Sitting of 27 March 1963

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

MEMBERS (ACCESS TO HOUSE OF COMMONS)
Mr. Emrys Hughes: On a point of order. I wish to raise a point of order about rights of access to this House and the safety of Members. I understand that yesterday there was some difficulty outside and that a very large number of police, including mounted police, were here to protect Members against a deputation which included some of my constituents. I should like to have an assurance that today we can be guaranteed some protection against the lobbying deputation from infuriated schoolteachers, and I should like to ask whether you are satisfied, Mr. Speaker, that there are sufficient police precautions, including sufficient mounted police, and, if necessary Scots Guards, to protect Members against any possibility of danger.
Mr. Speaker: I have no reason to think that there is any deficiency in the Sessional Order to the carrying of which the hon. Member was a party.

ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Improvement Grants (Farming Syndicates)
    Miss Quennellasked the Minister of Agriculture, Fisheries and Food if lie will make the payments of improvement grants to farming syndicates on the same basis as improvement grants to individual farmers.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): The Government are paying grants to farmers'
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    machinery syndicates towards the cost of buildings to be used mainly for grain drying and storage or for housing farm machinery, and the terms of grant are broadly similar to those of farm improvement scheme grants to individual farmers.
    Miss Quennell: Is my hon. Friend aware that individual farmers receive grants in one amount, whereas in the case of syndicates the moneys received are 50 per cent. of the certificated costs with the balance spread over five years, and that this is hardly encouraging to members of farming syndicates?
    Mr. Scott-Hopkins: As my hon. Friend said, 50 per cent. is paid on completion of the building and the remainder is spread over five years. It is true. We do this because the grants are given for certain uses of the building only, and this is the only way we can retain a measure of control over its use for at least the initial period of five years.
    Miss Quennell: Can my hon. Friend have another look at this to see if it is possible to iron out the anomaly as between the two systems?
    Mr. Scott-Hopkins: I am always prepared to look at anything my hon. Friend wants to raise, but I think the position remains broadly as I have stated.

    Seeds and Plants (Report)
    Mr. B. Harrisonasked the Minister of Agriculture, Fisheries and Food whether he will introduce legislation to implement the findings of the Committee on the Transaction of Seeds.
    The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): My Department is working on proposals for legislation to implement most of the Committee's recommendations on seeds and plant breeders' rights, and there have recently been discussions on the Government's proposals with the organisations concerned. When it will be possible to introduce this legislation depends on parliamentary time being available.
    Mr. Harrison: Would my right hon. Friend bring all the pressure to bear that he can on those people who are responsible for the Parliamentary timetable to bring this important bit of legislation forward? I am fully aware of what his

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    Department is at present doing, and I think it would be a great pity if its work did not bear fruition in this Session.
    Mr. Soames: It is the Government's intention to legislate as soon as possible on this, especially in view of the fact that we have signed the International Convention for the Protection of New Varieties.
    Mr. Farr: Is my right hon. Friend aware of the possibility that some part of the report may now be out of date in view of the fact that it is nearly three years since the original Engholm Committee reported?
    Mr. Soames: No. I do not think it is out of date. Anyway, as I say, our proposals are being drawn up in collaboration with the interested parties.

    Rabbits
    Sir H. Harrisonasked the Minister of Agriculture, Fisheries and Food how many prosecutions were made under the Pests Act, 1954, during 1962 for harbouring rabbits.
    Mr. Scott-Hopkins: None, Sir. During 1962 we were able to get rabbits destroyed by issuing formal warnings to occupiers, followed, in a few cases, by default action on the part of the Ministry.
    Sir H. Harrison: Is my hon. Friend satisfied that rabbits really are being kept properly under control? Is he aware that there is an impression abroad that if an offender makes some small contribution no further proceedings will be taken against him? How long is it between the first inspection and the final destruction of the rabbits?
    Mr. Scott-Hopkins: We are never satisfied that sufficient is being done. One always wants to see more being done, but I can assure my hon. and gallant Friend that the existing system is working well. As to the last part of his supplementary question, I have not got available the exact time between the initial warning that the rabbits should be destroyed, and the taking of default action. I will let him know.

