Sitting of 17 July 1957

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CLYDE NAVIGATION ORDER CONFIRMATION (No. 2) BILL
  Read a Second time: to be considered Tomorrow.
ORAL ANSWERS TO QUESTIONS
  SHIPBUILDING

    Steel Supplies, Sunderland
    Mr. Willeyasked the Parliamentary Secretary to the Admiralty what assistance has been recently given to the Sunderland shipbuilding firms who have had difficulty in obtaining steel supplies in proper sequence.
    The Civil Lord of the Admiralty (Mr. T. G. D. Galbraith): The Admiralty has received no requests for assistance from Sunderland shipbuilding firms during this year, and the direct answer to the Question, therefore, is "none". I should expect the general improvement in supplies to be already reducing this difficulty and, in due course, to eliminate it altogether.
    Mr. Willey: While I am much obliged to the Civil Lord for that answer, may I ask, since complaints have been made, whether if representations are made to him, he will use his good offices to assist in this problem? The yards have made a very big effort in overcoming the backlog of the work lost earlier in the year.
    Mr. Galbraith: I am, of course, always willing to help in any way that I can, but I think I ought to point out to the hon. Gentleman that Sunderland shipyards have received 15 per cent. more plates and heavy sections so far this year
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    than last year, and therefore the difficulties to which he has referred ought progressively to be becoming less and less.
    Mr. P. Williams: Is my hon. Friend aware that the people who are interested in this matter are grateful for the assistance which has been given by the Admiralty in the years gone by?

  ROYAL NAVY

    British and Russian Ships, Mediterranean (Signals)
    Mr. Edelmanasked the Parliamentary Secretary to the Admiralty what signals have been exchanged between units of Her Majesty's fleet and of the Russian fleet in the Mediterranean during the last month.
    The Parliamentary and Financial Secretary to the Admiralty (Mr. Christopher Soames): None, Sir.
    Mr. Edelman: Is it not very mysterious that three Russian submarines, a cruiser and three destroyers should have entered the Mediterranean and should then be lost to sight? Would the hon. Gentleman say whether this fleet has been handed over to Egypt?
    Mr. Soames: As I see it, that is nothing to do with the Question, which asks whether signals were exchanged. Had any British warships passed close to any of the Russian warships, they would undoubtedly have exchanged those courtesies which are well established and well understood by all seafaring men.

    Expenditure (Economies)
    Mr. Liptonasked the Parliamentary Secretary to the Admiralty what further cuts in naval expenditure have been made since the current estimates were approved.
    Mr. Soames: Navy Estimates for this year are £33 million less than last year, and we do not expect to be able to save more than that during the year. We are now busy putting into effect the various economies which this figure demands.
    Mr. Lipton: May we be told more about the battle that is going on behind the scenes? For example, is it true that the First Sea Lord has threatened to resign if the Minister of Defence carries out the cuts that he has in mind? Whose side is the Parliamentary Secretary on?
    Mr. Soames: I know of no battle behind the scenes.
    Mr. Bottomley: While we all desire to economise to the fullest extent, would not the Parliamentary Secretary agree that it would be wrong to cut down our defence at any cost, and will he give an assurance that the views of the experts will always be carefully weighed?
    Mr. Soames: I am very grateful to the right hon. Gentleman for that question. Of course, there is this long-term defence review in progress now, and it will be put into effect over a number of years. The right hon. Gentleman would not, of course, expect me to comment on that this afternoon.

  BRITISH ARMY

    No. 31 Base Workshops, Ashford (Closure)
    Mr. R. Harrisasked the Secretary of State for War who will in future carry out the maintenance, servicing and repair of army vehicles at present catered for at No. 31 Base Workshops, Royal Electrical and Mechanical Engineers, Ashford, Middlesex, when that establishment is closed
    The Under-Secretary of State for War (Mr. Julian Amery): I would refer my hon. Friend to the Answer I gave on 10th July to the hon. Member for Hayes and Harlington (Mr. Skeffington). My right hon. Friend has given careful consideration to the views put to him by trade union representatives on 10th July. He has decided, regretfully, that the decision to close 31 Base Workshops must stand.
    Mr. Harris: Does the Minister think that it is really worth while going ahead with the closing of these workshops, in view of the many thousands of pounds of plant and new equipment which have been put there, even within the last twelve months, and having regard to the fact that there is a large trained staff, many of whom are permanent civil servants and will have to be given compensation if and when this base is closed?
    Mr. Amery: All these factors were taken into consideration before a decision was taken.
    Mr. Hunter: Will the hon. Gentleman do his best to safeguard the pension rights of the established employees, because there is a clause in the agreement whereby they may not get their pensions? These are abnormal times in which there is redundancy. Therefore, will the hon. Gentleman safeguard the pension rights of the employees and ensure that compensation is given to those who become redundant?
    Mr. Amery: The hon. Member's supplementary raises a rather wider question, but I will certainly look into the points he has raised.

    Tank Transporters
    Mr. John Hallasked the Secretary of State for War what is the number of effective Army tank transporters available for immediate use.
    The Secretary of State for War (Mr. John Hare): For reasons of security, I cannot give the number. There are sufficient for our needs.
    Mr. Hall: Can my right hon. Friend assure the House of one fact at least—that there are sufficient Army tank transporters to be able to lift the minimum of one regiment without recourse to Pick-fords or any other transport contractors?
    Mr. Hare: I have said that there are sufficient for our needs.

    Mobilisation
    Mr. John Hallasked the Secretary of State for War (1) if he is satisfied that units on mobilisation are able to deal adequately with the medical examination, sorting and equipment of reservists reporting direct to the units in addition to the task of re-equipment, training, and movement; and if he will make a statement;
    (2) whether, in calculating the time taken to train units for active operations after mobilisation, account is taken of the dislocation of training caused by the influx of reservists and the drawing of stores and equipment.
    Mr. John Hare: Careful arrangements have been made, and are kept constantly under review, to ensure that if mobilisation should be necessary it could be carried through in the shortest possible time. Due account has been taken of the processes listed by my hon. Friend.
    Mr. Hall: Does not this mean that there has been a very considerable improvement since the time of Suez? Does it mean that a unit in the United Kingdom on the strategic reserve could be mobilised and be fully and operationally fit within seven days or some lesser period?
    Mr. Hare: Replying to the last part of the question, we can send certain forces into action very quickly. Replying to the question about Suez, of course this is a question of mobilisation, which was not involved in the Suez campaign; that was a question of calling back reservists to provide our reinforcements. We are, of course, taking full account of the experience we gained at that time.
    Major Legge-Bourke: Would my right hon. Friend bear in mind the importance of seeing that men who are on the Reserve and who will be needed in an emergency are medically inspected regularly? If that were done, it would save a lot of trouble when they are eventually called up and sometimes are found unfit.
    Mr. Hare: This question has been raised before. It would involve far too much expense to carry out the procedure which my hon. and gallant Friend has in mind.

    Convicted Soldiers (Appeals)
    Mr. C. Pannellasked the Secretary of State for War what action he proposes to take about the case of T/22950644 Driver R. Gibbon, arising from the successful appeals of Lance-Corporal Lonergan and Lance-Corporal Mulley, and the comments of the Lord Chief Justice thereon.
    Mr. John Hare: Four soldiers were convicted. Two of them appealed on grounds which were relevant to their cases only. Driver Gibbon and the fourth soldier did not appeal. After careful inquiry, I have decided that I should not intervene.
    Mr. Pannell: Is the hon. Member aware that Lance-Corporal Lonergan and Lance-Corporal Mulley were non-commissioned officers, whereas the other two men were drivers? Is he aware that in upholding the appeal of the non-commissioned officers, the Lord Chief Justice said that he would quash the conviction
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    out of hand and that he thought somebody had slipped up here? Is it not a fact, as the House was warned by my hon. Friend the Member for Hemsworth (Mr. Holmes) and myself earlier, that the Secretary of State on reflection appreciates that the whole of this business was a piece of victimisation, wrongfully conceived, which has now been contemptuously reviewed by the Lord Chief Justice? In simple justice, will not the right hon. Gentleman do for Driver Gibbon what the Lord Chief Justice did for Lance-Corporals Lonergan and Mulley?
    Mr. Hare: I cannot accept what the hon. Member said. The grounds of appeal were personal to these first two men individually, and the court was not referring in any way to the conviction of Driver Gibbon. I must make that absolutely clear. It was Driver Gibbon's own decision not to appeal, as I think the hon. Member knows perfectly well.
    Mr. Strachey: Does not the Secretary of State agree that the Lord Chief Justice was obviously speaking of the court-martial as a whole and that Mr. Garth Moore, appearing for the Crown, used the words that there was a great deal in the summing up which he could not seriously defend? That was the summing up of all these cases. Surely the Army would do itself much more credit by putting Driver Gibbon in the same position as that in which the two Lance-Corporals have been placed, because surely at least there is now a very strong presumption that his conviction, too, was a mistaken conviction?
    Mr. Hare: I do not accept what the right hon. Gentleman has said. These four men were advised by the same counsel. As I understand it, the two who appealed were advised by counsel to do so and the other two were not advised by counsel to do so.
    Mr. Speaker: Sir Hugh Linstead.
    Mr. Holmes: On a point of order. In view of the fact that this man is one of my constituents, may I ask a supplementary question?
    Mr. Speaker: I did not know that at the time.
    Mr. Pannell: Owing to the unsatisfactory nature of the reply, and bearing in mind that this is the first successful appeal

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    arising from the provisions of the 1951 Act which the Secretary of State has not faced squarely, I give notice that I will raise this matter on the Adjournment at the earliest possible time.
    Mr. Speaker: No doubt the hon. Member for Hemsworth (Mr. Holmes) will have a chance to speak then.

    Black Watch Band (North American Tour)
    Sir D. Robertsonasked the Secretary of State for War why the Black Watch bands which will play in a number of Canadian and United States cities in the autumn were permitted to sign a contract with the Hurok organisation which prevents them giving a concert for the Caledonian Hospital in New York or for any other charity during the tour.
    Mr. John Hare: A clause in the contract forbids the acceptance of engagements which are not arranged by the tour manager. I understand that this provision is a normal feature of a contract of this type. The commanding officer of the band is willing to give a charity concert for the Caledonian Hospital if suitable arrangements can be made between the tour manager and the hospital board.
    Sir D. Robertson: That does not arise from my Question. What arises is the nature of this contract, which prevents the descendants of a very distinguished regiment from giving a charity concert. This regiment played a great part in building up North America. At Ticonderoga, in New York State, many of the men gave their lives in defence of the Colony. Will not my right hon. Friend take steps to cancel this contract? It must be most harmful to British soldiers to be at the beck and call of a showman who will not yield after two or three months of effort to arrange for these men to give a concert for the hospital.
    Mr. Hare: I have every sympathy with my hon. Friend's desire to help this hospital, but the contract was signed and the tour was fully booked several months ago. I must make it clear that there was nothing in any way irregular or improper about the original contract.
    Mr. Woodburn: When the right hon. Gentleman is breaking up the old regiments of the British Army, will he keep
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    in mind the importance of preserving this very useful peace-time function of famous Scottish regiments?
    Mr. Hare: I do not think the right hon. Gentleman's intervention was very helpful. Naturally, I will consider any reasonable argument.

    National Service Men (Compassionate Releases)
    Mr. Frank Allaunasked the Secretary of State for War why he has refused the release on compassionate grounds of a National Service man whose widowed mother lives alone and who is so stricken with arthritis that she requires the assistance of a home help, details of whose case have been sent him.
    Mr. J. Amery: I have received a very full report on this case, which I have considered with sympathy. I am afraid that this is not a case where release from National Service would be justified.
    Mr. Allaun: Is the Minister aware that this widow is a registered disabled person?
    Mr. Amery: The lady in question lives alone. She has arthritis, but I am advised that she is not seriously ill. She does her own shopping and housework. The son is free to go home each week-end.
    Mr. T. Williams: Surely the physical disability of this widow should have brought such a case within the confines of the statement which the hon. Member made on 1st July, when he said,
    "The run-down of the Army has made it possible … to interpret hardship more generously than hitherto."—[OFFICIAL REPORT, 3rd July, 1957; Vol. 572, c. 1279.]
    This is the case of a widowed lady living alone and suffering acutely from rheumatoid arthritis. Is not such a case one for compassion?
    Mr. Amery: We have re-examined the case in the light of the more generous rules prevailing since the announcement of the run-down. Even so, it is not possible to do what the right hon. Gentleman wishes without causing unfairness to other parents of National Service men.
    Mr. T. Williams: If this is a generous response, what is a non-generous response?
    Mr. Strachey: Can the hon. Member say what is the purpose of refusing these applications now? It has been agreed that we wish to reduce the number of men called up for National Service, not to increase it. Surely this type of borderline case could now be dealt with much more sympathetically.
    Mr. Amery: As I explained in the debate on 3rd July, we have doubled the rate of compassionate release by comparison with last year.
    An Hon. Member: From one to two?
    Mr. Frank Allaunasked the Secretary of State for War why release on compassionate grounds is being refused to National Service men in cases of exceptional hardship, contrary to Government undertakings, and even where the widowed mothers are suffering chronic illness.
    Mr. J. Amery: Compassionate release is invariably granted when there is exceptional hardship. I explained the position in detail during the Adjournment debate on 3rd July.
    Mr. Allaun: Is the Minister aware that on 4th March the Government stated four circumstances in which exceptional hardship was likely to arise? I can show him letters from widowed mothers all over the country saying that the Government are breaking their undertaking. Was not one of those four circumstances that of a widow with a child or children to support? Now, four months later, I am told that this was a misprint in HANSARD and should have read "widower" and not "widow". Why not a widowed mother?
    Mr. Amery: Perhaps the hon. Gentleman would do me the courtesy of referring to my speech again.

    Expenditure, Cyprus
    Mr. Emrys Hughesasked the Secretary of State for War how much military expenditure he has incurred in Cyprus, since its establishment as a military base, up to 31st June, 1957; how much of this represents capital expenditure; and what are his present proposals for reducing it.
    Mr. John Hare: Expenditure by the Army in Cyprus between 1st December, 1954, and 31st June, 1957—
    Mr. H. Hynd: The 31st of June?
    Mr. Hare: I wanted to answer the Question put by the hon. Member for South Ayrshire (Mr. Emrys Hughes), but I accept the correction—30th June, 1957. The expenditure between 1st December, 1954, and 30th June, 1957, amounted to approximately £28 million. Of this, about £9 million was capital expenditure. As I have already told the hon. Gentleman, the future level of expenditure depends upon developments in Cyprus, and in particular upon the internal security situation.
    Mr. Hughes: Will the Minister not agree that this £9 million is an enormous sum of money to be spent on what may be used for temporary purposes only, and is he not getting the assistance of the Minister of Defence to reduce this commitment?
    Sir T. Moore: How much was for the extra day?
    Mr. Hare: Of course, £9 million is a lot of money, but I think that it is pure conjecture to suppose that this money is necessarily going to be wasted.

    Trooping the Colour Rehearsal (Charges)
    Mr. Emrys Hughesasked the Secretary of State for War how many of the 35 men who fainted at the Trooping the Colour rehearsal were charged with disciplinary offences; and what was the nature of the charges.
    Mr. John Hare: After the rehearsal on 3rd June, 20 men were charged under Section 69 of the Army Act with falling out on parade. Thirteen men were admonished. Four were admonished and given extra practice drill. Three were admonished and forfeited privileges for two or three days. The award of punishments was contrary to standing orders, and I am taking steps to see that there is no recurrence.
    Mr. Hughes: Is the Minister aware that his last sentence will give a great deal of satisfaction to everyone concerned?
    Mr. Strachey: Is it not very extraordinary that this sort of incident should go on, clearly contrary to instructions from the War Office, and cannot the right hon. Gentleman take some steps to see

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    that this rather silly mistake is not made again?
    Mr. Hare: I think that the right hon. Gentleman heard my assurance. I have no intention that such incidents should recur.
    Mr. Shinwell: Can the Minister illuminate the minds of hon. Members on this matter? Would he state what was the actual crime committed by these men? Can he specify it?
    Mr. Hare: These men, as the hon. Member for South Ayrshire (Mr. Emrys Hughes) who put the Question said, fainted on parade. I understand that, technically, it was called falling out of parade.

    Salvage
    Mr. Russellasked the Secretary of State for War what steps are taken to salvage food containers and other tins and cans and also waste paper from camps, stations, and depots under his Department.
    Mr. J. Amery: Tins and other such salvage are collected and disposed of by local contract or through the Ministry of Supply. The proceeds are credited to Army Votes. Waste paper is disposed of under arrangements made by the Stationery Office, which retains the proceeds.
    Mr. Russell: Will my hon. Friend give an assurance that no valuable metal is buried? I know that many local authorities do that, but can he give an assurance that the Army does not?
    Mr. Amery: I believe that to be the case.

    Ordnance Depot Employees, Coypool (Pay)
    Miss Vickersasked the Secretary of State for War why the employees at the Command Ordnance Depot, Coypool, will not benefit from the improved scales of pay until 1962.
    Mr. J. Amery: I believe my hon. Friend is referring to possible changes in the system of what is known as provincial differentiation. These changes are being considered by the National Whitley Council, because they would apply to all non-industrial civil servants, not only those at Coypool.
    Miss Vickers: Will my hon. Friend look at this again? Does he realise that this depot is only forty yards outside Plymouth and that, if it were in Plymouth, the employees would get the extra pay. Is he aware that, originally, the depot at which they worked, at Gun Wharf, was bombed, and they went outside only for this reason, and is not the present situation very unfair?
    Mr. Amery: As I said, this matter extends considerably beyond the responsibility of the War Office.

    The Citadel, Plymouth (Living Quarters)
    Miss Vickersasked the Secretary of State for War when he intends to modernise the living quarters of the Citadel, Plymouth.
    Mr. J. Amery: I regret that until final decisions have been made about the reorganisation of the Army I shall not be able to give my hon. Friend full information about this.
    Miss Vickers: Does my lion. Friend realise that good peacetime conditions for the Services depend on Service men having good living accommodation, especially for their families? The R.A.F. is beginning to make certain concessions in this respect, as also is the Navy, and may I take it that the Army will make considerable strides in this respect in the future?
    Mr. Amery: We are well aware of the point which my hon. Friend has made, and my right hon. Friend attaches high priority to it.

  POST OFFICE

    Special Messenger Service (Charges)
    Sir H. Lucas-Toothasked the Postmaster-General why he charges 16s. for sending a special messenger from the House of Commons to Hendon and back while he charges only 8s. for sending such a messenger from Hendon to the House of Commons and back.
    The Assistant Postmaster-General (Mr. Kenneth Thompson): We charge only for the distance the messenger travels in the direct service of the user; that is, from the post office from which he starts to the point of delivery.
    Sir H. Lucas-Tooth: Is it not rather absurd to charge twice as much if I ring up the post office at Hendon than is charged if I ring up the post office in the House of Commons?
    Mr. Thompson: If the user of the service requires the messenger to travel from the point at which the user wants to start to a distant point, and to return, then the user must pay according to the mileage travelled. If, however, the user wants the messenger to start from a distant point to where the user is, then the charge is based accordingly.

    Premium Savings Bonds
    Mr. Croninasked the Postmaster-General how many Post Office employees in the Windsor area have declined or expressed reluctance to do work in connection with Premium Bonds on conscientious or other grounds; and how many similar incidents have occurred among Post Office employees in other areas.
    Mr. K. Thompson: One at Windsor and 38 in other areas.
    Mr. Cronin: Does the hon. Gentleman not agree that it is a pity that the Government have a somewhat lower moral standard than their employees, and will he undertake to treat with proper indulgence all other cases where there is conscientious objection to being actively associated with Premium Bonds?
    Mr. Thompson: The hon. Gentleman might have acquainted himself with the fact that we already do that where cases of objection arise.
    Sir J. Lucasasked the Postmaster-General if he will make it possible for holders of Premium Bonds to have any prizes won paid in to their banking accounts direct in the same way as company dividends, since cheques sent direct to people who travel much may easily be lost.
    Mr. K. Thompson: The claim forms for prizes down to £50 already invite the holder to say whether he wants the money paid direct to his bank. The £25 winners will be given the same option, beginning with the third draw next month.
    Sir J. Lucas: I thank my hon. Friend very much, but is he aware that the bank had not heard of that the other day, and neither had the Post Office?
    Mr. Thompson: I expect that the Question of my hon. Friend and my Answer will draw the attention of everyone to this.
    Sir J. Lucasasked the Postmaster-General what percentage of the cheques for the first months Premium Bond draw have been cashed; what percentage is still unpaid; and what efforts are being made to find the owners of those still unpaid.
    Mr. K. Thompson: Claims for payment are still coming in. At present, 120 are outstanding. This is well under 1 per cent. of the total. We are writing again to those concerned.
    Sir J. Lucas: Is my hon. Friend aware that it would be much cheaper and better to pay the money direct into a bank, if people ask for that to be done, as dividends are?
    Mr. Thompson: I have answered Question No. 29, to which my hon. Friend's supplementary question does not appear to relate.
    Sir J. Lucasasked the Postmaster-General what he proposes to do with prize money on Premium Bonds which is not claimed within a reasonable period; and whether he will consider giving it to the Red Cross organisation.
    Mr. K. Thompson: My right hon. Friend is required by the Premium Savings Bonds Regulations, 1956, to transfer such moneys to the National Debt Commissioners for custody until claims are made. There is no time limit for claims. Any question of changing these provisions is a matter for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Lipton: Could not this unclaimed money be better used by making it unnecessary to introduce a 3d. postal rate for letters?
    Mr. Thompson: I hate to speculate upon the better use to which the hon. Gentleman might put any money entrusted to him.

    Phonograms
    Viscount Hinchingbrookeasked the Postmaster-General whether he is aware of continuing delays in obtaining an operator on London phonograms and of the poor quality of the service as regards sound transmission and intelligibility; and what steps he is taking to improve the service.
    Mr. K. Thompson: Yes, Sir. I am sorry there have been delays in answering due to the staff being under strength. More telegraphists are now completing their training, and I hope that the service will improve as they become proficient. Phonogram circuits are tested daily for quality of transmission, but special checks are being made and I hope there will be no further difficulty.
    Mr. W. R. Williams: On the question of delay, can the Assistant Postmaster-General say what is the average speed of answer normally on the phonogram, and, on the second matter, in view of the considerable number of operators employed on the phonogram service, does that not seem reasonable to suggest that the noble Lord the Member for Dorset. South (Viscount Hinchingbrooke) should try to be more in touch with English as it is spoken by ordinary men and women?
    Mr. Thompson: I do not think that I am called upon to comment on the second part of the hon. Gentleman's question. As regards the first part, we try to keep the length of waiting time as short as possible, but there are difficulties in the recruitment of staff.

    Telegrams (Losses)
    Mr. N. Pannellasked the Postmaster-General the average loss per inland telegram in the years 1953–54, 1954–55, 1955–56, and 1956–57, respectively.
    Mr. K. Thompson: 2s. 8d., 2s. 10d., 2s. 4d. and 3s. 7d.
    Mr. Pannell: Has my lion. Friend taken note of the fact that, since the charge for inland telegrams was doubled in 1954, the number of inland telegrams sent has more than halved and the loss per telegram has increased? In view of this, will he recommend to his right hon. Friend that he should try the experiment
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    of reducing the charge somewhat in order to increase the flow of traffic, to the benefit of Post Office finances and the general public?
    Mr. Thompson: The truth is that the number of telegrams sent has been in continuous decline since long before the war, and we have endeavoured to adjust our charges and our services so that the total loss is as small as possible.
    Mr. Ness Edwards: But is not the hon. Gentleman aware that, when the last increase was put on, it was said from this side of the House that the increase would kill this service, and is not what the Government have done really to render the service even more uneconomic?
    Mr. Thompson: The truth of the matter is that, although the loss per telegram is still very great, the total loss to the Post Office of the service as a whole is considerably reduced.

  TELEVISION

    Licences, Morecambe and Lonsdale
    . Sir I. Fraserasked the Postmaster-General how many television licences there were in 1951 and in 1956, respectively, in the Lancaster and Morecambe Head Office area and in the Ulverston Head Office area combined.
    Mr. K. Thompson: At the end of 1951, the figure was 1,088 and at the end of 1956, 18,253.
    Sir I. Fraser: Is that not very good progress?
    Mr. Thompson: It is very good progress, and it is in line with progress throughout the country.

    Institute of Directors (Advertisements)
    Mr. Frank Allaunasked Postmaster-General if he will make a further statement about the negotiations between the Independent Television Authority and the Institute of Directors concerning the Institute's advertisements on commercial television.
    Mr. K. Thompson: I would draw the hon. Member's attention to the Press statement issued by the I.T.A. on 7th June.
    Mr. Allaun: May we take it from that reply that in future no other body with political objects will be allowed to buy advertising time for propaganda purposes on this highly influential medium of commercial television?
    Mr. Thompson: All I am able to ask the House to assume from the Answer I have given and the statement to which I have referred is that the Independent Television Authority will apply the provisions of the Television Act.
    Mr. Ness Edwards: Is the hon. Gentleman aware that this is one occasion on which the Independent Television Authority can be congratulated on its better sense of responsibility than that of his right hon. Friend, who approved this proposal?
    Mr. Thompson: My right hon. Friend has acted perfectly in accordance with the Act at every stage.
    Sir R. Grimston: Is my hon. Friend aware that the proposal is to exhibit films depicting the achievements of British industry? Is it not a pity that the Act operates in such a way as to prevent such a laudable object from being achieved? In the interests of British industry, is it not time that the working of the Act was looked at with a view to some Amendment?
    Mr. Thompson: Anything of that sort is a matter for the House.

    Facilities, North-West Scotland
    Mr. John MacLeodasked the Postmaster-General when he expects to have television on the north-west coast mainland of Scotland, with particular reference to Ross and Cromarty.
    Mr. K. Thompson: Because of the technical difficulties and costs involved the British Broadcastng Corporation is unable to say when this will be possible.
    Mr. MacLeod: Has no survey of the area been made at all then? Will my hon. Friend give an assurance that further preference will not be given to areas which already have an adequate service before these remote areas have a service, which would be very beneficial to them, since they have very little of such entertainment, if they have any at all?
    Mr. Thompson: The B.B.C. conducted an investigation into the requirements of Scotland and accepted a recommendation of the Broadcasting Council for Scotland, resulting in the proposal for the Orkneys station. That does not mean that anything else is precluded, but at the moment the answer must be as I have given it to the House.
    Mr. Woodburn: May I ask the hon. Gentleman to keep in mind the valuable service he can thus render in persuading people to continue to inhabit these isolated areas, because it is extremely difficult to persuade them, women especially, to live in outlying areas when the amenities of the towns are so attractive? The provision of this service would be some inducement to people to stay in the isolated areas.
    Mr. Thompson: That is one of the important social factors which both the B.B.C. and my right hon. Friend must take into account.
    Mr. John MacLeodasked the Postmaster-General what land line will become available to be used for the transmission of television from the Rosemarkie station to the mainland of Wester Ross
    Mr. K. Thompson: No land line exists suitable for the purpose my hon. Friend has in mind.

  TELEPHONE SERVICE

    Installation Deposits
    Mr. Collinsasked the Postmaster-General why an additional deposit of £5 is required before telephones are installed in the Borough of Shoreditch; what is the number of Metropolitan boroughs in which this additional deposit is required; and what are the reasons governing the decision to demand an additional deposit.
    Mr. K. Thompson: We do not, as a matter of course, require payment of a deposit before providing telephones in the Borough of Shoreditch, or elswhere; but in any individual case where it is considered necessary by way of security, a deposit may be required in accordance with Regulation 37 of the Telephone Regulations, 1954.
    Mr. Collins: Is the Assistant Postmaster-General aware that the persons from whom this deposit was demanded were in the pensionable employment of Shoreditch Corporation and could have given unexceptionable references? Will he take steps to end this objectionable practice, which appears to be based on the erroneous belief that poor people are less honest than wealthy people?
    Mr. Thompson: Oh, no, that is an entire misinterpretation of the Regulations. The Post Office naturally must take appropriate steps to protect itself against loss. If it is found that the Post Office has been in error in making a judgment, it is always quite ready to have a look at it again.
    Mr. Nabarro: Will my hon. Friend confirm that it is the policy of the Post Office to conduct its affairs on a commercial and efficient basis and that that must include the testing of the credit-worthiness of every subscriber or every person who wishes to use Post Office credit services?
    Mr. Thompson: As one would expect, my hon. Friend has put his finger on the nub of the whole matter.
    Mr. Collins: Is the Assistant Postmaster-General aware that in these cases I have investigated the Post Office signally failed to test the credit-worthiness of these people and demanded this additional deposit irrespective of their credit standing?
    Mr. Thompson: I should like to assure the hon. Member that if we have been in any way either harsh or at fault in a matter, we are always ready to correct what we have done.
    Mr. Nabarro: I wish the National Coal Board behaved like that.

  ROYAL AIR FORCE

    Airfields, Cyprus
    Mr. P. Williamsasked the Secretary of State for Air whether he is satisfied with the state of readiness of the airfields in Cyprus; and if he will make a statement.
    The Under-Secretary of State for Air (Mr. Charles Ian Orr-Ewing): Although certain work is still in hand, I am satisfied that the airfields in Cyprus can meet the military demands that might be made on them.
    Mr. Williams: Does that answer mean that the airfields in Cyprus are capable of taking even the heaviest bombers of the British strategic air force?
    Mr. Orr-Ewing: Akrotiri airfield was constructed with this need in mind and can take our heaviest strategic bombers.

    Air Officers and Other Ranks (Ratios)
    Mr. de Freitasasked the Secretary of State for Air the ratio of other ranks to officers of the rank of air commodore and above on 1st July, 1939, 1945, 1951 and 1957.
    Mr. C. I. Orr-Ewing: The ratio of air officers to other ranks on the dates refer-ed to was as follows:

    1st July, 1939

    …

    …

    1:1,174

    1st July, 1945

    …

    …

    1:2,046

    1st July, 1951

    …

    …

    1: 975

    1st July, 1957

    …

    …

    1: 761

    Mr. de Freitas: Will the hon. Gentleman consider this? When new air marshal posts are established to deal with guided weapons, why cannot there be a corresponding reduction in air marshal posts dealing with manned aircraft?
    Mr. Orr-Ewing: I think several considerations arise out of this Question and that supplementary. The first is that the number of officers cannot be directly related to the number of airmen because in recent years there have been needs for air officers with N.A.T.O. and the Ministry of Supply which used not to exist. I would also remind the hon. Gentleman that we are conducting a most careful survey of all air ranks, and we shall certainly consider the points he has made in his supplementary question.
    Mr. Paget: Is not this inter-Services competition to avoid being de-ranked in various other departments becoming a bit expensive for the Exchequer?
    Mr. Orr-Ewing: That is a question for the Minister of Defence, not for myself.

    Kirton Station, Lindsey
    Mr. E. L. Mallalieuasked the Secretary of State for Air if he will make a statement about the future of the Royal Air Force station at Kirton in Lindsey.
    Mr. C. I. Orr-Ewing: The future use of this station is still being examined.
    Mr. Mallalieu: Will the Under-Secretary assure us that the amenities of this station and the quite exceptional buildings will be taken into account in this consideration?
    Mr. Orr-Ewing: The hon. and learned Gentleman is quite right in saying that this station is of outstanding merit, and we certainly wish to retain it if it will fit into the new deployment plans.

    Soviet Air Display
    Mr. Lewisasked the Secretary of State for Air whether he will make a statement on the acceptance of the official invitation and visit of representatives of the Royal Air Force to the Soviet air display.
    Mr. C. I. Orr-Ewing: The Russian invitation was received and accepted on 28th May, and we subsequently informed the Russian Embassy that the party, which was to be made up of seven officers, would be headed by the Deputy Chief of Air Staff. They were to fly to Moscow in a Comet II of Transport Command. On 21st June, the Russian Embassy informed us that the display had been cancelled because of unfavourable weather forecasts, and that the invitation extended to the Royal Air Force must regretfully be withdrawn.
    Mr. Lewis: Has the Minister's attention been drawn to a statement alleged to have been made by the Soviet Government that the British Government accepted this invitation and then, at the last minute, failed to send these observers? Will he either confirm or deny that the British Government did not refuse to send them?
    Mr. Orr-Ewing: I am afraid I have not seen the statement to which the hon. Member refers, but the facts are exactly as set out in my original reply.

  CIVIL AVIATION

    Air Terminals, London
    Mr. Beswickasked the Minister of Transport and Civil Aviation the estimated total cost of the air terminal buildings now under construction at Cromwell Road; for how long it is estimated they will be adequate for the processing of British European Airways passengers; and what arrangements are
    1132
    now being made for the provision of a terminal capable of accommodating the passenger requirements of British European Airways, British Overseas Airways Corporation, the foreign airlines for whom they act as agents, and other independent operators in five years' time.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Airey Neave): My right hon. Friend is informed by Air Terminals, Ltd., the private company which is developing the new terminal at the Cromwell Curve, that the buildings now under construction will cost £250,000 and will be adequate for the requirements of short-haul operators for ten years. The site is capable of extensive further development. I understand, however, that B.O.A.C. do not propose to use this terminal, but intend first to develop their present terminal in Buckingham Palace Road.
    Mr. Beswick: Does not the Joint Parliamentary Secretary agree that there is a certain amount of drift in this matter? Is he aware that this is the third air terminal since the war which B.E.A. have had to build, and that it will still be inadequate for future needs? In view of the necessity of co-ordinating the requirements of the different air transport companies, and also in view of the fact that the railway link with London Airport is bound up with this question, will he not ask his right hon. Friend to devote more of his time to this matter?
    Mr. Neave: My right hon. Friend is certainly devoting a considerable amount of his time to this matter. I agree with the hon. Member that this is bound up with the railway link, with the future of the new Cromwell Curve Terminal, and also of the B.O.A.C. building at Buckingham Palace Road. The matter is still under consideration between the airline Corporations and the British Transport Commission
    Mr. Langford-Holt: Will there be a stopping place for B.O.A.C. passengers who arrive at London Airport and who wish to get out in West London areas, rather than having to go into the centre of the most congested area?
    Mr. Neave: Nothing has been arranged at the moment in respect of that, but I

    1133
    will certainly write to my hon. Friend when a decision is finally made about tit,: B.O.A.C. building.
    Mr. Woodburn: Can the hon. Gentleman tell us whether Gloucester Road station will be extended in order to give an entrance to the new terminal, because the present Gloucester Road station will be very inconvenient, from the point of view of people travelling to the new terminal?
    Mr. Neave: I will bear in mind what the right hon. Gentleman says and inform the British Transport Commission about it.
    Mr. Rankin: Is the hon. Gentleman aware that there is a widespread belief amongst users of the air services that a station is being made under the terminal? Is that not correct? Are we to understand that we must go from the terminal to Gloucester Road?
    Mr. Neave: No, I do not think that is quite correct. There is no station being made under the terminal. The construction of the terminal at the moment is on the approach to station itself.
    Mr. Russellasked the Minister of Transport and Civil Aviation, in view of the successful building of a London terminal for British European Airways over the underground railway off Cromwell Road, if he will have a survey made to find out where else in the London area other main line or underground railways could be built over in this way.
    Mr. Neave: Because of the high cost of construction and the limited number of suitable sites, this matter does not lend itself to general treatment. It is for the British Transport Commission to consider the possibilities of individual sites with would-be developers.
    Mr. Russell: While appreciating the high cost of construction, may I ask my hon. Friend if he does not agree that there must be a large number of sites on the railways leading out of London, for instance, at Paddington, King's Cross, Euston and St. Pancras, of which some use could be made, bearing in mind what has been achieved at Cromwell Road? Could not such sites be used, if not for buildings, for car parks?
    Mr. Neave: The British Transport Commission is well aware of what my hon. Friend says. It is certainly prepared to consider leasing sites of this kind on commercial terms for development as car parks, and the Commission is in touch with the organisations likely to be interested.
    Mr. J. Griffiths: Surely it would not be a very difficult or expensive project to construct a subway from the new air terminal to Gloucester Road station?
    Mr. Neave: I will bear that point in mind, but I should like further notice of it in the form of a Question.

    Aircraft (Smoking)
    Mr. Rankinasked the Minister of Transport and Civil Aviation if, in view of the Report of the Medical Research Council on smoking and lung cancer, he will give a general direction to British European Airways to prohibit cigarette smoking on its internal air routes.
    Mr. Neave: No, Sir.
    Mr. Rankin: Is the Under-Secretary aware that this is a plea from a smoker? Is it not the case that the conditions in which this disease-provoking habit is exercised in an aircraft do not exist in any other form of transport? Since the conditions are unique, will he not give another thought to doing something other than appealing to local authorities to take action in this matter of bringing about an arrestment of lung cancer?
    Mr. Neave: The best answer I can give to the hon. Member is to refer him to the answer which my right hon. Friend gave in respect of single-deck buses and underground trains on 3rd July, when he said:
    "It would therefore be inappropriate to introduce general prohibitions of this kind at present, but the position will be kept under review."—[OFFICIAL REPORT, 3rd July, 1957; Vol. 572, c. 119–120.]

  ROADS

    Signs
    Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation why he requested the Oxford County Council to withdraw the directional signs erected on the Oxford to London road.
    Mr. Langford-Holtasked the Minister of Transport and Civil Aviation whether he will request the Road Research Laboratory to investigate the legibility of traffic signs with the standard black lettering and numbering on a light background in comparison with the signs with white lettering and numbering on a dark background at present being used experimentally on A40 between Sandhills and the Islip Turn; and how the cost would compare for a beaded sign of each type.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): These signs were originally erected as temporary signs during constructional work. Therefore they did not conform to those authorised under the Road Traffic Acts. I have now decided to approve them on an experimental basis as part of the investigation now being carried out in conjunction with the Road Research Laboratory into the merits of different types of direction signs. I cannot at this stage say anything about comparative costs.
    Mr. Davies: While appreciating that these signs are now to remain, at least temporarily, is it not a fact that three requests were made to the Ministry to remove these signs, and that it was only after adverse public opinion had been expressed that it was agreed to permit them to remain? Is it not also a fact that these signs correspond far more closely to those recommended by the International Convention on Road Signs, and that being the case, why is it that we cannot erect signs which come closer to that Convention to assist both tourists and commercial motorists who come over here?
    Mr. Watkinson: I think the facts are not as the hon. Gentleman has represented them. The facts are, as I have said, that these signs were erected firstly purely as temporary and diversionary signs. They do not conform to the Acts, and, therefore, my divisional road engineer was in duty bound to say that they had to come down. However, when this matter came to my notice, I thought that this could well be part of the general experiment being made to bring tour signs rather nearer to continental signs, and that is why I allowed them on an experimental basis.
    Mr. Langford-Holt: Is my right hon. Friend aware that the fact that these signs do not conform to the Regulations he has issued does not necessarily mean that they are bad? Will he seriously consider trying to bring the road signs and the regulations which apply thereto more into conformity with either the continental or the international system on the American basis?
    Mr. Watkinson: I quite agree with my hon. Friend. I do not claim any special merit for the regulations which my Ministry makes, but I must ask my divisional road engineers to implement the law as it stands. I quite agree with my hon. Friend that we must try to get our road signs nearer to the continental signs. The only thing is that if we tried to do that today it would cost over £4 million.
    Mr. G. R. Strauss: Will the Minister bear in mind, when considering the whole question of road signs, the fact that most motorists have uppermost in their minds when travelling on country roads the towns they are going to pass through rather than the number of the road? Up to now, the emphasis has been on the wrong thing.
    Mr. Watkinson: I think most hon. Members of this House will have noticed that road names are getting bigger and road numbers smaller, and I think that is right.

    Yorkshire
    Mr. A. Robertsasked the Minister of Transport and Civil Aviation the number of road constructions or reconstructions for which his Department is responsible which are actually in progress in Yorkshire at the present time.
    Mr. Watkinson: On trunk roads 23 major schemes costing about £ 1,400,000 are in hand and 15 more costing about £2,000,000 are in preparation. In addition, some 140 minor schemes, costing about £770,000, will be dealt with this year. On classified roads, I have made grants towards 45 major schemes costing about £ 1,270,000 and 65 minor schemes costing about £655,000.
    Mr. Roberts: Whilst thanking the Minister for that information, may I ask whether he is aware that a certain amount of procrastination in his Department is

    1137
    causing considerable delay in starting these schemes? Is he further aware that West Riding County Council has been waiting months for the invitation to start the Doncaster by-pass?
    Mr. Watkinson: The hon. Member knows that the line of the Doncaster bypass has just been fixed and work can now go forward. If he has any details about any way in which my Department or anyone else is holding up the road programme and lets me know, I shall be only too glad to look into them.

    Programme
    Mr. Ernest Daviesasked the Minister of Transport and Civil Aviation if he will make a statement on the proposed road building programme which is to follow the conclusion of the present programme due to end 1958–59.
    Mr. Watkinson: I have nothing to add to previous statements.
    Mr. Davies: When will the Minister announce the next four-year road programme? Does he not appreciate that there is a considerable time lag between the authorisation of schemes and their execution? Has he not informed the House several times that several years elapse from the time planning starts? Is he aware that until the programme is determined it will be impossible to go ahead with planning? Can the right hon. Gentleman give any indication of when he will announce his programme?
    Mr. Watkinson: I have said a great many times what the main priorities are, and I am sure that the hon. Member knows that very well. Those priorities are certainly ones which will carry on far longer than the present road programme. How they are to be fitted in with more minor schemes is something which I am now considering.
    Mr. Davies: Can the right hon. Gentleman say whether full planning is going ahead with the priorities to which he referred, where authorisation has not yet been given? Surely the point is that it is necessary to know what schemes will be authorised within the next four years so that preliminary planning can take place now.
    Mr. Watkinson: I do not think that my Department has issued authorisation four years ahead in complete detail, and
    1138
    I have given an indication of our priorities in motor road schemes and in dealing with bottle-necks and other things.
    Sir F. Medlicottasked the Minister of Transport and Civil Aviation if his attention has been drawn to the way in which the Whitsun holiday has emphasised the inadequacy of the roads in Great Britain to carry the volume of traffic wishing to use such roads; and if he will make a radical and comprehensive new approach to this problem with a view to increasing and accelerating the whole of his plans for the improvement of our roads system.
    Mr. Watkinson: As I said in reply to a Question by my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) on 25th June, the road programme will be advanced as quickly as the country's economic and financial situation permits.
    Sir F. Medlicott: Is my right hon. Friend aware that it is not only the pleasure motorist who is affected, although he is important? Is he aware that the congested state of our roads causes delays in the distribution of industrial goods and services which must be a factor in the cost of distribution and, therefore, in the cost of living, and that expenditure on these roads would be really an economy in the long run?
    Mr. Watkinson: I quite agree. That is why at the top of the priority list are an initial number of trunk roads of great benefit to commercial traffic.
    Dame Irene Ward: And the Tyne Tunnel.
    Mr. Bottomley: Is the right hon. Gentleman aware that, following the Whitsun holiday, the A.A. report showed that the most congested road was that passing through the Medway towns, where sometimes there were queues five miles long and delays of many hours? Does not that emphasise the need to speed up work on this road?
    Mr. Watkinson: The Medway by-pass is among my priorities.

    Construction Methods
    Sir F. Medlicottasked the Minister of Transport and Civil Aviation if he is aware that British methods of road construction still lag behind those which

    1139
    obtain in the United States of America and other countries; and what steps are being taken by his Department to ensure that speedier methods of road construction already in use in other countries shall be adopted in Great Britain without further delay.
    Mr. Watkinson: On road works of comparable scale and character British methods of construction do not lag behind those of other countries. Greater speed will be achieved when it is possible to undertake the construction of long continuous sections of new roads and motorways. With this in view, the Department's standard specification for trunk roads, which includes a wide range of alternative forms of construction, has recently been revised in consultation with the Road Research Laboratory and the Federation of Civil Engineering Contractors.
    Sir F. Medlicott: Is my right hon. Friend not aware that it seems to take in this country months to do stretches of road which in other countries are dealt with in weeks or even days? Can he not try to import some sense of urgency into this matter?
    Mr. Watkinson: To be fair, my hon. Friend must compare like with like. He will find, where there are small delays in road construction, that under the roads here there is a vast network of pipes, sewers and electricity mains, whereas in the wide-open spaces of America there are none of these things.

  RAILWAYS

    Non-Smoking Compartments
    Mr. Beswickasked the Minister of Transport and Civil Aviation if, in view of the new evidence regarding the danger to health of tobacco smoking, he will now give a general direction to the British Transport Commission not only to set aside adequate numbers of train compartments in which smoking is prohibited, but also that these compartments shall be more prominently indicated, and the prohibition enforced, with more adequate penalties for defaulters.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent): The Government's policy is to make known
    1140
    the risks of smoking, leaving it to individuals to make up their own minds. If the public want more non-smoking compartments, the British Transport Commission is ready to provide them. The present notices seem adequate, and the Commission are shortly submitting to us by-laws increasing the penalty for smoking offences.
    Mr. Beswick: Will the hon. Gentleman bear in mind that there is very real hardship here and that the extraordinary amount of correspondence I have received since putting this Question down shows real suffering on the part of bronchial people? Will he, therefore, do what he can to speed up action on the part of the British Transport Commission in this matter?
    Lieut.-Colonel Bromley-Davenport: Will not my hon. Friend agree that it is typical of our slow-thinking, bureaucratic, loss-making—at increased cost—nationalised industries that no action has yet been taken in this matter? Should not the nationalised industries support the policy of Her Majesty's Government? In other words, should they not label those compartments where smoking is allowed, whereas those where smoking is not allowed should be left without any signs whatsoever?
    Mr. Nugent: My Department's policy, and indeed the Commission's policy, is exactly to follow the Government's policy on this problem of smoking and the dangers of heavy smoking. If the hon. Member for Uxbridge (Mr. Beswick) will give me any evidence that he has of a need to alter the Commission's present arrangements, I shall be very pleased to send them on to the Commission.
    Mr. Shinwell: In view of the persistent propaganda on behalf of the nonsmokers, will the hon. Gentleman occasionally listen to a plea by a smoker and so arrange with the Transport Commission that, while protecting the interests of non-smokers, it should not permit them to clutter up compartments where smoking is permitted?
    Hon. Members: Answer.
    Sir A. Gomme-Duncan: Will my hon. Friend agree that the real difficulty is to stop people smoking in non-smoking compartments, and also in the Library of the House of Commons?
    Mr. Usborne: Since few hon. Members could hear and nobody could understand the question put by the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport), may I ask whether the Minister, in view of the fact that there are far more people who do not wish to smoke in trains than there are who do—[HON. MEMBERS: "No."]—will reverse the practice and label the carriages that can be smoked in and leave the rest alone?
    Mr. Nugent: I will bear in mind the views ex pressed today, not entirely unanimously, on either side of the House, and I will pass them to the British Transport Commission.

  TRANSPORT

    Canals and Inland Waterways (Report)
    Mr. Malcolm MacPhersonasked the Minister of Transport and Civil Aviation whether he is yet able to say when the Bowes Committee on canals and inland waterways will report.
    Mr. Nugent: I cannot yet add to my right hon. Friend's answer of 5th June to the hon. Member for Openshaw (Mr. W. R. Williams).
    Mr. MacPherson: Will the hon. Gentleman bear in mind that where canals run through built-up areas the risk of drowning accidents continues to be high? Will he have in mind the desirability of trying to have this matter dealt with as quickly as possible?
    Mr. Grant-Ferris: Is it not a fact that the work of this Committee has proved much more difficult and long drawn out than first expected? As everybody hopes that something lasting will come from it, would it not be much better that the Committee should not spoil the ship for a ha'p'orth of tar?
    Mr. Nugent: The Committee is very well aware of the points raised by the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson). The Committee has visited most of the canals and will give its report as soon as it can.
    Mr. G. R. Strauss: Is this situation not becoming really farcical? Is the hon. Gentleman aware that this Committee
    1142
    was set up a year ago to consider a matter where all the facts were known and it was generally agreed that urgent action was necessary? We do not know when the Committee will report, and it probably will take a year before action is taken, during which time there will be most serious consequences. Do not the Government realise their responsibility in this matter? Ought they not to do something quickly?
    Mr. Nugent: We feel that we should give the Committee a chance to make its report. It has received evidence from a hundred bodies and has visited most of the canals in the country. It is a big undertaking. The Committee is now preparing its report, which will be presented to us as soon as. possible.
    Mr. W. R. Williams: Would it not be possible for the Committee to be asked to publish an interim report dealing specifically with the unused canals which are retarding the development of so many industrial areas in the North of England?
    Mr. Nugent: That suggestion has been considered, but they must be asked to make one complete report.

JOHN WILLSON VICKERS (CONVICTION)
Mr. S. Silverman (by Private Notice)asked the Attorney-General why he has refused to the defence, in the case of Regina v. Vickers, his fiat to bring a further appeal against conviction to the House of Lords, and whether he will now reconsider his decision.
The Attorney-General (Sir Reginald Manningham-Buller): The Attorney-General can grant a certificate for an appeal to the House of Lords in a criminal case only if, in his opinion, the decision of the Court of Criminal Appeal involves a point of law of exceptional public importance and it is desirable in the public interest that a further appeal should be brought. I was unable to reach the conclusion that those conditions were satisfied in this case and it was, therefore, my duty to refuse my certificate.
In answer to the second part of the Question, I do not think that it is open to me to reconsider my decision, but if it

1143
were my decision would be to the same effect.
Mr. Silverman: Is the right hon. and learned Gentleman aware that his decision has been received with considerable surprise and great dissent? Will he confirm that in this case two points of law were raised which were described by the Lord Chief Justice as being of grave importance? Will he also confirm that these two points of law were new points of law, in the sense that they arose for the first time under an Act of Parliament which received the Royal Assent as recently as last April? Will he also confirm that the Court of Criminal Appeal at first differed itself as to what its decision should be? Why, therefore, does he not consider that it is in the public interest that these matters should be decided by the highest judicial tribunal?
The Attorney-General: It is quite true that this case was first considerd by a Court consisting of three judges. It was later considered by a Court consisting of five members, of whom the original three judges formed part. As the Lord Chief Justice said in his judgment:
"At the first hearing of the case last Monday, there being not complete unanimity among the members of the Court who heard the case, I assembled a full Court of five members and I am happy to say that there is now complete unanimity in the Court and the judgment I am now about to deliver is the judgment of the Court and agreed to by all the members of it."
So that there was no dissent among the members of the Court, and the member of the Court who felt doubt originally presumably had that doubt resolved. [An HON. MEMBER: "Clearly?"] Clearly, presumably, because he joined in the decision. Counsel for the Crown was really not called upon to argue at all. I said a few words, but did not speak for more than a couple of minutes. [An HON. MEMBER: "Just as well."] [Laughter.] This is a serious matter. It is a capital charge and I do not regard it as a matter for any hilarity. Counsel for the Crown was really not called upon to argue at all, and the Court did not find it necessary to reserve its judgment.
I must say, having given this matter the fullest consideration I can, that I could not regard the argument advanced on behalf of the appellant as really a tenable argument, and the judgment of
1144
the Court of Criminal Appeal indicates that it formed the same view. Nor could I really regard it as in the public interest that a further appeal should be brought to try to reverse a decision of the full Court of Criminal Appeal and to get the House of Lords to accept the argument as to the construction of the Statute which was advanced by the appellant and which was similar to the argument advanced by the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) in debates in this House on this Section, and which the hon. Gentleman himself said would make nonsense of the Section.
Mr. Silverman: Would the right hon. and learned Gentleman not agree, since he has referred to the debates which took place in the House, that both he himself and the then Home Secretary assured the House of Commons repeatedly that their intention in Section 1 of the Act was to ensure that a man could not be convicted of murder who had no intention to kill? Does not the decision of the Court of Criminal Appeal mean the exact opposite of that?
The Attorney-General: The hon. Gentleman is quite wrong. Throughout those debates we made it perfectly clear that the intent necessary to constitute murder was either an intent to kill or an intent to do grievous bodily harm. If the hon. Gentleman will look at the OFFICIAL REPORT of Our debates he will see that this was made clear more than once.
Mr. Hale: Would the right hon. and learned Gentleman bear in mind two points? First, that until the highest court in the land has decided on a matter of this importance every counsel engaged in a murder case in future will be in the difficulty of knowing that the law may be altered by the highest tribunal once the Attorney-General gives his fiat. Secondly, that the clearest statement was made from the Front Bench opposite, during the discussion on Section 1 of the Act, that the doctrine of constructive malice was being abolished by the Section, and the clear decision of the Lord Chief Justice is exactly what we said. We received assurances to the contrary from the Front Bench. We said that we thought the Section did not succeed in abolishing constructive malice and the Lord Chief Justice has now decided that.

1145
Surely that is a matter upon which the decision of the highest tribunal should be taken.
The Attorney-General: I really cannot reconcile the hon. Gentleman's remarks with the observations of the Lord Chief Justice in giving the judgment of the Court. He made it clear that the doctrine of constructive malice was removed by the Section as was announced to be the intention in this House. [HON. MEMBERS: "The exact opposite."] He said, and I will read the last part of the judgment:
"The Court desires to say quite firmly that in considering the construction of Section 1 (1), it is impossible to say that the doing of grievous bodily harm is the other offence which is referred to in the first line and a half of the Section. You have to show independently of the fact that he is committing another offence that the act which caused the death was done with malice aforethought as implied by law. The existence of express or implied malice is expressly preserved by the Act and, in our opinion, a perfectly proper direction was given…"
Nothing I have said today is in any way inconsistent with what was said at this Box during the passage of that Bill.
Mr. Paget: Surely the whole point, and one which we debated at very great length, was this—I raised the point myself. I said that I was very doubtful whether Clause I did, in effect, abolish constructive malice, and whether, under that, it was necessary that there should be either an intention to kill or an intention to maim. The Government said that it was their intention that there must be an intention either to kill or to maim. The medical evidence in this case was that the blows were intended to prevent the old lady interfering but were not of a nature to maim. The Lord Chief Justice held that there need not be an intention to kill her or an intention to maim, and that is the whole point.
On that, since an interpretation has been put on it by the Court of Criminal Appeal which is precisely the opposite to the meaning which the Government assured us it would bear when they asked us to pass the Section, we might at least see whether the House of Lords agrees with the Court of Criminal Appeal or with the Government on their interpretation of the Section.
The Attorney-General: I am sorry, but the hon. and learned Gentleman is quite wrong. The decision of the Court of Criminal Appeal fully endorses the view expressed from this Box as to the effect of that Section. It was said more than once from this Box that the effect of Section 1 was to preserve as an ingredient of the offence of murder an intent to do grievous bodily harm, and that the Court of Criminal Appeal has held to be the case. Therefore, there is no inconsistency between what the Court of Criminal Appeal has held and what the Government have said was the effect of this Section.
Mr. S. Silverman: I ask your leave, Mr. Speaker, to move the Adjournment of the House under Standing Order No. 9—
Sir I. Fraser: On a point of order—
Mr. Silverman: I ask leave, Mr. Speaker—
Mr. Speaker: Sir Ian Fraser. A point of order.
Sir I. Fraser: I hesitated to raise my point of order, Mr. Speaker, because of the obvious importance of the questions which have passed to and fro across the Floor of the House, but, without dealing in any way with the merits of what has been said, may I, in the interest of order and of the House, ask you what sense of urgency there is in this matter, Sir? If there is a sense of urgency and someone is to be hanged tomorrow, I deeply apologise to the House and to you for rising now, but I cannot help feeling that abstruse legal matters such as those which have been discussed are not best dealt with by question and answer. Unless there is a sense of urgency in the matter, may I, with respect, ask you why the Private Notice Question was allowed?
Mr. Speaker: The hon. Member may rest assured that I satisfied myself that there was an element of urgency in the matter.
Mr. Silverman: I ask leave, Mr. Speaker, to move the Adjournment of the House, under Standing Order No. 9, to call attention to a definite matter of urgent public importance, namely,
The refusal of the Attorney-General to grant his fiat to enable John Willson Vickers, now

1147
lying under sentence of death, to appeal against his conviction to the House of Lords as provided for by the Criminal Appeal Act, 1907.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House under Standing Order No. 9 to call attention to a definite matter of urgent public importance, namely,
The refusal of the Attorney-General to grant his fiat to enable John Willson Vickers, now lying under sentence of death, to appeal against his conviction to the House of Lords as provided for by the Criminal Appeal Act, 1907.
That is not within the Standing Order Parliament has, by the Criminal Appeal Act, cast upon the Attorney-General the duty of either certifying or refusing to certify that a case of this character raises such issues that he ought to let it go to the House of Lords. That is a discretion cast by Statute upon the Attorney-General, and, therefore, it becomes a part of the ordinary operation of the law. Matters of that sort have been ruled by my predecessors on many occasions not to be subjects which can be raised under Standing Order No. 9.
Mr. Silverman: May I submit that, in spite of that, Mr. Speaker, this is not the ordinary operation of the law if that expression means that it is a judicial act of any kind? If it were a judicial act, naturally one would not be permitted to ask questions about it and certainly not to move this Motion. It is the duty laid upon the Attorney-General by the Criminal Appeal Act, but it is an administrative duty for which, as with all other administrative duties, the Attorney-General is responsible, like other Ministers, to the House of Commons. Therefore, I submit to you that if the Attorney-General comes to a decision which the House of Commons wishes to question, and if it is an urgent matter and of public importance, the House, if it so wishes, ought to be allowed to discuss it under the Standing Order.
Mr. Speaker: I have considered this matter with great care, foreseeing that such an application would probably be made, and I am quite satisfied that this is not within the Standing Order. The action which the Attorney-General has taken is in discharge of a burden laid upon him by Parliament, and it is part
1148
of the machinery of criminal appeal. If, at a later stage and on a proper Motion, the House can criticise the decision to which he has come, it is not a matter which can be debated under Standing Order No. 9.
Mr. Woodburn: On a point of order. If this is a judicial function of the Attorney-General, how is the House entitled, first, to question him on it? Secondly, how can the Attorney-General be wholly judicial since he was also the prosecutor in the case? He called for a verdict, and it would seem that the court, having come to a decision, he has now vetoed the possibility of the verdict being questioned.
The Attorney-General: Further to that point of order, Sir. May I make it clear that I did not conduct the prosecution of the man? I appeared on the appeal before the full court.
Mr. Speaker: With regard to the first point raised by the right hon. Member for East Stirlingshire (Mr. Woodburn), I myself had the same doubts as he has expressed, but I find that in 1911 the then Attorney-General, Sir Rufus Isaacs, was asked a similar question by Mr. Bottomley—not the right hon. Member for Rochester and Chatham (Mr. Bottomley)—which was then allowed, and in face of that precedent I felt that I had to allow the Private Notice Question today. But I cannot allow a debate on it.
Mr. J. Griffiths: Further to the point of order. I gather from what you have said, Mr. Speaker, that the authority which the Attorney-General has been exercising is a burden laid upon him by this Parliament. If it is a burden laid upon him by Parliament, will you tell us how the House can raise the matter and call the Attorney-General to answer for the responsibility placed upon him in this way?
Mr. Speaker: There are all sorts of ways open to the right hon. Gentleman and the House, by Motion or otherwise, but it is not a question which can be raised on a Motion for the Adjournment of the House under Standing Order No. 9.
Mr. Silverman: If it is conceded, Mr. Speaker, that under some other procedure the House of Commons might debate this

1149
matter, then surely the only question for you to determine is whether it is of sufficient urgency and importance to displace the ordinary business of the day?
Mr. Speaker: That is not a proper statement of the Parliamentary procedure. There are many things which are important and urgent, but which cannot be raised under the Standing Order.
Mr. Hale: Further to the point of order, Mr. Speaker. Every Adjournment debate that has taken place on a Motion of this kind over the last two years has been in respect of a Ministerial responsibility placed by an Act of Parliament upon a Minister, including appointments to nationalised industries. I recall one such case. Here is a political responsibility placed upon the Attorney-General by Parliament, and it has been the subject of an important reply by Sir Rufus Isaacs, one of the most distinguished holders of the office of Attorney-General who later became Lord Chief Justice of England. May I say that that was in the case of Stinie Morrison, which has been the subject of controversy ever since, and that a great many people are still very dissatisfied that that case did not go to the House of Lords? In those circumstances, if this can be the subject of a Private Notice Question, is that not ipso facto a demonstration of the fact that it can be the subject of an Adjournment Motion?
Mr. Speaker: I do not think that it follows at all that because a Question may properly be asked by Private Notice it is necessarily a matter which can be debated on the Adjournment. I must adhere to my decision that this is part of the ordinary administration of the law.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Lord Privy Seal whether he has any statement to make on business?
The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): Yes, Sir. I have a short statement to make on business.
I hope that it will be convenient for the House today, at the end of business, to take the Committee and remaining stages
1150
of the Tanganyika Agricultural Corporation Bill so that it may be sent to another place for consideration. Tomorrow, I understand that the Motion relating to the Members' Fund, standing in the name of the hon. Member for Willesden, West (Mr. Viant) will be moved.

