Sitting of 11 July 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  MILLPORT PIERS (AMENDMENT) ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  TELEPHONE SERVICE

    Kiosks, Manchester (Gorton)
    Mr. Zilliacusasked the Postmaster-General whether he is aware that there are only three telephone booths in the Abbey district of Gorton in Manchester, that one of these, being situated in Abbey Hey Lane Post Office, is not available after 6 p.m. or on Sundays or Wednesday afternoons, that this is a working class district with very few private telephones, and that the resulting inconvenience is considerable and widely felt; and whether he will take steps as a matter of urgency to have at least two more outside telephone booths installed in the district.
    The Postmaster-General (Dr. Charles Hill): I am arranging to replace the kiosk inside the Abbey Hey Post Office by one outside so as to give a 24-hour service, and also to provide a new kiosk. This will, I think, meet existing needs, but the position will be closely watched.
    Mr. Zilliacus: I thank the right hon. Gentleman for what he has done, but I hope he will think of putting an extra one in as well.

    Stoke-on-Trent
    Dr. Strossasked the Postmaster-General the number of subscribers to the telephone service in Stoke-on-Trent; how many share a line; and how many are on the list awaiting a new installation.
    Dr. Hill: The numbers are: 11,422, 2,426 and 769, respectively.
    Dr. Stross: Could the right hon. Gentleman tell me how these figures compare with, say, a year ago, and secondly, if many people have given up their telephones as a result of expecting to pay more for them in future?
    Dr. Hill: If the hon. Gentleman will put down those questions, I will get him the figures.

  POST OFFICE

    Factories
    Mr. Hobsonasked the Postmaster-General if he is satisfied that the Post Office factories are working to capacity; and if he will make a statement.
    Dr. Hill: The primary function of the Factories Department is the repair of telecommunications and other Post Office equipment, and the maximum use is being made of its resources for this purpose.
    Mr. Hobson: In view of the right hon. Gentleman's reply, can he state why it has been found necessary to dispense with £20,000 worth of plant?
    Dr. Hill: Because it is thought right, particularly in the light of the comments of the Select Committee in 1950, to return to the pre-war position in which Post Office factories devote their attention to repair and not to manufacture, apart, of course, from prototypes.
    Mr. Hobsonasked the Postmaster-General the number of men made redundant in the Post Office factories during the last 12 months, and why.
    Dr. Hill: Because of a decrease in toolsetting work, six dilutee toolsetters were declared redundant on that grade. There have been no discharges of staff, and the six men are now employed as telephone mechanics.
    Mr. Hobson: Does not the right hon. Gentleman think that there is certain work which these factories could do in order to retain the services of these people, particularly in view of the fact that there is very often a time-lag in the delivery of certain telecommunications parts from the manufacturers, in view of the demands of the export trade? Will he look at this matter again?
    Dr. Hill: I am certain that the policy is right, particularly as we are engaged on a three-year programme of telephone expansion. There have been no discharges, and none is contemplated.

    H.M. Telegraph Ships
    Mr. Hobsonasked the Postmaster-General the number and names of Her Majesty's telegraph ships at present in commission.
    Dr. Hill: Four. "Monarch", "Alert", and "Ariel" are in commission, and the fourth, "Iris", is at present refitting.
    Mr. Hobson: In view of the age of H.M.T.S. "Alert", and in view of the fact that she is a reparation vessel, does not the right hon. Gentleman think it is time to replace this vessel at the earliest opportunity?
    Dr. Hill: Yes, I agree with the hon. Gentleman. We have got to the stage of drawings and specifications, and it is hoped soon to begin the replacement.

    Advisory Committees
    Mr. J. Johnsonasked the Postmaster-General how many Post Office advisory committees exist in England and Wales, and which of these are in Warwickshire.
    Dr. Hill: Fifty-seven, of which two, those in Birmingham and Coventry, are in Warwickshire. Another is to be set up in Rugby.
    Mr. Johnson: Will the Minister admit that, even in good Departments like his, there can be misunderstanding, particularly where telephones are concerned? Hence, can I appeal to a good democrat and good publicist like the right hon. Gentleman to press on with these committees, particularly where some mysterious arbiter in a distant county town appears to be the sole arbiter as to who gets or does not get a telephone in the local borough?
    Dr. Hill: I did announce on 21st June that I was proposing to invite and to encourage the establishment of Post Office advisory committees throughout the country, and I am glad to say that Rugby is one of the first areas to act following that announcement.
    Mr. Ness Edwards: In constituting the new Post Office advisory committees—a step which is very much welcomed and approved on this side—would the right hon. Gentleman consider appointing people from the local authorities, who will be known to the people and who can disseminate the information throughout the local authority organisation?
    Dr. Hill: In the lettter on this subject which I have sent to head postmasters, I have deliberately and emphatically mentioned the desirability of seeking representation from local authorities as representing the general body of opinion in the area.

    Sub-Offices
    Mr. F. M. Bennettasked the Postmaster-General what agreements are in force between his Department and the Sub-Postmasters Federation regarding the maximum number of sub-post offices to be authorised in a locality.
    Dr. Hill: None, Sir.
    Mr. Bennett: Even if no formal agreements exist, can my right hon. Friend confirm that when he comes to a decision as to whether or not an additional local sub-post office is necessary, the only considerations that guide him are local consumer requirements? Or does he take into account restrictionist representations by neighbouring sub-post offices which do not want further competition?
    Dr. Hill: I have given the answer "None", and I mean it. My primary concern is with the public facilities and the public convenience in the area, and I want to affirm that this is the prime consideration which affects me.
    Mr. D. Jones: Is the right hon. Gentleman aware that his arbitrary decision to space sub-post offices—particularly in new housing areas—at not less than a mile apart is causing a good deal of anxiety and dissatisfaction in very many parts of the country, particularly in my own constituency, where about 400 or 500 old-age pensioners have to cross a very busy main road in order to get to the sub-office?
    Dr. Hill: I would assure the hon. Gentleman that there is no form of arbitrary rule for all areas relating to a distance of one mile. As many hon.

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    Members know, I receive, and sympathetically consider, proposals which mean distances between offices of less than a mile. I would say to him that I will consider sympathetically any set of circumstances that he brings to my notice. So far as a general rule is concerned, it has been the practice in the past to consider spacing at more frequent intervals than one mile apart to be impossible, but where there are aggregations of population or other special circumstances, no such rule applies and each case will be considered on its merits.

  WIRELESS AND TELEVISION

    Interference
    Mr. Leaveyasked the Postmaster-General what steps he will take to protect radio reception from interference caused by television reception.
    Dr. Hill: Where a T.V. set causes interference with sound receivers which are themselves in proper working order, the Post Office offers the owner of the T.V. set all possible advice to help him cure the trouble. The question of designing T.V. sets so as to avoid such interference is primarily a matter for the radio industry. They are alive to the problem and the Post Office is co-operating with them to the full.
    Mr. Leavey: While noting what my right hon. Friend has said, may I ask him whether he does not feel that something further could be done to bring home to the owners of television sets their specific obligations not to annoy their neighbours who have radio sets—obligations which they accept with their licences?
    Dr. Hill: My hon. Friend will appreciate that, under the Act of 1949, wireless apparatus is specifically excluded from my powers, but I assure him that we are receiving very real co-operation in this matter from the manufacturers and almost invariably from the owners of television sets.

    Ambulance Radio Services (Licence Fees)
    Mr. Haymanasked the Postmaster-General when he expects to reach a decision on the question of the licence fee for ambulance radio services.
    Dr. Hill: Licence fees for mobile radio services are based on the costs of Post Office administration. The fees are higher for ambulances than for police and fire radio services, as the costs of the latter are largely borne by the Home Office. I regret, therefore, that I cannot remove this apparent anomaly by reducing the licence fees for ambulances to the level of the other two services. I am writing to the hon. Member.
    Mr. Hayman: Will the right hon. Gentleman bear in mind that it seems very odd to the layman that the police and fire services, which protect property, can get a licence for £2 a vehicle, while the ambulance service, which exists to save life, has to pay a fee of £3?
    Dr. Hill: I am aware of the anomaly, and I agree with the hon. Member that it may well look odd. From the Post Office point of view, we should, I think, as a general principle relate the charges to the costs incurred by us, and the hon. Member will realise that the costs in respect of the latter group are very much more than in respect of the former group.
    Mr. Hobson: When the right hon. Gentleman is considering what fee shall be charged to these services, will he bear in mind that many of them have had to change their frequencies at their own expense as a result of the coming of I.T.A.?

    Advertisements (Cigarettes and Tobacco)
    Mr. Gordon Walkerasked the Postmaster-General, in view of the decision that there is an incontrovertible statistical association between cigarette smoking and the incidence of lung cancer, whether he will make regulations under Section 4 (4) of the Television Act, 1954, prescribing that there shall be no tobacco advertisements within a quarter of an hour before and after children's programmes.
    Dr. Hill: No, Sir.
    Mr. Gordon Walker: In view of what the Minister of Health has said about the connection between smoking and cancer, does not the right hon. Gentleman feel that it really is indefensible that there should be incitement to smoking in close conjunction with children's programmes?
    Dr. Hill: The programme companies have decided not to include advertisements for tobacco in these programmes. That seems to me to be reasonable. To go beyond that, bearing in mind the smoking advertisements in newspapers and on hoardings, would seem to me to be grandmotherly and petty.
    Mr. Ness Edwards: Would it not be a contribution to better public relations and to the rather improving standard of advertising practice on commercial television if the programme contractors undertook not to exhibit their advertisements for cigarettes and tobacco in association with the children's programmes? Would it not be a contribution to better public and political relations if they were to give such an undertaking?
    Dr. Hill: The programme companies have decided of their own free will not to include such advertisements in the programmes. What the right hon. Gentleman was suggesting to me was that I should bring an affirmative order before this House to modify the schedule to deal with this other quarter of an hour.
    Mr. Beresford Craddock: Has my right hon. Friend taken note of a discussion which took place yesterday at the British Medical Association and which seems to be a direct contradiction to the implications in this Question?
    Dr. Hill: It is not strictly my field, but let nothing I say appear to controvert the acknowledged statistical relationship between heavy cigarette smoking and cancer of the lung.

    Holme Moss Transmitter (Shared Facilities)
    Mr. G. Darlingasked the Postmaster-General what technical reasons prevented the Holme Moss transmitter from being used for both the British Broadcasting Corporation and Independent Television Authority television services.
    Dr. Hill: The B.B.C. mast at Holme Moss was not designed to carry the additional load of a separate I.T.A. aerial of the required size and its transmission link with apparatus at ground level. The B.B.C. offered to share their aerial with the I.T.A. but this would not have given the Authority the radiated power it required.
    Mr. Darling: While appreciating that there are technical difficulties, may I ask the right hon. Gentleman whether he has any persuasive or other powers to make sure that duplication of transmitters will not occur?
    Dr. Hill: As the hon. Gentleman points out, in this case, with the Holme Moss B.B.C. aerial already there, there are serious technical difficulties, but, on the general proposition, as I informed my hon. Friend the Member for Westmorland (Mr. Vane) a little time ago, I am doing my utmost to see that there are not two aerials where one will do.

    Reception, Sheffield
    Mr. G. Darlingasked the Postmaster-General whether he will examine the cost and all the technical considerations involved in erecting a transmitter in the City of Sheffield for local diffusion of all present and future television services operating in the Yorkshire area.
    Dr. Hill: No, Sir. The question of deciding the best means of overcoming reception difficulties at Sheffield, which the hon. Member no doubt has in mind, is a matter for the broadcasting authorities. At present, they are fully engaged on their main development programmes.
    Mr. Darling: Is the right hon. Gentleman aware that there are about 150,000 television licence-holders in this area and that many of them cannot get proper reception? The right hon. Gentleman is, therefore, taking licence money, so to speak, under false pretences. Can this matter be examined? The information would be useful not only to deal with this situation in Sheffield but also for television development on this local basis in other areas.
    Dr. Hill: I will convey what the hon. Gentleman says to the broadcasting authorities, but, as he knows better than most, in the Sheffield area to which he refers there are some hollows that make transmission exceedingly difficult. It is geography that has to be faced in this case.

    Cumberland
    Mr. Whitelawasked the Postmaster-General whether the technical arrangements connected with the installation of the new high frequency wireless and television station in Cumberland have

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    now been completed; when it is proposed to start work on it; and on what date it is hoped to commence transmission from this station.
    Dr. Hill: Preparatory work has already started on the new B.B.C. television station at Sandale, near Carlisle. The permanent transmitters will be ready for service towards the end of 1957, though the B.B.C. hopes to provide a temporary television service before the end of this year. I hope that a V.H.F. sound station at Carlisle will be included in the next stage of the V.H.F. sound programme, which I am now discussing with the B.B.C.
    Mr. Whitelaw: While appreciating the efforts that my right hon. Friend is making in this part of the world, may I ask if he would impart a real sense of urgency into all those members of his Department who are concerned in this work, in order that the long-suffering viewers and listeners in a very neglected area should be given the decent reception to which I know he believes they are really entitled?
    Dr. Hill: My hon. Friend will realise that this is primarily a matter for the B.B.C., and I would say to him that the answer I have given today shows a determined and relatively speedy effort to deal with this local problem.

    Independent Television Authority (Grant Application)
    Lieut.-Colonel Liptonasked the Postmaster-General what requests for financial aid he has received from the Independent Television Authority; and what action he is taking.
    Dr. Hill: I have received a request from the Authority for a grant under Section 11 of the Television Act. The request is being considered.
    Lieut.-Colonel Lipton: Was it not the idea of the Government and the will of Parliament that the I.T.A. should have up to £750,000 a year so as to be independent of commercial interests? Is he not aware that a refusal or unwillingness to give effect to this Section of the Act must be regarded, for the time being anyhow, as a breach of faith, and that it puts the I.T.A. in the hands of advertising interests?
    Dr. Hill: I am aware that Section 11 of the Act empowers me, with the agreement of the Treasury, to make a grant up to £750,000 a year. An application has been received and is now being considered.
    Mr. Ness Edwards: Could the right hon. Gentleman tell us for what purpose the grant has been sought, how much, and whether it is to be an annual grant or just one grant-in-aid?
    Dr. Hill: Section 11 relates to an annual grant, so that it may be taken that the application is in respect of a sum of money for the current year. The application was for the full sum of money for the current year. The application is in rather general terms, but the right hon. Gentleman can take it that behind it is a desire to affect the balance of the I.T.A. programmes—to improve, in the view of the I.T.A., the balance of such programmes.
    Mr. Ness Edwards: Does this reflect the opinion of the I.T.A. that the programme contractors are not providing balanced programmes and are, therefore, contradicting the terms of the Act?
    Dr. Hill: There is no question of a contradiction of the terms of the Act. The application has come from the Independent Television Authority, and the right hon. Gentleman can infer what he likes from that.
    Mr. H. Morrison: Can the right hon. Gentleman say whether this indicates that there is a deficit commercially on I.T.A working, and that that is the reason for the request for this money, or is it wanted merely for fun or for pocket money?
    Dr. Hill: The application which has been received in no way relates to or refers to the general financial position of the programme companies. The case is not put upon any such basis.

    Southampton (I.T.A. Programmes)
    Mr. J. Howardasked the Postmaster-General when he anticipates that the Southampton area will be able to receive the Independent Television Authority programme.
    Dr. Hill: The Independent Television Authority informs me that it is unlikely to be able to serve this area before 1958.

  ROYAL AIR FORCE

    N.A.A.F.I. Board (R.A.F. Member)
    Mr. H. Hyndasked the Secretary of State for Air what is the rank of the air member of the Board of Management of Navy, Army and Air Force Institutes; and how much time he spends on the business of that organisation.
    The Secretary of State for Air (Mr. Nigel Birch): A group captain is employed full time.
    Mr. Hynd: Is he employed for any length of time—that is to say, long enough for him to get acquainted with the work and to be really useful? Or is he just a group captain occupying the position for a short time in the middle of his other duties?
    Mr. Birch: The present incumbent, understand, has been in the post for about two years.

    Petrol Tankers (Cleaning)
    Mr. Ledgerasked the Secretary of State for Air whether he is satisfied that there is no negligence at the Horsham St. Faith Royal Air Force Station in the giving of instructions on safety precautions to be observed when carrying out the cleaning of petrol tankers; and whether he will make a statement in connection with the death of Junior Technician Lewis.
    Mr. Birch: I am satisfied that appropriate safety precautions are now in force. The court of inquiry held into Junior Technician Lewis' death established that Lewis and other airmen had been using canister type respirators when inspecting petrol tankers at this station, instead of the remote breathing apparatus prescribed by regulations. On the day of his death Lewis had been given instructions merely to remove the manhole covers, but he entered the tanker before it had been drained and vented, and without a "safety man" standing by with a life-line. In these circumstances, there would have been a serious risk even if he had been wearing a remote breathing apparatus.
    Mr. Ledger: I thank the Minister for that Answer, but is he aware that since 1953 a number of airmen have done a similar job unassisted? This appears to
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    have been a practice at this air station, and will he take steps now to see whether or not the N.C.O.s in charge during that period are carrying on their jobs with the same negligence as they showed then? I feel that only then will the parents of young men in the Air Force be assured that the right hon. Gentleman is taking all the precautions necessary
    Mr. Birch: Yes, certainly. Steps have been taken to tighten up the regulations everywhere.

    Senior Officers
    Mr. H. Hyndasked the Secretary of State for Air how many officers of the rank of air vice-marshal and upwards are now serving in the Royal Air Force; and by how many the number will be reduced as a consequence of economies in the Royal Air Force.
    Mr. Birch: Ninety-eight. I cannot yet say what the future establishment will be.
    Mr. Hynd: Is the right hon. Gentleman taking care to see that the Air Force is not top-heavy with these high ranks and that the numbers are in proportion to those of other ranks in the Air Force?
    Mr. Birch: Yes, certainly.
    Mr. de Freitas: Will the Minister insist that his senior officers in the Air Ministry make themselves responsible for cutting down their staffs and do not rely on bringing in the Director of Works Study, who appears to be inclined to act as a very expensive scapegoat for the senior officers not doing a job which should be theirs?
    Mr. Birch: I will bear the hon. Gentleman's point in mind.

    Leuchars Airfield (Use)
    Sir W. Anstruther-Grayasked the Secretary of State for Air how often Leuchars Aerodrome has been made available for civil aircraft during the last 12 months; and whether he will state the conditions under which civil aircraft are allowed to use this aerodrome.
    Mr. Birch: The airfield is normally available to civil aircraft in emergency for diversions. No such diversions have been required in the last twelve months, but two civil charter flights were specially authorised to use the airfield. It is now temporarily out of flying use.
    Sir W. Anstruther-Gray: Can I take it from that reply that my right hon. Friend is prepared to consider sympathetically any requests which he may receive either from B.E.A. or from civil companies?
    Mr. Birch: Yes, certainly. No firm request has, I understand, been made.

    Habbaniya (Married Quarters)
    Mr. W. R. Williamsasked the Secretary of State for Air how many married men of the Royal Air Force stationed at Habbaniya have still to be provided with married quarters.
    Mr. Birch: There are 63 officers and airmen on the waiting list at present.
    Mr. Williams: How long does the Minister think it will be before they are allocated married quarters? There is a good deal of dissatisfaction in the area. If we are to assist the Iraqi Government, we should impose upon them the obligation of looking after our married people in the same way as we try to look after them ourselves.
    Mr. Birch: As I pointed out to the hon. Gentleman, I think last week, the position is a good deal better since the agreement with Iraq, but there is a shortage of married quarters in all the stations in the Middle East.

    Air Trooping (York Aircraft)
    Mr. de Freitasasked the Secretary of State for Air what changes have been made in his arrangements for the air trooping of the families of Service men as a result of the findings of the inquiry into the crash of the Scottish Aviation's York aircraft in Malta last February.
    Mr. Birch: None, Sir.
    Mr. de Freitas: Does not the Minister intend to make permanent the temporary ban imposed on the use of these old York aircraft for air trooping? Did not this inquiry disclose that the aircraft was not only overloaded but, quite clearly—as many people had suspected for a long time—was incapable of performing effectively if one engine failed on take-off?
    Mr. Birch: I cannot agree with the hon. Gentleman's reading of the report. I think the report shows that the primary cause of the accident was a pilot error. As the hon. Gentleman knows, another
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    court of inquiry is considering another accident, and I will make my decision when I have the report of that court of inquiry.
    Mr. de Freitas: But, until then, does the temporary ban still continue?
    Mr. Birch: Yes, certainly.

  ROADS

    West Riding
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation what steps he proposes to take to improve road communications for which he is responsible in the West Riding of Yorkshire.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Hugh Molson): The reconstruction of Doncaster Mill Bridge has been authorised, and our more immediate plans for roads for which my right hon. Friend is the highway authority include the construction of by-passes at Wetherby, Allerton Station (Hopperton) and Doncaster, as well as a number of smaller schemes.
    Mr. Roberts: Is the Parliamentary Secretary aware that this is not the type of facilities that we would like in the West Riding? Is he further aware that the connection with the Great North Road is, indeed, a very bad one, and that the whole of the West Riding, with its prolific industrial area, has winding and twisting roads right up to the Great North Road? Is he prepared to give some consideration to bringing about some improvement in the industrial areas of the West Riding?
    Mr. Molson: I have already indicated a number of large schemes which we have in mind; we also have a number of smaller schemes. Really, that part of the country is getting a very fair proportion of the money that is available.
    Colonel Stoddart-Scott: Would my right hon. Friend push along with the east-west trunk road so that the industrial West Riding may have better access to the Great North Road?
    Mr. Molson: We are trying to take all these roads in the order best suited to facilitate the movement of traffic.
    Mr. T. Williams: Can the Minister give any idea how long it will be before these various bridges go up, because we want to prevent the diversion of heavy traffic as much as possible?
    Mr. Molson: As regards this particular bridge, we have received the tenders and they are under consideration at the present time.
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation what consultation he has had with the West Riding County Council for the provision of a motor road to link the West Riding with the Great North Road at a convenient point.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): Some preliminary survey work has been done on the Sheffield—Leeds motorway and on the Lancashire—Yorkshire motorway. I have been in close touch with the county council throughout, and both roads are included in the county development plan.

    Doncaster By-pass
    Mr. T. Williamsasked the Minister of Transport and Civil Aviation what limitation there has been on the capital expenditure allowed for preliminary work on the proposed by-pass road at Doncaster; and to what extent this has delayed the start of the physical work.
    Mr. Watkinson: None, Sir.
    Mr. Williams: Will the right hon. Gentleman say why, if there has been no limitation in finance for the preliminary work, and it now being 18 months since his predecessor made a promise that this by-pass was a very necessary improvement, nothing has happened up to now?
    Mr. Watkinson: Perhaps the right hon. Gentleman will be kind enough to await the answer I am making later, when I will give a fuller statement on that topic.
    Mr. Wilfred Palingasked the Minister of Transport and Civil Aviation to give an assurance that it remains the policy of his Department to carry on the work on the Doncaster by-pass road in accordance with the undertaking given by his predecessor to a delegation from Yorkshire; and if the original time-table still holds good.
    Mr. Watkinson: Yes, Sir.
    Mr. G. Jegerasked the Minister of Transport and Civil Aviation the estimated expenditure for the year 1956–57 on the Doncaster by-bass road.
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation what the preliminary expenses are on the Doncaster by-bass road to date; what contracts have been entered into for future work; and what is their value.
    Mr. Wilfred Palingasked the Minister of Transport and Civil Aviation how many persons are engaged on the work of the Doncaster by-bass road.
    Miss Baconasked the Minister of Transport and Civil Aviation what progress has been made with the preliminary stages of the proposed Doncaster by-bass road.
    Mr. Sylvesterasked the Minister of Transport and Civil Aviation if he is aware of the increasing congestion of road traffic through the county borough of Doncaster; and what steps are being taken to expedite the proposed by-bass road.
    Mr. Winterbottomasked the Minister of Transport and Civil Aviation when a start will be made on the physical work of the Doncaster by-bass road.
    Mr. Watkinson: I know the great urgency of this scheme. The preliminary survey is now done, and I am publishing tomorrow the draft scheme for fixing the line of the by-bass. I must then, as the Statute provides, allow some months for the lodging and consideration of objections. As soon as the line is fixed, the process of land acquisition can start, and at the same time the detailed engineering plans be worked out. The time taken to acquire the land depends largely on the number of objections.
    All this preparatory work on this major by-bass, with its 15 miles of dual carriageways costing some £5 million, is being pressed forward as fast as possible. No construction work can start until it is finished and the contracts let. The only expenditure in 1956–57 can therefore be on preparatory work. £4,000 has already been spent on this.
    Mr. Jeger: Will the Minister place a copy of the plans in the Library, so that

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    those of us from Yorkshire who are interested may see them, together with the schedule of the time-table, with the approximate cost of each stage of the work?
    Mr. Watkinson: I will certainly put any information I can in the Library showing what is being done on this most important work.
    Mr. T. Williams: Will the Minister say why it has taken so long to prepare the plans, when 18 months ago we were informed by the appropriate surveyor that all the preliminary work could be completed within 12 months?
    Mr. Watkinson: I think the local authorities and hon. and right hon. Members interested will remember that this Doncaster by-bass was included in the large number of schemes announced in the House by my predecessor. He told all concerned, I think, that it was hoped to authorise this scheme in the series of schemes for the period 1956–60. The scheme is not behind-hand. As I think the right hon. Gentleman knows, the by-bass has had to be completely re-drawn because all the pre-war plans have now been made abortive by building development. I do not think an excessive time has been taken in this re-drawing.
    Mr. Williams: Will the right hon. Gentleman say whether he is wholly convinced that the original time-table will be carried through?
    Mr. Watkinson: I have not said, anything to indicate that it will not be.
    Mr. Paling: Will the right hon. Gentleman press on with this scheme as fast as possible? Is he aware that the situation on the North Road, north of Doncaster, is rapidly becoming intolerable, and that there are queues every Saturday, that last Saturday in particular there was a queue nearly four miles long, and at Whitsuntide there was a queue nearly five miles long which lasted from lunchtime until early evening? Will the Minister bear in mind that this is becoming worse week by week, and will he attend to the matter as quickly as possible?
    Mr. Watkinson: That is exactly what I said in my Answer.

    Harley Street (Car Parking)
    Mr. E. Johnsonasked the Minister of Transport and Civil Aviation if he is aware that cars are being parked in a single line on one side of Harley Street, London, W.1, and in a double line on the other side; and if he will authorise the diagonal parking of cars on one side which would accommodate more cars and take up less of the roadway.
    Mr. Molson: I am aware of the excessive parking in Harley Street, but my hon. Friend's suggestion would not improve matters. I think it will be as well to await the outcome of the special survey of parking facilities in inner London, now in progress.
    Mr. Johnson: Is my hon. Friend aware that his view is not shared by the residents in that street, the view being that it would undoubtedly improve matters, and is he aware that there is very great delay because, whenever a car has to stop there, the whole of the street is blocked as a result?
    Mr. Molson: In considering parking questions such as this, there are three considerations which have to be taken into account: the number of cars which can be parked, the reduction of the width of the carriageway which is brought about by the parking, and the interference with traffic as cars park and move out. My hon. Friend's suggestion would result in a reduction from 10 to 8¾ in the number of cars which could be parked in 100 feet, it would take 19½ feet off the carriage way instead of 15 feet, and it would be more obstructive to passing traffic.
    Mr. Speaker: In other words, it is not a very good idea.

    Manchester—London Motorway
    Mr. E. Johnsonasked the Minister of Transport and Civil Aviation what are his proposals for the construction of a motorway between Manchester and London.
    Mr. Watkinson: The construction of the first section of the London—Yorkshire motorway, with a spur to Dunchurch, for Birmingham, will be followed at a later date by a further motorway between the north of Birmingham and the Preston by-bass, which will pass quite close to Manchester. In addition, A.45 between Dunchurch and Birmingham will be brought up to dual carriageway standard throughout.
    Mr. Johnson: Is my right hon. Friend aware that I heard a little of his answer? Is he further aware that, on average, it now takes at least one hour longer to drive from Manchester to London than before the war?
    Mr. J. Harrison: In dealing with this traffic from Manchester to London, would not the Minister agree that the provision of roads leading to the new bridge across the Trent at Nottingham would really give substantial help?
    Mr. Watkinson: I could build all sorts of roads everywhere, all of which would make a contribution to relieving traffic problems, but what I have to do is to get the right kind of priorities which will help the traffic most quickly and get it flowing faster than it is today.

    Improvement Schemes
    Mr. E. Johnsonasked the Minister of Transport and Civil Aviation what work will be carried out this year to widen and straighten roads A5 between Atherstone and Gailey, A51 between Lichfield and Stone, A34 between Stone and Manchester, A41 between Westonunder-Lizard and Whitchurch and A49 between Whitchurch and Tarporley, respectively.
    Mr. Watkinson: On these stretches of road, except A.49, some 22 schemes costing sonie £1,145,000 are in progress or are due to start this year. Two further schemes on A.34 costing £822,000 will probably he authorised this year, but are unlikely to start until next. I will circulate details in the OFFICIAL REPORT.
    Mr. Johnson: Is my right hon. Friend aware that, although his statement will be received with some satisfaction by users of those roads, they are still really nothing but winding country lanes and quite unfit for modern traffic conditions?
    Mr. Watkinson: I hope my hon. Friend did hear the answer to that Question. If it prompts him to read the list of schemes which I am circulating in the OFFICIAL REPORT, a very large number of schemes, costing in total, as I have said, something like £2 million, I think he will not be dissatisfied that we are making some progress.
    Following is the list of schemes in progress or expected to start in the financial year 1956–57:
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    (1) A.5 between Atherstone and Galley. Trunk Road

    £

    Improvement at Brown's shop, Wilnecote. (Est. Cost)

    820

    Bus draw-in at Ninefoot, Wilnecote. (Est. Cost)

    230

    Widening of Wilnecote Station Bridge. (Est. Cost)

    3,600

    Widening from Weeford Cross Roads (A.446) to A.38. (Est. Cost)

    119,635

    Improvement at Hannay Hay Cross Roads. (Est. Cost)

    9,355

    Roundabout at Muckley Corner (A.446). (Est. Cost)

    14,520

    Roundabout at junction of A.5 and A.452, Brownhills. (Est. Cost)

    3,566

    £151,726

    There are no major improvement schemes in progress on this length of road, but the above schemes are expected to be started this year.

    (2) A.34 between Stone and Talke. Trunk Road

    £

    Improvement north of Filleybrooks River Bridge. In progress. (Est. Cost)

    36,356

    Provision of dual carriageways Crown Inn, Aston to Filleybrooks River Bridge. Expected to start this year. (Est. Cost)

    295,000

    £331,356

    (3) A.41 between Weston-under-Lizard and Whitchurch. Trunk Road

    £

    Standford Bridge Diversion. In progress. (Est. Cost)

    39,546

    Widening north of Standford Bridge. Expected to start this year. (Est. Cost)

    16,000

    £55,546

    (4) A.49 between Whitchurch and Tarporley. Trunk Road

    No schemes in progress, and no schemes expected to start this year.

    (5) A.51 between Lichfield and Stone. Classified Road

    £

    Longdon by-bass. In progress. (Est. Cost)

    58,980

    Widening between Milestone "Lichfield 5" and north end of Longdon by-bass. In progress. (Est. Cost)

    38,834

    Rugeley by-bass. In progress. (Est. Cost)

    92,489

    Diversion at Carr House Railway Bridge. In progress. (Est. Cost)

    69,971

    Improvement at Little Stoke. In progress. (Est. Cost)

    2,239

    Stone by-bass. May be started this year. (Est. Cost)

    165,000

    £427,513

    (6) A.34 between Talke and Manchester. Classified Road

    £

    Congleton By-pass. In progress. (Est. Cost)

    77,000

    Widening at Wilmslow Road, Handforth In progress. (Est. Cost)

    74,323

    Improvement at junction of Padgbury Lane, Astbury Marsh. Authorised and expected to start this year. (Est. Cost)

    1,909

    Improvement at Congleton Road, Alderley Edge. Authorised and expected to start this year. (Est. Cost)

    19,576

    Improvement of London Road, Alderley Edge. Authorised and expected to start this year. (Est. Cost)

    5,500

    £178,308

    The Angel, Islington
    Mr. E. Fletcherasked the Minister of Transport and Civil Aviation whether he will now state his plans to improve the road junction at The Angel, Islington, and relieve the traffic congestion there.
    Mr. Molson: My right hon. Friend has been considering a scheme for an improved system of traffic signals here, and he expects to be able to make a grant towards the cost of this work very soon. The London County Council has provided for a roundabout here in the second period of their development plan.
    Mr. Fletcher: Would the Minister bear in mind that merely to improve the traffic signals will not solve the problem, and will he remember that it is a matter of the greatest concern, both to the inhabitants of Islington and to all who use this important artery, that something should be done to relieve the appalling traffic congestion which now exists?
    Mr. Molson: The new traffic lights will be of a very much improved kind. There will be a master controller controlling the flow of traffic from the three different roads. We believe that that will bring about an improvement. At the same time, we are in negotiation with the Finsbury and Islington Borough Councils about works upon the roads; there has been delay because of the need to consult the statutory undertakers, but we expect that that work will be undertaken shortly.

    Don Bridge, Doncaster
    Mr. William Palingasked the Minister of Transport and Civil Aviation the increased distance that heavy lorries must travel which have to leave the Great North Road north of Doncaster and finally return to the Great North Road south of Doncaster because of the weight limit allowed over the River Don bridge at Doncaster.
    Mr. Molson: The assessed weight limit for vehicles using the River Don Bridge at Doncaster is 30 tons. The recommended route for vehicles in excess of this limit, up to 80 tons weight, involves an additional distance of about 15 miles.
    Mr. Paling: Is the Minister aware of the serious dislocation which is caused to West Riding trade and commerce? Is he aware that these new routes, as has been said of another part of the country, are often down what can only be termed country lanes and that the position is becoming worse each week? Is the Minister satisfied that the new Doncaster by-pass will give the anticipated relief to trade and commerce of the West Riding?
    Mr. Molson: It was the two considerations first put forward by the hon. Member that induced my right hon. Friend to give the rebuilding of this bridge such priority that it has already been authorised. As regards the second part of his question, we are satisfied that the Doncaster by-pass, when completed, will be able to deal with the traffic problem there.

    Parking Meter Charges (Doctors)
    Dr. Strossasked the Minister of Transport and Civil Aviation whether, in framing his regulations regarding parking meters, he will arrange that medical practitioners in the course of their work will be exempted from charges if they park their cars in streets in which parking meters may be installed.
    Mr. Watkinson: No, Sir. A general exemption of this nature would be contrary to the principles underlying the proposals as to parking in the Road Traffic Bill.
    Dr. Stross: May I thank the Minister for the letter he sent me the other day on this matter and ask him whether it is proposed to retain this inflexible attitude

    393
    for ambulances and fire-fighting vehicles also? Will not the Minister please consider speaking to the British Medical Association about the whole of this matter?
    Mr. Watkinson: There is nothing inflexible about my attitude on this matter. The facts are that I have, as I think the hon. Member knows, the powers to make exemptions, so that I am adequately armed with them, but I prefer to wait until I have this detailed survey of the whole of London parking which is coming to me. I think that no one will gain more from that than the doctors if they can move about rather more freely.
    Mr. Ernest Davies: This is the second time the right hon. Gentleman has referred to the survey on parking. Can he indicate when the report is likely to be made? Will it be published and presented to the House?
    Mr. Watkinson: As to the first part of the question, I hope that enough of the survey—which I think the hon. Gentleman, with his expert knowledge, knows is a very complicated operation—will be done to judge its merits in some areas in the early autumn. As to how much longer the total investigation will take, I am not yet in a position to say because it is such a complex operation.

    Drill Corner, Romford
    Mr. Ledgerasked the Minister of Transport and Civil Aviation if he is aware that the major highway improvement scheme to Drill Corner, Romford, agreed between the local councils concerned, is awaiting approval; and if he will make a statement on the matter.
    Mr. Molson: In view of the competing claims of other schemes, I am afraid my right hon. Friend cannot accept this improvement for grant in the current financial year. The Essex County Council was informed of this decision on 15th June and was invited to consider a less expensive scheme involving a smaller roundabout.
    Mr. Ledger: Is the Minister not aware that the local councils, who are more directly involved, do not regard the modified scheme as serving the right purpose? Is he not aware that large vehicles going round this roundabout have to reverse to avoid going up on to the pave-
    394
    ment and that as long as it remains a temporary scheme, no offence is committed if a vehicle passes on the wrong side of the island? In view of these facts, will not the Minister consider the position again and see whether he can allow the new plan to be developed?
    Mr. Molson: My information does not entirely coincide with that which the hon. Member has now given, but in view of what he has said I will make a point of having further inquiries made.
    Mr. Lagden: Will my right hon. Friend accept from me that the information given by the hon. Member for Romford (Mr. Ledger) is perfectly correct and that the scheme for the smaller roundabout would not in any way cure the traffic congestion? This is a serious matter, which the hon. Member for Romford has in no way exaggerated.

    Accidents
    Mr. Remnantasked the Minister of Transport and Civil Aviation what percentage of accidents on the roads occur in towns and villages, main roads outside towns and secondary roads.
    Mr. Molson: Road accident figures do not draw the exact distinction made by my hon. Friend in his Question, but his two categories correspond fairly closely with roads subject to a speed limit and those not so subject.
    In 1955, 72 per cent. of the casualties in road accidents occurred on roads subject to a speed limit. The latest figures available giving more detail of the kind asked for relate to 1952, in which year also 72 per cent. of the casualties occurred on roads subject to a speed limit. The 28 per cent. on roads not subject to a speed limit were then made up of 2 per cent. on roads in the Metropolitan Police District; 20 per cent. on trunk, class I and class II roads outside that district; and 6 per cent. on other roads.
    Mr. Remnant: Can my right hon. Friend say whether that pattern is a continuing one since the war, or is it changing as the years go by?
    Mr. Molson: Broadly, it is a continuing pattern. If we take the figures for accidents as opposed to casualties in 1955, we find that 76 per cent. of all accidents involving personal injury occurred on

    395
    roads with speed limits, and that 24 per cent. occurred on roads without speed limits.
    Mr. J. T. Price: Will the right hon. Gentleman resist the temptation to draw false conclusions from these figures? Is he aware that the mere fact that 76 per cent. of accidents occurred on roads with speed limits does not suggest anything in the nature of removing the speed limit, but merely that the speed-limited roads are in centres of denser population where it is more likely that more people are resident?
    Mr. Molson: I think that is an entirely correct deduction to draw from the figures.

    Waiting Restrictions
    Mr. Remnantasked the Minister of Transport and Civil Aviation whether he will make regulations enabling the extension of no parking orders to main streets and main highways with only a short and stated time for delivery before 11 a.m.
    Mr. Molson: Outside the London Traffic Area, the initiative for making orders regulating the waiting of vehicles rests with the local authorities. Inside the London Traffic Area, where waiting restrictions are our responsibility, my right hon. Friend is considering making changes. He has already consulted the London and Home Counties Traffic Advisory Committee, who are awaiting the report due in September of the Survey of Parking Facilities of Inner London which is likely to contain recommendations about the hours at which restrictions in that area should begin.
    Mr. Remnant: Will my right hon. Friend give an undertaking that he will take a strong line to get rid of as much parking as possible, consistent with the setting down and picking up of passengers and/or goods? Is it not the case that parking is surely one of the major factors leading to congestion?
    Mr. Molson: It is because we recognise this to be the case that we have made provision for dealing with the matter in the Road Traffic Bill.

    A614 (Airmyn—Rawcliffe—Goole)
    Mr. G. Jegerasked the Minister of Transport and Civil Aviation whether he is aware of the dangerous nature of the
    396
    road A614 from Airmyn and Rawcliffe Station bridge for about half a mile towards Goole; and whether he will take action to improve it.
    Mr. Molson: We are aware of the need to improve this length of road, but I cannot at present say when it will be possible to authorise an improvement scheme. In the meantime, work has recently been completed to provide a better surface on this and an adjoining length.
    Mr. Jeger: Is he aware that, in putting down a better surface, he has obliterated the marks which had been placed there by the surveyor with the intention of improving the road instead of putting the new surface on top of the bad substructure? Is he also aware of the fact that the present condition of the road is very unsatisfactory, that it is narrow, that its surface is bad and dangerous, that there is a ditch alongside it, and that even the police in the neighbourhood are asking that something should be done about it?
    Mr. Molson: I am sorry if, after this improvement in the surface, in some respects the result has been unsatisfactory. I will certainly make inquiries into it, in the light of what the hon. Gentleman has said.
    Mr. H. Morrison: In view of the long string of complaints from Yorkshire, and, indeed, from other parts of the country, and the negative answers, on the whole, which have been given to these questions, would the Parliamentary Secretary or the Minister one of these days be good enough to inform the House—perhaps they can do it now—what is the total revenue from motor licences to the so-called Road Fund and how much of it is filched by the Treasury and thereby denied to the roads?
    Mr. Molson: That supplementary question does not arise out of this Question. In any case, the information is available in the papers which have been presented to the House. I have already given a list of major works which are to be undertaken in that part of Yorkshire. In addition, there are a number of others, such as the Finningley by-pass, the North Elmsall diversion, the Tudworth Hall diversion, and the improvement of the junction of A1 with A614. As I happen to have that information available, I thought the right hon. Gentleman might like to have it.
    Mr. T. Williams: Would not the right hon. Gentleman agree that the fact that there are so many schemes urgently necessary now indicates that there must have been much neglect in the past?
    Mr. Molson: It was only when this Government came into office that even a beginning was made.

    Common Arch Bridge, Chard Junction
    Mr. Peytonasked the Minister of Transport and Civil Aviation what progress has been made in the negotiations between his Department, the British Transport Commission, and the Somerset County Council, as highway authority, for taking over Common Arch Bridge, Chard Junction.
    Mr. Molson: Negotiations have been completed except for the terms of an indemnity clause and some details about land and culverts, on which the county council and the British Transport Commission have not yet reached agreement.
    Mr. Peyton: While thanking my right hon. Friend for that reply, not all of which I was able to hear, and while also thanking him warmly for the previous help which he has given on this subject, may I ask him if he will please ask the two bodies concerned, the Commission and the county council, to expedite this matter, which has been going on far too long, perhaps three or four years, and will my right hon. Friend please use his best endeavours to stimulate them into getting an agreement?
    Mr. Molson: I am much obliged to my hon. Friend for what he has said, and I will see what can be done in this direction.

    Cromwell Road Extension
    Mr. G. Wilsonasked the Minister of Transport and Civil Aviation what steps are now being taken to improve the Cromwell Road Extension Scheme so as to avoid bottlenecks at Talgarth Road and at Gunnersbury; and whether the flyover at Hammersmith will now be constructed.
    Mr. Watkinson: At Gunnersbury the new road will be carried over Wellesley Road and the Chiswick High Road by a
    398
    redesigned flyover, and the surface roundabout at the junction of the Great West Road and the Chiswick High Road will be enlarged to about two acres in extent to improve the flow of traffic. I am glad to say that the London County Council has now agreed to widen Talgarth Road, thus removing a major bottleneck in the existing scheme. I have recently discussed with the Council the inclusion of the Hammersmith flyover at this stage. As full provision has now been made for it at a later stage, and as its inclusion now would greatly delay the completion of the whole of the Hammersmith section of the new road, I am satisfied that it is right to press on with the construction of the new roundabout at Hammersmith, leaving the flyover for further examination.
    Mr. Wilson: While thanking my right hon. Friend for that reply, may I ask him whether his attention has been drawn to the Traffic Engineering Report on this scheme prepared by Mr. Andren and Mr. Seymer, indicating that a serious traffic bottleneck will be formed if the flyover at Hammersmith is not constructed? Has my right hon. Friend any comments to make on that?
    Mr. Watkinson: I have read the Report, which was kindly sent to me by the British Road Federation. I have had it examined by my experts. I still think that the decision which I have announced is the best one to get the maximum traffic flow at the earliest possible stage. This does not in any way prejudice the construction of a flyover, which, I think, in the end will undoubtedly be necessary, but it is not necessary to put it into the scheme at this stage.
    Lieut.-Colonel Lipton: Will the right hon. Gentleman give an assurance that, so far as he can contrive it, there will not be too long a delay between the first part of the scheme, which is, of course, necessary, and the flyover at Hammersmith, because Hammersmith will continue, if there is a wide gap between the two schemes, to be one of the worst bottlenecks in that part of the world?
    Mr. Watkinson: I propose to try to get the road from Cromwell Road to the Bath Road, to give access to London Airport, as fast as I can.

  TRANSPORT

    Road Haulage Assets (Disposal)
    Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation why he refused the request of the British Transport Commission to retain 200 service vans as C licence vehicles; and why 140 of these vehicles are to be sold as chattels under Section 6 (1) of Transport Act, 1953.
    Mr. Watkinson: The request was refused because the Commission wished to keep these vehicles in addition to the number the Transport (Disposal of Road Haulage Property) Bill permits it to keep. The 140 are being sold as chattels under Section 6 (1) because service vehicles have not generally been used to carry traffic and it would, therefore, be undesirable to grant special A licences to the purchasers of these vehicles.
    Mr. Davies: Is this not the craziest of all actions in conjunction with disposal? Does the Minister realise that these vehicles would not compete with commercial road hauliers—they would have C licences—and that his action means that the Commission, having to dispose of these vehicles, must now buy new vehicles to carry its own goods? What is the point of compelling the Commission to sell vehicles at a loss and to purchase new vehicles at a higher price in these days of capital restriction?
    Mr. Watkinson: The fact is, as the hon. Member quite definitely knows, that, taking the whole operation generally, the Commission has had a very fair and generous deal. [HON. MEMBERS: "Oh."]Oh, yes; it certainly has. There are bound to be these small anomalies before we can finally clear up the process of disposal, which I wish to do as quickly as possible for the sake of the Commission.
    Mr. Davies: How can the Minister say that the Commission has had a fair deal when he whittled down by 7½ per cent. the number of vehicles which the Commission was allowed to keep? When he is deliberately making the Commission dispose of vehicles, which it could use for its own use and which would not enter into competition, with the result that the Commission has to buy new vehicles, how can the right hon. Gentleman justify this crazy bit of business?
    Mr. Watkinson: The hon. Gentleman, I think, forgets the purpose of the Act, which concerned 7,500 lorries, which is a rather more important matter.

  CIVIL AVIATION

    B.O.A.C. (Aircraft)
    Mr. Hunterasked the Minister of Transport and Civil Aviation what recent requests he has received from the British Overseas Airways Corporation for sanction to purchase United States jet air liners.
    Mr. Watkinson: I have at present nothing to add to the reply I gave last week to the hon. Member for Govan (Mr. Rankin).
    Mr. Hunter: Is the Minister aware that reports have appeared in the Press that the Chairman of B.O.A.C. has applied for Government sanction to spend millions of pounds on eight American jet liners for use by B.O.A.C.? I assume from the Minister's reply that those reports are not correct.
    Mr. Watkinson: I am grateful to the hon. Member for raising this matter. It is particularly important that all who work on the airport should know the facts. Perhaps I might recapitulate them. A most careful and detailed technical examination is being undertaken, both of the American aircraft, which are Britain's competitors, and British jet and turboprop aircraft, with a view to meeting the requirements which the new Chairman of B.O.A.C. has now worked out as a result of the technical study which his experts have carried out. Until all these technical examinations are completed, no firm decisions can possibly be taken about the kind of aircraft that will be required.
    Mr. Strauss: While one appreciates that a decision of this kind cannot be taken in a hurry, surely it is a fact that under the former Chairman as well as the present Chairman of B.O.A.C. this matter has been considered for months and months, presumably with the Minister. When are we likely to receive a decision on this matter? If it has not been pursued for many months past, surely it ought to have been. If it has not been pursued, what is the reason?
    Mr. Watkinson: The right hon. Gentleman has asked me the reason, and I will tell him. First, in fairness to the past Chairman and management of B.O.A.C., it must be said that this air business has changed enormously in the past six months. The new big American jet aircraft have come forward and large numbers of orders have been placed. I believe that something like 200 aircraft have been ordered by foreign airlines which compete with B.O.A.C. The first task that I asked the new Chairman to perform was to examine the whole situation in the light of these new developments. That he has now done, and, as a result, we are carrying out this technical assessment of both the new American aircraft, which his competitors will soon be flying—within a measurable number of years—and what the British industry has to offer and what B.O.A.C. has on order. I do not think that any time has been wasted upon this study, on which depends the whole future of the Corporation.
    Mr. Rankin: The Minister referred to the technical examination now going on in regard to the Boeing 707. Is it the case that already a statement has been made by someone of authority connected with this investigation to the effect that this aircraft will sell readily in other countries as well as America? If that is true, is it a wise statement to make and in the interests of the development of British aviation?
    Mr. Watkinson: I do not know who made the statement. All I can say is that both British and American companies are trying to sell their aircraft, and no doubt both will be making wide statements as to their capabilities.

    Controlled Air Spaces (Regulations)
    Mr. Farey-Jonesasked the Minister of Transport and Civil Aviation whether, in view of the risk of collision which may arise between aircraft flying in controlled air spaces under visual flight rules, particularly under marginal conditions, he will now make it obligatory for all aircraft flying in controlled air spaces, under both instrument and visual flight rules, to do so under air traffic control clearances.
    Mr. Watkinson: I have nothing at present to add to the Answer I gave the
    402
    hon. Member for Uxbridge (Mr. Beswick) on 6th June, when I said that this whole question was being reviewed.
    Mr. Farey-Jones: Does not my right hon. Friend agree that the term "controlled air space" is a complete misnomer if aircraft can operate in that space, and is he not aware that there is an ever-present and growing anxiety among world airline operators, particularly at London Airport, while no action is taken on this matter?
    Mr. Watkinson: I quite agree, and we are taking urgent action on this matter. As I think my hon. Friend knows, it is a most technical and difficult matter, and I think we had better look at it carefully before we come to any conclusion.

    British European Airways (Aircraft)
    Mr. G. Jegerasked the Minister of Transport and Civil Aviation what recent applications have been made to him by British European Airways Corporation for approval for the purchase of medium-range aircraft.
    Mr. Watkinson: None, Sir.
    Mr. Jeger: Is the right hon. Gentleman aware that that is a very surprising reply, because the fact is that only one British aircraft today lands at the Berlin Airport at Tempelhof, whereas aircraft of other nations land there on several occasions during the day? Is he also aware that B.E.A. advise would-be passengers to book through charter companies? Does not this indicate that they are short of the necessary aircraft, and will he take the matter up with B.E.A. in order to maintain our prestige and our airline service to Berlin?
    Mr. Watkinson: Of course, I will look into it, but the answer to the Question on the Order Paper is still "None, Sir."

BUSINESS OF THE HOUSE
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Heath.]
ORDERS OF THE DAY
  FINANCE (No. 2) BILL
  As amended (in Committee and on recommittal), further considered.
  FINANCE (No. 2) BILL

    New Clause.—(SMALL MAINTENANCE PAYMENTS.)
    Section two hundred and five of the Income Tax Act, 1952 (which defines the expressions "small maintenance payments" and "small maintenance order"), shall be amended as follows:—

    (1) By inserting as a new subsection to replace the existing subsection (2), which is hereby repealed, the paragraph set out below, that is to say—

    "(2) The age referred to in paragraph (b) of subsection (1) of this section is twenty-one years of age".

    (2) By inserting as a new subsection (3) to replace the existing subsection (3), which is hereby repealed, the paragraph set out below, that is to say—

    "(3) The amount referred to in paragraph (i) of subsection (1) of this section is—

    (a) in the case of payments to or for the benefit of a woman for her maintenance, five pounds; and

    (b) in the case of payments to any person for the benefit of, or for the maintenance or education of, a person under the age specified in subsection (2) of this section, thirty shillings".—[Mr. Simon.]

    Brought up, and read the First time.
    3.32 p.m.
    Mr. J. E. S. Simon: I beg to move, That the Clause be read a Second time.
    This Clause seeks to remove an anomaly in the law whereby a wife who has suffered a matrimonial wrong at the hands of her husband is able to get one type of order in a court of summary jurisdiction, but, when she goes to the High Court, can only get what, from the point of view of tax, is a less favourable type of order.
    We are concerned here with a class of person with whom the House will have especial sympathy. These people are in all cases women of small means, because this type of order relates only to women of small means; in addition, they are women who have already suffered great hardship in their personal lives—whose lot, in any event, must be a bitter and a hard one.
    404
    It must be rare when this House not only can remedy an injustice to individuals but, at the same time, correct an anomaly in the law. When one adds to that that in this case we shall also be effecting an administrative saving, one can say that it must be a very rare event that such a concomitance of favourable circumstances is found before the House in considering a new Clause.
    The matter arises in this way. Before 1944, a wife who had had a matrimonial wrong committed against her by her husband could either go for a separation or maintenance order in a court of summary jurisdiction, or she could sue for divorce or separation in the High Court. In either case the court had jurisdiction to make a maintenance order in her favour.
    The way it operated for tax purposes was this. The husband, in all cases, whether the order was made in the High Court or in a court of summary jurisdiction, paid over the sum awarded in two parts. He paid over the tax on the, sum awarded by way of maintenance, and at the full rate—even though neither he nor his wife may have had sufficient income to attract tax at the full rate, he had, nevertheless, to pay the full standard rate of Income Tax—to the Inland Revenue; and he handed over only the balance to his wife. All she could do in order to get what the court thought was right for her was to get from her husband a certificate of deduction of Income Tax, present that to the Revenue authorities and claim a repayment of tax.
    Obviously, that had very grave disadvantages. In the first place, there was the overriding administrative disadvantage in that the Inland Revenue was acting as a clearinghouse for these tax rebates; because in very many cases the wife was not liable to pay any tax at all on her small order and, therefore, gained the full amount of the rebate. As a result, some quite unnecessary work was being done by the Inland Revenue authorities, who had, of course, to be satisfied that everything was in order.
    It also involved great personal hardships for wives in poor circumstances, because they were kept out of the money to which they were entitled, and these were all cases of women who had been abandoned in some way or another by their husbands. They were kept out of

    405
    their money, or a considerable part of it, when Income Tax at the full rate, amounting to nearly half of the amount was paid, until the matter was cleared with the Inland Revenue authorities. If the husband was recalcitrant, or ignorant, or feckless she could be kept out of her money a very long time, owing to his failure to render the proper certificate of deduction.
    It was for those reasons, I apprehend, that by Section 25 of the Finance Act, 1944, a new type of order could be made. If the sum ordered by way of maintenance was within the amount stipulated in that Section, what the husband did was to pay over the whole sum to the wife; and only if she was liable herself for tax would she be responsible to the Revenue authorities for paying tax on that sum.
    Of course, that meant that the evils which, I suggest, flowed from the previous system were ameliorated, both as to the administrative inconvenience and as to the wife suffering hardship. The amounts of the order that could be made under the Finance Act, 1944, were £2 in the case of an order in favour of the wife and £1 in favour of a child of the marriage. Those provisions applied to all courts, wherever the order was made, the High Court or the court of summary jurisdiction, or the county courts in the rare cases when they made such an order.
    The matter remained on that footing until 1949, when by the Married Women's (Maintenance) Act the jurisdiction of the courts of summary jurisdiction to award maintenance to a wife in respect of herself and her child was extended. It was raised in the case of a wife from £2 to £5 and in the case of a child from 10s. to 30s.
    The provisions of Section 25 of the Finance Act, 1944, to which I have referred, were made applicable to those increased amounts. In other words, the system which had been found satisfactory as far as the maintenance orders for the smaller amounts paid up to them had been concerned was made applicable to these larger sums. But that concession was limited to orders made under the 1949 Act. The High Court was still limited to its £2 in the case of a wife and its £1 in the case of a child. Even courts of summary jurisdiction had a different tax system for their orders,
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    according to whether they were made under the Married Women's code or under the Guardianship of Infants' code.
    The Guardianship and Maintenance of Infants Act, 1951, raised the jurisdiction in respect of orders made under the Guardianship of Infants Act—because, as hon. Members will appreciate, married women when seeking maintenance for a child often go under the one code as much as the other. Jurisdiction to make orders under the Guardianship of Infants Acts was increased to 30s. in respect of the child, and the 1944 provisions were made applicable to that type of payment. These provisions were consolidated in the Income Tax Act, 1952, which the new Clause seeks to amend.
    The purpose of the Clause is to correct the anomalies which are to be found in the present law, whereby there is a different tax code applicable to orders for the same amount according to the court in which they are made. I submit that such a differentiation has very little to recommend it. All the arguments which led to the reforms in 1949, and the extension of the concessions to sums of £5 for a wife and 30s. for a child, apply equally in the High Court as in a court of summary jurisdiction.
    There are a number of further arguments. Over 50 per cent. of divorce cases now are legally aided and, therefore, a great number of women who are in the circumstances envisaged by the reform that was found in the Finance Act, 1944, come to the High Court for relief. They can go before the very experienced registrars of the High Court to have their maintenance assessed. But at the moment the registrars have no powers to make the sort of order, as far as tax is concerned, that courts of summary jurisdiction have; and, therefore, if she wishes to have that sort of order, the wife is forced into a court of summary jurisdiction and she receives no legal aid. That is an unnecessary anomaly and a hard ship on a class of the community who already, by definition, will have suffered severely.
    I am told that if the new Clause is accepted the bulk of the orders will be in the region of £3 to £4 a week. The wife, if she goes to the High Court, has to wait for repayment of tax rebate, and if the husband is a doubtful payer he will not produce the certificate and she will be

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    without her money for at least a month, and it may well be longer. She is a class of woman who does not easily obtain credit.
    There are anomalies, also, in respect of the child. Not only have we now an anomaly as to the amount payable to the child, but also as to the age of the child; because in a court of summary jurisdiction this type of small maintenance order can be made in respect of a child up to the age of 21 for a larger amount, whereas in the High Court it can only be made up to the age of 16 in respect of a smaller amount. In these days, when we are doing our best to encourage parents to keep their children at school beyond the age of 16, such a differentiation cannot be justified.
    The extension of the jurisdiction to the High Court will result in a further saving in administrative costs to the Revenue, in that it will not have to carry out the monthly working of the rebate system. The cost of the concession, if anything, must be infinitesimal, because it can only relate to the balancing of the allowance as between husband and wife. In respect of the children it can be at most only £10 a year for each child. For all these reasons, I commend the Clause without hesitation to the House.
    Mr. Geoffrey Stevens: In view of the very clear and careful exposition of the new Clause by my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) there is nothing more for me to do than formally to second the Motion and commend the Clause warmly to the House.
    3.45 p.m.
    Mr. G. R. Mitchison: The hon. and learned Member for Middlesbrough, West (Mr. Simon) has an excellent and purely professional acquaintance with all the workings of the divorce courts. He put this somewhat complicated question so clearly that there is no need whatever to repeat the arguments which he adduced. This appears to be an anomaly which, for the reasons he gave, bears hardly on just the wrong people. It is something the remedy of which appeals to my hon. and right hon. Friends and myself just as much as I hope and trust it will appeal to the
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    Government. If, as I feel sure, the Government intend to accept the Clause, I believe that they will do so with the support of the whole House.
    The Economic Secretary to the Treasury (Sir Edward Boyle): I should like to join in the tributes paid to my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) for the extremely clear and lucid manner in which he expounded the Clause to the House and the fairness with which he put his case. I hope, therefore, that the House will not misunderstand me when I say that he has an intimate knowledge of divorce and maintenance, about which he sometimes speaks.
    The object of the Clause, as my hon. and learned Friend explained, is to increase the extent of the class of "small maintenance payments" as defined in Section 205 of the consolidating Income Tax Act, 1952 which, by virtue of Section 206, are payable without deduction of Income Tax and are assessable directly upon the recipients. Until 1944, periodical payments under court orders for the maintenance of women and children in divorce and separation cases were payable under deduction of tax in accordance with the normal Income Tax law, but Section 25 of the Finance Act, 1944, changed this law in relation to small maintenance payments by making them payable in full. The main purpose of the change was to relieve the difficulties which magistrates found when issuing warrants for payment of arrears.
    The intention of the Clause is to abolish the distinction which the present definition of "small maintenance payments" draws between those payments which are made under High Court orders and those which are made under magistrates' orders. I can see the force of the argument that the present distinction seems to be anomalous. It originates in the fact that when the maxima of the amounts which magistrates could award were raised in 1949, under the Married Women (Maintenance) Act, the limits for non-deduction of tax in magistrates' cases were raised to correspond, but no corresponding alteration was made in the limits for non-deduction of tax in High Court cases, which would have required separate legislation.
    I see that at first sight this seems to be an amomaly and I expected my hon.

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    and learned Friend to make the point that wives in whose favour small High Court orders had been made suffer inconvenience because of the need to claim and recover Income Tax which they are not strictly liable normally to bear. However, I think it might be a mistake for us to consider this matter absolutely on its own. We have no reason to think that the present state of the law is having any specially harsh effects. At the same time, however, my right hon. Friend is very ready for this matter to be fully considered along with the problem of the law of maintenance generally, and he will suggest that the Inland Revenue should discuss with the department of the Lord Chancellor and the Law Officers whether a change in the law may be desirable.
    There are some drafting objections to the new Clause as it appears on the Notice Paper. They are rather technical points with which I need not weary the House. I put it to my hon. and learned Friend that the most satisfactory solution would be if the Inland Revenue discussed this question with the Law Officers and with the department of the Lord Chancellor, and that if it is thought that a change in the law is desirable, we will see to it that the change is made as soon as a suitable opportunity for legislation presents itself. My right hon. Friend thinks that in view of those technical defects in the proposed Clause it would be better to postpone legislation on this subject until those discussions have taken place.
    With the asurance that we realise there is a point here which needs to be looked at carefully, I hope that my hon. and learned Friend may consider withdrawing his proposed Clause.
    Mr. Simon: We have learned in this House that the word "never" means "perhaps". I hope that in this case, therefore, "perhaps" will mean "yes". I do not know how long my hon. Friend proposes for these discussions. I accept from him readily that there are technical objections to the Clause as drafted, and if he envisages those discussions being over before next year's Finance Bill, I would ask leave to withdraw the Motion.
    Mr. Harold Wilson: Before the House considers whether the Motion and Clause should be withdrawn, I want
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    to put a point to the hon. Gentleman the Economic Secretary. On this side of the House we are impressed by the case made by the hon. and learned Gentleman the Member for Middlesbrough, West (Mr. Simon). To many of us it was a new point, but it was put so convincingly, and it was made so plain that hardship is caused, that we felt that if the Government did not accept the Clause there would be a strong case for dividing the House upon it.
    Now the Economic Secretary has produced reasons why there should not be a Division. The hon. Gentleman has suggested that the matter is to be considered rather more broadly than in the context of the proposed Clause, and has pointed out that there are some drafting weaknesses in it. That surprises me, since it has come from so great an authority on the subject as the hon. and learned Gentleman.
    We on this side of the Committee are in some difficulty in voting. We do not want to divide the House unnecessarily and we have a pledge from the Government that they will consider the matter, I am sure, sympathetically. I hope, however, that the Economic Secretary intends to treat this as a matter of some urgency, and will not just leave it to be looked at some time next year as in the case of many other things we heard about during earlier stages of the Bill. Can the hon. Gentleman say how quickly he thinks the examination can be carried out, and when he feels that it might be possible to produce the necessary legislation?
    Of course, there would be obvious difficulties about having this Finance Bill amended in another place. We do not know whether any further Measures will he brought forward by the Chancellor of the Exchequer in the course of the next year which would enable him to do what is asked. Does it really mean waiting for a whole year, with all the hardship referred to, or can the hon. Gentleman hold out any hope that we shall get some legislation in the not too distant future?
    For example, it occurs to me that when this matter has been looked at it could be the subject of a one-Clause Bill, which I can promise the Government we on this side of the House would give full co-operation in getting through quickly. Can we have some idea of the time-table which the Economic Secretary has in mind, and

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    the kind of legislative facilities he would propose for carrying into law the result of the examination?
    Sir E. Boyle: With the leave of the House, Sir, may I say that I cannot give any pledge this afternoon about a time-table. There are quite a number of candidates for tidying up this part of the law, and I do not think that a one-Clause Bill on this subject would be an advantage. What my right hon. Friend is keen on is that the Inland Revenue and the department of the Lord Chancellor and the Law Officers should look at all this part of the law and consider the various candidates before legislation is proposed.
    Mr. Wilson: By leave of the House, Sir, may I put this point to the hon. Gentleman? When he refers to this side of the law and the number of candidates, I am not clear whether he means the side of the law relating to maintenance and divorce——
    Sir E. Boyle: Yes.
    Mr. Wilson: And High Court orders.
    Sir E. Boyle: Maintenance and High Court orders.
    Mr. Wilson: Again, one does not know, from what the hon. Gentleman has said, how big a job that will be.
    At an earlier stage of the Bill my hon. Friend the Member for Sowerby (Mr. Houghton) put it to the Chancellor that there is the strongest case for legislation on the administration of taxes generally, in a non-revenue and non-taxing sense. For instance, there are the 15 or more recommendations of the Royal Commission. I take it that the hon. Gentleman is not referring to anything as broad as that. I hope that the Chancellor will consider the possibility of legislation in the near future to tidy up the administrative side of the tax system, of which this is one example.
    From what the hon. and learned Gentleman has said this seems rather more urgent than would justify it waiting to be considered as part of the general consideration of the administration of taxes. We are not too happy about the assurance which has been given, and if we do not divide the House I hope the Government will not take that as any
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    excuse for not proceeding quickly and reporting to the House at the earliest opportunity.
    Mr. Speaker: Does the hon. and learned Gentleman ask leave to withdraw the Motion?
    Mr. Simon: Yes, Sir. I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    New Clause.—(VICTORIA CROSS.)
    Annuities and additional pensions paid to holders of the Victoria Cross by virtue of holding that award shall be disregarded for all the purposes of the Income Tax Acts.—[Lieut.-Colonel Lipton.]
    Brought up, and read the First time.
    Lieut.-Colonel Marcus Lipton: I beg to move, That the Clause be read a Second time.
    Mr. Hector Hughes: On a point of order, Sir. I was not aware that my hon. and gallant Friend was moving the Second Reading of a new Clause. I should like to draw your attention to the following proposed Clause standing on the Notice Paper in my name and in the name of my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton)—Reduction of duty on publicans' licences:
    As from the fifth day of April, nineteen hundred and fifty-six, a reduction of twenty-five per cent. of the amount which would have been payable apart from this section shall be made (either by repayment or by remission of duty) in the licence duty in respect of a publican's or beer house licence:
    Provided that this section shall not have effect in relation to a licence granted in respect of any such licensed hotel or restaurant premises as are mentioned in the Fourth Schedule to the Customs and Excise Act, 1952.
    While I would not dream of contesting your discretion with regard to selection, Sir, may I ask is my Clause not being selected?
    Mr. Speaker: No, the hon. and learned Member's Clause is not being selected.
    Lieut.-Colonel Lipton: The object of the Clause I have moved is to exempt from Income Tax the annuities and additional pensions paid to holders of the Victoria Cross. I am obliged to the 36 hon. Members in all parties in this House who added their names in support of the proposed Clause.

