial Secretary's reply was so inadequate that the Chancellor was compelled to intervene half an hour later, and his own speech was neither thorough nor very convincing. From the extent to which our arguments prevailed, and from the Chancellor's own words, I think that everyone in the Committee was left with the impression that something would be done between that stage and the Report stage. It was therefore disappointing, to say the least, to see the Order Paper empty of any Government proposal.
    So far as I know, the position is not in dispute at all. Everyone wants more industrial building than we are now getting, not only for the reason which my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) has always stressed, in order to modernise our industrial buildings, but also for the reason that clearly we shall not get an increase

    2359
    in production over the next 10 years with-our expansion of capacity. There is no dispute about that. I imagine that there is little dispute that the present trend in industrial building is not sufficiently upward for anybody to be able to say that the problem is being solved and that we need not do anything to assist.
    4.15 p.m.
    If there is no dispute that we need more industrial building than we are getting under our present taxation system, why do the Government so resolutely refuse to make one of the changes we are urging? It is not as though they can say that in the Finance Bill as presented to the House there is already a large incentive to industrial building. The position, as my right hon. Friend said, is that in this year's Finance Bill there is virtually no new incentive to industrial building of any kind whatever. So it seems a passive attitude for the Government to adopt.
    The pressure for a concession towards industrial building does not merely come from this side of the House. It has been discussed in the financial Press over the last two months and many in the industrial world—and Mr. Chambers very obviously—have pressed for this most strongly. It is not just a party dispute; our attitude has very strong backing from leaders of industry.
    I wonder whether the Economic Secretary realises that the investment allowance Clause as it stands gives to certain industries virtually no help whatsoever. I will take, if I may, an industry in which my hon. and learned Friend the Member for Kettering (Mr. Mitchison), who is not in his place at the moment, is also interested—the boot and shoe industry. The new 20 per cent. allowance on plant and machinery is of no assistance to that industry. It is not one which buys new equipment but, almost entirely rents it from the British United Shoe Machinery Company. The boot and shoe firms therefore get no assistance from the 20 per cent. allowance on plant and machinery and virtually none from the 10 per cent. investment allowance on industrial building, which takes no effect until the 46th year. That industry is wholly unaffected by this Clause. It is an industry which, like the industries to which my hon. Friend the
    2360
    Member for Ashton-under-Lyne has so often referred, badly needs an improvement in its present standard of industrial building.
    As my right hon. Friend pointed out. our Amendment in effect brings forward the 10 per cent. investment allowance from years 46 to 50 to the first year. In other words, if one looks over the whole 50-year period during which the building is written off it does not increase the allowance but brings it forward from right at the end to right at the beginning of that period.
    In Committee we had from the Treasury Bench not one argument against the proposal—none of significance, at least. From the Chancellor we only had this extraordinary phrase. "I do not like it"—a descent from a rational level of argument to a merely petulant level.
    From the Financial Secretary we had the statement that what we proposed was too complicated and cumbersome to be carried through. That is hardly a point to be taken very seriously. All we ask the accountants to do is to add the 10 per cent. investment allowance to the 10 per cent. initial allowance in the case of industrial building, which is not a task of monumental arithmetical difficulty. In the case of industrial building, it surely cannot be beyond the wit of man to put those two together. That is really all we heard against what we are now suggesting in our Amendment.
    The only other point was an historical one made by the Financial Secretary that, under the scheme of initial allowances introduced by the Labour Government, plant and machinery had always had more favourable treatment than had industrial building. Of course, that is the case and it has never been denied. For most of the period plant and machinery drew an initial allowance at double the rate of that for industrial building, and for a brief period it was higher still. This has never been denied.
    Today the position is completely diffent from what it was five years ago. Five years ago these industries were under such strain that we had an elaborate system of building licences which had the effect of keeping building below what it would have been otherwise. The Government pride themselves that in the last few years they have been gradually

    2361
    relaxing the system of building licences. Presumably that means it is their positive objective to encourage a great deal more industrial building. They take the view that the resources are available and that industry should be encouraged to use them. If by relaxing the system the Government are giving industry encouragement, why should they not also give it inducement? Arguments based on the historical pattern of a few years ago are irrelevant in the completely altered conditions of today.
    In Committee the Chancellor said that he agreed that industrial buildings ought to be given a high priority, yet he is not prepared now to do anything about it. When he replies, the Economic Secretary must say whether he thinks the investment allowances, considering this change from the years 1946 to 1950, do give any additional inducement over what existed before. If he admits, as I think he is bound to admit, that they do not, is there any meaning at all in all the statements made by the Chancellor that this really important matter should be attended to? I ask the Economic Secretary not to take refuge merely in very detailed calculations and arguments, but to come face to face with this essential point. Does he think investment allowances will be any substantial inducement at all? If not, why on earth does the Chancellor not do as we ask?
    Mr. J. Grimond: I think we are entitled to have from the Government some further explanation of why they resist this Amendment and why they resisted Amendments in a similar strain which were moved in Committee. Apparently there is a considerable change in the outlook of their collective mind between the Second Reading and today. In the Second Reading debate the Chancellor showed that they were very much impressed by the case put by the hon. Member for Ashton-under-Lyne (Mr. Rhodes) and seemed to suggest that he would do something in the direction of giving further inducement to industrial building.
    There are usually two reasons why Governments may resist Amendments of this kind on the Finance Bill. One is because of the cost involved. It has been suggested that the cost in this case would not be more than £7 million and, in the long run, it would be nothing. I cannot
    2362
    help feeling that if there were lost to the Revenue £7 million in the near future which would be compensated by a lesser amount deducted from the Revenue in the far future that would be well worth while for the object we have in mind. Secondly, the Government might urge that the purpose is carried out by the Clause as it stands, but I do not think that can be said seriously. In point of fact there will be practically no inducement to undertake new industrial building if the Clause is left as it is.
    In the Committee debates the Financial Secretary tried to pour a certain amount of oil on troubled waters by saying that everyone was right. In the view of some hon. Members opposite there would be a concrete advantage at once but in the view of hon. Members on this side of the House the advantage would be postponed for nearly 50 years. To paraphrase George Orwell, some were more right than others. There is no doubt that among those who were more right were the people who argued that in point of fact this would not benefit anyone until about 50 years hence. I have a very small personal experience of the effect because I happen to be connected with discussions on whether some new building should be carried out or not. The fact that 50 years hence some advantage may accrue has a very small effect on our minds today. We have to give people something more than that. An advantage to what we might call our lineal descendants is rather too remote.
    It may be that big businesses have planned their capital development and some company chairmen have argued that these investment allowances, while they enable people to keep a certain amount of money, may not have a great effect on capital programmes. I think. however, they will have an effect on the smaller companies. But when we come to the question of buildings, I do not think it sufficient to apply an inducement which will not take effect for 50 years. We want to make these investment allowances effective before that. We want to spur on the Government to have the courage of their convictions. Their convictions are that industry should be encouraged to put more money into building and new machinery, and so on. Can they honestly tell us that this Clause as it stands will be enough? I believe this Amendment would go a long way to tip

    2363
    the balance of those companies considering whether it is worth laying out a certain amount on new buildings or not.
    The point has already been made, and is a very strong one, that the time has been reached at which we should divert resources from house building to factory building. Many people still live in very bad housing conditions, but employment is also extremely important and, looking to the future of those very people, I think the time has come when we must make a change and concentrate to some extent on factory building.
    For all these reasons—which have been argued at length, but not really answered by the Government—I hope the Amendment will be accepted, or that we shall be given some stronger reasons than we have had for rejecting it.
    Mr. Gerald Nabarro: I intervene for one moment because the whole case put by the Opposition today and previously in Committee seems to rest on a premise that there is a need to encourage and stimulate new industrial building and that there is a shortage of industrial buildings. In fact, I can find no evidence at all to support that view. One has only to study the national or provincial Press, any day of the week, to find innumerable factories offered for sale. I am not suggesting that they are always necessarily in the right places or of the right construction, but there is evidently no overall evidence whatever of a pressing shortage of factory space.
    The second point I want to make is in connection with many speeches on this subject by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). He often tells us of the urgent need for reconstruction of 'buildings used in the textile industry. Of course, in a measure, that is true because the textile industry is a very old industry both in the branches of the industry in the hon. Member's constituency and elsewhere in Lancashire and also in the case of another branch of the textile industry, in Kidderminster, which has suffered because many of its buildings are old.
    But I would remind the hon. Member and those of his hon. Friends who support his arguments that an increase in the investment allowance, or a duality of initial and investment allowances such as this Amendment proposes, would not
    2364
    necessarily have the stimulating effect which the hon. Member desires, because a large part of the cost of the reconstruction of old buildings in the textile industry and other industries is reckoned, in any event, as a revenue charge on company accounts. It is not by any means always considered as a capital charge.
    What this Amendment is purporting to do, if anything at all—I challenge whether it would do anything at all in view of the general factory situation—is to encourage the construction of new factories. Not only do I believe the Amendment would be ineffectual because there is evidently no overall shortage of factory space in this country taking into account the normal development going on year by year, but a second consideration which is equally important is that a large part of the normal reconstruction, modernisation and rehabilitation of factories goes on year by year in order to match changes in the machinery, lay-out and improvements in machine tools installed. That type of building reconstruction is often a revenue charge, anyway, and thus would not become the subject of initial or investment allowances, such as the combination proposed in this Amendment.
    Therefore, I am driven to the conclusion—and this is a view similar to that which I expressed in Committee—that no additional fiscal stimulus is needed for new industrial building, and that my right hon. Friend is right in concentrating much greater stimulus in the Bill—it is twice as great—upon plant and machinery.
    4.30 p.m.
    Mr. H. Rhodes: I am not surprised at the remarks made by the hon. Member for Kidderminster (Mr. Nabarro). Such remarks have been made in my part of the world for about 100 years, and that is why the Opposition feel so strongly and are determined to do something about this. Does not the hon. Member realise that we are discussing something which goes a small way—of course it does not go all the way—to stimulate investment in the private sector of industry, about which the Chancellor of the Exchequer complained bitterly when he opened his Budget? We have here a small opportunity to stimulate the Government to do a little more generously what we want done in the country generally.

    2365
    If we do not have stimulation of this kind of investment in the private sector—I know there would have to be a fine balance to ascertain the cost of doing it—we shall have to have compulsion in time in the old industries, or else in the long run, if we do not have compulsion—I am warning the House about this—we shall have a stampede like we did in the case of Jarrow and many other Development Areas when we tried to do so much in such a short time. We did it very well, but it was at a terrific cost which the country would probably not be able to afford again when the time came. We have here an opportunity to press forward what we believe to be right.
    Hon. Members have already been into the mechanics of the Amendment. I saw the hon. Member for Kidderminster shaking his head at references to the 46th, 47th, 48th, 49th and 50th years. The advantage, or the lack of advantage, of this proposal over the initial allowance is that it does not come into operation until the 46th year. In Committee we made a case for bringing the investment allowance into line with the allowance in respect of machinery, but it was not acceptable. Here we propose to marry the old initial allowance and the investment allowance. This keeps the Chancellor's figure where it was; all it does is to concertina the allowance in the first year to the extent of five years' capital allowance.
    There are many chief inspectors of taxes who already allow just as much as is allowed in the Bill for machinery when a manufacturer who is putting in machinery builds a factory incidental to the installation of the machinery. In such a case not only does the investment allowance apply but also the amount allowed per year runs exactly in line with that allowed for machinery. We know that we are pushing at a half-open door here. I urge the Economic Secretary to act as a good host this afternoon and open the door wide to a good idea or two. He should accept our proposal as a small instalment for the future and as an inducement to private industry to invest more.
    My right hon. Friend the Member for Leeds, South (Mr. Gaitskell) mentioned the remarks which I made when we debated the Budget. What I then said about the means whereby large-scale
    2366
    operation could be made has attracted considerable attention. In one instance it was said that those ideas would be extremely valuable for new towns. I am not concerned so much about new towns but about old towns. If the Economic Secretary or the Chancellor would accompany me home one Friday and, during the railway journey, see what is happening in Mossley, which is part of my constituency, it would not be long before he would be thoroughly convinced.
    There we have new houses being erected in a district where very few houses were built before the war. The situation was that even the local authority advertised for new industries to come there on the basis that the wages which they would be required to pay would be little more than dole. The reason why there was no rush by industry to take advantage of that was that new industries could not be housed in the district. There have since been some developments and one or two good factories have been erected, but, by and large, there is a dreary succession of old buildings along the valley. As I said in Committee, one cannot go into agriculture in my part of the world; one must have a roof over one's head to do a job of work. However, we are putting up fine houses, but yet we are neglecting the very thing to which the Government ought to be paying attention.
    There are countries which have tackled the problem the other way round. I remember speaking to someone who went to Stalingrad when that great city was being developed. The workers were under the corrugated iron roofs of factories which were adaptable to all manner of industries. That approach has not been our approach. There is no doubt that a tremendous amount of work and capital have been put into housing, and I plead for a little bit of a turn round. To have fine houses on the hillside and in the valley miserable buildings in which new industries cannot possibly be housed, is an anachronism.
    I suppose it is true that private enterprise discards a marginal investment at any time. If it cannot make a profit from the money it borrows, it gives up, and that certainly appertained before the war. But we cannot discard human beings any more. They will not stand for it, and we cannot switch populations

    2367
    from one part of the country to another any more. Therefore, we must have buildings into which industries can go in order to provide a living for the people on the spot. The capital is already being put into the houses, and it is about time the capital was put into the factories as well.
    There is a terrific job which must be tackled before very long in Lancashire and Yorkshire. It is time that we stopped thinking in terms of the results of the activities of the old joint stock companies. My remarks apply not only to Lancashire but over the border too. People who want to see the picture as it affects industry should consult the joint committee report on the spacing of machinery, which was brought out in 1949. That bears very much on this problem, although nothing was ever done about it, because it was not possible in those days.
    I wonder if the Economic Secretary realises that in that report the whole of the textile industry was divided into three parts—the A's, the B's and the C's. The A's were new factories or altered R.O.F. factories which were turned over to the wool industry; the B's were the ones which could be converted with some expenditure; and there was the big C group which the joint committee of employers and trade unionists gave up. They could not do anything with them at all. Those were factories where oil was seeping through the floor and which were all of a jitter when the engines started up. Those are the factories where new machinery cannot he introduced because it will not fit.
    This state of affairs is not confined to this country. We find the same story if we read about the shift of population and of industry in America. Last year there was published a report which had been made at the instigation of five governors in New England. If we substituted Lancashire for Fall River, and altered the names of other places in the report to suit various parts of this country, we should get the picture of the situation as it occurred here. In fact, that is what the "Manchester Guardian" said in a review of this report.
    But the Americans had the big advantage that they were able to export pools of cheap labour elsewhere. They moved
    2368
    a lot of this labour down below the Mason-Dixon line. But it does not alter the fact that those people who lived in Fall River are still there. That is why they are doing the very thing that we are asking the Government to do today—that is to encourage new building. In settling populations, that is most essential, and it is also a human thing to do.
    Although we do not claim that this Amendment will effect the necessary cure—there will have to be a major operation some time—this Amendment is an earnest of what every right-thinking person has in mind.
    4.45 p.m.
    The Economic Secretary to the Treasury (Mr. R. Maudling): As the right hon. Member for Leeds, South (Mr. Gaitskell) said in moving this Amendment, this subject was discussed fully in Committee and a number of speeches were made, particularly by the hon. Member for Ashton-under-Lyne (Mr. Rhodes). My right hon. Friend said that he would consider the subject again in the light of those speeches, but he had already said that he was chary of making a concession and he gave four reasons which weighed and still weigh in my right hon. Friend's mind in considering this matter.
    He said that he was chary about making a concession, first because it would make it difficult to hold the line that he had adopted; secondly, because it would add £4 million to the cost; thirdly, because he did not want to indulge in the complicated legislation needed to do it the other way round and change buildings from the straight-line basis to the reducing-balance basis; and fourthly because he still thought that it was plant and machinery which particularly required the investment allowance and not the buildings.
    In accordance with the undertaking which my right hon. Friend gave, he has studied again very carefully this whole problem in the light of what was said by hon. Members in Committee, but he has come to the conclusion on balance—it was not a very definite balance one way or the other, but, as I have said, he reached that conclusion on balance—that it would be better not to make any change in the proposals as originally introduced in the Finance Bill. It is perfectly true that the stimulus given to investment in new plant and machinery

    2369
    is greater than that given to investment in new buildings. No one would deny that. But I would ask hon. Members opposite not to write off entirely the benefit of this investment allowance in respect of industrial buildings.
    It is true that in terms of the annual taxation bill, the difference between an investment allowance and an initial allowance does not make itself felt until the 45th year, but I should have thought—although I cannot admit to as much practical experience as many other hon. Members—that in considering an investment in a new industrial building, the question in the mind of the investor is the period over which the initial cost will be written off. The fact that the benefit does not actually accrue in terms of tax assessment for 45 years does not mean that it is not of some benefit.
    Secondly, I cannot help thinking that, while there may be differences between industry and industry, and area and area, it is a little artificial to make too much of a distinction between an industrial building and plant and machinery. The purpose of the building it to hold the plant and machinery, and surely, when considering what to do to stimulate new productive investment as a whole, we want to consider what would be the effect on a potential investor of an allowance which would affect his new investment as a whole—that is, plant and machinery and buildings taken together.
    Mr. Rhodes: That is precisely what we have been doing; we have been considering that aspect of the matter. But if, as the Economic Secretary has said, he attaches tremendous importance to the machinery, we say that the full benefit of investment in machinery cannot be obtained until the receptacle is ready for the installation. That is why we want to speed it up.
    Mr. Maudling: I do not think I have made my point sufficiently clear. My point is that the investor, deciding whether to invest in a new factory, will consider the tax allowance which he will get in respect of machinery and in respect of the building as a single whole. If it is said that one should be more generous than the other, I think that that is an artificial argument, because what weighs with the investor is not the allowance he gets on the plant or the allowance he gets on the building, but the total allowance
    2370
    he gets on the two together. Of course, I agree that that does not apply to all industries.
    My right hon. Friend has considered this matter very carefully, but he has come to the conclusion that he cannot accept this Amendment. Of the four reasons which I have mentioned, the one relating to the legislation for changing buildings from the straight-line basis to the reducing-balance basis does not apply to this Amendment. The question of the relative importance of plant and machinery and buildings I have attempted to deal with. The other two reasons are the most relevant to this Amendment.
    The first is because, as my right hon. Friend said, to accept an Amendment of this kind would make it more difficult to hold the line he had adopted, namely, the line drawn between industrial building and commercial building. He has been anxious not to give away the position adopted by this Government and preceding governments that the important thing to do is to stimulate industrial building.
    My right hon. Friend did feel that there is an argument that there is an unfair discrimination against commercial building, and that if he were to increase still further the allowance on industrial building, the case for admitting commercial building as well would become in practice, if not in theory, more compelling. That is, briefly, what he had in mind in coming to a decision.
    On the question of cost, the cost of accepting this Amendment and having an initial allowance as well as an investment allowance would be £4 million in the first year and £7 million in subsequent years. It would be difficult to say what is actually the cost to the Budget of an initial allowance. I think that the right hon. Gentleman was at slight variance with the hon. Member for Gloucester, South (Mr. Crosland) on this point. If the hon. Member for Gloucester, South is right, then, of course, what the Treasury and the revenue loses by way of initial allowance is, in practice, lost once and for all to the Exchequer.
    So far as the right hon. Gentleman's argument is concerned, I cannot accept his argument about the economic effects of the initial allowance. I think that his point was that if we granted an initial

    2371
    allowance in addition to the investment allowance, we might have a transfer of savings from public savings to corporate savings. I cannot help feeling that if his object in granting an initial allowance is to provoke more expenditure on investment, he cannot simultaneously provoke the same amount of additional savings.
    Whatever the economic effects of this proposal, the Budgetary effects would be to impose on the Budget an additional charge of £4 million for the first year and £7 million in subsequent years. I do not think that there is any argument, on either side, that the more stimulus we can give to investment in British industry the better. This is really a question of judging whether we can afford to give this stimulus in the light of the cost and the light of possible repercussions in
    respect of other types of building, particularly commercial building.
    My right hon. Friend considered this with great care, and he came to the conclusion that on balance he would not be justified at the present moment, in the present circumstances, in accepting the Amendment. He is grateful to hon. and right hon. Members opposite for the arguments and suggestions which they have advanced on this matter, and he hopes that by refusing to accept the Amendment he has not given the impression that he does not value the suggestions which have been made, but, on balance, he feels that he is not justified in accepting the Amendment at the present time.
    Question put, "That 'instead of,' stand part of the Bill."
    The House divided: Ayes. 263; Noes, 230.

    Division No. 194.]

    AYES

    [4.54 p.m.

    Aitken, W. T.

    Crowder, Petre (Ruislip—Northwood)

    Hirst, Geoffrey

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

    Darling, Sir William (Edinburgh, S.)

    Holland-Martin, C. J.

    Alport, C. J. M.

    Davidson, Viscountess

    Hopkinson, Rt. Hon. Henry

    Amery, Julian (Preston, N.)

    Deedes, W. F.

    Hornsby-Smith, Miss M. P

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Digby, S. Wingfield

    Horobin, I. M.

    Anstruther-Gray, Major W. J.

    Dodds-Parker, A. D.

    Horsbrugh, Rt. Hon. Florence

    Arbuthnot, John

    Donaldson, Cmdr. C. E. McA

    Howard, Gerald (Cambridgeshire)

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

    Donner, Sir P. W

    Howard, Hon. Greville (St. Ives)

    Baldock, Lt.-Cmdr. J. M.

    Doughty, C. J. A.

    Hudson, Sir Austin (Lewisham, N.)

    Baldwin, A. E.

    Douglas-Hamilton, Lord Malcolm

    Hulbert, Wing Cdr. N. J.

    Banks, Col. C.

    Drayson, G. B.

    Hurd, A. R.

    Barlow, Sir John

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

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

    Baxter, Sir Beverley

    Duncan, Capt. J. A. L.

    Hyde, Lt.-Col. H. M.

    Beach, Maj. Hicks

    Duthie, W. S.

    Hylton-Foster, H. B. H.

    Bell, Ronald (Bucks, S.)

    Eccles, Rt. Hon. Sir D. M.

    Iremonger, T. L.

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

    Eden, Rt. Hon. A.

    Jenkins, Robert (Dulwich)

    Bennett, Dr. Reginald (Gosport)

    Eden, J. B. (Bournemouth, West)

    Johnson, Eric (Blackley)

    Bennett, William (Woodside)

    Erroll, F. J.

    Johnson, Howard (Kemptown)

    Birch, Nigel

    Finlay, Graeme

    Jones, A. (Hall Green)

    Bishop, F. P.

    Fisher, Nigel

    Joynson-Hicks, Hon. L. W.

    Boothby, Sir R. J. G.

    Fleetwood-Hesketh, R. F.

    Kaberry, D.

    Bossom, Sir A. C.

    Fletcher-Cooke, C.

    Kerby, Capt. H. B

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

    Ford, Mrs. Patricia

    Kerr, H. W.

    Boyle, Sir Edward

    Fort, R.

    Lambton, Viscount

    Braine, B. R.

    Foster, John

    Lancaster, Col. C. G

    Braithwaite, Sir Albert (Harrow, W.)

    Fraser, Hon. Hugh (Stone)

    Langford-Holt, J. A.

    Braithwaite, Sir Gurney

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Leather, E. H. C.

    Brooke, Henry (Hampstead)

    Fyfe, Rt. Hon. Sir David Maxwell

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

    Brooman-White, R. C.

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

    Legh, Hon. Peter (Petersfield)

    Browne, Jack (Govan)

    Gammans, L. D.

    Lennox-Boyd, Rt. Hon. A. T.

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

    George, Rt. Hon. Maj. G. Lloyd

    Lindsay, Martin

    Bullard, D. G.

    Glover, D.

    Linstead, Sir H. N.

    Bullus, Wing Commander E. E.

    Godber, J. B.

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

    Burden, F. F. A.

    Gomme-Duncan, Col. A.

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

    Butcher, Sir Herbert

    Gough, C. F. H.

    Lockwood, Lt.-Col. J. C.

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

    Gower, H. R.

    Longden, Gilbert

    Campbell, Sir David

    Grimston, Hon. John (St. Albans)

    Low, A. R. W.

    Carr, Robert

    Grimston, Sir Robert (Westbury)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Cary, Sir Robert

    Hall, John (Wycombe)

    Lucas, P. B. (Brentford)

    Channon, H.

    Hare, Hon. J. H.

    Lucas-Tooth, Sir Hugh

    Clarke, Col. Ralph (East Grinstead)

    Harris, Frederic (Croydon, N.)

    McCorquodale, Rt. Hon. M. S.

    Cole, Norman

    Harrison, Col. J. H. (Eye)

    Macdonald, Sir Peter

    Colegate, W. A.

    Harvey, Ian (Harrow, E.)

    Mackeson, Brig. Sir Harry

    Conant, Maj. Sir Roger

    Harvie-Watt, Sir George

    Mackie, J. H. (Galloway)

    Cooper, Sqn. Ldr. Albert

    Hay, John

    Maclay, Rt. Hon. John

    Cooper-Key, E. M.

    Heald, Rt. Hon. Sir Lionel

    Maclean, Fitzroy

    Craddock, Beresford (Spelthorne)

    Heath, Edward

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

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

    Higgs, J. M. C.

    MacLeod, John (Ross and Cromarty)

    Crosthwaite-Eyre, Col. O. E.

    Hill, Dr. Charles (Luton)

    Macmillian, Rt. Hon. Harold (Bromley)

    Crouch, R. F.

    Hill, Mrs. E. (Wythenshawe)

    Macpherson, Niall (Dumfries)

    Crowder, Sir John (Finchley)

    Hinchingbrooke, Viscount

    Maitland, Patrick (Lanark)

    Manningham-Buller, Rt. Hn. Sir Reginald

    Ramsden, J. E.

    Summers, G. S.

    Markham, Major Sir Frank

    Rayner, Brig. R

    Sutcliffe, Sir Harold

    Marlowe. A. A. H.

    Redmayne, M.

    Taylor, William (Bradford, N)

    Marples, A. E.

    Rees-Davies, W. R

    Teeling, W.

    Marshall, Douglas (Bodmin)

    Remnant, Hon. P.

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

    Maude, Angus

    Ronton, D. L. M.

    Thomas, Leslie (Canterbury)

    Maudling, R.

    Ridsdale, J. E.

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

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

    Roberts, Peter (Heeley)

    Thornton-Kemsley, Col. C. N

    Medlicott, Brig F.

    Robertson, Sir David

    Tilney, John

    Mellor, Sir John

    Robinson, Sir Roland (Blackpool, S.)

    Touche, Sir Gordon

    Molson, A. H. E.

    Robson-Brown, W.

    Turner, H. F. L.

    Moore, Sir Thomas

    Rodgers, John (Sevenoaks)

    Turton, R. H.

    Morrison, John (Salisbury)

    Roper, Sir Harold

    Tweedsmuir, Lady

    Nabarro, G. D. N.

    Ropner, Col. Sir Leonard

    Vane, W. M. F.

    Neave, Airey

    Russell, R. S.

    Vaughan-Morgan, J. K.

    Nicholls, Harmar

    Ryder, Capt. R. E. D.

    Vosper, D. F.

    Nicolson, Nigel (Bournemouth, E.)

    Savory, Prof. Sir Douglas

    Wakefield, Edward (Derbyshire, W)

    Nield, Basil (Chester)

    Schofield, Lt.-Col. W.

    Wakefield, Sir Wavell (St. Marylebone)

    Noble, Comdr. A. H. P

    Scott, R. Donald

    Walker-Smith, D. C.

    Nugent, G. R. H.

    Scott-Miller, Cmdr. R.

    Wall, Major Patrick

    Nutting, Anthony

    Shepherd, William

    Ward, Hon. George (Worcester)

    Oakshott, H D.

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

    Ward, Miss I. (Tynemouth)

    Odey, G. W.

    Smithers, Peter (Winchester)

    Waterhouse, Capt. Rt. Hon. C.

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

    Smithers, Sir Waldron (Orpington)

    Watkinson, H. A.

    Orr, Capt. L. P. S.

    Snadden, W. McN.

    Webbe, Sir H. (London & Westminster)

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

    Soames, Capt. C.

    Wellwood, W.

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

    Spearman, A. C. M

    Williams, Gerald (Tonbridge)

    Page, R. G.

    Speir, R. M.

    Williams, Sir Herbert (Croydon, E.)

    Peake, Rt. Hon. O.

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

    Williams, Paul (Sunderland, S.)

    Peto, Brig. C. H. M.

    Stanley, Capt. Hon. Richard

    Williams, R. Dudley (Exeter)

    Pickthorn, K. W. M.

    Stevens, Geoffrey

    Wills, G.

    Pilkington, Capt. R. A

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

    Wilson, Geoffrey (Truro)

    Pitman, I. J.

    Stewart, Henderson (Fife, E.)

    Wood, Hon. R.

    Pitt, Miss E. M.

    Stoddart-Scott, Col. M.

    Powell, J. Enoch

    Storey, S.

    TELLERS FOR THE AYES:

    Price, Henry (Lewisham, W.)

    Strauss, Henry (Norwich, S.)

    Sir Cedric Drewe and

    Prior-Palmer, Brig. O. L

    Stuart, Rt. Hon. James (Moray)

    Mr. T. G. D. Galbraith.

    Raikes, Sir Victor

    Studholme, H. G.

    NOES

    Acland, Sir Richard

    Davies, Ernest (Enfield, E.)

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

    Albu, A. H.

    Davies, Harold (Leek)

    Herbison, Miss M.

    Allen, Arthur (Bosworth)

    Davies, Stephen (Merthyr)

    Hobson, C. R.

    Allen, Scholefield (Crewe)

    de Freitas, Geoffrey

    Holman, P.

    Anderson, Frank (Whitehaven)

    Deer, G.

    Holmes, Horace

    Attlee, Rt. Hon. C. R.

    Delargy, H. J.

    Holt, A. F.

    Awbery, S. S.

    Dodds, N. N.

    Houghton, Douglas

    Bacon, Miss Alice

    Donnelly, D. L.

    Hoy, J. H.

    Balfour, A.

    Dugdale, Rt. Hon. John (W Bromwich)

    Hubbard, T. F.

    Beattie, J.

    Ede, Rt. Hon. J. C

    Hudson, James (Ealing, N.)

    Bence, C. R.

    Edelman, M.

    Hughes, Emrys (S. Ayrshire)

    Benn, Hon. Wedgwood

    Edwards, Rt. Hon. John (Brighouse)

    Hughes, Hector (Aberdeen, N.)

    Benson, G.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hynd, H. (Accrington)

    Bing, G. H. C.

    Edwards, W. J. (Stepney)

    Hynd, J. B. (Attercliffe)

    Blackburn, F.

    Evans, Albert (Islington, S.W.)

    Irving, W. J. (Wood Green)

    Blenkinsop, A.

    Evans, Edward (Lowestoft)

    Isaacs, Rt. Hon. G. A.

    Blyton, W. R.

    Fernyhough, E.

    Janner, B.

    Boardman, H.

    Fienburgh, W.

    Jeger, George (Goole)

    Bottomley, Rt. Hon. A. G

    Fletcher, Eric (Islington, E.)

    Jeger, Mrs. Lena

    Bowden, H. W.

    Follick, M.

    Jenkins, R. H. (Stechford)

    Bowles, F. G.

    Forman, J. C.

    Johnson, James (Rugby)

    Braddock, Mrs. Elizabeth

    Fraser, Thomas (Hamilton)

    Jones, David (Hartlepool)

    Brockway, A. F.

    Freeman, John (Watford)

    Jones, Frederick Elwyn (West Ham, S.)

    Brook, Dryden (Halifax)

    Freeman, Peter (Newport)

    Jones, Jack (Rotherham)

    Broughton, Dr. A. D. D.

    Gaitskell, Rt. Hon. H. T N

    Keenan, W.

    Brown, Rt. Hon. George (Belper)

    Gibson, C. W.

    Kenyon, C.

    Brown, Thomas (Ince)

    Glanville, James

    Key, Rt. Hon. C. W

    Burke, W. A.

    Gordon Walker, Rt. Hon. P. C

    King, Dr. H. M

    Burton, Miss F. E.

    Greenwood, Anthony

    Kinley, J.

    Butler, Herbert (Hackney, S.)

    Grey, C. F.

    Lawson, G. M.

    Castle, Mrs. B. A.

    Griffiths, Rt. Hon. James (Llanelly)

    Lee, Frederick (Newton)

    Champion, A. J.

    Grimond, J.

    Lee, Miss Jennie (Cannock)

    Clunie, J.

    Hale, Leslie

    Lever, Leslie (Ardwick)

    Coldrick, W.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Lindgren, G. S.

    Collick, P. H.

    Hall, John T. (Gateshead, W.)

    Lipton, Lt.-Col. M

    Corbet, Mrs. Freda

    Hamilton, W. W.

    MacColl, J. E.

    Cove, W. G.

    Hannan, W.

    McInnes, J.

    Craddock, George (Bradford, S.)

    Hardy, E. A.

    McLeavy, F.

    Crosland, C. A. R.

    Hargreaves, A.

    MacPherson, Malcolm (Stirling)

    Crossman, R. H. S.

    Harrison, J. (Nottingham, E)

    Mallalieu, E. L. (Brigg)

    Cullen, Mrs. A.

    Hastings, S.

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

    Daines, P.

    Hayman, F. H.

    Mann, Mrs. Jean

    Dalton, Rt. Hon. H.

    Healey, Denis (Leeds, S.E.)

    Manuel, A. C.

    Darling, George (Hillsborough)

    Healy, Cahir (Fermanagh)

    Marquand, Rt. Hon H. A

    2374

    2375

    Mason, Roy

    Pryde, D. J.

    Thomas, George (Cardiff)

    Mayhew, C. P.

    Pursey, Cmdr. H.

    Thomas, Iorwerth (Rhondda, W.)

    Mellish, R. J.

    Reid, Thomas (Swindon)

    Thomas, Ivor Owen (Wrekin)

    Messer, Sir F.

    Reid, William (Camlachie)

    Thomson, George (Dundee, E.)

    Mikardo, Ian

    Rhodes, H.

    Thornton, E.

    Mitchison, G. R

    Richards, R.

    Timmons, J.

    Monslow, W.

    Robens, Rt. Hon. A.

    Tomney, F.

    Moody, A. S.

    Roberts, Goronwy (Caernarvon)

    Ungoed-Thomas, Sir Lynn

    Morley, R.

    Robinson, Kenneth (St. Pancras, N.)

    Usborne, H. C.

    Morris, Percy (Swansea, W.)

    Rogers, George (Kensington, N.)

    Warbey, W. N

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

    Ross, William

    Weitzman, D.

    Moyle, A.

    Royle, C.

    Wells, Percy (Faversham)

    Mulley, F. W.

    Shackleton, E. A. A.

    Wells, William (Walsall)

    Noel-Baker, Rt. Hon. P. J

    Shinwell, Rt. Hon. E.

    West, D. G.

    Oldfield, W. H.

    Short, E. W.

    Wheeldon, W. E.

    Oliver, G. H.

    Shurmer, P. L. E.

    White, Mrs. Eirene (E. Flint)

    Orbach, M.

    Silverman, Sydney (Nelson)

    Whiteley, Rt. Hon. W.

    Oswald, T.

    Simmons, C. J. (Brierley Hill)

    Wigg, George

    Padley, W. E.

    Skeffington, A. M.

    Wilcock, Group Capt. C. A. B.

    Paget, R. T.

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

    Willey, F. T.

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

    Slater, J. (Durham, Sedgefield)

    Williams, Rev. Llywelyn (Abertillery)

    Paling, Will T. (Dewsbury)

    Smith, Ellis (Stoke, S.)

    Williams, W. R. (Droylsden)

    Palmer, A. M. F.

    Smith, Norman (Nottingham, S.)

    Willis, E. G.

    Pannell, Charles

    Sorensen, R. W.

    Wilson, Rt. Hon. Harold (Huyton)

    Pargiter, G. A.

    Soskice, Rt. Hon. Sir Frank

    Winterbottom, Ian (Nottingham, C.)

    Parker, J.

    Sparks, J. A.

    Winterbottom, Richard (Brightside)

    Parkin, B. T

    Steele, T.

    Woodburn, Rt. Hon. A.

    Paton, J.

    Strachey, Rt. Hon. J.

    Wyatt, W. L.

    Pearson, A.

    Strauss, Rt. Hon. George (Vauxhall)

    Yates, V. F.

    Pearl, T. F.

    Summerskill, Rt. Hon. E.

    Younger, Rt. Hon. K.

    Popplewell, E.

    Swingler, S. T.

    Porter, G.

    Sylvester, G. O.

    TELLERS FOR THE NOES:

    Price, J, T. (Westhoughton)

    Taylor, Bernard (Mansfield)

    Mr. Wilkins and Mr. John Taylor

    Proctor, W. T.

    Taylor, Rt. Hon. Robert (Morpeth)

    Mr. Crosland: I beg to move, in page 11, line 44, after "one-fifth," to insert:
    "or, in the case of the fuel-saving machinery or plant mentioned in the next following subsection, one quarter."
    This Amendment is intended to give to certain types of plant and machinery designed to save fuel an investment allowance of 25 per cent, instead of one of 20 per cent. It will be remembered that we had a debate on a rather similar Opposition Amendment last year, to which the Chancellor replied by making one of his less felicitous speeches in which he descended from the very high moral tone which he usually adopts, and which, to use his own words in reference to another speech, created no intellectual stir in the Chamber, or indeed stir of any other kind, if it comes to that. I hope that he will make his speech this year on a rather higher level, and will go into the question rather more thoroughly.
    This is a particularly propitious, or perhaps unpropitious moment—I am not sure which—to be discussing questions of fuel economy in the light of the National Union of Mineworkers' Conference which has been going on this week and in the light of the very sombre warnings given to that conference. The decisions on various other matters discussed at the conference give pain in some quarters and pleasure in others. But they are not our concern, at any rate not this evening.
    2376
    This conference has listened to extremely grave warnings about the coal position both from its own officers, Mr. Jones and Mr. Horner, and also from Sir Hubert Houldsworth himself. There can be no question that the coal position is extremely alarming. Both sides of the House said last year that the situation was serious even then, but it is clearly a great deal more serious now.
    We have had this year an increase in output of a little over 1 million tons. Exports are about the same as last year which, I think, nobody considers large enough. If our exports of coal could be considerably increased, it would be of great benefit to the country. Stocks are about the same as last year, but they ought to be larger, because industrial consumption is increasing. Therefore, last year's figures are inadequate.
    What is really serious is the fact that, compared with the increase in output of only 1 million tons, consumption has gone up by over 3 million tons. Nobody doubts that the coal position during this coming winter is going to be a very unsatisfactory one. Once again we have announced that we shall import coal from abroad, and that is something which nobody likes.
    Of course, it could be said by whichever Minister replies that any concessions to fuel saving equipment in July will not

    2377
    have much effect on the position this winter, because some forms of this equipment take, possibly, two or three years to instal and another year before any appreciable effect is felt from their use. I do not think that is a sufficient argument against accepting the concession this year, because there is every indication that the coal picture is going to be as bleak in five, 10 or 15 years' time as it is in 1954.
    I think that every committee and every body which has studied the long-term position is agreed on how difficult the outlook is. The Ridley Committee said that the home demand for coal in some 10 years' time would amount to 230 million tons. The Federation of British Industries, which I should have thought had more reason on their side, put the figure of the home demand in about 10 years' time at 260 million tons. The Ridley Committee and the National Coal Board have both been talking in terms of exports in 10 years' time being about 30 million tons. That figure is a good deal lower than our export figure in the 1920s, and is one which the Economic Commission for Europe certainly thinks can be exceeded, since its own calculation was that by that time there will be a European coal gap of no less than 50 million tons.
    It does not matter which calculation we take. It is perfectly clear that, looking ahead, the demand for coal, both for home industry and also for export, is going to be very much greater than the amount of coal which, even on the most favourable assumptions, we can produce in this country. If it is the case that in a few years' time the demand for coal is going to be a great deal greater than we can supply, then, obviously, it is right that we should emphasise the question of fuel economy.
    This is not a party matter, and except for the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre) who intervened rather unexpectedly in the debate last year, it is not an issue upon which there is any disagreement at all. Everybody is agreed that large savings of fuel can be made in industry. Indeed, the hon. Member for Kidderminster (Mr. Nabarro) has made this point again and again in this Chamber.
    The hon. Member for Garston (Sir V. Raikes) said last year that in five years
    2378
    or so, industry could certainly save 9 or 10 million tons of coal by fuel economies. The Ridley Committee reported in exactly the same terms, and I do not think there is any dispute that large savings can be made. Nor is there any dispute about the fact that industry needs an incentive if it is to save coal, because, except in the case of three or four notable industries, fuel costs are an extremely small proportion of total costs.
    Last year, in reply to a debate on an Amendment which we then put down to give 100 per cent. initial allowances to certain fuel equipment, the Chancellor rejected our plea while admitting that the matter was of the greatest possible importance. He rejected it not in one of his rather patriotic, idealistic and ethical sounding speeches, but in one of his rather more debating speeches, taking refuge very largely in the fact that the wording of the Amendment was bad. I have this morning re-read the speeches on that occasion, and I have come to the conclusion that he misread the Amend-milt, but that is not particularly germane at the moment.
    The Chancellor of the Exchequer (Mr. R. A. Butler): Is the hon. Gentleman suggesting that I cannot be forensic and patriotic at the same time?
    Mr. Crosland: I am sure that the Chancellor is one of the very few people who can come within sight of this duality of character. But more normally he is a Jekyll and Hyde character and adopts either one or other of his rather contrasting personalities.
    Assuming we have got the right hon. Gentleman in a patriotic and moralising attitude this afternoon, I hope he will not take refuge in the fact that there may be some flaws in the drafting of our Amendment. Of course, it is difficult to draft an Amendment perfectly when in Opposition, and this year we have had less time than usual between the Committee stage and the Report stage. I do not think, however, there is a great deal wrong with it, or if there is that it is very serious. But, if the Chancellor is willing to accept the principle, he can say it is badly drafted if he likes, provided he agrees with the substance of it.
    Last year the right hon. Gentleman admitted the great importance of the

    2379
    subject and admitted that the existing loan scheme of the Ministry of Fuel and Power had largely broken down. Out of £1 million loans provided under that scheme, only some 4 per cent. had, in fact, been taken up. Therefore, the Chancellor, in collaboration with the Minister of Fuel and Power, did make a small concession in respect of the loan scheme. He extended the category of equipment to which it should be applied, and extended the period of repayment. He made it two years instead of one year interest free.
    We have now observed how this scheme has worked, and the Minister of Fuel and Power has given the House, on more than one occasion, figures of how much of this money has been loaned. The last figure that he gave was on 28th June this year when, in answer to a Question, he said:
    "Under the new Government loan scheme I have approved 51 schemes amounting to £339,000."—[OFFICIAL REPORT, 28th June, 1954: Vol. 529, c. 876.]
    Those are better than the figures in the previous scheme, but can this really be considered a rapid rate of improvement? We on this side of the House think not.
    It might be argued that the scheme was only operating for a year and, therefore, why not give it another year. That, I think, would be a powerful argument if the thing appeared to be going full steam ahead and if the loans were being made at a rapid rate. But on the basis of the figures we have been given I do not think that progress under this scheme is really such that we can be happy about our present arrangements.
    There is this further point about it. If we were going to ask what kind of inducement ought to be given to industry to instal this equipment, I could understand that at a time when industry was short of cash, a loan scheme was the natural way of dealing with the matter. Two years ago it could be argued—indeed, it was argued—that industry was then short of cash. Nobody thinks that today. The Economic Secretary in a previous debate admitted that the great majority of firms are not short of cash.
    I cannot think that a loan scheme of any kind is a strong inducement to firms that are not short of cash. Apart from the fact that there are two years' interest
    2380
    free, the offer of loans on favourable terms will not make the installation of equipment more profitable than it would otherwise be. It would only make the money available to most firms, and money available now through a loan scheme is not relevant to a position such as that in which we find ourselves today.
    What we require today is not to offer loans but to make the installation of this type of equipment more profitable to industry. That is exactly what we are seeking to do in this Amendment. The fact is that an investment allowance does give an additional return on any investment, and we are seeking to increase this still further on this particular kind of investment. I hope that whoever replies to this debate will deal with this point, which is fundamental. The concept of a loan was obviously the correct approach at a time when industry was short of cash, but now that industry is not short of cash a loan is an irrelevant type of approach and what is wanted is something to increase the net return and the profitability on this sort of equipment. That is what we are pressing for.
    5.15 p.m.
    What objections can be used against this suggestion? First of all, we can have the old familiar objection that there are practical difficulties. The Ridley Committee wanted to advocate a concession, not of this exact kind but somewhat parallel. It was, in fact, a 100 per cent, initial allowance. They did not do so, however, because after discussion with the Inland Revenue, they were convinced that there were great practical difficulties.
    The Inland Revenue, with all due respect to my hon. Friend the Member for Sowerby (Mr. Houghton), have a rather professional vested interest in creating practical difficulties when a Minister asks whether some new scheme should be adopted or not. Whatever the position two years ago, it cannot be said that there are practical difficulties about defining the sort of equipment which we have in mind, because it is already defined by the Ministry of Fuel and Power for the purposes of the loan scheme. Clearly, if this type of equipment and plant can be identified for the purpose of giving firms loans, it can be identified for the purpose of giving firms a higher investment allowance. It really would

    2381
    not be fair to take seriously now the argument that there were great practical difficulties in defining and identifying the type of equipment that we have in mind.
    It might be objected that a comparatively small concession of this kind will not save much coal. I might say that the only reason why we suggested a small concession is that, in view of the Chancellor's mood of obstinacy during the whole of the proceedings on this year's Finance Bill, we thought it would be a waste of time to suggest a concession involving a more substantial amount. We have tried to attract his interest by making it comparatively small and not costly.
    But, in any case, I would suggest to the Committee that, supposing it is stated that this kind of concession will only save 500,000 tons or a million tons of coal, it does not, therefore, mean that this is not worth doing. A small marginal saving of coal can be of the greatest possible importance because we are working on such a narrow margin the whole time. A million tons of coal may not sound very important when we think that our total consumption of coal is 220 million tons, but that one million tons might easily make the difference between having a coal crisis and not having a coal crisis.
    The value to the country of one million tons of coal is its equivalent in industrial output which would be lost by its not being there. One million tons of coal could make a difference in one year of 5 per cent. in industrial output. In 1947, for a brief period there was a very small coal shortage which was reflected in a huge drop in industrial output. So I hope that hon. Members will not say that, because the saving in terms of coal is comparatively small, therefore the saving to the country is not of the greatest possible importance.
    Lastly, I suppose the principal objection that will be brought forward is the objection that we cannot discriminate in favour of a single industry. Despite the fact that both this year on the investment allowance and last year on the initial allowances we asked for discrimination for a number of separate industries, I personally have a great deal of sympathy with the argument that the Treasury cannot discriminate over the whole field of
    2382
    taxation. I think my hon. Friend the Member for Sowerby very naturally takes a similar view.
    I think, therefore, that it is very natural for the Treasury Bench to say on the various Amendments from this side of the House—I think there were from five to ten this year—asking for larger investment allowances for this and that industry, that this is a degree of discrimination which will make the whole thing really hopeless.
    I hope that they will notice that this year at this stage, we were careful not to put this fuel saving Amendment on the Order Paper with other Amendments proposing discriminating treatment which we put forward on the Committee stage, but have brought it forward separately on Report. We made the differentiation in order to make the point that we regard this is a separate issue. In other words, if a concession were made on this point we would not say that the Government should make a concession on machinetools or shipbuilding and various other things. I hope that whoever answers the debate will not take refuge behind the general argument about discrimination, but will accept the fact that we put this on quite a different level from other cases which we have argued.
    Even the argument against discrimination can be pressed very much too far. This Government, following the example of previous Governments, have themselves discriminated in initial allowances and investment allowances. Initial allowances were given for mining works and extractive industries at a rate double that given to other industries. This year, when the change was made to investment allowances, again the mining and extractive industries, alone of all industries, are given the choice between a 20 per cent. investment allowance and a 40 per cent. initial allowance. Therefore, there is already in Government policy a perfectly clear discrimination in favour of mining works and we might say that the principle has been accepted. It would not involve establishing some quite new and revolutionary principle now to give the discrimination that is given in the case of mining works also to fuel saving equipment.
    Again, the Government discriminate in favour of the coal industry by having a loan scheme at all. They do not offer

    2383
    loans on these exceptionally favourable terms to the chemical, engineering or textile industries. Therefore, I do not think that the Minister can say that the Government cannot discriminate in favour of this kind of plant, machinery and equipment when the Minister of Fuel and Power, with the support of the entire House, already discriminates in its favour.
    Although I have a horrible feeling that we shall hear about the discrimination argument and that that will constitute 50 per cent. of the case against us, I hope that, at any rate, the case will be put rather more subtly than it was put last year. I hope that the Economic Secretary will not content himself with saying in a rather high falutin' fashion that all discrimination of any kind is bad. I hope that he will address himself to the fact that the Minister of Fuel and Power already does this, and that even in the sphere of investment allowances and initial allowances there is already discrimination in favour of certain types of industry.
    I am sorry that the Chancellor is not replying to this debate. Considering all that has been said about the coal situation in recent days, I would have hoped that he would have signalled the importance which he attaches to the subject by replying himself, as he did last year, Although last year we did not get a very sympathetic reply, at least we did have a reply from him. He said last year that he was going to give the loan scheme a trial for a year and that he would report to the House or to the Committee when the next Finance Bill was discussed whether he thought that it was functioning adequately or not. Therefore, I would have hoped that we should have an interim report from the Chancellor and a statement on whether he thinks something further should be done. Taking the long view, I think the House might reasonably conclude that the loan scheme, although useful and an improvement on its predecessor, is still not enough and that something additional should be done.
    Mr. Austen Albu: I beg to second the Amendment.
    In seconding this Amendment, I hope that I shall not sound as pessimistic as
    2384
    my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) did towards the end of his speech, because I hope that we shall have a more satisfactory reply than the one last year. I should like to say how very pleased we are to see the Parliamentary Secretary to the Ministry of Fuel and Power here. His presence shows an attitude towards these debates which is very different from that which we have come to expect from the Board of Trade. When we discuss industry in general we very rarely have a representative from the Board of Trade in the Chamber. It is an indication of the seriousness with which this matter is taken that the Parliamentary Secretary to the Ministry of Fuel and Power has left his other very serious duties to be here.
    I am sure that we all admire the persistence with which my hon. Friend the Member for Gloucestershire, South has pressed this matter year after year. There is no doubt about its seriousness or that he feels very strongly about it, as we all do on both sides of the House. As he said, although such a concession, small as it is, can hardly have much effect on the position this year, nevertheless the situation is one which we have to envisage for quite a number of years ahead.
    I know that there are hon. Members and people outside who think that in a few years' time we shall have atomic energy generation and that anxiety about coal will not matter. That is the most arrant nonsense, because it will be years before we can substitute power generation by atomic energy for the existing methods, and the capital required for such a programme will be far too great to envisage it in short-term. There are others who say that we should and could turn over to increasing use of oil. There is already a very substantial turnover to oil on the railways and in industry, but the House will not be unaware of the view which I hold about the future of our balance of payments problem and the continuing necessity to save imports.
    When we bear in mind that our net imports last year were of the value of £240 million, we can see that any substantial substitution of petroleum for coal or an increase in home consumption of petroleum must inevitably have a serious effect on our balance of payments. I agree that the position would be very much worse if, owing to the shortage of

    2385
    coal, industry had to close down. I should be certainly in favour of importing oil in those circumstances; but that is not the argument. The argument is whether we can afford to import at that rate and lose the exports of coal to which my hon. Friend the Member for Gloucestershire, South referred.
    There are very few hon. Members on the benches opposite at the moment. We happen to be discussing investment in industry and not Estate Duty, when no doubt the House will fill up. When we are discussing the expansion of our industries, few hon. Members of the party opposite are here. There are hon. Members opposite who speak very freely about coal production with knowledge based only on experience of the subject, when the economic situation, and particularly the manpower situation, was very different indeed. In the best circumstances, even with the most brilliant management, the most enthusiastic workers, and the highest standard of investment, can we imagine that there will be a radical increase in coal production in the next 10, 15 or 20 years?
    We hope that when the present capital plans of the Coal Board come to fruition there will be a substantial increase in production, but we have to remember that even today the output per man-shift is rising and has continued to rise. As the "Manchester Guardian" points out in a very interesting leading article today,
    "…the miners are regularly attending a much larger number of shifts, year in, year out, than ever in any period of years in the 1930s, and probably than ever in history."
    It is true, of course, that very rarely before in the history of the coal industry has there been continuous employment in all pits. Now there is, and the truth is, as the "Manchester Guardian" points out,
    "…we do not really know what is a reasonable number of shifts to ask a man to maintain…."
    in the pits. Before the war, in many districts the demand was high enough for work to be continuous, and it is quite likely, as the figures seem to indicate, that absenteeism was higher than it is today.
    5.30 p.m.
    It is, therefore, no good reading moral lessons to the miners, attacking management and administration, and thinking
    2386
    that by some magic twist we can revert to a situation where the production of exports is very much lower, there is considerable unemployment and, therefore, very many more workers in the mines. We must realise that we shall never go back to freely available and cheap coal, any more than we shall to freely available and cheap food, in the sense that we had it before the war. We shall never go back to a situation where the community exploits miners and agricultural workers.
    That being so, we must put a true value upon the use of coal. Some people think that coal is too cheap. My hon. Friend the Member for Gloucestershire, South has sometimes almost seemed to take that view, and I am not sure that I do not agree with him. After all, our coal is cheaper than it is anywhere else in Europe. In any case, the price of coal does not prevent many industrial firms from wasting it.
    There are some industries in which coal is responsible for a very high proportion of the cost, but in the vast majority of industries that is not so, and the owners do not think it is worth while to make a special effort to save it. They are showing their ignorance, because if they cared to make the necessary estimates many of them would find that they could make considerable profits, even without any loan or investment allowance from the Government. Works and employment managers are so concerned to see that the cost of their heating and steam production is not a very high proportion of their total costs that they are unwilling to go to the trouble of installing simple equipment to save coal.
    In this case we need both a stick and a carrot. We must have the stick of higher prices for the coal industry and the carrot supplied by the Amendment. Hon. Members have no doubt seen the report of the survey of the use of steam and power made by the Ministry of Fuel and Power, which shows that only about one-third of the potential electric power that could be generated by the use of back pressure engines or turbines is being generated at the present time. This is a complicated and difficult type of installation, which involves not only the cost of plant and machinery but of consultancy, skilled engineering, and technical advice. A firm must think very seriously about this type of installation

    2387
    before going ahead with it, because the calculations are not easy. Nevertheless, it is quite clear that in many cases it would be of very great value.
    It does not appear as that the Government's loan scheme is offering a sufficient inducement—although one would have thought that no inducement were needed. Besides the highly complicated scheme which I have just mentioned there are much more simple ones which could be put into operation, but which are still ignored. One would think that it was only common sense that not only buildings but piping and even some plant and machinery and equipment should be insulated, but one can go into many factories where the pipes are not insulated or lagged, and there is nothing on the roof but the bare tiling, or whatever the covering happens to be. The loss of heat because of this is absolutely appalling.
    We need to make a much stronger drive to persuade industry to save fuel. My hon. Friend the Member for Gloucestershire. South has gone through all the objections that can be raised. I do not entirely agree with him that the Government cannot be more discriminatory than they are at present. I realise the difficulties, but I believe that in some cases, especially with regard to definitions, they are not so great as they may appear. This Amendment is an example not of discrimination between industries, but in the use of quite well known types of plant and equipment, or types of building work, which are quite simply and easily described.
    I can think of the kind of comparison that we had during the war. I know that in those days money was much less of an object, but a scheme existed for the relighting of factories, whereby we could get the whole cost of relighting our factories from the Ministry of Supply. The factory which I managed did so. It was a quite separate arrangement. The relevant regulation said that under certain conditions of light measurement the whole cost of improving the lighting in a factory engaged in war production would be paid for by the Treasury. That is quite a simple scheme. It does not discriminate between industries, but it is an incentive to the installation of certain equipment. That is exactly what the Amendment seeks to achieve.
    2388
    It is not as if the Government have not considered the question of making rather more discriminatory allowances. My hon. Friend has referred to some examples, and the Economic Secretary, during the Committee stage, in reply to the debate upon our Amendment to make the investment allowance more discriminatory, said that very serious consideration was being given to the matter. It is not as if it was something altogether outside the minds of the Government. Nor can some of the other arguments put forward by the Economic Secretary on that occasion be used today. In this case there is no element of an export subsidy or loan.
    If the Government are serious about this matter and hold the same view of the future prospects as that of my hon. Friend and myself, they ought to make this concession. It is not a very great one, but if it were made it would be an indication of the seriousness with which the Government view the matter, and the importance which they attach not only to increased coal production but to coal saving and fuel saving as a whole.
    Mr. Nabarro: The hon. Member for Gloucestershire, South (Mr. Crosland) said that my right hon. Friend the Chancellor gave an unsympathetic reception last year to the proposal put forward by hon. Members opposite for increasing the fiscal incentives for installation of industrial fuel efficiency equipment. I should like to refute that suggestion at once. I had long and earnest conversations with m) right hon. Friend and with his Inland Revenue officials over a period of some months before the introduction of the 1953 Budget, and throughout those conversations it was evident to me that my right hon. Friend was extremely sympathetic in the matter of the need for making arrangements to provide an added incentive for greater industrial fuel efficiency. It was also evident, however, that very grave practical difficulties were involved.
    Nevertheless, my right hon. Friend made one important concession last year. to which neither the hon. Member for Gloucestershire, South nor the hon. Member for Edmonton (Mr. Albu) has made adequate reference this afternoon. My right hon. Friend extended substantially the scope of the loans scheme for

    2389
    industrial fuel-saving equipment. Furthermore, by arrangement with the Ministry of Fuel and Power, he did something of much greater importance from the fiscal point of view, and something which has a direct relationship to the Amendment. The period for repayment of the industrial fuel efficiency loans was extended in order that it should be made the same period as that allowed by the Inland Revenue for wear and tear purposes upon the plant installed.
    The practical effect of such an arrangement is not sufficiently realised in industry, and is not. I think, completely understood in the House. What it means is this: if an industrialist spends £10,000 upon a piece of fuel-economising equipment and obtains a Government loan for it, and if, as is normal in the case of such equipment, he arranges with the Inland Revenue that the period of wear and tear allowances to apply to that piece of plant and machinery shall be 20 years, then, under the loan scheme, the period of repayment of the loan will also be 20 years. It follows that each annual repayment against the loan is a sum equal to the annual amount of the wear and tear allowance granted by the Inland Revenue. One cancels the other out or it is an absolute equation.
    Thus, the only cost of the new equipment to the industrialist is the net amount of the interest charged on the loan after deduction of Income Tax. That is a relatively small annual charge, and is more than adequately covered by the additional profit which is earned by the industrial undertaking as a result of the economy in coal at today's relatively—I stress "relatively"—high cost. It is therefore not correct to say that the loan scheme does not carry with it an adequate incentive for the installation of industrial fuel-saving equipment. In its purely fiscal aspects, it has a direct relationship to the proposal of the hon. Member for Gloucestershire, South.
    There is a second point which is of great importance. We inaugurated the loans scheme for industrial fuel-saving equipment on the present more comprehensive basis a matter of only six or eight months ago. Since then, as a result of the proposals made by the Ridley Committee, and later by the Pilkington Committee, an autonomous fuel efficiency organisation for industry has been established, called the National Industrial Fuel
    2390
    Efficiency Service. It is autonomous and largely financed by the National Coal Board, the British Electricity Authority and the nationalised gas industry. That organisation covers every aspect of industrial fuel efficiency and is often responsible for examining schemes submitted for these loans, which are later approved or otherwise by the Ministry of Fuel and Power.
    This fuel efficiency organisation has been in being only since 1st May, 1954. The loans scheme, on its enlarged basis, has been in being for only a little longer. In my view, it would be a grave mistake to try so soon to alter the whole basis of encouraging and stimulating industrial fuel efficiency by changing to the type of incentive which is proposed b) the hon. Member for Gloucestershire, South, supported by the hon. Member for Edmonton. I want to give this new basis, the industrial fuel organisation, and the loans scheme a fair run, at least for 18 months or two years.
    Moreover, as a simple point for the hon. Member for Gloucestershire, South, the effect of the present loan scheme, the lengthened period of repayment and the relating of each annual repayment to the amount of each year's wear and tear allowance on the industrial fuel-economising equipment installed is precisely what he advocated last year. The practical effect of it is a 100 per cent. initial allowance, because it means that the industrialist has to find no money to meet the capital cost of the equipment at all, and year by year has to find no money out of net resources for the repayment of the loan.
    For all those reasons, I hope that my right hon. Friend will think that this Amendment does not represent a suitable means, at this moment, of encouraging industrial fuel efficiency. I hope he will rely upon the schemes already in force. Nothing which I have said should be taken as being in any way derogatory to the cause, which I am glad to say is a non-party political cause, of stimulating greater efficiency in the burning of coal—our single raw material asset in this country and a wasting asset at that—by the very large number of industrial undertakings which have to use it for generating power, for raising steam, for heating and processing, and for a multiplicity of other purposes.
    5.45 p.m.
    Mr. Douglas Houghton: I want to say a few words about administration. We in the House understand policy much better than we understand administration, especially when we are administering the law, in which there can be no ad hoc decisions and no gounds for dealing with taxpayers or other citizens purely on the basis of expediency. Every taxpayer whose circumstances are similar to those of another taxpayer is entitled to expect the same treatment under the Income Tax law as that accorded to the other man, and that is what makes discrimination in tax relief so difficult to administer.
    We should all agree that tax reliefs as a system of economic policy must be used with great care and only when there is an overwhelming case for doing so. I believe that there are much stronger grounds for using tax reliefs as a system of social policy than for using them as a means of economic policy, especially in a society in which industry is largely in the hands of private enterprise.
    There will obviously be difficulties about administration if there is too much discrimination and unless there are ways and means by which the taxpayer can prove his title to the allowance. My hon. Friend the Member for Gloucestershire, South (Mr. Crosland) said that there had been a certain amount of restraint in the course of the Committee stage of the Finance Bill this year, and we are confining ourselves to this single proposal in favour of a measure of tax relief in a direction which right hon. and hon. Members on both sides of the House will agree is important.
    Perhaps the salvation of the Amendment from the administrative point of view is that the Ministry of Fuel and Power would come into it. It seems to me that there are to be some means of satisfying the Inland Revenue—which in terms of practical day-to-day work means the local inspector of taxes—that the money has been so spent and that it has been spent in the manner intended by the Act; and that there is no reason to doubt the facts of the matter. These are the grounds on which some form of discrimination becomes extremely difficult to administer unless we have a staff of technicians and specialists of one kind or another who, by physical inspection, are able to bring the necessary evidence to
    2392
    the Inland Revenue on which it can make its decision.
    Many years ago, when I first went into the Inland Revenue, there was a tax known as Inhabited House Duty, and there was a physical inspection of shops which it was claimed were lock-up shops in order to make sure that there was no living accommodation which was accessible from the business part of the premises. That was repealed many years ago, but I give it as an illustration of the problems which exist when the Inland Revenue does not know whether the facts are as stated by the taxpayer and there are no practical means of finding out.
    If the Inland Revenue says that there are difficulties about this sort of thing, who am I to say that there are not? I have never found that the Inland Revenue exaggerated the difficulties of administration. The chief complaint of the staff is that it underrates them and makes promises to the Chancellor which are extremely difficult to carry out or does not advise him properly of the difficulties of what he proposes to do.
    Any reasonable person looking at this Amendment could say that there are safeguards which will make the Amendment practicable from the point of view of administration, and I trust that in giving the reply which he is already impatient to make—I hope it will be favourable—the Economic Secretary will not devote too much time to the administrative difficulties but will attend to the other and more serious points which support the Amendment moved by my hon. Friend.
    Mr. Maudling: I accept the advice of the hon. Member for Sowerby (Mr. Houghton) about administrative difficulties in this matter, and I prefer to base my arguments on a rather different approach.
    The hon. Member for Edmonton (Mr. Albu) perhaps went a little wide of this Clause in dealing with the problems of the coal-mining industry and the reasons for them. It would be interesting to debate them, but I feel that this is not the time to do so. I shall try to deal with this Amendment, bearing in mind the warning which I receive from time to time from the hon. Member for Gloucestershire, South (Mr. Crosland) to be neither highfalutin nor sub-intellectual. I shall try to follow his own model of brevity and discretion.