JUTE INDUSTRY (CONTROL)
The President of the Board of Trade (Sir David Eccles): With your permission, Mr. Speaker, I will make a statement about the jute industry.
As the House is aware, the jute industry is protected by a unique system of State trading. The Jute Control is the sole importer of the great bulk of jute goods supplied from overseas. It sells these goods at prices comparable with those at which an efficient cross section of the domestic industry can put equivalent goods on the market.
These arrangements, particularly as they affect hessians imported for making sacks, are increasingly operating against the interests of users of jute goods and of jute as an industrial material.
There are two reasons for this: first, the price of jute sacks has to be kept so high that agricultural and industrial users are penalised; secondly, because the price is so high, there is a growing substitution of other materials in the making of sacks.
This state of affairs is causing concern to those in this country who make and use jute sacks and also in India and Pakistan; it would not be realistic to allow it to continue. I have discussed the problem with both sides of the industry, and decided to alter the basis of the Control's selling prices for the principal types of hessians imported for making sacks.
The mark-up for these hessians is now about 40 per cent. This will be reduced to a fiat 30 per cent. from tomorrow morning.
As a result, sacks made out of imported jute cloth will be cheaper. That will affect the production of the home industry unless it can reduce its costs. But if no reduction in the price of sacks is made, the market for them will inevitably be lost to substitutes.

1151
The Government believe that the best prospect for Dundee and the surrounding area is increased diversification of industry. I am confident that firms in the jute industry will do their utmost to adapt their resources to changing conditions. The Government, for their part, will step up their efforts to get new industries to go to the Dundee area. Over the past ten years, the new factories which have been started in the area have provided nearly 6,000 new jobs; factory building now in progress will further increase the jobs available.
The Board of Trade will meet any reasonable request to provide additional factory space for leasing to firms already established and to others coming into the area for the first time, and, in appropriate cases, Treasury loans to such firms will be available under the Distribution of Industry Acts.
Mr. Jay: Can the President of the Board of Trade say why he has taken this action, which is likely to increase unemployment in Dundee, at a time when unemployment there is already high and tending to rise? As a major effort will clearly now be necessary, under the Distribution of Industry Acts, to get new employment into the area, does he think that it was wise to close the Board of Trade office in Dundee in the last month?
Sir D. Eccles: The fact is that the sack industry is being threatened by the increasing use of paper bags and it is, therefore, necessary to take some action. I am sure that we shall get a better response to a drive for diversifying industry in Dundee, because it is clearly seen what the problem is. I have already spoken to the Lord Provost of Dundee and he has offered willingly to co-operate with the Board of Trade in pressing this forward. I think that that is probably the best form of co-operative effort which we can have.
Mr. Strachey: Is the right hon. Gentleman aware that his announcement will be received with the utmost concern in Dundee and in the surrounding centres of the jute industry?
Mr. Nabarro: Not in Kidderminster.
Mr. Strachey: Kidderminster is not a centre of the jute industry.
1152
Is the right hon. Gentleman aware that his allusions to bringing new industries to Dundee show clearly that he is aware that his announcement must curtail the jute industry in Dundee? Can he answer my right hon. Friend's question and say why he should have just closed the Board of Trade office in Dundee, which brought new industries to the city? Is he further aware that his announcement will be felt with much concern in Dundee not only because of its immediate effect, but because everyone will interpret it as the beginning of the end of the steady prosperity which Dundee has enjoyed for the past fifteen years? Finally, is the right hon. Gentleman aware that he is sacrificing Dundee not to Tory principles, as I have heard them expounded, but to his own intensely doctrinaire laissez-faire Liberalism?
Sir D. Eccles: The right hon. Gentleman is wrong when he refers to "steady prosperity", because it is precisely because the prosperity is not now steady that we have to make a major effort to bring new industries to Dundee; and that is what we intend to do.
Mr. NabarroHaving regard to the constant complaints which have been made by certain sections of the carpet industry about the operations of Jute Control, particularly the effect upon jute yarn and hessian, over the whole of the post-war period, is my right hon. Friend aware that certain sections of the carpet manufacturing industries in all parts of the country will welcome his statement?
Mr. G. M. Thomson: Is the President of the Board of Trade aware that his announcement will be regarded as a breach of the undertakings given repeatedly by successive Governments to the jute industry, that the Jute Control would be reserved intact? Would it not have been better at least to have postponed consideration of this admittedly difficult aspect of the jute industry's problem until the Government were able to say what their general policy for jute would be in relation to the European Free Trade Area? Can the right hon. Gentleman say what estimate of unemployment to follow from his decision was made before he made his decision?
Sir D. Eccles: No estimate can be made and, indeed, it may well be found that the Dundee industry is able to produce

1153
sacks at this price. The fact remains that unemployment would increase unless we took some new steps. The protection of 40 per cent. or more which is afforded to the jute industry results in users turning over to substitute materials. That cannot be allowed to go on.
Mr. Kershaw: Is my right hon. Friend aware that in Dursley, in my constituency, a carpet factory, employing 70 people, was forced to close a short time ago due, among other things, to the very high cost of jute?
Mr. T. Fraser: The Minister said that before taking his decision he consulted both sides of the industry. From what he said one could be excused for supposing that there had been some consent from the industry. Did either side of the industry consent to the decision?
Sir D. Eccles: I am sorry if I gave that impression Of course, the industry did not consent, because, naturally, it would like to have very high and even higher protection than it now has. However, I informed both sides of the industry what I was doing and I have been talking to them for a very long time to try to find a way out of this difficulty.
Several Hon. Members rose—
Mr. Speaker: This matter can be debated tomorrow. I hope that hon. Members will wait until then.

RENT ACT (PRESCRIBED FORMS)
Miss Bacon: On a point of order. May I direct your attention, Mr. Speaker, to yesterday's OFFICIAL REPORT at column 954, where I am reported, when referring to Form G, as saying that the Labour Party Publications Department would have the forms ready in two days' time. That is not quite true. In fact, they are ready today.

BUSINESS OF THE HOUSE
Ordered,
That the Proceedings on Government Business and on any Private Business set down for consideration at Seven o'clock this evening by direction of the Chairman of Ways and Means be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House) and that, notwithstanding anything in Standing Order No. 7 (Time for taking Private Business), any such Private Business may be taken after Nine o'clock.—[Mr. R. A. Butler.]

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

    Clause 15.—(AMENDMENT AS TO CAPITAL ALLOWANCES IN RESPECT OF MACHINERY AND PLANT.)
    4.0 p.m.
    The Solicitor-General (Sir Harry Hylton-Foster): I beg to move, in page 10, line 32, at the end to insert "or may".
    The House knows that under the existing law initial or investment allowances are given in respect of the capital element of payments under a hire-purchase contract. The Clause is designed to prevent double investment or capital allowances, and does so in subsection (1) by making ownership of the machinery or plant at a material time a condition of entitlement to the allowance.
    It follows that a hire-purchase payment, pursuant to a hire-purchase contract, would not found a claim to entitlement to an allowance unless it was saved by a later subsection, and the subsection which deals with contracts where instalments are paid for machinery or plant—subsection (2)—defines the contract with which it is dealing as
    "a contract providing that he shall become the owner of the machinery or plant…"
    so that as the Clause now stands entitlement in respect of payments under hire-purchase contracts would not be possible. The object of the Amendment is to put that right.
    Mr. G. R. Mitchison: I suggest to the House that the Amendment is much too wide. If it is intended to cover only hire-purchase contracts it would be possible to frame it accordingly, but let us suppose that there is a contract which confers a bare option and no more. It seems to me that that would be a contract under Which a person—provided that he might become the owner of the machinery or plant—he would get the benefit of the allowance until the time when he ceased to be entitled to the benefit of the contract. I therefore suggest to the hon. and learned Member that in attempting to cover hire-purchase contracts the Government have covered something which goes far beyond that. If it is intended only to cover hire-purchase
    1156
    contracts proper and appropriate words ought to be used for that purpose and for that purpose only.
    The Solicitor-General: If I may speak again with the leave of the House, I should like to look at the point which the hon. and learned Member has raised with more care than I could at this moment. I cannot do it now, although I would desire to do so. Making a snap answer, as I must, I do not think that any peril arises as a result of including something like an option, because in that event, under the further provisions of the Clause and the appropriate Schedule, if the entitlement were not a proper one—a proper expenditure to secure the machinery and plant which would not reimburse the spender—it would be possible to withdraw the allowance under the relevant procedure.
    Mr. Mitchison: If I may speak again by leave of the House, this is a comparatively small matter but I feel certain that when the hon. and learned Member has time to consider it he will see that there are possibilities that an option—with or without other conditions attaching to it —which is not a hire-purchase contract, would entitle to the benefit of the concession people who really ought not to be entitled to it and who might be entitled to it for a much longer period than that covered by a hire-purchase contract.
    As the hon. and learned Member knows, there are limitations upon the period of hire-purchase contracts—some legal and others practical—and this, in my view, presents an opportunity for evasion which ought to be considered. At the same time, I appreciate the difficulty involved in raising this sort of matter at this stage. I would point out to my right hon. and hon. Friends that we have raised the point; we trust that it will have the serious attention of the Government and that, if necessary, it will be met by further legislation another year. At the moment, we should hardly feel justified in dividing upon it.
    Amendment agreed to.
    The Solicitor-General: I beg to move, in page 11, line 19, after "expenditure", to insert:
    "the claim, if not determined at that date, shall be determined without regard to this section, and".

    1157
    This Amendment deals with a different point. I was one that arose in our discussion in Committee. Because the Clause is one conforming to existing practice it involves an element of retrospection, and because it would not have been fair, in those circumstances, not to exempt claims that had been allowed before Budget day or were under appeal at that time, such claims were exempted from the retrospective operation of the Clause by the proviso to subsection (5).
    There ought to be included in that exemption—because it is indistinguishable on its merits—a claim which has been bona fide made before Budget day but which has not been determined one way or the other because there has not been time for those concerned to deal with it. The object of the Amendment is to include that type of case within the proviso.
    Mr. Mitchison: That sounds better.
    Amendment agreed to.

    Clause 22.—(DEFINITION OF OVERSEAS TRADE CORPORATION.)
    Mr. Roy Jenkins: I beg to move, in page 15, line 11, after "Kingdom" to insert" and in the Commonwealth".
    Mr. Speaker: It will be convenient if the House takes, at the same time, the immediately following Amendment, which has exactly the same purpose.
    Mr. Jenkins: Yes, Mr. Speaker.
    The Amendment is perhaps a slightly less technical one than those which have been moved by the Solicitor-General. It is designed to deal in a slightly different form with a point which we discussed to some extent in Committee. It will be within the recollection of the House that we moved a new Clause which would have been our substitute proposal for the exemption of overseas trade corporations, to extend the investment allowance to the Commonwealth, and the House will also recall that we put forward an Amendment to one of the Schedules which would have given specific preference to overseas trade corporations operating in the Commonwealth.
    The Amendment is a slight variation of these proposals. In effect, taken with the Amendment immediately following it, it confines the operation of the con-
    1158
    cession to overseas trade corporations to those which operate within the Commonwealth. The main reason why we have put this forward is that, as the Economic Secretary and the Financial Secretary know, at any rate, as our discussions upon Part IV have gone forward hon. Members on this side of the House have become increasingly doubtful about the merits of these proposals. They seem to us to be extravagant and unjustified.
    The proposal would limit the amount of the extravagance, and I should like to know from the Economic Secretary to what extent the loss of revenue involved in Part IV would be limited if this restricted Amendment were to be agreed to. Lt limits the concession in a way which also has a great deal to commend it, because it confines it to those companies operating within the Commonwealth and excludes those operating in other parts of the world.
    We have to some extent discussed in Committee the principles underlying the Amendment, but I do not think that the arguments are still the same. The Economic Secretary would probably agree that there have been some changes in the situation since the Committee stage. There appears to have been a good deal of deterioration in our general economic position. This is certainly the view which the Chancellor of the Exchequer appears to have fostered in a number of carefully publicised speeches. Certainly, I would have thought that everything which he has said in the past week would have made the Government more anxious, perhaps, than they were a few weeks ago to consider whether an expensive concession such as is involved in Part IV of the Bill is really justified at the present time.
    Secondly, we have the, position in which the Commonwealth Prime Ministers' Conference has met in London and has had, no doubt, fairly exhaustive discussions about economic matters as well as about other matters with which that conference is concerned. We have not had any very firm statement of their conclusions, but I think that there can be no doubt at all that one of the matters which they must have considered—certainly should have considered—with some concern, is that, judged by two very important tests, there has been a recent strong tendency for the Commonwealth and sterling area

    1159
    in particular to show signs of disintegration.
    The first test is the tendency of outer sterling area countries to hold their reserves not centrally in London but in their own banking institutions at home, and the second is the gradually shrinking share of our total trade which Commonwealth trade is occupying.
    Therefore, it seems particularly urgent that some measures should be taken, without in any way prejudicing one's attitude to the merits or demerits of the European Free Trade Area, to pull together these loosened economic links of the Commonwealth which have undoubtedly been becoming looser under this Government in recent years. There were, therefore, powerful arguments in Committee for some such limitation of the concession as we are, proposing in these two Amendments. Without question, those arguments have been reinforced, in the time which has gone by since the Committee stage, in the two ways which I have tried to outline.
    Is the Economic Secretary really sure that in this month of July, which is a month in which traditionally Chancellors' rather complacent and optimistic Budget expectations begin to look a bit doubtful, on all the facts available to him and to the Chancellor, that we can afford this very large concession to O.T.C.s operating throughout the world, which the Treasury Bench has failed so signally to justify in the course of our debates? Is he not certain that it would he better at this stage to claw back some of these concessions, somewhat to fortify the Revenue and to fortify the balance of payments, in view of the doubtful outlook both on the grounds of the balance of payments and of inflation at home which now presents itself and will continue to do so in the next few months?
    Does the right hon. Gentleman not think that if this were to be done it would be particularly desirable to do it by restricting the concessions to companies operating in the Commonwealth, by making a deliberate discrimination in this direction in order to draw Commonwealth economic links slightly tighter at a time when there is only too much indication that they are becoming disturbingly looser?
    Mr. Eric Fletcher: I beg to second the Amendment.
    1160
    As my hon. Friend the Member for Stechford (Mr. Roy Jenkins) has said, this is a new point. It is not a point which was specifically raised, at any rate in this form, in Committee and I would urge the Economic Secretary to pay attention to the argument which my hon. Friend has adduced in support of the Amendment.
    I agree with what my hon. Friend has said. I have always been very doubtful about the wisdom of these concessions which are made in Part IV of the Bill. I was prepared to look at them sympathetically. I listened to the arguments from the Treasury Bench. I appreciate the objective with which they are put forward, but I am bound to say that I have a great deal of apprehension about the way in which they will work out in practice. Anyhow, in Committee they were accepted.
    4. 15 p.m.
    As my hon. Friend has said, a good deal has happened since the Committee stage of the Bill. We have had two very disturbing speeches from the Chancellor of the Exchequer, but not disturbing enough. We have had the Prime Ministers' Conference, but we have not had a very satisfactory explanation of what was discussed at that Conference. I should like to ask the Economic Secretary whether this matter was discussed at the Prime Ministers' Conference. Did the Prime Ministers of the Commonwealth express any opinion about the merits of Part IV of this Bill with regard to overseas trade corporations?
    I would have expected that the Prime Ministers of the Commonwealth, if they were in favour of this at all, would have been in favour of limiting this to the Commonwealth countries. The whole object of Part IV is to enable the companies in the United Kingdom to develop certain overseas markets. There is an obvious limit on the amount which the economy of this country can afford to be extended in developing overseas markets, and I would have thought that it would have been much better to have confined these concessions to Commonwealth countries rather than to have extended them to non-Commonwealth countries.
    I should like the Government spokesman to tell us this. What is there left in the Commonwealth, in material terms,

    1161
    except the economic provisions which stem from Imperial Preference? Is there any good reason why these concessions should be extended beyond the Commonwealth? After all, what is our basic policy? In so far as we want to develop overseas trade and give greater opportunities and facilities for exploiting undeveloped parts of the world, is it our desire primarily to develop parts of the Commonwealth, or is it not?
    I am a great believer in the Commonwealth. If these provisions in Part IV are applied indiscriminately both to non-Commonwealth countries and to Commonwealth countries, we shall be losing one of the few remaining opportunities that are open to us of asserting and affirming our belief in the future of the Commonwealth. I think it is high time that we had a clear pronouncement on this subject from the Government. We do not know what their policy is with regard to European markets and European free trade. We have had a most ambiguous statement from the Government on their policy in that respect. Are they for European free trade, or are they for he Commonwealth?
    As far as I can follow Government pronouncements, they speak with one voice at the European sessions and with another voice at the Prime Ministers' Conference. It is high time we had a clear and definite statement of policy from the Government, particularly in a matter which touches the Commonwealth so directly as this matter does.
    It would be out of order for me, in seconding this Amendment, to repeat all the arguments which have been addressed against the overseas trade corporations, but in so far as we are now embarking upon large new concessions of a nature which may well give rise to much evasion and some injustice, I hope that the Government will see the wisdom of limiting these concessions in a sphere which would give great advantage to the Treasury and would, at the same time, affirm our determination to preserve these links with the Commonwealth wherever possible.
    The Economic Secretary to the Treasury (Mr. Nigel Birch): As the hon. Member for Stechford (Mr. Roy Jenkins) pointed out, we have discussed this point in various forms before. This is a new
    1162
    Amendment which we may owe to the industry and ingenuity of the hon. And learned Member for Kettering (Mr. Mitchison).
    The Amendment goes a good deal further than the last proposed new Clause we discussed, which only gave preferential rights to the Commonwealth but did not exclude foreign countries from the benefits of Part IV. The Amendment goes further by cutting out the foreign countries altogether.
    The main reason against the Amendment is that it is contrary to the recommendations of the Royal Commission, whose idea was based on the conception of jurisdiction. It was to be up to the country of residence of the company to tax, and to the controlling country to levy the tax when the profits were distributed. The hon. Member for Stechford asked how much of this concession would be for the benefit of companies operating in the Commonwealth. It is not very easy to estimate, but the best general estimate I can give is that about three-quarters of the benefit of this part of the Bill will go to the Commonwealth.
    The hon. Member for Islington, East (Mr. E. Fletcher) asked whether O.T.C.s were discussed at the Prime Ministers' Conference. It would be against precedent to disclose what went on at the Commonwealth Conference, but as most of this concession goes to Commonwealth countries we believe that it will be of great benefit to those countries.
    On the economic arguments for exclusion, I would point out that there are minerals and other materials, not found in great quantities in the Commonwealth, which we much require. Oil is a very obvious example, and so are some metals. I cited borax last time as an example. It would be a pity if we set off taxation in such a way that we were prevented—
    Mr. Harold Wilson: May I point out to the hon. Gentleman that there is oil in Canada? Does he not recall also that there was a lot of oil in Trinidad until 12 months ago?
    Mr. Birch: The right hon. Gentleman refers to Canada, but there are restrictions on the amount of money we can put into Canada to develop the oil there. The main sources of our oil are not in Trinidad or in the Commonwealth.
    Mr. Wilson: Not now.
    Mr. Birch: No, and they never were. This Amendment would be economically damaging. The reason we have brought in these provisions about O.T.C.s is that we believe they would be, in the medium-turn run, of great benefit to our balance of payments. We remain clear that that will be the effect of them.
    Both hon. Gentlemen who have spoken raised a number of wider economic issues, including that of the Free Trade Area. I should be out of order if I replied on that point because, as I understand, we are to have an economic debate at the instance of the Opposition, when, no doubt, all these subjects can be discussed at length. Perhaps I may sum up by saying that, basically for the same reasons that we gave before, we believe that the Amendment would be wrong and, therefore, we cannot accept it.
    Mr. E. Fletcher: The right hon. Gentleman said there was a limit to the amount we could invest in Canada. What is the limit?
    Mr. Birch: We are limited by our shortage of dollars.
    Mr. H. Wilson: We are getting quite used to these perfunctory replies from the right hon. Gentleman. It is a commentary on the turn of events that Government supporters should treat an important debate on Commonwealth economics in the way they are treating it this afternoon.
    All we get from the Government Front Bench is a very brief, offhand reply from the right hon. Gentleman, saying, "I have answered it all before, in Committee" This is a different Amendment. If it were not, it would not be in order. It raises a different point, and, in any case, both my hon. Friends have pointed out that there have been very serious developments in our internal position and in Commonwealth economic affairs since the Committee.
    During the debate today there have been about five Government supporters on the benches opposite, and one of them is now asleep. [Laughter.] He is still asleep. We can certainly say on this side of the House that we have shown a desire to develop Commonwealth trade whereas the speech of the right hon. Gentleman shows the same
    1164
    disregard for the need to develop the Commonwealth as he and the Government have shown over the past six years.
    I am prepared to concede right away that this Amendment is fundamental. If the right hon. Gentleman had described it as a "wrecking" Amendment I would have found it difficult to resist that description. It is wrecking in the sense that the Government's conception of O.T.C.s is very different from ours, and that if the Amendment were carried the whole of the Government's conception would disappear. The Government's idea is that any overseas trade corporation, wherever it may operate and whatever its business, other than shipping, banking, and so on, should benefit from the Clause. If there are to be tax concessions in this very critical year we would like to see them directed to the specific purpose of economic development which would be of direct benefit to the country.
    I do not want to raise the whole wide issue of overseas trade corporations at this stage. Perhaps there will be an opportunity to say something about that on the Third Reading of the Bill later this week. All of us on this side of the House have felt very concerned not merely that the Government should propose this year a new form of taxation or a new venture in British taxation methods, but should also drive a coach and horses through the conception that all taxpayers are equal irrespective of where their money is earned. This is a point which my right hon. and hon. Friends made in quoting from the Board of Inland Revenue's memorandum which the Government withheld from the House for far too long. It will be recalled that the Board of Inland Revenue raised very strong objections during the period of the Royal Commission to any idea which would discriminate between one taxpayer and another according to where the income was earned.
    The Government have done that. We have felt that it was up to the Government to make a very strong economic case for doing it, but they have not made that case. All we have had is very vague phrases like, "We want to encourage overseas trade," and when we asked what kind of overseas trade we have not had an answer from the right hon. Gentleman, as in the reply he gave to my hon. Friend the Member for Islington, East

    1165
    Mr. E. Fletcher), who asked about the limit on investment in Canada.
    In earlier debates on overseas trade corporations, the point was raised by my hon. Friend the Member for Oldham. West (Mr. Hale) that the principal beneficiaries of this kind of legislation would be the property-dealing companies in South America. That will not help the economic position of this country in the slightest. In so far as it reduces the tax revenue of this country it will, in the present inflationary situation, do positive harm, and for no positive good at all.
    If there is to be any special concession it should be given for Commonwealth development. I agree with the right hon. Gentleman that we have all made it very plain—my hon. Friend the Member for Stechford (Mr. Roy Jenkins) has made it plain on a number of occasions—that it is pointless and hypocritical to talk about Commonwealth development unless we are able to create the necessary surplus of real resources to make that development possible. The failure of the Government, as exemplified in their most recent demands about the economic situation, shows that the position is even worse than some hon. Members thought two or three months ago.
    4.30 p.m.
    Nevertheless, all of us feel that whatever can be made available in surpluses should be directly related to the economic benefit of this country and the Commonwealth. What gain is there to this country to be expanding the activities or to be making tax free the activities of property dealing companies in South America? We have not had an answer from the right hon. Gentleman on that at any stage. It is part of the philosophy of the Government that any company operating in the City of London is equally worth while. That is the whole basis of their failure to control inflation, because they will not distinguish between essential and unessential activities of companies in this country. If this is true of companies in this country, how much more true is it of companies overseas?
    We have tabled this Amendment in an attempt to confine the benefit for overseas trade corporations to Commonwealth development. We had a brief debate about this in Committee, on a new
    1166
    Clause. We debated it for only a few minutes. To judge from HANSARD the debate started about nine minutes past 11 and finished 16 or 17 minutes past 11. That was a short time for the Committee to spend on this very important question of Commonwealth trade.
    During that time the Commonwealth Prime Ministers' Conference was being held. We have not had a report to the House about that Conference. The official communiqué said nothing at all. It was just a bunch of platitudes. The Prime Minister went on the air with his great panache and flair for making something out of nothing, but anyone who saw his television performance, or heard the broadcast, could not believe that anything whatever came out of that Conference except that it was quite clear that Her Majesty's Ministers—I do not know whether the Economic Secretary was one—were trying to sell to the Prime Ministers the idea of the European Free Trade Area.
    We have drawn this to the attention of the Government many times. They must realise that the sterling area, which is one of the main economic and material links of the Commonwealth, is changing in its nature very seriously and very rapidly indeed. The fact that not only a number of Commonwealth countries ran down sterling balances during the Suez crisis, but that now Ghana and, shortly, Malaya are to be independent and will have under their control the spending of their sterling balances, whether on sterling goods or dollar goods, means that a very serious strain is being put on the functioning of the sterling area.
    This should have been an occasion for Her Majesty's Government to discuss with the Prime Ministers of other Commonwealth countries every possible means of encouraging development in the Commonwealth, but to judge from inspired reports or leakages from the Conference, all that happened was that the Chancellor of the Exchequer said that the economic position of the sterling area was "set fair", whatever that may mean. I suppose he thought that the economic position of this country was "set fair", until the Chancellor of the Duchy of Lancaster blew the story to the newspapers last week. Secondly, the right hon. Gentleman said that we had no

    1167
    surplus whatever for Commonwealth development.
    Serious statements have been made by Commonwealth Ministers. The New Zealanders went away empty-handed. They came with proposals for increasing Commonwealth trade, but what happened? The Government said, "We are not prepared to interfere with laissez faire private buying and the free functioning of commodity markets" and the rest. The Australians were so infuriated about the refusal of the Government to do anything for Commonwealth trade that, last November, in effect they denounced the Ottawa Agreements and now, finding that the Government are prepared to do nothing to encourage Anglo-Australian trade, they have done this deal with Japan.
    We cannot blame them for doing that. I do not know what representations Her Majesty's Government made to them about the Australia-Japan Agreement. Frankly, I do not think it lay in their mouths to say very much after their refusal to develop Commonwealth trade.
    Here we have a situation in which, for example, the Finance Minister of Ghana —in his Budget speech, which I hope the Economic Secretary has studied, as it is very significant—said, "We shall have to spend more of our sterling balances on dollar goods." Why was that? It was because we are not doing enough to ensure Ghana's economic future, because the Government refuse to allow the Commonwealth Development Corporation to function in the new, independent countries, because, owing to their desire to allow private markets to function, they refused to do anything about stabilising cocoa prices, because they cannot control inflation in this country sufficiently to produce a surplus for aiding Commonwealth production and, owing to inflation, are becoming less and less competitive in tenders for the supply of capital for some of these areas.
    All this adds up to a case for confining to Commonwealth activities what surplus we have for development. I would go further and say that so far as we can give a priority to Commonwealth activities, they should be worthwhile economic Commonwealth activities. We do not want this Amendment used for
    1168
    the purpose of making tax-free the activities of British brewery companies making outlets for their products in Australia, South Africa, or elsewhere. We should like to see it used to raise the living standards of people in Commonwealth countries and in developing the supplies of essential raw materials and foodstuffs to this country.
    Of course, it is all in keeping with the economic philosophy of this Government to turn down this proposal. If we were to develop Commonwealth foodstuffs and raw materials, there would be no market for these things in this country because all the time the Government are sacrificing Commonwealth suppliers and Commonwealth trade in the interests of traders in other parts of the world. It was only a brief debate we had in Committee, but I ask leave once again to ram home these essential and important figures about Commonwealth trade, which were deployed on that occasion.
    The Conservative Party fought the 1951 and 1955 Elections on an Empire policy. "Britain strong and free" we were told in 1951. They were going to develop Empire trade. We were never so flamboyant about these things in our time; we did it without so much talking about it. During our period of office from 1945 to 1951, we said we would increase Commonwealth trade, and we did so. We reduced our dependence on the dollar area by expanding our dependence on Commonwealth sources of supply. We restricted less essential dollar imports and expanded Commonwealth production. We were able to do that, partly by interfering with trade channels, but mainly by bulk buying and long-term contracts.
    I have given the figures before. I commend them to Treasury Ministers; obviously, they have not realised their significance. Between 1948 and 1952, imports from the sterling area into this country rose by 25 per cent., while imports from the dollar area were cut by 6 per cent. Those were figures we could be proud about in a very difficult time when it was difficult to restore production in Commonwealth countries. In the very much easier circumstances of the last few years, from 1953 to 1956, under the Government of hon. Members opposite, imports from the sterling area have fallen by 2 per cent. and imports from the

    1169
    dollar area have risen by 30 per cent. That makes this country much more vulnerable to dollar crises and balance of payment crises, twelve years after the war.
    Only a week or two ago the Government announced a further liberalisation of imports from the United States. They have crippled the policy of getting Commonwealth countries to sell goods to this country by winding up the bulk buying arrangements that we had. When we were in power we had the Raw Cotton Commission, for example, by which Commonwealth and Colonial countries felt confident in planning ahead and developing their production of raw cotton because they knew that there would he an assured market in this country.
    But Her Majesty's present Government went in for the farce of reopening the Liverpool Cotton Market —an utter farce, as everyone now realises. It is barely functioning at all. The result of leaving the trade in raw cotton to the so-called free functioning and free market system has been to discourage imports from Commonwealth areas.
    The President of the Board of Trade, last October, gave some very serious figures showing the declining percentage of raw cotton coming from the Commonwealth areas. We want 4o redress this. There is not very much hope of doing it while this Government are in power, because their heart is not in the job of Commonwealth development and because they will never, as the Trinidad oil lease showed last year, sacrifice their ideological views and the vested interests which they support to their so-called declared belief in Commonwealth trade. It is because of that that we have tabled this Amendment. We are very unhappy about the overseas trade corporations in any event, but if there must be overseas trade corporations let their activities be confined to the Commonwealth areas and, so far as possible, confined to essential investment and development in the Commonwealth.
    I hope that the Economic Secretary, who made a very sketchy and perfunctory reply this afternoon, will not leave this debate where it now stands. I hope that he will say something a little more positive than he has so far said. I am
    1170
    sorry that the hon. Member for Southgate (Sir B. Baxter), who has just come in to the Chamber, was not here to listen to the debate, which has been very one-sided, about a subject which I know is very dear to his heart—the development of Commonwealth trade. If he had been here, he would have been shocked to hear the reply of the Economic Secretary.
    Sir Beverley Baxter: May I say in excuse, that I was receiving some visitors from the Commonwealth, which interfered with my being here?
    Mr. Wilson: I am quite sure that the hon. Member had very good reasons for not being here. I can only say that while he was receiving those visitors from the Commonwealth and telling them, as I am sure he would in all sincerity, how keen he was to strengthen the links with the Commonwealth, the Government he supports, and, for all I know, still supports, might have been able to say something worthy of him on this subject of the Commonwealth.
    Mr. Donald Chapman: The Economic Secretary missed a wonderful opportunity today. We are coming towards the end of our debates on overseas trade corporations and he ought to have struck a note to the whole country about the things that it should do in the Commonwealth. The right hon. Gentleman's usual sort of dry-as-dust replies came over in the usual two-and-a-half or three minutes. Perhaps, at this stage, it is a little difficult for anyone to get any inspiration for these overseas trade corporations from anything which he has ever said, but here was an opportunity for him to say, "We are doing something in the Commonwealth. Her Majesty's Government have thought about this. Here are the great benefits we are offering overseas trade corporations and these are the sort of things that we want to put over."
    4.45 p.m.
    This could have been an opportunity for the right hon. Gentleman to make an appeal to investors to do their job in the Commonwealth. It is not often that I find that I have anything in common with the Daily Express, but one thing that one learns in this House is that truth is many-sided. While the present Government are in power there

    1171
    is more than a grain of truth in the Daily Express campaign that the Government has an anti-Commonwealth bias. It could have been no more exemplified than in the speech that we have heard today from the right hon. Gentleman.
    I am surprised that there has not been any comment on the piece of news which is in this newspaper today, that Mr. Norman Manley is to try to raise £8 million in order to bring industry into Jamaica. That is a very praiseworthy objective. If the right hon. Gentleman could have done no more, he could have used the cue on that piece of news this morning to give encouragement to this kind of thing in the Commonwealth.
    Mr. H. Wilson: It does not matter to him.
    Mr. Chapman: I agree that these things perhaps do not matter to the right hon. Gentleman. I think that there was something extremely significant in what Mr. Manley said.
    When he was being interviewed about this proposal to raise £8 million to bring industry to Jamaica, he was asked, "What about nationalisation? You have a Socialist Government out there. Are you not afraid that some of the industries that may be established may be nationalised?" He said, very bluntly and very simply, "You cannot nationalise nothing. We have nothing in Jamaica; so what is all the worry about?" That is very significant.
    It is the sort of thing that the right hon. Gentleman ought to have been saying. He ought to have been saying, "That is a commentary on the way in which the Commonwealth has been let down in the last few years. That is the reason why Jamaicans are coming to England in extraordinary numbers. There is no industry over there to raise the standard of living. "The question which we pose bluntly from this side to the right hon. Gentleman is this: which comes first, the sort of property dealing which has been mentioned by the hon. Member for Oldham, West (Mr. Hale), or development in Jamaica. Is Mr. Norman
    Manley to be left with the consolation that he must compete in the British market for funds for Jamaica against these other less worthwhile things in the hope that one or two will think that Commonwealth investment is better than quick profits in property in South America?
    There is a question of priorities in all this. I think that we are entitled to a little more interest in the feelings of the Commonwealth than the right hon. Gentleman has given. My right hon. Friend mentioned the question of the sale of Trinidad oil. The type of question which bothers us on this side of the Committee is, how many more Trinidad Oils will be sold over the next two or three years. How many more will the Government sell? I met a man yesterday who told me that there is one bit of Trinidad which we managed to buy back from the Americans, when a quick deal was slipped through in the time of the Labour Government, in which the Trinidad Asphalt Company was bought back from the Americans after a great to-do and some obstruction. That is the sort of thing which we should be doing. We should be encouraging money to be sent to these areas to buy back some of the little America, some of the possessions which are being sold by the Government to the Americans in areas such as Trinidad.
    I was very disappointed by the right hon. Gentleman's reply. I should have thought that today we could have had some encouragement for this kind of activity in the Commonwealth. I hope the right hon. Gentleman will make another reply and will tell us that the Commonwealth will be put first in all these projects which will result from this concession to overseas trade corporations. I hope he will tell us, as we are anxious to hear, that these projects will be in the Commonwealth and not any-old-where.
    Question put, That these words be there inserted in the Bill:—
    The House divided: Ayes 218, Noes 271.

    Division No. 170.]

    AYES

    [4.49 p.m.

    Ainsley, J. W.

    Allen, Scholefield (Crewe)

    Bellenger, Rt. Hon. F. J.

    Albu, A. H.

    Awbery, S. S.

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

    Allaun, Frank (Salford, E.)

    Bacon, Miss Alice

    Benson, G.

    Allen, Arthur (Bosworth)

    Balfour, A.

    Beswick, Frank

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Holmes, Horace

    Prentice, R. E.

    Blackburn, F.

    Houghton, Douglas

    Price, J. T. (Westhoughton)

    Blenkinsop, A.

    Howell, Charles (Perry Barr)

    Price, Philips (Gloucestershire, W.)

    Blyton, W. R.

    Hoy, J. H.

    Probert, A. R.

    Boardman, H.

    Hubbard, T. F.

    Randall, H. E.

    Botlomley, Rt. Hon. A. G.

    Hughes, Cledwyn (Anglesey)

    Rankin, John

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

    Hughes, Emrys (S. Ayrshire)

    Redhead, E. C.

    Bowles, F. G.

    Hughes, Hector (Aberdeen, N.)

    Reeves, J.

    Boyd, T. C.

    Hunter, A. E.

    Reid, William

    Braddock, Mrs. Elizabeth

    Hynd, H. (Accrington)

    Rhodes, H.

    Brockway, A. F.

    Hynd, J. B. (Attercliffe)

    Robens, Rt. Hon. A.

    Broughton, Dr. A. D. D.

    Irving, Sydney (Dartford)

    Roberts, Albert (Normanton)

    Brown, Rt. Hon. George (Belper)

    Isaacs, Rt. Hon. G. A.

    Roberts, Goronwy (Caernarvon)

    Brown, Thomas (Ince)

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

    Robinson, Kenneth (St. Pancras, N.)

    Burke, W. A.

    Jeger, George (Goole)

    Ross, William

    Butler, Herbert (Hackney, C.)

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

    Royle, C.

    Butler, Mrs. Joyce (Wood Green)

    Jenkins, Roy (Stechford)

    Shinwell, Rt, Hon. E.

    Carmichael, J.

    Johnson, James (Rugby)

    Short, E. W.

    Castle, Mrs. B. A.

    Johnston, Douglas (Paisley)

    Silverman, Julius (Aston)

    Champion, A. J.

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

    Silverman, Sydney (Nelson)

    Chapman, W. D.

    Jones, David (The Hartlepools)

    Simmons, C. J. (Brierley Hill)

    Chetwynd, C. R.

    Jones, Elwyn (W. Ham, S.)

    Skeffington, A. M.

    Clunie, J.

    Jones, Jack (Rotherham)

    Slater, Mrs. H. (Stoke, N.)

    Collick, P. H. (Birkenhead)

    Jones, J. Idwal (Wrexham)

    Slater, J. (Sedgefield)

    Collins, V. J. (Shoreditch & Finsbury)

    Jones, T. W. (Merioneth)

    Smith, Ellis (Stoke, S.)

    Cove, W. G.

    Kenyon, C.

    Snow, J. W.

    Craddock, George (Bradford, S.)

    King, Dr. H. M.

    Soskice, Rt. Hon. Sir Frank

    Cronin, J. D.

    Lawson, G. M.

    Sparks, J. A.

    Cullen, Mrs. A.

    Ledger, R. J.

    Steele, T.

    Dalton, Rt. Hon. H.

    Lee, Frederick (Newton)

    Stewart, Michael (Fulham)

    Darling, George (Hillsborough)

    Lee, Miss Jennie (Cannock)

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

    Davies, Ernest (Enfield, E.)

    Lewis, Arthur

    Stonehouse, John

    Davies, Stephen (Merthyr)

    Lipton, Marcus

    Strachey, Rt. Hon. J.

    Deer, G.

    Logan, D. G.

    Strauss, Rt. Hon. George (Vauxhall)

    Delargy, H. J.

    Mabon, Dr. J. Dickson

    Summerskill, Rt. Hon. E.

    Dodds, N. N.

    MacColl, J. E.

    Sylvester, G. O.

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

    McInnes, J.

    Taylor, Bernard (Mansfield)

    Edelman, M.

    McKay, John (Wallsend)

    Thomas, George (Cardiff)

    Edwards, Rt. Hon. John (Brighouse)

    MacPherson, Malcolm (Stirling)

    Thomas, Iorwerth (Rhondda, W.)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mahon, Simon

    Thomson, George (Dundee, E.)

    Edwards, Robert (Bilston)

    Mallalieu, E. L. (Brigg)

    Thornton, E.

    Edwards, W. J. (Stepney)

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

    Tomney, F.

    Evans, Albert (Islington, S. W.)

    Mann, Mrs. Jean

    Ungoed-Thomas, Sir Lynn

    Fernyhough, E.

    Marquand, Rt. Hon. H. A.

    Usborne, H. C.

    Flenhurgh, W.

    Mason, Roy

    Viant, S. P.

    Finch, H. J.

    Mayhew, C. P.

    Watkins, T. E.

    Fletcher, Eric

    Mellish, R. J.

    Weitzman, D.

    Forman, J. C.

    Messer, Sir F.

    Wells, Percy (Faversham)

    Fraser, Thomas (Hamilton)

    Mikardo, fan

    Wells, William (Walsall, N.)

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

    Mitchison, G. R.

    Wheeldon, W. E.

    George, Lady Megan Lloyd (Car'then)

    Monslow, W.

    White, Mrs. Eirene (E. Flint)

    Gibson, C. W.

    Moody, A. S.

    White, Henry (Derbyshire, N. E.)

    Cooch, E. G.

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

    Wilkins, W. A.

    Gordon Walker, Rt. Hon. P. C.

    Moss, R.

    Willey, Frederick

    Greenwood, Anthony

    Moyle, A.

    Williams, David (Neath)

    Grenfell, Rt. Hon. D. R.

    Mulley, F. W.

    Williams, Rev. Llywelyn (Ab'tillery)

    Grey, C. F.

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Williams, Ronald (Wigan)

    Griffiths, David (Rother Valley)

    Oliver, G. H.

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

    Griffiths, Rt. Hon. James (Llanelly)

    Oram, A. E.

    Williams, W. R. (Openshaw)

    Griffiths, William (Exchange)

    Orbach, M.

    Williams, W. T. (Barons Court)

    Hale, Leslie

    Oswald, T.

    Willis, Eustace (Edinburgh, E.)

    Hamilton, W. W.

    Owen, W. J.

    Wilson, Rt. Hon. Harold (Huyton)

    Hannan, W.

    Padley, W. E.

    Woodburn, Rt. Hon. A.

    Harrison, J. (Nottingham, N.)

    Paget, R. T.

    Woof, R. E.

    Hastings, S.

    Pannell, Charles (Leeds, W.)

    Yates, V. (Ladywood)

    Hayman, F. H.

    Parkin, B. T.

    Zilliacus, K.

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

    Paton, John

    Herbison, Miss M.

    Pearson, A.

    TELLERS FOR THE AYES:

    Hobson, C. R. (Keighley)

    Peart, T. F.

    Mr. John Taylor and Mr. Rosen.

    Holman, P.

    Pentland, N.

    NOES

    Agnew, Sir Peter

    Atkins, H. E.

    Biggs-Davison, J. A.

    Aitken, W. T.

    Baldock, Lt.-Cmdr. J. M.

    Birch, Rt. Hon. Nigel

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

    Baldwin, A. E.

    Bishop, F. P.

    Alport, C. J. M.

    Barlow, Sir John

    Body, R. F.

    Amery, Julian (Preston, N.)

    Barter, John

    Boothby, Sir Robert

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Baxter, Sir Beverley

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

    Arbuthnot, John

    Beamish, Maj. Tufton

    Boyle, Sir Edward

    Armstrong, C. W.

    Bell, Philip (Bolton, E.)

    Braine, B. R.

    Ashton, H.

    Bennett, F. M. (Torquay)

    Braithwaite, Sir Albert (Harrow, W.)

    Astor, Hon. J. J.

    Bidgood, J. C.

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

    1174

    1175

    Brooman-White, R. C.

    Hill, John (S. Norfolk)

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

    Browne, J. Nixon (Craigton)

    Hinchingbrooke, Viscount

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

    Bullus, Wing Commander E. E.

    Holland-Martin, C. J.

    Osborne, C.

    Burden, F. F. A.

    Holt, A. F.

    Page, R. G.

    Butcher, Sir Herbert

    Hope, Lord John

    Pannell, N. A. (Kirkdale)

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

    Hornby, R. P.

    Partridge, E.

    Campbell, Sir David

    Hornsby-Smith, Miss M. P.

    Pickthorn, K. W. M.

    Carr, Robert

    Horobin, Sir Ian

    Pike, Miss Mervyn

    Cary, Sir Robert

    Horsbrugh, Rt. Hon. Dame Florence

    Pilkington, Capt. R. A.

    Channon, Sir Henry

    Howard, Hon. Greville (St. Ives)

    Pitman, I. J.

    Chichester-Clark, R.

    Howard, John (Test)

    Pitt, Miss E. M.

    Churchill, Rt. Hon. Sir Winston

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

    Pott, H. P.

    Cole, Norman

    Hughes Hallett, Vice-Admiral J.

    Powell, J. Enoch

    Conant, Maj. Sir Roger

    Hughes-Young, M. H. C.

    Price, David (Eastleigh)

    Cooper, A. E.

    Hulbert, Sir Norman

    Price, Henry (Lewisham, W.)

    Cordeaux, Lt.-Col. J. K.

    Hurd, A. R.

    Prior-Palmer, Brig. O. L.

    Corfield, Capt. F. V.

    Hutchison, Michael Clark (E'b'gh, S.)

    Raikes, Sir Victor

    Craddock, Beresford (Spelthorne)

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

    Ramsden, J. E.

    Crosthwaite-Eyre, Col. O. E.

    Hyde, Montgomery

    Rawlinson, Peter

    Crowder, Sir John (Finchley)

    Hylton-Foster, Rt. Hon. Sir Harry

    Redmayne, M.

    Currie, G. B. H.

    Irvine, Bryant Godman (Rye)

    Remnant, Hon. P.

    Dance, J. C. G.

    Jenkins, Robert (Dulwich)

    Renton, D. L. M.

    Davidson, Viscountess

    Jennings, J. C. (Burton)

    Ridsdale, J. E.

    Davies. Rt. Hn. Clement (Montgomery)

    Johnson, Dr. Donald (Carlisle)

    Rippon, A. G. F.

    Digby, Simon Wingfield

    Johnson, Eric (Blackley)

    Robertson, Sir David

    Dodds-Parker, A. D.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Robinson, Sir Roland (Blackpool, S.)

    Donaldson, Cmdr. C. E. McA.

    Joseph, Sir Keith

    Rodgers, John (Sevenoaks)

    Doughty, C. J. A.

    Joynson-Hicks, Hon. Sir Lancelot

    Roper, Sir Harold

    Drayson, G. B.

    Kerby, Capt. H. B.

    Ropner, Col. Sir Leonard

    du Cann, E. D. L.

    Kerr, Sir Hamilton

    Russell, R. S.

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

    Kershaw, J. A.

    Sandys, Rt. Hon. D.

    Eden, J. B. (Bournemouth, West)

    Kirk, P. M.

    Schofield, Lt.-Col. W.

    Elliot, Rt. Hon. W. E. (Kelvingrove)

    Lagden, G. W.

    Sharples, R. C.

    Elliott, R. W. (N'castle upon Tyne, N.)

    Lambton, Viscount

    Shepherd, William

    Emmet, Hon. Mrs. Evelyn

    Lancaster, Col. C. G.

    Smithers, Peter (Winchester)

    Errington, Sir Eric

    Langford-Holt, J. A.

    Smyth, Brig. Sir John (Norwood)

    Erroll, F. J.

    Leather, E. H. C.

    Speir, R. M.

    Finlay, Graeme

    Leavey, J. A.

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

    Fisher, Nigel

    Leburn, W. G.

    Stanley, Capt. Hon. Richard

    Fletcher-Cooke, C.

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

    Stevens, Geoffrey

    Fort, R.

    Legh, Hon. Peter (Petersfield)

    Steward, Harold (Stockport, S.)

    Fraser, Hon. Hugh (Stone)

    Lindsay, Hon. James (Devon, N.)

    Steward, Sir William (Woolwich, W.)

    Fraser, Sir Ian (M'ombe & Lonsdale)

    Linstead, Sir H. N.

    Storey, S.

    Freeth, Denzil

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

    Stuart, Rt. Hon. James (Moray)

    Galbraith, Hon. T. G. D.

    Longden, Gilbert

    Studholme, Sir Henry

    Gammans, Lady

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

    Summers, Sir Spencer

    Garner-Evans, E. H.

    Lucas-Tooth, Sir Hugh

    Sumner, W. D. M. (Orpington)

    George, J. C. (Pollok)

    McAdden, S. J.

    Taylor, Sir Charles (Eastbourne)

    Gibson-Watt, D.

    Macdonald, Sir Peter

    Taylor, William (Bradford, N.)

    Glover, D.

    Mackeson, Brig. Sir Harry

    Teeling, W.

    Glyn, Col. R.

    Mackie, J. H. (Galloway)

    Temple, John M.

    Godber, J. B.

    McLaughlin, Mrs. P.

    Thomas, P. J. M. (Conway)

    Gomme-Duncan, Col. Sir Alan

    Maclay, Rt. Hon. John

    Thompson, Kenneth (Walton)

    Goodhart, Philip

    Maclean, Sir Fitzroy (Lancaster)

    Thorneycroft, Rt. Hon. P.

    Gower, H. R.

    McLean, Neil (Inverness)

    Thornton-Kemsley, C. N.

    Graham, Sir Fergus

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

    Tilney, John (Wavertree)

    Grant, W. (Woodside)

    Macmillan, Rt. Hn. Harold (Bromley)

    Turner, H. F. L.

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

    Macpherson, Niall (Dumfries)

    Turton, Rt. Hon. R. H.

    Green, A.

    Maddan, Martin

    Tweedsmuir, Lady

    Cresham Cooke, R.

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

    Vane, W. M. F.

    Grimond, J.

    Markham, Major Sir Frank

    Vaughan-Morgan, J. K.

    Grimston, Hon. John (St. Albans)

    Marlowe, A. A. H.

    Vickers, Miss Joan

    Grimston, Sir Robert (Westbury)

    Marples, Rt. Hon. A. E.

    Wade, D. W.

    Grosvenor, Lt.-Col. R. G.

    Marshall, Douglas

    Wakefield, Edward (Derbyshire, W.)

    Gurden, Harold

    Mathew, R.

    Wakefield, Sir Wavell (St. M'lebone)

    Hall, John (Wycombe)

    Maude, Angus

    Walker-Smith, Rt. Hon. Derek

    Hare, Rt. Hon. J. H.

    Maudlins, Rt. Hon. R.

    Wall, Major Patrick

    Harris, Reader (Heston)

    Mawby, R. L.

    Ward, Rt. Hon. G. R. (Woncester)

    Harrison, A. B. C. (Maldon)

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

    Ward, Dame Irene (Tynemouth)

    Harrison, Col. J. H. (Eye)

    Medlicott, Sir Frank

    Waterhouse, Capt. Rt. Hon. C.

    Harvey, Sir Arthur Vere (Macclesfd)

    Moore, Sir Thomas

    Watkinson, Rt. Hon. Harold

    Harvey, Ian (Harrow, E.)

    Mott-Radclyffe, Sir Charles

    Webbe, Sir H.

    Harvey, John (Walthamstow, E.)

    Nabarro, G. D. N.

    Whitelaw, W. S. I.

    Hay, John

    Nairn, D. L. S.

    Williams, Paul (Sunderland, S.)

    Heald, Rt. Hon. Sir Lionel

    Neave, Airey

    Williams, R. Dudley (Exeter)

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

    Nicholls, Harmar

    Wills, G. (Bridgwater)

    Henderson, John (Cathcart)

    Nicholson, Godfrey (Farnham)

    Wood, Hon. R.

    Henderson-Stewart, Sir James

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

    Woollam, John Victor

    Hicks-Beach, Maj. W. W.

    Oakshott, H. D.

    Yates, William (The Wrekin)

    Hill, Rt. Hon. Charles (Luton)

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

    Hill, Mrs. E. (Wythenshawe)

    Orr, Capt. L. P. S.

    TELLERS FOR THE NOES:

    Mr. Barber and Mr. Bryan.

    Mr. H. Wilson: On a point of order. I beg to ask leave to move, "That further consideration of the Bill be now adjourned."
    The reason that I seek your leave to do so, Sir Gordon, is the scandalous way in which the House has been treated by the Government in this very important debate on the Commonwealth, which has just ended.
    There are other Amendments on the Notice Paper relating to Commonwealth trade. In my relatively short period of twelve years in the House, I cannot remember a debate on so important a subject as Commonwealth trade and the whole of Commonwealth economics when we had only about a two-minute, perfunctory reply from the Minister; when the Secretary of State for the Colonies was neither here nor represented; when the Secretary of State for Commonwealth Relations was not represented; when the Prime Minister and the Chancellor of the Duchy of Lancaster, who bear a very heavy responsibility in respect of the declining position of the sterling area, were obviously within reach but not in the House; and when the whole debate was treated with contempt.

    (3) A company which has never been an Overseas Trade Corporation may, by notice having effect as from the beginning of the first period in which it would otherwise qualify as an Overseas Trade Corporation, elect not to qualify as an Overseas Trade Corporation.

    5

    (4) A company which would, apart from this subsection, qualify as an Overseas Trade Corporation in the period of twelve months beginning with the sixth day of April in any year, and which has so qualified in some previous period, may by notice apply to the Commissioners of Inland Revenue for a direction that as from the sixth day of April in that year the company shall not qualify as an Overseas Trade Corporation and the Commissioners shall, within such period after the end of the said period of twelve months

    10

    as may be prescribed, give such a direction unless—

    15

    (a) relief would, on the footing that the company did not so qualify in the said period of twelve months, be allowable under the Income Tax Acts in respect of a loss sustained by the company in the said period of twelve months in carrying on a trade, or in respect of capital allowances falling to be made in charging the profits or gains of such a trade, for the year of assessment comprised in the said period of twelve months against income tax charged on income of the company which, if it qualified as an Overseas Trade Corporation, would be investment income, and

    20

    (b) it appears to the Commissioners that that relief, together with any corresponding reduction of the liability of the company to the profits tax, is the sole or main benefit which the company will derive from the direction so far as it relates to the said period of twelve months.

    25

    (5) A company which is aggrieved by the refusal of the Commissioners to give a direction under the last foregoing subsection may, by notice in writing given to the Commissioners within thirty days from the date on which notice of the refusal is given to the company, require their application under that subsection to be heard and determined by the Special Commissioners, and the Special Commissioners shall hear and determine the application in like manner as an appeal made to them against an assessment to income tax under Schedule D.

    30

    All the provisions of the Income Tax Acts relating to such an appeal (including the provisions relating to the statement of a case for the opinion of the High Court on a point of law) shall apply accordingly with any necessary modifications.

    We realise that the Government are aware that they can impose their will on this House by calling up hon. Members to vote on the question of overseas trade corporations, but in view of all the declared professions of the Conservative Party about the desire to increase Commonwealth trade we feel that the Government have treated the House with the very greatest contempt in their attitude to these very important Amendments. Therefore, Mr. Deputy-Speaker, I beg to move, "That further consideration of the Bill be now adjourned" until the Government can be properly represented and these subjects treated with the attention that they deserve.
    Mr. Deputy-Speaker (Sir Gordon Touche): I cannot accept that Motion.
    Amendments made: In page 15, line 17, at beginning insert "Provided that."
    In line 17, leave out "the foregoing" and insert "this".—[Mr. Powell.]
    5.0 p.m.
    The Financial Secretary to the Treasury (Mr. J. Enoch Powell): I beg to move, in page 15, line 21, at the end to insert:

    35

    (6) An election made or direction given under the foregoing provisions of this section shall apply as respects all periods after the time as from which it has effect but the company may by notice having effect as from the sixth day of April in any year revoke the election or require the Commissioners to withdraw their direction; and any notice under the foregoing provisions of this section shall be given in the prescribed manner and within the prescribed time.

