Sitting of 26 January 1961

Preamble
The House met at Half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Apple Crop
    Mr. Stonehouseasked the Minister of Agriculture. Fisheries and Food if he will state the approximate size of the domestic apple crop this year, the percentage of this crop absorbed into the home market and the average retail price.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. W. M. F. Vane): We now estimate the 1960 dessert apple crop in England and Wales at a record 320,000 tons and the cooking apple crop at 346,000 tons. Estimates of marketings of the home crop can only be very approximate, but we reckon that about two-thirds of the crop had been sold by the end of December. It is impossible to give any worthwhile estimate of the average retail price of home-grown apples.
    Mr. Stonehouse: Does not that reply reveal the danger of a shocking waste of this crop? What are the Ministry doing about improving the distribution of the crop at a lower retail price? In particular, what assistance is the Minister's Department giving in research into improving the storage of the fruit?
    Mr. Vane: Research is looked after by the Agricultural Research Council's laboratory at Ditton and is continuing. Under the horticultural improvement scheme, opportunities have been given bath to individuals and to co-operative marketing groups to extend common facilities to members, including storage, which is important. In all marketing
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    problems the Department is naturally interested in helping those who will help themselves, which in a crop like this would clearly work out in the interests of both the consumer and the producer.
    Mr. J. Wells: Is the Minister aware of the increasing demand among the apple-growing sections of the industry for a new marketing scheme and a new marketing board? Can he give any assurance about definite assistance towards helping the growers in their problems of grading and co-operative marketing?
    Mr. Vane: We are indeed aware of the interest among growers, and the Government are always ready to consider schemes submitted under the Agricultural Marketing Acts. There is, however, a prescribed procedure for this, and it would be wrong of me to Say anything which would anticipate that procedure.

    Urban Zoos (Importation of Animals)
    Sir B. Jannerasked the Minister of Agriculture, Fisheries and Food how many standing orders he has made since June, 1960, for urban zoos in respect of the importation of animals and what was the cost of preparing, printing, and issuing the order of 2nd December, authorising the landing of one sitatunga, six Maxwell duikers, and a red river hog.
    Mr. Vane: No standing orders for urban zoos have been made since June, 1960. The cost of the Order of 2nd December, which was not made for an urban zoo, was about £14.
    Sir B. Janner: Does not the Minister think that it is time that he had something in the nature of a letter, or something of that kind, to deal with the situation, instead of wasting money? Can he tell the House whether he thinks that the Orders which have been made in respect of the following animals—kudu, kob, huanaco, guacharo, nylghaw. gerenuk and lechwe—have been understood by any Member of the House other than those who take a special interest in the subject? Does he realise that probably I am the only person in the House who looks at these Orders, and that I do so with the purpose of seeing that it should not be a waste of money?
    Mr. Vane: These are very important animals. [HON. MEMBERS: "What are they?" I The hon. Member realises the importance of guarding against the introduction of disease, and that is the basis of this system of control. I do not like to disappoint the hon. Member, from the point of view of his not being able to ask these Questions in the future, but we are considering whether it is possible to make a general Standing Order to cover all importations of animals for recognised zoological collections. There were difficulties in the way, but we think that they can be overcome.
    Sir B. Janner: In view of the satisfactory nature of the reply, I do not propose to raise the matter on the Adjournment.

    Shell Fishermen, Porthleven
    Mr. Haymanasked the Minister of Agriculture, Fisheries and Food whether he is aware of the losses caused to shell fishermen of Porthleven by the action of Her Majesty's Government in prohibiting fishing in a specified area of Mounts Bay in June, 1960; what he proposes to do to secure full indemnity for these fishermen; and what action he will take to prevent such losses in future.
    The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): Yes, Sir. The Admiralty has agreed to settle the fishermen's claim for damage to gear caused by Her Majesty's ships, but I am afraid that those for loss of earnings could not be admitted. Naval exercises inside territorial waters or in known fishing grounds are discussed beforehand with local interests, particularly the fishermen, in order to ensure that the least possible damage and inconvenience is caused. This procedure was followed in this case.
    Mr. Hayman: Will the Minister bear in mind that the Cornwall Sea Fisheries Committee considers this attitude of the Admiralty, and indeed of himself, to be very retrograde, because nothing is being paid for loss of earnings, and indeed only two claims for damage for lost gear have been allowed and in each case the amount claimed has been drastically reduced? Will he consider this again with the Admiralty and stand up to the Admiralty for the benefit of the fishermen?
    Mr. Soames: We supported the fishermen's claims to the Admiralty for loss of gear. The position on the other aspect, loss of earnings, is well understood, and it has been going on for a long time. Her Majesty's ships have to do their exercises in home waters, and when they do we take full steps to ensure that the least possible inconvenience is caused.
    Mr. G. R. Howard: Is my right hon. Friend aware that this matter has been raised previously with regard to compensation? Is it a fact that the Admiralty has cut down the compensation claims by 50 per cent. in each case?
    Mr. Soames: I am afraid I cannot give an answer to that supplementary question without notice. I will certainly look into it.
    Mr. Hayman: On a point of order. I give notice that I will raise this matter on the Adjournment at the first opportunity, because I consider the Minister's attitude and the Admiralty's attitude completely unsatisfactory.
    Mr. Speaker: I must ask hon. Members to adhere to the traditional formula.

    New Fishing Vessels (Loans and Grants)
    Mr. Croslandasked the Minister of Agriculture, Fisheries and Food what steps he is taking to replenish the funds available to the White Fish Authority for loans and grants for the construction of new fishing vessels.
    Mr. Soames: An Order to increase by £2 million the funds available for grants is awaiting approval by the House, and a Bill which will increase the limit on loans by £5 million has been presented and will shortly be discussed.
    Mr. Crosland: Whilst thanking the Minister for both the Bill and the Order, may I ask him whether in future he will try to avoid the awkward interval which occurred between the White Fish Authority finding out about it and the new Bill, as this created a great deal of uncertainty about the industry's building plans?
    Mr. Soames: As soon as the Authority came to us we put the necessary legislation in hand but, as the hon. Member knows, it takes some time to prepare legislation.

    Grand National (Russian Horses)
    Mr. E. Johnsonasked the Minister of Agriculture, Fisheries and Food why, and under what regulations, horses cannot be imported from Russia to race in this country; whether these regulations apply to the whole of the Union of Soviet Socialist Republics; and if he will review them to see if they are still necessary.
    Mr. Doddsasked the Minister of Agriculture, Fisheries and Food what is the nature of the difficulties which prevent his Department agreeing to Russian horses competing in this year's Grand National at Aintree; what discussions have taken place on the matter between his Department and the interests concerned; what advice has been given; and if he will state the evidence available to his Department concerning the incidence of horse sickness in Russia.
    Mr. Soames: The Order which was made last September under the Diseases of Animals Act, 1950, prohibits the importation into Great Britain of horses from a number of countries, including the U.S.S.R. The advice at that time of an international organisation concerned 'with animal diseases was that these countries either had African horse sickness within their borders or were dangerously close to affected countries.
    An international meeting was held last week to review developments and consider future policy. As a result of the further information given at this meeting, the Secretary of State and I are advised that the situation in the U.S.S.R. and the countries immediately bordering it does not justify continuing the prohibition on the importation of horses from the U.S.S.R. An amending Order, will, therefore, be made removing the U.S.S.R. from the list of prohibited countries. The prohibition will be replaced by a procedure under which the U.S.S.R. Government, or any other Government from whose country we import horses, will be required to certify that the particular horses and the premises from which they come are disease free, and that African horse sickness has not existed in the country concerned for at least twelve months.
    Mr. Johnson: Is my right hon. Friend aware that that Answer will give general satisfaction? It is all the more welcome
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    because Russian horses have already been run in the United States. Further, does he not agree that visits of racehorses to other countries do more to promote good international relations than do visits of politicans?
    Mr. Soames: I am all for horses coming from other countries to participate in races and such like in the country. On the other hand, this is a very serious disease. It could be catastrophic to the bloodstook industry if it ever came here. We must make sure that full protection is given.
    Mr. Dodds: Is the right hon. Gentleman aware that there are many people who are rather puzzled about all the fuss that was made, until the meeting last week? France and America welcomed Russian horses long before this meeting. Why is it that we seem to be trying to create an iron curtain against Russian horses? Is the right hon. Gentleman interested to know that a knowledgeable gentleman has written asking me to recommend to him that he should put £1 each way on the Russian horse "Epigraff."
    Mr. Soames: There is absolutely no question of creating an iron curtain. Last summer this disease was very rife and spreading very rapidly. It had spread well outside the Middle East countries and into countries bordering Russia, particularly Iran and Afghanistan. On requesting advice from the international organisation, we were told that Russia was among those countries to which there was a danger of it spreading. In fact it did not reach Russia.

    Fleck Committee (Report)
    Mr. Croslandasked the Minister of Agriculture, Fisheries and Food what steps he proposes to take to implement the recommendations of the Fleck Report.
    Mr. Wallasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the Fleck Report.
    Mr. Hector Hughesasked the Minister of Agriculture, Fisheries and Food if he is aware of the extensive unemployment in the trawler building industry, and the important contribution which the Fleck Report can make to the

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    problems of unemployment and shipbuilding especially in Aberdeen; and if he will take urgent steps to implement the relevant recommendations of that Report.
    Mr. Soames: I should like to take this opportunity of thanking Sir Alexander Fleck and the members of his Committee for the valuable and lucid Report that they have produced.
    My colleagues and I are studying it and have asked the organisations concerned to submit their comments on it as soon as possible. These will be considered and we will be having discussions with the industry. I expect to be able to make a statement in the summer.
    Mr. Hughes: Does not the Minister think that so authoritative and constructive a Report as the Fleck Report should have immediate attention, especially in view of the unemployment in the shipyards and the needs of the fishing industry? Will the Minister take those observations into account with a view to having the Report implemented at a very early date?
    Mr. Soames: Yes, indeed. The Committee took three years to produce its detailed and very valuable Report, and I am anxious to give the industry full time to consider it.
    Mr. de Freitas: Does the Minister realise that, although the recommendations may be widely accepted, they have caused much alarm in small communities which depend to a large extent on inshore herring fishing?
    Mr. Soames: I do not wish to commit myself at this stage by commenting on the Report itself, because I wish to consider it and the views of the associations.
    Mr. Jeger: Among the organisations which the Minister will consult, will he include the trade unions concerned so that the workers in the fishing industry —those who fish and those who build fishing vessels—may make their views known through their respective organisations?
    Mr. Soames: I will take into account what the hon. Gentleman says.

    Skimmed Milk
    Mr. Doddsasked the Minister of Agriculture, Fisheries and Food, in view
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    of the advisability of using pure fresh milk instead of skim milk to which vegetable fats have been added, what action he proposes to take to ensure that in cafes, restaurants and canteens the public is adequately informed when skimmed milk is used in beverages instead of fresh milk.
    Mr. de Freitasasked the Minister of Agriculture, Fisheries and Food whether he is aware that many caterers serve skimmed milk fortified with vegtable fat in circumstances which lead customers to believe that it is full cream fresh milk; and whether he will make regulations under the Food and Drugs Act, 1955, to prevent this.
    Mr. Soames: I am not aware that at the present time many caterers serve skimmed milk with non-milk fat. The Skimmed Milk with Non-Milk Fat Regulations which come into force next September will prevent the use of the word "milk" without appropriate qualification in the name of any drink containing skimmed milk. Where "milk" is not used in the name of the drink, the best safeguard for the customer who wants whole milk is to ask for it.
    Mr. Dodds: Is it not a fact that progress has been made and that when skimmed milk to which vegetable fats have been added has been used in advertisements and on labels, it has to be declared? Why, then, is it not done for customers of restaurants, cafés or canteens? The right hon. Gentleman said that few restaurants will use it. Is he not aware that if Ile made this obligatory none would use it? Why should not the public know this? It is important.
    Mr. SoamesThese Regulations flow from the Food and Drugs Act, the purpose of which is to protect the consumer and to ensure that when he asks for a certain product he gets it and not an ersatz one. Under these Regulations, if the customer asks for milk, or for any drink with milk in it, he will have to get a drink consisting of whole milk, or the firm concerned will commit an offence. It would be extremely difficult —and I doubt whether it would be wise —to devise Regulations intended to ensure that if a customer does not ask for milk he should still get it.
    Mr. de Freitas: Is the Minister aware that my Question refers to the prevention of possible misleading? Is this not a clear case where both the producer and the consumer should be protected by the Government? Is the Minister aware that our Prayer against these Regulations is bound to have the support—which has been declared publicly—of many dozens of his hon. Friends?
    Sir W. Bromley-Davenport: Is my right hon. Friend aware that his Answer will give general reassurance that the Regulations in question afford a proper measure of protection to the consumer?

    Fowl Pest
    Mr. Liptonasked the Minister of Agriculture, Fisheries and Food the cost of dealing with fowl pest during 1960; and how many birds have been destroyed.
    Mr. Vane: Just under 6 million birds were slaughtered during 1960 and £3,800,000 paid in compensation. The cost of disinfection and other expenses amounted to £673,000.
    Mr. Lipton: Is not this a rather dismal tale of ineffectual endeavour? I realise that the Government have appointed another Committee to look into this matter, but will the hon. Gentleman say what progress is being made in vaccine research to cope with this disease?
    Mr. VaneFar from being a rather dismal tale of ineffectual endeavour, it shows that very brisk action is being taken to deal with a disease which has threatened our poultry industry very extensively. Research into vaccines is going on all the time, and my right hon. Friend's predecessor was not slow to appoint a very distinguished Committee to go into this development when it became apparent that the disease was still increasing in this country.

    Vegetable and Fruit Growers (Runciman Report)
    Mr. Wadeasked the Minister of Agriculture, Fisheries and Food whether, in view of the recent case of underpayment of vegetable and fruit growers and other horticulturists by commission salesmen, he will now implement the recommendations contained in the Runciman Report on this subject.
    Mr. Soames: The Runciman Committee's view was that most firms already submitted accurate and honest returns to growers and that the best safeguard against dishonesty would be a code of business conduct drawn up and enforced by the trade themselves. This possibility is at present being discussed within the trade. One of the recommended changes in the provisions of the Horticultural Produce (Sales on Commission) Act, 1926, has already been made.
    Mr. Wade: Is the right hon. Gentleman aware that there have been some striking cases recently of underpayment of vegetable and fruit growers, some of which have come before the courts'? Is he aware that in the main it is the small growers who tend to suffer from underpayment? In view of this, would it not be desirable to implement the recommendations of the Runciman Committee, particularly the recommendation that Section 1 (4) of the Horticultural Produce (Sales on Commission) Act, 1926, should be amended?
    Mr. Soames: A most important feature of the recommendations of the Runciman Committee was that a code of conduct should be drawn up. It may well be necessary for Ministers to refer these matters to the Horticultural Marketing Council, but it would not he appropriate to do so until deliberations by the wholesale trade have progressed further. I am not aware of a number of recent cases of deception and fraud. I know of one, which went to the courts, but I do not think that the practice is as widespread as the hon. Gentleman seems to think.

    Swine Fever
    Mr. Clive Bossomasked the Minister of Agriculture, Fisheries and Food what progress is being made in tackling swine fever; and if, for compensation purposes, he will consider treating this disease on the same lines as foot-and-mouth.
    Mr. Soames: I presume my hon. Friend is referring to a slaughter policy, which, as I announced on 20th December, the Government have decided in principle to introduce. Working out the details of such a policy and consulting the interested organisations is bound to take some time but we are getting on as quickly as

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    possible. The basis of compensation for animals compulsorily slaughtered is fixed by the Diseases of Animals Act, 1950.
    Mr. Bossom: I thank my right hon. Friend for that Answer. Can he give a target date when he hopes the entire country will be clear, bearing in mind that Scotland, most of Wales, and Northern England are now clear?
    Mr. Soames: I am afraid that I cannot at this moment give a target date. Indeed, we still have to work out the details of the scheme, but we will get on with it as quickly as we can.

    Milk Distribution
    Mr. de Freitasasked the Minister of Agriculture, Fisheries and Food whether he is aware that one of the largest dairies in the south of England now delivers all milk in cartons instead of in bottles; and what he is doing to encourage this method of distribution in view of the fact that it is cleaner and quieter and involves the transport of fewer heavy loads.
    Mr. Soames: I welcome the enterprise of this firm in trying out a new method of milk distribution. The question of its wider use must, however, be one for the trade itself to decide.
    Mr. Stonehouse: Is the Minister aware that one of the reasons why dairies are reluctant to convert to this technique is because of a ring in the carton manufacturing industry? Will he have investigations made into that?
    Mr. Soames: That had not been drawn to my attention. I believe that there is a considerable difference of opinion within the dairy industry as to which is the most suitable form of distribution, bottles or cartons. I had not heard of the aspect to which the hon. Gentleman refers.

    Charollais Bulls
    Mr. Mackieasked the Minister of Agriculture, Fisheries and Food how his talks are proceeding with countries likely to be affected by the importation of Charollais bulls into this country.
    Mr. Soames: I regret that I am unable to make a statement at present. I will do so as soon as I can.
    Mr. Mackie: Is not the situation becoming ridiculous? Has the Minister seen the results of the test for live weight yield of these animals in America, where they beat all other breeds, the Hereford being a bad second? Has he noticed the interest in this breed from all over the world, 1,000 of them going to Russia? Is it not time that he ignored the views of the rather conservative-minded breed societies and gave the British farmer and the British housewife the benefit of this breed?
    Mr. Soames: It is not a question of ignoring anything. When I answered a Question earlier in the winter I said that I was anxious that we should be able to do the experiment with Charollais cattle. I am also anxious to preserve an important export trade in livestock.
    Mr. Mackie: How important is this trade—less than half a million pounds out of a total agricultural export figure of £180 million. It is surely far more important to have these animals than that?
    Mr. Soames: Perhaps I am trying to get it both ways.

  TRADE AND COMMERCE

    Trade with East Germany
    Sir L. Plummerasked the President of the Board of Trade what estimate he has made of the average monthly value of British exports to East Germany which is being lost as a result of a refusal of travel documents to East German buyers and their representatives who wish to come here to negotiate and place orders.
    The President of the Board of Trade (Mr. Reginald Maudling): None, Sir. It is questionable whether in fact any trade has been lost. East German businessmen are, of course, no longer prevented from visiting the United Kingdom.
    Sir L. Plummer: Is the President of the Board of Trade aware that, when the allied travel bureau refused to give permission to East German buyers and other businessmen to come to this country to place their orders, those gentlemen went to West Germany to place their orders, because 'the West German Government have no objection to trading with the

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    East German Government, despite their ideological differences? Should we not be considering our trade and not be concerning ourselves so much with the quarrel between East and West Germany?
    Mr. Maudling: The facts I have do not support the hon. Gentleman's contention. Our exports to East Germany last year were nearly double what they were in 1959 and there was no sign of any decrease in the latter part of the year.
    Mr. Shinwell: Does the right hon. Gentleman say that the allied travel bureau in West Berlin places no obstacle in the way of obtaining the facilities required to travel to this country? Are not restrictions still in operation?
    Mr. Maudling: Perhaps the right hon. Gentleman did not see the Answer to a Question yesterday concerning restrictions. My point is that, whatever the nature of the restrictions, they have not affected our trade.

    European Export Council
    Mr. Boydenasked the President of the Board of Trade if he will appoint to the European Export Council someone with knowledge of the special conditions and problems of the British coal export trade.
    Mr. Maudling: Appointments to the Council have been made by the Council's Chairman, Sir William McFadzean. I will, therefore, refer the hon. Member's point to him. The Council's mandate is directed to expanding all our exports to Europe, including coal.
    Mr. Boyden: I thank the right hon. Gentleman for that Answer, which gives some encouragement. Will he stress to the Chairman of the Council the particular needs of development districts, some of which would benefit from an increase in the coal export trade?
    Mr. Maudling: I will certainly do that. The hon. Gentleman may be pleased to know that all the missions going from the Council to various European countries in the near future have been fully briefed on coal exports.

    Television Sets and Domestic Appliances (Advertisements)
    Mr. F. Noel-Bakerasked the President of the Board of Trade what representations he received last month from the Advertising Inquiry Council regarding misleading advertisements for television sets and domestic appliances which are secondhand or over three years old; and what reply he has made.
    Mr. Maudling: I have received representations that it is misleading to offer television sets for sale as "free from Government restrictions" without at the same time disclosing that they are more than three years old. I have brought this suggestion to the notice of the Newspaper Proprietors Association which is, I understand, considering the matter this week. When I have received the Association's report, I shall write to the Council.
    Mr. Noel-Baker: May we take it that the right hon. Gentleman will press the Joint Copy Committee of the Newspaper Proprietors Association and the Newspaper Society, which has shown great reluctance to do anything about these clearly fraudulent advertisements, which make great play with the cheapness of the weekly rentals without stating that these sets are all over three years old? Will he ensure that the result of these talks is effective action to stop this misleading of the public?
    Mr. Maudling: I do not think that I should comment until I have received the Association's report, but I will certainly not lose sight of the matter.

    Resale Price Maintenance
    Mrs. McLaughlinasked the President of the Board of Trade what response he has had from retail trading associations in returning the questionnaire he sent out on resale price maintenance; and if he will make a statement on the replies received.
    Mr. Maudling: Nearly 2,000 replies have been received from retailers. The inquiry is continuing and I have no statement to make at present.
    Mrs. McLaughlin: As my right hon. Friend has received only 2,000 replies to the 5,000 inquiries which I understand he sent out, does he intend to

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    pursue this matter further and ask a wider number of retailers for their opinion before making a decision?
    Mr. Maudling: I should have thought from the way these things go that 2,000 replies to 5,000 questionnaires is a very good average.
    Mrs. McLaughlinasked the President of the Board of Trade what steps he proposes to take to find out public opinion on resale price maintenance.
    Mr. Maudling: I am keeping the interests of the consumer public well in mind during the inquiry. Among other steps, I have considered a social survey of consumers' views, but I do not think this would yield the information we need.
    Mrs. McLaughlin: Will my right hon. Friend consider this matter very carefully? I understand that the Consumers' Advisory Council was available and willing to undertake such a survey. Is it not imperative, in the interests of the consumer, that the individual's views and interests in this matter should be thoroughly considered?
    Mr. Maudling: We have been in touch with several consumers' associations, including the Consumers' Advisory Council. I agree that it is obviously essential to take into account the view of consumers on these matters, and I am sure that they will be well represented in this House when we come to discuss the matter.

    North-East Development Districts
    Mr. P. Williamsasked the President of the Board of Trade what progress has now been made, under the Local Employment Act, in bringing new industry to the North-East.
    Mr. Maudling: As my hon. Friend said in reply to the hon. Member for Chester-le-Street (Mr. Pentland) on 20th December, it is too early for the effects of the Local Employment Act to be gauged. There are, however, about 9,000 additional jobs in prospect in the development districts in the North-East. and the rate of unemployment in these districts has fallen from 5·3 per cent. in March, 1960, to 4·6 per cent. in December, 1960.
    Mr. Williams: When my right hon. Friend talks of new jobs becoming available in development districts, can he say whether it is as a result of new industry coming in or of existing industries redeveloping and re-expanding?
    Mr. Maudling: It is normally a mixture of the two. The figures I gave are based on applications to us for industrial development certificates. I think that on the whole it is the healthiest thing for any area to have new jobs arising from both sources.
    Mr. Chetwynd: Is the President of the Board of Trade aware that the North-East is very much the Cinderella in regard to the work of this Act? Is he satisfied that the Board of Trade Advisory Committee is giving full help to firms in the area that are seeking to expand?
    Mr. Maudling: I should very much like to get more firms to the North-East. On the other hand, in some ways the employment experience has been better than at one time I feared it might be, but I am very well aware of the requirements and difficulties in the North-East.
    Mr. Williams: Is my right hon. Friend aware that some of us there are getting fed up and tired of hearing of the disadvantages of the North-East, and that we are more keen to advocate the advantages of the North-East?
    Mr. Shinwellasked the President of the Board of Trade whether his Parliamentary Secretary has reported on his visit to the North-East; and what action he now intends taking on the industrial requirements of the area, and in particular the new 'town of Peterlee and the adjoining district.
    Mr. Maudling: Yes, Sir. I am well aware of the industrial problems of the North-East, and the Board of Trade will continue to do all it can to encourage new industries to set up in the development districts in the area, including Peterlee.
    Mr. Shinwell: Is the President of the Board of Trade aware that the planning committee of Durham County Council takes such a gloomy view of the prospects of the area contiguous to Peterlee, in particular the township of Haswell,

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    that it refused to allow the Easington Council to build houses in the area? Will he correct that impression by informing those concerned that he is serious in his intention to promote industry in that district?
    Mr. Maudling: I am sorry to hear of this pessimism. I wish that I could change the attitude of the authority by informing it of my intentions, but I know very well, as the right hon. Gentleman knows, that the only thing to produce results is results. I am trying to get them.

    New Industries, Plymouth
    Mr. Scott-Hopkinsasked the President of the Board of Trade how many new industries have been given financial help and established themselves in Plymouth under the Development Areas Treasury Advisory Committee or Board of Trade Advisory Committee schemes since 1958; and from what areas these industries have come
    Mr. Maudling: Four firms new to Plymouth, one each from London, Birmingham, Surrey and Sussex, have received financial assistance since 1958. In addition, seven firms already in Plymouth have been offered financial help in expanding their activities.

    New Industries, Cornwall
    Mr. Scott-Hopkinsasked the President of the Board of Trade how many new industries have been given financial help and established themselves in Cornwall under the Development Areas Treasury Advisory Committee or the Board of Trade Advisory Committee schemes since 1958: and from what areas these industries have come.
    Mr. Maudling: Three firms new to Cornwall, one from Surrey, one from Devon and one new project, have received financial assistance since 1958. In addition, nine firms already in Cornwall have been offered financial help in expanding their activities.
    Mr. Scott-Hopkins: Will my right hon. Friend bear in mind that, as his Answer to my previous Question showed, although Plymouth is now in a much happier position, Cornwall is suffering from an unemployment problem? I hope that the figures he has quoted will
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    underline that in his own mind and in those of his right hon. Friends.
    Mr. Maudling: I believe that the problem in Cornwall is particularly difficult because of the distance from the main centres of production, and also because of the seasonal nature of the unemployment.

    Company Registration
    Mr. Fletcherasked the President of the Board of Trade whether he is aware of the difficulty that is being caused by reason of the refusal of the Companies Registrar to register a new company without a certificate that the name proposed is not merely not a registered trade mark but does not resemble any registered trade mark; and what action he proposes to take in the matter.
    Mr. Maudling: Yes, Sir. New instructions are being issued so that the statement to which the hon. Member refers will no longer be required.

    Motor Car Industry
    Mr. Edelmanasked the President of the Board of Trade whether, in order to increase trade and promote exports. he will invite the British motor manufacturers to combine in the manufacture of a standardised popular car in a single model, comparable with the Volkswagen
    Mr. Maudling: No, Sir.
    Mr. Edelman: But is it not the case that the continuing strength of the Volkswagen in the world's markets arises not from any superiority in German workmanship but from principles of production which, this year. will result in a million standardised cars being produced? Will the President of the Board of Trade not just brush aside new ideas about the industry, but put the idea to the Motor Advisory Council which he himself consults?
    Mr. Maudling: I do not think that this is a new idea. I am not sure that the success of the Volkswagen is necessarily attributable to the scale of its production alone. I think that the firm's salesmanship and after-sales service have been remarkable. There certainly are people who argue that in this industry one can quite early reach the limit of

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    the economies of scale production. But these are essentially matters that should be left to the industry itself and to its commercial judgment.
    Mr. Gresham Cooke: Would my right hon. Friend bear in mind that some manufacturers have large expansion plans that will come to fruition in a year or two, for the development and production of new and what are hoped to be popular models, and that it would be extremely difficult to impose on top of this another new factory to make another model?
    Mr. Maudling: This question of standardisation and diversity is very difficult, but I do not think that we should forget the very large degree of standardisation of components in the British industry, which is an important development.
    Mr. Edelmanasked the President of the Board of Trade what advice he has given to the motor industry in connection with a future readjustment of the industry's labour force.
    Mr. Maudling: None, Sir.
    Mr. Edelman: Did the President of the Board of Trade, during a recent meeting with the motor manufacturers, propose to them that a proportion of the existing labour force of the motor industry should be made redundant and, if possible, diverted to other industries? If he did, how would that square with his present intention to expand the motor industry and create new jobs in other areas?
    Mr. Maudling: I certainly did not make any such proposal. It is true, of course, that there is a considerable shortage of labour in the Midlands in many branches of the engineering industry, but, so far as I am concerned, I hope that the motor industry will employ all the labour it needs and no more than the labour it needs. It is, of course, for the industry and not for me to say how many that should be.

    Export Publicity Council
    Mr. Sydney Irvingasked the President of the Board of Trade what recommendations have been made by the Export Publicity Council and its three study groups.
    Mr. Maudling: The Export Publicity Council is an advisory body, the main task of which is to give expert advice on publicity in support of British exports, rather than to make formal recommendations. The discussions of the Council are of continuing value for my Department's work in this field.
    Mr. Irving: But is not the President of the Board of Trade able to give any indication of the sort of advice and recommendations that the Council has given? Does it not give the impression that this is a pretty low rate of productivity for a very high-powered Council that has been in existence for fourteen months, especially in view of our critical export situation? Will not he consider his Answer again?
    Mr. Maudling: The point is that the Council is not there to make formal recommendations, but all such matters as trade fairs, literature, pamphlets and the like are put to the Council, and we are constantly getting advice from it. This is not a question of formal recommendations but general day-to-day advice on the quality, design and purpose of our export publicity.
    Mr. Irving: But there are three study groups—there must be something they are studying. Cannot the right hon. Gentleman give some indication in detail of the work that is being done?
    Mr. Maudling: Well, the Council deals with liaison with overseas correspondents in London, publicity in the developing countries of Africa, publicity in the Free Trade Association, and that sort of thing. It is not a question of formal recommendations at all.

    Thorn Electrical Industries Ltd., Spennymoor
    Mr. Greyasked the President of the Board of Trade what representations he has made to the firm of Thorn Electrical Industries Limited to induce it to reconsider its decision to transfer the radio industry from Spennymoor to the London area.
    Mr. Maudling: The firm has told my Department that it has reached this decision reluctantly, but that it is satisfied that the concentration of its radio production into two factories near

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    London is necessary for reasons of efficiency, and not least in the interests of the export trade. I am assured that the firm plans to expand its output of other types of product manufactured at Spennymoor and that it will in time increase its labour force substantially.
    Mr. Grey: Is the Minister aware that the picture here is not quite so bright as was painted earlier; and that, as a result of the transfer of this factory, approximately 500 people will lose their jobs? Is he aware that many of those people have had this kind of training in radio assembly and are now becoming redundant? Can he give any assurance whatsoever as to whether these people will be placed when the transfer takes place?
    Mr. Maudling: I think that this is a temporary difficulty. I understand that the women to be discharged are leaving to take jobs in the woollen industry, but there is certainly the problem of alternative jobs for the men. As I say, the firm has told me that over a period it expects to expand its total employment at Spennymoor to a level higher even than it is at the present moment.

    Factories, Ashford (Industrial Development Certificates)
    Mr. Deedesasked the President of the Board of Trade on how many occasions, since 1954, industrial development certificates have been refused to firms wishing to establish factories in Ashford, Kent.
    Mr. Maudling: On one occasion.
    Mr. Deedes: Does it seem altogether satisfactory to my right hon. Friend that he should have powers—and on this occasion a very big firm was involved —to prevent, under the Town Development Act, an industry from entering a town, but apparently has no influence at all over such a decision as that taken by Tube Investments, which will involve the closing in the town of one of the principal sources of employment?
    Mr. Maudling: We have refused one application since 1948 and we have in fact approved thirty-nine applications, so I think that the record in Ashford is reasonable. But we cannot possibly force a firm to stay in business. Although
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    hon. Members would often like us to do so, I think that the House has to recognise that we have not, and could not possibly possess, powers to compel any private enterprise to continue in business when it thought that it was not economically justified in doing so.
    Mr. Deedes: Is my right hon. Friend consulted?
    Mr. Maudling: Not necessarily, no.

    Industrial Premises, Oldham
    Mr. Mappasked the President of the Board of Trade for what reasons his Department's industrial premises at Keb Lane, Oldham, remain unoccupied; and what efforts are being made to obtain a suitable tenancy.
    Mr. Maudling: I understand my right hon. Friend the Minister of Aviation, whose Department owns these premises, has been negotiating with an intending purchaser but that, unfortunately, the negotiations have broken down. My Department, however, is now in discussion with three other firms who have shown an interest in the factory.
    Mr. Mapp: While appreciating the right hon. Gentleman's Answer, may I ask him to bear in mind that the early letting of this factory will lead to two desirable consequences; first, greater employment in Oldham and, secondly, an intake of approximately a thousand people at Christmas-time described as unemployed or partially unemployed?
    Mr. Maudling: We shall certainly let it as soon as we can.

    Imports
    Mr. Jayasked the President of the Board of Trade the percentage increase in 1960 over 1959 in United Kingdom imports of food, raw materials, partly manufactured goods, and wholly manufactured goods, respectively.
    Mr. Maudling: The increases are 2 per cent., 14 per cent., 38 per cent., and 38 per cent. respectively.
    Mr. Jay: Do not these figures clearly show that our present balance of payments difficulties are due, not solely to increased imports of raw materials and industrial materials, but to premature decontrol by the Government of our imports of finished consumer goods?
    Mr. Maudling: In fact, they show exactly the opposite—[Hors. MEMBERS: "Oh."]—yes, because percentages can be misleading. [HON. MEMBERS: "Oh."] Of the wholly manufactured goods, only one-third were consumer goods and two-thirds were machinery and tools for industry, and the increase in imports of finished consumer goods between the two years was £45 million out of a total increase of £573 million.

    Falmouth and Camborne
    Mr. Haymanasked the President of the Board of Trade haw many applications for help for industries in the Falmouth and Camborne constituency have been received since 26th July, 1960; and how many of these, and of applications then under consideration, have been granted.
    Mr. Maudling: Eight further applications for assistance under the Local Employment Act, 1960 have been received from this area since 26th July, 1960. All of these and one of those received before that date are under consideration. Of the remaining three received before 26th July, one has been withdrawn and two rejected.
    Mr. Hayman: Did one of the two which were rejected come from a firm which would have brought a completely new industry to my constituency and would eventually have employed 400 people? Will the right hon. Gentleman have that case looked into again, because there is still a very serious unemployment problem in my constituency?
    Mr. Maudling: If the hon. Gentleman will write to me with the details, I shall be very glad to look into the matter.

    South-West Durham
    Mr. Boydenasked the President of the Board of Trade if. following the visit of the Parliamentary Secretary to South-West Durham, he is proposing to take any new measures to encourage industrialists already in the area to expand their output and plant.
    Mr. Maudling: No, Sir; I do not consider any such measures are called for at present. As a large part of South-West Durham qualifies for assistance under the Local Employment Act, industrialists in the area already have considerable encouragement to expand their output.
    Mr. Boyden: Will the right hon. Gentleman convey to his hon. Friend the appreciation of the four district councils in my constituency for the courtesy and diligence he showed when he visited the area? Further, will the President of the Board of Trade note that most of my constituency business during the Recess was concerned with moans from business people, and will he therefore advise the Advisory Committee to take a rather more lenient or generous view of applications from local business people for loans and assistance for development?
    Mr. Maudling: I am grateful for the hon. Gentleman's remarks about my hon. Friend. I know that the Board of Trade Advisory Committee often turns down applications, but its purpose as an independent committee is, in a way, precisely that—to safeguard the public purse against applications which are not reasonably justifiable. If the hon. Gentleman has any particular case in mind, I should be very glad to look into it.

    British Trade Fair, Moscow
    Mr. Greenwoodasked the President of the Board of Trade who is to perform the opening ceremony at the British Trade Fair in Moscow.
    Mr. Maudling: The organisers of the Fair have invited me to perform the opening ceremony, and I have had much pleasure in accepting.
    Mr. Greenwood: I congratulate the right hon. Gentleman on the choice which has been made, but may I put to him the thought that there would be widespread public support for the suggestion that, as the Duke of Edinburgh performed the opening ceremony at the British Exhibition in America, he should be invited to perform a similar function in Moscow?
    Mr. Maudling: I do not know what other ideas may or may not have passed through the minds of the people concerned. I can only accept what invitations are passed to me.

    DISARMAMENT
    Mr. Spriggsasked the Prime Minister if he is now prepared to propose a time and place for further meetings with Mr. Khrushchev for the purpose of discussing the Soviet Union's four-point disarmament proposals
    The Prime Minister (Mr. Harold Macmillan): I have nothing to add to the reply which I gave to the hon. Member for Newcastle-under-Lyme (Mr. Swingler) on 24th January.
    Mr. Spriggs: Is the Prime Minister aware that there is still speculation in certain foreign countries about the position of the Soviet Union and the proposals made by its leaders in relation to disarmament and control? Is it not time that the British Prime Minister and his Government took the initiative and made certain proposals which are workable and acceptable by the other Powers?
    The Prime Minister: As regards disarmament, we have made our proposals, and they stand. I hope that there will soon be an opportunity for getting to grips with this matter among all the Powers concerned.

  UNITED NATIONS

    (AFRO-ASIAN RESOLUTION)
    Mr. Brockwayasked the Prime Minister what representations he made to President Eisenhower concerning the resolution on colonialism sponsored by forty-three Afro-Asian nations at the General Assembly of the United Nations.
    The Prime Minister: There are many subjects on which I exchange views with the President of the United States. These consultations are confidential.
    Mr. Brockway: Does the Prime Minister appreciate how fatal it is from the point of view of the influence of this country and the West that any pressure should be brought to bear upon America on these colonial issues before the United Nations? Is it not just playing into the hands of the Communist countries throughout the world?
    The Prime Minister: No, Sir. What each country has to do is to vote according to what it believes to be right. I believe, and I think that the House as a whole believes, that the record of this country in the development of the territories for which it is responsible is one of which we have a right to be proud.
    Mr. Healey: I agree very strongly with the earlier part of that reply, but is not the Prime Minister aware that it has been widely reported in the United States that he persuaded the United
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    States delegation to vote against its opinions on this issue in December? Does he realise that there is no more certain way of destroying the Western Alliance than to insist that all its members vote the same way on every issue in the United Nations, irrespective of their real views? Does not the right hon. Gentleman agree that there is no more reason to expect the Americans to support us, or the French position on colonialism, than there is for us to support their position on China?
    The Prime Minister: I am asked to say what consultations I have had with the American President. If I were to say what they were, they would cease to have their value as private consultations.
    Mr. Gaitskell: The Prime Minister cannot be allowed to get away with that. Is he aware that there is a widespread impression that he persuaded President Eisenhower to instruct the United States delegation to abstain on the anti-colonial resolution? Further, does he realise that it is precisely because of our admirable record in converting a former colonial empire into a free Commonwealth that we ought to welcome and support anti-colonial resolutions in the United Nations, and that to fail to do so inevitably gives the impression that we still support colonialist régimes?
    The Prime Minister: It depends upon how the resolutions are drawn. I honestly believe that, if the right hon. Gentleman had studied the terms of the resolution, he would not and could not have brought himself in honour to vote for it.
    Mr. Gaitskell: I have indeed studied the terms of the resolution. In my opinion, it would have been much wiser, while saying, perhaps, that there were certain phrases with which we would not wholly agree, to have said that we were in general agreement with the spirit of the resolution and to have supported it rather than abstain and give the 'impression that we were taking the side of Portugal, South Africa and the Dominican Republic.
    The Prime Minister: The House and the country must judge. I shall arrange for the text of the resolution to be circulated in the OFFICIAL REPORT, and hon. Members will judge for themselves.
    Mr. S. Silverman: Will the Prime Minister tell the House when he first became converted to the idea that it would be a good thing for each nation in the United Nations to vote according to what it independently believed to be right? Is it not the fact that the proceedings of the United Nations for fifteen years have been bedevilled by opposition to that idea and by the adoption of the contrary practice, that each of the mutually hostile blocs should arrive with agreed opinions and support those at meetings of the Security Council and the General Assembly?
    The Prime Minister: That does not do justice to the work of the United Nations. There is very often a very great effort made by the various delegations to see whether they can reach agreement upon the terms of proposed resolutions, and that work of conciliation is one of the purposes for which the United Nations was set up.
    Following is the text of the resolution:
    Declaration on the granting of independence to colonial countries and peoples
    The General Assembly,
    Mindful of the determination proclaimed by the peoples of the world in the Charter of the United Nations to reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small and to promote social progress and better standards of life in larger freedom,
    Conscious of the need for the creation of conditions of stability and well-being and peaceful and friendly relations based on respect for the principles of equal rights and self-determination of all peoples, and of universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language or religion,
    Recognising the passionate yearning for freedom in all dependent peoples and the decisive role of such peoples in the attainment of their independence,
    Aware of the increasing conflicts resulting from the denial of or impediments in the way of the freedom of such peoples, which constitute a serious threat to world peace,
    Considering the important role of the United Nations in assisting the movement for independence in Trust and Non-Self-Governing Territories,
    Recognising that the peoples of the world ardently desire the end of colonialism in all its manifestations,
    Convinced that the continued existence of colonialism prevents the development of international economic co-operation, impedes the social, cultural and economic development of
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    dependent peoples and militates against the United Nations ideal of universal peace,
    Affirming that peoples may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic co-operation, based upon the principle of mutual benefit, and international law,
    Believing that the process of liberation is irresistible and irreversible and that, in order to avoid serious crises, an end must be put to colonialism and all practices of segregation and discrimination associated therewith,
    Welcoming the emergence in recent years of a large number of dependent territories into freedom and independence, and recognising the increasingly powerful trends towards freedom in such territories which have not yet attained independence,
    Convinced that all peoples have an inalienable right to complete freedom, the exercise of their sovereignty and the integrity of their national territory,
    Solemnly proclaims the necessity of bringing to a speedy and unconditional end colonialism in all its forms and manifestations;
    And to this end
    Declares that:

    1. The subjection of peoples to alien subjugation, domination and exploitation constitutes a denial of fundamental human rights. is contrary to the Charter of the United Nations and is an impediment to the promotion of world peace and co-operation.

    2. All peoples have the right to self-determination; by virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.

    3. Inadequacy of political, economic, social or educational preparedness should never serve as a pretext for delaying independence.

    4. All armed action or repressive measures of all kinds directed against dependent peoples shall cease in order to enable them to exercise peacefully and freely their right to complete independence, and the integrity of their national territory shall be respected.

    5. Immediate steps shall be taken, in Trust and Non-Self-Governing Territories or all other territories which have not yet attained independence, to transfer all powers to the peoples of those territories, without any conditions or reservations, in accordance with their freely expressed will and desire, without any distinction as to race, creed or colour, in order to enable them to enjoy complete independence and freedom.

    6. Any attempt aimed at the partial or total disruption of the national unity and the territorial integrity of a country is incompatible with the purposes and principles of the Charter of the United Nations.

    7. All States shall observe faithfully and strictly the provisions of the Charter of the United Nations, the Universal Declaration of Human Rights and the present Declaration on the basis of equality, non-interference in the internal affairs of all States, and respect for the sovereign rights of all peoples and their territorial integrity.

    YOUTH SERVICE
    Mr. W. Hamiltonasked the Prime Minister whether, in view of the fact that National Service is now coming to an end, he will now consider the formation of a youth service for overseas help, which would enable the youths of the United Kingdom to direct their energies to useful and constructively peaceful purposes.
    The Prime Minister: The end of National Service was one of the factors which led 'the Albemarle Committee to propose a major expansion in the Youth Service. The Government accepted its main recommendations, and energetic measures are being taken to develop the Youth Service in this country for young people between the ages of 14 and 20. The Government recognise the value of providing opportunities for constructive and useful service overseas on the part of young people, particularly in the Commonwealth, but they consider that over most of the field this can best be achieved through the voluntary agencies.
    Mr. Hamilton: Is the right hon. Gentleman aware that, so far as I know, this proposal originated from President Kennedy and that it would seem to be an extremely valuable subject to take up with the new President when the right hon. Gentleman meets him? Is he not aware that there is a considerable desire among our youth to get rid of excess energy and that this would seem to be a very imaginative proposal by which they could do so?
    The Prime Minister: I am obliged to the hon. Gentleman for calling my attention to this matter. Perhaps what has been said today will help to serve what he and I regard as a good purpose. I am glad that the hon. Member has tabled the Question.
    Mrs. White: Does not the right hon. Gentleman realise that the United States do a great deal more to encourage their young people than the Government do to encourage British young people to serve overseas, and that the Government have turned down a request for help from the main organisation concerned with this matter?
    The Prime Minister: No, Sir. I think that the main organisation which we
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    have tried to help is called the Voluntary Service Overseas and that that is the organisation which is the most useful one for the purpose.

  EXPORT TRADE (COMMERCIAL OFFICERS)
  Mr. Gresham Cookeasked the Prime Minister whether, in order to assist the export trade, he will arrange for commercial officers to be seconded to embassies, and appointed by the President of the Board of Trade rather than by the Secretary of State for Foreign Affairs.
  The Prime Minister: No, Sir.
  Experience has shown that the promotion of the export trade, no less than our other external interests, is best served by maintaining and developing a unified Foreign Service capable of dealing with the whole range of our international relations.
  Mr. Gresham Cooke: Is my right hon. Friend aware that there is a strong feeling in industrial circles that the time has arrived when these commercial officers should receive their grounding in industry and be trained in industry through the Board of Trade and that in that way our export effort would be promoted? They should also have a long term of service. May I ask my right hon. Friend not to close his mind entirely to these suggestions?
  The Prime Minister: Of course, we are always trying to think of what is a good adjustment. We have had different systems, but I notice that the study group of the Federation of British Industries, which reported in only May, 1960, said this:
  " We are convinced believers in a unified foreign service. The representation of British commercial interests abroad is too important to be left to one or two officers in a mission and forgotten about by the rest. All should be imbued with its importance and it should be regarded as a normal part of diplomatic activity."
  We must always try to see how we can improve it, but I think that fundamentally this is the right system.
  Mr. Snow: Will the Prime Minister bear in mind that representations made to his right hon. Friend the President of the Board of Trade about the

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  strengthening of our overseas missions in commerce have so far fallen on deaf ears? While I pay great tribute to the senior commercial ministers in our embassies, may I ask the right hon. Gentleman whether he is aware that there is a view that the subordinate staff are not adequately trained in commerce, especially in the day-to-day problems of finance and documentation? Will he, therefore, ask for advice as to what is practised by that successful exporter, the West German Government?
  The Prime Minister: We are always trying to improve these methods. I have had very good tributes from the main exporters I have consulted, such as the dollar export groups and other bodies, to the very good work now being done and the immense improvement in the work of our representatives overseas.
  Sir H. Nicholls: While it is perfectly correct to claim that there has been a vast improvement in this field over the last eight years, there is still a long way to go. The reflection in my right hon. Friend's Answer that trade generally is happy about the present balance is not, I think, truly the view of the individual industrialists whom we meet from time to time. I hope that my right hon. Friend will not close his mind to looking again at this balance.
  The Prime Minister: I am sure that there is more that we can do to improve the situation, but it would be a retrograde step to go from merely having one or two representatives of the Board of Trade in our foreign missions rather than trying to imbue the whole Foreign Service with the fact that this is part of the function that members of the Foreign Service should carry out. We will study, and all the time are studying, how we can improve that. but I should not like to switch back to the old system without a great deal of thought.

  EDUCATION
  Mr. Donnellyasked the Prime Minister if he will now recommend the appointment of a Royal Commission to consider the extent to which education in Great Britain compares with that of
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  the Soviet Union and the United States of America.
  The Prime Minister: No, Sir. The Education Ministers keep under close study educational developments overseas, and I do not consider that a Royal Commission is necessary.
  So far as higher education is concerned, the House knows that we are setting up a committee to review its development. No doubt the committee will take note of developments in the United States and the Soviet Union in so far as they are relevant.
  Mr. Donnelly: Is the Prime Minister aware that in the volume of engineers it is producing the Soviet Union, in particular, is so far ahead of this country that it is a matter of very great concern indeed? Will the right hon. Gentleman give an undertaking that he, as Prime Minister, will address himself to this specific problem?
  The Prime Minister: I am very much flattered by the suggestion that, by addressing myself to it, I can help to solve it. First, the committee, secondly, the Education Ministers, and, thirdly—this is a fact of which perhaps the House is not aware—the constant or frequent visits of Her Majesty's Inspectorate of schools to other countries, including the United States and the Soviet Union, are all practical methods, and we shall try to improve them if it is possible so to do.