    2393
    The proposal here is to give to this particular form of plant and machinery, fuel-saving equipment, a higher investment allowance than to other forms. There is obviously no dispute about the fact that the whole situation gives rise for concern and that coal should be used as economically as possible. The argument is whether this is the right way to encourage more economy in the use of coal by industry.
    My real objection to this proposal is that it introduces discrimination in circumstances in which it is difficult to justify it. During our discussions in Committee we spoke at length on the principle of discrimination and I advanced various reasons why the Government have decided that it is wrong to introduce that principle into the tax structure in circumstances such as these. In moving the Amendment, the hon. Member pointed out that the general question of discrimination is not at issue here, and so I shall not repeat the arguments which I used then. Leaving that on one side, his argument is that here is a very special case on its own, where special tax allowance should be given for this form of equipment because of the great shortage of coal.
    I wonder whether it is as special as all that. Supposing one made this special tax and investment allowance, it would be a net gain to the taxpayer and not merely anticipation. If we gave special concessions in the case of machinery designed to save coal, what about machinery designed to save dollar-costing goods, Petroleum, for example, as was mentioned by the hon. Member for Edmonton. Although the problem of obtaining coal in this country is very great, there is also the problem of ensuring that we get the imports we require.
    Mr. Albu: If we gave a concession of this sort it would save imported petroleum exactly as it would save coal.
    Mr. Maudling: That is exactly my point. The people saving imported petroleum by other methods would ask why they should not receive the same treatment, and I should find it very difficult to argue against that.
    In this case there is special provision made by the Government to encourage firms to install fuel-saving machinery.
    2394
    The hon. Member for Gloucestershire, South used that as an argument that discrimination was already admitted. I cannot accept his argument. The position I have tried to maintain on previous occasions is that it is wrong to discriminate in the tax structure between one taxpayer and another. If we have different rates of investment allowances those rates should clearly apply to different things. Obviously, buildings should be treated differently from plant and machinery, because there is so much difference in the period of life of buildings and of plant and machinery. Here hon. Members are suggesting discrimination between two different kinds of machinery, and it is the opinion of the Government that it is wrong to do that by means of tax concessions.
    But it may be right to assist one form of machinery by special schemes such as loans. Reference has been made this afternoon to the loan scheme, particularly by my hon. Friend the Member for Kidderminster (Mr. Nabarro) who illustrated in a most interesting manner the way in which this loan arrangement works out in the minds of industrial investors. The latest figures reveal that 55 schemes have been approved for loan, amounting to £377,000, and a further 47 schemes, involving £247,000, are under consideration. I think that it is clear, therefore, that considerable progress is being made in that direction.
    What is the position of an industrialist who installs fuel-saving equipment of an efficient kind? I think that it is quite clear from the figures that machinery of this kind—one cannot particularise too much, but broadly speaking I would say fuel-saving equipment of this kind—should pay for itself in terms of fuel economy in four or five years. The industrialist investing in this type of machinery gets the regular capital allowance; a special loan, with the great advantage involved to which my hon. Friend referred; and in addition, under this year's Budget, he will get the investment allowance. So already there is an incentive to an efficient industrialist to install machinery of this kind.
    My conclusion is that what is required is not further financial incentives, but far wider publicity about what is already available. I gained the impression that

    2395
    my hon. Friend the Member for Kidderminster would agree with that point of view, in that he stressed that the present advantages are not sufficiently known among industrialists. He referred to the National Industrial Fuel Efficiency Service, and I understand that they are now promoting a wide publicity campaign to encourage firms to take greater advantage of the Government's loan scheme. I am sure that that is the right way to go about this matter. There are great advantages for industrialists and companies from the installation of this type of machinery.
    Mr. Nabarro: I agree that the National Industrial Fuel Efficiency Service is promoting a vast publicity campaign, but will my hon. Friend call in aid the Treasury information unit? Surely that is the appropriate body to explain the fiscal points to which I referred, by which an industrialist can recover, over a period of years, practically the whole initial cost of the plant and machinery?
    Mr. Maudling: I will certainly consider that suggestion, which I regard as a valuable one.
    I would sum up the attitude of the Government to this Amendment in this way. Here we have fuel-saving plant, and its installation is, generally speaking, a good business proposition for the company concerned. We have a Government scheme involving special loans to encourage industrialists to install that type of machinery. In addition, we have the allowances, and I do not feel that we should be justified in going further, when obviously the advantages already in existence are not fully known.
    I suggest that we concentrate on informing industry of the existing advantages to be obtained from making full use of the Government scheme and from investing in fuel-saving machinery. I am sure that this debate will prove of considerable assistance in furthering that process of education, which is the right way to encourage the use of this equipment.
    Mr. Gaitskell: During the debate on the last Amendment, my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) referred in terms, which might have been complimentary or reproachful, to the way in which I moved the Amendment. He described it as "thorough."
    2396
    I will return him the compliment, or the reproach, by saying that he has done a good job with this Amendment.
    It is not necessary for me to argue the points over again, but I wish to comment on some of the things which the Economic Secretary has said. He rejected this Amendment first, on the ground that if we gave special concessions to the installation of fuel-saving and coal-saving machinery, we ought to do the same for oil. I had some experience in this field as Minister of Fuel and Power, and the fact is that the waste of solid fuel is always far more serious than the waste of oil fuel. I think that is recognised by everyone.
    6.0 p.m.
    We are really concerned here with the out-of-date installations for burning solid fuel. I do not think that the Minister can ride off on the ground that really we ought to do it for oil as well. There has not been a problem with oil but there has been one with solid fuel. There has been not only the problem of the shortage of coal, but the knowledge that coal was being very wastefully used.
    The hon. Gentleman also put forward the usual argument that we could not have discrimination on fiscal matters of this kind. He did not deal adequately with the examples given by my hon. Friends where there is already such discrimination. There is discrimination in the case of ships. The owners are allowed the 40 per cent. initial allowance or the investment allowance, as they think fit. There is no special circumstance there. One cannot call a ship an installation, but it is certainly a form of capital expenditure. Here we have another form.
    I do not accept the argument that we must beware of discrimination. I do not think that it is any more than an anxiety, which I understand, on the part of the Treasury and the officials of the Inland Revenue, that by reason of discrimination in favour of one type of installation they may be driven to having to make similar concessions to others and that the whole matter will get so hopelessly complicated that it will be difficult to administer.
    But as my hon. Friends have pointed out, in this instance we have a very simple criterion to apply. The matter is covered by the second of the two Amendments, namely, the fact that the Ministry of Fuel

    2397
    and Power have all the machinery for deciding whether a piece of fuel-burning equipment does or does not fall within the class which should be encouraged. I do not accept the hon. Gentleman's argument in that respect.
    The third argument was that, while the Government did not see their way to produce discrimination in this field, nevertheless they believed in fuel economy and they were helping out in other ways. The hon. Member for Kidderminster (Mr. Nabarro) made great play with what has been done through the loan scheme. The loan scheme is predominantly for those who are short of capital. That would be a reasonably good argument, in the light of what the hon. Member said, in comparison with initial allowances, but the whole purpose of the investment allowance was to deal with the lack of incentive and not the shortage of capital.
    Though I do not wish in any way to decry the loan scheme, I would say that the difficulty is that it does not provide the incentive. It is all very well to say that industrialists are stupid and that they do not understand that there would be great advantages. That may be true, but the fact remains that industry generally has not gone as far as we would like it to go in this direction. I am not making reproaches now. As a matter of fact, successive Governments over the years have done a very good job on fuel efficiency. The work began during the war and it was carried on later.
    Mr. Nabarro: Would the right hon. Gentleman also admit that successive Governments have pleaded that they cannot give any greater incentives, because that would lead to discrimination? It was the right hon. Gentleman himself who turned down my plea during the consideration of the Finance Bill in 1951 on the very ground of discrimination.
    Mr. Gaitskell: We have had occasional references—and I do not object—
    to the 1951 Budget. I can only repeat that the circumstances in which that Budget was brought in were quite exceptional and refer to the enormous increase in expenditure which we had to face in that year as well as the heavy pressure involved in the early stages of the defence programme on the whole of the engineering industries. That constituted a special situation.
    Now we have a coal situation which is recognised to be causing anxiety in the Government and in the country generally. We know that it is caused by a very sharp increase in coal consumption. There has been an increase in the first half of this year of over 3 million tons. An annual rate of increase of 6 million tons a year is a formidable one to meet, especially if at the same time the National Coal Board has to devote, as it must, a good deal of its resources to long-term development such as the sinking of new pits, reconstruction, and so on.
    It is overwhelmingly clear that a very special effort should be made in fuel economy. Here is an opportunity which I thought the Government would take. They might reasonably have said that this would not be enough that this could not do the trick. Then I should have said that they should try it anyhow, because it is desperately important that we should save fuel. I should have thought that the Government would have jumped at the opportunity to give the additional incentive. There is no need to decry anything else that has been done, but why not do this as well?
    In view of the answer which the Economic Secretary gave, which seemed to us unconvincing in the light of the situation, I suggest to my hon. Friends that we should divide the House.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 224; Noes, 262.

    Division No. 195.]

    AYES

    [6.7 p.m.

    Acland, Sir Richard

    Benn, Hon. Wedgwood

    Brockway, A. F.

    Albu, A. H.

    Benson, G.

    Brook, Dryden (Halifax)

    Allen, Arthur (Besworth)

    Bing, G. H. C.

    Broughton, Dr. A. D. D.

    Allen, Scholefield (Crewe)

    Blackburn, F.

    Brown, Rt. Hon. George (Belper)

    Anderson, Frank (Whitehaven)

    Blenkinsop, A.

    Brown, Thomas (Ince)

    Attlee, Rt. Hon. C. R.

    Blyton, W. R.

    Burke, W. A.

    Awbery, S. S.

    Boardman, H.

    Burton, Miss F. E.

    Bacon, Miss Alice

    Bottomley, Rt. Hon. A. G

    Butler, Herbert (Hackney, S.)

    Balfour, A.

    Bowden, H. W.

    Castle, Mrs. B. A.

    Beattie, J.

    Bowles, F. G.

    Champion, A. J.

    Bence, C. R

    Braddock, Mrs. Elizabeth

    Clunie, J.

    Coldrick, W.

    Irving, W. J. (Wood Green)

    Rhodes, H.

    Collick, P. H.

    Isaacs, Rt. Hon. G. A.

    Richards, R.

    Corbet, Mrs. Freda

    Janner, B.

    Roberts, Goronwy (Caernarvon)

    Cove, W. G.

    Jeger, George (Goole)

    Robinson, Kenneth (St. Pancras, N.)

    Craddock, George (Bradford, S.)

    Jeger, Mrs. Lena

    Rogers, George (Kensington, N.)

    Crosland, C. A. R.

    Jenkins, R. H. (Stechford)

    Ross, William

    Crossman, R. H. S.

    Johnson, James (Rugby)

    Royle, C.

    Daines, P.

    Jones, David (Hartlepool)

    Shackleton, E. A. A.

    Dalton, Rt. Hon. H.

    Jones, Frederick Elwyn (West Ham, S.)

    Shinwell, Rt. Hon. E.

    Darling, George (Hillsborough)

    Jones, Jack (Rotherham)

    Short, E. W.

    Davies, Ernest (Enfield, E.)

    Keenan, W.

    Shurmer, P. L. E.

    Davies, Harold (Leek)

    Kenyon, C.

    Silverman, Julius (Erdington)

    Davies, Stephen (Merthyr)

    Key, Rt. Hon. C. W.

    Silverman, Sydney (Nelson)

    de Freitas, Geoffrey

    King, Dr. H. M.

    Simmons, C. J. (Brierley Hill)

    Deer, G.

    Kinley, J.

    Skeffington, A. M.

    Delargy, H. J.

    Lawson, G. M.

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

    Dodds, N. N.

    Lee, Frederick (Newton)

    Slater, J. (Durham, Sedgefield)

    Donnelly, D. L.

    Lee, Miss Jennie (Cannock)

    Smith, Ellis (Stoke, S.)

    Dugdale, Rt. Hon. John (W. Bromwich)

    Lever, Leslie (Ardwick)

    Smith, Norman (Nottingham, S.)

    Ede, Rt. Hon. J. C.

    Lindgren, G. S.

    Sorensen, R. W.

    Edwards, Rt. Hon. John (Brighouse)

    Lipton, Lt.-Col. M.

    Soskice, Rt. Hon. Sir Frank

    Edwards, W. J. (Stepney)

    McInnes, J.

    Sparks, J. A

    Evans, Albert (Islington, S.W.)

    McLeavy, F.

    Steele, T.

    Evans, Edward (Lowestoft)

    MacPherson, Malcolm (Stirling)

    Stokes, Rt. Hon. R. R.

    Evans, Stanley (Wednesbury)

    Mallalieu, E. L. (Brigg)

    Strachey, Rt. Hon. J.

    Fernyhough, E.

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

    Strauss, Rt. Hon. George (Vauxhall)

    Fienburgh, W.

    Mann, Mrs. Jean

    Summerskill, Rt. Hon. E.

    Fletcher, Eric (Islington, E.)

    Manuel, A. C.

    Swingler, S. T.

    Fellick, M.

    Marquand, Rt. Hon. H. A

    Sylvester, G. O.

    Forman, J. C.

    Mason, Roy

    Taylor, Bernard (Mansfield)

    Fraser, Thomas (Hamilton)

    Mayhew, C. P.

    Taylor, John (West Lothian)

    Freeman, John (Watford)

    Mellish, R. J.

    Taylor, Rt. Hon. Robert (Morpeth)

    Freeman, Peter (Newport)

    Messer, Sir F.

    Thomas, George (Cardiff)

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

    Mikardo, Ian

    Thomas, Iorwerth (Rhondda, W.)

    Gibson, C. W.

    Mitchison, G. R.

    Thomas, Ivor Owen (Wrekin)

    Glanville, James

    Monslow, W.

    Thomson, George (Dundee, E.)

    Gordon Walker, Rt. Hon. P. C.

    Moody, A. S.

    Thornton, E.

    Greenwood, Anthony

    Morgan, Dr. H. B. W.

    Timmons, J.

    Grey, C. F.

    Morley, R.

    Tomney, F.

    Griffiths, Rt. Hon. James (Llanelly)

    Morris, Percy (Swansea, W.)

    Ungoed-Thomas, Sir Lynn

    Hale, Leslie

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

    Usborne, H. C.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Moyle, A.

    Warbey, W. N.

    Hall, John T. (Gateshead, W.)

    Mulley, F. W.

    Weitzman, D.

    Hamilton, W. W.

    Oldfield, W. H.

    Wells, Percy (Faversham)

    Hannan, W.

    Oliver, G. H.

    Wells, William (Walsall)

    Hargreaves, A.

    Orbach, M.

    West, D. G.

    Harrison, J. (Nottingham, E.)

    Oswald, T.

    Hastings, S.

    Padley, W. E.

    Wheeldon, W E.

    Hayman, F. H.

    Paget, R. T.

    Whiteley, Rt. Hon W

    Healey, Denis (Leeds, S.E.)

    Palmer, A. M. F.

    Wigg, George

    Healy, Cahir (Fermanagh)

    Pannell, Charles

    Willey, F. T.

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

    Pargiter, G. A.

    Williams, Rev. Llywelyn (Abertillery)

    Herbison, Miss M.

    Parker, J.

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

    Hewitson, Capt. M.

    Parkin, B. T.

    Williams, W. R. (Droylsden)

    Hobson, C. R.

    Paton, J.

    Willis, E. G.

    Holman, P.

    Peart, T. F.

    Wilson, Rt. Hon. Harold (Heyton)

    Holmes, Horace

    Plummer, Sir Leslie

    Winterbottom, Ian (Nottingham, C.)

    Houghton, Douglas

    Popplewell, E.

    Winterbottom, Richard (Brightside)

    Hoy, J. H.

    Porter, G.

    Woodburn, R. Hon. A.

    Hubbard, T. F.

    Price, J. T. (Westhoughton)

    Wyatt, W. L

    Hudson, James (Ealing, N.)

    Proctor, W. T.

    Yates, V. F.

    Hughes, Emrys (S. Ayrshire)

    Pryde, D. J.

    Younger, Rt Hon. K.

    Hughes, Hector (Aberdeen, N.)

    Pursey, Cmdr. H.

    Hynd, H. (Accrington)

    Reid, Thomas (Swindon)

    TELLERS FOR THE AYES:

    Hynd, J. B. (Attercliffe)

    Reid, William (Camlachie)

    Mr. Wallace and Mr. Wilkins.

    NOES

    Aitken, W. T.

    Bishop, F. P.

    Butcher, Sir Herbert

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

    Black, C. W.

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

    Alport, C. J. M.

    Boothby, Sir R. J. G.

    Campbell, Sir David

    Amery, Julian (Preston, N.)

    Bossom, Sir A. C.

    Carr, Robert

    Amory, Rt. Hon. Heathcoat (Tiverton)

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

    Cary, Sir Robert

    Anstruther-Gray, Major W. J.

    Boyle, Sir Edward

    Channon, H.

    Arbuthnot, John

    Braine, B. R.

    Clarke, Col. Ralph (East Grinstead)

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

    Braithwaite, Sir Albert (Harrow, W)

    Clarke, Brig. Terence (Portsmouth, W.)

    Baldwin, A. E.

    Braithwaite, Sir Gurney

    Cole, Norman

    Banks, Col. C.

    Brooke, Henry (Hampstead)

    Colegate, W. A.

    Barlow, Sir John

    Brooman-White, R. C.

    Conant, Maj. Sir Roger

    Baxter, Sir Beverley

    Browne, Jack (Govan)

    Cooper, Sqn. Ldr. Albert

    Beach, Maj Hicks

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

    Cooper-Key, E. M.

    Bell, Ronald (Bucks, S.)

    Bullard, D. G.

    Craddock, Beresford (Spelthorne)

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

    Bullus, Wing Commander E. E

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

    Birch, Nigel

    Burden, F. F. A

    Crosthwaite-Eyre, Col. O. E

    2400

    2401

    Crouch, R. F.

    Iremonger, T. L.

    Raikes, Sir Victor

    Crowder, Sir John (Finchley)

    Jenkins, Robert (Dulwich)

    Ramsden, J. E.

    Crowder, Petre (Ruislip—Northwood)

    Johnson, Eric (Blackley)

    Rayner, Brig. R.

    Darling, Sir William (Edinburgh, S.)

    Johnson, Howard (Kemptown)

    Redmayne, M.

    Davidson, Viscountess

    Jones, A. (Hall Green)

    Rees-Davies, W. R.

    Davies, Rt. Hn. Clement (Montgomery)

    Joynson-Hicks, Hon. L. W.

    Remnant, Hon. P.

    Deedes, W. F.

    Kaberry, D.

    Renton, D. L. M.

    Digby, S. Wingfield

    Kerby, Capt. H. B

    Ridsdale, J. E.

    Dodds-Parker, A. D.

    Kerr, H. W.

    Roberts, Peter (Heeley)

    Donaldson, Cmdr. C. E. McA

    Lambton, Viscount

    Robertson, Sir David

    Donner, Sir P. W.

    Lancaster, Col. C. G

    Robinson, Sir Roland (Blackpool, S)

    Doughty, C. J. A.

    Langford-Holt, J. A.

    Rodgers, John (Sevenoaks)

    Douglas-Hamilton, Lord Malcolm

    Leather, E. H. C.

    Roper, Sir Harold

    Drayson, G. B.

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

    Russell, R. S.

    Drewe, Sir C.

    Legh, Hon. Peter (Petersfield)

    Ryder, Capt. R. E. D.

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

    Lennox-Boyd, Rt. Hon. A. T.

    Savory, Prof. Sir Douglas

    Duncan, Capt. J. A. L.

    Lindsay, Martin

    Schofield, Lt.-Col. W.

    Duthie, W. S.

    Linstead, Sir H. N.

    Scott, R. Donald

    Eccles, Rt. Hon. Sir D. M

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

    Scott-Miller, Cmdr. R.

    Eden, Rt. Hon. A.

    Lockwood, Lt.-Col. J. C.

    Shepherd, William

    Eden, J. B. (Bournemouth, West)

    Longden, Gilbert

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

    Erroll, F. J.

    Lucas, Sir Joseph (Portsmouth, S.)

    Smithers, Peter (Winchester)

    Finlay, Graeme

    Lucas, P. B. (Brentford)

    Smithers, Sir Waldron (Orpington)

    Fisher, Nigel

    Lucas-Tooth, Sir Hugh

    Snadden, W. McN.

    Fleetwood-Hesketh, R. F

    McCorquodale, Rt. Hon. M S

    Spearman, A. C. M.

    Fletcher-Cooke, C.

    Macdonald, Sir Peter

    Speir, R. M.

    Ford, Mrs. Patricia

    Mackeson, Brig. Sir Harry

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

    Fort, R.

    Mackie, J. H. (Galloway)

    Stanley, Capt. Hon. Richard

    Foster, John

    Maclay, Rt. Hon. John

    Stevens, Geoffrey

    Fraser, Hon. Hugh (Stone)

    Maclean, Fitzroy

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

    Fraser, Sir Ian (Morecambe & Lonsdale)

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

    Stewart, Henderson (Fife, E.)

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

    MacLeod, John (Ross and Cromarty)

    Stoddart-Scott, Col. M.

    Galbraith, T. G. D. (Hillhead)

    Macmillan, Rt. Hon. Harold (Bromley)

    Storey, S.

    Gammans, L. D.

    Macpherson, Niall (Dumfries)

    Strauss, Henry (Norwich, S.)

    George, Rt. Hon. Maj. G. Lloyd

    Maitland, Patrick (Lanark)

    Stuart, Rt. Hon. James (Moray)

    Glover, D.

    Manningham-Buller, Rt. Hn. Sir Reginald

    Summers, G. S.

    Godber, J. B.

    Markham, Major Sir Frank

    Sutcliffe, Sir Harold

    Gomme-Duncan, Col. A

    Marlowe, A. A. H.

    Taylor, William (Bradford, N.)

    Gough, C. F. H.

    Marples, A. E.

    Teeling, W.

    Gower, H. R.

    Marshall, Douglas (Bodmin)

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

    Graham, Sir Fergus

    Maude, Angus

    Thomas, Leslie (Canterbury)

    Grimond, J.

    Maudling, R.

    Thornton-Kemsley, Col. C. N.

    Grimston, Hon. John (St. Albans)

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

    Tilney, John

    Grimston, Sir Robert (Westbury)

    Medlicott, Brig. F.

    Touche, Sir Gordon

    Hall, John (Wycombe)

    Mellor, Sir John

    Turner, H. F. L.

    Hare, Hon. J. H.

    Molson, A. H. E.

    Turton, R. H.

    Harris, Frederic (Croydon. N)

    Moore, Sir Thomas

    Tweedsmuir, Lady

    Harrison, Col. J. H. (Eye)

    Morrison, John (Salisbury)

    Vane, W. M. F.

    Harvey, Ian (Harrow, E.)

    Nabarro, G. D. N.

    Vaughan-Morgan, J. K.

    Harvie-Watt, Sir George

    Neave, Airey

    Vosper, D. F.

    Hay, John

    Nicholls, Harmar

    Wade, D. W.

    Head, Rt. Hon. A. H.

    Nicolson, Nigel (Bournemouth, E.)

    Wakefield, Edward (Derbyshire, W.)

    Heald, Rt. Hon. Sir Lionel

    Nield, Basil (Chester)

    Wakefield, Sir Wavell (St. Marylebone)

    Heath, Edward

    Noble, Comdr. A. H. P.

    Walker-Smith, D. C.

    Higgs, J. M. C.

    Nugent, G. R. H.

    Wall, Major Patrick

    Hill, Dr. Charles (Luton)

    Nutting, Anthony

    Ward, Hon. George (Worcester)

    Hill, Mrs. E. (Wythenshawe)

    Oakshott, H. D.

    Ward, Miss I. (Tynemouth)

    Hinchingbrooke, Viscount

    Odey, G. W.

    Waterhouse, Capt. Rt. Hon. C.

    Hirst, Geoffrey

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

    Watkinson, H. A.

    Holland-Martin, C. J

    Orr, Capt. L. P. S.

    Webbe, Sir H. (London & Westminster)

    Holt, A. F.

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

    Wellwood, W.

    Hopkinson, Rt. Hon. Henry

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

    Williams, Gerald (Tonbridge)

    Hornsby-Smith, Miss M. P.

    Page, R. G.

    Williams, Sir Herbert (Croydon, E.)

    Horobin, I. M.

    Peake, Rt. Hon. O.

    Williams, Paul (Sunderland, S.)

    Horsbrugh, Rt. Hon. Flerence

    Peto, Brig. C. H. M.

    Williams, R. Dudley (Exeter)

    Howard, Gerald (Cambridgeshire)

    Peyton, J. W. W.

    Wills, G.

    Howard, Hon. Greville (St. Ives)

    Pickthorn, K. W. M.

    Wilson, Geoffrey (Truro)

    Hudson, Sir Austin (Lewisham, N.)

    Pilkington, Capt. R. A.

    Wood, Hon. R.

    Hulbert, Wing Cdr. N. J.

    Pitman, I. J.

    Hurd, A. R.

    Pitt, Miss E. M.

    TELLERS FOR THE NOES:

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

    Powell, J. Enoch

    Mr. Studholme and

    Hyde, Lt.-Col. H. M.

    Price, Henry (Lewisham, W.)

    Mr. Richard Thompson.

    Hylton-Foster, H. B. H.

    Prior-Palmer, Brig. O. L.

    Clause 27.—(REDUCED RATE OF DUTY ON CERTAIN BUSINESS ASSETS.)
    6.15 p.m.
    Mr. F. J. Erroll: I beg to move, in page 29, line 25, at the end, to insert:
    Where an interest in a partnership passes on death the deceased shall be deemed to have
    2402
    an interest in the hereditaments and machinery or plant referred to corresponding to his interest in the partnership assets.
    The Amendment is intended to deal with partnerships so far as they are affected by the Clause and is designed to remedy a legal gap in the relief proposals. As I understand the position—in this

    2403
    complicated field I am open to correction by the Financial Secretary—in the case of a partnership at will—that is to say, one without a partnership agreement—a share in the real property of the partnership does not pass on the death of a partner.
    These situations are governed by Section 33 (1) of the Partnership Act, 1890, which holds that on a partner's death the partnership is dissolved. What then happens is that the deceased partner's interest in the firm has to be ascertained according to rules set out in Section 44 of the Act, and the interest becomes a sum of money constituting a debt due from the surviving partners to the estate of the deceased.
    I imagine that in these circumstances—here I shall welcome the elucidation of the Financial Secretary—it will be held that what passes is not an interest in an industrial business, whether hereditament, plant or machinery, but a mere money claim, which would not qualify for the relief which the Clause proposes to provide.
    Nevertheless, this seems to me to be a case where relief should be given, and I will show how I imagine it should operate. It might, in the first place, be argued that the efficiency of the partnership would not be affected by the death of one of the partners, particularly as under the Partnership Act the interest in the partnership is dissolved on the death of a partner. However, in this sort of business there is usually a very strong family connection, and although the interest in the partnership might be held to be dissolved, the probability is that a relation of the deceased partner would wish to enter the business as a partner, or, if he was already in the business as a junior, would wish to become a partner.
    The surviving individual would in all probability be one of the principal beneficiaries under the will of the deceased partner, because he would be a close relation, and as a beneficiary, and no doubt the principal beneficiary, he would only be receiving money with which to buy himself back into the partnership and it would be after that money had borne Estate Duty at the appropriate rate. He would then, in fact, be less well equipped than he should be to restore to the partnership the working capital which it required in order to maintain itself. He
    2404
    would be worse off to the extent that, as matters stand at present, he would not be able to get the relief which the Clause ought to be designed to give him.
    The efficiency of such partnerships will be affected if the relief is not given, and the reasons are the same as those in the case of other family businesses. I hope very much that the Government will accept this small Amendment which closes a legal gap in their relief proposals.
    Mr. John Arbuthnot: I beg to second the Amendment.
    My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) has moved the Amendment so thoroughly and with such clarity that very little remains to be said. The Amendment follows on naturally from the provisions which the Government have introduced in Clause 27 of this Bill, in which relief is given to industrial hereditaments. Its purpose is to ensure that partnerships, and particularly partnerships in which there is no partnership agreement, are included in the benefits given by Clause 27.
    The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): My hon. Friends have made it clear that they, are concerned with the application of the benefits given by this Clause to the cases of partnerships. I have studied their Amendment carefully, and, as it is phrased, I must say that it would not have the effect of extending the provisions of the Bill in this respect at all.
    Where, under the Clause as it stands, an interest in a partnership, which is the expression used in the Amendment, passes, it does receive, proportionately, the benefits of the Clause, and therefore in that case there is no legal gap, to adopt the phrase used by my hon. Friend the Member for Altrincham and Sale (Mr. Erroll). But, as I understand his speech, my hon. Friends are not so much concerned with that, but with the wider question, much more frequently arising, of whether, on the death of a partner, what passes is not part of the interest in the partnership, but, in the much more usual case, a sum of money, and in that case, as I think my hon. Friends have indicated, the provisions of this Clause do not apply. Therefore, though the Clause as it stands deals only with the passing of an interest in a partnership, I think that, in view of the interest of my hon. Friends

    2405
    in the other and much more frequent case, when what passes is a sum of money, I, should say a word or two about the general merits of the matter.
    I agree that the passing of a sum of money is the more frequent where there is a partnership deed. Whether what passes is an interest in a partnership or a sum of money depends on the terms of the deed, and therefore, in the drawing up of a partnership deed, it is very much a matter for the partners concerned whether they desire to frame their partnership deed in a way which will attract the benefits of this Clause or not. On the other hand, in the case of a partnership at will, the Partnership Act, 1890, in Section 33, provides that what passes shall be a sum of money, and these are really the cases with which my hon. Friends are concerned, because, in respect of a partnership deed, it depends on the way it is framed, and we can assume that in framing it the partners will do it in such a way as to suit their particular circumstances.
    My hon. Friends say that, in the case of a partnership at will, the benefit of this Clause should be given. It is true that, in the sort of case to which my hon. Friends have referred—the case where the money passes to a near relative, who desires to continue the partnership business—there is an argument in favour of extending the benefits of this Clause to that sort of case, but that is not the only case by any means, and we must deal with this matter on the broad general merits, which are these.
    Where, on a death, a partner has to pay a sum of money to the executors of the deceased, it is of no significance at all to the partnership whether that sum of money is paid net or gross of Estate Duty. It is of great interest to the dependants of the deceased partner, but, as far as the partnership is concerned, and as far as its continued operation as a business is concerned, if it has to pay, say, £50,000, it makes no difference at all to the working of the partnership whether or not that £50,000 is paid over entire to the executors and they have to find the appropriate sum in Estate Duty; the working of the partnership is not affected one way or another.
    On that basis, it really seems to me that the proposal of my hon. Friends, though it appeals naturally to one's sympathies, in respect of the beneficiaries of
    2406
    the deceased person's estate is not really within the intention of this Clause as it was outlined by my right hon. Friend. My right hon. Friend made it clear that one of the major purposes of this Clause was to assist the operation of the family business, of which a partnership is a particular example, and the proposal in the Amendment to extend the benefits of this Clause would extend it into a sphere where the health of the family business does not really arise. Looking at the matter from a purely sympathetic and compassionate point of view, we should be driven by this Amendment to extend the ambit of the Clause very widely.
    For these reasons, and quite apart from the fact that the actual drafting of the Amendment does not achieve what my hon. Friends want it to do, on the merits of the matter it would not be possible to accept this proposal, involving some departure, though not a very great one, from the main purpose of the Clause. I appreciate, however, the intention with which the Amendment was put forward, and, indeed, would not wish in any way to diminish the very valuable share which partnership activities take in the economic and industrial life of the country.
    Mr. Erroll: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Glenvil Hall: I beg to move, in page 31, line 34, after "into," to insert:
    "before or is entered into within three years after the death."
    This Clause deals with the partial relief from Estate Duty given to family businesses, and subsection (9), to which our Amendment relates, deals with those businesses and companies to which relief will not be granted The Amendment is designed to close a gap of a very different kind from that which has been referred to by the hon. Member who moved the last Amendment. This matter was fairly fully' debated in Committee, when my hon. Friend the Member for Islington. East (Mr. E. Fletcher), with his usual lucidity and brevity, moved this particular Amendment with such clarity that even the right hon. and learned Gentleman the Solicitor-General had to agree that there was a great deal of substance and force in what he had said.
    In fact, when the Solicitor-General began his speech, we had great hopes that

    2407
    he was going to accept the Amendment, but, having said that there was everything in the point put forward, he went on to erect what we thought were Aunt Sallies in order to knock them down again, and to show that, although there might be something in it, and although, in fact, there was everything in what my hon. Friend had said, nevertheless there were certain difficulties. The Government, however, would watch the matter very carefully during the coming year.
    6.30 p.m.
    The Solicitor-General gave what we thought were very insubstantial reasons for turning down the Amendment. I listened to what he said with great care, and I re-read it. His chief reason for turning down the Amendment, in spite of the fact that he thought it reasonable, was that there might be a sale
    "because there is no suitable member of the family left to run the business."
    A more fantastic reason for turning down the Amendment was
    "because the surviving member of the family does not consider it suitable for him to run."—[OFFICIAL REPORT, 24th June, 1954; Vol. 529, c. 726.]
    That surely cuts the whole ground from under the concession of 45 per cent., which is a considerable one. It is to be given only because there is a certain amount of feeling that family businesses, after paying Estate Duty, would find themselves deprived of assets necessary for the continuance of the business on the family basis, and would have to be broken up and sold. It was demonstrated beyond all doubt by the Inland Revenue, after going into this matter at some length, that there was very little in the suggestion that family businesses had had to be liquidated wholesale from one end of the country to another. Nevertheless, the Government moved the Clause, and we were willing to accept it because we wanted to be reasonable.
    Here undoubtedly is a loophole which should be closed. We are suggesting in our Amendment that if a sale takes place within a period of three years after the death, the full weight of Estate Duty should apply to the estate. We think that is reasonable, and it is obvious that the Government think it is reasonable, but they will not accept our suggestion. They did not put it into the Bill them-
    2408
    selves, and they dislike accepting it from this side of the House. They also think that the Estate Duty department might have a little extra work to do in watching these estates over the proposed longer period.
    The arguments from our side of the Committee were so strong that the Chancellor of the Exchequer had to intervene, following the Solicitor-General, and he, like the Solicitor-General, agreed that there was a great deal in our contention. He said that he would watch the situation, but added that nothing could be done this time. It is absurd to leave this matter over for a further period of years. If we leave the stable door open all that time, a good many horses will have disappeared. There is no reason why, if the Government make this concession, it should not be as watertight as possible.
    The arguments used by the Chancellor of the Exchequer and the Solicitor-General were not very convincing. If the surviving member of the family does not want to carry on the business, obviously it will cease to be a family business. If the family takes steps within a reasonable period—we say three years—to sell the business, the obvious intention is not to continue it on the family basis, and we do not see why relief should be granted in those circumstances.
    I have every confidence that the Solicitor-General, having slept on this matter, having considered what was said then and what was said then having sunk in, is now about to rise in this place and say that, on behalf of the Government, he accepts the Amendment which I now move.
    Mr. Grimond: I would say one word on this Amendment. Its purpose was clearly stated in the Committee, and has been reiterated by the right hon. Member for Colne Valley (Mr. Glenvil Hall). It is designed to prevent a man from buying up a family business simply for the purpose of getting a lower rate of death duty. His heirs, having no interest in the business, will probably sell it or its assets, thereby defeating the very purpose which the Chancellor of the Exchequer had in mind in giving this concession. This is not an unlikely event. I have already seen advertisements in newspapers offering for sale family businesses, and pointing out that they will be liable only to a lower rate of death duty.

    2409
    The right hon. Member for Colne Valley criticised some parts of the Solicitor-General's speech in Committee. Some of his arguments did not seem very conclusive against the Amendment then moved. I would draw attention to another part of the speech of the Solicitor-General. It was apparent that he agreed that there was a loophole and that it was undesirable that the concession should be used by people who simply wanted to get a lower rate of death duty. He went on to say:
    "One does not wish to take those steps in advance. In my view, it is better to keep a close watch on the position to see whether exploitation does take place, and, if so, to note what devices are used and to stop the use of them."—[OFFICIAL REPORT, 24th June. 1954; Vol. 529, c. 728–9.]
    If there are obvious loopholes in the Clause, we ought to stop them up now. Otherwise, the quickest and cleverest men will get through them and then steps will be taken to stop the loopholes retrospectively, which will be highly objectionable. If it is not done retrospectively some people will have got away with it; I do not say immorally and certainly not illegally, but in a way which the House and the Government think undesirable. In due course, other people who are in exactly the same position will be unable to do the same thing.
    This method of dealing with fiscal legislation, in which draft Bills are put forward with obvious doubts and loopholes is objectionable. It may in some cases prove necessary to amend fiscal provisions against unforeseen results, but to leave obvious loopholes in its provisions should not be a method which the Government advocate while the Bill is still under debate. They should not be stopped up retrospectively. I think what the Solicitor-General had in mind, when he spoke about people who take advantage of the Clause, was that they might be brought in by some form of retrospective legislation. That surely would be highly undesirable.
    The Solicitor-General (Sir Reginald Manningham-Buller): In moving the Amendment, the right hon. Member for Colne Valley (Mr. Glenvil Hall) raised a subject which we discussed, and I would say very fully discussed, in the Committee. He hardly did justice to the arguments advanced from this side of the Committee, and he has quite clearly
    2410
    quoted two passages from my speech right out of context. He has confused illustration with argument. I will make no point about that. This is a narrower Amendment than the one we discussed on that occasion.
    Mr. Glenvil Hall Mr. Glenvil Hall rose—
    The Solicitor-General: I hope the right hon. Gentleman will let me reply. We want to get on to the next debate, on much bigger issues.
    Mr. Glenvil Hall: The right hon. and learned Gentleman made an assertion which makes it appear that I have been unfair to him and to the arguments that he advanced in Committee. I quoted what he actually said. The rest of his argument advocated an Amendment which was taken at the same time, and which was moved by the hon. Member for Orkney and Shetland (Mr. Grimond).
    The Solicitor-General: I think that the right hon. Gentleman was unfair to my argument, because he took sentences completely out of their context. Anyone can form his own opinion about that by looking at the OFFICIAL REPORT.
    I would remind the House that the Amendment now moved is narrower than the one then under discussion, and is consequently more objectionable than the previous one which sought to deal not only with the case of a private business for sale, but also with the case of a company which was wound up within the period. I then indicated that one of the difficulties in dealing with companies was where the company was not wound up but there was a sale of shares. It is, in fact, very difficult to overcome that possible way of operating.
    This Amendment is the more objectionable because, were it accepted, it would apply only to private businesses and not to companies which would be affected by subsection (2, b). That is a very strong objection to the Amendment. I say now, as I said on the last occasion, that there is some substance in the point put forward, and the right hon. Gentleman is quite wrong in thinking that we are not prepared to recognise the force of any arguments advanced from the benches opposite.
    It really would be wrong to accept this Amendment not only for the reasons which I advanced on the last occasion

    2411
    but because it would not cover the held to anything like the same extent as the previous Amendment, unsatisfactorily as it was covered by that Amendment. I dealt, I hope, satisfactorily with the Amendment discussed at the same time in the name of the hon. Member for Orkney and Shetland (Mr. Grimond). I then indicated the hardship that the time-limit which he proposed to impose might create.
    To give another example, If a time limit were imposed, for even three years, only in relation to businesses, it would be very hard and unfair where a death occurs and where someone of the family carries on a business coming within the intentions of this Clause and then, within the three-year period, the person carrying on the family business dies and there is no one left to continue it. In such a case, the benefit of this Clause would be taken away. That, I think, would be very hard.
    The difficulty here is to distinguish between operations designed to abuse the provisions of the Clause, and what I might call the unfortunate events which occur, where there is no intent to engage in tax avoidance or to secure an improper tax benefit. That difficulty of distinguishing between the two makes it impossible at the present moment to accept any Amendment on the lines suggested.
    If such an Amendment were accepted, it would mean that one would have to hit a number of such unfortunate cases as well as hitting some of those one would want to hit. I reiterate once again that, although in this instance there is great force in the argument, we hope that there will not, in fact, be abuse of the Clause. If there is, it may possibly take one of two or three different forms. But directly we see which form, if any, emerges, I can assure the House that we shall give immediate consideration to preventing the use of that form, without injuring the genuine family business of the sort I have instanced.
    6.45 p.m.
    My right hon. Friend the Chancellor, when he took part in the debate, said that he thought it more likely that we should adhere to our decision to allow the Clause to operate, and that then, if any abuse should arise in future years,
    2412
    we should deal with it in the light of experience. We have given most careful consideration to the point, because, as I have indicated all along, we feel that there is some substance in the view advanced as to the possibility of the improper use of the Clause.
    Having given further consideration to the matter, we adhere to our view, having regard to all the circumstances, that it is better to retain the Clause as it now stands. I hope that I have not dealt with the point too shortly, and, equally, that I have not dealt with it at too great a length. I have confined my remarks to perhaps a shorter compass than I might otherwise have done because we discussed the matter very fully in Committee, and because I know that the House wants to get on to the next Clause, which raises some very big issues.
    Mr. Eric Fletcher: It is perfectly true that the House wants to get on to the next Clause, which raises some very big issues, but I do not think that the House would be content to do that until it had dealt satisfactorily with this Clause. I do not believe that anyone listening to the right hon. and learned Gentleman would really regard the explanation which he has given this evening as being in any way satisfactory.
    What did the Solicitor-General say? He started by complaining that my right hon. Friend had today moved an Amendment in a more limited form than the one which was considered in Committee. He then went on to say that one of his reasons for rejecting the Amendment was that it was not precisely the same as the earlier Amendment, to which he adduced arguments in opposition in Committee.
    We are not concerned with the other Amendment; we are concerned today with dealing with a matter which both the Solicitor-General and the Chancellor recognises as being a serious and genuine complaint. Indeed, in urging us to come to a decision on the last occasion, the Chancellor said that he recognised the spirit of perfect sincerity in which the Amendment was put forward.
    I think that we are perfectly entitled to complain that on this Clause we have been treated with very scant civility by the Solicitor-General. He really has not done justice to the arguments put forward by my right hon. Friend. Here is a case

    2413
    in which, admittedly, there is the possibility of considerable abuse of these concessions. In fact, the hon. Member for Orkney and Shetland (Mr. Grimond) pointed out that it is apparent, from advertisements already appearing in the Press, that some subtle persons have already discovered that quite advantageous benefits can be obtained by purchasing, shortly after the death of an individual, businesses which have benefited from this concession in respect of Estate Duty.
    What were the arguments put forward by the Solicitor-General for opposing this Amendment? In Committee, his chief argument was that if Estate Duty was allowed to remain in suspense for more than three years, it would involve the Estate Duty Office in a duty to supervise all estates during that period. In other words, he put forward an administrative difficulty. All hon. Members who have any experience of these matters know perfectly well that it is part of the job of the Estate Duty Office to keep watch on estates over a long period of years. Claims frequently arise for the revision of Estate Duty and Succession Duty and no real administrative difficulty arises in this connection.
    Even if it did, the Solicitor-General contradicted himself both in Committee and today by saying that, instead of accepting this Amendment, he preferred to keep a close watch on the matter. How can he keep a close watch on the matter unless he imposes on the Estate Duty Office precisely the same responsibility of supervising these matters which he gave as one of the administrative difficulties for not accepting the Amendment? That argument strikes me as being so hollow and insincere that I do
    not think the right hon. and learned Gentleman could have intended to put it forward seriously.
    Here is a situation in which, as both the Chancellor and the Solicitor-General have recognised, there is the possibility that this provision will be exploited for ulterior purposes, and the possibility certainly that, if it is exploited for those ulterior purposes, it will defeat the whole object of these Estate Duty concessions, which are reserved for the continuity of family businesses. In the light of evidence which has already accumulated, surely it is monstrous for the Solicitor-General to refuse this Amendment on the grounds which he has given.
    He said that the Amendment does not go far enough and that, if he accepted it, there should be another Amendment to deal with cases of companies being wound up. We are concerned not with the technicalities of draftsmanship but with the acceptance of the principle. I think it perfectly disgraceful that the Solicitor-General—particularly in view of what he and the Chancellor said in Committee—should have adopted this completely unrelenting attitude this evening. During the Committee stage of the Finance Bill we did not have a single concession, despite the numerous Amendments which were put forward. I can only regard the Government's attitude in these matters as being completely obscurantist and indefensible. For those reasons, I hope that my hon. and right hon. Friends will carry their views into the Division Lobby.
    Question put, "That those words be there inserted in the Bill."
    The Committee divided: Ayes, 217; Noes, 249.

    Division No. 196.]

    AYES

    [6.53 p.m.

    Acland, Sir Richard

    Braddock, Mrs. Elizabeth

    Crossman, R. H. S.

    Allen, Arthur (Bosworth)

    Brockway, A. F.

    Daines, P.

    Allen, Scholefield (Crewe)

    Brock, Dryden (Halifax)

    Dalton, Rt. Hon. H.

    Anderson, Frank (Whitehaven)

    Broughton, Dr. A. D. D.

    Darling, George (Hillsborough)

    Attlee Rt. Hon. C. R.

    Brown, Rt. Hon. George (Belper)

    Davies, Ernest (Enfield, E.)

    Awbery, S. S.

    Brown, Thomas (Ince)

    Davies, Harold (Leek)

    Bacon, Miss Alice

    Burke, W. A.

    Davies Stephen (Merthyr)

    Beattle, J.

    Burton, Miss F. E.

    de Freitas, Geoffrey

    Bence, C. R.

    Butler, Herbert (Hackney, S.)

    Deer, G.

    Benn, Hon. Wedgwood

    Castle, Mrs. B. A.

    Delargy, H. J.

    Benson, G.

    Champion, A. J.

    Dodds, N. N.

    Bing, G. H. C.

    Clunie, J.

    Donnelly, D. L.

    Blackburn, F.

    Coldrick, W.

    Dugdale, Rt. Hon. John (W. Bromwich)

    Blenkinsop, A.

    Collick, P. H.

    Ede, Rt. Hon. J. C.

    Blyton, W. R.

    Corbet, Mrs. Freda

    Edwards, Rt. Hon. John (Brighouse)

    Boardman, H.

    Cove, W. G.

    Edwards, W. J. (Stepney)

    Bottomley, Rt. Hon. A. G.

    Craddock, George (Bradford, S.)

    Evans, Albert (Islington, S.W.)

    Bowles, F. G.

    Crosland, C. A. R.

    Evans, Edward (Lowestoft)

    Evans, Stanley (Wednesbury)

    Kinley, J.

    Rogers, George (Kensington, N.)

    Fernyhough, E.

    Lawson, G. M.

    Ross, William

    Fienburgh, W.

    Lee, Frederick (Newton)

    Royle, C.

    Fletcher, Eric (Islington, E.)

    Lee, Miss Jennie (Cannock)

    Shackleton, E. A. A.

    Follick, M.

    Lever, Leslie (Ardwick)

    Shinwell, Rt. Hon. E.

    Forman, J. C.

    Lindgren, G. S.

    Short, E. W.

    Fraser, Thomas (Hamilton)

    Lipton, Lt.-Col. M.

    Shurmer, P. L. E.

    Freeman, John (Watford)

    McInnes, J.

    Silverman, Julius (Erdington)

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

    McLeavy, F.

    Silverman, Sydney (Nelson)

    Gibson, C. W.

    Mallalieu, E. L. (Brigg)

    Simmons, C. J. (Brierley Hill)

    Glanville, James

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

    Skeffington, A. M.

    Gordon Walker, Rt. Hon. P. C.

    Mann, Mrs. Jean

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

    Greenwood, Anthony

    Manuel, A. C.

    Slater, J. (Durham, Sedgefield)

    Grey, C. F.

    Marquand, Rt. Hon. H. A

    Smith, Ellis (Stoke, S.)

    Griffiths, Rt. Hon. James (Llanelly)

    Mason, Roy

    Smith, Norman (Nottingham, S.)

    Grimond, J.

    Mayhew, C. P.

    Sorensen, R. W.

    Hale, Leslie

    Mellish, R. J.

    Soskice, Rt. Hon. Sir Frank

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Messer, Sir F.

    Sparks, J. A.

    Hall, John T. (Gateshead, W.)

    Mikardo, Ian

    Steele, T.

    Hannan, W.

    Mitchison, G. R.

    Stokes, Rt. Hon. R. R.

    Hargreaves, A.

    Monslow, W.

    Strachey, Rt. Hon. J.

    Hastings, S.

    Moody, A. S.

    Strauss, Rt. Hon. George (Vauxhall)

    Hayman, F. H.

    Morgan, Dr. H. B. W.

    Summerskill, Rt. Hon. E.

    Healey, Denis (Leeds, S.E.)

    Morley, R.

    Sylvester, G. O.

    Healy, Cahir (Fermanagh)

    Morris, Percy (Swansea, W.)

    Taylor, Bernard (Mansfield)

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

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

    Taylor, John (West Lothian)

    Herbison, Miss M.

    Moyle, A.

    Taylor, Rt. Hon. Robert (Morpeth)

    Hewitson, Capt. M.

    Mulley, F. W.

    Thomas, George (Cardiff)

    Hobson, C. R.

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

    Thomas, Ivor Owen (Wrekin)

    Holman, P.

    Oldfield, W. H.

    Thomson, George (Dundee, E.)

    Holmes, Horace

    Oliver, G. H.

    Thornton, E.

    Holt, A. F.

    Orbach, M.

    Timmons, J.

    Houghton, Douglas

    Oswald, T.

    Tomney, F.

    Hoy, J. H.

    Padley, W. E.

    Ungoed-Thomas, Sir Lynn

    Hubbard, T. F.

    Paget, R. T.

    Wade, D. W.

    Hudson, James (Ealing, N.)

    Palmer, A. M. F.

    Warbey, W. N.

    Hughes, Emrys (S. Ayrshire)

    Pannell, Charles

    Weitzman, D.

    Hughes, Hector (Aberdeen, N.)

    Pargiter, G. A.

    Wells, Percy (Faversham)

    Hynd, H. (Accrington)

    Parker, J.

    Wheeldon, W. E.

    Hynd, J. B. (Attercliffe)

    Parkin, B. T.

    Whiteley, Rt. Hon. W.

    Irvine, A. J. (Edge Hill)

    Paton, J.

    Wigg, George

    Irving, W. J. (Wood Green)

    Peart, T. F.

    Wilkins, W. A.

    Isaacs, Rt. Hon. G. A.

    Plummer, Sir Leslie

    Willey, F. T.

    Janner, B.

    Popplewell, E.

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

    Jeger, George (Goole)

    Porter, G.

    Williams, W. R. (Droylsden)

    Jeger, Mrs. Lena

    Price, J. T. (Westhoughton)

    Willis, E. G.

    Jenkins, R. H. (Stechford)

    Proctor, W. T.

    Wilson, Rt. Hon. Harold (Huyton)

    Johnson, James (Rugby)

    Pryde, D. J.

    Winterbottom, Ian (Nottingham, C.)

    Jones, David (Hartlepool)

    Pursey, Cmdr. H.