    This is the Amendment dealing with options to enjoy or not to enjoy overseas trade corporation status which my right hon. Friend undertook to table at this stage of the Bill. The first subsection deals with the case of a company which has never been an overseas trade corporation, and gives it the option not to qualify for that status as long as it desires; but, under subsection (6) it can, at will, take on that status for the first time. That, I think, is the simpler of the two cases which are covered by the Amendment.
    In subsection (4) we give to a company which has qualified as a corporation of this type but wishes to cease to be so qualified, the opportunity to do so. It cannot do that, however, except by virtue of a direction by the Commissioners of Inland Revenue, and the Commissioners cannot give that direction if they are satisfied that, as a result, the company would enjoy relief by being able to set off trading losses and capital allowances against income against which such allowances could not, if the company was an overseas trade corporation, be so set off, and are also satisfied that that benefit is the sole or main benefit which the company would derive from ceasing to qualify as an overseas trade corporation.
    If, however, neither of those objections appears to exist, the Commissioners must give a direction, and, in that case the company can opt out of the status. It can then in the future—like a company which has never been an overseas trade corporation—exercise the right of election to come back into the status of an O.T.C. The Amendment, therefore, covers the two cases. It enables a company to defer entering into the status of an overseas trade corporation for the first time, and it also enables a company which is qualified, to cease to be treated as an overseas trade corporation where that is not done for the purpose of enjoying this particular kind of tax advantage. Then, in that case, at a future date, it will be open to that company to opt back into the status of an overseas trade corporation.
    It will be seen that the bar upon opting out of overseas trade corporation status under this procedure is the same as that which the Committee yesterday inserted into the Clause whereby companies can disqualify themselves by an act of their own. In each case, the advantage cannot be reaped if that advantage consists of being able to obtain relief by setting off losses and capital allowances in a way which would not be possible if the company remained an overseas trade corporation.
    Mr. Deputy-Speaker: I think that it would be for the convenience of the House if the Amendments in lines 18 and 19, and the first of those in line 21 were discussed together.
    Mr. Douglas Houghton: Yes, Mr. Deputy-Speaker. I beg to move, as an Amendment to the proposed Amendment, in line 18, to leave out "it appears to" and to substitute
    "the company does not satisfy".
    We are grateful to the Financial Secretary for explaining this rather lengthy Amendment to Clause 22. It implements promises which were given during the Committee stage to deal with two weaknesses which had been revealed in the provisions of the Bill as drafted. One was the apparent inability of a company which had no desire to become an overseas trade corporation to avoid becoming one. The hon. Member for Essex, South-East (Mr. Braine) pointed out that it seemed wrong that a company which had no desire to be an O.T.C. should be compelled to become one.
    The proposed subsection (3) submitted by the hon. Gentleman deals with that, and, as he pointed out a moment ago, subsection (6) allows a company which has elected to remain outside the scope of the overseas trade corporation provisions to elect to go into them at a later stage.
    The Amendment that I have moved relates to the second of the matters which were referred to in the Committee stage discussions; in particular, by the

    1181
    Financial Secretary in column 300 of the OFFICIAL REPORT of 26th June. Those came to be known as the "hopping in and out temptations" which a company might have. A company at one stage might, if it was to its advantage, be an O.T.C., and then, for reasons referred to by the hon. Gentleman, it might wish to disqualify itself from that status in order to take advantage of the more favourable Income Tax treatments of trading losses and of capital allowances if it was not an overseas trade corporation.
    Subsection (4) of the Amendment moved by the Financial Secretary gives powers to the Commissioners of Inland Revenue to give a direction to put a company, at its request, outside the status of an O.T.C., but before that direction is given the company must satisfy the Commissioners of two important matters. If a company desires to take advantage of the more favourable treatment of trading losses if it is not an overseas trade corporation, the Commissioners must be satisfied that that is not the sole, or the main purpose of the desire to contract out. It is a simple restraint upon contracting out if a company is doing it solely or mainly to get an Income Tax advantage.
    That, I think, puts it in fairly simple terms, but the House will notice that in line 9 of the hon. Gentleman's Amendment it says that:
    '…the Commissioners shall …give such a direction unless …"
    and the "unless" qualifications are dealt with in paragraphs (a) and (b) of subsection (4).
    My Amendment, and the two associated with it, really relate to onus of proof. At the moment, subsection (4, b) leaves it with the Commissioners to decide in the light of the facts, without putting upon the applicant an onus of proof as strong as we would wish. Paragraph (b) provides that if
    "it appears to the Commissioners that that relief"—
    that is, the reliefs mentioned in subsection (4, a):
    together with any corresponding reduction of the liability of the company to the profits tax, is the sole or main benefit which the company will derive from the direction so far as it relates to the said period of twelve months.
    1182
    the Commissioners need not issue the direction. They are empowered to refuse it. We wish to put the onus of proof more strongly on the applicant by saying that if the company fails to satisfy the Commissioners that it is not the sole or main benefit which the company would derive, then the Commissioners shall have power to refuse a direction.
    This is, perhaps, playing with words, but words matter in provisions of this kind. The lawyers would probably say that the onus of proof is much more definitely placed upon the applicant if he is required to satisfy the Commissioners that he is not trying to do something than if the Commissioners have to be satisfied that this is the sole or main purpose of what he proposes to do. We think that it is desirable to place this responsibility more heavily upon the applicant than does the Government's Amendment and that is why we propose to substitute for the words "it appears to" the words
    "the company does not satisfy"
    and after the word "is" in line 19, the word "not" and why at the end of the paragraph in line 21 we move to insert:
    "nor the substantial reason for the company's said application"
    It is rubbing it in, as it were, that the company must satisfy the Commissioners that it is not up to something which is solely for its tax advantage.
    We are in sympathy with the purpose of the Amendment moved by the Financial Secretary because, with him, we want to stop the hopping in and out, and the only question at issue between us is whether our form of words placing the onus of proof on the applicant strengthens the hands of the Commissioners and acts as a deterrent to applicants who might otherwise enter into the matter more lightheartedly and who might think that the task before them is less formidable than it would be under our Amendment.
    Mr, Roy Jenkins: I beg to second the Amendment to the proposed Amendment.
    Mr. Powell: I, too, sympathise with the object of the Amendment moved by the hon. Member for Sowerby (Mr. Houghton), but I do not think that, in fact, it will have any practical effect or will strengthen the force of the Clause. Under the procedure which subsection (4) lays down it is incumbent upon the company

    1183
    to make an application to the Commissioners. The company has to make the first move. Then the Commissioners have the duty, by law, of satisfying themselves and of deciding whether it appears to them that the relief set out in paragraph (b) is the sole or main benefit which the company will derive. That legal obligation upon the Commissioners to satisfy themselves of the facts of the case is identical with the wording in the Amendment which I moved and with the words which the hon. Member seeks to substitute.
    Nevertheless, I would have had no objection to recommending the House to make the Amendment but for the fact that it would result in a rather curious expression, namely:
    "shall give such a direction unless the company does not satisfy."
    "Unless not" is a very inelegant and, I think, unusual phrase, and since there is no gain in force at all and no practical effect from making the change, I would advise the House not to insist upon it.
    5.15 p.m.
    As regards the second pair of Amendments to which the hon. Member referred, there, again, the addition of the words
    "nor the substantial reason for the company's said application"—
    that is, the addition of a subjective criterion to the objective criterion of the nature of the benefit—really adds nothing, because, if it appears to the Commissioners that the sole or main benefit in fact lies in this relief, then nothing is gained by their going on to consider the purpose of the company in making the application. There is really no further safeguard inherent in those words. It may be—
    Mr. Mitchison rose—
    Mr. Powell: —and perhaps I am now going to meet the point of the hon. and learned Gentleman—that it was intended to be an alternative, that the conception was that, where this benefit was not the main benefit, the purpose could be taken into account. But, of course, that is not the effect of the Amendment.
    Mr. Mitchison: May I ask the Financial Secretary to consider, not the second Amendment on page 2522, which is meant to go with the wording which he has rejected by way of an Amendment
    1184
    to lines 18 and 19, but the third Amendment on page 2523 which makes it perfectly clear, following in this instance the language of the Government's own Amendment, that this is suggested as a subjective alternative to the objective alternative which is the sole reason allowed by the Government.
    I ask the hon. Gentleman to consider what harm can be done by adding a second subjective reason which is absolutely in line with his own use the other day of the word "deliberately" The hon. Gentleman will remember that I called attention to it in a rather similar connection. I suggest that if we accept his point that the first two Amendments would not really alter the substance of the matter, he might well accept our point that the fourth Amendment does add a further safeguard of a kind to which, if I understood his language aright, he would not object.
    Mr. Powell: I am at one with the hon. and learned Gentleman in agreeing that the effect of the fourth Amendment is that it would bite only in a case where the relief mentioned is not the sole nor the main benefit, but is, in fact, a minor benefit. The question is whether, in circumstances where there is clearly a major benefit which is not tax avoidance in the terms in which we have been considering it, we should then ask the Commissioners of Inland Revenue to dive into the mind of a company and say whether, in spite of the facts that the relief mentioned was only a minor benefit and that the major benefit was something else and something laudable or harmless, nevertheless the company's secret motives were such that it wanted the objectionable relief much more than it wanted the major and unobjectionable benefit.
    I think that is an extremely difficult and rather absurd task to place upon the Commissioners, and I suggest that the House ought to stand upon the factual test which, after all, can be objectively interpreted—where does the main advantage to the company lie in this change? If it lies in the relief set out in the Clause, then its application must be rejected.
    Mr. Mitchison: I am much obliged to the hon. Gentleman, but it was because I anticipated that he might make this sort of point having, perhaps, a natural

    1185
    predilection for the objective, that I asked him in a rather similar connection on 27th June:
    "Does that mean that what the Commissioners will have to consider is the question of the company's intentions in entering into contracts or making other arrangements which disqualify it for a period?"—[OFFICIAL REPORT, 27th June, 1957; Vol. 572, c. 469.]
    That was in connection with doing things that we are taking out of the qualifications, and the hon. Gentleman answered in the affirmative, if in that case the intention is to be regarded, surely it should be properly regarded in this one.
    Mr. Powell: We are only at one stage removed, in that, when speaking during the Committee stage about what is here before us in the terms of the Amendment, we were seeking to prevent an avoidance intention. We are both at one about that. We want to prevent this thing from happening by way of avoidance. It was in that sense that I said that in deciding whether or not to allow opting out, the Commissioners would be having regard to the object of opting out; but when we are considering the machinery of the matter I suggest that it is better to give the Commissioners the objective test of whether there is avoidance or not, rather than to ask them to perform the very difficult operation of diving into the company's intention which would be required under the terms of the fourth Amendment.
    Question, That "it appears to" stand part of the proposed Amendment, put and agreed to.
    Mr. Mitchison: I beg to move, as an Amendment to the proposed Amendment, in line 21, at the end to insert:
    Provided that any such direction may be given unconditionally or on such conditions as seem appropriate to the Commissioners, including conditions that the company do pay by way of income tax or profits tax a sum not exceeding the amount of that relief or of that corresponding reduction of liability to the profits tax, as the case may be.
    Perhaps it would be convenient if I referred at the same time to the next Amendment, in line 23, after "subsection", to insert
    "or by such conditions as aforesaid."
    and the Amendment in line 24, after
    "refusal," to insert, "or of the conditions."
    This is quite a short and, in some ways, a minor point. The Commissioners have to consider whether the "sole or main
    1186
    benefit" got from a change of this sort is, to put it quite shortly, a tax benefit. It seems to us that there may be instances where the Commissioners either feel doubtful about the matter or arrive at a nice balancing of benefits and advantages and are in some doubt as to the right thing to do.
    The words used are,
    "…the sole or main benefit."
    Of course, the sole benefit is clear enough, but the question of the main benefit will sometimes be clear and sometimes be more doubtful. If they have to deal with a question of that sort, it is right that they should have power to deal with it conditionally, and the sort of condition that they may be empowered to impose is a condition of partial payment of the advantage to be gained that is to say, in effect to allow the change of status to come at a price. For that reason we put down the Amendment in line 21 which provides for conditions being allowed according to what seems appropriate to the Commissioners, including the payment by the company, as Income Tax or Profits Tax, of something which will in no event exceed the benefit they would get otherwise. It is quite a simple, and, I think, a short point.
    Mr. E. Fletcher: I beg to second the Amendment to the proposed Amendment.
    In a certain sense my hon. and learned Friend the Member for Kettering (Mr. Mitchison) is right when he says that this raises a minor point; but, on the other hand, it seems to me to raise a matter which may conceivably have considerable significance in the future, and therefore I believe it worthy of the attention of the House. The Financial Secretary has said that he prefers an objective test for liability to tax rather than a test which depends upon the Commissioners examining whether or not the intention of the company was to avoid tax, and I have a great deal of sympathy with that point of view.
    I would put this argument to the Minister. It is undoubtedly true that in times past, and until comparatively recently, it was logical to say, "Let us have an Income Tax law phrased in such a way that the taxpayer either falls on one side of it or the other" We cannot get perfect justice in Income Tax provisions. There is a "watershed", and we

    1187
    find that taxpayers are either fortunate or unfortunate. We have an objective test, because it is not fair to impose upon the Commissioners the burden of looking at an intention to see whether some device is entered into for the purpose of avoiding tax or, as the Minister said, for some harmless motive.
    That I can understand. But it is not the end of the question, because in recent years we have, in my opinion, departed from that ideal of objective purity and we have tended to enter a sphere in which our Income Tax legislation makes an attempt—I think it only a half-hearted and not very satisfactory attempt, but at any rate, it is an attempt—to achieve justice not entirely by laying down objective tests but by seeing what is the fair, reasonable and sensible thing to do in given circumstances.
    That would be a perfectly proper method of applying Income Tax provisions. In fact, the more complicated, the more intricate, our Income Tax law becomes, the more there is to be said for the philosophical approach of trying to judge the case of a particular taxpayer or company on that basis and seeing in the circumstances of the case what is the right and equitable thing to do. I appreciate that that means giving the Commissioners a degree of latitude and a degree of discretion which would impose considerable burdens upon them, but I think we are approaching that position in our Income Tax law. and we may well have to come to it, if justice is to be done as between one taxpayer and another, particularly when one enters into the very abstruse field of overseas trading corporations.
    The Amendment goes part of the way, but not the whole way, to meeting that difficulty, which is a very real difficulty not only in this part of the Income Tax code but in other parts as well. From what my hon. and learned Friend says, obviously there will be borderline cases where the Commissioners may have to weigh up the relative advantages either of giving a direction or not giving one. There will be the dilemma of whether a company is outside the scope of the provisions or inside. But there will also be circumstances in which it would be reasonable to say that the Commissioners should give a direction conditionally, provided that things are done and matters
    1188
    arranged and accounts adjusted in such a way that relief is given, provided that some tax is paid.
    I do not think that unreasonable, and I ask the Minister, in the interests of sound administration, to tell us whether there is any practical as opposed to a mere theoretical objection to a provision of this kind. It is couched in terms which will give the Commissioners of Inland Revenue a power which they do not at present possess, and it will have application in this limited field. If it works well, it could be extended. Therefore, why should it not be tried as an experiment, to see how it works? In the interests of the Revenue and of the taxpayer, I hope that we shall have a sympathetic response from the Minister.
    5.30 p.m.
    Mr. Powell: I shall be forgiven if I do not enter into the philosophical speculations of the hon. Member for Islington, East (Mr. E. Fletcher) as to the manner in which our tax administration is developing; but I agree that, prima facie, the proviso contained in the Amendment moved by the hon. and learned Member for Kettering (Mr. Mitchison) is logical—that since, in many of these cases, part of the benefit may arise from the objectionable relief, as we have been calling it, and part of the benefit may arise from other causes, it should be sufficient for the Commissioners to be able to annul the objectionable benefit and leave the other intact. I accept the theoretical logic of that position, but there is this further consideration which I should put to the House.
    Where we are dealing with a company which has enjoyed the very substantial advantages of overseas trade corporation status, it will be much simpler, and, I think, more satisfactory, if, should the objective test on which we are both agreed in wishing to put a very severe onus of proof, go against the company and should it appear that it is, in the main, getting this objectionable relief as a result of the change of status, it should be told to take the advantages it has got as an overseas trade corporation, and not, to use the phrase we have often used in these debates, seek to hop in and out. It is easier to adopt that rather blunt point of view since the Amendment which I moved does provide for an appeal; it will

    1189
    be possible for a company which believes that it has a substantial case, in reason, of a non-evasive character, for losing its O.T.C. status to go to an impartial body and be heard on the matter.
    I suggest. therefore, that we should not finesse about this, but that a company should be content to enjoy overseas trade corporation status unless it can show that the main advantage lies in ceasing to enjoy that status for reasons which have nothing to do with tax avoidance.
    Question, That those words be there inserted in the proposed Amendment. put and negatived.
    Mr. Houghton: I beg to move, as an Amendment to the proposed Amendment, in line 34. to leave out from "may" to "to" in line 35 and to insert:
    "request the Commissioners to grant permission for the revocation of the company's election or"
    Mr. Deputy-Speaker: I think that it would be convenient if the next Amendment, to insert a new subsection (7), were discussed at the same time.
    Mr. Houghton: Yes, Mr. Deputy- Speaker.
    The Amendment seeks to tighten up the provisions of subsection (6) of the Government Amendment. In the first place, a company which has elected not to be an overseas trade corporation can, under subsection (6) of the Government Amendment, revoke that election. There are no conditions whatever attached to that revocation. as far as I can see. Having elected in the first place, a company is quite free to revoke that election and go into the category of overseas trade corporation.
    Our Amendment seeks to impose the condition that a company shall not be in a position to make a simple revocation of its election, but must seek the permission of the Commissioners of Inland Revenue to do so. In our view, that is desirable because, in certain circumstances, a company may elect not to become an overseas trade corporation solely for some tax advantage and then, when it has reaped that advantage, it may then elect to become an overseas trade corporation and reap a different kind of tax advantage. The Commissioners of Inland Revenue should be allowed to examine the purity of the motives of an applicant for revocation of its original
    1190
    election to remain outside the status of overseas trade corporation.
    Similarly, in the case of companies which have asked for a direction from the Commissioners to exclude them from the status of overseas trade corporation, if they make application to return, they should be subject to a certain scrutiny. Subsection (6) of the Government Amendment allows such companies to require the Commissioners to withdraw their direction. Our Amendment would give a company the right to request the Commissioners to grant permission for re-entry into the status of overseas trade corporation, but we then impose a condition upon the exercise of that power by the Commissioners of Inland Revenue. We propose, by the Amendment associated with the one I am now moving, to insert a further subsection (7) which will provide that permission for the revocation of an election or withdrawal of a direction under the earlier provisions
    "shall not be granted save after consultation with the Board of Trade and then only on account of a change of circumstances beyond the control of the company or for reasons of national interest."
    As regards the latter case, the right of a company to re-enter the status of overseas trade corporation after having once been in it and asked the Commissioners for a direction to get out, I would refer to an interjection by the Financial Secretary on 26th June. The right hon. and learned Member for Kensington, South (Sir P. Spens) had been speaking on the point earlier in the debate, and my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said:
    "I gather that the intention of the right hon. and learned Gentleman and his Friends, and the intention accepted by the Government in this matter, is that any company having once contracted out of its status of overseas trade corporation should remain out of that status."
    The Financial Secretary then interjected with the word "Normally", and we hang our string of Amendments on that word. My hon. and learned Friend, following that interjection, went on to say:
    "The hon. Gentleman says "Normally" We shall have to see what the Treasury Clause means exactly."—[OFFICIAL REPORT, 26th June, 1957; Vol. 395, c. 302.]

    1191
    As far as we can see, the Government Amendment now before us means, as I said, first, that a company which initially elected to remain outside the status of overseas trade corporation can, by the simple act of revocation, go in; and we impose conditions upon the exercise of that right. Secondly, as regards the company which has once been in and has asked for a direction to go out, we think that there should be some condition imposed on the right of re-entry, if the word used by the Financial Secretary in the interjection I quoted has any real meaning.
    Otherwise, it seems as if a company can not only elect to go in for the first time on a simple revocation of its initial election to stay out, but that a company, having asked for a direction to leave overseas trade corporation status, can require the Commissioners to allow it to go back. We cannot see what restraints are put upon that unless the conditions which we seek to impose are included. We shall be glad to hear from the Financial Secretary what the word "normally" meant if there are no restraints in the way of complete freedom of action. I trust that the hon. Gentleman will be able to satisfy us that companies will not be able to go in and out just to suit their own purposes.
    We have already provided that companies shall not be allowed to get out of the overseas trade corporation status unless they satisfy the Commissioners of Inland Revenue that they are not doing it solely or mainly for tax advantage in circumstances mentioned in the Clause; but it does not seem to us that having once got that direction to go out, any restraint or restriction is put upon the right of companies to go back.
    The Financial Secretary may reply that since companies are required to satisfy the Commissioners of Inland Revenue that they are not up to monkey tricks when they apply for a direction to go out, there is no reason to treat their desire for reentry any differently from a revocation from the initial election to stay out.
    In the activities of these companies there are many mysteries and devices, many motives and many opportunities for arranging affairs to the tax advantage of those concerned. Since we on this side,
    1192
    and, I think, the House as a whole, have taken the view that the favourable advantages of overseas trade corporation status are costing the revenue a lot of money, the conditions of using them and enjoying their benefits must be strict to check tax avoidance devices and the manipulation of the provisions of the Bill solely for the benefit of profit and shareholders.
    That is our desire. It is no more and no less than that. We hope that the Financial Secretary will see merit in our attempt to tighten up the conditions both of revocation of election to remain out and the conditions of requirement for the withdrawal of a direction in order that companies may re-enter overseas trade corporation status.
    Mr. E. Fletcher: I beg to second the Amendment to the proposed Amendment.
    On this occasion, the Financial Secretary cannot wriggle out of the matter, as he has done on the last two Amendments, by saying that he is not prepared to enter into any philosophical discussion as to his attitude. As my hon. Friend the Member for Sowerby (Mr. Houghton) made perfectly clear, the Amendment raises, in extreme form, the very question which I sought to put on the two previous Amendments. The point at issue does not concern me as much as the approach of the Financial Secretary. We are entitled to know the Government's attitude on this subject. It affects not only the point at issue, but the whole scope of our Income Tax law.
    I can understand the Minister saying, as he has appeared to say on some occasions, that we must eliminate all discretion and that we must not give the Commissioners of Inland Revenue the right to look into motives and to ascertain intentions. The hon. Gentleman is entitled to say that we must have a rigid, definitive, objective law laid down in the Income Tax code and that if some unfortunate taxpayers are on one side or the other, that is just too bad, that is their misfortune, but we cannot start giving the Commissioners discretion to attach conditions to directions and secure a greater method of equity and justice.
    5.45 p.m.
    I am becoming more and more inclined to the view that the more abstruse

    1193
    these provisions of Income Tax law become, the more necessary it will be, to obtain justice between one taxpayer and another and, what is more important, to ensure that the objects of the Inland Revenue are satisfied, that a much wider discretion should be given to the Commissioners than the Minister is prepared to concede on some of our Amendments.
    Hitherto, the Minister has adopted a rigid non possumus attitude. He should hardly do that, because, as my hon. Friend pointed out so clearly, we know what happened when the matter was considered in Committee. It is all on record in the OFFICIAL REPORT for 26th June. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) who on that occasion was putting some very pointed questions to the Minister, said:
    "I gather that the intention of the right hon. and learned Gentleman and his Friends, and the intention accepted by the Government in this matter is that any company, having once contracted out of its status of overseas trading corporation, should remain out of that status."
    That was a perfectly simple question, but what did the Minister say? He said:
    "Normally"—[OFFICIAL REPORT, 26th June, 1957; Vol. 572, c. 302.]
    That was not answering "Yes" or "No." "Normally" means, I understand, in most cases "yes" but in some cases "no" Therefore, we are entitled to ask, what are the cases in which the exception arises? What are the abnormal circumstances which prevent the answer being a categorical "Yes"?
    The debate in Committee continued. My hon. and learned Friend pursued his argument. It was supported by one of the Minister's hon. Friends and then pursued again by my hon. Friend the Member for Loughborough (Mr. Cronin), who was followed by the hon. Member for Essex, South-East (Mr. Braine). As we found over and over again in our debates in Committee, however, there was no reply from the Government benches. The Minister sat silent. Our position, therefore, at this Report stage is that on this important matter we have had from the Government one word—"normally"and we do not know what it means. It is inconsistent with the doctrine which the Minister has tried to lay down, thoroughly
    1194
    unsuccessfully, on a whole series of previous Amendments.
    It is not good enough to legislate in a complicated matter like this and to let taxpayers know that in some cases, having once contracted out of the status of an overseas trade corporation, they should remain out of that status and that in other cases they should be able to come in again. That is why my hon. Friend put down the Amendment.
    We must now invite the Minister to abandon his very unsatisfactory sphinx-like attitude of silence which he maintains on ail difficult questions and his ambiguous monosyllabic answers to complicated questions. For goodness' sake, let us know where we stand. I hope that on this occasion we shall have a full, clear-cut and definite reply to this important question, which so far has been left by the Government in such a thoroughly unsatisfactory state.
    Sir Ian Fraser: We have the most admirable and trustworthy Civil Service, but I do not think it is a good thing to put upon it these discretions. The law should be as simple, clear and direct as possible and it should not be complicated by Civil Service discretions.
    Mr. Powell: I remember that the Royal Library of Naples used to be peculiar amongst the great libraries of Europe in that one could get in without a ticket, but there was a grenadier at the exit and one could not get out unless one had a pass signed by the Librarian. That is the arrangement which this Amendment provides for companies with the overseas trade corporation status. It is desired that companies which can qualify under the terms of Part IV shall enjoy, if it is to their advantage, the benefits of overseas trade corporation status, but it is also our determination to ensure that they shall not go in and out of that status for reasons of tax avoidance, as those are defined in the terms of the Amendment.
    The hon. Member for Sowerby (Mr. Houghton), who moved the Amendment to the Amendment, said that we must test the purity of the motives of companies which, having elected not to be overseas trade corporations, or having been overseas trade corporations and ceased to be so by virtue of a direction

    1195
    of the Commissioners, want to become overseas trade corporations; but there is no question of motive in the whole matter of Part IV. We are placing this on the Statute Book with the idea that companies which can fulfil the qualifications shall get the benefit from being overseas trade corporations, and so it is surely right not to place a barrier to qualification, either for the first time, or when a company which has properly ceased to be an overseas trading corporation and is not one contemplates becoming an overseas trade corporation again.
    Mr. Houghton: I was not seeking to test the purity of the motives of a single act, but the purity of the motives of one act followed by another; in the first place election to stay out, then application to come in; and in the second place, having gone out, on getting a direction to go out, then desiring to re-enter.
    Mr. Powell: The material act is the getting out, because it is in the getting out that the tax avoidance arises. The tax advantage which arises in getting in is an advantage which we seek to confer and which we seek to deny to no company which can properly qualify for it. So it is at the point of exit that we want to station the grenadier.
    It has been pointed out by both hon. Members, the hon. Member for Sowerby and the hon. Member for Islington, East (Mr. E. Fletcher), that I said that, normally, hopping in and out would not happen. I am quite sure that normally it will not happen. I am quite sure that it will be very difficult for a company to satisfy the Commissioners so as to get through the hoop of subsection (4) in the Amendment, and I am quite sure that if it does, that is to say that if circumstances have arisen which genuinely make it disadvantageous for it to continue to be an overseas trade corporation, it will be very abnormal for the company in a future
    year to find advantage in regaining that status. It will be abnormal that such a thing will happen, and, of course, this guard upon the exit will make it abnormal, but we do not want, and it would be in conflict with the purposes of this Part of the Bill, to prevent a company which can benefit from the provisions of Part IV from doing so, whether it has elected not to do so for the first time, which will be the usual case, or whether —which will be the abnormal case—it has been once an overseas trade corporation and succeeded in satisfying the Commissioners that it might fairly cease to be one.
    Mr. Roy Jenkins: The Financial Secretary has applied himself closely to this matter, as he always applies himself closely to any matter. We all followed his Neapolitan anecdote at the beginning of his speech, though I am not quite sure that I followed the connection of the anecdote, which he maintained throughout, with some of his refutations which he went on to make of the arguments of my hon. Friends, but I do not think he answered all the arguments which were put by either my hon. Friend the Member for Sowerby (Mr. Houghton) or my hon. Friend the Member for Islington, East (Mr. E. Fletcher). The hon. Gentleman applies himself, as I have noted before, rather more closely to the genuine difficulties of avoidance than do his colleagues on the Treasury Bench, but as the Government do not seem sufficiently adequately concerned with the dangers of avoidance and evasion I hope that my hon. Friends will vote for the Amendment to the Amendment as an expression of this view.
    Question put, That the words proposed to be left out stand part of the proposed Amendment:—
    The House divided: Ayes 273, Noes 221.

    Division No. 171.]

    AYES

    [5.55 p.m.

    Agnew, Sir Peter

    Baldwin, A. E.

    Biggs-Davison, J. A.

    Aitken, W. T.

    Barber, Anthony

    Birch, Rt. Hon. Nigel

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

    Barlow, Sir John

    Bishop, F. P.

    Alport, C. J. M.

    Barter, John

    Body, R. F.

    Amery, Julian (Preston, N.)

    Baxter, Sir Beverley

    Boothby, Sir Robert

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Beamish, Maj. Tufton

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

    Arbuthnot, John

    Bell, Philip (Bolton, E.)

    Boyle, Sir Edward

    Armstrong, C. W.

    Bell, Ronald (Bucks, S.)

    Braine, B. R.

    Ashton, H.

    Bennett, F. M. (Torquay)

    Braithwalte, Sir Albert (Harrow, W.)

    Astor, Hon. J. J.

    Bennett, Dr. Reginald

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

    Atkins, H. E.

    Bevins, J. R. (Toxteth)

    Brooman-White, R. C.

    Baldock, Lt.-Cmdr. J. M.

    Bidgood, J. C.

    Browne, J. Nixon (Craigton)

    Bullus, Wing Commander, E. E.

    Hinchingbrooke, viscount

    Oakshott, H. D.

    Burden, F. F. A.

    Holland-Martin, C. J.

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

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

    Holt, A. F.

    Orr, Capt. L. P. S.

    Campbell, Sir David

    Hornby, R. P.

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

    Carr, Robert

    Hornsby-Smith, Miss M. P.

    Osborne, C.

    Cary, Sir Robert

    Horobin, Sir Ian

    Page, R. G.

    Channon, Sir Henry

    Horsbrugh, Rt. Hon. Dame Florence

    Pannell, N. A. (Kirkdale)

    Chichester-Clark, R.

    Howard, Hon. Greville (St. Ives)

    Partridge, E.

    Clarke, Brig. Terence (Portsmth, W.)

    Howard, John (Test)

    Pickthorn, K. W. M.

    Cole, Norman

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

    Pike, Miss Mervyn

    Conant, Maj. Sir Roger

    Hughes Hallett, Vice-Admiral J.

    Pitman, I. J.

    Cooper, A. E.

    Hughes-Young, M. H. C.

    Pitt, Miss E. M.

    Cordeaux, Lt.-Col. J. K.

    Hulbert, Sir Norman

    Pott, H. P.

    Corfield, Capt. F. V.

    Hurd, A. R.

    Powell, J. Enoch

    Craddock, Beresford (Spelthorne)

    Hutchison, Michael Clark (E'b'gh, S.)

    Price, David (Eastleigh)

    Crosthwaite-Eyre, Col. O. E.

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

    Price, Henry (Lewisham, W.)

    Crowder, Sir John (Finchley)

    Hyde, Montgomery

    Prior-Palmer, Brig. O. L.

    Currie, G. B. H.

    Hylton-Foster, Rt. Hon. Sir Harry

    Profumo, J. D.

    Davidson, Viscountess

    Iremonger, T. L.

    Raikes, Sir Victor

    Davies, Rt. Hn. Clement (Montgomery)

    Irvine, Bryant Godman (Rye)

    Ramsden, J. E.

    Deedes, W. F.

    Jenkins, Robert (Dulwich)

    Rawlinson, Peter

    Digby, Simon Wingfield

    Jennings, J. C. (Burton)

    Redmayne, M.

    Dodds-Parker, A. D.

    Johnson, Dr. Donald (Carlisle)

    Remnant, Hon. P.

    Donaldson, Cmdr. C. E. McA.

    Johnson, Eric (Blackley)

    Renton, D. L. M.

    Doughty, C. J. A.

    Jones, Rt. Hon. Aubrey(Hall Green)

    Ridsdale, J. E.

    Drayson, G. B.

    Joseph, Sir Keith

    Rippon, A. C. F.

    du Cann, E. D. L.

    Joynson-Hicks, Hon. Sir Lancelot

    Robinson, Sir Roland (Blackpool, S.)

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

    Kerby, Capt. H. B.

    Rodgers, John (Sevenoaks)

    Duncan, Sir James

    Kerr, sir Hamilton

    Roper, Sir Harold

    Eden, J. B. (Bournemouth, West)

    Kershaw, J. A.

    Ropner, Col. Sir Leonard

    Elliot, Rt. Hon. W. E. (Kelvingrove)

    Kirk, P. M.

    Russell, R. S.

    Elliott, R.W.(N'castle upon Tyne, N)

    Lagden, C. W.

    Sandys, Rt. Hon. D.

    Emmet, Hon. Mrs. Evelyn

    Lambert, Hon. G.

    Schofiefd, Lt.-Col. W.

    Errington, Sir Eric

    Lambton, Viscount

    Sharples, R. C.

    Erroll, F. J.

    Lancaster, Col. C, G.

    Shepherd, William

    Finlay, Graeme

    Langford-Holt, J. A.

    Smithers, Peter (Winchester)

    Fisher, Nigel

    Leather, E. H. C.

    Smyth, Brig. Sir John (Norwood)

    Fletoher-Cooke, C.

    Leavey, J. A.

    Speir, R. M.

    Fort, R.

    Leburn, W. G.

    Spence, H. R. (Aberdeen, W.)

    Foster, John

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

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

    Fraser, Hon. Hugh (Stone)

    Legh, Hon. Peter (Petersfield)

    Stanley, Capt. Hon. Richard

    Fraser, Sir Ian (M'ombe & Lonsdale)

    Lindsay, Hon. James (Devon, N.)

    Stevens, Geoffrey

    Freeth, Denzil

    Linstead, Sir H. N.

    Steward, Harold (Stockport, S.)

    Galbraith, Hon. T. G. D.

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

    Steward, Sir William (Woolwich, W.)

    Gammans, Lady

    Longden, Gilbert

    Stoddart-Scott, Col. Sir Malcolm

    Garner-Evans, E. H.

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

    Storey, S.

    George, J. C. (Pollok)

    Lucas, P. B. (Brentford & Chiswick)

    Studholme, Sir Henry

    Gibson-Watt, D.

    Lucas-Tooth, Sir Hugh

    Summers, Sir Spencer

    Glover, D.

    McAdden, S. J.

    Sumner, W. D. M. (Orpington)

    Glyn, Col. R.

    Macdonald, Sir Peter

    Taylor, Sir Charles (Eastbourne)

    Godber, J. B.

    Mackeson, Brig. Sir Harry

    Taylor, William (Bradford, N.)

    Gomme-Duncan, Col. Sir Alan

    Mackie, J. H. (Galloway)

    Teeling, W.

    Goodhart, Philip

    McLaughlin, Mrs. P.

    Temple, John M.

    Gower, H. R.

    Maclay, Rt. Hon. John

    Thomas, P. J. M. (Conway)

    Graham, Sir Fergus

    Maclean, Sir Fitzroy (Lancaster)

    Thompson, Kenneth (Walton)

    Grant, W. (Woodside)

    McLean, Neil (Inverness)

    Thornton-Kemsley, C. N.

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

    MacLeod, John (Ross & Cromarty)

    Tilney, John (Wavertree)

    Green, A.

    Macmillan, Rt. Hn. Harold (Bromley)

    Turner, H. F. L.

    Gresham Cooke, R.

    Macpherson, Niall (Dumfries)

    Turton, Rt. Hon. R. H.

    Grimond, J.

    Maddan, Martin

    Tweedsmuir, Lady

    Grimston, Hon. John (St. Albans)

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

    Vane, W. M. F.

    Grimston, Sir Robert (Westbury)

    Manningham-Buller, Rt. Hn. Sir R.

    Vaughan-Morgan, J. K.

    Grosvenor, Lt.-Col. R. G.

    Markham, Major Sir Frank

    Wade, D. W.

    Gurden, Harold

    Marlowe, A. A. H.

    Wakefield, Edward (Derbyshire, W.)

    Hall, John (Wycombe)

    Marples, Rt. Hon. A. E.

    Wakefield, Sir Wavell (St. M'lebone)

    Hare, Rt. Hon. J. H.

    Marshall, Douglas

    Walker-Smith, Rt. Hon. Derek

    Harris, Reader (Heston)

    Mathew, R.

    Wall, Major Patrick

    Harrison, A. B. C. (Maldon)

    Maude, Angus

    Ward, Dame Irene (Tynemouth)

    Harrison, Col. J. H. (Eye)

    Maudling, Rt. Hon. R.

    Waterhouse, Capt. Rt. Hon. C.

    Harvey, Sir Arthur (Macclesfd)

    Mawby, R. L.

    Watkinson, Rt. Hon. Harold

    Harvey, Ian (Harrow, E.)

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

    Webbe, Sir H.

    Harvey, John (Walthamstow, E.)

    Moore, Sir Thomas

    Whitelaw, W. S. I.

    Hay, John

    Mott-Radclyffe, Sir Charles

    Williams, Paul (Sunderland, S.)

    Heald, Rt. Hon. Sir Lionel

    Nabarro, C. D. N.

    Wood, Hon. R.

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

    Nairn, D. L. S.

    Woollam, John Victor

    Henderson, John (Cathcart)

    Neave, Airey

    Yates, William (The Wrekin)

    Henderson-Stewart, Sir James

    Nicholls, Harmar

    Hicks-Beach, Maj. W. W.

    Nicholson, Godfrey (Farnham)

    TELLERS FOR THE AYES:

    Hill, Rt. Hon. Charles (Luton)

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

    Mr. Wills and Mr. Bryan.

    Hill, Mrs. E. (Wythenshawe)

    Noble, Comdr. Rt. Hon. Allan

    Hill, John (S. Norfolk)

    1198

    1199

    NOES

    Ainsley, J. W.

    Hastings, S.

    Parkin, B. T.

    Albu, A. H.

    Hayman, F. H.

    Paton, John

    Allaun, Frank (Salford, E.)

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

    Pearson, A.

    Allen, Arthur (Bosworth))

    Herbison, Miss M.

    Peart, T. F.

    Allen, Scholefield (Crewe)

    Hobson, c. R. (Keighley)

    Pentland, N.

    Awbery, S. S.

    Holman, P.

    Prentice, R. E.

    Bacon, Miss Alice

    Holmes, Horace

    Price, J. T. (Westhoughton)

    Balfour, A.

    Houghton, Douglas

    Price, Philips (Gloucestershire, W.)

    Bellenger, Rt. Hon. F. J.

    Howell, Charles (Perry Barr)

    Probert, A. R.

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

    Hoy, J. H.

    Randall, H. E.

    Benn, Hn. Wedgwood (Bristol, S. E.)

    Hubbard, T. F.

    Rankin, John

    Benson, G.

    Hughes, Cledwyn (Anglesey)

    Redhead, E. C.

    Beswick, Frank

    Hughes, Emrys (S. Ayrshire)

    Reeves, J.

    Blackburn, F.

    Hughes, Hector (Aberdeen, N.)

    Reid, William

    Blenkinsop, A.

    Hunter, A. E.

    Rhodes, H.

    Blyton, W. R.

    Hynd, H. (Accrington)

    Robens, Rt. Hon. A.

    Boardman, H.

    Hynd, J. B. (Attercliffe)

    Roberts, Albert (Normanton)

    Bottomley, Rt. Hon. A. G.

    Irvine, A. J. (Edge Hill)

    Roberts, Goronwy (Caernarvon)

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

    Irving, Sydney (Dartford)

    Robinson, Kenneth (St. Pancras, N.)

    Bowles, F. G.

    Isaacs, Rt. Hon. G. A.

    Rogers, George (Kensington, N.)

    Boyd, T. C.

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

    Ross, William

    Braddock, Mrs. Elizabeth

    Jeger, George (Goole)

    Royle, C.

    Brockway, A. F.

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

    Shinwell, Rt. Hon. E.

    Broughton, Dr. A. D. D.

    Jenkins, Roy (Stechford)

    Silverman, Julius (Aston)

    Brown, Thomas (Ince)

    Johnson, James (Rugby)

    Silverman, Sydney (Nelson)

    Burke, W. A.

    Johnston, Douglas (Paisley)

    Simmons, C. J. (Brierley Hill)

    Butler, Herbert (Hackney, C.)

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

    Skeffington, A. M.

    Butler, Mrs. Joyce (Wood Green)

    Jones, David (The Hartlepools)

    Slater, Mrs. H. (Stoke, N.)

    Callaghan, L. J.

    Jones, Elwyn (W. Ham, S.)

    Slater, J. (Sedgefield)

    Castle, Mrs. B. A.

    Jones, Jack (Rotherham)

    Smith, Ellis (Stoke, S.)

    Champion, A. J.

    Jones, J. Idwal (Wrexham)

    Snow, J. W.

    Chapman, W. D.

    Jones, T. W. (Merioneth)

    Sorensen, R. W.

    Chetwynd, G. R.

    Kenyon, C.

    Soskice, Rt. Hon. Sir Frank

    Clunie, J.

    Key, Rt. Hon. C. W.

    Sparks, J. A.

    Collick, P. H. (Birkenhead)

    King, Dr. H. M.

    Steele, T.

    Collins, V.J. (Shoreditch & Finsbury)

    Lawson, G. M.

    Stewart, Michael (Fulham)

    Cove, W. G.

    Ledger, R. J.

    Strachey, Rt. Hon. J.

    Craddock, George (Bradford, S.)

    Lee, Frederick (Newton)

    Strauss, Rt. Hon. George (Vauxhall)

    Cronin, J, D.

    Lee, Miss Jennie (Cannock)

    Summerskill, Rt. Hon. E.

    Cullen, Mrs. A.

    Lewis, Arthur

    Taylor, Bernard (Mansfield)

    Dalton, Rt. Hon. H.

    Lipton, Marcus

    Taylor, John (West Lothian)

    Darling, George (Hillsborough)

    Logan, D. G.

    Thomas, George (Cardiff)

    Davies, Ernest (Enfield, E.)

    Mabon, Dr. J. Dickson

    Thomas, Iorwerth (Rhondda, W.)

    Davies, Harold (Leek)

    MacColl, J. E.

    Thornton, E.

    Davies, Stephen (Merthyr)

    McGovern, J.

    Timmons, J.

    Delargy, H. J.

    McInnes, J.

    Tomney, F.

    Dodds, N. N.

    McKay, John (Wallsend)

    Ungoed-Thomas, Sir Lynn

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

    MacPherson, Malcolm (Stirling)

    Usborne, H. C.

    Edelman, M.

    Mahon, Simon

    Viant, S. P.

    Edwards, Rt. Hon. John (Brighouse)

    Mallalieu, E. L. (Brigg)

    Watkins, T. E.

    Edwards, Rt. Hon. Ness (Caerphilly)

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

    Weitzman, D.

    Edwards, Robert (Bilston)

    Mann, Mrs. Jean

    Wells, Percy (Faversham)

    Edwards, W. J. (Stepney)

    Marquand, Rt. Hon. H. A.

    Wells, William (Walsall, N.)

    Evans, Albert (Islington, S. W.)

    Mason, Roy

    West, D. G.

    Fernyhough, E.

    Mayhew, C. P.

    Wheeldon, W. E.

    Flenburgh, W.

    Mellish, R. J.

    White, Mrs. Eirene (E. Flint)

    Finch, H. J.

    Messer, Sir F.

    White, Henry (Derbyshire, N. E.)

    Fletcher, Eric

    Mikardo, Ian

    Wilkins, W. A.

    Forman, J. C.

    Mitchlson, G. R.

    Wiley, Frederick

    Fraser, Thomas (Hamilton)

    Monslow, W.

    Williams, David (Neath)

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

    Moody, A. S.

    Williams, Rev. Llywelyn (Ab'tillery)

    George, Lady Megan Lloyd (Car'then)

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

    Williams, Ronald (Wigan)

    Gibson, C. W.

    Moss, R.

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

    Gooch, E. G.

    Moyle, A.

    Williams, W. R. (Openshaw)

    Gordon Walker, Rt. Hon. P. C.

    Mulley, F. W.

    Williams, W. T. (Barons Court)

    Greenwood, Anthony

    Noel-Baker, Rt. Hon. P. (Derby, S.)

    Willis, Eustace (Edinburgh, E.)

    Grenfell, Rt. Hon. D. R.

    Oliver, G. H.

    Wilson, Rt. Hon. Harold (Huyton)

    Grey, C. F.

    Oram, A. E.

    Woodburn, Rt. Hon. A.

    Griffiths, David (Rother Valley)

    Orbach, M.

    Woof, R. E.

    Griffiths, Rt. Hon. James (Llanelly)

    Oswald, T.

    Yates, V. (Ladywood)

    Griffiths, William (Exchange)

    Owen, W. J.

    Zilliacus, K.

    Hale, Leslie

    Padley, W. E.

    Hamilton, W. W.

    Pannell, Charles (Leeds, W.)

    TELLERS FOR THE NOES:

    Hannan, W.

    Parglter, G. A.

    Mr. Short and Mr. Deer.

    Harrison, J. (Nottingham, N.)

    Parker, J.

    Proposed words there inserted in the Bill.

    Clause 25.—(DIVIDENDS PAID OUT OF EXEMPT TRADING INCOME: INCOME TAX CHARGE.)
    Mr. Powell: I beg to move, in page 19, line 16, to leave out subsection (3) and insert:
    (3) Where a dividend on shares in a company which is an Overseas Trade Corporation is receivable by, and constitutes trading income of, another Overseas Trade Corporation, that other Overseas Trade Corporation shall, subject to the provisions of this Part of this Act relating to double taxation relief, be entitled to repayment of income tax deducted from the dividend under the said section one hundred and eighty-four and subsections (2) to (4) of the said section one hundred and ninety shall apply for the purposes of this subsection as they apply for the purposes of that section.
    Clause 25 provides for what, in the jargon which we have evolved in these debates, we have come to know as the switching of exempt trading income between the subsidiaries and the principal in a group where all the companies concerned are overseas trade corporations. There is, however, one type of case in which that switching has not been made possible, and that is where one subsidiary has a holding, which will, of course, necessarily be a minority holding, in another subsidiary, on which dividends would be payable.
    The substitution of the new subsection (3) will cover that case, as well as all the other cases where switching might be desired which are covered by the Clause as it stands.
    Amendment agreed to.

    Clause 34. —(DEFINITION OF TRADING INCOME AND INVESTMENT INCOME.)
    Mr. Powell: I beg to move, in page 27, line 18, to leave out from the beginning to "except" in line 19.
    This Amendment removes the reference in Clause 34 (2, a) to assessment of income to Income Tax under Schedule A. If these words remained in that subsection, a doubt may be created that the value of the beneficial occupation of property in this country, as, for example, the head offices of an overseas trading corporation, may fall to be treated as trading income. It is to avoid that remote but undesirable possibility that we seek to leave out these words.
    Amendment agreed to.

    Clause 37. —(GIFTS inter vivos.)
    The Solicitor-General: I beg to move, in page 30, line 23, to leave out from "as" to "but" in line 26 and to insert:
    "continuing to have the possession and enjoyment of that property, and the principal value aforesaid shall be taken as the principal value of that property as property comprised in the gift;"
    This Amendment and a number of others are put forward to cure flaws which we have found in the Clause. Perhaps if I explain them in moving this Amendment, it will not be necessary to detain the House so much with the others. A good example is subsection (3)—the case where the donee of the gift voluntarily disposes of it during the life of the giver either by way of gift himself for something less than full consideration.
    In that case, it is no good seeking to charge the substituted property, because it is either nil or less than full consideration, neither of which works rightly, and the method adopted by the Clause as it stands is to treat the donee as receiving a notional sum of money equal to the value of the property at the time of the alienation. That looks very attractive, but it misses a point, which is the flaw.
    It is that there are certain forms of property which, in relation to Estate Duty, enjoy certain special exemptions or reliefs, so that the method adopted by the Clause as it now stands has the unintended result of depriving those forms of property of the special reliefs and exemptions. Accordingly, we have changed the form, and the effect of the Amendment is to remove the words creating a notional sum of money; and we have substituted a provision whereby the donee is deemed to continue in possession and enjoyment of the property, and which provides that the property is to be valued at the date of the alienation.
    Amendment agreed to.
    The Solicitor-General: I beg to move, in page 31, line 21, to leave out from "donor" to "made" in line 24, and to insert:
    "and deemed for purposes of estate duty to pass on his death. no deduction shall be".
    The Amendment is designed to get rid of the same concept of a notional sum of money, in this case in relation to subsection (5), and I have explained the

    1203
    reason why it is necessary in connection with the previous Amendment.
    Amendment agreed to.
    The Solicitor-General: I beg to move, in page 32, line 11, to leave out from "gift" to "the" in line 14.
    It would be of assistance if we could consider with this Amendment the two following Amendments in lines 16 and 18.
    This is merely another series of Amendments to get rid of another enactment in relation to this notional sum of money, for the very reasons that applied in susection (3).
    Amendment agreed to.
    Further Amendments made: In line 16, leave out "of".
    In line 18, at end insert:
    "shall be treated as comprised in the gift (in addition to any other property so comprised) and as being of a principal value, as property so comprised, equal to its principal value at that time".—[The Solicitor-General.]
    The Solicitor-General: I beg to move, in page 33, line 23, to leave out from "subsisted" to the second "the" in line 26.
    Once again, it will be probably for the convenience of the House to take this and the two following Amendments in line 28 and line 31 together.
    This is another case where it is necessary to get rid of the previously enacted notional sum of money for parallel reasons.
    Amendment agreed to.
    Further Amendments made: In line 28, leave out "of".
    In line 31, at end insert:
    "shall be treated as comprised in the property in which the interest subsisted (in addition to any other property so comprised) and as being of a principal value, as property so comprised, equal to its principal value at that time".—[The Solicitor-General.]
    The Solicitor-General: I beg to move, in page 33, line 45, at the end to insert:
    (14) Where under any trust or power relating to settled property income arising from that property is accumulated, the accumulations shall not be treated for the purposes of subsection (8) or (12) of this section as derived from that property.
    This Amendment involves a different point. It was not desired to charge accumulations of income. At present,
    1204
    under subsection (8), the charge is imposed upon the property comprised in the settlement at the time of the death of the donor, except in so far as that property neither is nor represents that which is derived from the property originally comprised in the gift. There is a parallel exception relating to cases within Section 43 (12) of the Finance Act, 1940. The difficulty is that accumulation of income would be property derived from property originally comprised in the gift.
    Amendment agreed to.
    6.15 p.m.
    The Solicitor-General: I beg to move, in page 34, line 4, at the end to insert:
    "and any property which for the purpose of estate duty on a death falls by virtue of any provision of this section to be valued as at a time before that death shall, for the purposes of subsection (10) of section seven of the Finance Act, 1894 (which provides that the same property shall not be twice aggregated or twice charged on the same death), be treated as distinct from the same property falling to be valued as at some other time for purposes of duty on the same death".
    It is very difficult to explain this Amendment quickly. The relevant Section 7 (10) of the 1894 Act is designed to prevent double taxation. This difficulty did not arise while the Bill adopted the method of converting property into a notional sum of money, but now that property is allowed to remain, for instance, in the possession of the done or deemed to be, there is a difficulty, because the relevant subsection of the 1894 Act would apply in a case where there was no element of double taxation, unless some express provision were made.
    It is much easier to explain this by reference to a concrete example. Suppose a father made two distinct gifts, one to his son of a house worth £5,000—and let us keep it at £5,000 value all the time to avoid complications. Suppose that a second gift of £4,000 is made to trustees for the benefit of the son and other members of the family. The duty should be on £9,000, the total sum of the two gifts. Suppose that before the father's death the son sells the house to the trustees of the settlement for £4,000. He has, in terms of subsection (3), voluntarily divested himself of the house for something less than full consideration. He is to be treated under the Amendment which has just been accepted as continuing to have possession and enjoyment of the house, to be valued at the date of

    1205
    the alienation, and the son's liability, apart from Section 7 (10) of the 1894 Act, is £5,000.
    Suppose that the trustees were still owning the house at the father's death. The house is comprised in the settlement when it represents the £4,000 paid for it and the trustees' liability would be £4,000, apart from the relevant subsection of the 1894 Act, but, of course, it could be urged that if the relevant subsection of the 1894 Act applied as to £4,000, that is to say, four-fifths of its value, duty was being charged on the house more than once in respect of the same death. That obviously is not the result desired and, for that reason, we invite the House to enact the words which get rid of the difficulty.
    Amendment agreed to.
    Mr. Powell: I beg to move, in page 34, line 16, at the end to insert:
    "except as provided by the following sub-section—
    (17) This section, except subsection (11), shall not apply to a gift made, or a disposition or determination effected or suffered, before the tenth day of April, nineteen hundred and fifty-seven, where—

    (a) if the deceased had died at the end of that month and this section had been expressed to apply to a death at that time, duty would by virtue of this section have been chargeable by reason of the gift, or of the disposition or determination on property not chargeable in accordance with the law then in force, or on a value determined as at a date earlier than under the law then in force; and

    (b) within twelve months of the death of the deceased or such longer period as the Commissioners of Inland Revenue may allow, the persons accountable for the duty chargeable by virtue of this section (or such of them as appear to the Commissioners to be materially interested) elect that it shall not apply to the gift or to the disposition or determination, and give notice in writing of their election to those Commissioners.

    The Amendment fulfils the undertaking which was given by my right hon. Friend in Committee and it does it in the following way. It provides that where, at the time of the publication of the Bill, there was in the hands of a donee property which, under the law as it stood at that time, and, indeed, under the law as it will stand until the Royal Assent is given to this Bill, attracted no Estate Duty, those accountable for duty shall be able to exercise their option for benefit of the old law and not be treated under the
    1206
    new law. That is to say, property which at the time of the publication of the Bill was free of Estate Duty shall not be made subject to Estate Duty by this Bill if the person who would be accountable for the duty exercises an option to that effect.
    The reason why an option is given as between the old law and the new law in such a case is that the object of the Amendment is to relieve and not impose an extra burden. There might be cases where the new law might result in less duty being leviable on the property at that time in the hands of the donee. It is not the object of the Amendment to deny the benefit of the new law in such cases: its object is to relieve those who might have been prejudiced by the operation of the new law.
    Sir Patrick Spens: In thanking the Minister for what he has done, may I say that it took me a long time to discover that this Amendment contained the simple explanation which he has given to the Committee? Having studied paragraph (a) several times, I had come to the conclusion that it carried out what the Minister desired, although the true construction of the word "then", and the exact point of time inferred, made me scratch my head a lot. However, I am satisfied that the Amendment carries out what was intended, and I am much obliged to my hon. Friend.
    Mr. E. Fletcher: I find myself in the same position as the right hon. and learned Gentleman in this sense, that I had to scratch my head several times before I understood what the Amendment was intended to do. I cannot say that I agree with the right hon. and learned Gentleman when he says that he is satisfied with the explanation given by the Minister. If he is satisfied with that explanation, it makes me more suspicious than I was originally. My suspicions are increased when I find that the hon. and gallant Gentleman the Member for Cheltenham (Major Hicks Beach) had an Amendment to the Chancellor's Amendment on the Notice Paper last week which has been withdrawn, so I gather that he is satisfied.
    Major W. Hicks Beach Major W. Hicks Beach (Cheltenham)indicated assent.
    Mr. Fletcher: The fact that he and the right hon. and learned Gentleman are both so satisfied and happy about the

    1207
    Amendment should give us cause for some hesitation.
    When this matter was considered during the Committee stage, the Chancellor, in response to the Amendment then proposed by the right hon. and learned Gentleman, indicated what he proposed to do. As a result, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and my hon. Friend the Member for Sunderland, North (Mr. Willey) and myself said that we would prefer to await the Amendment which the Chancellor promised to put down for the Report stage before saying whether we thought it went too far or not. I hope that before we part with the Amendment we shall have further explanation from the Minister, in the absence of which, it seems to me, it goes too far.
    As I understand the position, it was pointed out to the right hon. and learned Gentleman that the retrospective effect of Clause 16 would create a hardship in cases where the donee of a gift inter vivos had parted with the gift. I think that he based his case upon the fact that it was only where the donee had parted with the subject matter of the gift that hardship would arise. That was the point taken by my hon. Friend, that if the donee of a gift had not parted with the gift then no hardship would arise, and there was no need to change the operation of the Clause as originally introduced. I would like the Minister to tell us whether, in his opinion, this Amendment applies only where the donee has parted with the gift or whether it applies equally when the donee retains the gift, the subject matter of the disposition.
    Mr. Frederick Mulley: I share the difficulties that have been expressed about trying to understand this Amendment and, in particular, paragraph (a). The Financial Secretary will recall that when we debated this during the Committee stage we, on this side, tried to draw a distinction between two classes of gift that were aimed to be caught by the Clause.
    There was, first, what the Chancellor accurately and dramatically described as the "disappearing trick". Secondly, there was the problem which the proposed Clause created in respect of bonus shares and matters of that kind. It was argued
    1208
    forcefully that there was a distinction between the two classes involved in this matter. No one was prepared to defend the disappearing trick—which was a purely legal but not very reputable device to avoid Estate Duty—and the bonus share device of avoiding Estate Duty, which, at least, had the sanction of several judicial decisions.
    I am not clear from the form of paragraph (a) whether this will catch the disappearing trick in the sense that the gift of the shares, or Treasury bills, or whatever it is that is part of the operation, will be caught if the gift was made before 10th April, but which did not technically disappear until some time after that date. That is one point on which we need further clarification. To extend the concession to the disappearing trick procedure, which any legal advisers must have advised the persons concerned might result in legal difficulties, is going much too far.
    Mr. Powell: With the leave of the House. I will confirm that this will only relieve that property, or amount of the value of that property which, at the date of the publication of the Bill, had actually become, under the law as it then stood, free of Estate Duty, either by the alienation of the gift, or qua bonus shares, or by virtue of a difference in valuation; but it will only apply where freedom from Estate Duty had actually been achieved by this date under the existing law.
    Mr. E. Fletcher: Will the Minister say that it will apply equally, whether the donee retains the property or has parted with it?
    Amendment agreed to.

  Third Schedule. —(CAPITAL ALLOWANCES IN RESPECT OF MACHINERY AND PLANT.)
  Amendment made: In page 42, line 5, after "shall", insert "or may".—[The Solicitor-General.]

  Fourth Schedule. —(OVERSEAS TRADE CORPORATIONS: MODIFICATIONS OF INCOME TAX ACTS.)
  Mr. Roy Jenkins: I beg to move, in page 43, line 45, to leave out from the beginning to "section" in line 46.
  This is really a paving Amendment for the next one, namely, in page 43, line 48, at the end to insert:

  1209
  "shall have effect in relation to an Overseas Trade Corporation as if there were left out of that section—
  (a) in subsection (1) the words unless carried out with the consent of the Treasury'; and
  (b) subsection (4)".
  These two Amendments deal again to some extent with a point which was raised during the Committee stage, and to which we received an extraordinarily unsatisfactory answer from the Government. Despite having had rather bad experience, on the whole, during the Report stage, we have not entirely given up hope that on points on which we had a bad answer during the Committee stage we may get a better answer now. As we draw to the conclusion of the Report stage, therefore, this Amendment may provide an opportunity for such an improvement in the Government answer.
  The point raised here is that we, throughout the entire consideration of Part IV of the Bill, have been constantly confused as to what is the intention of the Government about future policy on the migration of companies. In the past we have always understood that one of the main reasons why we must have the complicated piece of legislation which constitutes Part IV of the Bill, why we have had to make considerable sacrifices of revenue and why there had to be considerable sacrifices on our balance of payments was because it was essential that companies operating overseas should retain their seat of control in London, and it was difficult for them to continue to do so as long as this special concession to O.T.C.s was not made.
  1210
  6.30 p.m.
  If that is the case, and the concession which is being made is at considerable cost to the Revenue and to our balance of payments position, it is by no means clear why we wish in future to maintain the possibility of companies emigrating. These Amendments are for the purpose of deleting the part of the Section of the Income Tax Act, 1952, which enables Treasury permission to be given in certain circumstances.
  I am very glad to see the Lord Privy Seal here taking part in our deliberations on the Bill. I am sorry that we did not see him here more at an earlier stage. I think he would have been shocked by some of the replies made by the Chancellor to the very important and detailed points which were raised. It would be very interesting if we could have the views of the Lord Privy Seal on whether he thinks the Chancellor is doing better at the moment than he was doing at this stage in 1955.
  We have been glad to listen to the Economic Secretary replying to points, but perhaps we might now have the Lord Privy Seal replying to this rather important Amendment as a symbol of his interest in the Bill although he has not previously been here as much as we would have wished. At all events, we welcome his presence, for I think it is a sign that he regards the Amendment as important, as we do. Even if he is unable to speak except on the question of the Chancellor's record, I hope that we shall get a better reply from the Economic Secretary than we have had on previous occasions.

ROYAL ASSENT
6.32 p.m.
Message to attend the Lords Commissioners;
The House went:—and, having returned;
Mr. SPEAKER reported the Royal Assent to:

1. National Health Service Contributions Act, 1957.

2. Maintenance Agreements Act, 1957.

3. Cheques Act, 1957.

4. Superannuation Act, 1957.

5. Housing and Town Development (Scotland) Act, 1957.

6. Legitimation (Re-registration of Birth) Act, 1957.

7. Thermal Insulation (Industrial Buildings) Act, 1957.

8. Advertisements (Hire-Purchase) Act, 1957.

9. Parish Councils (Miscellaneous Provisions) Act, 1957.

10. Representation of the People (Amendment) Act, 1957.

11. National Health Service (Amendment) Act, 1957.

12. Exchequer and Audit Departments Act, 1957.

13. Judicial Offices (Salaries and Pensions) Act, 1957.

14. Ministerial Salaries Act, 1957.

15. Electricity Act, 1957.

16. Aberdeen Harbour (Superannuation) Order Confirmation Act, 1957.

17. Baird Trust Order Confirmation Act, 1957.

18. Glasgow Corporation Order Confirmation Act, 1957.

19. Kilmarnock Corporation Order Confirmation Act, 1957.

20. Aberdeen Corporation Order Confirmation Act, 1957.

21. University of Exeter Act, 1957.

22. Buckinghamshire County Council Act, 1957.

23. London County Council (Money) Act, 1957.

24. Croydon Corporation Act, 1957.

25. Tyne Improvement Act, 1957.

And to the following Measure passed under the provisions of the Church of England Assembly (Powers) Act, 1919:
Channel Islands (Church Legislation) Measure, 1931 (Amendment) Measure.

FINANCE BILL
Mr. Mitchison: I beg to second the Amendment.
The Amendment relates only to overseas trade corporations. The present position is that an overseas trade corporation gets the advantages which we have been discussing for some time because it is thought that they will encourage its trade abroad and enable it to conduct its trade on competitive terms. These arrangements are intended to be an alternative to an overseas trade corporation becoming a non-resident company by transferring its business abroad.
That is the whole object of this part of this Bill. It is or is not a satisfactory alternative. We have already provided for the company itself to contract out of qualifying as an overseas trade corporation and it therefore rests, subject to the necessary qualifications, with the company itself.
We have heard from the Financial Secretary several times sound objections to hopping in and out. This is not so much hopping in and out, as first hopping in and then skipping out to such a distance that one is out of range. If a company once decides that it should be an overseas trade corporation, it ought not to be able, having so decided, to migrate afterwards.
It is true that Treasury consent is required at present, but we have asked the Government to say whether there will be any change in their present policy of allowing those consents freely, and we have been told that there will be no change-at any rate, we have not been told that there will be a change, and in the absence of any indication of a change we think it wrong that a company, having become an overseas trade corporation by its own election, or having continued as such a corporation by its own election, should at some time afterwards do the one thing to which the Bill is supposed lo present a feasible alternative, namely, to skip out of the whole picture and become a non-resident corporation actually directed and with its seat abroad.
For that reason we think that the Amendment has not only the general

1213
advantages which were argued in Committee, and which I will not repeat, but the particular advantage of meeting the real intention of the Government as we understand it to be in relation to overseas trade corporations.
Mr. Birch: Both the mover and seconder of the Amendment are right in saying that one of the objects of overseas trade corporations is to retain control in this country—but that is not their only object. Our objection to the Amendment is simply that if it were passed, and no option whatever was given to the Treasury to allow migration, it would mean that a company might be put into an impossible position owing to local legislation in another country, which might lay down that control of certain companies had to be in that and not this country. It might make it impossible, politically, for a company to carry on in a certain area.
It would also have the effect of making it impossible for a subsidiary company to issue shares or debentures. We therefore believe that the Amendment is impracticable; in fact, the question of any control of a company going overseas is most carefully looked at, and if the Revenue objects on tax grounds it goes to a panel presided over by Lord Kennet. We shall certainly continue to exercise most rigorous control in the matter.
Mr. H. Wilson: We realise that the answer given by the right hon. Gentleman on this occasion had to be fairly short, but, even so, it shows that the Government really have not the confidence they claim to have in the concept of overseas trade corporations. When the Chancellor introduced his Budget we understood that one of the main reasons for these corporations was the fear of the Government that, as things were going on, more and more British-resident companies would transfer themselves to other countries—and not only shipping companies. It was panic in regard to shipping companies which led to the insertion in the Bill of the Clause which deals with investment allowances for shipping companies and I shall not refer to that now.
We understood, however, that the Government felt that by creating this uniquely favourable position for companies trading overseas the whole question of migration would be very much limited. We discussed the subject of migration very
1214
briefly in Committee, because we were then proceeding upon a timetable, owing, again, to the unique degree of co-operation that we have given the Government at all stages of the Bill—not because we liked the Budget, and certainly not because we like the Government, but because we felt it reasonable to facilitate the Bill owing to the fact that other important Measures were to be discussed.
All the same, we would have thought that, having given the answer that they did in Committee upon the general question of migration, the Government would have been able to accept this proposal, because it should not be necessary for any overseas trade corporation, with the very special facilities given to it, to want to migrate, We have been extremely perturbed about the attitude of the Government in relation to applications for migration. I think it was in June of last year that the House debated at considerable length the most regrettable decision of the then Chancellor of the Exchequer —now the Prime Minister—to permit the sale of the Trinidad Oil Company to an American dominated concern.
Hon. Members on both sides of the House felt that that was a regrettable decision. We know that it had to be taken because, as a result of a very expensive speech of the Chancellor at Newcastle, we lost so much gold and so many dollars that we had to recover them by selling off one of our assets. It may be that after the latest speech of the Chancellor last week we shall have to sell off another of our assets. The Amendment would prevent a recurrence of that irresponsibility on the part of the Government.
We have had nothing from Government spokesmen at any stage of our proceedings to show the principles upon which they judge applications for migration, and if we do not press the matter to a Division now it is only out of consideration for the timetable that we, together with the Government, are trying to operate. I ask my hon. Friends to allow this matter to go without a Division but I should not like the Government to think that we are in any way satisfied either with their attitude upon the question of migration or upon the question of the Treasury's powers in relation to

1215
migration as provided in the Clauses relating to overseas trade corporations.
Amendment negatived.

Fifth Schedule.—(RELATION OF EXEMPT TRADING INCOME TO DISTRIBUTIONS.)
Amendment made: In page 45, line 32, after "any", insert "of its".—[Mr. Powell.]

