Sitting of 13 May 1959

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GLASGOW CORPORATION ORDER CONFIRMATION (No. 2) BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  WIRELESS AND TELEVISION

    Interference, High Wycombe
    Mr. John Hallasked the Postmaster-General when he expects to be able to eliminate the interference in television reception suffered by the residents of Green Street, High Wycombe.
    The Postmaster-General (Mr. Ernest Marples): We have made some progress to that end, but unfortunately, the complete elimination of the interference is not yet in sight. I can assure my hon. Friend that we are not sparing our efforts to deal with this very difficult technical problem, and I should like to take this opportunity to express my appreciation of the help we have received from the manufacturers and users of the offending machines.
    Mr. Hall: Whilst the television owners in the Green Street area of High Wycombe are very grateful to my right hon. Friend for the efforts made by his Ministry to overcome this problem in co-operation with the firm concerned, is he aware that for some considerable time they have been unable to receive television programmes up to 10 o'clock at night? Therefore, as they have paid for something which they have not received for a long time, is my right hon. Friend prepared to make them a refund of part of their licence fee?
    Mr. Marples: Generous as I am by nature, I could not agree to the last part of my hon. Friend's supplementary question. I can assure him that we are making great efforts and that the firm concerned is really helping, but the difficulty is caused by radio frequency heating machines, which are universal in the furniture industry. We hope to overcome it, but whether we shall is another matter.

    Warrenpoint, Kilkeel and Annalongy
    Captain Orrasked the Postmaster-General whether he is aware that holders of radio and television licences in the Warrenpoint, Kilkeel and Annalongy areas of County Down are experiencing poor reception; and what plans the British Broadcasting Corporation have for improving their services.
    Mr. Marples: Suitable receiving aerials are essential to get the best results in this area. With these the Home Service and the Light Programme on medium and long waves should generally be satisfactory, but reception of the V.H.F. sound service and of B.B.C. television will unfortunately be variable because of the screening effect of the Mountains of Mourne. The B.B.C. tells me it regrets that there is nothing it can do at present to improve reception. It will continue to keep the needs of the area in mind.
    Captain Orr: Is my right hon. Friend aware that this is another case of people paying licence fees for very little, that the reception is really quite deplorable and that there is now no reason at all why the B.B.C. should not proceed with one of its smaller satellite transmitters to serve this area?
    Mr. Marples: The B.B.C. has a fairly large programme of satellite transmitters and no doubt it will have the needs of this area in mind. At the moment, however, it is a difficult technical problem because of these mountains about which we heard so much in N.A.A.F.I. concerts during the war.

  POST OFFICE

    Counter Service (Advisory Committee)
    Mr. Patrick Maitlandasked the Postmaster-General what measures he now proposes to ensure courtesy and efficiency at post office counters.
    Mr. Marples: As a first step I propose to set up a small committee to advise me whether conditions and procedures at Crown Office counters are the best that can be devised to ensure the efficient, courteous and economical transaction of public business. Both staff and customers will be represented on it, as well as the Ministry of Pensions and National Insurance, which has the greatest share of our agency services to other Departments.
    The committee will be authorised to employ industrial consultants and I have in mind to publish its report. I shall then ask a panel of my Advisory Council to give me its views as to what action I should take in the light of the report, and I shall probably invite one or two individuals with outstanding qualifications and experience in the field of customer relations to join the panel for this purpose.
    Mr. Maitland: Will my right hon. Friend make sure that the investigation takes account of the situation arising out of queues in Post Offices, particularly of those people who queue for motor car licences early in the year and those who queue for the payment of pensions and other Welfare State services over the counter?
    Mr. Marples: Certainly I will. That is exactly one of the problems which I had in mind when deciding to appoint this committee.
    Mr. Ness Edwards: Will the right hon. Gentleman also take into account the views and advice of the regional advisory committees in view of the fact that the problems may be different in the provinces from the very large towns?
    Mr. Marples: The chairman of the committee is one of the regional directors.

    Staff (Interchanges)
    Mr. Templeasked the Postmaster-General what further developments there have been in his scheme of interchange of staff between the Post Office and industrial concerns.
    Mr. Marples: Two Post Office men, an administrator and an engineer, have now taken up temporary appointments at I.C.I. Limited and two I.C.I. men have come to the Post Office. The exchange is expected to last for about a year and will, I trust, achieve the same success as has
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    so far attended the interchange of staff between the Post Office and Unilever Ltd. which commenced earlier this year. I am indebted to the board of I.C.I. Limited for its co-operation in making this further experiment possible.
    Mr. Temple: Is my right hon. Friend aware that his statement will give widespread satisfaction, and will he take all possible steps to maintain this sphere of co-operation between the Post Office and private industry?
    Mr. Marples: I think it is a good idea because these large firms in private industry are the best customers of the Post Office. If they send some of their men to the Post Office they can have experience of how we work, and vice versa. I am sure that it can do nothing but good.
    Mr. Emrys Hughes: In view of the fact that the Co-operative movement has just as much experience as the I.C.I., will the right hon. Gentleman co-operate with the co-operators?
    Mr. Marples: Not in view of the report of the right hon. Gentleman the Leader of the Opposition.

    Vans (Parking)
    Mr. E. Johnsonasked the Postmaster-General if he is aware that "No Waiting or Loading" signs in streets in the London, W.1 area are sometimes ignored by drivers of Post Office vans; and if he will take steps to ensure that drivers employed by his Department adhere rigidly to these regulations.
    Mr. Marples: Post Office vehicles are permitted to wait in restricted streets under specified circumstances. I am not aware that Post Office drivers are abusing the regulations, but I should be happy to inquire into any case that my hon. Friend cares to bring to my notice.
    Mr. Johnson: Will my right hon. Friend be good enough to instruct drivers to be especially careful in some of the very narrow streets in that part of London where the whole flow of traffic is sometimes held up? I quite appreciate their difficulties, but perhaps they might be a little more careful.
    Mr. Marples: I can assure my hon. Friend and the whole House that it is becoming a nightmare in the West End

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    of London to deliver and collect mails on time, largely because of the waiting cars. The task of the Post Office drivers is made very difficult. The regulations allow Post Office vehicles to wait when mail is being delivered or collected. If my hon. Friend wishes, I will send him a copy of the regulations. I think he will find that we do not abuse them in any way.
    Mr. Ness Edwards: Does the Minister appreciate that these drivers have a difficult enough job without being harassed in this House?
    Mr. Marples: I do not think they are harassed in the House. I am quite certain that they have an extremely difficult job, and some of the head postmasters in the West End of London have an even more difficult job to get the mail through on time.

    Robberies
    Mr. Liptonasked the Postmaster-General how many actual and attempted robberies of post offices have taken place during the past year; and how much was stolen.
    Mr. Marples: In 1958-59 there were 28 robberies and 29 attempted robberies. The amount stolen was £7,290.
    Mr. Lipton: Does the right hon. Gentleman agree that these figures are rather disturbing? In order to provide better protection, could not some alarm bell system be provided at all post offices to deter some of the bandits and provide a little more protection for these hardworking public servants?
    Mr. Marples: I do not think that the figures themselves are alarming. The counter transactions are £5,000 million a year, and the losses have been £7,290. Even so, any loss is naturally a source of disquiet. We have a bandit alarm which we are now extending, especially in London, because the risk of attack in the provinces is only about one-tenth of that in London. We are, therefore, equipping offices there first with a new type of bandit alarm which can be operated along the length of the counter.
    Mr. Lipton: At all London post offices?
    Mr. Marples: No; we are attending to the worst districts. As the hon. Gentle
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    man knows, some districts in London are worse than others, and it is in the worst districts first that we are giving post offices the benefit of this new system.
    Mr. C. R. Hobson: Can the right hon. Gentleman break down the figures he has just given to distinguish between Crown post offices and ordinary sub-post office agencies?
    Mr. Marples: Not without notice.

  TELEPHONE SERVICE

    Lanarkshire
    Mr. Patrick Maitlandasked the Postmaster-General how many telephone subscribers were among the more than 70 families which have moved from the village of Douglas, in the county of Lanark, since 1st January, 1959.
    Mr. Marples: So far as I know, none. Only one residence telephone has been given up since 1st January, 1959, and I understand that the previous customer is still living in Douglas.
    Mr. Maitland: I thank my right hon. Friend for that Answer, but will he try to accommodate incoming key industrial workers who may come to take some of the subsidised houses, of which more than 50 are now vacant, should they need telephones to assist them in their industrial work?
    Mr. Marples: We will do our best. At this particular exchange, the capacity is 150 lines, 117 of which are working. There are eight outstanding applications. There is thus a spare margin of 25 lines, so we shall be able to cope with any applications which are made.
    Mr. Patrick Maitlandasked the Postmaster-General if he will state the present total capacity of the Douglas telephone exchange; and how many lines he expects will be vacated during the next six months.
    Mr. Marples: The present capacity is 150 lines. One hundred and seventeen lines are in use, this being one more than a year ago. Since 1st January, 1959, eight new applications have been received, and one line has been given up. I cannot anticipate how the position will change in the next six months.
    Mr. Maitland: Has my right hon. Friend any view about the number of telephone lines now used by Douglas Castle colliery, which is to be closed down, thus making the lines vacant? How many will be available for incoming industry as a result of this closure?
    Mr. Marples: I cannot answer without notice. Quite apart from that, however, we have enough lines, so I am quite satisfied.

    Subscriber Trunk Dialling, Bristol
    Mr. Robert Cookeasked the Postmaster-General to what extent the new system of subscriber trunk dialling at Bristol is being used; what is the general reaction to it; and if he will make a statement.
    Mr. Marples: Bristol Central subscribers are now dialling themselves 97 per cent. of their trunk calls to the towns accessible by subscriber trunk dialling, which include about half the telephones in the country, and are making 40 per cent. more calls to these places than they did before.
    Trunk calls are usually shorter now, and with the new tariff this means better value for money. So, too, with local calls, where 77 per cent, of those made by Brstol subscribers now last less than three minutes and are charged at 2d. instead of 3d., as previously. Our customers seem pleased with the service, and I am grateful for their co-operation in making it a success.
    Mr. Cooke: I thank my right hon. Friend for his encouraging reply. Will he note that his good report is confirmed by the Bristol Chamber of Commerce and other responsible local bodies?
    Mr. Marples: We sent out a questionnaire, and we have received 1,600 replies, nearly all of which have been favourable. When we have analysed them, I propose to give the House some more information about what the telephone users think.
    Mr. C. R. Hobson: Can the Postmaster-General tell the House when he proposes to extend the Bristol system, in view of the fact that the Bristol people, while they welcome it, are at a distinct financial advantage compared with people in the rest of the country?
    Mr. Marples: The programme is set out in the last White Paper. If the hon. Gentleman reads Appendix A or Appendix B of that, he will see the whole programme set out there. It is put on a rather rough basis, but at any rate it will be in that order. Perhaps the bon. Gentleman would care to look at it.
    Mr. Ross: Will the Postmaster-General now extend the system to Kilmarnock, where we still have the manual exchange system and not the automatic system even for local calls?
    Mr. Marples: I will certainly look at the position in Kilmarnock, which is a most important place.
    Mr. Ross: Hear, hear.

  ROYAL AIR FORCE

    Missile Bases
    Mr. Stonehouseasked the Secretary of State for Air which missile bases were officially visited by Senator Symington of the United States of America during his recent tour of Great Britain.
    The Secretary of State for Air (Mr. George Ward): The Senator visited a missile site near Feltwell.
    Mr. Stonehouse: In what capacity did the Senator make the visit, and will facilities be open to Members of the House?
    Mr. Ward: The Senator made the visit as a distinguished American politician. I should welcome visits from hon. Members of the House.
    Mr. Stonehouseasked the Secretary of State for Air how many missile bases are up to operational standards.
    Mr. Ward: A number of sites have been completed, but it would not be in the public interest to give figures. As regards the missiles themselves, the position remains as described by my hon. Friend the Under-Secretary of State on 22nd April.
    Mr. Stonehouse: Is the right hon. Gentleman aware of the statement made by Senator Symington when he returned to the United States to the effect that none of the missile bases in Britain was up to operational standards? What has he done to check the accuracy of this statement?
    Mr. Ward: The House has been told many times that Thor missiles at present in this country are used for training and will not become operational until after the successful completion of all the trials going on at Cape Canaveral.
    Mr. Shinwell: Are we to understand from the right hon. Gentleman's reply that Senator Symington has received information about missile bases which is not available to hon. Members?
    Mr. Ward: No, Sir. I have just said that if hon. Members would like to visit one of these missile bases I shall be delighted to show it to them.
    Mr. Shinwell: The right hon. Gentleman just said that, in the public interest, he could not disclose the information. It now transpires that Senator Symington has the information. Why should Americans be given information denied to us?
    Mr. Ward: All I said was that it would not be in the public interest to disclose how many bases had been completed. That is quite a different matter.
    Mr. de Freitas: Will the Secretary of Stale make it quite clear that any hon. Member of the House who visits one of these stations—they are R.A.F. stations, not United States stations—will be given all the information which was given to Senator Symington when he recently visited this one?
    Mr. Ward: I am not sure exactly what information was given to him, but I can assure hon. Members that I shall not deny them any information which I think would be in the national interest; but, obviously, there must be some security.
    Mr. Stonehouseasked the Secretary of State for Air what representations have been received by Her Majesty's Government from the United States Government about the inadequacy of missile bases established in Great Britain.
    Mr. Ward: None, Sir. The United States Secretary of the Air Force has, in fact, expressed his satisfaction with what the two Air Forces have accomplished.
    Mr. Stonehouse: Will the Secretary of State check on what information was made available to Senator Symington and make it available in the Library of the House, and will he say to what extent the United States authorities are responsible for these establishments? In view
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    of the present international situation, would it not be advisable to postpone their development?
    Mr. Ward: The United States authorities are responsible for the provision of the missiles themselves and for the training of our personnel. We are responsible for the building of the sites.
    Mr. de Freitas: Do not these Questions and Answers and the contradictory statements coming out of Washington by civilians and Service men emphasise once again how undesirable it was for the Government to make an agreement with the United States about these missiles, which brought the Royal Air Force into the party political battles in the United States? Is it not a most regrettable result of this Government agreement that the efficiency of R.A.F. officers and men has been called in question in the United States and that they have been put in a very embarrassing position?
    Mr. Ward: I do not think that the conflict of opinion in the United States is any worse than the conflict of opinion which takes place between the hon. Gentleman and myself across the Floor of this House, and if he is worried about the Air Force view of this matter perhaps he would think about that himself.

    Horsham St. Faith's Station
    Sir F. Medlicottasked the Secretary of State for Air how soon he anticipates being able to make a decision on the future róle of Horsham St. Faith's Royal Air Force Station, so that the arrangements concerning the provision of alternative routes to and from Norwich can be decided on.
    Mr. Ward: We hope to put firm proposals to the highway authority very shortly.
    Sir F. Medlicott: Is my right hon. Friend aware that some of the roads leading into Norwich have been closed for more than twenty years without any satisfactory alternatives being provided and that this announcement today will be very warmly welcomed throughout the county?

    Knechtsand Island (Incident)
    Mr. de Freitasasked the Secretary of State for Air whether he will now make a statement on the representations made

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    to the Mayor of Hamburg on the recent incident concerning Knechtsand Island, North Germany.
    Mr. Ward: Representations were made to the Mayor of Hamburg by H.M. Consul-General last week.
    Mr. de Freitas: Since the Mayor of Hamburg is a most respected man and normally very reasonable, can the Secretary of State say whether he has yet had any expression of regret from the Mayor for his very inaccurate and rather wild statement?
    Mr. Ward: No, Sir.

    H-Bombs (Targets)
    Mr. Emrys Hughesasked the Secretary of State for Air if he will state the nature of the agreement that has been arrived at with the United States Air Force as to which targets will be attacked with hydrogen bombs in the event of war.
    Mr. Ward: It would clearly not be in the public interest to give information about targets.
    Mr. Hughes: Is the Secretary of State aware that considerable alarm has been displayed in this country owing to statements made in the Press, including a reputable Conservative paper, the Scotsman, which on 8th May said that Britain and the United States have agreed which targets should be attacked with H-bombs in the event of war, and which goes on to say that we have been allocated targets but that we have not enough H-bombs for that? Is not this provocative? Why are the Americans dictating policy which may mean suicide for this country?
    Mr. Ward: While I fully share the hon. Member's respect for the Scotsman, I am sure he will not expect me to comment on newspaper reports.

    University of the Air
    Mr. de Freitasasked the Secretary of State for Air what effect the opening of the University of the Air is expected to have on the recruiting of aircrew for the Royal Air Force.
    Mr. Ward: The opening of the College cannot reduce the appeal of the Royal Air Force for men who wish to combine flying with the wide experience that Service life provides. These are the men we wish to attract.

  SHIPPING

    Fishing Vessels (Navigational Aids)
    Mr. Hector Hughesasked the Minister of Transport and Civil Aviation how many and what proportion of ships in the British fishing fleets are and are not, respectively, fitted with the British Decca system of navigational aids; and what steps he is taking to ensure that new ships and also coal-burning ships converted into oil-burning ships are so equipped.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Hay): I am advised that some 900 fishing vessels are so equipped. This represents a high proportion of those vessels which have electric power available and which do their fishing within the coverage of existing Decca chains. Use of the equipment is not compulsory and we do not intend to make it so.
    Mr. Hughes: Is it not an anomaly that any shipowners can be found who fail to use this protection against loss and damage, and will the Minister inquire into this anomaly with a view to taking steps by regulation or otherwise to see that the minority who do not use it are obliged to use it in future?
    Mr. Hay: We have to keep the matter in perspective. There are approximately 9,500 British registered fishing vessels, of which about 2,100 are of 40 ft. or more. It is obviously only in the larger size vessels that this aid, which is extremely valuable, would be of use. It is, perhaps, worth noting that grants and loans are available from the White Fish Authority for the installation of generators in fishing vessels to enable them to make use of the Decca receiver.

    Earnings
    Mr. Awberyasked the Minister of Transport and Civil Aviation what was the total contribution made by British shipping, both dry cargo ships and oil tankers, for each of the past five years, to the invisible exports of the United Kingdom; and what official action is being taken to develop and encourage this industry.
    Mr. Hay: It is estimated that the United Kingdom dry cargo shipping industry made net contributions to the

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    United Kingdom balance of payments of £210 million in 1954, £240 million in 1955, £280 million in 1956 and £300 million in 1957. The provisional estimate for 1958 is £260 million. Similar estimates are not available for oil tankers. It is the Government's policy to encourage the expansion of world trade upon which the prosperity of British shipping depends.
    Mr. Awbery: Is the Minister aware that this is a very substantial contribution to the country's revenue but that there are obstacles in the way of this industry developing? Is he aware that hon. Members have expressed in the House their dissatisfaction with the help given by the State? Will he take steps to overcome the difficulties in the way of development of the industry?
    Mr. Hay: There are a number of difficulties affecting the industry which are not within our power to deal with. There are, for example, the trading practices of some of the maritime nations, as the House very well knows. We are doing what we can in conjunction with other maritime nations in Europe to investigate these to see whether some international agreement cannot be reached.

    Roker Volunteer Life Brigade (Rockets)
    Mr. Willeyasked the Minister of Transport and Civil Aviation on what grounds he has decided that the Roker Volunteer Life Brigade shall not be allowed to use rescue rockets for drills.
    Mr. Hay: There has been a delay in the supply of rescue rockets for the use of Her Majesty's Coastguard and the Life Saving Brigades and Companies, but further supplies are expected in July. This has made it prudent to stop practice firings at drills for the time being. Existing stocks are ample for operational needs.
    Mr. Willey: I am much obliged to the hon. Gentleman for that reply. Is he aware that his Department apparently has caused the mistaken view to be taken that this has been due to economy? Is he aware that the explanation could well serve a useful purpose in ensuring that the initiative and public spirit of these volunteers are not discouraged?
    Mr. Hay: I welcome the opportunity of paying tribute to the volunteers to whom the hon. Member refers and of
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    saying that the last batch in supply was found to be faulty, which was the reason for this temporary breakdown. As I have said, by July we hope that things will be back to normal.

    Merchant Ships (Replacement)
    Mr. Rankinasked the Minister of Transport and Civil Aviation what steps he proposes to take in order to secure agreement among shipowners in regard to a policy for replacing certain existing merchant ships; and if he will make a statement.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): The replacement of merchant ships is primarily a matter for their owners. Where the Government is asked to take special action in the matter, I shall naturally keep in close touch with the industry.
    Mr. Rankin: Has the right hon. Gentleman been in consultation at all with his hon. Friend the Civil Lord of the Admiralty, with whom I pressed this matter? I was referred to the right hon. Gentleman to pursue it. Can he say whether or not some policy is being devised for the replacement of existing ships, or will he consider it, as the United Kingdom shipbuilding industry is now in a most serious state with regard to new orders? Will he think about the matter?
    Mr. Watkinson: I have several meetings this week with the Chamber of Shipping which are concerned with, for example, these international arrangements which we and other European nations think are very harmful to the shipping industry as a whole. It is in that sort of way that I hope we shall be able to help.
    Dame Irene Ward: Does my right hon. Friend think that when he receives proposals from the Chamber of Shipping, and if he finds himself in agreement with them, he will be able to get support from the Chancellor of the Exchequer to do what is right by our industry?
    Mr. Watkinson: I was not referring to subsidies.
    Dame Irene Ward: Nor was I.
    Mr. Watkinson: I was thinking of trying to improve the trading arrangements around the world so as to enable British shipowners to get more business.
    Mr. Peyton: Even if the shipping industry is unable to put forward an agreed set of proposals, does not my right hon. Friend think that it is incumbent upon the Government to take such steps as they can to ensure that when the present serious recession declines the country will be in possession of a fast, modern, powerful and economic merchant fleet? Is this not of first importance to the country as a whole?
    Mr. Watkinson: I do not disagree with anything that my hon. Friend has said, but the first problems with which we have to try to deal are those which are best summarised in the terms "flag of convenience" and "flag discrimination". It is those things which militate against the future development of the British shipping industry. It is to those things that I am giving my attention in co-operation with the Chamber of Shipping, and we hope soon to make some powerful representations to the American Government on this matter.

  CIVIL AVIATION

    Belfast Airport
    Mr. Knox Cunninghamasked the Minister of Transport and Civil Aviation if he will state the result of the study undertaken jointly by his Department and that of the Secretary of State for Air into the future use of the Royal Air Force station at Aldergrove, County Antrim; and whether he will make a statement as to the future of Belfast Airport.
    Mr. Hay: My right hon. Friend expects to receive the report on the study very shortly. I am not therefore in a position to make a statement today.
    Mr. Knox Cunningham: Could my hon. Friend say, when work is started to transfer Belfast Airport to Alder-grove, how long it will take? Will he bear very seriously in mind the fear among the present employees of any redundancy arising out of such transfer?
    Mr. Hay: Yes. If we do decide, in the light of this report, to develop Alder-grove in place of Nutt's Corner it should take, I think, about two to three years before it can be completed. I will certainly keep in mind the point which my
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    hon. and learned Friend made about employment, about which he asked a Question some time ago.

    Helicopter Stations
    Mr. Awberyasked the Minister of Transport and Civil Aviation if, in view of the rapid development of air transport and helicopter services, he will take steps to develop helicopter stations near large cities, or give powers to local authorities to develop them where they think it desirable in the interests of the city.
    Mr. Hay: My right hon. Friend is watching with the greatest interest the development of the helicopter, but the local authorities are generally in the best position to provide helicopter stations near large cities. They already have the necessary powers, and I am glad that many have, with the Ministry's advice, already earmarked sites.
    Mr. Awbery: Is the hon. Gentleman aware that the experiments which have been made with helicopters have all proved very successful and that some local authorities already have aerodromes and that local authorities want to develop these aerodromes but cannot do anything without assistance and encouragement from the State? Would the hon. Gentleman take the matter up with the Treasury with a view to getting assistance for local authorities to develop aerodromes?
    Mr. Hay: We have given local authorities every encouragement and advice we possibly can. We published a pamphlet in 1956 on the planning of air stations for single-engine helicopters, and we have given further advice to 119 local authorities, including Bristol Corporation. I do not think it would be proper for me in answer to this Question to say that we would be willing to ask the Treasury or anyone else to make grants available, because this matter is still very much in the experimental stage.
    Mr. Farey-Jones: Could my hon. Friend state quite clearly whether his Ministry would be prepared to accept any proposition by private interests to develop the use of helicopters throughout Britain, or is the future restricted to the national undertakings?
    Mr. Hay: No. On the contrary, there is already one helicopter station, which I had the pleasure of opening a few days ago in London, which is operated by a private firm. There is nothing whatever to stop a private firm opening a helicopter station if it wishes, provided it can obtain the necessary planning permission, but our view is that this is a matter which, broadly, should be left to local authorities.
    Mr. Beswick: Is the Minister aware that what local authorities want to know, when they are contemplating providing helicopter stations, is what the likely helicopter services are going to be? Does he share the optimism of my hon. Friend the Member for Bristol, Central (Mr. Awbery), who refers to the "rapid development of helicopter services"? Is he aware that it is now eight years since I had the privilege of inaugurating the first service between London and Birmingham? What advice has he given to local authorities about the likely outcome of inter-city services during the next ten years?
    Mr. Hay: I think the hon. Gentleman knows that, quite apart from promotional or experimental schemes, helicopter services are just not economic and will not be till we get the bigger machines, like the Rotodyne, in service. We have to wait till that time comes. When it does, we shall be willing to consider what help we can give in developing the service.
    Mr. Woodburn: Will the hon. Gentleman remember that areas where helicopters could be most serviceable are in the Highlands of Scotland, where transport by any other means is not very easy? Can he see any objection now to helicopters flying across water, in view of the fact that it seems to have been disposed of, as we read in the Press about air-sea rescue services and so on? Yet there seems to be a barrier to using helicopters to fly passengers across narrow waterways.
    Mr. Hay: No, There is no barrier. The main trouble at the moment is that a helicopter service would not pay if it were based on the single-engine helicopter, since the sort of prices which would have to be charged for carriage would be so high that the ordinary traveller could not be expected to pay it. We have to wait
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    till the bigger helicopters come into service, for they will be more economic. We can then look at the Highlands and Islands, and so on..

    Republic of Ireland (Reciprocal Flights)
    Mr. N. Pannellasked the Minister of Transport and Civil Aviation (1) if he will investigate the question of Aer Lingus flights originating in the Republic of Ireland being permitted to uplift passengers from the United Kingdom and transport them to the Continent, when private operators have been refused permission to operate services to transport British passengers over similar routes;
    (2) if he will consult with the Government of the Republic of Ireland regarding permission for private operators in the United Kingdom to operate reciprocal flights to the Republic of Ireland.
    Mr. Hay: Our agreements with the Irish Republican authorities already provide for flights between our two countries and beyond on a broad basis of reciprocity. If my hon. Friend has any particular case in mind where he considers the arrangements are not working satisfactorily and he will send me details, I shall be glad to investigate the matter.
    Mr. Pannell: Is my hon. Friend aware that on the continental flights from Ireland Aer Lingus actually uplifts more passengers from the United Kingdom than it takes on board in Ireland? In those circumstances, is it not absurd to deny to private operators the right to transport those passengers from the United Kingdom to the Continent over similar routes?
    Mr. Hay: Without notice, I could not comment on the figures mentioned by my hon. Friend, but, as I have explained, we have this agreement with the Irish authorities. It provides for reciprocal treatment, but if it happens that geography comes into it to some extent I am afraid that that is one of the consequences of geography itself. However, I am quite satisfied that the Irish Republic and Aer Lingus do not get any tremendous advantage out of this, because British airlines can operate in Ireland and do so.
    Mr. Lipton: A very good impromptu answer.

    Edinburgh and Glasgow Airports
    Mr. Hector Hughesasked the Minister of Transport and Civil Aviation if he will specify the nature and number of the complaints he has received, and from whom they came, about the loss and inconvenience caused to travellers to and from the north-east of Scotland to London by the unsuitability of the airports at Edinburgh and Glasgow, which involve travellers in delay waiting for connections; and if he will specify the suggestions he has received from such travellers and from experts to resolve these complaints by obviating the delay.
    Mr. Hay: As I informed the hon. and learned Member on 6th May, we are not aware of any long delays or of any unsuitability of the facilities at these airports which might tend to create delays in this service. We have received no complaints or suggestions on the subject.
    Mr. Hughes: Does the hon. Gentleman not realise that this is a long-standing grievance and an interference with the keeping of appointments in London and with the fulfilment of contracts? Will he look into this and see that business is properly served by obviating the delay which undoubtedly exists?
    Mr. Hay: I find it difficult to follow the hon. and learned Member's supplementary question yin view of the Question he has asked about whether we have had complaints about the loss and inconvenience caused to travellers through the unsuitability of the airports involving travellers in delay. I can answer only for airports. If the hon. and learned Gentleman is complaining about schedules operated by B.E.A., I cannot answer be-ruse, as he knows, that is a matter of the day-to-day working of British European Airways.

    Captain Thain
    Mr. Remnantasked the Minister of Transport and Civil Aviation how the independent reviewing body into Captain Thain's case will be constituted; what will be its terms of reference; and who will be members of it.
    Mr. Watkinson: I have in mind that the reviewing body should consist of a Queen's Counsel; one person with appropriate scientific qualifications and a third person with flying experience.
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    Their task will be to consider the representations made by Captain Thain, and their precise terms of reference are now under consideration. Before finalising the arrangements for this independent review, I am waiting to know what action the German authorities propose to take on the further evidence by Captain Thain which has been submitted to them.
    Mr. Remnant: Can my right hon. Friend say whether the inquiry will be held in public, or that at least a report will be published at the end of it? Will he also say that, pending the result of the report of the inquiry, his letter of 12th March, threatening to suspend the licence on renewal, can be considered as withdrawn?
    Mr. Watkinson: The present position is that I do not propose to take any further action until we see whether the German authorities will agree to review this case. Obviously, if they should care to make any moves then it would be very much in Captain Thain's interest that no further action should be taken by my Ministry until we know whether or not the Germans are willing to change their views. As to the question of what we should do if we hold an inquiry, I will certainly study carefully what my hon. Friend has said. As to the letter to Captain Thain, that was not a threat to withdraw his licence. It was, I think, a very necessary warning so that he could take the action which he is now taking, that he should raise any matters in his defence if he thought there were any, so that my Ministry might consider them.
    Mr. Beswick: I am sure that those in the House who have followed this case will be satisfied with the course of action which the Minister now proposes to take. In view of the fact that this is the first inquiry his Department has made into the accident, does he not think that the letter which he sent to this pilot was premature and that it has prejudiced the pilot's career? What justification was there for sending that letter to him and to his employers prior to an inquiry being made by his Department?
    Mr. Watkinson: The answer to the first part of the question is that I do not think it has prejudiced Captain Thain's career. As the hon. Gentleman knows, his employers, British European Airways

    1237
    have taken no action in this matter. Secondly, I thought it right and in his interests that he should have had the earliest possible warning that my Ministry might well consider the question of his licence. I think that has been in his interests, because it has enabled him to raise these other matters on which it is at least possible that the German inquiry will be re-opened.

    Unscheduled Stops (Disembarkation)
    Mr. Rankinasked the Minister of Transport and Civil Aviation under what circumstances he permits passengers to disembark from an aircraft when it touches down at an airport other than its scheduled destination.
    Mr. Hay: Provided a foreign aircraft enjoys traffic rights in the United Kingdom on the service in question, passengers are allowed to disembark at any point to which the aircraft is diverted. Foreign aircraft without traffic rights in the United Kingdom are allowed to disembark passengers where the aircraft is unable to proceed with its journey, or where exceptional hardship would otherwise be caused to the passengers.
    Mr. Rankin: Yes, Sir, but could the hon. Gentleman say something about our own aircraft, those belonging to B.O.A.C.? Is he aware that on a recent flight across the North Atlantic the chairman and secretary of the Scottish Council of Development and Industry were unable to land at Prestwick as it was not the scheduled destination but had to travel on to London and then go back to Glasgow by train? Why was that so?
    Mr. Hay: It was because the gentlemen concerned chose to travel by the Canadian Pacific Airways flight Vancouver-Amsterdam, which does not provide for anything other than a technical stop at Prestwick. Normally, it goes straight through, and since that line does not enjoy the right to set down and pick up passengers in the United Kingdom on that route it was natural that the passengers should have expected to go on to Amsterdam and return to London—in fact, many people do that.

    Overhaul and Maintenance (Standards)
    Mr. Beswickasked the Minister of Transport and Civil Aviation what steps
    1238
    are taken by his Department to ensure that companies granted a licence to carry out aircraft overhaul and maintenance continue to observe the technical standards required.
    Mr. Watkinson: Organisations carrying out overhauls, repairs, replacements and modifications of civil aircraft are approved for these purposes on behalf of my Department by the Air Registration Board who regularly supervise them to ensure that proper technical standards are maintained.
    Operators' maintenance organisations are not at present required to be so approved, but approval by the Board of the maintenance schedules for each type of aircraft is required. Compliance with these schedules must be certified by appropriately licensed aircraft maintenance engineers.
    Mr. Beswick: Is the right hon. Gentleman aware that the impression created in the country now is that, while he is very quick off the mark to challenge the right of a pilot to hold a licence, he seems reluctant to take action in certain cases affecting companies charged with the responsibility for maintenance? In the light of recent incidents and criticism that has been made in public, can he say whether the inspection either by or on behalf of the A.R.B. into the maintenance schedules is carried out at sufficiently regular intervals?
    Mr. Watkinson: If the hon. Gentleman is referring to a case which has recently been in the public notice, I certainly am not prepared to comment on it until I have received a report of the inquiry. As to the general issue which the hon. Gentleman has raised, I do not think that is so at all. My judgment is that, in general, these inspections of the approved firms and the general review of the schedules is carried out very strictly by the A.R.B.

  ROADS

    Wall By-Pass
    Mr. Snowasked the Minister of Transport and Civil Aviation whether he is aware of the continued anxiety of the public at the delay in starting the construction of the by-pass at Wall,

    1239
    Staffordshire; what reply he intends sending to the Lichfield Rural District Council in reply to their letter of 24th April; and what progress has been made concerning the undertaking he gave to the hon. Member for Lichfield and Tamworth on 18th February, 1959.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Richard Nugent): The necessary Order establishing the route for the Wall by-pass scheme will soon be made and the Staffordshire County Council, as our agent authority, will then he invited to prepare the scheme to the contract letting stage. The date when constructional work can be started will depend on the funds available and the time it takes to acquire the necessary land. I cannot be precise at this stage, but the scheme will be proceeded with as soon as practicable.
    Mr. Snow: Is the Joint Parliamentary Secretary aware that the answer sounds all right but that I hope that the delays which are implied in it will not be as disastrous as they sound? Is he aware that this matter has been the subject of Parliamentary Questions on several previous occasions? Does he not agree that his Department must look at this problem urgently? This is theoretically a main road and, by general consensus of local opinion, is at present regarded as extremely dangerous?
    Mr. Nugent: What I have said in the substantive reply is the fact. We wish to proceed with this matter as quickly as possible. The hon. Member will know that there was an objection, which we have been considering, to the draft line. We hope to be able to clear that in the course of the next few weeks. I rather hope that we might be making the order this month. It is our intention then to proceed with all speed with the preparatory stages of acquiring land. We fully realise how important it is to get all this done.

    Accidents
    Mr. G. Wilsonasked the Minister of Transport and Civil Aviation how many persons were killed and how many injured, respectively, in road accidents per thousand registered vehicles using the roads in the years 1938, 1948 and 1958, or the latest convenient year for which the figures are available.
    Mr. Nugent: The figures are 2.2 and 74.0 in 1938, 1.3 and 42.5 in 1948 and 0.8 and 39.2 in 1958.
    Mr. Wilson: Can my hon. Friend say whether, notwithstanding the still very high accident rate, these figures indicate there has been a progressive improvement in the standards of driving and also in the safety devices incorporated in the design of motor vehicles?
    Mr. Nugent: I think that they have some element of encouragement in them to the devoted band of people who do road safety work, but the total figures of killed and injured are so high, as my right hon. Friend has just said, that none of us has reason to be complacent.
    Mr. Popplewell: Would it not be better to give the actual figures in addition to percentages or rates per thousand? There has been such a big increase in the amount of traffic on the roads compared with 1938, that a better perspective might be provided if actual figures were given instead of a comparison based on percentages.
    Mr. Nugent: I have answered the Question on the Paper. If the hon. Member would like an answer to that point, perhaps he will table a Question.

    Double White Lines
    Mr. Gowerasked the Minister of Transport and Civil Aviation how many miles of roads in England and Wales, respectively, have double white lines; to what extent this system is to be extended; and if he will make a statement about the results of the experimental system to date.
    Mr. Watkinson: In England about 450 miles and in Wales 80 miles of road have been marked on the new system, which will be progressively extended to all trunk and classified roads over the next few years. There is evidence that the demonstration lengths, unsupported by penalties, have improved traffic behaviour; I am satisfied that the extension of the system, on a mandatory basis, will promote the smoother and safer movement of traffic.
    Mr. Gower: Has my right hon. Friend received representations as a result of any difficulties which have arisen so far from the experimental system
    Mr. Watkinson: No, Sir, none of a major nature.
    Viscount Hinchingbrooke: Is my right hon. Friend aware that on some roads the line painting is so divergent as to force a driver into the ditch in order to avoid breaking the law by crossing one of the lines? Will he look into that point?
    Mr. Watkinson: I will certainly look into any examples which my noble Friend can give me.
    Mr. Gowerasked the Minister of Transport and Civil Aviation what advice he has received on the new double white lines on roads in conditions of fog or very heavy rain; and what account his new regulations will take of difficulties which may arise in such conditions.
    Mr. Nugent: Special care is always necessary in conditions of fog or heavy rain, and in such conditions motorists will find the new double white lines at bends and elsewhere more helpful than the single existing lines.
    Mr. Gower: Yes, but is it proposed in suitable cases where the lines are on bends in roads to put double studs—cats' eyes—in case the ordinary white lines are not seen by the motorist?
    Mr. Nugent: I am not quite clear what my hon. Friend wants to know, but if his question is directed to cats' eyes, we intend to continue using them just as we do now, and the cats' eyes will be placed where there are double white lines—
    Mr. Gower: Double cats' eyes?
    Mr. Nugent: —in between the double white lines on the road, in a single line.
    Mr. Paget: Is there not a distinction between white lines which one must not cross and cats' eyes which one seeks to follow in thick weather, and ought not the cats' eyes to be put in two lines in the track where one is driving and not in the centre of the road?
    Mr. Nugent: We have considered that, but we think on the whole that it would be less confusing to have a single line of cat's eyes.

    Improvements, Rochester (Land)
    Mr. Bottomleyasked the Minister of Transport and Civil Aviation what caused the delay in acquiring the land required for the road improvements of the Strood High Street from Rochester bridge to the railway bridge on the London-Canterbury-Dover trunk A.2 road.
    Mr. Watkinson: Negotiations for the purchase of the land in this case have proved exceptionally difficult, and objections have been made to the draft compulsory purchase order. The scheme includes 21 plots of land of which 15 are business premises.
    Mr. Bottomley: Why is the Minister so unsympathetic to the traffic problems of the Medway towns? Is he aware that the fact is clearly established that the bypass road ought to have been started before any other road? Secondly, is he aware that when the Rochester City Council is trying to got land to ease the road problems in this area his Department, with another Government Department, is niggling over a small amount of money, causing delay and great consternation in the city?
    Mr. Watkinson: Perhaps I might ask: Why is the right hon. Gentleman so unsympathetic to the rights of private property holders who are affected by this scheme? I must say that people who have property—businesses, houses and farms—in the line of roads have every right to object and to have their objections heard, and I will not take any steps which will stand in their way.
    Mr. Bottomley: Is it not a fact that the only outstanding difficulty now is one which concerns the Minister and the district valuer, that it is over a petty amount and that if this could be settled the road could be constructed?
    Mr. Watkinson: A public inquiry has been arranged for 27th May, and so I should not comment further.

  TRANSPORT

    Road Safety (Slogans and Posters)
    Mr. Straussasked the Minister of Transport and Civil Aviation whether he will invite the Road Research Laboratory and the Royal Society for the Prevention of Accidents to initiate research into the value of different types of road safety slogans for display on wayside posters.
    Mr. Watkinson: The programme of the Road Research Laboratory is very full and research in this subject would necessarily be extensive,

    1243
    but the right hon. Member's suggestion will be borne in mind when additions to the programme are under consideration.
    Mr. Strauss: I am glad to hear that. Would the right hon. Gentleman not agree that the present type of platitudinous slogan which says "Good driving pays" is a complete waste of effort, time and money? Would he not also agree that the selection of posters of this sort should not be left to amateurs but should be decided upon by experts on the basis of research? In view of the fact that effective posters can play quite a big part in reducing the toll of road accidents, is it not worth while initiating at an early date proper research into this problem?
    Mr. Watkinson: The kind of poster used must be to some extent a matter of opinion, but I do not accept at all the right hon. Gentleman's aspersions on the present road safety programme, which, incidenally, is under the title "Be a better driver". I think that is a sensible appeal to thousands of new drivers coming on the roads. It is the view of experts, not amateurs, that if everybody became better drivers we should save many lives.
    Sir G. Nicholson: Would my right hon. Friend not agree that the psychological approach to the public on any matter is most appropriately dealt with by experts in psyhcological approaches, namely, advertising and publicity firms? What can the Road Research Laboratory or anybody else be but amateurs in this respect?
    Mr. Watkinson: I am willing, and the Department is willing, to accept help from anybody who can reduce some of the very tragic toll of life on the roads. The programme this year has been carefully conceived to appeal to drivers of motor vehicles, until July, when we propose to run again the theme of "Mind that child". I think that it is the right programme. Hon. Members will know that the local authorities are strongly supporting it, and perhaps I can persuade hon. Members to play their part too.

    Third-Party Insurance
    Mr. John Hallasked the Minister of Transport and Civil Aviation which categories of persons are not covered by
    1244
    compulsory third-party insurance to motor-car drivers.
    Mr. Nugent: Broadly speaking, under section 36 of the Road Traffic Act, 1930, third-party insurance is not compulsory in respect of persons in the employ of the owner or other user of a motor vehicle, or, with certain statutory exceptions, private passengers.
    Mr. Hall: Is my hon. Friend aware that this would seem to indicate that there is a gap in the existing legislation? Is it not a fact that passengers who are riding in a car, the driver of which is involved in an accident and held to be responsible, have no rights under third-party insurance and may, therefore, not be able to get compensation for injury? Should not that fact be made more widely known or an attempt made to cover it by legislation?
    Mr. Nugent: I think it is generally known. Consideration has been given as to whether or no that extension should be made, but the thought behind the present situation is that the passenger knowingly takes the risk of travelling in the car with the driver, whereas in the case of the individual who is injured on the road by a car driven into him it is fortuitous.

    Motor Cycles
    Mr. Gowerasked the Minister of Transport and Civil Aviation what was the total number of motor cycles, auto-cycles, motor scooters and similar vehicles which were licensed in the United Kingdom at the latest convenient date; what were the total numbers in 1949 and 1939, respectively; and what is his estimate of the number which will be licensed in 1969.
    Mr. Nugent: The number of motor cycles of all types licensed in Great Britain in the September quarter of 1958 was 1,475,101. Figures for 1939 are not available but the corresponding figures for 1938 and for 1949 were 443,651 and 634,536. If the number continues to increase at the rate of the years 1948 to 1958 there would be over 24 million by 1969.
    Mr. Gower: Might not these figures be taken as one of many signs of the very remarkable rise in the standard of living which has occurred during the lifetime of this Government?

  RAILWAYS

    Keighley and Oxenhope Line
    Mr. C. R. Hobsonasked the Minister of Transport and Civil Aviation when he expects to receive the report of the appropriate consultative committee regarding the proposed closing of the Keighley and Oxenhope branch line railway; and if he will make a statement.
    Mr. Nugent: I understand that no proposal for this line has yet been submitted to the Transport Users' Consultative Committee for the Yorkshire Area.
    Mr. Hobson: Will the hon. Gentleman bear in mind that the loss on this branch line is negligible, being in the region of £1,200 per annum, that economies have already been agreed between the staff which would avoid that loss, and that if this line is closed it will literally isolate parts of my constituency in heavy, snowy weather?
    Mr. Nugent: It is not for me to bear in mind that important information, but I am sure the Transport Commission will take note of what the hon. Gentleman has said.

    Accident, Slough
    Mr. Brockwayasked the Minister of Transport and Civil Aviation to make a statement on the railway accident at Slough on 1st May, 1959.
    Mr. Watkinson: At 7.25 p.m. on Friday, 1st May, the 1.5 p.m. express train from Pembroke Dock to Paddington was approaching Slough station at about 70 m.p.h. when one of the bogies near the middle of the train was derailed when it passed over a broken rail. The last six coaches were completely derailed about 300 yards further on and one turned over on its side. The coupling parted between the third and fourth coaches and the front portion ran forward for another half a mile until stopped by the vacuum brake which came on automatically as a result of the parting. I am glad to say that although the train was crowded there were very few casualties—six persons were taken to hospital with minor injuries and fifteen others suffered from slight cuts or shock. The injured passengers received prompt aid and the others were conveyed to Paddington in a relief train.
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    The permanent way was seriously damaged, but by 6 p.m. on Sunday, 3rd May, repairs were completed appointed the Chief Inspecting Officer of Railways to hold an inquiry, which he opened on Monday. His investigations are not yet complete, but his report will be published in due course.
    Mr. Brockway: While I thank the right hon. Gentleman for that very full statement, may I ask whether the inquiry which is taking place will be not merely into the causes of the accident but into the causes of the very happy event of so few casualties? Is it not the case that the fact that the train was equipped with buckeye couplings prevented the coaches from being scattered and turning over? If this is the case, will the right hon. Gentleman seek to extend throughout the whole of our railway system a device which prevents loss of life in this way?
    Mr. Watkinson: As the hon. Gentleman knows, my Chief Inspecting Officers of Railways have very wide terms of reference, and their reports can make recommendations to the Commission, and customarily do so. I do not think the hon. Gentleman is wrong in his estimate of what saved a great many lives. It shows how the railway modernisation plan may well save lives as well as improve the railway system.

    Branch Lines, Staffordshire
    Mr. Harold Daviesasked the Minister of Transport and Civil Aviation what reports he has had from the appropriate area consultative committee about the closing of branch railway lines serving Leek, Staffordshire; whether he is aware that the proposed closure of these lines will drastically curtail Leek's transport facilities; and whether he will make a statement.
    Mr. Nugent: I understand that since 1956 the British Transport Commission has put no proposals to the West Midland Transport Users' Consultative Committee for the closure of railway lines serving Leek.
    Mr. Davies: We are fully aware that the Leek-Churnet line is to be closed. Is the Minister aware that the very active town of Leek, with its important industries, is completely cut off by rail from Manchester, Derby, Stoke-on-Trent and Macclesfield? Is it not time that we looked into the whole purpose of the railway system? Ought not hon. Members

    1247
    on both sides of the House to ask themselves: is it to be a social service or must it all the time make a profit?
    Mr. Nugent: I explained in answer to a previous Question that these points are not for me to answer. I do not doubt that the British Transport Commission will take note of what the hon. Gentleman has had to say.
    Mr. Ernest Davies: Will the hon. Gentleman give an assurance that there has been no change in the procedure and that where it is proposed that a line shall be closed the matter is referred to the appropriate consultative committee? Is this not the second time today that lie has said that he is not aware of these proposals and that they have not been referred to the committee? Apparently there are proposals and these closures are taking place. Has there been any change in the procedure?
    Mr. Nugent: There has been no change in procedure. I do not doubt that there are many rumours when the B.T.C. is contemplating action of this kind, but neither in this case nor in the other have any proposals been put to the consultative committee.
    Mr. Popplewell: Is the Minister aware that the Government are entirely responsible for the British Transport Commission now running at a loss of about £90 million a year and that it is appalling that the Commission should have to close down branch lines and stations when they are showing a slight deficiency? Will he not have further consultations with his colleagues and with the Commission so that the people in the areas concerned can have a better deal than they are now having?
    Mr. Nugent: I do not for a minute accept the implications in the hon. Member's question. For one thing, but for the fact that the Government are financing the larger part of the £1,500 million modernisation scheme British Railways would not be running at all.

  HARWELL ATOMIC ENERGY RESEARCH ESTABLISHMENT (DOCUMENTS)
  Sir A. Hurdasked the Prime Minister if he has inquired into the circumstances in which documents relating to Harwell Atomic Energy Research Establishment, including one marked Confidential," were left in the drawers of furniture sold as Government surplus and discovered last week by the purchaser, Mr. Boxshall, of Pound Street, Newbury; and if he will make a statement on the security measures taken to ensure that all such papers no longer required are destroyed under proper supervision.
  The Paymaster-General (Mr. Reginald Maudling): I have been asked to reply.
  Comprehensive regulations are in force throughout the Atomic Energy Authority for the control of classified documents, and for their destruction under proper supervision as necessary. In the incident referred to by my hon. Friend the documents were all unclassified. One was still marked "Confidential", though it was in fact no longer in that category. The Authority is reviewing its procedures to prevent the recurrence of incidents of this kind.
  Sir A. Hurd: May we take it that any document which relates to secret establishments such as this one will be taken good care of and destroyed immediately there is no further use for it? Otherwise, are we to expect the Authority to set up as a kind of hidden treasure department to which people will pay high prices for its disused furniture in the hope of finding something in the drawers?
  Mr. Maudling: Though that might be tempting, I am sure the Authority will not do so.
  Mr. Gaitskell: Does the reply mean that it does not matter at all who saw the documents in question since the right hon. Gentleman said they were not classified? Does it mean that they were in no way secret?
  Mr. Maudling: It means precisely that.

PERSONAL STATEMENT
The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): With your permission, Mr. Speaker, and that of the House, I wish to make a short personal statement.
Yesterday, in reply to a supplementary to Question No. 37 put by my hon. Friend the Member for Ayrshire, Central (Mr. Nairn), in referring to appeals to the High Court of Justiciary in Scotland, I said:
"legal aid is available."—[OFFICIAL REPORT, 12th May, 1959; Vol. 605, c. 1037.]
To avoid misunderstanding, I wish to make it clear that legal aid under the Legal Aid (Scotland) Act, 1949, is not available in such cases. I should add, however, that many members of the legal profession are prepared, in suitable summary appeal cases, to give their services free of charge, or at a fee fitted to the pocket of the appellant.
I wish to apologise if I misled the House.

BALLOT FOR NOTICES OF MOTIONS
  Aged People
  Mr. S. 0. Davies: I beg to give notice, that on Friday, 5th June, 1959, I shall call attention to the serious plight of our aged people, and move a Resolution.

  Capitalism and Socialism
  Mr. Lipton: I beg to give notice, that on Friday, 5th June, 1959, I shall call
  1250
  attention to the defects in the capitalist system of society and to the benefits to be derived from the Socialist system, and move a Resolution.

  London (Transport Conditions)
  Mr. Skeffington: I beg to give notice, that on Friday, 5th June, 1959, I shall call attention to public transport conditions in London, and move a Resolution.
BILL PRESENTED
  COTTON INDUSTRY
  Bill to enable schemes made with a view to eliminating excess capacity in the cotton industry to provide for paying compensation for any such elimination and for raising the sums required for that and other purposes by levies on the industry; to enable the Board of Trade to make contributions towards any such compensation and to make grants for the re-equipment of the industry; and for purposes connected therewith, presented by Sir David Eccles; supported by Mr. kin Macleod, Mr. Erroll, and John Rodgers; read the First time; to be read a Second time tomorrow and to be printed. [Bill 106.]
BUSINESS OF THE HOUSE
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Heath.]

TELEVISION (LIMITATION OF ADVERTISING)
3.35 p.m.
Mr. Christopher Mayhew(Woolwich, East): I beg to move,
That leave be given to bring in a Bill to amend the Television Act, 1954, by prohibiting the broadcasting of advertisements for more than six minutes in any hour.
Some hon. Members may feel, and I know that many viewers do, that the figure of six minutes in the proposed Bill is rather high. All the evidence, including that of Gallup polls, shows that while a small number of viewers like the advertisements a very much larger number are annoyed by them. There is no doubt that the overwhelming majority of viewers feel that the amount of advertising today is wholly excessive.
Six minutes appears in the Bill because it is a step forward and because it is the figure which was mentioned by Government spokesmen during the proceedings on the Television Act as it passed through Parliament. On Second Reading, the then Home Secretary, now Lord Kilmuir, after explaining that this would be a decision for the I.T.A., said:
"…I ought not to prophesy…but the sort of thing I envisage—I may be wrong—is five or six minutes to an hour."—[OFFICIAL REPORT, 25th March, 1954; Vol. 525, c. 1447.]
The Assistant Postmaster-General at that time said:
"I have always envisaged that, so far as the spot advertisement is concerned, 10 per cent.—that is, six minutes an hour—would probably, or possibly, represent about what the Authority would regard as reasonable."—[OFFICIAL REPORT, 22nd June, 1954; Vol. 529, c. 245.]
Those statements were intended to reassure Parliament on that point. That is why they were made and they helped the passage of the Bill which was, at times, very difficult. Parliament undoubtedly felt—and it is a most reasonable interpretation—that what was meant was "six minutes in any hour", and this is what is included in my proposed Bill, which is based on a workable and easily understood principle and would still leave the programme contractors capable of making a huge profit.
We are now being told that the Government spokesmen at that time did not mean any of this, but meant an "average" of six minutes. If that is what
1252
they meant, it is a pity that they did not make it clear at the time. It might have had a considerable effect on the passage of the Bill. But let us accept the idea of an "average" and look more closely at precisely what it means. It might mean that viewers, on the average, would see six minutes' advertising in the hour; that is to say, 1 million viewers could be shown seven minutes in an hour if they were also shown only five minutes' advertising in another hour. Viewers would then be seeing an average of six minutes, advertising in the hour. If that is what was meant by the spokesmen, it is still a pity, but at least it is not an unreasonable idea.
But what we are getting today is something totally different from that. The programme contractors know that though they can make a good profit on that basis they can make a very much greater profit if they concentrate their advertising at peak hours. Thus, a formula has been evolved which says that six minutes is to be the average for the whole day, that is to say, nine minutes is all right between nine and ten in the evening if it is balanced out by only three minutes between nine to ten in the morning. The two are compounded and make equivalent to "an average of six minutes in the hour." It means, in effect, that programme contractors may broadcast much more than six minutes when people are watching, provided that they broadcast much less when they are not.
This, the I.T.A. and the Postmaster-General tell us, is what the intention of Parliament was. That seems to me to be nonsense. That was not the intention of Parliament. In fact, it is a fraud and a very profitable fraud, as I shall now show. I have had the aid of the statistical department of the Library and I have made a careful analysis of London broadcasting for the latest convenient week, 27th April to 3rd May. The Television Press Agency, which provides clear and detailed logs of the commercials in the programmes, assures me that that week is in every respect typical. It shows that in normal viewing time, between seven and ten, the maximum was nine minutes' advertising in the hour, while the average over the whole normal viewing time was seven and a half minutes.
Over the whole period of the evening from five o'clock to eleven o'clock, if we include the advertising magazines, the

1253
average was 8¼ minutes. On three occasions There were hours in which there were more than 20 minutes of advertising. On Wednesday, 29th April, the peak was reached with 21¾ minutes of advertising between ten and eleven o'clock in the evening. Ironically enough, and I cannot resist saying this, after 21¾ minutes of high-powered publicity, at eleven o'clock there was a personal appearance by Lord Montgomery of Alamein.
How much do the programme contractors gain by this, in my opinion fraudulent, formula? It is quite easy to work out a rough estimate. Again, with the assistance of the statistical department of the Library, I have worked out that by systematically exceeding an average of six minutes an hour between seven o'clock and ten o'clock one programme contractor alone, Associated Rediffusion, is making a fraction under £2 million a year. If one takes the whole period from five o'clock to eleven o'clock, and includes the advertising magazines, it is making £4 million a year. It must be surely about the most public piece of systematic looting in the history of the country.
Associated Rediffusion is now asking for another channel. It might be well advised to clean up its own affairs if it is to keep the channel that it has already. All the programme contractors, Granada, A.T.V., and T.W.W., are making huge sums by keeping programme time short and advertising time long. It might almost be said that financial success in programme contracting lies in contracting the programmes.
How does I.T.A. excuse all this? The Authority is, after all, responsible. It cannot admit what everyone knows, that the reason behind this is that the programme contractors make huge profits by concentrating their advertising at peak periods. It has to find some other reason for explaining the figures I have given. Perhaps I may read to the House the explanation given by the Director-General to my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) and myself. In an agreed minute of the meeting Sir Robert Fraser said:
"At the outset it seemed to the Authority that 10 per cent. of total time would be about right for advertisements, and the question then arose whether it should be spread evenly over
1254
the day, or related to the capacity of various types of programme to bear advertising. The Authority had decided on a policy of flexibility operated by reference to defined categories of programmes. It was very rare for advertising to exceed eight minutes in a clock hour. He asked Mr. Mayhew and Mr. Chapman whether it did not see sensible to let advertising time out over a day in this way. Mr. Mayhew asked whether Sir Robert was implying that the concentration of advertisements in the more profitable peak hours was simply a coincidence. Sir Robert Fraser agreed that, of course, the factors which determined so-called peak hours were often also factors which determined the capacity of particular programmes to bear advertising."
Shortly afterwards I received a letter from the Director-General in which he said:
"I do not wish at this stage to tinker with the record of our meeting on January 29th, but I see that, on one point, I expressed myself in so compressed a way as to be obscure—The point I was trying to express was this. Popular light entertainment programmes—are bound to attract 'peak' audiences. Such programmes are also able to bear more than an average amount of advertising without harm. On the other hand, programmes of serious discussions will, by and large, both attract smaller audiences and also be less able to bear advertising without harm."
The Postmaster-General has been more specific.
Mr. C. R. Hobson: Where is the right hon. Gentleman?
Mr. Mayhew: I notified the right hon. Gentleman that I was raising this matter. Defending the appearance of more than eight or nine minutes advertising in an hour, the Postmaster-General said, on 11th March, according to column 1239 of the OFFICIAL REPORT, that a lot depended on the nature of the programme, and so on.
But if it is true that it is the nature of a programme and not the time that it is shown that matters, surely the same type of programme should carry the same amount of advertising no matter when it was shown: but one has only to look at the log to see that this is totally untrue. There is nothing in it whatever. A light programme which appears at peak hours carries far more advertising than the same type of programme at off peak hours. Similarly, a serious programme at peak hours should carry less heavy a load than a light programme. In fact, however, serious programmes appearing at peak hours—they are very rare—carry just as much advertising as light programmes.

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I.T.A.'s defence is untrue and disingenuous. As usual, it is covering up for the programme contractors; and, as usual, the Postmaster-General is covering up for I.T.A.
My proposed Bill will put the whole matter straight. It is a twin Bill to the Television (Commercial Advertisements) Bill, which would abolish breaks in programmes and which was introduced a short time ago. That Bill has great support in the country. On the basis of a Gallup poll, we can calculate that it was supported by between 17 million and 18 million I.T.V. viewers. I believe that this Bill, if allowed to go forward, would be supported by at least as large a majority of the I.T.V. viewing public.
It will be opposed, however, by a very powerful vested interest. The programme contractors are not only powerful because of their wealth or their patronage, but because of their financial links with many newspapers in the country, and they also have friends opposite. The Bill may, of course, as the previous Bill did, pass unopposed at this stage and be obstructed at a later stage: but I think that my hon. Friends and I are agreed that the Bill is a just one, that it is widely supported and that if we cannot get it through this Parliament we will get it through the next one.
Question put and agreed to.
Bill ordered to be brought in by Mr. Mayhew, Mr. Herbert Morrison, Mr. Ness Edwards, Mr. Charles Hobson, Mr. Francis Noel-Baker, Mr. Wedgwood Benn, Mr. George Darling, and Mr. Chapman.

TELEVISION (LIMITATION OF ADVERTISING)
  TELEVISION (LIMITATION OF ADVERTISING)
  Bill to amend the Television Act, 1954, by prohibiting the broadcasting of advertisements for more than six minutes in any hour, presented accordingly and read the First time; to be read a Second time upon Friday and to be printed. [Bill 107.]
ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress, 12th May].
  [Sir CHARLES MACANDREW in the Chair]

  FINANCE BILL

    Clause 16.—(ALTERATIONS IN RELIEFS.)
    3.50 p.m.
    Mr. Douglas Houghton: I beg to move, in page 14, line 11, at the end to insert:
    (2) In section two hundred and sixteen of the Income Tax Act, 1952 (dependent relatives), references to seventy-five pounds shall be substituted for references to sixty pounds (the amount indicating the relief), wherever the Occur.
    I understand, Sir Charles, that it would be convenient with this Amendment to discuss the Amendment in page 14, line 27, at the end to insert:
    (4) In sections two hundred and fourteen and two hundred and fifteen of the Income Tax Act, 1952 (which refer respectively to a person taking charge of widower's or widow's children or acting as his or her housekeeper, and to a relative taking charge of an unmarried person's young brother or sister), for the references to sixty pounds (which indicate the amount of the relief in each case) there shall be substituted references to seventy-five pounds.
    We have now passed from indirect to direct taxation—from, "pay as you spend" to, "pay as you earn"—and other more painful forms of extraction. This is the first of a number of Amendments designed to improve personal reliefs. A number of Amendments on the Notice Paper in the names of my right hon. and hon. Friends and myself are designed to increase Income Tax allowances for certain personal circumstances. This Amendment deals with one of them, that relating to dependent relatives, and the associated Amendment relates to another, the housekeeping relief. Later, we shall consider some new Clauses which are designed, in some cases, to enlarge the scope of or relax the conditions relating to certain personal reliefs. There are also proposals for new personal reliefs. The Amendments and the new Clauses are part of our general approach to the tax reliefs in the Bill and by them we seek to redress the balance of reliefs between those who have much to gain from the reduction in the standard rate of tax and those in the lower Income Tax brackets

    1257
    who benefit little from these very large tax reductions.
    The Chancellor of the Exchequer, on several occasions, has justified concentrating practically the whole of the tax reliefs on reductions in the standard rate and the reduced rates of tax, to the exclusion of personal reliefs, on the ground that it is the turn of the standard rate—as if the standard rate were a petulant child tugging at the Chancellor's apron strings and demanding that it should have a turn. We believe that it is also the turn of those whose personal circumstances entitle them to some adjustment of their tax burden, and who should get more generous reliefs at a time when the Chancellor is able to introduce proposals for very large reductions in the standard rate and lower rates of tax.
    We know, of course, that the Chancellor can argue that Income Tax reliefs can go only to those who pay tax, and that those who pay most tax must inevitably benefit most when reliefs are given. We know, also, that it can be argued that those in the lower Income Tax brackets can benefit from the Purchase Tax reductions which we discussed yesterday. But we believe that it is out of balance to make such a big reduction in the rates of tax without, at the same time, adjusting the reliefs.
    Looking back, we find that the last time the standard rate of tax was reduced, in the Budget of April, 1955, the Lord Privy Seal, who was then the Chancellor, introduced reliefs in personal allowances as well as proposals to reduce the rates of tax. Although I quoted what he said in a speech which I made during the Second Reading debate on this Bill, I think it worth while to recall his words again today.
    The right hon. Gentleman said:
    "This reduction in the rates of tax "—
    that was a reduction of 6d. in the standard rate and 3d. in the reduced rates—
    "will bring relief to the individual taxpayer at all levels of income. But it will do nothing, of itself, to improve the points at which tax starts to be payable."—[OFFICIAL REPORT, 19th April, 1955; Vol. 540, c. 59.]
    The right hon. Gentleman therefore supplemented the remission in the reduced rates by reliefs on smaller incomes, and he increased the personal allowance for single and married persons by £20 and
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    £30 respectively though he did, at the same time, adjust the bands of the reduced rates of tax.
    The right hon. Gentleman also introduced the small incomes relief and increased the child relief. We find that in 1955, when the then Chancellor was proposing remissions of tax in respect of the standard rate amounting to £116 million, he proposed improvements in the single and married personal reliefs costing £17 million and an improvement in the child allowance costing £18 million. The introduction of the small income relief cost £750,000. When embarking on tax remissions on this scale that seems to us to be a better balance than is effected by the proposals of the Chancellor on this occasion. That is why we have put on the Notice Paper, in the form of Amendments and new Clauses, proposals which, taken together, seek to restore something of the balance which the lower income groups have lost by the proposed reduction of 9d. in the standard rate.
    The Chancellor will probably say, "Well, I am very sorry, but the money has gone."In a colloquial phrase, he may say," Search me!" Because, by the acceptance by the Committee last night of Clause 14, the reductions in the standard rate and in the reduced rates were approved. We may be challenged, as were some of my right hon. and hon. Friends yesterday, "If you propose further reliefs on this scale, where do you intend to get the money?" To that, we should answer that had we introduced a Finance Bill this year, our Measure would have been better balanced. It would have been different in construction. There would 'have been some general fundamental differences between the proposals of the Chancellor and those which we should have introduced in the same set of economic and financial conditions.
    Within the framework of this Bill we cannot give any precise answer to a question about where we should get the money. Moreover, this Committee has never accepted that doctrine as the basis for the discussion of Amendments to the Finance Bill. Had it done so, debates during the Committee stage would collapse and grievances would go unheard, because the answer, "I am unable to concede more tax reliefs on this occasion," would be conclusive, and bring effective discussion to an end.