    Winterbottom, Richard (Brightside)

    Jones, Frederick Elwyn (West Ham, S.)

    Reid, Thomas (Swindon)

    Woodburn, Rt. Hon. A.

    Jones, Jack (Rotherham)

    Reid, William (Camlachie)

    Wyatt, W. L.

    Keenan, W.

    Rhodes, H.

    Yates, V. F.

    Kenyon, C.

    Richards, R.

    Younger, Rt. Hon. K.

    Key, Rt. Hon. C. W

    Roberts, Goronwy (Caernarvon)

    King, Dr. H. M.

    Robinson, Kenneth (St. Pancras, N.)

    TELLERS FOR THE AYES:

    Mr. Bowden and Mr. Wallace

    NOES

    Aitken, W. T.

    Billiard, D. G.

    Doughty, C. J. A.

    Alport, C. J. M.

    Bullus, Wing Commander E. E

    Douglas-Hamilton, Lord Malcolm

    Amery, Julian (Preston, N.)

    Burden, F. F. A.

    Drayson, G. B.

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Butcher, Sir Herbert

    Drewe, Sir C.

    Anstruther-Gray, Major W. J.

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

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

    Arbuthnot, John

    Campbell, Sir David

    Duncan, Capt. J. A. L.

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

    Carr, Robert

    Duthie, W. S.

    Baldwin, A. E.

    Cary, Sir Robert

    Eden, Rt. Hon. A.

    Banks, Col. C.

    Channon, H.

    Eden, J. B. (Bournemouth, West)

    Barlow, Sir John

    Clarke, Col. Ralph (East Grinstead)

    Erroll, F. J.

    Baxter, Sir Beverley

    Clarke, Brig. Terence (Portsmouth, W.)

    Finlay, Graeme

    Beach, Maj. Hicks

    Cole, Norman

    Fisher, Nigel

    Bell, Ronald (Bucks, S.)

    Colegate, W. A.

    Fleetwood-Hesketh, R. F.

    Birch, Nigel

    Conant, Maj. Sir Roger

    Fletcher-Cooke, C.

    Bishop, F. P.

    Cooper, Sqn. Ldr. Albert

    Ford, Mrs. Patricia

    Black, C W.

    Craddook, Beresford (Spelthorne)

    Fort, R.

    Boothby, Sir R. J. G.

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

    Foster, John

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

    Crosthwaite-Eyre, Col. O. E.

    Fraser, Hon. Hugh (Stone)

    Boyle, Sir Edward

    Crowder, Sir John (Finchley)

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Braine, B. R.

    Crowder, Petre (Ruislip—Northwood)

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

    Braithwaite, Sir Albert (Harrow, W)

    Darling, Sir William (Edinburgh, S.)

    Galbraith, T. G. D. (Hillhead)

    Braithwaite, Sir Gurney

    Deedes, W. F.

    George, Rt. Hon. Maj. G. Lloyd

    Brooke, Henry (Hampstead)

    Digby, S. Wingfield

    Glover, D.

    Brooman-White, R. C.

    Dodds-Parker, A. D.

    Godber, J. B.

    Browne, Jack (Govan)

    Donaldson, Cmdr. C E McA

    Gomme-Duncan, Col. A

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

    Donner, Sir P. W.

    Gough, C. F. H

    2416

    2417

    Gower, H. R.

    Mackeson, Brig. Sir Harry

    Roper, Sir Harold

    Graham, Sir Fergus

    Mackie, J. H. (Galloway)

    Russell, R. S.

    Grimston, Hon. John (St. Albans)

    Maclay, Rt. Hon. John

    Ryder, Capt. R. E. D.

    Grimston, Sir Robert (Westbury)

    Maclean, Fitzroy

    Savory, Prof. Sir Douglas

    Hall, John (Wycombe)

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

    Schofield, Lt.-Col. W.

    Hare, Hon. J. H.

    MacLeod, John (Ross and Cromarty)

    Scott, R. Donald

    Harris, Frederic (Croydon, N.)

    Macmillan, Rt. Hon. Harold (Bromley)

    Scott-Miller, Cmdr. R.

    Harrison, Col. J. H. (Eye)

    Macpherson, Niall (Dumfries)

    Shepherd, William

    Harvey, Ian (Harrow, E.)

    Maitland, Patrick (Lanark)

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

    Harvie-Watt, Sir George

    Manningham-Buller, Rt. Hn. Sir Reginald

    Smithers, Peter (Winchester)

    Hay, John

    Markham, Major Sir Frank

    Smithers, Sir Waldron (Orpington)

    Head, Rt. Hon. A. H.

    Marlowe, A. A. H.

    Snadden, W. McN.

    Heald, Rt. Hon. Sir Lionel

    Marples, A. E.

    Spearman, A. C. M.

    Heath, Edward

    Marshall, Douglas (Bodmin)

    Speir, R. M.

    Higgs, J. M. C.

    Maude, Angus

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

    Hill, Dr. Charles (Luton)

    Maudling, R.

    Stanley, Capt. Hon. Richard

    Hill, Mrs. E. (Wythenshawe)

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

    Stevens, Geoffrey

    Hinchingbrooke, Viscount

    Medlicott, Brig. F.

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

    Hirst, Geoffrey

    Mellor, Sir John

    Stewart, Henderson (Fife, E.)

    Holland-Martin, C. J.

    Molson, A. H. E.

    Stoddart-Scott, Col. M.

    Hopkinson, Rt. Hon. Henry

    Moore, Sir Thomas

    Storey, S.

    Hornsby-Smith, Miss M. P.

    Morrison, John (Salisbury)

    Strauss, Henry (Norwich, S.)

    Horobin, I. M.

    Nabarro, G. D. N.

    Stuart, Rt. Hon. James (Moray)

    Horsbrugh, Rt. Hon. Florence

    Neave, Airey

    Studholme, H. G.

    Howard, Gerald (Cambridgeshire)

    Nicholls, Harmar

    Summers, G. S.

    Howard, Hon. Greville (St. Ives)

    Nicolson, Nigel (Bournemouth, E.)

    Sutcliffe, Sir Harold

    Hudson, Sir Austin (Lewisham, N.)

    Nield, Basil (Chester)

    Taylor, William (Bradford, N.)

    Hulbert, Wing Cdr. W. J.

    Noble, Comdr. A. H. P.

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

    Hurd, A. R.

    Nugent, G. R. H.

    Thomas, Leslie (Canterbury)

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

    Oakshott, H. D.

    Thornton-Kemsley, Col. C. N.

    Hyde, Lt.-Col. H. M.

    Odey, G. W.

    Tilney, John

    Hylton-Foster, H. B. H.

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

    Touche, Sir Gordon

    Iremonger, T. L.

    Orr, Capt. L. P. S.

    Turner, H. F. L.

    Jenkins, Robert (Dulwich)

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

    Turton, R. H.

    Johnson, Eric (Blackley)

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

    Tweedsmuir, Lady

    Johnson, Howard (Kemptown)

    Page, R. G.

    Vane, W. M. F.

    Jones, A. (Hall Green)

    Peake, Rt. Hon. O.

    Vaughan-Morgan, J. K.

    Joynson-Hicks, Hon. L. W

    Peto, Brig. C. H. M.

    Vosper, D. F.

    Kaberry, D.

    Peyton, J. W. W.

    Wakefield, Edward (Derbyshire, W.)

    Kerby, Capt. H. B.

    Pickthorn, K. W. M.

    Wakefield, Sir Wavell (St. Marylebone)

    Kerr, H. W.

    Pilkington, Capt. R. A

    Walker-Smith, D. C.

    Lambton, Viscount

    Pitman, I. J.

    Wall, Major Patrick

    Lancaster, Col. C. G.

    Pitt, Miss E. M.

    Ward, Hon. George (Worcester)

    Langford-Holt, J. A.

    Powell, J. Enoch

    Ward, Miss I. (Tynemouth)

    Leather, E. H. C.

    Price, Henry (Lewisham, W.)

    Waterhouse, Capt. Rt. Hon. C

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

    Prior-Palmer, Brig. O. L

    Watkinson, H. A.

    Legh, Hon. Peter (Petersfield)

    Raikes, Sir Victor

    Webbe, Sir H. (London & Westminster)

    Lennox-Boyd, Rt. Hon. A. T.

    Ramsden, J. E.

    Wellwood, W.

    Linstead, Sir H. N.

    Rayner, Brig. R

    Williams, Gerald (Tonbridge)

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

    Redmayne, M.

    Williams, Sir Herbert (Croydon. E.)

    Lockwood, Lt.-Col. J. C.

    Rees-Davies, W. R

    Williams, Paul (Sunderland, S.)

    Longden, Gilbert

    Remnant, Hon. P

    Williams, R. Dudley (Exeter)

    Law, A. R. W.

    Renton, D. L. M.

    Wills, G.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Ridsdale, J. E.

    Wilson, Geoffrey (Truro)

    Lucas, P. B. (Brentford)

    Roberts, Peter (Heeley)

    Wood, Hon. R.

    Lucas-Tooth, Sir Hugh

    Robertson, Sir David

    McCorquodale, Rt. Hon. M. S.

    Robinson, Sir Roland (Blackpool, S.)

    TELLERS FOR THE NOES:

    Macdonald, Sir Peter

    Rodgers, John (Sevenoaks)

    Mr, Richard Thompson and

    Mr. Robert Allan.

    Clause 31.—(AGGREGATION.)
    Sir Patrick Spens: I beg to move, in page 38, line 25, to leave out "on his behalf or."
    I desire to press this Amendment once again in the hope that the Financial Secretary, who promised to consider the matter before the Report stage, will agree that these words would be better out than in. I have looked at the Sections to which he referred in his speech in Committee, namely, Section 24 of the 1936 Finance Act and Section 28 of the 1949 Finance Act. Where those words are used in those Acts, they deal with the charge of or exemption from
    2418
    Estate Duty upon property situated outside Great Britain. I am quite unable to understand what they mean in their context in those Acts, but that does not matter. The point is that they have been repeated in this Clause, which deals with quite a different subject matter.
    In my view, the whole scheme of the Clause, as indicated by the Financial Secretary during the Committee stage, might be seriously infringed if these words are allowed to remain in. The Financial Secretary referred to certain logical divisions. He said that there ought to be aggregated the free estate of the deceased plus property settled by him, or settlements made out of

    2419
    property belonging to him, on the one side, and all other settled property on the other. That is the logical division at which the Clause is aiming, but if these words are left in it seems to me that settlements of property other than that belonging to the deceased could be brought in, and it would therefore be possible to tax a large block of property, aggregated with the free estate, which ought not to be so aggregated if the logical division is as I have stated.
    Two examples have been suggested to me by learned friends of mine. If the deceased is a member of a class on behalf of which class some settlement is made, such as a settlement for blind persons, it cannot be intended that any benefit to the deceased under such a settlement should be aggregated with the man's free estate. The other example is one to which the Financial Secretary himself referred during the Committee stage. He suggested that property belonging to a company of which the deceased was a governing director might be settled by his direction. All I can say is that if it is property of the company it is not property of the deceased, and if the settlement is made by the company on behalf of the deceased—which I should think would be a most improper settlement, and probably completely invalid—I should not have thought that it would, in any event, be aggregated with the deceased's free estate. In those circumstances, I hope that the Financial Secretary will decide that these words are better out than in.
    Mr. Boyd-Carpenter: As my right hon. and learned Friend said, we had a short discussion upon this point in Committee. I am inclined to think that my right hon. and learned Friend exaggerates the importance and the effect of the words which he seeks to delete. I told him that the words were included because they had been used in—as it seemed to me—the somewhat similar circumstances of the two Sections to which he has referred. Upon looking at the words and trying to see what effect they would have, however, I am bound to admit that I cannot conceive of any circumstances in which they would in any way affect the matter. In those circumstances, if my right hon. and learned Friend desires to
    2420
    press the Amendment, I should not desire to thwart him.
    Amendment agreed to.
    Mr. Boyd-Carpenter: I beg to move, in page 38, line 36, to leave out from "then," to the end of line 42, and to insert:
    "the rate of estate duty to be paid on any such policy, money or interest so included (hereinafter referred to as 'a life insurance') shall be determined as follows:—

    (a) in respect of the value of any life insurance or interest in a life insurance to which immediately after the death any one person is absolutely and indefeasibly entitled for his own benefit Otherwise than by virtue of a purchase for consideration in money or money's worth (whether of that life insurance or interest or of the policy or otherwise), the rate shall be that appropriate to the value or aggregate value of that life insurance or interest and of any other life insurance or interest in a life insurance to which he is so entitled;

    (b) subject to the foregoing paragraph, the rate shall be that appropriate to the aggregate value of all the life insurances or, if there is only one, to the value of that life insurance:

    Provided that for the purposes of this sub-section—

    (i) there shall be left out of account any life insurance in respect of which estate duty neither is payable on the death nor would be if the duty were payable on estates of however small a principal value; and

    (ii) where any life insurance or interest in a life insurance is immediately after the death subject to a mortgage or charge, the mortgage or charge shall be disregarded and the life insurance or interest shall be valued accordingly; and

    (iii) in relation to life insurances and interests therein which then form part of the unadministered estate of a deceased person this subsection shall have effect as if that person had been then living and entitled to those life insurances and interests.

    (3) For the purposes of paragraph (a) of the last foregoing subsection the value of any interest in a policy of assurance or moneys received under such a policy shall be arrived at by apportioning the total value of the policy or moneys according to the respective values of the interest in question and of the interest a person would have if, except for the interest in question, he were absolutely and indefeasibly entitled to the policy or moneys."
    This Amendment embodies the proposal in respect of which my right hon. Friend the Chancellor of the Exchequer authorised me to give an undertaking in Committee in connection with an Amendment moved by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser). The House will recall that the

    2421
    Clause, as introduced, reversed the position which had existed for many years by providing for the aggregation of proceeds of policies of assurance with each other for the purpose of determining the rates of Estate Duty which would be applicable. As I explained during the Second reading debate, that proposal was brought forward to counter the abuse which had developed of persons taking out a number of small policies below the Estate Duty exemption limit in favour of the same person, and so completely evading Estate Duty on what might be a large sum of money.
    In the debate in Committee, after a full discussion, I undertook on my right hon. Friend's behalf to bring forward a proposal under which this new provision in the Bill would operate to aggregate separately only those moneys arising from policies of assurance in respect of identifiable beneficiaries, and I indicated that, so far as unidentifiable beneficiaries were concerned, I thought that the Clause would have to continue to stand as it then stood. The Amendment, in my submission, carries out that undertaking.
    The House will remember that I warned the Committee that there would be a considerable number of complications to be dealt with. Perhaps it would be of assistance to the House if I touched on the details of the Amendment which, I suggest, deals reasonably and sensibly with the points of difficulty, some of which I referred to during the debate in Committee. The broad effect of the proposal is, if I may use once again the metaphor I used in Committee of the ring fence, to treat as being within individual ring fences the proceeds of all the policies of insurance in favour of each named individual. We aggregate, that is to say, all the policy moneys that go to each particular identified individual and then retain the original provision of the Clause under which policy moneys were aggregated within one ring fence so far as unidentified beneficiaries are concerned. That is, broadly, the purpose and, I suggest, the effect of the Amendment.
    It is, of course, necessary to deal with the case of the identified beneficiaries—to give an obvious example, such of my children as attain the age of 21. It seems to us that the most satisfactory way of dealing with them, in view, apart from
    2422
    anything else, of the difficulties of dealing with them satisfactorily on any other basis, is to put them in one ring fence of their own, and I think it is proper to put them in a separate ring fence from the unidentifiable beneficiaries since it might otherwise be possible in certain cases to get round the effect of the Clause by leaving certain policies to named beneficiaries and to others who would be those beneficiaries, but, in a form of words, not expressly identifiable. I think we get round that by putting unidentifiable beneficiaries in a ring fence of their own.
    Paragraph (a) carries out this main intention. Hon. Members will observe the words
    "… otherwise than by virtue of a purchase for consideration in money or money's worth …"
    That provision is designed to deal with the difficulty, to which I referred in Committee, of the possibility of abuse arising in this way. The assured person might bequeath a large number of policies to one named beneficiary and during his life that named beneficiary might sell the policies to investment houses. At the moment, therefore, of the assured person's death the holders of the policies would be a number of investment houses. Therefore, if we did not insert this provision, none of those policies would be aggregated with another. That would be a method of abuse, and by excluding from the benefits of the Clause cases where policies have been sold I think we effectively prevent that possibility. That is the explanation of that exclusion.
    Paragraph (b) reproduces the substance of the original subsection as it stood in the Bill as introduced, and applies, as I have already indicated, where the beneficiaries are unidentifiable.
    The proviso deals with a number of smallish points of difficulty. Sub-paragraph (i) deals with a point I referred to in moving an Amendment in Committee. It is to make sure and quite clear that policies of less than £2,000—or, in future, less than £3,000—shall be aggregated with other policies. There was some doubt whether the Bill as it stood had that effect. Sub-paragraph (ii) of the proviso makes aggregable the amount that the insurance company pays out to the beneficiary on death without reduction the third sub-paragraph deals with the rather awkward problem of the case

    2423
    where the beneficiary dies before the insured person and the estate is not wound up but is still under administration at the time of the death of the assured person. To deal with that we have provided that the beneficiary shall be treated for this purpose as if he is still alive, and that artificial resuscitation of him for this purpose gets us out of the particular difficulty of the benefit of the policies going in the direction in which the beneficiary's estate might fall to be distributed.
    7.15 p.m.
    The last part of the Amendment secures for the purposes of valuation under the Clause that the life and reversionary interest in the policy shall together amount to its total value.
    The Clause is, I am afraid, a little complicated, but it is less complicated than I feared it would be when we discussed it in Committee, and will deal with the abuse mentioned on Second Reading. It will secure that, in the case I have described of an individual who takes out a large number of small policies in respect of the same beneficiary, aggregation of those policies with each other will continue to be applied. It therefore goes far enough to check the abuse, though it does not, as I have indicated, go as far as the original provision. The original provision, in our view, went too far, inasmuch as it aggregated policies the benefit of which was going to different named individuals.
    This is, of course, a difficult subject, on which opinions can, and no doubt do, legimately differ. Whichever alternative we adopt, the original alternative of aggregating all the insurance policies with each other but separate from the main estate, or the present proposal of aggregating policies in so far as they go to identifiable individuals or generally to unidentifiable, either course is, no doubt, subject to a certain degree of attack on the ground of logic. I think one could attack either. Whether, if one were constructing a system de novo, one could construct a system on these lines is, perhaps, an open question.
    However, we are dealing with a situation that in fact exists as a result of a state of affairs that has lasted now for 60 years, a state of affairs in which
    2424
    those policies of insurance were treated as a separate estate, and as we are dealing with this problem against that background it does seem sensible to modify it so far as is necessary to check the abuse—that we are doing—but not to carry it farther than necessary to check the abuse. In our judgment, the original proposal went farther than was necessary to check the abuse that had developed.
    Mr. G. R. Mitchison: Would the right hon. Gentleman elucidate one point for me? He referred to, the first sub-paragraph of the proviso in terms which I certainly did not understand. He said it was to deal with the case of small policies, and that where they were aggregated no duty would be payable, but what it appears to do is to leave out of account any policies of any size in respect of which Estate Duty is not payable on death, apart from any question of value.
    Mr. Boyd-Carpenter: I think that the hon. and learned Gentleman's difficulty is that he probably was not in the Committee when we discussed an Amendment to which I have just referred. The Clause, as originally drafted, was intended to provide for the exclusion of policies in which the deceased had not had an interest. I am speaking from memory, but I think I gave an example of a case of a policy taken out on a deceased's life by his wife on premiums solely furnished by her. But we thought it would also exclude from aggregation estates which did not fall to pay Estate Duty because they were below the exemption limit, While maintaining the exclusion in respect of those cases, in my view this Amendment makes it clear that where Estate Duty is not payable merely by reason of the size of the estate being below the exemption limit, none the less those estates shall be aggregated for this purpose.
    I think it is clear, but if the hon. and learned Gentleman had not followed the previous debate I can understand that what I said might possibly have misled him. That is the provision which we make, and in our view it meets the difficulty which had arisen and with which, as I indicated, we regarded it as our duty to deal—namely, the abuse in

    2425
    respect of a large number of small policies. It does not carry the matter further than is necessary to deal with that abuse, and, in so doing, pays attention to what has been the practice for 60 years in this country under a variety of Governments.
    Mr. Mitchison: Will the right hon. Gentleman observe that I did follow the previous debate, but I am not at all sure that I have followed his proviso?
    Mr. Speaker: It has been suggested to me that our proceedings might be expedited if a single discussion were to take place on this matter and upon the Amendments to this proposed Amendment. If the House were to agree that the words proposed to be left out should not stand part of the Bill, I would then put the Question "That those words be there inserted in the Bill"; and if on that a general discussion took place, and, if desired, it were carried to a Division, that would provide one way of dealing with the matter. But I should like to make it clear so that there is no misunderstanding that if the Question "That those words be there inserted in the Bill" is carried in the affirmative, it will inhibit me from calling any of the Amendments to the proposed Amendment. I say this in order that there shall be no misunderstanding whatsoever.
    Mr. Glenvil Hall: I think I have got the matter clear, Mr. Speaker, and that what you have said is agreeable to my hon. Friends on this side of the House. We appreciate that this matter has been discussed before. We do not want to carry the proceedings too far or into too much detail, so long as we can state our points of view which are embodied in the Amendments to the Chancellor's proposed Amendment.
    Mr. R. A. Butler: We agree, Mr. Speaker In fact, the crystal clarity of your observations compares very well with the Amendment which we have moved.
    Question, "That the words proposed to be left out stand part of the Bill" put, and negatived.
    Motion made, and Question proposed, "That those words be there inserted in the Bill."
    Mr. Roy Jenkins: We are dealing with an extremely complicated matter and a very compli-
    2426
    cated Amendment, but I think that, with the possible exception of the point which was raised by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), the Financial Secretary, as he usually does, explained the Amendment with great lucidity. It certainly appeared to me that it gives effect to what he said he would attempt to give effect to when he announced the concession in Committee.
    In spite of that, we do not like the Amendment. My right hon. and learned Friend the Member for Neepsend (Sir F. Soskice) made it clear in Committee that we did not like it, and we have not liked it any more as a result of thinking about it during the interval. We have put down the Amendments to which you have referred, Mr. Speaker, and which we are not at the moment moving, but which we are able to discuss at this stage, which seek to limit the extent of the concession.
    To use the right hon. Gentleman's metaphor of the ring fence, our proposals seek to do this. Instead of putting the estate into an indefinite number of parts, as the present Government Amendment proposes to do, and instead of leaving the estate in two parts as the Clause as originally drafted seeks to do, our Amendment seeks to put it into three parts, each of them with a ring fence around them. The first part would be the main part of the estate. The second part would be any money accruing, as a result of insurance policies, to the widow or, for the sake of sex equality, to the widower; and the third part would be any insurance policies accruing to any other people. That would limit substantially the extent of the concession which the Government have proposed.
    I must say that we would prefer not to have the concession at all, and that we have not heard either in Committee or in the lucid speech of the Financial Secretary any reasons to indicate why, if the Government thought it really necessary to bring forward this Clause at all and correct the admitted abuse, the effect of the Clause should be lessened as it is by this Amendment. It seems to me that the proposal which is put forward in this Amendment is open to fairly obvious and substantial abuse—indeed, a new form of abuse.
    Under the arrangements which are proposed, by which an individual may not get round the Estate Duty provisions by

    2427
    taking out an indefinite number of small policies in favour of one beneficiary, but may achieve the same result by taking out a number of policies in favour of a different beneficiary, it is difficult to see why it should not be possible for a number of people to arrange mutually compensating bargains by which they each make over sums in favour of each other's children, so that very much the same effect is obtained as would be obtained if we did not have this attempt to block up the loophole altogether. I would have thought that, from that point of view, this matter ought to be considered again.
    Despite what the right hon. Gentleman has said about the position during the last 60 years and the position which has existed in respect of the Married Women's Property Act, I do not think we are really convinced that there is a case for treating insurance policies in an entirely different way from the rest of the estate. I am not at all sure, from what he said in his extremely interesting speech in Committee, that we do not carry the hon. Member for Hall Green (Mr. Aubrey Jones) with us on this point. I know that he wants an entirely different approach to the whole question of Estate Duty. He wants the duty levied on the individual who receives it according to how much money has come in, and not on the individual who is leaving the money according to how much his estate is. That seems to me to be an arguable point of view, but I think he agrees that, until we can do that, there is no logical basis for saying that we should treat the estate of a man who carries a great deal of life insurance in an entirely different way from the way in which we treat an individual who, for various reasons, does not happen to do anything of the sort.
    It is not directly bearing on the point to say that this has been the position, as the Financial Secretary said, for 60 years. In fact, I think he slightly underestimates the period, because I believe the date of the Married Women's Property Act was 1880, so that it would be a period of 74 years.
    Mr. Boyd-Carpenter: What I had in mind was the date of the Finance Act. 1894.
    Mr. Jenkins: The right hon. Gentleman's intervention makes in advance the
    2428
    point that I was about to make, and that is that the Married Women's Property Act, from which stems this separation of these insurance policies from the rest of the estate, was introduced before Estate Duty was ever thought of. We have all heard a lot about Sir William Harcourt in these debates.
    7.30 p.m.
    My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), in his speech yesterday, invited the Chancellor to join him and Sir William in a glorious trio of those who reduced the Estate Duties at the lower end. Sir William is reputed to have said. "We are all Socialists now." I think that remark was not true. There is one other remark by Sir William which seems to me more apposite to what we are discussing now and of which I would remind the Chancellor, because I think that it may have some application to occasions when he has to deal with the more recalcitrant and property-conscious among his own back benchers.
    One of Sir William Harcourt's friends complained that Sir William had no landed ideas, to which Sir William replied, "You have the land; leave the ideas to me." I think that the only difference about that is that I am not at all sure that the right hon. Gentleman has not the land as well as the ideas. However, it is quite clear what is the position here under the Married Women's Property Act, and I think that the Financial Secretary is straining a point when he attempts to say that we must, therefore, respect the position which has grown up over the last 60 years.
    He said that if he had been dealing with the matter de novo he might have arrived at a different solution. But surely we are to a large extent dealing with the matter de novo in this Bill. The only thing which, I understand, is not de novo is the Married Women's Property Act which was brought into being to deal with an entirely different set of circumstances when there was no Estate Duty 60 years ago.
    This is the first time that we have faced up to what we want to do about insurance policies in which the person taking out a policy has no interest. The Government have brought forward two solutions. While I think that the Government have a better solution in mind—

    2429
    the Financial Secretary hinted at it—we have to put up with the solution which he says is not a good one because the position which has existed over the last 60 years is not clear. It is a very unsatisfactory position in which we are left.
    During these rather long drawn-out and not altogether uninteresting debates on the Finance Bill, no issue has brought out greater disagreement between both sides of the House than on this question of Estate Duty. I think that one of the most significant remarks which the Chancellor has made in the course of his intervention in our debate was the one which he made yesterday when replying to a debate in which the right hon. Member for Blackburn, West (Mr. Assheton) came out with a very strong proposal for Estate Duties in almost any form. He indicated his position clearly by saying that the members of the Chamberlain family came of a very radical family so far as he was concerned.
    The Chancellor gave a very broad hint that if things were a little easier he would like to do away with the very heavy burden of Estate Duty on large estates.
    Mr. R. A. Butler: I never said that we should do away with it altogether.
    Mr. Jenkins: I think that the Chancellor is quite right. I did not imagine or think that he intended it to be imagined that estates were to be entirely free of Estate Duties. He did announce that he would go for a rate of Estate Duties which would be much less an equalising weapon than it is at present. Nothing has brought out the difference between the two sides of the House more than this question affecting property passing from a deceased person to an heir of one sort or another. That applies to this Amendment which we regard as quite unnecessary and with which we are thoroughly unsatisfied.
    Sir P. Spens: I start by thanking my right hon. Friend for introducing this Amendment. I think that it is a very great improvement indeed on the Clause as it originally stood. It would be interesting to go into an historical discourse about the origin of the Married Women's Property Act and death duties generally, but I want only to look at the position as I understood it to be when the Finance Bill was introduced.
    2430
    The Married Women's Property Act has been made more and more use of during the recent years. It has been made use of by two quite different sets of people. It has been made use of by thousands of people of limited means who make provision for their widows and for their children, and in nearly all those cases they take out one policy for their widow and one policy for each child. There have been a small number of people who have found that by taking out a large number of policies in favour of their widow or their children they can get benefits for each particular party.
    The proposal which the Government originally brought in was, of course, a complete attack upon all the benefits of the Married Women's Property Act, and the people who would have been most hit by it were the people of more limited means. I have been perfectly amazed to listen to the speeches from the other side and the whole-hearted attack made on the Married Women's Property Act and the provisions which people of limited means, during the last 20 or 35 years, have been making for those among the very class which, I would have thought, hon. and right hon. Gentlemen opposite desire to represent in this House.
    Mr. Percy Daines: What evidence has the right hon. and learned Gentleman of that? I was in the insurance industry for 20 years, and I never came across a single case of that in the whole of my experience.
    Sir P. Spens: I do not know what estates the hon. Gentleman operated, but I can tell him that, so far as I know, there are many hundreds of policies under the Married Women's Property Act taken out every year by people of very limited means who, so far as I possibly can, I desire to protect.
    Mr. Glenvil Hall: If we can clear up this point, the right hon. and learned Gentleman's speech will be more intelligible to all of us. Some of us are not quite sure what he means by a person of limited means. Does he mean people with £500, £750, £1,000, or more? I would remind him that it will now be possible for a person to take up single policies on anything up to £3,000.
    Sir P. Spens: I was referring to people of small incomes rising up to junior

    2431
    executives in business of £500 to £1,500 a year. These are the people who very largely take out these policies. The proposal here, so far as the Government are concerned, is that a ringed fence goes round each lot. That seems to me right. Let me deal with the ringed fence round the widow or widower.
    It seems here extremely hard that a policy taken out in favour of children should be aggregated with other policies which there happen to be on a man's life. That seems to me to be pretty unkind when one thinks about it, and I should have thought the ringed fence ought to be round the widow and widower and the children.
    The reason why I think the Government plan is right is this. After all, policies are taken out, not only under the Married Women's Property Act, but also as ordinary life insurance policies for the benefit of dependants and employees and people of that sort. They are comparatively small policies—£500, £1,000. £1,500 or something of that sort. There may be, in addition, policies running into thousands taken out by the deceased on his life. If we aggregate them together, these small policies for individuals have to bear the full weight of Estate Duty on the aggregation of all the policies. That seems to me to be wrong. That is got rid of by the Government's plan of the aggregation—the ringed fence—being round each beneficiary who takes a policy upon death.
    This is a good Clause, and I have only one comment to make. Under the Married Women's Property Act a very common form of policy is a policy for the widow, if she survives, for life and afterwards to the children. Unfortunately, I gather that that type of policy would not come within paragraph (a) but would have to be under paragraph (b), because on the death there would be no person
    "absolutely and indefeasibly entitled for his own benefit.…"
    That may be unavoidable, but it is the one point in paragraph (a) which will hit a great number of these policies. I think that they are the best type of policy and should be encouraged in every possible way. Subject to this one comment, I congratulate my right hon. Friend and
    2432
    express my thanks and, I am sure, those of many of my hon. Friends for the Amendment.
    Mr. G. R. Mitchison: The right hon. and learned Member for Kensington, South (Sir P. Spens) has just found that some of the provisions about Estate Duty are unkind. Taxation is usually unkind in one sense of the word. Life is sometimes unkind, and death is almost invariably unkind.
    It seems to me that, on the Government side, there is only one really logical person, and that is the hon. Member for Hall Green (Mr. Aubrey Jones). He thought that the whole basis of Estate Duty was wrong, and that it ought to depend on the means of the person receiving and not on the size of the estate of the deceased. That is perfectly logical. But with this Clause we are getting into a quite hopeless state of confusion about the existing situation as a result of some sentimental reasons advanced in favour of a very limited class of person by hon. Members opposite. I say "very limited class of person" because there are very many people who have never been in a position to take out policies of this kind and who are never likely to be able to do so.
    My first comment on the Clause and the whole matter is that much the easiest way to deal with this question would have been to put the whole of the moneys coming from life insurance policies of this nature into the estate, to aggregate them and then, if it was desired to make special provision for the widow and children, to do it in the straightforward way by giving them a special concession in the rate of Estate Duty, such as they used to have under the legacy and succession duty. I doubt whether that is the right thing to do, but that, at any rate, is a simple and clear way of doing it.
    The present position is that not all widows benefit under this practice, but simply the widows and children of people who have taken out a particular form of provision for them—that is to say, a particular form of life insurance. Other provisions have not attracted the advantage that this provision has attracted by reason of a section in the Married Women's Property Act which was in all probability introduced for a quite different purpose.

    2433
    It is a very poor defence of an abuse, because it has, admittedly, been an abuse, to say that it is an old one and, therefore, when it is being altered we will make only a small alteration. Surely, once it is recognised that there has been abuse, the right thing to do is to reconsider the whole position and see what ought to be done and not hesitate to take fairly sweeping steps in order to do so. The essential things to aim at in a matter of this sort are, first, that the provisions that are put into the Bill should be as simple as possible and, secondly, that it should conform with ordinary ideas of fairness.
    7.45 p.m.
    I do not regard the Amendment or the Clause as in any way clear. The Clause is an excellent monument of obscurity and I shall not take up time by going through all the details of it. In the Amendment we begin by having a "policy, money or interest" referred to as "a life insurance," and a little further on we find an "interest in a life insurance." That, therefore, means an interest in an interest. I leave it to the Chancellor or whoever replies to tell us what that means and why it is there. We could go through the Clause and find point after point which the ordinary person and, indeed, the skilled person would find just as much difficulty in interpreting as I found myself in doing so. The more obscure we make fiscal legislation, in the long run the more likely we are to afford opportunities for evasion.
    Next, on the fundamental facts, let us see what is proposed. First, there is the ordinary estate. Next, there is to be, say, the provision far the widow. Next, if there are four children, there is to be a separate ringed fence round each of them. What is the common fairness in this? Why should this form of provision for children, if that is the way we regard it, be entitled to this special treatment. Suppose that the deceased had had, say, four houses, bits of property let out to people. The party opposite are rather in favour of a property-owning democracy, are they not? Surely the property is not merely to be confined to life insurances, however great some people's interest in them may be. It would include perhaps a house or two. Why not?
    Assume that there are five houses of the deceased person, and one goes to the
    2434
    widow and the other four to the children. I need not say to the House that that all forms part of the estate and gets no benefit. All the sob stuff that we have been hearing about providing for the widow and the children for some obscure reason is perfectly sound, so we are told, when it is applied to this particular form of life insurance; but when it is applied to any other provision—for instance, the houses in which many humble savings are invested—it is no longer a sound principle. It is nonsense to approach the matter in that way.
    I should have thought that the simplest thing with an estate is to confine ourselves to two obvious classes, one of which is the widow. It must be remembered that widows have had special treatment as, for example, in the case of intestacy. If we are to make a special benefit at all and to do it in this rather illogical and inconvenient way, there is a special case for giving it to the widower or to the widow. But once that is done, I see no reason whatever for drawing a separate ringed fence around all the other interests concerned. I am talking, of course, about the "absolutely and indefeasibly entitled" beneficiaries to whom the Financial Secretary was referring.
    Suppose, for instance, that a man has, say, five Children and makes provision for them by taking out a separate policy for each of them. What is the moral difference between his doing that and taking out one policy for the five children or the survivors of them? Where is the moral element? Why should those five people, because they have five separate policies, be entitled to a special advantage that would not accrue to a family as a whole, if the policy was taken out in general terms so that until the event happened one could not know to which person it would apply? What is the moral difference between that kind of case and the case of five children, each of them having a clean-cut special policy and who therefore are entitled to a specially reduced rate of duty?
    I cannot see it at all, and I suggest that here, by way of complication, we are getting into real injustice, and opening a door to evasion. I hope that the House will reject the whole Amendment. If we are to have it, I would prefer the limitation I have just been outlining, but I believe that the original clause did not go far enough. I believe that what is

    2435
    now proposed is far too complicated, has no real foundation in fairness and even within the narrow limits which the right hon. Gentleman has set himself, is quite the wrong way of doing it.
    It is only as a very last hope, as it were, that I should recommend the Amendments which we put down. They are one degree better than the Chancellor's Amendment, but by far the best thing is to reject the whole.
    Mr. Aubrey Jones: The debate so far has been one between precedent and logic. My right hon. Friend the Financial Secretary has stood for precedent and hon. Members opposite stand for logic. As a good Conservative, I cannot be other than reverent towards precedent. Equally as a Welshman, I cannot close my ears to the claims of logic. It is true that the arrangement represented by this Amendment has existed for over 70 years and I am entirely in agreement with my right hon. Friend that we ought not to get away too quickly or too precipitately from something which has been sanctified by this long history.
    What worries me is whether the concession represented by this Amendment can, on the basis of precedent, be a permanent concession. I welcome the concession, but I think that I may claim for myself a greater degree of farsightedness than my hon. Friends. I wish to make the concession permanent, and it would seem to me that the only way to do so is to follow out the logic of the Amendment. Hon. Members opposite and I are, I think, at one in wishing to be logical. The difficulty is that our logic differs. Hon. Members opposite, or at any rate the hon. and learned Member for Kettering (Mr. Mitchison), wished to carry to its full conclusion the present logic of Estate Duty and to assimilate the Amendment to the present corpus of law. I wish to do the opposite. I wish to assimilate the present corpus of law to the Amendment. I wish to see the Amendment carried further. They must vote against it, and I must vote for it.
    One may well ask, if this illogic, this absence of logic, has existed for 70 years, why cannot it go on existing? The truth of the matter is, it seems to me, that the illogic has become apparent only within the last few years. It became
    2436
    apparent only when the exemption limit was raised from a nominal figure to £2,000. It then became profitable for a person to distribute his property in parcels of life assurance policies of under £2,000, and so avoid duty.
    That loophole is closed by the Clause, but a lesser loophole would remain under the Amendment. My hope is that people would not resort to this lesser loophole, but it would be very serious and disastrous if they did. If they were to do so—which is the last thing that the Financial Secretary would desire—the concession could not possibly last. At some time or other a Chancellor would come to this Chamber and say, "Advantage has been taken of this provision to secure mitigation of Estate Duty, and I cannot countenance it."
    Were that so, the argument of precedent would no longer avail. For that reason—and despite the obvious reluctance of the Financial Secretary—I wish once again to press upon him the claims of logic. I shall not enter again into the long and abstruse argument which I inflicted upon hon. Members during the Committee stage. I was interested in the disquisition which we heard yesterday from the right hon. Member for Bishop Auckland (Mr. Dalton). We were told that Estate Duty has retained its shape for 60 years. The right hon. Gentleman described it as the hest of taxes. Whatever may have been said of it in the past, I contend that current rates of taxation have altered the position completely.
    With current rates of taxation as they are, a living person can no longer provide for the duties which becomes payable on his death. They are in fact payable by his heirs, and those heirs pay duty relating not to what they receive or to their own circumstances, but to the circumstances of someone else altogether. 'That appears to me to be fundamentally unjust. For that reason I pleaded with the Committee for the inclusion in the corpus of death duties of an acquisition duty. It is the acquisition principle which is represented by the Amendment, but in a confused and inchoate way.
    I believe that the concession given by my right hon. Friend and represented by the Amendment may be made permanent if we reintroduce an acquisition duty settled on a proper basis of principle and

    2437
    applied to all forms of property, not only to property represented by life assurance policies. I do not ask for it straight away. I plead here, as I pleaded in Committee, for an inquiry into the matter; and while I understand the reluctance of my right hon. Friend to look into all these matters afresh, I urge on him that he, probably more than anyone else, has an interest in so doing.
    It seems to me that death duties, far more than duties on income or duties on profits, touch people in some of their very deepest instincts and affections. That being so, if the principle of the death duty seems unjust, then the statute in the long run will suffer. Indeed, I would contend from what we have heard in our debates on the subject that the statute on this matter is subject to considerable strain. My right hon. Friend has an interest in safeguarding the reputability of the statute, and in my judgment that can only be done in the long run by initiating an inquiry on the lines I suggested in Committee, and for which I would plead again today.
    8.0 p.m.
    Mr. Houghton: I am sure that we are all agreed that the speeches we have heard have shown how much there is still to be learned about the philosophy and logic of Estate Duty. The more I heard the hon. Member for Hall Green (Mr. Aubrey Jones) speak, the more I believed that he is too pure in heart to belong to the Conservative Party. I am sure he will forgive me if I turn from his musings on Estate Duty to the more practical question raised by the right hon. and learned Member for Kensington, South (Sir P. Spens), who I am glad to see has remained in the Chamber.
    He reproached us on these benches for not taking care of people of limited means. He said that he was astonished to hear speeches from these benches which seemed to be so indifferent to the welfare of those of limited means and the provision which they were trying to make for their wives and families. When my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) asked the right hon. and learned Gentleman to define a person of limited means, he replied—and I took his words down—"Those who have risen to the position of executives on, say, £500 to £1,500 a
    2438
    year." That was his definition of persons of limited means. Presumably the right hon. and learned Gentleman supports the Chancellor and opposes my hon. Friends on the ground that the Chancellor is taking care of those of limited means whereas we are not.
    I want to ask the right hon. and learned Gentleman how much insurance of this kind he thinks people of limited means can afford. It would be possible for a person of limited means to take out a policy for £3,000 in the interests of his widow and three separate policies of £1,000 for each of his three children—a total of £6,000; and under the Amendment which we are discussing in relation to the Chancellor's Amendment, no Estate Duty would be payable on that £6,000. But the total cost of the insurance would be well over £300 a year in premiums. What person on £500 a year can afford to pay £300 a year in insurance premiums for this modest provision?
    Sir P. Spens: The hon. Member has completely misunderstood me. Of course a man on £500 does not pay £300 a year in premiums. He pays a much smaller sum and does not insure for as much as £3,000. As he earns a higher income, so he takes out another policy.
    Mr. Houghton: The right hon. and learned Gentleman has merely proved my point, which is that persons of limited means can afford only limited amounts of insurance—and those limited amounts of insurance would be exempt from Estate Duty anyway, and they would be still more exempt—
    Sir P. Spens: Provided that at the time of death the testator had no other property.
    Mr. Houghton: No. What we are dealing with here is insurance taken out in the interest of the wife and family. These insurances will be separately calculated for Estate Duty and will be treated entirely distinctly from the free estate of the testator. It does not matter what he leaves in other forms of property. We are concerned only with the amount of insurance which he has left to his wife and family, which would be exempt from Estate Duty, for he would take advantage of the loopholes, some of which the Chancellor proposes to retain. I think the House will agree that a person of limited means between £500 and £1,500 a

    2439
    year is not at all concerned either with what the Chancellor proposes or with what we propose.
    Who is concerned with it? This surely must be realised: this is the field of operation of those with large incomes. It is not a scrap of good talking about persons of limited means. What does insurance cost per £1,000 for a man of 40 years of age? Surely it is at least £50 in premiums each year per £1,000 for a policy of this kind. One can work it out that if this sort of provision for the wife and children is to be undertaken, as it is undertaken, with a view to avoidance of Estate Duty, it will be done on a big scale, otherwise it is not worth doing at all.
    Mr. Frank Tomney: It is possible to take out two policies for £1,000 and obtain the benefit of each.
    Mr. Houghton: At the present time it is possible for a person to take out 10 policies, one each year—not more than that because of the voluntary restrictions imposed by the life insurance offices—in the name of the same beneficiary, and each of those will be treated as a separate estate. The Chancellor proposes to stop that avoidance, even under the amended Clause—let us be quite fair to him.
    What we are suggesting is that he is retreating from the right and proper position which he adopted of aggregating all these policies for all beneficiaries and treating them as an estate separate from the free estate of the testator. Already a great concession is being made in treating these policies as separate estates, even if aggregated—a very big concession indeed. To lump the two things together would in many cases mean that they would attract a much heavier rate of Estate Duty.
    Let us acknowledge that, as the Chancellor proposes to meet the situation, he is stopping up one loophole, but he is allowing very large concessions to continue. I wonder whether he, or whoever is to reply, will tell us how much revenue he is giving away, making the comparison between his original Clause and his new proposal. It looks to me as if there is a considerable difference in the Estate Duty received, between the original proposal and the modified proposal which the
    2440
    Chancellor is now making, because of the treatment of each policy, or each set of policies for each beneficiary, as a separate estate.
    I do not see why the right hon. Gentleman is doing this. Consider the person who takes out policies of £4,000 for his wife and £4,000 for each of his two children—£12,000 in all. Why, under the modified proposal, does the Chancellor intend to make a gift of about £600 in relief from Estate Duty? What justification is there for doing that? As the figures go higher, of course, the concession becomes greater.
    Much has been said about the Married Women's Property Act. Under our proposal the sanctity of that Act is preserved. We would make special provision for the widow, but we do not propose that that advantage should be given to each of the other beneficiaries—and I am sure that that would strike any reasonable person as being quite fair.
    Undoubtedly this has been a large source of avoidance of Estate Duty and we on these benches regret that the Chancellor did not stick to his guns. Had he done so, we would have supported him. He has given inadequate reasons for the variation made by the proposal which he now puts forward. If it is suggested that it has been put forward in the interests of people with limited means, let us disabuse our minds of that before we proceed to the final stage of the Bill.
    Mr. Glenvil Hall: I had hoped that the Chancellor would intervene at this point, but if he prefers to follow me I will, of course, speak now.
    Mr. R. A. Butler: The reason I did not rise was not through any desire not to speak, but because, as the Financial Secretary had opened the debate, I thought the right hon. Gentleman would like to speak at this stage.
    Mr. Glenvil Hall: Certainly.
    My hon. Friend the Member for Sowerby (Mr. Houghton) has really made my speech for me. He dealt with the only significant contribution which has been made to the debate from the other side of the House. It came from the right hon. and learned Member for Kensington, South (Sir P. Spens). I must say—and I think he is aware of this from what has been said by my hon. Friends

    2441
    —that his speech startled us, for it seemed to us, on all the facts, to be at variance with the position as we see it.
    I listened carefully to the Financial Secretary. I agree with one of my hon. Friends who remarked that the Financial Secretary, as usual, had explained the matter in a lucid and clear way. This is a most complicated Amendment. Part of our case is that we see no reason for the Amendment, complicated or otherwise. Undoubtedly, as was pointed out by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), this will cause a good deal of doubt in the minds of those who may be affected by it, and perhaps some work for the profession which my hon. and learned Friend adorns. However, if all that happens as a result is that we help, on the one side, very rich people, and on the other, well-to-do barristers, that is no reason why we should approve the Government's proposal.
    Even at this late hour, we should like to hear that the Chancellor has had second thoughts and that he has decided to accept the arguments deployed from this side of the House. I can only assume that, if the original Clause had not been good, it would not have been put into the Bill. If that is correct—the Clause was good and the Chancellor thought that it was wise and right, why is it now necessary for the Government to propose an Amendment to it? If after careful thought—and I know that careful thought is always given to the contents of the Finance Bill—the Clause was introduced, why is it that now in such a short space of time the Chancellor, and those associated with him should have had second thoughts?
    The Financial Secretary told us that the original Clause went too far. When was it discovered that it went too far? As far as we can see, it was only when pressure was brought to bear from the Government back benches. Perhaps we shall be told by the Chancellor that the matter has been debated by the 1922 Committee. It may be that that Committee informed the Chancellor that in this matter he had gone too far.
    This is one of the few radical proposals in the Bill yet, although in our view it does not go far enough, within a remarkably short space of time the
    2442
    Treasury Bench comes to the conclusion that the provision was too revolutionary. The fact is that the Clause as it now stands does not go far enough. We should have liked to see it tightened up, not loosened.
    I wish to make some brief observations on the speech of the right hon. and learned Member for Kensington, South (Sir P. Spens). As I have said, my hon. Friend the Member for Sowerby covered most of the points which he made, but I must say that, for my own part, it seems incredible that anyone in any part of the House should imagine that the proposed' Amendment will, in fact, help the small man—the man of whom the right hon. and learned Gentleman spoke as the person of moderate means. I intervened to ask him what he meant by this description and when he replied he laid down fairly wide limits. He said that moderate means meant from £500 to £1,500 a year.
    I understood further from what he said that such a man would be one who had reached the executive class. I understood the right hon. and learned Gentleman to mean by that somebody who was not starting at the beginning, but, in a sense, had reached the kind of position from which he would rise no higher. He had ceased to be in the lower grades of his profession or occupation.
    Sir P. Spens: I meant a man who rises in the course of the years from £500 to £1,500 a year and takes out insurance as he gets better off.
    8.15 p.m.
    Mr. Glenvil Hall: It is obvious that on an income of £500 a year most people would find that difficult. Their families would be young and most of their income would be earmarked for other purposes than this type of insurance. I therefore assume that the man concerned would have to be receiving at least £1,000 a year, and perhaps more, before he could begin to take out policies of this kind. Even then, it is obvious that by that stage he would no longer be young. In all probability he would be in his fifties.
    Everybody knows that when a man reaches that age the premiums he has to pay are pretty high. Such a person would have to pay a premium of some hundreds a year to take out a policy which would do him any good under the Clause. He

    2443
    would, I think, hesitate very long before, for this purpose and this purpose only, he would sink premiums to the extent of many hundreds of pounds in this way.
    The plain fact should be obvious in every part of the House, that whilst this provision will help people of substantial means, the small men and women—even those with an income of £1,500 a year—will not be helped very much, if at all. The right hon. and learned Gentleman seemed to forget, though I am sure that the Chancellor does not, the Amendment accepted yesterday. Although the actual Amendment accepted was moved from the opposite side of the House, all the running and the pressure came from this side of the House and was really moved in essence by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton).
    The Chancellor will recollect, if the right hon. and learned Member for Kensington, South does not, that now estates exceeding £3,000 and not exceeding £4,000 will only pay Duty of 1 per cent. That is a small sum. This provision must surely mean therefore that only people who have very high incomes or assets and substantial amounts at their command and who are willing to sink them in insurance policies of this kind will be those who will benefit.
    For that reason, we reject the proposals of the Chancellor. We think that they give to very rich people much more than they are entitled to in this direction. Instead of closing a gap and reducing what has become an abuse, the Government Amendment only helps that abuse to continue. Therefore, if the Chancellor cannot see his way to meet us in any way, I must advise my hon. and right hon. Friends to carry their opposition into the Division Lobby.
    Mr. R. A. Butler: I hope that my speech may conclude the debate on this important matter on which we have had a variety of useful speeches. The Amendments suggested by the Opposition are absolutely intelligible and quite clear. That is a very good way in which to end our debates. I should like to pay a tribute to the hon. and learned Member for Kettering (Mr. Mitchison) who serves in such a useful capacity to the Opposition in helping them with this difficult legal drafting We can understand the Amend-
    2444
    ments clearly, and the more we understand them the less we like them. I am afraid that my answer to the right hon. Member for Colne Valley (Mr. Glenvil Hall) is that we are unable to accept them. What they do is restore the position to the original Clause, with a slight expansion, as has been explained by Opposition speakers.
    The right hon. Gentleman said that I changed to the new Amendment on the Report stage under pressure from the 1922 Committee. During much of the course of the Finance Bill the theme song of the Opposition has been that the Government are so rigid that they are unable to move. Yet when the Government do move they are regarded as being under pressure from some revolutionary junta in the 1922 Committee. The Opposition cannot have it both ways. I am not conscious of ever having discussed the matter with the 1922 Committee, and if I did discuss it with them, I am doubtful if they would understand it any better than the hon. and learned Member for Kettering at present understands the drafting of the Amendment which we put on the Order Paper.
    It is true that some of my very learned and able right hon. and hon. Friends who have sat with assiduity through our Finance Bill debates have shown a particular interest in this matter. So have I and my right hon. Friend the Financial Secretary, who moved the Amendment with such clarity. The reason for the change is quite simple; we were impressed by the arguments put forward just as, strange to relate, I was impressed by the arguments which the right hon. Member for Bishop Auckland (Mr. Dalton) used yesterday.
    It shows that as we now draw rapidly to the conclusion of our debates on the Finance Bill we are being accommodating to both sides of the House, which is the right way in which to conclude our discussions. We have learned from these discussions to be even more accommodating than we were last year, and we have ended up with a concession to the Right today and a concession to the Left yesterday. I hope that our aim will prove that our attitude will in future be killing when we have a target in front of us.
    The right hon. Member for Colne Valley claimed that this was not a very desirable course of action. If it is not

    2445
    a very desirable course of action, why did not his Government tackle this abuse during their period of office? We dealt with this abuse when it was brought to our attention. We might have thought of it earlier, but the fact is that we dealt with the abuse in the original Bill as printed at the Committee stage.
    Mr. Glenvil Hall: There are two simple answers to the right hon. Gentleman. The first is that the Labour Government could not do everything in one period of office. We did a great deal. I thought that right hon. and hon. Gentlemen opposite felt that we did too much. The second answer is that this abuse really became an abuse which ought to be attended to as a result of the action of my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) in 1946 in relieving estates up to £2,000. It was only then that it really became a substantial scandal, and it took some years to grow.
    Mr. Butler: Then the actions of the right hon. Member for Bishop Auckland were so nefarious that they created opportunities for evading a law which it then took the right hon. Gentleman and his colleagues five years to perceive. I do not think that the right hon. Gentleman added to the validity or strength of his argument by his intervention.
    The fact is that this position has existed, not to the extent of the abuse announced by the Financial Secretary in the earlier stages of our debates, but with the possibility of abuse, since 1894. When we came to consider the attitude adopted by some of my right hon. and hon. Friends, we thought it perfectly reasonable that, in the words of the Financial Secretary, a ring fence should be put round a policy of assurance taken out for a child. We think that that is a reasonable proposal for each individul child, and, according to the terms of the Clause, those whose titles can be absolutely claimed according to the terms of the Amendment which we put on the Order Paper. That is a perfectly reasonable restoration of the original position.
    Our main desire originally was to stop the abuse of an indefinite number of small policies being taken out in the interests of the same person. However, on reconsidering the matter with the care that we always devote to reconsideration, we thought it not unreasonable that the
    2446
    Amendment should be made. Indeed, I see great value in the Amendment, because I do not think it is illegitimate that in the case of a child, particularly in a case related to the Married Women's Property Act, a ring fence should be put round it. I can see nothing immoral in it, and I can see considerable advantages in it.
    One or two points have been raised by right hon. and hon. Gentlemen in their speeches. The hon. and learned Member for Kettering raised some very technical points. They are so detailed that I will have a little interview with him after the conclusion of the Finance Bill.
    The hon. Member for Sowerby (Mr. Houghton) asked how much we should lose on this Amendment compared with the original proposition. It is a case not of how much we shall lose but of how much less we shall claw back, because the object of the original draft was to stop an abuse, and, as I think we shall stop an abuse, it cannot be said that there is a necessity to claw back the amount which would have been saved by the original drafting but which will now be conceded in the case of a ring fence being put round a child's assurance policy. I have made inquiries and attempted to define the amount, but I cannot give an accurate assessment. I am, however, assured that the figures are not alarming. Certainly, I did not have to consider this as being an action in which I was making any great hole in the budgetary position as I envisaged it.
    I do not think I need take up the points made by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens). It was from his speech that the argument started as to whether we were trying to help the rich or the poor. The right hon. Gentleman opposite said that the Clause was intended to help very rich people and well-to-do barristers. That is gross exaggeration. I hope that the people of this country, if they are following our discussions at the present moment—about which I am in some doubt—will, next time they consult their lawyers, ask them whether those who take out insurance policies under the Married Women's Property Act can all be classified as belonging to the two classes of very rich people or well-to-do barristers like the hon. and learned Member for Kettering.

    2447
    I do not believe that those are the only people who will profit by the Clause. If I thought that the hon. and learned Member for Kettering would make a packet out of it, it would give me all the more encouragement to proceed with the Amendment; but I do not believe that is the case.
    I believe that there are many people of reasonable and modest means, such as those referred to by the hon. Member for Sowerby in his illustration of the amount of the premium, for whom it will not be impossible to take out an insurance policy. I believe that many of those people will take advantage of this opportunity. However, I do not believe that those who went into this affair as a racket and took out 50 policies for the same person and thereby attempted to avoid Estate Duty, will find that the law as we leave it today makes it worth their while to perpetuate the racket. Therefore, in view of that, I ask the House to pass this Amendment, to reject the Amendments moved from the other side, and proceed to the conclusion of the discussions on the Finance Bill this year.
    8.30 p.m.
    Mr. Gaitskell: While we appreciate the caustic reference to the 1922 Committee, which might even be described, to use a favourite phrase of the Chancellor himself, as wounding, and while we also appreciate his very friendly and appreciative remarks about my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I must say that, as far as its substance is concerned, we thought his speech was utterly deplorable.
    I do not propose to rehearse the arguments again, except to say that I really
    think he ought not to expect us to swallow the talk about people of limited means. I suppose it could be a question of what the Chancellor and the right hon. and learned Member for Kensington, South (Sir P. Spens) understand by that phrase, but the plain fact is that, with the scale of Estate Duty as it is now, nobody will make very much out of dividing up insurance policies among their children if the total estate is under £10,000. That is the plain fact of the matter. The duty on £10,000 is only 4 per cent., so that comes to £400.
    I agree that one can save part of it, but the really big savings are going to come out of the big estates, such as those of £100,000, in which case the Estate Duty is 45 per cent. You can reduce that to whatever figure you like, according to the number of beneficiaries, and, as I showed during the Committee stage, it could be reduced to nothing in the final stage. But these are the people who are to gain, and, whatever the Chancellor and the right hon. and learned Gentleman may say, these are the plain facts of the matter. Whether or not the right hon. Gentleman regards them as very rich or not, I do not know, but they certainly are rich.
    However, we have had a long debate, we have expressed our point of view with great clarity and vigour, and it only remains for us to express our views in the usual way, which we shall do with particularly strong feeling, when we go into the Division Lobby.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes. 251; Noes, 214.

