Sitting of 25 June 1963

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [Lords]
Read the Third time and passed, with Amendments.
LONDON COUNTY COUNCIL (MONEY) BILL
Read the Third time and passed.
DURHAM COUNTY COUNCIL BILL [Lords]
To be read a Second time upon Thursday.
CLYWEDOG RESERVOIR JOINT AUTHORITY BILL [Lords] (by Order)
Consideration, as amended, deferred till Tomorow.
GLASGOW CORPORATION ORDER CONFIRMATION BILL
Considered; to be read the Third time Tomorrow.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Aid to Under-Developed Countries
    Mr. Stratton Millsasked the Chancellor of the Exchequer how much aid for under-developed countries under the recently announced £10 million scheme has been allocated to date; and how much is being provided by Northern Ireland firms.
    The Financial Secretary to the Treasury (Mr. Anthony Barber): Offers amounting to some £15 million have been made. Firm orders have so far been placed in respect of £3 million. The particular firm with which the order is placed is a matter for the recipient Government, and I understand that no order has yet been placed in Northern Ireland.
    Mr. Stratton Mills: Is it the Government's intention that some of this money should be used by firms in Northern Ireland? If so, what steps are being taken to publicise the operation of these facilities which the Government have put forward in this very welcome and sensible scheme?
    Mr. Barber: I think my hon. Friend will agree that the choice of supplier must remain a matter for the recipient government, but I can see no reason why Northern Ireland should not obtain a share of the orders.

    New Universities
    Dr. Brayasked the Chancellor of the Exchequer when Her Majesty's Government expect to consider the case for the establishment of further new universities.
    The Chancellor of the Exchequer (Mr. Reginald Maudling): When we have the report of the Robbins Committee.
    Dr. Bray: Is the right hon. Gentleman aware that only two of the seven new universities so far approved are to be in the North? Is he further aware that in the 1961 Report of the University Grants Committee the Committee observed that the presence of industries would be of material advantage to a new university, and yet only one of the seven is in anything which could conceivably be called an industrial area? Will he, therefore, undertake that the Government will give speedy consideration to the Robbins Committee's Report when it comes out and integrate their action with a regional development policy?
    Mr. Maudling: I agree with the hon. Member about this. The Robbins Report will be of enormous importance, but I should not like to anticipate it in any way.
    Mr. Callaghan: Is the right hon. Gentleman aware that in Wales last September one young person in every four who was qualified to go to a university could not get a place? How is it that after twelve years of Conservative rule the Government have allowed matters to get to the stage where they have to wait for the Robbins Report before young people who are qualified can go to a university?
    Mr. Maudling: The hon. Gentleman talks about what has happened under

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    Conservative rule, but he should compare the number of university students now with the number a few years ago.

    Expenses (Form P.11D)
    Mr. Stratton Millsasked the Chancellor of the Exchequer what percentage of companies had not returned to the Inland Revenue by 5th May the form P.11.D, relating to company directors' and company executives' expenses for 1962–63; and if he will make a statement.
    Mr. Barber: I am afraid that this information is not available; and I do not think that a special inquiry to obtain it could be justified.
    Mr. Stratton Mills: Is my hon. Friend aware of the great difficulty which small firms have in getting this information as quickly as 5th May each year? Would he look at the possibility of having this form left over until the auditors have prepared the annual accounts and have it done at that stage?
    Mr. Barber: I will consider any representations on this matter, but I think that the present arrangements will prove to be reasonable, although there may have been some difficulty on the first occasion when the form has had to be completed. As I think my hon. Friend will know, the Inland Revenue has been very reasonable about those people who provided good reasons for not being able to fill in the form in the time stipulated, but certainly we will keep this matter in mind.
    Mr. Channon: Does my hon. Friend think it right that company secretaries should be the only people authorised to complete this form and that they should be involved? Would it not be fairer for some other person to do it?
    Mr. Barber: I would have thought that company secretaries were the appropriate people to do the work, but if my hon. Friend has any suggestion and will write to me, I will certainly consider it.

    Pottery (Tax)
    Mr. Swinglerasked the Chancellor of the Exchequer what revenue has been derived from Purchase Tax on pottery
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    in each of the last 10 years; and what is his present estimate of the annual yield.
    Mr. Maudling: The annual yield from Purchase Tax on pottery is estimated to be about £2½ million. With permission, I will circulate in the Official Report information about the revenue from Purchase Tax on pottery for previous years.
    Mr. Swingler: Is the right hon. Gentleman aware that over most of the period mentioned in the Question the pottery industry has been a contracting one and an industry with a declining labour force? As the right hon. Gentleman has refused to widen the scope of his concessions to areas of medium unemployment, will he now consider helping the pottery industry by abolishing this tax?
    Mr. Maudling: The tax on this range was discussed at length during the Committee stage of the Finance Bill. My right hon. Friend the Chief Secretary dealt with it very thoroughly on that occasion.
    Following is the information:
    Most pottery was not charged with Purchase Tax before October, 1955,and there are no figures of tax revenue from pottery before that date. Purchase Tax receipts from pottery since 1955 are estimated to have been approximately as follows:

    million

    1955–56

    £1

    1956–57

    £5¼

    1957–58

    £3¾

    1958–59

    £3¼

    1959–60

    £3

    1960–61

    £3

    1961–62

    £3¼

    1962–63

    £2¾

    University Building Schemes
    Mr. Boydenasked the Chancellor of the Exchequer if he will publish a list of all major university building schemes which were postponed for six months or more because of the cuts in grant allocations, with an indication as to the effect the restored grants will have on the building timetable for these projects.
    Mr. Barber: I cannot accept the implication that there have been any cuts in university capital allocations since all loss of value in the original 4-year building programme towards the target of 150,000 students in 1966–67 has now been made good by supplementary allocation.
    Mr. Boyden: Has the hon. Gentleman seen the last report of the Association of University Teachers in which many universities are listed as having had to postpone building plans for six months, twelve months, and that sort of thing, and which gives specific details of where they have been held up? If I send the hon. Gentleman a copy of the report, will he comment on its accuracy or otherwise?
    Mr. Barber: Yes, of course. As the hon. Gentleman must know, building programmes are under constant review by the universities and by the University Grants Committee, and there are inevitable changes in plans and priorities. There are many possible reasons for postponements. It is true that the main factor outside the universities' control has been the increase in building costs, but this has been met by the addition of £5 million to the £25 million programme approved for 1963. The authorised building programme has risen from £3·8 million in 1956 to £30 million this year, and next year it will be £33½ million.
    Mr. Boyden: Has the hon. Gentleman seen the last report of the Principal of London University in which he says that repairs and maintenance have had to be postponed because of the lack of money, and also that some of the new university buildings have not been brought into use because of the shortage of funds?
    Mr. Barber: There was, of course, some delay, but it is not true to suggest that it was very serious. All the items concerned—which were very few—have now been restored to the programme.

    University Teachers
    Mr. Boydenasked the Chancellor of the Exchequer, in view of the urgency of recruiting additional university teachers to cope with increasing student numbers, what plans he is making to improve the scholarships and conditions of post-graduate students, and to increase their numbers.
    Mr. Barber: Expansion of student numbers at universities and Colleges of Advanced Technology in recent years has been accompanied by a more than proportionate increase in the numbers of post-graduate students, and I have no doubt that this trend will continue. Its strength will depend among other factors
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    on the universities themselves in making their plans for the development of post-graduate studies.
    Mr. Boyden: Does not the hon. Gentleman appreciate that this is the group of people from whom teachers for the new universities are to be found, and that therefore this is of vital importance in the expansion of the universities? Does the hon. Gentleman recognise that generally awards for married post-graduate students, the remuneration they get for part-time teaching, and the accommodation that is provided, are totally inadequate for the expansion that we require?
    Mr. Barber: Of course, I accept the importance of post-graduate university studies. The number of university staff increased from 12,921 to 13,824 between autumn 1961 and autumn 1962, that is, an increase of 7 per cent., while student numbers grew by 4·7 per cent. in the same period. On the second point raised by the hon. Gentleman, I would remind the House that the number of awards to post-graduate university students has risen from 1,143 in 1957 to 2,100 in the current academic year, and it will rise by well over 300 in the next academic year.
    Mr. Callaghan: Is the hon. Gentleman aware that this recital of statistics does not necessarily deal with the situation? Can he tell us whether any responsibility is laid on anyone to ensure that the group of undergraduates who will be going to universities over the next two or three years will find the teachers there, and whose responsibility it is to satisfy himself—and is it being carried out—that there will be a reasonable relationship between post-graduate students who have to teach and undergraduates who will be going to these expanding universities?
    Mr. Barber: I am sorry if the hon. Gentleman does not like the statistics. I should have thought that they would have been welcome to anybody who had the well-being of universities at heart. In answer to the hon. Gentleman's point, perhaps I might give him two more statistics which I think will convince him that we are doing pretty well. The student-staff ratio has been maintained at very nearly the 1954–55 level. A figure of 10 to 1 for 1961–62 was an improvement on the figure for 1938–39.
    Mr. Callaghan: With respect, that is not an answer to the question I asked. Everyone knows that there will be a substantial increase in the number of university undergraduates. I am asking whose responsibility it is to see that that increase will be reflected in the number of teachers? Has the hon. Gentleman satisfied himself that they will exist, and can he please tell us whether these undergraduates can look forward to proper training and teaching when they get to the universities?
    Mr. Barber: I should have thought that this followed from the figures which I have given, because, as I have tried to point out, the staff-student ratio has improved.
    Mr. Callaghan indicated dissent.
    Mr. Barber: it is no good the hon. Gentleman shaking his head. The facts which I have given are true.

    Business Administration Courses
    Mr. Sydney Irvingasked the Chancellor of the Exchequer what steps are being taken to encourage courses and training in business administration.
    Mr. Maudling: I would refer the hon. Member to the Answer which my right hon. Friend the Chief Secretary gave to the hon. Member for Holborn and St. Pancras, South (Mr. G. Johnson Smith) on 23rd May.
    Mr. Irving: Is the right hon. Gentleman aware that it has been said recently that out of 450,000 managers in British industry today not more than possibly 1 per cent. have had management training? Is the right hon. Gentleman satisfied that either the University Grants Committee or the universities themselves are giving enough attention to this matter, and will he urge them to review future plns to include more courses on business administration as are provided, for example, at Harvard in its education service, for the future?
    Mr. Maudling: I agree with what the hon. Gentleman says. A great deal is going on on this front, but I accept the importance of doing even more if possible.
    Mr. Gresham Cooke: Will my right hon. Friend bear in mind that there is a good deal of work being done by univer-
    1110
    sities and by the Administrative Staff College at Henley in connection with business administration, and that probably the most effective course would be to expand that sort of work all over the country rather than to set up a big new organisation?
    Mr. Maudling: It may well be the most practical way of doing it, but I think that we should examine all the possibilities.

    Customs (Impounded Clocks and Watches)
    Mr. Ridleyasked the Chancellor of the Exchequer if he will take steps to provide that clocks and watches impounded by Her Majesty's Customs and Excise officers are given to underdeveloped countries.
    Mr. Maudling: No, Sir. I do not consider that this would be a suitable form of aid.
    Mr. Ridley: But is my right hon. Friend aware that these sales of smuggled watches are doing great harm to the home watch trade, not least because it becomes impossible to distinguish between smuggled watches and those found and resold by Customs? Would not it be a handy little bit of augmentation to our overseas aid if the market at home wore protected and these underdeveloped countries got the benefit of free watches?
    Mr. Maudling: I do not think that it would present a good image of our aid policy to give things away because they are embarrassing us. I do not think that the embarrassment caused to the trade is very great. I am told that last year actual sales by Customs amounted to only 1 per cent. of the ordinary import trade, so I think that the embarrassment caused can be exaggerated.

    Trading Profits
    Mr. Sydney Irvingasked the Chancellor of the Exchequer what was the percentage change in gross trading profits in 1962 as against 1961; and how this compared with dividend distribution for these periods.
    Mr. Maudling: Full information is not yet available but, on the basis of preliminary estimates, gross trading profits

    1111
    of companies in 1962 were about one-half of 1 per cent. lower than in 1961. Payments of ordinary dividends are estimated to have been about 1½ per cent, higher in 1962 than in 1961.
    Mr. Irvine: In view of the figures, does the right hon. Gentleman think that this section of the public, the shareholders, was expecting the same sort of sacrifice as the Government were demanding from other sections of the public? Does not the right hon. Gentleman realise that he will never get a full or united effort from the country, which is necessary for our survival, unless both sacrifices and awards are more equitably shared than is the case now?
    Mr. Maudling: I think that the hon. Gentleman must have prepared that supplementary question before he heard my Answer.
    Sir C. Osborne: Will my right hon. Friend give the figure for the increase in wages and salaries between the two years, which would, I think, show that shareholders got a far smaller increase?
    Mr. Maudling: I think that for a comparison one wants a pretty wide range of figures. If asked the question, I shall be glad to give it.

    Committee on Decimal Coinage (Report)
    Mr. Proudfootasked the Chancellor of the Exchequer if he will announce the date when the Report of the Committee on Decimal Coinage will be available.
    Mr. Barber: I am sorry to have to tell my hon. Friend that the Committee is taking longer over its task than it expected, and I am afraid that, with the best will in the world, the Report is unlikely to be available before the middle of September.
    Mr. Proudfoot: Will not my hon. Friend agree that this is a great length of time in which to prepare the Report when the Committee has such good guidelines to study as the reports given to the Australian Government, the New Zealand Government and the South African Government, and even a report to our own chambers of commerce?
    Mr. Barber: I recognise that the Committee has had the benefit of most
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    valuable and informed advice, including that given by my hon. Friend the Member for Cleveland (Mr. Proudfoot), but so far as we can tell the Report will not be available before the end of July, and I am told that the time required after that for publication is likely to be about six weeks. That is why I mentioned the middle of September.
    Mr. Lubbock: Will the hon. Gentleman say what factors have led up to this inordinate delay? Is it not a great pity that this should have occurred, bearing in mind the great benefits which would be likely to be derived from a change-over to the decimal system?
    Mr. Barber: This is not only an important matter but a very complicated one. It is the desire of the Committee to produce the best possible advice for the Government and the country.

    Foreign Shipyards (British Orders)
    Mr. Millanasked the Chancellor of the Exchequer if he will make a statement on the policy of Her Majesty's Government on the use of sterling by British firms for the purchase of ships to be built in foreign shipyards.
    Mr. Maudling: Sterling may be used freely for this purpose, as for all current transactions.
    Mr. Millan: While I appreciate that there are difficulties, would the Chancellor look at this matter again in view of the very serious position in British shipyards at present?
    Mr. Maudling: No, Sir. I think it would be contrary to all our international obligations to start reimposing quotas to protect particular industries and, in the absence of a quota, we are bound by Article VIII of the International Monetary Fund not to employ exchange control.
    Dr. Kingasked the Chancellor of the Exchequer if he will take action to prevent British Petroleum, in which the Government are a major shareholder, from carrying out its proposed policy of placing orders for new tankers abroad.
    Mr. Millanasked the Chancellor of the Exchequer whether he was consulted by British Petroleum, in which

    1113
    Her Majesty's Government are a major shareholder, before the company took their recently announced decision to invite foreign shipyards to tender for the building of tankers.
    Mr. Hannanasked the Chancellor of the Exchequer what action he is taking to reverse the decision taken by British Petroleum, in which the Government are a major shareholder, to ask Swedish shipyards to tender for the building of tankers.
    Mr. Rossasked the Chancellor of the Exchequer what representations he has received regarding the decision of British Petroleum, in which Her Majesty's Government are a major shareholder, to invite tenders from Swedish shipyards for the building of tankers; and what replies he sent.
    Mr. Smallasked the Chancellor of the Exchequer whether he will investigate the decision of British Petroleum to invite tenders for tankers from foreign shipyards, as a preliminary to action by Her Majesty's Government as a major share holder.
    Mr. Maudling: I understand that the British Petroleum Company recently sought tenders for six product carriers from United Kingdom shipyards. As a result it has placed an order for two with a United Kingdom shipyard, while at the same time inviting competitive quotations for four product carriers from Swedish shipyards. I understand that the company has not yet decided where to place these further contracts. I have received no representations on this matter, nor would I expect to be consulted by the company about it, since this is a commercial matter, and the policy of successive Governments has been not to interfere in the commercial management of the company.
    Dr. King: Is not the Chancellor aware that this is more than a commercial matter? While the commercial directors of British Petroleum may wish to pursue a policy of buying cheap and selling dear, even if it hurts Britain, surely the Government have a duty as a major shareholder to protect the interests of British shipbuilders at a time when the shipbuilding industry is in such a critical condition, especially when many foreign competitors are being indirectly subsidised?
    Mr. Maudling: I do not agree with that. I think the B.P. Company has done a great service to this country over the years under the present arrangements. It has been extremely good in placing orders with British shipyards and has made it clear that it wants to place orders with British shipyards. But if the margin of price between what is charged here and what is charged abroad is too great, ultimately it will be very difficult for the company, as an international competitive company, to order in this country.
    Mr. Millan: Have not the Government a special responsibility since they are a major shareholder in British Petroleum? Will the Chancellor look into the matter and, if the margin between the Swedish and British prices is very narrow, will he see that these ships are built in Britain and not abroad?
    Mr. Maudling: No, Sir. As I say, successive Governments have not interfered as a matter of clear established policy in the commercial management of this company, but even if they did so I should be strongly against using an artificial quota in this instance. On the question of margins, the managing director of the company made it clear that if there were competitive prices the company would prefer to buy British and would disregard any marginal difference in price.
    Mr. Hannan: Can the Chancellor confirm or deny that wages in Sweden are higher than they are in Britain and, therefore, he will have to look elsewhere rather than laying the charge of high prices against the cost of wages? Will he look into the question and exercise an interest not only in the commercial aspect but also in the social aspect and use the influence of the Government to retain these orders here?
    Mr. Maudling: I believe it is true that Swedish wages tend to be higher than British. This is a very good reason why the British industry should be put on its mettle to quote competitively against. Sweden.
    Mr. Ross: While I agree with the Chancellor that hitherto there has been no interference, does he not think that this is now a matter of such importance that there must be interference and guidance given to the company (a) in relation to these orders and (b) in relation to

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    the importance this has in regard to other tanker production? He will appreciate that 62 per cent. of our present production is in tankers. Will he consult the Minister of Transport to see what he is doing about improvements in the industry?
    Mr. Maudling: If I were to give guidance to the company, and I could not—[Hon. Members: "Why not?"]—because of the long-standing arrangements about commercial considerations—it would be to do precisely what the company is doing.
    Mr. Small: While recognising the international character of this company, surely it is the Chancellor's function to do all he can to assist in alleviating the hardship in shipyards in Britain?
    Mr. Maudling: The British shipbuilding industry will survive only if it is efficient. It seems only right that B.P. should ask for competitive tenders from a country where wages are higher than in Britain.
    Mr. Costain: Is my right hon. Friend aware that British Petroleum has done a great deal to develop British industries through refineries? Is it fair to expect it to pay an uneconomic price for ships against the world markets?
    Mr. Maudling: I think that a very important consideration.
    Mr. Callaghan: Is it not refreshing to hear that wages are higher in Sweden than in this country, and that therefore the usual scapegoat of the trade unions cannot be used in this matter? Is there not a responsibility on the Government to look at the management of some of these shipyard firms to see where the responsibility lies for these higher prices and not to compel B.P. to accept high prices and so prop up inefficiency in the industry?
    Mr. Maudling: I think this is a case where competition should be very effective.

    Shell Oil Company of New York (Shares)
    Mr. Jayasked the Chancellor of the Exchequer what was the Government's reason for selling 2,500,000 shares in the Shell Oil Company of New York.
    Mr. Maudling: This operation was carried out in accordance with our policy of management of the portfolio.
    Mr. Jay: Do I understand from that rather brief Answer that this transaction implies no change in the Government's policy of holding American equity shares? Will the Chancellor agree that this policy has been very profitable for the British Government?
    Mr. Maudling: Yes, this was a sale of one set of securities and a purchase of another. It was a profitable deal and, in general, the holding of these shares, which was originally accidental, has been profitable.

    Computers
    Mr. Dalyellasked the Chancellor of the Exchequer how many computers have been bought for use in Government Departments since 1954; how many have come from foreign sources; and whether it is the policy of the Treasury to buy computers in the cheapest market.
    Mr. Barber: Since 1st January, 1954, 71 computers have been bought for use in Government Departments. Five of these have come from foreign sources. Computers for Government Departments, other than those for the Post Office, are bought by Her Majesty's Stationery Office. It is the practice to seek competitive tenders and to apply the usual commercial criteria of cost, performance and delivery.
    Mr. Dalyell: Is the Financial Secretary certain that the Stationery Office, which has rather different functions, is the right medium to buy computers?
    Mr. Barber: There is at our disposal in the Government a considerable amount of technical advice in the Stationery Office, and also in the Post Office there is a group of technical advisers who assist us in these matters, but so far as I know there has been no complaint about this particular aspect. If the hon. Member has any point in mind and will let me know, I will look into it.
    Mr. Dalyellasked the Chancellor of the Exchequer to what extent Treasury purchasing policy for computers is correlated with development policy for computers; and whether he will make a statement on the recent reorganisation of

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    the Treasury's technical group considering computer applications.
    Mr. Barber: The development of computers for civil use is essentially a matter for the industry. It is Treasury policy to buy machines that have reached the stage of development which ensures that their performance will be satisfactory.
    The answer to the second half of the Question is that no such reorganisation has taken place.
    Mr. Dalyell: Has not the leading article in the Electronics Weekly raised a question mark about the recent reorganisation of this particular department of the Treasury?
    Mr. Barber: It is just conceivable that the article in that respect, and perhaps in some others, was not accurate.
    Dr. Bray: Is the Minister aware that in private industry large organisations comparable with the Civil Service train a very large proportion of their senior staff in computer programming and the use of computers; yet it is considered beneath the dignity of the administrative grade of the Civil Service to know anything about this at all? Will he look into whether the Civil Service is taking a modern point of view of this matter?
    Mr. Barber: I do not know how much the hon. Member knows about the way in which we proceed in these matters. Does he realise that there is a technical support unit of 18 professional engineers specialising in computers which is paid for by the Treasury and which works under its administrative control? I do not know whether he has that point in mind.
    Dr. Bray: If the hon. Member recognises the difference between the programmer and the engineer, he must know that in shaping policy on taxation and in shaping policy on any other Treasury matter it is extremely useful to know the type of thinking which is available and which is not being used.
    Mr. Speaker: Order. I am not sure that we all know the difference between speeches and questions.
    Mr. Barber: I assure the hon. Member that the Government and those who advise us have as much experience of programming for computers as any indus-
    1118
    try in this country—indeed, I think more experience.
    Dr. Bray: No.

    Foreign Publications (Imports)
    Mr. Parkinasked the Chancellor of the Exchequer what fresh instruction he has given to Customs officers with regard to the importation of foreign publications containing scandalous allegations; and in what circumstances permission was given to distribute the issue of Libération of 18th June, which makes such allegations.
    Mr. Maudling: The importation of indecent and obscene books or other articles is prohibited by law, but the Customs have no power to stop importation of a publication on the grounds that it may contain defamatory matter. No instructions of the kind referred to in the Question have therefore been given, and permission was neither required nor given for the distribution of Libération.
    Mr. Parkin: Is the Minister aware that, although there were colourful Press stories of 30,000 periodicals being destroyed or mutilated by the Customs, after I put down the Question information reaching me led me to expect the Answer which I received, but I thought it right to leave the Question on the Order Paper in order that this matter could be clarified. Will he bear in mind that the most interesting thing in the periodicals mentioned was not the graffiti, in respect of which people have their own means of seeking a remedy, but the analysis of the somewhat inglorious position of the Home Secretary, who appeared to be unable to use information available in his own Department—information he had not been asked to get? I am sorry that the supplementary question is rather long. What I am asking the Chancellor is to make sure, when inquiries reach a more dispassionate stage, that he looks into the question whether there ought to be better co-ordination not only between himself and the Ministers, but between various semi-autonomous inquiry organisations such as the Vice Squad, the Customs and the Security Branch.
    Mr. Maudling: I think that the hon. Member is confusing defamatory and obscene publications. I think that there

    1119
    is a pretty good control over the obscene but there is no control at all, and should not be, over the defamatory. I am grateful for his help in giving me a chance to make the position clear, but I am sorry that he rather spoiled it by giving further currency to what he has described in his Question as "scandalous allegations".

  TRADE AND COMMERCE

    Finished Paper and Board
    Mr. WingfieldDigby asked the President of the Board of Trade what increase there has been in imports of finished paper and board from Scandinavian producers in recent months to the nearest convenient date; and whether he is aware of the resulting difficulties for mills in this country.
    The Minister of State, Board of Trade (Mr. Alan Green): The latest import figures appear in the Trade and Navigation Accounts for April. The Board of Trade are in close touch with the industry. The purpose of the European Free Trade Association is to increase the flow of trade between its members. As tariffs are progressively reduced, it is natural that imports should increase. For the same reason, British exports of industrial goods to all E.F.T.A. countries should also increase.
    Mr. Digby: Will my hon. Friend bear in mind that the future of these mills is extremely important for the increasing output of British woodlands, not least those of the Forestry Commission, where a great deal of public money is involved?
    Mr. Green: I appreciate that point. My hon. Friend will be glad to know that in the period January to April, 1963, the United Kingdom production of paper and board was higher than in the corresponding period in 1962.
    Mr. Biggs-Davison: Has not the increase in the flow of trade, which my hon. Friend has stated to be the object of the European Free Trade Association, been more in favour of our Scandinavian partners than of the United Kingdom? What action is open to the Government, now that the Stockholm Convention is a fact, to deal with competition of this kind, which is very dangerous to an important British industry?
    Mr. Green: I am sure my hon. Friend accepts that provided the competition is fair and is not dumped or subsidised, it has to be accepted in a market in which tariffs are being reduced.

    South-West (Employment)
    Mr. Wingfield Digbyasked the President of the Board of Trade whether, in view of the fact that Government loans and grant for projects in the development districts now average £601 per job, he will seek powers to provide better jobs in the South-West, where average earnings fell well below the national average.
    Mr. Green: No, Sir. My right hon. Friend's present powers enable him to give assistance in order to provide jobs in areas of high unemployment. He does not consider the level of earnings to be at all a comparable criterion with the level of unemployment.
    Mr. Digby: Will not my hon. Friend at least use his powers of persuasion, if not his powers of spending, to help us in the South-West, where we badly need more industry?
    Mr. Green: I fully appreciate my hon. Friend's concern about diversification and the improvement of the level of employment in the South-West. In the south-west region in May, 1963, the unemployment figures as a whole, for the region, were 1·9 per cent. I accept that in the south-west development districts they were 6·5 per cent., and that is why these districts remain development districts.

    Indian Cotton Cloth
    Mrs. Castleasked the President of the Board of Trade what reply he has sent to the recent representations by the Cotton Board for action to be taken against the dumping in this country of Indian cotton cloth at less than half the price at which it is sold on the Indian home market.
    Mr. Green: My right hon. Friend is aware of the concern of the cotton industry about the prices at which Indian cotton textiles are being sold here and has informed the Cotton Board that he is giving support to their approaches to the Indian industry over measures to avoid price disruption in the British market.
    Mrs. Castle: Is it not a fact that Indian cloth is frequently exported to this country at 40 per cent. of the price at which it is sold on the domestic market in India and that, in return for this, the exporters are compensated by the Export Development Council in India by the issue of import licences, called H licences, which they can sell for hard cash in India? Is not this a clear case of Government-sponsored dumping? In view of that, will the Board of Trade take the appropriate action under the appropriate legislation to put a stop to it?
    Mr. Green: I have said that my right hon. Friend is supporting the Cotton Board in its approach to the Indian industry. The hon. Lady may care to know that so far no application for action under the Act has been received.
    Sir C. Osborne: Will my hon. Friend bear in mind that, while dumping of this type ought to be stopped, the Indian workers cannot have a higher standard of living unless we are prepared to buy what they produce?
    Mr. Green: That also is true.

    G.A.T.T. (Under-Developed Countries)
    Sir C. Osborneasked the President of the Board of Trade what answer he has given to the United States proposal made at the General Agreement on Tariffs and Trade for an international scheme to provide improved and stable prices for raw materials and primary products from under-developed countries so as to give them a higher standard of living; what is his policy regarding such a scheme; and if he will make a statement.
    Mr. Green: Her Majesty's Government are in favour of commodity agreements in appropriate cases to smooth out fluctuations and provide more stable prices, and have taken a leading part in negotiating several such agreements.
    Sir C. Osborne: As our own terms of trade since 1954 have dropped to 85, which has been to the disadvantage of the raw material-producing countries to the extent of £1,500 million a year, ought not we to give a lead in getting their prices higher and stabilising them in order to give them a fair chance in the world?
    Mr. Green: My hon. Friend appreciates that we have sought to give that
    1122
    lead, but he will also agree that to attempt to do it by strictly artificial means, and to do it solely and under our own recognisances, would not produce the result which both he and I desire.

    Poland
    Mr. Frank Allaunasked the President of the Board of Trade what steps he is taking to increase the level of Great Britain's trade with Poland in the coming period.
    Mr. Green: A Trade Arrangement with Poland was signed in Warsaw on 12th June, which will come into operation on 1st July, 1963, and last for five years. New quota lists for the first year of the Trade Arrangement were also agreed. Poland has provided specific quotas and general facilities for United Kingdom exports in 1963–64 worth some £28 million compared with £25¼ million in the current year. The United Kingdom has established import quotas for Polish goods to an estimated value of about £30 million, while in addition Poland expects to earn about £14 million from the sale of commodities under open general licence.
    Mr. Allaun: While welcoming this five-year agreement, signed a few days ago, may I ask why the quotas have been fixed for one year only, which makes it difficult for both sides to plan ahead, whereas our competitors. Germany, France, Italy and Holland, all have three-year quotas?
    Mr. Green: My information is that this one-year agreement is quite agreeable to both sides. The foreshadowing further ahead which I have already mentioned should, I think, remove the difficulties which the hon. Member has in mind.

    Resale Price Maintenance
    Mr. Gresham Cookeasked the President of the Board of Trade to what people, outside the Government service, the findings of his departmental committee on resale price maintenance have been made known.
    Mr. Green: The results of this inquiry have been made known only to Ministers of the Crown and their Departments.
    Mr. Gresham Cooke: Is my hon. Friend aware that a noble Lord from

    1123
    another place stated in a letter to The Times that informed opinion was well aware of the findings of this committee? Does not my hon. Friend rather deplore a statement such as that, since this departmental committee was, as he says, confined to members of his own staff?
    Mr. Green: I do not think that it is for me to comment upon such reports. Perhaps my hon. Friend and the House would care to read my reply. The fact is that the results have been made known only to Ministers of the Crown and their Departments. Others may perhaps guess at them.
    Mr. Jay: Can the hon. Gentleman tell us whether the Government propose now either to make known this report to the House or alternatively to make a statement on what Government policy is, or both?
    Mr. Green: My right hon. Friend is now considering the Report. I think that it would be premature for me to answer that question on his behalf.

    Industrial Site, Clydebank
    Mr. Benceasked the President of the Board of Trade what steps he has taken to reacquire the industrial site in Clydebank now held by Messrs. Ingersoll, Rand Ltd.
    Mr. Green: None, Sir. There would be no advantage in re-acquiring the site until a development were in prospect.
    Mr. Bence: Is not the situation intolerable that this company has held this site for five or six years but seems to have no intention of using it? It is a little bit of Scotland, as I have said before. Will the hon. Gentleman reacquire it so that some industrialist wishing to start up in Clydebank can use the site?
    Mr. Green: I can assure the hon. Gentleman—this was implicit in my Answer to his original Question—that of course we would consider reacquiring the site for any firm likely to provide employment commensurate with its size, but so far we just do not have such a prospect.
    Mr. Ross: Is not the hon. Gentleman aware that in a recent Report of the Estimates Committee it was suggested
    1124
    that this was just what we should do—have sites ready in advance to show people?
    Mr. Green: I have already said that the site is there and would be reacquired if there were a reasonable prospect of using it. Meantime, no doubt the lessee is paying the rent.

    Cotton Industry (Re-equipment Grants)
    Mr. Thorntonasked the President of the Board of Trade what is his latest estimate of the cost to the Exchequer of the re-equipment phase of the Cotton Industry Act, 1959.
    Mr. Green: I regret that it is not possible to estimate the total cost to the Exchequer of re-equipment grants, as it will not be known until after July, 1964, how much re-equipment or modernisation will be carried out by the industry. To date, £5,193,968 has actually been paid out in grants.
    Mr. Thornton: Is the hon. Gentleman satisfied that the progress being made in re-equipment justifies the £11 million in Treasury funds which have been spent on scrapping of machinery?
    Mr. Green: I do not think that it is possible at this moment in time to make the sort of equation that the hon. Gentleman is inviting me to make. Perhaps a little later on, if he would care to table that question and I have more of the facts, it would be possible for me to give him a more satisfactory answer.

    Depopulation
    Mr. C. Hughesasked the President of the Board of Trade what steps Her Majesty's Government are taking to deal with persistent depopulation.
    Mr. Green: My right hon. Friend's responsibility under the Local Employment Act is to assist industrial development in areas of high and persistent unemployment, where people are actually seeking work.
    Mr. Hughes: Is it not necessary to change the criterion of the Local Employment Act so as to bring areas where depopulation is a continuing sore within the ambit of the Act? The problems of depopulation are quite as serious as the problems of unemployment.
    Mr. Green: I accept quite well the line of thought which the hon. Gentleman is pursuing, but I am afraid that I can only answer him in accordance with the existing powers of my right hon. Friend under the Act. At this moment in time, the problem of depopulation is not within my right hon. Friend's purview. Perhaps the hon. Gentleman would care to table a question to my right hon. Friend the Minister of Housing and Local Government, for example.
    Mr. S. Silverman: Is the hon. Gentleman aware—I am sure he is, representing the constituency he does—that depopulation is often the inevitable result of, and is mainly caused by, the difficulty of obtaining employment in the area? The two problems are therefore directly connected. Is it still the Government's policy in dealing with such a situation not to take work to the people but to drive the people to the work?
    Mr. Green: The hon. Gentleman knows quite well from his own experience that the last comment does not represent the fact. A great deal of public money is being spent in areas of high and persistent unemployment, as he knows very well. In fact, he has had some figures this very afternoon. Therefore, his last comment was not very fair. The only suggestion I can make to him is that this must not be over-simplified. There are certain areas in the United Kingdom where unemployment is not high and is not persistent and yet the process of depopulation persists. It is not a question of just one single, simple answer. The hon. Gentleman can shake his head as much as he likes, but if he will look at both factors in the equation he will find the fair answer.
    Mr. J. Griffiths: Will the hon. Gentleman bear in mind that in areas such as the one my hon. Friend the Member for Anglesey (Mr. C. Hughes) has in mind there is no work for school-leavers, and they leave the area? The result, therefore, is that unemployment never reaches 4 per cent., but the population goes down all the time and they suffer much more seriously than areas of what are called high unemployment.
    Mr. Green: I assure the right hon. Gentleman, as I assured the hon. Member for Anglesey, that I quite understand
    1126
    what is going through his mind. I can only answer as to the powers at present available to my right hon. Friend. I cannot give an answer beyond those powers.
    Mr. Hughes: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

  MIXED-MANNED NUCLEAR FORCE
  Mr. Swinglerasked the Prime Minister if he will seek President Kennedy's consent to publish the texts of the communications between them on the subject of the proposed mixed-manned nuclear force in the West.
  The First Secretary of State (Mr. R. A. Butler): I have been asked to reply.
  My right hon. Friend has nothing to add to the reply he gave to the hon. Member for Dearne Valley (Mr. Wainwright) on 14th May.
  Mr. Swingler: Can the Deputy Prime Minister say categorically that no undertakings at all have been given before the talks between the Prime Minister and President Kennedy that would commit Britain to participation in any scheme that would spread the possession and control of nuclear weapons? Can he say that no such undertakings will be given without the consent of Parliament?
  Mr. Butler: In answering the latter part of the supplementary question, the Prime Minister stated on 20th June that, if there was a decision, it would be put before Parliament and could be discussed. In regard to the first part of the supplementary question, no commitment has been entered into about a multi-manned force, which is what the Question refers to.
  Mr. H. Wilson: Does the right hon. Gentleman accept the American view that in signing the Nassau Communiqué Her Majesty's Government at that time entered into a commitment to establish a multilateral force? Do the Government feel they entered into that commitment, as the Americans feel they did?
  Mr. Butler: No, Sir. The Nassau Communiqué and the results of Nassau

  1127
  did not necessarily involve a commitment on the subject of a multi-manned force. We have accepted the concept, but we have not accepted British participation.
  Mr. Driberg: When the right hon. Gentleman uses the rather ambiguous phrase that the decision would be "put before" Parliament, does he mean that it would be brought to Parliament after the decision had been taken, and with the Whips on?
  Mr. Butler: Under the Prerogative, the Executive has the right to take decisions. It equally has the right and duty to consult Parliament.
  Mr. Healey: Further to the question asked by my right hon. Friend the Member for Huyton (Mr. H. Wilson), is the right hon. Gentleman aware that in the Nassau Agreement Her Majesty's Government promised under Clause 7 to use their best endeavours to develop the multilateral force? If Her Majesty's Government do not accept the mixed manned force as a multilateral force, what proposals of their own for a multilateral force are they putting forward?
  Mr. Butler: I could not in answer to a supplementary question make a positive statement of that character. It requires considerable ingenuity to separate the various terms—multilateral, multi-manned, multi-national, and so forth. No commitment has been entered into by Her Majesty's Government on the subject of a multi-manned force.
  Mr. Biggs-Davison: Has not enough time elapsed since the Bahamas Conference for Her Majesty's Government to clear up the terminological confusion? Did not the word "multilateral" in the Bahamas Agreement in fact mean what Her Majesty's Government mean by "multi-national"?
  Mr. Butler: One thing I am clear about is that no commitment has been entered into by Her Majesty's Government to participate in a multi-manned force.
  Mr. H. Wilson: Can the right hon. Gentleman say whether the Prime Minister intends to maintain that position in his discussions with President Kennedy next week?
  Mr. Butler: I cannot forecast what will be the content of the discussion.

  LORD PRESIDENT OF THE COUNCIL (RESPONSIBILITIES)
  Dr. Brayasked the Prime Minister whether the Lord President will retain his responsibilities for science, sport, the North-East and the Privy Council during his negotiations on a nuclear test-ban agreement.
  Mr. R. A. Butler: I have been asked to reply.
  Yes, Sir. We expect that the discussions in Moscow will last a few days. If, of course, they are more protracted my right hon. Friend the Prime Minister will consider what arrangements should be made.
  Dr. Bray: Is the First Secretary aware that it is a little difficult to remember all the noble Lord's jobs and that it was no slight to him that I forgot to mention his leadership of the House of Lords and archbishopric of the Conservative Party? Is he also aware that it is not the wish of the people in the North-East to distract attention from the disarmament negotiations, but they feel that what amounts to the development of a new concept of a regional administration needs the full-time attention of a Minister?
  Mr. Butler: I think that my noble Friend's qualities are certainly multilateral. He is quite able to undertake these duties, and it should be clear that he is not being asked to take charge of the whole problem but simply of the negotiations which will, we hope, last only a few days.
  Mr. Shinwell: Can the right hon. Gentleman say to which activity his noble Friend attaches the highest importance? Is it science, sport, the North-East, Moscow, the House of Lords, or his ambition to become Prime Minister?
  Mr. Butler: I should need to consult my noble Friend about that.

  SECRETARY OF STATE FOR THE COLONIES (STATEMENT)
  Mr. C. Royleasked the Prime Minister if the public statement made by the Secretary of State for the Colonies on Thursday 6th June, prior to his departure from Malta, on the subject of employment

  1129
  in Malta, represents the policy of Her Majesty's Government.
  Mr. R. A. Butler: I have been asked to reply.
  Yes, Sir.
  Mr. Royle: While being glad to get that Answer, will the First Secretary remember that his right hon. Friend said:
  "The Malta Government should, therefore, rightly be encouraging emigration, and the British Government are providing money to help pay the fares of immigrants."
  Is he aware that his right hon. Friend went on to say:
  "There are at present tens of thousands of"—
  Mr. Speaker: It sounds as though the hon. Member is making a verbatim quotation, which is out of order at Question Time.
  Mr. Royle: Perhaps I can paraphrase it, Mr. Speaker.
  Is the First Secretary aware that his right hon. Friend said that there were tens of thousands of vacant positions which Maltese could fill in the south of England? Does this mean that there will be no necessity now to re-enact the Commonwealth Immigrants Act, or is it just a question of shade or colour?
  Mr. Butler: The answer to the latter part of that question is in the negative and, to the earlier part, immigration by the Maltese would, of course, have to comply with the terms of the Commonwealth Immigrants Act.
  The following Question stood upon the Order Paper:
  Mr. G. M. THOMSON: To ask the Prime Minister whether the public statement made by the Secretary of State for the Colonies in Malta on 6th June regarding planned emigration to the United Kingdom represents the policy of Her Majesty's Government.
  Mr. Speaker: Mr. G. M. THOMSON.
  Mr. G. M. Thomson: Question No. 6. Sir.
  Mr. Butler: That was answered with Question No. 3.
  Mr. Speaker: I was rather expecting that, but I did not myself hear the right
  1130
  hon. Gentleman say that they were being answered together. That would have denied the hon. Member for Dundee, East (Mr. G. M. Thomson) the chance of asking a supplementary question. Can the First Secretary assist me?
  Mr. Butler: I am perfectly ready to read out the Answer again, Mr. Speaker. It is: "Yes, Sir."
  Mr. G. M. Thomson: I thank the First Secretary for reading that illuminating Answer again. Is he aware that it makes nonsense of the Commonwealth Immigrants Act, which he himself helped to pass? Is he aware that although the Colonial Secretary's offer to help Malta is valuable in itself, it is vitally important that the Government, in their immigration policies, do not appear to discriminate between one part of the Commonwealth and another? Is he further aware that there is widespread suspicion in the West Indies that facilities which are being made available to a white Colony are being denied to a coloured Colony? Will the Government, therefore, extend these facilities to the West Indies?
  Mr. Butler: I cannot answer a question on the West Indies in relation to a Question on Malta. All I can say is that the Commonwealth Immigrants Act is, I think, being fairly administered.
  Mr. Ronald Bell: Will my right hon. Friend bear in mind the fact that while this statement does not make nonsense of the Commonwealth Immigrants Act, it does make nonsense? Will he inform himself as to what proportion of convictions for brothel-keeping in the Metropolitan area are committed by Maltese immigrants?
  Mr. Butler: That raises an entirely different question.

  NORTH-EAST
  Mr. Milneasked the Prime Minister if he will make an official visit to the North-East to examine employment and other problems of the area, with a view to early action.
  Mr. R. A. Butler: I have been asked to reply.
  My right hon. Friend is always glad of an opportunity to revisit the North-East.

  1131
  But there is no occasion at the present time for the sort of visit the hon. Gentleman has in mind, as my right hon. Friend has just received a comprehensive and detailed report on the problems of the region.
  Mr. Milne: Is the right hon. Gentleman aware that the question of action was also mentioned in my Question and that we have had no reply to that point? While we are included among the multilateral activities of the Lord President of the Council, we are finding no benefit from him. If the opportunity offers itself, will the First Secretary himself pay a visit to the area?
  Mr. Butler: My right hon. Friend the Prime Minister received this report yesterday and it cannot be expected that action arising out of it can be announced today. If anyone is to visit the North-East, the most suitable person is my noble Friend; and he proposes to go back there on 28th June.

  N.A.T.O. MIXED-MANNED FORCE
  Mr. Healeyasked the Prime Minister whether he will discuss the American proposal for a mixed-manned North Atlantic Treaty Organisation nuclear force with the President of the United States of America when they meet at Birch Grove.
  Mr. R. A. Butler: I have been asked to reply.
  My right hon. Friend's discussions with the President of the United States will, of course, be confidential, but he naturally expects that they will cover a wide range of problems of mutual concern to both Governments. The proposals for creating a North Atlantic Treaty Organisation mixed-manned force are in general terms only, and if it is decided to establish it there will be many details to be worked out by the participating nations.
  Mr. Healey: If the Prime Minister discusses this matter with the President on Saturday, would the First Secretary ask his right hon. Friend to draw the attention of President Kennedy to the fact that no British voice of consequence, either inside or outside the House, has been raised in favour of this proposal? Would it not be quite improper for Her Majesty's Government to commit the
  1132
  country in favour of such a proposal when they are known to have lost the respect and confidence of the country?
  Mr. Butler: My right hon. Friend will take into account all expressions of opinion before he enters into this discussion.
  Mr. Warbey: Will the First Secretary say whether the Government agree with the American defence intellectuals who are quoted today in The Times as regarding this proposal as providing "more bang for a buck" or "more rubble per rouble" than any alternative one?
  Mr. Butler: The hon. Member's observation will be noted.
  Mr. Lipton: Can the right hon Gentleman say whether the Prime Minister has taken adequate steps to be personally informed as to the suitability of the security arrangements for the protection of our distinguished visitor?
  Mr. Butler: That raises a quite different question which, if necessary, should be put on the Order Paper.
  Mr. P. Noel-Bakerasked the Prime Minister what proposals have been made as to who will appoint the naval officers who are to command the surface vessels of the proposed multilateral North Atlantic Treaty Organisation nuclear force, as to the proportion of the mixed crews which will be provided by each participating nation, and as to whether all the members of these mixed crews will be trained to arm and launch the Polaris missiles.
  Mr. R. A. Butler: I have been asked to reply.
  The proposals for creating a North Atlantic Treaty Organisation mixed-manned force are in general terms only, and if it is decided to establish it there will be many details to be worked out by the participating nations.
  Mr. Noel-Baker: Does the First Secretary realise that until the House knows the answers to the three questions contained in my Question it is impossible for hon. Members to judge how far a mixed-manned force would help to spread nuclear weapons to other nations, which it is the declared policy of Britain and the United States to prevent?
  Mr. Butler: It is precisely in order to work out these details, which are very important aspects of this problem, that the discussions are to take place.
  Mr. Noel-Baker: Will the right hon. Gentleman give us a pledge that no commitment will be made for mixed-manned forces until the answers have been given to the House?
  Mr. Butler: I have already said that the matter must be first decided and then the House must be consulted.
  Mr. Noel-Baker: Might I press the First Secretary a little further? What does he mean by the word "decided"? Does he mean that we will be committed to the mixed-manned force before the House is given a chance to debate this vital point?
  Mr. Butler: I mean that until there is a plan worked out and until the British decision has been taken it is impossible to give the House the decision we have made. I was carrying out what my right hon. Friend the Prime Minister said on 20th June; that a report must then be made to the House and the matter can then be debated.
  Mr. H. Wilson: Is the right hon. Gentleman not aware—has he not been told—that before the Whitsun Recess the Opposition Chief Whip and I both made representations to the Government to the effect that in our view no decision should be taken on this matter until the House had had an opportunity of debating it? Is he aware that next week it is hoped that there will be a debate on foreign affairs and disarmament, two issues in which this question is a central one? Will he now give a clear assurance—one which the Opposition Chief Whip and I thought we already had—that the Government will not take a decision until we have had next week's debate so that the views expressed, I hope by hon. Members on both sides, can be taken fully into account before the Government take their decision?
  Mr. Butler: I will certainly convey that supplementary question to my right hon. Friend the Prime Minister. Mean-while, I repeat what my right hon. Friend said on 20th June:
  "These matters are under consideration and have to be discussed with us and our allies. If and when any decision is reached it will be stated to the House and there will be an
  1134
  opportunity for debate."—[OFFICIAL REPORT, 20th June 1963; Vol. 679, c. 644.]
  Mr. Wade: What is meant by the word "decision"? Does the right hon. Gentleman mean a decision by the Government as to the policy they are to pursue, or agreement with the other countries concerned?
  Mr. Butler: The British Government must first have these discussions before they can make up their mind what proposal they will put to the House.
  Mr. H. Wilson: We have not had a straight answer from the right hon. Gentleman on this question—can we please have one? Can we have from him the assurance, which we thought we had, that the Government will not take a decision and then announce it to the House; that they will not take a decision on this matter, at any rate, until we have had the foreign affairs debate that we understand is likely to take place next week? Can we be told that no commitment will be entered into this week-end, or anything in any way involving a decision of the Government, until the Government have listened to the views expressed in this House in next week's debate?
  Mr. Butler: I will undertake to convey that view to my right hon. Friend.

  COMPLAINT OF PRIVILEGE
  3.34 p.m.
  Mr. Speaker: There are two complaints of Privilege with which I have to deal.
  First of all, there is the matter raised by the hon. Member for Ebbw Vale (Mr. M. Foot). In my view, neither of the letters which I received from Lord Hailsham, which were personal and private letters, in any way infringed the privileges of this House, and my conclusion, therefore, is that the hon. Gentleman's complaint does not, prima facie, raise a matter of breach of Privilege.
  As the House knows, my conclusion on the prima facie position does not debar the House in any way from taking a different view. All it means is that I cannot accord to the hon. Gentleman's complaint precedence over the Orders of the Day.

  1135
  I was asked to consider whether I would make available the letters, so that the House could judge. The difficulty is obvious, and I have given prolonged and anxious consideration to my duty. In this matter, as in all others, I am the servant of the House and take the direction of the House if and when it should be given to me, but I would ask to be acquitted of any sort of discourtesy if I said that unless so directed I would decline to make public a part of my personal and private correspondence.
  The fact is that we all, as Members of this House, have to receive from time to time communications in circumstances of confidence. I myself receive them from time to time from hon. Members, officers, officials, members of the other House, and so forth. It seems to me to be a necessary part of our Parliamentary life that one should be able to do so. Therefore, until the House otherwise me directs, I would not think my duty required me to do that which would destroy the confidence in which such communications are made.
  Mr. M. Foot: As you have indicated in the first part of your Ruling, Mr. Speaker, your Ruling does not mean that hon. Members are deprived of making the decision that in their view the matter should be referred to the Committee of Privileges, but that the matter does not take precedence over other business.
  Therefore, what hon. Members will have to consider is whether they should put on the Order Paper of the House a Motion asking that this complaint should be referred to the Committee of Privileges. But for the House to be able to do that, it would surely be desirable that hon. Members should be able to judge for themselves what is the verdict on these letters.
  There have been cases where the Monarch has attempted to communicate with the Speaker, and where a previous Prime Minister, Mr. Baldwin, took up the matter with the Monarch and protested very strongly against a confidential letter being sent by the Monarch to the Speaker—which, I should have thought, had a parallel in this case. [Laughter.] Maybe I have made an error; it is the only office to which the
  1136
  noble Lord has not yet aspired. [Laughter.]
  This is a very serious matter. It is a matter for the House to judge, but I should not myself have thought that communications between hon. Members and yourself, Mr. Speaker, were on the same level as communications between a member of the Government and Leader in another place and yourself, apparently referring to business that had been transacted in this House.
  My first point, therefore, is that I would ask you very seriously to consider all the precedents of confidential or attempted confidential exchanges between people outside this House and Mr. Speaker and where, in the end, Mr. Speaker has had to agree that the letters should either be read to the House or placed in the Library.
  A second point arises. At one point, however reprehensive some of us may have thought it, these exchanges were confidential, but they ceased to be confidential. I am sure that the whole House would acquit you, Mr. Speaker, of "leaking" the letter, but someone has done so. My original complaint, and the reason why I raised the subject as a matter of privilege, was that, if this exchange of letters was a matter of confidence, that confidence has not been maintained.
  The story going round—I cannot vouch for it—is that the noble Lord had written a very sharp letter to the Speaker of the House of Commons. I should have thought that when such things as this are rumoured it was of paramount importance that the House of Commons, to protect its dignity, should sort out the whole matter.
  I therefore think that the next decision that this House must make will be whether a Motion is to be placed on the Order Paper. If such a Motion is placed on the Order Paper it may be pressed, and a debate take place upon it. If that debate takes place, a demand for the publication of the letters will occur and, with the greatest of respect, I should have thought that it would be serving the interests of the whole House much better if you agreed to publish the whole correspondence.
  Mr. Wigg: Before you rule on this point, Mr. Speaker, there is a point that I should like to make. Over three hundred years ago, one of your predecessors

  1137
  in the Chair told this House that he had neither eyes to see nor tongue to speak but as this House was pleased to direct him. I respectfully submit to you, Sir, that you cannot have private correspondence with the Leader of the House of Lords on something that concerns the business of this House.
  With the greatest possible respect to you personally, and to the Chair, I ask: will you not take into account the feelings of the House and enable it to come to a decision either by your reading this correspondence or making it available in the Library, so that some of us will not be forced to take the very unpleasant decision of placing a Motion on the Order Paper in terms which reflect upon you?
  Mr. Speaker: I thank hon. Members for the respectful manner in which they have stated their argument. I am grateful to be acquitted of a "leak". I cannot take the view that the revelation in a newspaper that private correspondence existed renders public the contents of the correspondence. I do not follow that argument.
  For the rest, the difficulty is obvious. I suspect that many hon. Members will feel the difficulty which I had about what is my right duty to this House. I am content to take the direction of the House about it, but I am not content to make part of my private and personal correspondence available unless so directed by the House.
  Mr. H. Wilson: No Member of the House, Mr. Speaker, will want to interfere with your private correspondence, and I am sure that it will be the general desire of the House that we should not be faced with a Motion on the Order Paper either raising the Privilege question or, still less, raising your conduct.
  But I should like to submit the further point to you that surely any letter sent to you, whether marked "Private" or "Confidential", or not, relating to the conduct of business in this House, cannot be other than an official letter. We are all of us familiar, when drafting Questions in the Table Office, with the problem of whether action taken by a Minister is in his private capacity or in his official capacity. That is why the word "official" is so often inserted into the Questions.
  1138
  If these letters related to any Rulings you gave, or somebody else outside the House thought you ought to have given, surely that is a reflection on your official conduct of this House and a reflection on our proceedings which no one outside this House has a right to make. Surely, throughout all history we have protected our rights against interference from outside, and that includes interference from another place.
  Therefore I would ask you, Mr. Speaker—and I am sure that this reflects the view of a large number of hon. Members—whether you would reconsider this matter and consider whether it is possible for any letters, if they refer to your Rulings, to be anything but official in that they deal with your official conduct as the servant of this House.
  I would, therefore, ask you whether you would treat them, or, in any case, whether you would state to the House if the letter you received, whether sharp or otherwise, in any way called into question any Ruling you gave or did not give in this House. If the letter contained any such reflection or attempt to interfere with your conduct in the Chair, this is an unwarrantable interference with this House. One recognises your unwillingness to publish it, but the House is entitled to know whether this correspondence related to your official conduct.
  Mr. Speaker: I think that whether or no the letter is such as to deprive it of its label and category of "Private and personal" must depend upon the character of the letter, and I am in the unhappy position of having to exercise personal judgment about that. I can only say that I thought it was, and I think it is, a personal and private letter, and if that is so it is no good giving a partial description of its contents and the like. I want the direction of the House about this. If the House wants the letters to be revealed I must obey. If not, I do not want to do it.
  Mr. Wilson: I am sure that no one wants to produce any sledge-hammer Motions on this matter, Sir, and that we do not want to be put into that position in order to carry it further. That is why I am sure that the House would be grateful, Mr. Speaker, if you could elucidate your last few words. Does

  1139
  this mean that your advice to the House would be that it would be in order for hon. Members—perhaps the Leader of the House—to table a Motion requesting you to make this information available without its being any form of censure upon you?
  Mr. Speaker: I would treat a request from the House as equivalent to a direction from the House. I would like, as a matter of form, in case there is a snag at the moment which is veiled from me, to have an opportunity of answering the question not "off the cuff", but I imagine at present that that would be all right; and if the House requested it I would feel that my duty followed.
  Mr. C. Pannell: May I put another point to you, Sir? If a letter is sent to you, is it not proper, in all the circumstances, to answer, as Mr. Baldwin did, and to send the letter back and say, "This is a letter which should not have been sent"? Was that the nature of your answer? If it was, I suggest that the House would be easily satisfied.
  Mr. Speaker: That is the same point—whether I should reveal the correspondence or not.
  Mr. Bowles: May I remind you, Mr. Speaker, that this is the second time this year that the Press has alleged that Ministers of the Crown are using you and your great office for the purpose of Government business or Government protection? I hope that the Leader of the House, recalling what he said just before Easter on the same matter, might consider the request of my right hon. Friend the Leader of the Opposition that we should see what steps the Government or members of the Government are trying to take to influence you in your great position as our Speaker.
  Mr. Speaker: I can relieve the hon. Member of anxieties. If anybody or any newspaper is so foolish as to suppose that I take my directions about my duty in this House from anyone but the House they are very evilly and fundamentally mistaken.
  Mr. Hale: No doubt you will have looked at all the precedents, Mr. Speaker. There was a very direct precedent in the famous case on 9th April, 1810, of a Member being held in contempt in
  1140
  respect of a letter to Mr. Speaker reprobatory of the conduct of the House, but not of Mr. Speaker, in relation to a personal matter.
  It was the famous case of Sir Francis Burdett. The House declared that letter to be a high breach of Privilege and the only reason why it did not commit Sir Francis Burdett to the Tower was that he was already there for a breach of a previous Order of the House and had, indeed, been escorted there by half a regiment of Foot Guards, most of the police of London, the Serjeant at Arms and various other officials, to the enthusiastic cheers of the people of London.
  I do not say that the circumstances are precisely similar, but when one who is not only a Member of another place, but a member of the Government and one of Her Majesty's personal servants, endeavours to write to Mr. Speaker—and we do not know whether the letter was approbatory or reprobatory of what was said in the House, or of the conduct of the House; there is a suggestion that it was not wholly approbatory—this raises a serious question whether this is appropriate conduct for a Cabinet Minister at all, without the authority of the Cabinet. It raises the question whether it is appropriate for a Member of another place at all to express views which he asks you, Mr. Speaker, to keep in confidence and not to give publicity to them.
  I hope that you will consider these matters, Sir. As my right hon. Friend the Leader of the Opposition has said, I do not think that any of us, if we can avoid it, wants to provoke a contentious discussion, particularly in view of the Ruling which the House made in 1952, or, rather, the statement made by the Leader of the House, that in his view the appropriate conduct would be for this House to report the matter to another place, where it would be debated, and we would hope that justice would be done.
  Mr. Robert Cooke: Are you aware, Mr. Speaker, that there is a marble bust of Sir Francis Burdett at the Members' entrance to the House?
  Mr. Speaker: These "threats" must cease. I am greatly obliged to hon. Members, but I should like to pass on to other matters soon, if I may.
  Mr. M. Foot rose—
  Mr. Speaker: Does the hon. Member wish to add anything?
  Mr. Foot: I understand the position to be, Mr. Speaker, that you have said to the House on two occasions that you would like to have the opinion of the House. The only way the House could give its opinion is on a proper Motion.
  Mr. Speaker: I have not expressed any wishes. I have said how I would act unless the House otherwise directed or requested me. I cannot add to this. I have given this matter the most anxious consideration. The position is extremely difficult from my point of view. I am sure that everybody would realise that I am not to be involved in this.
  Mr. J. Griffiths: We all understand your difficulty, Mr. Speaker. Would it help to resolve it if your correspondent agreed to release the letters?
  Mr. Speaker: I do not propose to make any request to be relieved from confidentiality, for the very reasons I have given with regard to the whole matter.
  Mr. Grimond: Mr. Speaker, apart from any question arising as to whether a communication from a member of the Government can be strictly confidential of itself, I think that what the House will find some difficulty over is how the existence of the letter came to be made public. If it was a confidential letter, we can understand your difficulty, Sir, if I may say so, in making public a confidential communication, but it is difficult to see how it can be treated as confidential when the existence, if not the contents, of the letter must have been made public by the writer. I cannot see who else can have made it public. Therefore, it cannot be treated by him, I should have thought, entirely as a confidential matter.
  May I ask you, Sir, whether you have received any further communication from the writer or any explanation of how the letter came to be made public, or perhaps an apology for the fact that it did become public?
  Mr. Speaker: I have received no further communication from the writer. I cannot assist the right hon. Gentleman about the circumstances in which the matter was revealed. I have no knowledge.
  Mr. H. Wilson: Obviously, Mr. Speaker, the House wants to get on, and, also, it does not want to see you in this position of being constantly pressed. Surely, by this time, the Leader of the House, either in his capacity as a member of the Government sharing collective responsibility with the noble Lord for his action, or as Leader of the House, owing a responsibility to both sides of the House, could now give some advice to the House as to how he thinks that this difficult matter can be dealt with.
  The Chancellor of the Duchy of Lancaster rose—
  Mr. Ronald Bell: On a point of order, Mr. Speaker. Is it in order that all this should take place by way of argument about your Ruling on whether there is a prima facie case of breach of Privilege and whether the matter should accordingly have priority over the Orders of the Day?
  Mr. Speaker: I dare say that it is not strictly in order, but the circumstances are peculiar. [Hon. Members: "Hear, hear."] I am not being frivolous in the least. It is because the subject matter on which the House has to judge is exclusively in my possession. Proud as I am of myself, I do not like to wander forth saying, "Accept my pronouncement exclusively, without any check on it." That would not be very sensible, and that is why we are looking at it.
  Mr. Iain Macleod: As I understand the position—I am sure that the Leader of the Opposition will agree—when you rule on matters of Privilege, Mr. Speaker, there are then two tasks which may fall upon the Leader of the House. If you rule that it is a matter of Privilege, then, unless the House agrees that it is such a slight matter that this course need not be taken—nobody has taken this matter lightly at all, whatever views we may hold about it—it is the duty of the Leader of the House to move that the matter complained of be referred to the Committee of Privileges. This is well understood by the House.
  Equally, the second position is perfectly well understood. Your Ruling does not prohibit, the House, if it wishes, from, in due form and by Motion, returning to the matter. Your Ruling is that you do not consider that this matter of Privilege

  1143
  raises a case which should accord it precedence over other Motions and the Orders of the Day. Everyone in the House must recall a score of examples of this sort of Ruling being given by Mr. Speaker. The question is then considered by those who may wish to put a Motion on the Order Paper. But that is their duty. With respect, in the circumstances of the Ruling which we have had very clearly from you, Sir, it is not one which falls on the Leader of the House.
  Mr. H. Wilson: Yes, but will the right hon. Gentleman not at least consider this? His rôle is not purely passive in this matter as Leader of the House. He ought to take an initiative when a difficulty arises.
  May I put this point to you, Mr. Speaker? Since you have indicated that, if, to get out of the difficulty, a Motion were put on the Order Paper requesting you to publish the correspondence, you would, naturally, comply with it, might not the Leader of the House at least agree now to have discussions through the usual channels and with all hon. Members concerned to see whether an agreed Motion might be put down—[Hon. Members: "No."]—in order to comply with the, I thought, quite clear statement made by you, Sir, a few moments ago? Would not that be the best way out of it? Or does the Leader of the House really want this matter to have to be handled in a more heavy-handed manner than any of us think necessary?
  Mr. Macleod: With respect, I think that the Leader of the Opposition ought not to take that line. [Hon. Members: "Oh."] I think that the whole House agreed with what I said a few moments ago about the duty falling upon the Leader of the House in the two sets of circumstances, one in which a breach of Privilege of which the House wishes to take notice is regarded by Mr. Speaker as a prima facie case, and the other in which he says that it should not have precedence.
  The Leader of the Opposition will understand—I shall not use any polemics in this, and I am not referring to the letters at all—that I do not agree with many of the things which have been said today, but, naturally, we should be prepared to have the usual discussion which always takes place if
  1144
  there is any difficulty. Perhaps, on that basis, we can proceed.
  Mr. Wigg: On a point of order, Mr. Speaker. It is necessary to put the Leader of the House right on a question of fact. The right hon. Gentleman talked about his two duties, and, obviously, he believes what he said to be so; but it is not a duty incumbent upon the Leader of the House—
  Mr. Speaker: Order. We really cannot continue an irregular discussion in this way now.
  Mr. Wigg: May I pursue my point of order with you, Mr. Speaker?
  The Leader of House has just submitted to you, Sir, without correction, that his duty in a matter of Privilege is to move that it be committed to the Committee of Privileges. This is not so. This is the duty, if he cares to exercise it, of the hon. Member who raises it in the first place. We have accepted your Ruling that there is no prima facie case here, and we know that we shall have to put a Motion on the Order Paper.
  The point at issue and the difficulty here is this; I am sure that I speak for my hon. Friends on this point. The last thing that we want to do—though we shall not shirk our duty, and I certainly shall not shirk mine—is to put down a Motion critical of the Chair. We do not find ourselves able to accept the Ruling that letters about the business of the House written to you in your capacity as Speaker are anything else than the property of the House.
  On this basis, Sir, we are asking you for guidance, and we are asking the Leader of the House to exempt the Chair from controversy in this matter by putting down a Motion, which, if he likes, he can then leave to a free vote of the House, to decide whether these letters should be published or not.
  Several Hon. Members rose—
  Mr. Speaker: We really cannot continue this now. I think that the issue is entirely plain.
  Mr. S. Silverman: rose—
  Mr. Speaker: Is the hon. Gentleman rising to a point of order?
  Mr. Dudley Williams: May I raise a point of order first?
  Mr. Speaker: Mr. Silverman.
  Mr. Silverman: I only wish, Mr. Speaker, to draw your attention to a comparatively recent event which seems to have many parallels. In 1949 or thereabouts, there was an occasion when a constituent wrote to an hon. Member of this House. The Member sent it to the constituent's superior, to the bishop, I think it was.
  This was raised as a complaint of breach of Privilege here, and Mr. Speaker of the day ruled as you have ruled in this instance, but the House was not content with that and a Motion such as can always be put down in the circumstances was put down. The Leader of the House found time for it, and the question involving a breach of Privilege was discussed on the Floor of the House, it being decided in the end that there was not a breach of Privilege.
  The matter did not go to the Committee of Privileges, but the point was discussed and decided on the Floor of the House. Is not that a precedent which could be followed in this instance?
  Mr. Speaker: The House can do as it likes. It can either not deal with the complaint, send it to a Committee, or do as it wishes. We really must get on.

  COMPLAINT OF PRIVILEGE
  Mr. Speaker: The next complaint of breach of privilege arises from a matter raised yesterday by the hon. Member for Devon, North (Mr. Thorpe), who put to me a letter which he had received from a well known firm of Parliamentary
  1146
  Agents. The hon. Gentleman read it. I do not think that I need read it to the House again.
  In my view, the letter did constitute prima facie a breach of Privilege of this House.
  Mr. Thorpe: May I thank you, Mr. Speaker, for your Ruling.
  Subsequent to my raising this matter, I received a letter from the firm in question which, with the leave of the House, I should like to read. It is very short and to the point, and says:
  "We apologise sincerely for the letter which we wrote to you yesterday with regard to Amendments to this Bill. Mr. Wentworth Pritchard, who accepts fully the responsibility for the letter, saw you yesterday afternoon, when he explained that he had no thought of attempting to interfere with the rights of any Member of Parliament, and apologised personally to you. Nevertheless, we think that it is right that we should record in writing our apology to you and to the House for having written the letter to you".
  May I say, first, in fairness, that this is a firm of the highest integrity and is among the most experienced Parliamentary Agents in this country. I therefore suggest to the House that this is both exceptional and isolated in the activities of this firm.
  May I also suggest to the House that, in view of the apology which has been received as a result of this matter being raised yesterday, it may well consider that no further action need be taken.

  NEW MEMBER SWORN
  Merlyn Rees, esquire, for Leeds, South.