    Food Prices
    Mr. Darlingasked the Minister of Agriculture, Fisheries and Food what reply he has made, or intends to make,
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    to the representations sent to him by the British Farmers' and Smallholders' Association regarding the effects on food prices of present arrangements at fat stock auctions and at fruit and vegetable markets.
    Mr. Scott-Hopkins: No such representations have been received, although I am of course aware of the comments on these matters in the Association's recent Report.
    Mr. Darling: As the annual report makes strong criticism of the failure of the Government to introduce a proper meat marketing policy and their failure to do anything about horticultural marketing, can the hon. Gentleman tell us when we shall get some action on these two important matters and what kind of action it will be?
    Mr. Scott-Hopkins: The hon. Member will know that there is a committee studying marketing. But that is rather different from the Question that he actually asked. I must repeat that we have not received any actual representations from the association.
    Mr. W. Hamiltonasked the Minister of Agriculture, Fisheries and Food to what extent the contemplated changes in agricultural policy will result in increased food prices to the consumer; and whether he will make a statement.
    Mr. Soames: We have yet to carry through the necessary discussions before deciding on any changes, and I am not therefore in a position to make a statement or to assess what effect they may have on the level of food prices.
    Mr. Hamilton: Is the right hon. Gentleman aware that in the last year, with existing policies, food prices have gone up by not less than 10d. in the £ and that substantial increases will follow the new change of policy which the Government have indicated? Will he give an undertaking that the consumers will be given a clear indication before the next General Election of what it will involve for them?
    Mr. Soames: We shall, of course, be keeping consumers' interests very much in mind in deciding what changes are necessary. All I am saying is that I have no statement to make this afternoon.
    Mr. Stodart: Does not my right hon. Friend agree that it is highly satisfactory that the hon. Member for Fife, West (Mr. W. Hamilton) at last realises that the food support programme has benefited not only farmers but consumers?
    Mr. Hamilton: Before the right hon. Gentleman replies, is he aware that, despite the increased support, food prices are continually going up? Why should the consumer be fleeced both as a consumer and as a taxpayer?
    Mr. Soames: The hon. Gentleman will realise that our food prices would have been very much higher than they are today if we had not had the present system.
    Mr. Lipton: On a point of order, Mr. Speaker. In answering this Question, was not the Minister, in effect, also answering Question No. 31?
    Mr. Speaker: We will see when we get to No. 31.

    Potatoes
    Sir H. Butcherasked the Minister of Agriculture, Fisheries and Food whether, having regard to the outbreak of a disease similar to the North American spindle tuber, he will give an assurance that no potatoes infected or thought to be affected with this disease will be planted in the present season.
    Mr. Scott-Hopkins: In England and Wales this season all certified red skin seed potatoes, and as far as possible all uncertified seed, are being inspected before planting. Though it is impossible to guarantee that inspection will always reveal whether the disease is present, the action we have taken will reduce the risk to the minimum.
    Sir H. Butcher: While I thank my hon. Friend for his reply, may I ask him to impress on the Secretary of State for Scotland the importance of ensuring that no potatoes liable to this disease are allowed to cross the border?
    Mr. Scott-Hopkins: I am sure that my right hon. Friend is fully seized of my hon. Friend's suggestion.
    Mr. Mackieasked the Minister of Agriculture, Fisheries and Food what steps he is taking in conjunction with the
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    Potato Marketing Board to ensure an adequate supply of potatoes at reasonable prices for next year.
    Mr. Soames: As already announced, the Government have increased the guaranteed price for main crop potatoes. In addition the Potato Marketing Board have set up a Fund to support the market in years of surplus, to which the Government will make substantial contributions when needed. Both these measures are intended to encourage growers to plant an adequate acreage.
    Mr. Mackie: Is the right hon. Gentleman aware that the Potato Board is already refusing growers surplus acreages over their quota? Is he further aware that the difference in price between the guaranteed price of about £14 a ton and the surplus price of potatoes is anything up to £10 to £12 a ton and that this licks up all the Government contribution to support prices, with the result that farmers have no confidence in this system and that he will never get a further acreage of potatoes cultivated until he alters the system of guarantees for potatoes?
    Mr. Soames: I do not accept that. I think that last year and this year prices were higher than the guaranteed price. The Potato Marketing Board would like to see about 700,000 acres planted. This year we had about 660,000. It was for this reason that I increased slightly the guaranteed price for potatoes to give this further encouragement. As to the arrangements that are made with regard to the quota, the Board is concerned to get an acreage of about 700,000 acres, but we do not want much above that or we shall have a large surplus of potatoes which will have to be bought up.
    Sir H. Butcher: Will my right hon. Friend make sure that the Government and the Potato Board act early enough in the season in each year?
    Mr. Soames: Perhaps my hon. Friend would repeat that?
    Sir H. Butcher: Will my right hon. Friend check with the Potato Board to make sure that the Government and the Board come in sufficiently early in each year?
    Mr. Soames: If that be necessary, certainly, but it has not been necessary either this year or last year.
    Mr. Mackie: In the last four years out of five we have had fantastic prices for potatoes. Only one year was a surplus year. I am considering the consumer as well as the producer in this case, and unless another system is introduced there can be protection for neither the producer nor the consumer.
    Mr. Soames: It is with a view to protecting the consumer that we have been doing all we can to make sure of a greater acreage of potatoes being planted this year.