    Division No. 197.]

    AYES

    [8.31 p.m.

    Aitken, W. T.

    Braine, B. R.

    Craddock, Beresford (Spelthorne)

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

    Braithwaite, Sir Albert (Harrow, W.)

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

    Alport, C. J. M.

    Braithwaite, Sir Gurney

    Crosthwaite-Eyre, Col. O. E.

    Amery, Julian (Preston, N.)

    Brooke, Henry (Hampstead)

    Crowder, Sir John (Finchley)

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Brooman-White, R. C.

    Crowder, Petre (Ruislip—Northwood)

    Anstruther-Gray, Major W. J.

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

    Darling, Sir William (Edinburgh, S.)

    Arbuthnot, John

    Bullard, D. G.

    Davidson, Viscountess

    Baldwin, A. E.

    Bullus, Wing Commander E. E.

    Deedes, W. F.

    Banks, Col. C.

    Burden, F. F. A.

    Digby, S. Wingfield

    Barber, Anthony

    Butcher, Sir Herbert

    Dodds-parker, A. D.

    Barlow, Sir John

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

    Donaldson, Cmdr. C. E. McA

    Baxter, Sir Beverley

    Campbell, Sir David

    Donner, Sir P. W.

    Beach, Maj. Hicks

    Carr, Robert

    Doughty, C. J. A.

    Bell, Philip (Bolton, E.)

    Cary, Sir Robert

    Douglas-Hamilton, Lord Malcolm

    Bell, Ronald (Bucks, S.)

    Channon, H.

    Drayson, G. B.

    Bennett, Dr. Reginald (Gosport)

    Clarke, Col. Ralph (East Grinstead)

    Drewe, Sir C.

    Birch, Nigel

    Clarke, Brig. Terence (Portsmouth, W.)

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

    Bishop, F. P.

    Cole, Norman

    Duncan, Capt. J. A. L.

    Black, C. W.

    Colegate, W. A.

    Duthie, W. S.

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

    Conant, Maj. Sir Roger

    Eden, Rt. Hon. A.

    Boyle, Sir Edward

    Cooper-Key, E. M.

    Eden, J. B. (Bournemouth. West)

    Finlay, Graeme

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

    Robertson Sir David

    Fisher, Nigel

    Lockwood, Lt.-Col. J. C.

    Robinson, Sir Roland (Blackpool, S.)

    Fleetwood-Hesketh, R. F

    Longden, Gilbert

    Rodgers, John (Sevenoaks)

    Fletcher-Cooke, C.

    Low, A. R. W.

    Roper, Sir Harold

    Ford, Mrs. Patricia

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Ropner, Col. Sir Leonard

    Fort, R.

    Lucas, P. B. (Brentford)

    Russell, R. S.

    Foster, John

    Lucas-Tooth, Sir Hugh

    Ryder, Capt. R. E. D.

    Fraser, Hon. Hugh (Stone)

    McCorquodale, Rt. Hon. M. S

    Savory, Prof. Sir Douglas

    Fraser, Sir Ian (Morecambe & Lonsdale)

    Macdonald, Sir Peter

    Schofield, Lt.-Col. W.

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

    Mackeson, Brig. Sir Harry

    Scott, R. Donald

    Galbraith, T. G. D. (Hillhead)

    Mackie, J. H. (Galloway)

    Scott-Miller, Cmdr. R.

    George, Rt. Hon. Maj. G. Lloyd

    Maclay, Rt. Hon. John

    Shepherd, William

    Glover, D.

    Maclean, Fitzroy

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

    Godber, J. B.

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

    Smithers, Peter (Winchester)

    Gomme-Duncan, Col. A

    Macmillan, Rt. Hon. Harold (Bromley)

    Smithers, Sir Waldron (Orpington)

    Gough, C. F. H.

    MacPherson, Malcolm (Stirling)

    Snadden, W. McN.

    Gower, H. R.

    Macpherson, Niall (Dumfries)

    Spearman, A. C. M

    Grimston, Hon. John (St. Albans)

    Maitland, Patrick (Lanark)

    Speir, R. M.

    Grimston, Sir Robert (Westbury)

    Manningham-Buller, Rt. Hn. Sir Reginald

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

    Hall, John (Wycombe)

    Markham, Major Sir Frank

    Stanley, Capt. Hon Richard

    Hare, Hon. J. H.

    Marlowe, A. A. H.

    Stevens, Geoffrey

    Harris, Frederic (Croydon. N.)

    Marples, A. E.

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

    Harrison, Col. J. H. (Eye)

    Marshall, Douglas (Bodmin)

    Stewart, Henderson (Fife, E.)

    Harvey, Ian (Harrow, E.)

    Maude, Angus

    Stoddart-Scott, Col. M

    Harvie-Watt, Sir George

    Maudling, R.

    Storey, S.

    Hay, John

    Maydon, Lt.-Comdr. S L C

    Strauss, Henry (Norwich, S.)

    Head, Rt. Hon. A. H.

    Medlicott, Brig. F.

    Stuart, Rt. Hon. James (Moray)

    Heald, Rt. Hon. Sir Lionel

    Mellor, Sir John

    Summers, G. S.

    Heath, Edward

    Molson, A. H. E.

    Sutcliffe, Sir Harold

    Higgs, J. M. C.

    Moore, Sir Thomas

    Taylor, William (Bradford, N.)

    Hill, Dr. Charles (Luton)

    Morrison, John (Salisbury)

    Teeling, W.

    Hill, Mrs. E. (Wythenshawe)

    Nabarro, G. D. N.

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

    Hinchingbrooke, Viscount

    Neave, Airey

    Thomas, Leslie (Canterbury)

    Hirst, Geoffrey

    Nicholls, Harmar

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

    Holland-Martin, C. J.

    Nicolson, Nigel (Bournemouth, E.)

    Thornton-Kemsley, Col. C. N.

    Hopkinson, Rt. Hon. Henry

    Nield, Basil (Chester)

    Tilney, John

    Hornsby-Smith, Miss M. P

    Noble, Comdr. A. H. P.

    Touche, Sir Gordon

    Horobin, I. M.

    Nugent, G. R. H.

    Turner, H. F. L.

    Horsbrugh, Rt. Hon. Florence

    Oakshott, H. D.

    Turton, R. H.

    Howard, Gerald (Cambridgeshire)

    Odey, G. W.

    Tweedsmuir, Lady

    Howard, Hon. Greville (St. Ives)

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

    Vane, W. M. F.

    Hudson, Sir Austin (Lewisham N)

    Orr, Capt. L. P. S.

    Vaughan-Morgan, J. K.

    Hulbert, Wing Cdr. N. J.

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

    Vosper, D. F.

    Hurd, A. R.

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

    Wakefield, Edward (Derbyshire, W.)

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

    Page, R. G.

    Wakefield, Sir Wavell (St. Marylebone)

    Hyde, Lt.-Col. H. M.

    Peake, Rt Hon. O.

    Walker-Smith, D. C.

    Hylton-Foster. H. B. H

    Peto, Brig. C. H. M

    Wall, Major Patrick

    Iremongor, T. L.

    Peyton, J. W. W.

    Ward, Hon. George (Worcester)

    Jenkins, Robert (Dulwich)

    Pickthorn, K. W. M.

    Ward, Miss I. (Tynemouth)

    Johnson, Eric (Blackley)

    Pilkington, Capt. R. A

    Waterhouse, Capt. Rt. Hon. C.

    Johnson, Howard (Kemptown)

    Pitman, I. J.

    Watkinson, H. A.

    Jones, A. (Hall Green)

    Pitt, Miss E. M.

    Webbe, Sir H. (London & Westminster)

    Joynson-Hicks. Hon. L. W

    Powell, J. Enoch

    Wellwood, W.

    Kaberry, D.

    Price, Henry (Lewisham, W.)

    Williams, Gerald (Tonbridge)

    Kerby, Capt. H. B.

    Prior-Palmer, Brig. O. L

    Williams, Sir Herbert (Croydon, E.)

    Kerr, H. W.

    Raikes, Sir Victor

    Williams, Paul (Sunderland, S.)

    Lampton, Viscount

    Ramsden, J. E.

    Williams, R. Dudley (Exeter)

    Lancaster, Col. C. G

    Rayner, Brig. R.

    Wills, G.

    Langford-Holl, J. A

    Redmayne, M.

    Wilson, Geoffrey (Truro)

    Leather, E. H. C.

    Rees-Davies, W. R

    Wood, Hon. R.

    Legge-Bourke Maj. E. A. H.

    Remnant, Hon. p.

    Lennox-Boyd, Rt Hon. A. T.

    Ronton, D. L. M.

    TELLERS FOR THE AYES:

    Lindsay, Martin

    Ridsdale J. E.

    Mr. Studholme and Mr. Legh.

    Linstead, Sir H. N.

    Roberts Peter (Heeley)

    NOES

    Acland, Sir Richard

    Boardman, H.

    Cove, W. G.

    Adams, Richard

    Bottomley, Rt. Hon. A. G.

    Craddock, George (Bradford, S.)

    Allen, Arthur (Bosworth)

    Bowden, H. W.

    Crosland, C. A. R.

    Allen, Scholefield (Crewe)

    Bowles, F. G.

    Crossman, R. H. S.

    Anderson, Frank (Whitehaven)

    Braddock, Mrs. Elizabeth

    Daines, P.

    Attlee, Rt. Hon. C. R.

    Brockway, A. F.

    Dalton, Rt. Hon. H.

    Awbery, S. S.

    Brook, Dryden (Halifax)

    Darling, George (Hillsborough)

    Bacon, Miss Alice

    Broughton, Dr. A. D. D.

    Davies, Rt. Hn. Clement (Montgomery)

    Beattie, J.

    Brown, Rt. Hon. George (Belper)

    Davies, Ernest (Enfield, E.)

    Bellenger, Rt. Hon. F. J

    Brown, Thomas (Ince)

    Davies, Harold (Leek)

    Bence, C. R.

    Burke, W. A.

    Davies, Stephen (Merthyr)

    Benn, Hon. Wedgwood

    Burton, Miss F. E.

    de Freitas, Geoffrey

    Benson, G.

    Butler, Herbert (Hackney, S.)

    Deer, G.

    Bing, G. H. C.

    Castle, Mrs. B. A.

    Delargy, H. J.

    Blackburn, F.

    Champion, A. J.

    Dodds, N. N.

    Blenkinsop, A.

    Clunie, J.

    Dugdale, Rt. Hon John (W Bromwich)

    Blyton, W. R.

    Collick, P. H

    Ede, Rt. Hon. J. C.

    2450

    2451

    Edwards, Rt. Hon. John (Brighouse)

    King, Dr. H. M

    Roberts Goronwy (Caernarvon)

    Edwards, W. J. (Stepney)

    Kinley, J.

    Robinson Kenneth (St. Pancras, N.)

    Evans, Albert (Islington, S.W.)

    Lawson, G. M.

    Rogers, George (Kensington, N.)

    Evans, Edward (Lowestoft)

    Lee, Frederick (Newton)

    Ross, William

    Evans, Stanley (Wednesbury)

    Lee, Miss Jennie (Cannock)

    Royle, C.

    Fienburgh, W.

    Lever, Harold (Cheetham)

    Shackleton, E. A. A.

    Fletcher, Eric (Islington, E.)

    Lever, Leslie (Ardwick)

    Short, E. W.

    Follick, M.

    Lindgren, G. S.

    Shurmer, P. L. E.

    Forman, J. C.

    Lipton, Lt.-Col. M.

    Silverman, Julius (Erdington)

    Fraser, Thomas (Hamilton)

    MacColl, J. E.

    Simmons, C. J. (Brierley Hill)

    Freeman, John (Watford)

    McInnes, J.

    Skeffington, A. M.

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

    McLeavy, F.

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

    Gibson, C. W.

    Mallalieu, E. L. (Brigg)

    Slater, J. (Durham, Sedgefield)

    Glanville, James

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

    Smith, Ellis (Stoke, S.)

    Gordon Walker, Rt. Hon. P. C.

    Mann, Mrs. Jean

    Smith, Norman (Nottingham, S.)

    Greenwood, Anthony

    Manuel, A. C.

    Sorensen, R. W.

    Grey, C. F.

    Marquand, Rt. Hon. H. A.

    Soskice, Rt. Hon. Sir Frank

    Griffiths, Rt. Hon. James (Llanelly)

    Mason, Roy

    Sparks, J. A.

    Grimond, J.

    Mayhew, C. P.

    Steele, T.

    Hale, Leslie

    Mellish, R. J.

    Stokes, Rt. Hon. R. R.

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Messer, Sir F.

    Strauss, Rt. Hon. George (Vauxhall)

    Hall, John T. (Gateshead, W.)

    Mitchison, G. R

    Sylvester, G. O.

    Hamilton, W. W.

    Monslow, W.

    Taylor, Bernard (Mansfield)

    Hannan, W.

    Moody, A. S.

    Taylor, John (West Lothian)

    Hargreaves, A.

    Morgan, Dr. H. B. W.

    Taylor, Rt. Hon. Robert (Morpeth)

    Hayman, F. H.

    Morley, R.

    Thomas, George (Cardiff)

    Healey, Denis (Leeds, S.E.)

    Morris, Percy (Swansea, W.)

    Thomas, Ivor Owen (Wrekin)

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

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

    Thomson, George (Dundee, E.)

    Herbison, Miss M.

    Moyle, A.

    Thornton, E.

    Hewitson, Capt. M.

    Mulley, F. W.

    Tomney, F.

    Hobson, C. R.

    Noel-Baker, Rt. Hon. P. J

    Ungoed-Thomas, Sir Lynn

    Holman, P.

    Oldfield, W. H.

    Wade, D. W.

    Holt, A. F.

    Oliver, G. H.

    Wallace, H. W.

    Houghton, Douglas

    Orbach, M.

    Warbey, W. N.

    Hoy, J. H.

    Oswald, T.

    Weitzman, D.

    Hubbard, T F.

    Padley, W. E.

    Wells, Percy (Faversham)

    Hudson, James (Ealing, N.)

    Paget, R. T.

    Wells, William (Walsall)

    Hughes, Emrys (S. Ayrshire)

    Palmer, A. M. F.

    Wheeldon, W. E.

    Hughes, Hector (Aberdeen, N.)

    Pannell, Charles

    White, Mrs. Eirene (E. Flint)

    Hynd, H. (Accrington)

    Pargiter, G. A.

    Whiteley, Rt. Hon. W.

    Hynd, J. B. (Attercliffe)

    Parker, J.

    Wigg, George

    Irvine, A. J. (Edge Hill)

    Parkin, B. T

    Wilkins, W. A.

    Irving, W.J. (Wood Green)

    Paten, J.

    Willey, F. T.

    Isaacs, Rt. Hon. G. A.

    Peart, T. F.

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

    Janner, B.

    Plummer, Sir Leslie

    Williams, W. R. (Droylsden)

    Jeger, George (Goole)

    Popplewell, E.

    Willis, E. G.

    Jeger, Mrs. Lena

    Porter, G.

    Wilson, Rt. Hon. Harold (Huyton)

    Jenkins, R. H. (Stechford)

    Price, Philips (Gloucestershire, W.)

    Winterbottom, Ian (Nottingham, C.)

    Johnson, James (Rugby)

    Proctor, W. T.

    Winterbottom, Richard (Brightside)

    Jones, David (Hartlepool)

    Pryde, D. J.

    Woodburn, Rt. Hon. A.

    Jones, Frederick Elwyn (West Ham, S.)

    Pursey, Cmdr. H.

    Wyatt, W. L.

    Jones, Jack (Rotherham)

    Reid, Thomas (Swindon)

    Yates, V. F.

    Keenan, W.

    Reid, William (Camlachie)

    Younger, Rt. Hon. K.

    Kenyon, C.

    Rhodes, H.

    Key, Rt. Hon. C W.

    Richards, R.

    TELLERS FOR THE NOES:

    Mr. Holmes and Mr. J. T. Price.

    Question put, and agreed to.

  Fifth Schedule.—(AMENDMENT CONSEQUENTIAL ON ABOLITION OF PERMANENT ANNUAL CHARGE FOR NATIONAL DEBT.)
  Mr. Boyd-Carpenter: I beg to move, in page 50, line 25, after "Debt," to insert:
  "(including any such enactment contained in an Act of the same Session as this Act, passed at the same time as or after this Act)."
  Clause 32, to which this Schedule is attached, abolishes the permanent annual charge for the National Debt, and the Schedule makes certain consequential
  2452
  alterations in other Statutes. The purpose of this Amendment is to secure that these consequential changes are also effected in Bills at present before Parliament.
  Mr. Gaitskell: The Government will no doubt be glad to hear that, in view of the lucid and comprehensive explanation given by the Financial Secretary, we on this side of the House do not propose to oppose the Amendment.
  Amendment agreed to.
  Bill to be read the Third time Tomorrow, and to be printed [Bill No. 141].

HOUSING REPAIRS AND RENTS BILL
Lords Amendments considered.

Clause 2.—(POWER OF LOCAL AUTHORITIES TO RETAIN FOR TEMPORARY ACCOMMODATION CERTAIN HOUSES IN CLEARANCE AREAS.)
Lords Amendment: In page 3, line 34. leave out "as aforesaid" and insert:
"of providing such accommodation as is mentioned in subsection (1) of this section, or in the case of which it appears to them desirable that it should be retained for either of the purposes mentioned in paragraphs (a) and (b) of the last foregoing subsection."
Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): This Amendment raises a question of Privilege. If the House agrees, I shall cause a special entry to be made in the Journal.
8.43 p.m.
The Minister of Housing and Local Government (Mr. Harold Macmillan): I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment was made in another place on the representations of the local authority associations. Subsection (4) empowers a local authority to purchase houses for patching in a clearance area notwithstanding the fact that clearance orders have already been made in respect of them before the commencement of the Act. These are mainly pre-war clearance orders which, owing to the housing shortage, were not enforced.
The powers under this subsection will extend to houses which were not intended to be patched, but which were required for the support of patched houses or in connection with other purposes, such as the storage of tools and equipment. Houses required by local authorities for this purpose may already have been made the subject of clearance orders as were other houses, and, therefore, it seems reasonable that local authorities should have the right to purchase them in the same way as the others.
Mr. A. Blenkinsop: I just want to say that this is not a very important Amendment, and that we regard it as consequential to some of the discussions which we had earlier.

Clause 6.—(LICENCLS FOR TEMPORARY OCCUPATION OF HOUSES SUBJECT TO EXISTING DEMOLITION OR CLEARANCE ORDERS.)
Lords Amendment: In page 6, line 31, after "rent" insert "repairs."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment, which was brought to our attention by the Opposition in the other place, seeks to make explicit what we certainly intended to be implicit in the Clause already, and, therefore, we very much hope that the House on all sides will agree with the other place by accepting the Amendment.
Mr. Geoffrey de Freitas: My hon. Friends and I agree with this Amendment. The noble Lord, Lord Silkin, who moved it in another place, was vigilant in the passage of the Bill through the other place and my right hon. and hon. Friends and I would like to thank him. After all, this is one of his Amendments.
Lords Amendment: In line 10 at end, insert:

New Clause A.—(FURTHER PROVISIONS ABOUT OVERCROWDING.)
A.—(1) If it appears to a local authority, in the case of a house within their district, or of part of such a house, which is let in lodgings or occupied by members of more than one family, that excessive numbers of persons are being accommodated on the premises having regard to the rooms available, the authority may serve on the occupier of the premises or on any person having the control and management thereof, or on both, a notice—

(a) stating, in relation to any room on the premises, what is in the authority's opinion the maximum number of persons by whom it is suitable to be occupied as sleeping accommodation at any one time, or, as the case may be, that it is in their opinion unsuitable to be occupied as aforesaid; and

(b) informing him of the effect of subsection (3) of this section.

(2) For the purposes of paragraph (a) of the foregoing subsection a notice may, in relation to any room, prescribe special maxima applicable in any case where some or all of the persons occupying the room are under such age as may be specified in the notice.
(3) Any person who has been served with a notice under this section shall be guilty of an

2455
offence it, after the notice has become operative,—

(a) he causes or knowingly permits any room to which the notice relates to be occupied as sleeping accommodation otherwise than in accordance with the notice; or

(b) he causes or knowingly permits to be accommodated on the premises such a number of persons that it is not possible, without contravention a the foregoing paragraph or the occupation as sleeping accommodation of some part of the premises for which a maximum is not specified under paragraph (a) of subsection (1) of this section, to avoid persons of opposite sexes and over the age of twelve years (other than persons living together as husband and wife) occupying sleeping accommodation in the same room

(4) Any person committing an offence under this section shall be liable on summary conviction to a fine not exceeding five pounds and, where the offence of which he was convicted continues after conviction, to a further fine not exceeding two pounds for every day for which the offence so continues.
(5) Section fifteen of the principal Act (which provides for an appeal against certain notices and orders under Part II of that Act and determines the date on which a notice or order is to become operative) shall apply in relation to a notice under this section as it applies in relation to a notice under the said Part II requiring the execution of works and in section one hundred and fifty-seven of that Act (which confers powers of entry for purposes connected with housing) the reference in paragraph (d) to Part IV of the Act shall include a reference to this section.
(6) Where a local authority has served a notice under this section in respect of any premises, they may at any time withdraw the notice, without prejudice to anything done in pursuance thereof or to the service of another notice, or, if there is any material change of circumstances, they may substitute for the notice a further notice under this section; and, where a notice is withdrawn, subsection (3) of this section shall cease to apply in relation to the premises, without prejudice to its further application if a subsequent notice is served in respect of the same premises.
(7) The powers exercisable by a local authority under this section shall be without prejudice to those conferred by the last foregoing section, and nothing in this section shall be taken as prejudicing the provisions of Part IV of the principal Act (which relates to oven crowding in separate dwelling houses).
8.45 p.m.
Mr. Deputy-Speaker: This Amendment raises a question of Privilege. If the House agrees, I shall cause a Special Entry to be made in the Journal.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This new Clause is designed to fill a gap which might otherwise exist in the
2456
power of local authorities. It does not revive the byelaw-making power but empowers the local authorities to serve notices on occupiers as to the way in which sleeping accommodation in lodging houses and other places may be used, and makes the breach of their requirements an offence. It removes a weakness which would otherwise exist in the full powers of the local authorities.
Mr. Blenkinsop: This is a rather more important matter. We had quite a debate on this question in Committee. It was pointed out then that, with the fairly sweeping abolition of the byelaw-making powers of local authorities, there was a good deal of anxiety not only about lodging houses but about other matters. In so far as this new Clause meets a very small part of the problem we raised at that time, we are, of course, very grateful.
Some little anxiety was mentioned by Lord Silkin in another place, and also by ourselves in Committee, as to whether local authorities would fully recognise their responsibility to provide other accommodation for those who might be displaced in carrying out the provisions of this particular Amendment and other provisions in the Bill. While we have had a certain easement of our anxiety by references made in another place, and by the Minister pointing out that it is most highly unlikely that the local authority would carry out the procedure unless it was quite satisfied that it had other accommodation available, it is worth asking the Minister whether he will draw the attention of local authorities to this point.
Mr. C. W. Gibson: There is one point which seems to need clarification. The Minister said that under this Bill the byelaws built up by local authorities to deal with overcrowding have gone. As I understand this Amendment, it provides that, where a local authority is satisfied that in its area there are over-occupied houses, it can give a notice to the owners that such houses are over-occupied and order them to reduce the occupation. To me it seems that thereby the person turned out loses completely the protection of the Rent Restriction Acts. Perhaps the Minister can tell the House whether that is correct.
A further point is that I do not see how the housing authorities are to

2457
administer this without themselves building up some rules and regulations as to what constitutes overcrowding. Is it to be the old legal definition of more than two persons to a room? If so, it will not work, in view of the quite proper reference in the Amendment to the separation of the sexes after they reach a certain age. If this arrangement is to work effectively, all local authorities will have to build up a working system incorporating a definition of overcrowding. I very much doubt whether many local authorities will operate the scheme.
What happens in a case where the children of the family have grown up and married but, owing to the housing difficulty, are compelled to live at home, as many thousands still are, and, legally, overcrowd their accommodation? Are the parents subject to an order from the local authority forcing them to reduce the overcrowding and turn out their own sons and daughters without any rent restriction protection or guarantee that alternative accommodation will be provided?
Those are points to which the Minister should pay some attention and endeavour to meet in some way. Apart from those considerations, the Amendment is a good one, because it attempts to deal with a problem which local authority byelaws used to attempt to deal with, if not always too successfully. Subject to receiving a reply upon the points which I have raised, I see no objection to the Amendment.
Mr. J. A. Sparks: I want to reinforce the argument made by my hon. Friend the Member for Clapham (Mr. Gibson). It seems to me that, on the one hand, the right hon. Gentleman has swept away the whole system of byelaws which local authorities have established over the years to deal with precisely this problem and, on the other, has substituted an alternative which, though good as far as it goes, does not go far enough. First, as my hon. Friend has said, local authorities cannot deal properly with each individual case unless they can have reference to some sort of code. The proposed Amendment seems to permit local authorities to do certain things, but they will have some difficulty in deciding precisely what direction they should give in regard to a number of cases which may be very similar to one another.
2458
It seems to me that, with the passing of time, local authorities will inevitably have to reinstitute a code—whether we call it a system of byelaws or something else—if they are to exercise their powers fairly and impartially. If they are permitted to do so under the Amendment, the right hon. Gentleman has gone very far towards meeting our case. If, on the other hand, the Amendment merely permits local authorities to deal with each case on its own merits, there will be a great deal of confusion. It is not incumbent upon a local authority to deal with case A in the same way as it has dealt with case B, in spite of the fact that the conditions in both cases are roughly equal.
So I should like the right hon. Gentleman to say a word on this aspect of this problem—whether he expects local authorities, because of the powers he gives them, to evolve a code that they will apply impartially in all these cases that will come before them. Otherwise, I can see that this provision will lead to a good deal of confusion.
Mr. H. Macmillan: By leave of the House, I would answer the important points that have been raised. As regards rent restriction, this Clause deals only with lodgers, and lodgers are not covered by rent restriction provisions. So that question does not arise. As regards the question the hon. Member for Clapham (Mr. Gibson) asked, which was raised by Lord Silkin in another place, as to whether it would be wise to make the provision that alternative accommodation must be provided by the local authorities.
I think it would be wiser to leave it as we now leave it in the case of demolition orders. There is no legal obligation on a local authority, when it makes a demolition order, to provide alternative accommodation, though I think that local authorities do provide alternative accommodation when they find themselves able to do so. I think we ought to leave the matter of lodging houses in the same way, knowing that it will be dealt with in the same manner by the local authorities.
As to the question the hon. Member for Acton (Mr. Sparks) raised, I do not know whether the local authorities will develop a code, but no doubt they will develop a practice which itself will develop into a code. We have a great

2459
variety of situations in our cities, and in this matter of alternative accommodation—an important one, the most important of all—the practice will vary greatly, with the opportunities open to local authorities to do what they ought to do. We have given them powers, and by so doing have met a great many of the requests made to us before, and we must let practice develop according to what the situation may be.

Clause 15.—(AMENDMENTS OF HOUSING ACT, 1949.)
Lords Amendment: In page 13, line 42, leave out "ten" and insert "fifteen."—[Special Entry.]
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
Those who followed our debates will remember that we had considerable difficulty about what was the proper expectation of life of a house for which an improvement grant was to be made. I was so anxious, as I am and as all the Government are, to get on with this rather cheap way, compared with the cost of new building, of getting proper accommodation, that I was anxious to reduce it from 30 years, which seemed to us an unduly high limit, and I argued for 10. Hon. and right hon. Gentlemen opposite argued for 20. By one of those arrangements which seem particularly suitable in a revising Chamber, it has been agreed that it should be 15. Although I know that that does not meet all that hon. and right hon. Gentlemen opposite asked for, I hope that they will feel that we have gone some way to meeting them, and that we may leave it to the wisdom of the local authorities how they operate the improvement grant system with this little extra latitude allowed to them.
Mr. de Freitas: As the right hon. Gentleman has pointed out, we wanted 20 years. We moved an Amendment to that effect in Committee. It was not carried. Another place suggests 15 years. We preferred 20 to 10 and we prefer 15 to 10, although we still prefer 20.
Lords Amendment: In page 14, line 4, leave out "a period equal to the period" and insert:
2460
"whichever is the shorter of the following two periods, that is to say—

(a) thirty years; or

(b) a period equal to that.—[Special Entry.]

Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is little more than a drafting Amendment. It is to put the position of a leaseholder in correspondence with that of the improvement grant system.

Clause 23.—(RENT NOT TO BE INCREASED ABOVE TWICE GROSS VALUE.)
Lords Amendment: In page 20, line 16, at end, insert:
(4) Subsection (2) of section seven of the Act of 1938 (which relates to the ascertainment of the amount payable by the landlord for rates) shall apply for the purposes of this section as it applies for the purpose of computing the increase of rent permissible under paragraph (b) of subsection (1) of section two of the Act of 1920.
9.0 p.m.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The Amendment is designed to bring the provisions as to the amount to be deducted for rates for the purpose of calculating or ascertaining the working of the "stopper" into line with the provisions of the Rent Acts applied by this subsection. Those provisions enable a landlord, in increasing rent on account of increased rates payable by him, to include in the increase any amount of discount or allowance made to him by the local authority for collecting them. The effect of applying this provision is that in making the calculations as to what point the stopper operates, that is the amount deducted for rates, any allowance made to the landlord by the rating authority will be treated as part of the amount payable by the tenant.
Mr. Blenkinsop: This appears to make the existing position even more complex than before. We cannot see any major harm in it, however, and therefore we do not oppose it.

Clause 24.—(NOTICE AND DECLARATIONS PRELIMINARY TO RECOVERY OF REPAIRS INCREASE.)
Lords Amendment: In page 20, line 26, leave out "containing," and insert "accompanied by."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is the first of a series of Amendments—I think there are 14 altogether—which are really little more than drafting Amendments. Clause 24 (1) requires the notice of repairs increase to contain the declarations which are provided for. The purpose of the Amendment is to enable the forms of declaration, which will vary with circumstances, to be prescribed separately and to accompany rather than be contained in the notice of the increase; which will make it much easier to get the forms printed, distributed and made more readily available.
Mr. Blenkinsop: I wish to take this opportunity of asking for some assurance of the Minister, which I am sure he is ready to give, that it is his intention to ensure that the tenant shall get the Fullest possible information as to the procedure which he can follow, and as to what the landlord has actually done in order to qualify for the increase which he is claiming.
Mr. Macmillan: If I may reply, by leave of the House, I can assure the hon. Member that, although we are awaiting for the Royal Assent before we can act, we have been working at preparing all the necessary forms and explanatory pamphlets in a simple way as well as the legal forms in order to make the matter as widely understood as possible.
Lords Amendment: In page 20, line 27, after "declaration," insert "in the prescribed form."
Mr. H. Macmillan: I beg to move. "That this House doth agree with the Lords in the said Amendment."
This Amendment and the ones immediately following are consequential.
Further Lords Amendments agreed to: In page 20, line 30, after "declaration," insert "in the prescribed form."
Leave out line 36, and insert:
"(3) The forms prescribed for the purposes of this section shall be such as, taken together, to."
In line 43, after "increase," insert:
"or a declaration accompanying such a notice."
In line 44, after "notice," insert "or declaration."
In line 46, after "notice," insert "or declaration."
In page 21, line 3, after "notice." insert "or declaration."
In line 4, leave out "of increase," and insert "or declaration."

Clause 25.—(DETERMINATION WHETHER CONDITIONS FULFILLED TO JUSTIFY INCREASE OF RENT.)
Lords Amendment: In page 21, line 25, leave out "annul the certificate and thereupon" and insert:
"order that the certificate shall cease to be in force.
(3) Where an order is made under the last foregoing subsection as respects a certificate"
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment and the next one are linked together. They were made to meet a point which was raised by Lord Silkin in another place. It was suggested that landlords might unduly delay the institution of proceedings for the recovery of arrears of repairs increase held by a tenant on the strength of a certificate of disrepair which the landlord considered to have been incorrectly granted; the validity of which, therefore, he proposes to test by proceeding against the tenant for recovery. I should have thought that if there was an undue delay that might act harshly upon the tenant, and this Amendment, suggested by the noble Lord and accepted by the Government, and the next one, give power to the court, if they are satisfied that the landlord has been dilatory in instituting proceedings, to make the proper consequential reduction in the arrears to be collected.
Mr. Blenkinsop: While we are prepared to accept this Amendment, we have always felt, in Committee and in another place, that it was quite monstrous, after a local authority had issued a certificate of disrepair on which the tenant could feel that he could rely, for the landlord to be able to go to the

2463
courts and get it set aside, so that, in fact, the tenant would have no security by getting a certificate.
Although this Amendment to a very slight extent mitigates the hardship in the sense that it relieves the tenant from having to pay back a great mass of arrears due to the dilatory action of the landlord, it in no way deals with the major point which we raised in Committee, and about which we still feel very deeply, and which more and more local authorities are coming to realise means that none of their certificates which they may or may not issue has any certainty of action at all. Therefore, while we are willing to accept the Amendment, we realise that it in no way meets the points which we have raised.
Mr. James MacColl: These proceedings draw one's attention to the fact that there is a happy land far, far away where there is no Guillotine. This matter, which is the subject of this Amendment, was never discussed in Committee or on Report because it was not reached owing to the falling of the Guillotine. It is a very important question and one which, I agree with my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), goes to the root of the whole of this procedure, and one which will create a shocking feeling of uncertainty not only among tenants but among local authorities and officials who have no means of telling whether or not their certificates will be regarded as valid.
There is the additional, and what seems to me monstrous, corollary, that the proceedings under which these certificates are to be determined take the form of proceedings against the tenant for rent, and presumably in any such proceedings the tenant will be the defendant, who, if he loses the action in the county court, will be liable to pay the costs of the action. We have the incredible position of a public authority sending its official, who has nothing to do with the tenant or landlord, to arbitrate on this question, to interpret the law and to make a decision quite impartially on the matter. If he happens to be a bad sanitary inspector, or happens to meet a county court judge who takes a different view about the vague definition of repairs in the Bill, the wretched tenant is to be
2464
penalised and may have to pay the costs of the proceedings. It is difficult to imagine anything more outrageous on the tenant.
One point rather worries me. The next Amendment, in line 26, says
"that the court may, if it appears just so to do by reason of undue delay by the landlord in bringing the proceedings…"
Does that include the landlord and his predecessor in title?
What is likely to happen will be something like this. The certificate of disrepair is produced to the landlord and he accepts it. He may think that it is inherently just or he may not want to bother about it further. He accepts it, and on the basis of that certificate the rent increase is deducted. At some subsequent date the landlord sells the property or assigns it to another landlord, who is rather more expert in the devious routes of getting round the Rent Restrictions Acts.
That new landlord may say, "Ah, but we can shake this certificate. It is well known that Judge So-and-so cannot stand the sight of sanitary inspector So-and-so. Let us have a good run for our money." This landlord takes the matter into the county court and gets the certificate upset. He would not be in delay—he would have moved on his nefarious business as quickly as he could—but his predecessor would have delayed. Will this delay by the previous landlord be sufficient to protect the tenant, or will the county court be forced to order that the certificate ceased to be in force back to the date when the original application was made to the local authority?
If that happens, there will be a wonderful traffic in buying up houses with certificates of repair in order to get them withdrawn and to get the arrears collected back. Therefore, the very difficulty which the Amendment is designed to meet may still remain. I wish that the right hon. Gentleman would address his mind to this problem.
Mr. Gibson: The Amendment is a considerable improvement from the point of view of tenants, who will be able, as I understand the Clause, if they fail in the county court, to have the certificate dated from some other date than that on which the landlord first served the claim on the tenant. The court will be able to fix it from any date

2465
it likes after the date of the first serving of the notice. That is all to the good.
This is what bothers me. There will be a large number of requests for certificates of disrepair all over the country. If my correspondence or the things one hears at the many meetings I have had to attend in connection with the Bill are any guide, there will be a spate of objections by tenants and claims on local authorities for certificates of disrepair. The landlords will be able to take all those tenants to the county court. That in itself would be frightening enough to most ordinary tenants in the back streets of our great cities.
This, surely, is another strong argument for introducing legal aid in county courts. It has always seemed to me that there has been quite unnecessary delay in implementing that part of our law. Unless we can get assistance under the Legal Aid and Advice Act for tenants in county courts—it can only be done by Government action—tenants whose certificates of disrepair are challenged will be in great difficulty, not only in having to meet the cost, but in many cases they will be frightened into ceasing to resist the claims of landlords who, under the Bill, would not strictly be entitled to the advance in rent for which they were claiming. I hope that the Government will take note of this point.
9.15 p.m.
Mr. G. Lindgren: The Amendment enables me again to call attention to the whole emphasis of the Bill from start to finish: the privilege for the landlord and the bias against the tenant.
May I deal with the question of the certificate granted when the tenant considers that the property is not in good repair? He can apply to a local authority for a certificate of disrepair. If the sanitary inspector refuses to grant it, that is an end to the matter; the tenant has no court of appeal, there is nowhere he can go to rectify what he may feel to be a wrong decision by the sanitary inspector.
On the other hand, if the tenant takes advantage of his right under the Bill to go to the sanitary inspector for a certificate of disrepair, and the certificate is granted, then immediately, the Minister, being a friend of the landlord, provides the landlord with an opportunity to upset
2466
the certificate of disrepair which the local authority has issued. The responsibility for issuing the certificate is that of a public authority, but when it is challenged by the landlord, the responsibility for bearing the cost of court action can fall upon the tenant.
Let no one imagine that county court procedure can be cheap. Property owners are trade unionists in their way; they belong to associations of property owners who brief solicitors and counsel, and the hierarchy within the legal profession means that there have to be corresponding layers of professional assistance on the other side. This means that any tenant who is challenged by a landlord may have to face an expenditure of £20. In giving that figure, I am being modest: I was about to say "conservative," but I should not like anybody to accuse me of that. These proceedings can easily cost the tenant £20.
I ask the Minister bluntly, what right has he to place a possible obligation on the tenant, where the landlord challenges a local authority's certificate, to meet a cost of £20? While the Amendment makes some concession in that the landlord who delays cannot get all the money hack, it is nevertheless monstrous, in my view, that no protection should be given to the tenant from one end of the Bill to the other.
Mr. Sparks: I want to reinforce what has been said by my hon. Friends. Will the right hon. Gentleman consider whether the county court is the place where this matter should be settled? There are other bodies which I should have thought would be competent to make a decision in such a case. It is not essentially a legal question. We have rent tribunals and courts in existence, and I should have thought that the Minister could consider whether it was possible in such cases as this, where the landlord challenges a certificate of disrepair, to take the matter to the rent tribunals. These tribunals are familiar with such problems.
If they were taken to the rent tribunal, the tenant would not be involved in the risk of having to pay costs in the event of the certificate being disallowed. I cannot see why the right hon. Gentleman wants to involve the county court in this matter at all, and I ask him to reconsider it and

2467
to see whether it is not possible for these cases to be referred to the rent tribunals.
Further Lords Amendment made: In page 21, line 26, at end insert:
Provided that the court may, if it appears just so to do by reason of undue delay by the landlord in bringing the proceedings, order that it shall be deemed to have been in force until such date as may be specified in the order.

Clause 27.—(PASSING ON OF REPAIRS INCREASE TO SUB-TENANT.)
Lords Amendment: In page 24, line 3, leave out, "and subsection (3)" and insert:
"Any form prescribed for the purposes of this subsection shall contain such information as appears to the Minister expedient for informing the sub-tenant of the effect of the notice; and subsection (4)"
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is consequential on the previous Amendment in the first part. The second part brings it into line with Clause 24 (4).

Clause 32.—(EXCLUSION FROM RENT ACTS OF LETTINGS BY LOCAL AUTHORITIES. DEVELOPMENT CORPORATIONS, AND HOUSING ASSOCIATIONS AND TRUSTS.)
Lords Amendment: In page 28 line 20, after "whole" insert:
"or substantially the whole."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is rather peculiar and it has a certain interest. It is designed to remove a doubt as to whether one housing trust to which Clause 33 refers, the Sutton Dwellings Trust would be prevented from being a housing trust as defined in the second part of subsection (9) by reason merely of the fact that its funds, which are required to be devoted to charitable purposes and are in fact devoted to the provision of housing accommodation for poor members of the working class, are in addition the funds are charged with the payment of a small amount annually for the maintenance of the grave of the founder of the Trust. Since this small sum has to be paid this
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trust might be held not to be within the terms of a housing trust. The point came to our notice and I feel that hon. Members would feel it right that we should correct the matter.
Mr. Gibson: As one of the trustees. I merely wish to say that we believe that this slight alteration in the Clause will cover the caring for the grave without putting us outside the terms of the Bill. We are grateful to the Minister for putting the matter right.
Further Lords Amendment agreed to: In line 23, leave out "them" and insert:
"the whole or substantially the whole thereof."
Lords Amendment: In page 35, line 35, at end, insert:

New Clause B.—(DATE FOR PERMITTED INCREASES FOR INCREASES IN RATES.)
B.—(1) Subsection (2) of section three of the Act of 1920 (which relates to the time as from which permitted increases of rent are recoverable from a tenant) shall have effect, in relation to increases permitted by paragraph (b) of subsection (1) of section two of the Act of 1920 (which provides for increases of rent in respect of increases in the amounts payable by the landlord for rates), subject to the following provisions:—

(a) any such permitted increase shall be recoverable from, and in respect of the period beginning with, the day specified in the next following subsection;

(b) where at the time when the notice of increase is served the tenant is a statutory tenant, the amount of any such permitted increase may include an amount in respect of a period immediately preceding that mentioned in the last foregoing paragraph and beginning not earlier than six weeks before the date of service of the notice of increase nor earlier than the beginning of the statutory tenancy, and any amount so included shall be deemed to be rent due on the day specified in the next following subsection.

(2) The day referred to in the last foregoing subsection—

(a) where at the time of service of the notice of increase the tenant is a statutory tenant, is the next day after the service of the notice on which an instalment of rent is payable under the terms of the statutory tenancy.

(b) in any other case, is the day after the date on which by virtue of subsection (1) of section one of the Rent Restrictions (Notices of Increase) Act, 1923, the notice of increase operates to terminate the tenancy.

(3) Where under any tenancy the amount of any such permitted increase for rates as is mentioned in subsection (1) of this section is recoverable without a notice to terminate the tenancy being necessary in order to make

2469
the increase effective, the foregoing provisions of this section shall apply as they apply where at the time when the notice of increase is served the tenant is a statutory tenant, but with the substitution of references to the tenancy for references to the statutory tenancy.
(4) In this section the expression 'notice of increase' means the notice of intention to increase rent served in conformity with subsection (2) of section three of the Act of 1920.
(5) In accordance with the foregoing provisions of this section the said subsection (2) shall be amended as follows:—

(a) after the words 'no such increase shall' there shall be inserted the words 'save as provided by section (Date for permitted increases for increases in rates) of the Housing Repairs and Rents Act, 1954';

(b) the words 'or, where such increase is on account of an increase in rates, one clear week' shall cease to have effect.

Read a Second time.
Mr. de Freitas: I beg to move, as an Amendment to the Lords Amendment, in subsection (1), to leave out paragraph (b).
I hope that the eloquence of my hon. Friend the Member for Widnes (Mr. MacColl) will convince the Minister.
Mr. MacColl: I hope that it will be possible for me to explain our attitude to this new Clause which has been proposed in another place, and to give a general picture, without unduly trespassing outside the rules of order.
As I understand the position, this new Clause is designed ostensibly to meet the recommendation contained in the second Report of the Ridley Committee issued in 1945. It deals with the problem of making adjustments in controlled rents in order to meet increases in rates. Under the present legislation a landlord who receives a demand note for an increased rate may add to the weekly rent an increase of a comparable amount. The difficulty which has arisen is that the landlord may get caught in two ways.
In the first place, he has to give one clear week's notice before he raises the rent, and that may miss the next rent day, and therefore he may be a fortnight or so in arrears. The second problem with which the new Clause deals is that the demand note may arrive some time after the resolution has been passed by the council making the new rate. One gathers that there are people fortunate enough to live in the area of a local authority where this sort of thing happens. In most cases it arrives too quickly.
2470
One gathers that there are cases where it may arrive some weeks after the new financial year—or the six months, it may be—has commenced. Then, although the landlord may know, he cannot reimburse himself from the tenant because he has not had the demand note. I understand that those are the two points which the new Clause is designed to meet.
Our first objection is that this is no time and this is no Bill in which to introduce such a provision. In Committee upstairs we made many proposals for reforming the Rent Acts to meet injustices to the tenants. The most notable example was the problem of succession to a tenancy on the death of the tenant and the widow. There were other examples where we tried to deal with practical cases and to soften the impact of the Bill upon the tenant. In almost every case the Minister stonewalled by saying, I am not reforming the Rent Acts; "I am dealing with a very specialised and narrow point, namely, the increase of rents to meet repairs."
That was the basis upon which the right hon. Gentleman introduced the Bill. That was the basis on which he resisted Amendments proposed by the Opposition in Committee. It was on that understanding that the Bill went to another place. Therefore, I suggest that it really is intolerable that in a Bill dealing with that narrow point which has been carefully considered in this House, another place should take it upon itself to insert this proposal making a change in the ordinary rent restriction legislation.
The proposal has nothing to do with repairs at all. It is irrelevant to the main purpose of the Bill, which is to deal with the problem of the cost of repairs. This deals with a problem which has existed now for many years. This flaw, if it be a flaw, in the Rent Acts goes back to 1920, I suppose. I was not frightfully active before then and I cannot remember whether it was in the 1915 or the 1920 Act. I remember noticing the point when I read the 1920 Act. It may have been in the 1915 Act; I do not know. There it is. We got along quite well without too much difficulty.
Every argument which the Minister used to resist our proposals for amending the Bill in favour of the tenant could be used against this proposal which merely

2471
deals with an anomaly which has become accepted because it is something that has gone on for some time. Therefore, our first objection is that it is wrong to put in a proposal of this sort which will have the effect of increasing the rents of the tenants.
There is a second difficulty to which I should draw attention. The proposal is that a landlord shall be able to claim six weeks' arrears of increase. It is true that the amount of the average increase on a weekly rent will not be very much. It may be that the amount involved in six weeks will not be very large, but the whole point of the weekly tenancy is that the tenant knows where he is. He knows his obligations, and the first charge on the weekly wage is the rent. The rent is put on one side and paid over to the landlord on a Monday morning. The payment of the rent is regarded as a primary obligation. This is not something which the tenant has avoided. It is the local authority which is to blame.
9.30 p.m.
This proposal will create debts for tenants. They will be faced with substantial claims for six weeks' arrears of the increase. That is a basic factor affecting the daily lives of weekly tenants which this House ought not to accept. The Bill was passed in this House for another purpose, and I object to another place tacking on to it a proposal to raise rents in this manner. We should object to it on the grounds that if we are going to reorganise and reconstruct the Rent Restrictions Acts, we shall do the job as a whole and look not only at the things which will help landlords but also at the things which will help tenants.
I shall try to deal with the third point which arises if I can do so without getting out of order. It is the problem arising from the fact that the proposal is unilateral in its effect. It is extremely disingenuous for anyone to suggest that this is carrying out the proposals of the Ridley Report. The problem which arises is what happens if rates fall. It may seem strange to the House, but in the 1920 Act it was not at all clear that when rates fell the tenant could cease to pay the increase. In 1924, in the case of Strickland v. Palmer, the divisional court decided that the tenant could not claim a reduction in his rent if there was a reduction in the
2472
rates. That decision was upset by the Court of Appeal, and it is upon the decision of the Court of Appeal in that case that the present law rests that it is possible for a tenant to get back the increase when the rates fall.
The decision arises out of the interpretation of Section 2 (1, b) and Section 12 (1, d) of the 1920 Act. I need not bother the House by reading the whole of the judgment of Lord Justice Acland on the subject, but I strongly recommend it to any of my hon. Friends who require a pleasant evening's reading. The proposal of the Ridley Report in paragraph 74—
Mr. Deputy-Speaker: It is not clear to me how that matter arises on this Amendment.
Mr. MacColl: I do not know that it is quite clear to me either, Mr. Deputy-Speaker. I am only trying to avoid bothering the House by making two speeches. The point arises mainly on the second Amendment, which relates to the fact that the proposal is not bilateral in that it is for the benefit of the landlord and not for the benefit of the tenant. If that is your direction, Mr. Deputy-Speaker, I will happily make another speech on the subject in a few moments' time.
Our real object in seeking to delete the paragraph is that, although it sounds a complicated problem, there is a very important principle behind it, which is that, having had this dreadful Bill foisted upon us, we should restrict its mischief as much as possible. The Minister took the line that he was dealing only with the problem of the repairs. If that is his line, he must harden his heart against another place and stick to that line. Therefore. it is not something which should be brought in at this very late stage. That is the first point.
The second point is that, of all proposals to introduce into a Bill of this sort, the one least to be expected by the House was that which places tenants in the position of having to meet six weeks' arrears of increase of rates when it is not their fault at all that those arrears have been occasioned. Surely, the whole principle in weekly tenancies is that the tenant knows where he is from week to week, and can be quite sure that, having paid the landlord on Monday morning, he need have no more fears.
Mr. H. Macmillan: It is difficult to discuss this Amendment without relation to the Clause which it is proposed to alter, and indeed the hon. Member was allowed to explain what the new Clause did. He explained it extremely well, and has really saved me the trouble of doing it again, because he put the case very fairly and clearly.
Perhaps it would also help our discussion if I indicated that we propose to ask the House to accept the second Amendment, which seems to us to be perfectly fair and logical. Indeed, I indicated that to the hon. Gentleman when we thought that this matter was to come before us on another day, and we arranged that the correct wording should cover the point which the hon. Gentleman had in mind. Therefore, this Amendment is a negative of the new Clause, because, if carried, the new Clause would really cease to be operative, so that, in arguing that point, the hon. Gentleman was right and in order, because he was arguing on the basis whether or not the new Clause should be added to the Bill.
I was very conscious of the strength of the point which the hon. Gentleman made. He did not try to argue against the Clause as such, and I think he was fright, because it is fair, logical and it removes an anomaly. I think that it was for this reason that Lord Silkin said that, on the whole, it was a reasonable Amendment, and, after all, the noble Lord speaks with a good deal of authority. I think, therefore, that there is no objection to the substance of the Clause—which this Amendment would destroy—but that one should ask whether it is timely and whether it is right to put it in at this stage.
I shall be perfectly frank with the House and say that I have, broadly speaking, resisted any attempt to use this Bill, which is mainly to deal with the problem of keeping houses in repair, for undertaking a general review of the rent restriction system, but, like all good resolutions, there have been some exceptions to it, and the two major exceptions were both agreeable, I think, to the Opposition.
The first was to meet the point in the case of the passing of a tenancy where a woman was separated from her husband, which led to some anomalies and hard-
2474
ships. It was not strictly to do with my main purpose, but I accepted it. The second was really more important and covered a point which had aroused a great deal of interest in the Opposition and carried support from them. That was to prevent abuse of the power of getting control of an agricultural cottage by buying the cottage, then declaring it to be an agricultural cottage, and thereby obtaining possession of it. That was quite a large issue. On those two occasions I thought it right to advise the Committee to go a little wider, and to break our own rule.
Therefore, having done that on one or two occasions, I hope that I may be forgiven for saying that it is not unreasonable—the proposed new Clause being generally agreed to be a good one by both sides in another place—to say that it meets a point, and that we could perfect it by accepting the second Amendment to the Lords' Amendment, to deal with this happy situation. I should have done it myself, but I frankly admit that I did not think the problem of falling rates was likely to be very oppressive. The Amendment certainly makes it logical. I admit that it is a breach of our general rule, but there have been the other breaches. I hope that the House will feel that it is right on this occasion to agree with the Lords Amendment.
Mr. Blenkinsop: I am afraid that on this side of the House the matter does not take on the same rosy view as it does with the Minister. I confess that by announcing that he intends to accept the second Amendment he makes the position much more logical than it stood originally on the Order Paper.
It is fair that we should point out that at the earlier stages of the Bill we strongly pressed for many valuable Amendments to be made to the Rent Restrictions Acts. The Minister has referred to one or two small but valuable changes which he made, after great agitation from this side of the House. It seems rather extraordinary that, after the Bill had gone to another place, there should arise this quite novel point, in the sense that it had not been the subject of discussion in the Committee. I do not mean that it has never been raised in public discussions.
Mr. John Hay: The hon. Member may recall that on the Report stage my hon. Friend the Member for Bedfordshire, South (Mr. Cole) and myself moved an Amendment with the very point in mind that is contained in this Lords Amendment. It is therefore not a novel point. Perhaps the hon. Gentleman was not listening on that occasion.
Mr. Blenkinsop: Then it is due to pressure from the landlords' association.
Mr. Hay: We did not press the Amendment, because the Parliamentary Secretary said exactly what the hon. Member for Widnes (Mr. MacColl) has just said about amending the Rent Restrictions Acts.
Mr. Blenkinsop: The landlords' association has a much stronger influence in another place than its representatives have in this House, which is a sad commentary upon the constitutional position of this House. If we are to have the pressure of the landlords, let us have it here and not in another place where we tend to lose sight of what happens.
Seriously, I do not think we should quite brush aside the point that although the sums involved may be small, as we admit, this does not count very considerably with many of the people who are likely to be affected by the Bill. This is a small, further annoyance and difficulty that many tenants may have to face. Because of that, we think the Minister should have thought again about whether it is worth while bringing in the whole of this new Clause at all.
I make this final appeal to the right hon. Gentleman on what I am sure he will regard as a relatively small matter—whether it would not be worth his while to say to their Lordships that, in view of the whole background of the matter, it is hardly worth while pursuing it.
Amendment to the Lords' Amendment negatived.
9.45 p.m.
Mr. de Freitas: I beg to move, as an Amendment to the Lords Amendment, in subsection (5), at the end, to add:
(6) Where for any period for which a rate is demanded (hereinafter referred to as "the rating period") the amount of the rate is increased, and by virtue of paragraph (b) of subsection (1) of this section the amount of
2476
any consequent permitted increase for rates includes an amount in respect of a period preceding that mentioned in paragraph (a) of that subsection, paragraph (d) of subsection (1) of section twelve of the Act of 1920 (which provides that any increase in rates payable by a landlord shall be deemed to be payable by him until the rate is next demanded) shall not so extend the period for which the increase is recoverable as to make it longer than the rating period.
The Minister indicated that the words on the Order Paper had benefited from the assistance of the draftsmen in finding words to meet the purpose of the Amendment which was down in the names of myself and some of my hon. Friends. As the House will be aware, my hon. Friend the Member for Widnes (Mr. MacColl), speaking on the last Amendment, just got to the interesting point of discussing the Ridley Report when it was deemed better that we should make it to more purpose on this Amendment. I hope, therefore, that my hon. Friend will have the opportunity of catching your eye, Mr. Deputy-Speaker, so that he may continue the discussion.
Mr. MacColl: I am grateful to the Minister for one thing. Those of my hon. Friends who have sometimes wondered whether or not I was an asset on this side of the House, will now realise what an asset I am. It would appear that a speech from me led the right hon. Gentleman to accept an Amendment for once in a way from this side of the House, which is a very unusual thing for him to do. However, as he has accepted it, I think it would be unbecoming of me to refresh the House with an account of what the Ridley Committee had to say about the matter, and how, in the original form, its recommendation had been disregarded.
As my hon. Friend said, there were originally two Amendments, one of which I drafted. It occupied four lines on the Order Paper, whereas we now have an Amendment which is more satisfactory and which occupies eight lines. I realise now that it is an unpardonable thing to try to impose something short and the more ample language of the Parliamentary draftsmen is more satisfactory.
The right hon. Gentleman said that this did not amount to anything. Of course, we do not know what the right hon. Gentleman has got up his sleeve for next Session. He talked in a big way about the reform of local government. Perhaps

2477
it would be inappropriate to ask what his intentions are, but we should be very grateful, nevertheless, if he would tell us.
There is another point. Under the new valuation proposal, it is quite possible that some types of property might have a fall in rates, although the general amount collected in rates did not fall. Adjustments of rates from one property to another might make the fall quite substantial, and, therefore, in justice we feel that we ought to press this matter in our Amendment.
Amendment to the Lords Amendment agreed to.

Clause 45.—(SERVICE BY POST.)
Lords Amendment: In page 36, line 28, at end, insert:
(2) So much of subsection (5) of section seven of the Act of 1938 as enables documents to be served on agents or persons receiving rent shall apply for the purposes of this Part of this Act as if references therein to the principal Acts included references to this Part of this Act.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment.
This Amendment is little more than a drafting Amendment. It puts right what was originally in the Bill as drafted, and allows a certificate to be served upon the landlord's agent.