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    We believe that even within the framework of the Chancellor's financial proposals there is still room for some, if not all, of the changes that we propose by this series of Amendments. We shall not be content with the sort of fulsome satisfaction which seemed to be expressed by hon. Members opposite when the Chancellor said he was prepared to allow a tractor with a produce box to wander 15 miles away from the farm instead of five; nor shall we be as excited as apparently were hon. Members opposite at the fact that a grit spreader and a snow plough can be given some concessions from the Excise Duty on vehicles.
    There is room within the framework of the Chancellor's financial proposals for some substantial concessions other than those which he made the other day. We certainly wish to press some of our Amendments upon the right hon. Gentleman.
    4.0 p.m.
    Sir Alexander Spearman: Has the hon. Gentleman ever formed an estimate of the approximate cost of his present proposals?
    Mr. Houghton: I shall be coming to that. I cannot keep within the rules of order and give the whole lot, so I hope that I may be permitted to make this general introductory statement that we are putting forward this series of proposals so that we need not explain them every time as we go along. This is part of a concerted drive to get more relief for people with smaller incomes, those upon whose shoulders Income Tax burdens bear most harshly, even though they are small taxpayers. After those remarks, I will come to the Amendment which I moved a few minutes ago.
    That Amendment relates to dependent relative relief, and the one which we are debating with it to housekeeper relief. I must try to keep these two matters in some sort of relationship. Although there is nothing necessarily linking dependent relative and housekeeper reliefs, in both cases they have been the same and when they have moved they have done so at the same time and by the same amount. That fact rather ties them together though, unhappily from the point of view of the taxpayers with housekeepers, the cost of higher relief for housekeepers is very much smaller than the cost of improved relief for dependent relatives.
    1260
    I will not go into the long history of these reliefs, because we discussed these matters last year. We had a short but interesting debate in June—as will be seen in the OFFICIAL REPORT for 17th June, 1958, beginning at col. 903—upon three associated Amendments, which included these two in relation to dependent relatives and housekeepers.
    The dependent relative relief was at £50 from 1948 to 1953, and then it was increased to £60. The housekeeper relief was at £50 from 1931 to 1953, when it was increased to £60. In 1953, when those two reliefs were improved by £10 each, the relief for a daughter maintained by an infirm taxpayer was increased from £25 to £40, though it must be admitted that that did not come about until my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) moved an Amendment to that effect. These three reliefs were those improved in 1953, and none others.
    In 1955, when the Chancellor of the day introduced a 6d. reduction in the standard rate of Income Tax and proposed improvements in personal reliefs, he left alone the housekeeper, dependent relative and daughter-maintained-by-infirm-taxpayer reliefs, but he did lift the single person's relief, as I have said, from £120 to £140, and the married man's personal relief from £210 to £240. He increased the child allowance from £85 to £100. The only change that he made in dependent relative relief was to lift the ceiling of income of the dependent relative for qualifying purposes, to take account of the increase in the level of the National Insurance retirement pension. I have mentioned those facts to show that not necessarily do all these reliefs move together. Some move together, but not all of them. The two which I am discussing now have moved together when they have moved at all.
    There was a time when much more interest was taken on the Government side of this Committee on those reliefs than appears to be the case today. I see the hon. Member for Portsmouth, Langstone (Mr. Stevens) present. I noticed that during the debate on the Finance Bill, 1951, he headed the list of Members who wished to improve housekeeper relief. There was also the present Paymaster-General and the present Minister of Housing and Local Government and

    1261
    Minister for Welsh Affairs, also seems to have done nothing more for taxpayers employing housekeepers than to put their rents up. There was Mr. Angus Maude, then Member for Ealing, South, and the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) and the hon. Member for Wokingham (Mr. Remnant), whom I saw in his place only a few minutes ago. It is true that they had to wait until 1953 to see a modest improvement in this relief, but I am sure that their interest in the housekeeper relief was not exhausted by that small reward after their strenuous efforts in 1951. Last year, all that the Financial Secretary to the Treasury had to say against these proposals was that they were costly. This year one might think that that objection to improving these reliefs could not be made, because the Chancellor has much more room to manoeuvre than he had a year ago.
    I see that there is support for this Amendment from a quite unexpected quarter, The Accountant, which had an article in its issue for 9th May headed, "Finance Bill reactions." Judging from the objectivity and anonymity of its reports of our debates, one could assume that The Accountant is run by the B.B.C. Only Ministers are identified in utterances on these occasions, apparently. I see that I am referred to as "an Opposition Member", and for the moment I must be content with that.
    Brigadier 0. L. Prior-Palmer: The hon. Member is an Opposition Member.
    Mr. Houghton: I am not saying that it is not true, but that it is not the whole truth. I do happen to have a name as well, and I do not see the slightest reason why it should not be used occasionally, especially when it is attached to something that the paper is going to support.
    Referring to something that I said during the Second Reading debate about the failure of the Chancellor to improve these reliefs, the housekeeper relief in particular, the comment of The Accountant is:
    "…this allowance seems to be very niggardly, compared with child allowance."
    For this small mercy I am truly grateful. It assists the Amendment that I am putting to the Committee.
    As the Financial Secretary to the Treasury pointed out last year, the depen
    1262
    dent relative relief is more costly to improve than is the housekeeper relief. To improve the housekeeper allowance as we now propose, from £60 to £75, would cost, he said, approximately £750,000 a year, and to improve the dependent relative allowance by an equivalent amount, from £60 to £75, would cost more than £6 million. The latter figure surprised me when the Financial Secretary gave it last year. My own estimate had been very much smaller than that, but I have not the slightest reason to think that my figure was right and that the Financial Secretary's figure was wrong.
    We should bear in mind in this connection an aspect of the dependent relative relief which makes for considerable distinction between some taxpayers and others. If right hon. and hon. Gentlemen on the Government benches had to give assistance to dependent relatives they would not be foolish enough to rely on dependent relative relief. Of course they would not. They would enter into a covenant, This is what the better-off taxpayers do. They enter into a covenant to pay any amount which may be within their means or suitable to their circumstances, for a period of more than six years. That would then, rank as a deduction from their own tax liability, and would be taxable income in the hands of the recipient, if the recipient were liable to tax at all.
    There are tens of thousands of these covenants. I wonder that there are not more of them. I hereby give free tax avoidance advice to anyone who cares to listen. The way to deal with this matter is to make out a covenant, if one has sufficient security of income and stability of employment and wishes to do it in the most beneficial way from one's own point of view. One cannot, of course, do it to a child of one's own; that is outside the scope of this idea of course, though one can, make a covenant in the interest of other children. I am dealing here solely with the question of covenants in favour of dependent relatives. How much tax avoidance by way of relief for covenants in this field there is I do not know, but this emphasises that the dependent relative relief is the poorer man's relief for aged parents and those incapacitated by old age or infirmity.
    I hope that the Financial Secretary will give us this afternoon something

    1263
    different from the explanation that he gave last time. He cannot say that it is too costly and that the Chancellor could not afford it this time. The only explanation he can give surely, is that. although it would have cost several millions of pounds, the Chancellor could well have afforded it, but he decided to do something else. He decided on that something else in the perfectly sincere belief, I have no doubt, that that would be the best for the economy, but the economy must also take account of social and fiscal justice at a time when very big shots in the arm are being given to companies, to those who pay substantially on the standard rate and who will benefit most from the reliefs that the Chancellor has given.
    It is not for me now to say how he should have reconstructed his proposals to enable this concession to be made. It would not need a very big reconstruction to make the concessions we are proposing and certainly less still to meet the proposal contained in the Amendment I have moved.
    Mr. Geoffrey Stevens: The hon. Gentleman for Sowerby (Mr. Houghton) has made, as he always does, a very agreeable and highly persuasive speech. It was also very skilful in that, within the framework of two very limited Amendments, he managed to carry out quite a comprehensive survey of personal allowances in Income Tax as a whole.
    I entirely agree with the hon. Member that the Opposition are in no way inhibited from discussing reliefs which cost a very great deal of money. Hon. Members opposite are fully entitled to do so, but it is a fact that the Chancellor has to count the cost and bear these things in mind in dealing with suggestions made in speeches, however agreeable they may be. I thought that two points of view did not come out very clearly from the speech of the hon. Member which, none the less, must be borne in mind.
    First, I think it is for consideration that in certain circumstances reliefs are better given in other forms of taxation than in Income Tax. The whole question of the balance between direct and indirect taxation requires very careful consideration. I think it is for argument that to take more people out of Income Tax
    1264
    altogether at this particular time is necessarily a desirable thing.
    There is quite a case for giving every person a vested interest in the standard rate of Income Tax. People do not notice the payment of Purchase Tax as they do reductions from wages by P.A.Y.E. and when the Income Tax bills come along. That is a point for consideration; and the second one, which is uppermost in my mind at present, came to me very strongly when the hon. Member was referring to certain Amendments which were put forward in 1951. The point which came to my mind immediately was that the time must come when, whatever the party political bias or allegiance of the Chancellor, the standard rate of Income Tax as such has got to be very seriously considered.
    4.15 p.m.
    That is particularly so after a world war in which the standard rate went up to heights which I do not think the Labour Party would ever wish to see maintained for long in peacetime. Fourteen years after the end of the war, the standard rate is 7s. 9d. in the £, despite the 9d. reduction that we shall soon see operative when the Finance Bill becomes law. It is perfectly true that a very large proportion of that reduction does not go direct to people who have dependent relatives and expenses of that sort, but a reduction in the standard rate benefits industry. To the extent that it encourages industry, commerce and enterprise, everybody—whether paying Income Tax or not, or having dependent relatives or not—incurs a considerable and obvious benefit.
    Despite the persuasiveness of the hon. Member's arguments, despite the line that I have taken on personal allowances before and shall do in future, I say that the judgment of my right hon. Friend on this occasion in concentrating in direct taxation on reduction of the standard rate was not only the right judgment but the only decision a responsible Chancellor of the Exchequer could this year have properly taken.
    Mr. John Cronin: I wish to make one or two brief points in support of the Amendment so ably moved by my hon. Friend the Member for Sowerby (MT. Houghton). There are certain arguments in favour of the Amendment in equity and there are social and economic ones.

    1265
    From the point of view of equity, there is no doubt that a dependent relative is a considerable burden. It seems unfortunate that the dependent relative allowance now compares so unfavourably with the wife or child allowance. A wife and children are normally a source of comfort and ratification to a taxpayer, yet. if he has the inconvenience of a dependent relative, his allowance is considerably less. It seems, also, that as there has been considerable inflation since the dependent relative allowance was increased in 1953, there is a strong argument for making the burden rather less than it is now.
    From a social point of view, I think that in this country we are rather unfortunate in that dependent relatives are not given quite the same family status as they have in other countries. There is a tendency for young people to try to avoid taking over personal charge of elderly dependent relatives. I come personally into contact with this quite a lot. For instance, one finds that where a dependent relative has been the subject of a major operation in hospital, and it has been necessary for him or her to have a few months care and attention afterwards in the home of the family, it is common for the family to reject the liability and not to take the relative. This is a frequent occurrence. It seems to be a symptom of the whale attitude of the country towards dependent relatives. On the Continent, dependent relatives have a much more recognised status in the family and people are much more prepared to take over their care.
    No one will suggest that a small increase in dependent relative allowance would revolutionise the system, but it would certainly be an additional inducement. There can be little doubt that the taxpayer would be more likely to do his family duties if there were an additional financial advantage. He certainly would not be deterred from doing so and there would be a marginal effect in swaying his decision.
    It is also very important from the point of view of the psychology of the dependent relatives. They can feel that they are less of a burden if the taxpayer is receiving more financial consideration for looking after them. There can also be no doubt that there will be a saving
    1266
    for the National Health Service if more dependent relatives are treated or looked after at home. Exactly the same argument applies to the finances of local authorities, which have often to provide shelter and accommodation for elderly people.
    From the point of view of the housekeeper allowance, the same arguments on equity apply with regard to the burden and unfavourable comparison with the married person's allowance and child allowance. It is a curious anomaly that when a man who has been enjoying a personal allowance as a married man becomes a widower, and has to find someone to look after his children, he is put at a considerable financial Income Tax disadvantage. That seems to be quite an unreasonable anomaly.
    From the social point of view, the housekeeper allowance exists, as its name implies, primarily for the benefit of children. As my hon. Friend the Member for Sowerby pointed out, the cost of this Amendment would be comparatively small. It would seem to be rather niggardly if the Chancellor rejected the Amendment, which will be of enormous benefit to so many children. I therefore trust that the Chancellor will, if possible, concede both the Amendments. There can be little excuse for his not conceding the Amendment with regard to the housekeeper allowance.
    The Financial Secretary to the Treasury (Mr. J. E. S. Simon): I had occasion on the Finance Bill last year and I have occasion again this year to say how valuable it always is to follow the hon. Gentleman the Member for Sowerby (Mr. Houghton), who is an acknowledged master of this branch of the law and of the practice in our fiscal system. I do not doubt that later I shall have occasion to thank him for setting out with great clarity not only the background to this Amendment, but of subsequent Amendments, and I should like to take this opportunity of reiterating what I have said before, so that I shall not embarrass him on subsequent Amendments by saying it again.
    The hon. Gentleman was followed by my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens), who is particularly adept in dealing with our fiscal system professionally, and who has shown over the years great interest in

    1267
    these problems of allowances. Then we had from the hon. Gentleman the Member for Loughborough (Mr. Cronin) his own very valuable experience, although his medical experience in this respect was rather different from the circumstances when he was indirectly medically responsible for my own health, as he may remember.
    I will deal, first, with the dependent relative allowance. The people who are the beneficiaries of this allowance have been dealt with quite favourably in recent years. As the hon. Gentleman the Member for Sowerby reminded us, this allowance and the housekeeper allowance were raised to £50 in 1943 and to £60 in 1953—percentage-wise quite a large increase. The matter does not end there because, as I ventured to point out on several occasions last year, the system of allowances is not really intended to compensate the taxpayer for the burden of the particular circumstances that are envisaged; on the contrary, as the Royal Commission pointed out, the part which these allowances play in the tax system is to take their place in the system of graduation in the tax burden. In a number of circumstances it is better to give assistance through the social services. Most of those who support dependent relatives have been greatly helped in recent years by successive increases in the retirement and widows' pensions. That has meant that the State is giving an increased contribution to the maintenance of their dependants.
    Then again, as the hon. Gentleman the Member for Sowerby so fairly reminded us, there have been successive increases in the limits of the dependent's income which disqualifies a person on whom he is dependent from benefiting from this relief. We have reached the position where an income of £195 can be exempted from tax. That is £60 in the hands of the claimant and £135 of the dependent's income. That compares with a figure, which I shall have to emphasise later, of £180 at which a single person begins to pay tax.
    As I have pointed out, the dependent relatives' allowance—this really takes up the point which the hon. Member for Loughborough made about the effect of the cost of living since the relief was last improved—is not intended, as the Royal Commission pointed out, to cover the full cost of maintaining a relative. Its purpose is to play a part in the system of
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    graduation. Therefore, to my mind, the hon. Member for Sowerby was quite right, at the very outset of his speech, in relating this Amendment to the rest of the series of Amendments which the Opposition, for the reasons which he gave, with perfect propriety in the circumstances, have put down.
    The two reliefs which we are discussing on this Amendment necessarily move together; they always have moved together and there is no reason for differentiating between them, but they must also be viewed in the wider system of reliefs and allowances. It is against that background that I venture to make my next point.
    At present, the full allowance of £60, as the Committee was reminded, is given for maintaining a dependent relative with an income not exceeding £135 a year, which, I think I am right in saying, was increased last year. There is also a tapering or marginal relief. If a relative's income exceeds £135, the allowance otherwise due to the claimant is cut down by £1 for each £1 of the increase, until the allowance runs out completely when the relative's income reaches £195. Thus the maximum amount of income which can be exempted from tax on account of a dependent relative in his own hands and the hands of the taxpayer who maintains him is now £195, that is, £60 plus £135. That is above the figure of £180 at which a single person pays tax.
    Mr. Houghton: The hon. and learned Gentleman will not, of course, have overlooked the age exemption for a person over 65, which gives total exemption from tax on an income up to £275 in the case of a single person and £440 in the case of a married couple.
    4.30 p.m.
    Mr. Simon: I have that in mind. The hon. Member is right to remind the Committee of that fact, but I think that the Committee has always regarded that relief as exceptional. The circumstances have been made exceptional for aged persons enjoying that relief. In this case it is a question of comparing two people of similar age, and it therefore seems to me that the time for improving this relief—I think I made this point last year—is when we are improving the personal reliefs generally and that it would be wrong to change the dependent relative allowance or the housekeeper allowance until

    1269
    we are ready to improve the personal allowances generally.
    I know that the hon. and learned Member for Kettering (Mr. Mitchison) last year stigmatised that argument as "centipede trouble", saying, "You must not move one leg forward until you are ready to move the other ninety-nine forward." Nevertheless, if it is right, as I am sure it is, that this allowance and the housekeeper allowance are designed to play their part in the system of graduation, then by and large they ought to be changed together.
    That brings me to the cost. The cost of the first Amendment is £5½ million in a full year. Last year, I gave the figure of £6 million. The difference is due to the reduction in the standard rate this year. The second Amendment, dealing with the housekeeper allowance, would cost about £750,000. Thus, a substantial sum of £6¼ million is at stake here. As I have said, however, one must consider the Amendments in the setting, which the hon. Member himself gave, of all the other allowances and, costing as best I can, it seems to me that the Amendments to the Clause which the Opposition have put down would cost £245¼ million at the 1959–60 rates and £2581 million at the 1958–59 rates. In other words, if we had not passed Clause 14, the cost would be considerably higher.
    It is right for the hon. Member to say that that factor does not prevent the Amendments from being tabled as a basis for discussion. I do not think it does. It seems to me that it is a different matter, however, when we come to a vote. It is right to put it down to say "This is what we should have done"; but when it comes to a vote the Committee is in a different position, because the Committee has passed Clause 14 and has done so not even by a vote but without a dissentient voice being raised. The reduction in the standard rate effected by that Clause involves £128 million in a full year. The Opposition, quite rightly, would not wish to stop there, and the provisions for the reduction must also be extended to the reduced rates. That adds another £101 million in a full year.
    Although we can have no possible complaint that this Amendment has been put down as a basis for discussion, I suggest that it would be irresponsible of the Committee to try to add to the reliefs
    1270
    —which have been effected by way of reduction in the standard rates—these very substantial reductions in taxation through improving the allowances.
    Both because of the cost and because of the reasons which I gave earlier, therefore, I cannot recommend the Committee to accept the Amendment. As my hon. Friend the Member for Langstone pointed out, my right hon. Friend thought it right this year to concentrate his reliefs on reduction of the standard rate. That has been approved by the Committee. Although the Opposition are entitled to have their point of view registered in the discussion, in my respectful submission the Committee ought to reject the Amendment.
    Mr. G. R. Mitchison: Apparently we are allowed to talk but not to vote. This seems to me to be turning the procedure of the Committee upside down.
    Of course, we should not have introduced the same Budget as that which the Chancellor has introduced and we have to look at the Clause in the light of what has been done. The Financial Secretary has justified it by graduation. As a Treasury poet put it, "Graduation is a lovely thing, God wot." I think that the hon. and learned Member pushed it so far, however, that he defeated his own ends. If graduation is to settle the matter and if this were the right relief when Income Tax was at a higher rate, now that the rate has been reduced this relief should be increased proportionately. If it were wrong previously, we have not heard that from the hon. and learned Gentleman. He gets up every year and, in the sacred name of proportion, defends that which was inconsistent the year before and no doubt will be inconsistent the following year.
    That kind of argument merely defeats itself. Graduation may justify many things, but not complete illogicality. Ought we not to consider the matter on its merits? The hon. and learned Member relied on a distinction between the relief given in some cases of old age and the dependent relief allowance. I have never understood the principles which govern the Income Tax Acts. Sometimes I wonder whether there are any. When I look at the dependent relief allowance I find that the very case which is dealt

    1271
    with is that of people incapacitated by old age or infirmity.
    If we say that we should give special treatment in relation to old age in one case, why do we not give it in the other? If we are to have a spot of graduation in the matter, it might be a good plan to get these two things a little more similar than they are at present.
    Mr. Simon: I am sure that the hon. and learned Member has the matter in mind, but for the sake of completeness I ought to say that the relief extends beyond that case to that of the taxpayer's or his wife's widowed mother, whatever her age or state of health.
    Mr. Mitchison: I have it well in mind. When I am told that we cannot give this relief when we are giving greater relief in other cases because those other cases are cases of old age, I am entitled to point out that this relief also includes cases of old age and incapacity from old age. I am not saying that it does not include other cases, too, but if it is right to give relief in relation to people who are incapacitated through old age, then if we are to stick to the present form of relief it must also extend to the other types of case which are classed with those in the dependent relief allowance. That means incapacity, infirmity, and various other cases. Unless we go into the question of whether the whole class needs amending —and we cannot do so at the moment—we are considering only the question of amount.
    I want to put forcibly to the Committee that what we are talking about is an increase in an amount between £20 and £25 at the standard rate by under £6. That is what it would be. We are discussing it in connection with a Budget which gives to every middle class taxpayer a relief considerably in excess of that. We are giving it in a Budget which leaves Surtax payers in the same position as they were in before. They therefore benefit from the reduction in the Income Tax rate, without any modification of Surtax. I am not discussing whether that is right or wrong, but that is the context in which we are considering this relief.
    We are told that, if we are to take that matter into account, we must for the moment leave the field of graduation and consider the merits. I am only too
    1272
    anxious to do so. When we come to the consideration of the merits, the Government's only answer is that these people have done quite well out of pension increases.
    On this side of the Committee we dispute that. We are well aware that those pension increases have come largely not from central funds, but from increases in stamps and various other matters. I will not go into that now. We cannot regard it as appropriate to defend a refusal to give an Income Tax concession in cases of this kind on the ground that the people concerned may have had some increase in what is, after all, a totally different field and is largely financed from other sources.
    We prefer to conclude that the Government deliberately prefer to give relief to the standard rate payer, however well off he may be, rather than to extend it, even by the comparatively small amount involved in the Amendment, to people who, on merit, have a far better claim.
    The hon. Member for Portsmouth, Langstone (Mr. Stevens) defends this by saying that we must at all costs support the interests of industry, commerce and enterprise. I agree entirely, but I have never understood the logic of the Income Tax Acts in matters of this kind. If a merchant or an industrialist incurs expenditure, he is allowed to deduct that in full before arriving at his profits or gains. On the other hand, if someone takes in a dependent relative, and thereby has to pay out a great deal more money than these allowances represent, he is not allowed the loss of his personal income which results from that. He is only given an allowance which, admittedly, does not meet the loss he thereby suffers.
    Mr. Stevens: Will not the hon. and learned Member for Kettering (Mr. Mitchison) agree that the savings from the incomes of companies are taxed at the full standard rate?
    Mr. Mitchison: What I am concerned with now is a deduction which is made on the grounds that the taxpayer, be he a company in the one case or an individual in the other, incurs an expense. There is not the least doubt that, in relation to these dependants, the individual incurs an expense which, admittedly, is far greater than any relief we can give

    1273
    him. Therefore, if we are to look at the question from that point of view, I fail completely to see the reason for not having a much larger scale of allowances than we have ever had.
    I return to what I said at the beginning. These are the really hard cases. If we do not give an adequate concession to these people, in many cases we may be denying them the opportunity of carrying out family duties which they wish to carry out. They should, on every ground of fairness and morality, have their relief increased, if the reliefs given to other people, companies or individuals, are being increased on the scale by which they are increased in the Budget.
    4.45 p.m.
    I agree with the hon. and learned Gentleman when he talks about graduation. It is a matter of graduation, but he is breaking away from the very principle he puts forward. He prefers to give advantages to those who do not
    stand in need of them so sorely as the people whom we are considering in the Clause. I cannot understand properly the principles of taxation. I cannot understand the motives which have led to some of the differences in taxation, particularly the point I have now been discussing. Most of all, I cannot understand the moral principles of a party which prefers to give such very considerable advantages to some people and, at the same time, denies this measure of relief to people who merit it far more. The only answer of hon. Members opposite is the thin and "phoney" plea for graduation, "They are doing well enough on pensions". Let hon. Members opposite try to live on pensions if that is what they think.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 198, Noes 237.

    Division No. 107.]

    AYES

    [4.47 p.m.

    Abse, Leo

    Ede, Rt. Hon. J. C.

    Jones, Jack (Rotherham)

    Ainsley, J. W.

    Edwards, Rt. Hon. John (Brighouse)

    Jones, J. Idwal (Wrexham)

    Albu, A. H.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Kenyon, C.

    Allaun, Frank (Salford, E.)

    Edwards, W. J. (Stepney)

    Key, Rt. Hon. C. W.

    Allen, Arthur (Bosworth)

    Evans, Albert (Islington, S.W.)

    King, Dr. H. M.

    Allen, Scholefield (Crewe)

    Fernyhough, E.

    Lawson, G. M.

    Awbery, S. S.

    Forman, J. C.

    Lee, Frederick (Newton)

    Bacon, Miss Alice

    Fraser, Thomas (Hamilton)

    Lee, Miss Jennie (Cannock)

    Balfour, A.

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

    Lewis, Arthur

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

    Gibson, C. W.

    Lipton, Marcus

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

    Gooch, E. G.

    Mahon, Dr. J. Dickson

    Benson, Sir George

    Gordon Walker, Rt. Hon. P. C.

    McAlister, Mrs. Mary

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

    Greenwood, Anthony

    MacColl, J. E.

    Blackburn, F.

    Grenfell, Rt. Hon. D. R.

    Mcinnes, J.

    Blenkinsop, A.

    Grey, C. F.

    McKay, John (Wallsend)

    Blyton, W. R.

    Griffiths, David (Rother Valley)

    McLeavy, Frank

    Boardman, H.

    Griffiths, Rt. Hon. James (Lianelly)

    MacPherson, Malcolm (Stirling)

    Bonham Carter, Mark

    Griffiths, William (Exchange)

    Mann, Mrs. Jean

    Bottnmley, Rt. Hon. A. G.

    Grimond, J.

    Marquand, Rt. Hon. H. A.

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

    Hale, Leslie

    Mason, Roy

    Bowen, E. R. (Cardigan)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mayhew, C. P.

    Bowles, F. G.

    Hamilton, W. W.

    Mitchison, G. R.

    Brockway, A. F.

    Hannan, W.

    Monslow, W.

    Broughton, Dr. A. D. D.

    Hastings, S.

    Moody, A. S.

    Brown, Thomas (Ince)

    Hayman, F. H.

    Morris, Percy (Swansea, W.)

    Burke, W. A.

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

    Mort, D. L.

    Burton, Miss F, E.

    Herbison, Miss M.

    Moss, R.

    Butler, Herbert (Hackney, C.)

    Hewitson, Capt. M.

    Moyle, A.

    Butler, Mrs. Joyce (Wood Green)

    Hobson, C. R. (Keighley)

    Mulley, F. W.

    Carmiohael, J.

    Holman, P.

    Neal, Harold (Bolsover)

    Castle, Mrs. B. A.

    Holmes, Horace

    Noel-Baker, Francis (Swindon)

    Champion, A. J.

    Holt, A. F.

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

    Chetwynd, G. R.

    Houghton, Douglas

    Oliver, G. H.

    Cliffe, Michael

    Hughes, Cledwyn (Anglesey)

    Oram, A. E.

    Coldrick, W.

    Hughes, Emrys (S. Ayrshire)

    Orbach, M.

    Collick, P. H. (Birkenhead)

    Hughes, Hector (Aberdeen, N.)

    Oswald, T.

    Corbet, Mrs. Freda

    Hunter, A. E.

    Owen, W. J.

    Cove, W. G.

    Hynd, H. (Accrington)

    Palmer, A. M. F

    Craddock, George (Bradford, S.)

    Hynd, J. B. (Attercliffe)

    Parker, J.

    Cronin, J. D.

    Irvine, A. J. (Edge Hill)

    Parkin, B. T.

    Grossman, R. H. S.

    Irving, Sydney (Dartford)

    Paton, John

    Cullen, Mrs. A.

    Isaacs, Rt. Hon.G. A.

    Pearson, A.

    Davies, Ernest (Enfield, E.)

    Janner, B.

    Peart, T. F.

    Davies, Stephen (Merthyr)

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

    Pentland, N.

    Deer, G.

    Jeger, George (Goole)

    Plummer, Sir Leslie

    Delargy, H. J.

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

    Popplewell, E.

    Diamond, John

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

    Prentice, R. E.

    Price, Philips (Gloucestershire, W.)

    Simmons, C. J. (Brierley Hill)

    Watkins, T. E.

    Probert, A. R.

    Slater, J. (Sedgefield)

    Weitzman, D.

    Purley, Cmdr. H.

    Snow, J. W.

    Wells, Percy (Faversham)

    Rankin, John

    Sorensen, R. W.

    Wells, William (Walsall, N.)

    Redhead, E. C.

    Soskice, Rt. Hon. Sir Frank

    Wheeldon, W. E.

    Reeves, J.

    Sparks, J. A.

    White, Henry (Derbyshire, N.E.)

    Reid, William

    Spriggs, Leslie

    Wilkins, W. A.

    Reynolds, G. W.

    Stewart, Michael (Fulham)

    Willey, Frederick

    Rhodes, H.

    Stones, W. (Consett)

    Williams, Rev. Llywelyn (Ab'tillery)

    Robens, Rt. Hon. A.

    Strauss, Rt. Hon. George (Vauxhall)

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

    Roberts, Albert (Normanton)

    Summerskill, Rt. Hon. E.

    Willis, Eustace (Edinburgh, E.)

    Roberts, Goronwy (Caernarvon)

    Sylvester, G. 0.

    Wilson, Rt. Hon. Harold (Huyton)

    Robinson, Kenneth (St. Pancras, N.)

    Taylor, Bernard (Mansfield)

    Winterbottom, Richard

    Rogers, George (Kensington, N.)

    Thomas, lorwerth (Rhondda, W.)

    Woodburn, Rt. Hon. A.

    Ross, William

    Thomson, George (Dundee, E.)

    Woof, R. E.

    Royle, C.

    Thornton, E.

    Yates, V. (Ladywood)

    Shinwell, Rt. Hon. E.

    Tomney, F.

    Zilliacus, K.

    Short, E. W.

    Viant, S. P.

    Silverman, Julius (Aston)

    Wade, D. W.

    TELLERS FOR THE AYES:

    Silverman, Sydney (Nelson)

    Warbey, W. N.

    Mr. John Taylor and Mr. J. T, Price

    NOES

    Agnew, Sir Peter

    Erroll, F. J.

    Lehurn, W. G.

    Aitken, W. T.

    Farey-Jones, F. W.

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

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

    Fell, A.

    Legh, Hon. Peter (Petersfield)

    Amery, Julian (Preston, N.)

    Finlay, Graeme

    Lindsay, Hon. James (Devon, N.)

    Amory, Rt. Hn. Heathcoat(Tiverton)

    Fisher, Nigel

    Lindsay, Martin (Solihull)

    Anstruther-Gray, Major Sir William

    Fletcher-Cooke, C.

    Linstead, Sir H. N.

    Arbuthnot, John

    Fort, R.

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

    Armstrong, C. W.

    Fraser, Hon. Hugh (Stone)

    Longden, Gilbert

    Ashton, H.

    Freeth, Denzil

    Loveys, Walter H.

    Atkins, H. E.

    Galbraith, Hon. T. G. D.

    Low, Rt. Hon. Sir Toby

    Baldock, Lt.-Cmdr. J. M.

    Gammans, Lady

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Baldwin, Sir Archer

    George, J. C. (Pollok)

    Lucas-Tooth, Sir Hugh

    Barber, Anthony

    Glover, D.

    Macdonald, Sir Peter

    Barlow, Sir John

    Glyn, Col. Richard H.

    McLaughlin, Mrs. P.

    Barter, John

    Godber, J. B.

    Maclean, Sir Fitzroy (Lancaster)

    Batsford, Brian

    Goodhart, Philip

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

    Baxter, Sir Beverley

    Gough, C. F. H.

    McMaster, S. R.

    Bearnish, Col. Tinton

    Gower, H. R.

    Macmillan, Rt. Hn. Harold(Bromley)

    Bell, Philip (Bolton, E.)

    Graham, Sir Fergus

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

    Bell, Ronald (Bucks, S.)

    Grant, Rt. Hon. W. (Woodside)

    Maitland, Hon. Patrick (Lanark)

    Bevins, J. R. (Toxteth)

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

    Markham, Major Sir Frank

    Biggs-Davison, J. A.

    Green, A.

    Marlowe, A. A. H.

    Birch, Rt. Hon. Nigel

    Gresham Cooke, R.

    Marples, Rt. Hon. A. E.

    Bishop, F. P.

    Grimston, Hon. John (St. Albans)

    Marshall, Douglas

    Black, Sir Cyril

    Grosvenor, Lt.-Col. R. G.

    Mathew, R.

    Body, R. F.

    Gurden, Harold

    Mawby, R. L.

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

    Hall, John (Wycombe)

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

    Boyle, Sir Edward

    Hare, Rt. Hon. J. H.

    Medlicott, Sir Frank

    Braine, B. R.

    Harris, Reader (Heston)

    Milligan, Rt. Hon. W. R.

    Brewis, John

    Harrison, A. B. C. (Maldon)

    Molson, Rt. Hon. Hugh

    Brooman-White, R. C.

    Harvey, John (Walthamstow, E.)

    Morrison, John (Salisbury)

    Browne, J. Nixon (Craigton)

    Heald, Rt. Hon. Sir Lionel

    Mott-Radclyffe, Sir Charles

    Burden, F. F. A.

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

    Nairn, D. L. S.

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

    Henderson, John (Cathcart)

    Heave, Airey

    Campbell, Sir David

    Henderson-Stewart, Sir James.

    Nicholls, Harmar

    Carr, Robert

    Hicks-Beach, Maj. W. W.

    Nicholson, Sir Godfrey (Farnham)

    Cary, Sir Robert

    Hill, Mrs. E. (Wythenshawe)

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

    Channon, H. P. G.

    Hill, John (S. Norfolk)

    Noble, Michael (Argyll)

    Chichester-Clark, R.

    Hinchingbrooke, Viscount

    Nugent, Richard

    Clarke, Brig. Terence (Portsmth, W.)

    Hirst, Geoffrey

    Oakshott, H. D.

    Cole, Norman

    Holland-Martin, C. J.

    Ormsby-Gore, Rt. Hon. W. D.

    Conant, Maj. Sir Roger

    Hornhy, R. P.

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

    Cooke, Robert

    Horobin, Sir Ian

    Osborne, C.

    Cordeaux, Lt.-Col. J. K.

    Horsbrugh, Rt. Hon. Dame Florence

    Page, R. G.

    Corfield, F. V.

    Howard, John (Test)

    Pannell, N. A. (Kirkdale)

    Craddock, Beresford (Spelthorne)

    Hughes Hallett, Vice-Admiral J.

    Partridge, E.

    Crosthwaite-Eyre, Col. 0. E.

    Hughes-Young, M. H. C.

    Peel, W. J.

    Crowder, Sir John (Finchley)

    Hurd, Sir Anthony

    Peyton, J. W. W.

    Crowder, Petre (Ruislip—Northwood)

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

    Pickthorn, Sir Kenneth

    Cunningham, Knox

    Hyde, Montgomery

    Pike, Miss Mervyn

    Currie, G. B. H.

    Hylton-Foster, Rt. Hon. Sir Harry

    Pilkington, Capt. R. A.

    Dance, J. C. G.

    Iremonger, T. L.

    Pitman, I. J.

    Davidson, Viscountess

    Jenkins, Robert (Dulwich)

    Pott, H. P.

    D'Avigdor-Goldsmid, Sir Henry

    Jennings, Sir Roland (Hallam)

    Powell, J. Enoch

    de Ferranti, Basil

    Johnson, Eric (Blackley)

    Price, David (Eastleigh)

    Dodds-Parker, A. D.

    Joseph, Sir Keith

    Prior-Palmer, Brig. 0. L.

    Doughty, C. J. A.

    Kerby, Capt. H. B.

    Ramsden, E.

    du Cann, E. D. L.

    Kerr, Sir Hamilton

    Rawlinson, Peter

    Duncan, Sir James

    Kirk, P. M.

    Redmayne, M.

    Eden, J. B. (Bournemouth, West)

    Lambton, Viscount

    Rees-Davies, W. R.

    Emmet, Hon. Mrs. Evelyn

    Lancaster, Col. C. G.

    Remnant, Hon. P.

    Errington, Sir Eric

    Langford-Holt, J. A.

    Renton, D. L. M.

    Leavey, J. A.

    1276

    1277

    Ridsdale, J. E.

    Studholme, Sir Henry

    Walker-Smith, Rt. Hon. Derek

    Robertson, Sir David

    Summers, Sir Spencer

    Wall, Patrick

    Robinson, Sir Roland (Blackpool, S.)

    Taylor, Sir Charles (Eastbourne)

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

    Roper, Sir Harold

    Taylor, William (Bradford, N.)

    Ward, Dame Irene (Tynemouth)

    Ropner, Col. Sir Leonard

    Teeling, W.

    Watkinson, Rt. Hon. Harold

    Russell, R. S.

    Temple, John M.

    Webbe, Sir H.

    Sharpies, R. C.

    Thomas, Leslie (Canterbury)

    Webster, David

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

    Thorneycroft, Rt. Hon. P.

    Whitelaw, W. S. I.

    Spearman, Sir Alexander

    Thornton-Kemsley, Sir Colin

    Williams, Paul (Sunderland, S.)

    Speir, R. M.

    Turner, H. F. L.

    Wills, Sir Gerald (Bridgwater)

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

    Turton, Rt. Hon. R. H.

    Wilson, Geoffrey (Truro)

    Stanley, Capt. Hon. Richard

    Tweedsrnuir, Lady

    Wood, Hon. R.

    Stevens, Geoffrey

    Vane, W. M. F.

    Woollam, John Victor

    Steward, Harold (Stockport, S.)

    Vaughan-Morgan, J. K.

    Yates, William (The Wrekin)

    Steward, Sir William (Woolwich, W.)

    Vickers, Miss Joan

    Stoddart-Scott, Col. Sir Malcolm

    Vesper, Rt. Hon. D. F.

    TELLERS FOR THE NOES:

    Storey, S.

    Wakefield, Edward (Derbyshire, W.)

    Colonel J. H. Harrison and

    Stuart, Rt. Hon. James (Moray)

    Wakefield, Sir Wavell (St. M'lehone)

    Mr. Bryan.

    Mr. Stevens: I beg to move, in page 14, line 15, to leave out "third" and to insert "next".
    I read subsection (2) of the Clause with great care and I saw the reference to the third £150. I spent some time diligently searching for the first £150 and the second £150. I was able to find only one, and I think that this must be a drafting error. The substitution of the word "next" for the word "third" would give the subsection the meaning which my right hon. Friend would like it to have.
    Mr. Simon: It seems to me that my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) has a good point. After being in trouble the other day for using the word "confidentiality", I hasten to put myself right with the Committee by accepting the Amendment.
    Mr. Harold Wilson: Will the hon. and learned Gentleman say how much the acceptance will cost the Exchequer?
    Amendment agreed to
    Mr. H. Wilson: I beg to move, in page 14, line 23, at the end to insert:
    "and for the words '£60', '£210' and '£360', in each place where they occur, there were substituted respectively the words '£100'. '£250' and £E400.'".
    I ought to begin by saying that the words used by my hon. Friend the Member for Sawerby (MT. Houghton) when moving the first Amendment we took this afternoon should be taken as governing this Amendment and most of the others that we have tabled.
    This is part of a series of Amendments which we feel would give a better way of disposing of this part of the Chancellor's surplus than some of the things he has done. We propose to restore the lowest band, the first band, at reduced rates of tax to £100, the figure at which it stood
    1278
    until 1955. It will be recalled that, in the 1955 Budget, which went through rather rapidly without the degree of constructive criticism which would normally be given—no one complains of that—the then Chancellor, the Lord Privy Seal, reduced this first band from £100 to £60. He took 6d. off the standard rate and 3d. off each of the reduced rates.
    The right hon. Gentleman said:
    "I want, therefore, to supplement the 3d. remission in the reduced rates by an improvement on the lines suggested by the Royal Commission. I have been impressed by the principles which lie behind its proposals for relief for the smaller incomes, and I therefore, propose, in addition, to exempt many of such incomes from all liability to tax by increasing the personal allowance—from £120 to £140 for a single person and from £210 to £240 for a married couple—while reducing the band of income taxable at the lowest rate from £100 to £60."
    In other words, this was a rather smart piece of work by the then Chancellor which went through, I think, without the degree of comment which, perhaps, it would have evoked at other times, because, having altered the personal allowances, he then, in effect, took the amount off the lowest band of tax instead of putting it right up through the system.
    The right hon. Gentleman went on to say:
    "By this means, I shall achieve, though in a simpler way, the object the Royal Commission had in mind in proposing its scheme for a minimum earned income relief"— [Of At. REPORT, 19th April, 1955; Vol. 540, c. 59.]
    5.0 p.m.
    Before the 1955 Budget the various bands of tax were as follows: the first one was £100 at 2s. 6d., the second £150 at 5s. and the next £150 at 7s., the standard rate then being 9s. After the April, 1955, Budget, the reduced rate bands became £60, £150 and £150, the rates being respectively 2s. 3d., 4s. 9d. and

    1279
    6s. 9d., and the standard rate being 8s. 6d. These bands have remained at this figure until this year, and so, indeed, have the rates. The Chancellor has proposed to take 6d. off each of the reduced rates, but, while there is this reduction of 6d. in the rates, the size or width of the band—it is a little difficult to choose the right metaphor—remains the same; that is to say, the standard rate becomes chargeable after the first £360 of taxable income, whereas up to 1955 the standard rate was only chargeable after the first £400 of taxable income.
    Our Amendment proposes to increase the amount at the lowest rate of tax from £60 to £100, and that works right through the system to the second and third bands, so that the standard rate will become payable after the first £400 of taxable income instead of £360, and by returning to this figure of £400 we are returning to the situation which obtained from the financial year 1952–53 up till the April, 1955 Budget.
    Obviously, the reason for proposing this is to redistribute the tax concessions much more heavily in favour of the taxpayers with smaller incomes. I do not want to weary the Committee with examples. No doubt the Financial Secretary will have been furnished with a list of examples. I only wish that he had been furnished with such a list to show to the Chancellor before the Chancellor took his Budget decisions.
    A married couple without children, on £600 a year—that is a fairly representative earning at the present time, though, of course, such a family is not representative in terms of absence of children—would gain about £5 13s. under the Chancellor's proposals for reduced rates, and that family would gain an additional £6 a year as a result of the Amendment which I am moving. It is clear that by this very small and simple change—indeed, by the restoration of something which the Lord Privy Seal upset in 1955 —in the case which I have mentioned, we have more than doubled the amount of tax relief which will be enjoyed under this present Budget. Anyone paying tax at the standard rate would get the maximum benefit under this Amendment of £12.
    We recognise the difficulties which have been put forward by the Financial Secre
    1280
    tary. We wish we had the amount of money to play with that the Chancellor has. It would have been possible to have done very many of the things proposed in these worth-while Amendments. We have made clear on a number of occasions that tax relief for companies and that sort of thing, even to the extent of the reduction in the standard rate, could have been far better and more fairly distributed among the population if the Chancellor had put through a number of reforms of the kind which we are moving this afternoon. This, however, is a very clear and simple one which would benefit millions of families and those whose needs are greatest. It is in that spirit that I move this Amendment.
    Mr. Simon: The right hon. Member for Huyton (Mr. H. Wilson) has explained the purpose of this Amendment and, indeed, how it operates. I can give very briefly, in consonance with his own speech, and I hope equally cogently, the reasons why my right hon. Friend cannot accept this Amendment.
    The first reason is that the Amendment gives no relief to those with the lowest taxable income. For example, it gives no relief to a married man with two children under 11 years of age living on earnings of less than £643 a year. The right hon. Gentleman gave an example, perfectly fairly, of a married couple without children having roughly the same average earnings, and he said that the benefit to them would be £6 a year. I think that shows the second disadvantage of this Amendment, namely, that it runs counter, as I understand it, to the argument of hon. Members opposite that the relief should be concentrated primarily on the married man with children; secondly, on the married man without children, and thirdly, on the single man. Indeed, my right hon. Friend was criticised in that the reduction in the standard rate that he has proposed and that the Committee has approved operates primarily or greatly to the advantage of the single man.
    Mr. H. Wilson: Of course, this argument is fair and is true related purely to this one Amendment. But, as the hon. and learned Gentleman will be aware, we are moving a succession of Amendments which will take full account of the point he has in mind. The earned income relief example will affect all families. We also have proposals relating to the child allowance.
    Mr. Simon: That is a perfectly fair point and it will have relevance when I come to consider the cost. It is right to point out that the argument which I have addressed applies solely to this Amendment, but, after all, it is to this Amendment that I am speaking at the moment.
    The Amendment taken by itself gives no relief to those with the lowest taxable incomes. It concentrates the greatest relief on the single man, secondly on the married man without children, and thirdly —again applying purely to this Amendment—the reduction in tax would be smallest to those liable only at the reduced rate and greatest to those liable at the standard rate.
    The right hon. Gentleman said that this was restoring the bands to where they stood in 1955. By itself, that is absolutely true. As he pointed out, my right hon. Friend the Lord Privy Seal did that as part of a larger operation whereby there were increases in the single and married personal allowances. The combined effect of those two things that he did was to raise the starting point of liability for tax, and to restrict the benefit in the main to those with the smallest incomes.
    The fact remains that the reduced rate structure today is considerably more favourable than it was in 1951. In 1951 the band of taxable income chargeable at the lowest rate was only £50 in width—if I may follow the right hon. Gentleman into his metaphors—and was charged at 3s. in the £. Today it is £60 in width and will be charged only at ls. 9d. in the £. The next band was £200 and was charged at 5s. 6d. in the £. Today, the middle band is £150, charged at 4s. 3d. in the £. Then, in 1951, one went direct into the standard rate, whereas today there is a third reduced band of £150. I say a third without prejudice to the Amendment which we have just accepted from my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens). The third reduced band of £150 is charged at 6s. 3d. in the £.
    In the end, this Amendment must be resisted on cost. By itself, it costs £124 million, and even taking that by itself, it would mean that the reductions which my right hen. Friend has proposed in the standard rate, and which have been accepted by the Committee, would have been limited to 3d. all round-3d. in the
    1282
    standard rate, and 3d. in the reduced rates. As the right hon. Gentleman perfectly fairly points out, to be equitable, this must be read in the context of his other proposals, and it means that there would have been no reduction in the standard or reduced rates at all, if the right hon. Gentleman's way of dealing with the sum that was remissible in direct taxation was accepted.
    Therefore, the Committee having accepted my right hon. Friend's proposals for reducing the standard rate, with its corollary that the reduced rates should also come down, it seems to me that the Committee is bound to reject this Amendment, and I so advise it.
    Mr. Houghton: It is a very hard job to reconstruct the whole Bill and the Budget in the course of a series of Amendments like this, and we make no complaint when the Financial Secretary to the Treasury does exactly what I said the Committee should do—put this Amendment in the context of the whole series. Otherwise, separately, they would not fully achieve the purpose we have in mind.
    What strikes me as being quite extraordinary about this Amendment is what happened in 1955. I have made a very careful search, and I find that the then Chancellor, now the Lord Privy Seal, put no figure to the step that he then took of reducing the lowest rate band from £100 to £60. There were figures given in the Financial Statement of the cost to the Exchequer of improved personal allowances and so on, but his references to this matter in his statement were most casual, and, so far as I can trace, there was never a cost put on it.
    What the right hon. Gentleman did in 1955, at the time when he improved the personal allowances and reduced the standard rate, was to transfer from the lowest band at 2s. 3d. in the £ the amount of £40 of taxable income to the rate of 4s. 9d. in the £, which was quite an uplift of the rate of tax upon the £40 of taxable income falling between the £60—of the new limit to the lowest band—and the £100 which was the upper limit to the old band. It looks as if, almost by sleight-of-hand, the right hon. Gentleman in 1955 clawed back a very large proportion of the reliefs that he was giving in other directions.

    1283
    We see little guidance on this in the Report of the Royal Commission, as on other matters. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) was complaining a few moments ago that he did not understand the principles of income taxation, and suggested that probably there were not any. I think he is right; there are none, at least not many, and even the fundamental principle of assumed ability to pay can scarcely withstand examination today.
    5.15 p.m.
    The Royal Commission seemed to have no alternative bands of reduced rates to offer as being preferable to the ones which then existed, although it did link with the reduced rate bands the whole of the principle of graduation, exemption limits, personal allowances and so on. The Royal Commission did a very detailed exercise on the whole problem of how the graduated principle is applied, and there is no doubt that some distortions come into the scheme as a result of the steps taken, in times of stress, which probably had little justification, except on expediency, from a revenue point of view.
    I very much regret that the hon. and learned Gentleman has felt moved to resist the Amendment. What is the formula he has on his paper? It is, "Presumed that the Amendment will be resisted." It is the sort of standing formula which is printed automatically at the foot of every page of foolscap which the Inland Revenue use for the purpose of briefing the hon. and learned Gentleman.
    Mr. H. Wilson: Not on the last Amendment.
    Mr. Houghton: There was no money in that, was there? That was probably dealt with in the Central Office of Information. That was a matter of the use of English, and the Inland Revenue would not know the answer to that one.
    Certainly, on this matter, the Financial Secretary has been left in no doubt what he should do, and that is a pity. It means that I shall have to ask my hon. and right hon. Friends to support the Amendment in the Lobby. When the hon. and learned Gentleman says that it would be irresponsible to regard this set of Amendments as a feasible change in the Bill as it now stands, all I can say is that, as the wheels of the Committee grind slowly, the degree of irresponsibility will decline as time goes on, because the last Amendment will cost little or nothing, and he will not be able to say to us that the whole thing costs £200 million.
    I warn the hon. and learned Gentleman that the time will come when we shall say "This is your last chance to show how reasonable you are." We have already dismissed one Amendment which the Financial Secretary said would cost about £6 million. Presumably, we are about to dismiss this one, and the grand total of cost is being reduced very rapidly. The point of reasonableness will soon be reached, and I hope that we shall secure a reasonable response from the hon. and learned Gentleman when he has an opportunity of moving in our direction without disastrous consequences to the financial structure of the Bill.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 194, Noes 240.

    Division No. 108.]

    AYES

    [15.20 p.m.

    Abse, Leo

    Brockway, A. F.

    Davies, Ernest (Enfield, E.)

    Ainsley, J. W.

    Broughton, Dr. A. D. D.

    Davies, Stephen (Merthyr)

    Albu, A. H.

    Brown, Thomas (Ince)

    Deer, G.

    Allaun, Frank (Salford, E.)

    Burke, W. A.

    Delargy, H. J.

    Allen, Arthur (Bosworth)

    Burton, Miss F. E.

    Diamond, John

    Allen, Scholefield (Crewe)

    Butler, Herbert (Hackney, C.)

    Ede, Rt. Hon. J. C.

    Awbery. S. S.

    Butler, Mrs. Joyce (Wood Green)

    Edwards, Rt. Hon. John (Brighouse)

    Bacon, Miss Alice

    Carmichael, J.

    Edwards. Rt. Hon. Ness (Caerphilly)

    Balfour, A.

    Castle, Mrs. B. A.

    Edwards, W. J. (Stepney)

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

    Champion, A. J.

    Evans, Albert (Islington, S.W.)

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

    Chetwynd, G. R.

    Fernyhough, E.

    Benson, Sir George

    Cliffe, Michael

    Fletcher, Eric

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

    Coldrick, W.

    Forman, J. C.

    Blackburn, F.

    Collick, P. H. (Birkenhead)

    Fraser, Thomas (Hamilton)

    Blenkinsop, A.

    Corbet, Mrs. Freda

    Galtskell, Rt. Hon. H. T. N.

    Blyton, W. R.

    Cove, W. G.

    Gibson, C. W.

    Boardman, H.

    Craddock, George (Bradford, S.)

    Gooch, E. G.

    Bottomley, Rt. Hon. A. G.

    Cronin, J. D.

    Gordon Walker, Rt. Hon. P. C.

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

    Grossman, R. H. S.

    Greenwood, Anthony

    Bowles, P. G.

    Cullen, Mrs. A.

    Grenfell, Rt. Hon. D. R.

    Grey, C. F.

    Mahon, Simon

    Ross, William

    Griffiths, David (Rother Valley)

    Mann, Mrs. Jean

    Royle, C.

    Griffiths, Rt. Hon. James (Lianelly)

    Marquand, Rt. Hon. H. A.

    Shinwell, Rt. Hon. E.

    Griffiths, William (Exchange)

    Mason, Roy

    Short, E. W.

    Hale, Leslie

    Mayhew, C. P.

    Silverman, Julius (Aston)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mitchison, G. R.

    Silverman, Sydney (Nelson)

    Hamilton, W. W.

    Monslow, W.

    Simmons, C. J. (Brierley Hill)

    Hannan, W.

    Moody, A. S.

    Slater, J. (Sedgefieid)

    Hastings, S.

    Morris, Percy (Swansea, W.)

    Snow, J W.

    Hayman, F. H.

    Mort, D. L.

    Sorensen, R. W.

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

    Moss, R.

    Soskice, Rt. Hon. Sir Frank

    Herbison, Miss M.

    Moyle, A.

    Sparks, J. A.

    Hewitson, Capt. M.

    Mulley, F. W.

    Spriggs, Leslie

    Hobson, C. R. (Keighley)

    Neal, Harold (Bolsover)

    Stewart, Michael (Fulham)

    Holman, P.

    Noel-Baker, Francis (Swindon)

    Stones, W. (Consett)

    Holmes, Horace

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

    Strauss, Rt. Hon. George (Vauxhall)

    Houghton, Douglas

    Oliver, G. H.

    Summerskill, Rt. Hon. E.

    Hughes, Cledwyn (Anglesey)

    Oram, A. E.

    Sylvester, G. 0.

    Hughes, Emrys (S. Ayrshire)

    Orbach, M.

    Taylor, Bernard (Mansfield)

    Hughes, Hector (Aberdeen, N.)

    Oswald, T.

    Thomas, lorwerth (Rhondda, W.)

    Hunter, A. E.

    Owen, W. J.

    Thomson, George (Dundee, E.)

    Hynd, H. (Accrington)

    Padiey, W. E.

    Thornton, E.

    Hynd, J. B. (Attercliffe)

    Palmer, A. M. F.

    Tomney, F.

    Irvine, A. J. (Edge Hill)

    Parker, J.

    Vlant, S. P.

    Irving, Sydney (Dartford)

    Parkin, B. T.

    Warbey, W. N.

    Isaacs, Rt. Hon. G. A.

    Paton, John

    Watkins, T. E.

    Janner, B.

    Pearson, A.

    Weitzman, D.

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

    Peart, T. F.

    Wells, Percy (Faversham)

    Jeger, George (Goole)

    Pentland, N.

    Wells, William (Walsall, N.)

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

    Plummer, Sir Leslie

    Wheeldon, W. E.

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

    Popplewell, E.

    White, Henry (Derbyshire, N.E.)

    Jones, Jack (Rotherham)

    Prentice, R. E.

    Wilkins, W. A.

    Jones, J. Idwal (Wrexham)

    Price, J. T. (Westhoughton)

    Willey, Frederick

    Kenyon, C.

    Price, Philips (Gloucestershire, W.)

    Williams, Rev. Llywelyn (Ab'tillery)

    Key, Rt. Hon. C. W.

    Probert, A. R.

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

    King, Dr. H. M.

    Pursey, Cmdr. H.

    Willis, Eustace (Edinburgh, E.)

    Lawson, G. M.

    Rankin, John

    Wilson, Rt. Hon. Harold (Huyton)

    Lee, Frederick (Newton)

    Redhead, E. C.

    Winterbottom, Richard

    Lee, Miss Jennie (Cannock)

    Reeves, J.

    Woodburn, Rt. Hon. A.

    Lewis, Arthur

    Reid, William

    Woof, R. E.

    Lipton, Marcus

    Reynolds, G. W.

    Yates, V. (Ladywood)

    Mahon, Dr. J. Dickson

    Rhodes, H.

    Zilliacus, K.

    McAlister, Mrs. Mary

    Robens, Rt. Hon. A.

    McInnes, J.

    Roberts, Albert (Normanton)

    TELLERS FOR THE AYES:

    McKay, John (Wallsend)

    Roberts, Goronwy (Caernarvon)

    Mr. John Taylor and Mr. Rogers.

    McLeavy, Frank

    Robinson, Kenneth (St. Pancras, N.)

    MacPherson, Malcolm (Stirling)

    NOES

    Agnew, Sir Peter

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

    George, J, C. (Pollok)

    Aitken, W. T.

    Campbell, Sir David

    Glover, D.

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

    Carr, Robert

    Glyn, Col. Richard H.

    Amery, Julian (Preston, N.)

    Cary, Sir Robert

    Godber, J. B.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Channon, H. P. G.

    Goodhart, Philip

    Anstruther-Cray, Major Sir William

    Chichester-Clark, R.

    Gough, C. F. H.

    Arbuthnot, John

    Cole, Norman

    Gower, H. R.

    Armstrong, C. W.

    Conant, Maj. Sir Roger

    Graham, Sir Fergus

    Ashton, H.

    Cooke, Robert

    Grant, Rt. Hon. W. (Woodside)

    Atkins, H. E.

    Cordeaux, Lt.-Col. J. K.

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

    Baldock, Lt.-Cmdr. J. M.

    Corfield, F. V.

    Green, A.

    Baldwin, Sir Archer

    Craddock, Beresford (Spelthorne)

    Gresham Cooke, R.

    Barber, Anthony

    Crowder, Sir John (Flnchley)

    Grimond, J.

    Barlow, Sir John

    Crowder, Petre (Ruislip—Northwood)

    Grimston, Hon. John (St. Albans)

    Barter, John

    Cunningham, Knox

    Grosvenor, Lt.-Col. R. G.

    Batsford, Brian

    Currie, G. B. H.

    Gurden, Harold

    Baxter, Sir Beverley

    Dance, J. C. G.

    Hall, John (Wycombe)

    Beamish, Col. Tufton

    Davidson, Viscountess

    Hare, Rt. Hon. J. H.

    Bell, Philip (Bolton, E.)

    Davies, Rt. Hn. Clement(Montgomery)

    Harris, Reader (Heston)

    Bell, Ronald (Bucks, S.)

    D'Avigdor-Goldsmid, Sir Henry

    Harrison, A. B. C. (Malden)

    Bevins, J. R. (Toxteth)

    de Ferranti, Basil

    Harrison, Col. J. H. (Eye)

    Biggs-Davison, J. A.

    Dodds-Parker, A. D.

    Harvey, John (Walthamstow, E.)

    Bingham, R. M.

    Doughty, C. J. A.

    Heald, Rt. Hon. Sir Lionel

    Birch, Rt. Hon. Nigel

    du Cann, E. D. L.

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

    Bishop, F. P.

    Duncan, Sir James

    Henderson, John (Cathcart)

    Black, Sir Cyril

    Eden, J. B. (Bournemouth, West)

    Henderson-Stewart, Sir James

    Body, R. F.

    Emmet, Hon. Mrs. Evelyn

    Hicks Beach, Maj. W. W.

    Bonham Carter, Mark

    Errington, Sir Eric

    Hill, Mrs. E. (Wythenshawe)

    Bowen, E. R. (Cardigan)

    Erroll, F. J.

    Hill, John (S. Norfolk)

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

    Farey-Jones, F. W.

    Hinchingbrooke, Viscount

    Boyle, Sir Edward

    Fell, A.

    Hirst, Geoffrey

    Braine, B. R.

    Fisher, Nigel

    Holland-Martin, G. J.

    Brewis, John

    Fletcher-Cooke, C.

    Holt, A. F.

    Brooman-White, R. C.

    Fort, R.

    Hornby, R. P.

    Browne, J. Nixon (Cralgton)

    Freeth, Denzil

    Horobin, Sir Ian

    Bryan, P.

    Galbraith, Hon. T. G. D.

    Horshrugh, Rt. Hon. Dame Florence

    Burden, F. F. A.

    Gammans, Lady

    1286

    1287

    Howard, John (Test)

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

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

    Hughes Hallett, Vice-Admiral J.

    Medlicott, Sir Frank

    Stanley, Capt. Hon. Richard

    Hughes-Young, M. H. C.

    Milligan, Rt. Hon. W. R.

    Stevens, Geoffrey

    Hurd, Sir Anthony

    Molson, Rt. Hon. Hugh

    Steward, Harold (Stockport, S.)

    Hutchison, MichaelClark(E'b'gh, S.)

    Morrison, John (Salisbury)

    Steward, Sir William (Woolwich, W.)

    Hylton-Foster, Rt. Hon. Sir Harry

    Mott-Radclyffe, Sir Charles

    Stoddart-Scott, Col. Sir Malcolm

    Iremonger, T. L.

    Nairn, D. L. S.

    Storey, S.

    Jenkins, Robert (Dulwich)

    Neave, Airey

    Stuart, Rt. Hon. James (Moray)

    Jennings, Sir Roland (Hallam)

    Nicholls, Harmar

    Studholme, Sir Henry

    Johnson, Eric (Blackleg)

    Nicholson, Sir Godfrey (Farnham)

    Summers, Sir Spencer

    Joseph, Sir Keith

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

    Taylor, Sir Charles (Eastbourne)

    Keegan, D.

    Noble, Michael (Argyll)

    Taylor, William (Bradford, N.)

    Kerby, Capt. H. B.

    Nugent, Richard

    Teeling, W.

    Kerr, Sir Hamilton

    Oakshott, H. D.

    Temple, John M.

    Kirk, P. M.

    Ormsby-Gore, Rt. Hon. W. D.

    Thomas, Leslie (Canterbury)

    Lambton, Viscount

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

    Thorneycroft, Rt. Hon. P.

    Lancaster, Col. C. G.

    Osborne, C.

    Thornton-Kemsley, Sir Colin

    Langford-Holt, J. A.

    Page, R. G.

    Turner, H. F. L.

    Leavey, J. A.

    Pannell, N. A. (Kirkdale)

    Turton, Rt. Hon. R. H.

    Leburn, W. G.

    Partridge, E.

    Tweedsmuir, Lady

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

    Peel, W. J.

    Vane, W. M. F.

    Legh, Hon. Peter (Petersfield)

    Peyton, J. W. W.

    Vaughan-Morgan, J. K.

    Lindsay Hon. James (Devon, N.)

    Pickthorn, Sir Kenneth

    Vickers, Miss Joan

    Lindsay, Martin (Solihull)

    Pike, Miss Mervyn

    Vosper, Rt. Hon. D. F.

    Linstead, Sir H. N.

    Pilkington, Capt. R. A.

    Wade, D. W.

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

    Pitman, I. J.

    Wakefield, Edward (Derbyshire, W.)

    Longden, Gilbert

    Pott, H. P.

    Wakefield, Sir Wavell (St. M'lebone)

    Loveys, Walter H.