    Narcotic Baits
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food if he will discontinue the experimentation with and use of narcotic baits, now that the effects on wild life of the past winter have been assessed.
    Mr. Scott-Hopkins: The current experiments which were conducted after consultation with Wild Life interests are now coming to an end. As the ground this year was covered with snow for such an exceptionally long period, we have had no opportunity to assess properly the effectiveness of this means of control, or the degree of risk to wild life and game birds. A similar series of experiments may well be needed in 1963–64.
    Mr. Farr: Is my hon. Friend aware that reliable authorities have estimated that up to 50 per cent. of our wild life was exterminated by the bad weather last winter? In view of that, would it not be better if Ministry employees were used elsewhere and on other tasks than spreading more poisons around the countryside?
    Mr. Scott-Hopkins: These experiments are a valuable addition to our methods of attacking the problem of wood pigeons. As my hon. Friend knows well, they are a very serious problem to farmers and do a very great amount of damage to crops.

    Chemicals (Notification Scheme)
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food what
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    was the total number of notifications received by his Department and by the Secretary of State for Scotland under the Notification Scheme for Chemicals used in Agriculture in 1962, and the number of such notifications which failed to gain clearance by the advisory committee.
    Mr. Scott-Hopkins: 154 notifications were received. Twenty-one failed to gain clearance; 2 were withdrawn and three were cleared for extended trials only. Twenty were agreed only after modification of the manufacturers' original proposals. Fourteen were cleared provisionally for one year in order to obtain further data following commercial application, and these will be reviewed at the end of that period. Of the total of 134 notifications, only 35 related to new chemicals; the remainder were either for extension of the use of existing chemicals to other crops, or for new formulations of existing chemicals.
    Mr. Fan: While I thank my hon. Friend for that reply, might I ask whether he is aware that of some 450 notifications which have taken place since the inception of the scheme in 1957 only about 20 poisons have failed to gain clearance? In view of this, is it not time more stringent methods of control were adopted?
    Mr. Scott-Hopkins: No, Sir,. I am satisfied that the existing system, in which the Advisory Committee on Poisonous Substances receive notifications from the manufacturers, is working perfectly satisfactorily and that there is no need at this moment to do anything further.
    Mr. Darling: Is the hon. Gentleman aware that if he is satisfied he is one of the few people in the country who are satisfied with the use of chemicals on the scale now operating? Is he aware that very few of the manufacturers themselves are doing any research into the long-term effects of chemicals and that very few of his own research organisations are engaged in such research?
    Mr. Scott-Hopkins: Constant research is going on into the effects of chemicals on plant life and humans. I was saying that I was satisfied that the existing system works well within the given context.