Clause 46.—(PROCEDURE OF TRIBUNAL)
Lords Amendment: In page 36, line 29, at beginning, insert:
(1) Subsection (1) of section seventeen of the Act of 1920 (which empowers the Lord Chancellor to make rules and give directions for the purpose of giving effect to that Act) shall apply in relation to this Part of this Act as it applies in relation to that Act.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment.
This is a point of some importance, and I think the House will feel that it helps us in the problem. It is a machinery provision to enable rules as to county court procedure under Part II of the Bill to be made by the Lord Chancellor under Section 17 (1) of the Rent Act, 1920. Without this provision, the ordinary county court procedure might be thought to apply. It was thought desirable to
2478
make the special procedure applicable to rent restriction matters provided for in the rules made by the Lord Chancellor. It has the effect of making the procedure simpler and cheaper. Applications are heard by the registrar in an informal atmosphere and the parties usually appear in person without being represented by either a solicitor or counsel. Either party can require applications to be referred by the registrar to the county court judge, but broadly speaking they are dealt with in a simpler way. We want to give power to the Lord Chancellor to provide the same procedure, which is less expensive and better for those cases.
Mr. Donald Wade: May I ask whether these rules will have any effect on the timing of these proceedings, as compared with ordinary procedure in the county court? Earlier this evening we referred to the possibility of delay on the part of a landlord, but delays may be due not only to dilatoriness on the part of landlords but to an abundance of work falling upon the county court. Is any special provision to be made to deal with this new and possibly considerable work? Will there be anything in the rules which will enable this type of litigation—if it is to be called litigation—to be dealt with more speedily than some which, unfortunately, takes a considerable time in the county court.
Mr. H. Macmillan: I will, of course, bring to my noble Friend's attention what my hon Friend has said.
Mrs. E. M. Braddock: I am not an expert on county court rules, registrars or anything else, but I should like to ask one question. Will this allow the registrar of the county court to say that costs can be given to the tenant against the local authority if the tenant loses the case on the evidence submitted by the sanitary officer of the local authority? It is a very important point indeed. The tenant would not take action in the county court at all, nor would the landlord take action against the tenant, were it not for the certificate issued by the sanitary officer of the local authority. Under such circumstances, would it be possible for the tenant to claim from the local authority the costs which would otherwise be levied upon him because of the certificate of repair issued by the local authority?
Mr. Blenkinsop: I hope that the Minister may be able to clear up the point raised by my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock). I hope too that he may be able to take this opportunity to give some assurance that he is in touch with the Attorney-General with regard to the whole question of making legal aid available in the county court and that this mater is at least under active consideration. He will appreciate that the whole value of these proceedings and of the slight modification made in this proposed Amendment—to which we do not object—depends very largely indeed upon whether or not the tenant concerned can have the benefit of the legal aid scheme which everyone understood was to be made available to them at a later stage.
Mr. Sparks: Will the right hon. Gentleman explain what precise advantage this proposal will have for the tenant? The tenant is obviously concerned with the decisions, either of the registrar or of the court itself, to disallow a certificate of disrepair. Is there any advantage in the suggestion which the Minister makes in relation to the liability of the tenant for costs in the event of a certificate of disrepair being disallowed? Or is he now telling us that, instead of this matter being referred to the court and incurring all the legal consequences and costs involved, it may now be settled by reference to the registrar? If it can be settled by a reference to the registrar, could the right hon. Gentleman tell us what the effect of that would be on both the landlord and the tenant on the question of costs? If costs are to be just the same there is no advantage in this proposition, but if they are to be very much lower or non-existent there will be an advantage.
Mr. H. Macmillan: With the leave of the House, perhaps I may speak yet again. I am sure hon. Members opposite would not feel that this was an appropriate occasion to make a declaration of the intentions of the Government; nor would it be in order. In answer to the hon. Member for Liverpool, Exchange (Mrs. Braddock) and other hon. Members, I can say that the Amendment does not alter the rights, duties and functions of the court. All it does is to apply a procedure which the Lord Chancellor
2480
has applied since 1920 in rent restriction cases. If the Amendment had not been put down he would not have been able to make provisions similar to those which have worked successfully for 30 years. The object is to provide for a simpler and cheaper procedure in the first instance. The Amendment gives him powers to make regulations on similar lines in cases similar to those in which the procedure to which I have referred has been applied successfully for many years. I shall take account of all the other points which have been raised and note them as important contributions.

Clause 47.—(INTERPRETATION OF PART II.)
Lords Amendment agreed to: In page 36, line 41, at end, insert:
"'Act of 1938' means the Increase of Rent and Mortgage Interest (Restrictions) Act. 1938;"

Second Schedule.—(PROOF OF PAST REPAIRS BY LANDLORD.)
Lords Amendment agreed to: In page 42, line 5, leave out "in the prescribed form".
Lords Amendment: In page 42, line 6, leave out "the period of twelve" and insert:
"such period of twelve months as may be specified in the declaration being a period falling within the fourteen".
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
The object of the Amendment is to secure that the landlord will not be prejudiced in complying with the expenditure test if there is a delay—unreasonable or not—in reaching agreement with the tenant on any matter which is provided for in the Bill, such as agreeing about the proportion of responsibility for repairs as divided between landlord and tenant, or the proportion of the rent representing the cost of the provision of services.
The House will remember that the period of 12 months during which the necessary work must have been carried out is a period ending with the date of service of the notice of increase, and it is thought that if the service of such notice were to be delayed because of discussions, the work which was carried out during the two months before the period of 12 months began to run would be excluded,

2481
although it might represent a very large part of the necessary work. In those circumstances, I hope that the House will agree to give the landlord the greater latitude of 14 months in which to carry out work which will count in his claim for an increase of rent.
Mr. Blenkinsop: This is another example of latitude being given to the landlord, although we do not get a friendly reception when we propose measures to look after the tenant. We regard this proposal as being very similar to the one contained in an Amendment discussed and, unhappily, passed during the Committee stage, whereby a landlord was given permission to choose any three out of four years in computing the amount he had spent in repair. It was decided by the Committee that the landlord should be able to choose any three out of four years. That was naturally to his advantage, because he would choose the three years during which he had incurred the greatest expenditure. Here again, another minor change is made to benefit the landlord, and to ensure that he can make eligible for inclusion the greatest amount of expenditure that can possibly be squeezed into this period of 12 months. He is again able to choose for himself the period.
This is just a further instance of the way in which the party opposite has been doing its best all through our consideration of this Measure to look after the interests of the landlords. I confess that it did not satisfy another place. It was made perfectly clear that it was thought that many landlords would not regard this as sufficient. Nevertheless, the Minister is certainly doing his best, under pressure of the representations that, we understand, he has been having ever since the Bill was presented, to look after the landlords' interests, and from our point of view on this side of the House this is another illustration of the attitude of the party opposite.
10.0 p.m.
Mr. Gibson: The reason given by the Minister in justification of this Lords Amendment was quite unconvincing. He said that it was to prevent a landlord's right from being prejudiced because of argument that might arise, but there is plenty of protection for landlords in the Bill, and plenty of provision to enable necessary arrangements to be made for rent increases if they carry out the terms
2482
of the Bill. This Lords Amendment will apply to every landlord, not merely to landlords who have got themselves into arguments with their tenants. This is another of the efforts to nibble away the protection of the rights of tenants of ordinary working-class property. It is typical of the type of thing our people ought to have expected when they put this Government into office. I have been unable to persuade anyone that we ought to divide against this Lords Amendment, but I am glad that we are not letting it go without protest.
Mr. Albert Evans: When the Bill first came before the House the Minister strongly emphasised that he was putting into the Bill two safeguards for tenants. This concession to the landlords is a definite weakening of one of the very safeguards the right hon. Gentleman trumpeted so much about when he first explained the Bill to the House. His intentions were apparently good: he was trying, he said, to hold the balance between landlord and tenant, and he was giving two safeguards to tenants. Now, through another place, he is taking away a considerable part of one of the safeguards. I am surprised that a Minister of the Crown should adopt this back-door method of using another place to negative his earlier expression of good faith, and his declaration that he was trying to hold the balance between landlords and tenants.
Lords Amendment: In page 42, line 7, leave out "containing," and insert "accompanying."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Lords Amendment is consequential on the long series of Amendments.
Lords Amendment: In page 42, line 13, leave out "notice of increase may in lieu of" and insert:
"declaration required by the said paragraph (b) to accompany a notice of increase may, in lieu of being."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is another in the same series of Lords Amendments we have agreed to.
Further Lords Amendments agreed to: In page 42, line 14, leave out "contain" and insert "be."
In line 15, leave out "in the prescribed form."
In page 43, line 2, leave out "of a notice of increase containing" and insert "with a notice of increase of."
Lords Amendment: In page 43, line 10, at end, insert:
6. If in such a declaration any person makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular he shall be liable on summary conviction to a fine not exceeding thirty pounds.
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is an Amendment of importance. I gave an assurance, at the end of the Report stage, that we would meet a point raised by hon. and right hon. Gentlemen opposite, and this Amendment has been put in the Bill in another place to meet it. It is designed to provide a further safeguard for the tenant by making it a summary offence if the landlord knowingly or recklessly makes a statement in his declaration that work of the required value has been carried out; and it follows the appropriate form for giving that strengthening safeguard to ensure that declarations are made both truthfully and with a sense of responsibility.
Mr. de Freitas: The right hon. Gentleman did give that assurance at the end of the Report stage, and the Lord Chancellor moved this Amendment in another place. There are so few safeguards for the tenant. This is some safeguard—small, but we clutch it.
Mr. Sparks: For what reason did the Minister advise the figure of £30? Why should it not be £50, or £100 or more—or less? How has he arrived at that figure? He has not said.

Fifth Schedule.—(REPEALS.)
Lord Amendment: In page 46, line 37, column 3, at end, insert:
"in section three, in subsection (2), the words from 'or where such' to 'one clear week'."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is consequential on an earlier Amendment.
Lords Amendment: In page 47, line 59, column 3, at end insert:
In section twenty-three, in paragraph (d) of subsection (1) the words "in all respects."
Mr. H. Macmillan: I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment to pick up a point which was made in Committee.

NON-INDIGENOUS RABBITS (IMPORT PROHIBITION)
10.8 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. G. R. H. Nugent): I beg to move.
That the Non-Indigenous Rabbits (Prohibition of Importation and Keeping) Order, 1954, dated 10th June, 1954, a copy of which was laid before this House on 15th June, be approved."
This order is made under the Destructive Imported Animals Act, 1932. The effect of it is to implement one of the more important recommendations made by the Myxomatosis Advisory Committee to the effect that non-indigenous rabbits should not be imported, and that powers should be taken to prevent their importation. At the present time myxomatosis is spreading rapidly among the rabbits in this country. Large numbers are being destroyed, and it would obviously be in every way detrimental if there could now be imported non-indigenous rabbits which were immune to this particular virus, so setting up a new rabbit population to take the place of those that are dying out. It is for that reason that I am now moving this Order, and I ask the House to give it their approval.
10.9 p.m.
Mr. A. J. Champion: We support the Order which is a very sensible provision to prevent what might happen if certain commercial interests think it desirable in their own interests to import a species of rabbit that would be immune from the disease which we rather hope will wipe out all or most of our rabbit population.

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One question which occurs to me in this regard is this: if myxomatosis completely wipes out our rabbit population, and by means of this Order we are prevented from getting any imported rabbits at all, from whence will the Prime Minister get future Ministers to replace some of those who look like going shortly?

AIRLINE PILOTS (SERVICE CONDITIONS)
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Studholme.]
10.10 p.m.
Mr. Harold Davies: After the interesting discussions on rents and rabbits, I think that this is an appropriate moment to deal with a vital issue which this House does not often get the chance of touching. I refer to the problem of the service conditions of our airline pilots of the British airways corporations.
I should like to point out that I am not raising this matter from a party political point of view. This is a vital issue concerning Britain's economic prosperity and Britain's place in the flying world. There is, undoubtedly, a problem before us with regard to the service conditions of our B.O.A.C. pilots and possibly those employed on private lines. I think that it would be appropriate, in the 15 minutes for which I shall be speaking, first to pay tribute to these pilots who fly passengers all over the world.
We have in Britain pilots who have to get the highest possible navigational certificates in the world, and whose sense of responsibility and record of millions of miles of flying without major accidents is second to none. Too often this House, when debating the Civil Aviation Estimates and other Estimates, forgets that we may not be giving the best possible conditions to our pilots and, therefore, not getting the best type of recruitment.
On 17th March, 1954, the National Joint Council for Civil Air Transport, the employers' side of the Pilot Officers' Panel, and the employees' side of the Panel discussed the issue of wage increases. We are told in this House that this is a matter of nationalised corporations. I hope that we shall find some
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formula by means of which we can put down vital Questions about conditions in some of our nationalised industries. Difference existed for a long time between both sides, and eventually, an award was given to 1,241 pilot officers employed by the airways corporations. They received an award of some 8 per cent.
Claims had been put forward in June, 1947, December, 1950, and July, 1953, and another claim was put forward which was considered last March. In the trade union world we often deprecate long-drawn-out, squalid negotiations—as, for instance, on the conditions of Members of the House of Commons. In July, this claim was put forward, and the result of the claim was an increase of 8 per cent. I do not want to bore the House by giving the details of the pay rates of second officers, first officers, junior captains, senior captains and senior captains, first class. I will pick out one or two examples.
The claim would have meant that there would have been a minimum pay to the second officer of £1,220 a year, and minimum pay to the senior captain, first class—a very responsible highly-qualified individual—of £3,225. The award last March gave, instead of these claims, £995 for second officer and £2,395—I am talking of minima, not maxima—to a senior captain, first class.
To some people that may seem a remuneration commensurate with the job, but those of us who know anything about it or have had the privilege of flying behind "the man up front" many thousands of miles in various parts of the world, know that the payment is not commensurate with the responsibilities now needed by a civil aviation pilot. The emphasis of this debate, therefore, is on conditions and recruitment of men for the civil airline services.
Is the Minister satisfied that the supply of pilots for civil aviation is assured? Does he think that present pay and conditions are such as will encourage the very best type of recruit to this most important profession? Transport is civilisation, and in this modern shrinking world we want dependability, safety and rapidity of movement. We take the lead in aircraft design and in the type of man who flies those 'planes, but today he is not getting the encouragement that he should get.

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Therefore, on the question of recruitment, I draw the Minister's attention to the memorandum on the supply of pilots for civil aviation which was prepared by the Air League of the British Empire, Airwork, B.E.A., B.O.A.C., the British Airline Pilots' Association and others. There is not the slightest doubt that there is an inadequacy of supply.
For several years civil operators have felt an increased anxiety concerning the future supply of commercial air pilots. As long ago as 1947, the Wilcock Committee on Recruitment, Training and Licensing of Personnel for Civil Aviation was set up. Events have proved that it is inadvisable for civil aviation to look exclusively to the Royal Air Force for its supply of pilots. That source of supply may have been adequate for civil aviation in its early days, but the Royal Air Force supply of pilots is now no longer satisfactory as the sole, or even the main, source of recruits to civil aviation.
After the last war, the Government then in power decided to train a large number of National Service men to be pilots. This policy has ceased and National Service men are no longer trained as pilots. Furthermore, during the last few months the situation has been aggravated because the discontinuation of the training of National Service men means that we cannot draw in on our wider pool of capable men. There is an interesting analogy. Because there is a certain snobbish bar about certain types of sport in Britain, like tennis and golf, we find that Britain is not able to draw on its resources. I believe that it is necessary to establish a scheme, and a subsidised scheme, to train men for the civil air services.
The modern civil pilot must be of a sufficiently high academic and intellectual standard to pass severe examinations. He must secure professional qualifications. He must get advanced licences, and during his progress up to, and even beyond, the rank of senior captain, he is required to have medical tests every six months. He must pass flight tests every six months. Because of the technical requirements of the profession, the pilot is becoming even more specialised. A man cannot move from one aeroplane to another—from a
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Viscount to a Comet or from an Elizabethan to another type—as a man can move from one motor car to another, and we are making of the pilot a highly trained, specialised individual.
One of the snags is that if at the six-monthly medical examination the pilot does not pass the doctor, a highly skilled and specialised man is suddenly cut 'ff from his livelihood. Are these things taken into consideration sufficiently in the consideration of pay and conditions of the men who fly our civil airline services?
I believe that a democratic system of flying training could be developed and that the Government—the Ministry of Transport and Civil Aviation, together with the Ministry of Education—should work out a policy by which young boys between 16 and 18 years would be trained for flying these wonderful British planes which British designers put on the commercial airlines.
It would involve some expenditure. The son of an ordinary family cannot afford to be trained, for it costs too much. It costs £3 an hour to fly a single-engined plane and £15 an hour for a twin-engined plane. If, in training, a man wants to do 80 to 250 hours' flying, a colossal sum of money is involved—a sum which many people could not find for their sons. Why should we not be training these boys who want to go into this service?
There is an annual wastage of at least 5 per cent. among our civil pilots. This means that every year between 70 and 120 new pilots are wanted, which means that every year 400 young men should be trained for civil aviation. They should not be called up for National Service. To call them up would be penny wise and pound foolish, because it is no good suggesting that we should train them in National Service in the R.A.F. That is a completely different type of training.
Unfortunately, in this mad world in which we live, the R.A.F. need to train men in bomb-sighting. The type of training is different from that involved in the responsibility of a man taking an aeroplane worth nearly £1 million from one end of the earth to the other with people aboard. He must have a different type of training from that given to the brave boy who flies the R.A.F. aircraft of war—yet the civil aviation pilot will be there, when the hour comes, if the country needs him. Why put him into National Service

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in the interim? I hope some kind of scheme of training will be worked out.
As I said at the beginning of the debate, since 1947 there have been two alterations in the salary structure for pilots and yet a senior captain, with eight years' seniority, is £37 10s. worse off because of the changes in the pension scheme. This is ridiculous. It is time that Parliament and the public realised the importance of the British pilot in our commercial and industrial life.
The speed of change and improvement in aircraft has been higher since 1947 than in the previous 27 years. The Chancellor of the Exchequer is asking for productivity, and we have had no greater productivity than in the R.A.F. Let me give an example. The heaviest aircraft we were flying in 1947 was the York, weighing 66,500 1b., seating capacity 21, speed 200 miles per hour. In 1951 we were flying the Stratocruiser, weight 145,800 1b., capacity 70 people, speed over 300 miles per hour; and yet the size of the crew had been reduced while the responsibility of the captain had been increased.
In 1951 the Viking did 4,896 passenger miles per hour. The Viscount gives 14,194 passenger miles per hour and the Elizabethan 12,397 passenger miles per hour. There we see productivity as in no other branch of industry. The result has been that more passengers are being carried faster and more revenue is being taken by the corporations. In 1947 the route mileage of British airlines was 39,957,000 miles. In 1952–53 the mileage was 58,542,000, with less crew and greater responsibility than ever before.
The pilot has a medical examination every six months. He may be found to be suffering from a disease which he has contracted in the tropics. He has to eat many of his meals while in the air and he does an increasing amount of night flying. The more instruments he must carry, the more technical must be his training. He receives no payment for overtime and he is always on call. He spends a great deal of time out of the country but no recognition of this is made by the Inland Revenue in regard to his Income Tax.
British planes carry British mail cheaper than any other airline. If the mail were carried by foreign planes or by an American airline, the full rate
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would have to be paid. Why should not the British corporations get the full rate for mail? When British 'planes carry troops from Britain to Suez, the corporations are paid £23 per head. The shipping companies get £30. If those figures are correct, that is not right.
I think it time that this matter of a tax concession for pilots was considered. In the Royal Air Force officers receive a bounty of £3,000 after 12 years' service. I think that something similar should be given to the senior captains of B.O.A.C. and the other corporations who, at the age of 50, have finished their responsible flying life.
Recruitment is difficult, because training is so costly. Why should not the Government introduce a subsidised training scheme for airline pilots who must be 100 per cent, efficient? A pilot who makes an error does not get another chance. He must not make a mistake. I thought therefore that this was the right moment to rise this problem which will confront the Ministry of Transport and Civil Aviation and the corporations more and more as our efficiency in the air increases.
10.28 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Profumo): I wish to apologise to the hon. Member for Leek (Mr. Harold Davies) for having missed the opening sentences of his speech. I can assure him that it was not discourtesy on my part. It took me rather longer to get up the stairs than it did for the hon. Member to start off on his jet-propelled speech. But he was good enough to supply me in advance with, information about some of the matters he proposed to raise, which was of value because I wished to answer them to the best of my ability.
I am grateful to the hon. Member for having raised this important subject, and I have listened with interest to the lucid way in which he presented the problem. I readily recognise that his intention in ventilating this matter arises solely from his interest in the human aspects of those who work in the sphere of civil air transport.
I think that the arguments of the hon. Member may be divided into two parts.

2491
First, there is the remuneration which civil air transport pilots receive, and secondly the recruitment of an adequate number of new pilots to meet the requirements of this ever-expanding industry. I certainly cannot accept the suggestion that British civil air pilots are working under unsatisfactory terms and conditions of service, that is, if their terms and conditions of service were a matter of determination by Her Majesty's Government, which, of course, as I have already said, is not the case.
Mr. Harold Davies: The Minister knows as well as I do that an American pilot in the same seniority as a British pilot has 114 per cent, more pay than a British captain of the same rank, and yet that British captain has had to pass the most difficult flying navigational test in the world today.
Mr. Profumo: I readily recognise that, and I wish to be as generous as may be to the standards and achievements of the British air pilots. It is difficult trying to compare the pay of a British and American pilot.
Mr. Harold Davies: I agree.
Mr. Profumo: The same argument might be applied to Service men. We must remember the standard of living and other considerations which go to make up the terms and conditions of people in any trade or industry.
The terms and conditions on which pilots are employed by the corporations and the independent companies are a matter for negotiation between the trade unions representing them, the British Air Line Pilots' Association, and the employers. These pilots are in no way Government employees, and the process of settling their terms and conditions is not one in which the Government have any standing. Section 20 of the Air Corporations Act, 1949, imposes on the corporations the duty of setting up joint machinery for the settlement by negotiation of terms and conditions of employment of persons employed by the corporation, with the provision for reference to arbitration in default of such settlement in such cases as may be determined by or under such agreements.
Both corporations have fulfilled the responsibility laid upon them by Section 20
2492
of the Act by establishing, in collaboration with appropriate trade unions, the National Joint Council for Civil Air Transport, on which the British Air Line Pilots' Association is represented, and of which there is a special panel to discuss and negotiate the terms and conditions of employment of pilots.
The terms and conditions of employment by independent companies are governed by Section 15 of the Civil Aviation Act, 1949. This Section does not require the companies to participate in the National Joint Council for the industry, but they are, in fact, full members of the employers' side of that council, so that the same body is the forum for negotiations on the terms and conditions of employment of both the corporations and independent company pilots. I thought the hon. Member would like to know that.
The constitution of the National Joint Council for Civil Air Transport provides that its object shall be to secure the development of the largest possible measure of joint action between the employers and the employees with a view generally to the maintenance of good conditions in civil air transport. I think the hon. Member will already recognise that the council has so far had a very large measure of success in attaining its objective.
Moreover, it has provided in its constitution a procedure for the settling of differences on terms and conditions of employment which makes provision for the reference of disputes which cannot be settled within the industry to the industrial court, whose decision is final and binding on the parties if they differ. The British Air Line Pilots' Association recently made use of this procedure by taking a claim for an increase in the salaries of pilots employed by the corporations to the industrial court. As the hon. Member has pointed out, the court awarded that a certain increase in salary should be made and the two corporations have, in fact, already put the court's award into effect. Thus full use has been made of the established machinery for settling corporation pilots' salaries, and I must emphasise again that the Government have no standing in the matter.
The question of recruitment of pilots is receiving Government attention. The Wilcock Committee, which examined re

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cruitment, training and licensing of personnel for civil aviation in 1947, recommended that from the point of view of the national economy the fullest use should be made of ex-R.A.F. pilots. In addition, it recommended the adoption of a scheme of scholarships for training direct entry pilots to civil aviation because of an estimated shortfall of pilots from the Royal Air Force source from 1951 onwards, but events have shown that the figures on which the conclusions were based were over-estimated.
The policy of Her Majesty's Government continues for the present to be that ex-Service pilots provide a source of trained pilots for civil aviation. The effect of the change of policy in Royal Air Force pilot training is at present under examination with the Air Ministry with a view to ascertaining the extent to which pilots from the Services will meet the future needs of civil aviation. If the results of the examination with the Air Ministry show the need for an auxiliary scheme, the recent proposals made by the Air League of the British Empire will receive most careful and sympathetic attention from my Department.
However, the Government cannot commit themselves—I want to make this plain—in advance to accepting any scheme which involves a measure of Government subsidy. This would have to be most carefully examined in relation to the Government's policy in other comparable fields.
I ought here to utter a warning, that one of the difficult problems would be the question of the exemption of young men in this field from their ordinary National Service.
Lastly, the hon. Member asked certain specific questions. The difference between sea trooping and air trooping rates to the Canal Zone which he raised has, I assure him, no effect on the pay of pilots. The Government must endeavour to move troops by the most economic means, taking account of strategic and personnel considerations, and the fact that the Government pay less for air trooping per passenger to the Canal Zone than by sea trooping means only that the former is more economic as a means of transport on that route. As the hon. Member no doubt knows, air trooping contracts are awarded on the basis of competitive tendering, and I am sure that he will
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agree that no Government of any complexion would desire to pay a contractor more than he asks, particularly as they would be using taxpayers' money in doing so.
With regard to rewards on retirement of pilots, it is true that commissioned pilots in the Royal Air Force who have served on a 12-year basis receive on retirement a gratuity of £3,000, but it should be remembered that, just as Regular R.A.F. officers have pension arrangements which do not apply to those under the 12-year arrangement, so the corporations have a pension scheme which makes provision for early retirement. Under this scheme pilots may, with the consent of the corporations, and having completed 10 years' service, retire as early as 40 and draw an immediate pension. In addition, the scheme provides for accident and death benefits and premature withdrawal from service. I believe that the pension arrangements which exist are a substantial attraction to service with the corporations.
The hon. Member suggested that as pilots live abroad so much of their time they should be given some measure of tax concession. I am afraid that I am not able to answer him entirely on that matter, but I would point out that pilots do not have to bear overseas living costs out of their basic pay. Apart from amenities in kind, including meals and accommodation, they receive daily overseas allowances. In the case of the corporations, these allowances have been fixed at 19s. 6d. a day for captains and 15s. a day for first and second officers while flying on services to countries outside Europe.
Mr. Harold Davies: I know that, but the hon. Member has been to New York and he will know how far 19s. 6d. a day will go in New York, Sydney and other places, with laundry and everything else to be taken into account.
Mr. Profumo: I agree that, unfortunately, the situation is not as good as it used to be in the old days, for the £ does not go as far as it used to. However, under the present Government the £ is now very much stronger. We are dealing with all the points which the hon. Member has in mind, but I note the comment which he has made.
The hon. Member mentioned the payment to B.O.A.C. for carrying mail, but

2495
I think that he is under a misapprehension there. Foreign airlines do not receive a higher rate for carrying G.P.O. mails than does the B.O.A.C. I will gladly clear that matter up for the hon. Gentleman by correspondence with him if he desires more detail. There is not time to do so now.
However, I hope I have said enough to assure him of various things, first that we are most conscious of the services that these airline pilots give to the country, and of the tremendous importance and
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responsibility that rests on their shoulders; also that the Government are not directly concerned, and cannot, of course, be directly concerned, with the pay and conditions of airline pilots—
The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standby Order.
Adjourned at Twenty Minutes to Eleven o'Clock.

  KING AND QUEEN OF SWEDEN (LONDON VISIT)
  KING AND QUEEN OF SWEDEN (LONDON VISIT)
  MARRIAGE CEREMONIES (REGISTRARS)
  MARRIAGE CEREMONIES (REGISTRARS)
MINISTRY OF HEALTH
  Welfare Foods
  Welfare Foods
  Part-time Specialists (Domiciliary Visits)
  Part-time Specialists (Domiciliary Visits)
  Dental Patients
  Dental Patients
  Mayday Hospital (Observation Unit)
  Mayday Hospital (Observation Unit)
  Unstaffed Beds, Bristol
  Unstaffed Beds, Bristol
  Ashton-under-Lyne General Hospital
  Ashton-under-Lyne General Hospital
  ANGLO-AMERICAN TALKS (WASHINGTON DECLARATION)
  ANGLO-AMERICAN TALKS (WASHINGTON DECLARATION)
EDUCATION
  Technical Education Facilities, Newcastle-under-Lyme
  Technical Education Facilities, Newcastle-under-Lyme
  Outward-Bound Schools (Financial Aid)
  Outward-Bound Schools (Financial Aid)
  Spastics (Schools, West Riding)
  Spastics (Schools, West Riding)
  G.C.E. (Report)
  G.C.E. (Report)
  Building Programme (Finance)
  Building Programme (Finance)
  Technical Teachers (Pay)
  Technical Teachers (Pay)
  Training College Students (Grants Inquiry)
  Training College Students (Grants Inquiry)
  School Meals (Charges)
  School Meals (Charges)
  ENGLAND AND WALES
  ENGLAND AND WALES
  Technical College Fees (Regulations)
  Technical College Fees (Regulations)
  Playing Fields, Southern Counties
  Playing Fields, Southern Counties
TRADE AND COMMERCE
  German Coin-Operated Amusement Machines
  German Coin-Operated Amusement Machines
  Trade Commissioners, Canada
  Trade Commissioners, Canada
  United States Oils and Fats
  United States Oils and Fats
  Caviare
  Caviare
  SAVOY HOTEL LIMITED (INQUIRY)
  SAVOY HOTEL LIMITED (INQUIRY)
  CIVIL SERVANTS (DISMISSALS)
  CIVIL SERVANTS (DISMISSALS)
AGRICULTURE
  Dispossession and Supervision
  Dispossession and Supervision
  Mechanical Equipment (Annual Investment)
  Mechanical Equipment (Annual Investment)
  Sugar-Beet Factory (Southern England)
  Sugar-Beet Factory (Southern England)
  Land Ownership and Management
  Land Ownership and Management
  Crichel Down
  Crichel Down
  Myxomatosis
  Myxomatosis
  Horticulture (Marketing Plan)
  Horticulture (Marketing Plan)
  Holdings (Electricity Supply)
  Holdings (Electricity Supply)
  Fatstock Marketing Scheme
  Fatstock Marketing Scheme
  Requisitioned Land
  Requisitioned Land
  HOME-GROWN TIMBER (ADVISORY COMMITTEE)
  HOME-GROWN TIMBER (ADVISORY COMMITTEE)
  CORACLE FISHING, RIVER TEIFI
  CORACLE FISHING, RIVER TEIFI
  PUBLIC CONVENIENCES (WASHING FACILITIES)
  PUBLIC CONVENIENCES (WASHING FACILITIES)
  ATMOSPHERIC POLLUTION
  ATMOSPHERIC POLLUTION
  MINISTRY OF WORKS (THAMES SITES)
  MINISTRY OF WORKS (THAMES SITES)
  MALAYAN CONSTITUTIONAL CHANGES (AGREEMENT)
  MALAYAN CONSTITUTIONAL CHANGES (AGREEMENT)
  NIGERIA (PUBLIC MEETINGS)
  NIGERIA (PUBLIC MEETINGS)
  CANNED FRUITS (HOME DEMAND)
  CANNED FRUITS (HOME DEMAND)
  EMPLOYMENT, WEMBLEY
  EMPLOYMENT, WEMBLEY
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
The Viscount Simon—Sat first in Parliament after the death of his father
Prayers
  BEIT TRUST BILL [H.L.]
  Read 3a, and passed, and sent to the Commons.

CONSTITUTIONAL DEVELOPMENTS IN MALAYA
2.36 p.m.
LORD OGMORE: My Lords, I beg to ask Her Majesty's Government a Question of which I have given them private notice. The Question is, whether they have any statement to make on developments in the present constitutional position in Malaya, as reported in the Press this morning.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF MUNSTER): My Lords, I am glad to be able to announce that after the High Commissioner had explained the course he intends to pursue when he appoints the nominated reserve members, to whom reference is made in paragraph 31 of the Election Committee Report, the leaders of the Alliance have stated that they are prepared to co-operate with, and participate in, the Government at all levels as before. I will, with the permission of the House, circulate in the OFFICIAL REPORT the text of the letters exchanged between the High Commissioner and Tunku Abdul Rahman on behalf of the Alliance, in which this agreement was reached. Briefly, it is the intention of the High Commissioner to consult the leaders of the majority Party or Parties among the elected members before making appointments to the five reserved seats.
I should like to thank the noble Lord for his courtesy in having acceded to my request to postpone his earlier Question on this matter, in order not to prejudice
528
the success of the discussions in Malaya which were then nearing their conclusion.
LORD OGMORE: My Lords, I should like to congratulate all concerned in bringing about this most satisfactory result, and, in particular, Her Majesty's Government, the High Commissioner and the leaders of the Alliance. I am sure that the noble Earl, Lord Munster, will agree that Her Majesty's Opposition in both Houses have also worked untiringly with the same purpose in view.
THE EARL OF MUNSTER: Yes, my Lords; I concur heartily with the words the noble Lord has just spoken.
THE EARL OF LISTOWEL: My Lords, I should like to ask the noble Earl whether what he has said does not mean that the discussions in Malaya about the appointment of a Committee of Inquiry into the Constitution of the Federal Legislature will be discontinued.
THE EARL OF MUNSTER: My Lords, if the noble Earl will await the publication of the letters in the OFFICIAL REPORT, he will see that that is a matter which is coming up for discussion between the High Commissioner and their Highnesses, I think on the 15th of this month.
THE EARL OF LISTOWEL: I thank the noble Earl.
Following is the text of the letters exchanged between the High Commissioner of the Federation of Malaya and Tunku Abdul Rahman:
A. Text of letter from the High Commissioner of the Federation of Malaya to Tunku Abdul Rahman, dated 6th July, 1954
"As a result of my recent discussions with you, Colonel H. S. Lee and Dr. Ismail, I am writing to clarify the coursed I intend to pursue when appointing 'nominated reserve' members, to whom reference is made in paragraph 31 of the Election Committee Report.
These members are not to be appointed by me until the election is completed and the appointments are to be made in the light of the result of that election. Apart from officials, whom all are agreed should fill two of these seats, the primary purpose of these members is to give a voice in the Council to any important element which had not found adequate representation in the Council through the electoral process. In giving effect to this purpose it would, I believe, be inappropriate for me to send these representatives into the Council to oppose the policy of the majority among the elected members; indeed this might

529
well be regarded as thwarting or frustrating the wishes of the electors as expressed at the polls and as being inconsistent with promotion of that harmony and close identity between the Legislature as a whole and the Executive, which the Election Committee unanimously indicated in paragraph 106 of their Report should be the constant aim of the High Commissioner. The purpose of these seats, as well as the basic intention of the Constitution, will, I believe, be more readily and appropriately achieved by filling these scats with representatives chosen for the purposes indicated in paragraph 31 of the Report, who are not likely to find themselves out of harmony with major political opinion in the Council as reflected among the elected members, and consequently less able to inform and guide that opinion effectively.
It is therefore my intention to consult the leaders of the majority party or parties among the elected members before making appointments to these seats.
I hope that with this statement of intention, you will find yourself able to co-operate in the establishment of the new constitutional arrangements arid to give your support to legislative measures which will give effect to the proposals contained in Federal Council Paper No. 21 of 1954."
B. Text of letter from Tunku Abdul Rahman to the High Commissioner of the Federation of Malaya also dated 6th July, 1954
"I have to thank you for your communication in regard to the course which you intend to pursue on the introduction of elections in appointing 'nominated reserve' members, which I have communicated to my colleagues.
In view of this statement we are satisfied that the proposed constitutional arrangements have a reasonable prospect of working satisfactorily and the Alliance is therefore prepared to extend its support to the establishment of these arrangements and to co-operate and participate with the Government at all levels as before. We therefore trust that for this purpose members of the Alliance will be reappointed to the various councils, boards and committees of which they were previously members. But in this connection you will appreciate our concern that all our members who have resigned should be afforded the same consideration in order to ensure co-operation at all levels.
We do, however, feel that there are other aspects of the Federation Agreement as it stands which merit further consideration and we understand that it will be Your Excellency's intention to discuss with Their Highnesses the Rulers on 15th July the request of the Alliance for a Commission to report on these matters."
C. Text of letter from the High Commissioner of the Federation of Malaya to Tunku Abdul Rahman, dated 7th July, 1954
"I have to thank you for your letter of 6th July on the subject of constitutional arrangements to provide for the introduction of elec-
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tions and am glad to receive your assurance that the Alliance will give its support to the establishment of these arrangements, together with an expression of its wish to co-operate and participate with the Government as before.
In the circumstances I hope that the status quo before the resignations will be restored as soon as possible so that the Alliance may be able to give this support and co-operation. But as resignations have extended to councils, boards and committees in the States, it will be necessary for me to consult Their Highnesses the Rulers in this regard and I intend to take the first opportunity of doing so."

CIVIL DEFENCE (ARMED FORCES) BILL [H.L.]
2.40 p.m.
Order of the Day for the Second Reading read.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD LLOYD): My Lords, this Bill takes the first step towards the development of a force of Civil Defence mobile columns for life-saving and fire-fighting purposes in war. I wish to male it clear at the out-set that it is no part of the Government's policy to maintain permanent whole-time Civil Defence mobile columns in peace. The reasons for this are simple; in the first place there would be no peace-time functions For them to fulfil, and in the second place they would not provide trained men on anything like the scale which the Government consider necessary, and which our own plans provide for.
Three things have to be achieved. First, the men selected for mobile column duties must be trained in peace to a reasonable standard of proficiency in the tasks which they would be required to perform in war, and for this purpose special fire-fighting and rescue training establishments must be set up. Secondly, these men must be allocated to operational formations. And thirdly, there must be power to mobilise them in those formations before the outbreak of war. The Bill accordingly provides the necessary powers for all these purposes. In considering this and all other Civil Defence matters, it is absolutely essential to remember the basic premise on which the policy of Her Majesty's Government—and, I may add, of the immediately preceding Governments—has been firmly

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founded. It is not a policy based on the presumption that war is going to break out to-morrow. On the contrary, it is a policy directed to the prevention of war and not to preparations for a war considered to be imminent or even inevitable. And, my Lords, the general emphasis of that policy is not in any way altered by recent accessions of knowledge about the development of the hydrogen bomb.
The practical implications of that development are, of course, momentous and can hardly be exaggerated. As the Home Secretary explained in another place earlier this week, all our Civil Defence plans are at present under review. But whatever may emerge from that review, one thing is quite certain—the advent of the hydrogen bomb makes it not less important but more important than ever to build up in peace time organised services trained in all the manifold tasks of life-saving, fire-fighting and welfare. The coming of the hydrogen bomb will undoubtedly make necessary widespread modifications in the detailed organisation and practice of these services; but the absolute value of the services themselves is, if possible, enhanced. That is especially true of the mobile columns. Their function is to supplement the front-line units of the Civil Defence Corps and the National Fire Service in their life-saving and their fire-fighting tasks, and it is important that they should be viewed against the background of those two services. Against that background their importance can hardly be over-emphasised.
Your Lordships may find it of value if I briefly trace the history of events leading up to the introduction of the Bill which is before you to-day. The development of Civil Defence, and in particular of Civil Defence services, has been an object of policy of successive Governments. It was the first post-war Labour Government which decided in 1947 to reconstitute the Civil Defence Service of the country, which introduced the Civil Defence Act, 1948, and which, furthermore, in pursuance of that Act, established and started the recruitment of the Civil Defence Corps and the Auxiliary Fire Service in November, 1949. It was also the last Government which took the preparatory steps for the
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development of a mobile column force. When the present Government took office in November, 1951, they found that the plans for an Experimental Mobile Column were well advanced, and that at the same time a study had been put in hand to find means of providing manpower for Civil Defence mobile columns in war, if possible in advance of an emergency. It was, of course, manifestly sensible that we should proceed with these projects.
The Experimental Mobile Column was accordingly established in January, 1953. Since then, experiments have been carried out on the organisation, training, equipment and operational employment of mobile rescue columns and their personnel. That experiment will finish at the end of this year. It has certainly been successful and has given us a valuable opportunity to reassess the rôle and organisation of the mobile column force. In continuing the consideration of arrangements for providing manpower for this force, the Government have examined various possible sources of supply. If the international climate were appreciably to worsen, and a shorter, sharper, pull were wanted, it might indeed be found necessary to draw on a wider field of recruitment for the needs of the force than is at present proposed. But, for the time being, the Government have decided that it should be possible to make a substantial contribution towards our mobile column manpower requirements by using men who are already within the scope of the National Service Act, 1948.
At the present time, the Royal Air Force, to meet its cold war requirements, has to take for whole-time service a considerably larger number of National servicemen than it would need to mobilise during the first year of war. A large number of the men who will not be needed immediately on the outbreak of war can—and, in the Government's view, should—be made available for Civil Defence training in peace, and for Civil Defence service in war until they are required for ordinary R.A.F. duties. It was with this in mind that, in the course of his comment on this year's Defence Statement, the Parliamentary Secretary to the Ministry of Defence recently announced in another place a proposal that selected National Servicemen should be given training in Civil Defence during their period of liability for part-time ser-

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vice as an alternative to their normal Service training. He said that in war they would be mobilised in Service formations under their own officers—but under the operational control of the Civil Defence authorities; and that in due course Parliament would be asked to approve the necessary enabling legislation.
That legislation is contained in the Bill now before your Lordships. Its object is to provide statutory authority for a scheme to enable those National Servicemen who can be made available during their last two years of part-time service to be called up for one fortnight's Civil Defence training in each of those two years. In that period the men will be given training in rescue or in fire-fighting duties at Civil Defence or Fire Service establishments, and by Civil Defence or Fire Service instructors. The Home Office and the Scottish Home Department will be responsible for arranging the provision of the depôts, and the Service Departments for directing the National Servicemen for training. In the event of war the men would be mobilised by the Service Departments and employed in Service formations, but—and I emphasise this—they would be under the operational control of the Civil Defence authorities and would be formed into mobile columns, which would be tactically sited near the most vulnerable target areas. The Fire Service element would be integrated with the National Fire Service; the Civil Defence element, having no comparable parent force would be provided with an appropriate command structure from national to single column level.
As to the numbers involved, on the best estimate which can at present be made, some 15,000 men will become available for training in each year of the scheme. Thus, in 1955–56, 15,000 men will be under training, and in each subsequent year (when two intakes will be available) approximately 30,000. Therefore, a simple sum will show that over six years of the operation of the scheme—assuming that it will be possible to maintain these numbers—there will be created a second echelon force approaching 100,000 men. It is proposed that the annual intake should be divided more or less equally between fire-fighting and rescue duties.
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For the training of these men we intend to provide initially for three establishments, which we hope to bring into operation in the spring of 1955. Two of these establishments will be devoted to rescue training, and one considerably larger depôt to preliminary fire-fighting training. In the following year, other depôts will be provided to deal with the additional intake, and at least one of these will be situated in Scotland. The depôts will be Home Department establishments, each under a civilian commandant and staffed with civilian instructors, but disciplinary control and internal R.A.F. administration of the men will remain with the R.A.F., who will provide for this purpose an officer in charge of the unit and other staff as necessary. Separate arrangements at other establishments will be made for training the officers and more senior N.C.Os. for the columns, since they will require a longer period of training than it is proposed to give under the main scheme.
In view of the preparatory measures which have to be completed and of the need to give the trainees adequate warning notice, the spring of 1955 is the earliest time at which the scheme can practicably be brought into operation. In addition to providing training centres it will be necessary to recruit a staff of about 250, including about 100 instructors, some of whom will have to be trained. It will in fact be necessary to take certain preparatory measures in advance of this Bill reaching the Statute Book.
The Government recognise that this scheme goes only part of the way towards providing a completely satisfactory mobile column force. It is possible, for example, that in the future, in certain circumstances, the Services might be able to contribute additional manpower. It is also possible that the national and international situation might, at some later stage, be deemed by the Government of the day to justify a call upon men outside the scope of the present Bill. In either of these ways this force might be expanded, but that is a matter which will have to be reviewed at a later date, in the light of the situation at the time and the extent and the success of the measures undertaken under this Bill. Equally, the Government recognise that the training of these men is only a begin-

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ning There are clearly many other problems which must be solved before a completely satisfactory mobile column force can be available. Apart from the training of N.C.Os. and officers, to which I have referred, there must be unit training for the personnel; suitable places for operational and mobilisation centres must be selected, and the layout and establishment of these centres must be settled. But though there is a lot still to be done, I submit that the Bill is not to be scorned on that account.
Moreover, the planning which lies ahead should be aided by the appointment of a Commander-in-Chief designate of the Civil Defence Mobile Forces. Noble Lords will have noted the statement which my right honourable friend made about this proposal in another place earlier this week, when he said that he was already in consultation with the Minister of Defence about the selection of an officer for this post. One of the Commander-in-Chief's functions will be to co-ordinate the plans for the employment of Civil Defence mobile columns to aid local Civil Defence forces in war-time, and he will collaborate with his opposite numbers in the Armed Forces to ensure that these plans are in harmony with military plans. In time of war he would be in operational control of all the columns, and he will clearly be intimately concerned with the development of the scheme to which this Bill relates.
Coming now to the actual terms of the Bill, your Lordships will see that in general it proceeds by an extension of the Civil Defence Act, 1948. Clause 1 (1) extends that Act to enable the designated Minister (in effect, the Home Secretary or the Secretary of State for Scotland) to make arrangements for giving Civil Defence training to part-time National Servicemen: and Clause 1 (4) enables him to pay for the cost of the arrangements. Clause 1 (1) also makes it clear that the training which a man may be required to undergo under the National Service Act, 1948, includes training provided in pursuance of the arrangements made by the designated Minister; and Clause 1 (2) extends the arrangements to other members of the Armed Forces in order to provide for the officers, noncommissioned officers and technicians who, although not themselves National
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Servicemen, will be needed for duty with the mobile columns.
Clause 1 (3) deals with the application of the Crown Proceedings Act, 1947, in respect of accidents occurring at the training establishments, and Clause 1 (5)—which has been inserted for the removal of doubt—declares Civil Defence to be a duty of the Armed Forces generally. It has normally been accepted that the potential duties of members of the Armed Forces do, in fact, include Civil Defence, but, since the taking elsewhere in the Bill of powers in connection with the Civil Defence training, of Servicemen might throw doubt upon this liability, it has been thought desirable to assert the liability specifically by a declaratory provision. Finally, Clause 1 (6) defines the expressions "Civil Defence" and "designated Minister" by reference to the Civil Defences Act, 1948.
I should add that, although only the R.A.F. has National Service reservists surplus to mobilisation requirements, and although the Royal Navy and the Army will make no contribution to the projected scheme, for the present at any rate, the Bill has been framed to apply to members of all three Services in order to cater for any possible changes in the position which may occur in the future.
My Lords, I feel that I should not conclude without a reference to the help we have already received from the Royal Air Force, who have co-operated to the full in the development of these proposals. It will be the object of the Home Departments and the Air Ministry to ensure that the same spirit of co-operation governs the practical application of the scheme. In that way we feel that there is every prospect of achieving the success of a measure which will unquestionably be of great benefit to Civil Defence and which will in no way be detrimental to the interests of the Royal Air Force. I beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Lloyd.)
2.58 p.m.
LORD HENDERSON: My Lords, we are most grateful to the noble Lord for the clear and easily understood explanation that he has given of the Bill now before your Lordships' House. Let me say at once that, so far as Members on this side of the House are concerned, he is assured of a Second Reading for his

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Bill. Having said that, I want to make briefly a number of observations, both on the Bill and on the purposes for which it has been brought in. As noble Lords are aware, the Bill is quite a short one—there are only two clauses—but it is an important Bill because it introduces a new principle; and that principle is to be found in Clause 1 (5). As it is a general principle applying to all members of all the Armed Forces, Regulars and National Servicemen, I am rather surprised that it is not placed in the forefront of the Bill, instead of being tucked away in its present position.
I am not sure whether it is at present a legal liability for members of the Regular Armed Forces to undertake as a normal duty Civil Defence and Civil Defence training, and the reference made by the noble Lord in his speech did not make it any clearer to me. The Regular Forces are recruited on a basis of voluntary enlistment for military service in one of the recognised branches of the three Armed Forces. I think I am right in saying that the complement of officers, N.C.Os. and men in the Experimental Mobile Column were drawn from the Army and the Royal Air Force, but whether this was based on a legal liability or was merely a temporary extension of their normal duties I am not clear. But there will be no room for doubt in the future. Regular forces will be legally liable to Civil Defence and Civil Defence training as a normal Service duty.
It is certainly the case that the National Servicemen are not liable for this duty under the National Service Act. There is now to be an extension of their legal liability. It is clear, therefore, that the Bill makes an important departure, that it adds new duties to the existing duties of all members of all the Armed Forces. I am not suggesting that there is anything wrong in extending the legal liabilities of men of the Armed Forces to include Civil Defence and Civil Defence training, but it is rather surprising that the present method should have been adopted to give effect to such an important new principle. It would seem that it is being introduced in this way at this time, not as part of a well-considered new plan to make Civil Defence the fourth arm of national defence, but in order to make it possible for a portion of the National Service reservists whom the Royal Air Force is not calling up for part-time training to be
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made available for very short training for service on mobilisation in mobile columns. The very limited application of the new principle seems to justify that view.
I recognise that the Bill is designed to strengthen Civil Defence—and that is something which we all wish to see brought about. There has, I suggest, been too much of a tendency for Civil Defence to be treated as the Cinderella of national defence. I think it is a pity, however, that the Bill should have come before your Lordships' House without our first having had an opportunity to discuss the general problem of Civil Defence. Here, may I express my appreciation to the noble Lord, Lord Lloyd, for his ready response to our request to defer the Second Reading of the Bill until to-day. I say this because those of your Lordships who have read the Report on Civil Defence issued at the beginning of the year by the Select Committee on Estimates will be aware that it pointed to serious shortcomings in our Civil Defence organisation and preparation and made a number of constructive suggestions.
There was a debate in another place at the beginning of the week, when the present position was reviewed. In opening the discussion, the Home Secretary said that studies are actively proceeding over a large part of the Civil Defence field, in parallel with the review of wider defence policy, but that he was not yet in a position to make any comprehensive statement about the probable results of that review. That is understandable; nevertheless, I feel that it would have been better if we could have considered an important proposal such as that contained in this Bill against the background of the results of the studies.
We all recognise that the advent of the hydrogen bomb has created new problems which, for their magnitude, complexity and gravity, far exceed anything of a like nature that this country has ever had to face in war time. The Home Secretary on Monday gave us some grim facts about the effects of a hydrogen bomb explosion. They were sufficiently clear to make perfectly obvious to everyone of us the appalling consequences of such an explosion, both in terms of casualties and of destruction or damage to homes, workplaces and the public services which are vital to the life of the community. I agree that Civil Defence

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is of far greater importance than it has ever been, and that its needs have taken on a greater urgency. If another war comes, and if it starts with intense hydrogen bomb attacks, as is expected, the civilian population will be in the front line from the very first moment. We shall need mobile columns; in my view, they are indispensable. It is of the first importance that they should be in existence, and ready and able to undertake the heavy and difficult tasks that will fall to them.
My Lords, we welcome the decision to create mobile columns, but we are not happy at the way in which the Government are setting about their establishment. There is far too much of the part-time element about the present proposals. First of all, there is to be a part-time Commander-in-Chief of the Civil Defence Mobile Forces. His area of command will be England, Wales and Scotland. As we have been told, he is to do a triple job in relation to mobile columns. He will command the mobile columns in the areas at a time of emergency; he will ensure that there is proper liaison between the mobile columns and the Armed Forces, and he will see that the mobile forces are in a position usefully and properly to co-operate with local authorities. Those are to be his responsibilities—and I am not sure that they are all. These seem to me to be most important duties, and it is difficult to see how they can be done properly and effectively on a part-time basis.
Then the mobile columns are to be manned by part-time trained reservists from the Royal Air Force. They are to have a month's training in their last two years of reserve liability. At the end of six years—that is, by April, 1960—there will be, according to my calculations, a pool of 60,000 men who have had one month's training, and 15,000 with only a fortnight's training. But by that time, 1960, half of them will have been out of touch with training for two or more years, and inevitably their value will have seriously diminished. This is the pool of manpower on which our mobile columns are to depend on mobilisation. It may be that this force may be diminished in another way, because we have to bear in mind that at the present moment the National Servicemen are being taken in regardless of the industries in which they
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are engaged in peace time—apart, I think, from coal mining. But when the war comes we shall be faced again with the question of reserved occupations, when it may be that some of these men will be retained in their civil employments, as members of reserved occupations. Does the noble Lord in charge of the Bill really consider that a month's training will provide the sort of mobile column service that we shall need? Does he consider that one month's training is adequate? In the debate in another place on Monday, one Conservative Member said that:
"in relation to the responsibilities, four weeks will be ludicrous."
I think most people will consider it utterly inadequate to provide an efficient mobile column service, capable of undertaking the vitally important duties of rescue and fire-fighting following a hydrogen bomb attack.
I should like to ask the noble Lord whether he and the Home Secretary have considered the suggestion of the Select Committee. The Committee suggested thirteen skeleton mobile columns—one for each of the regions in England and Wales, and one for each zone in Scotland. They had in mind the skeleton experimental column to which the noble Lord referred and which is to be disbanded at the end of this year. I think it was composed of 150 officers, non-commissioned officers and men. Thirteen of such columns would call for about 2,000 personnel a year for full-time service, and they would obviously be trained to a very high standard of efficiency. Or have the Government some other scheme in mind to give a fully-trained hard core to each mobile column? I believe that the mobile columns should be manned by members of the Armed Forces, but I do not see how it is possible to have mobile columns ready and equipped, and stationed for active service, if we are to rely in the main on the pool of National Service reservists with the four weeks' training to which I have referred.
What is needed are columns of fully trained men whose training is kept up to date. I hope, therefore, that the Government do not regard the present scheme as final. The noble Lord himself has said that it is a first step, and I was glad to hear that. I hope that they are going to produce a plan that will measure up to the requirements of war.