    Powell, J. Enoch

    Walker-Smith, Rt. Hon. Derek

    Low, Rt. Hon. Slr Toby

    Price, David (Eastleigh)

    Wall, Patrick

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Prior-Palmer, Brig. 0. L.

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

    Lucas-Tooth, Sir Hugh

    Ramsden, J. E.

    Ward, Dame Irene (Tynemouth)

    Macdonald, Sir Peter

    Rawlinson, Peter

    Watkinson, Rt. Hon. Harold

    McLaughlin, Mrs. P.

    Redmayne, M.

    Webbe, Sir H.

    Maclean, Sir Fitzroy (Lancaster)

    Rees-Davies, W. R.

    Webster, David

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

    Remnant, Hon. P.

    Williams, Paul (Sunderland, S.)

    McMaster, S. R.

    Renton, D. L. M.

    Wills, Sir Gerald (Bridgwater)

    Macmillan, Rt. Hn. Harold (Bromley)

    Ridsdale, J. E.

    Wilson, Geoffrey (Truro)

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

    Robinson, Sir Roland (Blackpool, S.)

    Wood, Hon. R.

    Maitland, Hon. Patrick (Lanark)

    Roper, Sir Harold

    Woollam, John Victor

    Markham, Major Sir Frank

    Ropner, Col. Sir Leonard

    Yates, William (The Wrekin)

    Marlowe, A. A. H.

    Russell, R. S.

    Marples, Rt. Hon. A. E.

    Sharpies, R. C.

    TELLERS FOR THE NOES:

    Marshall, Douglas

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

    Mr. Finlay and Mr. Whitelaw.

    Mathew, R.

    Spearman, Sir Alexander

    Mawby, R. L.

    Spelr, R. M.

    Mr. Houghton: I beg to move, in page 14, line 23, at the end, to insert:
    (3) Subsection (1) (earned income relief) of section two hundred and eleven of the Income Tax Act, 1952, shall have effect as if after the words "standard rate on" there were inserted the words "one quarter of the claimant's earned income, if that income does not exceed one thousand pounds, or, if that income exceeds one thousand pounds but does not exceed one thousand one hundred and twenty-five pounds, on two hundred and fifty pounds, or, if that income amounts to or exceeds one thousand, one hundred and twenty-five pounds. on".
    This Amendment proposes a change in the earned income relief. The Committee will remember that, prior to 1957, earned income relief was a deduction of two-ninths from income with a maximum of £450. From 1957 onwards, the limit of earned income qualifying for the two-ninths relief was raised to £4,005 and a new and reduced earned income relief of one-ninth was given to income beyond £4,005, so that from 1957 onwards the earned income relief of two-ninths on the first £4,005 and one-ninth on the next £5,940 increased the total earned income relief from £450 to £1,550.
    1288
    In 1957, we on this side of the Committee said that that was going too far. It certainly went further than the Royal Commission recommended. However, that is how it was and that is how it is. Now we propose to bring in a new and more favourable relief of one-quarter instead of two-ninths for earned incomes which do not exceed £1,000 a year, but we make provision in the Amendment for marginal adjustments for incomes which do not exceed £1,125.
    5.30 p.m.
    I want to make it clear that this relief stands by itself as an alternative to the older earned income relief. A person can have one or the other, but not both. The Committee will appreciate that this is an attempt to give a more favourable earned income relief to those with lower incomes. We strike the same note in this Amendment, as we did in the two previous Amendments and shall do in subsequent Amendments, of giving more relief than the Bill provides to those on smaller incomes and to whom the personal reliefs matter most. The maximum benefit which

    1289
    any taxpayer could obtain under the Amendment would be an increase in earned income relief of £27—from £223 to £250. In terms of the new standard rate of tax, the tax saving would be £10 9s. 3d. That is the most that anyone would get out of it.
    To give an example, as a result of our proposal the tax saving to a married man with an income of £700, and with one child under 11 years of age, would be £4 Os. 9d.—a very modest saving, it must be admitted. He will already have gained under the Bill a tax reduction of £6 a year, so that if the Chancellor's proposals are added to our proposal a married man with £700 and with one child under 11 would gain a tax relief of £10 instead of £6. You will note, Sir Robert, in what modest terms we are speaking.
    I know that the modesty of the benefit which individuals would receive is not an index to the ultimate cost because of the large numbers involved. I am keeping a shopping list, and I think that at the moment the Financial Secretary, by his skill and persuasion in argument, has persuaded the Committee to reject £130 million worth of desirable improvements to the Bill.
    Mr. A. J. Champion: He did it by his majorities in the Lobby.
    Mr. Houghton: Yes, but I hope that we shall not mix up majorities in Committee with the millions of £s involved in these proposals.
    The danger to the financial stability of the Bill is growing less as time goes by. I confess that I do not know what our proposal would cost, but I have no doubt that the Financial Secretary will be able to tell us. When dealing with the previous Amendment a few moments ago, the Financial Secretary repeated the converse of the customary argument of himself and his right hon. Friend in these matters. He said that the proposal would give the least benefit to those who pay the least amount of tax. His argument usually is that we cannot help giving the most relief to those who pay the most tax and that we just have to accept the arithmetic and not import any arguments of social justice, of fiscal equity or anything else which has to do with the morality or desirability of the situation.
    1290
    The hon. Member for Wokingham (Mr. Remnant) was absent a little while ago when I was relying heavily on his support for an Amendment to improve the housekeeper relief. I had in front of me a good mark for his behaviour in 1951, when he tabled an Amendment, in company with other of his hon. Friends, to improve the housekeeper relief. Now he is in some way impeding me in trying to persuade the Committee to accept the Amendment.
    Mr. Peter Remnant: I must apologise for my reference to the Inland Revenue merely accepting figures as they stand without introducing other elements.
    Mr. Houghton: The apology is accepted.
    Here we are trying to give more relief than the Bill provides to those on the smaller and what one might call middle incomes. Hon. Members opposite profess a great interest in the problems of the middle income groups—those who are managers and supervisors and those who occupy positions of responsibility, very frequently for modest rewards. They are not in business on their own. They have not all the benefits of the relaxed expenses rule under Schedule D. They are tightly held by the Inland Revenue by the words "wholly, exclusively and necessarily incurred in the performance of their office". They have no room to move except by the connivance of their employers, or something of that sort. These people are held in the grip of the Income Tax machine and have no reliefs except those which the Bill and the Income Tax Acts provide.
    We are not afraid of asking hon. Members opposite to extend their sympathetic interest to these people. It is true that the man with an earned income of £1,000 a year, which is a modest but not large income today, would get the maximum benefit from the Amendment. A person with an income of £500 a year would not. I simply cannot help that. One cannot do everything one would like in the proportions that one would wish when dealing with the mathematics of a progressive system of taxation, but it is a step in the right direction. I hope that the hon. and learned Gentleman will give it sympathetic attention.
    I am becoming increasingly conscious of the problem in moving Amendments,

    1291
    namely, that as we erect them in a group and confront the Committee with them, the hon. and learned Gentleman merely bowls them over, rather like ninepins, one after the other. The pattern of our proposals becomes less coherent and less convincing as the Amendments are destroyed one by one. However, as the Chancellor said to me in another context once. "I must soldier on", and that is what I am doing. If the Committee will look at this Amendment, in relation to the other Amendments, on its merits, I think that it will see that it is deserving of support.
    In conclusion, I would remind the Committee that the Lord Privy Seal, when Chancellor of the Exchequer, said in a debate on a Finance Bill that he was looking forward to the time—I am not quoting him literally, but this is the gist of what he said—when he would be able to improve the earned income relief to one-quarter. I distinctly remember that, although I have not been able to put my hand on the reference. He was hoping to improve the earned income relief to one-quarter. To make it one-quarter to £4,005 and one-eighth instead of one-ninth from £4,005 to £9,945 would be going further than we would wish to go. We are trying to make a beginning on the one-quarter earned income relief on earned incomes which in total do not exceed £1.000.
    Mr. Eric Fletcher: I wish to support the Amendment moved by my hon. Friend the Member for Sowerby (Mr. Houghton) in, if I may say so, so persuasive a manner. I think that he can congratulate himself on the fact that he is soldiering on with very great determination and efficiency, and on this occasion, I hope, with success.
    We have still not been granted any concessions in this Finance Bill, and I hope that as on previous occasions the Chancellor and his able deputies are saving something up their sleeves as a concession which they will be able to give to the Committee in the course of this stage of the Bill. After all, this is a year in which without precedent the Chancellor has had a larger sum of money to give away in tax reliefs than ever before, and, stickler as he is for precedents —so we gathered yesterday—I hope that on this Finance Bill he will follow the precedents that have been observed in
    1292
    nearly every other Finance Bill by making at least some concession to the Opposition during the Committee stage. I can think of nothing more deserving than that for which the Amendment asks. The cost would not be very considerable. I think that, if anything, my hon. Friend almost exaggerated the modesty of the Amendment.
    May I briefly try to restate in my own words the arguments which I hope will influence the Treasury to accept the Amendment? I believe that it has long been recognised that there ought to be a distinction in tax liability between earned income and unearned income. The Royal Commission emphatically recommended that the differential between the tax on earned income and the tax on unearned income should be widened.
    We have held for a long time that the existing differential, namely, two-ninths up to a certain figure and one-ninth beyond that figure, is inadequate. We think that it is in the interest of the objective of encouraging enterprise and industry that there should be some real attractiveness in earned income as distinct from unearned income which could best be observed by way of an appropriate tax relief. We do not think it would be right that the same figure should be constant throughout the whole range of unearned income. That principle is now conceded.
    We are particularly concerned with the relatively small incomes of those earning up to £1,000 a year. These are people who, for the most part, marry and have families and for whom every shilling and every penny counts in their household budget.
    My hon. Friend said that if this tax concession were granted, the maximum relief which any individual would receive from it would be £10 9s. 3d. in tax liability. In most cases, of course, it would be rather less than that, but whether it is £4, £5 or £6, it is something which would make a difference to those people. We think that it would be meritorious because the relief would go only to those with earned incomes and not to those with unearned incomes. We believe that these people constitute a section of the community which, I would hope, both sides of the Committee would wish to encourage.

    1293
    5.45 p.m.
    As the Committee knows, one of our major criticisms of this Budget and this Finance Bill is that the Chancellor, having decided to reduce the standard rate of tax, necessarily had to confer tax reliefs on all taxpayers regardless of the size of their incomes. In so doing, the right hon. Gentleman failed, in our view, to give what is far more necessary at the present time, a correspondingly greater tax relief to those with small or relatively small incomes. We believe that the Chancellor would have been much better advised had he conferred some of his relief from taxation by extending the allowances and reliefs to which this series of Amendments relates. The first two Amendments, of course, have been disposed of.
    I hope that the Government will accept the Amendment on the ground that it will increase enterprise, will promote social justice, will be in accordance with the recommendations of the Royal Commission and will give assistance where it is badly needed.
    Mr. John McKay: I sometimes think that it is useless to try to get any Amendment on these matters accepted by the Government. The greater one's experience in the House of Commons the more it tends on most occasions to indicate that fact. There is a kind of psychology about Finance Bills and Income Tax, a psychology with which I do not agree. It is that the Income Tax machine is so complicated that one cannot differentiate sufficiently to be able to help the lower income groups without helping the higher income groups. This Amendment indicates that that is not correct.
    If we are willing and anxious to help the lower income groups there is nothing at all in the Finance Bill, or in practice, which prevents us from doing so. I do not know why the Amendment has fixed the figure at £1,000. It is an indication that we can use our arithmetic and our Amendments to the Finance Bill in such a way that we can, if we wish, give something to a particular section of the community. I always regard the average wage earner as the person earning £7, £8, £9, £10, £11 or £12 a week.
    Had the Amendment fixed on the sum of £500 a year instead of £1,000 a year
    1294
    we could, perhaps, have amended one-quarter to one-third and made it apply more definitely to the much poorer section of the community. The Amendment is a very small attempt on the part of the Labour Party to see whether Parliament is really an instrument whereby we can get a greater degree of justice in this matter so that more groups of the community can really be helped.
    The Amendment asks so little, but, of course, the Government will not accept it. In fact, I would wonder what had come over the Government if they agreed to even the slightest amendment of the Income Tax provisions that would benefit the lower section of taxpayers. If that did happen, we would look on in wonderment. It would be such an unexpected thing that we would be watching the newspapers to see what the Press had to say about it.
    On the other hand, the Government should be open to persuasion, and it is true that sometimes they are prepared to take account of what is said and to change their minds. I notice that the Government went out of their way to help one section of the community, the only proviso being that those benefiting should be 65 years of age or over. A year or two ago the Government legislated for that class by enacting that in respect of the investment income of a married couple, one of whom was 65 or over, the first £440 should be absolutely exempt from Income Tax.
    That is investment income, yet the poor worker in the factory, in the pit or on the farm has to slave all the year round to earn that much, and from it has to meet travelling expenses, insurance premiums and the rest. In addition, it must be remembered that an investment income of £440 a year can come only from several thousands—more likely running into the twenties of thousands—of capital.
    The Amendment asks for very little. Indeed, it asks for so little that it is questionable whether it was worth putting on the Notice Paper, but we have learned from experience that there is never any chance of the Government accepting, or even considering, an Amendment that contains a really worth-while benefit. On this occasion, the Opposition have asked for the very least, and suggest that here there is cause for some improvement.

    1295
    I have no idea what the cost would be, but the scope of the Amendment is tremendously limited when compared with the earlier Amendments we have discussed today. I must admit that I was surprised to hear how much one of the earlier Amendments would have cost. What would this Amendment cost? Would it be such an amount that the Government really could not consider it? If it does not involve a very big sum, let the Government give the poor Opposition the credit for once of being able to say, "Look what we have done. We have improved the situation."
    Viscount Hinchingbrooke: I hope that the Government will not accept this Amendment. I was very glad that there was not any reference to such a concession in the Budget. My right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) went very far in this direction in his Budget of 1957–58—beyond, I think, the terms recommended by the Royal Commission in its second Report.
    We have advanced very far on these lines—so far, it seems to me, that we are almost in danger of discriminating adversely against saved or invested income. If we make the earned income relief very substantial, the moment the person had earned money and invested it, it would become saved income and be subject to a higher tax rate. The knowledge that that would happen would be a disincentive to saving. We have gone as far as we can possibly go here, and I hope that the Government will not concede the Amendment.
    The Economic Secretary to the Treasury (Mr. F. J. Erroll): The hon. Member for Sowerby (Mr. Houghton) spoke of the Government knocking down the Opposition's Amendments one by one as though they were ninepins, and my hon. and learned Friend thought that it might make an agreeable change if I were to have a turn in this particular bowling-alley—although I admit at once that I have nothing like his experience.
    First, I should like to elicit an item of explanation from the hon. Member. I am not quite clear whether this Amendment is part of the Opposition's plan for what might be described as an alternative Finance Bill, presented in a series of Amendments, or whether it was a
    1296
    modest attempt to reverse the arrangements for earned income allowances introduced in the 1957 Budget.
    In what the hon. Gentleman said I thought that I detected a kind of unwilling acceptance of the major changes then introduced. I got the impression that he would rather not have seen the earned income reliefs given up to £4,005, and then an allowance of one-ninth up to £9,000-odd, and that this was the time to reverse the reliefs in favour of the small incomes—
    Mr. Houghton: I referred to the events of 1957, first, to explain what happened then, and, secondly, to recall that we on this side of the Committee thought that the then Chancellor, the right hon. Member for Monmouth (Mr. P. Thorneycroft) had gone too far. Nevertheless, I thought that I had made it very plain that we accepted that earned income relief structure, and were not proposing to change it in any way. All the benefits then given are retained in full by our proposal.
    What this Amendment proposes to do is to build into the structure of earned income relief a special concession of one-quarter instead of two-ninths of earned incomes not exceeding £1,000 a year. Therefore, those with the large earned income relief would keep it. This benefit would go only to the smaller incomes.
    Mr. Erroll: I am grateful to the hon. Gentleman for that explanation. This Amendment, therefore, would give an additional relief to the smaller man earning up to £1,000, with marginal relief up to £1,125.
    The real point at issue is whether this should be our Budget or the Opposition's Budget. My right hon. Friend has decided to introduce his Budget in the particular form and in the particular structure he has deemed to be best. Therefore, I really cannot shed many tears over the plea of the hon. Gentleman when he complains that this Opposition grand plan, interesting and well worth study as it may be, is being disposed of point by point as we knock each of their Amendments off its feet—with, so far, very telling arguments, and I hope that the arguments on this occasion will be as telling at the conclusion of the debate.

    1297
    6.0 p.m.
    What we have to appreciate is that the present scale of earned income allowances so generously distinguishes between the taxable capacity of earned and of investment income that there is already a substantial differential, and it would not be wise to carry that differential any further. Earned income is still much more favourably treated than unearned income, which is a matter which the Committee would do well to remember.
    The hon. Gentleman the Member for Sowerby referred to a figure of £1,000 in giving his examples, and I will use the same figure. A childless married man with an earned income of £1,000 per annum will pay this year £152 in tax, if all the income is earned, but if it is income solely derived from investments he will pay no less than £239 in tax. So that there is still a substantial relief in favour of the earned income, which is quite proper and as it should be, but it has to be remembered that we should not carry the differential too far; and I was glad to have the support of my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) in this matter.
    The importance, in our view, of not making the discrimination too severe is, we feel, that, while earning money is important, saving and investing is also important. Hon. Gentlemen opposite have frequently said that what they would wish to see is a greater degree of investment and a higher level of personal savings. People are prepared to save and invest only if they are to get some reward for doing so; in other words, if they are to derive an income from saving or investment. That being so it is only reasonable that that reward, called, perhaps by reason of historic accident, unearned income, should not be so heavily taxed as to make it not worth while to save or to invest.
    I think that everyone who saves or invests realises that the tax borne on unearned income should be higher than that borne on earned income, but not so high as to make it a powerful deterrent to further saving and investment. I hope that what I have said will serve as an explanation in reply to the remarks made by the hon. Gentleman the Member for Islington, East (Mr. E. Fletcher).
    The hon. Gentleman the Member for Wallsend (Mr. McKay) spoke of this
    1298
    Amendment as though it were a small one which could easily be accepted because the cost involved in so doing would be negligible. I am sorry to have to tell the Committee that quite apart from any other arguments in favour of rejecting this Amendment it would have to be rejected by the Committee, in my view, on the ground of the very high cost. It would cost no less than £72 million in a full year. Therefore, to accept this Amendment would be substantially to alter the structure of my right hon. Friend's Budget and to introduce an altogether different element into it.
    I am sorry to have to knock down yet another of the Opposition's ninepins, but I hope that the Committee will agree with me that I am right in asking it to do so this time.
    Mr. Houghton: The hon. Gentleman the Economic Secretary, of course, made an agreeable change from his hon. and learned Friend the Financial Secretary. [HON. MEMBERS: "0h."] I knew I was expressing myself badly as the words came out. I did not mean that at all. What I mean to say is that they are equally welcome contributors to our deliberations. Unfortunately, I must inflict myself on the Committee again, because my right hon. Friend the Member for Smethwick (Mr. Gordon Walker) has been called away and I am left somewhat alone on this Amendment.
    Mr. H. Wilson: Not altogether alone.
    Mr. Houghton: My right hon. Friend the Member for Huyton (Mr. H. Wilson) would enter the debate with his usual zest and skill, but he did not hear the earlier argument fully deployed, though, of course, he is in full support of the Amendment.
    Mr. Wilson: Hear, hear.
    Mr. Houghton: His presence here now is evidence of that.
    The Economic Secretary cannot tell any of us who have been in the Committee upstairs on the National Insurance Bill anything about trying to alter a Government Bill into our Bill. We had more than 20 meetings of that Committee without, on our side, having altered the Bill by a single letter or comma, which

    1299
    was a very frustrating experience beside which this is quite a mild one.
    I realise that we have several times tried to put into the right hon. Gentleman's Budget what is not there, and into the Bill that which is deliberately left out of his proposals, but that really does not detract from the value of discussing what we think are the deficiencies of the Bill in this respect, and we are still not without hope that before long we may propose something which so appeals to right hon. and hon. Gentlemen opposite as being reasonable, even within the context of this Bill, that we may get them to accept it.
    It may be that the right hon. Gentleman the Member for Monmouth (Mr. P. Thorneycroft), by going too far in 1957, will prevent us from going far enough in 1959. That is another problem we are up against, not only on this Bill, for we have been up against it in considering previous Measures. In 1957, £24½ million in a full year were conceded in the additional earned income relief, and no part of any of the £24½ million went to any person earning less than £2,005 a year. Not only did the two-ninths go up to a limit of income of £4,005, as against the recommendation of the Royal Commission on the Taxation of Profits and Income that it should go to £2,500, but the right hon. Gentleman carried the reduced one-ninth relief much further than the Royal Commission recommended.
    The Royal Commission suggested that the one-ninth relief should be on incomes between £2,500 and £3,000. The right hon. Gentleman the Member for Monmouth gave the one-ninth relief on incomes between £4,005 and nearly £10,000 a year. The small incomes which we are now proposing to benefit through a one-fourth earned income relief are having
    to pay for the bounty given in the higher ranges of earned income in 1957.
    The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) made a plea for fair treatment of income from savings. None of us on this side of the Committee wishes to injure in any way the rewards for genuine savings, for the money which people put aside out of their earnings and save for themselves or their families. The Amendment would facilitate savings in a range of incomes where it is most difficult to save today. It would reduce the tax burden which those small incomes bear and release a very modest amount of additional money for savings. The Amendment does nothing to penalise the income from savings in any way whatsoever.
    We on this side have on the Notice Paper for consideration later a new Clause to extend the scope of tax relief on small savings beyond the amounts in the Post Office Savings Bank and Trustee Savings Banks. This indicates that we are trying to spread the reliefs not only to small un-earned incomes, but to small unearned incomes from certain sources.
    The Chancellor does not like the expression that he has "given away". I have no wish to offend him, but we are confronted with the difficulty that the right hon. Gentleman has given tax remissions in Clause 14 amounting in a full year to £229 million. It is against that background that this small additional benefit to the lower incomes is being proposed. Once more, I can only urge my right hon. and hon. Friends to press this matter to a Division, in view of the unsatisfactory response that we have had from the new batsman on the Front Bench opposite.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 188, Noes 227.

    Division No. 109.]

    AYES

    [6.12 p.m.

    Ainsley, J. W.

    Boardman, H.

    Chapman, W. D.

    Albu, A. H.

    Bottomley, Rt. Hon. A. G.

    Chetwynd, G. R.

    Allaun, Frank (Salford, E.)

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

    Cliffe, Michael

    Allen, Arthur (Bosworth)

    Bowles, F. G.

    Coldrick, W.

    Allen, Scholefield (Crewe)

    Brockway, A. F.

    Collick, P. H. (Birkenhead)

    Awbery, S. S.

    Broughton, Dr. A. D. D.

    Corbet, Mrs. Freda

    Bacon, Miss Alice

    Brown, Rt. Hon. George (Belper)

    Craddock, George (Bradford, S.)

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

    Brown, Thomas (Ince)

    Cronin, J. D.

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

    Burke, W. A.

    Crossman, R. H. S.

    Benson, Sir George

    Burton, Miss F. E.

    Davies, Ernest (Enfield, E.)

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

    Butler, Herbert (Hackney, C.)

    Delargy, H. J.

    Blackburn, F.

    Butler, Mrs. Joyce (Wood Green)

    Diamond, John

    Blenkinsop, A.

    Carmichael, J.

    Ede, Rt. Hon. J. C.

    Blyton, W. R.

    Champion, A. J.

    Edelman, M.

    Edwards, Rt. Hon. John (Brighouse)

    Lee, Miss Jennie (Cannock)

    RObens, Rt. Hon. A.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Lindgren, G. S.

    Roberts, Albert (Normanton)

    Edwards, W. J. (Stepney)

    Lipton, Marcus

    Roberts, Goronwy (Caernarvon)

    Evans, Albert (Islington, S.W.)

    Mabon, Dr. J. Dickson

    Robinson, Kenneth (St. Pancras, N.)

    Fernyhough, E.

    McAlister, Mrs. Mary

    Rogers, George (Kensington, N.)

    Fletcher, Eric

    McInnes, J.

    Ross, William

    Forman, J. C.

    McKay, John (Wallsend)

    Royle, C.

    Fraser, Thomas (Hamilton)

    McLeavy, Frank

    Shinwell, Rt. Hon. E.

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

    MacPherson, Malcolm (Stirling)

    Short, E. W.

    Gibson, C. W.

    Mahon, Simon

    Silverman, Julius (Aston)

    Gooch, E. G.

    Mann, Mrs Jean

    Silverman, Sydney (Nelson)

    Greenwood, Anthony

    Marquand, Rt. Hon. H. A,

    Simmons, C. J. (Brierley Hill)

    Grenfell, Rt. Hon. D. R.

    Mason, Roy

    Slater, J. (Sedgefield)

    Grey, C. F.

    Mayhew, C. P.

    Smith, Ellis (Stoke, S.)

    Griffiths, David (Rother Valley)

    Mitchison, G. R.

    Snow, J. W.

    Griffiths, Rt. Hon. James (Llanelly)

    Monslow, W.

    Sorensen, R. W.

    Griffiths, William (Exchange)

    Moody, A. S.

    Soskice, Rt. Hon. Sir Frank

    Hale, Leslie

    Morris, Percy (Swansea, W.)

    Spriggs, Leslie

    Hall, Rt. Hn. Glenvil (Coins Valley)

    Mort, D. L.

    Stones, W. (Consett)

    Hamilton, W. W.

    Moss, R.

    Strauss, Rt. Hon. George (Vauxhall)

    Hannan, W.

    Moyle, A.

    Summerskill, Rt. Hon. E.

    Hastings, S.

    Mulley, F. W.

    Sylvester. G. 0.

    Hayman, F. H.

    Neal, Harold (Bolsover)

    Taylor, Bernard (Mansfield)

    Healey, Denis

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

    Taylor, John (West Lothian)

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

    Oliver, G. H.

    Thomas, Lorwerth (Rhondda, W.)

    Herbison, Miss M.

    Oram, A. E.

    Thomson, George (Dundee, E.)

    Hewitson, Capt. M.

    Orbach, M.

    Thornton, E.

    Hobson, C. R. (Keighley)

    Oswald, T.

    Tomney, F.

    Holman, P.

    Owen, W J.

    Viant, S. P.

    Houghton, Douglas

    Padley, W. E.

    Warbey, W. N.

    Hughes, Cledwyn (Anglesey)

    Palmer, A. M. F.

    Watkins, T. E.

    Hughes, Emrys (S. Ayrshire)

    Parker, J.

    Weitzman, D.

    Hughes, Hector (Aberdeen, N.)

    Parkin, B. T.

    Wells, Percy (Faversham)

    Hunter, A. E.

    Paton, John

    Wells, William (Walsall, N.)

    Hynd, H. (Accrington)

    Pearson, A.

    Wheeldon, W. E.

    Hynd, J. B. (Attercliffe)

    Peart, T. F.

    White, Henry (Derbyshire, N.E.)

    Irvine, A. J. (Edge Hill)

    Pentland, N.

    Wilkins, W. A.

    Irving, Sydney (Dartford)

    Plummer, Sir Leslie

    Willey, Frederick

    Janner, B.

    Popplewell, E.

    Williams, Rev. Llywelyn (Ab'tillery)

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

    Prentice, R. E.

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

    Jager, George (Goole)

    Price, J. T. (Westhoughton)

    Willis, Eustace (Edinburgh, E.)

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

    Price, Philips (Gloucestershire, W.)

    Wilson, Rt. Hon. Harold (Huyton)

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

    Probert, A. R.

    Winterbottom, Richard

    Jones, Jack (Rotherham)

    Pursey, Cmdr, H.

    Woof, R. E.

    Jones, J. Idwal (Wrexham)

    Rankin, John

    Yates, V. (Ladywood)

    Kenyon, C.

    Redhead, E. C.

    Zilliacus, K.

    Key, Rt. Hon. C. W.

    Reeves, J.

    King, Dr. H. M.

    Reid, William

    TELLERS FOR THE AYES:

    Lawson, G. M.

    Reynolds, G. W.

    Mr. Holmes and Mr. Deer.

    Lee, Frederick (Newton)

    Rhodes, H.

    NOES

    Agnew, Sir Peter

    Brooman-White, R. C.

    Erroll, F. J.

    Aitken, W. T.

    Browne, J. Nixon (Craigton)

    Farey-Jones, F. W.

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

    Bryan, P.

    Fell, A.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Burden, F. F. A.

    Finlay, Graeme

    Anstruther-Gray, Major Sir William

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

    Fisher, Nigel

    Arbuthnot, John

    Campbell, Sir David

    Fletcher-Cooke, C.

    Armstrong, C.W.

    Carr, Robert

    Fort, R.

    Ashton, H.

    Cary, Sir Robert

    Fraser, Hon. Hugh (Stone)

    Atkins, H. E.

    Channon, H. P. G.

    Freeth, Denzil

    Baldock, Lt.-Comdr. J. M.

    Chichester-Clark, R.

    Galbraith, Hon. T. C. D.

    Baldwin, Sir Archer

    Clarke, Brig. Terence (Portsmth, W.)

    Gammans, Lady

    Barber, Anthony

    Cole, Norman

    George, J. C. (Pollok)

    Barlow, Sir John

    Conant, Maj. Sir Roger

    Glover, D.

    Barter, John

    Cooke, Robert

    Glyn, Col. Richard H.

    Bateford, Brian

    Cordeaux, Lt.-Col. J. K.

    Godber, J. B.

    Baxter, Sir Beverley

    Corfield, F. V.

    Goodhart, Philip

    Beamish, Col. Tufton

    Craddock, Beresford (Spelthorne)

    Gough, C. F. H.

    Bell, Philip (Bolton, E.)

    Crosthwaite Eyre, Col. 0. E.

    Gower, H. R.

    Bell, Ronald (Bucks, S.)

    Crowder, Sir John (Finchley)

    Graham, Sir Fergus

    Bevins, J. R. (Toxteth)

    Cunningham, Knox

    Grant Rt. Hon. W. (Woodside)

    Biggs-Davison, J. A,

    Currie, G. B. H.

    Green, A.

    Bingham, R. M.

    Dance, J. C. G.

    Gresham Cooke, R.

    Birch, Rt. Hon. Nigel

    Davies, Rt. Hn. Clement(Montgomery)

    Grimond, J.

    Bishop, F. P.

    D'Avigdor-Goldsmid, Sir Henry

    Grosvenor, Lt.-Col. R. G.

    Black, Sir Cyril

    de Ferranti, Basil

    Gurden, Harold

    Body, R. F.

    Doughty, C. J. A.

    Hall, John (Wycombe)

    Bonham Carter, Mark

    du Cann, E. D. L.

    Hare, Rt. Hon. J. H.

    Bowen, E. R. (Cardigan)

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

    Harris, Reader (Heston)

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

    Duncan, Sir James

    Harrison, A. B. C. (Maldon)

    Boyle, Sir Edward

    Eden, J. B. (Bournemouth, West)

    Harrison, Col. J. H. (Eye)

    Braine, B. R.

    Emmet. Hon. Mrs. Evelyn

    Harvey, John (Walthamstow, E.)

    Brewis, John

    Errington, Sir Eric

    Heald, Rt. Hon. Sir Lionel

    1302

    1303

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

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

    Shepherd, William

    Henderson-Stewart, Sir James

    Maitland, Hon. Patrick (Lanark)

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

    Hicks-Beach, Maj. W. W.

    Markham, Major Sir Frank

    Spearman, Sir Alexander

    Hill, Mrs. E. (Wythenshawe)

    Marlowe, A. A. H.

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

    Hill, John (S. Norfolk)

    Marples, Rt. Hon. A. E.

    Stanley, Capt. Hon. Richard

    Hinchingbrooke, Viscount

    Marshall, Douglas

    Stevens, Geoffrey

    Hirst, Geoffrey

    Mathew, R.

    Steward, Harold (Stockport, S.)

    Holland-Martin, C. J.

    Mawby, R. L.

    Steward, Sir William (Woolwich, W.)

    Hornby, R. P

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

    Stoddart-Scott, Col. Sir Malcolm

    Horobin, Sir Ian

    Medlicott, Sir Frank

    Stuart, Rt. Hon. James (Moray)

    Horsbrugh, Rt. Hon. Dame Florence

    Molson, Rt. Hon. Hugh

    Studholme, Sir Henry

    Howard, John (Test)

    Morrison, John (Salisbury)

    Summers, Sir Spencer

    Hughes Hallett, Vice-Admiral J.

    Nairn, D. L. S.

    Taylor, Sir Charles (Eastbourne)

    Hurd, Sir Anthony

    Neave, Airey

    Taylor, William (Bradford, N.)

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

    Nicholls, Harmar

    Teeling, W.

    Hylton-Foster, Rt. Hon. Sir Harry

    Nicholson, Sir Godfrey (Farnham)

    Temple, John M.

    Iremonger, T. L.

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

    Thomas, Leslie (Canterbury)

    Jenkins, Robert (Dulwich)

    Noble, Michael (Argyll)

    Thorneycroft, Rt. Hon. P.

    Jennings, Sir Roland (Hallam)

    Nugent, Richard

    Thornton-Kemsley, Sir Colin

    Johnson, Eric (Blackleg)

    Oakshott, H. D.

    Turner, H. F. L.

    Keegan, D.

    Ormsby-Gore, Rt. Hon. W. D.

    Turton, Rt. Hon. R. H.

    Kerby, Capt. H. B.

    Osborne, C.

    Tweedsmuir, Lady

    Kerr, Sir Hamilton

    Page, R. G.

    Vane, W. M. F.

    Kirk, P. M.

    Pannell, N. A. (Kirkdale)

    Vaughan-Morgan, J. K.

    Lambton, Viscount

    Partridge, E.

    Vickers, Miss Joan

    Lancaster, Col. C. G.

    Peel, W. 3.

    Vosper, Rt. Hon. D. F.

    Langford-Holt, J. A.

    Peyton, J. W. W.

    Wakefield, Edward (Derbyshire, W.)

    Leavey, J. A.

    Pickthorn, Sir Kenneth

    Wakefield, Sir Wavell (St.M'lebone)

    Leburn, W. G.

    Pike, Miss Mervyn

    Walker-Smith, Rt. Hon. Derek

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

    Pilkington, Capt. R. A.

    Wall, Patrick

    Legh, Hon. Peter (Petersfield)

    Pitman, I. J.

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

    Lindsay, Hon. James (Devon, N.)

    Pott, H. P.

    Ward, Dame Irene (Tynemouth)

    Lindsay, Martin (Solihull)

    Powell, J. Enoch

    Watkinson, Rt. Hon. Harold

    Linstead, Sir H. N.

    Price, David (Eastlelgh)

    Webbe, Sir H.

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

    Prior-Palmer, Brig. 0. L.

    Webster, David

    Longden, Gilbert

    Ramden, J. E.

    Williams, Paul (Sunderland, S.)

    Loveys, Walter H.

    Redmayne, M.

    Williams, R. Dudley (Exeter)

    Low, Rt. Hon. Sir Toby

    Rees-Davies, W. R.

    Wills, Sir Gerald (Bridgwater)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Remnant, Hon. P.

    Wilson, Geoffrey (Truro)

    Lucas, P. B.(Brentford & Chiswick)

    Ridsdale, J. E.

    Woollam, John Victor

    Lucas-Tooth, Sir Hugh

    Robinson, Sir Roland (Blackpool, S.)

    Yates, William (The Wrekin)

    Macdonald, Sir Peter

    Roper, Sir Harold

    McLaughlin, Mrs. P.

    Ropner, Col. Sir Leonard

    TELLERS FOR THE NOES:

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

    Russell, R. S.

    Mr. Hughes-Young and

    Macmillan, Rt. Hn. Harold(Bromley)

    Sharpies, R. C.

    Mr. Whitelaw.

    Mr. Douglas Jay: I beg to move, in page 14, line 27, at the end to insert:
    (4) In subsection (1A) (appropriate amounts for child relief) of section two hundred and twelve of the Income Tax Act, 1952, references to one hundred and seventy-five pounds, one hundred and fifty pounds and one hundred and twenty-five pounds shall be substituted respectively for references to one hundred and fifty pounds, one hundred and twenty-five pounds and one hundred pounds (indicating the amount of the relief at various ages of the child).
    The Chairman: With this Amendment I think we can discuss the new Clause "Children", on page 2290 of the Notice Paper, in the name of the hon. and gallant Member for Cheltenham (Major Hicks Beach).
    Mr. Jay: This Amendment has the simple purpose of enlarging the Income Tax child allowance at all the three stages into which it is now divided. I have often moved similar Amendments before, and have often declared an interest in them. The interest is so widely shared that it is hardly worth declaring, but, on
    1304
    the other hand, the Chancellor of the Exchequer, if he were here, would be a standing proof that it is not universally shared, and therefore I mention the point.
    This Amendment to raise the child allowance and thereby give further Income Tax reliefs to families—which is one of the alternatives Which we would like to have seen adopted to the straight, sweeping reduction in the standard rate of tax—has many merits Ito recommend it. One is that it is extremely simple. Everybody can understand What is involved in having children, and everybody can understand what a relief for each extra dependent child in the family means. Whether or not we are fully conversant with dividend stripping, bond-washing, or even some of the more complicated Income Tax allowances, we can all understand what is proposed here.
    The second great merit of this proposal is that, on grounds of equity, this form of relief has more to recommend it than almost any other form of relief from Income Tax one can propose. I will not

    1305
    argue this case on the ground of incentives, which are no doubt important in their own way. We agree that they are important, but we also think that the equity of the tax is important too, and if we look to the argument of equity, the case for the child relief is extremely strong.
    Many of us, looking at Income Tax, feel inclined to argue on equity grounds that it is about time a large number of those with the smallest incomes were swept out of tax liability altogether. There are several million people in this country paying very small amounts of Income Tax which do not add up to a large total. I believe it is true that in the case of the 5 million or 6 million people, who are one-third of the Income Tax payers, the total tax they pay is £50 million at the outside, and the total Income Tax yield is £2,000 million or more. Therefore, one is inclined to sweep away the 5 million by what the plain man would call raising the exemption limit.
    Although we could devise a method for cutting out those paying the smallest amount of tax, that proposal, though it has something to be said for it, is open to criticism in that a high proportion of those individuals are single juveniles who, though their incomes are low, nevertheless are not the people most in need, since they do not have anybody else to support out of their incomes. Therefore, purely on grounds of equity, that argument is not as attractive as it looks compared with this one, and the case for the child allowance is even stronger.
    The second ground on which I would justify it from the point of view of equity is the following. I believe it is still true—the Financial Secretary can tell me if I am wrong, because I have not got the exact figures—that if we make a comparison in this way, and if we make a correction for the decline in the value of money, we find that the child allowance in any of the three hands is actually less today than it was before the wartime changes in Income Tax were made. Indeed, this is just one more proof that in some respects Income Tax today is more regressive than it was in the years immediately before the war.
    The simplest—one might say the crudest—but to me the valid test of the
    1306
    strange way in which our Income Tax system, in spite of all the allowances, still bears hardly on the family, is to make the straight calculation of what is the income per head after tax in each family. After all, what determines the standard of living, broadly speaking, is the income left after tax, divided by the number of the people in the family.
    I am far from suggesting that in this country we should base our Income Tax solely on that consideration, taking each individual separately, but it is always worth remembering that, in principle, this is the system in force in France. It was one of the most interesting points made by the Royal Commission on Taxation that in France they do not take the income of the earner of the household and consider this as one unit, with certain small adjustments. They divide the income by three or five or some other figure for the individuals in the family and then charge Income Tax approximately on the remaining figure. I think it is called the quotient system.
    I am not suggesting that we should do that here, but I would draw the attention of the Financial Secretary to the way in which the figures work out under our system. If we take, on the one hand, the single man or woman who is earning and solely supporting himself or herself, and, on the other, the man with a wife and three children, and if we calculate in each case what is the income per head after tax in each of those families, we reach what always seems to me a rather surprising result. I find that the ratio is about the same, in spite of changes made in intervening years, as it was a few years before, whether we take the level of £10, £20 or £30 a week. There may be some mathematical reason about which I do not know, but it works out the same. We find that the single man is four and a quarter times better off than the family of five.
    I have tried to allow for family allowances, though my calculation is fairly simple, but at all those levels the income of a single man is about four and a quarter times higher than that of the family. That is a remarkable difference. It means that to a great extent inequalities in the standard of living are more dependent on the number of dependants per earner in a household than they are on differences between gross income.

    1307
    6.30 p.m.
    It may be said that this is all very obvious and that if people have large families and have a number of dependants to support, they will naturally be very much worse off than if they were single earners who had no such responsibilities. That is true, but it does not dispose of the matter. We are, after all, looking at this from the point of view of equality in taxation. We are not just trying to discover how this rather curious ratio comes about.
    If one looks at it from the point of view of equity and ethics, one might well say that if a man and woman choose to have so many children, that is purely their responsibility, that the results must fall on them and that they cannot try to push the responsibility off on the rest of the community by wanting huge taxation reliefs. At the same time, however, one has to remember that the resulting inequalities of the lowering of the standard of living fall not merely on the earner but on the children in the family. This is one case where by no possible argument can we say that a moral responsibility rests on the other members of the family, who are, clearly, not accountable for the household in which they happen to live.
    Therefore, I do not think that one can just brush the calculation aside and say that no doubt everybody in a large family is much worse off than if they were in a small one and that that is their fault and responsibility. It is rather surprising that, in spite of our family allowances and system of child allowances for Income Tax, which at first sight look considerable and generous, there is this extraordinary difference between the single earner and the family with two, three or four children if one works out the simple calculation of the income per head after taxation.
    For all these reasons—this is a much simpler subject than some even though the arithmetic is not wholly simple—I think that among the possible allowances—if we are looking at equity and at adjusting our tax system to capacity to pay, which, in a sense, is the oldest and most traditional test of a good taxation system, as calculated by the actual standards of living of the people affected—there remains an extremely strong case year by year for fairly generous relief by way of this tax allowance.
    1308
    I say this to the Financial Secretary and the Economic Secretary not in the confident hope that they will immediately accept my argument and the Amendment today, but because I strongly believe that, not just this year but year by year, this is an extremely important element in our whole direct taxation system. If they do not, by some miraculous feat of intelligence, accept my Amendment today, and if by some even more miraculous stroke of ill luck they are still here in the future, I hope that they will keep these arguments firmly in mind.
    Dr. Horace King: I want to put to the Committee what is perhaps a new point in the long discussion that we have had on this matter from year to year. I do so from my intimate knowledge of one learned profession which is affected by the point that I shall try to make.
    We are moving steadily towards equal pay for men and women. Within two or three years in most of the professions in this country, and, indeed, eventually in all occupations, men will be paid the same as women. One of the old arguments against equal pay—I think that it was a false argument—was that a married man was much worse off than a single woman earning the same money. The fallacy in that is that the real discrepancy on which the opponents were basing their case is the discrepancy which still exists between the standard of living of the married man, especially the married man with children, and the single person, of whatever sex, earning the same salary. It is that economic difference, that difference in the standard of living, that the Amendment seeks to improve a little.
    I believe that the fact that the professions are moving towards equality of pay as between men and women and that in the teaching profession, my own profession, year by year more than 100,000 women are receiving equal pay, means that much more notice will be taken by the married folk of the country of the discrepancy that exists between them and the single person earning exactly the same money. I know, for example, that many members of the teaching profession are suggesting that there should be a family allowance as part of the salary scale. University professors already have it. I do not think that that is the real solution to the problem. The solution is not one

    1309
    to be tackled piecemeal by separate professions. The discrepancy is national. It is one to be tackled by the whole country, because the sense of injustice as between the married person and the single person runs through the whole of the national system. It could easily revive sex-antagonism on a fallacious basis.
    I find, for instance, that those who resist wage and salary increases very often base their resistance on the standard of living that a certain salary or wage represents for the single earner. All hon. Members, however, will know that such a salary or wage does not represent the same standard of living for the married man, especially the married man with children.
    The Royal Commission on the Taxation of Profits and Income stated the issue clearly for all time in its second Report. Speaking of the married man with two children, it said:
    "The married man's income has to support four people and there is nothing manifestly unfair in attributing to it the same taxable capacity as that of a single man supporting himself on about one-third of the income."
    It is towards that conception that we have to move as we build up the reliefs in Income Tax for the married person with children.
    I most sincerely congratulate the present Government and the Socialist Government which preceded it on what they have done during the last few years. In 1950–51, the allowance was £60 for all children. In 1951–52, it was raised to £70; in 1952–53, to £85; in 1955–56, to £100; and in 1957–58 it was raised to the differentiated pattern, for children of various ages, referred to in the Amendment, of £100, £125 and £150. The Government have also made a similar, but not quite so significant, increase in the Income Tax allowance for a man's wife, but I still do not believe that we are doing enough in the fiscal field for the family man. I do not believe that we do enough in taxation relief for the family, and the family is the backbone of British life.
    It is common knowledge to every father or grandfather in the Committee that children are costing more year by year. This results not merely from the rise in the cost of living, but from the rise in the demands of the young population for all kinds of things which we did not have
    1310
    as children. If the Chancellor could afford to make the concessions that we seek, they would represent in a year perhaps the cost of clothing or of providing boots for the children, and this would at any rate narrow to some extent, justifiably I believe, the gap in the standard of living between the single person and the married person doing exactly the same job and receiving exactly the same income but having a widely differing standard of living which they manage to obtain from that income. I hope that the Chancellor will give serious consideration to our proposal.
    Viscount Hinchingbrooke: I understand that with this Amendment there is being taken a new Clause in the name of my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach). However, none of my hon. Friends who put their names to that new Clause is in the Chamber. I do not know the machinery in these affairs. It is a little unfortunate suddenly to jump into the middle of a new Clause. There is sometimes provision for placing Schedules against related Amendments on the Notice Paper so that we at least know that they are to be taken together.
    I suppose that even if hon. Members think that the new Clauses are not to be taken until two or three weeks from now, they should still go to the Chair and say, "Please, Sir Charles, by any chance is my Clause being taken today with any Amendment?" Now that we have Clauses and Amendments numbered, we might look into the whole machinery whereby hon. Members are advised that their Clauses are to be taken with certain Amendments. I hope that that will be done.
    I doubt very much whether the Government will accept this year what the Amendment suggests. There have been many other concessions and in recent years, notably under my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft), there have been changes in the amount of children's allowances. We have been progressing steadily and satisfactorily towards a situation in which people with middle and moderate incomes are enabled to receive such allowances for marriage and children that they are carried out of the taxation ranges altogether.

    1311
    For example, anyone who is married with two children over 16 and is earning a salary of £900 or less does not pay any tax. Looked at starkly like that, it is staggering to see what happened in the years before and immediately after the war, when some of these benefits had not been conferred. We should rejoice in that and if we had time to study the matter I have no doubt that we would find that we could congratulate right hon. and hon. Gentlemen opposite as much as ourselves.
    Nevertheless, there are still very large gaps. There is a very interesting, if alarming, table on page 83 of the second Report of the Royal Commission on the Taxation of Profits and Income, which may not be accurate now since it was for the taxation scales of 1953–54. However, it shows the discrepancy in the weight of taxation at that time and before the war at various levels of income. This table also refers to married persons with two children.
    According to those figures, a family of that kind, with an income of £800 a year, at that time was paying thirteen and a half times as much Income Tax as it was in 1928–39. Of course, the Income Tax paid in 1938–39 was not very large, and one cannot go lower down the scale and talk about incomes of £750 or £700 or less without making the argument absurd and getting into infinite scales. Families with incomes of £850 paid eight times as much as pre-war; incomes of £900, six and a half times as much; and of £950 five times as much.
    It then goes sharply down so that incomes of £1,500 and above paid as much again as before the war. That rate of as much again runs up to the top incomes. It is round about the class of persons earning about £800 to £1,200 that the tremendous differential of taxation today compared with taxation before the war is applied. It is towards that class that the Government should direct their closest attention next year.
    6.45 p.m.
    I hope that we shall get away from this comparatively unsatisfactory system of allowances and get to a proportionate basis. For instance, if we said that one-tenth of a person's income, irrespective of the size of the income, so that it
    1312
    would operate throughout Surtax, should be allowed per child, or some ratio of that kind, we should do far more justice to those people who most deserve justice, namely, the class to which I have just referred, and we should not militate against what we have done for people in the lower income groups.
    Mr. Jay: The noble Lord will realise that in a sense the present system is proportionate since those people with higher incomes who get the larger reliefs have to pay more.
    Viscount Hinchingbrooke: But that is infinitesimal. I should have thought that the right non. Gentleman himself, with his level of salary, received a very unsatisfactory allowance in respect of his children, two of whom, I know, are at university. The amount of child allowance at certain levels of income is out of all proportion to the responsibilities discharged by the parents.
    It may be that this is a simple party issue, but I do not believe that there is any point in remitting it to a Royal Commission or other neutral body, because we should receive only a neutral answer. The Royal Commission did not dare to make what I and, I am sure, my right hon. Friend consider the real changes which should be made in this aspect of taxation. I hope that, in spite of that, the Government, which will be the same Government, will have the courage to do something of the kind next year.
    Mr. J. Grimond: We have had three reasonable and well reasoned speeches in favour of the principle behind the Amendment, which should commend itself in principle to the Government as well as to the Committee since it recognises that relief should be given to families. We have had a very welcome reduction in Income Tax this year and progressively over the years we have built up a system of reliefs.
    I do not want to go over the arguments for and against this suggestion, which were eloquently deployed by the right hon. Member for Battersea, North (Mr. Jay), nor do I want to reiterate the extremely important argument of the hon. Member for Southampton, Itchen (Dr. King), which will be extremely important to the teaching profession as equal pay becomes more general throughout the system.

    1313
    There are arguments against this proposal. It might be said that everyone is entitled not to have a family and that to have a family is enjoyable and that one must he prepared to bear some extra cost because of it. Nevertheless, it is not a form of life which we should single out for high taxation. In spite of the concessions, do not the Government agree that the position of the family man, at any rate in certain trades, is worse than it was? It is a complicated matter, because there are alterations in the value of money and allowances and the whole tendency in the economy as it gets richer is for people to move into higher brackets of income so that what appears to be a substantial reduction in tax in real terms may turn out to be rather different from what it first appears to be.
    Having made substantial concessions, I think that the Government will be unable to agree to accept the Amendment this year, but I add my plea to those who have asked the Government to accept it in principle. I should appreciate a lucid statement from the Government on the tax position of the family man and whether it is true, as I suspect, that the figures given by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) are correct in indicating that in certain classes the family is still taxed unduly heavily. Will the Government say whether they favour themselves or their successors reviewing the position?
    Major W. Hicks Beach: I am happy to hear that the new Clause, "Children", standing in my name—
    Section two hundred and twelve of the Income Tax Act, 1952, as amended by section twelve of the Finance Act, 1957, shall be read and have effect as if in subsection (4) thereof (which subsection limits by reference to the child's income the relief allowed in respect of the child) in place of the words "income exceeding one hundred pounds a year" there were substituted the words "annual income exceeding the appropriate amount for the child"—
    is being discussed with this Amendment.
    May I briefly explain the purpose of the new Clause? The present position under the Income Tax Acts is that where a child is a beneficiary under a settlement the parent of that child is entitled to claim the ordinary child allowance, which we know is now £150 a year, provided that the income from the settlement in which the child has an interest is not more than £120 a year. Since the war
    1314
    children's allowances have steadily increased. The amount which a child is entitled to receive under a settlement without the parent losing the allowance has not been kept in line with the child's allowance.
    I should have thought that that was a gross and probably quite unintentional anomaly on the part of the Inland Revenue. The purpose of my new Clause is a simple one. It is to ensure that the child allowance as such should be tied to the amount to which a child is entitled from an outside income under a settlement and that the parent should not lose the child allowance. Since the war all the evidence shows that the child allowance and the independent income allowance of the child has been tied to the allowance which the parents can claim. If the hon. and learned Gentleman studies this matter, I think he will accept my new Clause as bringing into line what has, until the last four years, been the policy of Governments of both parties, and which is in conformity with the general taxation policy.
    Mr. Simon: This has been an extremely interesting debate which has ranged pretty wide into the social purpose that lies behind this particular relief. If he will forgive me, I do not think I will follow the right hon. Gentleman the Member for Battersea, North (Mr. Jay) into the French tax code, which is based on a completely different property relationship between the spouses.
    It is clear that there is always a discrepancy between the standard of living of the single man and the married man without a family on the one hand, and those who have a large family of young children to bring up on the other. That has always been so. Hon. Members of the Committee will call to mind Trollope's juxtaposition of the Warden on the one hand and the Rev. Mr. Quiverful on the other. That is a feature that has gone on throughout social history. Nor indeed is it the purpose of this allowance to correct that. It is to go some way towards correcting it, but none of these reliefs are intended to indemnify the taxpayer against the cost in respect of which they are granted. It is to some extent to temper the wind to the shorn lamb—to take us back again, as I said earlier, repeating the Royal Commission, to the system of graduation.

    1315
    This relief takes its place with the various social payments like the family allowances and the cognisance which the National Assistance Board takes of family circumstances. That is not to say that this relief has not got an important social or fiscal purpose, and when the hon. Member for Orkney and Shetland (Mr. Grimond) asks me whether the Government are committed to this in principle, I think the answer is clearly "Yes", for the reasons very fairly given by the hon. Member for Southampton, Itchen (Dr. King). That is shown by the action of the Government.
    I cannot advise the Committee to accept the Amendment for two main reasons. First, this allowance has been pretty generously treated in recent years. It was increased in the 1951 Socialist Budget from £60 to £70. It is true that that was concomitant with an increase in the standard rate of Income Tax, but it was nevertheless a conscious differentiation in favour of the family man.
    The allowance has been increased three times under Tory Governments. The first time it was increased from £70 to £85 in 1952. Then came the observations of the Royal Commission to which the hon. Member for Itchen and my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) drew attention. I think it was partly in consequence of those observations that the allowance was increased to £100 in 1955. In 1957 it was increased again by my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft)—to £150 in the case of children over 16—to take account of the greater expense of maintaining the older dependent children.
    Those are substantial increases over a comparatively short period of years. As my right hon. Friend the Chancellor reminded the Committee, it amounts to an increase of over 40 per cent. in the case of the allowance for children under 11 years of age; 80 per cent. for children between 11 and 16; and more than double for children over 16.
    The important thing to remember, and it is not always kept in sight by commentators on our fiscal system, is that an allowance improved like that enures not only in the year that it is granted, but from year to year. In approving Clause 14, the general Clause imposing the new
    1316
    rates of Income Tax, the Committee has approved that there shall be those increased benefits which were conferred in 1951, 1952, 1955 and 1957, all of them continuing again to the benefit of the family man in the coming Income Tax year.
    The second, and conclusive, reason why it would be wrong for the Committee to accept the Amendment is the cost. It costs £42 million. The Committee has already approved the reduction in the standard rate of Income Tax, and the reduction in the reduced rates must necessarily follow. It seems to me that nobody in any part of the Committee could really contemplate adding £42 million to the sum which should be borrowed this year. It must necessarily follow that the Committee should disapprove the Amendment, although I understand very well the reasons why it has been put forward from the benches opposite.
    7.0 p.m.
    I propose now to refer to the new Clause in the name of my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach). I think I may deal with it quite briefly. My first point is that there is no necessary equivalence between the income limit and the amount of the child's allowance. That point was made by my predecessor in 1957 and I need not repeat the arguments which he gave at length. Secondly, this allowance is intended for those with dependent children, and it has always been recognised that there must come a point at which it is excessive both to give the parent an allowance for his child and to give the child the ordinary single person's allowance against his own income. The two allowances together means that there is in the case of a child, that is, a child under 11, an income of £200 which is exempt—£100 of the child's income and £100 of allowance. Of course, if the child is older, the amount will be different.
    We have to compare that £200 of exempt income with the exempt income of £180 for a single person under 65 years of age. Therefore, again we come back to the situation that it would be inequitable to move one of these rates without a general increase in the personal allowances; and it seems to me that the right time to review the point made so

    1317
    cogently and forcibly by my hon. and gallant Friend would be when the personal allowances generally are being reviewed.
    There is one further reason which I am bound to mention. It is that his proposal would cost £2 million in a full year. That is not a sum that my right hon. Friend could find after the very substantial remissions which he has made. For those reasons, I must ask the Committee to vote against the Amendment, if the matter is taken to a Division, and I hope that my hon. and gallant Friend will ask leave to withdraw his New Clause.
    Mr. Ede: We have had a very interesting discussion on this Amendment. Every speaker has devoted some part of his argument to how this form of taxation may be used to secure some kind of social justice which is rather more easily recognisable than the present system. I was particularly impressed by the comparisons given by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) illustrating the amount paid in taxation in some cases today and what was paid in the years before the war.
    When discussing this matter with younger friends of mine who are now bringing up families, I find is very difficult to ascertain exactly how the burden of bringing up a family today compares with the situation before the war. Of course, I can go back even further than that in my own recollection. I can recall the way in which I was brought up and the apparent cost of bringing up a family in those days. I was the eldest of a family of four, and the youngest was only three years and six months younger that I was. We were the kind of family in which the members were happy only if they worked in with the family. In many ways I think that where the children are so nearly of the same age that they are naturally companionable, if they are of that frame of mind, is the ideal form of family.
    It would be interesting to have some investigation into the problems raised by the noble Lord. There is no doubt that the standard of expectation of a child has altered since the remote time when one's weekly allowance could be assessed in the form of ginger beer. It would be
    1318
    interesting to compare the situation then with what happens today.
    When I was Home Secretary I was once consulted about the allowances to be paid to children who were under the control of various bodies over which I had some supervision. If we take the ginger beer standards, a bottle of ginger beer in my day cost 1d. But try to get a battle of ginger beer today for 1d. So far as the child is concerned, the cost of living appears to have increased by 500, 600 or 700 per cent. One does not wish to carry these 'analogies too far, but undoubtedly a problem confronts parents in receipt of a reasonable income of, say, £1,000 or £1,200 a year, who are trying to bring up three or four children reasonably well without being extravagant. In the light of the figures and comparisons brought to our notice today by the noble Lord the Member for Dorset, South, I hope that in future discussion's on this matter we shall be able to compare conditions in pre-war days with those prevailing today.
    One of the things which always astonishes me is the high proportion of single English women, compared with other members of the English community, that one meets if one happens to be enjoying a holiday at some foreign resort. It seems to indicate that the standard of living which may be enjoyed in this day and age by single people with no family obligations cannot be experienced by parents confronted with the task of bringing up a family.
    I regret that these proposals will cost too much to implement. I find some consolation in the thought that as the £2 million which represents the cost of implementing the proposals of the hon. and gallant Member for Cheltenham (Major Hicks Beach) would ruin this Budget, the eminently reasonable proposals of my right hon. Friend the Member for Battersea, North (Mr. Jay), which would cost £42 million, must be regarded as a wrecking Amendment. I am sure that no one would wish to wreck the Budget on such a fine afternoon as this.
    Mr. Jay: I thought that the Financial Secretary was a little unsympathetic to the various arguments which have been advanced and that he used one or two rather curious arguments. My right hon. Friend the Member for South Shields (Mr. Ede) has spoken of the comparisons

    1319
    between present-day conditions and prewar conditions, as did the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke). I asked the Financial Secretary whether the child allowance today, after all these increases which the hon. and learned Gentleman rightly enumerated, was as high as it would have to be in order to command the same purchasing power and to allow for the fall in the value of money.
    Mr. Simon: I need hardly say that it was not an intentional discourtesy on my part that I did not answer the question of the right hon. Gentleman. The reason was that I have not the figures available.
    Mr. Jay: I was not reproaching the Financial Secretary. I was about to say that I have myself made the calculation. Apparently the hon. and learned Gentleman cannot contradict me, and so I will give him the result of my calculations.
    According to my researches, the child allowance before the war was £60. During the war it went down and it has now risen by three bands—£100, £125 and £150. I do not wish to commit myself over the cost of ginger beer, which was mentioned by my right hon. Friend the Member for South Shields, but it is usual in such estimates to multiply by three in order to allow for the fall in the value of money since 1938. Therefore, if there has not been an actual deduction in this allowance, it should stand at about £180 today.
    In 1954, the Royal Commission recommended a figure of £160. In fact the figure has been £100, £125, and £150 so that, in effect, in real terms, the allowance is lower than before the war. That is also relevant to what was said by my hon. Friend the Member for Southampton, Itchen (Dr. King). We are moving into a period when equal pay will become much more prevalent both in public and private service. That is, indeed, as he rightly said, an argument both for increasing family allowances and the child allowances for Income Tax purposes. On those grounds alone it would seem that these allowances should be larger in real terms and not, as they are, smaller than pre-war.
    The Financial Secretary used one rather extraordinary argument. He said that
    1320
    the reliefs given by way of child allowances in previous years were being continued and that in voting Clause 12 we should, so to speak, be re-enacting them. I think we all realise that, but it is rather extraordinary that in refusing to give one relief the Financial Secretary should take credit for not taking back another relief. We do not accept that the Financial Secretary, in refusing to increase the child allowance, can take credit for continuing those allowances. I must remind him that in this Budget greater reliefs have been given to the single person than to the earner with dependants and that in each case the more dependants he has the less relief he gets from the Budget. I must say that as the Financial Secretary actually claims credit for what has been done in the Budget.
    The Financial Secretary to the Treasury finally said, "Of course, these allowances are not intended to restore the situation as it would be if the taxpayer had no children at all." I am aware of that. I remember saying that to my own father in 1920, when he was complaining about the inadequacy of the child allowance. The allowances are merely intended to go some way towards bridging the gap. Our case is that they do not go far enough. We do not argue that a man with a wife and three children should be exactly as well off after tax per head as if he were a single earner.
    If, as a result of all our child allowances and fiscal arrangements today, the single man were twice as well off as the man with a wife and three children, that might be reasonable, but he is more than four times as well off. I think that the figure is something like four and a quarter times. If we had no taxation system at all, the single man might be five times as well off, but the whole effect of Income Tax and child allowances makes him four and a quarter times better off. That seems to us to go very little way indeed. Therefore, I hope that the Committee, in order to point this argument, will divide in favour of the Amendment.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 177, Noes 214.

    Division No. 110.]

    AYES

    [7.14 p.m

    Ainsley, J. W.

    Hall, Rt. Hon. Glenvil (Caine Valley)

    Parker, J.

    Albu, A. H.

    Hamilton, W. W.

    Paton, John

    Allaun, Frank (Salford, E.)

    Hannan, W.

    Pearson, A.

    Allen, Arthur (Bosworth)

    Hastings, S.

    Peart, T. F.

    Allen, Scholefield (Crewe)

    Hayman, F. H.

    Pentland, N.

    Awhery, S. S.

    Healey, Denis

    Plummer, Sir Leslie

    Bacon, Miss Alice

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

    Popplewell, E.

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

    Herbison, Miss M.

    Prentice, R. E.

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

    Hewitson, Capt. M.

    Probert, A. R.

    Benson, Sir George

    Hobson, C. R. (Keighley)

    Pursey, Cmdr. H.

    Blackburn, F.

    Holman, P.

    Rankin, John

    Blenkinsop, A.

    Houghton, Douglas

    Redhead, E. C.

    Blyton, W. R.

    Hughes, Cledwyn (Anglesey)

    Reeves, J.

    Boardman, H.

    Hughes, Enlrya (S. Ayrshire)

    Reid, William

    Bottomley, Rt. Hon. A. G.

    Hughes, Hector (Aberdeen, N.)

    Reynolds, G. W.

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

    Hunter, A. E.

    Rhodes, H.

    Bowles, F. G.

    Hynd, H. (Accrington)

    Robens, Rt. Hon. A.

    Brockway, A. F.

    Hynd, J. B. (Attercliffe)

    Roberts, Goronwy (Caernarvon)

    Broughton, Dr. A. D. D.

    Irving, Sydney (Dartford)

    Robinson, Kenneth (St. Pancras, N.)

    Brown, Rt. Hon. George (Belper)

    Janner, B.

    Rogers, George (Kensington, N.)

    Brown, Thomas (Ince)

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

    Ross, William

    Burke, W. A.

    Jeger, George (Goole)

    Royle, C.

    Burton, Miss F. E.

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

    Shinwell, Rt. Hon. E.

    Butler, Herbert (Hackney, C.)

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

    Short, E. W.

    Carmichael, J.