  NUCLEAR TESTS
  Mr. Healeyasked the Prime Minister whether on his forthcoming visit to Rambouillet he will ask the President of the French Republic to associate France with the moratorium on atomic test explosions now observed by Great Britain. the United States of America and the Union of Soviet Socialist Republics.
  Mr. Brockwayasked the Prime Minister if he will discuss with the President of France at their forthcoming meeting the discontinuation of atomic bomb tests in the Sahara in view of the apprehension expressed in British Colonial territories likely to be affected by radio-active fall-out.
  Mr. Prenticeasked the Prime Minister whether he will propose to the President of the French Republic that he should associate France with the moratorium on the testing of nuclear weapons now observed by Great Britain, the United States of America and the Union of Soviet Socialist Republics.
  The Prime Minister: My conversations with President de Gaulle will be confidential and I cannot say what subjects will be discussed.
  Mr. Healey: Can the right hon. Gentleman assure the House that in talking to President de Gaulle he will convey the very deep dismay felt, I think, in all quarters in this country at the recent explosion in the Sahara? Furthermore, will he present to the French President the very strong feelings which are held on this issue by many of our fellow members of the Commonwealth?
  The Prime Minister: It is possible that this matter may be part of our conversations, in which case I shall express the view of Her Majesty's Government, but I think that these forms of conversations, the only point of which is that they should be confidential and should try to cover a large number of subjects in the right spirit, would be spoilt if both before and after them I had to answer detailed questions in the House of Commons.
  Mr. Brockway: Is the right hon. Gentleman aware that there is evidence that the French Government are now reconsidering the continuation of these tests in the Sahara? In view of the depth of feeling of people throughout Africa against their territory being raped in this way, will he at least consider putting forward the view of our Commonwealth and Colonial Territories?
  The Prime Minister: We would, of course, express the anxieties both of the Nigerian Government and of the Sierra Leone Government. We supported the resolution at the United Nations asking that we should all agree to discontinue these tests. It has been a long negotiation, but I still hope that the more practical method is to see whether the three countries now mainly concerned can bring the Geneva negotiations to a satisfactory conclusion.
  Mr. Prentice: Does the right hon. Gentleman agree that any success which might be obtained in the Geneva talks could be undermined if French tests continue and then if other countries follow their example? On the other hand, if the French tests are stopped, there is at least a chance that no further tests will be carried out anywhere. Is not this a critical situation calling for a new diplomatic initiative on the part of the Prime Minister?
  The Prime Minister: Yes, Sir, but I have a certain sympathy with the view that if the three countries which have done this on the largest scale could first agree among themselves they would be in a rather better moral position to lecture everybody else.
  Mr. Gaitskell: It is enormously important that the French Government should follow suit if an agreement is reached. Would it not be a wise precaution to raise this issue with General de Gaulle and to keep him in touch with the negotiations taking place, and to express the hope that France will join them in due course?
  The Prime Minister: I am grateful for the suggestion as to how to carry on these negotiations.

  DR. A DENAUER (VISIT TO UNITED KINGDOM)
  Mr. Healeyasked the Prime Minister, whether, during the forthcoming visit of the Chancellor of the German Federal Republic, he will discuss the establishment of a zone of arms control in Central Europe.
  Mr. Mayhewasked the Prime Minister what subjects he proposes to discuss with Dr. Adenauer when he visits this country.
  Mr. Emrys Hughesasked the Prime Minister whether, during the forthcoming visit of the Chancellor of the German Federal Republic, he will discuss the possibility of how tension in Europe could be eased if Germany became a neutral country like Austria.
  The Prime Minister: I have nothing to add to the reply I gave to the hon. Members for South Ayrshire (Mr. Emrys Hughes) and Woolwich, East (Mr. Mayhew) on 1st December.
  Mr. Healey: Is the Prime Minister aware that many of us are intrigued by the rather more positive reply which he gave to this Question on 1st December? Can he tell the House whether he proposes to raise this matter, which has been dormant for eighteen months, again now that the altitude of the new American Administration is likely to be more favourable?
  The Prime Minister: I fear that if I encouraged the hon. Member by a more positive reply, I might be in danger of being led into an indiscretion. I shall, therefore, leave it where it is.
  Mr. Hughes: Does not the Prime Miniser agree that it was a good thing when Austria became neutral, that there is now no danger in that part of the world and that, if Germany were made neutral, that would ease the situation all over Europe and make for general peace and disarmament?
  The Prime Minister: This is a large subject for question and answer. I do not think that there is any analogy. A neutralised Germany is not in the least comparable with Austria, either in strength, power or population. A neutralised Germany might well create a dangerous political vacuum in Central Europe. These at least are issues which we must bear in mind, but which can hardly be settled by question and answer. The hon. Gentleman should consider this aspect of the question.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Leader of the House to state the business for next week?
The Secretary of State for the Home Department (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:
MONDAY, 30TH JANUARY—A debate will take place on Reorganisation of the Nationalised Transport Undertakings, which will arise on a Government Motion to approve the proposals contained in the recent White Paper (Command 1248).
TUESDAY, 31ST JANUARY—Second Reading of the White Fish and Herring Industries Bill, and Committee stage of the necessary Money Resolution.
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Consideration of the Motion to approve the White Fish Industry (Aggregate Amount of Grants for Fishing Vessels, etc.) Order.
WEDNESDAY, 1ST FEBRUARY—Second Reading of the Hyde Park (Underground Parking) Bill.
Report and Third Reading of the Flood Prevention (Scotland) Bill.
Committee and remaining stages of the Agricultural Research etc. (Pensions) Bill.
THURSDAY, 2ND FEBRUARY—Second Reading of the Army and Air Force Bill.
Committee and remaining stages of the Overseas Service Bill; and of the Diplomatic Immunities (Conferences with Commonwealth Countries and Republic of Ireland) Bill.
FRIDAY, 3RD FEBRUARY—Consideration of Private Members' Motions.
MONDAY, 6TH FEBRUARY—The proposed business will be a debate on the Economic Situation.
Mr. Gaitskell: May I, first, ask the right hon. Gentleman whether the Government will find time for a second day for the debate on the economic situation? Secondly, when do the Government expect to announce their attitude to an inquiry into the Press, which was approved unanimously by this House on 2nd December? In view of the news this morning of the Thomson-Odhams merger, although, happily, this does not involve the closure of any newspapers, does not the right hon. Gentleman think that this fresh evidence of the concentration of power in the British Press merits a much more urgent attitude to the question of an inquiry?
Mr. Butler: In reply to the right hon. Gentleman's first question, there will be difficulty in finding time, but by all means let us discuss the question of the time taken by the economic debate.
On the second issue, which is clearly an important one, there are Questions to my right hon. Friend next week and I suggest, without prejudice to any conclusion, that we await the answers to those Questions.
Mr. S. Silverman: May I ask the right hon. Gentleman two questions on business? The first relates to the Motion

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which has stood on the Order Paper for a very long time and which we discussed during the debate on the Motion to adjourn for the Christmas Recess?
[That this House places on record its profound regret that the Secretary of State for the Home Department failed to advise Her Majesty the Queen to exercise Her Royal Prerogative of mercy in the cases of Francis Forsyth and Norman Harris, the first of whom was only a month or two over eighteen years of age and the other twenty-three years of age, both of whom were said by the learned counsel who prosecuted them to have had no intention to kill, and one of whom, namely, Norman Harris, was admitted to have struck no blow and was not present when any fatal act of violence was committed.]
Does the right hon. Gentleman hold out any hope whatever of ever finding any time to discuss this Motion? If the answer is "No", would it not be better to say so frankly to the House now? Then we shall all know where we are.
My second question arises out of Questions Nos. 81, 82 and 83 on the Order Paper today, which relate to the case of Timothy John Evans. The first two Questions ask for a further inquiry into that case and the third, my own Question, asks for the grant posthumously of a free pardon. In view of the wide public interest and anxiety arising out of the exceptional circumstances of this case, will the right hon. Gentleman take an early opportunity, perhaps today, with Mr. Speaker's permission, to give us an answer on these Questions?
Mr. Butler: On the second point raised by the hon. Member, I do not think that it would be in order for me at this stage to open the question of answering Questions Nos. 81 to 83. I have, of course, distributed an Answer in the usual manner and I am sorry that the Questions were not reached at Question Time. I think that we had better leave the matter as it stands for the time being.
In answer to the hon. Member's first question, I never use the word "never", because that is not wise in human relationships or in the conduct of Parliamentary business. It would, however, be difficult to find time to raise the issues 'contained in that Motion.
Mr. Silverman: Will not the right hon. Gentleman give us a more specific answer? It is all very well to say that he never uses the word "never", but sometimes the difference between never and the remote unanticipated future is so narrow as not to be worth drawing.
Sir H. Nicholls: May I suggest to my right hon. Friend that there would be considerable support from this side of the House for an extra day for the economic debate? During the Recess many of us who have contact with industry have felt the apprehension there, not for the present but certainly for the future potential of our industries. It would be a pity if 'the debate were limited by those apprehensions not being expressed in the debate.
Mr. Butler: In the discussions, which the Leader of the Opposition envisaged and to which I agreed, on this matter, we will certainly take soundings from my hon. Friend and other hon. Members.
Mr. Wigg: The right hon. Gentleman will doubtless recollect that on 3rd November he was kind enough to give the House an assurance that when the Army and Air Force Bill came before the House the undertaking given by the then Leader of the House on 17th March, 1955, would be honoured, namely, that it would be referred to a Select Committee. Therefore, will the right hon. Gentleman be good enough to say whether it is the intention of the Government, having got the Second Reading of the Bill, to refer it to a Select Committee and whether the Bill will then came back to a Committee of the whole House? Further, will the right hon. Gentleman be good enough to give the House an assurance that the procedures which operated with the previous Select Committee—namely, that there was a Departmental Committee sitting in parallel—will operate on this occasion?
Mr. Butler: I shall want to look into the latter point. In general, however, it is our intention to fulfil the undertaking given by my predecessor as Leader of the House and to follow the procedure outlined by the hon. Member.
Dame Irene Ward: On Monday's business, may I ask my right hon. Friend whether he is aware that, having regard to the complexity of the White Paper,

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there is a feeling that we ought to have another day so that the shipping, shipbuilding and ship-repairing industries should have a proper place in the discussion? Will my right hon. Friend, therefore, discuss through the usual channels whether we can have a day for this very important matter in view of the fact that a great many people think that the Minister of Transport is more concerned with railways and roads than he is with the needs of the country as a maritime Power?
Mr. Butler: I could not accept the last part of my hon. Friend's suggestion, nor, I am afraid, can we find extra time for this day. That does not mean that I underestimate the importance of the shipping industry.
Miss Herbison: Will the Leader of the House find time at an early date for a debate on the recommendations of the Guest Committee, since this has interested many Scottish people and has engendered much opposition? Scottish people are continually asking when we shall debate it.
Mr. Butler: I should have to inquire whether there would be time to consider this matter in the Scottish Grand Committee.
Mr. C. Osborne: Is my right hon. Friend aware that since 1st December there have been over 50 murders and that as a consequence there is mounting feeling outside this House that the death penalty should apply to all people of sound mind who commit these awful murders? In view of public opinion on this issue, will my right hon. Friend find time so that the question shall be discussed fully in the House at the earliest possible moment?
Mr. Butler: Nobody occupying my position, or, indeed, any other position of authority, could possibly underestimate the public anxiety on this score. I cannot at the moment say when there might be time, but this House usually finds its own way of discussing the things it wants.
Mr. de Freitas: Does not the right hon. Gentleman realise that the White Paper on Agriculture, published before Christmas, has not yet been debated in
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this House, although it envisages continuing the annual subsidy of £260 million? In fairness to the agricultural community and to the other taxpayers, when will the Government provide time to examine this policy in the House of Commons, to see whether we get value for money?
Mr. Butler: I shall have to discuss this with my right hon. Friends principally concerned, but for the present all I know is that this White Paper has been very well accepted by the agricultural community and, as far as I know, by the country.
Sir L. Plummer: Reverting to the question put by my right hon. Friend the Leader of the Opposition about the proposed merger of the Thomson and Odhams newspapers, will the right hon. Gentleman, when considering any statement he will make, consult his colleagues about the commercial television licences involved? One of them was given to the News Chronicle and the other to Mr. Thomson through his Scottish newspapers. Television licences are being hawked around as counters in a deal. Was that the intention of the Government? If not, will there be a statement by the Government about their intentions for the future?
Mr. Butler: This is one of the matters which will have to be taken into consideration before further Government statements are made. Those statements are more likely to be made, in this case, by my right hon. Friend the Prime Minister, with whom the matter has already been discussed.
Mr. Mayhew: May we then take it that an early statement will be made on this subject, perhaps next week? This is an urgent and important subject and merely to state that one or two Questions are down for next week—Questions which may or may not be reached at Question Time—is a totally inadequate answer to the wishes of hon. Members on this side of the House.
Mr. Butler: I must say that the news of this merger came as a considerable surprise to many of us. We need a little time to consider its implications, which are very profound. It is perfectly reasonable to give the Government time until next week before making a further

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statement. The hon. Member himself has a Question down on this subject, and it has already been in the mind of my right hon. Friend.
Mr. Gaitskell: Is the right hon. Gentleman aware that it is not so much the merger itself but the circumstances which led up to it which give rise to anxiety? Will he bear that in mind in any statement that is made?
Mr. Butler: Yes, Sir. I will bring the right hon. Gentleman's view to the attention of my right hon. Friend.
Mr. Lipton: Will the right hon. Gentleman find time, despite the unwillingness of its many signatories to press the matter, to deal with the Motion on the Order Paper dealing with free drugs for private patients? In view of the serious charges of breach of faith by the Government made by many of his hon. Friends, the question should be discussed here and not sidestepped in another place.
[That this House is of the opinion that private patients should be enabled to obtain their medicines and drugs on the same terms and conditions as National Health Service patients; and urges Her Majesty's Government to introduce the necessary legislation without further delay.]
Mr. Butler: We have had a certain amount of consideration of this matter in the House, and no doubt we shall have to consider it again.
Sir B. Janner: Will the right hon. Gentleman say when he proposes to implement his promise to find time for a debate on the Albemarle Report? Is it likely to be discussed at some near time in the future?
Mr. Butler: I will note the hon. Gentleman's request.
Mr. Donnelly: May I revert to the question asked by my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) about the Motion on capital punishment? Is the right hon. Gentleman aware that my hon. Friend is merely asking for the intentions of the Government in this matter to be made clear? The right hon. Gentleman is being less than fair to the House on what is a very serious matter in refusing so far to make matters clear.
Mr. Butler: I am aware of the object of the hon. Member for Nelson and Come (Mr. S. Silverman). have told the House that I see difficulty in finding time for the Motion. Whether these issues will be raised in any other form I do not know, but I do see difficulty in finding time.
Sir B. Janner: Is the right hon. Gentleman aware that his notebook must be very full already in noting what I have asked him to do about the Albemarle Report? Before the Christmas Recess he promised that we would have an early debate on it. What does he intend to do? This is a very important matter and the House should have an opportunity to discuss it
Mr. Butler: I was not aware of any specific undertaking about a debate. I should like the Report to be discussed, because it is a very interesting subject, but it is a question of finding time.
Mr. M. Foot: In saying that he finds difficulty in finding time for the discussion on capital punishment, does the right hon. Gentleman mean what he is saying, or does he mean that he is doing his best to prevent discussion on this matter? He said earlier that the House usually finds time to discuss something which it wants to discuss. Therefore, if the House does find time to discuss this matter, will he appear to answer for the Government?
Mr. Butler: Yes, Sir. The Home Secretary will always appear when it is his duty to answer.
Mr. S. Silverman: On a point of order, Mr. Speaker. I apologise for raising this with you, but I think the House may be able to have assistance from you in this matter. There is an important constitutional principle at stake and we would like any help which you can give us in dealing with what has become an anomalous situation.
It is, I think, common ground that the I-Tome Secretary, in advising the Crown about the exercise of the Royal prerogative of mercy, at any rate after the event, remains responsible to the House of Commons. Responsibility to the House of Commons means being answerable to the House of Commons, making an answer to the House of Commons,

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hearing what it has to say, listening to its questions and offering explanations.
If there is no opportunity to do that, if no time is found, then the constitutional responsibility of the Home Secretary to the House of Commons is stultified and the constitutional principle involved is frustrated. Can you, Sir, help in solving the question of how the House of Commons is to find time in which it can hold the Home Secretary to his constitutional responsibility to the House for the advice he gives? In view of the right hon. Gentleman's pessimism about finding time in the future, it looks as if grave inroads are being made on the constitutional privilege involved.
Mr. C. Osborne: Give a Supply day.
Mr. Speaker: I listened to the hon. Member for Nelson and Colne (Mr. S. Silverman) with care, but I am unable to think that any matter arises there for me as a point of order. The fact is that the House controls its own business, according some of it to private Members and some of it to the Opposition, and so forth.—It is not a matter for the
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Chair to do that and I do not think that I can help the hon. Gentleman in this case.

PERSONAL STATEMENT
Mr. Stonehouse: With your permission, Mr. Speaker, and that of the House, I wish to make a personal statement.
On the 20th December last I sought leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing the position of the three Bahraini political prisoners on St. Helena.
During my speech, when I referred to the possible return of these men to Bahrain, I adopted, without consideration, an interjection that they would
"…have their heads chopped off…"— [OFFICIAL REPORT, 20th December, 1960; Vol. 632, c. 1085.]
It is now apparent to me that that particular comment was quite unjustified, and as it has been widely quoted and has caused wide concern, particularly in Bahrain, I wish unreservedly to withdraw the remark and to apologise to all those to whom it has caused distress.

ORDERS OF THE DAY

  TRUSTEE INVESTMENTS BILL
  [Lords]
  Order for Second Reading read.
  3.50 p.m.
  The Economic Secretary to the Treasury (Mr. Anthony Barber): I beg to move, That the Bill be now read a Second time.
  It is now over thirty-five years since more than minor amendments were made to the general law governing the investment powers of trustees, and even the Trustee Act, 1925, and the Trusts (Scotland) Act of 1921, were concerned mainly with the consolidation of existing law. II is, therefore, virtually true to say that the existing trustee list has remained substantially unaltered for some seventy years.
  I am sure that the whole House will agree that, at least since the end of the war, there has been a growing feeling that the law is out of tune with modern investment practice. The report of the Nathan Committee in 1952 on the Law and Practice Relating to Charitable Trusts echoed that feeling. Four years later, my hon. Friend the Member for Aldershot (Sir E. Errington) introduced a Bill with a view to enabling trustees to invest in certain types of equity shares. More recently, in December, 1959, the Government published their own proposals in a White Paper. Those proposals were well received and it was decided to introduce legislation.
  Hon. Members who have compared the White Paper with the Bill will see that the Bill follows very closely the proposals in the White Paper. There are certain differences where we have tried to meet suggestions which were made following the publication of the White Paper. The primary object of the Bill is to give wider powers of investment to those trustees who are dependent for their powers on general legislation. It is important to keep that primary purpose in mind when one comes to consider the Bill in more detail.
  The Bill will widen the investment powers of trustees in a number of ways. In particular, it will allow a trustee to invest in industrial equity shares. The full extent of this widening of powers
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  can be fully appreciated only by comparing the investments which are included in the first Schedule of the Bill with the very restricted list of investments contained in Section 1 of the Trustee Act, 1925.
  Anyone who takes the trouble to make that comparison is bound to admit that what we are doing represents a very striking advance on the present scheme of things. I want to stress this, because latterly some people have criticised the Government for not giving complete freedom to all trustees. I say "latterly" because there was little or no criticism of the White Paper proposals on this point.
  Perhaps I can explain why we have not given complete freedom, but have thought it proper to set a limit on what the Bill terms "wider-range" investments, but what for convenience, I will from now on refer to as equities. The provisions of the Bill are not designed primarily for the very large trusts. They will, of course, be helpful to some larger trusts, but it is fair to say that these trusts will normally have wider investment powers which will have been conferred upon them by the trust instrument.
  There is a general provision in the Bill requiring trustees to obtain advice before using the powers conferred by the Bill to invest in anything but a very restricted list of securities. No doubt trustees will seek the best advice they can, but, obviously, the small trustee cannot in every case expect to obtain the same quality of advice as will be available to the larger trusts. We therefore thought it advisable to introduce the limitation on investment in equities as an additional safeguard which will limit the loss which might otherwise occur if an unwise investment policy were adopted.
  I have heard it suggested that the Treasury has some ulterior motive in imposing this limit on the amount which can be invested in equities. I assure hon. Members that that is not the case. What we have done is to consider the matter purely from the point of view of the well-being of the trust fund and to avoid any bias in favour of gilt-edged stocks. Indeed, I would have thought that the very fact that we are proposing

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  a fifty-fifty division and the fact that we have made investment in most gilt-edged securities conditional upon the trustees obtaining investment advice speaks for itself.
  Nevertheless, the fact remains that by a suitable selection of gilt-edged stocks, a trustee can ensure that a given amount of money will be available at a given time. He cannot have the same certainty if he invests in equities. Some people seem to believe that one cannot go wrong by putting money into equities, but there is no denying the fact that the equity capital of a company is the risk capital, and if there is a general recession or things go wrong with the company, it is the equity holders who bear the brunt of the burden. If a trustee has to make substantial withdrawals at that time, it means that large amounts of capital can be lost.
  Finally, before leaving this issue, I would like to say that the idea of a limitation on the amount which can be invested in equities is not just a whim of the Government. As most hon. Members will know, it was a feature of the recommendations of the Nathan Report and it has also been adopted in a number of Bills which Parliament has passed in recent Sessions. For example, last Session there were 18 local authority Bills which went through the House and all incorporated a 50 per cent. limitation on investment in equities. The recent House of Commons (Members' Fund) Bill also contained a similar provision.
  Moreover, those of my hon. and learned Friends who appear in the Chancery courts will know that it is by no means the invariable practice of Chancery judges to give trustees complete freedom in this respect. In some cases the courts have given such complete freedom to invest in equities, or have allowed a proportion higher than half to be invested in equities. But it must be borne in mind that the courts are able to look at the circumstances of the particular trust with which they are dealing, whereas in the Bill we are concerned with trying to devise a formula which will be of general application. The Government believe that for this purpose the fifty-fifty method is both reasonable and realistic.
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  If one accepts that some limitation of this kind is desirable—and, as I have said, nobody seriously challenged the idea when it was proposed in the White Paper more than a year ago—then all that remains to be decided is how best that can be done. The method which we have chosen is to provide for the trust to be divided into two parts equal in value at the time of division. It seems to us that this method, which, incidentally, was also explained in the White Paper, has a number of advantages. In particular, it avoids making the limit on investment in equities dependent in any way on the outcome of the trustee's investment policy.
  The two parts of the fund are distinguishable from the outset and if the equity half appreciates there is no bar to the reinvestment of the whole of that amount in equities. This is so even though, because the equity half has appreciated in value, more than half the fund after reinvestment may be held in equities. Moreover, it does not make any difference whether the trustee invests in equities up to the hilt at the outset, or whether he proceeds more slowly. This method also has the practical advantage that it reduces to a minimum the need for valuation of the fund. We thought that these features of the scheme would appeal to trustees.
  Of course, there are other ways in which the matter could be tackled. We might, for example, have applied a limitation by prohibiting further investment in equities when half the fund had already been invested in that way. The proportion could have been expressed either in terms of current value, or in terms of original cost. I will be quite frank with the House and admit that by these or other methods we could possibly have produced a more readable Bill and we might have relieved trustees of some of the work which is implicit in the proposals now before the House. For instance, we might have avoided the necessity to transfer sums from one account to the other, but we decided that the balance of advantage lay with the method which is set out in the Bill.
  I can give the House the reason for this quite simply. We felt that, on the whole, it was a method which gave trustees the most freedom to exploit to the full the basic principle. We have

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  also tried to give trustees as much flexibility as possible. Unfortunately, the price of flexibility is complexity. If hon. Members think that we have paid too high a price, in other words, if it is thought that it would be better to sacrifice some of the flexibility in order to avoid some of the complications, we are certainly ready to re-examine the other methods.
  Turning now to the detail of the Bill, Clause 1 is, I think, quite straightforward. It defines the narrower-range and the wider-range investment and, subject to certain exceptions with which I will deal later, provides that a contrary intention expressed in an instrument made before the passing of the Bill shall not deprive a trustee of the powers conferred by the Bill. At first sight this may seem a somewhat sweeping provision, but it is necessary if we are to avoid leaving a large number of trustees in doubt as to their powers.
  Clause 2 goes to the heart of the matter. It contains the provisions for dividing the fund. It also prescribes the method of dealing with accruals to the fund, and withdrawals and appropriations from the fund. At first sight the provisions dealing with compensating transfers which are referred to in subsection (1) may seem cumbersome, but, here again, the purpose is to give trustees the maximum room for manœuvre. That is the sole purpose of this provision, which allows for compensating transfers between the two sides of the fund.
  We have, in fact, gone further than that by allowing the two parts of the fund to be out of balance for a period of up to one year. It would, of course, be easy enough to simplify the Bill by deleting these provisions. I believe, however, that they are worthwhile provisions which were, incidentally, adopted by the Government as a result of suggestions which were made in another place. No one is, of course, compelled to use these extra provisions.
  I now come to Clause 3 which has, I know, attracted considerable criticism. It is certainly not a simple Clause, but then it is not dealing with a simple subject. I t is, however, of the utmost importance to appreciate both the purpose and the scope of the Clause.
  What we set out to do was to give the trustee three choices. The first choice is
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  to allow him to use to the full the powers of investment given in the trust instrument. The second choice is to let him use to the full the general investment powers given in the Bill to the exclusion of the powers conferred by the trust instrument. The third choice is to provide, so far as is reasonable, for the two sets of powers to be used jointly. It is this third choice and the ability to alternate between the three courses which gives rise to all the difficulties. The job of dovetailing the two sets of powers is immensely complicated because of the infinite variety of ways in which the trust instrument may be expressed.
  We might have taken the easy way out and simplified the Bill at the expense of giving the trustees less room for manoeuvre. Practically the whole of Clause 3 would, in fact, have been eliminated if we had said that trustees must be content with a straight once-for-all option between the powers conferred by their instruments and those conferred by the Bill. But we wanted to go further than that. We believed that many trustees would like to be able to exercise the two sets of powers jointly and would like to be free at any time to use those two sets of powers individually or collectively. We felt—perhaps wrongly—that they would be prepared to face the attendant complexities of Clause 3 to secure benefits of this kind.
  I would like to stress that a trustee who simply wants to exercise the general powers conferred by the Bill need not concern himself at all with Clause 3. This is very important, because, as I said earlier, the primary purpose of the Bill is to help those trustees whose powers are now restricted to the present Trustee List, and Clause 3 is irrelevant to their circumstances. We thought that if at the same time we could help those trustees who already have wider powers, so much the better, but of course if they do not wish to use the Bill to the full they need not do so. They can rely either on the trust powers set out in the trust instrument, or, in England and Wales, they can apply to the courts to have those powers amended.
  At a later stage we propose to table an Amendment with the object of making it clear beyond doubt that the advent of this Bill is in no way intended to

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  inhibit the courts, if they see fit, from giving particular trustees wider powers than those contained in the Bill. This Amendment will underline the assurance to that effect which was given by my noble Friend the Lord Chancellor, in another place.
  Before I pass from Clause 3, perhaps I can say this. It will be relevant only in a limited number of cases. Those are cases where there is the following combination of circumstances. First, the trust instrument must already contain special powers of investment. Secondly, the trustees must be dissatisfied with those powers. Thirdly, the trustees must be dissatisfied with the general investment powers provided under the Bill. It is only in those circumstances that they will look to Clause 3.
  The next Clause—
  Mr. G. R. Mitchison: Before the hon. Gentleman passes from Clause 3. will he tell us how it works?
  Mr. Barber: Yes. If a trust instrument contains special powers of investment the trustees will have to consider whether they wish to proceed under the general powers of the Bill; in other words, to invest up to 50 per cent. of their property, as defined in the Bill, in equities, or whether they wish to proceed under the powers given to them by the trust instrument, or to combine the two. I have indicated that already, but I shall explain later why we did not think that we could go further than we have in Clause 3 and simplify it by allowing as it were an accumulation of powers, by allowing trustees to exercise both the powers under the instrument and the general powers in the Bill to the full. It is because we felt that there must be some limitations—for reasons which will appeal to the hon. and learned Gentleman—that the Clause has become so complex.
  Clause 4 defines a trust fund for the purpose of the Bill and indicates what property in the hands of the trustees should count against that fund. We tried to keep the exceptions set out there to a minimum so as not to add further to the complications of the Bill, but we shall certainly be ready to examine any suggestions which hon. Members have for improving the Clause.
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  Clause 5 is an important Clause. It requires a trustee to have regard to the need for securing a diversified portfolio, and it also requires him to get advice before investing in anything but certain specified small savings securities. It is at this point, the House will note, that the Bill differs from the proposals set out in the White Paper.
  Our original intention was to prescribe an arithmetical rule for diversification of investments. The White Paper stipulated that not more than one-tenth of the fund, or £250, whichever was the greater, should be invested in any one company. We also had it in mind to define the term "investment adviser" in more precise terms. The White Paper mentioned stockbrokers, accountants and bank managers as examples of suitable professional advisers. But as a result of comments made on the White Paper we decided that it would be better to couch both these provisions in more general terms. Further improvements were made during the course of the debate in another place, and I think that the Clause now meets the need adequately without being unduly restrictive.
  The remaining Clauses of the Bill deal with its application in particular cases. Whilst some of them are important—and I have in mind particularly the provision which gives local authorities power to invest collectively—I do not think that hon. Members would wish me to dwell in detail at this stage on the subsequent Clauses.
  I have tried this afternoon to show not only what we are trying to do, but also why we have chosen a particular method of doing it. We have followed as closely as possible the principles outlined in the White Paper and, as I said earlier, there was no serious criticism of those principles. At the same time, within the confines of those principles we have tried to leave trustees as much discretion as possible in conducting, the affairs of their trusts. It may be that we have tried to achieve too much, and that in the interests of simplicity we would have done better to adopt one or other of the alternative methods I mentioned earlier. It may be helpful to hon. Members, therefore, if, before sitting down, I say another word about those alternative methods and outline their advantages and disadvantages.

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  One method would be to give trustees a straight, once-for-all option between continuing to use the powers conferred by the trust instrument and taking advantage of the wider powers conferred by the Bill. If a trustee elected to retain the instrument powers he would still be able, in addition, to invest in any of the securities mentioned in Parts I and II of the First Schedule, which are, roughly speaking, gilt-edged securities. But, unless permitted to do so by his trust instrument, he would not be able to invest in any of the securities mentioned in Part III, namely, equities. The great advantage of this method would be its simplicity; Clause 3 would virtually disappear. But the disadvantage is obvious; it would give some trustees much less latitude than they would have under the Bill as at present drafted.
  A second alternative would be to set on one side all investments made under the special powers and to apply the provisions of the Bill only to the rest of the moneys in the hands of the trustees—that is, to the money which was not invested under the special powers. This method would have capricious results. In some cases it would allow an accummulation of powers which would clearly be quite contrary to the intentions of the testator, of the courts, or even of Parliament.
  For example, a court might recently have decided that in the circumstances of a certain trust the trustees should have power to invest 50 per cent. of the trust fund in equities. If we were then to permit the trustees to apply the provisions of the Bill to the remaining 50 per cent. of the fund we would, in effect, be permitting them to invest 75 per cent. of the fund in equities, which would be 25 per cent. in excess of what the court considered appropriate. That method, therefore, cannot be regarded as a serious starter.
  A third method would be to apply the 50 per cent. limit on investment in equities by reference to the current value of the investments. We could say that so long as the value of the equity investment was at least 50 per cent. of the value of the fund the trustee would be debarred from making any new equity investments. The disadvantage of this method is that it would give a trustee rather less discretion, in certain circum-
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  stances, and it would involve a trustee operating near the limit in rather more valuation work than is necessary under the Bill as drafted. On the other hand, there is no doubt that if we adopted this simplified method it would be possible to dispense with most of the complications of the present Clause 3, and also with some of the accounting work necessary under Clause 2.
  A variant of this method would be to control the limitation on investment in equities not by reference to current value but by reference to the initial cost of the investment. This method would avoid the need for frequent valuation, but it would certainly raise some difficult questions concerning the definition of cost. This method, too, would do away with Clause 3 in its present form, and would simplify Clause 2, but, again, it would give the trustee rather less discretion than he gets under the Bill as now drafted.
  I have taken the rather unusual course —in opening a Second Reading debate—of putting before the House several alternative methods of implementing the principle set out in the White Paper. I have done so because the purpose of the White Paper was to seek the reaction of the professions and also of the general public to the Government's proposals before they were embodied in the Bill, In the weeks following the publication of the White Paper there was virtually no criticism of the fifty-fifty principle—the power to invest 50 per cent. in equities and 50 per cent. in gilts. Consequently, the Government proceeded on that basis.
  There are, however, several methods of implementing that principle, and the Government gave a great deal of thought to the question of which would be the best one. Since the Bill was considered in another place my right hon. and learned Friend the Solicitor-General and I have considered the matter further with the Lord Chancellor. I therefore thought it right to put before hon. Members, at the time when the Bill was first being considered in this House, the pros and cons of the various methods of implementing the fifty-fifty principle accepted in the White Paper.
  The choice between these several methods is not an easy one, and we are ready to re-examine any of them if hon. Members think it offers real advantage.

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  We are certainly not wedded to the particular method now contained in the Bill. But, whatever method is adopted, I think that the House will agree that the principle of giving, to those trustees who are dependent on general legislation for their powers of investment, the power to invest 50 per cent. of their trust fund in equities is a considerable and commendable step forward.
  4.17 p.m.
  Mr. G. R. Mitchison: Hon. Members on this side of the House have no objection to the principles of the Bill. They have objections to the machinery, however, some of which will come out in Committee. I think that they would all desire to say that the Bill is not only due, but rather overdue, and, further, that it now appears that there is at any rate one way in which it could well have gone further than it does.
  We are recognising, in effect, that the practice of a prudent settlor, dealing even with comparatively small sums, is not to tie up the trustee to the strict terms of the Trustee Act, 1925, and its various modifications. As a rule, the practice nowadays is to go beyond that. Those who are in positions of similar responsibility, whether or not they are actually called trustees, also go beyond it in the same way. I have here the last report of the Church Commissioners, a body to whom it is always useful to refer in matters of investment. It appears to receive and to act upon singularly good advice, with—I hope—excellent results for those sometimes needy people who have to depend on the fruits of their investments. In fact, the Church Commissioners go quite a long way beyond the 50 per cent. mentioned in the Bill.
  I want, first, to deal with one or two small points, and to do no more than indicate them, because, generally speaking, they seem to be Committee points. The Economic Secretary, who gave us a very clear exposition of the matter, seemed to get a little lost when he reached Clause 3. He is not the only person to be in that predicament. On several occasions he told us that there were three choices open to a trustee: he could use what are called in the Bill his special powers; he could use the powers given in the trust instrument itself; or he could
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  combine the two. We all wanted to hear how he would combine the two.
  That is what the Clause is about. I can only say that I am not going to try to explain it. I know that the Solicitor-General will speak at the end of the debate and that no one is better known in the House for courteous and clear explanations of extremely complicated subjects. I hope that when he comes to it at least he will admit that this Clause is as bad as the worst part of a Finance Bill, though it does not look it, and is nearly as bad as the arrangements for the rating of water undertakings, about which one of his colleagues recently had to say something to the House.
  Seriously, I believe that this is the place where the difficulty of applying the Bill will appear. It is not in the formation of new trusts or in cases where there are existing powers confined simply to what are commonly called trustee securities. It is in cases where there are other powers and other property and the question is: what is the position of the trustee who wants, in some respect or another, to avail himself of some power in the Bill slightly wider than the special powers he has already?
  One of the points about which I hope we shall hear more is this. There are, of course, in the Bill narrower range securities of two kinds and what are called wider range securities including ordinary shares. Although both the lists are sweeping ones there are a great many trusts which do other things than that. There is the position of the trustees holding real property for instance, and I see that this caused a little trouble in another place. We should like to know what is the difference between the position of the trustee who sets aside in a special fund a house which is occupied by the beneficiary the special case mentioned in Clause 4 of the Bill—and the position of a trustee who has to deal with other real property. It has not escaped my attention that there is some interest in real property which can be taken even under the narrow range securities though I think the wider range list in that respect does not add anything. That is what I may call the Clause 3 point.
  I come from that to consider the general question of the Bill. I said that the Bill was overdue and indeed it is.

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  The position of a trustee, or rather of a beneficiary under a trust strictly tied to trustee securities has been getting worse and worse in comparison with the position of a beneficiary where there is a prudent trustee with sufficient powers to invest in other things. Gilt-edged securities ever since 1950, or 1951, have been falling and ordinary shares, by and large, have appreciated. I do not want to go into the details of it, but anyone can find the figures in the Annual Abstract of Statistics. There is no certainty whatever that that position will continue and the hon. Gentleman was perfectly right in saying that we cannot expect ordinary shares to go up for ever. Indeed, at the moment they are probably not going up. But that has been the trend and not merely for those ten years, but for some considerable time previous to that.
  If we look at the position of, say, ordinary 2½ per cent. Consols, when the Tory Government came to power they stood at 66; they are now 52, and the general range of long-dated securities has followed a similar course. The Government must accept the fact that their comparatively dear money policy and their use of a varying Bank Rate as an instrument of policy to an extent to which it was never used before and to an extent which I should have thought was rather doubtful wisdom—though one does not want to go into that now—has made the position of a trustee confined to gilt-edged securities and that trustee's beneficiaries, more difficult and uncertain than in the past. It is largely because of that that I repeat, I think this Measure or something of the sort is overdue.
  With reference to that I wish to consider for a moment what we are really dealing with here. On the whole, we are dealing with trusts most of which will be for the life interest of widows or the child interest of infants. Of course, there are many other trusts, but, if I understood the intention of the hon. Gentleman rightly, it was not large trusts but this kind of middle-class Victorian instrument—because that is what it originally was—that we would really consider. Of course, those trusts are necessary in view of other legislation and it is, therefore, our duty to do the best we can for the persons affected.
  When we turn to the Radcliffe Committee's Report we find that in one
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  respect we have a standard of comparison in two directions. The insurance companies nowadays, at any rate in relation to their life funds, are not in a very different position from trustees and yet, of course, they have shown clearly how necessary it is that there should be some such extension as is now indicated. On page 84 of the Radcliffe Committee's Report-I am not going into this in detail—there is a table which shows, for instance, that in relation to life funds we get somewhere in the region of a quarter —one cannot get it exactly, perhaps one-third is nearer—invested in what would be, under the Bill, wider range securities.
  When we turn to what is perhaps an even better comparison, that with the superannuation and pension funds of companies and the like, we find that the proportion there is rather higher. If we take company preference shares and ordinary shares, they alone are a quarter of the investments at the end of 1957. If we look at what happened during that year, which was the year that the Radcliffe Committee was considering, we find the investment in securities of that type for the purposes of these funds is almost if not quite equal to the investment in gilt-edged securities.
  I am inclined to think that the fifty-fifty proportion is not far off the mark for a first attempt, but I wish the Government had been able to be a little more realistic about the future. One does not want amending legislation in a matter of this kind. This is really a Committee point and I simply mention it because the Bill seems to me to be rigid.
  To turn from those pension funds which are, of course, constituted by people with full knowledge of these matters and contain extensive powers, as, indeed, appears from the nature of the investments carried by the funds, to one other consideration, we have been lately considering in connection with National Insurance alternative schemes, one a Government scheme and another a scheme which may be set up by a company, something in the nature of a pension fund. The pension fund in cases of that kind, as we see here, has the advantage of being able to invest in ordinary shares. It has the type of advantage which is intended to be conferred by this Bill

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  But not so with the Government's own funds, which are held by the National Debt Commissioners, who make a return of what they consist of. I have the list here. It is a public list and there are copies in the Library. The result is that about £300 million, which is a large amount, in the National Insurance Fund itself, is, of course, in Government securities, and in that case I do not say short-dated but tolerably short-dated ones. A far larger amount is held in the National Insurance Reserve Fund. These are the two funds referred to in the National Insurance Act, the first one in Section 35 and the next one in Section 36.
  That National Insurance Reserve Fund frightens me. I think that if an ordinary private trustee had distributed the investment of these funds in the way in which the National Debt Commissioners—one of whom is the Chancellor of the Exchequer—have been directed by the Treasury to do so, he would have laid himself open to a little trouble in the Chancery Court if anyone had chosen to take the matter up. All these securities are comparatively long-dated and if we take merely those with twenty years to run or the undated ones, we find that they are about £300 million out of about £500 million in the actual Government stocks. They include, to mention a particular case, £211 million of 2½ per cent. Treasury stock 1975 or after. Suppose a private trustee had done that, would we really have considered his use of the trust funds as prudent, or indeed reasonable?
  Mr. Denzil Freeth: Is it not a fact that that particular holding was there when the Conservative Government took office in 1951?
  Mr. Mitchison: That may very well be. I am not concerned with that and it is rather absurd to make this depend on questions of which party was in power. The point is a matter of principle. The provisions are at present that the National Debt Commissioners should invest only in what the Treasury tells them to invest. I never remember, for instance, which are called "Daltons" and which are not, but I do not think it matters.
  Sir Henry d'Avigdor-Goldsmid: I suggest that the inability
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  of the hon. and learned Member to remember the name of the particular stock is a Freudian lapse of memory.
  Mr. Mitchison: These are matters which can hardly be investigated further on a Bill dealing with powers of trustees. They seem more appropriate to a discussion about psychology.
  There is this immense amount of public money, not merely held, but actually invested. It is in the position of a pension fund on a very large scale coupled with an accident insurance and the like. Because it is public money it does not get the opportunity of the guard against inflation, which, in effect, the powers in the Bill are meant to be. I should remind the House that at the last General Election—and, of course, anything which the losers say at the last election is no longer their policy, as we heard yesterday from the Minister for Science, in another place—we urged that there should be an opportunity for public funds, particularly these funds, to be invested more widely and to include ordinary shares.
  We were told that was a dreadful, a poisonous suggestion. It meant nationalisation by the backdoor, and so on. I merely say to the House that it is unfair, when we get, on the one hand, pension funds of private companies and, on the other, what is really a public pension fund dealing with very large sums indeed, to allow one to have powers which are denied to the other. I wish that the Bill had gone very much further and, as well as providing for the case of persons who were bound to conform to the provisions of the Trustees Act, that it provided for the case of those particular funds which are tied to investments of a character designed for saving banks.
  Savings banks were a very different matter and it seems somewhat absurd that that particular provision should remain. I accept, of course, at once that these Clauses were put into an Act passed by a Labour Government, but Labour Governments—and sometimes even Tory Governments—find that circumstances have changed and that powers have to be enlarged. That has been the case in relation to powers of trustees and ought to apply in this case.
  I have one last comment on the Bill as a whole. A great many of these trusts

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  will be small. I see the point made by the hon. Gentleman about the machinery being complicated. It is complicated machinery. I hope that in Committee we shall look very hard at it and consider whether we can simplify it, particularly in the matter of valuation and division, I see the difficulty of doing that. I thought that the hon. Gentleman put it very clearly and convincingly, but if, among us, we can find a way to make matters simpler to trustees—in the case of small trustees, at any rate—that will be a considerable advantage.
  Similarly, on the question of advice. The steps which a trustee is required to take under the Bill, except in the matter of division, are things which I think a prudent trustee would be required to do now. It is merely that they will have to do them under the Bill, but written advice in the form proposed is rather new. The Government, wisely, gave up the invidious attempt to define people competent to advise. I should say some, but not all, stockbrokers would qualify. It is not always wise to get stockbrokers to advise about things, when they get commissions, and they would be the first to recognise that that is so.
  Mr. Cyril Osborne: Is it not the same with lawyers and the law?
  Mr. Mitchison: Yes, but that is a little different. I found, when practising at the Bar, that lawyers spend a considerable amount of their time in dissuading litigious clients from going to law. I have not noticed the same enthusiasm among stockbrokers to dissuade people from investing.
  Be that as it may, I do not want to be discourteous to a class of people whom I respect, and one or two of whom I see before me. That is not in the Bill, but what is in the Bill is that there should be advice from someone whom the trustee thinks has reasonable financial competence. I do not quite know what the provision means. In the nature of the case, the trustee is not supposed to have financial competence himself, but it is on his judgment that this depends. It might have been better to have been more specific. Perhaps it does not matter, because at the end of the day, although the advice has to be in writing and given by a person competent in this way, the discretion of the trustee will have been
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  preserved and there will be nothing to oblige him either to keep the writing or to follow the advice. It is not so desperately serious.
  We on this side of the House think that the Bill is overdue. It does not go far enough, and wants looking at in detail, but we support it on Second Reading.
  4.38 p.m.
  Sir Lionel Heald: When the White Paper appeared in December, 1960, proposing to widen the powers of investment, it was very warmly welcomed and there is, as there ought to be, today a general appreciation of the decision of the Government to legislate in that direction.
  I begin my speech by saying that I thoroughly support the principle of the Bill and would like to see it on the Statute Book as soon as possible. I certainly support the Second Reading very firmly. I must add at once that as the Bill stands there are certain defects and difficulties involved in it which must be remedied if it is to have any chance of being generally accepted by those very people for whom it is intended—the trustees and those on whose behalf they act.
  My information leads me to believe that there is considerable anxiety as to whether the Government, at any rate until the last few days, have appreciated what the difficulties are, and one feels that they have been a little reluctant to pay attention to what has been urged upon them by those who are concerned with the practical side of the matter rather than those who are concerned to see that this is a neat and tidy Bill which provides all the answers to all the questions and all the problems.
  Many trusts, of course, have been enabled to get a wider measure of freedom by other means, particularly the Variation of Trusts Act, and in some cases by Private Bills and proceedings of the Privy Council in respect of corporations. A large number of smaller trusts, among them some comparatively old trusts, on the other hand, are still suffering under the unfairnesses which Lord Nathan's Committee fully recognised. As has been said today, therefore, and as is generally accepted, legislation is long overdue.

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  When the White Paper was first issued there was not very much critical consideration of it, because the general feeling was, "It is an excellent thing and good luck to it". The fifty-fifty division, in particular, was regarded by those with great experience in the matter with some misgiving but, as so often happens in these cases, the implications of it were not studied. The subject is extremely complicated and difficult, and most people simply did not appreciate what machinery would be required to operate a fifty-fifty division and to provide a workable system to make it effective. Now that the Bill has emerged from another place in its present condition, hon. Members must be aware that there is a considerable amount of concern up and down the country about its effects and about some of the very striking changes which are involved in the whole conception of the conduct of trustees from the legal point of view.
  Very few people have fully appreciated it. It is a remarkable fact, bearing in mind that this is a very important Bill, that as far as I have been able to find from my researches there has been no reference to it in The Times. There was a recent article in the Financial Times on 12th January, which illuminated some of the difficulties but, generally speaking, this very important Bill reaches the House with a great many trustees not knowing what is involved for them.
  There are one or two points which need very careful examination. I will say at once that I have no personal interest in the matter. Nobody ever has employed me, or would ever be likely to employ me, in connection with matters of this kind, and I have no special knowledge of them, but I have fairly close contact with people who are connected with this subject, and I can assure the House that there is considerable concern among the legal people who have to deal with this work every day.
  There is also considerable concern among trustees in the shape of the corporate trustees, for example the investment department of a bank, who handle tens of thousands of accounts in this field. I understand that they have recently been received and have had discussions on this matter, but I have the impression that they did not think that their representations were likely to have
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  very much effect. In any case, we will hope that in due course we shall have an assurance that their very careful representations will be taken fully into account when we come to the wording of the Clauses. Perhaps I may add that the professions involved—solicitors and barristers—could not be said to be concerned for their own welfare in urging changes in the Bill, because it would be more to their advantage to leave the Bill as it is. In certain respects it is a lawyers' paradise.
  Clause 3 has been mentioned, and I dare not succumb to the temptation to go into it in detail. I have worked out some figures and some examples, but I am rather nervous whether I should put them before the House. I think that the best thing is to leave it, because it appears fairly clear that the Government have realised that they must have second thoughts about Clause 3.
  It may be one of those cases in which it was thought that a tight and perfectly drafted code must be designed in order to retain the agreed fifty-fifty division. It may be that we can avoid some of these complications which I have had demonstrated to me and which I believe are very serious. They may have the effect of driving a number of people away from being trustees—and, there again, I mention the investment departments. Certainly, they are not acting selfishly, because the effect of the Bill as it stands might well be to make people say, "The only way we can do this is to go to one of the banks, because they may be able to find out the answer whereas we certainly cannot".
  I wish to make three quite short but very important points. The first concerns the fifty-fifty division. Everybody agrees that the fifty-fifty division is purely and entirely arbitrary. This reminds me of a man well known to many hon. Members who, during the war, arrived at Supreme Allied Headquarters in the rank of brigadier. His previous rank had been that of a private in the Officers' Training Corps. On his arrival somebody said, "This is a little thick, your arriving here as a brigadier." He replied in his inimitable manner, "My dear fellow, one must start somewhere, I suppose". That is what had to be done here, and I do not think that it was appreciated at the time what would happen. Having said

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  that the figure should be fifty-fifty, the view seems to have been that sometimes one must go to all lengths to preserve it, and that leads us into great confusion.
  I will not discuss that further, but there is a further consequence of it which is very serious and which I venture to suggest, with the greatest possible respect, that the Government have not yet appreciated. Under the Variation of Trusts Act, it has been possible and common since 1958 for trusts to go to the courts and to get a variation which put them in a far more favourable position than fifty-fifty. Orders are being made in the Chancery Division today. Let us suppose that we say in Parliament that we think that fifty-fifty is the most which should be given. We have been told today that this will be dealt with very simply by putting a provision in the Act to say, "This Act will not affect the exercise of discretion by the Chancery judge."
  I have made inquiries from my friends who are practitioners at the Chancery Bar, and they are gravely apprehensive about the position. In fact, they assure me that unless something remarkable is put into the Act, judges will say, "We cannot go beyond what Parliament has decided is right except in the most exceptional circumstances".
  I should like to give the House an example of the sort of thing which may arise. One judge has recently made a number of orders on the condition that they are valid only until this new Act comes into force, when they must be reviewed. Most of the orders have not been made on that basis. Thus, one may have two similar trusts, one not made on this conditional basis and having 80 per cent. or 90 per cent. or perhaps 100 per cent., and the other made on this conditional basis. I am assured by those who know that when they are brought before the court the judge will say—unless some matter can be found to affect his mind—that 50 per cent. is the most that they will get. It is a very serious matter.
  I believe that it was said in another place that there would be consultation with the judges and that some method would be found of dealing with the matter. We have heard nothing about any statement being agreed or any consultation with the judges, and, although
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  I know nothing about it personally, I assume that there has not been any consultation with the judges.
  It is very unfortunate if that is so, because there may be differences of opinion amongst individual judges. Merely to say that the judges are still to exercise their discretion is not, I believe, an answer to the matter at all. One may say, "How is one to plan it?" It will be very difficult to put privilege in an Act of Parliament and say that in no circumstances shall the judge, in exercising his unfettered discretion, take any notice of what Parliament has decided; but that, apparently, is the sort of thing it is suggested should be put in.
  If one says that the judge should be entitled to exercise his discretion, all I can say is that the best information I can obtain from the pundits of Lincoln's Inn—and no body of men know more about this subject—is that they assure the it will create a very difficult situation indeed. If that were the situation it would mean that, far from improving the condition of trusts, it would, in many cases, make it far worse. I do not say that it cannot be done, but I say that it will require very careful consideration.
  In particular, I hope that my right hon. and learned Friend the SolicitorGeneral—and I feel a great pleasure and privilege in being able to address him in that way, because I know how greatly he deserves that great honour—will be able to assure us that this matter will be taken up and considered very seriously in conjunction with those who have to consider the Variation of Trusts Act and who will be placed in a very serious position unless the matter can be dealt with clearly and definitely.
  I want to draw attention to the very extraordinary provision—in the minds of lawyers, at any rate, who are accustomed to this subject—in the Clause which deals with the withdrawal of property and which requires that there shall be an absolute equality of withdrawal as between the two halves. I explained that to one of my very learned Friends and he appeared, at first, to be greatly astonished. He then ejaculated a very emphatic disapproval of that provision. He said that he had never heard such nonsense.