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    As I understand, the position is as follows. In all Services holders of the Victoria Cross below commissioned rank, or below warrant rank in the case of the Navy, receive an annuity of £10 per annum plus an additional 6d. a day by way of addition to any other Service pension to which they may be entitled. In the case of a person who wins a bar to the Victoria Cross—only one is living at the present time—he, if he is an other rank, receives an additional £5 a year.
    My next point is that the only persons holding the Victoria Cross who are entitled to this annuity of £10 a year are persons who won the award while they were serving in the ranks and not as officers. The number of people who are affected by this Clause is, therefore, extremely limited. It can apply only to other ranks who gained the Victoria Cross and who are now living in this country. So far as I have been able to ascertain, the number of persons affected cannot be more than about 100 all told. In those circumstances, the cost to the Exchequer cannot exceed about £300 or £400 a year.
    4.0 p.m.
    Only a short time ago we celebrated the centenary of the Victoria Cross. It was a shock for me to learn, in the course of those centenary celebrations, from the holders of the Victoria Cross that the £10 annuity is liable to tax. I hope that the Government will take advantage of the occasion to agree to make this concession. It must be quite the smallest monetary concession which the Treasury has been asked to make in the course of the long proceedings on this year's Finance Bill.
    I want to allay the anxieties of the right hon. Gentleman the Chancellor of the Exchequer to this extent, that if, unfortunately, he has to say "No" to this Clause, I do not propose to divide the House. I think that a concession of this kind should be made with grace and not as a result of a Division, a snap vote with Members tramping through the Lobbies and that sort of thing. I know that other financial rewards are paid to holders of other decorations in certain circumstances, but I believe that if the Chancellor makes this concession he will not be opening wide the flood gates to a large number of demands, because it will be agreed that the Victoria Cross can be easily distinguished and the distinction is
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    accepted by everybody. In those circumstances, I hope that the Chancellor will find it possible to accept the Clause which, as I have indicated, is supported by hon. Members in all parts of the House.
    Sir Frank Medlicott: I beg to second the Motion.
    I am glad that the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) has stressed the comparatively small cost which will be involved in this concession, but I should still have supported it even if a substantial amount of money were entailed. It is rather undignified that a great nation has to snatch at such small amounts of revenue from sources such as this. When one recollects the kind of imposition made in the past—Purchase Tax on hearing aids for the deaf and on sticks for the blind—one wonders what kind of people they are who think up this kind of taxation and what kind of people we in the House are to allow such taxes to be imposed.
    It might be said that it is difficult to know where to draw the line, but I suggest that part of our responsibility is to draw lines, and to draw them in the right places. It might also be said that a question of principle is involved and that all income must be taxed. However, if we are to deal with this matter on the basis of principles of taxation, I venture to quote from what is surely the fountain head, namely, what Adam Smith said in his "Wealth of Nations". He said that the first principle of taxation was that
    "The subjects of every State ought to contribute towards the support of the State as nearly as possible in proportion to their respective abilities."
    If it is a question of contributing towards the support of the State, how better can a man do that than by fighting for it to the last degree of heroism? What else can a man do to support the State?
    Adam Smith went on to say, on this question of principles, that subjects should also contribute
    "… in proportion to the revenue which they respectively enjoy under the protection of the State."
    Here it is not so much the State protecting the heroes; it is they who protect the State. There is not one of us who would be here if it were not for the heroism and sacrifice of countless men who fought in two wars and of whom the holders of the Victoria Cross are the

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    supreme and magnificent symbol. It is right—or, at least, it is necessary—that we should levy taxation upon the earnings of enterprise and business and on salaries, wages, profits and dividends, but surely, as a nation, we are not so poor in resources or in spirit that we have to place taxation upon heroism.
    The Chancellor of the Exchequer (Mr. Harold Macmillan): I am very grateful for the way in which this Clause has been moved and seconded. I very much appreciate what the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) said when he indicated that he did not regard this as a matter suitable for dividing the House. I think that he was right about that. Perhaps I might be allowed, for the record, to state the facts a little more completely.
    Holders of the Victoria Cross below commissioned rank are granted a State pension of £10 a year with an additional pension of £5 a year for each bar to the decoration as from the date of the act of bravery for which the decoration was gained. Those with a Service or disability pension may also receive an additional pension of 6d. a day over and above the £10. The pension may be increased to £75 per annum in the event of the pensioner being unable to earn a livelihood in consequence of age or infirmity.
    As regards commissioned ranks, an officer who has been awarded the Victoria Cross and who is unable from age or infirmity to earn a livelihood may be granted an annuity not exceeding £75. These pensions are liable to Income Tax under Schedule E as pensions payable by the Crown, or out of public revenue. Those are the facts. It is also true that grants may be awarded to holders of the Military Cross which, of course, is a very much more widely held decoration and to holders of the Distinguished Flying Cross and the Distinguished Conduct Medal.
    This is very much a matter in which the House must make a decision as the House of Commons. I would not attempt to guide it contrary to what I thought might be its general view. In logic, in law, and having regard to the possible claims that might be made in respect of other similar decorations, I think it would be my duty to advise the House to reject the Clause, but I am bound to say that I find it difficult to do so. If the House
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    should wish, as an act of all Members of all parties, to make this signal gesture in this great year in the history of the Victoria Cross, I could not advise the House to put logic or strict legality above sentiment.
    I would ask the House, however, to say, as it will affect all future Chancellors of the Exchequer, that if this decision is made today, our successors should enter into a self-denying ordinance and not quote this as an example for turning almost all pensions of the Crown, which are all earned by an act of good service and merit, into a reason why the law should be put into abeyance in other cases.
    What is the reason that we should do this—openly and knowingly do it, contrary to strict logic or legality? I think we might permit ourselves this act of sentiment in this year for this reason: it is not a bad thing, I think, that we should sometimes go outside the strict rules which we have to follow in so many cases, nor would it be a bad thing for the House at this moment to declare its sense of gratitude and honour to men who fight for their Queen and country and who make the kind of heroic acts which are signalised by this unique decoration which is known throughout the world as one without parallel.
    That is not to say—and perhaps this is the experience of many here—that we have not known men and comrades who might have been recommended for the Victoria Cross. It is not to deny that we have served alongside and seen acts which no one has ever reported and which were never brought to attention because of the fury of battle or the death of those who might have been the recorders.
    If I may add this in the spirit in which the hon. and gallant Member moved the new Clause, not as Chancellor of the Exchequer but as an old Member of the House who has taken part in war, I think it would be a noble thing that we should make this little act of tribute both to what this decoration means and to the spirit which lies behind many hundreds of thousands of men who feel honoured at having been comrades of holders of the Victoria Cross.
    Contrary, therefore, to what I ought to do, I should like us to pass this new

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    Clause in this hundredth year of the Victoria Cross, in memory of a great Queen and in honour of our present Queen.
    Mr. Hugh Dalton: I was very happy to hear the Chancellor's speech. I am sure that in all parts of the House, particularly among those who have memories of either of the two past wars, through which we came with shocking sacrifice of the flower of our manhood to a victorious end, hon. Members will be happy if all sections of the House agree to follow the line which the Chancellor has so eloquently indicated.
    The Chancellor has spoken with a fine choice of language and an appeal to emotions which we all share, and I do not wish to elaborate the theme further than to say that we on these benches welcome both what he said and how he said it and hope that there will be no opposition in any part of the House to the acceptance of the new Clause moved by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton).
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause.—(REDUCTION OF DUTY ON PUBLIC SERVICE VEHICLES.)
    Section three of the Vehicles (Excise) Act, 1949, shall be amended by the insertion at the end of subsection (1) of the following words:—
    "Provided that in the case of a hackney carriage which is a public service vehicle the duty chargeable under this section shall not be more than twelve pounds ten shillings".—[Mr. Ernest Davies.]
    Brought up, and read the First time.
    4.15 p.m.
    Mr. Ernest Davies: I beg to move, That the Clause be read a Second time.
    The object of the new Clause is to reduce the annual Excise Duty paid on registrations by the larger of the public service vehicles. Under the Vehicles (Excise) Act, 1949, public service vehicles engaged in road passenger transport are taxed according to their seating capacity. Whereas up to a seating capacity of eight the duty is £12, when we get above that capacity the duty is more than that paid on an ordinary motor vehicle. In fact, it rises very steeply. For vehicles of from eight to 26-seat capacity, it is £12 plus £2 for every additional seat over eight.
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    Over a capacity of 26 it is £48 and over 32 it is £57 12s. This means that a 56-seater double-decker bus, which is the normal bus used in urban areas, bears an annual duty of £86 8s.
    The Clause is put forward with a view to trying to help in a very small degree the road passenger transport industry, which, as hon. Members are well aware from previous debates, is in a difficult position in that costs have risen substantially over recent years, fares have had to be increased until in many cases they have reached a point of diminishing returns and the industry is faced with the difficulty of either raising fares further and running the risk of traffic being diverted to other means or cutting down its services, reducing frequencies, or in other ways causing a deterioration of the public services.
    In Committee, I moved a new Clause, seconded by my hon. Friend the Member for Bradford, East (Mr. McLeavy), in which we proposed that there should be a discriminatory tax, favouring public service vehicles using diesel oil. This was rejected by the Financial Secretary on grounds which have been produced so frequently by the Treasury that they are becoming rather dog-eared. The main ground for rejection was that it would be a discrimination between different users of transport vehicles, that it would cost the Treasury too much—in that case £30 million—and that, in effect, it would not help rural transport very much because petrol vehicles were still used to a certain extent in rural areas and the concession would relate only to diesel oil.
    In framing this new Clause with a view to reducing the registration Excise duty, our objective has been to meet the objections which the Financial Secretary produced. In the first case, it would cost the Treasury far less to reduce the duty on public service vehicles to a flat rate of £12 10s.—that is, for those with a seating capacity of more than eight. The sum of £12 10s. is that paid on most motor cars today.
    It is difficult for me to estimate what the cost will be. No doubt the Economic Secretary will be able to give the House the figure. It would certainly not be more than £4 million to £5 million per annum; if we take a reasonable average of about £50 per annum for each of the 75,000 vehicles which are licensed, the

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    concession would come to about £5 million. The cost to the Treasury is, therefore, not exorbitant—a maximum of £5 million which, if it brought relief to the road passenger transport industry and prevented a further increase in fares or enabled existing services to be maintained, would be £5 million well spent.
    In the past, the Economic Secretary has used the argument of discrimination, but I believe that in this case we are discriminating against the public service vehicles. It seems to me quite unfair that a bus or a coach carrying from 26 to 56 passengers and occupying per passenger so much less road space than the private car, carrying a driver and possibly one, two or more passengers, should pay proportionately so much greater tax.
    It is the private motorist today who is in a favourable tax position. He is in a privileged position. It is the private motorist, particularly in the urban areas, who is contributing very largely to the congestion which confronts us and which creates such difficulties in maintaining the traffic flow. If the private motorist is moving along the road he is adding to the number of vehicles causing congestion. If his car is parked at the side of the road it stops a free flow of traffic by occupying road space.
    The big problem facing us today is that of finding parking space for the private motor car whereas, of course, the public service vehicle is provided with its own garage when not in operation. As I have stated, it carries many more passengers than the private motor car in relation to the amount of road space in which it operates. I suggest, therefore, that if there is any discrimination, it is against the road transport operator and in favour of the private motorist.
    The House has admitted that if we are to maintain our public road transport service something must be done. Unless relief in some form or another is given, there will be a reduction in the quality of the service and in its frequency, with the result that the public will not be served as well as it has been in the past.
    Of course, this is only a small suggestion and only a palliative. The longterm solution for this difficulty has, of course, been overthrown by the present Government. Had the Government pursued the road passenger transport policy
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    proposed by the Labour Government, and which was incorporated in previous legislation, the industry would not be faced with the difficulty which confronts it today.
    As it is, some 50 per cent. of the services operating in the rural areas today are running at a loss. They cannot go on operating at this loss which, in many cases, amounts to 1s. per car mile. Having rejected the previous suggestion made by this side of the House on the grounds that it was too costly, I ask the Economic Secretary to accept the suggestion contained in this Clause which would cost so much less.
    Mr. Frank McLeavy: I beg to second the Motion.
    First, I think that we ought to look at the history of this tax on passenger transport vehicles and of the relief from it given to other types of vehicles. I wish to emphasise the point made by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) that under the Vehicles (Excise) Act, 1949, and, indeed, under the Finance Act, 1952, weighty relief was conferred on the owners of certain types of vehicles. The passenger transport industry still has to pay a very high proportion of duty compared with private vehicles.
    My hon. Friend pointed out that under the 1945 and 1952 Acts, the tax on private motor cars was made at a flat rate of £12 10s. per annum as against £85 8s. per annum paid on a double-decker bus. When the Treasury decided to introduce the flat rate of tax for motor cars it was justified on the broad ground that the existing graduated tax was bedevilling the motor industry in relation to design. It is perfectly clear that in introducing the flat rate the Government were throwing overboard the whole question of a charge per passenger seat. That brought about the absurd position that though the seating capacity of private cars, from the Rolls-Royce downwards, varied very considerably indeed, the Government, nevertheless, thought it reasonable and in the interests of the motor car industry to apply the flat rate of tax.
    Nothing was done for the passenger transport industry. I do not think that anyone would deny that when such a radical change was made in the rate of taxation for motor cars it added force to the

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    argument that the passenger transport industry should receive similar treatment.
    My hon. Friend referred to the new Clause which we put down on an earlier stage of the Bill to provide exemption for the passenger transport industry from the fuel oil duty. At that time, the Economic Secretary made all kinds of excuses why the Treasury and the Chancellor of the Exchequer could not accept the Clause. I say very definitely to the Economic Secretary and to his right hon. Friend that the road transport industry is now in such a difficult financial position that, unless the Government do something to relieve it of some of the burden of taxation, fares will eventually have to go up again, with consequential effects upon the cost of living.
    I do not think that there is any other industry so taxed, in one way or another, as the road passenger transport industry. For the life of me, I cannot understand the mentality of the people who are advising the Chancellor in regard to this tax. They seem to assume that if a bus has a seating capacity for 50 or 54 persons it is actually carrying a full complement of passengers throughout the whole of its operating time which is, perhaps, from 5.30 in the morning to 12 o'clock at night. In reality, the position is quite different.
    Road passenger transport is in an entirely different position from that of any other section of the transport industry. It is in a different position from that of goods transport. Whereas goods transport carries a load from one point to another, passenger transport has to maintain a reasonable measure of service during both peak and off-peak periods. It has to provide—and the Traffic Commissioners are very keen on this—a reasonable amount of unremunerative services in the country areas and elsewhere, and it has to try to maintain a reasonable standard of fares.
    4.30 p.m.
    It is of vital importance that the Treasury should realise the difficult position of the passenger transport industry. If vehicles were carrying a full complement of passengers from the very commencement of their duty first thing in the morning until last thing at night there might be some justification for this iniquitous tax upon seating capacity, but the fact that in many cases buses run at a loss during off-peak periods, and that
    422
    transport undertakings are able more or less to balance their budgets only because of the traffic at peak periods, seems to me to merit fresh consideration of this matter.
    During our consideration of the Budget, in discussing the subject of fuel oil taxation I pointed out to the Financial Secretary that at the end of this financial year about 50 per cent. of the municipal transport undertakings would be in debt. I should like to ask one question of the Economic Secretary. If the same position prevailed in any other industry, would the Government be so complacent about it? If it were privately owned, would they be indifferent to the fact that this industry, which has made such a tremendous contribution to the transport of the people to and from the factories, workshops and dockyards, is having to raise its prices because of heavy taxation?
    Something must be done for passenger transport undertakings. It is no good the Economic Secretary giving us a stock reply; what we and the industry want to know is whether or not the Treasury will face its responsibilities in connection with the financial difficulties of the industry. During the war, when wage rates and conditions of employment in the transport industry were nothing like so good as those which obtained in munition factories and dockyards, I remember that we had the utmost difficulty in getting staff to man the buses necessary to keep the war machine going. We were not allowed to increase our fares in order to provide more attractive salaries and conditions of employment.
    Wage rates and conditions of employment in the industry today are still not as good as those prevailing in other industries. Many hon. Members will be aware that the industry is finding it difficult to man a sufficient number of buses in large cities and towns. The Transport Commission, or any corporation undertaking, in Bradford, Leeds, Sheffield, or elsewhere, will tell the same old story. They will say, "We cannot get the staff to man all the buses required to provide sufficient transport throughout the country." The reason for this is, very largely, that they are not in a financial position to pay rates of wages and provide conditions of employment such as would attract an increased intake of personnel.

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    We do not want to be fobbed off in this matter. We want a statement from the Treasury about its attitude to this very difficult problem. We have had plenty of sympathy in the past. Just before the last Election the Lord Privy Seal was full of sympathy and understanding for the difficulties facing the transport industry, but he did not do anything. I am asking the Treasury Bench not for a lot of sympathetic words or expressions of appreciation of the work which the industry is doing in the life of the community; what I want is a statement which will assure the industry that the Government will give it some financial help in order to enable it to meet its many difficulties.
    There is an overwhelming case for the acceptance of the Clause. It is unreasonable that the working man's Rolls-Royce should be taxed to the full while the real Rolls-Royces, used by the few privileged individuals who can afford to run them, bear a tax of only £12 10s. a year. The whole thing is outrageous. I hope that the Treasury will say that it will give financial assistance to the industry and will accept the Clause because it feels that the industry is entitled to some financial consideration.
    Mr. David Jones: I want to put forward one or two other reasons why the Economic Secretary should accept the Clause. I want, first, to take the position which exists in his native City of Birmingham. He knows he well as I do that every morning about 20 double-decker buses leave Birmingham for the outskirts, carrying workmen to various factories. He also knows that after making two journeys in the morning those vehicles go into the depot until they are required, in the evening, to run empty to the factories in order to make one or two trips back to the centre of the town carrying the workers from those factories, and that those vehicles are in use for about three hours a day only, for five days a week.
    That test can be applied to very many other towns. For many years I was the chairman of a transport authority in South Wales which had to turn out 17 double-decker buses every morning to convey workmen from various villages to the Treforest Trading Estate. They were not
    424
    required again until five o'clock in the evening, when they took those workmen back home. They were used only for 16 hours per five-day week. Yet before one of those vehicles could be put on the road it had to pay at least £86 8s. in taxation. In those circumstances there is no inducement to provide vehicles, and any municipality will, if it can, refuse to undertake these workmen's services.
    Furthermore, because of taxation being applied upon a basis of the seating capacity and not the size of the vehicle, there is an inducement to reduce the number of seats, with the result that at peak periods many passengers have to stand for whom seats would have been provided if this system of taxation had not been devised.
    There is not a Member of this House representing a rural area who has not, at some time or another, addressed communications to the Minister of Transport about this withdrawal of rural services. I had the privilege the other day of attending a conference at Newcastle, convened by the North Eastern Development Association and a Northumbrian rural council, which was seriously concerned about the lack of any facilities at all for bringing the people from the rural countryside into the towns.
    The reason given by both authorities, by the companies which the British Transport Commission control and by the privately owned companies, many of whom are under the control of the British Electric Traction Company, for the withdrawal of these services was that they were unremunerative and that no company, whether publicly or privately owned, could be expected to run a majority of its services which were unremunerative.
    There is a movement in the transport world to reintroduce the one-man bus because it is believed that by the removal of the conductor it will be possible to reduce costs, but even if a bus company put a 20-seaer bus on the road it would have to pay in taxation about £36 before it could be used. Because of the scarcity of traffic in the rural areas, a vehicle may be standing in a garage for long periods during the day. It may be used for service only in the morning, in the middle of the day and in the early evening. Before that vehicle can be put on the road at all £36 has to be paid. If a

    425
    vehicle with 26 seats is used, which is a popular type of vehicle for rural services, that figure is increased. I have calculated that it requires an operator of a 26-seater vehicle which is used for 313 days in the year to collect an average of 3s. per day in fares in order to pay the taxation alone.
    This is a matter which should be sympathetically examined by the Treasury. The Chancellor recently talked about the plateau of stability. Requests have been made and assented to that there should be no increase in prices during the next 12 months. Exhortations are being made to the trade unions not to make any demands for increases in wages. Here is a glorious opportunity for the Treasury to say that it will make this contribution so that some of the costs which fall upon transport operators may be eased.
    I understand from my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) that the cost to the Treasury of this concession would not be very high. At least, the Economic Secretary will not be able to tell us on this occasion that it is unfair to discriminate between heavy oil-consuming buses and petrol buses. Indeed, the right hon. Gentleman who is now the Minister of Pensions and National Insurance once argued against making any concession of tax on diesel oil on the ground that petrol vehicles were used in the rural services and heavy oil vehicles in the urban services.
    A simple inquiry from the Municipal Transport Association would have revealed to the right hon. Gentleman that that was pure nonsense. There is only a very small percentage of public service vehicles today which are not heavy oil-consuming vehicles. Therefore, he cannot get away with a statement that a discrimination can be made between the two forms of fuel.
    4.45 p.m.
    Unlike my hon. Friend the Member for Bradford, East (Mr. McLeavy), I do not think that if this concession were made it would make all the difference in the world to the bus operators, many of whom would still have extreme difficulty in operating their rural services.
    The Economic Secretary knows better than anyone else that a high degree of efficiency in the agricultural industry is largely dependent upon the good will of
    426
    the agricultural workers. What is he to say to the agricultural worker who leaves that industry to go to the nearest big town to live and work if all the services which are so necessary for a decent existence in the countryside are being withdrawn?
    Here is an opportunity for the Government to make a gesture which will not cost them very much. I can understand the Treasury refusing to make concessions of any kind which will mean a big loss to the revenue, but here is an opportunity for the Government to say to the bus operators that at least they are trying to help them to use the vehicles which they have to their maximum capacity, because they no longer propose to tax them on the basis of the number of seats provided.
    I hope that we shall hear from the Economic Secretary that he will make this little gesture, which will mean so much to the rural areas.
    Mr. Sidney Dye: I support the new Clause which has been so ably moved by my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), because I represent a rural constituency in which, quite recently, a number of rural bus services ceased to operate because the operators found those services unremunerative. It is, of course, a hardship to the people in the small villages, who cannot afford to own their own motor cars, if there are no public services to enable them to go into the towns to do their shopping. This affects the older people in particular.
    I received a letter today from an old-age pensioner in my constituency who lives at South Ickenham. He complained that old-age pensioners now had to pay increased rates on their property because of the higher charges made by the rural district council and yet they were getting fewer services. One of the services which they were no longer getting was the bus service which ran along the rural road not far from their doors. In Norfolk many private operators who have operated bus services for many years, have, owing to the increasing cost of running them—not, I think, because of a decrease in the number of people using them—been compelled to withdraw the services. That comes after the Conservative Party has been in Government for about five years. It comes from a party

    427
    which has claimed in the past to look after the rural areas in particular.
    I was very interested in a debate in this House, about six weeks ago, on a Motion by the hon. Gentleman the Member for Westmorland (Mr. Vane), in which he drew attention to the need for assisting the rural transport services. That Motion was accepted by the House, but we do not want to pass Motions which are meaningless and which lead us nowhere. If the Government are sincere in their desire to assist rural transport, and road transport in particular, here is a way in which they can do it. They will be assisting not only the people who operate the transport and the passengers, but the local authorities.
    Norfolk pays more than £100,000 a year for the transport of school children by buses. If, therefore, some deduction were made on the licences for these vehicles it would mean a reduction in the charge for the school buses, and that would help the local rates. It would help the local rates by only 25 per cent. but would help the Exchequer by probably 75 per cent. It is clear that we should not be giving all this concession away. Some would come back in the form of reduced transport charges for all the children from the village schools to the grammar and secondary modern schools throughout the country.
    With that in mind, I hope that the Government spokesman will reply in favour of this proposal and will say that, representing the party which says that it looks after these rural areas, the Government recognise this as a means of giving that help. It might not be the best means but it is a means which is at our disposal at the moment, and such a concession would have an immediate effect in the rural areas. Although they all seem to be absent, there are many hon. Members of the party opposite who would welcome this. Why they are absent I really do not know. There is rather a poor showing by the back benchers of the Conservative Party, so many of whom represent, or misrepresent, or represent by absence, the rural districts of England.
    This is something which vitally affects the life of the rural communities. Our suggestion is a means by which we can stimulate new transport and keep existing transport on the roads. The life and
    428
    heart of a rural community is sustained by the people being able to get out of the villages and away from the farms into the towns for enjoyment, for the pleasure of shopping and for other purposes. Transport is essential to the rural community. I hope that the Government will look favourably upon this new Clause.
    Sir E. Boyle: The hon. Member for Norfolk, South-West (Mr. Dye) has just complained that there are not present on this side of the House more hon. Members representing the rural areas. I cannot resist pointing out that at any rate one rural Member, my hon. Friend the Member for Rye (Mr. Godman Irvine), who has the doubtful honour of representing myself, has been present throughout the debate.
    We have listened to some very interesting speeches on this new Clause, which was so ably moved by the hon. Member for Enfield, East (Mr. Ernest Davies). I will resist the temptation of engaging with him in a general debate on transport matters, partly because I do not think that you, Mr. Deputy-Speaker, would like that on this Clause, and partly because I must confess that transport is one subject on which I have never ventured to intervene in the House.
    As the hon. Member explained, the purpose of the new Clause is to reduce the rate of duty payable on public service vehicles so that it shall not exceed that payable on private cars, that is to say, £12 10s. a year. The first observation that I would make to the House is about the cost of accepting this proposal. The annual yield from hackney carriages seating more than eight persons is about £5½ million. This new Clause would reduce the yield to under £1 million, and I will simply say that in connection with a Budget in which my right hon. Friend has had to say "No" to many claimants, I am sure the House will realise that the proposal has to be scrutinised even more rigorously than usual. Certainly, to accept such a new Clause would go against the general principles of the Budget.
    I should not, however, like to rest my argument principally on those grounds, but would remind the House that the whole basis of the vehicle taxation system is that, in the main, vehicles operated for profit or for business purposes pay more

    429
    than private vehicles. In particular, the higher rates for the much heavier and larger public service and goods vehicles reflect, in part, their greater use of the roads and the greater wear they cause to the roads.
    I would, in particular, put this point to hon. Members opposite who have spoken. Any concession for public service vehicles would almost inevitably stimulate a campaign for a similar concession for goods vehicles. [HON. MEMBERS: "Oh."] I have no doubt about that, and I do not think that hon. Members opposite will dispute it. If one looks at the figures, in general the licence duties on goods vehicles are appreciably heavier than those on public service vehicles of equal weight.
    Mr. McLeavy: I think that the hon. Gentleman has made an important point which brings us back to the argument that I put forward, which was that the people who are advising the Treasury on this matter have not got the facts right. Goods vehicles cannot be compared with passenger vehicles. They carry a given load from one point to another. Passenger transport vehicles have to provide the service. They very often travel with less than half a load, sometimes a quarter of a load, but they have to maintain the service. They have an obligation to the community. There is really no comparison between the two, and I am really surprised that the Economic Secretary should try to get away with that "phoney" argument.
    Sir E. Boyle: I know the hon. Gentleman's great knowledge of, and sincerity in these matters, on which he often addresses the House, but I take absolutely full responsibility for the statement that I have just made.
    Certainly, if one looks at the figures it cannot be denied that, even agreeing with some part of the hon. Gentleman's point, under the present system they show a considerable differentiation against goods vehicles as compared with public service vehicles. One can hardly dispute that there is that differentiation, although I do not want to go into a mass of figures.
    The only other point is that relating to operating costs—which were referred to by more than one hon. Member. An analysis of the expenditure of operators of more than five buses or coaches, excluding the London Transport Executive,
    430
    shows that in 1954–55 the cost of licences of all kinds was 0·56d. per vehicle mile out of a total cost of 22·85d. per vehicle mile. I think that those figures show clearly that the reduction in duty proposed would not have any significant effect on the operating costs.
    Mr. D. Jones: That analysis is misleading. The hon. Gentleman takes the big cities, where there are dozens of vehicles operating continuously all day, and compares them with the rural and semi-rural areas, where the operators have to put numbers of vehicles on the road early in the morning and late at night and only have them on the road for about three hours a day. That clearly shows that to average it out in this way is simply nonsense.
    Sir E. Boyle: I have not, of course, got breakdown figures relating exclusively to the big cities, but there is that comparison between the 0·56d. and the 22·85d., and even if one excludes the big cities I do not think there is as much in the hon. Gentleman's point as he made out.
    It is, then, for those reasons that I must ask the House to resist the new Clause, and I can assure the House that my right hon. Friend has looked at it very carefully before coming to his conclusion.
    5.0 p.m.
    Mr. John Cronin: I listened to the Economic Secretary with some interest. He had one piece of praise for the proposed new Clause, which was that it went entirely against the principles of the Budget. That was praise, because the Budget is one of the most disappointing that we have had.
    I had some difficulty in following the arguments of the Economic Secretary. He said that public service vehicles had a large seating capacity and used the road more, and therefore caused greater wear. That was a valid point. The 50-seater bus does cause more wear to the road than a four-seater car. We ought, however, to consider the amount of wear of the road per passenger carried. That is the whole difference in the argument. Admittedly a public service vehicle causes more wear than a Rolls-Royce, but in one case 50 passengers are carried and in the other case one passenger, or perhaps one passenger and a chauffeur.

    431
    The hon. Gentleman said, on the difference in cost, that ·56d. per vehicle mile would be the saving against an operating cost of 22·85d. That is a saving of 2 per cent., a marginal saving, but all road transport works on a marginal basis in expanding its service and working out its profits and losses. If this concession were made it would represent a very big difference to rural areas, which suffer severely. It would also have a great psychological effect. I come from an area in which there are many farmers and coal miners, and where road transport is a very great problem. Our local industries are of the greatest importance. Farmers and coal miners are most deserving people, yet they often find themselves in the utmost difficulty about transport. Something should be done to assist them.
    The tax is retrogressive in every way. It is rather like the tax on windows of about 150 years ago, because it is a tax upon efficiency and amenity. My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) pointed out that in the Second Schedule of the Vehicles (Excise) Act, 1949, there is a tax of £57 12s. on vehicles holding more than 32 persons. My hon. Friend did not mention it, but there is a tax on top of that of £1 4s. for every additional passenger carried. Apparently the more a vehicle takes people off the roads, reduces congestion and lessens the danger of casualties, the more severely it is taxed. That principle cannot be justified by any enlightened legislature.
    There is some purpose in a tax based upon commodities which are of doubtful social value. I would not argue much about the taxation of alcohol, which has deleterious effects, or a tax on tobacco, which is the basis of an innocuous but somewhat self-indulgent habit; but nobody travels on a public service vehicle from choice. It is in no sense a luxury or an indulgence. It is often a rather grim and grisly necessity which many hon. Members, particularly on this side of the House, face with apprehension and doubt.
    Mr. Cyril Bence: I am surprised that my hon. Friend the Member for Loughborough (Mr. Cronin) should say that. On two occasions since I have been a Member of
    432
    this House I have had the temerity to accept the offer of a lift from another hon. Member. I assure my hon. Friend that I was a bag of nerves at the end of the journey on both occasions. I have never had that experience in a public service vehicle.
    Mr. Dye: My hon. Friend will never get another lift.
    Mr. Cronin: I can sympathise with my hon. Friend.
    What I had in mind was not the nervous effect of travelling in a public vehicle, but costs. Even efficient services have high operating costs. If I were to take a public service vehicle from Ashby-de-la-Zouch to Loughborough, a distance of 12 miles, I should have to go by a circuitous route taking about two hours. Higher operating costs affect the charges made by public vehicles, in spite of the great attempts that are made to keep them reasonable.
    The tax will have a direct effect in our rural areas, and upon members of the community who are of very great value, such as coal miners and agricultural workers. If we agree to the proposed new Clause it will be an indication to the country that we are making some attempt to cope with inflation.
    Mr. A. G. Bottomley: I had occasion to say yesterday that the Economic Secretary is always polite and considerate, and I meant it. If I measure him by his usual standard, I must say that he has been inconsiderate today. He has not given a serious reply. He treated this new Clause far too lightly.
    He explained that the subject was new to him and that he had not spoken on it before. He also made mention of the fact that the hon. Member for Rye (Mr. Godman Irvine), his own Member of Parliament, was present. I would not be surprised if the hon. Member shares the view of the majority of the Members of the House in wishing that the Economic Secretary had not spoken at all.
    My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) moved the proposed new Clause with great knowledge and skill. One of my hon. Friends drew an analogy between a public service vehicle, the Rolls-Royce of the worker, and the car in which the

    433
    businessman goes to business, he being a worker in a Rolls-Royce. My hon. Friend pointed out that the tax discriminated, because it was heavier on the public service vehicle than on the Rolls-Royce. My hon. Friend did not add that the worker does not get any tax relief on the public service vehicle whereas the user of the Rolls-Royce can put it down to his business account.
    Mr. Bence: Like the Daimler.
    Mr. Bottomley: I think we had better forget all about the Docker business. I have, anyhow. The less we have to say about him the better.
    One argument which the Economic Secretary used about cost was not too powerful. On this side of the House we have continually taken the view that the whole field of public transport is so important to our economy that we ought to take off whatever burden is imposed upon it, if it is possible to do so. I readily agree that, with the great amount of revenue that is received now from the taxation of transport generally, it would be difficult for any Chancellor to suggest that it should be done away with, but the very heavy tax justifies relief in one quarter or another. We tried, without success, on diesel oil. The proposed new Clause is another way, and we hoped that the Chancellor could meet our wishes.
    I will try to give one or two other arguments in addition to the powerful ones put forward by my hon. Friend the Member for Enfield, East. In view of modern transport needs, we should do everything possible to ensure that transport is not run at a loss and is able to keep on the roads to serve the community, not only so as to make a profit but possibly as a social service. It is important that transport should convey men and women to and from their work as speedily as can be. If we have a further distribution of industry, it will be necessary sometimes to have longer journeys, which can be done more expeditiously and efficiently if transport can be provided. We cannot expect that transport to be provided if losses are made such as we have heard about this afternoon. That is particularly the case in the rural areas.
    One of the reasons given by the Economic Secretary against reducing the excise tax in this case was that it would
    434
    not be fair. I do not know on what he bases that argument. As I understood it, it was that a public transport vehicle is heavy and is a greater liability because it causes more wear and tear on the roads than does a private vehicle. That is not a very convincing argument because, whereas on an average a car carries four passengers, a public service vehicle carries very many passengers. If we worked out the cost per head of those carried, we would find that the argument is not convincing and not one which should be put forward in order to defeat this Clause.
    I stress the need for a reduction in this tax in order to offset losses, especially in the rural services. The hon. Member for Gravesend (Mr. Kirk) has the honour to represent a constituency in the same part of Kent as my constituency. I think he will confirm that we get complaints from constituents and others of the need for bus services and public transport services in very important centres which are developing for industrial purposes. I am sure that view would be shared by hon. Members on both sides of the House. If we are to build up our industry it is necessary to provide cheap passenger transport.
    That is also necessary if we are to build up our export trade. The two are linked together. If we are to limit the output of passenger service vehicles, which are in demand all over the world, it will mean that to that extent we shall limit our opportunities of building up a great industry providing export potential and thereby helping the economy of the country.
    The Economic Secretary also said that this cannot be done now. I do not know when these things can be done. He said that if this were conceded there would be pressure for a similar concession for commercial vehicles and others. I ask him to consider how the Chancellor of the Exchequer pushed all that aside this afternoon when, quite rightly, he conceded the claims of holders of the Victoria Cross. Why cannot the Economic Secretary take the same view in this instance and say that this concession shall apply only to public service vehicles? if he would do that it would benefit the nation as a whole. The hon. Gentleman ought to look at this again and not to turn it down. I ask him to reconsider

    435
    the matter. If he will not I shall have no alternative but to ask my hon. Friends to divide the House.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 196, Noes 245.

    Division No. 261.]

    AYES

    [5.14 p.m.

    Ainsley, J. W.

    Grimond, J.

    Paget, R. T.

    Albu, A. H.

    Hale, Leslie

    Paling, Will, T. (Dewsbury)

    Allaun, Frank (Salford, E.)

    Hall, Rt. Hn. Glenvil (Colns Valley)

    Pannell, Charles (Leeds, W.)

    Allen, Arthur (Bosworth)

    Hamilton, W. W.

    Parkin, B. T.

    Allen, Scholefield (Crewe)

    Harrison, J. (Nottingham, N.)

    Pearson, A.

    Anderson, Frank

    Hastings, S.

    Plummer, Sir Leslie

    Awbery, S. S.

    Hayman, F. H.

    Popplewell, E.

    Bacon, Miss Alice

    Healey, Denis

    Price, J. T. (Westhoughton)

    Balfour, A.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Price, Philips (Gloucestershire, W.)

    Bence, C. R. (Dunbartonshire, E.)

    Herbison, Miss M.

    Probert, A. R.

    Benson, G.

    Hobson, C. R.

    Proctor, W. T.

    Beswick, F.

    Holman, P.

    Pryde, D. J.

    Blackburn, F.

    Holmes, Horace

    Randall, H. E.

    Blenkinsop, A.

    Holt, A. F.

    Rankin, John

    Boardman, H.

    Howell, Charles (Perry Barr)

    Redhead, E. C.

    Bottomley, Rt. Hon. A. G.

    Howell, Denis (All Saints)

    Reeves, J.

    Bowden, H. W. (Leicester, S. W.)

    Hoy, J. H.

    Reid, William

    Bowles, F. G.

    Hubbard, T. F.

    Roberts, Albert (Normanton)

    Boyd, T. C.

    Hughes, Cledwyn (Anglesey)

    Roberts, Goronwy (Caernarvon)

    Braddock, Mrs. Elizabeth

    Hughes, Emrys (S, Ayrshire)

    Robinson, Kenneth (St. Pancras, N.)

    Brockway, A. F.

    Hughes, Hector (Aberdeen, N.)

    Royle, C.

    Broughton, Dr. A. D. D.

    Hunter, A. E.

    Shinwell, Rt. Hon. E.

    Brown, Rt. Hon. George (Belper)

    Hynd, H. (Accrington)

    Short, E. W.

    Brown, Thomas (Ince)

    Hynd, J. B. (Attercliffe)

    Silverman, Julius (Aston)

    Burke, W. A.

    Irving, S. (Dartford)

    Silverman, Sydney (Nelson)

    Burton, Miss F. E.

    Janner, B.

    Skeffington, A. M.

    Butler, Mrs. Joyce (Wood Green)

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

    Slater, J. (Sedgefield)

    Castle, Mrs. B. A.

    Jeger, George (Goole)

    Smith, Ellis (Stoke, S.)

    Champion, A. J.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Snow, J. W.

    Clunie, J.

    Jenkins, Roy (Stechford)

    Soskice, Rt. Hon. Sir Frank

    Coldrick, W.

    Johnson, James (Rugby)

    Sparks, J. A.

    Collick, P. H. (Birkenhead)

    Jones, Rt. Hon. A. Creech (Wakefield)

    Steele, T.

    Collins, V. J. (Shoreditch & Finsbury)

    Jones, David (The Hartlepools)

    Stewart, Michael (Fulham)

    Cove, W. G.

    Jones, J. Idwal (Wrexham)

    Stokes, Rt. Hon. R. R. (Ipswich)

    Craddock, George (Bradford, S.)

    Jones, T. W. (Merioneth)

    Strauss, Rt. Hon. George (Vauxhall)

    Cronin, J. D.

    Key, Rt. Hon. C. W.

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Crossman, R. H. S.

    King, Dr. H. M.

    Summerskill, Rt. Hon. E.

    Cullen, Mrs. A.

    Lawson, G. M.

    Swingler, S. T.

    Daines, P.

    Ledger, R. J.

    Thomas, George (Cardiff)

    Dalton, Rt. Hon. H.

    Lee, Frederick (Newton)

    Thomson, George (Dundee, E.)

    Darling, George (Hillsborough)

    Lee, Miss Jennie (Cannock)

    Thornton, E.

    Davies, Rt. Hon. Clement (Montgomery)

    Lipton, Lt.-Col. M.

    Timmons, J.

    Davies, Ernest (Enfield, E.)

    Logan, D. G.

    Tomney, F.

    Davies, Stephen (Merthyr)

    Mabon, Dr. J. Dickson

    Ungoed-Thomas, Sir Lynn

    Deer, G.

    MacColl, J. E.

    Usborne, H. C.

    de Freitas, Geoffrey

    McInnes, J.

    Weitzman, D.

    Delargy, H. J.

    McKay, John (Wallsend)

    Wells, Percy (Faversham)

    Dodds, N. N.

    McLeavy, Frank

    Wells, William (Walsall, N.)

    Dugdale, Rt. Hn. John (W. Brmwch)

    MacPherson, Malcolm (Stirling)

    West, D. G.

    Dye, S.

    Mahon, Simon

    Wheeldon, W. E.

    Edwards, Rt. Hon. John (Brighouse)

    Mann, Mrs. Jean

    White, Mrs. Eirene (E. Flint)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Marquand, Rt. Hon. H. A.

    Wilkins, W. A.

    Edwards, W. J. (Stepney)

    Mayhew, C. P.

    Williams, David (Neath)

    Evans, Albert (Islington, S. W.)

    Messer, Sir F.

    Williams, Rev. Llywelyn (Ab'tillery)

    Evans, Edward (Lowestoft)

    Mitchison, G. R.

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

    Evans, Stanley (Wednesbury)

    Moody, A. S.

    Williams, W. R. (Openshaw)

    Fernyhough, E.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Williams, W. T. (Barons Court)

    Flenburgh, W.

    Mort, D. L.

    Willis, Eustace (Edinburgh, E.)

    Fraser, Thomas (Hamilton)

    Moss, R.

    Wilson, Rt. Hon. Harold (Huyton)

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

    Mulley, F. W.

    Winterbottom, Richard

    Gibson, C. W.

    Oliver, G. H.

    Woodburn, Rt. Hon. A.

    Gooch, E. G.

    Oram, A. E.

    Yates, V. (Ladywood)

    Gordon Walker, Rt. Hon. P. C.

    Orbach, M.

    Younger, Rt. Hon. K.

    Greenwood, Anthony

    Oswald, T.

    Zilliacus, K.

    Grenfell, Rt. Hon. D. R.

    Owen, W. J.

    Grey, C. F.

    Padley, W. E.

    TELLERS FOR THE AYES:

    Mr. Rogers and Mr. John Taylor

    NOES

    Agnew, Cmdr. P. G.

    Armstrong, C. W.

    Baldwin, A. E.

    Aitken, W. T.

    Ashton, H.

    Balniel, Lord

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

    Astor, Hon. J. J.

    Barter, John

    Alport, C. J. M.

    Atkins, H. E.

    Baxter, Sir Beverley

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Baldock, Lt.-Cmdr. J. M.

    Beamish, Maj. Tufton

    437

    Bell, Philip (Bolton, E.)

    Head, Rt. Hon. A. H.

    Noble, Comdr. A. H. P.

    Bell, Ronald (Bucks, S.)

    Heath, Rt. Hon. E. R. G.

    Oakshott, H. D.

    Bennett, F. M. (Torquay)

    Henderson, John (Cathcart)

    Ormsby-Gore, Hon. W. D.

    Bevins, J. R. (Toxteth)

    Hill, Rt. Hon. Charles (Luton)

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

    Bidgood, J. C.

    Hill, Mrs. E. (Wythenshawe)

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

    Biggs-Davison, J. A.

    Hill, John (S. Norfolk)

    Osborne, C.

    Birch, Rt. Hon. Nigel

    Hirst, Geoffrey

    Page, R. G.

    Bishop, F. P.

    Holland-Martin, C. J.

    Partridge, E.

    Black, C. W.

    Hope, Lord John

    Peyton, J. W. W.

    Body, R. F.

    Hornby, R. P.

    Pilkington, Capt. R. A.

    Bossom, Sir Alfred

    Horobin, Sir Ian

    Pitman, I. J.

    Boyle, Sir Edward

    Horsbrugh, R. Hon. Dame Florence

    Pitt, Miss E. M.

    Brains, B. R.

    Howard, Hon. Greville (St. Ives)

    Pott, H. P.

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

    Howard, John (Test)

    Powell, J. Enoch

    Brooke, Rt. Hon. Henry

    Hudson, Sir Austin (Lewisham, N.)

    Price, Henry (Lewisham, W.)

    Brooman-White, R. C.

    Hughes Hallett, Vice-Admiral J.

    Prior-Palmer, Brig. O. L.

    Browne, J. Nixon (Craigton)

    Hughes-Young, M. H. C.

    Profumo, J. D.

    Bryan, P.

    Hurd, A. R.

    Raikes, Sir Victor

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

    Hutchison, Sir Ian Clark (E'b'gh, W,)

    Ramsden, J. E.

    Bullus, Wing Commander E. E.

    Hutchison, Sir James (Scotstoun)

    Rawlinson, Peter

    Burden, F. F. A.

    Hyde, Montgomery

    Redmayne, M.

    Channon, H.

    Iremonger, T. L.

    Rees-Davies, W. R.

    Chichester-Clark, R.

    Irving, Bryant Godman (Rye)

    Remnant, Hon. P.

    Clarke, Brig. Terence (Portsmth, W.)

    Jenkins, Robert (Dulwich)

    Ridsdale, J. E.

    Cole, Norman

    Jennings, J. C. (Burton)

    Rippon, A. G. F.

    Cooper, Sqn. Ldr. Albert

    Johnson, Dr. Donald (Carlisle)

    Robertson, Sir David

    Cooper-Key, E. M.

    Johnson, Eric (Blackley)

    Rodgers, John (Sevenoaks)

    Cordeaux, Lt.-Col. J. K.

    Joynson-Hicks, Hon. Sir Lancelot

    Roper, Sir Harold

    Corfield, Capt. F. V.

    Keegan, D.

    Ropner, Col. Sir Leonard

    Craddock, Beresford (Spelthorne)

    Kerby, Capt. H. B.

    Russell, R. S.

    Crowder, Sir John (Finchley)

    Kerr, H. W.

    Sandys, Rt. Hon. D.

    Cunningham, Knox

    Kershaw, J. A.

    Schofield, Lt.-Col. W.

    Currie, G. B. H.

    Kimball, M.

    Scott-Miller, Cmdr. R.

    Dance, J. C. G.

    Kirk, P. M.

    Sharples, R. C.

    Davidson, Viscountess

    Lagden, C. W.

    Shepherd, William

    D'Avigdor-Goldsmid, Sir Henry

    Lambert, Hon. G.

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

    Deedes, W. F.

    Leavey, J. A.

    Spearman, Sir Alexander

    Digby, Simon Wingfield

    Leburn, W. G.

    Speir, R. M.

    Donaldson, Cmdr. C. E. McA.

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

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Doughty, C. J. A.

    Legh, Hon. Peter (Petersfield)

    Stevens, Geoffrey

    du Cann, E. D. L.

    Lindsay, Hon. James (Devon, N.)

    Steward, Harold (Stockport, S.)

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

    Linstead, Sir H. N.

    Steward, Sir William (Woolwich, W.)

    Duncan, Capt. J. A. L.

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

    Stoddart-Scott, Col, M.

    Duthie, W. S.

    Lloyd, Rt. Hon. Selwyn (Wirral)

    Studholme, Sir Henry

    Eccles, Rt. Hon. Sir David

    Lloyd-George, Maj. Rt. Hon. G.

    Taylor, Sir Charles (Eastbourne)

    Eden, Rt. Hn. Sir A. (Warwick&L'm'tn)

    Longden, Gilbert

    Taylor, William (Bradford, N.)

    Eden, J. B. (Bournemouth, West)

    Lucas, P. B. (Brentford & Chiswick)

    Teeling, W.

    Errington, Sir Eric

    Lucas-Tooth, Sir Hugh

    Thomas, Leslie (Canterbury)

    Erroll, F. J.

    Mackeson, Brig. Sir Harry

    Thomas, P. J. M. (Conway)

    Farey-Jones, F. W.

    Mackie, J. H. (Galloway)

    Thompson, Kenneth (Walton)

    Fell, A.

    Maclay, Rt. Hon. John

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

    Finlay, Graeme

    McLean, Nell (Inverness)

    Thornton-Kemsley, C. N.

    Fisher, Nigel

    MacLeod, John (Ross & Cromarty)

    Tiley, A. (Bradford, W.)

    Fletcher-Cooke, C.

    Macmillan, Rt. Hn. Harold (Bromley)

    Tilney, John (Wavertree)

    Fort, R.

    Macpherson, Niall (Dumfries)

    Touche, Sir Gordon

    Freeth, D. K.

    Maddan, Martin

    Turner, H. F. L.

    Gammans, Sir David

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

    Tweedsmuir, Lady

    George, J. C. (Pollok)

    Maitland, Hon. Patrick (Lanark)

    Vane, W. M. F.

    Gibson-Watt, D.

    Markham, Major Sir Frank

    Vickers, Miss J. H.

    Glover, D.

    Marlowe, A. A. H.

    Vosper, D. F.

    Godber, J. B.

    Marshall, Douglas

    Wakefield, Edward (Derbyshire, W.)

    Gomma-Duncan, Col. Sir Alan

    Mathew, R.

    Wakefield, Sir Wavell (St. M'lebone)

    Gower, H. R.

    Maudling, Rt. Hon. R.

    Walker-Smith, D. C.

    Graham, Sir Fergus

    Mawby, R. L.

    Wall, Major Patrick

    Grant, W. (Woodside)

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

    Ward, Hon. George (Worcester)

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Medlicott, Sir Frank

    Ward, Dame Irene (Tynemouth)

    Green, A.

    Milligan, Rt. Hon. W. R.

    Waterhouse, Capt. Rt. Hon. C.

    Grimston, Hon. John (St. Albans)

    Molson, Rt. Hon. Hugh

    Watkinson, Rt. Hon. Harold

    Grimston, Sir Robert (Westbury)

    Monckton, Rt. Hon. Sir Walter

    Whitelaw, W.S.I. (Penrith & Border)

    Gurden, Harold

    Moore, Sir Thomas

    Williams, Paul (Sunderland, S.)

    Hall, John (Wycombe)

    Mott-Radclyffe, C. E.

    Williams, R. Dudley (Exeter)

    Harris, Frederic (Croydon, N. W.)

    Nabarro, G. D. N.

    Wilson, Geoffrey (Truro)

    Harris, Reader (Heston)

    Nairn, D. L. S.

    Woollam, John Victor

    Harrison, A. B. C. (Maldon)

    Neave, Airey

    Yates, William (The Wrekin)

    Harrison, Col. J. H. (Eye)

    Nicholls, Harman

    Harvey, John (Walthamstow, E.)

    Nicholson, Godfrey (Farnham)

    TELLERS FOR THE NOES:

    Harvie-Watt, Sir George

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Mr. Wills and Mr. Barber.

    Hay, John

    Nield, Basil (Chester)

    Clause 2.—(EXCISE DUTY ON STRENGTHENED CIDER AND PERRY.)
    Mr. Bryant Godman Irvine: I beg to move, in page 2, line 27, to leave out from "April" to the end of line 33.
    The Chairman: It would also be convenient to discuss at the same time the following Amendment in the hon. Member's name: in line 43, at the end, to insert:
    (4) In so far as this section restricts the class of intoxicating liquor to which any retailer's on-licence or retailer's off-licence extends it shall not have effect before the first day of June, nineteen hundred and fifty-seven.
    Mr. Godman Irvine: The Committee will be happy to know that the purpose of the Amendment can be explained in a very few words. Clause 2 deals with Excise Duty on strengthened cider and perry. I was interested to note that the hon. Member for Loughborough (Mr. Cronin) said only a few moments ago that he thought nobody could object to a tax on alcohol. Anyone who heard the debate on this Clause in Committee could hardly have formed that view. The result of Clause 2 is that cider will be divided into two classes—cider below 15 degrees of proof and cider over 15 degrees of proof. Cider which is over 15 degrees of proof is by the Clause deemed to be sweets.
    Two things follow from that. One is that the cider drinkers will have the privilege of paying the Chancellor of the Exchequer for the benefit of drinking these beverages. The second is that they can be sold only in premises where there is an adequate licence. A large quantity of cider is sold in premises which hold a beer-on or a beer-off licence, and it follows that after 18th July those premises will not be able to provide their customers with the beverage which they like. The licensing point is dealt with in Clause 2 (2, b), where it is provided that a licence would not be required before 18th July. When I first read the Clause I was unable to follow why the date 18th July was mentioned. The Financial Secretary explained that it was thought right that people who had a stock of this cider should be allowed to dispose of it before the provisions came into force with full weight.
    What is not provided for is what is to happen between 18th July and the next brewster sessions. As the Committee
    440
    knows, the general annual licensing sessions take place only in the February of each year. Last February it would not be possible for anybody who wanted to sell cider to foresee that he would need a sweets licence between then and the next brewster sessions. The position therefore arises under the Clause that from July until next February he would not have a licence and would be unable to apply for a licence to sell this beverage until next February. The Amendment has been put down to deal with that.
    The result of it is that Clause 2 (2, b) would be deleted, and there would be a new subsection (4) to provide that a licence would not be needed in order to sell this class of liquor between now and the next time the general annual licensing session is held.
    The Financial Secretary said that he had had no representations about this matter from the trade. I have been able to represent the case of only one cider manufacturer—a man in my constituency; and I raised that matter on Second Reading. I am putting it only on that basis today, and I am not representing the trade. The Financial Secretary is probably right in what he says on that subject.
    I am told, however, that this licensing point might be quite a serious matter for this manufacturer—and there may be others. It will not have escaped your notice, Sir Charles, that the financial arrangements under the Clause are quite clear, and it may be a coincidence that the licensing part of the Clause is not quite so clear. I therefore put forward the Amendment, and I hope that the Financial Secretary will be able to give us some assistance on the point.
    Mr. William Teeling: I beg to second the Amendment.
    I must confess that until this Budget I knew very little about cider, but, as often happens when I want to discover the interests of the younger generation, I went to my young Conservatives. With them I made a tour and found out a little of the feeling in Sussex on this point. I discovered that there are two organisations—the Merridown Wine Company and Church Farm Ltd.—which supply this cider which is a little stronger than

    441
    others. The two gentlemen who started the Merridown cider business were prisoners-of-war in Germany where they obtained the recipe, or whatever we like to call it, for this apple production. They brought it back from Germany after the war. Since then they have made a tremendous success of the business and have found that the Americans in this country like their cider very much. The business has been going ahead for quite a time.
    I also found that in my constituency there is a gentleman who is concentrating more or less on selling this form of cider. Like my hon. Friend the Member for Rye (Mr. Godman Irvine), I think there are only one or two people who are dealing with it in their respective areas, but this man was making quite a lot of money out of it. His solicitor has corresponded with me and also with the Treasury, and, roughly speaking, this is what his solicitor has told me.
    About 60 per cent. of Mr. Traynor's sales are in vintage ciders produced and sold by the two companies which I have mentioned. Mr. Traynor has been selling these ciders for over three years and has built up the business based on their sales. Since his stocks of vintage cider were used up two months ago, he has steadily lost business, and goodwill is being lost by failure to supply these ciders to many persons requiring them. If the sale of these ciders continues to be impossible as a result of the Finance Bill, Mr. Traynor will be forced to close the business, because it is impossible to carry on "The Cider Bar" in Brighton on takings of 40 per cent. of the turnover prior to 5th April.
    He had a certain amount of stock left over at that date, but I am afraid that the Treasury were wrong in thinking that it would last until the middle of July. It was consumed in a fortnight after the actual date of the Budget, since when this poor man has been unable to do anything because he cannot get the required licence until the next brewster sessions which will be held next February or March.
    I am sure that it was not in the mind of the Chancellor to do what is a definite harm to this business. Therefore, I feel that it would be a generous gesture on the part of the Treasury to agree to this
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    Amendment and make it possible for this man to carry on at least until the date of the brewster sessions when the justices can decide whether or not he should have a licence.
    5.30 p.m.
    The Financial Secretary to the Treasury (Mr. Henry Brooke): The question here is whether we can avoid an injustice. My hon. Friend the Member for Rye (Mr. Godman Irvine) raised this matter at an earlier stage of our debates after the Budget announcement, and pointed out, quite rightly, that there seemed likely to be a gap between the date when the retailer exhausted his stock of cider or 18th July, three months after the Budget date, and the time of the next brewster sessions when the retailer can make application for the licence which will hence-forward be needed if he wishes to sell strengthened ciders.
    This was discussed again in Committee, and at that time I gave an undertaking that I would consult with my right hon. and gallant Friend the Home Secretary, because the licensing justices might have an interest in this, and one thing upon which we in this House are all agreed is that we should not wish to do anything which might prejudge their decision or render their work more difficult. There is no doubt that unless the Clause is amended, certain retailers and their customers will have a legitimate sense of injustice against Parliament, because, through the operation of the Finance Act, we shall have created this period during which no power is available whereby a man can regain his opportunity to sell this cider legally until he applies to the brewster sessions next spring.
    I have carried out my pledge, I have consulted my right hon. and gallant Friend and also my right hon. Friend the Secretary of State for Scotland. They do not feel that the House would be creating a difficulty regarding the work of the justices were it thought fit to make this change. I must emphasise this very strongly, because were the House to accept these Amendments, it must be perfectly clear that it is solely to avoid, as it were, a chance dislocation of trade by allowing the position to remain unchanged for the sale of strengthened cider until the necessary application for a licence could be made to the licensing justices

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    next year. It would not be intended, and must not be considered, as in any way an attempt to prejudge the consideration by the justices of such applications in the ordinary way. Indeed, if the Clause is thus amended, the justices will be completely free to reach their own decisions on the merits of the case in the future as they are in the case of other applications.
    Having said that, and subject to those safeguards, I recommend the House to accept the Amendments. Otherwise, I think that injustice would be caused to a small number of individuals, and that is something that no hon. Member would desire.
    Amendment agreed to.
    Further Amendment made: In page 2, line 43, at end insert:
    (4) in so far as this section restricts the class of intoxicating liquor to which any retailer's on-licence or retailer's off-licence extends it shall not have effect before the first day of June, nineteen hundred and fifty-seven.—[Mr. Godman Irvine.]

    Clause 6.—(EXEMPTION FROM CUSTOMS DUTIES OF FILMS PRODUCED BY THE UNITED NATIONS.)
    Mr. John Hay: I beg to move, in page 4, line 42, to leave out "or one of its" and insert:
    "the Council of Europe, Western European Union, the Brussels Treaty Organisation or the North Atlantic Treaty Organisation or any of their".
    I think that perhaps the following Amendment might be considered at the same time, as it is consequential, namely, in page 5, line 1, to leave out from the beginning to "agencies", and insert:
    "any of the said bodies or their specialised".
    The purpose of this Clause is to exempt from Customs Duty certain films of a non-commercial character produced by the United Nations or any of its Specialised Agencies. The reasons for its inclusion in the Finance Bill were shortly but succinctly given by my right hon. Friend the Financial Secretary during the Second Reading debate when he said that the Clause was necessary
    "to enable the United Kingdom to implement obligations under the U.N.E.S.C.O. Agreement, which was ratified in 1954, regarding import duty on films produced by the United Nations and its specialised agencies."—[OFFICIAL REPORT, 9th May, 1956; Vol. 552, c. 1233.]
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    We had a short debate on the Clause during the Committee stage, on the Question, "That the Clause stand part of the Bill".
    My right hon. Friend then explained that already the existing powers enable the entry free of Customs Duty of films produced for scientific or research purposes or for the advancement of learning or art. He added that free entry in this sense was not given if the film was to be used for a substantially commercial purpose. He went on to explain that duty has not been charged until now on this sort of film, but the thing has been done by means of one of those "extra-statutory concessions" which are all too rarely given by the Treasury.
    The ambit of the Clause is limited to the United Nations and its Specialised Agencies. The House will observe that the Amendments which we propose would extend its scope to certain other films produced by other international bodies, the Council of Europe, Western European Union, the Brussels Treaty Organisation and N.A.T.O. I should like to say a word about each of these bodies in connection with the production of films of this kind, because it is with films that we are mainly concerned, although the Clause specifically refers to what I think in the jargon is called "public information media", that is to say, film strips, micro-films or cine recordings.
    First, I wish to refer to the Council of Europe. I understand that until now the Council has not produced any film of this character. But the Committee on Cultural and Scientific Questions recently recommended to the Consultative Assembly of the Council that an expanded information programme should be carried out which would include the manufacture and distribution of this sort of film. It was, I think, largely due to the efforts of my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. N. Nicolson), who produced an admirable report on the subject, that the Committee agreed and in April last the Consultative Assembly carried the recommendation unanimously.
    I do not know what has happened to that recommendation since. Having been unanimously adopted, I hope that it will be implemented. But there is a rumour going round that, as usual, Her Majesty's Government have imposed a veto, and

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    that this particular recommendation will fall by the wayside, as so many previous recommendations of the Consultative Assembly have done. I hope that that is not so. In the hope that perhaps it will not be so, and that the Council will be producing films of this kind, the Amendment is drawn to include films produced by that body. If it transpires that the Council can produce films, any concession which can be made in this Clause, as amended, would be useful.
    It is mainly in relation to the second and third of the bodies mentioned in the Amendment that the matter arises. Western European Union is the successor to the old Brussels Treaty Organisation, and the House will recollect the work done in founding Western European Union by my right hon. Friend the Prime Minister in 1954, the flight that he undertook to a number of the capitals of Europe, and his discussions with statesmen, concluding eventually with the Paris Agreements. Western European Union has been built up on the Brussels Treaty Organisation. One of its essential functions is the exploration of cultural and social matters as they affect the seven countries which are members, and the production of films forms a most important part of that work. So far, the Brussels Treaty Organisation and Western European Union have produced three different categories of non-commercial films, and I should like to say a word about each of them.
    First there are a number of joint productions by international teams. One particular example is a film called "The Open Window", a colour film on landscape painting, produced in 1953 by the Brussels Treaty Organisation—by five countries in collaboration. I have some figures relating to the distribution of that film inside Great Britain. Up to March this year, it has had 338 commercial bookings in ordinary cinemas, 191 non-commercial showings, mainly through the Central Office of Information—and it is estimated that some 7,000 people have seen those showings—and finally it has had a world-wide distribution through the British Council. Lord Beaverbrook, please note.
    This year Western European Union is producing a film in this category called "December—the Children's Month". It is about Christmas festivities in the seven
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    countries and it is a film for children. That is the sort of film that everybody likes to see, particularly at Christmas time.
    The second category relates to films in a series made by a number of the various member countries. In 1956 five countries got together to produce a series of educational films on geography, and in the coming year, 1957, the seven countries are getting together to produce a series of educational films on the history of science. These will be of great value.
    The final category consists of exchanges of films of a cultural, informative, documentary, educational or children's character. So far, I am told, the United Kingdom has had through Western European Union some 30 films from five countries. Many hon. Members may remember seeing about a year ago, or perhaps more recently, a film called "Men against the Sea", produced by the Netherlands Government, and telling the story of the tragic events which beset the Dutch when the North Sea floods took place some years ago, and of the work which has been done since to prevent a repetition of that incident. That is the sort of film that has been distributed widely in this country, mainly through the organisation of Western European Union.
    I think I have already said enough to show that in this field some very useful work is being done by at least one of these often much-derided international bodies. People often say that we are members of these bodies like W.E.U. and the Council of Europe, but nothing happens. Well, this is something that is being done, and I hope that this Amendment will help to improve the opportunities for that work to be carried out.
    The Amendment also deals with N.A.T.O. I have not a great deal of information about the production of films of this sort by N.A.T.O., but I am told that there have been quite a number, including a series of 14 films, each one of which has been produced by one of the N.A.T.O. countries under the general title of "The Atlantic Community". I think that is the sort of thing, very similar indeed to the United Nations series of films, with which the Clause already deals.
    It could well be that all these films about which I have been talking already

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    come under the Treasury's extra-statutory concession, but I think the House would agree that, all other things being equal, it would be better if the importation and freedom from Customs Duty of such films were dealt with by legislation, as is to be done in respect of U.N. films, rather than that the matter should be left to be dealt with by such a concession. I think that, if for no other reason, it would be an earnest of our intentions as a nation to co-operate with our friends abroad and to enable our people to know something more of the life of countries overseas than is shown in the sometimes rather highly coloured and distorted versions which the commercial cinemas put before us.
    I hope that my right hon. Friend will be able to say, if not that he can at once agree to the Amendment, that the matter will be given very careful consideration.
    5.45 p.m.
    Mr. Peter Kirk: I beg to second the Amendment.
    My hon. Friend the Member for Henley (Mr. Hay) has spoken so persuasively, that I do not think there is any need for me to say much in support. I should, however, like to refer to one matter in connection with my hon. Friend's last point. There is a suspicion—whether it is well founded or not is not for me to say, in view of my short experience in the Council of Europe—that the British Government are somewhat half-hearted about the support they give to these international bodies, that they are always turning everything down, and that whenever any suggestion is put forward the Foreign Office can be relied upon to veto it.
    That is the general attitude. It may or may not be true—it is not for me to judge—but if we were to make this concession, which is a small one, it would go quite a long way to kill that idea which is so prevalent in Europe at the moment. I believe that a real service could be done to our propaganda abroad, as well as to the good propaganda of other countries in this country, by making a concession of this kind. It would help the free exchange of ideas, which I am sure every hon. Member would wish to see between this country and other European countries. In those circumstances, it is with
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    great pleasure that I second the Amendment.
    Mrs. Eirene White: I am sure that we all have the greatest sympathy with the intentions behind the Amendment, and I am certain that we would all wish that the type of film which the hon. Member for Henley (Mr. Hay) has described should not in any way be impeded in coming into this country and should not be the subject of Customs Duty. But I am afraid that the method chosen seems to us on this side of the House to be ill-advised.
    If these films are worth bringing into the country, because they are children's films or educational films and so on, surely arrangements should be made to bring them in on their merits rather than according to the body which has produced them. There is something to be said for doing what we have already done, namely, for giving a blanket approval to the United Nations Organisation and its subsidiaries, but I am sure that the hon. Member will see that what he is trying to do leads along a path to which one can see no end.
    I have here a list of organisations. The Council of Europe would be unexceptionable, but there may be people who have views about the North Atlantic Treaty Organisation. Why should films sponsored by countries which happen to be in a defensive organisation of that sort have special concessions—and, if the North Atlantic Treaty Organisation, why not the South-East Asia Treaty Organisation? Why not the members of the Bagdad Pact?
    One could go on mentioning various international treaty organisations of which this country is or might in the future be a member, and if by any chance they added film making to their activities there would be no logical reason why they should not equally be included. One might then go on to say: "If we are to have this kind of organisation covered by legislation, why stop here? Why not the great international voluntary organisations? Why not the Girl Guides or the International Council of Women?"
    It is for that reason that my hon. Friends and I feel some hesitation about this proposal. We do not want to make too much fuss about it, but, in expressing our views, it is not from any lack of

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    sympathy with the intentions of the hon. Gentleman that we disagree with him; we really feel that this proposed method of dealing with this type of film is not satisfactory. We therefore suggest that the hon. Members who are interested, and the Government, might think again, and try to discover a more sensible way of allowing these films, which we all want to see in this country, to come in without the imposition of Customs Duty.
    Sir James Hutchison: I am disappointed that the hon. Lady the Member for Flint, East (Mrs. White) has taken the view she has. I had hoped that I should find a good deal of support among hon. Members opposite who have been to Strasbourg and other towns in which these meetings have been held. After all, the hon. Lady is really arguing that, because we suggest extending this privilege to four bodies mentioned in the Amendment, we must extend it further. But we are asking only for the extension of something which already exists in regard to the United Nations. Therefore, to be logical, the hon. Lady should try to scrub out and destroy the facilities accorded to the United Nations. I had hoped also that I should receive some support from my right hon. Friend the Chancellor, who has played so important a part on a number of occasions at Strasbourg, where he is held in great esteem.
    It is one of the problems of today for ordinary members of the electorate to know what all these bodies are whose initials appear here and there in the newspapers. If we are, in fact, to continue to support organisations such as the Council of Europe and Western European Union, it is highly desirable that the public should know what those bodies are trying to do. In our constituencies, we labour to explain these rather complicated organisations and their rather flexible functions and duties. Here is an opportunity for making such bodies as Western European Union known. Those who know anything about Western European Union already probably identify it almost entirely with matters of defence, whereas in fact it has under its umbrella of activity cultural, educational and social problems and responsibilities. It is only with that aspect that we are concerned in this Amendment.
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    I should be glad if my right hon. Friend would give us some sort of assurance with regard to the ingress of these films, whatever their merits may be. I am not at the moment really arguing the merits of the films; I think they are self-evident from the titles which my hon. Friend the Member for Henley (Mr. Hay) read out and from the titles which can be seen by those who are interested. I am arguing that it is for the benefit of the public that everyone should know that Western European Union and the Council of Europe are concerned in a sort of cultural and social drive among all the countries of Western Europe. That purpose, which I am sure 99 per cent. of the population would in fact support, is behind my hon. Friend's idea, in part at any rate, in asking that this Amendment be accepted by my right hon. Friend.
    Sir E. Boyle: We have heard a very agreeable and interesting speech from my hon. Friend the Member for Henley (Mr. Hay) who moved the Amendment, and we have had a speech from the hon. Lady the Member for Flint, East (Mrs. White) which, I must say, might almost be taken as a model speech from the Treasury Bench during a Finance Bill debate.
    I will say this to my hon. Friends. The purpose of the Clause, as the House knows, is to serve the very limited objective of enabling the United Kingdom to fulfil her agreements under Article I, Annex C, subsection (iv), of the U.N.E.S.C.O. Agreement of 20th November, 1950. That Agreement provides for the removal of import duties and other restrictions from a limited range of educational, scientific and cultural materials. The purpose of the Clause is the specific one of giving effect to that Agreement.
    If we find ourselves in the position of entering into a similar agreement with a similar kind of organisation, then it may well be that we shall want to introduce another Clause of this type; but I must say that I think there are real disadvantages in adding to this Clause a number of organisations of which the United Kingdom is simply a member, for the reason that the hon. Lady mentioned. It is very difficult to see quite where one could stop in doing that.

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    Therefore, I suggest to my hon. Friends that the Amendment which my hon. Friend the Member for Henley has moved does in a sense mistake the very strictly limited objective of the Clause. There is, of course, no doubt at all that the work of these organisations is of great value. I am myself an old alumnus of the Council of Europe, and I quite agree with all that my hon. Friends have said on that subject. But I hope they will agree to withdraw the Amendment, on the understanding that there is no dispute at all between us about the importance of these organisations or the cultural work they do, or about the value of these films; it is simply that we have quite deliberately limited the Clause to implement a specific Agreement.
    Mr. Hay: I have listened very carefully to what my hon. Friend has said. I must admit that I did not exactly expect him to come forward and welcome the Amendment with open arms, because I anticipated that he would take very much the same point as that taken by the hon. Lady the Member for Flint, East (Mrs. White) in her speech. But, with respect to my hon. Friend, I hope that this matter will not be completely lost sight of. It is all very well to say that the purpose behind the Amendment is a good one, that we do not want to stop this sort of film coming into the country, and we all believe in these international bodies. In my opinion, that is not good enough.
    Mr. Deputy-Speaker: The hon. Member is making a second speech, is he not?
    Mr. Hay: With respect, I thought I was entitled to reply. If not, I ask the leave of the House to speak a second time.
    I do not want to take up the time of the House, in view of what you have indicated to me, Sir Charles. My final word is that I hope this matter will not be overlooked. I hope it will be explored further between now and next year. It would be a pity if any impediment in the form of taxation were directed against this very desirable sort of film.
    The hon. Member for Flint, East said in Committee, dealing with this very Clause:
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    "We all wish that there should be no penal taxation upon the products of the United Nations or any of its Specialised Agencies."—[OFFICAL REPORT, 5th June, 1956; Vol. 553, c. 1008]
    We all say, "Hear, hear" to that; but I would add these other bodies which do equally important work and which I believe deserve the same sort of treatment.
    Having said that, I beg to ask leave to withdraw the Amendment.
    Mr. Gordon Walker: I am sorry that the Chancellor did not deal with this point, because this matter of European Union is one in which he is a specialist. He did not hesitate in earlier days, when he thought it might embarrass the then Government, to make all sorts of extraordinary speeches, and I think this idea is really more in line with what he then used to say. We should have preferred that, if this proposal is to be turned down in this way, it should be turned down by the right hon. Gentleman, who used to make so much propaganda on this sort of subject.
    I agree with my hon. Friend the Member for Flint, East (Mrs. White) that, in this form, the Amendment would not really be acceptable because it is limited; it really ought to go farther, or not start at all. I hope that it will not be difficult to draw up a proper schedule of organisations of one sort or another which should have the benefit of this proposal, no doubt including these. I hope it will be done in due course, and that then the Chancellor will be able to give us his present views on these matters.
    Amendment, by leave, withdrawn.

    Clause 7.—(CHARGE OF PURCHASE TAX ON CONVERSION OF GOODS VEHICLE TO PASSENGER VEHICLE OR THE LIKE.)
    Mr. H. Brooke: I beg to move, in page 5, line 13, after "vehicle", to insert:
    "to which this section does not apply into one'.
    Perhaps it would be for the convenience of the House if we were to consider, along with this Amendment, the next 11 Amendments on the Notice Paper to Clause 7.
    These 12 Amendments deal with a matter which was discussed in Committee rather late at night on the Question, "That the Clause stand part of the Bill." They are concerned with the liability to Purchase Tax of what are known as

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    "specials", cars made by amateur enthusiasts. When I was replying to that debate, I said that we would consider, between then and the Report stage, everything which had been said.
    I had at that time to express the view that it would be right to draw the tax line between, on the one hand, the car made out of an old car which had been bought by an amateur enthusiast and stripped down and rebuilt, which, as I said, if Purchase Tax had already been paid upon it, would not be the subject of any further Purchase Tax, and, on the other hand, the car which was not constructed out of an old car but assembled either out of a kit which had been bought or from a complete collection of parts made or picked up by the man who was doing the job, and, no doubt, greatly enjoying it.
    6.0 p.m.
    We have fulfilled our promise of giving further consideration to this matter and we have come to the conclusion that that is not the right place to draw the line. Nor, after further examination, do we believe that it would be workable, because in the last resort it might be quite impossible to determine whether, in the case of a particular car, it had originated in an old car, or the pieces of the old car might have disappeared in the process.
    There is one danger of which I must tell the House. If the proposal in these Amendments to exempt the "specials" from tax were to be exploited commercially, we would have to look at the position again. I am not suggesting that the kind of people engaged in these activities are the kind of people who would want to get an unfair tax advantage, but hon. Members know from their experience of the tax law that sometimes an exemption which has been granted in all good faith may be exploited by a different class of person. If the freedom which the Amendments will now leave to amateur engineers to make cars tax free were at any time to be exploited on a commercial scale, the Government of the day might well have to take steps to check such activities.
    Having said that, however, I offer this set of Amendments to the House for what they are worth, and I personally think that they are worth a good deal. They will entirely free from charge to Purchase Tax the amateur who builds a car by
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    assembling or completing the assembly of the parts, or who constructs or completes the construction of the body. It certainly was the sense of the Committee that hon. Members would be pleased if the Government could do this; and from the letters which I have subsequently received from hon. Members, on both sides, I have a sneaking feeling that for once the Financial Secretary may be popular in proposing these Amendments.
    Mr. Cyril Bence: While it is a great gratification to myself and to a young man who lives but two doors from me that these Amendments have been put down, there has been some agitation not far from me over the last three months. About three and a half years ago, this young man became an apprentice in Albion Motors. His father has an empty garage attached to his house and the young man started going around to scrap yards and picking up spare parts and bits of old iron. With advice here and there, he started to build a motor car and three months ago he finished it. It is not at all a bad job. Those who have indulged in the game of making amateur cars know that we call them jalopies.
    The position under the Clause originally was that this young man would have to go to the Inland Revenue to get the car taxed for the purposes of assessing Purchase Tax. Some of the parts he had bought. He spent £150 to £200 over the last three and a half years in buying odd things. He bought a Ford 10 engine for a few pounds and got it rebored and relined. Then he got some scrap metal and it was cut into the shape of wings, beaten out and planished. Then he did some welding and completed the wings. The wheels were picked up in scrap yards, but some of the parts were bought new, such as the distributor and carburettor, on which Purchase Tax was paid.
    The problem was, how was the vehicle to be assessed for tax? How could the Inland Revenue assess the Purchase Tax to be charged on it? We did our best to calculate it and we estimated that if the car was put on the road and the man applied for a log book, he would have to pay £150 to £180 Purchase Tax. The young man built the car over three and a half years by spending his pocket money each week. At this rate, he would need

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    to have saved his pocket money for another four years to pay the Purchase Tax before he could put it on the road. Then he would have been 25 years of age and thinking of getting married, and that would have been the end of the jalopy.
    Amateur work of this nature is not uncommon. Lads all over the country indulge in this sort of thing, just as we did after the First World War. I remember that many of my contemporaries were putting up wireless masts. We were told off by our parents because the dining room or drawing room was full of wires and bits of metal. We were making radio sets of all shapes and sizes, starting with the "cat's whisker" set and finishing with the seven-valve set. Frightful contraptions were to be seen in the kitchen or dining room. Young fellows will do this sort of thing.
    When the Bill was introduced, it struck me that the Clause was a shocking thing to impose on young engineers who indulge in this kind of thing at home. Although one may not regard these cars as commercial propositions, there is no better training to make a creative engineer than this indulgence in amateur engineering at home.
    The young fellow who is only 20 years of age, and who lives a couple of doors from my home, shows, in the building of his car, great creative capacity. Had the Purchase Tax remained on that kind of engineering product from the back yard of a young apprentice, it would have put a damper on thousands of young boys who are apprentices in engineering shops, who have the capacity, the energy and the creative imagination to evolve and develop engineering processes.
    I have been in the engineering industry since 1917. Many may not realise that some of our finest engineering techniques in the factories today have come not from the higher research establishments, but from the simple, natural intelligence of an apprentice in a factory, operating a machine, who has seen an easier way to operate it than the manufacturer thought when he designed it. This kind of work by engineers in their back yards and in their homes plays a great part in the evolution of manufacturing techniques and engineering design.
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    I express my gratitude for the Amendments as an engineer and as one who indulged in making things from the age of 16 until I was married. One's wife will not stand what one's mother has put up with, so I had to stop the work. We did all these engineering jobs at home, making bicycles and motor cycles. I made two of them and they went very well until I nearly broke my neck on one of them.
    When I first saw the Clause, and looked back to my youth and to my contemporaries among the apprentice engineers, I considered it one of the worst things that the Government had done to stifle the enterprise and ingenuity of our young generation of engineers. I am grateful that the Chancellor has seen fit to listen to the pleas which were made in Committee, and by correspondence, to abolish the Purchase Tax in this way and I thank him on behalf of my constituents.
    Sir Ian Clark Hutchison: When this matter was discussed in Committee on 5th June I was one of those on this side of the House who pointed out the unfortunate effects of the Clause. I agree very strongly with the hon. Member for Dunbartonshire, East (Mr. Bence) that it would have had the effect of prejudicing and discouraging young engineers and others who do very useful work in their spare time. I should like to thank the Financial Secretary and the Government for meeting us and for removing an obnoxious provision from the Finance Bill.
    Mr. Frederick Mulley: I have so often criticised the Financial Secretary that it is pleasant to be able for once to congratulate him on these sensible Amendments to this very dull Bill.
    I am sure that the House will appreciate that, had the Clause gone through in its original terms, it would not only have deprived an important section of our young engineers of some enjoyment and pleasure, but would also perhaps have retarded the development of design which, it is claimed, comes from people who have made cars themselves in this way. I believe that it would also have had serious consequences for the people who make small racing cars, and that it would have had a detrimental effect on the motor racing

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    sport, which, in turn, might have affected our export sales, because, oddly enough, I believe that it is our racing and sports car manufacturers who are still able to hold their own in the American market.
    I am sure that, by meeting the wishes of amateur enthusiasts and people who make cars from parts, the Government have done a very sensible thing. I am sure that the House will also agree with the warning that has been given. If this concession is abused in a commercial sense, and if people attempt to exploit the real purpose for which it is given, the warning has already been given, and I hope it will not be necessary for the Government to introduce further legislation on this point. I am sure that the Government have done a very sensible thing in proposing this series of Amendments, and I welcome them.
    Mr. Douglas Jay: I should like to thank and compliment the Financial Secretary to the Treasury for making this concession, for several reasons. First, because he seems to have adopted the suggestion made by myself during the Committee stage, though, I admit, rather on the spur of the moment; secondly, because this seems to be almost the only occasion on this Bill when the Government have felt able to accept a proposal which did not come from my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton). The third reason is that the Financial Secretary told us during the Committee stage that this was really quite an impossible thing to do. He said:
    "I must advise the Committee that my right hon. Friend does not see any way in which this Clause could be amended so as to meet the case of a man who builds a perfectly good car for himself out of bits he has picked up or a kit he has bought. As a House of Commons, we must seek to avoid giving to the Customs and Excise officials a task which cannot reasonably be performed."—[OFFICIAL REPORT, 5th June, 1956; Vol. 553, c. 1039.]
    With a little help and advice from all over the House, the Financial Secretary now finds himself able to do these things, and I think it is a tribute to the value of the work which we do, both as a Committee and as a House, and for all these reasons I wish to compliment the Financial Secretary.
    Amendment agreed to.
    Further Amendments made: In line 16, leave out "makes it" and insert "does so".
    In line 18, leave out subsection (2).
    In line 46, leave out "who makes" and insert:
    "making another vehicle into".
    In page 6, line 2, after "made", insert "another vehicle into".
    In line 9, after "makes", insert "another vehicle into".
    In line 11, leave out "makes it" and insert "does so".
    In line 18, after "of", insert "another vehicle into".
    In line 20, after "makes", insert "another vehicle into".
    In page 7, line 3, leave out from beginning to end of line 10.
    In line 37, after "making", insert "another vehicle into".
    In line 44, after second "of" insert "another vehicle into".—[Mr. H. Brooke.]