BUSINESS OF THE HOUSE
Motion made, and Question proposed.
That the Finance Bill, as amended, may be considered immediately after the recommittal of the Bill and report thereof, notwithstanding the practice of this House as to the interval between the stages of such a Bill.—[Mr. Maudling.]
4.3 p.m.
Mr. James Callaghan: It is unusual to speak on a Motion of this sort, but I do so briefly because I shall have some further words to say when we consider the Motion for recommittal of the Bill.
The number, size and extent of the Amendments and new Clauses which have been tabled on this occasion are really much greater than it is reasonable to expect the House to consider and there is a very strong case for saying that there should be an interval between the recommittal and further stages of the Bill.
If the Chancellor of the Exchequer cares to look at the Notice Paper he will see that we have been handed at relatively short notice 24 pages of Amendments out of the Report stage of 38, and it is treating the House with less than consideration to expect hon. Members on this side, who do not have the facilities of the Chancellor of the Exchequer for the preparation and examination of Amendments and new Clauses, to rush through these proposals and to try to give some sensible consideration to them.
I am told—I will not say on what authority—that a number of the proposed new Clauses are a rewrite in simpler form of original Clauses. This may well be true, but the Chancellor of the Exchequer and those who assist him should have some consideration for the rest of the House. As I say, we do not have the right hon. Gentleman's resources, and when we have to read through pages of the size of this Notice Paper to try to find out the difference between what is contained in the new Clauses as redrafted and the original Clauses it is asking the House—and I speak as a Member of the House and not as a Member of the Committee—to try to do too much in too short a time.
Some of us have had to work very long and very quickly to do this job. We do not mind doing it when it is necessary, but it is not necessary now.
1148
Most of the new Clauses and Amendments relate to the Schedule A tax. The promise to get rid of Schedule A was announced by the Chancellor of the Exchequer fifteen months ago. It was repeated by the new Chancellor of the Exchequer this April, and here we are faced with further Amendments on Schedule A which, I am told, are a tidying-up process. This is a slipshod way of working.
I know that the Chancellor of the Exchequer has had other preoccupations recently. He served in the R.A.F. I think that the motto then was something like, "Through difficulties I reach for higher things". Perhaps the right hon. Gentleman has been trying to live up to his old motto. However that may be, the fact remains that the House is faced with 96 new Clauses and Amendments put down at comparatively short notice on a subject which is extremely well known to the Chancellor of the Exchequer, namely, Schedule A. The House has been treated with less than the consideration to which it is entitled.
I go on record as saying that I hope that the House will seek to deny the Chancellor of the Exchequer the facility which he needs to consider the Bill immediately after recommittal. In other words, I suggest that we should follow our usual practice of insisting on an interval between the two stages so that we may have one more opportunity to look at the Amendments.
The last two Amendments were put on the Notice Paper this morning I do not know whether they are drafting Amendments or not, because I have not had a chance to look at them. I gather that they deal with fairly small points, but how are hon. Members, who have many other things to do, to know whether that is so unless they are given the opportunity of considering them? I register the strongest protest about the lack of consideration with which the House has been treated on this occasion.
4.7 p.m.
The Chancellor of the Exchequer (Mr. Reginald Maudling): I am sorry that the hon. Member for Cardiff, South-East (Mr. Callaghan) should talk of a lack of consideration. I have done my best, during the passage of the Bill, to consider the convenience of the House of Commons and of the Committee. I

1149
think that that would be generally agreed.
I explained at an earlier stage that the elimination of Schedule A, in particular, and a vast block of tax legislation which has been in being for many decades and generations was bound to give rise to complicated problems and that I should be lacking in consideration to the Committee and the House if I did not take the greatest care to ensure that all the points raised in the course of discussion were properly dealt with on Report.
The reason why we have so many Amendments is that I am endeavouring to meet many good points which have been made and in many cases the points could not be met until the Bill was published. The hon. Member for Cardiff, South-East will find that a great proportion of the Amendments involve drafting points and that practically all the others are designed to meet points for the benefit of the taxpayer which have been put forward since the Bill was published.
With regard to precedent, I do not think the hon. Member is right in saying that it is abnormal to take the recommittal and Report stages the same day. I should have thought, from recollection, that it was our practice to take them the same day. The number of Amendments this year is by no means unprecedented. There are 99 Amendments tabled this year. There were 127 in 1960 and 61 in 1947, and, without counting the number of words, I think that the hon. Member will find that the total amount of paper presented—the total lineage, as it were—was probably as great if not greater. There are, therefore, precedents for this.
As for the notice, I did my best and issued instructions that the drafting of the Amendments should go ahead as quickly as possible to ensure that as many Amendments as possible were put down at an early stage. No less than two-thirds were printed in the Notices of Amendments issued by 14th June.
I agree that there are many Amendments which, I accept, involve careful examination by the Committee. They are drafting Amendments or, by and large, concessions to meet the convenience of the taxpayer. I do not, and will
1150
not, accept that this is being inconsiderate to the House.
4.10 p.m.
Mr. G. R. Mitchison: The right hon. Gentleman's explanation will not wash when one looks at the facts. The facts are that some new Schedules, in particular, three long new Schedules, have been introduced rather at the last moment, and they are Schedules which were not discussed in Committee. Certainly, there was no careful or elaborate discussion. If the Chancellor of the Exchequer chooses to separate the points which he has raised by Amendments into those which arose out of discussion in Committee and others which arose from untidiness or omissions in drafting, he will find that the great majority are of the latter and not of the former kind.
I wish to point out some of the consequences of this kind of behaviour. It is not only extremely inconvenient to hon. Members of the House, and particularly of the Opposition, who have to consider the matter, but it involves a difficulty for other bodies and people. To some degree, all of these Amendments affect persons outside the House. If they are introduced at the last moment in this way, those persons have no opportunity of raising points that they desire to raise and we in the House have little or no opportunity of consulting them properly. One Amendment, for example, results from representations made from outside the House and, no doubt, there are a good many similar Amendments if one knew all the facts. That kind of consultation cannot take place on Amendments which are introduced at the last moment.
The Chancellor says, and no doubt, broadly, he is right, that a great deal of the Amendments are merely to tidy up loose ends, correct mistakes and omissions, and so on. Without going into whether that is a sufficient excuse, it leaves it for the right hon. Gentleman and those who advise and support him to judge whether these changes are material. Governments, even Chancellors of the Exchequer and even draftsmen, inside or outside Parliament, are not infallible and a change which ought to have been introduced may well have escaped the attention, and is bound to escape the attention, of those who are

1151
directly responsible for bringing in the Amendments.
It is not right to deprive the Opposition of seeing whether, by inadvertence—I would not attribute anything more than that to it—a change has been made which has an effect considerably greater than the Chancellor expected. The result of this kind of behaviour, the introduction of volumes of Amendments at the last moment, whether it has happened before or not, deprives the House of a proper opportunity of considering legislation which is not only exceedingly complicated, but will affect, in this instance, a very large number of people.
I trust that whatever happens on this occasion the Government will get out of the habit of doing this kind of thing. If they have done it before, that does not make it any better. I strongly suspect that on this occasion the amount of new matter which has been introduced, and the volume and the importance of it, is greater than has happened in the past.
4.14 p.m.
Mr. William Warbey: Right hon. and hon. Members have a duty to those who will operate the Statute and to those whom it will affect. That is why it is essential not only that there should be a proper time for consideration by this House, but also that there
should be proper time for consideration outside.
The Chancellor of the Exchequer has admitted that most of the Amendments, one of them running to no less than four and a half pages, are in the nature of afterthoughts, which are perfectly legitimate. The complicated changes that the Chancellor proposes to introduce involve a number of considerations which do not admit of solutions being thought out in a matter of hours or even days. Therefore, we have had put upon the Order Paper during the past week, day after day, a succession of afterthoughts.
Some afterthoughts were put down on Thursday, we had more on Friday and we had some further afterthoughts put down yesterday, which have appeared only on today's Notice Paper. What about the afterthoughts which occur today or will occur tomorrow? Is there to be no time to consider them? That is the matter to which the Chancellor should address himself. If this tidying-up process is to be done properly, there must be adequate time for all the afterthoughts to be incorporated in the Bill. That is why we must reject what the Chancellor is asking for.
Question put: —
The House divided: Ayes 219, Noes 186.

Division No. 143.]

AYES

[4.17 p.m.

Allason, James

Cordeaux, Lt-Col. J. K.

Godber, Rt. Hon. J. B.

Arbuthnot, John

Corfield, F. V.

Goodhart, Philip

Ashton, Sir Hubert

Costain, A. P.

Goodhew, Victor

Awdry, Daniel (Chippenham)

Coulson, Michael

Gower, Raymond

Balniel, Lord

Craddock, Sir Beresford (Spelthorne)

Grant-Ferris, R.

Barber, Anthony

Crosthwaite-Eyre, Col. Sir Oliver

Green, Alan

Barlow, Sir John

Cunningham, Knox

Gresham Cooke, R.

Barter, John

Currie, G. B. H.

Grimond, Rt. Hon. J.

Batsford, Brian

Dalkeith, Earl of

Gurden, Harold

Baxter, Sir Beverley (Southgate)

d'Avigdor-Goldsmid, Sir Henry

Hamilton, Michael (Wellingborough)

Bell, Ronald

Donaldson, Cmdr. C. E. M.

Harris, Frederic (Croydon, N.W.)

Bennett, Dr. Reginald (Gos & Fhm)

du Cann, Edward

Harrison, Brian (Maldon)

Bevins, Rt. Hon. Reginald

Duncan, Sir James

Harrison, Col. Sir Harwood (Eye)

Biffen, John

Duthie, Sir William

Harvey, Sir Arthur Vere (Macclesf'd)

Biggs-Davison, John

Elliot, Capt. Walter (Carshalton)

Hastings, Stephen

Birch, Rt. Hon. Nigel

Emery, Peter

Heald, Rt. Hon. Sir Lionel

Bishop, F. P.

Emmet, Hon. Mrs. Evelyn

Henderson, John (Cathcart)

Black, Sir Cyril

Errington, Sir Eric

Hendry, Forbes

Box, Donald

Farey-Jones, F. W.

Hill, J. E. B. (S. Norfolk)

Boyd-Carpenter, Rt. Hon. John

Farr, John

Hirst, Geoffrey

Braine, Bernard

Fell, Anthony

Hobson, Rt. Hon. Sir John

Bromley-Davenport,Lt.-Col.SirWalter

Finlay, Graeme

Holland, Philip

Brooman-White, R.

Fletcher-Cooke, Charles

Hornby, R. P.

Browne, Percy (Torrington)

Forrest, George

Hornsby-Smith, Rt. Hon. Dame P.

Bullard, Denys

Foster, John

Howard, John (Southampton, Test)

Bullus, Wing Commander Eric

Fraser, Ian (Plymouth, Sutton)

Hughes-Young, Michael

Carr, Robert (Mitcham)

Freeth, Denzil

Hulbert, Sir Norman

Cary Sir Robert

Gammans, Lady

Irvine, Bryant Godman (Rye)

Channon, H. P. G.

Gilmour, Ian (Norfolk, Central)

James, David

Cleaver, Leonard

Gilmour, Sir John (East Fife)

Jenkins, Robert (Dulwich)

Cooke, Robert

Glover, Sir Douglas

Johnson, Dr. Donald (Carlisle)

Cooper-Key, Sir Neill

Glyn, Sir Richard (Dorset, N.)

Johnson, Eric (Blackley)

Johnson Smith, Geoffrey

Nabarro, Sir Gerald

Smithers, Peter

Kerby, Capt. Henry

Neave, Airey

Spearman, Sir Alexander

Kerr, Sir Hamilton

Noble, Rt. Hon. Michael

Stanley, Hon. Richard

Kershaw, Anthony

Nugent, Rt. Hon. Sir Richard

Stevens, Geoffrey

Kitson, Timothy

Oakshott, Sir Hendrie

Steward, Harold (Stockport, S.)

Lancaster, Col. C. G.

Orr, Capt. L. P. S.

Stodart, J. A.

Leavey, J. A.

Osborn, John (Hallam)

Stoddart-Scott, Col. Sir Malcolm

Leburn, Gilmour

Osborne, Sir Cyril (Louth)

Storey, Sir Samuel

Legge-Bourke, Sir Harry

Page, Graham (Crosby)

Studholme, Sir Henry

Lewis, Kenneth (Rutland)

Page, John (Harrow, Wast)

Summers, Sir Spencer

Linstead, Sir Hugh

Pannell, Norman (Kirkdale)

Taylor, Sir Charles (Eastbourne)

Litchfield, Capt. John

Peel, John

Taylor, Edwin (Bolton, E.)

Lloyd, Rt. Hon. Selwyn (Wirral)

Peyton, John

Teeling, sir William

Longbottom, Charles

Pickthorn, Sir Kenneth

Temple, John M.

Longden, Gilbert

Pike, Miss Mervyn

Thomas, Sir Leslie (Canterbury)

Loveys, Walter H.

Pilkington, Sir Richard

Thomas, Peter (Conway)

Lubbock, Eric

Pitt, Dame Edith

Thompson, Sir Kenneth (Walton)

Lucas, Sir Jocelyn

Pott, Percivall

Thornton-Kemsley, Sir Colin

Lucas-Tooth, Sir Hugh

Powell, Rt. Hon. J. Enoch

Thorpe, Jeremy

McAdden, Sir Stephen

Prior, J. M. L.

Tiley, Arthur (Bradford, W.)

MacArthur, Ian

Proudfoot, Wilfred

Tilney, John (Wavertree)

McLaren, Martin

Pym, Francis

Touche, Rt. Hon. Sir Gordon

Maclay, Rt. Hon. John

Quennell, Miss J. M.

Turner, Colin

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

Ramsden, James

Tweedsmuir, Lady

MacLeod, Sir J. (Ross and Cromarty)

Rawlinson, Sir Peter

Vane, W. M. F.

McMaster, Stanley R.

Redmayne, Rt. Hon. Martin

Vickers, Miss Joan

Macpherson,Rt.Hn.Niall(Dumfries)

Rees, Hugh

Vosper, Rt. Hon. Dennis

Maginnis, John E.

Renton, Rt. Hon. David

Wakefield, Sir Wavell

Maitland, Sir John

Ridley, Hon. Nicholas

Wall, Patrick

Markham, Major Sir Frank

Ridsdale, Julian

Ward, Dame Irene

Marshall, Sir Douglas

Roberts, Sir Peter (Heeley)

Wells, John (Maidstone)

Marten, Neil

Robertson, Sir D. (C'thn's & S'th'ld)

Williams, Dudley (Exeter)

Mathew, Robert (Honiton)

Robinson, Rt. Hn. Sir R. (B'pool,S.)

Williams, Paul (Sunderland, S.)

Matthews, Gordon (Meriden)

Ropner, Col. Sir Leonard

Wills, Sir Gerald (Bridgwater)

Maudling, Rt. Hon. Reginald

Royle, Anthony (Richmond, Surrey)

Wise, A. R.

Mawby, Ray

Russell, Ronald

Woodhouse, C. M.

Maxwell-Hyslop, R. J.

Sandys, Rt. Hon. Duncan

Woodnutt, Mark

Mills, Stratton

Scott-Hopkins, James

Worsley, Marcus

Montgomery, Fergus

Sharples, Richard

Yates, William (The Wrekin)

More, Jasper (Ludlow)

Shaw, M.

Morrison, John

Skeet, T. H. H.

TELLERS FOR THE AYES:

Mott-Radclyffe, Sir Charles

Smith, Dudley (Br'ntf'd & Chiswick)

Mr. Chichester-Clark and

Mr. Frank Pearson.

NOES

Ainsley, William

Duffy, A. E. P.

Hunter, A. E.

Albu, Austen

Ede, Rt. Hon. C.

Hynd, H. (Accrington)

Allaun, Frank (Salford, E.)

Edelman, Maurice

Hynd, John (Attercliffe)

Allen, Scholefield (Crewe)

Edwards, Rt. Hon. Ness (Caerphilly)

Irvine, A. J. (Edge Hill)

Awbery, Stan (Bristol, Central)

Edwards, Robert (Bilston)

Irving, Sydney (Dartford)

Bacon, Miss Alice

Evans, Albert

Janner, Sir Barnett

Barnett, Guy

Fernyhough, E.

Jay, Rt. Hon. Douglas

Bellenger, Rt. Hon. F. J.

Finch, Harold

Jenkins, Roy (Stechford)

Bence, Cyril

Fletcher, Eric

Johnson, Carol (Lewisham, S)

Bennett, J. (Glasgow, Bridgeton)

Foot, Dingle (Ipswich)

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

Benson, Sir George

Foot, Michael (Ebbw Vale)

Jones, Dan (Burnley)

Blackburn, F.

Forman, J. C.

Jones, T. W. (Merioneth)

Bottomley, Rt. Hon. A. G.

Fraser, Thomas (Hamilton)

Kelley, Richard

Bowden, Rt. Hn. H. W.(Leics, S.W.)

Galpern, Sir Myer

Key, Rt. Hon. C. W.

Bowles, Frank

Ginsburg, David

King, Dr. Horace

Boyden, James

Gordon Walker, Rt. Hon. P. C.

Lee, Frederick (Newton)

Braddock, Mrs. E. M.

Gourlay, Harry

Lee, Miss Jennie (Cannock)

Bradley, Tom

Griffiths, Rt. Hon. James (Llanelly)

Lewis, Arthur (West Ham, N.)

Bray, Dr. Jeremy

Griffiths, W. (Exchange)

Lipton, Marcus

Brockway, A. Fenner

Hale, Leslie (Oldham, w.)

Loughlin, Charles

Brown, Rt. Hon. George (Belper)

Hamilton, William (West Fife)

McBride, M.

Butler, Herbert (Hackney, C.)

Hannan, William

McCann, John

Butler, Mrs. Joyce (Wood Green)

Harper, Joseph

McInnes, James

Callaghan, James

Hart, Mrs. Judith

McKay, John (Wallsend)

Carmichael, Neil

Hayman, F. H.

Mackie, John (Enfield, East)

Castle, Mrs. Barbara

Healey, Denis

MacMillan, Malcolm (Western Isles)

Collick, Percy

Henderson,Rt.Hn.Arthur(RwlyRegis)

MacPherson, Malcolm (Stirling)

Craddock, George (Bradford, S.)

Herbison, Miss Margaret

Mallalieu, E. L. (Brigg)

Cronin, John

Hill (Midlothian)

Manuel, Archie

Dalyell, Tam

Hilton, A. V.

Mapp, Charles

Davies, G. Elfed (Rhondda, E.)

Holman, Percy

Mason, Roy

Davies, Harold (Leek)

Hooson, H. E.

Mayhew, Christopher

Davies, Ifor (Gower)

Houghton, Douglas

Mellish, R. J.

Davies, S. O. (Merthyr)

Howell, Charles A. (Perry Barr)

Mendelson, J. J.

Deer, George

Howell, Denis (Small Heath)

Millan, Bruce

Dempsey, James

Hoy, James H.

Milne, Edward

Diamond, John

Hughes, Cledwyn (Anglesey)

Mitchison, G. R.

Dodds, Norman

Hughes, Emrys (S. Ayrshire)

Monslow, Walter

Driberg, Tom

Hughes, Hector (Aberdeen, N.)

Morris, John

1154

1155

Moyle, Arthur

Robertson, John (Paisley)

Thomas, George (Cardiff, W.)

Mulley, Frederick

Robinson, Kenneth (St. Pancras, N.)

Thomas, Iorwerth (Rhondda, W.)

Neal, Harold

Rodgers, W. T. (Stockton)

Thomson, G. M. (Dundee, E.)

Noel-Baker, Francis (Swindon)

Ross, William

Thornton, Ernest

Noel-Baker,Rt.Hn.Philip(Derby,S.)

Royle, Charles (Salford, West)

Tomney, Frank

Oliver, G. H.

Shinwell, Rt. Hon. E.

Warbey, William

O'Malley, B. K.

Short, Edward

Watkins, Tudor

Oram, A. E.

Silverman, Julius (Aston)

Wells, William (Walsall, N.)

Owen, Will

Silverman, Sydney (Nelson)

White, Mrs. Elrene

Pannell, Charles (Leeds, W.)

Skeffington, Arthur

Whitlock, William

Parkin, B. T.

Slater, Mrs. Harriet (Stoke, N.)

Wigg, George

Pavitt, Laurence

Slater, Joseph (Sedgefield)

Wilkins, W. A.

Pearson, Arthur (Pontypridd)

Small, William

Willey, Frederick

Peart, Frederick

Smith, Ellis (Stoke, S.)

Williams, D. J. (Neath)

Prentice, R. E.

Sorensen, R. W.

Williams, W. R. (Openshaw)

Probert, Arthur

Spriggs, Leslie

Willis, E. G. (Edinburgh, E.)

Pursey, Cmdr. Harry

Steele, Thomas

Wilson, Rt. Hon. Harold (Huyton)

Rankin, John

Stewart, Michael (Fulham)

Winterbottom, R. E.

Redhead, E. C.

Stones, William

Woof, Robert

Rees, Merlyn (Leeds, S.)

Strachey, Rt. Hon. John

Yates, Victor (Ladywood)

Reynolds, G. W.

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

Zilliacus, K.

Rhodes, H.

Swingler, Stephen

Roberts, Albert (Normanton)

Taverne, D.

TELLERS FOR THE NOES:

Roberts, Goronwy (Caernarvon)

Taylor, Bernard (Mansfield)

Mr. G. H. R. Rogers and

Mr. Lawson.

Ordered,
That the Finance Bill, as amended, may be considered immediately after the recommittal of the Bill and report thereof, notwithstanding the practice of this House as to the interval between the stages of such a Bill.

ORDERS OF THE DAY

  FINANCE BILL
  Order for Consideration, as amended, read.
  4.20 p.m.
  Captain L. P. S. Orr rose—
  Mr. John Wells: Object.
  Mr. Speaker: In the circumstances, I am able to allow the hon. and gallant Member for Down, South (Captain Orr) to make a short statement in explanation of why he wishes to move the Motion on the Order Paper.
  Captain Orr: I have on the Order Paper the Motion, That the Bill be recommitted to a Committee of the whole House.
  I wished merely to say, Mr. Speaker, that, in view of the feeling in the House that there is a very great deal of business to be got through, I intended to content myself merely with saying that my object in putting the Motion on the Order Paper was to draw attention to the fact that it was not possible, in the course of this Finance Bill, to move that the Purchase Tax be removed from linen handkerchiefs, which is a matter of very great importance—
  Mr. Speaker: At this point I must intervene and say that I must decline to propose the Question.
  Motion made, and Question proposed,
  That the Bill be recommitted to a Committee of the whole House in respect of the Amendments to Clause 20, page 18, lines 32 and 38; Clause 21, page 20, lines 3 and 35; Clause 22, page 21, lines 9, 16, 26, 30 and 32; Clause 24, page 23, line 28; Clause 29, page 27, lines 24 and 37; Clause 41, page 42, line 39 and page 44, line 40; Clause 59, page 58, lines 16 and 24; Clause 67, page 64, line 18; Schedule 10, page 86, line 12; Schedule 11, page 95, line 29; and Schedule 12, page 98, line 42, standing on the Notice Paper in the name of the Chancellor of the Exchequer.—[Mr. Maudling.]
  Mr. Douglas Houghton: I am sorry that I must carry our protest a stage further. In introducing the complexities of Chapter 11 of the Bill the Government should have published a White Paper to assist the House in understanding the structure of the new Case VIII of Schedule D. Having failed to do that, surely they owed it to the House that when introducing numerous and complex Amendments at this stage, an explanatory statement should have accompanied the Amendments. The ill-equipment of the House to cope with the proposals of the Executive is absolutely ludicrous.
  The House can move promptly and quickly when it knows what it is doing, but when it is presented with Amendments and new Clauses on the Notice Paper at short notice, it really is not fair to ask us to proceed with the business without full understanding of what we are being asked to do.

  1157
  We on these benches lack the facilities of experts and civil servants. The Chancellor of the Exchequer has in his hand a brief prepared by the Inland Revenue, explaining exactly what everything is about. We on this side have no similar assistance in doing our work; nor, of course, have hon. Gentlemen on the back benches opposite.
  Although I have made this protest time and time again, I will go on making it. The House of Commons cannot do its job properly in the manner in which we do our business at the present time. It is up to the Chancellor—a new Chancellor, who should understand the difficulties—to ensure that we are given the help which will enable us to co-operate with him in getting the Bill through.
  I attach no blame to the Inland Revenue for much that is now incorporated in Amendments and new Clauses. It was given a tremendous job at short notice. The new Case VIII of Schedule D, covering, as the Chancellor said a few moments ago, the antiquities of Schedule A, obviously presents many difficulties. Many of the Amendments and new Clauses on the Notice Paper are due to the criticisms and helpful and constructive advice given by informed bodies outside the House as well as in it which will enable the Chancellor to make the Bill a better one. But opportunities for consultation are denied when long and complex Amendments and new Clauses are presented at the last moment. It would at least facilitate consultation if we could have explanations at the same time.
  I have no doubt that some of the new Clauses are completely new drafts because the amendments to the old Clauses would be so tortuous that it would all be most difficult to follow. Therefore, apparently, the Chancellor has presented an entirely new version in order to help. But how is one to compare the old version with the new version unless greater assistance is given to us than just having the Amendments and new Clauses stuck on the Order Paper in this way?
  When will this House be able to do its job properly? When will Ministers bring the procedure up to date and give hon. Members on both sides the opportunity to which we are entitled? It is an insult to the House to come and ask
  1158
  us to pass these Amendments and new Clauses with such little time for consideration. Is there to be no thought for the responsibilities which we have to discharge here? Is it just a rubber stamp which the Chancellor wants? Is it a kind of sausage machine in which he is going to pour Amendments and new Clauses and turn a handle and expect them to come out the other end?
  It is impossible to keep one's temper when one is put in this position year after year. Year after year I make this plea, but Chancellors never do anything about it. They say that it is impossible, or awkward, or difficult. The Financial Secretary makes a speech on Second Reading which would be much more helpful if it were already written and circulated before he started his speech. Time and again we have this kind of treatment. What has the Chancellor to say? If we stay here all afternoon we will go on plugging at this in order to get some sense out of a Government long overdue for reform.
  The Chancellor of the Exchequer (Mr. Reginald Maudling): I make no complaint that the hon. Member for Sowerby (Mr. Houghton) should support the rights of the House in these matters. He said that he had been making this complaint year after year, which proves my point that this year I have been following precedent established over many years.
  It may well be that our procedures can be improved. The hon. Gentleman has mentioned the idea of an explanatory memorandum. It would probably be difficult to have an explanatory memorandum about Amendments at the Report stage of a Bill. But for the future—it cannot be for the present—I am impressed by the point which he has made, that where one has a particularly complicated Measure ways and means might be found of providing an explanatory memorandum.
  The hon. Gentleman is quite right in one point that he made. Schedule 4 has been put down afresh. I thought that it would be for the convenience of the House if it were done that way rather than by a whole series of Amendments.
  I can only repeat what I said earlier, that we are following precedent in these matters. More Amendments than this

  1159
  year have been put down in the past. I have endeavoured to have all the Amendments tabled as early as possible, and the great bulk of them were. Every Amendment has been tabled as soon as it possibly could be. The House will find that a very large number of the Amendments are drafting, and that in almost every other case they are Amendments of substance to meet legitimate points made in Committee or the views of interested bodies.
  I am sorry that the hon. Member used such vehemence. As he contended that I was following established practice, I can hardly cross swords with him.
  4.30 p.m.
  Mr. James Callaghan: If the existing practice is inconsiderate, then the Chancellor is inconsiderate. The existing practice is inconsiderate. On the question of Schedule 4, for example, hon. Members will have noticed the celerity with which the Chancellor replied to our criticism. That is because we had the courtesy to give him notice that we intended to raise it. He was, therefore, able to come here armed with the figures about past years. I am very glad that he did, but, as I put to him privately on this question of Schedule 4, it is all very well—
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. I am reluctant to interrupt the hon. Member, but am I not right in thinking that Schedule 4 is not, in fact, included in this recommittal Motion?
  Mr. Callaghan: I do not know, Mr. Deputy-Speaker.
  Mr. Deputy-Speaker: I believe it not to be included and I think, therefore, that the debate must be confined to what is included in the Motion.
  Mr. Callaghan: That is all very well, Mr. Deputy-Speaker, but you did not stop the Chancellor. Is there one rule for the Chancellor and another for hon. Members of the Opposition? I should like to know.
  Mr. Deputy-Speaker: The hon. Member is quite entitled to make the point. Certainly, the same rule applies to both sides of the House. I thought that the Chancellor was making a reply to a point
  1160
  that had been put. He did not go into detail, and I was trying to intervene before the hon. Member went into details which would, I believe, be out of order.
  Mr. Callaghan: As a matter of fact, Mr. Deputy-Speaker, Schedule 4 was not mentioned until the Chancellor raised it. Am I to take it that the Chancellor has the right to put his case without our making some sort of reply?
  Mr. Maudling: The hon. Member for Sowerby (Mr. Houghton) referred to Schedules. I was referring to those Schedules, and Schedule 4 is one of those to which the hon. Gentleman was referring.
  Mr. Callaghan: A number of Schedules are in the recommittal Motion. Schedules 10, 11 and 12 are mentioned, and my hon. Friend the Member for Sowerby could have been referring to any one of them when he used the word "Schedules". The Chancellor of the Exchequer has specifically referred to Schedule 4. I should like to claim your indulgence, Mr. Deputy-Speaker, to put our observations on Schedule 4. If Schedule 4 is to be reprinted for the convenience of the House, it would be very helpful if, in addition, a mark could be made on the Order Paper showing us what part of it has been altered. If it could be done in italics or capital letters, or whatever it may be, I am sure that that would be of great assistance, and that every Member would appreciate it. To have to take three or four pages of a Schedule, try to compare them with the Bill, and read both at the same time is almost an impossible task.
  Mr. Maudling: A lot of this is drafting.
  Mr. Callaghan: The Chancellor says that a lot of this is drafting. This may well be true, but if it is drafting why have we to recommit the Bill on so many drafting points? The Chancellor has had over a year in which to prepare for this Bill. It is not as if this started last April. It started in April of the previous year. It seems to me to be intolerable if we are to have Amendments still going on to the Notice Paper and which we have to reconsider.
  My hon. Friend the Member for Gloucester (Mr. Diamond), who is

  1161
  extremely vigilant, has pointed out to me that one of the Amendments which we are asked to recommit has been altered between last Monday and yesterday. It is not starred because the Amendment, I believe, is a very small one, but the Government have, in fact, put another three lines into the Amendment which they are proposing should be discussed now. Unless someone was watching this very vigilantly, no one would know that those extra three lines had been put in. There is no guidance to the House on these matters.
  Obviously, it is the job of the Opposition to watch these things, but it is also the job of the Government to be considerate, and the Government have not been considerate on these matters. We need help on this, as hon. Members opposite may soon discover when they have this to do from the Opposition benches, if we are to do a reasonable job on the Finance Bill.
  The Chancellor said that this recommittal was not exceptional. I agree that it is not. In 1960 there were about 120 Amendments, and there are now 96. In 1960, when the Government put down many of the Amendments, more than even now, their action provoked a very long debate and led to an apology from Lord Amory. I have not heard yet that the Chanceller feels that there is anything exceptional about this. Indeed, he defended himself by saying that he was following the usual practice. I do
  not think that the usual practice is good enough.
  Last year, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) had down 32 Amendments and new Clauses; today, it is 99. The previous year there were 42 Amendments and new Clauses, and the Chancellor has had to go back to 1960, when an apology was made by the Government, and to 1947, the circumstances of which I do not recall at the moment, to find two examples of where there has been as much rewriting of the Bill as on this occasion. I do not accept that we should recommit the Bill on these matters in this way without a much more satisfactory explanation from the Chancellor.
  We have not heard yet one single word of explanation as to why so many of these new Clauses, new Amendments, and Amendments which relate to Schedule A, should be delayed for so long, and for which the House has been given less than a week to consider them. If they are drafting points, the original drafting should have been done very much better. In so far as they meet the convenience of hon. Members generally, we can have no complaint, but the great majority of these, in the words of the Chancellor, are drafting Amendments, and that shows slipshod work on the part of the Government.
  Question put: —
  The House divided: Ayes 225, Noes 190.

  Division No. 144.]

  AYES

  [4.40 p.m.

  Allason, James

  Bullus, Wing Commander Eric

  Farey-Jones F. W.

  Arbuthnot, John

  Carr, Rt. Hon. Robert (Mitcham)

  Farr, John

  Ashton, Sir Hubert

  Cary, Sir Robert

  Fell, Anthony

  Awdry, Daniel (Chippenham)

  Channon, H. P. G.

  Finlay, Graeme

  Balniel, Lord

  Chichester-Clark, R.

  Fletcher-Cooke, Charles

  Barber, Anthony

  Cleaver, Leonard

  Forrest, George

  Barlow, Sir John

  Cooke, Robert

  Fraser, Ian (Plymouth, Sutton)

  Barter, John

  Cooper-Key, Sir Neill

  Freeth, Denzil

  Batsford, Brian

  Cordeaux, Lt.-Col. J. K.

  Gammans, Lady

  Baxter, Sir Beverley (Southgate)

  Corfield, F. V.

  Gilmour, Ian (Norfolk, Central)

  Bell, Ronald

  Costain, A. P.

  Gilmour, Sir John (East Fife)

  Bennett, Dr. Reginald (Gos & Fhm)

  Coulson, Michael

  Glover, Sir Douglas

  Bevins, Rt. Hon. Reginald

  Craddock, Sir Beresford (Spelthorne)

  Glyn, Sir Richard (Dorset, N.)

  Biffen, John

  Crosthwalte-Eyre,Col. Sir Oliver

  Godber, Rt. Hon. J. B.

  Biggs-Davison, John

  Cunningham, Knox

  Goodhart, Philip

  Birch, Rt. Hon. Nigel

  Currie, G. B. H.

  Goodhew, Victor

  Bishop, F. P.

  Dalkeith, Earl of

  Gower, Raymond

  Black, Sir Cyril

  d'Avigdor-Goldsmid, Sir Henry

  Grant-Ferris, R.

  Box, Donald

  Digby, Simon Wingfield

  Green, Alan

  Boyd-Carpenter, Rt. Hon. John

  Donaldson, Cmdr. C. E. M.

  Gresham Cooke, R.

  Boyle, Rt. Hon. Sir Edward

  du Cann, Edward

  Grimond, Rt. Hon. J.

  Braine, Bernard

  Duncan, Sir James

  Grosvenor, Lord Robert

  Bromley Davenort,Lt.-Col.SirWalter

  Duthie, Sir William

  Gurden, Harold

  Brooman-White, R.

  Elliot, Capt. Walter (Carshalton)

  Hamilton, Michael (Wellingborough)

  Browne, Percy (Torrington)

  Emery, Peter

  Harris, Frederic (Croydon, N.W.)

  Bryan, Paul

  Emmet, Hon. Mrs. Evelyn

  Harrison, Brian (Maldon)

  Bullard, Denys

  Errington, Sir Eric

  Harrison, Col. Sir Harwood (Eye)

  Harvey, Sir Arthur Vere (Macclesf'd

  Maddan, Martin

  Scott-Hopkins, James

  Hastings, Stephen

  Maginnis, John E.

  Seymour, Leslie

  Heald, Rt. Hon. Sir Lionel

  Marshall, Sir Douglas

  Sharples, Richard

  Henderson, John (Cathcart)

  Marten, Neil

  Shaw, M.

  Hendry, Forbes

  Mathew, Robert (Honiton)

  Skeet, T. H. H.

  Hill, J. E. B. (S. Norfolk)

  Matthews, Cordon (Meriden)

  Smith, Dudley (Br'ntf'd & Chiswick)

  Hirst, Geoffrey

  Maudling, Rt. Hon. Reginald

  Smithers, Peter

  Hobson, Rt. Hon. Sir John

  Mawby, Ray

  Spearman, Sir Alexander

  Holland, Philip

  Maxwell-Hyslop, R. J.

  Speir, Rupert

  Hooson, H. E.

  Mills, Stratton

  Stanley, Hon. Richard

  Hornby, R. P.

  Montgomery, Fergus

  Stevens, Geoffrey

  Hornsby-Smith, Rt. Hon. Dame P.

  More, Jasper (Ludlow)

  Steward, Harold (Stockport, S.)

  Howard, John (Southampton, Ted)

  Morrison, John

  Stodart, J. A.

  Hughes Hallett, Vice-Admiral John

  Mott-Radclyffe, Sir Charles

  Stoddart-Scott, Col. Sir Malcolm

  Hughes-Young, Michael

  Nabarro, Sir Gerald

  Storey, Sir Samuel

  Hulbert, Sir Norman

  Noble, Rt. Hon. Michael

  Studholme, Sir Henry

  James, David

  Nugent, Rt. Hon. Sir Richard

  Summers, Sir Spencer

  Jenkins, Robert (Dulwich)

  Oakshott, Sir Hendrie

  Taylor, Sir Charles (Eastbourne)

  Johnson, Dr. Donald (Carlisle)

  Orr, Capt. L. P. S.

  Taylor, Edwin (Bolton, E.)

  Johnson, Eric (Blackley)

  Osborn, John (Hallam)

  Taylor, Frank (M'ch'st'r, Moss Side)

  Johnson Smith, Geoffrey

  Osborne, Sir Cyril (Louth)

  Teeling, Sir William

  Kerans, Cdr. J. S.

  Page, Graham (Crosby)

  Temple, John M.

  Kerby, Capt. Henry

  Page, John (Harrow, West)

  Thatcher, Mrs. Margaret

  Kerr, Sir Hamilton

  Pannell, Norman (Kirkdale)

  Thomas, Sir Leslie (Canterbury)

  Kershaw, Anthony

  Peel, John

  Thompson, Sir Kenneth (Walton)

  Kitson, Timothy

  Peyton, John

  Thorpe, Jeremy

  Lancaster, Col. C. G.

  Pilkthorn, Sir Kenneth

  Tiley, Arthur (Bradford, W.)

  Leavey, J. A.

  Pike, Miss Mervyn

  Tilney, John (Wavertree)

  Leburn, Cilmour

  Pilkington, Sir Richard

  Touche, Rt. Hon. Sir Gordon

  Legge-Bourke, Sir Harry

  Pitt, Dame Edith

  Turner, Colin

  Lewis, Kenneth (Rutland)

  Pott, Percivall

  Tweedsmuir, Lady

  Lilley, F. J. P.

  Powell, Rt. Hon. J. Enoch

  Vane, W. M. F.

  Linstead, Sir Hugh

  Prior, J. M. L.

  Vickers, Miss Joan

  Litchfield, Capt. John

  Proudfoot, Wilfred

  Vosper, Rt. Hon. Dennis

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Quennell, Miss J. M.

  Wade, Donald

  Longbottom, Charles

  Ramsden, James

  Wakefield, Sir Wavell

  Longden, Gilbert

  Rawlinson, Sir Peter

  Wall, Patrick

  Loveys, Walter H.

  Redmayne, Rt. Hon. Martin

  Ward, Dame Irene

  Lubbock, Eric

  Rees, Hugh (Swansea, W.)

  Wells, John (Maidstone)

  Lucas, Sir Jocelyn

  Renton, Rt. Hon. David

  Williams, Dudley (Exeter)

  Lucas-Tooth, Sir Hugh

  Ridley, Hon. Nicholas

  Williams, Paul (Sunderland, S.)

  McAdden, Sir Stephen

  Ridsdale, Julian

  Wills, Sir Gerald (Bridgwater)

  MacArthur, Ian

  Roberts, Sir Peter (Heeley)

  Wise, A. R.

  McLaren, Martin

  Robertson, Sir D. (C'thn's & S'th'ld)

  Woodhouse, G. M.

  Maclay, Rt. Hon. John

  Robinson, Rt. Hn. Sir R. (B'pool,S.)

  Woodnutt, Mark

  Maclean,SirFitzroy(Bute&N.Ayrs)

  Ropner, Col. Sir Leonard

  Wooliam, John

  MacLeod, Sir J. (Ross and Cromarty)

  Royle, Anthony (Richmond, Surrey)

  McMaster, Stanley R.

  Russell, Ronald

  TELLERS FOR THE AYES:

  Macpherson,Rt.Hn.Niall(Dumfries)

  Sandys, Rt. Hon. Duncan

  Mr. Frank Pearson and Mr. Pym.

  NOES

  Ainsley, William

  Davies, Ifor (Gower)

  Healey, Denis

  Albu, Austen

  Davies, S. O. (Merthyr)

  Henderson,Rt.Hn. Arthur( Rwly Regis)

  Allaun, Frank (Salford, E.)

  Deer, George

  Herbison, Miss Margaret

  Allen, Scholefield (Crewe)

  Dempsey, James

  Hill, J. (Midlothian)

  Awbery, Stan (Bristol, Central)

  Diamond, John

  Hilton, A. V.

  Bacon, Miss Alice

  Dodds, Norman

  Holman, Percy

  Barnett, Guy

  Driberg, Tom

  Houghton, Douglas

  Bellenger, Rt. Hon. F. J.

  Duffy, A. E. P.

  Howell, Charles A. (Perry Barr)

  Bence, Cyril

  Ede, Rt. Hon. C.

  Howell, Denis (Small Heath)

  Bennett, J. (Glasgow, Bridgeton)

  Edelman, Maurice

  Hoy, James H.

  Benson, Sir George

  Edwards, Rt. Hon. Ness (Caerphilly)

  Hughes, Cledwyn (Anglesey)

  Blackburn, F.

  Edwards, Robert (Bilston)

  Hughes, Emrys (S. Ayrshire)

  Bottomley, Rt. Hon. A. G.

  Evans, Albert

  Hughes, Hector (Aberdeen, N.)

  Bowden, Rt. Hn. H. W. (Leics, S.W.)

  Fernyhough, E.

  Hunter, A. E.

  Bowles, Frank

  Finch, Harold

  Hynd, H. (Accrington)

  Boyden, James

  Fletcher, Eric

  Hynd, John (Attercliffe)

  Braddock, Mrs. E. M.

  Foot, Dingle (Ipswich)

  Irvine, A. J. (Edge Hill)

  Bradley, Tom

  Foot, Michael (Ebbw Vale)

  Irving, Sydney (Dartford)

  Bray, Dr. Jeremy

  Forman, J. C.

  Janner, Sir Barnett

  Brockway, A. Fenner

  Fraser, Thomas (Hamilton)

  Jay, Rt. Hon. Douglas

  Brown, Rt. Hon. George (Belper)

  Galpern, Sir Myer

  Jenkins, Roy (Stechford)

  Butler, Herbert (Hackney, C.)

  Ginsburg, David

  Johnson, Carol (Lewisham, S.)

  Butler, Mrs. Joyce (Wood Green)

  Gordon Walker, Rt. Hon. P. C.

  Jones,Rt.Hn. A Creech(Wakefield)

  Callaghan, James

  Gourlay, Harry

  Jones, Dan (Burnley)

  Carmichael, Neil

  Griffiths, Rt. Hon. James (Llanelly)

  Jones, T. W. (Merioneth)

  Castle, Mrs. Barbara

  Griffiths, W. (Exchange)

  Kelley, Richard

  Collick, Percy

  Hale, Leslie (Oldham, W.)

  Kenyon, Clifford

  Corbet, Mrs. Freda

  Hamilton, William (West Fife)

  Key, Rt. Hon. C. W.

  Craddock, George (Bradford, S.)

  Hannan, William

  King, Dr. Horace

  Dalyell, Tam

  Harper, Joseph

  Lee, Frederick (Newton)

  Davies, G. Elfed (Rhondda, E.)

  Hart, Mrs. Judith

  Lee, Miss Jennie (Cannock)

  Davies, Harold (Leek)

  Hayman, F. H.

  Lever, Harold (Cheetham)

  1164

  1165

  Lewis, Arthur (West Ham, N.)

  Pannell, Charles (Leeds, W.)

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

  Lipton, Marcus

  Parkin, B. T.

  Swingler, Stephen

  Loughlin, Charles

  Pavitt, Laurence

  Taverne, D.

  McBride, N.

  Pearson, Arthur (Pontypridd)

  Taylor, Bernard (Mansfield)

  McCann,,John

  Peart, Frederick

  Thomas, George (Cardiff, W.)

  MacColl, James

  Prentice, R. E.

  Thomas, Iorwerth (Rhondda, W.)

  Mclnnes, James

  Probert, Arthur

  Thompson, Dr. Alan (Dunfermline)

  McKay, John (Wallsend)

  Pursey, Cmdr. Harry

  Thomson, G. M. (Dundee, E.)

  Mackie, John (Enfield, East)

  Rankin, John

  Thornton, Ernest

  MacMillan, Malcolm (Western Isles)

  Redhead, E. C.

  Tomney, Frank

  MacPherson, Malcolm (Stirling)

  Reynolds, G. W.

  Warbey, William

  Mallalieu, E. L. (Brigg)

  Rhodes, H.

  Watkins, Tudor

  Manuel, Archie

  Roberts, Albert (Normanton)

  Weitzman, David

  Mapp, Charles

  Roberts, Goronwy (Caernarvon)

  Wells, Percy (Faversham)

  Mason, Roy

  Robertson, John (Paisley)

  White, Mrs. Eirene

  Mayhem, Christopher

  Robinson, Kenneth (St. Pancras, N.)

  Whitlock, William

  Mellish, R. J.

  Rodgers, W. T. (Stockton)

  Wigg, George

  Mendelson, J. J.

  Ross, William

  Wilkins, W. A.

  Millan, Bruce

  Royle, Charles (Salford, West)

  Willey, Frederick

  Milne, Edward

  Shinwell, Rt. Hon. E.

  Williams, D. J. (Neath)

  Mitchison, G. R.

  Short, Edward

  Williams, W. R. (Openshaw)

  Monslow, Walter

  Silverman, Julius (Aston)

  Willis, E. G. (Edinburgh, E.)

  Moody, A. S.

  Silverman, Sydney (Nelson)

  Wilson, Rt. Hon. Harold (Huyton)

  Morris, John

  Skeffington, Arthur

  Winterbottom, R. E.

  Moyle, Arthur

  Slater, Joseph (Sedgefield)

  Woof, Robert

  Mulley, Frederick

  Small, William

  Wyatt, Woodrow

  Neal, Harold

  Smith, Ellis (Stoke, S.)

  Yates, Victor (Ladywood)

  Noel-Baker, Francis (Swindon)

  Sorensen, R. W.

  Zilliacus, K.

  Noel-Baker,Rt.Hn.Philip(Derby,S.)

  Spriggs, Leslie

  Oliver, G. H.

  Steele, Thomas

  TELLERS FOR THE NOES:

  O'Malley, B. K.

  Stewart, Michael (Fulham)

  Mr. G. H. R. Rogers and

  Oram, A. E.

  Stones, William

  Mr. Lawson.

  Owen, Will

  Strachey, Rt. Hon. John

  Bill immediately considered in Committee.
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]
  Clause 20.—(TRANSITIONAL PROVISIONS FOR SCHEDULE A TAX FOR 1963–64.)
  The Solicitor-General (Sir Peter Rawlinson): I beg to move, in page 18, line 32, to leave out from "landlord" to "shall" in line 33.
  The Chairman: I think that it would be convenient to take the following Amendment, in page 18, leave out lines 38 and 39.
  The Solicitor-General: That would be convenient, Sir William.
  The Amendment corrects a drafting mistake in Clause 20(2). Clause 20 deals with the transitional provisions relating to the taxation of rents and other income from real property, and the Amendment removes an unintended distinction between landlords directly assessed and landlords indirectly assessed.
  Subsection (2) provides that maintenance claims cannot be made against Schedule A if the person who pays the tax is in fact recouped by deduction from ground rent. As drafted, subsection (2,b) does not apply to the position of intermediate landlords, landlords who
  pay rent under long leases and who receive rents under short leases from which Schedule A has been deducted. In other words, there are two kinds of landlords, those who pay their Schedule A direct and those who pay indirectly by suffering a deduction from the rent.
  This paragraph as drafted created an unintended distinction by the inclusion of the reference to Sections 109 and 110 of the Income Tax Act, 1952. If that reference is omitted by this and the consequential Amendment, the result will be that subsection (2,b) will apply to all landlords, as was clearly intended.
  Mr. Houghton: Can we be told how this mistake was discovered? Was this on the representations of any outside body, or was it a domestic discovery? It is desirable, as we go along, to see how these things have come to light. What I believe to have gone wrong in a number of instances is the haste with which the new Case VIII and all the apparatus connected with it have had to be devised. I suspect that the right hon. and learned Member for Wirrall (Mr. Selwyn Lloyd) said to the Inland Revenue that he was proposing to exempt from Schedule A Tax all owner-occupiers and that the consequences of doing that should be immediately considered.
  There were two alternatives. One was to exempt owner-occupiers from the operation of Schedule A more or less as

  1167
  it then stood, and the other was to create an entirely new tax for the profits on rents, feu duties and the rest, which is now called Case VIII of Schedule D. The basis of assessment is specially constructed by this new Case VIII of Schedule D.
  A multitude of problems arising from it have had to be dealt with in the Bill. One of them is how maintenance claims should be dealt with during the transitional period, because it was impossible, so we were told, for the Inland Revenue to operate the new Case VIII of Schedule D earlier than the Income Tax year 1964–65. So we have the abolition of Schedule A, in so many words, in an earlier Clause and there is to be erected the whole of the transitional apparatus to take care of Income Tax on rents between the time of the abolition of Schedule A and the introduction of Case VIII. That is what we are dealing with in Clause 20—"Transitional provisions for Schedule A tax for 1963–64."
  We have a double lot of complications, first, in the problems of the transitional arrangements, which are difficult enough in all conscience, and, secondly, the problems of the new Case itself when it comes into operation in the next Income Tax year. I am sure that the sympathies of the Committee are with the Chancellor of the Exchequer and all other Treasury Ministers in having to cope with this double set of problems, but it would be as well if, during the course of our discussions, we were told not only of the proposed change, but to what an Amendment is in response—whether it is a domestic discovery, inadvertence, or whether some representations have been made. We should then see what impact there has been on the later stages of the Bill of friendly advice and representations received from various quarters.
  A lot of material has been circulated to hon. Members from various bodies urging changes of different kinds. To some extent the Chancellor may have incorporated those suggestions in Amendments and new Clauses which we have to consider, but he may have rejected some. It would facilitate matters if he could take us into his confidence and carry the Committee with him through the various Amendments and the new Clauses.
  1168
  After the explanation of the Solicitor-General, these Amendments seem to be unexceptional. The provision seemed to be somewhat restrictive in its original form, but, without going back to the principal Act, the Income Tax Act, 1952, and all the changes which have taken place since, it is extraordinarily difficult to discover the effect of some of these Clauses. There is difficulty in seeing their precise significance in their original state and there is additional difficulty in seeing their precise significance in their amended state.
  This is by way of a kind of preface to our debates—we have had two already and another will not come amiss and might save trouble later. In short, we should like the Treasury Bench to approach our proceedings on Report with a due sense of humility and understanding of our difficulties. I think that right hon. Gentlemen opposite will then find that the compassion of human kindness will come their way from these benches and that we shall get along in a very friendly atmosphere.
  The Solicitor-General: I would never dare to debate with the hon. Member for Sowerby (Mr. Houghton) without a very high degree and large measure of humility. He is perfectly correct when he tells the Committee of the effect of Clause 20 and says that it introduces these transitional provisions, which are there because the reorganisation under the Bill will not be completed this year.
  I can only tell the hon. Gentleman that it was clear that there was this drafting mistake, which was discovered and which was clearly not intended. I will assist the hon. Gentleman when I can about representations, or points made by him or other hon. Members. He will recollect that the Committee was clearly told that we were anxious to hear the views of hon. Members because of the complex nature of this legislation, but these Amendments are merely to correct a drafting mistake and the unintended consequence which flowed from it.
  Amendment agreed to.
  Further Amendment made: In page 18, leave out lines 38 and 39.—[The Solicitor-General.]
  Clause, as amended, ordered to stand part of the Bill.
  Clause 21.—(COST OF MAINTENANCE, REPAIRS, INSURANCE AND MANAGEMENT FOR 1963–64.)
  5.0 p.m.
  The Financial Secretary to the Treasury (Mr. Anthony Barber): I beg to move, in page 20, line 3, to leave out from "1963–64"to the end of line 24 and to insert:
  "an allowance under section 101 of the Act of 1952 in respect of the unit of assessment for that year shall be computed as if that section required the cost of maintenance, repairs, insurance and management to be ascertained on the basis of the actual cost in the year instead of according to the average of the preceding five years, and as if subsection (2) of that section (by virtue of which 'maintenance' includes the replacement of farm buildings, etc.) were omitted".
  I think, Sir Robert, that it would be convenient if we were to consider also the Amendment in page 20, to leave out lines 35 to 39.
  The Deputy-Chairman (Sir Robert Grimston): If that be the wish of the Committee, so be it.
  Mr. Barber: These two Amendments arise in the main from certain criticisms which were made by hon. Members on both sides when we considered Clause 21 during the Committee stage. Indeed, the point which was made by hon. Members on that occasion has also been made to us by certain learned societies, and my right hon. Friend has come to the conclusion that the criticisms were right and that we ought to deal with them in the Bill.
  The provisions in question were those relating to the transition from the old five-year average basis to the new current expenditure basis of relief for maintenance costs. Under the provisions in the Bill as it stands, a landlord could go over from the five-year average basis to the current basis in any of the years 1963–64 to 1968–69 inclusive. Whichever year he chose for the change, some expenditure relating either to the five years before 1963–64 or to later years up to 1967–68 would be left out of account.
  That was the point that was made when we considered the matter in Committee. Thus, either the landlord would not receive full relief on past expenditure which he had expected to write off under
  1170
  the five-year average system in 1963–64 and later years, or, if he chose to stick to the five-year average basis, exercising his option in that direction as long as possible, that is up to 1967–68, he would be likely to refrain from incurring further maintenance expenditure until after 1967–68 when he would get full relief for it on the current year basis. This latter point is important. Indeed, two of my hon. Friends came to see my right hon. Friend the Chief Secretary and myself about it and pointed out that the Bill as drafted would have this most unfortunate consequence that landlords would be deterred from incurring maintenance expenditure because of the way in which the Bill was drafted. The scheme which is substituted—and I must not on recommittal, go into details—by the new paragraph 11 of Fourth Schedule, as my right hon. Friend will explain later, resolves this dilemma. I hope that I might be permitted just to refer in passing to the Fourth Schedule because I think that it helps to understand the nature of these Amendments.
  That Schedule now provides that the actual expenditure of the five years ending with 1963–64—which if Schedule A had remained would have formed the basis of a maintenance claim for 1964–65—shall be compared with the maintenance reliefs which are due far those years. As the Committee knows, under Schedule A repair relief is given for each year of ownership, in the amount either of the statutory repairs allowance, or of the average actual expenditure of the preceding five years, whichever is the greater.
  If the landlord's aggregate repair reliefs on this basis for the five years ended with 1963–64 are not less than his aggregate actual repair expenditure in those years, he has no good claim to any further relief, because he has had full relief for those years for the expenditure incurred during those years. In such cases he will go straight on to the current year basis in 1964–65 and he will not be able to carry forward any repairs expenditure from earlier years.
  I think that I can sum up the bulk of the first Amendment, and all the second Amendment, in this way: if a person's actual repairs expenditure in the five years before 1964–65—that is, the five

  1171
  years ending with this year of assessment—was more than the reliefs due to him for those years, then the excess is to be treated as expenditure incurred in 1964–65, and will qualify for relief in that year or, if it is appropriate, be carried forward to later years. This is in addition to the current expenditure incurred by the taxpayer concerend.
  We have looked at this with great care, and I think that we have met all the criticisms made in Committee and outside. This being the case, I am sure that this will commend the Amendment to the Committee and I am grateful to hon. Members for raising the points they did.
  There is one other matter which I should mention. Under Section 101(2) of the Income Tax Act, 1952, certain capital expenditure on farmhouses, farm buildings, cottages, fences, and so on, can be included in a maintenance claim. If it did not qualify for relief in this way, it would qualify under the provisions for capital allowances on agricultural land, which are contained in Section 314 of the 1952 Act. In that event they would be written off in the 10 years following that in which the expenditure was incurred, except that two-thirds of the expenditure on the farmhouse is treated under Section 314 as expenditure on a private residence and does not qualify for allowances under that Section.
  The Royal Commission on the Taxation of Profits and Income recommended that Section 101(2) should be repealed and that Section 314, the second Section to which I referred, should be left to operate on this expenditure. The Bill carries out this recommendation. Briefly, the main purpose of these two Amendments is to provide that the actual repairs expenditure in the five years in question, even the five years before 1964–65 where it is more than the relief due to the taxpayer for those years, is to be treated formally as expenditure of the year 1964–65 and qualify for relief in that year or, in appropriate cases, to be carried forward.
  Mr. Houghton: I thank the Financial Secretary for that explanation. I think that this is a better way of dealing with it. It is more businesslike and more straightforward. It substitutes a piece of
  1172
  arithmetic for an option, and I think it is a much tidier job altogether. Moreover, it seems to me to favour the taxpayer, and I think the Committee will recognise that there is a distinct concession in allowing the difference between actual expenditure in the years in question and the relief received in those years to be carried forward as expenditure incurred for the actual year 1964–65.
  I think that we have to concede something to get intelligibility and a basis on which taxpayers can really deal with their tax affairs with some understanding. I therefore think that this way of dealing with this is preferable to that contained originally in Clause 1. Options are difficult because so few people are able to exercise them without advice, and one of our aims in dealing with all taxation is to reduce the need for a taxpayer to seek and pay for professional advice on matters which ought to be within their competence.
  There are many matters on which it is proper that a taxpayer should seek advice, but not on these small things. I can see some glances being exchanged between hon. Gentlemen opposite and my hon. Friend the Member for Gloucester (Mr. Diamond) but I am sure that I have not said a word with which he will disagree. Professional men do not want to be troubled unnecessarily with the small beer or trivia of taxation matters. I think this will merely facilitate understanding of the change to be made.
  Mr. Graham Page: I wish to thank my hon. Friend the Financial Secretary for introducing this Amendment. I know that the election procedure in the Bill was intended originally to bring fairness to this new system of taxation, but in fact it would not have worked fairly on the taxpayer. The Chancellor had collected the tax on money which had been expended on repairs which did not qualify for relief in past years, so this is in no way a tax bonus or concession. It is a pure repayment of tax collected on money which had not qualified in those years but which in fact radically does qualify for repayment of tax. I thank my hon. Friend, not only for his courtesy in listening to our arguments in Committee and later, but for introducing the right Amendment.
  Amendment agreed to.
  Further Amendment made: In page 20, leave out lines 35 to 39.—[Mr. Barber.]
  Clause, as amended, ordered to stand part of the Bill.
  Clause 22.—(TREATMENT OF PREMIUMS, ETC., AS RENT.)
  The Solicitor-General: I beg to move, in page 21, line 9, to leave out from "lease" to the end of line 12 and to insert:
  "exceeds what its then value would have been if the said terms did not impose that obligation on the tenant."
  Clause 22 concerns allowances to landlords on premiums for leases for periods not exceeding 50 years. If it had not been so provided in the Clause, and since the annual value is no longer taxed, there would be a strong incentive for landlords and tenants to enter into leases providing for the payment of a premium on which the landlord would not be taxed rather than on rent on which he would now be taxed. The principle of Clause 22 was that where a premium for a lease not exceeding 50 years exists the premium should be treated wholly or in part as rent to which the landlord becomes entitled when the lease is granted.
  By subsection (2) of the Clause there is a provision that where there is an obligation to carryout work in a lease, namely, an obligation under the lease for the tenant to execute such work as, for example, to build a factory on the land, the benefit which is charged in the case of a lease of 50 years or less is an extra charge on the capitalised value, at the start of the lease, of the notional increase in rent. Representations were received from my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) and from various professional bodies that the basis of that charge, which was on a notional increase in rent, was not really sound. It was not the right way in principle to execute this tax.
  The real measure of benefit is the increase, in the circumstances, in the value of the property due to the fact that there has been an obligation placed on the tenant to do certain work—I used the illustration to build a factory—which means that when the lease is completed and the time has expired the value of the
  1174
  land will be improved by the fact that there was a factory upon it.
  It was therefore suggested that it was wrong to charge the lessor on the capitalised value of a notional increase in rent during the tenancy, when he cannot enjoy any improvement while the lease continues and while the tenant is in occupation. The true benefit, it was pointed out, consists in the fact that at the end there will be a new factory on that land. The value of the land, therefore, will have been enhanced and any increased rent the lessor might theoretically have got does not affect the price he could get when he is able to sell after the lease. This Amendment accepts the representations which were made by my hon. Friend that the original basis was not a sound basis. Therefore, we disregard any notional increase in rent and base the charge on the increase in the value of the reversion on the grant of the lease.
  There may be difficult problems of valuation, but undoubtedly it is the right principle to impose a charge and to impose it at the beginning of the lease. After the lease has been granted, the lessor could have sold the reversion, or gone bankrupt, or gone abroad. Certainly it would be right, therefore, to impose the charge at the beginning of the lease. The principle contained in the Amendment, I suggest, is the right principle. The principle which was in subsection (2) was not the correct one. The principal measure of benefit should be the increase in the value of property. This Amendment seeks to base the charge on that correct principle. I should like to acknowledge with thanks the representations which were made by various professional bodies and by my hon. Friend the Member for Folkestone and Hythe. I commend to the Committee this new basis for the imposition of this charge.
  5.15 p.m.
  Mr. Graham Page: I appreciate that what my hon. and learned Friend has said is that this is a valuation of the improvements to the property, or the property as improved at the end of the lease, but still it is a collection of tax at the beginning of the lease. I shall give an example because my feeling is that this Amendment has not gone far

  1175
  enough to relieve the taxpayer of a very heavy burden.
  Suppose it is part of the terms of the lease that the tenant shall put in a shop front. That is a very usual term of a lease of newly-built shop premises. The tenant may expend a very large sum in putting in that shop front. The landlord is then assessed on the increased value of the property by reason of the tenant having put in the shop front. That may be a large sum. Even though the landlord is assessed on the increased value of the property as at the end of the lease, yet that will be collected from the landlord in the first year of the lease when the landlord has not received one penny cash in respect of it. He is called upon to pay tax out of some notional sum, not out of cash which he has received.
  I assure my hon. and learned Friend that I know of an actual instance of the owner of a property of this sort which, had this Bill been in operation at the time, would have forced that owner to sell in order to pay the tax. On how many occasions that will happen I do not know, but I can give an actual instance. It happened to be an elderly lady who owned the property. She was living on a pension and she would have had to sell in order to meet the tax. We should recognise that only when the benefit is realised in cash, either by a sale of the reversion or by the end of the lease, should the tax be leviable or, alternatively, the value could be spread over a period like the instalments premium, which appears later in Clause 22.
  It will, I am sure, mean considerable hardship to some people who enter into these leases deliberately for the improvement of property, when the landlord perhaps has not the cash to make these improvements and therefore binds the tenant to do them. For example, it may involve putting in a shop front or putting offices in an empty floor, which is a frequent provision of a lease these days. The office building is built and the offices are let as a completely blank floor, with the tenant putting in the partitions—not just temporary partitions, but real improvements of the property.
  The landlord will be charged in the first year of the lease on the whole value of that improvement, as it increases the
  1176
  value of the property which will fall back to him at the end of the lease. Surely the Government could have gone further in the Amendment in spreading the tax liability over the length of the lease, or saying that the tax will be leviable only when the value is realised in cash.
  Mr. Houghton: This is one of the difficulties in not having an effective capita] gains tax. Clearly when property is let under the conditions described by the hon. Member for Crosby (Mr. Graham Page), the landlord appreciates the value of his asset by letting the property at a small or modest rental on condition that substantial improvements are carried out by the tenant. On the face of it, it seems hard that the enhanced value of the property should be converted into an annual income when in fact he has not received any cash consideration for the additional value. He has not received a cash consideration, and not until he realises the asset will he gain the value of the improved condition of the property under the conditions of the lease. It is possible that in those circumstances landlords may find it difficult to pay the tax on income which they have not received.
  Under the Clause, the increased value of the asset is to be taken into account and reckoned as if it had been a premium. We can all see the difference between a premium which is received in cash, out of which tax can be paid, and a premium which is received in the form of the increased value of an asset which cannot be converted into cash until the property is sold.
  What is the Committee to do with this problem? We could not exempt from some form of taxation this increase in resources which is ultimately represented in the higher value of the property. The hon. Member for Crosby said that the Chancellor should have gone further, and his suggestion appeared to be that there should be a longer spread, although, of course, that does not affect the principle of the matter. If the tax were spread it would assist payment, but the principle is that we are asking someone to pay tax out of money which he has not yet received.
  If we had a capital gains tax which took care of the improved value of capital assets, clearly this would be a suitable subject for it, but it cannot be brought

  1177
  within the short-term speculative gains tax. It would not be a suitable subject for that tax, and in any case it would usually be outside the scope of that tax, because the period between the letting of the property and the realisation of the asset would be much longer than three years.
  At first sight it is not easy to see what is the difference between the words in the Clause and the words which are to be substituted, but I will take the Solicitor-General's word for it that they do what he says they do. The words which are to be deleted are,
  "falls short of what its then value would have been if the work had been carried out, but otherwise than at the expense of the tenant, and the rent were increased accordingly."
  If that clear and intelligible quotation from the Clause can sink in for a moment, we propose to replace it by the words,
  "exceeds what its then value would have been if the said terms did not impose that obligation on the tenant."
  I suppose that there are two entirely different principles in those sets of words, but I would not say that I recognise them at first reading. But I will ignore the terms of the Amendment and confine myself to the principle of the matter. Unless there is any better solution than that which is now proposed, we shall have to let this go as being the best to be done with a difficult problem. I suppose that it would be better if landlords improved their own property and then charged an economic rent for it, instead of letting property which they want to be substantially improved to a tenant for a modest rent in return for the tenant's own expenditure on the property.
  Mr. Graham Page: The landlord is not always the person who has the money, particularly when a landlord of small means is letting to a multiple shop or one of these markets with a lot of money and willing to make a beautiful shop front. The landlord is charged with the tax on that.
  Mr. Houghton: I know that there are many varieties of circumstances here, but it looks as if this may be an encouragement to landlords, where possible, to carry out the improvements to their own property, charge an economic rent and pay tax on the revenue which they receive. The Income Tax will then be more equittable in their case than if they choose the alternative of requiring the tenant to carry
  1178
  out the improvements to the property. I can offer no preferable alternative to the Amendment, beyond that suggested by the hon. Member for Crosby that there should be a longer spread.
  The Solicitor-General: As both the hon. Member for Sowerby (Mr. Houghton) and my hon. Friend the Member for Crosby (Mr. Graham Page) have pointed out, there is a practical difficulty. When a person enters into a lease as landlord and that lease entails in its provision an advantage coming to him, that is an asset. I know that he will be taxed on it from the beginning—for example, in the case of the shop window which my hon. Friend mentioned. Nevertheless, at some time he will get the shop with the shop window. There are practical reasons why not to impose the tax at the start would be very difficult. The lessor could die or go bankrupt or go abroad or sell the reversion, and all this would make the ultimate collection of the outstanding balance, or whatever it may be, very difficult indeed.
  The answer to my hon. Friend is that due allowance would have to be given to the postponement of the landlord's benefit if he is not getting the benefit until the end of the lease, and that will be made in the computation of liability. The value to the landlord of a works at the end of the lease will be discounted, and further relief in that taxable amount, whatever the amount would be, will be the writing down by 2 per cent, for each year of the lease after the first, in accordance with Clause 22(1). If the landlord is an individual and if he comes into that category—not in the case mentioned by my hon. Friend—there would also be the top slicing relief referred to in Clause 25 and Schedule 5.
  There is this practical difficulty. I submit that it is right that the true measure of benefit should be the enhanced value and that with the safeguards as to discounting, as to being written down by 2 per cent., and as to the top slicing relief, if the circumstances are such, it is certainly right that this charge should be imposed at the start. I commend the Amendment to the Committee.
  5.30 p.m.
  Mr. A. P. Costain: Sir Robert, I failed to catch your eye a few moments ago before my hon. and learned Friend spoke. I should like

  1179
  to thank him for the care and attention he has given to the practical point I made on this Clause. I do not pretend to be an expert on Finance Bills. We have had a good deal of discussion today on this matter. This is an example of a back bencher being able to make a practical suggestion. I do not think that I have any interest to declare. I have considered the matter, but I cannot think of one. We put forward practical suggestions as to why we thought the Bill would not work in practice. I thank my hon. and learned Friend for the care and attention he has devoted to this problem and for drafting a Clause which is beyond my comprehension. In view of my hon. and learned Friend's explanation, I am sure that it will work.
  Amendment agreed to.
  The Solicitor-General: I beg to move, in page 21, line 16, at the end to insert:
  (3) Where, under the terms subject to which a lease is granted, a sum becomes payable by the tenant in lieu of the whole or a part of the rent for any period, or as consideration for the surrender of the lease, the lease shall be deemed for the purposes of this section to have required the payment of a premium to the landlord (in addition to any other premium) of the amount of, that sum; but—

  (a) in computing tax chargeable by virtue of this subsection in respect of a sum payable in lieu of rent, the duration of the lease shall be treated as not including any period other than that in relation to which the sum is payable;

  (b) notwithstanding anything in subsection (1) of this section, rent treated as arising by virtue of this subsection shall be deemed to become due when the sum in question becomes payable by the tenant.