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  It is a new law and it has never been required by any judge that we can ascertain. There is no suggestion in the White Paper of anything of the kind and if one thinks what the consequences may be if, from time to time, there is money to be withdrawn from the trust for education, or other purposes, what do we do at the present time? One consults one's professional advisers and they will advise on what money can be taken out of the trust. If one does that the next thing is that one will find that that advice must be thrown aside, because one cannot break the sacred fifty-fifty. That seems to be quite wrong. It is a sheer passion for tidiness and I suggest that it must go.
  Lt will then be said by someone that that upsets the beauty of the scheme, and so forth. So much the worse for the scheme is the answer to that. It serves no useful purpose because at any time after the division the shares' values will alter and one does not preserve the absolutely perfect equality. One almost wonders whether the draftsmen could not have gone further and said that there must be a revaluation and redistribution in half every six months. It comes to very much the same thing. The Bill is intended as a means of dealing with investments and it should not be used as a means of controlling the sale of property.
  There is, finally, the question of Clause 4, the inclusion of land. Why is land included? Surely it should be excluded until it has been turned into money and when the money is invested it goes into the pat. After all, it is familiar that trustees may have control and responsibility for things like jewellery, furniture, houses and even farms and stock. When one starts discussing the wide and narrow range of investments in relation to those things one wonders why they have not put in a provision saying that the second or third generation of cows or pigs should be regarded—of course, if they were gilts I suppose that it would be all right.
  Undoubtedly, it is something which lawyers feel is quite wrong and quite mistaken. Land varies immensely these days as regards the standing of investments. There is some land that everybody will agree is more or less a cast-iron investment—at any rate, in present political conditions, but one does not know what it would be in other possible circum-
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  stances. In normal conditions there is a great deal of land which has a very high investment value. In other cases it is very different. The general conclusion amongst those with whom I have discussed this appears to be that land should be dealt with separately altogether. That is the way in which it is normally done.
  I hope that I have not detained the House too long, but I think that on a Bill of this kind we should look at its provisions with great care. We are doing something of tremendous importance. We are doing it for people who are very often in danger of being forgotten because they do not understand these legal problems. They are very lucky not to have to deal with them. They have to rely on their trustees to do the best they can for them.
  I ask again for these very definite undertakings. First, that the question of the Variation of Trusts Act will be taken very seriously indeed, and far more seriously than it has been taken so far. It cannot be dealt with, I suggest, simply by putting in the Bill a Clause which will have no practical effect at all. There should also be consultation with those responsible for the administration of that Act.
  Regarding the provisions of Clause 3, for example, I would ask for an undertaking that there will be consultation with people like the banks and the corporate trustees and that not only will they be allowed to get up and say what they think, but that real attention will be paid to what they say. It must be realised that the people who are to administer this Act are not the people in Whitehall who drafted the Bill; they are the people who have to do the job as trustees.
  On that basis, if that is understood, I would like to end where I began, by strongly supporting the Bill in principle. I hope that it will bring real relief to the trustees, who, on this subject, as most of us know, are living in great anxiety.
  4.58 p.m.
  Mr. Glenvil Hall: For many years there has been agitation for some sort of change to the Trustee List, which has led to the introduction of this Bill. The reason has been the drop in the value of gilt-edged securities. If the

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  Trustee List had remained as many hoped it would several generations ago, there would have been no outcry and no need for a Bill of this kind.
  Like most hon. Members in the Chamber at the moment, I followed the debates in another place very closely. The more I read them the more I realised how complicated this Measure is and how unlikely it is that when it reaches the Statute Book—if it reaches it in its present form—it will do what we all want it to do. It was said there —and it is a fact we are all familiar with—that a trustee's real duty is not to the immediate beneficiary drawing the income. His chief duty, and his chief concern, is to protect the corpus—that is, the capital invested. Those of us who have been trustees, even in a small way. particularly where the instrument setting up the trust has been quite wide, have often been extremely worried about investing the money in order to protect its value. This consideration came before the income for the immediate person enjoying it.
  I wonder if the Bill will help in that direction. I listened, as we all did, with great care and interest to what the Economic Secretary said. One of his reasons for the fifty-fifty basis is that trustees:lust not be allowed to run away with themselves in buying equities. I agree that there should be a balance and, although I am not wedded to the fifty-fifty bass, if there is to be legislation at all some basis must perhaps be put in. The fifty-fifty basis is perhaps as good as any, but most trustees, particularly if they take expert advice, as they will have to under the Bill, should be capable of being trusted themselves to strike a proper balance.
  Mr. John Diamond: If trustees are bound to take advice and are expected to arrive at a sensible balance of investments, will my right hon. Friend explain a little more carefully why he thinks it necessary that there should be any principle for the division?
  Mr. Glenvil Hall: I do not want to quarrel with my hon. Friend the Member for Gloucester (Mr. Diamond) or enter into an argument on this point. Many of those who spoke when the Bill was passing through another place seemed to take the view—at the moment
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  I am not quarrelling with it—that if there is to be a Bill at all some basis should be laid down. As I have already said, I personally should be willing to leave it to the good sense of trustees, particularly as under the Bill they have to seek expert advice.
  One of the points the Economic Secretary made when dealing with this aspect was that equity shares fluctuate in value. That is true. I did not interrupt him then, but I remind him now that gilt-edged securities have fluctuated a good deal more, if "fluctuated" is the right word to use. Whereas equity shares have gone up as well as down, many gilt-edged securities, especially the undated ones, have gone down and down and down. Those of us who are interested in superannuation funds where considerable sums have had to be invested over the years in gilt-edged securities are very worried at the drop in the value of many of the securities into which the money has been put. We can foresee no reversal of that trend. If the Bill does not—as it does not—help to redress this, the Government will have to take notice of it eventually.
  The Economic Secretary did not make any mention of what is the real difficulty, namely that gilt-edged securities have gone down and many of them show no likelihood of every going up to any appreciable extent. We want really from the Government some scheme which will help to rehabilitate gilt-edged securities.
  I have heard it said that a sinking fund should be established or that a date should at last be put on those securities which at present are either very long-dated or not dated at all. I have not the slightest doubt that something of the kind is the real solution and I am fearful that, if we pass this Measure in its present form, it will cause many a trustee sleepless nights and not help in the work he has to do.
  It is a curious commentary on the national credit that so few investments are mentioned in Part I of the First Schedule. It is astonishing that only Defence Bonds, National Savings Certificates and Ulster Savings Certificates are amongst the few classes of securities which can be bought without requiring advice. That is simply because those are among the few Government securities which are not likely to depreciate in value.

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  Although I welcome the Bill as far as it goes, I foresee enormous difficulties. I cannot understand why the Bill should be so complicated. All that is required to do is to provide trustees with a wider range of investment for the moneys which they have at their disposal. That is a simple, straightforward object. Several bodies have considered this problem over at least the last eight years, but even after the expert advice the Government have received, it seems they cannot devise a simpler remedy than the one proposed in the Bill.
  I hope, however, that when the Bill reaches Committee we shall alter it drastically in order to make it more in keeping with the realities of the situation. This I am sure is the desire of the House as well as of those who now act as trustees.
  5.6 p.m.
  Sir Hugh Lucas-Tooth: I view the principle of the Bill with rather less enthusiasm than that evinced by hon. Members who have spoken so far. I view its method with even more distaste. The reason for the Bill is set out clearly in paragraph 2 of the White Paper, the important words being:
  " In the last twenty years the decline in the value of money in relation to other forms of property has meant that the restriction of investment almost wholly to fixed interest securities has in many cases failed to ensure the maintenance of the capital of the trust fund in real terms. The pattern of investment of trust funds is therefore not what an investor today would be likely to adopt. This has led to the desire by many trustees to be allowed to invest trust funds in ordinary shares of industrial and commercial companies."
  That is the whole case for the Bill. No one has suggested anything else. I agree that what is said is absolutely true, but if that is so the Bill is a case of locking the stable door after the horse has been stolen, and it is about the worst one that I can remember seeing.
  After all, the losses which have been incurred by trustees and their beneficiaries have already taken place. The Bill does nothing whatsoever to restore them, and it could not do so. The loss is permanent. We are not dealing, as was rather suggested by the hon. and learned Member for Kettering (Mr. Mitchison) and by the right hon. Member
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  for Colne Valley (Mr. Glenvil Hall), with a mere Stock Exchange discount which could some day right itself. Even if all the securities in the present trustee list were immediately repayable at par, those who have had them for any time will have permanently lost two-thirds of their money in real terms.
  The Bill does not touch the past. It is concerned solely with the future. The intention is to enable trustees to ensure the maintenance of the capital of the trust fund in real terms—not the original capital, but the depreciated capital. Its purpose, therefore, to put it in rather crude terms, is to enable trustees to stop the rot.
  On the whole, that contention appears to have been accepted. It is accepted by the Government and by those hon. Members who have spoken so tar, but I have some doubt about it. It is one thing for an individual to permit his trustees to continue to hold and to invest in the same type of investments as he himself has held. It is another thing altogether for a Statute to seek to alter the character of established trust funds.
  Fixed-interest investments at present give a yield of between 5 per cent. and 6 per cent. at market price —the longer-dated and the undated yielding not far short of 6 per cent. On the other hand, high-class ordinary shares give a yield of between 3 per cent. and 4 per cent.—in some cases, even less than 3 per cent. That means that, in so far as trustees take advantage of this Bill, their beneficiaries must be willing to accept a loss of between one-third and one-half of the income from the investments that have changed.
  That, of course, is not an end of the matter. If the Bill should be extensively used there will be a considerable unloading of fixed-interest investments and a considerable demand for equities on the market and that, on the whole, will tend to widen the gap and make the difference even greater. I imagine that my hon. Friend the Economic Secretary has considered this. He did not refer to it in his speech, but I should like an assurance on that score before we finish the debate. My own view is that we really need not worry very much about that, because I believe that the sacrifice of income is so great that, on the whole,

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  this Bill will tend to be a dead letter as regards the old trusts, which are the ones at which it is aiming.
  There is another aspect. The purpose of this Measure is to hedge against the possibility of further inflation. A private individual may properly hedge—indeed, that is a normal and proper thing to do —but it seems to me to be quite a different thing when the Government of the day assist in that process. It makes me feel somewhat uneasy. In the case of a Goverment, the process of hedging is not, as it is in the case of an individual, mere speculation as to what may happen. The Government control, or should control, the economy of the country. One may not know what future Governments may do—not even the present Government can foretell that; at the same time, I do not like to see the Government conniving at this sort of thing. On the whole, it seems to tend to put a little more grease on the slippery slope of further inflation.
  Having said that about the principle of the Bill, I must say that I think its mechanism is even more open to criticism. I do not at all criticise the drafting. If we are to do what the Bill proposes to do, this Measure is as clearly drafted as it could be. On the other hand, it is extremely difficult to understand, and the attempt to understand it will throw a very grave burden on very many trustees.
  Perhaps I should here declare an interest. I am a trustee of a good many trusts. I receive no pay in respect of any of them, or any benefit of any kind from most of them. I undertook the task on the basis of the law as it stands now, but this Bill will throw a very great burden on myself and on all trustees. If we go on doing this sort of thing, we shall have to consider the possibility of further legislation authorising the payment of trustees—but that, by the way.
  I do not think that even the lawyers will say that Clauses 2 and 3 are at all easy to understand. It is perfectly easy to state the two principles upon which they are based. One is that trustees should be given power to invest up to half their funds in ordinary shares, and the other is that the existing wider powers of trustees and the powers under the Bill are to be concurrent. Those principles are simply stated in that way, but it is
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  much more difficult to set them out in precise language as the Bill attempts to do. Again, I do not criticise the draftsmen; the difficulty is a real one, and cannot be overcome by mere drafting.
  The trouble is that the Bill has adopted the most fantastically difficult method of implementing those ideas that could possibly have been chosen—the idea of dividing the trust funds into two, making the appropriation, and then proceeding from there. I am quite certain that appropriation of trust funds is the most frequent cause of minor breaches of trust of any operation of the trust laws that there is.
  As a rule, it does not matter very much. The minor mistakes that are made are of a kind that do not affect anyone —provided that appropriation is quickly followed by division of the funds and payment out. Here, however, final payment is, by the nature of things, to be deferred—and sometimes to be deferred for a very long time. Small mistakes made in the appropriation as between the two halves of the fund or in making the adjustments required by these two complicated Clauses will grow enormously.
  For example, by Clause 3, if trustees acquire any wider-range investments in the circumstances mentioned in subsections (4) or (5), they must sooner or later transfer to the narrow-range part of the fund from the wide-range part of the fund property equal in value to the property acquired. I think that hon. Members will agree that I have stated the effect of those subsections accurately.
  Nothing is said about the date on which the value is to be taken for the purpose of equality. I think that on an ordinary construction of the words the date would be the date of acquisition, but that is probably the one date that never will be taken. Trustees will be thinking about the matter for a week or two before getting round to taking action. But even that is not clear. To take the date of transfer would certainly be consonant with the language used, but here we are not dealing with trustee securities in the old sense but, by definition, with ordinary shares, and ordinary shares can fluctuate very widely. I have recently been concerned as a trustee with the holding of Ford

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  shares, and there one can get a fluctuation to a very wide extent almost overnight. There are many other similar cases.
  Frequent mistakes will be made in dealing with this appropriation as between the two funds, and I should like to be told what should be done by trustees when they find that a mistake, whether large or small, has been made. They cannot go back to equalising the fund—that is quite certain. The Bill does not contemplate that at all. Nor can one go back to what would have been the position if the trustees had done what is right, because one cannot say in what investments they would have put the money had they done rightly.
  The only thing would be for the trustees to apply to the High Court to get the position regularised and themselves whitewashed, and that seems to me to be quite intolerable. Small mistakes may involve only £20 or £30. Why should trustees be put in the position of having to go to count and spending a great deal more than that, or run the risk of having a demand made against them in respect of those minor breaches of trust that will constantly take place?
  Subsection (1) of Clause 5 is mandatory. The essential words are:
  " In the exercise of his powers of investment a trustee shall have regard… to the need for securing that investments of the trust are… sufficiently diversified…."
  That means that he must consider whether or not it is his duty to take advantage of the terms of the Bill and acquire equities.
  This will often be an extremely unenviable decision for any trustee to take. Let us suppose that a trust fund at the moment is held for the benefit of a widow who takes a life interest in the fund. The widow is aged 60 years, with a reasonable expectation of life, and the fund is a moderate one yielding, let us say, £1,000 a year, all invested in the kind of investments which we know such funds are held in, namely, long-dated, perhaps undated, Government securities. The reversioners, who may be the widow's children, her step-children, more distant relatives or, perhaps, a charity, ask the trustees whether the fund can be reinvested in accordance with the
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  terms of the Bill. The trustees take stockbrokers' advice. The stockbrokers quite properly advise them that they should take advantage of the Bill in order to protect the capital of the fund.
  The trustees are at once confronted with this situation. They will either have to reduce the widow's income by about £150 to £200 a year or they will have to tell those who look forward to the reversion that they will disregard Parliament, they will disregard the stockbrokers' advice and they will not make any change.
  Mr. Denzil Freeth: My hon. Friend has mentioned the point about loss of income by exchange from gilt-edged to equities several times. Will he not agree, first of all—this is the minor point—that some Government stocks which have a low coupon give a relatively lower yield, assuming they are dated stocks, than other high-coupon dated stocks and, therefore, his generalisation may not be true over the whole range? Secondly, although such advice may be sought by the trustees, the brokers' advice might well be that, taking the circumstances of the life and the ultimate beneficiaries into account, it may not be the time to carry out such an exchange. It is surely not entirely for the trustees just to close the question in those very narrow terms.
  Sir H. Lucas-Tooth: I agree that there are short-dated Government stocks which give a very much smaller yield, but we are not here concerned with the trustees' choice of these stocks by buying. It is a matter of what the trustees are actually currently holding, and in the case of most funds of this kind, or many of them at all events, the stocks held will be long-dated or undated stocks. In the case of the short-dated ones, I think there will probably be very little agitation on the part of the reversioners to have the exchange made because there will be capital appreciation going on, as we know. I think my hon. Friend has put his finger on the very point which establishes the case I am making. As regards the purchase of equities, there are, of course, more speculative equities which can be bought. I do not think that the Bill proposes that trustees should buy equities of that kind.
  I have the greatest misgivings about the way the Bill will work. I should

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  have preferred a much simpler scheme. I should like to have given a general power to trustees to invest in a wider range of investments to any extent, subject to this, that they must obtain agreement from any adult beneficiaries and the approval of some suitable functionary on behalf of infants and charities and so on. In the case of charities, it would, no doubt, be the Charity Commission. In the case of infants, it might be the Public Trustee or someone of that kind. If we were to do that, we should very soon see built up a sort of case law which would probably amount to something very much like what is in the Bill itself, but, instead of being rigid and unworkable, as is the Bill, it would be something flexible, reasonable and understood by the trustees.
  Mr. Glenvil Hall: Would the hon. Gentleman include not only the immediate beneficiaries but any ultimate beneficiaries who happen to be living in any such scheme as he mentions? If so, I see no harm being done to anyone.
  Sir H. Lucas-Tooth: I meant all beneficiaries, either beneficiaries enjoying the income currently or those looking forward to the reversion. I would like to see this done by agreement. I see no reason whatever why we should disturb a testator's or donor's intentions against the wishes of someone who has already a vested interest or even a contingent interest in the fund.
  I have two small points to make which are really Committee points. Why has the word "property" been used in Clause 1? The Trustee Act, 1925, uses the expression "funds". Clause 12 of the Bill provides that expressions are to have the same meaning as in the Trustee Act, 1925. As a matter of fact, the Trustee Act defines "property" explicitly as including reversionary interests. In Clause 4 of the Bill, "property" is defined as excluding reversionary interests.
  The Solicitor-General (Sir Jocelyn Simon): Excluding interests in expectancy.
  Sir H. Lucas-Tooth: In expectancy—I am grateful to my right hon. and learned Friend. But there is a conflict between these two definitions, and I
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  wondered why this strange departure had occurred.
  Secondly, I want to know why Clause 9 does not contain any power to subtract particular kinds of investment from. the Schedule or certain parts of the Schedule. This is the Clause which gives power to add to the Schedule. This seems to imply that the Government have an expectation that all kinds and classes of security will go on improving and will be slowly accumulated on the Schedule. That seems to indicate a facile optimism which I think is not justified but which, I feel, does rather permeate the Bill.
  Mr. Barber: It is really a Committee point, but I think I can help on that. What we felt was that, having given power to invest in certain equities, which are set out, it would be wrong to take away any part of that power without coming back to Parliament. On the other hand, it might be necessary to add to the list. For example, there was recently an issue made by the International Bank for Reconstruction and Development, which would be a very suitable thing for trustees to invest in. We wanted to have the opportunity, should such an occasion arise, to add that kind of investment to the list without having to wait for a further Act.
  Sir H. Lucas-Tooth: I see that point, but I should have thought that it was possible to take securities out of one or more parts of the Schedule while allowing those already acquired by trustees to continue properly to be held until sold, without doing any damage to the general machinery of the Bill. It is really a Committee point. I was worried about it because it seemed to me to indicate a rather optimistic attitude on which the whole Bill is based. I hope very much that, before the Bill emerges from Committee, it will be in a form totally different from that in which it now is.
  5.29 p.m.
  Mr. John Diamond: Many hon. Members have criticised the machinery of the Bill, and with all the points they made I entirely agree. Most speakers have spoken in favour of the fundamental principle of the Bill, and with them I agree on that point. I think that only the hon. Member for Hendon,

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  South (Sir H. Lucas-Tooth) has doubted the justification of the Government bringing in a Bill which will fundamentally vary the wishes of dead men. I should not have thought that in today's changed circumstances anybody would argue that point.
  Sir H. Lucas-Tooth: The hon. Member is extending my argument to a point which I would not wish. I simply said that I would not use the machinery of this Bill to deprive an individual against his wishes of a right which has been given to him. I do not go further.
  Mr. Diamond: All that the Bill does fundamentally is to give trustees the right to do things which the testator or settlor said they should not do. It is, therefore, merely interfering with the wishes of dead men. The fact that the trustee is given power under the Bill to invest in equities does not mean that he will do so. The hon. Gentleman said that it was likely that he would not do so. I disagree with him, but that was his point. Therefore, he must agree that if his argument is against the principle of the Bill he is arguing in favour of retaining for all time the validity of the wishes of dead men who made their decisions in, possibly, entirely different circumstances.
  It is not merely a question that the value of gilt-edged has tended to fall or vary. This is the first time that we are dealing with trustee investment powers in about 75 years. We are now living in an entirely different society. In those days it may have been perfectly true to say that the only thing which was safe was the Bank of England. We are now living in a society in which we must have full employment, whatever party is in power. If we must have full employment, then industry must be practically "flat out" the whole time. This means that industry must make profits and that equities have become safe. It is therefore right that, in addition to the other arguments adduced, we should permit trustees to depart from dead men's wishes. I have always been in favour of trustees having the greatest possible discretion and against the principle of controlling the purse strings from a dead man's grave. The ideas of living men move. Dead men do not move, or if they do it is a little difficult to say in which direction.
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  I should have thought that we were all in agreement that it was more than high time that a Bill should be introduced under which trustees are released from their compulsion to invest exclusively in insecure and unreliable investments, which has been the case hitherto.
  As for the rest of the Bill, I cannot find one good word to say for it. I can find many things to criticise, and I shall attempt to do that in principle only. First, let me deal with the fifty-fifty principle. It astonishes me that, after eight years' consideration, the best thing which the Government can do is to come forward with such an arbitrary division. It must be arbitrary because they know that it can be fifty-fifty only at the point of division. From then on, no matter what attempts are made to keep the fifty-fifty principle, it is bound to vary each day as the value varies between the two 'halves of the capital of the trust. It is much too rigid.
  Obviously, the Government have not been able to make up their mind whether trustees should be treated as people worthy of discretion or should be given the strictest instructions on what they should do. There is this complete lack of policy in the Bill. One moment it appears to give trustees a certain discretion, the next moment it pulls them back, saying, in effect, "You can have some equities" and the next moment saying, "But you have to keep it right and go through the most complicated and extensive manœuvres to try to keep it that way. We will not allow you any discretion about what happens after that". This is the result of the Government being unwilling to say, "All that has changed is the comparative position of gilt-edged and therefore we should increase the list of trustee securities". They have been afraid to take that simple step. Instead, we are involved in all this complicated machinery.
  This fifty-fifty principle is not only rigid, tentative, arbitrary and preliminary. It is something which, as far as I am aware, is not supported by the general practice. In most large investment organisations the general practice is not to have as much as one-half in fixed-interest securities. If there is a figure at all, it is much more like one-third. My point, however, does not concern whether it should be one-half or

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  one-third. The figure moves as circumstances change. It is essential to have people capable of examining values and proper methods of investment in the changed economic circumstances of our society. For that, one needs to be alive and watching the position day by day. Whatever figure is arrived at, it is bound to be harsh or even wrong in a few years' time.
  Here I return to the point made by the right hon. and learned Member for Chertsey (Sir L. Heald). It is certainly the case that, to my knowledge as the result of careful inquiries, the courts have allowed rights of investment far more liberal than those proposed by the Bill. As a layman, I am bound to say that I cannot understand the suggestion that the courts will not pay attention to what is in the Bill in a future consideration of the matter. As I said, I am a layman on this topic, but I have asked those who practise in this sphere about it and they take exactly the same view as myself. If we had not raised the point in the House, the Chancery judges might still have felt permitted to say, "This Act is silent on the matter and, therefore, we can use our discretion".
  How can a Government feel entitled to propose this entirely new constitutional theory, have a discussion on a particular topic on which the Commons expresses its view and then expect the courts to pay no attention to the view expressed as shown by the Bill approved by Parliament? It is an extraordinary constitutional suggestion of the Government. They are trying to tell us that, notwithstanding that the Bill, as they wish it, will go through with a fifty-fifty limitation, nevertheless the Chancery Court will be entitled to continue to use its discretion and to give more than 50 per cent, investment in equities. It is astonishing that the House of Commons should wish that the law-makers should be entirely ignored by the law interpreters in the courts. We therefore cannot allow this fifty-fifty arrangement to go through under any circumstances.
  The Bill is complicated in its machinery beyond description, particularly Clause 3. I am sure that anyone who has tried to work it out has come to only one conclusion, namely, "Do not let anyone ask me to be a trustee
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  in future". That is certainly the conclusion to which I, finding myself a natural target for invitations to be a trustee, have reached provided the Bill remains in its present form. If one is an accountant who has not been caught "pinching" the petty cash, people naturally think that one is able to act as a trustee. But arduous responsibilities are involved. One accepts them generally for purely friendly considerations and takes one's responsibilities reasonably seriously. No trustee in that position would feel happy about being a trustee in circumstances and under a law by which he finds himself incapable of understanding and does not know what he is required to do.
  Despite what the Economic Secretary said, I doubt the honourable intention of the Treasury in framing these decisions. There is nothing like saying it plainly. The hon. Gentleman would have been far better off by coming forward clearly and, in the hallowed tradition of the House of Commons, saying, "I am an interested party. The first thing I want to do is to declare my interest. I am an interested party because one of my jobs is to see that the Government's ability to borrow, and to do so as cheaply as possible, may not be prejudiced. Nevertheless, I think that the Bill deals fairly between the different classes, between the rights of beneficiaries and those of the trustees and, if one likes, the rights of the Government." But it is weighted unnecessarily and wholly—and suspiciously, when one reads the speeches by Government spokesmen in the other place—in favour of retaining the Treasury's ability to borrow cheaply. The Treasury has a real problem.
  Mr. Barber: Had that been a true statement of the position, I would have said so. What the hon. Member has said runs counter to what I said and is clearly the reverse of the truth. Had we considered that it was in the interests of the generality of trustees to go further than fifty-fifty, we would have done so. I said as clearly as I could that it was not on Treasury grounds that we had reached that conclusion. The hon. Member, who has spoken many times in financial debates, might at least accept what I said so clearly.
  Mr. Diamond: If the hon. Gentleman says it with such clarity, I am bound to

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  accept it. Equally, he will accept from me what conclusions follow from the Bill. One of the conclusions that follows from it is that if the Bill goes through in its present form, limiting investment in equities to 50 per cent., there will be a certain effect on the price of Government securities and the ability of the Government to borrow. If, on the other hand, it does not limit it to 50 per cent., there will be a further fall in the price of Government securities and the ability of the Government to borrow as cheaply as at present will be prejudiced. Those are the effects that follow from the Bill, notwithstanding that the hon. Gentleman is concerned solely with protecting trustees and beneficiaries.
  Therefore, I am entitled to go on and say that the Government are at fault in not grasping that nettle and dealing with it instead of trying to have regard to the circumstances in the Bill. It is a separate issue and should be dealt with as such. If the Government were prepared to make themselves an honest borrower—I use the term "honest" deliberately—by saying that all undated stocks would have a date put against them, if they would make it plain that in future people who lend to the State will in due course—it is not an immediate course—have the right to reclaim payment from the State, it would be an entirely different matter. It would be found that Government borrowing was taken care of and that people would be prepared to lend to the Government for the same reason as the Economic Secretary and his colleagues have often said that people are prepared to hold sterling, namely, because they want to hold sterling and trust it. That is the way, they have said, to deal with it and not, as has often been said from this side of the House, by trying to secure the position of sterling by preventing too much sterling from leaving the country.
  If the Government were to adopt their own logic with regard to irredeemable borrowing—borrowing under which a condition of the loan is that it is never repaid—they would not have any of this problem to cope with. Suppose that I were to go to the Solicitor-General and say, "May I borrow £50? I guarantee that the interest will be paid. You can rest assured of that. I guarantee that the capital will never be repaid. Do
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  let me have £50". The right hon. and learned Gentleman would probably look me in the eye and, to change a phrase, probably say to me, "Are you quite sure you are all right, Jack?" The Government nevertheless consider themselves entitled to borrow money on the basis that it will never be repaid. Therefore, if only the Government dealt with this point, they would find themselves free from any possible criticism with regard to the Bill that their motives should have been doubted.
  It would be wrong to criticise a Bill so severely without putting forward what the alternatives are. It is because the alternatives are so simple and straightforward that I dare to do this. The Government need only have brought in a Bill of two Clauses and they need to do two things in addition to introducing it. The first thing they have to do is to put their own house in order and make an honest woman of the Old Lady of Threadneedle Street by saying that even at this late date, a time will be set for the repayment of undated borrowing.
  Then, the Bill need do only two things. The first is to extend the list of securities which a trustee may hold and to rely upon the discretion of trustees to deal sensibly with their individual estates and responsibilities. The second Clause in the Bill would be to require the trustees to take advice, certainly not to accept it. I agree with what has been said about the way the Bill is drafted in this matter. Advice should be sought but not necessarily accepted. One cannot compel a person to do that. So long as one had knowledge that the trustees were compelled to seek advice, there would be adequate protection. That is all that the Bill need do. That would give trustees the discretion which they ought to have and which, in modern times, most of them use sensibly and wisely.
  The other thing which the Government should do to make the position of a trustee much happier is to provide for the very kind of investment that trustees would seek in these circumstances. If through some sort of Government agency —the Bank of England or a similar agency—the Government were to set up a fund, which I might call a "Trusty-fund," on the lines of a unit trust or something of that kind, a fund which would be invested appropriately from time to time in the light of the best advice

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  which was available at the time, invested in fixed-interest securities, in securities that are interested in land or in equities, a fair mixture suitable for taking care both of the immediate interests, the share of a life tenant, and the ultimate interests of a later beneficiary, there would be the automatic safeguard that any trustee who invested in such a fund would be free from any possible criticism.
  We all know that the lot of a trustee is not a 'happy one. It is rather like the the lot of a Government. If things go well, they are regarded as being very lucky. If things go badly, it is certainly their fault. This happens to the trustees, too, and they sometimes need same kind of protection. They would have complete protection if they invested in a Government sponsored "Trusty-fund". There would be no need to satisfy the court on the application of any beneficiary that the trustee had acted wisely and well. Consider the saving in time from having a handful of people looking at the investments and investing wisely as compared with the existing necessity for every person separately to receive that advice. Thousands of people in identical circumstances with an identical problem on their hands have to consider the same situation.
  All that time and all those fees and estates are wasted in order to achieve something that could be achieved much more easily by streamlining the procedure in the way I have suggested. If the Government would do those two things—put their house in order by putting a date to the irredeemable securities and cause the setting up of a trustee fund—they would find that they could solve the problem perfectly simply by having only two Clauses, one to widen the list of trustee securities and the second to compel the seeking of, although not necessarily acting upon, advice.
  In these circumstances, it will be seen that there are practically no reasons for voting for the Second Reading of this Bill, except that it takes a step in the right direction by breaching the previously sacred principle that if one's trust deed so required one had to invest exclusively in trustee savings, notwithstanding that this was outmoded and irrelevant to the society in which we now live. That is a good step forward.
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  As it is the main principle of the Bill one must support the Second Reading. But it is obvious that all the pressure is mounting against the 50–50 principle, and if the Bill does go through on that basis then it will be only a short time before the Government are required to bring in another one.
  The Economic Secretary should not pat himself on the back by saying that there has been very little expression of criticism since the White Paper. After all, when a White Paper appears, most people ask: "What is the main principle involved?" In this case the main principle was the one to which I have referred, and everyone noted it and left the matter at that. But all wise practitioners said that when Parliament had done its job in detail they would consider the then Act carefully. Anyone who looks at a Bill in the first House, before the first Amendments have been moved and accepted, has all his time taken up with reconsideration. Even the Finance Bill may be greatly changed.
  The Economic Secretary must not take lack of criticism as signifying anything. On the other hand, now that the Bill has come up for consideration and criticism is mounting outside and in this Chamber—
  Mr. Ellis Smith: Therefore we should not accept it.
  Mr. Diamond: As I say, there is only one principle involved—that of getting away from dead men's control—and, as far as that principle is concerned, we must accept the Bill as a step in the right direction, however muddled it may be.
  5.53 p.m.
  Mr. Stratton Mills: It is fascinating to follow the hon. Member for Gloucester (Mr. Diamond) in what he says about equity markets today. It is perhaps a further sign of the affluent society that he spoke in such terms. However, in welcoming the Bill today, I welcome it as a step in the right direction. I welcome the wider powers of investment which are given in it, but obviously my welcome cannot be completely unreserved. It is quite clear, as has been said by my hon. Friend the Economic Secretary, that this is a Bill which affects mainly the small trusts and the older trusts. It is clear that it is

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  largely the trusts with less than £10,000 which will be affected. It would be interesting if my hon. Friend could give us an estimate, even an approximate one, of the amount of money involved.
  As a solicitor, and speaking also, I fear, as a trustee in certain cases, I must make a criticism of the machinery of the Bill. It has been said that the machinery is unworkable. There have been two main objections. The first is that the Bill is obscure, and this mainly centres round Clause 3. Secondly, it is said that it is cumbersome and will unduly deter the ordinary trustee from accepting office, and that it perhaps means that the trend will be more towards banks and insurance companies in the future.
  I understand that objections have been submitted to the Government by the Law Society. Perhaps, in replying to the debate, my right hon. and learned Friend the Solicitor-General might say something about these technical objections which have been put forward. It would be interesting if he would say also what other objections have been expressed to the Bill. What objections were put forward by the banks for their trustee departments?
  The objections to the Bill's unworkability are rooted essentially in the fifty-fifty rule, and virtually every speaker in the debate so far has criticised that rule. The objection which I make to it is not the technical one but the very strong one of principle. The rule is essentially based on a supposition which is quite incorrect. It is based on a faith which the Government have in the gilt-edged market.
  I have read carefully what was said in another place, and it is interesting to note that the Government spokesman there constantly kept coming back to the point that the 50 per cent. in gilt-edged was safe, as if gilt-edged were some rock to which trustees could cast their eyes when cast adrift in stormy seas. I wonder if it is true. To me, there are two big objections to gilt-edged which show clearly that they are far from being safe.
  The first is that inflation must hit gilt-edged. Prices may rise or prices may fall—they normally fall—but nevertheless if one goes back ultimately to their purchasing power, gilt-edged over
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  the years have shown a tremendous decrease. My hon. Friend should bear in mind the purchasing power of £1,000 worth of gilt-edged bought in 1914. Perhaps he would mention the purchasing power of that today, quite apart from its value on the Stock Exchange, and compare it with a wide range of blue chip equities
  The second objection I make, which has not been covered so far in the debate, is one of an equally fundamental character, but not of the same degree of importance, though perhaps in the years ahead it will show its importance. The argument has been expressed that the price of gilt-edged—this was put forward by Government spokesmen in another place—is very closely tied to the Bank Rate. I wonder whether that principle is still true today. I have my doubts.
  I remind my hon. Friend that when the Bank Rate was 7 per cent. in 1957 War Loan was approximately 60. Recently, when the Bank Rate was 6 per cent., War Loan was at 60 to 61. When the Bank Rate was twice reduced by 1 per cent. recently, one would have expected, if the old argument was still true, that following those decreases War Loan and gilt-edged would have risen. The opposite has happened. The reason for that is that there is a fundamental lack of faith in gilt-edged, and this is due to the fact that it is accepted more and more today that we are in for perhaps a quarter of a century, perhaps half a century, of gradual inflation.
  Inflation is not merely a word in political pamphlets. It stems from the policies that have been accepted, and rightly so, by both the main political parties and which essentially lead, and must lead, to very gradual inflation over the years. I sum up that argument by saying that there is no real safety in gilt-edged today.
  Mrs. Eirene White: Would not the hon. Gentleman agree that we should stop using the term gilt-edged ", because it gives a spurious air of security to things not really secure?
  Mr. Stratton Mills: I would possibly listen to other words. In my role of trustee, I should be glad to hear the hon. Lady suggest alternative terms.
  I come to what I think are the practical alternatives. The alternatives must

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  fulfil two essential conditions. First, there must be some form of workable scheme so that trustees will not be plagued all their lives. Secondly, one must avoid this dependence on gilt-edged. It has been suggested, and it was admirably put by the hon. Member for Gloucester, that the Trustee List might well be extended and that one might extend it to a certain number of shares, or to certain approved categories.
  I am by no means happy with that suggestion, because it has certain difficulties. It has the difficulty that the trust fund will not be sufficiently diverse, which I think is the real objection. It has the other objection, which is allied to that, that certain sections of the market which are thought attractive today may be by no means so attractive ten years hence. One day railways were thought to be the share of the future. One day atomic energy shares are thought to be the share of the future. One day oils, for example, were included in every trustee list, but they are now going through what may be only a temporary phase. That demonstrates that diversification is of the essence.
  The other thing is that there are still failures by companies with shares on the Stock Exchange. I wonder how many companies have failed since the White Paper, companies which would have fallen into the category suggested in that White Paper of 1959. I wonder whether Vactric would have come within that category. Perhaps there have been others.
  I put forward an alternative, which I recognise has certain drawbacks. I merely suggest that one should allow wide discretion to the trustees in investing up to 100 per cent., if they wish, in shares of certain approved investment trusts and perhaps extending it to certain insurance shares. There would have to be certain regulations about what category and size of trust would be suitable and one might have to provide that not more than 25 per cent. of the trust fund should be invested in any one trust.
  Of course, there are disadvantages. The main disadvantage at present is that the market in investment trusts is extremely narrow, but that problem would solve itself over a period and it would certainly give a very much wider spread both in shares and in geographical area.
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  Some short-dated stocks are included in many of the investment trusts and some include land and some have building society deposits for short-term money. Trustees would thus have a very wide spread of investments.
  The experience of investment trusts over the years has been that even when things in equities are bad, they can generally keep a more even course. They avoid the highs and avoid the lows. They are secured against inflation and depreciation.
  The Bill is to be welcomed as a step in the right direction, but it is not wholly satisfactory and I hope that even at this very late stage the Government will have second thoughts about it.
  6.4 p.m.
  Mr. John Arbuthnot: There is general agreement on both sides of the House that for many years we have been labouring under a Trustee Act which does not meet modern conditions. Those people who made trusts in the past would be horrified if they realised that the provisions which they put into their trusts in order to preserve their value have had precisely the opposite effect. Looking back, one can say that, short of horse racing and the casino, there are few surer ways of losing money in real terms than by investing in securities allowed under the Trustee Act, 1925.
  I, therefore, welcomed the Government's declared intention to introduce legislation which would help beneficiaries and trustees to preserve the value of trust property. The Bill worries me, however, because I believe that in its present form it will not carry out the Government's intention. I am sure that it will not have escaped my right hon. and learned Friend the Solicitor-General or my hon. Friend the Economic Secretary that speakers on both sides of the House have been unanimous in damning the fifty-fifty principle. I completely undertsand the view which was reasonably put by my hon. Friend the Economic Secretary when he said that the White Paper had set out in some detail the pattern of the Bill which the Government proposed to introduce and had not created an immediate protest. None the less, it is not adequate for him to say that because we did not all immediately see the implications of the fifty-fifty proposals and protest at once when

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  they were put forward in the White Paper that we are therefore precluded from objecting to the fifty-fifty proposals now. I hope that even at this late date the Government will think again.
  The Economic Secretary suggested that we could simplify the Bill by giving trustees less room for manoeuvre, but it would be much better to simplify the Bill, which we all agree is complicated, by giving trustees more room for manoeuvre. He will no doubt consider what was said by the right hon. Member for Colne Valley (Mr. Glenvil Hall), that he favoured leaving the proportion of gilt-edged and other investments to the good sense of trustees. That is a view which would meet with the general approval of the House.
  The Bill worries me because I do not believe that it will give the trustees the discretion which they ought to have. The fundamental error, from which the complication of the Bill flows, is the decision compulsorily to divide the trust fund into two equal parts. I know that this follows the recommendation of paragraph 289 of the Nathan Report, but I can see no logical basis for that particular proportion or for any division of trusts.
  As has been pointed out by earlier speakers, the investment climate varies. At one time, it might be best to invest the whole of the trust fund in equities. At another time, it might be best to invest in dated gilt-edged stock. I know of no time at which it is likely that the best interests of the trust will be served by a fifty-fifty proportion. Prudent trustees should be given the maximum freedom of investment and I understand that the banks, through the Bank of England, are making very strong representations to my right hon. and learned Friend the Chancellor of the Exchequer to this effect. I am sure that he will take them very seriously.
  The acid test of the proposals in the Bill is whether any new testator, if the Bill had been applicable to him, would have set up a trust taking advantage of the provisions of the Bill. It seems to me that the answer to that would be clearly "No." Any modern trust gives the trustees a much wider discretion, and, if the trustees are not to have that discretion, then they are not fit to be trus-
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  tees. Nothing short of the abandonment of the underlying principle of fifty-fifty will make the Bill work. My right hon. Friend the Chancellor of the Exchequer has a reputation for clarity of thought and courage. I suggest that he should abandon the fifty-fifty basis and try to put into the Bill some guiding principles whilst giving trustees freedom to invest provided that they take proper advice. The sort of principles that I have in mind are that trustees should pay due regard to the security of income as well as to the maintenance of true capital values and that they should have due regard to the special circumstances of each individual trust.
  The fear was expressed in another place by the noble Lord, Lord Conesford, that if the Bill were passed in its present form it might be taken in the courts as a modern and up-to-date declaration by Parliament of what the powers of investment by trustees should be. The courts would, therefore, feel precluded from allowing the type of investment clause which they have been allowing since the 1958 Act has been on the Statute Book. My hon. Friend the Economic Secretary said that he proposed to move an Amendment which would cover this point and make clear that the freedom of the courts to give wider powers of investment would not be interfered with. Naturally, we were all very glad of that assurance, but some suspicion was cast on the effectiveness of that assurance by what was said by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald).
  The Solicitor-General: I am sorry to have to say this in the absence of my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), but it is a pity that disturbance should have been caused in that way, because my right hon. and learned Friend the Lord Chancellor was quite specific on this point. He said:
  " I will give an undertaking that before the Bill passes to another place I will consult the judges of the Chancery Division about this matter."—[OFFICIAL. REPORT, House of Lords, Tuesday, 20th December, 1960; Vol. 227, c. 952.]
  I need hardly say that that was done. They were consulted, as indeed they were consulted about the White Paper. When my hon. Friend the Economic Secretary gave a specific assurance, it was given

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  in the light of that consultation. There is no need for apprehension on this point.
  Mr. Arbuthnot: I am grateful to my right hon. and learned Friend for what he said.
  It is not only the question of the courts whose decisions might be affected that disturbs me. I am worried that some other decisions, for example, in this House, may be affected. We must not forget our own Committees considering Private Bills. I trust that if the Bill becomes law it will not be regarded as precluding Committees considering Private Bills from giving to the promoters of such Bills much wider powers of investment than the general powers under this Bill as at present drafted, and that such Committees will feel free to give these wider powers of investment to those promoters of Private Bills who have asked for them, should the Committees think that a wider discretion is appropriate.
  My basic point, however, is that I do not believe that the Bill will work in its present form. I am convinced that the right thing to do is to alter it to give complee discretion to trustees provided that they take proper advice.
  6.14 p.m.
  Mr. Charles Fletcher-Cooke: There is not much meat left on this bone. I simply say that, after the speeches to which I have listened this afternoon, I welcome the Bill rather more warmly than most hon. Members.
  The hon. Member for Gloucester (Mr. Diamond), whom I last saw 7,000 feet above sea level on top of the alps, was much more ebullient then than he is today. Like my hon. Friend the Member for Dover (Mr. Arbuthnot), he prophesied a great deal of gloom about the operation of the Bill, but I do not agree. One of the reasons why I can accept the fifty-fifty division—although nobody else seems to be able to—is the existence of the Variation of Trusts Act, which my right hon. and learned Friend so rightly made clear is not to be affected either directly or by implication by the passage of this Bill.
  The saving effect of the Variation of Trusts Act, a different Act with different wording and with different duties cast on the judges, is that it gives them an
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  absolute discretion. I am delighted to hear, not only on account of this Bill, but for other reasons, that the Chancery judges have been consulted, because up to now I agree that there has been not only a variation of trusts but a variation of judges in the sense that judges have disagreed among themselves in a way that hitherto amounted to something of a lottery as to which judge one came before as to how wide one's powers would be.
  Perhaps the consultations that have taken place as a result of the Bill will bring some sort of uniformity to that procedure which is additional to the procedure under the Bill and which gives much wider powers to the judges than does anything in this Bill. Because of that power, I do not think that the fifty-fifty division will be quite so binding and so disagreeable as it might otherwise be.
  Mr. Arbuthnot: Does not my hon. and learned Friend agree that the only people who can afford to come before the judges and get this wider discretion are the larger trusts, and that it is the smaller trusts which will be penalised?
  Mr. Fletcher-Cooke: I am not sure that they will be penalised. Although it is assumed by everybody that equities are the thing today, it does not by any means follow that they will be the thing for the future.
  My concern for the trustees of the smaller trusts—and that is what we are primarily talking about today—is that no greater burden should be put on them than was the case in the past. The Bill will, to some extent, put a greater burden on them. When my hon. Friend the Economic Secretary opened the debate he very fairly asked for the opinion of the House whether they would prefer simplicity to width of power, even if it involved complexity. I plump straightaway for simplicity, because I think that the importance of the lay trustee knowing what he has to do is much more important in the case of small trusts than giving him wider but complicated powers.
  I should like to see Clause 3 considerably reduced and amended. I should also like to see Clause 2 (4), to which my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) objected—the subsequent re-division into compartments in the case of property going out

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  of the fund—abolished. If one is to retain the fifty-fifty division, it is enough to make the division in the first place. Thereafter, the two limbs must have a life of their own. To expect trustees to go on thereafter constantly re-dividing and putting one back to compensate for the other, and so on, is complexity for the sake of logic and not simplicity for the sake of reducing the burden on the lay trustee.
  " Thou shalt not muzzle the ox when he treadeth out the corn."
  One cannot go on putting more on the wretched trustee than merely to make him take advice, make divisions in the first place, and then do the best he can. If one makes him do more than that, all the people, both inside the House and outside, who take on this disagreeable job, involving them in a great deal of worry and personal expense, will not do it. It will mean that the small trusts will all go into the hands of institutions which, quite rightly, charge fees and the beneficiaries will therefore get that much less.
  I do not want to see that any more than I want to see the suggestion made by the hon. Member for Gloucester for some sort of Government trust fund come into being. If settlors wish that sort of thing they can appoint the Public Trustee to do the job. If we are to have these powers of decision spread, as I think they may be, all over the country in different hands, we must not load those hands with too much worry and too much work.
  My criticism of the Bill, which I welcome more warmly than most people, is that this difficult balance between complexity for the sake of logic and simplicity, even though it is occasionally harsh and illogical, comes down too fat on the side of complexity, bearing in mind the sort of people who are likely to have to operate the Bill.
  This is a much more pleasant occasion than when we last had to deal with a trustee matter in the House, and I am, therefore, very glad to be able to support the Bill as warmly as I do, but there are two points which I want to put before my right hon. and learned Friend. First, it is a pity that an opportunity has not been taken to see that the powers of investment in the case of the
  404
  amalgamation of companies—a very frequent phenomenon today—are widened and brought up to date. There is a decision—I believe that it is re Walker —which gives a very narrow interpretation of the word "amalgamation", and which means that the power to invest in equities by companies which amalgamate in the modern form, by the formation of holding companies to acquire the shares, or by the swapping of shares one with another, is not included. The opportunity should have been taken to include it.
  Mr. Denzil Freeth: Is it not a fact that Part IV of the First Schedule, in lines 30 to 35, as the Bill has emerged from another place, covers the situation fairly fully?
  Mr. Fletcher-Cooke: I am obliged to my hon. Friend. I had not noted that. I dare say he is right, although I am not sure that he is from a casual reading of the Bill. No doubt my right hon. and learned Friend will deal with that point in winding up.
  The Solicitor-General: Perhaps I may say that I am aware of the point which my hon. and learned Friend has in mind. It is not met completely, and I will certainly consider it further.
  Mr. Fletcher-Cooke: I am obliged to my right hon. and learned Friend.
  Secondly, in Clause 6 the same powers are given to persons not being trustees but having statutory powers to make investments as are given to trustees. Although I do not share their doubts myself I have been told that certain persons having powers of investment in respect of things such as colleges incorporated under the Royal Charter fear that they will not be included among the persons having statutory power to make investments if we define the term "statutory power" very narrowly. If we define this as a power conferred by Statute—and these bodies incorporated by Royal Charter do not have their powers conferred directly by Statute—they fear that they will be omitted from this new freedom which is to be given to trustees and persons not being trustees having the statutory power. That may be a false alarm.
  In regard to the new obligation upon trustees to take advice, I note that the