    Jones, Jack (Rotherham)

    Silverman, Julius (Aston)

    Castle, Mrs. B. A.

    Jones, J. Idwal (Wrexham)

    Silverman, Sydney (Nelson)

    Champion, A. J.

    Kenyon, C.

    Simmons, C. J. (Brlerley Hill)

    Chapman, W. D.

    Key, Rt. Hon. C. W.

    Slater, J. (Sedgefield)

    Chetwynd, G. R.

    King, Dr. H. M.

    Smith, Ellis (Stoke, S.)

    Coldrick, W.

    Lawson, G. M.

    Snow, J. W.

    Collick, P. H. (Birkenhead)

    Lee, Frederick (Newton)

    Sorensen, R. W.

    Corbet, Mrs. Freda

    Lee, Miss Jennie (Cannock)

    Spriggs, Leslie

    Craddock, George (Bradford, S.)

    Lindgren, G. S.

    Stones, W. (Consett)

    Cronin, J. D.

    Lipton, Marcus

    Strauss, Rt. Hon. George (Vauxhall)

    Crossman, R. H. S.

    Mahon, Dr. J. Dickson

    Summerskill, Rt. Hon. E.

    Davies, Ernest (Enfield, E.)

    McAllister, Mrs. Mary

    Sylvester, G. 0.

    Davies, Harold (Leek)

    McInnes, J.

    Taylor, Bernard (Mansfield)

    Davies, Stephen (Merthyr)

    McKay, John (Wallsend)

    Taylor, John (West Lothian)

    Deer, G.

    McLeavy, Frank

    Thomas, lorwerth (Rhondda, W.)

    Delargy, H. J.

    MacPherson, Malcolm (Stirling)

    Thomson, George (Dundee, E.)

    Diamond, John

    Mahon, Simon

    Thornton, E.

    Ede, Rt. Hon. J. C.

    Mann, Mrs. Jean

    Tourney, F.

    Edelman, M.

    Marquand, Rt. Hon. H. A.

    Vlant, S. P.

    Edwards, Rt. Hon. John (Brighouse)

    Mason, Roy

    Watkins, T. E.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Mayhew, C. P.

    Weitzman, D.

    Edwards, W. J. (Stepney)

    Monslow, W.

    Wells, William (Walsall, N.)

    Evans, Albert (Islington, S.W.)

    Moody, A. S.

    W heeldon, W. E.

    Fernyhough, E.

    Morris, Percy (Swansea, W.)

    White, Henry (Derbyshire, N.E.)

    Fletcher, Eric

    Mort, D. L.

    Wilkins, W. A.

    Forman, J. C.

    Moss, R.

    Willey, Frederick

    Fraser, Thomas (Hamilton)

    Moyle, A.

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

    Gibson, C. W.

    Mulley, F. W.

    Willis, Eustace (Edinburgh, E.)

    Gooch, E. G.

    O'Brien, Sir Thomas

    Wilson, Rt. Hon. Harold (Huyton)

    Greenwood, Anthony

    Oliver, G. H.

    Winterbottom, Richard

    Grenfell, Rt. Hon. D. R.

    Oram, A. E.

    Woof, R. E.

    Grey, C. F.

    Orbach, M.

    Yates, V. (Ladywood)

    Griffiths, David (Rother Valley)

    Oswald, T.

    Zilliacus, K.

    Griffiths, Rt. Hon. James (Lianelly)

    Owen, W. J.

    Griffiths, William (Exchange)

    Padley, W. E.

    TELLERS FOR THE AYES:

    Hale, Leslie

    Palmer, A. M. F.

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

    NOES

    Agnew, Sir Peter

    Bishop, F. P.

    Cordeaux, Lt.-Col. J. K.

    Aitken, W. T.

    Black, Sir Cyril

    Corfield, F. V.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Body, R. F.

    Craddock, Beresford (Spelthorne)

    Anstruther-Gray, Major Sir William

    Bowen, E. R. (Cardigan)

    Crosthwaite Eyre, Col. 0. E.

    Arbuthnot, John

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

    Crowder, Sir John (Finchley)

    Armstrong, C. W.

    Boyle, Sir Edward

    Cunningham, Knox

    Ashton, H.

    Brains, B. R.

    Dance, J. C. G.

    Atkins, H. E.

    Brewia, John

    Davles, Rt. Hon. Clement(Montgomery)

    Baldock, Lt.-Cmdr. J. M.

    Brooman-Whlte, R. C.

    D'Avigdor-Goldsmid, Sir Henry

    Baldwin, Sir Archer

    Browne, J. Nixon (Craigton)

    de Ferranti, Basil

    Barber, Anthony

    Burden, F. F. A.

    Doughty, C. J. A.

    Barlow, Sir John

    Butler, Rt. Hn. R. A.(SaffronWalden)

    du Cann, E. D. L.

    Barter, John

    Campbell, Sir David

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

    Batsford, Brian

    Carr, Robert

    Duncan, Sir James

    Beamish, Col. Tufton

    Cary, Sir Robert

    Eden, J. B. (Bournemouth, West)

    Bell, Philip (Bolton, E.)

    Channon, H. P. G.

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

    Bevins, J. R. (Toxteth)

    Clarke, Brig. Terence (Portsmth, W.)

    Emmet, Hon. Mrs. Evelyn

    Biggs-Davison, J. A.

    Cole, Norman

    Errington, Sir Eric

    Bingham, R. M.

    Conant, Maj. Sir Roger

    Erroll, F. J.

    Birch, Rt. Hon. Nigel

    Cooke, Robert

    Fell, A.

    1322

    1323

    Finlay, Graeme

    Kerr, Sir Hamilton

    Redmayne, M.

    Fisher, Nigel

    Kirk, P. M.

    Rees-Davies, W. R.

    Fletcher-Cooke, C.

    Lambton, Viscount

    Remnant, Hon. P.

    Fort, R.

    Lancaster, Col. C. G.

    Ridsdale, J. E.

    Freeth, Denzil

    Langford-Holt, J. A

    Robinson, Sir Roland(Blackpool, S.)

    Galbraith, Hon. T. G. D.

    Leavey, J. A.

    Roper, Sir Harold

    Gammans, Lady

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

    Ropner, Col. Sir Leonard

    George, J. C. (Pollok)

    Legh, Hon. Peter (Petersfield)

    Russell, R. S.

    Glover, D.

    Lindsay, Hon. James (Devon, N.)

    Sharpies, R. C.

    Glyn, Col. Richard H.

    Lindsay, Martin (Solihull)

    Shepherd, William

    Godber, J. B.

    Linstead, Sir H. N.

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

    Goodhart, Philip

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

    Spearman, Sir Alexander

    Gough, C. F. H.

    Longden, Gilbert

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

    Gower, H. R.

    Loveys, Walter H.

    Stanley, Capt. Hon. Richard

    Graham, Sir Fergus

    Lucas, P. B. (Brentford & Chiswick)

    Stevens, Geoffrey

    Grant, Rt. Hon. W. (Woodside)

    Lucas-Tooth, Sir Hugh

    Steward, Harold (Stockport, S.)

    Green, A.

    Macdonald, Sir Peter

    Steward, Sir William (Woolwich. W.)

    Gresham Cooke, R.

    McLaughlin, Mrs. P.

    Stoddart-Scott, Col. Sir Malcolm

    Grimond, J.

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

    Studholme, Sir Henry

    Grosvenor, Lt.-Col. R. G.

    Markham, Major Sir Frank

    Summers, Sir Spencer

    Gurden, Harold

    Marlowe, A. A. H.

    Taylor, Sir Charles (Eastbourne)

    Hall, John (Wycombe)

    Marples, Rt. Hon. A. E.

    Taylor, William (Bradford, N.)

    Hare, Rt. Hon. J. H.

    Marshall, Douglas

    Teeling, W.

    Harris, Reader (Heston)

    Mathew, R.

    Temple, John M.

    Harrison, A. B. C. (Maldon)

    Mawby, R. L.

    Thomas, Leslie (Canterbury)

    Harrison, Col. J. H. (Eye)

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

    Thorneycroft, Rt. Hon. P.

    Harvey, John (Walthamstow, E.)

    Medlicott, Sir Frank

    Turner, H. F. L.

    Heald, Rt. Hon. Sir Lionel

    Molson, Rt. Hon. Hugh

    Turton, Rt. Hon. R. H.

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

    Morrison, John (Salisbury)

    Tweedsmuir, Lady

    Henderson Stewart, Sir James

    Mott-Radclyffe, Sir Charles

    Vane, W. M. F.

    Hicks-Beach, Mar. W. W.

    Nairn, D. L. S.

    Vaughan-Morgan, J. K.

    Hill, Mrs. E. (Wythenshawe)

    Neave, Airey

    Vickers, Miss Joan

    Hill, John (S. Norfolk)

    Nicholson, Sir Godfrey (Farnham)

    Vosper, Rt. Hon. D. F.

    Hinchingbrooke, Viscount

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

    Wade, D. W.

    Hirst, Geoffrey

    Noble, Michael (Argyll)

    Wakefield, Edward (Derbyshire, W.)

    Holland-Martin, C. J.

    Nugent, Richard

    Walker-Smith, Rt. Hon. Derek

    Holt, A. F.

    Oakshott, H. D.

    Wall, Patrick

    Hornby, R. P.

    Ormsby-Gore, Rt. Hon. W. D.

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

    Horobln, Sir Ian

    Osborne, C.

    Ward, Dame Irene (Tynemouth)

    Horsbrugh, Rt. Hon. Dame Florence

    Page, R. G.

    Watkinson, Rt. Hon. Harold

    Howard, John (Test)

    Partridge, E.

    Webbe, Sir H.

    Hughes Hallett, Vice-Admiral J.

    Peel, W. J.

    Webster, David

    Hughes-Young, M. H. C.

    Peyton, J. W. W.

    Whltelaw, W. S. I.

    Hurd, Sir Anthony

    Pickthorn, Sir Kenneth

    Williams, Paul (Sunderland, S.)

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

    Pike, Miss Mervyn

    Williams, R. Dudley (Exeter)

    Hyde, Montgomery

    Pilkington, Capt. R. A.

    Wills, Sir Gerald (Bridgwater)

    Hylton-Foster, Rt. Hon. Sir Henry

    Pitman, I. J.

    Wilson, Geoffrey (Truro)

    lremonger, T. L.

    Pott, H. P.

    Woollam, John Victor

    Jenkins, Robert (Dulwich)

    Powell, J. Enoch

    Jennings, Sir Roland (Hallam)

    Price, David (Eastleigh)

    Johnson, Eric (Blackley)

    Price, Henry (Lewisham, W.)

    TELLERS FOR THE NOES:

    Keegan, D.

    Prior-Palmer, Brig. O. L.

    Mr. Bryan and

    Kerby, Capt. H. B.

    Ramsden, J. E.

    Mr. Chichester-Clark.

    Amendment proposed: In page 14, line 27, at end insert:
    (4) In sections two hundred and fourteen and two hundred and fifteen of the Income Tax Act, 1952 (which refer respectively to a person taking charge of widower's or widow's children or acting as his or her housekeeper, and to a relative taking charge of an unmarried person's young brother or sister), for the
    references to sixty pounds (which indicate the amount of the relief in each case) there shall be substituted references to seventy-five pounds.—(Mr. H. Wilson.)
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 175, Noes 213.

    Division No. 111.]

    AYES

    [7.22 p.m.

    Alnsley, J. W.

    Brockway, A. F.

    Craddock, George (Bradford, S.)

    Albu, A. H.

    Broughton, Dr. A. D. D.

    Cronin, J. D.

    Allaun, Frank (Salford, E.)

    Brown, Rt. Hon. George (Belper)

    Grossman, R. H. S.

    Allen, Arthur (Bosworth)

    Brown, Thomas (Ince)

    Davies, Ernest (Enfield, E.)

    Allen, Scholefteld (Crewe)

    Burke, W. A,

    Davies, Harold (Leek)

    Awbery, S. S.

    Burton, Miss F. E.

    Davies, Stephen (Merthyr)

    Bacon, Miss Alice

    Butler, Herbert (Hackney, C.)

    Deer, G.

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

    Carmichael, J.

    Delargy, H. J.

    Benson, Sir George

    Castle, Mrs. B. A.

    Diamond, John

    Blackburn, F.

    Champion, A. J.

    Ede, Rt. Hon. J. C.

    Blenkinsop, A.

    Chapman, W. D.

    Edelman, M.

    Blyton, W. R.

    Chetwynd, G. R.

    Edwards, Rt. Hn. John (Brighouse)

    Boardman, H.

    Cliffe, Michael

    Edwards, Rt. Hn. Ness (Caerphilly)

    Bottomley, Rt. Hon. A. G.

    Coldrick, W.

    Edwards, W. J. (Stepney)

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

    Collick, P. H. (Birkenhead)

    Evans, Albert (Islington, S.W.)

    Bowles, F. G.

    Corbel, Mrs. Freda

    Fernyhough, E.

    Fletcher, Eric

    Lee, Miss Jennie (Cannock)

    Reynolds, G. W.

    Forman, J. C.

    Lindgren, G. S.

    Rhodes, H.

    Fraser, Thomas (Hamilton)

    Lipton, Marcus

    Roberts, Goronwy (Caernarvon)

    Gibson, C. W.

    Mahon, Dr. J. Dickson

    Robinson, Kenneth (St. Pancras, N.)

    Gooch, E. G.

    McAlister, Mrs. Mary

    Rogers, George (Kensington, N.)

    Greenwood, Anthony

    McInnes, J.

    Ross, William

    Grenfell, Rt. Hon. D. R.

    McKay, John (Wallsend)

    Hoyle, C.

    Grey, C. F.

    MoLeavy, Frank

    Short, E. W.

    Griffiths, David (Rother Valley)

    MacPherson, Malcolm (Stirling)

    Silverman, Julius (Aston)

    Griffiths, Fit. Hon. James (Lianelly)

    Mahon, Simon

    Silverman, Sydney (Nelson)

    Griffiths, William (Exchange)

    Mann, Mrs. Jean.

    Simmons, C. J. (Brierley Hill)

    Hale, Leslie

    Marquand, Rt. Hon. H. A.

    Slater, J. (Sedgefield)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mason, Roy

    Smith, Ellis (Stoke, S.)

    Hamilton, W. W.

    Mayhew, C. P.

    Snow, J. W.

    Hannan, W.

    Monslow, W.

    Sorensen, R. W.

    Hastings, S.

    Moody, A. S.

    Spriggs, Leslie

    Hayman, F. H.

    Morris, Percy (Swansea, W.)

    Stones, W. (Consett)

    Healoy, Denis

    Mort, D. L.

    Strauss, Rt. Hon. George (Vauxhall)

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

    Moss, R.

    Summerskill, Rt. Hon. E.

    Herbison, Miss M.

    Moyle, A.

    Sylvester, G. O.

    Hewitson, Capt. M.

    Mulley, F. W.

    Taylor, Bernard (Mansfield)

    Hobson, C. R. (Keighley)

    O'Brien, Sir Thomas

    Taylor, John (West Lothian)

    Holman, P.

    Oliver, G. H.

    Thomas, Iorwerth (Rhondda, W.)

    Houghton, Douglas

    Oram, A. E.

    Thomson, George (Dundee, E.)

    Hughes, Cledwyn (Anglesey)

    Orbach, M.

    Thornton, E.

    Hughes, Emrys (S. Ayrshire)

    Oswald, T.

    Tomney, F.

    Hughes, Hector (Aberdeen, N.)

    Owen, W. J.

    Viant, S. P.

    Hunter, A. E.

    Padley, W. E.

    Watkins, T. E.

    Hynd, H. (Acorington)

    Palmer, A. M. F.

    Weitzman, D.

    Hynd, J. B. (Attercliffe)

    Parker, J.

    Wells, William (Walsall, N.)

    Irving, Sydney (Dartford)

    Paton, John

    Wheeldon, W. E.

    dancer, B.

    Pearson, A.

    White, Henry (Derbyshire, N.E.)

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

    Peart, T. F.

    Wilkins, W. A.

    Jeger, George (Goole)

    Pentland, N.

    Willey, Frederick

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

    Plummer, Sir Leslie

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

    Jones, R t. Hon. A. Creech (Wakefield)

    Popplewell, E.

    Willis, Eustace (Edinburgh, E.)

    Jones, Jack (Rotherham)

    Prentice, R. E.

    Wilson, Rt. Hon. Harold (Huyton)

    Jones, J. ldwal (Wrexham)

    Probert, A. R.

    Winterbottom, Richard

    Kenyon, C.

    Pursey, Cmdr. H.

    Woof, R. E.

    Key, Rt. Hon. C. W.

    Rankin, John

    Yates, V. (Ladywood)

    King, Dr. H. M.

    Redhead, E. C.

    Zilliacus, K.

    Lawson, G. M.

    Reeves, J.

    TELLERS FOR THE AYES:

    Lee, Frederick (Newton)

    Reid, William

    Mr. Holmes and Mr. J. T. Price

    NOES

    Agnew, Sir Peter

    Conant, Maj. Sir Roger

    Gresham Cooke, R.

    Aitken, W. T.

    Cooke, Robert

    Grimond, J.

    Amory, Fit. Hn. Heathcoat (Tiverton)

    Cordeaux, Lt.-Col. J. K.

    Grosvenor, Lt.-Col. R. G.

    Anstruther-Gray, Major Sir William

    Corfield, F. V.

    Gurden, Harold

    Arbuthnot, John

    Craddock, Beresford (Speithorne)

    Hall, John (Wycombe)

    Armstrong, C. W.

    Crosthwalte-Eyre, Col. O. E.

    Hare, Rt. Hon. J. H.

    Ashton, H.

    Crowder, Sir John (Finohley)

    Harris, Reader (Heston)

    Atkins, H. E.

    Cunningham, Knox

    Harrison, A. B. C. (Maldon)

    Baldock, Lt.-Cmdr. J. M.

    Dance, J. C. G.

    Harrison, Col. J. H. (Eye)

    Baldwin, Sir Archer

    Davidson, Viscountess

    Harvey, John (Walthamstow, E.)

    Barber, Anthony

    Davies, Rt. Hn. Clement(Montgomery)

    Heald, Rt. Hon. Sir Lionel

    Barlow, Sir John

    D'Avigdor-Goldsmid, Sir Henry

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

    Barter, John

    de Ferranti, Basil

    Henderson-Stewart, Sir James

    Batsford, Brian

    Doughty, C. J. A.

    Hicks-Beach, Maj. W. W.

    Beamish, Col. Tufton

    du Cann, E. D. L.

    Hill, Mrs. E. (Wythenshawe)

    Bell, Philip (Bolton, E.)

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

    Hill, John (S. Norfolk)

    Bevins, J. R. (Toxteth)

    Duncan, Sir James

    Hirst, Geoffrey

    Biggs-Davison, J. A.

    Eden, J. B. (Bournemouth, West)

    Holland-Martin, C. J.

    Bingham, R. M.

    Elliott, R. W.(Ne'castleuponTyne, N.)

    Holt, A. F.

    Birch, Rt. Hon. Nigel

    Emmet, Hon. Mrs. Evelyn

    Hornby, R. P.

    Bishop, F. P.

    Errington, Sir Eric

    Horsbrugh, Rt. Hon. Dame Florence

    Black, Sir Cyril

    Erroll, F. J.

    Howard, John (Test)

    Body, R. F.

    Fell, A.

    Hughes Hallett, Vice-Admiral J.

    Bowen, E. R. (Cardigan)

    Fisher, Nigel

    Hughes-Young, M. H. C.

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

    Fletcher-Cooke, C.

    Hurd, Sir Anthony

    Boyle, Sir Edward

    Fort, R.

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

    Braine, B. R.

    Freeth, Denzil

    Hylton-Foster, Rt. Hon. Sir Harry

    Brewis, John

    Galbraith, Hon. T. G. D.

    Iremonger, T. L.

    Browne, J. Nixon (Cralgton)

    Gimmans, Lady

    Jenkins, Robert (Dulwich)

    Bryan, P.

    George, J. C. (Pollok)

    Jennings, Sir Roland (Hallam)

    Burden, F. F. A.

    Glover, D.

    Johnson, Eric (Blackley)

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

    Glyn, Col. Richard H.

    Keegan, D.

    Campbell, Sir David

    Godber, J. B.

    Kerby, Capt. H. B.

    Carr, Robert

    Goodhart, Philip

    Kerr, Sir Hamilton

    Cary, Sir Robert

    Gough, C. F. H.

    Kirk, P. M.

    Channon, H. P. G.

    Gower, H. R.

    Lambton, Viscount

    Chichester-Clark, R.

    Graham, Sir Fergus

    Lancaster, Col. C. G.

    Clarke, Brig. Terence (Portsmth, W.)

    Grant, Rt. Hon. W. (Woodside)

    Langford-Holt, J. A.

    Cole, Norman

    Green, A.

    Leavey, J. A.

    1326

    1327

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

    Osborne, C.

    Studholme, Sir Henry

    Legh, Hon. Peter (Petersfield)

    Page, R. G.

    Summers, Sir Spencer

    Lindsay, Hon. James (Devon, N.)

    Partridge, E.

    Taylor, Sir Charles (Eastbourne)

    Lindsay, Martin (Solihull)

    Peel, W. J.

    Taylor, William (Bradford, N.)

    LInstead, Sir H. N.

    Peyton, J. W. W.

    Teeling, W.

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

    Piokthorn, Sir Kenneth

    Temple, John M.

    Longden, Gilbert

    Pike, Miss Mervyn

    Thomas, Leslie (Canterbury)

    Levey', Walter H.

    Pilkington, Capt. R. A.

    Thorneycroft, Rt. Hon. P.

    Lucas, P. B. (Brantford & Chiswick)

    Pitman, I. J.

    Turner, H. F. L.

    Lucas-Tooth, Sir Hugh

    Pott, H. P.

    Turton, Rt. Hon. R. H.

    Macdonald, Sir Peter

    Powell, J. Enoch

    Tweedsmuir, Lady

    McLaughlin, Mrs. P.

    Price, David (Eastleigh)

    Vane, W. M. F.

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

    Price, Henry (Lewisham, W.)

    Vaughan-Morgan, J. K.

    Maitland, Hon. Patrick (Lanark)

    Prior-Palmer, Brig. 0. L.

    Vickers, Miss Joan

    Markham, Major Sir Frank

    Rarnsden, J. E.

    Vosper, Rt. Hon. D. F.

    Marlowe, A. A. H.

    Redmayne, M.

    Wade, D. W.

    Marples, Rt. Hon. A. E.

    Rees-Davies, W. R.

    Wakefield, Edward (Derbyshire, W.)

    Marshall, Douglas

    Remnant, Hon. P.

    Walker-Smith, Rt. Hon. Derek

    Mathew, R.

    Ridsdale, J. E.

    Wall, Patrick

    Mawby, R. L.

    Robinson, Sir Roland (Blackpool, S.)

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

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

    Roper, Sir Harold

    Ward, Dame Irene (Tynemouth)

    Medlioott, Sir Frank

    Ropner, Col. Sir Leonard

    Watkinson, Rt. Hon. Harold

    Wilson, Rt. Hon. Hugh

    Russell, R. S.

    Webbe, Sir H.

    Morrison, John (Salisbury)

    Sharpies, R. C.

    Webster, David

    Mott. Radclyffe, Sir Charles

    Shepherd, William

    Whitelaw, W. S. I.

    Nairn, D. L. S.

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

    Williams, Paul (Sunderland, S.)

    Heave, Airey

    Spearman, Sir Alexander

    Williams, R. Dudley (Exeter)

    Nicholson, Sir Godfrey (Farnham)

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

    Wills, Sir Gerald (Bridgwater)

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

    Stanley, Capt. Hon. Richard

    Wilson, Geoffrey (Truro)

    Noble, Michael (Argyll)

    Stevens, Geoffrey

    Wooilam, John Victor

    Nugent, Richard

    Steward, Harold (Stockport, S.)

    TELLERS FOR THE NOES:

    Oakshott, H. D.

    Steward, Sir William (Woolwich, W.)

    Mr. Brooman-White and

    Ormsby-Gore, Rt. Hon. W. D.

    Stoddart-Scott, Col. Sir Malcolm

    Mr. Finlay.

    Mr. Houghton: I beg to move, in page 14, line 28, to leave out from "In" to "section".
    I think that it might be for the convenience of the Committee if we considered with this Amendment the Amendments in page 14, line 29, after "1952", insert:
    "(Relief for small incomes), references to three hundred and fifty pounds shall be substituted in all those places for references to three hundred pounds (the income limit for the full relief)";
    and in page 14, line 30, leave out "five" and insert "fifty".
    I wish to apologise to the Financial Secretary for the clumsy reference which I made to him a few moments ago. I do that now because I have a feeling that before I finish speaking on this Amendment I shall be really angry with him.
    Mr. Simon: I would say, before the hon. Gentleman gets really angry, that it was very kind of him to apologise, but it was quite unnecessary because it was perfectly obvious that it was a slip and and I certainly took no offence, as I think he knows.
    Mr. Houghton: We are taking our last stand on the Amendments to this Clause. This is a small yet important Amendment which, if the debate last year is anything to go by, would cost very little. In the OFFICIAL REPORT of 17th June, 1958, the hon. and learned Member said that the
    1328
    cost of this Amendment, which is exactly the same as the one moved a year ago, would be £750,000, which he added,
    "…is a substantial sum."—[OFFICIAL REPORT, 17th June, 1958; Vol 589, c. 932.]
    In the context of this debate it is the merest chicken feed, and with the reinforcement, which I hope I see on the benches opposite, including that of the hon. Lady the Member for Tynemouth (Dame Irene Ward), I hope that we can wring some concession from the Financial Secretary at the end of this debate.
    The purpose of the Amendment is to lift the limit of incomes for small incomes relief from £300 to £350. Small incomes relief provides that where a person not qualifying for age exemption or relief has a total income not exceeding £300, the benefit of, the two-ninths earned income relief shall be granted on unearned income. This relief was first introduced in 1952. The limit of income was then £250. It was raised to £300 in 1955 and has remained at that figure ever since.
    This relief was introduced, if I remember rightly, by the Lord Privy Seal. It was designed to give some relief to people living on small fixed incomes, widows receiving annuities, maiden ladies who had been left modest incomes by their parents, and those who had been compelled prematurely to retire on health grounds and were unable to take up any other occupation. These were the people

    1329
    who were compelled to live on small fixed incomes but who were not old enough to qualify either for age exemption or for age relief.
    As the Committee knows, exemption is granted to a person at 65 years and over where the total income from all sources is not more than £275, and, in the case of a married couple, if either of them is over 65, where the total income from all sources is not more than £440. That is age exemption. That is total exemption from tax if their total incomes are within the limits that I have mentioned.
    Then there is age relief which enables a taxpayer over 65 or a married couple one of whom is over 65 to get the benefit of the two-ninths earned income relief on unearned income if the total income is not more than £800 a year. There are escalator provisions for marginal relief. Those who claim small incomes relief are outside the scope of either age exemption or age relief. It is noticeable that the income ceiling for small incomes relief has not moved upwards in sympathy with the upward movement of both the age exemption and age relief. It seems that the time has come when this income ceiling should be placed a little higher, and our proposal of an uplift of £50 is very modest indeed.
    I emphasise again that in these cases it is not a question of granting exemption from tax. It is only that the benefit of earned income relief is given on income which otherwise would be treated as unearned income—annuities, interest from banks and other modest dividends which these people receive. When the Lord Privy Seal introduced this relief, I think that he did so with the general assent of the House and with the sympathy of everyone who heard his plea for those who were perhaps the worst victims of inflation, the fall in the value of money—those who had no means of protecting themselves from the fall in the purchasing power of their modest incomes.
    I had the honour to move a similar Amendment last year. The Financial Secretary replied to that debate in very pleasant terms, as he always does. No hon. Member rejects so much in such a charming way. I should not mind on this occasion if he were a little short and gruff if at the end be conceded what the Amendment asks.
    1330
    Looking at the OFFICIAL REPORT of a year ago I see that the Financial Secretary said:
    "By this Amendment we would not be helping people in the very poorest circumstances. No one with an income of under £300 would be helped. It is primarily those with incomes between £300 and £350, and to a lesser extent in the band who get marginal relief running up to £397, as in the case of a single man with purely investment income."—[OFFICIAL REPORT, 17th June, 1958; Vol. 589, c. 932–3.]
    Here again we have the old problem of how to give relief to the poorest without giving some relief to those who are not quite so poor, but I stress that in this case the ceiling was lifted to £300 in 1955 and, unless I am very much mistaken, there was an increase in the ceiling of income for age relief given only last year. I am not sure whether at the same time an improvement was made in the age exemption but I believe it was. I have so many notes at my side that it is not always easy to find the correct note on the spur of the moment.
    The Committee must bear in mind that the companion reliefs of age exemption and age relief have both been moved upwards. The age relief ceiling has been moved upwards twice, first to £700 and then to £800, without any change in the ceiling for small incomes relief. I sincerely hope, therefore, that the Financial Secretary will make the concession today. My right hon. Friend the Member for Huyton (Mr. H. Wilson) draws my attention to the fact that the increase in the age exemption ceiling for a single person last year was from £250 to £275.
    Even at this time in the debate our imaginations are still lively enough for us to picture in our minds the plight of these people. They have had a wonderful champion in the hon. Lady the Member for Tynemouth. Other hon. Members have championed this cause, but she has done so especially, and she has done it with courage, with great determination, and sometimes with ruthlessness. I look forward to hearing what she says about the Amendment.
    If it is conceded, I will grant that there is no party capital to be claimed for it. It is a responsibility on the Committee as a whole. It is a small enough thing to ask. This is the final Amendment on the Clause. Other reliefs have been improved. Last year the Financial Secretary said that this relief could not be

    1331
    considered in isolation. Of course, nothing can be considered in isolation in matters of this kind, but there are times when it is right and proper to distinguish one relief from another, as indeed the Chancellor has at times distinguished between this and other reliefs. I, therefore, hope that the Financial Secretary will tell us that his right hon. Friend has authorised him to make the concession.
    7.45 p.m.
    Dame Irene Ward: I always feel that I want to respond to the hon. Member for Sowerby (Mr. Houghton), but I must be very quick on this occasion because we have had a long debate on the Amendments. I feel that I have been rather restrained in the debate, because I thought that many of the claims were very reasonable, and it was only the general pattern of my right hon. Friend's Budget which prevented me from arguing in support of some of them. I think that my hon. and learned Friend the Financial Secretary is well aware how much I should welcome this concession.
    Mr. Sydney Silverman: The hon. Lady could show that in the Division Lobby.
    Dame Irene Ward: There is no point in talking about what will happen in the Division Lobby. The hon. Member has stimulated me to say that I noticed the generosity of the hon. Member for Sowerby in that he made it plain from the beginning that the concessions which have been given in favour of what I call the small fixed income groups started with a Conservative Chancellor of the Exchequer, and year by year we have increased those concessions. For that I am grateful.
    Mr. Silverman: If the hon. Lady will permit me, I will intervene only so far as to say that my muttered interjection was not meant in any unkindly sense. She said that her hon. and learned Friend knew how much she was in revolt. It occurred to me that if she wanted him to know how much she was in revolt, the Division Lobby was the place for him to find out.
    Dame Irene Ward: I am grateful to the hon. Member for that intervention, although, if I may say so, I do not think that my answer is in conflict with his
    1332
    mutterings. His muttering was directed towards suggesting that I might go into the Division Lobby with the Labour Party. It has only made the point a little clearer and wasted a little more time.
    As I was saying, the hon. Member for Sowerby made it clear that all the concessions in respect of the small fixed income groups within the range of the argument have been made by the Conservative Party. I cannot describe myself as an importunate widow and nobody has ever described me as an importunate spinster, but I must tell my hon. and learned Friend that it would give a great many of my hon. Friends and myself great pleasure if this concession were made. I recognise, however, that from time to time I have to allow other people to have a few benefits and that, certainly in political and national life, one cannot be unduly selfish.
    In considering the situation of these people whose case I try to put and whom I try to cherish—because there are so few interested in speaking for them—I would say that if I had to choose between what has been done for them by the Labour Party and what has been done for them by my party, I should unhesitatingly choose my party, because even if we do not get the concession today we may get it in the next Budget.
    Mr. H. Hynd: Under a Labour Government.
    Dame Irene Ward: After long experience of the House of Commons, I have learned that although one does not always win the battle straight away, the time generally comes when one does win it. May I add that I am grateful for the references which the hon. Member for Sowerby made to me?
    I hope that we shall have a favourable reply to the Amendment. If we do not, I still back my own party, because I know that under our political philosophy these people in whom I am deeply interested are much more likely to benefit than they are under the administration of the Labour Party. That is all I have to say. I hope that my hon. and learned Friend will be nice and give us this concession.
    Mr. Ede: My right hon. and hon. Friends and myself were very disappointed when we were told that the last Amendment would cost too much. We were told

    1333
    last year that the suggestion contained in the present Amendment would have cost about £750,000. I suggest to the hon. and learned Gentleman that he has given about £750,000 away to the brewers and that on Report he should remove Clause 5 from the Bill. Then these people could have the very small remission for which my hon. Friend the Member for Sowerby (Mr. Houghton) has asked.
    A secret message appears to have passed between the brewers and the Treasury. No one had heard that the brewers wanted this money. When he had to defend the position, the Economic Secretary said that the brewers had asked for it. Everyone knows that when the party opposite is in power a mere whisper from the brewers has the most tremendous effect forthwith. The first thing that the Tory Party did when it was returned to power was to give the brewers freedom.
    I suggest to the hon. and learned Gentleman that he should explain to the brewers that he wants this £750,000 to devote to these people in very impecunious circumstances. Whenever the brewers reach the same circumstances, they can rest assured that the hon. and learned Gentleman will not turn a deaf ear to any pleas which they may make. There is no trouble this time about the money. The question is the willingness to recognise where relief is needed most.
    Mr. Simon: If the right hon. Member for South Shields (Mr. Ede) will forgive me, I do not think that I will follow him in discussing the position of brewers in relation to this Amendment, except that when I deal with the cost of it I must say that the right hon. Gentleman is under a misapprehension in thinking that there has been any remission of tax, either of £5 million or £750,000, to the brewers. I think that that was pointed out—I was not here—in the debate on Clause 5, dealing with the monopoly value.
    It must not be thought that there is a fund out of which this £750,000, which the Amendment would cost, can be readily found. Nevertheless, it must be obvious to the Committee that, although £750,000 is a substantial sum and not one of which one should talk lightly, the cost in this case cannot be in any way the conclusive argument.
    1334
    If I am bound to advise the Committee to reject the Amendment, as I feel I am, the argument is quite another one. If I have to reject the appeal made by the hon. Member for Sowerby (Mr. Houghton) and that of my hon. Friend the Member for Tynemouth (Dame Irene Ward), who has been such a valiant and active spokesman for the sort of people who would be the beneficiaries under this Amendment, I am conscious that the arguments I make on the other side are arid ones related to the shape of the fiscal system. Nor do I for a moment minimise the force and relevance of the arguments which the hon. Members advanced.
    The Amendment would help those persons under 65 years of age whose income is between £300 and £350. Undoubtedly, a substantial number of those persons are in difficult circumstances. I am thinking of widows and persons who have had to retire prematurely through ill-health, and so on, living on small investment incomes. On the other hand, it is only right to recognise that in this group are many others who are not in those circumstances. One example is a young person just starting out on his ordinary career who has a small investment income, for example, something he has inherited or which has been bequeathed to him. Although the group who would benefit undoubtedly includes some needy people who could well do with the assistance, it is not a group consisting of the most needy, because the most needy earn under £300 and have been the beneficiaries of this relief in the past since its institution in 1952 and its increase in 1955. Nor are they necessarily exclusively people of the class which the hon. Member for Sowerby and my hon. Friend very rightly have in mind.
    The hon. Member for Sowerby reminded us that this relief was instituted in 1952. Without making any sort of party point, I think that the reasons given by my hon. Friend are valid. The relief was raised in 1955 from £250 to £300 because of the increase in the personal allowances in that year. Of all the allowances, this is essentially the one which should go with the personal allowances.
    The reason why it was raised in 1955 was that the raising of the personal allowances in 1955 meant that £309 of the income of a married couple became exempt. Under those circumstances, there

    1335
    was a clear case for raising this relief from £250 to £300. The married person's relief is till £240, so that the exemption point is still £309. Therefore, it would create an anomaly to raise this relief to £350 as proposed by the Amendment.
    I am conscious that that is an arid argument compared with the considerations advanced by the hon. Member for Sowerby and my hon. Friend. Nevertheless, it is a valid argument and it is one that should compel the Committee to vote against the Amendment. I could not help calling to mind the illiterate film star who thought that letters "y-e-s" spelt "Mink" and I could not help thinking that there is very little mink in the life of a Financial Secretary. He spends most of the time saying "No". He says "No" to his colleagues and, unfortunately, "No" to the Committee, however agreeably Amendments are moved.
    It is my duty, once again, to advise the Committee to reject the Amendment. We all look forward to the time when this relief can be increased at the same time as the personal allowances can be improved. Nor is there any reason, if things continue as they have in these past years, why that should not happen. I am bound to tell the Committee that, as by a recent vote of the Committee the personal allowances remain the same, this is not the time to accept the Amendment.
    8.0 p.m.
    Mr. Houghton: That reply is very disappointing. I am grateful to the hon. Member for Tynemouth (Dame Irene Ward) for her contribution to the debate. Everyone will understand if she feels unable to support the Amendment in the Lobby. We fully understand that overtures made from time to time from one side of the Committee to another to enter the opposing Lobby are rarely responded to, because we do not do business in that way. No one will accuse the hon. Lady of lacking in courage. At present, she is fairly content, I think, with the Budget and all its works and will be prepared to leave this battle to be fought another day. I am sorry about that. I had hoped that she would feel rather strongly about it now.
    The Financial Secretary began, I thought, by almost destroying the basis upon which the relief was introduced.
    1336
    When the relief was introduced in 1952 it applied then, as it does today, to what, I imagine, are the comparatively rare cases where a relatively young person starting out on life's work has unearned income, and whose total income will still be below the ceiling applicable to this relief.
    It could happen, probably almost momentarily, before such a person had entered full earning capacity, but had the Lord Privy Seal, when Chancellor, felt that it was desirable or necessary to protect the relief from that sort of case he would not have had any difficulty in introducing some qualification to that end. He did not. I should imagine that he thought that, as the number of cases would be so small, it was not worth bothering about. Therefore, the hon. and learned Gentleman should not undermine, as he did, the basis upon which the relief was first introduced by general assent of the Committee and of the House.
    The relationship between one set of personal reliefs and another is, admittedly, always a difficulty. "When father says turn, we all turn "—but, until he does, no one can turn at all, because everything must depend on something else. That seems to be the mischief of a good deal of this legislation. It seems impossible for the Committee to make a small concession or remedy a relatively small grievance without stringing the thing out over the whole field of personal reliefs. And then the Financial Secretary says," Oh, this is hopeless. To meet a comprehensive demand would entail the loss of far too much revenue." So we go round in circles.
    What the Financial Secretary has done has been to refer us back to the matters that we were discussing earlier—and to some matters that we have not raised at all—as reasons for his not being able to move on this small relief without introducing anomalies. Sometimes, it is worth while saying, "To the devil with anomalies." They are not all that sacred; they are not all that sancrosanct. On occasion, one can make a relief without following it logically into other ranges of relief and taxation.
    It is, of course, easier to distinguish between concessions given to old age and the normal liability to tax of a person who is not old. If differences between the

    1337
    tax liability of old people and not so old people were today regarded as anomalies, some adjustments would not have been made either in age relief or age exemption—and particularly in age exemption, because the income of the married couple which is completely exempt from tax under age exemption is not exempt in the hands of a married couple one of whom is not 65. That has been justified on the grounds of a concession to old age.
    This concession would be made largely—I should say predominantly—to persons in indifferent health, in difficult circumstances, who are having to make do on very inadequate resources—the kind of genteel poverty that is so distressing to witness. These are the people who have been used to comforts and to a standard of life somewhat higher—in many cases, much higher—than they are now able to enjoy.
    They are a class apart. They are not part of the earning community. They are not found among those who can supplement their investment income by earnings. Many of them will be between 60 and 65—over the pension age for women—but will not qualify for age exemption until both reach the age of 65. All these conciderations would be reliefs were this Amendment accepted.
    I shall not get angry, I am only very disappointed that the hon. and learned Gentleman has not been able to meet us in the last of a long string of Amendments. I sometimes wonder what is the meaning of the term "parliamentary government". One goes through these processes hour by hour and day by day, but rarely ever can the House or Committee make its will effective. 1 am sure that if it were left to hon. Members on both sides, who had listened to the debate, to decide whether or not this small concession should be given, we should, without doubt, get it.
    But the customary discipline is imposed on right hon. and hon. Gentlemen opposite, and none can break away from it—on either side, so it seems—to assert Parliament's predominant will and power to give this concession to some of the helpless members of our community. As long as we endure this in the name of parliamentary government it is a challenge to our system, to our honesty and to our courage, and we have to defend it before the people whom we ask to believe in parliamentary government.
    Question put, That the words proposed to be left out stand part of the Clause:
    The Committee divided: Ayes 212. Noes 177.

    Division No. 112.]

    AYES

    [8.10 p.m.

    Agnew, Sir Peter

    Cary, Sir Robert

    Glyn, Col. Richard H.

    Aitken, W. T.

    Channon, H. P. G.

    GOdber, J. B.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Clarke, Brig. Terence (Portsmth, W.)

    Goodhart, Philip

    Anstruther-Gray, Major Sir William

    Conant, Maj. Sir Roger

    Gough, C. F. H.

    Arbuthnot, John

    Cooke, Robert

    Gower, H. R.

    Armstrong, C. W.

    Cordeaux, Lt.-Col. J. K.

    Graham, Sir Fergus

    Ashton, H.

    Garfield, F. V.

    Grant, Rt. Hon. W. (Woodside)

    Atkins, H. E.

    Craddock, Beresford (Spelthorne)

    Green, A.

    Baldock, Lt.-Cmdr. J. M.

    Crosthwaite-Eyre, Col. 0. E.

    Gresham Cooke, R.

    Baldwin, Sir Archer

    Crowder, Sir John (Finchley)

    Grimond, J.

    Barber, Anthony

    Cunningham, Knox

    Gurden, Harold

    Barlow, Sir John

    Dance, J. C. G.

    Hall, John (Wycombe)

    Barter, John

    Davidson, Viscountess

    Harris, Reader (Heston)

    Batsford, Brian

    D'Avigdor-Goldsmid, Sir Henry

    Harrison, A. B. C. (Maldon)

    Beamish, Col. Tufton

    de Ferranti, Basil

    Harrison, Col. J. H. (Eye)

    Bovine, J. R. (Toxteth)

    Doughty, C. J. A.

    Harvey, SirArthur Vere (Macclesf'd)

    Biggs-Davison, J. A.

    du Cann, E. D. L.

    Harvey, John (Walthamstow, E.)

    Bingham, R. M.

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

    Heald, Rt. Hon. Sir Lionel

    Bishop, F. P.

    Duncan, Sir James

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

    Black, Sir Cyril

    Eden, J. B. (Bournemouth, West)

    Henderson, John (Cathcart)

    Body, R. F.

    Eillott, R.W.(Ne'castle upon Tyne.N.)

    Henderson-Stewart, Sir James

    Bonham Carter, Mark

    Emmet, Hon. Mrs. Evelyn

    Hicks-Beach, Maj. W. W.

    Bowen, E. R. (Cardigan)

    Errington, Sir Eric

    Hill, Mrs. E. (Wythenehawe)

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

    Erroll, F. J.

    Hirst, Geoffrey

    Boyle, Sir Edward

    Fell, A.

    Holland-Martin, C. J.

    Braine, B. R.

    Finlay, Graeme

    Holt, A. F.

    Brewis, John

    Fisher, Nigel

    Hornhy, R. P.

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

    Fletcher-Cooke, C.

    Horsbrugh, Rt. Hon. Dame Florence

    Brooman-White, R. C.

    Fort, R.

    Howard, Hon. Greville (St. Ives)

    Bryan, P.

    Freeth, Denzil

    Howard, John (Test)

    Burden, F. F. A.

    Galbraith, Hon. T. G. D.

    Hughes Hallett, Vice-Admiral J.

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

    Gammans, Lady

    Hughes-Young, M. H. C.

    Campbell, Sir David

    George, J. C. (Pollok)

    Hurd, Sir Anthony

    Carr, Robert

    Glover, D.

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

    Hylton-Foster, Rt. Hon. Sir Harry

    Neave, Airey

    Steward, Harold (Stockport, S.)

    Iremonger, T. L.

    Nicholson, Sir Godfrey (Farnham)

    Steward, Sir William (Woolwich, W.)

    Jenkins, Robert (Dulwich)

    N icolson, N. (B'n'm'th, E. & Chr'oh)

    Stoddart-Scott, Col. Sir Malcolm

    Jennings, Sir Roland (Hallam)

    Noble, Michael (Argyll)

    Studholme, Sir Henry

    Johnson, Eric (Blackley)

    Nugent, Richard

    Summers, Sir Spencer

    Keegan, D.

    Oakshott, H. D.

    Taylor, Sir Charles (Eastbourne)

    Kerby, Capt. H. B.

    Ormsby-Gore, Rt. Hon. W. D.

    Taylor, William (Bradford, N,)

    Kerr, Sir Hamilton

    Osborne, C.

    Teeling, W.

    Kirk, P. M.

    Page, R. G.

    Temple, John M.

    Lambton, Viscount

    Partridge, E.

    Thomas, Leslie (Canterbury)

    Lancaster, Col. C. G.

    Peel, W. J.

    Thompson, R. (Croydon, S.)

    Langford-Holt, J. A.

    Peyton, J. W. W.

    Thorneycroft, Rt. Hon. P.

    Leavey, J. A.

    Pickthorn, Sir Kenneth

    Turner, H. F. L.

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

    Pike, Miss Mervyn

    Turton, Rt. Hon. R. H.

    Legh, Hon. Peter (Petersfield)

    Pilkington, Capt. R. A.

    Tweedsmuir, Lady

    Lindsay, Hon. James (Devon, N.)

    Pitman, I. J.

    Vane, W. M. F.

    Lindsay, Martin (Solihull)

    Pitt, Miss E. M.

    Vaughan-Morgan, J. K.

    Linstead, Sir H. N.

    Pott, H. P.

    Vickers, Miss Joan

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

    Powell, J. Enoch

    Vosper, Rt. Hon. D. F.

    Longden, Gilbert

    Price, David (Eastleigh)

    Wade, D. W.

    Loveys, Walter H.

    Price, Henry (Lewisham, W.)

    Wakefield, Edward (Derbyshire, W.)

    Lucas, P. B. (Brentford & Chiswick)

    Prior-Palmer, Brig. O. L.

    Walker-Smith, Rt. Hon. Derek

    Lucas-Tooth, Sir Hugh

    Ramsden, J. E.

    Wall, Patrick

    Macdonald, Sir Peter

    Rawlinson, Peter

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

    McLaughlin, Mrs. P.

    Redmayne, M.

    Ward, Dame Irene (Tynemouth)

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

    Rees-Davies, W. R.

    Webbe, Sir H.

    Maitland, Hon. Patrick (Lanark)

    Remnant, Hon. P.

    Webster, David

    Markham, Major Sir Frank

    Ridsdale, J. E.

    Whitelaw, W. S. I.

    Marlowe, A. A. H.

    Roper, Sir Harold

    Williams, Paul (Sunderland, S.)

    Marples, Rt. Hon. A. E.

    Ropner, Col. Sir Leonard

    Williams, R. Dudley (Exeter)

    Marshall, Douglas

    Russell, R. S.

    Wills, Sir Gerald (Bridgwater)

    Mathew, R.

    Sharpies, R. C.

    Wilson, Geoffrey (Truro)

    Mawby, R. L.

    Shepherd, William

    Wolrige-Gordon, Patrick

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

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

    Woollam, John Victor

    Medlicott, Sir Frank

    Spearman, Sir Alexander

    Molson, Rt. Hon. Hugh

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

    TELLERS FOR THE AYES

    Mott-Radclyffe, Sir Charles

    Stanley, Capt. Hon. Richard

    Mr. Cbichester-Clark and

    Nairn, D. L. S.

    Stevens, Geoffrey

    Mr. J. E. B. Hill.

    NOES

    Ainsley, J. W.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Kenyon, C.

    Albu, A. H.

    Edwards, W. J. (Stepney)

    Key, Rt. Hon. C. W.

    Allaun, Frank (Salford, E.)

    Evans, Albert (Islington, S.W.)

    King, Dr. H. M.

    Allen, Arthur (Bosworth)

    Evans. Edward (Lowestoft)

    Lawson, G. M.

    Allen, Scholefield (Crewe)

    Fernyhough, E.

    Lee, Frederick (Newton)

    Awbery, S. S.

    Fletcher, Eric

    Lee, Miss Jennie (Cannock)

    Bacon, Miss Alice

    Forman, J. C.

    Lindgren, G. S.

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

    Fraser, Thomas (Hamilton)

    Lipton, Marcus

    Benson, Sir George

    Gibson, C. W.

    Mahon, Dr. J. Dickson

    Blackburn, F.

    Gooch, E. G.

    McAlister, Mrs. Mary

    Blenkinsop, A.

    Gordon Walker, Rt. Hon. P. C.

    McCann, J.

    Blyton, W. R.

    Greenwood, Anthony

    MacGoll, J, E.

    Boardman, H.

    Grenfell, Rt. Hon. D. R.

    McInnes, J.

    Bottomley, Rt. Hon. A. G.

    Grey, C. F.

    McKay, John (Wallsend)

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

    Griffiths, David (Rother Valley)

    McLeavy, Frank

    Bowles, F. G.

    Griffiths, Rt. Hon. James (LianellY)

    MacPherson, Malcolm (Stirling)

    Braddock, Mrs. Elizabeth

    Griffiths, William (Exchange)

    Mahon, Simon

    Brockway, A. F.

    Hale, Leslie

    Mann, Mrs. Jean

    Broughton, Dr. A. D. D.

    Hall, Rt. Hn. Gienvil (Caine Valley)

    Marquand, Rt. Hon. H. A.

    Brown, Rt. Hon. George (Belper)

    Hamilton, W. W.

    Mason, Roy

    Brown, Thomas (Ince)

    Hannan, W.

    Mayhew, C. P.

    Burke, W. A.

    Hastings, S.

    Monslow, W.

    Burton, Miss F. E.

    Hayman, F. H.

    Moody, A. S.

    Butler, Herbert (Hackney, C.)

    Healey, Denis

    Morris, Percy (Swansea, W.)

    Carmichael, J.

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

    Mort, D. L.

    Castle, Mrs. B. A.

    Herbison, Miss M.

    Moss, R.

    Champion, A. J.

    Hewitson, Capt. M.

    Moyle, A.

    Chapman, W. D.

    Hobson, C. R. (Keighley)

    Mulley, F. W.

    Chetwynd, G. R.

    Holman, P.

    O'Brien, Sir Thomas

    Cliffe, Michael

    Houghton, Douglas

    Oliver, G. H.

    Coldrick, W.

    Hughes, Cledwyn (Anglesey)

    Oram, A. E.

    Collick, P. H. (Birkenhead)

    Hughes, Emrys (S. Ayrshire)

    Orbach, M.

    Corbet, Mrs. Freda

    Hughes, Hector (Aberdeen, N.)

    Oswald, T.

    Craddock, George (Bradford, S.)

    Hunter, A. E.

    Owen, W. J.

    Cronin, J. D.

    Hynd, H. (Accrington)

    Padley, W. E.

    Crossman, R. H. S.

    Hynd, J. B. (Attercliffe)

    Palmer, A. M. F.

    Davies, Harold (Leek)

    Irving, Sydney (Dartford)

    Parker, J.

    Davies, Stephen (Merthyr)

    Danner, B.

    Paton, John

    Deer, G.

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

    Pearson, A.

    Deiargy, H. J.

    Jeger, George (Goole)

    Peart, T. F.

    Diamond. John

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

    Pentland, N.

    Ede, Rt. Hon. J. C.

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

    Plummer, Sir Leslie

    Edelman, M.

    Jones, Jack (Rotherham)

    Prentice, R. E.

    Edwards, Rt. Hon. John (Brighouse)

    Jones, J. Idwal (Wrexham)

    Price, Philips (Gloucestershire, W.)

    1340

    1341

    Probert, A. R.

    Skeftington, A. M.

    Watkins, T. E.

    Ptirsey, Cmdr. H.

    Slater, J. (Sedgefield)

    Wells, William (Walsall, N.)

    RanPin, John

    Smith, Ellis (Stoke, S.)

    Wheeldon, W. E.

    Redhead, E. C.

    Snow, J. W.

    White, Henry (Derbyshire, N.E.)

    Reeves, J.

    Sorensen, R. W.

    Wilkins, W. A.

    Reid. William

    Spriggs, Leslie

    Willey, Frederick

    Reynolds, G. W.

    Stones, W. (Consett)

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

    Rhodes, H.

    Summerskill, Rt. Hon. E.

    Willis, Eustace (Edinburgh, E.)

    Robinson, Kenneth (St. Pancras, N.)

    Sylvester, G. O.

    Wilson, Rt. Hon. Harold (Huyton)

    Rogers, George (Kensington, N.)

    Taylor, Bernard (Mansfield)

    Winterbottom, Richard

    Ross, William

    Taylor, John (West Lothian)

    Woof, R. E.

    Royle, C.

    Thomas, lorwerth (Rhondda, W.)

    Yates, V. (Ladywood)

    Short, E. W.

    Thomson, George (Dundee, E.)

    Zilliacus, K.

    Silverman, Julius (Aston)

    Thornton, E.

    Silverman, Sydney (Nelson)

    Tomney, F.

    TELLERS FOR THE NOES:

    Simmons, C. J. (Brierley Hill)

    Viant, S. P.

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

    Clause, as amended, ordered to stand part of the Bill.

    Clause 17.—(RESTORATION OF INVEST MENT ALLOWANCES, AND ADDITIONAL GRANT OF INITIAL ALLOWANCES IN CERTAIN CASES.)
    Mr. John Diamond: I beg to move, in page 14, line 48, at the end to insert:
    Provided that for the purposes of this section the said subsections (2) to (5) shall have effect as if in subsection (2) and subsection (5) there was substituted the word "one-eighth" for the word "one-tenth" and in subsection (3) and subsection (4) there were substituted the word "one-quarter" for the word "one-fifth".
    It might he convenient if I were first to indicate the purpose of the Amendment, then attempt to explain its effect, then deal with the cost, and finally give the reasons why the Government should accept the Amendment. The purpose is to assist the Chancellor in his objective of arresting
    "…the prospective decline in private investment in the manufacturing sector."—[OFFICIAL REPORT, 7th April, 1959; Vol. 603, c. 58.]
    The way to do that, in the view of the Chancellor, is to introduce investment allowances which will, he thinks, give a fillip to increased investment in the private sector.
    As the law stands at present, and before the Finance Bill becomes an Act, the position is that there are initial allowances —a method of expediting the allowance given to businesses in respect of plant and similar items. These initial allowances are given for three main categories—industrial and agricultural buildings, new plant and machinery, and mining works. The Chancellor has proposed in this Bill that instead of those initial allowances, there shall be (a) an investment allowance for some part of the plant or buildings
    1342
    and (b) an initial allowance for the balance.
    In the case of industrial buildings, for example, instead of an initial allowance of 15 per cent., there is a reduced initial allowance of only 5 per cent. and the difference of 10 per cent. becomes an investment allowance, and so on throughout these different categories. The effect of what the Chancellor is proposing, quite simply, is to give a more attractive investment allowance in place of initial allowances to some extent. The purpose of the Amendment is to increase the attraction in order to make it a worth-while attraction.
    Before one attempts to give reasons one should make an estimate of the cost of what one is proposing. We on this side of the Committee are always in great difficulty in estimating cost. Indeed, if I were to try to put an accurate figure on the cost, with my lack of information, I should probably be thrown out of the institute to which I have the honour to belong.
    I have gone into this matter as carefully as I can, and have made appropriate calculations, and, having regard to the fact that the Amendment deals with it on a proportionate basis, I have come to the conclusion that, as the cost of the Chancellor's proposal in the current year is nil, the proportionate increase would also be nil. I think, therefore, that we are on common ground so far. I recognise that for a subsequent year the cost of the Chancellor's proposal would be some £9½ million and it is clear that the cost of these proposals would be perhaps £2 million, perhaps £3 million, more. At all events, we are dealing with a figure which is of no account in the current year and may be a small but not impossible figure to deal with in future years.

    1343
    May I say why I do not think the Chancellor's proposals are sufficiently attractive? First, the Chancellor's proposal is a negligible one, in my opinion. It is true that an investment allowance is a form of subsidy. As the Committee will well understand, an investment allowance is something that is given in addition to anything else. It is something that is given early and taken back later on. An investment allowance is, therefore, something given in addition by way of bonus or subsidy, or whatever it is likely to be called, to encourage investment of this particular kind.
    I say it is a negligible one because, even if we take the highest rate proposed by the Chancellor of 20 per cent., it is not more than sufficient to cover the erosion of inflation. Every director of a company or owner of a business who has to buy plant knows that when he comes to renew it, it costs more than did the plant which he had previously and which has become out of date. If we take an ordinary average case of an item of plant which lasts perhaps ten years, and take the simple figure of 2 per cent. for each year's reduction in the value of money, over a period of ten years we get a figure of 20 per cent. In short, anybody renewing plant which cost £100 would have to pay, in these circumstances, £120, because the cost of the item has become more expensive in the meantime. He pays £120 to get exactly the same piece of plant that he had in his works previously.
    Under the proposals of the Chancellor, he will get an allowance of £20 additional investment allowance, and will get £100 in the ordinary way as initial allowance, capital allowance and so on, and will thus receive £120. The point I am making is that we should not compare the £120 which he receives with the £100 which the plant costs originally, but should compare the £120 which he receives with the £120 which it costs to replace the plant. I am making assumptions, but I have to make an assumption of some kind, and I am making it in favour of the Chancellor, because I am assuming that his figure is 20 per cent., when in fact the inflation may be of a very much higher order than 2 per cent. over ten years. It is difficult to think of any recent Conservative Government which has been in power for ten years and has kept inflation down to 20 per cent. over those ten years. I am there
    1344
    fore making these assumptions, which I think are reasonable.
    The first point I make, therefore, is that this is a negligible inducement. The second point is that it is also a very remote inducement. Why is it going to cost the Chancellor nothing to give this inducement? The answer is, because the person receiving it does not get any benefit this year. A business man who receives this investment allowance receives it on plant bought this year, but he gets it at a time when his accounts for the year are completed and form the basis of his assessment for subsequent Income Tax years. Therefore, anybody who has been encouraged by the Finance Bill—and we want them to be encouraged to buy new plant, to modernise and make their works more efficient—on making inquiries will find that he is called upon to lay out his money now to get the benefit of the investment allowance in February, 1961, or later. February, 1961, would be the earliest date on which he would pay his 1960–61 Income Tax, based on his trading transactions when the machine is bought. He might pay his tax later, in March, April or May, and therefore there would be further delay.
    My second point is that the inducement which the Chancellor is offering is remote, as well as negligible. My third point, and I have hinted at this before, is that it is also an unreliable one. The last time we had investment allowances, they lasted two years, and no sooner were people well under way in making arrangements for major reconstruction, on the basis of the inducements offered, than the investment allowance was withdrawn, with certain protection, I admit. The investment allowance was withdrawn, but expenditure contracted for was allowed for this purpose even if the expenditure itself came to be met after the date when it was withdrawn. Provided that it was contracted for, the expenditure was allowed.
    I do not think this is sufficient, but I admit that though I have given the matter great thought, I cannot think of any other way in which the investment allowance can be withdrawn, and yet protection can be given to those who have taken considerable steps towards modernising their plant and yet have not entered into a contract before the date at which the investment was once more withdrawn. I

    1345
    must refer to this because, as the Chancellor indicated, he hoped that there would be circumstances in which it was no longer necessary to have investment allowances. I am particularly concerned about this, and the Chancellor knows that I am not alone in this, as I referred to it earlier and The Times referred to it in a leader, as I recollect, at the time.
    I refer to this because it is a general concern, and the Chancellor has made it clear that the investment allowance will be withdrawn again. I admit that I can think of no satisfactory remedy for administrative purposes for dealing with this point. Therefore, one comes back to the main argument that this has to be an attractive proposition to induce the business man to do what we want him to do —to modernise, to become more efficient and to start productivity on the up grade, instead of on the down grade, as it has been for so long.
    One is bound to recognise that just as last year, if I may refresh the Chancellor's memory, he was flexible-minded enough to recognise that the passage of time between his Budget speech and the finalisation of the Finance Bill was sufficient to make him change his mind as to the level of initial allowances at that time and to increase the rate of initial allowances, so I suggest to the right hon. Gentleman that if he reconsiders the facts of today as against the background of the Economic Survey, which, no doubt, was at the back of his mind at the time he made his Budget speech, he will realise that that was an unwarranted, optimistic Survey and that what has happened since has not justified that at all.
    We have had statements from the Paymaster-General that we are now on the upgrade, but there is no evidence whatever for that in the figures. The figures indicate that productivity, which we are after, and production, which we are concerned with in the Amendment, have not gone up as they should have done and that something, therefore, is needed as compared with what the Chancellor thought was needed judging by the Treasury papers at that time.
    8.30 p.m.
    I suggest to the Chancellor, therefore, that as the inducement offered is negligible. remote and unreliable he ought to accept our Amendment, which would
    1346
    give just that little extra. That is what the Amendment would do. It transcends the sound barrier which the Chancellor has imposed of making investment allowances together with initial allowances the same as they would otherwise have been. The Amendment would give that little bit more.
    Investment allowances and initial allowances are now to be a little more than they were. There is now to be a little attraction—not an enormous or expensive one—to those who are responsible for running businesses which involve plant, owning industrial and agricultural buildings and running mines. The Amendment would give them the necessary encouragement to do what the Chancellor wants and what we all want, namely, to bring into immediate consideration the plans for modernisation which they otherwise would not have brought into consideration until much later. For these reasons, I hope that the Chancellor will accept this modest Amendment.
    The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): I enjoy following the hon. Member for Gloucester (Mr. Diamond) on a subject like this, because he speaks with a great and intimate knowledge of the problems involved. I find very little to quarrel with in the speech which the hon. Member has just made. I acknowledge that the right amount of encouragement to give in a matter like this is essentially a matter of judgment. I do not want to pontificate, or to be dogmatic that I have judged the matter aright. I want to try to explain why I cannot accept the Amendment, although, as I say, I do not quarrel with the statement that the hon. Member has made.
    I have an estimate of what the Amendment would cost and I will give it to the Committee, because it would appear to be rather more than the hon. Member had in mind. We estimate that the cost of my proposals will be nothing this year, but in the year 1960–61 about £9½ million and in the year 1961–62 about £15 million. Our estimate is that the increases that the hon. Member proposes would cost nothing this year but in 1960–61 they would involve an extra cost of £13 million and in 1961–62 an increased cost of £23 million.