  It may be for the convenience of the Committee if we now discuss the Amendments in lines 26, 30 and 32, and those in Clause 29, page 27, lines 24 and 37. They would be consequential if the Committee approved the Amendment in page 21, line 16.
  The Deputy-Chairman (Sir Robert Grimston): Yes, if it is convenient to the Committee.
  The Solicitor-General: I am much obliged. The Amendment in page 21, line 16, deals with two methods of tax avoidance. The other Amendments are consequential on it. Clause 22(1), as I said on the last Amendment, imposes a tax liability where a premium is
  1180
  required under a lease. There are certain ways of avoiding such a liability. The Clause would not apply, as the provision is at present drafted, to a lease at a rack rent with an option for the tenant at any time to pay a premium and thereafter a lower or even a peppercorn rent. In other words, a tenant would be able to take premises at a rack rent, which is a rent at the full value, with no premium but with an option in the lease to pay a premium at a certain time and thereafter a lower or peppercorn rent. If the lease were so drawn, the tax liability under Clause 22 would not bite. This would be one form of tax avoidance. The Amendment in line 16 deals with this by providing a new subsection which applies Clause 22 in the case I have mentioned, where there is a rack rent, an option, a premium, and a lower rent.
  The Amendment in line 16 also deals with a second method of avoidance. That is the case where, for instance, a landlord lets to a tenant on a 99-year lease at £10 a year for the first year and at £10,000 a year thereafter, with an option that the tenant can surrender at the end of the first year on payment of a premium of £500. Again, if a lease were drawn in that form, which would be a perfectly conceivable form of lease, the £500 would not attract the tax which Clause 22 sets out to attract. Therefore, I commend the Amendment in page 21, line 16, and the subsequent Amendments to the Committee as preventing two methods of tax avoidance.
  Mr. Houghton: This seems very clear and desirable and, indeed, very necessary. Why was it not thought of before? It seems that the Clause was gaping with loopholes which are now to be closed, we hope. Perhaps it is unkind to chide the hon. and learned Gentleman. The Amendment does not cope with something new. There is no new discovery in the devices which are employed in the terms of leases for one purpose or another. This seems to be a very necessary safeguard.
  I presume that it would also cover the type of lease which provides for a substantial lump sum payment at the conclusion of the lease. Any lump sum payment, any payment in consideration of the determination or surrender of a

  1181
  lease, would presumably he caught by the Clause. Perhaps, we could have an assurance on that. Would the words—
  "or as consideration for the surrender of the lease"—
  cover a payment made on determination of a lease? I am aware of some agreements which provide for that.
  What the Clause sets out to do is to bring within tax assessment receipts of different kinds which in ordinary circumstances would be rent. These are substitutes for rent. Can we be assured that capital payments, penalties, or other sums paid on consideration of certain things happening, will all be brought within the net? If not, there are probably some more loopholes.
  My hon. Friend the Member for Ashfield (Mr. Warbey) asked earlier this afternoon what will happen to the afterthoughts of today's debate. I can give him the answer: they will be in next year's Finance Bill. Happily, there will still be time to get them in next year's Finance Rill, because Case VIII will be in operation for the first time for the year 1964–65. The determination of liability will take place at the conclusion of that Income Tax year. Therefore, there will still be time to iron out any fresh difficulties or rough edges which appear in the Bill now and to catch any additional loopholes which may be seen.
  There is no doubt that all the brains will get to work on this. As soon as the Finance Bill appears in its final form, which we are due to see on Friday of this week—the printers have to be very busy between now and Friday getting the Bill into its final form—all the brains will get to work to see what can be done to get round the provisions of the new Case VIII. We want to make the Bill as watertight as possible, and I should welcome an assurance that under the Clause—which concerns the treatment of premiums for the purpose of tax under Case VIII—all devices which have been or may be introduced with a view to getting tax-free proceeds from property will be stopped.
  Everybody today is trying to get tax free income. Anything that can be called a capital gain and not income is worth a great deal more than income. That is why—albeit unsatisfactory—it becomes necessary to introduce a short-term
  1182
  speculative gains tax. Many people are trying to find some way of getting something which will not be taxed, a benefit in kind, the occupation of a house for which rent is not paid, a bonus, a tribute, a testimonial—something that can be disguised as a non-taxable receipt. No one wants to pay straightforward tax if there is a crooked alternative to it. By "crooked" I do not mean dishonest but simply a way round it. There is a great deal of sympathy with those who are clever enough to do it.
  Can we be sure, now that second thoughts have gone into this matter, that we are sewing up the holes that might otherwise be there?
  Mr. Graham Page: The hon. Member for Sowerby (Mr. Houghton) said that he wanted to be assured that the Amendment caught every payment from a tenant to a landlord. I want to be sure that it does not catch one common form of payment. A very usual type of lease is that under which the tenant does not have an obligation to carry out repairs. Such a lease contains words to the effect that at the end of the lease instead of delivering the premises up in good repair the tenant shall pay a certain sum of money in lieu of paying for the repairs himself.
  In such a case the tenant knows what he is in for at the end of the lease. He is not presented with a schedule of dilapidations and he can pay over £100 or whatever the sum may be to the landlord and say, "You do the repairs." I do not think that that is caught by the Clause because the sort of payment caught by it is only the one paid in lieu of the whole or part of the rent or as a consideration of the surrender of the lease. Suppose it is convenient to the landlord and tenant that the sort of lease I have described comes to an end before the term set out in the document and that, as part of the terms of surrender, the tenant agrees to pay a sum in lieu of the dilapidations. Surely that is a sum of money properly paid for repairs and should not be caught for the purposes of tax. It would be unfair to tax such a sum in the hands of a landlord, and I hope that the matter will be looked at again.
  Mr. Houghton: I should like to carry that point raised by the hon. Member for Crosby (Mr. Graham Page) a little further. I drew attention to the fact

  1183
  that the Amendment refers to "surrender of the lease" and I am not sure whether "surrender" means the termination of the lease or some prior occurrence. The type of lease which the hon. Member for Crosby mentioned is commonplace. It is common for a lease to provide for certain obligations on the part of the tenant at the conclusion of the lease. Frequently there is an inducement to the tenant to pay money instead of carrying out redecorations and repairs.
  5.45 p.m.
  The landlord welcomes the opportunity of having the money instead of having the premises handed over in a proper state of redecoration and repair, because he is then going to let the premises to another tenant on condition that the new tenant carries out the necessary repairs and redecorations to the satisfaction of the landlord before he is allowed to have possession. The landlord has gained a payment at the termination of one lease, which is supposed to be in lieu of the obligations of the tenant to repair and redecorate, but which the landlord does not convert into repairs and redecorations but puts in his pocket and then lets the accommodation to another tenant on condition that he carries out the very redecorations and repairs which the preceding tenant was supposed to have done.
  I am not with the hon. Member for Crosby in thinking that that sort of transaction should get off scot-free. In those circumstances it is a money payment, gratuitously given, which is not expended in repairs and redecorations because that obligation is passed on to the succeeding occupant. I will leave the matter and resume my seat so that the Solicitor-General can throw a glittering light on the subject.
  The Solicitor-General: It may glitter but it may not be light. When I saw the Amendment I thought that all the instincts of the hon. Member for Sowerby (Mr. Houghton) as a gamekeeper would cause him to commend it and I looked forward to receiving from him his congratulations. I got some congratulations from him for closing two holes, but the hon. Member now asks for a great deal more.
  1184
  It would be a very rash man who would stand at this Dispatch Box and give an assurance that all loopholes have been sewn up. The hon. Member for Sowerby, with his great experience of these matters, must appreciate that. Experience has shown that that would be a very dangerous hostage to give to fortune. We have sought to try to deal with those which arise out of this new system of taxation of income from real property; and the two which I hope I made clear to the Committee are quite complex in the way they arise.
  I can only say to my hon. Friend the Member for Crosby (Mr. Graham Page) that if it is a capital payment it would not be taxed. If it is in the form of income it would be taxed, but there would be relief for repairs and maintenance for dilapidation as if it were a payment in respect of or in lieu thereof. In other words, if it were a payment in respect of doing repairs and that money was paid to the landlord who had to use it to effect those repairs, he would be able to set the payment of such expenses as he might have to pay against the money he received from his tenant.
  The Amendment deals principally with those two matters of the option to pay a premium instead of a rack rent and also the large sum payable after the second year on the option to surrender. It deals with those because they are matters which could easily be a great breach in the principle here. It could be a source of avoidance.
  As to any other matters, when they arise—as probably they can when the brains, as the hon. Member for Sowerby said, are turned upon this matter—it will be the duty of the Administration to stop those holes. We hope and believe that at present we have shown foresight and we have gone as far as we think we can towards preventing any avoidance under the Clause.
  Amendment agreed to.
  Further Amendments made: In page 21, line 26, leave out from "and" to second "the" in line 28 and insert:
  "notwithstanding anything in subsection (1) of this section rent treated as arising by virtue of this subsection shall be deemed to become due when".
  In line 30, leave out "or (3)"and insert "(3) or (4)".
  In line 32, leave out "the said subsection (1) or (3)"and insert "that subsection".
  Clause, as amended, ordered to stand part of the Bill.
  Clause 24.—(CHARGE ON SALE OF LAND WITH RIGHT TO RECONVEYANCE.)
  Mr. Barber: I beg to move, in page 23, line 28, to leave out "following the grant of the lease" and to insert:
  "after the lease begins to run":
  Provided that this subsection shall not apply if the lease is granted, and begins to run, within one month after the sale".
  This Amendment to subsection (3) merely carries out an undertaking that I gave in Committee on 16th May. The point was raised by several hon. Members but, in particular, by my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid), whom I am pleased to see in his place.
  The Clause is intended to prevent possible avoidance of tax by dressing up what is, in substance, a lease at a premium as a sale of a property with right of reconveyance or lease-back later. The Clause as originally drafted, and has pointed out by my hon. Friend, applied in principle to a sale followed by an immediate lease-back, which, nowadays, is quite a common commercial transaction. It cannot be said that a sale that is followed by an immediate lease-back amounts in substance to a lease by vendor to purchaser in return for disguised premium, because it is of the essence of the transaction that the purchaser does not get possession of the property at all. This Amendment cuts out cases where the lease is granted but begins to run within one month of the sale.
  I should also explain that the Amendment also corrects a flaw, as I think hon. Members will have seen, in the concluding six words of the Clause as it stands. I am grateful to hon. Members for bringing these matters to our notice, and I commend the Amendment to the Committee.
  Amendment agreed to.
  Clause, as amended, ordered to stand part of the Bill.
  Clause 29.—(CASES I AND II OF SCHEDULE D: AMENDMENTS IN RELATION TO LAND.)
  Amendments made: In page 27, line 24, leave out "or (3)"and insert "(3) or (4)".
  In line 37, leave out "section 22(1) or 22(3)"and insert:
  "subsection (1), (3) or (4) of section 22",—[The Solicitor-General]
  Clause, as amended, ordered to stand part of the Bill.
  Clause 41.—(MOTOR CARS: AMENDMENTS AS TO CAPITAL ALLOWANCES AND DEDUCTIONS FOR HIRING.)
  Mr. Barber: I beg to move, in page 42, line 39, after the first "of" to insert:
  "subsections (2) to (6) of'.
  This Amendment, and the Amendment in page 44, line 40, merely correct flaws of drafting. I might add that the later Amendment in Schedule 12, page 98, line 42, column 3, at end insert:
  "in section 23, subsections (2) to (6)"
  is consequential on the Amendment I have moved.
  Amendment agreed to.
  Further Amendment made: In page 44, line 40, at end insert:
  "and this provision shall apply in relation to balancing charges as well as in relation to initial and annual allowances".—[Mr. Barber.]
  Clause, as amended, ordered to stand part of the Bill.
  Clause 59.—(PAYMENT OF DUTY.)
  The Economic Secretary to the Treasury (Mr. Edward du Cann): I beg to move, in page 58, line 16, to leave out from "chargeable" to "on" in line 21, and to insert:
  "on issue in the case of the following instruments that is to say—

  (a) any instrument issued in Great Britain; and

  (b) any instrument issued by or on behalf of a company or body of persons corporate or unincorporate formed or established in Great Britain, not being a foreign loan security;

  and for the purposes of this subsection 'foreign loan security' means a security issued outside the United Kingdom in respect of a loan which is expressed in a currency other than sterling and is neither offered for subscription in the United Kingdom nor offered for subscription with a view to an offer for sale in the United Kingdom of securities in respect of the loan.

  1187
  (2) Duty under the said heading in respect of any instrument not chargeable under subsection (1) above shall be chargeable".
  It might be for the convenience of the Committee if with this Amendment we discussed the Amendment in page 58, line 24, which is consequential on this one.
  Under subsection (1) of this Clause, bearer instruments axe chargeable to Stamp Duty on issue if issued in Great Britain, whether by a British or an overseas concern, or, if issued outside Great Britain, by a British concern. In other cases, the instruments will become chargeable on transfer in Great Britain. These Amendments exempt from liability to duty on issue—subject to certain conditions to which I shall refer in a moment—bearer instruments issued abroad by British companies. My hon. Friend the Member for Nottingham, South (Mr. W. Clark)—who cannot be in his place at the moment, as he was good enough to explain to us—raised this whole question during the Committee stage, when I said that we would most certainly look into the matter.
  The point is that it is suggested that a liability to Stamp Duty of 3 per cent. payable on the issue of securities might well constitute some deterrent to such issues abroad, and it is certainly the Government's policy, in suitable cases, to encourage such issues abroad. There must, obviously, be some relief to the balance of payments if, for example, companies engaging in operations abroad are enabled to raise at least some of their capital abroad. Hence our putting down these Amendments.
  The Amendment lays down three precise conditions. The first condition is that the securities must be issued outside the United Kingdom in respect of a loan expressed in a currency other than sterling. The second is that the loan must not be offered for subscription in the United Kingdom, and the third is that the loan must not be offered for subscription abroad with a view to offer for sale of the securities in the United Kingdom. Those conditions are largely designed, not only to accord with the kind of policy I have tried briefly to describe, but also for the protection of the Revenue.
  To sum up, the Amendments are designed to facilitate issues, in appro-
  1188
  priate and approved cases, of bearer securities by British companies abroad. The point was brought to our attention by my hon. Friend the Member for Nottingham, South, and I must tell the hon. Member for Sowerby (Mr. Houghton) that it has been reinforced by a number of representations that we have received from merchant banking houses which are very much concerned, and in such a distinguished fashion, with this kind of work. We believe that there are marginal, but nevertheless important, balance of payment reasons for accepting the proposals and suggestions made to us.
  Mr. G. R. Mitchison: Will the Economic Secretary be good enough to go a little further? I understand the intention of the Amendment; it is that in respect of what is here called the "foreign loan security"—that is to say, a bearer instrument of the kind there denned—the duty should be payable
  "…on transfer in Great Britain of the stock constituted by or transferable by means of the instrument."
  Those are the words left in at the end of subsection (1), immediately before the proviso.
  What is the practical method by which this duty will be collected? We are considering a bearer instrument and, presumably, no duty having been levied on the issue of the instrument, it arrives in some form or another in this country, and for some purpose. It is then transferred, perhaps on a sale, or perhaps not. What is the exact intention, and how will the Revenue get at the transfer in Great Britain upon which the duty becomes payable? Can the hon. Gentleman tell us what machinery is proposed for that purpose?
  6.0 p.m.
  Mr. du Cann: There is no difficulty about it because, although the rate of duty operating at present may be different from the rate of duty which will operate in the future, the system nevertheless has endured for a long time and, as I understand, the machinery position is that if there should be a transfer of any sort the documents concerned must be presented to the Inland Revenue for stamping.
  The hon. and learned Member will appreciate that these instruments have to be lodged with an authorised

  1189
  depository. These depositories are very closely defined. They are people of some repute. I am thinking of stockbrokers, bankers, solicitors and the rest. As the hon. and learned Member knows, the definition has been widened in recent years as a matter of practical expediency, and I think a very good thing too. It will be immediately apparent to any one of these depositories, assuming custody of one of these securities, if it has not been properly stamped. There might perhaps have been difficulty in one rather limited regard. As the hon. and learned Member will know, the method of assessment has been changed in certain cases. In the past, shares of no par value have escaped duty altogether, for duty has been leviable on nominal value and shares of no par value have no nominal value. We are not only changing the rate but in future the duty will be leviable in that case on market value.
  It is not quite an exact analogy that I now give off the cuff, but it might be asked how in certain cases it would be clear to whoever was handling these transactions that a new rate of duty should be paid. It might be asked how the persons concerned would be certain that the proper rate was being paid. The answer, which has an important bearing on the point made by the hon. and learned Member, is that if an instrument has been properly stamped at the old rates, despite the fact that the Bill proposes new rates of taxation, which may be greater than what went before—and I gave an extreme example but there are others where there would be an increase—this would still mean that the old stamping would be valid and the new stamping would not now be required.
  I am grateful to the hon. and learned Member for bringing up the point. He has also said by inference that these instruments are in much more common use than they were years ago and perhaps also—and I would agree with him if that is his point—that these instruments may well come into even more common use, not necessarily because of developments taking place in the United Kingdom but because of developments overseas. We therefore want to be certain that there will be no difficulty and no evasion of duty payments. We are satisfied with the system and we
  1190
  are satisfied that there will be no difficulty or trouble in this respect.
  Mr. Mitchison: Perhaps I might adopt the phrase of the Solicitor-General and say that that was glittering, but it was not light; and the reason why it was not light was that it was all about shares, and the Amendment has nothing whatever to do with shares. It is purely a question of loans and of instruments issued to denote a loan.
  I understand that what happens is that such-and-such a company borrows a large sum, for example, in Swiss francs, and instruments are issued to indicate the amounts which have been borrowed in the usual way, and that means bearer instruments. No question arises that these instruments appear somehow in this country. Do I understand the position to be that ifa banker in Switzerland, for example, sends an instrument of this sort to someone in London for consideration, or it may be for no consideration at all, that that person is thereupon, by virtue of existing exchange control legislation, bound to hand this at once to an authorised depository and therefore there is supposed to be a duty on the authorised depository, having received a foreign loan security which is unstamped to do something? To do what? So far, there has been no transfer. What is the duty of the authorised depositor? If he has a duty, why is it not put in the Amendment? What, in practice, is supposed to be the operation?
  Let me take another instance. Let us suppose that a bank constituted in England or in Switzerland has a branch in the other country and that the instrument is sent from the head office to the branch, or vice-versa, in the course of banking transactions. The bank in question is an authorised depository. So far, I suppose, there has been no transfer. This is merely an arrangement within the banking company.
  What is the next step if the bank sits on it and holds it and receives the interest from it in Swiss francs collected through the ordinary banking channels? Is the bank ever bound to have it stamped? Can it hold it indefinitely until the loan becomes redeemable? Is that the intention? If so, is not that rather derogatory of the interests of the Revenue and, in effect, a means of avoiding Stamp Duty?

  1191
  I do not mean intentionally avoiding duty, but escaping it. Can the Economic Secretary deal with this?
  I do not understand why, given the obligations which the hon. Gentleman mentions, there is nothing about it in the Bill. Where is it to be found, and what happens if an authorised depository is naughty? We well know that even the most distinguished people get naughty occasionally. What if there is a transfer in the ordinary course of business, but not by way of sale, or even a transfer from one legal entity to another by way of passage in the post, for example?
  Mr. du Cann: I must apologise to the hon. and learned Member and the Committee if I was not as lucid as I would wish to be. The hon. and learned Member was entirely right to upbraid me over my loose use of terminology. These terms come naturally and I did it simply to make the matter clear. Apparently, I did not succeed, and I am sorry. There is a Clause, which I must not discuss in detail, which deals with the payment of duty, but perhaps I can assist the hon. and learned Member, without referring in detail to that, by speaking again somewhat generally.
  I suppose that there would be no objection in the case of a foreign owner of a British bearer security issued overseas, which had not been dutiable in the United Kingdom, depositing it in the United Kingdom for safe custody. I imagine that this could happen quite easily, and perhaps that is a case which the hon. and learned Member had in mind. In those circumstances, there seems to be no reason why the instrument should be dutiable, because it is dutiable only if it is issued or transferred in the United Kingdom. If it is left here for safe custody it would be unreasonable to expect that duty should be levied upon it. I hope that that deals with that case.
  In the case of transfer, which is a matter which occurs at present or might occur in the future both with ordinary bearer instruments and with the rather narrower type of bearer instruments we are considering in this Amendment, what would happen would be that the transferor or his agent would have the duty to take the instrument to the Stamp Office with a
  1192
  declaration of market value. This is a regular practice. That value, obviously, would be checked by the Revenue, and on its being established that it was correctly declared, the instrument would be stamped with ad valorem Stamp Duty at the appropriate rate as designated in the Bill. There are certain penalty provisions in the Bill and our Stamp Duty legislation in general which are the sanction for this to be done.
  I repeat that, in all the experience I have had, which I do not suggest is by any means exhaustive, I have not come across a case where duty has not been paid when it should have been. I am not saying that no cases have existed. All I say is that they are extraordinarily rare. I mention that simply in an effort to satisfy the hon. and learned Gentleman, as I should wish to do, that, in our opinion, it is extraordinarily unlikely that there will be any difficulty of revenue evasion in a matter of this sort.
  It is true, as I said earlier, that we are introducing the Amendment to meet and satisfy what we believe to be a need; but, of course, this is a new and developing field. I tried to indicate earlier that many of these developments are at the option of overseas companies. Although this may not particularly apply to what we have in mind here, it is probably right for me to say in general, nevertheless, that we shall watch the operation of this Measure with a degree of care and, should we find any difficulty, we shall not hesitate to propose Amendments to the Committee in another year.
  That would be any Government's plain duty. I say frankly that we do not see that possibility at present. Nevertheless, I am trying to make assurance doubly sure by saying to the hon. and learned Gentleman that, if there were difficulty, we should be only too ready to take it into account. We are at present satisfied that the situation is in order and is customarily a happy and satisfactory one.
  Amendment agreed to.
  Further Amendment made: In page 58, line 24 leave out "paragraph (b) above" and insert "this subsection".—[Mr. du Cann.]
  Clause, as amended, ordered to stand part of the Bill.
  Clause 67.—(PROFITS TAX PROVISIONS IN CONNECTION WITH PART II OF THIS ACT.)
  Mr. Barber: I beg to move, in page 64, line 18, to leave out "it shall also" and to insert:
  "the rent, together with any expenses incurred by the association in the period, shall".
  This Amendment corrects an oversight relating to the charge to Profits Tax of a housing association. All it does is to bring the Profits Tax treatment into line with the Income Tax treatment, which treatment the Committee has already approved.
  Mr. Mitchison: What are the expenses contemplated in the Amendment?
  Mr. Barber: Clause 67 makes changes in the Profits Tax law which are consequential on the Income Tax provisions in Part II of the Bill. The Amendment simply prevents a housing association which has been, but which has ceased to be, an approved co-operative housing association under Clause 43, for example, because it has changed its constitution or for some other reason, from getting relief against profits chargeable to Profits Tax for the period after it ceases to qualify for exemption by carrying forward expenses incurred in the period when its rents were exempt from Profits Tax.
  As I said, all we are doing here is bringing the Profits Tax provisions into line with the Income Tax provisions. Perhaps I may refer the hon. and learned Gentleman to Clause 43(3) which makes the corresponding provision regarding Income Tax.
  Amendment agreed to.
  6.15 p.m.
  Question proposed, That the Clause, as amended, stand part of the Bill.
  Mr. Mitchison: I have one question only to ask about the Clause, and it relates to subsection (4), which we have just been discussing. The subsection begins:
  "Where rent to which a housing association was entitled for any period is by virtue of a claim made under section 42 of this Act to be disregarded for income tax purposes it shall also be disregarded for purposes of the profits tax, but if the claim has effect by reason of a direction…"
  1194
  I have looked carefully at Clause 42, which is called "Supplemental provisions as to Chapter III". It does not appear to provide for the claim in question. I notice, however, that Clause 43 does so provide. I wonder whether, by some chance in the hustle and hurry which obviously attended the preparation of the Bill and all the Amendments relating to it, someone put the wrong number in.
  Mr. Barber: The hon. and learned Gentleman is quite right. In line 17, on page 64, where the words "section 42" appear, it should read "Section 43". I am happy to tell the hon. and learned Gentleman that it was not by design that I did not draw this to the attention of the Committee. Late on Sunday afternoon, I was myself somewhat puzzled by the same point. I made inquiries and I was told that this is a printer's error. It will automatically be put right. I am grateful to the hon. and learned Gentleman for drawing attention to it.
  Question put and agreed to.
  Clause, as amended, ordered to stand part of the Bill.
  Schedule 10.—(AMENDMENTS ARISING FROM CHAPTER II OF PART II OF THIS ACT.)
  Amendment made: In page 86, line 12, at end insert:
  (2) This paragraph shall have effect in relation to tax for the year 1963–64.—[Mr. Barber.]
  Schedule, as amended, agreed to.
  Schedule 11.—(REPEALS ARISING FROM CHAPTER II OF PART II OF THIS ACT.)
  Amendment made: In page 95, line 29, after "in" insert:
  "sections 153 and 162 of and".—[Mr. Barber.]
  Schedule, as amended, agreed to.
  Schedule 12.—(GENERAL REPEALS.)
  Amendment made: In page 98, line 42, column 3, at end insert:
  "in section 23, subsections (2) to (6)".—[Mr. Barber.]
  Schedule, as amended, agreed to.
  Bill, reported, with Amendments; as amended (in Committee and on recommittal), considered.
  New Clause.—(PROHIBITION OF CIRCULATION OF BLANK TRANSFERS.)

  (1) Where a transfer in blank relating to registered stock of any description has been delivered, pursuant to a sale of that stock, to or to the order of the purchaser or any person acting on his behalf, any person who in Great Britain parts with possession of that transfer, or who removes it or causes or permits it to be removed from Great Britain before it has been duly completed shall be liable to a fine not exceeding the aggregate of £50 and an amount equal to twice the stamp duty chargeable in respect of that transfer.

  (2) For the purposes of this section "transfer in blank" means a transfer in which the name of the transferee has not been inserted, and a transfer shall be treated as duly completed if, and only if, the name of the transferee is inserted therein, being the name of—

  (a) the purchaser of the stock under the sale;

  (b) a person entitled to a charge upon the stock for money lent to that purchaser;

  (c) a nominee holding as a bare trustee for that purchaser or for any such person as is mentioned in paragraph (b) above; or

  (d) a person acting as the agent of that purchaser for the purposes of the sale.

  (3) The foregoing provisions of this section shall apply in relation to a transfer delivered by way of or pursuant to a voluntary disposition inter vivos, being a transfer to which section 74 of the Finance (1909–10) Act 1910 applies, as they apply in relation to a transfer delivered pursuant to a sale, and as if for any reference to the purchaser there were substituted a reference to the person (in this section referred to as the donee) to whom the disposition is made.

  (4) In this section references to stock shall be construed in accordance with subsection (4) of section 58 of this Act, and "transfer" includes any instrument used for transferring stock; but nothing in this section applies—

  (a) to any instrument which is chargeable with duty under paragraph (3) of the heading "Bearer Instrument" set out in subsection (1) of that section and is duly stamped; or

  (b) to any instrument which is exempt from duty by virtue of exemption 3 in that heading, or would be so exempt if it were otherwise chargeable under that heading.

  (5) References in this section to the purchaser or donee of any stock include references to any person to whom the rights of the purchaser or donee are transmitted by operation of law; and in relation to a transfer chargeable with duty in accordance with section 58(4) or (5) of the Stamp Act 1891 (transfers to sub-purchasers) references in this section to the purchaser and a sale shall be construed as references to the sub-purchaser and a sub-sale.

  (6) This section shall come into force on such date as the Treasury may by order made
  1196
  by Statutory instrument direct.—[Mr. du Cann.]

  Brought up, and read the First time.
  Mr. du Cann: I beg to move, That the Clause be read a Second time.
  If I may so describe it, I have been pregnant with this new Clause for so long that I am delighted that the moment of delivery should at last have arrived. My mother always tells me that she was very glad to be able to see her feet after I appeared. I am very glad to be able to discuss this new Clause, which we have been inhibited from discussing for so long.
  The Clause prohibits the circulation of blank transfers, so defined in subsection (2), that is to say, transfers which do not show the name of the transferee, where they have been used for the purposes of a sale or a gift, subsection (3) referring particularly to the latter point. The Clause is mainly definition and penalty, the latter being found in subsection (1).
  It springs from the Stock Transfer Bill, with which right hon. and hon. Members will be familiar. This Bill provides a new procedure for transferring registered stocks and shares. It has passed through all its stages in the House of Lords and the Report and Third Reading stages were taken in this House last Friday, as the hon. and learned Member for Kettering, in particular, will remember. It has passed through all its stages in the House of Commons and in another place at a fairly rapid pace. It is now awaiting Royal Assent. I hope that it is reasonable to assume from that that it is a Measure which commands general support. Its object is to facilitate stock transfers, which, as we all know, are complicated matters, and to avoid delay and labour.
  None the less, there is a need for protection of the Revenue, whose interests must be considered very carefully when new legislation of this sort is on the stocks and is passing through Parliament. During the Report stage, and in Standing Committee A on 29th March, the hon. Member for Gloucester (Mr. Diamond) drew our attention to the obvious need for Revenue protection. He said that blank transfers were perfectly legitimately employed sometimes when one has to go and see one's bank manager.

  1197
  I understand that that is true. My own knowledge is entirely academic, but the longer I stay a Minister the more opportunity I shall have, perhaps, of getting practical experience of the point with which the hon. Member is no doubt professionally only too familiar—and professionally only, I do not doubt. But plainly, with a new system, it is entirely right to examine the necessity for Revenue protection, and this is what we have done.
  My noble Friend Lord Denham, speaking in another place, where the Stock Transfer Bill was first introduced, said that the Government would certainly consider introducing an Amendment to take account of the position, and during the Committee stage I gave a categorical assurance to the same effect. Perhaps I can say en passant that I was asked particularly by the hon. Member for Gloucester to do what I could to get that Amendment down at an early stage. I hope that he feels in this case, at any rate, that there has been full and appropriate time for consideration.
  To summarise the matter, about which we are anxious, a buyer of shares may arrange to refrain from having the name of the transferee put into the transfer. Shares may then be transferred from Mr. A. to Mr. B. and from Mr. B. to Mr C. with only the names of, say, Mr. A. and Mr. C. appearing, a single transfer thus being used to give effect to two sales. This would be entirely wrong, for on both transactions full ad valorem transfer duty must be paid. The new Clause has been tabled to stop the possibility of that kind of situation arising.
  We had some discussion in Committee as to whether it was appropriate to endeavour to deal with this matter of Revenue protection during the passage of this Finance Bill or during the passage of the Stock Transfer Bill. We came to the conclusion that the former course was preferable largely because of the accidental fact that there is a number of changes in the Stamp Duty provisions in this Bill. We thought that if the House thought it appropriate to put the protection point into the Bill it would certainly obviate a large number of cross references. It is simply a matter of convenience, and, on reading the proposed new Clause, hon. Members may think that that course was justified.
  1198
  I should draw attention to one further point in connection with subsection (6) of the new Clause, which states that the
  "section shall come into force on such date as the Treasury may by order made by statutory instrument direct."
  The reason for a flexible provision of that sort is this. It is not yet certain when the Stock Transfer Bill will come into force, even though it is now awaiting Royal Assent. Its main provisions will come into operation only on a date yet to be determined by the Treasury.
  I have made it clear, I think, that there is obviously a good deal of work for professional people and others to engage in by way of preparation to equip themselves to deal with the new system. I know that much work in that respect has already been done. Indeed, I said something to that effect last Friday.
  We envisage that that order may be made in respect of the Stock Transfer Bill three months after it receives the Royal Assent, which would take us to October or November. It is the Treasury's intention, at the same time, to table an order to give effect to the provisions of this Clause so as to make the two items precisely and exactly coincident.
  As I have said, I have been holding on to this new Clause for a considerable time and it is a great relief to get rid of it. I hope that it will have the approval and approbation of the House. It fulfils an undertaking which Lord Denham and I have given very clearly to both Houses and, as I say, it is something which is required by the passage of the Stock Transfer Bill into law. The Amendment to Clause 71, page 67, line 10, after "Act", to insert
  "(except section (Prohibition of circulation of blank transfers))"—
  is consequential on this new Clause and no doubt we shall discuss it during our proceedings on Report, but I thought that the House would wish to have the explanation which I have given. I hope that the new Clause will find favour with the House.
  Mr. Mitchison: We on this side of the House approach this new Clause with sympathy, partly because it is an anti-evasion Clause and partly because the labours of the Economic Secretary have been so unduly protracted. As he has

  1199
  already indicated, there was almost a premature birth on Friday. However, "all's well that ends well."
  I wish to make only one point in substance on the new Clause. The Stock Transfer Bill is no doubt a very useful Measure, but when it was being discussed on Friday there was considerable doubt about how far legislation was required to give effect to the changes in it. The conclusion was that there were one or two obsolete Acts which might have presented difficulties, but there was no repealing Clause in the Bill and certainly it did not make any sweeping change which, as far as I could see, could not have been made in the majority of cases. In that respect it resembled the Truck Acts in making the law more well known rather than altering it. The hon. Member for Crosby (Mr. Graham Page) knows how much I, for my part, appreciate his labours in educating us in these matters. They have been very useful practically.
  The question therefore is: why has there been no provision of this kind before? I should have thought that blank transfers did circulate, not necessarily in the form indicated by the Economic Secretary—that is, pledging something or another to a bank manager—but is there anything to prevent a blank transfer from being punted about for a bit? Why was this Clause made dependent on this new legislation, or is it simply a case of the new legislation having called the attention of the Treasury and the authorities concerned to the possibility of the circulation of blank transfers and a consequent avoidance of duty or, to use an ambiguous phrase, escape of duty?
  I have always been puzzled by one matter. I understand that if a man buys a stock on the Stock Exchange and becomes, as it were, the beneficial owner of that stock for a period and then resells the stock which is resold again to somebody else, all within the period of one account, no Stamp Duty is payable. If that is the position, surely the Revenue is suffering a good deal. Or are there transfers?
  6.30 p.m.
  I have not experience of this myself, but the Treasury must know all about it and no doubt the Treasury Ministers can tell us about it. What is the posi-
  1200
  tion concerning people who get options to buy or sell shares? Is Stamp Duty payable until the option is exercised and a transfer between one person and another results from its exercise? I have an uneasy feeling—and this Clause calls my attention to it—that this resembles the case of the gendarmes who, in Offenbach's play, used to come stamping on to the tune of "toujours trop tard".
  I wonder whether, in this case, the Treasury has not stopped one possible loophole and left quite a number of others open. I ask these questions because the heading of the Clause is:
  "Prohibition of circulation of blank transfers."
  It no doubt prohibits them. It does so with reference to blank transfers generally as well as to the kind of transfer that was indicated or made possible, as the case may be, by the Stock Transfer Bill.
  What is the position? Have there been blank transfers before? Have they circulated, and why so late? Did the Government require to have their attention called to all this by the industrious and inestimable hon. Member for Crosby? Did they need that to notice that the blank transfers were circulating? Or is it simply that blank transfers of the kind intended by the Stock Transfer Bill are hit at by the Clause? It does not read so. It reads as if there were a general prohibition of something which might well occur quite independent of the Stock Transfer Bill.
  I hope that I have made that broad question clear. It has a number of ramifications that I should like the Government to answer. As the Economic Secretary has indicated, this is a Clause which, to quote his own words on Friday, would have the effect of preventing the circulation of blank transfers with consequent loss of Stamp Duty revenue. Therefore, we are glad to see it, whether it is too late or not.
  Mr. Graham Page: Having regard to the opening words of my hon. Friend the Economic Secretary concerning his pregnancy with the Clause, I am very glad that it is he who was put in this interesting condition rather than myself over the Stock Transfer Bill. Having had the

  1201
  conduct of that Bill, I would have hated it to be obstructed by a complicated Clause of this nature. As the hon. and learned Member for Kettering (Mr. Mitchison) has said, the Stock Transfer Bill does not do anything to authorise the use of blank transfers which was not already authorised. Nor do I think that it will increase the practice of using blank transfers. Indeed, they have been used for some time for certain purposes, but not extensively.
  I should like to know from my hon. Friend the Economic Secretary how the Clause will affect three of the quite normal practices which are at present in use. The first is that which occurs when transfers are delivered conditionally. This, briefly, is what happens in the case of a take-over, when those conducting the take-over collect in transfers from existing shareholders on the condition that those transfers will be used if sufficient of them are gathered together.
  It may be that those who collect the transfers then pass them on, perhaps, to a finance house to finance the take-over. I wonder whether, in passing from the people who collect them together to start with to some other concern, they are caught in the process. I am not saying whether they should be, but it is a practice which is adopted and I wonder how the Clause will affect it.
  It may well affect it, because the Clause comes into operation after the delivery of the transfer to a purchaser. The words in the first two lines of the new Clause are that the transfer in blank
  "has been delivered…to or to the order of the purchaser"
  Once it has been delivered to a potential purchaser, if he does anything with the transfer by passing it on to anybody else, I understand that it will be caught by the Clause.
  The second sort of usual use of blank transfers is for qualifying shares by directors. Frequently, when the articles of a company require a director to hold a qualifying share, that share is transferred to him and he gives a blank transfer to the person who has transferred it to him so that if at any time he retires from the directorship, the transfer can be used to transfer his share to a new director taking his place, who will also require a qualifying share. When that transfer is used to provide the qualification for
  1202
  the new director, will it be caught by the Clause? I would think that perhaps it is, and, perhaps, it should be.
  Thirdly, there is the case when blank transfers are used for ordinary mortgage purposes. The usual practice, perhaps, is that there is another document in addition to the blank transfer. There may be a mortgage of the shares to the shareholder's bank or to some other lender. Together with that charge or mortgage, a blank transfer is deposited and also the certificate for the shares. At what stage would that transfer be caught by the Clause? These are quite normal occasions when blank transfers are used. If we could have some assistance about how those normal practices are affected by the Clause, it would be helpful in understanding the Clause.
  The point raised by the hon. and learned Member for Kettering about sub-purchasers has, surely, been well recognised in the law for a long time, not only in the sub-sales of shares, but in the sub-sales of property. If one as a purchaser disposes of one's interest before taking a conveyance or completing the purchase, the Stamp Duty is not paid on each sub-purchase; it is paid on the greatest amount for consideration in the transaction. That, surely, is a well-recognised process and ought not to be caught by the Clause. I do not think that it will be. The Clause recognises that sub-sales before completion of the transaction are perfectly permissible without catching Stamp Duty on each occasion. If my hon. Friend the Economic Secretary can assist us on these practical points it would be a great help.
  Mr. du Cann: If I have the leave of the House, I shall be very ready to attempt to reply to the questions which I have been asked.
  First, the hon. and learned Member for Kettering (Mr. Mitchison) asked two questions, and there was also a third which he asked me on Friday which I should like to answer.
  The hon. and learned Gentleman's first question related to blank transfers. It is true that there is at present no legal objection to their use, and certainly they are used. The hon. Member for Gloucester (Mr. Diamond) gave one instance during the Committee stage of

  1203
  the Stock Transfer Bill, and my hon. Friend the Member for Crosby (Mr. Graham Page) has given two other illustrations during his speech.
  The difference between the position that exists at present and the one that may exist in due course if the Stock Transfer Bill becomes an Act is that, in general, it is true to say that the use of blank transfers at present is rare. It is not customary. The ordinary habit is for the transferor's and transferee's names to be inserted in the transfer almost immediately—together, one might say—and it is the exception rather than the rule for transfers to be circulating in blank—for good and sensible reasons, I agree, but none the less rare. When we have the new Act, as it will shortly be, it will be much more usual—one might almost say that it will be the usual thing—for transfers to circulate in blank.
  In other words, to put the matter at its lowest and worst, the possibility of evasion of duty might perhaps be described as dangled permanently in front of the noses of those concerned in stock transactions. So the hon. and learned Gentleman is right to call attention to the fact that blank transfers are in use occasionally today—but it is only occasionally. In the future they will be very much in use. For that reason, it seemed to us appropriate to close this gap, or, at any rate, to recognise the facts of the situation and deal with them through legislation. That is why we attach special importance to the matter. I hope that that answers the hon. and learned Gentleman's first question.
  The second question related to transfers during the period of a single account. The hon. and learned Gentleman is right to say that transfers during the period of a single account would attract only one amount of duty. He has, of course, to bear in mind the kind of people who are primarily engaged in operations of this sort. They are stock exchange jobbers, It has been thought right ever since the Stamp Act of 1891—I refer particularly to Section 58(4) and (5)—to recognise this as being a special and unusual position. Stamp duty is payable in the case of more than one transfer during an account only on the final transaction, and we would not have wished to withdraw
  1204
  this relief as we regard it as being peculiar to these circumstances.
  I should like, in courtesy, to reply to the question the hon. and learned Gentleman asked me on Friday. He made the point that if Mr. A were to purchase, say, stock to the value of £500 on the Stock Exchange in a single transaction, that would be charged duty at the rate of 2 per cent.—an easy calculation. If, on the other hand, whatever the reason for it might be, £500 worth of stock was purchased in several individual transactions, one would have a position arising because of the operation of the scale which currently involves rates substantially over 2 per cent. in certain circumstances—the worst is £25 1s., where the rate is almost 4 per cent.—where the total of the duties in each of the individual transactions expressed as a percentage duty in relation to the total consideration of £500 might be at a rate of more than 2 per cent.
  The hon. and learned Gentleman suggested that somebody would lose here. He said that if transactions are aggregated there is a difference between the appropriate rate of duty of 2 per cent. on £500 and whatever other percentage it might be on £500. He asked what happened. He asked whether the differences disappeared into thin air. There was a certain amount of discussion between the hon. and learned Gentleman and the hon. Member for Oldham, West (Mr. Hale). The contributions of the hon. Member for Oldham, West to our financial debates are rare, yet none the less very welcome indeed.
  6.45 p.m.
  I did not wish to answer the hon. and learned Gentleman in detail at that time, because I wanted to make certain that I had the facts correctly in my mind. Perhaps I might now explain what happens. It is true that it may be the case if one wishes to buy a certain amount of stock aggregating, say, £500, more particularly in the case of large amounts, that one cannot achieve that in one single transaction. It is true that it may be achieved in a number of individual transactions. It is true that, whether under the old system or under the new, transfers for those transactions would have to be prepared—ordinary transfers in the present case and brokers

  1205
  transfers in the new case. It is true that if any of the individual transactions involve small amounts of stock, duty at above the rate of 2per cent. average might come finally to be paid, though, as the hon. and learned Member for Kettering pointed out, in Schedule 9 we are now introducing new steps which will mitigate the kind of difficulties that are emphasised by the present scale.
  But whether we have the old system or the new precisely the same thing will occur. Individual transfers—orthodox transfers in the present case and brokers transfers in the new case—will be prepared and will have to be lodged with the stamp office for adjudication and stamping, and it may well be that the total Stamp Duty payable will be more than 1 per cent. on £500, or whatever the figure might be in any example that comes to mind. The individual purchaser will be charged that duty in his contract note at the appropriate rate, and the difference between the duty actually paid, which will be a larger sum, and the amount paid by the purchaser and shown in his contract note, is made up by the market on settlement. In other words, the jobbers pay it. That is the short answer to the hon. and learned Gentleman's question. In other words, the Revenue gets its full whack—at the time, because the transfers are stamped at the moment they are lodged.
  I turn to the questions asked by the hon. Member for Crosby. Perhaps I may say how delighted we all are to see him in his place so that his contribution to the Stock Transfer Bill may once again be recorded and emphasised. I spent some time praising my hon. Friend last Friday. I am sure he would not wish us to do it all over again, but it is none the less meant and felt.
  My hon. Friend asked first about takeovers—for that is what it broadly came down to. With his wealth of legal experience, he will know that it is an extraordinarily complicated matter. As I understood his question, he is anxious to ensure that the present systems which are administratively sensible and satisfactory for dealing with matters of this sort shall not be interfered with in any way. I will not go into the matter in detail. Suffice it to say that this is a matter into which we looked a little time ago.
  1206
  We have noted, in particular, the things said to us—this bears on a point made by the hon. Member for Sowerby (Mr. Houghton)—by the Law Society on the subject. We are confident that there need be no difficulty whatsoever but that any difficulties which might on the surface appear to arise can be happily dealt with administratively. I do not say that that will be so in every case, for certain rules will have to be conformed to of the sort which are commonplace today, but, in general, it is true to say that administratively one is readily able to deal with the matter.
  I turn to my hon. Friend's second question, relating to mortgages. This bears on a point raised by the hon. Member for Gloucester. I am advised that in the case mentioned by my hon. Friend there would be no difficulty and the position which he described would not be caught under the terms of the Clause. I should certainly like to look into the matter more closely and will readily do so if my hon. Friend will be good enough to correspond with me. It is always difficult to hear what an hon. Member is saying and, first, make certain that one has understood him correctly, and, secondly, think out all the possible consequences of what he may be suggesting. However, my advice at the moment is that that position is not caught.
  I am also advised, with the same qualifications, that directors' qualifying shares are similarly not caught by this Clause. I am aware of the situation to which my hon. Friend refers. If I may be permitted a personal observation, I have never thought much of the situation where a director of a company cannot be bothered to purchase the qualifying shares of the company of which he is a director, but that is purely a personal view. I hope that I have managed to answer clearly, if not glitteringly, the questions which I was asked by the hon. and learned Gentleman and by my hon. Friend the Member for Crosby.
  Question put and agreed to.
  Clause read a Second time and added to the Bill.
  New Clause.—(EXEMPTION FROM TAX ON HOUSING GRANTS.)
  Where, under any enactment relating to the giving of financial assistance for the provision, maintenance or improvement of housing accommodation or other residential

  1207
  accommodation, a payment is made to a person by way of grant or other contribution towards expenses incurred or to be incurred by that or any other person. the payment shall not be treated as a receipt in computing profits or gains for any tax purposes:
  Provided that the foregoing provisions shall not apply to a payment in so far as it is made in respect of an expense giving rise to a deduction in computing profits or gains for any income tax purposes.—[Mr. Barber.]
  Brought up, and read the First time.
  Mr. Barber: I beg to move, That the Clause be read a Second time.
  Mr. Speaker: May I consult the wishes of the House? It did occur to me that we might discuss with this Clause the new Clause No. 18—Local authorities: income tax relief on credit balance of Housing Revenue Account. Clearly, the area of overlap between the two is not marked, and I must take the wishes of the Opposition and the House in the matter.
  Mr. Mitchison: We should find it convenient, Mr. Speaker, and we hope that, if need be, we shall be allowed a Division later when we come to new Clause No. 18 and it is moved formally, as it would be in those circumstances.
  Mr. Speaker: We can discuss it now and I will call the new Clause, if desired, when we reach it.
  Mr. Barber: That would be convenient from our point of view, Mr. Speaker, and I hope, also, that I may refer to Amendment No. 121, in page 64, line 25 [Clause 67], at end insert:
  (5) An amount which by virtue of section (Exemption from tax on housing grants) of this Act is to be excluded in computing profits or gains for any income tax purposes shall also be excluded in computing profits for purposes of the profits tax.
  It is a minor Amendment and more or less consequential on this new Clause.
  I can put before the House the reasons for this Clause very simply and briefly. As the House knows, in general annual grants payable by the Exchequer or by a local authority to assist the provision of housing have hitherto not been chargeable to Income Tax. It has been pointed out that under the provisions of the Bill as drafted housing grants will become chargeable under Case VIII of Schedule D. Of course, this was never the intention of my right hon. Friend or, I am sure, of any hon. Member, and accord-
  1208
  ingly this new Clause restores the position.
  That, I think, is all that I need say, though I shall be willing, with the leave of the House, at a later stage to deal with any points that hon. Members may wish to raise. I think—and, here again, I am willing to comply with whatever the wishes of the Opposition may be—that it might also be as well, although we are discussing the new Clause No. 18 with this, if I were to defer my observations on it until the hon. and learned Member for Kettering (Mr. Mitchison) has spoken.
  Mr. Mitchison: May I deal, first, with what the hon. Gentleman said in support of the Government's new Clause. It seems to me to go a long way beyond what he stated. He spoke of the Clause as though it were only about grants to local authorities. It seems to me to go far beyond that, because it refers to a payment made by way of a grant towards expenses incurred by the grantee or any other person.
  Accordingly, if one takes the case of an improvement grant, it would cover, on the one hand, the Exchequer contribution towards such a grant and, on the other, the grant made by the local authority itself to the individual improver, if I may use the word. Therefore, it relates not merely to local authorities, but to anyone. While I see the point of it, it is, in fact, a far broader Clause than was indicated.
  Moreover, I am a little puzzled by the statement that grants have never hitherto been taxed. I have here a document, which I believe has no statutory force, but which represents the practice about the taxation of local authorities. It is called, according to its cover, Income Tax Rules. It is sometimes referred to as the agreed rules. They are exceedingly complicated. I hope that I shall have the agreement of the hon. Gentleman if I put them in this way: the practice has been that against grants there could be a set-off of expenses incurred—that is, in Rule 55(d)—and after that there was the question of a set-off as between the grants, on the one hand, and the expenditure of the local authority by way of interest, on the other, the point being that a local authority deducts tax from the interest it pays and that unless that deduction is made out of taxed revenue it becomes a

  1209
  liability of the local authority. There is, therefore, a set-off between the grants, on the one hand, and the tax deduction, on the other.
  Then there is a further statement in sub paragraph (e) of the Rules—this is still a question of practice, of course which appears to be general—that there then may be a separate liability to assessment which is, as I understand it, still in respect of the grant under Sections 170 and 171 of the 1952 Act. Therefore, I respectfully suggest to the hon. Gentleman—respectfully, because this is a matter of extreme complication on which I should not like to venture any opinion without hearing what the experts have to say about it—that this is a matter by no means as simple as the hon. Gentleman stated, that the new Clause is of much wider scope, and, also, that it is not quite true to say that grants that were not previously taxed now become taxable.
  I conclude on this because on the principle I appreciate the intention of the new Clause and that it appears to be commendable, but I should like to know what the money effect of it will be. I do not know whether the Treasury has worked that out. I hope that it has, because the Treasury has a habit of coming here and waiting to be asked before telling us, and the hon. Gentleman did not tell us, when he was moving the new Clause, what will be its effect on local authorities, coupled with the abolition of Schedule A. I have indicated, I hope, that on a matter of this kind we are strongly disposed on this side of the House to welcome relief for local authorities.
  I now turn to the new Clause No. 18, which we are also discussing, which proposes to give local authorities considerable and substantial relief. It is called "Local Authorities: Income Tax relief on credit balance of Housing Revenue Account". As hon. Members will be well aware, the housing revenue account is the main housing account of local authorities and feeds the housing repairs account. There also may be a housing equalisation account, but that is an optional account and both the other two are obligatory under the Housing (Financial Provisions) Act, 1958.
  The housing revenue account consists, very broadly—that is not a suffi-
  1210
  cient description of it, perhaps—of the income of the local authority from grants and rents, and so on, on the one hand, and its expenses not only in looking after the houses but also in paying interest on loans, on the other. That account may, at the end, like all other accounts, show a balance one way or the other, and the balance between the credits and the debits was taken in a recent Housing Act as the basis for deciding, on certain assumptions, whether a higher or lower rate of grant should be given to local authorities.
  7.0 p.m.
  It therefore has its precedent in legislation as an indication of the housing financial position of a local authority. But there are, of course, many cases in which there is no credit balance at all, and there may well, indeed, be a debit balance. We recognise that. There are cases where a local authority shows a credit balance, where the revenue received from rents and the like exceeds the expenditure on the houses. As I understand the position, that has hitherto been taxable.
  This is exceedingly complicated, because it goes in with the other balances, one way or the other, of the local authorities. The intention of this Clause, therefore, is, in effect, to provide for relief to local authorities in respect of such balances, but to do it not by saying that such a balance is not taxable, but by providing a countervailing relief to the amount of the balance. That does simplify matters when one is dealing with such complicated arrangements as necessarily exist between the local authorities and the Revenue.
  Subsection (1) of the Clause provides for relief in that form if there is an excess of the kind I have indicated. It says:
  "…the local authority shall be entitled to a deduction from the amount of any income tax with which they are chargeable equal to tax at the standard rate on that excess."
  That clearly follows the usual formula for relief in these cases. The two remaining subsections provide for cases which really arise under the Housing Act, 1961—we are, after all, dealing with taxation matters and revenue has to be treated reasonably—and it would be possible to increase the amount under the foregoing provisions by making excessive transfers to the housing repairs account.

  1211
  The same point arose under the Housing Act, 1961, where power as given to the Minister of Housing and Local Government to disallow such excessive transfers. We think that that could reasonably apply here, and then, obviously, if there were a housing equalisation account—which is simply an account for the purpose of keeping a level run of grant, as it were, in the housing revenue account—that could be disregarded.
  I notice, by the way, that by what I hope is a printer's error—it may be my own, of course—the word "revenue" has been omitted from the first line of subsection (3). However, I have explained the intention of the Clause, and in this very complicated field it seems the simplest way of doing something. Now I proceed to consider what it is what we want to do and why we want to do it.
  What we intend by this Clause is to provide relief from taxation in respect of council housing which, on this side of the House at any rate we regard as a public service. We think it wrong in principle that a public service of this kind should attract taxation, as it appears to do at present, and that it is all the more wrong when housing subsidies—about which I need not go into detail—are given to local authorities. After all, if the Government tax the result, they are giving with one hand and taking away with the other, and that is a procedure always to be avoided, although it is dear to the Treasury, on occasions when it is giving something, to be able to withdraw a little from the gift.
  However that may be, I think that when one goes to the principle of this it is a sound argument that the Government should not give a subsidy in this case with one hand and take away profits by taxation with the other. It may be said that the effect of this would simply be to induce local authorities to pile up an even higher balance in the housing revenue accounts, and that they would do so by charging higher rents, and that rents are quite high enough already.
  There is, however, another possibility. That is that local authorities which found themselves in difficulties over their housing revenue accounts might find that,
  1212
  as they were no longer taxed, they were a trifle more prosperous and able to reduce rather than increase the rents.
  Be that as it may, I pass to the broad considerations. It is quite clear that the local authorities at present stand sorely in need of every support that can be given to them, in relation to their housing activities, by a tax relief. We say that for two reasons. The first is that they have to borrow the money in order to build houses. Though I do not wish to go into the matter at great length, I think that it must be common knowledge in the House that the housing and other activities of local authorities have been sorely restricted in recent years by high rates of interest. The days when they could borrow at 2½ or 3 per cent. under a Labour Government now seem to them like some remote past, but also, I hope, like some immediate future. Certainly, they stand in sore need of financial relief in relation to their housing.
  The proof of the pudding in these matters is rather in the eating, and whether the reason is financial or not—probably it is not wholly that, but certainly it is in part—the local authorities in recent years have found their housing activities sorely restricted; and when we are told that a given number of houses is produced every year it becomes interesting to look at the proportion of the total at present and see how little is actually provided by the local authorities.
  In 1951, for instance, about one-eighth of the housing was built for private owners—that is to say, the proportion was one private owner's house to seven for local housing authorities. If one goes on through the years and takes the General Election years one by one, one finds that the proportion built by local authorities diminishes year by year until, in 1962, five houses were built for private owners as against only three council houses.
  Clearly, the difficulties of house building by local authorities—the difficulties of providing a sufficient amount of council houses—call for consideration in connection with taxation of this activity. I suggest strongly to the Government that there is an overwhelming case for giving local authorities in this respect such assistance as one can. Quite apart from

  1213
  the logical reason that it is absurd to give with one hand and to take away with the other, the practical point is that the more assistance and relief that can be given, the more we are likely to get the council houses which even the Government are now beginning to recognise to be more and more required.
  To put it from another angle, these council houses are houses which are to be built and let, and, without going into any detail, it is houses to let which are sorely needed in the country at present. Those built for private owners are almost all of them houses for sale. If there is this sore need for houses to let, and, judging by their latest pronouncements about housing, I do not imagine that the Government would deny it, surely this is quite the wrong moment to continue taxation on local authorities in this respect.
  Therefore, it is with that kind of background and that kind of consideration in view that I suggest to the Government that they ought to give additional relief to local authorities who are sufficiently fortunate to be able to get some credit balance in their housing revenue account.
  I hope that I have made the point quite clear. I am encouraged in putting it forward by the fact that on the very day that the Opposition Clause was put down, there appeared, by some combination of happy thinking, the Government new Clause indicating some sort of intention, however qualified and however much necessitated by their own acts, to give financial relief to local authorities. I felt that in the collective Treasury brain or heart there had been a faint stirring, a feeling that something ought to be done about taxing local authorities, that their needs required a little better consideration.
  So it is not only because this is a reasonable proposal, but because of the background of the matter and things I can hardly go into at great length now, that I trust that the Government will accept with open arms the new Clause which we are now offering them, the effect being, as I have indicated, to exempt from taxation the credit balance in the housing revenue account.
  Mr. Barber: By leave of the House; I should like to clear up one or two misunderstandings, for which I apologise, about the new Clause in the name of my
  1214
  right hon. Friend. The hon. and learned Member for Kettering (Mr. Mitchison) suggested that in my opening remarks I had referred only to grants made to local authorities. Certainly, I intended to refer to grants payable by the Exchequer or by local authorities.
  The wording of the new Clause refers to
  "a payment…made to a person by way of grant or other contribution towards expenses incurred…"
  It is perfectly true that I said in general terms that the grants in question, by which I meant grants and subsidies and other contributions, had not hitherto been taxed and would not be taxed in future. In saying that, what I had in mind was that the whole object of the Government new Clause was to restore the position as it was under the old Schedule A legislation.
  It is perfectly true, as the hon. and learned Member pointed out, that in certain circumstances there was a liability to taxation. Grants or subsidies, or whatever they were, were taken into account, for example, if they constituted a trading receipt, for example, if they were in the hands of someone carrying on business as a builder or property developer. Until the other day I had not appreciated that some grants were paid to such people.
  Again, if grants are paid to help to meet expenditure on property and that expenditure itself would qualify for tax relief, for example, expenditure on repairs to or maintenance of the property and in respect of which a maintenance claim could be made, the grants were set off against such expenditure and the tax relief allowable was based on the net expenditure borne by the claimant after setting off the grants. A similar principle will apply in future in the case of taxation under Case VIII as did apply in the case of taxation under Schedule A.
  7.15 p.m.
  Perhaps I should also have mentioned when I moved the new Clause that Amendment No. 121, which I suggested might conveniently be taken with it, merely contains corresponding provisions for Profits Tax. In a sense, it is almost consequential.

  1215
  I should now like to turn to new Clause No. 18, in the name of the hon. Member for Cardiff, South-East (Mr. Callaghan), to which the hon. and learned Member has spoken. In subsection (1) it provides that if in any Income Tax year a local authority has a credit balance in its housing revenue account, the authority shall be entitled to a deduction from the amount of any Income Tax with which it is chargeable equal to tax at the standard rate on that balance. As I understand it, the intention is that the local authority should escape any liability to tax which arises in respect of rents brought into the account where the account shows a credit balance. Subsections (2) and (3) relate to points of detail on the computation of the credit balance of the housing revenue account and I do not think that the House would wish me to spend any time on those.
  The new Clause was put down after the Government new Clause which gives special tax treatment to statutory housing grants. At first, I wondered whether the hon. and learned Gentleman had taken into account the effect of the new Clause which I moved on behalf of my right hon. Friend. As the Opposition new Clause is drafted, it could give relief from tax in respect of a credit balance although that balance resulted from the receipt of housing grant which, under the Government new Clause, was not taken into account as an income receipt for tax purposes. The hon. and learned Gentleman will agree that that would clearly be nonsense. However, I want to direct myself to the substance of the Opposition new Clause.
  I should remind the House of the present position. Localauthorities are under a statutory obligation to keep a housing revenue account of their income through expenditure in respect of various housing schemes. The sums which are credited to the account include rents, housing grants and income from investment of money borrowed for housing schemes. The debits to the account include interest on or instalments in repayment of loans raised for housing schemes, management expenses and statutory contributions, if there are any, to the housing repairs account, or the housing equalisation account made for the purpose of
  1216
  equalising the income of the housing revenue accounts derived from housing grants and so on over any period during which loan charges required to be debited to that account will be payable.
  The important point which is relevant to the new Clause is that the balance of the housing revenue account as such has no significance for tax purposes. It is especially significant for other purposes, and the hon. and learned Gentleman reminded us of them, but for the purposes of taxation the balance of the housing revenue account seems to have no significance.
  The various elements in the account to which I referred a few moments ago have to be treated individually for tax purposes. For example, the rents from house property are taxable in the same way as rents generally, and the interest which is credited to the account is taxable either by deduction at source or by direct assessment. Moreover, certain debits to the account, such as instalments in repayment of loans, would not be deductible for tax purposes, although if one looked merely at the balance of the housing revenue account and gave relief from taxation on the basis of that balance, one would be doing so on the basis that those instalments of repayments of loans, which are not deductible for tax purposes, were being treated as though they were so deductible.
  Mr. William Warbey: I am trying to follow the hon. Gentleman's argument. He said earlier that the items are treated separately for tax purposes, and that this applies to rent. How does one assess the tax on rent, treating the rent as a separate item regardless of expenses?
  Mr. Barber: I have in mind the fact that under the old system rent was liable to tax under Schedule A, and also the provisions for excess rents where the income from property exceeded the Schedule A value. In future, there will be a new system whereby rents are assessed under Case VIII. On the other hand, investment income which accrues either to a local authority or to anybody else is dealt with in a different way in the Income Tax Acts.
  All that I was pointing out was that it is basic to the whole way in which

  1217
  we levy taxation in this country that we should not lump together the whole of the income, whether it is of a revenue nature or of a capital nature, deduct from that expenditure, whether it is of a revenue or of a capital character, take the balance and give relief from taxation, or levy taxation. What one ought to do is. to follow the system, which has hitherto been followed in the case of local authorities, and that is to look at these various sources of income in isolation and deal with them accordingly from a taxation point of view.
  Mr. Mitchison: I appreciate that there are distinctions between capital and income and that taxation proceeds by various items. The hon. Gentleman talked about not lumping things together, but is not that what is done? Has the hon. Gentleman looked at these agreed rules? Rule 55(f) says:
  "The amount, if any, by which the total interest paid in respect of all grant-aided schemes…exceeds the sum of (i) the aggregate taxed income of all such schemes"—
  and that includes all these matters—
  "…(ii) the grants less expenses is to be merged in the main set-off computation".
  The main set-off computation relates to a set-off against the tax deducted from interest paid by local authorities. I suggest to the hon. Gentleman that the practice—and there is authority for it in the courts—is to lump these matters together, the exception being Section 171, of the 1952 Act.
  Mr. Barber: What one does not do is to look at the housing revenue account and merely levy tax on the basis of the balance outstanding on that account. I think that the hon. and learned Gentleman will find that the taxation of rents in the hands of a local authority is treated differently from the taxation of any interest which may be credited to the same housing revenue account. At any rate, be that as it may, I submit that there is no reason why local authorities, like any other landlord, should not pay Income Tax on income which is derived from the ownership of property.
  The principles which we are discussing now raise issues which remind me very much of the debates that we have had on previous occasions concerning building societies and other worthy institutions which fulfil a most useful
  1218
  social purpose. As the hon. and learned Gentleman said, one of the most valuable social services provided today is that of local authority housing, particularly for the old, the infirm, and people living on small incomes who may not be able to afford an economic rent; but I would not have thought it right in the case of local authorities, any more than in the case of building societies, to provide them with a special tax exemption of the kind proposed by the hon. and learned Gentleman.
  As I am sure the hon. and learned Gentleman will admit, we have already done a great deal for local authorities by way of subsidies and in other ways, and in the recent White Paper on housing in which we outline the Government's proposals for expanding the provision of housing these words appear:
  "…given the assumption"—
  and, to my mind, this is an important assumption—
  "that proper rents are charged subject to rebates for those who need them, the Government will be prepared to see that local authorities receive whatever subsidy they need to carry through their housing responsibilities and to plan ahead with confidence."
  The provision of local authority housing is both necessary and desirable, but I do not think that it is in itself a sufficient reason for giving it specially favoured treatment for Income Tax purposes as suggested by the hon. and learned Gentleman.
  I should remind the House that the Opposition's new Clause is open to further objections because, as drafted, it could have the effect of reducing a local authority's Income Tax liability to less than what it should be under the ordinary arrangements for collection of tax by deduction at source. Where local authorities pay interest under deduction of tax on loans or other annual payments, they are required, like anyone else making such payments, to account to the Inland Revenue for the tax so deducted.
  This tax is, of course, the tax of the recipient of the income, not the tax of the payer. If the payer has sufficient income taxed at the standard rate for the year of assessment to cover the annual payments, his debt to the Inland Revenue is franked by the tax which he bears in the ordinary way, butin other cases a separate Income Tax assessment is made on him to collect the tax which he has deducted,

  1219
  or so much of it as is not franked by tax which he otherwise bears.
  The great majority of local authorities are in this position, that is to say, their liability is limited to handing over to the Inland Revenue the tax which they have deducted from annual payments in so far as it is not franked. As the Clause is drafted, it would improperly—and I am sure the hon. and learned Gentleman will agree—allow a deduction against this tax of an amount equal to tax at the standard rate on the credit balance of the housing revenue account, and I am sure that was never the hon. and learned Gentleman's intention.
  Mr. Mitchison: Why not?
  Mr. Barber: The hon. and learned Gentleman asks "Why not?" The reason is that the tax which is deducted is really the tax of the recipient of the income, although it is, in fact, deducted by the payer. Consequently, if it is not franked, it ought to be handed over to the Inland Revenue.
  Apart from the defects in the Clause—which prevent it from achieving what I would have thought was a not unreasonable objective, although I disagree with it—the basic principle behind it is wrong. There is no reason why local authority housing should receive the special treatment for which the hon. and learned Gentleman is pressing. In asking the House to reject the hon. and learned Gentleman's Clause, I do so not only on the somewhat narrow technical grounds to which I thought it proper to refer, but also on the broader principle with which I dealt.
  In conclusion, I remind the hon. and learned Gentleman of the passage in the recent White Paper on Housing which makes it clear that, assuming proper rents are charged, with rebates for those people who really need them, we shall see that local authorities receive whatever subsidy they need to carry through their housing responsibilities and to plan ahead with confidence. That, I should have thought, is a critical pledge and a far better way of dealing with local authority housing than the way proposed by the hon. and learned Member.
  7.30 p.m.
  Mr. Michael Stewart: I propose to say only a few words on this
  1220
  new Clause. I am not going into the financial complications with which the Financial Secretary was concerned. There seemed to be a difference of opinion between him and my hon. and learned Friend the Member for Kettering (Mr. Mitchison) as to the exact method of levying this tax, but I think the hon. Gentleman went to the heart of the matter when he said that he did not see that any local authority should not pay tax on its rents just like any other landlord.
  I am sure that that approach is wrong. The hon. Gentleman was talking as if we ought to take care to see that no one agency does too much in providing housing. He seemed to fear that if we gave this concession it would put local authorities in a better position than other potential landlords to provide housing. A good many of us would not at all mind if that were so.
  The hon. Gentleman did not tell us what difference it would make in any actual sum of money coming to the Exchequer if this Clause were added to the Bill. How much less comes to the Exchequer by reason of the fact that there is no provision like this? I should be surprised if it would make a substantial difference. We put down our new Clause looking to the future. I hope that there would be an increased use of methods of building and that local authorities would be able to provide good homes at less real cost and ultimately the burden of what they have to pay in interest, quite apart from what happens to interest rates, would go down. Without some provision of this kind the effect of any progress which any particular local authority is able to make in this field would be that it would be more liable to pay tax if it were more successful in making such reductions in its expenditure than at present.
  Great stress was laid by the Financial Secretary on the passage from the recent White Paper on Housing, which said that if only local authorities would charge what the Government are pleased to call "proper rents" the Government would see that they got whatever subsidies they needed. It has always been a theme of the Government that local authorities ought to charge what they call realistic rents for houses. Suppose some local

  1221
  authorities were increasingly to listen to the Government's argument on this matter and start raising their rents. All the thanks they would get from the Government for that would be that they would have to pay a larger amount in tax.
  I should have thought that if the Government were interested in seeing that local authorities charged what the Government think are realistic rents the Government might do something to see that if local authorities did so they would have rather more of the advantage accruing to local authorities. The only valid argument which can be advanced to local authorities in favour of charging higher rents would be that they would then have more income with which to build more houses and not have to pay more to the Treasury.
  The passage which was quoted went on to say that if local authorities paid what the Government call proper rents the Government would be prepared to pay whatever subsidies they need. That statement comes near the end of the Government's period of office. A statement like that would be more appropriate for a Government just entering into office. To tell local authorities now that, provided they do this, that or the other, the Government are prepared to see that they get whatever subsidy they need, will fall rather coldly on the ears of local authorities—as, indeed, it has.
  If the hon. Gentleman is acquainted with some of the consultations going on between the Ministry of Housing and Local Government and the local authority associations about the possible future of subsidies he will know that the housing authorities certainly do not think that they are getting adequate subsidy at present, particularly in view of the high interest rates they have to pay. If the Government want to give any credence to their profession now that they are willing in future to do what they have not done in the past and to provide local authorities with the subsidies they need, they might do something by way of earnest of intention.
  Our new Clause, as my hon. and learned Friend explained, would give the Government the opportunity to show local authorities that it is not just a
  1222
  promise in a White Paper, but that they have taken the opportunity of the Finance Bill to show their good will to local authorities. I hope that the Government will reconsider this matter before a final decision is taken.
  Question put and agreed to.
  Clause read a Second time and added to the Bill.
  New Clause.—(CAPITAL ALLOWANCES: RETAIL SHOPS.)

  (1) Subject to the following subsections, the Income Tax Act 1952 shall have effect as if in section 271(1) (which defines "industrial building or structure" to mean a building or structure in use for the purposes listed in paragraphs (a) to (g) of the subsection) there were added after paragraph (g) the following paragraph—

  "(h) for the purposes of a trade carried on in retail shop"

  and as if in subsection (3) of that section the words "retail shop" were deleted wherever they appear.