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  advice of one of their own number will be sufficient. If one of them happens to be a stockbroker, accountant or something of that sort, it will not be necessary for them to go outside their body. They will be able to ask his advice, and if it is given in writing that will be enough. That is an important point, because in the case of these small trusts money must not be wasted by taking unnecessary advice outside the body of trustees.
  I believe that the Bill will work, and I am very glad to have the opportunity of supporting the Government. It seems to me that they have been rather unfairly knocked about today. The Bill represents a large advance. This is the first time that all these wretched widows and orphans of whom we have been thinking will have a chance of sharing in the benefits of the affluent society. If that is not a large advance I do not know what is. I do not want to repeat the arguments over and over again. I hope that the Government will get the Bill through and that it will work as well as I think it will.
  6.25 p.m.
  Major W. Hicks Beach: I must declare an interest in this matter. I am a practising solicitor and a trustee of a great number of trusts. I am also on the committee of an insurance company which acts as a corporate trustee.
  We ought to thank the Economic Secretary for the clear way in which he sought to explain the intricacies of the Bill, which I have found very difficult to understand. The only point on which I would join issue with my hon. Friend is in regard to his statement that after the publication of the White Paper no adverse criticism was received within the first week. I do not think that that is the proper approach to the matter.
  Mr. Barber: I think that my hon. and gallant Friend will find that what I said was that there was no serious adverse criticism in the weeks following the publication of the White Paper. The only reason I said that was that the White Paper was published specifically so that we might obtain reactions before we started the drafting of the Bill. I do not want to make any greater point than that.
  Major Hicks Beach: I entirely accept that explanation. It would, therefore, be
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  appropriate at this moment, when everyone recognises that the people who have to administer the Bill will be the legal profession. and especially solicitors, to give that profession's criticisms of the Bill, which I know my hon. Friend has received during the past few days. They have come through the usual channels of the Lord Chancellor's Department, which are the proper channels through which the Law Society deals. In a letter Ito all solicitor Members of the House of Commons, dated 8th January and headed "Trustee Investment Bill", the Secretary of the Law Society writes:
  " In its existing form the Bill is, in the Council's view, both obscure and largely unworkable; while they are convinced of the desirability of extending the power of investment of trustees on the general lines of the proposals in the White Paper, they have come to the conclusion that it is quite impracticable to attempt to define the mechanics with such rigidity; they have indeed formed the view that the difficulties both in the interpretation and in the administration of the Bill are so fundamental that serious consideration should be given to re-drafting certain of its main provisions."
  That is the considered view of the legal profession, to which, in relation to a Bill of this kind, the House ought to give very serious consideration.
  All members of the legal profession support to the full the general principle that the scope of trustee investments should be extended. There cannot be any argument about that from either side of the House. The present scope of trustee investments is based on the situation when the Trustee Act, 1925, was passed. That Act is now hopelessly out of date, and I should not like anything that I have to say to be interpreted as in any way criticising the Government in their attempt to put right that completely out-of-date and anomalous position; but when we are trying to produce complicated legislation of this sort it is very important to make certain that it will be both practicable and capable of being understood, and in this case understood by lay trustees and not necessarily only professional people.
  It is also important for the House to realise the number of and size of trusts which will be affected by the Bill. Since the passing of the Variation of Trusts Act, 1958, where such trusts were limited to strict trustee investments many applications under that Act have successfully been made to obtain extended powers of

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  investment. There has been some dispute whether the courts and the judges would continue to give that extended power if legislation of this nature is passed by this House. I do not propose to go into that, as I do not think it affects this issue, particularly after what my hon. Friend has said, that there is to be some provision to safeguard that situation. But I think it proper for me to say that in every case with which I have been concerned so far, and my firm does a tremendous lot of trust work, when there has been an application to extend the power of investment it has been successful. Therefore, I think it fair to say that most of the trusts of any size with money available have probably already secured an extended power of investment.
  It is also fair to say, in my judgment—I am not criticising what has been said about what judges may or may not do—that when a judge studies the provisions of this Bill should it become an Act, he will continue in the practice which has been adopted because he will realise what a difficult position will face trustees who are limited to trustee investments as is proposed. I do not see any danger of Chancery judges restricting the discretion they have been exercising in very wide terms since 1958, but that is purely a matter of opinion. On the assumption that what I have said is correct, I think it disposes of the big trusts which have a method of applying to the courts. The costs are not excessive and most will have already put their house in order.
  There is another important point which I do not think has yet been mentioned and, as has been said by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), this "bone" is getting a little short of "meat". From a practical point of view, I think it is fair to say that since 1945 virtually every solicitor drawing up a new trust or will has put in not only a vastly extended investment clause but, in the majority of cases, has included complete discretion of trustees about investments. Therefore, most new trusts, wills or settlements will not come within its purview and will not be affected by this Bill. The reason I give that information to the House is that it brings us to the fact that we are dealing with only a small number of trusts of a very limited size. The big trusts can
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  get their powers extended and most recently created ones will not be affected by the provisions in the Bill.
  That brings me to my main argument, that we must realise that a great number of the small trusts are not big enough to justify an application to the courts to get their powers extended and they cannot afford continually to take professional advice which, let us face it, costs money. Therefore, there is an onus placed on individual trustees to make decisions about whether investments will result in the commission of a breach of the trust within the standards laid down in the Bill. I am not criticising the Civil Service, but I feel that that general situation regarding the Variation of Trusts Act, the present position of trusts and the creation of new trusts since 1945 has not been appreciated by the Treasury. I hope, therefore, that the Government will give fresh consideration to this problem.
  I am bold enough to suggest a solution to their problem. I believe it is unreasonable that any trustee should not have a list of investments setting out clearly and plainly what are trustee investments. It is perhaps one of the failings of the Treasury that it does not consider a Bill drafted by anyone else to be workable, but I recommend my hon. Friend to study the Private Members' Bill introduced in 1955 by my hon. Friend the Member for Aldershot (Sir E. Errington) which sought to set out clearly a new basis for trustee investments. Curiously enough, it largely follows the list of equity investments authorised under this Bill. I think that it would be much simpler if the Government withdrew this Bill altogether and introduced another Bill based on the Bill of 1955, where it is clearly set out what are trustee investments and what are not.
  I am not suggesting that the principle of extending the scope of investments is not right. Of course it is, but we have to bring it up to date. Hon. Members who are members of the Stock Exchange will confirm that what happens so often in practice is that someone will ring up a firm of stockbrokers and say, "I should like my trust to have an investment in so-and-so." It may be that the firm of stockbrokers has an investment adviser whom they would consult, but what usually happens is that the firm rings up a solicitor and asks, "Is this

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  investment within the terms of the investment clause of the trust?" The solicitor has first to find out exactly what is the position and whether the trust has a full 50 per cent. of equity shares, and various other matters, and it may be a considerable time before he can give an answer which he guarantees to be correct.
  The present system works well and I say with sincerity, and with experience over a number of years, that any trustee, or an adviser to a trustee, is entitled to have before him a list of trustee investments. It is unreasonable that the law should be otherwise, and I hope, therefore, that the Government will give this matter close consideration. I hope also that they will give consideration to the views which I quoted earlier from the Law Society which, after all, represents the legal profession. I consider that the sensible thing would be to withdraw the Bill and to start again. As the whole matter has been conducted on a friendly basis, and as the Economic Secretary has been so frank with the House, I am sure that hon. Members with knowledge of trust work would be prepared to assist the Government to draw up a sensible Measure, and I certainly should be prepared to do so.
  6.38 p.m.
  Mr. Denzil Freeth: Like my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach) I must declare an interest, in that I am a member of the London Stock Exchange and I think I am the first stockbroker to speak in this debate. I suppose that in so far as this Bill may increase Stock Exchange activities some of it may conceivably pass by me.
  I should like to dissociate myself from the criticism of the Bill made by my hon. and gallant Friend. I believe that the Government deserve far more praise in this matter than they have received so far, even including that from my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). In the face of the natural desire of the Treasury to do nothing to encourage the sale of gilt-edged securities, I believe that this is a brave and courageous thing to do. I also believe that it is a recognition, to an extent which, quite frankly, one does not always see from Governments, of the way in which life has changed and the need to amend our out-dated legislation.
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  We have heard much this afternoon about the risks of gilt-edged. Certainly, anybody who has invested in fixed-interest securities since 1925, or even since 1945, has had no increase in income in money terms and only a limited capital gain if he held dated gilt-edged stocks. If they were undated, he has suffered a very severe loss, not only in real terms, but in money terms as well. I think a fair conclusion is that it is most unlikely that the 3½ per cent. War Loan will ever in our lifetime again reach par. If it ever does, one wonders what par will then buy. Equally, it has been said this afternoon that equity shares give one an opportunity to participate in the expansion of the economy and to protect oneself to some extent from the ravages of inflation.
  I have got out one or two figures which I think are rather startling. If we take the years 1950 to 1959, we find that the national income in money terms rose by between 6 per cent. and 7 per cent. a year, and about 2 per cent. in real terms. If one takes dividends paid out by all the leading British companies which publish their results, we find that dividends actually rose in that period by between 7 per cent. and 8 per cent. a year—almost exactly equal to the rise in national income—while those companies which comprise the Financial Times index of industrial ordinary shares raised their dividends at an annual rate, not of 7 per cent. or 8 per cent., but of 12 per cent.
  Therefore, one finds oneself in the position of saying that in real purchasing power the dividends of all companies over those eight years went up by 3 per cent. a year and dividends of the companies comprising the Financial Times index went up by 7 per cent. a year, while the real purchasing power of someone who held fixed-interest stocks fell by 4 per cent. per year—by 32 per cent. over eight years. Even though that is so, we also have to admit that there are certain risks in equity and investment. Some industries grow while some decline. We have seen a decline over the years in the cotton industry. We have seen the enormous growth of the chemical industry. Even within a given industry some companies expand and get a larger share of the available market while others tend to contract. Management becomes less dynamic and they

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  tend to lose their share of the available market.
  Although the risks in equity shares are less than they were in the 1920s, before there was full employment and this country was committed to so high an annual expenditure on social security and before we were committed to a high and fairly enduring expenditure on defence, the fact remains that equity investment carries with it some element of risk greater than is present in investment in gilt-edged, unless those investments are looked at from time to time. That is because, if one is dealing with equity investments, one is dealing with the lifeblood of the economy and there may be great changes in the whole picture of the economy.
  It therefore seems right as a first step that we should have the fifty-fifty principle because, as my hon. and gallant Friend the Member for Cheltenham said, we are now to deal not with the trustees of large funds, who have been to the courts and had their powers enlarged. We are to deal with the small men, with trustees appointed to look after trusts comprising investments listed in the 1925 Act. Such a trustee was not chosen, as a trustee today may be chosen, to have control of a portfolio of investments under an investment clause which is so wide that it includes practically anything. He was chosen in the days when he had virtually nothing to do except be honest.
  As we push the trustee into his new position and place on his shoulders these new burdens, even if he does nothing he is in fact making a positive decision to do nothing. It is right that we should go as far in the first step as only 50 per cent. I approve of the 50 per cent. rule and also of what seem reasonable provisions for adding to or subtracting from the funds of the trust by making a compensatory payment. My right hon. and learned Friend the Member for Chertsey (Sir L. Heald) was a little unfair to the Bill in this respect.
  I also much prefer the Bill to the suggestion of a State-run unit trust. There are various people, who may be many or few—various trustees, various beneficiaries—who all have different needs according to the age of the life tenant and who gets the money when the life
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  tenant dies. One wants to give the trustee the right to choose investments suitable for the conditions of the trust rather than to suggest that he may only go into equities by buying a unit in one particular unit trust, even though it is State-run.
  Mr. Sydney Silverman: I am following the argument of the hon. Member with great care and with some sympathy, especially in what he says about the burdens and changed circumstances of the small men acting as trustees for small estates, but which for that very reason are so important to their beneficiaries. Does he not appreciate that one of the principal criticisms of this Bill is that to such a man it is virtually unintelligible, and that he gets no guidance nor help from a Bill which he is absolutely unable to understand? Does the hon. Member agree with that?
  Mr. Denzil Freeth: Having dealt with the principle of the fifty-fifty rule, I am coming to the mechanism, which has been the subject of a great deal of debate this afternoon. I certainly agree with the hon. Member for Nelson and Colne (Mr. S. Silverman) that simplicity is something at which we should aim. For that reason, I hope that Clause 3 will be very drastically redrafted. I hope also that property in the sense of freehold property held by a trust as an investment will be put on one side. It seems to complicate the Bill to an enormous degree to consider a property under these headings. I suggest that what we should consider in relation to this Bill are purely investments held by the trust, either in cash, or under Parts I, II and III of the First Schedule.
  One or two possibly smaller points, certainly come under the heading of simplicity. The trustee has to obtain the written advice, not of
  "a competent professional financial adviser"
  as was the wording of the White Paper. He has to get proper advice from one whom he believes
  "to be qualified by his ability in and practical experience of financial matters"
  I am a stockbroker and people ring me up with ideas they have been given by people who "know". Therefore, I should like to go a little further in qualifying the phrase, about somebody
  "who is reasonably believed"

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  to have
  "ability in and practical experience of financial matters."
  I am not sure that the trustee should not commit to paper the reasons for his believing the person from whom he sought advice was one reasonably qualified to give it. I am not altogether sure that he should not write down and leave for the beneficiaries his reasons for accepting or rejecting that advice.
  I should also like to raise, although it may be a Committee point, the question of Clause 5 (4) and 5 (6), in connection with getting advice. Are they completely clear? We all know what the Bill is aiming at when talking about an "officer or servant", but surely the Bill should be drawn a little more clearly. Where the officer or servant is the sole trustee, apparently he need seek no other advice at all. Surely we should have some wording in the Bill as to by whom he is employed or of whom he is the servant, because if we are allowing a person employed, even though employed by the investment department of a bank, for example, to act as a sole trustee and to take no other advice whatever, we are surely opening the door quite wide.
  There are one or two other points which I want to mention because I hope that by the Committee stage the Government will have had time to consider them. I ask hon. Members to look at the First Schedule, which deals with the list of shares which may be bought in the wider range. One wonders why the stock of the Bank of Ireland still remains in Part II. Presumably it remains from the days when the Bank of England and the Bank of Ireland, hand in hand, were the independent Central Banks. But the Bank of Ireland today does not come under the laws of the United Kingdom, even though it was founded by Royal Charter many years ago. Unlike almost all the other shares in Part II, Bank of Ireland stock is an equity share and the dividend has, in fact, risen from 14 per cent. in 1952 to 20 per cent. in 1960. In addition, one has to note that apparently the stockholders are potentially liable for the amount of money of the notes in circulation should the bank fail. Et is difficult to see how the Bank of Ireland is to be considered a far more respectable security and more suitable for the narrower range than, for example,
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  the equity shares of the note-issuing Scottish banks or even the joint stock banks of the United Kingdom.
  Is paragraph 3 (b) of Part IV of the First Schedule enough? My hon. and gallant Friend the Member for Cheltenham referred to the Bill which was introduced into the House in the last Parliament by my hon. Friend the Member for Aldershot (Sir E. Errington), which attempted to define, in general, certain types of equity shares. Are sub-paragraphs (a) and (b) alternative or are they cumulative?
  Secondly, merely to have an issued and paid-up equity share capital of £1 million and to have paid a dividend in each of the five years preceding the investment are not sufficient to give an assurance that the company will forge ahead. If a company has an issued equity capital of £1 milion and last year paid 10 per cent. and the year before 12 per cent, and the year before that 14 per cent., it is obviously not the sort of company in which the simple investor for the small trust should be encouraged to invest. I think that we should try to cover this matter by suggesting that, in addition to having an issued equity capital of £1 million, the gross amount paid out in ordinary dividends should not have been reduced within the last three years before the investment was made. The wording could be analogous to that in the White Paper on dividend limitation in the summer of 1951.
  I believe that equity investment needs supervision. I do not believe that the trustee who perhaps has done nothing for years, because all the investments were in trustee securities, can—like the sleeping beauty—go to sleep and forget all about it. He may perhaps hope that the beautiful take-over prince will come and rescue him, but possibly the beautiful take-over prince will not. Equity shares can decline in value and dividends can be reduced. The Bill recognises this by putting on trustees in Clause 5 (3) the onus of taking advice and reviewing the portfolios of investments at such intervals as they may think fit.
  This is very different from the Clause in the Bill when it was introduced in another place. It was then suggested that the trustees must have the list of investments reviewed at intervals of not more than five years. Following a speech

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  by the noble and learned Lord Nathan in another place on 28th November, my noble and learned Friend the Lord Chancellor moved an Amendment deleting that Clause and inserting the Clause which we have in the Bill, as reported in column 948 of the House of Lords HANSARD of 20th December.
  My noble and learned Friend's argument was that if we put a period in the Bill, automatically that period would come to be regarded as the norm for reviewing the investments. He said that in some trusts it was essential to review more frequently than in others. I fully agree with all that, but as the Bill stands at the moment the trustee could go to sleep and do nothing for years, and I do not think that it is much use the beneficiaries having the right to seek compensation if the trustee has no money left. I hope that we shall return to this in Committee.
  For the moment, I welcome the Bill and congratulate the Government on it. I believe that it will help trustees, beneficiaries and local authorities and that it will hinder no one, unless it is the Treasury in managing the gilt-edged market—and that is possibly too big a problem already to be greatly magnified by this Bill and certainly to be discussed on Second Reading.
  6.58 p.m.
  Mr. David Webster: Like my hon. Friend the Member for Basingstoke (Mr. Denzil Freeth), whom I was glad to hear making a cheerful noise on this subject, I must declare an interest. I follow the same occupation as he does. Like him, too, I welcome the purpose of the Bill in giving belated justice to those trustees where the remainderman has not already given an indemnity to the other trustees indemnifying them against capital loss and in other trusts where they have not made application at considerable expense and trouble to the court and already have escaped from the trammels of the Trustee List.
  Having welcomed the Bill, however, I must say that there are certain doubts whether it will work and whether in all respects it will fulfil the Government's very honourable and realistic intention. The first changes which I suggest—and
  416
  here again I follow my hon. Friend the Member for Basingstoke—are in Part IV of the First Schedule, where there is a reference in paragraph 3 (a) to £1 million nominal value. This itself throws into disrepute our old acceptance—we have not yet go rid of it—of the nominal share value and makes yet another case where we should have shares of no par value.
  A company with £1 million paid-up capital will be all right for the Trustee List in the new form, but it may have exploded all its reserves in order to keep itself on the dividend list for the last five years. On the other hand, a company with £750,000 nominal value, paid-up shares, might have accumulated considerable reserves by self-financing and have a greater worth and a greater integrity than the company which will be on the Trustee List. I suggest that if this is not amended in Committee, then after the Bill becomes an Act, as I hope it will, we shall have a spate of scrip issues of only paper worth to bring the nominal value up to the specified amount. I therefore recommend to my right hon. Friend that the specified amount should be that the paid-up capital plus the free reserves of the company should be brought up to £1 million in order to make it eligible for the Trustee List.
  In 3 (b) of the same Schedule, we have the qualification that the company must have paid dividends for each of the last five years. A company such as an expiring gold mine, a wasting asset, could quite easily have paid out dividends for the last five years, but, because of that, exploded its reserves and would no longer be of any value to a widow or orphan. I understand that one of the main purposes of this Bill is to protect such people. At the same time, the Bill does insist that trustees get competent advice. In both of these cases, the qualification and requirement is flying in the face of competent advice, and I very much hope that in Committee it will be changed.
  Like most of my hon. Friends and most of the right hon. and hon. Members who have spoken from the other side, my main objection is to the fifty-fifty principle. I do not want to labour that, because I think it has been expressed very clearly by other hon. Members already. I think that the fact that it is itself harsher than the requirement of

  417
  the court and that an Amendment is being considered by the Government to suggest to the court that it does not in fact enforce the law is, I think, an interesting possibility, although I realise that the Bill is protecting the smaller trusts which would not in fact go to the court and, for that reason, are endeavouring to be exceptionally cautious.
  On the other hand, I think there is the very dangerous possibility that the Bill is doing something that the Trustee Acts did not do; that is, trying to control not only the purchase but also what should be sold by the trustees. It is a new principle, and it is a dangerous principle.
  For example, I would take the case where a trust has very commendably set aside redeemable gilt-edged securities in order to pay Estate Duty in due course and in order to avoid the necessity of selling shares in a private company. Under the strict observation of the Bill, if it is passed into law, we would have the trust being compelled to sell stock from the broader range; in other words, the equity section of the trust. I think that is flying in the face of the direct intention of the testator when he requested the setting up of a special fund of redeemable gilts in order to pay any Estate Duty in due course. That is an unfortunate possibility, and I should be grateful if it could be looked into.
  I have declared an interest because I am a stockbroker. There are people Who suggest that there will be a great rush into equities as a result of the Bill being passed into law. I do not deny it, but I place a limit upon it because any trust that goes into equities as a result of this will be obliged, unless the life tenant is to suffer loss of income, to look for a company that is paying as a yield 6 per cent. or more. These are the companies that today have been left behind in the equity surge forward of recent years.
  In these categories there are companies that are definitely of a high risk element which no competent adviser would suggest. There are also other companies which have proved themselves to be unfashionable, and no doubt those will be the ones which trustees will be commended to look at. This is not an insuperable objection, but I think the need to avoid the forgoing of income will necessarily slow down the process of the change from gilts into equities. I wel-
  418
  come this in many cases, because it will enforce prudence by people who, by their very nature and because of the responsibility they have undertaken, will wish to be prudent anyhow.
  I welcome very much indeed the purpose of the Bill, and I wish it well. At the same time, I hope that the Amendments can be included in order that it will fulfil the intention of the Government in bringing it to this House.
  7.5 p.m.
  Mr. Martin McLaren: It is always a pleasure to follow my hon. Friend the Member for Weston-super-Mare (Mr. Webster), particularly in a matter where he has professional and practical experience. I especially welcome what he said about the requirement in Part IV of the First Schedule that companies to be eligible must have a total issued and paid up capital of not less than £1 million There is a growing realisation that this idea of capital of fixed par value means very little and is only of historical significance. A large part of a company's original capital may in practice already have became lost. Many of us look forward to the day, which has been so long delayed, when the Report of the Gedge Committee will be implemented and companies, if they wish, will be allowed to issue shares of no par value. When that day comes, if the present provision is not altered in Committee, it will then have to be amended.
  I welcome the Bill as a step in the right direction. I suppose we all agree that the underlying need for it has been caused by the failure of Governments of all parties to keep the value of money steady. The inflationary tendencies of currencies have made any money stock dangerous and have made it more prudent to invest in real values. As the Nathan Committee said some years ago, the very restrictions which were intended to be a safeguard have become a snare and a danger.
  People's ideas of investment change. A hundred and fifty years ago it was the fashion for people to invest in land, mortgages, and in funds. That was perhaps all there was to invest in. The other day I was reading the life of Lord Eldon in Campbell's "Lives of the Lord Chancellors". There was a passage there in which we were told what

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  he did with his money. This is what it says:
  " He bought some land and laid out considerable sums on mortgage, though like his brother, Lord Stowell, he preferred for his accumulations the elegant simplicity of the 3 per cents ".
  Those days have gone and the modern idea, in the changed conditions of our times, is that it is better to invest in the equities of the great growth companies, such as, for instance, the chemical companies, where large sums are retained every year out of profits and reinvested, with the result that as time goes on the assets of the companies and the values of their shares, admittedly with fluctuations from time to time, tend in the long run to rise as they must almost inevitably do. People have found that it is only by investment in equities that they can keep pace with the welcome improvements that salary and wage earners have received.
  I wonder whether the Bill, welcome as it is as a step in the right direction, may not be too little and too late—too little because the powers given by the Bill will still condemn trustees to hold as much as half of their funds in fixed interest securities. Historically, during the last thirty years or so, there can have been few times when if would have been prudent for the managers of a fund to put as much as half of it into fixed-interest securities. I would rather see more elasticity in the Bill, and perhaps a provision that the fifty-fifty balance could be altered later by Statutory Instrument.
  In that connection it is interesting to look at the modern practice of investment trust companies. They are very well managed. As a matter of current practice, they find that it is wise for them to invest 80 or even 90 per cent. in equities and only the balance in fixed interest securities. That is a marked change compared with ten years ago.
  The hon. and learned Member for Kettering (Mr. Mitchison) mentioned the Church Commissioners. They are a very well-managed and prudent body. They have found it desirable to have roughly one-third of their investments in equities, one-third in land and property, and only the remaining one-third in fixed interest securities. They thus have an arrangement by which as much as two-thirds of
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  their fund is in property which it is hoped will appreciate.
  The Bill may be too late because it has come at a time when the gilt-edged market is very nearly at an all-time low. It will present trustees with the difficult problem of deciding whether to sacrifice their holdings of Government stock at present prices and reinvest in equities at a lower yield.
  Trust funds would have been saved heavy losses if the Bill had been introduced some years ago. My hon. Friend the Economic Secretary gave us a historical review, starting with the Report of the Nathan Committee in 1952 and with the valuable Bill of my hon. Friend the Member for Aldershot (Sir E. Errington) in 1956. My hon. Friend did not tell us how very lukewarm, and indeed hostile, was the reception of the Government of the day to the recommendations in Chapter 8 of the Nathan Committee's Report as to investment in equity shares by private trusts.
  On 27th July, 1955, a statement was made by Lord Selkirk in another place in which every conceivable objection was made to the idea of allowing trustees to make any investment at all in equities or to adopt what has been called the fifty-fifty rule. I believe it is worth while my reading one or two sentences from what was then said:
  " In the opinion of the Government, the proposal for a general extension of the range of investment to include equity stocks and shares is open to serious objection. The very considerations which in some circumstances would lead to the enhancement of the trust funds might in other circumstances lead to considerable losses, and the Government has to recognise the possibility that the inclusion within the Trustee List of securities hitherto excluded might be regarded by the general public as conveying a measure of official guarantee of their suitability for investment.'"
  What a bad argument that was. The passage continues:
  " ' The object of the Trustee List is to ensure the safety of the trust funds in cases where, for example, the settlor has not thought fit to give a wider power of investment. Its purpose is not to offer wider opportunities to trustees to exercise the skill in investment which the management of investments in equity securities continually requires.'"
  Later on these words appear:
  "'The Government's conclusion is that any general extension of the powers of investment of trustees would not be desirable.'"—(OFFICIAL REPORT, House of Lords, 27th July 1955; Vol. 193, cols. 1095 and 1096.]

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  The attitude of the Government today is very different from the attitude of the Government five years ago. I look on those five years as having been lost. It is perhaps an illustration of how opinion on the back benches is about five years ahead of opinion on the Front Bench. I welcome the tardy conversion of the Front Bench, expensive though it has been for beneficiaries. We can affectionately describe the Treasury Bench in a phrase which was used not long ago in another context—"wandering souls but happily not lost".
  In future economic and social history today may be recognised as rather a landmark, as being the day when Treasury Ministers have for the first time acknowledged to the House that their own securities are not necessarily the most worthy for trust funds. It is rather an Ash Wednesday for the Treasury Bench, a day of sackcloth. It is a red letter day for trustees and beneficiaries.
  I agree that the provisions of the Bill as they now stand will make it much more difficult for the ordinary trustee to administer his trust without having to go on practically every occasion to his professional advisers to ask whether he is all right. I hope that in Committee we shall be able to look at the Bill in detail with a view to making it more plain and straightforward.
  Having made those few comments, I want to say again how glad I am that the Bill has at last arrived.
  7.17 p.m.
  Mr. Donald Box: The Bill has been long awaited and will be warmly welcomed by all categories of trustees and beneficiaries who have suffered in the past under the yoke of the Trustee Act, 1925. I welcome it as an investment adviser and a trustee, but not, unfortunately, as a beneficiary. Nowhere will it be more warmly received than by the unfortunate widows and infants whose funds, awarded as damages or compensation, have been invested under the Rules of the Supreme Court, because up to the present they have 'lad a very raw deal indeed. Because of the plight of poor unfortunate people like these, about which I wish to say more in a moment, I am very sorry that Clause 5 is not more
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  specific in requiring a review of investments at regular intervals of, say, every three years.
  I will describe to the House just what can happen when a regular review is not made. I do not know how many hon. Members are familiar with the position of funds in court. I discovered the position when I was investigating the case of the young son of a constituent of mine. This boy was awarded £750 damages after being injured by a British Railways' lorry in 1955 at the age of 4.
  In accordance with what I now discover is normal practice, this sum was invested under the Rules of the Supreme Court in that rather discredited undated stock, 3½ per cent. War Loan. As hon. Members can imagine, the capital value of this boy's damages, as represented by this investment carried out by the equivalent of his trustees, has already taken a nose-dive in value. His £750 is worth a mere £534 at today's values. That is a depreciation of 28½ per cent. on the capital sum in just over 5½ years. I shudder to think what it will be worth when he comes of age if the provisions of the Bill allowing wider powers of investment to trustees do not become law.
  In answer to a letter on the subject that I wrote to my noble and learned Friend the Lord Chancellor, I had a detailed and courteous reply which also referred me to the Report of the Committee on Funds in Court set up by the Lord Chancellor under the chairmanship of Mr. Justice Pearson. That Report, which was published in July, 1959, made interesting if somewhat alarming reading, for from it I was horrified to learn that some 95 per cent. of the funds belonging to widows and infants were—and, presumably, still are—invested in 3½ per cent. War Loan. As the capital depreciation on this stock in recent years has been enormous, it is hardly surprising that a good part of the Report is taken up with explanations to justify this rather extraordinary choice of an undated stock from a list which includes a number of apparently highly-desirable dated and redeemable Government stocks.
  I do not want to appear to be trying to be wise after the event; in financial circles we have a name for that—we call it "jobbing backwards". However,

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  I am quite sure that were I a beneficiary under the present system of handling—I nearly said "mishandling"—funds in court I should want some explanation of the circumstances surrounding the strange decision to invest on behalf of widows and infants such a large proportion of these funds in an undated Government stock. I should also want to know what steps were taken to obtain expert financial advice on the wisdom of the choice at the time of the investment, and how often the investment had been reviewed since the purchase.
  As I understand it, the duty of a trustee is to invest in such a way as to maintain the reasonable balance between capital and income. In some cases, special circumstances may require that a higher-than-average income is needed from a trust, but in others the reverse may be the case. In such conditions, I would expect a conscientious trustee to take expert advice with the object of meeting, as far as possible, the beneficiary's wishes, as long as it were consistent with prudent investment. If the beneficiary were an infant, however, there would be no doubt whatsoever in my mind that the most important factor to be considered would be the protection of the capital sum until that beneficiary came of age.
  That that view is shared by the Queen's Bench Master—in theory, at any rate—is substantiated by the following sentence in the reply that I had from my noble and learned Friend the Lord Chancellor, which reads:
  "It has always been the Master's view that the system should provide that the capital should maintain its value, and not be subject to market fluctuations and that a reasonable rate of interest should be provided."
  My noble and learned Friend also expressed what I fear to be the rather pious hope:
  "If of course the price of 3½ per cent. War Stock increases sufficiently, the infant may still benefit from a capital gain."
  For the sake of widows and infants, I hope that he is right.
  The main reason given in paragraph 44 of the Pearson Report for choosing 3½ per cent. War Loan is not, as one might expect, the higher interest rate obtainable, but the rather lame one that the interest was, and still is, paid without deduction of tax. It is argued that in
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  this way many beneficiaries were relieved of the task of reclaiming Income Tax overpaid and to which they were not liable. I need hardly point out that if the wider powers of investment envisaged by this Bill are adopted—and, incidentally, they broadly comply with the recommendations of the Pearson Committee—some solution to this problem of reclaiming tax will have to be found, as a large proportion of the dividends on future investments is bound to be paid after deduction of Income Tax.
  Another advantage claimed for 3½ per cent. War Loan is that it is one of the Government stocks included in the Accountant-General's exchange system. This system sets off sales and purchases against each other, and quick settlement is effected. But as Government stocks can already be sold through the market for cash settlement within two or three days, I cannot see any great advantage here.
  The third rather dubious reason given is that where funds are not required to meet the immediate needs of the beneficiaries, as in the case of an infant, the income can be capitalised and reinvested from time to time. This is almost adding insult to injury, for any infant who has had his funds entrusted to the High Court in this way in the past has not only suffered considerable depreciation in his original capital but has also had his interest whittled away as capital in the same way—and this ignores any loss the child may suffer from depreciation in the value of money over the years
  It is as well for some people that trustees are protected by law. It is impossible to estimate the total loss involved, but as widows' and infants' holdings of 3½ per cent. War Loan exceed £4 million the sum must be considerable. Unfortunately, under the existing rules of the Supreme Court, there is no provision for the periodical revision of investments, and no claim can be apparently made on the High Court for restoration of capital lost.
  In the county court, however, things are totally different. Funds of widows and infants paid into the county court bear an interest rate of 3½ per cent., but they are also subject to a guarantee by the Government for the repayment of capital and interest, £ for £, without any

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  capital appreciation or depreciation. Despite this provision, these county court funds are invested—behind the scenes, so to speak—by the National Debt Commissioners, again mostly in undated Government stocks, so that whenever a beneficiary is paid out by the county court at par there is inevitably a difference that is, presumably, met in one form or another by the taxpayer.
  On the evidence contained in the Pearson Report, and the information given to me by my constituent, I believe that the High Court has failed miserably in its duties as trustee, especially in the case of infants. It is possible that if the Trustee Act required a regular review of investments such deficiencies would rarely arise, and, even if they did, one would at least be compensated in the knowledge that every reasonable precaution had been taken to avoid them.
  I hope, therefore, that at a later stage Clause 5 will be amended to include a definite periodic review of investments. I hope also that my right hon. and learned Friend may feel disposed to initiate a close investigation into the past handling of widows' and infants' funds by the High Court because, on the face of it, it would seem to me that these beneficiaries have a very strong case for claiming compensation from the Government for the disastrous losses they have incurred.
  7.29 p.m.
  Mr. John Hobson: I intervene at this late stage only to ask three short questions of my right hon. and learned Friend. The speech that we have just heard from my hon. Friend the Member for Cardiff, North (Mr. Box) seemed to proceed on the basis that the Bill deals with funds in court. I must say that I have found myself to a large extent mystified by many provisions of the Bill, but I had assumed that as it at present stood it did not deal with the question of funds in court. Will my right hon. and learned Friend clarify that point and say whether it is the intention of the Government, if the Bill does not apply to such funds, either to amend it so that those funds can be dealt with, or to deal with the point in some other manner?
  My second question is this. Will my right hon. and learned Friend make clear
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  to the very many mystified trustees, who already have wider powers of investment in a reasonably extensive list of investments, whether or not they need to try to disentangle the mysteries of Clause 3 of the Bill? I was visited yesterday by a trustee of considerable experience in the City of London, who is a trustee of a well-known charitable and highly respected scientific society. That society has recently, by order of the court, been told that it may invest up to two-thirds of its investments in equities, but he does not know, and the is anxious to find out, whether that is quite sufficient, whether he can forget about the Bill because he already has adequate powers under the order of the court, or whether he has to divide his funds, whether he has in future to seek advice under Clause 5 before he does any investment, or whether, because he has these extensive powers allowing him to invest in equities to an extent greater than 50 per cent., he need trouble about the Bill at all. It would allay a very great deal of anxiety now felt quite unnecessarily by very many trustees if my right hon. and learned Friend explained to the public generally that there are very many trustees who will receive no benefit from the Bill and need not try to understand it.
  Thirdly, I want my right hon. and learned Friend to look again at Clause 5 (4), which deals with the persons who are entitled to give advice and the persons upon whom a trustee is entitled to rely. As it is drafted now, the words are
  "a person who is reasonably believed by the trustee to be qualified by his ability in and practical experience of financial matters."
  Of course, everyone who has ever been in a criminal case knows that the one thing that the confidence man does is to create in the mind of the person he is defrauding a very reasonable belief indeed. He leads him up the garden path by all kinds of stories so that the person who is defrauded has an utter faith in the capacity and ability of the individual who is really going to take the funds away from him. How the standard of the person who should be entitled to advise the trustee could be a reasonable belief created in the mind of the trustee to be advised I find very difficult to understand.
  I very well appreciate the great difficulty in laying down categories. There are many solicitors who know almost

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  nothing about investments, and stockbrokers and bankers may be far too small a class. I should have suggested that it might be possible to consider classifying, shall I say, stockbrokers, bank managers, bankers, merchant bankers, investment experts and such, other persons as may obtain either from the local county court judge or from the local magistrates, or some other form of authority where someone responsible can conduct some sort of inquiry to determine whether a person is qualified to give advice to those who may be quite ignorant and poor people who have not the faintest idea about who is or is not experienced in financial matters and who may, indeed, think that the local grocer who once was left a legacy of £300 and invested it with success is a great financial expert.
  I am sorry to have detained the House, but I should be very much obliged if my right hon. and learned Friend would give an answer to each of those three questions.
  7.34 p.m.
  Mr. A. J. Irvine: This has been an interesting debate upon issues of general interest though not of a kind to generate vehemence, certainly not on party lines. Most hon. Members who have been here during the debate will agree that the object of the Bill has, by and large, met with general approval.
  In recent years, the position has been that the severe restrictions governing authorised trustee investments have occurred in the context, first, of the great freedom for settlors and testators to authorise investments in the trust instrument and, secondly, of the powers under the Trustee Act, 1925, and under the Variation of Trusts Act, 1958, to go to the courts for orders which will, if given, secure greater freedom of action for trustees. The extraordinary restrictiveness of the provisions affecting trust instruments where investment intentions are not spelt out stands out all the more strikingly when it is considered in contrast with the freedom of action which may be allowed by the court under the Acts I have mentioned or which exists where special investment powers are incorporated in the instrument creating the trust.
  As I understand it, the law in this respect has proceeded upon the assump-
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  tion that the requirements of a testator who has not expressly conferred special investment powers are best met by confining his trustees to a noticeably narrow range of investment. That does not seem to be an assumption which it is necessarily correct or desirable to make. For these reasons, and because we know that this state of affairs has worked harshly upon many people, there has been general agreement that the time has come for amendment of the law, and, generally speaking, the Bill has received a welcome from the House.
  When one turns to inquire how well the machinery proposed in the Bill meets the case, all those who have listened to the debate will realise that at that point hon. Members take rather different views. There has been a good deal of variation in the reaction of hon. Members to what is proposed. It is fair to say that many who have spoken in the debate have clearly been impressed by what struck them as the rather arbitrary and rigid proposed division of the trust fund into two halves. Speaking only for myself in this regard, I would subscribe to that view.
  Even now, under the provision of the Bill if it become law, a trustee can invest only one-half of the trust fund in the wider range. One wonders how that division was arrived at. We have had the assurance of the Economic Secretary that it was a ratio decided upon having regard to general considerations of equity and compromise and without any attention being paid to the factor that any other apportionment might possibly have brought an undesirable additional strain upon the price level of Government stock and fixed-interest investments. One accepts that assurance entirely, of course, but one is nevertheless left with a doubt about the reasoning which led to the choice of the fifty-fifty ratio.
  The first reaction of many of us has been one of regret, in this respect and in certain other respects, that a more pliable and flexible method was not adopted, a method which might even, I should have thought, usefully have gone to the length of taking into account such matters as the size of the fund or even such circumstances as the age of beneficiaries and matters of that kind which are factors which noticeably affect the question of what is an appropriate

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  exercise of his discretion and his duty by a trustee.
  One must remember that the Bill is intended to govern this matter not merely for a short period but for many years to come. Bearing that in mind, one is inclined to regret all the more the absence of flexibility in the provisions. In these years it is likely that there will be periods when prudent trustees will be well advised to invest more than half of any trust fund in equities. The value of gilt-edged may be expected to fluctuate during these years with Bank Rate, yet here is imposed on trustees by Statute a scheme of division which, beyond a certain point, noticeably limits their freedom of action.
  In offering that last point for reflection, I bear in mind the observations of the hon. Member for Belfast, North (Mr. Stratton Mills), who indicated that the relationship between Bank Rate and gilt-edged prices was not so close as it used to be. This may well be the case, but I should have thought that it was quite obvious that, over a period of years, one cannot exclude the possibility of situations developing in which it is perfectly clear that a prudent trustee would be well advised to have more than half the trust fund either in the narrower range or in the wider range. Yet here is proposed a provision which imposes a rigid and inflexible limitation.
  I venture to think that it is very important to remember that this degree of rigidity applies to the narrower range investments as it does to the wider range. If affects both, as I understand it, and this should not be overlooked. If the decision is once made to have a division of the trust fund under the Bill, surely the fifty-fifty limitation applies to the narrower as well as to the wider-range investments. I appreciate that, until that division has been made, there is a discretion in a trustee to put all the funds in the narrower-range investments. I should like to be corrected here if I am wrong, but, once the fund has been divided under the provisions of the Bill, it would seem that this rigidity applies to the narrower-range investments as well as to the wider ones.
  I have put forward these observations about the rigidity of the proposals in the Bill, but I am bound to acknowledge the difficulty. I am inclined to think that
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  it is probably not desirable that trustees should have an unrestricted discretion to invest the whole of the trust fund in equities. I differ from some hon. Members, including the hon. Member for Dover (Mr. Arbuthnot), who would prefer an unrestricted discretion. I think that it is desirable that there should be some restriction. The moment that I adopt that position I am in trouble, because it is undoubtedly true that when it comes to rigidity or arbitrariness one ratio is as arbitrary as another. I acknowledge that. What I am concerned with at the moment is to acknowledge the difficulty and to say that I should he disinclined to quarrel strenuously with the Government's decision, although I am one of those hon. Members who might have preferred, let us say, a five-eighths wider-range discretion rather than a fifty-fifty discretion.
  I should like to know what would be the Government's reaction to the suggestion that, just as by Order in Council additions can be made under Clause 9 to the list of investments, there might be a provision, additional and parallel to the Clause 9 power, that by Order in Council it could be made possible to vary this ratio from time to time. This suggestion was adumbrated by the hon. Member for Bristol, North-West (Mr. McLaren). Clearly, it would be undesirable and impracticable for that to he done at too frequent intervals, but. as in all likelihood we are making provision in the Bill for many years to come, would not this be another possible method of trying to rid the Bill of the degree of excessive rigidity which I think it is inclined to have?
  There are only one or two additional points that I wish to put before the House. The first concerns the effect of Clause 1 (3). This is one of the provisions in the Bill which I think makes one pause. As I understand it, the effect of it is this. If a testator or settlor in an instrument made before the Bill becomes law vetoed an investment which by virtue of the Bill becomes authorised, then the veto loses its effect altogether in the case of the settlor or testator having died, and in other cases unless the settlor or testator executes a new instrument or codicil.
  I should have thought that this was a somewhat odd position, since a testator who has gone to the length of an express

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  provision of this kind and of vetoing certain classes of investment must be taken to have felt rather strongly on the point. Although this is by way of comment on what is really a Committee point, I should have thought that it may perhaps be open to objection in principle that, where there has been for some reason a strongly felt wish of this kind on the part of a testator or settlor, there should be this automatic statutory abandonment of an intention so carefully formed and expressed.
  The Solicitor-General: I want to be sure that I understand the point that the hon. and learned Gentleman is making. Is he suggesting that if, say, there is a codicil to a will executed before the passing of the Bill into law, and a codicil executed afterwards in which a contrary expression to the wide investment powers given in the Bill is expressed, that contrary intention would not take effect? Or have I misunderstood the point?
  Mr. Irvine: I am obliged to the right hon. and learned Gentleman. No doubt entirely through my fault, he has not quite seized the point I was making. It went no further than this. Under the subsection to which I have referred, I understand that if a testator or settlor has made a provision in the trust instrument which debars the trustees from certain classes of investment and then, before the Bill becomes law, he dies, the effect of this Measure is that the veto which he has incorporated in the original trust instrument ceases entirely to have effect. That is a remarkable result of statutory provisions bearing in mind the circumstance that any settlor who made a provision of that kind in his trust instrument must be presumed to have felt rather strongly upon the point. That is the only observation I made, and I added that the same point applies, although with less force, to the case of the settlor or testator who has included such a veto in his trust instrument and who still survives and, after the Bill becomes law, if it does, does not execute a new instrument or codicil.
  These matters indicate the fashion in which, here and there, quite important and interesting departures have been made from what thus far have been the principles governing the law in these matters. For my part, I have no ad-
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  verse criticism to offer of Clause 5, which relates to the duty of the trustees. It is right that there should be this statutory provision that the trustee must take advice. Moreover, it is entirely right that there should be no requirement that he should follow it. Any such requirement would surely involve a derogation from the independent judgment of the trustee, which would be contrary to the whole basic conception of a trustee's status and duty.
  I also do not feel disposed to make any criticism of the contents of the narrower and the wider ranges of investments, although, from some of the observations that have been made during the debate, one would come nearly to the conclusion that irredeemable undated Government stock should not be permitted to have a place even within the narrower range. Considerations of that kind, however, affect more the financial and economic policy of the Government than they affect our present debate.
  Over all, I would expect that the House, on both sides, would be inclined to welcome the Bill. If in certain respects it seems to some of us to be some-What arbitrary and inelastic in its method, I should be the first to acknowledge that it is not easy to suggest alternative methods against which similar objection could not be raised.
  7.55 p.m.
  The Solicitor-General (Sir Jocelyn Simon): The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) was justified when he was good enough to say that this is an important Bill and that, by and large, it has been welcomed by the House. Certainly, with the possible exception of the misgivings expressed on principle by my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth), the House has recognised that the Bill represents a considerable and desirable advance in enlarging the discretion of trustees in the investment of their trust funds.
  The scheme which is now implemented by the Bill was, as my hon. Friend the Economic Secretary reminded the House, put forward in the White Paper of December, 1959. It was enthusiastically acclaimed by informed opinion. Such criticism as there was was confined to matters of detail and has been largely met in the respects in which the Bill

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  differs from the White Paper. Those deviations from the White Paper have been welcomed this evening.
  It is fair to say that there was no criticism of the general concept set out in the White Paper, which has found expression in the Bill—although it is true that, as the hon. Member for Gloucester (Mr. Diamond) urged in unholy alliance with my hon. and gallant Friend the Member for Cheltenham (Major Hicks Beach), that certainly does not preclude the House from subjecting the Bill to hostile scrutiny if hon. Members so wish. On the other hand, it is fair to point out that when the Bill was published the favourable view of informed commentators continued.
  The Economist, for example, had said of the White Paper:
  "The principles of the proposed reform will command wide acceptance."
  When the Bill was published, that journal had a further note in which it said that some fruitful changes from the proposals in the White Paper had been made in the Bill and it described it as a "Good Bill". Thus, it is only quite recently that any substantial criticism has been made of the Bill and, as I hope to show, a considerable number of those criticisms are based on misapprehensions. I recognise, on the other hand, that some criticisms as to the machinery provisions have weight. I shall have more to say about those.
  I submit, however, that the initial favourable reaction was abundantly justified. The Bill represents a considerable step forward towards that freedom for trustees to invest in equities which almost all hon. Members wish to see. It seemed to me that some hon. Members tonight were not so much looking a gift horse in the mouth as inserting a gastroscope into its very entrails. I was encouraged by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), who has great experience in the courts in this kind of work, when he said that he thought the Bill would work. That is a justified point of view. My hon. and learned Friend urged us to simplify, and I will have more to say about that presently But, in view of certain criticisms of the proposal that 50 per cent. of trust funds should remain in Government stock, or some other such easily realisable securities—what, for con-
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  venience sake, we have been calling today gilt edged as opposed to equities—perhaps I may recapitulate what led the Government—as I say with general approbation—to this conclusion.
  First of all, it is fair to say that the view that 50 per cent. of trust funds should be in gilt edged was the view of the very experienced Nathan Committee. The Chairman of that Committee, as a solicitor—
  Mr. Diamond: Am I not right in saying that that was the noble Lord's view about charities?
  The Solicitor-General: Certainly that was the scope within which he had to consider the problem. As I say, that was the view taken by his Committee. It is difficult to see why there should he a different rule for charities from that for private beneficiaries. On the contrary, one would have thought that in the case of charities one would be justfied in having a wider rather than a narrower discretion for the trustees.
  I was pointing out that the Chairman of the Committee has very great experience both as a solicitor and in his public and charitable work, and he presided over a committee of very great ability, which examined this problem for a considerable time.
  Mr. Diamond: I am sorry to interrupt again. Am I not right in saying that when the noble Lord made his speech on this topic in much more recent times than when his Committee reported, he said several times that his view was that the greatest discretion should be given to trustees?
  The Solicitor-General: I read the proceedings in another place, which we are not allowed to quote, because Lord Nathan is not a member of the Government, but that is not my recollection of what he said. My impression is that he stood by the fifty-fifty division and thought that it was right.
  Mr. Mitchison: Why should not the right hon. and learned Gentleman quote the proceedings in another place? They were in the last Session.
  The Solicitor-General: I think not. I think that the hon. and learned Member for Kettering (Mr. Mitchison) has obviously had such a fabulously good