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I listened to part of the debate in another place on Monday, and I have read all the speeches that were made in the debate, and I think I am right in saying that there was not one speaker, in any quarter of the House, who did not criticise the basing of mobile columns on National Service reservists with only four weeks' training. I may be wrong, but it seems to me that the present inadequate scheme has been adopted because the Armed Forces are not prepared to regard Civil Defence as having any claim on full-time manpower available for national defence. The Home Secretary has had to take what he could get and be satisfied with it. I hope that he will not be satisfied. I hope that both he and the noble Lord opposite will reexamine the question of mobile columns, and that they will insist on getting the manpower that will ensure, in the event of an emergency, that the mobile columns will be of such strength, efficiency, and up-to-date training as will enable them to undertake the very responsible tasks that will fall to them. That is all I want to say on this subject. I will only repeat that, so far as we are concerned, the noble Lord will get a Second Reading for his Bill.
3.13 p.m.
VISCOUNT BRIDGEMAN: My Lords, Civil Defence never has been a Party matter and I feel very much in agreement with a great deal of what the noble Lord, Lord Henderson, has said. I welcome the Bill, not so much for what it contains as for the indications that Civil Defence, after a slow start, is really getting on the move. The Bill itself deals only with a very limited matter; in fact the substance of the Bill and the question of mobile columns are only one or two trees in a fair-sized wood. Some of us have been a good deal critical in past times of the standard of forestry which was practised in that wood, and therefore welcome now a Bill which does seem to indicate that Civil Defence is being looked at in much more the right way—that is to say, steps are to be taken by Civil Departments to deal with aggression which will be part of total war. After all, when one comes to think of it one may talk about Civil Defence, but there is no such thing as civil attack; and Civil Defence in this country simply means steps which are to be taken by the Home Office, by local authorities,
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and by other Ministries, in co-operating in the great task of resisting aggression. The more we take that line, the less it will be necessary for my noble friend in front of me or other people to come along to your Lordships' House and produce a Bill which says that Civil Defence is the duty of the Armed Forces.
As I listened to the noble Lord, I began to think back to 1940 and realised with horror that at that date, when I had an urgent order from Southern Command to send every possible water-cart to the relief of Bristol, where the water mains had burst, I was probably bringing myself within reach of the law. I am glad to think, after all these years, that the principle carried out then is now within reach of the Statute Book. I do not think it occurred to the nation at that time that we were in danger of doing anything that was wrong. We are told by my noble friend, Lord Lloyd, that a number of things are still under review by the Home Office. We know what those things are: they are, in fact, the subjects which were dealt with in the Select Committee in another place. I do not want to go too wide of the Bill, but I hope very much that too much time will not be spent in reviewing these matters. I want to remind your Lordships that it was because so much time was spent on reviewing armoured fighting vehicles in the 1930's that we went to war in 1939 with no proper armoured vehicle at all, and that is what will happen again if we spend too much time reviewing these masters.
The Bill does not introduce any new ideas into Civil Defence; it is really here to give statutory authority to those parts of the new idea which cannot be implemented without it. A great deal can be done administratively, and I very much hope (and I have very good reason for believing) that administrative action is going to be taken. All we are doing to-day is to make certain that we are not held up by lack of statutory authority. I agree, too, that, for the present moment, most of the manpower that is wanted can be obtained under the National Service Acts. It is a question of regular cadres, as the noble Lord, Lord Henderson, mentioned. Up to now, the regular cadres, if I understand the position aright, have been composed of paid Civil Defence personnel. Whether

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they should be enlisted or enrolled under any Statute which is a counterpart of the Army Act or the Air Force Act is another matter which we have not yet reached, and with which I will go no further to-day. I will come back to the question of part-time people with regular cadres.
To revert to the Bill, the only two clauses which matter to anybody except those in the legal profession are Clause 1 (1), which declares Civil Defence to be a proper duty for National Service, and Clause 1 (5), which authorises Regular Forces to take part in Civil Defence, which, as I say, they have been doing for a very long time. On the question of using R.A.F. reservists, may I endorse what the noble Lord, Lord Lloyd, said: how very grateful we should all be for the help which my noble and gallant friend the Secretary of State for Air and the Air Ministry have given in this matter. It is a good example of co-operation and augurs very well indeed for the future.
What is now happening is that each year 15,000 reservists in the last two years of their Service will be given a fortnight's training in rescue duties. Whether that is going to be a satisfactory answer to the problem of proper training in rescue duties I am not so certain. After all, the National Service plan in other directions than this service is that the soldier and the airman should be trained full time for a certain period to do a job which he will have to do in war. They are then sent to the Reserve and called up from time to time to be trained for the same thing. This plan reduces the Royal Air Force reservists to a fortnight's training, apparently, without their having had any full-time or previous training in mobile column work or in rescue work. If that plan is going to work satisfactorily, it will have to be carefully watched. Equally, the National Serviceman who does his service in the Territorial Army not only does a fortnight's camp but also does certain periods of evening and week-end training. It is not quite clear to me at the moment why that arrangement should not be taken advantage of for these reservists who are going to train not with the Territorials but with the Civil Defence people in mobile columns. It seems to me that
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there is a good case for following that line. I agree that this Bill is a good start. We should see how things go on and be ready to alter them if alteration be necessary.
Then we come to this part-time commander who was mentioned by my right honourable friend in another place and by the noble Lord, Lord Henderson. I noticed that there was a certain amount of criticism on the grounds that the appointment will be a part-time one. I am not sure that I see it the same way as the critics. If this individual can do the job in part time, I see no point in paying him whole time, at any rate until the emergency arises. If this is a full-time job, of course, he should be employed full-time and paid for it, but I am not certain that it is. What I am concerned about is the responsibility that this individual is going to have. I am bound to say that I did not like the wording used in another place to describe his appointment. It seems to me that his responsibility was ill-defined, and you cannot command anyone unless the terms of your command are defined. If the poor man is merely going to walk round the corridors of the Home Office, hoping for someone to take his advice, I shall be very sorry for him. I trust that we may be told before long, in precise terms, just what his responsibility is to be, and whether he is to be allowed to have any say in the training of the people whom he is eventually going to command—if he is going to command them.
Now we cone to another point: namely, exactly what command does mean, in war time, of mobile columns. Mobile columns are really Reserves; they are people trained in fire and rescue duties, who are available to be sent to any point where they are particularly required. When they get to that point, however, if they are anything like any other troops I have ever heard of, they will not do their job under their commander; they will come under the command of the local commander—the Regional Commissioner or whoever it may be—and carry on the battle there. I suggest to my noble friend, Lord Lloyd, that a little clear thinking is necessary on this question of command. Indeed, I think one of the most important subjects to be considered now in Civil Defence is the whole question of staff

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work and communications, and everything that goes with it. Unless the standard of efficiency is what it ought to be in that connection, these things will happen: the trained men may be there, but they will not get to the right places and they will not be told what to do.
My Lords, I think those are the main points which arise out of the Bill. As I say, I do not regard this as being by any means a thoroughly satisfactory solution of the problem, but neither would I say that I think it is possible to get a satisfactory solution of the problem until a great deal more practical experience has been had with regard to mobile columns and, indeed, with the whole of the staff work and control of Civil Defence. The position that the local authority is, so to speak, a commander, still wants a good deal of consideration. The question of how the cadres of the mobile columns and other Civil Defence units are to be enrolled is still far from clear to me. Going back for a moment to what Lord Henderson said, I am not worried about having a lot of part-time personnel in the mobile columns, provided there is a well-trained regular cadre of people holding the key positions. After all, a good many of the people in the mobile columns are persons who need not have a very high standard of training. The gunners used to call these people "higher numbers." They would do such jobs as passing shells to one another, and so forth. Provided they know what to do, what to fetch and carry and where to go to, or can drive motor vehicles—which many people in civil life can do—it is not necessary that they should be more than part-time. What is necessary is to have proper, full-time cadres, which ought to be on much the same basis as Regular cadres in the Reserve Army or corresponding units in the Navy or Air Force, because the problem is exactly the same. I repeat that I welcome this Bill as one more sign that unnecessary barriers are being broken down and that the problem of Civil Defence is seen in relation to the grand design of prevention of war—so we hope—or defeat of the enemy if it comes to war.
3.26 p.m.
LORD CHORLEY: My Lords, I should like to say a word or two as one who had a good deal to do with Civil Defence during the war, and to support what has been said by the noble Lord, Lord
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Henderson, and the noble Viscount, Lord Bridgeman, in welcoming this Bill as a sign that the Government appreciate the importance of unity between the Armed Forces and the Civil Defence forces. It was very much borne in upon us during the war years that there was not quite as much unity as many of us felt desirable. That was to some extent overcome by the development of excellent relations between those in charge of Civil Defence arrangements in the regions and those in charge of the Home Guard—of whom the noble Viscount, Lord Bridgeman, was such an eminent leader. I think that his good will was one of the most important elements in that situation. The noble Lord, Lord Geddes, who was one of those who brought the most profound thought and originality to bear on these problems, frequently said that it was not possible to organise Civil Defence satisfactorily without complete unity between the civilian and the military side—both part-time and whole-time soldiers and the Home Guard. Although I think that some steps have, in fact, been taken—and this Bill is a sign that further steps are being taken—in that direction, I feel that we are still a long way short of the objective. The war situation—if we are to be cursed with another war—will clearly be more difficult to handle than it was during the last war, and I have no doubt that if we are to handle it successfully we must have much greater unity. As the noble Viscount, Lord Bridgman, has said, this Bill takes us some distance in that direction. Therefore, I think it is important.
One other point. There has been a little controversy over the matter of the mobile columns. I think that we in the North-Western Region, if not the originators of the mobile columns at any rate did much to develop those columns; indeed, did more to develop those columns than was done in other regions. Of course, one naturally likes to feel that one's own particular region was in the forefront; but I do think that that was really so. It was found that it requires a great deal more training than any other branch of Civil Defence. My noble friend Lord Henderson is right when he says that, so far as can be judged from the proposed set-up, the amount of training envisaged for these mobile columns is not going to be adequate. I disagree with the noble Viscount, Lord Bridgeman,

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on this matter. The fact that a man can drive a motor car and do this, that, and the other, does not mean he is able to fit into the complicated scheme of these columns. We found that a high standard of training was necessary, and I do not imagine that under the conditions of another war that will be less necessary. I think the Government are right in placing emphasis on these mobile columns—and very rightly, because they were one of the best developments of the middle years of Civil Defence when we were really getting ready for attack, which of course never came. I feel that under the conditions of another war these columns will have to be more highly trained and expert than under the conditions of the last war, and a good deal more training is necessary than is envisaged at the moment. I support what my noble friend, Lord Henderson, said on that point.
3.32 p.m.
VISCOUNT STANSGATE: My Lords, I should like briefly to put one or two questions to the noble Lord, Lord Lloyd, to which he may find it possible to give an answer in the course of his reply. They will be brief and rather general questions. The first is this: Do the Government imagine that this development of Civil Defence is in any way commensurate with the danger which faces us in the case of the use in war of chemical agents? The second question is: What period of warning have the Government calculated upon in making preparations for Civil Defence, for example, in London? And the third is: Do the Government consider that a defensive war may make it necessary for us to strike the first blow with the hydrogen bomb? That is a very important question, because it governs the period of warning we may get. As the noble Lord knows, I have raised these questions several times before—it is difficult to find an opportune moment to put them. If he can give me some reply, or indication of a reply, I shall be grateful.
3.33 p.m.
LORD LLOYD: My Lords, I think it fair to say that the Bill has received a welcome, albeit a cautious one, from most of your Lordships. It is interesting to reflect that, as the noble Lord, Lord Henderson, said, this Bill for the first
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time places legal liability for Civil Defence on members of the Armed Forces, but I do not think that this is such a departure as the noble Lord suggests. The Armed Forces have, in fact, been engaged in Civil Defence for a long time. This is a legal departure, but I do not think it is a practical departure. Most criticisms that noble Lords have made of the Bill seems to me to have been based on the assumption that this is the Government's last word on Civil Defence. I am sorry that this should be so, because I did my best in my opening speech to emphasise that it is a beginning. It is the logical extension of the policy carried out by the noble Lords opposite, and it is merely a beginning. Nor can I agree with the noble Lord, Lord Henderson, when he said that this was not part of a well co-ordinated plan. We feel that the first requirement is an adequate reserve of trained men. I profoundly disagree with the suggestion that we should have thirteen mobile columns producing 2,000 men a year. We feel that that would be about the most expensive and unsatisfactory way of doing it. The yield would be the smallest and the expense the greatest.
LORD HENDERSON: My Lords, may I interrupt? If we had thirteen mobile columns—that is an arbitrary figure, because I do not know how many the Government have in mind, and a large number would be required to do the job properly—with 150 men as their permanent cadre, we should then have units with a full-time backbone to which we could relate reserves for training. I am at a loss to understand how we are going to train reserves when there are no mobile columns in existence at all. These men will do their month's training and then disappear. Am I to understand that all we are going to build up are these training centres with qualified instructors? Are we going to put the Reservists through their paces and will they then disappear, and another bunch come along for the same thing? If so, I agree that we shall have a pool, but I do not think we shall have mobile columns.
LORD LLOYD: We will not argue too much on the details of that matter. I will deal with it more fully when I come to training. The most general criticism is that we have too many people working part-time. Reference was made to the

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Commander-in-Chief of the mobile forces and it was felt that this should be a full-time job. I assure the noble Lord that we have not closed our minds on this matter. We are going to appoint this officer on a part-time basis; but as things develop it may prove necessary that he should be whole-time. We shall see as we go along, because we are feeling our way in all these matters. This is not the final word; but at the beginning he will be part-time, and we shall see how that works out. My noble friend Lord Bridgeman said he thought the Commander-in-Chief's duties ought to be more fully defined. My right honourable friend did give a fair definition of those duties in another place, and if my noble friend will forgive me I will read what he said (OFFICIAL REPORT, Commons, Vol. 529 (No. 141), col. 1815):
"We propose to appoint an officer with the style of Commander-in-Chief designate of the Civil Defence Mobile Forces. The full scope of his duties will not be rigidly defined but his immediate task will be to collaborate with his opposite numbers in the Armed Forces in securing that the development of plans for civil defence mobile columns are in harmony with military plans and to co-ordinate plans for the employment of the former in aid of the local civil defence forces."
That seems to be a reasonable definition. My right honourable friend went on to define also what the Commander-in-Chief would do in war.
VISCOUNT BRIDGEMAN: My Lords, the paragraph which my noble friend read out was exactly the one I had in mind. What I feel concerned about is the phrase that his duties "will not be rigidly defined." I want to be quite certain that his responsibilities are rigidly defined; otherwise it will be impossible for him to get to work.
LORD LLOYD: I think the noble Viscount will find that gradually things will take a firmer shape than they do to start with. On the matter of training, I freely admit that a slightly longer period of training might be ideal, but I am bound to point out that the actual number of hours spent in training under the scheme will be broadly comparable with the aggregate time a volunteer spends in, say, rescue training in the local Civil Defence Force. To say that his training will be totally inadequate is pushing it too far. We must be careful
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not to go to either extreme in this matter. We cannot fully train a man in rescue duties in two months; a month may be shorter than we should wish, but it is all we can spare, and in rescue duties and fire fighting the men will have very tolerable training in that period. A point was made about having men permanently on Civil Defence. But what could we do with them? After three months they would be fully trained in rescue duties and fire-fighting. Although our plan may not be perfect, I think the training provided will yield a useful nucleus for time of war. My noble friend Lord Bridgeman stressed the importance of command and staff work. I assure my noble friend that we shall not entirely forget about these things. We are reorganising all our plans at the present time, and those considerations are very much in our minds in the changes that we are making.
Finally, I should like to deal with the points made by the noble Viscount, Lord Stansgate. He asked me, first of all, whether the Government imagined that the present development of Civil Defence was commensurate with the danger. If he had heard the early part of my speech (perhaps he was not here) he would know that I did point out that the main emphasis of our policy at the moment is to try to prevent war, rather than to sit down and prepare to be bombed. We believe in doing it that way. Clearly, with the amount of manpower that we have, it is difficult to do both, Therefore, while we follow our present policy Civil Defence must always lag behind the Armed Forces. As regards the period of warning, the noble Viscount is as wise as I am. Nobody can tell what period of warning will be given. All I would say is that we hope to have some period of warning; but it is impossible for me to answer a question like that.
VISCOUNT STANSGATE: Does the noble Lord mean that the experts at his command have not studied the question of whether it will be five minutes, quarter of an hour, or an hour? It is important. If he says that the Government have not finished their studies, that is all right. But if he says that no one will ever be able to know, then no one will ever be able to make an efficient Civil Defence.
LORD LLOYD: That is an extraordinary proposition. Nobody outside the Kremlin—supposing that was the opposition—could tell what warning might be given. Anybody can make guesses, and that is what I should be doing if I gave an answer. For me to get up and say that we think we shall have so much warning would be patently absurd.
VISCOUNT STANSGATE: I am afraid that I have not made my meaning clear. I am not speaking about policy. The noble Lord assumes that some persons are threatening to attack this country—that is a matter of policy. I am talking about the technical side. When there is some intimation that somebody has started, what warning, do we get to make our defence?
LORD LLOYD: I do not think there is much object in pursuing this matter. It seems to me self-evident that it is impossible to know what warning we shall get; and we hope that we shall get as much warning as possible. We base our plans upon having a reasonable warning, and if the noble Viscount has any information as to what warning we are going to get, perhaps he will pass it on to the Government.
VISCOUNT STANSGATE: I call that a very silly answer.
LORD LLOYD: It was a very silly question. As regards the last point about the hydrogen bomb, that is outside the scope of this debate, and I do not propose to be drawn into a general discussion on foreign policy.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

LANDLORD AND TENANT BILL
3.44 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DROGHEDA in the Chair]
Clause 1 agreed to.
Clause 2:
Tenancies to which s. 1 applies
(2) At any time before, but not more than twelve months before, the term date application may be made to the court as respects any long tenancy at a low rent, not being at the time of the applicaion a tenancy as respects which the qualifying condition is fulfilled, for an order declaring that the tenancy is not to be treated for the purposes of this Part of this Act as a tenancy to which the foregoing section applies; and where such an application is made—
(b) if the court makes the order, then notwithstanding anything in subsection (1) of this section the tenancy shall not thereafter be treated as a tenancy to which the foregoing section applies.
(5) In this Part of this Act the expression "tenancy at a low rent" means a tenancy the rent payable in respect whereof (or where that rent is a progressive rent, the maximum rent payable in respect whereof) is less than two-thirds of the rateable value of the property comprised in the tenancy; and—

(a) if that property is a dwelling-house to which the Act of 1920 applies apart from the Act of 1939, the expression "rateable value" has in relation to it the same meaning in this subsection as it has in the Act of 1920 in relation to such a dwelling-house;

(b) if that property is not such a dwelling-house, the said expression has in relation to it the same meaning in this subsection as it has in the Act of 1920 in relation to a dwelling-house to which that Act applies by virtue of the Act of 1939.

LORD SILKIN LORD SILKIN moved, in subsection (2), to add to paragraph (b):
"unless on the application to the court at any time before the term date a person who did not appear when the order was made satisfies the court that his failure or omission to appear was in all the circumstances reasonable and that the qualifying condition is fulfilled on the date of the application."

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The noble Lord said: Clause 2 of the Bill deals, amongst other things, with the case of a person who may desire to know some time before the expiration of a lease whether an application is likely to be made by his tenant for a continuation of the tenancy. Subsection (2) of that clause provides that application may be made to the court as respects a tenancy of this kind:
At any time before, but not more than twelve months before"
the expiration of the tenancy,
"for an order declaring that the tenancy is not to be treated for the purposes of this Part of this Act as a tenancy to which the foregoing section applies. …"
And if the court makes the Order that this Part of this Bill does not apply to such a tenancy, then whoever is interested, any tenant or other person, is for ever deemed to be barred from taking advantage of the Bill.
I would draw the attention of the Committee again to the actual wording of subsection (2), which, presumably, gives the landlord power to go to the court. It says:
"At any time before, but not more than twelve months before, the term date application may be made to the court …"
and so on. It does not say by whom. Presumably, the intention is that it should be the landlord. But I wonder why this subsection does not say plainly by whom the application is to be made. Obviously, it is not going to be the tenant; he will not want to know. Furthermore, if it is the landlord, there is no obligation on him to give notice to anybody of the application. He is not obliged to tell the tenant, apparently, that he is making such an application. According to the wording, an application is made to the court by somebody, and the court may thereupon make an order that the provisions of this Bill do not apply; and if such an order is made, then, whatever may happen thereafter, the tenant has no rights under the Bill. It may be that, at the time the application is made, the tenant has not been served with any notice; it may be that he is away; it may be that the order is made on information which the tenant could have rebutted if he had been there; and it may be that he has been unavoidably prevented from being there. Nevertheless, in spite of all these things, the tenant is
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barred for ever from taking advantage of the Bill.
I cannot believe that the Government are serious in putting forward this proposal in the words in which they have done it. I concede that it may be a good thing for a landlord to know some time before the end of the term where he stands; but if he wants to know there ought to be an obligation upon him to serve notice on the tenant, and to make quite sure that the tenant receives the notice. The tenant ought to have every opportunity of making his case and explaining that the provisions of this Bill do apply to him. All this should be stated in the Bill, and there should be definite provisions covering it. This Amendment provides that the order of the court declaring that the provisions of this Bill do not apply to the tenancy shall stand unless the tenant is able to establish that his failure to appear when the order was made was not due to any omission on his part and was in all the circumstances reasonable, and that the qualifying condition is fulfilled—in other words, that he had no opportunity of making his case against tthe order, and that the provisions of this Bill ought to apply to him.
I hope the Government will appreciate that some provision of this kind is necessary if justice is to be done to the tenant. I may have to say this over and over again in the course of the afternoon. Whether these particular words do all that I want only the noble and learned Lord or the Parliamentary draftsmen can say. I have no doubt that defects can be found in the wording of every single Amendment that has been put down, except where I am moving to leave out a provision. Nevertheless, I hope that I have made the intention of the Amendment perfectly clear, and that whoever is to reply will not taunt us on this side for our failure to draft Amendments in the way in which they would have been drafted if we had had skilled assistance at our disposal. I beg to move.
Amendment moved—
Page 2, line 20, after ("applies") insert the said words.—(Lord Silkin.)
THE LORD CHANCELLOR (LORD SIMONDS): Let me say at once that whether the wording of this Amendment is clear or not, the noble Lord, as he always does, has made his intentions very clear. I am going to say something which

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I expect I shall say over and over again, too; and that is this. Every provision in this Bill, almost without exception, is a provision which improves the condition of the tenant. We have constantly to guard against the danger lest, in attempting to ameliorate his position, we go too far. By these provisions we are detracting from the bargain which has been made between the parties, and we are doing so because we think that circumstances have arisen, uncontemplated at the time these leases were entered into, which make it equitable that that should be done. But we are anxious to do justice between the parties.
Now the first element of justice in regard to this matter is this. The landlord, who until the provisions of this Bill were known to him was entitled to assume that the bargain that he had made would be carried out, is entitled to know beyond all doubt whether or not at the date of the termination of his lease the provisions of the Bill are to operate in favour of his tenant. In nine cases out of ten, or in ninety-nine cases out of a hundred, I dare say there will be no doubt upon that fact. But if there is a case in which a doubt arises, he is entitled to go to the court to ascertain what his position will be upon the date of termination, because, according to what the position is, so he must make his plans. It may be that he wants to redevelop. It may be that he is content that the tenant should stay on. His plans may be what you like; but he is entitled to know the position. If this Amendment, or any Amendment which carries out the intention of the noble Lord, is inserted into the Bill, the very purpose of this provision will be defeated; for until the last hour the landlord will not know whether the tenant will come forward and say, "I did not know what was happening; I was away," or whatever it may be; and so the landlord's plans are defeated. That cannot be right.
Let me tell the noble Lord what this Bill does provide, which will really give as much relief to the tenant in default as he is entitled to. The landlord goes to the court, and from the court he will get a judgment. I am prepared to say—indeed, it is implicit in the Bill—that exactly the same provisions will apply to the tenant as to any defendant in the county court. It is impossible that he
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should not have knowledge of the proceedings except by some default of his own—avoiding service or something of that kind. As the noble Lord knows, better probably than I do, the rules of procedure in the county court are strict to ensure service. There must be an affidavit of service; or good reasons must be shown, when the case comes before the court, why judgment should be given against the defendant in default of his appearance. There is no reason why, in proceedings under this Bill, a man should be in any better position than in any other proceedings on which he is brought before the county court. There are ample precautions taken in the county court to see that the defendant has knowledge of the proceedings.
Further, the tenant will get the advantage, as do all other defendants in the law courts, of the provisions of the County Court Rules. Order 37, Rule 1, of the County Court Rules provides that:
"The judge shall in every case have the power to order a new trial to be had upon terms as he thinks reasonable, and in the meantime to stay the proceedings. An application for a new trial may be made"—
and so on. Observe Rule 2. It says:
"Where a defendant to an action or a defendant to a counter-claim does not appear at the hearing, and a judgment or order is given or made against him in his absence, the judgment or order and any execution thereon may, on application, be set aside and a new trial may be granted."
I am prepared to say—because it will be my duty to frame the Rules under this Act—that the tenant who is made a defendant to these proceedings will get exactly that relief under the County Court Rules. I am sure that when the noble Lord considers it he will see that there can be no reason why a defendant in such proceedings as these should be placed in a more favourable position than any other defendant against whom a suit is brought. Indeed, I would venture to say that we are going a very long way, in the special circumstances which exist here, in giving him the same measure of relief as we give to other defendants in county court proceedings. I hope the noble Lord will agree that we go as far as is reasonable to meet him in his suggestion. I hope he will think we have gone as far as we can to meet the case where a defendant, for one reason or other, has failed to appear and has failed to give reasons why he should be brought within the provisions of the Bill.
LORD CHORLEY: Did the noble and learned Lord say that he was framing Rules under this Bill?
THE LORD CHANCELLOR: The Bill provides for Rules to be made, yes.
LORD CHORLEY: Would the noble and learned Lord tell me whether the Rules will, so to speak, link this matter up more clearly with the existing County Court Rules? The noble and learned Lord knows far more about this matter than I do, but I did not feel convinced that the County Court Rules which he read out would necessarily apply to an application of this kind. They were framed to apply to the ordinary litigation in a county court.
THE LORD CHANCELLOR: I have told the Committee that the Rules which I propose to make will so provide.
LORD CHORLEY: I am obliged to the noble and learned Lord.
LORD SILKIN: In a sense, the noble and learned Lord has given me what I want. All I want is that the person who is most affected by this clause—namely, the tenant—should clearly be aware of any application that has been made. If he has not been aware of it, through no misconduct or default on his part, he should have an opportunity of going back to the court. If the noble and learned Lord says that the Rules will be made so as to ensure that that is the case, and that the tenant will have the advantage of the provisions which he read out—with which I am quite familiar, although I did not see how they related to this provision—that is all I want. On his assurance, I gladly withdraw the Amendment.
Amendment, by leave, withdrawn.
4.0 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (5), after the second "tenancy" to insert "of a dwelling-house." The noble Lord said: I beg to move this Amendment which is linked up with Amendment No. 3. When I referred to bad draftsmanship a moment ago, let me say at once that I had this particular Amendment in mind, among others. The purpose of this Amendment—frankly, I am not sure whether in fact it fulfils it—is to raise the question as to the class of persons to whom the Bill is to apply. As the Bill stands, it applies to persons
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living in houses which have rateable values within the limits to which the Rent Restrictions Acts apply. Therefore, if a person is living in a house with a long lease and with a rateable value, in London, of more than £100 a year or, in the country, of more than £70 a year, then the provisions of this Bill do not apply. The purpose of my Amendment is to ensure that, by leaving out these limits—and that is what the Amendment does: it cuts out the limits—the provisions of this Part of the Bill will apply to anybody who has a tenancy at a low rent, as defined in the Bill.
I discussed the merits of this matter, to a certain extent, on Second Reading. It seemed to me anomalous that the protection which this Bill provides, not only for persons living in dwelling-houses but also for persons in business, so that at the end of their tenancy they get some kind of security, should stop short at just this section of the community who are living in houses with the higher rateable values. It is all the more curious that these same people are protected in their shops, their offices or their factories. No limits are prescribed at all. Any person who has a business with a rateable value of £10,000 a year is nevertheless protected at the end of his tenancy under Part II of the Bill. Indeed, everybody is protected except this relatively small section of people the leases of whose homes come to an end and in respect of whose houses the rateable value is higher than the prescribed limit.
Who are these people, by and large? It is no good noble Lords opposite talking of very wealthy persons. There are a limited number of those, of course. The noble and learned Lord referred to himself. I put him in the category of wealthy. There are a number of very wealthy people whose leases will come to an end, and this House might say, if it wanted to: "We are not out to protect them. They can look after themselves." Perhaps they can, although, for the sake of uniformity, I should not myself have wanted to exclude them. This Bill protects most people whose tenancy in respect of their homes or their businesses comes to an end. I see no particular reason for leaving out anybody. But we are not really talking about wealthy people; we are talking about the large section of the

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population whom we generally describe as the middle classes.
In my Second Reading speech the other day I referred to the people in Dulwich. Dulwich seems to me typical of the districts in which the kind of person I have in mind lives, and, as I said then, it happens to be a district in which I have myself lived very happily for a number of years. Many of the people living there are living in houses where the rateable value is somewhat higher than £100 a year. It so happens that a good many of the leases in that district are coming to an end. I make no reflection in this House, nor would I do outside, against the landlords of those houses. I have no doubt that they will perhaps come to reasonable arrangements with the tenants at the end of the lease—I do not know. I am not suggesting that they will not. What I do suggest, however, is that the tenant at the expiration of the lease is entirely at the mercy of the landlord. That is exactly what we are seeking to prevent.
In the case of tenants of houses at a lower rateable value than £100 a year, we are trying to give them a reasonable opportunity of bargaining as to what is a fair rent and of having their future rent settled by the court, if they cannot come to an agreement. This considerable and most worthy section of the community, of whom I am speaking, however, will have no such opportunity. They will have to accept what the landlord requires, or get out. They will have no opportunity of getting a fair rent settled by the court. Frankly, I do not understand why they should be left out. What are the reasons that have been given? From time to time, out of the lips of various Ministers and others, it has been suggested that these people are in a position to look after themselves. Are they in a position to look after themselves? They are not; and anyone who knows anything about housing conditions in London knows perfectly well that some of the people of whom I am thinking, people whose incomes are between £1,000 and £1,500 a year, are suffering the greatest possible hardship through being compelled to pay very high rents, more than they can afford, owing to the scarcity of accommodation, or to buy their houses at prices which are considerably inflated—though I am glad to say not quite so inflated
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as they were a year ago. The noble and learned Lord must not make any Party capital out of that fact. The rents are extremely high and more than the people can afford to pay.
I said in my previous speech that the Party opposite are posing as champions of the middle classes. Then why do they deliberately leave them out of the provisions of this Bill? One reason given is that they can look after themselves. I reject that entirely. I admit that people of the highest incomes may be able to do so, but not the kind of people of whom I am thinking and large numbers of whom I know personally. They are not in a position to look after themselves. They are suffering great hardship. Many of them are educating their children at considerable cost and they are having a hard battle. If, at the end of their term, they are forced to pay whatever rents may be demanded of them, without any redress on their part, the hardship on them is going to be great.
The second argument that has been put forward is that it would not be consistent with the general policy of this Bill; that this Bill provides for protection of dwelling-houses within the rent restricted limits and it would be dangerous, wrong or improper to go outside those limits. I recognise that this is a major Amendment, in the sense that, if it were carried, it would involve major Amendments to the structure of the Bill. Nevertheless, that is not really an argument for not accepting this Amendment. Let there be such drastic Amendments to the Bill to provide for people of that category. I see no reason why that should not be so. Of course there will be consequential Amendments. Another argument raised (and I imagine the noble and learned Lord is going to deal with this point) is why, if we think so much of it, did we not do it ourselves? I have heard the noble and learned Lord ask that before. Well, we did not do so, and I think we ought to have done. But if noble Lords opposite can rest only on the imperfections of their predecessors, and suggest that they are not prepared to do any better than their predecessors, what is the justification for their existence at all? I imagine they are here to put right all the defects, omissions and imperfections of their predecessors, and if their predecessors failed to protect adequately this particular section of the community, why do

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they not do so and look after them—or is it that this section is comprised of pariahs and outcasts and nobody is going to look after them at all?
I hope that noble Lords opposite will give sympathetic consideration to this question. It is a grave question and I can assure noble Lords that it is worrying a large number of people. Noble Lords opposite may know that a considerable number of leasehold tenants' associations are growing up all over London. Among the strongest of them are the leaseholders in places like Dulwich, Lewisham, and other areas where there are a considerable number of houses that would be affected. These people are very worried indeed about their future, and if noble Lords opposite can do something to reassure them, this Bill will have been worth while. I beg to move.
Amendment moved—
Page 2, line 33, after ("tenancy") insert ("of a dwelling-house").—(Lord Silkin.)
LORD OGMORE: I should like to support my noble friend Lord Silkin in this Amendment, which I think is a very reasonable one, for two reasons. First, any line drawn is bound to be an arbitrary line. The line in London is drawn at £100, and it is about £30 less in other parts of the kingdom; but it was a purely arbitrary line when it was drawn; it is an arbitrary line now, and of course any line of that kind means that considerable hardships may be caused to those coming above the line. I think the reasons which impelled the Legislature over a series of years to have a Rent Restrictions Act, and to have amending Acts, apply to a very large extent to those who have houses of a rateable value above £100, as well as to those with houses below, particularly in London, where rateable values are so very high.
The second reason I would give is that money has been falling in value for many years, and certainly has been falling considerably in value since 1914, when the first Rent Restrictions Act was passed; what was a reasonable figure in 1914, and even in 1920, when the second Act was passed, may not be reasonable to-day, when rentals and rateable values are so much higher than they were then. If one takes into account the considerable fall in the value of money, a large number of houses which in those days
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would have been caught within the net of the Rent Restrictions Act would not be caught to-day.
On Second Reading, my noble friend Lord Silkin mentioned this particular view of his, and of others in our Party, on this particular issue, and we were countered by the extraordinary arguments of Lord Mancroft which I am quite sure the noble and learned Lord the Lord Chancellor will not repeat—at least, I hope he will not. First of all, said Lord Mancroft, he was surprised to hear that we had any regard for people who lived in houses above a rateable value of £100 a year, because for six and a half years we had been engaged in "strangling" them. Of course, that is quite untrue; we have not been "strangling" anybody. But even if we had, surely that is a reason for unstrangling them; it is not a reason for continuing the strangulation, which is what the Government propose to do. The noble Lord's second argument against this proposal which was even more extraordinary, was that for four generations his family has been occupying a house of which the landlord is Lord Portman. Why that sort of argument should be adduced in a House of Peers against a proposal in a Bill, I cannot understand; it seems to have nothing to do with it.
LORD MANCROFT: It was not supposed to have anything to do with it.
LORD OGMORE: If it was not supposed to have anything to do with it, I do not know why it was put up as a sort of argument against this proposition. I think the noble Lord appears to have been trifling with the House. But we were not trifling with the House—we were putting up a very serious proposition, and we expected that the Government spokesman would treat it in the manner in which we had put it before your Lordships. If, as the noble Lord now says, his remark was not supposed to have any relevance, then I will not refer to it any longer. I certainly think that the Committee should most seriously consider this Amendment, which, as I have said, will bring within the scope of this measure, a large number of premises where people are feeling the pinch of modern times. I strongly support the Amendment.
THE LORD CHANCELLOR: The last thing that my noble friend Lord Mancroft intended to do was to trifle with the House. He was, I think, making a declaration of the "self-interest" point, and the last thing he did, or intended to do, was to treat the House with levity on a serious or any other question. I must say that I have been completely surprised by this Amendment. Until the noble Lord, Lord Silkin, was good enough to speak to me on the Woolsack I had no idea whatever—and I do not think I could have had any idea—that by this Amendment he intended to raise the very large question of whether the scope of this Bill should be enlarged so as to embrace a large class of people who are not entitled to the benefit of the Rent Acts.
If the noble Lord will be good enough to look back to Clause 2 (1) of the Bill he will see that it is there implicit that we are dealing with a class of tenants who would be subject to the Rent Acts, but for the fact that their rent is low. Let me read it, and the noble Lord will follow:
"The foregoing section applies to any long tenancy at a low rent, being a tenancy as respects which for the time being the following condition (hereinafter referred to as 'the qualifying condition') is fulfilled, that is to say that the circumstances (as respects the property comprised in the tenancy, the use of that property, and all other relevant matters) are such that on the coming to an end of the tenancy at that time the tenant would, if the tenancy had not been one at a low rent, be entitled by virtue of the Rent Acts to retain possession of the whole or part of the property comprised in the tenancy."
From beginning to end of the first Part of the Bill we are dealing with that sort of case, and with nothing else. Accordingly, when I read the noble Lord's Amendment, I thought that he merely wished to be enlightened as to the meaning of subsection (5) (a) and (b), because I am bound to say they are a little difficult to understand.
Now, however, the noble Lord has raised a question which is indeed far-reaching, because he wishes to include within the scope of this Bill, and therefore pro tanto within the scope of the Rent Acts, a class of person who, rightly or wrongly, from 1915 onwards—for nearly forty years—by the consent of all Parties, has not been brought within the protection of the Rent Acts. With great respect, this is not the way or the time
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to do that. I would ask, as I have done before, why did not our predecessors do it? I am far from saying that everything done, or omitted to be done, in the past was wrong. But, quite rightly, and by the consent of all Parties, for forty years persons whose premises were rated at above a certain amount have been excluded from the protection of the Rent Acts. Are we now, at this moment, to alter that, when there never has been any sort of discussion or suggestion that that should be so?
As the noble Lord has said, to do so would be a major Amendment: it would involve, so far as I can tell from a cursory glance, a great deal of amendment throughout this Bill. It is wholly alien to its purpose, and for that reason I really cannot advise this House to accept this Amendment. I am not without sympathy—I do not think any of us is without sympathy—for the class of tenant to whom the noble Lord has referred, occupying premises at Dulwich; but that is a matter which will have to be considered on a separate occasion if and when a general amendment of the Rent Acts is considered. Although I am not egalitarian by philosophy, I should regard it as a grave injustice if all people who are now occupying premises at a rateable value above that prescribed by the Rent Acts were not to get relief but under this Bill persons who had held long leases were to get such relief. It would be an anomaly which would be intolerable, and would not be tolerated by the people of this country. Accordingly, although one may feel sympathy for that class of person, I cannot advise your Lordships' House to accept this Amendment.
4.23 p.m.
LORD SILKIN: I cannot feel this reply is as satisfactory as the last one. The noble and learned Lord has quoted the reference to premises comprised within the Rent Acts. That is there in order to define the kind of premises to which protection should be given. There is nothing sacrosanct about those words, and if this Committee were desirous of giving protection to a wider section of the community there is no earthly reason why we should be debarred, because of those words, from so doing. I have admitted that this is not the happiest piece of drafting that I have

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attempted in my life. I admit that it is exceedingly difficult to redraft this Bill in such a way as to widen it in the way I had hoped, but if it is desired to do so, I do not think the mere difficulties of drafting should stand in the way. Nor do I think the fact that certain classes have been protected for forty years under the Rent Acts should stand in the way. This is not a protection under the Rent Acts, this is merely a reference to the Rent Acts which defines the scope of the protection to be given to people at the end of their long tenancy. There is no reason why that should be defined by reference to the Rent Acts. That can be defined in any other way desired, either by reference to a very much higher rateable value, or (as I would wish) without
LORD SILKIN: I beg to move this Amendment. I do not think I need say anything about it, because it is really part of the Amendment that we have just been discussing. I beg to move.
any reference to rateable value at all. The noble and learned Lord has not really addressed himself to the merits of this Amendment. He has told the Committee that he has great sympathy, but beyond that he has not addressed himself to the merits of his own difficulty, which is one of machinery. Unless we can get a much more satisfactory and reassuring reply to this, I feel that we shall have to divide the Committee as an indication of the seriousness with which we take this Amendment.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 15; Not-Contents, 66.

CONTENTS

Cork and Orrery, E.

Stansgate, V.

Macpherson of Drumochter, L.

Jowitt, E.

Ogmore, L.

Boyd-Orr, L.

Pethick-Lawrence, L.

Alexander of Hillsborough, V. [Teller.]

Chorley, L.

Shepherd, L. [Teller.]

Henderson, L.

Silkin, L.

Hall, V.

Hungarton, L.

Sinha, L.

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Davidson, V.

Fairfax of Cameron, L.

Furness, V.

Foley, L.

Salisbury, M. (L. President.)

Goschen, V.

Gifford, L.

Leathers, V.

Hampton, L.

Cholmondeley, M.

Monsell, V.

Harvey, L.

Reading, M.

Stonehaven, V.

Hawke, L.

Willingdon, M.

Swinton, V.

Howard of Glossop, L.

Waverley, V.

Jeffreys, L.

Alexander of Tunis, E.

Woolton, V.

Leconfield, L.

Birkenhead, E. [Teller.]

Lloyd, L.

De La Warr, E.

Aberdare, L.

Mancroft, L.

Dundonald, E.

Ailwyn, L.

Monk Bretton, L.

Glasgow, E.

Balfour of Inchrye, L.

Moyne, L.

Haddington, E.

Bennett of Edgbaston, L.

Rathcavan, L.

Lindsay, E.

Brabazon of Tara, L.

Remnant, L.

Morley, E.

Brassey of Apethorpe, L.

Rockley, L.

Munster, E.

Broughshane, L.

St. Junst, L.

Onslow, E. [Teller.]

Carrington, L.

Salter, L.

Rothes, E.

Chesham, L.

Saltoun, L.

Selborne, E.

De L'Isle and Dudley, L.

Savile, L.

Stair, E.

Derwent, L.

Strathcona and Mount Royal, L.

Dovercourt, L.

Stratheden and Campbell, L.

Allenby, V.

Dunleath, L.

Teviot, L.

Bridgeman, V.

Ebbisham, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Amendment moved—
Page 2, line 36, leave out all words after ("tenancy") to end of line 46.—(Lord Silkin.)
On Question, Amendment negatived.
Clause 2 agreed to.
Clauses 3 to 5 agreed to.
Clause 6 [Application of Rent Acts where tenant retains possession]:
4.36 p.m.
LORD MANCROFT: This Government Amendment is designed to secure that the standard rent fixed under Part I of the Bill cannot be increased by a "repairs increase" under the Housing Repairs and Rents Bill, which has recently been through your Lordships' House and your Lordships' Amendments to which, I believe, are being discussed in another place this very day. The standard rent will be an up-to-date rent fixed in the light of the landlord's repairing obligations under the statutory tenancy, and there is therefore no need for a repairs increase. I think your Lordships will appreciate that this Amendment is in the tenant's interest and is wholly equitable. I beg to move.
Amendment moved—
Page 6, line 8, at end insert—
("(5) Subsections (1) and (2) of section twenty-three of the Housing Repairs and Rents Act, 1954, shall not apply where the standard rent of the dwelling-house (within the meaning of that section) is a rent agreed or determined in accordance with the next following section.")—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Settlement of terms of statutory tenancy]:
LORD MANCROFT: This Amendment and the Amendment which follows are purely drafting. They are quite uncontentious, and there is no point to which I think I need to draw your Lordships' attention. So, in order to save time, I will, with the permission of the Committee, move them formally, unless, of course, any of your Lordships desires further information on them. I beg to move.
Amendment moved—
Page 7, line 21, leave out from ("shall") to ("so") in line 23 and insert ("be made during the currency of the landlord's notice proposing a statutory tenancy and not earlier than two months after the giving thereof.").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: As I have indicated, this next Amendment is consequential. I beg to move.
Amendment moved—
Page 7, line 26, leave out paragraph (b).—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8:
Provisions as to repairs during period of statutory tenancy
(3) Nothing in subsection (1) of this section shall be construed as preventing the making of an agreement between the landlord and the tenant for the carrying out by the tenant at his own expense of repairs (hereinafter referred to as "tenant's initial repairs") specified in the agreement.
(5) The matters referred to in paragraph (d) of subsection (2) of the last foregoing section are:
(c) whether any payment for accrued tenant's repairs is to be payable by instalments or otherwise, and if by instalments the number of instalments and the time at which each instalment is to be payable:
4.38 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (3), at the beginning to insert:
"Where the tenant is willing to carry out at his own expense repairs (hereinafter referred to as 'tenant's initial repairs')"
The noble Lord said: This Amendment and the one which follows it should be read together, and with the permission of the Committee I will discuss them together. The purpose of the first Amendment is to permit the tenant to carry out the repairs himself if he so desires. Admittedly, the tenant has, presumably, made default in his obligations under the lease. The Bill, as it stands, however, provides that if the tenant desires to continue his tenancy it is for the landlord to decide what repairs shall be carried out, and for the tenant to pay the cost of those repairs. In default of agreement, the matter goes to the court. The purpose of the Amendment is that in such cases it should be open to the tenant to say that he will do the repairs, and if the landlord agrees and they come to terms as to the basis upon which the repairs shall be carried out, well and good. If, however, they fail to agree, the matter should be settled by the court in the same way as if the landlord were carrying out the repairs. In other words, the purpose of the Amendment is to give the tenant the first option to carry out the necessary

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repairs to the premises at the expiration of his lease. I do not think it requires much advocacy on my part to justify that. They are tenant's repairs, and if the tenant is willing to do them there is no reason that I can see why he should be prevented from doing them, so long as he carries out such repairs as are necessary in order to bring the premises within the definition of good repair as laid down in this Bill. With those few words—and I hope it will not be necessary to amplify them—I beg to move.
Amendment moved—
Page 8, line 11, at beginning insert the said words.—(Lord Silkin.)
THE LORD CHANCELLOR: I think the idea behind this Amendment is a very fair one and it has been supported by cogent arguments. The language which the noble Lord proposes to insert is not exactly apt, but I am willing to accept the idea and I am prepared to move an Amendment on Report stage which will give full effect to his proposal. I hope the noble Lord will find it possible to withdraw his Amendment upon my assurance.
LORD SILKIN: In those circumstances, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD MANCROFT: This Amendment is largely drafting, in consequence of a small error of logic in subsection (5) of this clause. I beg to move.
Amendment moved—
Page 8, line 33, leave out from the first ("the") to end of line 34, and insert ("amount of each instalment (subject to any necessary reduction of the last), the time at which the first is to be payable and the frequency of the instalments;").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 8, as amended, agreed to.
Clause 9:
Principles to be observed in determining terms of statutory tenancy as to repairs and rent
(4) Where it falls to the court to determine the rent which should be the standard rent of the dwelling-house during the period of the statutory tenancy, the court shall have regard in particular—

(a) to the state of repair of the dwelling-house which may be expected to subsist after the completion of the initial repairs (if any) to be carried out by the landlord or, in the
570
absence of any agreement or determination requiring the carrying out of initial repairs, to the state of repair at the time of the court's determination, and

(b) to the terms (other than terms as to rent, as to initial repairs and as to any payment for accrued tenant's repairs) which will have effect as respects the dwelling-house during the period of the statutory tenancy.

and the rent determined by the court shall be the rent which, irrespective of the personal circumstances of the parties, in its opinion would be a reasonable rent for the dwelling-house on a letting in that state of repair and on those terms.
LORD SILKIN LORD SILKIN moved to add to subsection (4):
"there being disregarded any effect on rent of—

(i) the scarcity of similar dwellings in the locality of the dwelling-house,

(ii) any improvement carried out by the tenant or a predecessor in title of his otherwise than in pursuance of an obligation to his immediate landlord."

The noble Lord said: We now come to what is probably the most controversial clause in the Bill. It deals with the rent which will become payable in respect of a dwelling-house to which this Part of the Bill applies at the expiration of tenancy. Broadly speaking, it provides that where no agreement is possible between landlord and tenant, the rent is to be the market rent. In another place there were strong feelings about this matter. It was felt by members of my Party that the market rent was much too high, and that a proper rent would be the rent which would have been payable if the premises had been rent-controlled, as it was suggested they should have been and would have been but for an oversight, and that to put upon the tenant the burden of paying the market rent, when for so many years he had been paying a ground rent, would be an intolerable burden.
I would ask the Committee to appreciate what will be the case under the Bill as it stands. Many tenants are paying at the present time ground rent of £5. £6 or £7 a year. Few of those within the range of this Bill will be paying more than £10 a year. Then, suddenly, this Bill will impose upon them the burden of paying, ten, fifteen or twenty times the rent they have been accustomed to paying. That would be a great hardship on them. This matter has been discussed in another place in

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Committee, on Report and on Third Reading, and the Government have not seen fit to give way. I do not imagine that they will give way to-day on the principle which my colleagues in another place have put forward, and I do not propose to ask them to do so. My own Amendment is one which, in my view, they could more easily accept. It is a compromise, and I believe it is one which most Members of this Committee will agree with in principle.
The first part of the Amendment deals with the scarcity element in the market value of rents. We all know that there is a scarcity element in fixing market rents. That is an element which time may gradually cause to disappear, but at the moment anybody who has premises with vacant possession can get considerably more than the intrinsic value of the rent of those premises. By "intrinsic" I have in mind what the cost would be to build similar premises, a reasonable rent having some kind of relationship between pre-war rent and present rent, having regard to changes in the value of money, and so on. But we all know that in many cases rents have quadrupled since the war and there is a considerable element of scarcity value in any dwelling-house which is available to rent at the present time. The purpose of paragraph (i) is that if the matter goes to the court and the court has to decide on the rent, the court should disregard any effect on rent of "the scarcity of similar dwellings in the locality of the dwelling-house."
In the framework of the Amendment there is a precedent—perhaps "precedent" is the wrong word, because it is contained in Clause 34 of the Bill, where similarly the court is asked to determine the rent in a case where parties fail to agree and the court is enjoined to disregard certain factors. One factor is:
"Any effect on rent of the fact that the tenant has or his predecessor in title have been in occupation of the holding,"
and there are a number of provisions which the court is enjoined to disregard in settling the rent. Therefore, I hope the noble and learned Lord the Lord Chancellor will not gibe me in respect to the form of my Amendment, as he did on a previous occasion.
THE LORD CHANCELLOR: I am sorry if I gibed.
LORD SILKIN: Criticised in a friendly way, then. I have a precedent for the form of this Amendment. There should be no difficulty in the disregarding of certain factors by the court. The other thing the court has to disregard under this Amendment is the effect on the rent of any improvements carried out by the tenant without his being required to do so under the terms of his lease. The Committee will know that many tenants with long leases have considerably improved their premises. Possibly they have put in an extra bathroom, or a garage, and have done all sorts of things by way of improvement and modernisation to their premises which they were under no obligation to do under the terms of their lease. We know perfectly well that they have done it with the knowledge that under the terms of their lease they were obliged to surrender the premises in good condition and even, presumably, to put those parts of the premises they have added equally in good condition.
The Committee on Leaseholds gave consideration to this question of whether the tenant should be compensated for the value of these improvements, and they recommended that he should; but for the reasons which appear in the Government White Paper on the subject, the Government have not been prepared to accept this recommendation. They have said: "The tenant did this with his eyes open; he knew he was going to have to give up the premises. These improvements may not be of any particular value to the landlord; he may not even have wanted them; they may not suit his particular idiosyncracies; he may not want an extra bathroom, garage and so on, even though it may have increased the rental value." Now the purpose of my Amendment is not to argue this point again. For the purpose of this Amendment I am accepting the decision of the Government that the tenant should not be compensated in respect of these improvements, although, curiously enough, in another part of the Bill where it applies to business premises, the tenant is compensated for improvements he has carried out; but I am not suggesting that that should be the case here. What I am asking is that rents should not be increased to the tenant

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while he is a statutory tenant simply because he has improved the premises in such a way as to increase the rental value.
Of course, if the improvements that he has carried out are of such a nature that they do not really improve the premises at all, and certainly do not increase the rental value, then this provision will not apply. The court will disregard any such improvements because there is no increase in rental value. But I am supposing that there is an increase in rental value brought about entirely as a result of the improvements which the tenant has carried out. Is it really fair that he should be called upon to pay an increased rent because he has carried out these improvements. I submit that the landlord will get the benefit of the improvements without paying compensation. That is in the Bill. But it is really going too far to say that in addition to the landlord's getting the benefit of the improvements, and in spite of the recommendation of the Leaseholds Committee, the tenant should also pay an increased rent because of these improvements.
I come back to the scarcity point. What is the case against it? Why should the tenant be called upon to pay over and above a fair rental—I hope we are really trying to get at what is a fair rent—if he holds over? Is not a fair rent a rent which will give the landlord a reasonable return, not an unreasonable one? Surely noble Lords opposite are not justifying any landlord in charging an extortionate rent, a rent he could get, simply because there is a scarcity of similar dwelling-houses in the neighbourhood? If we accept the principle that it should be a fair rent, I ask the Government to lay down that the court should be able to decide what is a fair rent and to eliminate any factor of scarcity. Is it really difficult for a court to do this? While we are imposing so many decisions upon the court, so many things they are called upon to decide—and if noble Lords will look at Clause 34 they will see some of the things the court are asked to determine—I should have thought it would not be at all difficult for the court to form a judgment what is a fair rent, disregarding the element of scarcity.
I hope the noble and learned Lord, who has at last broken the ice in accepting the principle of an earlier Amend-
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ment, will see that this is really a reasonable one. We on this side have gone a long way to accepting the basis on which rents have been settled. We have gone a long way, and we are not moving an Amendment that the rent should be equivalent to a rent-controlled rent. We accept the principle of a market rent, but we ask that the scarcity factor should be eliminated.
Amendment moved—
Page 9, line 39, at end, insert the said words.—(Lord Silkin.)
4.55 p.m.
LORD OGMORE: I think this is another case in which the Government, having started so well, should acquiesce in our desire to see this Amendment, or something like it, embodied in the Bill, because the question of what is a reasonable rent or a market rent is a very difficult matter to define. We are already told in subsection (4) that the court is to disregard the personal circumstances of the tenant and is to have regard to certain other things, such as the state of repair and the terms upon which the premises are held. We ask that the court should also disregard two other matters, not only the personal circumstances but the scarcity value of the premises and ally improvements over and above those which the tenant is obliged to make, and has made, to the premises. I entirely agree with the noble Lord, Lord Silkin on this matter. These are circumstances which the court ought not to take into account.
On the question of scarcity, the court would be acting in line with the general principles which assessment committees, rating committees, and so on, have followed in this country for many years. So far as dwelling-houses are concerned, it has always been the practice to disregard scarcity value in assessing the gross and rateable values. There are eleven million dwelling-houses in this country, not one of which is rated on scarcity value. They are rated on the basis that there is an open market; that there are plenty of houses in the market, and that there are willing landlords and equally willing tenants—a state of affairs that has not existed for many years in this country. So scarcity already applies—or, shall I rather say, the ignoring of scarcity values already applies—through-out

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the whole of the rating system as it applies to dwelling-houses. We ask the Government now to apply it also in this particular case. The other point your Lordships will know better than I do. As regards agricultural holdings, special circumstances are often included as a statutory provision where tenants have made substantial improvements. It seems very hard that where a tenant has made substantial improvements to premises which he need not have made—and the landlord will get the benefit of them in the long run—he should be prejudiced by having to pay more rent than he otherwise would. It seems that unless this particular provision is amended, it will penalise the good tenant and will operate to the benefit of the bad tenant, and I am sure that all your Lordships, in whatever part of the House you sit, would not wish that.
THE LORD CHANCELLOR: The noble Lord said that I have broken the ice—that may be. But I do not think it is quite right that he should then ask me to fall through; and I should fall right through if I conceded this Amendment. I said that I should have to repeat my opening words more than once, and I am afraid that I must do so now. Let us consider where we start. The noble Lord, Lord Silkin, and the noble Lord, Lord Ogmore, have both referred to the unfortunate tenant. This Bill is a marvellous charter for the tenant. Just consider what the position of the so-called unfortunate tenant would be but for this Bill: he would have to go out when the lease terminated; that is what he expected, and it was upon that footing that he got his lease. Your Lordships all know that leases have changed hands in the market over and over again upon a value fixed by reference to the fact that at the term date the tenant would have to go, and would have to meet the obligations of the lessee under the lease. That is the position of the lessee; and anything which departs from that is a concession to him and is his good fortune. It is really a misuse of language to speak of the "unfortunate tenant," when all that is happening to the tenant here is that he is getting substantial benefits and relief from his obligation.
Under the provisions of this Bill, the tenant will be enabled, if he wishes, to
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stay on. That gives him a security of tenure which, above all things, he desires. If he is to stay on, is it not right that he should stay on upon terms which are fair to the landlord, who, but for the provisions of this Bill, would obtain possession of the premises—and, I may say, possession of premises which have been repaired in accordance with the repairing covenants in the lease? Everything that departs from that is a concession. Upon what terms ought the lessee to stay on, so far as rent is concerned. This question of scarcity is no doubt one of great difficulty. But, in spite of what the noble Lord, Lord Ogmore, says, we are advised—and I believe it to be absolutely right to say this—that it would be impossible to tell the court to disregard scarcity as a single factor in the element of market value of the premises.
I think I have warranty for that statement in this: that when, in 1949, the Government of which the noble Lords were members set up tribunals under the Landlord and Tenant (Rent Control) Act, 1949, when the question of scarcity must have been very much in their minds, what they directed the tribunals to do was to assess a "reasonable rent." Those are the very words which we have adopted in this Bill, because we think that what the tenant ought to pay, and what the landlord is entitled to, is a reasonable rent in all the circumstances. We are happy to find ourselves so completely in union with noble Lords opposite upon that point. We think, as I expect they thought (for I cannot believe that the point was absent from their minds) that it is sufficient for the tenant to tell the court—it does not matter whether it is a court or a rent tribunal—to fix a rent which is reasonable in all the circumstances. That is what we invite the court to do here, just as that is what noble Lords opposite required the rent tribunals to do under the Act of 1949.
With regard to the second point, I make much the same observations. A tenant who has effected improvements, so-called—it is often difficult to determine whether or not they are, in fact, improvements—has done so with the full knowledge that when the term date arrives he will have to give up his premises; and he has thought it worth while to make those improvements upon

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that footing. But apart from the general equity of this, there is a further point. We believe that it would be quite impracticable to give effect to this Amendment, even if we wished to do so. These leases have, ex hvpothesi, been in existence for nearly 100 years—99 years is the usual term for a building lease. How in the world are you to find out what improvements have been effected in buildings over the course of 99 years? Not only must you find out what has been done, but you must find out what was the condition of the premises before it was done; and to ascertain the difference between the market value and the letting value of the premises before events which have happened over the best part of 100 years is well nigh impossible. This proposal is quite impracticable, even if it is theoretically just, and in spite of the plea which noble Lords make, I cannot accept this Amendment. The noble Lord, Lord Silkin, referred to certain examples in the later part of the Bill where we do lay down that certain elements are to be taken into consideration in fixing the rent. We are again advised that that is something which can fairly be done, and we are prepared to do it. This falls into a different category altogether, and I am bound to resist the Amendment.
LORD SILKIN: I can assure the noble and learned Lord that if he accepted this Amendment he would not fall right through at all; and the more I heard him speak, the more I was confirmed in that view, because we are not really very far apart. Let me take the easiest part of the answer of the noble and learned Lord first—namely, the difficulty in which the court would be placed in assessing these factors. After all, the court has to go on evidence—nobody knows that better than the noble and learned Lord. It would be for the tenant to establish, for instance, what improvements had taken place. If they took place a long time ago, then the tenant would have to give evidence of them; he would have to satisfy the court that they were improvements which he had not been required to make, and which had increased the value of the premises. If he could not establish that, then no case would arise. If the noble and learned Lord were otherwise willing to accept this Amendment, I should not have thought the difficulties which he envisages here would be a reason for
578
rejecting it. So with the scarcity value, these things would have to be dealt with on evidence. If the tenant alleged that the rent he was being asked to pay included an element of scarcity value, he would have to call people who were well versed in these matters to say what would be a reasonable rent, and how much of the rent he was being asked to pay represented scarcity value. The courts are called upon to deal with far more difficult matters than that, and, on the whole, do so with great success. Therefore, I cannot accept the argument that it is the difficulties of machinery which stand in the way.
The noble and learned Lord has really taken his stand on the equity of this matter, and here I do join issue with him. The whole basis of this Bill, of the Landlord and Tenant Act, 1927, and of many other Statutes that we have passed—as I said on Second Reading, to the credit of the Conservative Party—is that there is a need, in the interests of equity, for interference in contracts which have been entered into by two parties. Every argument that the noble and learned Lord put forward against this Amendment could have been put forward, and no doubt was put forward (it would be an interesting piece of research to see the arguments that were put forward) against the Landlord and Tenant Act, 1926. I have no doubt that the argument about sanctity of contract, about two people having entered into the contract with their eyes open, and knowing what they were to expect at the end of it, was brought out at the time. Nevertheless, the Government of the day decided to pass the Landlord and Tenant Act, to give protection to tenants at the expiration of their tenancies—and, indeed, to compel the landlord to charge a fair rent, and, failing that, to give the tenant reasorable compensation in respect of his goodwill. All that was passed, in spite of the fact that people had entered into these contracts with their eyes open and knew What they wore doing.
As the noble and learned Lord knows better than anybody in this House, other similar Acts have been passed—the Law of Property Act, 1925, and the Leasehold Property (Repairs) Act, 1938—all interfering with this sanctity of contract. Indeed, we are engaged at the present moment in a variety of other measures, for instance, the Hire-Purchase Bill,

579
which was before your Lordships' House recently. That Bill, which commands Government support, interferes with the relationship between the person who hires and the person who rents. The Moneylenders Act is another example. The Statute Book is full of legislation designed to regulate the relationships of two parties who are deemed to have entered into contracts freely. But, of course, the Legislature has always recognised that parties do not necessarily enter into it upon equal terms. A person who is seeking premises may be handicapped in dealing with a landlord, and other persons may be similarly handicapped. Because of the greater power that is deemed to lie in the hands of one of the parties, the Legislature steps in in order to equalise the balance. This Bill does the same thing.
In my judgment it is wrong to describe what is being provided for tenants as a concession. It is not a concession: we regard it as a simple piece of justice. Many of my noble friends have gone further than we are doing on this Bill this afternoon, but we regard the giving of security of tenure as a simple piece of justice. If the landlord is in a position to extort the maximum rent that he could get from anybody if he put the premises on the market, what is the concession that the noble and learned Lord is talking about? Where does the concession come in? It is true that the landlord might have sold the premises, but he would still have sold them on the basis of scarcity value. It seems to me that he is getting the rent on the basis of scarcity value. The concession is not very great, and a great many tenants will not be able to take advantage of it. As regards the question of improvements, I feel that the case there is even weaker. I cannot see why a tenant who has carried out improvements which are of value, and which are ascertained to be of value, should, nevertheless, have to pay an increased rent because of the improvements. I feel that we have not had satisfactory consideration of this Amendment. My noble friend Lord Ogmore also wants to say a word, but unless he can move noble Lords opposite more than I have succeeded in doing, I feel that we shall have to test the opinion of the House on this matter.
LORD OGMORE: I do not expect for one moment that I shall be able to do better than my noble friend Lord Silkin, because it seems to me that he has made an absolutely unanswerable case. But there are one or two observations that I should like to put to the Committee. The first is that I, too, must join issue with the Government, because I do not regard their thesis as being a reasonable one. They say, in effect, that because they are giving the tenant something, he has no right to complain about anything. The mere fact (they say) that one tenant may be in a different position from another—for instance, he may have spent a great deal more money on his premises than his neighbour has done—is no concern of theirs at all; it does not come into the matter. It is a question that they cannot go into. They cannot exclude either improvements or scarcity value. Yet the court is entitled to regard both the scarcity value and the improvements that the tenant has made.
I am quite certain that all your Lordships who have served in the Armed Forces—and I imagine that nearly everybody has done that—know that that would not go down at all well in any regiment, battery, ship, squadron or any other unit. If you say to two Service men, soldiers, airmen, or sailors, under different conditions, "We are going to give you a certain consideration, irrespective of what your rank may be, whether you are sergeant or private; irrespective of what your conduct might have been, you are going to be treated exactly alike," they would soon object. In fact, as we know, the tenants are going to object strongly to the provisions of this Bill. I ask your Lordships to put yourselves in the position of a householder who has spent a large amount on the premises. Let us take the case of a doctor who has erected a surgery and a dispensing room, and perhaps a small operating theatre on his premises, at great expense to himself. He need not have done it, but he has done, and has made a very desirable house. Then suppose that his neighbour next door has done nothing—the only things that have grown in his garden have been weeds. The premises are not in a good condition, and nothing has been spent on them at all. He has just paddled along and done next to nothing

581
ever since he has been in possession of the premises.
What are those two people going to say about this Bill? Let us assume that they are both members of the Primrose League—if that is open to men, as I think it is. They are both staunch Conservatives; they pay their subscriptions; they have the greatest admiration for Lord Woolton; they vote for their Conservative Member, and they are among the many who applaud Lord Mancroft when he goes down, as he tells us, to speak in the constituencies of Members of another place. What will the doctor say when he finds that, because throughout the years he has spent large sums on his house, his rent may be two or three times as much as that of the man who grows nettles and weeds next door? All I can say is that the Conservative Party will lose a lot of adherents. I do not mind that at all, but I do not see why even Conservatives should not have justice, and I submit here that the Conservatives, as well as the members of the
Clause 9 agreed to.
other Party, are going to be lamentably treated under this Bill unless my noble friend's Amendment is carried.
THE LORD CHANCELLOR: The noble Lord invited me to say whether he has persuaded me. I am afraid he has not. I shall not retaliate, as he did upon the noble Lord, Lord Mancroft, by suggesting that it was in any spirit of levity that he referred to Lord Woolton and the Primrose League. I am sorry, but I cannot possibly accept this Amendment. Nothing could be fairer than that a tenant who, but for this Bill would have to go, should be given security of tenure at a rent which is reasonable in all the circumstances. Those are the precise words adopted by noble Lords opposite in directing the tribunal set up under the 1949 Act what rent they were to impose. In this respect we follow their admirable example.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 18 Not-Contents, 64.