Sixth Schedule. —(CHARGE TO TAX IN RESPECT OF DISTRIBUTIONS MADE OUT OF EXEMPT TRADING INCOME.)
Mr. Powell: I beg to move, in page 50, to leave out lines 34 to 44 and to insert:
(ii) if the person to whom a grant or loan is made is also an Overseas Trade Corporation and the grant or loan, or any part thereof, constitutes trading income of any other Overseas Trade Corporation, that other Overseas Trade Corporation shall, subject to the provisions of Part IV of this Act relating to double taxation relief, be entitled to repayment of income tax deemed to have been deducted under the foregoing provisions of this paragraph and subsections (2) to (4) of section one hundred and ninety of the Income Tax Act. 1952, shall apply for the purposes of this paragraph as they apply for the purposes of that section, and.
This is the corresponding Amendment in regard to grants and loans to that which the House has already made in regard to dividends, in Clause 25.
Amendment agreed to.

Ninth Schedule. —(REPEALS.)
Mr. Powell: I beg to move, in page 61, line 12, column 3, at the end to insert:
"in subsection (6) of section one the definition of entertainment'".
This Amendment repeals a definition of "entertainment" which, happily, is now obsolete owing to the restriction of Entertainments Duty to cinema and television shows.
Mr. H. Wilson: I will not take the risk of having this matter talked out by saying what we think about this important Amendment. For the same reason, I will also defer the usual comments made at this stage upon this very long Bill, until we have the Third Reading on Friday.
Amendment agreed to.
Bill to be read the Third time Tomorrow and to be printed. [Bill 119.]

ROAD TRANSPORT LIGHTING BILL [Lords]
Read a Second time.
Bill committed to a Committee of the whole House.—[Mr. Barber.]
Committee Tomorrow.

TANGANYIKA AGRICULTURAL CORPORATION BILL
Considered in Committee; reported, without Amendment; read the Third time and passed.

ARUNDEL ESTATE BILL [Lords] (By Order)
Order for Second Reading read.
Motion made, and Question proposed, That the Bill be now read a Second time.
7.0 p.m.
Sir Hugh Lucas-Tooth: This Bill originates from an Act of Parliament passed as long ago as 1657. Under that Act, the Arundel estates were settled in tail male, that is to say, they were given by the then Lord Arundel in such a way that they had to pass to the eldest son of each successive owner in succession or, in default of an eldest son, to whoever was the senior male member of the Howard family. The Act contained an unusual provision, that is to say, it made entail unbarrable. In ordinary language, that means that each successive owner was prohibited from disposing of the property. It is, of course, contrary to the policy of our law to tie up property indefinitely or for long periods. In the ordinary case, the maximum period is the life of someone living and twenty-one years after, what is known as the "Rule against perpetuities".
I think that there is a great deal of misapprehension, even in this House, about "entails". The "tenant in tail", that is, the person who succeeds to entailed property, can, in fact, sell or dispose of that property as if he were the absolute owner, and he can deal with the proceeds

1217
as if he were the absolute owner. That is so under an Act passed as long ago as 1833, but, unfortunately for present purposes, under that Act an exception was made and estates which were entailed by Statute were not included, and the statutory provision still prevails, with the result that the Arundel estates are still bound by the old Act of 1627.
The main purpose of this Bill is to repeal that restraint, that is to say, to put the Duke of Norfolk in the same position as any ordinary landowner. In fact, the object of the Bill is to bring this landowner into line with the general law. There are quite a number of precedents in similar cases. The Marquess of Abergavenny's Estate Act of 1946, the Shrewsbury Estate Act of 1954 and the Willoughby de Broke Estate Act of 1956 are the three most recent. If hon. Members refer to those Acts they will see that they are complicated and contain various ancillary provisions. Those provisions vary in each case, because, of course, the circumstances in each case vary considerably. But whenever such a change in devolution of property is made, the rights of third parties must be affected. We are not dealing here with something which simply belongs to the promoter of the Bill. We are dealing with something in which a considerable number of other people have an interest. In fact, there are twenty-seven living male descendants of "Thomas the ancestor"—as he is called in the Bill—the Lord Arundel who made the original settlement under the Act of 1627.
Mr. Leslie Hale: The hon. Gentleman has referred to the descendants of "Thomas the ancestor" as being twenty-seven. It is reported in history that in the early nineteenth century the duke decided to entertain all the descendants of "Thomas the ancestor" and he found that there were 6,000.
Sir H. Lucas-Tooth: I should not like to say how many there are. I said that there are twenty-seven living male descendants named in the Bill, and all those have some interest in this property under the law as it now stands. Of course, if the Bill is passed, that is to say, if the entail is made viable, those twenty-seven people will lose their rights.
If Parliament legislates so as to deprive individuals of property or rights, it always takes care to see that they are
1218
fairly treated. In the case of adults they can, of course, agree to whatever the Bill provides. But if they are under age, they cannot give their consent, and, in fact, they have to be represented by someone else, usually the Treasury Solicitor. There are Standing Orders in another place which provide elaborately for these matters.
In this Bill, the necessary provision is made by Clause 7—I refer to it because there is an Instruction in the name of the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) on the Notice Paper which deals with this point—for a fund to be set aside in order to make compensation for those who lose their rights under Clause 6 which is the Clause that takes away the unbarrable entail. This compensation fund, which is just short of £230,000, will come entirely out of the estate of the promoter and the whole of it is permanently lost to him and to his immediate family.
I think that the hon. and learned Member has some point here on Estate Duty. It is, of course, true that when we alter the devolution of property, we may alter the incidence of Estate Duty. I cannot say how Estate Duty will fall on that fund until I know how, in due course, it will devolve, but I can tell him that, whatever may happen, there will be no saving of Estate Duty to the Duke and his immediate family by reason of the setting aside of this fund. This compensation fund is a necessary condition imposed upon the promoter of the Bill by the settled practice of Parliament, and I think it will have the general approval of this House.
Very much of this Bill as it now comes before the House is concerned with Arundel Castle, and, in view of the intention which the Duke of Norfolk has made known to seek to leave out these provisions when the Bill comes before a Select Committee, I am not sure how far the House will wish to discuss these matters now. But it seems to me that, on the whole, it will be helpful to hon. Members if I say something about this part of the Bill because there are questions which will certainly arise with which hon. Members would like me to try to deal at this early stage.
There has been a castle at Arundel since before the Norman conquest. Part of the fortifications, which are still to

1219
be seen, are said to date back to before that, to the time of King Alfred. The keep, which is still largely in its original condition, is of very great antiquity. On the other hand, a large part of the castle has been rebuilt in much more modern times, the greater part of it in the nineteenth century and some in the eighteenth century; and even so, most of it in the early part of the nineteenth century, when, on the whole, taste was somewhat better than it became in the latter part of Queen Victoria's reign. Some part of it was completed in the later part of the nineteenth century but strictly following the lines of the earlier building.
I do not want to enter into controversy about the aesthetic merits of the castle; that would not serve any useful purpose. I think I will get agreement from those who know the castle when I say that some of the building is beautiful, nearly all of it is interesting, the park and grounds surrounding it are lovely, and the castle contains a large collection of pictures, books and furniture of great historic and artistic importance. This collection is not only of value and importance intransically—or rather, the pieces are—but is most valuable as a collection that has been made over the ages in this one place. In fact, in 1956, more than 160,000 visitors visited the castle, and paid more than £16,000 in entrance fees.
The Bill provides that the castle, together with the right to receive this entrance money, should be given to trustees as a gift to the nation and as a residence for the Earl Marshal. The Bill provides that, together with the castle, there should be a capital endowment of £250,000 which would yield a further £12,500 a year for the maintenance of the castle.
Mr. E. Shinwell: Is the hon. Member arguing in support of these proposals?
Sir H. Lucas-Tooth: I am in some difficulty here. I am explaining the provisions of the Bill which have given rise to a very great deal of controversy. They are still in the Bill. It is right and fair that I should tell the House what they are, how they would work and their purpose, and why they are to be dealt with as I will in due course explain.
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This proposal of the gift of the castle and the endowment of trustees has been criticised in several quarters and on various grounds. In the first place, it has been suggested that it was wrong to link the gift with the office of Earl Marshal. I think the objection was on constitutional grounds and it was first put in this House by the right hon. Member for Lewisham, South (Mr. H. Morrison).
Mr. Julian Snow: On a point of order. I apologise to the hon. Member for Hendon, South (Sir H. Lucas-Tooth) for interrupting him. Are we not to have the benefit of some representative of the Government on the Front Bench in connection with this Private Bill?
Mr. Speaker: It is not a point of order, I am afraid. It is not in my control in any way. This is a Private Bill, and the House is quite able to come to a decision upon it by itself.
Mr. Herbert Morrison: There is not even a Whip on the Government Front Bench to carry a message to some Minister.
Sir Robert Boothby: Further to the point of order. It is a rather important Bill and the House may desire guidance from the Government. Is there no chance of action being taken to ask for a representative of the Government to be present?
Mr. Speaker: I hope that the hon. Member for East Aberdeenshire (Sir R. Boothby) will make some representations to his hon. Friends on the matter. It is not my place to make representations.
Mr. Snow: Further to the point of order. I respectfully accept what you say, Mr. Speaker. Although this is a Private Bill, am I not right in saying that the Government have a responsibility at this stage? Or are they giving a demonstration of neutrality?
Mr. Speaker: Most Private Bills concern the activities of some Department of the State. A Bill may concern, for example, the Ministry of Housing and Local Government, even if it is a Private Bill. I do not know whether any Minister has been detailed to look after this Bill and I do not know whether the Government have a view on the matter.
Sir H. Lucas-Tooth: I was saying that objection had been taken on the ground that it would be wrong to link the gift of the castle with the office of Earl Marshal. The castle has, of course, been associated with the office of Earl Marshal for a considerably longer period than it has with the title of the Duke of Norfolk. It is not unreasonable to suggest that if those two offices at any time should diverge the castle would more properly be linked with the office of Earl Marshal than with the Duke; but that is obviously a matter of opinion.
Mr. Hale: Perhaps the hon. Member for Hendon, South (Sir H. Lucas-Tooth) would refer to page 7 of the Bill. I am not opposed to this, and am sympathetic with the Instruction Motion, but there has been very bad publicity. It is not true to say that the castle is limited to the Earl Marshal. If the office of Earl Marshal is abolished then, under the definition in Clause 2, line 22. the castle reverts to the family of the Duke of Norfolk. In other words, the Earl Marshal part of the Bill has not been clearly represented by the Duke's advisers and they are responsible for a good deal of the opposition, which would not have developed had that been made clear.
Sir H. Lucas-Tooth: I would not disagree with the hon. Gentleman that there has been a great deal of misapprehension about the Bill. If the office were to be abolished something would have to he done about the castle, and it was for that reason that this final gift was put in and not merely with the object of preserving some special interest in an event which is not very likely to occur within the near future.
Another objection has been that no private gift of this sort ought to be made while retaining some private interest. Many hon. Members have felt that and have argued that it was wrong to seek to reserve some interest. Indeed, that was the point of the hon. Member for Oldham, West (Mr. Hale) when he rose to interrupt me. We all know that an Englishman's home is his castle. [HON.
MEMBERS:" Oh."] We all certainly wish that that was So. [HON. MEMBERS: "Hear, hear."] There is much truth also in the converse, that an Englishman's castle should be a home. I think that most people, when they go to see one of
1222
these castles or houses, much prefer to find that someone is living in it, caring for it and loving it, rather than that it should be a mere empty museum left by those who lived there and become nothing but a record of antiquity. I believe that is a very generally held view. It is in no sense of the word a party issue.
The second criticism which has been made against this proposal is the suggestion that there is some intention, or at any rate that the result of it may be, that there will be avoidance of tax, or avoidance in some way of Estate Duty. I say straight away that, so far as I know and so far as I have been able to ascertain, there is no intention whatsoever to engage in any subterfuge or device in order to avoid payment, either of Income Tax or Estate Duty, or any other form of taxation as a result of the Bill, if there had been any such intention it would certainly have been the duty of the Treasury to raise the matter and to insist upon necessary amendments being made.
I think it fair that I should also point out to hon. Members that the trustees proposed to be appointed under the Bill were the Master of the Rolls and the Chairman of the National Trust, two gentlemen with whom many hon. Members on both sides of this House will be acquainted. It will be generally agreed in all parts of the House that neither of those people would be the sort of man to lend himself to any kind of ramp or subterfuge whatever.
Sir R. Boothby: Is my hon. Friend now advocating to the House that the Master of the Rolls, and so on, should be appointed for various purposes? To what is his argument addressed? I gathered from him that all this was out by arrangement with the Duke. If it is not out and he is addressing his argument to it, it creates an entirely different situation. In arguing the case he is prejudicing the Bill if it is the intention of the promoters not to put any of this into it. What is the point of his argument?
Sir H. Lucas-Tooth: My hon. Friend will see that this is in the Bill now and that these criticisms have been made.
Sir R. Boothby: I thought that they had been withdrawn.
Sir H. Lucas-Tooth: Nothing can be withdrawn until the Bill has had a Second Reading in this House. I think it is my duty here to explain why the Bill is in its present form and what it is proposed to do to alter it. My hon. Friend may not be aware that hon. Members on both sides of the House are exercised about the merits of the Bill. I think it is fair to say what is there, what are the arguments for getting it through and what are the arguments for taking provisions out.
Sir Peter Agnew: I am only anxious to save the time of the House. I have before me the document headed:
"Further statement on behalf of …(the Promoter)."
dated 25th June, the third and final paragraph of which reads:
"If the Bill is passed, amended in this way, it will contain nothing but the provision for putting an end to the unbarrable entail and such ancillary provisions as may be required by Parliament."
Does my hon. Friend wish to deploy to the House arguments for putting into the Bill all these provisions which it is the proposal of the promoter to strike out of the Bill?
Sir H. Lucas-Tooth: I am not proposing to do anything of the kind. I am proposing to say why the Bill comes forward in this way and why the criticisms which have been levelled are not just criticisms, but why, nevertheless, it is proper to leave this part out of the Bill.
I shall not deal with that any longer, except to say that it has been suggested that, if the Bill is passed, these provisions are either unnecessary or arguing for a special privilege. I think that is a powerful argument. It is not necessarily conclusive. It may well be that it would have been better for special reasons to have included them, but no one would wish to persist in making a gift if it aroused controversy. I appreciate that and also what my hon. Friends have said in that connection. The promoter has given an undertaking, to which my hon. Friend the Member for Worcestershire, South (Sir P. Agnew) has referred. I think it right that I should read that undertaking to the House because, although hon. Members have seen it, I
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think it should go on the record and it will not do so unless I read it. The statement is as follows:
"In promoting the Bill the Duke had two main aims, first that he should be freed from the unbarrable entail imposed by the Act of 1627 and so be enabled to deal with the estates in the same way as anyone else may deal with theirs; and second that Arundel Castle and grounds should be preserved for the nation and yet retain the link between the Castle and the office of Earl Marshal which has endured a very long time.
Unhappily the second aim has given rise to controversy, and as there appeared to be a desire to delete from the Bill the provisions which relate to the Castle he has consulted those most directly concerned and now undertakes that, if the Bill receives a Second Reading, suitable amendments will be proposed to this effect.
If the Bill is passed, amended in this way, it will contain nothing but the provision for putting an end to the unbarrable entail and such ancillary provisions as may be required by Parliament."
I think it right that I should tell the House that it is the desire of the promoter to make arrangements so that the castle and its contents may continue to be available for public enjoyment. If the Bill is passed and the Amendments proposed are made, it will be open to him, not to carry out the precise provisions of this Bill, but to carry out similar provisions so as to do what he intends. I think it right and fair that I should tell the House that that is his desire and intention. If amended, as proposed, the Bill will be in substance a simple Measure, simply repealing the unbarrable entail imposed by the Act of 1627, and making compensation so as to accord with the Standing Orders of another place. It will put the owner of Arundel estate in the same position as any other landowner. I hope that the House will give the Bill a Second Reading.
Mr. H. Morrison: Could the hon. Member indicate in some more precise terms how it is proposed to amend the Bill and what Clauses are to be left out, so that the House will know what it is doing when my right hon. Friend the Member for Easington (Mr. Shinwell) continues the debate, as I hope he will?
Sir H. Lucas-Tooth: I am in some difficulty on that because, from the Instructions to be moved, I do not know precisely what may be the course of events.
Mr. Morrison: What do the promoters propose?
Sir H. Lucas-Tooth: I am in this difficulty that I am not in charge of the Bill—[An HON. MEMBER: "Who is?"] —The Chairman of Ways and Means is in charge. I happen merely to he an hon. Member speaking in support of the Bill who, as an individual, has had some means of ascertaining the views of the promoters. I have no control over the business of the House or of the Committee, and, indeed, have no control over the vote of Parliament. Therefore, I cannot give the right hon. Member the sort of answer I should like to give him, but perhaps I may be allowed to say that if the Amendment in the name of my hon. Friend the Member for Gravesend (Mr. Kirk) is called, I certainly would not oppose the acceptance of that Instruction in this House.
That is all I can say. I cannot say that I would accept it any more than the right hon. Member can say that he would accept it, but I can say that I would advise the House that the Instruction in my hon. Friend's name would, in fact, precisely give effect to the undertaking which I have read subject only to the necessary consequential Amendments which I am quite certain the right hon. Member would not wish me to deal with here and now.
7.29 p.m.
Mr. E. Shinwell (Easington): I beg to move, to leave out "now" and at the end of the Question to add "upon this day six months"
The rôle of hon. Members is twofold: one is undoubtedly to protect the rights of individuals, but the other is to safeguard the rights of the community. It is precisely because my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) and other hon. Members with myself desire to conform to both principles that we decided when this Bill was introduced in another place to offer our strong objections to its passing. I am bound to say that, having listened to the speech of the hon. Member for Hendon, South (Sir H. Lucas-Tooth), I am more confused than ever about the intentions of the promoter.
Reference has been made to the history of this affair. There is a very
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recent history since the Bill was introduced in another place. First, there was a good deal of publicity in the newspapers and among the public and a great deal of apprehension about the provisions of the Bill. As a result of public opinion and the pressure of hon. Members on both sides of the House—let it not be forgotten, on both sides of the House—the promoter and his supporters decided to moderate their attitude and, in consequence, the latest memorandum provides, not for the acceptance of the original provisions of the Bill, but for the disentailment of the castle and estate, and that is all.
When those of us who were more intensely interested in the matter than some other hon. Members put our names to an Amendment, in which we indicated that the Bill might be considered this day six months, we were approached by some hon. Members opposite to ascertain our intentions, and among them was the hon. Member for Hendon, South. So far as I can understand it, their intention was to ask the House to agree to the disentailment provision, but to nothing more than that. It was on that assumption that some of us agreed to offer no objection, although some of my hon. Friends were not in support of our view. [HON. MEMBERS: "Hear, hear"] That interruption demonstrates the accuracy of my observation. We did so because there are, as the hon. Member for Hendon, South rightly said, many precedents. He mentioned three precedents, all of which have some similarity to the proposal that is now made.
Moreover, as it appeared to my right hon. Friend and myself and to others associated with us, we have no desire to prevent the Duke or anybody else doing as he pleases with what is regarded legally as his own property. We have no personal feelings against the Duke. Why should we have? Dukes may be an anachronism—there may be no need for dukes in this country; there are perhaps too many of them—but that is not the point. There is no vendetta of any sort. What we seek to do is to protect the rights of the community and prevent the resurrection of medieval privileges. It seems to me that some of the original provisions of the Bill lead us very far in that direction.

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There is, for example, the proposal that on the acceptance of the provisions of the Bill, the castle and its grounds—60 acres of ground, not the whole of the estate but 60 acres with the castle—should remain in perpetuity in possession of the Duke and his family. There is no gainsaying that provision. That is one of the provisions. The second is that the castle and the grounds should be transferred to a body of trustees, not to the National Trust. To make a digression, may I say that if the Duke had wanted to do the right and clean thing, and something understood by the general public and by hon. Members, he could have offered his property to the National Trust on a basis similar to other transfers and remained in possession of the house as long as he and his family live, although this may have affected some of his successors.
But it is to be transferred to a body of trustees. I do not say that the hon. Member for Hendon, South deliberately tried to deceive the House, but unwittingly he raised some suspicion because he spoke about two trustees. He spoke about the Master of the Rolls—naturally one uses the most eminent names when one seeks to obtain support for one's case—and he spoke about the Chairman of the National Trust; but he forgot to mention that provision was made—and this was demonstrated in the proceedings before the Lords Committee—that these two gentlemen could appoint substitute trustees because some of the Lords who heard the case remarked, and quite wisely, that the duties were onerous and that it was obvious that the Master of the Rolls and Chairman of the National Trust would not be able to undertake them.
Sir H. Lucas-Tooth: I think that the right hon. Gentleman has mistaken my argument. The point I made was that these two gentlemen named in the Bill had presumably consented to serve as trustees. I said that they were not the sort of people who would lend themselves to any scheme which was of the kind which has been described in the Press and elsewhere, as the right hon. Gentleman has mentioned, as something in the nature of a substitute or ramp. I did not suggest for a moment that they were the only two trustees or that they could not appoint someone else.
Mr. Shinwell: I would not whisper a suspicion against the integrity of these gentlemen. Of course not. I would not make a suggestion of that sort. I said that these names were mentioned by the hon. Member for Hendon, South and that he forgot to mention that they need not act at all and that they could appoint substitutes. But who was the principal trustee? It was the Duke himself and the Duke, under the provisions of the Bill, retains remarkable powers in spite of being only one of a body of three trustees.
I think it is right to say that if the hon. Member for Hendon, South aims to proceed with the original provisions of the Bill, then we shall have to discuss the whole of the proceedings which were before the Lords Committee. I think that they would surprise hon. Members and I advise them to get a copy of the proceedings. For the purpose of greater accuracy I obtained one. [HON. MEMBERS: "Read it"] It is all here. If I read it I should not be wasting the time of the House, but I will not take up the time of the House in dealing with every argument adduced by learned counsel—very learned counsel, indeed, very astute, learned counsel before very easy-going Members of another place. I know that I must not criticise Members of another place, but I am reminded of the old song, "Pals, pals, jolly old pals". I am bound to say that they expressed doubts in spite of their anxiety to help the Duke, and I am not surprised.
We have made many discoveries as a result of the introduction of this Bill. The hon. Member for Hendon, South referred to the revenue from admission charges. That is very interesting indeed. I have them all here over a period of years. The average is about £15,000 a year. That is not at all bad. There are some people who imagine that as a result of this proposed transfer, if, indeed, it is a transfer at all, the public would be admitted free; but, of course, that is not the intention at all. There is much more than that in it. In point of fact, the trustees will require the £15,000 annually —and that is the estimate for the next few years and perhaps for many years to come—to enable them to maintain the castle and the grounds in addition to the revenue derived from the endowment of £250,000 which comes out of the Strand Estates. More surprising indeed, as it

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seems to me, is that it costs more than £25,000 annually to maintain the castle and the grounds. That seems a lot of money.
There is some doubt whether the revenue derived from admission charges is subject to tax. All income is subject to tax, so we are informed by the Inland Revenue. If we set against the revenue from admission charges the loss sustained on the maintenance of the Castle—what are known as maintenance charges and loss reliefs—it is very doubtful whether any tax is paid on the revenue derived from the admission charges. I do not blame the Duke at all, for I think he has been badly advised, but there seems to be a little jiggery-pokery about the whole business, and I do not like it.
Let us come to what is now proposed. I acquit the hon. Member for Hendon, South and the sponsors of the Bill of any desire to impose upon hon. Members and the House the original provisions of the Bill. What is left? The hon. Gentleman read out the last available statement from the promoters. I will reinforce what appears in that document with something that was handed to me this evening. I did not find it myself. It was handed to me; I beg the House to believe me. Nevertheless, I do not think it is improper to mention the matter. It is a Whip sent out by several hon. Members from the other side, including the hon. Member for Hendon, South. In spite of what it said, when he sought to explain the provisions of the Bill he was obviously seeking to influence Members in support of the original provisions of the Bill. That was his intention; there is no doubt about that. I find the Whip said this, which is very strange in view of his argument tonight:
"The Bill will come up for Second Reading at 7 p.m. on Wednesday, 17th July. The Duke of Norfolk has undertaken that in view of the controversy which was aroused, he will withdraw that part of the Bill which deals specially with Arundel Castle and the Earl Marshal, and he is now only asking Parliament to put him in the same position as any other landowner by ending the restrictions imposed on him by the Act of 1627."
The hon. Member for Hendon, South sponsored that statement. What, then, was the use of arguing in support of the original provisions? It is, therefore, no use going into the history of this matter any further and explaining the original
1230
provisions. I hope hon. Members will agree with me about that.
Sir H. Lucas-Tooth: The right hon. Gentleman said earlier in his speech that I had made a private approach to him. I think it is always unfortunate to mention such matters. I would not have referred to him, but, in fact, he made a private approach to me, which was that I should speak first and he should speak second. The reason why I dealt with the castle was that I knew he would deal with it. If I had said nothing about it, his speech would have been delivered on the basis that it was surprising that I had not mentioned it. I do not want to be controversial, but I think it is right to refer to these matters. I tried to explain these provisions because I thought the House would wish to hear them, and I think that what the right hon. Gentleman is saying now is a little unfair.
Hon. Members: Hear, hear.
Mr. Shinwell: Hon. Members should not applaud until they have heard the whole of the story. It is this. You, Mr. Speaker, were good enough to ask me to speak to you this afternoon about this matter and it was you, Sir, who suggested that, although it was thought that I should open the debate, in fact it would be wise if the hon. Member for Hendon, South opened the debate. That is all. There is nothing in it at all. I mentioned the matter to the hon. Member for Hendon, South.
Mr. Godfrey Nicholson (Farnham): On a point of order. Is it not contrary to the traditions of the House that private conversations either between yourself, Mr. Speaker, and an hon. Member or between hon. Members themselves should be brought into the debate?
Mr. Speaker: In most cases that is the general rule, but I have no objection whatever to the right hon. Member for Easington (Mr. Shinwell) stating what passed between us. For my part, may I say why I said what I did? The Bill before us contains a number of provisions which the promoter now wishes to exclude. It is, as I understand the feeling of the House, these provisions which are to be excluded which have aroused the greatest amount of criticism of the Bill, and I thought that as the print of

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the Bill contains them it would be wise and would make the House more aware of the true position if the hon. Member for Hendon, South, (Sir H. Lucas-Tooth) spoke to the Second Reading and explained what the promoter in fact wants to do, which is not what is in the Bill before the House. Simply for that reason, I asked the right hon. Member for Easington whether he agreed to a change in the normal procedure—namely, that he should move his Amendment to the Second Reading after the hon. Member for Hendon, South had explained the promoter's intentions. There is nothing more in it than that, and I think the right hon. Gentleman was perfectly justified in this case in saying what he said.
Mr. Shinwell: I should never have dreamed of mentioning what happened during a private conversation but for the fact that the hon. Member was not arguing what had been agreed with some hon. Members on this side and with some hon. Members on the other side; he was arguing the original provisions of the Bill. As for the conversation, you, Mr. Speaker, have very kindly and graciously clarified that matter. Normally, I would never dream of mentioning private conversations. I think hon. Members know me well enough to know that, however guilty I may be of indulging in a little mischief and fun and games from time to time and of knocking people about, I am not guilty of any dishonourable practice, if I may say so of myself. One must speak for oneself occasionally.
The hon. Member is left, on behalf of the promoters of the Bill, with the disentailment provisions, to which I raise no objection. I shall not argue it any further. But there is another provision which is objectionable, and that is the provision which relates to compensation. The hon. Member has argued that this is based on the Standing Orders of another place. I know of no Standing Orders which justify compensation provisions, and if there are such Standing Orders, then I think that somebody on the Government benches who is acquainted with these legal matters ought to explain them to us in order to justify the acceptance of such a provision.
I do not think that hon. Members opposite will disagree with this sugges-
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tion: when the estate is disentailed and when he is free to use the estate and the revenue from the estate as he pleases and according to his own will, it is possible for the Duke of Norfolk to provide out of the estate compensation to the beneficiaries in any fashion that he pleases. It does not require an Act of Parliament to enable the Duke to provide such compensation; there is no difficulty about this at all. I have a shrewd suspicion that in the present circumstances the Duke would prefer that the matter should be left in his own hands rather than that there should be statutory provisions which compel him to provide compensation for a large number of beneficiaries over a long period of time ahead.
That is all I want to say about it. I repeat that there is no vendetta against the Duke in this matter at all and no personal feeling. It is a matter which affects the public conscience, a matter which concerns privilege, to which, I think, hon. Members on all sides of the House will rightly object. If the House cared to accept the proposal for the disentailment of the estate, I should raise no objection. On the other hand, if this proposal for compensation is pressed, I am afraid, much as I deplore the fact, that we shall have to divide the House.
7.49 p.m.
Mr. Peter Kirk: I find myself almost as baffled after having listened to the right hon. Member for Easington (Mr. Shinwell) as he professed to be baffled after he had listened to my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth). As far as I can make it out, having indulged in a very long digression, almost as long as that in which my hon. Friend indulged, about parts of the Bill which, I understand, are no longer for discussion, the right hon. Gentleman came back to the issue by saying that he accepted the main principles and raised absolutely no objection to them but that, because of a small technical point, he intends to divide the House against the Second Reading.
If the right hon. Gentleman regards that as the responsible act of a Privy Councillor, and of an hon. Member with thirty-two years' experience in this House, I do not. [HON. MEMBERS: "Oh."] This provision was contained in the Marquess of Abergavenny's Bill, in Lord Willoughby

1233
De Broke's Bill, and in the Earl of Shrewsbury's Bill. I do not recall, I was not in the House during the passage of any of those Bills—[Interruption.] The right hon. Gentleman raised no objection at the time. All those Bills went through un-opposed—
Mr. Shinwell: The hon. Member has no justification at all for what he is saying. In the case of the Bills to which he refers, no objection was raised at the time because the provisions of those Bills were quite different from the provisions of this one. The hon. Gentleman will bear in mind that the original provisions in this Bill were objected to. It was only at a later stage that the promoters moderated their attitude. Now, having moderated their attitude, they try to reinsert in the Bill a provision which was regarded as objectionable.
Mr. Kirk: I cannot accept that. The provision in Clause 7 for a compensation fund is the same provision as that contained in the other Bills to which I have referred. As I understand, that is the provision to which the right hon. Gentleman is taking objection. The part to which I, personally, and many of my hon. Friends objected was that part concerning the disposal of Arundel Castle. I think that the right hon. Gentleman was quite right to object to that, and I quite agree with what he had to say on that subject.
As I understand—and I will gladly withdraw if I am wrong—the technical point on which the right hon. Gentleman proposes to divide the House on Second Reading is that dealing with compensation for those who might lose an interest on the barring of the entail, but that is a provision that is provided in all personal Bills.
I am sorry if the right how Gentleman objects, but I have checked the three Bills to which I have already referred, and in them all there is a similar provision for a compensation fund to be set up for those who have an interest in the entail. I am sorry if I have misunderstood the right hon. Gentleman, but, as I understand, this is a technical point that goes for all barring of an entail of this kind, and I understand that it is provided in the Standing Orders of another place. Like the right hon. Gentleman, I would like an explanation of it, but it still remains a technical point, and if
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the right hon. Gentleman objects to Clause 7 of the Bill he will be creating difficulties in another place with regard to the passage of that part of the Bill to which he has no objection—the barring of the entail.
If I am called, I intend to move the Instruction standing in the name of my hon. Friends and myself which would give effect to the intention of the promoters. The result of that Instruction would, I believe, be that the Bill would become non-controversial. The only point that now appears to divide the right hon. Gentleman—and I am not talking about those who have tabled another Amendment for rejection of the Bill—and those who support the Second Reading of the Bill is purely this question of Clause 7, the compensation fund. If that is not passed the Duke of Norfolk will be £.¼ million better off than he would be if the Bill were passed. That would be the net effect of deleting Clause 7.
I therefore suggest that, to say the least, it is a little disingenuous to argue that because of this one point the whole Bill should be thrown out and that, presumably, the great expense of promoting another Bill to bar the entail must be incurred all over again. I hope very much that there will not be a Division on Second Reading, though it may be possible to carry the Bill and then, if necessary, to carry one or other of the Instructions on the Notice Paper which might put the matter in the form in which both the Duke of Norfolk and most of those otherwise opposed to the Bill would wish it to be. In those circumstances, I propose later, if called, to move, purely formally, the Instruction to which I have referred, which will give effect to what now appears to be the general wish of the House.
7.55 p.m.
Mr. J. Grimond: I only want to make two points, and I hope to make them extremely shortly. As a layman on this subject, I could have wished that the hon. Member for Hendon, South (Sir H. Lucas-Tooth), who spoke on behalf of the promoter, could have told us a little more of the effect which the Bill will have after it has been amended—if it is amended in the sense in which the promoters ask that it should be amended. I quite see the

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hon. Gentleman's difficulty. He is not, of course, speaking in any official capacity, but I wish, for instance, that he could have told us exactly what the position will be assuming that the Bill is passed in its amended form—
Sir H. Lucas-Tooth: So far as the substance of the Bill is concerned, it will mean leaving out certain parts of the Preamble, certain parts of the definition Clause—I do not think that the hon. Gentleman will be worried about that—the whole of Clauses 3, 4 and 5, certain minor Amendments in Clause 7 of a consequential nature, some consequential Amendments in Clause 8, the whole of Clause 10, consequential Amendments in Clause 14, and the whole of the Third Schedule. I am sorry to inflict this on the House, but I have been asked so many times that I thought that it might, perhaps, be helpful.
Mr. Grimond: I am grateful to the hon. Gentleman—it is good to have this on the record, though I cannot pretend that all that is registered in my mind. But what I had really hoped was that he could have told us what the real substance would be. Presumably, the Duke of Norfolk is promoting the Bill because, as we know, it enables him to deal with his property as he wishes, and confers certain advantages. I have no objection to that at all. I think that he is perfectly entitled to promote the Bill, particularly in its amended form, but I think that the House before passing the Bill, should be told, for instance, how the Revenue will be affected.
I leave that wide point, however, and come to compensation. As I understand from what the hon. Member for Hendon, South has said, and from what has been said by the hon. Member for Gravesend (Mr. Kirk), there is no what might be called unforeseen effect of Clause 7. Presumably, the Duke makes a gift of £250,000 to the people who might have benefited had the entail not been broken, but, as I think the hon. Gentleman indicated, there may, again, be certain effects on the incidence of taxation, particularly on the incidence of death duties and Surtax, and I wish we could have been told a little more. As to the main purpose of the Bill as I understand it is to be amended, I have no objection at present, but, as I say, if
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we are to pass this Measure even in its amended form, I wish that these various points could have been made clearer.
My second point relates to the curious paradox which now arises, because we are to leave in the Bill everything which will advantage the promotor and take out everything of advantage to the public. That may be quite proper, but I think that it should be put on record that, after all the public agitation, what is to happen is that, if the Bill is passed, the promoter will gain, and the public will lose an opportunity of having some control over Arundel Castle. Or they may. The Duke of Norfolk has very generously said that he will make the castle available to the public, but if the Bill is passed as amended there is nothing to prevent him from blowing it up tomorrow. It is a curious result that we are to strike out of the Bill, in the name of protection of the public, that provision from which the public would benefit.
It has been asked, particularly by the right hon. Member for Easington (Mr. Shinwell): Why did not the Duke simply make over his property to the National Trust? That is a very natural question. I have had some experience of the National Trust in Scotland, and I dare say that that would be possible. But I must say that if it is intended that this property should be handed over in perpetuity, with certain rights to the family, I do not know that the National Trust would accept it. It might or it might not. If I were advising the National Trust, it would not.
I want to draw the attention of the House to the fact that there is a genuine difficulty in dealing with this type of property. The public want to see it, and, as evidence of that fact, they pay £15,000 a year to visit the Castle. It may not be genuine. It may be a Victorian castle, but nevertheless the public like Victorian castles. It is true that it has a magnificent situation, although I myself have never been inside, and it has its battlements and a fine silhouette. What does it matter to the public whether the battlements were all built by William the Conqueror or whether some of them were put there in 1805? The public like them, and they are jolly good battlements.

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When the public go inside a house they like to see the fine objects it may contain. They also like to see personal belongings, the sponge which the owner uses or the tooth brush which his wife uses, and they like the house to look as if it was lived in. I assure the House that that is the case. I do not for a moment say that that is a reason for passing a Private Bill in the form in which it is brought before the House. I think that the promoter and supporters were extremely wise to limit it. But I do say that if the public—and we speak on behalf of the public—want this type of building and collection maintained, whether the building is lived in by the Earl Marshal or not—and I quite agree that that is a different question—at the moment there is no one body in this country which is capable of ensuring their maintenance. Special arrangements will have to be made for some of the great houses and their contents. We are not going to make special arrangements in this case but luckily the promoter himself is prepared to make provision at no cost to the country. The collections would be maintained by his generosity.
Mr. Shinwell: He has £15,000 a year.
Mr. Grimond: Yes, he has £15,000 a year, and that is a great deal of money, and the houses in which the right hon. Gentleman and myself live could be kept up pretty comfortably on that. Indeed we could leave enough over to give each other very good dinners. But I expect that the acreage of the roof of Arundel Castle is something astronomical. There are houses in the South of England the area of the roofs of which must run into acres, and the cost of making them good with lead and of repairing chimneys and so on, must run away with a good deal of money. The lesson is to live in simple little houses, like the right hon. Gentleman and myself, but there are people who are born into such houses, and let it be said again that the public like them.
I say again that we are asked to strike out of the Bill one part which gives something to the public and to leave in something which gives a great deal to the promoters. I do not necessarily object to that, but I feel that it raises greater and wider problems in the way of maintaining some of these very fine houses
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and buildings and their contents, which we all want the general public to enjoy.
8.3 p.m.
Sir Robert Boothby: I seldom remember a more chaotic or even a more idiotic debate than that which is taking place this evening, and I am not altogether surprised that the hon. Member for Orkney and Shetland (Mr. Grimond) has brought it down to the level of the sponge and the toothbrush.
I think that the issue which now confronts the House is a perfectly simple one. I believe that the great majority of hon. Members on both sides of this House would be very willing to pass a Bill bringing the entail on this estate to an end. It was passed in 1627, and is a little bit out of date. I really do not see why the Duke of Norfolk should not be in the same position as any ordinary citizen of this country, and be able to do what he likes with his own estate. It is fantastic that the 1627 entail should be continued indefinitely.
I do not agree with anything that the hon. Member for Orkney and Shetland said. It may be that this is the new rôle of the Liberal Party, now that it is becoming progressive; but we do not all want to spend the rest of our lives perambulating round and looking at large houses inhabited by dukes, and inspecting their sponges and toothbrushes. That may he his idea of a Liberal Utopia, but I think that there are better things to do on the whole. The hon. Member says that the public are passionately interested in dukes and their sponges and toothbrushes. I do not agree.
Mr. Grimond: May I draw the attention of the hon. Member to two things? First, if he will go to his own constituency he will find that there is a considerable number of people who often vote for him, mistaken though they may be, who like to go to these places, and, secondly, that he himself often writes for a paper which has a very great interest in the aristocracy.
Sir R. Boothby: There are no dukes in my constituency, and, as far as I know, there are none in the constituency of the hon Member, and very few sponges or toothbrushes, either.
I believe that the House wants, as quickly as possible, to disentail this

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estate, and that it does not want to go any further than that. It does not want to endow this estate for future Earls Marshal indefinitely, for reasons which may be good or bad, but I believe because the House does not like the idea. The promoter has been quite clear about this, but my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) deployed a long argument in favour of all the provisions which apparently he wants to cut out. That really has clouded the issue a bit. In fact, to use a favourite expression of my right hon. Friend Member for Woodford (Sir W. Churchill), it "darkened counsel".
I do not honestly think that the issue has been helped at all by the speeches of any of my hon. Friends from this side of the House. Indeed, if my hon. Friends had wanted to ditch this Bill they could hardly have done better. They have left us in total confusion. In the words of the Duke of Norfolk himself, if the Bill is passed, amended in the way which he intends, it will contain nothing more than a provision for putting an end to the unbarrable entail, and such ancillary provisions as may be required by Parliament. That is what he said in the statement dated 25th June, and I believe that there is no more than that in the issue before the House; and, if this is made clear, that we should pass the Bill tonight. Otherwise, there is great danger of losing the Bill altogether, which, I think, would be a great tragedy.
8.7 p.m.
Mr. William Hamilton: The hon. Member for East Aberdeenshire, (Sir R. Boothby) has said that we do not want to ditch the Bill. I think we do, and I shall try to give my reasons.
It is now over 200 years since the House of Commons reversed a decision of the House of Lords Personal Bills Committee. We are told that, traditionally, this House accepts guidance from this Committee, and that our power to reject a Bill is not exercised. I believe that tradition is defensible only when it is a good tradition. We are debating this Bill as it stands, irrespective of what the promoters may say. It is what is now in the Bill that is under discussion, and that is why I propose to deal at
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some length with what is in the Bill at the present.
As it was originally drafted, I believe that the Bid contained a vital matter of principle which we cannot leave unchallenged. The original purpose of the Bill was two-fold. The first was to break the entail, and the second was to put the castle in trust
"for the benefit of the nation and as a residence for the Earl Marshal of England."
I accept the desirability of breaking the entail and letting the Duke do with his property exactly what other people can do with theirs. One of the newspaper headlines of the time was, "Why Pick on Me?"
That has been the Duke's argument, and, of course, I say, and so do many of my hon. Friends, that the Duke should be treated as other individuals, but that, if he wants that, it must be carried to its logical conclusion and he must be treated in all other respects as other individuals are treated. That is a point which, it seems to me, has been overlooked. If an individual wants means within his power to escape duties, as other people have, then, of course, if that is the law, there is no reason why he should be outside it.
A notable exception was the will of Mr. James Armand Edmond de Rothschild. His will was published on 12th June, the same date as that on which the heart cry was heard from the Duke that he should be allowed to do with his property as other people did. Mr. de Rothschild left an estate of over £11 million, and he made no effort whatever to avoid death duties, because he said that he owed an obligation to this country and that it was his patriotic duty to pay the full death duties. He paid £7½ million out of a £11 million estate.
Far be it from me to suggest that any duke is made of baser stuff. Perish the thought. Let us deplore and dismiss that man Rothschild as a cad who let the side down.
Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): I hope that the hon. Member will direct his speech to the Bill as closely as possible.
Mr. Hamilton: That is precisely what I am doing, Mr. Deputy-Speaker.
The second purpose of the Bill is that it offers the castle in trust
"for the benefit of the nation and as a residence for the Earl Marshal of England."

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This was what aroused the opposition of my hon. Friends and myself. The castle, with a £250,000 endowment from the Duke, was to be transferred to three trustees, as my right hon. Friend the Member for Easington (Mr. Shinwell) said, and not two, the Duke of Norfolk being one of them, and the endowment was to be invested at 5 per cent., which would yield £12,500 yearly.
I am an ordinary, humble layman. I am not concerned with legal jargon or the legal aspect of the matter, but as far as I can determine, if that were regarded as a charity—and I wish that we had a representative of the Treasury on the Government Front Bench to give us guidance on the matter—it would be tax free. In other words, free of £11,500 Income Tax and Surtax. Even if it were not a charity, it would still be free of Surtax, and, therefore, somebody would be in pocket to the tune of £5,000 a year. It may be chicken-feed out of a £5 million estate, but it is not chicken-feed to us and to the people of the country.
Not only that, but death duties would normally have sliced £200,000 of the £250,000 that is to go into the trust fund, but trusts, of course, are free from death duties altogether. It is true that the Duke would have had to surrender the ownership of the castle, but, in exchange, he would be getting security of tenure in perpetuity. One of my basic arguments against the Bill is the timing of the introduction. It was introduced to secure tenancy in perpetuity for one individual and his family, at the very time when, through this House a Bill, was being passed threatening the security of millions of working people.
No wonder that there was violent reaction against it. There was evidence of a storm to come on Second Reading in another place on 1st May. That was May Day, but I do not think that there is any significance in that. The debate lasted seven minutes and there was no commendation of the Bill from the Front Bench in another place. The noble Lord Viscount Alexander of Hillsborough forecast stormy weather ahead, but I think that he underestimated the nature of the storm.
Forewarning had been given in the Press from a wide variety of sources, from
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Forward to the Sunday Express. I was shocked and pained by the violence and the immoderate language used by the Sunday Express. It imputed to the Duke the most unworthy and materialistic motives. The article in that newspaper said:
"At the moment, even with his £5,000,000 fortune, the duke has to go carefully. He has to worry about upkeep. He has to put money aside to enable his successors to pay death duties. From now on we will lift some of these worries from his shoulders. He will know that, whatever happens to anyone else, he and his family and his heirs and successors will have complete security of tenure. The Dukes of Norfolk will go on living at Arundel until the end of time. And, at the same time, various clauses in the Bill are likely to mean that his Grace will find himself in pocket to the extent of several extra thousands every year.… The duke has given his castle to the nation. But in this particular case he can be quite certain that it will be infinitely more blessed to give than to receive."
Forward, of course, was much more temperate. It said:
"It is simply that in order to continue to enjoy the fruits of privilege"—
It was talking about the lesson that the Duke had learned—
"it is sometimes necessary to discard its trappings."
These are the comments of the Press, which I have quoted from as wide extremes as I can.
I diligently searched in the Bill and outside it for more worthy motives, more becoming of the promoter. Was it inspired by the desire to preserve for the nation something of historic and æsthetic value? I am not in a position to judge. I quote the Sunday Express again. It said:
"For æsthetic merit you can rate St. Pancras Station considerably higher."
I read elsewhere that for historical value Madame Tussauds has something on Arundel.
I thought that the Bill might be a Tory Party move for the surreptitious introduction of the first instalment of a property-owning democracy. We would own the property and the aristocracy would live in it. I thought that that might be the explanation, but I rejected that because I do not think that the Tory Party would stoop to that kind of trick. Therefore, I was forced reluctantly to wonder whether the Bill was introduced in the interests of self-preservation—a rearguard action, to give up some of the

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trappings in order to maintain some of the substance.
Despite opposition from all political views the Duke fought on with commendable courage, inspired no doubt by belief in the ultimate success of the family motto, "Virtue alone is unconquerable." The Duke proceeded on, hoping that we who opposed would see the light. The first counter-attack was made in an attempt to refute the critics' arguments. There was no retreat at that time. Two hon. Members were invited to lunch, to have explained to them the advantages of the Bill to the nation, and perhaps to the Duke, but on 25th June the white flag was run up at Arundel and the retreat was sounded, though not unconditional surrender, and that is what we are talking about tonight.
The Sunday Express forecast that the Bill, "some day before Whitsun" would be passed by "a large majority." At least, the Sunday Express has ensured the consistency of its political forecasting by that one.
I have no ill-feelings towards the Duke in particular or towards dukes in general. I wrote to Mr. Speaker asking whether the Bill would allow us an opportunity of debating the hereditary principle. He wrote back in unmistakable terms that it would not be proper, on this Bill, to discuss the hereditary principle—a great pity. I would, therefore—
Mr. Deputy-Speaker: Order, order. I hope the hon. Member will not criticise Mr. Speaker's Ruling.
Mr. Hamilton: On the contrary, Mr. Deputy-Speaker, I was having scrupulous regard for Mr. Speaker's Ruling. I have no intention of debating the hereditary principle.
Mr. Hale: May I seek your guidance on a point of order, Mr. Deputy-Speaker? Why should we not criticse Mr. Speaker's Ruling if we do not agree wtih it? I should have thought that that was precisely why we are here.
Mr. Deputy-Speaker: It is customary to accept the Ruling of the Chair.
Mr. Hale: Further to that, Mr. Deputy-Speaker, am I to understand that your Ruling to this House is that I am to accept a written Ruling, which I have not seen, given by Mr. Speaker to a hon. Member,
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in response to a letter which I have not read, and that I am not entitled to put to the Chair the point of view that there is an argument against that Ruling which may not have been put by the hon. Member?
Mr. Deputy-Speaker: I directed my remarks to the hon. Member who had seen the letter from Mr. Speaker.
Mr. Hamilton: Of course, Mr. Deputy-Speaker, if my hon. Friend catches your eye he can deploy his argument, until he is called to order. I have no doubt that he will see to it that he says what he wants to say. I am informed, however, that when the proposals for the reform of the other place come forward, we shall have ample opportunity to develop the point which I would have liked to develop tonight.
I conclude by saying that in this century of the common man, in a century when democracy is fighting for its life in a highly competitive world, we cannot afford the luxury, and, I believe, the stupidity, embodied in the continued existence of aristocratic drones in our midst. For that reason, and because the Bill, from the beginning, has been badly handled, I hope that my hon. Friends will carry this matter to a Division. In view of the confusion that has been evident up to now, the cleanest and the clearest way to deal with this matter would be to reject the Bill outright. If the Duke wants to bring in another Bill, let him by all means do so, but it is time that we taught him a sound democratic lesson.
8.23 p.m.
Sir Peter Agnew: It is always advisable, Mr. Deputy-Speaker, to take advantage of catching your eye in the Second Reading debate of a Bill, particularly in this instance, because I have no certainty that I shall have an opportunity of speaking on the Motion to which a number of my hon. Friends and myself have set down our names, namely,
That it be an Instruction to the Committee on the Bill to leave out all Clauses other than those which free the property from the present statutory restrictions upon its disposal.
The House must surely consider the speeches of my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) and of the hon. Member for Fife, West (Mr. Hamilton) are irrelevant to our purposes this evining, because the promoter

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of the Bill has already committed himself in a properly furnished Parliamentary statement to saying that none of the subjects to which the greater part of those two speeches were addressed has any purpose or is to be before this House.
It is true that at the moment the subjects are before the House formally, but only formally, because the Bill which has been through another place was drawn in a certain way. Notice has been given of intention to delete many of the Clauses, but, as my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby) pointed out, the difficulty in which the House now finds itself is how to carry out the purpose which the majority of hon. Members think should he achieved, namely, not to throw out the Bill, but to allow it to proceed in a form registered here on the Floor of the House which will make it certain that none of those provisions to which reference has been made, and notice of deletion has been given, are discussed further, but are regarded for all time as removed from the Bill.
My hon. Friend the Member for Gravesend (Mr. Kirk), has his name down to another Motion. I do not know whether he will move it if the Bill receives a Second Reading.
Mr. Kirk: If my Motion is called by Mr. Speaker, I shall move it. It reads:
That it be an Instruction to the Committee on the Bill to leave out Clauses 3 to 5 and 10, and Schedule 3.
Sir P. Agnew: I am grateful to my hon. Friend for that information. That Motion suffers from what I feel to be a serious defect, in that although it apparently has the merit of precision, since it denotes the Clauses to be deleted from the Bill, it would correspondingly fetter the proper discretion which always resides with Private Bill Committees to make such changes and alterations in the Bill as they deem to be necessary in order to carry out the will of the House as it may have been expressed in an intention.
If the Bill receives a Second Reading tonight there is no doubt that the House will have expressed its wish that the amended desire of the promoter, as revealed in his last statement, to remove the rigidity of the entail as laid down in the Act of 1627, should be carried out.
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There would be some difficulty for the Private Bill Committee were it to be faced with the Motion which my hon. Friend the Member for Gravesend has expressed his intention of moving.
I find myself in a difficulty since I am not able to move at this stage the Motion standing in my name and in the names of a number of my hon. Friends. Yet, although I cannot debate it, I can draw the attention of the House to the fact that it is couched in simple and non-technical terms, readily understood by any Committee of this House which might be called upon to handle it upstairs. It directs that everything shall be taken out of the Bill except the purpose of removing the entail upon the estate. In that connection—
Mr. Hale: I agree with the hon. Member. At the moment I am in complete agreement with him and the hon. Member for Aberdeenshire, East (Sir R. Boothby) that the Duke has a perfect right to say, "Will you remove this legislative provision which hampers my estate but does not hamper anybody elses?" But look at the difficulty we are now in. The hon. Member for Hendon, South (Sir Lucas-Tooth), who, as I understand it, moved the Second Reading, and then said he was not moving it, still insists, according to his intervention, on Clause 7. I and many of my hon. Friends will be in the difficulty that when the Question is put for us to say "Aye" or "No" to the Second Reading of the Bill, we shall not know whether the hon. Member for Gravesend (Mr. Kirk) will carry his Instruction. So long as we have presented to the House a completely divided course, there being three different views, we may well say that we have, reluctantly, to vote against the Second Reading because we may otherwise be carrying a Bill which we do not want and not getting a provision which we do want.
Sir P. Agnew: I confess that I and my hon. Friends who have put our names to an Instruction find ourselves in a similar difficulty. For my part, I have taken notice of the addendum tabled by the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) in the form of an Amendment to my Motion in which he does not change the purpose of my Instruction

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but underlines a certain feature of it, to which I have no objection at all and would readily assent if that would make the purpose of the Standing Committee clearer.
I cannot offer any suggestion to the House as to what it should do at this stage in the absence of a much more definite assurance from my hon. Friend the Member for Hendon, South, who speaks for the promoter, as to what the Duke's real intentions and desires are now as my hon. Friend understands them. I confess, therefore, that having pointed out the attitude of my hon. Friends and myself towards the Bill we shall have to leave it to the course of events and see how the debate develops and what further counsel and advice can be offered to us on behalf of the promoter.
8.31 p.m.
Sir Lynn Ungoed-Thomas: There are three distinct parts of the Bill, the part which deals with Arundel Castle, the part which deals with the disentailing, and what is most in dispute at this stage, the part which deals with compensation. I shall not say anything at all about the Arundel Castle part, for I understand that that is out of the Bill for all practical purposes.
I should like just to make this observation about the disentailing part. One would have gathered from the speech of the hon. Member for Hendon, South (Sir H. Lucas-Tooth) that all that was sought was to put the Duke of Norfolk in exactly the same position as any other landowner. There is, however, one strong consideration which is relevant against passing the disentailing provision. This unbarrable entail was incorporated in an Act of 1627 and it was passed at a time when the general law already enabled disentailing to take place. Therefore, the whole object of the 1627 Act and the whole object of the settlor, Thomas the ancestor, in getting a private Act was to take the estate out of the general law and make it unbarrable although under that general law it would be barrable. Therefore, what we have here is a settlement made by Act of Parliament with a special provision taking it out of the general law.
The hon. Gentleman knows perfectly well, and other hon. Gentlemen opposite also know, that the courts have recently
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refused to exercise such powers as they have in order to sanction the alteration of a settlement where the object is merely to defeat the Revenue. What the House is being asked to do now is to pass by special Act of Parliament what is an alteration to a settlement voluntarily made by the settler, and to make that alteration when the whole purpose and advantage of it is to avoid the payment of Estate Duty. [HON. MEMBERS: "No."] Of course it is. I do not think that is in dispute. It has been stated in the memorandum which has been circulated that on the death of the present Duke of Norfolk, some 80 per cent. death duties would be paid.
Mr. Charles Fletcher-Cooke: If the entail is barred, death duties will still be paid on the proceeds of the castle just as much as before.
Sir L. Ungoed-Thomas: The hon. Member must not come here with statements of that kind. Of course, death duties will be paid by whoever owns the estate at the time, but the hon. Member knows perfectly well—he is familiar with this practice and has doubtless had cases in which he has advised to this effect—that one exercises disentailing in the ordinary way in order to make resettlement attract an incomparably lower rate of death duty than if the property remains entailed.
If that is not the object, I shall be extremely interested to hear what the hon. Member will say about what is the real purpose behind the disentailing provision. I mention that merely because this matter has so far been passed over in the debate by the hon. Member for Hendon, South as though all that was required was some perfectly innocent provision putting the Duke in the same position as anybody else whereas in fact, what is being asked is a special Act of Parliament to alter the terms of a settlement.
I come to the main issue of contention, which is, of course, the compensation provisions. I say at once that here I am in complete agreement with the hon. Baronet the Member for Worcestershire, South (Sir P. Agnew). These compensation provisions are peculiar provisions and I shall deal with them in more detail later. It was suggested that these compensation provisions had to be inserted

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because of Standing Orders in another place.
There are obviously no objections to compensation provisions which can be made by the Duke of Norfolk outside this House without the assistance of this House. The property is his property and he is entitled to deal with it in exactly the same way as anybody else would, provided that the compensation provisions are in accordance with the general law. The charge I make against the compensation provisions in this case is that there are special provisions in the compensation Clauses which are contrary to the general law. In other words, the Duke of Norfolk's representatives are saying that he is merely asking Parliament to put him in the same position as any other landlord when he asks for the disentailing provisions, yet in the same breath they are asking Parliament to treat him differently from any other landlord by special provisions in these compensation Clauses.
Mr. Anthony Marlowe: This is a very important matter. The right hon. Gentleman the Member for Easington (Mr. Shinwell) made the point that his only objection was on compensation grounds. In fact, the Abergavenny Act, 1946, also contained compensation proposals—and that was where the right hon. Gentleman and my hon. Friend the Member for Gravesend (Mr. Kirk) got at cross-purposes. In fact, in Section 5 and in the Fourth Schedule of the 1946 Act, provision is made for compensation for those who lost rights by reason of the passing of the Measure.
Sir L. Ungoed-Thomas: While appreciating the object which the hon. and learned Member has in mind, I must say that that is an irrelevant interruption. My objection is that these compensation provisions are contrary to the general law. I am not dealing with the Abergavenny provisions. I do not even know whether they are contrary to the general law, nor, indeed, do I care. Why should I? We are dealing with the Duke of Norfolk's Bill and not with the Abergavenny proposals. We do not know how far the Abergavenny provisions were discussed in this House. Some of these Bills have gone through without detailed discussion on these points. Here, owing to the
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history of the Bill, we now have before us these provisions, which come before us for our deliberate consideration. The House must decide whether or not to come down in their favour.
Mr. Marlowe: The hon. and learned Member is really not doing justice to the point. The point is that this Bill merely follows the precedent set by the Measure of 1946, which went through the House at the time of a Labour Government. The right hon. Member for Easington (Mr. Shinwell) made no objection then to a provision in this form in that Measure.
Sir L. Ungoed-Thomas: What the hon. and learned Member has done is merely to repeat what he said before. I shall not take up the time of the House by repeating the reply which I have already given on that point.
Sir H. Lucas-Tooth Sir H. Lucas-Tooth rose—
Sir L. Ungoed-Thomas: Yes, I will give way.
Sir H. Lucas-Tooth: I do not know if the hon. and learned Member is going on to say how this provision differs from the provisions of the general law. If he is going on to deal with that point I shall not interrupt.
Sir L. Ungoed-Thomas: I have just said that I was. I am coming now to the particular provisions referring to the compensation fund.
Let us first realise what is the object of the fund. It is to compensate the reversioners—the Duke of Norfolk's successors—who will be deprived of their interest in these estates by reason of the disentailing provision. The estates amount to about £2 million. The Duke proposes to put aside £250,000 in order to provide the nucleus of this compensation Fund, but in order to provide full value for this estate at the final value which it would have after paying death duties on the Duke's death if there were no Act of Parliament at all, £500,000 would be required. Therefore, the Bill provides for a process by which the £250,000 is to grow into £500,000 in order to provide compensation. It is for that purpose that we have these peculiar provisions in the Bill, and it is those provisions which I now propose to examine.