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  Recess that anything before that recedes into a distant past where it is confused with a former Session.
  Secondly, the White Paper, as I said, set out the principle, and it was then generally accepted. Thirdly, the principle was accepted by Parliament in the House of Commons Members' Fund Act, 1960, and in local authority private Acts in recent Sessions.
  Fourthly, it accords with the view taken by the courts in many cases—though not invariably. In charitable trusts, a common formula is the retention of one third of the funds in the present Trustee List. Although I think it is fair to say that in private trusts the courts frequently give unlimited power, they are usually of the very large sort of trusts referred to by my hon. and gallant Friend the Member for Cheltenham.
  Major Hicks Beach: I would not accept that at all.
  The Solicitor-General: Nevertheless, it is true that, by and large, only the large trusts do apply. Fifthly—and this is really the crux of the matter—a safeguard of this kind is necessary particularly for the trustees of small trusts who may not be able to get the best possible advice. As my hon. and learned Friend the Member for Darwen pointed out, we are dealing with the generality of trusts, particularly the generality of small trusts.
  Whatever it may be fashionable to say today, investment in equities can involve very heavy risk of loss of capital. Their values can fall at times very far indeed. I do not think it would be difficult to find among some of the very top companies in, for example, electrical engineering or shipping, firms which would undoubtedly have been recommended to trustees by competent financial advisers. Yet their shares have fallen proportionately as much as or more than War Loan, and in a period of months rather than of years.
  We can think of the case, not very long ago, of great shipping companies where virtually the whole of the capital disappeared in a crash. There have been recent reports, which hon. Members probably have in mind, of the case of a company with a nominal capital of £1 million, an issued capital of £800,000,
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  and assets which were at one time valued at more than £3 million. Today the ordinary shareholders will get nothing of their capital.
  My hon. Friend the Member for Basingstoke (Mr. Denzil Freeth) was abundantly justified, therefore, when he emphasised that what we are talking about is risk capital. That is the term we use. It is risk capital. We on this side of the House at least, for this reason, say that it should be specially rewarded. It is at risk. For that reason, there is a case for saying that in the generality of these trusts, especially the small trusts which may not be able to get the very best possible financial advice, a proportion of the funds should be retained in gilt edged.
  I must also point out that this is not, as has been stated, a rigid fifty-fifty proportion. The hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) suggested that the rigidity had been extended to narrower range investments. That is not right. There is no restriction on narrower range investments, that is, in gilt-edged securities. I emphasise that all that is provided is that not less than 50 per cent. of the funds should be in gilt edged. But there is a provision for the growth of the equity funds, and no attempt is made, as could have been made and would have produced a simpler scheme, for periodical revaluations which would have preserved a strict fifty-fifty balance between the two parts of the funds.
  There is another point I should emphasise in this connection. Besides giving powers to invest in equities, the Bill very considerably liberalises narrower range investments. The outstanding example is company debentures. Thus, the Bill marks a very big step forward, as my hon. Friend the Member for Basingstoke suggested.
  One should also give weight to the consideration urged that we are expressly over-riding here the directions of a settlor. We are justified in doing that for the reasons given by the hon. Member for Gloucester; nevertheless, in deciding whether we shall give unlimited power to invest in equities, we should bear in mind that we are over-riding the wishes of the settlor.
  My right hon. and learned Friend the Member for Chertsey (Sir L. Heald) and

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  a number of other hon. Members, especially my hon. Friend the Member for Dover (Mr. Arbuthnot), asked whether we were right to say that a proportion of a trust fund should be retained in gilt-edged stock. It is a fact, emphasised by my hon. and gallant Friend the Member for Cheltenham, that the Bill will not prevent recourse to the High Court for enlarged investment powers. The court will still retain all its discretion, and we shall make that absolutely plain. There is nothing in the Bill which is intended to bind the discretion of the court if it thinks that there is a proper case for giving investment powers beyond the amplitude given in the Bill.
  Mr. Glenvil Hall: Will the right hon. and learned Gentleman indicate where that provision occurs? This was a matter which was raised in another place. One of the Law Lords there spoke to it, and the right hon. and learned Member for Chertsey (Sir L. Heald) referred to it today. I have not yet had a proper answer to satisfy me or many others that the Bill will not be regarded by the courts as over-riding the 1958 legislation.
  The Solicitor-General: The right hon. Gentleman was not present when I gave an answer on this point, but it is of sufficient importance for me to repeat. The reason why we propose and why we are confident that the discretion of the judges under the 1958 legislation will not be over-ridden is, as stated by my hon. Friend the Economic Secretary, that we propose to move an Amendment to that effect.
  Mr. Glenvil Hall: I apologise.
  The Solicitor-General: My noble and learned Friend the Lord Chancellor said, and I repeat the quotation:
  " I will give an undertaking that before the Bill passes to another place I will consult the Judges of the Chancery Division about this matter."—[OFFICIAL REPORT, House of Lords, 20th December, 1960; Vol. 227, c. 952.]
  He was there referring to this matter. I said earlier that that undertaking has been implemented, and it is in view of that that we will move an appropriate Amendment.
  Mr. Glenvil Hall: I am much obliged to the right hon. and learned Gentleman.
  The Solicitor-General: In this connection, my right hon. and learned Friend the Member for Chertsey referred to an order of one learned judge which was conditional, which I take to mean terminable, on the coming into force of the Bill. It was purely a matter for the learned judge what powers of enlarged investment he gave, but it is certain that he gave them in the light of the proposals in the White Paper which the Bill implements.
  My hon. Friend the Member for Hendon, South raised three important topics. First, he proposed a scheme whereby unlimited powers would be given to trustees to invest, provided that the trustees could obtain agreement among the beneficiaries. Considering the conflict of interests between a life tenant and the ultimate beneficiary, it seems too optimistic to expect to get that agreement. Their interests must often be in direct conflict, and if that were the provision, we would be inviting incessant recourse to the courts.
  Secondly, he and my hon. Friend the Member for Belfast, North (Mr. Stratton Mills) raised a very important matter, that of whether the Bill was a sop to inflation. It is not intended to be. It is not a confession of weakness in the face of a threat of inflation. Even if there is no inflation—as we all trust will obtain—there is still a case in these days for allowing trustee investment in equities. One would expect, quite apart from inflation, that equities would show some growth in an expanding economy. It is not fair, therefore, to attack the Bill as a sop to inflation.
  The third point which the hon. Baronet made was to ask whether we had considered the effect on the gilt-edged market. Of course we have. As my hon. Friend the Economic Secretary pointed out, although this was naturally a matter of which any Government would be bound to take account, it was not allowed to militate against consideration of the welfare of trust beneficiaries. In particular, it was not any consideration of the effect on the gilt-edged market which led to the decision that part of a trust fund ought to be retained in gilt-edged. That decision was made on its merits.
  I return to what is fundamental to the scheme—the stipulation that 50 per cent. of the fund should be retained in gilt-edged. Everything beyond that is

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  machinery, even including the division into two parts. But that stipulation is a fundamental decision which was justified for the reasons which I have given. There are several ways in which such a scheme can be worked out. Each has its attendant advantages and disadvantages, and we are by no means hidebound to the machinery set out in the Bill. My hon. Friend and I will give full weight to the criticisms, particularly of Clause 3.
  Major Hicks Beach: Do I understand my right hon. and learned Friend to mean that the Government are not prepared to consider the 50 per cent. rule on general principles?
  The Solicitor-General: I said that the decision to retain half of a trust fund in gilt-edged is fundamental. That was a provision of the White Paper, but the rest, including the division into two parts, is all machinery, and we will consider that.
  We have been very willing to listen to the views of hon. Members, whom I recognise as lay and professional advisers in this matter, and we are prepared to have great authority to speak in this matter, and we are prepared to consider their experience of this problem. We shall give full weight to their views and consider them with completely open minds before the Committee stage. However, the general tenor of the criticism —and I acknowledge its weight—has been that the method we have chosen, although having the advantage of flexibility, as my hon. and learned Friend the Member for Darwen acknowledged, results in a disproportionate loss of simplicity and lucidity.
  I should make it clear, however, that once it is accepted that a given proportion of trust funds should be retained in gilt edged, certain consequences inevitably follow. The first is that unless the trust fund is divided into two parts at the outset, one is faced with the difficulty of avoiding a revaluation whenever one is operating near the equity limit. I do not think that that is insuperable, but it is a difficulty that one faces right away. Secondly, and this is far more serious for those who want to use equities as a sort of hedge against inflation, one tends to narrow the scope for further equity investment
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  as the existing holdings of equities appreciate. The great advantage of the Bill scheme is that one does not narrow one's scope for further equity investment as the existing holdings of equities appreciate.
  Apart from the division of the fund, once one has taken the decision that a proportion of the fund should be retained in gilt edged, it seems to me that one is bound to provide for accruals and withdrawals. Unless one does so, one will allow a great steamroller to be driven through the Bill. All the withdrawals will be made from the gilt-edged side, and all the accruals put into the equity side. In the end, any safeguard that is desired will disappear.
  Mr. Diamond: The Solicitor-General said that this arises only if one makes the first decision to divide. If one does not make the first decision, one has none of these complications.
  The Solicitor-General: It does not arise from the first decision to divide. It arises from the anterior decision to retain part of the fund in equity.
  Mr. Diamond: That is what I mean.
  The Solicitor-General: It follows from that.
  Mr. Diamond: That is right.
  The Solicitor-General: Rules for the withdrawal of property are necessary to maintain the principle of the retention of a proportion of the fund in gilt-edged securities.
  The criticism of Clause 2 has been considerably exaggerated. It is not a difficult Clause either to understand or to operate. In particular, some of the practical criticisms levied, particularly by my right hon. and learned Friend the Member for Chertsey, do not take account of the fact that every trustee, I should have thought, keeps a certain amount of cash on capital account, and will certainly keep a certain amount of cash on capital account on each side in each of his funds. He will obviously keep a sort of running account between the two parts of the fund, cash in one being treated as owing to the other. In other words, a precise equality in withdrawals would be achieved by topping up by the small float of cash that is held in both parts. Any system except a complete at lib, that

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  is to say, a full discretion—which has not appealed to the bulk of the House—involves keeping accounts.
  May I now deal with the point raised by the hon. and learned Member for Kettering, who asked whether trustees should De given power to invest in land? There are two aspects to this. First, the ownership of land involves special problems.
  Mr. Mitchison: I can relieve the right hon. and learned Gentleman's mind on that. I did not ask him. Perhaps I did not make myself clear. Where we already have what are called special powers in the Bill—and the powers are given in the Bill—we were told by the Economic Secretary that some combined way of using them was buried in the middle of Clause 3. I am afraid that I have been unable to disinter it. I asked for the right hon. and learned Gentleman's expert assistance as one of the grave diggers.
  The Solicitor-General: I am coming to Clause 3.
  It is sufficient at this stage to say that land is treated as a wider range investment. As the hon. and learned Gentleman was not directing his observations particularly to land, perhaps we could leave any discussions on that to the Committee stage.
  Mr. Mitchison: Not Clause 3, I hope.
  The Solicitor-General: No, simply treating land as a special case. I am prepared to deal with it, but I do not think that it has raised any question this evening, so I pass from it.
  A number of minor points were raised. Perhaps I might deal with some of them and postpone consideration of the others to the Committee stage. The hon and learned Member for Edge Hill referred to a point under Clause 1 (3). If I understood him correctly, it was that the testator or settlor might express an intention to limit investment powers to a narrower scope than is permitted by the Bill at some time between the introduction of the Bill and its passage into law. I understood him to argue that in that case it seemed rather hard to say that his decision should be overridden by the Bill. That is an arguable point. Perhaps we could consider it in Committee, but, for the generality of cases,
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  undoubtedly the date of passage into law ought to be the operative date when one is considering whether one should override an intention expressed by a testator or settlor.
  My hon. Friend the Member for Basingstoke, my hon. Friend the Member for Cardiff, North (Mr. Box), and my hon. and learned Friend the Member for Warwick and Leamington (Mr. Hobson) raised a question on Clause 5. I think that it has been universally accepted in this debate that it is reasonable that the trustee should be bound to seek advice, but not to accept the advice that is tendered to him. We must leave the responsibility to him. Reference was made to the definition of the person qualified to give advice. I will consider the points that were made before we come to the Committee stage, and perhaps we can take this question up again then. The same might be done with regard to the requirements for investment in companies. This was referred to by my hon. Friend the Member for Basingstoke, and by my hon. Friend the Member for Weston-Super-Mare (Mr. Webster).
  As regards the question canvassed between my hon. Friend the Member for Cardiff, North and my hon. and learned Friend the Member for Warwick and Leamington, the Bill is not designed to deal with funds in court. I put it in that way advisedly, because there might be some question whether, now that our attention has been drawn to it, they might not be caught by Clause 6. It seems a remote chance, but I would like to consider it further and to leave that point in reserve. I am, however, grateful for having had our attention drawn to it.
  We now come to Clause 3, which I recognise has had no friends at all today. This Clause deals with the relation between special investment powers which may be given by the trust instrument and the Bill powers. As for its alleged complication and incomprehensibility, I feel that they have been somewhat exaggerated. In answer to the invitation of the hon. and learned Member for Kettering, I am prepared to explain my understanding of the way in which it works. On the other hand, in view of what I am going to say the House may feel that this explanation

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  would be better postponed to the Committee stage. I am in the hands of the House in this matter, and it is my duty to explain how the Clause works if the House wishes me to do so.
  In answer to my hon. and learned Friend the Member for Warwick and Leamington, I would point out that trustees are not bound to use the Clause. They can proceed quite independently of it. They must have recourse to it and observe its machinery only if they wish to use both the powers they have been given and the Bill powers. It is then necessary to ensure that the main intention of the Bill is implemented. In the case put forward by my hon. and learned Friend, if a trustee has sufficiently wide powers of investment under the instrument creating the trust he does not need to have recourse to the Clause.
  Sir H. Lucas-Tooth: Is it not true that a mere power to retain given to a trustee is a special power? As this power is almost invariably used, Clause 3 will almost invariably have to be brought into operation.
  The Solicitor-General: No. It is true that power to retain is a special power, and that it is almost invariably used, but in addition to the power to retain investment powers are given which are wider than those given under the Bill. In that case it is not necessary to invoke the Bill powers and to worry about the Clause.
  Mr. Mitchison: This matter has confused many people. Am I right in supposing that, under subsection (1), a trustee with special powers—let us take as an instance unrestricted powers of investment—can throw the Bill and its contents into the waste paper basket and pay no attention to it? Is it true that he need not get written advice, or make any division, or do anything that he did not do before?
  Secondly, if he has limited powers and desires to accept those conferred by the Bill in substitution, is it true that again he has nothing to do with the Clause and needs only to look at the rest of the Bill? Is it true that the Clause is concerned only with the case of the trustee who wants to supplement his existing special powers by some of the
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  powers given in the Bill? That is the very puzzling position which the Economic Secretary mentioned but did not elucidate.
  The Solicitor-General: That is quite correct. Only when a trustee is using both sets of powers—the Bill powers and the special powers—does the Clause come into operation. My hon. Friend did not feel justified in explaining the workings of the Clause in detail. I have offered to, but I thought that we might first see how things went in the course of the next five minutes.
  Mr. Glenvil Hall: Can the right hon. and learned Gentleman say whether there is a time limit on the use of the Clause? If the first trustees do not use the powers provided by the Clause but another set of trustees who come along some years later wish to do so, can they reopen the matter and use both kinds of power if they are so minded?
  The Solicitor-General: I have lost my copy of the Bill, but I think that I am right in saying that there is a power to postpone decision. whether the Bill powers are used in addition to the special powers or the special powers in addition to the Bill powers. It is when both are used together that the Clause comes into operation.
  Mr. Denzil Freeth: I cannot understand the Clause at all. I agree that if a trustee wishes to retain only his special powers he can throw the Bill out of the window, and if he wishes to renounce his special powers he can accept the Bill in toto, but if I am the trustee of a trust 80 per cent of which is invested in equity shares and which provides, as a special power, that the investment is limited to insurance shares, am I allowed to switch my 80 per cent. investment in insurance shares into a general spread of well diversified equities?
  The Solicitor-General: In the case mentioned by my hon. Friend, the trustee has a special power to invest as to 80 per cent. in insurance shares. If he does not go beyond that he is not invoking the Bill powers. But, if he wants to switch a portion of that 80 per cent. into general equities, then the Bill powers must be relied on—there are no other powers which can be relied on—and then the machinery of Clause 3

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  is invoked. In other words, he may at that time invest up to 50 per cent. in equities—
  Mr. Denzil Freeth: And only up to 50 per cent.?
  The Solicitor-General: Yes, that is so, only up to 50 per cent., subject to a certain power as to the time lag which exists between subsection (4) and subsection (6).
  As I was saying, the first point is that I do not think the Clause is as difficult as it appears at first sight. I feel that trustees, when they get used to working it, will not find it unduly cumbersome. Secondly, and more important, trustees are not bound to invoke it. It is only if they wish to use the special powers and the Bill powers. Thirdly, I should like to cite to the House a passage from the Law Journal of 16th December, 1960, about this Bill. As hon. Members will know, the Law Journal is a paper of the highest repute and very closely in touch with the problems of solicitors and trustees.
  "The point occasionally lost sight of is that the language of enactments is often complex because the Legislature wants to make provision for complex situations. The Clause under review k concerned with three different courses which trustees will be able to pursue: they can continue to act under their special powers, that is. the powers conferred otherwise than by the Bill, and ignore the Bill, or they can act under the Bill and ignore their special powers, or they can combine the two. The real problem, so it seems to us, is whether the intention of the Clause can be more simply phrased within the accepted canons of drafting statutes. It will be interesting to see whether Amendments will be put down showing how better to express principles"—
  and I emphasise this—
  "which, though complex, are generally accepted as reasonable."
  The general problem could, of course, have been avoided by adopting one of the expedients to which my hon. Friend the Economic Secretary referred. We could have required trustees to make a once-for-all election between using special powers of investment or using the Bill powers. Another alternative would be to say that the special powers and the Bill powers could be exercised cumulatively. But, as my hon. Friend said, both of those are really non-starters and nobody today has argued in favour of them.
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  On the other hand, my hon. Friend did mention one method of implementation which would not involve constant revaluations and yet would obviate most of the complications of Clause 3. That would be to control the limitation on investment in equities by the historic cost of the investment instead of on the basis of current valuation. For example, the trustee who put 40 per cent. of his funds into I.C.I. would be able to put another 10 per cent, into equities, despite the fact that the original holding in I.C.I. had appreciated. Of course, it would still be necessary to keep accounts, and one might lose the advantage which we have under the Bill whereby trustees lose nothing by delaying to the most propitious moment the taking up of their full number of equities. But it is obviously an alternative scheme, and I think it will produce very much simpler machinery for implementing this Bill.
  In conclusion, therefore—
  Mr. Mitchison: I am obliged to the right hon. and learned Gentleman, but he has not yet told us the meaning of Clause 3 and a great many of us do not understand it. We understand now that it applies to the case where a trustee wishes to use both special powers and those in the Bill. Will the Solicitor-General be good enough to comply with the one request I made to him and tell us what Clause 3 means in that connection? It is not much use asking us to put down Amendments until we have a better understanding than, at any rate, I have of the meaning of the Clause.
  The Solicitor-General: Of course, I gladly comply if that is what the House wishes. Clause 3 (1) makes it plain that the powers given by the Bill are in addition to and not in derogation of what we have been calling special powers, the powers given by the trust instrument. Clause 3 (2) is merely emphasising one aspect of the foregoing because it is so very important, namely, that
  "nothing… shall prevent a trustee, in the exercise of a special power, from investing property belonging to the narrower-range part of a trust fund in investments other than narrower-range investments or retaining such property so invested."
  In other words, if given special powers to invest in investments he can do so notwithstanding the other provisions of

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  the Bill. Subsection (3) says that if he exercises such a special power and is given
  "special power…to invest property in any investment for the time being authorised by law for the investment of trust property"
  or some such formula, which is a very typical formula, the Bill must have effect on that property. In other words, he then has the duty of splitting the fund and the duty of seeking advice and so on. In subsection (4) we come to the difficult machinery provisions. Subsections (4) and (5) are designed to lead to subsection (6). They deal with two cases. The first is where the trustee makes the investment himself under the special powers given to him by the instrument or retains part of the original trust property which is invested in the special investment. Subsection (5), on the other hand, deals with the case of property which comes to the trustee already invested in the special investment after the division of funds has taken place.
  I go back to subsection (4). Subsection (5) deals with property accruing after division and subsection (4) deals with the case where the trustee either makes the investment himself or retains part of the original trust property. It earmarks how much of the narrower-range part has gone into the wider-range part or outside investments. I take one of the limbs and follow it through. If in the exercise of a special power, a trustee invests property belonging to a trust fund in an investment other than a narrower-range investment—I go to (a)—the investment is allocated to the narrower-range part of the fund on the division of the fund in pursuance of subsection (1) of Clause 2.
  Take the case of a trustee under a special power with power to invest in South African gold shares. On splitting the fund, he allocates that to the narrower-range part of the fund. He has the power to invest the whole of the fund in South African gold shares. He has to split his trust fund, and half of it then goes into the narrower-range part of the fund on the division of the fund. That is paragraph (a). We then come to line 10, which reads:
  "the property shall forthwith be transferred to the wider-range part of the fund…"
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  That leads on to subsection (6), which reads:
  "Where either of the two foregoing subsections has effect,"
  —that is, including that which I read—
  " the trustee shall not have power by virtue of section one (a) to invest property belonging to either part of the fund in wider-range investment… until there has been transferred from the wider-to the narrower-range part of the fund"
  —I am now at line 29—
  "property equal in value to the property "
  previously transferred from the narrower-range to the wider-range part of the fund.
  Mr. A. J. Irvine: Taking that example, will the Solicitor-General explain why it is necessary that the South African gold shares to which he referred should pass through the narrower-range department an their way to the wider-range?
  The Solicitor-General: The answer is that it follows from the splitting of the fund. I hope that I may pursue this, because I have been asked to explain how it will work. I gave the example of South African gold shares, but it might have been the power to retain shares in a family business.
  Under subsection (4, a), we have the gold shares transferred from the narrower to the wider-range part of the fund. Subsection (6) says that notwithstanding Section 1, the trustee cannot invest property belonging to either part of the fund in wider-range investment, in equities, until he has transferred from the wider-range to the narrower-range property equal in value, and when it goes back it must under Clause 2 (2) be put into gilt edged.
  Sir H. Lucas-Tooth rose—
  The Solicitor-General: This is not an easy subject, and it makes it all the more difficult when I am interrupted in the middle of trying to explain it and to give an example. What Clause 3 (6) says, in effect, is that one cannot use the Bill to buy equities—paragraph (a)—or to hold equities—paragraph (b)—until one has compensated the narrower-range part of the fund.
  Sir H. Lucas-Tooth: I think I have followed what my right hon. and learned Friend has said. In effect, it means that if one takes from Peter to add to Paul.

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  one cannot add again to Paul until one has paid back Peter. But the question which I put in my speech earlier was this: when one takes the value for this purpose, is it the value at the original date or is it the value at the last date? It may be five years later and, in the case of gold shares, the property may be worth ten times as much. A very great deal will turn on this.
  The Solicitor-General: I think that it is at the time of the transfer. It is not the historic past. It is at the time of the transfer that one takes the value. There must obviously be a valuation on the division of the fund,
  I am quite prepared to work through the other limb, which I omitted, or, indeed, subsection (5), but I hope that I have given an illustration of the way in which the Clause will work and have shown that it is in fact comprehensive.
  Mr. Hobson: Is not the result of all this that, having made the adjustment, if one operates Clause 3 one simply finds oneself in the long run, after a great deal of complicated mathematics and machinery, in exactly the same position as one would be simply by operating the powers of the Bill?
  Major Hicks Beach: How does my right hon. and learned Friend expect an ordinary lay trustee, operating a small trust, to interpret the provisions of the Bill when he, with his great legal knowledge and lucidity, has taken forty minutes to explain it to the House—and I still do not understand it?
  The Solicitor-General: The trustee will be allowed a little serious, quiet study and, although I make no complaint about it, I have not had that advantage.
  I think I made it perfectly plain that we are conscious of the weight of criticism which has been levied against Clause 3. My hon. Friend and I are very willing to consider what, I confess, was the universal hostility it has met today and give due weight to it. With that concession, I submit the Bill to the House as a very considerable liberalising Measure.
  Mr. Mitchison: I do not wish to ask a question but to make a request. We shall have a Committee on this Bill and we need not go any further than the right hon. Gentleman has gone today. We shall study his remarks with great attention, but would it be possible to circularise, among the members of the Committee at any rate, a rather fuller statement of what Clause 3 means?
  The Solicitor-General: My hon. Friend and I will certainly consider that.
  It has been generally recognised today that this is a very considerable liberalising Measure. Its fundamental principle of limitation on the proportion of the fund which can be invested in equities is, of course, basic to the Bill. It is justified by the powerful reasons which I ventured to lay before the House. Such an opportunity to invest in equities does represent an enormous advance in enlarging the investment discretion of trustees. Beyond that, as I admitted, all is machinery.
  As my hon. Friend and I have, I hope, made clear, we are very willing to consider alternative methods of implementing the principle of the Bill. We are very grateful for the suggestions and comments that have been made. I am certain I have sensed the temper of the debate when I say that there is a general and, indeed, a universal feeling that we should sacrifice some flexibility, if necessary, in order to achieve greater simplicity and lucidity. Hon. Members will appreciate that at this stage I cannot give a more specific undertaking, but I can assure the House that my hon. Friend and I will bear this very much in mind. We will consider carefully what has been said today and, if necessary, come forward with alternative machinery proposals for the consideration of the Committee.
  It will be in that spirit that my hon. Friend and I will approach the Committee stage. Therefore, I commend the Bill to the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills.)

  PLANNING APPEAL, UPTON GREY (MRS. BAGLEY)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. F. Pearson.]
  8.53 p.m.
  Mr. Denzil Freeth: I beg to raise on the Adjournment tonight a personal problem of one of my constituents. I do not think it will take up the whole of the time until 10.30 p.m., so if any other Members wish to raise subjects on the Motion they will have time to do so.
  Even though the subject which I am about to raise is of primary importance to only one person in these islands I do not think I need apologise on that account. This is the question of a planning appeal to my right hon. Friend the Minister of Housing and Local Government on an application made to erect in the grounds of Mrs. Bagley's House, "Embers", at Upton Grey, near Basingstoke, a small cottage or bungalow.
  Mrs. Bagley is a widow whose husband was killed in the war. In the last fourteen years she has lived in the village of Upton Grey where her mother is buried. She wishes to remain in the village but she finds that her house has too much ground. It has something between one-sixth and one-third of an acre. She also finds that it is too lonely, since the nearest dwelling is some 500 ft. away.
  Therefore, as the grounds are too large for her to tend herself, as labour is dear and scarce, and as she wants somebody living more closely, she decided that it would be a good thing for all concerned if she erected a bungalow or cottage in part of her own grounds. The site would be 66 ft. by 106 ft.
  "Embers" is at the western end of one of the prettiest villages in Hampshire. It is even pretty for the constituency which I have the honour to represent. Basically, the village runs down a long and twisty hill. The site the House is considering tonight lies at the western or top end of that hill before the curly descent to the pond at the cross roads at the bottom of the hill is reached. Therefore, I agree at the outset that we are dealing with a development on the outskirts of a village.
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  The road from Basingstoke via Tunworth passes by "Embers", which is an attractive house almost entirely hidden behind a hedge when approaching by the road from the west and almost completely hidden when approaching up the hill from the village. The plot of ground upon which development was proposed by my constituent does not lie direct on the road, but slightly to the north-west of the house fronting on to a bridle track which leaves the road at right angles.
  Anyone coming from Basingstoke towards the site would be heading straight for the part of the ground upon which development was proposed. Therefore, it might be thought that to somebody coming from the west there would be an ugly building where at present there is country. However, the thick hedgerows and the range of trees providentially planted by our ancestors would make a building on the proposed site virtually invisible in all but midwinter.
  The road from Basingstoke heads towards these trees, but it then bends right past the front door of "Embers". It is not proposed that development within the grounds of "Embers" would necessitate an extra entrance on to the road. There might well be a gate on to the bridle path. Vehicles would use the present drive of Mrs. Bagley's own house, so there would not be a dangerous exit, or even an extra exit, on to the road.
  Mrs. Bagley submitted her application for planning approval in the usual way. It was refused by the local planning authority upon three main grounds—first, that the proposed development would constitute an unwarranted extension of the village of Upton Grey; secondly, that it would create a precedent which would make it difficult to resist proposals for ribbon development all along the road; and, thirdly, that it would be detrimental to the visual amenities of the area and particularly in respect of the approach to the village from the direction of Tunworth. My hon. Friend the Parliamentary Secretary has the unenviable job of defending his right hon. Friend's indefensible decision tonight, and I am grateful to him for coming to the House.
  In the inspector's report which my hon. Friend was kind enough to send me, there is a fairly full history of the

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  proposed development. It states that the property of "Embers" stands on elevated ground at the extreme western end of the village at the junction of the bridle road with the northern side of the the approach road from Upton Grey to Tunworth. It says that the property is about 500 ft. west of the nearest residential neighbour, and that further west farmlands extend on towards Basingstoke. It also gives Mrs. Bagley's reasons for wishing to build upon the site, and it mentions the fact that the appeal was determined on written representations on both sides.
  There are one or two of the difficulties that we can cut out at once. First, water and electricity are available. There are many parts of the country where those supplies are not available, and where people seeking houses would give their eyes to have either piped water or electricity laid on. Indeed, it is only recently that I have been in correspondence with my hon. Friend about difficulties over water and sewerage in another part of the constituency. Here we have a site where both water and electricity are readily available.
  Secondly, the proposed design of the bungalow or cottage takes account of materials and lines which would enable it to he in complete keeping with the raw materials and architectural lines of "Embers" itself. Mrs. Bagley has expressed in writing her willingness to do anything to try to make the proposed building fit better into the countryside.
  No objection has been raised on drainage grounds—and, heaven knows, at the present time there are parts of my constituency where people are suffering severe difficulties with flooded and overflowing cesspools and septic tanks. Those people would give a great deal to have property where the drainage was as well organised as it is on this site. The two dwellings would use the same vehicular access, and it has not been suggested that the site is too small to accommodate the two dwellings.
  The report of the local area planning committee says, first of all, that this would be ribbon development; secondly, that it would create a precedent for more ribbon development and, thirdly, that it would be detrimental to the visual amenities of the area and would
  "…in particular, detract from the pleasant approach to Upton Grey from Tunworth."
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  I should like to emphasise that at all times Mrs. Bagley has been at particular pains to point out that she would be willing to take almost any trouble in order to preserve the rural character and beauty of Upton Grey, and also to preserve the pleasant rural approach to the village from the west. Mrs. Bagley does not consider that the proposed development would offend any planning principle or in any way harm any local amenity.
  Let us first of all take the question of ribbon development. Ribbon development is development in a line along the road. Here we do not have ribbon development but consolidation, because the proposed property would not front on to the road; it would be at the side of "Embers" on the bridle-path leading towards the north. We shall there have filling in, or consolidation, which is surely a good thing. It is surely good that there should be in a village where there are some houses a few that are closer together. I believe that it is good on planning grounds that they do not then spread out into the countryside ruining sight lines and defacing the general beauty. I believe that it is good on social grounds that people should have neighbours to whom they can turn and who live nearby. When one finds this particular situation on land which at present is going to seed because Mrs. Bagley cannot afford to have somebody to work it and cannot work it herself, the social and planning needs of the community would suggest that the erection of a pleasant building on the site would not be detrimental to the amenities of the village of Upton Grey.
  It has been put to the Minister, I think, that this is a village of large houses. I do not think that this is true, although the further up the hill one goes the larger are the houses. But some of these large houses in fairly extensive grounds have cottages belonging to them, necessary, no doubt, if the work of the countryside is to go on. Why it should be accepted that cottages for some of these houses are right and proper in the village whereas it is wrong for there to be another cottage by Mrs. Bagley's residence is something which I find hard to accept.
  It is suggested by Mrs. Bagley that the proposed development would not be visible from any existing development in

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  the village. Having visited the site myself and having been over it, I say that, to the best of my knowledge and belief, that statement is correct. It would be visible only from the west, and from there barely at all except as a grey shape through the trees in the autumn and winter visible by somebody approaching along the road from the west. In the main, if there were a position from which this particular site could be seen and from which somebody might view the proposed cottage, this would be from the farm lands. That is something which could easily be dealt with by the planting of trees.
  It has been suggested that this is ribbon development and outward expansion of the village. I hope I have answered that. I am sure that, if my hon. Friend looks at the plan again which I see he has so thoughtfully brought with him, he will agree that I am right. Secondly, the suggestion that a building here would act as a precedent for further ribbon development out to the west is, surely, completely untrue. First and foremost, this proposed cottage would be built within the garden and close to an existing house. It would not take the extension of the village any further along the road and it would not itself even stand on the road. It cannot, therefore, be argued that there would be a precedent for ribbon development.
  The inspector himself comes down on Mrs. Bagley's side about this. He has been to the site, which I do not think my hon. Friend has, and which I am quite certain my right hon. Friend in whose name my hon. Friend speaks tonight has not done. His inspector from the Ministry did go, and his view of the matter accords exactly with mine. In paragraph 19 of his report, dated 10th October, he said:
  "I thought it was taking the matter, academically, to a rather fine point to suggest that the development of that part of the curtilage of Embers' furthermost from the village would be an outward extension to the village".
  Secondly, on the question of whether, in the future, a building here on the proposed site would make the prevention of ribbon development more difficult, the inspector in paragraph 20 of his report said:
  "Admittedly, there were orchard and other lands, in other ownership, to the east of
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  'Embers', with frontages directly on to the road. But I found it difficult to accept the view that approval of the proposed development at Embers ' would make it difficult to resist proposals elsewhere. Applications had to be considered on merit and approval here could not, in my view, influence considerations elsewhere one way or the other. Moreover, as the actual appeal site did not have frontage directly on to the road, but on the bridle road, it was, I felt, difficult to uphold refusal on the ground that it would be similar to ribbon development along the road."
  The inspector then deals with the question of the visual amenities and whether the erection of a well-planned building would destroy the beauty of the approach from the west by road or the beauty as seen from neighbouring countryside. He says in paragraph 21:
  "From one viewpoint only would the proposed dwelling really be noticeable. That was from the west—from the adjoining farmlands, and from the approach road to the village from the direction of Tunworth where it would stand on elevated ground on the northern side of the road, where there was a curve in the road on an uphill gradient. From that viewpoint the upper part and roof of Embers' were visible. The building "—
  that is, the building of the existing house—
  "of pleasing external appearance, stood against the background of mature trees, with hedges in the foreground and some trees in the garden. There were mature trees along the southern side of the road."
  The inspector's conclusion in the following paragraph is:
  "' Embers' did not harm visual amenities The second dwelling to be built at its side, with external appearance in keeping, would not, in my opinion, be harmful to the visual amenities at the approach to Upton Grey from the direction of Tunworth."
  The inspector, who had seen the site, therefore recommended to the Minister, who had not seen it, that the appeal should be allowed. Having waited, apparently, from 10th October, the date of the inspector's report, to 1st December, when a letter was written on his behalf to my constituent's agent, the Minister in one short paragraph sees fit to throw on one side the evidence of his own inspector who has considered the matter on the spot.
  The Minister thinks—and here I quote from the letter signed on his behalf—
  "that the development would constitute an outward extension of the village and indeed an incipient 'ribbon ' of development—."
  A large part of the inspector's report was taken up with showing that that was

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  exactly what would not happen. The Minister's representative continues that the Minister
  "thinks that the inspector gave insufficient weight to the argument that it would be a bad precedent even though there might not be similar cases in the immediate neighbourhood of the site."
  Anyone who has seen the site or who has looked at the plan cannot but agree that this one house, tucked away down the bridle-path, could not possibly be regarded as the outward ribbon of development of the village of Tunworth.
  I think that the Minister, in overruling his inspector's recommendation, has been guilty of a major error of judgment. It is an administrative act and I think that he has judged and acted rightly. I do not suggest that in all cases Ministers of Housing and Local Government should automatically obey arid agree with the recommendations of their inspectors, but I suggest that when an inspector, on an isolated site in a case in which no great questions of policy are involved, suggests that a planning appeal should be allowed, where there is sewerage, although I admit a septic tank, water and electricity and a will to build, and where there is a community into which the new dwelling and its inhabitants would naturally fit, the Minister should take very great care before throwing overboard the considered opinion of someone who has interviewed the person who proposes to develop and has seen the site.
  The question is, where does my constituent go from here? It may be that my hon. Friend the Parliamentary Secretary will argue that the Minister, having given his decision, has no right to alter it. The damned are damned even though they are proved to be innocent later and the Minister has announced ex cathedra and for this round of the argument that he can do nothing.
  What I should like my hon. Friend to do is to say that if my constituent puts in a fresh planning appeal, he will look again with great care at the stupid and synthetic arguments that were adduced by the Minister in his letter and that. should my constituent once again go through the tedious and expensive process of having to submit plans to the area authority, perhaps having them rejected. having to resubmit and to appeal to the Minister, my hon. Friend will give an
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  assurance in the name of his right hon. Friend the Minister that the matter would be looked at afresh but bearing in mind the debate we have had tonight.
  9.16 p.m.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Sir Keith Joseph): My hon. Friend the Member for Basingstoke (Mr. Denzil Freeth) has said that this case effects only one person. That may be true, but it is none the less important for that. It is a sad thing that somebody like Mrs. Bagley, who is obviously extremely attached to the village of Upton Grey, who has lived there for fourteen years of her life, who is now living there again and who is a widow, should not be able to do what she likes in her own garden. This is very sad, but I hope to be able to defend it and to show that, intolerable though these limitations on private rights are, they are justified because they secure the rights of others.
  I congratulate my hon. Friend and Mrs. Bagley on the extremely vigorous way in which he has put her case. I am sure that it could not have been more strongly put. I should like to make it plain that, although I shall have to say a number of apparently arid and negative things, it is not because I do not realise how extraordinarily irritating, and worse, it must be for Mrs. Bagley to be in this position.
  The fact is that when I said that the limitations on the rights of each private citizen exist only for the protection of other private citizens, I was speaking about the citizens of the future. We who have to administer the planning laws passed by Parliament and who have to appear sometimes draconic in our decisions—and somebody has to take those decisions—are acting as the custodians of our inheritance for generations to come. We are, as it were, the ancestors of our descendants and what we do is to protect what they may bless or curse us for.
  To come from the general to the particular, Mrs. Bagley knows very well the village of Upton Grey. She has spent a large part of her life there. When she bought the house "Embers", she knew, or should have known, perfectly well, or must be assumed to have known, that it was a relatively isolated house and that she might well be lonely in it.

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  My hon. Friend did not mention this, and I may be wrong, but I gather from the papers and the dates that Mrs. Bagley's first application for planning permission to build the development which we are discussing tonight was put in to the local planning authority before she actually bought the house. If that is so, it cannot be said that she had any misconception. She knew when buying the house that she would be in a relatively isolated position. I believe, although I may be wrong—I am not pinning anything on this—that she had had a refusal for the planning permission before she actually concluded the purchase. What I do not know is whether she was morally committed to purchase at that stage. In any event, nothing depends upon that. All I am saying is that Mrs. Bagley was not a stranger to the village. She could not have had any surprise about the nature of the house.
  The fact is that after buying the house, Mrs. Bagley again sought planning permission. Again, she was refused. Here we come to the first appeal, which, as my hon. Friend said, at her request was conducted by written representation. That appeal was dismissed.
  A couple of months later she sought, once more, planning permission. I think that on this occasion she moved the site of her proposed house a little way, but she received a third refusal. This was the occasion when she made her second appeal and, quite rightly, as she was entitled to do, asked that it should be conducted by means of an inquiry. My right hon. Friend then sent an inspector down. An inquiry was held and, as my hon. Friend has stressed with quiet under-emphasis, the inspector recommended "Yes" and my right hon. Friend decided "No".
  My hon. Friend made no bones about this. He said, rightly, that he does not object in principle to my right hon. Friend coming to a different conclusion from his inspector's recommendation, and I congratulate him on his perspicacity. My right hon. Friend is responsible for making these decisions and is responsible to the House. His inspector is an adviser and makes recommendations, but the decisions must be the Minister's. In about 5 per cent. of the cases in each of the years 1958 and 1959 my right
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  hon. Friend came to a decision opposite to the recommendation made by the inspector.
  In this case, the inspector recorded his views and recommendations and, of course, I saw the papers. My hon. Friend commented that it took six weeks for a decision to arrive. I hope he realises that we are dealing with something in the nature of 10,000 appeals a year. A great deal of study has to be given to the recommendations and decisions. When there is a case that has many sympathetic elements about it, as this has, we do not hurry over a decision which means so much to an individual.
  I saw the papers, studied them carefully, and came to the conclusion that I was bound to advise my right hon. Friend that, in my view, the inspector had given insufficient weight to two aspects which, in combination, seemed to me, and to my right hon. Friend when I advised him, extremely strong. I will try now to explain which are the elements to which I believe the inspector gave insufficient weight.
  The first is that he underestimated the positive fact that this development on the outskirts of a village, as my hon. Friend said, would spread the village to some extent. It is a far cry from that to say that it would be the beginning of ribbon development, but if one allows individual items to grow on the outskirts of a village they add up to ribbon development.
  One of the objects of the planning laws passed by this House is to keep as clear a distinction as possible between town and country, to maintain town as town, and country as country. One of the principle objects of the House is to keep development as compact as may be and to avoid straggle—the sort of random development all over the country which took place in the past and which we now so much deplore. If we are to achieve this object we have to back up local planning authorities in setting a limit on villages and individual communities.
  We back them up only when those same planning authorities provide other villages and communities where they allow development. We make sure that there is enough accommodation on the land for our increasing and increasingly prosperous population to find homes,

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  while on the other hand trying to keep the major planning objects.
  The house which this lady bought is already on the westerly edge of the village, which is, by common agreement, an extremely pretty one, and which, I believe, is an unusually unspoilt one. Not only is it on the westerly edge but it is also 500 ft. from its eastern neighbour. This is not, therefore, a case of a solid packed village, with "Embers" on one extreme wing. The village has already begun to straggle when we get to "Embers". In fact, further development would increase that straggle. I do not see how there can be any two opinions about that.
  My hon. Friend tried to maintain, I thought almost disingenuously, that if one builds one house next to another, that is consolidation. But he made it plain that "Embers" is on the outskirts of the village and he also made it plain that "Embers" has a gap of 500 ft. from its nearest neighbour. To my mind, when one builds on the outside edge of an outside edge, that is not consolidation but straggle. Of course it would have been a different matter if a gap were being filled in, but this is a clear case of expansion.
  Mr. Denzil Freeth: Do I gather that if this house were not in fact on the north-westerly side of Mrs. Bagley's house, but on the easterly side, it would then be regarded as consolidation? Will my hon. Friend look at the map again, because the natural end of the village is the bridle-path going north? I fully accept with him that there would be no earthly case for building a house to the west of that bridle-path, but on the east of the bridle-path is Mrs. Bagley's own garden, where she could presumably erect a farm building of modest dimensions without planning permission. To suggest that that is straggling and ribbon development is going a little far.
  Sir K. Joseph: As my hon. Friend knows. I cannot possibly answer a hypothetical case about what the local planning authority might say about a different planning proposal from Mrs. Bagley. I hope that nothing I have said tonight will give him a wrong impression about that. It may be that people can do certain things in their
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  gardens which do not count as development, but that is not what we are discussing this evening.
  I want to meet the strongest part of the case made against me. It is said that if the development were allowed it would be hidden. It is said that trees exist or would be planted so that for half the year at least nobody would see the new development, and that, whether there are trees or not, the proposed house could be seen only from the western approach. The fact is that here we are getting a little mystical. Is it to be said that the countryside can be invaded with houses and that that invasion shall not count as development if every house is to be surrounded by trees? It is as much physical development of the countryside even if it is totally invisible. But my hon. Friend made it plain that for half the year, namely. during autumn and winter, the house would be visible as what he called "a grey mass through the trees from the west. That is one of the approaches which I understand to be particularly cherished in the neighbourhood.
  Mr. Denzil Freeth: If we were talking about building a new house on a site where no building stood, I would have enormous sympathy with my hon. Friend, but we are talking about building another house by the side of one already there. There is no question of having the most heavenly view blocked by building. The view is virtually blocked by a building anyway when the trees are not in bloom.
  Sir K. Joseph: It is neither here nor there that the house happens to be in the garden of another house. In a number of years Mrs. Bagley might decide to sell the house in her garden and there would then be two owners. We have to look to the long distant future and houses are very permanent objects.
  It is true that one house of itself makes very little difference, but how can we possibly set a limit to a village or community if every time we set that limit it is argued that one more house will not make any difference? I am not maintaining that my right hon. Friend has a cast-iron rule that the limit of a village is the limit whatever happens. There must be cases 'in which a combination of circumstances makes us or the

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  local planning authority break what is normally our practice, but in this situation there is not a strong enough combination of circumstances to bring the case outside normal planning criteria.
  The fact that my right hon. Friend dismissed Mrs. Bagley's first appeal was not conclusive either. Had it been possible for my right hon. Friend to be convinced either that the facts had changed, or that new arguments had been put forward, or that his first decision was wrong, I assure my hon. Friend that my right hon. Friend would have had no hesitation in changing his mind.
  We are not dealing with a case of consistency for the sake of consistency. I hope, therefore, that I have shown why my right hon. Friend and I feel strongly that the inspector, with the very best of motives obviously, came, legitimately, to a decision which to our minds underestimated the physical extension of the village that would be caused by this development.
  The second underestimate which we thought he made was that he underestimated the insidious danger of precedent. Precedent is not alone a strong argument, but on the merits of the case against development there is a strong reason for being firm-minded particularly if a decision the other way would lead to damage in the future. My hon. Friend knows the pressure that is brought on my right hon. Friend by people seeking development. They use every precedent that goes their way to persuade him that they are entitled to the decision.
  We have to face the fact that precedent is a very powerful weapon. If we give way out of sympathy and against the interests of future generations, we injure our descendants. I realise that all these long phrases sound pompous when dealing with a small house in a garden, but my hon Friend did not hesitate to use equally large words in claiming that the
  464
  house should be allowed. If we allow one bad decision we are being unfair to all the other people whose equally strong or equally weak applications have legitimately been turned down.
  The inspector says, in a phrase which my hon. Friend quoted most effectively, that treating one extra house as an extension of the village may be academically a rather fine point. I strengthen his phrase by saying, "particularly with trees around it, particularly in a garden, particularly when it has no access to 'the road", but whatever the inspector may have recommended, the fact remains that that extra house is development. It is an extension. The village would have grown, and it would have grown beyond its outskirts. It would have lost some element of compactness. 'It would have become even more of a straggle.
  For those reasons I feel no shame at all in having recommended my right hon. Friend to come to a decision different from that recommended by his inspector.
  I come back now to the human side of this. Sympathetic as I am towards Mrs. Bagley, I must repeat that she bought this house evidently with her eyes open, though, as I say, even if she had not, it would not be proper to take that into account in coming to a decision. Limitations on the rights of an individual citizen are justified to preserve the inheritance—particularly in a lovely village like this—of our descendants.
  I hope that my hon. Friend will be able to reconcile Mrs. Bagley to the decision which, I am afraid, unless the facts changed very remarkably, would only be likely to be repeated if any further appeal came to my right hon. Friend.
  Question put and agreed to.
  Adjourned accordingly at twenty-six minutes to Ten o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Agricultural Apprenticeships
  Agricultural Apprenticeships
  Grand National (Russian Horses)
  Grand National (Russian Horses)
  Royal Commission on Common Land (Report)
  Royal Commission on Common Land (Report)
TRADE AND COMMERCE
  Guatemala
  Guatemala
  Advance Factory, Jarrow
  Advance Factory, Jarrow
  North-East (Minister's Visit)
  North-East (Minister's Visit)
NATIONAL FINANCE
  Scottish Universities
  Scottish Universities
  Greyhound Racing and Bookmakers' Licence Duty
  Greyhound Racing and Bookmakers' Licence Duty
  Schedule A (Maintenance Relief)
  Schedule A (Maintenance Relief)
  £ Sterling (Value)
  £ Sterling (Value)
  Mr. A. Sowinger
  Mr. A. Sowinger
  Bank Rate
  Bank Rate
  Surtax
  Surtax
  National Theatre
  National Theatre
  Housekeeper Allowance
  Housekeeper Allowance
  COMMONWEALTH AND FOREIGN COUNTRIES (ASSISTANCE)
  COMMONWEALTH AND FOREIGN COUNTRIES (ASSISTANCE)
  GENERAL SERVICE MEDALS (ARABIAN PENINSULA OPERATIONS)
  GENERAL SERVICE MEDALS (ARABIAN PENINSULA OPERATIONS)
  BRITISH TRADE FAIR, MOSCOW
  BRITISH TRADE FAIR, MOSCOW
HOME DEPARTMENT
  Driving Offences (Drunkenness)
  Driving Offences (Drunkenness)
  Homicide Act, 1957
  Homicide Act, 1957
  Air-raid Shelters
  Air-raid Shelters
  Welfare Officer Service
  Welfare Officer Service
  Foreigners (Immigration Formalities)
  Foreigners (Immigration Formalities)
  Cyprus Immigrants
  Cyprus Immigrants
  Timothy John Evans
  Timothy John Evans
  Administration of Justice Act, 1956
  Administration of Justice Act, 1956
  Felonious Homicides
  Felonious Homicides
  Merchant Shipping Act, 1958
  Merchant Shipping Act, 1958
  South Africa House (Students' Demonstration)
  South Africa House (Students' Demonstration)
SOUTHERN RHODESIA
  Vagrancy Act (Arrests)
  Vagrancy Act (Arrests)
INDIA AND PAKISTAN
  India Office Library
  India Office Library
UNION OF SOUTH AFRICA
  Sharpeville Shooting (Report)
  Sharpeville Shooting (Report)
COMMONWEALTH RELATIONS
  Commonwealth Arts Festival
  Commonwealth Arts Festival
CYPRUS
  Turkish Community (Payments)
  Turkish Community (Payments)
EDUCATION
  Albemarle Report
  Albemarle Report
  Day Releases
  Day Releases
  St. Illtyd's College, Cardiff
  St. Illtyd's College, Cardiff
  Students (Grants)
  Students (Grants)
SCIENTIFIC AND INDUSTRIAL RESEARCH
  Research and Development (Management and Control)
  Research and Development (Management and Control)
  CONGO (FAMINE RELIEF)
  CONGO (FAMINE RELIEF)
  N.A.T.O. (NUCLEAR WEAPONS)
  N.A.T.O. (NUCLEAR WEAPONS)
  LEGAL AID
  LEGAL AID
ADEN
  Ministerial System
  Ministerial System

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Sheffield

SICKNESS RELIEF FOR SUB-POSTMASTERS
3.6 p.m.
BARONESS WOOTTON OF ABINGER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what arrangements are made for relief in case of sickness for postmasters and postmistresses working single-handed in charge of small offices; and upon whom the cost of such arrangements falls.]
LORD ST. OSWALD: My Lords, the noble Lady's Question refers to postmasters and postmistresses working single-handed in charge of small post offices. By the description of the work I think she must be referring to sub-postmasters and sub-postmistresses who are employed on an agency basis and who are not obliged to attend to the work personally, being free to employ others if they so wish. It accordingly rests with the sub-postmaster who falls ill to continue to make arrangements for the staffing in his office. If he cannot do this, the head postmaster usually provides a substitute to keep the office open, either full-time or part-time. In these circumstances the sub-postmaster would be required to meet the cost within the limit of his remuneration, but here again special consideration is given to cases where hardship would arise.
BARONESS WOOTTON OF ABINGER: My Lords, I thank the noble Lord for his Answer. Is he satisfied that this is a proper condition of employment of persons who are, after all, Government servants, even if on an agency basis? Would he approve of the application of the same principle at higher levels in the Post Office?
LORD ST. OSWALD: My Lords, at higher levels of the Post Office they are civil servants. As I pointed out, they are not civil servants in the case of sub-postmasters and sub-postmistresses. And sub-post offices are not in fact intended to provide an independent livelihood. The majority are carried on in conjunction with another occupation, usually that of shopkeeper.
BARONESS WOOTTON OF ABINGER: My Lords, is the noble Lord satisfied about the minority which are not so carried on and which are a main livelihood, where there is no secondary occupation?
LORD ST. OSWALD: My Lords, in all cases of hardship special arrangements are made.
LORD SHEPHERD: My Lords, am I to understand that if a sub-postmaster or sub-postmistress were to fall ill and it were necessary to employ somebody to carry out the task, those officers would therefore be without any form of income, since the cost of the substitute would have to be borne by the sub-postmaster or sub-postmistress? Surely this is quite different from the way we treat any other employee throughout this country.
LORD ST. OSWALD: My Lords, two points arise there. First of all, I have pointed out that sub-postmasters and sub-postmistresses are not direct employees: they take on the job on an agency basis. Secondly, I have also made the point that in cases of hardship special arrangements would be made in order to avoid that hardship. In point of fact, I think that the noble Lady is referring to the special case in her own sub-post office at Abinger Common, where the sub-postmistress fell ill on December 28 and an officer of the Department was sent to take over her duties on December 29. On January 3 the sub-postmistress informed the head postmaster that because of her illness her last day of service should be regarded as December 31, and this was accepted. The sub-postmistress has not been charged for the loan of departmental staff for these few days and no cost has fallen upon her.
LORD STONHAM: My Lords, the noble Lord made it perfectly clear that many sub-postmasters have a very small income from the postal duties. Can he say,

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when a locum is employed, at an obviously much higher salary, that in no circumstances will the sub-postmaster be at a financial loss through the employment of a locum?
LORD ST. OSWALD: My Lords, I do not think I can say that in no case will that be so. I am sorry to be so repetitive, but the fact is that they take it on on an agency basis and make themselves responsible for the upkeep of the sub-post office, whether or not they are engaged there themselves in the normal course of conducting the post office, which sometimes is not so.
LORD LAWSON: My Lords, may I ask the noble Lord whether there have been any complaints on this matter, individually or through any organisation?
LORD ST. OSWALD: My Lords, all I can say is that I know of no such complaints. That is not the same as saying there have not been any.
BARONESS WOOTTON OF ABINGER: My Lords, since the noble Lord said in his reply to Lord Stonham, that he cannot give a guarantee that in no circumstances does the sub-postmaster or sub-postmistress lose, can he explain how he reconciles this with his first Answer to me that the cost of the substitute is within the limits of the remuneration of the sub-postmaster?
LORD ST. OSWALD: My Lords, I must be explaining myself very badly, because I did say, in point of fact, that when a case of hardship could be proved, as in the case of the sub-post office of the noble Lady's village, special arrangements were made. But the normal practice is that, in view of the fact that it is carried on on an agency basis, the sub-postmaster or sub-postmistress is responsible for seeing that the work of the post office does not cease.
BARONESS WOOTTON OF ABINGER: My Lords, will the noble Lord look at the matter again and make sure that in ordinary circumstances or, indeed, in any circumstances the substitute will not be more expensive to the sub-postmistress than her own remuneration; that a sub-postmaster or sub-postmistress will not have to pay more than he or she receives? Would he look at that point again?
LORD ST. OSWALD: My Lords, I will certainly look at the noble Lady's words and see whether in some way I have failed to give her the answer I intended to give, which I felt should have been satisfactory to her.
LORD OGMORE: My Lords, quite apart from the personal and remunerative aspect of this matter, is the noble Lord satisfied that these somewhat curious arrangements are efficient for the handling of Her Majesty's mail?
LORD ST. OSWALD: My Lords, to the best of my belief the arrangements for sub-post offices which I have described have given general satisfaction.