    Clause 10.—(OFFICES AND EMPLOYMENTS.)
    Mr. H. Brooke: I beg to move, in page 9, line 24, after "resident", to insert "or domiciled".
    This Amendment is consequential on an Amendment which we made on the Recommittal stage of the Bill yesterday.
    Amendment agreed to.

    Clause 14.—(SUSPENSION OF INVESTMENT ALLOWANCES (WITH CERTAIN EXCEPTIONS).)
    Sir E. Boyle: I beg to move, in page 13, line 25, after "descriptions", to insert:
    "and of other plant so included the use of which may or may not be related to fuel economy".
    This Amendment concerns a rather technical point about investment allowances. As subsection (4) is drafted, it enables the order prescribing plant to impose, in the case of ancillary plant, the conditions upon which the plant is to rank for the investment allowance. The reason for this provision was that certain of the ancillary items are not of their nature fuel saving, but they do contribute to fuel economy if they are fitted as a necessary part of the main fuel-saving installation. It was necessary to take power to provide that such ancillary items

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    of this kind could be prescribed subject to conditions, the conditions being that they are installed as a necessary part of one of the main fuel-saving devices.
    It now seems that there ought to be power to lay down conditions at any rate in regard to one of the main fuel-saving devices recommended for prescription. This item is feedwater treatment plant. It is essential to be able to impose in the case of this plant the condition that it must form part of a steam boiler installation, because the same kind of plant could be used, for example, for the treatment of cold water required for a manufacturing process, and if so used the plant would not contribute in any way to fuel economy. The same difficulty may arise with other items of plant, and, if so, they would have to be prescribed in later orders.
    I hope that, with that explanation, the House will accept the Amendment.
    Amendment agreed to.
    6.15 p.m.
    Sir E. Boyle: I beg to move, in page 13, line 36, at the end to insert:
    (6) Notwithstanding subsection (1) of this section, investment allowances shall also continue to be made by virtue of subsection (5) of section sixteen of the Finance Act, 1954 (which relates to expenditure incurred for the purposes of husbandry or forestry), in respect of expenditure incurred after the said seventeenth day of February in adding to any building or structure which is or has been already in use, and in which artificial heating is regularly used for the purposes of husbandry or forestry, any insulation against loss of heat.
    During the Committee stage of the Bill, hon. Members will remember that Amendments were moved by hon. Members opposite with the object of enabling the insulation of existing agricultural buildings to continue to qualify for the investment allowance. I gave the House an undertaking that I would look into this question. We understand that, although there is not a great deal of scope for saving fuel in significant quantities by the insulation of agricultural buildings, some savings can be and are being secured by the insulation of heated glasshouses, horticultural packing sheds and poultry houses. It is to give effect to that undertaking which I gave in Committee that I submit this Amendment.
    Amendment agreed to.

    Clause 15.—(CAPITAL ALLOWANCES FOR INDUSTRIAL BUILDINGS (EXPENDITURE ON CUTTING, TUNNELLING, ETC.).)
    Sir E. Boyle: I beg to move, in page 14, line 34, after "April", to insert "or to a later day".
    This Amendment is consequential on the Amendment which extends the mills and factories allowance for another three years.
    Amendment agreed to.
    Sir E. Boyle: I beg to move, in page 14, line 37, at the end to insert:
    (3) Where capital expenditure is or has been incurred on preparing, cutting, tunnelling or levelling land for the purposes of preparing the land as a site for the installation of machinery or plant, and apart from this sub-section no allowance could be made in respect of that expenditure under Chapter I or II of Part X of the Income Tax Act, 1952, then in relation to allowances and charges for the year 1956–57 and subsequent years of assessment, as regards that expenditure—

    (a) the machinery or plant shall be treated for the purposes of the said Chapter I as a building or structure (whether or not it would be so treated apart from this subsection); and

    (b) subsection (1) of section two hundred and seventy-six (which provides, among other things, that allowances shall not be made under the said Chapter I in respect of expenditure on a building or structure if allowances can be made under Chapter II in respect of the same or other expenditure on it) shall apply with the omission of the reference to Chapter II:

    Provided that as regards expenditure to which the said Chapter I is applied by this subsection, the appointed day, for the purposes of any reference thereto in the said Chapter I except in section two hundred and sixty-five (which relates to initial allowances), shall be the sixth day of April, nineteen hundred and fifty-six.
    This is a slightly more substantial point. The purpose of this Amendment is to deal with a type of case, not covered by Clause 15, in which my right hon. Friend thinks that capital allowances might none the less very reasonably be given. This is the case where expenditure is incurred in preparing the site for an industrial installation which might not be regarded as a building or structure within the meaning of Clause 15 (1). Examples are to be found in certain plant and machinery forming part of an oil refinery.
    The proposed Amendment provides that where capital expenditure is incurred on the preparation of a site for the installation of plant and machinery and the

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    expenditure would not otherwise rank for capital allowances, then, for the purpose of capital allowances for 1956–57 and future years, the plant or machinery is to be treated, as regards that expenditure, as a building or structure.
    Amendment agreed to.

    Clause 18.—(POWER TO OBTAIN INFORMATION AS TO FEES, COMMISSIONS, ETC.)
    Mr. H. Brooke: I beg to move, in page 19, line 27, at the end to insert:
    (3) A return required under either of the foregoing subsections shall, if the trade or business or other activity is carried on by an unincorporated body of persons, be made and delivered by the person who is or performs the duties of secretary of the body, and the notice shall be framed accordingly.
    This Amendment is designed to remedy a weakness in the Revenue's powers to obtain from unincorporated bodies of persons returns of payments made in respect of services rendered or in respect of copyright. The kinds of bodies most likely to be affected by the Amendment are musical societies, clubs, and the like. I am advised that in the case of such bodies it would not be sufficient to serve a notice requiring a return on the body as such, but a notice would have to be served on each of the members individually. In the same way, if the return were not rendered, it would not be possible to recover a penalty except by instituting proceedings against each of the members individually.
    That would be an impossible procedure, and the purpose of the Amendment accordingly is to provide that in the case of unincorporated bodies, the secretary or the person performing the duties of secretary, and not the body as such, shall be liable to make the return.
    Amendment agreed to.
    Mr. H. Brooke: I beg to move, in page 19, line 43, at the end to insert:
    "or

    (c) particulars of any payment made in a year of assessment ending more than three years before the service of the notice requiring him to make the return."

    This Amendment is to fulfil a pledge which was given in Committee in answer to an Amendment which was moved by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens). The purpose of the Amendment is to provide that the power to call for the returns of payments made shall not
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    extend to payments made in any Income Tax year ending more than three years before the service of the notice requiring the returns. When my right hon. and learned Friend moved the Amendment in Committee the Government accepted it in principle, but had to point out that it was not quite technically satisfactory because there was not the power to go back to the beginning of a suitable Income Tax year.
    We do not think that there will be any danger to the Revenue in this change. We have examined what was said about it. Certain criticisms were expressed in Committee. Nevertheless, we think that this is a wise and sensible course to take, and it will be in line with that which was laid down by Section 27 of the Finance Act, 1951.
    Amendment agreed to.

    Clause 20.—(RETIREMENT ANNUITIES (RELIEF FOR PREMIUMS, AND EARNED INCOME RELIEF.))
    Mr. H. Brooke: I beg to move, in page 24, line 13, at the end insert:
    (10) Nothing in sections four and six of the Policies of Assurance Act, 1867 (which put on assurance companies certain obligations in relation to notices of assignment of policies of life assurance), shall be taken to apply to any contract approved under this section.
    This Amendment is simply to keep the Statute Book clean. If it were not made there would be an inconsistency between this Finance Bill and the Policies of Assurance Act, 1867.
    Amendment agreed to.

    Clause 21.—(NATURE AND AMOUNT OF RELIEF FOR QUALIFYING PREMIUMS.)
    Mr. Gordon Walker: I beg to move, in page 24, line 21, at the end to insert:
    "five hundred pounds or, in the case of an individual who has attained the age of fifty before or during that year".
    I think that this Amendment could be considered with that which we propose in page 24, line 26.
    The two Amendments go with the Schedule we discussed yesterday, when we reserved our position in Committee about some Amendments. The Amendment is to deal with the question of late entrants into the Millard Tucker Clauses of the Bill, a matter which was raised, and very ably raised, by the right hon. and learned

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    Gentleman the Member for Kensington, South (Sir P. Spens). I hope that we may, perhaps, have his support for the Amendment because, on the whole, we think that this proposal deals better with the question of late entrants than the Government's proposals do, and in one respect is more generous, as I shall point out, than the Government's proposals. It is certainly more restrictive in one respect, but it is more generous in another.
    It is more restrictive because the effect of the Amendment would be to retain the £500 upper limit as the general limit. On that, as I have explained several times during our consideration of the Bill, we feel very strongly, and we continue to feel very strongly about it. It would also be more restrictive than the Government's proposals in that it would limit the rate of the higher benefits to those over the age of 50, whereas that would not apply under the Government's proposals.
    However, I would draw to the attention of the right hon. and learned Gentleman the Member for Kensington, South that this is in one respect more generous than the Government's proposals, because it would deal with all late entrants for ever. Anyone who reaches the age of 50 any time from now on, if our Amendment were accepted, could qualify for certain benefits because of his age; whereas the Government's proposals are for those only who are now of a certain age. The people who will benefit from the Chancellor's proposals will diminish until, finally, they disappear when the last of them dies.
    Under our proposals anybody who, for one reason or another, had not been able to come into the scheme before the age of 50 would at that age be able to do so if he chose, and we think that that is right. There will be people who, for quite proper reasons, cannot come into the scheme, cannot buy these annuities, until the age of 50, and who will thus certainly suffer very much if our Amendment is not accepted.
    We are in agreement with the main principle, and against this one question of the limit only, and we think that it would be better to let everybody come in, even if they came in over the age of 50. The effect of our Amendment would be to make a distinction hereafter between people under 50 and over 50. The benefit of the larger percentages of their incomes
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    that they can spend on buying annuities, which is provided for in the Schedule we passed yesterday, would, under our Amendment, be limited to people over 50, but they would go on getting it. A person who became 50 could get that benefit.
    It would not be a tapering benefit. It would be a permanent benefit. Some of those who entered the scheme would get a proportionately smaller benefit under our Amendment, two-thirds of the benefit the Chancellor is proposing in the Schedule to give to late entrants, but we think that our Amendment is just and right.
    I hope it will be supported on the other side of the House as well as on ours because it is a genuine attempt to meet fairly the problem of late entry, and, although it does make the general level £500, it would lift that level for late entrants. It would lift that level for any late entrant at any time in the future. It shows how eager we are to make the scheme fair and effective. Despite out great distaste for the raising of the limit in general, we see the case for the late entrant, and for providing for him for the future and not merely once for all, as the Chancellor has proposed.
    Sir Patrick Spens: I appreciate that this indicates a rather different attitude of mind from that which we saw on this subject earlier, but, of course, the Amendment does not cover the class I had in mind when I pressed the original Amendment, that is to say, the young professional men who were caught by the war. They are now between 35 and 45 and they are the people whom I personally, at any rate, and, I think, many of my hon. Friends, particularly want to help as late entrants. Therefore, though the Amendment does give certain advantages, I do not think that it satisfies the object which we have in mind.
    I still think that the upper limit of £750 was the all-important concession which we succeeded in getting out of my right hon. Friend, and for it we are most grateful. I am not going to repeat the speech I made last night on the subject, but I think the whole attitude of the Opposition towards this matter has been taken on the assumption that people earn either steady incomes or incomes which steadily increase, whereas the incomes of the professional people whom I have in mind go up and down in no

    465
    calculable fashion very often, and through no fault of the professional men themselves. From personal experience in the old days I know that that was so, and I am quite certain that those people experience the same thing now.
    For instance, because of the crisis of 1929 to 1931, professional men, men who were earning substantial incomes a year or two before, found themselves, to all intents and purposes, out of work. It is in those circumstances that I think the £750 limit is so useful at the end of a career. Therefore, although a bait has been dangled before us very cleverly by the Opposition, I hope that my right hon. Friend will not accept the Amendments
    6.30 p.m.
    Mr. H. Macmillan: I recognise very much the spirit in which the right hon. Member for Smethwick (Mr. Gordon Walker) has put the Amendments on the Notice Paper and the words he has used in moving the Amendment. I am sure that it will be of general benefit to us all, both now and in the future, if this new and comprehensive scheme carries with it the maximum possible sympathy from all sides of the House and from both parties. Though we have had discussions and debates on what precisely the limit should be, I hope that the mere fact that the House has now decided to make it rather higher than was first suggested by the Government will not in itself, as things settle down, be regarded as a serious breach of that spirit of co-operation which has marked discussions of this part of the Finance Bill.
    I recognise that the main purpose of the Amendment is to try to undo what the House has done in raising the £500 limit to £750 and yet deal with the problem of those who are over 50. It is quite true that this problem of the men over 50 was brought very much to our notice by a large number of hon. Members on both sides of the House and by outside organisations. I had that impression and I tried to meet it in the way in which we have met it, but this case of the man over 50 was not the only type of case that we decided to meet by increasing the limit.
    466
    My right hon. Friend the Financial Secretary specifically mentioned the man whose income fluctuated. That was another type of case with which we had to try to deal. There is no logical reason why a handicap suffered by men under 50 in respect of such fluctuation should be left and it should be removed from men who are over 50. There are those whose maximum earnings are achieved before 50 and then decline. There are professions—happily, politics is not one of them—in which men reach a very high earning point at an earlier age and then sometimes lose their earning power. That might be true sometimes of actors, even of musicians, and certainly of singers, and of other people. Therefore, these were the type of cases which we had in mind, which would not be covered if I accepted the Amendments.
    The right hon. Member for Smethwick said, very fairly, that his system would go on whereas our plans for late entrants are to deal with a specific problem, but I think that that is the way to deal with it. The reason why I think it right to deal with late entrants is that we are introducing a new scheme. Hon. Members know that when a pension scheme is introduced in a business there is the problem that the day it is introduced there are a tremendous number of people who cannot take advantage of it because they are too old. Therefore, arrangements have to be made to deal with them, but thereafter people are expected to go into the general plan.
    I do not believe that it is wrong, therefore, to make a special arrangement to deal with the older people when one starts a new idea and then to say that that arrangement must come to an end and as the plan becomes part of the working system people must take advantage of it in the ordinary way. I recognise the spirit in which the Amendments are put forward, but I hope that the House will feel that we ought to stick to the plan which has been decided upon and not introduce complications into it.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 195, Noes 236.

    Division No. 262.]

    AYES

    [6.35 p.m.

    Ainsley, J. W.

    Greenwood, Anthony

    Paling, Will T. (Dewsbury)

    Albu, A. H.

    Grenfell, Rt. Hon. D. R.

    Pannell, Charles (Leeds, W.)

    Allaun, Frank (Salford, E.)

    Grey, C. F.

    Parker, J.

    Allen, Arthur (Bosworth)

    Hale, Leslie

    Parkin, B. T.

    Allen, Scholefield (Crewe)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Pearson, A.

    Anderson, Frank

    Hamilton, W. W.

    Plummer, Sir Leslie

    Awbery, S. S.

    Hannan, W.

    Popplewell, E.

    Bacon, Miss Alice

    Harrison, J. (Nottingham, N.)

    Price, J. T. (Westhoughton)

    Bellenger, Rt. Hon. F. J.

    Hastings, S.

    Price, Philips (Gloucestershire, W.)

    Bence, C. R. (Dunbartonshire, E.)

    Hayman, F. H.

    Probert, A. R.

    Benson, G.

    Healey, Denis

    Proctor, W. T.

    Beswick, F.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Pryde, D. J.

    Blackburn, F.

    Herbison, Miss M.

    Randall, H. E.

    Blenkinsop, A.

    Hobson, C. R.

    Rankin, John

    Boardman, H.

    Holman, P.

    Redhead, E. C.

    Bottomley, Rt. Hon. A. G.

    Holmes, Horace

    Reeves, J.

    Bowden, H. W. (Leicester, S.W.)

    Howell, Charles (Perry Barr)

    Reid, William

    Bowles, F. G.

    Howell, Denis (All Saints)

    Roberts, Albert (Normanton)

    Boyd, T. C.

    Hoy, J. H.

    Roberts, Goronwy (Caernarvon)

    Braddock, Mrs. Elizabeth

    Hubbard, T. F.

    Robinson, Kenneth (St. Pancras, N.)

    Brockway, A. F.

    Hughes, Emrys (S. Ayrshire)

    Rogers, George (Kensington, N.)

    Broughton, Dr. A. D. D

    Hughes, Hector (Aberdeen, N.)

    Royle, C.

    Brown, Rt. Hon. George (Belper)

    Hunter, A. E.

    Shinwell, Rt. Hon. E.

    Brown, Thomas (Ince)

    Hynd, H. (Accrington)

    Silverman, Julius (Aston)

    Burke, W. A.

    Hynd, J. B. (Attercliffe)

    Silverman, Sydney (Nelson)

    Burton, Miss F. E.

    Irving, S. (Dartford)

    Simmons, C. J. (Brierley Hill)

    Butler, Mrs. Joyce (Wood Green)

    Janner, B.

    Skeffington, A. M.

    Callaghan, L. J.

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

    Slater, J. (Sedgefield)

    Castle, Mrs. B. A.

    Jeger, George (Goole)

    Smith, Ellis (Stoke, S.)

    Champion, A. J.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Snow, J. W.

    Chapman, W. D.

    Jenkins, Roy (Stechford)

    Sorensen, R. W.

    Chetwynd, G. R.

    Johnson, James (Rugby)

    Soskice, Rt. Hon. Sir Frank

    Clunie, J.

    Jones, David (The Hartlepools)

    Steele, T.

    Coldrick, W.

    Key, Rt. Hon. C. W.

    Stewart, Michael (Fulham)

    Collick, P. H. (Birkenhead)

    King, Dr. H. M.

    Stokes, Rt. Hon. R. R. (Ipswich)

    Collins, V. J. (Shoreditch & Finsbury)

    Lawson, G. M.

    Strauss, Rt. Hon. George (Vauxhall)

    Craddock, George (Bradford, S.)

    Ledger, R. J.

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Crossman, R. H. S.

    Lee, Frederick (Newton)

    Summerskill, Rt. Hon. E.

    Cullen, Mrs. A.

    Lee, Miss Jennie (Cannock)

    Swingler, S. T.

    Daines, P.

    Lever, Leslie (Ardwick)

    Taylor, John (West Lothian)

    Dalton, Rt. Hon. H.

    Lindgren, G. S.

    Thomson, George (Dundee, E.)

    Darling, George (Hillsborough)

    Lipton, Lt.-Col. M.

    Timmons, J.

    Davies, Ernest (Enfield, E.)

    Logan, D. G.

    Tomney, F.

    Davies, Harold (Leek)

    Mabon, Dr. J. Dickson

    Ungoed-Thomas, Sir Lynn

    Davies, Stephen (Merthyr)

    MacColl, J. E.

    Usborne, H. C.

    de Freitas, Geoffrey

    McInnes, J.

    Wells, Percy (Faversham)

    Delargy, H. J.

    McKay, John (Wallsend)

    Wells, William (Walsall, N.)

    Dodds, N. N.

    McLeavy, Frank

    West, D. G.

    Dye, S.

    MacPherson, Malcolm (Stirling)

    Wheeldon, W. E.

    Ede, Rt. Hon. J. C.

    Mahon, Simon

    White, Mrs. Eirene (E. Flint)

    Edwards, Rt. Hon. John (Brighouse)

    Mann, Mrs. Jean

    White, Henry (Derbyshire, N.E.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Marquand, Rt. Hon. H. A.

    Wilkins, W. A.

    Edwards, W. J. (Stepney)

    Mayhew, C. P.

    Williams, David (Neath)

    Evans, Albert (Islington, S.W.)

    Messer, Sir F.

    Williams, Rev. Llywelyn (Ab'tillery)

    Evans, Edward (Lowestoft)

    Mitchison, G. R.

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

    Evans, Stanley (Wednesbury)

    Moody, A. S.

    Williams, W. R. (Openshaw)

    Fernyhough, E.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Williams, W. T. (Barons Court)

    Fienburgh, W.

    Mort, D. L.

    Willis, Eustace (Edinburgh, E.)

    Finch, H. J.

    Moss, R.

    Wilson, Rt. Hon. Harold (Huyton)

    Fletcher, Eric

    Mulley, F. W.

    Winterbottom, Richard

    Forman, J. C.

    Oliver, G. H.

    Woodburn, Rt. Hon. A.

    Fraser, Thomas (Hamilton)

    Oram, A. E.

    Yates, V. (Ladywood)

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

    Orbach, M.

    Zilliacus, K.

    Gibson, C. W.

    Oswald, T.

    Gooch, E. G.

    Owen, W. J.

    TELLERS FOR THE AYES:

    Gordon Walker, Rt. Hon. P. C.

    Padley, W. E.

    Mr. Deer and Mr. Short.

    468

    NOES

    Agnew, Cmdr. P. G.

    Barter, John

    Bossom, Sir Alfred

    Aitken, W. T.

    Baxter, Sir Beverley

    Boyle, Sir Edward

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

    Beamish, Maj. Tufton

    Braine, B. R.

    Alport, C. J. M.

    Bell, Philip (Bolton, E.)

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

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Bell, Ronald (Bucks, S.)

    Brooke, Rt. Hon. Henry

    Armstrong, C. W.

    Bevins, J. R. (Toxteth)

    Brooman-White, R. C.

    Ashton, H.

    Bidgood, J. C.

    Browne, J. Nixon (Craigton)

    Astor, Hon. J. J.

    Biggs-Davison, J. A.

    Bryan, P.

    Atkins, H. E.

    Birch, Rt. Hon. Nigel

    Bullus, Wing Commander E. E.

    Baldock, Lt.-Cmdr. J.M.

    Bishop, F. P.

    Burden, F. F. A.

    Baldwin, A. E.

    Black, C. W.

    Channon, H.

    Balniel, Lord

    Body, R. F.

    Clarke, Brig. Terence (Portsmth, W.)

    469

    Cole, Norman

    Hudson, Sir Austin (Lewisham, N.)

    Partridge, E.

    Conant, Maj. Sir Roger

    Hughes Hallett, Vice-Admiral J.

    Pilkington, Capt. R. A.

    Cooper, A. E.

    Hughes-Young, M. H. C.

    Pitman, I. J.

    Cooper-Key, E. M.

    Hulbert, Sir Norman

    Pitt, Miss E. M.

    Cordeaux, Lt.-Col. J. K.

    Hurd, A. R.

    Pott, H. P.

    Corfield, Capt. F. V.

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

    Powell, J. Enoch

    Craddock, Beresford (Spelthorne)

    Hutchison, Sir James (Scotstoun)

    Price, Henry (Lewisham, W.)

    Crowder, Sir John (Finchley)

    Iremonger, T. L.

    Profumo, J. D.

    Dance, J. C. G.

    Irvine, Bryant Godman (Rye)

    Raikes, Sir Victor

    Davidson, Viscountess

    Jenkins, Robert (Dulwich)

    Ramsden, J. E.

    D'Avigdor-Goldsmid, Sir Henry

    Jennings, J. C. (Burton)

    Rawlinson, Peter

    Deedes, W. F.

    Johnson, Dr. Donald (Carlisle)

    Redmayne, M.

    Digby, Simon Wingfield

    Johnson, Eric (Blackley)

    Pees-Davies, W. R.

    Donaldson, Cmdr. C. E. McA.

    Joynson-Hicks, Hon. Sir Lancelot

    Remnant, Hon. P.

    du Cann, E. D. L.

    Keegan, D.

    Ridsdale, J. E.

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

    Kerby, Capt. H. B.

    Rippon, A. G. F.

    Duncan, Capt. J. A. L.

    Kerr, H. W.

    Robertson, Sir David

    Duthie, W. S.

    Kershaw, J. A.

    Roper, Sir Harold

    Eccles, Rt. Hon. Sir David

    Kimball, M.

    Ropner, Col. Sir Leonard

    Eden, Rt. Hn. Sir A. (Warwick & L'm'tn)

    Kirk, P. M.

    Russell, R. S.

    Eden, J. B. (Bournemouth, West)

    Lagden, G. W.

    Sandys, Rt. Hon. D.

    Errington, Sir Eric

    Lambert, Hon. G.

    Schofield, Lt.-Col, W.

    Erroll, F. J.

    Lancaster, Col. C. G.

    Scott-Miller, Cmdr. R.

    Farey-Jones, F. W.

    Leavey, J. A.

    Sharples, R. C.

    Finlay, Graeme

    Leburn, W. G.

    Shepherd, William

    Fisher, Nigel

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

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

    Fleetwood-Hesketh, R. F.

    Legh, Hon. Peter (Petersfield)

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Fletcher-Cooke, C.

    Lindsay, Hon. James (Devon, N.)

    Stevens, Geoffrey

    Foster, John

    Lindsay, Martin (Solihull)

    Steward, Harold (Stockport, S.)

    Galbraith, Hon. T. G. D.

    Linstead, Sir H. N.

    Steward, Sir William (Woolwich, W.)

    Gammans, Sir David

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

    Stoddart-Scott, Col. M.

    George, J. C. (Pollok)

    Lloyd-George, Maj. Rt. Hon. G.

    Studholme, Sir Henry

    Gibson-Watt, D.

    Longden, Gilbert

    Summers, Sir Spencer

    Glover, D.

    Lucas, P. B. (Brantford & Chiswick)

    Taylor, Sir Charles (Eastbourne)

    Godber, J. B.

    Lucas-Tooth, Sir Hugh

    Taylor, William (Bradford, N.)

    Gomme-Duncan, Col. Sir Alan

    McAdden, S. J.

    Teeling, W.

    Gough, C. F. H.

    Mackie, J. H. (Galloway)

    Thomas, Leslie (Canterbury)

    Gower, H. R.

    Maclay, Rt. Hon. John

    Thomas, P. J. M. (Conway)

    Graham, Sir Fergus

    McLean, Neil (Inverness)

    Thompson, Kenneth (Walton)

    Grant, W. (Woodside)

    MacLeod, John (Ross & Cromarty)

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

    Grant-Ferris, Wg. Cdr. R. (Nantwich)

    Macmillan, Rt. Hn. Harold (Bromley)

    Thornton-Kemsley, C. N.

    Green, A.

    Macpherson, Niall (Dumfries)

    Tiley, A. (Bradford, W.)

    Grimond, J.

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

    Tilney, John (Wavertree)

    Grimston, Hon. John (St. Albans)

    Maitland, Hon. Patrick (Lanark)

    Touche, Sir Gordon

    Grimston, Sir Robert (Westbury)

    Markham, Major Sir Frank

    Turner, H. F. L.

    Gurden, Harold

    Marlowe, A. A. H.

    Turton, Rt. Hon. R. H.

    Hall, John (Wycombe)

    Marshall, Douglas

    Vickers, Miss J. H.

    Hare, Rt. Hon. J. H.

    Mathew, R.

    Vosper, D. F.

    Harris, Frederic (Croydon, N.W.)

    Mawby, R. L.

    Wade, D. W.

    Harris, Reader (Heston)

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

    Wakefield, Edward (Derbyshire, W.)

    Harrison, A. B. C. (Maldon)

    Medlicott, Sir Frank

    Wakefield, Sir Wavell (St. M'lebone)

    Harvey, Ian (Harrow, E.)

    Milligan, Rt. Hon. W. R.

    Walker-Smith, D. C.

    Harvey, John (Walthamstow, E.)

    Molson, Rt. Hon. Hugh

    Wall, Major Patrick

    Harvie-Watt, Sir George

    Moore, Sir Thomas

    Ward, Hon. George (Worcester)

    Hay, John

    Mott-Radclyffe, C. E.

    Ward, Dame Irene (Tynemouth)

    Head, Rt. Hon. A. H.

    Nabarro, G. D. N.

    Waterhouse, Capt. Rt. Hon. C.

    Heald, Rt. Hon. Sir Lionel

    Nairn, D. L. S.

    Watkinson, Rt. Hon. Harold

    Heath, Rt. Hon. E. R. G.

    Neave, Airey

    Whitelaw, W.S.I. (Penrith & Border)

    Hill, Rt. Hon. Charles (Luton)

    Nicholson, Godfrey (Farnham)

    Williams, Paul (Sunderland, S.)

    Hill, Mrs. E. (Wythenshawe)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Williams, R. Dudley (Exeter)

    Hill, John (S. Norfolk)

    Nield, Basil (Chester)

    Wills, G. (Bridgwater)

    Hirst, Geoffrey

    Noble, Comdr. A. H. P.

    Wilson, Geoffrey (Truro)

    Holland-Martin, C. J.

    Oakshott, H. D.

    Woollam, John Victor

    Holt, A. F.

    Ormsby-Gore, Hon. W. D.

    Yates, William (The Wrekin)

    Hope, Lord John

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

    Hornby, R. P.

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

    TELLERS FOR THE NOES:

    Horsbrugh, Rt. Hon. Dame Florence

    Osborne, C.

    Colonel J. H. Harrison and

    Howard, Hon. Greville (St. Ives)

    Page, R. G.

    Mr. Barber.

    6.45 p.m.
    Mr. Gordon Walker: I beg to move, in page 24, line 23, after "year" to insert:
    "nor more than the sum of five thousand pounds in any ten consecutive years".
    I regard this Amendment as of much greater importance than the one we have just dealt with, although I thought that that was important. This one ought to
    470
    appeal to the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) and maybe to the hon. Gentleman the Member for Cheadle (Mr. Shepherd), and even to the Chancellor. I say that because in the course of the previous debate the right hon. Gentleman pointed to the case of someone whose earnings might fluctuate, or might even reach their maximum before

    471
    the age of 50, and for such people this would be a benefit.
    This Amendment deals with the late earners, if I may so describe them, rather than the late entrants, and late earners will, presumably, be with us for ever. They are not a problem which arises only at the beginning of a scheme. Clearly, there is a case, which was made by the hon. Member for Cheadle among others, for the late earner, the man who reaches his highest earning capacity towards the end of his life but, because he was not earning much before, the one-tenth of his income he was able to put in did not add up to much. Even then he is still allowed only to pay up to £500 a year which, relative to someone who had been earning a higher average all through his working life, would make him less well off.
    This point was well put, we appreciated it ourselves from the beginning, and there is a case for it. However, I do not think that there is any case for the Chancellor's way of dealing with it. What the right hon. Gentleman has done is to raise the limit for everybody, including his own category of people who reach their maximum earning capacity before the age of 50, either at 40 or even 35. In the case of athletes it may be even earlier.
    The Chancellor has raised the limit for everybody regardless of whether they are late earners, early earners or steady earners, in order to benefit the one class of late earners. The burden of the representations made to him was that these people whose interests were represented were late earners. But the proposal of the right hon. Gentleman benefits all men, though, of course, only all rich men, earning over £5,000 a year net relevant earnings, regardless of the point at which they reach their full earnings.
    Our Amendment is designed, and, I think, succeeds in hitting just the class we are talking about, namely, those who reach a high earning capacity at a relatively late age. Our Amendment would enable such late earners to catch up with other people who had been earning a more even income through the whole or the greater part of their earning life, because it would enable such a late earner to go over the £500 a year limit, but only in so far that if that were
    472
    averaged over ten years it would still reach an annual average of £500.
    The late earner would not, therefore, get ahead of other people, but would be able to catch them up. After all, that is the intent and purpose behind all the suggestions that have been made on behalf of the late earner. It means that the late earner would be able to get an annual average spread over ten years of £500 a year, and this is exactly what he ought to get in justice, and it would avoid the raising of the limit for everybody—late, early, anybody—as long as they were rich enough to enjoy it.
    Under our Amendment, in a particular year a late earner could go even above the Chancellor's £750 as long as the annual average over ten years was only £500. In certain respects this might benefit a late earner even more than the Chancellor does, but it would not enable him in the end to get above the general level allowed to all other people.
    It seems to me that the cost would be considerably less than the cost of the Chancellor's proposal. I do not doubt that the right hon. Gentleman, in his usual courteous way, will give us the cost, but I imagine it would be less because the general raising of the limit would be avoided by this means and would be concentrated upon late earners.
    This is a compromise we could accept, and that is why we are putting it forward. I hope very much that the Chancellor will look at it in that way, because we have gone very far to try to get a reasonable compromise by which, as a result of giving way somewhat on points we are not really sure about, we can achieve a real unity of both sides of the House on this important matter.
    I must tell the Chancellor that we are still bitterly opposed to his remedy of raising the limit from £500 to £750. The Chancellor must not deduce from the tone in which we moved the previous Amendment, and from our desire to arrive at a compromise here, that we are in the slightest degree weakening in our complete objection to his remedy of raising the limit for everybody from £500 to £750. We are opposed to that whatever representations are made and by whomever they are made, and we shall continue to be opposed to it. If the Chancellor insists upon it, and the Amendment is rejected, the scheme will not be able to

    473
    be considered as one which, in this respect, is based on common agreement in the House. That applies to the rest of the scheme, but if the Chancellor does not accept the Amendment we shall retain strong and lasting objection to his raising of the limit.
    I hope that the right hon. Gentleman, for the sake of unity, for the reason which he gave on the last Amendment, that of the need to get maximum sympathy from both sides of the House for the launching of this kind of experiment, can come the halfway that is necessary to meet those on this side who have gone halfway to meet him. As I have often said to him, we would sooner not have a party issue on this point, but the Chancellor must not think that, because our words have been moderate, we have weakened in the slightest degree in our very strong, bitter and lasting opposition to the raising of the limit.
    We put forward our proposal as a compromise. There is more to be said on the merits, but none the less, it is a compromise which would enable us to proceed with sympathy on both sides of the House. If the Amendment is rejected, that chance will be destroyed, and we shall retain our feeling that this is wrong and our liberty to put it right when the chance comes to us to do so.
    Mr. H. Brooke: I am sure it is recognised that the right hon. Member for Smethwick (Mr. Gordon Walker) spoke with sincerity when he said that he was opposed to the £750 limit which has now been written into the Bill. However, I hope he will take the view, as we on the Government side of the House have done, that the whole Millard Tucker scheme is experimental and we must see how we get on. I trust that experience will show that his right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) was correct in the view that he expressed and that the other members of the Labour Party were wrong.
    The Amendment would—indeed, this is its intention—whittle down the value of the £750 limit which has now been inserted in the Bill. The right hon. Gentleman said the Amendment would help the late earners, but that is not so. If the Bill were amended in this way, it would restrict the late earners. It would have helped the late earners only if the
    474
    Bill had not previously been amended by substituting £750 for £500.
    I listened with care to the arguments on which the right hon. Gentleman based his case. I thought he was going to face me, on the Amendment, with a complete answer to something that I had said in Committee, because one of the reasons which I had given for accepting the Amendment to alter the limit from £500 to £750 was that that would help the man whose earnings fluctuated. I want to do the right hon. Gentleman full justice, and I must say that I thought the Amendment was a very clever form of words in reply to that part of the argument which I had adduced. I stress "that part", because other considerations were raised in Committee, and we must see how the Amendment would affect them also.
    Several hon. Members have referred at various times to the case of the professional man who has a considerable struggle in his early years and then reaches, for a short period in later life, a high rate of earnings. That is the type of man who can afford to save relatively little until he reaches middle life. At that point, he is faced with the necessity of making provision out of savings for his retirement at a time when each £100 that he can put aside by way of premium to acquire a pension policy for his retirement will have much less value in terms of the annuity that it will purchase than £100 paid, say, twenty years earlier.
    That type of man will be hit by the Amendment. The right hon. Gentleman said that the Amendment would succeed in hitting "just the class we are aiming at." I thought he meant hitting to their advantage, but "hit" is ambiguous, and I will show that the Amendment would hit them gravely to their disadvantage. The people who in their later life before retirement are able for a short time to enjoy substantial incomes would, if the Amendment were accepted, be restricted to tax relief on an average of £500 a year for the ten years of their highest earnings. The total relief that such a man would be able to get in the ten years would be only £5,000, which, of course, is just what it would have been for him if the limit had never been raised in Committee from £500 to £750.
    There is a further objection, and I think that hon. Members opposite,

    475
    although they are strongly prejudiced in favour of the Amendment, will recognise the force of what I am about to say. The proposed limit of £5,000 in any ten-year period would apply so as to cut down the additional tax relief to which the late entrants would otherwise be entitled. As the Bill stands, the maximum for those born in 1907 or earlier is £1,125. Indeed, if we had never accepted the Amendment to change the limit from £500 to £750, the tax relief under the comparable Amendment, to which I am sure the Committee would have agreed for the benefit of the late entrants, would have given the man who was born before 1907 the right to tax relief on £750 a year. Those people—my argument is equally applicable whether the limit is £500 or £750—would be harshly hit by the Amendment, because they would find that they had exhausted their tax relief before the end of the ten years.
    Indeed, with the Bill as it stands, the person who was born before 1907 and is fortunate enough to be earning £7,500 a year, would be able to get tax relief on £1,125 a year. In four years that would amount to £4,500, and then he would find, under the Amendment, that he was left with a further £500 only for the remaining six years of the ten-year period. Although the right hon. Gentleman believes that he and his hon. Friends have devised a skilful and unobjectionable way of meeting the difficulty that otherwise arises over fluctuating earnings, what has really happened is that he has moved an Amendment which would not help but harm both the late earners and the late entrants. For those reasons I could not possibly advise the House to accept the Amendment.
    7.0 p.m.
    Mr. Mitchison: My right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) was speaking, on the occasion to which the Financial Secretary took yet another opportunity to refer, as Chairman of the Bar Council. If he is the Chairman of the Bar Council, he has to represent the views of the Council and to represent them fairly and fully. It seems to me inviting very unfortunate consequences to the future of the House if observations and representations, which are made in that representative capacity, are confused with something
    476
    entirely different, the political and perhaps personal views—I do not know about that—of the right hon. and learned Member.
    If it is desired that right hon. and hon. Members shall occupy positions of that importance in their professions—as I hope they still may—then I suggest that it is up to all responsible Members, including for that purpose members of the Government, to make it particularly clear in what capacity that kind of statement is made. I regard it as unfortunate, to say the least of it, that that matter, which was clearly stated yesterday and cleared up in an exchange between the Chancellor of the Exchequer, who, originally, put the matter far more fairly than did the right hon. Gentleman, and my right hon. Friend the Member for Huyton (Mr. H. Wilson), should have further reference made to it which can only have the effect of obscuring what was said yesterday.
    Now I turn to the merits of the Amendment. We have always taken the view that £500 and not £750 was the right limit. That was the view of the Government. That was the figure which they put into the Bill. A great deal of the procedural difficulty in which we have been involved has been due to the fact that the Government, under pressure from their own supporters in the course of the Committee stage, at a very late hour of the night accepted an Amendment which it never occured to me they would accept.
    It did not occur to me because I certainly imagined that, when making up their minds on a matter of considerable importance, something which involved many millions of public money, the Government would at least have decided what limit they would have before coming to the House. It is with some impatience that I now hear the kind of comment which the right hon. Gentleman is now able to make, that the matter has not been sufficiently thought out by the Opposition. We have done a little better than he gives us credit for having done.
    Let us see what the effect of the Amendment will be. It is intended to meet a particular type of case, the type of person, usually a professional man, who makes high earnings in a short period, but who very often has to wait for a long time before he makes them.

    477
    It is only out of those earnings that he is able to save. The period over which he can make them varies in different professions. It is probably particularly short—although I speak without expert knowledge of these matters—in the case of a highly skilled surgeon. It may be a little longer in the case of a highly learned and expert lawyer. It may be a little more in the case of an actor, to take a rather different type of occupation.
    When we are considering a tax concession of this magnitude—and it is considerable—we feel that we ought not to use that particular case to justify a general increase which will be for the benefit only of people who make between £5,000 and £7,500 a year and who are to have a tax concession at a moment when the Chancellor is telling us that the country is in considerable financial difficulties. That is our broad line of approach.
    What we suggest is not a very complicated matter. It may be that we have gone too far, but I do not think that we have. Let us take the example of a person who, during a quite short period, makes phenomenally high earnings. During that short period he will get the benefit of the £750—or of the £7,500 to put it the other way. No doubt during the preparatory years, or in retirement, because his skill has lessened, he will not be in a position to save so much that he will reach even the £500 limit. Any hon. Member can work out for himself the various combinations of figures—a limit of £250 followed by a limit of £750 and numerous other combinations.
    However, the principle is perfectly clear and it is that if, contrary to our view, we are to have a high limit at all in the circumstances of the moment, then we should at least confine it to the type of case for which something plausible was said during our discussions in Committee. It is for that reason that we have a spread of this amount over a term of years.
    It is said that the Amendment will be hard on the late entrant. It is fair to point out that we have already tried to do something about the late entrant on our own lines and we are no longer discussing that. We have been turned down and that is that. I should like to point out that the late entrant and the high casual earner are not likely to be the same sort of person. We are here trying
    478
    to deal with the person who, at present, is not in a position to get much out of this concession, because he cannot save enough, but who, as time passes, will be able to get something out of it. It is quite possible to combine the two things, if that is what is really required, but at the moment we are left with the question of whether or not we ought to accept the Amendment as it stands.
    I say without hesitation that in the financial circumstances of the moment I prefer to have this broad limit of £5,000 over ten years, even though the late entrants will not get as much out of it as they will from the Chancellor's concession to them in the Schedule. The class of person with whom we are trying to deal seems to be a class which invites more attention and requires more to be done for it than the late entrants to whom reference was made. I do not regard the late entrants as so badly off, because if they are a separate class then they will get the benefit of the £750. As we already say that, in general, the £750 is too high, we cannot be expected to agree with any great satisfaction to yet further additions to that sum on behalf of this particular class.
    I repeat, finally, that there is only one real moral case for raising this limit. That is the case of the man who can make much, but only for a short time. When I listened yesterday to the right hon. and learned Member for Kensington, South (Sir P. Spens) pleading generally in support of the £750 limit, I thought it highly significant that the instance he took was just that of the man who earns a great deal for a short time and who has to wait long for it, or, to take the other end of the scale, has to retire early.
    It therefore seems to me that this Amendment raises a question of principle, a question of fairness, a question of the duty of the Government, in the financial circumstances of the time, towards people generally and of how far a Government, who have already refused concessions for tobacco and other similar concessions, which would have helped really poor people, are justified in making this general concession without limit and without provision for its not being abused in favour of the class of people who earn between £5,000 and £7,500 a year. I say that that is giving too much and that this Amendment would meet the one case of real—I will not say hardship because,

    479
    after all, we have got a little bit beyond hardship—unfairness that might have arisen and that it ought to be accepted.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 185, Noes 224.

    Division No. 263.]

    AYES

    [7.12 p.m.

    Ainsley, J. W.

    Gordon Walker, Rt. Hon. P. C.

    Oswald, T.

    Allaun, Frank (Salford, E.)

    Greenwood, Anthony

    Owen, W. J.

    Allen, Arthur (Bosworth)

    Grenfell, Rt. Hon. D. R.

    Padley, W. E.

    Allen, Scholefield (Crewe)

    Grey, C. F.

    Paling, Will T. (Dewsbury)

    Anderson, Frank

    Griffiths, David (Rother Valley)

    Pannell, Charles (Leeds, W.)

    Awbery, S. S.

    Hale, Leslie

    Parker, J.

    Bacon, Miss Alice

    Hamilton, W. W.

    Parkin, B. T.

    Bellenger, Rt. Hon. F. J.

    Hannan, W.

    Pearson, A.

    Bence, C. R. (Dunbartonshire, E.)

    Harrison, J. (Nottingham, N.)

    Plummer, Sir Leslie

    Benson, G.

    Hastings, S.

    Popplewell, E.

    Beswick, F.

    Hayman, F. H.

    Price, J. T. (Westhoughton)

    Blackburn, F.

    Heeley, Denis

    Probert, A. R.

    Blenkinsop, A.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Proctor, W. T.

    Boardman, H.

    Herbison, Miss M.

    Pryde, D. J.

    Bottomley, Rt. Hon. A. G.

    Hewitson, Capt. M.

    Randall, H. E.

    Bowden, H. W. (Leicester, S. W.)

    Hobson, C. R.

    Rankin, John

    Boyd, T. C.

    Holman, P.

    Redhead, E. C.

    Braddock, Mrs. Elizabeth

    Howell, Charles (Perry Barr)

    Reeves, J.

    Brockway, A. F.

    Howell, Denis (All Saints)

    Reid, William

    Broughton, Dr. A. D. D.

    Hoy. J. H.

    Roberts, Albert (Normanton)

    Brown, Rt. Hon. George (Belper)

    Hubbard, T. F.

    Roberts, Goronwy (Caernarvon)

    Brown, Thomas (Ince)

    Hughes, Emrys (S. Ayrshire)

    Rogers, George (Kensington, N.)

    Burke, W. A.

    Hughes, Hector (Aberdeen, N.)

    Royle, C.

    Burton, Miss F. E.

    Hunter, A. E.

    Short, E. W.

    Butler, Mrs. Joyce (Wood Green)

    Hynd, H. (Acorington)

    Silverman, Julius (Aston)

    Callaghan, L. J.

    Hynd, J. B. (Attercliffe)

    Silverman, Sydney (Nelson)

    Castle, Mrs. B. A.

    Irving, S. (Dartford)

    Skeffington, A. M.

    Champion, A. J.

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

    Slater, J. (Sedgefield)

    Chapman, W. D.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Smith, Ellis (Stoke, S.)

    Chetwynd, G. R.

    Jenkins, Roy (Stechford)

    Sorensen, R. W.

    Clunie, J.

    Johnson, James (Rugby)

    Steele, T.

    Coldrick, W.

    Jones, David (The Hartlepools)

    Stewart, Michael (Fulham)

    Collick, P. H. (Birkenhead)

    Key, Rt. Hon. C. W.

    Stokes, Rt. Hon. R. R. (Ipswich)

    Collins, V. J. (Shoreditch& Finsbury)

    King, Dr. H. M.

    Stross, Dr. Barnett (Stoke-on-Trent, C.)

    Craddock, George (Bradford, S.)

    Lawson, G. M.

    Summerskill, Rt. Hon. E.

    Crossman, R. H. S.

    Ledger, R. J.

    Swingler, S. T.

    Cullen, Mrs. A.

    Lee, Frederick (Newton)

    Taylor, John (West Lothian)

    Dalton, Rt. Hon. H.

    Lee, Miss Jennie (Cannock)

    Thomas, George (Cardiff)

    Darling, George (Hillsborough)

    Lever, Leslie (Ardwick)

    Thomson, George (Dundee, E.)

    Davies, Harold (Leek)

    Lindgren, G. S.

    Timmons, J.

    Davies, Stephen (Merthyr)

    Lipton, Lt.-Col. M.

    Tomney, F.

    Deer, G.

    Logan, D. G.

    Ungood-Thomas, Sir Lynn

    De Freitas, Geoffrey

    Mahon, Dr. J. Dickson

    Usborne, H. C.

    Delargy, H. J.

    MacColl, J. E.

    Wells, Percy (Faversham)

    Dodds, N. N.

    McInnes, J.

    Wells, William (Walsall, N.)

    Dye, S.

    McKay, John (Wallsend)

    Wheeldon, W. E.

    Ede, Rt. Hon. J. C.

    McLeavy, Frank

    White, Mrs. Eirene (E. Flint)

    Edwards, Rt. Hon. John (Brighouse)

    MacPherson, Malcolm (Stirling)

    White, Henry (Derbyshire, N. E.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mahon, Simon

    Wilkins, W. A.

    Edwards, W. J. (Stepney)

    Mann, Mrs. Jean

    Williams, David (Heath)

    Evans, Albert (Islington, S. W.)

    Marquand, Rt. Hon. H. A.

    Williams, Rev. Llywelyn (Ab'tillery)

    Evans, Edward (Lowestoft)

    Mayhew, C. P.

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

    Evans, Stanley (Wednesbury)

    Messer, Sir F.

    Williams, W. R. (Openshaw)

    Fernyhough, E.

    Mitchison, G. R.

    Williams, W. T. (Barons Court)

    Fienburgh, W.

    Moody, A. S.

    Willis, Eustace (Edinburgh, E.)

    Finch, H. J.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Wilson, Rt. Hon. Harold (Huyton)

    Fletcher, Eric

    Mort, D. L.

    Winterbottom, Richard

    Forman, J. C.

    Moss, R.

    Woodburn, Rt. Hon. A.

    Fraser, Thomas (Hamilton)

    Mulley, F. W.

    Yates, V. (Ladywood)

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

    Neal, Harold (Bolsover)

    Zilliacus, K.

    Gibson, C. W.

    Oliver, G. H.

    Gooch, E. G.

    Oram, A. E.

    TELLERS FOR THE AYES:

    Orbach, M.

    Mr. Holmes and Mr. Simmons.

    NOES

    Agnew, Cmdr. P. G.

    Atkins, H. E.

    Bell, Ronald (Bucks, S.)

    Aitken, W. T.

    Baldock, Lt.-Cmdr. J. M.

    Bevins, J. R. (Toxteth)

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

    Baldwin, A. E.

    Bidgood, J. C.

    Alport, C. J. M.

    Balniel, Lord

    Biggs-Davison, J. A.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Barber, Anthony

    Birch, Rt. Hon. Nigel

    Anstruther-Gray, Major Sir William

    Barter, John

    Bishop, F. P.

    Armstrong, C. W.

    Baxter, Sir Beverley

    Black, C. W.

    Ashton, H.

    Beamish, Maj. Tufton

    Body, R. F.

    Astor, Hon. J. J.

    Bell, Philip (Bolton, E.)

    Bossom, Sir Alfred

    Boyle, Sir Edward

    Holt, A. F.

    Page, R. G.

    Braine, B. R.

    Hornby, R. P.

    Partridge, E.

    Brooke, Rt. Hon. Henry

    Horsbrugh, Rt. Hon. Dame Florence

    Pilkington, Capt. R. A.

    Brooman-White, R. C.

    Howard, Hon. Greville (St. Ives)

    Pitman, I. J.

    Browne, J. Nixon (Craigton)

    Hudson, Sir Austin (Lewisham, N.)

    Pitt, Miss E. M.

    Bullus, Wing Commander E. E.

    Hughes Hallett, Vice-Admiral J.

    Pott, H. P.

    Burden, F. F. A.

    Hughes-Young, M. H. C.

    Powell, J. Enoch

    Channon, H.

    Hulbert, Sir Norman

    Price, Henry (Lewisham, W.)

    Clarke, Brig. Terence (Portsmth, W.)

    Hurd, A. R.

    Profumo, J. D.

    Cole, Norman

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

    Raikes, Sir Victor

    Conant, Maj. Sir Roger

    Hutchison, Sir James (Scotstoun)

    Ramsden, J. E.

    Cooper, Sqn. Ldr. Albert

    Iremonger, T. L.

    Rawlinson, Peter

    Cooper-Key, E. M.

    Irvine, Bryant Godman (Rye)

    Redmayne, M.

    Cordeaux, Lt.-Col. J. K.

    Jenkins, Robert (Dulwich)

    Rees-Davies, W. R.

    Corfield, Capt. F. V.

    Jennings, J. C. (Burton)

    Remnant, Hon. P.

    Craddock, Beresford (Spelthorne)

    Johnson, Dr. Donald (Carlisle)

    Ridsdale, J. E.

    Crouch, R. F.

    Johnson, Eric (Blackley)

    Rippon, A. G. F.

    Crowder, Sir John (Finchley)

    Joynson-Hicks, Hon. Sir Lancelot

    Robertson, Sir David

    Dance, J. C. G.

    Keegan, D.

    Roper, Sir Harold

    D'Avigelor-Goldsmid, Sir Henry

    Kerby, Capt. H. B.

    Ropner, Col. Sir Leonard

    Deedes, W. F.

    Kerr, H. W.

    Russell, R. S.

    Digby, Simon Wingfield

    Kershaw, J. A.

    Schofield, Lt.-Col. W.

    Donaldson, Cmdr. C. E. McA.

    Kimball, M.

    Scott-Miller, Cmdr. R.

    Drayson, G. B.

    Kirk, P. M.

    Sharples, R. C.

    du Cann, E. D. L.

    Lagden, G. W.

    Shepherd, William

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

    Lambert, Hon. G.

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

    Duncan, Capt. J. A. L.

    Lancaster, Col. C. G.

    Spearman, Sir Alexander

    Eccles, Rt. Hon. Sir David

    Leavey, J. A.

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Eden, J. B. (Bournemouth, West)

    Leburn, W. G.

    Stanley, Capt. Hon. Richard

    Errington, Sir Eric

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

    Steward, Harold (Stockport, S.)

    Finlay, Graeme

    Legh, Hon. Peter (Petersfield)

    Steward, Sir William (Woolwich, W.)

    Fisher, Nigel

    Lindsay, Hon. James (Devon, N.)

    Stoddart-Scott, Col. M.

    Fleetwood-Hesketh, R. F.

    Lindsay, Martin (Solihull)

    Studholme, Sir Henry

    Fletcher-Cooke, C,

    Linstead, Sir H. N.

    Summers, Sir Spencer.

    Foster, John

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

    Taylor, Sir Charles (Eastbourne)

    Galbraith, Hon. T. G. D.

    Longden, Gilbert

    Taylor, William (Bradford, N.)

    Gammans, Sir David

    Lucas, P. B. (Brantford & Chiswick)

    Teeling, W.

    George, J. C. (Pollok)

    Lucas-Tooth, Sir Hugh

    Thomas, Leslie (Canterbury)

    Gibson-Watt, D.

    Mackie, J. H. (Galloway)

    Thomas, P. J. (M. (Conway)

    Glover, D.

    Maclay, Rt. Hon. John

    Thompson, Kenneth (Walton)

    Gomme-Duncan, Col. Sir Alan

    McLean, Neil (Inverness)

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

    Gough, C. F. H.

    MacLeod, John (Ross & Cromarty)

    Thornton-Kemsley, C. N.

    Gower, H. R.

    Macmillan, Rt. Hn. Harold (Bromley)

    Tiley, A. (Bradford, W.)

    Graham, Sir Fergus

    Macpherson, Niall (Dumfries)

    Tilney, John (Wavertree)

    Grant, W. (Woodside)

    Maddan, Martin

    Touche, Sir Gordon

    Grant-Ferris, Wg. Cdr. R. (Nantwich)

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

    Turner, H. F. L.

    Green, A.

    Maitland, Hon. Patrick (Lanark)

    Turton, Rt. Hon. R. H.

    Grimond, J.

    Markham, Major Sir Frank

    Vickers, Miss J. H.

    Grimston, Hon. John (St. Albans)

    Marlowe, A. A. H.

    Vosper, D. F.

    Grimston, Sir Robert (Westbury)

    Marshall, Douglas

    Wakefield, Edward (Derbyshire, W.)

    Gurden, Harold

    Mathew, R.

    Wakefield, Sir Wavell (St. M'lebone)

    Hall, John (Wycombe)

    Mawby, R. L.

    Walker-Smith, D. C.

    Hare, Rt. Hon. J. H.

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

    Wall, Major Patrick

    Harris, Frederic (Croydon, N. W.)

    Medlicott, Sir Frank

    Ward, Hon. George (Worcester)

    Harrison, A. B. C. (Maldon)

    Milligan, Rt. Hon. W. R.

    Ward, Dame Irene (Tynemouth)

    Harrison, Col. J. H. (Eye)

    Molson, Rt. Hon. Hugh

    Waterhouse, Capt. Rt. Hon. C.

    Harvey, Ian (Harrow, E.)

    Moore, Sir Thomas

    Whitelaw, W. S. I. (Penrith & Border)

    Harvey, John (Walthamstow, E.)

    Mott-Radclyffe, C. E.

    Wiliams, Paul (Sunderland, S.)

    Harvie-Watt, Sir George

    Nabarro, G. D. N.

    Williams, R. Dudley (Exeter)

    Hay, John

    Neave, Airey

    Wills, G. (Bridgwater)

    Heald, Rt. Hon. Sir Lionel

    Nicholson, Godfrey (Farnham)

    Wilson, Geoffrey (Truro)

    Heath, Rt. Hon. E. R. G.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Woollam, John Victor

    Hill, Mrs. E. (Wythenshawe)

    Nield, Basil (Chester)

    Hill, John (S. Norfolk)

    Noble, Comdr. A. H. P.

    Yates, William (The Wrekin)

    Hirst, Geoffrey

    Oakshott, H. D.

    TELLERS FOR THE NOES:

    Holland-Martin, C. J.

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

    Mr. Godber and Mr. Bryan.

    Osborne, C.

    Mr. Geoffrey Hirst: I beg to move, in page 27, line 8, at the end to insert:
    (13) Without prejudice to subsection (3) of this section, a person who pays a qualifying premium in the year 1957–58 may elect that it or part of it shall be treated for the purposes of this and the last foregoing section as a qualifying premium paid in the year 1956–57, and shall be treated (subject to subsection (2) of this section) as not paid in the year 1957–58.
    These rather complicated words—necessary for drafting purposes—disguise
    482
    a very simple issue, and what I think the House would treat as a fair point. If I understand it correctly the Bill provides a time limit, as it must do, in which qualifying premiums for deferred annuities may rank for tax relief. This time limit, provided in an earlier part of the Clause, expires six months after the end of the year of assessment. I suggest that that is a quite understandable administrative convenience in respect of years other than the first year, but in first year, so

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    I am advised, it will be rather a handicap, as it will allow insufficient time for the establishment of trust funds. It takes some time to set up such funds, and they are desirable in the context of the Clause.
    The sole purpose of the Amendment is to extend to 5th April, 1958, the time limit for paying contributions to rank for tax relief in 1956–57. Since it is fully in the spirit of the Clause and the intentions of the Government—which I fully support—I trust that the Government will feel able to accept it.
    Mr. Edward du Cann: I beg to second the Amendment.
    As has been clearly demonstrated by my hon. Friend the Member for Shipley (Mr. Hirst), the Amendment is designed to improve the Clause, and I hope that my right hon. Friend will accept it.
    Mr. Mitchison: That seems reasonable.
    Mr. H. Brooke: In these happy circumstances, I should like to congratulate my hon. Friend the Member for Shipley (Mr. Hirst) upon having made a good point. I have great pleasure in advising the House to accept the Amendment.
    Amendment agreed to.

    Clause 27.—(GROUPS OF COMPANIES.)
    Sir E. Boyle: I beg to move, in page 35, line 24, to leave out from "it" to "nor" in line 25, and insert:
    "unless each of them is engaged in carrying on a trade or business, or each of them was so engaged at the beginning of the chargeable period specified in the notice as the first of the periods as respects which the notice is to have effect".
    This Amendment implements an undertaking which my hon. and learned Friend the Solicitor-General gave during the Committee stage. Subsection (1) provides that:
    "A grouping notice may not be given by a principal company as respects a subsidiary of it if either of them is not engaged in carrying on a trade or business …"
    In Committee, Amendments were moved by my hon. Friend the Member for Langstone (Mr. Stevens) designed to enable a grouping notice to be given in respect of a period when both companies were trading, although one had stopped doing so when the notice was given. My hon. and learned Friend said that my
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    hon. Friend's Amendments were clearly right in principle. He could not accept the wording, which was not quite right, but he said that he would arrange for a suitable Amendment to be tabled upon Report—and this is it.
    Mr. H. Wilson: After a prolonged study of the matter, we have come to the conclusion that this also seems reasonable.
    Mr. Stevens: All I wish to do is to congratulate my hon. Friend upon correcting my bad draftsmanship, and to thank him for accepting the principle of the Amendment.
    Amendment agreed to.

    Clause 28.—(EXTENT TO WHICH SUMS APPLIED IN REDUCING SHARE CAPITAL OR REPAYING LOANS ARE TO BE TREATED AS DISTRIBUTIONS.)
    Sir E. Boyle: I beg to move, in page 39, line 3, after "varied)", to insert:
    "conferred on the body corporate a right or".
    It might be for the convenience of the House if we considered, with this Amendment, the remaining Government Amendments in page 39, in lines 5, 10, 12, 17 and 19.
    This group of Amendments meets a point which my hon. and learned Friend the Solicitor-General undertook to consider in Committee, namely, whether the scope of the exemption granted by subsection (5) to premiums payable upon the redemption of redeemable preference shares issued before 16th April, 1947, should be extended so as to cover certain types of share which were not covered by the subsection as drafted. The Amendments extend the exemption in two ways. First, they modify subsection (5) so as to cover cases where pre-1947 terms of issue of redeemable preference shares of a company confer upon the company a right, but do not make it obligatory, to redeem the shares at a premium.
    Secondly, the new subsection (6) makes provision for similar treatment in cases where pre-1947 rights attached to issues of shares—other than redeemable preference shares—include a right of priority as respects capital for a sum in excess of the nominal amount of the shares. It is a technical point, but we have looked into it carefully.
    Mr. H. Wilson: These Amendments appear to be reasonable on the whole, in so far as we understand them, but I should like to ask the hon. Member if he will seek to secure the leave of the House to speak for a second time in relation to the last Amendment in the group. Is he absolutely satisfied that this does not widen too greatly the concession which he had in mind? If I remember rightly, the whole Clause stems from the case of the Universal Grinding Wheel Company, where the Board of Inland Revenue, as one gathers, was rather surprised by the decision of the court and has now, by means of the Clause, attempted to close the loophole.
    No Law Officers are present, but I am sure that their advice has been taken. Is the Chancellor quite sure that this concession would not allow either the Universal Grinding Wheel Company, in the case which was before the courts, or any other company in similar circumstances, to take advantage of the Clause, and thus defeat what the Government had in mind, namely the prevention of this rather minor form of legitimate tax avoidance?
    Sir E. Boyle: Perhaps I may reply, by leave of the House. I honestly do not think that that is so. I shall try to explain to the right hon. Gentleman the very narrow point which is covered by subsection (6). The provisions at the end of the first paragraph of the new subsection, regarding shares issued at a premium for cash, have been put in simply to ensure that in such cases the same amount is not deducted twice in computing distributions for Profits Tax purposes on a liquidation. I assure the right hon. Gentleman that the Amendment will do no more than that.
    Amendment agreed to.
    Further Amendments made: In page 39, line 5, after "that", insert "right or".
    In line 10, leave out "by that" and insert:
    "in pursuance of that right or".
    In line 12, after "said", insert "right or".
    In line 17, leave out "by the said" and insert:
    "in pursuance of the said right or".
    In line 19, at end insert:
    (6) Where immediately before the sixteenth day of April, nineteen hundred and forty-seven, the rights attached to any issued shares
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    of a body corporate included any right of priority as respects capital for a sum in excess of the nominal amount of the shares (not being, in the case of redeemable preference shares, a right only to a premium on redemption), and by virtue of that right a sum in excess of the said nominal amount is paid in respect of the shares, then for the purposes of subsection (1) of this section or of subsection (1) of section thirty-five of the Finance Act, 1947, those shares shall be taken as being of a nominal amount equal to the sum so paid but for the purposes of subsection (1) of the said section thirty-five the excess of that sum over the nominal amount of the shares shall, if those or any other shares were or are issued by the body corporate at a premium for cash, be deducted from the amounts of the premiums:
    Provided that, where the rights as respects capital attached to the shares are or have been varied on or after the said sixteenth day of April, this subsection shall not apply so as to treat them as being of a nominal amount greater than the least amount for which a right of priority shall have attached thereto on that day or at any time subsequently.—[Sir E. Boyle.]

    Clause 31.—(ACCEPTANCE OF WORKS OF ART IN SATISFACTION OF DEATH DUTIES, AND AMENDMENT AS TO EXEMPTION.)
    7.30 p.m.
    Mr. H. Brooke: I beg to move, in page 44, line 14, after "merit", to insert "or historical value".
    We now move rather swiftly from the Universal Grinding Wheel Company to works of art which the Inland Revenue may accept in satisfaction of Estate Duty. About 3 o'clock in the morning of 13th June, we were discussing Clause 31 and I promised to give careful and sympathetic consideration to the points raised in an Amendment moved by the hon. Member for Stechford (Mr. Roy Jenkins). As a result of that, I hope that the House will be happy to know that the Government are bringing forward an Amendment in almost the same words as his.
    In brief, the point is this. The Clause as drafted would cover only works of art of an aesthetic merit. It was pointed out that there might be important works of which it could hardly be truthfully said that they had an aesthetic merit, although they were of great historical interest. I am not sure whether someone mentioned the Bayeux tapestry. There is no question whatever about the historical value or interest of the Bayeux tapestry, but it might well be open to question whether it was a work of art of aesthetic merit.

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    No one is offering the Bayeux tapestry to the Inland Revene, but I thought that that was the most striking example I could quote, which would be known to everyone. The Government now propose to meet this and to provide that the test shall not only be one of aesthetic merit but, alternatively, of historic value. I hope that in that way we have shown our open-mindedness and acceded to what appeared, at 3 o'clock in the morning at any rate, to be the general wish of the Committee.
    Mr. Gordon Walker: I think that the right hon. Gentleman was putting his remarks on that occasion in the early morning in rather a favourable light. He produced one argument after another against our Amendment, but, none the less, we are very glad that, in the clear light of the afternoon, he has come to a different decision.
    We cannot allow this to pass without saying that this is the only contribution to the Bill, or, shall I say, "non-Brixton" contribution to the Bill that has come from this side of the House. I think that I am right in saying that all the others came from my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton), who has written two new Clauses into the Bill. If we were in the United States, it would be called the "Macmillan-Lipton Bill." This is a matter of some slight significance, and we have great pleasure in thanking the right hon. Gentleman and his right hon. Friend for this sensible concession which they have made.
    Amendment agreed to.

    Second Schedule.—(OFFICES AND EMPLOYMENTS (PROVISIONS APPLICABLE TO CASES I, II AND III OF SCHEDULE E).)
    Mr. H. Brooke: I beg to move, in page 54, line 22, at the end to insert:
    5. Where an office or employment is in substance one of which the duties fall in the year of assessment to be performed outside the United Kingdom, then for the purposes of Cases I and II (including the purposes of this Schedule so far as it relates to those Cases), there shall be treated as so performed any duties performed in the United Kingdom the performance of which is merely incidental to the performance of the other duties outside the United Kingdom.
    I need say very little about this Amendment, because it meets the point which was raised by my hon. Friend
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    the Member for Wimbledon (Mr. Black) in Committee.
    We inserted words similar to these in Clause 11 of the Bill yesterday. The effect of this Amendment, although we are actually amending the Schedule, is to provide similarly for Clause 10 of the Bill. It was originally on Clause 10 that my hon. Friend raised this point. It is a question of the interpretation of the word "wholly", if, in fact, there are some incidental duties that are performed in the United Kingdom. I think that the form of words which we have now found will satisfactorily meet that case.
    Amendment agreed to.
    Further Amendments made: In line 24, leave out "the last foregoing paragraph" and insert:
    "this Schedule so far as it relates to those Cases".
    In line 41, leave out from first "of" to "as" in line 42, and insert:
    "this Schedule so far as it relates to those Cases)".

    Third Schedule.—(PROFITS TAX (PROVISIONS CONSEQUENTIAL ON CHANGE OF RATE OF TAX OR OF RELIEF FOR NON-DISTRIBUTION.)
    Mr. H. Brooke: I beg to move in page 58, line 42, at the end to add:
    6.—

    (1) Where the dividends of a body corporate, unincorporated society or other body which are assignable to any accounting period beginning before the end of October, nineteen hundred and fifty-five, and were declared before the seventeenth day of April, nineteen hundred and fifty-six,—

    (a) exceed the governing total for that accounting period; and

    (b) include dividends declared after the twenty-fifth day of the said month of October, and paid after the beginning of the said month of April;

    then, notwithstanding anything in paragraph 4 of the Second Schedule to the Finance (No. 2) Act, 1955, the dividends so declared and paid (if the body or society so elects) shall to the extent of the excess—

    (i) in determining the gross relevant distributions to proprietors for the chargeable accounting period ending at the end of March, nineteen hundred and fifty-six, be included as a distribution for that chargeable accounting period; and

    (ii) in determining those for any other chargeable accounting period, be left out of account.

    (2) Sub-paragraphs (2) to (5) of the said paragraph 4 (which define "the governing total" and other expressions) shall apply for the purposes of this paragraph as they apply for the purposes of that.

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    This Amendment deals with a matter of almost inscrutable complexity, but I hope, in a very few words, to be able to make the point sufficiently clear to the House. It follows from the fact that the Profits Tax on distributed profits has twice been increased within a comparatively short time. In this Profits Tax legislation we have the concept of excess dividends, and if this Amendment were not made there would be an anomaly in that excess dividends declared before this year's Budget day for periods beginning before the end of October, 1955, would be treated differently according to whether they were paid before or after the beginning of April, 1956.
    If they happened to be paid before the beginning of April, the excess dividend would be taxable at 27½ per cent., and if they were paid after the end of March, the excess would be taxable at 30 per cent. When the dividend was declared it must have been before the Budget day and the company could have no knowledge of the likelihood of the Profits Tax being altered. It seems that this is a clear anomaly. Our attention was drawn to it by a Clause put down in Committee, but not selected, by my hon. Friend the Member for Langstone (Mr. Stevens). I would stress again that this only affects dividends declared before Budget day. There can he no loophole here at all, and I think that it is desirable, if I have made the position sufficiently clear—I do not know whether I have—that in the general interest that the anomaly should be removed.
    Mr. Mitchison: That seems both complicated and reasonable. I would merely add that I hope the right hon. Gentleman and his hon. Friends read the unselected Amendments of the Opposition with the same care as that which they have apparently directed to the unselected Amendments of their hon. Friends. They will learn much from the former class.
    Amendment agreed to.

    Fourth Schedule.—(REPEALS.)
    Mr. H. Brooke: I beg to move, in page 60, line 45, at the end, to insert:

    15 & 16 Geo. 6, and 1 Eliz. 2, c. 44.

    The Customs and Excise Act, 1952.

    In section one hundred and forty-nine, in subsection (6), paragraphs (c) and (d) and the proviso.

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    This Amendment is consequential on what I hope I may be permitted to describe as one of the "Lipton Amendments."
    Amendment agreed to.
    Bill to be read the Third time Tomorrow and to be printed. [Bill No. 163.]