  (2) For the purposes of this section, section 265 of the Income Tax Act 1962 shall not apply.

  (3) No allowance or charge shall be made by virtue of this section for any year of assessment earlier than the year 1963–64 and in any case in which, one the day preceding any such year of assessment, a building or structure is to be treated as an industrial building or structure only by virtue of this section 268(5) (which provides for treating part of the expenditure on a building or structure as written off in years in which no annual allowance is made in respect of it) shall apply with the omission of proviso (a).

  (4) Where by virtue of this section a balancing charge is made on a person in respect of any expenditure, the amount on which it is made shall not exceed the amount of the allowances made to him in respect of that expenditure by virtue of this section.—[Mr. Graham Page.]

  Brought up, and read the First time.
  Mr. Graham Page: I beg to move, That the Clause be read a Second time.
  This new Clause arises out of approaches made to the Chancellor of the Exchequer by the Co-operative Union, the National Chamber of Trade, the Retail Distribution Association and the Multiple Shops Federation. All those important bodies hold the view that it is wrong that no allowance should be given for tax purposes for the gradual writing off of the capital cost of structure of shop premises. This, of course, is not the first occasion on which such an approach has been made to the Chancellor. Repre-

  1223
  sentations on these lines have been made for several years.
  The Clause would apply—and I stress this—only to the annual allowance. It would apply the annual allowance provisions to retail shops. The annual allowance up to the present has been 2 per cent. on the cost of structure of premises and now under Clause 34 of this Bill it will be 4 per cent. The new Clause, therefore, does not apply to initial allowance or investment allowance. Those are what I might call the real capital allowances, the special stimuli to development, whereas the annual allowance is merely a depreciation allowance and not a real capital allowance primarily intended to stimulate development.
  I refer to the actual wording of the Clause as it appears on the Notice Paper and in particular to the Sections of the Income Tax Act, 1952, which the Clause mentions. In subsection (1) there is reference to Section 271(1) of that Act. That Section contains the definition of industrial building or structure to which the allowance at present applies. It is intended by the Clause to include a retail shop within the definition of industrial building or structure. This may perhaps sound anomalous, but in fact in Section 271(1) one finds a long list of various properties not all of which come within the common understanding of the phrase, "industrial building or structure".
  Subsection (2) of the Clause excludes Section 265 of the Income Tax Act, 1952, which refers to initial allowances; those were amended later to alternative form, the investment allowances. The Clause refers only to annual allowances under Section 266 of the 1952 Act. Under that Section the allowance was originally one-fiftieth per annum of the capital expenditure incurred in the construction of the building, but under Clause 34 of the Bill it would be one twenty-fifth of that expenditure. It would be possible, therefore, if the Clause were accepted, to write off the expenditure on construction over 25 years.
  Let me for the purpose of argument class this as a capital allowance, although in a moment I shall have to show that I do not agree that it should be classed as such. It should, we are told, be classed as an initial allowance and an investment allowance, which is one which is granted
  1224
  as a matter of policy rather than revenue. We have been told that that was the reason for granting these capital allowances for industrial buildings; it was to stimulate the development of industrial buildings.
  If that is the argument for the annual allowance included within other capital allowances, I suggest that it is a matter of urgent policy at present to recognise that the construction of retail shops should receive such a stimulus. It is urgent policy that our city centres should be rebuilt. Literally hundreds of towns are drawing up their plans for reconstructing the centres of their cities. One of the great difficulties of such reconstruction is the displacement of the existing trader and finding accommodation for him when he returns at a figure which he can afford. Many small traders are being displaced in this way, and it is extremely difficult to find accommodation for them at the sort of rent which they can afford when they return to the area in which they have been trading perhaps, for generations. Any taxation relief which can be given in this respect will ease that difficulty and will assist in keeping the rents down for those traders who wish to continue to trade in the reconstructed area.
  I say this not simply from the point of view of the tenants of private landlords, because much of the reconstruction is being undertaken by local authorities and they, too, find that they have to charge high rents for the new premises. Some local authorities are undertaking the development themselves. Any taxation relief of this sort would be welcome. Some are joining with private developers in the development of their city centres, but the private developers may hesitate to join in that way and may, perhaps, be encouraged to develop elsewhere where there is a form of tax relief for them.
  Another urgent policy reason for such a concession is that we are faced with the recent Offices, Shops and Railway Premises Act, which will force the owners and occupiers of shop premises as well as of offices to make substantial improvements to their properties. If they endeavour to make those improvements to some of the older properties it will be a matter of putting new wine into old bottles, and in many cases reconstruction is necessary rather than

  1225
  patching up. For that purpose one should give the stimulus to die reconstruction of shop premises, particularly in the old areas, by a concession such as I am suggesting in the new Clause.
  7.45 p.m.
  The main point which I wish to make is that annual allowances are not merely a stimulus to development. The policy considerations, the stimulus, may apply in the case of initial allowances and investment allowances but not in the case of annual allowances. It is simple accountancy that these are a recognition of depreciation and that without them profits are not correctly stated. There is a tax allowance for repairs, as opposed to construction, and this very fact encourages traders to do repairs to their shop premises when reconstruction is required. It is difficult to give any statistics of the effect of tax allowance on repairs in encouraging traders to do repairs rather than reconstruction, and it is not easy to say exactly how much desirable reconstruction is being rejected in favour of extensive and unsatisfactory repairs. But from what I am told, I believe that that is in fact happening.
  I am told that on the basis of 50 years' obsolescence, profits of shops are being over-stated by as much as 5 per cent. in the absence of annual allowances, which means that the Chancellor is collecting tax on 5 per cent. of the profits of retail businesses which are not really profits at all. They ought to have been set against proper depreciation of the premises. If that figure is true, then my right hon. Friend is taking a very large sum in tax upon money which is not truly profit because we are disregarding depreciation of the premises.
  In April, 1951, the Committee on the Taxation of Trading Profits and in June, 1955, the Royal Commission on the Taxation of Profits and Income both recognised the fairness of charging depreciation on commercial structures against profits. That must surely be the right thing to do. To ignore it is to ignore an expense which, to use the words of the Act, is "wholly, necessarily and exclusively" incurred in earning the profits. It is not ignored in this way elsewhere in Europe. At one time we were called a nation of shopkeepers, but in this respect
  1226
  at present we are at a disadvantage compared with the shopkeepers of the rest of Europe. I find that 12 out of 14 countries which allow depreciation to be charged for tax purposes at all, allow it to be charged in respect of shops.
  Retail shops become obsolescent quite as quickly as factories on which there is this allowance. I say that not because of any destructive user of shops, as one can say there is in factories, but because of the new methods which come into use and the new operations in shops. We witness this more and more at present as modern forms of retail shops appear and the older shop becomes obsolete. My right hon. Friend the Chancellor of the Exchequer should recognise this.
  I do not put the Clause forward as an exclusive right of retail shops. There may be other properties entitled to the charging of depreciation against their profits. However, I contend that, in the case of retail shops, the argument is unanswerable.
  Dr. Horace King: I have been asked, as I was before the Budget was prepared, by various groups of retailers in my town and by the chamber of commerce to support the new Clause which the hon. Member for Crosby (Mr. Graham Page) has very clearly moved. I shall do so very briefly, because, in the letters which I have received from grocers and other retailers of my town, they have always argued the point of fairness and equity. They have contended that they have been treated unfairly in this matter. Whenever finance is associated with unfairness, it is the sense of justice that must appeal to a Member of Parliament.
  I would only say to the hon. Member for Crosby, who spoke so clearly about this, that he pitches the benefits of the Clause really high. If he wants to tackle the high cost of shopping in new cities, he ought to get down to tackling the land racket, which has a much more serious effect on costs. However, it would not be in order to discuss that problem on this Clause.
  I remind the House that Section 271(1) of the Income Tax Act, 1952, is a subsection of definition. It lists all the various groups of British industry that

  1227
  can benefit from certain tax concessions—mills and factories; transport; water and electricity; any trade which manufactures; any trade which stores goods to be manufactured; any trade dealing with mineral deposits; then the whole of agriculture, because it mentions any trade dealing with the cultivating of land. The subsection having listed those that it includes under the benefits which I shall mention in a moment, it carefully excludes in its excluding list retail shops. Retail shops are deprived of the benefit of relief for capital expenditure, relief for initial allowance, relief for depreciation allowance, and relief for balance charges.
  I shall be very interested tonight to hear the case of the Financial Secretary or the Economic Secretary for separating retail shops in this way. As the hon. Member for Crosby said, shops have a capital which depreciates just like anything else. Shops have to be replaced. The replacement of retail shops in this modern age will proceed at a faster pace than ever before, certainly in towns and cities. I can understand that there is no case for special incentives of the kind that we give to industries for high policy, such as the initial allowance that we give for new capital which is directed to support an export drive.
  There must be a case in equity for equal relief for this industry—it is an industry; people work in it; it renders a valuable service to the community—as compared with other industries, on the basis that they have to invest capital and that capital—their shops—wears away just as surely as a factory or anything else wears away.
  At this time retail shops are paying savage rates, because the rate burden which some of us have spoken about affecting domestic consumers weighs heavily on retail shops in cities and will continue to increase dramatically. This burden and the fact that the Government give them no relief of the kind we seek means that extra burdens must be borne by those who buy in retail shops. Every expense of this kind that the Government can relieve retail shops from is a relief which will ultimately come back to the consumer. Therefore, there is a case in equity for the Clause. The Minister may not accept its exact terms or the exact ratio of relief proposed, but I
  1228
  believe that tonight he should look very carefully at the principle for which we are fighting.
  Sir Edwin Leather: I want very briefly to support my hon. Friend the Member for Crosby (Mr. Graham Page), very much on the lines outlined by the hon. Member for Southampton, Itchen (Dr. King). My hon. Friend the Financial Secretary will recall that in introducing his Budget on 3rd April my right hon. Friend the Chancellor of the Exchequer referred very strongly to the equity of taxation. He used these words:
  "The integrity of our tax system depends very much upon its being fair to all concerned, and upon the avoidance of discrimination."—[OFFICIAL REPORT, 3rd April, 1963; Vol. 674, c. 482.]
  This has been a principle which successive right hon. and hon. Gentlemen on the Treasury Bench over many years have never hesitated to plead with considerable urgency and passion when it was an excuse to avoid making an allowance to any worthy cause which people thought should be dealt with. I put it to my hon. Friend the Financial Secretary very sincerely that in this case the present system is discriminatory against those in retail shops.
  I must immediately declare that I have a personal interest in this, to the extent that I am a director and a very modest shareholder in a group of companies which owns retail shops. I hope, therefore, that this might also give me some qualification to understand the problem.
  In the present situation the pretence is that there is something quite different about running a retail business from running any other kind of business. I do not know exactly how my hon. Friend the Member for Crosby arrived at his figure of 5 per cent. The figure which I want to give to the Financial Secretary is considerably higher than that, perhaps because it has been arrived at in a different way. I want to state my case for the inequity, the quite unreasonable discrimination against the retail trade in the present situation, in this way.
  It is generally accepted that industry's earnings—what we euphemistically choose to call profits, largely for polemical reasons—should pay to the State about 50 per cent. in taxation. This has been about the balance, when Income

  1229
  Tax and Profits Tax are added together, of most industrial countries for a very long time. It has not varied by more than 1 per cent. or 2 per cent. from this figure.
  If my hon. Friend the Financial Secretary studies the balance sheets of any of the main branches of the retail trade and relates the taxation figure to the profits figure, he will find that it is never anything like 50 per cent. The taxation figure in the companies of which I have some experience regularly runs between no less than 60 per cent. and 65 per cent. The reason is purely because there is no depreciation allowed on the buildings. Therefore, any sensible management, any management following sound accountancy principles, just has to take that figure out of its profits to provide for the replacement of its assets.
  A directly discriminatory factor to the extent of between 10 and 15 per cent. of earnings is imposed under our present system on the retail trade and, as far as I know, against no other trade. It is an inequity which even the ingenuity of my hon. Friend the Financial Secretary would have the greatest possible difficulty explaining away. I do not think that either he or the Economic Secretary, or even both of them together, could explain it satisfactorily.
  8.0 p.m.
  The point made by my hon. Friend the Member for Crosby about the rebuilding of city centres is of great importance. This aggravates the position. In many big cities today there is a considerable awareness, and rightly so, of fire risks and a new emphasis on fire regulations. Many shops that have previously been regarded as having adequate fire arrangements are being inspected by fire prevention authorities, which are enforcing major alterations.
  I do not object to this, because I realise that it is all in the interest of the public. However, it is unfair that this kind of thing should be applied by any authority to one industry while, if it is applied to another, that industry can charge the costs to depreciation in the normal way. If changes happen to be necessary to a retail shop no depreciation allowances are made.
  We are going through a period when tremendous changes are taking place in
  1230
  the whole system of retailing. Hon. Members may have read in this morning's newspapers about a supermarket deal involving about £9 million, and 1,000 new stores being planned. Everywhere we look we see the changing face of retailing, whether it be a small chemist's shop or a vast department store. There are new ideas and developments and a vast number of new buildings. If these services are to be efficient and give the British public what they want, and what competition demands, a great deal of capital expenditure by retail store owners is necessary and which, if it took place in any other industry, would be granted depreciation allowances without question.
  For some peculiar historical reason the retailer is discriminated against. I hope that the Financial Secretary will tell us that the Treasury will apply the doctrine of equity to the retail trade and maintain the integrity of the Budget, on which my right hon. Friend the Chancellor seems so keen.
  Mr. Percy Holman: I wish to give my fullest support to the new Clause, although it is asking for only half a loaf. In years past such a Clause has been sponsored by myself, sometimes in the company of the Liberal Party. There has, I think, been a feeling in the past that when the names of hon. Members of more than one party are put to a new Clause there is some prejudice against it being called. For this reason, it pleases me tonight to find that on this occasion the Clause has been called; although, as I say, it seeks only half a loaf and not all of it.
  No one has been able logically to show what difference there is between industrial and commercial property. The two are integrally connected. I would not produce one pennyworth of goods unless I could sell them. The sales organisations must, therefore, deserve the same treatment as the factory. Sales organisations are probably a more vital element in the economy than a great deal of industrial development, especially for our export drive.
  The Clause puts a wedge into the present discrimination between commerce and industry. The conditions in commerce have altered drastically in the last few years. The old type of village or small community shop could continue

  1231
  for generations with very little change; perhaps a more modem counter occasionally and one or two new features in the window display. Largely due to the influence of the Co-operative movement, which created the majority of the first 1,000 self-service stores, there has been a remarkable development in retailing—a development that has led to more economic retailing, bigger units and self-service stores. It is often the case that a 50 to 60 per cent. increase in turnover can take place with hardly any increase in staff.
  The new trends in retailing involve considerable capital outlay and if I were to compare factory with retail establishment today I would say that the competitive needs of the retail trade involve in the aggregate a bigger percentage of capital outlay than the factory because of the steady and planned modifications and improvements that must be made. For this reason I support the half loaf, if I cannot have the whole one. I welcome the hope that has been expressed that for a change the Government will at least express a logical argument why a doubling of the allowances for factories and the total ignoring of the commercial side is equitable. As I have explained, in many ways the retail industry can affect the output and sales ability of the factory. There are other aspects than pure economy in retailing today and those, in their turn, affect our whole standard of living.
  Mr. W. R. Rees-Davies: I support in a general way what has been said by my hon. Friend the Member for Crosby (Mr. Graham Page), my hon. Friend the Member for Somerset, North (Sir E. Leather) and the hon. Member for Bethnal Green (Mr. Holman), but with a slightly different sense of emphasis and with a different approach to the timing.
  It is unreal to expect hon. Members in favour of the new Clause to succeed in their venture tonight and to obtain the support of the Government for their proposal. I apprehend that the new Clause will be turned down.
  Mr. Cyril Bence: The hon. Member has no reason to say that.
  Mr. Rees-Davies: I do not think that there is an enormous amount of fire in the belly of hon. Members opposite on this issue.
  My hon. Friend the Member for Crosby is adept in proposing matters which, in time, succeed in obtaining their place on the Statute Book. I have in mind the Cheques Bill and many other Measures which have become Acts of Parliament. However, let us get the position clear. If it is said that the present position is to be pursued for industry only, because industry reflects a higher benefit to the national economy and therefore needs to be given preference, then I can understand that argument. I should like to know exactly what are the principles underlying the policy of the Government in this matter. For this reason, I reserve my views on the subject because I am not entirely sure that one can say that the retail trade is on the same basis as industry.
  That brings me to another important matter. Is there not today a changing face in the world as between the importance of the retail trade and industry? Are they not closer partners now than they have ever been before? For example, I am anxious to see that we do not gradually remove the small trader entirely from the face of Britain. One of the great advantages which the large retail shops have is the immense capital laying behind them. Whilst taxation may do some damage to them relatively, in that nearly 65 per cent. of all their profit earnings is taken from them—in industry, it is about 50 per cent.—none the less they have fairly high profit margins, and as they are able to buy in very great bulk they are succeeding gradually in eliminating the small trader, who is frequently unable to build up the savings he needs if he is to modernise. He is not able to keep up with the Joneses. This is the problem. I find that many of the small traders in Thanet are not able to put aside the amount necessary to enable them to compete with the big supermarket when the big supermarket moves into the High Street of the local town.
  There is thus the second problem that, though we want a true efficiency in modern retail methods, many of our shops have a layout and composition too completely out of date to enable them to

  1233
  trade in modern conditions. For example, it is expensive for them to turn over even from what I might call service by the individual to self-service—or they may want to provide self-service in part of the shop but not in the whole of it. It is undoubtedly true that they are unable to attract the capital necessary to enable them to provide a really attractive shop front and layout that is commensurate with those provided by the large retail distribution chains.
  Furthermore, they are now competing with new types of salesmanship. We have this high-pressure American salesmanship coming in, with what might be called the give-away method, and direct sales to the public. We have the great Wolfson chain, and other firms selling by mail order. These are all great competitors of the small trader. That means that he not only has to compete with "big brother" in his own realm but with many other new brothers in other directions.
  The situation has somewhat changed from what it was a few years ago when, if Irecollect correctly, one never really had it suggested that these allowances should be given to the retailer as they are to the industrialist. Rateable value has now become one whole at last. However we may complain about it or whatever we may say on its behalf, the fact remains that we are now paying fair rates, and I should have thought that it was time for the Treasury carefully to examine its principles and see whether it should not extend these allowances. The Treasury would at the same time have to look at the hotel industry, for instance, because it is obvious that if the retailer is to come in on this, consideration will also have been given to whether the hotelier, who is also providing a service, ought not to be put on the same basis.
  I do not think that one can expect to deal with this matter tonight, but the whole question needs careful review. I am coming round to the view, to put it no higher—unless someone can persuade me to the contrary—that these allowances should go right across trade and industry as a whole; and that it would be better to enable these people to equip and improve themselves out of their profits. They could then even pay a high rate of flat taxation overall—the money must come from somewhere, and if the
  1234
  Treasury does not get it in one direction it will get it in another.
  I am not sure that it would not be better to review this whole realm of taxation and then, having enabled retail traders, hoteliers, and all those in commerce and industry to re-equip and put the proper capital into their businesses, later take away money from them on what would be an equitable basis. As I say, I do not expect a full answer tonight, but we will all be interested to hear what the Minister has to say on the general principles of the whole issue.
  8.15 p.m.
  Mr. A. E. Oram: I could follow the argument advanced by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) that the small retailers are faced by the competition of mail order business, and so on, but I did not follow quite so clearly his argument about the big shops, because they would gain as much as, if not more than, the small trader if this new Clause were accepted.
  The hon. Member for Crosby (Mr. Graham Page), and other hon. Members, made out an interesting and sound case in favour of the central proposition in the Clause. There may be objections to the actual form of the Clause—we shall all listen with interest to the contributions from the two Front Benches in that respect—but I certainly support the grant of capital allowances to retail shops on an equal basis with industrial undertakings.
  I have never been able to understand why this artificial distinction has been made. On both sides of the House there has been the rather irrational supposition that factories—the productive processes—are in some sense virtuous, whereas commercial premises—distribution—are in some sense less virtuous, and rather wasteful. I have never been able to accept that proposition. What is the use of making a pair of shoes and leaving them in the factory? They are of no use at that stage. They are useful only when on a wearer's feet. To get them on to a wearer's feet, retail shops and other means of distribution are essential, and should be equally treated for taxation purposes.
  My hon. Friend the Member for Southampton, Itchen (Dr. King) quoted

  1235
  from the 1952 Income Tax Act the list of premises, operations, and so on, that benefit from the present capital allowances. Agriculture, transport, and factories of all kinds are listed. While he was speaking, I thought of the homely pot of jam. All the apparatus and buildings connected with the growing of the fruit on the farm, its transport and its processing in the jam factory get the benefit of the capital allowances but, from then on, for some totally mysterious reason, there is a disadvantage to those who undertake the delivery of the jam to the table.
  I hope that we shall get a favourable response; not necessarily acceptance of the Clause, but an indication that the main proposition is at long last accepted, and that this completely artificial division between the productive and distributive industries will be brought to an end.
  Mr. Bence: A new situation has arisen in the distribution of manufactured products, because many retailers now have to undertake, mainly under the resale price maintenance system, some servicing of the product they market. This in the main applies to motor cars, but retail establishments dealing with such other products as refrigerators and radio and television sets have to provide for the repair, maintenance and servicing of machines of the manufacturers for which they have the agency.;
  Would such an element in redistribution qualify for capital allowances for the installation of equipment and machinery to perform such a service to a specific product? The motor car agent has to install special equipment. The Ford Motor Company, for example, lays down that its agents must have certain standard equipment to examine and test it products. Does the garage owner, who would be the retailer, receive a capital allowance in respect of this equipment installed to market a fixed price product, with fixed prices for servicing?
  Mr. Barber: The object of the new Clause, as my hon. Friend the Member for Crosby (Mr. Graham Page) has said, is to extend the system of annual allowances, but not investment or initial allowances, to the retail shops. The hon. Member for East Ham, South (Mr. Oram) said
  1236
  he would assume that I would refer to the form of the Clause, but I should like to confine what I have to say to the principle behind it, and the points which have been raised in this interesting but short discussion on an important matter.
  Under the Clause, the relief proposed would run for all capital expenditure on retail shops incurred during the last fifty years and for all future expenditure. Relief would start for 1963–64 and would be at 2 per cent. per annum, except that, in view of an increase in anual allowances proposed elsewhere, it would be at 4 per cent. per annum in respect of expenditure incurred after 5th November last year. The allowance of 2 per cent. for expenditure incurred before 5th November, 1962, would run for what was left of the fifty years, and for expenditure after 5th November it would run at 4 per cent. for twenty-five years.
  Retail shops include
  "any premises of a similar character where retail trade or business, including repair work, is carried on."
  As the House knows, they are excluded from benefits of the capital allowance system, together with such premises as dwelling-houses, showrooms, hotels and offices. This exclusion is by specific provision in the legislation which provides for capital allowances. They were excluded from the scheme of the Income Tax Act, 1945, because, as explained at that time, the policy was to encourage modernisation, expansion and re-equipment of our productive and manufacturing industries.
  I can see the great attraction of this proposal considered in isolation. The appearance and efficiency of retail shops are matters of importance in any advanced society. Reference has been made to the great need to rebuild the centres of many of our cities, which means rebuilding much commercial property, including retail shops. I well remember not being very impressed by the retail shops I saw in Moscow, but even there valiant efforts are being made.
  The hon. Member for Bethnal Green (Mr. Holman) was quite right in saying that we cannot concentrate exclusively on production and manufacture. There are all manner of commercial buildings, of which shops are only one example, which contribute in one way or another to the efficiency of the community and are taken for granted today in what is

  1237
  sometimes referred to as the affluent society, if I dare use that terrible expression. It is true to say that, in general, commercial premises tend not to suffer wear and tear to the extent suffered by industrial premises. Furthermore, it is true that over a period retail shops tend to appreciate rather than depreciate in value. These are relevant factors, but I would be the first to admit that they are by no means conclusive.
  There are two important factors which the House must take into account. The first is that in any consideration of tax relief we have to consider priorities. This inevitably raises the matter of cost. I am told that the cost of this proposal would rise eventually to about £40 million a year. It is plain for all to see that capital expenditure on retail shops is considerable. I have heard the extent of expenditure on retail shops made the cause of complaints in the House and outside, but I do not take the same view. It is said by some that too much of our scarce building resources is devoted to shops and shop fronts when there is still a housing shortage, but, quite apart from the. effect on the building industry, which, we know, is pretty well stretched, there is also the question whether tax relief of the order here involved should not be devoted, if it were available, to some other purpose.
  I would say to my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) that this year my right hon. Friend has provided considerable tax relief for industrial building and plant and machinery. Having determined, as obviously he did, the overall relief which in his judgment was available, I hope that my hon. Friend will take the view that, at any rate this year, my right hon. Friend was right to concentrate on productive industry. However, if that argument is not accepted, and this is very much a matter of judgment and opinion, and even if it is thought that an exception should be made—perhaps on the ground of equity put forward by the hon. Member for Southampton, Itchen (Dr. King)—I cannot see that it would be right to single out for special relief this one category of commercial buildings.
  In fairness, it should be said that my hon. Friend the Member for Crosby, in moving the Clause, had some doubts. Certainly, my hon. Friend the Member
  1238
  for Somerset, North (Sir E. Leather) pointed out that there was not something special about retail shops. He thought that they were being discriminated against. But, of course, there are equally strong arguments which have been advanced over the years, and which, no doubt, will continue to be advanced, on behalf of offices and on behalf of hotels.
  Some of my hon. Friends put down a new Clause which was selected for discussion in Committee, although they just missed the boat and were not here in time to move it, and that new Clause was concerned with the provision of annual allowances for hotels. Hotels were referred to, also, by my hon. Friend the Member for the Isle of Thanet. It would be folly, I think, to close one's eyes to the cost of relief for commercial premises generally. The cost of extending allowances to commercial buildings generally would rise to no less than £172 million a year.
  I should mention that there are a number of practical problems involved in this Clause, although I do not suppose that the House will wish me to go into those at this stage since most hon. Members have concentrated on the question of principle.
  8.30 p.m.
  The main reasons why I cannot advise the House to accept the new Clause are these. First, for the reasons I have given, I do not think that the proposal really merits the priority at this time which it is sought to give it, bearing in mind the cost involved. Secondly, I say frankly that I cannot see how one could in practice, adopting a realistic approach to these things, limit the relief to retail shops and not extend it to most, if not all, commercial premises. I hope, therefore, that my hon. Friends will not press their proposal on this occasion in the knowledge that if they do adopt that attitude, my hon. Friend the Member for the Isle of Thanet will not be unduly surprised.
  Mr. Douglas Jay: I admit that I approach this proposal with some caution. We have gone a fairly long way in recent years in introducing and extending capital allowances. We have had the initial allowance, the investment allowance, a bigger investment allowance, and now free depreciation. Although all these are often justifiably recommended, of course, as stimuli to investment, they

  1239
  are a form of reduction of taxation of profits. I should not be quite so sure as my hon. Friend the Member for Southampton, Itchen (Dr. King) seemed to be that, in the case of the retail trade, for instance, such a reduction of taxation of profits would necessarily be wholly passed on to the consumer. I am, therefore, a little cautious at the outset.
  If hon. Members were to argue that there is no difference in principle between commercial property and industrial property, they would be on very strong ground. It is true that a shop, office or hotel building, although it may not depreciate so rapidly as a factory building, does depreciate in the end. A shop or an office does not last for ever. On those grounds, a very strong argument can be advanced, and I think that the Royal Commission did, in effect, take that view.
  However, although it is perfectly natural that retail trading organisations should put forward the argument embodied in the Clause, we must, if we examine it as a House of Commons, come to the conclusion that it is a quite different proposition that this concession should be given to retail shops and not to offices, hotels, and other forms of commercial property.
  I agree there with the Financial Secretary. Indeed, the very argument about equity advanced by some hon. Members in saying that, if the concession is given to industrial property, it should be given to retail property, could be, as it were, turned against them in this way, that, if it is to be given to retail shops, it should be given to offices and hotels also.
  There is one form of discrimination which we should be prepared to support. I refer to the proposal put forward at an earlier stage of the Bill that capital allowances should be given to all forms of commercial property in development districts but in development districts only. A very strong argument—I shall not elaborate it now—can be advanced that it would be very desirable to give a stimulus to the building of offices and other commercial property in those parts of the country. This proposal, however, gives no preference to development districts but, on the other hand, picks on retail shops as opposed to other forms of commercial property.
  1240
  For the reasons I have briefly given, it is not a proposal which, in this precise form, I can recommend the House to accept.
  Question put and negatived.
  New Clause.—(ABOLITION OF POOL BETTING DUTY ON BETS ON DOG RACECOURSES.)
  The Betting Duties Act, 1963 (which consolidates certain enactments relating to the pool betting duty) shall cease to apply to bets on dog races made by means of a totalisator on a licensed track.—[Mr. A. Lewis.]
  Brought up, and read the First time.
  Mr. Arthur Lewis: I beg to move, That the Clause be read a Second time.
  Mr. Deputy-Speaker: We can take with this new Clause the following new Clause, entitled "Reduction of pool betting duty".
  Mr. Lewis: The new Clauses are similar, but, while I support and appreciate the point contained in the second one, I do not think it is exactly analogous with that in mine.
  I have no vested interest in this subject apart from the fact that I have adjoining my constituency one of the finest greyhound racing tracks in Britain, namely, the West Ham greyhound racing track. However, there are many other fine tracks throughout the country, probably the best known of which is Wembley, where many great sporting events take place. I mention that because in years gone by it has only been through the build-up of the greyhound racing side that money has been drawn in to pay for many of the great sporting events which take place at such places as White City, Wembley, and the rest.
  For the sake of hon. Members who are not quite au fait with the position, perhaps it would be as well if I explained the background to this matter and then explained how it is a classic example of discrimination, which was mentioned during the debate on the previous Clause. It was in 1947, I think, that the late Sir Stafford Cripps introduced a new form of taxation, namely, a 10 per cent. Pool Betting Duty on all bets placed on totalisators at greyhound race tracks. It was said that his objective was twofold. First, there was such

  1241
  a lot of money being placed in bets at greyhound race tracks and the tracks themselves were making such vast fortunes and paying such enormous dividends that he as Chancellor of the Exchequer felt that it was time that he syphoned some of it into the Treasury. Secondly, he was rather worried about the scarcity of consumer goods and about the fact that people were not spending money on goods because the goods were not available.
  That situation has changed drastically. There is now an abundance of consumer goods. The tracks are not making fabulous profits. Indeed, many tracks have had to "pack up" and go into liquidation. In almost every instance the tracks are not paying the big dividends to the shareholders, as was formerly the case.
  I am not personally against the taxation of betting, gambling and gaming. The Chancellor of the Exchequer has to get money to pay for the various social welfare services, such as the National Health Service and National Insurance benefits. If he decided that the taxation of gambling, gaming, betting and the rest was a fair and proper way of getting the money, I would not grumble. Here, however, we have complete and absolute discrimination.
  Unfortunately, through no fault of yours, Mr. Deputy-Speaker, but certainly of mine, the new Clause was not called in Committee. I wish that it had been, because then would have been the most appropriate time for me to explain the situation. As it is, I shall have to speak to some extent in retrospect, because the day in question was the day after Derby Day.
  I noticed in the Press that almost every member of the Government was in attendance at the Derby. I do not in any way attack them for that; I am not trying to scandalise or personalise their private lives. My only regret is that I was not there, although some of my hon. Friends, including my right hon. Friend the Member for South Shields (Mr. Ede) and my hon. Friend the Member for Dudley (Mr. Wigg), were fortunate enough to get there. It was also reported as being the best and biggest Derby of all time for the money that the bookmakers received in bets. Two big bookmakers were reported as drawing in over £50,000 in bets.
  1242
  I thought to myself that that was quite good. I read also that the Chancellor was there and put on his little 2s. bet on the tote. The strange thing is that of all those who took part in that happy event, not one of them paid a halfpenny in taxation.
  On that same evening, however, in various parts of London and the rest of the country, including my own constituency at West Ham, greyhound races and meetings were taking place. The people who attended those greyhound race-tracks in the evening, certainly in my constituency, were mainly working-class people who had finished their day's work at the docks, their factory or elsewhere. They staked their 2s. or 4s. on a totalisator, made by the same people and operated in exactly the same way as the totalisator at Epsom racecourse, but they immediately lost 10 per cent. in tax. Before the race was run, before they had any pleasure, they lost 10 per cent. I regard that as unfair.
  Sometimes, the same people go away from the Derby at Epsom in the afternoon, where they are not taxed, and go to the greyhound races in the evening, when they are taxed. That is not only completely unfair, but is unjust. It is rather as if a man buys a packet of Wills's Woodbines cigarettes, on which he pays 10 per cent. tax, but if he buys Gold Flake cigarettes, made by the same company, he pays no tax. A better example is the man who smokes cigarettes and pays 10 per cent. tax as against the man who smokes cigars and pays no tax.
  I did not have the opportunity on Budget day of congratulating the Chancellor on his Budget, but we all know what a wonderful performance it was. He refreshed himself, I believe, with a glass of water in which there was some whisky. Good luck to him. It would have been unfair had there been a stiff 10 per cent. tax on one brand of whisky but no tax on another brand. That is what is now happening. Not a halfpenny in taxation is imposed on any bets placed at horse racing courses, but there is a 10 per cent. tax on every bet placed at the same totalisator at greyhound racing tracks.
  8.45 p.m.
  Since the Government came into office, they have, rightly or wrongly, introduced

  1243
  various forms of legislation which have made betting easier. We now have bingo, gaming parties and betting shops. If a man is going to place 2s., 4s., 10s., £1 or even £100 as a wager on a certain greyhound, and he knows that across the road at the betting shop he can put the money on without losing anything in tax, he certainly will not go to the greyhound race track where before he puts the money on he will have lost his 10 per cent., his admission money and his programme money. What happens? The man stays away from the track and puts the money on at the betting shop. We have seen a consistent fall in the attendances at greyhound race tracks, and a number of them have now closed down.
  I have made a hardy annual of this subject for very many years. Originally I had no support. I am glad to say that now, fortunately, a number of hon. Members on both sides of the House support me, and on one occasion I had the support of 100 signatures and a vote of about 84 in favour of an Amendment on a previous Finance Bill. I have plugged away at this subject not because I have any financial interest in it but because the present provision is discriminatory. Even hon. Members who are against the principle of betting say, "We do not support betting and do not like gambling and gaming, but if there is to be this principle, all should be treated alike."
  Whoever was the Minister who replied last year said that the matter should be left to the Government and they would have a complete review of the whole question of betting and gaming. Chancellors of the Exchequer and other Treasury Ministers of both parties have admitted that the tax is discriminatory and unfair and should be dealt with. Last year we did not vote on the matter because we were told that an investigation was going on and there would be a review. When the Budget was introduced, we expected something in it to deal with this matter, but there was not. It has again been put off to next year. As the Treasury has admitted that the tax is unfair and discriminatory, the Chancellor ought to drop the tax pending the review, whatever may be decided, or,
  1244
  if he cannot do that, he ought to see that all are treated alike.
  The next new Clause, in the name of the hon. Member for Southend, East (Sir S. McAdden), on which I will not trespass, seeks to reduce from 33 per cent. to 25 per cent. the football Pool Betting Duty. There is a difference in that case, for that is not betting or gambling on the course such as I have been speaking about. The point I want to make to the Treasury is that it ought to be within its possibility, if not completely to abolish the duty, to put the two sports I have dealt with on the same basis in regard to deductions.
  In greyhound racing the track promoters are allowed 6 per cent.—and this goes back to about 1930—for administrative costs and charges. In horse racing the allowance is 10 per cent. With the 10 per cent. tax deduction and the 6 per cent. allowed for administrative costs, there is a 16 per cent. reduction for greyhound racing as against the 10 per cent. as an administrative charge for horse racing. I suggest that if the Treasury cannot agree to the abolition of the deduction, there should be a 10 per cent. all-in administration cost or a 4 per cent. tax deduction plus 6 per cent. administrative charge for both until such time as the Chancellor brings forward his proposals for review. Briefly, that is the position and I think that there is a case with which the Treasury could deal.
  Sir Stephen McAdden: I intervene briefly, as is my custom, because I feel that if a Member cannot make his point fairly briefly it is not much good trying to make it at all in this House.
  The hon. Member for West Ham, North (Mr. A. Lewis) has a case for his Clause. The case for a reduction of the football Pool Betting Duty is a great deal stronger. The hon. Gentleman has been talking of an industry subjected to a 10 per cent. Pool Betting Duty which was 11 per cent. as a result of the 10 per cent. surcharge, and in the last Budget it was reduced to 10 per cent. In the case of the Clause that I am mentioning, the football pool betting tax was increased from 30 per cent. to 33 per cent. and stands at that figure today.
  I want to make this point on behalf of the Chancellor, among others. I am

  1245
  anxious to protect the Chancellor. He is losing a lot of revenue. As a result of this increased tax to 33 per cent., he knows quite well that the revenue he is receiving is declining, because people know that a great deal of the money they invest in betting on football is taken from them in the form of tax. As a result people are drifting away to other forms of gambling, of which there are many in this country.
  We have heard a lot in recent times about gaming clubs, "chemmy" parties and the like. Crockfords is a child in the art of gaming compared with the Chancellor. But the Chancellor has a much bigger stake in gambling than anyone else. His 33 per cent. income from football pool tax represents a far larger income to him than that of those who are concerned in the organisation of gambling, whether Crockfords or anyone else. If he is concerned in saving this particular form of gambling from which be derives such an important revenue, he must not tax it out of existence, as he seems to be doing.
  The other person who ought to be protected besides the Chancellor is the punter. As one who does a little bit of punting myself, not with considerable success, I am getting a little "fed-up" swith the situation in which so much of the Is. I invest in a football pool is taken away in taxation. The football pools are admitted on both sides of the House to be one of the most innocent forms of gambling. We do not hear of homes being disrupted and men leaving their wives as a result of a flutter on a football pool. Yet, in this comparatively innocent form of gambling, out of every Is. a punter invests the Chancellor immediately takes 4d.
  In addition, I hope that my right hon. Friend will seriously consider the trouble that he is causing the Postmaster-General, who is losing a tremendous amount of revenue as a result of the decline in football pool betting. Not only does the punter invest his money; he must also buy a postal order, so that the Post Office reaps the benefit both of poundage and postage. Football pool betting has thus proved a great source of revenue to the Post Office as well as to the Chancellor.
  In these circumstances, I would have been happier if my right hon. Friend had seen fit at this stage not to raise
  1246
  the level of taxation to this grossly high figure of 33 per cent. I would have thought that some reduction was justified. If it is justified in the case quoted by the hon. Member for West Ham, North, it is even more justified in this case.
  I know that it has been argued that the Chancellor is engaged upon a review of all forms of gambling, and that in due time he will pay some attention to this matter. But we were told that twelve months ago. We were assured that the Chancellor had his eye on this and would see that some fairer system would be introduced. There is an old saying:
  "Live the horse and you will get grass;
  While the grass grows the horse dies."
  That is true of football pool betting.
  We are told that if we go on a little longer perhaps a more equitable system will be introduced. But, meanwhile, the decline in football pool betting will result in a considerable loss of revenue. I urge my right hon. Friend to recognise that he is subjecting the football pools to a most savage and penal rate of taxation, quite unjustifiable in equity.
  It is quite unfair that this form of gambling should be subjected to this extremely heavy taxation while other forms, with the exception of greyhound racing, go scot free. It is unfair to the Chancellor, to the Postmaster-General and, worst of all, to the poor punter.
  Mr. Rees-Davies: A sterling effort is always made on their behalf, but whether it be whisky, cigarettes, or football pool duty that is concerned, our hearts are fairly hardened—at least, mine is. My attitude is that it is the job of any Chancellor to get what he can from all three. These are the standard things in which a Chancellor has a very great interest.
  If it were not for our vices, we could not run this country at the standard we expect. What a terrible day it would be for the country if people gave up smoking, drinking whisky and betting on the pools. All the people who live a good life would have to pay the taxes which are at present paid by those who enjoy these practices.
  But I want to turn to the practical element here. I do not support my hon. Friend the Member for Southend, East Sir S. McAdden) in asking for a reduction in the football pool betting tax.

  1247
  But I do support the case of the greyhound industry for a reduction, and I had the opportunity of a long discussion with my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) on this subject when he was Chancellor of the Exchequer. I sought to establish to the Treasury, and I think with a certain modicum of success, that to reduce the dog tax from 10 per cent. to 5 per cent. would result in recovering the whole of the lost tax within two to three years. I think that that argument appealed to the Treasury and it is the argument to which I now propose to apply my mind.
  9.0 p.m.
  Any betting man knows what is the maximum which can be regularly taken from him while still enabling him to go on betting. Dog race attendances are not as regular and as steady as they ought to be because the punter soon realises that they are not worth his while. He cannot have taken from him 16 per cent. of his total investment on every race and then expect to win, unless his information is remarkable, or unless he is well in with the trainers, and even then he would probably lose.
  The maximum he can take out of the till in betting is 10 to 11 per cent. all in. This is as applicable to horse racing as it is to dog racing. With greyhound racing 6 per cent, is taken away for operating costs and in respect of the totalisator and the reasonable profit upon that—and this operates at every track as a matter of the Act of Parliament which so provides—and then there is the 10 per cent. Stafford Cripps tax, making 15 per cent. Last year and the year before that produced a revenue of about £6 million, which is not very much.
  If the tax were reduced from 10 per cent. to 5 per cent. and there were the same turnover, at first sight that would appear to constitute a loss to the Revenue of £3 million. However, if my hon. Friend looks at the figures for dog racing attendances between 1945 and 1950 he will see that they were nearly twice what they now are and that the revenue then being achieved was potentially higher. As, today, there is a higher expenditure on the amount invested per bet than there was in those days,
  1248
  I am personally satisfied that certainly within two years at least part if not the whole of that £3 million would be recovered. I do not ask for this provision today. I want to see it carried into effect next year, when the rest of this matter is cleared up. I agree that hon. Members have raised this matter year after year. I have always stuck to my view that there should be some taxation of betting, and I still maintain it. There should be some on the Tote.
  Now let me turn to another matter which has a direct bearing on this issue and which should be considered at the same time. I am not dealing with the legal side, but the dog tote has as yet another disadvantage which has not been mentioned. The dog tote, by tradition if not by law, applies only on the track, whereas with horse racing there are tote investors off the track. Today, the tote investor can open the betting shops and can draw money off the track as well as on. It is important that that should also apply to the dogs, because this is one of the pleasant vices which we enjoy and from which the Government derive revenue.
  It is, therefore, right that my hon. Friend the Economic Secretary should now turn his great mind to these matters from having dealt with mere unit trusts and things of that kind and should apply his commercial judgment to them, it is only on the test of commercial judgment that I put forward a case about betting and gaming right through the field.
  There are twin problems here—how to widen the scope to enable people to bet easily upon the totalisator, and how to ensure that the Government take the right proportion—neither too much to discourage people from going dog racing, nor too little to get their proper return. I think that 5 per cent. is about right. That does not mean that it is about right for horse racing, because they have a disadvantage which does not apply to greyhounds. Out of their tote, which is a 10 per cent. take, they have to make provision for veterinary services, for research to assist breeding, and other matters like that, and, therefore, the money does not go as direct profit.
  If we were to add 5 per cent. tax on to that 10 per cent. it would mean taking 15 per cent. on horses, which would be

  1249
  far too much. Some other method has, therefore, to be found to get the equivalent of about 10 to 11 per cent.—which is the maximum the punter will continue to pay without realising that he is inevitably losing far too much—if we want to get what can reasonably be taken from those people who supply the money. This is not the same as with whisky, where people buy one bottle and no more. Betting is a recurring thing. It is dealt with on a daily basis. As I once tried to point out to my hon. Friend the Member for Kidderminster (Sir G. Nabarro), one cannot just go sailing on in this difficult field.
  I fully endorse what my hon. Friend the Member for Southend, East so wisely said. He has great knowledge of this matter. The man who ought really to be having a go at the Chancellor of the Exchequer is the Postmaster-General. It is bad luck on the Postmaster-General that, having laid on the necessary postal services to deal with the pools, he receives a decreasing revenue from the post which comes in every week and a fall in the turnover figures which he would expect to get from those who engage in betting on the pools. This is the real cream, and he should feel satisfied at being able to provide these extra facilities which we expect from the Post Office.
  People are beginning to wake up to the idea that they ought not to continue betting on the pools. I like gambling, but I have never had a bet on the pools, because when I heard that 25 per cent. was being taken I told myself that I could not win and, therefore, there was no point in betting on them. This has got into the public and it has to come down to about the 25 per cent. mark. I agree with the difficulty of dealing with this, and I appreciate that it is too late to deal with it this year, although I hope that the regulatory effect will come off it. I hope that this will be borne in mind, just as I hope that the whole question of the regulator may come up for consideration before this year is out.
  Bearing that in mind, I would counsel the Government in all these matters to be hard and practical businessmen and to be what hon. Gentlemen opposite often criticise us for being, that is, businesslike, and make solely commercial judgments of what they can reasonably extort from the public for these pleasures which, let us
  1250
  be honest, we all know provide the basis of the social services in this country.
  Mr. du Cann: My hon. Friend the Member for Southend, East (Sir S. McAdden) enunciated what seemed an admirable principle when he said that speeches in the House should be both clear and short. I shall endeavour to follow his excellent example.
  First, I wish to quarrel with the hon. Member for West Ham, North (Mr. A. Lewis), who said—I am not sure if he meant it—that all the great events, without exception, take place at Wembley. I think that many who are familiar with events at Murrayfield, Hurst Park and Lords, if I may mention that place today, would most strongly disagree.
  Mr. Lewis: I said the best events.
  Mr. du Cann: The hon. Member now corrects his statement and says that the best events take place at Wembley. But I think that there are many places where excellent events take place. He also said that most of the Government were at the Derby. I am sorry to disappoint him, but I was not there.
  We are discussing two new Clauses. One—Abolition of pool betting duty on bets on dog racecourses—is in the name of the hon. Member for West Ham, North, who has taken a consistent interest in this matter. He is quite right to make the point for he has been a great champion of the dog tracks over a long period. The other new Clause—Reduction of pool betting duty—is in the name of my hon. Friend the Member for Southend, East, who also has been consistent in his attitude to these matters over a long period. I should also say how grateful we are to both hon. Members and to my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) for having brought these subjects again to the notice of the House.
  There certainly is, without any doubt, as the hon. Member for West Ham, North acknowledged, a growing feeling that betting should be taxed. I remind the House that my right hon. Friend the Chancellor said in his Budget statement:
  "gambling is a form of expenditure which should contribute towards the rising cost of social and other Government expenditure."—[OFFICIAL REPORT, 3rd April, 1963; Vol. 587, c. 465.]

  1251
  The hon. Member used those words himself and my hon. Friend the Member for Isle of Thanet made the point in even more graphic terms.
  The hon. Member for West Ham, North was entirely right to remind the House of the debates which took place last year. They were answered, as he reminded us, by my hon. Friend the Financial Secretary, who undertook, on behalf of the Government, that a review of the whole subject of betting would take place. In those circumstances, the hon. Member said, some of the arguments put in Committee were not then pressed to a Division. The comprehensive review has been proceeding and a very great deal of work has taken place. I think that the hon. Member will remember, in particular, the debates that we have had on this Finance Bill with particular reference to Clause 2, in which I was very much involved and in which my hon. Friend the Member for Isle of Thanet also took part.
  In Clause 2 of the Bill now before the House, we are seeking additional powers to obtain information. To date the House has been good enough to agree in general that we should have those powers. The point, put very shortly, is this. We have had earlier experience of taxing betting, in 1926 to be precise. That experience was unhappy. We are, therefore, entirely determined on two things.
  The first is that, although there may be legacies of the past as the hon. Member explained and to which my hon. Friend the Member for Southend, East referred, we are not prepared this year to take any kind of piecemeal action whatever. Nor are we prepared to take any sort of action which is in any sense precipitate.
  I am perfectly certain that the House would complain—and complain justly and rightly and with very good reason—if we had introduced a tax in order to satisfy this growing feeling to which hon. Members have given expression and yet had to do it without having full information before us, to such an extent that the tax might not be as effective as it may well be if we decide to introduce new, varied and different taxes in due time. I am in no doubt about this whatsoever.
  1252
  I agree with my hon. Friend the Member for Isle of Thanet, who said that the time for action in these fields is next year rather than this year. Perhaps I should mention the figures involved. If we were to accept these two new Clauses the cost in respect of that dealing with abolition of tax on dog racing betting would be £5¾ million and the cost in respect of that dealing with a reduction of pool betting duty would be £7 million. If, while I am on the subject, I may be permitted to deal with certain other points, I should say that we are not entirely clear that reductions in taxation are necessarily the most pressing need. The hon. Member for West Ham, North spoke of discrimination. I shall not comment in detail on that, other than to say that the point he made and the point made by my hon. Friend the Member for Southend, East has certainly been noted.
  On the other hand, there is a body of opinion which feels that perhaps the need is to level up rather than to level down. Be that as it may, the hon. Member for Southend, East introduced a most ingenious argument when he suggested that the law of diminishing returns was applying because of—I quote him—the high rate of tax on pool betting and that the Chancellor might do better in the long run—a point which was emphasised by my hon. Friend the Member for Isle of Thanet—if the tax were reduced, as he would make up the revenue eventually.
  9.15 p.m.
  That point is certainly noted. I do not dissent from the view expressed by my hon. Friend the Member for Thanet when he said that it may be impossible to rule out all discrimination and that it may be appropriate to have discrimination in taxation on one form of betting by comparison with another. It is too early to be definite about that.
  I suggest that it would be wrong to adopt a selective approach to what is acknowledged to be an extremely difficult and complicated matter. The points so clearly made by the three hon. Members who have spoken will be recorded and noted by us. We shall bear them in mind. I cannot comment, in particular or in general, on what form taxation may take in the future until my right

  1253
  hon. Friend has completed his comprehensive review. I am sure that it is right to have that review and to pursue it actively, as I assure we the Committee are doing.
  In these circumstances, I must advise the House to reject the new Clauses. I hope that in the light of what I have said, the hon. Members concerned will not press them.
  Question put and negatived.
  New Clause.—(INFORMATION AS TO EXPENDITURE FOR POLITICAL PURPOSES.)

  (1) The following provisions of this section shall have effect to provide information for determining whether, and in what manner and to what extent, it is expedient to amend the law so as to disregard for purposes of taxation expenditure incurred for political purposes or to disallow such expenditure in the computation of profits or gains.

  (2) Any person not exempted from the operation of this subsection who in the year ending with July 1963 incurred expenditure for political purposes shall before the end of August 1963 notify that fact to the Commissioners of Inland Revenue in this section called "the Commissioners".

  (3) Any person not exempted from the operation of this subsection who in the year ending with July 1964 incurs expenditure for political purposes shall unless he has previously given a notification under this or the foregoing subsection notify the Commissioners, within one month after the date on which he incurs the expenditure, of the fact that he has incurred it.

  (4) Any person required to give a notification under the foregoing provisions of this section shall within such time and in such form as the Commissioners may require furnish the Commissioners with such information as to the amount and date of the expenditure concerned, the description and character of the political purposes, the person or persons receiving any money or other benefit from the expenditure, and other matters as the Commissioners may by notice require.

  (5) There shall be exempted from the operation of subsection (2) or, as the case may be, of subsection (3) of this section any person who, being an individual, incurs expenditure for political purposes not exceeding the sum of one hundred pounds during the year mentioned in the relevant subsection and who, if required by the Commissioners to furnish them with a declaration to that effect, does so furnish them.

  (6) The Commissioners, if satisfied in any case that there is good reason why anything required to be done by or under the foregoing provisions of this section cannot be, or was not, done within the time limited by or under
  1254
  these provisions, shall extend the time by such period as appears to them to be required.

  (7) Any person who fails to give the notification required by subsection (2) or (3) of this section, or to comply with any other requirement of the foregoing provisions of this section, shall be liable to a penalty of one hundred pounds, and if after conviction of a failure to furnish any particulars or information, the failure continues he shall be liable to a further penalty of ten pounds for each day on which it so continues.

  (8) In this section "expenditure incurred for political purposes" means expenditure incurred, whether for a consideration or otherwise, for the purpose of promoting or opposing changes of the law, including expenditure incurred in support of or in opposition to a political party or candidates for a parliamentary election, but not including any expenditure required to be returned under section 69 (return as to election expenses) of the Representation of the People Act 1949—[Mr. Callaghan.]

  Brought up, and read the First time.
  Mr. Callaghan: I beg to move, That the Clause be read a Second time.
  The Clause has the intention of securing information about the expenditure for political purposes by corporate bodies and by individuals so that a little daylight may be let into the murky background of Conservative Party finances. The Conservative Party alone among the political parties has consistently refused to publish any accounts. No one knows the sources of its finances No one knows where it gets its money. Now and again we get a small indication when there is a row and somebody resigns from some so-called industrial council protesting at the way in which money is being spent on Conservative propaganda, but, broadly, no one has ever been able to persuade the Conservative Party to tell us what are the sources of its finances. When in power the Conservative Party has always insisted that trade unions and other such bodies should indicate very clearly how they raise their money and how they spend it.
  I am not surprised that there is a great deal of wariness on the part of the Conservatives to reveal the source of their own finances, but we thought that if we could not persuade the Conservative Party to tell us the source of their finances, there might be something to be said for starting at the other end and seeing what the sources of the finances are, so that if we cannot get combined

  1255
  accounts, the nation may at least be able to see what is going into the coffers, even thought we do not see what comes out.
  We have been assisted in our proposal by the Chancellor because, rather unusually in a Finance Bill, he introduced a Clause, Clause 2, in order to provide himself with information about gaming, and he is laying a requirement upon those concerned with gaming to supply information to the Commissioners showing the extent of gaming, where it is done and in what way it is done, so that at the end of the day, when he has acquired all the information which is appropriate, he can decide whether there is a case for taxation. We thought that this would be a very appropriate thing to do in connection with political expenditure, especially by public companies, and we are grateful to the Chancellor for giving us an opportunity to put down a Clause which, I should like to advise the House, is based almost wholly upon his new Clause.
  We think that, if it is a good thing to get information about the extent of gaming, there is much to be said for getting similar information about the amount of expenditure on political purposes by bodies outside the House. We should like to prise out of the Conservative Party, if we can, or at any rate out of its backers, what it is they are trying to do. There is something unhealthy and furtive about secret contributions to political parties in exchange for favours which may or may not be given.
  Let us have a look at some of the sources of Tory cash. The best known is Aims of Industry. Quite apart from that body, there is another which has been unearthed by the Observer called "British Industrialists Association Limited". This is a very remarkable body. It numbers among its most powerful backers television—the chairman of Associated Television Ltd., Sir Robert Renwick, is a leading shareholder in British Industrialists Association Limited—cement manufacture, the steel industry, the domestic appliance business, machine tools and private banking.
  What contributions do these people make to the Conservative Party, and in exchange for what favours? It is something which the public would be well
  1256
  advised to ask and to know the answers to. We have had a very interesting development over the last few years in television. Every one of us in the House has seen the pressure that has been exerted upon the Tory Party by the television interests. Every one of us has seen the lobbies which have been devised by the television interests for the express purpose either of getting favours for themselves or of changing the Government's mind in order that they should pay less tax and less revenue to the Government. Are these people the paymasters of the Government? They have been successful to the extent that they have got set up a second channel. Millions of pounds have gone into the coffers of the television interests, and everybody knows it. Whatever investment they have made in the Tory Party has been well repaid, even though some of them are now getting so greedy that they are not ready to accept what they get.
  The chairman of British Industrialists Association Limited is Sir Robert Renwick, who is the chairman of Associated Television Ltd. British Industrialists Association collected a lot of money before the last General Election. Ninety per cent. of that money, or 90 per cent. of the money which was collected by its predecessor, with the same address but a slightly different name, went to the Tory Party. I had better be strictly accurate about this. It was not then called British Industrialists Association Limited. It was called "United Industrialists Association", but it was the same body; it had the same address and the same telephone number; only the notepaper changed. Ninety per cent. of all the money it collected was handed over to the Tory Party. I think it ought to be acknowledged, however, that it gave 5 per cent. of it to the National Liberal Party and the other 5 per cent. went to Aims of Industry, that well-known non-political body which is concerned only with preaching economic truth.
  It would be in the interests of public life in this country if it were known what money is going into the coffers of British Industrialists Association Limited and whether it is indeed passing it on to the Conservative Party. We know that great efforts are being made now to col-

  1257
  lect money from industrialists. Some of my hon. Friends have seen some evidence of it in their constituencies, and they may tell us about it later. We know what efforts are being made to repair the ravages caused by Government policy. We do not know how far they will succeed. We know that the Government are willing to make use of any secret source of finance in order to achieve their objectives and it is about time they came clean on this score.
  We are not saying in the Clause that these contributions should be forbidden but merely that they should be known. We say that people are entitled to know what British industry is doing in this sphere, just as the trade unions are required to make their information known. Let us consider what the trade unions are required to do. Section 3 of the Trade Union Act, 1913, states:
  "The funds of a trade union shall not be applied, either directly or in conjunction with any other trade union…in the furtherance of the political objects to which this section applies…".
  This shows that trade unions must not use their funds in this way. But the profits of a company may be used in this way. If one is a trade union officer and wishes to indulge in the support of a political party or political candidate one must first of all ballot one's members. No one ever takes a ballot of the shareholders of a public company to inquire whether or not they wish to do this. Having taken a ballot of one's members in a trade union and having secured a majority, one must then set up a separate fund. I have not yet heard of one of the large companies setting up a separate political fund, having ballotted and secured the assent of their shareholders.
  The trade union fund for this purpose must be kept separate. I have never heard of that happening in a public company. Further—and the Conservative Party has made a great deal of this—if any member of a trade union wishes to contract out of payment to such a fund he may fill in a form entitling him to do so. Is any shareholder entitled to fill in a form to contract out of his share of the responsibility for the contributions that are made by his company? Having done that, the trade union must then account in detail to the Registrar General
  1258
  of Friendly Societies for every halfpenny it pays out. There is no requirement on a public company to do anything remotely like this.
  Public companies, on the other hand, specifically deny their shareholders this sort of information when they are asked for it. They all use a formula, which is, "We do not disclose the details of individual transactions. We do not think that it would be right to give to one shareholder what we do not give to others". There may be something in that. We wish to remove that disability by making this information available to us all.
  I have with me, supplied by my trade union, the form which one must fill in and which contains the information which must be given to the Registrar General of Friendly Societies when a trade union decides to set up a political fund. All the information is then public and any hon. Member opposite can obtain a copy of the information by merely going to the office of the Registrar General of Friendly Societies. He will then be supplied with the details of every halfpenny expended by the union for political purposes.
  The form seeks information about organisational grants to Parliamentary candidates, local affiliations, by-election insurance funds, fees to delegates at conferences, Festival of Labour expenditure, summer school fees and expenses, British-Asian Socialist Fellowship, conference expenses, grants, bonuses, printing, stationery, Income Tax, meetings, speakers, the National Council of Labour College summer school, and bank charges. Every item is there and every item is open to scrutiny by the Registrar General of Friendly Societies. When will we get the same degree of honesty from some companies?
  If hon. Members opposite want to fight a political battle fairly, what are they prepared to do to see that the requirements made of public companies which indulge in political activities are at least as stringent as those imposed on trade unions? What is the difference? If a trade union is required to disclose all this information, why should the same criteria not apply to public companies which subscribe either directly or through the funds of another activity to the funds of the Conservative Party?