SPECIFICATION FOR TINNED STEWED STEAK
3.13 p.m.
LORD SALTOUN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what were the conditions attached to the specification MEA839A for tinned stewed steak issued by the Minister of Agriculture, Fisheries and Food, and what were the reasons for them.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE): My Lords, the conditions are too long to be easily summarised, but I have placed copies of the specification in the Library of the House. It follows, broadly, the specification used for the purchase of stewed steak by Government Departments. But because this particular purchase was required by my Department for long-term storage, it was considered necessary to require that the cattle should be slaughtered on the premises where the canning was undertaken. This ensures the minimum handling, reduces the possibility of contamination between slaughter and manufacture, and so lessens the risk of deterioration during long-term storage.
LORD SALTOUN: My Lords, I thank the noble Earl for his Answer. I should like to ask him whether it is not the case that Her Majesty's Government, by public general legislation, have made it

1305
practically impossible, in Scotland, at any rate, to obtain licences for private abattoirs on the ground that they could not maintain the best standards?—and nobody knows better than I the effect of killing conditions on the taste of meat. Why, therefore, did they enforce conditions which had the effect of giving the contract overseas, where they have not the same control over the conditions at the slaughterhouse?
EARL WALDEGRAVE: My Lords, I am not sure about the Scottish legislation, but it is not at all the case that one cannot have private slaughterhouses in this country. I opened a new private slaughterhouse quite recently near Gloucester. I think the noble Lord must be misinformed about that matter.
BARONESS HORSBRUGH: Could the noble Earl say how long one can store stewed steak?
EARL WALDEGRAVE: My Lords, that is a technical question, and I should need to obtain the advice of my scientific advisers. But it is in the public interest that these commodities which are required for long-term storage should last a long time, and not have to be turned over, at perhaps a financial loss, too frequently.
LORD SALTOUN: Is the noble Earl aware that in the county of Aberdeenshire, for example, there is only one very large private slaughterhouse, which retained its licence with great difficulty only after a public hearing? So far as I am aware, there is no other private slaughterhouse in Aberdeenshire. And is the noble Earl aware that there is a very fine canning factory at Fraserburgh, Morayshire, and that 400 yards away, just round the harbour, there is a slaughterhouse which was retained by the borough with some difficulty, on which the borough has spent £25,000 and as to which I have been told that there is no superior abattoir north of the Border? Can the noble Earl say why, in view of that, a condition was imported into this specification which made it practically certain that such a place could not tender and that the contract had to be given overseas?
EARL WALDEGRAVE: My Lords, first of all, I do not know the conditions of individual slaughterhouses in
1306
Scotland or in Aberdeen; but if this slaughterhouse that the noble Earl is referring to is so good, if he can give me the name of the firm, I can tell him whether a tender was sent to them. I have the names here of all the 71 people to whom tenders were sent, and I have no doubt that a tender was sent to this firm. I do not know for what reasons they did not tender, or why their tender was not accepted.
LORD MACPHERSON OF DRUMOCHTER: My Lords, if I may declare my interest in this matter, I am speaking as an English canner of canned meat, and I want to say that there is great dissatisfaction in the canned food business of England—
SEVERAL NOBLE LORDS: Order, order!
LORD MACPHERSON OF DRUMOCHTER: I am coming to the question. Is the noble Earl aware that the greatest dissatisfaction exists in this matter among members of the Food Manufacturers Federation in England? And, in answer to a question which was raised, if I may answer it, may I say that canned stewed steak will keep for a great many years, especially if it is packed in England. I should like to ask the noble Earl this question: why was it necessary to have the stipulation in connection with these tenders that the meat had to be from carcases killed on the premises? This is quite unusual and, we say, quite unnecessary.
EARL WALDEGRAVE: My Lords, I am aware (and, if I was not before, I should have been now) that there is some dissatisfaction with the fact that the successful tenderer did not happen to be either in Aberdeen or in England, but I gave in my first Answer the reason why. Our scientific advisers advised us that it was necessary to put in this new requirement on account of this long-term storage, to lessen the risks of deterioration—as an added precaution.
LORD MACPHERSON OF DRUMOCHTER: Would the noble Earl say who the Ministry's scientific advisers are? It seems extraordinary.
EARL WALDEGRAVE: No, my Lords, I cannot possibly give the names. They are some of the finest scientists in the country. Some of them are civil

1307
servants. They are the scientific advisers who advise my right honourable friend in the Ministry of Agriculture and Food.
LORD STONHAM: My Lords, in order to relieve any anxiety on the part of consumers, can the noble Earl give an assurance that the specification for tinned steak referred to in the Question does insist that it should contain beef?
EARL WALDEGRAVE: My Lords, it is steak, and I think steak does mean beef.
LORD MACPHERSON OF DRUMOCHTER: Not whale?
LORD STONHAM: My Lords, the noble Earl has read the specification, and surely he can give us an assurance because it is of great importance. Does "tinned steak" mean "cooked beef"?
EARL WALDEGRAVE: My Lords, I have now turned up the actual specification. "The meat shall be beef".
LORD SALTOUN: My Lords, before we leave this matter I should like to ask the noble Earl whether the idea that meat killed on the premises lasts longer when tinned than meat killed under perfect conditions off the premises is merely a pious opinion, or has it been proved by experiment?
LORD REA: My Lords, might I just ask whether it would not be more convenient to carry the cans to the cattle rather than the cattle to the cans?
EARL WALDEGRAVE: My Lords, the answer to the first question of the noble Lord, Lord Saltoun, is that I do not think this matter can be proved by experiment. The scientific advice is that if you diminish the risks of contamination between slaughter and manufacture you will get a better article. I forget the question of the noble Lord, Lord Rea.
LORD REA: My Lords, I asked whether it would not be easier to carry the cans to the cattle rather than the cattle to the cans.
EARL WALDEGRAVE: My Lords, it would be difficult, I think, to can half a million pounds worth of beef on the farms.

FORESTRY RESEARCH GRANTS
VISCOUNT STONEHAVEN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper:
[The Question was as follows:
To ask Her Majesty's Government if they will state in what proportions the grants provided through the Forestry Commission for certain aspects of fundamental research to universities and other institutions in Great Britain were allocated to Scotland, England and Wales over the last five years.]
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD CRAIGTON): My Lords, the proportions were: England, 53 per cent.; Scotland, 41 per cent.; Wales, 6 per cent.
VISCOUNT STONEHAVEN: I thank the noble Lord for that Answer.

PUBLICITY FOR THE ROYAL TOUR
LORD BIRDWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if they can outline the measures which are being taken to give full publicity to the present Royal Tour, in foreign countries.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, I can assure the noble Lord that no pains have been spared to obtain full publicity abroad for the Royal Tour. I will give the House only a brief summary of these arrangements, but I should be glad to give the noble Lord full details later if he would like them.
In advance of the tour, our diplomatic posts abroad were supplied with ample publicity material, including special television and newsreel film. During the tour, full use is being made of daily eye-witness reports, radio tapes, photographs and films. In particular, the

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weekly British television news, which is used by television stations and cinemas in 30 countries, is carrying regular items with commentaries in a number of languages. Documentary films in colour, with commentaries in ten languages, are being made for distribution after the tour. All this is being done in full cooperation with the information services of the host Governments. Naturally very keen interest in the Royal Tour is being shown by Press, radio and television throughout the world.
LORD BIRDWOOD: My Lords, I thank the noble Marquess very much for his answer. It indicates, of course, that very complete arrangements have been made. May I just ask him whether there is any hope at all of these complete arrangements reaching the public in such places as Moscow or Prague, where otherwise, of course, they would receive either a distorted picture or the operation would be presented as a kind of Imperial plot?
THE MARQUESS OF LANSDOWNE: My Lords, naturally every effort is made by our information officers in the countries behind the Iron Curtain. The B.B.C. external services also put out material to the Iron Curtain countries but, of course, there is the difficulty of jamming, and Press censorship makes full publicity difficult. I think perhaps I should remind the noble Lord of the answer that was given to him on a parallel question by my noble friend the Foreign Secretary. He said [OFFICIAL REPORT, Vol. 227 (No. 27), col. 1018]:
"It would be a great help to co-existence, of course, if Press censorship were lifted, if radio jamming were ended, and all that. I think that we are making very, very slow progress, and we shall continue, as the noble Lord wishes, to press the Russians to agree to reciprocal treatment."
I can assure the noble Lord that we are still endeavouring to obtain reciprocity.

WEIGHTS AND MEASURES BILL [H.L.]
3.25 p.m.
Amendments Reported, (according lo Order.
Clause 5 [Working standards and testing and stamping equipment]:
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I beg to move the first Amendment on the Marshalled List. Clause 5 provides that the local authority shall be required to maintain the equipment necessary for them to carry out their duties. It also provides that the Board may maintain and hire out to such authorities as need it equipment which may sometimes be too expensive or difficult for the local authorities to maintain themselves. The noble Lord, Lord Latham, moved an Amendment in Committee and expressed some doubts lest this provision might involve any degree of compulsion. He said that the local authorities were afraid that the Board of Trade might be empowered by this clause to compel them to hire equipment. I said that I did not think the clause could be interpreted in that sense, and that it was certainly not intended to be, but your Lordships were not quite satisfied that it could not be. The noble Lord, Lord Silkin, and the noble Viscount, Lord Alexander of Hillsborough, voiced doubts on the subject, and I concluded by saying that if the noble Viscount was genuinely afraid that this clause might be interpreted in a way the Board of Trade did not believe it could be interpreted, of course we would look at it with the greatest attention. This Amendment is intended to remove any conceivable doubt on the subject.
Amendment moved—
Page 5, line 38, leave out ("the Board may") and insert ("then, if that authority so request, the Board may instead").—(The Earl of Dundee.)
LORD LATHAM: My Lords, we on this side, I think, are grateful to the noble Earl for having put down this Amendment, which, as he has said, gives effect to the Amendment submitted at the Committee stage by my noble friend Lord Alexander of Hillsborough. It removes the doubts which were present in the minds of the authorities, and I am

1311
sure we are grateful for what the noble Earl has been able to do with the Minister concerned.
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, this is another Amendment designed to effect the purpose of an Amendment moved by the noble Lord, Lord Latham, though his Amendment was to a much later part of the Bill, Clause 42. The noble Lord will no doubt remember that he wanted to omit the provision for requiring suitable premises to be maintained by local authorities for the housing of equipment, on the ground that, although this had been the law since 1904, it was now sometimes considered derogatory to the independence and dignity of local authorities.
In view of the objections expressed by the noble Lord to Board of Trade control on local authority premises, we are prepared to limit it to those which are used for housing inspectors' working standards and testing equipment. Those premises have under existing law to be to the satisfaction of the Board of Trade, and it is accordingly proposed that the provision about approval of premises shall be deleted from Clause 42 and that provision shall be made for the Board to approve the laboratories and other premises in which working standards and other testing equipment is kept, in the same way as the Board approve, under Clause 4, premises used for keeping local standards. I hope that this will meet the views of the noble Lord. Later on, I shall move to delete provisions of Clause 42 relating to the approval of local authority premises by the Board of Trade. I beg to move.
Amendment moved—
Page 5, line 44, leave out ("in the case of") and insert ("except so far as may be necessary for the purposes of their use elsewhere, shall be kept at premises provided by the local weights and measures authority and approved for the purpose by the Board; and").—(The Earl of Dundee.)
LORD LATHAM: My Lords, as the noble Earl has said, this Amendment goes some way to meet the objections voiced by myself and by other noble Lords when the matter was being considered in Committee. It limits the necessity for approval by the Board to those premises where is stored the neces-
1312
sary equipment. In these circumstances, we are much obliged.
On Question, Amendment agreed to.
Clause 6 [Testing of other standards and equipment]:
LORD ST. OSWALD: My Lords, when this clause was discussed in Committee, a number of Amendments were made to subsection (3), with the object of enabling the Board of Trade to prescribe a more realistic fee for the testing and stamping of flashing-point apparatus under Section 20 of the Petroleum (Consolidation) Act, 1928, and also a fee where the apparatus is tested and rejected. When the clause itself was moved, my noble friend Lord Derwent, while agreeing that an increased fee for the testing of flash-point apparatus was justified, pointed out that Section 20 of the 1928 Act prescribed a maximum fee. He thought that this principle should be retained and suggested that the procedure in the recent Patents Act be followed. On behalf of the Government, I undertook to look into the matter. This has now been done and the Amendment which I am now moving is designed to meet the noble Lord's point. It increases the present maximum from 20s. to £10 but permits the Board of Trade at any time, by order, to increase that maximum. By virtue of an Amendment to Clause 55, at page 45, line 22, which I will move later, any such order will require an Affirmative Resolution of each House, thus making the procedure for increasing the maximum subject to a similar control as that relating to patents' fees. I hope your Lordships will agree that this meets the points raised by noble Lords in Committee.
Amendment moved—
Page 6, line 44, at end insert—
("Provided that no such fee shall exceed ten pounds or such higher sum as the Board may by order specify.")—(Lord St. Oswald.)
LORD DERWENT: My Lords, may I thank my noble friend for having looked into this matter and for having gone the whole way to meet me? I am completely satisfied. May I also thank the noble Viscount the Leader of the Opposition for the support he gave me in Committee on this point? I hope that he, too, is now completely satisfied.
On Question, Amendment agreed to.
Clause 7:
Commission on Units and Standards of Measurement
7.—
(2) The Commission shall consist of nine members appointed by the Board as follows, that is to say—

(f) three from among persons appearing to the Board to have a good knowledge of industry or commerce;

and the Board shall from time to time appoint a chairman of the commission from amongst the persons appointed to be members thereof.
3.34 p.m.
LORD LATHAM LORD LATHAM moved, in subsection (2), to leave out "nine" and insert "twelve". The noble Lord said: My Lords, I ask leave of the House to couple with this Amendment Amendment No. 7, because this Amendment is the vehicle, as it were, for Amendment No. 7, and both are concerned with the constitution of the Commission. In Committee, this matter was the subject of lengthy consideration. Whilst, in pursuance of a promise made by the noble Earl, there is in his name on the Marshalled List an Amendment which goes somewhat beyond the terms of the Bill, I must say, without, I hope, appearing to be ungrateful, that in our opinion his Amendment does not meet the case. This is an important issue, an issue of principle, an issue concerning the dignity and rights of local government. After all, the weights and measures authorities represent the consumers, for it is they who must enforce the law. It is upon them that the responsibility has been cast; and if that be the case, as undoubtedly it is, then they should be in at the time when proposals are being considered which, if they are accepted, will have to be enforced by the weights and measures authority.
Take, for instance, the words "or public administration". There are thousands of people engaged in thousands of different activities which can he described as "public administration", but such experience as they may have obtained in that administration may not fit them to be able to judge the practicability of proposals which the Commission may evolve. We take the view that the weights and measures authorities are entitled, in their own right, because they are the enforcement
1314
authorities, to be represented through their associations on this Commission.
I should like to refer to what the noble Earl said in Committee—I quote from the OFFICIAL REPORT [Vol. 227 (No. 20), col. 209]. I had asked the noble Earl what were the functions the Commission would be carrying out in regard to which industry or the consumer would be concerned, and the noble Earl said:
"… it would be easier for me to answer the question of the noble Lord. Lord Latham, if I knew whom the Commission were going to appoint."
I suppose the noble Earl, really meant to say, "whom the Board were going to appoint". But that is a curious doctrine. Surely you do not decide who is to do a job before you decide what the job is to be. That seems to me to be an almost Alice-in-Wonderland doctrine. You do not fit the subject or purpose to the person; you fit the person to the subject or purpose. The noble Earl cannot tell us what this Commission is going to do until he knows how it is constituted. Surely the purposes of the Commission are determined, and then one looks around to find the persons best able to discharge the functions which are to be given to the Commission.
We on this side say that the local authorities who are weights and measures authorities should have representation on this Commission, and for that purpose this Amendment proposes to increase the size of the Commission from 9 to 12, to permit of the appointment of representatives of the three associations who represent the authorities who will be the weights and measures authorities. I very much hope that the noble Earl will be able to accept the Amendments on the Marshalled List on the constitution of this Commission. We take a very serious view of this and feel bound to press these Amendments. I beg to move.
Amendment moved—
Page 7, line 4, leave out ("nine") and insert ("twelve").—(Lord Latham.)
3.40 p.m.
LORD HAWKE: My Lords, while the noble Lord has been speaking I have been trying to make a study of the functions of this Commission. So far as I can see, their functions are purely what might colloquially be described as of an "egg-head" nature, except in one small

1315
respect; that is, in Clause 8 (1)(b), where they have to advise on the keeping of authorised copies of British Standards. I can imagine that weights and measures authorities might have some interest in where the copies of these standards are to be kept, because I presume that at some intervals their weights and measures have to be checked up against those standards. Otherwise, I cannot find in any of these functions anything designed to be done by anybody who is not a higher mathematician or scientist. For that reason, it seems to me that the noble Lord has a very small ground indeed for suggesting that weights and measures authorities, at any rate to the number of three, or indeed any persons other than these distinguished and scientific nominations whom the Government propose, should be represented on this Commission. Therefore I hope the Government will not saddle themselves with a long list of people in this body who will really perform no useful function.
LORD SILKIN: My Lords, I find it difficult to understand why there should be any possible objection to adding three names to the body that is set out in Clause 7. It is not proposed to interfere with that. I should have thought that the Commission would be strengthened by having three representatives of the local authority associations. The noble Lord, Lord Hawke, asks what the purpose of these representatives would be. The purpose of The Committee is to advise the Board on matters relating to units and standards, and I should have thought that local authority representatives who will have to administer this Bill when it becomes an Act would be in a strong position to give such advice.
LORD HAWKE: My Lords, may I interrupt the noble Lord? This is a point that has puzzled me. I thought as he did when we were first dealing with the Bill, but on re-reading it seems to me that the more mundane matters, as to whether there should be three-eighths of a pint measure and that sort of thing, will not come within the purview of this Commission. They are concerned only with the higher mathematics and the places of storage of these stan-
1316
dards. That is how I read it; but perhaps the noble Lord reads it differently.
LORD SILKIN: I do read it differently. I think that the matters on which they will be advising, according to subsection (1) of Clause 7, are much wider than the noble Lord has in mind, and that, at any rate, this gives them power to give such advice. But if the noble Lord is concerned only about such matters as involve the knowledge of higher mathematics, then I do not understand why Amendment No. 5 provides that they should consist of people who have "experience in industry, commerce or public administration". The noble Earl is really giving us that case, because, in addition to the pure scientists and mathematicians, he is bringing in people of wide experience and people with experience of public administration. It would therefore be quite possible, if the noble Earl's Amendment is accepted, to have local authority representatives on this Commission.
The real difference between the noble Earl and ourselves is simply that we want three representatives of local authorities to be there as of right and not merely as a result of the discretion to be exercised by the Board of Trade. In the result, it may be much the same, except that it would be a smaller number—the three might come out of the original nine. We want to add three, and we say specifically that they should be local authority representatives. I cannot see that there is any great question of principle involved in this matter. I feel that if this Bill is to operate smoothly, the local authorities, when these questions of principle are being considered, should be there to express their views.
THE EARL OF DUNDEE: My Lords, in replying to the two Amendments of the noble Lord, Lord Latham, and the noble Lord, Lord Silkin, I shall also, with your Lordships' permission, refer to my own Amendment, which mainly arises out of the discussion that we had on the various Amendments in Committee. On that occasion the noble Lord, Lord Stonham, preferred to have a separate discussion on his Amendment, and I take it that he wishes to do the same again. I must warn I am afraid, that my arguments in reply to his Amendment cannot be different in any way, but will be exactly the same, in

1317
principle, as those which I shall have to use now in reply to the Amendment which is before your Lordships.
As the noble Lord, Lord Latham, said, although we have tried to do a little to meet the point of view which he put forward, I think it is recognised here that there is perhaps an irreconcilable cleavage between us which rests on different conceptions of the function and the purpose of this Commission. The noble Lord quoted a remark which I made in Committee in reply to a number of questions and supplementary questions, not on the main purpose of the Commission but on the particular qualifications of the three members who are to be appointed by the Board of Trade, and who, in the Bill as it was, were to be appointed among other persons appearing to the Board of Trade to have a suitable knowledge or appropriate knowledge of industry or commerce.
My noble friend Lord Derwent asked a question about these three members. The noble Lord, Lord Latham, said that he wanted, before I replied, to ask a supplementary question which was not about the functions of the Commission as a whole, but as to what advice [OFFICIAL REPORT, Vol. 227 (No. 20), col. 209]:
"is it expected by the Board of Trade will be given by these three representatives of industry and commerce? What special knowledge or experience is it anticipated that they will bring".
For one thing, which I did not mention, we do not regard them as representatives of anything. I then replied to the noble Lord:
"But it would be easier for me to answer the question … if I knew whom the Commission were going to appoint."
Then the noble Lord said:
"The Board must determine what advice they want before they look around for the persons to give it."
I then replied:
"As the Commission will have to cover questions relating to the need for prescribing new units of measurement for use in trade or for abolishing existing units which have become obsolete, it is considered that they will benefit from membership of those with knowledge of trade and industry if these are included in the membership."
The difference between us is really this. Noble Lords opposite and the noble Lord, Lord Silkin, in what he has just
1318
said, have repeatedly suggested "representatives" in this or that theatre of life in the country, such as business or local authorities. We hold the view very strongly, and we must adhere to it, that this Commission should not contain representatives of any interest or body of people in the country at all. Indeed, in my Amendment, in order to make that clear, we have been obliged to introduce a rather clumsier form of expression than was contained in the original Bill.
LORD SILKIN: My Lords, may I point out that in the Amendment which we are moving, although we use the term "representatives" rather loosely—and I think perhaps my noble friend did, too —we visualise that they will be appointed by the Board and not by the local authorities themselves, though they may make suggestions.
THE EARL OF DUNDEE: I quite understand that. But even though they are appointed by the Board, we do not intend that the Board should select them as representatives of any body. I was just going to point out that my noble friend Lord Derwent suggested that it might appear from the existing wording of the Bill that these three persons to be appointed by the Board might be looked upon as representatives of business—the Federation of British Industries and so on—which is not at all what we intended. It is for that reason, in order to remove that misunderstanding, that we have substituted the words
"suitable qualifications by way of knowledge of or experience in industry, commerce"—
and we have added the words "public administration", to do all we can to meet Lord Latham's point. Because, as was pointed out just now by my noble friend Lord Hawke, experience of local authority administration might in some cases which the Commission might have to consider be of value in the Commission's work, although it would not be of major importance normally.
The point of putting in these provisions is not that we want anybody to be put on the Commission as a representative of industry and commerce, but simply because we think the Board, in choosing three independent persons to serve on the Board, should have regard to certain

1319
kinds of experience. The kinds of experience which we mention in the clause are the only ones which seem to us to be relevant to what the Commission will have to do. It is, as my noble friend Lord Hawke said, a body whose functions are entirely concerned, or at least predominantly concerned, with scientific questions relating to the fundamental and derived units of measurement defined in the Bill and with highly technical matters relating to the construction and maintenance of the primary standards established by the Bill. The functions are fully defined in Clause 8 of the Bill, and I do not think there can be any doubt about them. If it were one of the functions of the Commission, for example, to give advice upon the manner in which local authorities should carry out their duties under the Bill, then I should be 100 per cent. with the noble Lord, Lord Latham, in his argument. But that is not the case at all, and I think this cleavage of opinion which we have on this point arises from these different conceptions of what the Commission is supposed to do.
We feel that, in consideration of the arguments which were used in Committee, we have considered the matter as fully as we can. We have introduced an additional qualification of "experience in public administration" which may be one of the qualifications to be considered. But we are not going to have anybody as a representative either of local authorities or of business or trade unions or as a representative of anything at all. We think it would destroy the usefulness of the Commission if persons had to be appointed for reasons which are irrelevant to the work which the Commission will be expected to do, and that an enlargement of its numbers over nine would detract from its usefulness. I am sorry that we cannot come closer together in this matter, but I hope I have made the reasons for the Government's point of view as clear as I can.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I have listened carefully to the very courteous reply by the noble Earl and I can see that he is adamant on this point. Nevertheless, his argument has been such that, if it is sound, apart from the two words "public administration", I can see no reason at
1320
all for putting in two members experienced in industry and commerce unless there is something fundamental in the case with regard to local authorities. When one looks at the scientific matters set out in this clause, one sees that they might lead to contingent questions arising, especially in this vastly changing world of industry and commerce—questions dealing with all kinds of things, like pre-packaging in large quantities in different places, and the kind of effect such matters might have upon standards as well as units of measurement, and especially where the standards and units were to be stored. I therefore propose that we move to a Division on this matter, so that it may be properly debated in another place.
LORD DERWENT: My Lords, I thank my noble friend for having taken up the point I raised in Committee. At the end of the Committee stage I thought I understood what the Commission were going to do. I think I agree with my noble friend Lord Hawke on what their duty is, but I am not sure. I cannot help feeling still that it would be better for the Commission if the three people mentioned in paragraph (f) were not named at all, but were appointed by the Commission members in paragraphs (a) to (e) as three people they found necessary for their work. I do not wish to pursue that matter futher, but I should like to leave the thought in my noble friend's mind for the future course of the Bill.
LORD MILVERTON: My Lords, in the Committee stage of this Bill there were two Amendments down in my name which covered much the same ground as that of the noble Lord, Lord Latham, and at that time I should certainly have been prepared, if necessary, to go into the Lobby and vote against the argument then put forward by the noble Earl in charge of the Bill. But since then, like others. I have had time to reconsider, and I have carefully read and tried to understand the reasons which have been put forward by the noble Earl. I have to admit that to-day I think that, on the whole, I should not be prepared to go into the Lobby and vote against him on this matter, because I now see his point of view which previously I was not able to appreciate.
On Question, Whether the said Amendment shall be agreed to?
EARL OF DUNDEE: My Lords, this Amendment I have already discussed in dealing with that on which your Lordships have just divided. Although it contains only a small crumb of concession to the noble Lord. I hope that your Lordships will accept it for what it is. I beg to move.
Amendment moved—
Page 7, line 14, leave out from ("have") to end of line and insert ("suitable qualifications by way of knowledge of or experience in industry, commerce or public administration;").—(The Earl of Dundee.)
4.10 p.m.
LORD STONHAM LORD STONHAM moved, in subsection (2), to add to paragraph (f):
"of whom one shall have adequate experience of the organisation of workers ".
The noble Lord said: My Lords, I beg to move Amendment No. 6 which, as the noble Earl, Lord Dundee, has already foreshadowed, proposes that the three persons who will have suitable
Their Lordships divided: Contents, 22; Not-Contents, 66.

CONTENTS

Alexander of Hillsborough, V.

Douglas of Barloch, L.

Shackleton, L.

Amwell, L.

Faringdon, L.

Shepherd, L. [Teller.]

Attlee, E.

Henderson, L.

Silkin, L.

Boyd-Orr, L.

Latham, L.

Stonham, L.

Burden, L. [Teller.]

Lawson, L.

Williams, L.

Chorley, L.

Listowel, E.

Wise, L.

Citrine, L.

Pakenham, L.

Wootton of Abinger, B.

Dalton, L.

NOT-CONTENTS

Ailsa, M.

Dundee, E.

Milverton, L.

Ailwyn, L.

Dundonald, E.

Newall, L.

Alexander of Tunis, E.

Fortescue, E.

Newton, L. [Teller.]

Ampthill, L.

Freyberg, L.

Perth, E.

Ashbourne, L.

Furness, V.

Radnor, E.

Atholl, D.

Gage, V.

Rathcavan, L.

Auckland, L.

Goschen, V.

St. Aldwyn, E. [Teller.]

Bathurst, E.

Gosford, E.

St. Oswald, L.

Bethell, L.

Hailsham, V. (L. President.)

Saltoun, L.

Bilsland, L.

Hawke, L.

Sinclair of Cleeve, L.

Birdwood, L,

Horsbrugh, B.

Somers, L.

Boston, L.

Iddesleigh, E.

Soulbury, V.

Buccleuch and Queensberry, D.

Jessel, L.

Spens, L.

Buckinghamshire, E.

Kilmuir, V. (L.Chancellor.)

Stonehaven, V.

Cholmondeley, M.

Long, V.

Strang, L.

Clitheroe, L.

McCorquodale of Newton, L.

Stratheden and Campbell, L.

Colyton, L.

Mackintosh of Halifax, V.

Swinton, E.

Cottesloe, L.

Mar and Kellie, E.

Teviot, L.

Craven, E.

Massereene and Ferrard, V.

Torrington, V.

Croft, L.

Merrivale, L.

Waldegrave, E.

Derwent, L.

Mills, L.

Willingdon, M.

Digby, L.

Milne, L.

Wolverton, L.

On Question, Amendment agreed to.

qualifications by way of knowledge or experience in industry, commerce or public administration, shall include at least one who has adequate experience of the organisation of workers. In reply to my noble friend's Amendment, the noble Earl has said that he will treat this in a like manner, in that he is unable to accept it. I should like to say at once that Amendment No. 5, which he has himself moved and which embodies a suggestion made by his noble friend Lord Derwent, considerably improves the position.
I have advanced the arguments on Committee stage and I do not propose to repeat them, but I want to point out that the noble Earl has said this afternoon that the Government hold very strongly that these three people should not include people who represent any particular interest at all. I acknowledge the strength of that. But in my view, when these three people are appointed it will be impossible in fact to observe what he has just said. If, for instance, these three eminent persons are to have these suitable qualifications—experience

1323
in industry, commerce or public administration—it is quite certain that a business man, an employer, will be appointed, and he will be appointed simply because he is a business man, and an eminent one.
It is quite likely that another of the three persons will be someone who has a connection with public administration a member of one of the bodies concerned with public administration. Although these people will not be appointed as delegates, they will be appointed precisely because they have those particular qualifications; and although one would accept that the Government may not appoint a trade unionist simply because he is a trade unionist. I think that at least the noble Earl should give an assurance on behalf of the Government (because he has already said that he cannot accept my Amendment) that when these three persons are appointed they will include one who has considerable experience in the organisation of workers—namely, a prominent trade unionist.
The only object here—and it is quite a fair one; it is one which surely everyone must support—is to preserve a kind of balance in these things. These three gentlemen, or gentlemen and ladies, will be three wise people who, in the context of this Commission, will be laymen. They will not be scientists; they will not be experts in astral matters or things of that kind, but they will be laymen. To a large extent it will be their job to see that the decisions of this high-powered and extremely experienced scientific Committee will, as it were, be brought down to earth; it will be their job, before the recommendations are submitted to the Board of Trade, to ask themselves. "How will this affect the ordinary man or woman, for good or ill? How will it benefit them? Will it harm them?" Therefore, those three laymen are going to be important people, and it seems to me unanswerable that there should be this balance in the selection of those three persons.
There is no use denying that one of them is going to be an eminent business man. One of them is going to be someone eminent in public administration. What I am asking is that the third person should be one who is eminent in trade union affairs, who in fact represents the workers—not as a delegate, not in fact
1324
as a representative, but as one who, in effect, in committee can give expression to their views. After all, what is decided is going to be of importance in factories, in shops and everywhere. Surely, therefore, it is important that the recommendations of this Commission, which are going to be worked out in practice by ordinary men and women, should at some time before they are submitted to the Board of Trade have received the advice, knowledge and experience of a prominent trade unionist. It seems to me that the proposition is so self-evident that it does not need to be argued further. Even though the noble Earl has already said that he cannot accept the Amendment, I hope that, on behalf of the Government, he will give an assurance that when these three persons are appointed they will include a trade unionist. I beg to move.
Amendment moved—
Page 7, line 14, at end insert the said words.—(Lord Stonham.)
THE EARL OF DUNDEE: My Lords, the only thing I can assure the noble Lord, Lord Stonham, about, is that there is not the slightest reason why all three members of the Commission appointed by the Board of Trade should not be prominent trade unionists, because often trade unionists have suitable knowledge and experience of industry and commerce, and sometimes they have experience of public administration, too. There is not the slightest reason why all three should not be trade unionists.
The noble Lord must know a great deal about the intentions of the Board of Trade when he says that it is obvious that one of these three members is going to be a prominent business man and another a prominent local authority representative. If he knows that, he knows a great deal more than I do. But that is exactly what we do not intend to do under this Bill. I am not going to try to counter the noble Lord's prognostications about the membership of this Commission in any way, but I should have thought it just as likely that one or more of these three representatives might be people with a specialised mathematical knowledge of weights and measures who happen, in a subordinate capacity, to have a great deal of knowledge of industry and commerce and of the way in which weights and measures

1325
could impinge on industry and commerce. I do not know.
I must repeat that we do not take the view that membership of this Commission should be representative of any particular interest. We think it would detract from the usefulness of the Commission if that were so. We have introduced the words "experienced in public administration "because it is conceivable that in one or two respects experience of public administration might impinge on the particular specialised, scientific kind of work which the Commission will have to do; but by no conceivable stretch of the imagination can we think of any way in which experience of workers' organisations would be relevant to this particular kind of work. Though if is a fine and useful experience to have in general, it would have no particular relevance to this kind of work.
On the other hand, there is no reason why one, two or three trade unionists should not be appointed; nor is there any reason why those appointed by other persons should not happen to belong to trade unions. I believe our difference really arises from a fundamental divergence of view about the functions of this Commission. I do not want to elaborate what we have already covered in Committee. I am sorry, but I can do no more than repeat the considerations I put before your Lordships on the earlier Amendments, which in my view have not been detracted from by anything which has been said in support of those Amendments.
LORD SHEPHERD: I do not know what my noble friend intends to do in regard to his Amendment, but I think the noble Earl could help us if he would at least undertake to consider the suggestion that was made by the noble Lord, Lord Derwent. At the present moment we have it clearly stated that these three persons shall be experienced in industry and commerce. The noble Earl said this might well mean a trade unionist, but not many people looking at those words Would believe that that was the Government's intention. This is to be a man who conies from industry, a senior man; and obviously his views must be clouded or guided by his industrial experience.
If the noble Earl would consider between now and the Third Reading taking
1326
out those words from the Amendment he has just obtained:
"experienced in industry, commerce or public administration"
and using instead a few words which might embrace the views of my noble friends Lord Latham and Lord Stonham, words which at least would give an indication to the House that this is the intention of the Government—for they have said this evening that they wish to appoint three men not as representatives but as men who, because of their professional knowledge and experience, would be useful to the Commission—I believe that would be acceptable. I think if we struck out those words I have mentioned and found words within which loosely it would be possible for us to appoint three individuals, not as representatives but with knowledge, then my noble friends might be prepared to support that.
4.23 p.m.
LORD CITRINE: My Lords, may I say a word in respect of this Amendment? I think that, what has been said in support of it, however theoretically difficult to prove in practice, is very sound. I am quite sure that in the drafting of these words there was no contemplation in the mind of the draftsman of bringing in among these three representatives anyone having a knowledge of the organisation of workers; and I should have said that, had this point not been raised, it would not have been in the minds of the Board of Trade to make such an appointment. I am not in any way supporting the view, which in fact is not before us, for representation of the trade unions in a matter of this description; but I feel certain in my own mind that when a selection is being made those making the selection will have some regard to the interests with which the proposed appointee has been associated. That will be one of the tests of his knowledge: as to how far, in fact, he is acquainted, not with a particular trade but with the broad considerations of a practical, nature which will need to be applied in carrying out this work.
All we are asking is that similar consideration should be given to the work-people in industry; and that, without appointing a trade unionist as a representative of the trade union —or, I would go so far as to say, without appointing a trade unionist—someone

1327
who has a knowledge of the organisation of workpeople (and that is the only practical definition one can find) should be taken into consideration and ultimately appointed. These precise words have been used before in legislation. They are used in all the nationalisation Acts. I do not know whether they were used in the case of the Restrictive Trade Practices Act, but certainly a trade unionist, a man with knowledge of the organisation of workpeople, sits upon the Restrictive Practices Court. It is a difficulty of definition with which we are struggling here, and I believe that the words used in the Amendment are the nearest to which the Mover can get in seeking to express what he wants.
As a lifelong trade unionist, and one responsible in some measure for its later development in policy, I have been very anxious that at every stage trade unionists should be associated with the administration of this measure and with the carrying out of the practical day-to-day problems with which management, and even science, has to be associated; because there are trade unionists serving on scientific councils appointed by the Government. I believe that that is good for the country; that the more work-people can see their problems in perspective with the problems of industry as a whole, the better for the country. It is a long view and it may show no immediate results, but I am pretty sure that it is a sound view. I greatly hope that words can be found which will at least afford the opportunity for consideration to be given to this Amendment.
LORD STONHAM: My Lords, I am most grateful to my two noble friends for their support. May I add just one thing before the noble Earl replies on this particular point? During the Committee stage I ventured to say that if no workers' representative was to be appointed among these three—I am quoting from the OFFICIAL REPORT, Vol. 227 (No. 20), at col. 205.
"We might have, for example, the Chairman of Unilever, the Chairman of I.C.I. and the Chairman of Barclays Bank, all of whom have great knowledge of industry or commerce and a very keen interest in, and no doubt extensive knowledge of, weights and units of measurement."
When the noble Earl came to reply he said (col. 206):
1328
"The noble Lord … gave a number of possible examples of people who might be appointed to the Commission and I am sure that will be very helpful, because the Government have not as yet any fixed ideas about the precise appointments to be made."
I should be very unhappy if those suggestions made by me were the only suggestions to be considered by the Government, and I would therefore add that, while the Government are considering those three eminent gentlemen I suggested, they ought also to consider a representative from the Electrical Trades Union, the Associated Engineering Union, the Association of Supervisory Staffs, Executives and Technicians, the Transport and General Workers' Union and the shipbuilding unions, all of whom have in their daily work very considerable knowledge of units of weight and measurement; and although their membership of these unions has no relevance to this Commission they have, in their specialised knowledge, a knowledge of the organisation of workers. I hope, therefore, that those two sets of people will be considered together, and considered equally.
THE EARL OF DUNDEE: My Lords, if I may have your Lordships' leave to make a very brief further reply, I still feel that noble Lords who are supporting the Amendment have not quite correctly envisaged the purpose and functions of this Commission. As the noble Lord, Lord Citrine, has rightly said, there is a great deal of legislation, such as that dealing with nationalisation, in which there is provision for trade union representation. Of course, that is right and proper, because in those cases it is relevant to what the Boards or authorities concerned are expected to do. But I should like to repeat, for the last time, that the functions of this Commission will be of the most limited scientific nature, confined more or less to recommending what kinds of weights and measures are most useful.
It has been suggested by the noble Lords, Lord Derwent and Lord Shepherd, that we might go further and leave out all these qualifications altogether so that there would be no ill-feeling. One reason why I am a little reluctant to do that is that we have differed on this matter from the Hodgson Committee, which went further in the other direction. The Hodgson Committee suggested that the

1329
President of the Board of Trade should be entitled to make these three appointments—I quote from the Committee's Report:
"in order that industry and commerce can be appropriately represented".
That is what the Government disagree with. We disagree with the Committee on that point, because we take the view that the Commission and its members ought not to be representative at all of any interests, although it may be desirable that they should be learned in the matters under consideration. However, I will certainly look at the suggestion of the noble Lord, Lord Dement, which Lord Shepherd has mentioned. I think it would probably not be a good thing to omit the words altogether, but we might consider whether we could water them down any more.
LORD SHEPHERD: My Lords, before the noble Earl sits down, may I say that it is not a question of ill-feeling. The suggestion of changing or omitting these words was made to give some flexibility to the choice as to who should be concerned.
THE EARL OF DUNDEE: My Lords, I think that the Board of Trade have the greatest flexibility. It is, I think, an indication that they wish to look for people who are experienced in these things.
On Question, Amendment negatived.
LORD LATHAM LORD LATHAM had given notice of his intention to move an Amendment for the Commission's membership to include
"() three on the recommendation of the associations representing local weights and measures authorities."
The noble Lord said: My Lords, the principle and purpose of this Amendment has been decided on by your Lordships' House, and the matter must therefore be left for consideration in another place. In those circumstances, I will not move my Amendment No. 7.
Clause 8 [Functions of Commission]:
VISCOUNT STONEHAVEN VISCOUNT STONEHAVEN moved to add to subsection (2):
"The Commission shall, nevertheless, be empowered to examine special cases in particular sections of industry or commerce, where it is represented to them that it would be beneficial to encourage the use of metric units
1330
of weights and measures, and to make recommendations to the Board to facilitate such changes in usage, and the Board may, if they think fit, make provisions to give effect to such recommendations."
The noble Viscount said: My Lords. I moved a similar Amendment to this one during the Committee stage and received a very fair answer from the noble Lord, Lord St. Oswald. He stated, as I understood him, that Her Majesty's Government did not want a piecemeal compulsory change over to the metric system to be made possible by this Bill. He went on to say (or I understood him to say) that there is nothing to prevent the proposed Commission from examining the problem in relation to any particular industry—I do not think I have misquoted him, though I have paraphrased his words. That is quite true, but there is no indication whatever to encourage the Commission to do so. We are living to-day in a competitive world; we are constantly being urged to export more; we are constantly being told that if we do not export more we shall starve and die. Our friends in the Commonwealth are in this connection our competitors. So are the Americans; and we must regard the whole position as being a competitive field. Many of the Commonwealth countries and the Americans are moving towards the metric system. Some have all but got their decimal coinage, and others are thinking about it very definitely indeed. Then there is the question also of the emergent countries. They are starting from scratch, more or less, and it is at least conceivable that they will adopt the basic and most uniform system employed in the world. And that could, of course, be the metric system.
What I should like to get, if at all possible, is a few words of hope or encouragement saying that the Commission would be encouraged to search for other industries, such as the pharmaceutical industry, in which it would be advantageous to adopt the metric system. The joint Report of the Association of British Chambers of Commerce and the British Association indicated that the electrical industry, for example, is a likely place to start looking. It might be established from evidence given by trade associations that a voluntary change could be facilitated if Government Departments of a nationalised industry