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I want to make just four points in this connection. First, the income of this £250,000 is to be accumulated for twenty-one years. If the Duke of Norfolk made the settlement himself the accumulation could take place for his lifetime, and not for twenty-one years—it could take place for the life of the settlor. But if the Duke of Norfolk died within twenty-one years the accumulation would end and therefore this method of providing the £500,000 compensation fund would be defeated. Parliament is therefore asked to make a special provision, outside and contrary to the general law, to provide a special accumulation period in order to enable this process to go through.
In other words, Parliament is being asked not to treat the Duke of Norfolk in the same way as any other landowner, as his Whip says, but to treat him as being in a specially privileged position and under a specially privileged law of his own, entirely different from the position of any other landowner.
The second point concerns Estate Duty. I speak here with some deference because these are very complicated and difficult matters. I was a little surprised to hear the hon. Gentleman say that no Estate Duty question is involved in these compensation provisions. I speak with deference and subject to correction, but, as I understand it, if the Duke was the settlor and he made the settlement outside Parliament altogether, without there being any compensation provision as there is in the Bill, and he died within five years of his making the settlement, Estate Duty would be payable on the settlement at the rate of 80 per cent., as we know from the memorandum; there is no provision in the Bill that the Duke of Norfolk is to be treated as settlor and, if the Duke dies within a period of five years, so far from his having to pay Estate Duty at a rate of 80 per cent. no Estate Duty will be payable at all. The result, therefore, of this provision in the Bill, as I understand it, is to defeat the effect which the general law would have on a settlement made by the Duke outside an Act of Parliament if he died within the five-year period.
Sir H. Lucas-Tooth: What the hon. and learned Gentleman is now saying would be true, if the Duke made a settlement in a certain way. On the other hand,
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if he made a settlement in some other way, under the general law there need be no duty payable. In other words, what the hon. and learned Gentleman is saying is that if in fact the Duke were badly advised, there would be duty payable. But I think the hon. and learned Gentleman would agree that if the Duke did, say, what the hon. and learned Gentleman advised, then there would be no duty payable.
Sir L. Ungoed-Thomas: I very much doubt that. I should like to see the settlement which the Duke of Norfolk would make. It may be it would be a settlement which he would not want to make at all, and perhaps that is the object of the provision in this Bill. At any rate, we are agreed that this Clause with the compensation provision as included in the Bill avoids the ordinary liability for payment of Estate Duty in the event of the settlor dying within five years.
Sir H. Lucas-Tooth: I did not say that at all. Of course we could not make this provision without a Statute. We could not do it for the very good reason that we are here settling a position which we should not have unless we had the special Act of 1627 on the Statute Book. We have to start from a new position altogether. If we were to suppose a position in which the Duke had to make an arrangement of this kind, he could quite easily make an arrangement which would in fact avoid Estate Duty—if that be the right term—fully as much as the proposal included in the Bill.
Mr. Shinwell: Would my hon. and learned Friend be good enough to ask the hon. Member for Hendon, South (Sir H. Lucas-Tooth)—who now appears to be the real sponsor of the Bill—whether he has had any intimation from the Duke, after the presentation of the last memorandum, that the Duke wishes this provision to be inserted in the Bill?
Sir L. Ungoed-Thomas: Perhaps the hon. and learned Gentleman would answer that question.
Sir H. Lucas-Tooth: I will, of course, I thought I answered it in my opening speech. This is a provision under which the Duke has to pay £250,000 out of his own pocket, and although this is not a

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matter which is in his favour, he thinks this is an essential provision in order that the Bill should lift the unbarrable entail. Therefore it is no good asking, would the Duke agree to this; it is the price which he has to pay in order to get the other provisions through.
Sir L. Ungoed-Thomas: I am not going to continue this argument further. I have made my point about the Estate Duty. It is that this provision in the Bill avoids the payment of Estate Duty within a five-year period. It is conceivable that the Duke might avoid that by some form of settlement outside Parliament altogether, but it also may be that that would not be acceptable to him. What is quite clear is that this Bill avoids the ordinary provision of the law for payment within a five-year period.
My next point relates to the Income Tax and Surtax position. This Bill provides for the accumulation of income for a 21-year period and at the end of that period a contingent payment to the person who may become entitled as the Duke's successor under the 1627 Act. The effect of that is that during the 21-year period no Surtax is pay able upon the income accumulating. The result of that is that during the 21-year period, when as much as £500,000 is being accumulated—the £250,000 being raised to £500,000—half of that accumulation is due to the avoidance of Surtax payment, the payment that would have to be paid if the Duke himself were the recipient of the income. So that we have, for a 21-year period, no Surtax payable. Mark you, the 21-year period is a special provision made in the Bill which the Duke could not achieve under the general law. That is the third reason for the objection to these compensation provisions.
The fourth point is this: The reversioners, those gentlemen who will be entitled to payment after the death of the Duke, and would normally be entitled to the income of the estate then, are not excluded altogether from benefit during the 21-year period. There is power to advance to them during that period, to any individual one of them sums up to £25,000, and a total sum between them of £75,000 altogether.
Those would be capital payments out of the accumulation, and would there-
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fore be free of Surtax, although the payment may consist of some of the income accumulated during the 21-year period. We have, in effect, income converted into capital and paid as capital to somebody who, apart from the accumulation provisions of the Bill, would receive it as income and have to pay Surtax on it.
Mr. Nicholson: He would have to pay Income Tax on it.
Sir L. Ungoed-Thomas: Quite right. Income Tax would be payable at the standard rate of tax in the first place. He escapes Surtax on it.
These four provisions in the Bill can operate only as a result of making arrangements in the Bill which are not in accordance with the general law. When the Duke, through his representative asks for the disentailing to be done upon the ground that he wants to be put in the same position as any other landowner, and then asks for compensation provisions which can take effect only by reason of provisions which put him in a different position from any other landowner and give him a privileged position in the law, it is a very remarkable position.
This is quite impossible. If the hon. Member for Hendon, South wants to consider the compensation provisions and does not want them to be taken out of the Bill, let him withdraw the Bill altogether. The position is a complete muddle. Far and away the best thing would be to withdraw the Bill at this stage, to reconsider the position and to bring in something which does not contain the offensive provisions which are in the Bill. If the hon. Gentleman does not do that, I very much hope that the House will vote an Instruction which will make it impossible to put the Duke of Norfolk into the privileged position which enables him to have these compensation Clauses.
8.54 p.m.
Mr. F. M. Bennett: After being rescued from my earlier bewilderment by the few remarks of my hon. Friend the Member for Aberdeenshire, East (Sir R. Boothby), I now find myself again more confused than ever. I think that I am not alone in that respect. The hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) was not quite fair in dismissing

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all consideration for precedent in the rather offhand way he did. Those who are not skilled lawyers in a very technical field cannot, in their consideration of a technical Measure like this, but be guided to some extent by what this House has considered on previous occasions. I did not think it was quite fair to brush that on one side when hon. Members on this side of the House and others have studied with some care similar Bills which went through with the party opposite in office. I am making no party point, but the Shrewsbury and Abergavenny Bills had exactly similar Clauses.
Mr. A. Woodburn: Is it not the case that a Private Bill is passed by the House and not sponsored by any Government, either Conservative or Labour? Is the hon. Member suggesting that the present Bill was sponsored by this Government because it has been presented during the time of a Conservative Government?
Mr. Bennett: If I used the word "sponsored" it was wrong. But I do not think I did. I said that hon. Members opposite were in office and the majority of such hon. Members did not vote against those Bills. I do not think that he should dismiss as utterly irrelevant something which a Parliament with a large majority of Members of the party opposite passed with no objection at all.
That is one of only two short points I wish to make. As I understood, arising from the remarks of my hon. Friend the Member for Aberdeenshire, East, the great majority of us here, largely laymen, are determined on one thing alone. It is that the Duke should be put in the position of dealing with his property exactly in the same way as anyone else and of breaking an otherwise unbarrable entail. I thought that there was a wide measure of agreement on that.
I frankly confess that I was one of those hon. Members who would have been quite content with the Bill in its original form. I think someone at least should dare to say that from one side of the House or the other. The reasons I took that attitude were twofold. First, I did not believe that the Duke would be gaining one scrap of advantage by the Clauses now to be removed other than he could have obtained by another
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method afterwards. It may be that he was ill advised to do it in this form, but by so acting he was doing something openly and publicly which we all know others do in another more private way.
I cannot but express surprise at the attitude of hon. Members opposite when I recall that at the time of the passing of the Wellington Estates Bill, a Bill passed by a majority in this House, with a very glowing speech made in support by a right hon. Member on the Opposition Front Bench when there was a similar provision in that Bill. The Duke of Wellington handed over Apsley House and was enabled to keep a fiat in it in perpetuity for himself and his family. That Measure was endorsed at that time by many hon. Members who are now objecting to this Bill as it stands and I cannot find any consistency or logic in this opposition, they having enthusiastically passed a Bill of that kind in 1947.
However, for the sake of general peace and in the hope that progress might be made, like many other hon. Members on both sides of the House, I decided in all the circumstances that as the controversy has been aroused it would be better to allow the Bill to go through, limited only to the provision putting the Duke in the same position as anyone else. That is now my position and I earnestly hope that we may now be able to reach what I believe is the principal point of agreement among the great majority of hon. Members of this House.
8.59 p.m.
Mr. Herbert Morrison: What we are discussing tonight is a question of public principle. As my hon. Friends have said, it is not a question of us wishing to pick a personal quarrel with the Duke or to engage in personal attacks on him. I know him quite well. He has functioned, I think very ably, as the Earl Marshal with whom I had some association when I also was what is known as one of the great officers of State, as it is claimed the Earl Marshal is, and I was Lord President of the Council. I thought that the Duke discharged his duties with ability and efficiency. Therefore, there is no personal question involved in this.
This is a question of principle and policy and I must briefly refer to the provisions of the Bill as it

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is before us, partly because it is right to recall why one associated oneself with others in putting down a Motion to reject the Bill, and partly because, owing to the way in which the Bill has been handled by the hon. Member for Hendon, South (Sir H. Lucas-Tooth)— who I understood was the spokesman on behalf of the promoter and spoke with some authority—we are in a muddle as to what is intended.
The first objection in principle that I have is this. I think that it is quite wrong for a noble Lord or, for that matter, an hon. Member of this House—although I am not sure that an hon. Member of this House can do it—to bring into Parliament a personal Bill, in a Parliament of which he is a Member, whether of the upper House or not, which is of pecuniary importance to him. I do not think it is right that he should do it. I think that it is objectionable in principle. I know that the Duke is entitled to do it, but I think that it is time Parliament stopped this rather mediæval practice of personal Bills which can be brought in. at any rate by a Member of another place, in which he may be a material personal beneficiary.
Sir Robert Grimston: I am interested in what the right hon. Gentleman is saying and I thank him for giving way. If my recollection serves me right, the Wellington Estates Bill, which has been referred to, was brought in by a Government of which the right hon. Gentleman was a Member. It certainly benefited the Duke of Wellington. I presume that the right hon. Gentleman is now arguing that the Government should have brought in this Bill for the Duke of Norfolk.
Mr. Morrison: We are debating this Bill. If it was the case that the Wellington Estates Bill was brought in as a Government Bill, which is what I understand the hon. Gentleman has said, and he thinks that is the right thing to do whatever the merits of the Bill may be, it is right that this Bill should be dealt with by Government legislation and not as a Private Bill.
Mr. G. R. Howard: Am I right in thinking that it was during a Labour Government that the Mountbatten Bill was brought in?
Mr. Shinwell: That was not a Private Bill at all. It was a Government Bill.
Mr. Morrison: There is some feeling on this side of the House because the hon. Member for St. Ives (Mr. G. R. Howard) has only just come into the Chamber. He missed the point which I was making, so I am afraid that I shall have to let it go.
This House and another place are rather particular as to what members of local authorities can do. They have laid down principles and even statute law, I think rightly, whereby members of local authorities must declare an interest, which I have no doubt the Duke did, and indeed that is plain on the face of it, but they must not vote on a matter in which they are peculiarly or materially interested. We have taken great care about it and I think rightly so in principle. But, having taken care in relation to the local authorities, this House now and again goes on the loose as regards the conduct of its own Members and those of another place in matters of this kind. Therefore, I think that if the Bill had to be brought in at all, it should have been a Government Bill and not a Private Bill promoted by the noble Lord who has a personal interest in the matter.
Secondly, I object to the principle that a person can bring in a Bill whereby property of which he is the owner can be transferred to a trust, appointed by himself under the terms of the Bill and of which he is a trustee, and then make provision whereby he can live in the property so transferred. I do not think that is right. Therefore, on those grounds and on other grounds, too, I thought that the Bill was bad and ought to go. Since then, however, we have had an undertaking by the Duke of Norfolk. It has been read before, but I will read it again because I want to lead up to some questions to the hon. Member for Hendon, South.
I thought he said that these compensation provisions must be in the Bill under the Standing Orders of their Lordships' House. I do not know whether that is so or not. If it is so, it might govern their Lordships' House, but I hope that the point will not be reached when the House of Commons, in dealing with a Bill, has to be governed by the Standing Orders of another place. It is, therefore,

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irrelevant to the proceedings. If a Bill comes before us we must be free to do what we like with it, unencumbered by the Standing Orders of another place.
In his further statement, dated 25th June, the Duke of Norfolk says:
"If the Bill is passed, amended in this way, it will contain nothing but the provision for putting an end to the unbarrable entail and such ancillary provisions as may be required by Parliament."
That seems to be a reasonably clear and explicit undertaking and the Instruction which was put down by the hon. Member for Worcestershire, South (Sir P. Agnew) and others was in accordance with that undertaking. If we have a clear undertaking that that is in fact what will be done and that the irrelevant Clauses, including the compensation Clause, Clause 7, will be deleted, then I think the situation is simplified, because then the battle has been won.
To my hon. Friend the Member for Fife, West (Mr. Hamilton), who had another Instruction down and to whose speech we all listened with interest—he had obviously taken a lot of trouble over it—I would only say that if we go into a Parliamentary battle and win, there is not much harm in registering the victory by not having a Division.
The hon. Member for Hendon, South has apparently started a Parliamentary battle, although as far as we knew there had at the beginning been a surrender on the part of the Duke. If he were properly to surrender, it would be very difficult to continue the battle. If the hon. Member for Hendon, South, who is supposed to have surrendered, on the one hand, and my right hon. Friend the Member for Easington (Mr. Shinwell), who is on the side of the victors, on the other hand, want to continue a non-existent battle, it can be done, but there is not much point in it. If we get the undertakings about the Bill right and clear—and we have not been given them yet—I think we can allow the Second Reading and tie it up with an appropriate Instruction, as recommended by my hon. Friends.
But unless we get clear undertakings on behalf of the promoters of the Bill, then I think it will not only be our right but it will be our duty to vote against the Second Reading. I suggest that if we get the clear undertaking, then the victory is won, and there
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is not much point in dividing on the Second Reading; but if we do not get that undertaking, I think we ought to have a Division.
We have had an interesting debate and a typically amusing speech from the hon. Member for Aberdeenshire, East (Sir R. Boothby). I was interested in his arguments about sponges and toothbrushes, but I think I ought to warn him that at the next election in Orkney and Shetland he will be open to the accusation by the opponents of the Tory Party that he has accused Orkney and Shetland of not using sponges or toothbrushes, and I think that that will not do the Tory candidate any good. I am now waiting for the return of the hon. Member for Hendon, South.
Mr. Jack Jones: He has broken his entail.
Sir H. Lucas-Tooth: I beg the right hon. Gentlemban's pardon. If he had to legislate without a Department behind him, he would find out how difficult it is.
Mr. Morrison: The effect is that owing to the hon. Gentleman's absence, I have had to continue my speech rather longer than I might have done.
My advice to the House would be that if we can get a straight and complete implementation of the undertaking of the Duke of Norfolk in regard to Clause 7, and in regard to other provisions which are irrelevant or antagonistic to that undertaking, I think we should let the Bill have a Second Reading and then carry such Instruction as seems appropriate to the circumstances. But before we come to that point—and we do not come to it before the Second Reading is settled one way or the other—we are entitled to ask the hon. Member for Hendon, South if he accepts that position or not. If he really accepts it, I would advise a Second Reading and then, as my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) has suggested, the appropriate Instruction.
If the hon. Gentleman cannot give that undertaking, I think that it is our right and our duty to vote against a Second Reading of the Bill.
9.12 p.m.
Sir Herbert Butcher: When I came here this afternoon I felt that this Bill would be quite

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easily disposed of in the light of the assurances that had been given by its promoter that it was desired to place the Duke of Norfolk in precisely and exactly the same position as every other landowner. It seemed to me to be entirely right and proper that the Duke should have the same opportunity of dealing with his large house, with its many rooms, as other people have of dealing with their smaller houses, with their fewer rooms. But I must say that the more I have listened to the debate the more confused I find myself.
If what the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas) has told us is right—and I believe that it would be impossible to deny his accuracy, except after the most detailed consideration and examination of the precedents—this Bill, that brings the Duke of Norfolk into step with every other landlord, is likely to put him out of step with a large number of other taxpayers. If that is the case, I feel that this Bill should not be permitted to proceed until this House has had far more opportunity of considering it.
Nobody would feel that in this matter, the Duke has been fortunate in his advisers but, on examining the Order Paper, I think that the House would find itself in some difficulty. My own feeling is that probably the right, the proper. and the more dignified thing to do would be for the Duke to withdraw the Bill. That would give the House an opportunity of re-examining a new Bill in the light of this debate. Unless I received, and heard from the Floor of this House, on behalf of the promoter of the Bill, the most categorical assurances, I certainly would not be able to support the Second Reading.
In fairness to the Duke and to his advisers, I must, however, say that I do not believe that in the short time available to them, they should commit themselves to making such sweeping concessions and pledges as the occasion would demand. Therefore, as I say, I think that probably the right thing would be for the Bill to be withdrawn.
One consideration that may be urged is that withdrawal would be an expensive matter; that the money spent in promoting this Measure would be wasted. Well, in engineering it very often happens
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that the first pattern does not work and that one has to try another, but we are not here dealing with a case in which the cost of a Private Bill will be one of material considerations. We are dealing with a fund of £¼ million, to be accumulated until it becomes £½ million; with hundreds of acres of valuable property being passed under settlements; with freehold land in some of the most valuable part of England. I believe that the cost of preparing a new Bill might be very well be money well spent.
9.15 p.m.
Mr. Deputy-Speaker: Mr. Hayman.
Sir H. Lucas-Tooth: On a point of order. I wonder whether I could make a statement which might facilitate the course of the debate.
Mr. Deputy-Speaker: If the hon. Gentleman has the leave of the House, yes.
Hon. Members: Yes.
Sir H. Lucas-Tooth: I have listened very carefully to the course of the debate. Clearly, we are likely to have a Division on Second Reading, as some hon. Members are opposed to the whole of the Bill. The right hon. Member for Lewisham, South (Mr. H. Morrison) has put some very pertinent questions to me, and the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) made some points which, obviously, will need very careful examination indeed.
The Duke does not wish in any way to ask Parliament for a special privilege. He wants to be placed literally in the position of any other landowner, and the purpose of Clause 7 is to give effect to the need for compensation, which, as I understand, the hon. and learned Member for Leicester North-East did not deny. All that the hon. and learned Member said was that he thought it was not well done by this Clause and the related Schedule in the Bill.
The difficulty that we are in is that we first of all have a Second Reading debate, and then we have a Motion for an Instruction which does not refer to Clause 7, and then we take Clause 7, which is really the reverse order of doing things. Hon. Members will, therefore, not know where they are until the last moment.

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What I am trying to do is to arrive at a suitable way of dealing with this matter, and the suggestion that I make to the House is this. If the House thought fit, it might perhaps accept the Motion on Clause 7 and the related Schedule without prejudice to the insertion in the Bill in Committee of provisions which would give effect—[HON. MEMBERS: "No."]—to the principle of compensation on the lines suggested by the hon. and learned Member for Leicester, North-East.
Sir L. Ungoed-Thomas: I cannot have this suggestion foisted on me in this way. It is quite unwarrantable. What I said was that I could understand compensation provisions being made, but that they could be made outside the Bill altogether, and that no compensation provision should be inserted in the Bill which could not properly be made outside the Bill.
Mr. Frank Bowles: On a point of order. May I put this point to the hon. Gentleman? I think I am accurate in this. From a Private Bill a Clause can be deleted, but a new Clause cannot be inserted in Committee.
Sir H. Lucas-Tooth: That illustrates the kind of difficulty that I feel we are in.
The hon. and learned Member for Leicester, North-East made some points which, as I understand them, could quite easily be attended to in Committee. [HON. MEMBERS: "No."] They could. The Clause could be amended in Committee. [HON. MEMBERS: "No."] The right hon. Member for Lewisham, South has been pressing me, but, as he pointed out and as I am bound to point out, I have no power. I am not the Government; I am merely a private Member. I think that the suggestion I have made is a possible way of dealing with the matter, and that if the House is not willing to deal with it in that way there is no alternative but to divide the House.
Hon. Members: Divide.
Mr. H. Morrison: I am much obliged to the hon. Member for Hendon, South (Sir H. Lucas-Tooth) for the statement that he has made, but I must say that it seems to us quite unsuitable. It looks as if Clause 7 would be taken out and put back again. In the circumstances, I do not think there is any good in con-
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tinuing the argument on these lines any more. There are two alternatives before us. One is that the Bill should be withdrawn and that the promoters should think again, but if the promoters of the Bill ask for a Second Reading, I must inform hon. Members who have taken a certain line that, as far as I am personally concerned, I shall vote against it.
Hon. Members: Divide.
9.20 p.m.
Mr. F. H. Hayman: On a point of order. May I respectfully point out to you, Mr. Speaker, that I was called to speak by Mr. Deputy-Speaker when the hon. Member for Hendon, South (Sir H. Lucas-Tooth) rose and asked leave to make a second speech. Might I then have the privilege of speaking now, because I sat down then without protest?
Mr. Speaker: In the circumstances, I accept what the hon. Member has said, Mr. Hayman.
Mr. Hayman: I thank you very much, Mr. Speaker. My speech will be very short.
I think that we have all been muddled beyond measure by the debate tonight. When the Bill first appeared, many of us felt that it was a Bill that ought to be rejected, but the Duke of Norfolk himself then came forward with modifications which seemed reasonable and I was prepared to take my name away from a Motion on the Order Paper, opposing the Bill, which I had signed. Afterwards, I found there was some doubt and I allowed my name to remain.
I doubt whether we have ever listened to a debate in which the legal considerations appear to have been so muddled as they have been tonight. The speech of my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) was clear and cogent. He put before the House the detailed legal objections very clearly and forcefully. We are asked now by the hon. Member for Hendon, South, speaking on behalf of the Duke of Norfolk, the leader of the aristocracy in the country, to give special privileges to the Duke, his family and his heirs at a time when millions of ordinary people are to have the tenancies of their houses threatened by the Rent

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Act. In all the circumstances, the Duke's advisers ought to come forward and say that they ask leave to withdraw the Bill, so that they can come forward next year with a simple Bill to give effect to what they have already promised. We must point out that hon. Members received assurances that the offensive Clauses in the Bill, as we see them, would be withdrawn, but they are in the Bill. Therefore, I hope that the House will reject it.
9.23 p.m.
Mr. Godfrey Nicholson: I am sorry to detain the House, but I have to say that in a fairly long Parliamentary experience I have seldom seen such a muddle as we have experienced tonight. It is the almost unanimous opinion of the House that the Bill should he passed, in the sense of the Instruction on the Order Paper in the name of my hon. and gallant Friend the Member for Worcestershire, South0 (Sir P. Agnew), which would leave out all Clauses
"other than those which free the property from the present statutory restrictions upon its disposal."
We have got into a rather unfortunate muddle because the Instruction in the name of my hon. Friend the Member for Gravesend (Mr. Kirk)
That it be an Instruction to the Committee on the Bill to leave out Clauses 3 to 5 and 10, and Schedule 3
was called first. [HON. MEMBERS: "No."] I am sorry. I mean may be called first.
It would be in keeping with the dignity of the House if we found a method of expressing what is the general view of the House, as contained in the Instruction in the name of my hon. and gallant Friend the Member for Worcestershire, South, and I ask your help, Mr. Speaker, in arriving at that result. I deeply regret that the House finds itself in such confusion. I shall regret it even more if what is clearly the will of the House does not have a chance of expression.
Mr. Woodburn: On a point of order. A great deal has been said about withdrawing the Bill. Is there any possibility of withdrawing the Bill, Mr. Speaker, or is it in possession of the House? Has anybody here the power to withdraw it?
Mr. Speaker: The Bill can be withdrawn, but at the moment the Bill is in possession of the House and the House must come to a decision about it.
9.25 p.m.
Mr. Leslie Hale: I do not intend to speak for more than a few minutes, but if anyone starts yapping "divide" while I am speaking, I shall speak a good deal longer.
Hon. Members: Divide.
Mr. Hale: I make no apology for detaining the House. I think that hon. Members should be prepared to listen to the debate and then make up their minds. Up to now there have been many speeches, but they have not assisted us to make up our minds. It has been said that rarely in the House of Commons has a speech affected a vote but, without wishing to be discourteous to the hon. Baronet, I say that he made a speech which looks like influencing a great many of us, because I stayed here tonight to vote for the Bill, but now I do not think I shall do so and I will tell the House why I have changed my mind.
I do not care whether the promoter of the Bill is the leader of the aristocracy or the secretary of the dustmen's union, if the secretary of the dustmen's union comes here and says, "I have found out that my house, 4, Prospect Road, Oswaldtwistle, is subject to a limitation by an Act of Parliament passed in 1627 which does not apply to any other house in Oswaldtwistle, and I ask you to remove it" then I think he has a perfectly good case.
Anyhow, I agree with the Leader of the Liberal Party that the British people have a soft spot for dukes, as I have myself. It is fair to say of the Dukes of Norfolk that their historical record is one of belonging to the "keep left" group of the day. Most of the earls were excommunicated by the Pope. Several of the dukes were attainted and one was beheaded, and one cannot have a better radical record than that. The Duke of the day was one of the barons of Magna Carta and another Duke of the day voted for the great Reform Bill. Indeed, the Duke of the previous day had got the sack from the Prince Regent for giving the toast of "The health of the sovereign of our people."
Mr. Philip Bell: Was not one Duke of Norfolk canonised?
Mr. Hale: I am not certain, but one of the Earls of Norfolk had the distinction of being excommunicated one year by the

1267
Pope, restored the next year, excommunicated by Thomas a. Becket the following year, and restored again by the Bishop of Norwich.
Let me say another thing quite frankly. If the object of this Bill is to remove the restraint of alienation so as to permit some disposition of the property which would avoid taxation, the Duke is perfectly entitled to do it. What every landowner is doing there is no reason why the Duke should not do. It is the job of this House to stop him, and the moment we get a Labour Government, I hope we shall deal strongly with the evasion of taxation, but so long as this House does not deal collectively with evasion of taxation, we have no right to say to one, "You are going to be in a worse position than the rest."
That is the base I started from, and I could not understand why the hon. Baronet, who spoke for twenty-seven minutes, spent twenty-five of them in describing the Clauses which he did not want and two minutes saying he did not know why he was there, and was not moving the Bill, and was not clear about how to move the Bill or who was responsible for it. That did not help us.
I listened to the hon. Baronet the Member for Aberdeenshire, East (Sir R. Boothby) with almost complete agreement. It seemed to me that he was putting a point of view. I understood from the memorandum that the Duke's advisers had withdrawn all the Clauses except those which removed the restraint on alienation imposed by the Act of 1627, If that were the position I would vote for the Bill and for the Motion, but it is not the position. The hon. Baronet the Member for Hendon, South (Sir H. Lucas-Tooth) has said clearly that it is not the position. No, we have the £250,000 Clause. To what the hon. Baronet says it seems to me there is a perfectly simple answer. If the Duke wishes only to remove the restraint on alienation, he can simply, at a cost of no more than £100, introduce a one-Clause Bill removing the restraint on alienation and withdraw this one. If he wants to offer Arundel Castle to the nation, he can offer Arundel Castle to the nation and leave it to the nation to decide whether it wants it or not. If he wants to settle, as my hon. and learned Friend the Mem-
1268
ber for Leicester, North-East (Sir L. Ungoed-Thomas) has said, £250,000 on maintenance, he can do it by a simple trust deed, as anybody else can do it, the moment the restraint on alienation is removed.
I disagree with my hon. and learned Friend in one thing. I always listen carefully to my hon. and learned Friend speaking on matters of this kind, realising that no one in the House speaks with more authority or with more profound knowledge on matters of this kind. I think that would be conceded on both sides of the House. My hon. and learned Friends very great experience of Chancery law is of great advantage to the House in deciding a matter of this sort.
The points made by my hon. and learned Friend were indeed substantial ones. There is no question at all that there are very considerable financial advantages that come from the settlement of the £250,000 in Clause 7. Without wishing to use an offensive term, I must say that it is dishonest to say, "We are prepared to withdraw everything" and to issue the statement which was issued by the promoter and supporters if they really are instructing the hon. Member for Hendon, South (Sir H. Lucas-Tooth) to take the line which he has been taking in the last few minutes. It is dishonest and an attempt to deceive the House. I do not associate the Duke with it. It is obvious that he has been conspicuously badly advised. No case has ever been worse presented to the House. That is the Duke's misfortune more than his fault.
However, I think my hon. and learned Friend was guilty of a slight injustice when he said that the Act of 1627 was passed at a time when entails could be dealt with and that the entail was the voluntary act of the Duke of the day. As we have dismissed any criticism of what the Labour Party did in 1946 or 1947 about some Bill of which I have never heard and which I am sure I have not read, I do not see why I should blame the Duke for what his ancestor did in 1627 or hold it against him.
Also, the Bill was amended in the House of Commons in 1627. It came from the Lords. It was sent to the Commons, and Amendments were made in the Commons. No one now seems to know what the Amendments were, but

1269
they may have been Amendments with a significant effect.
The Bill ends in old Norman French:
"Soit baille aux Comuns.
A ceste Bille aveque les amendements annexe les Comuns ont assentu."
I apologise to the House. The first Earl, Ralph the Staller, who used to sign himself "Ralph the Stealer," went to live in Normandy and would no doubt have pronounced this very much better than I can.
"A ceux amendements les Seigneurs ont assentu."
Then there is the King's note of endorsement:
"Soit fait come il est desiré."
The Bill started in the Lords, went to the Commons, was amended in the Commons, went back to the Lords, and the Lords accepted the Amendment of the Commons. It is no good saying it was a prearranged thing which was submitted to the Commons and went through in that way. It was subject to discussion and amendment.
Let us be fair. Everyone knows why estate entails were created in those days. It was done with the perfectly laudable object of keeping the land in the family, of preserving the big estates. I am not passionately in favour of big estates, but if I owned one I should want to keep it. From the point of view of the individual it is an eminently laudable object to say, "I want my sons to have the advantages that I have." Therefore, I do not criticise it.
There was one thing that the hon. Member for Hendon, South did not explain, among many other things which he did not explain, and that was why this entail became omitted from the Settled Land Act, 1881. When that Act empowered almost every other entailed estate to be broken, why was the Arundel estate omitted? Was it a deliberate act or was it an oversight on the part of the Parliamentary draftsmen of the day, as I suspect?
However that may be, I very much regret that unless we have some other assurance, and a clear assurance, to convince us that the Instruction, to which the hon. Member for Aberdeenshire, East and the hon. Member for Worcestershire, South (Sir P. Agnew) referred, will be carried, I shall not be able to support the Bill. Unless some-
1270
one can devise a means of assuring the House that if we vote for Second Reading we will not vote for Clause 7 to be tampered with, for Amendments to it to be suggested and for undertakings to be repudiated, I do not see how it will be possible to vote for the Second Reading.
In view of the very clear statements made by my right hon. Friend the Member for Easington (Mr. Shinwell) and my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas), who put the position perfectly fairly and, in the circumstances, generously, I would be perfectly prepared to accept the proposal of the Promoters, if they mean that the Bill is limited to a limitation of entail. My right hon. Friend's offer was generous. Unless it is accepted, and clearly accepted in unequivocal terms, the Bill will be rejected, as it ought to be rejected.
9.36 p.m.
Mr. Charles Fletcher-Cooke: I shall not make a long speech, although I have much material with which to do so and although I should have enjoyed it. I should like to cross swords with the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) on some part of the death duties issue. Instead of that, I have a suggestion to make. It is that we should vote on the Second Reading. Assuming that that is passed, there will be a chance for those who object to Clause 7 and to the compensation provisions to vote on that issue and to exclude consideration of Clause 7 altogether. That, I understand, will be the procedure if the Second Reading is carried.
I speak for no one but myself and, personally, I should not be sorry to see Clause 7 go. Whatever may have been said, I assure the House that Clause 7 and the compensation have been a matter of very hard bargaining between the Duke and those representing the infants and unborn infants, that is to say, the Public Trustee and the Official Solicitor, before the matter was passed in another place. If this House says unequivocally that although it is prepared to allow the entail to be broken, it will not give Parliamentary sanction to any compensation, that will strengthen the possibility of the Bill being passed when it goes back to another place, because it will have been not by

1271
the will of the Duke that the compensation provisions have been excluded, but by the will of this House. It will not be the Duke's fault and, therefore the Duke will not be breaking his bargain with the Public Trustee and Official Solicitor. That will satisfy all parties, except, perhaps, the Official Solicitor and Public Trustee, and they must deal with themselves.
I appeal to the House to give the Bill a Second Reading and then, if it wishes, to instruct the Committee to omit Clause 7 in toto, all question of compensation being omitted. I believe that, as amended, the Bill would have some chance of being passed when it returned to another place.
Question put, That "now" stand part of the Question:—
The House divided: Ayes 177, Noes 147.

Division No. 172.]

AYES

[9.40 p.m.

Aitken, W. T.

Grimston, Sir Robert (Westbury)

Morrison, John (Salisbury)

Alport, C. J. M.

Grosvenor, Lt.-Col. R. G.

Mott-Radclyffe, Sir Charles

Amery, Julian (Preston, N.)

Gurden, Harold

Nabarro, C. D. N.

Amory, Rt. Hn. Heathcoat (Tiverton)

Harrison, A. B. C. (Maldon)

Nairn, D. L. S.

Armstrong, C. W.

Harrison, col. J. H. (Eye)

Neave, Airey

Astor, Hon. J. J.

Head, Rt. Hon. A. H.

Nicholson, Godfrey (Farnham)

Atkins, H. E.

Heath, Rt. Hon. E. R. C.

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

Baldock, Lt.-Cmdr. J. M.

Henderson-Stewart, Sir James

Oakshott, H. D.

Baldwin, A. E.

Hesketh, R. F.

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

Barlow, Sir John

Hicks-Beach, Maj. W. W.

Page, R. G.

Beamish, Maj. Tufton

Hill, Rt. Hon. Charles (Luton)

Pannell, N. A. (Kirkdale)

Bell, Philip (Bolton, E.)

Hill, Mrs. E. (Wythenshawe)

Partridge, E.

Bell, Ronald (Bucks, S.)

Hill, John (S. Norfolk)

Peyton, J. W. W.

Bennett, F. M. (Torquay)

Hobson, John (Warwick & Leam'gt'n)

Pickthorn, K. W. M.

Biggs-Davison, J. A.

Holland-Martin, C. J.

Pilkington, Capt. R. A.

Birch, Rt. Hon. Nigel

Holt, A. F.

Pitman, I. J.

Bishop, F. P.

Hope, Lord John

Pott, H. P.

Bossom, Sir Alfred

Hornby, R. P.

Powell, J. Enoch

Boyle, Sir Edward

Horobin, Sir Ian

Price, David (Eastleigh)

Braithwaite, Sir Albert (Harrow, W.)

Houghton, Douglas

Profumo, J. D.

Brooman-White, R. C.

Howard, Hon. Greville (St. Ives)

Ramsden, J. E.

Bryan, P.

Hughes-Young, M. H. C.

Redmayne, M.

Bullus, Wing Commander, E. E.

Hurd, A. R.

Ridsdale, J. E.

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

Hutchison, Michael Clark

Rippon, A. G. F.

Gary, Sir Robert

Hylton-Foster, Rt. Hon. Sir Harry

Robinson, Sir Roland (Blackpool, S.)

Channon, Sir Henry

Jennings, J, C. (Burton)

Rodgers, John (Sevenoaks)

Chichester-Clark, R.

Joynson-Hicks, Hon. Sir Lancelot

Roper, Sir Harold

Conant, Maj. Sir Roger

Kerr, Sir Hamilton

Ropner, Col. Sir Leonard

Cooper-Key, E. M.

Kimball, M.

Russell, R. S.

Corbet, Mrs. Freda

Kirk, P. M.

Sharples, R. C.

Corfield, Capt. F. V.

Lambert, Hon. G.

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

Crowder, Sir John (Finchley)

Lancaster, Col. C. G.

Speir, R. M.

Davidson, Viscountess

Langford-Holt, J. A.

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

D'Avigdor-Goldsmid, Sir Henry

Leather, E. H. C.

Stanley, Capt. Hon. Richard

Deedes, W. F.

Leavey, J. A.

Steward, Harold (Stockport, S.)

Digby, Simon Wingfield

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

Steward, Sir William(Woolwich, W.)

Donaldson, Cmdr. C. E. McA.

Legh, Hon. Peter (Petersfield)

Studholme, Sir Henry

Doughty, C. J. A.

Lindsay, Hon. James (Devon, N.)

Summers, Sir Spencer

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

Lindsay, Martin (Solihull)

Sumner, W. D. M. (Orpington)

Duncan, Sir James

Linstead, Sir H. N.

Taylor, Sir Charles (Eastbourne)

Eccles, Rt. Hon. Sir David

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

Teeling, W.

Elliot, Rt. Hon. W. E. (Kelvingrove)

Longden, Gilbert

Temple, John M.

Elliott, R. W. (N'castle upon Tyne, N)

Lucas, Sir Jocelyn (Portsmouth, S.)

Thornton-Kemsley, C. N.

Emmet, Hon. Mrs. Evelyn

Lucas, P. B. (Brentford & Chiswick)

Tilney, John (Wavertree)

Finlay, Graeme

Mackeson, Brig. Sir Harry

Vane, W. M. F.

Fisher, Nigel

Mackie, J. H. (Galloway)

Vickers, Miss Joan

Fort, R.

McLaughlin, Mrs. P.

Wade, D. W.

Fraser, Hon. Hugh (Stone)

Maclay, Rt. Hon. John

Wakefield, Edward (Derbyshire, W.)

Freeth, Denzil

Maclean, Sir Fitzroy (Lancaster)

Wakefield, Sir Wavell (St. M'lebone)

Gammans, Lady

McLean, Neil (Inverness)

Wall, Major Patrick

Gamer-Evans, E. H.

Maddan, Martin

Ward, Rt. Hon. G, R. (Worcester)

Gibson-Watt, D.

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

Ward, Dame Irene (Tynemouth)

Glyn, Col. R.

Manningham-Buller, Rt. Hn. Sir R.

Waterhouse, Capt. Rt. Hon. C.

Gomme-Duncan, Col. Sir Alan

Marlowe, A. A. H.

Wells, William (Walsall, N.)

Cower, H. R.

Mathew, R.

Whitelaw, W. S. I.

Graham, sir Fergus

Maude, Angus

Wills, G. (Bridgwater)

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

Mawby, R. L.

Wood, Hon. R.

Green, A.

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

TELLERS FOR THE AYES:

Gresham Cooke, R,

Medlicott, Sir Frank

Sir Hugh Lucas-Tooth and

Grimond, J.

Moore, Sir Thomas

Mr. Fletcher-Cooke.

NOES

Agnew, Sir Peter

Hall, Rt. Hn. Glenvil (Colne Valley)

Pearson, A.

Awbery, S. S.

Hannan, W.

Peart, T. F.

Baird, J.

Hastings, S.

Pentland, N.

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

Hayman, F. H.

Prentice, R. E.

Beswick, Frank

Holman, P.

Price, J. T. (Westhoughton)

Blackburn, F.

Holmes, Horace

Price, Philips (Gloucestershire, W.)

Blyton, W. R.

Hey, J. H.

Probert, A. R.

Boardman, H.

Hubbard, T. F.

Rankin, John

Boothby, Sir Robert

Hughes, Cledwyn (Anglesey)

Reeves, J.

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

Hughes, Emrys (S. Ayrshire)

Rhodes, H.

Bowles, F. G.

Hughes, Hector (Aberdeen, N.)

Robens, Rt. Hon. A.

Boyd, T. C.

Hynd, H. (Accrington)

Roberts, Goronwy (Caernarvon)

Braddock, Mrs. Elizabeth

Isaacs, Rt. Hon. G. A.

Ross, William

Brockway, A. F.

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

Shinwell, Rt. Hon. E.

Brown, Thomas (Ince)

Jeger, George (Goole)

Short, E. W.

Burke, W. A.

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

Silverman, Julius (Aston)

Butcher, Sir Herbert

Jenkins, Robert (Dulwich)

Silverman, Sydney (Nelson)

Butler, Mrs. Joyce (Wood Green)

Johnson, James (Rugby)

Simmons, C. J. (Brierley Hill)

Castle, Mrs. B. A.

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

Skeffington, A. M.

Clunie, J.

Jones, David (The Hartlepools)

Slater, Mrs. H. (Stoke, N.)

Collick, P. H. (Birkenhead)

Jones, Jack (Rotherham)

Slater, J. (Sedgefield)

Collins, V.J.(Shoreditch & Finsbury)

Kenyon, C.

Smith, Ellis (Stoke, S.)

Cordeaux, Lt.-Col. J. K.

Key, Rt. Hon. C. W.

Snow, J. W.

Craddock, Beresford (Spelthorne)

King, Dr. H. M.

Sorensen, R. W.

Craddock, George (Bradford, S.)

Lagden, G. W.

Soskice, Rt. Hon. Sir Frank

Cullen, Mrs. A.

Lawson, G. M.

Sparks, J. A.

Dalton, Rt. Hon. H.

Ledger, R. J.

Steele, T.

Darling, George (Hillsborough)

Lee, Frederick (Newton)

Stewart, Michael (Fulham)

Davies, Ernest (Enfield, E.)

Lewis, Arthur

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

Davies, Harold (Leek)

Lipton, Marcus

Sylvester, G. O.

Deer, G.

Logan, D. G.

Taylor, Bernard (Mansfield)

Edwards, Robert (Bilston)

Mabon, Dr. J, Dickson

Thompson, Kenneth (Walton)

Edwards, W. J. (Stepney)

McKay, John (Wallsend)

Ungoed-Thomas, Sir Lynn

Errington, Sir Eric

MacPherson, Malcolm (Stirling)

Viant, S. P.

Evans, Albert (Islington, S. W.)

Mahon, Simon

Watkins, T. E.

Fernyhough, E.

Mann, Mrs. Jean

Wheeldon, W. E.

Fienburgh, W.

Markham, Major Sir Frank

White, Henry (Derbyshire, N. E.)

Finch, H. J.

Mellish, R. J.

Wilkins, W. A.

Fletcher, Eric

Mitchlson, G. R.

Williams, David (Neath)

Forman, J. C.

Moody, A. S.

Williams, Rev. Llywelyn (Ab'tillery)

Fraser, Thomas (Hamilton)

Morris, Percy (Swansea, W.)

Williams, Ronald (Wigan)

George, Lady Megan Lloyd (Car'then)

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

Williams, W. R. (Openshaw)

Gibson, C. W.

Moss, R.

Willis, Eustace (Edinburgh, E.)

Glover, D.

Mulley, F. W.

Woodburn, Rt. Hon. A.

Gordon Walker, Rt. Hon. P. C.

Noel-Baker, Rt. Hon. P. (Derby, S.)

Woof, R. E.

Grenfell, Rt. Hon. D. R.

Orbach, M.

Woollam, John Victor

Grey, C. F.

Osborne, C.

Yates, V. (Ladywood)

Griffiths, David (Rother Valley)

Oswald, T.

Griffiths, Rt. Hon. James (Llanelly)

Owen, W. J.

TELLERS FOR THE NOES:

Hale, Leslie

Paget, R. T.

Mr. G. Thomson and Mr. Hamilton.

Bill read a Second time and committed.
9.45 p.m.
Mr. Kirk: I beg to move,
That it be an Instruction to the Committee on the Bill to leave out Clauses 3 to 5 and 10, and Schedule 3.
After the full discussion which we have had, it is unnecessary for me to enlarge on this Instruction.
Mr. David Price: I beg to second the Motion.
Sir L. Ungoed-Thomas: I beg to move, as an Amendment to the proposed Instruction, to leave out from "5" to the end of the Question and to add instead thereof:
"7, 8, 10 and 11, and Schedules 3 and 4"
The point of this Amendment is to raise the compensation Clause question. If the House decides in favour of my Amendment, Clause 7, with its consequential compensation provisions, will be omitted.
Mr. Shinwell: I beg to second the Amendment.
Amendment agreed to.
Question, as amended, put and agreed to.
Ordered,
That it be an Instruction to the Committee on the Bill to leave out Clauses 3 to 5, 7, 8, 10 and 11, and Schedules 3 and 4.

FINSBURY SQUARE BILL [Lords] (By Order)
Order for Second Reading read.
Motion made, and Question proposed, That the Bill be now read a Second time.
9.55 p.m.
Sir Charles Taylor: I understand, Mr. Speaker, that it would be for the convenience of the House that the debate should take place on the Second Reading and that subsequently, if it is agreeable to hon. Members, the

1275
Instruction which stands in the name of my hon. Friends and myself should be moved formally; that would be after the Second Reading has taken place, or after a Division on the Second Reading, if necessary.
I shall not mention the Motion about the Instruction now because that may have to be moved later this evening—it may be tomorrow morning—but I say at the beginning of this debate that we have no objection whatever to the construction of underground garages and car parks in Finsbury Square. If those car parks are thought to be necessary by the local authority and the Ministry of Transport, we shall not oppose that part of the Bill.
Mr. Douglas Jay: Can the hon. Member tell us to whom he is referring when he says "we"? Does he mean the whole of the party opposite?
Sir C. Taylor: No, certainly not. I thought I had make that clear, but perhaps as there was so much noise the right hon. Member for Battersea, North (Mr. Jay) did not hear me. I refer to my hon. Friends and I who are named as due to move an Instruction after the Second Reading of the Bill as "we." I hope I carry with me my hon. Friends when I use that word. It is not meant to be in any way a Royal "we."
Perhaps at this stage I should declare what interest I have in the Bill. I have no personal interest in the Bill now. There was a time when for a number of years I had an office overlooking Finsbury Square. Various brothers of mine and my father have offices overlooking Finsbury Square at present, but I have not. I should disclose that very remote interest.
I should point out that all the time when I had an office overlooking the Square, or when I have visited Finsbury Square since, there has never been any traffic congestion in or around the square, and I know the square very well. I wish to make a few observations on the question of the desirability or otherwise of a car park under this square. If there is an underground car park provided there, unless parking is prohibited in surrounding streets, not only around Finsbury Square but also in the City, it is most unlikely that anyone will use that car
1276
park, because it would be far better and cheaper to park one's car in the street without having to pay, provided, of course, that it caused no obstruction, than to pay a fee for parking the car underground.
Therefore, I submit that if this underground car park is provided it will be patronised by additional owners of cars who cannot get their cars parked in the streets at present. I suggest that that will lead to a great deal of traffic congestion to and from Finsbury Square and to and from the City in the morning and evening. We take a very serious objection to the provision of petrol pumps and other erections above ground in and around the square.
Mr. E. Partridge: Disfiguration.
Sir C. Taylor: Many of my hon. Friends have told me that they have not had time to study the Bill and so they have been misled by my hon. Friend the Member for Battersea, South (Mr. E. Partridge) as to what is and what is not in the Bill. I feel, therefore. that it would be desirable to draw the attention of hon. Members, because this is a very important debate, to the Clauses in the Bill.
It is not a very long Bill. For the benefit of those hon. Members who have not had an opportunity to study it, I should like to draw attention to one or two of the Clauses, in fact to all the Clauses, of the Bill.
The Preamble to the Bill is:
"To authorise the provision of garages and parking accommodation for vehicles beneath the surface of Finsbury Square in the metropolitan borough of Finsbury;…"
I ask hon. Members to pay attention particularly to the end of the Preamble, which says:
"to make further provision for the improvement and development of the said Square"—
"and to note the word "improvement"—
"and for other purposes."
From that Preamble it would appear that this is a very harmless Bill. Because so many of my hon. Friends have asked me about the Bill I must, however, go into it in some detail. The Bill commences:
"Whereas—
(1)The garden closure bounded on all sides by the roadway of Finsbury Square (hereinafter referred to as 'the gardens') is an

1277
enclosure in the metropolitan borough of Finsbury (hereinafter referred to as the Borough') to which the provisions of the London Squares and Enclosures (Preservation) Act, 1906 and the London Squares Preservation Act 1931 apply:"
Here I pause because I am sure that one of my hon. Friends is better able to elucidate the legal position about the London Squares and Enclosures (Preservation) Act, 1906, and the London Squares (Preservation) Act, 1931. I hope that he will have an opportunity to deal with the Bill and the way in which those Acts apply.
Paragraph 2 of the Bill reads:
"By a conveyance made the twenty-first day of August one thousand nine hundred and fifty-six"—
I ask hon. Members to note very carefully the date, "21st day of August, 1956," which is less than twelve months ago:
"between the Church Commissioners for England (hereinafter referred to as the 'Commissioners') of the one part and the mayor aldermen and councillors of the borough (hereinafter referred to as 'the Council') of the other part the gardens were conveyed to the Council in fee simple except and reserved as therein mentioned for the purposes of the Open Spaces Act 1906…—
Mr. Victor Collins: On a point of order. Is it in order for the hon. Member for Eastbourne (Sir C. Taylor) to make his speech merely by reading the details of the Bill? The Bill is available in the Vote Office. Hon. Members are in a position to read it and need not have it read to them by the hon. Member. He is wasting time in this way.
Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): Certainly wasting time is not in order, but on the Second Reading of a Bill it is admissible to quote freely from it.
Sir C. Taylor: Thank you very much, Mr. Deputy-Speaker. I am reading the Bill only because certain hon. Members came to me and said that, due to Parliamentary pressure of business, they had not had the opportunity to study the Bill in the way it deserves and that they had been canvassed quite unreasonably by various hon. Members in support of the Bill. I want to make perfectly clear to the House what the Bill contains and what it provides. I think I reached paragraph 2, and I think I reached the words
"for the purposes of the Open Spaces Act, 1906."
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I ask hon. Members again to pay special attention to these words:
"and the Council covenanted that they would perform and observe certain stipulations and restrictions therein set forth".
That is under twelve months ago, in August, 1956.
Mr. R. J. Mellish: I understand that tonight we are to have an unopposed Second Reading and that the arguments against the Bill are to be argued on the Motion for an Instruction. With very great respect, Mr. Deputy-Speaker, may we have your assistance? It is a weird and wonderful argument on a Bill which is supposed to be unopposed that we should have the Bill read in detail. Would it not be more in accordance with our proceedings if the arguments against the Bill were discussed on the Instruction which is to follow after the Second Reading?
Sir C. Taylor: I do not know who gave the hon. Member the impression that the Second Reading would be unopposed.
Mr. Mellish: The trouble with the hon. Member is that he does not speak very clearly. I understood him to say that the main argument would be on the Instruction and not on the Second Reading. I am beginning to wonder what the arguments are. We have had the hon. Member reading out the Bill. He would be surprised to know that hon. Members, at any rate on this side of the House, can read.
Mr. Deputy-Speaker: I think that what would be most convenient for the House would be to have the main debate either on the Second Reading or on the Motion for an Instruction but not to have it on both. It is equally convenient, as far as the Chair is concerned, to have it on either, but at present the argument is proceeding on the Second Reading.
Mr. Collins: Further to that point of order. We were quite clear when we started that the Motion before the House is, "That the Bill be now read a Second time." Since then the hon. Member for Eastbourne (Sir C. Taylor) has said that he would discuss the Second Reading and the Instruction as well. I should be glad if we could have a clear Ruling whether we are debating the Question, "That the Bill be now read a Second time", and if so, and if there is a Division, whether

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we shall have the Division on that Motion and not on the Instruction.
Mr. Deputy-Speaker: It is quite clear that the Question before the House is, "That the Bill be now read a Second time", and it is equally clear that, whatever is agreed, it would not be out of order when we reach the Instruction for further speeches to be made and a further Division to be taken, but it is not necessary to have two Divisions unless the House wishes it.
Mr. Partridge: On a point of order. I do not know what my hon. Friend the Member for Eastbourne (Sir C. Taylor) is doing, except talking. He is doing exactly what he threatened to do, and that is to read the Bill at great length. I would ask you to take note of this, Mr. Deputy-Speaker. This is what he threatened to do and this is what he is doing.
Sir C. Taylor: After that interruption I can hardly describe the hon. Member for Battersea, South as my hon. Friend I do not know where he obtained his information that I would read out the Bill. I have explained that hon. Members have said that they do not know what is in the Bill. I am determined that before the Bill is given a Second Reading tonight every hon. Member who is interested in it shall have his attention drawn to its Clauses and to the observations which I wish to make.
I come to paragraph (3) of the Preamble, and I would again ask hon. Members to pay particular attention to this, because it is important. It reads:
"The said stipulations"—
Mr. Godfrey Nicholson: On a point of order, Mr. Deputy-Speaker. I seriously submit to you that this is an abuse of the procedure of the House. I should be the last person to wish to stifle debate, but I really think that this is a shocking performance.
Mr. Deputy-Speaker: I have heard nothing that would be out of order on a Second Reading speech, which this is. Sir Charles Taylor.
Mr. Albert Evans: Further to that point of order. The hon. Member for Battersea, South (Mr. Partridge) has told the House that
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the hon. Baronet stated earlier that he intended deliberately to read at length from the Bill. Is it in order for the hon. Baronet to decide, before the Bill is brought to the House, that he will read the Bill at length in order deliberately to prolong the debate?
Mr. Deputy-Speaker: I have no knowledge of a private conversation.
Mr. Collins: Further to that point of order, Mr. Deputy-Speaker. This is not a private conversation. The hon. Baronet himself, when he first rose, said "I shall speak about this tonight—it may be tomorrow morning". That is within the recollection of the House. That was a clear indication that he intended to filibuster in this matter in a way which would be a breach of the Rules of this House.
Mr. Deputy-Speaker: The hon. Member may be sure that if I detect a breach of the Rules of this House I will call the hon. Member for Eastbourne (Sir C. Taylor) to order.
Sir C. Taylor: Thank you very much, Mr. Deputy-Speaker. I do not want to detain the House longer than necessary, but many hon. Members have told me that they have not had the opportunity of reading the Bill—[An HON. MEMBER: "The hon. Member said that before."] Perhaps hon. Members were not listening and that is the reason for these constant interruptions. I only want to read certain parts of the Bill for emphasis and for better information.
I have again to ask hon. Members to pay particular attention to paragraph (3), which reads:
"The said stipulations and restrictions include a covenant by the Council"—
a covenant—
"at their own expense to remove the existing air raid shelters on the property and fill in the excavations and lay out the surface of the land as a public garden"—
and I underline the words "as a public garden":
"for a public open space in accordance with a scheme to be first approved by the Commissioners the said works of removal filling in and laying out to be commenced forthwith and proceeded with continuously until completed:"

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In paragraph (4) appear these words:
"There is a proviso to the said covenant"—
covenant, again;
"that if the Council are unable to obtain all necessary consents for the removal of the said air raid shelters the Council shall lay out the surface of the land as a public garden for a public open space in such manner as shall have regard to the existence of the said shelters and as shall first be approved by the Commissioners:
In both paragraphs there is the constant repetition of the word "covenant."
Paragraph (5) reads:
"The said stipulations and restrictions include a further covenant by the Council to keep and maintain the said land in good order and condition for all time as a public garden for a public open Space"—
and again I underline the last words:
"and not to use or permit the same to be used for any other purpose whatsoever."
Mr. Mellish: On a point of order, May I, through you, Mr. Deputy-Speaker, make an appeal to the hon. Gentleman? It may well be that there are some hon. Members who are genuinely against this Bill for one reason or another. May I, through you, appeal to the hon. Member to realise that what few friends he has he will lose by what he is now doing in reading out every detail of the Bill and boring everybody present, including yourself, as well as making his own case ridiculous?
Mr. Deputy-Speaker: That seems to me to be an appeal to the hon. Member who has the Floor of the House rather than a point of order for me.
Mr. Wilfred Fienburgh: Further to that point of order. Although it may not be within your province, Mr. Deputy-Speaker, to prevent an hon. Member from making a fool of himself, it is surely within your province to prevent him making a fool of the House of Commons. No doubt everything that the hon. Baronet is now doing can strictly be fitted within the brackets of Erskine May or Standing Orders, but it still leaves you some latitude to preserve the decencies and proper conduct of debate in this House. When a speaker is reading a Bill, and reading it badly in a mumbled way and repeating himself over and over again, that is surely an abuse of the good sense of this House.
Hon. Members: Hear, hear.
Mr. Deputy-Speaker: I am not entitled to rule anything out of order unless in fact it is out of order, and I cannot rule the hon. Member out of order on what he has said so far.
Sir C. Taylor: I am sorry if the hon. Member for Islington, North (Mr. Fienburgh) does not like the way I am reading these Clauses of the Bill. I should like to read them better. If the hon. Member does not like the way I am reading them, perhaps he will go and get a copy of the Bill.
Mr. Fienburgh: I have already read it.
Sir C. Taylor: There are many hon. Members who have not.
Mr. MarLipton: Who?
Sir C. Taylor: Quite a number.
Mr. Lipton: who are they?
Sir C. Taylor: Now I come to paragraph (6).
"It would be of public and local advantage to provide garaging and parking accommodation for vehicles beneath the surface of Finsbury Square and to authorise the use and development of the gardens as in this Act provided:"
This is the view of the Finsbury Borough Council. I want to be as quick as I can in dealing with these points in the Bill. I do not want to delay the House any longer than I have to do in order to make my case, but hon. Members must allow me to make my case in my own way.
I will now skip to paragraph 7, which states:
"In order to enable such accommodation to be provided and such use and development to take place"—
and again I ask the House to take note of these words—
"it is expedient that the covenants stipulations and restrictions hereinbefore referred to…should be extinguished"—
and that the two Acts referred to in the Bill should be overruled, as far as this Bill is concerned.
Mr. Philip Bell: Would my hon. Friend like to read those Acts? I am sure that hon. Members opposite are well informed, but probably have not read those Acts. Would my hon. Friend like to read them?
Sir C. Taylor: I do not want to go at great length into these Acts, and I think I can now turn to page 3 of the Bill. I do not want to go through the whole of Clause 2. I want to save the time of the House, so I will now turn to Clause 3, which states:
"As from the passing of this Act—
(1) the Council shall be released discharged and freed from the covenants by them in the conveyance to perform and observe the stipulations and restrictions set out in the second and third paragraphs of the Second Schedule to the conveyance…"
This borough council is now asking for covenants into which it entered as late as August last year to be washed out by the House under Clause 3 (1) of the Bill, Clause 3 (2) says:
"The provisions of the London Squares and Enclosures (Preservation) Act 1906 and the London Squares Preservation Act 1931 shall cease to apply to the gardens."
If the Bill is passed tonight we shall create a precedent for venor Square and Parliament Square and many others. It will create a precedent for garages, petrol pumps and so forth to be erected on some of the most beautiful squares in London.
Clause 4 is very remarkable in that it says:
"… the Council may within the Square—(a) provide equip maintain and manage garaging and parking accommodation for vehicles beneath the surface of the Square…"
That is all right. We do not object to that. Clause 4 (b) says:
"… the Council may construct and provide roads paths ramps steps lifts and hoists…"
Within reason we do not object to that, but we object to the next subsection of Clause 4 which says:
"… provide and maintain two petroleum filling stations cloak-rooms waiting-rooms shelters offices information bureaux and displays lavatories and conveniences and such other facilities as the Council think fit…"
In addition the Council may
"… keep petroleum spirit subject to the provisions of the Petroleum (Consolidation) Act 1928 and any licence granted thereunder."
This is entirely contrary to the covenants into which the Council freely entered less than twelve months ago. Therefore, almost before the ink is dry on the agreements it now has the effrontery to tell the House that obviously it was considering putting an underground garage there and putting petrol pumps on top of the Square and had to enter into these covenants in
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order to get the price of £50 and in order to satisfy the Church Commissioners that it was right and was free to service this land. I believe that the Bill was conceived long before the Council had even bought the land in the Square. Our other objection to the Bill arises from Clause 5.
Mr. Collins: Does the hon. Member realise the gravity of what he has said? He is accusing Finsbury Borough Council of extremely dishonourable conduct in suggesting that it conceived this whole scheme before it dealt with the Church Commissioners and before it introduced the Bill. The hon. Member is accusing the Council of fraud. Does he really seriously mean to make that suggestion?
Sir C. Taylor: I was not saying that at all. I was saying that obviously these sort of things had been in mind. If the hon. Member will refresh his memory, he will remember that there was a report in 1952 or 1953, about the possibility of underground garages in London and Finsbury Square was specifically mentioned.
Mr. Collins: If it will help the hon. Baronet, I can assure him that the Finsbury Borough Council discussed with the Ecclesiastical Commissioners as long ago as 1937 the possibility of having a car park under Finsbury Square.
Sir C. Taylor: That does not alter my argument. I am merely saying that the Council must have thought about having garages and parking places under Finsbury Square, and it must have known about the possibility of providing car parks under Finsbury Square when it freely entered into the covenants with the Church Commissioners, and freely signed them, saying that it would keep it as a garden for all time. I am not saying that is fraud. I am merely saying that in the minds of the officials and the aldermen and the councillors there must have been some idea that there might at some time be a possibility of having garages and parking places under this open space, which was meant to be kept as an open space for all time.
Again we wish to delete from the Bill subsection (1, b) of Clause 5 which reads:
"… make provision for the siting design and external appearance of the two petroleum filling stations and of any roads paths ramps and steps;"