CONTENTS

Glasgow, E.

Boyd-Orr, L.

Ogmore, L.

Jowitt, E.

Chorley, L.

Pethick-Lawrence, L.

Listowel, E.

Henderson, L. [Teller.]

Rea, L.

Lucan, E. [Teller.]

Hungarton, L.

Shepherd, L.

Macpherson of Drumochter, L.

Silkin, L.

Hall, V.

Milner of Leeds, L.

Sinha, L.

Stansgate, V.

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Leathers, V.

Hawke, L.

Margesson, V.

Howard of Glossop, L.

Buccleuch and Queensberry, D.

Monsell, V.

Jeffreys, L.

Stonehaven, V.

Killearn, L.

Cholmondeley, M.

Swinton, V.

Leconfield, L.

Waverley, V.

Lloyd, L.

Birkenhead, E. [Teller.]

Woolton, V.

Mancroft, L.

De La Warr, E.

Merthyr, L.

Dundonald, E.

Ailwyn, L.

Monk Bretton, L.

Haddington, E.

Balfour of Inchrye, L.

Moyne, L.

Lindsay, E.

Brassey of Apethorpe, L.

Rathcavan, L.

Morley, E.

Broughshane, L.

Remnant, L.

Munster, E.

Carrington, L.

Rennell, L.

Onslow, E. [Teller.]

Chesham, L.

Roborough, L.

Rothes, E.

Coleraine, L.

Rockley, L.

Selborne, E.

De L'Isle and Dudley, L.

St. Just, L.

Stair, E.

Derwent, L.

Salter, L.

Dunleath, L.

Saltoun, L.

Bridgeman, V.

Ebbisham, L.

Savile, L,

Buckmaster, V.

Fairfax of Cameron, L.

Strathcona and Mount Royal, L.

Davidson, V.

Gifford, L.

Stratheden and Campbell, L.

Furness, V.

Hamilton of Dalzell, L.

Teviot, L.

Goschen, V.

Hampton, L.

Webb-Johnson, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 10 [Provisions as to liabilities under tenant's covenants in former lease]:
LORD SILKIN LORD SILKIN moved to add to the clause:
"(3) If on the termination of the former tenancy a tenant does not retain possession of the dwelling-house under this Act the tenant shall not be required to carry out any repairs in excess of what is required to bring the dwelling-house into good repair as defined by section 9, subsection (2) hereof and any liability whether of the tenant or of any predecessor in title of his arising under the terms of the former tenancy shall be extinguished.
The proviso to subsection (1) of this section shall apply to this subsection."
The noble Lord said: I beg to move the Amendment standing in my name. Clause 10 is the clause which deals with the liability of a continuing tenant for the repairs of the premises. His liability under the lease is normally the onerous one of putting the premises into substantially as good condition as they were in when the premises were first built. Everyone has recognised that, to enforce this contract, into which both parties are deemed to have freely entered with their eyes open, knowing exactly what was going to come at the end of it, would be a hardship on the tenant. There has been imported into the Bill a lesser liability of the tenant to put the premises into good repair. "Good repair" is defined as making the premises merely structurally sound and in reasonable repair having regard to the age, the locality, and so on. Indeed, it is a definition about which we had some discussion in connection with another Bill. But, admittedly, it effects a considerable improvement in the tenant's liability; it is a much lesser obligation than the normal obligation that he would be required to fulfil. I have no complaint about that at all.
But exactly the same considerations which have induced the Government to give relief to a tenant who continues in occupation ought, in my view, to apply to a tenant who does not continue in occupation. For one thing, a great many tenants will not continue in occupation because this so-called reasonable rent which they will be required to pay, which includes an element of rent in respect of which they have themselves contributed by improving the premises, will be more than they can afford. In such a case they will lose the benefit of the provision
584
that they will be called upon to be responsible only for good repairs. I really fail to understand why there should be this discrimination in respect of repairs as between the tenant who remains and takes advantage of this Bill and the tenant who does not. One gets a very considerable concession; the other not only finds himself unable to afford to continue as a tenant, and loses the security, but also finds himself burdened with the higher obligation to carry out the full repairing covenants.
Of course, if anyone is shrewd and is so advised, he will take advantage of this Bill, pay the rent, get the repairs settled on the lower basis, and then give a month's notice and get out; by that means he will escape the higher liability. But do we want to encourage that sort of way out? If a tenant has that way out, surely he should be given a much more honourable way out, by being relieved of this extra burden and being asked to put the house into good repair, and that is all. Normally, I think I can see the case that can be put against an Amendment. In this instance, however, I frankly fail to see what is the argument against it. Therefore, I will content myself with saying what I have said and moving the Amendment, and I hope that the noble and learned Lord will admit that in this case there really is no answer to the Amendment. I beg to move.
Amendment moved—
Page 10, line 20, at end insert the said subsection.—(Lord Silkin.)
THE LORD CHANCELLOR: I will do my best to give an answer. This is, of course, a large question—how far a tenant should be relieved of his obligations to repair which are contained in his lease or tenancy agreement. That is a matter which was expressly referred, with other questions, to the Committee to which so much reference has been made. The question was in this form:
"Whether the rights of a landlord to impose and enforce covenants to repair should be further restricted, and in what manner."
I emphasise the words "further restricted," because already by the Landlord and Tenant Act, 1927, and the Leasehold Property (Repairs) Act. 1938, the position of the tenant had been substantially alleviated. That was the question that was asked, and the Committee reported unanimously that there should be

585
no change in the law. As your Lordships know, amongst those who were members of the Committee and subscribed to that part of the Report were two members of the Party opposite—namely, the former Solicitor General and Mr. Leslie Hale; they were party to that recommendation that there should be no change in the law. They said:
"It does not seem to us that any further restriction on the extent of the damages recoverable by the landlord for breach of"—
repairing—
"covenants could reasonably be imposed."
It is a little difficult for noble Lords opposite to say that there is no answer to the case for granting further relief to tenants, and that if relief is granted to such tenants as we are dealing with in this Bill, there is no reason why relief should not be granted to all tenants under all leases. There are leases of 99 years and 66 years that we are dealing with to-day—long leases. Equally, there are leases of 21 years or less, which do not otherwise fall within the scope of this Bill, but in respect of which the tenants could ask precisely the same relief.
I agree with the noble Lord that in a case of this complexity there are bound to be anomalies, and I see the force of what he has said. But I do not think we should be right, in view of the unanimous expert opinion of the Committee which was appointed, representing all shades of Party opinion—and, morèover, the opinion of men learned in the law, and experienced in this particular branch of the law—in departing from their unanimous opinion. It is the fact, not to be forgotten, that under those Acts to which I have referred the position of the tenant is substantially relieved. I need not go into details about it—they are as well known to many of your Lordships as they are to myself, probably better; but I do not think that the time has come to grant to this particular class of tenants, as distinct from other tenants, further relief in this matter. I have dealt with the matter shortly, but your Lordships who are interested will see the whole matter set out in the Committee's Report, the arguments for and against, and their conclusion. It would not be right, I think, to occupy the Committee at considerable length this evening in saying anything further about the matter. I am sorry not to be able to accept the
586
Amendment which is proposed, but I am quite unable to do so.
LORD SILKIN: Now that we know the reasons which have prompted the noble and learned Lord to reject this Amendment, I should like to say another word or two. He rests his case almost entirely on the fact that there has been this recommendation of the Leasehold Committee—
THE LORD CHANCELLOR: I am sorry if that has appeared to be so. I ought not to put it in that way. It was a unanimous Report of the Committee, and I agree with their reasons and with their conclusion. But I do not base my case simply on the fact that they have so reported, cogent as that is, but on the fact that I agree with their reasons and with their conclusion.
LORD SILKIN: Certainly the noble and learned Lord devoted the greater part of his answer to the fact that this was the unanimous recommendation of the Committee. But the noble and learned Lord has not always taken the view that a unanimous recommendation of a Committee, or even a substantial majority view, should necessarily be accepted. I think that your Lordships are entitled to have a more reasoned case than merely to have offered to them the views of this Committee. Moreover, in this particular matter the Government have departed from the recommendations of the Leasehold Committee. The Committee saw no reason at all for interfering with the repairing covenants in leases, but in Clause 10 the Government are interfering with those covenants, by replacing the normal covenant with an obligation to put the premises into good repair. That is a much lesser obligation, as I endeavoured to explain earlier, and that is a substantial interference with the ordinary agreement between the landlord and tenant. Therefore, with great respect to the noble and learned Lord, the Government are themselves departing from the Committee's unanimous recommendations. Since they are so departing, I am not asking them to go any further than they have gone in connection with the obligation to put premises in good repair. All I am asking is: why have they discriminated in favour of the tenant who continues? Why do they give him the opportunity of a lesser obligation,

587
while the tenant who does not continue (very likely because he cannot afford to do so) must, they insist, carry out the full obligation?
I could have understood it, although I might not have agreed, if the Government had said to all tenants, "Here is your obligation; you are responsible for the full repairs, and you have got to carry them out." But the Government do not say that; they do not accept the unanimous recommendation of the Committee. They do give relief to tenants who stay on, but they fail to give relief to tenants who are not able to take advantage of the provisions of this Bill. That is what I still fail to understand. It is not a question of the merits of the matter at all, for the merits have long gone. The Government themselves have departed from the merits; but they do discriminate in this quite inexplicable manner, and I should be very grateful if the noble and learned Lord can explain why they differentiate between a tenant who remains on and a tenant who does not remain.
5.43 p.m.
LORD MILNER OF LEEDS: I have not had the opportunity of hearing the whole of this debate, but where a tenant decides to go out for some reason—probably for the reasons advanced by my noble friend: because he cannot afford to pay the rent and to carry out the various obligations which may be imposed upon him by the tribunal—one would have thought he was entitled to greater consideration than the tenant who is able to continue. The tenant who has to go out and has, presumably, to find other premises is to be burdened with these obligations in respect of repairs. One would have thought that, if any relief was to be given, it ought to be given to the outgoing tenant. The noble and learned Lord has not advanced any reasons, either those given by members of the Committee or those held by the Government, and I should certainly have thought, on the grounds of natural justice alone, that the outgoing tenant, who is bound to be in a difficulty and who is going to be saddled with considerable expense, in addition to the burden which will obviously rest upon him to obtain other premises, should be entitled to the same benefit as is given by the Bill to the continuing tenant.
THE LORD CHANCELLOR: If noble Lords opposite will bear with me I will add a very few words in answer to what has been said. The tenant who stays on under a statutory tenancy is in a totally different position from the tenant who gives up. The tenant who stays on under a statutory tenancy is under an obligation to do certain repairs, repairs sufficient to put the house into a state of good repair. The tenant who goes out has the protection of the law as it at present stands which is very substantial; for instance, the tenant may be the tenant of premises which the landlord re-occupies in order to develop. If that is so, under the Act of 1927 he is under no obligation to do any repairs at all, and his liability is limited, not by what is necessary to put the house into good repair—which is substantial—but to the damage which can be proved to have been suffered in respect of the reversion. Those are advantages which the tenant who does not remain in possession gets, and which the tenant who takes such a statutory tenancy does not get. With great respect to the example given by the noble Lord, Lord Silkin, a man who is shrewd or well advised and who, in order to avoid his obligations, takes a statutory tenancy and then goes out, may find himself let in for a sum in respect of initial repairs necessary to put the property in a state of good repair which would be far greater than that which would fall upon him if he rested upon the relief given by the Act of 1927. So the two things are not strictly comparable at all. The tenant who stays on gets the benefit of this Act. The tenant who goes out gets the substantial benefits of the Acts to which I have referred and in respect of which the Leasehold Committee have noted (and I do not want to put too much upon that) that there is no reason why he should get further relief. I am sorry that I cannot add anything further. It seems to me that common justice is done here both to the tenant who stays on and to the tenant who goes.
LORD SILKIN: Greatly daring, I would venture to disagree with the noble and learned Lord in his interpretation of the law. Obviously, the Committee do not wish to hear a legal discussion on this matter, and if the noble and learned Lord is willing to look at the matter, again in the light of anything that I may be

589
able to put before him. I shall be quite prepared not to press this Amendment. I do respectfully remain unconvinced by his suggestion that the tenant who leaves and does not take advantage of this Bill is better off.
THE LORD CHANCELLOR: One cannot generalise. He may be better off—in many cases he may be much better off; but he will not always be better off. If I am not interrupting the noble Lord I would say that this is a matter which we have considered most carefully and we cannot give him any hope that upon
Clause 10 agreed to.
Clauses 11 and 12 agreed to.
Clause 13:
Landlord's application for possession
(2) Where the ground or one of the grounds for claiming possession specified in the landlord's notice was that mentioned in paragraph (a) of subsection (1) of the last foregoing section, then if on such an application the court is satisfied that the landlord has established that ground as respects premises specified in the application, and is further satisfied,—
the court shall order that the tenant shall, on the termination of the tenancy, give up possession
further reflection we shall be able to accept any other view. If the noble Lord wants to divide the House he must do so now.
LORD SILKIN: I was going to make an offer to reconsider this. I think the noble and learned Lord is basing his decision upon mistaken grounds, but if the Government have made up their mind there is nothing more to say.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 14; Not-Contents, 57.

CONTENTS

Jowitt, E.

Boyd-Orr, L.

Ogmore, L.

Listowel, E.

Henderson, L.

Pethick-Lawrence, L.

Lucan, E. [Teller.]

Hungarton, L.

Shepherd, L. [Teller.]

Macpherson of Drumochter, L.

Silkin, L.

Hail, V.

Milner of Leeds, L.

Stansgate, V.

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Furness, V.

Hawke, L.

Goschen, V.

Howard of Glossop, L.

Salisbury, M. (L. President.)

Leathers, V.

Jeffreys, L.

Margesson, V.

Killearn, L.

Cholmondeley, M.

Monsell, V.

Leconfield, L.

Swinton, V.

Lloyd, L.

Birkenhead, E. [Teller.]

Mancroft, L.

De La Warr, E.

Ailwyn, L.

Merthyr, L.

Dundonald, E.

Balfour of Inchrye, L.

Monk Bretton, L.

Glasgow, E.

Brassey of Apethorpe, L.

Rathcavan, L.

Lindsay, E.

Broughshane, L.

Remnant, L.

Morley, E.

Chesham, L.

Rennell, L.

Munster, E.

Coleraine, L

Rockley, L.

Onslow, E. [Teller.]

De L'Isle and Dudley, L.

Salter, L.

Rothes, E.

Derwent, L.

Saltoun, L.

Selborne, E.

Dunleath, L.

Savile, L.

Stair, E.

Ebbisham, L.

Strathcona and Mount Royal, L.

Fairfax of Cameron, L.

Bridgeman, V.

Gifford, L.

Stratheden and Campbell, L.

Buckmaster, V.

Hamilton of Dalzell, L.

Teviot, L.

Davidson, V.

Hampton, L.

Webb-Johnson, L.

Resolved in the negative, and Amendment disagreed to accordingly.

of all the property then comprised in the tenancy.
6.0 p.m.
LORD SILKIN LORD SILKIN moved in subsection (2), at the end of paragraph (b) to insert:
"and
(c) that suitable alternative accommodation will be available for the tenant at the date of termination of the tenancy."
The noble Lord said: Clause 13 deals with the case where a landlord seeks to resume possession of a dwelling-house on the ground that he wants to carry out redevelopment and that it is necessary, in order to carry out the redevelopment, that he should have possession of the house. In moving this Amendment, I

591
am not objecting to a landlord obtaining possession on that ground, but I think that the safeguards to protect a tenant against a landlord who acts not in good faith, or who makes this a pretext for getting possession, are not so strong as they might be. There is an Amendment later on which seeks to tighten up the safeguards, particularly where the tenant has been induced to give up possession on the ground that the landlord seeks to redevelop and subsequently does not do so. I think that in such a case the landlord should be required to compensate the tenant. But I am not arguing that on this Amendment. I merely put forward the proposal that where the landlord genuinely requires possession for the purpose of carrying out redevelopment he should provide the tenant with suitable alternative accommodation. It seems to me that that is a reasonable requirement.
Presumably, the landlord is carrying out this redevelopment because it is going to be a profitable undertaking for him. He is relieved of his obligation to keep on the tenant, he obtains vacant possession, and it seems to me that if it is merely a case that the landlord wants to carry out a profitable undertaking, the tenant ought not to be deprived of the protection which he would otherwise have under the Bill. The ability to obtain possession is entirely for the benefit of the landlord—I am quite prepared to sit down until the noble Marquess has finished his conversation. We are dealing with a highly technical subject, and I hope the noble Marquess will not mind my saying that it is very distracting to have a conversation audibly going on. The provision in this clause is entirely for the benefit of the landlord, enabling him to make a greater profit than he otherwise would. It enables him to escape from the obligation to provide the tenant with the continuation of his tenancy. Therefore, it seems to us reasonable that he should provide the tenant with alternative accommodation. This is by no means a unique obligation. The noble and learned Lord will know that in a later provision of the Bill a similar obligation is placed on the landlord in the case of business premises. In certain circumstances, if he wants the premises, he can get them by offering
592
alternative accommodation. And, of course, there are similar provisions in the Rent Restrictions Acts. If it is the intention to make this Bill in any way analogous to the Rent Restrictions Acts and give the tenant the same sort of protection, I submit that in a case like this it is not unreasonable that the landlord should be required to give the tenant suitable alternative accommodation. I beg to move.
Amendment moved—
Page 11, line 44, after ("circumstances") insert ("and
(c) that suitable alternative accommodation will be available for the tenant at the date of termination of the tenancy.").—(Lord Silkin.)
EARL JOWITT: In this battle of giants between my noble friend Lord Silkin and the noble and learned Lord, the Lord Chancellor, both giants in the knowledge of this branch of the law, anyone else hesitates to rush in, but I should like to make my little plea here. My belief is that the vast majority of landlords are extraordinarily decent people, but there are a small number who are not in that category and bring disrepute upon the whole body. I believe we may fairly take what the good landlord would do as a test of what we might reasonably enact. If the good landlord had a chance of developing his property and had a sitting tenant, I do not believe he would be content to turn that sitting tenant out unless and until he could offer him some sort of alternative accommodation. I think he would say that unless he could look after his tenant, who may have been with him for years, he must hold up his redevelopment. That is all we are asking here. If the ground on which the landlord is asking for possession is that he wants the property for redevelopment and he is going either to demolish or reconstruct the whole or part of the premises, then he ought to be able to say to the tenant that he had some alternative accommodation. That ought to be a requirement of the law. Without any great technical knowledge of this matter, I submit to your Lordships that that is what a good landlord would desire to do and would do. Therefore it does not seem to me to be wrong to put it into the requirements of this Bill.
LORD MANCROFT: After the observations of the noble and learned

593
Earl, Lord Jowitt, about giants, obviously under the impression that my noble and learned friend would reply, he will observe that a certain justifiable nervousness has crept into my voice. This Amendment, which superficially is an attractive one, has the effect of putting upon the landlord the obligation of providing alternative accommodation when he wants property for redevelopment. But there are two objections, so far as I can see. For the first I will apologise to the noble Lord, Lord Silkin, because in his opening remarks he said he hoped he would not be taken to task for faulty draftsmanship which more expert pens could put right, but I think this objection is so fundamental that it may not be even faulty draftsmanship—if it is. I apologise in advance. The noble Lord has not put down any Amendment to leave out Clause 12 (1) (a). If noble Lords would be good enough to look at that paragraph, they will see that a landlord may apply to the court for possession on the ground:
"(a) that for purposes of redevelopment after the termination of the tenancy the landlord proposes to demolish or reconstruct the whole or a substantial part of the relevant premises;".
I should have thought, frankly, that Lord Silkin's Amendment makes nonsense of Clause 12 (1) (a). The availability of alternative accommodation is already a ground for obtaining possession under the Rent Acts after a statutory tenancy has begun and, under the Third Schedule of this Bill, before it has begun. If, therefore, a landlord can provide such accommodation, he has no need to make use of Clause 12 (1) (a). Only when the landlord who proposes to redevelop is not able to provide alternative accommodation does he need this provision.
That takes me to the second objection, which is a fundamental one. I agree with the noble and learned Earl, Lord Jowitt, that our objective is the standard of the good landlord. We must during this debate emphasise that point on both sides of the Committee. No doubt on many occasions a good landlord who desires to develop, and wishes to pull down a whole street or block, will do his best to provide alternative accommodation for those tenants with whom he wishes to remain in contractual obligation. But this is too heavy a burden on even a good landlord who genuinely
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seeks to redevelop. We say this because we place so much importance on the facilities for redevelopment of residential premises, most of which, of necessity, must now be a century old. We feel that the landlord who genuinely requires premises for that purpose should not have to provide alternative accommodation, although, of course, it is seriously hoped that he will do what is possible. We do not think that is a fair burden to put ort the landlord. It is a question of two opposing interests, as so often it is in this Bill. It is to emphasise this need for redevelopment that we desire to relieve the landlord of this burden. For these two reasons—one a technical reason and the other a practical policy reason—we cannot accept this, on the face of it, attractive Amendment.
LORD SILKIN: I cannot understand the second reason, where there might be a hardship on the tenant and a burden on the landlord and the Government choose to sacrifice the tenant to the interests of the landlord.
THE LORD CHANCELLOR: To the public interest—for redevelopment.
LORD SILKIN: It does not follow. The landlord is not developing in the public interest: he is developing in his own interest. I ask noble Lords opposite to bear in mind that it is not necessary to establish public interest. Under Clause 13, a person who wants to redevelop does not have to prove that it is in the public interest that he should redevelop—that is not one of the burdens put on the planning authority. So long as there is no particular reason why he should not redevelop, he would be allowed to do it from a planning point of view. If it does riot conflict with the plan he will get his permission.
As for the noble and learned Lord's assumption that every piece of redevelopment is in the public interest, I would profoundly disagree with him. This redevelopment is primarily in the interests of the landlord. It may be that the landlord's interest coincides with the public interest, and it may be that it does not. I admit that if it conflicts with the public interest he probably will not get planning permission, but in the majority of cases pubic interest is not involved. It is the landlord's interest. And I understand

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that in this case, where there is hardship on the tenant and burden on the landlord, the Government choose to leave the hardship on the tenant and to sacrifice the tenant in favour of the landlord.
THE LORD CHANCELLOR: No; that is not how I see it.
LORD SILKIN: On the first point, a technical point, the noble Lord, Lord Mancroft, has not convinced me. I am prepared to admit that the Amendment may be in the wrong place; that it would come better in Clause 12 than in Clause 13, but I do not think that matters. In Clause 13 we are dealing with the conditions that have to be satisfied by the landlord in order that he may be able to resume possession, and it seems to me quite logical that one of those conditions should be that he has made certain plans and has taken steps to make it quite clear that he is serious in his plans. He must be wanting to redevelop, and it seems to me quite logical to say that he must also be able to provide suitable accommodation. If this Amendment is in the wrong place I am prepared to put it in the right place, and to be guided as to where it should go and the form it should take. Undoubtedly there is a right place for it if the Government want to accept it. I am sure that the true reason is that there is a balance or conflict between the interests of one party and the interests of the other, and the Government prefer the interests of the landlord as against the interests of the tenant.
LORD MANCROFT: I cannot let the noble Lord sit down with that remark unchallenged. It is not a very fair remark, and well he knows it. There is no question in this Amendment of a clash between the landlord and the tenant, and of the Government's choosing the side of the landlord. This Bill merely accentuates and facilitates the Government's desire to improve and develop residential property—there is no clash; and that is the overriding interest. As regards the technical point between him and myself as to where the Amendment should come, that is purely academic and we need not pursue it.
On Question, Amendment negatived.
Clause 13 agreed to.
Clause 14 [Provisions where tenant not ordered to give up possession]:
LORD MANCROFT: This Government Amendment makes a slight change in the machinery of Part I. It is consequential on a series of Amendments made on Report in another place which substantially recast the timetable for negotiation and application to the court. Broadly speaking, the effect is that where less than six months' notice has been given, negotiations can continue until the end of three months from the giving of the notice. It merely allows a little more time for negotiations and it is for the advantage of all concerned. It is quite uncontentious I beg to move.
Amendment moved—
Page 13, line 30, at end add—
"((6) Where by virtue of subsection (3) or (5) of this section the landlord gives a landlord's notice proposing a statutory tenancy which specifies as the date of termination a date earlier than six months after the giving of the notice, subsection (2) of section seven of this Act shall apply in relation to the notice with the substitution, for references to the period of two months ending with the date of termination specified in the notice and the beginning of that period, of references to the period of three months beginning with the giving of the notice and the end of that period.")—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Protection of Rent Acts not to be lost on coming to an end of superior long tenancy at a low rent]:
LORD OGMORE LORD OGMORE had given notice of an Amendment to leave out Clause 15 and to insert the following new clause:
"15. Where a sub-tenant of premises to which this Part of this Act applies is in occupation of them at the date when the term granted by the superior tenancy expires and where the sub-tenant takes advantage of his rights under this Act and continues in occupation of the premises then so far as the tenant is concerned provided he does not occupy any part of the said premises the covenants on the part of the lessee contained in the superior tenancy shall be deemed not to apply to the tenant or to anyone claiming through or under him."
THE CHAIRMAN OF COMMITTEES: I understand that Amendment No. 14 should read in these terms: "After Clause 14 insert the following new clause."
THE LORD CHANCELLOR: The noble Lord will forgive me if I intervene. I have been very much puzzled about this Amendment. To leave out Clause 15, as is proposed by the Amendment on the Marshalled List, seems to me quite impossible. I have been studying this clause at length with a view to finding out what was in the minds of the noble Lords opposite, and I have been trying to read the new Clause 15 as a substitute for the old Clause 15. I really do not know quite where I am, and I cannot promise that I have given proper consideration to this in its new aspect. If the noble Lord will enlighten us I shall be only too glad, but I think, with great respect, that I shall have to tell him that I am not in a position to accept it. I will consider it if he will move it again on Report, but without undertaking that I will consider it favourably. He has put me in great difficulty.
LORD OGMORE: As I drafted this Amendment it was headed "New Clause." I do not myself propose to leave out Clause 15, but somehow or another "New Clause" has been omitted and new words "leave out Clause 15" have been inserted. I appreciate the noble and learned Lord's difficulty, and perhaps it would be for the convenience of the noble and learned Lord if I explained it.
THE LORD CHANCELLOR: I was very puzzled.
LORD OGMORE: I do not expect to have the new clause inserted to-day if the noble and learned Lord wishes to consider it at more length. The purpose of the new clause, which has nothing whatever to do with Clause 15, is to take care, if I might use the expression, of those people who are neither occupying tenants nor sub-tenants; they are tenants who will, so to speak, be excluded by the Bill from all consideration. They are not occupying tenants and they are not subtenants in possession of premises, and at the end of the lease naturally the tenant will have no further beneficial interest in the premises. This class of tenant is not dealt with by the Bill, but he is obviously going to be much affected by it. He cannot negotiate with his superior landlord, as he undoubtedly would be able to do if this Bill had not been passed. In other words, we must imagine three people: there is the superior lessor, or
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his successor in title, there is the intermediate lessee and there is the occupying sub-lessee. One of them is the ground landlord, one of them occupies the tenancy, and the fellow in the middle is the person I am trying to protect in this Amendment—the middleman, if I may so describe him; the only man who, as I said on Second Reading, probably has any capital in the premises at all, other than the capital of the ground landlord in the actual land upon which the buildings are erected.
This man, the tenant, in these circumstances is put in a serious dilemma, because the sub-tenant is given a relationship with the lessor which he never had before; he is given rights under the Bill which he never had before; and any possibility of negotiation which the tenant would have had in the normal case with the sub-tenant, on the one hand, and the superior lessor, on the other, is gone. He is completely handcuffed. He is not even like the old soldier, who "silently fades away"; he will fade away, but not silently, because all the obligations in the lease, as I understand it, will still be imposed upon him. He will still have to carry out the serious burdens of the building covenants, the covenants to repair and to leave in a good state of repair at the end of his lease. Those are serious obligations upon him. I remember a case in Cardiff some years ago where a large mansion came to the end of its lease, and the unfortunate woman who owned it had to spend many hundreds, if not thousands, of pounds on repairing it, to hand it over to the ground landlord, who immediately pulled it down.
THE LORD CHANCELLOR: That was before 1927.
LORD OGMORE: It does not matter whether it was before or after 1927; it does not really affect a case like that. I should have thought that the Landlord and Tenant Act, 1927, had no effect upon it. We are dealing with dwelling-houses. As a matter of fact, I do not think it was before 1927. I am searching my memory, and I cannot swear whether it was before or after 1927. I can see what the noble and learned Lard means. He means that such a tenant could apply to the court and get relief from the obligations. But in these conditions the court may say: "We are not going to give you any relief.

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We cannot give you relief, because there are no circumstances which justify relief being given to you in this particular case." The only case of which I am aware where the court can give relief from covenants is where the circumstances of the district have so altered that the covenants are no longer applicable. I am not asking for any radical change in the Bill, but only that this one particular class of person, the only class of person dealt with under the Landlord and Tenant Act who is not beneficially affected in any way at all, should not be seriously prejudiced, as I believe he will be if this Bill goes through without some sort of provision—again, it may be that better words could be used than I have used—being inserted which will take care of his case. I hope I have been able to explain to the noble and learned Lord, the Lord Chancellor, the object of this Amendment, which I am sure he will agree is quite a reasonable one, and that on the Report stage he will be able to give us the satisfaction that we feel we should have. I beg to move.
Amendment moved—
Leave out Cause 15 and insert the said new clause.—(Lord Ogmore.)
THE LORD CHANCELLOR: I am obliged to the noble Lord. I will examine this new Clause in the light of the old Clause 15 being allowed to stand and not being eliminated. The noble Lord will see that it becomes a very different picture. I do not propose to answer what he said any further, but I should like him to consider one point. The last part of the proposed new clause is in these terms:
"The covenants on the part of the lessee contained in the superior tenancy shall be deemed not to apply to the tenant or to anyone claiming through or under him."
That would, I believe, include the subtenant. I do not think that can be meant; but if it is meant, there would be nobody left who was under any obligation in respect of the contractual obligations in the lease. Perhaps the noble Lord will consider that point. I suggest that he should withdraw this Amendment, and put down a new clause on Report stage, which I will consider.
LORD OGMORE: I am obliged to the noble and learned Lord for pointing out that particular aspect of the wording. It was intended to apply to the tenant or,
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in the case of the tenant dying, to his personal representatives. I will see if we can avoid the pitfall that the Lord Chancellor has pointed out. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clauses 16 to 21 agreed to.
Clause 22 [Interpretation of Part I]:
LORD SILKIN LORD SILKIN moved, in the definition of "dwelling-house" to leave out (2) and insert (3). The noble Lord said: It looks to me as if even Homer sometimes nods, and I have put down this Amendment in order to make quite certain whether that is so or not. If the noble and learned Lord accepts the Amendment, as I imagine he may, I hope that he will not chalk this one up as a concession. I beg to move.
Amendment moved—
Page 18, line 35, leave out ("(2)") and insert ("(3)").—(Lord Silkin.)
LORD MANCROFT: The noble Lord is perfectly right, and I am happy that he has given me the opportunity of joining the ice-breaking gang. I do not wish to make any comment on the second part of his observations, and I have pleasure in accepting the Amendment.
On Question, Amendment agreed to.
LORD MANCROFT LORD MANCROFT moved, in subsection (2), to leave out "as being a member of his family." The noble Lord said: This is purely a drafting Amendment. Clause 22 (2) defines "the tenant" for purposes of Part I of the Bill. The words proposed to be left out have caused some misunderstanding, and as they are not essential it seems better to omit them. I beg to move.
Amendment moved—
Page 19, line 34, leave out from ("Acts") to end of line 35.—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23:
Tenancies to which Part II applies
(3) In the following provisions of this Part of this Act the expression "the holding," in relation to a tenancy to which this Part of this Act applies, means the property comprised in the tenancy, there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant for

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the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies
LORD SILKIN LORD SILKIN moved, in subsection (3), to leave out all words beginning "there being excluded" down to the end of the subsection. The noble Lord said: We have now finished with dwelling-houses and are on business, professional and other tenancies. Clause 23 is the clause which defines the application of Part II. It deals with people who are in possession of premises, but it excludes any part of the premises
"which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this Part of this Act applies."
I put down this Amendment to inquire what is the purpose of this exclusion. On the face of it, it would look as if the Bill could not possibly apply to a person not in the employ of the tenant, who was not the tenant himself, and who was not concerned with the purposes of the business. Why was this put in at all?—because obviously it could not possibly concern such a tenancy. If there is some purpose behind it which I have not been able to fathom by reading the provision, then I should like to reserve my position, and, if I do not approve of what is intended, put down an Amendment at another stage. At the present moment my main purpose is to find out what is behind this provision. I beg to move.
Amendment moved—
Page 20, line 17, leave out all words after ("tenancy") to end of line 20.—(Lord Silkin.)
LORD MANCROFT: I do not think we need waste much time over this Amendment. I believe it is some slight doubt about the wording which has really caused the trouble here. Perhaps the noble Lord, Lord Silkin, is interpreting Clause 23, as it now stands drafted, to mean that the occupier does not get security of tenure for premises which he occupies for purposes other than business purposes. If the noble Lord is in doubt about that, I can assure him that that is not the intention. But since it has caused doubt in his mind, I will certainly look at the wording again and see whether the point he has made can be cleared up. I hope that that will be satisfactory to the noble Lord.
LORD SILKIN: I wish the noble Lord would explain to me what he intends, and then I can form some idea as to whether what he intends is something of which I approve and whether these words really carry out the intention. At the moment, I am somewhat mystified.
THE LORD CHANCELLOR: I myself to some extent misread this provision of subsection (3), which says:
"… there being excluded any part thereof which is occupied neither by the tenant nor by a person employed by the tenant for the purposes of a business by reason of which the tenancy is one to which this part of this Act applies."
The qualification of "for the purposes of a business" refers to "by a person employed by the tenant for the purposes of a business." Those words do not qualify the tenant, but only a person employed by the tenant for the purposes of the business. I think if words are put in to make that clear—and I have myself misread it—the noble Lord's difficulty will be solved. If there is any doubt about it, perhaps he and I may discuss it together before the Report stage. I think there is, in principle, nothing between us at all.
LORD SILKIN: I do not know whether there is or is not until I understand it. But there is a genuine doubt as to what this means. In those circumstances, I beg leave to withdraw the Amendment, on the understanding that we will look at it again.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clauses 24 to 29 agreed to.
Clause 30:
Opposition by landlord to application for new tenancy
30.—(1) The grounds on which a landlord may oppose an application under subsection (1) of section twenty-four of this Act are such of the following grounds as may be stated in the landlord's notice under section twenty-five of this Act or, as the case may be, under subsection (6) of section twenty-six thereof, that is to say:—
(d) that the tenant could have obtained a new tenancy, or a renewal of the current tenancy, by the exercise of an option available to him within a reasonable time before the termination of the current tenancy, that the terms on which the tenant could have obtained the new tenancy or renewal were reasonable at the time when the option was granted, having regard to the terms of the

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current tenancy and to all other relevant circumstances, and that the tenant has failed to exercise the option;
(f) where the current tenancy was created by the sub-letting of part only of the property comprised in a superior tenancy and the landlord is the owner of an interest in reversion expectant on the termination of that superior tenancy, that the aggregate of the rents reasonably obtainable on separate lettings of the holding and the remainder of that property would be substantially less than the rent reasonably obtainable on a letting of that property as a whole, that on the termination of the current tenancy the landlord requires possession of the holding for the purpose of letting or otherwise disposing of the said property as a whole, and that in view thereof the tenant ought not to be granted a new tenancy;
(h) subject as hereinafter provided, that on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence.
6.34 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (1), to omit paragraph (d). The noble Lord said: There are three Amendments to Clause 30 seeking to delete three separate paragraphs. I wish we could have had one discussion on all three, but it seems to me that it would be more convenient to discuss each deletion separately, and that is what I have done in the Amendments. Paragraph (d), which I seek to delete, provides one of the grounds upon which a landlord may oppose an application by a tenant for a new tenancy. This ground is that the tenant could have obtained a new tenancy or a renewal in the exercise of an option at some earlier time which he failed to exercise, and that the option was a reasonable one, having regard to the terms of the tenancy, and so on. Because he has failed to exercise this reasonable option when he had the opportunity, he now loses his chance of a new tenancy.
It seems to me that that is rather unfair unless some words are included which would make it clear that if there were good reasons at the time for the tenant's non-exercise of the option, he should not be barred from getting a new tenancy at the time when the lease expires. I can think of a number of grounds upon which a tenant might
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have hesitated to exercise an option. So far as I can see, a tenant with, say, seven years to run, might have an option to extend his tenancy beyond the next seven years on perfectly reasonable terms. He may find at the time when he is required to exercise the option that business is not very good, or he is uncertain about his movements and is not in a position to commit himself for a longer period than this seven years. He may be contemplating going abroad, or for a hundred-and-one perfectly good reasons he may have decided that he is unable to exercise the option. He may even have overlooked the fact that there is this option. The option is sometimes required to be exercised a considerable period in advance, and people do tend to overlook these things. Everybody is not a lawyer, and people are not constantly referring to their leases to see what are their legal rights—fortunately, I suppose, for the lawyers. The fact remains that there may have been perfectly good, intelligible reasons for the tenant not to have exercised the option.
It seems to me quite an unnecessary restriction on a tenant's privilege—if you like to call it so—of getting a new tenancy. What is the purpose of it? Why should a tenant be prevented from getting a new tenancy because he has not exercised an earlier option? In what way is the landlord damaged by the fact that the tenant has not exercised this option? If the Government want to insist upon this provision, ought they not to have a proviso of some kind, that where the failure to exercise the option is for perfectly good reasons, then the tenant should have the benefit of a new tenancy? Except on the basis that it is intended to put obstacles in the way of a tenant, to prevent him from getting a new tenancy, I cannot understand the purpose of this restriction. Therefore I beg to move that paragraph (d) be deleted.
Amendment moved—
Page 24, line 21, leave out paragraph (d).—(Lord Silkin.)
LORD MANCROFT: I think this was a point upon which the noble Lord, Lord Silkin, touched in his Second Reading speech, and I hope we shall be able to set his mind at rest upon it. This is the position as I see it. If, when a tenancy is first granted, the parties concerned

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freely agree that the tenant shall have an option at or near the end of the lease, to renew on terms which, at that time, are reasonable, then the aim of Part II of this Bill—which, of course, is to give the tenant a reasonable degree of security of tenure—is achieved. If the tenant fails to exercise his option, I do not think there is much reason to give him a further chance under this Bill. The landlord is surely justified in assuming, if the tenant does not exercise his option, that he does not want renewal, and the landlord may have made his plans for the property on this assumption. That is the answer to one of the noble Lord's points. It is because justice must be done on both sides, and it would be unreasonable to allow the tenant to upset these plans by a last minute change of mind.
There is also a precedent for what we propose here, because under the Landlord and Tenant Act, 1927, the tenant, as the noble Lord, Lord Silkin, will remember, was debarred from claiming compensation for loss of goodwill (and therefore from claiming a new lease) if he had failed to exercise a reasonable option to renew. The Leasehold Committee recommended the retention of this provision, but thought that the court should have power to extend the period of availability of the option where it saw fit. The Committee's suggestion has not been accepted, because it is not thought to be necessary in view of the way in which paragraph (d) (which is the paragraph we are now talking about) is drafted. The failure to exercise the option will be held against the tenant only if it was available
"a reasonable time before the termination of the current tenancy."
That means, not too long before. I think that meets the point about which the noble Lord, Lord Silkin, is worried.
In these circumstances, therefore, there is no reason that I can see why the court should extend the period of the option's availability, which might do considerable injustice. After all, it might be extended in the case, presumably, of business men negotiating perfectly freely with their obligations well in mind. So I suggest to the noble Lord, Lord Silkin, that the procedure that we propose now has the precedent of the 1927 Act to support it. It also has the recommendation of the Leasehold Committee—a Majority recommendation. I would also suggest
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to the noble Lord that, taken by and large and looking at both sides, the tenant's side and the landlord's side, justice is being done by this clause as it stands, which is in itself really a reasonable and businesslike provision. I hope that that sets the noble Lord's mind at rest, particularly on the point of reasonability.
6.42 p.m.
LORD SILKIN: My mind is not really set at rest because I do not accept the reasons that have been given. The Landlord and Tenant Act, 1927, is hardly a good precedent for anything. It is an Act which is admitted on all sides of the House to have failed. Nobody would suggest that that is a good Act to follow. It is because it is such an unsatisfactory Act that we are dealing at this moment with this Part of this Bill. As to the Report of the Committee, of course it did recommend that in certain circumstances there should be access to the court. That is what I should be satisfied with. I should be quite content if there were some opportunity for a person to go to the court. At the moment, all that he can go to the court on is to ask for a decision on whether an option was available to him within
"a reasonable time before the termination of the current tenancy."
If the noble Lord can tell me what "a reasonable time before the termination of a current tenancy" is, I shall be grateful to him. I wonder what guide a person is to have as to what is "a reasonable time before"? It is not an easy question upon which to make up one's own mind and it is a very difficult question to ask a judge to decide upon. Nevertheless, one could go to court on that, and I would suggest that this is a provision which might be looked at again, to see whether a tenant who on perfectly good grounds has not exercised his option could not nevertheless have the opportunity of getting a new tenancy. Obviously, it would have to be settled by the court, if the landlord did not agree; but why not give such a tenant the right to go to court? He could go at his own risk and let the court decide.
THE LORD CHANCELLOR: Is not this rather difficult? It seems to me it is most difficult. Here we are not dealing with people who are helpless, or anything

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of that kind; they are business people with whom we are dealing. This is a case where the parties have entered into a bargain which contains, amongst other things, a provision or an option for renewal, and not only an option for renewal but an option for renewal upon terms which are agreed between the parties. It occurs to us that it is not right that, when the parties have come to their own agreement, it should be supplemented by statutory provisions which are intended to provide, by and large, for people who have not made their own bargains. The only reason why we have a provision of this kind and why the Bill contains what it does, which is relief for the tenant, is because he has not made provision for himself. Where he has, is there really any reason why he should have a double chance? It is not as if the terms were inevitable. If they are unreasonable, then the landlord cannot take advantage of this. It is only where there is a reasonable provision in the contract which the parties have made providing for renewal that the Act will step in. I think that is fair. It may be unfair to place the landlord in the position, when he has made his bargain, of not knowing whether the tenant is going to exercise his option under the lease or is going to wait until the last moment that he can in order to exercise his right. I suggest to the noble Lord that this is really a fair enough arrangement between the parties.
LORD SILKIN: The noble and learned Lord and I are in disagreement upon this fundamental point as to what are the rights of a landlord and a tenant to reopen a bargain which has been made. The noble and learned Lord is assuming that business people are negotiating on equal terms, but, if they are, what is the point of the Landlord and Tenant Act, 1927, or of these other Statutes? What is the point of this Bill? Surely, the underlying assumption is that the landlord is at some advantage and that the tenant does need some protection. Even as regards the option, I do not go so far as to press for the deletion of this provision, although that is my Amendment. I did think that the Government might be prepared to consider some alternative to entire deletion which would enable the tenant who, for reasons which are possibly beyond his control, did not exercise the option but who nevertheless later
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on desires to continue the tenancy. I should hope that, even now, the Government would be prepared to give further consideration to this point.
THE LORD CHANCELLOR: We are not dealing with Part I; we are dealing with Part II. Whatever presumption you may have in regard to long leases in Part I, and of some advantage of position in the landlord, that really is not the case with premises under Part II. And where you get parties bargaining and actually making a provision in the lease that there shall be a right to renew or an option to renew, that is not the sort of case in which it is fair to presume that the parties are not dealing with each other fairly at arm's length. It is almost certain that they would both have skilled advice and there is no question of advantage in the position of the one as compared with the other. That is a bargain that they have made, and one would think that they ought to stick to it and not take advantage of a statutory provision which is for people who have not made any such bargain.
On Question, Amendment negatived.
6.50 p.m.
LORD SILKIN LORD SILKIN moved, in subsection (1), to omit paragraph (f). The noble Lord said: I beg to move Amendment No. 19. Under paragraph (f) the landlord can refuse the tenant a new tenancy, or can refuse the grant of renewal, on the ground that this is a part-letting of the whole of the premises, and that by a rearrangement of the tenancies he can get a higher rent. It seems to me that that is rather hard on the individual tenant who is occupying a part of the premises. Surely that is a matter which will be taken into account by a court if they have to fix the new rent of the tenant. I am prepared to concede that the landlord should not be deprived of the opportunity of making the best use of his premises and to get the best possible rent, provided that he does not force existing tenants to go out and lose the benefit of the provision in the Bill. It seems to me that everything that is desired can be met in those circumstances by requiring the sitting tenant to pay a higher rent; and if the rent is too high to justify his staying on, of course he will not pay it. It seems a drastic remedy to deprive people of the benefit of this Bill simply because the landlord

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can get a higher rent by making some other arrangement. No doubt he could do that every time if only he could get possession. The Bill does not give him possession on that ground; yet it seems to do so under this paragraph. It is for that reason that I move this Amendment.
Amendment moved—
Page 24, line 43, leave out paragraph (f).—(Lord Silkin.)
LORD MANCROFT: This is rather an unusual case. The circumstances which the noble Lord, Lord Silkin has in mind, and about which we are talking, I should think will occur fairly rarely. Perhaps I can help the Committee to come to a decision on this matter if I give an example of what the noble Lord, Lord Silkin, has in mind in his Amendment. A is a freeholder; B is the tenant of business premises—a shop with a basement; C is the sub-tenant of the basement only. B may not have had any use for the basement, and he sub-let it to C. B's lease expires and he does not want renewal, and he disappears from the scene; but C wants a new tenancy of his basement. If A is required to grant it he is left with the area occupied previously by B, and he may find that, by itself, it is not a convenient letting, because most of the tenants want the basement as well as the shop. The result is that the best rent he can get for the shop alone plus the rent for the basement would be substantially less than he would get if he were able to let the basement and the shop together. That is the example I think we all have in mind. It is likely to be rather rare, although it may well happen. Quite frankly, the trouble is that in this situation perfect justice between all parties is not possible—I cannot see how it can be achieved. Someone must suffer for the legacy, perhaps I may call it, left by B's subletting.
I suppose the noble Lord, Lord Silkin, will repeat to me that, because Part II of the Bill is intended to protect tenants, it is the landlord here who should suffer, and that he must simply put up with the loss caused by letting in two separate parts. I suppose he may alternatively argue that some sanction should be applied to the mesne tenant, though the Amendment would not do that—and, indeed, it is difficult to see how it could be done when he has ceased to have
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an interest in the premises. At this stage, let me quote from the White Paper. It is not really the object of Part II of the Bill to protect the tenant, no matter at what cost to the landlord. The White Paper, in paragraph 43, states that in the Government's opinion the landlord:
"is entitled … to a fair contemporary market rent for the premises."
The only practicable way of giving him this, in the case I have just been trying to explain to the Committee, is to enable him to let shop and basement together; and, quite frankly, this means giving him possession against C, the sub-tenant of the basement.
I should like to point out to the Committee that the paragraph we are discussing applies only where the landlord originally let the premises as a whole and the tenant sub-divided them by subletting a part. I must emphasise that the paragraph does not apply where the landlord originally let the premises to the separate tenants and now wants to let them as a single unit because he finds it more profitable. I hope the noble Lord is not going to come back at me and say, "You are supporting the landlord against the tenant." This is a case where a balance has to be struck, and I hope that I have convinced him that in this particular case someone has got to come out on the worse side of this rather unusual bargain. We think that we have struck what is admittedly a very difficult balance as fairly as we can. I hope the noble Lord will appreciate the difficulty of this matter, and will realise that if we took the course which I think he wants us to take a far greater injustice would be done than the slight disadvantage which must admittedly devolve upon the sub-tenant in the case we have been discussing. I hope the noble Lord will realise that this is the best solution in a difficult case, and that he will agree to withdraw his Amendment.
LORD SILKIN: The noble Lord has sought to make the best of his case by quoting the case of shop and basement. But suppose we take the case of basement and shop. Suppose that the landlord is by this means enabled to get possession of the shop and not of the basement. Suppose that a person has taken the shop and the basement, keeps the basement and lets off the shop. Both these cases are rare—the noble Lord says

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his case is rare, and mine would perhaps be rarer than rare. But in such a case the landlord would get possession of the shop, which seems to me to be defeating the whole purpose of the Bill. The noble Lord did not deal with my suggestion that this difficulty could be met in fixing the rent. Why not? It would be a perfectly appropriate matter for the court to settle. Incidentally, the landlord must be presumed to have agreed to this severance. Most leases provide that a tenant must not sub-let part of the property without the consent of the landlord, and the landlord must be deemed to have consented; or, if he did not, and the lease enables such subletting to take place, the landlord must be deemed to know what he is doing. But whether that be so or not—and it is not necessarily part of my case—if the tenant of the shop or the tenant of the basement wanted a renewal of the lease, surely the court would take into account the effect of the severance.
The court is required to take into consideration what rent could be obtained for the premises and, if it is not inherent in the existing provision, it could be made quite clear that the tenant must pay the rent which the landlord could have got if the premises had been in their original condition. I think that is perfectly feasible. It seems to me that this tenant should have the option of going on with the tenancy or of giving it up because he finds the rent too high. It seems that the tenant should not, through the action to which the landlord has acceded in the past—he has agreed to the sub-letting—lose his right under this Bill. That seems to me to be unfair. And, although the noble Lord may not like my saying so, where there is a conflict between the landlord and the tenant, it seems to me that this Bill comes down in favour of the landlord, and that this is just one more example of that.
THE LORD CHANCELLOR: May I say a word? As to the last observation, I think the noble Lord ignores the position in saying that the Bill comes down in favour of the landlord rather than the tenant; he ignores the fact that the whole
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of the Bill is introduced in favour of the tenant. It is not a question of starting level and coming down in favour of the landlord or the tenant. We are not starting, as in this hypothesis, with the landlord having everything and the tenant nothing. The whole Bill is aimed at giving the tenant something, but the noble Lord opposite is always asking for something more. I think the point which the noble Lord has made is rather far-reaching—for this reason: that if this is not to be a ground upon which a landlord can recover, I conceive that in the future (and this Part of this Bill may last for a long time, for it is part of our permanent legislation) a landlord will not allow any sub-letting; there will be an absolute covenant against any sub-letting, because the result of it might be just what we are providing against in this case. I do not know whether the noble Lord has considered that possibility. I would add this. He has put forward, in his usual way, a very cogent argument and one aspect which he has presented had not occurred to me before. Whether it has occurred to my right honourable friend the Home Secretary I do not know. I should like to consider this point, without making any promise, and perhaps the noble Lord would put down an Amendment on Report. I hope that that will not be regarded as a promise, but I should like to reconsider the matter, and if the noble Lord will withdraw his Amendment upon that footing, I will reconsider it.
LORD SILKIN: Of course, I will withdraw the Amendment, in view of what the noble and learned Lord has said.
Amendment, by leave, withdrawn.
House resumed.

BRITISH TRANSPORT COMMISSION ORDER CONFIRMATION BILL
Brought from the Commons; read 1a; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2a and reported from the Committee.
[The Sitting was suspended at seven o'clock and resumed at half-past eight.]