  1259
  They do not do it directly; they are too discreet for that. They set up middlemen—and Sir Robert Renwick, chairman of Associated Television, is the principal of the middlemen—who then tout around these companies securing contributions that are eventually to be passed on to the Conservative Party. A great many industrialists would prefer not to contribute, but feel that they must do so. There is a sort of protection racket going on at the present time—the Tory protection racket. Industrialists feel that they must contribute even though they dislike the policies of the Tory Party almost more than we do. Everyone knows what happens.
  9.30 p.m.
  The foolish, or incredible, argument sometimes used on the opposite side is that if this information were known these companies might be intimidated. They are intimidated now. They are intimidated into supporting Tory Party funds whether they want to or not, because it is known to their fellow industrialists whether or not they do contribute. Let no one tell me that if this information were made public, and we all knew where public companies stood on this issue, a Labour Government might intimidate them; that we might frighten them, and abuse our position.
  Can the House imagine the scene when the Labour Government decided to take some action against Associated Television, and Sir Robert Renwick, trembling in his board room, saying, "I live in daily fear of what the Labour Government will do to me"? I know what would happen. The news bulletins of Associated Television and all the rest, and all their programmes, would be full of disguised propaganda about what was going on.
  These people control the source of communications. They are not intimidated. The real trouble is that so many people do not realise how the source of communications is controlled. It is foolish to assume, or to say, that these bodies would live in fear of what a Labour Government might do to them.
  What is their purpose? The purpose of British Industrialists is
  "…to originate and promote improvements in the law and to support or oppose alterations therein, and for the purpose aforesaid to petition Parliament."
  1260
  Cannot hon. Members imagine them coming to the Bar of the House? But why should they come to the Bar of the House when they have the ear of Ministers in the Cabinet room?
  The purpose is also to
  "…take any other legal steps and proceedings which may be deemed expedient."
  If that is its object and what it is set up to do—to alter the law and to promote improvements in the law—for whom is it to be done?
  If that is the purpose, let us have it above board, let us know what is going on, and let us see what are the sources of finance. We can then detect where the pressures are coming from, because if one thing is clear about the Government it is that they continually succumb to pressure, and to pressure from sources that are hidden. Time after time we have seen the way in which the Government have curbed public policy to suit their own supporters. I suppose that all Governments are the victims of pressure groups, but at least let those pressure groups be in the open.
  The lobbyists in the United States have to register as such. Very stringent precautions are laid down to ensure that, even though lobbying goes on, the public may know who the lobbyists are. In this country they act in a subterranean manner. They knock on the back doors of Ministers' rooms—perhaps they do not even have to go there. They may summon the Ministers to come to them, for all I know—that would not be unheard of. We are living in an unhealthy situation, in which a great deal of private pressure is being applied to the policies of the Government and the people do not know the source of that pressure. We should let in a little fresh air.
  The purpose of the Clause is to provide, first, that the Commissioners shall have the power to require those who make such contributions to declare them. It will then be possible for the Chancellor of the Exchequer—and, if he publishes the results, for the House and the country—to see just how much money is involved, and to decide what action, if any, should be taken. We know, and it has never been challenged, what action was taken before the last General Election. We know that in the 12 months leading to September, 1959, £1½ million was spent by these companies. More money was spent by

  1261
  these groups of companies before the last election than was spent by every candidate of all parties during the election. During the course of the election itself all candidates, successful and unsuccessful, spent only £1 million. These are the hidden persuaders and it is right that they should be dragged out in the open.
  I do not know what the Chief Secretary to the Treasury will answer to this, but let him be quite clear about the case which I am making. I am not making the case that these companies and individuals should be denied the right of making contributions. I am making the case that if they do subscribe in this way they should be known.
  The General and Municipal Workers' Union, the Transport and General Workers' Union, the Amalgamated Engineering Union and the National Union of Mineworkers and any other body affiliated to the Labour Party makes a contribution to the party, but the amount is known. Hon. Members may argue that there are local contributions which cannot be known. A great deal of contributions are made at local level and this would be equally true of the Conservative Party, but at least we know the national position. We do not know the national position of the Conservative Party and I do not believe that the party wants us to know.
  Mr. Martin Maddan rose—
  Mr. Charles Loughlin: Will my hon. Friend give way?
  Mr. Callaghan: I will give way to my hon. Friend and then, in fairness, I must give way to the hon. Member for Hitchin (Mr. Maddan).
  Mr. Loughlin: I only wanted to try to correct what may be a wrong impression in connection with local trade union donations. Each branch of a national trade union has to provide a yearly balance sheet stating quite clearly what has happened to its money. This is required by law.
  Mr. Callaghan: I am grateful to my hon. Friend. I did not mean that it was not known at local level. We all know about the balance sheets. I meant that they are not aggregated at the centre, but I am glad that my hon. Friend has
  1262
  put it on record that they are known locally.
  Mr. Maddan: The hon. Member has based all his case on the fact that the people whom he alleges subscribe to the Conservative Party influence the party improperly. He particularly quoted Sir Robert Renwick, chairman of Associated Television, and he gave the example of the failure of the Government to agree to a second I.T.A. channel. Does the hon. Gentleman not know that among the "big four" Associated Television alone had been wanting that channel, and is not all his argument just a load of nonsense?
  Mr. Callaghan: Not at all. All it shows is that they are getting a little too greedy and even the stomachs of Cabinet Ministers in the Conservative Party can become queasy after a time. They have had a great dollop of cream out of this country in the last few years.
  When this matter was last discussed in the House we had a reply from the then Home Secretary who is now First Secretary. We were then making the point, which I am afraid is hopeless and we can never expect to get the Government to agree to it, that the Conservative Party should publish its accounts. We have given that up. We know perfectly well that it would never dream of doing anything of the sort and therefore we are moving to the next point.
  My right hon. Friend the Member for Smethwick (Mr. Gordon Walker) specifically raised then the contrast which I have raised with the trade unions, though perhaps he did not go into it with a great wealth of detail. The Home Secretary replied, and I think that hon. Members will detect the typical individual note of the form of that reply. He said:
  "I have been asked why there cannot be a similar regard for what companies do in relation to their shareholders. I refer the House with all sincerity to the investigation into company law being undertaken at present by Lord Justice Jenkins. We must await the conclusion of his Report, because this is part of the general remit to the Committee… It is covered. That is, in part, the answer to some of the apprehensions expressed today."—[Official Report, 21st July, 1960; Vol. 627, c. 797.]
  In a typical way, he rode off it.
  I have here the Report of the Jenkins Committee. I wonder whether the Chief

  1263
  Secretary can refer me to any paragraph in it which deals with this problem. I cannot find one. I have looked very carefully through it, but I can find nothing. I fear that the apprehensions which the then Home Secretary observed still remain with us, so the Chief Secretary will have to find a better answer than a non-existent paragraph in the Jenkins Report if he is to satisfy us.
  The only passage in the Report which touches slightly on this matter, though not directly, is on page 43, where the Jenkins Committee, having examined a number of complaints from shareholders, makes recommendations to increase the flow of information passing from directors of companies to their shareholders, suggesting a number of means to enable shareholders to know a little more about what is being done in their name.
  I am very happy to help the Jenkins Committee and to help shareholders. Here is a way by which shareholders could find out or could be told what was being done in their name, without their consent, perhaps against their will, in furtherance and aid of a party to which they may themselves be opposed.
  How does the Chief Secretary propose to deal with this situation which bears so unfairly upon the trade unions as compared with public companies in this country? If he would like to remove, as the Conservative Party has endeavoured to do over so many years, the impression that it rests on big business, and is supported by bigbusiness, he can make a start by providing for the revealing of the sources of its finance. If big business chooses to tell us what its funds are used for when it is financing political objectives, we shall begin to know for certain to just what extent the Conservative Government rest upon big business, draw their support from big business and are, in fact, beholden to big business for so much of what they do.
  Mr. J. Grimond: I approach this matter with a certain amount of impartial partiality. I see about me millionaires on every side, and I feel wonder, tinged a little with envy. I was impressed by the exposition of the hon. Member for Cardiff, South-East (Mr. Callaghan) on the dis-
  1264
  closure made by the trade unions, and I accept it. I say, in passing, that, if it wanted to come with absolutely clean hands in this matter, the Labour Party might, perhaps, consider contracting in instead of contracting out. But I do not wish to press that now.
  I shall pursue the matter from a slightly different standpoint, a standpoint touched on by the hon. Gentleman but not forming part of his main theme. I say this in ail seriousness. I cannot see how one can maintain that shareholders in a company should not be informed of the contribution which the company makes for political purposes. In every company there are many shareholders who are not members of the Conservative Party. They may not want their money to be used for politics at all. They may be Liberals, Socialists, or Scottish Nationalists. How one can possibly justify the contention that these people should not be informed of the contributions made by the companies of which they are shareholders, I cannot understand.
  The Clause deals exclusively with expenditure for political purposes, and I think that there is a striking difference between the obligations laid upon trade unions and those laid upon limited companies. Personally, I would carry it further. There are many purposes, of which I wholly approve, for which companies give money, such as research and the arts, but I still say that they should make it perfectly clear in their balance sheets that they are making these donations. I should have thought that this was the elementary right of the shareholders. I am sometimes slightly surprised that they can reconcile the purposes laid down in their memorandum and articles with the donations which they undertake.
  9.45 p.m.
  I believe that this is a serious matter and that it has become much more serious because, forty or fifty years ago, political parties and many other activities in this country could be supported by voluntary contributions made out of people's personal funds and their income. That is becoming more and more difficult. Limited companies are taking on a lot of the work which used to be done by individuals. They support the

  1265
  Conservative Party directly or through the Aims of Industry and other bodies which have been mentioned, and they support many other things as well. In these circumstances, it is only right that they should show to their shareholders how they are using the funds and profits of the company.
  Whether we approve of the purpose or not, if public companies are to play an active and, in some ways, dominant part in the life of this country we should know what they are doing, and I am very sympathetic to the point made by the hon. Member.that in politics, in particular, it is very important to know where the real source of power and finance lie. As I have said, although I have some envy of the Labour Party, we know from where its finances come and can draw our own conclusions as to whether or not it is influenced by the trade unions. Sometimes I think it is.
  I beg the House not to treat this entirely as merely a party point. The part which public companies—and I admit to being a shareholder myself—play in the life of the country and the question of where power, influence and finance lie are important. I do not want to get out of order, but it is becoming more and more important as the electoral law becomes largely a dead letter in this respect, because funds can be used long before an election campaign starts and immense pressure can be brought to bear on the opinion of the country long before we are aware of being in an election campaign at all.
  I therefore ask the Government to consider this, matter seriously from the political level as it is put in this new Clause and also on the broader level of the responsibility of public companies in this country and of how we want our politics to be conducted.
  Mr. Dick Taverne: Since the Tate and Lyle case, the floodgates in this matter have been opened wide. In 1951, the expenditure by companies for political propaganda purposes was considerable, but by 1959 it had risen to a very large sum indeed, as my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) pointed out. It rose to £1½ million, which was revealed by Butler and Rose, in their book on the last General Election, to be four times the amount spent on advertising by the Conservative Party.
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  A number of points arise here. Some of them have been made already. I would very much endorse the point made by the right hon. Member for Orkney and Shetland (Mr. Grimond) that this constitutes a danger to democracy. The rôle of propaganda can, of course, be overemphasised. It is not all important, but it is very important, and we recognise this fact in our electoral law, which limits the expenditure of candidates. It is absolute nonsense to say that the expenditure of candidates must be limited, but that the expenditure which has a much more direct influence by propaganda throughout the nation should be unlimited and completely lopsided.
  It is true that this proposal does not aim to restrict the amount of expenditure, but undoubtedly if, as a result, legislation emerges which prevents the deduction of this kind of propaganda expenditure for tax purposes it will lessen it. There is a danger to our democracy if this expenditure continues to expand.
  Secondly, who finances this propaganda? This propaganda is financed by two sets of people: first, shareholders, but, secondly, as a result of the Tate and Lyle case in 1955, it is clear that it is financed not only by shareholders, but also partly by taxpayers. This is inexcusable and monstrous. It means that Labour and Liberal taxpayers indirectly contribute to a propaganda campaign which, in effect, is directed in favour of the Conservative Party.
  Mr. R. Gresham Cooke: Would not the hon. Member agree that if the whole purpose and ownership of the company is being taken away by political action the shareholders are perfectly entitled to spend money in protecting their interests?
  Mr. Taverne: It is clear that the hon. Member did not see the basis on which the 1955 decision was reached. The argument was rejected that the purpose was merely to protect shareholders, and if it had been something merely to protect the owners it would not have been allowed as a deduction for tax purposes. The hon. Member's intervention is, therefore, entirely faulty in law quite apart from anything else.
  If one looks at the matter, not from a technical or legal viewpoint, but factually, it is clear that the purpose of this

  1267
  expenditure as a whole, through the companies which have been mentioned, is to persuade people to vote against a certain party. I wrote a letter to The Times on this subject and I had a reply from Aims of Industry, to which, unfortunately, I could not reply publicly because my further letter coincided with the period when the correspondence columns of The Times were taken up with a certain moral question, and I had a polite letter from the editor explaining why my letter could not be published.
  In the course of its letter, however, Aims of Industry stated that its action was defensible for two reasons, following a number of earlier points that were given. The first was that it was no more than was happening in the case of people contributing to trade union funds or bingo drives, or people who buy party-line newspapers. That is absurd, for two obvious reasons. Anybody who contributes in these ways knows where his expenditure goes and can contract out, whereas shareholders in a company have no option of doing so. They do not know where their money goes and they cannot contract out.
  Secondly, the point was made that the expenditure was non-political, as the hon. Member for Twickenham (Mr. Gresham Cooke) has suggested. This is true only in the sense in which Conservatives often claim that they are non-political. This expenditure is part of the Conservative campaign at the time of General Elections and it can be called non-political only in a Primrose League sense.
  The new Clause makes clear what, in common sense, we understand by political and non-political If the Clause is passed, the matter would become clearer to the public. It would become open and above board. In local politics, we insist with the strictest rules that people should declare any interest which they have. In national politics, it is not by any means possible to have quite the same degree of openness. Let us, however, have at least some openness. Let us know what influence is being exercised on particular parties and on a particular Government, because it is a fundamental principle of healthy democracy that this sort of thing should be known and should be above board.
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  Apart from anything else, there is a clear case for amending the law as was established by the Tate & Lyle case. That decision was reached only with the greatest difficulty, with two eminent law lords dissenting. In this case, to clear up the matter would not only be an advantage from the viewpoint of the Chancellor of the Exchequer, but is fundamental to the requirements of a healthy democracy.
  Mr. Donald Chapman: My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) has tonight put a brilliant case. He expressed the feelings of many decent people. There is something unhealthy, unpleasant and murky in this part of our political activity.
  Mr. Richard Marsh: Corrupt.
  Mr. Chapman: My hon. Friend is quite correct. I am very proud of British democracy, but if there is one aspect which in other countries can be criticised as being less than the standard which we ought to be setting, it is this one—if there is one at all.
  To the brilliant case which my hon. Friend made I want to add only two footnotes. He was slightly mistaken in saying that the Jenkins Committee did not report on this matter. What happened was that that Commitee examined the matter, but, unfortunately, ran away from it. The Committee's Report says, in paragraph 53, that the matter had been reported to the Committee and that the Committee had thought about it. Finally, it says that these donations have never reached the sort of magnitude which needs an express instruction to companies to publish them.
  But the Committee was running away from the problem—for two reasons. In some companies it has reached noticeable proportions. One iron and steel company spent £250,000 supporting the Tory Party campaign before the last General Election. Another spent a similar sum. We know from private information that many companies spend £60,000 to £100,000 on these matters. [Laughter.] An hon. Member opposite laughs. But these are not insignificant figures. They are about a fifth of what all the Conservative Party spent as individuals in the campaign at the last General Election. If that is not

  1269
  significant in its impact on democracy, I should like to know what is.
  The Jenkins Committee is to blame because it ran away from the problem and gave us no guidance whatever although the Home Secretary had said, in 1960, that it would do so. The blame rests squarely on the Jenkins Committee. In the absence of any guidance from it, we are now entitled to go back to what was said by the then Home Secretary, now the First Secretary, as quoted by my hon. Friend—that we should await the outcome of the Jenkins Committee. As the Jenkins Committee has given us no guidance, we are entitled to say that the Government must now take up at the point where the right hon. Gentleman left off in I960. The Government must make their own judgment and not prevaricate on the issue any longer.
  As a second point on the Jenkins Committee, it also said that if the donations ever got so large, it expected—it did not put it at all forcibly—that some duty would be put on the companies to publish something about them under Section 149(1) of the Companies Act, 1948. I should like to ask the right hon. Gentleman about that Section, which states that the profit and loss accounts must give a true and fair picture of the expenditure of the company in the past year. The Jenkins Committee said that, in its view, included in this was the need under that Section to give the figures for political expenditure if they reached any magnitude. I should like to know what is happening about that Section.
  I know of many companies which are wilfully disguising their expenditure on political purposes under other headings under that Section. It is about time that this aspect was dealt with. If the right hon. Gentleman will not tell us anything on our main proposition, he ought at least to be able to tel1 us that the operation of the Section will be looked at to ascertain whether the law is being applied. My view is that companies are wilfully avoiding that Section and distributing their expenditure on political activities under such headings as "advertising", "miscellaneous", "printing" and "contributions to charitable organisations". They use every term but the true one under that Section.
  1270
  It is about time that the Section was properly enforced by the Government and companies were forced to give, in the words of the Section, a true and fair picture in their annual profit and loss account of where the money is going on matters like this.
  10.0 p.m.
  The second footnote I would add is this. I refer to the debate that took place in 1960, when this whole issue was discussed. I want to remind the House of what the hon. Member for Devon, North (Mr. Thorpe) said on that occasion. He quoted to us two examples of companies to which someone of his acquaintance had written to ask, as a shareholder, where the money was going. He read part of the replies from the two companies, which are a scandal if ever there was one, of the way in which the shareholders and the public are treated.
  The British Ropes Co.—this ought to be of interest to the Financial Secretary, because it is within his constituency of Doncaster—and the South Africa Co. both replied in letters to a shareholder who wrote saying, "I am a shareholder in your company. I want to know what you spend on political purposes", that it would not be in the interests of the public or the shareholders to give this information to him as a shareholder.
  How ridiculous can this situation be? This situation has been repeated on other occasions, as my hon. Friend said. In fact, it amounts to this: there is a wilful conspiracy to hide this not only from the public as a whole, but from the immediate people most entitled to the knowledge, the shareholders of the individual companies concerned.
  In the circumstances, we are absolutely entitled tonight not to have a party reply. We can have some party knockabout on this, but the decencies of our public life are involved in this issue and the reputation of British democracy. It is important that after we have had the knockabout stuff which we always expect from the Chief Secretary—we will allow him that and laugh with him as he makes it—we should have a serious reply, first, about the crucial issues involved in the operation of the Companies Act and, secondly, about the proper rights of individual shareholders in a democracy. I

  1271
  congratulate my hon. Friend on introducing a first-class new Clause. I am sure that hon. Members on this side will support him.
  Mr. Maddan: We have just heard it said that there should be a serious reply from the Treasury Bench. I have been waiting to hear a serious case made by the Opposition. I do not intend to detain the House very long. The hon. Gentleman the Member for Birmingham, Northfield (Mr. Chapman) gave some quick figures relating to companies giving a certain amount of money for certain purposes and as I did my mental arithmetic and added them up they came to approximately half the total amount of which the hon. Member for Cardiff, South-East (Mr. Callaghan) complained. I do not see what can be so secret or subversive or disgraceful about the present situation.
  I want to make a point about the speech of the hon. Member for Lincoln (Mr. Taverne), who said that companies were spending money to persuade electors to vote against a certain party. I wonder which party. Just supposing that it is the Labour Party, in whose interest is that? Is it in the interest of the party opposite, or of the Conservative Party, or of a party not represented in this House at all?
  If a case is to be made out, then it must be made with a great deal more evidence and logic than the case made by the Opposition this evening. The only reason for disturbing the status quo is the claim that it is being abused. I want to emphasise what I said in my intervention in the speech of the hon. Member for Cardiff, South East. It was very late in his speech and, therefore, perhaps not quite as relevant as it would have been if I had been able to say it when I first rose to interrupt him.
  The hon. Gentleman said that these contributions were used as leverage on the Government. When asked to give an example, the best he could say was that the chairman of Associated Television had improperly persuaded the Government to grant a second channel for commercial television. But Associated Television is the company which has pre-eminently wished to have such
  1272
  a channel. The hon. Gentleman s case was, however, that television companies did not wish to have such a channel.
  The more I listened, the more I enjoyed the gusto with which hon. Members opposite attacked this subject—at least, they seem to have found something which they can treat with gusto—the less impressed I was with the case.
  Mr. Loughlin: I do not intend to keep the House for more than two or three minutes. I am delighted that the speeches of my hon. Friends have excited at least one hon. Member opposite enough to get him to his feet. As my hon. Friends spoke from this side of the House, hon. Members opposite seemed to get very excited, but I was beginning to feel that, whilst they were getting excited, they were still not prepared to try to defend the existing position.
  I want the Chief Secretary to deal with the position simply. References have constantly been made over the years to the expenditure of trade union funds for political purposes. I am an official of a trade union and it has never tried to hide the fact that it pays substantial sums of money into Labour Party funds so that its members can get some advantage.
  The trade union movement recognises that the Labour Party continues the industrial struggle on the political field. It is as simple as that. The unions, both nationally and through their branches, have consistently paid into Labour Party funds for that purpose. There is nothing secret about it, but we have had to face tremendous criticism from hon. Members opposite over the years. There has always been this constant barrage of criticism of the trade union movement for paying into Labour Party funds. We have had the contracting in and contracting out argument which the right hon. Member for Orkney and Shetland (Mr. Grimond), the Leader of the Liberal Party, trotted out again tonight.
  The trade union movement operates on a democratic basis, and if the majority of the members of a trade union determine that they shall contract in, in the sense that they will affiliate to the Labour Party, that should be sufficient for the members of a corporate body. I would

  1273
  go further and say that we have been pushed into this—that at least our members can contract out.
  What has been happening on the other side of the medal over the years was brilliantly exposed by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). Over the years, companies have been paying substantial sums of money into Tory Party funds for the sole purpose of securing political advantage, and for no other reason. One of my hon. Friends said that it was corrupt. I do not think that it is. The only corruption is the attempt to hide what is going on.
  The companies cannot apply two standards of conduct. They and hon. Members opposite, who collectively represent many companies, have argued that trade unions should be exposed for contributing to the Labour Party, but if it is right for trade unions to be exposed to the fullest possible investigation about the spending of the money of their members, it is equally right that when companies enter this field they, too, should be subject to the same exposure.
  I defy any hon. Member opposite—and I will sit down at once if the intervention is desired—to give a single reason why there should be anything secretive about a company spending money for political purposes by making a contribution to the Tory Party. It is done in devious ways. It is often not a direct contribution but is made to the Aims of Industry organisation, and companies have been contributing to the Economic League for years.
  I warn right hon. Gentlemen opposite, because this is tied up with so many things, that there is now a public awareness of what is going on. There is now public concern about the suggestion that faceless men are controlling the Tory Party for nefarious ends. [Interruption.] I wish that hon. Members opposite would be a little more patient. I am not saying that it is so. But if I accept that the trade union movement has a right to pay into a political party so that its aims can be considered, the companies who believe in the Tory philosophy have the same right. I am not arguing that they should not. What I am arguing is that once newspapers like the Observer and other allegedly quality newspapers start investigating, as they are doing, one can bet
  1274
  one's bottom dollar that there is public awareness of it.
  10.15 p.m.
  I do not want to enter into the question of morality, but before hon. Gentlemen opposite resist this proposal I ask them to ask themselves whether, if I am a shareholder in a company—and I assure hon. Gentlemen opposite that the only shares I have are in the local Co-operative society; and I think I have a couple of £s in it—I would have the right to know whether the money in that company is being distributed by donations to the Tory Party? If hon. Gentlemen opposite argue that a trade unionist has a right to determine whether his 10d. a quarter—because that is what it amounts to in my union, the Union of Shop, Distributive and Allied Workers; every member pays 10d. a quarter into a political levy—shall be paid or not, the same measuring rod must be applied to every shareholder in a company. If the trade unionist is circumscribed in this way, and if the trade unionist has a right to determine what should happen to his money, a shareholder in a company should have the same right.
  We talk about democracy, but if there are hidden persuaders, if there are allegations that people are contributing money so that they can get a bigger slice of the lolly that is going, we ought to know about them. Heaven knows that since 1959 there has been some lolly paid out by the Government to industries controlled by companies; it is, therefore, very easy to argue that they are doing it for the purpose of getting public money in return.
  The Chief Secretary has left the Chamber for a moment or two. If the right hon. Gentleman and the Financial Secretary want to face this issue at all, I ask them to face it in a simple way. There cannot be two standards. The standard which applies to the trade unions should apply equally to private companies.
  Mr. Raymond Gower: The party opposite has made a vigorous plea in favour of this new Clause.
  Mr. Bence: And a confident one.
  Mr. Gower: The hon. Member says that it is a confident plea, but I have greater doubt about its confidence than I have about its vigour.

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  The point that is made is that if this information were published, and revealed in this way, this would ensure a greater sense of democracy in our political institutions. The basis of the argument is that if these details were furnished in this way, less money would be spent by this means. I respectfully suggest that the hon. Member for Cardiff, South-East (Mr. Callaghan) and his colleagues are attacking the symptoms and not the real, underlying causes. They could get rid of this problem in most cases merely by refraining from bringing forward policies which threaten the very existence of these industries.
  I have no particular objection to the publication of many of these details. I am quite convinced that most of these companies, after a full and open consideration of the issues involved, would openly come down in favour of such expenditure if they thought it was for the protection of their very existence. The whole point about this very badly drafted new Clause is that it defines in a most vague, and, I think, a dangerously extensive way, the sort of political activity which hon. Members opposite have in mind.
  I certainly should have very little objection to the publication of direct contributions to political parties, but that is a very different thing from saying that when a company deems that its future existence is threatened in this way and
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  decides to take certain steps, either alone or with other companies in an industry, or in a group of industries, it is doing something wrong or basically unsound. In my submission, it is very wrong to suggest that this necessarily is political activity.
  Mr. Marsh: If it is neither wrong nor is it political activity, what harm would be done in allowing the shareholders to know what is happening?
  Mr. Gower: I have already said that I had very little objection to publication of details of contributions to political parties. My objection is to the classification under one general Clause, not only of that kind of contribution but of all other kinds of contributions which the hon. Member has in mind and to calling all these things, under one general heading, political activity. It is a measure of the desire of hon. Members of the Opposition to make a very large mountain out of a molehill—[Hon. Members: "Oh."] An hon. Member opposite has mentioned a figure. He now says that he referred to the amount of expenditure over a very wide field. Hon. Members opposite could accomplish this far more effectively—
  Mr. Loughlin: We shall do.
  Mr. Gower: —by simply not bringing forward policies which threaten the very existence of certain companies.
  Mr. B. T. Parkin: The hon. Member for Barry (Mr. Gower) is obviously very hurt and very angry. He, I thought, was seeming to criticise the vigour with which the case had been put from this side of the House, but, whatever else his own speech lacked, it certainly was not vigour.
  I refer to the last sentence spoken by my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin), who asked rhetorically, why should there be two standards—one for the Conservative Party and one for the trade union movement? Surely the answer is that there are in fact two standards, there are two sets of priorities and always have been, and it is not a question of all the right being on one side and all the wrong on the other. Debates of this kind have taken place before. They have been noisy and undignified and never seemed to be like a discussion because the two sides have not been speaking the same language.
  One of the great strengths, and at the same time great weaknesses, of the Labour movement is its obsession with correct procedure. It is part of our history that when self-educated men were building up the trade movement or the Co-operative movement, or local government when they began to take a part in that, they had to work out the rules for themselves. Everyone on this side of the House knows that we have our "Outlawries Bill" and our "Consolidated Fund".
  There is one way in which one can speak in the Labour movement—that is, to move the reference back of the report of the Standing Orders Committee. Anyone dealing with procedure is all right in the Labour movement. This is sometimes a weakness but it has also been a great strength. My hon. Friend the Member for Gloucestershire, West referred to the rules of his union on accounting for expenditure on political purposes. They were laid down in a Parliament of a different political colour, but I do not think that his union would object to them, because this kind of procedure has always been accepted in the Labour movement, as anyone will appreciate who has heard the secretary of the social committee present the balance sheet of the money collected at the last rummage sale.
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  As I have said, there are two standards. Among Conservatives there is a hurt indignation and a feeling that such questions as these are faintly indecent, implying suggestions of dishonour which are contrary to the Conservative Party's tradition. The party bases its traditions on the belief that its members are born to rule and that nobody should question their methods. There are certain duties incumbent on their supporters, contributions of money ought to be made confidentially, and nobody should inquire how the money is raised or spent. A good old crusty Tory is deeply offended by the very suggestion from this side of the House that the source of the money should be revealed. He does not understand what it is all about. The party has been following its procedure for centuries.
  I am surprised that, as a matter of form, we have not present the Minister of the Crown who is still affectionately known on the other side of the House as the Patronage Secretary. He is the centuries-old expert of this department of Government, and that is why his office exists. I am not certain whether the Chief Secretary now is his superior, but in any event the Chief Secretary will speak on behalf of the Chancellor, and I am more likely to get a reply from a Treasury Minister to the questions which I want to ask, particularly about the law as it affects persons. The Clause refers to persons as well as to companies, although most of the heat in the debate has been engendered on the subject of companies.
  The Clause would have some extremely complicated results in respect of persons, and I should like the Chief Secretary to sort them out straight away. If not the Chief Secretary, then the Patronage Secretary is aware that in Admiralty House on 5th July a lunch will be held, in the terms of the invitation "to meet the Prime Minister."[Hon. Members: "Which one?"] That is how it is phrased. It is not stated how long the lunch will last, or how intimate and personal the social side of it will be, but the person who issued the invitation is Mr. Ronald Simms, who will speak to those present on "The Conservative Party and the next General Election."
  These gatherings have been held before, so that the Patronage Secretary or the

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  Chief Secretary will be able to answer my questions with no difficulty. This is a regular process of raising money for the Conservative Party. Those who are invited to lunch are wealthy people who are assumed to owe a debt of gratitude to the Conservative Party. They are to meet the Prime Minister. Mr. Ronald Simms will tell them what is wanted out of them, and the only question which they have to answer is, "How much?" This has been going on for many years.
  This implies a complicated job for the Inland Revenue. There is the question of the Prime Minister's personal allowance for entertainment expenses. This comes out of his salary. It is difficult to see at a glance exactly how the cost of this lunch will be met, but in any case it seems that a good deal of it will be paid by the taxpayer; not this time by a shareholder but out of, I suppose, the Consolidated Fund. I do not know. Or this might be a new form of virement.
  10.30 p.m.
  At any rate, it is obvious that no one can reply from the Treasury Bench on a proposition of this kind and to a new Clause of this kind unless he makes quite clear what would be the effect of the Clause on the existing method of assessing how far personal expenses of this kind are allowable for this purpose, how far various emoluments are given to the public service, and how much of them could be allowed for purely party money raising activities of this kind.
  I hope and believe that the Chief Secretary will be able to explain this, in the calm terms which I would expect from him, as part, as I say, of a centuries-old tradition. My hon. Friend said there are two standards. There are two standards, and the two different sides of the House uphold them. There is something not altogether respectable about Tory standards. That is the impression which does tend to gain ground, but I am sure that old-fashioned Tories believe that it is their perfect right to have a Patronage Secretary, living, in normal circumstances, next door to the Prime Minister—as he has done over the centuries—to carry out the same kind of duty with dignity on a confidential basis, and that that is the right way in which such a party should be kept in power.
  Mr. Ron Ledger: I intervene only because a number of hon. Members on this side of the House have referred to large organisations or to large companies which donate large sums for political purposes and because the obvious answer from the other side was that they do this only because they are scared of being taken over. I intervene because there are many thousands of pounds being donated by small firms, and I would relate to the House how I happened to find out how this was going on in my constituency.
  A notice appeared in the local paper inviting industrial organisations to join the Romford Industrial Council. I was most surprised to hear that this council was being formed because I thought that industry in Romford was being pretty well served by its M.P., so I bothered to investigate a little. To my surprise, as a result of those investigations one industrialist came to me with a complaint. He had applied to join this industrial association only to find that, indirectly, he was expected to donate to the Conservative Party. I did not investigate any more fully because there were enough things to do and I gathered, anyway, that they were not going to continue with the build up of that organisation but would continue with it in the next constituency.
  I heard nothing more until I received from the agent of the Conservative M.P. in the next constituency a letter dealing with a perfectly normal matter, but I noticed that by strange coincidence I got a very similar sort of envelope, and when I opened the letter I found it was, again, from the Conservative Party agent. I read it quickly, and to my astonishment it was inviting me to donate £50—[Hon. Members: "Hear, hear."]—to the Hornchurch and District Industrial Association, and informed me that this would give me the right to four lunches or dinners at the House of Commons—[Hon. Members: "Oh."]—at which at least a junior Minister would be present to speak, the balance from this sum of £50 to go to Conservative Party funds.
  I mention this because it might well be that, if only by mistake, the Minister will accept this Clause, and then he will want to know how to look into the accounts to find the sort of expenditure we are talking about. It will not obviously be a donation to the Conservative Party.

  1281
  In this case in the accounts it will be a donation to an industrial association, but in fact at least four-fifths of the total amount will be a donation directly to the Conservative Party, and I defy any hon. Member opposite to say that this would not be for political purposes. I have made this short intervention only because these matters have not been mentioned.
  Mr. Callaghan: Would my hon. Friend allow ms to quote what the chairman of the Industrial Council of Romford says? The chairman of the Industrial Council of Romford is a Mr. John Lockwood, who will be remembered as a former Conservative Member of Parliament. Speaking about this Industrial Council he says this:
  "The Council does not aim to give any industrial help. Its main aim is to provide money for the Conservative Party."
  Mr. Ledger: My hon. Friend was quite right to intervene. The point here is that, first, there is the bribery on the part of the Conservative Party, which is bad enough—
  Mr. Denis Howell: On a point of order. Is not my hon. Friend raising a matter which, if the facts are true, is a breach of privilege? Must it not be a breach of privilege if in fact—
  Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. If the hon. Member is concerned with a breach of privilege, this is not the right time to raise it.
  Mr. Ledger: At this moment I am not all that concerned with a breach of privilege, but I will consult my hon. Friend about it later. The main point I want to make is that the expenditure for political purposes on the part of industrial organisations will not be obvious from the balance sheet, and I have reported this instance to show that there is a deliberate deceit on the part of companies in trying to hide from the public the fact that they are spending money supporting the Tory Party.
  Sir Peter Roberts: I think that the hon. Member for Romford (Mr. Ledger) strayed somewhat from the beaten track in his remarks, as he seemed to object to one party or the other trying to get private subscriptions into its coffers.
  1282
  I also think that the hon. Member for Paddington, North (Mr. Parkin), who has to be much more careful about straying from the beaten track, did somewhat stray.
  I rise to my feet because of the inconsistency between the speeches of the hon. Members for Gloucestershire, West (Mr. Loughlin) and Birmingham, Northfield (Mr. Chapman). As I understood it, the hon. Member for Gloucestershire, West said that it was perfectly proper for the majority of those in the trade union movement to vote for a political levy. Personally, I would agree with him. However, the hon. Member for Northfield quoted the case of some shareholder in some company the name of which I have forgotten who appeared to be a minority shareholder. What the hon. Member is saying is that, in his view, a minority shareholder should have the powers under some legislation here today to over-weigh the majority. If the hon. Member for Northfield had any logic whatsoever in his case, he should be able to say that the majority of the shareholders of a company could go to their annual meeting, vote out the board, and put in another board which would tell them all the facts they wanted. It is absolute nonsense for hon. Members opposite to claim the democratic principle on the one hand and not to claim the democratic principle on the other.
  Mr. Loughlin rose—
  Sir P. Roberts: No. If I may say so, the hon. Member was a little more democratic than was his hon. Friend the Member for Northfield, so he will do well to keep his place.
  A great deal of information might be given in this debate. If the hon. Member for Cardiff, South-East (Mr. Callaghan) is to reply to the debate, as I hope, his answers to certain questions might assist the Conservative Party. Is it the intention of a Labour Government, if they ever get into power at some far-distant date, to nationalise the steel industry? [Hon. Members: "Yes."] We are entitled to know. Is it the intention of the Labour Party, if it gets into power, to nationalise the road haulage industry? Come on—we want to know. Is it the intention of the Labour Party to nationalise the insurance industry?

  1283
  [Hon. Members: "No."] We should like to know.
  Mr. Callaghan rose—
  Sir P. Roberts: Just a moment. I believe that if the hon. Gentleman will answer those questions, this debate will have been very worth while.
  Mr. Callaghan: As the hon. Member has asked me those questions, and as I have the opportunity to reply later, may I put this to him? If I undertake to reply to his questions, will he undertake to tell me how much his company and the other steel companies have contributed to various organisations for political purposes?
  Sir P. Roberts: I will undertake to let the hon. Gentleman know the amount my company spends.
  Mr. Bence: This use of company funds one way or the other is one of the most serious issues facing the country today. It may be that, 40 or 50 years ago, many of the people running British industries were the largest owners of those industries, but industry today is run by professional managers on behalf of boards of directors representing an increasingly smaller number of concentrated institutions. For instance, many right hon. Gentlemen leave the benches opposite and become directors, not of one company but of a dozen companies, or 20, and then spend about 48 weeks in the year going round getting funds for the Tory Party. This is happening, and we know it.
  In British industry, we have profit sharing. A trade unionist who works in a factory where that system operates gets a shareholding in the concern. He is a member of a trade union that is affiliated to the Labour Party, and he contracts in to pay a political levy—in my own union, the levy amounts to 2s. per year, and one can contract out. But the directors of the company, who may be members of the Tory Party and members of many other companies, too, can use their position on the directorate to contribute the trade unionist's money, as a shareholder, to the Tory Party.
  There is no ballot. Nobody suggests that the shareholders should be balloted
  1284
  whether the money should be used for the benefit of that party. A director of a company may be someone who has lost his seat as a Tory Member, and has been given that directorship. Let us have ballot papers issued to the workers, the shareholders, in the company, to decide whether or not they shall make a political contribution of £20,000 a year to the Tory Party, the Liberal Party or the Labour Party. Let us have the three nominations on the ballot paper. These people are not spending their own money in aid of any political party or organisation; they are spending other people's money—the workers' money, the shareholders' money. They have no right to do it.
  10.45 p.m.
  I hope that when, before long, we on this side of the House are the Government, company law will be so amended that information about all moneys spent by public companies is published in a clear form so that everyone can see where the money goes. I sat in a man's office in my constituency and he showed me a letter. I have never read anything like it in my life. I wish that I could have pinched it and read it out to the House. It was almost a demand from the Tory Party for funds. [An Hon. Member: "What is wrong with that?"] It was wrong because of the terms of the letter. It was almost as if the man had been obliged by tradition to pay a tithe. It was the tradition of the Middle Ages in the form of a feu duty and a tithe on his revenue. It was a sort of protection racket. This is the kind of thing that is going on. It is about time that the whole system was ended. It is absolutely discreditable in the twentieth century.
  Mr. Denis Howell: May I draw my hon. Friend's attention to the little racket which he will recall is operated by the Tories in Birmingham? They send round a black book to the small shopkeeper bearing at the top the name of an industrialist who had contributed a few hundred pounds and the note, "Please enter your name and we will send the book to the next small shopkeeper," so that everyone in the area knows who has and who has not contributed.
  Mr. George Brown: In America people are put in prison for doing that.
  Mr. Bence: No doubt my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) could reiterate many stories of what happens in Birmingham with the Tory Party. I was in Birmingham for many years and I know very well that there was a great deal of intrigue to obtain recruits and money for the Tory Party. It is more difficult to do that there now than it was many years ago. The best thing the Tories can do in Birmingham is to concentrate on collecting the necessary funds against losing their deposits when there is a three-way contest.
  If the Clause cannot be accepted, I hope that when we have the report on company law that law will be reformed so that those who have a stake in an industry, workers and shareholders, shall be informed about the money the company is spending, whether on political parties or any other purpose. In most industries this is public money in the true sense, and where public money is handled all sections of the public are entitled to know how, where and for what purposes it is being spent. I have to tell how I spend my money to satisfy the Inland Revenue. It is unjust that directors of companies can use company funds and direct them to any political party, no matter which, or to extraneous purposes outside their articles of association and their business. This is a disgrace to a democratic society.
  The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): I was a little surprised at what the hon. Member for Dunbartonshire, East (Mr. Bence) has just said in his peroration. He said that he had to tell the Inland Revenue how he spent his money. Unless the hon. Gentleman is claiming that the way he spends his money is a way which enables him to deduct that money in the computation of his income for Income Tax purposes, in which case it is right that he should be required to tell the Inland Revenue, it is a surprise to me that he should have to tell the Inland Revenue or anyone else how he spends it.
  In view of the course which the debate has taken, the House may, perhaps, be
  1286
  interested to come back to the words of the new Clause.
  The opening words of it are:
  "The following provisions of this section shall have effect to provide information for determining whether, and in what manner and to what extent, it is expedient to amend the law so as to disregard for purposes of taxation expenditure incurred for political purposes or to disallow such expenditure in the computation of profits or gains."
  When I first saw this on the Notice Paper, I was subject to two conflicting reflections. By one I was reminded of the way we are adjured at the beginning of every Parliament to put the best possible construction on each other's motives. By the other I was reminded of the agreeable and somewhat volatile character of the hon. Member for Cardiff, South-East (Mr. Callaghan). Although I came to the conclusion that, on the face of it, this was intended to be a new Clause designed to prevent any loss to the Revenue through claims for deductions for tax purposes which should not be made, I suspected that we should have, in fact, precisely the sort of debate which we have had.
  The hon. Member for Lincoln (Mr. Taverne) was, I think, the only hon. Member actually to refer to taxation at all in this context. It would be an appropriate gesture on my part if I were to single him out for priority in reply. I thought that he was completely wrong—I cannot carry the civilities much further—when he referred to the contributions made to political parties as being financed by taxpayers and to the flood-gates being open. This is simply not so.
  On the question whether a contribution to a political party is an allowable deduction or expense for tax purposes, the law, as I understand it, is perfectly clear since the Tate and Lyle case, namely, that in general such contributions to political paries are not allowable as a deduction for tax purposes. The basic rule is that expenditure is not deductible in computing profits unless it is wholly and exclusively—words which will not be unfamiliar to hon. Members—incurred for the purposes of a trade or profession.
  It follows that no allowance is due, in computing profits, for payments for political purposes such as contributions to political or party funds or electoral expenses. All that is allowable under the Tate and Lyle decision is—I am deliberately using imprecise language

  1287
  from the lawyer's point of view—expenditure when the existence of a company is thought by its board to be menaced.
  Here, because I think that he had not got them in mind, I remind the hon. Member for Lincoln of the words of the noble Lord, Lord Morton of Henryton in delivering the leading opinion in the House of Lords:
  "My Lords, apart from authority I should have no hesitation in answering the question just posed in the affirmative. Looking simply at the words of the Rule, I would ask: if money so spent is not spent for the purposes of the Company's trade, for what purpose is it spent? If the assets are seized, the Company can no longer carry on the trade which has been carried on by the use of those assets, Thus the money is spent to preserve the very existence of the Company's trade".
  Mr. Taverne: Does not the right hon Gentleman's case rest entirely on his misinterpretation of my argument? Is it not a fact that, in the Tate and Lyle case, the expenditure which was allowed to be deducted for tax purposes was expenditure in the course of the campaign organised by Aims of Industry?
  Mr. Boyd-Carpenter: This is the reason for the decision. I have read the extract from the leading opinion in the case, which goes on to point out that there is no authority to the contrary, because the noble Lord in that passage says "apart from authority".
  The money was spent to preserve the very existence of the company's trade. All the way up in the case, the courts—and in the processes of our law, it went through four different tribunals—upheld the view that whereas general contributions to political parties are not admissible for this purpose, where it is a question of the defence of the very existence of the company and of its trade, they are, for the reason given by the noble Lord, plainly spent in the interests of the company. We start, therefore, on the basis—
  Mr. Taverne: Will the right hon. Gentleman give way?
  Mr. Boyd-Carpenter: Not again at this stage.
  Mr. Taverne: The right hon. Gentleman is wrong.
  Mr. Boyd-Carpenter: It is no use the hon. Member saying that I am wrong, because I quoted the actual passage from Lord Morton.
  Therefore, we start on the basis that the great bulk of the contributions which we have been discussing tonight—and whether rightly or wrongly made, I am not at the moment and on this point concerned—are not allowable as a deduction for tax purposes and are, therefore, not at the cost of the taxpayer.
  Now, we come to the real purpose of the Amendment as it was disclosed by the hon. Member for Cardiff, South-East. He said several times that it was the intention that the shareholders should know whether their money was being given to political parties. That was repeated by the right hon. Member for Orkney and Shetland (Mr. Grimond), although, I thought—I do not speculate as to the reasons—rather more hesitantly. The Liberal Party, I am told, does not do too badly in the City.
  Mr. Grimond: If I may rely on the right hon. Gentleman's assistance, I shall be glad to take him up on this afterwards.
  Mr. Boyd-Carpenter: I would always assist the right hon. Gentleman in a good cause, but I somehow doubt whether it would come within that definition. As he says, we can discuss it agreeably afterwards.
  The practical point is that the new Clause would not serve that purpose. It proposes that the return should be made to the Commissioners of Inland Revenue. The hon. Member for Cardiff, South-East will know, because he once served the Inland Revenue, and the hon. Member for Sowerby (Mr. Houghton), if he is present, will know well, that information given to the Inland Revenue about individual taxpayers is not published or released. Indeed, it is a basic principle, supported by the oath taken by officers of the Inland Revenue, that it is not disclosed.
  Therefore, while, no doubt, the Clause would serve the purpose which it purports to serve—of permitting consideration to be given to a deduction for tax purposes, which, on the whole, does not exist anyhow—the purpose for which, we are

  1289
  told, it is really intended would not be served by it, because, on the basis not only of Inland Revenue practice, but of the Inland Revenue oath, the facts about an individual taxpayer's tax position—the taxation he pays, what he is allowed for tax purposes and the information furnished to the Revenue under Revenue powers—is not disclosed.
  Therefore, whatever value the Clause may have for its purported purpose—which, as I have explained, is very small—the value which it would have for the real purpose behind it is absolutely nil. Consequently, we have spent a considerable time tonight suggesting that the House of Commons should enact something which would not have the effect that those who wish to enact it want.
  That has the agreeable consequence that it does not necessitate a speech of any great length from me. [Hon. Members: "Hear, hear!"] I am glad that I carry the House with me on that point. It is always agreeable, particularly at this late hour of the night, so to do. However, I will pick up one or two of the points which were raised because as others have had a bit of fun I suppose it would be churlish to deny it also to me.
  There was a very interesting point in the speech of the hon. Member for Cardiff, South-East when he talked about television interests and suggested that there was a sinister connection between the alleged contributions of television magnates to the Conservative Party and the existence of independent television. Perhaps he would tell us whether the Labour Party, if it came to power, intends to abolish independent television or not.
  An Hon. Member: What has this to do with the subject?
  11.0 p.m.
  Mr. Boyd-Carpenter: It has this to do with it. It has been suggested that the contributions of these magnates have in some way caused independent television to be provided. Therefore, if it is really thought that an improper thing of that sort has brought independent television into being, no doubt the hon. Gentleman, in his highly scrupulous mood tonight, would wish to clear the whole thing out of the way and abolish independent television. I shall have even
  1290
  more fun watching the hon. Gentleman fail to answer that question.
  We had a great many speeches about how unfairly trade unions were treated compared with companies.
  Mr. Callaghan: It was the other way round.
  Mr. Boyd-Carpenter: No. On the contrary, it was how unfairly trade unions were treated compared with companies.
  Mr. Callaghan: The right hon. Gentleman has the argument quite the wrong way. I think that trade unions are treated fairly. That is to say, they have to make a full disclosure of what they do. It is companies' shareholders who are treated unfairly, because they cannot know.
  Mr. Boyd-Carpenter: I am obliged to the hon. Gentleman, because he is now making it clear that he thinks that trade unions are in a privileged position. [Hon. Members: "Oh."] That is what he said. As a matter of law, he is quite right, since the Trade Disputes Act, 1906, put them specially in a privileged position in law. Therefore, the hon. Gentleman is simply not comparing like with like, because he was dealing in this context with bodies which, as he agrees with me, are given a position of special privilege in law and have had that for over fifty years.
  Therefore, simply to say that one should equate the position of companies with the position of trade unions is to fall into the ordinary logical fallacy of not comparing like with like. There is not a single trade union which would wish to forfeit the very great advantages it has under the law by changing its status to that of a company under the Companies Act. If any trade union were to come to that decision, its leaders would, I think, require their minds examined.
  Mr. G. Brown: Give the shareholders the same privilege.
  Mr. Boyd-Carpenter: The right hon. Member for Belper (Mr. G. Brown) has not been present during most of the debate.
  Mr. Brown: I have been here a long time now.
  Mr. Boyd-Carpenter: Not through most of the debate. I have no doubt

  1291
  that it seemed a long time to the right hon. Gentleman, but if he had been present throughout the debate he might have thought that it was even longer. What the right hon. Gentleman is now doing is to ask for privileges for shareholders. So far as I know, I have not been asked for them by shareholders. This is rather a curious attitude for the Labour Party to adopt. It is not normally so tender to shareholders.
  Of course, the debate itself has had a singular element of unreality. It has been conducted as if all great parties do not require and obtain substantial contributions to maintain their party organisations. Hon. Members opposite know perfectly well that their own organisation, with the very expensive advertising campaign it has recently undertaken, and with its considerable corps of professional officers, is a highly expensive thing to maintain. Even the Liberal Party has quite a set-up whose secretariat, as the hon. Member for Huddersfield, West (Mr. Wade) told us earlier, spends its time looking up methods of tax evasion.
  Thus, the central fact of the debate has been its unreality, because the whole suggestion of hon. Members opposite has been that their organisation does not depend, as we all depend, on a very large measure of contributions. The idea of the Labour Party now coming forward at this stage as the champion, as we have been old, of the shareholders is one of the things that will cause the biggest laugh of the year outside.
  Mr. Callaghan: I do not know whether I would have leave of the House to speak again. [Hon. Members: "No."] Very well. But I think that some hon. Members said "Yes" and some "No."[Interruption.]
  Mr. Deputy-Speaker: Order. I hope that there will be no dubiety about it. If objection is taken the hon. Gentleman cannot speak for a second time. May I assume that leave is granted by the House? [Hon. Members: "Yes."] Then I call Mr. Callaghan.
  Mr. Callaghan: I am much obliged. I will not take long. It seemed to me that the Chief Secretary gave away the whole case in his final remarks. He is
  1292
  a very skilful debater, but his reply was rather laboured.
  The right hon. Gentleman referred, very properly, to the highly expensive publicity campaign the Labour Party is carrying on. That is true. We are spending more on propaganda than we have ever spent in the past. But everybody knows about it, and everyone will know exactly how much we spend, because it will be published in the accounts. Can the right hon. Gentleman say the same of the Conservative Party?
  What is well known about this is that before the last General Election at least four times as much was spent on advertising by bodies supporting the Conservative Party but not affiliated to it in supporting its campaign as was spent by the party itself. This has been demonstrated and never denied. If the right hon. Gentleman cares to deny it now, he can do so.
  It is also well known, and I challenge him to deny it, that before the last election there were conferences between important industrial organisations on the one side and Conservative Party headquarters on the other to decide which should undertake certain parts of the propaganda and how the division of expenses and labour should be made. I challenge him to deny that.
  Mr. Boyd-Carpenter: They are entitled to do it.
  Mr. Callaghan: Perhaps they are. I am not saying that it is wrong. I am saying that we are entitled to know—and that is a phrase which will be familiar to him. We are entitled to know exactly how these funds are raised, and shareholders are entitled to know how their money is being spent.
  The Chief Secretary has refused utterly to concede that there is any merit in this Clause. I agree that it goes only part of the way. The Chancellor of the Exchequer would know and would be able to form a judgment on the basis of the Clause—
  Mr. Boyd-Carpenter rose—
  Mr. Callaghan: I will give way when I have finished the sentence. The Chancellor would be able to form some judgment on the basis of the information collected as to the extent of the expenditure by companies and others for political

  1293
  purposes which is not known now. That would at least be a distinct advantage.
  Mr. Boyd-Carpenter: It is all very well for the hon. Member to say that, but when I sought to interrupt he was saying that it was the shareholders of each individual company who were entitled to know. The new Clause would give them no more information than they have at present.
  Mr. Callaghan: I was coming on to that. As those hon. Members who were in the Chamber when we started the debate will know, the Clause is based exactly on Clause 2 of this Finance Bill, which is related to gaming and which provides for the Chancellor to know what the position about gaming is before he takes certain decisions. We are suggesting exactly the same thing in connection with political expenditure. We are suggesting that the Chancellor should first assemble the information. After that it would be possible to decide whether legislation was necessary on the basis of all the facts assembled instead of all the deductions which may have been made.
  If the right hon. Gentleman's only objection to the Clause is that it does not do what we want it to do, namely, give the shareholders the right to know, he can easily draft a better. Would he like to assist us to do that? Have we con-
  vinced him of the merits of the case? Does he think that there is a case for the shareholder knowing? He did not answer that question in the debate. Does he think that there is a case for the company telling its shareholders?
  Mr. Boyd-Carpenter: It has nothing to do with the Clause.
  Mr. Callaghan: It is to do with the Clause. The Chief Secretary has roamed as widely as anybody else, but I am sure that he will be forgiven if he gives the answer to that question.
  Mr. Boyd-Carpenter: It has absolutely nothing to do with the Clause or the Bill.
  Mr. Callaghan: That sort of evasion is the last refuge of a Minister who cannot answer a question because he does not wish to do so.
  The hon. Member for Sheffield, Heeley (Sir P. Roberts), the Master Cutler, asked me certain questions about our policy. I will be glad to send him free of charge, gratis and for nothing a copy of Signposts for the Sixties in which he will find clearly set out what we intend to do when we have won the next election.
  Question put, That the Clause be read a Second time: —
  The House divided: Ayes 129, Noes 169.

  Division No. 145.]

  AYES

  [11.13 p.m.

  Abse, Leo

  Fletcher, Eric

  Lee, Miss Jennie (Cannock)

  Ainsley, William

  Forman, J. C.

  Lewis, Arthur (West Ham, N.)

  Allaun, Frank (Salford, E.)

  Fraser, Thomas (Hamilton)

  Loughlin, Charles

  Allen, Scholefield (Crewe)

  Galpern, Sir Myer

  Lubbock, Eric

  Awbery, Stan (Bristol, Central)

  George,LadyMeganLloyd(Crmrthn)

  McBride, N.

  Bellenger, Rt. Hon. F. J.

  Ginsburg, David

  McCann, John

  Bennett, J. (Glasgow, Bridgeton)

  Gordon Walker, Rt. Hon. P. C.

  MacColl, James

  Blackburn, F.

  Gourlay, Harry

  MacDermot, Niall

  Bottomley, Rt. Hon. A. G.

  Grimond, Rt. Hon. J.

  McInnes, James

  Bowden, Rt. Hn. H. W. (Leics,S.W.)

  Hamilton, William (West Fife)

  McKay, John (Wallsend)

  Bradley, Tom

  Hannan, William

  Mackie, John (Enfield, East)

  Bray, Dr. Jeremy

  Harper, Joseph

  MacMillan, Malcolm (Western Isles)

  Brown, Rt. Hon. George (Belper)

  Hayman, F. H.

  Mahon, Simon

  Callaghan, James

  Henderson,Rt.Hn.Arthur (Rwly Regis)

  Mallalieu, E. L. (Brigg)

  Carmichael, Neil

  Herbison, Miss Margaret

  Manuel, Archie

  Chapman, Donald

  Hill, J. (Midlothian)

  Mapp, Charles

  Craddock, George (Bradford, S.)

  Holman, Percy

  Mendelson, J. J.

  Crossman, R. H. S.

  Hooson, H. E.

  Millan, Bruce

  Dalyell, Tam

  Houghton, Douglas

  Milne, Edward

  Davies, G. Elfed (Rhondda, E.)

  Howell, Denis (Small Heath)

  Mitchison, G. R.

  Davies, Harold (Leek)

  Hoy, James H.

  Morris, John

  Davies, Ifor (Gower)

  Hughes, Cledwyn (Anglesey)

  Noel-Baker, Francis (Swindon)

  Dempsey, James

  Hughes, Emrys (S. Ayrshire)

  Noel-Baker,Rt.Hn.Philip(Derby,S.)

  Diamond, John

  Hunter, A. E.

  Oliver, G. H.

  Dodds, Norman

  Hynd, John (Attercliffe)

  O'Malley, B. K.

  Driberg, Tom

  Irvine, A. J. (Edge Hill)

  Oram, A. E.

  Duffy, A. E. P.

  Irving, Sydney (Dartford)

  Parkin, B. T.

  Edwards,Rt.Hon.Ness(Caerphilly)

  Janner, Sir Barnett

  Pavitt, Laurence

  Edwards, Robert (Bilston)

  Jay, Rt. Hon. Douglas

  Pearson, Arthur (Pontypridd)

  Fernyhough, E.

  Jones, Dan (Burnley)

  Probert, Arthur

  Finch, Harold

  Jones, T. w. (Merioneth)

  Redhead, E. C.

  Fitch, Alan

  King, Dr. Horace

  Rees, Merlyn (Leeds, S.)

  Reynolds, G. W.

  Soskice, Rt. Hon. Sir Frank

  Weitzman, David

  Rhodes, H.

  Spriggs, Leslie

  Whitlock, William

  Robertson, John (Paisley)

  Stewart, Michael (Fulham)

  Wigg, George

  Rogers, G. H. R. (Kensington, N.)

  Swingler, Stephen

  Wilkins, W. A,

  Ross, William

  Taverne, D.

  Willey, Frederick

  Silverman Julius (Aston)

  Taylor, Bernard (Mansfield)

  Williams, W. R. (Openshaw)

  Silverman, Sydney (Nelson)

  Thomas, lorwerth (Rhondda, W.)

  Willis, E. G. (Edinburgh, E.)

  Skeffington, Arthur

  Thompson, Dr. Alan (Dunfermline)

  Winterbottom, R. E.

  Slater, Joseph (Sedgefield)

  Tomney, Frank

  Yates, Victor (Ladywood)

  Small, William

  Wade, Donald

  Smith, Ellis (Stoke, S.)

  Warbey, William

  TELLERS FOR THE AYES:

  Sorensen, R. W.

  Watkins, Tudor

  Mr. Lawson and

  Mr. Charles A. Howell.

  NOES

  Allan, Robert (Paddington, S.)

  Harrison, Col. Sir Harwood (Eye)

  Pott, Percivall

  Ashton, Sir Hubert

  Harvey, Sir Arthur Vere (Macclesf'd)

  Prior, J. M. L.

  Atkins, Humphrey

  Harvie Anderson, Miss

  Prior-Palmer, Brig. Sir Otho

  Awdry, Daniel (Chippenham)

  Hendry, Forbes

  Proudfoot, Wilfred

  Barber, Anthony

  Hill, J. E. B. (S. Norfolk)

  Pym, Francis

  Barter, John

  Holland, Philip

  Ramsden, James

  Biffen, John

  Hope, Rt. Hon. Lord John

  Rawlinson, Sir Peter

  Biggs-Davison, John

  Hornsby-Smith, Rt. Hon. Dame P.

  Redmayne, Rt. Hon. Martin

  Bingham, R. M.

  Howard, John (Southampton, Test)

  Roes, Hugh (Swansea, W.)

  Bishop, F. P.

  Hughes-Young, Michael

  Rees-Davies, W. R. (Isle of Thanet)

  Black, Sir Cyril

  Iremonger, T. L.

  Renton, Rt. Hon. David

  Bourne-Arton, A.

  James, David

  Ridsdale, Julian

  Box, Donald

  Johnson, Dr. Donald (Carlisle)

  Roberts, Sir Peter (Heeley)

  Boyd-Carpenter, Rt. Hon. John

  Johnson, Eric (Blackley)

  Rodgere, John (Sevenoaks)

  Boyle, Rt. Hon. Sir Edward

  Johnson Smith, Geoffrey

  Roots, William

  Braine, Bernard

  Jones, Arthur (Northants, S.)

  St. Clair, M.

  Brewis, John

  Kerans, Cdr. J. S.

  Scott-Hopkins, James

  Bromley-Davenport,Lt.-Col.SirWalter

  Kerr, Sir Hamilton

  Sharples, Richard

  Brown, Alan (Tottenham)

  Kershaw, Anthony

  Shaw, M.

  Bryan, Paul

  Kitson, Timothy

  Sheet, T. H. H.

  Buck, Antony

  Lancaster, Col. C. G.

  Smith, Dudley (Br'ntf'd & Chiswick)

  Bullard, Denys

  Leavey, J. A.

  Smithers, Peter

  Carr, Rt. Hon. Robert (Mitcham)

  Legge-Bourke, Sir Harry

  Stanley, Hon. Richard

  Clark, Henry (Antrim, N.)

  Lewis, Kenneth (Rutland)

  Steward, Harold (Stockport, S.)

  Cleaver, Leonard

  Litchfield, Capt. John

  Stodart, J. A.

  Cooke, Robert

  Longbottom, Charles

  Stoddart-Scott, Col. Sir Malcolm

  Cooper-Key, Sir Neill

  Longden, Gilbert

  Storey, Sir Samuel

  Craddock, Sir Beresford (Spelthorne)

  Loveys, Walter H.

  Studholme, Sir Henry

  Crawley, Aidan

  Lucas-Tooth, Sir Hugh

  Summers, Sir Spencer

  Curran, Charles

  McAdden, Sir Stephen

  Taylor, Sir Charles (Eastbourne)

  Currle, G. B. H.

  MacArthur, Ian

  Taylor, Edwin (Bolton, E.)

  Dalkeith, Earl of

  McLaren, Martin

  Taylor, Frank (M'ch'st'r, Moss Side)

  d'Avigdor-Goldsmid, Sir Henry

  McLaughlin, Mrs. Patricia

  Temple, John M.

  Deedes, Rt. Hon. W. F.

  McMaster, Stanley R.

  Thomas, Sir Leslie (Canterbury)

  Digby, Simon Wingfield

  Macpherson,Rt.Hn.Niall(Dumfries)

  Thomas, Peter (Conway)

  Donaldson, Cmdr. C. E. M.

  Maddan, Martin

  Thompson, Sir Richard(Croydon, S.)

  du Cann, Edward

  Markham, Major Sir Frank

  Tiley, Arthur (Bradford, W.)

  Eden, Sir John

  Mathew, Robert (Honiton)

  Turner, Colin

  Elliot, Capt. Walter (Carshalton)

  Matthews, Gordon (Meriden)

  Turton, Rt. Hon. R. H.

  Emery, Peter

  Mawby, Ray

  van Straubenzee, W. R.

  Errington, Sir Eric

  Maxwell-Hyslop, R. J.

  Vickers, Miss Joan

  Fletcher-Cooke, Charles

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

  Wakefield, Sir Wavell

  Fraser, Ian (Plymouth, Sutton)

  Miscampbell, Norman

  Walker, Peter

  Freeth, Denzil

  Montgomery, Fergus

  Walker-Smith, Rt. Hon. Sir Derek

  Galbraith, Hon. T. G. D.

  More, Jasper (Ludlow)

  Wall, Patrick

  Gibson-Watt, David

  Morgan, William

  Ward, Dame Irene

  Gilmour, Sir John (East Fife)

  Nabarro, Sir Gerald

  Wells, John (Maidstone)

  Glover, Sir Douglas

  Nicholls, Sir Harmar

  Whitelaw, William

  Goodhew, Victor

  Nugent, Rt. Hon. Sir Richard

  Wills, Sir Gerald (Bridgwater)

  Gower, Raymond

  Osborn, John (Hallam)

  Wise, A. R.

  Green, Alan

  Page, Graham (Crosby)

  Wolrige-Gordon, Patrick

  Gresham Cooke, R.

  Pannell, Norman (Kirkdale)

  Woodnutt, Mark

  Grosvenor, Lord Robert

  Pearson, Frank (Ciltheroe)

  Woollam, John

  Gurden, Harold

  Peel, John

  Worsley, Marcus

  Hamilton, Michael (Wellingborough)

  Pickthorn, Sir Kenneth

  Yates, William (The Wrekin)

  Harris, Frederic (Croydon, N.W.)

  Pilkington, Sir Richard

  Harrison, Brian (Maldon)

  Pitman, Sir James

  TELLERS FOR THE NOES:

  Mr. Chichester-Clark and

  Mr. Finlay.

  Further consideration of the Bill, as amended, adjourned.—[Mr. Boyd-Carpenter.]
  Bill, as amended (in Committee and on recommittal), to be further considered Tomorrow.

  RAILWAYS (WORKSHOPS, ST. HELENS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hughes-Young.]
  11.22 p.m.
  Mr. Leslie Spriggs (St. Helens): I informed the Parliamentary Secretary to the Ministry of Transport of the points I shall raise this evening with the object of keeping my speech down to the shortest possible minimum, but that does not mean that this matter is not very important. It affects some very good people, constituents of mine who are highly trained personnel of the Railways Board, some of whom have been working as employees of the railways since they were privately owned.
  If ever there was a case for the retention of a railway workshop it is that of the St. Helens sheet works, even if we leave out the social consequences and consider the economic redundancy and unemployment position at St. Helens and Horwich. Earlier today I spoke to the Ministry of Labour and checked up the position. On 10th June, 1963, there were registered unemployed at St. Helens 1,076 men and 1,232 women, making a total of 2,308, or 4 per cent. of the insured population. At Horwich on that date there were 58 men and 25 females signing on the employment exchange, a total of 83, or 1 per cent. of the insured population. How can the Railways Board justify closing the workshop in St. Helens when there is so much unemployment in the town? Even after the closures have taken effect in Horwich, unemployment will be more severe in my constituency. Indeed, last winter the percentage rose to 5·1 per cent.
  Just before the announcement of the Board's intentions was made, £12,000 was spent on repairs, maintenance and machinery at the St. Helens sheet works. All the machinery was then taken down and transferred to Horwich, but there is not a trained man or a building to deal with this type of heavy work at the Horwich Locomotive Works, because a special structure is needed to take such heavy machinery and to handle the type of work done in sheet production which I have mentioned. The staff would have to be brought in a special
  1298
  train for this special kind of work. It is very heavy work and machinists are required who have been trained over the years. Quite a number of men who have served their time in this kind of work find it very heavy, and if untrained people were brought in to carry out the repairs of these heavy wagon sheets, many mistakes would be made.
  At present, repair work is held up because key staff at the St. Helens sheet works, having a feeling of insecurity, are getting out while the going is good. A number of the key staff have already left. Some are still working there, and I understand that quite a number of women—21 machinists—are still there. The management told them after the announcement that the works were to be closed that alternative jobs would be offered to them all, but unfortunately the management subsequently cancelled this offer and said that it no longer applied to the women. Those who choose to transfer will be away from their homes for about 13 hours a day, four hours of them travelling to and from the new place of work, if they transfer to Horwich.
  The chairman of the Railways Board, Dr. Beeching, told me that only five men have so far decided to move to Horwich. I can assure him that if he insists on sending the staff over this route by rail to their work at Horwich, very few could stand the long hours of travelling, especially after a day's work in the winter. I hope that the Parliamentary Secretary will tell me tonight that a coach will be provided to run my constituents direct to Horwich and to return them to Sutton, St. Helens, where they live, each working day. If Dr. Beeching will do this, and will move quickly, he will retain some of his staff, who are highly trained. If he does not, there is a serious danger of his losing the best of his staff at the works in my constituency.
  I asked Dr. Beeching to tell me what he intended to do about such staff if his proposals to close certain branch lines affected train services to Horwich after their transfer, but the answer was not forthcoming. Perhaps we shall hear something about this aspect of the service to Horwich from the Parliamentary Secretary.
  It is also necessary to look at the possibilities from January, 1964, when the Horwich Locomotive Works commences

  1299
  staff redundancy. How will this affect my constituents then, in particular the labourers who come into the category of last-in, first out? Unless firm and sympathetic answers are given to me and to these workers, there can be no feeling of security if they go to the jobs offered.
  I make that short plea to the Parliamentary Secretary, hoping that he has got the answers to some of the problems which I put to him over the telephone and later sent to him in correspondence. This is one of those things which I believe should never have happened. I believe the St. Helens sheet works could have been retained on full production if some initiative had been used to get orders from other sections of the transport undertaking for the goods, the wagon sheets and such like, for their use. I am afraid that there has been too much apathy towards this aspect of the industry. More could have been done. We have left it too late. Many thousands of people will suffer. I hope that the Parliamentary Secretary will obtain some assurance from the chairman and from the Railways Board that, where redundancies have to take place, every measure will be taken to see to it that the least possible suffering and inconvenience are caused to those concerned.
  11.31 p.m.
  The Parliamentary Secretary to the Ministry of Transport (Mr. T. G. D. Galbraith): In reply to the hon. Gentleman the Member for St. Helens (Mr. Spriggs), I think that perhaps the best thing to do will be to begin by briefly setting out the background of the proposals to close the wagon sheet works at St. Helens.
  On 19th September, 1962, as I think the hon. Gentleman knows, the British Transport Commission, which was then responsible for British Railways and their workshops, announced its plans for the future both of its main workshops and of a number of works such as St. Helens where tarpaulin wagon sheets are made and where they are also repaired. Because the requirements for wagon sheets were expected to fall by about one-half in the next five years a programme of closures had to be worked out. I was not quite certain, in listening to the hon. Gentleman,
  1300
  whether he realised that there is this fall in the demand for wagon sheets because there is to be a reduction in the numbers of open wagons. Therefore, it is obvious, if there are not so many open wagons, that there will not be the need for these sheets.
  As part of this, it was decided that the work done at St. Helens would be transferred to the main railway workshop at Horwich. The hon. Gentleman suggested that this was perhaps the wrong way to do things, but, of course, it is more economic to run one large workshop than a small one and a large one. It was also decided that the staff at St. Helens would be offered any vacancies which existed at Horwich. So much then for the railways' plan.
  I think that at this point I ought to make clear to the hon. Gentleman the respective responsibilities of the railway management and the Government in a matter of this kind. As I am sure the House realises, plans for the rationalisation of the railway workshops, whether they be the main workshops or wagon sheet works like the one at St. Helens, have to be made in the light of the detailed operational needs of the railways, and they are thus the responsibility of the statutory body appointed to run the railways. In September, 1962, this was the British Transport Commission. Now, of course, it is the British Railways Board.
  If it is clear that the workshop undertaking must contract because there is insufficient work to keep capacity fully employed—I do not think that there is any argument about that here, because there is already a good supply of these sheets and, as Dr. Beeching told the hon. Gentleman in his letter to him, attempts to find work from other nationalised industries have been declining—it is for the management to select the works which are to be retained and those which are to be run down or closed.
  When, therefore, the Plan for Main Workshops was published, the Government gave it general endorsement as being in accordance with the railways' statutory duties to conduct their business efficiently and on a sound financial footing, but the Government could not, and did not, lay down the details of the plan. These matters are obviously the responsibility of management.