    PUBLIC WORKS LOANS BILL
    Considered in Committee.
    [Sir RHYS HOPKIN MORRIS in the Chair]

    Clause 1.—(GRANTS FOR PUBLIC WORKS.)
    7.43 p.m.
    Mr. Emrys Hughes: I beg to move, in page 1, line 7, after "Commissioners", to insert:
    "at rates of interest not exceeding two and a half per cent.".
    This Amendment is in the names of myself, my hon. Friend the Member for Edinburgh, East (Mr. Willis) and my hon. Friend the Member for Fife, West (Mr. Hamilton). All three of us represent Scottish constituencies, but we believe this to be an Amendment which should receive the support of hon. Members representing constituencies in all parts of the country, including hon. Gentlemen opposite. I hope that before the debate ends we shall have a representative present from the Scottish Office, because this is a matter of grave concern to local authorities in Scotland. When the Bill was under consideration last Friday, there was considerable comment on the fact that although we have five Scottish Ministers, not one of them was present to explain the interests of Scotland.
    The rate of interest of the Public Works Loan Board is the subject of discussion at practically every meeting of every local authority in Scotland at present. During the last twelve months hon. Members on both sides of the Committee have received protests from county councils and town councils, and have been called upon to exert the utmost pressure on the Government to reduce the rates of interest of the Board. This is our opportunity. Every local authority in Ayrshire has passed resolutions calling on the Government to reduce the rates of interest. These rates, which affect housing, education, public health

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    and a variety of local government responsibilities, act as a sanction upon local government borrowing and expenditure.
    In this Clause the Government agree to the lending to local authorities of a sum of £300 million. There is no doubt that that will be wise expenditure, because it will have received the sanction of the Minister and the support of the Treasury. Since the previous Bill of this kind came before the House the rate of interest has gone up 1½ per cent., and last Friday we had the extraordinary spectacle of a Minister introducing this Bill without making the slightest reference to the rates of interest. It was not only a case of Hamlet without the Prince of Denmark, but of Hamlet without the five acts.
    Mr. Ede: Or the gravedigger.
    Mr. Hughes: Or the gravedigger.
    I suggest that the Committee would be doing a service to all these local authorities if this very reasonable Amendment were accepted, and the rates of interest reduced. I am prepared to be very reasonable with the Minister. If he would suggest 2½ per cent. or 3 per cent. or 2¾ per cent., hon. Members representing Scottish constituencies would be prepared to accept that as a sort of compromise. Here is an opportunity for the Minister to show that he is not enemy No. 1 of the local authorities.
    Mr. E. G. Willis: But he is.
    Mr. Hughes: In default of the other Ministers for Scotland, he is enemy No. 1.
    In the debate on Friday it was pointed out that the addition of per 1½ cent. on a £1,700 house worked out at a rent of 8s. 7d. per week; and during discussions in the Scottish Standing Committee this week it was agreed that if we were arguing on a figure of 10s. a week, that would be quite a reasonable calculation. So we suggest that if the Minister wishes to reduce rents, this is an opportunity for him to show his practical sympathy. On Friday the Minister argued that local authorities must be prepared to do their share in contributing to economy. But it is a false economy to lend to local authorities at prohibitive rates. If we increase
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    the rate of interest on housing and rents and rates, we make it impossible not only for local authorities to supply housing at reasonable rents, but indirectly——
    The Deputy-Chairman: Order. The hon. Member must remember that this is a machinery Bill. He cannot go into the reasons for reducing interest rates.
    Mr. Charles Pannell: On a point of order, Sir Rhys. I have taken an interest in this Bill over a number of years, and I wish to put this point to you. In previous years it has been allowed that the effect of the machinery on local government is a factor in these debates. I must draw your attention to this, because it so happens that this Bill was almost the first Measure to come forward after the change of Government in 1951, when interest rates were raised. I have made speeches on this matter almost every year, and I say with respect that the rules of order have never been so tightly drawn as you are now attempting to draw them.
    The Deputy-Chairman: I think that the hon. Gentleman is quite right about the debate in 1951, but I venture to say that the discussion on that occasion was out of order.
    Mr. Willis: This is an Amendment suggesting that money should be lent at a certain rate of interest. Surely, it is in order to give the reason why we suggest that this money should be lent at that rate of interest.
    The Deputy-Chairman: It might be touched upon, but hon. Members cannot discuss the reasons, because the Bill is purely a machinery Bill.
    Mr. G. R. Mitchison: Further to the point of order. The question of the rate of interest was extensively touched upon during the Second Reading. It was made clear at the time that this was a machinery Bill. I am looking through the HANSARD of 6th July, and I see repeated references to the rates of interest, but no rebuke from Mr. Speaker.
    The Deputy-Chairman: That was a Second Reading debate, as the hon. and learned Gentleman knows.
    Mr. Arthur Blenkinsop: Further to the point of order. I have with me reports of the debates on the previous Bill, when it was

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    in Committee, and it is clear that the widest scope was allowed. This was not in 1951, but last year. A reasonable latitude seemed to be allowed on that occasion, and, I venture to suggest, might be allowed now.
    The Deputy-Chairman: It is against the rules of order on a machinery Bill to go into the detailed reasons. That is clear.
    Mr. Hughes: I bow to your Ruling, Sir Rhys. Of course, this is a machinery Bill, and we are suggesting something to oil the machinery. The present cost of the oil makes a difference to the working of the machinery. The Amendment would lower the rates of interest, and the machinery would promptly begin to work more smoothly.
    I understand the position. I have made what I consider to be the main points in favour of the Amendment. The Minister who represents the Treasury is in a generous mood. He has done an extraordinary thing; he paid a tribute to my hon. and gallant Friend the Member for Brixton (Lieut-Colonel Lipton) such as my hon. and gallant Friend does not often receive. The right hon. Gentleman has gladdened the heart of my hon. and gallant Friend the Member for Brixton. By accepting the Amendment he could gladden the hearts of local authorities throughout the country. If he wants to figure as the hero of today's proceedings in the Committee of the House of Commons, and wants his photograph to be put up in every town hall in the country, including every municipal building in Scotland, all he has to do is to accept the Amendment.
    Mr. Willis: I support the Amendment. It is important that the Government should look very carefully at what is happening to the money loaned by the Public Works Loan Board.
    When the Minister introduced the Bill last Friday he told us that of the money loaned out of the authorisation of £500 million, namely, about £402 million, about £283 million had been spent on housing. If we are to take that as the general pattern of the spending of money borrowed by local authorities from the Board, most of the sum that we are now authorising will also be spent on housing. There can be no doubt that because of
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    the present interest rate the cost of housing has become so excessive that many local authorities cannot afford to have a housing programme. The Amendment would reduce the cost of housing.
    My hon. Friend the Member for Leith (Mr. Hoy) asked a Question some time ago and elicited the amazing fact that a local authority pays in interest more than twice the cost of the house it builds. Nobody can contemplate that fact without realising the fantastic situation at which we have arrived. A burden of debt is placed upon citizens for generations, for 60 years. We and our children might not see the end of it.
    Our Amendment is quite modest. All it asks is that the rate of interest on this money should be not more than 2½ per cent. Replying to the debate on Friday last, the right hon. Gentleman showed why he could not see his way clear to do anything about this matter. As I understand, the argument was that this concession would represent a concealed subsidy to local authorities. He did not say that the Government were opposed to a subsidy. He said of my hon. Friend the Member for Widnes (Mr. MacColl):
    "What he was, in fact, appealing for was a system of concealed subsidies to local authorities by enabling them to borrow at a rate of interest which was neither the market rate nor the Public Works Loan Board rate as now calculated, but Government credit itself. That is not our view of the way in which local authorities should be assisted by the central Government. We consider that such assistance should be done openly from Exchequer grants rather than by any concealed subsidies."—[OFFICAL REPORT, 6th July, 1956; Vol. 555, c. 1758]
    All right; is the right hon. Gentleman prepared to give local authorities grants to meet this cost?
    What is the purpose of the present high rate of interest? As I understand from Government spokesmen, from the Chancellor of the Exchequer downwards, it is that we must decrease capital expenditure. The Government have an immense machine to control the expenditure of local authorities without touching interest rates at all. A local authority cannot erect a small lavatory in a school playground, or put up a bus shelter, without going to the Government for permission. Over and over again local authorities have been frustrated because of that situation, often in respect of very trivial expenditure indeed.

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    If the Government have this vast machinery for curtailing and curbing extravagance by local authorities, and for compelling them to conform to Government policy, why should the local authorities have to pay the present exorbitant interest rates in addition? What really happens as a result of the policy, that we are seeking to alter by means of the Amendment, is that the Government are curtailing the expenditure and the use of materials by the local authorities by placing an intolerable burden upon the citizens for the future. That seems to be very wrong indeed.
    We suggest modestly that the rate of interest should not exceed 2½ per cent. If the Government are generous they can even lower that figure. The local authorities would be very pleased. Hon. Members have received many letters from constituents and from local authorities protesting against the interest rates. Many of the local authorities are good supporters of the Government.
    Mr. Cyril Bence: They used to be.
    Mr. Willis: Yes, but perhaps they are being weaned.
    Why should not the Government give this relief to local authorities? There would be an argument if the Government had only this weapon of controlling the expenditure of local authorities, but in view of the vast machinery to which I have referred there is certainly no case, and there will be an intolerable burden on local authorities. In the interests of good government, and of the citizens as a whole, I suggest that the right hon. Gentleman consider very seriously the very modest proposal that we are making.
    8.0 p.m.
    Mr. Bence: I am amazed when I hear some of the words used here in dealing with financial questions. Last Friday, I heard the right hon. Gentleman say that this was a grant to local authorities of a maximum of £400 million from Government credit. I presume that meant that out of the credit of the Government local authorities would be entitled, during the next year, to draw up to £400 million credit.
    The Government represent the State, so that is the credit of the State, yet in the
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    next breath the Government say that they have to borrow credit from someone else. In borrowing from some other institution they have to pay 4½ per cent. or 5 per cent. and, therefore, they charge the local authorities more for the credit of the State because they cannot use their own credit and have to go to someone else for it.
    We are faced with an astonishing situation. My hon. Friend the Member for Edinburgh, East (Mr. Willis) rightly said that we have a form of physical control. Because we do not use physical control we use the Bank Rate and financial sanctions to control credit. Here we have an instrument of physical control over the dispensation of credit.
    Mr. Willis: Fiscal control.
    Mr. Bence: This is machinery and, as an engineer, I say that it is physical control. We are not only using fiscal policy on an open market to put up intererest rates to avoid using physical control by Government, but are using both methods in the same instance. If we have a machinery Bill to see that local authorities do not get too much money the interest rates are put up to serve the same purpose. This seems to me to be stupid. It is like having a form of conscription to make a man do a job and, at the same time, rewarding him with the incentives we have under a voluntary system. This seems to me a complete contradiction.
    Another thing which astonishes me is that we have a banking system which, through a great institution, creates credit and lends it. I cannot understand why the Government do not create their own credit. The bank lends credit which goes into commercial enterprise which is not used philanthropically or for social purposes. Here we are using credit for essential social purposes. In using it for those social purposes, why should we be tied down to financial techniques or principles of interest and usury for commercial dealings? In running the Army, the Navy and the Air Force and supplying troops we do not use commercial principles——
    The Deputy-Chairman: The hon. Member for Edinburgh, East (Mr. Willis) succeeded in keeping in order in his

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    speech. I hope that the hon. Member for Dunbartonshire, East (Mr. Bence) will follow his example.
    Mr. Bence: I am sorry, Sir Rhys. I am always ready to recognise that I am not able to cultivate the ability of my hon. Friend the Member for Edinburgh, East (Mr. Willis) or my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) to keep in order so well. I do my best, but it seems that I never succeed.
    When local authorities build houses or do other social work they confine their activity purely to the social field, but the Government insist on them using the commercial technique of interest rates. When they appreciate that it is almost impossible for local authorities to work under those conditions they set up machinery of a fiscal character and arrange a subsidy. Why not start, by eliminating commercial practice? We could then avoid all the staff needed for working our subsidies. I am amazed that each year we have a Bill of this kind and leave the question open as to whatever will be the condition of the money market at that time.
    Time and again we have pleas from farmers who want to know what we are doing about the long-term programme for agriculture. What are we doing about the long-term programme for local authorities? What is the use of telling them that this is a machinery Bill, assuring them of £400 million credit? For the famous burgh of Kirkintilloch it is no use saying that it can borrow £400 million; the burgh wants to know how much that will cost. For years I have mentioned the Kirkintilloch sewerage scheme——
    The Deputy-Chairman: I hope that the hon. Member is not going to mention it again.
    Mr. Bence: It is no use local authorities undertaking schemes unless they know what the interest rates will be. If local authorities do not undertake those schemes next year we shall have £200 million or £300 million left over. Is that the Government's objective? [Laughter.] My hon. Friends seem to treat this matter facetiously, but it is a very serious matter. In the County of Dunbarton every year the rates have been going up——
    The Deputy-Chairman: So long as the hon. Member keeps to the Amendment that will be all right. He must take other
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    occasions for raising other important matters.
    Mr. Bence: This is very serious indeed, because every increase in the rates in Dunbartonshire is due to the progressive increases in interest rates which we have to pay for all the things we have to do. We are expected to do those things; the Scottish Office expects us to do them and the Government expect us to do them. That pushes the rates sky high. It is important when we have machinery Bills like this that there should be written into them every year exactly what the interest rates will be for the ensuing year. Then the local authorities would know and the poor ratepayers would know exactly what they had to pay.
    I make this plea, although I do not suppose that the Treasury will listen. I hope to see the day when local authorities may use credit created by the Government and not borrowed from private institutions lending credit which, in fact, is the credit of the whole nation and charging interest on that credit which they hand to the right hon. Gentleman to hand on to local authorities, who have to pay interest on the nation's credit.
    I hope that I have not gone too far out of order. I also hope that when the right hon. Gentleman prepares a Bill next year he will put into the machinery some of the oil about which my hon. Friend the Member for South Ayrshire spoke. As an engineer, I know that the finest machinery in the world will not work unless it is oiled properly. If it lacks oil it will seize up.
    Mr. A. Blenkinsop: The Government have on many occasions, in the House, declared that one of their main anxieties is to secure stable prices, and indeed, as we recognise in their negotiations with industry and in their discussions with the trade union movement, they have emphasised that they expect the trade union movement, for example, to restrain its members from making new wage demands, on the assumption that prices will, as far as possible, be held on the plateau which the Chancellor of the Exchequer has discussed on several occasions.
    It seems to me that this Amendment will help the Government and the Chancellor to achieve these very aims, and that is why I feel sure that the Financial

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    Secretary, when he replies, will express his sympathy with it. I hope that he will even be able to express more than his sympathy—the Government's welcome and support for the Amendment. In fact, what my hon. Friends have very rightly pointed out, not only today but on many previous occasions, is that the main villian in the piece, so far as rising prices and increased wage demands are concerned, is indeed this very matter of interest rates. Here, we have a proposal which seeks, very properly, to reduce interest rates to a moderate figure, which would have the immediate, or at least the very early effect of reducing costs in the country, on housing and health services, etc., in the expenditure incurred both by public authorities, statutory authorities and the State itself.
    I wish to give one example, because this matter of interest rates very seriously affects the whole of our economy and the whole of the social services which are an important part of it. We have rightly had stressed in this House the importance of making proper provision in the health field for those elderly persons who tend to have to be accommodated in hospital. My own local authority is about to seek permission to borrow sums of money for the purpose, amongst others, of constructing a new home for the elderly infirm at the request of the Government, and the problem of my own local authority, and of course of many others all over the country, in considering this matter—we have not yet got the loan sanction for the scheme—is that, when it receives it, this very much higher rate of interest than was current even a year ago, will have to be paid. If this Amendment were accepted, it would, in the instance which I have quoted, mean that the local authority would have to pay less in interest charges for this sum of money which it wants to raise.
    The sum of £60,000 is required as part of the general borrowing requirements of the local authority of which I am speaking, and it is clear that a very considerable difference would be made if the Amendment was accepted. It would be possible for my own local authority to borrow from the Public Works Loan Board at this more moderate and reasonable rate of 2½ per cent., instead of having to borrow at a rate of over 5 per cent. if it has to get the money by going either
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    into the open market or by borrowing through the Public Works Loan Board at the rates of interest that are current today.
    I suggest that here is a practical example of a local authority faced with these unnecessarily high interest rates, which inevitably it has to take into account in deciding whether to go forward with this vital scheme for the care of our old people in Newcastle. I suggest to the Government that here we have a case in which it might well be that because of the high interest rates, the local authority may feel itself unable to go forward with this particular scheme. If so, what will be the result? The result will not be to the satisfaction of hon. Gentlemen opposite, but will be seen in extra pressure on hospital accommodation and increased expenditure there.
    The Deputy-Chairman: The hon. Member has so far kept very well in order, but he is now reaching the limits.
    8.15 p.m.
    Mr. Blenkinsop: I shall make haste to come back fully within the rules of order in that case, but I was merely using that example as an illustration of the value of this Amendment to the Exchequer as well as to the local authority, because it will result in an economy for both, as well as for the country as a whole.
    It would mean that the State itself would not be required to make as large a contribution out of Exchequer funds which is inevitably involved when interest rates rise. We know, for example, that the Exchequer has inflicted upon itself some further hundreds of millions of pounds a year in extra expenditure on these high interest rates, which year by year have been increased. This Amendment would provide, in effect, for a reduction of these charges, and the effect of the acceptance of the Amendment would be that the Government would be obliged to reconsider their general Bank Rate provisions. That is beyond the scope of this Amendment, but there is no doubt that that would be the effect in practice of the acceptance of the Amendment. It would mean a very considerable saving to the local authorities and to the Exchequer itself.
    As my hon. Friends have so rightly pointed out, it is not as though the Government have no other means of defence against what they may feel to be the

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    excessive use of capital for investment expenditure. They have within their grasp, if they wish to use them—and it is obvious, for there has been plenty of evidence—physical means of restriction, and therefore there is no reason at all why the Financial Secretary should not welcome this Amendment with open arms. I do not know whether that would be the right term to use in regard to the right hon. Gentleman, who accepts his duties in a very stern and rigorous manner. Perhaps it would not be proper to suggest that he would welcome the Amendment with open arms.
    The right hon. Gentleman should, however, recognise the force in the argument which has been advanced. When the Chancellor of the Exchequer and other members of the Government are pressing for the restriction of expenditure and are calling upon local authorities to restrain their demands, and yet, at the same time, by their actions are forcing up the cost of the work which local authorities are obliged to undertake, and when in fact they are obliged to contribute more from their own funds to meet those high charges, it is a mad circle into which the local authorities are being forced.
    It seems to me that my hon. Friends who tabled this Amendment are suggesting to the Government a means by which they can bridge the difficulty, with benefit to the Government, to the country and to everyone. It would also give the working people in the country some earnest that the Government themselves really wish to see reductions in the cost of services that are vital to the community, instead of talking about it and yet taking the very action most likely to raise those costs and to precipitate natural and proper demands for wage increases.
    Mr. A. E. Cooper: This is really nonsense. For the last half hour we have been listening to the economics of Alice in Wonderland and watching hon. Gentlemen opposite performing the unique exercise of speaking with the tongue in both cheeks at once.
    Mr. John Rankin: Try it.
    Mr. Cooper: The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) really ought not to make the sort of speech he has made. He was at one time Parliamentary Secretary to the
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    Ministry of Housing and Local Government.
    Sir Frederick Messer: No.
    Mr. David Jones: Perhaps the hon. Member for Ilford, South (Mr. Cooper) was not here then?
    Mr. Cooper: He was the Parliamentary Secretary to the Ministry of Health, which was responsible for local government in those days, and it was his right hon. Friend the Member for Ebbw Vale (Mr. Bevan) who put up the interest rates—[HON. MEMBERS: "To what?"]—it does not matter—from 2½ per cent., which is the rate suggested by the Amendment. Yet the right hon. Gentleman put the rates up from that figure. Why was that figure of 2½ per cent. wrong at that time? It was wrong at that time because it was releasing far too many resources and bringing about inflation.
    Mr. Blenkinsop rose——
    The Deputy-Chairman: Order. This argument is beyond the scope of the Amendment. The hon. Member for Ilford, South (Mr. Cooper) is carrying it too far. It cannot be pursued any farther.
    Mr. Rankin: Surely, Sir Rhys, when a charge is made it ought either to be substantiated or withdrawn.
    The Deputy-Chairman: I cannot say, before I hear a charge, whether it is in order or not. I have to hear it first.
    Mr. Blenkinsop: As the hon. Member gave way to me for an intervention, may I ask, as this is strictly relevant to the Amendment, whether he is suggesting that it does not matter at all whether the interest rate be 3 per cent. or 5½ per cent.? I can assure him that the local authorities feel that it makes a good deal of difference.
    Mr. Cooper: I am not suggesting anything of the sort.
    This Amendment states that the rate of interest to be charged to local authorities should be 2½ per cent. I am suggesting—indeed, I am stating—that the hon. Member for Newcastle-upon-Tyne, East, when he was Parliamentary Secretary to the Ministry of Health in the Labour Government, put up the interest rates from the figure which is now suggested in the Opposition Amendment.
    The Deputy-Chairman: That is not in order on this Amendment.
    Mr. Blenkinsop: Do I understand the hon. Member to say that he would support the Amendment were the figure 3 per cent. rather than 2½ per cent.?
    Mr. Cooper: I am not suggesting anything of the sort. It is not for me to suggest anything of the sort. I am merely pointing out that hon. Gentlemen opposite are quite prepared to say one thing when they are in Opposition and to do something quite contrary when they are in office.
    The hon. Gentleman talked about the Government having in their hands powers like physical controls to settle all that the interest rates themselves do. Of course, that is true, but the point is that by the imposition of interest rates, at varying levels, the local authorities themselves know what their borrowing will cost, and they have control of the priorities for the work which they themselves seek to do.
    Mr. Willis: Surely, if the Amendment were carried the same position would prevail, and the local authorities would be in exactly the same position?
    Mr. Cooper: That, of course, would be the position, with this difference, that with 2½ per cent. no local authority would find it necessary to exercise any sort of control over its expenditure. That is precisely why, between 1945 and 1950, the Labour Government found it necessary to devalue the £. We believe that financial controls are essential. They constitute one reason for our certainty that we shall now defend the £.
    Mr. Tom Brown: It is rather remarkable that I should have the opportunity to follow the hon. Member for Ilford, South (Mr. Cooper), because I had something to say in criticism of his last speech in the House and I have even more criticism to make now. If what he has been pouring forth is his economics, I cannot understand them. If the hon. Member has had any experience of local government, whether at urban, rural or county level, I cannot understand how he could make such statements as he has made tonight.
    There is a straight question I want to put to the Government, and it is this. Is it their intention to help local authorities, or is it their intention to hinder the work
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    of the local authorities? If they intend to help the local authorities in the difficulties confronting them, they are bound to accept this Amendment. The Financial Secretary to the Treasury has had a great deal of experience on the London County Council. He knows full well that when the London County Council embarked upon a scheme of improvement or expansion it always desired to borrow money at the lowest possible interest rate. That was the policy it always followed.
    My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) has said already that county councils and urban authorities throughout the country are all complaining about the difficulties in which they are finding themselves because of the high rate of interest they have to pay upon borrowed money. I suggest to the Financial Secretary that it would be as well if he examined the position in relation to the conditions of those local authorities, for be it remembered that the local authorities have been facing considerable difficulties during the last eleven years.
    They faced those difficulties with considerable courage. They have done a magnificent job because of the demands made upon them by the people, who had been too long satisfied with conditions as they were. The demand is going forth, quite rightly, for improved roadways and other amenities——
    8.30 p.m.
    The Deputy-Chairman: If the hon. Member will keep to the rate of interest he will be in order.
    Mr. Brown: I know that it has been indicated that we are skating on very thin ice, but those of us who have had experience in local administration feel very keenly about this. I hope that you will not rule me out of order, Sir Rhys, if I recall that last Wednesday a very gloomy and dark picture was painted in the House of the country from which you come, when we discussed Mid-Wales and Monmouthshire.
    I will not pursue that any further, however. I rose to call the attention of the Financial Secretary to the position of two local authorities in my constituency, Ashton-in-Makerfield and Ince-in-Makerfield, where we are now faced with the problem of land subsidence and having to construct a complete sewerage scheme, involving an expenditure of £200,000 to

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    £300,000. The difficulties will be intensified unless the right hon. Gentleman is prepared to give some consideration to the Amendment. I beg him to do so in order that these local authorities may not be hindered but helped by the Government to do work which is so essential for the citizens whom they govern.
    Mr. C. W. Gibson: I hope that the Government will seriously consider accepting the Amendment because, whilst this is a Bill to provide an extra £300 million in loans to local and other authorities for public work purposes, it is really absurd to tell the authorities that they can borrow more money whilst at the same time charging such high rates of interest that, to carry out any scheme at all, becomes utterly impossible.
    We are supported in this contention by such an august journal as the Financial Times, which said on 16th March:
    "The situation as far as mortgage loans are concerned is one of considerable difficulty. Money is far from plentiful and lenders are naturally seeking the highest possible rates for the longest possible periods. Rates of 5⅞ per cent. to 6 per cent. are being asked for the shorter period mortgages and 5⅜ per cent. to 5½ per cent. for terms up to 25 years."
    Anybody who has had anything at all to do with local government capital expenditure knows that today an interest rate of 5½ per cent. and more makes it completely impossible for local authorities to carry out their job effectively. The Amendment to fix a lower rate of interest would help the Government's overall policy of reducing capital expenditure.
    I can give one illustration from the constituency of my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton), where there is a large housing scheme. The tender cost was £2¾ million two years ago. The housing committee chairman reported that by the time the authority has paid the interest on capital borrowed from the Public Works Loan Board it will have paid £6¼ million. [HON. MEMBERS: "Shame."] Since then, the rate of interest has gone up by more than 1 per cent. so that the extra charge, either on the rents or the rates, will probably be many hundreds of thousands more for that one scheme alone. Therefore, when one considers all the housing schemes of large local authorities, such as Birmingham and Manchester, the interest charge at the present figure becomes a serious burden.
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    I should have thought that a Government anxious to encourage slum clearance would have been prepared to allow local authorities to borrow some of this £300 million at a rate of interest which would enable them not only to pull slum property down but afterwards to let houses at rents which the people could afford to pay. At the moment, that is not the case. Only last week three instances were reported in the newspapers of the serious effect of the present high rate of interest which is being charged to local authorities.
    In Lewisham, the council has decided not to go on with an eight-acre slum clearance scheme because it says that the present financial policy of the Government has made that impossible. The Deptford Borough Council announced in the Press last week that, owing to the difficulties caused by interest charges plus the virtual abolition of the subsidy, it would not be able to continue house building in its borough. That is in the middle of London, where there is a terrific housing shortage, and this council would do its utmost not to stop building; but, owing to the financial policy of the Government and especially because of the high rates of interest now being charged, it has had to make this decision.
    Mr. D. Jones: Will my hon. Friend explain whether it is necessary to get the sanction of the Ministry of Housing and Local Government before a local authority can borrow from the Public Works Loan Board? Would not that be a sufficient guarantee?
    Mr. Gibson: I do not know whether to deal with that would be in order—
    The Deputy-Chairman: In my opinion, no; it is very far out of order.
    Mr. Gibson: It is true that this is a machinery Bill, but the point that I am trying to make is that there is strong justification for this Amendment. In fact it will help the policy of the Government by reducing the overall expenditure, if that is what they want, though I do not think the Government are going the right way to produce the results which they want.
    What is more, a reduction of the present high rate of interest to 2½ per cent. would practically solve all the

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    present financial troubles of local government. It would enable local authorities to let their houses and flats at reasonable rents which tenants could afford to pay, as well as enabling the authorities to do many other things. For instance, I have been today to the opening of a new park in London. I was told by the chairman of the housing committee that as a result of the financial policy which it is now necessary to follow, nearly half of that authority's schemes for park improvements in the next year have been stopped. And yet a Minister who spent several years on the London County Council is criticising my colleagues and myself because we were not doing enough for the parks of London.
    The Deputy-Chairman: This is going beyond the Amendment.
    Mr. Mitchison: On a point of order, Sir Rhys. What we have to consider, in relation to the Amendment, is whether there ought to be a fixed rate of interest or a maximum rate of interest, and what it ought to be. On the latter point, at any rate, I submit that it is proper to consider the character of the loans which are to be made; that is to say, whether they are, as in fact the vast majority of them are, loans already approved by the Government, for which Governmental sanction has been given, and the type of expenditure to which the loans are directed. I submit, therefore, that within reason my hon. Friends are in order in saying that these loans are, in the vast majority of cases, as the right hon. Gentleman would at once admit, already sanctioned by the Government and, further, are loans directed to certain public objects of which my hon. Friends may give particulars, within reason, in their constituencies.
    The Deputy-Chairman: The hon. and learned Gentleman has stated the case fairly accurately. Of course the parts of the debate to which I have taken exception have gone well beyond that.
    Mr. Gibson: I apologise to you, Sir Rhys, for allowing myself, in my enthusiasm, to be carried into L.C.C. politics. I was trying to make the point that high rates of interest have a deleterous effect on the work of local authorities.
    This Bill, which provides for an additional £300 million of loans which local
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    authorities can call upon after they have fiddled around in the market, trying to get loans from private lenders, ought to be so framed that the interest rates charged by the Public Works Loan Board should not be penal. They should not be so heavy as to make it impossible effectively to carry out the housing schemes, the road improvements, the park improvements, etc., for which local authorities will borrow this money.
    A low rate of interest might have a tremendous influence on the cost of living. If it reduced rents, it would reduce one of the factors in the build-up of the cost-of-living figures. In that way, it would help the Government out of some of their difficulties. It would also set a standard of interest charges for housing societies and others who lend money for public purposes.
    I am particularly concerned because it seems that as a result of the policy of allowing interest rates to rise—there does not seem to be any chance that the rate will stop at 5½ per cent.—we are preventing the carrying out of projects which the Government say they want done. Slum clearance will stop. Building by housing authorities is stopping. A local authority in Kent which is controlled by a Conservative majority has decided that, owing to the high interest charges, it can no longer lend money for house purchase.
    Therefore, it seems to me that the Amendment is an extremely sensible one, because it will enable the Board to lend money—the Government have complete control over all these schemes, if they care to exercise it—for schemes which will effectively provide happiness and comfort for our people. If we are not here for that purpose, we are not here for anything.
    The Minister ought to give consideration to this matter. It was pointed out a few nights ago that because interest rates have risen five times during the past year the weekly rent of a £2,000 house in London has risen by more than 10s. Somebody has to meet that charge. It can take the form of an increase in the rent, a method which some councils adopt, or it can be put on the rates, and then one has an unholy row with the local ratepayers' association about it. Acceptance of the Amendment would relieve the Government of that trouble at least.

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    Acceptance of the Amendment would also encourage local authorities. I find it difficult to understand how raising interest rates to local authorities on loans for public works of all kinds can make any difference at all to our balance of trade difficulties or our gold and dollar reserves. All it does is to make things more difficult for the people who matter most, those whose labour produces the wealth which the country enjoys.
    Consequently, I support the Amendment with very great fervour, and I hope that the Government will accept it or at least look again at the Alice-in-Wonderland situation of interest rates.
    Mr. James H. Hoy: I support the Amendment. I have for a considerable time been putting Questions to the Secretary of State for Scotland about the effect of the high interest rates on Scottish housing.
    On 6th March I asked the Secretary of State what effect the continual rises in interest rates were having on Scottish local authorities. We were given an astonishing figure. In the case of a £1,500 house built under the Labour Government, the interest charges over a period of 60 years amounted to £1,743, but since the Tory Government came to power, in 1951, interest rates have risen to such an extent that a similar house today carries an interest charge burden of no less than £3,446. Those are the figures given by the Secretary of State for Scotland himself. The interest rate on every single house built at a cost of £1,500 has doubled since the Tory Government came to power.
    8.45 p.m.
    What is the use of the Financial Secretary talking about keeping the cost of living down, or the Chancellor appealing to workers in industry to restrict their demands, if the Government are being so free with the nation's money to the money-lenders? The consequence of that is that every council house tenant in Scotland has already had to pay increases in rent and will have to pay further increases unless something is done to off-set these continually rising charges. If we tackle the interest rate, this intolerable burden which the Government have foisted on local authorities, we shall be going in the right direction.
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    I have a strange ally in the claim for lower interest rates, because on 6th March my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), to whom the Committee is indebted for putting down this Amendment, asked the Secretary of State a similar Question. In the concluding part of his reply, the Secretary of State said:
    "I hope that perhaps, with luck."—
    I agree that he thought that we required a little luck—
    "on the next occasion the interest rates may be reduced, and then the Questions by the hon. Member on the subject may also be reduced."
    When I asked the right hon. Gentleman about these increases he said:
    "As to the second part of the supplementary question, I can only express the hope that the next move in interest rates might perhaps be a downward one, in which case I might perhaps not get this sort of question."—[OFFICIAL REPORT, 6th March, 1956; Vol. 549, c. 1921–2.]
    Mr. Rankin: On a point of order. Is is not most unfortunate that when my hon. Friend the Member for Leith (Mr. Hoy) is dealing with matters of such moment, not a single representative of the Scottish Office is on the Front Bench opposite?
    The Deputy-Chairman: The hon. Member well knows that that is not a point of order.
    Mr. Hoy: What I was hoping to prove to the Committee, and I am certain I have proved to the Financial Secretary to the Treasury, is that the Secretary of State for Scotland has given his sympathetic support to this Amendment. I am a little surprised, now that my hon. Friend has given him this opportunity, that he is not here himself, and has not sent one of his many Under-Secretaries to support the Amendment.
    Mr. George Brown: The Scottish Office is the most overstaffed Department in the Government.
    Mr. Hoy: One can see at a glance what an appalling problem local authorities have. The Treasury has control, because local authorities can spend within this £300 million only if they get permission from the Treasury. The Treasury already exercises control and one would have thought that in the interests of good municipal government that would have been sufficient.

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    However, other authorities may make a claim. For instance, perhaps the Financial Secretary can tell us whether the Independent Television Authority can make a claim on this £300 million and, if so, what rate of interest it will be charged. Will it be the same as for local authority housing purposes? I suggest that the right hon. Gentleman will find that the I.T.A. pays a lower rate of interest.
    The Deputy-Chairman: The hon. Member is now going beyond the Amendment.
    Mr. Hoy: I do not want to get out of order. What I was seeking to do was to find out whether what I was saying about the £300 million was correct, and how the rate of interest which the Treasury charges local authorities for housing purposes compares with its interest rates to commercial television for its lines of business. I do not intend to go beyond that, but what I can claim is that what I have said proves up to the hilt that the intolerable burden which all housing authorities have to carry today is one which, since 1951, has been placed on their shoulders by the present Government. The figures which I have quoted tonight—not my figures, but the figures supplied by the Government themselves—condemn them out of their own months.
    When the Government talk about carrying out a scheme of slum clearance at this time, they know that they are talking, as was said by the hon. Member for Ilford, South (Mr. Cooper), who departed from this Chamber after his one-minute speech, with their tongues in their cheeks. The Financial Secretary, as a leading ex-member of the London County Council, knows what the burden of these interest rates is on local authorities, and, surely, in all decency, he is bound to agree with the case put forward from this side of the Committee tonight. I beg the right hon. Gentleman to give serious consideration to this problem, knowing that my hon. Friend the Member for South Ayrshire will not be too sticky about 2½ per cent. Indeed, he has told me that he is willing to go in the other direction. He says that as a start he will accept 3½ per cent. if the Treasury will announce it tonight. He is prepared to be generous in the matter.
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    It is no use the hon. Member for Wimbledon (Mr. Black), who is the chairman of a building society, saying that the interest rates charged by the Government and foisted on the local authorities have had no repercussions on the people whom he supplies with money with which to build houses. As a consequence, the interest rates are higher now than they were under the Labour Government. Therefore, the hon. Gentleman had better not give us any more of that type of nonsense.
    The Financial Secretary must face up to the high interest rate as it affects local authorities and housing and see that he brings about some reduction in the rate and makes it possible for local authorities to carry out the duties which the central Government places on their shoulders.
    Mr. Ede: This Bill will provide money to be loaned to people other than local authorities. In fact, in some cases, the money will be lent to people whom the right hon. Gentleman the Financial Secretary himself brought into the scheme of things. On 4th April 1944, speaking on the Education Bill of that year, the right hon. Gentleman said:
    "In connection with this Clause I feel rather like a duck that laid an egg and had it taken away from her to be hatched elsewhere, and later unexpectedly met her surprisingly grown-up offspring."—[OFFICIAL REPORT, 4th April, 1944; Vol. 398, c. 1954.]
    I have never thought that the right hon. Gentleman's claim to the invention of that form of loan was justified, but he wants to claim it for himself. Really he must be surprised at the grown-up offspring today because when those loans were inaugurated, to be advanced by the Public Works Loan Board, they were expected to provide interest and repayment of principal for 4½ per cent. Today, interest alone is at least 5½ per cent. The right hon. Gentleman, in those days, used to speak for the Archbishop of Canterbury. After Mr. Willink was brought into the Government the Archbishop of Canterbury selected the right hon. Gentleman as the new acolyte.
    A large sum of money has been borrowed by the Church of England and also by the Roman Catholic Church, and larger sums will have to be borrowed in the near future by the same bodies because of the decision of the Government—rightly, I think—to speed up what is

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    called rural reorganisation. Nothing is more appalling to the people who have to try to raise these sums of money and repay them than to be faced with these continual increases in interest rates. I am a Nonconformist but, together with the hon. Member for Wimbledon (Mr. Black), I am a governor of two Roman Catholic schools in his constituency—the Jesuit College and the Ursuline Convent. [Laughter.] It is not very amusing, especially when one has to meet the reverend mother prioress and she announces that upon the money she wants to borrow to carry on with the work of the school she has to find an additional 1 per cent.
    I mention this because we do not want anybody to think that this is merely a quarrel between the Government and local authorities. A great deal of useful work is done by harbour boards and similar bodies, who have to raise capital in this way and then pay the interest charged upon it. The effect of Government policy in this matter has been seriously to handicap all the people engaged in these beneficient public works. My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) is to be congratulated for putting down the Amendment and so enabling us to have this discussion.
    I hope that the "duck"—I will not say the "duckie"—will tonight recognise the appalling size to which his offspring has grown; in fact, it must now be almost a swan, walking about on the earth. But a swan is graceful only when it is floating on the water. The right hon. Gentleman has made it quite impossible for his swan to float with any comfort to those who are now responsible for its sustenance.
    Mr. H. Brooke: This has indeed become a debate of varied imagery. One and a half hours ago, when the hon. Member for South Ayrshire (Mr. Emrys Hughes) initiated it, he drew what seemed to me to be a somewhat far-fetched comparison with Hamlet without the gravedigger. Had William Shakespeare been sitting beside me, as my right hon. Friend the Member for Stratford, I might have heard him whispering, "Alas, poor Emrys" because I am afraid that I am not going to accept the Amendment. The hon. Member presented me with a frightful dilemma. He said that I had to choose between becoming enemy No. 1 of the local authorities and qualifying to
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    have my photograph put up in every municipal building in Scotland. This is as bad a situation as that of the man who had to choose between the lady and the tiger. On balance, I have great regard for the amenities of Scotland.
    The debate has proceeded upon two fallacies, which have been shared by every speaker, apart from my hon. Friend the Member for Ilford, South (Mr. Cooper). The first fallacy is the supposition that local authorities borrow only from the Public Works Loan Board and that everything can, therefore, be controlled by Clause 1. The truth is that local authorities borrow on their own credit in the market. They have at all times wished for their freedom to do so; they now have their freedom, and since last October it has been Government policy to require all local authorities to seek loans in the open market before admitting them to the facilities of the Board.
    That will certainly remain Government policy, whether or not the Amendment is carried. Consequently, the effect of the Amendment would be to create a most surprising and unwelcome differentiation between the interest rates payable by different local authorities. It will indeed be, as the hon. Member for South Ayrshire said, a matter of very grave concern to local authorities not only in Scotland but elsewhere.
    9.0 p.m.
    A further point which has been taken by one or two hon. Members, but not openly realised by many, is that if the money is to be lent to the local authorities at 2½ per cent. that can only be achieved by a subsidy from the Exchequer, because it is impossible, in present circumstances, for the Exchequer to borrow this money in the open market at a 2½ per cent. rate.
    Mr. Blenkinsop: Would the right hon. Gentleman not agree that I made the suggestion that inevitably this must mean reconsideration of the Government's policy in regard to interest rates?
    Mr. Brooke: That is exactly what I thought was happening today. I thought that a skilful attempt was being made to hang on the peg of this Amendment a debate on the whole economic policy of the Government. I must confess that I was tempted to reply to many of these matters, but I intend, if I can, to keep

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    myself in order and address myself to the methods by which local authorities can borrow.
    I am entitled to say that if the Public Works Loan Board has to lend to local authorities at 2½ per cent. that must be with money from the Local Loans Fund, which itself is fed by the Exchequer, and the Exchequer must provide itself with the money, either by borrowing in the open market—which it cannot do at 2½ per cent.—or by the use of the printing press.
    I think that what would appeal to those hon. Members opposite who talk about the nation creating its own credit, and so forth, is that we should get rid of all the apparatus of the money market, and resort to the printing press and uncontrolled inflation. [HON. MEMBERS: "Nonsense."] Whatever the interpretation may be, the fact remains that loans to local authorities at 2½ per cent. today involve a subsidy from somewhere. It would, in fact, be a subsidy from the Exchequer, that is, the taxpayer, and as a local government man I have listened with interest and some sadness to hon. Members opposite following one another avidly in the pursuit of what I regard as an entirely false idea—that local government will flourish entirely at the expense of the taxpayer.
    On the contrary, I think that a proper balance has to be maintained between the interest of the ratepayer and the interest of the taxpayer, and where the taxpayer comes to the assistance of local government it should be done by an open subsidy, sanctioned by Act of Parliament, and not by the concealment which would be implicit in any method of this kind. There is, I know, a fundamental difference between the two sides of the Committee on this. Hon. Members opposite believe in the feather bedding of local government, as I said on Friday. [HON. MEMBERS: "No."] They have not the same desire that we have, that the local authorities—[Interruption.] I am still proud to be a member of a local authority——
    Mr. T. Brown: Not a feather-bedded one.
    Mr. Brooke: —and I believe in the freedom and responsibility of local authorities. I cannot believe that it is for the long-term good of local authorities
    516
    that they should be artificially insulated from the play of economic forces.
    When the hon. Member for Clapham (Mr. Gibson) says that under present conditions it is utterly impossible for local authorities to carry out any schemes at all, it is obvious that he was not present last Friday when we were discussing the Bill; and when the fact was established that since the new system was operated from October of last year local authorities have been borrowing from the Board at an average rate of £4 million a week. They have certainly been borrowing on a considerable scale from other sources as well.
    Local authorities would not be borrowing this money if they were not finding it possible to carry out schemes of local expenditure.
    Mr. Gibson: I gave three instances which have occurred during the past week of local authorities which have stopped building because they are in difficulties.
    Mr. Brooke: I noticed that the hon. Gentleman gave the case of the Borough of Lewisham which, he says, decided not to go on with slum clearance schemes. I was afraid that things like that would happen when, two months ago, the Borough of Lewisham switched over to Socialist control.
    There is a fundamental objection to this Amendment to which I have not yet referred, and which no hon. Member on either side of the Committee has perceived. This is the second fallacy which I said that I must mention. It is supposed by hon. Members who are supporting this Amendment that, by passing it, they would secure the issue of loans from the Public Works Loan Board to local authorities at rates of interest not exceeding 2½ per cent.—[HON. MEMBERS: "Hear, hear."] Hon. Gentleman say, "Hear, hear", but that is a policy which would not be provided by the Amendment, or by this Clause. It is, and will remain, whatever we do by this Clause, a statutory power of the Treasury to prescribe the rates at which the Public Works Loan Board lends. That is laid down in the Public Works Loans Act, 1897.
    If we adopt this Amendment, the Committee will be cutting off from the Public Works Loan Board the supply of money to lend; because the Board would not be

    517
    able to derive any money from the Local Loans Fund unless it undertook to lend money to local authorities at a rate not exceeding 2½ per cent. In present conditions it would be quite impossible for the Treasury to fix a rate of interest at 2½ per cent. for the Board to lend to local authorities.
    When the hon. Member for South Ayrshire said—as he did—that this was an issue of very grave concern to local authorities, when the hon. Member for Dunbartonshire, East (Mr. Bence) said that a machine could work for some time without adequate oil, but would eventually seize up, both hon. Members were speaking with complete truth. In fact, the hon. Member for Dunbartonshire, East would be cutting off the oil from the machine and the whole work of the Public Works Loan Board would seize up, were this Amendment passed.
    Now that we have had a very pleasant debate for a couple of hours, I should like hon. Members to give serious attention to the points which I have put before them.
    Mr. Mitchison: I was here on Friday. So was the Financial Secretary. What he has been talking about was in some respects discussed then. I shall not repeat what was said, or make a long speech in answer to him.
    Of all the insufficient and unsatisfactory replies, this is about the worst I have ever heard. The right hon. Gentleman went to the trouble of repeating that most unfortunate phrase "featherbedding local authorities". This follows shortly after our debate on the Finance Bill, when the right hon. Gentleman was making tax concessions to people earning between £5,000 and £7,500 a year. It is not a very remarkable idea to suggest for whom and upon what terms he ought to provide satisfactory beds.
    Let us look at the "fallacies". I will deal with the first problem. The right hon. Gentleman referred to uncontrolled inflation. He seems completely to have forgotten—no doubt the Treasury looks at these matters from a somewhat remote fastness—that the question about which we are talking today, the loans made by the Public Works Loan Board to local authorities, are in respect of matters for which in practically every case the authorities already have the sanction of the responsible Minister.
    518
    Therefore, if the inflation is uncontrolled, it is simply because in this as in other matters the Government have no policy. Otherwise those who have to sanction these loans can exercise control at that point. My hon. Friends were perfectly right in saying that the fiscal control being exercised at present by the very high rate of interest charged to local authorities is a wrong and poor substitute for proper control over their policy by the responsible Ministers—in England and Wales the Minister of Housing and Local Government and in Scotland the Secretary of State, who appears not to be in complete agreement with his right hon. Friend on some important financial questions.
    Let me deal very shortly with the second so-called "fallacy". It was rather unworthy of the right hon. Gentleman. He knows perfectly well what we have in mind, which is that there ought to be a maximum rate of interest for the loans made by the Public Works Loan Board, mainly to local authorities. It will follow from that that there will have to be a corresponding change in the rate of interest charged by the Treasury to the Public Works Loan Board. I did not suppose that the right hon. Gentleman would take refuge in that argument and say, "If Parliament carries the Amendment and decides that the right rate of interest is 2½ per cent., the Treasury will not provide any money at that figure". After all, Parliament looks after the money of the country. If the Amendment is carried, the right hon. Gentleman knows that the Government and the Treasury will have to think again. That is the plain and short answer to the second "fallacy".
    I put the matter to the right hon. Gentleman a little more seriously. We ought to be very grateful to my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) and to all my hon. Friends who have followed him. They have spoken in different styles and have made short and pointed speeches. The right hon. Gentleman, as a member of the Government, ought to recognise that this is not just a bit of Parliamentary fun. What he has heard today represents the feelings of local authorities over the country. Behind those local authorities is the feeling of the ratepayers and the rent payers, who are being made to pay

    519
    for the Government's fiscal policy. That is what the right hon. Gentleman has to meet and face up to.
    9.15 p.m.
    I am not going to pick and choose among so many excellent speeches. I thought that each of them showed clearly the reality of what was being put to the right hon. Gentleman. There are two questions involved. The first question is, ought there to be a maximum rate of interest chargeable to local authorities? The second question is, if there ought to be such a maximum, ought it to be 2½ per cent.? I say, as has already been said in this debate, that no one on this side of the Committee wants necessarily to insist on 2½ per cent. If the right hon. Gentleman is prepared to say, "If you will be good enough to withdraw this Amendment, I will, on Report, introduce a suitable Amendment with another maximum rate". I very much doubt whether we would have to trouble the Committee much longer with this matter. The really substantial point is, ought there to be a maximum rate of interest?
    I said to the right hon. Gentleman a few days ago, and say again now, that we are concerned here with vital services. Housing is one, health is one, education is another. If the right hon. Gentleman looks through the list, as I am sure he has done, to note the purposes for which the loans are used, he will see that many minor purposes are covered. All of them relate to things which have to be carried on. We are asking whether we are to expect the rate of interest to continue rising steadily, as it is rising under this Government, or are we to treat the present level as permanent?
    I would remind the right hon. Gentleman that under my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) the rate of interest was 2½ per cent. and it stayed there. Under the late Sir Stafford Cripps the rate of interest for this purpose was 3 per cent. and stayed there. The moment this Government came into office, the rate of interest began to rise. It has continued to rise ever since, and no one knows where it will stop. In those circumstances, we must either expect this state of affairs to be temporary—in which case acceptance
    520
    of the Amendment will do no great harm—or, if high rates of interest are to continue, this or some succeeding Government will have to consider whether they are prepared to make a subsidy—not a hidden subsidy, but a subsidy—to local authorities in the form of the rate of interest charged to them.
    This is no news to the right hon. Gentleman; it is exactly what I said to him on Friday, and I did not say it without deliberation. We on this side of the Committee are considering this question very seriously. We are convinced that we cannot hold up the health, the education, or the housing services of this country by charging local authorities such high rates of interest that they cannot do the work they are required to do, because the rates and ratepayers and the rent payers will not stand it. If local government in this country—and, of course, I include Scotland—is to function properly, the question of these rates of interest will have to be faced in a way which the right hon. Gentleman, by his frivolous answer tonight, discouraged me from thinking he was prepared to face. It just is not good enough. This matter has got to be dealt with more seriously than that.
    The right hon. Gentleman spoke of alternative sources. He knows perfectly well what has been happening. As a result of the policy of the Government, not merely in the last few months, not merely since the change-over to which he referred, the Public Works Loan Board has been failing, to an ever-increasing extent, to do this job and to meet the requirements of local authorities. If he gave it the sort of impetus and help which would be given by a fixed maximum rate of interest—for this purpose I am not tying mself to 2½ per cent.—he would allow it once more to do what it has been failing to do, to meet its public duty of lending money for public purposes to local authorities.
    Mr. William Hamilton: I want to supplement what was said by my hon. Friend the Member for Leith (Mr. Hoy) about the Secretary of State for Scotland. Although the Amendment is in the names of three Scottish Members, no Scottish Minister has condescended to attend any part of the debate. It is fortunate for the sake of our argument

    521
    that in the debate in the Scottish Standing Committee yesterday, the Secretary of State said:
    "At the end of May, 1956, 69 local authorities out of 230 in Scotland had no houses under construction."
    One local authority in three in Scotland has no houses under construction today.
    Mr. C. Pannell: The Financial Secretary to the Treasury made the point that that anti-social conduct could come only from councils with Labour majorities. Perhaps my hon. Friend will deal with the Conservative ones.
    Mr. Hamilton: The bulk of these are Conservative-controlled. The Secretary of State added:
    "This contraction was in the main in the county districts and small burghs."
    Any Scottish Member knows full well that these are, in the main, Tory authorities. The Secretary of State continued, in the same context:
    "For every 100 houses these authorities built in 1953, they now have under construction 76."—[OFFICIAL REPORT, Scottish Standing Committee, Tuesday, 10th July, 1956; c. 164.]
    That shows the effect of the Government's policy of high interest rates.
    In my own local authority, Fife County Council, we have a Labour majority of one, and that council has resolved, no matter how interest rates vary, that it will build houses. In my constituency there is a village which has houses probably worse than those anywhere else in Scotland. My local authority has said, "We intend to build 90 houses there despite the penal rate of interest". Then, although the local authority has taken a decision by a majority of 16—an all-party decision—the Scottish Office say, "If you intend to build despite the interest rates we will stop you in any case." We are not being allowed to build the houses. When the penal interest rates do not have any effect the Government step in and do the dirty work.
    Another point which has not been made so far is that one of the big problems which we face as a nation is the mobility of labour. Last week the Minister of Labour said that what we must do to increase the mobility of labour was to build more houses to let. Is that the policy of the Government? If it is, how are they encouraging local authorities to
    522
    do that? Are they doing it by high interest rates? They know that that is not so. High interest rates are having the effect, as the Secretary of State for Scotland has admitted, of stopping one in three of the local authorities in Scotland from building any houses at all.
    This is an intolerable position. The Government are stopping the building of houses and are, therefore, decreasing the mobility of labour. This is also having the effect of encouraging demands for increased wages. What is the use of the Government saying to the nationalised industries that they should stabilise their prices and then, having got an assurance, going to the T.U.C. and saying, "There, are not we good boys? Now you restrain your wage claims", and then, in the next breath, saying to the local authorities, "We are going to force you to put up rents, and when you have done that we will decontrol the privately owned houses and put up those rents as well"? There is no consistency in this. It is no contribution to the solution of our national problems. The right hon. Gentleman has made one of the most disgusting speeches that I have ever heard in the House of Commons.
    Mr. Rankin: I should like, briefly, to deal with two points which were made by the Financial Secretary. He seemed to be rather worried about where to get cheap money. He ridiculed the idea of the 2½ per cent. which is suggested in the Amendment. But my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) is not thirled to the 2½ per cent.
    Mr. Emrys Hughes: Tied.
    Mr. Rankin: I am sorry if I have used a word outwith the comprehension of the Minister; I do not want to take him out of his depth. I was saying that my hon. Friend is not tied to the 2½ per cent., and that, if the right hon. Gentleman is prepared to "talk turkey" in this matter, my hon. Friend is prepared to do a deal round about 3 or 3½ per cent. We shall be glad to hear what the right hon. Gentleman has to say on that point later.
    I now want to deal with the right hon. Gentleman's first point. He seemed to think it was difficult to get cheap money. The right hon. Gentleman knows where to get it cheap. He knows where 2½ per cent. is being paid just now. It is being paid to Post Office savers, and the money

    523
    is there. Millions of pounds of it are there, and that money can be had. That money goes to the Government, who, I assume, will pay the savings bank perhaps ¼ per cent. more for its work and charges in connection with the handling of that money.
    From the City of Glasgow come millions of pounds to the Government at a cheap interest rate, and then, in turn, the Government pay perhaps no more than 2¾ per cent. or 3 per cent. for that money. When Glasgow requires it to build houses, the Government charge at least 5¼ and perhaps 5½ per cent. for the money which they got from the city at almost half that price.
    It is quite clear that the local authorities can do a great deal to awaken the Government in this matter, and there is no reason why they should not go ahead with the formation of municipal banks in order that they themselves may provide the cheap money which the Treasury is finding it impossible to give them. It has been done before, and if the Treasury finds itself in that position, in which it is deprived of money which it presently uses and then lends back at double the price, because of the refusal to talk sensibly on this matter, it will have only itself to thank.
    I want now to refer to the second point which the right hon. Gentleman made. He said that he did not want to insulate the local authorities artificially from the rigours of the market. He did not want them to be feather-bedded. The right hon. Gentleman used another phrase; he called it artificially insulating them. I should like to see at what point this insulation takes place, and I want to quote an example from a housing scheme in the City of Glasgow—one of the great new housing schemes going up in my own city. At Castle Milk, in the City of Glasgow, the five-apartment house costs £2,258. The rent which the corporation finds it necessary to charge for that type of house is £40. If it had to charge the economic rent for those houses it would require to charge £136 19s. 10d.
    9.30 p.m.
    The Government, knowing that that is an impossible rent to charge, pursue the policy—I have to be careful I use the phrase aright—of "artificial insulation."
    524
    Yes, the policy which the right hon. Gentleman has just condemned. He is pursuing it because, recognising the impossibility of charging a rent of £136 19s. 10d. he gives £46 15s. as Government insulation to the corporation to prevent that rent from being charged. That is insulation, which he condemns, and which he could avoid by lowering the interest rate.
    Out of the economic rent of £136 19s. 10d., £110 goes to the money-lenders, and he is the money-lender, and we all condemn the money-lender. Of course, he acts ex officio. The amount he hands out is £46 15s. After taking in £110 he gives back £46 15s. That is what they call high finance. I am sorry that the high financier, the hon. Member for Ilford, South (Mr. Cooper) has gone. He said that we on this side of the Committee were in Wonderland. I wish he had heard later of the kind of Wonderland that his Government have blundered into.
    In addition to artificial insulation to the extent of £46 15s., the right hon. Gentleman goes on to inflate. For weeks we have heard his chief saying he is going to stop inflation. To get the rent down to £40 the local authority has to levy a statutory rate which brings in for each house £15 10s., and that is a form of inflation, but even that does not bring the housing authority's books into balance. To balance expenditure it has to levy an additional rate which brings in £34 14s. 10d. All that is inflation.
    The right hon. Gentleman sits there without a blush on his face, yet he and his chief are doing what they have been condemning for week after week. They are inflating. They are artificially insulating. We have heard the right hon. Gentleman condemn these things tonight, and we have heard the Chancellor of the Exchquer condemn them during the last few weeks. The result of it all is an even bigger inflation, because the total housing deficit which the Glasgow Corporation has to meet this year is £1,176,000, as a result of the policies carried out by this Government and because of the high interest rates charged. My hon. Friend the Member for South Ayrshire, in his wisdom, has come along and offered an escape. I hope that the Government will not be so stupid as to

    525
    ignore the lifeline that is being flung out to them tonight, because if they do not grasp it they will disappear without leaving a trace of where they have been.
    Question put, That those words be there insterted:—
    The Committee divided: Ayes 153. Noes 184

    Division No. 264.]

    AYES

    [9.35 p.m.

    Ainsley, J. W.

    Grenfell, Rt. Hon. D. R.

    Neal, Harold (Bolsover)

    Allaun, Frank (Salford, E.)

    Grey, C. F.

    Noel-Baker, Francis (Swindon)

    Allen, Arthur (Bosworth)

    Hale, Leslie

    Oram, A. E.

    Allen, Scholefield (Crewe)

    Hamilton, W. W

    Orbach, M.

    Awbery, S. S.

    Hannan, W.

    Oswald, T.

    Bacon, Miss Alice

    Harrison, J. (Nottingham, N.)

    Owen, W. J.

    Bence, C. R. (Dunbartonshire, E.)

    Hastings, S.

    Paling, Will T. (Dewsbury)

    Blackburn, F.

    Hayman, F. H.

    Pannell, Charles (Leeds, W.)

    Blenkinsop, A.

    Herbison, Miss M.

    Parker, J.

    Boardman, H.

    Hewitson, Capt. M.

    Parkin, B. T.

    Bottomley, Rt. Hon. A. G.

    Hobson, C. R.

    Plummer, Sir Leslie

    Bowden, H. W. (Leicester, S.W.)

    Holman, P.

    Popplewell, E.

    Boyd, T. C.

    Holmes, Horace

    Price, J. T. (Westhoughton)

    Braddock, Mrs. Elizabeth

    Howell, Charles (Perry Barr)

    Probert, A. R.

    Brockway, A. F.

    Howell, Denis (All Saints)

    Proctor, W. T.

    Broughton, Dr. A. D. D.

    Hoy, J. H.

    Pryde, D. J.

    Brown, Rt. Hon. George (Belper)

    Hubbard, T. F.

    Randall, H. E.

    Brown, Thomas (Ince)

    Hughes, Emrys (S. Ayrshire)

    Rankin, John

    Burke, W. A.

    Hughes, Hector (Aberdeen, N.)

    Redhead, E. C.

    Butler, Herbert (Hackney, C.)

    Hunter, A. E.

    Reeves, J.

    Butler, Mrs. Joyce (Wood Green)

    Hynd, H. (Accrington)

    Roberts, Albert (Normanton)

    Callaghan, L. J.

    Hynd, J. B. (Attercliffe)

    Roberts, Goronwy (Caernarvon)

    Champion, A. J.

    Irvine, A. J. (Edge Hill)

    Royle, C.

    Chapman, W. D.

    Irving, S. (Dartford)

    Silverman, Julius (Aston)

    Chetwynd, G. R.

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

    Skeffington, A. M.

    Clunie, J.

    Jeger, George (Goole)

    Slater, J. (Sedgefield)

    Coldrick, W.

    Jeger, Mrs. Lena (Holbn & St. Pncs, S.)

    Smith, Ellis (Stoke, S.)

    Collick, P. H. (Birkenhead)

    Johnson, James (Rugby)

    Snow, J. W.

    Collins, V. J. (Shoreditch & Finsbury)

    Jones, Rt. Hon. A. Creech (Wakefield)

    Sorensen, R. W.

    Craddock, George (Bradford, S.)

    Jones, David (The Hartlepools)

    Steele, T.

    Crossman, R. H. S.

    King, Dr. H. M.

    Stewart, Michael (Fulham)

    Dalton, Rt. Hon. H.

    Lawson, G. M.

    Swingler, S. T.

    Davies, Harold (Leek)

    Lee, Frederick (Newton)

    Taylor, John (West Lothian)

    Davies, Stephen (Merthyr)

    Lever, Leslie (Ardwick)

    Thomson, George (Dundee, E.)

    Deer, G.

    Lindgren, G. S.

    Timmons, J.

    Delargy, H. J.

    Lipton, Lt.-Col. M.

    Wells, Percy (Faversham)

    Dodds, N. N.

    Logan, D. G.

    Wheeldon, W. E.

    Dye, S.

    Mabon, Dr. J. Dickson

    Wilkins, W. A.

    Ede, Rt. Hon. J. C.

    MacColl, J. E.

    Williams, David (Heath)

    Edwards, Rt. Hon. John (Brighouse)

    McInnes, J.

    Williams, Rev. Llywelyn (Ab'tillery)

    Edwards, Rt. Hon. Ness (Caerphilly)

    McKay, John (Wallsend)

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

    Evans, Albert (Islington, S.W.)

    McLeavy, Frank

    Williams, W. R. (Openshaw)

    Evans, Stanley (Wednesbury)

    MacPherson, Malcolm (Stirling)

    Williams, W. T. (Barons Court)

    Fernyhough, E.

    Mahon, Simon

    Willis, Eustace (Edinburgh, E.)

    Fienburgh, W.

    Mann, Mrs. Jean

    Wilson, Rt. Hon. Harold (Huyton)

    Finch, H. J.

    Marquand, Rt. Hon. H. A.

    Winterbottom, Richard

    Fletcher, Eric

    Mayhew, C. P.

    Woodburn, Rt. Hon. A.

    Forman, J. C.

    Mikardo, Ian

    Yates, V. (Ladywood)

    Fraser, Thomas (Hamilton)

    Mitchison, G. R.

    Zilliacus, K.

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

    Moody, A. S.

    Gibson, C. W.

    Mort, D. L.

    TELLERS FOR THE AYES:

    Gordon Walker, Rt. Hon. P. C.

    Moss, R.

    Mr. Pearson and Mr. Simmons.

    NOES

    Agnew, Cmdr. P. G.

    Boyle, Sir Edward

    Donaldson, Comdr. C. E. McA.

    Aitken, W. T.

    Brooke, Rt. Hon. Henry

    Drayson, G. B.

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

    Brooman-White, R. C.

    du Cann, E. D. L.

    Alport, C. J. M.

    Browne, J. Nixon (Craigton)

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

    Amory, Rt. Hn. Heathcoat(Tiverton)

    Bryan, P.

    Duncan, Capt. J. A. L.

    Armstrong, C. W.

    Bullus, Wing Commander E. E.

    Eccles, Rt. Hon. Sir David

    Ashton, H.

    Burden, F. F. A.

    Eden, J. B. (Bournemouth, West)

    Atkins, H. E.

    Channon, H.

    Errington, Sir Eric

    Baldwin, A. E.

    Clarke, Brig. Terence (Portsmth, W.)

    Finlay, Graeme

    Balniel, Lord

    Cole, Norman

    Fleetwood-Hesketh, R. F.

    Barter, John

    Conant, Maj. Sir Roger

    Fletcher-Cooke, C.

    Baxter, Sir Beverley

    Cooper-Key, E. M.

    Foster, John

    Beamish, Maj. Tufton

    Cordeaux, Lt.-Col. J. K.

    Galbraith, Hon. T. G. D

    Bennett, F. M. (Torquay)

    Corfield, Capt. F. V.

    George, J. C. (Pollok)

    Bennett, Dr. Reginald

    Craddock, Beresford (Spelthorne)

    Gibson-Watt, D.

    Biggs-Davison, J. A.

    Crouch, R. P.

    Glover, D.

    Bishop, F. P.

    Crowder, Sir John (Finchley)

    Godber, J. B.

    Black, C, W.

    Dance, J. C. G.

    Gomme-Duncan, Col. Sir Alan

    Bossom, Sir Alfred

    Deedes, W. F.

    Gough, C. F. H.

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

    Dodds-Parker, A. D.

    Gower, H. R

    Graham, Sir Fergus

    Lambert, Hon. G.

    Raikes, Sir Victor

    Grant, W. (Woodside)

    Lancaster, Col. C. G.

    Rawlinson, Peter

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Leavey, J. A.

    Redmayne, M.

    Green, A.

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

    Remnant, Hon. P.

    Grimond, J.

    Legh, Hon. Peter (Petersfield)

    Ridsdale, J. E.

    Grimston, Hon. John (St. Albans)

    Lindsay, Hon. James (Devon, N.)

    Rippon, A. G. F.

    Grimston, Sir Robert (Westbury)

    Linstead, Sir H. N.

    Robertson, Sir David

    Gurden, Harold

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

    Roper, Sir Harold

    Hare, Rt. Hon. J. H.

    Low, Rt. Hon. A. R. W.

    Ropner, Col. Sir Leonard

    Harris, Frederic (Croydon, N.W.)

    Lucas, P. B. (Brentford & Chiswick)

    Russell, R. S.

    Harrison, A. B. C. (Maldon)

    Lucas-Tooth, Sir Hugh

    Schofield, Lt.-Col. W.

    Harrison, Col. J. H. (Eye)

    Mackie, J. H. (Galloway)

    Scott-Miller, Cmdr. R.

    Harvey, Ian (Harrow, E.)

    Maclay, Rt. Hon. John

    Spearman, Sir Alexander

    Harvey, John (Walthamstow, E.)

    McLean, Neil (Inverness)

    Steward, Harold (Stockport, S.)

    Heald, Rt. Hon. Sir Lionel

    MacLeod, John (Ross & Cromarty)

    Steward, Sir William (Woolwich, W.)

    Heath, Rt. Hon. E. R. G.

    Maddan, Martin

    Stoddart-Scott, Col. M.

    Hill, Mrs. E. (Wythenshawe)

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

    Studholme, Sir Henry

    Hill, John (S. Norfolk)

    Maitland, Hon. Patrick (Lanark)

    Summers, Sir Spencer

    Hinchingbrooke, Viscount

    Markham, Major Sir Frank

    Taylor, William (Bradford, N.)

    Hirst, Geoffrey

    Marlowe, A. A. H.

    Thomas, P. J. M. (Conway)

    Holt, A. F.

    Mathew, R.

    Thompson, Kenneth (Walton)

    Hornby, R. P.

    Mawby, R. L.

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

    Horsbrugh, Rt. Hon. Dame Florence

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

    Thornton-Kemsley, C. N.

    Hudson, Sir Austin (Lewisham, N.)

    Milligan, Rt. Hon. W. R.

    Tiley, A. (Bradford, W.)

    Hughes Hallett, Vice-Admiral J.

    Molson, Rt. Hon. Hugh

    Tilney, John (Wavertree)

    Hughes-Young, M. H. C.

    Moore, Sir Thomas

    Touche, Sir Gordon

    Hulbert, Sir Norman

    Nabarro, G. D. N.

    Turton, Rt. Hon. R. H.

    Hurd, A. R.

    Heave, Airey

    Vickers, Miss J. H.

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

    Nicholson, Godfrey (Farnham)

    Vosper, D. F.

    Hutchison, Sir James (Scotstoun)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Wakefield, Sir Wavell (St. M'lebone)

    Irvine, Bryant Godman (Rye)

    Nield, Basil (Chester)

    Wall, Major Patrick

    Jenkins, Robert (Dulwich)

    Noble, Comdr. A. H. P.

    Ward, Hon. George (Worcester)

    Jennings, J. C. (Burton)

    Oakshott, H. D.

    Ward, Dame Irene (Tynemouth)

    Johnson, Dr. Donald (Carlisle)

    Osborne, C.

    Whitelaw, W. S. I. (Penrith & Border)

    Johnson, Eric (Blackley)

    Page, R. G.

    Williams, Paul (Sunderland, S.)

    Joynson-Hicks, Hon. Sir Lancelot

    Partridge, E.

    Williams, R. Dudley (Exeter)

    Keegan, D.

    Pilkington, Capt. R. A.

    Wills, G. (Bridgwater)

    Kerr, H. W.

    Pitt, Miss E. M.

    Wilson, Geoffrey (Truro)

    Kershaw, J. A.

    Pott, H. P.

    Woollam, John Victor

    Kimball, M.

    Powell, J. Enoch

    Yates, William (The Wrekin)

    Kirk, P. M.

    Price, Henry (Lewisham, W.)

    Lagden, G. W.

    Profumo, J. D.

    TELLERS FOR THE NOES:

    Mr. Wakefield and Mr. Barber.

    Question put and agreed to.

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    9.45 p.m.
    Lieut.-Colonel Marcus Lipton: One or two remarks of a general nature made a little while ago by the Financial Secretary were of such an extraordinary nature that some further comment is required before we part with the Clause.
    I know that the Financial Secretary did not find it possible to accept the proposal made by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), but he based his rejection of any reduction in the present rate of interest on the argument that it was impossible for the Government to borrow at rates low enough to comply with the terms of the Amendment upon which we have just voted or to grant any concession whatever in respect of the current rates of interest charged by the Public Works Loan Board.
    The right hon. Gentleman sail that if the Government were to make any reduction in the present rates charged by the Board, it would mean either an open or
    528
    concealed subsidy on the part of the Government or resort to the printing press. I challenge that statement. Without granting a concealed subsidy and without resorting to the printing press, it is well within the Treasury's power to make a reduction in the rates to be charged upon the £300 million which the Clause seeks to authorise.
    It can be done by this means. The Government have possession, in the Post Office Savings Bank—or they had on 31st December, 1955; this is the latest figure that I have been able to obtain—of balances due to depositors amounting to about £1,700 million, which, on the basis of the current rate of £300 million a year, would be sufficient to cover the Board's requirements for the next five years. Those deposits represent real money, not artificially created money; they are the savings of ordinary people, and the Government pay 2½ per cent. interest on them. It should be possible for the Government, in various selected fields of expenditure or loan sanctions, such as local government, to use the £1,700 million by lending it to local authorities at a rate of interest higher than 2½ per cent., in order to cover

    529
    expenses, but certainly very much lower than the rates now charged by the Board.
    It is lamentable that the Financial Secretary should seek to mislead the Committee by pretending that there was no possibility of the Government granting local authorities loans at a lower rate of interest than at present applies. The hardships imposed upon local authorities have been mentioned, and I shall not dilate upon them. By using funds placed at the disposal of the Government by ordinary savers at a rate of interest not exceeding 2½ per cent., the Treasury could, if it wished—unfortunately, it does not so wish—very considerably lighten the burdens of local authorities, whose task has been made virtually impossible by the policy pursued by the present Administration.
    Mr. James McInnes: I want to deal with an aspect of the matter which the Financial Secretary has not mentioned. I refer to the Stamp Duty and fees which the Public Works Loan Board charges to local authorities seeing to borrow money from it. On page 13 of the Annual Report of the Board the Financial Secretary will observe that apart from Stamp Duty, of which the Board accumulates about £800,000 a year, the Board charges local authorities 4s. per £100 as a fee.
    In 1955–56 the Board received from local authorities no less than £732,000 in respect of fees at the rate of 4s. per £100. The fees, in the words of the Report, are paid to meet
    "… the cost to the Board (a) of examining applications for loans (including investigation of titles in respect of property loans), making advances and opening new accounts … and (b) of maintaining accounts over the periods of the loans, which vary from 4 to 80 years …"
    In other words, that means all the work which is undertaken by the staff employed by the Board. The cost of the staff is also set out on page 13 and is given as about £54,700. Other expenditure, rent, rates, furniture, superannuation and so on amount to about £27,500.
    That means that the Board receives from local authorities nearly £732,000 to meet an annual operating or administration cost of about £82,000 a year. I have calculated that during the past seven years the Board has received from local authorities fees of no less than £5,100,000 to meet operating costs of about £550,000,
    530
    a profit on that aspect of the transactions of at least £4½ million.
    During the last few years I have repeatedly directed the attention of the Financial Secretary to that aspect of the matter, and asked him whether it is not possible to reduce the fees from 4s. per £100 borrowed to 6d. per £100 borrowed. The cost to a city like Glasgow of borrowing money from the Board is about £70,000. If the duty were reduced to a rate of 6d. per £100 borrowed, Glasgow would pay only £8,000 to £9,000. That state of affairs applies to every local authority. Despite the fact that I have raised this issue year in and year out, I always get the same reply from the Financial Secretary—"We recognise what you say, we appreciate your point of view and we give you the assurance that it will be examined."
    However, it has never been examined. At least there has been no alteration in that rate during the past seven years. I hope that the Financial Secretary will recognise that while it would be a small concession, it would, nevertheless, be a very beneficial concession to local authorities which have to contend with such an enormous burden as a result of the Government's interest rate policy. Such a reduction would tend, if only in a very small degree, to reduce the costs. I trust that in these circumstances the right hon. Gentleman will not this evening fob me off with the hardy annual by saying, "We recognise your point and we appreciate what you say. The matter will be examined," because then I should have to repeat this speech again next year. I hope that the right hon. Gentleman will deal with the matter tonight.
    Mr. S. O. Davies: I had not intended to intervene in this debate, although I am naturally deeply interested, like most hon. Members on this side of the Committee, in the Amendment which was moved by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes). My intervention has really been made inevitable by the shocking and offensive speech made by the Financial Secretary, in which he lectured the local authorities and showed such a pathetic solicitude for the money-lenders in the money markets of this country.
    I hope that the right hon. Gentleman will read his speech tomorrow. I speak with some humility and with some years of experience of a local authority which,

    531
    in common with other local authorities, was nearly blasted out of existence by Tory Governments in the inter-war years. I had hoped that because of the right hon. Gentleman's personal experience of local government he would exercise a little common sense and a sense of proportion.
    Some of us in this Committee are still very proud of our magnificent local government structure with which, we believe, there is nothing in the world to be compared. Having listened to the lecture delivered by the right hon. Gentleman tonight to local authorities in which he said that they should exercise some sense of freedom and responsibility in the teeth of the most penal legislation that has been passed at the expense of local authorities in the last 40 years, I must, as I have said, ask the Financial Secretary to read his speech tomorrow.
    Why this solicitude for the money-lenders? Why should the right hon. Gentleman urge local authorities to go to the money markets if they are not satisfied with the Public Works Loan Board? I speak as one whose constituency still has thousands of houses that are no better than slums. I and my constituents know what an appalling problem it is to try to rehouse people owing to the utterly unscrupulous and penal methods devised by the Government at the expense of the local authorities.
    The Financial Secretary owes an apology to the local authorities. Insults have been added to injuries, and he should have been the last man to do it. I rose merely to make that protest on behalf of local authorities.
    Clause ordered to stand part of the Bill.
    Clauses 2 and 3 ordered to stand part of the Bill.
    Bill reported, without Amendment: read the Third time and passed.