    Fowl Pest
    Mr. Hiltonasked the Minister of Agriculture, Fisheries and Food, if he will make a statement on the progress made to date in the vaccination of poultry against fowl pest.
    Mr. Soames: On 18th February, I told the House that 32 million doses of subsidised fowl pest vaccine had been sold since 5th November last year. In the six weeks since, a further 27 million doses have been sold, making 50 million doses in all. This is sufficient to treat about 40 per cent. of the poultry which should have been vaccinated since 5th November, 1962.
    This increase in sales is welcome but there is still much farther to go if we are to reach our vaccination target of 80 per cent. or more of the national flock. The best cover has been given in areas such as East Anglia and Lancashire which have been most exposed to the disease: the worst has been in areas such as Wales and the north where the disease has rarely penetrated. With permission, I will circulate in the OFFICIAL REPORT details of sales of vaccine made through my Department.
    Outbreaks of the disease are now running at a low level and there is good evidence that when the disease strikes vaccinated flocks its effects are usually slight. In a few days' time vaccination will be the industry's only defence against fowl pest, and I do urge all poultry keepers to see that their flocks are protected no matter what part of the country they may be in.
    Mr. Hilton: While I thank the right hon. Gentleman for that long reply, may I ask whether he would not agree that the response so far is very unsatisfactory? What steps is he taking to ensure that as far as possible all the vaccine is really effective? Is he aware that there lime been cases where poultry keepers have conscientiously vaccinated their poultry but have still had fowl pest and have had to slaughter? What steps is he taking to compensate poultry keepers when the vaccine is ineffective?
    Mr. Soames: All compensation, except for the per-acute form of the disease of Fowl Plague, ends on 31st March. It has been shown that the effect of the disease on vaccinated birds is much slighter than it is on unvaccinated birds,
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    and vaccination is, thus, undoubtedly of great advantage to poultry keepers. What is wanted, of course, is that we should get a sufficient coverage of vaccinated birds throughout the country. Up to 85 per cent. is what we are aiming at, so that the flocks will not be it such risk as they are today.
    Mr. Prior: Is my right hon. Friend aware that as fast as we can get rid of one disease we get another in East Anglia, and is he aware that there I now have a disease called Beechingitis?
    Mr. Soames: I do not think that East Anglia is the only part of the country likely to be affected by that disease.
    Mr. Speaker: That does not arise on this Question anyhow.
    Following is the information:

    SUBSIDISED FOWL PEST VACCINE

    Summary for period 3th November, 1962 to 22nd March, 1963

    Region

    Number of applications for vaccine

    Total number of doses of vaccine ordered

    ('000)

    Eastern

    …

    6,201

    11,585·0

    East Midland

    …

    1,954

    2,776·6

    Northern

    …

    923

    815·7

    South Eastern

    …

    3,636

    5,504·4

    South Western

    …

    1,949

    2,572·6

    West Midland

    …

    2,580

    3,125·5

    Yorks/Lancs

    …

    5,575

    7,352·6

    Wales

    …

    665

    523·9

    *H.Q. Tolworth

    …

    503

    24,747·4

    TOTALS

    …

    23,986

    59,003·7

    * The arrangement for the supply of vaccine to large poultry organisations is being made by the Head Office of the Ministry's Animal Health Division at Tolworth. Just over 3,000 flocks are being supplied with vaccine under this arrangement, but it is not possible to apportion the vaccine issued on a geographical basis.

    Mundon Wash Drainage Scheme
    Mr. B. Harrisonasked the Minister of Agriculture, Fisheries and Food what further suggestions he has received for the Mundon Wash Drainage Scheme from the Essex River Board; and whether a grant will be forthcoming for this work.
    Mr. Scott-Hopkins: Our chief drainage engineer and the engineer to the Essex River Board have discussed draft alternative proposals for Mundon Wash and we

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    await a submission from the river board. When we receive this we will consider the question of grant.
    Mr. Harrison: Will my hon. Friend please hurry this up? It has been going on for years and years, and it is really time that we got this drainage scheme completed—or started, even.
    Mr. Scott-Hopkins: As I said, we are waiting for the river board to put a scheme before us, and then we shall do our very best to ensure that it is examined quickly. But at the moment we are waiting for the river board.