  1301
  Thus, the specific points made by the hon. Gentleman are all essentially matters for the Railways Board, not only because the Board must decide where the work is to be done, but because staff relations and conditions are entirely its concern and not the responsibility of the Government, though my right hon. Friends the Minister of Labour and the President of the Board of Trade are doing what they can to help the general situation in St. Helens and the north-west area.
  In spite of what I have said about the responsibility, I will, however, try to help the hon. Gentleman by dealing with the points he has raised, not only tonight, but in the telephone call which he was kind enough to make to me, on the basis of the information which I have been able to obtain from the Railways Board.
  The first point made by the hon. Gentleman was with regard to the difficulties of travelling between St. Helens and Horwich. He said that these difficulties have made the staff at St. Helens reluctant to accept the offer of transfer which the railways have made. I realise that travel between St. Helens and Horwich is not an easy matter, and, though the distance is only between 15 and 18 miles, the journey by existing transport facilities can take over two hours to complete.
  I am also aware that the plan for reshaping British Railways proposes the closure of the main station at St. Helens—Shaw Street—and also the closure of Wigan Central, so that the rail link between St. Helens and Horwich, such as it is, would disappear altogether if these closures took place, but I must say that the outcome of these proposals, because they are still only proposals, is uncertain, because the closures must go through the statutory procedures laid down in the Transport Act, 1962.
  The hon. Gentleman suggested that the answer to the problem might be a special bus or some sort of direct communication. I understand that the Railways Board has written to the hon. Gentleman saying that it had it in mind to arrange for a bus if the numbers accepting the transfer justified it. The position at present, however, is apparently that members of the staff who first made this suggestion to the management lost interest in the scheme and left the works and the matter has not been raised again
  1302
  by the rest of the staff. However, if interest in this matter is revived, it is something which the staff would have to take up again with the management.
  As to the cost of this travel, if it is by bus, free residential travel on British Railways is one of the normal concessions granted where men are transferred to another post is this does not involve them moving their homes. The Railways Board tells me that in a case where suitable rail facilities were not available reimbursement of additional bus fares would be granted. So much for the travel aspect of the matter.
  Let me now turn to the second main point raised by the hon. Member, concerning the future prospects of staff who did not accept transfer. Naturally, these people wondered whether their jobs would be secure once they had gone to Horwich, and I think that the Hon. Member suggested that some of the staff were deterred from accepting transfer because they felt that as newcomers to Horwich they would be the first to be redundant in the event of any staff reductions there. He wondered whether it was possible for me to give any indication of the degree of security of employment at Horwich which would attach to any staff who transferred.
  As I am sure the hon. Member realises, questions of seniority and juniority for redundancy purposes can be settled only between management and staff. Indeed, the railways and the unions have between them agreed various procedures which differ from locality to locality, and are often extremely complicated. I have made inquiries of the Railways Board, and I understand that sheet repairers who transfer carry their seniority with them. I hope that this information will reassure the hon. Member, at least in relation to those grades. The Railways Board, however, says that there is no similar security for labourers, about whom the hon. Gentleman was worried, and it seems that the vacancies that exist at Horwich for labourers are only on a temporary basis.
  Naturally, any of those who decide to transfer to Horwich and subsequently become redundant will qualify for the normal redundancy compensation provided under the agreements. I should

  1303
  mention, in case there is any misunderstanding, that redundancy compensation under the agreements applies equally to female staff—to whom the hon. Gentleman also referred. This is important, because my information from the Railways Board, which is the same as he has had locally, is that there is unfortunately no work at Horwich for the women machinists now employed at St. Helens, because those women are employed in making new sheets, the demand for which at present is insufficient to provide work at Horwich for women. Indeed, as I have already said, there is an abundant supply of these new sheets.
  This brings me to another point which I do not think the hon. Gentleman touched on this evening, but which he mentioned to me on the telephone. That is the question of supervisors, to which I believe he would like an answer. At present, it appears that the supervisors are not properly aware of the arrangements negotiated by their unions with the railways. This agreement was made last March, and its main provisions are as follows.
  First, not less than three months' personal notice of impending redundancy is to be given. Secondly, all men under 60 will be offered a suitable workshop supervisory vacancy in their own class or a lower class or category in their own region or in other regions, but they can choose, if they like, to take discharge on compensation. Thirdly, workshop supervisors who are transferred to a lower class or category retain the rate of pay of their former class, and can proceed to the maximum of their former scale in due course. There are also provisions for free residential travel, lodging allowances, and financial assistance towards the costs involved in transfer, as for wages staff.
  Those men who have earlier service in the wages grades which has not earned them benefits under the salaried superannuation schemes will get lump-sum compensation in respect of that service in exactly the same way as is provided for the wages grades. Again, when a man does not immediately find employment, he will get his unemployment pay made up to two-thirds of his former rate for a period depending upon his age and service. Of course, if a man is already receiving his pension, the rate at which
  1304
  continuing payments are made will be reduced by that amount.
  Where a man who is entitled to benefits under the salaried superannuation scheme is discharged before he is 60. those benefits, subject to the fund rules, will be payable when he reaches 60. If, in addition, he is at least 55 at the date of discharge, he can obtain an advance of the gratuity due to him under the scheme, though he must wait until he is 60 before he has the annuity. Supervisors with expectations under other existing arrangements will receive payments based as nearly as possible on the arrangements which I have described for supervisors generally.
  As I think the hon. Member knows, there is nothing secret about these arrangements. They received considerable publicity when they were negotiated, and they were fully covered in the Transport Salaried Staff Journal of April. 1963. Therefore, the information exists in print, but if any of the staff at St. Helens, as the hon. Member suggested when he spoke to me, are not aware of the arrangements and how they affect them personally, I know that the management will be very ready and willing to give them any information they require.
  I should say that the arrangements apply specifically to workshop supervisors but I am informed that comparable arrangements are now being actively negotiated between the railways and the unions in respect of salaried staff generally, and any salaried staff at St. Helens not covered by the agreement for supervisors will get the terms of the other agreement like the supervisors, they are, in any case, pensionable at 60.
  I appreciate the hon. Member's concern on behalf of his constituents about these matters and the closure of this work, the offer of employment at Horwich, and the doubts about the supervisors. In the same way as I appreciate the concern, so I am informed does the Railways Board, but, unfortunately, there are always problems of this kind in cases of this nature, where the changed pattern of the railways, or any industry, make it necessary to have closures. As far as railway staff are concerned, I know that any such problems, in accordance with instructions issued by the Railways Board

  1305
  to local managements, will be dealt with sympathetically and individually. The House will be interested to know that the railways have appointed a director of resettlement whose task will be to see that this is done efficiently and thoughtfully for men as individuals.
  I think that I have covered more or less all the points raised by the hon. Member. If there is anything which he has found complicated and does not understand or which I have not made clear to him, and if, after considering what I have said and discussing it with his constituents, there are still points which are not clear, perhaps the hon. Member will either get in touch with the Railways Board or will tell me. I will see that any points of difficulty are brought to the attention of the Board, which is responsible for all management matters affecting its staff—and it is management matters that we have been dicussing this evening.
  Mr. Spriggs: May I draw attention to the fact that the staff concerned have never heard of any offer of road transport between St. Helens and Horwich?
  Mr. Galbraith: The hon. Member must appreciate that I am acting as a spokesman for the Board. This is not something which is run by the Ministry of Transport. My information is that at one stage some of these workers, about to be transferred, raised the problem of transport and asked whether it was possible to have a bus. While this was being discussed, these particular workers lost interest and took jobs elsewhere. No other members of the staff have raised it.
  What I was saying to the hon. Gentleman was that, if there were members of the staff who wished to transfer and who were still interested, the matter would be considered if they would raise it with the management again. Of course, I cannot bind the Board; it would, obviously, depend on numbers and all sorts of considerations like that. If there are members of the staff who are interested in a bus, they ought, as was done previously, to raise the question with the management.
  Question put and agreed to.
  Adjourned accordingly at ten minutes to Twelve o'clock

  NATIONAL FINANCE
    Development Districts (Aid to Developing Nations)
    Development Districts (Aid to Developing Nations)
    Arts Council Grant
    Arts Council Grant
    National Theatre and Opera House (Architect)
    National Theatre and Opera House (Architect)
  TRADE AND COMMERCE
    Commonwealth Trade
    Commonwealth Trade
    Factory, Camborne-Redruth
    Factory, Camborne-Redruth
    New Industries, Falmouth-Penryn Area
    New Industries, Falmouth-Penryn Area
    North-East
    North-East
  MALTA
    Independence (Conference)
    Independence (Conference)
    Dockyard
    Dockyard
  ADEN
    East African Court of Appeal (Quashed Convictions)
    East African Court of Appeal (Quashed Convictions)
  KENYA
    Independence
    Independence
  HONG KONG
    Electricity Supply
    Electricity Supply
  MALAYSIA
    Federation
    Federation
  SWAZILAND
    Sugar Plantation and Asbestos Workers (Wages)
    Sugar Plantation and Asbestos Workers (Wages)
  BASUTOLAND
    Pius XII College, Roma
    Pius XII College, Roma
  HIGH COMMISSION TERRITORIES
    Mr. Patrick Duncan
    Mr. Patrick Duncan
  POST OFFICE
    Parcel Post (London-Cleethorpes)
    Parcel Post (London-Cleethorpes)
  WIRELESS AND TELEVISION
    B.B.C. Television Reception, Lancashire
    B.B.C. Television Reception, Lancashire
    Unmanned Repeater Television Station, Folkestone
    Unmanned Repeater Television Station, Folkestone
  LOCAL GOVERNMENT
    Water Charges
    Water Charges
  HOUSING
    Aluminium Bungalows
    Aluminium Bungalows
  SHIPBUILDING
    Foreign Shipyards (Orders)
    Foreign Shipyards (Orders)
  HIGH COMMISSION TERRITORIES (ACCESS BY AIR)
  HIGH COMMISSION TERRITORIES (ACCESS BY AIR)
  WORLD FOOD PROGRAMME
  WORLD FOOD PROGRAMME
  VENICE (COUNCIL OF EUROPE RECOMMENDATION)
  VENICE (COUNCIL OF EUROPE RECOMMENDATION)
  EMPLOYMENT
    The Hartlepools (Apprentices)
    The Hartlepools (Apprentices)
  MALAYSIA
    Manila Talks
    Manila Talks
  ROYAL NAVY
    Contract Illustration Work
    Contract Illustration Work
  MINISTRY OF AVIATION
    Gatwick Airport (Developments)
    Gatwick Airport (Developments)
  EDUCATION
    Commonwealth Day
    Commonwealth Day
    Educationally Sub-normal Children
    Educationally Sub-normal Children
  SCIENCE
    Natural Resources Research Council
    Natural Resources Research Council
    Postgraduate Students (D.S.I.R. Awards)
    Postgraduate Students (D.S.I.R. Awards)
    Geological Research
    Geological Research
  PUBLIC BUILDING AND WORKS
    Outer Circle, Regent's Park (Kerbside Parking)
    Outer Circle, Regent's Park (Kerbside Parking)
  SCOTLAND
    Borstal Institution, Dumfries (Disturbance)
    Borstal Institution, Dumfries (Disturbance)
  TECHNICAL CO-OPERATION
    Colonial Students (Welfare)
    Colonial Students (Welfare)

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack,
Prayers—Read by the Lord Bishop of Manchester

INJECTION OF ANIMALS WITH PAPAIN
2.35 p.m.
LORD CROOK: 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 whether they are satisfied that the injection into animals, prior to slaughter, of the enzyme preparation papain—with a view to securing that the meat of the animals appears artificially to be tender—is in the interests of the public.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, papain is a natural substance occurring in the juice of the papaw fruit, which has been widely used for a very long time in the preparation of food. I know of no reason to suppose that meat treated with papain under the process to which the noble Lord refers is in any way harmful to the consumer. My right honourable friend is, however, referring the matter to the Pharmacology Panel of the Food Additives Sub-Committee of the Food Standards Committee, for advice. He has also asked the Food Standards Committee, who are now engaged on a general review of the labelling of food, to consider whether any special labelling is desirable on meat which has been treated in this way.
LORD CROOK: My Lords, while thanking the noble Lord for his Answer and for his ability in getting his tongue round all the words involved in the Answer, may I ask whether he is aware that the meat trade itself is anxious to have some form of regulation and
126
whether he has had representations to that end?
LORD ST. OSWALD: No, my Lords, we have had no direct representations yet. But we have acted, and I hope that the meat trade, if they were considering such representations, will feel that they have been anticipated.
LORD PEDDIE: My Lords, is the Minister aware that, although it may be recognised that there is no harmful effect so far as food is concerned, there is a prejudice to the consumer because apparently this substance is being used to tenderise artificially poor meat so that it can be sold as good meat?
LORD ST. OSWALD: The noble Lord is right in saying that the only effect of this is to tender the meat. It does not alter its appearance in any way, and therefore it does not make it more attractive to a potential purchaser in the shop.
BARONESS SUMMERSKILL: My Lords, will not the noble Lord agree that the only two items of food we consume to-day which have not been treated in some way are fresh fish and wild fruits?
LORD ST. OSWALD: I have not studied the question, and I do not know whether that statement is true, but, even if it were so, I am not quite sure what the noble Lady is leading to.
BARONESS SUMMERSKILL: What the noble Lady is leading to is that we must be vigilant in these matters, because a number of items of food that people buy believing they are absolutely fresh, unadulterated and untreated are now revealed to have been subjected to some treatment. When the noble Lord is asked whether that means that the food becomes dangerous, he comes to the House and says he does not know, and will find out.
LORD ST. OSWALD: I do not know whether the noble Lady is claiming that treatment of food is in itself objectionable, whether it is harmful or not, because with that I would not agree.
LORD AMWELL: My Lords, can the Minister say whether there is any chance of the meat trade and the food trade generally finding some chemical way of restoring the old-fashioned flavour to foods which some of us miss so much?
LORD ST. OSWALD: I personally should be delighted if they could.
LORD SHACKLETON: My Lords, is there in fact no control of any kind before this sort of thing is done? I am one of those who have had very anxious representations, both from the meat trade and from doctors who are concerned about this. Is there no way in which this procedure is submitted for approval before it is tried out?
LORD ST. OSWALD: No, my Lords, not in this country; and in fact, so long as it is harmless, I cannot see why there should be.
LORD CROOK: Surely the Minister is assuming it is harmless. That is the whole point of the Question I put, at the request of doctors and meat people.
LORD ST. OSWALD: I would rather assume innocence before guilt than the other way round.
LORD LATHAM: My Lords, would the noble Lord not agree that the resources of private enterprise are inexhaustible?
LORD ST. OSWALD: I should like to think so, and I agree with the noble Lord.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I might perhaps bring this discussion to an end by asking whether the Department proposes to publish regularly reports of the Food Additives Committee.
LORD ST. OSWALD: My Lords, I have no reason to alter the practice at the moment, which is not to publish publicly but to make available such reports.
EARL ALEXANDER OF HILLSBOROUGH: I think it is high time, considering that anxiety has been expressed by the public, that the Department gave immediate consideration to the publication of regular reports. And perhaps here the Minister for Science might have a contribution to make.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, the question of publication is not for me, but any scientific implications I certainly would consider.
LORD HAWKE: My Lords, are Her Majesty's Government aware that in those countries where papaw is grown, when meat is served it is customary to start the meal with a slice of papaw? Is this also said to have any harmful effects?
LORD ST. OSWALD: I have enjoyed it myself, and we are grateful to my noble friend for drawing the attention of this practice to the House.
LORD DOUGLAS OF BARLOCH: My Lords, is it not true that this is an entirely novel procedure, and that, although papain has been used in the manner described, it has never before been injected into living animals, as a result of which many chemical transformations might take place? Secondly, has the noble Lord considered that to sell meat treated in this way would be an offence under the Food and Drugs Act for not giving to the consumer the "nature, substance and quality" which he has demanded?
LORD ST. OSWALD: My Lords, it is quite true that this is a novel process in this country in that it has only recently been introduced, but it is not a novel process, for instance, in the United States of America where it has been carried on for some years with no harmful effects that the Administration has been able to discover. As to the offence, I am not sure whether the noble Lord is having regard to labelling, but in fact the suppliers of this processed meat wish it to be labelled, and they provide a label for that purpose.
LORD AMWELL: Is this practice carried on in Scandinavia?
LORD ST. OSWALD: I have no idea, but if the noble Lord wishes to know I will do my best to find out.
LORD AMWELL: I should like to know.
LORD PEDDIE: My Lords, is the noble Lord aware that there is only one firm in this country, an American firm, that goes in for injections, and that it is recognised by the butchers of this country that, unless the animal is killed within a matter of a few seconds following the injection, it results in indescribable cruelty and pain, because of a breakdown of the tissues immediately

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following the injection? In conducting the examination, that particular aspect should also be considered.
LORD ST. OSWALD: No, my Lords. My information is to the exact contrary. My information is that the substance has no painful or other effects on the animal and is in fact excreted by it.
LORD PEDDIE: By the time it is excreted the animal is dead.

INSPECTIONS OF COMMERCIAL VEHICLES
2.43 p.m.
LORD SHEPHERD: 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 action they have taken to increase the number of inspections of commercial vehicles following the acceptance of the Motion on January 30, 1963.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, when this subject was last raised in your Lordships' House, and I accepted the Motion by the noble Lord, Lord Shepherd, I emphasised that, because of the many factors to be taken into consideration and problems to be resolved, it would be some considerable time before I was in a position to lay before your Lordships definite proposals for a scheme for regular inspection of the heavier type of goods vehicles which are not included in the existing periodic testing scheme. We have made progress but have not yet reached a stage at which precise plans can be formulated. I hope to be able to be more informative later in the year. In the meantime, the reduction to five years of the age of vehicles subject to annual test, which came into effect on April 30, has increased the numbers of goods vehicles of up to 30 cwt. unladen weight which are now subject to annual inspection; and we are of course continuing with the spot checks of goods vehicles generally.
LORD SHEPHERD: My Lords, I thank the noble Lord for his reply. I am pleased to see that some advance has been made, although I think the
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noble Lord will agree that it is a limited advance. I think the noble Lord will also agree that the annual report of the licensing authorities, to which I referred in the debate, indicated that a mere 8 per cent. of the commercial vehicles on the roads in this country were inspected, and that approximately 9 per cent. of those vehicles that were inspected were so bad that they had to be taken off the road. I think—and I hope the noble Lord will agree that this represented a serious state of affairs; and the Government indicated that, although it would take some time, regular inspections would be brought about. But the purpose of my Question, to which the noble Lord did not really reply, is to ask what increase has taken place. Can the noble Lord say whether there has been an increase in the number of examiners from 320 in 1961? Can the noble Lord say to what extent an increase has taken place?
LORD CHESHAM: My Lords, I may say that, so far as I am aware, no increase has yet taken place in the number of examiners. We have tried to treat this matter in the manner which the noble Lord desired in his Motion, and to produce an effective scheme. I am bound to repeat to the noble Lord—I know he is aware of this point already—that this matter entails a great deal of work in the assessment of facilities and the amount of work involved, and that is where we are making progress. I hope that quite soon we shall reach the stage of consultation with the interests involved.
LORD SHEPHERD: But would it not be desirable to increase the scope and the extent of this examination by increasing the number of examiners, using the same facilities that are available?
LORD CHESHAM: My Lords, I will certainly look into that point. If I am not able to answer it satisfactorily now, as evidently I am not, I will most certainly look at that point. I would just add that the figure of 8 per cent., which the noble Lord quoted from the Commissioners, does not represent the whole of the picture, because it does not include those vehicles under 30 cwt. which are examined by other means, and I am not sure that it includes the spot checks, either.
LORD LUCAS OF CHILWORTH: My Lords, may I ask the noble Lord this question? During the debate to which he has referred—unfortunately I was on the other side of the world when it took place—he gave an assurance that the Ministry of Transport were progressing actively with a plating scheme to denote the maximum load which a commercial vehicle would be by law allowed to carry. Is he aware that still the greatest inefficiency factor in the mechanical part of a goods-carrying vehicle is the overload it carries, and that most commercial vehicles are still grossly overloaded? Could the noble Lord tell the House what progress is being made with the plating scheme, which he propounded then, to denote the maximum permissible load of a goods carrying vehicle?
LORD CHESHAM: My Lords, offhand I cannot, because it is not a matter that is contained in the Question of the noble Lord, Lord Shepherd. If the noble Lord will put down a Question about it, I shall be delighted to answer it.
LORD HAWKE: My Lords, would my noble friend see that there is an inspector stationed on the Exeter-Launceston road, because the commercial vehicles using that road are rarely able to climb the narrow winding hills at reasonable speed?
LORD CHESHAM: My Lords, it sounds as if there may be other considerations involved in this, but I will certainly consider what my noble friend has said.

MEDWAY CONSERVANCY BILL
Read 2a, and committed to an Unopposed Bill Committee.
STATUTE LAW REVISION (SCOTLAND) BILL [H.L.]
Read 2a (according to Order), and referred to the Joint Committee on Consolidation Bills.

STATUTE LAW REVISION BILL [H.L.]
House in Committee (according to Order), on Report from the Joint Committee on Consolidation Bills.
House resumed; Bill reported without amendment; Report received.

BRITISH MUSEUM BILL
2.50 p.m.
Order of the Day for the Third Reading read.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, I have it in command from Her Majesty the Queen to signify to the House that Her Majesty, having been informed of the purport of the British Museum Bill, has consented to place Her Majesty's interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purpose of the Bill. I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.—(The Earl of Dundee.)
LORD SHACKLETON: My Lords, before we leave the Bill, is the noble Earl in a position to answer the question that was raised during the Report stage on an Amendment by the noble Lords, Lord Denning and Lord Silkin, to enable two pieces of paper to be temporarily joined together for research purposes?
THE EARL OF DUNDEE: My Lords, my recollection is that the Amendment was defeated by your Lordships on a Division.
LORD SHACKLETON: It certainly was defeated, but the noble Earl gave it as his opinion that it would be possible for it to be done under Clause 4. I thought he gave an undertaking to look into this matter.
THE EARL OF DUNDEE: No, my Lords; that was a matter raised by the noble Lord, Lord Hurcomb, with which I agreed. I thought that it would be possible to lend it under the clause to which the noble Lord has referred.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

LONDON GOVERNMENT BILL
2.52 p.m.
Further considered on Report (according to Order).
Clause 9 [General duty of Greater London Council with respect to road traffic and abolition of London Traffic Area and Traffic Advisory Committee]:
LORD SHEPHERDmoved, in subsection (2)(ii) after "10(2)(b)," to insert "10(8)". 'The noble Lord said: My Lords, I beg to move Amendment No. 67. This could in some ways be regarded as a drafting Amendment, and it is in that sense that I wish to move it. Clause 9, subsection (2), sets out a number of powers that the Minister of Transport is adopting or retaining from previous legislation, and it is quite clear from the warding of that part of the clause that these powers would be used only as a last resort. Under Clause 10, subsection (8), we have the position that the Greater London Council and the Minister of Transport will have concurrent powers in relation to speed limits on roads other than restricted roads in the Greater London area. Now during the Committee stage the noble Lord, Lord Chesham, indicated that it was the Minister's intention that this particular power, contained in Clause 10(8), should be a reserve power. He said, on May 16, in column 1501 of the OFFICIAL REPORT [Vol. 249 (No. 85)]:
"The idea is—and I am happy to give the noble Lord the assurance he seeks—that this is intended to be entirely a reserve power …"
It is true that he goes on to give reasons why this particular part of the Bill should not be included with other reserve powers; but I shall later be moving an Amendment to retain the present position of the Minister.
I feel, in the interests of the Greater London Council, and also, I think, of the Minister of Transport, that since there are these particular powers in relation to roads inside the Greater London area, for which the authority will be the traffic authority, the powers should be clearly indicated and clearly defined as reserve powers. If there is any purpose in applying the definition of "reserve powers" to various provisions of the Bill, I should have thought that this would apply equally, using the words of the noble Lord, Lard Chesham, that it is the Minis-
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ter's intention that they should be reserve powers, to seeing that there is uniformity, and that Clause 10(8) should then be included in that part of Clause 9(2). With those few words, I commend this Amendment to your Lordships' House.
Amendment moved—
Page 10, line 14, after ("10(2)(b),") insert ("10(8)").—(Lord Shepherd.)
LORD CHESHAM: My Lords, the noble Lord, I am sure, will understand if I deal with his proposed Amendment under two heads. I hope he will not think I am trying to be derogatory in any way when I deal with the Amendment on its individual merit first, because the unhappy position is that, were I to accept this Amendment, it would in fact not mean anything, simply because the Minister does not derive any powers from Clause 10, subsection (8). The reference to his powers in that subsection is purely to draw the attention of anyone who may be reading the Bill to that fact. So to that extent the Amendment on its own, if it were inserted in the Bill, would in fact be of no effect at all. If it was inserted, it would perhaps be, in a sense, confusing, indicating to someone who was studying the Bill that the Minister's power was subject to Clause 9, whereas in fact it would not be. Therefore, I do not think that is quite right.
I do not want to make a long story or heavy weather of this matter, but I think I should remind the noble Lord and your Lordships of the argument that I used before: that this is not a matter of uniformity of power for its own sake. The object of the Minister's having overall control of speed limits throughout the country is to try to achieve uniformity of application of speed limits everywhere. There has been, your Lordships will recall, a great deal of criticism as to the application of speed limits throughout the country. During the passage of what is now the Road Traffic Act, many of your Lordships called attention to the desirability of having speed limits properly organised, and it is in the interest of this that I think it is desirable for the Minister to retain the power. I think that must be right, and I hope that, if I repeat the assurance that subject to that, the intention is definitely that this power should be used as a reserve power, the noble Lord will not then wish to press this Amendment.
LORD SHEPHERD: My Lords, before the noble Lord sits down—I put it that way because he may want to reply to this point—I would point out that he said he wishes to see uniformity throughout the country. That is a point which we would not dispute. But, we are setting up the Greater London Council as the traffic authority, and if the Minister were to use this reserve power we should then assume that he would be using it contrary to the wishes of the Greater London Council, because in this particular case the Greater London Council would have concurrent powers. Therefore, if the Minister were exercising this power, we would assume it was only because the Greater London Council were not willing to make the particular order. If we had a case where we wanted to see uniformity, and if it were at variance to the advice and wishes of the traffic authority, are we to understand that in that case, in order to obtain unformity, although it would be against the advice of the Greater London Council, the Minister of Transport would, in spite of that, exercise this power?
LORD CHESHAM: My Lords, I think it is perfectly right, particularly in view of the strong volume of opinion I know to exist on this matter, that the Minister ought to have the ultimate authority. I know that the Greater London Council will be a very large and, indeed, very responsible authority; but, all the same, it remains only one of a number of authorities in this country, and the Minister should have this ultimate sanction, even though, as is quite possible, it may never be used.
LORD SHEPHERD: My Lords, there is one further point—I am sorry to keep jumping up. Am I to understand that the Minister could make this order without having to come and lay the order before this House?
LORD CHESHAM: Yes, my Lords, I think that is correct.
LORD SHEPHERD: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.0 p.m.
LORD CHAMPION LORD CHAMPION moved, after subsection (2) to insert:
"() If it appears to the Council that any action taken by the Minister of Transport under any of the provisions mentioned in
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paragraphs (a) and (b) of the preceding subsection is detrimental to the Greater London Development Plan, the Council may apply to the Minister of Housing and Local Government for a public local inquiry into such action and that Minister shall either hold an inquiry accordingly or certify to the Council that in his opinion the public interest requires that no such inquiry be held."
The noble Lord said: Subsection (2) of Clause 9 places upon the Greater London Council the duties of traffic regulation and, jointly with the Minister of Transport, the initiation of experimental traffic schemes in Greater London together with other matters contained in Clauses 10 to 19 of this Part of the Bill. It also restricts the power of the Minister to give to the Council a direction under subsection (2)(c)(i) or to exercise his power under paragraph (c)(ii) of this subsection
"unless he is satisfied, having regard to any matters appearing to him to be relevant, that the Council's duty aforesaid is not being satisfactorily discharged by the Council and that it is necessary for him to do so in order to secure compliance with that duty."
Our Amendment visualises the possibility of disagreement arising between the Council and the Minister on whether or not any direction given by the Minister offends against the development plan adopted by the Greater London Council. I cannot imagine that this direction visualised by the Minister will have to be given very often, if indeed at all.
I certainly hope that such a direction would not be given, for I believe that it is unlikely that the council will fail satisfactorily to discharge their duties to such an extent as to cause the Minister to give any such direction. Most of the differences between the Minister and the Greater London Council about the exercise of the Council's functions under this and other clauses of this Bill will, between a sensible Minister and a sensible Greater London Council, be ironed out as a result of discussion between the Minister and the Council. The noble Lord, Lord Hastings, himself said on Committee stage much the same as I am saying now in this connection; but the Minister's reserve power is included in this clause to meet the event of such a disagreement not being removed as a result of discussion. That is the reason, I take it, for the inclusion of these powers for the Minister of Transport. Such a disagreement would take place only in the circumstances in which both Minister and

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the Council felt 'they were disagreeing on a major principle. Those would be the only circumstances in which the Minister would be expected, and would expect, to have to use his powers.
It seems to us that, in the event of such a disagreement taking place on a matter affecting the Greater London development plan, this ought to be finally resolved, not by the Minister of Transport himself giving a direction under this subsection (2)(c)(ii), but rather by reference to the Minister of Housing and Local Government; and that he should, as a result of its being referred to him, hold a public inquiry at which all the bodies interested could appear and the inspector could make a recommendation. We put this point on the Committee stage and the noble Lord, Lord Hastings, referred quite rightly to the concept of the corporate responsibility of the Cabinet. He asked, "What would happen if the Minister of Housing and Local Government held an inquiry under the terms of the Amendment? What would happen as a result of that inquiry? Is the Minister of Transport then to be overruled by the Minister of Housing and Local Government?"
I must admit that I thought that was a fair question put to the Committee by the noble Lord, Lord Hastings, in reply to our Amendment. But my reply to his question is that the Minister of Housing and Local Government would merely be asked to act as an arbitrator between the Minister of Transport, on the one hand and the Greater London Council, on the other. The Greater London Council in this regard has a dual function and capacity, that of being the initiator of the London development plan, on the one hand, and having traffic regulation powers, on the other; while the Minister of Transport has the sole function in this connection of traffic only.
To act as arbitrator only after both the Minister of Transport and the other interested bodies have deployed their arguments before a public inquiry, would not appear to us to be out of place and would not offend the concept which the noble Lord, Lord Hastings, put before the Committee at Committee stage. I should have thought there was nothing particularly new about any Ministry's officers appearing before a local inquiry and putting the Minister's point of view to that inquiry. If it has not been done in the
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past, I can see no reason why it should not be done under the procedure that we set out in the Amendment. I hope that in the interval between the Committee stage and this Report stage the Minister has had another look and will be prepared to accept the Amendment which I am now moving. I beg to move.
Amendment moved—
Page 10, line 21, at end insert the said subsection.—(Lord Champion.)
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY of HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS): My Lords, the noble Lord, Lord Champion, will I hope be glad to hear that in the interval he has referred to the Minister has had another look at this matter and considered it and, as I hope to explain to the noble Lord, has found that this Amendment is in our opinion not necessary. The noble Lord himself said that this event is most unlikely to happen and it would occur only in absolutely fundamental disagreement in which the Minister of Transport felt it necessary to exercise his reserve powers after all forms of consultation had broken down. But then we come to the difficulty which the noble Lord put forward and which I made my main argument in Committee stage, that there would be a duty put upon the Minister of Housing and Local Government, if he is required by the Greater London Council, to hold a public inquiry into the actions of the Minister of Transport; and, however the noble Lord wraps it up, it is very difficult to get away from the fact that there would simply be a tension and a conflict between two Ministers of the Crown, both being also Members of the Cabinet.
What the noble Lord is in fact talking about is the question of administration. If the Minister of Transport were to exercise his reserve powers, or if he were thinking of doing so, in a way which might affect the Greater London development plan there would certainly be consultation at the official level between his Department and that of my right honourable friend the Minister of Housing and Local Government; and the matter should be smoothed over at that stage. If it were not so smoothed over it would mean there had been a breakdown in the usual liaison which,

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as noble Lords opposite knew very well goes on in Whitehall circles. If, however, that which I think is unlikely should happen, I think the whole matter can again be looked after in an administrative sense. But I would direct the noble Lord's attention to Clause 87. Subsection (1) says:
"Any Minister may cause a local inquiry to be held for the purpose of any of his functions under this Act in any case where there is no duty and no power apart from this section to hold an inquiry."
So that, if the worst came to the worst, and the duties of the Minister of Housing and Local Government were affected by the sort of action the noble Lord envisages, he could ask for a public inquiry.
I do not think that that is ever likely to happen: it would certainly be undesirable. I imagine that any difficulty could be smoothed out administratively between the Departments concerned; but, as I say, if anything went wrong, a public inquiry could be held under this clause. Therefore, I contend that it would be undesirable to insert this Amendment, which puts an actual duty on both the G.L.C. and the Minister of Housing, when the matter could be dealt with administratively and, in the last resort, without undue fuss under Clause 87. There is nothing to prevent the G.L.C. from applying to the Minister, without special instruction to do so. They can always make their complaints and no doubt will do so, if they feel it necessary. I hope that the noble Lord will appreciate that his Amendment is not necessary.
LORD CHAMPION: My Lords, I think that between Committee stage and Report, the Minister has "done his homework", and has improved upon the reply he gave me on Committee. We hear from him that inevitably there would be consultation between the two Ministers. I notice that my noble friend Lord Morrison of Lambeth sotto voce expressed some doubt about the present Government in this connection, but I accept from the noble Lord, Lord Hastings, that this matter can be dealt with in the way he suggested. I accept completely the explanation he has given and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MORRISON OF LAMBETH: My Lords, assuming that the noble Lord opposite will go through with Amendment No. 69A, I do not propose to move No. 69.
LORD CHESHAM: My Lords, I am grateful to the noble Lord, Lord Morrison of Lambeth, for taking that reasonable view, and I hasten to assure him that I have every intention of going ahead with the Amendment in my name. After the debate on the last occasion, we considered carefully what had been said by the noble Lord and others, including the noble Lord, Lord Shepherd, and my noble friend Lord Conesford. We felt that it was not sufficient to leave the G.L.C. completely alone, to set up an organisation to perform a function which The Times has rightly described as
"the biggest and most urgent challenge with which the new Council will be presented."
Furthermore, it is a function which has never previously been performed by a local authority in London. Since 1924, it has been the function of the Minister of Transport, who, because of his long experience, and the fact that traffic problems have shown up earlier and more severely in London than elsewhere, has learned the importance of traffic management techniques. That is not always generally realised, as one sees from the small number of local authorities over the country who have sections practising traffic engineering techniques. Though the G.L.C. will be a big authority, it will none the less still be a local authority. It may be that its size is another good reason why it should benefit from the advice and experience which the Minister has to give. I think that the Minister would be failing in his duty if he did not give the G.L.C. the benefit of his advice and try to do whatever he can to see them away on this large task. The more assistance he can give, stopping short of anything like the compulsion to which noble Lords objected on Committee, the more likely they are to avoid mistakes. This makes it all the more unlikely that the Minister will have to use his reserve powers to put them right. I hope that I am right in thinking that there is a good deal of practical merit in doing it this way. I beg to move.
Amendment moved—
Page 10, line 23, leave out from beginning to second ("the") in line 24 and insert

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("consult with the Minister of Transport with regard to the administrative arrangements to be made by the Council for")—(Lord Chesham.)
LORD MORRISON OF LAMBETH: My Lords, this Amendment is an improvement on the text of the Bill, which requires the arrangements to be made "to the satisfaction of the Minister of Transport". We regarded this as derogatory to the principle of local self-government. The Amendment requires that the G.L.C. shall consult with the Minister as to the arrangements to be made, but, as the noble Lord said, the Council has the last word. But the best thing is that the two sides should try to agree with one another. The Parliamentary Secretary said that the Minister of Transport, in the course of exercising the enormous powers that he has, especially in Greater London, had realised the importance of these functions. I quite agree. He has also realised, to quote the title of one of Oscar Wilde's plays, "The importance of being earnest."
A great deal of publicity has gone along with the exercise of these powers. I understand the need for them, because of the various highway authorities, but I have never liked this principle of conferring upon a Minister all the powers of traffic regulation and a great many highway powers, which has occurred in the Greater London area much more than in provincial cities. I must admit that it started in 1924, under the minority Labour Government, when my late friend Mr. Harry Gosling was Minister of Transport and when, under the London Traffic Act, there was set up a Traffic Advisory Committee representative of the local authorities, with the final word with the Minister. It meant that the civil servants who advised the Minister were also the civil servants who advised the Advisory Committee, so it was a little bit of a farce. But since then, especially under the present Minister of Transport, the Minister's powers have increased enormously.
I have already described the situation as converting London into something like a Crown Colony, an area which is governed not by its local councils but by a Minister in Whitehall. But this Amendment which has been moved by the Parliamentary Secretary is a material improve-
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ment on the Bill as it stands. I agree that the Minister can give the Council a good deal of advice and aid, arising out of his experience, and it will be up to both him and the Council to be reasonable. I do not see any reason why, in the end, they should not agree. Anyway, this is a much better situation than requiring them to submit proposals to the satisfaction of the Minister. This leaves the situation open for discussion between equals, leaving the last word with the local authority, though I have no doubt that they will be able amicably to settle the matter, provided the Minister is reasonable and does not try to dominate them or dictate to them. I am obliged to the Parliamentary Secretary for tabling this Amendment, which has enabled me not to move mine, and I hope that the House will accept it.
On Question, Amendment agreed to.
Clause 10 [Traffic regulation in Greater London]:
3.22 p.m.
LORD SHEPHERDmoved, in subsection (2), to leave out "made by statutory instrument instead of by". The noble Lord said: My Lords, as I was reading the Bill in the early stages I was rather intrigued with the words which I seek, in the first instance, the delete from the Bill. Referring to the powers of the Minister of Transport under Section 34, subsection (2) says that they
"shall be exercisable by order made by statutory instrument instead of by regulations …"
In the first instance, I was told that there was little significance in these words. I received a full letter from the noble Lord, Lord Chesham, for which I am grateful, and it is now obvious that these words mean quite an important change from the law as it at present stands. Under Section 34 of the Road Transport Act, 1960, the Minister may make orders and regulations, subject to the Negative Resolution procedure in both Houses of Parliament. What is proposed by the Government's wording in this Bill is that the Minister may make orders, following the Road Traffic Act, 1960, but will not have to lay them before Parliament. Therefore, in regard to London we have a change in the position, in that the Minister will be able to make a number of orders without seeking Parliament's

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approval for them, as he must at the present time.
I would refer your Lordships to Clause 10(1). That says that:
"… the Greater London Council … may by order make provisions for controlling vehicular and other traffic (including foot passengers) on roads in Greater London, being—

(a) roads other than trunk roads; or

(b) trunk roads with respect to which the Minister of Transport has consented to the making of the order …"

transferring responsibility to the Greater London Council. Right through the procedure of the Bill the Government have made it one of their main planks that we should have a local authority of a size and importance, and with such facilities, as would enable it to undertake the strategic traffic planning of the main highways in and around London. We on this side of the House have always recognised that something special had to be done in London. Obviously there must be an authority with the power to act, but it should be an authority that is subject to some form of democratic control.
In the case of the Greater London Council it is clear (though it has been deleted from the Bill) that the Minister has in mind—and I do not think we should disagree—that there should be some senior executive within the Council responsible for traffic—and whether he is to be a director of traffic, or otherwise, we will not quibble. He would be a person upon whom the main responsibility would lie. He would be required from time to time to make orders, perhaps, in the first case, temporary, and perhaps in many cases of a permanent nature. That executive would have to obtain the approval of the Greater London Council, with its 100 members, who will have to seek every three years the support and authority of an electorate from what is a Parliamentary constituency. Therefore, we have what can be recognised as a highly democratic local government: we have an executive answerable to an elected local authority, and control over the executive.
If your Lordships look at Clause 10(2) you will find that the Minister of Transport will have power, first of all, in respect of trunk roads in Greater London
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—and I would not question that, because this is a responsibility that the Minister wishes to retain in the first instance. But under paragraph (b) he takes power
"for the revocation or variation, after giving notice to the Council and, if he thinks fit, after holding a public inquiry, of any order by the Council under subsection (1) of this section".
In other words, when this executive of the Greater London Council has made an order, and it has been approved by the 100 elected members of the Council which the Government are setting up, the Minister, according to the Bill, can revoke and vary without in any way being answerable to either House of Parliament. I suggest that this is wrong, and it is not our conception of democratic government.
What I propose is to delete the words referred to in my Amendment No. 70, and to insert in the appropriate place the new subsection in my Amendment No. 70B. This would mean that any order or direction made by the Ministry of Transport under subsections (2) to (7) would be made or given by statutory instrument, and would be subject to annulment in pursuance of a Resolution of both Houses of Parliament. I should like to stress again this important fact. You have perhaps two executives—the director of traffic in the Greater London Council and the Minister of Transport. In the case of the director of traffic, he requires the support, approval and authority of the Greater London Council; but in the case of the Minister, he can revoke and vary the orders that have been made by this new elected authority without having to come to the Houses of Parliament for approval. I suggest that that is not right and it is not the basis of good local government. If the Minister is to use his powers (I do not believe that he would use them a great deal; hut, whether he does or not, the principle is there), and if he is to instruct in a way that is at variance with the decision of the elected democratic local government of London, then I maintain that he should require the authority of both Houses of Parliament. I beg to move.
Amendment moved—
Page 11, line 29, leave out from ("order") to ("and") in line 30.—(Lord Shepherd.)
LORD CHESHAM: My Lords, again the noble Lord will understand if I do

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not devote any time to what I am advised is a drafting defect in the Amendment, because it is the principle of the Amendment to which we should devote ourselves. The way I think one has to look at it is that it is now accepted that traffic regulation is essentially a matter for local government. That, to a certain extent, was the gist of the noble Lord's speech. That has certainly been the case outside London, and under this Bill there will be what amounts to a local authority responsible in London, subject to the retention of certain reserve powers by the Minister.
I suppose it must be true to say, regarding anything for which the Minister is directly responsible, for which he is to an extent answerable to Parliament, that the Government take the view that on the whole Parliament should not be troubled with the detail of specialised technical matters connected with what is really a minor Ministerial power, especially when the Bill lays down, as it does in the clause quoted by the noble Lord, criteria for the exercise of the power. I am talking about Clause 9(2). It is true that regulations at present made by the Minister are laid before Parliament and are subject to Negative Resolution. I cannot trace that anyone has ever prayed against them. I cannot prove that, but they certainly have not in recent years.
If the noble Lord will forgive me for being a little long, I think it is rather important to deal in some detail with the important matter that he has raised. To start with, I think it must be implicit that, if you hand over functions from a Minister of the Crown to a local authority, Parliament loses a measure of control which it had before. By the handing over of functions from the Minister to the G.L.C., that control will in fact be lost on many roads in London. I think everyone is quite happy about that. In addition, I am grateful to the noble Lord for saying that he accepted the position so far as it exists in respect of trunk roads, because that is not a very big problem. As we discussed last time, it is not expected that there will be a large mileage in the area.
Could we look, then, rather specifically at what is left, and take the points one by one? First of all, may I take that to which the noble Lord called our attention in subsection (2)(b)? That is the
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power to revoke or vary orders which the G.L.C. may make. The power the Minister has to vary or revoke those orders is the same under this Bill as he has always had to revoke or vary orders made by traffic authorities outside London. The reason why he has that power results mainly from the need to protect third parties against some of the effects of traffic schemes that might crop up. The kind of thing I mean is the effect of loading restrictions on trade; one-way schemes on bus routes; of heavy traffic on amenity; of busy traffic on safety, and of waiting restrictions on frontagers. The Minister has seldom had to use his power outside London, and when he has he has done it by means of making an order which is not laid before Parliament. I do not see that there are strong grounds for a difference between the situation inside and outside London. It is in no way to be interpreted as being derogatory to the authority that he should be able to do it himself, and nobody wishes in any shape or form to use a power which is, in the words of my noble friend Lord Conesford, "insulting the authority". Far from it. What we are trying to do is to get the situation right.
Now we come to the next power, which is to be found in subsection (7)(b); that is, the power to direct the G.L.C. not to make an order or kind of order. In principle that goes no wider than the power to revoke or vary. But it seems sensible that the Minister should be able beforehand to prevent an order from being made, rather than have to mess about trying to undo it afterwards, and should be able to prescribe in advance the types or features of orders which would be objectionable. I have in mind such things as orders which did not give the police adequate discretion, or an order that gave privileges too widely, perhaps not only to disabled persons and some doctors, but extended to residents, or even councillors. It seems more sensible that the nature of the order should be laid down in advance, rather than the Minister's having to revoke or vary a series of orders individually. I do not see that the grounds for direct Parliamentary control in that respect are any stronger than in the case of revoking or varying orders.

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I come next to the power in subsection (7)(a), the power to direct the G.L.C. to make a particular order. That is a somewhat different power, but the Minister will require it when he needs to be able to intervene, perhaps on the representations of a London borough or of the police; when he needs to see that something is done in the national interest if it happens to conflict with the regional interest—I have in mind such things as lorry routes, which are of considerable importance—or perhaps when he needs to carry out an experiment in connection with his national responsibility for road safety. Those, again, seem to me to be questions of detail which the Minister ought to be able to handle without having to go to Parliament for them. I think it is even possible that, if there were to be provision for the Negative Resolution procedure, it might be a source of considerable delay and some uncertainty, because a statutory instrument under that procedure is not positively secure until 40 days after it has been laid. If the Minister found it necessary to act during a Recess, the 40 days would not begin until after Parliament resumed. In the meantime, the matter would probably be left in abeyance, which would not be desirable.
There is in subsection (2)(c) the power to make an order in the event of the default of the G.L.C. and their failure to comply with a direction to make an order. This is a purely ancillary power, intended to make sure that the G.L.C., simply by refusing to comply with a direction, do not bring the Minister to a halt. This is very much a "last ditch" power. Finally, in subsection (7) there is the power to direct the G.L.C. as to procedure. This again is similar to the Minister's power to direct local authorities outside London as to the procedure they shall follow when they make their traffic orders. It would be used if necessary in London, as it has been used outside, in such matters as
requiring adequate public notice to be given of the introduction of schemes and to consult people before the order is made.
I feel that this is not a range of activities which need necesarily be brought directly under Parliamentary control. I am afraid that I have been a little long on this Amendment, but it is difficult to be shorter and to cover the ground. Perhaps, in view of what I have said, the noble Lord may agree that his Amendment is, as I think, unnecessary.
LORD MORRISON OF LAMBETH: My Lords, I thought my noble friend Lord Shepherd made a strong case for the Amendment that he has moved, and the Parliamentary Secretary has gone in some direction, rather to the point of principle, of making a case for the repeal of the Statutory Instruments Act, because some of these things are really of some importance. Moreover, the Minister has power to undo what the Greater London Council have done, to direct them to undo it, and, if they do not, to make a regulation to compel them to do so. He may be right, but it is a serious thing, and the Greater London Council and the people of London have a right, I should have thought, in that case to go to Parliament and ask their Members of Parliament—I should say, Members of the other place because we do not interfere in these things, although we could—whereby the House of Commons would pray to Her Majesty to annul the order or regulation, as the case may be. Therefore, although the Parliamentary Secretary has put his case persuasively, as he usually does, I do not think he has made a case against this Amendment, and I am inclined to think that we ought to have a record of the views and therefore to divide the House.
3.44 p.m.
On Question, Whether the said Amendment (No. 70) shall be agreed to?
Their Lordships divided: Contents, 28; Not-Contents, 76.

CONTENTS

Addison, V.

Darwen, L.

Macpherson of Drumochter, L.

Alexander of Hillsborough, E.

Douglas of Barloch, L.

Morrison of Lambeth, L.

Amwell, L.

Greenhill, L.

Samuel, V.

Archibald, L.

Henderson, L.

Shepherd, L.

Attlee, E.

Latham, L.

Stonham, L.

Burden, L. [Teller.]

Lawson, L.

Summerskill, B.

Burton of Coventry, B.

Listowel, E.

Walston, L.

Champion, L.

Longford, E.

Williams, L.

Chorley, L.

Lucan, E. [Teller.]

Wise, L.

Crook, L.

NOT-CONTENTS

Ailwyn, L.

Ferrers, E.

Meston, L.

Albemarle, E.

Forster of Harraby, L.

Mills, V.

Alexander of Tunis, E.

Fortescue, E.

Milverton, L.

Allerton, L.

Gage, V.

Molson, L.

Ampthill, L.

Goschen, V. [Teller.]

Montgomery of Alamein, V.

Atholl, D.

Grenfell, L.

Munster, E.

Beauchamp, E.

Hamilton of Dalzell, L.

Newton, L.

Bossom, L.

Hastings, L.

Ormonde, M.

Boston, L.

Hawke, L.

Raglan, L.

Carrington, L.

Hayter, L.

St. Aldwyn, E. [Teller.]

Chelmsford, V.

Hemphill, L.

St. Just, L.

Chesham, L.

Hereford, V.

St. Oswald, L.

Cholmondeley, M.

Home, E.

Salisbury, M.

Clwyd, L.

Horsbrugh, B.

Saltoun, L.

Coleraine, L.

Howe, E.

Sandford, L.

Colyton, L.

Ironside, L.

Sandwich, E.

Crathorne, L.

Jellicoe, E.

Sinclair of Cleeve, L.

Denham, L.

Jessel, L.

Soulbury, V.

Derwent, L.

Lansdowne, M.

Spens, L.

Devonshire, D.

Long, V.

Stonehaven, V.

Dilhorne, L. (L. Chancellor.)

Lothian, M.

Stuart of Findhorn, V.

Dudley, L.

Mansfield, E.

Swinton, E.

Dundee, E.

Mar and Kellie, E.

Twining, L.

Elliot of Harwood, B.

Margesson, V.

Ward of Witley, V.

Exeter, M.

Massereene and Ferrard, V.

Westwood, L.

Fairfax of Cameron, L.

On Question, Amendment agreed to.

3.50 p.m.
LORD CHESHAM LORD CHESHAM moved to add to subsection (4)
"and with any other council, being a London borough council or the Common Council, within whose area any road affected by the proposed order lies or whose area appears to the Greater London Council likely to be affected by that order."
The noble Lord said: My Lords, these Amendments will oblige the Greater London Council, before they make a traffic order under Clause 10, to consult with the borough in whose area is the road affected by the order and the council of any other borough likely to be affected by that order. The noble Lord, Lord Champion, in Committee moved an Amendment which had this object in mind, but it went further than that, and I argued at the time that it went too far. We had considerable discussion and the noble Lord withdrew his Amendment after I had promised to consider a suggestion by the noble Lord, Lord Walston, that the G.L.C. should be free to make experimental orders, or words to that effect, but the Council should be obliged to consult before making such orders permanent; and this Amendment I have put down as a result of considering Lord Walston's suggestion. I dealt at some length on Committee, with the necessity to preserve a very flexible position so far as experimental orders are concerned
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and I do not think I need worry your Lordships again with all that explanation, but it seems reasonable that before the G.L.C. introduce a scheme permanently they should, as the Minister does now, ascertain formally the views of the boroughs directly concerned in it. A permanent order could have a good deal of local effect, and these things, I think on reflection, should be fully taken into account by the G.L.C. in deciding whether to make a traffic scheme permanent or not. Although my right honourable friend feels that there would in fact be adequate consultation and that the G.L.C. would not have much difficulty in complying with this obligation, it perhaps is better to suggest handling the matter this way. I beg to move.
Amendment moved—
Page 12, line 3, at end insert the said words.—(Lord Chesham.)
LORD CHAMPION: My Lords, this appears to meet the points we discussed on Committee, and certainly on this side we are most happy to accept the Amendment proposed by the noble Lord.
Clause 14 [Other road traffic functions in Greater London]:
LORD CHESHAM LORD CHESHAM moved, in subsection (3), to leave out "and section 136(6)" and insert—
"(3A) The consent of the Greater London Council for the purposes of section 138(2) of

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the said Act of 1959 shall not be unreasonably withheld, and any question whether the withholding of such consent is unreasonable shall be determined in like manner as any question arising under section 136(4) of that Act; and section 136(6) and (7)."
The noble Lord said: My Lords, the three Amendments, Nos. 71, 72 and 79, hang together, and I will accordingly, if your Lordships will allow, speak to the three together. I am sorry to say that these Amendments do something which is only very minor but has the other characteristic of being extremely complicated. I apologise for the fact that I must take a little time in order to explain this minor but complicated issue.
The purpose of the Amendments is to provide public utility undertakers, such as gas boards, with a right of appeal jointly to the Minister of Transport and the Minister in charge of the department concerned with the purpose of the work, against a decision of the G.L.C. not to allow them to break open a highway. Secondly, they provide that a person who has no interest in the performance of the obligation on an undertaker not to break open a highway within twelve months of work having been done on it must have the consent of the Attorney General before he can take proceedings against an undertaker. This relates only to certain roads in Greater London which will be prescribed by the G.L.C. under Section 137 of the Highways Act—that is the section which deals with the schedule of work to be carried out in the future to avoid traffic congestion. On these roads the G.L.C. will have drawn up their six-monthly schedule of what is to be done during the next six months.
Under Section 138 of the Act the public utility undertakers must carry out any works they have to do at the same time as the highway authority are doing their work on the roads. They are forbidden to break open a road again for twelve months. This is perfectly reasonable, to make sure they do not keep breaking open repeatedly to do different jobs. But if they do want to do it within twelve months they must have G.L.C. consent. Under the Bill the G.L.C. have the final word so far as these particular roads are concerned. There are other provisions in another section which relate to all other roads in London and, in fact, all the rest of the roads in England and Wales,
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and under these provisions the undertaker must get the consent of the highway authority to break open the roads inside twelve months after works. In the other cases, however, if the highway authority unreasonably refuse consent, the undertaker may appeal to the Minister of Transport and the Minister, jointly with the Minister in charge of the department concerned, will hear the appeal. Therefore, the first thing that happens is that these Amendments provide this final appeal in respect of roads prescribed by the G.L.C. under Section 137.
LORD MORRISON OF LAMBETH: My Lords, is that appeal heard by an inquiry or not?
LORD CHESHAM: There is no machinery for setting up an inquiry. The appeal is in the normal way to the Ministers acting jointly. In fact all the Amendments do is extend this machinery of appeal to the prescribed roads in the same way as to the rest of the roads in the country. The second purpose is this. There is an Amendment to Schedule 6 of the Bill which imposes a penalty on any undertakers who open one of the prescribed roads within twelve months without consent, and it is the same penalty that they have always been subject to for doing the same thing on other roads. In the case of other roads undertakers are protected from frivolous and mischievous charges by the provision that action can be taken against them only by someone concerned with the maintenance of the roads, such as the highway authority, or someone who has the written consent of the Attorney General. This again, extends that same protection to them in the case of prescribed roads. It is very complicated. I apologise for making heavy weather of it, but I could not see how to explain it otherwise. It is minor; but it is necessary. I beg to move.
Amendment moved—
Page 20, line 13, leave out ("and section 136(6)") and insert the said new subsection.—(Lord Chesham.)
LORD MORRISON OF LAMBETH: My Lords, the Parliamentary Secretary said that this is a complicated matter, and it is, but I think he has succeeded in making it very plain and easy for the House to follow, upon which he is

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to be congratulated. It is a matter of some importance that there are a number of public utility undertakings who exercise power to open up the highway to deal with their mains and pipes. There is the Post Office, though what power the Council will have over the Crown I do not know, and, in any case, their jobs do not last too long as a rule. The more important people are the water, electricity and gas undertakers and there could be local drains and so on. It is profoundly important that there should be some friendly supervision and friendly arrangement between the local authority concerned and the undertakers in order to programme this disturbance of the highway, otherwise you will get the water people having the road up in one month and the electricity or gas people doing so possibly one, two or three months afterwards. Therefore, if it can be arranged that they do it together so as to avoid a series of openings, or at any rate that they are so spaced that there is an intermittent disturbance of traffic, it is all to the good.
I admit that if you have these programmes, and if the local authority has a power to order somebody about, it is common usage that there should be an appeal from the local authority to somebody. I agree that in this case the appropriate Ministers should be the Minister of Transport, as the Minister concerned with highways, the Minister of Power would be the Minister concerned in the case of gas and electricity, and in the case of water, I suppose, the Minister of Housing and Local Government. I agree that they jointly should settle the appeal. In all the circumstances, I think this Amendment is reasonable, and we propose to acquiesce in its incorporation in the Bill.
LORD CHESHAM: My Lords, I beg to move this Amendment.
Amendment moved—
Page 20, line 15, leave out ("it applies") and insert ("they apply").—(Lord Chesham.)
Clause 16 [Highway authorities]:
4.2 p.m.
LORD CHAMPION LORD CHAMPION moved, after subsection (2), to insert:
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"() Notwithstanding anything contained in sections 64 to 101 and Part VI of the Highways Act 1959, before any London Borough or the Common Council carry out any works in pursuance of the powers granted by the said sections and Part which might affect the flow of traffic, they shall first obtain the consent in writing of the Greater London Council."
The noble Lord said: My Lords, I wonder whether we might discuss Amendments Nos. 73 and 74 together. The Minister acquiesces; therefore, I propose to do this. Amendment No. 74 appears to have been put down following an undertaking given on the Committee stage by the noble Lord, Lord Chesham, when we discussed a similar Amendment to that which I am now proposing, Amendment No. 73. So far as it goes, the Government Amendment is a good one, but we say that it does not go quite far enough. It is restricted to the new highways to be constructed by the borough council and the Common Council which will communicate with a metropolitan road. In such a case, under Amendment No. 74 the approval of the Greater London Council will be required before the borough or the Common Council will in fact make such an improvement.
Our Amendment is much wider than the Government Amendment, No. 74. Clause 16(2) would enable the borough councils or the Common Council to carry out improvements to roads or to stop up or to divert roads for which this Bill makes them highway authorities. Clause 9 of the Bill places firmly on the shoulders of the Greater London Council the duty of traffic management. If that Council is to function efficiently in that capacity, we say that it is absolutely essential that the Greater London Council should have to give consent before the borough council or Common Council stop up roads, or even divert roads which might affect the traffic flow. That is what we are concerned with in this connection—the function of the Greater London Council in relation to the flow of traffic in London. If this is not done, if the Greater London Council do not give such consent, even although the road is not one which communicates with the metropolitan road, it might have the effect of making it difficult for the Greater London Council to carry out their function as a traffic regulating authority. It might affect their whole job of traffic management in their area.
We say that only an authority with the overall picture in mind could foresee the effects of local works on Greater London as a whole. For example a borough council might stop up a street which the Greater London Council might feel it would require, perhaps not immediately but at some time later, for a one-way traffic scheme. That may well have an effect on such a scheme covering the area of any other boroughs adjoining file one in which the stopping up or the improvement is to take place. In an extreme case it might have an effect on London traffic as a whole.
As I understand it, the present position is that no metropolitan borough council can in fact carry out such works, stop up streets and so on, without the consent of the London County Council. So far as I am aware, this has never occasioned any great difficulty as between the London County Council and the boroughs. There has been reasonable discussion and this has worked, fairly well. But it means that the late London County Council has had a considerable control over this matter, and therefore has been able to ensure that nothing was done which would affect the traffic situation in Greater London. I admit that the borough councils and the Common Council will have to prepare half-yearly schemes of road improvement—indeed, the noble Lord, Lord Chesham, made reference to this on moving the last Amendment or the last but one. But these schemes are not regarded as being sufficient to enable the Greater London Council adequately to safeguard their position as the traffic managing authority.
We are aware of the fact that many of the works to be carried out by the borough councils and the Common Council would not affect the flow of traffic; but there will be only one body capable of judging whether that would be so or not—namely, the body which has the overall picture in mind. That body will be the Greater London Council, and we feel that in the circumstances the Government should go a step further than they propose in Amendment No. 74 and accept our Amendment No. 73. I beg to move.
Amendment moved—
Page 21, line 47, at end insert the said subsection.—(Lord Champion.)
LORD CHESHAM: My Lords, the trouble is that the noble Lord, Lord Champion, has such a beguiling method of moving his Amendments that it is extremely difficult not to jump up and accept them at once. However, I have to make certain remarks that are slightly contrary to those that he has put forward. He said that the matter works all right at present. What we are engaged in doing is, in effect, transferring from the Minister to the Greater London Council the responsibilities that the Minister has previously enjoyed as traffic authority. There is at the present time no obligation for the boroughs to consult with the Minister in this matter.
I agree that there is a good deal of force in what the noble Lord has put forward. In his argument he has quite definitely the germ of an idea, but, on the other hand, I think it would give rise, as he himself at any rate partly admitted, to a great deal of unnecessary work. I am not going to base much argument on the fact that I think the addition of the words "which might affect the flow of traffic" could possibly give rise to some dispute or argument as to whether a certain scheme did or did not affect the flow of traffic. But I think that it still leaves the matter in a pretty all-embracing sort of way.
I referred, as the noble Lord kindly acknowledged, to two powers which the Greater London Council would have. One was to cause certain works to be carried out; the other was the preparation of the six-monthly list. The noble Lord, in his worry that a borough might close a road which the Greater London Council needed for some reason or other in regard to their traffic responsibilities, ought to think of the procedure which they would have to go through to stop up a road. This is set out in Section 108 of the Highways Act, 1959. They have to go to a magistrates' court, and a copy of the application would have to be sent to the G.L.C. as the local planning authority.
LORD CHAMPION: My Lords, does Section 108 of the Highways Act refer to a temporary stopping-up for road repair purposes, or to the permanent stopping-up of a road?
LORD CHESHAM: I took it that the noble Lord was referring to a permanent

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stopping-up. If it is a question of a temporary stopping-up, that would be catered for under Section 137. I have taken this part of my remarks as referring to a permanent stopping-up. They would go to the G.L.C. as planning authority, and if the G.L.C. opposed it, that would carry great weight. It certainly could not happen without their knowing about it. In brief, I feel that the noble Lord's proposed Amendment on the whole goes too far. There would be so much work of no interest to the Greater London Council that a great deal of unnecessary work would be created by the Amendment. I agree I undertook to look at the other matter of new roads coming into metropolitan roads, and, as a result of that examination and in response to that undertaking, I put down Amendment No. 74. I do not know that there is anything more I can say about it, except that I think we are on the right wicket. However, I consider Amendment No. 73 would be carrying matters too far.
LORD SHEPHERD: My Lords, I apologise for not being here during the earlier part of the debate on this Amendment. What I had in mind, as I am sure had my noble friend Lord Champion in Committee stage, was not only the question of the blocking up and the resultant dislocation, but, as am sure the noble Lord, Lord Chesham, will appreciate, that a marginal increase in, or redirection of, traffic can well upset, the smooth flow of traffic on the main metropolitan or trunk road. The noble Lord has rather admitted that point by putting in his Amendment No. 74, in the sense that any new road would in itself change the balance and flow of traffic into such a road. Would the noble Lord between now and the Third Reading consider putting down an Amendment to No. 74 which would apply to an existing highway which is so materially altered that it affects the flow of traffic into the main road? I am sure that he will appreciate that the widening or realignment of a particular road which may increase the flow of traffic in the road itself, as well as that in others meeting at a junction of a main road, could seriously affect the smoothness of the traffic? Will he therefore consider alteration to Amendment 74 to cover not only a new road, but an existing road where it is materially altered?
LORD CHESHAM: My Lords, if I may be allowed a brief word, by leave of the House (which I am not sure I am right in seeking), I will certainly consider that point. I will, of course, consider seriously all the points put forward by the noble Lord. I could not at the present time give him any undertaking about it, but, without obligation, I will consider it.
LORD CHAMPION: My Lords, I am grateful to the noble Lord for, to some extent, accepting the suggestion of my noble friend Lord Shepherd. In the course of my remarks I referred to the possibility of road improvements having the effects I feared upon traffic flow. The noble Lord, Lord Chesham, said that Amendment No. 73 contained a germ of an idea. If that germ will expand in his mind between now and Third Reading I shall be most happy. In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CHESHAM: My Lords, I think sufficient has been said about this Amendment for me merely to move it.
Page 22, line 10, at end insert—
("(3A) Where a new highway to be constructed by virtue of the said section 26(2) by a London borough council or the Common Council will communicate with a metropolitan road, the communication shall not be made unless the manner in which it is to be made has been approved by the Greater London Council.").—(Lord Chesham.)
Clause 17 [Metropolitan roads]:
4.17 p.m.
LORD CROOK LORD CROOK moved, in subsection (1)(a), to leave out, "the highways specified in Schedule 7 to this Act" and insert:

"(i) any highway in Greater London classified by the Minister of Transport under the Ministry of Transport Act 1919 in Class I or any class declared by him to be not inferior to that class for the purposes of the Highways Act 1959;

(ii) route number B.304 from the junction with A.3212 at Chelsea Embankment to the junction with A.3220 at Battersea Bridge Road;

but without prejudice to the generality of the foregoing provision, none of the following bridges, that is to say, Blackfriars Bridge, London Bridge, Southwark Bridge and Tower Bridge, and no highway carried by any of those bridges, shall be, or become, such a road."
The noble Lord said: My Lords, I shall try not to repeat the arguments deployed on the last occasion. This matter has been considered twice in the other place. When it was first considered there a discussion took place on the idea that all trunk roads and Class I roads should become metropolitan roads, but in Committee stage here we took a less strong line in the hope of attracting the support of the Minister, and I am wondering whether he has had second thoughts.
Last time the only point on which we were in agreement was as to the facts in regard to the Albert Bridge, and that the Albert Bridge had to be left out. We asked the Government to look at the roads left to the boroughs, and they had stated in another place—and it was repeated by Lord Chesham in Committee here—that these were the roads principally used for domestic and local traffic. We feel that in balancing the two kinds of traffic the Ministry have not been very smart. We wonder whether the Minister will not agree that there is more through-traffic than the selection which they appear to have made would indicate.
My noble friend Lord Champion in Committee referred to three examples where no metropolitan road was provided. I will not repeat them, but I would only remind the House that one was from Camberwell, one of the routes up to the South Bank area; another was the rather curious way in which the Finchley Road ceases to be a metropolitan road immediately it meets Marylebone Road. To add one other, the Strand takes a substantial amount of through-traffic. The traffic survey shows that 28 per cent. of the traffic from Piccadilly and Pall Mall goes through to the Strand; 21 per cent. goes down Northumberland Avenue to the Embankment. It is a little difficult to see why the metropolitan road is apparently to stop at Trafalgar Square. We remain where we were in Committee stage; that is to say, unable to see why we cannot rely on what we thought was the simple formula: that we should have the present Class I roads definition, that they should be reclassified from time to time, and that we shall await the results of the grand survey to which the noble Lord addressed himself in another debate on
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the same day during Committee stage. For those reasons, I beg to move the Amendment.
Amendment moved—
Page 22, line 22, leave out from ("section") to the end of line 23 and insert the said new words.—(Lord Crook.)
LORD CHESHAM: My Lords, I am sorry to disappoint the noble Lord, Lord Crook, but I might as well be suite plain and honest, and tell him that we have had no change of mind or feeling on this matter since the last stage. I am not going to bore him and the House by repeating all the arguments that I put forward, any more than he did himself. I am afraid that, one way or another, there is a cleavage of opinion between noble Lords opposite and ourselves over this point of how this should be done, and I do not think the House would wish that we should revive every detail of that again.
We feel that our proposals are as consistent as they can be with the recommendations of the Royal Commission. Furthermore, the procedure we wish to adopt leaves the matter flexible for adjustment in the future in the light of experience—perhaps of the kind which the noble Lord, Lord Crook, has mentioned—and, if it is seen that some alteration should be made, it could be made. I think that is the sensible way to do it. Incidentally, again it is in accordance with the recommendations of the Royal Commission. Obviously, on a selective matter like this, where the selection has endeavoured to be based on considerations of quality rather than quantity, there is going to be room for shades of opinion.
I suppose we could argue all night as to the relative through-route merits of the Strand and of the Embankment.
LORD MORRISON OF LAMBETH: Where does Fleet Street come? Is that to be a metropolitan road or a borough road, as well as the Strand?
LORD CHESHAM: Without looking up the Schedule, I could not say. The noble Lord mentioned the Strand, and I thought he was interested in that; but the noble Lord, Lord Morrison of Lambeth, brings in Fleet Street. But I was referring to the Strand at the time, and I said that there was room for consideration and possible divergence of

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views about its precise standing in terms of through-traffic, as compared with the Embankment—that is apart from the fact that I understand the L.C.C. have recently taken some planning decisions which would obviate any further development of the Strand as a through-route. The Strand, as the noble Lord pointed out, is not a metropolitan road, any more than Fleet Street is. On the other hand, I think I am right in saying that the Embankment is. That has been assessed as a through-route, for reasons similar to those which I mentioned.
I should just like to touch, as the noble Lord, Lord Crook, did, on the question of the survey, because I do not think the argument he put forward is strictly relevant to the selection of metropolitan roads. The object of the survey has to be borne in mind; and that, of course, is that it is concerned with the origin and destination of traffic, by which I mean people. What it is endeavouring to find out is the kind of traffic travelling between any two particular zones or places, but it will not necessarily show on which actual routes that traffic is travelling.
There are all kinds of interesting things that crop up out of the world of surveys, and one of them is called "desire lines", which is something you take into consideration when you first find out who wants to go where. It is then up to the sponsors of the survey—in this case the Government and the L.C.C., and in due course the G.L.C.—to work out what facilities are provided for getting the people there. I make that point, because I do not think it can be very strongly argued that we should wait for the survey, in order to work out how the metropolitan roads will be selected. Without going through the whole argument again, I think that I must stand on the fact that we firmly believe that our method of selection is the right and proper one, and I hope the noble Lord will be able to reconsider that.
LORD MORRISON OF LAMBETH: We firmly believe that the noble Lord is wrong. When the classification of Class I roads takes place, it presumably has a relationship to the nature of the roads, the amount of traffic and so on. That is the whole point of the classification. Clearly, a Class I road is more important
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than a Class II road, and a Class II road is more important than an unclassified road. As to elasticity, the Government would have just as much elasticity if they started on the basis of the Class I roads, because the Minister has perfect freedom to promote a road to Class I, or to demote a road from Class I to Class II. I do not know why the Government go through all this paraphernalia of printing this long list of roads in the Schedule—where, by the way, it is exceptionally difficult to find any particular road you are looking for, because there is no alphabet about it whatever. It is a waste of print and an unnecessarily clumsy way of doing it.
Take the case of the Strand. Now we find, as I anticipated would be the case, that Fleet Street, which is a continuation of the Strand, is treated in the same way. Perhaps out of my regard for Fleet Street, I had better say that the Strand is a continuation of Fleet Street—none of us wants to upset the newspapers just now. But here is a road, and if ever there was a through-road, leading from Ludgate Circus, and beyond, to the City of London, or right through to Trafalgar Square and all the places beyond that, I should have thought Fleet Street and the Strand were it. But it is proposed that that should remain as a local road or a borough road under the City of London and the Westminster City Council, or whatever it is going to be called. That seems to us to be absurd. All these roads have been examined—anyone would think the Ministry of Transport had so much staff that they had to find something for them to do. Perhaps that is true. They said: "Examine all those roads, make a list of them in the Schedule, and then re-examine them from time to time to see what we want to put in and what we want to take out."
The Class I road is classified for a purpose: it is a well-known, established form of highway classification. Surely our proposal, whereby all the Class I roads would be metropolitan roads, plus Battersea Bridge, but excluding the City bridges, because they are City bridges, is the most sensible method. In all the circumstances, unless we are given more satisfaction, I hope that my noble friend will persist in the Amendment. It is perfectly true that the Minister has had to raise the same argument in principle as he raised before, but the fact that he

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has put the argument twice to the House does not make it any more right. We think the argument is wrong and that we should divide upon the matter.
Clause 20 [Functions as to motor vehicles and driving licences]:
4.38 p.m.
LORD CHESHAM: My Lords, this is a drafting Amendment purely for clarification. I beg to move.
Amendment moved—
Page 26, line 24, at end insert ("for Greater London").—(Lord Chesham.)
Schedule 6 [Amendments as from 1st April 1965 in Highways Act 1959]:
LORD HASTINGS: My Lords, this Amendment follows from the powers
4.30 p.m.
On Question, Whether the said Amendment (No. 75) shall be agreed to?
Their Lordships divided: Contents, 30; Not-Contents, 82.

CONTENTS

Addison, V.

Douglas of Barloch, L.

Rea, L.

Alexander of Hillsborough, E.

Greenhill, L.

Rusholme, L.

Archibald, L.

Latham, L.

Samuel, V.

Attlee, E.

Lawson, L.

Shackleton, L.

Burden, L. [Teller.]

Listowel, E.

Shepherd, L.

Burton of Coventry, B.

Longford, E.

Stonham, L.

Champion, L.

Lucan, E. [Teller.]

Summerskill, B.

Chorley, L.

Macpherson of Drumochter, L.

Walston, L.

Crook, L.

Morrison of Lambeth, L.

Williams, L.

Darwen, L.

Ogmore, L.

Wise, L.

NOT-CONTENTS

Ailwyn, L.

Exeter, M.

Mar and Kellie, E.

Albemarle, E.

Ferrers, E.

Margesson, V.

Alexander of Tunis, E.

Forster of Harraby, L.

Massereene and Ferrard, V.

Allerton, L.

Fortescue, E.

Meston, L.

Ampthill, L.

Fraser of North Cape, L.

Mills, V.

Auckland, L.

Gage, V.

Molson, L.

Balfour of Inchrye, L.

Goschen, V. [Teller.]

Montgomery of Alamein, V.

Beauchamp, E.

Grenfell, L.

Munster, E.

Bossom, L.

Hailsham, V. (L. President.)

Newton, L.

Boston, L.

Hamilton of Dalzell, L.

Ormonde, M.

Bradford, E.

Harris, L.

Raglan, L.

Brentford, V.

Harvey of Tasburgh, L.

Remnant, L.

Bridgeman, V.

Hastings, L.

St. Just, L.

Broughshane, L.

Hawke, L.

St. Oswald, L.

Chelmsford, V.

Hayter, L.

Salisbury, M.

Chesham, L.

Hemphill, L.

Salter, L.

Clitheroe, L.

Hereford, V.

Sandford, L.

Coleraine, L.

Home, E.

Sandwich, E.

Colyton, L.

Horsbrugh, B.

Sinclair of Cleeve, L.

Conesford, L.

Howe, E.

Soulbury, V.

Crathorne, L.

Jellicoe, E.

Spens, L.

De La Warr, E.

Jessel, L.

Stonehaven, V.

Denham, L. [Teller.]

Lansdowne, M.

Stuart of Findhorn, V.

Derwent, L.

Lothian, M.

Swinton, E.

Devonshire, D.

Luke, L.

Twining, L.

Dilhorne, L. (L. Chancellor.)

McCorquodale of Newton, L.

Waleran, L.

Ebbisham, L.

Mansfield, E.

Ward of Witley, V.

Elliot of Harwood, B.

On Question, Amendment agreed to.

given to the London borough councils under Clause 60 in connection with the survey of footpaths under the National Parks and Access to the Countryside Act, 1949, and I moved in that clause during Committee stage. The survey responsibility, as a result of that clause, is being given to the London borough councils, and, therefore, reference to the consent of the Greater London Council is no longer needed. I beg to move.
Amendment moved—
Page 148 leave out lines 39 to 46.—(Lord Hastings.)
On Question, Amendment agreed to.
LORD HASTINGS: This Amendment relates to the previous one and is exactly

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the same point except that it deals with rights of way partly in the London boroughs. I beg to move.
Amendment moved—
Page 151 leave out lines 5 to 11 and insert—
("31. In section 112(2), at the end there shall be added—

'(d) as respects any part thereof in a London borough or in the City of London, except with the consent of the council of that borough or, as the case may be, of the Common Council.'").—(Lord Hastings.)