    BRITISH CARIBBEAN FEDERATION [MONEY]
    Resolution reported,
    That, for the purposes of any Act of the present Session to provide for the federation of certain West Indian colonies and for the transfer, to a court established for the purposes of the federation, of the jurisdiction of the Court of Appeal established by the West Indian Court of Appeal Act, 1919, and the
    532
    dissolution of that court; to provide for conferring on the first-mentioned court jurisdiction to hear and determine appeals from the courts of colonies which are not for the time being included in the federation and to repeal the British Honduras (Court of Appeal) Act, 1881; and for purposes connected with the matters aforesaid, it is expedient to authorise—

    (1) the payment out of moneys provided by Parliament—

    (a) of such sums, not exceeding in the aggregate one million pounds, as may be required by the Secretary of State for the purpose of making grants towards defraying the cost of establishing the seat of the Government of the federation established by virtue of the said Act; and

    (b) of such sums as may be required by him for the purpose of making, in respect of the period of ten years beginning with the first day of January next after the establishment of the said federation, grants to that Government for the purpose of enabling it to make grants to the governments of colonies for the time being included in the federation whose resources are, in its opinion, insufficient to enable them to defray their administrative expenses; and

    (2) the payment out of moneys provided by Parliament or out of the Consolidated Fund of any increase in sums payable thereout under any other enactment which is attributable to an Order in Council made under or by virtue of the said Act.

    BRITISH CARIBBEAN FEDERATION BILL
    Considered in Committee, and reported, without Amendment.
    10.3 p.m.
    The Minister of State for Colonial Affairs (Mr. John Hare): I beg to move, That the Bill be now read the Third time.
    I shall not detain the House for very long, because the very warm welcome which the Bill had during the Second Reading debate, and the rapid way in which the remaining stages have just been dealt with, show how unanimous hon. Members on both sides of the House are in this matter.
    I shall make no formal speech of commendation, but it should be made clear to the people of the West Indies that we in the United Kingdom wish Godspeed and a fair passage to the new British Caribbean Federation when it comes into being. I hope that in view of the Bill's warm and friendly reception the leaders and the peoples of the new Federation will feel assured that they will always have the continued friendship and help of hon. Members on both sides of the House.
    10.4 p.m.
    Mr. Arthur Creech Jones: In view of the importance of the Bill and the fact that it looks with great hope to the future I feel that we should wish the people of the Caribbean all good luck and success in the work of the new Federation before the Bill leaves the House. We realise that many problems remain to be solved, and that a great deal of work must be done before the Federation can come into operation. The considerable difficulties which will have to be faced were expressed during the Second Reading debate. A great deal of patience will be necessary in order to build up that corporate spirit upon which the success of the Federation depends, and to overcome the phyical difficulties of communication between respective territories.
    None the less, the Federation coming into being will, we hope, assume the status of a new Dominion inside the Commonwealth. We know that, with its financial limitations, it is not an easy thing to build up a new State inside the Commonwealth, but we hope that this nation will continue to show the utmost generosity in regard to the problems which have to be solved by this new Federation. Therefore, we hope that all will go well in the days immediately ahead, and, speaking for the Opposition and, I think, for all Members on both sides of the House, we wish the people of the Caribbean well in this great adventure on which they are about to start.
    Mr. R. W. Sorensen: As a back bencher, may I add my word, as I am sure other back benchers wish to do, to the good wishes extended to the emergence of this new Federation. In a sense, what we are doing today is only poetic justice and some kind of compensation for what we have done in the past. We must not forget the past; and that many of the people of these islands are the descendants of those who were taken away from their homeland years ago and dumped overseas as human merchandise. If we can do something to bring the people of those areas together for their social, economic and ethical good, that will, in some measure, counterbalance the evils of the past.
    It is true, as has been mentioned in another connection, that there are very great difficulties in the development of
    534
    this Federation, but nowadays these difficulties can be overcome through our knowledge of science. Nature has scattered and fragmented a number of these islands, and in former days it would have been most difficult to bring about any kind of homogeneity. Fortunately, by science, we can now leap over the waters and so help to bring together people who otherwise might have spent an indefinite time in segregation and isolation. Therefore, I hope that the bridge which modern science can offer will be helpful in the development of one more pattern within our amazing and inspiring Commonwealth of Nations.
    For this reason, I trust that these humble words will carry some little weight from those of us on the back benches, and will add to the more weighty utterances which have come from right hon. Members on the Front Benches in wishing Godspeed to the Bill. We hope that while these people will keep their identity in the several islands they will nevertheless develop into a nation which will comprehend and preserve those individual identities.
    That, I am sure, will add very materially to the well-being of the people of these islands. It will add to the possibility of their economic development, but, above all, I think that it is necessary that those who live in these islands should increasingly have a sense of belonging to the same community, with variety in it, but a community which can be proud of itself and proud of membership of the Commonwealth of Nations.
    Bill accordingly read the Third time and passed.

    GOVERNORS' PENSIONS [MONEY]
    Resolution reported,
    That, for the purposes of any Act of the present Session to amend the Pensions (Governors of Dominions, &c.) Acts, 1911 to 1947, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums which under the Pensions (Governors of Dominions, &c.) Acts. 1911 to 1947, or under the Superannuation Acts, 1834 to 1950, are payable out of moneys so provided.

    GOVERNORS' PENSIONS BILL
    Considered in Committee.
    [Sir RHYS HOPKIN MORRIS in the Chair]

    Clause 1.—(PENSIONS TO CERTAIN GOVERNORS WITH LESS THAN THREE YEARS' SERVICE.)
    10.10 p.m.
    Mr. Emrys Hughes: I beg to move, in page 1, line 10, to leave out from "State" to "if" in line 12.
    Those of us who are trying to improve the Bill have no wish to inflict injustice upon colonial Governors. But, while we recognise that the colonial Governors have performed their duties and deserve pensions from the Government, we think that this is not an opportune moment to select them for special attention to use a term already used this evening, for "feather-bedding". The last persons who would desire to be "feather-bedded" are the colonial Governors, and we do not see any need to give the very generous concessions contained in this Bill, and especially in Clause 1.
    This is a time when everyone is seeking better pension conditions. I do not wish to elaborate upon the number of people who are doing that. I should not for a moment venture on such forbidden territory, but I do not think that a case has been made out for giving priority to colonial Governors such as is given in this Bill. By this Amendment we seek to delete the words:
    "… notwithstanding that he has not completed three years' service as a Governor (the period required by section one of the Pensions (Governors of Dominions, etc.) Act, 1936 …"
    We think it reasonable that some explanation should be given about why it is necessary to insert these special conditions for this privileged class of people.
    We do not think, for example, that it is necessary to have special pension terms to attract colonial Governors. There is no difficulty about attracting them, and the conditions, pay, general prestige and honour should be taken into consideration. We should like a further explanation of why such exceptionally generous treatment is meted out to a very small class of civil servants, especially when we read in the Clause
    536
    "… if the other conditions for the grant of such a pension are satisfied, and, in particular, the period of his service as a Governor and the period of his service in the permanent Civil Service of the State together amount to not less than ten years."
    I am in favour of the most generous and considerate terms for all kinds of civil servants, but I think that we should have a fuller explanation of why our commonsense, reasonable and moderate Amendment should not be accepted.
    The Minister of State for Colonial Affairs (Mr. John Hare): I accept that the hon. Member for South Ayrshire (Mr. Emrys Hughes) wishes to improve the Bill, and I am concerned that that object would be defeated were this Amendment accepted. It would defeat the whole purpose of the Bill, which is, by allowing the period of service of the Governor to be considered in conjunction with his normal service as a member of the Oversea Civil Service, to give him the same treatment as if he were serving in the Home or Oversea Civil Service.
    10.15 p.m.
    The effect of this Amendment would be to restore the rule that a Governor who immediately before his appointment was in the Home Civil Service must serve at least three years as a Governor to qualify for a Governor's pension. The Committee knows that the majority of Governors are appointed from the Home or Oversea Civil Service. It is definitely the view of the Government that it is reasonable to take account of their careers as a whole in determining their eligibility for pension. The Clause preserves the ten-year rule, which is applicable in the Home and Oversea Civil Service. I do not want in any way to offend the hon. Gentleman, but I can assure him that the Amendment would defeat the very purpose for which the Bill is designed.
    Lieut.-Colonel Marcus Lipton: I did my best to follow the Minister's explanation. I appreciate that it is desirable that pensions should be given for the whole period of service, but I find it difficult to understand that the Government contemplate appointing reputable and desirable people to the important post of Governor, knowing that the person is not likely to occupy that position for as long as three years. Because that person may have had eight years or nine years in the permanent Civil Service in another capacity he qualifies

    537
    for pension as ex-Governor even though he has occupied that position for only six months. It is not unreasonable to suggest that he should have served for some mimimum period as Governor before he retired.
    The effect of the Clause is that a man who has served in the Home Civil Service for nine years and ten months can be appointed as Governor for two months and then be entitled to pension. It is rather strange that no minimum period of any kind is contemplated.
    Mr. E. G. Willis: I agree with my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) that the Clause seems to go rather far, particularly when we consider Clause 9. It would be out of order to refer to the Clause at any length, but it says
    "Section eight of the principal Act (which enables the Secretary of State to declare a person's claim to a pension under that Act forfeited for his failure to accept or perform the duties of a Governor) shall cease to have effect."
    So far as I can understand it, it means that if a man, after a period of a month, ceases to perform his duties as Governor, he can draw his pension. That seems to go a considerable distance, and I should have thought that it would be undesirable. Can we not have a better explanation?
    Amendment negatived.
    Miss Joan Vickers: I beg to move, in page 1, line 16, at the end, to insert:
    (2) A pension may, subject to the provisions of the principal Act, be granted under that Act to a person who has completed not less than three years' service as a Governor notwithstanding that before his appointment as a Governor he was not employed in service in the permanent Civil Service of the State.
    The Amendment covers the political Governors, Governors appointed for one or more particular jobs. Many of the people both in the home or overseas service may be desirable as Governors. Now that countries are becoming independent, most of the posts of a junior calibre and those up to that of Governor will be taken by the people of the territory but it may be found necessary for the newly independent countries to have an "outside" Governor. Particularly in countries where there are mixed races it may be desirable for a considerable period to have a Governor-General or Governor from this country, in the same
    538
    way as there have been Governors-General from this country in Australia and New Zealand. The right hon. Member for Wakefield (Mr. Creech Jones) may remember that during his term of office such appointments were made in Cyprus and Malta.
    "Political Governors" do extremely good service. After a busy and active life in this country they are called upon to take over difficult jobs, expensive jobs where there is a great deal of entertaining to be done, and they should get some form of pension should they need to retire after three years. I have stated the period as three years, but I should be willing to accept a longer period than that if my right hon. Friend considered it necessary. These Governors might serve in one territory for three years or more and then be transferred to another territory. We have a Governor in the Central African Federation in that position. As I understand the Clause, if such a Governor had not been a civil servant he would not be entitled to receive any type of pension for that service.
    If a man, or a woman—I hope that in the not too distant future we may have women Governors—has given excellent service to a territory I am sure we should like to reward such a person in some way. When a Governor retires it may be extremely difficult to find a job for him in this country, and he may have little or nothing to live on. As the Clause stands, only people with private means would be able to take a political appointment as a Governor. I think that such positions should be open to the persons best qualified to do the job. For that reason I ask my right hon. Friend to consider this Amendment.
    Mr. R. E. Winterbottom: I agree with most of the speech of the hon. Member for Devonport (Miss Vickers). Apart from the fact that she was talking about Governors overseas, every argument she has used might very well be used tomorrow in relation to Members of Parliament in the same way as she used those arguments tonight.
    Mr. Hare: I should like to congratulate my hon. Friend the Member for Devonport (Miss Vickers) on the very sympathetic way in which she put her case. I feel all the more sorry that I am not able to accept her very convincing and sincere suggestion. As she said, the pur-

    539
    pose of the Amendment is to provide pensions to Governors who have not been civil servants and who have served for not less than three years. I should make it clear that the requirement of ten years' qualifying service for a pension is universal in the public superannuation schemes of the United Kingdom and also of the overseas territories. It is difficult to think of any ground which would really justify a modification of that rule.
    Hon. Members will be aware that pensions are normally awarded in the public service to officials who have completed a period of service which usually, although not always, is their whole career. There are flexible arrangements for aggregating service under different official employers in order to give a fair pension on final retirement, but it would be a new departure to introduce an arrangement which would give a man a pension after such a short period as suggested in this Amendment. My hon. Friend pointed out that those who might benefit would possibly include politicians who would be sent to take up positions for a short period because of their peculiar qualifications.
    Mr. F. Blackburn: Peculiar?
    Mr. Hare: Hon. Members can attach whatever meaning they wish to that word. I do not think that the Government could really insist on a career pension for officials while permitting a politician to receive a pension after as brief a period as three years' service. That would be unreasonable.
    Miss Vickers: I did not speak of a politician; I spoke of political appointments. That is rather different.
    Mr. Hare: A political appointment might perhaps be the appointment of a politician. Other persons who might come within this category would not be in either the Home or the Oversea Civil Service. There are the obvious examples of distinguished ex-Service people who are appointed Governors. Most of them are already provided for under the pension codes of the Services in which they have spent most of their life. Most of them are drawing pensions in respect of that service.
    Mr. Emrys Hughes: Is it possible for anybody to draw two pensions as a result of this?
    Mr. Hare: No. It has been an invariable rule, both in the Home and in the Oversea Civil Service, that officers of the Armed Forces who come into employment under United Kingdom superannuation Acts, or under the pension laws of overseas territories, must, if they have drawn their Service pension, start afresh before they qualify for a Civil Service pension.
    Those are briefly the reasons why I am afraid that I cannot accept the Amendment. I can only hope that perhaps my hon. Friend will withdraw it.
    Miss Vickers: In view of what my hon. Friend has said, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdraw.
    Clause ordered to stand part of the Bill.
    Clause 2 ordered to stand part of the Bill.

    Clause 3.—(INCREASE OF MAXIMUM AMOUNT OF GOVERNOR'S PENSION.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Willis: This is the Clause which raises the pension from £2,300 to £3,000, or
    "… such other sum as the Treasury may by order specify; or
    two-thirds of the yearly amount of the highest salary …"
    This seems to me, as I said on Second Reading, to be a very substantial increase. Once again I ask whether, at this juncture, it is right to increase these pensions by such an amount. I understand that it would mean rather more than an increase from £2,300 to £3,000, because the concluding words of subsection (1, a)
    "… or such other sum as the Treasury may by order specifsy …"
    are included in order to enable the Treasury to increase the amount. The result might be not £3,000 but £4,000. That is really a very large increase in pension to grant to any person at present. If the increase is £1,700, that is almost doubling the pension.
    I appreciate the value of the work done and the importance of the position held. Under normal circumstances I might be in favour of this—I do not know—but at the present I certainly view the Clause with considerable misgiving. When right hon. and hon. Gentlemen opposite are appealing to the workers not to ask for

    541
    a shilling increase in their wages, to grant hundreds of pounds in extra pensions to people who are already enjoying what I should have thought was a very comfortable pension seems to be wrong. I cannot understand how the Government can do that and at the same time expect other pensioners to be satisfied with £2 a week.
    10.30 p.m.
    When I go to my constituency and old-age pensioners ask me why I voted for a Bill which increases the pension of a colonial Governor from £2,300 to £3,000 I do not know what the answer is. Other hon. Members may be able to answer the question, but I find it very difficult to give an answer, particularly in view of the present situation, when we are told that we must not do anything inflationary—I should have thought this proposal was inflationary, to say the least—and when we are asked personally to set an example to the rest of the country. Surely the Government should set an example in ways other than by introducing a Clause of this character.
    I agree that the number of people concerned is small. I agree, too, that the total sum involved might not be very large. That is not the point. It is a symbol of the outlook of the Government, that they are prepared to do this for one class of the community and deny it to other classes. It is a symbol that upsets me and makes it very difficult for me personally to accept the Clause.
    I hope that the Minister of State for Colonial Affairs will have some very good reasons why this step should be taken at the present time. I understand that one of the reasons is that it will bring these pensions into line with the Civil Service conditions and pensions. Surely there are other things which could be brought into line with Civil Service conditions and pensions.
    Mr. Frederic Harris: What is the hon. Member going to say tomorrow?
    Mr. Willis: It would be out of order to discuss tomorrow's debate.
    Why the exception in this case? Why the hurry? Why should this be done at the present time? Why could not it be left until next year? We ought to have some answer to these questions from the right hon. Gentleman.
    Mr. Emrys Hughes: The last thing I would dream of doing would be to refer to anything that is likely to happen tomorrow.
    Mr. Anthony Kershaw: The hon. Gentleman's thoughts wander in that direction.
    Mr. Hughes: Even my thoughts never go out of order when you are in the Chair, Sir Rhys. Even if I thought out of order, I am sure that your perception would enable you to stop me before the thought reached utterance.
    What are we asked to do? A pension of £60 a week is a lot, is it not? We do not even argue that this is too much. All that my hon. Friend the Member for Edinburgh, East (Mr. Willis) says is this: is this the right time? My hon. Friend reads the reports of the speeches of the Chancellor of the Exchequer. I do not. My hon. Friend reads the letters from the Prime Minister in which he says that this is the time to call a halt, the time for the sternest economy, the time when the Government should set an example of economy, prudence and restraint in Government matters. I do not read these letters.
    Mr. David Jones: How does my hon. Friend know what is in the Prime Minister's letters if he does not read them?
    Mr. Hughes: My hon. Friend the Member for Edinburgh, East tells me. My hon. Friend represents a Scottish constituency that is, naturally, alarmed at a pension of £60 a week. In normal conditions we would not grudge £60, but these are times of great financial stringency and economic crisis in which we will easily get on the slippery slope of inflation. The people who read these debates are not merely colonial Governors. The lower ranks of the Colonial Service will read these debates, and other ranks of the Civil Service will, too, and the danger is that, the Government having set such a magnificent example of payment of pensions of £60 a week, they will stir people to ask awkward questions, the answers to which it is difficult to find.
    My hon. Friend and I represent Scottish constituencies, where we take these questions of economy seriously. What answer are we to give to our constituents? The Government urge us not to spend

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    money, urge us to thrift, tell us that every item of national expenditure counts and must be scrutinised, and yet they are going to give an increase of £10 a week to people who already have £50 a week. It cannot be argued that there is hardship because these colonial governors can retire at 50.
    Notice taken that 40 Members were not present;
    House counted, and, 40 Members being present—
    Mr. Hughes: May I, on behalf of the colonial governors, thank the hon. Members who have come along to see that they get this increase?
    Mr. Hare: The hon. Member for Edinburgh, East (Mr. Willis) and the hon. Member for South Ayrshire (Mr. Emrys Hughes) have asked me for good reasons why this figure of £3,000 has been adopted. The answer is very simple. It has been adopted because it is the equivalent of the maximum pension which a Permanent Secretary in the Home Civil Service can receive for forty years' service. These governors are public servants, and I think it is doing only justice to them to bring them into line with senior civil servants in the Home Civil Service. This, therefore, is a question of doing justice, and not one of extravagance, which is what the two hon. Gentlemen have suggested the Government are committing.
    Mr. Willis: There is a difference between a man who does forty years' service and a man who does ten years' service. There is a big difference. The right hon. Gentleman has not told us why this is being done at the present, when, we are told, these things should not be done.
    Mr. Hare: The hon. Gentleman must not assume that a man who has done ten years' service would get £3,000. We are dealing with the maximum amount.
    I am not surprised the hon. Member for South Ayrshire did not move the Amendment which he had tabled, to omit the reference to £3,000, because were that Amendment to be made to the Clause the pension could be higher than £3,000; it could go as high as £4,500.
    Mr. Hughes: On a point of order. Is it in order to refer to an Amendment which has not been moved?
    The Deputy-Chairman: It is not in order.
    Mr. Hare: I thought, Sir Rhys, that you would forgive me for mentioning that interesting fact.
    This is a question of doing justice, which need not arouse the apprehension of the two hon. Gentlemen, and I hope that they will agree to what is proposed.
    Clause ordered to stand part of the Bill.
    Clause 4 ordered to stand part of the Bill.

    Clause 5.—(GRATUITY IN CASE OF DEATH WHILE SERVING AS GOVERNOR.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Willis: This Clause again raises the same point. We ought to have an explanation from the Minister of State of the meaning of subsection (3), which states that
    (3) The Treasury may by order direct that the last foregoing subsection shall have effect as if for the reference to four thousand five hundred pounds there were substituted a reference to such other sum as may be specified in the order.
    The Clause does not say so, but I take is that the purpose is to make it possible to increase the gratuity payable. We are bound to ask whether the gratuity should be increased at present. A sum of £4,500 is a very substantial amount of money to be received as a gratuity by a personal representative on the death of a Governor. There are a great many cases where people would like to receive one-tenth of that sum. The hon. Gentleman should tell us whether the purpose of the Clause is to increase the sum and, if so, why it is necessary to do so at present.
    Mr. Emrys Hughes: The Minister should give us more details before we sanction these very generous gratuities. Could he give a concrete example, without mentioning names, showing exactly how this works out? Is the gratuity of £4,000 or £5,000 given without any means test or inquiry? If there is an inquiry, what form does it take? What conditions are fulfilled before a gratuity is granted?
    Mr. Hare: The Clause empowers the Treasury to make a gratuity to the personal representatives of a Governor who dies in office, or immediately before

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    his appointment if he is serving in the Home or Overseas Civil Service. The sum of £4,500 is a maximum under the Bill. It is difficult to give a particular example, as the hon. Member for South Ayrshire (Mr. Emrys Hughes) requested, but I do not think that to provide £4,500 is extravagant in view of the services which these men give. I hope, therefore, that the Committee will accept the Clause.
    Mr. Willis: Subsection (3) authorises an increase on the £4,500. Surely the intention is to increase the sum, not to reduce it.
    Mr. Hare: It can be increased by Treasury order.
    Mr. Hughes: Is there any means test or inquiry?
    Mr. Hare: All the relevant circumstances of the Governor concerned are taken into consideration.
    Clause ordered to stand part of the Bill.
    Clauses 6 to 8 ordered to stand part of the Bill.

    Clause 9.—(ABOLITION OF DUTY TO BECOME OR REMAIN GOVERNOR.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Willis: We should like to have an explanation of the Clause. Up to now the Minister has not done very well. He has stuck very closely to his brief, for which I cannot blame him, since the Bill is otherwise difficult to justify. Clause 9 states that
    Section eight of the principal Act (which enables the Secretary of State to declare a person's claim to a pension under that Act forfeited for his failure to accept or perform the duties of a Governor) shall cease to have effect.
    I should have thought that if a person fails to accept or to perform the duties of a Governor, there is some justification for the Secretary of State's claiming that the person's pension shall be forfeited. What are the circumstances in which this might apply? Suppose a Governor failed to perform his duties and came under the eye of the Secretary of State on account of some undesirable practice. Would the Secretary of State have power to say that his pension was forfeit? What does it mean? Why is the Secretary of State's power being removed?
    10.45 p.m.
    Mr. Emrys Hughes: We ought to be given a fuller explanation of the provision. Has there been any example in history where a Governor has been—if I may be excused for using such an awful word—sacked? If a Governor has been sacked for some justifiable reason, why are we now taking steps to repeal what seems to be a very sensible precaution?
    Mr. Hare: I can assure both hon. Gentlemen that my right hon. Friend will retain all his powers over pensions despite the fact that the Clause repeals Section 8 of the Pensions (Governors of Dominions, &c.) Act, 1911. My right hon. Friend has power to refuse to grant a pension irrespective of Section 8, and, as far as I know, that Section has not been applied within living memory. That explains why the Clause is so framed.
    The actual granting of a pension under other Sections of the Pensions (Governors of Dominions, &c.) Acts is permissive, and my right hon. Friend has the right to decide whether or not a pension can be granted. This power applies in every case.
    Clause ordered to stand part of the Bill.
    Clauses 10 to 15 ordered to stand part of the Bill.

    New Clause.—(POWER TO GRANT PENSION TO GOVERNOR RETIRING UNDER FIFTY-FIVE.)
    The age at which a pension may be granted under the principal Act shall be fifty instead of fifty-five years, and accordingly the word "fifty" shall be substituted for the words "fifty-five" in paragraph (a) of subsection (1) of section one of that Act, in subsection (1) of section nine of that Act (in both places where those words occur) and in subsection (2) of section one of the Pensions (Governors of Dominions, &c.) Act, 1947.—[Mr. Hare.]
    Brought up, and read the First time.
    Mr. Hare: I beg to move, That the Clause be read a Second time.
    The object of this Clause is to reduce from 55 to 50 the age at which a pension may be granted to a Governor. I do not think that the Committee will be surprised when I say that this reduction is not a completely new proposal. There is, in fact, already provision in the Pensions (Governors of Dominions, &c.) Acts for granting a pension at an age earlier than 55.

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    Under Section 1 (1) of the 1911 Act, a pension may be granted to a Governor who has served the requisite number of years but has not reached the age of 55. It can be granted on two main grounds, if he has retired or been removed from his office because of its abolition, or if he has become, in the opinion of the Secretary of State, incapable of discharging the duties of his office by reason of some infirmity of mind or body.
    Moreover, Section 9 of the 1911 Act provides that, in a special case, a Governor who would be entitled to a pension if he had reached the age of 55 may be granted one under that age provided that it is impracticable to find him other appropriate employment in the public service and it is, at the same time, in the interests of the public service to grant him a pension.
    Cases have arisen where retirement at an age earlier than 55 was desirable but where it was not, in fact, appropriate to apply the provisions of the 1911 Act which I have just mentioned. In particular, the application of the provision in Section 9 of that Act could perhaps be regarded as a reflection on the person concerned, and such a reflection would not be appropriate in the cases for which the new Clause would provide. Therefore, Her Majesty's Government proposed that, in appropriate cases, provision should be made for granting a pension between the ages of 50 and 55. I can assure the Committee that these cases are likely to be very rare.
    My right hon. Friend does not intend to treat 50 as the normal age of retirement for governors. Indeed, in the great majority of cases, there is no reason why a Governor should not serve till the age of 55 or even beyond. With those reasons, I hope that the Committee will accept the Clause.
    Mr. Emrys Hughes: Will it be possible, under the terms of this new Clause, for a Governor to be retired at the age of 50 and then for him to come home and become a director of one or two quite prosperous companies?
    Mr. Hare: Or a Member of Parliament. Once a man ceases to be a Governor he becomes a free man, and, I suppose, can do what he likes.
    Mr. Arthur Creech Jones: May I ask whether the initiative to retire may be enjoyed, or is likely to be enjoyed, by the Governor concerned? In other words, if a Governor wishes to withdraw from the service, may he exercise the option of withdrawing or must the initiative to withdraw come from the Secretary of State himself?
    I think that there is some virtue in a Clause of this kind because, speaking from experience, there are Governors who tend to become tired in well-doing, whose faculties are not always quite as acute after the age of 50 as they were and where it would certainly be in the interest of the public service if they could be retired. I believe that there is sometimes great wisdom in a Secretary of State having the power to cut out what I call the "dead wood." If that flexibility is there, and if that discretion is vested in the Secretary of State, then I think that there is a very distinct gain to the public service. Moreover, it stimulates Governors not to grow weary and to keep up a high standard of action. It helps things along and keeps Governors on their toes if they know that this power can be exercised by the Secretary of State at an earlier age than 55. As I have said, I think that there would be some virtue in the adoption of this Clause.
    Mr. Emrys Hughes: Can the right hon. Gentleman assure the Committee that the dead wood will not be grafted on somewhere else?
    Mr. Hare: I hope it will not.
    In reply to the right hon. Member for Wakefield (Mr. Creech Jones), I would say that the initiative can come from either side. It can come at the suggestion of the Secretary of State or from the Governor concerned, but the actual permission rests with the Secretary of State. I think that that covers the right hon. Gentleman's inquiry and that this Clause commends itself to him.
    Clause read a Second time, and added to the Bill.

    New Clause.—(ALLOCATION OF PART OF GOVERNOR'S PENSION TO SPOUSE OR DEPENDANT.)
    (1) The Treasury may make rules for securing that, in such circumstances and subject to such conditions as to proof of good health and other matters as may be specified in the rules,—

    (a) a Governor shall be allowed to surrender, as from the date of his retirement, and

    (b) a retired Governor under the age of seventy who has married since his retirement shall be allowed to surrender, as from the date of his marriage,

    in return for the benefits of the rules, such part of any pension granted or to be granted to him under the principal Act as, subject to the next following subsection, may be specified in the rules, and for enabling the Treasury to grant either to his spouse, or (unless the surrender was made under paragraph (b) of this subsection) to a dependant, a pension of such value as, according to tables to be prepared from time to time by the Government Actuary, is actuarially equivalent, at the date as from which the said part is surrendered, to the value of that part.

    (2) The part of a pension surrendered under the foregoing subsection (whether by virtue of paragraph (a) or paragraph (b) or both) shall not exceed one-third or, where part of the pension is commuted under section four of this Act, one-third of the remainder.

    (3) Any pension under this section for the benefit of a dependant (not being the spouse) of a retired Governor shall be payable in respect of the period, if any, for which the dependant survives him, and any such pension for the benefit of the spouse shall, according as the Governor may, in conformity with the rules under this section elect, be payable either—

    (a) in respect of the period, if any, for which the spouse survives him, or

    (b) in respect both of the period of their joint lives (subsequent to the retirement or marriage), and of the period, if any, for which the spouse survives him,

    and the rules may provide that a pension payable thereunder in respect of the periods mentioned in paragraph (b) of this subsection shall be paid at one rate in respect of the first of those periods and at a higher rate in respect of the second.

    (4) For the purposes of paragraph (b) of subsection (2) of section four of the principal Act (which imposes a limit on the amount of a pension under that Act which a person in receipt of another Crown pension may receive) any part of a pension surrendered by a person in accordance with rules made under this section shall be treated as being received by him.

    (5) Rules under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.—[Mr. Hare.]

    Brought up, and read the First time.
    Mr. Hare: I beg to move, That the Clause be read a Second time.
    The Chairman: I think it would be for the convenience of the Committee if, together with this new Clause, we discussed the one in the name of the hon. Lady the Member for Devonport (Miss Vickers), entitled "Widows' pensions."
    Mr. Hare: This new Clause provides for the allocation of part of a governor's pension and has been put down in order to meet, as far as we can, the proposal contained in the proposed new Clause standing in the name of my hon. Friend the Member for Devonport (Miss Vickers), which we are also discussing. We have gone as far as we can, but to go as far as my hon. Friend's Clause suggests would, in the opinion of the Government, put us right out of line with existing pensions practice.
    In the Civil Service there is no such thing as a pension for dependants provided wholly at the cost of the State, except where an officer has been killed in the execution of his duty. Most Governors who previously served in the Home or Oversea Service will have had an opportunity to provide for their wives by means either of Part I of the Superannuation Act, 1949, or by contribution to the Colonial Widows' and Orphans' Pensions Schemes in respect of territories in which they served. Under Clause 4 of the Bill, a Governor may commute up to a quarter of his pension, and the lump sum so obtained would be available for him to make provision for his wife if he so wished.
    The new Clause which has been tabled by my right hon. Friend proposes that a Governor who is in receipt of a pension under the principal Act shall, if he wishes, allocate up to one-third of his pension to his wife or other dependants. In addition, it also provides that a retired Governor under the age of 70 may make an allocation from his pension if he is married after he retires. It is proposed that the rules to be made by the Treasury about the circumstances and conditions of the allocation shall be on the same lines as those made under Section (2) of the Superannuation Act, 1935, and Section (33) of the Superannuation Act, 1949, as regards allocation of pension by home Civil Servants.

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    If a Governor has taken his right of commuting part of his pension under Clause 4, and subsequently wishes to allocate from his pension, the amount he can allocate in that case is limited to a third of the remainder of his pension. I am sorry that I cannot accept what my hon. Friends suggested, but I hope they feel that in this Clause we have seen their point and gone as far as we can to accept it.
    Miss Vickers: I should like to thank my right hon. Friend for his explanation of this long new Clause and for accepting my object in tabling my new Clause. I understand that Governors are excluded from joining the Widows' and Orphans' Pensions Scheme in the Colonies in which they serve. But Governors can continue in a scheme if they joined before becoming Governors. Consequently, unless a Governor dies in harness, under the Bill his widow gets nothing whatever. That is my main reason in putting down my new Clause.
    I should like to suggest, in respect of paragraph 3 (a) of my right hon. Friend's new Clause, that if we are proposing to use the word "spouse" in respect of a widow, perhaps we might also add "survives him or her", to cover perhaps women Governors in future.
    Mr. Hare: I think I should make quite clear that although my hon. Friend is right in saying the Governor cannot contribute to a pension scheme in the territory in which he is serving as a Governor, he is allowed to continue contributing to a pension scheme in the territory in which he was previously serving. So he is covered. On the other suggestion, I will give that my consideration.
    Clause read a Second time, and added to the Bill.

    Schedule.—(ENACTMENTS REPEALED.)
    Mr. Hare: I beg to move, in page 7, line 19, column 3, to leave out from "one" to "(3)" in line 21 and to insert "subsections (1)".
    This Amendment is really consequential on the adoption of the new Clause to revise the retiring age of Governors.
    Amendment agreed to.
    Schedule, as amended, agreed to.
    Bill reported, with Amendments; as amended, considered; read the Third time and passed.

    STEEL SCRAP (PRICES)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]
    11.0 p.m.
    Mr. R. E. Winterbottom: I am glad to see the Minister of State for the Board of Trade present. I had a note from the Ministry of Supply saying that this was now a matter for the Board of Trade. I am glad that the representative of the Board of Trade is the one who originally dealt with the problem of steel scrap prices when it was first raised.
    On 4th May this year steel scrap prices went up. I understand from a reply reported in HANSARD that the increase was 24 per cent. I also understand that the effect will be to increase the cost of manufacturing steel by 14s. per ton. I wrote to the Minister of Supply and received an answer from the Minister who, I presume, will reply that the increase from 4th May was by an average of £2 per ton.
    I want to raise two matters. The first is that the decision to raise steel scrap prices was taken, I understand, at Cabinet level. The intimation that prices would rise was given to the trade about a week before 4th May. That was a most injudicious thing to do. This trade is not without people who take advantage of the market. There are some who can only be described as "spivs."
    The result of this revelation to the associations dealing with scrap steel was that scrap steel was withheld from the furnaces, in the expectancy of the rise announced for 4th May. It has been calculated that through this leak—in a letter I have received from him the right hon. Gentleman agrees that there was a leak—about £100,000 extra profit went to the steel scrap merchants. Very few benefited in that respect. In the main, the people in the scrap steel trade of this country have a sense of responsibility towards the part they play in the nsational economy.

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    In spite of the fact that the Minister of State indicated in his letter to me on 14th May that the associations connected with the steel scrap industry had been consulted. I have in my possession now statements by responsible leaders of the National Federation of Scrap Iron, Steel and Metal Merchants which say that they were completely opposed to this increase. The only request they had made was for a matter of a few shillings a ton to meet rising transport charges. Instead, they were given this 24 per cent. increase, whatever its effect may be on the national economy.
    The letter from the Minister of State said:
    "A number of trade organisations were consulted in strict confidence. These included the British Iron and Steel Federation, the Joint Iron Council and the National Federation of Scrap Iron, Steel and Metal Merchants."
    I ask the Minister: does the word. "consulted" mean a declaration of an arbitrary decision by the Government to increase the price against the wishes of every responsible official in the organisations he mentioned? Every one of the scrap steel merchants who has a sense of responsibility in the Federation is most angry at the way in which the Government have increased these prices unnecessarily.
    I want to know why the increase was made. According to one reply by the Minister, the indication is that there is a black market in scrap steel, so he is going to raise the official price of scrap steel to the level of the black market price. By raising that price he has raised the price of scrap steel in the black market. What kind of a confession is that for a responsible Minister of the Government, who says, "We will countenance, encourage and abet those who are getting more than they should through the black market"?
    What about the cost of steel? If this country is to survive it can only be by keeping down its prices as much as possible, especially in the export trade. Everyone who reads the declarations of the Government in respect of the export trade will know that the Government are constantly urging that prices should be kept as low as possible. Is it not hypocritical for the Government arbitrarily, against the wishes of the associations concerned—which say that they can sell scrap
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    at the prices at which they were previously—to drive the prices up whilst declaring they should be kept as low as possible?
    Since this question arose I have been to many important scrap steel merchants and learned of their experience since the rise took place. I would agree with the Minister if he says that our prices are still the lowest in the world, but that is no reason why the Government should arbitrarily increase them. According to these merchants this increase has not resulted in one ounce more scrap steel being fed to the furnaces. They say that the probability is that it will not increase the supply. What is the effect of this price increase? At least 14s. a ton will go on the price of British manufactured steel. That, surely, will have effect on those steel manufacturers who are entering the export trade. The Government are pricing our exports out of the market. Responsible men in the industry, knowing the seriousness of our economic position, heartily condemn the Government for their arbitrary action.
    The Government have approached the Federation of British Industries and the trade unions, begging the former to use its influence to prevent wage increases, despite constantly rising prices; and asking the unions to restrain wage increase applications. They have also pressed upon the nationalised industries the need for stabilisation of prices. At the same time, in a matter vital to a raw material which affects almost every industry in the complicated British economy, the Government have voluntarily, gratuitously, and for no reason, given this increase in prices, which has been condemned by everyone in the trade, and particularly by the associations.
    I quote this from a responsible statement made by a leader of the Federation:
    "… a step which I feel is entirely contrary to the national interest and, quite apart from the anti-inflationary endeavours they are vitally concerned with, our general welfare, and it is here"
    that is, in the association,
    "that we should place on record that there was no desire on the part of the National Federation of Scrap Iron, Steel, and Metal Merchants for such an increase, and I am sure that such a step will be deplored by a vast majority of our members"

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    I could continue with quotations in the same strain from responsible officials of all the organisations concerned.
    I think I have made out a case which justifies my asking why this increase was given against the wishes of the trade. Is this another act which shows clearly that this Government are partisan in almost everything they do? They will refuse to give anything to the worst-off sections of the community, but to others give far too liberally. We have had an example in this Chamber tonight, namely, liberal giving to Governors of British Colonies, though there is withholding from old-age pensioners. They are giving to financiers, to brewers and to a whole list of others, but to those who are in need they give nothing. Therefore, because of this attitude, which has been described in this House tonight as appalling, I suggest that we are entitled to hear why the Government have taken this course.
    11.15 p.m.
    Mr. Cyril Bence: It has been said before, and my hon. Friend the Member for Brightside (Mr. R. E. Winterbottom) said it again this evening, that the object of increasing the price of scrap was to eliminate the black market. I do not know whether or not that is true, but I should be one of the first to admit that this has been a most difficult problem in the engineering industry for many years, even before the war. In a scarcity market it is difficult to get a flow of raw products to the different processes in the industry. There have been tendencies for raw materials to be hived off, with underhand means of payment.
    I want to know whether the motive behind the increase of 25 per cent. was to swallow the black market. I assure the right hon. Gentleman that such a method will never succeed on an increasing scarcity market. As a result of the expansion we have had since 1939, we have had a progressively rising demand for raw material for blast furnaces and a falling supply. The potential black market is always there, whatever the price.
    Another important point is that, with technological development in steel and engineering processes, everybody from the directorate down to the office boy, tries to claim an increased reward for raw
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    material, for labour and for services. When we improve the technological processes in the steel and engineering industry admittedly we create higher conversion values, but we must not assume that we can, therefore, afford to pay more for the raw material because many other people want more for the services they render. This is causing a drag within the industry. I hope that the Minister will consider what I have said.
    11.18 p.m.
    The Minister of State, Board of Trade (Mr. A. R. W. Low): I have no quarrel with the hon. Member for Brightside (Mr. R. E. Winterbottom) for raising this matter. He has been in correspondence with me about the increase in the average price of scrap which took place recently. The increase was one of £2, from the average price of £8 10s. to an average price of £10 10s. per ton. He was concerned with the leak, and with the subject of consultations which I will come to at the end of my reply.
    The hon. Member posed a number of questions, and I am sure that he is right to ask us how this increase in the price of scrap fits into what might be called the price stability campaign, and why, in fact, it was made. I will try, very shortly, to explain why we decided to make an increase in the price of scrap.
    The House will know that scrap and pig iron are substantially interchangeable as raw materials both for steel making and for foundry work. That is clearly set out in the Iron and Steel Board's Report, 1954, at paragraph 102. If the price of scrap is kept artificially too cheap, then steel furnaces and foundries prefer to use scrap rather than pig iron. That would reduce the demand for pig iron and thus discourage the expansion of blast furnaces, which is essential to the proper expansion of iron and steel production in Great Britain, which ought not to be based on imported scrap. I do not think that there will be any issue between us on that point.
    The steel industry has for seventeen years secured a balanced relationship between the effective price of pig iron and scrap by means of their scrap levy, but the foundry industry has no such scheme. The inevitable result of keeping scrap at too low a price would be to increase the demand for it from the founders and to

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    discourage the use of pig iron by founders. This would reduce the amount of scrap available to steel furnaces.
    In fact, in 1955 when pig iron prices increased and the scrap price did not, the foundries used more scrap than before. Moreover, though inside the steel industry the costs of using scrap and pig iron are equalised whatever the relationship of prices, it is true that, taking the industry as a whole, artificially too cheap scrap must encourage the use of scrap and discourage the use of pig iron. But we are short of scrap in the United Kingdom, and if we wish to use more scrap we have to import it, at a very considerable cost, at about £26 10s. per ton. The total bill last year for imported scrap was £22 million.
    Our balance of payments gains if, instead, we make more pig iron, which means higher imports of iron ore, and the import costs of iron ore is about £5 10s. per ton of steel produced. I think that the House will pay attention to those comparative figures.
    The House will also be glad to know that since pre-war pig iron production has grown from 6·8 million tons a year in 1938 to 9·7 million tons a year in 1951, and now to 13½ million tons a year, which is the annual rate at which pig iron production is running this year—a very sizeable and welcome increase. For that reason, it seemed to us right that we should maintain a proper relationship between the two prices.
    Whatever may be said about the effect upon the supplies of home scrap of increasing the price of scrap, no one will quarrel with me when I say that an increase in the price of scrap will not reduce the supplies of home scrap for the steel and foundry industries.
    What should be the price of scrap in order to get this balanced relationship? We could argue about that. It has been said that the economic price of scrap should be 85 per cent. of the price of pig iron. At today's pig iron price, £18, scrap should be about £15 15s. per ton, on that basis. But for some time now, since the beginning of the war, the Government have maintained control on the price of scrap, and the Iron and Steel Board advised in its 1954 Report that that should continue.
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    In settling the price at which it should be controlled recently we have had regard particularly in our latest increase to the relationship which the prices of scrap and pig iron have had during this period. In the middle of 1955 the difference between the two—the price of scrap and the price of pig iron—was £7 5s. a ton. The difference was then increased to £8 11s. a ton because the price of pig iron increased. This year that difference would have risen to £9 13s. a ton but for the increase in the price of scrap which we made. The difference is now £7 10s., and it really seemed to us wise to restore the earlier relationship in this way.
    Quite properly, the hon. Gentleman raised the question of what is the effect of this upon the price of steel, and he said, quite accurately, that the £2 per ton increase in the price of scrap has resulted in a 14s. per ton increase in the average price of steel. That is 14s. out of the increase in the average price of steel of about 5 per cent. in May. But that does not add the same amount to the costs of the steel user who gains from the increase in the price of scrap which he sells. In fact, some parts of the engineering industry may gain more by the increase in the price of scrap than they will lose by this 14s, element in the increase in the price of steel that they buy.
    No one, certainly not I, who has some responsibility for overseas trade, will quarrel with what the hon. Gentleman said about the importance of the cost of steel to exports. Of course they are important, and of course every element in our prices is important to our exports, particularly at this time, but we cannot overlook the importance of steel production in our home economy. The hon. Gentleman said, righty, that British steel is still cheaper than other steel in the world, and the more we can have of that cheaper steel the better for our exporting industries.
    I come to the question about consultation. Why, it may be asked, did we do this against the advice of the merchants and the steel industry? Let me make clear our position about consultation in this matter. Our statutory duty is to consult the Iron and Steel Board on the policy question whether there should be an increase or not. We did consult the Board. It is not, of course, the practice to disclose the advice which we receive.

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    We take responsibility for the decision. We carried out our obligation to consult.
    After settling the policy we consulted the merchants, the National Federation of Scrap Iron, Steel and Metal Merchants, which the hon. Member mentioned, the British Iron and Steel Federation and the Joint Iron Council on the detailed method of carrying out our policy decision. This is the normal practice which has been adopted consistently since the war.
    I regret very much that there is some evidence that the proposal to make an increase was known before the Order was made—known outside the actual individuals we consulted. It has not been found possible to trace the source of the leak. I strongly deprecate such breaches of confidence, and we have made it clear to all concerned that in future, where increases in the price of scrap are contemplated, we shall have to ensure that there is no leak, if need be by limiting consultation.
    I would make clear, too, in response to some doubts that have been expressed in the scrap trade, that we have no further increase in contemplation at present. I should also like to make clear, in response to something which the hon. Gentleman said, that despite this alleged leak of information, deliveries of scrap to steel works and foundries in April, which is the month with which we are concerned, the month before the Order was made, were at the average rate of 128,000 tons per week.
    Mr. R. E. Winterbottom: I took only the week before 4th May.
    Mr. Low: Let me give the figures to show what happened.
    The average rate was 128,000 tons per week, 8,000 tons above the rate in February and 6,000 tons below the rate in May.
    I know that the hon. Gentleman is particularly concerned about what happened in his constituency. I should like to say to him, if I may, and without appearing to be patronising, that I think it is right and proper that he should be concerned, and I congratulate him on having taken this matter so seriously, and I thank him for the way in which he has brought this to our notice. I hope very much that he and the House are now satisfied that it was right and proper for us to make the increase.
    I hope that they are satisfied, too, that we went through the proper consultation procedures. There are many details—if the hon. Gentleman will look at the Order he will see how detailed the matter is—and they can be properly settled only by consultation with people well versed in the trade. I trust that the hon. Gentleman will feel that I have expressed a proper reaction to the events as they took place.
    Adjourned accordingly at twenty-nine minutes past Eleven o'clock.

TELEPHONE SERVICE
  West Ham
  West Ham
  Test Match Scores (Special Service)
  Test Match Scores (Special Service)
WIRELESS AND TELEVISION
  Licences (Old-Age Pensioners)
  Licences (Old-Age Pensioners)
  B.B.C. (Second Television Channel)
  B.B.C. (Second Television Channel)
POST OFFICE
  Mail (Opening)
  Mail (Opening)
  Sub-Offices, Birmingham
  Sub-Offices, Birmingham
  2d. Stamps (Colour)
  2d. Stamps (Colour)
  Postal Orders
  Postal Orders
ROYAL AIR FORCE
  Air Ministry (Staff)
  Air Ministry (Staff)
  Grade III Men (Annual Training)
  Grade III Men (Annual Training)
ROADS
  Bridge, Doncaster (Widening)
  Bridge, Doncaster (Widening)
  Motorways (Steel)
  Motorways (Steel)
  Programme
  Programme
  Eastern Avenue Extension, Leyton
  Eastern Avenue Extension, Leyton
  Alterations and Improvements, Leyton
  Alterations and Improvements, Leyton
TRANSPORT
  Canals (Drowned Children)
  Canals (Drowned Children)
  Decca Navigator System (Fishing Vessels)
  Decca Navigator System (Fishing Vessels)
  Driving Test (Passes)
  Driving Test (Passes)
  Accidents, Ponteland
  Accidents, Ponteland
  B.O.A.C. (Britannia Aircraft)
  B.O.A.C. (Britannia Aircraft)
  Traffic Conditions, Cranford (Deputation)
  Traffic Conditions, Cranford (Deputation)
  Road Vehicles (Parking)
  Road Vehicles (Parking)
  Road Haulage Disposal Board (Cost)
  Road Haulage Disposal Board (Cost)
MINISTRY OF DEFENCE
  Forces, Germany (Economy Measures)
  Forces, Germany (Economy Measures)
  Defence Departments (Expenditure)
  Defence Departments (Expenditure)
  General Gruenther's Visit
  General Gruenther's Visit
  Recruiting Figures
  Recruiting Figures
  France (Military Equipment)
  France (Military Equipment)
  EGYPT (GENERAL SIR BRIAN ROBERTSON'S VISIT)
  EGYPT (GENERAL SIR BRIAN ROBERTSON'S VISIT)
CYPRUS
  Forest Fire (Inquiry)
  Forest Fire (Inquiry)
  Felled Orange Trees, Famagusta (Compensation)
  Felled Orange Trees, Famagusta (Compensation)
  Collective Fines
  Collective Fines
  Situation
  Situation
  Education
  Education
DOMINICA
  Dr. William Steiner
  Dr. William Steiner
  Practising Doctors
  Practising Doctors
ROYAL NAVY
  N.A.A.F.I. Board of Management (Naval Member)
  N.A.A.F.I. Board of Management (Naval Member)
  Ships (Repair)
  Ships (Repair)
  Admiralty (Staff)
  Admiralty (Staff)
  Installations, Freetown
  Installations, Freetown
  Mombasa
  Mombasa
  Officers (Flag Rank)
  Officers (Flag Rank)
SCOTLAND
  Deserted Wives (Rent Acts Protection)
  Deserted Wives (Rent Acts Protection)
SCIENTIFIC AND INDUSTRIAL RESEARCH
  Research Ship "Sir William Hardy" (Programme)
  Research Ship "Sir William Hardy" (Programme)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

  VISCOUNT CHERWELL
  The Right Honourable Frederick Alexander Baron Cherwell, C.H., having been created Viscount Cherwell, of Oxford in the County of Oxford—Was (in the usual manner) introduced.
  The Earl of Harrowby—Sat first in Parliament after the death of his father.

OUTLINE SPECIFICATION FOR TRANSPORT AIRCRAFT
2.37 p.m.
VISCOUNT THURSO: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when the outline specification far an aircraft for B.O.A.C. long-range routes in the period 1964–66 was prepared and what progress has since been made with the project.]
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): My Lords, the outline specification for a long-range jet aircraft was issued to manufacturers by the Ministry of Supply on 7th February this year. This outline specification had naturally been under consideration for a little time, and was prepared under the ægis of the Transport Aircraft Requirements Committee. A number of design studies have now been received by the Ministry of Supply, and they are now being carefully examined. But I regret it is too early as yet to make any statement.
VISCOUNT THURSO: My Lords, could the noble Earl tell us whether this Committee is examining not only the design for the long-range transport aircraft to which he has referred but other designs for military aircraft as well?
THE EARL OF SELKIRK: My Lords, that is correct. This Committee is free to examine designs for any transport aircraft, whether military or civil.

THE TRANSPORT AIRCRAFT REQUIREMENTS COMMITTEE
VISCOUNT THURSO: My Lords, I beg to ask the Second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the Transport Aircraft Requirements Committee was responsible for preparing the outline specification for an aircraft for B.O.A.C. long-range routes in the 1964–66 era; how often it met in 1955 and how often during the current year.]
THE EARL OF SELKIRK: My Lords, the outline specification to which I referred in answering the last Question was issued by the Ministry of Supply but was prepared under the ægis of the Transport Aircraft Requirements Committee. The Airways Corporations are, of course, members of this Committee, and their technical staff worked in close association with the technical staff of the Department in the preparation of the details of this outline specification. The Committee met twice in the course of 1955 and has held one meeting during the current year.
VISCOUNT THURSO: My Lords, in view of the immense importance of the work on which it is engaged and the high hopes which Her Majesty's Government have invited us to pin to the work of this Committee for the production of an aircraft which will be a lap ahead of the Americans in the vital first part of the 1960s, would it not be desirable for this Committee to meet more often? Your Lordships will remember that in a recent debate the noble Lord, Lord Douglas of Kirtleside, told us that although he was a member of the Committee, he had only once been summoned to its meetings.
THE EARL OF SELKIRK: My Lords, the Transport Aircraft Requirements Committee meet to consider major matters of policy, on which they give advice to the Minister, but a great deal of the work is done by technical sub-committees and by technical members, both of the Department and of the Corporations, on

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whom this work more appropriately falls. That work is going on, whereas, of course, the Transport Aircraft Requirements Committee meet only to advise on major matters.
VISCOUNT THURSO: My Lords, may I put one further question to the noble Earl? He will realise that after the high hopes which we all attached to the splendid Comet, which flew with such astonishing success and world-wide acclaim for several months on scheduled air routes, we all suffered a tragic disappointment owing, to the accidents which occurred to that aircraft. There is in my mind, and I believe in the minds of other noble Lords, an impression that there is not the same impulse, the same concentrated effort and drive, being put behind the construction of a new aircraft which will be as far ahead of its contemporaries in the early part of the 1960s as the Comet was of its contemporary aircraft. Could the noble Earl give us some indication, some assurance, that Her Majesty's Government are putting all possible drive and all the required resources, in brains, labour and capital, behind the project of producing this new civil air liner for the early 1960s?
THE EARL OF SELKIRK: My Lords, I fully appreciate what the noble Viscount has said. We attach tremendous importance to the successful results which may or may not come from this Committee's recommendations or con-considerations. I assure the noble Viscount that a tremendous body of brain and effort is being put into this matter which certainly cannot be judged simply by the meetings of the Committee to which reference has been made. I think it would be misleading to give the idea that that is anything more than the final point at which decisions on major matters are made. The work lies underneath. The noble Viscount may rest assured that we realise the tremendous importance of the matter he has raised.
LORD WINSTER: My Lords, may I ask the noble Earl this question? Is it not the case that high hopes were built upon the Comet and that the idea behind the Comet was that we should do what I will call briefly a "leap-frog"? And is it not the case that those high hopes have been dashed; that the leap-frog
848
has failed; that it is now hopeless to try to catch up, and that our one hope of attaining priority in the world of civil aviation now rests upon our doing another leap-frog by concentrating the efforts of our aircraft industry on producing a supersonic airliner?
THE EARL OF SELKIRK: My Lords, I agree entirely with what the noble Lord has said about seeking to do a leap-frog. I would not care to comment, however, on the second part of his question, which raises immense technical problems, as I think he appreciates. But I can assure him that these matters are clearly before the minds of those who have to consider them. What he said, I am sure, will fortify them, in the knowledge that he himself is so interested.
VISCOUNT THURSO: My Lords, may I ask one further question? Projects have been largely canvassed in the newspapers and in knowledgeable articles for the modification of the Comet IV in such a way as to enable it to do the Transatlantic flight—that is from Idle-wild to Heath Row—in one hop. Can the noble Earl tell us whether such a project has had further consideration and whether modifications of the Britannia are also under consideration by this Transport Aircraft Requirements Committee?
THE EARL OF SELKIRK: I can tell the noble Viscount that that project has been considered. I would not go further than that at present. I would rather not say anything about the details of the projects which are being examined.
LORD WINSTER: My Lords, I do not want to press the noble Earl further, but may I ask whether he is aware that in putting the question which I put to him just now I did so with complete confidence in our aircraft industry, in the engineers and in the designing staff? What I am asking is—and I am sure the noble Earl will assure me that this is the case—whether everything the Government can do will be put behind our aircraft industry in endeavouring to perform what I have roughly described as a leap-frog.
THE EARL OF SELKIRK: My Lords, I can assure the noble Lord that the Government will support this strongly. The noble Lord has spoken of putting

849
"everything" behind it, and I have to say that there is a slight modification to "everything". I can assure him, however, that there is very real support for those concerned in this matter, which, may I point out, may run into millions in a single development contract. It is not a matter which can be entered into lightly. It will he entered into with the fullest possible consideration and with the best brains that we have available.
LORD WINSTER: I beg to thank the noble Earl for his reassuring reply.

TOWER IN BATTERSEA PARK
2.55 p.m.
LORD CONESFORD: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what weight of concrete or other material is to be sunk into the soil of Battersea Park to form the base of the proposed tower and its surroundings; what is the estimated cost, at present prices, of removing this material together with the tower and of restoring grassland in 1967; whether Festival Gardens Limited have undertaken to make this restoration; and what guarantee there is that they will have the means to fulfil such an undertaking.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER): My Lords, a condition was attached to the planning consent that on or before the terminal date in 1967 the tower should he removed and the land reinstated to its former condition to the satisfaction of the London County Council. The Government has no reason to think that the Company lack the means to fulfil this condition. The other information asked for relates to matters which are outside the responsibilities of Her Majesty's Government.
LORD CONESFORD: My Lords, am I to understand from that Answer that at the time the Minister gave this consent he had before him the letter of the Royal Fine Art Commission saying that because of the serious damage the project would do to the amenities of the Park, and indeed to the whole stretch of the river, it
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strongly urged that planning consent should not be granted? Is the noble Earl aware not only that he had that before him, but also that he had apparently not ascertained what the physical work would be? Otherwise he might have found that it might render the restoration of these amenities for ever impossible. Further, may I ask whether any assurance can be given that Festival Gardens Limited will even be in existence in the year in question? There is nothing to stop them from being wound up this year.
THE EARL OF MUNSTER: As regards the first part of the noble Lord's question. I imagine that the letter from the Royal Fine Art Commission was in the hands of my right honourable friend before he gave his consent. As regards the physical work of reinstating Battersea Park in 1967, my right honourable friend has no doubt whatever that That in fact can be done and will be accomplished. With regard to the third question, which concerned Festival Gardens Limited, I cannot, of course, say whether they will be in being in 1967. The financial profit which this Company are now making, makes it pretty certain, however, that they will still be in existence at that date.
LORD CONESFORD: My Lords, may I ask Her Majesty's Government whether even at this late stage they will not reconsider their decision? Are they aware that they will incur the real hatred of those who love the beauty of London if they persist in this outrageous vandalism?
THE EARL OF MUNSTER: My Lords, I appreciate my noble friend's point, but of course he will realise that there are tens of thousands who welcome the erection of this tower in Battersea Park.
LORD WINSTER: My Lords, may I ask the noble Earl whether this matter is not a further proof of the fact that while there is money in ugliness there is no money in the preservation of beauty, and consequently ugliness prevails?
THE EARL OF MUNSTER: The views of the noble Lord are unique to himself.
LORD WINSTER: Not at all.
LORD CONESFORD: Can the noble Earl say which the Minister of Housing hates the more—Battersea Park or the Royal Fine Art Commission?
THE EARL OF MUNSTER: I am sure my right honourable friend has not given a major decision on that point at all.
LORD DERWENT: My Lords, may I ask a further question? As I understood the noble Earl, he said that he had no idea what the cost might be of restoring the Gardens in 1967. If the cost is so great that it financially pays Festival Gardens Limited to go into liquidation or be wound up in 1966, who then will restore the Gardens in 1967?
THE EARL OF MUNSTER: Of course it can be enforced by the action of the London County Council, who have powers under the Town and Country Planning Act.
EARL ATTLEE: May I ask the noble Earl whether this is part of the Government's economy drive?
THE EARL OF MUNSTER: The noble Earl probably forgets that this has nothing to do with Government money at all. It is a private enterprise matter.

PRESS AUTHORITY BILL [H.L.]
THE EARL OF SELBORNE: My Lords, I beg leave to introduce a Bill to establish a Press Authority and to confer powers upon it; and to move that the Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Earl of Selborne.)
On Question, Bill read 1a; and to be printed.

BUSINESS OF THE HOUSE
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I was under the impression that the noble Marquess the Leader of the House was going to tell us something as to what was expected with regard to to-day's Business.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I understood it had been agreed by noble Lords opposite that we should sit rather later than usual to-night, with a view to making progress with this stage of the Restrictive Trade Practices Bill, and Her Majesty's Government are agreeable to that course. We shall just have to see what progress we make.

RESTRICTIVE TRADE PRACTICES BILL
3.0 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD TERRINGTON in the Chair]
Clause 1 [Appointment and functions of Registrar]:
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): I am glad to say that we start off our progress on this Bill with a largely uncontroversial Amendment. The effect of this Amendment is to extend the provisions of the Documentary Evidence Act, 1868, to enable prima facie evidence of any document issued by the Registrar to be given in all courts of justice by the production of a copy of the document certified by an assistant registrar or other officer authorised by the Registrar. This provision is merely a further lubrication of the registration machinery. I beg to move.
Amendment moved—
Page 2, line 16, at end insert ("and as if the regulations referred to in that Act included any document issued by the Registrar.")—(Lord Maticroft.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Cause 2 [Establishment of Restrictive Practices Court]:
LORD MANCROFT: The effect of this Amendment is to make the Restrictive Practices Court a superior court of record. The court will thus have the same status as the High Court; although it will not be a division of the High Court. An effect of the Amendment is to prevent the High Court from restraining, removing or otherwise controlling the orders and proceedings of the Restrictive Practices Court by prohibition, certiorari or mandamus. I am prepared to give a long, inaccurate and confused lecture on the use of prerogative writs, but I think that at this stage that will hardly be necessary. I beg to move.
Amendment moved—
Page 2, line 41, after ("a") insert ("superior").—(Lord Mancroft.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: I entirely agree with this Amendment. I hope that what the noble Lord said about being prepared to be inaccurate is not going to apply to the general conduct of the Bill.
LORD MANCROFT: I hope that I know a little more about the Bill than I do about prerogative writs.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 to 5 agreed to.
Clause 6:
Agreements to which Part I applies
(7) Where specific recommendations (whether express or implied) are made by or on behalf of a trade association to its members or to any class of its members, as to the action to be taken or not taken by them in relation to any particular class of goods or process of manufacture in respect of any such matters as are described in paragraphs (a) to (e) of the said subsection (1), this Part of this Act shall apply in relation to the agreement for the constitution of the association as if each such member and any person represented on the association by any such member were thereby required to comply with the recommendations, notwithstanding that the agreement does not so provide or expressly provides to the contrary.
LORD MANCROFT: The purpose of this Amendment is to make it clear that an obligation which is expressed in positive terms, but which is negative by implication, is to be regarded as a restriction for the purposes of Part I of the Bill. A case in point would be where a group of manufacturers agree to sell 90 per cent. of their output to a particular customer. This implies an obligation not to sell more than 10 per cent. to any other customer and is therefore a restriction. I beg to move.
Amendment moved—
Page 5, line 29, after ("obligation") insert ("whether express or implied and").—(Lord Mancroft.)
VISCOUNT HAILSHAM: I should like to say a word to my noble friend Lord Mancroft about this definition. I am distinctly unhappy about the description of a "negative obligation." I think fiat all obligations are both negative and positive, and I do not believe that in practice this
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will prove a satisfactory definition of a restrictive practice. Take, for instance, one of the negative obligations contained in the Decalogue: "Thou shalt not commit adultery." That is negative enough you would think, but to translate it into a positive obligation and say, "Thou shalt commit adultery" would be equally restrictive. It would restrict one from proper conduct. I cannot conceive of any obligation which is not both negative and positive. I do not think that a definition is so easily achieved by the insertion of the words "whether express or implied". My own feeling is that the definition of restrictive practice ought to be referred; not to the express negative but to the limitation of the trading activities of traders by reference to the matters contained in paragraphs (a) to (e) of subsection (1) of Clause 6. This definition referring to a "negative obligation" is one which in practice will prove meaningless and difficult to apply, and I am wondering whether the Government will not consider it again.
LORD MANCROFT: I cannot answer the noble and learned Viscount on the question of the Decalogue without taking advice from the Lords Spiritual on the Benches on my right, or I shall get into very deep water. In regard to the other point, I will certainly consult my draftsmen and advisers and, if I can do anything to meet this difficulty, I shall be happy to do so.
On Question, Amendment agreed to.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved, in subsection (7), after "members," where that word occurs a second dine, to insert "or to any other person or persons". The noble Viscount aid: In dealing with this part of the Bill, I think that, in view of the general provisions of the clause, it is important hat we should call attention to certain trading practices, restrictive in their character, which exist at the present time though to all intents and purposes no written agreement exists. Where such practices exist and no formal agreement is apparent, I suppose that it should be presumed that such an agreement exists. As I am not clear about what view the Government take about this matter. I shall be glad to have some information. In my long experience of dealing with these matters I find that those who have been subject as much as

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anybody to these practices, the members of industrial and provident societies, have encountered a great variety of restrictions, some under formal agreements and some under arrangements which are made by people who desire to back restrictive practices but do no more than maintain an information service among themselves about what sort of restriction they want to observe.
The societies I have mentioned have had extensive experience of this form of restriction. If noble Lords would be kind enough to remember the strong speech I made last year in dealing with the report of the Monopolies Commission, they will remember that I referred to the lengthy efforts that have been made by the organisation with which I was then officially connected to get into the gramophone and wireless trade, as it ought to have every right to do as an ordinary and efficient trading organisation. There is no apparent trade association in the gramophone and wireless trade, but we came up against the most rigid restriction, a restriction which exists very largely to-day. I want to put this point to the Government, because they are so fond of supporting private enterprise. This sort of thing is not always in the best interests of the general economy of the country. If free competition is allowed to move into specially restricted channels, then in the long run the only alternative for those who have to meet these restrictions is to enter into new production themselves and thereby incur an expenditure which, in our present economic position, is not well directed and well placed in the national interest.
If you have an efficient industry producing at the peak of line production something that is really wanted by the public in a time of restricted capital, why should it not be possible to have that product distributed through any one of the efficient and economic distributive channels in the country, without driving any of them into new capitalising and production? That, it seems to me, is a matter for general consideration by the Government. We, at any rate, have had to do that on more than one occasion—perhaps it has been, in one sense, a good thing for the industrial provident associations, but it is not necessarily the best in the general capitalisation position of the country at large.
The same position applies with regard to petrol. The suppliers of petrol prohibit the payment of any dividend on retail sales of petrol. It is interesting to note that in this country the distributive oil companies, without having a formal agreement, can get agreed action in all these matters, whilst even in a great capitalist country like the United States of America, there is now a whole chain of what they call "gas stations"—but which are, in fact, petrol stations—owned by co-operative organisations, which have backed their business there by even going into the actual oil production business as well as that of stations. In America there is no restriction of this kind exercised by the very companies who, through their British counterparts in this country, have this control and restriction of advantage to the consumer of petrol in this country. Up to September, 1948, the Petroleum Board were responsible for seeing that co-operative societies did not pay dividend upon petrol sales. Since this date there has been no written agreement, but the companies continue to prohibit the payment of dividend. It is obvious, therefore, that these companies are following a declared policy, although no trade association is now responsible for recommending such action.
If we take the case of newspapers—and it is a case of great substance, in my view—we find that newspapers are gradually being excluded from being sold in any co-operative establishment. There is an understanding between Fleet Street, as well as certain provincial newspaper headquarters, and an organisation called the Retail Newsagents' Association, not only that no co-operative society shall be supplied but that no one shall carry on a business in any part of the country, other than an existing business, which is reckoned to be covered for newspaper distribution by the Retail Newsagents' Association. And the newspaper proprietors collaborate with them in refusing supplies to any shop to be opened in the district which is to receive (shall I call it?) the "black ball" from the Retail Newsagents' Association. There is, apparently, no connection between the two; nor do we know of any formal written agreement. But it is a somewhat heavy restrictive practice. These cases make me draw attention to the matter upon this clause, and to move this

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Amendment in order that we may have some statement from the Government as to exactly how they view these matters, and how they can reconcile this kind of practice with their assumed support of individual enterprise in the country. I beg to move.
Amendment moved—
Page 6, line 18, after the second ("members") insert ("or to any other person or persons").—(Viscount Alexander of Hillsborough.)
3.16 p.m.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): I am grateful to the noble Viscount for putting this point. I should like to say, on the general aspect of the matter, that I feel strongly that the registration provisions can have the effect of compelling the light to be let in with regard to a number of agreements; and this is a most important aspect of the method of dealing with restrictive practices. It had some success in our previous proceedings and in fact, as I said on Second Reading, the success that it had is one of the reasons for this Bill. As I am sure the noble Viscount is aware, in Sweden, if my memory is right, the fact of registration was responsible for the cessation of 36 per cent. of the practices and a variation of another 16 per cent., bringing over half the practices into a very different state. Therefore, on the general point the noble Viscount made by way of introduction to his speech, I do not think there is anything between us.
With regard to this special provision of subsection (7) of Clause 6, that was introduced to deal with informal methods, and a particularly obvious informal method where the trade association passes a resolution and the members, without any specific agreement, adopt the recommendation which the resolution contains. The noble Viscount will appreciate that, if these recommendations relate to any particular class of goods, and are in respect of the matters that are described in paragraphs (a) to (e) of subsection (1) of the clause, they will come within the scope of Part I of the Bill. The Amendment seeks to extend this provision to such recommendations when made to non-members of the trade association.
We had been considering this matter before we heard the speech of the noble
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Viscount, of course, but I am told that it roust be rare that trade associations make recommendations of this kind to nonmembers; and where they do, the nonmembers could not be regarded as being party to the constitution of the association. As the noble Viscount will appreciate, that is the basic document on which the case provided in the subsection is dealt with. There is the constitution of the association, and, therefore, the constitution and the action on the recommendations provides something on which one can work and which can be registered. It will be the constitution of the association which is the basic document that is to be registered in the case of recommendations to members; indeed, it is difficult to see what other document could be proper. In the cases where non-members have to observe the recommendations, I think there would almost certainly be some basic document which one could get hold of and could register. However, perhaps the noble Viscount will allow me to study his speech, and particularly to study, with the help of those who assist me in these matters, the specific cases which he gives. At the moment I do not see how his Amendment would make the subsection work more efficaciously. Therefore, I should like to look into it and perhaps the noble Viscount will not press the Amendment at this stage.
LORD LUCAS OF CHILWORTH: I am glad the noble and learned Viscount has suggested that course, because it hits at the heart and matter of what this Bill purports to do—that is, to do away with discrimination. When the noble and learned Viscount reads my noble friend's speech and applies his mind to it he will find it an interesting study because he may find it difficult to find any specific recommendations emanating from a particular trade organisation; and yet discrimination is rampant. I do not know whether, in the newsagents' world, the noble and, learned Viscount will be able to find any specific recommendation that the Newsagents' Association, or the Newspaper Proprietors' Association via the Newsagents' Association, should prohibit the supply of newspapers for distribution to various classes of business. But it does happen, and that is one of the mysterious things. Whether there is a "bush telegraph" or a secret underground organisation I do not know, but it happens in all

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too many cases. I feel certain that my noble friend will supply the Lord Chancellor with any other facts he requires, so that he can look into this point to see whether he can strengthen this clause so that evasion of the intent of the Government does not take place—an intent which, as I read it, is to do away with these practices of trade discrimination.
THE LORD CHANCELLOR: I am grateful to the noble Lord, Lord Lucas of Chilworth, and I want to make the position quite clear. I was dealing with the Amendment to subsection (7) of Clause 6, and I am anxious to know if that particular aspect of the matter—namely, the recommendations of trade associations—needs further consideration. Of course, both noble Lords will appreciate that subsection (3) of the same clause says that "agreement" includes any—I stress "any"—agreement or arrangement. That means that it does not matter for the purpose of the Bill whether the agreement is written or not. The point that was in my mind was that it might be that the cases quoted by the noble Viscount were not recommendations of a trade association to non-members but an informal arrangement between groups of traders. They would then, of course, be caught as an informal arrangement under subsection (3) of Clause 6, though they might not be actually recommendations of a trade association. As I said, I want to show the noble Viscount that we are not trying to avoid catching informal arrangements—we want to catch them under subsection (3). But if this subsection needs tightening, I shall be happy to look at it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am obliged to the noble and learned Viscount. What I should like to know is whether, when we come to a further statement on the Report stage of the Bill, the noble and learned Viscount will be able to tell us that if such a practice is found and is not registered at a given date, it will be possible for those who are being discriminated against to approach the Court and bring evidence showing why such a practice should be registered.
THE LORD CHANCELLOR: I shall be glad to include that in the statement. It is an important matter, and I should
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like to be able to tell the noble Viscount and his friends the machinery with complete exactitude.
VISCOUNT ALEXANDER OF HILLSBOROUGH: With that assurance. I am glad to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.25 p.m.
LORD MANCROFT LORD MANCROFT moved, in subsection (7), to leave out "such matters as are described in paragraphs (a) to (e) of "and to insert" matter described in ". The noble Lord said: The next two Amendments, Nos. 5 and 6. together with Amendments Nos. 20 and 31, are designed to improve the procedure for the registration and examination by the Court of recommendations by trade associations. Subsection (7) of the clause we are now discussing brings within the scope of Part I of this Bill cases where a specific recommendation is made by, or on behalf of, a trade association to its members as to the action to be taken, or not taken, by them in relation to any particular class of goods or process of manufacture in respect of any of the matters described in subsection (1) of this clause. The use of the word "specific" indicates that general exhortations by associations of industrialists to their members—for example to keep prices stable—would not come within the provisions of the subsection. It is, however, the Government's intention that recommendations directed to the actual prices or conditions of sale, for instance, of particular classes of goods, should be covered by the Bill, since it is quite common, as your Lordships know, for action between traders to be concerted by the observance of recommendations rather than by compliance with firmer undertaking.
VISCOUNT ALEXANDER OF HILLSBOROUGH: May I ask the noble Lord a question? I am much obliged for the explanation he is giving, but when he refers to the issue of a statement as to keeping prices stable what does he mean exactly? Does he mean that prices must be maintained at a high level; that the minimum must be high, or has he any idea that we might, later in the Bill, get some success with making this a matter for fixing a maximum price? I understood that the Government wanted to see prices come down. What does the noble Lord mean by "stable" in this case? Does he mean keeping prices high?
LORD MANCROFT: I do not want to be pinned down too much to what I gave as an example of the general exhortation which might be given in these particular cases. I could give other general examples for the purpose of my argument, although I grasp the purpose of the noble Viscount's intervention. I am only stating that that is the principle which underlies this particular subsection. These present Amendments, Nos. 5 and 6, do not involve any departure from it.
However, the Bill, as it stands, does not secure that the particulars of the restrictive recommendations are put on the register. At present, where a trade association makes a specific recommendation to its members the agreement for the constitution of the association—that is its rules—is to be registered. This document may not in itself, however, give any indication that the association makes recommendations to its members about trading conditions. It will, in fact, normally he a perfectly innocuous document. It would, on the other hand, be equally unsatisfactory if the Bill were to provide that every document containing a recommendation had to be furnished to the Registrar under Clause 9. This might mean, for example, in any case where a trade association circulated to its members lists of recommended prices, that each price list would have to be furnished for registration. What we now propose, therefore, is that, where such recommendations as are described in the first part of subsection (7) are concerned, the agreement for the constitution of the association is to be treated as if it contains an implied term, under which each of the members to whom the recommendation is made agrees to comply with the recommendation and any subsequent recommendations in the same field.
The scene now shifts to Clause 9. Your Lordships will see, when we come to deal with Amendment No. 20, that it is proposed to provide in that clause that the parties, when furnishing for registration particulars of an agreement such as that which is described in subsection (7) of the present clause—that is, an agreement for the constitution of a trade association—must include in the particulars of the implied term that members will comply with a certain type of recommendation. I think it is a correct Amendment that we are making here for clarification, and it
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will be fulfilling the purpose of this particular clause. I beg to move.
Amendment moved—
Page 6, line 20, leave out from ("any") to ("the") in line 21 and insert ("matter described in").—(Lord Mancroft.)
3.30 p.m.
LORD LUCAS OF CHILWORTH: I have tried hard to follow what the noble Lord says, but I must confess I am not very much enlightened. Does he really think that the mere registration of an association (call it what you will) will be any correction of some of the practices in which they can indulge when they issue recommendations to their members? When Clause 23 becomes operative, there will be a lot of squirming and wriggling to sidetrack it. I take it that this is one of the efforts of The Government to prevent that, but I am afraid that it will not be clone in the way the noble Lord has just outlined. Toe Government have to face up to this fact—and I think this will arise more and more as we go through this Bill: that the office of the Registrar, which is the Restrictive Trade Practices Court, will be a gigantic business organisation. I cannot see any way other than that every single agreement will have to be scrutinised. I do not think it will be done as the noble Lord is now trying to do it. His intentions, I am quite prepared to say, are honest, but it is impossible, by a "blanket" method of registering the detail; of an association, to cover every recommendation that that association can make to its members.
The noble Lord should know better than I do that there are some very clever lawyers in existence, and during the Second Reading of this Bill I made a remark upon which the noble Lord rather took me to task. I said that I thought the Government were creating by this Bill a lawyers' paradise; and every time I read the Bill I think it is going to be something more than a paradise. I ant afraid that I should want more evidence than the noble Lord has given at the present time that we are not going to see a large number of attempts to evade the consequences of Clause 23. I do net think the noble Lord's provision is sufficiently watertight. I see no alternative to calling for registration of every single restrictive practice or every single recommendation of any association that might be thought to be restrictive. I cannot see

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any other way—I am sorry. I shall propose an Amendment soon which seeks to do precisely the same as the noble Lord is trying to do, but in another direction. I think this is a hopeless kind of thing to try because, as soon as you try to do that your net is full of holes. I hope the noble Lord will have another "think" about this.
VISCOUNT HAILSHAM: But most nets are full of holes.
LORD MANCROFT: As my noble friend Lord Hailsham points out, most nets are full of holes. I quite see the noble Lord's difficulty, but I think he is meeting troubles more than halfway. I hope that I am right and he is wrong, because clearly we are both trying to do the same thing. The noble Lord says there will be much squirming and wriggling over this. I hope not, but, as I say, we are both at the present moment trying to do the same thing. This is our attempt, and I think it is a much better one than that of the noble Lord. However, he will not convince me and I shall not convince him, and we could go on with this point for some considerable time. He may have more to say on this when we come to the wider development of this matter later in the Bill. In the meantime, I hope he will bless my Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I agree with my noble friend on this matter, but I will not prolong the discussion now for it would not be profitable. When the noble Viscount says that all nets are full of holes, our complaint with the Government on the Bill in general is that, compared with the recommendations of the Monopolies Commission, they have designed in this Bill a net with so many holes that so many people can get through with the continuation of the doctrine of discrimination. The Bill makes no real attack upon an ill in the body politic. That is why we complain about the Government's policy. However, I shall not oppose this particular Amendment because it would be taking up the time of the Committee; but we ask noble Lords to keep in mind that that is the core and burden of our complaint. We look at all the Government's
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proposals in this Bill from that point of view.
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment is consequential on the previous Amendment. I beg to move.
Amendment moved—
Page 6, line 23, leave out from ("association") to end of line 27 and insert ("notwithstanding any provision to the contrary therein, as if it contained a term by which each such member and any person represented on the association by any such member agreed to comply with those recommendations and any subsequent recommendations made to them by or on behalf of the association as to the action to be taken by them in relation to the same class of goods or process of manufacture and in respect of the same matter.")—(Lord Mancroft.)
On Question, Amendment agreed to.
On Question, Whether Clause 6, as amended, shall stand part of the Bill?
LORD LUCAS OF CHILWORTH: On the Question whether Clause 6 shall stand part of the Bill, I want to ask the noble and learned Viscount who is in charge of the Bill one or two questions. I feel that I should know the answers, but he must forgive my ignorance; I cannot find them here. Clause 6 deals with the registration of agreements. In the Monopolies Commission Report—I call to mind vividly the exhaustive speech from the noble and learned Viscount to which we listened with great interest when we discussed the White Paper—I think it was Category 6 of the Restrictive Practices which the Monopolies Commission said should be disallowed; that was the system of aggregated rebates. Am I right in assuming that paragraph (a) of subsection (1) of Clause 6 covers aggregated rebates among
"the prices to be charged, quoted or paid for goods supplied, offered or acquired"?
And am I right in saying that aggregated rebates are covered under paragraph (b), which refers to
"the terms or conditions (other than terms as to prices)"?
What befogs me is that, when I turn to Clause 25 I find these words:
"For the purposes of this Part of this Act a condition as to the amount of discount which may be allowed on the resale of any goods … shall be treated as a condition as to the price at which goods may he resold."