1331
were to amend specifications to permit the use of metric units. The Director of the National Bureau of Standards in Washington is at least keenly interested in this question of the metric system, as are various Commonwealth countries. The Australian Decimal Currency Committee reported that the Committee thinks it should draw the Commonwealth Government's attention to the fact that the adoption of the metric system was raised by many people who supported a decimal currency.
South Africa has gone over, or is about to go over, to decimal currency, Pakistan and India are on the way. There is Eire, which is also in favour of that. It does not seem as if there is any question of our "going it alone" if we take some exploratory steps towards a possible change. We got left at the post over the Common Market question—or, if that is too strong an expression, we had a very rocky start—and I feel that the Commission could either lead in this or drag along afterwards. All I should like to accomplish, if it is at all possible, is to obtain an indication that this Commission should favourably search out any possibilities so that when the time comes the changeover to the metric system would be facilitated. I beg to move.
Amendment moved—
Page 8, line 46. at end insert the said words.—(Viscount Stonehaven.)
LORD ST. OSWALD: My Lords, this Amendment, as was the case with the two Amendments which the noble Viscount withdrew after a rather lengthy discussion on the Committee stage, is designed to enable the Commission to examine special cases in particular sections of industry and commerce where it is considered that it would be beneficial to encourage the use of the metric system of weights and measures, and to make recommendations to the Board of Trade with the object of facilitating a change over by those sections of industry or commerce; and, lastly, to enable the Board, if they think fit, to give effect to the recommendations of the Commission.
My noble friend has in mind, I think, a recent Joint Report, as he has explained, entitled Decimal Coinage and the Metric System: Should Britain Change?, to which he made a reference. That Report recommended that the
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world situation in regard to the use of the metric system should be kept under review by the Government through a regular two-yearly review by the Board of Trade, in consultation with industry and commerce, and with the corresponding bodies in the Commonwealth and the United States. The Government have accepted this recommendation in principle, and the Board of Trade will be keeping a watch on world trends; but they do not consider that this is a matter for the Commission on Units and Standards of Measurement or for action by subordinate legislation.
As I pointed out when the clause was being discussed in Committee, there is nothing in the Bill to prevent any section of industry or commerce from changing over to the metric system at any time, if it so desires. The Government, however, regard any compulsory changeover to the metric system as something which should be done only as part of a general plan or, at any rate, should be die subject of general legislation. My noble friend mentioned American competition. But, of course, we must also think in terms of the American market, and the United States is not a country which at the moment shows any intention of changing over to the metric system.
The noble Viscount mentioned the problems in connection with the changeover from the apothecary system to the metric system in the dispensing of drugs (I think this is what he was referring to), and it is true that those problems are not dealt with in the Bill as at present drafted. It has been envisaged in the past that these will be dealt with by separate legislation. The General Medical Council are, however, anxious to change over to the metric system in parts of the next edition of the British Pharmacopœia, which is due to be published in 1963. The measures necessary to deal with this situation are now under urgent consideration by the Board of Trade and the Health Departments. The Government hope that they will be able to introduce proposals for dealing with this situation within the framework of the present Bill during its passage through another place.
My Lords, we have studied carefully my noble friend's Amendments which he has set down both to-day and at the

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other stage. The reasons I have given are our reasons for still thinking that the Bill should be left as it is, and I hope that I may have persuaded my noble friend to withdraw his Amendment on this occasion.
VISCOUNT STONEHAVEN: My Lords, before I ask leave to withdraw this Amendment, may I thank the noble Lord for his very comprehensive answer, and say that I am quite sure that it will give considerable satisfaction to those people who are anxious about this matter and who thought my Amendment was necessary? I may add that I am satisfied. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 10 [Units of measurement, weights and measures lawful for use for trade]:
4.43 p.m.
THE EARL OF DUNDEE: My Lords, this and the following Amendment, Amendment No. 10, are drafting Amendments to improve the wording and balance of the clause. I beg to move.
Amendment moved—
Page 10, line 10, leave out ("and") and insert ("(4A)").—(The Earl of Dundee.)
THE EARL OF BUCKINGHAMSHIRE: My Lords, in connection with this Amendment I should like to ask the noble Earl who is in charge of the Bill a question. I regret that I have not given him any proper notice of it, but I hope he will be able to give me some indication. Under this clause, or subsection as it is going to be,
"… the Board may by regulations prescribe what may be treated for the purposes of use for trade as the equivalent of, or of any multiple or fraction of, any unit of measurement included in the said First Schedule …"
From the forestry angle, some of us are worried over the question of the hoppus measurement. We have in Part III of the Schedule the cubic yard and the cubic foot; and, as the noble Earl himself knows—he is a very keen forester—we use the cubic foot as a measurement of timber. I am wondering whether the hoppus measurement is covered by this subsection; or, if it is not, whether he would wish me to put down an Amendment to the First Schedule.
THE EARL OF DUNDEE: My Lords, the question of the hoppus measurement is now under discussion between the Board of Trade and the trades concerned as part of the wider question of certain special measures which are used in the timber trade.
THE EARL OF BUCKINGHAMSHIRE: I thank the noble Earl.
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, I beg to move.
Amendment moved—
Page 10, transfer lines 10 to 14 to after line 28.—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 11 [Weighing or measuring equipment for use for trade]:
THE EARL OF DUNDEE: My Lords, in Committee, on the Question whether Clause 11 stand part of the Bill, my noble friend Lord Derwent inquired whether testing equipment in use in the oil industry—such as flowmeters, proving tanks and twin container measuring instruments—could be used as appropriate local or working standards under subsection (2) of this clause. So far as I am aware, such equipment is not at present used by inspectors of weights and measures, but the Government see no reason why, if this is convenient both to the owner of the equipment and to the inspector, it should not be used for the testing of other equipment for use for trade, and the Amendment which I am now moving will make this clear. It will be necessary, of course, to make the use of such equipment subject to conditions similar to those applicable (under subsections (2) and (3) of Clause 5) to equipment provided by the local authorities, and my Amendment therefore includes power for the Board of Trade to prescribe such conditions by means of regulations. I beg to move.
Amendment moved—
Page 11, line 42, leave out ("and if it") and insert ("or, subject to any conditions which may be prescribed, by means of other equipment which has already been tested and which the inspector considers suitable for the purpose, and, if the equipment submitted").—(The Earl of Dundee.)
LORD DERWENT: My Lords. I thank my noble friend. This is rather technical, but I think that is what I asked for. In fact, I did not go so far as asking for

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it: I expressed a doubt. I am glad to think that perhaps my doubt was soundly based, and I think my noble friend has found the right answer to it.
On Question, Amendment agreed to.
Clause 12:
Approved patterns of equipment for use for trade
(2) A certificate of approval under the foregoing subsection may be granted subject to a condition that, except with the consent of the Board, equipment of the pattern in question shall be used for trade only for a specified period or only for a specified purpose; and if any person knowingly uses, or knowingly causes or permits any other person to use, any equipment in contravention of such a condition, he shall be guilty of an offence and the equipment shall be liable to be forfeited.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, in subsection (2) to leave out all words from "person" to "condition" and insert:
"knowing that such a condition has been imposed with respect to any equipment, uses, or causes or permits any other person to use, that equipment in contravention of that condition, or disposes of that equipment to any other person in a state in which it could be used for trade without informing the other person of that".
The noble Earl said: My Lords, in Committee the noble Lord, Lord Silkin, moved several Amendments which were designed to make it an offence to sell equipment which no longer possessed a certificate or which had become obsolete. I said that I would accept Lord Silkin's Amendments in principle, and he agreed that, in the form in which he had moved them, they went a little too far and might prevent a number of perfectly reasonable and legitimate transactions. The purpose of my first Amendment to Clause 12 is to make it an offence for anyone not only to use or cause to be used but also to dispose of any equipment, knowing that the certificate of approval in respect of that equipment places a limitation on the period during which it may be used or restricts its use to a specified purpose, without informing the purchaser of the facts.
My next Amendment makes it an offence for anyone not only to use, or cause or permit some other person to use, for trade equipment the certificate relating to which has been revoked, but also to dispose of such equipment to
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someone else in a state in which it could be used for trade without informing that person of the revocation of the certificate. I think these Amendments meet Lord Silkin's objective but at the same time do not prevent equipment from being sold for some use where the limitations do not matter—for example, for some non-trade use.
If I might anticipate my next Amendment, to Clause 13, page 14, line 23, I may say that I put it down also to meet an Amendment which Lord Silkin had on the Paper but did not move in Committee. The subsection—that is, subsection (3) of Clause 13—provides that a person using for trade equipment which to his knowledge no longer complies with the specification commits an offence, and this Amendment, No. 14, also makes it an offence for anyone to dispose of such equipment in a state in which it could be used for trade without informing that other person that it no longer complies with the specification. I beg to move.
Amendment moved—
Page 13, line 21, leave out from ("person") to ("condition") in line 23 and insert the said new words.—(The Earl of Dundee.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I think this is a very useful concession toward the object that my noble friend Lord Silkin has in mind, and I am much obliged. One thing which occurs to me and which may possibly merit consideration at some time is as to how Common Law in the matter will be affected, so far as the carrying out of this enactment will, let us say, affect auction sales. For example, a steel yard arm with a weighing platform for weighing grain, or any other similar weighing instrument, on some of the smaller farms, may get thoroughly worn and would have to be readjusted at the testing stations. Yet it may come straight into a farm auction sale and be purchased by, let us say, an iron or hardware man, who thinks it is perhaps no more than old iron, but who discovers later that, if he puts something on it, it moves the weights of the yard arm, and he may then seek to sell it. He may not have been informed at the auction about that. I am not against the Amendment that the noble Earl is putting down, but I think that the administration of the Common Law in that respect needs a little consideration.
THE EARL OF DUNDEE: My Lords, that is an interesting point and I shall have to consult the Law Officers before I give an official answer as to whether such activities would be affected by the Common Law.
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, I beg to move the next Amendment.
Amendment moved—
Page 13, line 35, after ("question") insert ("or disposes of any such equipment to any other person in a state in which it could be so used without informing that other person of the revocation").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 13 [General specifications of equipment for use for trade]:
THE EARL OF DUNDEE: My Lords, beg to move.
Amendment moved—
Page 14, line 23, after ("prescribed") insert ("or disposes of any such equipment to any other person in a state in which it could be so used without informing that other person that it no longer so conforms").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Regulations with respect to equipment used for trade and tare weight]:
LORD STONHAM LORD STONHAM moved, in subsection (1), after paragraph (f) to insert:
"(g) the testing of weighing equipment used for weighing cattle, sheep or swine at any market or slaughterhouse including—

(i) the provision of weights stamped as fit for use in accordance with the provisions of section eleven of this Act;

(ii) the circumstances in which such weights should be made available."

The noble Lord said: My Lords, the object of this Amendment is to enable the Board of Trade to be given permissive powers to make regulations for the testing of weighing equipment used for weighing cattle, sheep or pigs at any market or slaughterhouse, including the provision of weights stamped as fit for use, and the circumstances in which those weights can be made available.
Your Lordships are aware that under Section 4 of the Markets and Fairs (Weighing of Cattle) Act, 1887, and Section 46 of the Food and Drugs Act, 1955 (and it is significant that Parliament
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should twice have enacted legislation of this kind) scales at cattle markets must be tested at least twice a year. The Bill proposes to repeal these two provisions, which would mean that these scales would need to be tested compulsorily only once a year. On Committee stage I raised Amendments asking that those two provisions should not be repealed. The noble Earl, Lord Dundee, pointed out in his reply that they could be tested on other occasions at the request of the user, on payment, of course, of the appropriate inspection fee. But, my Lords, that is not good enough. Because if the Bill as it now stands becomes law, it will rest entirely with the local weights and measures authority as to when testing should be carried out. Of course, it may well be that that local authority is also the market authority.
During Committee stage the noble Earl said that when the accuracy of the scales deteriorates outside the inspection allowances, the stamps will be obliterated and they will have to be adjusted and re-stamped. That gives rise to the question of how the seller or the purchaser of the cattle can be certain that the scales are accurate, when there is no stipulated time limit, except once a year, as to when the scales must be tested, and no one can say whether the accuracy of the scales has deteriorated outside the inspection allowances. In this connection, of course, it may happen that the view of the buyer or the seller of the cattle may not agree with that of the market authority, who, as I say, may also be the local authority. My submission is that if it were stipulated that tests must be carried out at intervals of, say, not less than three months, it would ensure that the scales were at least tested at regular periods. But under the present Bill, if the two enactments I have mentioned are repealed, there will be no such guarantee.
This is a matter in which the National Farmers' Union are naturally very much concerned. They feel very strongly about it, and of course the farmers are likely to be particularly affected. There are good reasons why cattle market weighing equipment should be tested more frequently than most other machines used for trade. I am not going to argue that they are the only kind of weighbridges which have hard treatment. Machines which are used for

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weighing coal or stone also have very rough and heavy treatment. But cattle weighbridges are not dealing with inanimate objects. Cattle weighbridges often receive very rough treatment with restive or frightened animals passing over the weighbridge, and sometimes fighting. There is also the possibility of manure, earth, and all kinds of waste material, getting on to the weighbridge and affecting its balance. For these reasons it is quite obvious that there should be some simple means readily available to the buyer or seller of cattle, and understood by them to be readily available, to enable them to test the accuracy of machines. And that is precisely what this Amendment ensures.
As the noble Earl is aware, I have again tabled Amendments to a later Part of the Bill—in fact, they are the last three Amendments on the Order Paper—in the hope that these two measures will not be repealed; but we are now at an earlier stage of the Bill, and I put forward this Amendment, not so much as an alternative, but one which I hope will be accepted as an extra provision. I am suggesting that certified and stamped weights of varying poundages should be available for use at cattle markets and slaughter points and also that scales should be required to be checked, by means of these weights, by the certified operator before commencement of a testing operation, and, of course, after any break in the continuity of working the weighbridge at any centre. In other words, if the certified weights were available, the certified operator could test the scales every day.
I submit that this seems a self-evident case and one which is absolutely necessary. This particular clause provides permissive powers to the Board of Trade to make regulations. They "may" make regulations it does not insist that they shall. But I am quite sure that when the Board investigate these facts which I have put forward fully and carefully, they will wish to have the power to make these regulations, and will, in due course, do so. Therefore, in consideration of the fact that those who are most likely to be concerned here are the farmers, and buyers and sellers of cattle, who are anxious to have these facilities and need confidence in the knowledge that the scales on which their cattle are weighed
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are as accurate as can be, I feel that the Government should accept this Amendment, and that there is no need for me to argue it further. I beg to move.
Amendment moved—
Page 15, line 12, at end insert the said paragraph.—(Lord Stonham.)
5.0 p.m.
THE EARL OF DUNDEE: My Lords, a good many of the Amendments which have been tabled are designed to prevent too much interference with the responsibility and dignity of local authorities by the Board of Trade. In fact, I see that the noble Lord, Lord Latham, has again put down an Amendment, which we discussed in Committee, to leave out Clause 48, which in my view gives the Board the minimum powers of ensuring that degree of uniformity which we want to observe. I feel that this Amendment is a most unwarrantable interference with the judgment and the independence of local weights and measures authorities. I should have thought that, if a local authority happened to be the owner of a market, that would make them take more interest, and not less, than if it belonged to somebody else.
I think that the frequency with which a machine is inspected can be left, and ought to be left, to the local authority and to the local inspector. It is part of an inspector's duty to know which machines, due to the conditions under which they have to be used, are liable to lose their accuracy quickly, and to arrange inspection with such frequency as he considers desirable. The testing by inspectors of weighing equipment used for weighing cattle, sheep or swine at markets and slaughterhouses is already covered by paragraph (b) of this subsection, and accordingly that part of the Amendment which relates to such testing is not necessary. So far as additional frequency is concerned, there is no objection from the weights and measures point of view, to such weights being made available and to tests being carried out to the satisfaction of the users of the equipment as frequently as they may desire.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, the noble Earl seems to think that Clause 14 (1) (b) covers all the items in my noble friend's Amendment. That can be so only if the

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noble Earl can assure us that it is intended that they should be covered in the regulations to be issued under the clause.
THE EARL OF DUNDEE: My Lords, it does cover the testing of equipment but does not provide for additional testing, which is the object of the noble Lord's Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, whatever the technical implication the noble Earl may put upon it, I feel sure that he has often been at agricultural markets and seen the amount of strain put upon weighing instruments, which is sometimes exceedingly heavy. Wherever there is a movable platform as a bridge between the accommodation for the cattle that are going to be auctioned and the actual selling arena, there are such violent reactions on the spring weight shown on the clock as to make many people doubtful, at certain times of the year, whether they are getting accurate measurement or not. From this point of view I think that my noble friend is entitled to call attention to the situation and to hope that there can be at least an assurance from the noble Earl that in the regulations made under paragraph (b) this point will be covered. There is a good deal of feeling in the agricultural industry about this matter. The other day I was reading in the Farming Express that farmers are grousing, not about this particular case, but about the returns to them on animals, sent for sale by dead weight at slaughterhouses. In these circumstances, anything that can be done to reassure them would be a very good thing.
THE EARL OF DUNDEE: My Lords, I am grateful to the noble Viscount for his intervention. I was just about to point out that all that can be done voluntarily by the market authorities as often as they like by arrangement with the local authority and local inspector, but what we are concerned with is what the Board require the market authorities to do by law. We do not think that we should require them to carry out special tests over and above the ordinary tests which are required by the Act. I think that that would be an undesirable interference with their independence. There is nothing whatever to prevent equipment from being tested every day, if the market authority thinks
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it should be done and if they choose to make the appropriate arrangements with the local inspector or the local weights and measures authority.
LORD STONHAM: My Lords, the noble Earl has rightly said that it lies within the power of the Board of Trade to make regulations with regard to inspection, and obviously in these regulations they can say how often a piece of weighing machinery should be inspected, but the plain fact remains that in this Bill the Government propose to remove provisions which at present insist on that machinery being tested at least twice a year and to leave only a provision that they shall be tested once a year under general weights and measures legislation. Naturally, farmers think that at least half of their safeguard, the frequency of the test, is removed. The noble Earl has failed to deal with that point, and his reluctance to grant what seems to me to be a most reasonable request gives rise to a doubt about whether paragraph (b) is going to be used in the manner which he suggests.
My noble Leader rightly pointed oat the fact that this type of machinery is often subject to sudden strains, which are observed by the people around and which might produce some of the incidents which occur on these occasions. The certified operator, who would always be in attendance, would know of this. The noble Earl did not say that the second part of my Amendment, referring to the provision of weights stamped as fit for use, is covered by paragraph (b), but if this Amendment were accepted the Board of Trade would make regulations for the provision of weights stamped as fit for use, and in the circumstances in which there was a sudden strain on the weighing equipment and thereby doubt arose about the accuracy of the scales the certified operator, without worrying the inspector of weights and measures, could use those weights to test the scales and satisfy the farmers and cattle buyers that the scales were accurate. This seems to me to be a completely reasonable provision.
The one objection, apparently, to the noble Earl's acceptance of the Amendment is that it would be an unwarrantable interference with the rights of local

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weights and measures authorities. But surely local weights and measures authorities are anxious that everyone who uses their equipment should be satisfied that he is getting correct weight. A simple and workable provision of this kind would be an admirable way of making sure that that is the case.
It is obvious to me, from my limited experience, that the noble Earl is not going to accept the Amendment this afternoon, but I hope that he will look at it again between now and Third Reading It seems to me a reasonable and most sensible thing that this should be done. If the Amendment is not acceptable in its present form, perhaps the noble Earl can find some other way of reassuring the National Farmers' Union that farmers can be sure that, in so far as it is humanly possible, they will get equipment which is tested with sufficient frequency and which they can be certain will be, bar accidents, accurate.
On Question. Amendment negatived.
Clause 15 [Offences in connection with stamping of equipment]:
THE EARL OF DUNDEE: My Lords, this Amendment deals with offences which relate to the defacing of an inspector's stamp. When this clause was considered in Committee the noble Lord. Lord Milverton, moved an Amendment to this part of it. It is recognised that scale-makers may need to destroy obliterate a stamp in the course of overhauling some weighing or measuring equipment, and the proviso to subsection (1) accordingly exonerates them from any offence under that subsection in so doing. The noble Lord, Lord Milverton, moved an Amendment to extend this exoneration to repairers of weighing or measuring equipment who are not manufacturers. ""Repairers" were not clearly defined. We thought the Amendment went too wide, and the noble Lord, therefore, withdrew it after I had undertaken to move a suitable Amendment later. This Amendment is designed to implement that promise, and we believe that the words now on the Marshalled List effectively achieve the noble Lord's objective without going too wide and exempting "Do it yourself" repairs and adjustments. I beg to move.
Amendment moved—
Page 16, line 6, leave out from ("seal") to end of line 8 and insert ("in the course of the adjustment or repair of weighing or measuring equipment by, or by the duly authorised agent of, a person who is a manufacturer of, or regularly engaged in the business of repairing, such equipment.").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 19:
Keepers of public equipment to hold certificate
19.—(1) No person shall attend to any weighing or measuring by means of equipment available for use by the public, being a weighing or measuring demanded by a member of the public and for which a charge is made, other than a weighing or measuring of a person, unless he holds a certificate from a chief inspector that he has sufficient knowledge for the proper performance of his duties; and any such certificate shall cease to have effect at the expiration of two years from the date when it was granted.
(2) Any person refused such a certificate as aforesaid by a chief inspector may appeal against the refusal to the local weights and measures authority for the area for which the chief inspector was appointed.
LORD LATHAM LORD LATHAM moved, in subsection (1), after "certificate" (where that word first occurs), to insert "of competence". The noble Lord said: My Lords, when moving a similar Amendment in Committee I said that this was not a question of nicety of language; and that was the case. It is even more so now, because under Amendments tabled by the noble Earl, if they are carried and embodied in the Bill, the certificate to be issued to the keepers of equipment will not be revocable. It is therefore even more important that the persons who are designated as keepers of this public equipment should be properly fitted for the tasks which will be conferred upon them. In my submission, it is not only a question of knowledge. A person can be full of knowledge and empty of wisdom; a person can know all the regulations and pass an examination, including actual tests, yet not be competent to discharge the important duty of keeping public equipment. Indeed, when the matter was being discussed in Committee the noble Earl himself said [OFFICIAL REPORT, Vol. 227 (No. 21), col. 306]:
"Possibly the word 'fitness' might be more appropriate "—
that is to say, fitness to the words of the clause. It is an interesting and perhaps an amusing circumstance that in

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the Bill as reprinted after the Committee stage the rubric, which in the previous Bill had read,
"Keepers of public equipment to hold certificate of competence ",
then read:
"Keepers of public equipment to hold certificate."
Somebody, no doubt under instructions, has eliminated the two words, "of competence". I press this Amendment because from my experience, which I am sure cannot differ from that of many noble Lords, a person, as I have said, may be able to pass an examination and pass the tests (we see examples of that on the roads every day), yet not be competent to discharge the duties of the keeper of this public equipment. That is the more so because, as I have said. Amendments have been tabled on behalf of the Government making the issue of the certificate irrevocable. In those circumstances, I hope that the noble Earl will be able to accept this Amendment, which is not put forward in any frivolous sense, but because we on this side of the House take the view that it will strengthen the language of the clause. I beg to move.
Amendment moved—
Page 18, line 12, after ("certificate") insert ("of competence").—(Lord Latham)
THE EARL OF DUNDEE: My Lords, Clause 19 requires the keeper of public weighing and measuring equipment to hold a certificate of a chief inspector of weights and measures that he has sufficient knowledge for the proper performance of his duties, and it makes such a certificate valid for two years. Subsection (2) enables any person who is refused such a certificate to appeal to the local weights and measures authority for the area for which the chief inspector was appointed. That is in the Bill as it stands now. A number of Amendments on these points were moved in Committee. The noble Lord, Lord Latham, moved a series of Amendments which, had they been accepted, would have had the effect, first, of substituting the word "competent" for the words "have sufficient knowledge for the proper performance of his duties"—
LORD LATHAM: Additionally, if I may say so; not in substitution.
THE EARL OF DUNDEE: I thought the noble Lord had proposed to leave out these words, but if I am mistaken, I apologise. Anyhow, the point was that he wanted to lay stress on competence. Secondly, that series of Amendments, if accepted, would have had the effect of empowering a chief inspector to refuse or revoke a certificate for any sufficient reasons relating to the applicant personally.
LORD LATHAM: I am sorry to interrupt again, but the two were not necessarily connected. It is true they were related to the same clause, but the question of competency was independent of personal disqualification. It is quite fortuitous that they were in the same clause.
THE EARL OF DUNDEE: I quite appreciate that, but it is the Government, in considering the matter, who have necessarily connected them together, as I shall explain in a moment.
LORD LATHAM: If I may say so, that is a misconnection.
THE EARL OF DUNDEE: I did not mean that the noble Lord intended to connect them, but we have considered all the Amendments together. The noble Lord, Lord Burden, also moved an Amendment which, if it had been accepted, would have had the effect of directing appeals to a magistrates' court rather than to the local authority for whose area the chief inspector was appointed. The Government felt, and I stated, that there was room here for further consideration of the best approach, particularly because of the great importance to a man of having his certificate revoked and taken away. I said that we would reconsider the whole question again and, having looked at the clause afresh, would bring forward proposals at a later stage of the Bill; and all the Amendments were withdrawn pending reconsideration by the Government.
LORD LATHAM: I am sorry to interrupt the noble Earl, but should like to keep things straight for the Record. The Amendment of my noble friend Lord Burden on Committee stage was not that there should be an appeal to the magistrates' courts: his proposal was that representation could be made by the

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aggrieved person. I suggested that a tribunal should be appointed to which appeals could be made, and that was the situation at the end of the Committee stage. There is now, however, an Amendment submitted by my noble friend Lord Burden suggesting a reference to the magistrates' court. But that was not the Amendment before the Committee.
THE EARL OF DUNDEE: My Lords, I have the OFFICIAL REPORT here, but I will not at this moment go into the exact number of Amendments moved by Lord Burden. The important fact is that all the Amendments were withdrawn, because I explained to your Lordships that the Government were going to consider the clause afresh—which we have now done. And we have come to the conclusion that the question of a certificate should be entirely separate from the question of whether or not, on other grounds, the man who holds the certificate is a good person to employ.
We think that the employer of a keeper of public weighing or measuring equipment should be left responsible for judging the reliability of the individual employed as weighing instrument operator, just as the local authority judge that of the inspector; and the employer must be left with the responsibility to discharge any such employee who, because of his subsequent actions, has proved to be unreliable. We therefore feel that the certificate should still relate solely to that knowledge which is sufficient for the proper performance of his particular duties, whether they are specific or more general duties, and that, once given, the certificate should not have to be renewed at intervals.
Suppose that a firm of accountants were to make a rule that people they employed should have a degree in mathematics; and suppose that the person they employed misbehaved himself and produced false accounts. He would probably be sacked. But that would not mean that his degree in mathematics would be taken away. People who wanted to employ him again would no doubt get a reference from his previous employer, and if they considered, on the grounds of his record of unreliability, that they would not
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employ him, that would not affect the fact that he has the degree, which has nothing to do with his reliability or suitability except in so far as it concerns his knowledge of the subject. We felt that the most satisfactory way to look at this question was to treat the certificate in that way.
LORD LATHAM: My Amendment concerns action prior to the issue of the certificate; that the certificate should not be issued unless the chief inspector is satisfied as to the person's competence and not as to his personal character. That would come later. That arises on the question of revocation.
THE EARL OF DUNDEE: I am trying to deal with the whole question comprehensively, if your Lordships will allow me to do so. We think the certificate should relate solely to that knowledge which is sufficient for the proper performance of his particular duties. As to his competence to carry out that knowledge and put it into practice, we think that is a matter which must be left to his employers: the certificate should be concerned solely with his knowledge, and not with his employer's opinion of whether or not he does his job well. It is possible to have an extremely knowledgeable man who does not satisfy one particular local authority, or whoever employs him. That is a matter for his employers. But the certificate should be given to him on grounds of knowledge, and not on other grounds which may affect his employability. That is the object of the first Amendment which I intend to move. In the chief inspector's certificate there will be a statement that the person concerned is technically qualified to perform certain duties, as is the case with many other examinations. But it will not be a statement about his character.
Now may I mention the second Amendment which the Government have put down as a result of their reconsideration of this clause? Since the only grounds for refusal of a certificate will be lack of sufficient technical knowledge, it seems right that any appeal from such refusal should be to a body which is able to examine the candidate's knowledge of the particular work, and in the view of the Government that body should be the

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Board of Trade. The Board would have the assistance and advice in this respect of its technical officers who are charged with inspecting the arrangements made by local authorities under the Bill, so that the operative who thinks he has been unfairly refused a certificate would not, unless he so wished, need to travel to London. The examination could be done by the local officers of the Board of Trade.
These considerations seem to us to be the right way of dealing with the certificates. They should be given on grounds of knowledge, rather than on grounds of competence, because the word "competence" might raise all kinds of other considerations which need not necessarily depend on the grounds upon which an examination is based. That is a reason why the word "competence" has been removed from the rubric. It was not appropriate there, and I thought in Committee that the noble Lord had moved his Amendment so as to make the text fit in with the rubric. Now that we have reconsidered the matter and decided to ask your Lordships to accept these Amendments, we have, of course, altered the marginal reference accordingly.
LORD LATHAM: The noble Earl does not now think that "fitness" would be a better term?
THE EARL OF DUNDEE: I should have thought not. "Fitness" would be open to the same possible misinterpretation as the word "competence". I should have thought that knowledge of the subject was the best definition of the quality required for a certificate to be given.
LORD LATHAM: Surely "knowledge and fitness" are better?
THE EARL OF DUNDEE: I do not know. If you want to appoint a professor of mathematics, the people who appoint him must judge of his fitness. But as for his knowledge, that is more appropriately related to the general diploma, or whatever it may be, which some employers may want to see in order to show that he has the knowledge. That is a thing which he gets once and for all. After that, his fitness, competence, reliability, honesty or whatever it may be, must be judged, and ought to be judged, by the people who employ him.
LORD LATHAM: Sir Charles Snow, who is a scientist as well as a novelist, does not take that view, does he?
LORD CITRINE: My Lords is there not some slight inconsistency with what has been said by the noble Earl? So far as I can judge from this clause and what has, been said, the scope of the chief inspector is limited to ascertaining whether or not the man possesses enough knowledge. That is correct, is it not?
THE EARL OF DUNDEE: That is correct.
LORD CITRINE: Very well. But now look at the next subsection. Supposing the certificate is refused, and the man who considers himself aggrieved appeals against it, there is nothing in the subsection which limits the power of the body to which he appeals either to sustain a refusal or to set it on one side. There is nothing set out here about knowledge.
THE EARL OF DUNDEE: It is limited by the terms for which it is granted, and that is why we think the appeal ought to be made to the Board of Trade, because they are able to give the final judgment as to the man's knowledge of the subject.
LORD CITRINE: It is not referred to in the subsection.
On Question, Amendment negatived.
THE EARL OF DUNDEE: My Lords, I beg to move.
Amendment moved—
Page 18, line 14, leave out from ("duties") to end of line 16.—(The Earl of Dundee.)
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, I beg to move.
Amendment moved—
Page 18, line 18, leave out from second ("the") to end of line 20 and insert ("Board.").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 21 [Offences in connection with public equipment]:
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, in subsection (1), to leave out "The provisions" and insert "Subsections (2) to (4)". The noble Earl said: This is another Amendment to give effect to an undertaking which I gave to the noble

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Lord, Lord Silkin, in Committee. Clause 21, to which this Amendment and the next Amendment, No. 22, relate, deals with a number of offences in connection with public weighing and measuring equipment, and subsection (2) of Clause 21 requires a keeper of such equipment, among other things, to keep a record of the weighing and measuring be carries out. Subsection (3) makes it an offence if he makes a false record.
When your Lordships were considering this clause in Committee, some of your Lordships argued that its intention —that is, the prevention of fraud by public weighing machine keepers—would be frustrated unless the clause included a requirement that records should be kept and produced for examination when required. The noble Lord, Lord Latham, moved an Amendment which would have had the effect of requiring records to be kept for a period of at least six months by the person by whom the weighing was made, and he withdrew his Amendment on my undertaking to move at a later stage an appropriate Amendment imposing the obligation on the person responsible for providing the equipment, and prescribing a more suitable period for preserving those records. Lord Silkin expressed the view that six months was not long enough. I hope your Lordships will agree that the second Amendment strengthens the clause by requiring records to be kept for twelve months by The person making the equipment available to the public, and to be produced for examination by inspectors, and by making it an offence for any person to destroy or deface such records before the expiry of that period. I beg to move.
Amendment moved—
Page 18, line 36, leave out ("The provisions") and insert ("Subsections (2) to (4)"). —(The Earl of Dundee.)
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, I beg to move.
Amendment moved—
Page 19, line 24, at end add—
("(5) The person making any weighing or measuring equipment available for use by the public shall retain for a period of not less than twelve months any record of any weighing or measuring by means of that equipment
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made by any person appointed to attend thereto, and any inspector, subject to the production if so requested of his credentials, may require the first-mentioned person to produce any such record for inspection at any time while it is retained by him; and if the first-mentioned person fails so to retain or produce any such record, or if any person wilfully destroys or defaces any such record before the expiration of twelve months from the date when it was made, the person in question shall be guilty of an offence.").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 22:
Transactions in particular goods
22.—
(4) The Board may make regulations—
(5) The following are exempted from all requirements imposed by or under this section, that is to say—

(d) any assortment of articles of food pre-packed together for consumption together as a meal and ready for such consumption without being cooked, heated or otherwise prepared;

and the Board may by order exempt from all or any of the requirements aforesaid, either generally or in such circumstances as may be specified in the order, any other goods or sale so specified.
THE CHAIRMAN OF COMMITTEES: I have been informed that it would be more convenient to the movers of the next Amendment if it were divided into two, and for the second proposed new paragraph to be treated as a separate Amendment. I therefore, with the permission of the House, propose to deal with it accordingly.
LORD SHEPHERD LORD SHEPHERD moved in subsection (3) after paragraph (a) to insert:
"() as to the size, shape, material, colour or quantity, in any particular, of the container, wrapping or packaging material associated with any goods sold, exposed or offered for sale, or in possession for sale, or in possession for a purpose of trade; and for prohibiting the use of deceptive containers or wrappings on or with any such goods. 'Deceptive' for these purposes being such containers or wrappers which falsely or misleadingly suggest that the quantity of the goods which they contain or with which they are associated is substantially greater than in fact it is;".
The noble Lord said: My Lords, I am grateful to the House for meeting me in this request, because the two paragraphs in the Amendment are on rather different subjects. We on this side of the House

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do not regard this Amendment as a technical Amendment to improve the Bill; we believe that we are raising a matter of considerable importance and a general principle. Advertising, publicity and display are playing a greater part to-day in the distribution of merchandise than ever before, and we must anticipate that this trend will continue. My friends have no basic objection to displaying material for the purpose of its sale, for the development of the sale policy of the company, but there are from time to time cases where merchandise is put on the market to catch the public eye, to entice the buyer, and about which the customer, on taking the merchandise home, would say that the offer was definitely misleading.
My noble Leader at the Committee stage produced an article from the cosmetic trade to indicate that type of deceptive container. It was a plastic box the contents of which were approximately 50 per cent. of the size of the container. We felt that such a container was misleading. I do not propose to show your Lordships that container this afternoon, because I do not want my case to be based purely on cosmetics. There are many containers on the market to-day which are grossly misleading, both in size and shape. In the case of detergents this has been a general practice: giant-size containers containing only the average amount. The Government may well say that this matter is being taken care of because to-day this article will have to bear on it the net weight; but I do not think that that, in itself, is sufficient protection. Publicity is the attraction of the eye to the article.
May I explain that some time before the war I had some connection with the advertising world, and I remember that in a cold snap very similar to the one we have to-day one of the well-known beverage firms put on an advertising campaign and they scooped the market. I doubt whether their product was any better than that of any of their competitors, but they had put something on to the market with publicity which caught the public eye. I believe that many of these deceptive containers, even though they are going to have the net weight on them, will catch the eye because of their size and their attractiveness. I think that is wrong. We are asking this House
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to accept our Amendment not only to protect the consumer but also to protect those manufacturers who put their articles on display and offer to the public for what they are worth.
I can think of one example of a deceptive container. Later in the Bill we are to deal with the sale by net weight of tobacco; but we are not bringing into the Bill a provision laying down the net weight of tobacco in a cigarette or a packet of cigarettes. Noble Lords will know that to-day "king-size" cigarettes are being sold at a Cheaper price than ordinary cigarettes. This is done by fitting a large filter. In this Bill we are not saying that a cigarette must contain a certain amount of tobacco. We might well see cigarettes increasing in numbers with a filter tip, but with less and less tobacco. If this Amendment were accepted, and if there were wide abuse by cigarette manufacturers or anybody else in putting their merchandise on the market in a deceptive way, this situation could be dealt with.
What we have said in our Amendment is quite clear—namely,
"'Deceptive' for these purposes being such containers or wrappers which falsely or misleadingly suggest that the quantity of the goods which they contain … is substantially greater than in fact it is."
I think that this House, which has set itself up in the past to protect the public, can hardly refuse to accept an Amendment which gives protection both to the public and to the manufacturer against misleading containers and wrappers. I beg to move.
Amendment moved—
Page 20, line 45, at end insert the said new paragraph.—(Lord Shepherd.)
5.42 p.m.
LORD ST. OSWALD: My Lords, I regret that I was told only a minute or two ago of the arrangement which had been reached by the Lord Chairman of Committees and the noble Lord who moved this Amendment of dividing the Amendment into two parts, and I have done my best in the time available to me to separate the arguments that I was producing to one Amendment. I hope I shall satisfy your Lordships that I have done my best.
Your Lordships will remember that this Amendment was discussed at great length on the Committee stage, and on

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that occasion I argued that in my view the housewife could hardly require all the protection which noble Lords opposite were anxious to give her: that is to say, I argued in a state of considerable innocence, some of which has been rubbed off in the intervening weeks. It is always regrettable to lose even a little of one's dwindling innocence, but in this event what I regret even more is that I have lost some part of my respect for some housewives—a very small number, I hope and submit. Impressed, as I was bound to be, by the arguments of noble Lords opposite six weeks ago, I spent a considerable part of the Christmas Recess discovering some of the tricks which the housewife allows to be played upon her and which some grocers and packers are willing to play—I hope, in both cases, a minority.
A full catalogue of all the instances described to me would not be suitable for your Lordships at this stage, when we all want to get on, abut they were such stratagems as are bound to remind one of G. K. Chesterton's song against grocers:
"God made the wicked Grocer
As a mystery and a sign
That men should shun his awful shops
And go to inns to dine."
What stands out clearly is that Chesterton dealt with the wrong sort of grocer. Most grocers deplore such practices, and indeed have no wish whatever to confuse the housewife in any way. They in fact deplore the use of such misleading words as "giant" and "gargantuan" in order to sell goods which are in wrappers but are neither giant nor gargantuan.
But it appears to me that some housewives insist on being fooled in many instances, and what I am going to question in my reply to this Amendment is whether that insistence, that apparently it is fun to be fooled, can actually be covered by legislation and, in particular, by weights and measures legislation. It seems to be a fact that a certain sort of shopper asks to-day, when buying, for instance, detergents, "What has got fourpence off?", without any reference to the quality of the detergent itself or to whether fourpence-worth of the contents has been removed from the packet. By no means all these so-called sales gimmicks are underhand. Similarly,
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by no means all unorthodox packing is designed to confuse. As one or two examples brought to my notice, there is "Jif" lemon juice which is sold in small plastic lemons; there is "Earl Grey" tea, and there is "Chelsea" corned beef. We feel that to bring in an Amendment like this would in fact prejudice perfectly fair packers who wish to advertise their wares with legitimate but unorthodox packing. It could not be so directed as to cover only those who intentionally confuse the public.
LORD SHEPHERD: My Lords, may I just remind the noble Lord of the words of the Amendment—namely, "falsely or misleadingly"? We do not object to the attractive display of merchandise, but we say that "deceptive" is when it falsely and deliberately misleads.
LORD ST. OSWALD: My advice is that it would be virtually impossible, in point of fact, in every case to divide the two without unfairness to perfectly fair traders. I have mentioned one or two examples. There are also unevenly shaped tins containing ham. I shudder to think what would happen if a haggis came under the description of a pre-pack. It might make more difference to the life of my noble friend beside me than it would to mine.
One of the things that disturb us about this Amendment is that it would give to the Board of Trade sweeping regulatory powers which would be subject only to the annulment procedure once they had been brought into effect, covering a major aspect of everyday trade. The first aspect that we are discussing would cover the nature of all containers or wrappers used for selling any goods, and would, in particular, be designed, as the noble Lord has emphasised, to prohibit "deceptive" containers. In this connection I must ask your Lordships to consider two questions: first, have all the existing conventional weapons of the weights and measures law been tried and failed in any case in which noble Lords think that the new provision would be useful?
The way in which the Bill protects the consumer from being deceived as to the quantity and contents of a package is to ensure that the consumer is informed of the quantity of the goods. There are broadly three ways in which the Fifth

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to the Ninth Schedule, or Orders made under Clause 22, will, we think, achieve this object. The most usual way is to require the container to be marked with the quantity of its content by weight or measure or number, as the case may be. The manner of marking will have to conform to regulations made under subsection (4) of Clause 22. Where I completely agree with the noble Lord is that the manner of marking will have the greatest importance, but I ask him to believe that this can safely be left to regulations. We shall be discussing this in greater detail in his own Amendment, No. 52A, later on in this stage, and I will now dwell on it at this point.
As in the existing regulations applying to pre-packed foods, the regulations would ensure that the markings have to be prominently placed on the container in a manner in which they are capable of being easily read by the public. That is subsection (4) (a) of this clause. Some noble Lords may believe that certain consumers cannot be bothered to read a weight marking—in fact, the noble Lord has himself intimated that as his opinion —but will simply go by the size of the package, and that such consumers must be protected by Board of Trade control over every detail of the packaging. Despite the appreciation that I hope I have shown for the noble Lord's concern and purpose in this matter, I would ask him and his friends to consider, all the same, whether it is not jumping to conclusions to assume that, because a packet is not filled to the brim at the time when the consumer purchases it, this is clear evidence that the packer has been attempting to deceive the consumer. I must, in fact, ask noble Lords to consider certain simple practical points.
In a number of cases where packages are filled to the top by the packer, the contents may shake down and consolidate before reaching the consumer. In other cases, the packer may intentionally and necessarily allow some air space at the top of the container because the contents are liable to swell, owing to changes in humidity and temperature, or because it helps to prevent spilling when the container is opened. The noble Lord may say he is talking only of exaggerated cases where this could not possibly be explained by legitimate necessity. We say that the division between such cases would be too difficult to prove. My
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noble friend Lord Mancroft referred to the desirability of leaving space for cotton wool at the top of bottles of medical tablets. I have seen bottles of medical tablets which were almost half filled with cotton wool. The jar of face cream to which some noble Lords have referred, and which was brandished in my face from the opposite Despatch Box—
LORD LATHAM: Not in the noble Lord's face.
LORD ST. OSWALD: No; not in my face, it is true. But that brings out another practical application. The container was one commonly used in the cosmetic trade, constructed with two separate skins designed to prevent any seepage through the thin plastic inner wall, and also to avoid loss of contents if the outer wall was accidently broken. We should regard that as legitimate packing if it were proved that that was the purpose. Mention of cosmetics may also remind noble Lords that there are certain goods where the containers are made with considerable care and cost so as to be attractive, for example, on a lady's dressing table.
If the regulations which it is proposed the Board of Trade should make under the new paragraph are intended to be framed regardless of these considerations, then in many cases the cost of packaging may be increased; in other cases the containers may burst, and in yet other cases the containers may be much less attractive to the consumer than they are now. If, on the other hand, all these considerations are to be taken into account, the net result is likely to be very small, except that considerable manpower will be devoted to working out regulations in consultation with all the people interested, and in conforming with the letter of these regulations. There will be great scope for technical breach of the regulations, and at the end of the day the consumer is likely to have no advantage, and, indeed, may be faced with a "Board of Trade utility packing" which may not be at all to his taste. This has been described to me by a scrupulously honest grocer as a "1984 pack".
If noble Lords agree, it may be helpful to mention two or three of the contexts in which there has been criticism of what is called deceptive packaging.