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Subsection (1, c) is to:
"… determine whether any other building conveniences or facilities proposed to be provided under the last foregoing section or any other enactment should be constructed on the surface of the gardens and if so shall make provision for the siting design external appearance and lumber thereof:"
In addition we want to delete the remaining lines on that page.
That is all I wish to deal with in the main part of the Bill, but I think hon. Members will agree that I should refer to certain parts of the Schedule which set out the covenants freely entered into by the Finsbury Borough Council as late as August last year, less than twelve months ago. In line 15 of this Schedule, in page 7, the Bill reads:
"AND WHEREAS the Commissioners have contracted with the Purchasers for the sale to them of the said property for the purposes of the Open Spaces Act 1906 at the price of Fifty pounds"—
Fifty pounds for this very valuable square—
"subject as and in manner hereinafter appearing. Now THIS DEED WITNESSETH that in pursuance of the said Agreement and in consideration of the sum of Fifty pounds … paid by the Purchasers before the execution of these presents into the Bank of England … Unto the Purchasers in fee simple for the purposes of the Open Spaces Act, 1906 …"
Now I turn to page 8:
"AND the Purchasers to the intention that the covenant hereinafter contained shall bind the said property into whosoever hands the same may come for the benefit of adjoining and neighbouring lands belonging to the Commissioners or any part or parts thereof…"
The covenant which the Finsbury Borough Council entered into was a covenant with the Church Commissioners. The Church Commissioners, I understand, are the freeholders of quite a number of the properties around the Square. The covenant into which the Borough Council entered with the Church Commissioners was not only for the benefit of the Church Commissioners themselves but, I submit, also for the benefit of the leaseholders and, if there are any, also the freeholders round the Square.
Mr. George Isaacs: Now we are getting at it.
Sir C. Taylor: That is so. I disclosed my flimsy interest at the very beginning. The right hon. Gentleman must agree my interest—my personal interest—is a very flimsy interest.
I would read one short passage from the Schedule to the Bill, from para-
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graph 2 of the Second Schedule to the conveyance:
"The Purchasers shall at their own expense remove the existing air-raid shelters on the property fill in the excavations and lay out the surface of the land as a public garden for a public open space in accordance with a scheme to be first approved by the Commissioners the said works of removal filling in and laying out to be commenced forthwith and proceeded with continuously until completed.…"
This is a covenant—though I hate to keep emphasising this—entered into less than twelve months ago by the Finsbury Borough Council, although we have had an assurance from the hon. Member for Shoreditch and Finsbury (Mr. Collins) that the Council was considering underground car parks before the war—in 1937, I think he said.
The only other part of the Schedule to which I wish to refer is paragraph 3 of the Second Schedule:
"The Purchasers shall keep and maintain the said land in good order and condition for all time as a public garden for a public open space and shall not use or permit the same to be used for any other purpose whatsoever."
So much for the Bill. Now I come to the document of which most hon. Members, I think, have received a copy. It is a statement on behalf of the Finsbury Borough Council, which is promoting the Bill. The first page looks grand. The first page merely says the Council wants to provide underground car parks, that it wants to provide parking accommodation for the benefit of humanity at large, that it wants to do this, that and the other, and that it tried to remove the air raid shelters but the Home Office would not allow it to do so, and so forth.
But then there is page 2. I do not want to keep the House by reading the whole of the document—
Mr. Gerald Nabarro: Hear, hear.
Sir C. Taylor: —though I think in fairness, even if hon. Members will allow me not to read it, that I should read it, because it is a statement on behalf of the promoters, and I would not wish hon. Members to think I was misleading them in any way by not reading the document. If hon. Members wish me out of fairness to read it—
Mr. Mellish: We do not wish the hon. Member to do so at all.
Mr. Nabarro: We can bear it if my hon. Friend does not read it.
Sir C. Taylor: My hon. Friend says he can bear it if I do not read it. I will quote briefly from page 2, because it is not until one comes to the bottom of page 2 that one really gets at the meat—what to me seems to be the meat—of the Bill. I am quoting now from paragraph 4 of the statement on behalf of the promoters:
"It is understood that the Bill is objected to on the grounds that it involves the erection of certain structures on the surface of the square and, particularly, two petrol filling stations. To make the scheme an economic proposition, it is essential to have two petrol filling stations and there must be means of access to the car park from the surface."
Who said so? We understand that the Finsbury Borough Council has made an agreement with Lex Garages. Do we know—
Mr. Collins: It has made no such agreement. It has made no agreement at all.
Sir C. Taylor: I am very glad to hear the hon. Gentleman say that no agreement is being entered into. Would it not be advisable to get some sort of draft contract or agreement subject to confirmation before such a Bill is produced? Is the House being asked to provide powers for the Finsbury Borough Council to deal in any way it likes with this open space which it has covenanted to keep as an open space for ever?
Mr. Ernest Davies: It is not in any way that it likes.
Sir C. Taylor: Surely it can approach anybody to put up—or can itself put up—two enormous petrol filling stations and desecrate—a word used by another hon. Gentleman—Finsbury Square, which used to be a garden. We have too few open spaces left in London for any of them to be laid out as petrol filling stations.
The only other part of the statement of the promoters to which I wish to refer is paragraph 5, which says:
"It is submitted that the proposals in the Bill are more advantageous to the public than the scheme contained in the conveyance."
That is nonsense. It is a matter of opinion, an opinion expressed by the Council.
Having referred to the case put up by the promoters, I must obviously, out of
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fairness, refer to the case which has been put up by the objectors. I do not want to delay the House unduly, and so I will not read it, but I must draw attention to one or two points in the case of the objectors.
Mr. Partridge: On a point of order, Mr. Deputy-Speaker. If we are to have these items read in extenso, would it not be more honest to read the whole thing and not pick out sentences here and there, the assumption being that everything is being read when my hon. Friend the Member for Eastbourne (Sir C. Taylor) is leaving out every word which is disadvantageous to his case, such as it is? Are we not to have a little equity and reasonableness in this matter?
Mr. Deputy-Speaker: The hon. Member is entitled to read quotations from a document without reading the whole document.
Mr. Partridge: Further to the point of order. I suggest, Mr. Deputy-Speaker, that it is not a matter of quotations and that my hon. Friend is reading great paragraphs in extenso, but when he comes to a point in the case of the promoters which defeats his case completely and absolutely he says, "I do not think I need read this." I should have thought that was a complete abuse of the rules of the House.
Mr. Deputy-Speaker: That point may be brought out in debate. It is not a point of order.
Sir C. Taylor: Hon. Members said that they would be perfectly satisfied if I merely drew attention to the points which I wished to emphasise, and that is what I have done. I drew attention to the points which I wished to emphasise in the promoters' case, and now I come to the petition against the Bill. Again, I shall not read out the whole of the document, although after the interjection of my hon. Friend the Member for Battersea, South I am sorely tempted so to do. I shall refer only to one or two of the salient points in the objectors' case.
They draw attention—and this is also recited in the Preamble to the Bill—to the stipulations and restrictions contained in the covenant by which the Council, at its own expense, inter alia agrees to lay out the surface of the land—
Mr. Deputy-Speaker: The hon. Member is getting perilously near repetition.
Sir C. Taylor: I feel that your criticism is right, Mr. Deputy-Speaker, but, of course, the Petition against the Bill obviously has to contain some repetition and has to repeat some of the words which are used in the Bill. In page 4, the Petition says:
"Your Petitioners humbly submit that there can he no justification for allowing the Council to rid themselves of covenants and restrictions freely entered into…to use for commercial purposes land which is conveyed to them for a nominal consideration on the understanding that it would be used for certain public purposes."
On Clause 15, a very important Clause, the Petitioners wish me to draw attention to this part of their Petition:
"Your Petitioners understand that it is proposed to erect on the surface of the Gardens two petroleum filling stations with entrances thereto and exits therefrom, a cafe, changing rooms, cloakrooms, lavatories, a bowling green and a tennis court and that part of the surface of the gardens will be used for the purposes of ramps for entrances to and exits from the proposed underground garage."
A tennis court is not the right sort of thing for Finsbury Square, because, unless one plays "hit and scream" with six-a-side, a tennis court caters for only four people. The gardens are for all the people who work in the offices around the Square and who take their sandwiches, their lunches on sunny summer days—
Mr. R. Gresham Cooke: Does not my hon. Friend agree that, to judge from pictures and plans which have been supplied and which are on exhibit in Committee Room 14 upstairs, there will be plenty of room for people to sit in the gardens around the tennis court, to have their meals and enjoy the sunshine in the square?
Sir C. Taylor: If the hon. Member knew Finsbury Square as mil as I do, he would know that it is a very small Square. If the hon. Member will have a look at Finsbury Square tomorrow, provided that it is a sunny day, between twelve o'clock and two o'clock—because some people have their lunch between twelve and one and some between one and two—he will find that the square is crowded with people who are enjoying the facilities there.
The other matter to which I wish to draw attention is the statement on page 5 relating to Clause 19, that two addi-
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tional garages and filling stations in the square will attract an even greater flow of traffic, stopping and starting, and a greater number of cars in the square than ever before.
I have two letters which I should like to read. One is from the City of London Garages, Ltd. with premises in Worship Street which is half-a-minute away from Finsbury Square. The letter says that it is a scandal that within a year of acquiring the square from the Church Commissioners of England at a nominal price, the Finsbury Borough Council should seek to have the covenant deleted which provided that the Square should be maintained for all time as a public garden or a public open space and not used or maintained to be used for any other purpose whatsoever. What are the Church Commissioners saying about this?
Mr. C. W. Gibson: They are agreed.
Sir C. Taylor: The letter goes on to say that the firm will gladly join in any opposition to the Bill and assumes that many firms in the area of Finsbury Square will do likewise. It says:
"Apart from the damage to the amenities of the neighbourhood, we have two main objections to the proposal. Our garage business is only about a hundred yards from the Square. We have six petrol pumps…"
The right hon. Member for Battersea, North may laugh, but he would not laugh if it was his business and his livelihood depended on it. If I may continue, the letter states:
"We have six petrol pumps and a large repair and work shops. About a hundred yards away is the Paul Street Garage with even larger facilities than ours. There are filling stations at various streets"—
It goes on to name the streets—
"all within half-a-mile, and it is ridiculous to suggest there is any need for one in Finsbury Square. The neighbourhood is quite amply provided for. In any event, there are plenty of vacant sites quite close which are more suitable for such a purpose.
So far as the garaging of cars is concerned, the proposal would merely touch the fringe of the trouble. Neither we nor the Paul Street Garage are more than a third full in the daytime. The plain fact is that motorists will not pay garage charges so long as they can leave their cars in the road free of charge. There is no reason to believe that the proposed underground car park will do anything to relieve the congestion. It will rather add to it. But our main objection to the scheme is that the Finsbury Borough Council propose to open business with the ratepayers' money in com-

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petition with firms such as ours who have spent our capital over many years in building up a business which provides the town with much needed services. It may be argued that someone else is providing the capital, but as we understand it the Square, which is public property, is to be leased to a commercial firm at a nominal rent."
Mr. Nabarro: Is my hon. Friend, as a Conservative Member of Parliament, really seeking to espouse the cause of a couple of little garages which are afraid of another garage firm, namely, Lex Garages? Is he afraid of competition between garages?
Sir C. Taylor: I should thank my hon. Friend for raising that point. I do not believe these people are at all afraid of competition, provided they find Lex Garages is to pay a reasonable rental for the land which was conveyed by the Church Commissioners for £50 to Finsbury Borough Council.
We have not been given any indication by the sponsors of the Bill of the rent that Lex Garages is to be charged. I understand that there has been a deal, a sort of "big horse deal," about this. I understand that Lex Garages is to get it for a very nominal rent and has agreed to share the profit with Finsbury Borough Council, if there is any profit. I am informed—again I do not know whether this information is correct—that there is a deal between Finsbury Borough Council and the Church Commissioners under which the Church Commissioners will release the Council from all the covenants signed in August of last year on condition that the half profit that the Council gets from this scheme is shared with the Church Commissioners. If that is true, it is not a very pleasant deal.
Mr. Nabarro: All these allegations are being flung about, but what business is it of my hon. Friend or this House even if a deal of that kind were made? Is not the local authority autonomous in a matter of this kind? Are not the Church Commissioners autonomous? Is my hon. Friend, as a Conservative Member of Parliament, running away from competition in commerce?
Sir C. Taylor: I regret to say that I did not see it before, but I can see now that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is saying these things with a twinkle in his eye hoping to get some cheers from hon. Members opposite.
Mr. Nabarro: That will be the day.
Sir C. Taylor: He is suggesting that it is entirely right for Finsbury Borough Council to acquire this land at a ridiculously small price and that it should do a bargain with a particular firm to do down the private enterprise firms which are already in situ and already doing business.
There is one further letter I wish to read. It is from the other garage which is very close to the square and which is referred to in the other letter I have read, the Paul Street Garage. The letter says:
"If this is allowed to go through…"
that is the Bill—
"then there is no reason why the other squares in London should not become petrol stations.
We, with our friends the City of London Garages Ltd., and other filling stations in the vicinity are more than able to cope with the petrol side of the business, and from the garage and parking side, we always have at least two-thirds of the park empty.
Our greatest objection is that the Borough Council intends to go into partnership and competition with our trade. and on property which it has obtained under charitable circumstances, which was never the intention of the donors.
Plenty of other sites remain in the district for development, which when acquired, would be fair competition to ourselves."
Mr. Collins: Will the hon. Member allow me to inform him that in the Paul Street Garage is my own van and for the last ten years we have waited to get it under cover and have not been able to do so?
Sir C. Taylor: I understand that the Paul Street Garage has plenty of parking space to deal with all the cars that appear in the neighbourhood and it is never more than one-third full. If I know more about the area of Finsbury Square than does the hon. Gentleman, I apologise. We will go along there together, perhaps tomorrow or next week, when the Bill has been withdrawn, and we will consider what can be arranged for the reintroduced Bill when it comes up next Session.
Mr. Speaker: I do not wish in any way to truncate the speech of the hon. Member, and, indeed, as long, as he keeps in order I have no power to do so, but in case he has become oblivious to the passage of time I would remind him that he has spoken for fifty-five minutes.
Sir C. Taylor: I thank you very much, Mr. Speaker, for the congratulations which you obviously mean to extend to me. I had no idea that I was able to speak for such a long time. But the subject was so important and I felt that it was only right, having said that I would espouse this case in the House tonight, to draw attention to the iniquities which I believe are being imposed by the Finsbury Borough Council.
In conclusion, I wish to say that I think it is quite scandalous that within less than twelve months of entering into these covenants the Finsbury Borough Council should seek powers from this House to release itself from the obligations into which it freely entered.
10.57 p.m.
Mr. Victor Collins: For the last hour we have listened to one of those disgraceful exhibitions which, fortunately, are extremely rare in this House. The hon. Member for Eastbourne (Sir C. Taylor) has seen fit to disregard not only the truth, but, in so far as he could, all the best and most honourable traditions of the House, a procedure which hon. Members on both sides hold in contempt.
I do not propose to follow the hon. Member for Eastbourne along the lines that he pursued, and I will be as brief as possible in explaining the Bill. I will truncate my remarks to a much greater extent than I had intended. I want to make it perfectly clear to hon. Members that just as the hon. Member for Eastbourne was quite obviously trying to wreck the debate in the sense of boring hon. Members so that they would go home, so the Instruction on the Notice Paper in his name is a deliberately wrecking Instruction. If it goes forward, then for all practical purposes it will be the end of the Bill.
It is not, therefore, as some may think a choice between a pleasant Victorian garden—
Mr. Gibson: Which it never was.
Mr. Collins: —which it never was, and a garden with petrol pumps. It is a choice between an eyesore, a wilderness with no amenities which has been in existence for twelve years. It is a choice between these wartime shelters which the Council has not been permitted to remove and what I submit could be a thing of beauty and utility.
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The Finsbury Borough Council has been attacked because a few months after having reached an agreement with, as the hon. Member for Eastbourne said, the Church Commissioners to take over this two-acre Finsbury Square plot for a nominal sum and to transform it into a garden, the Council suddenly, as it were, put forward this other scheme which after very proper investigation with all the parties concerned it thought was a very much better scheme both in the local and the national interest. It therefore decided to come to this House, as it was entitled to do, and to ask the House to vary the covenants into which it had entered with the Church Commissioners and to vary the provisions of the London Squares Acts, 1906 and 1931, so that these arrangements could proceed.
I must make it plain that the Finsbury Borough Council has had the underground garage project in mind for many years—long before it acquired this land. Throughout the war and immediately after the war it was impossible to carry it out. The Council had requisitioning powers at the beginning of the war, but there were shelters right across the Square, and after the war the Home Office obdurately refused to allow those shelters to be removed. It was only at the point that the scheme for underground garages began to have a chance of fulfilment that the Home Office said, "If you put underground garages under Finsbury Square you may remove the shelters."
That was the condition. We cannot have a garden on top of the Square without the garages underneath, because we cannot remove the shelters unless we have the garages. It is true that, some time ago, there was a project for a valley garden—in other words, to cut right across the shelters by making some kind of a valley garden on either side.
Mr. Philip Bell Mr. Philip Bell rose—
Mr. Collins: I must be as brief as possible, in all fairness.
Mr. Bell: The hon. Member should not become too excited, for I intend to take part in the debate. When the Council took the conveyance, why was it not possible to receive these powers which it had in mind? If the hon. Member would look at the 1931 Act he would see what powers all corporations have to construct underground garages, without introducing a Private Bill which seeks many other things as well.
Mr. Collins: I hope hon. Members will not think me discourteous if I do not keep giving way to interruptions. Not only will it take me very much longer if I do, but it will make my speech disjointed. As the hon. and learned Member asked me a question, let me tell him this: the Bill has, quite properly, been examined by all the public authorities concerned. The hon. Member for Eastbourne referred to the Church Commissioners, but he knows, although he did not say, that the Attorney-General in his report on the Bill on 15th May said that he had consulted both the Church Commissioners and the Charity Commissioners and that they had no observations to make on the Bill. In other words, they are quite satisfied with the position.
He could also have mentioned that his right hon. Friend the Minister of Transport has also examined the Bill and has made some very important observations on it:
"The Minister believes that the operation of these facilities by a commercial operator having experience of the industry may prove beneficial to the Council and promote the maximum relief to traffic congestion. He therefore recommends that the Clause, at least in so far as it relates to the provision of garaging and parking facilities, should be allowed."
Sir C. Taylor: I am not objecting to it.
Mr. Collins: The hon. Member may say that he is not objecting to it, but I will not let him take refuge in that. His wrecking Instruction will wreck the Bill. It is a question of either this Bill or nothing at all except the shambles, and I do not think any hon. Member will go home tonight satisfied in thinking that he has been instrumental in contributing to that shambles when we could have struck a blow in helping to solve at least a part of the severe traffic congestion problem.
The hon. Member said that they could continue to pile up cars in the area, but every week-day 1,500 cars are parked within a quarter-of-a-mile of Finsbury Square, many for more than four hours. He says that he knows Finsbury. Why did he not tell the House that there is unilateral parking and very often bilateral parking all round the square and that it is the terminus of seven bus routes? Why did he not tell the House that the London and Manchester Assurance Company, of which his brother is chairman, and who
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are the only reason for the objection, may be in danger one day if their office catches fire and the fire engine cannot get round Finsbury Square because of the parked cars?
These are the real practical points, but, since I have been challenged, perhaps I may continue with what the Minister of Transport says:
"The powers sought, which are similar to those contained in section 32 of the London County Council (General Powers) Act, 1955, would enable the Council to provide services such as car washing and greasing and all the services normally offered by a garage. In the Minister's view such services are likely to prove essential if the parking facilities are to be provided on an economic basis.
In view of the steady intensification of traffic problems on the streets of London in recent years, the Minister welcomes the Council's initiative in this matter. The Minister regards the provision of off-street parking facilities as a valuable aid to the relief of traffic congestion, and he is persuaded that the powers sought would assist in this direction. That he therefore recommends that the clause be allowed."
The hon. Member mentioned the 1953 Working Party on Traffic Congestion. He may remember that that Working Party investigated 90 squares and open spaces in London to see whether underground car parking could be provided, and decided that it could be done in the case of nine—of which Finsbury Square was one. Nothing has been done, because of capital restriction, but here is a chance to proceed without a penny cost to the ratepayers or to the taxpayers. It is not for me to comment on the present financial situation, in which the local authorities cannot do these things simply because they cannot get loan sanction, whereas a private undertaking can, because it has the money.
I do not want to twit hon. Members opposite about that. I am merely talking facts. The Finsbury Borough Council could not get loan sanction for £¾ million for one project, or for £25,000 for the Valley Gardens—which would be a waste of money, anyway. It has been waiting twelve months for loan sanction for a street lighting scheme in a place where there have been fatal accidents, so do not let anyone say that the local council could do this. It could not, and it is absolute humbug to say that it could.
I have dealt with the Church Commissioners and with the Minister of Transport. The Minister of Housing and Local Government has examined the Bill and

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approved it, except that he says that it must come under the 1947 Town and Country Planning Act. Three subsections were added to Clause 5 to meet his point. Two of those subsections, the hon. Member's Instruction seeks to delete—subsections put in at the express request of the Minister. I am empowered to say that the London Council has given full approval to the Bill. The Royal Fine Art Commission has been, and will be, consulted on all points.
We shall make this a beautiful place. We people who either represent or live in Finsbury are proud of the borough. It is not only a matter of people who live at Eastbourne and have lovely gardens. Why should they come here and seek to deny Finsbury the first tennis court it will ever have had? We have not a single tennis court for 30,000 people. We have not a bowling green, because our bowling green was destroyed in the war. Have not my constituents the right to say that perhaps one-tenth of the ground will be covered by these necessary buildings? They are not buildings in the ordinary sense, but ramps, covers to the exits, covers to the petrol station. It is true that, according to the plan, across the middle there are some buildings. They are lavatories, changing rooms, tea rooms—if we have a howling green—but that is a matter for discussion.
Surely my constituents are not to be denied that. I know that I must sit down, hut I make this appeal to the House. This Bill has been approved by every public authority that has considered it. and they have considered it on its merits. They think that it is in the public interest, in the interests of the people in my constituency, in the interests of the nation. This is a bold, pioneering effort. The Borough of Finsbury could, if it liked, have had a sneaking little job, waited two or three years and, perhaps, have got a nice little garden, but Finsbury Square is no longer a quiet Victorian square. It is one of the busiest places in London. Here is an opportunity to show that something concrete can be done towards solving the country's traffic problems. In our little area we shall try to do it. If it works, it will be an example to the country. It can be followed elsewhere and can make a real contribution towards solving our problems.
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I hope that, having heard these explanations, hon. Members on both sides of the House will not allow the House to be held up unnecessarily but will honestly say that this is something worth supporting. I hope that they will go into the Lobby to give the Bill a Second Reading and send it to Committee, without any stultifying restrictions which are inspired only by unreason or by reasons which are not worthy of the House or of those who put them forward.
11.11 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Airey Neave): The Government strongly support the proposals of Finsbury Borough Council, and the hon. Member for Shoreditch and Finsbury (Mr. Collins) was quite right to draw the attention of the House to the support which my Department has always given to proposals for an underground car park in Finsbury Square. I ask hon. Members to understand that this is the first really worthwhile project for an underground parking scheme in London. It would be most unfortunate, therefore, if the Council were not able to bring it about.
I would remind the House that before the Select Committee in another place the promoter of the scheme drew attention to the fact—and here I refer to the objections of my hon. Friend the Member for Eastbourne (Sir C. Taylor)—that it would not be an economic proposition at all from his point of view—and no public money is involved—unless he were able to provide petrol stations and associated services with the car park. That seems to me a commonsense point of view. It would not pay his company to do it. If this was the case, we should lose this opportunity to give effect to the Government's policy, which is to take as many cars off the roads as possible. It is thought that we can take at least 320 cars off the roads in the vicinity of Finsbury Square and, clearly, that would be a great convenience to everybody.
The House should be satisfied on the question of amenities, to which my hon. Friend the Member for Eastbourne has referred. My information is that London County Council, which, under the Bill, will have to be consulted on this matter, by Finsbury Borough Council, in con-

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junction with the Church Commissioners, is content to accept the arrangements suggested, that is, for an underground car park with petrol stations. The hon. Member for Shoreditch and Finsbury has drawn attention to the fact that the Church Commissioners have taken no objection whatever to the scheme. That is a fair point and one to which I also should draw the attention of the House.
It is a matter entirely for the House to say "Yes" or "No" to the scheme, but, obviously, the details can be worked out by agreement between the various bodies, as set out in Clause 5. Those details can be considered by the authorities concerned, and if agreement is not reached the matter must be referred within 30 days to my right hon. Friend the Minister of Housing and Local Government. That provides certain very definite safeguards to the amenities, because surely London County Council, as the planning authority, ought to be the body that takes best care of the matter.
My hon. Friend the Member for Eastbourne said that other garage proprietors in the area had written to him and had objected. They never made any objection while these proceedings were in another place, and this is the first time that my attention has been drawn to the point. It is surprising that while these matters were being publicly discussed the objections were not raised before. My hon. Friend also made a point about the covenant, which is set out in the Preamble to the Bill. He made many references to the fact that the restrictions under the covenant would be removed by the Bill.
The point is whether it is in the public interest that that should happen. If it is in the public interest that this covenant should be varied—and it is a matter for the Church Commissioners to give their agreement about the future, although, in fact, they have not so far made any objection—then I suggest that it is proper that this covenant should be varied in the way in which the Bill gives Finsbury Borough Council power to do.
There is a great urgency about this parking question. From all sides of the House we have heard about it on many occasions, and my Department believes that this measure will give considerable assistance to the difficulties experienced to this part of central London. The point
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has been made that traffic will become considerable if this Bill is passed, but I understand that it is already considerable, and likely to increase. As the hon. Gentleman the Member for Shoreditch and Finsbury has told us, this is the turning point for no fewer than seven services of London Transport vehicles. This takes place in the Square, so surely that is one good reason for parking as many cars as possible off the road.
The point which I wish to emphasise is that we have now the opportunity for a permanent scheme and not merely something temporary; and, with the safeguards in respect of the amenities, I commend the Bill to the House. My hon. Friend raised other points by way of objection, but I do put it to the House that the major point is that we should not stand in the way of the first really large project for an underground parking station in London.
The Deputy-Chairman of Ways and Means (Sir Gordon Touche)The Deputy-Chairman of Ways and Means (Sir Gordon Touche) rose in his place, and claimed to move, That the Question be now put—
Question, That the Question be now put, put and agreed to.
Question put accordingly and agreed to.
Bill accordingly read a Second time and committed.
Motion made, and Question proposed,
That Standing Order 177 (Interval between committal of bill and sitting of committee) be suspended and that the Committee of Selection have leave to appoint the Committee on the Bill to sit and proceed on Monday next.—[Sir G. Touche.]
Major Sir Frank Markham: Will this Motion mean that special facilities will be given to the Bill which we have just been discussing?
Mr. Speaker: It means that the interval which normally elapses between Second Reading and Committee will be truncated, but if the House agrees, then the Committee can get to business on the Bill.
Question put and agreed to.
Mr. Speaker: Does the hon. Gentleman the Member for Eastbourne (Sir C. Taylor) wish to move his Instruction to the Committee?
Sir C. Taylor: With the agreement of my hon. Friends, Sir, I propose not to move the Instruction.

VICE, STEPNEY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hughes-Young.]
11.19 p.m.
Mr. Walter Edwards: After the excitement which has been experienced by the House since seven o'clock this evening, I am sure the hon. Members will not begrudge me the opportunity of adding a little more.
I wish to refer to the situation which has developed over recent years in connection with prostitution in Stepney. I think that most hon. Members are fully aware of what is taking place in that part of London, particularly as it has received so much publicity in the Press. I am sure even the Home Office would like an opportunity of being able to explain what it has been doing about this matter, since it has become one of extreme seriousness.
The Stepney constituency is a residential area. It has docks and traders' shops, and so on, but the complaint of my constituents arises in the part of the borough where the London County Council has built new blocks of flats since the war, and where, obviously, young children are accommodated. There are business people in that area, too, who are greatly perturbed at the increase of vice in the area. It is the Commercial Road area to which I am referring.
Before the last war vice was hardly known at all in this area. Now we find that the ladies living in the new estates built by the London County Council and by Stepney Borough Council, and the children who are living there, are afraid to go about in the area because of the effects of, and the people connected with, vice. There must be some cause for this situation to be such as it is today, and so different from what it was before the last World War. I suggest that cause No. 1, unfortunately, was the war. Cause No. 2 was that as a result of the war quite a large number of our colonial friends managed to find accommodation there, in places which may have been evacuated, which may have been bomb damaged. They have now become what one may call permanent residents, and have decided that one of the best ways to get a living is by the opening of cafés.
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One of the main troubles in this afflicted area is the large number of cafés we have there, owned, or at least rented, mainly by Maltese people, though some are owned or rented by other colonials; and the further fact that the people who rent these cafés do not believe in working just the ordinary café times but have these cafés open for 24 hours a day—day and night. Because of the large increase in these cafés there has been a correspondingly large increase in the number of people who, coming from various other parts of London or even other parts of the country, make use of the cafés.
Another reason for the trouble has to do with club laws. In the area a large number of clubs have been opened which have nothing to do with the ordinary Englishman's idea of a club, a place with a social atmosphere where families can enjoy a pleasant evening. They have been established wholly and solely to obtain special hours for drinking when ordinary licensed premises are closed—they charge exorbitant prices—and to give prostitutes the opportunity to meet all sorts of people whom they desire to meet at all times of the day. That is the situation today, and, as I say, it is completely different from what it was in 1939.
We may ask who is to blame for the changed circumstances. In Stepney itself, which has a population of about 67,000, it is being said that the police are not doing their job because they allow the prostitutes to stand about the streets and permit brothels to be established in old properties sold by British landlords to colonials and others. It is also said that the Stepney Borough Council and the London County Council are not doing their job. In my opinion, in the circumstances the police in Stepney have one of the hardest jobs in London, and they are doing their job as well as it is possible for men and women to do it within the law.
This sort of thing becomes political in a Metropolitan borough. The Communist Party in Stepney and some people who describe themselves as Labour Independents want to attack the Labour Party in Stepney and are saying that the Labour-controlled Stepney Borough Council is responsible. I would point out to the representative of the Home Office—and I would ask him to support me in

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this—that the Stepney Borough Council has no power to control prostitutes in the street except by reporting cases to the police.
The Council has no power whatever to control anybody who wants to open a café, whether he is a Maltese, a colonial or any other nationality. It has no power whatever over the hours that these places are open or the people who use them. Nor has the London County Council any power over the issue of what might be described as registration certificates to all-night cafés. My information is that the only body in London which has the authority to register an all-night café is the London County Council, but that registration is automatic.
If a person with such a registration commits two serious offences, it is left to the courts to decide whether the registration shall continue. Everybody knows that what happens in this type of atmosphere is that if someone is facing a second charge, the registration of the café is transferred to somebody else the day before the second conviction is recorded.
Who is responsible in this state of affairs? I have said that the Stepney Borough Council and London County Council are not responsible and that the police are doing all they can. The Home Secretary has suggested that it is the public on whom the authorities rely. But the Home Secretary and the Home Office should realise that when members of the public are sufficiently courageous to give evidence about vice, they have to attend the magistrates' court and disclose their names and address. They are deterred from giving information which would assist the police because their names and addresses are mentioned and often because they are people earning low wages, who cannot afford to lose one or two days' pay.
I want now to deal with what I consider to be the crux of the problem, not only in Stepney but in the whole country. Vice is not confined to Stepney. It is to be found in all the big towns. That has been the case for the last fifty years or so. What worries my constituents is that Stepney has more than its fair share of vice. What worries me is that the Home Office is just as "dead" in dealing with this problem today as it was fifty years ago.
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If there is any Department which I blame for the increase in prostitution in Stepney, or in any other part of the country, it is the Home Department. For years the Home Office has had everything behind it. Whatever party may have been in power, the Home Office has had the power to put through legislation. What has been done? Only a couple of weeks ago the present Home Secretary was asked to take some action against Maltese convicted of living on the immoral earnings of women. Of the 35 people convicted at the Thames Magistrates' Court of living on the immoral earnings of British women, 28 were Maltese. I am not sure of the percentage, but it amounts to about 70 or 80 per cent.
The Home Secretary shrugged his shoulders. If that happened in Saffron Walden, perhaps the right hon. Gentleman would wake himself up a bit. But because it is happening in Stepney, what does he say? That he is not prepared to depart from the long tradition in respect of the deportation of these British subjects. I was about to say these filthy so-called British subjects, because I do not care whether a man is born in this country, or Malta, or anywhere else in the world, if he lives on the body of a woman he is a filthy subject, and something should be done about it.
At the Thames Magistrates' Court, nine days after the Home Secretary had replied to the Question that was put to him, an Austrian woman, without a British passport, pleaded guilty to keeping a brothel in the Borough of Stepney. No doubt the magistrate had read the answer given by the Home Secretary and the result was that he fined this lady £15 for running a brothel in the East End of London, where there are women and young children who see these evil things taking place. I say that the Answer of the Home Secretary is an incitement to magistrates to let these people go almost scot-free. They earn £15 in an hour. What is the good of a £15 fine? What proposals has the Home Office to deal with this shocking state of affairs which has been going on in this country for the past fifty years? None at all.
The present Home Secretary's predecessor set up the Wolfenden Committee to deal with prostitution and homosexuality. I am told from a very unofficial

1305
source that the report on prostitution could have been presented to this House a long time ago, but that the Committee experienced difficulty in coming to a conclusion on homosexuality. Why did not the previous Home Secretary have the sense to tell the Committee to divide the two problems, because they are two separate problems? Had he done so, at least we might have been able to have some discussion and Government policy about this.
I hope that the Home Office will soon get a report from the Wolfenden Committee. It would give the Department an opportunity of doing something and not treating the Wolfenden Committee Report in the same way as it treated the Report of the Gowers Committee. We cannot rely on the Government; they set up committees and, when their reports are more or less favourable to what we on this side of the House think should be done, they turn them down.
I am afraid I have exhausted my time, but this is a matter on which one could speak for a long time. I conclude with the hope that the Home Office will take this matter much more seriously in future. It concerns not only Stepney, but the whole country.
11.41 p.m.
The Joint Under-Secretary of State for the Home Department (Mr. J. E. S. Simon): The matter which the hon. Member for Stepney (Mr. W. Edwards) has raised tonight is an aspect of a problem which has perplexed moralists and legislators for centuries. It is one which has to be faced in nearly all societies and many different attempts to find a solution have been made in different parts of the world.
This is hardly the occasion for an ethical or sociological disquisition, even if I were capable of making one. Indeed, I have not the time tonight to explain the whole of the criminal law on prostitution and offences connected with it, but I should like to make it clear that prostitution is not in itself an offence against the criminal law in this country; it is an activity which is reprehensible alike to the moralist and the sociologist, but it stands on that borderline between law and morals into which Parliament has not thought it wise for the criminal law to intrude too far.
1306
It is, of course, shocking to see women parading the streets for the purpose of selling the use of their bodies and, as the hon. Member suggested, it is particularly disagreeable and disturbing that young people should see such a sight, but the police cannot take action unless an offence is committed, such as behaving indecently in public or obstructing the thoroughfares or, of course, solicitation. Even solicitation is not in itself an offence. The Statute governing the matter in London is Section 54 (11) of the Metropolitan Police Act, 1839, which provides that
"Every common prostitute or night walker loitering or being in any thoroughfare or public place for the purpose of prostitution or solicitation to the annoyance of the inhabitants or passengers is liable to a fine of forty shillings."
The House will appreciate that it is necessary that there should be annoyance either of the people in the street or of the inhabitants before an offence is committed. I will return to the significance of that later.
The Sexual Offences Act, 1956, which consolidated a number of earlier enactments, provides severe punishments for offences connected with brothel keeping and living on the earnings of prostitution. So far as these latter offences are concerned, the hon. Member and the House will be aware that there are difficulties in enforcing the law. Proof is by no means easy, and long and patient observation is found necessary, but the police are constantly vigilant for offences of this kind. As hon. Members will have noticed, several cases have been prosecuted to conviction recently.
My right hon. Friend the Home Secretary, in replying to a Question by the hon. Member, stated that he and the Commissioner of Police did see cause for concern in the situation the hon. Member has described. That concern we all share and we have every sympathy for the feelings of respectable inhabitants of Stepney. I can assure the House that my right hon. Friend has taken a personal interest in this problem and kept closely in touch with all these developments. It was with his entire approval that my hon. Friend the Joint Under-Secretary and I visited the area at night. My right hon. Friend felt himself precluded from doing so and that it would be better not himself to take such action pending receipt of the Report of the Wolfenden Committee,

1307
but I can assure the House that he is concerned with this matter and is very closely in touch with all its developments.
It is true, unfortunately, that statistics indicate a considerable recent increase in offences connected with prostitution in Stepney. The number of arrests for solicitation was 449 in 1956, compared with 123 in 1954, and 255 in 1955. The indications are that this year will show a further considerable increase. There have also been increases in the number of prosecutions under the L.C.C. byelaws for outraging public decency and the number of proceedings for the offence of living on the earnings of prostitution.
To set the figures in perspective, I should say that the number of arrests for solicitation in the whole of the Metropolitan Police District was 10,948 in 1954; 11,173 in 1955; and 11,008 in 1956. Though the number of arrests in 1956 for soliciting in Stepney was 449 and the number of arrests for outraging public decency was 122, the total number of women involved in these 571 proceedings was 119.
I do not wish in any way to play down the seriousness of the situation, but the problems which have arisen in Stepney are not different in kind or character from those which exist elsewhere, as I think the hon. Gentleman very rightly pointed out. The hon. Gentleman has urged the Government to take action. The first thing I would say is that my right hon. Friend has no power over the courts, and it would be very wrong indeed if he sought to influence the sentencing policy of the courts. That, I am sure the House would agree, would raise very serious constitutional implications.
Further, any action for the moment—and I emphasise "for the moment"—can only take place within the framework of the existing law. It would, in any event, be out of order tonight to discuss suggestions for the amendment of the law, and, as the hon. Gentleman reminded us, the Wolfenden Committee will be making its Report next month.
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My right hon. Friend is satisfied that the police are doing everything possible within their limited resources, and I think that the last year has seen a welcome improvement. They are still hampered by a shortage of manpower, but they are, my right hon. Friend is satisfied, doing their best to enforce the law. I was very grateful for what the hon. Gentleman said about that. Arrangements have been made to concentrate resources in the area at the most difficult places, and the police are fully alive to the problem. Indeed, I think it would be fair to say that the increases in the number of proceedings are as much due to the increased activity of the police as to an increase in the number of offences.
I have discussed matters with senior police officers on the spot and have seen something of their problems, to which the hon. Gentleman referred, and the way in which they are tackling them. I was profoundly impressed by their knowledge of and determination in the matter. I am also glad to be able to bear out what the hon. Gentleman said, that there has been close co-operation in Stepney between the local authority and the police. The Mayor has already had a discussion with the Deputy-Commissioner of Police of the Metropolis, and my hon. Friend the Joint Under-Secretary of State and I are receiving a deputation from the Council in the very near future, when it will, no doubt, have some suggestions to put to us.
I am pleased to bear out what the hon. Gentleman said, that no possible blame can attach in this matter to the local authorities. They have been vigilant and active—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at eleven minutes to Twelve o'clock.

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Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

LORD RANK
Joseph Arthur Rank, Esquire, having been created Baron Rank, of Sutton Scotney in the County of Southampton—Was (in the usual manner) introduced.
The Lord Inverforth—Sat first in Parliament after the death of his father.

TRADE WITH CHINA
2.40 p.m.
VISCOUNT ELIBANK: 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 whether a quantitative control for exports to China is being worked out in "Chincom" in Paris, and, if so (1) what strategic purpose, if any, is such a control designed to serve; (2) on what basis of allocation is the control being worked out as between the United Kingdom and other N.A.T.O. countries; and (3) what steps are being taken to ensure that the advantages of the initiative shown by Her Majesty's Government in acting unilaterally to reduce the China embargo are being fully maintained in the interests of British traders.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF GOSFORD): My Lords, it is correct that quotas for the twenty-five items under quantitative control for export to China are being discussed by the China Committee of the Consultative Group in Paris. While these items are not necessarily of strategic importance as single units, they become important if exported in sufficient quantities. The basis of allocation is a matter for adjustment between member countries in the light of the strategic potentialities of the items in question.
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There is no question of British exporters being in a special position in this matter since the majority of the countries represented on the China Committee have now adopted the same control list for both the Soviet bloc and China. It is for business men themselves to follow up the opportunities for trade in non-strategic goods which Her Majesty's Government's action in relaxing the embargo should open to them in the China market. In this they would be effectively supported by the Sino-British Trade Committee and they can, of course, rely on all possible help from the Board of Trade.
VISCOUNT ELIBANK: My Lords, whilst thanking the noble Earl for his answer, and while still holding that there is no justification for extending the out-of-date Korean embargo, to a general embargo to China, may I ask him whether he can explain why, in the case of many articles in the second list which are of non-strategic character, they should be subjected to a quantitative control at all, especially having regard to the fact that they can be obtained by China from non-N.A.T.O. and other countries, and also that China herself is manufacturing many of them at an increasing rate?
THE EARL OF GOSFORD: My Lords, it might appear outwardly reasonable that certain of those items should not be in the quantitative list, but it is certain that in those items there may be materials which, if exported in quantity, will result in lowering the embargo on strategic goods as such to China. As for the list itself, that is not a matter for Her Majesty's Government to decide: it is a decision taken by the Committee as a whole.
VISCOUNT ELIBANK: I thank the noble Earl, but is he also aware that quantitative control, in practice, is throwing British exporters back into all the irritations and uncertainties which obtained under the end-use procedure?
THE EARL OF GOSFORD: I would suggest that the noble Viscount waits until the Committee has had the meeting which is going on at present before arguing in detail about this subject.
THE EARL OF LUCAN: My Lords, can the noble Earl explain on what information Her Majesty's Government decide what is the critical level of exports after which they become strategic?
THE EARL OF GOSFORD: I think I should rather have notice of that question; it does not form part of the noble Viscount's Question.
VISCOUNT STANSGATE: My Lords, if notice were given, would the noble Earl be willing to give a clear definition of what is "strategic value "? It is not very clear
THE EARL OF GOSFORD: I think I should have to consult my right honourable friend before committing him to a definite reply.
VISCOUNT STANSGATE: I will give notice.
VISCOUNT ELIBANK: 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 they will state the names of the countries having representatives on "Chincom."]
THE EARL OF GOSFORD: My Lords, the countries represented in the China Committee are Belgium, Canada, Denmark, France, the Federal Republic of Germany, Greece, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Turkey, the United Kingdom and the United States.
VISCOUNT ELIBANK: My Lords, I thank the noble Earl for his Answer. Is is not quite astonishing that America, which does no export trade at all with China and frowns upon countries which do, should nevertheless have a representative on this secret Committee "Chincom" in Paris, allocating trade between British exporters and their foreign competitors?
THE EARL OF GOSFORD: As I understand the noble Viscount, he is indicating that America does not export to China,
VISCOUNT ELIBANK: Yes.
VISCOUNT STANSGATE: Is the noble Earl not aware that America appears, from what one reads in the papers, to impose a total boycott as regards both persons and goods to China?
THE EARL OF GOSFORD: I do not quite understand the noble Viscount. I do not see how this comes into the original Question. The original Question was concerned with countries who are members of "Chincom." I cannot argue the reason for their membership.

REGISTRATION OF OPTICIANS
2.45 p.m.
LORD MILNER OF LEEDS: 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 whether, having regard to the fact that it is now five years since the Crook Committee reported unanimously in favour of the Registration of Opticians and to the various promises on the subject, consideration will be given to its inclusion into the gracious Speech opening the next Session of Parliament.]
THE MINISTER OF STATE, SCOTTISH OFF ICE (LORD STRATHCLYDE): My Lords, the introduction of legislation for the registration of opticians is still dependent on Parliamentary time becoming available, as was stated by the noble Earl the Leader of the House on February 5. I fear that I cannot give any indication whether it will be possible to include it in the programme for next Session but preliminary work is proceeding.
LORD MILNER OF LEEDS: My Lords, is the noble Lord not aware that this matter is quite non-controversial, that the Report of the Committee was unanimous, and that the Parliamentary time involved would be very short indeed?
LORD STRATHCLYDE: My Lords, I understand that to be the case.

THE COLONIAL DEVELOPMENT CORPORATION
2.46 p.m.
LORD OGMORE LORD OGMORE rose to move to resolve, That in the opinion of this House the Colonial Development Corporation is not being permitted by Her Majesty's Government to make full use of its opportunities in Commonwealth and Colonial development, and that Her Majesty's Government should change their policy and practice in this respect. The noble Lord said: My Lords, I have ventured to put this Resolution on the Order Paper to-day and to draw this subject to your Lordships' attention largely because of the Report and Accounts of the Colonial Development Corporation for the year 1956. So far as I am aware, no Report from a nationalised industry or a statutory corporation has ever been published in the history of Parliament which is as critical of the Government as is this Report. I and my noble friends on this side of the House felt that we could not allow this Report to pass without your Lordships' giving it consideration and having from the Government a statement in answer to the serious criticisms it contains. Recently the present Secretary of State for the Colonies said:
" Colonial problems are the touchstone by which our competence as a Government and our right to remain a great Power will in the long run be judged."
We agree with that. We think that that is the touchstone; and it is in view of that expression of the Secretary of State that we venture to bring this Report before your Lordships to ascertain whether or not the Government's touchstone is all that it should be.
During last year the Corporation had a very satisfactory trading period. There was a surplus for 1956, after providing interest of £416,173, of over £500,000, namely, £572,809, and there was a net operating profit from direct projects and subsidiaries of £371,718. In view of all the criticisms of the Corporation in the past, I think it is only right, when they have this splendid record for the year 1956, to congratulate the Board, including the Chairman, the noble Lord, Lord Reith, and the staff on an excellent year's work. New projects and continuing projects are sixty-six in all, and there are certain investigations as well.
At this stage, I want to say something to clear up a misunderstanding. It is often said that the Colonial Development Corporation cannot do this, that or the other because it would mean that United Kingdom taxpayers' money would be given away to some country or institution. In fact, the Corporation does not give away money or services. It is a nationalised industry, but it is an industry, and, as everyone knows who has dealt with the Colonial Development Corporation (as indeed I have), it operates on commercial lines. There is no element whatsoever of charity or anything of that kind—no philanthropic principle about it. It is a commercial undertaking. Therefore, when the Corporation operates in territories abroad we are not, in fact, making them loans or giving them gifts: we are undertaking with that territory overseas a commercial proposition but of course one which takes into account many elements which cannot be, or are not, taken into account by private enterprise.
In the Report there are six heads of disagreement with the Government—there are six charges in the indictment, as it were. The first charge is that the borrowing limit has been reached. Your Lordships will remember that the Corporation is entitled to borrow £100 million and to invest this in its various activities overseas. The borrowing limit has been reached—that is to say, the work in hand and the moral obligations which the Corporation has to meet mean that the Corporation has involved itself in expenditure of over £100 million. I do not mean that over £100 million has already been spent, but that it is committed. I say this because yesterday in another place the Secretary of State denied in fact that this was so, he implied that there was a sum of, I think, speaking from memory, £16 million available to the Corporation. I am told that that is not so; that in fact the Corporation's funds are committed in the way that I have mentioned. This means, of course, that the wheels of the Corporation are grinding to a stop; they cannot undertake any new projects at all. This is a matter which was put to the Government, as long ago, I believe, as May, 1956. They were warned of it, but nothing has been done, and, unless the situation is remedied, the Corporation

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will virtually, so far as fresh projects are concerned, come to an end.
The second charge against the Government by the Corporation is in regard to alternative finance. They have been told that if alternative finance is available the Colonial Development Corporation cannot participate in or take on a project. This, of course, is a fantastic position so far as they are concerned. First of all, it would mean that they would be left with only those projects in respect of which no alternative finance was available—in other words, all the live rounds would go to private enterprise and all the duds would go to the Corporation. Secondly it would mean that they would have to assure any partners who wished to come in with them that the project was not commercially sound; that nobody but themselves would put up money for it. They are bound to take in partners because that is one of the rules of the Government. The Government fore; them to take in partners in projects. So the refusal by the Government to allow them to undertake projects unless then; is no alternative finance means, in practice, that they are not able to undertake any projects at all.
The third charge against the Government is the charge relating to emergent territories. The Corporation is prohibited from starting new projects after independence in any colonial territories which achieve independence within the Commonwealth. This is distasteful both to the Corporation and, to my knowledge, to some at least of the countries which are obtaining or which have achieved their independence. The Government have moved forward a short step in the right direction, and they have now agreed that the Corporation can act as a management agent for a country which has achieved independence, so long as there is no commitment of the Corporation's funds. That goes a little way. In fact, we suggested that on a previous occasion in this House, but we meant it only as an alternative; we did not mean it to supersede or take the place of the normal method of working—that is to say, where the Corporation involved some of their own funds.
They can also provide capital for existing projects when necessary. But there has been no definition of "necessary", and we should like to know who is to decide when it is necessary to provide
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the fresh capital—whether it is the Corporation or the country concerned, or whether it is the United Kingdom Government. But the rule prohibiting the Corporation from entertaining new projects after independence is a bad one. It seems to us that the Corporation should be able to invest in emergent and emerging territories if they wish to do so. It is obviously to the advantage of both countries. To cut them off from aid of this nature, aid which they cannot get from any other source, is, I should have said, the wrong thing to do when the country becomes independent.
We understand that the noble Earl, Lord Perth, has been chairman of a committee which has been considering the question of aid to emergent territories. Nothing has yet evolved from that committee, and it is difficult to see how anything will evolve. Without any disrespect to the noble Earl, I would say that there is no other instrument: by which the Government can achieve such aid. The Commonwealth Development Agency and the Commonwealth Bank have not obtained the support of other Commonwealth countries, we are told, and these potential agencies are not, and will not be, in existence either.
I think it is most important to continue this aid, quite apart from the fact that we need trade and the mutual assistance which the Colonial Development Corporation can provide. Quite apart from than it is most important to continue the aid and the operation of the Colonial Development Corporation at the time of independence, for this reason. It so happens that in many cases the peoples in colonial territories equate independence with a higher standard of living and an increased prosperity. Sometimes colonial politicians take active steps to foster that view. Sometimes they are inclined to say, "When the British go, you will all be much better off". But in fact it so happens that sometimes the reverse is the case, and for a time the standard of living and prosperity may even decrease after the withdrawal of the British until the country has got on to its feet and evolved new methods of economic development. But if, at that particular moment, when already there is a danger of frustration and disillusionment on the part of the people, the one type of aid—I do not like to call it aid; it is not aid in a sense—the one type

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of operation which we can bring to their help, is going to be taken away rudely and abruptly from them, then I think that there will be considerable danger of a blow to democracy and to constitutional Parliamentary government in these various territories. In fact, just at the moment of independence we probably need to help them more than ever. I should like to know whether at the recent meeting of the Commonwealth Prime Ministers, this subject, which is a very important subject, was discussed, and whether any decision was reached. I do not suppose we shall be told that to-day, but we should like to know anything we can be told this afternoon, because surely, with the Prime Minister of Ghana present at the meeting, and the certainty of the Prime Minister of Malaya being present at the next one, it must have been a subject which came before the attention of the Prime Ministers assembled around the table at No. 10 Downing Street.
The fourth charge made by the Corporation against the Government is that their interest is high and that the charges made to them by the Government are also high. As to the interest, it appears that on long-term loans they paid as much as 5¼ per cent interest, and the Corporation says that, so far from any assistance being given to them in the fact that they are developing colonial territories, they are actually paying in interest more than the Government are paying for their own needs in this country. The rates are not, in fact, based on the cost of Government borrowing here; they are greater than the rates at which the Government can borrow money in this market, and they feel that that is rather unfair, having regard to the type of project they have to deal with and to the fact that they are developing colonial territories.
The fifth charge that they make is the charge relating to special losses. Capital is still debited to them, although it has been lost in schemes abandoned years ago. In the early stages of the Corporation, when this was an entirely new feature in the uncertain conditions of the post-war world, projects were started which were found to be uneconomic, and they were abandoned, with the consent of the Government. But this vast sum
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of money in respect of these projects still sits on the Corporation's shoulders, as I said previously, like the Old Man of the Sea on Sinbad's shoulders—with the same effect, a very depressing effect, for the Corporation. The Government have never allowed them to write off this capital. They have made an offer that the Corporation should be allowed to write off part of it, and they have also allowed a certain amount of the interest to be forgone. But really there is no point whatsoever in keeping this large sum of £8 million "sitting" on top of the Corporation, and the Government might just as well allow them to liquidate it so that they can start off feeling that they no longer have this very heavy burden of debt on their shoulders.
As I have said before, one must remember that in all these types of projects, where one is dealing with backward and undeveloped areas, there is always in the beginning a good deal of loss. I was interested to find recently that the United Nations Technical Assistance Programme had run into the same sort of trouble, although they, of course, had the advantages of the experience we had gained in the Colonial Development Corporation, and they had the whole world to "milk," as it were, for technical aid and assistance and advice. But I find that 9 per cent. of the projects established in backward areas by the United Nations Technical Assistance Programme were disappointments. Out of 1,334 projects, "Below expectation" ratings were applied to 47 projects, and 16 more were terminated before completion. No judgment was passed on 141 projects which were in their earlier stages. The report goes on to say that the resident representatives in charge of the projects blamed the shortcomings of the assisted Governments in 71 per cent of the failures. Your Lordships will see that even the United Nations, with all their tremendous advantages in this way, have run into a great many difficulties, and that a great many projects have had to be abandoned.
The sixth charge made by the Corporation is that in trying to clear up certain doubts in an Act last year, particularly with relation to Southern Rhodesia, in spite of the warning of the Corporation the Government have achieved new doubts. The question of what is needed

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(because they can act and take over projects operating in Southern Rhodesia only in case of need), as the Corporation warned the Government, is proving a stumbling block. It is very difficult to decide whether or not a project is needed for the development of the economy of a country. The Corporation suggested that the word "desirable" was a better word, and one would think that was so. That is, I think, quite a minor point compared with the others, but apparently it is causing some concern in Southern Rhodesia.
The Corporation have always received a great deal of support from noble Lords on both sides of the House, in fact in all parts of the House. But looking quite objectively at the situation as represented by this Report it seems to us that the Government are trying to stifle the Colonial Development Corporation, to kill what is now a very promising youngster. Noble Lords may ask why. I think the reasons for this are partly doctrinaire and partly personal. They are doctrinaire in that the Government too often have the sort of 19th century idea of enterprise in colonial territories which one hears every now and again, and which is found in its finest flower in the speeches of the noble Lord, Lord Grantchester, who in this supports them to the hilt. We have seen it on many occasions—with steel, road transport, air trooping, commercial television. I.T.V. and so on.
THE EARL OF SWINTON: Who was the noble Lord who made the speech that has been so much censured?
LORD OGMORE: Lord Grantchester. On a recent occasion he felt that the only Members of Parliament should be those who have very successful businesses and were able to devote such time as they could from these successful businesses to the work of the public in Parliament. That is a view he is entitled to hold; I am not suggesting he is not. And I am saying that the noble Lord's views in this field—that is to say, how we should operate in colonial territories—seem to be views which are held by the present Conservative Government. They have not only shown their views in the other way I have mentioned, but even in this field they have shown what their views arc, because they have developed, or are trying to develop, as a competitor to the Colonial Development Corporation
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a private enterprise corporation or company called the Commonwealth Development Finance Company, Limited. This is said to be—it has been said to be by a Minister, by the noble Earl, Lord Perth—intended to take the place to some extent of the Colonial Development Corporation.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND LORD PRESIDENT OF THE COUNCIL (THE EARL OF HOME): May I get this clear? The noble Lord says that the C.D.F.C. is a competitor to the Colonial Development Corporation, but since it does not operate in the colonial territories, how can it be a competitor?
LORD OGMORE: There is nothing to stop it operating in the colonial territories—in fact, it is intended to operate in the colonial territories.
THE EARL OF HOME: But in the Commonwealth as a whole it does not compete—in the independent Commonwealth.
LORD OGMORE: I do not quite know what is the object of that intervention.
THE EARL OF HOME: I am trying to get clear what the noble Lord means.
LORD OGMORE: The fact is, as I understand it, that the Government have created—when I say "created" I mean they have made possible, or encouraged, the development of the Commonwealth Development Finance Company as a private enterprise competitor to the Colonial Development Corporation.
THE EARL OF HOME: I am obliged to the noble Lord. I now understand his point.
LORD OGMORE: That is what we believe to be the fact—indeed, the noble Earl, Lord Perth, more or less said that in our previous debate.
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): Perhaps I may be allowed to intervene, as I have been quoted as saying a certain thing. What I said was that in the independent Commonwealth territories, where the C.D.C. cannot operate, we hoped the C.D.F.C, a private enterprise Corporation, might step in and do the job.
LORD OGMORE: Yes. I think we now have that point clear. The fact is that in Commonwealth countries, in independent and in colonial territories, this Company, which is not confined to independent countries but is intended to operate in colonial countries as a whole, is intended by the Government to be a competitor.
Why Ministers opposite are now so worried about this I do not know. I thought that one of their great slogans was "competition". All I am saying is that they have created a competitor to the C.D.C. I am trying to establish a fact. There can be no doubt that it is the fact. We do not object to that at all. We say: let us have as many links with the Colonies or Commonwealth as we can have; have some of the money from the City of London, and so on. That is all well and good. I am not objecting to that. What I am objecting to is the attempt to make this Finance Company replace the Colonial Development Corporation, because it cannot possibly do that. There is room for both, but this company cannot possibly replace the Corporation, simply because the company has not the personnel, the money or the organisation. In fact, it has said so in its report. In its first report, the chairman said, in effect: "We do not intend to operate, ourselves, in overseas territories; we are a finance house"—in other words, "We do not intend ourselves to provide the necessary technical assistance and 'know-how'". It means that the Finance Company is just going to be a finance house. But the colonial territories need the technical "know-how", experience and organisation which the Colonial Development Corporation have and the finance company do not have.
The second reason, the doctrinaire reason, is a personal one. There seems to be a feud between the Secretary of State for the Colonies and the Chairman of the Corporation, Lord Reith. Neither of them has told me this, so I may be wrong. I am only assuming it from the fact that I do not think that if personal relations were—I will not say good but even moderate, any such Report as this would ever have been presented by a State Corporation; and I cannot believe that good relations can, in fact, be subsisting between them.
Now what of the development of underdeveloped territories? This is, undoubtedly,
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one of the pressing needs of our time. The Government pay lip service to this problem, but I am afraid, with the history of this Corporation before us, that it is only lip service. There is need for a stable and enlightened financial and economic policy of association between us and the territories overseas. What is the sort of association now? I take this quotation from the Daily Telegraph of June 3, from an article by the City Editor:
" The Malayan and Indian Governments are considering means to combat the ' menace ' of take-over bids for rubber companies in Malaya and, to a lesser extent, tea companies in India. Mr. W. Kenneth Warren, chairman of James Warren and Co., the merchants and rubber and tea agents, says in his statement that many of the bids are being made for the purpose of liquidating and acquiring the current assets of the companies and enforcing a sale of the estates involved. The Malayan Government have now realised that this is having a disturbing effect on labour.
" Consequently, he says, the Government is taking steps to combat the menace. The Indian Government was also taking steps ' which should make such transactions unprofitable '.
" Take-over possibilities are also having a disturbing effect on managerial staff, says Mr. Warren. They ' may become affected by the operation of speculators and those who advise them in search of tax-free capital gains for personal advantage at the expense of the industry and all concerned with it'".
If that is true—and I cannot imagine the Daily Telegraph printing, or Mr. Kenneth Warren saying, anything which was not true—that is a very disturbing feature. When one thinks that this is occurring in the rubber industry of Malay, a country for which we are still responsible; that this great rubber industry is at the peril of take-over bids by those in search of tax-free capital gains for personal advantage, it seems odd, that for some doctrinaire reason, the Government will not allow the Colonial Development Corporation to continue its beneficent operations unchecked. We allow take-over bids affecting one of the two main industries of Malaya on behalf of those who are out to make high profits and tax-free capital gains.
What is required in these countries has been well set out by the Economist intelligence unit who have prepared a special report for the Uganda Electricity Board. There is perhaps nothing new in the report, but it puts the matter in a neat way. On page 149 it says:

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" It is only toy industrialisation that the basis for a permanent improvement of living standards can be provided—and all that this improvement means in the way of better health, education and more developed administration. For many decades yet, the industrial sector of the economy is bound to be small, although the previous sections have shown that this sector is growing rapidly and is considerably larger than is generally realised. So long as the agricultural sector accounts for such an overwhelming proportion of the Uganda economy, however, the country's prosperity will remain unduly subject to the vagaries of international commodity markets; and if only on economic grounds increasing industrialisation is to be strongly welcomed."
The Economist spoke only too well, if the vagaries of commodity markets are indeed to affect the country's economy and these great industries are now also to be subject to the vagaries of those who wish to make capital gains by means of take-over bids.
In the Report of the Uganda Development Corporation there was this statement:
" The expansion of manufacturing industry, as has been stated and re-stated will depend entirely on the growth of the purchasing power of the people which can, only follow the expansion of agricultural production; that is the key to our future. It must be recognised that new manufacturing industries on any large scale can only be established against substantial local requirements of goods; a large proportion of manufactures are, in any event, excluded through lack of raw materials."
The picture, therefore, in Uganda, as in most colonial territories, is of the necessity for the development of their agricultural products and the tying in, as it were, of their industrialisation, in order to make use, so far as possible, of those agricultural products. There is no short cut, and the necessity for an organisation such as the Colonial Development Corporation to help them with their industrialisation is so apparent that there is no need for me to stress it.
I do not wish to weary your Lordships at much greater length but there are just one or two things I should like to say before I conclude. First, as I have said, Commonwealth development is of mutual benefit, both to the United Kingdom and to the colonial territories. The participation of the Colonial Development Corporation is not a gift or a loan; it is a commercial venture, and one which is needed by the territories. And this sort of association is, moreover, needed by us. According to the noble Viscount, Lord Bruce of Melbourne, in a recent speech, during the last ten years we have
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paid out £3,500 million more than we have received from exports and investment income. The gold and dollar reserves are lower today than they were in 1951, when the present Government came to power. Since 1951, Britain's share of the world market in unmanufactured goods has dropped from 22 per cent. to 19 per cent. Since the same year the purchasing power of the pound has dropped by 3s. 11d.
According to the Colonial Annual Report, the United Kingdom is still the largest individual supplier and customer of the colonial territories, but I regret to say that our relative position is declining, and declining pretty fast. If we take the distribution of exports by destination from the Colonies, we find that exports to the United Kingdom fell from 29 per cent. in 1954 to 248 per cent. in 1956—in two years. The distribution of imports from Britain to the Colonies, excluding Malaya and Hong Kong, fell from 376 per cent. in 1954 to 36·4 per cent. in 1956. In the case of Malaya and Hong Kong, imports from the United Kingdom for the same period fell from 16 per cent. to 15·6 per cent. So there is a definite decline both in exports from and imports to the colonial territories. In view of our position, as mentioned by the noble Viscount. Lord Bruce of Melbourne, that is a disturbing factor, one which I feel sure we should strive to put right and not further to diminish.
I should like to touch for a moment on the Labour Party's policy, to make sure we all know it. The Party's Statement of policy on Colonial affairs of 1954 said this:
" The rôle of the Corporation—
that is, the Colonial Development Corporation—
" should be re-examined in the light of the experience gained. In particular we shall consider how the work of the Corporation can be made to combine more effectively with the Colonial Development and Welfare Schemes so that they complement and supplement each other.
The experience of both has revealed the necessity for increasing the facilities for training more technicians within the territories and in Britain."
Recently the Labour Party produced an official pamphlet, Labour's Colonial Policy: Economic Aid, in which this is said [page 29]:
" In office it—
that is, the Labour Government—
" will take steps to change the Corporation's constitution to enable it to become the main