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Is a discount a rebate? Is a rebate a discount? Is it cancelled out by Clause 25 if it is included in this clause?
Noble Lords will remember that this matter was dealt with by the Monopolies Commission under the Report on the Supply of Electric Lamps and also under the Report on the Export of Pneumatic Tyres. At page 118, the Monopolies Commission deal with what they call ancillary practices and they give a long paragraph on what they call "the user discount scheme." In paragraph 501 they say:
"We cannot overlook the fact that the scheme is in effect an aggregated rebate scheme."
I will not read it all they say:
"For this reason we the scheme at present public interest."
Then, at the end of paragraph 105, they say:
"We assume, therefore, that if our recommendations are implemented, the user discount scheme will be abandoned."
I have not a copy of the speech of the noble and learned Viscount before me but, as I understood him, he had accepted as restrictive practices all the six categories that were put in the Monopolies Commission's Report. He would not accept them as practices to be outlawed straightaway, but they were to be registered. Any agreement of an aggregated rebate kind was to be registered with the Registrar of the Restrictive Trade Practices Court. I cannot find any specific mention of that in the Bill. Am I right in assuming that it is covered by paragraphs (a) and (b) of Clause 6 (1)? A rebate can be called anything. It may be a price, it may be a discount or it may be a rebate; but the word "rebate" does not appear in the whole of the Bill. Has it been forgotten? Has it been wilfully left out? Is it included? That is what I want to know.
May I now go on to the second question that I wish to ask the noble and learned Viscount? This point is only an illustration of agreements to be registered. With regard to monopoly agreements, I have in mind the function of the Fatstock Marketing Corporation—this private and irresponsible monopoly which the Government have, I will not say sponsored, but in some ways have underwritten.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Connived at.
LORD LUCAS OF CHILWORTH: I am much obliged to my noble friend—connived at. As I say, it is a private and irresponsible monopoly as opposed to the public and responsible monopoly that was once the subject of a certain Report which I need not mention now. But when one comes to study the activities of the Fatstock Marketing Corporation one finds that between 80 and 90 per cent. of the bacon pig industry of this country is in the hands of this Fatstock Corporation under exclusive agreement. That is a monopoly. The farmers cannot sell their pigs to anybody else for bacon. I take it that that is an agreement which will have to he registered, because that is the biggest part of the Corporation's activities. The subsidy is paid via this Corporation. I am not going to spend any of the time of the Committee in criticising the working of this Corporation. All I want to know is whether, as a monopoly, it does not; escape through the hole in the net which says that any monopoly set up by a Statute does not have to be registered. Will this be registered as an agreement to which Part I of this Bill applies? Those were the two questions that I wanted to ask the noble and learned Viscount on the Motion that the clause stand part of the Bill.
VISCOUNT HAILSHAM: As I have a question to put to the noble and learned Viscount, perhaps I might, in addition to putting my own question, have a shot at answering the two which have just been posed to him, in order that one good turn may subsequently deserve another. I think the noble Lord on the Front Bench opposite is making extremely heavy weather of this matter. As regards his first question, the difficulty largely arises—I had to consider this point myself quite recently—from the fact that in their Report the Monopolies Commission nowhere exactly or precisely define what they mean by "an aggregated rebate", nor have I heard the noble Lord exactly define what he means by it either. Therefore it is rather difficult to answer the question as to what particular clause the aggregated rebate comes under, because one has not yet been told, either by the Monopolies Commission in their Report or by the noble Lord opposite, exactly what is meant by the phrase.

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But I think the point is this: that it clearly is the fact that a rebate of any kind is an agreement relating to the price to be charged. It becomes registrable under Clause 6 only if, in addition to being related to that particular matter, it is a restriction, because, oddly enough, this is a Bill relating to restrictive trade practices. But the fact that it is a rebate would, I should have thought, of itself ordinarily have brought it within the terms of Clause 6 (1) (a). The second point, about the Fatstock Marketing Corporation, I think illustrates the fact that the noble Lord opposite has still got it into his head that this is a Bill dealing with monopolies; it is not. It is a Bill dealing with restrictive trade practices. The noble Lord opposite likes the Monopolies Commission. Well, monopolies are dealt with by the Monopolies Commission, and will continue to be dealt with by them after this Bill becomes law, if it does.
LORD LUCAS OF CHILWORTH: I do not know to whom I should address my questions, whether to the noble and learned Viscount who is in charge of the Bill or to the noble Viscount, Lord Hailsham. I was not so much talking about the monopoly aspect. A restrictive practice has arisen in regard to the Fat-stock Marketing Corporation and its activities in regard to pigs for bacon. I do not know why it is that when anybody on this side of the House, in an attempt to improve the Bill, tries to elicit information and to make himself precise and accurate, he is always accused of making heavy weather. I do not know why that should be. Perhaps the noble Viscount is used to making heavy weather. But I want to know about an aggregated rebate. There is no explanation as to what is an aggregated rebate.
VISCOUNT HAILSHAM: I was actually addressing the Committee when this second speech was commenced. I thought the noble Lord was intending to put to me a question; that is why I gave way. Since he has raised the question, may I say that Back Benchers on both sides of this House have just as much right to take part in the consultations of this Committee as the noble Lord himself or the noble and learned Viscount of the Woolsack. I was proposing to address myself to Clause 6 in general,
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and I thought perhaps it was a matter of courtesy to the noble Lord on the Front Bench opposite if I sought to answer the two points that he made. But he really must not seek to confine debates in this House to a sort of dialogue between the two Front Benches. I was venturing to say, and I venture to say now, that if he reads his speech he will see that he was making very heavy weather of the matter.
This is not a Monopolies Bill. I was pointing out to the noble Lord that this Bill does not deal with monopolies; it deals with restrictive trade practices. It may be that an individual, unnamed agreement is not within the terms of this clause. Until one knows the terms of the agreement, whether it concerns the Fatstock Marketing Corporation or any other body, one cannot very well give an answer to the question. I should think that my noble and learned friend on the Front Bench would be extremely foolish to attempt to do so, because one thing that a lawyer knows is that if you are going to advise as to the effect of an agreement you must first look at the agreement.
The first point I wanted to ask my noble and learned friend below me was this—it is a matter of which I have given notice, and I know that it has exercised some people who are interested in this Bill. He has privately told me what the answer is, but I think we should have it in public. At first sight there appears to be a drafting error in Clause 6 (1) (b). Since the second of the two matters to which this restriction may relate is defined as
"the terms or conditions (other than terms as to prices),"
at first sight it would seem that there is the deliberate omission of the word "conditions" where the word "terms" occurs for the second time in that line. It might appear at first sight as if it was intended that conditions as to prices do not come within either of the two paragraphs. My own feeling about it is that this is, if anything, purely inadvertent, and that either the word "conditions" ought to be inserted or the noble and learned Viscount the Lord Chancellor should tell us that it would make no difference if it were inserted. I should have thought the clause would have been more clear if it said "otherwise than as to prices", so as to make it perfectly plain; but I think

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the public should be told whether the apparent misdrafting was done deliberately, with sonic legal effect, or whether it was done inadvertently with no legal intent.
LORD SALTOUN: If I may interrupt this "Midshipman Easy" duel with two questions on this clause, may I point out that my first question was precisely that formulated by my noble friend Lord Hailsham. Friends of mine were also anxious on that precise point, and they enquired of the Board of Trade. The explanation given by the Board of Trade is that the expression "the prices to be charged" in Clause 6 (1) (a) must be regarded as "terms as to prices", and that is why in Clause 6 (1) (b) one finds the expression "terms or conditions (other than terms as to prices)". I am bound to say that even that answer, like most answers from Departments, leaves me still scratching my head, and I want to know whether there is any difference between "terms" and "conditions" and, if so, whether the expression "prices to be charged" does not include conditions. If the noble and learned Viscount could be explicit on that point, my friends would be grateful.
The second question arises out of the Amendment of Lord Alexander of Hillsborough. I have sympathy with his complaint, but the noble and learned Viscount the Lord Chancellor undertook to look into agreements for which the only evidence would appear to be that the course of events would justify the supposition that the agreement existed. May I give an example that occurs to me? Supposing that one were watching a cricket match and a team consistently cut every off-side ball, would that be sufficient evidence to argue an agreement between members of the team always to cut off-side balls? Or if you introduce a kind of spot stroke rule that every fifth off-side ball was driven, would that be sufficient to defeat the evidence? Is that the kind of thing that will be looked into under this undertaking? Because it seems to me that if one tried to legislate for that kind of thing, one would get into very deep water.
LORD ARCHIBALD: May I try to amplify the question regarding the Fat-stock Marketing Corporation put by my noble friend Lord Lucas of Chilworth? I should say for the benefit of the noble
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Viscount, Lord Hailsham, that I am not concerned with it in its capacity as a monopoly, if it is a monopoly, but with regard to the nature of the agreements which it enters into. I may say I am a supporter of the Fatstock Marketing Corporation, so I do not raise the matter critically but to elicit information. As I understand it, that Corporation enters into agreements with big factories throughout the country, covering about 80 or 90 per cent. of the total bacon-producing capacity, and these agreements provide that the Corporation becomes the exclusive supplier of bacon pigs to those factories. Do those agreements between the Corporation and the bacon factories which have that exclusive element in them come within the scope of the Bill, and would those agreements be registrable?
THE LORD CHANCELLOR: May I take the points in the order in which they were put to me? I am glad to be able to reassure the noble Lord, Lord Lucas of Chilworth, that aggregated rebates have not fallen by the wayside and have certainly not been dropped. In our view, the system is registrable under subsection (1) of Clause 6. I do not tie myself either to paragraph (a) or paragraph (b), because, as the noble Lord is aware, there are different ways of providing for aggregated rebates and it depends on the form of the agreement. But, so far as we can see, they will be caught by either paragraph (a) or paragraph (b).
VISCOUNT ALEXANDER OF HILLSBOROUGH: Would the noble and learned Viscount give us his definition of an aggregated rebate?
THE LORD CHANCELLOR: I cannot improve on the one in the Monopolies Commission Report on Collective Discrimination. I have not gone beyond that and II have used it as my bible in this matter. I throw myself on the mercy of the noble Viscount. I am using it in the sense in which it is used in that Report, and that is the sense in which we have dealt with it. There was one matter with regard to Clause 5 about which the noble Lord was worried, and I wanted to reassure him on that point. Clause 25 deals only with Part II of the Bill and does not have any effect on Part I. There is no escape there.
LORD LUCAS OF CHILWORTH: May I be perfectly certain? A rebate which falls within paragraph (a) or paragraph (b) of Clause 6 (1) is not covered as a discount in Clause 25?
THE LORD CHANCELLOR: That is so. I agree with the noble Lord and I just wanted to give him it as clearly as I could. Clause 25 contains supplementary provisions dealing with the application of Clauses 23 and 24 to conditions as to discounts, allowances for goods taken in part exchange, and hire purchase charges, and includes certain modifications in their application to Scotland and Northern Ireland. It contains a condition as to the amount of discount which may be allowed on resale of goods. For the purposes of Clauses 23 and 24, that condition is to be treated as a condition as to the price at which the goods may be resold.
That deals with the first point, and then we move into the mellifluous climate of pigs and bacon. I am not absolutely clear about the agreements which the noble Lords, Lord Lucas of Chilworth and Lord Archibald, have in mind, but I should like, first of all, to state the general principles, so that the noble Lords can consider the position. Under subsection (1) of Clause 7, agreements and arrangements entered into by the nationalised industries and the agricultural marketing boards would not be subject to registration in so far as they have been expressly authorised by or under any enactment. On the other hand, an agreement which is not expressly authorised will be subject to registration. I quote that, because I think it is good to have the dividing line clearly stated; and, of course, one would have to consider the various agreements which have been made under the marketing schemes with which your Lordships are familiar. Therefore I accept the caution of my noble and learned friend Lord Hailsham against attempting to construe an agreement which I have not seen. If there is a registrable agreement—for instance, if farmers agreed to sell only to the Corporation—it will not be exempted by subsection (1) of Clause 7, to which I have just referred, as it is not authorise by Statute.
My noble friends, Lord Hailsham and Lord Saltoun, raised points in connection
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with the terms of paragraph (b) of subsection (1) of Clause 6. The reason why the draftsman has not included a reference to conditions against the words in brackets in that paragraph is that provisions relating to prices are comprehended exclusively under the expression "terms", so that "conditions" relates to provisions concerned with something other than prices. There is no doubt that that is the reason for the drafting; but I will gladly have a look at it, if my noble friends are still in some doubt, although I do not think there is any drafting difficulty. I should also point out that, in any event, there is no legislative weight on the words in brackets, although there is good reason for having them there—to prevent any overlapping between paragraphs (a) and (b). As there appears to be some difficulty, I shall be glad to go into it with Parliamentary counsel, however, and I am grateful to the noble Lords for bringing these points to my attention. I have done my best to answer them, and I hope noble Lords will now accept the Amendments.
LORD LUCAS OF CHILWORTH: My Lords, may I thank the noble Viscount for his very helpful exposition. The matter is now quite clear.
LORD SALTOUN: My Lords, I think my friends will now be satisfied with the reply of the noble and learned Viscount.
Clause 6, as amended, agreed to.
Clause 7:
Excepted agreements
7.—(1) This Part of this Act does not apply to any agreement which is expressly authorised by any enactment, or by any scheme, order or other instrument made under any enactment, or to any agreement to which the only parties are interconnected bodies corporate or individuals carrying on business in partnership with each other.
(3) No account shall be taken for the purposes of this Part of this Act of any term of an agreement for the supply of goods, or for the application of any process of manufacture to goods, which relates exclusively to the goods supplied, or to which the process is applied, in pursuance of the agreement:
Provided that where any such restrictions as are described in subsection (1) of section six of this Act are accepted as between two or more persons by whom, or two or more persons to or for whom, goods are to be supplied, or the process applied, in pursuance of the agreement, this subsection shall not apply to those restrictions unless accepted in

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pursuance of a previous agreement in respect of which particulars have been registered under this Part of this Act.
(10) No account shall be taken for the purposes of this Part of this Act of any agreement to comply with or apply, in respect of the production of any goods or the application to goods of any process of manufacture, standards of dimensions, design or quality for the time being approved by the British Standards Institution.
4.3 p.m.
LORD GRANTCHESTER LORD GRANTCHESTER moved to add to subsection (1):
"Provided that this subsection shall not apply to any agreement registered or subject to registration under this Part of this Act by the parties or some of them which have subsequently become interconnected bodies corporate or individuals carrying on business in partnership with each other."
The noble Lord said: One of the purposes of this Bill is to discourage any trend to monopoly or undue concentration of power. I am sure that Her Her Majesty's Government do not wish, in consequence, to encourage any firm to move in this direction for the purpose of bringing them outside the Bill. I suggest that the Amendment which stands in my name is a suitable precaution and I beg to move.
Amendment moved—
Page 6, line 37, at end insert the said proviso.—(Lord Grantchester.)
LORD MANCROFT: The noble Lord, Lord Grantchester, has not told us a great deal about his Amendment. Perhaps he is hoping that we shall take it at its face value and consider that his name is enough to guarantee its virtues. I believe that we should look at it a little more carefully. Clause 7 (1) exempts from Part I of the Act agreements to which the only parties are inter-connected bodies corporate or individuals carrying on business in partnership with each other, If I have correctly understood this Amendment, its effect would be that any such agreement would not be exempt if the inter-connected bodies corporate or partnerships had been formed after the Act came into operation. While the intention of the noble Lord is to prevent the formation of inter-connected bodies corporate and partnerships simply for the purpose of evading the Act, I am afraid that the Amendment lie proposes would not be in any way practicable. The
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formation of such trading units is part of the ordinary machinery for running the commerce of the country. Participants in them may make restrictive agreements among themselves as a consequence of the way in which relations between different parts of the business are organized but to make such agreements subject to the Bill would be to put an entirely unreasonable obstacle in the way of trading in this country.
There is another point. It is highly improbable that, with all the financial implications involved, inter-connected bodies corporate or partnerships would be formed simply in order to evade the Bill. Again, inter-connected bodies incorporate which controlled at least one-third of the supply of any particular kind of goods in the United Kingdom, could, of course, be referred to the Monopolies Commission under the Monopolies Act, 1948. The second point is that partnerships are exempt only if they consist of individuals and where none of the partners is a company. For those reasons I should like the noble Lard to be good enough to consider this matter again, as Her Majesty's Government cannot see their way to accept the Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am sorry to hear that answer, for, whatever one may think of the merits of the drafting, the Amendment has a very good object in view. We are exceedingly doubtful of some of the provisions of Clause 7, with regard to excepting altogether certain operations from this Part of the Bill. If your Lordships will look at subsection (1), the people there represented are, in our view, those who commonly and generally discriminate. It does not seem to matter much whether they are a particular formation as set out in subsection (1) or some other formation if they are permitted under British law to discriminate. We think that is shocking. I know that this provision refers especially to collective agreements, and I do not know why this particular form should be put into subsection (1).
I have a great deal of sympathy with the obvious object of the noble Lord, Lord Grantchester, in his Amendment, and if there is any way in which it can be improved, through the collective wisdom of the Front Bench lawyers, so much the better. But those of us who

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have had to contend against discrimination feel that where there is a body corporate or a partnership, although one may have all the names, titles and articles of association, there may also be, in effect, different kinds of separate commodities, and, therefore, subsidiary trade channels which are affected and become an absolute part of a collective agreement. It would be in the interest of all those who would like to return to the righteousness of mediæval law to decree that we should have something to prevent wrongful happenings. I should even welcome the partial restoration of a decent attitude in trade and distribution, such as was sought to be obtained in the Middle Ages and which has been so sadly interfered with by modern practice.
THE LORD CHANCELLOR: May I first state a ground of agreement with the noble Viscount, Lord Alexander of Hillsborough, on the almost perfect draftsmanship of that medieval Bill which he and I, in our time, have both studied. It is an interesting point, though it may have no great relevance, that it is difficult to find on the Statute Book a better or clearer piece of drafting than that. With regard to the noble Viscount's general doubts on subsection (1) of Clause 7, may I, again speaking from memory, give him my experience of this matter? This subsection, first of all, covers an agreement which is expressly authorised by any enactment or statutory scheme. When the Bill produced by the Government of which the noble Viscount was so distinguished a member came before another place—I refer to the Monopolies and Restrictive Practices moved an Amendment that that Bill should cover nationalised industries and statutory schemes. The Amendment was rejected by the other place, and the noble Viscount. by his agents in that place, told me that it was highly unsuitable that I should apply monopolies practice to schemes which were the result either of the nationalisation policy of the Government or of the statutory controls by which they stood. The noble Viscount has now come full-circle and the first part of subsection (1) is the result of his rejecting my Amendment eight years ago.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I really cannot accept that. A monopoly, of course, may be applied
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in terms of nationalised industry, but in fact it has none of the evils of a monopoly such as those which have been so much inveighed against by all sections of the communities in many countries. A harmful monopoly is one which restricts the benefits of the monopoly to a limited number of partners or shareholders. That is one of the evil effects. But where the whole of the population of the country have equal rights in the ownership of a State industry that is a very different state of affairs indeed, so I do not accept the noble and learned Viscount's interpretation of the matter of which he has just spoken.
LORD SALTOUN: Would the noble Viscount, Lord Alexander of Hillsborough, include as benefit shared by all those occasions when the whole public has the pleasure of paying for the support of the monopoly?
THE LORD CHANCELLOR: Perhaps I may continue my speech in this most interesting discussion. I do not want to keep on the general point for too long a time. I wish to say that I am a "wholehogger" on this matter. I believe that all monopolies have the essential evil that those who participate in them may sit back on the monopoly and, in reliance on the monopoly, fail to exert themselves in order to get the utmost of their production for the benefit of the community or to pass on to the community lower prices. My view is that every form of monopoly cannot avoid that vice—indeed, I go a bit further. But let us say no more now, because the noble Viscount and I can find a considerable field where we see the vices, though we may not agree as to its extent. I put it seriously that once statutory monopolies—if I may speak of them in that way—have been excluded from the purview of the legislation we have to provide for them in subsection (1), and I need not put my argument any further.
On the second point, I want to limit the field of argument to this: that, so far as there is anything sinister in interconnected bodies corporate, it would be sinister only where, as Lord Mancroft has said, it is to be an instrument for getting a third, or whatever the figure may be, which brings one within the scale of monopoly. In that sense, this clause will not alter the ability of the community to deal with that point. But inter-connected bodies corporate are, in essence, an

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entity; and, similarly, partnerships are an entity in which two or more people agree to trade together. Although for purposes of drafting they may sound long, these are entities, and I do not think one can stop arbitrarily the period at which they operate, which is what the noble Lord, Lord Grantchester—I agree with the best intention—is trying to do. Our point is that this arbitrary moment of time will not help us. If the noble Viscount, Lord Alexander of Hillsborough, has another approach—namely, if he has in view an inter-connected body corporate used as a means to avoid the Act—that is a matter which I will consider at once. But I do not think that this arbitrary moment of time helps us.
LORD LUCAS OF CHILWORTH: I think we are on a very important point. I am not much afraid of this particular subsection in Clause 7, but the menace assumes substantial proportions when we find precisely the same subsection in Clause 23. I have an Amendment on the Marshalled List to leave out that subsection. The noble and learned Viscount says that that is dealing with a different set of circumstances. I agree with him. I raised this point on Second Reading of the Bill. I can see the reason for this subsection in this clause, because manufacturing arrangements of inter-connected bodies corporate are a very convenient way of producing things cheaply—and maybe, as my noble friend Lord Alexander of Hillsborough says, of charging a high price. When we get to Clause 23 then I think there is a case to be made against the subsection.
I can give instances straight away. Take Unilever. I think I am right—though I speak with some reserve—when I say that the whole mass of companies tied up in the Unilever organisation from those which manufacture sausages and ice cream to those which make detergents, could operate a collective price maintenance scheme because they could contract out by having an inter-connected body corporated which would come under Clause 23. I should like to wait until we get to Clause 23 before saying more on this point, because I do not want to confuse the two issues. I have my doubts whether a registrable agreement should necessarily be outlawed, if it is made after the date of the coming into law of this Bill. I should rather like to leave the
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argument on the other side until we get to clause 23. I think that Lord Grantchester's only object was to prevent someone forming a ring—which is the vulgar name for an inter-connected body corporate—for the purpose of evading the Act. If the noble and learned Viscount would allow me, I will deal with the noble Lord's point later.
LORD GRANTCHESTER: I am sorry if I did not give a sufficiently full explanation of the Amendment. I thought that the wording was quite clear and I wanted to save time. My object was, as Lord Lucas of Chilworth has said, not to stop any amalgamations but to prevent their being used as a device to prevent registration. If the noble and learned Viscount will look at this matter again I shall be pleased to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.20 p.m.
LORD MANCROFT LORD MANCROFT moved, after subsection (2) to insert:
"(3) In determining whether an agreement to which iron and steel producers as defined by the Iron and Steel Act, 1952, are party, whether with or without other parties, is an agreement to which this part of this Act applies, no account shall be taken of any term whether expressed or implied—

(a) by which those producers agree to acquire raw materials or other iron and steel products as so defined exclusively from a person who undertakes the importation or distribution of those materials or products as a common service for the iron and steel industry in pursuance of arrangements approved by the Iron and Steel Board and by the President of the Board of Trade, or from any person nominated by such a person; or

(b) by which any such person agrees to supply such materials or products exclusively to those producers."

The noble Lord said: This is really an important Amendment. Its purpose is to prevent a possible clash of jurisdiction between the provisions of this Bill and Section 11 of the Iron and Steel Act, 1953. I do not know whether your Lordships have that Act at your fingertips, but under Section 11 of the Act, the Iron and Steel Board and the Board of Trade are givers certain functions as regards imported raw materials for the iron and steel industry and as regards imported iron and steel products. If the Steel Board is satisfied that the importation and distribution of these raw materials can with advantage be carried out as a common

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service for the industry, and if, in the Board's view, satisfactory arrangements to this end do not exist, then the Board must itself arrange for the common service to be undertaken. The Steel Board may make similar arrangements as regards finished steel products, and must make them if the President of the Board of Trade so directs, if either the Steel Board or the President, as the case may be, considers that the supply of these products is or may be inadequate. In the case of both raw materials and finished steel products any arrangements made by the Steel Board under Section 11 cannot provide for the sale of imports below cost except with the consent of the President of the Board of Trade.
If, in fact, the Steel Board, under these provisions, made arrangements itself for the importation and distribution of raw materials and steel products, these activities would not be subject to the Restrictive Trade Practices Bill, since they would fall under subsection (1) of Clause 7, which exempts from Part I of the Bill agreements expressly authorised by an enactment or by any scheme, order or other instrument made under any enactment. This subsection would not, however, cover agreements made by the industry with the approval of the Steel Board. So far as the generality of the restrictive trade agreements in the steel industry are concerned, of course, these will be subject to the Bill like those of any other private industry; and it is not proposed to alter this. However, it will be seen that the common services for importation of raw materials and steel products are in a different position, since, in certain circumstances, and subject in certain matters to the approval of the Board of Trade, these services could be the responsibility of the Steel Board. I think that your Lordships will agree that it would be somewhat anomalous if such arrangements were outside the Bill if operated by the Steel Board but came within the Bill if operated by the industry with the approval of the Board. This Amendment, therefore, eliminates this anomaly. Of course, if the Steel Board and the Board of Trade did not approve the arrangements, but none the less these continued in operation, they would then come within Part I of the Bill.
Your Lordships will see that the agreements which will be excluded from the Bill by this Amendment are those under which steel producers bind themselves to buy exclusively from a particular person. Such agreements are a usual feature of common service arrangements and therefore must be excluded if the intention of Section 11 of the Iron and Steel Act is not to come into conflict with the present Bill. The Amendment makes approval of the arrangements dependent not only upon the Iron and Steel Board but also upon the President of the Board of Trade.
Your Lordships will see from the wording of Section 11 of the Iron and Steel Act, 1953, that ministerial approval is provided for on certain aspects of the arrangements for which that section provides. Furthermore, the general principle followed in these matters is, I believe, a sound one—namely, that, unless Parliament has expressly authorised a restrictive practice, it must be justified under the terms and provisions of this Bill. If, in the particular and rather special circumstances affecting the purchase of raw materials and steel products for the steel industry, an exception is to be made, then it seems reasonable that Parliament should have the right to question the responsible Minister as to what has been approved and why. I beg to move.
Amendment moved—
Page 6, line 42, at end insert the said new subsection.—(Lord Mancroft.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: I have tried to follow the noble Lord's explanation. The most reasonable thing I heard was at the end, when he said that it was going to be possible to question the Minister. Whether any of the rest of it is reasonable, I do not know. When I look at the terms of this Amendment and see, for example, that this exemption is to include distribution as well as the acquiring of raw materials for the industry, I ask: where are those agreements going to begin and end? In the light of this Amendment it seems to be difficult to establish whether they are discriminatory or not.
What is the real object of the Government in this Amendment with regard to the arrangements made for the distribution of the products of the iron and steel industry? The Government have taken

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away this industry from nationalised ownership, under which it was doing exceedingly well. It was being capitalised at a rate at which it had never been capitalised before, and the foundations had been laid for a greater output and for great prosperity for the limited number of shareholders who got it back. I think that under this Amendment we might be subject to an unreasonable amount of discrimination in the distribution of iron and steel products. What is the object here? I may be looking at this through double glasses. I may be a little more suspicious of this matter than some other people might be, but I should like to know what it means when it refers to distribution as well as to the buying and importation of raw materials. In the distribution of the finished product why should these producers not be subject, like the firms of the so-called free iron and steel industry, to the registration of any agreement by which they are prepared or not prepared to supply those anxious for their products?
THE LORD CHANCELLOR: I think it is perfectly comprehensible that the noble Viscount should have issued that warning. But, rightly or wrongly—and that is res judicata so far as our discussion is concerned—we have decided to adopt the plan of controlled freedom of the steel industry under the Steel Board. Obviously, the noble Viscount does not agree with that plan, which was discussed at length at the time. That being so, Section 11 of the Act of 1953, as my noble friend said, lays duties on the Steel Board which broadly cover the point the noble Viscount has in mind. We must allow the Steel Board, a body operating on behalf of the community as a whole, to have the right to see that these common service agreements are properly carried on. Although the noble Viscount does not like our scheme, in a sense this is the Part of the scheme which I should suppose he dislikes least, as it is the part in which the community imposes control on the operation of the industry through the Steel Board, a highly respected body operating on behalf of the public good. What we have done in addition—and I notice, that this attracted the noble Viscount's approval—is to bring in the Minister, so that if there are any questions that trouble the noble Viscount, it will be
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possible to put down a Question to the Minister, or whoever answers for him, so that there cannot be any misuse of these powers. I can see the difficulty of the noble Viscount.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The difficulty I have very much in mind is that with the distribution of steel the difficulty is not always a question of price, as it is in other commodities; it is a question of priority in distribution to the general users of steel. On that point we have had considerable difficulties in the past. While all controls can be onerous at sonic time to some part of the community affected, nevertheless, when it comes to a body of this kind, it can be discriminatory as well as onerous.
THE LORD CHANCELLOR: I will, of course, examine carefully what has been said, but I should have thought that a common service under the Steel Board, which is acting in the general public interest, would be the least likely machinery of discrimination. What I was saying—and I think the noble Viscount agrees with this—is that it is right that in these circumstances, where there is any doubt at all, there should be an approach to the Minister so that the matter can be dealt with in a Parliamentary way.
It is a difficult matter. I think the noble Viscount and I would agree this far: that where there are two parallel pieces of policy—even if it is the policy of the noble Viscount, of nationalisation, or if it is our policy, of controlled private enterprise—on the one hand, and an anti-trade restriction policy, on the other, there are bound to be difficulties where the two policies advance, if not exactly parallel, but covering the same country, so to speak. That is the problem that we have to deal with, and I hope that, on reflection, the noble Viscount will feel that we have dealt with it fairly and properly. If he has any doubts, of course, he has only to write to me about them.
On Question, Amendment agreed to.
LORD MANCROFT: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 6, line 43, leave out from beginning to ("an") in line 44 and insert ("In determining whether").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This, too, is a drafting Amendment. I beg to move.
Amendment moved—
Page 6, line 45, at end insert ("is an agreement to which this Part of this Act applies no account shall be taken of any term ").(Lord Mancroft.)
On Question, Amendment agreed to.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, in the proviso to subsection (3), after "accepted" to insert "or imposed". The noble Lord said: This is the Amendment that I referred to previously.
THE LORD CHANCELLOR: Could we discuss Amendments Nos. 11 and 12 together?
LORD LUCAS OF CHILWORTH: Yes I will speak on the two together. In a number of industries the distribution is carried on by a network where there are tripartite agreements. There is agreement between the manufacturer and the wholesaler, and the manufacturer and the retailer, to which the wholesaler is attached. Sometimes the goods physically go through the wholesaler, and sometimes they go straight to the retailer. As I see it, under this subsection the whole of the network—that is to say, every agreement, even if it is an agreement from the original supplier to the retailer, to which the wholesaler is a party—will have to be registered. I should have thought that the registration of the root agreement would have been all that was desired, and that this would save the registration of thousands of agreements. As I said to the noble Lord, Lord Mancroft, just now, I am afraid the Registrar is going to have a superhuman task in sorting out these agreements and registering them. This is an effort to help the Government to simplify their procedure in all the mass of agreements that must come in from thousands upon thousands of those who sign agreements with manufacturers for the sale of their goods. I think it is self-explanatory.
Amendment No. 11 is really a drafting Amendment, because if you have a condition in the future imposed upon you that is a little different from having an agreement which is accepted by you. I am afraid the noble and learned Viscount is going to say that he cannot accept this Amendment because technically every agreement will need to be registered Frankly, I think they will have to be
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registered. I am trying to give the Government a blank coverage, but I think I shall fail, because for technical reasons they will have to be registered. I think the "blanket" which the noble and learned Viscount tried to put out in the first substantial Amendment we discussed will fail for the same reason. I have spoken on Amendments Nos. 11 and 12 so that I may receive a reply, but I now move Amendment No. 11.
Amendment moved—
Page 7, line 8, after ("accepted") insert ("or imposed").—(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: The noble Lord has raised a difficulty here. I should like to give him my views, and then perhaps he will consider whether there is any hopeful line which we might discuss before the next stage of the Bill. I think it would be useful if I put my views so that the noble Lord may have them in mind. He will have observed that subsection (3) of Clause 7 exempts from Part I of the Bill agreements for the supply of goods, provided that the terms of the agreement relate exclusively to the goods supplied, and that, if restrictions are accepted between two or more of the parties selling, or two or more of the parties buying, these restrictions stem directly from an agreement between these parties which is already on the register, which the noble Lord has termed the "root" agreement.
It is clear, I think, that the intention of the Amendment is that this exemption should be extended to cases in which a manufacturer supplies his goods to a dealer through a wholesales, and all three are parties to an agreement in which restrictions are accepted by them all. That is the problem. The noble Lord has argued that this agreement relates exclusively to the goods supplied, but is not covered by subsection (3) of Clause 7 because there are two suppliers who are party to it, the manufacturer and the wholesaler, who do not accept restrictions under a root agreement. There is one difficulty. This kind of agreement may not, in fact, be an agreement for supply, because the manufacturer may accept restrictions vis-à-vis the dealer, although not supplying the goods to him direct. The agreement would not, therefore, be affected at all by subsection (3). In addition, it seems unlikely that the restrictions in the agreement would relate

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exclusively to the goods supplied, as they might include, for example, an undertaking by the manufacturer that he would not sell his goods to any other distributor in the area. It seems that the kind of agreement which is in mind could not, in any case, stem from a root agreement which is on the register, because it would contain restrictions other than those accepted by the manufacturer in any root agreement with his fellow manufacturers. I think one must face that difficulty.
The conclusion is that no extension of the terms of subsection (3) could exclude the type of agreement which has been described, and, on the information available to the Government, we should not be willing to make a special exception in the Bill for this type of agreement. Although the exemption might be directed to the circumstances of a particular industry, the noble Lord will see that it has to be a general provision. We cannot say that this will apply to motor distribution and not to any other. That is a difficulty which we feel. The Amendment would have to be cast in general terms and might, therefore, cover a much wider range of restriction of competition than was intended. I do not think I have taught the noble Lord anything, because he frankly admitted that a difficulty existed; but I thought he would like to see how my mind moved on the matter. If he can give us more particulars of the agreements which he has in mind, I shall be pleased to consider them. I do not think I can go further than that—I do not think anyone would want me to, especially the noble Lord himself. But I should be perfectly happy to do that, and if we can find something narrow which would meet his point without having evil repercussive effects, nobody would be happier than I.
LORD LUCAS OF CHILWORTH: I was afraid that the noble and learned Viscount would say precisely what he did say—he could not say anything else. I will accept his offer, and if I can suggest anything I will, although I do not think I can. This is the inherent weakness of this Bill, in going about it in this way. There may have been a weakness the other way, but you will have thousands upon thousands of agreements sent in before you finish. I appreciate the point that you have to cover all these things and that you cannot find one blanket
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agreement or one blanket clause. Therefore, the work will be stupendous. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MANCROFT: The effect of this Amendment is to limit somewhat the exemption from the scope of the Bill which is given to certain types of agreements by subsection (4) of the clause which we are now considering. The exemption is designed to cover sole agency arrangements—that is, arrangements under which a manufacturer appoints one particular trader to handle his goods in a particular area. This kind of arrangement world not in all cases necessarily come within the scope of the Bill, since both the parties may not accept restrictions in the terms of subsection (1) of Clause 6. If, however, a registrable agreement is involved, it is the intention to exclude it from the Bill since sole agency arrangements are a common and useful piece of the machinery of commerce. However, subsection (4) of Clause 7, as drafted, makes the exemption rather wider than is necessary to achieve the Government's purpose. The result of my Amendment will be that exemption will apply only where, first, there are no mere than two parties to the agreement, neither of them being a trade association and, secondly, all the restrictions relate to goods of the same description. I am sure that that arrangement will commend itself to your Lord5hips, and I beg to move.
Amendment moved—
Page 7, line 11, leave out from ("sub-section") to ("restrictions") in line 14 and insert ("this Part of this Act does not apply to any agreement between two persons, neither of whom is a trade association within the meaning of section six of this Act, being an agreement to which no other person is party and under which no such restrictions as are described in subsection (1) of section six of this Act are accepted other than").—(Lord Mancroft.)
LORD LUCAS OF CHILWORTH: Again, I have my doubts about this Amendment. I do not know how the noble Lord is going to treat an Amendment I have later on. The object of my Amendment is to ensure that exclusive agreements do not come within the scope of this Bill. I have sought to bring them within the scope of inquiry by the Monopoly Commission. Listening to the noble

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Lord, I feel that I should like his assurance that what he has said does not prejudice anything that I want to do later on. I do not think it does, but perhaps he would let me know.
LORD MANCROFT: I do not think it does, but I will look at it carefully.
On Question, Amendment agreed to.
LORD MANCROFT: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 7, line 45, leave out from ("applied") to end of line 2 on page 8.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This is also a drafting Amendment. I beg to move.
Amendment moved—
Page 8, line 37, leave out from beginning to ("to") in line 38 and insert ("In determining whether an agreement is an agreement to which this Part of this Act applies, no account shall be taken of any term by which the parties or any of them agree").—(Lord Mancroft.)
On Question, Amendment agreed to.
4.46 p.m.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to add to subsection (10):
"or of standards prepared by any other institution or by a trade association for the guidance of its members in relation to the following matters, that is to say, government regulations, public safety, dimensions, design, technical specifications, performance and test procedure."
The noble Lord said, I am afraid that I shall have the same reply to this Amendment as I had from the noble and learned Viscount on the last Amendment on tripartite agreements. This again is an effort to assist the Government. Subsection (10) of Clause 7 reads as follows:
"No account shall be taken for the purposes of this Part of this Act of any agreement to comply with or apply, in respect of the production of any goods or the application to goods of any process of manufacture, standard of dimensions, design or quality for the time being approved by the British Standards Institution."
In other words, the British Standards Institution are being given a monopoly of freedom. What I seek to do is to bring into subsection (10) standards connected with motor vehicles, some of which are drawn up in conjunction with the Government, some for safety purposes, and others through the Construction and Use Regulations, of which, in time, they
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become part. I should have thought they could have been taken out of this Bill. In other words; all the standards that are applicable to motor vehicles, or the standards section of the manufacturing industry which sets up these standards, will have to be registered as a restrictive practice because they restrict certain things and circumscribe the liberty of people to do so. I think this is a bit hard, but I quite understand why it is done. I suppose the Government will tell me that they have a job to discriminate in favour of any one particular banch of industry which sets up a standards organisation. I will move the Amendment to hear what the Government have to say.
Amendment moved—
Page 8, line 42, at end insert the said words.—(Lord Lucas of Chilworth.)
THE LORD CHANCELLOR: I appreciate two things in the drafting of this Amendment—first, the attempt to follow subsection (10) and, secondly, the attempt to limit the proposed exemption to standards which are meant to be used for technical purposes and not for restriction of competition. I note that quality has not been quoted as a matter which is regulated by the standard. As the noble Lord anticipated, I am afraid that the objective has not been achieved, and I am also afraid that it cannot be achieved. However, I have some crumbs of comfort for the noble Lord in a moment, and so I will just put my points to him.
Our difficulty is to regard such words as, "technical specifications" and "performance" as in practice relating to something other than quality, and an Amendment which, in effect, exempted from the Bill any agreements about quality is unacceptable because it would be tantamount to removing from the scope of Part I of the Bill any agreements about the "descriptions of the goods to be produced, supplied or acquired." That is one of the restrictions set out in subsection (1) of Clause 6. But in the case of the kind of standard which the noble Lord no doubt has in mind, it will be open to the Restrictive Practices Court to declare that recommendations by trade associations to their members about such standards are not contrary to the public interest. In making their judgment, the circumstances in which the standards

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were drawn up in relation to any Government regulations would no doubt be taken into account by the Court, because the British Standards Institution standards are in a different position, in that they are drawn up by an independent institution in which all interests are represented and which are easily identifiable. For these reasons, the Government cannot accept the argument that standards drawn up by industries are prima facie in the public interest and should not therefore be subject to the Bill.
I have another point which I hope will, to some extent, meet the noble Lord's anxieties, because, on the question of whether registering these standards may be cumbersome—and I know that that is in his mind—I think the answer is that it will be open to the Registrar to direct, in his regulation under paragraph (b) of subsection (1) of Clause 18, that individual standards need not be sent to him for registration, provided that the constitution of the association has been registered, together with particulars of an implied term that members will comply with a certain type of recommendation—that is, in this case the recommendation to observe the standard. When he has that, he can take the course I have suggested. That is the first stage where it will be possible to get rid of a lot of the cumbersome elements which the noble Lord feared. Then there is the second stage which has also been mentioned, but which I do not think I need go into. I know I have not met him entirely, but I think I have given the noble Lord some crumbs of help.
LORD LUCAS OF CHILWORTH: The noble and learned Viscount has gone as far as I could reasonably expect. I am most grateful to him. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MANCROFT: This Amendment is consequential. I beg to move.
Amendment moved—
Page 9, line 3, at end insert—
("(12) For the purposes of this section two or more persons being inter-connected bodies corporate or individuals carrying on business in partnership with each other shall be treated as a single person").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Classes of agreements to be registered]:
On Question, Whether Clause 8 shall stand part of the Bill?
LORD JESSEL: On the Question whether Clause 8 shall stand part of the Bill, may I say a word or two about the procedure for the timing of the registration? Under Clause 8 (2) it is for the Board of Trade to appoint the date on which the agreements become registrable. There have been several statements in another place about this matter, but I think it is fair to say that there is still a good deal of uncertainty in industry about exactly what is going to happen. What is not clear is whether agreements in force at the date of the making of the order will have to be registered or whether it will be only those running when the period for registration comes to an end. I understand that Her Majesty's Government hope that industry will modify or put an end to existing restrictive agreements on its own initiative, for the more this is done, the fewer restrictive agreements will have to be registered. But this result which I think we all desire, cannot possibly come about unless there is a reasonable interlude between the date on which the order is made public and the date upon which the agreements in question become legally subject to registration. The Lord Chancellor's Amendment to Clause 36 (2) may have some bearing on this point.
If an order for registration of some types of agreement is to be made immediately the Act comes into force—which may be before the end of July—I hope that industry will be given proper time in which to study the Act and make its arrangements. We have the summer holidays approaching when legal advice is notoriously difficult to obtain. I suggest that January 1 would be the earliest practical date for registration; otherwise, the Register will be cluttered up with unnecessary agreements which may be well out of date a few months afterwards and which need not have been there at all. Her Majesty's Government have said that voluntary alteration of agreements is what is wanted. All I am asking for is some assurance that industry will be given a reasonable period of time to consider the provisions of this Act and to do what is necessary.
4.57 p.m.
LORD MANCROFT: I think I can put the noble Lord's mind at rest on this very reasonable point. I can give him an assurance that it is our intention, on Report stage, to introduce an Amendment to provide that particulars of an agreement made before a registration order comes into force and which is determined or varied before the end of the registration period need not be furnished to the Registrar, although particulars will, of course, have to be furnished of the varied agreement. On the assumption that this Bill passes into law at the end of this month, it is our intention to lay and publish the first registration order before Parliament adjourns for the Summer Recess. This means that industry will have about three months before Parliament approves the order, together with the actual period of registration, in which to consider whether or not to abandon or modify the agreement.
I ought perhaps to add that the Amendment will not apply to agreements made after the Registrar's order comes into force; otherwise the parties could have a series of agreements lasting just under three months, none of which would be registrable. I hope that this has set Lord Jessel's mind at rest. I can assure him that his views about the activities of my fellow members at the Bar during the Summer Recess are greatly exaggerated.
LORD JESSEL: I thank the noble Lord very much for his reply. I am sure that it will give great satisfaction to industry.
Clause 8 agreed to.
Clause 9 [Particulars to be furnished for registration]:
LORD MANCROFT: This Amendment removes the provision in Clause 9 of the Bill as it stands that, in the case of an agreement made by a trade association, the names of all the members of the association must be furnished to the Registrar. The clause as printed would mean that the names of members would have to be furnished, even if they were not carrying on business in the United Kingdom in the production or supply of goods. This, I understand, would conflict with Clause 6 (6), which makes party to a registrable agreement made by a trade association only such of the
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members of the association as so carry on business. When the Bill has been amended in the way I propose, Clause 9 (1) will say simply that the particulars to be furnished for registration must include the names of the persons who are parties to the agreement. I beg to move.
Amendment moved—
Page 9, line 31, leave out from first ("agreement") to ("and") in line 34.—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 10, line 9, leave out ("party") and insert ("person").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT LORD MANCROFT moved to add to the clause the following subsection:
"(6) In relation to an agreement to which this Part of this Act applies by virtue of subsection (6) of section six of this Act as if it were an agreement made between members of a trade association, or persons represented on the association by such members, references in this section to the parties to the agreement include references to those members or persons; and in relation to an agreement in which a term is implied by virtue of subsection (7) of the said section six, the reference in this section to the terms of the agreement includes a reference to that term, and references in this section to an agreement shall be construed accordingly."
The noble Lord said: The first part of this proposed new subsection removes what I understand is a defect in the Bill by requiring registration of the names of persons who, although not themselves members of a trade association which operates a registrable agreement, are represented on the association by other persons. The second part of the new subsection links up with the Amendments Nos. 5 and 6. The Committee will remember that I explained that where a trade association makes specific recommendations to its members on one of the matters described in paragraphs (a) to (e) of subsection (1) of Clause 6, the agreement for the constitution of the association will be regarded as containing an implied term that the members to whom it is addressed will comply with the recommendation. This present Amendment to Clause 9 makes provision for furnishing to the Registrar the particulars of such a recommendation, and not just the terms of the constitution of the Association.
The Committee may note that, since a fresh recommendation on the same sort of matter as the first will not have the effect of producing a new registrable agreement, particulars of such a fresh recommendation will be capable of exclusion from the obligation to register under regulations made by the Registrar under paragraph (b) of subsection (1) of Clause 18, which allows the Registrar to exclude from the particulars to be furnished to him particulars of such things as prices, which are merely applications of continuing restrictions accepted under agreements which have been registered. If, however, a fresh recommendation is made relating to some entirely different matter, this would have to be registered as a variation of the original agreement by the inclusion of a further implied term. I think the Committee will regard that as reasonable. I beg to move.
Amendment moved—
Page 10, line 25, at end insert the said subsection.(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 9, as amended, agreed to.
Clause 10:
General provisions as to the register
(3) Regulations made as aforesaid shall provide for the maintenance of a special section of the register, and for the entry or filing in that section of such particulars as the Board of Trade may direct, being—

(a) particulars containing information the publication of which would in the opinion of the Board be contrary to the public interest;

(b) particulars containing information as to any secret process of manufacture or as to the presence, absence or situation of any mineral or other deposits or as to any other similar matter, being information the publication of which, in the opinion of the Board would substantially damage the legitimate business interests of any person.

5.4 p.m.
LORD MANCROFT LORD MANCROFT moved, in subsection (2), to leave out "may be prescribed by regulations made under section eighteen of this Act", and to insert "the Registrar thinks fit". The noble Lord said: This is a slightly different subject matter. The first of Amendments Nos. 21 and 22, enables the Registrar to keep the register in any form that appears to him to be most convenient. As the Bill stands, the Registrar is obliged to make regulations about the form in which
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the register is to be kept—that is, particulars of agreements must be trans-scribed in bound volumes or the original documents must be contained in individual volumes. As these details would have to be laid down by the Registrar in his regulations under Clause 18 in advance of registration, it would mean that he was tying himself down before experience had shown him what was the most convenient form that the register may take. The Amendment that I am now moving removes this provision and leaves this detailed matter to the discretion of the Registrar. I beg to move.
Amendment moved—
Page 10, line 29, leave out from ("as") to end of line 30 and insert ("the Registrar thinks fit").(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment is consequential. I beg to move.
Amendment moved—
Page 10, line 32, leave out ("so prescribed") and insert ("prescribed by regulations made under section eighteen of this Act").—(Lord Mancroft.)
On Question, Amendment agreed to.
5.6 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved to add to subsection (3):
"Provided that where an entry is made in the special section of the register an indication to that effect shall be given in that part of the register which is open to public inspection."
The noble Viscount said: I beg to move the Amendment standing in my name. In view of one of the matters which the noble and learned Viscount is going to look at again before the Report stage, we think it is fundamental, if there is going to be a reasonable opportunity for those who are being discriminated against to proceed to the special Court dealing with agreements, oral or otherwise, which they think ought to be registered, that anything of the kind we are providing for here in the special section should be open to public examination. That is the reason for this Amendment. I am hoping that it is such a just and reasonable suggestion that the Government will find no difficulty in accepting it.
I am a little concerned about the general application of some of these provisions relating to the Registrar—whether, I when the Bill is enacted, they are going

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to be fair to all the parties concerned in possible litigation. If any of these things is kept from inspection by the public, how can the case be properly conducted? If the information recorded in the special section of the register will be quotable by the Registrar before the tribunal or in other proceedings—if it is not going to be quotable, perhaps the noble and learned Viscount will tell us—I cannot for the life of me see how anything will be gained by keeping it private from the public at that stage before the proceedings. If the matter goes to the tribunal, unless some noble Lords are successful later on in the course of this discussion in arranging that certain matters should be discussed in camera. I do not see how these matters are going to be kept private.
From the point of view of the protection of the community, it seems to me that the information should be open to the public so that they may prepare their case properly, and that certainly entries or special provisions or rulings by the Registrar in these matters, if they are going to be quotable in the tribunal, should be available to the public before the hearing. I hope that the Government will be able to accept this Amendment. I beg to move.
Amendment moved—
Page 11, line 5, at end insert the said proviso.—(Viscount Alexander of Hillsborough.)
THE LORD CHANCELLOR: The noble Viscount has raised a very difficult point. The Committee will see that subsection (3) of Clause 10 provides for a special section of the register on which certain types of information that are mentioned in the clause can be kept. I would ask the Committee to look at them and to see what they are. Paragraph (a) refers to
"particulars containing information the publication of which would, in the opinion of the Board, be contrary to the public interest;"—
the Board is the Board of Trade. Paragraph (b) refers to
"particulars containing information as to any secret process of manufacture or as to the presence, absence or situation of any mineral or other deposits or as to any similar matter, being information the publication of which, in the opinion of the Board would substantially damage the legitimate business interests of any person."
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The object of that provision is to prevent public disclosure of these particulars, and it is a matter on which the Board of Trade are to be the judge. I think that in these circumstances everyone would say that they are a suitable judge of a point of that kind.
The purpose would be defeated if the Amendment were accepted, since the public register would show what kinds of agreements were in the special section. An indication that there was an agreement would, in many cases, be almost as bad as disclosing the agreement itself. In fact, in some cases I can well imagine—and I am sure the noble Viscount could, if he looked back over his long experience in dealing with Service affairs, because that gave him such an insight into the supply side of secret processes—that the mere fact that there was an agreement between A and B would not only set tongues wagging but set brains thinking on exactly the lines which the public interest might not desire.
The noble Viscount added to his general point, very properly, the specific point: what would be the good of this prohibition on disclosure if such an agreement came before the Court, unless I accept an Amendment that the Court should sit in camera? Broadly, there is an inherent right in the Court to order a sitting in camera where the Court thinks that public interest in that limited and proper sense is involved. Therefore, provided that an agreement was on the secret part of the list, that secrecy could be maintained. At the moment, that is as far as I am inclined to go but I will listen to what noble Lords have to say.
I now come to the other side of the noble Viscount's approach, with which I have great sympathy, and that is: will there be any abuse, or is there likely to be any abuse, of the special register? This is a point one should always consider in legislation. I wanted to tell him, first of all, that the Government do not envisage that an extensive use will be made of the special section. I am told, and I have discussed this matter with the Board of Trade, that applications for entry in this part of the register will be closely scrutinised, and it would not, for instance, be the present Government's policy to relegate automatically to the special section particulars of agreements concerned with

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exports. Each case will be judged on its merits, to see whether the international relations of the country as a whole would be embarrassed by publication.
While I have not actually discussed the matter with my right honourable friend the President of the Board of Trade, at the moment I can see no objection to the President making a report as to the number of agreements. Parliament would then be able to see whether the numbers are growing unreasonably. These two points should, I think, provide satisfactory protection. Therefore, I would ask the noble Viscount at any rate to reconsider the matter and, if necessary, raise it again on Report, I hope he will accept my assurance that the provisions will not be used by the Board of Trade as a method of "side-stepping" the purposes of the Bill.
LORD MILNER OF LEEDS: The Lord Chancellor will forgive me. He seems to make rather heavy weather—I do not use the term offensively—of what is a simple point. I should have thought it was perfectly simple (and it could be done with perfect propriety) to enter all agreements in the register and where particular agreements had to do with "information the publication of which would in the opinion of the Board be contrary to the public interest" or "information as to any secret process of manufacture," to put opposite them "special section" or words to that effect. That, as I understand it, is the plain meaning of the words of my noble friend's Amendment. I should have thought it essential in the public interest that not only should all agreements be registered but that it should be clear to the public in which section they are in fact registered. If they are open for public inspection that is all right. That will apply, no doubt, to far and away the majority of the agreements. There are, on the other hand, the special type of which the President of the Board of Trade is the sole judge. I am not altogether happy about that. He is not, apparently, to be advised by any consultative or advisory committee, or anything of that sort, and at his own sweet will can say that this or the other agreement should not be published.
But the main point is to give an indication to the public that there is, in fact, an agreement, and that it is one of those
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agreements which, for one of the reasons set out in Clause 10, is not open to public inspection. That can be done perfectly simply. The public interest will be served thereby; and, with every respect to the noble and learned Viscount, I cannot think that all the contentions he made have any great validity, as one knows that the word of a Minister (in this case the President of the Board of Trade), as to what might or might not be done, is not binding in any sense of the word. Something should be put in the Act of Parliament to indicate that there is an agreement and that it is an agreement of this particular character which, for the reasons set out in the clause, is not available for public inspection. I hope, therefore, that the Committee may think fit to accept the Amendment.
THE LORD CHANCELLOR: I am sorry; I cannot give way on this Amendment. I have considered it very carefully and I should like to show the noble Lord, Lord Milner of Leeds, the sort of difficulty we have had to deal with very often and with which I am sure he is familiar. With regard to Crown privilege, that very difficult and much-discussed subject, one of the difficulties when you claim, as you are bound to claim, Crown privilege for a document is that nobody knows what is in the document, and everyone at once draws the conclusion that the Crown is suppressing a most important piece of evidence of the other side. I hope the noble Lord will take it from me that in my experience the immense majority of the documents for which I have had to claim Crown privilege would have been of very great help to the Crown if these principles did not apply.
What really worries me is this. Suppose there is an agreement between company A and company B. All informed opinion knows that company A and company B have been producing certain secret processes—and probably they know they are working along certain lines. If these two lines meet, certain conclusions are drawn. They may be right; on the other hand, they may be entirely wrong and set up a train of speculation. I attach very great importance to the views of the noble Viscount, Lord Alexander of Hillsborough, especially as he has been First Lord of the Admiralty and Minister of Defence. If he has doubts on this point, I will look at it again and speak to my right honourable friend, the President. I

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am not "stonewalling" on the Amendment. At the moment, I am convinced about the difficulty, but if the noble Viscount, with all his experience, thinks I should have another look at it, I will certainly do so.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I should be much obliged if the noble Viscount would do so. I am moving this Amendment to a clause which is dealing principally with the power to remove insignificant agreements from the register. We want to ensure that if any agreements are put into the special section of the register which records these things, the public shall know that they have been put into that special section. Then, if there are any matters to be raised afterwards, it will not be a question of immediately getting publicity for what was in the agreement registered in that section but of seeing whether there was any connection between that special agreement and any particular discrimination from which citizen was suffering in consequence thereof. He would then have a chance to make his representations to the Board of Trade. Unless an indication can be provided in the public register that a particular agreement (the agreement about which one may be worried) has been put into the special section, it will be difficult for the ordinary citizen to find out what he can do to avoid trade discrimination against him. That is all that we are seeking.
As the noble Viscount suggests, I have been far too long in charge of matters concerning the safety of the State, with the necessity for complete security in guarding things implicitly required for the safety of the State, to want anything of that kind to drift into publicity. Certainly not: I should not dream of that. But I am concerned about the position of the citizen who is suffering discrimination and who goes to the public register provided by the Registrar to find out whether A, B, C or D has been included in the public section. It is then for the citizen, if he is not satisfied, to make representations to the Board of Trade as to what should be done to remove the discrimination against him.
THE LORD CHANCELLOR: Does the noble Viscount withdraw his Amendment on my undertaking to look into it?
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am much obliged. On that undertaking I certainly withdraw my Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: This is another lubricating Amendment designed to facilitate detailed execution by the Registrar of his functions. Its effect is to admit as evidence in legal process a copy of or extract from a document entered or filed in the register, if it is certified by an assistant registrar or any other authority authorised to act on behalf of the Registrar. As the Bill now stands, only the Registrar could certify a copy, and this is likely to be very inconvenient as the number of copies may prove to be considerable. I beg to move.
Amendment moved—
Page 11, line 21, after ("Registrar") insert ("or any assistant registrar or other officer authorised to act on behalf of the Registrar").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11 agreed to.
Cause 12 [Rectification of the register, etc.]:
LORD JESSEL LORD JESSEL moved, after subsection (2), to insert:
"(3) Any application made under the last foregoing subsection shall be heard in camera if any party to the agreement the subject of the application so requests and gives such notice of his request as may be required by Rules of Court."
The noble Lord said: Subsection (2) of this clause authorises the High Court to declare that a particular agreement is registrable under Clause 6. The parties to an agreement are usually anxious that the terms should not become private property, and especially should not become available to their competitors. If the proceedings are in open court, even if the Court's decision is that the agreement is not registrable, it is too late and publicity is given to the terms of the agreement. It is clear that the Court has discretion to hear an application in camera if it so wishes. Perhaps the noble and learned Viscount the Lord Chancellor will confirm this later, when he replies. I submit that this should not be a matter for discretion but that the parties should have the right to have the case heard in secret until it has been established by law that the agreement is

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restrictive. Then, naturally, the agreement would be published in the register and the same publicity would be given to it as to any other agreement about which any dispute has arisen. I believe it is only right that until it has been so established, the parties should have the right to make their agreements in private. I beg to move.
Amendment moved—
After subsection (2) insert the said new subsection.—(Lord Jessel.)
THE LORD CHANCELLOR: I hope my noble friend will not press this Amendment, because it would make it obligatory for all such proceedings to be heard in camera. First, I think it would be a very undesirable precedent to fetter the discretion of a superior court by Statute in this way. I have refreshed my memory on the point about which my noble friend asked me. The broad principle is that hearings in camera can be held where a public hearing would defeat the ends of justice, as, for example, where particulars of a secret process have to be disclosed. There are numerous other cases—infancy and lunacy cases and the like. But may I put to your Lordships far better words than I could use? I quote my noble predecessor, Lord Haldane:
"I think that to justify an order for a hearing in camera, it must be shown that the paramount object of securing that justice is done would really he rendered doubtful of obtaining if the order were not made."
I believe that that would cover the case which worries my noble friend where the hypothesis is the double one: first, that a secret process is involved, and secondly, that at the end of the day, if it is found that the agreement is not registrable, as my noble friend says, the people concerned ought not to be put in a less dangerous position. I believe that is covered by the present law and that it should be left to the discretion of the Court.
I believe this to be right for two reasons: it is in the general interest of industry as much as anyone else that the arguments for and against the registration of a particular agreement should be heard in public. They should know and be guided by the arguments which eventually have been upheld or rejected by the Court. And, on the other view, if an agreement was suddenly found on
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the list of registered agreements, no one would know who had objected or why the Court had turned down the objections. My noble friend will take it that the High Court will be open to argument by the parties to an agreement that the case should be heard in camera, and no doubt, in considering their decision, the High Court will have regard to the provisions of subsection (3) of Clause 12, which deals with the kind of agreements that may be filed in the special section of the register which will not be open to the public. With that guidance, I do not think that my noble friend need fear that the High Court will lean against the case which really worries him—namely, the case in which a secret process is involved. I hope that on that assurance the noble Lord will feel able to withdraw his Amendment.
LORD JESSEL: I thank the noble and learned Viscount, the Lord Chancellor, for his extremely interesting and detailed reply. I must confess that I am reassured to know that the discretion of the High Court will be available when they think it right to hear the cases in camera. Therefore I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clause 13 agreed to.
Clause 14 [Power of High Court to order examination on oath]:
5.32 p.m.
LORD MANCROFT LORD MANCROFT moved, after subsection (2) to insert:
"(3) Where notice under section thirteen of this Act has been given to a body corporate, an order may be made under this section for the attendance and examination of any director, manager, secretary or other officer of that body corporate; and in any such case—

(a) the reference in paragraph (a) of the last foregoing subsection to matters in respect of which the Registrar has given notice to the person examined shall be construed as a reference to matters in respect of which notice was given to the body corporate; and

(b) in paragraph (a) of that subsection, and in paragraph (d) so far as it relates evidence, references to the person examined shall include references to the body corporate."

The noble Lord said: This Amendment is a little important. Under Clause 14, the Registrar has power to apply to the High Court for an order requiring

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any person, to whom he has given notice under Clause 13, to attend and be examined on oath. He may give notice under Clause 13 to any person whom he has reason to believe may be a party to a registrable agreement requiring that person to notify him whether or not be is a party and, if so, to furnish him with particulars of the agreement. In many cases, the parties to these agreements will be bodies corporate, and the Registrar must, in these cases, serve notices under Clause 13 on the bodies corporate. It is, in the nature of things, impossible, however, to examine a body corporate on oath, and there is no power in Clause 14, as it stands, for the High Court to order the examination on oath of an officer of a body corporate which is a party to a registrable agreement. This Amendment is designed to put these matters right. I beg to move.
Amendment moved—
Page 14, line 18, at end insert the said new subsection.—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Offences in connection with registration]:
LORD MANCROFT: My Lords, this is a purely drafting Amendment. I beg to move.
Amendment moved—
Page 14, line 24, leave out ("the last foregoing section") and insert ("section thirteen of this Act").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 15, as amended, agreed to.
Clause 16 agreed to.
Clause 17 [Powers of High Court in case of default in furnishing particulars]:
LORD MANCROFT: This Amendment and Amendment No. 29, which marches with it, are intended only to clarify the existing draft. I beg to move.
Amendment moved—
Page 16, line 28, leave out from ("an") to ("and") in line 29 and insert ("application under the foregoing subsection is made against any person party to an agreement").—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: I beg to move the next Amendment, which is consequential.
Amendment moved—
Page 16, line 32, leave out ("such an order") and insert ("an order giving an authorisation under that subsection").—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18 agreed to.
Clause 19 [Jurisdiction and powers of Restrictive Practices Court]:
5.37 p.m.
LORD JESSEL LORD JESSEL moved in subsection (1), to leave out "(b)" and insert "(a)". The noble Lord said: This is a small Amendment but I think it deals with quite an important point. I should like an explanation of the reason for the omission from this subsection of any reference to Clause 7 (9) (a). As the Committee are aware, paragraph (a), refers to direct exports. I am puzzled as to why this paragraph has been left out in this particular place, as the agreements covered relate exclusively to exports and these agreements are exempted from Part I of the Bill. I beg to move.
Amendment moved—
Page 17, line 43, leave out ("(b)") and insert ("(a)").—(Lord Jessel.)
THE LORD CHANCELLOR: This Amendment would exclude from the jurisdiction of the Restrictive Practices Court any restrictions which relate exclusively to the supply of goods by export from the United Kingdom. As the Bill is drafted, the Court has no jurisdiction over agreements the restrictions in which relate only—I repeat "only"—to exports from this country. Such agreements come under Clause 29 of the Bill and would be subject to notification to the Board of Trade, which could refer them to the Monopolies Commission. It might be that the agreement contained, in addition to export restrictions, restrictions which relate to the supply of goods on the home market in this country. In that case, when the agreement comes before the Restrictive Practices Court all the restrictions in it, including the export restrictions, can be judged upon by the Court. I think your Lordships, on consideration, will see that the reason for this is perfectly plain and simple. It can reasonably be assumed that, if an agreement contains both export restrictions and restrictions affecting the home market, there must be some link between the two. For example, export restrictions may be accepted by

905
British suppliers as a quid pro quo for restrictions accepted by foreign suppliers on imports into this country. In such circumstances, the restrictions cannot be judged separately. If, on the other hand, export restrictions stand on their own, there should be no difficulty in their forming part of a separate agreement which would then be exempt from Part I of the Bill, although subject to Clause 29. For these reasons I cannot accept the Amendment. I think that on consideration my noble friend will see that I must deal with a situation which is a very common one. I am not going to mention names of particular agreements or particular firms, but I am sure that everyone in the Chamber will know one or two of them.
LORD JESSEL: I thank the noble and learned Viscount for his explanation, which satisfies me. I make no apology for raising the point, because it has puzzled many people. I now beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MANCROFT: This Amendment is consequential to the Amendments to Clause 6 and Clause 9 dealing with the recommendations of trade associations. I beg to move.
Amendment moved—
Page 18, line 21, at end insert:
"(4) Where any restrictions accepted under a term implied by virtue of subsection (7) of section six of this Act in an agreement for the constitution of a trade association are found by the Court to be contrary to the public interest, the Court may, without prejudice to its powers under the last foregoing subsection, make such order as appears to the Court to be proper for restraining the association or any person acting on its behalf from making any recommendation to which that terns would apply."—(Lord Mancroft.)
On Question, Amendment agreed to.
LORD MANCROFT: This Amendment is purely drafting. I beg to move.
Amendment moved—
Page 18, line 27, leave out ("subsection (2)") and insert ("subsection (3) or subsection (4)").—(Lord Mancroft.)
On Question, Amendment agreed to.
On Question, Whether Clause 19, as amended, shall stand part of the Bill?
LORD LUCAS OF CHILWORTH: Perhaps this is a convenient place to put a question to the noble and learned Viscount the Lord Chancellor. In setting
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up this Restrictive Practices Court we are departing from judicial practice in this country. It is a quasi-judicial Court, because it will contain laymen sitting with a judge; but I understand that, as it is a judicial court, the only people who will have audience before it will be barristers and solicitors. I wonder whether the noble and learned Viscount would think of varying that. We have taken one step away from precedent here, and I see no reason why we should not take a further step. I think that it would be convenient and save a considerable amount of money if we could extend audience before the Court to secretaries of companies, who may or may not be lawyers, and to accountants. They would know better than some barristers the language to use in explaining matters to lay members of the Court. I think that it would save much expense, and would help smaller firms who may have to appear before the Court, not as delinquents but for interrogation, if the noble and learned Viscount would extend this right of audience to accountants and secretaries—if he likes, with qualifications. Would the noble and learned Viscount be good enough to give the Committee his opinion?
THE LORD CHANCELLOR: I almost see the shades of Lord Eldon and Lord Ellenborough clustering round me and throwing doubt on what I say. I am grateful to the noble Lord for raising this point. He will see the right of audience laid down in paragraphs (10) and (11) of the Schedule. These say:
"In relation to the attendance and examination of witnesses, the production and inspection of documents, the enforcement of its orders, and all other matters incidental to its jurisdiction under this Act, the Court shall, subject to the provisions of this Schedule, have the like powers, rights, privileges and authority—

(a) in England and Wales, as the High Court;

(b) in Scotland as the Court of Session;

(c) in Northern Ireland, as the High Court of Northern Ireland."