    Meat (Inspection)
    Mr. Darlingasked the Minister of Agriculture, Fisheries and Food whether he has completed his investigation of the measures needed to ensure that all meat is inspected by qualified public health inspectors before sale to the public; and if he will make a statement.
    Mr. Scott-Hopkins: My right hon. Friend hopes to make a statement shortly.
    Mr. Darling: Is not the hon. Gentleman ashamed of that reply? Does not he realise that nine years ago one of his predecessors gave an assurance that arrangements would be made as quickly as possible to ensure that all the meat slaughtered in this country would be inspected for fitness to eat? Since then, practically nothing has been done. Is he further aware that there are suggestions now—to which I hope he can give a reasonable answer—that the Minister wants the butchers to pay for the cost of inspection? I hope the hon. Gentleman does not think that his right hon. Friend can get away with that proposal.
    Mr. Scott-Hopkins: I do not agree that nothing has been done. A great deal of progress has been made. Only about 10 per cent, of meat is now uninspected. Very serious representations of substance have been made on the proposals put forward, and these will receive his attention. He hopes to come to a decision in the near future.
    Mr. Peart: Is the hon. Gentleman aware that we are always getting from him and his right hon. Friend the reply "shortly" or "soon" but that we never get any action? What does the hon. Gentleman mean by "shortly" in this
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    case? Does it mean a month, two months or six months?
    Mr. Scott-Hopkins: I mean as soon as my right hon. Friend has had time to take into account all the considerations, representations and suggestions which have been put to him. He will do this in order to arrive at the correct decision in the light of all the circumstances.
    Mr. C. Royle: What has happened to the proposed order with regard to making the trade pay for meat inspection? Is it now dead?
    Mr. Scott-Hopkins: That is part of what my right hon. Friend is considering at the moment.

    Carcase Meat Imports (Yugoslavia)
    Sir J. Langford-Holtasked the Minister of Agriculture, Fisheries and Food what has been the quantity of carcase meat imported from Yugoslavia in each of the last five years.
    Mr. Soames: Imports of carcase meat from Yugoslavia were negligible prior to 1960 when they rose to 4,000 tons, mainly of pork. In 1961 imports were 22,000 tons and in 1962, 42,000 tons, in each case consisting largely of beef. The Yugoslav Government have told us that they do not expect their exports of beef to us this year will exceed 30,000 tons.
    Sir J. Langford-Holt: Even with this reduction, this is a prodigious increase in recent years. In view of the upset it is causing the marketing system, is my right hon. Friend absolutely certain that there is no evidence of dumping?
    Mr. Soames: There is no evidence of dumping.

    Sheep (Ritual Killing)
    Mr. Doddsasked the Minister of Agriculture, Fisheries and Food (1) if he will consider introducing legislation to prohibit the export of sheep for ritual killing by processes which entail considerable suffering;
    (2) what action was taken by his officials to ensure the minimum amount of suffering to hundreds of sheep in the process of transportation recently from this country to Tunisia, details of which an known to his Department.
    Mr. Soames: One of my veterinary officers, who was present when the consignment of sheep was loaded for shipment to Tunisia, ensured that there was no overcrowding and that sufficient fodder was available, in accordance with the Animals (Sea Transport) Orders. I have no present intention of introducing legislation to prohibit the export of animals for slaughter by Moslem ritual. Moslems are forbidden to eat meat from animals which have not been ritually slaughtered, and the practice is lawful in this country for those of Moslem faith.
    Mr. Dodds: I thank the right hon. Gentleman for that statement. As he is aware, there is deep feeling amongst animal lovers over the fact that a large number of sheep were exported to Tunisia in the knowledge that their killing would entail great hardship. In view of the humane slaughtering practices in this country, is it not difficult to explain that the sheep are just unlucky if they happen to be chosen for this traffic? Is he aware that many people expect us to do more to see that these animals are treated in a way more in conformity with our practice in this country?
    Mr. Soames: We have our own rules about slaughter, but ritual slaughter for a religious faith is permitted.