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instrument of public investment in colonial under-developed areas. It will also create an instrument available to the emerging territories of the Commonwealth who still need capital and practical assistance during the early years of their independence and will equip it with adequate finance and powers for its rôle."
In other words, they will do what the Corporation are criticising this Government for not doing. I think that it is also important to carry out what we have suggested for the last two or three years to the Government—namely, to change the name of the Colonial Development Corporation to the Commonwealth Development Corporation. This would enable their operations to take place in the emergent territories without any question of any kind of colonial link.
We would give a message of hope to the Corporation. First of all, we wish and urge the Government to remedy the matters that the Corporation have asked them to remedy. But if they will not do so, we would ask the Corporation to possess their souls in such patience as they can until the electorate decide to change the Government, when, as they will see the Labour Party has made abundantly clear, the next Labour Government will give Commonwealth development such assistance as they think desirable and necessary. I beg to move.
Moved to resolve, That in the opinion of this House the Colonial Development Corporation is not being permitted by Her Majesty's Government to make full use of its opportunities in Commonwealth and Colonial development, and that Her Majesty's Government should change their policy and practice in this respect.—(Lord Ogmore.)
3.25 p.m.
THE EARL OF SWINTON: My Lords, I think that we should all agree that the Colonial Development Corporation have done a lot of good work. If we were discussing only Part 2 of the Report which is before us to-day, I think that we could all join hands in congratulating the Corporation on the good showing which that part of the Report makes. But I am bound to say that it strikes me as a little more unusual that in Part 1 of the Report we are asked to consider—and the noble Lord, Lord Ogmore, devoted the greater part of his speech to this—a recital of the disagreements and disputes which have taken place between the Corporation and the Colonial Office. Indeed, the noble Lord, Lord Ogmore.
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said that it was an indictment of the Secretary of State, and he proceeded to recite six charges or counts in the indictment.
In reading the Report, I was reminded of those circulars we sometimes receive from dissident shareholders asking us to vote for a change of management or a change of directors. I should like your Lordships to be clear on the legal position. The noble Lord, Lord Ogmore, said that there ought not to be any personal differences, implying that if only the Secretary of State would do what the noble Lord, Lord Reith, told him to do all would be well. I do not want to say who was right or wrong, but I should like the Government to make perfectly plain to the House to-day where the statutory right and duty lies as laid down by the Act of Parliament.
As I understand it, Parliament has laid down that the general policy is to be settled and enunciated by the Secretary of State and then it is the function of the Corporation to carry out that policy. I should like the noble Earl who is to reply to make clear where the responsibility lies. Of course, the Secretary of State is responsible to Parliament for his policy and for his administration, and it is quite in order, and common form, that Ministers should be criticised and attacked and, if necessary, censured. When I sat on the Front Bench I have known criticism to be made of Ministers from all quarters of the House, and I hope no Minister ever resented it. What has been more usual in the past, and I think is the more convenient practice, is that the censure of Ministers came from Members of another place or of your Lordships' House. I do not think it should come in the form of a report by the Minister's own agent. If an agent cannot carry out the policy he is appointed to carry out, there is a simple course open to him, which is open to all of us when we cannot find ourselves at one with our colleagues—he can always dissociate himself from them. I should have thought that that was the more usual plan. I am not talking of the merits now. I think it would be rather odd if all the agencies the Government have set up—and heaven knows there are a lot of them!—were to present every day to Parliament a vigorous indictment of their principal. However, as the noble Lord

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said, I may be very old-fashioned in this respect. I wonder, if and when the Socialist Government come into office, and if all the national boards then join in a chorus of condemnation, what will be said by the Socialist Front Bench.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I suppose we should do exactly as the Secretary of State has done now. He has presented this Report to Parliament in a Motion, in order that it may be printed and circulated. I can see nothing wrong in that; and I can see nothing wrong in the Report.
THE EARL OF SWINTON: The noble Viscount is entitled to his opinion: we all have ways of doing things. Of course, the Secretary of State, when he gets the Report, presents it to Parliament, and quite rightly we are discussing it. But I think the noble Viscount would find it a little odd if all his national instruments joined in cursing him when he took office again.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Will the noble Earl excuse me? I understood at the beginning of this part of his speech that he was rather inclined to challenge the legality of this provision and would like to get a legal explanation from the Government. I can see nothing illegal about it.
THE EARL OF SWINTON: Perhaps the noble Viscount will kindly allow me to make my speech. Nobody has ever challenged the legality of this Report. Of course it is legal for anybody in a free country to write anything they please. What I asked the Government to do was to make plain what was the legal position of the Secretary of State, as laid down in the Act of Parliament, and of this Corporation. As I understand it, the legal position which Parliament laid down was that it is for the Secretary of State to formulate the policy, and for the Corporation to carry it out. I am not asking the noble Viscount. I want to ask the Government, who are the only ones competent to answer that question.
I now come to the Report itself. The criticisms in the Report, as has been said, are twofold. One: set of criticisms is on the detailed exercise of powers, and the other is on the part which this Corporation ought to play in non-colonial territories. The noble Lord, Lord
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Ogmore, has said that he thinks the Corporation are right in all their criticisms. I will take just one or two of them. In paragraph 11 of the Report the Corporation complain of the rate of interest which the Colonial Office have been charging. The noble Lord said that, of course, they should be able to get the money much cheaper; but I am bound to say that I do not agree. Honestly, I cannot see why they should. I should have thought that the right thing for this Corporation, as for any other corporation—the National Coal Board, the local authorities of this country, or anybody else—was to pay the market rate for what they borrow. I cannot see anything wrong in that. If a Crown Colony itself borrows on the market, as many of the Crown Colonies have done, and enjoys a good credit, it has to borrow on the market at the current market rate; and so has every borrower. Unless the market rate, or a fair rate, is paid, what the Corporation would be doing would be receiving a concealed subsidy. I do not think that that is right. I think they should pay the normal rate for their money.
I must say that one thing I agree about is this. If capital has been irretrievably lost—and there is still a certain amount of capital which has been irretrievably lost—and has not been written off, then I should have thought it was a reasonable thing to write off that capital which can never be recovered, because each venture ought to stand on its own feet. I should have thought that where the whole thing in in liquidation, the sensible thing to do would be to write off the capital invested in that particular business.
Then there is the question of alternative finance. Frankly, on this matter I take a different view from that of the noble Lord, Lord Ogmore. When this Act went through—we all shared in it; I forget whether it was our Government or our predecessors who passed it—I thought it was an agreed measure and we were all glad to carry it out. But I am bound to say that I did not understand at the time, nor during all the time I was in office, that it was ever suggested that the object of this Corporation was to toe a competitor with all the other sources of investment. On the contrary, I thought its object was to fill a gap. The noble Lord says that if they do that they will get only bad business. I do not think so at all. Very

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often there is business, particularly when capital is short, for which you cannot borrow in the open market, especially the rather small concerns for which it is difficult to get the £50,000 which may mean the difference between the thing being floated or not.
May I venture on a personal reminisence? I well remember that when we established the United Kingdom Commercial Corporation in the war, we did two things. We carried on the economic warfare, and over that we lost money, because what we did was to buy up the goods at any price so that the enemy did not get it. That is rather like firing off a shell—you cannot make a profit but you try to get value for your money. Then we had another side, running into hundreds of millions of pounds, where the Government corporation financed business which could not be financed through the ordinary channels; and I may say that on that we made a handsome profit. There is a great place for undertakings which supply a need of that kind.
Then we come to the other side of Part I of the Report: what is to be the future of the Corporation in what are called the "emerged territories"?—that is an odd phrase which refers to the territories which have now attained sovereign independence. I was personally concerned with this matter, and I feel, and on consideration I am sure the members of the Corporation would agree, that the Report is a little unfair to the Government in paragraph 15 (8). The House will remember that that dealt with a rather infelicitous clause which occurred in the Ghana Bill; I think everybody would have liked to deal with it in a different way. Paragraph 15 (8) of the Report says:
" Government was still urged to drop the clause as infelicitous, and rely on informal agreement with C.D.C. pending outcome of promised review "—
that is, the full review of the whole of Empire finances—
" but Government insisted on retaining the clause."
I do not think that that is quite fair. I made the proposition that this direction should be given as an administrative direction. The House will remember that it was most carefully considered by the Lord Chancellor and the Law Officers,
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and the Lord Chancellor, in a carefully considered speech, told us that he and the Law Officers were bound to advise the Government that it would be ultra vires for the Secretary of State to give an administrative direction of that kind. When the Lord Chancellor tells us that that is the law and what is the limit of the Government's powers, then I am bound to say that I think it should be accepted in all quarters of the House and everywhere else, and that paragraph ought not to have appeared. The Government in those days, quite rightly, I think, took the line that the future functions of the Corporation in the independent territories must form part of the review of the whole finance of Commonwealth development, and in this review, as they told us, they would immediately consult with all the Commonwealth Governments. That, I understand, has been done; and I have no doubt that there were further discussions at the recent Commonwealth Conference in London.
Surely, before a decision is given on one particular Corporation, one particular agency, if they are having this review—not only a review by the Government, but a review in which the whole Commonwealth is taking part—then it is reasonable that any decision about this Corporation should form part of that review. Indeed, I would say it is not only reasonable, but imperative on any Government. But the Corporation do not want that at all. They state quite flatly that they ought now to be given the authority to operate in any independent territory, and that the title of the Corporation should be changed. I do not at all wish to prejudge what ought to be the powers of the Corporation to-day, but I do say that we cannot possibly judge that in isolation.
The Corporation advance in paragraph 16 of the Report a reason why this isolated decision should be taken. They say it would be unfair that the skilled personnel of the Corporation—and they have a very good personnel—should not be available outside the colonial territories. Whatever decision is ultimately taken about the functions of the Corporation, I do not see what is to stop the personnel from being used. The Corporation could perfectly well operate as an agent for some other body. The

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Corporation could perfectly well lend, at a fee, any of its experts for a particular project. Really that does not seem to me a reason for prejudging this matter. I think, therefore, that it is premature to pass judgment until we know what the Commonwealth countries have agreed.
In conclusion, I would put in only a few general considerations about the finance of Commonwealth development. Whatever effect the earlier part of my speech may have had on some noble Lords opposite, I think here I shall probably carry most of the House with me. I would say, first of all, that we all want the maximum investment in the Commonwealth. Next, I would say that we all want as much Commonwealth cooperation as possible in finance and in deciding what should be done, and how it should be done. I do not believe that you can have anything in the nature of a joint Commonwealth Executive—the Commonwealth does not work in that way. Each Government has to take its own decision and carry it out, and shoulder its own responsibility. But that, of course, does not prevent close consultation and agreement on policy and agreement on execution.
Then I would say this. There will never, at any time that we can foresee, be enough capital available, whether State capita] or other capital, for all we want to do. You cannot lend from an overdraft. You cannot borrow short and lend long—as the noble Lord, Lord Brand, would tell us, you would pretty soon get into trouble if you did. Therefore, surely, it is most important, in join: Commonwealth planning and in the action taken by each country of the Commonwealth, that priority decisions should be carefully weighed and should be sound. Surely, it follows that the Government in the United Kingdom must decide about this Corporation, as about other ways and means, after reviewing the whole field. I think that that goes for the borrowing limit of this Corporation, by which I mean any large extension. Obviously, they ought to have enough to carry on from day to day. I gather there is some argument as to whether they have, or have not, £10 million or £12 million in the kitty. But I would say that if there is some useful proposition that ought to be carried out, then they ought to have the advance to
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do it. But, broad and large, any great extension of their borrowing power over a long term of years must surely be part of the general decision.
I wish to say this finally about the relation of the Corporation to the independent countries of the Commonwealth I do not think it is at all easy. I think there are difficulties, and real difficulties, in treating the full members of the Commonwealth, differently, one from another, in the matter of finance. It is not only that financial independence and financial responsibility are essential elements in independent status, though that is important. It is particularly important to all the States that constitute the Sterling Area. We have seen recently how an over-ambitious programme, pursued in India after it became apparent that it was far and away beyond the resources of that great sub-continent, looked like bringing the whole institution of the Sterling Area into peril. I sincerely hope that that has been set right, because anybody can lecture as much as they like—that does not do us any harm—but we should object to one of the partners bankrupting the others. That would not be a good plan. That emphasises the importance of the individual responsibility and the collective responsibility of the individual countries who constitute the Sterling Area.
I do not want to be a pessimist, but we must not be too optimistic about these things. We must not be misled by improvements in reserves which are more apparent than real. We are glad to see it, but when we look at the improvement in the reserves it is important to see whether that is a real improvement, as a result of favourable balances, or whether it is what I may call an adventitious aid. I think my figures are right, but I shall no doubt be corrected if I am wrong. To take round figures, 100 million dollars comes from the waiver of the American loan interest, and something like 550 million dollars or 560 million dollars from drawing on the International Monetary Fund—both of them perfectly proper operations, but not to be looked at in the same way as if we had earned, on our own, a new surplus. I have this other suggestion to make about the treatment of these independent Commonwealth countries. None of us, no-one in the Commonwealth, wants a two-tier Commonwealth. Is there not a risk of

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this if we treat the emerged countries as if they were Colonies? You will not avoid that merely by a sort of baptismal regeneration, by altering the title of this Corporation.
We should all like, certainly those of us who feel that the decisions must form part of a concerted whole, to have as soon as possible a full Government pronouncement. If possible, I hope we may have it before the adjournment. If not then, I am sure both Houses of Parliament would agree that it should come as soon as it can, and not wait for Parliament to reassemble. But let us have whatever is the full statement of Government policy, agreed as far as possible with the Commonwealth, as soon as it can be made, so that, even if the House is not sitting we can have a chance to consider it during the Recess and debate it when we return.
3.50 p.m.
LORD MILVERTON: My Lords, in rising to intervene for a brief moment in this debate, I feel in many ways torn, as I imagine many of your Lordships feel, between two opinions. I have the greatest sympathy with a good deal of what was said by the noble Lord, Lord Ogmore, and, with great respect, I am not able to agree with the noble Earl, Lord Swinton, in saying that Part I of this Report, which I have in my hand, is an extraordinary document, in that it does undoubtedly suggest that the Corporation has not received the treatment it was entitled to receive and expect from the Government. But, if your Lordships consider it, the Corporation was set up in 1948 in a wave of enthusiasm; and all of us, on both sides of this House, or any other House, were filled with an enthusiasm which practical experience showed us to be based on a number of fallacious assumptions.
We asked the Commonwealth Development Corporation to run its business on strictly commercial principles, and we then proceeded to lay down certain rules, regulations and controls which would have made it totally impossible for any organisation to run its business on commercial principles. Slowly, over the years which have elapsed since, there have been various relaxations and amendments to the way in which the Corporation is
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asked to work; but still there remain these difficulties, and I would suggest that the statement in Part I is perfectly fair and reasonable. I am not going into it again because the noble Lord, Lord Ogmore, stated it quite clearly in his speech. I think that those difficulties ought to be faced, and the only way in which the Corporation could bring them to the notice of the public was in this way.
This Report is an account of the way they have conducted their business and the difficulties which they have encountered in discharging the public trust which was put upon them. If one of the difficulties in discharging the public trust put upon you is the regulations as interpreted by the Colonial Office and the Treasury, surely it is only reasonable to give them a statement in your Report and to say why it is difficult to run a business on commercial principles if those self-same principles are violated by the control to which you are subjected.
The public, however, expect to be told how the money entrusted to the Corporation is spent and why any failure which may have eventuated has taken place. I think that, in describing how, through important vicissitudes, the Corporation has finally steered its way to a credit balance and to a condition of its affairs in which it is attempting, almost successfully, to fulfil the conditions under which it was appointed, it is entitled to say what will be necessary in the future if it is to be enabled to complete that work. I personally feel rather strongly on this question of the emergent territories. I am not able to follow the noble Earl, Lord Swinton, in his regret that there should be any attempt to set up a two-tier organisation of the Commonwealth—there is nothing of the sort. If we face the facts, however, we all know that these emergent territories have politically outrun—and, indeed, are still doing so and likely to do so, inevitably, for reasons into which this is not the occasion to go—their economic possibilities and independence. They do and must require assistance, and the way I look at it, we have to say what is the most suitable instrument through which we can channel the assistance which we still have a moral duty to give them.
We have here in the Colonial Development Corporation (and one can cut out and alter the name and alter the Act) a

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body which has been built up, which has an efficient stall, and which has won through many difficulties in the formation of that staff. As I see it, to say, and to think it is an adequate answer to say, that the Corporation can, if it likes, undertake the job of an agency house in the emergent territories, and that it is not to commit any funds of the taxpayer in that process, does not, to my mind—it may be that it is due to my ignorance—make sense. But who is paying for this organisation which is built up and which is to be used as an agency house? Is not that agency house the product of the taxpayer of this country? Have we not built it up, and if it is there, if we desire to channel help to the emergent territories, it is obviously a matter of the utmost ease to see to it that the conditions under which it legally operates are altered so as to legalise this new development. It is less than ten years since the Act was passed, but I think I may safely say that none of us foresaw the amazing changes which have taken place in those brief years in the conditions with which a Colonial Development Corporation would have to deal. It seems to me merely a matter of sense that we should adjust the machine which we ourselves have built to deal with the circumstances of the changed cases of to-day.
I do not wish to go into or repeat what has already been said in this debate (so much of it has been said before, in the debate on Ghana and in other debates, that I do not wish to weary your Lordships with repetition), but I should like to ask the Government one or two questions. First, I should like to ask: are the Government satisfied that the Colonial Development Corporation is fulfilling efficiently the purposes for which it was set up? Do the Government regard the Colonial Development Corporation as an expanding organisation with an ampler future before it, or do the Government envisage its future as one of diminishing importance and scope? If the reply to the first alternative is "Yes", and to the second alternative "No", how do the Government reconcile this view with its prohibition of new activities in any of the territories which achieve independence?
My Lords, do let us try—I almost said to be sensible, but I do not wish to be offensive—to take an objective view of
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this matter. Within the next few years all the territories which can, economically, will be among what are called the emergent territories, and the Colonial Development Corporation will be left with a very minor scope before it. If that is what the Government envisage, then I think we are entitled to be told so; and certainly the Corporation is entitled to be told so. Personally, with my own experience of many of the territories concerned, and also for three years as a member of the Board of the Colonial Development Corporation in the difficult initial days, when we were all learning by experience, I feel that the Corporation is having rather less than what one would normally call a fair deal from the Government.
We are all agreed on this, there is no dissentient voice in our desire to help the territories which need help in their development, and it is surely just a question of adopting a sensible business-like view of what is the best way in which to employ such money as we can spare for that purpose, so that it may have the greatest possible effect. I suggest that all these other organisations—the Development Finance Company, the Export Credits Guarantee Department, the International Monetary Fund, and all the rest of them—have none of the general experience: they have not won the confidence, as can safely be said the Colonial Development Corporation has done, of these former colonial territories and territories which are still colonial territories. Surely it is a sensible thing to ask that that Corporation should be employed for that purpose. And if there are reasons—I am not denying that there may be reasons, of policy and otherwise—which would make it desirable to return a negative reply to that request, then let the Government say so quite clearly and openly. Do not let them stifle the activities of this Corporation and make it impossible for it to expand. Let us know-quite clearly what the Government think, (If the Corporation is functus officio then let it die with dignity and with the credit which it has now hardly won for itself.
My Lords, I do not think there is any more that I can reasonably say—these questions have been debated here so often. To go back to what I said at the start, I think that we should never lose sight of the fact that all of us were utterly mistaken, if we are to tell the truth, when

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the Overseas Resources Development Act was originally passed, in thinking that there was a wonderful field of activity in between private enterprise and purely Government work. If we are honest, we now know that no such field exists and that the Colonial Development Corporation must be allowed to operate, preferably in partnership with private enterprise firms, but at any rate in a field where there is possible competition from private enterprise, otherwise they cannot possibly shoulder the load of debt with which we have legally saddled them. I look forward to hearing the Government endeavouring to satisfy us that they really are taking an objective view of these activities.
4.5 p.m.
THE EARL OF PERTH: My Lords, the original terms of Lord Ogmore's Motion were restricted to the 1956 Report. No doubt we in your Lordships' House should have ranged considerably wider, but I am glad that the Motion he has introduced is in broader terms, because, amongst other things, it enables us legitimately to consider the pamphlet on Labour's Colonial Policy: Economic Aid in which the C.D.C., or, rather, a "blown-up" monster of a successor, is to play a leading part. The Motion falls conveniently into two parts—the C.D.C. and the Commonwealth, and the C.D.C. and the Colonies. I intend to concentrate on the colonial aspect, and in particular I will try and deal with those charges arising from the 1956 Report to which Lord Ogmore has drawn attention. I am grateful to the noble Lord for giving me notice before this debate of what he was going to ask; that will enable me to tackle the questions thoroughly, although I doubt whether I shall tackle them all entirely satisfactorily from everybody's point of view, because certain of them are, if I may so describe them, "hardy annuals."
Before I deal with the charges, I should like to answer the point raised by the noble Earl, Lord Swinton. The Secretary of State for the Colonies alone has the responsibility before Parliament for the activities, and so for the broad lines of policy, of the Colonial Development Corporation. I do not think there is any point in my going further into the controversy which various noble Lords have raised in one way or another, but
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I hope that that is a clear statement of the responsibility and where it lies.
I will now deal with the various points which the noble Lord, Lord Ogmore, raised. First of all, I should like to talk about alternative finance. The noble Lord said that the Corporation have been told that they may not operate if alternative finance is available. I have no knowledge of their ever having been so told. The Annual Report says:
" If this argument as to alternative finance were to apply generally in future, and if C.D.C. had to produce evidence that alternative finance were not available "—
then I admit that, as written, the Report might be held to imply that the Colonial Office had put forward one or other of these premises. But we have not done so.
LORD OGMORE: Would the noble Earl read the first sub-paragraph? He has read the second sub-paragraph of paragraph 13 but not the first, and without the first it is very difficult to follow. If the noble Earl reads sub-paragraph (1) he will see the point.
THE EARL OF PERTH: That reads:
" This project led to another difference with Colonial Office which finally advanced the further argument that C.D.C. participation should be disallowed on ground that alternative finance was available."
I understand that, and I am going to refer to it in a moment. But I still repeat what I said, that there has been no ruling that if there is alternative finance the Corporation may not undertake a project.
I suspect that perhaps one of the purposes behind the various extracts which we have just been quoting was the hope that, if I may put it this way, the Colonial Office might be "smoked out" as to exactly in what way and where the C.D.C. may operate, so that it would be able to go ahead, not worrying about Colonial Office approval. Unhappily, things are not as simple as that. Some of the propositions are clearly in the "white" category, some of them are in the "black" category: and some of them fall in between, into a sort of "grey" category. For example, if the Corporation asked for approval of a straight loan to a borrower who could raise it without difficulty in the ordinary markets, I should think it was extremely likely that the Colonial Office would not give sanction to it. If on the other hand, the Corporation was working on a

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project and found that the partner with which it was working was ready to do the necessary job only if the Corporation came into it, although in fact the partner could find money outside, then I think it is quite likely that the Colonial Office would approve. But what we do not want is for the Corporation to use its money on projects when alternative finance is easily available. We feel that this would be a dissipation of the Corporation's funds, which are necessarily limited and therefore must be carefully husbanded. We shall have to continue to treat each individual application or its merits and in the light of the prevailing circumstances. Alternative finance will remain one among many factors that come into the judgment; and, in relation to the particular point the noble Lord, Lord Ogmore, raised, which I read out, that was one of the factors that came into the judgment and not the only one.
LORD OGMORE: My Lords, all I can say on this point is that the Corporation, as I understand it, is definitely of the opinion that this is the general rule, not completely restricted to that one case.
THE EARL OF PERTH: I hope that after they have read what I have said this afternoon, that opinion will no longer exist. At times it has been suggested that if alternative finance was a criterion the Corporation would be deprived of profit-making opportunities. I would only say that I can think of another body which is well known to many of your Lordships, namely, the Finance Corporation for Industry, which has an absolute rule that it will not operate unless it has been proved that alternative finance is not available; and yet that Corporation has done great things for development in this country and has at the same time made good profits.
The next point on which I touch is that of high interest rates. In the Report it is said that, while it is recognised that high interest rates may be required to control home economy, they slow down colonial development which is necessary or desirable. That is quite true. They also slow down home developments which are necessary or desirable. That is their purpose. It may be very unfortunate, but that is how we are to-day. Many of your Lordships will think of all sorts
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of projects in this country which you would like to see go on—the building of roads, new factories, what you will. We have to slow them down. And that is the same thing which unfortunately has to be applied to some colonial development. The Government set up the Colonial Development Corporation on commercial lines. To allow them to have interest rates deliberately lower than those prevailing would, as the noble Earl, Lord Swinton, said, be a form of subsidy and strike at the whole concept of the Corporation.
I have been looking through the Report and I cannot find where it is said, as the noble Lord, Lord Ogmore, made the charge, that the interest rates are unfair and deliberately higher than they should be. All I can say about it is this: in our opinion the rates charged to the Colonial Development Corporation are very reasonable. May I give your Lordships an example? If you look at the rates that were charged earlier in this year, you will see that the highest rate for long-term money was 5 per cent. Just recently—I think in the last week or so—that has been changed, or it is going to be changed. But during the same time a Colonial Government went to the London market and raised a loan at 5¾ per cent. I cannot see that on that basis it can be said the Corporation is being deliberately charged a higher rate than is warranted.
Again, the Report mentions the fact that the Corporation will have to pay £957,000 of additional interest. My Lords, that does look a formidable figure; but when one realises that it is, in fact, spread over forty years, the figure becomes less formidable—somewhere around £20,000 to £25,000 a year. Of course, as the Report indicates, this is unwelcome—any additional charge is unwelcome. But the fact is that unless the charge was made we should have been breaking the law, breaking what was laid down by Statute, and, of course, nobody would want to do that.
Now I come to the question of special losses. This, my Lords, is a long story. It has a long history. I do not think I will weary your Lordships by going into too much detail about it. It is a question which is frequently under review and is, indeed, under review at the present time. If there are to be write-offs, if that is to

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be the policy, then I believe it is most important that the record of those write-offs should remain clearly expressed for ever; for example, in a footnote to the balance sheet. Otherwise, it seems to me that there is the danger that when new régimes come in they may want to write off ventures of their predecessors if they have gone sour; and it would be extremely difficult for anybody to judge whether the Corporation was, or was not, fulfilling its task of balancing out, taking one year with another. Several noble Lords have said they think it is a shame that some of these special losses are not written off when the projects have been abandoned or irretrievably lost—I think that was the phrase used by the noble Lord, Lord Milverton. I can only repeat that Her Majesty's Government have been ready to agree to write off projects which had been abandoned and irretrievably lost.
THE EARL OF SWINTON: That was my proposal.
THE EARL OF PERTH: Yes. But the Colonial Development Corporation, for their part, have refused to work on that basis. They said they would not accept only a partial write-off of that type. They also wanted other projects which are still continuing to be written down to what they judged were realistic figures because they thought the capital was lost. It is here, if I may so put it, that the argument still rests.
Then the noble Lord, Lord Ogmore, raised the question of the changing of the name of the Corporation. So far as I can see, the only justification for a change of name would be if the Corporation were, in fact, to operate in a wider field than that in which it is allowed to operate at the present time. Nothing, of course, is unchangeable, but I think I am correct when I say that I do not believe the noble Lord who is now chairman of the Corporation is pressing for such a change. He could always, if he found some objection, operate in any territory through a subsidiary. Your Lordships must remember that the Colonial Development Corporation by to-day has built up a great fund of goodwill, and we all know the value of goodwill in a name. I think myself one would have to consider very carefully before deciding it would be right to change the name, unless and until there was a complete change in the type of operation.
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I noticed the other day in The Times an article about North Borneo. There it was said how the inhabitants in that country were anxious that the United Kingdom should clearly state that she is going to stay as a colonial Power in those territories, in order that they might have a firm foundation on which to build their economic and political future. My Lords, stranger things have happened than that a name which, for a time, was looked on with disfavour becomes one which is treasured. I think that that may well come about with the word "colonial".
Another question which has been raised is that of the borrowing limit, or further capital for the Colonial Development Corporation. I do not wish to get into an argument with the noble Lord, Lord Ogmore, or with the Corporation for that matter, about just what is, or what is not, the state of their finances at the present time. The noble Lord referred to the answer given in another place yesterday by my right honourable friend the Secretary of State for the Colonies when he said that £86 million of the funds were committed. I can only say that technically that is approximately the right figure. It may be that in the future the Corporation will have need for further funds for projects which are already going on, but in the true sense of the word "committed", as we use it between the Corporation and ourselves, the figure is £86 million. And it is not true to say that the Corporation cannot undertake new projects at the present time. Only in the last month or two a number of new projects have been put forward which we have approved.
On the question of borrowing limit, we recognise that the present limit is very nearly reached. As announced yesterday in another place, conversations are going on at this moment between the Corporation, the Treasury and ourselves regarding an increase. I hope it will be possible to announce something before the end of the month. I would only, perhaps, utter this word of warning: that, with the best will in the world, in the light of the many claims on our resources at the present time, we cannot expect a figure that will satisfy everybody and every demand. Let us not forget, however, that whatever the figure may be, this is not necessarily all that goes into these projects which are sponsored by the Corporation. There is co-operation with

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other interests, and that means very often that more money goes into schemes in which the Corporation is interested. In that connection, the Corporation has recently been talking with several foreign groups on the question of working together on a project, and I should like to take this opportunity of saying that that is a most welcome development. If I may so put it, the more the merrier.
The noble Lord, Lord Ogmore, raised the question of Southern Rhodesia and "need". It is suggested that a new difficulty had apparently arisen because of that word "need." Perhaps I ought to make it clear that Southern Rhodesia, as such, is not a territory under the Act in which the Colonial Development Corporation can ordinarily operate. Being, however, next door, as it were, to Northern Rhodesia and Nyasaland, it has been recognised that a situation could arise when an operation in Southern Rhodesia was necessary in connection with a particular development in the two Northern territories. Such cases, I believe, would be very rare. One which occurs to me is the classical example of the Kariba Scheme. Proof would need to be pretty convincing. The suggested words "advantageous" or "convenient" do not seem to us to be sufficiently convincing, so we were not able to accept the Amendment proposed by the Corporation.
I would ask your Lordships to remember that it is the Secretary of State who decides and who is charged by Parliament with the use of funds for colonial purposes. This is his responsibility and he certainly would not wish to seek a way round it. Whether a case will, in fact, qualify or not can be decided only in the light of the circumstances. We are most anxious to avoid disappointing or making unnecessary work for the Corporation, and they and we agree that the best way to avoid this is early consultation between the Corporation and the Colonial Office—and that is what we intend to have.
The last charge which Lord Ogmore made was in relation to the newly independent territories—the "emergent territories", I think is the phrase, though I am not very happy about it. Your Lordships will know of the Government's policy as announced in an answer in another place a few days ago. To some
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of your Lordships it would perhaps be useful if I quoted part of it. The question was in relation to what might be the Corporation's activities in Malaya and other colonial territories which become independent. The answer was given that the Corporation will
" be permitted to continue with schemes existing at the date of independence, and if necessary to provide further capital for these schemes after that date. It will also be enabled, on the request of the Government of any independent member of the Commonwealth, to undertake the management of any project on a managing agency basis without commitment of the Corporation funds."
I think that that was the suggestion made by the noble Earl, Lord Swinton. Of course it is entirely right and proper. The Corporation having built up their staff, no one wants to see it wasted.
I hope that your Lordships will, in general, be satisfied with this policy, for it has taken into account a point which was raised and pressed by many of your Lordships during the debate on the Ghana Independence Bill. Curiously enough, I think we may have very shortly an example of the use by a newly independent country of the expert staff of the Corporation, because the regional controller of the Corporation in Malaya has been invited to be the first chairman of the Federal Land Development Authority in Malaya. He has played a leading part in getting the Industrial Development Corporation started there. I hope that the Corporation will allow him to continue these activities when Malaya has achieved independence. That seems to me a very good example of how this idea may operate.
LORD OGMORE: And also, if I may say so, a very good example of how Malaya, an emergent territory, regards the Corporation.
THE EARL OF PERTH: I thank the noble Lord. I quite agree. When British or, indeed, other overseas interests are thinking of going into the Colonies or into one or two independent territories where the Corporation is operating, they might be very wise to consult and make use of the Corporation's staff. I hope that many Corporations and many bodies overseas will bear that in mind, because there is no doubt that the Corporation has built up a considerable experience in certain territories. Apart from the question of the use of the staff, it will be seen

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from the Parliamentary reply to which I have referred that the Corporation can keep its existing interests, in Malaya, for example, and, in certain circumstances, invest further funds in these.
On the broad question of policy, and the reasons that have led the Government to the decision not to have the Corporation operating in independent territories, which the noble Lords, Lord Milverton and Lord Ogmore, raised, I do not propose to go into details, because that I think will be more conveniently dealt with by the noble Earl, Lord Home, who is going to deal with matters in relation to the Commonwealth as a whole.
I should now like to touch on one or two points in the Colonial Development Corporation's Report which are not connected with the charges that have been made. It will be seen that the Corporation in this year has a net increase of three in the number of projects which it is handling. That may not sound a very formidable figure, but, in fact, eight new projects have been started and no fewer than 52 have been examined. I think one ought from these figures to bear in mind how much work goes into the job of choosing and picking schemes. Then, what does not appear in the Report, the Corporation have done work of great value on one or two projects in which, in the end, for one reason or another, it has not played a part. I have particularly in mind the industrial concern known as "Riscom" the Rhodesian Iron and Steel Corporation, which the C.D.C. took a leading part in getting started. We all know what a great prospect is before it.
Reference has already been made to the fact that profits from direct projects and subsidiary companies have gone up from £113,000 to £371,000. As the noble Lord, Lord Ogmore, said, that is a most satisfactory figure. In a sense one might say that that is what one might expect when schemes come to fruition, but so often what one expects does not happen. In this case it has happened and it is most satisfactory to see.
I should like to refer to the footnote to the balance sheet No. 7, which shows that during the year certain interest charges which the Corporation in the
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end will be called upon to pay now total £6·8 million, compared with about £4·3 million last year, an increase of £2·5 million. The reason for that is that under the terms under which the Corporation borrow it has, as it were, a "holiday" from any payment of interest for the first seven years. Then the amount which should have been paid during that time begins to be paid off. I think it is important that that figure should be borne in mind when we are considering what are the profits in any one year. It is quite natural for this form of "holiday" to be given in relation to the various projects undertaken where the investment is an equity proposition. Personally, I am not sure whether it is wise, when the Corporation has made a straight loan; but never mind, the fact is that that is how it works at the present time. The question of the presentation of the accounts is something we have it very much in mind to go into the near future, because I think that, as things now stand, it is difficult for people to interpret what the Corporation is truly doing at any one time. That is not meant to be a reflection on the Corporation.
There is one other thing I should like to say in relation to the Report. When one looks through it at random, and reads about the various projects which are going on, it is very satisfactory to see, for example, that it is said about the British Honduras Fruit Corporation that:
" Cocoa grows well and further expansion is under consideration "
and, again, about Nyasaland, that
" experiments with coffee justify expansion".
And again, in North Borneo, where the Corporation pioneered and deal in quite a large way in hemp, rubber and cocoa, we see the first profit since the project was started in 1948. It is good to see an egg of this sort hatch and produce good results. Overall, I think that what we find in this part of the Report is extremely satisfactory, and the Corporation should be congratulated.
I should like to turn for a moment to the pamphlet Labour's Colonial Policy: Economic Aid, which was mentioned by the noble Lord, Lord Ogmore. I have read this pamphlet with a great deal of care, in order that I could see what sort of things the Labour Party have in mind for the Corporation if and when they

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come into power. Frankly, I do not get much comfort from reading this pamphlet. I hope your Lordships will allow me to quote one or two points and to make my comments. On Page 28 it says:
" Indeed, the Corporation should play a much greater part than it has done in the past in planning the balanced development or the Colonies."
I can only say that that appears to me to be something contrary to the whole policy which we have followed to date—namely, to encourage the Colonies it, every way to govern themselves and to plan their economic development for themselves. I wonder what the Colonies themselves would say if the Corporation interfered and planned a greater part of their balanced development. It should be remembered that, of the gross capital formation in 1956 in the Colonies of £450 million, less than £90 million came from overseas; and of this only a very small part came from the Corporation.
Then on Page 26 we find this statement about the Corporation:
" It cannot therefore play its proper part in the execution of development policy, nor inspire the tone of management. It cannot, for instance, insist on proper trade union conditions and negotiating machinery."
Again, on the same page it says:
" It is obviously desirable that where public money (through the Corporation) is invested in any project, its control should remain in public hands."
In those circumstances it seems to me that there would be very little chance in some cases of getting overseas money and foreign money to co-operate; and we all know how important that is at the present time.
The remark about insisting on proper trade union conditions is a rather curious one, when it is remembered that it is for a country itself to lay down the laws on trade union practice, and any company which did not comply would be breaking those laws. As to the remark that the Corporation cannot play its proper part without a controlling interest, frankly, I think that is nonsense. If there were something that the Corporation did not approve on high moral or other grounds, it certainly could bring great pressure to bear or go to the Government concerned and say that it would not do.
The pamphlet continues, on the same page, to suggest that the Corporation
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" gradually hands over to local interests. This is a sensible development which frees the Corporation for work elsewhere."
I am wondering how the Corporation is "gradually to hand over." By a gift? Or is it for the Colonies themselves to find the money to take over the projects? I thought that the Colonies were short of money and that the purpose of the Corporation was to bring in money from outside. Perhaps the Colonies should raise the money themselves from private enterprise outside. It is all very strange. On page 27, the pamphlet says that Labour will ensure that
" essential colonial devlopment schemes are not held up as a result of high rates of interest."
A little earlier in the same paragraph there is mention of a 2 per cent. rate. If the Corporation is charged this rate, it can only mean a change from its original purpose: it would then no longer be a commercial concern. Or perhaps the idea is that others might be charged 8 per cent., or some such rate, to get the right balance of 5 per cent.
I am not going to elaborate further on that part of the pamphlet. Clearly, the whole concept of the Corporation as outlined in the pamphlet is that it should function in an entirely new way. Although on page 24 the pamphlet says:
" The purpose of the Corporation is to finance projects which will pay their way commercially: it is an investing not a grant-making organisation",
later on there is the suggestion that it must be allowed to incur losses which Parliament should be prepared to meet, or alternatively, that it must be given a grant towards the cost of its non-commercial, social and welfare activities. Frankly, my Lords, I do not envy the task of anybody who had to try to run a Corporation with so many conflicting and, as I see it, impracticable lines laid down on what it should do.
For a moment, because I think it is important, I should like to turn to the pamphlet generally. In the earlier part of the pamphlet there is mention of many international bodies, and tribute is paid to the work done by them. There is one body rejoicing in the name of S.U.N.F.E.D., the Special United Nations Fund for Economic Development. Again, tribute is paid to all sorts of other international bodies, and the work that they might do, perhaps with money coming

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from this country, for Colonial development. Yet when I look through this pamphlet, I find no recognition of, or credit given to, the work done by this country through the Colonial Office or the Colonial Service—now the Oversea Service; no recognition or credit to the countless voluntary bodies and associations who have done so much for the Colonies in helping them to stand where they do to-day. I think that to play all the cards on some rather curious international bodies, and to give no credit or recognition to the great work done by the Colonial Service, is most odd.
I have one last comment to make on the pamphlet. Reference is made to bulk purchase agreements and how these are to be one of the panaceas for all troubles and ills. I would only observe that when the long-term contracts which are referred to came to an end, they did so in many cases, at the instigation of the producers; it was they who wanted to end them. The pamphlet does one thing which I do not think does it great credit. It quotes from the Economic Survey for Europe for 1948—and I should like to quote what it says:
" The explanation of the relatively low prices paid by the United Kingdom for its imports of food and raw materials appears to lie largely in the extensive use which has been made of long-term contracts and bulk purchasing agreements covering a large proportion of its purchases."
If I read that correctly, the only possible interpretation of it is that there has been exploitation by the United Kingdom of the Colonies in ways of that sort.
I have gone into considerable detail on the charges raised in relation to the Report, and also on the pamphlet of the Labour Party because I felt it was most important to see what they had in mind for the future of the C.D.C. I hope I have quoted enough to show that what they suggest would result in an impracticable, hybrid type of monster whose activities some of the Commonwealth and Colonial countries might themselves resent. The Motion is that the Corporation is not permitted "to make full use of its opportunities." I am not quite clear what the words "full use" in that context mean. If I had more leisure and more money, I know that I should have many more opportunities of spending, and perhaps more opportunities for greater fun. But I think one has to be "down to the
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ground" on these things: we have to remember that at the present time there is not unlimited money; we have to face realities, and not follow a dream such as that set out in the Labour Party pamphlet, which, presumably, represents their policy.
LORD OGMORE: Would the noble Earl prefer the policy of take-over bids that has been illustrated by reports in the Daily Telegraph?
THE EARL OF PERTH: I should not prefer a policy of take-over bids; I should prefer the policy that is being followed by the Government at the present time. The funds of the Colonial Development Corporation are necessarily limited, and there is plenty of scope for the Corporation to continue to operate in the Colonial territories. For example, it is doing nothing in Malta or Cyprus; nothing in Sierre Leone or Gambia; nothing in Fiji or the Solomons. That is not meant as a criticism of the Corporation, but is intended merely to show how-much work remains to be done; and I know that the Corporation, when it faces a challenge like that, will rise to the occasion. The important thing is for the Corporation to co-operate with private enterprise; to co-operate with it locally, and co-operate with overseas money, and particularly, foreign money. On the past record, that has worked out pretty well, and is a cause for great satisfaction. We are anxious that the expert staff should not be wasted, and that jobs already started should not be neglected. It is for that reason that we have made the arrangements, or are to make the arrangements, to enable the Corporation to continue to operate in the territories which are, or shortly will be, independent. Soon we shall be announcing the increase in the capital.
The noble Lord, Lord Ogmore, said that he thought we were trying to stifle the Corporation for doctrinaire or personal reasons. I hope I have said enough to show that we certainly have not in mind doctrinaire reasons. When it comes to the question of personal reasons, I do not feel that that is a charge which the noble Lord would wish to pursue; and, really, if one thinks of it, the suggestion that anybody for personal reasons would try to stifle the Corporation is hardly worthy of a reply. There is plenty for the Corporation to do in the Colonies,

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and I know that the C.D.C. will bend all its efforts to do what it was originally intended to do. It remains only for me to wish the Corporation good luck and continued success in what is often a difficult task.
4.49 p.m.
LORD BARNBY: My Lords, the noble Earl who has just sat down is to be congratulated on having carried out a most admirable task. He had a difficult explanation to give, and he has, with patience and clarity, covered a great deal of the ground. The points he made which want further interpretation will be so treated by the noble Lord, Lord Grantchester, who is to speak after me. We are indebted to the noble Lord, Lord Ogmore, for putting down this Motion, which is drawn sufficiently widely to bring in not only the Colonial Development Corporation Report but also the wider question of finance for Commonwealth development. It is on that particular phase that I shall ask for your Lordships' indulgence while I make a few remarks.
Before I come to that point, I should like to make a few observations on the Report of the Commonwealth Development Corporation. We have had the advantage of some informed opinion from the noble Lord, Lord Milverton, who was formerly a member of the Corporation. I, as a layman, reading this Report, am naturally inclined to be in accord with the noble Lord's view that Lord Reith is entitled to credit for having pulled round this organisation from a very sticky start. It has now reached a position where he has every ground to feel gratified with its achievements. For myself, I cannot help but be puzzled with regard to the criticism of it. It has on its Board men who stand high in the esteem of the City, Sir Hugh Beaver and Mr. Tyser, all well-known men essentially associated with private enterprise. Therefore I must ask your Lordships' forgiveness if I admit to being somewhat perplexed as to the conflicting remarks that are made.
The points with which I particularly wish to deal are really an echo of the concluding remarks of the noble Earl, Lord Swinton. He emphasised the hop: that we should have a full and early statement on what are the Government's intentions with regard to trying to
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improve the availability of resources for Commonwealth development, Suggestions are continually being put forward for new financial machinery for lending money to the Commonwealth, and the usual reply is that what is needed is not more machinery, but more money—and the shuttlecock of debate continues. This is a subject which, curiously enough, was brought up prominently in a debate in your Lordships' House on the Ghana Bill. At that time, the noble Earl the Leader of the House, as Secretary of State for Commonwealth Relations, made some remarks. The Press interpretation of what he said with regard to a possibility of new methods was that there might be a combination of new methods and of the instruments and machinery at present used. That, I think, was the sense of his remarks. That is really where we stand now, those of us who are most concerned with regard to finance for Commonwealth development as a whole.
Here may I interpose that there are many who believe that the subject of Commonwealth development is not sufficiently in our national picture. Commonwealth development, of course, means both people and resources—that is, migration, and the availability of resources and of capital investment to absorb them. I am among those who are honestly puzzled. A great deal of emphasis is put by Ministers on the importance of our development in Europe. This seems to be done at the expense of emphasising that if we do not somehow succeed in channelling resources so that they are available as complementary to migration, we are not going to make the Commonwealth the expanding force in which we all believe.
Now as to how this is to be done. In the early part of the year a statement was made that this problem ought to be left until after the Commonwealth Prime Ministers' Conference. Like others in the House, I hoped that either to-day or, as the noble Earl, Lord Swinton, said, before the House rises for the Summer Recess, some statement would be made. Perhaps the noble Earl is in a position to say something to-day. We shall look forward to that with the greatest interest. There should be some authoritative guidance as to the machinery whereby available funds could be channelled into investment in the Commonwealth. I must admit that I am one of many who attach

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more importance to the availability of finance for developing, shall we say, Australia and New Zealand, than for the emerging territories, important as they are. I believe that the strength of the Commonwealth depends on the continual, steady expansion of population and resources of the Dominions, particularly Australia and New Zealand. I emphasise that because, of course, so far as Canada is concerned there is a stupendous inflow of investment capital. Anyone who cares to look the matter up will see that it is a sum which I would hesitate to mention here because it is so tremendous. Therefore, that is rather outside the immediate matter we are discussing. But Australia and New Zealand, and Rhodesia as well, are quite different.
There are many who hoped that it might be possible for the Government, in its wisdom, to find in the extension of the powers of the Colonial Development Corporation a vehicle through which the channelling of these funds might appropriately be made. Much reference has been made to the Commonwealth Development Finance Company Limited, of which Lord Godber is the Chairman. But they have no organisation personnel comparable with the personnel in Lord Reith's organisation. How they could be built up rapidly to do what is necessary is difficult to understand. On the question of the availability of resources, the noble Earl, Lord Swinton, said that you cannot lend money from a deficit. We seem to find money for tremendous development at home. I cannot refrain from quoting what I saw in the Press yesterday. We have spent £350 million on the re-equipment of the coal industry in the last seven years; we have raised wages 30 per cent., and we have had no increased output of coal. There are many industries who desire complete re-equipment, but who are hesitant now as regards re-equipment at home because they feel it would be better to wait until something more evolves in regard to the European Common Market. I will admit that that would make more available for investment overseas in the sterling area.
This question of the availability of finance governs the whole matter, and I suppose that that is more important than the machinery through which it should be done; but we must hope that the
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noble Earl the Leader of the House will be in a position to tell us something regarding it, for it implicates the whole question of the expansion, the power and the strength of the Commonwealth. At any rate, if the noble Earl cannot tell us to-day, perhaps he will give us an assurance that before long something will be made public.
I refer now to the Commonwealth Economic Committee, which, we are told, will report shortly (there was a reply yesterday in another place) on the development of raw materials in the Commonwealth. There are some who seem to think that in some way this Commonwealth Economic Committee can be an ancillary in this question of financing, but I must confess that it seems to me difficult to conceive how that can be really effective. That is the note on which I would close. If we are going to have this report, which will give us greater information than we have now concerning the undeveloped resources of the Commonwealth, we shall get a clearer picture, which is what we want. The noble Viscount, Lord Bruce of Melbourne, suggested that there could be in this case a lack of available capital for investment, and that more should be done in collaboration by, let us say, Australia and Great Britain, working with the International Bank. I am one of those who believe that American participation in a substantial degree in the development of our Commonwealth, provided that there is a steady flow of people from Britain to the Commonwealth, need give no cause for concern.
5.3 p.m.
LORD GRANTCHESTER: My Lords, the noble Earls, Lord Swinton and Lord Perth, dealt adequately with the complaints of the Corporation so I do not propose to say anything more about those complaints. The noble Earl, Lord Perth, also admirably enunciated the principles by which the Corporation should be guided. In these days there is a lot of sentimentalism when discussing aid to under-developed territories. There is also, I think, a lot of loose talk and the noble Lord who moved this Resolution was not free from loose talk: in one breath he referred to this Corporation being based on commercial principles, and in the next complained about the

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application of ordinary commercial principles, such as paying a market rate of interest.
Hostile propaganda about the past has fostered an idea that the richer countries—and this country in particular—owe something to these under-developed territories. In the business sense, at any rate, I do not think this is true. We certainly have put into these territories, over a period of years, more than we have had out. To-day, if anyone has a legitimate complaint, it is not the under-developed territories, but this country. We may as well be frank. I will not quote from a report from a country which might be considered prejudiced because they have colonial territories but, if noble Lords will allow me, I will quote from a Swiss study published recently in the Swiss Review of World Affairs. This study says:
" The extension of aid to several underdeveloped countries is hampered by the memory of large losses suffered in the past, partly as a result of poor debtor morality, and partly as a result of nationalist and ' dirigist ' and other measures inimical to private property, lot to mention political instability and inflationist policies."
The study continues:
" It is up to the under-developed countries to improve the conditions for foreign loans and investments. The great damage done to all countries in need of capital by the recent unfortunate example of Egypt has not been sufficiently realised everywhere, unfortunately."
The report concludes:
" No mutually satisfactory economic relations can be developed on a foundation which confuses the criteria for sound investment."
I notice that prominence is given in the preface to the Report which we are considering to this statement:
" C.D.C. is a commercial organisation and is required to pay its way."
That was emphasised by the noble Lord, Lord Ogmore, although he jibbed at the consequences of that statement. Last year I congratulated the Directors and management on last year's result. The Directors, in their last year's Report, stated that
" having struggled out of the red, C.D.C, must go on raising its net revenue each year to stay there."
Last year the return on the capital employed was approximately 2 per cent., including interest paid to the Colonial Office, and about 1 per cent. after paying interest.
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The noble Earl, Lord Perth, has drawn attention to the fact that the interest is chargeable only after a period, and therefore it is difficult to see whether, in a particular year's Report, the interest is the correct amount applicable to the year. I rather suspect that in this year it is not. But the result this year is much the same as list year, on a rather larger capital; that is to say, the Corporation has earned something like 2 per cent. on the capital entrusted to it. In such circumstances, can we agree with the sentiment underlying this Resolution that there should be or that it is desirable that there should be, a wide extension in the operations of the C.D.C.? If it is not desirable to have a wide extension on the basis of these results, then it does not matter very much if the Corporation can only complete existing projects in territories which become independent and can only start new projects in colonial territories, even if these gradually diminish as more and more of them achieve independence. I have no wish to disparage the work of the organisation, or the ability of the body that the Corporation has built up. The management is releasing itself from the unfortunate mentality with which the Corporation started its career.
The noble Lord, Lord Ogmore, referred to the ideas set out in the Labour Party's pamphlet on Colonial policy. But there has been a later pamphlet published by the Labour Party. Having studied the criteria for investment suggested by the Labour Party in their proposals for national superannuation, I cannot understand Lord Ogmore's suggesting that any more money at all should be put into this Corporation. That study, published by the Labour Party recently, makes it clear that no pension fund money would be invested on the present terms in this Corporation. If it is not suitable for a pension fund investment, I do not think it is suitable for a taxpayers' investment. But I do not think that the present Government would desire to make government impossible—as I think would happen if the principles of the latest pamphlet of the Labour Party were followed—or to hamper development by destroying confidence in Government securities or prior stocks.
I should like to see Her Majesty's Government try an experiment with this Corporation. For once, I should like

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to see them refrain from taking money from the taxpayers and "dishing it out" to this Corporation until at least the Corporation can show that it can earn more with the capital entrusted to it. Let them agree to leave in the money that the Corporation already has, and authorise the Corporation to invite members of the public (if I may put it in colloquial terms) to take up the privilege of putting a pound on the development of the Empire, if you like in some form of participating shares. I should like to see a share such as that sold through the Post Office and through the banks with a sixpenny stamp. I do not see why the Corporation should not raise another £50 million in this way, for a start; and the Corporation could then answer to a number of small investors and prove to them—which might be more difficult than to the Colonial Office—the case which it is putting to your Lordships to-day. The Corporation will have to prove that the work which it is doing and the results achieved serve both the interests of the people of the underdeveloped territories and the investors of this country who find the money and that it is to their mutual advantage. I should like the Corporation to have the opportunity of so doing.
5.15 p.m.
LORD LLOYD: My Lords, the speech of the noble Lord, Lord Ogmore, will not come as much of a surprise to any of us who have regularly taken part in these debates. I could not find anything in the speech of the noble Lord which was new or which he had not said before. I mean that in no disparagement of the noble Lord; it shows that he is both consistent and persistent; and if he has not by this time managed to convince your Lordships of the soundness of his argument, then I can only think that there is either something wrong with your Lordships or something wrong with the argument. This time his speech was, in fact, little more than an elaboration of paragraphs 9 to 15 of the Report of the noble Lord, Lord Reith and his colleagues to my right honourable friend the Secretary of State.
I think the Report is very much the same in its style of presentation as it was last year, but it has two notable differences both of which have been commented upon by your Lordships to-day. The first
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—and this is a most satisfactory difference—is that there is a considerable reduction in the loss on the profit and loss account. The other is that there is a considerable increase in the paragraphs this year devoted to criticism of the policy of Her Majesty's Government, to which my noble friend, Lord Swinton, has already drawn attention. I do not know that there is any connection between these two facts, but I will again say that I think it is most satisfactory, and calls for congratulations to the noble Lord, that this result should have been achieved. I feel quite sure, when one looks at the general melancholy state of public corporations in this country as a whole, that if the noble Lord were able to eliminate entirely the loss on the profit and loss account, the Government would be only too delighted to see a Report entirely, instead of only half, as at present, devoted to criticisms of themselves.
My Lords, the noble Lord, Lord Ogmore, has acted this afternoon as the advocate of the Corporation. I thought that he put the case very well indeed. I do not think he could have done it better if the noble Lord, Lord Reith, had given him a brief. He mentioned six points of indictment in the charge. I think they may be condensed under two main heads. First, there is the scope of the Corporation and its activities, and secondly there is the financial structure of the Corporation.
Before dealing with these propositions, I think that perhaps we all ought to refresh our minds once again about the purposes for which the Party of the noble Lord opposite set up this Corporation in 1948. Noble Lords opposite have a theory that private enterprise has failed dismally in colonial development. They say—one can find it in all their speeches; one can find it again in this notable work which I have just been reading here, their new Colonial Policy pamphlet—that private enterprise has done nothing except exploit opportunities and take "fat" dividends; that it is interested only in quick returns, and has left much desirable, if less profitable, development undone.
I do not feel that that is quite a fair view. I think that noble Lords opposite underestimate the work that has been done in the past by private enterprise. I do not think it has all been a matter of quick profit or easy return. On the other

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hand, if I may point it out to noble Lords opposite, some of the schemes which they thought would be profitable have, in point of fact, been unmitigated disasters. I do not wish to rub any salt into the wounds of the past, and I hardly dare mention the word "ground-nuts", or the £8 million loss which we see on the balance sheet of the Corporation. But it is not as easy as all that, and the quick returns and the easy profits are, I think, not quite so easily obtained as those who have never had anything to do with colonial development seem to think.
There is, however, one proposition on which we can all agree—namely, that there can be no advantage, cither to the people in the colonial territories, or to the British taxpayer, or to anybody, in schemes which ultimately are not going to pay their way. It is no use creating edifices which can be kept going only by subsidy. I notice in the Labour Party pamphlet a great deal about all the social services that are to be built up. I am all for them, in so far as the resources and financial structure of these territories will ultimately support them, but it is no good, and is doing no favour to the people in the colonial territories, to erect vast edifices which cannot be supported by the resources of the country.
Therefore we come to the original proposition, with which I have a certain amount of agreement—the theory of the "twilight zone"; that is to say, that there are some projects in the colonial territories which are obviously not attractive to private enterprise—perhaps, as Lord Swinton mentioned this afternoon, because they are small businesses which find it difficult to raise capital, or because the projects may be long-term and the return offered may not be attractive. As I have always understood it, from the speeches of noble Lords opposite and from the speeches of the Minister during the debates on the Overseas Resources Development Bill, it was primarily to cover those, as an adjunct to but not a supplanter of private enterprise, that the Corporation was set up. It enjoys favourable conditions; it is financed at Treasury rates to undertake projects which could not possibly raise the required capital at Treasury rates. It exists, as I see it, to help territories which could not otherwise find the necessary
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finance or pay the rate of interest which the sort of project they have would normally command. That, my Lords, as I see it, was the raison d'être of this Corporation, and it is against that background that I should like, very briefly, to examine the noble Lord's propositions.
His first proposition, as I see it, involves not merely a vast extension but a radical alteration in the whole of the conception of the Corporation's purposes. In addition to providing cheap finance for dependent territories in the future, if I understand the noble Lord rightly, it would provide cheap finance for independent territories, Ghana and Malaya. Whatever the merits of the proposition, I do not believe it can possibly be confined to Ghana and Malaya. What logic or sense is there in that? If it is to assist independent territories in need of economic development, why not India and Ceylon? India's need for capital is just as great as that of Ghana; in fact, I think that possibly the resources per head of population are rather less. Therefore, in effect it would mean a vastly increased capital requirement, because even now, operating in the dependent territories, the Corporation is fully stretched; and if it is to be allowed, as I think it logically must, to invest in India and other places, it will need enormously more capital.
May I say a word here about this question of capital for investment overseas? Our own investment programme is fully strained, and our capital resources are strained to their limit merely to carry out our own programme here. There is no means that I know of of getting more capital for colonial development unless we delay our own capital programme here, with the risk of delaying, and possibly even jeopardising, our own recovery. The noble Lords opposite, in this pamphlet, talk in terms of giving £160 million a year to an organisation called S.U.N.F.E.D. However admirable that may be, we need to reflect a little on how £160 million a year more is to be produced at the present time in this country. I notice, incidentally, that noble Lords do not appear to have great confidence in the willingness of the people of this country to contribute this vast sum. It is going to be taken in taxation; they are not going to be asked to subscribe it.