LANDLORD AND TENANT BILL
House again in Committee.
LORD SILKEN LORD SILKEN moved, in subsection (1) of Clause 30 to omit paragraph (h). The noble Lord said: I beg to move this Amendment. When we adjourned we were discussing the grounds upon which a landlord may oppose the granting of a new lease. Eight grounds are set out in Clause 30, which gives the landlord a great many opportunities of defeating the purposes of the Bill. I have dealt with two of those grounds by way of Amendment, without very much good fortune. The last of the grounds is if:
"the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein, or as his residence."
I feel there is some difficulty about this matter, and I want to be perfectly frank and to explain the difficulty as I see it. I can imagine cases in which there may be very good grounds for a landlord to get possession because he wants the premises for his own occupation. But I can equally well imagine grounds which are quite wrong, and I want to take as an illustration a ground which I imagine will be quite a common one in cases in which the tenant has been in occupation for a number of years of business premises, has built up a goodwill, has established a valuable connection—perhaps from nothing—has managed to earn a livelihood, and then the landlord says: "I want possession of this place because I want to carry on business here." And indeed he does, because he will be carrying on exactly the same business as heretofore and taking advantage of the goodwill which the tenant has built up. That will be, I will not say a common case, but one which will occur fairly frequently. There are, unfortunately, a good many landlords who may be tempted by the possibility of taking over goodwill and running a business, and even more who will be tempted by the possibility of taking over the goodwill and then disposing of it at a very good price.
If one looks at the economics of a business of this kind it may be found that a person has been in occupation for, say, twelve or fourteen years, has built up a goodwill, and is earning, perhaps, £1,500 a year in respect of the business on the premises. Goodwill of that kind may be
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worth £3,000—that is, two years' purchase. The landlord can get possession by representing that he wants the premises for his own occupation. His liability for compensation will be, in the case I have mentioned, one years rateable value, if under 14 years—possibly £150 or £200 or something that is quite insignificant as compared with the value of the goodwill. He gets possession in this way and then disposes of the goodwill which he has done nothing to create and which has been built up by his tenant. That is the other side of the picture.
I can understand the case where the landlord genuinely requires possession, not to carry on the business of his tenant but to carry on his own business. The noble Lord, Lord Mancroft, gave a number of examples where the landlord may genuinely require possession, and I do not wish to interfere with such cases, but only with those in which the landlord requires possession only to enter into Naboth's vineyard. The question is: how can we distinguish between the two types of case? How can we deny the tenant the right of renewal in one ease but give it to him in the other? I recognise that my Amendment goes too far in one direction and I believe that the provision of the Bill goes too far in the other. I put it to the noble and learned Lord: is it not possible to devise a new paragraph (h) which will protect the tenant against improper expropriation of his goodwill, but which nevertheless will give the landlord the right to take possession where he genuinely requires it for purposes other than merely capturing the tenant's goodwill? I have put the position frankly and fairly. I do not want to push this matter too far and I think the noble Lords opposite agree with me that this is a problem. Can we not sit down and see whether we cannot thresh out something which will achieve as nearly as possible the kind of result I have in mind? I beg to move.
Amendment moved—
Page 25, line 17, leave out paragraph (h).—(Lord Silkin.)
THE LORD CHANCELLOR: Nothing could have been fairer or more candid than the way in which the noble Lord moved this Amendment, and I will be equally candid with him and tell him that I can imagine cases in which the

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landlord might seek to make an improper use of this subsection. But I would ask him to remember this: we have gone a long way to meet the case which he envisages, for we have, by subsection (2) of this clause, provided that the landlord shall not be entitled to oppose an application by the tenant for a renewal of his tenancy on the ground to which we have been referring if the landlord's interest was created within five years of the termination date. That eliminates the rascal—in this case, the man who we are afraid will purchase the reversion and then make use of the goodwill which has been created by the tenant for the purpose of carrying on his own business. I think that goes a very long way, but, of course, I recognise that there may be a rare case in which abuse is possible under this clause. I frankly do not see my way so to define the provision as to meet the case, but I am sure of this—and I think the noble Lord recognised it—that it is impossible generally to exclude the landlord who genuinely wants to obtain possession of his own premises.
For instance, it is no uncommon thing for a factory owner to plan ahead. He builds perhaps larger premises than he requires, knowing or hoping that in time, with the expansion of his business, he will require the whole. In the meantime, he lets part of his premises. Is he to be hampered for ever in his development by the fact that he has so acted? I think it would be wrong to impose that sort of restriction upon a forward-looking landlord. For that reason I can see no way—and we have tried to do this—of protecting the rare case where a landlord seeks to abuse his position under paragraph (h). After all, though we start fundamentally at different ends, I think the noble Lord will concede that this Bill does make a great improvement in the position of the tenant. The whole of Part II effects a great improvement in the tenant's lot; and while there may be still some tenants in respect of whom a landlord does not act as a good landlord should, I do not see my way to provide for every particular case. You merely get into a welter of refinement and confusion. You have to take the thing on fairly broad lines.
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Here we have inserted a proviso which imposes a qualification—not, I think, too difficult a refinement—which will go a long way to meet the sort of case the noble Lord has in mind. I do not see my way either to accept this Amendment or to suggest an alternative which would carry out his object. I will say this at once. If he can think of any provision which will meet with the bad case without also involving the good one, I will sympathetically consider it on Report. I have not been able to think of one myself, nor have those assisting me, but that does not mean that the noble Lord will not be able to do so. If he does, we will sympathetically consider it. But an extension of the whole of the subsection, or anything like it, I do not think would be fair, and I am sorry I cannot accept the Amendment.
LORD OGMORE: Anyone who has listened to the speeches on this Amendment will be bound to agree that there is a good deal of force in the speeches of both noble Lords. I think we all recognise that we do not want to penalise unduly the honest landlord; and, on the other hand, we do not want to enable the landlord to seize the goodwill of the tenant without paying for it or by paying only a very small amount for it. That would be quite unjustifiable. That is the dilemma the Committee is in and I really do not think the Government should say: "There is a dilemma here; we recognise there is a dilemma. It is a difficult problem but if you can think of the answer you can bring it up on Report stage. But we are not going to do anything about it; it is up to you." That seems to me, roughly—differently though the noble and learned Lord on the Woolsack put it—to be the attitude of the Government: "It is up to you to think of a better move." I think it is up to the Government to try themselves to see that they give equity and justice to Her Majesty's subjects.
One suggestion I would make is this. It might be possible to have a much higher measure of compensation. There is very small compensation now, as the noble Lord Lord Silkin, pointed out. In fact, it is derisory in many cases. While listening to the noble and learned Lord, it suddenly occurred to me that that is a possible way, though I do not think it is the best way. I think the united

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brains of the Government and the Departments that they have available to them, and the Law Officers and the Parliamentary draftsmen, should be able to deal with this problem, which is going, I think, to be a very real one. It is going to cause a great deal of dissatisfaction in the cases in which tenants are turned out by landlords who, as my noble friend has suggested, obtain premises under this Act, pay a small amount for compensation and then re-let them or even sell them at a great profit. I do not think one can contemplate with any satisfaction a circumstance of that sort arising.
There is some truth in what the Government have said in regard to Part I. It is true that, as regards an occupying tenant, under Part I he is in a better position than he has been before. However, that does not help the unfortunate people for whom I have been speaking—namely, the non-occupying tenants, who are put in a much worse position than they were in before. So far as the sub-tenants are concerned, they are in a better position, and to that extent the case of the Government is a justifiable one. But here the position is different, and I think it will be found in some cases that the tenant will not be in as good a position as he was under the 1927 Act. It is possible that if he were enabled to obtain the compensation he could have got under that Act—which he no longer is—he would have been better off than he will be under this Bill. We shall have to see how it will work out, but I can contemplate that to be the fact. In all the circumstances, I ask the Government to look at this again to see whether they cannot obtain some more equitable arrangement than they have under this subsection.
8.47 p.m.
LORD SILKIN: I am grateful to the noble and learned Lord for the way in which he has addressed himself to the case that I made on this Amendment. I suppose we are bound to agree to disagree about the extent to which this is likely to arise. I do not put it forward as a matter which is likely to be a daily occurrence, but I think it is likely to happen more frequently than he seems to believe. I realise that Part I of the Bill will be a great boon to tenants if they can get a renewal of tenancy, but
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to set out eight different sets of circumstances in which a tenancy can be refused is a considerable obstacle; and it may well turn out that the benefits we are holding out to tenants under this Bill will be almost as illusory as those we held out to tenants under the 1927 Act. But let me accept the statement of the noble and learned Lord as being an admission that there is a possibility of this evil taking place in a certain number of cases—he thinks very few, I think not quite so few. Ought we not to try to meet such a case? I agree with my noble friend Lord Ogmore that the onus should not be entirely on the Opposition. If it is recognised that this is an evil, then it is for the Government to see whether this evil can be met.
We on this side are perfectly prepared to discuss the matter and to make suggestions. I will make one straight away; I do not know whether it will stand up to examination, but it is something we might discuss. Would it not be possible, in a case where it is established that the landlord has really stepped in and taken advantage of the goodwill of a tenant, that he should pay compensation for the loss sustained by the tenant? I am sure that the ingenuity of the Parliamentary draftsman would be equal to finding words to enable a tenant to obtain that remedy. It may be that that is not adequate, or that it would not work, but I feel that my suggestion is worth further examination than has been given to the matter so far. Therefore, while admitting that it would not be right to press this Amendment to its logical conclusion—because I am asking for more than I think I ought to get, and the noble and learned Lord will be "getting away with" more than he ought to "get away with" if I withdraw—nevertheless, I do ask leave to withdraw the Amendment, and I hope that the matter will be reconsidered.
THE LORD CHANCELLOR: Let me say at once, and I say it sincerely, that we welcome any suggestion the noble Lord makes. If there is any good to be got out of further thinking we will think further, and we shall be glad to meet the noble Lord.
Amendment, by leave, withdrawn.
Clause 30 agreed to.
Clauses 31 to 33 agreed to.
Clause 34 [Rent under new tenancy]:
LORD SILKIN LORD SILKIN had given notice of an Amendment, after paragraph (a) to insert:
"(b) any effect on rent of the scarcity of similar holdings in the locality of the holding")
The noble Lord said: This Amendment is similar in principle to one that I moved in Part I of the Bill. The noble and learned Lord was not able to accept that Amendment and I apprehend that he will be equally unlikely to accept this one. I could only repeat the arguments I put forward on that occasion, but that I do not propose to do. Therefore, without prejudice to further consideration of this matter, I will not move this Amendment.
Clause 34 agreed to.
Clauses 35 and 36 agreed to.
Clause 37 [Compensation where order for new tenancy precluded on certain grounds]:
LORD SILKIN LORD SILKIN had given notice of an Amendment, in subsection (2) (a), to leave out "rateable" and insert "rental." The noble Lord said: Amendments Nos. 22, 23 and 24 stand together. Since I put down these Amendments certain suggestions have been made to me which I should like to submit in the form of an alternative Amendment. I have not put it down, and therefore I think it would be preferable that we should not spend any time in discussing the Amendments printed. I propose to put down at a later stage an alternative form of Amendment. It may be possible that I can put before the noble and learned Lord the proposals that I have in mind so that he can consider them.
THE LORD CHANCELLOR: I should be grateful.
Clause 37 agreed to.
Clause 38:
Restriction on agreements excluding provisions of Part II
(2) If at the date on which the tenant under a tenancy to which this Part of this Act applies is to quit the holding the holding or any part thereof has been occupied for the period of five years immediately preceding that date for the purposes of the carrying on of the tenant's business (whether by the tenant or by any other person), any agreement (whether contained in the instrument creating the tenancy or not and whether made before or after the termination of that tenancy) which purports to exclude or reduce compensation under the last foregoing
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section shall to that extent be void, so however that this subsection shall not affect any agreement as to the amount of any such compensation which is made after the right to compensation has accrued.
(3) In a case not falling within the last foregoing subsection the right to compensation conferred by the last foregoing section may be excluded or modified by agreement between the landlord and the tenant.
8.54 p.m.
LORD SILKIN LORD SILKIN moved to leave out subsection (2). The noble Lord said: This Amendment goes with Amendment No. 27. They can be discussed together, if the Committee will give leave. The point of these Amendments is to take out of Clause 38 the provision which enables parties to contract out of the provisions of compensation if the tenancy is for a term of five years or less. I see no reason why this differentiation should be made. I can understand the Government coming to the conclusion that, in spite of the provisions of this Bill, it should be possible for the parties to contract out. I should not have supported that view—I think it wrong; but it is a possible line of thought. What I do not understand is why parties cannot contract out, as regards compensation, if the tenancy is for more than five years, but can if it is for less than five years. I see nothing sacred in this term of five years, and I see no principle underlying it.
What we are really doing is giving landlords every possible inducement to grant tenancies for not more than five years. To-day, business premises are frequently taken on a term of seven, fourteen and twenty-one years. I can well imagine that a good many landlords will stop doing that and will in future grant them for a lesser term and insist upon a provision that the compensation provisions in this Act shall not apply. I ask the noble and learned Lord whether he attaches any great importance to a provision which enables the parties to contract out in those circumstances. Would it not be better not to give the landlord the opportunity of insisting upon the omission of the compensation clauses from every agreement, thereby rendering so nugatory the good provisions of this Bill? It is for that reason that I have put down this Amendment. I hope the noble and learned Lord will agree that there is a considerable weight in the point that I am making.
Amendment moved—
Page 30, line 19, leave out subsection (2).—(Lord Silkin.)
LORD MANCROFT: The effect of these two Amendments is to leave out all the provisions about contracting out of compensation. The result would be that contracting out would be permissible without limit. At present, contracting out ceases to be valid when the tenant's business has been carried on in the premises for five years. When I first looked at these two Amendments I thought it would be the intention of the noble Lord to prohibit contracting out altogether, because that was the way in which his mind seemed to be working in the course of his Second Reading speech. The distinction it is sought to make here is a fairly plain and a very just one. Contracting out of compensation is intended for the case where both parties enter into the tenancy in the knowledge that it is to be temporary because the landlord will shortly require possession. If contracting out were not allowed, the result, I should have thought, would be one of great rigidity. The tenant would not benefit because the landlord, knowing that he would shortly require possession on a ground giving rise to compensation, obviously would insist on a higher rent. The five-year limit, to which we have been referring, is an important safeguard. I would draw the attention of the Committee to that safeguard. It ensures that if, contrary to expectation, the tenancy proves not to be temporary, the tenant is entitled to compensation, despite the contracting out provision in the agreement.
The noble Lord, Lord Silkin, made again a few minutes ago a point which he made on Second Reading. He suggested that one result of the contracting out provision would be to make landlords refuse to grant leases for more than five years. I do not think that that result is very likely, and for this reason. The test is not the length of the lease, surely, but the length of time for which the business is carried on in the premises. At the end of the first five years the landlord cannot prevent the tenant from staying on unless he can establish one of the grounds for possession. If he can do this, then he is justified in limiting the lease to five years. If he cannot, there is no point in his limiting the lease to five years, because the tenant can remain longer and thereby
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qualify for compensation. I see what is at the back of the noble Lord's mind; I think he has misdirected his mind on this point. It is a real and necessary distinction that we make. The safeguards provided by the Bill, to which I have attempted to draw the Committee's attention, are valuable ones and ones which should allay suspicion in the noble Lord's mind. I hope he will give it reconsideration, because I can assure him that in our opinion his Amendment is an unsatisfactory one.
LORD SILKIN: In the light of what the noble Lord has just said, I am quite prepared to reconsider it.
THE LORD CHANCELLOR: I believe the noble Lord has missed a point for once.
LORD SILKIN: I am perfectly prepared to admit it is possible. I will certainly look at the matter again. Of course, if the noble Lord is right he will hear no more about it. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.1 p.m.
LORD MANCROFT: This Amendment is a drafting Amendment. It is quite uncontentious. I beg to move.
Amendment moved—
Page 30, line 19, leave out from beginning to ("any") in line 24, and insert—
("(2) Where—

(a) during the whole of the five years immediately preceding the date on which the tenant under a tenancy to which this Part of this Act applies is to quit the holding, premises being or comprised in the holding have been occupied for the purposes of a business carried on by the occupier or for those and other purposes, and

(b) if during those five years there was a change in the occupier of the premises, the person who was the occupier immediately after the change Has the successor to the business carried on by the person who was the occupier immediately before the change,")—(Lord Mancroft.)

On Question, Amendment agreed to.
LORD MANCROFT: This also is a drafting Amendment. Not only is it uncontentious, but it involves some distinction in the definition of the word "landlord," and I am quite certain that at this stage in the evening the Committee would not wish me to launch on any explanation of that, uncontentious as it is. I beg to move.
Amendment moved—
Page 30, line 34, leave out ("between the landlord and the tenant").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 38, as amended, agreed to.
Clauses 39 and 40 agreed to.
9.3 p.m.
THE LORD CHANCELLOR: This Amendment seeks to incorporate a somewhat long clause which is, I think, quite non-contentious. In a word, it seeks to apply Part II of the Bill to cases where either the tenant's interest or the landlord's interest in business premises is held on trust. That sums up the whole thing. In order to achieve it some very elaborate provisions are necessary which I shall be glad to explain if any noble Lords wish it. But I believe the Committee will take it from me that it is wholly non-controversial and, although elaborate, is I think free from ambiguity. I beg to move.
Amendment moved—
After Clause 40, insert the following new clause:
Trusts
"41.—(1) Where a tenancy is held on trust, occupation by all or any of the beneficiaries under the trust, and the carrying on of a business by all or any of the beneficiaries, shall be treated for the purposes of section twenty-three of this Act as equivalent to occupation or the carrying on of a business by the tenant; and in relation to a tenancy to which this Part of this Act applies by virtue of the foregoing provisions of this subsection—

(a) references (however expressed) in this Part of this Act and in the Ninth Schedule to this Act to the business of, or to carrying on of business, use, occupation or enjoyment by, the tenant shall be construed as including references to the business of, or to carrying on of business, use, occupation or enjoyment by, the beneficiaries or beneficiary;

(b) the reference in paragraph (d) of section thirty-four of this Act to the tenant shall be construed as including the beneficiaries or beneficiary; and

(c) a change in the persons of the trustees shall not be treated as a change in the person of the tenant.

(2) Where the landlord's interest is held on trust the references in paragraph (h) of subsection (1) of section thirty of this Act to the landlord shall be construed as including references to the beneficiaries under the trust or any of them; but, except in the case of a trust arising under a will or on the intestacy of any person, the reference in subsection (2) of that section to the creation of the interest therein mentioned shall be construed as including the creation of the trust."—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 41:
Groups of companies
(2) Where a tenancy is held by a member of a group and the property comprised in the tenancy is or includes premises which are occupied by another member of the group and are so occupied for the purposes of a business carried on by that other member or for those and other purposes, the tenancy shall be one to which this Part of this Act applies, and in relation to such a tenancy—

(a) references (however expressed) in this Part of this Act of or to use occupation or enjoyment by the tenant shall be construed as including references to the business of or to use occupation or enjoyment by the said other member; and

(b) the reference in paragraph (d) of section thirty-four of this Act to the tenant shall be construed as including the said other member.

THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (2) to leave out all words after "group" (where that word first occurs) to the commencement of paragraph (a) and insert:
"occupation by another member of the group, and the carrying on of a business by another member of the group, shall be treated for the purposes of section twenty-three of this Act as equivalent to occupation or the carrying on of a business by the member of the group holding the tenancy; and in relation to a tenancy to which this Part of this Act applies by virtue of the foregoing provisions of this subsection—"
The noble and learned Lord said: This Amendment is substantially a drafting Amendment, dealing with a rather troublesome clause concerned with a group of companies, and it is required because of certain changes made in another place in Clause 23, in particular the commencement of the present subsection (4) of Clause 23. As I say, it is a clause which deals with groups of companies, and at present it provides that a tenancy is within Part II if it is vested in one member of a group of companies, although occupied for business purposes by another member of the group. The result of Clause 23 (4) is that occupation for business purposes is no longer in all cases enough to bring the tenancy into Part II. This subsection includes certain cases where the business use is in breach of the covenant. The Amendment makes the necessary changes in the wording of Clause 21. Again, this is difficult to follow without a much longer exposition, which I shall be glad to give if any noble Lord wishes it, but at this late hour I

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do not think it is necessary to give it. I beg to move.
Amendment moved—
Page 32, line 38, leave out from ("group") to end of line 44 and insert the said new words.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR had given notice of two Amendments in subsection (2), the first being to leave out "and", at the end of paragraph (a), and the second to add to the subsection:
"and
(c) an assignment of the tenancy from one member of the group to another shall not be treated as a change in the person of the tenant."
The noble and learned Lord said: These Amendments again are quite uncontroversial and non-contentious. The first Amendment is preliminary to the second, and the second corrects a small defect in Clause 41. The explanation is a somewhat long one but I think I ought to give it to you. The object of Clause 41 is to put a group of companies as a whole in the same position as a single company. The clause as it stands just fails to achieve this object, in one respect. Clause 26, confers the right on the tenant of business premises to take the initiative in having his tenancy replaced by a new tenancy. That right is confined to the tenant under a tenancy which was granted for a term exceeding one year. Where such a tenancy comes to an end after the Bill has become law it will automatically be continued under Part II, and the tenant's right to make a request for a new tenancy is preserved by subsection (1) of Clause 26. Where, however, a tenancy was granted for a term of years certain and the term expires before the coming into operation of the Bill, the law implies that if the tenant retains possession and the landlord accepts rent, then a new tenancy from year to year is thereby created. That is an adoption of law familiar no doubt to some of your Lordships, but not to all. Such a new tenancy would not be within the terms of Clause 26 (1) and therefore would not give rise to a right to request a new tenancy under Part II but for Paragraph 4 of the Ninth Schedule, which secures that a tenant who holds over after a fixed-term tenancy comes to an end shall have the right conferred by Clause 26, irrespective of whether the first term came to an end before or after the corning into operation
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of the Bill. I cannot hope that your Lordships will have been able to follow that explanation, but I do not know how to put a complicated and elaborate provision more simply, and I hope your Lordships will accept that it does achieve the object we have in mind. I beg to move.
Amendment moved—
Page 33, line 4, leave out ("and").—(The Lord Chancellor.)
LORD SILKIN: I think I understood everything that the noble and learned Lord read out, but what I did not understand, and wish he would explain, is its relevance to this Amendment. This Amendment, I think, says that
"an assignment of the tenancy from one member of the group to another shall not be treated as a change in the person of the tenant."
I thought he was explaining that where a tenant was holding over and, under Clause 26, had lost his right to a new tenancy, he should get some kind of relief where he was holding over in respect of a lease which expired before the commencement of the Act. It may be that all this is relevant to this question of an assignment of tenancy from one member of a group to another, but I did not quite follow that.
THE LORD CHANCELLOR: I ought to have read a little more from my brief. I apologise. The noble Lord has "caught me out"—I did not turn over the page. It is as well to be frank on these occasions, and I will now read out the passage which will make the matter clear to the noble Lord. The notion of the tenant holding over is expressed in sub-paragraph (c) of Paragraph 4 in the Ninth Schedule as a requirement that the tenant under the current tenancy must be the same as (or a successor in business to) the tenant under the fixed-term tenancy—your Lordships will see that we are now getting somewhere. It is at this point that a group of companies requires special treatment. If, for instance, after the expiry of the fixed term, and before the passing of the Bill, a new subsidiary was formed for the purpose of holding all the land belonging to the group, arid the tenancy was then assigned to that new subsidiary, the requirement that the tenant must be the same would not be fulfilled unless the change of tenant were ignored. The same would apply if the fixed-term

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tenancy was vested in the subsidiary and the subsidiary was for some reason dissolved after the expiry of the term. By ignoring the change of tenant in such cases the Amendment secures the benefit of Paragraph 4 of the Ninth Schedule to a group of companies. I hope that that explanation is clear to the noble Lord, Lord Silkin.
LORD SILKIN: The noble and learned Lord has certainly provided the missing link.
EARL JOWITT: I remember—if I may be allowed to reminisce for a moment—that when I was Lord Chancellor, on an occasion such as this I read out a completely inappropriate piece of paper in dealing with an Amendment. Your Lordships were very much impressed by what I read out and gave me the Amendment. A few minutes afterwards, I came to the Amendment to which the piece of paper was appropriate. I was in a great difficulty whether I should read the same paper again or go back to the earlier one which I had missed. I decided to read the same one again. I did so and it went very well. No one knew that there was anything the matter and I got my Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move the next Amendment.
Amendment moved—
Page 33, line 7, at end insert ("and
(c) an assignment of the tenancy from one member of the group to another shall not be treated as a change in the person of the tenant.")—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 41, as amended, agreed to.
Clause 42:
Tenancies excluded from Part II
42.—(1) This Part of this Act does not apply—

(a) to a tenancy of an agricultural holding;

(b) to a tenancy created by a mining lease;

(c) to a tenancy where the property comprised therein is let under a letting to which the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, applies, or would apply but for subsection (7) of section twelve of that Act; or

(d) to a tenancy of premises licensed for the sale of intoxicating liquor for consumption on the premises, other than premises where—

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(i) the excise licence for the time being in force is a licence the duty in respect of which is the reduced duty payable under paragraph 3, 5, 6, 10, 11 or 12 of the Fourth Schedule to the Customs and Excise Act, 1952, or a licence granted on the provisional payment of reduced duty with a view to subsequent adjustment to the, duty payable under the said paragraph 3 or the said paragraph 6; or

(ii) the Commissioners of Customs and Excise certify that no application under any of the said paragraphs has been made in respect of the period for which the excise licence for the time being in force was granted, but that if such an application had been made such a licence as is mentioned in sub-paragraph (i) of this paragraph could properly have been granted.

LORD MANCROFT: This Amendment and the next one go together, and I am happy to find for my own safety and security that they are printed on one piece of paper. They are really no more than drafting Amendments. It is a small point. What is involved is the necessity to make this provision in the Bill complementary to a similar provision in the Rent Acts. I beg to move.
Amendment moved—
Page 33, line 18, leave out from ("the") to end of line 19 and insert ("restrictions on the obtaining of possession by the landlord imposed by section three of the Rent and Mortgage Restrictions (Amendment) Act, 1933 apply in relation to the tenant,)."—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment is consequential. I beg to move.
Amendment moved—
Page 33, line 21, leave out ("that Act") and insert ("the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920;").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD OGMORE LORD OGMORE moved, in subsection (1), to omit all words beginning with "or", in paragraph (c), down to the end of the subsection. The noble Lord said: This Amendment has been put down by my noble friend, Lord Silkin, really to obtain from the Government the explanation for the inclusion of paragraph (d) of Clause 42 (1) in the Bill. As your Lordships may remember, I raised this matter on Second Reading and then said that I hoped that at some stage the Government would explain why they have included the provision regarding licensed premises in this clause. The position is

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that under paragraph (d) the greatest number of licensed premises are excluded from the benefits of the Act. They share this fate, dismal or otherwise, with agricultural holdings, mining leases and certain premises to which the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, applies.
However, there are types of licensed premises to which the Bill applies. They are to be found, though not easily to be found, in the exceptions to paragraph (d). I have gone through the Fourth Schedule to the Customs and Excise Act, 1952, and find they are premises like seasonal hotels, residential hotels which have licences to supply wines to guests but have no licence to supply the ordinary passing trade, restaurant cars, buffets on railway stations, and so on. These come under the provisions of the Bill, but the broad generality of hotels, inns and public-houses do not. I want to know why the Government exclude hotels other than those I have mentioned from the Bill. They are very different from agricultural holdings, mining leases and small premises to which the Rent Restrictions Acts apply. I can understand the argument which may be adduced by the Government, that the compensation provisions of the Licensing Act already apply to hotels, inns and public-houses. That is true, of course. If an inn loses its licence, there are provisions for compensation; and an inn which may have its licence removed because of a fault on the part of the manager, which is very easy to make under the Licensing Act, is often insured against loss of licence. But I cannot see how that really affects the need for the premises themselves, apart from the licence, to come within the purview of this Bill. It seems to be quite a different thing from an agricultural holding, which is a business amply covered by legislation. In this case the fabric, the building, needs protection under the Bill, even though the licence comes under special provisions of the licensing Statutes. Though we do not propose to press this Amendment, for the benefit of those who have to construe the Bill—and from what we have seen already it is not going to be an easy matter—a little enlightenment on this clause might be very welcome. I beg to move.
Amendment moved—
Page 33, line 21, leave out from ("Act") to end of line 40.—(Lord Ogmore.)
LORD MANCROFT: The noble Lord, Lord Ogmore, has put the point very fairly. He raised this matter on Second Reading and I intended to try to give him some sort of reply then, but time was against us and we had to hurry on. So I will try to explain this valid and important point now as shortly as I can. As the noble Lord, Lord Ogmore, states, the present situation is that licensed restaurants and hotels are in Part II but the ordinary public-house is outside it. The reason for the exclusion of the ordinary public-house is that in the view of the Government it is most important, if the licensing laws are to be properly administered, that there should not be any impairment of the control exercised by the licensing justices. This means not only that it should be possible to get rid of a tenant to whom the justices have stated they are not prepared to grant or renew a licence, but that the landlord should have reasonable latitude, without waiting for that point to be reached, to get rid of a tenant if he conducts the business in such a way as to give reason to suspect that the police would object to the renewal of his licence.
The alternative to exclusion would be to leave public-houses in Part II and then give the landlord the right to take possession on these grounds under Clause 36. This would not, I think, be satisfactory, because it would divide between the county court, and in exceptional cases the High Court, and the licensing justices the jurisdiction which I think the noble Lord, Lord Ogmore, would agree is much better left in the hands of those who best understand the subject and the locality—that is, the licensing justices. The exclusion of public-houses from this part of the Bill is the result solely of the Government's concern for the proper control of all licensed premises and is in no way the consequence of pressure of any sort at all. The position of the public-houses which I have described under this Bill is in point of fact precisely the same as under the Labour Party's temporary Act of 1951—that is, the Leasehold Property (Temporary Provisions) Act. The reasons which led to the exclusion of public-houses from the temporary Act were exactly the same as I have described. They were accepted as valid by

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the Government of which the noble Lord was then a member and apply with greater force to permanent legislation. The device adopted in Clause 42 (1), (d), for excluding public-houses is taken from that temporary Act. I think that is a satisfactory conclusion to a difficult problem, and I hope it will satisfy the noble Lord.
LORD OGMORE: I see the difficulty of the Government in this matter. Of course the licensing justices might be very much prejudiced if all hotels and inns came within the purview of this Bill when it becomes an Act. Possibly on the whole the Government have done rightly in this matter. I think it is perhaps a good thing, at all events with certain classes of property. The way in which they have been divided is that where the licence is the main business the matter is left to the magistrates; where the licence is what might be called the secondary or ancillary business of the hotel, then the hotel comes under the provisions of this Bill. You cannot get absolute justice in this world, and I think that in a rough and ready way that is probably the best method of dealing with this matter. My noble friends and I do not intend to press this Amendment and I beg to withdraw it.
Amendment, by leave, withdrawn.
Clause 42, as amended, agreed to.
Clauses 43 to 51 agreed to.
Clause 52 [Jurisdiction of county court is where lessor refuses licence or consent]:
LORD MANCROFT: This is purely a drafting Amendment, and a minor one at that. I beg to move.
Amendment moved—
Page 38, line 29, leave out ("refuses") and insert ("withholds").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 52, as amended, agreed to.
Clause 53 agreed to.
Clause 54 [Compensation for possession obtained by misrepresentation]:
9.25 p.m.
LORD SILKIN LORD SILKIN moved, after subsection (1) to insert:
"(2) Where under Part 1 of this Act an order is made for possession of the property comprised in a tenancy on the ground contained in section 12 (1) (a), or under Part II of this Act the Court refuses an order for the
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grant of a new tenancy on the ground contained in section 30 (1) (g), then without prejudice to the rights of the tenant under the xlast preceding subsection, if it appears to the Court after the expiration of two years from the date of such order or refusal that no effective step has been taken by the landlord to carry out the demolition or reconstruction of the premises, the Court may order the landlord to pay to the tenant such sum as appears sufficient as compensation for damage or loss sustained by the tenant as the result of the order or refusal."
The noble Lord said: This is an attempt to deal with the problem arising where a landlord gets possession of premises or, through his instrumentality, a tenant is refused a statutory tenancy because the landlord satisfies the court that it is his intention to carry out redevelopment of the premises. This matter gave a good deal of trouble in another place, and a considerable time was devoted to the case where a landlord obtains possession by a representation which is either false or misleading, where he conceals material facts, or where he either never had any serious intention of redeveloping, or finds afterwards that, having got possession of the property which he desired to redevelop, it now suits him better not to do so.
The Government have made an attempt to deal with the case of a landlord who, by misrepresentation or the concealment of facts, induces the court to make an order favourable to himself. In such a case the court may order the landlord to pay to the tenant compensation in respect of damage or loss which the tenant has sustained. In my view, however, this does not go far enough. It is often difficult to establish that a landlord has obtained an order by misrepresentation or the concealment of facts. The landlord may have gone through all the motions that he is required to under the Bill, of applying for planning consent, of preparing plans, getting by-law consent, and all the consents necessary; and then, having got possession, he may desire to do nothing at all. He has not really misrepresented, nor has he concealed, material facts—or at any rate it may be difficult for a tenant to establish that he has done so. What I suggest in this Amendment is that where, after three years, the landlord has taken no effective step to carry out the redevelopment on the strength of which he obtained possession, he should be liable for damages in the same way as if he were

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found guilty of misrepresentation of the concealment of material facts. I think at the end of two years one could definitely say whether or not he was going on with the redevelopment.
In some cases, it will be found that the landlord has made no attempt to redevelop at all, but has re-let or sold the premises. At any rate, it will frequently be possible to establish that not only has no effective step been taken, but that no effective step is going to be taken, because the landlord has put it outside his control to take such step. In that case, surely the tenant who has suffered damage ought to be entitled to recover from the landlord such damage as he can establish that he has sustained. In fact, this Amendment is really carrying a stage further—but not a long stage further—what I think it was the intention of the Home Secretary to achieve, namely, not to let a landlord recover possession on the ground that he was going to redevelop, and then for him not to redevelop. This Amendment is the best that I can frame for achieving that end. It may well be that the noble and learned Lord can find better words for achieving it, but I hope he will agree with me that we do want to give the tenant a right to recover damages in the circumstances which are contemplated in this Amendment. For those reasons, I beg to move.
Amendment moved—
Page 39, line 36, at end insert the said subsection.—(Lord Silkin.)
THE LORD CHANCELLOR: Nothing could be clearer than the purpose of the noble Lord and the language by which he seeks to give effect to it. But I approach this matter from a somewhat different angle. One of the grounds upon which the landlord is entitled to recover possession is that he may redevelop his land. If he makes use of that provision of the Act improperly—making misrepresentations in order to secure the order of the court—then he is guilty of art offence, and it is quite right that he should be punished for it. But it is something quite different if, having the intention to redevelop, through no fault of his own he is precluded from carrying it out. It may be because of his insolvency; it may be because he cannot obtain finance owing to a change in economic circumstances;
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it may be he has gone bankrupt, or it may be that he is dead. In those circumstances, surely it is wrong. The tenant has suffered no greater loss because the landlord has been unable to develop.
The purpose of putting this provision in the Bill is that it may act as a deterrent, and a man shall not by misrepresentation secure an advantage which he would not otherwise get. It will not operate as a deterrent if he has a genuine intention but is precluded by economic circumstances from carrying out that intention. We do not think it is right in those circumstances that he should be called upon to pay compensation for something that arises through no fault of his own at all. As I say, we approach this from a somewhat different angle. The purpose of this clause is to prevent the landlord from making an improper use of the earlier provision of the Bill, and if he makes a misrepresentation he must suffer for it. But he really ought not to be made to suffer a further misfortune, because maybe he has already suffered a misfortune in the circumstances which have made it impossible for him to carry out his intention. I hope the noble Lord will see the wisdom of that.
There is something wider still, as it appears to me. Really the noble Lord is putting upon a man who is presumed to be innocent until he is guilty the burden of proving his innocence. Here we put the burden, and I think rightly, upon the tenant to prove that the landlord has been guilty of an offence and made a grave misrepresentation to the court. A man ought not to have put upon him the burden of proving his own innocence, and that is what is involved by and large in the Amendment which the noble Lord is seeking to put forward. Moreover, he is going further. He is really making the man pay even though he is innocent. I do not think that is a fair extension of the provision which we have put into the Bill. It is an extension but, with great respect to the noble Lord, I do not think it is a fair extension and I could not advise Her Majesty's Government to accept it.
EARL JOWITT: I see the force of the Lord Chancellor's point. On the other hand, there may be a case where a man simply changes his mind. There is no

635
alteration in circumstances; he has not gone bankrupt or insolvent, or anything of that sort. He thought to himself, when he was before the court, that he was going to develop, and he has changed his mind. He now thinks he is not going to develop. I realise at once that there is a vast distinction between that and the case of a man who is telling lies to the court—because, after all, the state of his intention, as a distinguished judge once said, is as much a matter of fact as is the state of his digestion, and it is terribly difficult for the court to say what the position is. It is difficult to say whether a man was perfectly honest when he was before the court and did intend to develop, as he said he did, or whether he never intended to develop at all and that the facts are that, without any change in circumstances at all, he never has developed. I realise the logical distinction between the two—they are poles apart; I admit that at once. It is difficult for the courts to tell which is the truth.
Would the Lord Chancellor consider a clause—I am not attempting to draft it at the moment—on these lines. Suppose that where the clause says
"… the court may order the landlord. …"
we put
"… the court may order the landlord in the absence of special circumstances"
or
"in the absence of some excuse"—
or something of that sort. Because I quite agree it would be unfair to make this order if there had been some real change in circumstances such as the Lord Chancellor suggested. But if the circumstances remained exactly the same and the gentleman changed his mind, then I think there is a case to consider whether or not it would not be fair to say that he should pay compensation. The facts are then that he got the tenant out, asserting that he wanted to develop. Two years have passed and he has not developed, and the liability of the landlord to pay compensation depends now, as this Bill is drafted, upon the question, which is difficult to determine, as to whether or not his change of intention was a genuine subsequent change of intention or whether he said he was going to develop but really never meant to develop at all.
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I suggest that the Lord Chancellor might consider whether it is possible to frame some form of words to guard against the sort of case which he has in mind where there have been subsequent circumstances which make it impossible for the man to do what he genuinely anticipated he would do at the time: in that case he ought to be protected. If, on the other hand, the circumstances remained the same and the landlord, having got possession of the premises on the ground that he intended to develop, says: "I have thought it over and have changed my mind," I should have thought there might well be a case for considering whether it would not be right to give the tenant some compensation. It would be difficulty to find a form of words on the spur of the moment—I could not attempt to do it now—but there is an obvious distinction there, and it may be that, if the Lord Chancellor looked at it, he would be able to find a form of words which would meet such a case.
THE LORD CHANCELLOR: There is one aspect of the case which the noble and learned Earl has ignored. It will not be a matter of course to satisfy the court under Clause 13 of the Bill that the landlord desires to resume possession in order to redevelop. If the noble and learned Earl will remember, the landlord has to satisfy the court that he
"has made such preparations (including the obtaining, or if that is not reasonably practicable in the circumstances preparations relating to the obtaining, of any requisite permission or consent, whether from any authority whose permission or consent is required under any enactment or from the owner of any property) for proceeding with the re-development as are reasonable in the circumstances. …"
He may, of course. There is a possibility that a man may change his mind; but, if he has made up his mind to develop and has gone through all these motions, making preparations which will satisfy the court that he intends to develop, it is very unlikely that he will then change his mind unless there are such compelling circumstances as I have mentioned. I think the case is a very unlikely one, and I repeat what I said before: refinement upon refinement, complication upon complication, may be good for the legal profession, but they do not, I think, help the body politic. One is bound to legislate on comparatively broad lines. There are, goodness knows,

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enough refinements in this Bill already, and therefore I do not think it desirable or wise to try to incorporate further qualifications in this provision. I understand that the noble Lord is not going to press this Amendment. If anything can be thought of which would meet the sort of case he had in mind, I should be happy to consider it. But I would utter this word of warning—and I am sure the noble and learned Earl opposite will appreciate what I am saying—one does get into endless difficulties by trying to provide for every case. I think, as a matter of comment (if I may make one on a Bill which in so many respects so admirable), that as there are complications in it already, it is not possible to do justice in each individual case.
LORD SILKIN: Of course, there is a good deal of force in what the noble and learned Lord has said, and one does not want to make this Bill more complicated than necessary. On the other hand, where one cart point to manifest injustices, we ought to make an attempt to deal with them. In my view, these injustices almost invariably occur on the one side and not on the other. Of course, we can simplify this matter very much if we allow the landlord always to have the benefit of the doubt. Cannot we for once give the tenant the benefit of the doubt? However, having said that, and the noble and learned Lord having very fairly kept the door open just a little bit—although it may be difficult to push one's way through—I will accept that and, in the circumstances, withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 54 agreed to.
Clause 55 agreed to.
Clause 56 [Modification on grounds of public interest of rights under Part II]:
THE LORD CHANCELLOR: This and the following Amendment are drafting Amendments to meet points which were raised by the Dock and Harbour Authorities Association. They are, if not purely drafting Amendments, so little more that probably it will not be necessary for me to discuss them with the Committee. I beg to move.
Amendment moved—
Page 41, line 2, leave out from ("that") to ("for") in line 3, and insert ("it is requisite").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: I beg to move this consequential Amendment.
Amendment moved—
Page 41, line 5, after ("corporation") insert ("that the use or occupation of the property or a part thereof should be changed by a specified date,").—(The Lord Chancellor.)
On Question, Amendment agreed to.
9.45 p.m.
LORD SILKIN LORD SILKIN moved, after subsection (3) to insert:
"(4) Where the interest of the landlord or any superior landlord in the property comprised in any tenancy belongs to the National Trust, and the Minister of Works certifies that it is requisite, for the purpose of securing that the properly will as from a specified date be used or occupied in a manner better suited to the nature thereof, that the use or occupation of the property should be changed, paragraphs (a) to (c) of subsection (1) of this section shall apply as they apply where a certificate is given under that subsection."
The noble Lord said: In another place, representations were made to the Home Secretary on behalf of the National Trust. As I understand it, the position is that the National Trust have the ownership of a considerable number of buildings, which generally they are anxious to retain for residential purposes. It has sometimes been difficult, by reason of the nature of these premises, for the Trust to ensure that they are occupied for the purposes which they wish to secure, and they have let them for business purposes, or purposes other than residential. The purpose of this Amendment is to enable them, if they have the opportunity of letting the premises for residential purposes at the expiration of their tenancy, to get possession if they satisfy the Minister of Works who issues the certificate. Strong representations were made to the Home Secretary on behalf of the National Trust, and he promised in another place that an appropriate Amendment in this place would be acceptable. I believe that the Amendment I am putting forward is acceptable and fully carries out the undertaking of the Home Secretary. I beg to move.
Amendment moved—
Page 42, line 7, at end insert the said subsection.—(Lord Silkin.)
THE LORD CHANCELLOR: This is an admirable Amendment which I have great pleasure in commending to the Committee.
On Question, Amendment agreed to.
LORD SILKIN: This Amendment is consequential. I beg to move.
Amendment moved—
Page 42, line 11, at end insert ("and in the last foregoing subsection the expression 'National Trust' means the National Trust for Places of Historic Interest or Natural Beauty.").—(Lord Silkin.)
On Question, Amendment agreed to.
LORD SILKIN LORD SILKIN moved to add to the clause:
"(5) Where a Minister or Board in charge of a Government department has certified under this section the landlord shall serve upon the tenant a copy of such certificate and if within one month from the date of such service the tenant gives notice to the Minister or Board as the case may be that he objects to such certificate then the Minister or Board shall arrange for the tenant to be heard by a person appointed by the Minister or Board and shall consider the report of such person and make a determination. Pending such determination the provisions of section 63 of this Act shall apply with the necessary modifications."
The noble Lord said: I beg to move the next Amendment standing in my name. This is an Amendment to Clause 56, which enables the landlord, where that is a Government Department, to obtain possession of premises after obtaining from the appropriate Minister a certificate that it is within the public interest that the tenancy shall not be renewed. The purpose of my Amendment is to secure that the tenant shall have the opportunity of making representations if such a certificate is issued. My proposal is that where a Minister issues a certificate a copy should be sent to the tenant, who should then have the right to make representations to the Minister and to be heard, either by way of a public inquiry or by way of a private hearing, by somebody on behalf of the Minister, in the same way as if he were objecting to an order made by a Minister in other circumstances.
In that way the tenant would have an opportunity of having his case put to the Minister as to whether his claims for renewal of the tenancy were capable of overriding the public interest—and, indeed, of making representations, if necessary, that the public interest did not require that the tenancy should not be renewed. It is, in short, in the interests of fair play and of providing the tenant with an opportunity of stating his case and raising an objection that I am moving this Amendment. If it is not accepted
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the tenant will be obliged to accept without question the statement of the Minister, and will have no opportunity of raising any point on it. He will have no assurance that his point of view has been taken into consideration, and it is possible that injustices may be done. It is certain that tenants will feel a sense of injustice if such an order is made, if certificates are issued without a tenant having the slightest chance of raising any point on the certificate. Whilst I do not regard this Amendment as being the last word in procedure. I hope that the noble and learned Lord will see his way to provide some opportunity for the tenant to be heard in these cases.
Amendment moved—
Page 42, line 11, at end insert the said subsection.—(Lord Silkin.)
THE LORD CHANCELLOR: The history of this clause has been rather curious, because in another place my right honourable friend was very much pressed, as he had been outside the House by deputations, not further to delay the taking of possession by the Department or local authority that required the premises, by requiring a certificate of the Minister, but (particularly by the local authorities) to allow the local authorities to give a certificate which would be sufficient to show that they did require possession in their own interests. And from both sides of the House he was pressed by those representing local authorities not to grant this appeal, as it were, to the Minister to give his certificate but to leave the giving of the certificate in the hands of local authorities. That pressure came from both sides. My right honourable friend resisted that pressure. He said that the certificate should be given by the Minister responsible to Parliament. He thought that that was right; but undoubtedly it must be recognised that that did, at least in the case of the local authorities, interpose some delay.
My right honourable friend was able to some extent to satisfy those who spoke for the local authorities by saying that he would use his best endeavours to see that that procedure was speeded up and that delay was as short as possible. As we all know, if we are to go a step further and the Minister is to institute the sort of inquiry—whether a public inquiry or a private hearing—which is

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entailed where there is a compulsory purchase order, there may be a very considerable further delay. After all, these certificates are given by the Department for and in respect of its own property, or in respect of local authority property, that they want it for their own purposes. No one knows except themselves whether they do or whether they do not. I suggest that if the certificate is given by the Minister who is responsible, that ought to be sufficient. Of course, I know the sort of arguments that can be used, particularly at this time. I can see that the noble Lord, Lord Ogmore, is thinking very much the same thing as I am. I venture to think it would be difficult for me to make this concession in view of the representations that have been made, particularly by local authorities. I do not know whether the noble Lord wishes to press this Amendment. I hope that, closely connected as he is with local authorities, he will appreciate their point of view in the matter. I will, if the noble Lord wishes, have a further word with my right honourable friend about it, but I do not think from what he said, he having met the local authorities so far and resisted them so far, that he would be prepared to change his mind about it. The matter is nicely balanced, but on the whole I think it is better that the clause should stand as it is, without further amendment.
LORD SILKIN: I did not gather that the noble and learned Lord was resisting this Amendment with great enthusiasm.
THE LORD CHANCELLOR: I say it is nicely balanced.
LORD SILKIN: So far as I know, this is the only case in the whole of the Bill where a decision is made without a tenant being heard or having the opportunity of being heard. He loses his rights at the instance of a Minister, who may know nothing of the circumstances—at the request, if you like, of a local authority who may be in a great hurry and whose case may have little merit. And apparently the main reason is that it might be urgent. I cannot conceive circumstances in which it would be so urgent as to justify the depriving of a tenant of an opportunity to make representations. May I say, with respect to the local authorities, that my long association with them has taught me that
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sometimes they can be unreasonable. I do not wish to pass this Amendment, but I am not really satisfied with the explanation. I feel that the balance should be on the side of giving the tenant an opportunity to have his say.
Nobody knows better than the noble and learned Lord that the administration of justice is not speedy. One of the justifications for the slowness of our procedure is that we try to do justice between the parties and give every party the fullest opportunity of stating his case and of knowing what the other side is going to say. It is because of that that we are slow, and speedy justice is not always justice. In this case, it is proposed to deprive the tenants of justice altogether. I think this point should be looked at again. While I withdraw my Amendment, because I have no alternative, I ask the noble and learned Lord to have another word with his right honourable friend to see whether something cannot be done to give the tenant the satisfaction of putting his case.
EARL JOWITT: I should like to add my plea, if I may. I do not pretend to have followed the details of this Bill, but what I have heard just now is to me a little disquieting, and I dare say a little disquieting to noble Lords on the other side. I understand that a citizen may be deprived of his rights without having a chance for his representations to be heard by anybody. If I have it right (and I am not sure that I have) I think, particularly in the face of some of the experience we have all had recently, that we should take steps about this matter. It is far better that we should be a little slow in our administration than that we should take from anybody anything which he thinks he has without giving him the right to be heard. I believe that that will find an echo just as warmly on the other side of the House as on this. I may be butting in and may have quite misunderstood the point, but, if I am right, and a man may be in some way prejudiced without having the right to be heard, I would ask the noble and learned Lord—he has already said he would do so—to look at the point again in conjunction with the right honourable gentleman the Home Secretary, who, I am sure, is the last person in the world to encourage that sort of thing, and see whether it would not be better, even at the cost of some little time, to see that such a thing does not happen.
THE LORD CHANCELLOR: I repeat what I have said before. It is not a question of anybody being deprived of his rights. The question is: what rights shall be given to him? Having said that, I repeat what I said before—that I will have another word with my right honourable friend. But I am a little apprehensive. I shall get into terrible trouble with the local authorities.
LORD SILKIN: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 56, as amended, agreed to.
Clause 57:
Termination on special grounds of tenancies to which Part II applies
(3) Where the landlord's interest in the property comprised in any tenancy is held by statutory undertakers, nothing in this Act shall invalidate an agreement to the effect—
(a) that where the Minister or Board in charge of a Government department certifies that possession of the property comprised in the tenancy is urgently required for carrying out repairs (whether on that property or elsewhere) which are needed for the proper operation of the landlord's undertaking, the tenancy may be terminated by notice to quit given by the landlord of such length as may be specified in the agreement, if the notice contains a copy of the certificate; and
10.0 p.m.
LORD MACPHERSON OF DRUMOCHTER LORD MACPHERSON OF DRUMOCHTER moved, in subsection (3) (a), after "undertaking" to insert:
"or for carrying out an alteration to or development of that undertaking."
The noble Lord said: I beg to move the Amendment standing in my name, and in doing so I will declare my interest, being a member of the Port of London Authority. This Amendment sets out the purposes for which the Minister may give a certificate under Clause 57 (3), so that a decision may be obtained by a port authority at less than six months' notice for carrying out necessary or urgent alterations or development of the port undertaking. Port and harbour authorities in the United Kingdom have an exceptionally heavy programme ahead of them in the years to come, in order to make good the war damage and to overtake arrears of capital development of the harbours which are necessary in order to equip their undertaking to meet the modern requirements of the shipping
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industry. We therefore envisage many occasions and many different circumstances in which recourse will have to be made to Clauses 56 and 57 of this Bill.
As the Bill stands now, the only purposes for which the authority can obtain a decision under short notice are those specifically laid down. There are three named: for the purpose of effecting repairs, in the interests of national security, or (thanks to the Amendment to Clause 56 moved by the Lord Chancellor this evening and accepted by the Committee) a change in the use or occupation of the property. We can, however, foresee many other reasons why it will be necessary, in the interests of port and harbour development, to make application to the Minister to act at short notice. One example is the case in which we wish to have a building pulled down so that the necessary development can take place. But under none of these heads have we authority to apply to the Minister for a certificate to do work of that nature. I am sure the noble and learned Lord the Lord Chancellor is just as anxious as anyone else to see that under proper safeguards there is no unnecessary restriction on the development work of the ports and harbours of this country, and I therefore trust he will give the Amendment favourable consideration.
Amendment moved—
Page 43, line 19, after ("undertaking") insert ("or for carrying out alteration to or development of that undertaking.").—(Lord Macpherson of Drumochter.)
THE LORD CHANCELLOR: This Amendment has been very clearly explained by the noble Lord. He is quite right in saying that I have no wish whatever to stand in the way of the proper development of statutory undertakings. The difficulty I feel is this. In the ordinary way, the six months' notice is given to the tenant, and here (although I know the noble Lord, Lord Silkin, will look at me with suspicion) I am anxious that justice should be done to the tenant. If six months is the usual notice that tenants should have, an exception should not be made in favour of a statutory undertaking unless there is some compelling reason. We have recognised a compelling reason where some form of repairs is necessary, but where what is

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intended is "alteration to or development of" the undertaking it is difficult to be convinced that six months' notice could not well be given. It is difficult to suppose that any alteration or development will not be sufficiently foreseen to give six months' notice to the tenant, who will be unduly prejudiced if he has less than six months' notice.
I must therefore say this to the noble Lord. As he knows this matter has been considered departmentally. Unless some more cogent reason than has yet emerged can be advanced for giving to statutory undertakings a special privilege which is not given to ordinary landlords, I find it impossible to concede the Amendment for which he asks. We do not think it right, in the absence, as I say, of compelling evidence, that such an exception should be made. I hope that if the noble Lord has any further evidence which he can give he will put it before the Department, although I have no doubt that this has already been put forward with all the force that they can command, by the powerful body which he represents. The proposal having been considered and rejected, I think it unlikely that the position will be reconsidered. At present I can only say that, regretfully, I must refuse the Amendment, and I ask your Lordships not to support the noble Lord.
LORD MACPHERSON OF DRUMOCHTER: At this late hour I do not wish to quarrel with either the Department or the noble and learned Lord, although in the opinion of my friends in the port and harbour industry there will be occasions when the six months will be a hardship. However, in view of what has been said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 57 agreed to.
Clauses 58 to 61 agreed to.
Clause 62:
Jurisdiction of court for purposes of Parts I and II and of Part I of Landlord and Tenant Act, 1927.
(6) Where in any such proceedings an assessor is summoned by a judge under the said subsection (1),—
(c) the remuneration of the assessor shall be defrayed out of moneys provided by Parliament.
LORD MANCROFT LORD MANCROFT moved, in subsection (6) (c), after "assessor" to insert:
"shall be at such rate as may be determined by the Lord Chancellor with the approval of the Treasury and."
The noble Lord said: This Amendment concerns something quite different—namely, the payment of assessors whom, as your Lordships will remember, the county court judge can summon at various stages in the proceedings contemplated under this Bill. The Bill as it stands says merely that the assessors are to be paid out of public funds, but it does not say expressly who is to settle the rate of payment. The result will be that the County Court Act, 1934, will apply, and this provides for the remuneration of assessors to be "at such rate as may be prescribed," and the Act goes on to define "prescribed" as meaning prescribed by County Court Rules. The position, therefore, is that the rate of payment is to be settled by the County Court Rules Committee. That is all right where the cost of the assessors is borne by the parties to the proceedings. As, however, in proceedings under this Bill the assessor is to be paid from public funds, it seems right to the Government that the rate of payment ought to be settled by a Minister, with the consent of the Treasury. This seems both reasonable and proper, and I hope that your Lordships will accept the Amendment. I beg to move.
Amendment moved—
Page 47, line 4, after ("assessor") insert the said words.—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 62, as amended, agreed to.
Remaining clauses agreed to.
First Schedule [Supplementary Provisions as to Payments for Accrued Tenant's Repairs]:
LORD MANCROFT: This Amendment is consequential on Amendment No. 9. I beg to move.
Amendment moved—
Page 54, line 11, leave out ("such greater number of instalments") and insert ("instalments of such smaller amounts").—(Lord Mancroft.)
On Question, Amendment agreed to.
First Schedule, as amended, agreed to.
Second to Fourth Schedules agreed to.
Fifth Schedule [Provisions for purposes of Part I where Immediate Landlord is not the Freeholder]:
10.10 p.m.
THE LORD CHANCELLOR: This is a somewhat long Amendment, but I can state the effect in a few words. It is simply a procedural Amendment to enable the tenant to apply in proceedings after they have started. It is an Amendment to paragraph 9, which provides relief for the occupying tenant where a superior landlord enforces a right of forfeiture for breach of covenant against the immediate landlord. The tenant is obviously interested in that, and this will enable him to apply after the proceedings have started. I beg to move.
Amendment moved—

FIFTH SCHEDULE
Page 60, line 47, leave out from beginning to end of line 10 on page 61, and insert:—
("(c) the court makes an order for the recovery by the superior landlord of possession of the property comprised in the tenancy,
the tenant shall not be required to give up possession of that property unless he has been a party to the proceedings or has been given notice of the order; and the provisions of the next following sub-paragraph shall have effect where he has been such a party or has been given such a notice:
Provided that where the tenant has been a party to the proceedings the said provisions shall not apply unless he has at any time before the making of the order made application in the proceedings for relief under this paragraph.
(2) If the tenant within fourteen days after the making of the order, or where he has not been a party to the proceedings, within fourteen days after the said notice, gives notice in writing to the superior landlord that he desires that the following provisions of this sub-paragraph shall have effect and lodges a copy of the notice in the court—

(a) the tenant shall not be required to give up possession of the said property but the tenancy mentioned in head (b) of the last foregoing sub-paragraph shall be deemed as between the tenant and the superior landlord to have been surrendered on the date of the order; and

(b) if the term date of the tenant's tenancy would otherwise fall later, it shall be deemed for the purposes of Part I of this Act to fall at the expiration of seven months from the making of the order.")—(The Lord Chancellor.)

On Question, Amendment agreed to.
Fifth Schedule, as amended, agreed to.
Sixth to Eighth Schedules, agreed to.
Ninth Schedule [Transitional provisions]:
LORD MANCROFT: This Amendment, which is really a machinery Amendment, only substitutes a new paragraph for the present paragraph 2 of the Ninth Schedule, which is defective. It deals with recovery by the landlord of expenditure incurred by him on essential repairs under Section 6 of the temporary Act of 1951. This is a very long and complicated Amendment, and I do not think your Lordships would wish me to embark on it at this time of night. Even if your Lordships did, I do not think I could explain it correctly at all, I am happy to be in a position to assure the Committee that it is non-contentious and purely a machinery Amendment. I beg to move.

NINTH SCHEDULE
Page 66, line 42, leave out Paragraph 2 and insert:
("2.—(1) Nothing in this Act shall prevent the recovery from a tenant who retains possession of a dwelling-house by virtue of section six of this Act of any amount due under section six of the Leasehold Property (Temporary Provisions) Act, 1951, in respect of work executed on the dwelling-house; but where any such amount is recoverable by the landlord (as defined by subsection (1), and the proviso to subsection (4), of section twenty-one of this Act) it shall be recoverable in accordance with the following provisions of this paragraph but in no other manner.
(2) The amount shall be treated for the purposes of this Act as a payment for accrued tenant's repairs, and accordingly the question whether any and if so what amount is due as aforesaid shall be deemed to be included in the matters specified in paragraphs (b) to (d) of subsection (2) of section seven of this Act.
(3) Sub-paragraph (6) of paragraph 4 and paragraph 12 of the First Schedule to this Act shall apply in relation to the amount as they apply in relation to expenses incurred by the landlord in ascertaining what initial repairs are required in consequence of failure by the tenant to fulfil his obligation under the former tenancy.")—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment adds a new provision to the Ninth Schedule, "Transitional Provisions." Its effect is that where the tenant is entitled to compensation under the Bill and also under the terms of his lease he has a choice between the two, but he is not entitled to both. This Amendment applies only to tenancies current at the

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commencement of the Bill. In practice, the result of the Amendment will be that the tenant will receive whichever compensation is the greater. I think the Committee will agree that it is simpler to give him the choice than to provide expressly for his receiving whichever is the greater. I beg to move.
Amendment moved—
Page 67, line 32, at end insert—
("(2) Where a tenant under a tenancy which was current at the commencement of this Act would but for this sub-paragraph be entitled both to—

(a) compensation under section thirty-seven or section fifty-eight of this Act; and

(b) compensation payable, under the provisions creating the tenancy, on the termination of the tenancy,

he shall be entitled, at his option, to the one or the other, but not to both.")—(Lord Mancroft.)
On Question, Amendment agreed to.
Remaining Schedule, as amended, agreed to.
House resumed.

HOUSING (REPAIRS AND RENTS) (SCOTLAND) BILL
Order of the Day for the Third Reading read.
THE EARL OF ONSLOW: My Lords, on behalf of my noble friend Lord Home I should like to say that it is not proposed to move the Third Reading of this Bill until July 14.
Order discharged accordingly.

ROYAL WAREHOUSEMEN CLERKS AND DRAPERS' SCHOOLS BILL [H.L.]
Returned from the Commons, agreed to with Amendments.
TEES CONSERVANCY (DEPOSIT OF DREDGED MATERIAL) BILL [H.L.]
Returned from the Commons, agreed to with Amendments.

HARTLEPOOL PORT AND HARBOUR BILL
Brought from the Commons; read 1a, and referred to the Examiners.
House adjourned at a quarter past ten o'clock.