On Question, Amendment agreed to.
LORD CHESHAM: My Lords, this is related to Amendments Nos. 71 and 72, which your Lordships have accepted. I beg to move.
Amendment moved—
Page 152, leave out lines 21 to 24 and insert—
("(c) after subsection (3) there shall be inserted—

'(3A) The consent of the Council for the purposes of subsection (2) of this section shall not be unreasonably withheld, and any question arising under this subsection whether the withholding of consent is unreasonable shall be determined in like manner as any similar question arising under subsection (4) of section 136 of this Act; and subsections (6) and (7) of that section shall have effect as if the references therein to subsection (1) of that section included references to the said subsection (2)'.").—(Lord Chesham.)

On Question, Amendment agreed to.
Schedule 7 [Metropolitan roads]:
LORD CROOK: My Lords, I was to move an Amendment to leave out Schedule 7 which is related to the Amendment on which your Lordships recently divided. I should be wasting the time of the House, therefore, to make any attempt to move it or to divide the House. It is therefore not moved.
Part III.
Clause 21:
Housing powers in Greater London
21.—
(10) Arrangements may be made by any of the London borough councils or the Common Council for the rehousing of any person by another of those councils; and any such arrangements may include provision for the payment of contributions by that council to that other council.
4.40 p.m.
LORD LATHAM LORD LATHAM moved, in subsection (4), after "1899" to insert:
"Part III of the Housing Act 1957".
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The noble Lord said: My Lords, I beg to move this Amendment. Associated with Amendment No. 81 are Amendments Nos. 82 and 83, and I shall address my remarks to the subject matter of all the Amendments.
LORD HASTINGS: My Lords, might I ask whether it would not be to the convenience of noble Lords opposite and also to the House in general if the noble Lord could deal with Amendments 81 to 88 inclusive? They are all with slight variations along the same argument.
LORD LATHAM: My Lords, if it pleases the House then I will deal with them in that way. This is a proposal dealing with housing. Housing, we all admit, is probably the "number one" social problem of this country; and one of the resistant and persistent elements of housing is, of course, slum clearance. The proposal set out in the Amendments which are under discussion deals with the powers of the Greater London Council in connection with land which has been acquired for purposes other than housing. It seeks to secure for the Greater London Council the power which the London County Council at the present time has; namely, the power rapidly to deal with land acquired for a variety of purposes. The Government proposal would seem to disarm the Greater London Council with regard to dealing with slum clearance and other elements of housing; and to disarm the Greater London Council in advance.
When the London County Council finds unfit houses on land which it has acquired for other purposes and is developing it, it is able to deal with those houses by the use of slum clearance powers which it possesses under Part III of the Housing Act of 1957. But the Government propose that the Greater London Council should not be given those powers permanently; and when the temporary powers which are granted by and with Clause 21 (5) are taken away from it the Greater London Council will no longer be able to deal with unfit houses in the way the London County Council now deals with them.
Why should the powers which are regarded as being essential temporarily not be permanent? After all, slums will exist for a long time, and they will not be exorcised into oblivion simply by the latest White Paper on housing published

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by the Minister of Housing and Local Government. We are against these powers being regarded as simply temporary, and we submit there is every case for their being made permanent. The powers would make it possible for the Greater London Council to deal with unfit houses in the same way as county councils or in the same way as development corporations; but neither of these authorities has the powers of Part III of the Housing Act, 1957. The procedure under Clause 7 of the Bill has the following disadvantages: it is much slower than action under Part III of the Housing Act; it makes it necessary for two authorities, the Greater London Council and the borough council, to operate in a matter which is much more efficiently and quickly handled by one authority; and, in addition, the procedure is incomplete because the Bill refers only to unfit houses found on land acquired by the Greater London Council under Part V of the Housing Act, 1957.
But the London County Council does, and the Greater London Council will, acquire land under a variety of other enabling Acts. How is the Greater London Council to deal with unfit houses found on that land? As the Bill is at present drafted there appears to be no satisfactory way in which the Greater London Council could act. It would probably be necessary at the same site for action to be taken by two local authorities; it might be necessary to have two public inquiries and for the decision to be taken by two different Ministers. That is a fine kettle of fish! What is the objection to giving the Greater London Council the power to use Part III of the Housing Act, 1957, for this specific purpose? Perhaps the Minister will tell us. I think that noble Lords are entitled to know why this power is to be withheld from the Greater London Council. Slums will still exist in London and, despite all action on improvement, maintenance and repair of existing dwellings, more slums are likely to be created. Indeed, there is every reason to be disturbed at the possibility that more houses are becoming unfit than unfit houses are being replaced. Of course, one of the chief factors making for the turning of otherwise decent houses into slums is the overcrowding and multi-occupation, due largely to the very high rents which have
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to be paid or to the very heavy mortgage charges which have to be met.
The problem for London is to clear the slums as quickly as possible and to prevent other houses from becoming unfit and turning into slums. The way to do that is to give the Greater London Council powers similar to those possessed by the London County Council. I think it can be said, without being invidious and without being excessively wedded to any particular local authority, that the London County Council's record in slum clearance is unequalled—and for a variety of reasons not unrelated to the quality of its members. But one of the principal elements of the machinery and administration has been this power under Part III which is to be given temporarily to the Greater London Council. But it is not to be a permanent power. We submit that there is every reason why the G.L.C. should be armed with every possible proper weapon in order to remove slums and promote the provision of housing for the people of Greater London. Therefore, we press most strongly for these Amendments, which would improve the Bill by enacting that the G.L.C. shall have these powers permanently. I beg to move.
Amendment moved—
Page 27, line 17, after ("1899") insert ("Part III of the Housing Act, 1957").—(Lord Latham.)
LORD CROOK: My Lords, I should like to pick up the point about slum clearance which my noble friend Lord Latham has used and to express my complete surprise that powers are not to be granted permanently to the Council. I would refer to the recent White Paper on Housing and quote again what the Minister said:
"It is in the great slum concentrations in the congested towns of the Midlands and the North that the real difficulty still remains."
He was able to leave out the Capital City, no doubt because in the course of years the L.C.C., under the leadership of my noble friends Lord Latham and Lord Morrison of Lambeth, have gone ahead jointly with the metropolitan borough councils and fought in every way against the slums. It did not matter what complex difficulties they had in their housing problems, they always put their main effort into slum clearance. But whatever the Minister may have said about slums being worse in the North

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and Midlands, there are still slums to be dealt with in London. There is also the chance that the failure to maintain and repair buildings, which we know is going on at the moment, will cause slums to grow and multiply.
The Minister has said that in the next three years the clearance programme for Greater London will need to deal with 35,000 houses and that these are concentrated relatively heavily in the areas of a few local authorities. From the statements the Minister made, it is probable that during the period in which the G.L.C. will have temporary slum clearance powers, they will have to meet a problem of that size. When the powers are gone, what is the position going to be? The estimate which the L.C.C. have given to us is that unfit houses will continue to be created at the rate of 2,000 a year within the existing county boundary alone; and that it is likely that the total number, taking the whole of the Greater London area, will be at least 2,500 a year. It is not necessary for me to tell your Lordships that in this London of ours many houses have more than two families in them, and, taking the conservative estimate that there is only a second family, that will mean that 3,000 houses a year will be required indefinitely, if we are going to deal with slums as they arise. Unless we can do that, it will take only a few years for slums in London to grow until they are on the same level as the slums in the North and Midlands, to which the Minister referred in his White Paper.
It seems to me that the Government think that they can just finish and forget all about this. The task which will face the London borough councils, when they come to tackle this problem, is so complex and difficult that every time they take one pace forward they will find that they have already lost two paces backwards. The White Paper outlines the shortage of housing in Greater London and future demand, and refers to the need for improving tenement blocks and other houses and to the problem of urban renewal. All of these problems have to be faced, but no powers are being given to the G.L.C. to deal with any of them. I would join my voice with the others from these Benches who support the string of Amendments which my noble friends have put down on this subject.
LORD SHEPHERD: My Lords, I also support the Amendment. We are dealing with a tragic problem. In spite of what has been done in London by the L.C.C. and the borough councils, and by other authorities throughout the country, we do not seem to be keeping abreast in our slum clearance. As we clear one area of slums, old premises in another area take their place. One can see this deterioration of property not many yards away from this Palace of Westminster. I do not want to make this a Party issue. If I may compare government with industry, efficiency is the prime motive of industry. In industry, the small companies, manufacturing or selling, are disappearing and large groups are taking their place. In the aircraft industry, individual companies have been brought into three groups for efficiency; and this has been done on the initiative of Her Majesty's Government. We see the same thing in textiles, insurance and banking. This is being brought about by the sheer necessity to have efficiency in order to meet competition.
In London, up to the present, we have had the overriding authority of the L.C.C. in regard to slum clearance. The Council have worked with the Minister and the Minister has worked with the L.C.C. to effect a fairly considerable result in replacing houses that were damaged by war and in slum clearance. Under the Bill, the Government propose that these powers of the L.C.C. should be retained by the G.L.C. only on a temporary basis and that at a given time they should disappear. Whereas industry is gathering together in large units for efficiency, the Government propose, with regard to slum clearance in London, to fragment the central management over 32 boroughs. I well recognise that these boroughs are a good deal larger than those that have been in the London County Council area. But in the inner part of London where slums exist you will be creating new boroughs where three, or perhaps two, of the boroughs that share the same problem of existing slums and shortage of land are being joined together. Can the Government really say that bringing boroughs together will make the task any easier than if those boroughs act individually?

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The weight of the evidence here is that time and time again since the war the London County Council have been called upon to give these services which we wish to see provided by the G.L.C. The L.C.C. have been able to do this because they have had a pool of housing in which the people displaced by slum clearance could be housed. But if a borough is left on its own, as it will be if these powers in Part III disappear, it will mean that the borough has to find alternative land for slum clearance—because I think your Lordships will recognise that when you clear a slum area you do not rehouse the same number of people in that area, but possibly only 50 or 60 per cent. of the existing tenants. Therefore, the borough will have this problem of where it is to put the people who will be removed from the slum areas. I asked the noble Lord, Lord Hastings, on Committee stage in regard to the inner boroughs if he could tell me one that has not a waiting list of ten years, and I think he gave me a figure which agreed with my assessment. These inner boroughs have the problem of finding accommodation for their own inhabitants, and, therefore, only a bigger authority, such as the G.L.C., will be able to provide assistance towards slum clearance.
When we moved this set of Amendments on Committee stage we sought to give the G.L.C. concurrent powers. There is a significant difference in the Amendment that we are moving to-day. Under Amendment No. 83, the Greater London Council would be able, after the Part III powers had disappeared, to exercise them on the request of the council of the borough. As the Bill stands, as I see it, once the Part III powers disappear, the G.L.C. will be the one local authority in the United Kingdom that will not have these powers. If a borough asks for assistance in slum clearance and the alternative development, the G.L.C. will be the one senior authority in the country that will not be able to give assistance to a lower authority. This is quite wrong.
It is wrong in principle that the G.L.C. should be singled out to be different from any other county council with these powers; and it is wrong also for the boroughs, who will have a continuing task. This slum clearance will
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be a continuing task. I wish that we could see a possible end of slum clearance; but we cannot. I think that, as time goes on, the task of the inner boroughs—and perhaps, later on, of what we regard as the outer boroughs—of finding space and providing alternative housing before they can tackle the buildings that are becoming slums will become more difficult; and, as the years go by, I think they will have to look to another authority to help them.
The noble Lord, Lord Hastings, suggested that a borough, if it reached that stage, could consult with another borough. I wonder whether the noble Lord believes that any of the inner London boroughs, with the best will in the world, could provide, without detriment to their own inhabitants, the space and service that their fellow borough would require. The Minister may suggest that the inner boroughs could look to the outer boroughs. I am sure the noble Lord will agree that there is a considerable difference in the (I hesitate to use the words) sort of social dignity of some of these boroughs. I believe some of the outer boroughs would be extremely loth to accept inhabitants from the slums of inner London. It is un-Christian, but I think it is true that this attitude exists to-day. In these circumstances, I do not believe that the noble Lord can say to the House with any conviction that the boroughs will be able to get together and help the one in particular need.
If that is accepted as the position—and I believe it is the position—obviously these boroughs, in their difficulties—as I have said, their increasing difficulties—must look to a bigger authority that has a broader horizon, great opportunities and a greater area in which to operate. I say that this is a permissive Amendment. It merely permits that, once the Part III powers have disappeared, if the council of a London borough reached a stage when they could no longer continue on their own, but needed further assistance, they could then go to the Greater London Council, who would have the authority, and I believe the duty, to give that assistance. I support this Amendment.
5.19 p.m.
LORD HASTINGS: My Lords, when the noble Lord, Lord Latham, moved

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this Amendment he said that he was doing so on behalf of the noble Lord, Lord Silkin. I should like to say how sorry we on this side of the House are to know the reason for his absence; I should like to assure noble Lords opposite of our great sympathy, and we look forward to seeing him when he feels able to participate again in our deliberations.
At the Committee stage, we had a long discussion—almost a debate on its own—on this subject, and I think our arguments resolved themselves into two questions on that occasion. The one was the physical clearance of the slums, and the other was the supply of housing available to accommodate the people from slum clearance. On that occasion I tried to emphasise to the Committee the importance of the Greater London Council's obligations to deal with the housing needs of Londoners.
I should like once again to return to that subject, because it has come out very clearly in the speeches this afternoon, and particularly in that of the noble Lord, Lord Shepherd, that we are dealing here with the availability of housing. Noble Lords have referred again to the supply of London County Council houses available for the people who are without houses as a result of slum clearance. It seems to me that noble Lords opposite do not even yet seem quite to appreciate the very strong and explicit obligations laid upon the Greater London Council to provide for the housing needs of Londoners. Alternatively, they seem apprehensive of the energy or willingness of the Greater London Council to exercise their powers so as to help the authorities sufficiently with slum clearance problems.
In the course of our Committee stage, the noble Lord, Lord Silkin, said that this is really a matter of machinery—and it is. Both sides of the House, I think, want to make sure that the machinery laid down in the Bill is effective, and it is my contention on behalf of the Government that the proposals in the Bill are perfectly effective for bringing about the results that noble Lords opposite want to see. We have once again reconsidered this problem very carefully to make sure that the machinery will indeed be effective. The
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London boroughs, with clear responsibilities and with the help of the Greater London Council on rehousing, should be able to tackle their difficult problems, including slum clearance, perfectly effectively. The position set out in the Bill is that in inner London, during the transitional period, the Greater London Council will have concurrent powers with the London boroughs to clear slums.
That, so far as it goes, satisfies noble Lords opposite. But they ask, why not make these powers permanent? First of all, I would say why we make them concurrent; why the Greater London Council should in fact continue the existing powers of the London County Council. The answer is that for many years the metropolitan boroughs have been working in co-operation with the London County Council; that the London County Council have been clearing twice as many slums as the boroughs themselves in inner London, and that the machinery is there. The habit is there. If we were suddenly to cut off the metropolitan boroughs from that sort of procedure, then I think they would be in real trouble. It is for that reason, because the London County Council are planning ahead on a five-year period with their slum clearance plans, and have those plans on the drawingboard already, that it will, I am sure, be much better and more effective that the Greater London Council should continue these plans and see them through. That is why we wish to give them concurrent powers in respect of the London County Council area.
When we come to the outer London boroughs, noble Lords will remember that the existing boroughs are already the sole authorities for slum clearance. They will be amalgamated into new boroughs, but the parts of the new boroughs which are now the existing outer London boroughs already have slum clearance powers, and are well accustomed to operating them. They already have their plans for slum clearance, and therefore we claim that there is quite a distinct difference between the problems facing the metropolitan boroughs and the outer boroughs in respect of slum clearance.
LORD SHEPHERD: My Lords, is it not a fact that these outer boroughs can

175
go to their particular county council for assistance, and that these particular county councils can themselves assist and carry out a form of slum clearance and development in the boroughs?
LORD HASTINGS: I do not think that is so, but I should like to confirm it.
LORD MORRISON OF LAMBETH: My Lords, could the noble Lord say how long these concurrent powers last? Is the date fixed when they cease?
LORD HASTINGS: I will be coming to that later in my speech. It is certainly an important point. I was saying that the outer London boroughs already have their own slum clearance powers, and are well accustomed to operating them. The argument was put forward in the Committee stage that the outer boroughs had not made quite such good progress with their slum clearance as the metropolitan boroughs had with the aid of the London County Council. I would point out that, under the new arrangements, the outer boroughs will have an additional advantage, in that they will have the assistance of the Greater London Council for meeting their housing needs in the future. At the moment of course, not only do they carry out their own slum clearance, but they also have to find the land and build the houses to take care of the people affected by the clearance of unfit houses. In the future, of course, they will have the help of the Greater London Council in a way they have not had before with the London County Council. From that point of view they should be perfectly capable of carrying on with their slum clearance programme and be able to rely on the Greater London Council.
LORD MORRISON OF LAMBETH: My Lords, how do the outer London boroughs receive help from the Greater London Council?
LORD HASTINGS: In the provision of housing. I am just coming to draw noble Lords' attention to the very definite duty of the Greater London Council under Section 91 of the Housing Act, 1957. It is to
"consider housing conditions in their district and the needs of the district with respect to the provision of further housing accommodation and for that purpose to review the infor-
176
mation which has to be brought to their notice either as a result of inspections and surveys carried out under Part I of the Act"—
which refers to slum clearance—
"or otherwise."
There is a lot more, which I do not think I need read.
LORD MORRISON OF LAMBETH: Does that give them power to build in the outer London area?
LORD HASTINGS: Certainly. I am coming to that now. Clause 21(6) of the Bill firmly lays the duty on the Greater London Council to consult the London boroughs in connection with the review required under Section 91 of the Housing Act, 1957. It also firmly lays on the London boroughs the duty of providing the Greater London Council with information about their needs. If these powers and obligations are borne in mind in considering the needs of slum clearance in Greater London, it must be clear that the Greater London Council's responsibilities include assisting London boroughs with rehousing families displaced by their slum clearance action. And, of course, the Greater London Council is enjoined to provide housing, not merely for the inner London area, but for the whole of London, and they have powers in the transitional period to acquire land compulsorily in order to do that, whatever London borough may be concerned, and to build in any borough. After the transitional powers cease in that respect so far as the outer London boroughs are concerned, then the process has to be carried out of the acquisition of land by consent, but during the transitional period the Greater London Council can acquire London land wherever it wishes in order to help with the housing problem; and this is referring not only to slum clearance from inner London but to outer London as well.
During the Committee stage the noble Lord, Lord Morrison of Lambeth, referred to some figures published in the slum clearance Blue Book, and drew conclusions based on those figures which in fact I do not think were really quite right. He thought that the record of some outer London boroughs like Tottenham, East and West Ham, and Croydon, showed that they were clearing a much lower percentage of slums than the inner London boroughs with the help of the

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L.C.C. were doing. In fact, those figures were compiled from returns sent in by the local authorities, who did not all use exactly the same basis.
Whereas some local authorities—and this refers to the metropolitan boroughs and the L.C.C.—put in figures referring merely to the slums they wished to clear in the five-year period (the estimated number of unfit houses referred to the number they wished to clear, and then the number they intended to clear was put in column 6), other boroughs—as it so happened the reference was to the boroughs in Middlesex and Surrey—tried to estimate the total number of unfit houses in their area for future clearance and then, in column 6, merely put in the numbers they proposed to tackle in the next five years. So these figures were really a little misleading, and I thought it only reasonable to point that out to the noble Lord. They were provided in the book of 1955; there is a discrepancy and there was not a note explaining that slight difference.
LORD MORRISON OF LAMBETH: There are probably still a lot more discrepancies.
LORD HASTINGS: Therefore, the figure is not as bad as the noble Lord thought it might be.
As to the up-to-date figures—and this is what really matters—I think that the London County Council now estimate that after 1965 they will need to clear slums in the County of London at the rate of 2,000 a year; and figures independently arrived at by the Department for which I speak, agree with that estimate pretty well, and we think it is slightly under 2,000 a year in that five-year period. In outer London, only six of the new boroughs will have a considerable backlog of slums left after the end of the present slum clearance programme, amounting to just over 6,000 slums. Most of these will be cleared in the five years from 1965. Thus, in Greater London as a whole there will be roughly 16,000 slums to be cleared in the five-year period after 1965.
LORD SHEPHERD: My Lords, those figures are for houses now classified as slums, but the noble Lord will agree that buildings continue to become slums.
LORD HASTINGS: I am coming to that immediately. We can accept that
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there will be a continuing slum clearance programme, but the main London problem (and this, I think, was not said in so many words though it was implied by the noble Lord, Lord Crook, when he referred to the Housing White Paper and the fact that slum clearance problems were worse in the North and Midlands) is, or will be after 1970, a problem of obsolescence rather than of houses which will fall within the present definition of unfitness under the Housing Acts; and obsolescence is rather a different problem. Many of the obsolescent houses, of course, are the tenement blocks to which the noble Lord, Lord Silkin, referred during the Committee stage, and blocks in multi-occupation. The problem here is the heavy density of occupation of these houses, which may be obsolescent but none the less are structurally fit.
The Greater London Council will inevitably have to help these congested inner London boroughs obtain the land on which to build the additional houses, so as to solve the housing problems arising from these conditions, whether these are straightforward slum clearance, obsolescence or multi-occupation, and their functions as a housing authority is to help London boroughs with re-housing from slum clearance, from redevelopment areas and from these houses in multi-occupation where the boroughs are unable to solve the problems themselves. I entirely agree with the noble Lord, Lord Shepherd, that it is the duty of the Greater London Council to provide the land and the houses, for the boroughs in the central area of London who have not got the land; and the G.L.C. will obtain from the boroughs the information needed to enable them to make their plans.
With regard to the outer London authorities—and I am thinking particularly of Tottenham, Leyton, East and West Ham, who have a fairly heavy burden of slum property—they will be able to clear their unfit houses faster now they can look to the Greater London Council to help them replace the displaced families. That is a point which I made earlier in my speech, and I wanted just to emphasise it again. When the Greater London Council can offer a share of their stock of some 217,000 houses which they will take over from the London County Council—occupied

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mostly, of course, by people displaced from inner London at the moment; but gradually vacancies arise—the houses will become available for the displaced people from the outer London boroughs; and, of course, the Greater London Council will go ahead as fast as it can with new building as well.
LORD MORRISON OF LAMBETH: How can it if these boroughs are limited in time? What is going to happen after the expiry of that time?
LORD HASTINGS: I have spent some time on facts and figures so that noble Lords may have the real background of the problem; on the one hand, the physical fact of slums and the necessity for clearance, and, on the other, the provision of housing. And I hope the noble Lord will appreciate that the real problem is the availability of housing; and the Greater London Council have not only the full power but also the absolute duty to provide it.
I will now come—and I am not forgetting the noble Lord's point about time and transitional powers—to the specific point of the first Amendment moved by the noble Lord, Lord Latham, and spoken to, particularly at the end of his speech, by the noble Lord, Lord Shepherd; that is, the suggestion that, after the transitional powers under Part III of the Housing Act lapse, the Greater London Council should be enabled to help the whole of Greater London, whether boroughs of outer or inner London, at the request of the boroughs concerned. To that extent the noble Lord was, I realise, trying to meet the point I made previously: that we did not wish to continue these powers on a permanent basis.
The first reason why we did not wish to continue them on a permanent basis is, as I tried to prove to noble Lords, that it will not be necessary physically to do so, since the Greater London Council already have sufficient powers to provide the housing. Why should that not therefore be provided on a temporary basis, with consent? That is the next question. The first answer is that so far as the outer boroughs are concerned they are already their own slum clearance authorities. They will have additional help in respect of the provision of housing from the Greater London Council permanently, and I do not
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think they would take advantage of any possibility of asking for additional help in respect of slum clearance. It has been made pretty clear by many of them to us that they regard themselves as the primary housing authorities, including slum clearance authorities, and that they do not wish to have, as they would say, interference in this respect from a superior authority.
LORD MORRISON OF LAMBETH: My Lords, has the noble Lord had this from the existing metropolitan boroughs or is he talking about outer London?
LORD HASTINGS: I am talking about the outer London boroughs, who have their own powers. We believe it is a good thing to stand, if we can, on the principle that the London boroughs are all primary authorities and are fully capable of carrying out their duties effectively. I must just point out to noble Lords that we have an Amendment down in the middle of this series: it is 83A. The point of that is this: we are at least trying to go a little way to meet the points made by noble Lords during the Committee stage.
Now we come to the question of the transitional powers and the transitional period. As the Bill is at present drafted, the Minister may continue these transitional powers so long as they are necessary. And it is not only a question of slum clearance powers; there are other powers which the L.C.C. possess, particularly in respect of improvement grants and so on; they are the other main powers. It would be the Minister's intention to continue these powers, especially in the inner London area, so long as they are necessary in order to enable the slum clearance programme as envisaged by the L.C.C. to be completed. In the Bill as at present drafted the Minister is taking powers to declare an end of the transitional period for different purposes on different days. It might be that he would say it is no longer necessary that the G.L.C. should have powers to give improvement grants, but they would still have powers to continue their slum clearance activities.
In addition, we are suggesting in this Amendment that we should extend the power to terminate transitional powers by making them not only on different days for different purposes but also in different areas, so that if there were,

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by chance, any particular area, particularly in inner London, which was behind with its slum clearance programme—in fact had not completed it as we envisage it at the present day—it would be possible to continue those powers in respect of such a borough, whereas in other boroughs who had made really good progress and had pretty well completed their programme the transitional powers would be able to be terminated.
LORD LATHAM: My Lords, has the Minister yet settled a limit of the time?
LORD HASTINGS: I was going to say, therefore, there is in fact no date for termination. It is entirely at the discretion of the Minister, obviously after consultation with the boroughs concerned and with the Greater London Council and after a review of the situation. And we are now taking additional powers for the Minister to terminate the transitional slum clearance powers to be accorded to the G.L.C. in different areas at different times as well.
I hope very much, therefore, in the first place that I have explained sufficiently clearly to noble Lords that the Greater London Council has all the necessary powers to provide the housing for all London, wherever they are, and it is their duty to do so; secondly, that the transitional powers will be continued in respect of slum clearance so long as necessary, and in some cases longer in some areas than in others Therefore, apart from that, it is not really necessary to accept Amendments of the sort that have been put down by noble Lords opposite. We have objections to giving these powers and interfering with the powers of primary local building authorities in respect of the outer boroughs. I hope, with this explanation (which I am afraid has been a lengthy one, but we are dealing with about eight rather important Amendments at one and the same time), I have managed to convince noble Lords that the proposals of the Bill are perfectly effective, and that we wish to see the same results as noble Lords opposite. We believe that the way we have chosen is an effective way and the right way.
5.36 p.m.
LORD MORRISON OF LAMBETH: My Lords, I do not think the Government are living in a real world about
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this matter. The Minister has, for example, said that the Greater London Council, having taken over the L.C.C. housing estates, can use the vacancies to rehouse people from the boroughs; he has also indicated that the present L.C.C. estates will in due course be distributed among the boroughs and that therefore the rehousing of the slum clearance people can easily be solved. But what is going to happen about the existing very big waiting list of the London County Council, and indeed of the metropolitan boroughs, and presumably of the county districts outside the present County of London?
LORD HASTINGS: New building.
LORD MORRISON OF LAMBETH: New building; but you are not going to discontinue one system and think that the other system is going to evolve. Moreover, it is contemplated by the Government that the concurrent powers of the Greater London Council are to be temporary. It is no good the Minister hedging that; that is the intention of the Government—that the Minister can bring it to an end. Therefore this does not face the realities of the situation. The Minister of Housing and Local Government, of course, is a bit of a child in these matters; he is a new boy and an amateur; he has written or authorised the publication of a reckless White Paper in which he has made all sorts of promises while admitting that the Government have failed in one important promise that they made early on, the nature of which escapes my mind at the moment but it is in the White Paper.
LORD HASTINGS: It escapes my mind, too.
LORD MORRISON OF LAMBETH: He is making in that White Paper a number of reckless promises. He will not be able to keep them. That does not matter; he will not be the Minister of Housing and Local Government any more. In fact, this Government will not be in office. Then he will get up and attack his successor for not keeping the promises he himself has made. He is a great man for promises, the present Minister of Housing and Local Government. By inference, he has to admit

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that London, the L.C.C. and the metropolitan boroughs between them, have been more successful in slum clearance than the other great cities of the country.
But having made these promises, which in particular apply to London as well as to other parts of the country, what does he do? He comes along with this dogma, which he has inherited from the London Municipal Society as the true authors of the Bill. His predecessor in office, the present Home Secretary, when the Labour Party obtained a majority in the L.C.C. in 1934, said: "I shall not be happy until this Socialist Council is destroyed"; and this is how he keeps his promise—by legislation, because he cannot win an election democratically. The Government, having done that, then come along with this dogma that everything possible must go to the boroughs. I am no enemy of the boroughs. I have been good friends with the metropolitan boroughs all my life. I started in public life as the mayor of a metropolitan borough. But there is a limit to what they can do, whereas the happy partnership between the London County Council and the metropolitan boroughs has really made an impression on the slum clearance problem of London. It has not ended it, but it has made a better impression on the slum clearance problem of London than has been shown elsewhere in the great cities of the provinces.
Now this curious Minister with his curious Department, backed by the London Municipal Society and the Association of Municipal Corporations, which do not know much about London anyway, comes along and says, "All possible powers to the boroughs! Make them as near county boroughs as you can, although they are functioning in almost continuous built-up areas in Greater London. Therefore, let the boroughs be the housing authorities. Let the Greater London Council have concurrent housing powers for a limited period, after which it is the intention of the Minister, confirmed by the Parliamentary Secretary, to terminate these powers of the Greater London Council." When he does that he is going to diminish the housing output; he is going to diminish the effectiveness of slum clearance, and he is going to diminish the whole housing effect, because he will have one engine with which to work,
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whereas he could have two if it were not for this wanton dogmatism from which this Department suffers.
And it all arises out of hatred of the London County Council—unreasoning hatred of the London County Council. So they say, "We have got to have a Greater London Council, because we want to abolish London altogether"—that is what they want to do. They say, "We will have a Greater London Council. But give it no more powers than you can possibly help." That is what they are doing. The consequence of all this is that the housing output of the London local authorities will in due time be diminished. Instead of the Minister keeping his promise, the powers will be diminished to make impracticable the keeping of such promises. He will leave each of these boroughs standing in isolation to solve its problems, except in regard to certain powers relating to overspill, and so on. Is it not much better—
LORD HASTINGS: My Lords, I do not accept that it is just in regard to overspill. There are powers in the Greater London Council to provide housing for Londoners, and these powers are permanent. They refer not to overspill outside London; they refer to finding houses for Londoners in London. They are permanent powers and they will never be abrogated.
LORD LATHAM: My Lords, the powers under Part III of the Housing Act are not permanent.
LORD HASTINGS: I agree. That concerns slum clearance, not housing. I have said that the housing powers are permanent.
LORD LATHAM: Is slum clearance not housing?
LORD MORRISON OF LAMBETH: My Lords, so we get to another point, that it can provide permanently for building new houses anywhere in Greater London or presumably outside. That is right?
LORD HASTINGS: That is right.
LORD MORRISON OF LAMBETH: That is under the new provisions? That is what I thought. But the Part III powers of slum clearance are for a limited period. If there is a case for permanent building powers, which there certainly is,

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there is no less a case for permanent slum clearance powers, and they should be enjoyed both by the Greater London Council and by the London boroughs. It is only by this partnership that London has made the material progress that it has in slum clearance, because some of these slums comprise considerable areas.
In regard to slum clearance, I was surprised to find that sometimes two-storey slum houses are so congested that, when you come to rehouse the occupiers in flats going up to great heights, it is not possible to do so because there are too many of them; therefore, you may have to rehouse them in another borough. Thus, the Greater London Council or the local council have a clearance problem. There may be slum property on the site, or a highway or school is being built, or perhaps an open space is being provided. If this is to be done by the borough, in due course, when the Minister "puts on the brakes", in many cases the borough will find itself in great difficulties in re-housing the people out of its own borough resources inside its own borough. In some cases it may be able to come to an arrangement with a neighbouring borough. But nearly all boroughs have their waiting lists, and they will not be too anxious to house people from another borough.
So that this pool of effort—the considerable body of professional technicians, the architects, the valuers, the engineers, and even the lawyers who are involved in this business—is of great importance. That is not to say that the boroughs cannot make a real contribution. They have done it; they could go on doing it. But the speed of slum clearance will be slowed down directly the Greater London Council is put out of business on the matter. The Government are living in cloud-cuckoo land in saying that somehow it will all work out all right in the end. I am not attacking the Parliamentary Secretary. He, poor chap, has to say what he is told to say to your Lordships; his brief is made up for him. This is the unhappy life of a Parliamentary Secretary in this House; it is worse than being a Parliamentary Secretary in the other place. He has his orders and instructions, either from his Minister or from those brilliant civil servants of the Ministry of Housing and Local Government, and he has got to do the best he can with them.
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Then, he has to meet those of us who are really pretty well informed and expert about this rt of thing. I do not attack the Parliamentary Secretary personally. In fact, I send him out my vote of sympathy; I am sorry for him, left with this ugly baby that has been put on his doorstep, or in his lap. It is a great pity. But you will fail in your slum clearance if you go on with this line. It all arises not so much as a matter of common sense or as a matter of careful and calm judgment on the part of the Ministry; it arises out of the violent prejudice against any all-London authority. They hate an all-London authority because they hate London. They hate London—and I love it. Just as the noble Lord, Lord McCorquodale of Newton, loves Epsom, I love London. And I say that, despite the Ministry of Housing and Local Government and the London Municipal Society, there will be a London. The Government are doing their best to destroy it. They are even doing their best to hold up slum clearance in the Greater London area. They are doing it deliberately. They know what they are doing, because it is another trend towards stopping London—
LORD HASTINGS: We are certainly not trying to hold up slum clearance. I cannot allow the noble Lord to say that. It is certainly quite the opposite.
LORD MORRISON OF LAMBETH: My Lords, the noble Lord will have to allow me to say it. I have said it, and I will repeat it.
Then in the last debate I quoted figures from an official publication of the Government about slum clearance in some of the boroughs in Middlesex and Essex. I quoted them all in good faith. They came from the Government's own publication. Now the poor Parliamentary Secretary is sent along with an explanation that these figures were wrong, or that they were presented in a way that was rather misleading. That is it! This is a fine Ministry which presents figures in an official publication in a misleading way. What reliance can one put upon this department or upon the Minister? Therefore, I think my noble friend Lord Latham was perfectly entitled to move this Amendment, and of course we can debate the others as they are put and if we want to.

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This is a wicked business. It will have evil social results, and it all arises out of the Government's prejudices, passions and hatreds. Therefore, I hope that noble Lords, including those on the other side of the House, many of whom are genuinely interested in slum clearance, will vote with us on this Amendment, because it will teach the Government a lesson. If the permanent building powers are to be permanent for the Greater London Council, why cannot the slum-clearance concurrent powers—not the exclusive powers—be permanent? Why should noble Lords opposite go into the Lobby and say, "There shall be no more Greater London Council slum clearance after the Minister has decided there shall not be"? Why should they support the Government's dogmas and prejudices? We went into the Lobby with noble Lords opposite last night on the question of Epsom and Ewell. We did it out of the goodness of our hearts; we did it because we thought they had a case, and for no other reason. I ask noble Lords, out of the goodness of their hearts, in sympathy with the plight of the slum-dwellers, those who live in darkness, in bad housing conditions, to vote with us against a proposition which is designed to slow down slum clearance in Greater London when this temporary period ends.
LORD LATHAM: My Lords, may I, first of all, express to the noble Lord, Lord Hastings, the appreciation of myself and my noble friends on this side of the Chamber for the sympathetic words which he was good enough to utter on the sad bereavement of our colleague, Lord Silkin?
This is really a very short point, even though it is expressed in Amendments of some complexity. The short point is: why is it proposed to terminate the slum clearance provisions in Part III of the Housing Act, 1957? The noble Lord made a long speech. I am not complaining of that, but no one who listened to it could agree that it confuted the submissions and arguments which have been put from this side on this matter both in the Committee stage and now. The noble Lord's long statement was justified in some respect in that he was anxious for us to have the background.
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Some of us on this side know something about slum clearance and about housing. It is all very well for the noble Lord to say that this is a matter of machinery; of course it is; but behind the machine are human beings. Dependent upon the machine are people whose health, comfort and happiness are being impaired and, in some cases, destroyed because they have to live in unhealthy slums and unhealthy housing accommodation. It is all very well for the noble Lord to point out that the Greater London Council will have obligations in the whole field of housing. Our complaint is not that the obligations are based upon the Greater London Council, but that the powers to carry out those obligations are to be taken away from them.
LORD HASTINGS: My Lords, I am sorry but the noble Lord is wrong. The housing powers refer to housing, that is, all Londoners in need of housing; the slum clearance powers are confined to knocking down the slums. The re-housing of people who live in those slums will continue to be a duty of the Greater London Council.
LORD LATHAM: Yes, but they are entitled to be considered only from the point of view of housing when their present accommodation is about to be demolished because it is unfit. It is idle to pretend that one can segregate slum clearance from housing generally. It is true that was the case in respect of certain subsidies, but it was a notional distinction. The point is that housing of the people is one job—whether it be providing houses for those who have recently married, or whether it be providing decent housing for those who are living in slums.
What is the situation? The London County Council, who have had powers which are to be denied to the Greater London Council, in the exercise of their powers over the last 50 years have done a magnificent job in clearing the slums of London. And there were some pretty bad slums—in fact there still are, but there were some extensive areas of bad slums in certain parts of London between the wars. The L.C.C. have been doing these things, as I say, for about 50 years. They have gained all

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that experience and knowledge which is to be denied to their successors because they will not have any powers to employ; the powers will just go—the noble Lord has said—either solely or partially; either selectively or as regards particular districts.
The Government are proposing to take the gamble that the machinery, denuded of these powers under Part III, will do the job better than if the powers remained to the Greater London Council and were exercised by them. In short, they intend to gamble with the health, comfort and happiness of the people of London. That is what they are proposing to do, and it is idle to talk about general housing as a kind of camouflage for what is intended in the provisions of the Bill. If the powers are considered useful—and experience has shown that they are—why should there
LORD HASTINGS: My Lords, I beg to move this Amendment formally. I have already spoken to it.
be any thought of terminating them until the last slum has been demolished in Greater London? What are to be the considerations which will guide the Minister in determining that the powers shall be terminated as regards this or that particular borough, but shall remain in force as regards the remainder? What are to be the standards? What are the tokens which will decide whether the powers are to be continued or discontinued? In these circumstances, I invite your Lordships to support this Amendment, otherwise you will be doing a serious injustice to those persons whom you will condemn for longer periods to live in the slums of London.
6.0 p.m.
On Question, Whether the said Amendment (No. 81) shall be agreed to?
Their Lordships divided: Contents, 25; Not-Contents, 73.

CONTENTS

Addison, V.

Crook, L.

Morrison of Lambeth, L.

Alexander of Hillsborough, E.

Greenhill, L.

Nathan, L.

Amwell, L.

Henderson, L.

Peddie, L.

Archibald, L.

Latham, L.

Rusholme, L.

Attlee, E.

Lawson, L.

Shepherd, L.

Burden, L. [Teller.]

Listowel, E.

Stonham, L.

Burton of Coventry, B.

Longford, E.

Summerskill, B.

Champion, L.

Lucan, E. [Teller.]

Walston, L.

Williams, L.

NOT-CONTENTS

Ailwyn, L.

Forster of Harraby, L.

Margesson, V.

Albemarle, E.

Fortescue, E.

Massereene and Ferrard, V.

Aldington, L.

Fraser of North Cape, L.

Merrivale, L.

Alexander of Tunis, E.

Furness, V.

Mills, V.

Allerton, L.

Gage, V.

Molson, L.

Ampthill, L.

Goschen, V. [Teller.]

Montgomery of Alamein, V.

Beauchamp, E.

Grantchester, L.

Napier and Ettrick, L.

Boston, L.

Grenfell, L.

Newton, L.

Bradford, E.

Guest, L.

Ormonde, M.

Bridgeman, V.

Hailsham, V. (L. President.)

Raglan, L.

Clitheroe, L.

Harris, L.

Remnant, L.

Colville of Culross, V.

Hastings, L.

St. Aldwyn, E. [Teller.]

Conesford, L.

Hawke, L.

St. Just, L.

Crathorne, L.

Home, E.

St. Oswald, L.

De La Warr, E.

Horsbrugh, B.

Salter, L.

Denham, L.

Howard of Glossop, L.

Sandford, L.

Derwent, L.

Howe, E.

Sinclair of Cleeve, L.

Devonshire, D.

Jellicoe, E.

Soulbury, V.

Dilhorne, L. (L. Chancellor.)

Lansdowne, M.

Spens, L.

Ebbisham, L.

Long, V.

Stonehaven, V.

Elliot of Harwood, B.

Lothian, M.

Stuart of Findhorn, V.

Exeter, M.

MacAndrew, L.

Swansea, L.

Falmouth, V.

McCorquodale of Newton, L.

Swinton, E.

Ferrers, E.

Mar and Kellie, E.

Waleran, L.

Ward of Witley, V.

Resolved in the negative, and Amendment disagreed to accordingly.

Amendment moved—
Page 28, line 7, at end insert ("or for different areas").—(Lord Hastings.)
On Question, Amendment agreed to.
Clause 23 [Transfer of land held for housing purposes]:
LORD AUCKLAND LORD AUCKLAND: My Lords, this Amendment is consequential on Amendment No. 38. I beg to move.
Amendment moved—
Page 30, line 35, leave out from beginning of line 35 to ("the") in line 37.—(Lord Auckland.)
On Question, Amendment agreed to.
Clause 24 [Local planning authorities]:
LORD HASTINGS: My Lords, Amendments Nos. 91 and 92 go together: they are the result of an undertaking which I gave in Committee to the noble Lord, Lord Latham, who had an Amendment down dealing with the same subject. Section 43 of the Planning Act provides machinery by which anyone can find out whether development is involved and whether an application for planning permission is required in respect of something they wish to do. Application is made to the local planning authority. As the Bill is drafted the Greater London Council would receive an application for planning permission, where a borough council had decided that development requiring planning permission was involved, if that development was of a class for which, by virtue of the regulations made under Clause 24(4), the Greater London Council would be the local planning authority. However, a borough council could determine an application under Section 43 if they decided that development was not involved.
The point of Lord Latham's Amendment was, of course, that they might be wrong in supposing that. Therefore the new sub-paragraph (a) repeats what is already in lines 7 and 8 on page 33 of the Bill for ordinary planning applications. But sub-paragraph (b) refers to the Section 43 type of case, and makes it clear that a borough council should send on to the Greater London Council any application relating to a proposal which, in the borough council's view, would constitute or involve development of a type referable to the Greater London Council if it constituted or involved development at all. I hope that that now meets the point that noble Lords opposite brought out on a previous occasion, and that they will be able to accept this Amendment. I beg to move.
Amendment moved—
Page 33, line 5, after first ("for") insert ("or with respect to the need for").—(Lord Hastings.)
On Question, Amendment agreed to.
LORD HASTINGS: My Lords, I beg to move this Amendment formally.
Amendment moved—
Page 33, line 7, leave out from ("whom") to ("to") in line 8 and insert ("there is received—

(a) any application for planning permission for such development; or

(b) any application under section 43 of the Planning Act in the case of which it appears to that council that the proposed action to which the application relates would constitute or involve such development if it constituted or involved development at all, shall forward the application").—(Lord Hastings.)

On Question, Amendment agreed to.
6.12 p.m.
LORD BURDEN LORD BURDEN moved, in subsection (4), to omit all words from and including "and such development" down to "but". The noble Lord said: My Lords, on behalf of my noble friend Lord Latham I beg to move Amendment No. 93, and perhaps I may at the same time refer to Amendment No. 94, as the two are linked. The purpose of these Amendments is to provide that the Greater London Council should be treated as a local planning authority for the purpose of all their own development. Under the provisions now in the Bill, the Greater London Council would have to apply to the London borough concerned for planning permission to carry out any development necessary for its statutory functions, other than developments included in the classes or areas prescribed by regulations to be made by the Minister under Clause 24(4), even if this development were entirely in conformity with the development plan. A London borough council, on the other hand, would not need to seek planning permission provided a proposed development did not involve a substantial departure for the development plan and was not in a class or area covered by the regulations, to which I have already referred, made under Clause 24(4).
It can be fairly assumed, I think, that any development required by the Greater London Council would necessarily be of wider than borough significance. The Greater London Council, as a local

193
planning authority, may be expected to treat their own development in accordance with proper planning principles, and should therefore surely be placed in the same position as local planning authorities generally.
The first one of these Amendments was moved on Committee stage by my noble friend Lord Champion. My noble friend withdrew the Amendment, stating that it was proposed to consider the matter further before the Report stage. The noble Lord, Lord Hastings, seemed to be concerned to ensure that the Greater London Council should not be placed in the position of a superior body in relation to a London borough council. In matters of its own development, the London County Council does not proceed in the face of a sustained objection from a metropolitan council but refers the matter to the Minister. The relationship between the Greater London Council and a London borough in this matter should not, and obviously need not, be different from that which obtains to-day so far as developments of the L.C.C. are concerned, in consultation and co-operation with a metropolitan borough.
Again, the noble Lord, Lord Hastings, compared the Greater London Council, with a nationalised board, stating that the latter has to go through the ordinary planning authorities in order to get planning permission. As a matter of fact, in practice much of the operational work of the statutory undertakers is classified by development order as development not requiring planning permission. In any event, the comparison between a local authority and a nationalised commercial undertaking is really not valid. Moreover, as my noble friend Lord Champion pointed out, these boards are not planning authorities such as the Greater London Council will be.
May I sum up? The Amendments do not seek to detract in any way from the status of the London boroughs. What they seek is to provide for a less formal procedure whereby the Minister can be consulted on any difference between the Greater London Council and a London borough over proposed development by the Greater London Council, without the need for the delay which would arise from use of the formal appeals machinery. The Royal Commission, as was emphasised in the previous debate, laid it down that,
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primarily, housing should be the concern of the London boroughs; but, at the same time, it recognised that there would be cases where the Greater London Council would have to assume responsibility for development because of, say, lack of land or the necessary bringing of two or more London boroughs into the scheme of development.
I think everyone will agree that the London County Council has done a splendid job so far as housing is concerned, but this has been achieved by amicable co-operation between the metropolitan boroughs and the London County Council, in which they have met as equal partners. Why, in this Bill, place the Greater London Council in an inferior position to a London borough? Surely they ought to be able, under the provisions of this Bill, to meet as partners in the great enterprise of providing housing accommodation for the people of London. I submit that my Amendment will enable the great work to be continued with a minimum of friction and a minimum of delay. Therefore, my Lords, on those and other grounds I hope that the Minister will be able to accept the Amendment. I beg to move.
Amendment moved—
Page 33, line 10, leave out from ("them") to ("but") in line 14.—(Lord Burden.)
LORD HASTINGS: My Lords, as the noble Lord, Lord Burden, explained, this Amendment affects those sections of the Planning Act which relate to a local planning authority's own development. On the last occasion I replied to the noble Lord, Lord Champion, and the noble Lord, Lord Burden, has told the House some of the things I said. I am afraid that on this occasion—and I think I made it pretty plain, even during the Committee stage, that we should not change our minds on this matter—I really have nothing new to say to the noble Lord opposite.
His object is to ensure that for all development the Greater London Council itself would be the planning authority. Under the Bill the Greater London Council would be its own planning authority only in respect of development done under Clause 24(4), which refers to the Minister's making prescribed regulations. We maintain that it is unnecessary in all other cases that the Greater London Council should be its

195
own planning authority. We maintain there will be no difficulty about the Council's making the ordinary application to the local borough who will be the local planning authority for development in all other cases when it is dealing with general development matters not specified in Clause 24(4).
The noble Lord, Lord Burden, referred to the friendly relations between councils. There is no reason to expect that there will be any difficulties about this matter.
LORD BURDEN: The noble Lord is missing my point. They met as equal partners. Under the Bill the Greater London Council are placed in an inferior and subservient position.
LORD HASTINGS: I was coming precisely to that point; I was going to refer to the noble Lord's remarks. He said that he did not wish to reduce in any way the status of London boroughs. It
LORD CHAMPION LORD CHAMPION moved, after subsection (4), to insert:
"() In particular and without prejudice to the generality of the last foregoing subsection, regulations shall be made by the Minister under that subsection relating to development in that
is precisely because we take the same view that we do not want the Greater London Council to have these powers in the territories of the local boroughs except under Clause 24(4). Because, if we did so, it would reduce the boroughs' powers. The noble Lord went further and said that we were putting the Greater London Council in an inferior position. But we shall not be doing that. It will have its own power under the housing part of the Act, and it will have its own power under the development part in respect of Clause 24(4). We think that it is a position not of superiority nor of inferiority, but of equality. We wish to maintain that position. I cannot say any more except to ask the House to resist this Amendment.
6.23 p.m.
On Question, Whether the said Amendment (No. 93) shall be agreed to?
Their Lordships divided: Contents, 21; Not-Contents, 58.

CONTENTS

Addison, V.

Crook, L.

Morrison of Lambeth, L.

Alexander of Hillsborough, E.

Henderson, L.

Peddie, L.

Archibald, L.

Huntingdon, E.

Shepherd, L.

Attlee, E.

Latham, L.

Stonham, L.

Burden, L. [Teller.]

Lawson, L.

Summerskill, B.

Burton of Coventry, B.

Longford, E.

Walston, L.

Champion, L.

Lucan, E. [Teller.]

Williams, L.

NOT-CONTENTS

Ailwyn, L.

Ferrers, E.

McCorquodale of Newton, L.

Aldington, L.

Forster of Harraby, L.

Margesson, V.

Allerton, L.

Fortescue, E.

Massereene and Ferrard, V.

Auckland, L.

Fraser of North Cape, L.

Merrivale, L.

Beauchamp, E.

Furness, V.

Molson, L.

Boston, L.

Gage, V.

Montgomery of Alamein, V.

Bradford, E.

Goschen, V. [Teller.]

Newton, L.

Bridgeman, V.

Grenfell, L.

Raglan, L.

Carrington, L.

Hailsham, V. (L. President.)

Remnant, L.

Colville of Culross, V.

Harris, L.

St. Aldwyn, E. [Teller.]

Conesford, L.

Hastings, L.

St. Just, L.

Craigmyle, L.

Home, E.

St. Oswald, L.

Denham, L.

Howard of Glossop, L.

Salter, L.

Derwent, L.

Howe, E.

Sandford, L.

Devonshire, D.

Jellicoe, E.

Sandwich, E.

Dilhorne, L. (L. Chancellor.)

Lansdowne, M.

Stonehaven, V.

Ebbisham, L.

Long, V.

Stuart of Findhorn, V.

Elliot of Harwood, B.

Lothian, M.

Swansea, L.

Falmouth, V.

MacAndrew, L.

Waleran, L.

Ward of Witley, V.

Resolved in the negative, and Amendment disagreed to accordingly.

central area of Greater London bounded generally by a line connecting the main line railway termini."
The noble Lord said: My Lords, subsection (4) of this clause provides that the G.L.C. shall be the local planning authority in relation to the development of such areas as the Minister may by

197
regulation prescribe. Under the terms of the clause, the Minister is given no instruction by Parliament on the area or areas for which such regulations shall provide. For many years past, Parliament has rightly taken special interest in the central area of London and has been careful about developments that might lead to its unbalanced development. My noble friend Lord Silkin and the noble Lord, Lord Conesford, have taken a deep interest in this aspect of London's development and, as a result of their watchfulness, any legislation touching on this central area has been closely examined and instructions have been given by Parliament to the Minister responsible for this area on how it should be dealt with in any planning permissions given.
We have had a fairly recent example of this in the Transport Act, which went through your Lordships' House not very long ago, in which the Railways Board were circumscribed in the uses to which they might put their unwanted land round about the London termini which they propose to sell or use for development. The whole purpose of the Amendment that was moved to the Transport Bill was to prevent the Railways Board from making the most profitable use of that land by erecting upon it huge office blocks which would add to the congestion of Central London. I remember that the noble Lord, Lord Conesford, was very interested in this aspect of it and made a powerful speech upon it.
This Amendment requires that the Minister shall make regulations in respect of the central area. On the Committee stage the Government did not accept an Amendment, moved by the noble Lord, Lord Conesford, which would have defined the central area and made the G.L.C. the local planning authority for the area, which in his Amendment he attempted to define. The noble Earl, Lord Jellicoe, rejecting that Amendment, said that the Government felt that this matter had better be left to regulations to be made by the Minister under Clause 24. This Amendment is designed to meet the Minister's point to some extent, but recognises the serious concern expressed from all parts of the House on Committee stage.
The Amendment does not attempt to define precisely the central area, but would leave it to the Minister when he
198
comes to make his regulations. We consider that the development to be dealt with by the G.L.C. in this area should be broadly defined by Parliament in such a way as to ensure that everything of regional significance would go to the G.L.C.—and I would here stress the words "regional significance". If, as a result of such recognition, some applications of a purely local significance were caught up by the G.L.C., of course it would be possible for the Council to hand them on to the boroughs, and, provided they were of only local significance, the boroughs could deal with them in the ordinary way, for such delegation is made possible by subsection (5) of this clause.
The method we envisage would be more satisfactory than attempting to draw the definition so tightly that some of the applications of more than local significance in this vital area might not reach the G.L.C. I think that this comment is worth making, for it must be remembered that the Minister does not envisage that these regulations would make the G.L.C. the local planning authority—for example, so far as concern developments affecting a metropolitan road or those with much traffic control implication. The noble Earl told us that the Minister has in mind the boroughs being the local planning authority for such developments. They would be required to refer applications to the G.L.C. for directions only under subsection (6) of this clause.
Later Amendments, Nos. 107 and 108, seek to ensure that the G.L.C. will be the development plan authority for the central area, as was strongly advocated by the noble Lord, Lord Conesford. This would make it all the more important that the G.L.C. should have ultimate authority for planning applications in this central area, for the two functions are surely complementary the one to the other. I think that I can find no better way of recommending this Amendment to the House than using the words used by the noble Earl himself on Committee stage when he said [OFFICIAL REPORT, Vol. 250 (No. 86), col. 92]:
"I am saying that the possibility of unified control over a central area is certainly one of the things which my right honourable friend will wish to consider".
I hope that the Minister in this House has consulted with his right honourable

199
friend and that, as a result of this consideration, this Amendment which I am now moving will be accepted for, after all, what we are seeking to do here is giving statutory recognition to the words used by the noble Earl on Committee stage. I beg to move what I regard as an extremely important Amendment.
Amendment moved—
Page 33, line 19, at end insert the said subsection.—(Lord Champion.)
6.40 p.m.
THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE): My Lords, as the noble Lord, Lord Champion, said, we discussed a somewhat similar Amendment moved by my noble friend Lord Conesford on Committee stage. His Amendment was rejected. I am afraid that I have to ask your Lordships similarly to reject this Amendment, and I assure the noble Lord, Lord Champion, that I am doing so only after close consultation, not only with my right honourable friend, but also with his Ministry. I am doing so—to compress my argument as much as possible—for three main reasons. In the first place, there is, I believe, a point of principle involved here. In our concept, as the noble Lord knows, the Greater London Council is not the superior and the London borough the inferior authority. We regard them as co-existing as equals in their different spheres.
LORD MORRISON OF LAMBETH: My Lords, may I say that there has been no question about this in the existing set-up of the County of London, anyway since the Labour Party have been in power? We never regarded ourselves as superior to the boroughs. I always took the view that they were equal statutory, independent authorities. They do not come to us as a deputation, but to confer. I hope the noble Earl will not go on with this, because it is not talking about reality in the County of London government.
EARL JELLICOE: I am not talking about the County of London government; I am talking about the future setup. I heard the noble Lord, Lord Champion, say that the ultimate control should vest with the Greater London Council. Because of our concept, we have felt it wrong to cut the London boroughs out from two highly important functions of
200
any major local government authority—that is, development planning and development control. Here, of course, we are dealing with the second function, development control, and on later Amendments we will come to development planning.
The noble Lord's Amendment is drafted in very wide terms. He will correct me if I am wrong, but it would certainly appear to require that regulations should be made by my right honourable friend which would bring all development control within the central area, a vastly important and large area of London, within the purview of the Greater London Council. That is what I am advised the noble Lord's Amendment, as drafted, does. Given our general concept of the new structure of London government, we think it would be wrong to divest these large, important, experienced and responsible local authorities of their responsibility for development control—
LORD MORRISON OF LAMBETH: They are not experienced.
EARL JELLICOE: They will inherit a great deal of experience.
LORD MORRISON OF LAMBETH: That is another matter.
EARL JELLICOE: —unless the reasons for so doing are quite compelling. I would remind your Lordships that these central boroughs will have large resources. They will be able to employ, and we shall expect them to recruit and employ, architectural and planning teams of really high quality. They will be at least as jealous as some rather more remote body of what goes on in their areas—above all, of the physical transformation taking place in them—the very stuff of which development control is made.
My second reason for asking your Lordships to reject the Amendment—and I agree with the noble Lord that it is an important Amendment—is more practical and humdrum. As I have said, under this Amendment all development control within this large central area could, under the Minister's regulations, fall to be dealt with by the Greater London Council. This would bring a mass of detail, sometimes quite trivial detail, to the Council. The inevitable result, as I see it, would be a feeling

201
of frustration at the borough level and the clogging of the machine at Greater London Council level. I must again remind noble Lords that the Greater London Council will have important responsibilities of regional and strategic importance. Every proposal like this, which would involve them in a mass of purely technical detail, would prevent the Council and its officers from getting on with their major task.
My third reason for asking your Lordships to reject this Amendment is that I really do not think it is necessary. Under the clause as it stands, it will be possible, as I explained at Committee stage, for the Minister to prescribe, not only areas, but also the specific classes of development where the Greater London Council should exercise development control. In this way he will be able to pick out the kinds of development which have regional significance and also the areas to which this special control should apply. For example, his regulations would almost certainly embrace high buildings, and his requirements might very well be stricter in a central area than elsewhere. Similarly, the Minister could deal with large buildings, and again he could vary his bowling, as it were, making his requirements stricter towards the centre. Then, again, it would be quite possible—and I heard the noble Lord mention the words I used on the Committee stage—for the Minister, under the clause as it stands, to give the Greater London Council control of development in certain defined or historic areas at the centre or elsewhere, for that matter, and this could, of course, cover all development and not only special kinds of development. That might well be thought desirable in certain possibly rather narrowly defined areas.
I know that at our Committee stage a number of noble Lords were anxious that I should graft more flesh and blood on the Minister's intentions. But I am afraid that I must disappoint them. We feel that the particular types of development to be prescribed in the new regulations and the areas which the regulations should cover should wait on the election of the new authorities. That is for the simple reason that the Minister feels it right to consult both the Greater London Council and the new London boroughs before he promulgates these
202
regulations, and he certainly does not wish to prejudge the issues at this early stage.
In particular, he feels it wrong—and here I can assure the noble Lord, Lord Champion, that I have been in touch with him over this—to try at this moment to lay down, even as broadly as the noble Lord's Amendment would lay it down (and I admit he does not prescribe an area in precise detail, but it is an extremely large area), in advance of consultation with the local authorities, both the G.L.C. and the boroughs, the precise area such regulations should cover. The area of the noble Lord, Lord Champion, may be the right one; it may be too large; or it may be too small. We feel that before it is more precisely defined it is highly desirable that there should be that consultation with the authorities to be elected.
As we discussed this at some length in Committee, I should like to summarise my argument. First, we question whether it is right in principle to take these important boroughs at the heart of London right out of the whole business of development control, as this Amendment, as at least I read it, would do. Secondly, we think it would be a mistake in practice, since the result would be to clutter up the Greater London Council with a mass of detail. Thirdly, there are already adequate provisions in the Bill which ensure that the Greater London Council will be able to exercise effective control over significant developments at the centre of London, or indeed elsewhere, which impinge on the Greater London Plan or the Greater London Council's strategic planning function.
Fourthly, if we are going to define a central area—and that possibility is provided for in the Bill as drafted—we feel that this is best done after the consultations which it is certainly my right honourable friend's intention to hold with these important new authorities, including, of course, the Greater London Council. It is for those reasons that, in replying to the noble Lord, Lord Champion, I find myself in much the same position as I did when replying to my noble friend Lord Conesford, and must advise your Lordships not to accept this Amendment.
LORD CONESFORD: My Lords, I would say, very briefly, that I believe as emphatically as I did on May 20 in the

203
validity of the case for the Amendment which I then proposed. On that occasion I found myself in agreement with a certain number of my noble friends and with noble Lords on the other side of the Committee, as it then was, and we voted in a very important Division. Although the Amendment now moved by the noble Lord, Lord Champion, has some of the same intentions as the Amendment which I then moved, I honestly do not believe that it would have the same effect. What I was then most concerned with was not so much development control as ensuring the planning of the centre of London by a single authority. I do not believe that that result would be brought about by this Amendment, however well-intentioned it is. While I wished to explain why I do not think I could support the present Amendment, that does not mean that I do not believe entirely in the case which I made on May 20 and on which the Committee then voted.
LORD CHAMPION: My Lords, I am sorry that we cannot have the support of the noble Lord, Lord Conesford, on this Amendment. What we have argued in connection with it is that the applications and the development plan are really inseparable in this matter of planning the central London area. Here we are dealing only with the applications and that aspect of planning. In later Amendments, which I think will be much nearer the heart of the noble Lord, Lord Conesford, judging by what he has now said, we shall be returning to something which I think will have his support.
I am grateful to the noble Earl for the consideration which he has given to this matter between Committee and Report. My only regret is that that consideration did not lead him to accept the point of view that was so widely expressed on the Committee stage. I rather hoped that it would. I do not think that we can accept completely the three reasons that he has given for rejecting it. In the first place, he said that he did not want the G.L.C. to be a superior body and the boroughs inferior. I would only say that, clearly, for such an area as we are here considering somebody must be able to say how the whole area is to be planned. Somebody must be able to control that development, and we say that it ought to be controlled by a body such
204
as the G.L.C. So I cannot accept the first of these reasons. I certainly could not accept the supporting reason he gave: that these borough councils will be experienced bodies. As my noble friend Lord Morrison of Lambeth pointed out, they are not yet in existence, so it would be a bit of a job for them to be experienced in this regard.
EARL JELLICOE: My Lords, I wonder whether the noble Lord would permit me to make a correction. I think I used the words, "large, important and responsible". I certainly added the word "experienced", to which I plead guilty. But I was thinking, as I wanted to make clear in reply to the interjection by the noble Lord, Lord Morrison of Lambeth, of the transmitted experience which they would be inheriting.
LORD CHAMPION: My Lords, I am sure the noble Lord will forgive me if I do what most debaters do and seize on the weakest point in my enemy's argument. The use of the word "experience" was the weakest point in the argument adduced by the noble Earl.
The second point he made was that this would bring in a mass of detail to the Greater London Council level. As I understand it, these applications would come into the Greater London Council, and it would be possible for that Council, under delegation (for which provision is made in the Bill), to sort out these applications and to send on to the boroughs those applications which had nothing more than purely local significance. This we think could be done administratively, without any great difficulty, by the Greater London Council. I certainly do not want to see that body snowed under by applications and weight of paper, but their function would be to sort out applications in order to ensure that the Greater London Council dealt only with those matters which had central area significance as a whole.
The third reason the noble Earl gave us was that, as the clause stands, the Minister, under regulations, would be able to pick out the matters which necessitated the active concern of the Greater London Council in granting or refusing applications. In this matter of the central area, I tried to point out in my speech that Parliament has always been deeply interested in this area. Parliament itself

205
has from time to time ensured that in Bills which have gone through this House and another place, instructions are given to the Minister about this area. The Minister talked about more flesh and blood being given by Parliament to legislation going through this House on this matter. We believe precisely that. We believe that more flesh and blood should be given to this particular aspect of the Bill, in order to ensure that the Minister makes regulations covering this area, and that vie Greater London Council should be the body responsible for all aspects of its development.
I am fairly sure that the noble Earl is not now going to get up and say that, having regard to everything I have said, he will accept the Amendment. All I suggest to him is that he gives this matter further consideration between now and Third Reading, when we in this House have the advantage of being able to move Amendments. Despite my plea to him on this, I do not feel able to withdraw this Amendment, and I feel that we ought to divide upon it.
LORD MORRISON OF LAMBETH: My Lords, I did not intend to say anything, but I am prompted by the observation of the noble Earl to the effect that the London boroughs would be experienced (among other adjectives he used) in this matter. It has now been interpreted that this experience would be transmitted from the present London County Council. But it is impossible to legislate for transmission in that sense. There is no guarantee, no certainty, that the architectural staff of the London County Council will be distributed among the boroughs. Therefore, the argument that there will be an automatic transmission is ill-founded. It is not accurate. I think that, on reflection, the noble Earl will himself agree on that. They will have to start de novo; they will have to learn as they go. It is true that under the Bill the major plan (I never understand the distinction between the strategical and the tactical as applied to public administration, and I think we ought to leave off using those terms and find something that is more readily understood) for London will be made by the Greater London Council, and that the borough plans, subject to certain consultations, and so on, will be made by the boroughs themselves. The noble Earl
206
used the language of "superior" and "inferior". I do not think my noble friend talked about the "inferior". It is a question of providing, in certain circumstances, which is the more appropriate authority to do a certain job.
We were very much impressed at the Committee stage by the noble Lord, Lord Conesford, who has now retired from the fray. He does not like our Amendment, but is not moving one of his own, so far as I can tell. So I suppose the Whips have got hold of him and persuaded him to be a good lad, which he is now proceeding to be—not for the first time in our island story. I am sorry that we have lost the noble Lord, Lord Cones-ford; he was a valuable ally. Indeed, we supported him on one Amendment; and now we find this base ingratitude when my noble friend Lord Champion has been so careful and constructive.
THE EARL OF LONGFORD: He is a lost leader.
LORD MORRISON OF LAMBETH: Yes; we had that quote in another place about "the lost leader"; and here is another one.
LORD CONESFORD: My Lords, may I interrupt? I assure the noble Lord that, if I thought this Amendment had the same effect as the Amendment which I moved on the last occasion, I should certainly support it. But I do not think that, as a matter of law, it has the same effect at all.
LORD MORRISON OF LAMBETH: I do not know. I thought that in principle it was much the same, and that it was a brilliant stroke of genius on the part of my noble friend that determined the area by the London railway terminals. This is a very good idea and about fits it. It may be that the Minister should have power to modify it if necessary; but it does about fit it. And I thought myself, directly I read it, that this would get the support of the noble Lord, Lord Conesford; but now he has left us and he is going into the Government Lobby.
LORD CONESFORD: No.
LORD MORRISON OF LAMBETH: The noble Lord is not coming into our Lobby either, and I do not know where he is going. He is lost altogether. That is a sad finish to a great life. He is going to be nowhere on this great issue.

207
The method that my noble friend has recommended is a better method than the Minister of State for the Home Office suggests that the Minister will follow. If the Minister is faced with the problem of picking out certain historical buildings and other places, such as Piccadilly Circus, but nothing else, he is going to run the risk of some development taking place with planning permission of the local borough council which may impede the view of the picked-out "highlights" of the area and therefore may endanger the whole thing; whereas the recommendation of my noble friend is that we define this area whore the Greater London Council shall have the power conferred upon them, subject to the understanding that all ordinary applications can be delegated to the London borough.
That seems to be much more sensible, because you can have two or three ordinary places near to one of the "highlight" places, and it may be equally important that you control development of those ordinary places in order to protect the "highlight"
Resolved in the negative and Amendment disagreed to accordingly.
7.12 p.m.
EARL JELLICOE EARL JELLICOE moved in subsection (6)(b), after "Common Council", to insert "(i)". The noble Earl said: My Lords, I should like to move this Amendment together with Amendments 97 and
place. I am using language which I think is better than "strategic" and "tactical"; and I am sorry, therefore, that the Government will not accept this Amendment to which my noble friend has given a great deal of thought. Let us hope that things will work out all right; but I am not sure they will, because the Minister will give everything conceivable he can to the borough, irrespective of the public interest. That is the bias from which he starts, and I would rather have had it our way. So we propose to divide, and we still hope against hope that that great planner and enthusiast for reasonable planning, and particularly protection for central London, will come into our Lobby and vote with us, instead of running the risk of being dragged into the other Lobby and voting against the speeches which he made on Committee stage.
7.5 p.m.
On Question, Whether the said Amendment (No. 95) shall be agreed to?
Their Lordships divided:—Contents, 18; Not-Contents, 47.

CONTENTS

Addison, V.

Burton of Coventry, B.

Lucan, E. [Teller.]

Alexander of Hillsborough, E.

Champion, L.

Morrison of Lambeth, L.

Amulree, L.

Crook, L.

Peddie, L.

Archibald, L.

Latham, L.

Shepherd, L.

Attlee, E.

Lawson, L.

Stonham, L.

Burden, L. [Teller.]

Longford, E.

Summerskill, B.

NOT-CONTENTS

Ailwyn, L.