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I myself still believe that the people of this country are fundamentally glad and anxious to take part in Colonial development, provided that the projects are sound and they can see that good will be done. I do not think they want any more ground-nuts schemes. I am not at all sure they would be prepared to advance money on the same basis to people who are independent, because I think they believe that independence means what it says. If a country is independent it stands on its own feet, both politically and economically, I do not think they would feel that people who become independent can have all the political advantages of independence and the economic advantages of dependence. Therefore I think that they will expect these people—I do not say immediately, but increasingly—to stand on their own feet and to prove themselves creditworthy and to borrow their money in the markets of the world, in the same way that everyone else has to do. I do not deny that it may be necessary to help them for a time; I believe it probably will. What is more, provided that such countries prove themselves creditworthy, I do not believe they will have as much difficulty as some noble Lords opposite think.
I believe that where there is reluctance to invest, it is perhaps because of lack of confidence in the régimes where the investment is proposed. I believe that confidence can be built up only by the leaders in those countries themselves, and I hope they will make an effort to do it. I do not think that the independent territories should for long rely primarily on Government finance. I think it ought to come from the markets of the world; although, as I say, I agree that for a period it may be right and necessary for some Governmental agency to be created. I believe, however, that if we are to do that, this country cannot alone bear the whole burden. If there is to be any sort of finance corporation for the independent territories it should be on a Commonwealth basis, something to which we all contribute finance and in which there is an agreed plan of priorities and everything else. Therefore, my own view is that there is not a case for allowing the Corporation to extend its activities to the independent territories. I think it should continue to do the job for which
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it was designed—that is, to help the dependent territories.
Let me turn to Lord Ogmore's second proposition. Here his thesis was that the Corporation was a commercial concern which was undertaking enterprises of considerable risk; that it should be relieved of interest payments; that its bad debts should be written off and, in effect, that it should have mainly equity capital. I am rather surprised to hear the noble Lord, Lord Ogmore, make these strictures.
LORD OGMORE: I do not by any means suggest that all the interest payments should be relieved. I said that this large sum of £8 million relating to capital losses should be written off. I never suggested that current projects should be relieved of interest.
LORD LLOYD: I beg the noble Lord's pardon. I thought his theme was that interest rates were far too high and ought to be reduced, and that capital ought to be written off. If I misrepresented him in any way I apologise. I should like to point out that the financial structure under which the Corporation is operating at the present time is the financial structure imposed on it by the Party opposite when it was set up. I am not using that as a debating point; it is a fact. The noble Lord suggested that the present financial structure—and indeed if the noble Lord's Motion means anything he must imply this—has prevented the Corporation from making full use of its opportunities in colonial development. I do not myself think that, so far, that has happened.
What is the position? The Corporation is financed exclusively by the taxpayer, and he is compelled to invest in the Corporation, poor chap! whether he likes it or not; and until he elects a Government which does not believe in the policy of having a Development Corporation he will have to continue to invest. The Corporation is investing about £7 million per annum, as I calculate, and a position has been reached where it has invested or committed the bulk of the original £100 million which was allowed to it. Most of it has been sunk in long-term schemes, and I do not imagine that there is much prospect for a number of years that any of that capital will be released and available for fresh projects. Of course there has also been the loss of

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£8 million. The profit, before paying interest, this year amounted to about £1 million. Clearly, there is no question for a long time of future developments being financed out of profits; the profits would have to increase sevenfold before that could be done. Therefore I think that clearly the Corporation cannot go on much longer—indeed it is commonly admitted that it cannot—without a fresh infusion of capital.
I do not think that the rate of interest or the amount of interest has affected the position at all. Since 1948, the Corporation has paid, I believe, about £1,500,000 in interest. For the first seven years it did not pay interest, so it is only really beginning to pay it now. If it had not paid that £1,500,000 it would have had the money to invest in new projects, though, of course, £1,500,000 is only about one-quarter of the annual average rate of investment. So it means that the Corporation could have waited three months longer before going to the taxpayer for fresh capital.
Then we come to the repayments of capital. Here I think the situation is more difficult. Apart from short loans, I do not imagine that the Corporation have had to pay back much capital yet. But they will soon have to begin doing so. When they begin, repayments will mount speedily. I think this must have had some effect on their activities, because they have been forced to indulge in more finance house investment than they would otherwise have done, though the Report says that this has not been excessive. I know that some noble Lords think it would have been better if they had not had to do so much of it. But I do not think the noble Lord can say that any of this financial structure has stopped the Corporation from doing its job up to date.
I am bound to say this—and here I feel I must make an apologia. I have reached the conclusion that the present system has serious defects. The noble Lord is entitled to say that I have defended the system for a number of years. So I have. But I have defended it with less conviction as time went on. The more I think about it the less certain I am that I was right. I think the mistake we have all made is to regard this organisation as an ordinary commercial organisation. I do not believe it is, or
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can be so regarded. I think it is somewhere between colonial development and welfare and private enterprise. If it is going to undertake the sort of projects which it was set up to undertake, it is going to do jobs which are not normally attractive to private enterprise. If it is not going to do this, there is no point in its existence. Therefore, it is bound to operate on slender profit margins and in long-term undertakings. So I do not think you can expect it to begin to repay its capital, after seven years.
The situation which is being reached is really rather absurd. It is a situation in which, in order to repay capital to the taxpayer, the Corporation has to borrow some more from the taxpayer to make repayment. As a taxpayer myself, I must say that that does not seem to help me very much. If I waive my interest the demand is only postponed a few months. Therefore, from the taxpayer's point of view, I do not think there is much to be said for the present system of finance. The taxpayer has to pay if the Corporation is to continue. If the Corporation is to continue it must borrow more money. And it is going to borrow some more money pretty soon. I do not pretend that I can think of a solution ready-made, but I feel that the time has come, now that this new capital is going to be borrowed, when the Government ought to consider whether some new system of finance for the Corporation cannot be evolved.
From the taxpayer's point of view—speaking as a taxpayer—I should be much happier if I received no interest but knew that there was a definite limit on the constant drain of my capital to the Corporation. I think the taxpayer has the right to expect that he should not be continually mulcted for fresh capital. I should like to see some control of that factor. If a situation could be reached where the Corporation could, by ploughing back profits and hiving-off established schemes, finance its own activities, and so become a sort of revolving credit, I am sure that that would be the most satisfactory situation to be arrived at. Whether that could be done or not depends on a number of factors. There might have to be some definite limit on the Corporation's capital needs; a considerable part of the permanent loan might be interest free subject to the Government's right to wind up the Corporation, the remainder being

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a long-term loan at Treasury rate. But the position in which the Corporation would finance its own activities is a position we all aim at, and I hope that perhaps the Government might consider this idea when they are considering this question of finance.
Finally, I do not know whether the noble Lord opposite intends to divide the House on this matter. I do not think that hitherto he has made out a case for saying that the Government have injured the work of the Corporation, and I entirely rebut the suggestion that the Government have been trying to injure the interests of the Corporation. Therefore, personally, if the noble Lord takes this to a Division I shall be bound to support the Government.
5.36 p.m.
LORD SHEPHERD: My Lords, in rising to support the Motion moved by my noble friend Lord Ogmore this afternoon, I find myself in some difficulty. First, to enjoy the indulgence of your Lordships' House I must be non-controversial, and therefore I am precluded from raising points which were raised by the noble Lord, Lord Grantchester, and the noble Lord, Lord Lloyd. Secondly, as a maiden speech, my speech must be of limited duration. Therefore it is not possible to render true service to the many peoples of our colonies and their very great problems. I therefore propose to devote my few remarks to the question of the Colonial Development Corporation and its future activities in Malaya. I do not know whether I should declare an interest, but for the last ten years I have been living in Malaya, and I still have business interests there.
As your Lordships will be aware, a Bill granting, or making it possible to grant, independence to the people of Malaya is now going through another place. This Bill, as it treats the Colonial Development Corporation, is a decided advance on the Ghana Independence Act, in that it does not exclude the Colonial Development Corporation from continued operations in Malaya. However, a reply given in another place by the Secretary of State for the Colonies last week indicates that the British Government policy will severely restrict the activities of the Colonial Development Corporation, in that the Corporation will not be allowed
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to invest in any new enterprise in the Federation after independence. It will, however, be permitted to make additional investments, if necessary, in existing enterprises and to act as managing agents in any enterprise at the request of the Federation Government, provided no Corporation funds are utilised.
The Corporation, as the Report shows, has approved capital investment in Malaya, Singapore and North Borneo in the region of £16 million, and has invested in projects for the development of agriculture and secondary industries. Many of these projects are still in their infancy. They are mere pilot schemes and naturally considerable further investment will be required if these projects are to prove of real worth to Malaya. I wish to draw your Lordships' attention to just two lines in the reply given by the Secretary of State to which I have just referred.
" The Corporation, however, will be permitted to continue with schemes existing at the date of independence and, if necessary, to provide further capital for these schemes after that date."
The key to that reply is the words "if necessary". I think that we should know what sort of interpretation is going to be given to them by the Secretary of State. Is it going to be a wide interpretation or is it going to be a narrow one? Do the Government mean that further investments will be permitted until these pilot schemes have grown into such a state that they can continue on their own?
Malaya has played a great part in the stability of the sterling area and enjoys a higher economic standard than any other country in South East Asia. However, her economy is extremely unbalanced. Malaya's wealth at present depends upon rubber and tin. Over 70 per cent. of the agricultural land under cultivation is devoted to rubber; 80 per cent. of her overseas earnings and 50 per cent. of her Federation revenue come from these two industries. Much of her food has to be imported, and because of few secondary industries, practically all of her consumer requirements. If there is any recession in any of the industries which absorb natural rubber, Malaya will be gravely affected. It is, therefore, of paramount importance that her agriculture is developed, particularly in products other than rubber.

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The Colonial Development Corporation have been aware of this fact, and through their own initiative, in partnership with a number of companies, have started the cocoa industry. It is estimated that in Malaya there are 300,000 acres of land suitable for planting cocoa and two estates have now been planted, of approximately 1,500 acres. I understand that there are great hopes of this industry, particularly as cocoa is in short supply on the world market. But to develop this industry considerable capital will be required, and it would be regrettable if finance from the Corporation was not available to this new industry in its critical years.
The Corporation have also taken a keen interest in smallholdings, particularly in palm oil. I understand that they have agreed to lend money to the Federation Land Development Authority for the development of new agricultural areas. It would be pleasing to hear from Her Majesty's Government that the Corporation may continue to provide finance for this important product. There are few secondary industries in Malaya, and it is essential that these are created and developed, not only to ease the burden of imports but also to provide employment for the fast growing population of Malaya. Since 1945, the population of Malaya has grown by approximately 25 per cent., and in view of its age structure this population will grow a good deal more quickly over the next ten years. I think it is agreed that it is on employment that the social standards of a country depend, and, in the case of Malaya, on racial harmony. Opportunities for the Malay must be provided; and since the bulk of the capital in Malaya is Chinese-owned, it would appear that capital to assist the Malay will have to come from the Federation Government or from overseas investors.
The Corporation are aware of the importance of these secondary industries as is shown by their recent investment in the Central Electricity Board, which has brought power to central Malaya. The Corporation have promised to invest in the new Malayan Industrial Development Corporation, where their partners will be the main banks and the Federation Government. I wonder if we could hear from Her Majesty's Government whether the Corporation will have sufficient funds to
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continue investment in these two important projects.
Malaya, I understand, is going to remain in the sterling area, and, of course, in the British Commonwealth of Nations. Naturally, it will look to this country for investment and help. Her Majesty's Government have already signified their intention of granting loans to help Malaya with the cost of the emergency, but this will not be sufficient, for Malaya, within her own resources, cannot provide the capital for immediate development. We all appreciate that this country has its own economic problems. We may not be able to do all that we should like. Therefore, it is essential that when we do make investments in Malaya, we make them for the greatest advantage of that country. I think that we should remember all that Malaya has gone through since 1948. In spite of murder and insurrection, the people there kept their rubber and tin industries open and earned hard currency for the whole sterling area. I hope that we shall hear from Her Majesty's Government that it is their intention to help Malaya to the maximum possible in the early days of independence, and that their chosen instrument will remain the Colonial Development Corporation.
5.47 p.m.
THE EARL OF HOME: My Lords, I am going to ask the indulgence of your Lordships to alter my intention, which was to wind up the debate. As your Lordships are aware, Queen Elizabeth the Queen Mother is returning from her successful tour of the Federation, and I know that your Lordships would wish me to go and greet her. Therefore, if I may, I would suggest making a short intervention at this point. The noble Earl, Lord Lucan, has kindly said that he understands the reason. My intervention will be short because my noble friend Lord Perth has dealt with many of the questions which concern the Colonial Development Corporation.
The Motion of the noble Lord, Lord Ogmore, can be divided into two parts, that which deals with the Corporation and that which raises the larger consideration of investment in the Commonwealth as a whole. May I say at once that the noble Lord has stimulated an interesting debate; and not only interesting, but timely, because there is evidence wherever I go that there is an increasing interest in Commonwealth development and

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Commonwealth trade. In his speech, my noble friend Lord Swinton said that we were all agreed that there should be the maximum investment in the Commonwealth. I accept that absolutely, and I think that that is common ground in all parts of the House. Both in your Lordships' House and in another place it has been suggested that we may best achieve the maximum development within the Commonwealth by some joint Commonwealth investment effort. Of course, we have a joint effort already in the Colombo Plan, which gives technical aid on a considerable scale, and perhaps technical aid is of more value than anything else to a good many of the countries, particularly Asian countries, of the Commonwealth. Indeed, one of the greatest of Asians testified in a marked way that the best way for an Asian to equip himself was to be familiar with the techniques of the twentieth century. That was the late Aga Khan's finding, and I think it is true that technical education is perhaps the most important thing that can be brought to the Asian countries of the Commonwealth to-day. So we have the Colombo Plan, to which the. United Kingdom makes a considerable contribution.
Then, arising out of the Conference of the Commonwealth Prime Ministers, there was the proposal that we might make more of the Commonwealth Economic Committee, about which the noble Lord, Lord Barnby, asked me. Originally, the idea that we might make more of that body was put into my head by my noble friend Lord Bruce of Melbourne, in a speech in this House. He suggested that the world, and the investors in the world, did not know enough about the resources of the Commonwealth. He asked what was being done about it at the present, and what might be done about it in the future. So, jointly, the Commonwealth Prime Ministers the other day decided that it would be a good thing to ask the Commonwealth Economic Committee how they could make their work more effective, and how they could most effectively keep the knowledge of the resources of the Commonwealth permanently in the eyes of the world's investors. So there, in the Colombo Plan and the Commonwealth Economic Committee, we have joint Commonwealth efforts.
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But the suggestion that has previously been put forward, both here and in another place, was something more ambitious: that we might have something like a Commonwealth bank or a Commonwealth Development Corporation. I circulated all the Commonwealth Governments with this idea some months before the Commonwealth Prime Ministers' Conference, and I think that none of the Commonwealth Governments felt at that time that this was a practical proposition; and they confirmed that original impression when the Commonwealth Prime Ministers lately met. By and large, it was thought, and I believe rightly, that a bank does not create fresh capital—and as several noble Lords have pointed out, fresh capital is the essential need of the Commonwealth to-day—and that a system of priorities would be extremely difficult, and probably impossible, to work. So, my Lords, apart from the joint Commonwealth efforts I have described, it was thought that no further advance on those lines, at any rate, could be made for the present.
Therefore, Her Majesty's Government have thought it well to put together in a White Paper (and I can tell the noble Earl, Lord Swinton, and other noble Lords who have asked that it will in all probability be ready before the end of July) the United Kingdom's contribution to, and rôle in, Commonwealth development. I think it will be useful to Parliament and to people in this country. Not only that: I hope it will be useful to the Finance Ministers, when they meet in Ottawa, when they are considering the general question of Commonwealth economic development and Commonwealth trade. I think it is necessary, and probably a good thing, to produce a White Paper at this time because these debates that we have from time to time deal only with a section of the picture of Commonwealth development and are rather apt, perhaps, to give the impression that the United Kingdom is doing very little. The urge, the natural urge, which we all accept, is to do more; and if the suggestion always is that much more should be done, then the impression may remain that we are, in fact, doing very little. Of course, that is not so.
I do not want to anticipate the White Paper in any great detail, but we are at present expending 1¼ per cent. of our

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annual gross national product on the Commonwealth; 7 per cent. to 8 per cent. of our gross fixed investment at home is invested in Commonwealth countries; and 70 per cent. of the external capital invested in the sterling Commonwealth countries over the period 1946 to 1955 came from the United Kingdom, whereas from the United States it was 15 per cent. So there is really a good story to tell. And when it is all added up—£150 million a year to the sterling Commonwealth, some £30 million (and it is growing) to Canada, and on top of that the technical aid and grants—it will be seen that we are pushing into the Commonwealth to-day some £200 million a year in investment. That, taken absolutely and comparatively, and taking into account our circumstances after two world wars, is surely not an inconsiderable sum and effort by our people. The greater part of the monies invested in the Commonwealth has come and is coming from private sources. That is the natural source of the majority of the funds, and on this side of the House we believe that it should be the main source. And so far as the independent Commonwealth is concerned we feel that the Commonwealth Development and Finance Company should be stimulated as a useful instrument in Commonwealth investment.
So the White Paper—although, as I say, I am not going to anticipate it in any detail—will broadly put this picture before your Lordships: that private investment is the main source of Commonwealth development, although there should be Government transactions, as indeed there have been in the past. For instance, we helped to finance the Indian Steelworks, a great enterprise; and we have helped to finance paper and pulp in New Zealand. We are willing to go on giving help of this kind when a case of merit is put up. There have been many significant enterprises financed in this way; and there will be grants and technical aid. All that will be set before your Lordships in the White Paper, which, as I say, I hope will be produced towards the end of July.
One of the main questions that has been raised in this debate (and it was bound to be so because the Motion of the noble Lord, Lord Ogmore, was directed towards it) is how can the Colonial Development Corporation best
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be used—the noble Lord used in the Motion the phrase "the full use of the Colonial Development Corporation." Let me get two suggestions out of the way at the start. Nobody says or insinuates that the Colonial Development Corporation has not done well. It has clone excellent work and has been most ably directed by Lord Reith, who deserves a great deal of the credit for the transformation which has been brought about in the work of the Colonial Development Corporation in recent years. I would firmly and absolutely rebut the charge that there is any personal grudge between the Colonial Secretary and Lord Reith. Government policy is not conducted on whether people like each other or have an antipathy against each other. Government policy is formed on the merits of the case.
Two considerations, speaking personally, have influenced me largely in this case when considering, I hope with an open mind, whether or not the Colonial Development Corporation should be used in the independent Commonwealth. First of all, I have been convinced beyond doubt that inside the colonial territories there will be enough opportunities to occupy all the energies, ingenuity and capital of the Colonial Development Corporation for generations to come. There is plenty of work in the colonial territories. After all, towards these colonial territories the Government have a special responsibility, and a quite different sort of responsibility from that which they have towards the independent Commonwealth countries. There will be many desirable development projects in the colonial territories which cannot be fully financed, and for which they cannot raise all the money, and it is there that the Colonial Development Corporation, with its expert knowledge, will be able to fill the gap. It is doing it extremely well, and can go on doing so. Therefore, as a deliberate act of policy the Government think it well to confine the capital controlled by the Colonial Development Corporation to the colonial territories.
I look on this master, however, with an open mind, and I have been persuaded by your Lordships, and by conversations which I have had outside—and the Secretary of State for the

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Colonies and the Government have been persuaded by your Lordships and by others—that while we may confine the capital of the Colonial Development Corporation to the Colonies, it would be a waste indeed to confine the expert personnel whom they employ (and they have very good expert personnel) solely to the colonial territories. So we have decided—and we will make the necessary provision—that those expert personnel should be used, if so desired, by any Commonwealth country, with the assent of course of the Colonial Development Corporation, on an agency basis so that they may have the benefit of their expert knowledge.
I hope and all your Lordships will hope that the noble Lord, Lord Shepherd, will join in our debates on many occasions in the future, and that he will bring his expert knowledge in these matters of the colonial territories to the benefit of your Lordships. The noble Lord asked me whether we would be sympathetic towards Malaya, Ghana and other developing countries in their need. The answer is that certainly we shall be sympathetic, but so far as the independent Commonwealth countries are concerned, and whether or not the Colonial Development Corporation should operate in those territories, there are certain considerations which I would ask the noble Lord to bear in mind, some of which were mentioned by the noble Lord, Lord Lloyd. The aim of every Commonwealth country—and I have had this impressed on me time and time again—is to be independent, not only politically but economically. I think we all accept that. If that is so, then the most urgent task of an independent Commonwealth country is to gain the confidence of its own people, so that its own people will lend to its own Government for its own development; then its second task is to gain the confidence of the world outside in its stability and its prospects. When that is established, such a country can go to the London market, to the merchant banks, or to the International Bank or to an international agency and get assistance which is based on its own credit. That is the position I think we all want to establish and which every independent
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Commonwealth country wants to establish.
Then again, it is almost impossible to have a two-tier Commonwealth Government as my noble friend Lord Lloyd said. If we extend the operations of the Colonial Development Corporation to Ghana or Malaya, why not to India, Pakistan or Ceylon, since some of the emerging Commonwealth countries are perhaps rather better off than some who have been independent for some time? I think it is really no contribution to the independence and status of those emerging countries to give them the impression that they can rely endlessly on the British taxpayer, because there are not unlimited resources of capital available in this country. But, equally, they have the proof of our sympathy in the existence of the Colombo Plan, where we help with technical aid, and in our willingness—I have given only a, few examples—to help them time and again to finance their great projects. They know that perfectly well, and they know that they will always get a sympathetic response from this country as far as our resources allow.
My last word is really conditioned by the words "as far as our resources allow". It is no use pretending that we can invest enormous sums abroad in future years—and this is my real quarrel with the Labour Party's pamphlet—unless that money is saved at home. Investment at home or in the Commonwealth can rest only on the savings of people here. We have an enormous task so far as our own investment in atomic energy and in coal is concerned. If noble Lords will look at the figures, they will see that they are very large indeed, and we have to invest in our own country because unless our own country is strong we cease to be the centre of the Commonwealth and to be of service to our Commonwealth partners. But we accept—and I repeat this—that we should make the maximum investment possible, based on the savings of our own people, and I hope that when your Lordships read the White Paper which I have promised will be brought before this House before the end of July, you will feel that the Government are pursuing an investment policy, so far as the Commonwealth is concerned, which is realistic and which will help to meet development needs as we all know your Lordships wish to do.
6.7 p.m.
LORD WINSTER: My Lords, the noble Earl the Leader of the House having spoken, I feel we are now rather in the position of playing Hamlet without the Prince.
THE EARL OF HOME: My Lords, if I may interrupt, I would say that, with the leave of the House, my noble friend Lord Perth will be the Prince later on.
LORD WINSTER: That will in some measure console us for the absence of the noble Earl. In any case, I am sure we are all happy to think of the purpose which carries him away at this moment. I am happy also that it falls to my lot to be the first on this side of the House to congratulate my noble friend Lord Shepherd upon his admirable maiden speech. He spoke with ease and fluency, but what was still better, he spoke with knowledge and experience of the subjects upon which he touched. Although I have been a Member of your Lordships' House for only a short time, I feel safe in assuring the noble Lord that the House is always glad to hear anyone who speaks with knowledge and experience of the subject in hand, and that, accordingly, the House will always listen, not only with pleasure but with appreciation and gain, when the noble Lord, Lord Shepherd chooses to address us.
I should like to start what I have to say—for I have some criticism to make, I must confess—with a word of praise for the dispatch with which these Reports of the Colonial Development Corporation are prepared and presented to Parliament. I think it is especially commendable since they deal with a great multiplicity of enterprises all over the world. As something has been said in criticism of the fact that this particular Report contains strictures of Colonial Office policy, I should like to point out that the Report is not made solely to the Government who present it to Parliament, but that it is also a Report to the people of the country whose money is employed in the enterprises mentioned. Therefore to me it seems perfectly right that if the Chairman of the Board feels that, in his duty to the country, he is bound to point out matters which are hampering him in pursuing the task with which he has been entrusted it is not merely proper but a matter of duty that he should do so, as
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has been done in the particular Report under consideration.
Perhaps the noble Lord, Lord Reith, will not mind my saying that, while I praise the speed with which the Report has been got out, I still continue to dislike the staccato style in which it is written. But the noble Lord is a man of strong personality and he must be allowed his little foibles, which we all have, and this method of publishing a Report is one of his foibles. It seems to me to be the first of the noble Lord's Reports which has not relied upon criticism of the past or of private enterprise partners, and I think that that is a great advantage. He will not perhaps mind my saying that I have noticed that the average age of the directors on his Board is sixty-six. I am inclined to agree with the Daily Express which says that the 20th century had better be run by 20th century men. Perhaps the noble Lord, Lord Reith, as opportunity offers, will feel able to introduce a little more younger blood on to his Board. May I say, also, that I hope that the extremely eccentric letter to The Times written by Mr. Arthur Gaitskell does not represent the spirit in which the deliberations of the Board are carried on.
Last year I advanced the view that too great a proportion of the Corporation's activities is devoted to finance house activities. I propose to return to that theme to-day—finance house business in preference to employing capital in productive activities. The current Report endeavours to justify this policy which I think has been increasingly stressed during the Chairman's seven-year tenure of office. The activities of the Board are set out on pages 4 and 5 of the Report, where they are classified under five headings. There is first "Direct projects and subsidiary companies", under which, in column (1), there is "Investigations and development"; and in column (2) there is "Revenue-earning". Then we come to the main heading "Investments and commercial loans". Under that, column (3) is "Investigations and development" and column (4) is "Revenue-earning". Column (5) is "Loans", which comprises loans to Governments, Government agencies, or loans guaranteed by them.
I would say that many of the Corporation's commercial loans, such as are entered in columns (3) and (4), could just as fairly be described as finance business

1307
as those entered under column (5) under the heading "Loans" and agreed to be finance house business. The only difference between the two types of loans that I can see is that one is guaranteed by a colonial Government while the other is not. But, in spite of that distinction, I regard both as finance house business.
Another matter in these columns to which I should like to draw attention is Williamson Diamonds, which appears in column (4) under the heading "Revenue-earning". That would lead one to suppose that this is a revenue-earning investment or a commercial loan, but it cannot be revenue-earning business because, although a loan of £500,000 to the company for the mechanisation of the mine was approved in 1955, nothing had been drawn to the date of December 31, 1956, nor had anything been drawn up to the date of the signing of this Report. It seems to me rather strange that this item of £500,000 appears year after year and is added also to the total of capital committed although nothing has been spent. But if and when it is drawn, in what material sense will it differ from finance house business although it is entered as I have said? It will differ only in the sense that it is a Government-guaranteed loan. To my mind, to employ Corporation money in such a way is simply a money-lending transaction, and only by a stretch of the imagination can it be justified as an investment in which the Corporation should have interested itself.
By contrast, column (2), I agree, shows several genuine, real enterprises now emerging from the chrysalis into the profit-earning stage—which, I may say, is to my mind a justification of those who pioneered them. There is another matter to which I should like to call the attention of your Lordships and that is the frequent changes of names which occur in these enterprises. I think the matter has been briefly referred to this afternoon. I could give not one but several instances of these changes of names. I hope that there may be an end of this sort of thing, because uniformity in nomenclature is very desirable especially in reading a somewhat long and complicated Report. I hope that the noble Lord, Lord Reith, will remember that there is a very well-deserved suspicion of men who change their names, and that he will endeavour
1308
to preserve the names of the enterprises over which he presides.
As to the new projects for this year, an analysis of the Report reveals that all the new capital commitments in 1956 were what I have termed "finance house" operations. According to the Report, eight new projects were approved, and I make it that, of these eight, seven were new acts of lending and only one was an investigation—not a project but an investigation. I cannot see that the word "project" is appropriate for any of these seven lending transactions, which of course could have been handled just as well by any merchant bank or joint stock bank. I will not weary your Lordships by giving you particulars of these seven loans—I have them all here—but I think it is sufficient to state the fact that out of eight new projects seven, it cannot be contradicted, are money-lending transactions. The eighth is an investigation, the Ox Bow Lake Power and Water Investigation, Basutoland. The Report makes no mention of any commitment on this project. It only says that the Corporation has been asked to share an investigation, an investigation which I should have thought would be of more interest to South Africa than to Basutoland.
The impression left on my mind by these items is that columns (3) and (4) to which I have referred, on pages 4 and 5, might just as well be included under column (5) "Loans". If columns (3) and (4) are included under column (5), then things get into their right perspective and the great preponderance of finance house business becomes evident. These three columns, Nos. (3), (4) and (5), show that 41 out of the 66 individual undertakings of the Corporation at the end of 1956 between them represent 57 per cent. of the capital deployed by the Corporation at that date. Only 38 per cent. was deployed in the 11 undertakings listed under column (5). I think that that is apt to give a somewhat misleading account of what is in fact taking place. I should like to add, too, that of the undertakings initiated by the Corporation since 1950, all but one fall into these three columns, (3) (4) and (5), which I regard as referring to lending transactions; and 24 out of 25 of the direct projects and subsidiary companies at present carried on by the Corporation were begun before the noble Lord, Lord Reith, became Chairman.

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My Lords, there are, no doubt—in fact, it has been expressed in this House in a previous debate—those who find comfort in thinking that the noble Lord, Lord Reith, is pursuing the safe road of a finance house business. He has had praise in the Press for his performance on the moneylending "wicket." But I am not quite sure that moneylending through a United Kingdom Government Corporation is the best way to promote colonial development. I agree that the method was provided for in the Overseas Resource:; Development Act, 1948, so that the noble Lord is quite within bounds and within the terms of the Act, in using it for new business, even if doing so to the exclusion of any other business. But perhaps in doing so, when seeking new business, he has lost sight of the original purpose for which the Colonial Development Corporation was set up.
I may mention here that it has been said in speeches this afternoon (I think the noble Earl, Lord Perth, was one who said so) that the Corporation was set up to operate upon commercial lines. I did not understand it quite in that way at the time. I speak now in the spirit and not, perhaps, in the exact letter, but I thought that the Corporation was set up in order to engage in ventures which, while they held promise, were not of such a nature as to attract the ordinary or the usual run of commercial business. That is my very distinct recollection, and I think that is a certain qualification of what has been said by the noble Earl—that the Corporation was set up to operate upon commercial lines. I think there was that margin left open to it where it might operate in businesses which commercial
1310
undertakings would not normally undertake.
THE EARL OF PERTH: My Lords, I think I would agree with the noble Lord. I think that the position is that, taking one business with another, on balance the scheme works out satisfactorily.
LORD WINSTER: My Lords, I am happy to think that there is no difference between us. Certainly, there can be no difference on this: that the Corporation was set up to engage on its own account in productive activity. Lending to others was to be a secondary activity, and it was not expected that many of the early projects would show profits in their early days. My recollection is that, when passing the Act, Parliament thoroughly understood that and acquiesced in the view which I have put before your Lordships. Inevitably, upon that understanding, there have been failures. If you are to take risks of that nature, there must be some failures. Equally, to my mind there have been direct projects closed down because—I may say this to the noble Lord quite frankly—I think the noble Lord, Lord Reith, prefers to divest the Corporation of marginally economic direct projects in favour of banking and money lending.
EARL FORTESCUE: My Lords, there is to be a Royal Commission at half past six. I suggest that the House do now adjourn during pleasure. I have already warned the noble Lord who is speaking.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
6.30 p.m.
The following Bills and Measure received the Royal Assent:

National Health Service Contributions,

Maintenance Agreements,

Cheques,

Superannuation,

Housing and Town Development (Scotland),

Legitimation (Re-registration of Birth),

Thermal Insulation (Industrial Buildings),

Advertisements (Hire-Purchase),

Parish Councils,

Representation of the People (Amendment),

National Health Service (Amendment),

Exchequer and Audit Departments,

Judicial Offices (Salaries and Pensions),

Ministerial Salaries,

Electricity,

Aberdeen Harbour (Superannuation) Order Confirmation,

Baird Trust Order Confirmation,

Glasgow Corporation Order Confirmation,

Kilmarnock Corporation Order Confirmation,

Aberdeen Corporation Order Confirmation,

University of Exeter,

Buckinghamshire County Council,

London County Council (Money),

Croydon Corporation,

Tyne Improvement,

Channel Islands (Church Legislation) Measure, 1931 (Amendment) Measure.

House adjourned during pleasure.
House resumed.

THE COLONIAL DEVELOPMENT CORPORATION
6.47 p.m.
LORD WINSTER: My Lords, I was saying when the House adjourned that I felt that the Chairman of the Corporation had a certain predilection in favour of banking and moneylending as opposed to direct projects. But the current Report, which we are discussing, shows that more and more of the direct projects initiated in the early years are bearing fruit and are now justifying the pioneering of the first Board. Fourteen of the direct enterprises made profits last year—four more than in 1955. Their profits aggregated about £477,000, which was an increase. Seven direct enterprises made losses, but these losses totalled only just over £105,000. Of that comparatively small sum of £105,000, over £77,000 was lost by one of the enterprises, the Macalder Nyanza Mines, which had teething troubles. As to the other six losing projects, between them they lost only £28,000, and none lost over £14,000. In view of those figures, I feel that those who laid the foundations in the early years must now be feeling some encouragement. I think that some of the projects upon which Lord Reith laid his hand might equally have succeeded, with perserverance and patience.
LORD REITH: Nonsense!
LORD WINSTER: I am glad that the noble Lord has broken silence—whether his intervention is in order or not. But, at any rate, that is an opinion widely held, and in reply to his cry of "Nonsense!" I will only say that I hope that the one investigation which perhaps can be described as a project which is included among his eight new projects will meet with great success and yield abundant profits.
I must refer to another matter which keeps recurring in these reports—that is, the special losses account. These losses move through the pages of these reports like a wailing banshee, an uneasy ghost which nobody seems able to lay. Put in a nutshell, the Colonial Office refuse to agree to the Corporation's figure of £8 million for special losses, attributable to projects started before 1950, and the Corporation refuse to whittle down the amount, and they press for a waiver of

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interest on the whole of it. During the last two years, the Corporation have met the interest commitment by a wide margin, but they seem to feel that they must eschew risk in order to obtain the money with which to pay the Treasury interest.
I have done my best to make an analysis of these special losses from information given in the Reports since 1950, and I would put the losses at about £6½ million. In doing that, I have taken no account of deductions which should be made for the sale of assets of abandoned projects, such as Eleuthera, Andros and Cramer Estates, which were finally disposed of last year. The price of land in Eleuthera has trebled since the Corporation bought the land from Mr. Arthur Davies in 1950. If that is so, the noble Lord, Lord Trefgarne, seems to have made a very good bargain in that transaction. Sales of land in Eleuthera in 1956 must have shown a profit on the price paid in 1950, and it seems unrealistic to regard the final loss, if there is indeed any final loss, as the figure estimated at the end of 1952. Surely, when reckoning up the special losses, account should be taken of special gains and gains on sale of assets. I have in mind the sale of such Corporation interests as Chilanga Cement, Trinidad Cement and East Africa Industries. So far as I know, these sale prices have never been disclosed. I should say that the reckless sale of assets is as bad as reckless expenditure and should be searchingly inquired into.
If the figure of over £8 million is realistic, as the Corporation maintains, then I can understand the Corporation pressing to have the whole slate, not just a part of it, wiped clean. If the failure to get rid of the special losses, both interest and capital repayments, is the reason why the Corporation lean towards finance house business and safe investments to pay their interest bill, then the sooner the matter is straightened out the better for the cause of improved colonial development on the lines laid down by the 1948 Act, which are just as sound to-day as they were then. But if there is to be a special losses write-off—and I should not be opposed to that—it ought not to be allowed to go through without an independent inquiry into the necessity for the write-off and
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into the method employed in realising assets.
These are some of the points which make me feel that the Corporation and the Colonial Office are at cross purposes. But I wish at once to dissociate myself entirely from any suggestion that these cross purposes are due to any personal feelings existing between the Colonial Secretary and the Chairman of the Corporation. They are far too big men to let their personal feelings come into such a matter as that. But if these differences of opinion are not reconciled, they may provoke bad blood and jeopardise the future of the Corporation's operations. It would be very difficult for such a Corporation to continue to function if it were chronically at issue with the Colonial Office. I do not want to use that terrible cliché "frustrated", but I think that, members of the Board of the Corporation perhaps feel rather hamstrung. To quote a saying of the day, perhaps they are not "Angry Young Men" but "Angry Old Men" over these matters. Of course, the Government expect to have the last word on policy
" Shall the clay say to him that fashioneth it—' What makest thou?'".
The Government must have the last word. In any case, I am not prepared to agree that the Corporation's difficulties are entirely to be laid at the door of the Colonial Office; that, so to speak, the noble Lord, Lord Reith, has been given a job but the Colonial Office withhold from him the necessary tools.
In connection with the Resolution of the noble Lord, Lord Ogmore, which I will certainly vote for if he presses it to a Division, I notice that the recent Labour statement on colonial policy has advocated the more vigorous initiation and prosecution of direct projects by the Corporation. This is in line with the original purpose of the Act and is in line with what I have been saying this afternoon. I cannot say that I feel that such a policy has marked the chairmanship of the present incumbent. It was never the intention of the Labour Party, I am sure, that the Corporation should be a finance house, and that it has become so is the work of the Chairman and not of the Government. I think it would be advantageous were the Corporation given a statutory direction that no more than 10 per cent. of their projects should consist

1315
of advances at fixed interest involving little or no risk. There are plenty of banks and finance houses to do that sort of business.
In conclusion, I hope the noble Lord, Lord Reith, will allow me to say that I can feel sympathy with him at having to sit and listen to some of the criticisms which have been made and to which, by his office, he is prevented from replying as any other noble Lord under criticism is entitled to do. I hope he will believe that these criticisms are made in complete good faith and without animosity to him, to his Board or to the Corporation which he directs.
6.59 p.m.
LORD HASTINGS: My Lords, although I welcome the opportunity which the noble Lord, Lord Ogmore, has given us to debate a subject of the greatest interest and importance, I cannot agree with the precise terms in which his Motion is couched. It seems to me inappropriate that the noble Lord should wish to challenge Her Majesty's Government for doing something which clearly they have not done—namely, restrict the operations of the Colonial Development Corporation. The noble Earl, Lord Perth, when he spoke, made it clear that there is still £15 million available out of the balance of £100 million, and I would point out that that matter is mentioned in the Report itself, which says that although £85 million out of the total sum of £100 million, is definitely committed, the balance of £15 million "may be required" in order to bring these projects to fruition—not that it is needed immediately, or that it will be definitely required. Therefore, quite clearly, £15 million is still available, added to which the noble Earl did say that negotiations are now proceeding with the Colonial Development Corporation about increasing the amount of loans allowed to be outstanding. Therefore, I submit to your Lordships that the major part of the case of the noble Lord, Lord Ogmore, falls to the ground immediately.
The second important point the noble Lord made—because I believe that the other strictures he passed on the Government are largely of an administrative and organisational character—dealt with the emergent territories. As that is a matter which has been fully discussed by your
1316
Lordships, I am not going to say much about it to-night—certainly not as much as I should have done otherwise.
I must admit, however, that even after hearing the speech of the noble Earl the Leader of the House I am somewhat worried. I cannot quite get out of my mind the plight of those people that I visited last January in the Northern Territories, Ghana (and it is well known to your Lordships that the Northern Territories, however much we may welcome the independence of Ghana, did not ask for, or really want, their independence to be linked to Ghana), who live at the end of a magnificent road, built through the Coast Construction Company by the Colonial Development Corporation, to Bolgatanga, and are dependent for their existence on Colonial Development and Welfare grants. Your Lordships will remember that the C.D. and W. grants will also be withdrawn on the gaining of independence. There is a splendid agricultural project there, where primitive peasants are living, rather cheek by jowl, at a density of 380 to the square mile, or even, in some cases, 800 to the square mile, trying to scratch a living at what can hardly be called subsistence level. They are being taught good husbandry, in the fullest meaning of that word, rather in the same way that it is being carried out so brilliantly, and much more rapidly, under the Native Land Husbandry Act in Southern Rhodesia. I am worried as to what will happen to those people.
I know that the Government of Ghana intended last January to ask Her Majesty's Government for a loan of £30 million for the exclusive development of the Northern Territories, to be spent over a period of ten years, knowing full well that the economic balance and prosperity of that country, and possibly its political stability, may depend on that development and the expenditure of that sum. I mention that point because I feel—and in this respect I disagree, to a certain extent, with my noble friend Lord Lloyd—that we have some responsibility in this regard, and it is in our own interests to see that political stability is safeguarded in a country where one cannot say that democracy is yet firmly established.
When I was trying to get into perspective the whole problem of investment in the Colonies I had recourse to the

1317
Report on the Colonies for 1956–57, presented to Parliament last month, of which the noble Lord, Lord Ogmore, made use in a part of his speech, referring to figures of imports and exports. Your Lordships will find it there stated (I think it is on page 84) that over the next few years the Colonies are planning to spend £150 million per annum on their development—five-year economic programmes drawn up at the instigation and with the encouragement of the Colonial Office itself. Out of that total sum, 10 per cent., at least, is to be provided from Colonial Development and Welfare grants; and as to the balance, between a half and two-thirds, let us say some 60 per cent., will be found from the financial resources of the Colonies themselves. That still leaves a substantial gap of some 25 per cent. or even 30 per cent. to be raised by external loans. So it is quite clear that, although the Colonial Development Corporation could never close that gap, there is immense scope for it to operate in the Colonies in assisting them to find the necessary money. And it is fairly clear, I think, that when the sum which is now under discussion is agreed upon there must be a substantial increase in the amount made available to the Corporation, although I have no doubt that it will not be enough to satisfy many of your Lordships, and certainly not enough to satisfy all the desires of the Colonies.
I should like to mention one or two specific cases, for this is the only opportunity we have of discussing the affairs of the Colonial Development Corporation in any detail. I would draw your Lordships' attention to the fact that under the economic programme put out by the Government and Federation of Nigeria, where they will have to raise £30 million from external loans over the years 1956 to 1960, I think I may not be far out in guessing that they are depending upon, or hoping to be able to rely upon, participation of the Colonial Development Corporation to the tune of no less than £10 million.
As an example of the value of the work of the Colonial Development Corporation in Nigeria I would cite what has been done in Lagos. Those of your Lordships who have visited Lagos, as I had the good fortune to do earlier this year, and have seen the work of the Lagos Executive Development Board and the
1318
Nigeria Housing Development Society, cannot fail to have been impressed with their achievements. A great stretch of land has been reclaimed along the port for subsequent industrial development, and low-cost housing is going on in and around Lagos, in conjunction with the clearance of slums, which can only be described, I think, as among the worst in the world: they are horrible, terrifying—a perpetual invitation to cholera and the bubonic plague, which has not been unknown there in the past. I do suggest that if any alteration is to be made in the constitution of the Colonial Development Corporation, and any expansion of a financial nature is to be extended to it, there is at the same time room for closer co-operation and co-ordination between the Corporation and the Colonial Development and Welfare Organisation, which, I believe, is controlled directly by the Colonial Office.
As an example of how this co-ordination might work to advantage, I would cite two projects in Nyasaland, one actual and one potential. The potential one is that of the Shire Valley Hydro-electric Power Scheme, in which the Colonial Development Corporation has repeatedly expressed interest, and on which research and investigation work has already been done by the Governments concerned. Since this is a case where money is not available—there is no question of this difficulty of alternative finance arising; the scheme is more or less "bogged down" for lack of finance—surely it is one where the Colonial Development and Welfare people might step in with an initial grant, in anticipation of the subsequent participation, on a profitable basis, of the Colonial Development Corporation with the Federal Government.
If that were done, it would to some extent, I suggest, make amends for the other scheme I am going to mention—the fiasco of the Nyika Forestry Development Syndicate. Your Lordships will know that that has been discontinued this year, largely on account of the lack of transport facilities—in other words, the roads and communications are inadequate. If that scheme had been worked out originally, in consultation with the C.D. and W. officials, possibly there might have been a grant to lay those roads, so that it would never have been necessary eventually to discontinue that

1319
scheme on that ground, which I understand was the main reason for the withdrawal of the private partners in that enterprise.
While we are on that scheme there is another reason given in the Report for the discontinuance of the Nyika Forestry Development Syndicate. To get the words right, I will quote from the Report. It says:
" But when negotiations between Syndicate and Nyasaland Government were resumed in November "—
that is last year—
" difficulties inherent in the long-term leasing of a large area of African Trust land, on top of the well-recognised risks of a project such as this, led the Syndicate to conclude that the project must be discontinued…"
I would ask the noble Earl, Lord Perth, when he replies, if he could perhaps clarify that situation, as all these schemes are started in collaboration with, or rather with the encouragement and knowledge of, the colonial Government concerned. Why was that difficulty not foreseen at the outset? I would also ask what is the precise difficulty now affecting this long leasehold, and whether such a difficulty, which is bound to arise in the future, cannot be resolved? I should be grateful if the noble Earl could reply to that point.
While I am on the Nyika scheme, I feel that I must bring up another point which is not particularly to the credit of the Corporation, though as an admirer of the Corporation and its staff I do so regretfully. When I was in Southern Rhodesia last March and this Scheme was discontinued, a statement was issued from the London office, I understand—not from the regional office—of the Colonial Development Corporation, giving, amongst other reasons, that this scheme was discontinued also because of the uncertainty of the political situation. That statement caused grave distress and dismay, not to say considerable anger, not only in Nyasaland but throughout the whole Federation, and was, I believe, the subject of a formal protest from the Federal Government. I hope the noble Earl can give an assurance that his right honourable friend the Secretary of State will see that no such thing occurs again. Also I trust that the noble Lord who is Chairman of the Corporation has already taken steps to see that in future no official
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of the Corporation gives out statements of a political or semi-political character.
While upon that topic, I feel that I should touch upon the point which the noble Lord, Lord Winster, raised—I was not going to mention the name of the gentleman concerned but the noble Lord did. There was the question of this letter from Mr. Arthur Gaitskell in The Times—a letter of a highly controversial character, and far from complimentary to Sir Roy Welensky and the various people in the Federation of Rhodesia and Nyasaland. I may be wrong here, but I feel that perhaps a principle is involved, and I should be grateful if the noble Earl could give his view, and possibly the official view of the Government, when he replies, as to the propriety of a member of the Board indulging in public and in the Press in political controversy, especially when it concerns a Colony with which the Corporation on which he serves is concerned. This is a statutory Board, and the members are appointed by the Secretary of State. I thought I should mention that subject, and perhaps there can be an official ruling upon it.
That brings me, naturally, to consideration of the case of Southern Rhodesia. The noble Lord, Lord Ogmore, did not get the facts quite correct—and in fact he was put right by the noble Earl, Lord Perth, when he spoke—in that the operations of the C.D.C. in Southern Rhodesia are virtually excluded altogether; and they cannot be for the benefit of Southern Rhodesia. They can be placed in Southern Rhodesia only if they are for the benefit of the two Northern Territories of the Federation. Noble Lords opposite, of course, had the opportunity, when they created the Colonial Development Corporation in 1948, of including Southern Rhodesia, but they were content to rest upon the definition of a "Colony" contained in the Colonial Development and Welfare Act, 1940. The definition there is that "Colony", for the purposes of the Act, is not a Colony possessing responsible government.
There seems to be an anomaly here, and I would seek a clarification of what is "responsible government." Is it different from what we understand normally as self-government? I ask that because it occurs to me that before Ghana achieved independence, it must surely

1321
have had self-government, under the 1951 Constitution, and its own Prime Minister; and yet the Colonial Development Corporation was permitted to operate in the Gold Coast. And what of the situation of Nigeria, where Eastern and Western Regions are about to have self-government bestowed upon them? Is that not "responsible government"? I seek clarification of the subtle difference between "responsible government" and "self-government". Either the two Regions I have cited in Nigeria should be excluded—which is far from being my wish—or Southern Rhodesia should be included in the operations of the Colonial Development Corporation.
I have already detained your Lordships too long, and I would only say, in closing, that I feel that the attitude we take to-day to this smaller problem of the Colonial Development Corporation will affect very largely the feeling outside this House of what is likely eventually to happen in the Commonwealth as a whole. I would only echo the words of the Leader of the Liberal Party, speaking in another place in that excellent debate on Commonwealth and Colonial Resources (I think it was called), some two months ago, when he said that he hoped the House would not evade the fundamental issue of what the people of this country are prepared to give up for the sake of the Commonwealth and Empire—and, if I may add in my own words, for their own sakes. For I am sure that investment to the maximum possible limit, and even beyond it, in the Commonwealth and Colonies will benefit in the near future the people of this country and generations of Englishmen to come.
7.20 p.m.
THE EARL OF LUCAN: My Lords, it would be tempting to follow the noble Lord who has just sat down into a general review of Commonwealth and Colonial development, but we should need several more days for that, so I propose to refer only briefly to some of the points; that have been brought up in his debate. The impression I get from this debate is that it is thoroughly disappointing. I think that my noble friend Lord Ogmore will feel the same. The points he raised have been dealt with by the Government spokesman, but, to my mind, the replies carry no conviction at all. There was the point about whether the Corporation had,
1322
in fact, reached the limit of their statutory borrowing powers. The noble Lord, Lord Hastings, said that there was still £15 million available. I notice, however, that paragraph 14 of the Report says that £85 million out of £100 million was committed, but on top of that there was £38 million of capital requirements for new schemes under examination. Those are schemes which are not fully accepted but I think the Corporation feel that they are morally committed to them, and that carries the requirement of capital far above the £100 million limit. Before I go any further, I should mention the very notable speech from the noble Lord, Lord Shepherd, which we all heard with great pleasure, knowing what a respected and loved figure his father was here. When the noble Lord comes and delivers a speech out of experience of one part of the world, Malaya, and gives us the benefit of that experience, we congratulate him and hope we shall often hear him again.
The noble Earl, Lord Perth, dealt with a good many of the points of criticism that were raised, and he also brought in the Labour Party's new policy pamphlet on economic aid to the Colonies. None of us have any complaint of that: it is perfectly fair, and we are not in any way ashamed of this policy pamphlet. Indeed, it seems to most of us to be a tremendous advance in giving in broad outline and a certain amount of detail the policy that a Labour Government would pursue. But I would ask that, when it is quoted and commented on, that comments should be fair ones; that they should not be short phrases extracted from their context, and the policy should fee looked at as a whole.
The noble Earl quoted something about planning. The phrase about planning was taken out of its context. He complained of the pamphlet saying that
" the Corporation should play a much greater part… in planning the balanced development of the Colonies."
If he had taken into account the whole of the previous paragraph, which explains that what is advocated is the co-operation of the Corporation and its finances with local interests and local colonial Governments and their finances, in order to ensure a balanced development of the territory, then surely nobody would quarrel with it. He complained that the pamphlet gave no credit to this country

1323
or to the members of the Oversea Civil Service for what had been done in the Colonies. But this is a pamphlet on economic aid, and there is no mention of political or administrative subjects. It would be out of place to go into a general review of our record in the Colonies. On pages 9 and 10, however, the pamphlet details the sums set aside by this country for colonial development over the last ten or fifteen years. On page 20, it quotes the total sums allotted, and it does so in order to draw the lesson of the inadequacy of the sums that we have spent up to now.
The noble Lord, Lord Lloyd, gave us a glimpse of an attitude of mind that I thought went out in politics in this country sixteen or seventeen years ago—the idea that a Colony could have only the social services that it could afford to pay for itself. That concept of Colonies was abandoned, I think, with the Colonial Development and Welfare Act, 1940, which I believe was carried through Parliament by the noble Lord's father himself, the late Lord Lloyd. Ever since that day it has been accepted that we in the home country must contribute towards the development and welfare of the peoples of the colonial territories, and it was disappointing to hear that the old conception is still in the minds of some noble Lords. The noble Lord, Lord Grantchester, spoke as if the only thing that mattered in Colonial development was that capital should get as much per cent. interest as possible, so that investors should get their money back. Those ideas, we hope, are dead.
I should like to refer, briefly and regretfully, to the noble Earl, Lord Perth, who mentioned the agencies outside the Commonwealth from which capital investment might come. They are mentioned in the Labour Party pamphlet because they are part of the whole picture of aid from the highly developed to the underdeveloped countries of the world, and that, as we all know, is probably the greatest and most dangerous problem in the world to-day. It was deplorable to hear the noble Earl, particularly with his tradition, refer to "odd foreign bodies" when he meant the World Health Organisation, the Food and Agriculture Organisation and even S.U.N.F.E.D., which surely has been talked of and discussed for two or three years. For one of Her Majesty's Ministers to protest that
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he knows nothing of it and that it is a "queer foreign thing" is very deplorable.
There is one other question which arose in the speech of the noble Earl, Lord Perth, and which I should like to follow up. Do I understand from him that every project that the Colonial Development Corporation has before it has to be submitted for approval to the Colonial Office? It may be that I misunderstood him, but something he said sounded very much as though that was the situation. If that is so, what on earth are the Chairman and Board of the Corporation supposed to do? Do we collect a lot of distinguished people and pay them high salaries and then allow them no discretion at all? I think we ought to hear more about what the situation is.
Finally, the basic question really is that of the emergent territories. It surely is no question of a two-tier Commonwealth. Rather facile phrases like that do not get us much further. The basis is need. If a country needs outside assistance and outside capital investment, we see no reason why it should not have it. India has been mentioned. We have been contributing for a number of years to help India economically through the Colombo Plan. If there is a call for further investment in any of the older self-governing countries of the Commonwealth—well, why not? As to what we mean in regard to the emergent territories, surely it is totally unrealistic to say that they must show their credit-worthiness. How can a country that has newly achieved political independence at the same time be completely economically independent? The noble Lord, Lord Milverton, put his finger on the trouble, which is that their political advancement has outrun their economic strength.
With one proviso, which I will come to in a moment, I would say that it is surely grossly unjust, and there is something of malice about it, in the idea that if you give political independence you then immediately turn off the tap of economic aid altogether. The proviso I would make is this: that the emergent countries are sensitive of the word "colonial". I think there is a clear case for the title to be changed. There is no reason why it should be changed to a large extent; the word "Commonwealth" could be substituted for "Colonial". The initials and their goodwill could remain. Clearly,

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there is a case for that. I would end by saying that I, and I think my noble friends, are deeply disappointed that the Government are not able to give any further help.
7.32 p.m.
THE EARL OF PERTH: My Lords, with your Lordships' leave I will make a few finishing remarks, because, as you know, the noble Earl, Lord Home, has had to go off for some very important reason, and so he spoke a little early. First, I should like to say what a pleasure it was to hear the noble Lord, Lord Shepherd, make his maiden speech. Curiously enough, some few years ago I, too, made my maiden speech on the subject of the Colonial Development Corporation. It seemed to me that the noble Lord spoke as an "old hand," practised in the ways of the House. I, and I think we all, look forward to hearing many more speeches from him. It was not only a first-hand tribute from someone who knows Malaya and the activities of the Corporation there. He asked me two specific questions. One was if the Corporation is to continue with projects which are already in operation, what is the meaning of the words "if necessary"? We are up against the usual problem there. It is quite impossible to give a clear definition which will operate in every individual case. It must be something which will be decided according to the circumstances of each individual project, and as a matter of record we are looking into the various projects at this time with the Colonial Development Corporation to try and get some guidance. He also asked whether the Corporation would be allowed to continue further finance for the Industrial Development Corporation. The answer to that is, No. I think the same answer is applicable in relation to the Federal Land Development Authority.
Lord Lloyd made some interesting suggestions on how any new money that may be coming to the Corporation should be made available. I know that due attention will be taken of these suggestions. Lord Milverton asked one or two specific questions. He asked whether the Corporation is fulfilling its purpose. My answer to that is, Yes. He further asked whether there was more scope for the Corporation in the Colonies. Again, my answer most emphatically would be,
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Yes; and we think it is of first importance that the Corporation should concentrate on the Colonies. I assure your Lordships that there is no danger of atrophy if it continues its activities in these fields.
Lord Winster made various points about the presentation of certain items in the Report. I know that these will be given proper and due weight and consideration. He also made certain comments on the eight new ventures which the Corporation has started this year. I must confess that I have not had an opportunity to go into each one of them in detail, but I am sure that in two or three respects he is wrong in saying that they are only straight loans. If he likes, I will take up that matter further with him outside the House.
LORD WINSTER: My Lords, I would say that the nature of the loan and the advance varies in the case of the seven different investments, but, in any case, they cannot by any stretch of the imagination be called direct projects.
THE EARL OF PERTH: I do not think we need go into further argument on this point. They have to take an equity interest in the venture and its fortunes. Lord Hastings made one or two points which I thought I might possibly answer later, because I have not received notice of the details. It is, of course, of great interest to hear certain comments of his which come first hand. He made a suggestion that there may be co-operation of a kind between the Corporation and Colonial Development and Welfare, by which the Colonial Development and Welfare met the Corporation and then the Corporation carried on. I think that that is a dangerous concept, because it certainly sounds to me like some form of hidden subsidy.
The noble Earl, Lord Lucan, referred again to the question of the borrowing powers of the Corporation and just where they stand. I do not think there is any point in going further into that matter, because, as has already been announced, more money will shortly be forthcoming for the Corporation. I am sorry if the noble Earl feels that I was unfair in certain respects in my quotations from the Labour Party pamphlet. I will only say that I shall be happy to leave the record to speak for itself. In relation to the international agencies, I may say that

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I was not running them down; I was merely saying that it seemed to me a curious thing—and I will repeat this—that the pamphlet goes into considerable detail about the activities of international agencies but makes no mention at all of the activities of the Colonial Service or Oversea Service in regard to what it has done here.
My Lords, this has been a most valuable debate. We have had many valuable suggestions, all of which will be noted and, in certain cases, I am sure, acted upon. I hope and believe that many of the misunderstandings which have arisen—such as the charges that Lord Ogmore mentioned in the Report—have been cleared up. What is interesting to me is not the past but the future, and I can assure noble Lords that our aim is smooth working with the Colonial Development Corporation, which I know is their aim, too. We have heard that the Colonies are to have more money; but we have also heard that the Corporation is not to have an expansion of its activities in the independent Commonwealth beyond what has already been announced—that is to say, in one or two of the independent countries it will now be able to carry on what it has already begun, but it will not take on new projects. I will not go further into the reasons for this decision. My noble friend Lord Home has touched on them, and the matter will be further developed in the White Paper. All I will say is that we have to consider the broad policy and the facts and realities of our economic position; and it is that, and no doctrinaire judgment one way or the other, which has convinced us that the proper rôle for the Corporation is colonial development, and only in the most limited sphere, where it has already started, work in the independent Commonwealth.
7.40 p.m.
LORD OGMORE: My Lords, I thank all noble Lords who have contributed to this debate. I felt, and still feel, that
it was necessary, to have this debate. This is a Report laid before Parliament which contains very severe charges, and it was necessary that Parliament should debate them. I want to thank the Ministers also for the care they have given to their replies; I shall say something about the contents in a moment, but they have been careful in giving the House all the information the Government wish it to have. I am particularly grateful to the noble Earl, Lord Home, for giving us a preview of the White Paper. We cannot say very much about it because we have not seen the actual text and have not heard the contents, but he has given us some indication of what they are likely to be. I should like to join with other noble Lords in congratulating the noble Lord, Lord Shepherd, on a very interesting and informative maiden speech: we shall hope often to hear him make a contribution in our discussions.
I was glad to receive confirmation that there was no personal feeling or animus in this matter between the Secretary of State and the noble Lord, Lord Reith, in spite of what one might have thought to the contrary, in view of the situation which has arisen over the Report; but I accept the statement made by the noble Earl, Lord Perth. One can only assume that the reason for the Government's attitude is a doctrinaire one. As my noble friend Lord Lucan has said, we on this side are dissatisfied with the Government's reply. We feel that it is evasive, that both the noble Earl, Lord Home, and the noble Earl, Lord Perth, have been full of specious promises of which they have been unable to give any details—and it is actual, definite detailed promises that we require. In those circumstances, as we are dissatisfied, I must ask your Lordships to divide on my Resolution.
On Question, Whether the said Resolution shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 41.

CONTENTS

Attlee, E.

Burden, L. [Teller.]

Quibell, L.

Lucan, E. [Teller.]

Crook, L.

Reith, L.

Haden-Guest, L.

Shepherd, L.

Alexander of Hillsborough, V.

Lawson, L.

Sinha, L.

Stansgate, V.

Mathers, L.

Winster, L.

Milverton, L.

Wise, L.

Archibald, L.

Ogmore, L.

NOT-CONTENTS

Kilmuir, V (L. Chancellor.)

Swinton, E.

Hastings, L.

Hawke, L.

Lansdowne, M.

Colville of Culross, V.

Howard of Glossop, L.

Stonehaven, V.

Lloyd, L.

Buckinghamshire, E.

Luke, L.

Dundee, E.

Ashbourne, L.

Merrivale, L.

Fortescue, E. [Teller.]

Bennett of Edgbaston, L.

Mills, L.

Glasgow, E.

Birdwood, L.

Mowbray and Stourton, L.

Gosford, E.

Chesham, L.

Remnant, L.

Grey, E.

Conesford, L.

Rockley, L.

Howe, E.

Congleton, L.

St. Oswald, L.

Morley, E.

Digby, L.

Strathclyde, L.

Onslow, E. [Teller.]

Dovercourt, L.

Strathcona and Mount Royal, L.

Perth, E.

Fairfax of Cameron, L.

Tweedsmuir, L.

St. Aldwyn, E.

Grantchester, L.

Waleran, L.

Resolved in the negative, and Resolution disagreed to accordingly.

BARRY CORPORATION BILL
Reported from the Select Committee, with Amendments.
DARTFORD TUNNEL BILL
Reported from the Select Committee, with Amendments.
WORKINGTON HARBOUR AND DOCK (TRANSFER) BILL
The Queen's consent signified, and Bill reported, with Amendments.

WHITSTABLE HARBOUR BILL
Reported, with Amendments.
House adjourned at ten minutes before eight o'clock.