    1347
    Those figures seem big. They arise, I think, from the fact, which the hon. Member has already pointed out, that my proposals, because the total remains the same, very largely replace the initial allowances in the earlier years by investment allowances, whereas the hon. Member's proposal would be something in addition to the present total of investment allowance and initial allowance.
    I want to explain why I consider that my proposals will be sufficient. Again, however, I say, without being absolutely certain, that in the result they will turn out to be just right. The object, which the hon. Member has understood perfectly clearly, is to fortify a bit further the stimulus, and the steadiness following from it, which I gave last year in the Budget by increasing the initial allowances by 50 per cent., and to do something to encourage those who are planning investment expenditure to put that expenditure in hand now rather than a bit later, when there may not be as much spare capacity in industry as there has been recently and is likely to be in the immediate future.
    Last year, in deciding on the stimulus, I had to be guided by the fact that at that time it was uncertain whether world trade was still receding, whether it had stabilised or whether it had begun to recover. Also, I was not certain—and the economists in general could not tell me—whether we had at that time got rid of our domestic inflation.
    Thirdly, it was far from clear what precisely would be the course of private industrial investment, and private investment other than industrial investment, during the forthcoming 12 months. I then thought, and still think, that it was right to proceed in the matter, as in other matters, very cautiously, I gave a stimulus by increasing the initial allowances, but at that time right hon. and hon. Members opposite pointed out to me that I would have given a brisker stimulus if I had restored the investment allowances. For the reasons that I have given I did not feel able at that time to give a brisk encouragement but only a slight encouragement.
    This year, in present circumstances—our balance of payments position is stronger and we can face some increase in imports —and, because of our internal position,
    1348
    with inflation having been eliminated, I felt that I could safely go a bit further in this direction, but not too far. I have therefore decided that the amount which I have proposed is about right, but time may show that the hon. Gentleman's proposals were nearer what was required than mine. I feel at present that I must back my own judgment, but, as I have said, if it turns out otherwise, the hon. Member is perfectly free to point it out to me, as I have no doubt he will. In addition, there is the question of the quite substantial difference in cost.
    The hon. Member thought that my proposal to substitute an investment allowance for two-thirds of the present initial allowance, leaving the other one-third as an initial allowance, would not have much effect. He thinks that the effect will be negligible, remote and not reliable. I doubt whether it will be negligible. Psychologically, industrialists who are wondering what to do are influenced much more by something which they will receive in addition to the full cost of the plant concerned than by initial allowances. Psychologically, it will certainly have an effect on marginal cases where industrialists are hesitating. I doubt whether the fact that the cash, as it were, is not received now but later will be a severe disincentive, although it will certainly detract in some cases.
    The hon. Gentleman also said that my proposal was not reliable. I agree that two views can be held about this. The question is whether the putting on and taking off of investment allowances is a reasonable instrument for the Government to use in influencing the level of industrial investment. Some people say that it is not, that it may create uncertainty in the minds of businessmen and that they would not know where they were. I appreciate that, but, on the other hand, it is very important that the Government should have some instrument of influencing industrial investment beyond influencing it through the money rates and monetary control.
    After a good deal of consideration—I admit that I have sometimes thought that there was a good deal of force in the other view—I feel that it is a legitimate instrument for the Government to use, but they must not expect it to have dramatic effects. If they apply it with the kind of warning that I gave, that economic circumstances may arise where

    1349
    it would no longer be appropriate for the authorities deliberately to encourage and accelerate industrial development, and it might then be inappropriate any longer to retain the investment allowance and it would have to come off.
    If and when that happened, I would think it right, as I said in reply to the hon. Gentleman the other day, for the Government to safeguard the position of those who have entered into contracts on the basis of the investment allowance. I would also agree that if it is put on and taken off too frequently—this applies to most instruments of control—it has an upsetting effect.
    That is all I want to say to the Committee. I can only express my regret that, after considering the Amendment, its cost and its effects, I still feel that my proposal is about right this year. Therefore, my advice to the Committee must be not to accept the hon. Gentleman's suggestion, but, in saying that, I think it was entirely relevant that his view should have been put to the Committee.
    Mr. E. Fletcher: I think that all of us on this side of the Committee agree with the Chancellor in his conclusion that it is right for the Government to use this instrument for increasing industrial and economic investment. I am afraid, however, that a good many people will be rather disturbed by the Chancellor's concluding remarks about the possibility of the investment allowances not being regarded as permanent or quasi-permanent.
    I realise that there is a sense in which a Parliament cannot commit its successors and that a Chancellor of the Exchequer cannot commit his successors, but there is a very widespread feeling in industry, as was pointed out by my hon. Friend the Member for Gloucester (Mr. Diamond) on an earlier occasion and today, that if the use of this instrument is to have the desired effect of stimulating industry, as the Chancellor hopes and as we all hope, it is necessary that there should be some certainty in the minds of industrialists that investment allowances will not suddenly be withdrawn. It is reasonable to expect that there should be a fair measure of certainty about this.
    As I understand the Chancellor's remarks, he has said that circumstances may change so dramatically that a
    1350
    different policy may become necessary in a different phase of our economic situation. Apart from that very proper reservation, I hoped that the Chancellor would have been able to go further than he has gone. He said that if at any time the investment allowances were withdrawn he hoped that the then Chancellor of the Exchequer would preserve the benefits of the investment allowances in respect of contracts already entered into. I do not think that that goes sufficiently far to allay the fears of the business community.
    The mere entering into of a contract ought not to be the real test. A great many companies of various kinds will, on the strength of these investment allowances, make plans for capital expansion over a period of time, plans which may take two or three years to mature. As we all know, this will cost the Government nothing this year. One cannot measure this kind of commitment and this kind of contemplated expansion in a mere twelve months or even a period of two years. The plans have first to be made. Very often the time for entering into a contract comes at a relatively late date in the development plan which a company has to undertake.
    8.45 p.m.
    I hope that it will be recognised by both the Chancellor and the Committee that if, on the strength of the investment allowances now being enacted, a company prepares a scheme of capital development which may be spread over two, three or four years, it should be able to look forward with confidence to implementing that planning capital expansion in reliance on these investment allowances, without their being suddenly withdrawn, and with confidence that if for some reason there is subsequently a change and no future investment allowances are granted, there will be complete protection and complete safeguarding for all the steps taken as a result of the new policy upon which we are now embarking.
    Mr. Diamond: Does not my hon. Friend agree that there may be circumstances—and, indeed, there are—in which a business finds itself absolutely committed to a redevelopment scheme without having literally contracted to an outside party in that way?
    Mr. Fletcher: I am much obliged to my hon. Friend, who has put very succinctly the point I was trying to make.
    The Chancellor suggested that the test would be the safeguarding of outstanding contracts. The point that my hon. Friend and I were trying to make is that that does not go far enough. If the business community is to be satisfied and reassured on this matter, there ought to be as binding an undertaking as one can constitutionally expect that all commitments and all plans for capital expansion which are undertaken in reliance on these new investment allowances will be allowed to proceed.
    Mr. H. Rhodes: I doubt very much whether investment allowances on their own will be sufficient to create a climate of business opinion strong enough to influence companies to undertake investment. Whenever investment allowances or initial allowances have been granted, the issue has always seemed to be clouded by something done previously which has either set off an expansion of production or worked towards its decline. To some extent, as a consequence of that, the virtue of investment allowances on their own remains unknown.
    They are an interesting form of encouragement. Having put them on, the Chancellor should now take advantage of a method used in the last year or two for collecting business opinion. Directors of selected companies have been asked for their opinions on the state of their order books. If such a method has had any virtue, the results have been worth while.
    Instead of asking businesses what they think about their prospects when a decline sets in. the Chancellor ought to reverse the procedure and ask them what they think of their prospects and what has induced them to invest in machines now. If this is not done the issue will always be confused. It has come after the relaxation of hire purchase and we ought to be able to sort it out now. We ought to be asking ourselves whether this later inducement of the investment allowance, coming behind the gamut of inducements to increase production, is doing what it should in connection with the right sort of investment.
    There are two kinds of encouragement. The first is to increase production at a time when the economy is flagging, and
    1352
    the second to increase the productivity of the individual machine irrespective of an up or down movement in the economic life of the community or world trade. At some time or other we shall discover the real assistance needed from the Treasury to provide inducements to invest in productive machines. I mentioned this on Second Reading and I will not go over the ground again, but I think that we shall have to make up our minds about the type of encouragement that we should give for productivity.
    There are two aspects of productivity. One is the making of new things with new techniques which in themselves attract money because of their profitability and very often the smaller amount of money needed for wages compared with the older industries with older techniques. The ability of older industries to get increased productivity runs down over the years, not because of the age of the machines but because of the age of the know-how and the technique which has been employed for so long. A time eventually comes in older industries when inventiveness is needed to set them going again to catch up with the countries which use the old techniques, but which are paying lower wages.
    I am not pressing this point, but it is something to think about. These investment allowances should be geared to the kind of productivity that the purchases of the machines will yield. At so late a stage in an upsurge of production, I do not think it is much use encouraging people to buy more machines unless they are absolutely certain that the machines are the right ones.
    After the Whitsun Recess, when we shall find ourselves confronted with the task of handing over sums of money to assist an old industry to buy new plant, we shall be faced with the danger that the machines which are secured may not be good enough, and it may well be that in ten years' time we shall have to go over the whole business again. I suggest to the Chancellor, therefore, that this thing needs thinking out in relation to productivity with which should be contrasted any allowances or inducements given by the Treasury.
    I am not looking a gift horse in the mouth because I made my own arrangements some time before the Budget statement. But the extent of the value accruing from these inducements is something

    1353
    that we do not know, nor do we know the extent of the influence of a favourable climate of opinion in industry. We could gain a lot of information from people who have made decisions during the last few weeks, and I think that we should ask such people about the effect of this concession upon them.
    Mr. Gordon Walker: The right hon. Gentleman said that he found little to quarrel with in the speech of my hon. Friend the Member for Gloucester (Mr. Diamond). I wish I could say as much for my attitude to the remarks of the Minister. I agree with one thing that the right hon. Gentleman said. He admitted that a monetary policy was an inadequate instrument of control. That is something which we have been arguing for a long time. The right hon. Gentleman's predecessor always maintained that everything should be done by monetary control, and I was glad to hear the right hon. Gentleman say that a monetary policy needed to be reinforced by other instruments.
    I was sorry to hear what the right hon. Gentleman had to say about this Amendment, which we take very seriously. It represents a continuance of the argument which we advanced this time last year, that the investment allowance should have been introduced then and that the Chancellor delayed the re-expansion of the economy for an inexcusably long time. But we have to deal with things as they are. so we have tabled this Amendment, which is designed to increase the encouragement to investment which, a year too late, the Chancellor has put into his Budget.
    The reason we take this Amendment seriously is that we believe strongly in more investment. My hon. Friend the Member for Gloucester said that the effect of the Chancellor's proposals would be negligible. I do not think that the Chancellor understood the argument advanced by my hon. Friend, who maintained that it would be negligible because it would, in fact, do no more than meet the increased cost of replacement. In all probability there will be a rise in prices. Machines will cost more to replace in the end and the amount of the allowance which the Chancellor is giving—so my hon. Friend argued—would only offset the increase in the replacement costs.
    1354
    I am sure that the right hon. Gentleman was impressed when my hon. Friend the Member for Ashton-under-Lyne (Mr. Rhodes) said that nobody really knows the effect of the investment allowances, taken by themselves. I hope that the right hon. Gentleman will consider favourably the proposal of my hon. Friend that an inquiry should be made to try to ascertain the motives which have led, or are likely to lead, managements to increase investment; how far it is due to the investment allowances: and how far to a reduction of hire purchase restrictions, and so forth.
    9.0 p.m.
    Our main argument is that we need more investment. I was very struck by the figures which the right hon. Gentleman gave for the cost of our proposals. It was £13 million extra, over and above what he has decided to give in this field in the period 1960–61, and £23 million in 1961–62. This seems an argument in favour of our Amendment. This shows that the Amendment would make a very great difference, and that there would be a real demand and use for these investment allowances. The right hon. Gentleman can only have worked out this cost on the assumption that the investment allowances would be used and would result in quicker and more modern machinery.
    We regard the figures which he gave —they surprised us because we did not think that they were as high—as an argument in favour of what we are saying. It shows that there is a very great need for increased investment. So far from that being an argument against our proposal, it is one in favour of it. If the proposal would bring about this sort of difference the Chancellor should have arranged his Budget in such a way that he could find the extra £13 million and £23 million by a very slight marginal redistribution of the various reliefs. He should have rearranged things so as to find this marginal amount in the total reliefs which he was giving.
    What is wrong with this country is that it does not get enough investment and that it is lagging behind the high-investment countries. In the last three or four years other countries which are comparable with us are getting ahead because they are really high-investment countries. Compared with them, we are a low-investment country. The right hon.

    1355
    Gentleman has talked a great deal about wages, the need for wage restraint, the effect that an increase of wages would have upon prices, and so forth. He forgets when he says this sort of thing that one can exaggerate the effect of wages upon the putting up of prices.
    Wages have gone up at least as fast in Western Germany as in this country over the comparable period, but prices have not gone up as fast. The reason is that productivity has gone up in Western Germany much faster than in this country. The reason why productivity has gone up faster there is that the rate of investment has been much higher. That is why we lay so much stress and emphasis upon the need for increased investment in this country at a rate faster than is being done. That will not only help and enlarge our future wealth but will directly help to fight inflation. We must change this lagging behind other comparable countries in the rate of investment in Britain.
    I was very disturbed to hear the Chancellor say again what he said in his Budget speech, namely, that the investment allowances might well come off again. That discloses an attitude of mind which I find alarming. It means that the right hon. Gentleman does not regard it as part of his duty and policy to create a steady drive of investment in this country but merely to have a little spurt now and then. He is looking forward to
    the time, after the so-called slack in the economy has been taken up, when he can go into reverse.
    Mr. Amory indicated dissent.
    Mr. Gordon Walker: If the right hon. Gentleman does not mean this, I hope he will tell us what he meant by saying that he must warn industry "not to reckon on them", and so forth?
    All this gives a wholly wrong impression. The policy of Her Majesty's Government ought to be to stimulate a steady drive of high investment in this country; so that, instead of lagging behind countries like Western Germany we should, as we rightly ought, be ahead of her in this matter and in all the things that flow from it. We feel very strongly about it and we are very far from satisfied with the right hon. Gentleman's reply and with the attitude of mind that that reply disclosed.
    If the Chancellor will not change his mind on this matter, I must ask my right hon. and hon. Friends to go into the Division Lobby to show that we have an utterly different approach to the whole policy of high investment in this country from that of this lagging, laggard and niggardly Government.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 170, Noes 213.

    Division No. 113.]

    AYES

    [9.7 p.m.

    Ainsley, J. W.

    Craddock, George (Bradford, S.)

    Hastings, S.

    Albu, A. H.

    Cronin, J. D.

    Hayman, F. H.

    Allen, Arthur (Bosworth)

    Crossman, R. H. S.

    Healey, Denis

    Allen, Scholefleld (Crewe)

    Davies, Harold (Leek)

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

    Awbery, S. S.

    Davies, Stephen (Merthyr)

    Herbison, Miss M.

    Bacon, Miss Alice

    Deer, G.

    Hewitson, Capt. M.

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

    Delargy, H. J.

    Hobson, B. R. (Keighley)

    Blackburn, F.

    Diamond, John

    Holman, P.

    Blenkinsop, A.

    Ede, Rt Hon. J. C.

    Holmes, Horace

    Blyton, W. R.

    Edelman, M.

    Houghton, Douglas

    Boardman, H.

    Edwards, Rt. Hon. John (Brighouse)

    Hughes, Cledwyn (Anglesey)

    Bottomley, Rt. Hon. A. G.

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hughes, Emrys (S. Ayrshire)

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

    Edwards, W. J. (Stepney)

    Hughes, Hector (Aberdeen, N.)

    Bowles, F. G.

    Evans, Albert (Islington, S.W.)

    Hunter, A. E.

    Braddock, Mrs. Elizabeth

    Evans, Edward (Lowestoft)

    Hynd, H. (Accrington)

    Brockway, A. F.

    Fernyhough, E.

    Hynd, J. B. (Attercliffe)

    Broughton, Dr. A. D. D.

    Fletcher, Eric

    Irvine, A. J. (Edge Hill)

    Brown, Rt. Hon. George (Belper)

    Forman, J. C.

    Irving, Sydney (Dartford)

    Brown, Thomas (Ince)

    Fraser, Thomas (Hamilton)

    Janner, B.

    Burke, W. A.

    Gibson, C. W.

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

    Burton, Miss F. E.

    Gordon Walker, Rt. Hon. P. C.

    Jeger, George (Goole)

    Butler, Herbert (Hackney, C.)

    Greenwood, Anthony

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

    Carmichael, J.

    Grenfell, Rt. Hon. D. R.

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

    Castle, Mrs. B. A.

    Grey, C. F.

    Jones, Jack (Rotherham)

    Champion, A. J.

    Griffiths, David (Bother Valley)

    Jones, J. Idwal (Wrexham)

    Chapman, W. D.

    Griffiths, Rt. Hon. James (Lianelly)

    Kenyon, C.

    Ghetwynd, G. R.

    Griffiths, William (Exchange)

    King, Dr. H. M.

    Cliffe, Michael

    Hale, Leslie

    Lawson, C. M.

    Coldrick, W.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Lee, Frederick (Newton)

    Collick, P. H. (Birkenhead)

    Hamilton, W. W.

    Lee, Miss Jennie (Cannock)

    Corbet. Mrs. Freda

    Hannan, W.

    Lindgren, G. S.

    Mahon, Dr. J. Dickson

    Paton, John

    Soskice, Rt. Hon. Sir Frank

    McAlister, Mrs. Mary

    Pearl, T. F.

    Spriggs, Leslie

    McCann, J.

    Pentland, N.

    Stones, W. (Consett)

    MacColl, J. E.

    Plummer, Sir Leslie

    Summerskill, Rt. Hon. E.

    McInnes, J.

    Prentice, R. E.

    Sylvester, G. O.

    McKay, John (Wallsend)

    Price, J. T. (Westhoughton)

    Taylor, Bernard (Mansfield)

    MoLeavy, Frank

    Price, Philips (Gloucestershire, W.)

    Taylor, John (West Lothian)

    MacPherson, Malcolm (Stirling)

    Probert, A. R.

    Thomas, lorwerth (Rhondda, W.)

    Mahon, Simon

    Pursey, Cmdr. H.

    Thomson, George (Dundee, E.)

    Marquand, Rt. Hon. H. A.

    Rankin, John

    Thornton, E.

    Mason, Roy

    Redhead, E. C.

    Watkins, T. E.

    Mayhew, C. P.

    Reeves, J.

    Wells, William (Walsall N.)

    Moody, A. S.

    Reid, William

    Wheeldon, W. E.

    Morris, Percy (Swansea, W.)

    Reynolds, G. W.

    White, Henry (Derbyshire, N.E.)

    Mort, D. L.

    Rhodes, H.

    Wilkins, W. A.

    Moss, R.

    Robinson, Kenneth (St. Pancras, N.)

    Willey, Frederick

    Moyle, A.

    Rogers, George (Kensington, N.)

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

    Mulley, F. W.

    Ross, William

    Willis, Eustace (Edinburgh, E.)

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

    Royle, C.

    Wilson, Rt. Hon. Harold (Huyton)

    Olivet, G. H.

    Short, E. W.

    Winterbottom, Richard

    Orem, A. E.

    Silverman, Julius (Aston)

    Woof, R. E.

    Orhach, M.

    Silverman Sydney (Nelson)

    Yates, V. (Ladywood)

    Oswald, T.

    Skeffington, A. M.

    Zilliaous, K.

    Owen W. J.

    Slater, J. (Sedgefield)

    Padley, W. E.

    Smith, Ellis (Stoke, S.)

    Palmer, A. M. F.

    Snow, J. W.

    TELLERS FOR THE AYES:

    Parker, J.

    Sorensen, R. W.

    Mr. Pearson and Mr. Simmons.

    NOES

    Agnew, Sir Peter

    Eden, J. B. (Bournemouth, West)

    Langford-Holt, J. A.

    Aitken, W. T.

    Elliott, R. W.(Ne'eastle upon Tyne, N.)

    Leavey, J. A.

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Emmet, Hon. Mrs. Evelyn

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

    Anstruther-Gray, Major Sir William

    Errington, Sir Eric

    Legh, Hon. Peter (Petersfield)

    Armstrong, C. W.

    Erroll, F. J.

    Lindsay, Hon. James (Devon, N.)

    Ashton, H.

    Fell, A.

    Lindsay, Martin (Solihull)

    Atkins, H. E.

    Finlay, Graeme

    Linstead, Sir H. N.

    Baldock, Lt.-Cmdr. J. M.

    Fisher, Nigel

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

    Baldwin, Sir Archer

    Fletcher-Cooke. C.

    Longden, Gilbert

    Barber, Anthony

    Fort, R.

    Loveys, Walter H.

    Barlow, Sir John

    Freeth, Denzil

    Lucas-Tooth, Sir Hugh

    Barter, John

    Gammons, Lady

    Maodonald, Sir Peter

    Botsford, Brian

    George, J. C. (Pollok)

    McLaughlin, Mrs. P.

    Beamish, Col. Tufton

    Glover, D.

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

    Bell, Philip (Bolton, E.)

    Glyn, Col. Richard H.

    McMaster, Stanley

    Bevins, J. R. (Toxteth)

    Godher, J. B.

    Macmillan, Rt. Hn. Harold(Bromley)

    Biggs-Davison, J. A.

    Goodhart, Philip

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

    Bingham, R. M.

    Gough, C. F. H.

    Maitland, Hon. Patrick (Lanark)

    Birch, Rt. Hon. Nigel

    Gower, H. R.

    Markham, Major Sir Frank

    Bishop, F. P.

    Graham, Sir Fergus

    Marlowe, A. A. H.

    Black. Sir Cyril

    Green, A.

    Marples, Rt. Hon. A. E.

    Body, R. F.

    Gresham Cooke, R.

    Marshall, Douglas

    Bonham Carter, Mark

    Grimond, J.

    Mathew, R.

    Bowen, E. R. (Cardigan)

    Gurden, Harold

    Mawby, R. L.

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

    Hall, John (Wycombe)

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

    Boyle, Sir Edward

    Harris, Reader (Heston)

    Medlicott, Sir Frank

    Braine, B. R

    Harrison, A. B. C. (Maiden)

    Molson, Rt. Hon. Hugh

    Brew's, John

    Harrison, Col. J. H. (Eye)

    Mott-Radclyffe, Sir Charles

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

    Harvey, Sir Arthur Vere(Macciesf'd)

    Heave, Alrey

    Brooman-White, R. C.

    Harvey, John (Walthamstow, E.)

    Nicholson, Sir Godfrey (Farnham)

    Browne, J. Nixon (Craigton)

    Heald, Rt. Hon. Sir Lionel

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

    Burden, F. F. A.

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

    Noble, Michael (Argyll)

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

    Henderson, John (Cathcart)

    Nugent, Richard

    Campbell, Sir David

    Henderson-Stewart, Sir James

    Oakshott, H. D.

    Carr, Robert

    Hill, Mrs. E. (Wythenshawe)

    Ormsby-Gore, Rt. Hon. W. D.

    Cary, Sir Robert

    Hirst, Geoffrey

    Osborne, C.

    Channon, H. P. G.

    Holland-Martin, C. J.

    Page, R. G.

    Chichester-Clark, R.

    Holt, A. F.

    Partridge, E.

    Clarke, Brig. Terence (Portsmth, W.)

    Hornby, R. P.

    Peel, W. J.

    Conant, Maj. Sir Roger

    Horobin, Sir Ian

    Peyton, J. W. W.

    Cooke, Robert

    Horsbrugh, Rt. Hon. Dame Florence

    Pickthorn, Sir Kenneth

    Cordeaux, Lt.-Col. J. K.

    Howard, Hon. Creville (St. Ives)

    Pike, Miss Mervyn

    Corfield, F. V.

    Howard, John (Test)

    Pilkington, Capt. R. A.

    Craddock, Beresford (Spelthorne)

    Hughes, Hallett, Vice-Admiral J.

    Pitman, I. J.

    Crosthwaite-Eyre, Col. O. E.

    Hughes. Young, M. H. C.

    Pitt, Miss E. M.

    Crowder, Sir John (Finchley)

    Hurd, Sir Anthony

    Pott, H. P.

    Cunningham, Knox

    HutchisomMichael Clark(E'b'gh, S)

    Powell, J. Enoch

    Dance, J. C. G.

    Hylton-Foster, Rt. Hon. Sir Harry

    Price, David (Eastleigh)

    Davidson, Viscountess

    Iremonger, T. L.

    Price, Henry (Lewisham, W.)

    D'Avigdor-Goldsmid, Sir Henry

    Jenkins, Robert (Dulwich)

    Prior-Palmer, Brig. O. L.

    tie Ferranti, Basil

    Jennings, Sir Roland (Hallam)

    Ramsden, J. E.

    Doughty, C. J. A.

    Johnson, Eric (Blookley)

    Rawlinson, Peter

    du Cam, E. D. L.

    Kerr, Sir Hamilton

    Redmayne, M.

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

    Kirk, P. M.

    Rees-Davies, W. R.

    Duncan, Sir James

    Lancaster, Col. C. G.

    Remnant, Hon. P.

    1358

    1359

    Rldsdale, J. E.

    Taylor, Sir Charles (Eastbourne)

    Walker-Smith, Rt. Hon. Derek

    Roper, Sir Harold

    Taylor, William (Bradford, N.)

    Wall, Patrick

    Ropner, Col. Sir Leonard

    Teeling, W.

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

    Russell, R. S.

    Temple, John M.

    Ward, Dame Irene (Tynemouth)

    Sharpies, R. C.

    Thomas, Leslie (Canterbury)

    Webbe, Sir H.

    Shepherd, William

    Thompson, R. (Croydon, S.)

    Webster, David

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

    Thorneycroft, Rt. Hon. P.

    Whitelaw, W. S. I.

    Spearman, Sir Alexander

    Thornton-Kemsley, Sir Colin

    Williams, Paul (Sunderland, S.)

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

    Turner, H. F. L.

    Williams, R. Dudley (Exeter)

    Stanley, Capt. Hon. Richard

    Turton, Rt. Hon. R. H.

    Wills, Sir Gerald (Bridgwater)

    Stevens, Geoffrey

    Tweedsmuir, Lady

    Wilson, Geoffrey (Truro)

    Steward, Harold (Stockport, S.)

    Vane, W. M. F.

    Woffige-Gordon, Patrick

    Steward, Sir William (Woolwich, W.)

    Vaughan-Morgan, J. K.

    Woollam, John Victor

    Stoddart-Scott, Col. Sir Malcolm

    Vickers, Miss Joan

    Yates, William (The Wrekin)

    Storey, S.

    Vesper, Rt. Hon. D. F.

    Studholme, Sir Henry

    Wade, D. W.

    TELLERS FOR THE NOES:

    Summers, Sir Spenoer

    Wakefield, Edward (Derbyshire, W.)

    Mr. Bryan and Mr. J. E. B. Hill.

    9.15 p.m.
    Dame Irene Ward: I beg to move, in page 15, line 12, at the end to insert:
    (3) Notwithstanding subsections (1) and (2) of this section, an initial allowance shall be made of one-tenth of any expenditure incurred after the seventh day of April, nineteen hundred and fifty-nine, on the construction, extension or modification of dry docks in the United Kingdom; and on any expenditure incurred as aforesaid, the investment allowance made under subsection (1) of this section shall be increased from one-tenth to one-fifth of such expenditure.
    The purpose of the Amendment is to transfer dry docks for the purpose of investment and initial allowances from the category designated industrial buildings and structures into the category designated plant and machinery, thus attracting an increase in both investment and initial allowances.
    I wish that my right hon. Friend the Chancellor went to sea in a tanker instead of in a yacht, because I cannot help feeling that his appreciation of dry docks is coloured by the part of the country from which he sails and the attitude of that part of the country to the repairing of yachts. In that part of the country we find charming little villages and men with consummate skill tinkering with the little boats which my right hon. Friend enjoys so much. We find sparkling rivers, the sun shining and everything pleasant and in no way related to the great industrial problems of dry docks which belong to the parts of the country concerned with shipbuilding in a big way. At any time I should welcome a visit from my right hon. Friend to the Tyne or any other great industrial river so that he may see what dry docks mean to the shipping and shipbuilding industry.
    Part of the case for the acceptance of the Amendment is that we want the entire industry—shipping, shipbuilding and ship repairing—looked at as a whole. Dry
    1360
    docks are the garages of our merchant ships and naval ships, and I argue the Amendment from that point of view.
    Curiously enough, investment in dry docks is a singularly unattractive form of investment, partly because the construction of the docks is extremely expensive and partly because, after their construction, there is a relatively long period, which the dry dock owners estimate may be as long as a decade, before the dock is used more than intermittently by ships of the size for Which it was constructed. Over that period, it is alleged—and I am sure with truth—that the rents of the dock are very little more than the interest charged on the loans for the construction of the dock.
    I fully realise that I have to try to make a case to overcome the refusal which the dry dock owners and those who have supported their claims have met in the House on many occasions. If I remember rightly, I had a conversation with my right hon. Friend one day in which the old question of precedent cropped up. It seems to me that if we spent a little more time in our Parliamentary life looking up precedents we might get a little further in moving Amendments to the Finance Bill.
    One of my colleagues has suggested to me that brick walls surrounding timber kilns attract investment and initial allowances as plant and machinery. It seemed to me that this was an analogy. I understand from further investigations that this rate of investment and initial allowance was not due to any insertion in any Finance Bill but that it has been a practice of the Inland Revenue to allow brick walls to be charged in the category of plant and machinery. That is a very valuable precedent with which to try to persuade the Chancellor to accept the Amendment.

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    May I, I hope not frivolously, express this point of view. We must have the brick walls for these timber kilns. If we took away the things that make a dry dock a dry dock, it would become a wet dock. I understand that part of my right hon. Friend's argument against accepting an Amendment of this kind is that the gate and certain parts of the machinery of the docks attract the higher investment allowance and the higher initial allowance. For some extraordinary reason, the part that makes the dock a dry dock does not seem to attract those higher allowances.
    When I opened my newspaper this morning and saw that my right hon. Friend had suddenly decided to go into space, quite apart from the fact that he sails in yachts and not in tankers, I had a rather nostalgic feeling for that old jingle:
    "The owl and the pussy cat went to sea
    In a beautiful pea green boat".
    I want to point out immediately to my right hon. Friend that "owl", as I must be the pussy cat, is synonymous with "wisdom". When I have outlined one of the reasons why it seems to me to be right and proper that dry docks should be in the category of plant and machinery, I hope that my right hon. Friend will agree that I have made out my case.
    In Parliamentary and political life, as one moves about in the great industrial centres of the country quite a lot of information comes one's way, fortunately. Otherwise, one would never be able to persuade the Front Bench to accept any Amendment from the back bench. I have heard it suggested that, if it were possible to call a few Departments together in support of the argument which I am advancing, we might have a great ally in the Admiralty. On Tyneside we do not build great commercial ships only. We also build great naval ships. Great naval ships require dry docks just as much as great commercial ships.
    It has been suggested to me from one source and another in my wanderings that a certain amount of pressure has been exercised on my right hon. Friend, I am afraid unsuccessfully up to date, but perhaps when the Navy and commerce join together we shall make an impression. I am told that the Admiralty also would welcome the Amendment.
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    It is obvious that, though I try to represent the big industrial North from which I come, I cannot have much technical knowledge of these subjects. I suggested yesterday, in arguing about Purchase Tax, that one of the difficulties is that, once one Government Department obtains a decision from the Cabinet to go ahead, it goes ahead. The Parliamentary Secretary to the Board of Trade has been very vigorous in going about the countryside in relation to the powers of the Board of Trade under D.A.T.A.C. I think that that is the correct description of one of his new functions.
    It is true that in areas that are specially designated one might get some assistance for the construction of new dry docks through D.A.T.A.C., but one cannot deal with dry docks in the same way as one can deal with industrial buildings. That is why I think it very unfortunate that dry docks are in the category of industrial buildings and structures. We have to construct our dry docks in the places most suitable for their construction, and although I have no doubt that the Cabinet and my right hon. Friend have given the go-ahead to the Parliamentary Secretary to the Board of Trade, it is not a very satisfactory way of dealing with this great industry.
    When we have been arguing about some of the difficulties that have arisen in our shipping, our shipbuilding or our ship-repairing industries—and they are, after all, the life blood of the nation—the answer has always been, "Of course, we want to do everything we can to help them, but they are so difficult to help. "I therefore suggest to my right hon. Friend that when one partner in the great unified whole of the shipbuilding industry makes a practical suggestion that will he helpful to shipping and shipbuilding, it should be seriousy considered. We are building larger and larger tankers, we are being called upon to build larger and larger merchant ships, and we cannot look after our very valuable shipping fleet unless there are proper maintenance arrangements.
    In the aircraft industry, maintenance has attracted a great deal of the Government's attention, and I cannot understand why the maintenance of our great ships should not be of equal interest. My right hon. Friend says that he genuinely wants to help this industry, so, when one section of it puts forward a practical proposal,

    1363
    I beg of him to take advantage of this great opportunity and to give the industry what it desires so tremendously. On behalf of the dry dock owners and of all those who work in these great ship-repairing yards, I can tell the Committee that I have moved this Amendment with great confidence.
    Mr. Stevens: I should like, very briefly but very emphatically, to support the Amendment moved by my hon. Friend the Member for Tynemouth (Dame Irene Ward). In doing so, I must declare an interest. Two years ago, the firm of which I am a partner was asked to carry out a factual investigation into the taxation treatment of dry dock owners and ship repairers, both here and in other countries. A very interesting series of facts resulted from that investigation.
    It emerged, beyond any shadow of doubt that the taxation treatment of those who own dry docks, and who repair ships in every other country is on a very much more generous scale than it is here. In saying that, one must remember that shipping is unique in its competitive nature. It is obviously so easy for a ship to cross the Atlantic, and ii is equally obvious that the shipowner will have the vessel repaired where the repair facilities are not only the most convenient but also the cheapest.
    To emphasise that point I should like to give a very few figures. Whereas, before the present Finance Bill, the cost of building a dry dock here could be written off for tax purposes over forty-five years, if we look at some other maritime competitors we find that in Sweden the cost is written off in only thirty-three years; in Holland, in twenty-five years, and in France, in twenty years. That is a tremendous handicap on our ship repairers.
    It is perfectly true that Clause 17 somewhat improves the position of the ship repairers, but only to the extent of about 10 per cent. That tremendous tax handicap therefore remains. It seems to me that if those engaged in an industry as highly competitive as the ship-repairing industry have that handicap to compete with, it is impossible to expect them to maintain this country's position as the premier ship-repairing nation of the world.
    With those few words, and on those solid grounds, I support with great
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    pleasure the Amendment moved by my hon. Friend the Member for Tynemouth.
    9.30 p.m.
    Mr. Ede: I support this Amendment. We should remember that in recent years —and, looking into the future, the same tendency seems likely to persist—there has been a demand for bigger dry docks and that those which have been built in the past are now not suitable, owing to their restricted size, for dealing with the commercial craft, particularly tankers and similar vessels which exist today.
    A few minutes ago I saw the right hon. Gentleman the Minister of Labour and National Service in the Chamber. I can well understand his interest in this issue because, wherever else in the labour situation he may find anything to cheer his heart, he has been quite frank in telling us that shipbuilding and ship repairing are the industries which now give him the most anxiety. I sincerely hope that the Government will realise that this is a matter of vital concern not merely to the dry dock owners but to the large number of people in this country who are engaged in ship repairing.
    We made a tremendous mistake in the years immediately before the Second World War in allowing the teams of labour which had been built up in these firms on the Tyneside and elsewhere to disintegrate, and even during the worst period of the war we were never able to reassemble those teams.
    A peculiarity of this industry is that the firms seem to build up a body of men capable of dealing with their specific needs. The present plight of this industry is getting far too near the situation which existed immediately before the Second World War for anyone to regard this plight with equanimity. If the necessary expansion of the docks and of their equipment is to take place, very considerable assistance will be required from those who control investment allowances and the other matters which are dealt with in this Amendment.
    Mr. Peter Rawlinson: I am glad to be able to follow the right hon. Member for South Shields (Mr. Ede) whom I represent in the House of Commons, and to say that I support everything that he has said.

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    I must admit that my main interest is more in docks of a different nature than those which we are discussing tonight. I should first of all declare a personal interest, as I have already done on a previous occasion when a similar subject was under discussion, in that for hundreds of years there has been a family concern on the Merseyside, engaged formerly in shipbuilding but now in ship-repairing.
    As an illustration of some of the arguments which have already been used, I would tell the Committee that this company on the Merseyside is at present engaged in the enlargement of a dry dock. That will take several years to complete, at a cost of about £1½ million, so that we shall be able to cater for the new type of ships, the tankers of up to 65,000 tons. That is a dock from which, as my hon. Friend has already said, the company cannot expect to receive any economic return for a period of eight to ten years. It is essential for the long-term efficiency of ship-repairing to have docks of this size, so as to be able to meet the foreign competition, which becomes more acute with every single day, and to provide for this revolution in shipbuilding which we have seen in the last decade.
    I say with regret that this industry has received very little encouragement from the Government. Always there is this emphasis generally upon this great heritage of shipbuilding, and the great dependence of this country upon the sea and the trades and industries which are allied to the sea. We have continual assertions about the strategic importance of keeping a healthy and flourishing Merchant Navy and the ports and docks which serve such a Merchant Navy. Now, we have the new oil and fuel carriers of vastly greater size, and therefore we have to have the docks able to cater for them and to service them.
    In 1957, I invited the then Chancellor to treat the dock as plant, as opposed to industrial buildings, and my right hon. Friend the Member for Flint, West (Mr. Birch), then Economic Secretary to the Treasury, said that we were claiming, as an industry, discriminatory tax relief. Surely, it is the duty of a Chancellor to be discriminatory, and while I would not associate my right hon. Friend particularly with 1984, I would say that some Chancellors are discriminatory, and that
    1366
    some seem to be even more discriminatory than others.
    I hope my right hon. Friend will be more discriminatory in this instance, because I think there is a case for the docks, as there is not in many other industries, for a dock is not like an industrial building. One cannot build, supply or provide it, or put it in a certain place, to provide the answer to some labour problem which there exists. It cannot be used for any other purpose, as the premises of a factory can be. It is a hole in the ground which can be used for one purpose only, and it is a one-purpose asset. Therefore, as a one-purpose asset, in my submission, it is plant and not a building.
    My right hon. Friend the Prime Minister, in 1957, talking about the demand and the need for oil services, spoke of the real sense of urgency which existed in the Government. I ask that a real sense of urgency should be reflected by giving this assistance to this industry, because its foreign competitors are almost given their ships by the foreign Governments, and they are given their docks. In the case of our foreign competitors, a floating dock is treated as plant, and therefore all we are asking here is for proper relief and re-assessment of the category in which docks are at present placed.
    The hon. Member for Stechford (Mr. Roy Jenkins), when he spoke on a similar Amendment in 1957, rather pooh-poohed the arguments we had raised, saying that the industry faced a great period of prosperity. It certainly does not face it now, as the right hon. Gentleman the Member for South Shields has already said. There is grave unemployment, and there are difficulties facing this industry. There-force, I ask my right hon. Friend to make this concession not only for ordinary commercial reasons—for ordinary commercial justice in treating docks as plant rather than industrial buildings, because they are in an entirely different category—but also because, for national reasons of employment and also for strategic reasons, it is important to keep these docks and this industry in a healthy and vigorous position, so that they can meet the challenge from foreign competitors.
    As I said at the beginning, I speak with a direct personal interest which I want to make perfectly clear, because it

    1367
    arises from an association with the industry and not from anything concerned with my constituency. After the various arguments which have been put before my right hon. Friend, this surely is an industry which needs stimulus and help of this kind and I hope that he will be able to accept the Amendment.
    Mr. Frederick Willey: I support my right hon. Friend the Member for South Shields (Mr. Ede) in supporting the Amendment. We are obliged to the hon. Lady the Member for Tynemouth (Dame Irene Ward) for taking the opportunity of raising this issue, which particularly affects us in the North-East. The North-East Coast is the greatest ship-repairing area in the world. When attempts are made to denigrate the workers in this industry, I say at once that ship-repairing workers are among the finest workers in the world.
    I am surprised at the absence of the hon. Member for Sunderland, South (Mr. P. Williams). It is unfortunate that he has chosen to be absent on this occasion, because when, in the past, I have pleaded on behalf of these great shipbuilding and ship-repairing industries he has suggested that the proper approach is the very approach that the hon. Lady is proposing tonight, that there should be a taxation concession. Now that the issue is put and the matter may be tested by Division, however, the hon. Member is not with us. [An HON. MEMBER: "He may turn up"] I hope so. He has a responsibility here.
    I join the plea for discriminating in favour of the ship-repairing industry. I agree that if the circumstances demand it, we are entitled to discriminate in favour of an industry. As I have said before, that is at least some measure of planning. We must realise that the ship-repairing industry is facing a real dilemma. It is facing enormous capital costs in extremely difficult circumstances. It is facing unavoidable substantial capital costs because it has to provide the facilities, as the hon. and learned Member for Epsom (Mr. Rawlinson) said, for the new tankers, the new ore carriers and the other large ships that are coming into world shipping.
    We must do that to hold our own, but we have got to do it in circumstances which, to say the least are extremely difficult, because the shipbuilding and ship-repairing industries face a capacity in the world which is far too large. On the
    1368
    one hand, they cannot afford to prejudice themselves by not having the facilities that are required. If they do that, they will lose their place. I remind the Chancellor of what has happened to our great industries under the present Government. Liberia, which, ten years ago, had only one ship of 1,000 tons, now challenges us with the greatest mercantile fleet in the world. Shipbuilding capacity is three times what it was a few years ago. At least, the Government should recognise the difficulties of these two industries that have grown in the past few years.
    We cannot afford to allow our great ship-repairing industry to be prejudiced by not having the requisite dry docks. On the other hand, we must realise that this industry faces a difficult future. This is aggravated by the fact, which the hon. Member for Portsmouth, Langstone (Mr. Stevens) mentioned, that in every country there is some form or other of discrimination in favour of the shipbuilding and ship-repairing industries.
    9.45 p.m.
    Today, ship repairing and shipbuilding are facing a real crisis. It would be better to recognise this now rather than to wait, as we did in the case of the cotton industry, until the industry faces conditions far worse than those obtaining now. We can see the future of these industries fairly plainly now. We can see the intense subsidised competition which they will both meet over the next few years. We can measure the intensification of that competition because of the over-capacity in the world.
    Even though the hon. Member for Sunderland, South is not with us, I appeal to the Chancellor, whether he accepts the Amendment or not, to give a satisfactory undertaking to the Committee. He has failed to do this for the industry. It is an open secret that the shipping, ship- building and ship-repairing industries have made approaches to the Chancellor, but have failed to persuade him. Now that we are discussing the matter, I hope that we shall get an undertaking from the Chancellor that we shall not wait for these industries to fall into the conditions into which the cotton industry has fallen and that action will be taken now, while there is time.
    Finally, I agree with the hon. Lady in what she said about the specially designated D.A.T.A.C. areas. My right hon.

    1369
    Friend the Member for South Shields (Mr. Ede) and I represent constituencies which have been specially designated, but I agree that it would be wrong that aid for dry docks should be determined by that factor. That is why I mentioned the North-East Coast as a whole. It is a district which is rightly proud of its prowess in ship repairing, but I should like to see any aid which comes to the North-East determined by the proposals put forward by those in the industry to build new dry docks rather than determined by D.A.T.A.C. considerations. Incidentally, we have had nothing so far from D.A.T.A.C., so that that is largely an academic question.
    I hope that the Chancellor will give us a satisfactory assurance that there will be discrimination in favour of the ship-repairing industry.
    Mr. Amory: I thought that my hon. Friend the Member for Tynemouth (Dame Irene Ward) gave a slightly over-coloured picture of my yachting activities. I should like to assure her that practically every time that I go sailing I go past the Isle of Grain oil refinery where there is usually a long row of large tankers which I study with interest. My hon. Friend has invited me to go to sea with her in a tanker. I would enjoy that very much, and if the Recess were to be longer I would issue an invitation to her to sail round to Tynemouth so that she could show me the sights.
    Dame Irene Ward: I would accept it.
    Mr. Amory: My hon. Friend quoted "The Owl and the Pussy Cat". I do not want to press that analogy too far, but if she had gone a bit further I seem to remember that
    "The owl looked up to the stars above and sang to a small guitar,
    'Oh beautiful pussy, oh pussy my love, what a beautiful pussy you are'."
    Mr. John Edwards: May I remind the Chancellor that in the end the owl married the pussy cat?
    Mr. Amory: Being a cautious man, I said that I did not want to press the analogy too far this evening.
    Seriously, because it is a serious proposition that my hon. Friends have made, I am sorry that I do not feel able to accept their proposal. I feel that the treatment that we are giving to docks at
    1370
    present, compared with anything else, is relatively favourable.
    What are we doing? In some directions it is straining it rather to regard a dock as equivalent to an industrial building, but we are increasing the advantage there by substituting the investment allowance of 10 per cent. for 10 per cent. of the initial allowance. I would remind hon. Gentlemen that last year we increased the initial allowance and docks got the benefit of it. This year we are increasing the investment allowance, and docks will get the benefit of that. My hon. Friend also mentioned gates and the motivating machinery; they get the higher rate of investment allowance applicable to plant and machinery.
    My hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) implied that most other countries, if not every other country, give better treatment in allowances on docks than we do; but, as far as I have been able to discover, only one other country has anything equivalent to the investment allowance applicable to docks.
    My hon. and learned Friend the Member for Epsom (Mr. Rawlinson) said that docks were a special case because they were a one-purpose asset. If one thinks of it, that applies to a very great number of industrial buildings which are not adaptable for general purposes. Many of them are specialist buildings which attract only the industrial building rate of allowance. The kiln analogy is not a precise one because a kiln is in many respects analogous to a single bit of machinery.
    My hon. and learned Friend also mentioned that in some countries floating docks attract the allowance appropriate to plant and machinery. I would remind him that in this country a floating dock would be treated as plant and machinery.
    My hon. and learned Friend also implied that the shipbuilding industry had received very little help from the Government. I do not think that is quite fair. That industry has enjoyed the benefit of the increase in the initial allowances last year, the increase in investment allowances applicable to plant and machinery and their buildings this year and a considerable benefit also this year from the reduction in the standard rate. In addition to that, the Government are assisting, and are willing to

    1371
    assist, docks in D.A.T.A.C. areas, and the Government have already expressed their willingness to assist in a substantial way in the case of two applications. That helps with the unemployment problem at the same time.
    I do not quarrel with what my hon. and learned Friend said about a discrimination in certain cases. That is fair; we already discriminate in certain cases. In brief, however, what I feel in this case is that it would be asking me to go beyond what is reasonable to treat the whole of the expenditure on a dry dock as if it were plant and machinery. The profitability of a dry dock has been mentioned. That cannot be considered in isolation. As far as profitability goes, a dry dock must surely be considered one among a number of different aspects inside the business of a shipbuilding concern, whether it is owned by the concern or whether its use is rented.
    Therefore, I feel that at the present time with our present proposals we are extending the benefits which are available, and will be available, to dry docks and that it would not be reasonable to ask me to treat the whole of the expenditure on a dry dock as if it were plant and machinery. So with very great regret, I am afraid that I cannot see my way to accept the Amendment.
    Mr. E. Fernyhough: I am sure that the hon. Lady the Member for Tynemouth (Dame Irene Ward) and others who have taken part in the debate on this Amendment will be very disappointed with the Chancellor's miserable reply. The Chancellor should appreciate that what is now being asked is, in the words of the old proverb, a stitch in time to save nine. He is dealing with an industry which is facing more unfair competition than any other industry in this country. The competition is unfair because practically every other maritime nation finds some way, by subsidy or taxation relief, to assist its shipping industry.
    The right hon. Gentleman said that he could not meet what the Amendment suggested in respect of dry docks. Does he not realise that unless we have those dry dock facilities available, the little he saves by turning down the Amendment will have to be paid out tenfold or even one hundred fold in increased unemployment benefit because of the Government's
    1372
    indifference and neglect of the claims of this industry?
    The right hon. Gentleman said that under D.A.T.A.C. advances had already been made for two dry docks. One of them is in my constituency and I am glad that the Treasury found it possible to advance a considerable sum at an agreed rate of interest.
    Mr. Ellis Smith: What about Salford?
    Mr. Fernyhough: Unfortunately I do not think that there is room in Salford for a big dry dock of this character. Otherwise, I am sure that Salford's claim would be considered equally sympathetically.
    The firm concerned and all the people in the industry were very glad that the Government decided to make this generous gesture, but the Government themselves should be delighted, because these dry docks are being constructed at a time when the Tyne is almost full of laid up ships because there is no work for them. The firm is prepared to spend its capital and run the risk involved in providing these facilities although at present it can see no future use for them.
    The Chancellor should understand that what has been said about the increasing size of tankers and other ships is perfectly true, and that if we do not provide those facilities other countries will do so and get the ship-repairing business which should come to this country.
    The shipbuilding and ship-repairing industries had a lean time for the best part of a generation, except during the war years. Everybody knows what happened from the end of the 1914-18 war until the 1939-45 war. As my right hon. Friend the Member far South Shields (Mr. Ede) said, men trained in those skills had to seek work elsewhere. We can all recall that immediately war broke out in 1939 there was a frenzied effort to get the men who had been discarded for lack of work to take up the work for which they had been trained. Such a state of affairs may happen again. Everybody hopes that that will not be the case, but it would be unfortunate if this skill and ability were lost to an industry simply because the Chancellor was not prepared to make this helpful concession.

    1373
    10.0 p.m.
    The Chancellor must know of the many difficulties confronting the industry. He must know that we are in an unfavourable position compared with other maritime nations. We are not asking him to give money away. I understand that this is not some money that he gives away, but merely postpones collecting until a later date. Why, in the name of fortune, with the ship-repairing industry in its present state, he should refuse to make this concession I do not know.
    The Chancellor must face this fact, and it is as well that the Committee should face it, too. Unless we spend money to bring our industries up to date and give those employers who have the courage in this time of recession to go in for an expansionist policy we shall spend this sum a hundred times over, and probably a thousand times over, in paying out unemployment benefit to men who, if the Chancellor had been a little more farsighted, might have been engaged in work which would have provided them with wages and provided the country with the trade and income that everybody wants to see it enjoy.
    Dr. Horace King: The hon. Lady the Member for Tynemouth (Dame Irene Ward) and her hon. Friends who tabled the Amendment have done the Committee a service. Those of us who represent ship-repairing ports are exceedingly grateful to her. I speak for the trade unionists and the master men in the ship-repairing industry in the port of Southampton, which I represent together with the hon. Gentleman the Member for Southampton, Test (Mr. J. Howard).
    The shipping and the ship-repairing industries are in a bad way. I hope that the two industries will get together. I hope that this debate will be the beginning of the time when the Government will get behind these industries in the problems that they face.
    I am assured by my hon. Friends that the ship-repairing industry faces competition from abroad and is losing contracts abroad because many foreign countries,
    1374
    if not giving direct subsidies, are giving either concealed subsidies or other forms of Government aid to their own ship-repairing industries. If our own industry is to survive, aids of the kind mentioned in the Amendment might help in its struggle to keep going.
    It is a truism to say that both shipping and ship-repairing play vital parts in a war. Every member of the Committee knows, from figures recently given by the Ministry of Labour, that while there has been an upturn in the employment position in almost every other industry in the country, that is not true of ship-repairing. In Southampton the figures are higher than they have been since the war. These men have highly specialised skills and they cannot be deflected into other industries.
    If Southampton is not a D.A.T.A.C. area so far as this industry is concerned, unless help is given that possibility may arise. I ask the Chancellor to give a little more consideration to the plea which the hon. Lady the Member for Tynemouth made in proposing the Amendment.
    Most of the ship-repairing industries suffer from lack of adequate docking facilities. In Southampton we have to provide facilities for passenger and commercial ships, and at the same time provide docking facilities for ship-repairing. We have not got them. Any help that the Chancellor can give towards providing these facilities will be a useful contribution to the industry.
    We face competition from abroad on a scale unknown since the war. Both sides of industry must get together to seek ways of improving its efficiency. We cannot solve its problems without help from the Government. This may be a way in which help could be given. It might be regarded as a token action on the part of the Chancellor which could be followed by other Government Departments to help in the solution of those problems.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 158, Noes 199.

    Division NO. 114.]

    AYES

    [10.7 p.m.

    Ainsley, J. W.

    Griffiths, William (Exchange)

    Owen, W. J.

    Albu, A. H.

    Hale, Leslie

    Padley, W. E.

    Allen, Arthur (Bosworth)

    Hall, Rt. Hn. Glenvil (Coine Valley)

    Palmer, A. M. F.

    Allen, Scholefield (Crewe)

    Hamilton, W. W.

    Parker, J.

    Awbery, S. S.

    Hannan, W.

    Parkin, B. T.

    Bacon, Miss Alice

    Hayman, F. H.

    Paton, John

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

    Healey, Denis

    Pearson, A.

    Blackburn, F.

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

    Peart, T. F.

    Blenkinsop, A.

    Herbison, Miss M.

    Pentland, N.

    Blyton, W. R.

    Hewitson, Capt. M.

    Plummer, Sir Leslie

    Boardman, H.

    Hobson, C. R. (Keighley)

    Prentice, R. E.

    Bottomley, Rt. Hon. A. G.

    Holman, P.

    Price, J. T. (Westhoughton)

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

    Holmes, Horace

    Price, Philips (Gloucestershire, W.)

    Bowles, F. G.

    Houghton, Douglas

    Probert, A. R.

    Braddock, Mrs. Elizabeth

    Hughes, Cledwyn (Anglesey)

    Pursey, Cmdr. H.

    Brockway, A. F.

    Hughes, Emrys (S. Ayrshire)

    Rankin, John

    Broughton, Dr. A. D. D.

    Hughes, Hector (Aberdeen, N.)

    Redhead, E. C.

    Brown, Rt. Hon. George (Belper)

    Hunter, A, E.

    Reynolds, G. W.

    Brown, Thomas (Ince)

    Hynd, H. (Accrington)

    Rhodes, H.

    Burke, W. A.

    Hynd, J. B. (Attercliffe)

    Robinson, Kenneth (St. Pancras, N.)

    Burton, Miss F. E.

    Irvine, A. J. (Edge Hill)

    Rogers, George (Kensington, N.)

    Carmichael, J.

    Irving, Sydney (Dartford)

    Ross, William

    Castle, Mrs. B. A.

    Janner, B.

    Short, E. W.

    Champion, A. J.

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

    Silverman, Julius (Aston)

    Chetwynd, G. R.

    Jeger, George (Goole)

    Silverman, Sydney (Nelson)

    Cliffs, Michael

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

    Skeffington, A. M.

    Coldrick, W.

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

    Slater, J. (Sedgefield)

    Corbet, Mrs. Freda

    Jones, Jack (Rotherham)

    Smith, Ellis (Stoke, S.)

    Craddock, George (Bradford, S.)

    Jones, J. ldwal (Wrexham)

    Snow, J. W.

    Cronin, J. D.

    Kenyon, C.

    Sorensen, R. W.

    Croesman, R. H. S.

    King, Dr. H. M.

    Soskice, Rt. Hon. Sir Frank

    Davies, Harold (Leek)

    Lawson, G. M.

    Spriggs, Leslie

    Davies, Stephen (Merthyr)

    Lee, Frederick (Newton)

    Stones, W. (Consett)

    Deer, G.

    Lee, Miss Jennie (Cannock)

    Summerskill, Rt. Hon. E.

    Delargy, H. J.

    Lindgren, G. S.

    Sylvester, G. O.

    Diamond, John

    Mahon, Dr. J. Dickson

    Taylor, Bernard (Mansfield)

    Ede, Rt. Hon. J. C.

    McAlister, Mrs. Mary

    Taylor, John (West Lothian)

    Edelman, M.

    McCann, J.

    Thomas, lorwerth (Rhondda, W.)

    Edwards, Rt. Hon. John (Brighouse)

    MacColl, J. E.

    Thomson, George (Dundee, E.)

    Edwards, Rt. Hon. Nese (Caerphilly)

    McInnes, J.

    Thornton, E.

    Evans, Albert (Islington, S.W.)

    McKay, John (wallsend)

    Ward, Dame Irene (Tynemouth)

    Evans, Edward (Lowestoft)

    MacPherson, Malcolm (Stirling)

    Watkins, T. E.

    Fernyhough, E.

    Mahon, Simon

    Wells, William (Walsall, N.)

    Fletcher, Eric

    Mann, Mrs. Jean

    Wheeldon, W. E.

    Forman, J. C.

    Marquand, Rt. Hon. H. A.

    Willey, Frederick

    Fraser, Thomas (Hamilton)

    Mitchison, G. R.

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

    Gibson, C. W.

    Morris, Percy (Swansea, W.)

    Willis, Eustace (Edinburgh, E.)

    Gordon Walker, Rt. Hon. P. C.

    Moyle, A.

    Wilson, Rt. Hon. Harold (Huyton)

    Greenwood, Anthony

    Mulley, F. W.

    Winterbottom, Richard

    Grenfell, Rt. Hon. D. R.

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

    Woof, R. E.

    Grey, C. F.

    Gram, A. E.

    Yates, V. (Ladywood)

    Griffiths, David (Bother Valley)

    Orbach, M.

    Zilliacus, K.

    Griffiths, Rt. Hon. James (Lianally)

    Oswald, T.

    TELLERS FOR THE AYES:

    Mr. Simmons and Mr. Wilkins.

    NOES

    Agnew, Sir Peter

    Boyle, Sir Edward

    du Cann, E. D. L.

    Aitken, W. T.

    Braine, B. R.

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

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

    Brewis, John

    Duncan, Sir James

    Amory, Rt. Hn. Heathcoat (Tiverton)

    Bromley-Davenport, Lt Col. W. H.

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

    Armstrong, C. W.

    Browne, J. Nixon (Craigton)

    Emmet, Hon. Mrs. Evelyn

    Ashton, H.

    Bryan, P.

    Errington, Sir Eric

    Atkins, H. E.

    Burden, F. F. A.

    Erroll, F. J.

    Baldock, Lt.-Cmdr. J. M.

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

    Fell, A.

    Baldwin, Sir Archer

    Carr, Robert

    Finlay, Graeme

    Barber, Anthony

    Cary, Sir Robert

    Fisher, Nigel

    Barlow, Sir John

    Channon, H. P. G.

    Fletcher-Cooke, C.

    Barter, John

    Chichester-Clark, R.

    Fort, R.

    Botsford, Brian

    Conant, Maj. Sir Roger

    Freeth, Denzil

    Beamish, Col. Tufton

    Cooke, Robert

    Galbraith, Hon. T. G. D.

    Bell, Philip (Bolton, E.)

    Cooper, A. E.

    Gammons, Lady

    Bevins, J. R. (Toxteth)

    Cordeaux, Lt.-Col. J. K.

    George, J. C. (Pollok)

    Biggs-Davison, J. A.

    Corfield, F. V.

    Glover, D.

    Bingham, R. M.

    Craddock, Beresiord (Speithorne)

    Glyn, Col. Richard H.

    Birch, Rt. Hon. Nigel

    Crosthwaite-Eyre, Col. O. E.

    Godber, J. B.

    Bishop, F. P.

    Cunningham, Knox

    Goodhart, Philip

    Black, Sir Cyril

    Dance, J. C. G.

    Gough, C. F. H.

    Body, R. F.

    Davidson, Viscountess

    Gower, H. R.

    Bonham Carter, Mark

    D'Avigclor-Goldsmid, Sir Henry

    Graham, Sir Fergus

    Bowen, E. R. (Cardigan)

    de Ferranti, Basil

    Green, A.

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

    Doughty, C. J. A.

    Gresham Cooke, R.

    1376

    1377

    Grimond, J.

    Loveys, Walter H.

    Russell, R. S.

    Gurden, Harold

    Lucas-Tooth, Sir Hugh

    Sharpies, R. C.

    Hall, John (Wycombe)

    Macdonald, Sir Peter

    Shepherd, William

    Harris, Reader (Heston)

    McLaughlin, Mrs. P.

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

    Harrison, Col. J. H. (Eye)

    McMaster, S. R.

    Spearman, Sir Alexander

    Harvey, Sir Arthur Vere(Macclesf'd)

    Macmillan, Rt Hn. Harold(Bromley)

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

    Harvey, John (Walthamstow, E.)

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

    Stanley, Capt. Hon. Richard

    Heald, Rt. Hon. Sir Lionel

    Maitland, Hon. Patrick (Lanark)

    Steward, Harold (Stockport, S.)

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

    Markham, Major Sir Frank

    Steward, Sir William (Woolwich, W.)

    Henderson, John (Cathcart)

    Marples, Rt. Hon. A. E.

    Stoddart-Scott, Col. Sir Malcolm

    Henderson-Stewart, Sir James

    Mathew, R.

    Storey, S.

    Hill, Mrs. E. (Wythenshawe)

    Mawby, R. L.

    Studholme, Sir Henry

    Hill, John (S. Norfolk)

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

    Summers, Sir Spencer

    Hinchingbrooke, Viscount

    Medllcott, Sir Frank

    Taylor, Sir Charles (Eastbourne)

    Hirst, Geoffrey

    Molson, Rt. Hon. Hugh

    Teeling, W.

    Holland-Martin, C. J.

    Mott-Radcliffe, Sir Charles

    Temple, John M.

    Holt, A. F.

    Heave, Airey

    Thomas, Leslie (Canterbury)

    Hornby, R. P.

    Nicholson, Sir Godfrey (Farnham)

    Thompson, R. (Croydon, S.)

    Horobin, Sir Ian

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

    Thorneycroft, Rt. Hon. P.

    Horsbrugh, Rt. Hon. Dame Florence

    Noble, Michael (Argyll)

    Thornton-Kemsley, Sir Colin

    Howard, Hon. Greville (St. Ives)

    Nugent, Richard

    Turner, H. F. L.

    Howard, John (Test)

    Oakshott, H. D.

    Turton, Rt. Hon. R. H.

    Hughes, Hallett, Vice-Admiral J.

    Ormsby-Gore, Rt. Hon. W. D.

    Vane, W. M. F.

    Hughes-Young, M. H. C.

    Osborne, C.

    Vaughan-Morgan, J. K.

    Hurd, Sir Anthony

    Page, R. G.

    Vickers, Miss Joan

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

    Partridge, E.

    Vesper, Rt. Hon. D. F.

    Hylton-Foster, Rt. Hon. Sir Harry

    Peel, W. J.

    Wade, D. W.

    Iremonger, T. L.

    Peyton, J. W. W.

    Wakefield, Edward (Derbyshire, W.)

    Jenkins, Robert (Dulwich)

    Pickthorn, Sir Kenneth

    Wakefield, Sir Wavell (St. M'lebone)

    Johnson, Eric (Blackleg)

    Pike, Miss Mervyn

    Walker-Smith, Rt. Hon. Derek

    Kerr, Sir Hamilton

    Pilkington, Capt. R. A.

    W all, Patrick

    Kirk, P. M.

    Pitman, I. J.

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

    Lancaster, Col. C. G.

    Pitt, Miss E. M.

    Webbe, Sir H.

    Langford-Holt, J. A.

    Pott, H. P.

    Webster, David

    Leavey, J. A.

    Powell, J. Enoch

    Williams, Paul (Sunderland, S.)

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

    Price, David (Eastleigh)

    Wills, Sir Gerald (Bridgwater)

    Legit, Hon. Peter (PetersfieId)

    Prior-Palmer, Brig. O. L.

    Wilson, Geoffrey (Truro)

    Lindsay, Hon. James (Devon, N.)

    Ramsden, J. E.

    Wolrige-Gordon, Patrick

    Lindsay, Martin (Solihull)

    Redmayne, M.

    Woollam, John Victor

    Linstead, Sir H. N.

    Remnant, Hon. P.

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

    Ridsdale, J. E.