Fraser of North Cape, L.

Molson, L.

Aldington, L.

Furness, V.

Montgomery of Alamein, V.

Allerton, L.

Gage, V.

Newton, L.

Auckland, L.

Goschen, V. [Teller.]

Ormonde, M.

Beauchamp, E.

Grenfell, L.

Raglan, L.

Boston, L.

Hailsham, V. (L. President.)

Remnant, L.

Craigmyle, L.

Harris, L.

St. Aldwyn, E. [Teller.]

De La Warr, E.

Hastings, L.

St. Oswald, L.

Derwent, L.

Howard of Glossop, L.

Sandford, L.

Devonshire, D.

Jellicoe, E.

Sinclair of Cleeve, L.

Dundee, E.

Lansdowne, M.

Stonehaven, V.

Ebbisham, L.

Long, V.

Stuart of Findhorn, V.

Elliot of Harwood, B.

Lothian, M.

Swinton, E.

Ferrers, E.

Mabane, L.

Tweedsmuir, L.

Forster of Harraby, L.

Margesson, V.

Waleran, L.

Fortescue, E.

Massereene and Ferrard, V.

99. During the Committee stage I confessed, rather rashly, that I found some little difficulty in understanding the precise meaning of this particular subsection. I think I had even more difficulty in explaining its beauties and mysteries to your Lordships at that time. In any event, I said during our discussion that I

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should be glad to have a close look at the drafting of this part of the clause. I have had it, and as a result I am now moving these three linked Amendments. One reason why I think the sense of this particular subsection is not altogether easy to grasp at first sight is that it provides for a number of distinct actions in one formula.
LORD LATHAM: That is not unique, is it?
EARL JELLICOE: No; but it does it in very compressed language in this case. When one breaks down the individual items I think the purpose can more clearly be seen. I should now like to do so, not least because I think it may help us a little in our discussion of some of the Amendments following these Amendments. It may take a minute or two, for which I apologise in advance, and I should like to couple my apology with a warning that what I am going to say will be incredibly dull.
The subsection opens with a reference to Sections 19 to 22 of the Planning Act. These give the Minister power to require certain steps to be taken by a planning authority in dealing with applications for planning permission, and they give the Ministers concerned power to make directions at the same time. Subsection (6), while preserving this for the new, Greater London set-up, in addition makes further provision for the special situation arising from the establishment of the two sets of authorities, the Greater London Council and the boroughs. I have said the subsection is a little complicated because it deals with a number of different situations. There are three main situations; first, the applications dealt with by the G.L.C. in the first instance, which may need to be referred to the Minister—the paragraph (a) situation. Then there are the applications dealt with by a borough council, which may need to be referred to the G.L.C.—paragraph (b)(i); and other such applications which may need to be referred to the Minister—paragraph (b)(ii) as re-drafted. There are, lastly, applications referred by the borough council to the G.L.C. which, in some circumstances, may also need to be referred to the Minister—that is, paragraph (c). I should like to say a word or two about each of these three different situations.
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Let me recall that the Greater London Council will be dealing with all development of real importance, from the regional point of view—what I have learned to call strategic developments, but, in deference to the noble Lord, Lord Morrison of Lambeth, I will endeavour to find another term for them. That is as laid down in subsection (4) of Clause 24. Paragraph (a) of subsection (6) deals with such development. It enables the Minister to define particular classes of development within this field which need to be referred to him. This will, of course, not transfer the application to him, because "reference" in the context used here is intended to mean consultation. The intention is that the Minister should have the same opportunity to see any particular type of application with which the G.L.C. may be dealing as he has elsewhere for applications dealt with by other planning authorities throughout the country. The sort of case we have in mind, though there might be others, is a development which amounts to a substantial departure from the development plan, the Greater London Plan or the local development plan, or which, if not a substantial departure, is nevertheless likely to have a damaging effect on amenities.
Now I come to paragraph (b). Here we are dealing with applications on which the decisions will be given by the borough councils; that is, development other than that specified in Clause 24(4) of the Bill. Paragraph (b) machinery will operate in two ways, and my Amendments are intended to make their operation clearer. I think it was obscure in the subsection as originally drafted. In the first place, we propose to ensure that the G.L.C. should be consulted before a borough consents to development which may have a bearing on other planning at G.L.C. level. There is a variety of possible developments which might fall into this category. There is, for example, development along a metropolitan road—a petrol filling station, for example—perhaps not very important in itself but significant to the G.L.C. as the highway and traffic authority.
Then, again, this paragraph might well cover development of a kind similar to, but not as important as, development covered in the class prescribed in Clause

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24(4). An example could be a big building creating employment. In the central area of London this might well be caught by the 24(4) regulations. But in the outer or peripheral areas the Minister, after consultation, might well decide that the 24(6) machinery would suffice. In any event, paragraph (b) will enable the Minister to provide by regulations that for such classes of development as is thought right the G.L.C. should be consulted before the decision is given if the borough council wish to approve permission. Those regulations will, of course, have to cover any development inconsistent with the Greater London Plan. This is spelled out in terms of the words at the top of page 34, which was added on an undertaking by my right honourable friend in another place so that the G.L.C. should know of any proposed departure, small or big, from the Greater London Plan. That also is provided for in terms.
Here I should like to make one small digression. Your Lordships may recall that on our Committee stage the noble Lord, Lord Faringdon, moved an Amendment to Clause 28. What he was doing was to suggest that not only what are termed buildings on Class 1 and Class 2 of the Statutory List of Historic Buildings, and not only applications affecting buildings on those classes, but also applications affecting buildings on the so-called supplementary list, should be referred to the G.L.C. if an application comes into a borough. I said that I would undertake to reconsider that point and, on my undertaking, he withdrew his Amendment. In looking into this we have realised that there is no need to amend the Bill here. It was agreed during the Committee stage in another place that the regulations to be made under these powers in Clause 24(6) will provide for planning applications affecting buildings on the Statutory List to go to the G.L.C. if the borough intend to allow the application. The G.L.C. would then have an opportunity to discuss the matter with the borough and, if necessary, to direct a refusal of permission or issue a direction that permission should be given only subject to certain conditions.
We have decided that the simplest and most logical course would be to extend the scope of these regulations to cover applications affecting buildings included in the supplementary list as well. It is
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the Government's intention that this should be done. I wanted, as it were, to read our intentions here into Hansard, because I gave a clear undertaking to the noble Lord, Lord Faringdon, that I would reconsider this point.
I now come to the second limb of paragraph (b)—the reference to the Minister. The object of this is to provide for the borough councils the same Ministerial control as applies to planning authorities generally and, in fact, as is provided for in paragraph (a) for the development with which the G.L.C. will deal. The purpose is to see that the Minister is informed of any substantial departure, or departures, which are damaging to amenities, which a borough council may wish to approve but which do not need to be referred to the G.L.C. As I explained in Committee, the object of this separate line, as it were, to the Minister is not to cut out the G.L.C. from matters which concern them, but simply to bring into the right channel matters which are not of regional concern but which, being substantial departures, ought to be looked at by the Minister to see whether the public should have an opportunity to voice an opinion, for example, at a public inquiry.
Lastly, there is paragraph (c). This will enable the Minister to see particular types of case referred by a borough council to the G.L.C. under the paragraph (b) machinery. Take the case of a substantial departure from the local or borough development plan which is of wider than borough application. The first stage would be for the borough council to refer it to the G.L.C. under paragraph (b)(i) because it is of regional interest. If the G.L.C. in their turn think that the application should be approved, the Minister, by reason of this provision, could require them first to refer it to him because it is a substantial departure. This, I think, is absolutely right and squares with paragraph (a).
Finally, in the words following on after paragraph (c), teeth are put into all this by the provision that either the G.L.C. or the Minister, on having an application referred to them, may give directions as to the manner in which the application is to be dealt with. This provision in fact gives them considerable say as to how the development should be handled. They could direct that it should be refused or that it should be

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allowed only subject to specific and defined conditions. If this were an application originating with a borough council, sent on to the G.L.C. and then sent on to the Minister, the Minister would give any directions to the G.L.C., who would then pass them on to the borough council—so that the G.L.C. would be fully informed.
I should like to claim that the machinery embodied in Clause 24(6) is logical and sensible. It will permit regulations to be made to ensure that before permissions are given, either at the borough or G.L.C. level, the G.L.C. or the Minister is brought in at the appropriate stage. Of course a lot will depend on how all this is spelled out in the regulations to be made. I would add here that these regulations will be made only after the fullest possible consultation with those concerned—the G.L.C., the boroughs or any association which the boroughs may establish. Meanwhile, I am satisfied now that the enabling provisions, as now set out in this subsction as amended, are adequate. I hope that your Lordships will agree with me. I again apologise for having taken a certain amount of time, but I have tried to throw some light upon what, to me at least, has been a rather dark place in the Bill. I beg to move.
Amendment moved—
Page 33, line 40, at beginning insert ("(i)").—(Earl Jellicoe.)
LORD STONHAM: My Lords, there was no need at all for the noble Earl to apologise. I think his further elucidation of what he called "the beauties and mysteries of subsection (6)" has been most helpful, and indeed the Amendment he is now moving goes some way towards meeting the point in the Amendments which I hope to move later on. Therefore, we welcome the Amendments. But I am bound to say that we feel that they go only some way. He has made it clear that the Minister will make it possible, by regulations which it is proposed to introduce, to define certain classes of case where the Greater London Council will be consulted on matters which are presumably a substantial departure from the plan.
EARL JELLICOE: Or of regional significance.
LORD STONHAM: Yes. I did make a note that the object is not to cut out
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the G.L.C., but to see that they are consulted on matters of regional significance. I am glad that at least this has been conceded. I am also grateful for his explanation of the examples of the kind of cases where the G.L.C. will be consulted; I am sure that they will repay careful consideration and will prove helpful. But I think that the difference between the noble Earl and myself in this matter was made clear when he was dealing with the point which was raised in Committee by my noble friend Lord Faringdon on Clause 28. The noble Earl then said that he wanted to read the Government's intention into Hansard. I am quite sure that we are grateful for that; but our general view is that it is much better and much safer in such circumstances, not merely to read the intentions into Hansard but to put them into the Statute. But I do not want to niggle at this. I think it is a step in the right direction, but only half a step. However, even as such, we welcome the Amendment.
On Question, Amendment agreed to.
EARL JELLICOE: My Lords, this Amendment is consequential. I beg to move.
Amendment moved—
Page 33, line 40, after ("or") insert—
("(ii) in such cases as the regulations may prescribe").—(Earl Jellicoe.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, in view of the time, I beg to move that the House do adjourn during pleasure until half past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended at half past seven and resumed at half past eight o'clock.]
LORD STONHAM LORD STONHAM moved, in subsection (6)(b), to leave out "or to the Minister". The noble Lord said: My Lords, I beg to move this Amendment, and I hope that it will meet the convenience of your Lordships if I discuss with it Amendments Nos. 100 and 101. I should like to mention to the noble Earl, Lord Jellicoe, that it is not by inadvertence that I have refrained from mentioning 99A, because, even if he accepts Amendment 98, I shall

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not move 99A, since the point is already covered in an explanation he gave on Committee stage. But the other three Amendments are linked.
They can be summed up in one word: consultation—the importance of according to the Greater London Council on these planning matters essential consultation. These three Amendments particularly emphasise the fact that the Greater London Council should not be by-passed, where proposed departures from a local development plan do not happen also to be departures from the Greater London development plan.
We feel, of course, that the local plan must not depart from the Greater London development plan. The Greater London Council is allowed, or invited, to give observations to the Minister on the proposed contents of the local plans, and in our submission the Council should therefore be allowed to give observations on any proposals to grant planning permission contrary to the provisions of the local plans. I am well aware that to a limited extent—and the noble Earl may well feel to the necessary extent—the point has been conceded in the Amendment he himself moved before the dinner adjournment, but, as I then forecast, we do not share that view.
During the Committee stage my noble friend Lord Silkin withdrew a similar Amendment to No. 98, on receiving an assurance from the noble Earl that he would look at this particular subsection again; indeed, it is obvious from his earlier remarks that it worried him to some extent. I would not go so far as to say that the noble Earl admitted that he did not quite understand it, but its full beauty was not apparent to him until he made it the subject of further study. In the same way, the essence of Amendments Nos. 100 and 101 was discussed at the same time in Committee, but they were not moved, pending consideration by the Government of the general principle involved.
The noble Lord made the point during Committee stage that the Minister would in any case have approved the local development plan after a local inquiry; that if the borough wished to approve something which departed substantially from it the Minister would be told of the proposed procedure, so that if he thought
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an inquiry should first be held, he could call in an application and arrange for it. He also pointed out that the purpose of direct reference from the boroughs to the Minister was not to bring the Minister, as opposed to the Greater London Council, into the decision-making process, but to enable him to initiate the inquiry machinery—something which obviously the Greater London Council could not do; and that to introduce the Council as a step on the way to the Minister would have, in the noble Earl's submission, the inevitable result of slowing up the whole planning machine. We do not accept that reasoning, and that is why I am moving these Amendments.
Of course the Minister will have approved the local development plan not only after a local inquiry, but also after taking into account the views of the Greater London Council, as provided for in the Bill. But if the Minister needs to consider whether the public should be given a chance to make their views known on a departure from the plan which has bean proposed by a borough council, then obviously these must be matters of sufficient importance to ask for the views of the Greater London Council to be made known also. I would emphasise to the noble Earl this point of difference between us: that it is not in particular circumstances, as decided by the Minister in accordance with the regulations which he has now explained it is proposed to make, but it is indeed a matter of right, and I would have submitted of necessity, that the views of the G.L.C. should be made known. Because, after all, we are talking about substantial departures from the plan. The noble Earl had some diffidence about accepting the description "strategic" plan. It is a word I am going to use, because I have not thought of a better one. It could perhaps be called a master plan.
EARL JELLICOE: My Lords, I hesitate to interrupt the noble Lord, but it was his noble friend Lord Morrison of Lambeth who was worried about "strategic". I think it is an admirable adjective to describe this.
LORD STONHAM: That possibly accounts for the difficulty which I myself have found in finding a better word. But if I use the word "strategic" the

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noble Earl will forgive me. We are talking about substantial departures from the plan and, if the Minister should feel it necessary under the present arrangements to ask the Greater London Council for their views on any particular proposed substantial departure from the plan sent to him by a borough, this is where delay would come in. There is every reason, therefore, as we suggest in these Amendments, for a borough to refer a proposed substantial departure at the same time to the Greater London Council and to the Minister. I submit that, obviously, if that were done it would involve no delay whatsoever. I must point out to the noble Earl that the Minister's part in the case of a proposed substantial departure from the plan is not just confined to deciding whether a public inquiry should be held. Without holding an inquiry, even he can—and he does—come in to the decision-making process, by directing a planning authority not to grant permission for development where he considers that it would be wrong in the public interest to allow a proposed substantial departure from the plan.
Unless there is something wrong with the local development plan, the boroughs should not be coming up with very many proposed substantial departures from the strategic plan. If they do, then the Greater London Council, the major partner with the Minister in the framing of the strategic plan, should obviously not be by-passed. In our submission, this is an important point of principle, and we think it is an important point of actual practical application. So far as I can understand it, the Government's view is that departures from detailed zoning should be no concern of the authority for preparing the master plan. I confess that I find such a view most extraordinary. It might be arguable if we were dealing with a situation in a scattered county, but it cannot possibly be so in a continuous built-up area such as Greater London. Indeed, I submit that the Bill recognises this by providing that the detailed zoning proposals themselves, or any proposed changes in them, should go to the Minister via the Greater London Council, and by giving the Council a statutory right to make observations on them to the Minister. In my submission, it is quite illogical
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to provide different methods in the case of a proposed infringement of this zoning.
As my noble friend Lord Faringdon pointed out during the Committee stage, a number of what he described as "little nibblings" into local plans would, added together, cumulatively have a very adverse effect on the main strategic plan. Obviously, the Greater London Council would not wish to concern itself further with any proposed substantial departures from a local plan which would not affect it as the body charged with the responsibility for preparing and keeping under review the whole strategic plan, but it should know of them—and that is the whole point of these Amendments. It should know of them as of right and as of common sense, so that it can be a judge of the matter, a judge of the importance of the variations and a judge of the effect on the main strategic plan, of which the local plan is an important part. Indeed, in the speech which the noble Earl made on the Amendment he moved prior to the adjournment, it seemed to me that in a considerable degree he was conceding that point.
My noble friend Lord Silkin said during the discussions on a similar Amendment at Committee stage that consideration should be given to whether or not it would save a great deal of trouble in the long run if the Greater London Council were informed of all these applications which in any case involve a departure from the plan. He said that if they are trivial, then obviously no further action will be taken by the Council; if they are important, then they—that is, the Greater London Council—can make representations to the Minister. That seems to me to put the whole thing in a nutshell. This is not, so far as I am concerned, a matter of passion; it is a matter of common sense and administrative convenience. It would seem to me that the major authority, in many respects the partner of the Minister in these matters, should be automatically consulted or informed at the same time as the Minister is informed, and that they should have the automatic right of making representations to the Minister in any matters where they think it appropriate to do so. That seems to me to be a wholly reasonable suggestion to make, and I

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hope it will be acceptable to the Government. My Lords, I beg to move.
Amendment moved—
Page 33, line 40, leave out ("or to the Minister").—(Lord Stonham.)
EARL JELLICOE: My Lords, I am grateful to learn from the noble Lord, Lord Stonham, that noble Lords opposite accept the view which I rather hesitantly expressed on Committee stage, that the requirement which they had written into their Amendment No. 99A was, in fact, already covered in the Bill as drafted. I do not think that the noble Lord, Lord Stonham, will be entirely surprised to hear that, notwithstanding the fact that in my previous Amendment I went some way to meet the views expressed by noble Lords opposite on our Committee stage, I am reluctant to accept—in fact, I cannot advise your Lordships to accept—the three Amendments which the noble Lord is now discussing.
I will seek to explain why. I think for simplicity's sake it might be easiest if I take the three Amendments in two groups—first, Amendment 98, and then Amendments 100 and 101—although I know they are intimately linked and the noble Lord has been quite right to move them together. So far as Amendment No. 98 is concerned I would remind the noble Lord of what I said in moving my previous Amendments to Clause 24(6): that in the sort of case envisaged here the Minister would already have approved development plans after a local inquiry. If a planning authority wished to approve something substantially departing from that local development plan, the Minister is told, mainly so that if he thinks it necessary an inquiry can be initiated. In such a case—assuming there is nothing of regional significance in the application, for if there were the application would go straight away to the Greater London Council under the regulations which are provided for in the Bill—there is, I would submit, no point in referring such an application to the Greater London Council.
LORD STONHAM: My Lords, forgive me for interrupting. The noble Earl mentioned that if the particular matter had regional significance it would go automatically to the Greater London
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Council. Could he point out to me the authority for that in the Bill?
EARL JELLICOE: The authority is provided for in the regulations which will be promulgated under Clause 24(4) and 24(6) and, more specifically, under paragraph (b)(i) of the new Clause 24(6). In the event, the Greater London Council themselves could not hold an inquiry; as another planning authority with responsibilities over much the same territory, they could not take the place of the Minister in resolving public doubt. I would say here what I said in Committee stage: to introduce them, as the Amendment would do, would be merely adding another step on the way up to the Minister. It would import—and I would argue that it would import quite gratuitously—one additional factor of delay into the planning machinery.
The noble Lord said that this would not involve further delay, but it would be bound to do so if an extra stage is to mean anything. The Greater London Council would have to consider the application, formulate their views on it and submit their views on it to the Minister; and naturally the Minister could not take his decision until those views had been submitted. It would, therefore, be bound to add another considerable factor of delay. We all know that unnecessary delay is one of the accusations laid at the door of planners and planning, and where we can avoid it I do suggest we should try to do so.
I would feel quite differently about this Amendment if the Bill did not already provide ample machinery for bringing to the Greater London Council all the things which really concern them in their regional planning capacity. There is the Clause 24(4) and the Clause 24(6) machinery, and there is paragraph (b)(i). I would suggest in all seriousness—and I know that one cannot be passionate about this, although it is a passionate matter—that it is right for us to seek to maintain this separate channel between the borough and the Minister for cases which have no Greater London Council significance at all. It would be a mistake to close it, as would acceptance of this Amendment No. 98.
If I may now turn to the linked twin Amendments 100 and 101, I should like to remind your Lordships here that the

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concluding words of Clause 24(6), on which these Amendments would bite, were added as a result of an undertaking given by my right honourable friend in another place on the Committee stage. It had been said that the G.L.C. should automatically know of applications which ran counter to the Greater London Development Plan, and my right honourable friend then said that he always had it in mind to make regulations to ensure that the G.L.C. knew of all departures—I emphasise "all"—from the plan they themselves had made. To make this matter quite clear, the clause now requires in terms that the Minister shall make regulations to deal with such departures. So there is absolutely no doubt that any departures from the Greater London Plan will come automatically to the G.L.C.
The effect of these two Amendments would be to require the Minister to make regulations for all departures—and again I emphasise "all"—from the local development plan as well as the Greater London Plan. It is also clear, from what the noble Lord, Lord Stonham, has said, that it is the view of noble Lords opposite that those regulations should specify that applications covered by them should go simultaneously to the Minister and the G.L.C.
I would reiterate our view that the local development plan is primarily the responsibility of the borough council, although we are now providing, in an Amendment by my noble friend Lord Hastings, that there shall be consultation in its preparation with the G.L.C. I can see no point at all in involving the G.L.C. in these minor cases, if all that is involved is a purely local departure from the local development plan, it may be of matters as small as a change of use of one room in one house.
I would emphasise that the effect of this Amendment is to require the Minister to make regulations not only about certain local development plan departures, but also about all such departures. I would remind your Lordships that planning authorities throughout the country at the moment are perfectly free to clear departures which are not substantial and not injuriously affecting amenities (to use the hallowed phrase), and our intention is to import similar arrangements into the new London
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machinery. I am sure that this is perfectly right and that it would be a retrograde step to require, as this Amendment would require, the borough council to refer even a minor departure to the G.L.C. or to the Minister, or to anyone else. This would really be clogging up the planning machinery.
LORD LATHAM: My Lords, is it not the case that the Minister at present has the right and power to call in any application, whether it is small or large, minor or otherwise?
EARL JELLICOE: That is undoubtedly true, but that is quite a different matter from making it obligatory for all departures, whether small or large, to go automatically to him. Of course he has the right to call for anything, but it would be a great mistake to make it automatic. This would be jamming up the works.
I emphasise that the case is quite different for departures from the Greater London Plan. The G.L.C. should know about all such departures before planning permission is given for any new application which would entail such departure. I need hardly remind your Lordships that where minor departures from the local development plan are of significance to the G.L.C., and they could be of significance even though they are quite minor, they will be dealt with under the Clause 24(6) regulations and will go to the G.L.C., as I explained in moving my three previous Amendments. For these reasons, I feel that it would be a mistake for your Lordships to accept these Amendments.
There were two further points made by the noble Lord on which, in conclusion, I might briefly touch. If I remember his words correctly, he said that he thought it was only right that, since the local development plan had gone to the Minister through the Greater London Council, any departures from that, however minor, should also go through them, or that the Greater London Council should be made aware of them. But there is a distinction here, because the local development plan in itself contains both big and small matters. Here we are dealing with matters which are by definition small, because the matters which are of regional concern will already go to the G.L.C. Secondly, he referred to the fear of the noble Lord, Lord Faringdon, that unless

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the G.L.C. are informed of these matters an erosion of the Greater London Plan could take place by stealth and without their knowing it had occurred. I do not think this would be so. A glance at the last words of Clause 24(3) will show that they will be informed now of the result of all applications, and will be given full details of the applications as a result of an Amendment which I accepted on the Committee stage. Therefore, if they feel that the Greater London Plan is being eroded by a succession of Amendments, small in themselves but large in their general effect, then they can get on to the boroughs concerned or, in the last resort, represent to the Minister. They would be perfectly free to do so.
I think the noble Lord was quite correct in saying that I was perhaps not perfectly acquainted on the Committee stage with the full beauties of this particular subsection. They have now become unveiled to my eyes, especially as the result of the clarifying Amendments that I moved a short time ago. I must candidly confess that I prefer the beauties of this subsection, unveiled as they are now, as amended by my Amendments, but not as amended by the noble Lord's Amendments.
LORD STONHAM: My Lords, I have already said to the noble Earl that Amendments Nos. 96 and 97, which he moved prior to the adjournment, have conceded the greater part of the case which I put on the Amendments I have now moved. The noble Earl has made it clear that, because of his Amendments, any matter which is reasonable—which I interpret as meaning in the case of London every matter which is imperative to be considered by the Greater London Council—will automatically go to them. Obviously, major matters go to them, in any case; and the noble Earl has made it clear that under the regulations, even items which are of comparatively minor importance will, nevertheless, be referred to the Greater London Council if they have an effect on the overall plan, and other matters are covered by Clause 24(3) with an automatic reference.
There is one point I should like to put to the noble Earl on the question of delay. He said it would add another step on the way up to the Minister. He quite clearly made the point which I
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made, that it would go simultaneously to the G.L.C. and to the Minister. I would submit to him that experience would go to show that the G.L.C. would not take longer in considering this matter than the appropriate section or department of the Department. I put it no higher than that. Therefore the only possible additional delay would be in the time that is taken by the Minister to consider the representations of the Greater London Council. I should have thought that that was time well spent, and if it involved any delay at all, and the delay avoided the making of a serious error, then it would be well worth while.
I admit that the noble Earl in his answer went a substantial way towards what we wanted—I do not mean in regard to this automatic reference, because I appreciate that some of the references, if all of them were automatic, might clutter up the machine a little, though they could be rejected by the G.L.C. Indeed, everything would depend on the regulations. Who is going to decide whether it is a major, regional or minor matter which must, or need not, be referred to the G.L.C.? Therefore, the regulations will be very difficult to frame, and when they are made we shall submit them to careful scrutiny in the light of what the noble Earl has now said. I think the position has been fairly explained and debated, and I would ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
EARL JELLICOE: My Lords, I beg to move this Amendment formally.
Amendment moved—
Page 33, line 42, after ("(b)") insert ("(i)").—(Earl Jellicoe.)
On Question, Amendment agreed to.
9.2 p.m.
LORD STONHAM LORD STONHAM moved, after subsection (6) to insert:
"() Where by virtue of regulations made by the Minister under section 42 of the Planning Act an application for permission is required to be made to the Minister by the Council of a London borough or the Common Council, as the case may be, a copy of the application shall be sent to the Greater London Council at the same time as the application is made to the Minister and the Minister shall consider any representations made by the Greater London Council as to the manner in which the application is to be dealt with."
The noble Lord said: This Amendment is on almost the same general point, but there is a difference. The main point is that where an application for permission is made to the Minister by the council of a London borough or the Common Council a copy of the application should be sent to the Greater London Council at the same time as the application is made to the Minister. Again, I should have thought that as a matter of general principle this would not only seem sensible but ought, in the long run, to save time; because, as the noble Earl has said, in a considerable number of cases the Minister will have to consult the Greater London Council as to their view. If the application goes to the G.L.C. at the same time as it is sent to the Minister, surely, in the long run it will mean a saving of time. Where a local planning authority proposes to carry out development which involves a substantial departure from the development plan, it must of course submit an application to the Minister who, after consideration, refuses or grants the permission. That, of course, is by virtue of regulations made under Section 42 of the Planning Act. It is considered that departures from the development plan, whether it is the Greater London development plan, or the local development plan, are obviously a matter of first importance to the Greater London Council in its rôle as the wider development authority.
This Amendment is on all fours with those to Clause 24(6), which I have just withdrawn and which sought to provide that any application for private development for which a London borough considered permission should be granted should be referred to the Greater London Council, as well as to the Minister, and at the same time. Indeed, all the Amendment does is to ensure that the Greater London Council shall be aware of the London borough council's proposals and have an opportunity of giving its observations to the Minister. Again, a similar Amendment was moved by my noble friend Lord Silkin during the Committee stage and was also withdrawn on the assurance of the noble Earl that he would think about it again.
One point I should like particularly to stress is that the Bill as it stands would not appear to provide any machinery by
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which the Greater London Council would be brought in, even in the case of a proposed development by a borough council involving a substantial departure from the major strategic plan for the Greater London area. In such a case, the borough must make application to the Minister for permission, but, as I see it, there is no provision in sub-paragraph (a), (b) or (c) of this beautiful subsection (6) for regulations covering an application made to the Minister. It may well be (although I did not hear it) that the noble Earl may intend regulations which are going to be made in accordance with the Amendment which he moved, No. 96, which will cover cases where applications must be made to the Minister.
EARL JELLICOE: My Lords, perhaps I might interrupt the noble Lord straight away on this point? It is certainly my understanding that the clause from line 2 to line 5 on the top of page 34 of this subsection will bite on the point which he is making. Specifically it will cover any development, whether by a private developer or by a borough, which is inconsistent with the Greater London plan.
LORD STONHAM: Therefore matters must be referred to the Minister covering these applications?
EARL JELLICOE: Referred to the G.L.C. and then, if necessary, to the Minister.
LORD STONHAM: That assurance of the Minister that the clause will bite on that point goes a long way to dealing with the points that I have in mind. But I mentioned the regulations, and subsection (2) of paragraph 4 of the 1951 regulations provides that the application for planning permission shall be made in the form of an application to the local planning authority, and that it shall be deemed to have been referred to the Minister under Section 15 (which is now Section 22) of the Planning Act; and such an application would, as I am advised, appear to be outside the definition of an application falling to be dealt with by the Greater London Council or a London borough council: it falls to be dealt with by the Minister. It is to remedy what has appeared to us to be this apparent omission that this Amendment has now been moved. Our view is that the same procedure should

227
apply, whether the proposed departure is from the Greater London development plan or from the local development plan.
I appreciate that the noble Earl is with me all the way, and I think I was with him until the last point that I brought up; and it may well be that he would like further time to consider it. But it certainly seems to us a point of some substance which needs to be cleared up, and I hope that he will think about it. I feel that it is one point about this Amendment which is still outstanding and has not been answered by the noble Earl's interjection. I beg to move.
Amendment moved—
Page 34, line 9, at end insert the said subsection.—(Lord Stonham.)
EARL JELLICOE: My Lords, the noble Lord has put the case for this Amendment very reasonably, and, as he said, when we discussed this matter on Committee I undertook to have another look at it. Having done so, I came to the conclusion that the Amendment was not necessary. I will briefly run over the reasons why I felt that. I had assumed that the object of the Amendment was to make quite certain that the G.L.C. knew of any development by a borough which had a wider-than-borough significance. If that is the object, the Amendment strikes me as unnecessary, as I think it is already provided for fully in the Bill as a result of the Clause 24(4) machinery. Where development is of a sort that will be caught by the Clause 24(4) machinery, then the Greater London Council will be dealing with all stages of the development control, and the application will therefore go to the G.L.C. from the outset, whether it is development by a private developer or by a borough. That is the first case.
The second is borough development which will not come within the purview of Clause 24(4) but which nevertheless has certain regional implications and will be caught by the Clause 24(6) machinery. There the G.L.C. will be informed straight away before the borough can go ahead, and will if they so desire be in a position to give directions to the borough as to how the matter should be carried out. Then there are the regulations which
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the Minister himself can make under the Section 42 machinery. The Minister, in making such regulations, would refer for consultation with the G.L.C. any such kinds of development as would be referable to them under Clause 24(6). I can give the noble Lord an assurance in that respect.
I think the result of accepting the Amendment as it stands would be to bring in the G.L.C. on all borough council development, whether or not it was of regional significance or local significance. I do not mind their being brought in if it is of regional significance, but I feel there are disadvantages in bringing them in if it is of purely local significance. I see no reason why the G.L.C. should be automatically involved in a borough housing scheme which was arousing a certain amount of purely local controversy but had no wider significance. To accept that view would be to argue that the G.L.C. should have a voice in borough developments just because they are borough developments. I would remind your Lordships that under the Bill as it stands development by a private developer involving perhaps quite a substantial departure from the local development plan, but which nevertheless did not have wider regional significance, would not have the same sort of treatment, and I find it difficult to see why we should discriminate in this way between development by a borough and development by a private developer.
On the specific point which the noble Lord said was troubling him, I am informed that paragraph 5(2) of the 1951 Regulations to which he referred requires the developing authority to consult any body—in this case the G.L.C.—which they would have to consult if the development were not theirs.
LORD STONHAM: My Lords, may I ask the noble Earl whether that is Regulation 5(2) or Regulation 4(2)?
EARL JELLICOE: It is Regulation 5(2). I think that that meets the point which the noble Lord had in mind. I should be perfectly willing to check up on that particular point, and I undertake to write to the noble Lord about it. But I think the point which he raised is covered. On the general issue, I must advise your Lordships that I do not think the Amendment is either necessary or, indeed, desirable.
LORD STONHAM: My Lords, I am grateful to the noble Earl for that reply. The only point in doubt, as he has indicated, is the one, that he has promised to write to me about. On that assurance, I would ask your Lordships' leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.16 p.m.
LORD LATHAM LORD LATHAM moved, after subsection (6), to insert:
"() The Greater London Council may deal with any particular application falling within paragraph (b) of the last foregoing subsection, and in relation to any such application that Council shall be deemed to be the local planning authority for all purposes of the Planning Act other than the reception of the application."
The noble Lord said: My Lords, this is a simple Amendment of vast importance. It seeks to include within the Bill the right of calling in any applications that may be made for planning permission, the right to call in being vested in the Greater London Council. The right to call in was first introduced into planning legislation in 1947. Up to that time, only if an application for planning had been refused was the procedure of appeal and inquiry available, and as a consequence some monstrous things were done in the name of development and of planning, and legislators were compelled to introduce the provision for calling in and for the Ministry to deal with any particular application so called in.
The Amendment that I am proposing is that these powers should be given to the Greater London Council. At present it is contemplated that the rights of the Greater London Council shall be limited to giving directions to the London boroughs as to the manner in which the application is to be dealt with. The scope of this direction will presumably be limited by the terms of the regulations which under the Bill are to be made by the Minister; and it would seem not unlikely that they will be confined to negative requirement, and that planning permission in respect of the particular application would not be granted or would be granted upon conditions or unconditionally.
We do not regard this requirement of regulation as being adequate as an alternative to the right to call in the application. At present, that right being
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exercised by the London County Council, the Council has been able to arrange and to approve, by negotiation and the like, certain important planning provisions. This kind of positive planning rests upon the power which the Minister at present has and of which we suggest the London County Council should be possessed. It will enable positive planning to be carried through. Examples of this are to be found in London at Victoria, Euston Road, Hampstead Road, Red Lion Square, Holborn; and in Knightsbridge at Knightsbridge Green. The noble Earl, Lord Jellicoe, referred to the project at Knightsbridge Green as an example of a negotiated scheme.
We hope, therefore, that the noble Earl will accept this Amendment on behalf of the Government. It is the vital essence of planning, and will enable the Greater London Council to step in, if necessary, and stop such unjustifiable developments as that in St. James's Square, which was done before the London County Council had adequate powers to deal with it. The whole essence of planning will be vitiated, and not only will be impaired but may well be destroyed, unless this power is given to the Greater London Council. If obligations are to be placed upon the Greater London Council, then it must be enabled to exercise those powers. This is the way to do it. I beg to move.
Amendment moved—
Page 34, line 9, at end insert the said subsection.—(Lord Latham.)
LORD CONESFORD: My Lords, I rise only to point out that the noble Lord who has just addressed the House made one important error, I think, when he said that the power to call in an application was given for the first time in 1947. It was given for the first time under the Town and Country Planning (Interim Development) Act, 1943, in Section 6, and has existed ever since. I remember this because it was my duty to carry that provision through the House of Commons.
LORD LATHAM: I stand corrected. I made inquiries, and I was told it was 1947. I was doubtful about it. I think the noble Lord and I met in connection with that Bill.
EARL JELLICOE: My Lords, I feel some trepidation in entering these very

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expert lists, but this is again another matter which I undertook to look into without commitment at the Committee stage. I am inclined to feel that I may have offered to look at too many points in connection with Clause 24(6). There were aspects of this clause which puzzled me and I did not wish to close the door on possible improvements we could make to the clause.
Having looked at this matter again, I must nevertheless advise your Lordships against accepting this Amendment. My main reasons for doing so are threefold. In the first place, I would again remind your Lordships, if you need reminding, that applications covering development of regional significance will already fall to be considered de novo by the Greater London Council under Clause 24(4). For such applications the Greater London Council will be the local planning authority in the positive sense suggested in this Amendment—in the positive way in which Lord Latham was speaking. Perhaps it is dangerous to take an example, but it seems to me that the type of development about which he spoke, Knightsbridge Green, both as to the height of buildings and by their location near the Royal Park, and also because of the employment potential created, would probably be covered by the regulations to be promulgated under Clause 24(4). Nevertheless, we feel it right to make a distinction in the procedure for handling such applications which are of regional importance and the procedure for handling applications which cover development of lesser significance to the G.L.C. But I should like to reiterate that, for the applications which will fall under the Clause 24(4) umbrella, the G.L.C. will be the planning authority in the full positive sense desired by the noble Lord.
LORD LATHAM: My Lords, would the noble Earl permit me to intervene? It is surely the case that the borough council of Knightsbridge—I do not mean the existing City Council, but the borough council intended to be brought into existence—could have destroyed or (one hesitates to use the word) "bitched" the whole of that development by giving a consent which had not been approved by anyone else.
EARL JELLICOE: If it made a grave departure in its interpretation of what was a matter of regional significance.
LORD LATHAM: But the departure, if I may say so with great respect, is only from the development plan. They could have done it within approval of the development plan and yet have ruined the scheme.
EARL JELLICOE: With respect, I think the noble Lord is wrong there, because under Clause 24(4) matters of regional significance—and this would be a matter of regional significance according to all the criteria which I think are likely to govern the regulations—
LORD LATHAM: A limited area in Knightsbridge?
EARL JELLICOE: Yes, because as the noble Lord would have heard if he had listened closely to my closely reasoned argument in speaking to Clause 24(4), these criteria are questions of height, location, whether it is near the Royal Parks, and the creation of employment potential at the heart of London. I would think it is a fair bet that that particular building would have been caught under all three heads. It is not only questions of departures from the Greater London Plan which go to the G.L.C. They will be brought in in the full sense de novo as a planning authority, when applications of regional or real significance to the development plan come up. That is the first case.
Secondly, we believe that if we write this alternative procedure for call in into Clause 24(6) this is bound to lead to complication and delay. It is our intention that, under the Clause 24(6) regulations, only the development which a borough council wish to approve will need to be referred to the G.L.C. This is for the simple practical reason that we wish to avoid the G.L.C.'s being swamped by a mass of proposals which the borough are likely to turn down in any event. This means that any proposal referred by the borough to the G.L.C. will already have been very fully considered by that borough. I would suggest that at this comparatively late stage it would be wrong to allow the G.L.C., or to encourage the G.L.C., to take the proposal from the borough

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council and consider it afresh. We should remember here that the call in procedure adds a completely new stage to the whole process which could be made to run as a fresh period of waiting for the potential developer. Once again I suggest that we should really be very "choosey" about gratuitously importing factors which lead to delay into the planning machinery.
My third objection to this Amendment is that I think it underestimates the effectiveness of the power of direction already conferred upon the G.L.C. As I have already explained, the G.L.C. will be able under that power to direct a council to refuse an application, or to agree it subject to defined conditions, and those conditions could be positive as well as negative. Surely this will give the G.L.C. all the control it needs for that particular type of application. I know that the noble Lord feels that perhaps, even with these matters of lesser concern—the ones which will not be caught by the Clause 24(4) or Clause 24(6) machinery—it may be a good thing to bring the G.L.C. in at the formative stage when a particular project may not have fully crystallised. But surely a wise borough, knowing that the G.L.C. has this reserve power of direction, will automatically, if it has any sense, bring in the G.L.C. at an early stage, when they are discussing projects with potential developers, where they think the G.L.C. may be of assistance. Those are my three main objections to the Amendment which the noble Lord has moved.
LORD LATHAM: My Lords, could the noble Earl elucidate one point? He has just mentioned the power of direction possessed by the G.L.C. Do the G.L.C. have, in addition to a power of direction, the power of refusal?
EARL JELLICOE: Yes; they can direct the borough to refuse an application. My Lords, those are my three main objections, and the first is really the most important. For the developments which I think the noble Lord had mainly in mind, I think the G.L.C. will be in there in any case, de novo. But, looking at his Amendment, I think there is a fourth objection. Paragraph (b), to which it refers, will now be split into two subparagraphs as a result of the Amendments which I moved quite recently and which your Lordships accepted. Under the
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second sub-paragraph, some applications will go direct from the borough to the Minister. I have explained why we believe this to be right. But, if I was right about this, it would surely be wrong for the G.L.C. to be able to call in such applications with which, by definition, they are not concerned. For those reasons, although I am not unsympathetic at all to much that the noble Lord has said, I must advise your Lordships against accepting this Amendment.
On Question, Amendment negatived.
LORD HASTINGS: My Lords, Amendments Nos. 104 and 104A should be taken together. Their purpose is to ensure that where any agreement is made under Clause 24(7) which involves a transfer of staff, then the officers affected shall be entitled to exactly the same safeguards as are ensured by Clause 84 in respect of officers affected by orders made under the Bill. I beg to move.
Amendment moved—
Page 34, line 17, leave out ("and compensation")—(Lord Hastings.)
On Question, Amendment agreed to.
LORD HASTINGS: My Lords, I beg to move this Amendment.
Amendment moved—
Page 34, line 18, at end insert ("and any such agreement shall include provisions in accordance with section 84(3) of this Act for the protection of the interests of such officers.").—(Lord Hastings.)
On Question, Amendment agreed to.
9.33 p.m.
LORD CROOK LORD CROOK moved, after subsection (7) to insert:
"() The Greater London Council, after consultation with the London borough councils and the Common Council, shall prescribe standards of plot ratio, density, car parking, daylighting and such other matters of a like planning nature in relation to applications for planning permission under the Planning Act as the Greater London Council shall think fit.
() Before a London borough council or the Common Council grant permission on an application involving a substantial departure from the standards to be prescribed under the last foregoing subsection, the application shall be referred to the Greater London Council, who may give to the referring council directions as to the manner in which the application is to be dealt with."
The noble Lord said: My Lords, on behalf of my noble friends I rise to

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move this Amendment, the purpose of which is to ensure the provision in regulations to be made by the Greater London Council of common planning standards for use in considering applications for planning permission. In the existing development plan for London, standards relating to matters such as car parking, plot ratio, daylighting, et cetera, are referred to only in general terms. The standards are, in fact, not defined; nor do they form part of a plan. I understand, however, that they are kept under constant review, and that they are amended by the L.C.C. from time to time. Your Lordships will note that since plot ratio standards were adopted by the Council in 1951, there have been four major adjustments. First came the major step taken in 1957, to combat congestion in the central area of London. Later modifications, which followed in 1960, 1961 and 1963, were concerned primarily with further controlling the continuing increase in office development. Interim car-parking standards for various types of use were introduced by the Council in 1954. Those, in turn, were reviewed and adjusted in 1957. Recently there has been a further tightening-up in car-parking requirements, and the Council is now reviewing car-parking standards both for residential, further education and hospital uses.
It was, I think, quite clear in Committee stage that both sides of the Committee were fully in agreement that the Greater London Council should prescribe planning standards which London boroughs must take into account. The only point at issue, as I understood it, was how this could be done. The Minister, it seemed to me, thought that it should be done in the written statement of the Greater London development plan; and he pointed out that amendments to this plan could be proposed at any time and not just once in five years. Indeed, as I recall it, he said that amendments of one sort or another were likely to be, as he put it, "in the pipe-line" all the time.
The London County Council does not put detailed standards in the written statement. This is because any proposed modification of the standards would bring into operation the involved and lengthy statutory procedure entailed in
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any proposed amendment to a development plan. Changes in standards tend to be to the advantage of the public interest and to the disadvantage of developers; and it can be expected that if modifications of the standards are proposed by means of amendments to the development plan they might possibly be the subject of objection. That would then be the subject of public inquiry or hearing before a decision on the proposed amendment could be taken by the Minister. Before this, there would have been all the formal statutory consultations which your Lordships know have to be undertaken beforehand. That makes a written statement for the development plan far too inflexible an instrument for maintaining planning standards and, of vital importance, for keeping them up-to-date.
On this subject of making an amendment to the development plan, my noble friend Lord Silkin pointed this out in Committee stage, even if this were going on frequently—and here I quote:
"It is not simply a matter of going to the Minister and getting a reply by return of post. It takes a very long time before you get a decision from the Ministry on any review of the plan."
My noble friend thought that the Minister was underestimating what was involved and the difficulties there would be. Here I again quote my noble friend.
"Wherever in the light of experience he thinks it necessary to change its standards it has to go through the process of putting the change through the pipe-line."
So the first paragraph of the Amendment seeks to achieve a flexible means of securing consistent planning standards in Greater London; while the second paragraph is aimed at ensuring that planning standards are adhered to reasonably. That is secured by providing that a substantial departure from the standards shall be referred to the Greater London Council; and the Greater London Council may give direction as to how the application should be dealt with.
The London County Council has found it necessary on occasion to vary planning standards at relatively short notice. No objection has been made so far to the procedure used by the Council. The standards are administered flexibly and the applicant is safeguarded by his right of appeal to the Minister if the

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application is rejected. We think the Greater London Council should be enabled to adopt the procedure for the benefit of Greater London which the London County Council has so far adopted. I beg to move.
Amendment moved—
Page 34, line 18, at end insert the said subsections.— (Lord Crook.)
LORD HASTINGS: My Lords, this is a question of the best way of handling the problem of standards. We believe that these are matters which directly affect development and if they are to be formalised at all, then they should be included in the development plan written statement. The main reason for that is that, if they are included, the machinery of publication and the right to objection enables those affected to express their view, as can be done for any other development plan, and a public inquiry can be held.
In this Amendment noble Lords opposite still concede that departure from the proper standards would be equivalent to a departure from the plan. But, on the other hand, the standards themselves would not be subject to the publication and inquiry procedure of the development plan. We have been charged with inflexibility, and I have gone into this matter carefully with my Department. I do not think that the charge is justified. It was originally made by the noble Lord, Lord Silkin, and has now been repeated by the noble Lord, Lord Crook. We are told that this is altogether too rigid, because it would take too long to make any changes.
The noble Lord, Lord Silkin, was speaking in terms of the review of development plans. These are made every five years and include a wide range of changes and, of course, would take a substantial time to get through. Nevertheless, individual amendments can be made at any time. The noble Lord, Lord Crook, referred to what I said about the pipe-line on Committee stage. In fact, 70 such amendments have been made to the London County Development Plan during the time when there has been only one review, and some twenty amendments are actually in the pipe-line at this moment. The time taken to deal with them is no more than the substance of
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the matter and the extent of public objection justified.
If, as we propose, the standards are included in the Greater London Development Plan by way of written statement, then, by virtue of the regulations which will be made under Clause 24(6), which we have just been discussing, the borough councils would have to consult the G.L.C. before granting permission for any development which constituted a departure from these standards; but—and this is an important point—the G.L.C. could give permission, if they wanted to do so, without undue delay and without reference to the Minister, provided the development constituted no substantial departure from the Greater London Development Plan. So there should not necessarily be any more delay than if the system were of a more informal character, as suggested by noble Lords opposite.
LORD LATHAM: My Lords, am I right in assuming that the G.L.C. cannot direct the London borough?
LORD HASTINGS: I am not quite sure what information the noble Lord is after here.
LORD LATHAM: The noble Lord said that the London borough would consult the G.L.C. I am now asking whether it went beyond consultation and amounted to the Council being able to give the borough directions.
LORD HASTINGS: My Lords, they would have to consult the G.L.C. because it would be part of the Greater London Plan by the written statement. They would not be able to depart from those standards without permission of the G.L.C., but the G.L.C. could give that permission without having to apply to the Minister or hold a public inquiry, if the Council considered that the alteration was reasonable. That is the point.
LORD LATHAM: My Lords, surely the noble Lord will agree that there could be an objectionable proposal for development within an area which is not necessarily against the development plan. What happens then?
LORD HASTINGS: I am afraid I do not follow the logic of the noble Lord's argument. However, I should like to go on to a matter which was discussed on Committee stage and which is why I

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said then that I would take this matter back and look at it again. I remember clearly the noble Lord, Lord Faringdon, followed by the noble Lord, Lord Silkin, stating that, even when the standards were agreed informally between the London County Council and the metropolitan boroughs, there was the right of appeal to the Minister, and that anybody could, in the words of the noble Lord, Lord Silkin, "express their dissatisfaction". I have made inquiries about this, and the matter is not quite as I understood it on that occasion. It appears that the noble Lord, Lord Silkin, would have been referring, not to the formulation of standards, but to the right of appeal when a particular standard agreed informally is applied to a particular development only, and when in respect of that development planning permission is actually refused. That is not at all the same thing as a right of appeal when the standards are laid down, but it brings out one practical point of interest. The standards prescribed in the informal way now used by the L.C.C. can be challenged on every planning appeal. This would not, however, be the case if the standards were formally settled in the development plan.
Another possibility was that the noble Lord, Lord Silkin, might have been referring to the lodging of objections with the Minister when proposals to make or amend standards have been published; but, there again, publication is entirely at the discretion of the London County Council. That would mean no more than that somebody could write to the Minister and he would have no power to hold an inquiry or amend standards. So I do not think the possibility of appeal, as I understood from the noble Lords, Lord Faringdon, and Lord Silkin, is at all the same thing as the full public inquiry procedure which would have to be followed out, and would be a far greater safeguard for the public, under the proposals in this Bill.
We feel that these standards are so important that if any major changes are to be brought about that procedure should be adopted. At the same time, I reject the argument that the system is now too rigid, because, although it was formalised, the Greater London Council has power to agree with the boroughs to allow any
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departure from those standards where it would be reasonable and where there is no question of major departure from the development plan as a whole. For these reasons I hope that noble Lords will not think it necessary to press the Amendment.
LORD LATHAM: My Lords, at the end of the first five years the development plan will be a Joseph's coat.
LORD MORRISON OF LAMBETH: My Lords, I must say that I thought my noble friend Lord Crook made a clear and convincing case for his Amendment. It is a simple point, though it is right that it should have been elaborated at fair length and in some detail. There are to be two planning authorities, the Greater London Council, who will be responsible for the wider London development plan, and the London boroughs, who will be responsible for the plan within the boroughs. It is desirable that the plan within the boroughs should conform to certain standards which are required in the public interest. That is why this Amendment provides that there should be prescribed by the Greater London Council, after (not before) consultation with the boroughs and with the Common Council, details of plot ratio, density, car parking and such other matters of a like nature. That seems to me to be reasonable. Within those stipulated standards the boroughs could exercise their judgment. But the broad London interest must be protected, and therefore I think my noble friend is right.
The Amendment goes on to say that if a borough proposes to depart substantially or materially from these standards which have been set out by the Greater London Council, there must be reference to the Greater London Council. I must say that I think that reasonable, and that my noble friend made a case. The Parliamentary Secretary has now stated the Government's view, but I do not find it convincing to the extent that it persuades me that my noble friend Lord Crook is wrong. Therefore, at this late hour, as we used to say at seven o'clock, I do not think we ought to delay your Lordships more. The Government apparently have firmly made up their minds, and we have firmly made up ours. The only way to settle it is by dividing, to see who has a majority; and we must hope for the best.
9.53 p.m.
On Question, Whether the said Amendment (No. 105) shall be agreed to?

CONTENTS

Addison, V.

Latham, L.

Rusholme, L.

Burden, L. [Teller.]

Lucan, E. [Teller.]

Shepherd, L.

Champion, L.

Morrison of Lambeth, L.

Stonham, L.

Crook, L.

NOT-CONTENTS

Abinger, L.

Dundonald, E.

Mabane, L.

Ailwyn, L.

Ebbisham, L.

McCorquodale of Newton, L.

Allerton, L.

Elliot of Harwood, B.

Margesson, V.

Atholl, D.

Falmouth, V.

Mersey, V.

Auckland, L.

Ferrers, E.

Monsell, V.

Boston, L.

Fortescue, E.

Montgomery of Alamein, V.

Brabazon of Tara, L.

Fraser of North Cape, L.

Newton, L.

Bradford, E.

Furness, V.

Ormonde, M.

Carrington, L.

Goschen, V. [Teller.]

Raglan, L.

Chesham, L.

Hailsham, V. (L. President.)

Remnant, L.

Cholmondeley, M.

Hastings, L.

Rochdale, V.

Clitheroe, L.

Howard of Glossop, L.

St. Aldwyn, E. [Teller.]

Conesford, L.

Ingleby, V.

St. Oswald, L.

Cranbrook, E.

Jellicoe, E.

Sandford, L.

Crathorne, L.

Lansdowne, M.

Stonehaven, V.

Denham, L.

Lothian, M.

Tenby, V.

Dilhorne, L. (L. Chancellor.)

Luke, L.

Waleran, L.

Resolved in negative and Amendment disagreed to accordingly.
10.0 p.m.
LORD HASTINGS: My Lords, this Amendment is essentially a tidying up process. Clause 24 determines which authorities in Greater London shall be the local planning authority for the purposes of the Planning Act. But Acts other than Planning Acts also contain references to local planning authorities, and in some instances these references need modification in their application to Greater London. It seems desirable to pick up at least the main references and cover them in the Bill, leaving any others to be dealt with as necessary by order under Clause 83. If noble Lords wish, I can give a longer explanation, but if not, I beg to move.
Amendment moved—
Page 34, line 19, leave out from beginning to ("as") in line 21 and insert—
("(8) In relation to land in a London borough or the City—

(a) references to local planning authorities in any of the following enactments, that is to say—

(i) sections 33 and 34 of, and Schedule 2 to, the Electricity Act, 1957;

(ii) section 108 of, and Schedule 12 to, the Highways Act, 1959;

(iii) Schedule 1 to the Pipe-lines Act, 1962,

Their Lordships divided:—Contents, the 10; Not-Contents, 51.
shall be construed as including references to the Greater London Council but not to the borough council or the Common Council;
(b) the reference in section 86(4) of the Transport Act, 1962, to the local planning authority to whom application is made for permission for the development in question shall be construed as a reference to the local planning authority by whom that application falls to be dealt with;
(c) references in section 3(2) of the Acquisition of Land (Authorisation Procedure) Act, 1946, to the local planning authority shall be construed as including references both to the Greater London Council and to the borough council or, as the case may be, the Common Council;
(d) any reference in section 17 or 20 of the Caravan Sites and Control of Development Act, 1960, to the local planning authority shall be construed as a reference to the borough council or, as the case may be, the Common Council;
(e) any reference in Part III of the Land Compensation Act, 1961, to the local planning authority shall be construed").—(Lord Hastings.)
Clause 27 [Supplementary provisions as to development plans]:
LORD HASTINGS LORD HASTINGS moved, after subsection (3), to insert:
"(3A) A London borough council or the Common Council—

(a) when preparing their local development plan under section 25(4) or any proposal

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under section 26(3) of this Act shall give to the Greater London Council any information which that Council may require with respect to the matters to be included in that plan or proposal; and

(b) before submitting that plan or proposal to the Greater London Council shall give that Council an opportunity to make representations in the light of that information and shall consider any representations so made."

The noble Lord said: My Lords, Amendments Nos. 108Z and 108A go together, and I hope they will satisfy noble Lords on the following Amendment, No. 109. Noble Lords moved a similar sort of Amendment during the Committee stage, when I undertook to reconsider the matter. The Amendment now put down by noble Lords opposite would, we feel, make rather heavy weather and too long a procedure of the business under discussion.
LORD CHAMPION: My Lords, would the noble Lord clear up one point? Amendment No. 108Z refers to page 29, line 12, whereas clearly it ought to be page 39, line 12, and it should come later in the Marshalled List.
THE LORD CHANCELLOR: My Lords, that was fairly clear to me, because I did not call 108Z; I called 108A.
LORD HASTINGS: Amendment 108Z comes first on my Paper and it is simply consequential on 108A. I am sorry if I confused noble Lords. It simply enumerates the subsection (3A), which I am now referring to under Amendment 108A.
The formal statutory consultation which was suggested in the noble Lord's Amendment at Committee stage and again, I think, now, implies that further action should wait on it and it would be likely to hold matters up. I think that point was very well made by the noble Lord, Lord Molson, during our Committee stage. Nevertheless, we feel that to leave the matter to entirely informal consultation without any obligation under the Bill is perhaps a little unwise, and I think that was the main point made previously by noble Lords opposite. Therefore, we feel there is something to be said for enabling the Greater London Council to know what is being prepared before they are faced with plans and amendments which they have to pass on
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to the Minister, even though they can add their own comments before doing so.
This Amendment seeks to reduce the formality by leaving it open to the Greater London Council to say what information they need as regards any proposed local plan or amendment, and that is our paragraph (a). Paragraph (b) then deals with representations by the Greater London Council and consideration of these by the borough councils, in the same way as in the Amendment of noble Lords opposite. I think this form will fulfil the purpose of the Amendment of the noble Lords opposite, and will prove the most effective way of ensuring that the borough councils co-operate with the Greater London Council in forming their own plans. I beg to move.
Amendment moved—
Page 37, line 45, at end insert the said subsection.—(Lord Hastings.)
LORD CHAMPION: My Lords, whilst we should prefer Amendment No. 109 to the Amendment now moved by the noble Lord, the differences are not such that we would ask the House to reject Amendment No. 108A in favour of Amendment 109. But I am a little concerned about the practical application of the Government's Amendment. Under it, the Greater London Council will first of all have to receive a preliminary draft plan or particulars of proposals from the London borough before the G.L.C. will be in a position to require information. The subsection makes no requirement that the G.L.C. is to be provided with any documents, but one must, presumably, take that for granted. The G.L.C. will be able to ask for information only with respect to the matters to be included (and I would underline the word "included") in the draft plan or proposal. It seems to us that a strict interpretation of those words would preclude the Greater London Council from making constructive suggestions about, for example, the zoning of specific areas for open spaces, matters pertaining to housing and other uses of land in this connection, or from asking the borough why that provision has not been made. To make the subsection more flexible I would suggest that an improvement would result from the omission from paragraph (a) of the words, "the matters to be included in". If the Minister could look at those words again between now and Third Reading I think that might be helpful.

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My suggestion in this connection would assist in the operation of paragraph (b), since the G.L.C. could make representations only "in the light of" information requested under paragraph (a) which, I think, is unnecessarily restrictive. I should like the Minister to reply on that point, and, if he cannot consider it between now and the Third Reading, perhaps he would write to me on it, if he feels that that would be worth while. I merely seek a little further interpretation of the meaning of the words in the noble Lord's Amendment.
THE EARL OF LUCAN: My Lords, could the noble Lord answer a question of another kind—namely, why is this new subsection labelled (3A)? I thought the usual practice in putting in a new subsection was to leave it blank and then, when the Bill was reprinted, the subsections would be renumbered in their proper order. If it is going to be referred to now as subsection (3A) and subsequently as (4) I see the possibility of endless confusion.
LORD HASTINGS: My Lords, if I may, by leave of the House, reply, I should imagine that the point made by the noble Earl, Lord Lucan, is a purely drafting one and will be looked after by the draftsman in the final copy of the Bill. As to the point of the noble Lord, Lord Champion, I think we have it right. But I have no objection to studying his remarks, and considering the possible improvement of the words, and I will write and let him know the result.
LORD CHAMPION: I thank the noble Lord.
LORD HASTINGS: My Lords, I beg to move this Amendment formally.
Amendment moved—
Page 39, line 12, leave out ("(3)") and insert ("(3A)").—(Lord Hastings.)
Clause 29 [Miscellaneous modifications of Planning Act]:
LORD CROOK LORD CROOK moved, in subsection (1), to leave out the reference to sections "68(1), 71,". The noble Lord said: My Lords, at this late hour I am sorry to keep your Lordships on a rather difficult and technical Amendment. Your Lordships will see that Amendment No. 110 is merely to leave out 68(1) and 71, and
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Amendment No. 111 makes a considerable insertion dealing with the sections of the Planning Act. Therefore, with your Lordships' permission, I propose in order to save time, to speak to No. 111 rather more than No. 110. Section 68(1) and 71 of the Planning Act relate to the acquisition of lands under two heads. The first concerns lands in a comprehensive development area. Such acquisition may either be for the purpose of securing development or redevelopment of that area, or because it is expedient in the public interest that the land should be held together with land so required. The second head is to secure its use in the manner proposed by the plan.
These two Amendments seek to give to the Greater London Council the same unfettered power to acquire land, compulsorily or by agreement, as is already conferred by the Bill on the London boroughs. The present power of the G.L.C. in this respect is restricted by the provisions of Clauses 29(2) and (3) of the Bill. Clause 29(2) relates to compulsory acquisition under Section 68(1) of the Planning Act. It provides that the Greater London Council can exercise that power only if the Minister, after consultation with the Greater London Council and also with the London borough concerned, thinks it expedient that the G.L.C. should do so.
Clause 29(3) relates to the acquisition of land by agreement under Section 71 of the Planning Act. This provides that with the exception of acquisition of an industrial or commercial undertaking incidental to its removal from Greater London, the Greater London Council must, before exercising the power, seek the consent of the London borough concerned, of the Common Council of the City, if they happen to be concerned, or of the Treasurers of the Temples, if they are concerned. It also provides that if the consent is withheld—and no time limit is imposed in the subsection within which consent may be granted or withheld—then the Minister's consent must be sought.
In the highly competitive market for land with which we are at this moment dealing the delays of procedure must inevitably militate against acquisition by agreement. The exception mentioned of moving an industrial or commercial undertaking from Greater London was introduced into this clause by

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the Minister himself during the Committee stage in this House in May. If a general development plan for the area as a whole is to be properly implemented, the G.L.C. will have to play an important part in the re-location of industry within Greater London, as well as in the new and expanded towns. The present distribution of industry within the administrative County is very uneven. For that reason some boroughs will find themselves faced with a heavy burden in that respect. Some will find that they will not have enough land zoned for industry within their boundaries to enable them to re-locate industry, which ought to be moved. But, as always, the overriding trouble and difficulty will be finance. Those are problems on which the G.L.C. will, in our view, be in the best position to help.
I imagine that a number of your Lordships know of the work of the industrial centre of the London County Council, an effective instrument as I am sure you will agree. It can offer guidance and tackle planning and movement problems of industrial concerns in the London area in regard to those who want to expand and who cannot do so, because of their present site for one reason or another, but who are tied in some way to London. Its effectiveness will be greatly diminished if it comes to be regarded as concerned only with moving firms out of London. We think that the restriction which must be imposed on acquisition by agreement by the Greater London Council should be removed generally and not only as regards concerns moving out of Greater London.
In our debates we were largely concerned with the use of provisions in acquiring non-conforming industry, although my noble friend Lord Shepherd did make reference in the course of the Committee stage to their use in connection with comprehensive development areas. My Lords, I think that the case for the adoption of the proposal which I have tried to put to you, which is complex and which has involved my speaking a little too long at this time of night, is such as to commend the Amendment to your Lordships with no more words from me. I beg to move.
Amendment moved—
Page 41, line 20, leave out ("68(1), 71,").—(Lord Crook.)
LORD HASTINGS: My Lords, Section 68(1) and Section 71 of the Planning Act give powers of purchase of land, as the noble Lord said: the first compulsorily, and the second by agreement. The Bill is framed so that these powers shall normally be exercised by borough councils, but they will be exercisable by the Greater London Council after consultation with a borough council. If the borough council should disagree, then the Minister could settle the matter. This principle is really fundamental to the Bill, and I do not think the noble Lord opposite will expect me to agree to his Amendment.
At the Committee stage we put forward an Amendment which made a very important exception, and that was in respect of industrial or commercial land which would be allowed to be bought by the Greater London Council with a view to moving that industrial or commercial undertaking from Greater London altogether. That argument relating to a form of overspill was in fact, so far as I remember, one of the reasons put forward for this Amendment when it was moved by the noble Lord, Lord Champion, during the Committee stage, and he agreed that we had gone quite a way to meeting at any rate one of the arguments.
As for general redevelopment, of course the day-to-day run of development will be the responsibility of the borough councils. The Greater London Council, on the other hand, will be able to undertake major schemes but these will probably be the exception rather than the rule. In any such case there should be no difficulty in sorting out which authority needs to buy the land. With the exception provided for in the Government's Committee Amendment, it seems sensible to secure, as the Bill does, that one authority only in the planning field shall be responsible for land purchase; but the Greater London Council may purchase subject to consultation. Among other things, this would avoid unnecessary competition and overlapping which was a point made by the noble Lord, Lord Crook, when he referred to the difficulty of getting land, and to its price; and I

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think that it would be advisable to avoid unnecessary competition between the Greater London Council and the borough councils. This is really a fundamental part of the Bill so far as the Government are concerned, and I am afraid I cannot agree to accept this Amendment.
On Question, Amendment negatived.
10.19 p.m.
LORD MORRISON OF LAMBETH LORD MORRISON OF LAMBETH moved, after Clause 29, to insert the following new clause:
Industrial and commercial lands
".—(1) On 1st April 1965 there shall vest in the Greater London Council any land which immediately before that date was held by the London county council or the Middlesex county council in an area zoned in any development plan for industry and commerce, being land so held and used for the purposes of industry or commerce, or held for redevelopment for those purposes, in pursuance of any of their functions under the Town and Country Planning Act 1962; but, not later than 31st March 1970 or such later date before 1st April 1975 as the Minister may direct, the Greater London Council shall, after consultation with the London borough councils, prepare and submit to the Minister a scheme with respect to that land—

(a) containing proposals as to what part, if any, of that land it is, in the opinion of the Greater London Council, necessary or desirable to transfer to the councils of specified London boroughs for use for or in connection with the exercise of the functions of those councils, and giving their grounds for that opinion;

(b) in the case of any of that land proposed to be transferred indicating any necessary modifications of any local Act or other instrument with respect to the land in question;

and the Minister, after consultation with the Greater London Council and any London borough council concerned, may by order give effect to the scheme either without modification or with such modifications as the Minister thinks fit.
(2) The Minister shall not make any order under section 81 of this Act in relation to any land to which this section applies except for the purpose of giving effect (either with or without modifications) to a scheme submitted to him under this section."
The noble Lord said: My Lords, this is a simple point which we discussed on the Committee stage. The London County Council and the Middlesex County Council have what one may call certain surplus lands, which they have acquired in the course of their development or redevelopment schemes, and industrial schemes, too. The question is: what is going to happen to these
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lands if and when this Act comes into effective force?
Now there are two ways of doing it. The first is proposed in the Bill, under which the Minister himself draws up a scheme, presumably after consultation, whereby the lands are divided between the Greater London Council and the new London boroughs. This Amendment proposes that the land should pass to the Greater London Council; that they should consult with the boroughs and the City Corporation; then that the Greater London Council, after that consultation, which one hopes might result in agreement—as it might—should produce a scheme that would go to the Minister, and then that the Minister should approve and/or modify the scheme. I think that what I have said is an accurate description of the proposals in the Amendment. We think it is the most sensible way round—and it is important that this should be done sensibly, because some of this land may affect future industrial development and provide facilities for industrialists who want sites. I hope that the Amendment will commend itself to the Government, and that the House will approve it. It is an Amendment of some real importance, as we see it. I beg to move.
Amendment moved—
After Clause 29, insert the said new clause.—(Lord Morrison of Lambeth.)
LORD HASTINGS: My Lords, as the noble Lord, Lord Morrison of Lambeth, has said, we had a lengthy discussion on this matter, which is, of course, important, on the Committee stage, and at that time the noble Lord, Lord Silkin, rather held the view, I think, that I had said that, whatever the advantages might be of retention by the Greater London Council, these areas must eventually go to the borough councils. But that, of course, was rather an exaggeration of what I implied. It is simply a question of the most effective way of using the available sites for factories. We think this can be done much better under the order-making procedure of Clause 81, and much more quickly, and that the Greater London Council do not necessarily have to own the properties in order to have that benefit of their use, which can be arranged by allowing them to have a voice in letting.

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But, of course, under the order-making procedure of Clause 81, the Greater London Council can perfectly well be allocated the ownership of these prospective factory sites, and it is not the case that property will be transferred to a borough if there are clear advantages in handing it to the Greater London Council. A very good example, I think, is in the case of a factory site outside London which would be essentially part of an overspill housing scheme. Obviously, such a site would go to the Greater London Council. So the purposes of the Amendment set down by the noble Lords can be looked after adequately and much more quickly under the order-making procedure of Clause 81. My Lords, I do not think I need say any more at this hour. I invite noble Lords to believe that we are going to tackle this matter in a businesslike and fair manner so as to achieve the best use of these sites. I would ask the noble Lords if they can see their way clear to withdrawing their Amendment.
On Question, Amendment negatived.
THE LORD CHANCELLOR: My Lords, I beg to move that the Report stage be now adjourned.

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
Returned from the Commons, agreed to, with Amendments; the said Amendments considered, and agreed to.
LONDON COUNTY COUNCIL (MONEY) BILL
Brought from the Commons; read 1a, and referred to the Examiners.
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