Then come the material words:
"Every person who has the right of audience at the trial of an action in the High Court or in the Court of Session, or in proceedings preliminary to such a trial, shall have the like right at the hearing of any application to the Court, whether sitting in England and Wales or in Scotland, or in proceedings preliminary to such a hearing, as the case may be;"
There follow then the words with regard to Northern Ireland. That is to say, the

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right of audience is restricted to members of the Bar, but not restricted geographically.
I am most anxious that the problem of dealing with restrictive practices and agreements should be taken out of politics. I came to the conclusion that it would be physically and mentally impossible for any President of the Board of Trade to deal with these agreements and give personal attention to them all. Others may disagree, but I gave careful consideration to this before coming to a decision. From twenty years' experience in another place, I simply do not see how a modern Member of Parliament, with all the calls upon him, would have time to get up all the documents which would come before such a tribunal. I am also anxious that the law should play a dynamic part in the modern State. It is my belief that the law is not a static thing. It must enlarge its scope as new problems arise, with many new facets, in this most complex organism, the modern scientific and Welfare State. I believe that the law can provide the best machinery for obtaining a just result on a specific issue. So this Bill has been drafted to try, in an economic field, to find, so far as is possible, a justiciable issue which will be meet and suitable for a court to consider and to pronounce upon. That is the construction of the Bill.
So far as I can see, not only from my own conversations but from what has appeared in the Press, those who are concerned with the Bill, who will be largely those in industry, wanted a court procedure in order to be sure that the matters with which they are involved were determined in the way I have mentioned. In looking for something to work on, I took, as a model, the Railway and Canal Commission, a court which included lay members, because, in its narrower field, it had to consider problems which had an economic flavour. The noble Lord will remember that the Commission had to deal with the special rates which are given by railway companies to different parts of our national economy, and the like. In this Bill, we have produced a Court which will have like powers and authority as a High Court of England, the Court of Session in Scotland and the High Court of Northern Ireland.
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I am sorry to have taken so long, but the noble Lord raised an important point. I think that it is vital to this Court that it should have the prestige of the High Court, which comes from the fact that its machinery works along lines that are well known and through persons who are familiar with it. I should be sorry to see that machinery, which is a well-tried method of arriving at the truth and justice, interfered with in the way noble Lords have suggested. That is the reason why I have come to these conclusions and agree with the conclusions embodied in the Bill. I would ask noble Lords not to think that I am old-fashioned in the reform of the application of the law; in fact, noble Lords will appreciate that since I became Lord Chancellor I have already put before your Lordships three Bills for improving the functioning of justice in this country, covering the country courts, the criminal courts in the North of England, the whole of the Admiralty practice and many other points. I believe intensely that the law must continuously adapt itself and prepare itself to deal with these modern problems. However, I should be sorry to take away from something which I believe gives great confidence—namely, a court of like power and authority as the High Court. Therefore, I think we should maintain the procedure.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am grateful to my noble friend Lord Lucas of Chilworth for having raised this point. I appreciate what the noble and learned Viscount has said about the need for making the law as efficient as possible—but law as law. I do not for a moment agree that a Court such as this can be efficient only if it is made impossible for pleadings or representations to be made except by counsel on the basis usually followed in the High Court. I think that is an undue restriction upon the citizen. It is an assumption that in these modern days of education an ordinary citizen is not capable of presenting a case under the law; that when it comes to actual gatherings of people who want to be defended against discrimination, and have joined together through their own association to be defended against discrimination, they may not employ the best representative they can get. He need not be a Silk; he need not even have been called to the Bar: he may be the man best informed on the

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subject, either an accountant or secretary. But he will now first have to instruct solicitors and a barrister—and the latter very often on his feet near the case—as to what case he wants to put.
I have had a great deal of experience of this sort of thing, and I have had to conduct many cases before various tribunals under various Statutes. I agree with what was said by my noble friend earlier in the day, that this Bill may well become a lawyers' paradise. Indeed, I think it is much more hard and fast than that: I think it will become a great banker's deposit for their interest. They will be able to draw upon it increasingly; the cases will be numerous and the fees substantial. The Government have thought fit to set up a tribunal composed in part of laymen, and not only a judge or lawyers, to deal with Part I of the Bill; and to say that the rules followed in the High Court must be followed rigidly and that the free citizen is not to be given the right to defend his own point of view rather "gets my hackles up." I do not consider that it is good practice in the general interest of the citizen. It is very good practice in defence of the Bar, and could no doubt be argued for by way of efficiency in certain cases which may come before the Court. But I think it is not a step forward for the ordinary citizen, rather is it a step in retirement.
LORD SALTOUN: I sympathise with what the noble Viscount, Lord Alexander of Hillsborough, has said. I have been almost infuriated at the reluctance of my counsel to say to the court before which I was appearing exactly what I wanted to say. However, I must admit that, if counsel had done so, it would not have advanced my case one jot.
LORD LUCAS OF CHILWORTH: When the noble and learned Viscount the Lord Chancellor said that he hoped your Lordships would not think he was old-fashioned I thought I saw a blush start to spread over his face. If we are doing one thing in this Bill, we are protecting the monopoly of the law—I will not call it a restrictive practice. I should not want to extend the suggestion past the Restrictive Practices Court into the High Court, from which there is an appeal to the High Court. But perhaps the Lord Chancellor will think about this point. I am not going to press him unduly. I appreciate
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the first part of his remarks, about the dignity and prestige of the Court—I think that is a good thing. In my view, these things want lifting on to a high level. But I was thinking about the matter of expense, and the fact that, where there is a company secretary or company accountant with professional qualifications, it might save a lot of money if he could conduct his case. Going to law and employing barristers, as the Lord Chancellor will admit, is not a cheap pastime. It is only to save money, and perhaps to have the case represented equally, that I put forward this suggestion. However, as I say, I am not going to press it now, although I may return to it at sonic other time.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am sure that friends of mine will be interested in the procedure of this Court from a trade point of view, and I should like to know whether it will be possible for a secretary of a body being discriminated against, who is a solicitor, to appear before the Court. Has he to employ counsel under High Court rules?
THE LORD CHANCELLOR: I do not understand what the noble Viscount means by "a body being discriminated against", because what happens here is that the Registrar calls up parties to an agreement; the parties have then to satisfy the Court that they come within paragraphs (a) to (g) and the tailpiece of subsection (1) of Clause 20. Unless they satisfy the Court, then the agreement is ruled against, and the parties to it may be enjoined to stop it. There is no question of people complaining about being debarred from a hearing. If you had a party to the alleged restrictive agreement, and he was brought before the Court as a party to the agreement, I cannot see anything that would prevent him from appearing in person. But that is the man on the other side of the hill from the one referred to by the noble Viscount. The representation of complainants does not conic into this matter.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Why not? I am learning as I go along. I understood that the question or how we were to deal with actual restrictions that were taking place against certain sections of the public would be dealt with if they did not come

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at first sight under the control of the tribunal and would not be banned under this Court procedure. I understood earlier that the Lord Chancellor would take that into consideration between now and the Report stage. It seems to me to be impossible to have a powerful Court on this high level, ruling whether or not an agreement should be banned, without giving those who are being discriminated against an opportunity of submitting to the Court that the practice operating, although it has not been registered, ought to be registered. They should therefore be represented if they are presenting such a case to the Court. Surely we are not going to ban that.
THE LORD CHANCELLOR: I do not think the noble Viscount has the procedure under this Part of the Bill clear. The procedure is that every agreement which is registrable is prima facie against the public interest. Then, if anyone who is party to that agreement wants the agreement to go on, he has to show that it comes within paragraphs (a) to (g) and the tailpiece of Clause 20 (1), otherwise the agreement must end. As I have said, the Registrar will call up, and no doubt he and the President of the Board of Trade, who has the right to order him to call up in a certain order, will take first what he considers are, to put it bluntly, the worst agreements. When the agreements are called up, those who are supporting the agreement will seek to come within paragraphs (a) to (g). The Registrar will see that all relevant facts are put before the Court.
Let me explain it ad hunc for the moment—the noble Viscount will not take me wrongly. Supposing the Wholesale Co-operative Society were affected by an agreement, they would have submitted to the Registrar that they were adversely affected, and, if necessary, the Registrar would call their evidence if he thought it was relevant. That is the way it would come up. This is a procedure in respect of which there is only one way out. The only way out for a registered agreement is under Clause 20 (1). That is the procedure by which I stand, because I think it is most important that it should be put that way.
VISCOUNT ALEXANDER OF HILLSBOROUGH: This is an interesting development in my education on the Bill.
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I have been looking at this matter with some care and trying to find out what would happen. I gather from the noble and learned Viscount that, however large the organisation may be which is being discriminated against—say, for example, the Co-operative Wholesale Society—and whatever width of interest it may have, it has no method of approach to this matter unless it goes to the President of the Board of Trade, who will then report certain facts to the Registrar. It is left entirely to the Registrar to bring before the Court the evidence against the people complained about, and the Co-operative Wholesale Society can do no more than be called as a witness. Am I clear on that point?
THE LORD CHANCELLOR: Certainly.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I think that is an amazing situation, in view of some of the later provisions in another Part of the Bill: that people who are being discriminated against cannot themselves appear before a Court whose decision is final, and against whom there is no appeal, except on a point of law. All they can do, apparently, is to go first to the Minister; then their complaint is represented second-hand, through the Minister to the Registrar, and the Registrar may kindly call them as witnesses. I think that is a most extraordinary way to treat people who want justice.
THE LORD CHANCELLOR: The noble Viscount is learning gradually. May I impress this point upon him? This is what is going to be objected to in the Amendments which are coming. This Bill says that all these agreements are contrary to the public interest unless it is proved that they come within paragraphs (a) to (g). The noble Viscount cannot have it both ways. He cannot proclaim—which is what this Bill does—agreements to be prima facie contrary to the public interest and then ask for an opportunity to prove what is already assumed. That is the point which I do not think he has grasped. There is no need for the Co-operative Wholesale Society to prove it. It is presumed and the only way is under Clause 20 (1).
LORD LUCAS OF CHILWORTH: Perhaps I can help to clear the air. Perhaps the noble and learned Viscount

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will take his mind back to the discussion we had on Amendment No. 4. I said then that in many cases there were arrangements, but that I doubted whether anybody would find a written agreement or an instruction by a trade association. Prima facie evidence is submitted—I will use the Co-operative Wholesale Society, if you like—and a complaint is made to the Registrar. Now the Registrar, I take it, can consult whom he likes—that is nothing to do with me at the present time. If the Registrar does not think that that is an agreement, it dies there. Or must be bring before the Court, as a registrable agreement or arrangement, every and any complaint? How does the complainee, if he thinks he has a bona fide case, get past the Registrar? Is the Registrar's word final? My noble friend thinks that they should be able to get past the Registrar to the Court itself. Is there an appeal against the decision of the Registrar on the complaint that there is a discriminatory arrangement, or is the last word with the Registrar? If the noble and learned Viscount could answer that question, it should clear the air.
THE LORD CHANCELLOR: The noble Lord, Lord Lucas of Chilworth, has, of course, gone back to an earlier stage. Logically, he is quite right, because what I said in answer to the noble Viscount, Lord Alexander of Hillsborough, refers to the later stage, when there is a registered agreement. But there is the first stage. It is the duty of the Registrar to register agreements, and in doing that he must act and carry out his duty on the information that is given to him. As I pointed out to the noble Lord earlier this afternoon, if there is not an agreement in writing, he can proceed on an informal agreement. If he contends that there is no agreement in law, he can go to the High Court If he has not sufficient information, he can follow the procedure which I set out above and have people examined on oath to see that he has the information. If information is refused, then the person refusing it runs the risk that not only will the agreement be registered but that for two years at least it will be impossible for him to go to the High Court and try to show that it comes within the exception.
So there is a heavy duty on the Registrar, where any information is given to him—and more especially if informa-
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tion comes from the responsible quarters which have been mentioned—to have that agreement registered, and these are the methods by which he can ensure that it is done. Once the agreement is registered, there is no need for anyone else to prove that it is contrary to the public interest, because that is assumed. That is what the complaint is. Having been "shot at" in the front by noble Lords, I shall be "shot at" in the back by my noble friends who may say that I have gone too far. However, that is the procedure—and I do ask the noble Viscount to consider it. The presumption in law has been male in the Bill that it is unnecessary for anyone to prove what is established by any rule of law contained in a Statute.
6.11 p.m.
Viscount ALEXANDER OF HILLSBOROUGH: I shall read most carefully what the noble and learned Viscount has said on every one of our interventions in the debate on this particular clause and consider whether or not we must return to it on Report stage. In the meantime, I shall also have certain consultations with regard to the matter, because at present I do not feel satisfied that, if there is a very big case of discrimination which does not get by the Registrar, we can get a proper process of law. It is open to the other side to go to the Court and argue and, if possible, get a decision that their agreement is not one that ought to be banned. There ought to be equal access to the Court for the other side if they are not getting a proper channel through which to get an agreement registered.
LORD MILNER OF LEEDS: A good deal has been said about the constitution of the Court. May I ask a question on that matter, because I am personally interested? I observe that the Schedule, to which the noble and learned Viscount has referred, says:
"Every person who has the right of audience at the trial of an action in the High Court or in the Court of Session, or in proceedings preliminary to such a trial, shall have the like right at the hearing of any application to the Court.…"
That would appear to imply that only the individual or a member of the Bar will have that right?
THE LORD CHANCELLOR: Yes, certainly.
LORD MILNER OF LEEDS: And that there will be no right of audience for a solicitor in the High Court?
THE LORD CHANCELLOR: Yes.
LORD MILNER OF LEEDS: There would not be?
THE LORD CHANCELLOR: Yes.
LORD MILNER OF LEEDS: Can the noble and learned Viscount tell me why that should be so? This court is not, in fact, a High Court; it is a specially set up tribunal for a particular purpose. Why should the lower branch of the legal profession be debarred from representing a client, who perhaps cannot afford the services of the Bar? Secondly, may I ask the noble and learned Viscount this question—he may be able to give me an immediate reply: Will the assistance of the legal aid scheme be available to anyone under this procedure?
THE LORD CHANCELLOR: Legal aid?
LORD MILNER OF LEEDS: Yes.
THE LORD CHANCELLOR: It is now twenty-five years since I first heard the noble Lord, Lord Milner of Leeds, as an advocate and that was at a coroner's inquest in an accident that took place at Garaby Hill. Therefore, I have every reason to know that any client would be grateful for the noble Lord's assistance. On the other hand, this is a Court which is equivalent to the High Court and it is in no derogation of the great qualities of the solicitors' branch of the profession that the right of audience has been maintained in the same way as it is in the High Court. That is the short point. This is a Court of equal standing with the High Court, to be presided over by a High Court Judge, and therefore the right of audience has been kept the same. I hope that no solicitor will think that there is any reflection upon him. It is a matter for argument whether it should be altered, but I have tried to give reasons for keeping it the same.
LORD MILNER OF LEEDS: There are, of course, ten other members but only five judges, so it would appear that the hymen would be in the majority.
Clause 19, as amended, agreed to.
Clause 20:
Presumption as to the public interest
20.—(1) For the purposes of any proceedings before the Court under the last foregoing section, a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the Court is satisfied of any one or more of the following circumstances, that is to say—
(a) that the restriction is reasonably necessary having regard to the character of the goods to which it applies, to protect the public against injury in connection with the consumption, installation or use of those goods;
(b) that the removal of the restriction would deny to the public as purchasers, consumers or users of any goods other specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom;
(e) that, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to have a serious and persistent adverse effect on the general level of unemployment in an area, or in areas taken together, in which a substantial proportion of the trade or industry to which the agreement relates is situated;
(f) that, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to cause a reduction in the volume or earnings of the export business which is substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business) of the said trade or industry; or
and is further satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) resulting or likely to result from the operation of the restriction.
6.15 p.m.
LORD BAILLIEU LORD BAILLIEU had given notice of two Amendments in subsection (1), the first being after the word "shall", in the opening paragraph, to insert "not" and the second to leave out "unless" in the same paragraph and insert "if". The noble Lord said: I beg to move the Amendments standing in my name and that of my noble friend Lord McCorquodale. Here the attack from the rear

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starts. I was reminded of a certain famous poem when the Lord Chancellor was heading off a vigorous onslaught from noble Lords opposite:
"Stormed at with shot and shell,
Boldly they rode, and well."
It falls to my responsibility to direct the attention of the noble and learned Viscount to what industry regards as a fundamental weakness in this Bill and one to which we take grave exception. The present clause states that
"a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the Court is satisfied of any one or more"
defined circumstances—there are seven in all—
"and is further satisfied … that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement.…"
The noble and learned Viscount, in the statement he has just made, and the noble Lord, Lord Mancroft, in his statement on Second Reading, have made it clear that the presumption underlying this Bill is that restrictive practices between traders are prima facie against the public interest. The assumption is, therefore, that industry is doing something wrong. Without specific charge or proof, activities carried on for years by industry, often at the instigation of Government, are labelled as contrary to the public interest. To this industry strongly demurs. I ask noble Lords to realise what we seek in this Amendment—what it does and what it does not do. It does remove, or seeks to remove, from the Bill the stigma placed on industry. It does leave an issue coming before the court to be decided without overriding presumptions and after a full and fair trial. It does not remove the onus of proof from industry. It does not make non-justiciable the circumstances set out in Clause 20 (1), paragraphs (a) to (g).
We do not say that all restrictions are, good. We do not say that this clause treats industry as guilty unless they prove their innocence. We do not say that this clause imputes criminality. We do not object to these restrictions being challenged as being against the public interest and being brought under fair trial. We do object—and object strongly—to the presumption that in any trial of any issue affecting any restriction, the Court
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should start with the presumption against the industry that any restriction is contrary to the public interest. We say that, so far as we know, this is unprecedented in British law; that it is inequitable, and that if it is good law—which we question—it is poor psychology and will set a dangerous precedent for the future. It savours to some of us of too much of the droit administratif of France and not enough of the traditional regard for the freedom of the subject which it should be our constant duty to safeguard. We further say that it is unnecessary.
Why should the clause be framed in this way? In the course of the debate, we have heard reference to the need for "objective criteria" and for placing on industry the onus of proof. Industry is quite willing to justify its case. Where, I ask, is the onus shifted from industry by the proposed Amendment? How, I ask, does the proposed Amendment make the criteria less objective than that already embodied in the Bill? And if, as I am told, the argument against wording the clause in the way in which industry would like appears to be because if, in a particular case, an industry is unable to satisfy the Court that what it has done, or intends to do, is in the public interest, then the Court has by inference to find that the activity is contrary to the public interest, then why cannot the Court do that? Would the noble and learned Viscount tell me what the real difficulties are? Could he please explain in clear and precise terms so that those in industry can understand it? If it be said that, when put in the form of the Amendment, it does not present a justiciable issue, then I would ask, why is it not a justiciable issue, and who is the person or persons who have prejudged this question as to whether it is, or is not, a justiciable issue?
It may be argued that the Amendment makes very little difference to the effect of the clause, in that its effect is virtually the same. Then, I ask, why should not the Government accept it, if in doing so they remove a presumption which is totally unjustified and to which industry takes such great exception? If the argument is that the form in which the issue is placed before the Court by this Amendment is one for which there may be no precedent, then we must remember that this legislation is itself also unprecedented.
The noble Lord, Lord Mancroft, in dealing with the question of onus of proof in the debate on the Second Reading said [OFFICIAL REPORT, Vol. 198 (No. 107), col. 79]:
"The object is to define when it is in the public interest that the freedom of the individual to trade should be limited. It is not unreasonable, I should have thought, that the parties to an agreement which limits their own freedom in this respect, and in so doing limits the choice of other people as to the price they pay for the goods they make, should be asked to show that this is justified."
We do not cavil at that conclusion. Industry, as I have insisted, is quite prepared to justify its case in full and fair trial of any issue. My noble friend goes on to say:
"That is the reason for this admittedly controversial decision to place the onus of proof where it now lies."
May I say here that we have no wish to shift the onus of proof from where it now lies. What we wish to do, with the help of noble Lords and for the reasons that I have given, is to remove from this Bill the overriding presumption that each and every restriction which is in issue before the Restrictive Practices Court is to be deemed by that Court, by direction of Parliament, as contrary to the public interest.
I wonder what noble Lords opposite would say if it were sought to introduce legislation resting upon a similar presumption in regard to the restrictive trade practices which operate in the trade union field. As we know, these restrictions have a good historical justification; and the noble Lord, Lord Mancroft, rightly I think, pointed out that legislation appropriate to one case might not be appropriate to the other. I personally think the approach to the problem of restrictive labour practices through the machinery of the National Joint Advisory Committee is much more likely to achieve early and practical results than attempts at legislation along the lines of an Act of Parliament. I submit that in neither case, so far as labour is concerned, would we get very far by insisting that the trade unions should be asked to accept as a major premise that any of their practices having a restrictive content should be deemed to be contrary to the public interest.
I believe that there are many restrictions imposed by trade unions which
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some people would claim were adequately justified and others that they were against the public interest. Among many which would be quoted is the agreement which is common to many industries and with which many of us are familiar, under which is determined the ratio of apprentices to journeymen. Trade unions argue that the limit is necessary to ensure proper training and to maintain a level of craft skill. In certain trades since the war, however, this limitation has imposed a heavy burden owing to the restriction of intake in a time of great expansion. Another instance is the position of the bummarees in Smithfield Market. There the handling of meat is confined to a certain type of worker. When there was insufficient work to provide a living for the large pool of labour available, there was certainly a reasonable cause; but in a time when there is a shortage of labour the enforcement of the rule might well be said to operate against the freedom of the individual.
But what if these and all other restrictive practices in the labour field were to be generally proscribed as being against the public interest? What would noble Lords opposite think and say, and what would the trade unions think and say? I think they would think and say pretty well what I have thought and said to-day. For I think a Britisher's reaction to anything he regards as unfair and unwarranted is likely to be the same wherever we work in industry. So I would ask the Government if they would consider carefully the Amendment I have submitted. In doing so, I can assure the Committee and the wider public beyond us that industry seeks neither to evade its responsibilities nor to shift the onus of proof which has now been placed upon us. I beg to move.
Amendment moved—
Page 18, line 34, after ("shall") insert ("not").—(Lord Baillieu.)
6.27 p.m.
LORD MCCORQUODALE OF NEWTON: I should like humbly to support the noble Lord, Lord Baillieu, in what he has said. I think the Government will agree—indeed, I think it is on record—that they regard organised industry as having been most helpful in the preparation of this Bill. Although many restrictions and new terms are being placed upon it, industry has not been obstructive

921
in any way. I am particularly anxious that that situation should continue. The working of this measure will depend largely upon the good sense of all handling it, as do most of our industrial practices in this country, and I am particularly anxious that industry's cordiality towards this Bill, which has been evinced in many cases and at many times in another House and here, should be maintained. I believe that this intangible point is one which can have a tremendous effect to keep industry in that frame of mind, for I have been surprised at the strength of feeling which I have found in the industrial circles in which I move at this measure.
As my noble friend Lord Baillieu said, it may be argued that the Amendment that he has moved makes little difference to the effect of the clause as guidance to the Court. I believe I can claim that what is not specifically stated to be not contrary to the public interest may, by inference, be regarded as being contrary to that interest; but there is little difference in fact in saying as the Bill says now,
"a restriction, except in pursuance of any agreement, shall be deemed to be contrary to the public interest unless the court is satisfied,"
and in saying,
"a restriction, except in pursuance of any agreement, shall not be deemed to be contrary to public interest if the court is satisfied …"
Psychologically however, there is all the difference in the world between those two points of view. This Amendment, I think, is deserving of the most serious consideration if we want this Bill to be a success—and, believe me, I do want it to be a success. Surely, it is of the greatest importance to continue to obtain the closest co-operation from industry. I suggest to Her Majesty's Government that if they can see their way to accept this Amendment, simple as it is—it may merely be a change in the form of words—it will in the eyes of many industrialists remove the offensiveness of the present statement and will be doing a good day's work for the carrying out of this measure to which the Government has lent its hand.
LORD SALTOUN: I think we all agreed on Second Reading that if this Bill was to be a success it must have the real co-operation of industry. Passing Bills in our House is not like the National Health Service; you are allowed to have
922
a little "jam on your pill," and I think this is one of those cases where a little "jam on the pill" would be very nice.
LORD ROCHDALE: I should like to support strongly my noble friends who moved this Amendment. Lord McCorquodale of Newton, referred to something which he described as intangible—the fact of antagonising industry, which the clause as it now stands undoubtedly does and, if it is allowed to stand, will continue to do. But there is another, more practical, reason I should like to put forward for this Amendment. As the clause stands now, the discretion that is given to the Court is limited to the seven conditions laid down in paragraphs (a) to (g). Those paragraphs are limited and may, as time goes on, become inadequate and out of date; new conditions may occur. We in industry are constantly being told of the importance of adapting ourselves to change, and we try to do that as best we can. But if this Amendment is agreed to it will surely widen considerably the discretion of the Court, and, that being so, the Amendment is not only something which is desirable from an intangible point of view but is for industry highly important from a practical point of view. If we are going to attempt to change with the times so that we are in the forefront in the world's industries, the conditions under which we operate must have sufficient latitude to enable us to adjust ourselves to them, and I hope that the noble and learned Viscount, the Lord Chancellor, will bear that point in mind when considering this Amendment.
LORD BENNETT OF EDGBASTON: I rise on only one point. I entirely agree with what has been said. This change would be very much welcomed in industry. I hear a great deal of grumbling suggestions that we have been criminals. It does not affect my own industry, but during the period between the two wars, we were asked by the Government of the day to institute certain of these practices with other industries that were in trouble, and to advise them. It is a little hard when you have been asked and have helped to establish practices, to be told, "We are not suggesting you are criminals, but"—as they say in the Black Country—"you didn't ought to have". It seems to me that industry might be helped in facing these changes, which they are

923
willing to face quite voluntarily and helpfully, if any suggestion that they have been very bad boys in the past and they have got to be better in the future were dropped. Actually, what they were doing was at the request of the Government, and they carried over to days when the position was easier. But I am not so sure that the easy days we have been having in the last ten years are going on for ever. I am a little concerned that some of the schemes worked out to-day are to be condemned, as we may need something of the sort in the days to come.
LORD GRIDLEY?: I feel that I cannot allow this Amendment to be put without giving a word or two of my own support. I think it is hardly to the credit of any Government, of whatever Party, to introduce clauses in Bills which suggest that those responsible for industry have done something for which they are to be blamed and found guilty unless they can prove themselves to be innocent. There were cases in Bills promoted a few years back in which various reflections were made upon directors, and I well remember, in winding up the debate on the Third Reading of the Bill which nationalised the electricity supply industry, that I said to the House that I resented most strongly the aspersions cast upon those with whom I had worked for so many years, and that they were all honourable men. I think that was not without its impression upon the House.
Here, the point is, what do we gain if this Amendment is passed? Certainly I can see nothing which the Government can lose by accepting the Amendment, but it will make a great deal of difference when these matters have to be argued before the courts if this unhappy feeling is wiped out of existence altogether. If you want to discuss fresh arrangements with somebody you do not start by saying, "I do not care what you say; you have been guilty of these things in the past". You sit down together, without any aspersions of any kind attached to the business in front of you. Therefore, I would appeal to the noble and learned Viscount the Lord Chancellor not to rebut this suggested Amendment. For the sake of industry in general, I hope that the Government will be prepared to accept it.
LORD BARNBY: I suspect the noble and learned Viscount in charge of the Bill is under no illusion as to the strength of feeling in industry about this Bill. In speaking of this Bill now, I feel I must support the Amendment which has been so clearly put by my noble friend, Lord Baillieu. We all had the opportunity on Second Reading, and it is normal practice, to express our view; and having myself, with others, taken that opportunity and set out the reasons for my concern, I think it is only natural that I should wish to support this Amendment now. There is no purpose in going over it, because the reasons for it were so clearly put by my noble friend, Lord Baillieu. Therefore, it comes down to the balance of expediency.
The noble and learned Viscount has indeed a difficult task, because he is faced with those on the other side who suspect that anything that is put forward in opposition to this Bill may well be from motives of resistance to what is considered necessary. I am fully conscious that the Bill contains many provisions to which circumstances have called attention. I feel it is imperative to urge the noble and learned Viscount to have very careful thought about this particular part of the Bill. We want to look forward, not to go back, and it may well be, as Lord Gridley has just said, that the future will call for arrangements which may be contrary to the provisions of the Bill as it is now drawn. We might well then be thrown back to circumstances in which undoubtedly the denial of the opportunities of action along the lines earnestly recommended by Her Majesty's Government in difficult periods in the past will place us in difficulty. It is in that belief that we ought to take careful thought against throwing the net too wide. Let us hope, therefore, that the noble and learned Viscount will feel that the wording of the Amendment of the noble Lord, Lord Baillieu, is right.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Perhaps it would be convenient if I spoke now rather than followed the noble and learned Viscount. I am somewhat surprised at the speeches we have heard from noble Lords on the opposite Benches, not because I at all resent their defending what they think is a particular industrial interest, but rather

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at their ingratitude to Her Majesty's Government, who have taken the decision on the general formation of this Statute. Two noble Lords, at any rate, said they had helped the Government in the construction of the Bill by their advice and consultation. It is noticeable that we, on our side, have not been consulted very much about it. The Government, in what they have done, have been very kind to those noble Lords. In dealing with the implementation of their general conclusions, the Monopolies Commission state, in paragraph 242, two courses which could be adopted. They say:
"One would be to ensure a measure of publicity and supervision by requiring all agreements falling within the scope of our reference to he registered, and then to prohibit such of them as after individual scrutiny were not found to be in the public interest,"
whereas the second recommendation, the one which we, on our side, would certainly have desired, was very different:
"to prohibit generally by Statute all agreements covered by our reference, with provision for exceptions in particular cases."
Seeing how Her Majesty's Government have constructed their draft Statute and come down on the side of less penal treatment of these collective agreements, out of the two alternatives stated in the Report of the Commission, I should have thought that nearly all noble Lords opposite would be falling over themselves in gratitude to Her Majesty's Government for not having gone to the full and proper extent recommended by the Majority Report of the Monopolies Commission.
I thought I had better make clear to the noble and learned Viscount where we stand in the matter. We are grateful to Her Majesty's Government for the measure of control which is yet being brought into this Statute in respect of collective agreements. It is no good to say that that does not help the public interest; though it does not help as much as we should have liked, it is a big step forward. When it comes to asking that the whole position should practically be reversed by leaving out the two words in question and putting in the exact opposite, I should very much regret it if Her Majesty's Government gave way, for I am sure that that would only be creating delay in the progress of the Bill through another place.
LORD BARNBY: Does the noble Viscount attach no importance to the
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difference between restrictive practices for price maintenance as against collective trade agreements which can very effectively go to the advantage of the employment of labour?
VISCOUNT ALEXANDER OF HILLSBOROUGH: Believe me, I know all about collective agreements of the kind with which the noble and learned Viscount is dealing—say an agreement in regard to the iron and steel industry. But collective agreements operated discriminatingly against the public for price maintenance are still collective agreements, and fall within this Statute.
LORD JESSEL: I believe I heard the noble Viscount the Leader of the Opposition say he had heard two noble Lords on this side of the House say in their speeches that their firms, or they themselves, had assisted the present Government in the preparation of this Bill, while nobody on his side of the House had been so lucky. I listened carefully to the debate and nothing of the kind was said. The noble Viscount misunderstood what was said: that during the war those firms, at the request of the Government of the day, had advised on such practices. I feel that that should be put on record, because the noble Viscount the Leader of the Opposition has given a quite wrong impression.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I shall be quite content to examine the speech of the noble Lord, Lord McCorquodale of Newton, in Hansard in regard to helping Her Majesty's Government in the construction of this measure.
LORD McCORQUODALE OF NEWTON: I am not aware that I used the words "in constructing the measure". I said that they had helped, but everybody was asked for guidance and there was unlimited opportunity for all to express their views. The Leader of the Opposition in another place and the President of the Board both expressed the view that, as a result of that co-operation, the Bill had been improved. I am therefore surprised that the Leader of the Opposition should suggest that his Party had not been consulted in any way.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I did not speak of my Party; I said our side of the industry.
LORD GRANTCHESTER: I support the drafting of Her Majesty's Government. After all, the purpose of the Bill is to secure flexibility of the economy, and slow adaptation to change is in the interest of industry and not against that interest. It is through building up restrictions and preventing changes which normally would come about that damage is done. I should like to support Her Majesty's Government in their drafting of this measure.
THE LORD CHANCELLOR: I appreciate the emotional point which my friends have put, and in saying that, I do not mean anything derogatory. My noble friend Lord Baillieu will understand what I mean. He feels that this method of attack is a reflection on industry, because it says that the restriction will be deemed to be contrary to the public interest unless certain matters are proved. May I first point out to my noble friend Lord Baillieu that this is not dealing with industry but with certain agreements defined in Clause 6 of the Bill. The method by which we deal with it is by saying that certain agreements, defined in Clause 6, with the exceptions mentioned in Clause 7, shall be registered; and it is only agreements that come within the provisions of Clause 6 that must be registered. It is to these agreements that this onus applies. It is therefore only to those who are parties to the agreements which I have mentioned that the procedure applies.
I will put it to my noble friends on a much wider and deeper basis. That becomes clear from the perfectly comprehensible attitude which has been taken by both the Parties opposite. Her Majesty's Government have tried here to find their own solution. As the noble Viscount the Leader of the Opposition has pointed out, they did not take the solution suggested by the majority of the Monopolies Commission. I ask my noble friend Lord Baillieu to remember what that solution was. That solution was that any agreements which came within the classes set out in the Report of the Majority of the Monopolies Commission should, subject to certain much less extensive exceptions, be prohibited. That is the other solution. My noble friends must consider it from that point of view.
If the legislation had been that the agreement was to be prohibited, it is
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plainly absurd to say that it did not state that it was against public interest, because the reason the Monopolies Commission suggested that it should be prohibited was that they thought it was against public interest. We tried to work out our own solution. We said that agreements will not be prohibited ipso facto but that they will be deemed to be contrary to the public interest unless the parti can come within certain exceptions, and we took, in paragraphs (a) to (g), exceptions which I am not going to justify from one side of the House or the other. I am going to justify them on the ground that they are matters which any Government, looking after the position of the people of the country, ought to take into account.
Paragraph (a) deals with service. Servicing of the goods that are the subject of an agreement is an important matter. Paragraph (b) concerns research. Paragraphs (c) and (d) deal with measures that have to be taken in order to face the position of a dominant seller or a dominant buyer. Paragraph (e) relates to unemployment, which is something that we hope will never again cast on our life the shadows that we have seen in the lifetime of everyone here. But it is something that we must have in mind, and this meets the point of the noble Lord, Lord Barnby, who told us frankly that, though he tries to look forward, he cannot help looking back to those days of the 'thirties, when some of these agreements came into operation.
Then there is the tailpiece that the Court must further be satisfied that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public that may ensue. I dealt with that point in my speech on Second Reading. Let me put to my noble friends the other points which our solution involves. I said, in answer to a question a short time ago, that we have tried to bring into the Bill—and I think we have succeeded—a Court that will decide these issues which I have just mentioned and which I think are properly justiciable issues. We have given to industry, as I believe, the advantage of the best possible machinery for arriving at justice and truth. That is no small matter for them, and again I withdraw nothing of the praise that I gave on Second Reading, and a year ago, to the work of the Monopolies Commission. But the noble Lord, Lord Baillieu, knows

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that industry had, in many public utterances, complained about the Monopolies Commission, for this reason: they said that it was an inquisitorial procedure which was contrary to British traditions. Here we have substituted justiciable procedure, which is in accordance with British traditions.
Now I come to the point which the noble Lord, Lord Baillieu, put: that is, the specific question of the onus of proof. I have given your Lordships its origin, and I must remind my noble friends that this is not a matter which was inserted late into the Bill. A year ago my right honourable friend the President of the Board of Trade stated in the House of Commons—and I have stated in your Lordships' House—that in our view, as we were rejecting prohibition, we thought the onus should be placed fairly and squarely on the industry, association or firm to show that they came within the exceptions. It is not a new matter, and it has always been part of the solution which we have put forward. But I point out again to my noble friends that, when there are a general rule and exceptions to it, it is not contrary to British justice, but is a perfectly ordinary and usual method, to say that, if anyone wants to come within an exception to a general liability, or anything else you like, the onus is on him to prove it. That is what we have done here.
My noble friend Lord Baillieu mentioned the question of the justiciable issue. I have always said that my approach has always been, in any share I have had in the drafting of this clause, to see that its provisions would provide an issue which could properly be dealt with by a court of justice. I have always said that if anyone can help me—I care not who it is—in improving the justiciable issue, we are willing to have improvement. My right honourable friend the President of the Board of Trade has said the same. But that is not what has been asked here. What has been asked here is the making of a change that goes to the root of the special solution which we have put forward. And I do ask my noble friends to consider this. I said a moment ago, and I hope that the Committee will bear with me in repeating it now, that one of my ideas in putting forward this Bill has been to try to take one of the most difficult questions of our time out of politics. I do not believe it is a question that can
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profitably be discussed between political Parties and made the subject of the political battledore and shuttlecock. As I have said, there is a very simple reason for that. I do not believe that modern Ministers have the rime to examine all these various agreements. I do not believe that modern Members of Parliament could possibly acquaint themselves with enough to be able to deal with this in a political way.
I ask my noble friends to weigh this matter, because if to-night they undermine this solution and throw this back into the welter of unsolved political problems, they may well find that it becomes, may be forced to become, a political issue; which will mean that not only their views but the position of industry as a whole is returned into political strife. And that every one of us will regret. I am not ashamed to make an appeal to my noble friends not to press this opinion to-night. I ask them to consider gravely what I have tried to put before them and what has been said from every quarter of the Committee. They have made their point and I have tried to show them what has operated our minds, is ask them not to endanger the solution to one of the gravest problems of the twentieth century, which every country has had to face, and to prejudice and endanger the solution of their friends. I suggest to them that it would be a risk too grave to be taken at the present time.
LORD McCORQUODALE OF NEWTON: I wonder if the noble and learned Viscount could answer this question, for clarity's sake. I do not disagree with anything he has said, but it seems to me that what we are asking for is exactly the same as what he said, but in a slightly less impolite form of words, suggesting that any agreement
"shall not be deemed to be contrary to the public interest if…"
and so or, instead of
"shall be deemed to be contrary to the public interest unless".
The rest stands. To my mind there is no difference in the result. It is merely a more polite way of putting it. I wonder whether the noble and learned Viscount would apply himself to that point.
7.2 p.m.
THE LORD CHANCELLOR: I am sorry that I cannot see it from the point of view of my noble friend. I say that

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with great sorrow, because there are few occasions in our long political and personal friendship where we have ever disagreed. I want to put the difference. With his Amendments the clause would read
"For the purposes of any proceedings before the Court under the last foregoing section, a restriction accepted in pursuance of any agreement shall not be deemed to be contrary to the public interest if the Court is satisfied of any one or more of the following circumstances …"
But the basis of what we are saying is that the agreements are contrary to the public interest unless the parties to the agreement come within the seven specific categories that are mentioned in paragraphs (a) or (g). That is a completely different approach, and it is that approach which has justified us in rejecting the views of the majority of the Commission. We have taken the middle line between prohibition and doing nothing about it, as the Minority suggested. Unless we come out as a private enterprise Party, saying that restrictions are contrary to the public interest unless they have one of these seven provisos, then we are whatever you like but we are not putting forward the solution that my right honourable friend the President of the Board of Trade and I suggested a year ago. I am asking my friends to deal with the real point: whether they are prepared to undermine that solution or not?
LORD BARNBY: Could the noble and learned Viscount put at rest the concern of many about what is likely to be the situation, when this proposed Bill has become law, if by a combination of misfortunes, this country is ever faced again with the situation that faced it in 1931? The circumstances to which I refer affected many trades and brought about rapid unemployment, accelerated by the devaluation in France. As your Lordships will know, the condition of unemployment was corrected only by the operation of what was then known as rationalisation. Many moves were recommended by the Government, and industry was urged, with the full agreement of organised labour—because organised labour needed it so badly at that time—to carry them out. What would be the situation under this Bill if any such situation returned? Presumably special legislation would be required
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to make possible the kind of rationalisation needed, which was agreed to by the Government in 1931 and contributed largely to rapidly reducing the grave unemployment at that time.
THE LORD CHANCELLOR: My noble friend Lord Barnby has asked me what would happen under this Bill. That is perfectly simple. Paragraph (e) says:
"… having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to have a serious and persistent adverse effect on the general level of unemployment in an area …"
That is one of the reasons that can be urged in justification of this, and if it were necessary to have restrictive agreements in order to rationalise that is covered. But I do not want my noble friend, or anyone else, to misunderstand me on this point. I do not think we can consider the situation to-day through the spectacles of the 'thirties. If we are going to deal with the major problem of the balance of payments and the recreation of our reserves, we have to get rid of restrictions in all parts of industry. This is the Bill which gets rid of restrictions on one side. Co-operation, working together on the National Joint Advisory Council will, I hope, get rid of restrictions on the other side. But if we do not regard our economic position to-day through expansionist eyes, which means getting rid of restrictions, increasing productivity and ultimately reducing prices in that way, then we are not taking the proper steps to deal with the economic situation as I see it, a position with which I should have thought all Parties would agree.
LORD LUCAS OF CHILWORTH: The noble and learned Viscount could not have stated the case for the Opposition better than he has by his last few words. We have always maintained that to do precisely what the Lord Chancellor has said should be the objective of the Government. We have always said that the Majority Report of the Monopolies Commission should have been accepted, and, as my noble Leader has pointed out, these arrangements should be outlawed straight away. As the noble and learned Viscount has said, the Government thought otherwise. We did not agree with the judicial approach, but thought otherwise. We argued that case on

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Second Reading. Now, I must say frankly that we could not accept the weakening of one word in this clause. This is the heart of the Bill, and that is why we did not put down any Amendments on the first and second clauses, upon which we feel strongly. We thought we should give the Government the opportunity of doing precisely what the noble and learned Viscount has said they will do, and in that he has our support. We may think that he is going to have a hard row to do it, but he certainly would not stand a chance if he weakened upon one item of what are the justiciable issues to be put before this Court.
THE LORD CHANCELLOR: I have tried to think out the answer to my noble friend Lord McCorquodale of Newton, and I now have it in writing, so that I may give it to him clearly. The cardinal issue is that, under the Amendment, if the parties did not satisfy the Court on paragraphs (a) to (g) and the tailpiece, there would still be no grounds on which the Court could declare them to be against the public interest unless the Registrar satisfied the Court to that effect. The presumption about the public interest and the onus of proof hang together.
LORD BAILLIEU: I am grateful to the noble and learned Viscount, the Lord Chancellor, for his patience and for the clearness with which he has stated his view. He has spoken feelingly on this matter, of which he is a master. He has permitted us to speak with equal frankness in a cause on which we feel deeply ourselves. He will forgive me if. I say that I am not yet clear in my own mind why this Amendment cannot be made. I am probably very obtuse. I agree with the noble and learned Viscount on everything he said about the character of the Bill and the substitution of a judicial procedure, which has just the qualities of fairness that appeal to us, and I need not go over the point I made about the onus of proof. Those things we accept unreservedly. What we are still intensely concerned about is the point that I attempted to make: why, in fact, it was necessary to frame this opening clause in this way. The noble Lord, Lord Lucas of Chilworth, has told us why noble Lords opposite want to retain it, and that is perhaps a reason why some of us here would like to see it amended.
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I will withdraw the Amendment now, but, if it is desired, I will raise it again on the Report stage.
Amendment, by leave, withdrawn.
LORD JESSEL LORD JESSEL moved, in subsection (1) (a), after "injury" to insert: "whether to person, goods or premises". The noble Lord said: The purpose of this Amendment is to make it quite clear that the words in line 39, page 18 of the Bill, "to protect the public against injury" do not limit the application of the subsection to personal injury only. Especially in connection with the installation of goods, I suggest that not only personal injury should be covered, but danger from fire due to faulty electrical work, which could cause damage or destruction of property. My argument is that restrictions which are imposed to ensure skilled service in installation or operation of potentially dangerous plant and equipment should be justifiable, whatever the nature of the injury done, whether to persons or to property. I think the word "public" in line 39 is probably a term that is wide enough to cover everybody; that is to say, not merely the man in the street, but also an industry using the goods concerned, or a shopkeeper. The injury inflicted on industry or a shopkeeper may well in some cases be greater to property than to the person. That is why I am asking that both types of injury should be specifically included. I beg to move.
Amendment moved—
Page 18, line 39, after ("injury") insert the said words.—(Lord Jessel.)
THE LORD CHANCELLOR: Under paragraph (a) of subsection (1) of Clause 20, as it stands, the parties to an agreement can plead that a restriction is reasonably necessary, having regard to the character of the goods to which it applies, to protect the public against injury in connection with the consumption of goods. As my noble friend has said, the Amendment would mean that injury to persons, goods or premises could all be taken into account under this paragraph. This would be to extend the arguments allowed under the paragraph more widely than is acceptable to the Government. The intention is to allow a ground for pleading in those probably rather rare cases where a restrictive arrangement protects people, whether users of the goods or a member of the

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general public, from personal injury. It will be remembered that this was one of the reasons which the Monopolies Comsion, in their Report on collective discrimination, considered could justify a restrictive practice. It may be remarked that where, for example, goods are highly inflammable and the buildings in which they are stored might catch fire, it would seem that this could reasonably be regarded as threatening injury to the public.
The result of the Amendment would be tantamount to allowing under this paragraph any plea that a restriction was necessary for safeguarding the quality of the goods. It would, of course, be open to the parties under paragraph (b) of the subsection to argue that the removal of a restriction would deny to the purchasers of the goods concerned the specific and substantial advantage of the maintenance of certain standards of quality. I suggest that this makes a difficult enlargement, and I would ask my noble friend Lord Jessel—because this is not a major point in the Bill; as he said, it is a minor point—not to press his Amendment to-day, but to consider, as I will, whether there is any intermediate stage one can find which would enlarge it to some extent but not enlarge it too far. If I cannot find any way of doing this, I will let him know, and he can put an Amendment down again on Report.
LORD SALTOUN: Does the word "public" include employees of any firm concerned?
THE LORD CHANCELLOR: I should like to consider that point and give my noble friend Lord Saltoun a considered answer. Whenever I am asked to construe a set of circumstances, I think it is worth while to do it carefully.
LORD JESSEL: In view of what the noble and learned Viscount has said, I am pleased to withdraw my Amendment on the lines he has suggested.
Amendment, by leave, withdrawn.
LORD JESSEL LORD JESSEL moved in subsection (1) (b), to leave out "the public as". The noble Lord said: This is an even smaller Amendment. It appears to me that in this paragraph the intention is that the benefit of the restrictions shall apply to purchasers, consumers or users. The
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addition of the words, "the public as" do not appear to add anything to the paragraph. I am told that it is possible they might be interpreted as unduly limiting the class of beneficiaries. It might be argued, for instance, that public authorities, or national or area utilities, would not be covered by the description. Therefore, I suggest that, in order to remove any doubt, these words should be omitted. I beg to move.
Amendment moved—
Page 18, line 41, leave out ("the public as").—(Lord Jessel.)
LORD MANCROFT: I think I may be able to give the noble Lord, Lord Jessel, a little help. His Amendment would enable the parties to an agreement to plead, under paragraph (b) of subsection (1) of Clause 20, that the removal of the restrictions would deny specific and substantial benefits to purchasers, consumers or users of the goods concerned. In the Bill as it is at present drafted, the removal of the restrictions must affect "the public as purchasers, consumers or users." I agree that there is possibly room for doubt whether the use of the word "public" would mean that the benefits to intermediate purchasers rather than final consumers—that is, purchasers of plant rather than purchasers of consumption goods—could not be put forward under the paragraph.
Furthermore, the argument has been put forward that purchasers such as the nationalised industries and Government Departments would not be regarded as "the public," although in fact that seems to be just what they are. There is no intention on the part of the Government to exclude such purchasers from the scope of the paragraph, and they are prepared, therefore, if the noble Lord, Lord Jessel, is agreeable, to consider tabling an Amendment at the Report stage to make it clear that "public" has this wide connotation. I am afraid that I cannot accept the Amendment of my noble friend Lord Jessel as he has drafted it, because it might mean that benefits to particular groups of purchasers, as compared with other groups, could be argued under the paragraph. In other words, it could be used to justify discriminatory trading by rings. If the noble Lord is prepared to withdraw his Amendment, I will see if I can do something by the next stage of the Bill to meet the point he has put forward.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Before the Amendment is withdrawn, I should like a careful examination of what the noble Lord seems to indicate he is going to do. I do not want to pass judgment on this point until I see his draft, but I think it is fundamental—as I think he recognised in the course of his speech—to retain the reference to the "public." There may be all sorts of private agreements passing through because they are of benefit to certain purchasers, consumers and the like, yet they may ignore all the other poor consumers who are still subject to discrimination. That would be fatal to the whole purpose of the Bill, and I assume that the noble Lord is going to keep the public in view in this Amendment.
LORD JESSEL: I thank the noble Lord, Lord Mancroft, for his reply. I am glad that he appreciates my point about public utilities, and on his assurance that he will look into this matter I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD GRANTCHESTER LORD GRANTCHESTER moved, in subsection (1), to omit paragraph (e). The noble Lord said: I think we should all agree that any provisions for exemption should be as precisely defined as possible, and should not bring in too remote considerations. I submit that this clause is not the way to deal with unemployment, should we be unfortunate enough to experience it. Her Majesty's Government have been continually emphasising that, in order to keep the economy efficient and strong, flexibility in movement is essential when conditions change in industry. To keep anyone employed in uneconomic conditions can lead only to increasing unemployment and not to diminishing it. It is no cure for unemployment. This clause, therefore, appears to me to be undesirable in principle and likely in practice to lead to argument and difficulty in interpretation. And I suggest it is not an issue upon which the Court should pronounce. I beg to move.
Amendment moved—
Page 19, line 19, leave out paragraph (e).—(Lord Grantchester.)
LORD BARNBY: I hope that this paragraph will not be omitted. I wanted to avoid a protracted discussion with the
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Lord Chancellor on the former Amendment of my noble friend, but I would remind your Lordships that the Lord Chancellor laid emphasis on the fact that his grounds for allaying our concern were that paragraph (e) was adequate and covered our point. Any suggestion that it should be withdrawn would entirely torpedo his proposals. The point I wish to emphasise to the noble Lord, Lord Grantchester, is this. I am particularly concerned with the wool textile industry. You might, in a large area like the West Riding have fairly good employment, and you might have severe unemployment, as indeed occurred a few years ago, in one particular industry. It is doubtful whether the wording, as it is now, without any modification, would cover the circumstances which would arise in the particular instance which I have indicated —at least, so I am advised. Therefore, I would urge most strongly that the noble Lord's Amendment be not accepted.
LORD GRANTCHESTER: I should like to ask the noble Lord whether he thinks that this paragraph, as drafted, would deal with any unemployment we might have. If it does not, it is much better omitted, in order not to hamper the proceedings before the Court.
LORD BARNBY: That is not my understanding of it, as I have been advised. I would assure the noble Lord that my concern is based only upon the memories of difficulties that occurred in the past—and that applies to many of our feelings in regard to this Bill. It is our concern that in providing against abuses we may be casting the net too wide. In our enthusiasm, we may land ourselves in a position based on the experience of the past, which may not apply in the future and which would make difficulties for ourselves. I strongly urge the rejection of this Amendment.
7.31 p.m.
LORD MANCROFT: May I begin by apologising to the noble Lord, Lord Grantchester, if I appeared to reprove him when dealing with his last Amendment, for not having explained it adequately. I was doing nothing of the sort. I was merely apologising to him because the speed with which he moved the Amendment took me slightly by surprise and I had not gathered myself to answer him as I should have liked to do. On this

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Amendment, I can give the noble Lord no more comfort than I could before. It could be a very controversial subject, but I want to keep my remarks as uncontroversial as I can. What the Amendment would do is this. It would eliminate as a ground for pleading the argument that the removal of a restriction would have a serious and persistent adverse effect on the general level of unemployment in an area or areas in which a substantial proportion of the trade or industry to which the agreement relates is situated. This would be to remove from the purview of the Court one of the justifications for a restrictive practice which is most sincerely argued. If, in fact, the removal of a restriction would have the effect in question, this is a factor which, in the Government's view, is relevant to the Court's judgment as to whether or not the restriction is contrary to the public interest.
Your Lordships may argue that, because it is the function of the Government so to guide the economy that there will not be large-scale unemployment or even large pockets of unemployment, therefore it is wrong to allow justification for the continuation of a restriction on the grounds that there is fear of unemployment. It is, I need hardly say, the Government's policy to maintain a state of full employment. But this does not mean that in special circumstances there may not be serious unemployment, unfortunately, in a particular locality. In spite of a general condition of full employment, there have, in fact, been considerable differences in the level of unemployment in the various parts of the United Kingdom since the war. In the light of these considerations, I am afraid we cannot accept the noble Lord's Amendment.
I hope that the noble Lord will note that the test in paragraph (e) is quite a severe one—I bring that to the attention of the noble Lord, Lord Barnby, as well. The parties must show that the general level of unemployment, and not just the
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level of unemployment in the industry or trade in question, would be likely to be adversely affected to a serious degree by the removal of the restriction. They must also show that the unemployment would be likely to persist over a long period. If they succeed in satisfying the Court on this point, they must still, of course, meet the condition in the tailpiece of subsection (1) of this clause. In view of the explanation which I have given the noble Lord, I hope he will at least think again about the matter.
LORD LUCAS OF CHILWORTH: I am getting rather hardened to the idiosyncracies of Parliamentary draftsmen. Am I right here? At the third line of paragraph (e), we read:
"… the removal of the restriction would be likely to have a serious and persistent adverse effect on the general level of unemployment …"
Surely that is what we all desire, is it not?—an "adverse effect on the level of unemployment"?
LORD MANCROFT: I see what the noble Lord means.
LORD LUCAS OF CHILWORTH: Surely that should be an "adverse effect upon the level of employment". Have I caught the Parliamentary draftsman? Because he has often caught me.
LORD MANCROFT: I grasp the noble Lord's point more quickly than I grasp most of his points. He has caught me, certainly. Whether he has caught the Parliamentary draftsman or not is a different matter, and I should be quite prepared to lay six to four on the Parliamentary draftsman, for some reason which has not yet occurred to me. I see exactly the point the noble Lord is making and will have the matter looked at.
LORD GRANTCHESTER: I thank the noble Lord for his remarks. Although I still think that the clause is quite impracticable and useless for the purpose for which it is put in, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.

BUSINESS OF THE HOUSE
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, I suggest that it might be convenient for your Lordships to adjourn now until 8.45; I believe that that was the general arrangement made. It might also be convenient if I told your Lordships that it has been arranged, through the usual channels, that the House will not sit on Monday, but that the Road Traffic Bill. Report stage will be taken on Tuesday and again on Thursday, if it is necessary to conclude it then. That seemed to suit everybody on both sides of the House.
[The Sitting was suspended at twenty-five minutes before eight o'clock and resumed at a quarter to nine.]

RESTRICTIVE TRADE PRACTICES BILL
8.48 p.m.
LORD AMWELL LORD AMWELL moved, in subsection (1) (e) to leave out all words from "unemployment in" and to insert:
"the trade or industry to which the agreement relates;"
The noble Lord said: As the noble and learned Viscount the Lord Chancellor has said, Clause 20 deals with prima facie proof. The question of what the noble Lord, Lord Baillieu, called "impoliteness" is one that I cannot and do not particularly desire to enter into. But there is one matter, first of all, that I should like to point out to the Government in reference to the list of exemptions which form the basis of a plea before the Court—the responsibility of those concerned to prove that they are innocent of any guilt whatever in the matter of these restrictive practices. In this clause we have the words:
"For the purposes of any proceedings before the Court … a restriction accepted in pursuance of any agreement shall be deemed to be contrary to the public interest unless the court is satisfied of any one or more of the following circumstances;"
The point I want to be sure of is that those circumstances are in themselves highly restrictive. There are seven of them, but they are not comprehensive; they do not coven the possibilities of what might be argued in favour of exemption, and that is one of the reasons why have put clown this Amendment to insert after
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the first "in" on page 23 the words "the trade or industry to which the agreement relates".
The Lord Chancellor has put the point that it is the level of unemployment that is to be dealt with in this particular subsection of the clause—the general level of unemployment, not the level of unemployment in reference to any particular industry. I should like to ask the Government what they mean in respect of policy there. Do they desire the direction of labour, irrespective of industries and irrespective of the nature of the skilled labour in those industries? Because if they are going to apply it in bits and pieces and shreds and patches, as it stands at present they will be up against the difficulty—a very important point—that you cannot direct labour outside an industry if the labour is skilled. The only labour you can direct outside the industry is unskilled labour. If you direct skilled labour from one industry to another kind of industry, you degrade that labour and make it unskilled. Shop assistants, for instance, cannot go and build liners on Clydebank. A fitter cannot go and make bricks. It is a general degrading and lowering of the standards of labour if you do as the Lord Chancellor suggests it is desirable to do: base the argument entirely upon the question of the general level of unemployment. That is one of the reasons why I think that here you have a restrictive line.
I am not going to enter into the argument whether this methyl is desirable or not; we have settled that. But I would prefer that there should be a much wider choice of appeal on this question before the Court. The reason why I have put clown this Amendment is my concern for certain sections of industry and certain large bodies of workers in this country and the question of unemployment and general conditions of industry. It has to be realised that, though it is all very well to talk of restrictive practices, some restrictive practices are necessary to the stability of an industry.
Probably many Members of your Lordships' House will be surprised to know that the largest industry in this country is the distributive industry. I call it an industry because from the point of view of trade union stricture it is an industry, although there might be some

943
quibble on the point. In the advertising world, for example, it is an accepted fact that it costs five times as much to sell a standard commodity as it costs to make it. I knew that when I was a copy-writer in an agency. I knew that a packet of soap which would cost 10d. could be made ex factory for 2d.; so that the great bulk of the retail cost of the staple article is the cost of distribution. That is the price we pay for the highly machine-organised system under which we live at present.
The biggest unions concerned with distributive workers are very much in doubt as to the generalities that are said on this question of restriction. I am opposed to monopolies and to restrictions of this character, and I agree with the main principles stated by the Labour Party and by many noble Lords opposite with regard to their effect upon public welfare. I was in that industry for eleven years at the turn of the century, when conditions, in many ways—I am not thinking particularly of wages but of general conditions—were very bad. For years I worked a twelve-hour day, and when I was sent on relief to other branches I had to work fifteen hours on a Saturday. That was the general condition in most retail trades at that time. Now things have altered, partly, of course, as a result of trade union organisation, but also because intelligent business men and industrialists now realise that it does not pay to keep working people in squalor and under bad conditions. My employer was a very good one. He took the progressive line that he would pioneer some reduction in working hours. He was called to account by some of his rivals and his reply was: "I do not want tired men working for me." That is the background of our social reforms and of the Welfare State which has come into existence. It was realised that it is bad to have diseased, starved, over-worked people in this modern industrial age.
If one goes back to "cut-throat" conditions, without any restriction even upon prices in the retail trade, one is going back to the bad days for industry and for the workers in that industry. The trade union concerned is well aware of that fact and is not so inclined to generalise upon this issue as is so often done. For instance, the President of the Union of Shop, Distributive and Allied Workers says:
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"The Union has had fifty years of bitter experience of `eastern bazaar' conditions in the distributive trades—low wages, sweated conditions—and we shall fight any attempt to make the present free-for-all scramble even worse."
I am not arguing in favour of monopoly. The monopoly question as such hardly enters into the question of certain restrictions that affect retail prices. I am not arguing that there should be no control of those restrictions, no interference with people who are "on the make" and who want to use every means of making money at the expense of other people. At the same time—and here we get to the inefficiency. I think, of this clause—I do not think that paragraphs (a) to (g) are discriminatory enough; I do not think that they are comprehensive enough. We must safeguard the stability of industry—any industry. Therefore, talk about "the general level of unemployment," and about industry in general, does not really meet the case.
Take the textile industry in this country. The people in that industry are very much concerned about the results of cheap labour in Japan which is on the verge of ruining the textile industry. It is an urgent problem, and to meet it the people in that industry want some form of protection. The executive committee of the Union of Shop, Distributive and Allied Workers has announced that it does not believe unrestricted competition is a solution of the problem. It believes that the trading instability which would follow would seriously endanger shop workers' living standards without any material advantage to the public. And I believe they are right there. And this feeling is not confined to the distributing trades. Various other trade organisations such as the Machine Calico Printers, the National Union of Dyers, the Bleachers and Textile Workers, the Amalgamated Weavers' Association, and the Amalgamated Association of Operative Spinners and Twiners, all representing the textile industry in this country, are at one in this. And there are others. They are all concerned about this matter.
What I want to put to the Government is not general propaganda. I should like an answer to the question I have already put: what is the policy of the Government in respect of the direction of labour if they talk about the general level of unemployment and not about the question of unemployment in regard to particular

945
industries. If they adhere to this idea concerning the general level of unemployment they run the risk of reducing the standard of craftsmanship, of making skilled men unskilled men for certain purposes. That is the reason why I have put down this Amendment, which I am told particularly fits the case. I think that the real basis of trouble about this clause is that it proposes a negative method. I am not arguing about the merits as they have been outlined so far, but there is here a negative method which cannot be comprehensive because there must be hundreds of cases which cannot be met by this particular series of paragraphs.
I do not want it to be thought that I am opposing the desire of the Government and the Opposition to protect prices and to protect the consumer, because I believe in a consumer economy just as the Co-operative Movement does. The Cooperative Movement is a consumer economy and not a producer economy.
VISCOUNT ALEXANDER OF HILLSBOROUGH: It is both.
LORD AMWELL: In the early days of the movement it was a consumer economy. The nearer we get to the zero price the nearer we get to production for use; and this idea of artificial standards, wage-grabbing, and all the rest of it is not fundamental to Socialists. I ask Lord Alexander of Hillsborough to consider it from the point of view that here you have represented in principle, voluntary cooperation upon the basis of a consumer economy. In that respect I agree that we ought to be careful about the power of certain sections to exploit the consumer. But while we are doing that, let us consider the vast question of possible unemployment and of going back to those terrible conditions of life in some industries, particularly in the industry of which I have some knowledge and to which I referred. There we have a definite opposition to the idea of putting the case of mere prices drastically and without careful consideration, when there has been such a scramble in the past. Members of that industry do not want to go back to such a situation. I hope that I have made my points clear, and I should like a reply to one or two of them. I beg to move.
Amendment moved—
Page 19, line 23, leave out from ("in") to the end of line 25 and insert ("he trade or industry to which the agreement relates").—(Lord Amwell.)
LORD SALTOUN: Before the noble Lord replies to the sympathetic speech of the noble Lord, Lord Amwell, I should like to ask one question. On what he has said I should have thought that he would move his Amendment as an addition, and not as a substitute for the words "in an area," et cetera. There seems to me to be two problems: the problem of the trade or industry concerned and the problem of the area, especially in these days when so many people have bought their own houses. I should have thought that what he wants should be an alternative to an area and not a substitution. I only ask for information.
LORD AMWELL: I have put it in that form advisedly because I do not think that as the provision stands in the measure it is workable. It is a matter of shreds and patches and bits and pieces. It cannot be done in that way. We must try to take into account the interests and structure of the industry. As the noble and learned Viscount the Lord Chancellor put the point this afternoon, this idea of generalising from the standpoint of unemployment will lead to tremendous trouble with regard to direction of labour.
LORD BARNBY: I would appear inconsistent if I did not rise to support this Amendment, particularly as it is one which I hope will give the appearance of an absence of partisanship. I realise that the noble Lord now in charge of the Bill would probably not like to give any undertaking about this matter to-night. But, while remembering the eloquent appeal which the noble and learned Viscount made in requesting my noble friend Lord Baillieu to withdraw his Amendment, in which he emphasised, in reply to my question, the value of this clause in surmounting the difficulties which I ventured to suggest might occur, I would support this Amendment. The noble Lord, Lord Amwell, has put the case with great clarity and I am sure that, coming from hint on the Benches opposite, it has much more effect than it could possibly have had if it had come from anyone else. But it gives me an opportunity of again emphasising the point the noble Viscount the Leader of the Opposition

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brought home this afternoon—namely, the all-over considerations of the Bill as regards the economic policy of the country.
I seek again to make the point, on the suggested malpractices of price rings, to which the noble Viscount referred this afternoon and which brought out almost hysteria. There are many who feel that in the indictment which has been levelled against industry too much emphasis is put on price rings for the sale of articles. The net which has now been spread, to my mind, causes concern, in that it may go too far in dealing with the matter on which the noble Lord who moved this Amendment laid such emphasis: that, in defence of employment in many industries, there must be agreements with regard to prices for conversion—that is to say, converting prices for specified commercial processes—and that, if those agreements are removed, it would cause serious dislocation in the industry. Because this Amendment has been moved in this way, it offers to me an opportunity of emphasising what has caused concern in many directions in industry. Emphasis is always put on price rings with regard to the sale price of commodities—a matter which is widely divorced from the arrangements which come under all the proposals of Clause 20, as the noble Lord, Lord Baillieu emphasised. That emphasis on one phase of the whole procedure might lead to neglect of possible dangers which arise under those angles to which the noble Lord who moved this Amendment has just referred.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Before the noble Lord replies, I would say that I am always glad to hear opinions expressed from all quarters of the Committee on an issue like this. But I must say I feel that the intention of the Government in this matter is fully covered by the subsection as it stands. I can see no possible reason for making an addition. I admire the ingenuity of my noble friend Lord Amwell in putting down the Amendment so as to have something upon which to make his speech. That is all right. I appreciate absolutely the main principle that he advances with regard to the need for protection of standards of labour in many of our industries. But if he selects the distributive industry, then I shall have
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to appeal to the noble Viscount, Lord Woolton, for a little support.
I have been a member of the U.S.D.A.W. for many years, certainly not less than a quarter of a century—although I am now only a member (as I am over age) by subscribing to the funeral benefit fund. The fact is that if some of the bigger departmental stores, and one or two of the multiple stores, had not pressed for Government legislation to set up their boards, the whole of the distributive industry in this country would still be a highly sweated industry; and if it were not for the trade union membership, which was secured first in the co-operative stores, secondly, in the departmental stores, and thirdly, in the modern expanding multiple stores, there would be a very small percentage of trade unionism in the industry. Even with those modern additions under efficient distribution. I doubt whether to-day more than 20 to 25 per cent. of the whole of the retail distributive employees are in a trade union. Therefore, I see no real point in trying to make an Amendment of this kind which does not alter the intention of the subsection at all. My difficulty is to get rid of discrimination against those who are organising to bring the biggest benefit to the consumers—discrimination for no reason at all except to maintain a high rate of profit for the least efficient.
LORD MANCROFT: I was going to begin my remarks by apologising to the noble Lord, Lord Amwell, for the fact that the dinner adjournment occurred at such a time that his Amendment was separated from that of the noble Lord, Lord Grantchester, with which it was closely allied, thereby necessitating his staying two hours longer. But I will not apologise now, because it has enabled us, by the greater time at our disposal, to have an interesting debate— "far reaching" I think is the technical term to describe a debate which does not stick wholly to the Amendment before us.
May I remind your Lordships of the real effect of the noble Lord's Amendment? What it would do would be to apply a test of unemployment in the trade or industry operating the agreement, and not a test of the level of unemployment generally in an area, or areas taken together, in which a substantial proportion of the trade or industry concerned is situated. Let us think for a moment what

949
that would mean. It would mean that the parties to a restriction could plead that its removal would involve the loss of jobs for workers in a particular industry, even if other employment were readily available. I am afraid If cannot agree with the idea that a prescriptive right to work in a particular industry should be recognised in this way. If we were to accept the noble Lord's Amendment, the result might be that high-cost, inefficient plants were maintained in operation. This would, I am certain the noble Lord would agree, not be in the long-term interest of any section of the community. Economic progress, I hope your Lordships will also agree, demands mobility of resources, including labour.
I am afraid that it is for these reasons —and they are fundamental reasons—that I cannot accept the Amendment. But I will do this for the noble Lord, if it will be of any use to him. He has ranged far wider than his Amendment and raised several interesting points, such as craftsmanship and degradation of labour, with which none of us can be anything but in wholehearted agreement. If he will allow me—I did not have the chance to follow the whole of his arguments on every point—I will look at it again, and if there is any point of substance upon which we can help him or set his mind at rest, I will see whether it can be done. I am afraid I cannot accept his Amendment, which goes to a fundamental point of this clause of the Bill.
LORD AMWELL: In view of what the Minister has said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD GRANTCHESTER LORD GRANTCHESTER moved, in subsection (1) (f), to leave out the final word "or" and to insert:
"provided that the restriction has not caused or would not be likely to be the direct cause of an increase in the price in the United Kingdom of the goods concerned; or".
The noble Lord said: There is nothing more irritating or unfair to those who buy in the home market than that they should he penalised for the benefit of a foreign buyer. This Amendment is designed to prevent a restriction from having that effect. More than that, no restriction should, I contend, be used to make a consumer here subsidise exports. To do so provokes retaliation and provokes the worst kind of trade war. It might also
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bring an exporter in conflict with the laws I of some Commonwealth countries, and so sow discord in the Commonwealth. For these reasons, I beg to move the Amendment.
Amendment moved—
Page 19, line 33, leave out ("or") and insert the said new words.—(Lord Grantchester.)
9.20 p.m.
LORD MCCORQUODALE OF NEWTON: I hope that the Government will not accept this Amendment. It seems to me that at this time, of all times, in our economic history, when our very life depends upon the export industry, anything like this, which is a direct threat to our exports, would be most lamentable. Under the clause as it stands, the Court have to weigh the advantage to the export business against any disadvantage that the home market may feel in the way of higher prices. Therefore the safeguard is there. But to say that possible slight increases in home prices are more important than the necessity to get export orders against foreign competitors would be, it seems to me, disastrous at the present time. All our energies should be turned to exporting more, and it may well he that in the export market we may not be able to get such a high price as in the home market; and the home market may have to carry some of our export trade. That is in the shape of the export trade generally. Anybody who has been engaged in that trade knows that that is often the case. If that is banned, what is left of our export trade may go altogether. I cannot think of anything more disastrous.
LORD SALTOUN: I agree with the noble Lord, Lord McCorquodale of Newton, and f should like to add one point. An individual firm may be placed in a position of great advantage over a group of its rivals.
LORD MANCROFT: I am afraid it is not a very happy Amendment. What it does is this. It would lot allow the parties to an agreement to justify a restriction under paragraph (f) on the grounds that it contributed to the export business of the United Kingdom, unless they could show that the restriction has not been, or would not he likely to be, the direct cause of an increase in the home prices of