    TELLERS FOR THE NOES:

    Longden, Gilbert

    Roper, Sir Harold

    Mr. Brooman-White and

    Ropner, Col. Sir Leonard

    Mr. Whitelaw

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    10.15 p.m.
    Mr. John Peyton: At the beginning of last month 183 British ships were laid up. I want to take this opportunity very briefly to express my surprise and regret that there is nothing in the Bill to deal with the problems of the shipping industry. I also express surprise that there is as yet no Amendment on the Notice Paper concerning this industry. There is no doubting the good will which has been shown by successive Governments, who have accorded it exceptional treatment, and no doubting the good will shown by Parliament. We give due credit to the Opposition here—
    Mr. H. Wilson: Is it in order, Sir Charles, in a debate on the Question, That the Clause stand part of the Bill, to discuss what is not in the Clause?
    The Chairman: One can deal only with what is in the Clause.
    Mr. Peyton: With great respect, one of the points I am going to deal with is that of investment allowances. Am I not
    1378
    in order in expressing regret that the shipping industry is not benefiting from this Clause?
    The Chairman: Only what is in the Clause can be debated on the Question, That the Clause stand part of the Bill. One cannot deal with Amendments which have not been called.
    Mr. Diamond: At this very late hour one wants to make one's points extremely short and I shall endeavour to do so. The point I am arising comes under initial allowances. If we read the title of this Clause, we see that it is:
    "Restoration of investment allowances, and additional grant of initial allowances in certain cases."
    We are dealing with initial allowances and I shall deal with initial allowances granted in respect of private motor cars. The first part of the Clause is careful to exclude private motor cars from the benefit of investment allowances. It is careful to exclude them because the Government recognise that it would be wholly improper and indefensible for private motor cars to get the benefit of investment allowances. Private cars get the benefit

    1379
    of initial allowances and it is to be regretted that initial allowances have not been withdrawn from private cars. This Clause gives an opportunity of pleading once more for that withdrawal.
    The reasons are that the continuation of these allowances are both undesirable and unnecessary. It is undesirable because it provides much too great an inducement to people to buy cars when they receive an initial allowance of 30 per cent. and the ordinary wear and tear or depreciation allowance, so that anyone buying a new or secondhand car gets more than 50 per cent. allowed as an expense in the first year of purchase. That is far too great an inducement and quite an undesirable one. Indeed, it is unnecessary because, as we know, the motor car industry is flourishing and there is no reason why the sale of additional cars should be encouraged.
    Perhaps this point is not always appreciated, but that the allowance is unnecessary is proved by the fact that it is not always claimed. In many cases it turns out that the allowance would be so great in the first year and so small in a subsequent year that, to make up for that, it suits people who own private cars and use them partly for professional or business purposes to spread the allowance and, therefore, not be subject to the disadvantage of paying it back at a later stage.
    Because the continuation of initial allowances on private cars is both undesirable and unnecessary, I wish once more to call it to the attention of the Government in the hope that they will show their desire to stop what is a quite unnecessary allowance—almost a fiddle "—and encourage a proper appreciation of the rights of people as to their taxation responsibilities so that they do not have temptation put in their way by the enormous inducement to buy larger and more expensive cars.
    Mr. John Howard: I am pleased to see this Clause before the Committee, in particular since it continues investment allowance for the shipping industry, which my right hon. Friend singled out some years ago for special treatment. We have been debating the question of allowances for dry docks, but I feel that my right hon. Friend should tackle the problem of the shipping
    1380
    industry not merely by having investment allowances in the present form, but by making an arrangement whereby the industry can benefit through initial allowances, investment allowances and capital allowances already granted to firms in the industry through spreading such allowances backwards.
    At present the industry is suffering severe depression and it is no use giving it investment allowances which it cannot use. It would be far better to make an arrangement whereby past profits could be used against any further and new investment allowances. We have talked about a recession in the shipbuilding and ship-repairing trade, but my contention is that we must tackle this at the right point and give the allowances to that part of the industry that needs it.
    Mr. H. Wilson: On a point of order. Would it be possible to do this without legislation? If not, it would require legislation and that is not in the Clause as it now stands. How can it be done?
    The Chairman: I was waiting for the hon. Gentleman to develop his argument. We can only deal with what is in the Clause.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Consideration of postponed Clauses 18 to 28 and of new Clauses further postponed till after consideration of Schedules 4 and 5.—[Mr. Amory.]
    Mr. H. Wilson: I beg to move, That the Chairman do report Progress and ask leave to sit again.
    I think that the Chancellor will agree that we have made fairly good progress today. Some of us rather hoped that it might have been possible to get further through the Bill before the Recess, so that the time left after the Recess could have been devoted more to the new Clauses. However, I think that we have made good progress and are only an hour or two behind that rather optimistic schedule.
    Viscount Hinchingbrooke: What schedule?
    Mr. Wilson: I have just used the phrase that some of us hoped that we might have dealt with more of the Bill before the Recess to enable us to use more time after the Recess, and I said

    1381
    that we were only an hour or two behind that schedule. If I had pronounced it "skedule" I could have understood the noble Lord being upset and I would have been upset, too. I think that we have made quite good progress. I am sure that the Chancellor will agree with this.
    We have accepted the Chancellor's procedural Motion. I hope that we can get through the remaining Clauses of the Bill with that constructive criticism which, I am sure, the noble Lord, in common with my hon. Friends, desires, with suitable expedition, which I am quite sure the Chancellor desires, and that we shall be able to have plenty of time allotted to us after the Whitsun Recess for discussion of very important new Clauses on the Notice Paper, including one in the name of the noble Lord. I think that we have plenty of time for that, but that we have got as far as we can tonight. There is other business on the Order Paper.
    Mr. Amory: I agree with the right hon. Gentleman. I think that we have made quite good progress, although perhaps not quite as good as we had hoped in our more optimistic moments. We have been discussing important matters and I have no quarrel with the amount of time which has been taken on them. The right hon. Gentleman's proposal that you do report Progress, Sir Charles, is perfectly reasonable; we can rest on the progress which we have made and come back, I hope, stimulated and refreshed from a short holiday and complete the remaining stages of our consideration of the Bill with exceptional expedition. I therefore support the Motion.
    Question put and agreed to.
    Committee report Progress; to sit again Tomorrow.

  HOUSE PURCHASE AND HOUSING BILL
  Lords Amendments considered.
  HOUSE PURCHASE AND HOUSING BILL

    Clause 6.—(AMOUNT OF STANDARD GRANT.)
    Lords Amendment: In page 6, line 14, at end insert:
    (3) The reduction required by subsection (2) of this section in respect of any of the standard amenities shall not be made if part of the cost incurred in executing the works was attributable to interference with or replacement of that amenity and the local authority are satisfied that it would not have been reasonably practicable to avoid the interference or replacement.
    10.26 p.m.
    The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): I beg to move, That this House doth agree with the Lords in the said Amendment.
    The perspicacity of hon. Members will have revealed to them that this and the other two Lords Amendments cover the same point, where it arises in different Clauses. The issue is quite simple. It has come to light that it might not be possible to install all the standard amenities in a house without interfering with or moving one which is there already. The most obvious case, which would most often arise, is the house which has a water closet but which lacks other modern facilities, and yet in order to install the other facilities it is necessary to move the w.c. Under the Bill as it stands, the fact that the house already had a w.c. would mean that the maximum grant which could be paid under the Bill would not be £155 but only £115. Nevertheless, the owner of the house, carrying out what is the object of the Bill, would necessarily be put to expense in moving the w.c. from where it is and putting it elsewhere.
    It might similarly arise that the house had a food store in a scullery and it was necessary to convert that scullery into a bathroom in order to equip the house with all the standard amenities. In that case, under the Bill as it stands the owner would he entitled to receive not the full £155 but only £145.
    These three Amendments are designed to correct that. The first, which I have

    1383
    moved, deals with the privately-owned house. The second deals with the local authority house. The third deals with Scotland. I do not think that there is anything in the wording of the Amendment which I need explain. The House will see that a local authority must be satisfied that it would not have been reasonably practicable to undertake the improvement in some other way. If it is so satisfied, the local authority will be required under the Amendments to assess the grant without making a reduction from the maximum.
    Mr. G. R. Mitchison: As I understand the effect of the Amendment, if a man has one of the amenities already and has to move it, for the cost of moving it he receives that contribution which he would have received if it had had to be supplied as a new amenity.
    This opens up some rather curious possibilities, not, I agree, in connection with large amounts. But in most of these cases the amounts contemplated bear some relation to the cost of the actual object that was installed, the bath or the washhand basin or whatever it was, and in these cases, for merely moving a bath, one gets from a generous Government the same contribution that one would have received if one had put in a new bath. I may have misunderstood the Amendment, but I thought that was what it meant and that was what I understood the right hon. Gentleman to say.
    Since we are dealing with comparatively small amounts I should not have thought it a matter worth objecting to at this stage, but the Government ought to meditate more profoundly about the possible effects of putting in baths, basins, and so on, and the financial consequences of what they are doing. They ought to bear in mind, as we reminded them at an earlier stage of the Bill, that there is the further possibility in connection with this sort of thing that someone will find that he has been deprived of a perfectly good bedroom because a bath has been put in and, in consequence. the house is overcrowded. However, I cannot go into that now.
    Mr. Brooke: I would point out that there is a maximum limit of half the cost of the work.
    Mr. Mitchison: And I would point out that new baths cost more than the moving of old baths.
    Question put and agreed to.—[Special Entry.]

    Clause 14.—(AMOUNT OF CONTRIBUTION UNDER S. 13.)
    Lords Amendment agreed to: In page 10, line 38, at end insert:
    (4) The reduction required by subsection (3) of this section in respect of any of the standard amenities shall not be made if part of the cost incurred in executing the works was attributable to interference with or replacement of that amenity and the Minister is satisfied that it would not have been reasonably practicable to avoid the interference or replacement. [Special Entry.]

    Clause 21.—(AMOUNT OF STANDARD GRANT.)
    Lords Amendment agreed to: In page 14, line 22, at end insert:
    (3) The reduction required by subsection (2) of this section in respect of any of the standard amenities shall not be made if part of the cost incurred in executing the works was attributable to interference with or replacement of that amenity and the local authority are satisfied that it would not have been reasonably practicable to avoid the interference or replacement. [Special Entry.]

    Clause 21.—(AMOUNT OF STANDARD GRANT.)

      WAYS AND MEANS
      Considered in Committee.
      [Sir CHARLES MACANDREW in the Chair] Resolved,
      ESTATE DUTY: RETENTION OR ASSUMPTION OF BENEFITS ON GIFTS INTER VIVOS
      That, for the purposes of any condition of the law relating to estate duty which requires the exclusion of any benefit to a person where a gift is made of property, a benefit which a person obtained by virtue of operations associated with the gift shall be treated as a benefit to him by contract or otherwise.—[Mr. Erroll.]
      Resolution to be reported.
      Report to be received Tomorrow:
      Committee to sit again Tomorrow.

      COMPTROLLER AND AUDITOR GENERAL (SALARY)
      Resolution reported,
      That the rate of the salary which may be granted to the Comptroller and Auditor General under section one of the Exchequer and Audit Departments Act, 1957, be increased from six thousand pounds to seven thousand pounds per annum, and the date

      1385
      from which, under subsection (3) of that section, the person now holding that Office is entitled to a salary at the said increased rate be the first day of February, nineteen hundred and fifty-nine.
      Resolution agreed to.

      POST OFFICE WORKS [MONEY]
      Resolution reported,
      That, for the purposes of any Act of the present Session to vest in the Postmaster-
      1386
      General certain underground works constructed in London, Manchester and Birmingham in the exercise of emergency powers, it is expedient to authorise the payment, out of moneys provided by Parliament, of—

      (a) any expenses incurred by virtue of the said Act by the Postmaster-General; and

      (b)any expenses incurred in maintaining the works referred to in the said Act as "the London works", "the Manchester works "and" the Birmingham works".

      Resolution agreed to.

  SLUM CLEARANCE, BRISTOL
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh]
  10.34 p.m.
  Mr. W. A. Wilkins: I should like to express my appreciation to you, Mr. Speaker, for permitting me to change the subject of the Adjournment debate tonight and also to thank the Parliamentary Secretary to the Ministry of Housing and Local Government for his willingness to come here to answer the points which I propose to raise.
  I am sorry that it will be necessary for me to adhere more rigidly to my notes than I normally like to do, but I want to be sure that the things I say are what I intended to say. Local government elections were held last week. Generally speaking, comparing results with three years ago, which is the right comparison, one might say that nothing particularly startling happened, with perhaps three exceptions.
  One of these exceptions was in the City of Bristol, my own city. There we had a swing in the elections of nine seats to the opposition. Where there is a swing of that character there is generally a cause for it. It is probable that in Bristol there were two, maybe three, factors which contributed to the Conservative victory. What however, will not be denied is that the overwhelmingly predominant issue was that which I am taking as my Adjournment subject tonight.
  I am seeking to obtain from the Government a declaration, or, what I think would probably be a more accurate description, a restatement of their slum clearance policy. I have been in politics for a fairly long time, long enough to learn that whatever one may feel about misrepresentation, recrimination gets one nowhere. When I feel that way I try to remind myself that politics are as dirty as one stoops to make them and as clean as one likes to keep them, and that, in the long run, no one in politics or in business ever profits from ill-gotten gains.
  So I forget the result of the election and I examine the cause. Official advice which I have received from our local
  1388
  authority—at my request, of course—up to Monday morning of this week shows that there have been confirmed by the Minister 52 compulsory purchase orders involving 980 "pink" properties, that is, properties that are regarded as being unfit for human habitation, and 332 "grey" properties, which means, of course, that they could be occupied perhaps for a short time in the future.
  In those properties there are 1,358 families of which 338 are owner-occupiers. The first question that I want to ask the Parliamentary Secretary is whether it is in conformity with Government policy that unfit houses should be demolished and whether those 52 orders are justified. If the answer is "No", then I would ask why the Minister confirmed them.
  The second point which arises is that there are now 11 orders which await the Minister's confirmation. They comprise 839 "pink" properties and 453 "grey" properties with an estimated number of 1,254 families, of which owner-occupiers number 527. The question which I want to ask the Parliamentary Secretary is whether, in view of the campaign conducted by some Conservatives—I emphasise the words "some Conservatives"—in Bristol, resulting in the setting up of organisations to resist compulsory purchase orders, which also appear to have been endorsed by the electors, the Government feel that they should abandon their slum clearance programme not only in Bristol but throughout the country and not proceed with these confirmations.
  Of course, I do not want to give the Minister the impression that all Conservatives in Bristol are disloyal to him on this vital issue. I shall quote to him, in context, a paragraph which appeared in the Bristol Evening World of 7th October last. It was written by the present Conservative candidate for Bristol, Central, and, broadly speaking at any rate, I confirm it as my own experience. This is what he said:
  "When after an extensive recent canvass I am asked what is the main interest of the people on whom I called and I answer ' Housing' then the silence is broken by a scream of abuse from Wedgwood Benn. I have raised this subject of housing in Bristol because it is vital and urgent. I am at present in correspondence with the Bristol (Socialist) Council on the matter and have been invited

  1389
  to meet the housing authorities. They at least appear able to treat the discussion with rational calm. Meanwhile, I say to Benn that if he comes out with me in Bristol and visits streets at random I will prove to him that the first consideration, as one goes from door to door, is not Quemoy or even how insulting Socialists can be to the Queen but, Can you tell me when this street is coming down?'"
  I now wish to quote some of the things said by Conservatives before and during the campaign, and by some of the victors afterwards. A very well-known Bristol alderman, who has been prominent in the formation of the home defence associations, speaking before the election in Easton, Bristol, said:
  "Those people who have voted for compulsory purchase orders on the Housing Committee have signed and presented, in my opinion, their own death warrant."
  And how right he was. At the same meeting, the chairman said:
  "This is about the last chance we have to show our disgust about C.P.O.s. If Mr. Brewer is not successful in the election it will be the green light for the council to carry on as they are doing and even much faster."
  Another ex-councillor of one of the wards in my own constituency—who, again, has been prominent in the build-up of the home defence associations —said:
  "Make no mistake, Mr. Brewer is going in. I say that the C.P.O.s are no more, and no less, than one dirty land-grab."
  After the election, we have the gentleman who is probably now, or will be, within a day or two the leader of the opposition in the City Council in Bristol, saying, in the newspaper report:
  "Bristol… was 'sick and tired' of many Socialist policies and their complete abuse' "—
  complete abuse—
  "of compulsory purchase and clearance orders."
  In my judgment, if that is right it is not merely a reflection upon what the council is doing in Bristol, but a reflection on the Minister who has confirmed the orders that have been submitted to him. One of the candidates, I suppose in a moment of ecstasy on Friday, said, as the newspaper put it, that he
  "…will be keeping a watch on any legislation affecting independent retailers —and particularly on compulsory purchase orders. C.P.O.s? I hate them,' he briefly said."
  I could go on quoting for quite a time all these things said before, during and
  1390
  after the election, but I want now to refer to what I believe to be the crux of the whole matter. I believe that there would be little, if any, trouble at all if compensation payments bore any resemblance at all to being fair.
  Compensation payments are made under different Acts and in three ways. First, there is the dwelling that is considered to be completely unfit for anyone to live in. That dwelling is considered to have no value at all except the value of the site on which it stands. Hence, quite frequently, we have this nominal payment of £1. Secondly, there is the house in the clearance area that is considered "well maintained," and has a "well maintained" value put on it by the district valuer, albeit it is not usually a very high value. Thirdly, there is the house that does not come into the unfit category at all but happens to be situated on a site that must be totally cleared so that the new development may take place. Compensation is paid on that house at market value. Of course, all three of these values are contested on grounds of inadequacy, but undoubtedly it is the first category which creates the greatest sense of injustice, particularly to those people who are owner-occupiers.
  I wish that I had the time available tonight to explain how some of these people have come to buy these properties. I have not got the time, but they are, in fact, the real victims of our present Acts of Parliament. We here in Parliament understand how this £1 site value payment came into being. It was brought in to catch up with property speculators who bought up slum dwellings in order to cash in on compensation payments. But today it is catching, in the main, innocent people—people who were persuaded to buy the house in which they live because, as they were told, "It will only cost you half a crown or so more a week than the rent you now pay on a mortgage of £200."
  If we take these people's houses from them they have not only to liquidate their outstanding mortgage, but also to meet the rent of another dwelling, which is usually a corporation house. I do not believe that any local authority really wants to treat its citizens in this way. But it is only here in Parliament that we can put this matter right.
  Mr. Speaker: Order. It seems to me that we can only put it right by legislation.
  Mr. Wilkins: I was not going to suggest legislation, Mr. Speaker. In a moment's time I was going to suggest that on a future occasion we might look at some of the Sections in the Acts which apply to this subject, but I am not asking for any legislation tonight. I am aware that I cannot do that.
  Members of local authorities, our councillors, are just as much the victims of our Acts of Parliament as are the people who are involved in the clearance areas. They can do no more than they are doing. We really ought to consider these compensation provisions again, and I hope that the Parliamentary Secretary will say tonight that that will be done soon.
  I have time for only one further reference and it is to the Town and Country Planning Bill, which has left this House and is now in another place. That is not really the answer and it is wrong that people should be given the impression that it is. At the most, it will give the equivalent of gross rateable value as compensation. In how many cases would this exceed £15? I suggest that it would be very few indeed. The property owners' journal, known as Property, claims that it gives nothing at all. Last month's journal said:
  "The purpose of the Bill is to establish fair market value as the basis of compensation when property is compulsorily acquired for public use, but it excludes from this new basis all property that is required for slum clearance."
  Finally, I suggest that as clearance of areas under compulsory purchase orders may be spread over a number of years —perhaps even up to ten years—a local authority should be enabled to remove tenants who want to go on a voluntary basis, leaving those who prefer to remain until the last possible moment before site redevelopment must take place. But, of course, there is a snag about this. I understand that the housing subsidy which the Government give for slum clearance projects is paid to a local authority only at the point in time of the demolition of the house. I therefore suggest for the consideration of the Government that if the subsidy were made payable at the time when the tenant is
  1392
  placed in a new corporation dwelling, it would certainly facilitate this voluntary method of transfer. Under present arrangements, local authorities have to carry too much financial obligation.
  Mr. Speaker, I hope that I have been fair. I have tried to put the case objectively. On 12th March, two months before the elections took place, I wrote to the Minister of Housing and Local Government about this subject. I reminded him of what had transpired on the Report stage on the preceding day; and also told him of the activities of certain people in Bristol in connection with these compulsory purchase orders. I concluded my letter with these words, which I would like to put on the record tonight:
  "I am never the one to object to a fair battle. I support the slum clearance drive and am certain it would be carried out with less friction and greater speed if we all endeavoured to emphasise its ultimate benefits to the community. In this case, it happens to be a Labour-controlled council which is endeavouring to carry out your wishes. It could, of course, be a council of a different political complexion. Whoever's responsibility it may be, it is our job to help them, not hinder. It is so easy to inflame the passions of people who feel aggrieved, as we politicians well know. I would do everything in my power to secure justice in the way of compensation for those who lose their houses, but I do object to this issue being brought into the political cockpit by people who are your alleged supporters."
  That I believe to be a true statement of fact.
  I hope that tonight, as a result of what I have said here, at least it might be pointed out clearly to the people of my city where blame, if blame there be at all, rightly rests. It is for us here in Parliament to make the decisions that we will give better opportunities and better compensation, if necessary, to those people whom we want to remove from dwellings which many of us right down deep in our hearts will admit are not fit for people to live in and to give them a far better chance in life.
  Only a few days ago, I drove through an area of my city which, in my time, had often had to be policed by three policemen at a time. It was one of those areas where few people would go and walk. There is now being erected—it is almost nearing completion, I believe—as fine a block of flats as anyone could wish to see anywhere. I find it incredible to believe that people really do not want

  1393
  to have the opportunity of occupying places such as that in preference to those which they already have. Indeed, our experience, as a result of the canvassing we do, is clearly that the majority, probably 75 per cent., of these people are only too anxious to get out of those places and to accept these new buildings which are built by the corporation but which, in the main, are supplied under the slum clearance Acts.
  I thank the Parliamentary Secretary for being good enough to agree to answer this Adjournment debate tonight.
  10.55 p.m.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): I am most grateful to the hon. Member for Bristol, South (Mr. Wilkins) for mentioning the subject of this Adjournment debate to me before this evening. Fortunately, my right hon. Friend has no administrative responsibility for the ups and downs of political parties in Bristol or elsewhere, and I ask the House to believe that what I am about to say is in no sense dictated by political considerations of any kind.
  My right hon. Friend has, of course. a very large responsibility for slum clearance throughout the country. Between 1956 and the end of last year more than 138.000 houses had been pulled down in England and Wales and more than 400.000 people have been transferred from slums to decent homes. By the end of last year we had achieved our target of rehousing in Great Britain—not only England and Wales—as many as 200.000 people every year from the slums. I would say straight away to the hon. Member that it is the firm intention of Her Majesty's Government to see this operation through, and that the Government have no wish at all to create any obstacles which would impede the progress of slum clearance.
  On the whole, I think that it is true to say that local authorities have been very successful in getting on with this job with relative smoothness and more or less with immunity from complaint. I am not saying that compulsory purchase is popular with the public. We all dislike compulsion in any form, but sometimes it is unavoidable. One thing that the Government are now in process of doing is to take at least some of the sting out of compulsory purchase by
  1394
  going over to the compensation formula of market value.
  Turning to the case of the City of Bristol, I would, first, take up the point made by the hon. Gentleman on the question of leaving certain houses in clearance areas in occupation until such time as the local authority can provide the tenants with new housing. The position there is that slum clearance subsidy is payable in respect of each new dwelling which is built in order to secure the rehousing of a family moved from a slum house. I understand that since June of last year the Bristol Corporation has been deferring the completion of purchase of certain houses in clearance areas until the occupants have actually been rehoused. That is in line with the policy which my right hon. Friend is, and has been, advocating to local authorities up and down the country.
  The hon. Gentleman mentioned one or two figures about compulsory purchase orders and clearance orders for the City of Bristol. My information is that since the beginning of 1956 we have confirmed 38 compulsory purchase orders and 53 clearance orders. Some of these orders, of course, have not been confirmed as submitted by the local authority. As hon. Members on both sides will know, many orders are confirmed by my right hon. Friend subject to certain modifications, some of which allow for cases of hardship. and others commonly provide for the exclusion of "grey" land which the Minister may consider is not essential to the redevelopment which the local authority has in mind. At present, there are 13 compulsory purchase orders and 14 clearance orders which are outstanding and which will, of course, be considered on their merits.
  In Bristol, for reasons into which I do not want to go too closely tonight, there has undoubtedly been a good deal of public disquiet over administration of compulsory purchase as a preliminary to slum clearance. I have looked at the matter with some care, and I should like to say a word or two about why I think this public disquiet has arisen.
  Mr. Wilkins: In Bristol?
  Mr. Bevins: Yes, in Bristol.
  Originally, the Bristol City Council proposed, I understand, to clear 10,000 slum houses in a period of ten years, but with the advent of the Housing Subsidies Act. 1956, which abolished the general

  1395
  needs subsidy, the Corporation had second thoughts and decided to speed up the period of clearance to within five years so as to get the best financial aid for the replacement of the old houses.
  I do not comment on that. The Corporation was a free agent to do that or not to do that as it wished, but the decision to accelerate the pace of slum clearance meant that clearance, and compulsory purchase, orders had to be brought forward more rapidly than originally expected. I think that all hon. Members will agree that that put a good deal of strain on all those concerned with this operation in Bristol. That, in turn, led to the criticism that the Corporation was acting with rather more zeal than discretion.
  I think that one can fairly say, without being political or biassed, that until a year or two ago not enough attention was paid to some of the human problems involved. For example, I understand that in almost every case the City Council, no doubt motivated by the best of intentions, to get a move on and make progress, embarked on compulsory acquisition without attempting to make purchases by agreement. Again, I am not saying that it is always possible or feasible to undertake purchase by agreement, but very often it is in the case of relatively small schemes.
  It was also said that the valuations undertaken by Bristol's own valuers were not on the generous side, although I agree that the figures were influenced by the widespread existence in Bristol of rent charges which had the effect of bringing down values. As a result of all this, compulsory purchases were hotly contested and a good deal of resentment developed in the city.
  It is only fair to add that more recently the Corporation has sought to meet some of the earlier criticisms and has been anxious to avoid individual hardships and I understand that it is now attempting to negotiate purchase by agreement in the case of relatively small sites. There is no doubt that the payment of nominal sums of £1 to the owners of unfit houses has exacerbated feeling in the city.
  That was recognised by Bristol Corporation and hon. Members put several Questions to my right hon. Friend some months ago. It was represented, as it has repeatedly been represented by some of my hon. Friends, that the site basis
  1396
  compensation for unfit houses ought to be changed. That change is to be made under the Town and Country Planning Bill, now before Parliament, to the extent that owner-occupiers who do not benefit under the Slum Clearance (Compensation) Act, 1956, and who are liable to receive only derisory compensation, will not in future get less for the site than the gross value for rating purposes.
  I was a little surprised to hear the hon. Member refer to this change in the compensation provisions as being inadequate. After all, we are here dealing with houses which are unfit and which Parliament, for many years, has recognised should not be compensated for the structure but only for the land. It would surprise me if the hon. Gentleman could get the support of his hon. Friends for going beyond what has been proposed by my right hon. Friend.
  In addition, it will continue to be the case that if a house has been well maintained in spite of its inherent defects, well maintained payments may be directed by the Minister. Those will not be less than nine times the rateable value of owner-occupied houses or four-and-halftimes the rateable value of rented houses. Houses which are acquired as "grey" land, that is to say, land outside that covered by an order but needed by the Corporation for satisfactory redevelopment of that area, will in future be assessed for compensation at full market value.
  Mr. G. R. Mitchison: If these orders were oppressive for so long, why were they confirmed by the Minister?
  Mr. Bevins: I thought that I made that clear at the outset when I said that quite a number of orders which were confirmed were confirmed subject to modifications, to eliminate features which seemed to my right hon. Friend to be undesirable.
  I was about to say, in conclusion, that I am sure that the general public and certainly my right hon. Friend want to see progress with slum clearance maintained. Given the changes in compensation which are now in train and an understanding approach by local authorities—
  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 five minutes past Eleven o'clock.

WIRELESS AND TELEVISION
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Preamble
The House met at two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Exeter

REPORTS ON PARKING METERS SCHEMES
2.5 p.m.
EARL HOWE: 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 they will request local authorities authorised to introduce parking meter schemes to provide annual reports of the receipts and expenditure in connection with the schemes, and of the expenditure from the profits upon the provision or maintenance of off-street parking accommodation.]
THE EARL OF GOSFORD: My Lords, I am sure that, in the early stages, we shall all welcome information about the financial results of these parking meter schemes, including the help they are giving to off-street parking schemes, and that the local authorities running them will be very ready to satisfy our reasonable inquiries. Later on, however, when all such information has been obtained annual reports would be of little value and would involve unnecessary work and my right honourable friend, the Minister of Transport and Civil Aviation, does not contemplate seeking any amendment of the Road Traffic Act, 1956, to make such reports a statutory requirement.
EARL HOWE: My Lords, may I ask the noble Earl whether when this idea of parking meters was first brought before Parliament it was not distinctly laid down that the monies raised were to be devoted towards the provision of off-street parking? Surely the motor world, which is paying well over £500 million a year, has a right to be told how much of the proceeds are being devoted to this particular purpose. May I also ask the noble Earl whether he has noticed that in the last day or two the Minister has given authority for eleven new schemes in
338
eleven cities? Are we to be told that we are never to know how the money contributed by the motor world for parking is spent, and never to be given any idea of what the balance sheet might be?
THE EARL OF GOSFORD: My Lords, I fully appreciate the noble Earl's feelings in this matter, but I thought that perhaps the first part of my reply would have already answered his question. I am certain that there is no desire on the part of the local authorities to hide any such figures; in fact, we are convinced that they will provide all the figures which my right honourable friend will require to help over the future. But the fact still remains that there is no statutory requirement on the local authorities to provide these figures as a right by demand from Parliament.
VISCOUNT BRENTFORD: My Lords, may I ask the noble Earl whether he appreciates that there is a great depth of apprehension concerning the provision of off-street parking places out of the proceeds of parking meters?—because that was the bargain. Can the noble Earl indicate whether he is aware that any plans have as yet been promulgated by any local authority in order to provide off-street parking out of the profits of this venture?
THE EARL OF GOSFORD: My Lords, I understand that that is, in fact, so. As regards the first part of that question, I should like to take this opportunity to emphasise that in Section 23 of the Road Traffic Act, 1956, local authorities are required to use surplus monies which they get from the parking meter schemes to meet all or any part of the cost of the provision and maintenance of parking accommodation otherwise than on highways.
EARL HOWE: My Lords, may I ask the noble Earl whether he is aware that the Answer which the Minister has given through him to-day will be regarded as most unsatisfactory by the people interested?
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should like to ask whether, in the interests of getting the maximum co-operation possible in all the circumstances put by the noble Earl, the Minister would undertake to ask the local authorities—I know that there is

339
no statutory compulsion—to make returns from time to time, and with the privilege of laying them before Parliament for its information?
THE EARL OF GOSFORD: My Lords, I can assure the noble Viscount that my right honourable friend requires this information as much as anybody else, and there is no doubt that local authorities will provide him with all the information that he requires. But he has not the right to demand that he should receive the information. My noble friend Lord Howe will forgive me for saying that I think his final remark is most unjust, in view of the first part of my reply, which was that my right honourable friend is convinced that the local authorities will supply all information to all interested parties. It is a new scheme. All I am saying is that it is not up to my right honourable friend to demand such information by law, because the law does not provide for him to do so.
VISCOUNT BRENTFORD: My Lords, arising out of that last reply, may I ask the noble Earl whether he will ask his right honourable friend to make available to the public whatsoever information he does receive from local authorities upon this subject?
THE EARL OF GOSFORD: My Lords, I will certainly ask my right honourable friend about that. I cannot give a direct reply to the question.
THE EARL OF LUCAN: My Lords, can the noble Earl say if the accounts of local authorities when, they are audited will show whether the income from parking meters is being devoted to off-street parking? If that is so, the public will be aware of the situation.
THE EARL OF GOSFORD: My Lords, I am grateful to the noble Earl for that intervention. That, as I understand it, is so.

ANTIBIOTICS IN COSMETICS
LORD DOUGLAS OF BARLOCH: 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 antibiotics are included in cosmetic preparations sold in this country; and whether any steps have been taken to prevent such use of antibiotics.]
THE EARL OF ONSLOW: My Lords. so far as Her Majesty's Government are aware, no cosmetic preparations including antibiotics are on sale in this country. They are assured that no such preparations are manufactured here, and none are known to be imported. The scope for the uncontrolled sale of such preparations is in any case extremely limited, as the sale or supply of most antibiotics is controlled under Part II of the Therapeutic Substances Act, 1956, which applies to penicillin and such therapeutic substances as are brought within the scope of the Act by regulations made jointly by the Health Ministers of England and Wales, Scotland, and Northern Ireland, being substances which appear to the Ministers, after consultation with the Medical Research Council, to be capable of causing danger to the health of the community if used without proper safeguards.
Section 9 of the Act prohibits the sale or supply of such substances, or of any preparations which contain such a substance, except by or on the direction of a medical practitioner, dental practitioner, veterinary surgeon, or veterinary practitioner for treatment on the direction of the practitioner or surgeon; or at a registered pharmacy on the prescription of such a practitioner or surgeon. The Act provides that the Ministers, by regulations, may relax this prohibition in particular cases in such circumstances and according to such conditions as may be specified. No proposals have been made to the Ministers to relax the requirements of the Act so as to permit the free sale of cosmetic preparations containing antibiotics. Her Majesty's Government are satisfied that the statutory provisions are sufficient to avoid any risk to health from the sale of cosmetic preparations containing antibiotics.
LORD DOUGLAS OF BARLOCH: My Lords, in thanking the noble Earl for that very satisfactory answer, may I ask whose duty it is to enforce the regulations to which he has referred?
THE EARL OF ONSLOW: My Lords, under the Act I have just mentioned, anybody who is found selling these things without proper right or control is liable to a fine of £100 and, on subsequent convictions, to imprisonment. These things can be sold only through the manufacturer, who sells them to the retailer in the ordinary way to go to a chemist or a doctor. Should the retailer sell cosmetics containing antibiotics he would be liable to a fine of £100 and, for a subsequent offence, to three months' imprisonment. I would suggest to your Lordships it is more than unlikely that this could be done, because 'the manufacturer puts things of this sort in his cosmetics only to advertise, "This is a better cosmetic than somebody else's because it contains something which stops giving you skin trouble." If any retailer sold such cosmetics he would immediately be fined £100, and go to gaol for three months on a second conviction. I would suggest to your Lordships that this is most unlikely and we have no evidence of the fact that this has been done.
LORD GREENHILL: My Lords, could the noble Earl say what system of inspection there is to ensure that antibiotics are not introduced into these cosmetics?
THE EARL OF ONSLOW: My Lords, the manufacturer manufactures a certain antibiotic. He sells it to the retailer, where it is controlled. If somebody else chooses 'to use that controlled drug otherwise than in accordance with Section 9 of the Act—and I am not going to bore your Lordships by reading out the almost unpronounceable names of the list of controlled antibiotics; they are all ones that matter—then he is liable to prosecution.
LORD GREENHILL: My Lords, I should be quite content if the noble Earl
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would tell me what the system of inspection is.
THE EARL OF ONSLOW: There is no form of inspection in that way at the moment; it is merely that certain drugs are controlled under the 1956 Act. If any of those are used out of control, then the purveyor of those things is liable to prosecution under the 1956 Act.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I take it that the ordinary inspectors under the Food and Drugs Act make periodical visits to certain places and take samples. May I ask a question on one point which does not seem to be quite covered? I am obliged for the very full answer the noble Earl has given. What is done to control the importation from abroad of these cosmetics, some of which undoubtedly contain antibiotics?
THE EARL OF ONSLOW: My Lords, that matter comes under the Board of Trade, and does not arise out of the Question I am answering. It is a perfectly fair, non-Party thing to say that the situation at the moment is as I have stated. These drugs are controlled under the 1956 Act. Anyone who sells them anywhere except through the proper channels is liable to a considerable fine and imprisonment. It is most unlikely—in fact we have no evidence to support it—that any cosmetic is being made which has as an ingredient one of these possibly harmful antibiotics.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask the noble Earl whether imported cosmetics are subject to analysis from time to time to see that these regulations are complied with?
THE EARL OF ONSLOW: My Lords, that, again, is rather wide of the question. That is a Board of Trade matter. If the noble Lord would like to put down another Question I should be delighted to get my colleague to reply to it or. if it comes to me, to do my best to answer it.

MIXED COMMITTEE ON KRUPP ASSETS
2.20 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, with reference to the 1953 agreement for the disposal of an estimated 74 per cent. of the steel, iron and coal producing assets of Herr Alfried Krupp von Bohlen and Halbach, they will (1) give the names of the seven members of the Mixed Committee to consider applications for an extension of time and the political, business, economic or other associations of each member (2) state the terms of reference to the Committee; and (3) say whether the meetings of the Committee will be held in public.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lards, as regards the first part of the Question, the members of the Mixed Committee so far appointed are: for the United Kingdom, Sir Edward Jackson, who is a distinguished Judge and former colonial civil servant who has served in Germany as Chief Judge of the Allied High Commission Court in the British Zone and afterwards on the Mixed Board on War Criminals; for the United States, Mr. Spencer Phenix, an economist and former investment banker. The names of the French and the three German members have not yet been announced by their respective Governments. The seventh member will be elected by the other six.
The answer to the second part of the Question is that the terms of reference of the Committee are given in Article 10 of Chapter 1 of the Bonn Settlement Convention, published in 1955 as Command Paper 9368. In brief, the Committee can grant an extension of time if the applicant establishes that without it the securities could not with the exercise of reasonable efforts be disposed of on reasonable terms and on a basis compatible with the German public interest and without a disruptive effect on the German capital market. As for the third part of the noble Lord's Question, it is most unlikely that the meetings of the Committee will be
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held in public. It is laid down in the terms of reference to which I have just referred that the Mixed Committee shall adopt its own rules for the conduct of its business.
VISCOUNT ELIBANK: I beg to thank the noble Marquess for his comprehensive reply. With regard to the names of the other members of the Committee, perhaps he will allow me to put down a question after the Whitsuntide Recess. With regard to the answer as to whether the meetings will be in public, will there be any report, of any sort or kind, to Parliament as regards the findings of this Committee?
THE MARQUESS OF LANSDOWNE: Yes, my Lords, the findings of the Committee will be reported.
LORD OGMORE: My Lords, may I ask whether those who have strong views on this question will be enabled to make representations before the Committee?
THE MARQUESS OF LANSDOWNE: There are always the normal channels for views of this sort to be expressed, and I think that we can say that the noble Viscount, Lord Elibank, has perhaps been very clear in the views that he holds and has been given every opportunity of expressing them.
LORD OGMORE: If the noble Viscount wishes to express them in person and thus give them more force can he do so? Could he go to this Committee in person—he or anyone else—and express his views?
THE MARQUESS OF LANSDOWNE: No, my Lords.
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, with reference to their answers in this House on April 27, 1959, that the purpose of the Krupp Mixed Committee is "to work out the best solution in the interests of Europe" and "to consider whether it is reasonable within the time limits … to insist on the remainder of these deconcentration requirements in the general interests of Europe", the findings of the Mixed

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Committee as to what is, or what is not, in the interests of Europe in this matter will Abe subjected to their review and to the approval of the Legislature of the United Kingdom.]
THE MARQUESS OF LANSDOWNE: My Lords, the Answer is, No. The decisions of the Mixed Committee will not be reviewed by any of the national Legislatures concerned. There is no provision for such procedure under the terms of the Bonn Settlement Convention of 1955. The findings of the Mixed Committee will therefore be final.
VISCOUNT ELIBANK: My Lords, I beg to thank the noble Marquess for his Answer, in which he made no reference to the general interests of Europe. May I ask him this question? Is he aware that there was never any question of an extension of time being granted except in the event that the original period was inadequate in which to dispose of the prescribed assets? Is he further aware that April 22 last, in the course of questions and answers to questions raised by me, was the first time that Parliament heard from the Government that the general interests of Europe were to be discussed in considering an application for an extension of time. Will the noble Marquess say when, and on what ground and authority, this new element of the general interest of Europe was introduced into the matter?
THE MARQUESS OF LANSDOWNE: I wonder whether the noble Viscount considers that the interests of. Germany are incompatible with the general interests of Europe.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, are we not entitled to use a couple of common quotations to suggest that, from the Answer given by the noble Marquess, "the chips are down" and "the pass is sold"?
LORD BIRDWOOD: Would the noble Marquess agree it would be both improper and quite unpractical to attempt to enforce any unilateral point of view of one Parliament concerned on the other Parliaments concerned? I wonder whether he would also agree that the principle of deconcentration was conceived at a time when there was very little conception of a European Common Market, and that that fact has to be
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brought into consideration in considering the interests of a great firm such as Krupps?
VISCOUNT ELIBANK: If the noble Marquess does not want to answer that point, may I ask him whether he is aware that following April 22, when there were questions and answers in this House, a paragraph appeared in the Frankfurter Allgemeine Zeitung, Frankfurt, on April 24 under the heading "Der Westen braucht Krupp"—"the West needs Krupp"? May I ask him whether he is aware that there is very little likelihood of improved Anglo-German relations on the basis that the Krupp organisation is built up again, an organisation which enabled Hitler to go to war and during most of which war Herr Krupp conducted his operations with slave labour, male and female?
VISCOUNT STANSGATE: If the noble Marquess is not going to attempt to answer that point?—
THE MARQUESS OF LANSDOWNE: My Lords, I have had a series of speeches addressed at me, and it did not seem to me that some of them really called for reply. I am perfectly willing to answer the questions which the noble Viscount addresses to me so far as is within my power.
VISCOUNT STANSGATE: Since the noble Marquess does not consider the questions so far merit a reply, may I ask a question which may merit a reply. Is the intention, when he speaks of the general interest, to increase the arms potential of Germany?
THE MARQUESS OF LANSDOWNE: It is the view of Her Majesty's Government, and of the other Governments concerned, that the decision which we have reached is for the best.
LORD OGMORE: My Lords, is it a fact, from what the noble Marquess has said, that Parliament has no further power in this matter and that the Government have surrendered their powers and the powers of Parliament to this Committee?
THE MARQUESS OF LANSDOWNE: My Lords, as I have tried to explain, when this Mixed Committee is set up it will be an autonomous Committee to which we all agree; and it does have

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complete and absolute powers, as the noble Lord, Lord Ogmore, understands. That is correct.
VISCOUNT ELIBANK: Is the noble Marquess aware that when this Committee was adumbrated under the Bonn Convention it contained no reference at all to the ultimate objective of the Committee as now disclosed, and that therefore Parliament ought surely to be consulted when that objective is discussed?

DOG LICENCES BILL [H.L.]
2.30 p.m.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to consolidate certain enactments and Orders in Council relating to the licensing of dogs kept in Great Britain. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read la.—(The Lord Chancellor.)
On Question, Bill read 1aand to be printed.

FIRE SERVICES BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to amend the Fire Services Act, 1947, and make further provision as to the pensions of persons transferring to or from the fire service and as to members of fire brigades becoming temporary Instructors in training establishments. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read la.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER CONFIRMATION (WEST HERTFORDSHIRE MAIN DRAINAGE) BILL
Read 3a (according to Order), and passed.

DEER (SCOTLAND) BILL [H.L.]
2.33 p.m.
Order of the Day for the Consideration of Commons Amendments read.
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD FORBES): My Lords, I beg to move that these Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord
Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[The references are to Bill (62) as first printed for the House of Commons.]
Clause 1, page 2, line 9, after ("crofters") insert ("and of the persons so appointed at least one shall, in the opinion of the Secretary of State, represent the interests of farmers, and at least one shall represent the interests of crofters").
LORD FORBES: My Lords, the effect of this Amendment is that in selecting three members of the Red Deer Commission from nominees of organisations representing farmers and crofters my right honourable friend the Secretary of State will appoint at least one representative of farmers and one of crofters—in other words, it is recognised now that crofters have a special place in the Highland economy, and it gives them a definite voice on the Commission. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 2, page 2, line 19, leave out from beginning to ("may") and insert ("five persons, being a chairman and four other members, two of whom shall, in the opinion of the Commission, be representative of the interests mentioned in heads (b) and (c), and two of the interests in heads (d) and (e) of subsection (4) of the last foregoing section, and of any such panel as aforesaid three shall be a quorum.
(2) The Commission").
Leave out lines 23 to 27.
LORD FORBES: My Lords, if I may, I should like to take Amendments Nos. 2 and 3 together. The effect of these Amendments is that the membership of the panel which was fixed at a minimum of three is now altered to a fixed number

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of five—that is, a Chairman and four members. Two of the members will represent farming and crofting interests, and two of the other members will represent the sporting and land-owning interests. That means that the interests of the members on the panel will be balanced. It also provides for a quorum of three. It was felt that the minimum membership of three made no allowance for any unavoidable absence. The second Amendment is consequential on the first. My Lords, I beg to move that this House cloth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 3, page 2, line 38, after ("matter") insert ("relating to the purposes of this Act").
LORD FORBES: My Lords, this is a clarifying Amendment. It makes it quite clear that my right honourable friend the Secretary of State may obtain advice from the Commission only on matters relating to the purposes of the Bill. It was never the intention that my right honourable friend should be able to ask advice from the Commission on matters not relating to the purposes of the Bill. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 5, page 3, line 27, at end insert ("and in the case of a second or subsequent conviction to a fine not exceeding fifty pounds or to imprisonment for a term not exceeding three months, or to both such fine and imprisonment").
LORD FORBES: My Lords, this Amendment deals with penalties. Clause 5 empowers the Commission to require owners to make returns of the numbers of red deer killed. The present penalty for failure to make a return or for making a false return is £20. The Amendment provides for a penalty of £50, or three months' imprisonment, or both, upon a second or a subsequent conviction. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 6, page 3, line 28, at beginning insert ("Subject to the following provisions of this section").
LORD FORBES: My Lords, this is a purely drafting Amendment. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 6, page 3, line 29, leave out ("habitually").
LORD FORBES: My Lords, by leaving out the word "habitually" the Commission or the panel will be enabled to take action against marauding deer which have only once caused damage. The safeguard against unreasonable action by the Commission is that the damage must be substantial and that the killing of deer is necessary to prevent further damage. I beg to move that this House cloth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 6, page 3, line 29, at end insert ("or garden ground").
LORD FORBES: My Lords, this Amendment enables the Commission or the panel to take action against marauding deer which have come on to garden ground and have caused substantial damage. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 6, page 3, line 33, leave out ("may") and insert ("shall").
LORD FORBES: My Lords, this Amendment places on the Commission or

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the panel an obligation to take action against marauding deer causing substantial damage and likely to go on causing damage. Previously, the clause said that the Commission "may" take action. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 6, page 3, line 42, leave out from ("shall") to end of line 44 and insert ("make a request to that effect in writing to that person.
(3) Where any such request as aforesaid has been made to a person, the Commission shall not issue an authorisation under this section unless it appears to them that he has become unable or unwilling to comply with the terms of the request").
LORD FORBES: My Lords, subsection (1) of Clause 6 provides that where the Commission are satisfied that marauding deer are causing damage that is likely to be continued they shall authorise someone to kill the deer. But subsection (2) provides that where they are also satisfied that they know from which land the deer are coming, and that the owner or the shooting tenant of that land will forthwith undertake the killing of the deer, they shall not issue an authorisation but shall instead give him an opportunity of doing so at their request. The effect of the Amendment is to ensure that if it becomes apparent that he cannot or will not comply with the request, the Commission shall then authorise someone else, for example one of their own stalkers, to undertake the killing without further delay. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 6, page 4, line 5, leave out from ("give") to end of line 7 and insert ("as soon as practicable to any person, who in their opinion is likely to be on any land mentioned therein, such warning of their intention as they consider necessary to prevent danger to that person").
Clause 6, page 4, line 8, leave out from beginning to ("it") in line 9.
Clause 6, page 4, line 10, leave out ("that owner") and insert ("the owner of any land which is to be mentioned in an authorisation under this section").
Clause 6, page 4, line 11, after ("intention") insert ("to issue that authorisation").
Clause 6, page 4, line 14, leave out ("or occupier").
LORD FORBES: My Lords, with your Lordships' permission, I should like to take Amendments Nos. 11 to 15 together. These Amendments relate to notification by the Commission in respect of entry on to land when following marauding deer. Formerly, the Commission were required to give occupiers of the land at least 24 hours' notice of entry. Amendment No. 11 substitutes a warning to any person 'likely in the Commission's opinion to be on the land. This allows the Commission to make a common-sense decision as to who should and who should not be warned. The remaining Amendments are drafting and purely consequential. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
LORD STRATHEDEN AND CAMPBELL: My Lords, this clause has been thoroughly discussed in this House and in another place. It has been amended and re-amended, and I should just like to state that I think its final form is an extremely satisfactory one.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 7, page 4, line 22, leave out from beginning to ("and") in line 34 and insert—
("7.—(1) Where the Commission are satisfied that red deer have caused damage to agriculture or forestry in any locality, and that for the prevention of further damage the red deer in the area in which the locality is situated should be reduced in number or exterminated, they shall determine, having due regard to the nature and character of the land in that area, what measures shall be taken for that reduction or extermination as the case may be
(2) Thereafter it shall be the duty of the Commission to consult with such owners or occupiers of land, being land where red deer are established, as the Commission consider to be substantially interested, to secure agreement on the carrying out of the measures which they have determined as aforesaid.
(3) Where after such consultations the Commission are satisfied that it is not possible to secure agreement as aforesaid or that the measures agreed on are not being carried out, they shall make a scheme (hereinafter in this Act referred to as a 'control scheme') for the carrying out of such measures,")
LORD FORBES: My Lords, in short, this Amendment substitutes the word "shall" for the word "may" in Clause 7, dealing with control schemes. The Commission now "shall" make a control scheme when the owner or occupier of land cannot, or will not, cooperate in reducing stocks of deer as requested by the Commission. To bring this into effect, and for other minor reasons, the whole clause has had to be redrafted. For instance, there was no qualification of the word "damage", and action could have been taken where the damage was only slight. This defect has now been rectified. I beg to move that this House cloth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
VISCOUNT ASTOR: My Lords, may I ask the noble Lord whether the previous requirement that a scheme should require confirmation by the Secretary of State for Scotland has been omitted from this clause and, if so, whether he can explain the reason?
LORD FORBES: My Lords, the scheme still requires to be confirmed by the Secretary of State for Scotland.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 9, page 5, line 38, at end insert ("and in the case of a second or subsequent conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeeding three months or to both such fine and imprisonment").
LORD FORBES: My Lords, Clause 9 at present provides for a penalty of £50 for failure to comply with the requirements of a control scheme. This Amendment adds the penalty of £100 and/or three months imprisonment for a second or subsequent conviction. Although in case of default the Commission will, under Clause 10, be able to carry out the work themselves and charge the owner or occupier, it is felt that if the defaulter fails year after year to carry out a requirement he will be imposing a heavy strain on the Commission's staff and equipment. The heavier penalties should deter defaulters from repeating their offences. Most of the credit for this Amendment. I believe, must go to the noble Lords, Lord Greenhill and Lord Mathers. I beg
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to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 11, page 6, line 5, leave out from ("from") to end of line 8 and insert ("the owner or occupier concerned by the Commission")
Clause 11, page 6, line 13, leave out ("or payable to")
Clause 11, page 6, line 17, leave out ("or payable to")
LORD FORBES: My Lords, with your Lordships' permission I will take Amendments Nos. 19, 20 and 21 together. Clause 11, as at present drafted, enables the Commission, in the event of an owner or occupier failing to comply with a control scheme, to recover the cost of carrying out the scheme by selling the venison, the excess money from the sale going to the owner or occupier. The effect of these Amendments is to leave the excess money in the hands of the Commission, thereby increasing the incentive for owners and occupiers to comply with the control scheme requirements and so benefit from the disposal of the carcases. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 12, page 6, leave out lines 34 and 35.
Clause 12, page 6, line 36, after ("provision") insert ("for the providing of equipment by the Commission").
After the words last inserted, insert—
("(2) Any agreement in pursuance of the last foregoing subsection shall, unless the Commission with the approval of the Secretary of State otherwise decide, provide").
LORD FORBES: My Lords, with your Lordships' permission I will take Amendments Nos. 22, 23 and 24 together. Clause 12, as originally drafted, provided that the Commission might recover expenses incurred in the provision of services and equipment. If they thought it unreasonable to do so, they need not make any charge, or they could make a reduced charge. Amendment No. 24 obliges the

355
Commission to recover the expenses but leaves scope for discretion in the case of hardship. The Commission, however, can use this discretion only with the approval of my right honourable friend the Secretary of State for Scotland. The remaining Amendments are purely drafting. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 15, page 7, line 27, leave out ("anauthorisation") and insert ("any of the functions of the Commission").
LORD FORBES: My Lords, at present if the Commission wish to enter on land to investigate damage done by marauding deer, they can do so immediately only with the occupier's consent. It may be assumed that the occupier will welcome investigation by the Commission. However, if this is not so, the Commission will have to give fourteen days' notice of intended entry. The effect of this Amendment is to permit investigational work in connection with marauding deer without fourteen days' notice of warning. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.(Lord Forbes)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 17, page 8, line 18, leave out ("twenty pounds") and insert ("fifty pounds, and in the case of a second or subsequent conviction to a fine not exceeding one hundred pounds or to imprisonment for a term not exceeding three months, or to both such fine and imprisonment").
LORD FORBES: My Lords, Clause 17 provided a penalty of £20 for wilful obstruction of persons acting in execution of Part I. The Amendment increases that penalty to £50, and adds a penalty of £100 and/or three months' imprisonment for a second or subsequent conviction. The argument for this Amendment is that obstruction of a person authorised to kill marauding deer or required under a control scheme to kill deer might result in further damage being caused to agricul
356
ture or forestry. This Amendment, again, was originally suggested by the noble Lords, Lord Mathers and Lord Greenhill. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 20, page 8, line 34, leave out from beginning to ("the") in line 35 and insert ("agriculture 'and 'agricultural land') have the like meanings as in").
LORD FORBES: My Lords, the effect of this Amendment is to provide that agriculture, for the purpose of this Bill, is defined in the same way as in Section 86 (3) of the Agriculture (Scotland) Act, 1948. This Amendment arises from a request that Clause 7 should contain a reference to horticulture so as to ensure that the Commission would be empowered to make a control scheme to prevent damage to horticulture. I beg to move that this House doth agree with the Commons in the same Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
Clause 21, Page 9, line 3, at beginning insert ("Subject to section thirty-three of this Act")
Clause 22, page 9, line 35, at beginning insert ("Subject to section thirty-three of this Act")
Clause 23, page 10, line 4, at beginning insert ("Subject to section thirty-three of this Act,")
Clause 23, page 10, line 7, at beginning insert ("Subject to section thirty-three of this Act,")
LORD FORBES: With your Lordships' permission I will take Amendments Nos. 28, 31, 33 and 34 together. These are all drafting Amendments, designed to draw attention to the fact that Clause 33 contains exemptions. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 21, page 9, line 26, leave out from ("imprisonment") to end of line 30.
LORD FORBES: The effect of this Amendment is to delete the penalty provision for the conviction on indictment of a person killing deer during the close season. The purpose of the close season is not to deter poaching, which is dealt with in Part III, but to facilitate the conservation of deer and to prevent cruelty by the owner or occupier—for instance, to prevent the shooting of a hind with a suckling calf. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 21, page 9, line 32, leave out ("sixty-one") and insert ("sixty-two")
2.50 p.m.
LORD FORBES: My Lords, the date for the introduction of close seasons was amended in your Lordships' House from October 21, 1962, to 1961, against the advice of the Government. Since then the Government's views have not changed. The Government's views are still that a speedy reduction in the numbers of red deer where they are causing damage to agriculture or forestry is essential. Persons complying with control schemes would, of course, be exempted from close seasons. However, the Commission will not be able to launch control schemes for all areas affected in the first few years. This is bound to take time.
Secondly, the initial reduction necessary in the interests of agriculture and forestry is a considerable one, and in the Government's view two years is too short a time to allow for this to be done. The question might be asked whether the Bill, in bringing in the close seasons, will in any way alter the prevention of poaching. I can assure your Lordships that there is no need whatsoever to fall back on close season provisions to prosecute poachers. Poaching provisions stand by themselves and come into force one month after the Bill becomes law. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
THE DUKE OF ATHOLL: My Lords, I wonder whether the Government have considered any means of inspecting the very sub-standard venison which will undoubtedly come on to the market as a result of this severe reduction of deer during the out-of-season periods; and I wonder whether they have decided on any means of checking that this venison is not sold as being fit for human consumption when really it is fit only for dog meat.
LORD FORBES: My Lords, that is an administrative matter and will certainly be taken into acount.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 22, page 10, leave out lines 1 to 3.
LORD FORBES: My Lords, this Amendment puts the onus of proof, in the case of legal right or permission to take or kill deer, on the prosecution, as is customary in Scottish law. The prosecution, therefore, will have to prove that the person did actually commit the offence. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 23, page 10, line 17, leave out from ("imprisonment") to end of line 21.
LORD FORBES: My Lords, Clause 23 relates to cases of conviction of a single person for offences of night shooting or killing deer otherwise than with a rifle or shotgun. By this Amendment the penalties for conviction on indictment only have been dropped; the remaining penalties stand. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
VISCOUNT ASTOR: My Lords, I think it is extraordinary, when we have had all these other Amendments increasing the penalties all the way along, that we should at the same time, for no explained reason, reduce the penalties on indictment for serious poaching. It seems to me an unsatisfactory Amendment.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I should like to support the noble Viscount in that observation. I think it is an extremely unsatisfactory Amendment.
LORD FORBES: My Lords, I think I should point out that this clause deals with the single person who commits an offence. If, however, two or more persons are engaged in the offence they will be liable to prosecution under Clause 24, under which the penalties are very much stiffer.
VISCOUNT ASTOR: My Lords, I can never understand why something done with someone else is any different from an act done alone.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 25, page 11, line 10, leave out ("is in insert possession of") and insert ("has used").
Clause 25, page 11, line 12, leave out from ("Act") to ("that") in line 13.
Clause 25, page 11, line 21, leave out ("is in possession of")and insert ("has used").
Clause 25, page 11, line 24, leave out from beginning to ("that").
LORD FORBES: My Lords, with your Lordships' permission, I will take together Amendments 36, 37, 38 and 39. As Clause 25 stands at present, people could be charged with unlawful possession of firearms or ammunition on suspicion that they had intended to commit offences. We thought that this might lead to unjustifiable interference with innocent persons carrying, say, shotguns for legitimate purposes. The Amendments limit the possibility of charges being brought under the clause to cases where a person has actually used the firearm or the ammunition to commit an offence. It will not be possible to charge a person merely on the suspicion that he has intended to commit an offence. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
VISCOUNT ASTOR: My Lords, again I think it is a most unsatisfactory Amendment. If a person is found strolling along in a deer forest armed, whether he has fired his shotgun or not, it is difficult to imagine that he has taken the firearm with him for personal protection against
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attacks from seagulls. He could have been there only for a very obvious nefarious purpose. I think that this is a serious weakening of the Act and a regrettable one.
LORD FORBES: My Lords, has the noble Viscount thought of the possibility of a trapper with a gun on the moor?
VISCOUNT ASTOR: My Lords, yes, indeed; but we expect that the courts in Scotland are presided over by reasonable people who, if there is a reasonable defence, are not going to convict.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 33, page 14, line 4, leave out ("of subsection (2)").
LORD FORBES: My Lords, this is purely a drafting Amendment. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 33, page 14, line 6, leave out subsection (3) and insert—
("(3) Notwithstanding the provisions of section twenty-one of this Act, or of any order made thereunder, it shall not be an offence for an occupier of agricultural land or of enclosed woodlands, or for any person authorised by him in writing in that behalf, to take or kill during a close season any deer found on any arable land, garden grounds or land laid down in permanent grass (other than moorland and unenclosed land) forming part of that land, or on such woodlands, as the case may be.
(4) Notwithstanding the provisions of subsection (1) of section twenty-three of this Act, it shall not be an offence for an occupier of agricultural land or of enclosed woodlands to take or kill during the period specified in that subsection any deer found on any such arable land, garden grounds or land laid down in permanent grass as aforesaid, or on such woodlands, as the case may be.
(5) The provisions of the last two foregoing subsections shall be construed as one with the Agriculture (Scotland) Act, 1948.")
Third Schedule, page 19, line 39, column 3, at end insert ("in section forty-three, subsection (2)").
LORD FORBES: My Lords, with your Lordships' permission I will take Amendments 41 and 45 together. The effect of these Amendments is, first of all, to exempt from the close season penal provisions the occupier of agricultural land

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or enclosed woodland, or any person authorised by him, killing deer on his enclosed or arable land or woodland; and secondly, to exempt from the night-shooting penal provisions the occupier of agricultural land or enclosed woodlands killing deer on his enclosed, arable or wooded land. There is therefore no question, in the second case, of the occupier authorising other people to do the work for him. If there were, it might lead to collusion between poachers and unscrupulous occupiers. The third point is that Section 43 (2) of the Agriculture (Scotland) Act, 1948, is repealed. This restricted the tenant's statutory right to kill deer to the hours of daylight. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
VISCOUNT MASSEREENE AND FERRARD: My Lords, I think the fact that people are going to be able to shoot deer with rifles by night is extremely dangerous, apart from being extremely cruel. There are bound to be a great number of wounded deer. I cannot understand how this Amendment came to be proposed. I think it is extremely unsatisfactory.
THE DUKE OF ATHOLL: My Lords, I cannot understand why, when people have not been allowed to shoot deer on enclosed land by night since 1948, it is now necessary in 1959, in a Bill designed to introduce a close season and to stop cruelty to deer, to bring in this rather remarkable provision. While the rest of the Commons Amendments are fairly satisfactory I feel that this one seems to be going back on the whole object of the Bill.
LORD FORBES: My Lords, this merely enables the owner-occupier or the tenant-occupier to protect his own crops —that is, crops that are on enclosed land.
VISCOUNT ASTOR: Is there no reference to the Commission in this matter? Can the occupier do this as much as he wants? Is there no possible appeal against abuse in this connection? Surely it is a very wide and extensive power to give, without requiring that permission be obtained, and without there being any form of supervision over these owners.
LORD FORBES: My Lords, the Commission do not come into the matter of a farmer's, an occupier's, right to protect his own crops.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I have known of instances where tenants have made holes in the fences so that the deer can come on to their crops in order that they can shoot them by night. It is extremely unsatisfactory.
On Question, Motion agreed to.

COMMONS AMENDMENT
Clause 37, page 14, line 31, after ("Act") insert ("except in so far as it relates to the amendment of the House of Commons Disqualification Act, 1957").
First Schedule, page 15, line 14, leave out paragraph 3 and insert—
("3. Part II of the First Schedule to the House of Commons Disqualification Act, 1957 (which specifies certain commissions, tribunals and other bodies, all members of which are disqualified under that Act), shall have effect, in its application to the House of Commons of the Parliament of the United Kingdom, as if after the entry relating to the Pig Industry Development Authority there were inserted the following entry:—
'The Red Deer Commission'.")
LORD FORBES: My Lords, with your Lordships' permission I will take Amendments Nos. 42 and 43 together. The effect of the first Amendment is to extend to the United Kingdom the application of paragraph 3 of the First Schedule. Without the Amendment, a member of the Commission could become a Member of Parliament for an English constituency or for a constituency in Northern Ireland, though not for a Scottish constituency. The Second Amendment is purely a drafting Amendment. I beg to move that this House doth agree with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Forbes.)
VISCOUNT ASTOR: My Lords, why does a member of the Commission who happens to become a 'Member of Parliament for an English constituency, or for a constituency in Northern Ireland, immediately become a bad member of the Commission, a position in which he may be doing a good job?
LORD FORBES: No member of a Commission of this type can be a Member of Parliament. It does not apply

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nerely to this Bill: it applies to any other Act.
On Question, Motion agreed to.

COMMONS AMENDMENT
First Schedule page 15, line 44, at end insert—
("11. The Secretary of State may provide the services of such officers and servants as the Commission may require.")
LORD FORBES: My Lords, the effect of this Amendment is that the staff of the Commission will be civil servants. Had this not been so, the Bill would have had to include extremely elaborate superannuation provisions. As this is the final Amendment, perhaps your Lordships will allow me to extend this discussion for one minute further. This Bill has had a rough passage. There is no doubt that it has been improved since I introduced it into your Lordships' House. I personally am very thankful that the provisions of this Bill will become effective without delay, as the noblest animals in the hills of Scotland have suffered for too long from ignoble treatment. Now, at last, both deer and farmers will have the protection they deserve, and the sportsman will not be denied his sport. I am grateful to noble Lords on all sides of the House for bringing this Scottish Bill to the Statute Book. I beg to move that this House doth agree with the Commons in the said Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Forbes.)
LORD GREENHILL: My Lords, if I have refrained from taking part in the discussion on any of the Amendments that have been moved this afternoon it is not because I have complete agreement with the improvements that were introduced in another place but because I think that the Bill, as a whole, is a very great advance on what has obtained hitherto. I think that at last we are in a position which we have tried our best to achieve; that is, to reconcile the needs of the deer-forest owner with those of the sheep farmer. This has not been an easy process. so far as I can understand. It has been the outcome of long and careful negotiation; and I think the Government are to be congratulated on bringing forward this piece of legislation, which I
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hope will now inure to the benefit of our country as a whole.
THE DUKE OF SUTHERLAND: My Lords, for many years I have been pressing this question of the deer in Scotland, and I am grateful and thankful that at last the matter is to be settled.
VISCOUNT ELIBANK: My Lords, from these Benches, as one who took a little part in the earlier proceedings, I should like to add my tribute to that which has been paid by the noble Lord on my left. I think this is now a much better Bill than when it first was introduced, and I should like to add my tribute to that paid by my noble friend to the noble Lord, Lord Forbes, upon the very congenial and able way he has conducted this Bill during, its course through the House.
On Question, Motion agreed to.