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First, cereal breakfast foods. At present most of these are required to be marked with their weight. Under the Bill all those in flake form will have to be sold only in certain specified weights. This, as was explained at the Committee stage, is because certain varieties, like puffs, have a different density, and it is most economic to pack them in the same size of packet as it used for more common flakes. Packets of soap powder and detergents are also often referred to in this connection. At present, these packets are not required to bear a net weight marking, although certain packets have been marked voluntarily in this way, often with some rather qualified indication of weight. Under the Bill they will have to be marked, but they wilt not be required to be sold in specific weights, because some of them shake down and some of them swell, and it is common to use the same size of packet for products of different density and, indeed, different characteristics and uses.
Lastly, I should like to mention again cosmetics, in view of points made by noble Lords at the Committee stage. The Government are at present preparing an Amendment to the Bill which would bring under it a large range of cosmetics, and would also bring toothpaste within the scope of the Eighth Schedule, requiring them to be marked with their contents. In short, the Government oppose this Amendment because we think it unnecessary on top of the provisions we are already making. We believe, moreover, that unless the proposed regulations were quite unreasonably to disregard all considerations of cost and practical convenience, and also the export trade, they would not make any appreciable difference in the protection afforded by the Bill and would merely give manufacturers a whole new set of detailed technical subordinate legislation through which they would have to find their way as best they could. I have been no lengthier than I could help. I was answering a large part of two Amendments, and I have done my best to satisfy the noble Lord as to why we oppose his Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sure we are all very grateful to the noble Lord for the answer he has given my noble
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friend Lord Shepherd. I feel that there are one or two things which ought specifically to be said. First of all, we have not entered into this course of trying to get an Amendment of this kind through simply because we have a political "bee in our bonnet". This is something that has been submitted to Members of the House from the Consumers' Council, because they have had so many complaints, from housewives and others, of the manner in which they have, as they feel, been definitely fooled in the value of the commodity they have purchased, in relation to its apparent size, shape and the like, when looking at the commodity prior to buying it. Therefore I want the noble Lord to understand that this is not a special foible on the part of the Labour Opposition. It is something which comes directly from the Consumers' Council. I believe that we demonstrated by the article which was displayed—not in the noble Lord's face, but near enough for his reasonable inspection—on the last occasion that the package containing the substance to be sold was more than double the size of the space in which the actual commodity was packed and could be exceedingly misleading to a housewife or other lady who was going to buy it. And so the Consumers' Council thought. We have not really had an answer on that point.
Some of us know enough about producing, wholesaling and retailing to be able to deal from experience with practical considerations like weights and measures. We know that some things which look highly desirable have either to be watered down, or at least to carry within them sufficient safeguards to protect those who are in the trade, not because they cannot ultimately meet the situation but because the tolerances for which they have to allow, in order to meet loss of the kind now being brought in, may ultimately lead to an actual advance in the final price to the consumer. It cuts both ways. So we are always very careful, when we are putting up these cases, to consider what are the actual positions of the traders in all stages of producing, wholesaling and retailing that require legitimate protection.
But in regard to these highly deceptive packages, as the noble Lord who replied for the Government showed just now

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quite clearly, there are numbers of commodities in packages that may come within that description. I feel quite sure that my noble friend Lord Stonham, and perhaps myself at a later stage, in different clauses and Amendments dealing with pre-packed commodities and things of that kind to be sold by weight, will have something more to say about them. We shall not be pressing against the interests of traders. We may actually be helping to defend the interests of traders, and the ultimate interest of consumers who would otherwise be mulcted in extra charges for undue tolerances which are allowed for. But in the case of packages of the kind that were shown, or in some cases of detergents and in some cases of cereals and the like, there is not the slightest doubt that there is a very deceptive effect left upon the mind of the consumer when the article is actually being purchased.
There was one word of hope that seemed to come to us towards the end of the noble Lord's remarks, when he said that the Government were preparing Amendments to deal, at any rate in part, with some of the points raised in this connection. But at what stage are they to be submitted to Parliament? After all, we have been thinking about this Bill here since the middle of November, and it is now the end of January. We have had the Second Reading debate and the Committee stage debate, and we are well on with the Report stage. When Will these Amendments be submitted to Parliament—while the Bill is still passing through the House of Lords stages?
LORD JESSEL: My Lords, I think that the noble Lord referred to regulations, not Amendments. That was my understanding. If it is regulations that we are waiting for we shall not get them at this stage.
LORD SILKIN: But regulations will require amendment of the Bill.
LORD ST. OSWALD: My Lords, I believe that I am not allowed to reply. I think that my reply referred to Amendments.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I move that the noble Lord be allowed to reply. Will he please explain it to us?
LORD ST. OSWALD: My Lords, the phrase I used was "Amendment to the
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Bill". What I cannot tell the noble Viscount, I am sorry to say, is at what stage we shall be able to move it. It will come into the Schedules, but whether it will be brought in while the Bill is going through your Lordships' House, I am at present unable to say. The reference was to cosmetics, I think.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, it seems to be rather a confused condition on the part of the thinkers in the Board of Trade in these matters. They have had a very long time to think it over. Parliament has been in Recess from December 21 until January 24. That is a reasonable period for reconsidering the matter. In any case, I would ask the question clearly indicated by the interjection of my noble friend Lord Silkin: what is the difficulty in covering yourself now, so far as Parliament is concerned, first with a short Amendment which will make it necessary for the Board of Trade to submit regulations, and in indicating, roughly at any rate, what it is proposed to cover in the regulations? No regulations will be submitted until the Bill becomes an actual Statute. No draft regulations will appear until then. But surely in considering the passage of a Bill through Parliament we should be quite clear as to what is in the Government's mind.
LORD HAWKE: My Lords, I think it would be wrong to suppose that the interests of consumers are not represented on this side of the House, as well as on the other. One must have very considerable sympathy for the purpose of this Amendment. In fact, when somebody the other day asked me the purpose of the Bill I found myself nonplussed; I really did not know. But one of the main purposes must be to prevent the consumer from being deceived. But the question whether it is a practical legislative possibility to prevent that is a very different question from having sympathy with the end.
LORD SHEPHERD: My Lords, might I assist the noble Lord in this matter? I understand that in the American Acts and in Continental Acts they have a clause very similar to the one I have endeavoured to move this afternoon.
LORD HAWKE: My Lords, that is very interesting, because this one looks

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to me a rather impracticable one. I do not think it is possible to achieve this by detailed regulations of the Board of Trade as to size and shape of the material, et cetera, which can be used for packing anything. I should have thought that the only way to tackle the question of gross deceit is by some general provision that it is illegal to pack goods in such a way as grossly to deceive the consumer as to contents in weight or number. Then it would not be left to the Board of Trade to decide whether or not there had been a breach of those regulations. The courts would have to decide, and there would be some sort of action. It would be rather similar to a passing-off action. I have no experience of a passing-off action in this country, but I have dealt with such actions once or twice in India. There, one went to the court and proved that the other person's goods were in deliberate imitation of one's own, calculated to deceive the consumer. That would be the type of action that would have to be brought by some consumers' association in order to secure any conviction. But I do not believe that any specific regulations of this nature would make the matter any clearer at all. I do not believe they would be any help at all.
My noble friend's answer is that the provisions about net weight are adequate. I would ask him whether he could not go into this a little further and perhaps consider, before the next stage of the Bill, whether my suggestion—namely that it should be an offence to pack in such a container as grossly to deceive the consumer as to its contents by weight or number—is a practicable one, or whether this is the right type of Bill in which to do it. However, I could not support this Amendment.
LORD CHORLEY: My Lords, I must say that I find the attitude of the noble Lord who is replying for the Government in regard to this matter very puzzling. He comes to us with speeches which have obviously been carefully thought out, but they bear little relation to the arguments which are put forward when these Amendments are moved. This was so on the last occasion. On the last occasion he said, in effect, that there was no reason for the Amendment because housewives were intelligent
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people and were not being deceived in this way. Now he comes back this afternoon and says, after making inquiries during the Recess, that he is satisfied that that was not right, and, indeed, that there is a great deal of deception of housewives and, in other cases, arrangements by which housewives are induced to deceive themselves. Surely when he has said that he has given away his case. Surely he has established a case for a real, genuine attempt to handle this problem.
LORD ST. OSWALD: My Lords, if the noble Lord is basing his assertion on the fact that I said there was "a great deal of deception", I am afraid I must point out that I never used that phrase. I said that what I had discovered was that there was deception, and with all honesty I withdrew a short pace on that.
LORD CHORLEY: My Lords, the noble Lord said that he had discovered quite a number of cases. I should have thought that what he said made it perfectly clear that there was a strong case for making a real attempt to deal with this situation. What this Amendment is doing is to offer to the Government additional powers which they can use in the light of experience. We have here a Bill—an important and ambitious Bill—which, when it reaches the Statute Book, is likely to remain there for a very long time without a great deal of amendment. In this particular clause it confers what seem to many people to be rather weak powers on the Board of Trade for the making of regulations, which are limited almost entirely to questions of quantity and weight. Now it may be that the noble Lord's advisers in the Board of Trade say that it would be difficult, as they are at present advised, to make use of the powers which we are asking the Government to give to them: but, in a quite short time, as things develop, they may (and I should think they almost certainly will) find that their armoury is not sufficiently strong to enable them to deal with the sort of matters with which they want to deal. They will then be told, "You had your Bill in 1961, and you must wait now for ten years before you get another one".
It seems to me that the noble Lord does not really understand that what we are doing in this Amendment is to offer to the Board of Trade the power to

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make regulations; we are not actually legislating in regard to these matters. In this Amendment this afternoon we are making provisions which the Board of Trade may use. They need not use all of them; they may use only those parts which experience teaches them can be effectively used: and it may well be that new officials or new members of the Legal Department of the Board of Trade may, in quite a short time, come to an opinion different from that which they have briefed the noble Lord to express to your Lordships this afternoon.
I should have thought that this case was really very well made out. There is clearly a great deal more to be done in the way of regulating the size and shape of containers in such a way as to give protection not only to the housewife but to the children (who were referred to by the noble Duke, the Duke of Atholl, I think, on the last occasion) and to other consumers who can be protected in this sort of way. It seems to me an absurd attitude to take up to say that such people as the Consumers' Council, who have been set up for the purpose of studying problems of this sort, who have given a very great deal of thought and attention to them and who have, after long discussions, arrived at what they think would be useful powers to confer upon the Government Department for the purpose of checking these abuses, should have their views and opinions ignored, in effect, by the Government in regard to these matters, and that this very useful Amendment should be rejected in this sort of way.
LORD DERWENT: My Lords, I feel that, in any case, this Amendment goes much too far, and I believe it to be unworkable, particularly in the words which say that these goods must not be packed in such a way as misleadingly to suggest that they contain something more than they do. I believe that something in the nature of what my noble friend Lord Hawke has suggested is the only answer.
I will take one example only, as cosmetics have been mentioned, and that is the question of bottles of scent. All your Lordships with wives or girl friends know that when one buys a bottle of scent for them there is a very large package, and that, when you open it, there is only a little bottle inside. I am talking about the more expensive scents. My
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Lords, that is quite deliberate. The man who goes in to buy it prefers it like that, because it looks more expensive than it really is. It is partly done, of course, for safe packaging, but it is not only that; it is really done for appearance. It is given to the girl, who of course knows (or who soon knows when she has opened it) that there is only a small bottle inside. But she prefers the present that way because it looks better when she is given it and she can pretend it is more expensive. My Lords, that package is undoubtedly misleading. It is meant to be misleading and it is misleading; hut, evidently, it is what some people want. I think that this Amendment, for various reasons of that kind—I will not keep your Lordships—really goes much too far. I am sure that the answer is some clause whereby an action can be brought and a court can find whether or not a package or an amount has been deliberately misleading; but I do not believe that that can be done by ordinary regulation.
THE DUKE OF ATHOLL: My Lords, I think that probably this Amendment is not entirely practical, but I hope that the people concerned with it will not give up the attempt to find something which will be agreeable, because I feel that there is a very real need for some Amendment on these lines—possibly, as my noble friend Lord Hawke has suggested, giving the courts the power to decide.
I should like to draw one more thing to the attention of your Lordships on this particular question of deception, and that is as to articles which are put into special Christmas wrappings. They appear to come in profusion just about the beginning of December, and the wrapping is double the size of the normal wrapping around the article, but when you open it you find exactly the same bar of soap inside. It probably costs a penny more, or something like that, for the joy of having such a wrapper. With a commodity such as soap, I strongly suspect that 90 per cent. is bought regularly for use in the house and that a very small percentage is in fact used for Christmas presents; therefore these special wrappings are not appreciated. I feel that that is another attempt to persuade the housewife to buy one particular brand of goods as

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opposed to another, and that it is to a certain degree deceptive, though perhaps not deceptive in the way that certain articles in the cosmetic trade and similar things are.
I should also like to plead, once again, for chocolates and children. Chocolate boxes still seem to contain a lot of paper shavings at the bottom, and I feel that this is very deceptive to children, who cannot possibly tell what a pound is but who buy entirely on what the thing looks like.
LORD AUCKLAND: My Lords, I think the essence of this Amendment has much to commend it, but, like other noble Lords on this side of the House, I feel it goes rather too far. It is human nature that a housewife who sees four-pence off one washing powder and five-pence off another is almost invariably going to plump for the one with five-pence off, no matter what Government regulation there may be—and these washing powders very largely contain the same type of material. Basically, there is not very much difference between the contents of any of them; and the whole villain of the piece, really, is this business of four-pence or five-pence off. Why cannot these goods be sold at the proper price? That, my Lords, is what is deceiving the housewife.
LORD SHEPHERD: My Lords, if the noble Lord will forgive my saying so, he is quite right about the fourpence or fivepence off, but the customer is not getting the original amount of soap. It is the same box and it has the price knocked off, but it does not have the same amount of soap.
LORD AUCKLAND: Yes; I would agree with the noble Lord there. Of course, price-fixing is not, as I understand it, within the scope of this Bill, and is another matter. But that, really, is one of the prime deceptions to which the housewife is subjected. These detergents are made primarily by about three main companies, all large companies and all of long experience and integrity. I do not think the manufacturers of washing powders are really intentional deceivers. Such deceivers as there are, are mostly confined to manufacturers of the smaller products and are few in number.
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But I think that, while the Amendment is well meaning, it goes too far in this case.
LORD SILKIN: My Lords, I think that practically everyone who has spoken to this Amendment has the same objective in view, and that is to prevent the housewife from being deceived. The noble Lord who spoke from the Government side considers, I think, that the mere statement on the package of the weight or number of the article will prevent the housewife from any longer being deceived.
LORD ST. OSWALD: "Displayed with sufficient prominence".
LORD SILKIN: My Lords, I am not satisfied that that is the case, and I think most noble Lords would like some further protection. I am impressed by the statements that noble Lords opposite have made to the effect that this Amendment itself is, possibly, not the best machine for providing the further safeguard, and in some respects I think it does go rather far. I think that regulating the size, shape, material, colour, and so on, goes rather far in preventing the housewife from being deceived.
Therefore I would suggest to the Government that they look at this matter again in order to see whether they would not agree that some further safeguard in addition to stating the weight or the contents is necessary where a purchaser is liable to be deceived as to the contents of a package. I have not, of course, consulted with my noble friends on this Amendment, but if the Government are prepared to do that, I should feel satisfied that the general wish of the House had been met. We are really discussing machinery for safeguarding the housewife, and, as I say, I myself am not satisfied that the making of a regulation is necessarily the best way of providing such safeguard. If some other provision can be inserted in the Bill, well and good; but the mere fact that the weight is stated on the package is not conclusive that the purchaser is not being deceived, if the package is otherwise grossly misleading.
6.23 p.m.
LORD SHEPHERD: My Lords, I have no permission, but before I am called upon to make up my mind on this

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Amendment, as my noble friends want me to, I was wondering whether the Government, by leave, could make a statement. I think they must be aware of the broad feeling of the House.
LORD ST. OSWALD: My Lords, I hope the noble Lord knows how much I always wish to meet his wishes, but we have not approached this in any doctrinaire way, and I sincerely hope that I am not to gather from the words of the noble Viscount that I was accusing noble Lords opposite of approaching it in a doctrinaire way. If I had regarded it as a doctrinaire question, I would have spent a great deal less time in grocers' shops during the Christmas Recess. I feel that we have gone into this question as deeply as we can. We have looked at all the arguments of noble Lords, and it is our belief that the weight, prominently displayed—and I emphasise that it must be prominently displayed; the regulations will have the purpose of insisting on that—will be a sufficient safeguard for the housewife.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I do not think we want to prolong the discussion further, but in view of what I said previously about the suggestion that consideration was being given to an Amendment to the Bill which would provide for the making of regulations afterwards—whatever they may be—when one could take account of the various criticisms of that procedure, if I understand that the noble Lord will submit at the Third Reading stage, the necessary covering Amendment under which regulations may be introduced, I think we can let this Amendment go now.
LORD ST. OSWALD: My Lords, I am sure we can consider the making of any regulations, so far as the making of any regulations can meet the points of noble Lords opposite. The noble Lord, Lord Silkin, is quite right in saying that we have the same purpose together in this. There is no division there. We have a different approach. But as far as regulations are concerned, we will do our best. With regard to the reference I made to cosmetics and our intention to introduce something later in the Bill I cannot agree that there has been undue delay. We have to approach for advice the various trade bodies and obtain their opinions,
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and the whole matter has not yet been fully canvassed. Therefore we consider it wrong to put anything in the Bill without canvassing interested parties first.
LORD SHEPHERD: My Lords, in view of the first few words of the last statement, I beg to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.26 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved to omit the first two lines of subsection (5) and to substitute:
"(5) The Board may by order grant and from time to time vary or revoke, with respect to goods or sales of such descriptions as may be specified in the order, exemption, either generally or in such circumstances as may be so specified, from all or any requirements imposed by or under this section; and, until otherwise provided by such an order, the following shall be exempted from all such requirements, that is to say—"
The noble Lord said: With your Lordships' permission I will deal with Amendments Nos. 25 and 26 together, as they are connected. They relate to subsection (5) of Clause 22, which sets out, in paragraphs (a) to (d), the various cases in which the provisions in the Fifth to Ninth Schedules concerning the sale of goods are not to apply. As presently worded it also gives the Board of Trade power, by order, to exempt other goods or sales from those provisions, either generally or in special circumstances. This order-making power confers a flexibility which may be extremely useful in the future, in view of the changes in methods of trading that can take place over a period of years. On consideration, the Government believe that a similar sort of flexibility may also prove useful in respect of the excepted cases specified in paragraphs (a) to (d). As the Bill is at present drafted, however, these exemptions are part of the Bill itself and could be varied only by an amending Act. The purpose of these Amendments, therefore, is to enable these provisions for exemption to be varied by order, if this should prove desirable in the passage of time. Such an order would, by virtue of Clause 55, have to be preceded by consultations with the interests affected and would have to be approved, by a Resolution of each House of Parliament.
The noble Lord, Lord Latham, has an Amendment on the Order Paper following this one to leave out the exception

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set out in paragraph (d) of the subsection, and with your Lordships' permission I should like to speak now about that Amendment, because it has some connection, as he will have realised, with the Amendments I am about to move. Paragraph (d) exempts from the operation of Clause 22 all assortments of articles of food pre-packed together and ready for consumption as a meal. This is intended to cover, for example, anything from a packet of sandwiches to a full-scale luncheon hamper, where it would hardly be reasonable to require the various components to be made up and marked in the manner which the Bill requires when they are sold separately.
In Committee, the noble Lord expressed concern that this was a vaguely drafted provision which might exempt certain articles which ought not to be exempted, such as packets of potato crisps with salt in them. I do not want to go into too much argument here on the merits of that Amendment, but the Government do not believe that it is possible to be more precise than this. Moreover, roughly the same words have been used for many years under existing weights and measures law without causing any difficulty to traders and without exposing the public to fraud. It is conceivable, however, that over a period of years an improved form of wording might suggest itself; and it is also possible that the courts might decide that certain assortments were exempted as a meal, although the Government of the day might nevertheless consider that, in the public interest, they should not be exempted from the operation of Clause 22. In this connection the virtue of the present Amendments is that they would enable orders to be made in future either to improve the wording of paragraph (d) and the three preceding paragraphs, or else vary the circumstances in which these exceptions prevail, or even revoke them. That facility, which my noble friend has power to exercise, should be helpful both to the public and to traders in giving flexibility in the light of experience, and should thus provide a safeguard against any undue rigidity, to which the noble Lord, Lord Latham, referred on Committee stage, which as conditions change might give rise to anomalies and loopholes. We are grate-
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ful to the noble Lord for bringing this possibility to our notice and I hope we have succeeded in meeting the point. I beg to move.
Amendment moved—
Page 21, leave out lines 8 and 9, and insert the said new words.—(Lord St. Oswald.)
On Question, Amendment agreed to.
LORD ST. OSWALD: My Lords, with your Lordships' permission, I will move Amendments Nos. 25 and 26 together, since they both relate to the same provision in Clause 22. This clause gives effect to the various requirements in the Fifth and Ninth Schedules governing the sale and packaging of various goods, and empowers the Board of Trade to make similar requirements by order in respect of any other goods. Subsection 5 (a), to which both of these Amendments relate, exempts from all such requirements goods specially packed for the use of Her Majesty's forces or certain other forces within the United Kingdom, because these forces may wish to have goods, such as food, polishes and soap, packed for their use in a different manner from that laid down in the Bill relating to ordinary civilian use.
In Committee, the noble Lord, Lord Shepherd, inquired about what would be the position if goods specially packed for the forces were subsequently disposed of for civilian use. Clearly, the public need the same protection in this case as they do in respect of goods which reach them through the ordinary channels of distribution, and the Government have looked again at subsection (5) (a) of this clause to see if any clarification of the word is needed. The noble Lord, Lord Shepherd, is not here, and I hope that the wording we have chosen will satisfy him. I feel that it will not be necessary to go into the rather elaborate details of the wording, which I hope will be self-explanatory to your Lordships who have so much experience in legislation of this kind. I beg to move.
Amendments moved—
Page 21, line 10, leave out ("specially pre-packed") and insert ("made up in containers for sale only")
Page 21, line 13, at end insert ("and not sold or offered, exposed or in any person's possession for sale for any other use").—(Lord St. Oswald.)
On Question, Amendments agreed to.
LORD ST. OSWALD: My Lords this Amendment has been tabled for the same reason as a number of others were tabled in Committee, to cover exposure for sale as well as offering for sale. Noble Lords will recall that, in a recent court case relating to flick-knives, it was held that exposure for sale was not the same thing as offering for sale; and accordingly, in all parts of the present Bill where this is relevant, the Government are anxious to ensure that exposure, as well as offering, is dealt with. The Amendment will achieve this in respect of subsection (5) (c) of Clause 22, where the need for an insertion on these lines was overlooked until now. My noble friend Lord Dundee and I would like to apologise to the House for the fact that this particular Amendment was not tabled at the same time as the other similar ones considered at the Committee stage. I beg to move.
Amendment moved—
Page 21, line 23, after ("offered") insert ("exposed").—(Lord St. Oswald.)
LORD HAWKE: My Lords, could the noble Lord tell as exactly what he has in mind? I cannot quite follow what paragraph (c) is intended to cover.
LORD ST. OSWALD: My Lords, I am not quite clear about what my noble friend is asking me. This is a descriptive paragraph, which is as descriptive as I can make it.
LORD HAWKE: My Lords, what type of goods and what type of premises is it particularly designed to deal with? I cannot quite visualise what type of premises it is intended to cover. It is not a public house?
LORD ST. OSWALD: My Lords, I am sorry to be caught at a loss like this, but I cannot specify any more than the Bill attempts in its text to specify. I understand that it is intended to refer mainly to restaurants.
On Question, Amendment agreed to.
6.38 p.m.
LORD LATHAM LORD LATHAM moved, in subsection (5), to leave out paragraph (d). The noble Lord said: My Lords, before I move this Amendment, I should like to make a personal explanation. A little time ago, when we were discussing Clause 19, greatly daring, I corrected the noble Earl, Lord Dundee, in connection with his statement about an Amendment put
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down by my noble friend Lord Burden incorporating a reference to magistrates' courts. I confused that with Clause 46. The noble Earl was quite right and I was quite wrong, and I apologise to him.
With regard to this Amendment, the noble Lord, Lord St. Oswald, has been good enough to answer me in advance, as it were. I do not object to that, but I must say that I was not in any way convinced by his supplementation of what he said on Committee stage. He admitted that the subsection was vaguely drafted and hoped that at same later stage it might be given an element of precision by Government action or otherwise, which is a rather tenuous expectation in any case, or that it might be dealt with in the courts. I understand that, so far as experience goes, we have had no great assistance or comfort from the courts. I am informed that great difficulty has been experienced by those in authority in determining what is a meal under the Shops Act, 1950, Since it has been determined in the High Court that even a raw kipper is a meal, it could be held that a tin of beans containing pork or a packet of potato crisps with salt constituted a meal ready for consumption without being cooked. It seems to me that those are additions to the items that were mentioned when the matter was being discussed in Committee recently.
This exemption from the provisions of Clause 22 is much too wide and will, I am sure, lead to abuse. Moreover, the noble Lord said that the Board could, by order, take out of the exemptions such items or articles as might be decided upon. But as I read the Marshalled List of Amendments, the noble Earl, Lord Dundee, has an Amendment to delete the words from line 30 to line 33. Those lines are as follows:
"and the Board may by order exempt from all or any of the requirements aforesaid, either generally or in such circumstances as may be specified in the order, any other goods or sale so specified."
The deletion of those words is a desirable Amendment. But if that be the case, it seems to me that the Board will then have no power to make orders, as is suggested by the noble Lord, Lord St. Oswald. I should be glad to have some clarification of that point. I beg to move.
Amendment moved—
Page 21, line 26, leave out paragraph (d).—(Lord Latham.)
LORD ST. OSWALD: My Lords, in Committee the noble Lord, Lord Latham, expressed concern at the apparent vagueness of the terms of the exemption contained in the paragraph and at the possibility of its exempting a wider range of food assortments than was intended—such as, he said, potato crisps and salt. As I said earlier in the Amendment I moved to this clause, the Amendment as moved should enable the Government to meet any difficulties which arise in practice in regard to the exceptions to the clause set out in the paragraphs to subsection (5). At that time I also gave a general indication that the Government could not accept fully Lord Latham's original arguments. Admittedly, in connection with other legislation there bas been doubt on occasions about the meaning of "meal", but the courts have indicated that its meaning in any case must depend upon the circumstances—that is to say, for instance, the circumstances of sale—and each case must depend on its merits.
I recall that the noble Lord, Lord Stonham, instanced the case of a punnet of strawberries with cream, and I was unable to understand what he meant by "pre-packed strawberries and cream." The noble Lord explained to me afterwards that what he visualised was a punnet of strawberries with an enclosed carton of cream wrapped up inside. Was that a meal? Taking that as an example, I can tell your Lordships that that would depend on the circumstances of sale. If it were sold in a station buffet, to be taken away and eaten on the train, or in a charabanc, it would be exempted; but if it were sold across the counter of a shop, it would not. We believe that the same must be true of the provision in this Bill, and suggest to your Lordships that the word "meal" is a proper word to use in this context and it is fair to leave its application in any case to depend on the circumstances of that case.
On the Committee stage I described how the Amendment would, in our view, put a most unfair burden upon the packers of such an assortment, and I gave more than one example. If the examples I gave did not convince the noble Lord, Lord Latham, at the time,
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I do not imagine I can convince him by repetition, but will only irritate him, and do not intend to go through them again. Those are the reasons for resisting this Amendment.
LORD LATHAM: My Lords, why should we put the burden upon the consumer rather than put a proper burden on the packer? After all, the packer gets profit from his activities in packing, but the consumer does not. Why should not the consumer be protected and not the packer?
LORD ST. OSWALD: We simply believe that this will be to the general convenience of all.
LORD SHACKLETON: One of the most annoying things in any Committee or Report stage of a Bill is to be told by the Government that we have to wait for the courts to tell us what the Bill we are discussing is going to mean. That is in effect what the noble Lord has said. We fully grant that the examples he has given are of a kind that the Government properly wish to be exempted, but there are likely to be others for which it would be undesirable to provide such exemption, and our complaint is that the Government are not, in fact, going to have the power to do what might be desirable in some cases. I think this is an aspect of the Bill which is likely to give further trouble. We may not perhaps have the opportunity to do much more here, and it will be other Ministers in another place who will have the pleasure of dealing with these queries, but it certainly is a very unhappy and loose part of the Bill.
On Question. Amendment negatived.
LORD AIREDALE LORD AIREDALE had given notice to move in subsection (5) (d) after "ready" to insert "at the time of sale". The noble Lord said: My Lords, I think that the answer given in advance to Amendment No. 28 by the noble Lord, Lord St. Oswald, in moving Amendment No. 24, would be an effective answer to this Amendment, as well. For that reason, I do not need to move the Amendment.
THE EARL OF DUNDEE: My Lords, I beg to move the next Amendment.
LORD LATHAM: My Lords, would the noble Earl explain what is the purpose of this Amendment?
THE EARL OF DUNDEE: My noble friend Lord St. Oswald moved this Amendment together with No. 24.
Amendment moved—
Page 21, leave out lines 30 to 33.—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 24 [Quantity to be stated in writing in certain cases]:
THE EARL OF DUNDEE THE EARL OF DUNDEE moved to add to subsection (2):
"Provided that this subsection shall not apply to any sale by wholesale where, by agreement with the buyer, the quantity of the goods sold is to be determined after their delivery to him."
The noble Earl said: My Lords, this Amendment furnishes an exemption from the requirements of subsection (2)(b) of this clause. The latter requires a statement in writing of the quantity of goods sold by wholesale to be given to the buyer at or before the delivery of the goods to him in all cases where the Bill specifically requires those goods to be sold at wholesale by quantity and where the buyer does not take possession of the goods at the seller's premises. On the Question in Committee that the clause stand part, my noble friend Lord Derwent raised the matter of the practicability of the provisions of the clause in relation to the sale in bulk of such materials as bitumen, grease and heavy fuel oil, which, as he said, were materials delivered in tankers which could not be emptied completely.
We have looked into this matter and find that there are cases in which it is difficult or impossible to ascertain the exact amount of the goods sold until after their delivery to the buyer has been completed, and in which both buyer and seller are content to accept this determination after the event. One example is heavy oil sold wholesale by weight in conformity with the requirements of Part II of the Eighth Schedule. In some cases, a certain amount of oil inevitably adheres to the inside of the delivery tanker, and the only effective way of determining the weight actually delivered is to weigh the tanker when full and then reweigh it empty after it has retuned from the buyer's premises. If the buyer is agreeable to this, it seems reasonable to waive the requirements in subsection (2) which would otherwise
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oblige the seller to operate entirely on the basis of guesswork. I beg to move.
Amendment moved—
Page 23, line 26, at end insert the said proviso.—(The Earl of Dundee.)
LORD DERWENT: My Lords, I am grateful to my noble friend. I would just say that if the buyer does not like the system he will not get the oil; it is the only way of delivering it. I wish to thank my noble friend very much.
On Question, Amendment agreed to.
THE EARL OF DUNDEE: My Lords, this Amendment is consequential on the previous one. I beg to move.
Amendment moved—
Page 24, line 9, leave out from first ("any") to ("paragraphs") and insert ("such goods or sales as are mentioned in").—(The Earl of Dundee.)
On Question, Amendment agreed to.
Clause 25 [Short weight, etc.]:
THE EARL OF DUNDEE THE EARL OF DUNDEE had given Notice of four Amendments the first of which was, in subsection (2), after the first "sale" to insert "or purchase". The noble Earl said: This and the next three Amendments fulfil an undertaking which I gave to the noble Lord, Lord Faringdon, in Committee. The noble Lord moved an Amendment to insert the words "or seller" after "buyer" in line 23, on page 24. The noble Lord withdrew his Amendment on the understanding that I would consider the matter further and move a more suitable Amendment later to give effect to the noble Lord's purpose. These four Amendments which we have now put down close the loophole in the clause as it stands, by which a purchaser would be in a position to defraud a seller in cases where he, the purchaser, himself determines the weight of goods offered to him by the seller. I think it gives effect to the purpose of Lord Faringdon which I agreed to accept. I beg to move.
Amendments moved—
Page 24, line 21, after ("sale") insert ("or purchase")
Page 24, line 24, after ("sold") insert ("or in offering to purchase any goods")
Page 24, line 25, leave out ("who")
Page 24, line 26, leave out from ("mislead") to ("shall") in line 27 and insert ("a person buying or selling goods as to the quantity thereof,").—(The Earl of Dundee.)
On Question, Amendments agreed to.
THE EARL OF DUNDEE: My Lords, this is a drafting Amendment. I beg to move.
Amendment moved—
Page 25, line. 37, leave out from ("any") to ("(b)") in line 38 and insert ("such goods or sales as are mentioned in paragraphs (a) and").—(The Earl of Dundee.)
On Question, Amendment agreed to.
THE EARL OF DUNDEE THE EARL OF DUNDEE had given Notice of three Amendments, the first of which was, in subsection (7)(a), to leave out "of goods" and insert "which is". The noble Earl said: My Lords, this Amendment, together with Amendments Nos. 39 and 40, relate to subsection (7) of Clause 25, which is designed to exempt from the general short weight provisions of this clause sales of goods which are used in constructional work or for manufacture. The present wording of paragraph (a) has caused some apprehension, and we think now that it goes too wide and may bring back within the short weight provision transactions which are intended to be exempted.
For example, Part V of the Eighth Schedule requires cleansing powders, when sold by retail, to be sold only by net weight, and it would seem on the present wording of paragraph (a) of subsection (7) that these goods, even on a wholesale sale for use in a manufacturing business, would fall within paragraph (a) and remain subject to the general short weight provision. That was not the Government's intention. It was the intention that these goods should be covered by paragraph (a) only as respects any sale to which the requirement to sell those goods by quantity expressed in a particular manner applied. The effect of these Amendments is to secure that paragraph (a) will give effect to the Government's intention, and it is therefore limited to the particular sales in question. I beg to move.
Amendments moved—
Page 25, line 40, leave out ("of goods") and insert ("which is")
Page 25, line 40, leave out ("sold") and insert ("made")
Page 25, line 42, leave out ("of goods").—(The Earl of Dundee.)
On Question, Amendments agreed to.
6.57 p.m.
LORD JESSEL LORD JESSEL had given Notice of three Amendments to Clause 25, the first being, after "use" to insert, "or con-
1380
sumption". The noble Lord said: My Lords, with your Lordships' permission I will take Amendments Nos. 41, 42 and 43 together and address my arguments to them at the same time. If these Amendments are accepted, the subsection will read:
"… nothing in this section shall apply to any goods if the sale or carriage in question is with a view to the use or consumption of those goods—

(i) in constructional or demolition work; or

(ii) in manufacturing work, or for incorporation in, goods of a different description,

in the course of carrying on of a business."
Manufacturing industry has no objection at all to—and in fact fully supports—these short-weight provisions, which are obviously for the protection of the general public, but it maintains that there is no need for such provisions in regard to transactions actually between manufacturers. Industrial concerns can, and do, check quantities of goods purchased by them, and if short-weight measure is found then subsequent adjustment is made between the parties. This practice has been accepted by both sellers and buyers for years. Therefore to impose statutory requirements where they are not needed for the protection of industry, or for the general consumer, would, I submit, hamper the supplier by forcing him to take unnecessarily elaborate precautions which would result merely in slowing down production and putting up costs.
The Government have accepted the principle of an exemption for goods in manufacture and have sought to give effect to this principle in Clause 25 (7) of this Bill. My chief criticism of the subsection as at present drafted is that it appears to be unnecessarily restrictive, and perhaps more restrictive than was originally intended. The words
"in the manufacture of, or for incorporation in, goods of a different description"
restrict the exemption of goods ultimately embodied in the manufactured article, and goods used in the course of the manufacturing process or the process ancillary to manufacture might be excluded. The main purpose of my Amendments is to remove all doubt on this complicated matter by ensuring that whenever goods are supplied for use or consumption to manufacturing work they are clearly within the scope of the

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exemption. The words, "use or consumption in manufacturing work" are rather wider than the words "use in the manufacture of goods of a different description". They cover goods such as solvents, which are used or consumed in the course of manufacture or in wholesale processes, which might be outside the scope of the subsection.
Just one word about demolition. The proposed inclusion of demolition in subparagraph (i) of the subsection is perfectly proper and logical. The term, "constructional work" does not cover demolition—at least, unless there is an element of construction involved. In the ordinary meaning of the words, construction and demolition are of course entirely opposite. Both are often undertaken by the same industry, however, and it appears illogical for goods supplied for constructional work to be included for the purposes of this clause if goods supplied for demolition are not. I beg to move the first Amendment.
Amendment moved—
Page 26, line 10, after ("use") insert ("or consumption").—(Lord Jessel.)
THE EARL OF DUNDEE: My Lords, the noble Lord has discussed with this Amendment Nos. 42 and 43, and I take it that his subsequent Amendments, Nos. 50, 51 and 52, would also be consequential on this. I appreciate what my noble friend has said, that it is often unnecessary to give protection against short weight or measure in transactions involving the supply of goods to industrial consumers who are in a position to safeguard their own interests; and the noble Lord has given a number of examples of that. I think there are objections to these particular Amendments. For instance, the word "consumption" in line 10 does not appear to add very much to the word "use" in that line, and might, indeed, even limit its meaning. As to the word "demolition", we are not quite clear whether there are, in fact, many goods sold by quantity which are used in demolition. We should like to consider actual cases.
As to the words "manufacturing work", which the noble Lord proposes to substitute in line 12 for "in the manufacture of", I am not quite sure if they go wider, or, if so, how wide they go. Then their effect on the immediate following words, "for incorporation in,
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goods of a different description", is not, I think, quite clear. We are certainly not opposed to a change in the wording of lines 9 to 14 on page 26, however, and the industries likely to be most affected have been invited to send details of cases in which the present wording of these lines might create practical difficulties. The Government would be glad to consider such Amendments as can be made to cover them without withdrawing the protection which the clause affords generally to wholesalers and retailers and consumers, and to large bulk purchasers, such as local authorities. We will consider that either between now and Third Reading or in another place, if the noble Lord will agree to that course.
LORD JESSEL: I am very grateful to the noble Lord. Of course I am not wedded to my wording. As he has been kind enough to say he accepts the principle behind the suggested Amendments, I beg leave to withdraw this Amendment, and will not move the next two.
Amendment, by leave, withdrawn.
Clause 26:
Pleading of warranty as defence
26.—(1) Subject to the provisions of this section, in any proceedings for an offence under this Part of this Act or any instrument made thereunder, being an offence relating to the quantity or pre-packing of any goods, it shall be a defence for the person charged to prove—
(c) that he took all reasonable steps to check, and did in fact believe in, the accuracy of the statement contained in the warranty; and
LORD DERWENT LORD DERWENT moved, in subsection (1), at the beginning of paragraph (c) to insert
"in the case of a warranty given by a person outside the United Kingdom,".
The noble Lord said: My Lords, this Amendment is one of very great importance, I think, to all retailers. The clause as it stands goes a long way towards abolishing the defence of warranty for a retailer. At the present time the defence of warranty in this country does not contain any requirement for checking, which appears in this subsection, and it is frequently quite impracticable for a retailer to cheek the contents of pre-packed goods—for example, tinned goods —without destroying the merchandise.
I know that the Board will probably say, if this clause stays as it is, that the phrase, "all reasonable steps to check", and so on, would cover the retailer. But it is not the Board of Trade that brings the prosecutions; it is the local authorities at the request of the inspectors. And it frequently happens in court that the prosecution says that no steps have been taken to carry out the requirements of the law. The requirements of the law in this case are for checking, and in so far as goods are concerned where the manufacturers and packers are in this country the checking, and therefore the virtual doing away with the defence of warranty by the retailer, ought not to be brought to that extent into effect; it is the manufacturer at an earlier stage who is responsible. When it comes to a retailer buying imported goods, where the manufacturer is out of this country, then I think it is perfectly reasonable that the retailer, the purchaser, should take some steps, including checking, to see that the goods are as described. But where the manufacturer is in this country it seems to me that this clause, as it stands, virtually does away with the defence of warranty for the retailer. I beg to move.
Amendment moved—
Page 26, line 34, at beginning insert ("in case of a warranty given by a person outside the United Kingdom,").—(Lord Derwent.)
THE EARL OF DUNDEE: My Lords, this is, I think, a new proposal which was not discussed in Committee. As my noble friend has said, it is true that under the Food and Drugs Act, 1955, which is our most recent instrument for protecting the consumer in these matters, the retailer has himself to take steps to implement the warranty which has been supplied only in the case of goods which come from abroad, and not in the case of goods which he buys in the United Kingdom. But, of course, that was not the case under the Food Act, 1926. The reason why this requirement is not in the 1955 Act is that the Food and Drugs Act, 1955, concerns quality just as much as quantity, although it is the most recent instrument for all kinds of protection at the moment. In the case of guarantees of quality, which often go with Quantity, it obviously would not be practicable for
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the retailer to take steps himself to verify the statements that have been made to to him by the wholesale supplier.
We think that if we were to continue that in this Weights and Measures Bill, which applies only to quantity, it would reduce the protection which is afforded to the consumer. The retailer might occasionally sell some pre-packs from some less well-known supplier—possibly someone who comes under the class sometimes called the "fly-by-night" trader, who shifts from one business to another very quickly: he might not be a well-known trader with a reputation. Or the retailer might receive from his ordinary suppliers goods which have been damaged in some way in transit. We quite realise, of course, that there are many cases, and that it would be quite unreasonable in the case of some pre-packed goods for the retailer to check the warranty. But we also think that he should not be able to invoke the defence of warranty, if the goods are deficient, simply by sitting back and doing nothing to make sure that the warranty is right.
He has only to take reasonable steps. I think the word "reasonable" is the best protection for the person who might be prosecuted. He has not to take efficient or effective steps, but only "reasonable" steps. Opening a package which could not be repacked again would not be a reasonable step unless he was satisfied in the case of a large quantity of goods that there was reason to suspect they were under a false warranty. Then it might be considered reasonable for him to open one or two in order to see if there were any samples which were under weight. But I think that the word reasonable" is usually a sufficient protection. We do not expect him to do anything which is unreasonable. We only want him to take some steps to look at goods which he has got, say, from a passing lorry, the warranty in which consists of something which could be written out by the man driving the lorry, and not simply feel that in every case he can sit back and say, "There has been a warranty and I am not going to do anything about it." I think that would reduce the protection which we want to give to the consumer, and in those circumstances I think my noble friend might perhaps consider not pressing his Amendment.
LORD DERWENT: My Lords, before my noble friend sits down, may I point out that he referred to the 1926 Act, which I think did not deal with quality. According to the Act, the retailer is required to have no reason to believe that the article or its wrapper or container did not comply with what was contained thereon. There is nothing to do with checking. That is virtually impossible. What is a retailer to do who is "run in" because his goods have not been checked, and the prosecution then say in court, "He took no steps to check. It is in the Act"? I am sure that it is this word "checked" which is the trouble. It is not any question of a warranty. I think it is of the utmost importance that at any rate that word should come out.
THE EARL OF DUNDEE: My Lords, I will see whether it is still possible to improve the wording. All I would say is that in order to protect the consumer we think it is reasonable to provide in some cases that the retailer should not be entirely exempt from the duty of checking up on his warranty simply because the warranty is there.
7.13 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am extremely interested, in the argument of Lord Derwent, and I think he has a case. As I see it, what he seeks to do is to amend the proposal in the Bill by confining it to cases where a wholesaler is not in this country. It brings to one's mind a number of practices that go on. You may get a job lot—a consignment of canned goods which have not been sold, and have been bought by somebody who acts as a sort of commercial traveller or commission agent. That job lot may be bought in quantities of 1,000 or 2,000 cans, and there is not much information as to whether it is still in good condition or not. If he were to say that he had a warranty from somebody abroad, and this would be the only excuse that the retailer had, it would leave him in a very poor position, if it were not made perfectly clear in the Statute that when in such cases he is not buying through a responsible wholesaler in this country this exemption would not operate and that he would have actually to sample goods although they are odd job lots. I think that we should make
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sure that he is giving a square deal to the consumer.
I should have thought that there is nothing derogatory to the purpose of the clause at large, or to the consumer, in accepting Lord Derwent's Amendment. Where you have responsible wholesalers in this country who are in a large way of business and they give a warranty, then I think the retailer ought to be able to stand on that warranty. I think that is the main intention of the clause as it operates now. But where, for various reasons, you get odd lots appearing from abroad, I want to see that the consumer is protected from any lack of check.
EARL OF DUNDEE: That is why we do not think we can accept the Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I think you could accept it.
LORD SILKIN: My Lords, I wonder whether it is due to the lateness of the hour, to the length of time that we have been sitting, or to the atmosphere in this Chamber, but it seems to me that the effect of this Amendment would be to deprive all retailers who are dealing with people within the country of the protection of a defence in respect of warranty. It would be limited then only to cases where the goods are purchased from abroad. Is not that so? By introducing these words the defence would apply only to that limited class of case where the goods were purchased from abroad. If I am right in my interpretation, is that what the noble Lord wants?
LORD DERWENT: My Lords, with the permission of the House, may I say that I do not think that is the effect; but who am I to argue on legal interpretations with the noble Lord, Lord Silkin? I think that if the clause were taken out there would still be a defence in regard to warranty, but of course not under that subsection. It would still lie. It would still be there. But I maintain that this clause as it stands takes it away from the retailer. If my Amendment went in under paragraph (c), which is a limited paragraph it would deal with warranty only on those goods purchased abroad, but as it would be dealing only with goods purchased abroad it would not affect a defence in regard to home goods which the retailer would have anyway. I think

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that is the argument. I do not want to go on prolonging this discussion at the moment. May I thank the noble Viscount the Leader of the Opposition for his support? He knows much more than I about these things. On the understanding which I have been given, that my noble friend is going to look at this question again to see whether we can get over our difficulty—I believe that was the undertaking—before Third Reading, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 27 [Additional defences and safeguards for Traders]:
7.19 p.m.
THE EARL OF DUNDEE: My Lords, subsection (3) of Clause 27 provides a defence for giving over-weight. It says:
"it shall be a defence for the person charged to prove that the excess was reasonable and necessary in order to avoid a further offence arising at a subsequent time by reason of the goods having by then become deficient in quantity".
We think it is desirable to make that a little more comprehensive. Therefore we are proposing to take out all words after "offence" and to substitute:
"attributable to the taking of measures reasonably necessary in order to avoid the commission of an offence in respect of a deficiency in those or other goods."
That would cover the case in which a mechanical pre-packer which has a slight variation in the weight which it packs might have to be set well above the average in order to be sure that nothing would be deficient. The result might be that some would be a little over-weight —perhaps sufficiently over-weight to put the retailer in jeopardy of prosecution. I beg to move.
Amendment moved—
Page 28, leave out lines 20 to 22 and insert ("attributable to the taking of measures reasonably necessary in order to avoid the commission of an offence in respect of a deficiency in those of other goods.")—(The Earl of Dundee.)
On Question, Amendment agreed to
THE EARL OF DUNDEE THE EARL OF DUNDEE moved in subsection (4) to leave out the opening words, "In any" and to insert instead "If". The noble Earl said: The next three Amendments, Nos. 46, 47 and 48, go together. They are all designed to meet what was said by a number of your Lordships about a reasonable sample
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being taken. I believe the Amendment actually moved was in the name of my noble friend Lord Spens, but there were two or three noble Lords opposite who wished to bring up the same point. These Amendments, Nos. 46 to 48, are designed to cover the matters about which concern was expressed by your Lordships on the Committee stage.
First of all, some of your Lordships were afraid that the clause as drafted did not impose a sufficiently clear obligation upon an inspector to test a reasonable sample of pre-packed goods or similar articles if he were, in fact, able to do so, as would normally be the case when testing such goods in a shop or upon wholesale premises. The Amendment achieves this by ensuring that no conviction can be obtained in respect of any article unless a reasonable number of similar articles are tested wherever they are available for testing, on the same occasion; and the court is required to have regard to the average quantity of all the articles so tested. Your Lordships will appreciate, however, that the possibility must be left open for a conviction Where the inspector finds that the deficient article is the only one of its kind in the shop, or where it is brought to him by a member of the public after sale and in circumstances which do not allow similar articles of the same kind to be tested.
The other point was whether the clause as directed made it sufficiently clear that in all prosecutions in respect to articles to which this clause applies the court should have regard generally to all the circumstances of the case, whether the prosecution is in respect of a single article or a number of articles. The Government consider that the clause as originally drafted had this effect; but in the light of the discussion in Committee we see considerable advantage in putting the matter beyond all doubt, as is done in this Amendment. I see both the noble Lords, Lord Shepherd, and Lord Silkin, on the Bench opposite. At the end of our discussion they took a slightly different view about what should be done. I hope that these Amendments will achieve a reasonable compromise which will satisfy both noble Lords. I beg to move Amendment No. 46.
Amendment moved—
Page 28, line 23, leave out ("In any") and insert ("If").—(The Earl of Dundee.)
LORD HAWKE: My Lords, I thank the noble Earl for having met a point which I believe I raised originally. It seemed entirely wrong to me that it should be an offence to give anybody over-weight; and it would appear that the vast majority of cases are likely to be covered by this clause. Incidentally, your Lordships may have read recently in one of the Sunday newpapers of a baker who was said to have been fined for supplying over-weight. Whether this is the old case that we have all kept on quoting from time to time on this Bill, or a new one, I do not know. At any rate, it appears from this Amendment as drafted that in future a baker will have very much less to fear than he has at the moment.
On Question, Amendment agreed to.
THE EARL OF DUNDEE: I beg to move this Amendment.
Amendment moved—
Page 28, line 24, leave out ("being an offence").—(The Earl of Dundee.)
On Question, Amendment agreed to.
THE EARL OF DUNDEE: I beg to move.
Amendment moved—
Page 28, leave out lines 32 to 43 and insert ("are brought with respect to any article, and it is proved that, on the occasion on which that article was tested, other articles of the same kind, being articles which, or articles containing goods which, had been sold by the person charged or were in that person's possession for sale, were available for testing, the person charged shall not he convicted of such an offence with respect to that article unless a reasonable number of those other articles was also tested; and in any proceedings for such an offence the court—

(i) if the proceedings are with respect to one or more of a number of articles tested on the same occasion, shall have regard to the average quantity in all the articles tested;

(ii) if the proceedings are with respect to a single article, shall disregard any inconsiderable deficiency or excess; and

(iii) shall have regard generally to all the circumstances of the case.")—(The Earl of Dundee.)

On Question, Amendment agreed to.
LORD SHEPHERD LORD SHEPHERD moved to add to the clause:
"() For the purposes of this Act and of any instrument made thereunder, goods or containers shall be deemed not to be marked with a weight or quantity unless they are clearly and prominently so marked."
The noble Lord said: I believe this Amendment is perfectly clear and does not require a great deal of explanation of what it would do. I put the Amendment down because I could not find in the Bill anything which laid down that weights and quantities which are required to be shown on many articles should be stamped clearly and legibly on the article. I believe that this is of great importance. At the moment many articles are being sold with net weights stamped on the label. Many markings are very small in size and there could be many abuses in this matter. I am thinking, also, of trade marks.
There is a further aspect which emphasises the necessity for this. Certain goods coming from what was called the Empire are required to be marked "Empire made" on the label, but many times one will find these words in a scroll or so designed that one cannot see the words "Empire made"; and these goods are being passed off as British goods. I think it would be quite wrong if we were to pass this Bill saying that these goods should have their net weight marked but with no requirement that the markings should be clear. I beg to move.
Amendment moved—
Page 33, line 27, at end insert the said new subsection.—(Lord Shepherd.)
LORD ST. OSWALD: Clause 34 as it stands is concerned with specifying certain ways in which the quantity of goods shall be deemed to have been made known to the buyer and with defining the procedure for "weighing in the presence of" the buyer. To these provisions the noble Lord, Lord Shepherd, proposes to add a declaratory provision to the effect that goods or containers shall be deemed to have been marked with their quantity for the purposes of the Bill only if the marking is clear and prominent. I hope it is clear from what I have said on an earlier Amendment that we fully support his objective.
The marking of quantity on pre-packed goods is one of the most important aspects of consumer protection under this Bill; and clearly the purpose of this will, as he says, be frustrated unless such markings are clear and prominent, so that the public can see at a glance what the

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quantity is. However, the Bill already enables this objective to be achieved by a rather different method, which renders the noble Lord's Amendment unnecessary. The relevant passage in the Bill is subsection (4) (a) of Clause 22 which empowers the Board of Trade to make regulations as to the manner of marking the quantity of any containers which are required to be so marked, either by virtue of the Fifth to Ninth Schedules or by virtue of an order made under Clause 22.
This power will be used to ensure that the markings are made in a clear and prominent manner; and indeed, following the broad pattern of the existing Marking Regulations governing pre-packed foods, it is likely that the regulations will have to go into such detail as the need for contrasting colours as between the lettering and its background and the permissibility of putting the markings on stoppers and lids, of using methods of embossing the markings, giving metric equivalents, and so on. Also, consideration is already being given by the Board of Trade as to whether the marking might, for example, be required in certain cases to be on the main advertisement panel of the container.
The noble Lord thus may be assured that the objective of his Amendment will be fully achieved by virtue of the regulations to be made under subsection (4) of Clause 22. Despite the complete identity of views between us on the objective, our objection to adopting his Amendment is that, being in very general terms, it would in fact not itself give all the protection that the public need, and there might be the danger that, being enshrined in the text of the Bill, its generality might be held by the courts to override any of the detailed provisions that will need to be made in the marking regulations. On the assurances given now and previously on the Government's sympathy with the objective, I hope the noble Lord may see his way to withdraw the Amendment.
LORD SHEPHERD: My Lords, I am extremely gratified that the last few words of to-day's Sitting should be those which we have just had. I am very grateful, and am sure that they will make all the difference to the carrying out of
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this Bill I beg leave to withdraw the Amendment.
THE EARL OF DUNDEE: My Lords, it is now half past seven, and I think that the noble Lord, Lord Latham, might be interested in the next Amendment I have on the Paper. I will therefore, with your Lordships' permission, move that consideration of the Bill be now adjourned.
Moved, that consideration of the Bill be now adjourned.—(The Earl of Dundee.)
On Question, Motion agreed to.

ALLHALLOWS STAINING CHURCHYARD BILL [H.L.]
BERKSHIRE AND BUCKINGHAMSHIRE COUNTY COUNCILS (WINDSOR-ETON BRIDGE &c.) BILL [H.L.]
BRISTOL CORPORATION BILL [H.L.]
CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
DEVON COUNTY COUNCIL BILL [H.L.]
GREAT NORTHERN LONDON CEMETERY COMPANY BILL [H.L.]
LANCASHIRE QUARTER SESSIONS BILL [H.L.]
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
PLYMOUTH CORPORATION (HARROWBEER AERODROME) BILL [H.L.]
POOLE CORPORATION BILL [H.L.]
RIO TINTO RHODESIAN MINING LIMITED BILL [H.L.]
RIVER WEAR WATCH (DISSOLUTION) BILL [H.L.]
SAINT BENET SHEREHOG CHURCHYARD BILL [H.L.]
SAINT PANCRAS, PANCRAS LANE CHURCHYARD BILL [H.L.]
SHAKESPEARE BIRTHPLACE &c. TRUST BILL [H.L.]
SUTTON COLDFIELD CORPORATION BILL [H.L.]
UNITED MANCHESTER HOSPITALS BILL [H.L.]
Presented, and read 1a.

  ARABIAN PENINSULA SERVICE MEDALS
  ARABIAN PENINSULA SERVICE MEDALS