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the goods concerned. The noble Lord, Lord McCorquodale of Newton, has put his finger on the difficulty at once: the effect of the Amendment would be to leave the Court no room for exercising their judgment on a matter which should, in fact, be an important factor in forming their opinion as to whether or not a restriction is against the public interest. If the removal of a restriction did result in a rise in price in the United Kingdom, this might, in some circumstances, be a desirable result; in other circumstances, the contrary might be the case. For instance, I have seen it argued in the case of goods in short supply that supplies for export markets have been reduced because sales on the home market have been encouraged by prices which have been kept artificially low through restrictive arrangements. The Court must look at each case on its merits. I have some sympathy with the difficulty which the noble Lord has in mind, but I am afraid that the cure which he has put forward might be a great deal worse. We cannot possibly accept this Amendment.
LORD GRANTCHESTER: I should like to thank the noble Lord. I am quite satisfied, because I have drawn attention to the topsy-turvy state of affairs, not only in this country but in many others, where home-produced goods are sold to the citizens of a country at higher prices than they are to people overseas. Nothing more topsy-turvy in trade could be imagined. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD GRIDLEY LORD GRIDLEY moved, in subsection (1), at the end of paragraph (g) to insert: "or
(h) that the removal of the restriction would be likely to have a serious and persistent adverse effect on the carrying out of technical education, research, and development in the industry concerned,"
The noble Lord said: In moving this Amendment dealing with technical education, research and development, I suppose it is quite unnecessary to emphasise what is so widely known and frequently discussed, written and spoken upon—that is, the growing shortage in this country of an adequate supply of technologists, craftsmen and other men of that kind for the research and design tasks which face us.
Since the period between the two world wars and during the inter-war period when trade was in such a severe slump, as has been said already, arrangements were made between various firms who tried to deal with what was a hopeless situation. An enormous advance has been made in the engineering industries from that time until now. How has that advance been secured? It has been secured by increasing annual expenditure on research, in an endeavour to train men from the universities, technical colleges, schools and so on. Noble Lords will remember the days when apprentices paid to be taught—they were indentured apprentices. To-day these young fellows are receiving handsome salaries. They are being provided by the works with trade schools and hostels, and managers from various works' departments go to lecture to them. In that way, industries are trying to get hold of the type of men they want as craftsmen.
I used to go to Cambridge years ago to select engineering students who had just passed their mechanical science tripos. With difficulty I used to get twelve to twenty of these young undergraduates to come into the works for two years' training. During those two years training they received the handsome salary, which was really more like pocket money (but they were happy to get it) of 35s. a week. To-day, such men are getting no less than £500 or £600 a year, the demand for them being so enormous and the supply forthcoming so utterly inadequate. This is troubling the universities and such technical colleges as Loughborough; it is troubling the grammar schools, who want to spend more money on improving their laboratories and providing themselves with engineering equipment. Therefore, it is absolutely vital that universities should be allowed and encouraged to spend even greater sums in the years ahead than is the case at the present time.
I believe it is true to say that in the electrical industry something like £12 million a year is now being collectively spent on research and development and technical education. Our educational establishments to-day are not turning out more than about one-twelfth of the corresponding output of technologists and scientists in Russia. They are far ahead of us. The result is that we shall have to take increasingly serious notice of

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Russian competition in the very near future, unless we make the most strenuous efforts not to lose the ground we have already gained. Therefore, when paragraphs (a) to (g) of subsection (1) of this clause are under consideration, I want to ensure that firms who spend large sums annually on research and development, on design work and so on, may be listened to when they claim that part of their expenditure should be treated as a proper working expense and must be covered in the price which is to be charged to the consumer or customer.
If one spends £40,000 in a year one does not charge the whole of that expenditure in one year. If you improve your product or develop something new, the invariable practice is to spread that expenditure over a period of years which will see out the life of that new product and until you have to substitute something even more up-to-date in its place. But if industry is to make the same progress in the next twenty years as it has done in the past twenty years, we must be allowed to spend whatever is necessary on research and development and technical education. For those reasons I beg to move this additional paragraph.
Amendment proposed—
Page 19, line 41, at end insert the said paragraph.—(Lord Gridley.)
LORD LUCAS OF CHILWORTH: I have listened to the noble Lord's argument. Would he tell me what the restrictive practice is the removal of which would hinder what the noble Lord wants to achieve? Surely his argument should be addressed to the income tax authorities, not a Restrictive Practices Court. His Amendment starts:
"That the removal of the restriction would be likely to have a serious and persistent adverse effect on. …"
what the noble Lord desires. What restrictive practice has he in mind?
LORD GRIDLEY: It is what we fear about the future, not about the past. We have been allowed to carry this expenditure as a working expense, but, as the noble Lord no doubt knows from his experience in business, one is not infrequently asked to quote a price which is subject to investigation. My experience is that when tenders are subject to investigation, questions are raised when certain items for research and development work are included in the cost as to whether that
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is a fair charge to include in the overhead charges.
LORD LUCAS OF CHILWORTH: That, surely, has nothing to do with the Restrictive Practices Court. I cannot see what the restrictive practice can be. Surely the noble Lord is arguing before the wrong tribunal.
LORD SALTOUN: May I say something on that very subject and support what my noble friend said? I expect noble Lords opposite know quite as much as I do about the Wakefield experiment— I do not mean the prison experiment, but the industrial experiment. All the engineering firms in that city combined together in an arrangement with the technical college, and they all agreed that on certain terms they should send their apprentices at certain times to this college. The result of it was that when these lads were nineteen or twenty they were earning as much as a man of twenty-six in comparable industries elsewhere. Suppose a firm had not acceded with the others to this scheme and stood out independently; I can see that the other firms in Wakefield might very well adopt what would be a restrictive practice with regard to that rebellious firm, and in that case I think it is quite, possible that the case would come before the Court on that very subject.
I should like to say in general that I feel that this clause of exceptions is too rigid as it stands, and. I agree entirely with what my noble friend Lord Rochdale and the noble Lord, Lord Amwell, said about it. No Government can be omniscient, and there must be an infinite variety of eases which ought to be considered as exceptions. That is one reason why I supported the Amendment of my noble friend Lord Baillieu a few moments ago, and that is why I very seriously hope this Amendment will be accepted by Her Majesty's Government.
THE EARL OF WOOLTON: It seems to me that my noble friend Lord Gridley has put forward a dangerous situation here. All those who are engaged in industry—I am thinking of my past rather than my present—are anxious to get the highest quality of staff that is Possible. That is indeed true—and I speak as Chancellor of one of the universities. I find that, instead of people coining, as the noble Lord used to, and engaging young people at

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30s. a week when they have taken their examinations, they are now coming to them in their second year, long before they have taken their examinations, and offering them highly paid positions when they have completed their university training. It is all to the good. It shows that industry is endeavouring to recruit more and more skilled labour from which, in the end, we shall get more efficient management.
But what is the purpose of efficient management? It is, surely, that in the end we shall increase productivity and reduce the cost of productivity, and I wonder whether the Amendment of the noble Lord might not have a serious and persistent adverse effect on the carrying out of technical education, research and development. I cannot believe that it is necessary that there should be such relief as that for which he has asked. I believe that the noble Lord, Lord Lucas of Chilworth, was right and that on the whole these remarks should be addressed to inspectors of taxes. That is the proper place at which to secure that such relief is given. I should very much regret to find myself not in the same Lobby as the noble Lord, Lord Gridley. That would be something quite extraordinary.
9.37 p.m.
LORD MANCROFT: I must confess that I was a little puzzled and unhappy when I saw this Amendment on the Order Paper—puzzled because I could not understand what the noble Lord, Lord Gridley, was driving at, and unhappy because if ever I found myself, during the many years over which I have had the pleasure of knowing him, at a difference with the noble Lord, he has invariably been right and I wrong. But I am happy to have been supported tonight by such a powerful, if unusual, coalition as that of the noble Lord, Lord Lucas of Chilworth, and my noble friend Lord Woolton, whose appearance in this debate is so welcome to all of us. I really think this is a matter for the tax authorities rather than for a Restrictive Practices Court.
May we look for a moment at what the Amendment tries to do? It adds a new ground of pleading to those from paragraphs (a) to (g) with which we are now familiar. Paragraph (b) of the subsection already makes adequate
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provision for agreements based on research and development. This paragraph is intended to cover cases where the restriction confers a clear benefit which otherwise would not be available to them or to the consumers of the goods in question. Thus it might possibly be argued that common research activities were facilitated by restriction of competition in prices or output, since the manufacturers concerned would, in those circumstances, be more ready to pool their contributions to technical advance.
I find it very difficult to see how technical education can be affected by restrictive arrangements about the supply of goods. I really cannot accept as a ground of pleading the suggestion that without the profits or financial stability accruing from agreements firms could not afford to finance technical education in their industry. I need not say how strongly I support the view put forward by the noble Lord, Lord Gridley and my noble friend Lord Woolton, on the grounds of further advanced technical education. I need not remind my noble friend that Her Majesty's Government have recently launched a programme of expansion of technical education on a national scale. With all that, and with all that has been said by other noble Lords on this subject, I wholeheartedly agree; but, unless I am even stupider than usual, I cannot see how the noble Lord's Amendment could further the admirable cause which he and all of us have at heart.
LORD GRIDLEY: Perhaps I did not make my position quite as clear as I might have done. I am a little nervous over the fact that no one can know exactly how this Court will operate, or to what kind of criticism our arrangements may be subjected. I want, if possible, to secure some words which will enable us, with complete justification and Parliamentary sanction, to say that in charges that we have to make to our customers it is right and proper to include in the costs expenditure which in the national interests, it is necessary we should lay out on research, technical education and development. If, however, the Government view is that this Amendment is not necessary, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD McCORQUODALE OF NEWTON LORD McCORQUODALE OF NEWTON moved, in subsection (1) at the end of paragraph (g) to insert:
"or
(h) that the restriction for any other reason operates and is calculated to operate substantially to the benefit of the public,".
The noble Lord said: On Second Reading I ventured to offer a few observations upon the scope of this clause, and I made the suggestion that I thought it had been too narrowly drawn. We have set up a most elaborate and expensive Court, and we are taking the time, and drawing on the experience, of several of Her. Majesty's Judges. Yet it seems to me that we shall not be making full use of this most admirable and expensive Court, owing to the very narrow limits within which it is to be allowed discretion.
I ventured to suggest on Second Reading that a situation might arise when the Court had before it a restriction which it well knew was in the public interest hut which it would still have to condemn as not being in the public interest because it did not happen to fall exactly within one of these paragraphs (a) to (g). If that should be the case it seemed to me to be foolish and not in the best interests either of trade or of the operation of this Court, which we should all wish to see operating most successfully. Therefore, I have tried to find some words which would give the Court more discretion to use its judgment as to what was in the interests of, and "to the benefit of," the public.
I realise that the words which I am suggesting are wide. The Government spokesman may say—possibly with some justification—that they are too wide. In that case, I would ask for the assistance of the Government in drawing up something which would enable the Court to use its own discretion more freely. Otherwise, I am quite convinced that within a very short time Parliament will be asked to amend the law to give the Court some further discretion, or to put new and appropriate provisions in the Bill. It seems to me that that would be a very elaborate and disagreeable way of achieving this end. It might mean opening up the whole Bill again—which I do not think any of us would want—simply to ensure that the best use is made of this Court. For those reasons, I move the Amendment. In moving it, I say to the
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Government that if they can think of any better way of giving the Court that discretion which it should have, without undue laxity, without letting in abuses, I hope they will lose no time in doing so. I beg to move.
Amendment moved—
Page 19, line 14, at end insert the said words, —(Lord McCorquodale of Newton.)
LORD MANCROFT: This Amendment adds yet another new ground of pleading to those set out in paragraphs (a) to (g) of this subsection. The effect of my noble friend's Amendment would be that any argument could be put forward to the Court in favour of a restrictive arrangement. I sympathise with what the noble Lord wants to do. I agree that it would be undesirable to have to come back to Parliament at odd intervals to increase the scope of the Bill, but I think that that is most unlikely; in fact, I believe the Bill provides specifically against it. I am afraid that I shall have to tell the noble Lord that I cannot accept his Amendment, as I rather think he suspects himself, chiefly because it is far too wide, and specifically on these two grounds.
In the first place, the tests set out in paragraphs (a) to (g) are those which, in the Government's view, cover adequately the circumstances which can be argued in favour of a restrictive arrangement. They mean that it must he shown that the restriction confers a clear and specific benefit or prevents a specific harm. That is where the noble Lord and I part company, because the Government's intention is to keep this as specific as possible, while the noble Lord wants to go a good deal farther afield. Secondly, the addition of the words proposed in the Amendment would mean that the whole issue set out in subsection (1) would become simply one of whether or not a restrictive agreement was in the public interest. I submit to the noble Lord that the tests set out in paragraphs (a) to (g) would then become merely illustrative and not definitive. Frankly, it is not the policy of the Government to place the issue at large before the Court in this way. We think it is unfair to those concerned that they should not know what is in the Government's mind and what will be in the Court's mind. I am afraid that the noble Lord's Amendment would put both issues far too widely and spread far too much doubt.
LORD BARNBY: The language which the noble Lord, Lord Mancroft, employed seemed to show that he was not inclined to give any consideration to this Amendment, but I would urge him to try before Report stage to find something, if not the moderate words of my noble friend Lord McCorquodale of Newton, which would make possible an additional paragraph which would get over the difficulty. It may well be that something actively to the advantage of the public may not fall within any of the preceding paragraphs. My noble friend suggested that the Court should be allowed to use its own discretion and it is that sentence I should like the noble Lord, Lord Mancroft, to support.
LORD BAILLIEU: May I follow my noble friend Lord Barnby with a similar plea? My noble friend Lord McCorquodale of Newton made his submission in words of studied moderation and restraint. I think that there are certain broad questions here which my noble friend Lord Mancroft might have been invited to bear in mind. I should like to remind your Lordships of a phrase used earlier in the debate by the noble Lord, Lord Grantchester, when he referred to the need of preserving flexibility in the economy. I think that for anyone to assume that within the framework of seven short paragraphs it is possible to confine all the circumstances on which the Court is to operate fairly and equitably to industry is unrealistic. If industry is to be treated equitably, some additional paragraph of this flexible character is desirable.
In paragraphs (a) to (g) are set out the circumstances about which the Court has to be satisfied, and then, in the words of the noble and learned Viscount the Lord Chancellor, comes the "tailpiece". We have to go further and satisfy the Court that it is not unreasonable, having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement. If it is permissible to bring in considerations affecting what is any detriment to the public, why, I would ask my noble friend Lord Mancroft, should it not be permissible, even desirable, to bring in considerations affecting the benefit of the public? That would seem to me to be not only a matter of equity but desirable as a working provision in itself. Therefore, I hope that
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the Government will give further consideration to their attitude on this matter.
LORD GRANTCHESTER: As the noble Lord tried to use what I said on another clause in favour of this Amendment, I should like to say that, in my view, this does not import flexibility into the economy, but imports uncertainty into the Bill.
LORD LUCAS OF CHILWORTH: Would the noble Lord mind telling us who is to decide what is "calculated to operate substantially to the benefit of the public"? Will it be the Court or the Registrar? The Court starts off on the basis that all these agreements operate against the public interest unless they satisfy those conditions set out. By what standard does the noble Lord contemplate that the Court can decide that an agreement is "calculated to operate substantially to the benefit of the public"? I think it is putting an impossible task upon the Court. I do not know whether the noble Lord can tell me that.
LORD McCORQUODALE OF NEWTON: With regard to the comments made by the noble Lord, Lord Lucas of Chilworth, I would say that if he would look at the last sentence at the bottom of page 19, he will see that the Bill demands that the Court shall satisfy itself
"that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public …
If the Court can decide whether something is to the detriment of the public, is it too much to assume that the Court can decide whether it is to the benefit of the public?
LORD LUCAS OF CHILWORTH: I should not think so.
LORD McCORQUODALE OF NEWTON: Exactly. Therefore, if the Court is quite capable of deciding whether an agreement is to the detriment, it is also capable of deciding whether it is to the benefit. But I would say this to the Government, in all seriousness. I believe in and support this Bill, and I supported it wholeheartedly on Second Reading. But I regard this clause, and its inflexibility, as the one weak element. I have been engaged in business all my life, and I know little or nothing about the law—and what I do know I rather distrust. It seems to me, as a businessman, that this is a lawyers' clause; and lawyers

961
naturally like clarity and inflexibility. But you cannot have that in business. Anyone engaged in business of any sort knows that the problems of to-morrow are not the problems of to-day. We have to meet new problems as they come, unexpected problems that possibly we had -never anticipated. I am sure that in a very few years, whatever Government may be in power will have to come back to Parliament to ask for some extension of the clause. However, I do not wish to press this matter now. I merely wanted to place on record my view on the subject. If the Government would consider it again, I should be grateful, but in the meantime, I beg leave to withdraw the Amendment.
LORD MANCROFT: Before the noble Lord withdraws the Amendment, perhaps I can help him in sonic way. He says that he has been in business all his working life, and knows nothing about the law. I have been in the law all my working life, and I know nothing about the law either. But I would assure him that he would require a whole retinue of lawyers to sort out the complications resulting from this Amendment if it were put into the Bill and that would considerably displease the noble Lord, Lord Lucas of Chilworth, whose chief object in this Bill, so far as I can see, is to produce a high rate of unemployment amongst my unfortunate fellow barristers. The difficulty I feel about the matter is this. I realise that my noble friends Lord McCorquodale of Newton. Lord Baillieu and Lord Barnby are all worried about something, 'but I do not 'think they quite know what they are worried about. If I could "skip" to the specific from what it is they are worrying about, I would do my best to help them. The noble Lord, Lord McCorquodale of Newton, suggests that he will withdraw his Amendment. I will certainly look again at what he has said, and we will have consultations. If we can find a specific way of helping him, we will. But I must tell him that the suggestions with which he has backed his Amendment are much too wide, and would lead to quite different things from those he has in mind.
LORD McCORQUODALE OF NEWTON: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
56 p.m.
LORD GRANTCHESTER: The last condition of Clause 21 is an extra condition: it imports an additional condition, and it is a most complicated sentence. I should think it virtually impossible for any Court to do what is required—that is, to determine whether it is reasonable, having regard to the balance between the circumstances that are put forward and any detriment to the public. I am not happy about the Amendment that I suggest, but it is art attempt at some simplification, and I beg to move it simply on that ground.
Amendment moved—
Page 19, line 43, leave out from beginning to first ("to") in line 44 and insert ("not unreasonably detrimental").—(Lord Grantchester)
LORD MANCROFT: I was glad to hear the noble Lord say that he was not quite happy about his Amendment, because that means that he and I are in agreement for the first time this evening. I agree that this is not an easy thing to understand. Let us see what the noble Lord is trying to do. The effect of his Amendment to the tailpiece of subsection (1) would be that the parties to an agreement would have to show that the restriction contained in it was not operated in a manner which was detrimental to the public interest, taking into account the benefits which it has been shown to provide under one or other of paragraphs (a) to (g) of the subsection. In other words, what the noble Lord is saying is this. The parties will have to show that they are not taking a hammer to crack a nut. This would be a considerably less stiff test than that provided in the tailpiece of subsection (1) as it stands. Under this, the parties must show that the benefits which they have proved under paragraphs (a) to (g) are not outweighed by detriment to the public at large. If it were merely a matter of assessing whether the manner in which the restriction is operated is unreasonable, it would be likely that it could be shown in most cases that the methods employed were in fact necessary to ensure that the benefits were really enjoyed. I accept the noble Lord's light strictures, It is not quite apparent at first guise in all its full crystal clarity, but I do not think the noble Lord has done much to alter it.
LORD GRANTCHESTER: I do not think the noble Lord has quite understood my point. My Amendment would make that sentence read:
"… and is further satisfied (in any such case) that the restriction is not unreasonably detrimental to the public or to persons …"
It is certainly a simplification. It may be a little more easy to prove than the wording of the subsection as it stands. I am not sure that it is not impossible to ask the Court to weigh up the balance that the Bill requires.
LORD SALTOUN: Surely, in one way the Lord's Amendment is less satisfactory than the present words. "Unreasonable" here is connected with certain facts that have to be considered. It is not just a general epithet at large.
LORD MANCROFT: In the silence of the night I will read the noble Lord's remarks again to make sure I have not misconstrued him in the way he has me. My chief objection is the fact that he considerably reduces the stiffness test, and that is the real reason why I cannot accept his Amendment.
LORD GRANTCHESTER: If the sentence can be improved, I am sure the noble Lord will do it. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 20 shall stand part of the Bill?
10.0 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: On the Question whether Clause 20 shall stand part of the Bill, I had better utter another warning to the Minister about what he is going to reconsider on this clause before Report stage. After all, the part which the noble Lord, Lord Grantchester, was going to amend really summarises what this clause will do. It will leave the Court to decide what is reasonable and what is unreasonable in that which is already established as detrimental to at least a section of the public. That is the most extraordinary state of affairs. It all stems from the Government's policy, as the Lord Chancellor explained to us to-night, that, instead of taking the extreme course of the Monopolies Commission, they have tried to steer a middle way, a new special way; and all the time they are handing to the Court something which it is impossible for the Court to decide and
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which, in the first instance, ought to be a policy settled by Parliament. The situation now is that a question of policy, affecting the lives of the people, is to be settled by a Court instead of by Parliament. I beg the noble Lord to be very careful about how far he goes to make the situation even worse than it is already.
LORD SALTOUN: It seems to me that noble Lords opposite are trying to get the best of two worlds. In the first instance, they object to this Bill because they would have liked to see the Majority Report of the Monopolies Commission put in hand. Then they oppose any Amendment that is moved from this side in the hopes of making industry accept this Bill to make it work better. While my opinion has no authority, I rather differ from the Lord Chancellor on this. I regard twenty-one to twenty-four months hence with great apprehension. If anything does go wrong, the Party of noble Lords opposite will be able to say that they opposed this Bill all the time, and they will be able to prevent its being amended as may be necessary at the time. That is not quite fair.
LORD McCORQUODALE OF NEWTON: Perhaps I may add one word. We have attached the utmost importance to the general concept, in determining whether or not a restriction operates for or against the public; whether, on balance, the agreement is beneficial to the public or otherwise. We feel that the clause as drawn gives a reasonable chance for that to be determined. If your Lordships accept the Amendment of the noble Lord, Lord Grantchester, you will wipe out from the clause any possibility of determining what is the balance of consideration. We should certainly regret that action.
LORD MANCROFT: Perhaps I can say a word or two that will put some body's mind at rest—not that of the noble Viscount, Lord Alexander of Hillsborough, because I am certain that dark suspicion will lurk in his mind, however much I try to put it at rest. This is what we are trying to do. Having satisfied one or other of the tests in paragraphs (a) to (g), the parties must prove that the detriment to the public does not outweigh the benefits which have thus

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been established. Apart from the question of detriment to purchasers, consumers or users, or to actual or potential competitors, there is no guidance as to what matters should be taken into account in assessing the effect of the restrictions on public interest. In fact, in assessing whether the restriction is or is not unreasonable, broad considerations will be relevant—for example, whether the effect of the restriction on the efficiency of industry and trade or on new enterprise is a bad one. That is why the issue is to be judged by a mixed Court. The judgment as to whether a restriction is unreasonable is largely an economic one, and the knowledge and experience of the lay members will assist the Court in arriving at a sensible conclusion in the light of the evidence put before it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Is it intended to see that the consumer is represented on the Court?
LORD MANCROFT: I should think that every member of the Court will be a consumer in his own right.
VISCOUNT ALEXANDER OF HILLSBOROUGH: That is not a fair answer.
Clause 20, as amended, agreed to.
Clause 21 agreed to.
Clause 22 [Rules of procedure and representation of Registrar]:
10.6 p.m.
LORD MANCROFT LORD MANCROFT moved, in subsection (2), after paragraph (b) to insert:
"(c) for regulating the evidence which may be required or admitted in any proceedings fore the Court;"
The noble Lord said: The effect of this Amendment is to enable my noble and learned friend the Lord Chancellor to make rules regulating the evidence which may be required or admitted in any proceedings before the Court. The intention of the Amendment is to facilitate the proceedings of the Court and the conduct of cases by the parties to the agreement and the Registrar. Under the normal rules of evidence, neither the parties to an agreement nor the Registrar could put certain data before the Court unless they could testify to them from their own knowledge or produce somebody who could do so. For example, in these circumstances, statistics about international trade could not be quoted before the Court unless
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the compilers of these statistics were summoned to give evidence about them. Such statistics may be relevant to a number of cases before the Court and it would clearly be very inconvenient and costly if the normal rules of evidence were here applied. Indeed, in some cases, it might be impossible to obtain the necessary supporting evidence, and the work of the Court would therefore be hampered. This Amendment will allow my noble and learned friend to make rules which would permit these kinds of data to be quoted in the proceedings before the Court. I am sure the Committee will agree that this is a helpful Amendment. I beg to move.
Amendment moved—
Page 20, line 44, at end insert the said new paragraph.—(Lord Mancroft.)
LORD JESSEL LORD JESSEL moved, as an Amendment to the Amendment, to add to the proposed paragraph (c):
"and in particular for enabling the Registrar to produce before the Court such witnesses or other evidence as may be available to show that any restriction upon which a declaration of the Court is sought under section nineteen is in fact contrary to the public interest;"
The noble Lord said: I had hoped that the Lord Chancellor, in whose name the main Amendment stands, would state that the rules which he is about to make under this clause would require the Registrar to produce before the Court any evidence that the restriction in question does, in fact, offend against the public interest. As I see it, the Lord Chancellor's Amendment does not require the Registrar to produce such evidence. I feel that the parties before the Court should be in a position to say, "You have not produced the evidence and the case is not proved against us." That would be the position in an ordinary court of law. We have heard previously a great deal about the status of the Court: that it is equal to the High Court; that barristers will have to appear before it. Yet for some reason the normal rules of evidence are not to be enforced. I hope the Lord Chancellor will reconsider this matter because I think it is unsatisfactory. I beg to move.
Amendment to Amendment moved—
Line 2 of the Amendment, at end insert the said words.—(Lord Jessel.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: I have much more sympathy with the noble Lord, Lord Jessel, on this Amendment than on one or two of the others he has moved to-night. I must say that these powers of the Lord Chancellor to make rules so sweeping as to be able to control what evidence is given before the Court seem to me rather extraordinary. In general, I have not been at all in favour of this procedure in the Bill. I wanted the procedure of the Monopolies Commission. If the Court is going to be asked to decide on all these matters—a task which is really a matter of Parliamentary policy—then it ought not to be so restricted in rules of evidence as not to be able to have real evidence from both sides. I learned with some distress this evening that, so far as one can see, under the Bill, people who make a complaint about an agreement and may not get that agreement registered, cannot go to Court, and have a case stated for a registration to be made. They can complain to the President of the Board of Trade; they can approach the Registrar. But if they are turned down they have no legal remedy anywhere, although this Bill professes to do away with some of the evils of restrictive trade practices.
Here we have just the bald Amendment put in, the Amendment moved by the noble Lord, Lord Mancroft,
"for regulating the evidence which may be required or admitted in any proceedings before the court."
What sort of regulations? Are regulations to be made for every case before the Court, or are these regulations to be general? Are they regulations that will fit every kind of case? It is very curious wording. I do not understand what is really intended, and I should like to know. Certainly if it is going to be maintained in these words I think there is a great deal to be said for the further Amendment of the noble Lord, Lord Jessel, that if somebody is objecting to the registration of an agreement because it is detrimental to the public in the eyes of the Registrar and others there ought to be proper evidence from the side which laid the original charge in order that it may be properly heard. I should imagine that the same kind of thing would be desired by those who have been turned down by the Registrar in relation to a
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harmful agreement that ought clearly to be registered but which he has rejected.
LORD MANCROFT: There is some misunderstanding. My noble friend Lord Jessel has tied an enormous tin can onto the tail of my poor little Amendment. My Amendment No. 43 is quite trivial, to help procedure and rules of evidence. It goes to no fundamental principles at all. There is nothing there, I can assure the noble Viscount opposite, to which he can take exception. But to the Amendment to the Amendment, I, with respect to the noble Lord, Lord Jessel, shall have to take exception. My Amendment No. 43 is simply designed to facilitate the proceedings before the court. Lord Jessel's Amendment to the Amendment is not, as it implies, merely an extension of my Amendment: it would make a radical change in the principles underlying the Bill. The effect of Lord Jessel's Amendment to the Amendment is that the obligation would be placed on the Registrar to produce witnesses or other evidence to show that restrictions are contrary to the public interest. Thus it would contradict the proposals in Clause 20 that it is for the parties to discharge the onus of proof. Now we are back on an old battlefield.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Which parties? Who are the parties in the Court, apart from those who have had their collective agreement registered? Is it only the Registrar?
LORD MANCROFT: I am talking about onus of proof. This is quite a different matter from the purely procedural points of the previous Amendment, which do not go to the root of the Bill, the fundamental point the noble Lord was arguing with my noble and learned friend. I must ask the noble Lord, Lord Jessel, to withdraw this Amendment. It is quite a fundamental one on which I can give him no hope at all.
LORD SALTOUN: May I ask a question about the procedure? Will the parties be able to compel the attendance of witnesses or will that not be possible?
LORD MANCROFT: The normal rules of procedure will prevail in the Court exactly as in a division of the High Court. The rules of subpoena will be there.
LORD SALTOUN: In many cases I cannot tell witnesses; I can only ask them to come. This is a very important matter: will the parties be able to compel witnesses?
LORD MANCROFT: I will check this point. I do not want to give your Lordships bad law, but as far as I understood it, the normal rules of procedure regarding evidence will prevail as in a division of the High Court.
LORD SALTOUN: That is what I want to know. I do not know what they are. I am a Scotsman.
VISCOUNT ALEXANDER OF HILLSBOROUGH: If the rules in High Court procedure are generally to apply, what is the meaning of this special Amendment? This becomes statutory, whatever set of rules is made by the Lord Chancellor. There is no amendment of that afterwards. The noble Lord has not yet answered the question whether different rules of evidence are to be issued for different cases.
LORD MANCROFT: Under the normal rules of evidence neither the parties to the agreement nor the Registrar can bring certain data before the Court unless they can testify to them from their own knowledge or can produce somebody who can do so. That is the current practice. That being so, in this case statistics would not be able to be quoted in Court about international trade. Those might be very important. That could not be done unless the compilers of the statistics were summoned to give evidence about them. That would be the present rule without the Amendment and would be very expensive and inconvenient. It is not a fundamental point. It is purely procedural, to help the Court and everybody concerned to come to a conclusion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I have myself had to handle any number of these tribunal inquiries over the last twenty-five years, and if it is a question of handling statistics what the noble Lord says might suit me very well, if I were submitting them; but the other side, who were being taken by Government Statute into the realm of High Court procedure, would want something whereby they could effectively handle their reply to my statistics. If special rules are to be made to alter the
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basis after High Court procedure has been adopted, one does not know where we are going.
LORD CONESFORD: I should have thought some comfort was to be derived under this clause from the provisions of subsection (3) which shows that it will not be entirely beyond Parliamentary control. These are not rules which will be made and which Parliament will not see before they come into force. On the contrary, Parliament will see them. I feel quite certain that the intention behind these words is perfectly reasonable and should not cause alarm. I was wondering whether the word "regulating" in the Amendment was precisely what was wanted. I feel certain it is that word which has alarmed some noble Lords, and not the explanation which was given by the Minister. I am sure, from what the Minister has said, that what he wishes to achieve by these words is a perfectly proper purpose; but at first sight the words "for regulating the evidence" are a little alarming. Therefore, though I believe subsection (3) of the original clause makes it fairly certain that no improper use is proposed to be made of this Amendment, perhaps the Minister might look again a little carefully at the wording.
LORD MANCROFT: Speaking as one who loathes being regulated in any shape or form, I will certainly take the advice of my noble friend Lord Conesford. Advice coming from that quarter on wording in the drafting of a Bill is always very useful. The noble Lord is quite right about these rules. They are designed purely to facilitate the work of the parties before the courts and to make their life easier. There is nothing dark or villainous about their purpose. As the noble Lord, Lord Conesford, points out they will come before Parliament. But I will certainly look carefully again at that clause to see that nothing has crept in which might worry the noble Lord in any way at all; and I will look, too, at the word "regulate" to see whether we can find something a little more chastening in its place.
LORD JESSEL: I am grateful for the support of the noble Viscount the Leader of the Opposition, which was quite unexpected. When the noble Lord, Lord Mancroft, talks about regulations which

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are going to facilitate the work of the Court, I would say that they are regulations which are going to facilitate the work chiefly of the Registrar. If the onus of proof is on one of the parties to an agreement, surely the evidence produced by the Registrar will be evidence in rebuttal of the contention of one of the parties to the agreement. That is the evidence I am worried about and the evidence which I think should be produced in what I would call a normal way. But I am not going to press this Amendment. Lord Mancroft has said that he will look into it, and on that undertaking I beg leave to withdraw the Amendment.
LORD MANCROFT: Before the Committee gives permission for the Amendment to be withdrawn, may I say that I do not want Lord Jessel to be under any misunderstanding. I will look into the points which the noble Viscount, Lord Alexander, raised and that on drafting and purity of language raised by the noble Lord, Lord Conesford. I do not want Lord Jessel to think I am giving any undertaking which would suggest that I can accept his Amendment in any way at all. I am afraid that I could not possibly do that.
Amendment to the Amendment, by leave, withdrawn.
On Question, Amendment agreed to.
10.22 p.m.
LORD MANCROFT LORD MANCROFT moved, in subsection (1) to add to paragraph (d) "or any other unreasonable conduct on his part". The noble Lord said: As paragraph (d) of subsection (2) of this clause stands at present, it enables the Lord Chancellor to make rules for enabling the Restrictive Practices Court to order the payment by a party of costs
"in respect of proceedings in which he is guilty of unreasonable delay, or in respect of any improper, vexatious, prolix or unnecessary proceedings."
The proceedings of the Court could, however, be held up by a party who did not unreasonably delay what constitutes technically, a "proceeding"—for example, he might deliberately and unreasonably neglect to deal with a request from the Registrar to submit or produce documents. The rules should be enabled to deal with such delaying or improper, vexatious actions or omissions, even
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though they are not technically "proceedings" as such. This Amendment covers the point by empowering the Lord Chancellor to make rules enabling the Court to award costs against a party who is guilty of "any other unreasonable conduct." I beg to move.
Amendment moved—
Page 21, line 12, at end insert, the said words.—(Lord Mancroft.)
On Question, Amendment agreed to.
Clause 22, as amended, agreed to.
Clause 23:
Prohibition of agreements for collective enforcement of conditions as to resale prices
23.—(1) Subject to the provisions of this section, it shall be unlawful for any two or more persons carrying on business in the United Kingdom as suppliers of any goods to make or carry out any agreement or arrangement by which they undertake—
(b) to refuse to supply goods for delivery in the United Kingdom to such dealers except on terms and conditions which are less favourable than those applicable in the case of other dealers carrying on business in similar circumstances;
or any agreement or arrangement authorising the recovery of penalties (however described) by or on behalf of the parties to the agreement from dealers who resell or have resold goods in breach of any such condition as is described in paragraph (a) of this subsection, or the conduct of any domestic proceedings in connection therewith.
(2) Subject to the provisions of this section, it shall be unlawful for any two or more persons carrying on business in the United Kingdom as dealers in any goods to make or carry out any agreement or arrangement by which they undertake—

(a) to withhold orders for supplies of goods for delivery in the United Kingdom from suppliers (whether party to the agreement or arrangement or not) who supply or have supplied goods otherwise than subject to such a condition as aforesaid or who refrain or have refrained from taking steps to ensure compliance with such conditions in respect of goods supplied by them; or

(b) to discriminate in their handling of goods against goods supplied by such suppliers or any agreement or arrangement authorising the recovery of penalties (however described) by or on behalf of the parties to the agreement or arrangement from such suppliers, or the conduct of any domestic proceedings in connection therewith.

(3) The foregoing provisions of this section shall not apply to an agreement or arrangement to which the only parties are two or more inter-connected bodies corporate, or two or more individuals carrying on business in partnership with each other.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved, in subsection (1) (b), after "favourable" to insert "to such dealers or their customers". The noble Viscount said: The clause upon which we are now opening a discussion is intended, of course, to prohibit collective resale price maintenance and makes it unlawful for any two or more persons carrying on business as dealers in, or suppliers of, any goods to enforce certain arrangements in connection with the supply of those goods. Societies of which I have ahead spoken to your Lordships, which are registered under the Industrial and Provident Societies Act, are faced with a great deal of difficulty in this matter, especially on account of such organisations as Electric and Musical Industries, Limited, or the Proprietary Articles Traders' Association, of which the noble Lord, Lord Dovercourt, knows, and similar bodies of that kind. Two different practices are followed. In some cases they refuse to supply by operating a boycott; in others they insist that the deferred discount or dividend which is issued, say, every six months or twelve months on balance of the distribution of surpluses, shou1d be added beforehand to the cost of the article, above the market price which is charged elsewhere. I move this Amendment in order to draw attention to the disadvantage in which our societies are placed in this regard and to ask the Government's intention in this matter.
May I say that while I speak with considerable emphasis in respect of industrial and co-operative societies, which are very large bodies, in all these matters I am equally concerned about protecting any other bodies who may operate on the same basis in the distribution of their surpluses. In just the same way I should like justice to be brought to them. It is not by any means uncommon today to find in trade those who copy, and copy very well, some of the aspects of co-operative practice. We find Brooke Bond's Dividend Tea advertised all over the country, for example. They give a direct rebate and a deferred rebate, so far as I know, and there are numerous other organisations who distribute surpluses to their members or to their customers in ways that have previously not been to the liking of the people who have these restrictive agreements. I am anxious for
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these words to be put in, and I should like some statement from the Government on the matter.
Amendment moved—
Page 21, line 35, after ("favourable") insert ("to such dealers or their customers")—(Viscount Alexander of Hillsborough.)
LORD MANCROFT: Clause 23 makes it unlawful for suppliers to agree or arrange to supply or offer to supply their goods to price-cutting dealers on terms less favourable than the terms on which they supply or offer to supply non-price-cutting dealers carrying on business in similar circumstances. The Amendment which the noble Viscount has moved introduces the concept of terms which are less favourable to the customers of tae dealers. What the noble Viscount has primarily in mind is the co-operative dividend, about which he has spoken with such warmth and feeling. I have sortie difficulty in crossing swords with him on this matter, because he has spent a lifetime in a movement which I know only as a customer, though, I may add, as a satisfied customer. It is contended that those manufacturers who either object to the payment of dividend in respect of their goods or who insist, if the dividend is paid, that the price be correspondingly increased, are treating the customers of co-operative societies unfavourably. I think that the Amendment is designed to prevent manufacturers from agreeing among themselves to make such stipulations.
I cannot help feeling, that the Amendment confuses the resale price conditions with methods of enforcement. Clause 23 of the Bill is not concerned with what resale price conditions should be enforced. It does not affect the present position, which is that, just as a manufacturer can object to an immediate reduction in price, an the ground that it is an infringement of resale price conditions, so he can object to payment of a deferred discount or dividend. Even if it were agreed that the co-operative dividend should be made the subject of some special provision, the Amendment would not achieve this. It would not oblige manufacturers to look at the cooperative dividend in a specially favourable light. All it would do would be to prevent manufacturers from agreeing to treat different systems of discounts or dividends in different ways. For example, at the present time private traders (but

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not co-operative societies) are prevented from paying deferred dividends on tobacco goods. The effect of the Amendment would be to oblige the tobacco manufacturers either to allow private traders to pay dividends on their goods or to stop the co-operative societies from doing so.
The Government recognise, of course, that agreements to regard payment of dividends as an infringement of resale price conditions particularly concern co-operative societies and the basis of their method of trading, but such agreements have nothing to do with enforcement with which Part II is concerned. Part II is directed against the sort of agreement which manufacturers might make aimed at co-operative societies who ignore a condition as to dividend or offsetting the price. To meet that sort of contingency, the manufacturers might well agree among themselves not to supply the societies at all (which would be unlawful under paragraph (a) of subsection 1 of Clause 23) or to supply them only at a smaller wholesale discount than is allowed to other dealers (which would be unlawful under paragraph (b) of subsection 1 of Clause 23).
It is not the Government's intention to make it unlawful for manufacturers to agree among themselves that each of them would individually impose a condition that co-operative societies shall not allow a dividend on the manufacturer's pricemaintained goods or shall offset the amount of dividend, if they grant it, by an appropriate increase in price. It is the Government's intention that this should be a registrable agreement and that the parties to such agreements should be required to justify them before the Restrictive Practices Court. That is how the Government face this situation. I know that I shall never carry the noble Viscount, Lord Alexander of Hillsborough, with me, but I hope that I have at least made the intentions of the Government clear to him.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am obliged for the last part of the noble Lord's speech, because I find it so much ahead of the statement by the President of the Board of Trade in answering the debate in another place. What he then said was that the Government were going to make no alteration at all in the law as it now exists. Now
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the noble Lord kindly tells me that it is intended that in the case of industrial employment societies, or any similar body which deals with its surplus in the manner that we do—it may be co-partnership, or all kinds of things—if they are not given the same treatment as everybody else by suppliers then the agreement not to give those terms will be registrable and will have to be justified before the Court. That is a great step forward. We have not had that clearly stated before. I would ask the noble Lord, Lord Mancroft, to look at the speeches by the President of the Board of Trade on this matter in another place, and I think he will agree with me as to that.
As regards the position on which this particular Amendment has been put down, I am quite willing to accept the view of the noble Lord, although in trying to get my Amendment into the right place as between the numbering of the clauses, as the Bill emerged from the other place, and the discussion on Report in another place, I was helped by members of the staff here to select the right place. Nevertheless, in view of what the noble Lord says, I will withdraw the Amendment, although I may have to raise the matter again on Report or in another part of the Bill later on.
Amendment, by leave, withdrawn.
LORD JESSEL LORD JESSEL moved to add to subsection (2):
"Provided that if it appears to two or more dealers that a supplier who imposes conditions as to price is not enforcing such conditions equitably as between all dealers in his goods such dealers may notwithstanding the provisions of paragraph (a) of this subsection agree to withhold orders for supplies of goods from such supplier and shall register such agreement with the Registrar who shall refer the matter to the Court for consideration under section nineteen of this Act:
Provided also that the said agreement shall not be implemented unless and until the Court shall have declared that the said agreement is not contrary to the public interest."
The noble Lord said: The object of this Amendment is to protect dealers against unfair enforcement of price maintenance conditions by a supplier. If the Government take the view that individual enforcement of price maintenance should be allowed, then it should operate fairly to all parties concerned.
As the clause now stands, I suggest suppliers can favour some dealers at the expense of others. The favoured dealers

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may be owned, or part-owned, by the supplier, who can, if he so wishes, refrain from enforcing his price maintenance conditions against a particular dealer, while vigorously pursuing them against all the others. He may have his own special reasons for doing this. My contention is that if a supplier enters into a price maintenance condition, he should be required to enforce it all round.
Now it is not only manufacturers who are affected by price-cutting, it is usually the dealers who are the first to suffer. This Amendment does not seek to allow any extra illegal sanctions, such as stop lists or private courts. All it tries to do is to give dealers a right to enter into a collective agreement to protect themselves from unfair treatment of the kind I have just mentioned, provided the Court gives its approval. This, I admit, will give a further range of work for the Court, but I am encouraged by the remarks of noble Lord, Lord Mancroft, on the last Amendment that this may be possible. I feel that price maintenance, under the Bill as it now stands, is certainly permissible in theory, but the methods of enforcement allowed will prove quite ineffective and the rights of retailers, especially of the smaller firms, virtually destroyed. It is chiefly on their behalf that I put down this Amendment. I beg to move.
Amendment moved—
Page 22, line 21, at end insert the said provisos.—(Lord Jessel.)
LORD LUCAS OF CHILWORTH: While I think the noble Lord will agree with me that this Amendment has to appear under Clause 23, it really affects Clause 24. Collective price maintenance is dealt with in Clause 23, and individual price maintenance alluded to in Clause 24. The noble Lord, Lord Jessel, wants a variation of collective price maintenance on behalf of dealers instead of suppliers, to curb, if I can put it this way, the actions of the recalcitrant supplier under Clause 24. That is how we get this slight confusion, but it is clear in my mind. This is, if I may use the expression, a watered-down version of the non-signer agreement, which is prevalent in America. In other words, as the noble Lord, Lord Jessel, has said, collective price maintenance is outlawed by Clause 23; then you give an individual manufacturer or supplier the right to protect or maintain and enforce, through the Courts, through an
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agreement, the maintenance of the prices he puts in that agreement. But, as the noble Lord said, he might not operate that fairly, and also there is nothing to prevent action from being taken in one case and not in another.
If such action is so taken the noble Lord, Lord Jessel, wants collective enforcement of price maintenance by the affected dealers—in other words, he wants the dealers who are so affected by the unfair operation of the producer to be able to combine together and collectively hold supplies. If I thought that was feasible I would support the noble Lord, but frankly I do not think it is. Unless some munificent or beneficent organisation is coming along to provide vast sums of money for one dealer to sue another dealer or for two or three dealers to take concerted action against a manufacturer, I cannot see how it can be done. Under Clause 24, which we may not reach tonight, we shall have to try to find a better method than this of dealing with the matter. I admit it looks very well on paper. It would go only a small way, if it were effective, but I do not think it will be effective. What I am going to do when we get to Clause 24 is to ask the noble Lord, Lord Mancroft, to give serious consideration to this question, because Clause 24 is completely and utterly unworkable. If you try to make it work, you will be dealing a large section of the retail and distributive trade in this country a mortal blow. It cannot be worked equitably; it has not a scrap of equity in it. It has all the viciousness and vice of cut-throat competition of the worst possible kind.
The noble Lord's Amendment really is intended to give to the affected sections, the retail trade, some retaliatory action. If I thought that it would work, I would support it; but I do not think it will work. I would suggest to the noble Lord, Lord Jessel, that we shall have to try to knock more sense into Clause 24, if there is any sense in it now; and if we cannot knock any sense into it, then we shall have to come back to this kind of thing and see whether we can persuade the Government to go further than this with a complete non-signer clause, precisely as is operating in the United States of America in similar circumstances. We shall have to do that. But I am hoping that better counsels will prevail and that the Government will see that the next

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clause is completely inoperative if there is to be any fairness or sense of equity at all.
I am hoping that the noble Lord, Lord Jessel, will withdraw this Amendment—because I do not suppose for one moment that the noble Lord, Lord Mancroft, will accept it—and see whether we cannot get something done with Clause 24. If we cannot, we must come down to the real non-signer agreement, which operates not only as regards dealer and dealer, but, if the supplier is allowed to bind the retail trade of this country to a legal agreement to maintain prices, also, possibly, against the manufacturer. In all equity, we cannot have an agreement which ties the hands of the retailers behind their backs and lets the concern which is tying their hands behind their backs openly compete with them at cut prices. That is the difficulty the noble Lord is trying to get over here. He will fail. I do not want now to argue upon Clause 24, but I shall argue most strongly upon it when the time comes. So perhaps the noble Lord would withdraw this Amendment, and I can assure him of all my support when it comes to arguing the evils of Clause 24.
10.44 p.m.
LORD MANCROFT: Perhaps the noble Lord, Lord Jessel, in due course will withdraw this Amendment—I do not know. If he does withdraw it, I hope he will do so for my reasons and not entirely for the reasons of the noble Lord, Lord Lucas of Chilworth. May I be quite certain that I have followed the noble Lord aright, for I am not quite as familiar as he is with these things? I gather that the non-signer arrangement is an arrangement in America by which, if one dealer accepts the retail price condition, all dealers are bound by it.
LORD LUCAS OF CHILWORTH: May I explain to the noble Lord? In America there are two separate suppliers who have dealers who have signed agreements with both of them. If one offends against that agreement by cutting the price to the detriment of the other, and the first one does not enforce the agreement against the second dealer, the one dealer can sue the other dealer. I do not know whether I have been able to describe it accurately. These people are non-signers. If one dealer has to suffer
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the competition of another dealer and one of the manufacturers will not honour his agreement, one set of people can sue the other set of people. I hope I have explained it sufficiently. If not, I will write it down.
LORD MANCROFT: The noble Lord has certainly explained it to me, but whether I have understood it or not is another matter. Let us get back to the comparative simplicity of the Amendment of the noble Lord, Lord Jessel. As we know, subsection (2) of Clause 23 makes it unlawful for dealers to discriminate against suppliers who do not prescribe or enforce resale price conditions. This Amendment would make it possible for dealers who considered that a manufacturer was not enforcing resale price conditions equitably as between dealers to make an agreement to withhold orders from that manufacturer and register the agreement. The Registrar would be required to refer the agreement to the Restrictive Practices Court, and the agreement could not be put into effect unless and until the Court declared that it was not contrary to the public interest.
What I think the noble Lord is getting at is this. His Amendment evidently reflects the fears which I know are widely held, that manufacturers may be willing to bring legal proceedings against small dealers who re-sell in breach of price conditions, but may be reluctant to do so where large or powerful dealers are concerned. The result of this would be that people fear that unless some pressure can be brought to bear on manufacturers, their enforcement arrangements may be haphazard and indeed inequitable. I know that this has been worrying particularly the noble Lord, Lord Saltoun. We have had correspondence about it and I hope that I have been able to put his mind slightly at rest.
I am afraid that the noble Lord, Lord Jessel, must by now have realised that his Amendment is not acceptable. It reflects fears which, while they may not be altogether without foundation, are very frequently exaggerated. It is quite clear that manufacturers go to considerable lengths to create goodwill for themselves and their goods among dealers. For my own part, I must say I find it difficult to believe that manufacturers will throw all this goodwill away by openly treating small dealers in an in-

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equitable fashion. There are already trades where individual enforcement is extensively practised and where comparatively little use, or no use at all, is made of tight collective arrangements—I think groceries are one and textiles are another. The Government believe that the interests of manufacturers and small dealers are substantially the same in that both are concerned (albeit for somewhat different reasons) to see some reasonable stability in distributors' margins.
That is not to say, of course, that individual manufacturers will lay down such rigid resale price conditions, or interpret them so inflexibly, as have trade associations in the past. Nor is it the Government's intention that they should do so. It may be that some manufacturers, at least, while they will take immediate action against what is called "loss-leading" or similar abuses, will not wish to regard as objectionable deferred dividend schemes or even genuine immediate discount schemes under which dealers pass some of their profit back to the consumer and so reduce prices. This may be thought to be inequitable to dealers who do not wish to make any reduction, but it is difficult to see any grounds for accepting that such reasonable and proper price competition among distributors is contrary to the public interest.
The effect of the Amendment would then be directly contrary to the general intention of Part II of the Bill, which is to introduce more flexibility into the distributive trades. It would enable dealers to bring collective pressure to bear on manufacturers to continue the old rigidities. Moreover, it would appear to have the effect, not only of narrowing the scope of the prohibition of agreements in Part II of the Bill, but of requiring the Registrar to give priority in bringing the class of agreements concerned before the Restrictive Practices Court. So far from agreeing that the Restrictive Practices Court should consider whether these agreements are contrary to the public interest, the Government consider that there is ample ground for prohibiting the enforcement of resale price conditions by means of collective boycott or discrimination whether such methods are employed by manufacturers or by dealers. I hope the
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noble Lord, Lord Jessel, will see fit to withdraw his Amendment.
LORD SALTOUN: One of the pleasures of dealing with the noble Lord, Lord Mancroft, is that one always feels that he applies the whole of his mind to one's case and it will be very well considered. I have had some correspondence with him on this matter, as he says, and there are some facts I should like to bring to his notice. They are very largely as the noble Lord, Lord Lucas of Chilworth, has said. I entirely agree with what he said. After all, rival dealers may represent mainly different suppliers; but even where they both represent the same supplier, if one dealer is selling 100 cars a month, in the car trade for example, and another dealer only one or two, you cannot expect the supplier to enforce the agreement against so good a customer for the benefit of a worse customer. Examples are not wanting of this. I think the Monopolies Commission Report on tyres said that one dominant manufacturer wholly owned the major distribution outlets, and that is a very good case in point. I think that was mentioned this afternoon.
Another point made was that it would be unusual to allow people interest in proceedings relating to agreements to which they were not party. That has been allowed. The noble Lord knows, for instance, the right of a seller to enforce a commercial credit in his favour under the contract. There is the right of a widow to sue for a pension which her husband's employers promised to pay under a contract. There is the right of a guest in a house to sue for compensation for a burglary on the policy taken out by his host, and I think there are a good many others. In fact, I believe the Attorney-General on one occasion not very long ago suggested something of the kind. So I hope this matter will be carefully considered before the next stage, to try to get something to remedy the problem.
LORD JESSEL: I am most grateful to the noble Lord, Lord Lucas of Chilworth, who has put my case far more clearly than I did. He has an idea that something may be done for these small dealers under the next clause. If he can think of something I, for one, will support him. If is obvious from what the noble Lord, Lord Mancroft, said that I have no chance

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at all with my Amendment, and therefore I withdraw it in the hope that on the next clause we may be able to do something.
Amendment, by leave, withdrawn.
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved to leave out subsection (3). The noble Lord said: The noble Lord, Lord Mancroft, will remember that I argued half this case before under Clause 7. It relates to the words:
"shall not apply to an agreement to which the only parties are two or more interconnected bodies corporate—"
and so on. I said I could understand why this provision was in Clause 7, which dealt with manufacturers, but I could not understand why it was wanted in this clause, which deals with collective enforcement of price maintenance. A body corporate can be a substantial concern. Earlier today I pointed out that Unilever and all the concerns which Unilever control, from Wall's sausages and ice cream to detergents, are all bodies corporate. I take it that as they are excluded from the provisions of this clause, which makes collective boycott and price arrangements illegal, they can run a collective price maintenance scheme of their own. Is that what Her Majesty's Government want? Do they want combines of bodies corporate to be able to operate and enforce resale price maintenance by the collective boycott system, in defiance of the intentions of Her Majesty's Government?
I should not have thought this provision was wanted here at all. I can understand why it is in the other clause, which sets out what agreements have to be registered. It would not be a restrictive practice for a huge inter-connected combine of perhaps twenty-five or thirty firms to split up the manufacture of one article in one factory and of another article in another. That is sensible planning and is not at all in restraint of trade. But I cannot understand why this provision is brought in here. They can easily evade the issue by being a body corporate. Why is this provision wanted? There must be some reason which I cannot fathom, for Her Majesty's Government have been so adamant, without any equivocation at all, on this question of the outlawing of the collective boycott. Frankly, I cannot see the sense of this
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provision, and I should like it to be omitted from the Bill because it may undermine what is, in my view, a sound principle, now that Her Majesty's Government have outlawed the collective boycott which has had a very harmful effect on the trade of this country. I beg to move—
Amendment moved—
Page 22, line 22, leave out subsection (3).—(Lord Lucas of Chilworth.)
LORD BENNETT OF EDGBASTON: I cannot understand what is worrying the noble Lord, Lord Lucas of Chilworth. Does he want every company which has its subsidiaries registered under another name to amalgamate and come under one heading. There are great advantages in being separate, but they are really one concern. I cannot see why the noble Lord should be worried. I know of concerns which run under separate names but which are entirely controlled from one quarter; it is convenient to do it and is very advantageous.
LORD LUCAS OF CHILWORTH: That is what I said.
LORD BENNETT OF EDGBASTON: It is convenient in different districts to maintain local production and to give young men the opportunity of managing. But the concern is all one, and I cannot understand the noble Lord's worry at all. They are all one, even if, for technical reasons, they run under separate names. It does not affect the issue at all. If it were thought necessary, they could be brought into one company and run as departments.
LORD LUCAS OF CHILWORTH: I am afraid that I did not make myself clear. With regard to the ordinary process of running a business I absolutely agree with the noble Lord. I have already said that. The matter is dealt with under Clause 7. If the noble Lord will look at Clause 7 he will see that the selfsame provision is there. I agree that it is a very convenient way to do it. But why do you let them escape from the collective boycott arrangements that you have under Clause 23? This has nothing to do with the argument which Lord Bennett of Edgbaston has put up and with which I absolutely agree. But what is the reason you let them escape? I do not know the reason. It defeats your object to a certain extent. You may

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have fifty concerns as a body corporate and they can all run a collective boycott. In other words, if you cut the price of someone's soap and they make sausages as well, the supply of sausages can be cut off. That is a collective boycott. That is the thing you are outlawing under Clause 23.
LORD CONESFORD: I am afraid that I was not here during the early part of the noble Lord's speech. Has he observed the definition of inter-connected bodies corporate for this purpose in Clause 34 of the Bill? I think that may perhaps answer his point and take away his troubles.
LORD MANCROFT: I wish that Lord Lucas of Chilworth would not take such a keen interest in such unpronounceable things. If it is not single abnormal indivisible loads one day, it is interconnected corporate bodies the next. He has asked me to try to explain this to him. I will set about the task. I only hope that I shall be more successful than he was in explaining non-signer arrangements to me.
Subsection (3) of Clause 23 exempts from the prohibition of arrangements for collective enforcement, agreements between inter-connected bodies corporate or between two or more individuals in partnership. The Amendment would bring agreements between inter-connected bodies corporate or between individuals in partnership within the scope of the prohibition. The noble Lord, Lord Lucas of Chilworth, may possibly feel that subsection (3) makes Clause 23 unfair as between small and large firms, in that large trading organisations could take advantage of the exemption to deny individual retailers a very substantial proportion of their supplies. It would not really be sensible, I think, to prohibit the agreements in question when made between inter-connected bodies corporate. Such bodies are in common ownership and are akin to a single firm, although in law they are separate persons. In any case, for purposes of a reference to the Monopolies Commission they are treated as a single firm, and I think it would be wrong to treat them differently for other purposes.
It would, moreover, be misleading to suggest that it would be easy for companies which are at present separate to escape the prohibition by making them-
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selves into inter-connected bodies corporate. This would involve one company in obtaining control of another, either through the appointment of directors or by acquiring more than half of the equity share capital of the other, and would be a drastic step to take for so limited a purpose. So far as partners are concerned, they are separate legal persons but form a single trading unit and fall to be dealt with in the same manner as the individual trader. The use of the word "individuals" in the subsection means that this exemption from partnership cannot be used by companies to evade the ban on collective enforcement. Those are the reasons why we cannot accept the noble Lord's Amendment and I hope that he will see the force of them.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The only important part of the noble Lord's speech was the last sentence: that this ban cannot be imposed upon a corporate body. I must say that I feel the situation much more than the noble Lord thinks I ought to do. Subsection (3) specifically exempts "two or more persons being interconnected bodies corporate" from the general provisions of the first two subsections of the main clause. I think that that is a serious matter. I do not think that the Committee have yet followed what is going to happen. My noble friend Lord Lucas of Chilworth chose to speak about the composition of that great organisation called Unilever, Limited. It is an extraordinary combination of every kind of production, from West African products and margarine to Dutch companies that have to carry the name of Naamloze Vennootschap. I would tell my noble friend that that is an example which I should not choose to make on this clause, because I have no knowledge at the moment of any restrictive practice by Unilever, Limited that is harmful to trade. I do not think that that is a very good illustration of the point.
Let us take those who are connected with the Proprietary Articles Traders' Association—large bodies, some of them incorporated, but with separate sections, in spite of their incorporation, which can easily get out of the first Part of the Bill by proceeding with enforcements separately on individual products through

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subsidiary companies. At any rate, I shall watch the rest of the Bill closely to see whether this would really be the result of the Bill. To make this clear to the noble Lord's mind, and to give the Committee some reward for what they are doing tonight, if the Government want to keep this provision in the Bill, we shall move that it be kept out.
LORD LUCAS OF CHILWORTH: My noble friend has said that I have not given a good illustration. Let me give the Committee a better one. There are about ten manufacturing firms in the motor industry. Five of them are in an inter-connected body corporate, the British Motor Corporation—Morris, Austin, Wolseley, Riley and Morris Commercial. Those five can operate a price maintenance with a collective boycott. If the other five firms combine to do it, they will be outlawed; but because these five are in a body corporate, they can do it. Is that what the noble Lord, Lord Mancroft, wants? If they want to do it, they can run a collective boycott in defiance of this Bill. If a dealer breaches the manufacturer's agreement on any one of these cars, supplies from the other four can be withheld from him. That is a collective boycott. They are an interconnected body corporate, so they are excluded from this price maintenance resale enforcement. The rest who are single entities, cannot combine with the others to enforce the price; but these can. The noble Lord has grasped that, has he?
LORD MANCROFT: Yes, I have grasped it.
LORD LUCAS OF CHILWORTH: All I ask the noble Lord is: Is that fair? Does he want that? That is the only reason why I have put down this Amendment.
LORD BENNETT OF EDGBASTON: The noble Lord has omitted to state the one fact. He says that they are interconnected. They are one company, one capital and one management. They might all be called one and have different models. I cannot see what the difference is, in the noble Lord's mind, between the concern that owns the whole capital and runs the whole business under different
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departments and the concern which decides to keep different names for particular purposes.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I must say, from my examination of a few balance sheets of companies who deal with these matters, that they give separate accounts, as individual companies, for the subsidiaries, and then bring them into what they call a consolidated balance sheet afterwards, I can see no possible reason why the subsidiary companies concerned, if they go in for a boycott, should not be dealt with separately.
LORD BENNETT OF EDGBASTON: The Inland Revenue insist on there being one consolidated balance sheet, and on its being treated as one company.
LORD LUCAS OF CHILWORTH: I do not think the argument of the noble Lord is valid. What we are doing here is something different from company construction. What the Government are trying to do here is to prevent the collective boycott principle of resale price maintenance. I am only pointing out that the Government's purpose can be defeated, because a body corporate can market seven or eight different things through different companies, different brands, different agreements; but because the shares are all owned by one concern which is an inter-connected body corporate, they can avoid this price restriction. You have only to go to another industry, and the five that may be under one financial holding may comprise the whole of one industry. Is that what the Government want? If it is, all right. But do not let them think they are going to have the collective boycott stopped.
VISCOUNT BRIDGEMAN: Would the noble Lord agree that the converse is also true, and that if the group, B.M.C. or whatever it was, liquidated all the subsidiary companies and made it one company, the purpose of the noble Lord would be defeated again?
LORD LUCAS OF CHILWORTH: Yes. I know how they can get over it. Instead of calling the different models different names, they can call them one name and market them from one company.
VISCOUNT BRIDGEMAN: The noble Lord should simplify matters by saying that no company should be allowed to market more than one kind of car.
LORD GRANTCHESTER: Surely, this clause does not affect any outside party. If the companies make an agreement between themselves, they are only making an agreement which, on balance, has no effect at all.
VISCOUNT ALEXANDER OF HILLSBOROUGH: It is to withhold supplies from the company.
LORD GRANTCHESTER: That is not this clause, surely. It is an agreement with which only the parties themselves are concerned.
LORD LUCAS OF CHILWORTH: I am not going to press this Amendment. I merely want to know the view of the Government. I do not want the Government to suffer under the illusion that they have stopped up all the holes of the collective boycott. They have not. I do not know why they wanted to include this in the clause.
LORD MANCROFT: I think it is my turn now. Do not let us quarrel at this time of night. I cannot allow the noble Lord to take out this subsection, because we should have a great muddle, particularly with the Monopolies Commission. The noble Lord stated an extreme, though I think valid, case; but he may be worrying unduly. I should like to look at what he has said and to consult with the experts, because this is a very technical matter. I have nothing like the technical knowledge of this business which the noble Lord has, and I am not pretending—and I hope I was not giving that impression—that this provision is completely foolproof, or that there are not examples which can be thought up to illustrate his case. The noble Lord has done this. But I think the Bill as it stands does achieve what we are setting out to do. The noble Lord's example is an extreme one, which perhaps sounds more important in a speech than it is in actual fact. I will look at the point again, of course, so long as he does not expect me to accept his entire argument.
LORD LUCAS OF CHILWORTH: I wanted merely to illustrate my point, and I shall be interested to hear what the
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noble Lord says. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
11.16 p.m.
LORD JESSEL LORD JESSEL moved, after subsection (3) to insert:
"(4) Subsection (1) of this section shall not apply in relation to any contract for the sale of goods to which not more than two persons are party by virtue only of undertakings by the purchaser in relation to the goods sold and by the vendor in relation to other goods of the same description; and for the purposes of this subsection two or more persons being individuals carrying on business in partnership with each other shall be treated as a single person."
The noble Lord said: This Amendment tries to deal with a difficult point of construction which arises on subsection (1) of this clause. I am told that it is probable that a wholesaler must be deemed to be a "supplier", within the meaning of the subsection. This produces the result that where a manufacturer obtains an undertaking from a wholesaler that he (the wholesaler) will not supply a price-cutter, the wholesaler cannot in return get a reciprocal undertaking that he (the manufacturer) will not himself supply the price-cutter or that he will exact a similar undertaking from other wholesalers. Such a reciprocal undertaking by the manufacturer is almost always implied, even if it is not actually stated, when a manufacturer issues a price list giving prices for sale to the public with discounts et cetera for retailers and wholesalers. I think it would be absurd if it were illegal for the reciprocal undertaking to be stated explicitly. The object of this Amendment is to make it clear that this can be done. I beg to move.
Amendment moved—
Page 22, line 25, at end insert the said subsection.—(Lord Jessel.)
LORD MANCROFT: I could not have done that better myself, and I have great pleasure in accepting the noble Lord's Amendment.
On Question, Amendment agreed to,
LORD LUCAS OF CHILWORTH LORD LUCAS OF CHILWORTH moved, after subsection (6) to insert:
"(7) Upon complaint to the court, and its satisfaction, that a person has through the enforcement of the provisions of this section been persistently charging for any goods sums insufficient to meet the cost of producing or distributing those goods and has thereby placed other producers or distributors of like goods

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at an undue or unfair disadvantage in competing with him as respects the production or distribution of those goods the Crown shall take proceedings for an injunction or other appropriate relief."
The noble Lord said: As I understand that this is the last Amendment we are going to deal with tonight, perhaps the noble Lord will accept it. I saw the noble Earl the Chancellor of the Duchy of Lancaster here a short time ago, and I am sorry that he is not in his place now. It was a statement by him on the Road Traffic Bill which tempted me to put down this Amendment. We were then debating an Amendment on the Road Traffic Bill which sought to set up the twelve licensing authorities as a court of business morals. Clause 42 of the new Bill says that A and B licences can be revoked if it is proved before the licensing authorities that there has been, if I may use a colloquial expression, "cutthroat" competition. The noble Earl, Lord Selkirk, who was in charge of the Bill, laid it down quite definitely that it was not the Government's policy to have this "cut-throat" competition, and that that was one of the reasons why they had made it possible for one haulage contractor to be able to bring another haulage contractor before the licensing authority. If persistent price-cutting of rates was proved, the offending hauliers might have their A and B licences revoked.
Encouraged by that principle in the Road Traffic Bill, I thought I would test the Government to see whether, having by this Bill prevented resale price maintenance by the use of the collective boycott, so that there might be competition, with the benefit of lowering prices to the public, they would accept here the same principle that they failed to accept in the Road Traffic Bill, that of intensive competition which would mean a lowering of those prices to the public. I have followed precisely the wording of Clause 42 of the Road Traffic Bill, and I cannot see how the Government can say that they have one policy in respect of one commodity and another policy in respect of another commodity. I do not doubt that the noble Lord, Lord Man-croft, will be able to argue that but it does not sound to me very logical. Also, I have put in here a principle which I will elaborate later—not tonight, for it
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is too late, but tomorrow because, when you have this kind of thing happening, and in defence the smaller members of the industry have to take action, I want the Crown to take action for them. I think I have said enough to explain precisely the object of the Amendment. I beg to move.
Amendment moved—
Page 22, line 42, at end insert the said subsection.—(Lord Lucas of Chilworth.)
LORD MANCROFT: I wish that I could accept this Amendment and send the noble Lord to bed happy but, alas! I cannot. The Amendment contemplates that, despite the provisions of Clause 24 which strengthen powers for individual enforcement, cases may arise in which manufacturers or distributors persistently sell at prices below the cost of production or distribution. Where the Court—I presume the noble Lord means the county court here.
LORD LUCAS OF CHILWORTH: No; the Restrictive Practices Court.
LORD MANCROFT: The Restrictive Practices Court. Where the Court is satisfied, on complaint, that this is the case, the Crown is required to seek the relief of an injunction or other appropriate remedy. I suppose what the Amendment is really concerned with is persistent "loss-leading". At this late hour, I need not describe in detail "loss-leading".
LORD LUCAS OF CHILWORTH: No.
LORD MANCROFT: Whether it is that or not, I am afraid the Amendment is not a very attractive one, because the Government consider that the provisions of Clause 24 will be sufficient to enable individual manufacturers to take action against distributors who misuse their brands by using them as "loss-leaders" or any other similar offence. It is clear that manufacturers will, in general, be as concerned as distributors to check "loss-leading", because the natural result if a distributor uses any article in this way is that other distributors in the area abandon any attempt to sell it. I am certain that the noble Lord will agree that this reacts most unfavourably on the manufacturer. I cannot really say—I am sorry to say so, after listening carefully to the noble Lord—that he has made out a case for his Amendment.

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I am sorry to tell him, also, that there are some substantial objections to it. First, it requires the Court to determine whether certain facts—that is, persistent price-cutting—are consequential upon the application of Clause 23. I honestly think it is difficult to see that the Court could be asked to do this. What would be necessary, in fact, would be to make the Amendment apply to any case in which a distributor sold at a low price, whether the goods in question had up to now been subject to collectively enforced resale price conditions or not. But I suggest that it would be a remarkable innovation to allow general complaints to the courts where selling at low prices occur.
Secondly, a very strong case would need to be made before the Government could accept that the courts should be asked to make precise judgments on the costs of distributing any one product. Nobody could deny that costs vary as between distributors, depending upon the quantities of goods bought and sold, the location of the shop, the amount of service given and the efficiency and enterprise of the dealer in question. It would not be sufficient to presume that a dealer who accepted a significantly smaller percentage profit on one article was necessarily selling that article below the costs of producing and selling it. The Amendment would nevertheless impose on the Court, whenever a complaint was made, the need to make elaborate cost investigations from which no very precise conclusion might emerge. The Simon Committee on the Distribution of Building Materials made a thorough investigation of this subject and stated
"there is no means of ascertaining how much of a merchant's total costs is reasonably chargeable against a particular class of goods handled".
There is one other point on the Amendment: It appears to cover—the noble Lord says, "No"; but it struck me that it did—"loss-leading" by manufacturers—that is to say, the marketing of a line at less than cost. This, however, is outside the scope of Part II of the Bill which is not concerned with the basis on which prices are fixed. The Government's main objection to the Amendment is, however, that it seeks to provide for a situation which is already adequately provided for by Clause 24 upon which we shall do battle tomorrow
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—namely, by the additional facilities afforded in that clause for the individual enforcement of resale price conditions. I hope the noble Lord will not press his Amendment. I am certain that if he is not satisfied with the views which I have advanced we shall hear more about this on the battlefield tomorrow in regard to Clause 24.
LORD LUCAS OF CHILWORTH: I am most grateful to the noble Lord, because he has said what I understood was the Government policy—in other words, that the object of this Bill is to get more competition into trade. The noble Lord really has said that, has he not?—that so long as the Government get more competition into trade if, through that fierce competition, there is undercutting of prices, that is to the ultimate benefit of the consumer; and the commercial interests in any industry must look after themselves. In essence that is what the noble Lord has said, is it not?
LORD MANCROFT: Is that what the noble Lord thought I said or what he wanted me to say?
LORD LUCAS OF CHILWORTH: That is what the noble Lord did say.
LORD MANCROFT: No, I did not.
LORD LUCAS OF CHILWORTH: That is what the noble Lord really said. And he said that there are plenty of provisions in Clause 24 to stop that, That is how I understood the Government policy, and that was the only reason why I put down my Amendment to get a declaration of Government policy. I have got two declarations now—one from the noble Lord and one from his noble friend the Chancellor of the Duchy. I will see what the Chancellor of the Duchy says on Tuesday in regard to the pronouncement made by the noble Lord tonight. With those observations, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 23, as amended, agreed to.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): We have had a very successful day and we have made a good deal of progress. I suspect that the noble Viscount, Lord Alexander of Hillsborough, and the noble Lords, Lord

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Lucas of Chilworth and Lord Mancroft, are ready to "call it a day". Therefore, I suggest that we should carry the Committee stage no further tonight but should adjourn it until tomorrow. I suggest that the House be resumed, which Motion will be moved by my noble friend Lord Mancroft. So far as arrangements for tomorrow are concerned, I propose to say a word about those in adjourning the House.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We have had a very good day's work, and one noble Lord who sits on the other side has had the great good fortune to obtain a concession. We on this side have not been so fortunate. However, it has been a most pleasant and happy Committee stage, and I hope that tomorrow we may perhaps finish it off with a little more glory on both sides, by a concession being obtained by the Opposition.
House resumed.

LEEDS CORPORATION BILL
Reported from the Select Committee with Amendments.

BUSINESS OF THE HOUSE
11.28 p.m.
THE MARQUESS OF SALISBURY: My Lords, In moving the Adjournment of the House I should like to announce the
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arrangements which have been reached with regard to the further progress of this Bill. It has been agreed that the House shall meet tomorrow Thursday at two o'clock, and after Questions and formal Business the Committee stage of the Restrictive Trade Practices Bill, will be resumed. The Committee stage will, unless it has been finished earlier, be adjourned at 3.45 p.m., and the Second Reading of the Valuation and Rating (Scotland) Bill and the Marriage (Scotland) Bill will then be taken. If necessary, if it has not been finished earlier, the Committee stage of the Restrictive Practices Bill will be resumed at 6 p.m. and carried to an end.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I think the general arrangement made is very satisfactory. I think it would probably suit both sets of Whips if the main Division which must take place on Clause 24 could be taken before the adjournment for the Royal Garden Party. If it could be taken at twenty-minutes to four or a quarter to four, that would suit everybody and there would not be the difficulty for either side about the people who may or may not return after the Party.
THE MARQUESS OF SALISBURY: That is not in my hands. It depends how long the noble Lords wish to speak on that particular Amendment.
On Question, Motion agreed to, and House adjourned accordingly at half past eleven o'clock.