CHARITABLE TRUSTS
3.7 p.m.
LORD NATHANrose to draw attention to the White Paper on Government Policy on Charitable Trusts in England and Wales (Cmd. 9538) arising out of the Report of the Committee on the Law and Practice of Charitable Trusts (Cmd. 8710); and to move for Papers. The noble Lord said: My Lords, it is almost to the month exactly ten years since the noble Viscount, Lord Samuel. whom we all rejoice to see here in his place to take part in this discussion, opened a long debate calling attention to
"the need for the encouragement of voluntary action to promote social progress."
That arose out of a book then recently published by the noble Lord, Lord Beveridge, Who would certainly have been here to participate in this debate had it not been for the heavy bereavement he has sustained and in which all your Lordships will sympathise with him.
The outcome of the debate which the noble Viscount opened was a statement by my noble friend Lord Pakenham on behalf of the Government of the day, undertaking to set up a Committee to look into charitable trust law reform. It was stressed in all parts of the House, which was of one mind on this wholly non-political issue, that the problem in its various aspects was one of pressing

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urgency. That was ten years ago. The Committee was appointed by my noble friend Lord Attlee—then Mr. Attlee, Prime Minister—and I was appointed Chairman of that Committee. We set to work in January, 1950. Over a hundred years previously a Committee of Inquiry into the law of charities had been set up under the chairmanship of Lord Brougham. That Committee took a period of seventeen years to conclude its labours, which were ultimately found, in essence, to be incorporated in the great Charitable Trusts Act of 1853.
The Committee of which I was Chairman started upon its task in January, 1950, and in the summer of 1952 reported to Sir Winston Churchill, who had then become Prime Minister. It was in the summer of 1953, six years ago, that the Report was debated. On that occasion, the Motion was also moved by my noble friend Lord Samuel. The debate was long and covered a wide field—indeed, it occupied no fewer than 100 columns of the OFFICIAL REPORT. It was two years after that debate of 1953 before there was any movement on the part of the Government, and the movement, when it came, was the publication of the White Paper referred to in the notice of Motion. Two years after a debate, which was itself more than a year after the presentation of the Report, can hardly be called rapid progress. And the rest, since 1955, has been silence.
In the 1949 debate on Lord Samuel's Motion I spoke in the light of my own experience of a good many years of voluntary service: in the 1953 debate, I spoke as Chairman of the Committee whose Report was under consideration: to-day, I speak with further practical experience as Chairman of the Isaac Wolfson Foundation, established four years ago, the latest recruit to the small but notable band of our great national charitable trusts.
In bringing this subject forward today, I have two main objectives. In the first place, the White Paper presented in 1955 has not yet been debated, and certainly should be. Of course, it is right that the public must be allowed time in which to form its views, in order that the Government may know how public opinion stands; but, even allowing for all that, and the importance of this subject to vast masses of Her Majesty's subjects.
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close on four years must surely be accounted enough in which to gauge public opinion. This debate, I hope, will bring public opinion to a focus. In the second place, since the publication of the White Paper there has been no evident progress at all. During the past four years not only has there been silence; there also, to all outward observance, has been complete inactivity. I hope that the discussion to-day may lead to some indication from the Government of what they actually intend to do and how soon they intend to do it.
In the light of our past discussions, I scarcely think it necessary to stress the importance of charitable trust law reform. For a hundred years it has excited the minds of many of those qualified by their own activity in the field of voluntary service and charity, and since the passing of the Act of 1853 there has been a constant movement pressing for reform. Why is it important that this matter should not be allowed to remain much longer as it is now? I will give your Lordships what seem to me to be some, at least, of the fundamental and pressing reasons. In the first place, I think that I shall carry your Lordships with me when I suggest, as a general proposition, that voluntary action in itself is valuable in the community and should be encouraged. It was my noble friend Lord Pakenham who, in the debate ten years ago, speaking then for the Government of the day, said that:
"Without voluntary service the State would lose its soul."
I adopt that phrase. Voluntary service is a vital strand in the social fabric. Your Lordships may have seen yesterday that The Times had a valuable turnover article very revelant to these contentions and very apt in point of time.
Another reason why matters cannot be left as they are and why reform is pressing is that charitable trusts are an important form of public service, and voluntary bodies should be able to play their part to the full. No unnecessary obstacles should be placed in their way. I think that your Lordships will feel that all the more when I recall that the number of charitable trusts, so far as known, is no less than 110,000—possibly a great many more. Their funds, irrespective of land, are estimated to be of a value of upwards of £200 million, and their

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investments in land are enormous, though the exact extent is not precisely known. That shows how, from every point of view—from the point of view of the values involved in terms of property, the number of people involved in terms of service, and the vast, incalculable number of beneficiaries—this is a matter of prime public importance.
Another reason why the moment for action has come, and more than come, is that the law of charitable trusts has been the object of criticism, as I have said, for more than a century, and particularly as regards that peculiar, perhaps somewhat obscure, central doctrine of charitable law which is recognised as the cy-près doctrine. The law as it stands constitutes a major barrier to the effective working of trusts in more than one respect. It is not only that since the Act of 1853 the efforts have not yet culminated in reform. The last decade, the last twenty years, have seen more than one heavy attack on charitable objects by the Commissioners of Inland Revenue, whose activity, however disinterested their motives, cannot have anything but an enervating and unnerving effect upon the charitable movement as a whole. That is why elaborate rescue operations have been resorted to by Parliament in order to repair the damage thus done. Parliament had to see that they put right what had been done against the will of Parliament, as shown by their own subsequent actions.
First, there was the necessary pronouncement, as a result of my Committee's Report, by the noble and learned Viscount the predecessor of the noble and learned Viscount who sits on the Woolsack to-day. That pronouncement was followed by the passing, as an emergency measure, of the Charitable Trusts Validation Act, 1954, in order to save for charity trusts which otherwise the Revenue were likely to seek to have declared invalid. That Act proceeded directly from recommendations made by the Charitable Trusts Committee and arose out of two cases which will be familiar to some of your Lordships, at least—namely, the Oxford Group case and the Ellis case. Then there was the more recent legislation necessitated by the devastations caused by the decision in the Baddeley case. All the more reason, therefore, for forging ahead with charitable trust reform and thus putting new heart into the voluntary
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movement for which we have worked so hard and suffered, in this way, so much for so long.
What about the White Paper? The Government had the advantage over the Committee of being able to judge the Committee's recommendations in the light of public reaction to them. Of course, this Government, like any other, would wish to carry the public with them, especially in a matter like the law of charitable trusts, so closely bound up with principles that should govern testamentary dispositions, questions of social responsibility and the whole range of activity which falls within the definition of voluntary service. Therefore I will say at once, and frankly, that, having read and studied the White Paper, I feel a great measure of gratification to find that on so many issues the Government's White Paper is at one with my Committee's Report.
I am not going to trouble your Lordships by reciting all the points of agreement and disagreement. Let me, however, examine three or four of the more important issues, partly of agreement and partly of disagreement. I shall say nothing save on what I regard as the issues most essential to maintaining the health of charitable trusts, to some of which The Times drew attention to-day in what I regard as an interesting, helpful and, I hope, prophetic leading article. There are four, and possibly five, subjects that I will quite shortly put to your Lordships. The first is that the public should be allowed to know and have the opportunity of learning what charitable trusts exist. When I speak of "the public", I mean not only potential beneficiaries but also public authorities, which must increasingly nowadays work in partnership with the voluntary bodies. I think it is worth observing—and it is sometimes overlooked—that all charitable trusts are, both in fact and in law, not private trusts but public trusts, and should, therefore, be recorded for the information of the public for whose benefit they were designed.
Then, again, the objects of trusts must keep in step with public needs. And needs change. As even the youngest among us have seen, needs have changed rapidly during the past few years. Domestic servants, for instance, for whose benefit many charities were founded over

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a long period of years, are, alas! a disappearing class; but delinquent or emotionally disturbed children have appeared as a new class of possible beneficiaries. These children were not treated in the old days as possible beneficiaries of charitable trusts but were treated in quite a different way. However, we have learned better now. Beneficiaries change; areas change; and great public services rise to carry out the work previously shouldered by the voluntary movement. It is the business of charitable trusts to pioneer, not to stagnate in backwaters of social change, and the law must put nothing in their way.
Then, while, as a general rule, trustees must clearly be allowed to manage their own affairs, there must, I think, be some central authority ready to step in to induce laggard trustees to undertake, where necessary, reform of their trust if it is called for in the public interest. Further, there is a highly controversial question, and perhaps the only really controversial question upon which the noble and learned Viscount on the Woolsack and I may not think alike; we shall see. I believe that the present arrangements for the proper husbanding of the property of trusts are not satisfactory. There ought to be safeguards of their income and general resources, which during these past years have decreased so vastly in value. Trusts ought to be capable of protecting themselves in periods of sustained inflation from the effects of a fall in the value of the pound; they ought to have the same possibilities as are open to the trustees, as prudent men, looking after their own affairs.
How do the Government propose to deal with these three or four key issues to which I have referred? As to the need for the recording of trusts, which was strongly pressed by my Committee, the Government agree; and I regard that as a big step forward. The Committee, it is true, pressed for a central record to be kept by the Ministry of Education for educational trusts and by the Charity Commissioners for the rest. This is accepted. But the Government do not accept the further recommendation that there should be local recordings also. I said in the debate in 1955, and I repeat it now, that though I should have preferred there to be local recording also, it is not a matter I should wish to press unduly. The fact that it is now accepted
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that trusts should be recorded, even though only centrally, is a great step forward. As these invaluable records are built up, I have not the least doubt that enterprising local authorities will see to it that they get, somehow or other, the information they need and would have had under the law had our recommendation in that respect been accepted.
I now come to the central point of difficulty—it is an old point—about the relaxing of the cy-près doctrine. Here, again, the Government have accepted the Committee's solution, and I must confess to a feeling of considerable satisfaction that the Government and the Committee have reached a fairly identical conclusion, for thus may be solved one of the thorniest and most difficult problems of the whole great tangle of charitable trust law. Broadly, under the existing doctrine, a trust's objects may be altered only when impossible of fulfilment, and then only to objects as near as possible to the original. Under the powers proposed by the Committee, and broadly accepted by the Government, it would be possible, with the consent of trustees within the first thirty-five years, and without their consent if unobtainable after thirty-five years, to change the objects in conditions falling a good deal short of their having become impracticable or impossible. These conditions would include, as the White Paper puts it, changing circumstances (including changes in the scope of public or local services); and the purposes of a charity having become obsolete.
Again, the principles put forward by the Committee to govern the changing of trust objects are also accepted by the Government. They are derived largely from the existing Scottish law, and I would make my tribute here to Lord Macmillan, who gave evidence before my Committee, and who drew my Committee's attention to these particular provisions of Scottish law which we adopted. The principles which have to be borne in mind are: the public interest; existing conditions; the spirit of the intention of the founders; the interest of the locality to which the endowment belongs; the possibility of effecting economy in administration by grouping, amalgamating or combining trusts or by dividing them. I believe this to be an entirely workable and acceptable plan for a reformed cy-près doctrine, and I am glad

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to know that Her Majesty's Government are of the same mind. I would ask your Lordships to notice in particular, as one of the conditions of change, regard for "the spirit of the intention of the founders". It is that to which the scheme-making authority must have special regard as a central factor in reaching their determinations. I believe that this reform, even though taken by itself, holds out great promise of new life for scores, hundreds and perhaps thousands of charitable trusts.
But progress is clearly closely linked with the nature or constitution of the authorities which will exercise these new powers. For various reasons, with which I will not trouble your Lordships, there is not likely to be much difficulty with the Ministry of Education in the administration by them of their powers. But what about the Charity Commissioners? Here the Government do not see eye to eye with the Committee—far from it. The Committee wanted the Charity Commissioners reconstituted as a part-time body of men and women of standing in public and charitable affairs—a body of the same kind as the Governors of the British Broadcasting Corporation backed by an advisory body and served by a permanent staff like, for instance, that of the Director-General of the B.B.C. In effect, the Government want to maintain the present Charity Commission almost unchanged. They add to the two legal Commissioners a non-legal Commissioner, but, on the other hand, they take away the Parliamentary Commissioner.
I must confess to disappointment about this matter. I believe that the newly-constituted Commission will be less likely to take full advantage of new powers than the body suggested by the Committee, and I feel fairly confident that it will also carry with it far less of the confidence of the public than the Commission which we proposed. I trust that if, contrary to my belief as to what is likely to happen, the Government decline to resile from their present position and adopt the Committee's suggestion, they will at least make provision for an advisory committee. There might be a good deal of public advantage in that.
I am glad that the White Paper shows that the Government have accepted the recommendation that a Minister—it turns out to be the Home Secretary, and that
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is an admirable selection—should be appointed to represent the Commission in Parliament and in the Government. Hitherto it has had no spokesman, either in the Government or in Parliament. The Minister's powers will, rightly and properly, be much hedged about, but he is there as a safeguard against a tendency to stagnation on the part of the Charity Commissioners or trustees.
I come lastly—and I am always frightened of those who say that, because so often it is misleading—to the question of the maintenance of trust income. Here I must frankly say to Her Majesty's Government that I feel a good deal of alarm and despondency at their refusal to accept a widening of the range of trustee investments recommended by the Committee. The evidence for revision and extension, as given to my Committee on behalf of the London Stock Exchange and the Institute of Chartered Accountants, was overwhelming. That change has had persistent support in the Press, and the courts have also shown a general inclination to broaden the range of charitable investments. It is mostly with regard to the older charitable trusts that this difficulty has arisen; in the more recent trusts the range is, from the outset, fairly wide. For over forty years no trusts with which I have ever been concerned have had any but the widest provision for investment, and I believe that to be the general practice.
But these old trusts ought to be protected, and also those modern trusts where settlors have been so misguided as to insist upon the restriction of trustee investments. It is sad to think that where trusts are tied to the narrow range of fixed-interest-bearing stock, authorised under the Trustee Act, 1925, in times of inflation, such as those through which we have been living, the effect has become not merely serious but disastrous. We all know the fall in the value of the pound, and the resources of charitable trusts, both as regards their investment and their income, will be a third of what they were in the years immediately preceding the war. It would not have been so had they taken advantage of the large range of investments that the courts are now permitting, on application being made, in cases where they consider it to be just and proper.
The Government's alternative is to keep the present pitiful range of trustee

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investments broadly speaking as it is, but to give power to the Charity Commissioners to widen the range of suitable trusts. Now to the Charity Commissioners "suitable", in practice, means suitably large. The weakness of the Government's proposal is that most trusts are too small to be acceptable in this context to the Commission. So that the country has before it the astonishing spectacle of the Government immunising against polio, on the one hand, and, on the other, injecting the rank and file of charitable trusts with a wasting disease known to be fatal to them. I hope the Government will think again, particularly, perhaps, as the rise of unit trusts offers, it seems to me, a new field of investment very suitable for the funds of small charities.
Now I come to a matter which, in the presence of the noble Viscount, I would not ignore; it is one to which I know he has attached great importance, and so, in a personal way, have I, and that is the establishment of common-good trusts. I must confess I am disappointed that the Government have been so lukewarm; I could wish that they would have taken some positive action. Surely charity has a better moral claim to bona vacantia than the Chancellor of the Exchequer, who, in my belief, has no moral claim to it at all.
I have confined myself to what seemed to me the really outstanding issues on this broad matter, which has been before your Lordships now for a period of just ten years. I hope to hear that the Government intend without more delay to bring in at least the long-awaited reforms they have accepted, the reforms they accepted four years ago. I do not think I can do better than end by expressing the hope that, when legislation is introduced, it will not take the form of a series of Bills to deal with reforms subject by subject—as for instance, the repeal of mortmain—but will take a broad, comprehensive view. I hope that, in the closing words of my Committee's Report,
"… the present law, with the changes we propose, should be simplified and re-enacted as a single, short, intelligible Statute."
I hope we shall hear to-day that this is in fact the Government's intention, for if it is we can look forward to the opening, not in the very distant future but almost at once, of a new era for charitable trusts and a new era for the whole move-
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ment for voluntary services upon which so much of the welfare and wellbeing of our people depend.
3.43 p.m.
VISCOUNT SAMUEL: My Lords, my noble friend Lord Nathan has covered a very wide field in a very comprehensive fashion. There is nothing in what he has said from which, on first hearing, I should be inclined to dissent, and there is no excuse, therefore, for me to repeat a second time anything that lie has said. Consequently I am able to confine my speech to-day to a brief space and to occupy your Lordships' attention for a very short time.
I propose to deal in fact with only a single point. It is the one which was my chief interest when I first brought this matter to the attention of your Lord-ships' House ten years ago, and it is my chief interest still. It is the proposal to establish what were called common-good funds. I was impressed by the fact that in Scotland there are many ancient funds in many of the Scottish towns, some of them dating back for centuries, which have a total capital value (so I was informed by the Scottish Office), of about £4 million and a revenue of some £400,000, and many of which have rendered and are rendering great services in the cause of charity. Some, it is true, are devoted to convivial purposes, and perhaps that may be often quite a legitimate thing to do. In the United States also these institutions are a common feature of the social life of the country.
I was in search of some possible source of revenue for such funds, to start them off. I was impressed by the fact that there are various dormant balances in banks or in the Chancery Division of the High Court, and there are intestate estates, and it might be possible to bring these sums, or some of them, in to give a beginning to the establishment of these new funds. I did not know then, and I do not think that anyone was fully aware —the fact was disclosed only a few weeks ago when the centenary was celebrated of the building of what were, 100 years ago, the new Law Courts in the Strand—that the money for those buildings, amounting to about £1 million, was taken from derelict funds in the hands of the Chancery Division of the High Court. I do not know—perhaps the noble

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Viscount on the Woolsack will be able to tell us—by what authority that was done. Presumably it must have been a clause in the Finance Bill or some legislative measure of the kind, but it would be interesting to know how it was that that came about.
When the debate took place in your Lordships' House ten years ago I was astounded that it had a very loud echo from the country. The Press gave it great prominence; I had, I think, more newspaper cuttings about that debate than about any other speech that I had made in the House until that time. The public interest was concentrated on this particular point: that it seemed that there was money to be had for nothing; that instead of putting everything on to the taxpayer or raising special subscriptions there were some scores of millions of pounds to be had, somewhat like a pirate's treasure hoard, and that I had the chart for the discovery of the Treasure Island and for revealing where all this glittering wealth was situated, as it was only waiting to be fetched. As my noble friend has said, ten years have passed since then. I do not myself think it is a very excessive time. My experience is that the majestic deliberation of our legislative procedures for any measure which is almost generally agreed to be obviously right and proper to be carried into legislative effect takes, as a rule, twenty or sometimes thirty years; so if this now bears fruition in the present Parliament we should be exceedingly pleased that such prompt progress has been made.
This period has been put to good purpose in this instance, as it has been in a great number of other instances, by the opportunity having been given for a most careful and laborious inquiry. It is often thought that a Government refers a matter to a Royal Commission or a departmental committee usually merely as a convenient way of shelving some difficult and possibly controversial question. Certainly that may be the case occasionally. But almost all the great reforms, political and social, in this country during the nineteenth century and the present century have been preceded by inquiries—by Royal Commissions as a rule, many of whose Reports have gained historic importance. In this
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particular case the noble Lord, Lord Nathan, and his colleagues are entitled to our gratitude, as indeed have been all those who have laboured at these various inquiries on political matters.
Lord Nathan's Committee sat for two years; they presented a Report covering 250 pages—thorough, painstaking; one might even call it monumental. I moved another Resolution in the House after the publication of that Report in July, 1953, when the Lord Chancellor was the noble and learned Viscount, Lord Simonds, who took a great interest in the question and who was able to announce to the House that the Government thought that there was a case for consideration with a view to legislation; and under the present Lord Chancellor the White Paper was published in July, 1955, which made a number of practical and positive recommendations.
The noble and learned Viscount on the Woolsack is a Minister who possesses one of the most valuable qualities that a Minister can have: he is expert in the art of getting things done, and his period of office has been exceedingly fruitful in the legislative harvest. For my own part, I am becoming expert in exactly an opposite quality. With years that are not merely advancing but formidably advanced, I am practising with growing skill the art of shifting work on to other people; and this matter, in particular, I have been happy to transfer to my noble friend Lord Nathan, who has the additional advantage of being a solicitor of long and wide experience, while I have not been trained in either of the legal professions.
With regard to this question of dormant funds, the Committee were informed by the Government that that was not for them, and implied that if that subject were to be discussed it should be done by a Committee somewhat differently constituted. I cannot quarrel with that. I think there is great force in what was said. The consequence is, however, that we have not before us any proposals with regard to dormant funds as such. But the Committee did recommend most strongly that common-good funds should be 'established. The Report strongly favoured that proposal, and the White Paper also favours it in principle, though with important qualifications. I do not quarrel with those qualifications. I am

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anxious that a Bill Should be prepared and presented which should not be controversial and should pass with little difficulty through both Houses of Parliament in a short time. It would be a great pity if there were any overt disagreement on any particular points among the advocates of that measure at the outset. Therefore I do not quarrel with any of the passages in the White Paper.
The first is a very minor point—merely verbal. The Government do not like the term "common-good funds," and, for reasons which they give, they prefer the expression "common-good trusts". I see no reason to dissent from that. But much more important is the fact that they do not favour the idea of national common-good funds or trusts, such as were recommended for England, Scotland and Wales. The reason that they give is —I imagine that it was the probable reason—that some of the great national organisations, charitable or cultural, are against the proposal, because they fear that subscriptions and bequests might be diverted from channels through which they usually now flow to favour more generalised funds. The Church of England in particular, through the mouth of the most reverend Primate the Archbishop of Canterbury, urged that it would be a mistake Ito set up funds such as this which might take away bequests from ecclesiastical purposes. The National Council of Social Service took the same view.
It is the case that persons who are testators and who have no family or other cogent claims on their money of estates have a wide choice of objects, of which everyone is aware, to which they can devote their funds—not only ecclesiastical, not only the Council of Social Service, but such bodies as the Royal Society for Prevention of Cruelty to Children, the Royal Society for Prevention of Cruelty to Animals, the National Trust which provides for the preservation of places of natural beauty or historic interest, or the National Art Collection Fund, and so forth. Therefore, I do not think we need attach too much importance to this question of the national funds. Perhaps these various organisations are unduly alarmed at the prospect held out. That may be so, and I am rather inclined to think that it is so. if so, after a few years' working, it may be that national funds might be established.
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But since the Government are definitely against it, and since there is this large body of opposition from responsible quarters, I think it would he a mistake for us to make a sine qua non of this particular proposal. I believe that the case of the Law Courts and the Chancery funds may be taken as a precedent, and that if some occasion arises in the future of some object which commands widespread national support but which it is thought could not properly be paid for out of taxes or rates, special measures might be taken for an expedition to be sent to my "Treasure Island" to find the ownerless wealth there, and devoted by general consent to that particular object.
For the rest, the Government in the White Paper, in paragraph 69 on the last page, express agreement that more common-good trusts should be established, but that they should be local and spontaneous in origin, unofficial and not subsidised or set up by the Government. For my own part, I should be most grateful if that were done. It would certainly require legislation, and I hope that we may assume that the legislation will come at an early date, preferably in the present Parliament, because there is always a risk—slight though that risk now appears to be—that after a General Election some other Lord Chancellor, perhaps not quite so fully informed and sympathetic, might be installed upon the Woolsack.
If this is done, and if these funds are set going from private contributions or bequests, then it may be that a century hence the common-good trusts may be the normal part of the social equipment of all progressive towns. They will originate or help to maintain perhaps thousands of institutions, philanthropic or cultural, enlisting on behalf of charity or the promotion of the arts the very valuable quality of local civic patriotism. If that is so, then your Lordships may feel pleased to think that our successors may be glad that the initiative for this had been taken by this generation of the House of Lords.
4.1 p.m.
LORD DENNING: My Lords, I should like to support my noble friend's plea for action, because even since the White Paper was published in 1955 cases have arisen which show the urgency of the need for action on what my noble friend

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called the essential point of the doctrine of cy-près. I cannot say that I have much confidence in my knowledge of charity law, let alone that of cy-près, but I can perhaps give your Lordships an illustration of how it works.
In the year 1956, when a case came before the courts, it appeared that the people of Ulverston had for years subscribed together at fetes, bazaars and street collections for a new hospital for their area. Between 1930 and 1947 they had collected some £32,000 for this hospital. Then, with the coming into force of the National Health Act, there was no longer a need for this hospital, for it was to be provided by Government funds. What was to happen to the £32,000 which had been collected? The matter came before the courts. Your Lordships might think that it was a good case for that £32,000 to be applied to what might be called cy-près—as nearly as possible to the original objects: homes for the elderly, disabled or infirm, whatever it might be. But lo and behold! the courts said that that could not be done. The £32,000 had been given for a hospital, and there was no general charitable intention otherwise. The money could not go to the Crown; it had to be returned to the people—if they could be found—who had put pennies in the collection boxes or spent sixpence in raffles at bazaars and so forth. If those people could not be found the money had to go, as I presume most of it has gone, to the unclaimed balances in the funds of the court. Surely there is an urgent case for the relaxation of this doctrine, so that when funds have become inapplicable for a particular trust purpose they can be applied to some good purpose as near as possible to it. That is the first point that I would stress—as my noble friend has stressed—the need for relaxation of that doctrine.
Then there is the next point. In 1954 the Charitable Trusts Act was passed especially to help imperfect documents, documents which had not been well drawn up—usually by lawyers. Charitable trusts were there mixed with non-charitable trusts, and the whole attempt failed. Let me give your Lordships an example which that Act did not cure: your Lordships will remember the case where a bus ran into a party of Royal
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Marine cadets in the streets of Gillingham, in Kent, killing 24 and injuring others. The mayors of the three local towns put out an appeal far money for a memorial for the cadets, for care for the disabled, and then, it was said, for other worthy causes to be selected by the three mayors.
A fund of £9,000 was collected in street collections—a penny here and a penny there, and so forth; but only £2,000 was used for the cadets' funerals, because the bus company had admitted their liability to pay compensation. As a result, a sum of £7,000 remained outstanding. Your Lordships might think that in accordance with the mayors' declaration they could have chosen some other worthy causes for which the money should be used. But no! The courts said that the new Act did not validate that, and that the £7,000 could not go to any worthy causes selected by the mayors, although the money had been subscribed for them. The £7,000 was not to go to the Crown, as bona vacantia. It was to be returned to the individuals who had subscribed pennies, twopences and sixpences—if they could be found. If they could not be found, as presumably they were not, that £7,000, too, must go to the unclaimed balances in some fund somewhere which no one can touch.
In Australia and New Zealand they have wider legislation than ours to cure imperfect trusts. Only recently a case came before the Privy Council which will illustrate the wide power of the Acts in Australia and New Zealand. A lady had left her property to be applied to "such Order of nuns as my trustee shall select. "Your Lordships might think that that was a good charitable gift. But no! Some Orders of nuns are charitable—when they do good works; others are not charitable, when they do not do good works but pray far the welfare of others. In England there might be great difficulty in upholding that gift, because it is partly charitable and partly non-charitable; but the Australian and New Zealand legislation made that perfectly good, in so far as it could apply to what was really charitable, for the nuns who did good works, omitting those nuns who simply prayed for others. Our charitable trust legislation is confined to deeds before 1952, and is not so comprehensive as the Australian and New Zealand legislation. The Act

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to which I have referred was passed in 1954. I would plead for an extension of it now, so as to validate more of these imperfect trust instruments, some of which are not framed by lawyers but by laymen.
One last word about our own small parochial charities, which go back for centuries, whether for blankets, or coal. or a small pension—how they need to be reorganized! But they should not be taken away from the individual parish but kept for the area of benefit. There is a great deal of local community interest in these charities and they should not be administered indirectly through some central Commissioners but through the local people themselves. We all know of these small funds. They still do good work, with a few shillings being taken, here and there, to old pensioners. Let those be kept with the local community. Those are the three points that I wish to make, but there are many others in this field of charity to be dealt with, if Her Majesty's Government are to take up and improve the law on this matter.
4.9 p.m.
THE LORD BISHOP OF CHELMSFORD: My Lords, I regret that my first speech in this House should be concerned with certain technical points rather than with more weighty moral and spiritual issues, but at least I can assure your Lordships that, as a result, my speech will be marked by a brevity appropriate to one bold enough to touch on certain matters of law on which I can speak only with the limited knowledge of a layman. I venture to say a few words on behalf of the Churches Main Committee, of which I am chairman. This Committee, as your Lordships may be aware, represents all the leading religious denominations in this country, and is therefore in the unique position of being able to act as a mouthpiece for all the Churches of the country on any Government national questions which concern the welfare of the Churches, particularly on the material side. In general, the Committee have welcomed the Nathan Report and the Government's White Paper; and I would express our gratitude to the noble Lord, Lord Nathan, for his initiative and leadership.
The law of charitable trusts and the administrative machinery to deal with it have grown up over a very long period
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of years, and the present system could be improved in a great many ways. I shall content myself with referring, very briefly, to four particular points, and shall then turn, I hope with equal brevity, to a wider issue. The first point is that the proposed repeal of the cy-près Acts will greatly facilitate transactions in land for Churches and will therefore be greatly welcomed by the Churches of this country. Secondly, the procedure in amending trust cy-près, as the noble Lords, Lord Nathan and Lord Denning, have recently pointed out, needs to be widened and amended so as to meet changing circumstances. My third point is that it is greatly to be hoped that some relaxation will be made in the range of trustee investments permitted by the Act of 1925. Many church bodies are suffering under the handicap of this Act and are put to considerable inconvenience and expense in seeking to obtain relief from the Courts or Parliament. My fourth point is that control of dealings in land in some directions can be speeded up and simplified. This is a technical point on which I do not propose to enlarge.
Having touched briefly on these four particular points, I would turn to a more general point that has a wider significance. Churches are among the oldest forms of charity in this country, but in some respects they are different from all other charities. Many of the large denominations have a complete and organised system of control and check. We realise that the State has a duty to act as custodian of perpetual trusts and to ensure that the original intentions of the trusts are observed. But we do not think that the State would be justified in claiming to interfere in the collection, distribution and administration of church funds under trust, held in trust, for general maintenance. There is a danger that in the course of setting up new machinery for registering and controlling charities there may be unnecessary and unjustifiable overlapping and interference. I am sure that the Government have this point in mind. My Lords, with these brief observations, it gives me pleasure to support the Motion that stands in the name of the noble Lord, Lord Nathan.
4.14 p.m.
VISCOUNT SIMONDS: My Lords, the noble Lord, Lord Hylton, has been good enough to allow me to intervene at this

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stage, in his place, and that has given me the pleasure and privilege of congratulating the last speaker, the right reverend Prelate, on his contribution to our debate, and to say how warmly we all hope that he will frequently speak in future.
Having said that, I propose to say very little. I speak only because, on the last occasion on which this matter was debated in this House, it fell to me, as the occupant of the Woolsack, to say a few words upon the Government's intention in the matter. The other day I did what I dislike doing extremely: I read the speech that I made on that occasion. I was gratified to find how little I had committed myself to anything, and how little I had committed the Government to anything: because I said, as I observed over and over again, that the Government were giving the matter their earnest consideration. And, my Lords, how right I was! That was five years ago; and they have been earnestly considering it ever since. With those observations, may I just make one or two remarks upon matters that occur to me as being important?
I think that most speakers concentrate upon what they call the cy-près doctrine, a doctrine which enables the court to divert to some relevant purpose funds which had been devoted to a purpose that has become obsolete. There are two aspects of this case which have to be considered and, I think, kept apart. The first is this: at what stage is one entitled to say that a charitable trust has become obsolete, in the sense that it no longer usefully fulfils the purpose for which it was destined? That is a very difficult problem, because while it may well be that the general sense is that the purpose has become obsolete (as is so often the case with parochial doles), on the other hand, it seems very wrong that for the purpose to which the pious founder has devoted his fund there should be substituted some other purpose. That is one aspect of the cy-près doctrine: at what stage does it arise? When can one say that the fund is now no longer used, or cannot be used—perhaps the law does not permit it to be used—for the purpose originally destined, and therefore it must be applied cy-près?
The second aspect is this, Assume that the first condition is satisfied, and that
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the fund can be applied cy-près. How near or how far is the new purpose to be from the original purpose? Upon that question I think there has been a good deal of misunderstanding. I speak as one who for many years spent some part of his life in the administration of the law of charity in the Chancery Courts; and I believe that it would be a great mistake to think that any great relaxation is needed. In my experience there has been no difficulty, when once the purpose of the fund has been found to be obsolete, in devoting the fund to a purpose which is indeed remote; and I have never heard of any objection to it.
In connection with the matter of cy-près, I must take up one point with my noble and learned friend, Lord Denning. He referred to the case of Ulverston. That was a case where a fund was collected; no other purpose was designated except the particular purpose, which was no longer necessary. He seemed to think (and some other of your Lordships did, too) that it was very wrong that an attempt should be made to discover the donors who had given for the particular purpose, in order that, that purpose being no longer applicable, their subscriptions might be returned to them. That is one aspect. But who has not heard of the other: of the person who says, "I gave my fund for a particular purpose. If it is not wanted, why should someone else decide that it should go to some other purpose." That person wants his money back. The courts have often said that he is entitled to have it back. That is the other aspect, and I utter it as a word of warning, in view of what my noble and learned friend said, who regarded it as something preposterous. It is not. I might say, "I have given my money for a particular purpose and it is not wanted. I should be glad to have it back, so that it may be given to some other purpose which I choose, and not to someone else's purpose."
There is one other point on a very general question. I deprecate in these matters more central control than is necessary. We hear so much that "Charity begins at home". It is the child of civic pride and of local patriotism; and I think it will be a matter which will both damp subscriptions and be likely to prevent getting the right people to administer it if it is thought that there is going to be too

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much interference with the local administration of their own home charity. Therefore, quite generally, I would venture to ask Her Majesty's Government to bear that aspect in mind; remembering, too, that in the matter of charity I doubt very much whether "Whitehall knows best". It is a matter upon which civic, local knowledge is all-important; and I think there would be grave objection to interference from central quarters.
There is one more word that I wish to say—and I am afraid I am delaying the noble Lord, Lord Hylton. There is one matter upon which I quarrel with the Government, and upon which, if the matter comes before the House in legislative form, I shall continue to quarrel with the Government; that is, any suggestion that there should be an alteration of the powers of trust investment which will rest upon any administrative body. It is suggested, I think, that the power of giving the right to invest in what are called "other than trustee securities" to some administrative body—the Commission, or whatever it may be—should form part of the new scheme of things. I think that is altogether wrong. If it is desired to give extended powers of investment, that should be done universally and by an Act of Parliament. For, if not, how are you going to determine it? Are large charities to be given extended powers and small charities not? Why should that be? It is just as important for a charity whose income is £100, to increase that income as it is for a charity whose income is £1,000 to increase theirs. If it is said: "A small charity cannot afford to lose its capital", the answer is that no charity can afford to lose its capital: and the risk ought not to be run, unless it is utterly negligible, of either large or small charities losing their capital.
If you are not going to differentiate according to the size of the charity, what differentiation are you going to make? Are you going to say that, if there is a trust company, a bank, or an insurance company, who are to act as trustees, then you will give them extended powers, but not otherwise? That will be a most unfair differentiation. It will not only put charities to the cost of having remunerated trustees, but it will, in fact, make an unfair differentiation, because private trustees are just as competent—and very
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likely more so, because they take a personal interest—as these trust bodies.
Then, my Lords, if you are not going to differentiate according to whether the trustees are a trust body or individuals, how are you going to differentiate? You are not going to take a professional man, I suppose—a barrister. He is quite hope? less in a matter of business. Who are you going to take, to be given these extended powers? You will create nothing but discord and jealousy. Your conduct must be arbitrary and capricious; and I distrust altogether the suggestion that this power is to be given to an administrative body. And why should it be? Surely the right course is that which has been adopted in the past where it is desired to increase the scope of trustee investments—to do so by an Order in Council, if that is permitted under the Trustee Act, and if not, by proper legislative authority. I shall renew that argument if, when the Government bring in their Bill, I find any such provisions in regard to the extension of investment, and I shall do it with a great deal more illustration than I have found possible in the short time I have had this afternoon. Upon that matter I quarrel with. the Government, but upon every other point I would venture to support what they say in the White Paper; and, so far as I may, I give it my blessing.
4.25 p.m.
LORD HYLTON: My Lords, your Lordships, I am sure, have been delighted to hear the noble and learned Viscount who has just sat down, and only regret that he does not more frequently address your Lordships' House. I venture to make a few remarks (which will be very short) on Lord Nathan's Motion because I am one of the survivors of the early debate in 1953. I should like to draw attention to two aspects of this matter to which the noble and learned Viscount has just referred. To take his second point first, he said that charity starts at home, and I believe that recognition of that principle is essential when dealing certainly with parochial charities, and very often with larger charities as well. I do not believe that charity starts in county halls or in city halls, and I deprecate very much the suggestion that local authorities, whether county councils or urban authorities, should co-operate with, or consult with, and so on, the trustees of existing charities. It would be,

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I believe, to the benefit of neither. Local authorities are elected for certain statutory purposes, the administration of charity not being one of them. With a considerable experience of local government behind me, I do not believe that any intimate co-operation of elected members of local government bodies with charities is going to be in the best interests of either.
It is true that the Charity Commissioners, when setting up a new scheme, perhaps initiated by the mayor of a town, will in that scheme designate a number of the members of the local authority as trustees. That is perfectly justifiable, and probably works very well. But it is a totally different matter to say that local authorities are to inquire into the circumstances and the administration of existing charities which never have had members of local authorities among their trustees. It is true to say that the proposals in the White Paper go nothing like as far as the proposals contained in the Report of the Committee of which the noble Lord, Lord Nathan, was Chairman, but I still feel that the position ought to be carefully scrutinised by the Government before they introduce any legislation, if they have the intention of so doing.
The noble and learned Viscount referred to investments in equities, and from what I gathered from his remarks he was not in favour of allowing charities to carry out such investments. But the fact is that, at the present time, charities are allowed to invest in equity shares. Only quite recently I had an interview with the Senior Charity Commissioner, when he gave his approval in principle to the investment of a proportion of the funds of a certain charity in equity shares. So the position to-day really is that a proportion of capital can be invested in equity shares, unless I 'have been misinformed on the point. But I think that there must be a limit to those who can carry out such investments. As the noble and learned Viscount has said, where do we draw the line? The point arises, as it has already arisen during recent years in the case of some charities who have bought shares which are now showing a loss on the capital involved in the transaction, that equity shares, which everybody thinks are bound to show an appreciation, may show a loss.
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Let me finish by saying that the noble Lord, Lord Nathan, gave the impression that nothing was happening in charitable matters because the Government had not accepted in too the recommendations of his Committee's Report. That he considered to be a very bad thing. But it is hardly true. I am sorry that the noble Lord has left his place. The Charity Commissioners continue to administer charities and to bring in new schemes. Only a few weeks ago I had to approach the Commissioners to obtain a scheme, which was obtained within a reasonable number of months, and this charity is now fully set up and will start working within a few weeks. It is quite erroneous to try to make out the case that because the Nathan Report recommendations have not been adopted fully by the Government, charity has come to an end. New trusts and new charities can be set up through the Court of Chancery, if it is wished. The somewhat black picture painted by the noble Lord is far from the truth.
In conclusion, I would say that I hope that we shall see the noble Viscount, Lord Samuel, more often at the Table and that perhaps on his next appearance he will have the good fortune to be able to say that common-good trusts or funds have finally been authorised.
4.33 p.m.
THE EARL OF IDDESLEIGH: My Lords, on the occasion of our last debate upon this Report, it was my not very pleasant duty to give voice to the genuine apprehensions which the Report occasioned in the minds of certain ecclesiastical authorities. I followed and supported the most reverend Primate the Lord Archbishop of Canterbury, who made a severely critical speech on the subject. However, I did not fail to acknowledge that the ecclesiastical authorities to whom I have alluded were fully aware of the need for some overhauling of the law relating to charities and found much good in many aspects of the Nathan Report. To-day, it is my much more pleasant duty to say that the White Paper has removed to a large extent and in substance the apprehensions which those authorities felt, and that they would be ready to support legislation based on the White Paper, provided that there is no material modification of the White Paper terms. Since the White Paper

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undoubtedly represents the considered judgment of Her Majesty's Government, we have no doubt that the legislation which will be ultimately introduced will be substantially on the lines of the White Paper.
There are certain modifications of the Nathan Report recommendations which we are particularly glad to see. The standard form of rendering accounts and the necessity of the auditing of accounts would have been a real hardship to sonic small charities, in which I feel an interest. For example, up and down the country there are many small but useful convents, doing for the most part educational work, which represent in the mass a great number of small and humble trusts, who should not be overburdened with legal requirements which may be suitable enough for larger bodies. For my part, I am particularly glad to have removed the recommendation that information regarding all trusts should be sent to local authorities. I do not altogether, share the enthusiasm of the noble Lord, Lord Nathan, for co-operation between local authorities and charities. In my experience, it not infrequently means that charities are asked to provide for needs which, in my judgment, the local authorities have the right and duty to provide. I have seen rather too much of charitable money being used to subsidise the local ratepayer. The whole relation of local authorities, as the administrators of State welfare, and charities is a very delicate one and one which requires a great deal of constructive thought.
There are certain points in the White Paper about which I personally—and I speak entirely for myself here—do not feel very enthusiastic. I hope that before the introduction of legislation further consideration may be given to the proposal to give the Home Secretary a general responsibility for the Charity Commissioners and to abolish the Parliamentary Commissioner. Is there not a real danger of introducing charitable work into the field of Party politics? Is there not a danger that, for Party political reasons, questions will be addressed to the Home Secretary which would not have been addressed to the Parliamentary Commissioner? is there riot a danger that, under the fear of Parliamentary pressure, the Home Secretary may be deterred from exercising his discretion to its full? It
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seems to me that that is a point to which further consideration might usefully be given.
For the rest, there is one small point which I would make regarding paragraph 49 of the White Paper, which deals with exceptions. Cathedral or collegiate churches are to be excepted, and that provision is taken from the Act of 1853. In 1853, of course, there was only one kind of cathedral; but to-day there is more than one kind. There will, at least, have to be some definition of what is meant by "a cathedral", and possibly some consideration as to whether, in fact, that exception is in the public interest or not. Apart from that, I join with the noble Lord, Lord Nathan, in expressing the hope that legislation on the lines of the White Paper may be introduced at no distant date.
4.41 p.m.
LORD HAWKE: My Lords, it is a long time since the Royal Commission produced their Report and it has taken some time for the White Paper to be: published, but now that it has come out, I believe it to be, on the whole, a most satisfactory document. I am particularly glad that the Government have come down strongly against any local interference in trusts through scheme-making or even compulsory recording. I have two main reasons for saying that. First of all, I dislike intensely the idea of what are in essence political bodies having charitable funds to administer. There is a danger that any charity might become a sort of political shuttlecock in the council chamber. If the local authorities administer the ratepayers' money badly they can be called to account by the ratepayers at the next election; but if they were to administer charitable funds badly, apart from any definite criminal negligence, they would have nobody to account to except the souls of the departed.
My second point is that testators would intensely dislike the idea that local authorities could play their fingers on the money which they had laboriously accumulated during their lifetime. One might think, perhaps, that such views of testators are narrow and old-fashioned. but gentlemen who have accumulated large fortunes during their lifetime often have strong views on subjects of this sort; and, after

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all, it is their money. I believe that if the local authorities had been brought in there would certainly be no new era, as the noble Lord, Lord Nathan, said, because the fount would dry up. I do not mind the local authorities approaching the Charity Commissioners or the trustees of a fund and saying that they would like them to get a scheme to tackle a particular problem, because then it would be up to the Charity Commissioners or the trustees to do as they liked.
The other thing I dislike, which I am glad the Government have turned down flat, is local recording. I am not too enamoured of central recording for all these small trusts, because it involves a great deal of trouble and clerical work. Suppose some charitable gentleman died leaving £10,000 the income from which was to be held in trust for the benefit of miners' widows. The income from that fund would be about £500 a year, and at present the trustees could hunt round their district and without any difficulty find the requisite number of miners' widows on whom to spend the annual income. But suppose that, through wider recording and wider information, news was broadcast throughout the coalfields of Britain that there was money waiting for miners' widows, the trustees would be snowed under with applications; and as the applicants would, in politeness, expect a reply, the funds of the charity might well be entirely disbursed in postage and stationery. That may be considered to be a far-fetched instance, but I do not think it is so far-fetched as might be thought. In those circumstances, no trustee would continue to stand; he would not have the time or the inclination to deal with a vast postbag every day asking for the small amounts of money at his disposal.
I agree that central recording is useful from the point of view of a fount of information for professional people who are interested in the classification of particular charities and people who would be able to evaluate their financial position. For instance, they would not turn full publicity on to my mythical case, but would keep it comparatively private. Some charities, of course, like to receive publicity, because it is useful for them; but some do not. I should hope to see the recording rather follow that line of demarcation.
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Several noble Lords have referred to this difficult question of the widening of the investment clause. It has been a real dilemma for trustees, because in the past they have had the choice between accepting a low coupon rate and some capital appreciation to set off against inflation, or a reasonably high coupon rate, low capital appreciation and a certainty of loss of real value. I should imagine that all trustees would welcome a wider investment clause. But I am not so certain that they would all welcome the responsibility. There are many people who would be rather reluctant to have the task of investing charitable funds in what are non-trustee securities at the moment. But, at any rate, the Royal Commission recommend a widening, and the White Paper accepts it. Up to date, it has been for the court to decide: the Government suggest the Charity Commissioners and the Minister of Education, and that seems a sensible line.
However, there are two difficulties that I see. First of all, there is the question of administration. The volume of requests will be enormous, and I think it will overwhelm the Charity Commissioners. Then there is the problem of differential which has been referred to this evening. Are you going to have the same rules for the small as for the big, assuming that the big have access to good investment advice and assuming, possibly quite wrongly, that the small have not? Each in its own way has exactly the same need to preserve its capital intact, so the need is exactly the same; it is just a question of whether the responsibility is there or not. It is going to be a most invidious task for the Charity Commissioners and the Minister of Education to say, "You can do what you like—you cannot."
We had this problem in the Church of England, and I think we have solved it. The right reverend Prelate the Lord Bishop of Chelmsford referred to difficulties in the churches. I think he was speaking for the Churches Council, and was referring to the non-Church of England churches, because I believe we have solved it. We took power in the Church Funds Investment Measure for the Church of England Finance Board—that is not the Church Commissioners—to form investment pools, and any investment in these pools was held to be a trustee investment for the benefit of the trusts in the case of

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any trust connected with the Church of England which was truly charitable in that it was able to obtain full return of income tax.
We took power to run any form of pool—different pools to suit different types of trust—but I believe that at present only two are being run. The first is designed for the deposit of monies required intact at some specific date, and this pool tends to operate in Treasury Bills, local authority loans, Government stock, industrial debentures and so on, and it can do better than a trustee buying Government stock in the open market. The other pool invests largely to secure long-term income, and, it is hoped, a long-term capital appreciation to secure against inflation. Many charities have thrown their investments or cash into these pools to the amount of many millions of pounds, and they have thus thrust upon professional paid managers, advised by highly-skilled volunteers, the task of investing the money of the numerous parochial charities of the Church of England. I stress that this is entirely voluntary; nobody comes in unless he wants to. I suggest that consideration should be given to some similar scheme for the benefit or use of the numerous small charities up and down the land under the aegis of the Charity Commissioners or the Minister of Education.
Of course, there are arguments both ways, and if I set out one or two, that does not mean to say that there are not a great many more. From the point of view of the Charity Commissioners, it would certainly be a way out of their great administrative difficulty and, indeed, I must say, out of what may be chaos through the applications for the widened powers. It would relieve them of the invidious task of trying to distinguish between the charities, as to which should have which powers. For charities, it would be a means of getting quickly powers to spread their investments—cowers which, in the normal course, it might take a considerable time to get. It would enable a very small fund to become widespread. It would get expert management. It would get tax refunds at the same time as the income was paid out.
The contrary points that stick out are, first: would the trustees up and down the country blame the Government if the
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pool did not do as well as they thought it should? Quite frankly, I do not know the answer to that psychological question. Could one get skilled managers? If one is prepared to pay out of the fund, as is done in the Church of England, I do not see why on earth one should not. Could one get skilled voluntary advice for the managers? I believe that there are men in the City who would be prepared to run public services of such a nature in an advisory capacity, as they do for the Church of England. Would the charities come in, in view of the management and the advisers? I think a great many of them would. They would still have the three choices: they could stay as they are, they could apply for a scheme or they could use the pool. Would the pool have any advantage over individual investment by charities? Of course, it would provide a much wider spread, a better management, and more high-powered advice, and the dividends would be paid without deduction of tax.
Then one might ask: would the pool have any advantage over permission to invest in, say, commercial unit trusts? There I think it would, because the tax refund would be available at once at least it is in the Church of England pool—at the same time as the dividend is paid out, and the pool could set off in-corners against out-goers, so that its spread between buying and selling was reduced, which would not be the case, I understand, in a commercially managed one. Whatever the pros and cons—and there are many—it would be an important step, and I earnestly hope that some thought can be given to this matter.
That is all I will ask tonight. I would not want a reply now, because I know the inclination of advisers and Ministers, when something new is shot at them, is always to produce the reasons why it will not work. That is human nature. But when we come to the Charity Commissioners, whatever happens—whether there is a pool or not—arising out of the White Paper there is a great deal more work for them, so far as I can see, and they will definitely have to be strengthened. At the moment they are extremely thin on the ground, particularly in the top grades, and anything out of routine which presumably requires the sanction of the higher authority is apt to be a slow and laborious business. There is always a danger, in selling property and that sort

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of thing, that trustees may miss a market in cases which are not quite routine, through the lack of staff of the Charity Commissioners to deal with the matter swiftly. As I said before, I welcome the White Paper, which I think is a very suitable and realistic method of replying to the valuable Report of the noble Lord, Lord Nathan.
5.0 p.m.
THE LORD BISHOP OF SHEFFIELD: My Lords, at this stage of the debate my desire to hear what the noble and learned Viscount on the Woolsack is going to say far exceeds any wish I have to inflict another speech on your Lordships who have the same desire. I will confine myself, if I may, to three points. Looking forward for a moment, rather than back, I think we have to take into account the fact that everybody to-day is conscious that we are living at a time of very rapid social change when, among other things, the value of money is depreciating rapidly. One growing consequence of this, I believe, is that to-day people with charitable intentions and some little capital to allocate no longer share to the full the mental attitude of testators who lived in a much more stable society.
We realise that, however prophetically minded we may be, we cannot see very far into the future; and we are therefore less anxious than our forbears were to tie up our little benefactions so tightly. We have seen in the span of our own lives the whole pattern of our society alter very much. So I believe, looking to the future, that a wise and charitable man to-day will not only wish to give his money to this or that object for which he has great care and concern, but will also want to be sure that, in the changed situation which he cannot really foresee, when the need which he did see no longer exists, his money will be transferred by some intelligent persons to meet some other object or need fairly in line with the spirit and intention of his original gift. I am quite sure that in this country we shall always be rightly conservative in not altering easily the terms of trusts formed by donors in the past. I am not, therefore, greatly impressed by the argument that some relaxation in the terms of trusts will necessarily dry up the springs of charity, as it might have done in the eighteenth or even the
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nineteenth century. I think that the mentality of testators to-day is changing as much as the pattern of society.
The second point to which I would draw attention—it has been made already—is that those who care greatly for voluntary social service have had a growing anxiety during the past ten years that the situation is, from their point of view, worsening rather than improving. We hoped when the Nathan Committee was set up that it would lead fairly rapidly to some relaxation in regard to trusts and would in fact lead to the bringing back into real use of a good deal of the money which is locked up and tied up in obsolete trusts, or indeed is lying dormant in banks. I fancy that there is more of that than is sometimes realised. To-day, after ten years, I believe that many of the voluntary organisations and services are very seriously straitened financially. For this reason, among other things, to bring up a point already made, it is desirable, if the capital is not to wither away, that they should be allowed, I think by law, as the noble and learned Viscount, Lord Simonds, has suggested, to invest their capital in a wider range of securities. It has been my sad experience that in the last fifteen years much the surest way of losing capital is to invest it in undated gilt-edged stocks. That has, I think, placed a good many voluntary organisations in serious financial difficulties.
The third thing I should like to mention very briefly—and one reason why I am grateful to the noble Lord, Lord Nathan, for bringing forward this Motion is that he has provoked the noble Viscount, Lord Samuel, to speak once again—is the subject of common-good trusts. I believe that we ought to press forward the setting up of common-good trusts, and I was wondering, when the noble Lord, Lord Hawke, was speaking, whether it would not be possible to have some sort of marriage between Lord Samuel's common-good trusts and some kind of pool which would enable very small local trusts—and there are a great number of such trusts—to invest their money wisely and well and not allow it to wither away. Common-good trusts in a locality might be set up in an advisory capacity, and might foster some local trusts without actually getting rid of the actual trusteeship. I believe that locally in many parts of this country we need

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such trusts. Voluntary organisations are sometimes unnecessarily fearful about their influence on their own finances. I do not imagine that normally a common-good trust would make wide public appeals for money. Rather would it be a depository for small monies from small trusts—for benefactions from people who were not desirous to give all their money to one particular cause, and that kind of thing.
I think it would be of immense value in many parts of this country if such trusts could be set up, because I believe that if the trustees were wise, sensible people, and were refreshed by fresh personnel from time to time, they would be a very valuable advisory body, holding together the many smaller, not always very expert, trusteeships in a locality. It is quite a different matter from handing them over to a local authority. I am sure that there is a future for such trusts—indeed, the experience of America and Scotland Chas proved the need for setting them up South of the Border. Finally, I hope very much that it will be possible for the Government, after these ten years of intensive thought, to promise us some legislation which will liberate some of this locked-up money and also help us to go forward and strengthen, rather than weaken, the voluntary organisations of our country.
5.8 p.m.
LORD CLITHEROE: My Lords, I will not detain your Lordships more than a few moments, but I want to add my thanks to those already expressed by other noble Lords to the noble Lord, Lord Nathan, both for the admirable Report of the Committee on the Law and Practice relating to Charitable Trusts and also for raising this Motion in the House to-day.
I want to deal with only one point, among many which interest me very much in this subject, and that is the range of trust investments. That is a subject of which I have considerable knowledge, and therefore I take the liberty of addressing your Lordships' House on the matter. It is now more than 20 years since I first raised this question in the other House. I have been wholly unsuccessful during the whole of those 20 years in pressing the Government to amend the Trustee Act. The Trustee Act, if I may say so, at the present time is a crying scandal, and
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nothing less. It was designed in times when circumstances were wholly different, and its application to trusts to-day has resulted in many trusts losing a very substantial part of their capital and income. I take it that the object of the Trustee Act, apart from the protection of trustees, is to protect and secure the trust funds. As it now stands, the Trustee Act not only fails to protect them, but makes it quite certain that a substantial portion of them will be lost. That is a situation which surely ought no longer to be tolerated, and I hope that when the noble Viscount comes to reply he will be able to tell us that something is really going to be done about it.
Paragraph 17 of the White Paper states that the Government consider that a distinction should be drawn between the arrangements relating to charitable trusts and those relating to other trusts. They do not say why. They then go on to set out certain suggestions for dealing with the investments of charities. I should consider it very wrong indeed to deal merely with the question of the investments of charities, and not with the whole range of trusts; and I feel sure that the noble Viscount, Lord Simonds, who spoke earlier, shares that view—in fact, I think he almost expressed it. The point is that there must be given to trustees a larger range of investments than is now permitted. It is all very well set out in Lord Nathan's Report, in paragraphs 277 onwards. The Report describes the existing range of investments; it explains how archaic they are; it explains the effect which inflation has had on all investments which are tied solely to money, and it goes on to give a proposed extended range of investments, with appropriate safeguards, which seem to me very good. No doubt in minor details they might be varied to meet the views of Parliament, but, broadly speaking, they seem very good. I beg the Government to tell us not only that they are going to deal with charitable trust investments, but also that they are going to deal with the Trustee Act itself and with the whole range of trustee securities. The Act must be amended, and the sooner the better.
I should like to make one other very small point before I conclude. The trustees of small trusts find it a convenience to invest in a stock which does not have income tax deducted at source, and

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for that reason a great many trustees up and down the country invest in War Loan—it is convenient to them. It would be of great convenience to trustees if there were provided a Government stock with a date of redemption and in regard to which tax was not deducted at source, which trustees would have at any rate available to them as one of their investments. I am not suggesting that no trustee should invest money in Government funds. I know how anxious the Chancellor of the Exchequer and the Treasury must always be to maintain their large clientele of investors in Government funds; but I do say that to tie trustees to specially fixed-interest investments is wrong, and that the sooner that is brought to an end the better.
5.14 p.m.
THE LORD CHANCELLOR: My Lords, I am only echoing what every one of your Lordships feels when I say that we owe a debt of gratitude to the noble Lord, Lord Nathan, for having raised this afternoon the question of legislation to deal with the future of charitable trusts. We are also grateful because it has been the occasion of the maiden speech of the right reverend Prelate the Lord Bishop of Chelmsford. We are delighted that he should have broken his silence in the House, and we hope that we shall hear him often again.
I want to say generally that there is little in the speech of the noble Lord, Lord Nathan, with which I have occasion to quarrel, and if I take rather a long time in not quarrelling with it it is only because the subject is important and I know that he wants to get the latest Government view on the various points. As again your Lordships have said, not only on this occasion are we grateful for the speech of the noble Lord this afternoon, but anything that is said on behalf of Her Majesty's Government ought to be prefaced by a repetition of our gratitude and appreciation of the work of the Committee of which the noble Lord was Chairman the Nathan Committee, as it is known in this context. Since we had the Report in 1952 we have had the advantage of the debate in this House in July, 1953. I should like to say that the views that were then expressed were of material assistance to Her Majesty's Government in formulating the policy set out in the White Paper, which
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I think I can claim has received general approval from your Lordships this afternoon.
The noble Lord, Lord Nathan, summarised the views of his Committee on a number of important points. I hope that he will forgive me if I quote what I regard as a most important passage from the Report—namely:
"The resources at the disposal of voluntary action should be put to the most appropriate use, and we therefore recommend that in exercising or taking advantage of the new scheme-making powers four guiding principles should be borne in mind:—

(a) It is the duty of the trustees to put their resources to the best possible use in the services of the community;

(b) It is for them to decide in the light of this principle what to do with these resources;

(c) The resources should, as a general rule, remain at the disposal of the voluntary movements;

(d) It is the peculiar function of voluntary organisations to pioneer."

With these recommendations Her Majesty's Government wholeheartedly concur, and I should like to say here how infinitely I agree with what has been said about the importance of voluntary organisations and voluntary effort at the present time.
Last week I had the honour to address a gathering of the Citizens' Advice Bureaux of the National Council of Social Service—organisations which are of immense help to me in connection with the background of the Legal Aid scheme. If the right reverend Prelate will take this from me in the spirit in which I utter it, which is one of entire reverence, as I hope he will believe, it is a real difficulty to-day, with the extended spheres of the activities of the State, that people take the attitude, "Oh, is that not covered by the State?" I venture to put it in this way in the spirit that I have described: that if one tried to translate the parable of the Good Samaritan into modern idiom it would be wholly insufficient for the modern person to say that all the modern good samaritan needed to do was to ring up 999 and leave the rest to the National Health Service. That is an attitude which, fortunately, has not spread widely, but it is one which we have to bear in mind. Therefore, anything that we can do to underline and stress the importance of voluntary organisation will always in every field

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have my support, as it has the support of the noble Lord, Lord Nathan.
I suppose that there has been some divergence on the method of carrying out the recommendations, but here again, considering the scope of the subject, the divergences are not very great The Nathan Committee suggested that there should be a relaxation of what was known as the ey-près doctrine, of which there has been much discussion this afternoon, and on which, as the noble Lord, Lord Nathan, has said, there is a considerable field of agreement. But, more importantly, they suggested that while proposals for a scheme should normally be put forward by the trustees of a charity, either the central authority—that is to say the Charity Commissioners or the Ministry of Education, or any county or county borough council in whose area the charity was operated—should also have power to initiate a scheme for the reconstitution of a charity. There was a difference there and we have had the other point of view explained this afternoon by my noble friends Lord Hylton and Lord Hawke. They felt that that constituted a severe threat to the independent administration of charitable trusts.
My noble and learned friend Lord Simonds made what I believe was an important point in this regard. It is by no means easy to find competent persons who axe willing to act as trustees of charity; and to place charity trustees in the position of subordination to local authorities seemed to Her Majesty's Government to be in the best interests neither of charity trustees nor of the local authorities themselves. We felt that the proper relationship should be that of cooperation, not of subordination, and the proposals of the White Paper were therefore cast in this mould. The White Paper makes it clear that whatever local authorities may do in the way of co-operation with, or a review of, local charities, that may be done only in consultation with the trustees and with their consent. I believe that that meets the point that my noble friend Lord Hylton particularly had in mind, and I assure him that it is one whose importance we appreciate. It will be carefully scrutinised, although we trust that on that basis the co-operation I have mentioned is not beyond our hopes. I think your Lordships will see that it is a principle running through the proposals
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of Her Majesty's Government that charity trustees should not be subject to political pressure by local or central authorities, and I hope that my noble friend Lord Hawke will accept that that is certainly our intention and is a point which we shall bear in mind.
The noble Lord, Lord Nathan, has asked when Her Majesty's Government propose to take action to implement the policy declared nearly four years ago in the White Paper. The task of preparing legislation which has been in progress since 1956 has been one of exceptional difficulty. The law of charity is traditionally the province of the Courts; it is founded less upon Statute than upon the principles evolved over the centuries by courts of equity and embodied in the corpus of Case Law. The existing Statute Law, moreover, is to be found in a variety of intricate and largely obsolete Statutes scattered over the last 150 years, and to introduce into this corpus of law the reforms envisaged in the White Paper is a matter of the greatest delicacy and complexity. The conclusion has been reached that the best course is to repeal the whole of the charity Statutes since 1800 and to re-enact their substance, with the amendments required, in a consolidated form. I believe that that again is very much within the letter, as well as the spirit, of the suggestion of the Nathan Committee.
The noble Lord, Lord Nathan, asked me whether The Times leading article was prophetic. While at this stage of the Session and Parliament it is necessary to make the correct constitutional noises, I think that The Times is right in prophesying that next Session will see the legislation. I think I can go as far as that without impropriety on any grounds; and if your Lordships would allow me to mention a personal point, I would modestly underwrite The Times' charming recognition of the complete irrelevance of whether I hold my office or not. The working out of the policy in the White Paper has shown the need for a number of modifications, and on behalf of my right honourable friend the Home Secretary, who under the legislation envisaged in the White Paper would have special responsibilities for the Charity Commissioners, I should like to tell your Lordships what he has in mind for dealing with some of the problems.

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My noble friend Lord Iddesleigh was rather worried about the introduction of the Home Secretary as a political Minister. Having held that office for three years (I speak with some diffidence in the presence of my great predecessor, the noble Viscount, Lord Samuel), I would say that the Home Secretary has so many and varied tasks to perform, and occupies such a special position in the ministerial set-up, that I do not think he will find himself the subject of political pressure. He will find himself the subject of pressure to get on with his work and improve it, but I do not think the pressure will be political in the Party sense, of which I believe my noble friend was afraid.
I propose to deal with the four main topics raised by the noble Lord, Lord Nathan, and to take up as the opportunity arises the remaining points raised by other noble Lords and right reverend Prelates. I hope that the noble Lord is satisfied with my answer on his first point. I believe that he will agree that in May, 1959, no Minister could have been more forthcoming on that paint. I hope he agrees; for that is what I intended to be.
I come now to the problem of central records, the first of the topics raised by the noble Lord. As he said, the need for central records has been accepted by the Government. Further study of what is involved in such an undertaking has led to the development of the policy in a number of ways. It should help social workers to discover what means exist for meeting the needs of those who are not precisely covered by the public welfare services. As I mentioned a moment ago, my right honourable friend the Home Secretary is at one with the noble Lord in the hope that local authorities in counties and boroughs will be prepared to maintain local public indices of charities operating in their area; and it is in his mind that the central authorities will supply copies of index entries to such local authorities. Second—and I believe this is an important point—any organisation which is included in the central register of charities must be treated as having charitable status, but independently of the Government. I am glad to inform the noble Lord that it is the intention of the Government that inclusion in the register will be treated by the
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Inland Revenue as prima facie evidence of charitable status. The third point is this. To serve its purpose, ways have to be devised of keeping the central record complete and up to date with basic particulars of permanent or important charities. On the first point, if I may add a slight touch of levity, I would say that the noble Lord may remember that when he and I were young there was a song which finished with the words:
"Will you join me, Mr. Gramps?
I will precede you, Mr. Grips."
I think on this point I have not only joined the noble Lord but, an important particular, I have preceded him in that work.
I want to say just a word about religious charities, because some fears were expressed about the registration of trusts for the advancement of religion, a matter to which the right reverend Primate referred in the course of the debate in 1953. If I understood the right reverend Prelate the Lord Bishop of Chelmsford and my noble friend Lord Iddesleigh correctly, they had that point in mind from the standpoint of their respective churches. The Government have no intention or desire to interfere with the administration of funds held by religious organisations for general religious purposes, but I think we should all agree that there should be central records of property which has been left on perpetual trust for religious purposes, and that charities administered by denominational authorities or for social welfare purposes, such as schools and holiday homes, should be treated in the same way as other charities held for similar purposes.
After careful consideration of this problem—I think, again, this is important—we doubt whether it would be practicable to find a statutory definition which did not leave great uncertainty in many cases. We have in mind, therefore, that in place of the statutory exception contemplated in the White Paper, a list should be worked out in consultation with the authorities of each of the principal denominations showing what denominational fund should be exempted from the supervisory function of the Charity Commissioners proposed in the White Paper. If this is a solution which commends itself to representatives of the churches, we will

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certainly be prepared to consider the possibility of such an arrangement.
If I may say one or two words on the question of the relaxation of the cy-près doctrine, on which generally the noble Lord, Lord Nathan, was not discontented with the approach in the White Paper, I will put two of the main—I do not say contentions: that is wrong—but approaches which we have heard of in your Lordships' House. The noble Lord, Lord Nathan, has emphasised the need for relaxing the existing doctrine of cy-près to enable charity to keep up to date, and I think the majority of expressed opinion has been with him. My noble and learned friend Lord Simonds has, broadly, taken the approach that the courts are well equipped to deal with the alteration of trusts in case of need and that there is not the same vital need to amend the law. I hope I am putting it fairly. That is the difference of approach as I see it. Indeed, my noble and learned friend Lord Simonds made, I thought, a cheering remark from his great experience that once you made the decision, or the decision was clear, that the trust or the purpose of the charity was obsolete, then there was not a great difficulty in finding an alternative purpose.
But I would ask your Lordships' attention for a rather different issue, which has struck me in considering this matter. It is not the courts, but charity trustees and the Charity Commissioners and the Ministry of Education, who need to know, with certainty, what standard short of absolute failure of a trust is to be applied to justify the making of a scheme. In considering what the criteria should be, we have found of great assistance a statement of principle enunciated by my noble and learned friend Lord Simonds in his judicial capacity in the National Anti-Vivisection Society case in 1947. He said that a scheme should be applied for—now I quote his words:
"…if by a change in social habits and needs, or, it may be, by a change in the law, the purpose of an established charity becomes superfluous, or even illegal, or with increasing knowledge it appears that the purpose once thought beneficial is detrimental to the community."
I am sure the noble Lord, Lord Nathan, had that in mind in writing his Report. As the noble Lord, Lord Nathan, pointed out, all charity is necessarily for the
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public benefit; and the general criterion that we have in mind for distinguishing where a scheme ought to be made is that no substantial public benefit continues to be provided in the mode prescribed by the founder.
The courts, not the Government or the founder, are the judge of what is for the public benefit; and this raises a further important point. How is it possible to ensure that trustees will apply for schemes when these circumstances arise? The Committee presided over by the noble Lord, Lord Nathan, thought that this should be the function of, inter alia, local authorities: local authorities should keep local charities under review and report to the Charity Commissioners when reform appeared to be needed. The White Paper rejected this view and emphasised that reliance must be placed on trustees themselves to take the initiative, but in exceptional circumstances the Home Secretary or the Minister of Education might direct the preparation of a scheme without the application of the trustees. Further consideration has suggested an alternative approach. It has been laid down by the court that it is the duty of trustees to apply for a scheme in the circumstances described, and we think that if Parliament declare this in the Statute it would greatly help the Charity Commissioners in inducing trustees to act, and it would render the intervention of the Minister necessary only in rare cases.
As I said, my noble and learned friend Lord Simonds has rather taken the view that the court's powers of altering the objects of a trust are already sufficiently wide. I agree that the court has a wide discretion; nevertheless, it is proposed in the legislation to give the Charity Commissioners and the Minister of Education an equally free discretion. On the noble Lord's second point, I hope that we are advancing with minds unclouded by prejudice or preconception.
Now I come to the third point, where there is more difference: that is as to the constitution of the Charity Commission. The noble Lord, Lord Nathin, drew attention to his proposal that the Charity Commission should be formed of a number of part-time Commissioners of standing in public and charitable affairs, led by an advisory body and served by a permanent staff. It is not, in our view,

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intended that the Charity Commissioners should have any general policy to enforce upon charity trustees. Our view is that the initiative and responsibility should rest with the trustees themselves, and that the Charity Commissioners should act as their friends and advisers in assisting them to carry out their functions. It seems right—and here we are in agreement—that the Charity Commission should have a permanent staff, equipped to render the service which charitable trusts require, able to help them in their dealings with local authorities and with other Government Departments, and able to indicate where technical guidance can be obtained when they are not qualified to supply it themselves. So on that point there is, I think, agreement between the noble Lord and the Government.
My Lords, we are quite prepared to consider the appointment of an advisory committee, but we feel that further consideration should also be given to the benefit which the Charity Commissioners will receive from the functioning of the informal contacts which I have just described. So, although on that point we cannot come quite ad idern, again I hope the noble Lord will see that we have considered carefully what he suggested.
The functions of the Charity Commissioners and of the Minister of Education in relation to charities should no doubt be defined in the Statute. The present law contains no such definition, and this may well have hampered the Commissioners in the performance of their functions. We propose to make it a part of the duty of the Charity Commissioners to exercise the jurisdiction conferred upon them exclusively for the benefit of the charity and so as to secure the best employment of the charitable resources for the advantage of the beneficiaries so far as possible and in accordance with the intentions of the founder: that is, we are proceeding on the same principles as those I quoted from the noble Lord's Report. The Commissioners would further be required to advise and assist charity trustees in carrying out their charitable purposes; to secure the preservation of charity property; and to promote the co-operation of trustees with each other and with the statutory welfare services. Finally, they might be empowered to inquire into alleged abuses
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of charities and to encourage the development by voluntary bodies of improved methods of administration. So I think that, there again, although our approach is not identical, we are covering much of the work which the noble Lord had in mind for the Charity Commission.
Now I come to the last main point of the noble Lord, Lord Nathan, which is a point that has been emphasised by my noble and learned friend Lord Simonds and also by my noble friend Lord Clitheroe in the last speech of the debate. I agree that the most pressing problem confronting charities of all kinds may well be the extension of the range of investment. I need not enlarge upon the disadvantages to which those trustees who are confined, by their trust instrument, to investments on the Trustee List laid down in the Trustee Act, 1925, have been subject in recent years. This list represents, in the main, what would have been considered suitable by a prudent investor of thirty years ago or more, rather than what is prudent to-day.
The Government announced in the White Paper their intention of dealing with this problem, but developments since that date have resulted in the abandonment of paragraphs 17 and 18 of the White Paper in favour of comprehensive legislation dealing with trustee investment generally instead of investment by charity trustees alone. I am using almost the same words as my noble friend Lord Clitheroe used a short time ago. I need not go into the reasons which have led to this conclusion, but I imagine it will be generally welcomed not only in your Lordships' House but outside. This is, however, a matter of great importance, affecting the private fortunes of a great many individuals and organisations, and is not to be approached lightly. A comprehensive scheme is being evolved, and I hope that a public announcement will be made shortly. Again, I hope that the noble Lord, Lord Nathan, will say that, on his fourth point, I have not only dealt with what he expected but have perhaps gone beyond what he had hoped.
I wish that I could be as forthcoming to the noble Viscount, Lord Samuel, about the common-good trusts; because, if he will allow me to mention it publicly, it is now a period of forty years since we first became friends and since he showed such kindness to me when I stayed with him

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in 1919. If the House would allow me, I should like to express the dear delight it has been to all of us that he should have come and taken part in this debate. But in regard to the common-good trusts, I think that the noble Viscount found paragraph 69 rather like the curate's egg. The good part was the first part—that the Government agree that it would be advantageous if local common-good trusts were established more widely than at present, and that they should be spontaneous in origin and unofficial in character. Then, we propose in the White Paper that the title "common-good trust" should be protected by requiring the permission of the Commissioners for its use. The sad point is that, in the last ten years, there has not been spontaneous, voluntary effort to create common-good trusts. There is no obstacle in law to the establishment by anyone of such a trust, and we have said that we are prepared to protect them; but there has not been the interest which was hoped for by the noble Viscount and others. In the absence of a greater measure of public interest, the Government is in a certain position of difficulty; but both Mr. Butler and I will pay deep attention to what has been said by the noble Viscount to-day, and will consider the matter again.
With regard to bona vacantia, first may I deal with the interesting historical point which the noble Viscount raised. The dormant funds were used for the building of the Law Courts under the Courts of Justice building Act, 1865, and that Act gave an indemnity for any claims by beneficiaries Which might arise. In the ordinary way dormant funds are transferred to the National Debt Commissioners for investment, and the income goes to the Exchequer. In these circumstances, my right honourable friend the Chancellor of the Exchequer has two arguments: one, financial, that he does not want to lose the money; the second, moral, that it would not be a real encouragement to spontaneous charity if he started special charities out of public funds. It is in these circumstances that the difficulty which your Lordships appreciate has arisen. But I assure the noble Viscount that we will come back to consider a more extended use of common-good funds and we should be glad of any suggestions put to us.
I am sorry to have occupied so much of your Lordships' time, but I have tried
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to deal in broad outline with what I thought were the main points which the noble Lord raised and which attracted consideration in the debate. In conclusion, I hope that I have said enough to show your Lordships how intricate are the problems of the adjustment of the law dealing with charitable trusts and how important it is to find the right solution. This is a matter of first-class importance. As every noble Lord who has spoken has said, we are considering an important aspect of the future of the voluntary movement, which for so long has made a unique (in the true sense of that word) contribution to welfare of our people.
It is a hundred years since the last comprehensive legislation on this subject. The last decade has seen great changes in our society, and once the course of voluntary effort has been reset its progress may well continue on those lines, unaltered by further legislation, for many years to come. Therefore, it is our aim that legislation to implement the White Paper should encourage voluntary and statutory services to work, as the noble Lord, Lord Nathan, said, "in partnership". There will be no dissent in any quarter from this aim. The way in which this is to he achieved requires careful working out. While informal consultations with the interests concerned have been going on for some time, of course the Government have taken no decision so final as to exclude the further improvements as a result of today's debate. We will give the greatest consideration to all that has been said, and when legislation is finally introduced it is our hope that it will be in a form which will command general acceptance. We also wish to make no change in Lord Nathan's own desire of a single intelligible Act.
VISCOUNT SAMUEL: My Lords, I wonder whether the noble Lord, Lord Nathan, would allow me to intervene before he makes his speech in closing the debate? I was very disturbed by what the noble and learned Viscount said with regard to local common-good funds. I gather that the Government would be disinclined to put anything in their new Bill unless there is first of all a demand over the country for protection for common-good funds. The reason why so much public interest was aroused ten years ago was that it was thought that

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some kind of dormant monies might be made available for such bodies and thereby be an inducement to their formation. Once started, they would grow by bequests and contributions from the locality. But, for one reason or another, it appears that such funds will not be available at all.
The other reason why the trusts might be formed locally would be that the term "common-good trust" would be protected by law, and there might be something in the nature of a legalised pattern which such bodies could follow. Now, however, we are told that the Government are inclined to say that until the trusts get started they are not to have any legislation to protect them. We are also to believe that, unless there is legislation to protect them, they will not get started. This is an unhappy vicious circle: no legislation without trusts being formed: no trusts being formed without legislation. So we may go on in that circle. I hope that when the noble and learned Viscount and the Home Secretary come to give further consideration to this matter, as the noble and learned Viscount has kindly said they will, they will not tie themselves up in that circle but will proceed with the legislation clearly adumbrated in the last paragraph but one of the White Paper. What harm will it do to carry out that suggestion? The worst that could happen would be that it would remain a dead letter. The best that could happen would be that all over the country people would do as Birmingham and other boroughs have done—say that this is a fine opportunity, and go straight ahead. I trust that the noble and learned Viscount will consider this point.
THE LORD CHANCELLOR: My Lords, I am sorry that I must have failed to make myself clear and I want to make it absolutely certain now. I was not going back on anything that has been said in the White Paper. I intended to reinforce the first half of paragraph 69, which says:
"The Government agree that it would be advantageous if local common good trusts were established more widely than at present, and that they should be spontaneous in origin and unofficial in character."
I could not agree more that it would be advantageous if local common-good trusts were established more widely. The paragraph goes on:
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"It is proposed that the title 'Common Good Trust' should be protected by requiring the permission of the Commissioners for its use."
Again I underline that that is still the policy of the Government. The last sentence is:
"However, it is not agreed that national"—
as opposed to local—
"common good trusts should be subsidised or set up by the Government."
That is the only limitation with which I was dealing, and I thought that the noble Viscount had accepted it. I am sorry if I appeared to be receding from these words of paragraph 69, because that is the last thing I intend to do. I hope that the noble Viscount will take it that at the end of the day these words remain the policy of Her Majesty's Government, and that he will accept my apologies if I did not make that fact clear.
5.59 p.m.
LORD AMWELL: My Lords, before the debate closes, may I be pardoned a slight intervention to clear up a point that arises in my mind? I am a member of the board of management of the largest animal charity in the world. What interests me—and it is this about which I should like some clarity—is the talk about the possibility of the work of a charity coming to an end because there ceases to be any public need for it. The only way in which it will be possible to bring to an end the work of a charity dealing with animals, and giving both medical and surgical aid, is to bring animal welfare under the Welfare State as a social service. The point that I should like made clear is this. Suppose that were to happen—and I think we might consider possibilities at this stage, even though they might not arise for a long time—we must remember that in the case of the Welfare State itself quite a large number of people prefer to go to their own doctors; they do not wish to come under the Welfare State. Large numbers of animal lovers will probably have the same feeling about their animals. What would the position be if it were decided by some authority, local or otherwise, that there was no further need of this charity, although a number of people preferred to be outside any Welfare State arrangement with regard to the general welfare of animals in the country?
THE LORD CHANCELLOR: My Lords, the noble Lord was looking at me while he was speaking, and I want to make it quite clear that nothing that I say relates to any concrete example, because I do not carry the trust deed of any particular example in mind. But on the general approach which has been favoured this afternoon, the result would be that, even if there was a State service, most of us think, irrespective of where we sit in the House, that there is always room for a voluntary service as well which gives the particular approach and state of mind which a voluntary service carries with it. In these circumstances, it is extremely unlikely that a State organisation would contain a prohibition against a voluntary service; and if it did not contain such a statutory prohibition—that is, a prohibition in an Act of Parliament—then no one else is in a position to take any action to prohibit the charitable work. I do not think the noble Lord need let that worry him, because I cannot imagine that any Government of any political flavour would put into an Act a provision of the kind that he described. That is only my prophecy of the future; hut, such as its value is, I hope he will find it consoling.
6.3 p.m.
LORD NATHAN: My Lords, this is the third debate upon charities in ten years and the last, as it seems to me in the light of what has been said by the noble and learned Viscount on the Woolsack, before the Second Reading of a Bill. That is a most satisfactory outcome of this series of debates. I have always felt that the work upon which my Committee have been engaged was interesting, but this evening I feel that it has been thoroughly well worth while. I am sorry that I was unable to hear the whole of the speech of the noble Lord, Lord Hylton, but I have been told what he said, and I think he rather misconstrued what I intended to convey to your Lordships. I hope I made it clear, but if not I will make it clear now, that I was not complaining of the White Paper. I felt that the White Paper went a long way towards meeting the recommendations made by my Committee, and that the points of difference were not so great as to change my mind from a general approbation into the reverse.
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I am glad that the right reverend Prelate, the Lord Bishop of Chelmsford, seized this opportunity of making his maiden speech. He is not merely a dignitary among the Spiritual Peers of your Lordships' House, but he occupies a special responsibility in the Church Assembly for matters connected with the subject of this debate. It is most agreeable to know that he has taken his part in this debate, as doubtless he will again on similar matters.
It has long been the practice in your Lordships' House, certainly during the twenty years that I have been a Member, that no one speaking at the end of a debate raises fresh subjects of controversy. That seems to me to be a sound principle, and I have no intention of infringing it to-day. I am greatly indebted, as all your Lordships will have been, to the noble and learned Viscount on the Woolsack for the enormous amount of interest which he has taken in this subject and the equally great amount of work he has taken upon himself for the purpose of enlightening us as to the intentions of the Government. It was a masterly and exhaustive statement, for which, as I say, I am sure we are all grateful.
For myself, I heard with special interest what he had to say on the future of investments which is, I think, a critical point and is bound to arouse a great deal of public interest, not to say public controversy. If I were asked how I stood to-day with regard to this whole matter, I think I should say to the Lord Chancellor what perhaps at this stage he would most like to hear: that, without prejudice, of course, to what I might wish to say on the Committee stage, I should certainly find myself voting in the Lobby in favour of a Second Reading of the Bill which he adumbrates.
It is going to be a complicated Bill. I do not complain that it should take some time to draft it. I once spoke to one of the Parliamentary draftsmen and asked him how long he thought legislation would take, and he told me that he thought it was most complex and it would take at least three years to draft a Bill. I am much relieved to know that so much progress has been made that we are likely to have such a Bill before us within the next Session of Parliament. I feel so much indebted to the noble and learned Viscount on the Woolsack for what he

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has said, the trouble he has taken and the kind words he has spoken about myself and my colleagues, that I do not know that I can find more adequate words with which to express my appreciation than to say that I hope and believe, in the light of what he has said, that the future will have made it worth while. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

LOCH AWE HYDRO-ELECTRIC SCHEME
6.9 p.m.
LORD CHORLEYrose to ask Her Majesty's Government whether they will take steps to suspend the operation of the North of Scotland Hydro-Electric Board (Construction Scheme No. 28) Confirmation Order. 1959, pending the agreement of a satisfactory scheme for the preservation of the beauties of Ben Cruachan and the neighbourhood. The noble Lord said: My Lords. I beg to ask the Question standing in my name on the Order Paper. I think it would be charitable, in the light of the discussion which has been going on earlier this afternoon, if I could leave it at that; but this is an important matter and I think it requires some explanation. I feel a little diffident, or possibly a little surprised at my hardihood, in broaching a subject concerned with the interests of Scotland, because one appreciates that there is a certain amount of feeling in cases where Sassenachs intervene, and I did delay some time in the hope that one of those Members of your Lordships' House who are sensitive about damage to the beauties of the Highlands would have taken up the matter. There are, of course, many such, and I happen to know that several of those who are most keenly interested are abroad at the moment.
Eventually I decided that, as time was getting on, if the matter were to be debated I had better put down some sort of Motion or Question about it. Indeed, I suggest that the beauties of the West Highlands, which are unsurpassed in any part of the world, are the common heritage, not only of all the peoples of these islands but of humanity as a whole. I myself have had the enormous satisfaction of spending some of the happiest
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hours of my life climbing about in the mountains of the West Highlands, and on the very mountains which are endangered by this scheme. I feel, therefore, that to that extent, at any rate, I am qualified to bring this matter to the attention of your Lordships.
Your Lordships will have observed that I have rather modified the original approach to this matter, in that I have changed what started as a Motion for the annulment of the Order for the Loch Awe scheme into a Question. I did that for various reasons. It was suggested to me that it was not altogether satisfactory to move for the annulment of an important Order of this kind; that it was not altogether satisfactory that that should be done in your Lordships' House. I was not altogether insensitive to that argument. Indeed, I was the more willing to put the matter into the form of a Question so that we might have a discussion, perhaps lively, but based on good will, because, on the whole, the history of the hydro-electric schemes in the Highlands has been one of good will on the part of the authorities towards those who are so sensitive for the protection of natural beauty. It seemed to me that it was right that the Government spokesman should be given an opportunity of representing the Government's views, at any rate before one came to a decision as to whether one would try to get this scheme annulled.
There have been more than one of these schemes in which the arrangements for the protection of the natural beauties of the situation have been very successful. The Glen Affric scheme, for example, while not 100 per cent. successful in safeguarding an exceptionally lovely piece of country, has on the whole been well done. The Loch Tummel scheme was not so well done, and the one on Loch Lomond, the Loch Sloy scheme, has, I am afraid, made a dreadful mess of what were once "the bonny, bonny banks of Loch Lomond". So the record of authority is rather like the curate's egg which was referred to by the noble and learned Viscount on the Woolsack a few moments ago—it is excellent in parts, and not so good in other parts. I could perhaps at this stage express my personal thanks and, I am sure, the thanks of the House, to the noble Lord, Lord Forbes, for having put the photographs and map of the scheme in the Royal Gallery so that we

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might have the opportunity of looking at them this afternoon.
This particular scheme of Loch Awe is really in three independent sections. The section with which I am particularly concerned this evening, and which seems to me to be the one which is a danger to the beauties of the Western Highlands, is the Ben Cruachan section, which provides for the first large-scale pump storage works in Scotland. It is proposed to use the surplus of electricity which is not used up during the night for the purpose of reinforcing the supply of electricity required at the peak period. Therefore the scheme works in this way: electricity is used during the night to pump up water to a high level in one of the corries in Bert Cruachan, where it can be let down during the daytime, when required, in order to make further electricity which can be put into the grid.
These schemes, of course, are not possible except in exceptional parts of the country. We have already discussed one in North Wales, and this particular one, I submit, is highly objectionable because it entails the building of a new reservoir in a particularly fine corrie, perhaps the finest of all the corries of Ben Cruachan, which is certainly one of the finest mountains in all the Western Highlands. This particular corrie provides water for the lovely waterfall, the Falls of Cruachan themselves, and the difficulty is, of course, that as the water is let out of a storage reservoir of this kind by day, the mud and rocks which have been covered up are exposed. It is a particularly desolate sight, and one which anybody who has seen a reservoir which has had the water run out of it must agree is a particularly unpleasant spectacle. That that should occur at this very sensitive part of the Western Highlands seems to me to be altogether deplorable. It is above the Pass of Brander, which is famous in Scottish history, literature and song; and I am sure that all over the world, wherever Scots come together, the Pass of Brander is known, and there must be a good deal of fear lest this superb piece of natural scenery be destroyed in this way.
It is dangerous also because this may well be the forerunner of other schemes in the Western Highlands and in Wales, and possibly in the Lake District and the other beautiful mountainous country of
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England. It is, of course, only in mountainous country with lakes and corries that this type of scheme can be carried through. It is not a question of actually producing any new electricity. All that we are doing is to utilise the electricity which has already been produced. This is not really a hydro-electric scheme in the ordinary way at all. It is not going to produce new electricity, but is simply to use up, perhaps in a more fruitful way, electricity which has already been produced; but the total saving by this sort of scheme is very small indeed. In The Times newspaper of March 31, when there was a discussion of this particular scheme, it was said that schemes of this kind, because of the obvious limitations which the natural conditions place upon them, cannot produce more than a few thousand megawatts.
It seems to me wrong that the enormous social values Which these superbly beautiful places have should be lost far the sake of saving a few thousand megawatts of electricity in this way. Even at the best of times these hydro-electric schemes are not especially fruitful. Production is comparatively small. The total production of all the hydro-electric schemes in the British Isles is only about 2 per cent. of the total electricity that is produced; the remaining 98 per cent., of course, being produced by the steam process from coal. One would think, from all that one has heard about the hydroelectric schemes in the Highlands, that their contribution to the electrical energy produced in the country was very high. That is not so, and it is rather doubtful whether, from the strictly economical point of view, these schemes are really justifiable.
I had an interesting letter from a Member of your Lordships' House who is particularly well qualified to speak on all these scientific problems, the noble Earl, Lord Halsbury, who regretted very much that he could not come this afternoon, to take part in this discussion. I should like to quote a passage from the letter in which he says that the general impression that he gets of many of these Scottish hydro-electric schemes is that they are
"pitiful little contributions which lay waste beautiful scenery without having the slightest effect on the wellbeing of the country as a whole."

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The Kerry Falls, at the end of Loch Maree, were one of the natural beauties of the district. They have been completely ruined to provide what he calls a "pint-sized power station". He goes on:
"As for the devastation at the head of Loch Garry and Loch Quaich, it is exactly as if some hater of God and all His works had let loose the dynamite."
In some other cases I think myself that they have been carried through more successfully and have added to the amenities of the country, and even if here and there they have involved possibly some slight sacrifice of the beauties of the district, we who have worked in this movement for the protection of the natural beauties of the British Isles have been prepared to put up with some sacrifice in order to provide higher standards of living for the people in the Highlands. All that we ask is that these schemes should not be pushed to this sort of extreme, and that superb mountains like Ben Cruachan should not, in effect, be destroyed as a result of the establishment of new reservoirs of this kind which are bound to be eyesores when the water has run out.
My Lords, the British people are a peculiar people. They have the finest natural scenery, or some of the finest natural scenery, in the world. Their culture, from the point of view of their poetry and their painting, has been more dependent on the scenic beauty of their countryside than that, I suppose, of any other of the great artistic nations of the world. They have been prepared from time to time to listen to their great poetical seers like Wordsworth, who fought almost single-handed against the introduction of the railway system in the Lake District, and fought successfully. We honour those of our great men, like Professor Trevelyan, who have devoted years of their lives to the work of the National Trust, by giving him the highest award, the Order of Merit. We confer knighthoods on the secretaries of organisations like the Commons Society and the Council for the Preservation of Rural England. And yet here we are, in the most beautiful and sensitive part of the Western Highlands prepared to desecrate one of the most lovely mountains in the whole of that superbly beautiful district for the sake of a few thousand megawatts of electricity.
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I do hope that, as a result of expressions of opinion in your Lordships' House, this particular part of the scheme, which could be cut out of the scheme without destroying it as a whole, and leaving it in substance, I suggest, very much as it is, might well be cut out. I feel that if your Lordships would indicate to the Authority, by the views expressed in this debate, that you would like to see this done, perhaps we should not have spoken in vain this afternoon in discussing this scheme. I beg to ask the Question on the Order Paper.
6.25 p.m.
THE EARL OF AIRLIE: My Lords, I make no apology for intervening in this debate. My reason for doing so is that I was the unfortunate first Chairman of the North of Scotland Hydro-Electric Board, and therefore I know a little about it. In those days we had a very hot time. There was a great deal of criticism and feelings ran high. I can remember being cut in my own club in Edinburgh because it was thought that I was spoiling the amenities of Scotland. I have since visited the seats of my misdemeanours, and, far from being ashamed of those schemes, I am rather proud. It has given me a good deal of feeling of personal satisfaction to think that, although they do not know who I am, old ladies lift their nightdresses and warm their posteriors before they slip into bed, and I am glad to think that perhaps I have had a hand in warming those posteriors.
I keep closely in touch with the work of the Hydro-Electric Board because I am very jealous of their reputation. I must join issue with the noble Lord who has just spoken. I cannot admit that the country has been desecrated; I do not believe it has. I live there, and I live there in winter quite often, and I know that the comfort that has been brought to many people far outweighs any desecration of the country, which I hope has not spoiled the noble Lord's holiday. I am really rather surprised that, speaking from those Benches, he cannot consider the comfort of the people in general.
LORD CHORLEY: My Lords, the noble Earl must have prepared his speech without listening to what I said, because I particularly said that in a number of those cases they had been successful on the whole.
THE EARL OF AIRLIE: But I am joining issue with that; I think that in most cases they have been successful and they have done a great deal of good. If you are going to cut out the heart of a scheme—I am not on the Board now so I am not speaking with any interest—you are going to undo the good which we are trying to do to look after the people of the country. I am very jealous of the reputation of the Hydro-Electric Board, and they care a great deal about amenity. I can assure the noble Lord that his apprehensions are really groundless. I should like to point out also that there is an Amenity Committee set up under the Act, which looks after all these cases. They have not complained about the desecration of amenity, nor have the Society for the Preservation of Rural Scotland. There are many societies which are watching these cases and they have not grumbled.
I am given to understand that the Amenity Committee watched this matter as closely as ever, and they will continue to do so; there are many permanent officials in that set-up who were there with me and who were brought up most strictly to look after the amenities of the country; and if there is any criticism to be levelled against them I would say that it is that an awful lot of money is spent in maintaining the amenities of the country. I agree that it is right that it should be so, but a great deal of money has been spent in order to preserve these amenities. I feel that the noble Lord's fears are groundless and his apprehensions unnecessary.
6.29 p.m.
THE LORD BISHOP OF SHEFFIELD: My Lords, I think I had better declare an interest as coming from Scotland although I work now in England. I do not wish to enter into debate with the noble Earl who has just spoken, but I should like to raise one or two general matters of policy in regard to this question. We all agree that our country is a really beautiful country. The more one travels about the world the more one realise that there is so much of loveliness here, held in a very small compass. But, with a curious irrationality, the people of this country both cherish and spoil the country. Ever since the Industrial Revolution, large tracts of this country have been despoiled by the industrial pursuits of man. We must ask ourselves
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how far we are going to allow that to proceed.
I have lived and worked all my days in the industrial areas of this country—Clydeside, Tyneside and the West Riding of Yorkshire. On one's travels one sometimes pauses on a ridge and looks over the landscape and tries to picture it as it looked a couple of hundred years ago, before industry was let loose upon it. lt is altogether a rather sad thought. I share the concern of the noble Earl who has just spoken for the welfare of ordinary folk, and I am deeply concerned about the welfare of future generations of our urban population if we are not going to have some kind of controlled policy in regard to the preservation of the rare and natural beauty of our own country. We have been very destructive in the past. I know it is true that many who are responsible for industry to-day have a real concern for the amenities of our country, such as perhaps their predecessors had not; but still, we are liable to take rather short views and look for quick returns, and to hope that future generations will, somehow or other, be able to take care of themselves. I am not so sure that they can. It is very easy to despoil, but it is difficult to restore. I think that nowadays we are faced with a real dilemma with regard to the life of our country.
There is a second thought to which I think we should give more attention. One goes about the Continent of Europe and realises that there are some countries, most of them not as beautiful as our own, where the landscape has proved to be an economic asset of great and fluid value. In these days of international travel on a large and ever-increasing scale, holidays with pay, and so on, we ought to recognise that, for reasons of pleasure and happiness, the beauty of our country is a rare possession. But there is none too much of it. A great deal of it has been destroyed beyond restoration. While I realise that care is taken in regard to hydro-electric schemes, I am inclined to disagree that they enhance the beauty of our country as a whole. If we allow them to spread rather too widely we are going to deprive ourselves of some of our rarest landscapes such as will give pleasure and recreation and spiritual health to future generations yet to come.
I believe, therefore, that we should not think purely economically but also culturally when we ask ourselves what kind

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of policy we are going to adopt in future in regard to what remains of this rare heritage of ours in this country. It is not for me, as an amateur, to plunge into technical and industrial questions, although I have lived in that sort of atmosphere most of my life, but I would ask—and something about which the noble Lord, Lord Chorley, spoke reinforces the question—are these rather expensive schemes for producing a somewhat limited amount of electric power the most fruitful way of spending our resources? I remember not long ago a distinguished Swiss engineer saying to me that the capital cost of producing electricity from water power in this country, or indeed in his own country where there is far more water power, was greater than from the use of coal.
I live and work in a part of the country where we are well aware of the growing recession in the coal industry. I think that the men are beginning to realise that within the next twenty-five, thirty or fifty years atomic energy is going to be the main source of power in this country. Therefore, we have to face the possibility of a big recession in our major basic industry. During this intervening period, cannot we concentrate our policy for increasing electrical power on the use of coal rather than on developing schemes which will bring power to certain points of the country while also, in the long run, doing a great deal to reduce their attractive value to those who come out from urban areas to seek the solace of the country? It is all a question of degree and balance, as I quite understand. It is so easy, I think, for the balance to be tipped on the side of a quick return in terms of production and power, and to lose sight of the long-term view that the preservation of the unique beauty of our unique country has not only a cultural but also an economic value. It is not the economic value to which I ask your Lordships to give most attention in regard to what I am saying, but there is a political as well as a spiritual wisdom in the sentence of the psalmist, which no doubt sprang out of his own personal experiences:
"The mountains shall bring peace and the little hills righteousness to a people."
6.37 p.m.
THE DUKE OF ATHOLL: My Lords, I should like to apologise in advance for the
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fact that one or two of my remarks may not be strictly on the subject as it now stands in the Question of the noble Lord, Lord Chorley, but I believe that this is the only chance that we have to express our views on the Loch Awe Hydro-Electric Scheme and, as probably I drive along that road more often than most of your Lordships, I should like to say a few words on it. First, I should like to say that I know that the North of Scotland Hydro-Electric Board have done all in their power to mitigate the effects of the proposed scheme on the fishing and other amenity interests, by providing a certain amount of compensation water; in fact, I believe that they are going to provide in compensation water almost as great a flow as the flow for two months last summer.
The noble Lord, Lord Chorley, has dealt fully with the effects that the scheme will have on the beauty of what is undoubtedly one of the show pieces of the Highlands. While I agree with him that these effects will certainly be considerable while the scheme is under construction, if other schemes are anything to go by I feel that when it is finally completed its effect on the beauty and amenity of the district will about be cancelled out. I would, however, ask whether it is really a good thing to spend £24½ million on a scheme which will take about eight years to complete—although possibly my noble friend Lord Forbes may not agree with me on that—and which will probably be outdated fairly soon, say twelve years or so after it is finished.
I am fully aware that at the moment atomic power stations can operate only at an even rate, and that therefore what might be described as "boosters" are used during peak periods; and it is intended that the Loch Awe scheme should act as one of these. It seems not improbable, however, that in twenty years' time, such is the march of science, this snag will have been overcome; and before a hydro-electric scheme of this cost can begin to pay it must have a long and useful life. I should have thought, therefore, that it would certainly have been cheaper and quicker, and would have avoided the attendant snags, to build a coal and steam power station of equal capacity. As a sideline, it would also use up some of the surplus coal.
There are other difficulties which I feel might arise with the scheme, particularly

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concerning the road from Dalmally to Oban which runs alongside Loch Awe. At the moment it takes forty minutes to drive from Dalmally to Oban. I have no doubt that when the hydro-electric board have made their diversions and finished their scheme, that journey will also take about forty minutes; but during the period when the dam is under construction they may block the road completely, although they say in the White Paper that they will not. Equally, they said in the White Paper that the Kinlochhoun road would not be affected when they were doing the Loch Quaich scheme, and yet I believe they flooded the old bridge of Quaich several weeks before the new bridge was completed, and Kinlochhoun was therefore completely cut off from the outside world.
I know that many of the hoteliers in Oban are worried about the effect that a partial blockage on the main road would have on trade, particularly during the summer months when it is very crowded with charabancs and other tourist traffic. We should therefore like an assurance from the noble Earl that the Hydro-Electric Board will complete all their road diversions before they start blocking the old road with the lorries and other equipment which they will no doubt need.
To sum up, I believe that if it is not well controlled the scheme will interfere with the one practicable road link between a large part of Argyll and the outside world, and that there will be a diminution, especially during the period of construction, of the beauties of Ben Cruachan and the neighbourhood, although probably this will be great only during the period of construction. This is likely to have a serious effect on the prosperity of the neighbourhood, though again only during the period of construction. The main reason why I am personally slightly doubtful about the wisdom of the scheme is that we are spending this very large sum of money on something which I feel the march of science may well have superseded in fifteen or twenty years' time.
6.45 p.m.
LORD FERRIER: My Lords, to my mind it is possible that the uneasiness about amenities in connection with this scheme, evidenced by the fact that this debate is taking place, may have sprung from the two years or so that have elapsed
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since, I understand, the scheme was first put forward and open to objection. I think it is fair to say that this uneasiness exists and that the problem is a very complex one. We have to face the fact, which I believe is the case, that in the generation of electricity by atomic power inevitably units are generated which have to be either used or wasted in terms of heat; and this pumped storage system is the only known method by which such energy can be conserved. It follows that, in order to get the head required for such a scheme, height is required, so that there must be a mountain involved.
Consequently, my feeling is that while this scheme may be, and probably is, economically necessary, we must at the same time face the fact that there must be some measure of interference with the natural beauties of that part of the Highlands. As I have said before in your Lordships House, I sometimes worry lest the electricity boards charge too much for their off-peak load. If only the boards would face up to the need for supplying off-peak load at lower tariffs, then perhaps energy which otherwise would be wasted, if it is not pumped up to Ben Cruachan, could be sold for pit-pumping, space heating and the like, thus avoiding the necessity for a scheme of this kind.
I do not, however, share the view of the noble Duke that this will be out of date so soon, because the great fact about such a scheme is that once the money is spent the actual cost of operation is low, the original outlay being the heaviest cost. If, then, the matter is to be considered from the two angles of economics and amenity, I personally feel that reasonably we need only ask Her Majesty's Government to give us an assurance that a balance is being preserved between these two matters. We are all grateful to the noble Lord the Minister of State, for providing us with the photographs which are now in the Royal Gallery, and I feel that, as a result of our experience of similar schemes of the North of Scotland Hydro-Electric Board, we can face the future confident that time will conceal many of the scars. The photographs and the map do not show the run of the transmission lines, of course, and we have to accept that some scars may result from the empty reservoir, visualised by the noble Lord, Lord Chorley—although one would have to be fairly active to look down upon that!

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I feel that these amenity matters are sufficiently important to require great care in the alignment and design of power lines where there is to be this large power station in the middle of the Pass of Brander. Careful safeguards are necessary, for whilst, of course, it is economically impossible to put power lines underground (I can safely say that that is beyond contemplation in terms of cost), there will be many connecting links required between power stations. I myself feel that the power line to-day is not really so big a scar on the landscape as the railway was when it was first cut up that very Pass, and I believe that we shall get used to these things as time goes on. I have met people who say they rather like the look of these power lines. I cannot quite believe that, but I call to mind an occasion where an objection was taken, on the ground of amenity, to a power line in the neighbourhood of Hadrian's Wall. Counsel pointed out that it was possible that in about the year 200 A.D. the inhabitants of North Britain had had their own views about Hadrian building his wall, which might have led to some interference with the amenities of the neighbourhood.
I believe that we shall get more used to power lines, but perhaps the noble Lord who is to reply will be able to assure us that every possible step is being taken, and will be taken, to safeguard the alignment of the lines involved and to put them underground where it is possible; and also as regards the design of the pylons. It has to be remembered that, as the years go by, new materials, lighter structures, become possible; and it is conceivable that the type of tower which I understand is accepted throughout the length and breadth of Britain, and is applicable to this part of the country, might quite reasonably, and without additional cost—provided that the design is carefully studied—be altered in order to produce a type of tower which is less offensive (if that is the right word) to the eye.
In other words, my Lords, my contribution to the debate is rather along the lines of the observations with which the noble Duke, the Duke of Atholl, ended his remarks. Perhaps all we can ask at this stage is that an assurance should be given to us, as I am sure it will be, that every possible step will be taken to secure
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the beautification, as far as possible, of all the works, including the power lines. One last point. It seems to me, looking at the photographs, that it might be possible to improve the appearance of the works in the Pass of Brander if the barrage were to be placed nearer to the outlet from the Loch. I know that that would have an effect which the owners of the fishing rights would appreciate, though I shall not be surprised if the noble Lord tells me that the cost would be quite out of the question. That is all I have to say, and I look forward to hearing the noble Lord the Minister speak on the subject.
6.53 p.m.
LORD STRATHCLYDE: My Lords, it is always very pleasant to me, as I am sure it is to other noble Lords who have had the good fortune to be born in Scotland and to be natives of that country, when other noble Lords not so blessed show an interest in our affairs. Therefore, I am grateful to the noble Lord, Lord Chorley, for having introduced this subject. The noble Lord has expressed just the same fears as have been expressed on so many occasions in connection with the schemes of the North of Scotland Hydro-Electric Board. I remember very vividly indeed, when the noble Earl, Lord Airlie, was the chairman of the Board, being approached by the Member for Kinross and West Perthshire in another place who told me about the great anxieties that existed as to the beauties of Pitlochry, which were going to be ruined by some nefarious scheme for which the noble Earl was responsible. We prayed against the scheme, and we spoke very sharply on the subject. Two years later my friend came to me and said how very sorry he was that he had induced me to enter into the debate, because he had since discovered that the amenities of Pitlochry had been much improved by the work of the Hydro-Electric Board performed in that vicinity. I have been there many times and I entirely agree.
I was glad that the noble Lord, Lord Chorley, said that in some cases the actual beauty of the scenery had been improved by the work. It is certainly true—
LORD CHORLEY: My Lords, I do not think I said that. I said that the

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Glen Affric scheme, while not 100 percent. successful in this respect, had, on the whole, safeguarded the position. I do not think I said it made the scenery better.
LORD STRATHCLYDE: My Lords, then the noble Lord and I differ. I apologise to the noble Lord if I misinterpreted what he said. I visited Glen Affric before any scheme was started; I visited it while a scheme was under way, and later; and certainly, to my mind, the scenery has in no way suffered, and indeed has benefited, from the work done there. I have had the opportunity during recent years to visit many of the schemes of the Hydro-Electric Board, and I have yet to find one which has in any way been detrimental to the beauties and the scenery in which they are situated. Indeed, many of them have added to the interest of the scenery and have in no way detracted from its natural beauty.
I was rather surprised by some of the remarks made by the noble Lord, Lord Chorley. He told us about this corrie in Ben Cruachan. I have lived for months at a time under the shadow of Ben Cruachan, and I have climbed the mountain. I would agree with him that if you have a great deal of water running away it does not leave a very nice spectacle, but when one considers the matter from every point of view, I wonder how many people in any year visit that corrie? Very few, I should say. As for doing anything whatsoever to spoil the beauty of the Pass of Brander, I do not understand how that would arise. I do not know whether the noble Lord has looked at the photographs. If he has, he will find difficulty in informing me how that would happen.
The noble Lord said one thing that certainly astonished me. He said that the hydro-schemes had not been fruitful—he was referring, of course, to the amount of electricity produced. But, really, coming from those Benches, a remark of that kind, which seemed to exclude altogether the benefit which has accrued to the people of the Highlands as a result of the Hydro-Electric Board's schemes, was very surprising. There are thousands of people in the Highlands to-day, I would tell the noble Lord, who are grateful to the Hydro Board for what they have done for them. And let me remind him of another thing.
LORD CHORLEY: My Lords—
LORD STRATHCLYDE: Will the noble Lord allow me to continue? I would remind him that it is not only to produce electricity that the Hydro Board was set up, but to do for the amenities of the Highlands, for the welfare of the people, what could not be done otherwise; and in that it has succeeded to a very great extent. Now the noble Lord may care to speak.
LORD CHORLEY: My Lords, I think that the noble Lord misunderstood what I said. I said that these hydro-electric schemes were not economically very suecessful, and that the electricity costs more and is much more difficult to produce than if it were produced from coal. But I said that we in the amenities movement had been prepared to put up with a certain amount of extra expense and a certain amount of damage to scenery because it did help the standard of living of people in the Highlands. I thought I made that clear.
LORD STRATHCLYDE: My Lords, so far as I know the noble Lord is incorrect in his facts. So far as I am aware (perhaps the noble Lord who is to reply will inform us whether I am correct), the generation of electricity by hydro-electric power is cheaper than that produced by the most modern steam station in the country at the present day. I believe that to be true, and no doubt my noble friend Lord Forbes will be able to say whether or not I am correct.
The right reverend Prelate really did not speak to the subject of the Question at all. He spoke generally as to the destruction of interests, amenities and beauty, particularly in urban areas—and on that point I would entirely agree with him. But that does not refer to the Hydro-Electric Board and the work they have done. I am grateful to the noble Lord, Lord Chorley, for the opportunity of speaking on this Question. I feel it gives me a chance to pay credit to the Board for the extraordinary care they have taken in safeguarding the beauties and amenities in the country, and I am glad to pay my tribute to them. Before I sit down, I wonder whether I might ask my noble friend Lord Forbes whether he could tell us just how many objections have been lodged, on amenity grounds, to this Loch Awe scheme.
6.59 p.m.
LORD GREENHILL: My Lords, I hope that the noble Lord, Lard Forbes, will allow me to express a personal view without committing any of my colleagues in this matter. Like many other noble Lords, I feel very strongly about this matter. I do not forget the work which has been put in by the noble Earl, Lord Airlie; or the work which has been put in by Mr. Tom Johnston; or the work which may be put in by the noble Lord, Lord Strathclyde, now that he has taken upon himself the chairmanship of the hydro-electric undertaking. At the same time, I am also aware that a case can be made out for the expansion of electrical energy by some of these new schemes.
In spite of all that, one has the feeling that perhaps we are overdoing things these days in the way of the generation of electricity, in the belief that if we give electrical energy to the people of the Highlands we are thereby raising their standard of living. To a certain extent, but only to a certain extent, that may be true. It is true that a great many houses now have electric light where formerly they had none. It is also true that some of the electricity is being used for industrial purposes. But I am bound to say, if I may express my personal view, that I view with horror the sight of a lovely piece of our country being spoilt. For example, travelling from Helensburgh to Fort William, one sees those awful scars along Loch Trieg which have been there for too many years and which have not yet been covered. Even on the assumption that there may be some commercial advantage from the generation of the power, I say: is it worth while to despoil the beauty of our country by these undertakings? I have the feeling, unfortunately, that this division of opinion exists between those who, if I may say so, perhaps unkindly, are the commercial Philistines to-day and that rather large minority who have a sensitivity about beauty which apparently a large number of people do not possess.
I do not deny the advantages which come from cheap power. I am not so sure that the consumers of electricity in Scotland, or in the Highlands, are getting their power at so reasonable a rate as to justify the adoption of its use to a much greater extent than now: but, apart altogether from that, must we emphasise the need for these things solely
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on economic or commercial lines? Is there not something which we ought to be prepared to sacrifice in order to retain some of these irreplaceable beauties which we still have in Scotland and which, unfortunately, are being reduced at an increasing rate? It may be that we have already gone too far in our commitments to withdraw from these particular ventures or projects; but I still say that, in spite of all that the Hydro-Electric Board has done to reproduce—I will not say "preserve"—amenities in its operations, the fact still remains that Scotland, and the Highlands in particular, is being defaced by these attempts to modernise the country in the interests of a so-called progressive outlook.
LORD STRATHCLYDE: My Lords, may I ask the noble Lord one question? Has the noble Lord seen the new Barony Pit near Cumnock, and the other new pit at Killoch in Ayrshire, both sunk to produce coal which will eventually produce electricity; and does his heart not bleed for that beautiful part of Ayrshire which is being destroyed, when he compares it with the way that the Hydro-Electric Board has been able to preserve the beauties of the country?
LORD GREENHILL: I should express the same regret at the defacement of our country by these unsightly mounds as I do about this particular hydro-electric scheme.
THE EARL OF AIRLIE: My Lords, before the noble Lord resumes, could I ask him a question? I always listen to what he says with the greatest interest. If you go to Loch Lomond now, is it not true that you will find there a mass of speedboats, and the like, and that it is almost like Blackpool; and is not that as bad as anything else put there by the Hydro-Electric Board?
LORD GREENHILL: I agree, my Lords, and if it were possible to do away with these destructions of the amenities of our country I would certainly lend my own efforts to see that they were stopped. The trouble is that we have far too many of these activities which are spoiling our country; and I, for one, hope that public opinion will rouse itself to see that even projects of this kind, which have a value, are not proceeded with at the pace at which they are being proceeded with to-day.
THE EARL OF AIRLIE: My Lords, I do not want to interrupt continually, but I think sight has been lost of why this Board was set up. It was set up to develop areas which otherwise would not reap the benefit of electricity—the Outer Islands and the far-flung districts. That is why it was set up; and it has undoubtedly brought amenities to people who would otherwise not have been able to receive them.
LORD GREENHILL: I would not pretend to deny what the original aims of the promoters of this scheme were, but what I am certain of, and what I think cannot be denied, is that, in their intention to do good to the people of the Highlands, they are destroying an irreplaceable and most valuable asset. That is my point, my Lords. These enthusiastic contractors, who admittedly are trying to assuage the fears of a great many people, are nevertheless doing considerable harm to the beauties of Scotland by these measures, and I, for one, hope that the people of the country will see that some restraint is exercised in these so-called progressive activities.
7.7 p.m
LORD AUCKLAND: My Lords, I wonder whether I may be permitted to intervene briefly in this debate. I have spent many years of my life in Perthshire. I rarely visit there now, but I did holiday there last summer. I had occasion to visit Pitlochry Dam, which has been mentioned in this debate, and I can say that it is not only a very fine piece of engineering but it has enhanced the prosperity of that particular area tremendously. Pitlochry is now, I would say, one of the most important tourist centres in Scotland, and the number of people who visit that dam is enormous. The dam itself was heavily criticised. It meant the flooding of the surrounding estate, but the panorama has increased in beauty. I visited the Loch before this dam was erected and after it was erected, and, to my mind—and I am very jealous of Scotland's beauties—the beauty of the whole area has been tremendously enhanced.
There is just one other point I should like to raise in connection with the White Paper on the Constructional Scheme No. 28. Section D in the additional recommendation says:
"The Board shall pay for such traditional Watchers as may be required during and after
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the construction of the works, and shall provide suitable accommodation for them."
I would ask the noble Lord whether he can say how many watchers will be, needed, what their duties will be, and how they will be housed. It seems to me that temporary housing on a large scheme can blot the landscape far more than the scheme itself. I think that your Lordships' House should be assured that these houses will be built with deference to the scenic nature of the neighbourhood and bearing in mind that something like five men operate the whole of the Pitlochry scheme, both technically and in guarding the plant. Finally, I should like to say that the Scottish Hydro-Electric Board, despite all the criticisms which have been levelled against them, have performed a job of which Britain and the world can be proud.
7.11 p.m.
LORD WOLVERTON: My Lords, I wish to intervene for only two moments because for about five days sat on the Select Committee of this House on the Blaenau Festiniog scheme in North Wales, which was the first pumped water scheme in this country. This is entirely new to this country, although such schemes have been in operation for some time in Switzerland. The water runs down from the top reservoir during the day and is pumped up at night time with the surplus power from the atomic or coal station, and it has been proved conclusively that it saves a great deal of capital in our not having to build another station, in view of the short peak period in this country during the day-time.
Neither in North Wales nor in Scotland are the mountains very high, and therefore the pressure of water is not great, and such a scheme uses a large volume which otherwise would run out to sea and not be used again. On the North Wales scheme, we went into the question of amenity at great length, because this scheme is very near the Snowdonia National Park, We were satisfied that the top reservoir did not completely drain into the lower one during the day, although the level was lowered a good deal, and the pumping plant was placed in such a position that it could not be seen very much. I have not seen the area of the Ben Cruachan scheme, but I do not think that it is likely to do much damage to the surrounding amenities. It

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is important that we should get as much power as we possibly can, and water power runs a little cheaper than coal power, even to-day, allowing for the pretty high price of coal. This scheme is important for Scotland, because the availability of electric power has given tremendous benefit to the Highlanders and also to the important industrial belt in the Glasgow area and the South West.
7.14 p.m.
LORD FORBES: My Lords, many noble Lords have spoken at considerable length on this subject, so perhaps your Lordships will forgive me if I go into the matter fairly fully. A short time ago we were discussing deer in Scotland. I think that if your Lordships shoot as wide of the mark at deer as you have been shooting at the Loch Awe scheme, the deer in Scotland have a very good chance in future. I am glad to be able to answer the noble Lord, Lord Chorley, who straight away began belittling the Loch Awe scheme. I really could not follow him when he said that this scheme, which is going to produce 12 per cent. of Scotland's electricity, is a small scheme.
I am sure your Lordships are already aware that very great care is given to the preparation and consideration of all hydroelectric schemes. That is as it should be. Your Lordships will also appreciate that with almost any hydro-electric scheme there are bound to be conflicting interests. On the one hand, it is plain that we cannot have hydro-electric schemes at all without disturbing the natural topography to some extent; and that to many people is essentially disquieting because, quite rightly, they have, as I myself have, a deep-rooted affection for the natural beauty of our land and wish to preserve it. On the other hand, hydro-electric schemes are an extremely important means of providing the power on which our economy depends. That is why the procedure through which these schemes have to go has been designed to ensure the fullest consideration of all aspects, together with the views of all the interests concerned; and, as I shall show, special obligations are placed on the Board for the preservation of the beauty of the scenery.
The procedure laid down by the Hydro-Electric Development Act of 1943 is, I consider, quite exacting. Perhaps your Lordships would like me to give you a
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short account of this procedure. I believe that it may allay some of the fears that were in the mind of the right reverend Prelate.
First of all, each scheme must be published, with its relevant plans and sections, and made available for public inspection. From then on, for a period of up to forty days, objections may be lodged with the Secretary of State. An objector may ask for a public inquiry, and if he does so the Secretary of State must grant his request, unless the objection is withdrawn or is a frivolous one. When the Secretary of State finally decides, after an inquiry if need be, that the scheme should be confirmed, it must then lie before both Houses of Parliament for yet another period of forty days, and during that time it may be annulled by a Prayer in either House. Incidentally, the forty days expire to-day. Your Lordships will appreciate, therefore, that there are many opportunities for the public to criticise these schemes and for their objections to be heard and considered.
In addition to all this, the Scottish Electricity Boards, in preparing hydroelectric schemes, have a special responsibility as regards amenity. Section 9 of the 1943 Act places on the Board an obligation to
"have regard to the desirability of preserving the beauty of the scenery and any object of architectural or historic interest."
To assist them in carrying out this duty a special Committee exists for dealing with amenity questions. It is set up under Statute and is composed of independent members appointed by the Secretary of State. The Board are obliged to consult the Committee before and during the preparation of any constructional scheme. In addition, of course, the Board may consult it at any other time, and frequently do. The Committee advises not only the Board but also the Secretary of State, and, furthermore, its recommendations are before the Secretary of State when he considers whether any scheme should be confirmed. A similar Committee advises the Board and the Secretary of State on fisheries matters. If a public inquiry is held, it is the Secretary of State's practice to make the recommendations of both Committees available at the inquiry.
The Loch Awe scheme was published by the Board on July 17, 1957. No objections on amenity grounds were

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received. My noble friend Lord Strathclyde asked whether there had been any objections. The answer is that there were none. Any other matters that were raised were withdrawn after negotiations. On the amenity side, the Amenity Committee did not object to the scheme in principle but made certain recommendations on points of detail. Some of these the Board were able to meet, and of course they will continue to consult the Committee at further stages. The Committee did not, however, find any fault with the scheme on the grounds that have been suggested.
I should also point out, as has already been mentioned by my noble friend Lord Airlie, that during the course of this procedure the Board provided information for the Further enlightenment of, among otters, the Association for the Preservation of Rural Scotland, the Scottish Rights of Way Society and the County Council of Argyll. Incidentally, the National Trust for Scotland did not ask for any information beyond what was publicly available. From this I would conclude that none of these bodies share the fears which have been expressed by the noble Lord, Lord Chorley.
Having recently myself visited the Loch Awe area, and discussed the scheme, I can safely say that the fears which have been expressed about the Cruachan works will not be realised. The noble Lord, Lord Chorley, suggested that we might cut out the Cruachan part of the scheme. I do not think the noble Lord realises that this is the major part of the scheme. The Cruachan part of the scheme will produce 400 million units a year; the Nant part of the scheme 27 million units, and the Inverawe part 100 million units.
The noble Duke, the Duke of Atholl, asked me about the completion date. The Inverawe section is due to be completed in 1962, and the whole scheme is due for completion in 1966. The noble Duke also asked me about road diversions, and I can give him an assurance that the road diversions will be made before there is any interference with the existing road. I was in Oban the other day, and I gave that very assurance to the local hoteliers' association. Then the noble Duke wanted to know about the economics of the scheme, in view of nuclear power. We cannot tell, of course, exactly what will happen in twenty years' time, but at present nuclear power stations cannot be
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used economically for peak-load periods. What we want is power available in 1965.
The noble Lord, Lord Chorley, said that the hydro-electric contribution to our electricity supplies was pitifully small; I think he suggested 2 per cent. That is not as I understand the position. In the North of Scotland the hydro-electric generation provides the greater part of electricity used—in fact, 80 per cent. At the same time, it produces electricity more cheaply than it could be produced otherwise, and at a profit, which enables the supplies to be distributed to other parts of the North of Scotland; that is, to the uneconomic schemes that are still left to be done in the North of Scotland.
The noble Lord, Lord Ferrier, asked me to give an assurance about power lines. I cannot go far into that matter, because power lines do not come into the scheme, but I can give the noble Lord an assurance that the Hydro-Electric Board will make every effort, in consultation with the Amenity Committee, to secure an acceptable route for the transmission lines. I can also give an assurance that they are, in. fact, preparing to discuss this matter with the planning authorities now. The noble Lord also expressed some concern about the barrage which is to be set up at the end of the Loch. The Amenity Committee and the Hydro-Electric Board recommended that the Board should consider, if the cost was not excessive, whether the weir over the River Awe could be moved upstream by about half a mile. For technical and financial reasons, the Board were unable to accept this suggestion.
The reasons were as follows. First, the barrage must be of sufficient width and height to allow large volumes of water to get away quickly in times of flood. If the barrage were moved upstream, it would be narrower and, in consequence, would have to be made much higher or deeper. The bed of the river prevents its being made deeper, and it must not be made higher because the level of the Loch has to be kept within narrow limits. The disposal of flood water would thus be very difficult. Moving the barrage half a mile upstream would add considerably to the length and to the cost of the tunnel. The tunnel costs about £180 a foot, and that would mean adding to the cost something like £475,000. As stated in the Explanatory Memorandum on the

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scheme, my right honourable friend the Secretary of State accepted that, for these reasons, it would be impracticable to site the weir upstream.
Over the roads I travelled in the area the sites of these works high up on the mountainside will be most inconspicuous and visible only from one or two rare vantage points. I therefore believe that this part of the scheme will prove as innocuous as similar works which have been carried out by the Board on Ben Lawers, Ben Vorlich and so on. For example, from the main road between Dalmally and the pass of Brander nothing of the Cruachan works will be seen. Even the main generating station will be underground and will be fed by tunnels, not by pipes on the surface.
I can give every assurance to climbers, including the noble Lord, Lord Chorley, that they need have no cause for alarm, as the steep-sided reservoir on Cruachan will not empty daily. The only persons who might have some cause for alarm about the dam are the skiers who cannot stop when they get to it. This dam holds about one and a half weeks' supply, and when the station is working at full capacity in the winter months the maximum drawdown during a heavy week will not empty the reservoir but will reduce the loch surface area only by about 50 per cent. This is no worse than occurs from time to time at Loch Sloy, which I know is enjoyed by many visitors and climbers.
I believe, that, as my noble friend Lord Airlie said, it is widely felt that the Board's record in these matters of amenity is a good one. I know that they have gone to considerable trouble to avoid any grounds of criticism, and I think that their efforts have met with conspicuous success. Perhaps I might mention two examples. It will be remembered that one of their first schemes, the Tummel-Garry scheme, was criticised because of the harm it might do to the amenity of Pitlochry. But in practice, as my noble friends Lord Strathclyde and Lord Auckland have pointed out, the contrary has proved true, and the Board's reservoir at Pitlochry and the fish-pass associated with it are regarded as an additional attraction to tourists. The same fears were expressed about Glen Affric; but there again the Board have, in fact, enhanced the area by opening it up to visitors. I can therefore assure noble
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Lords, from a personal investigation of the site, that I see no reason to fear for the beauties of Loch Awe and Cruachan. As I have explained, the Board will continue to consult the Amenity Committee as the scheme proceeds. This is the procedure that Statute envisages for the preservation of amenities. Experience has shown that it works well, and I do not think there is any justification to hold up the scheme for further consideration on that account.
I should point out that the Scottish sales of electricity increased by 64 per cent, in the seven years to 1957, while the peak demand advanced by 71 per cent, in that period. Now there is nothing to suggest that this progress will not continue, and the Scottish Boards expect that by the end of 1964 the peak demand will be some 69 per cent. more than in 1957, and will total 3,250 megawatts, of which the Awe scheme will supply 450 megawatts; that is to say, 12 per cent. of the total Scottish demand, or 34 per cent. of the additional capacity that the Boards expect they will have to provide in the next five years.
The right reverend Prelate the Bishop of Sheffield and the noble Lord, Lord Strathclyde, had some observations on the economics of the scheme, so perhaps I could briefly go into how the economics of the Loch Awe scheme are going to work. One of the features of conventional hydro-electric work is, of course, their high initial cost per kilowatt of capacity installed, though this is compensated for by the lower running costs of hydro-generating plant compared with those of steam generating plant. But when, as in the present instance, the hydro-electric works are used in the form of a pump-storage scheme, the capital cost per kilowatt installed can actually be lower than those of nuclear or coal fired stations. The figures given in the Explanatory Memorandum are £44 per kilowatt installed at Cruachan, which includes an allowance for transmission cost and between £50 and £55 for a new steam station of the kind being erected in the South of Scotland. The running costs are higher than in a conventional station. For the power required, the pumping has to be paid for, and some of the power is lost in the process. But the electricity used for pumping will be cheap, because it will come from plant

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which would otherwise be idle. The pump storage scheme therefore makes fuller use of existing steam or nuclear plant, and that in itself is an advantage.
The net result, however, is that the peak-load power, which is always the most expensive kind of power to produce, can be provided by a suitable pump storage unit more cheaply than it could be provided by a new steam or nuclear station—and that would be the alternative. The Explanatory Memorandum goes into the details of the cost, and shows that the pump storage part of the scheme is estimated to show a saving of ·2d. per unit over the cost of production for the same load factor by a new steam station. The conventional hydro-electric part of the scheme—that is to say, in particular the Nant and Inverawe sections—shows a saving of ·4d. per unit compared with costs at a steam station of corresponding capacity. This margin of profit, part of which, of course, will be shared by the South Scotland Electricity Board, enables the North of Scotland Electricity Board to finance their uneconomic schemes, particularly the schemes in the North of Scotland. So it can be seen that economic and profitable generating schemes like the Awe scheme are essential if the Board's policy of bringing electricity to the remoter areas is to be completed.
I am sure your Lordships would not wish me to sit down without paying a tribute to the Chairman of the North of Scotland Hydro-Electric Board, the right honourable Thomas Johnston, who is shortly to lay down the office in which he has now
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served for over thirteen years. Mr. Johnston, on succeeding the first Chairman of the Board (my noble friend Lord Airlie, who had the task of starting the Board on its great work), has been responsible for carrying out the design that he himself planned. Under his chairman-ship the Board has acquired a high reputation, not least for the care it has taken to preserve amenities. I am glad to say that Mr. Johnston will not sever his connection with the Board after this summer, for at their request and with the approval of my right honourable friend the Secretary of State, he will continue his efforts in conjunction with the Board to attract industries to the Board's district. I am sure your Lordships will wish him well in this work, and will at the same time wish every success to the new Chairman, the noble Lord, Lord Strathclyde.
LORD CHORLEY: My Lords, I have no right to reply, but I would, I am sure, be expressing the views of your Lordships if I were to thank the noble Lord for the great care which he has obviously put into his detailed explanation of the scheme.

LICENSING (SCOTLAND) BILL [H.L.]
Reported from the Joint Committee on Consolidation Bills, with Amendments, and committed to a Committee of the Whole House.
House adjourned at twenty four minutes before eight o'clock.