    Horticultural Improvement Scheme
    Mr. Wallasked the Minister of Agriculture, Fisheries and Food if he will extend the facilities for which grants can be made under the Horticultural Improvement Scheme.
    Mr. Soames: If my hon. Friend will let me know what additional facilities he has in mind, I will gladly look at them.
    Mr. Wall: So only one-third of the sum voted by Parliament has so far been spent. Can my right hon. Friend consider extending the scheme to include modern labour-saving devices and the installation of heating apparatus? Is he aware that unless it is extended it will be increasingly difficult for British producers to be competitive with the Continental growers?
    Mr. Soames: I am considering this matter. If my hon. Friend would like to give me more specific ideas of what he has in mind, I would be grateful.
    Sir P. Agnew: Is not one of the difficulties not that the range of things for which grants can be given should be extended but that in the existing range the amount of two-thirds to be found by the producer is in many cases too large to match the one-third given by the Government? Could not that be looked at?
    Mr. Soames: Thirty-three and one-third per cent. is a very generous grant.
    Mr. Godman Irvine: Will my right hon. Friend not overlook the problem of a house which was blown down, and put, by the advice of his Department, on another site, and then found to be ineligible for grant?
    Mr. Soames: I would hate to overlook that.

    Bacon
    Sir J. Langford-Holtasked the Minister of Agriculture, Fisheries and Food by what amount the consumption of British bacon has fallen in the last 10 years; and by what amount imports have increased during the same period.
    Mr. Soames: Home production of pig-meat increased from 502,000 tons in 1953 to 720,000 tons in 1962. The quantity going for bacon, which had been purposely stimulated during control and rationing, fell in this period from 244,000 to 221,000 tons, but is still 40 per cent. higher than before the war. In the same period bacon imports have increased from 312,000 tons to 399,000 tons which is slightly above the pre-war level. Total supplies of bacon in 1953 were 556,000 tons and in 1962, 620,000, so consumption has increased.

    Home-grown Timber
    Mr. Godman Irvineasked the Minister of Agriculture, Fisheries and Food, on what evidence he bases his view that the setback in the market for homegrown timber, as borne out by the published figures for sales by the Forestry Commission, is only temporary.
    Mr. Soames: During the next few years several new enterpryses for processing timber are likely to come into operation in Britain and these should stimulate demand for home-grown softwood thinnings. As to prices, those for home-grown timber are bound to be linked closely to the level

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    of world prices, since we produce at home less than 10 per cent. of our present consumption of wood and wood products. Over the last twelve years, the average price of imported sawn softwoods, which is a good general indicator, has risen from about £54 per standard in 1950 to about £74 in 1962, an increase of about 37 per cent.
    Mr. Godman Irvine: Would not my right hon. Friend agree that the figures provided by the Forestry Commission indicate that during the last five years there has been a general tendency for prices of conifers to go down while the position of hard woods shows no great improvement? In these circumstances, will he take a look at the figures again to see whether they can be brought more into line?
    Mr. Soames: I agree that there have been some falls in prices in recent years, but—and here one tries to forecast the future—this must be seen against the background of what appears to be a rise in world prices. The prices of oar timber must be affected by world prices as we import about 90 per cent. of what we use.
    Mr. F. M. Bennett: At what annual average rate is the loss or subsidy of the Commission running? Will this loss or subsidy be allowed to continue under the E.F.T.A. arrangements?
    Mr. Soames: That is a long way from the Question on the Order Paper. I would require notice of it.

    Wetley Moor, Staffordshire
    Mr. Harold Daviesasked the Minister of Agriculture, Fisheries and Food what report he has had from the Forestry Commission on the scheme to turn Wetley Moor, Near Werrington, Staffordshire, into a public park where a number of broad-leaved trees could be planted and where, with drainage schemes, this area would serve as an amenity for the people of North Staffordshire; and whether the project will be considered for grant aid.
    Mr. Scott-Hopkins: It would be the responsibility of the local authority to formulate such a scheme and, as fax as the Ministry or the Forestry Commission is aware, it has not yet done so.
    Mr. Davies: Is the hon. Gentleman therefore implying that there has so far been no approach for any grant for such a scheme?
    Mr. Scott-Hopkins: As far as I am aware, that is the position.
    Mr. Davies: May I therefore ask the hon. Gentleman to consider it favourably, if such an approach were made to him, because of the importance of the matter?
    Mr. Speaker: The basis of that supplementary question would appear to be hypothetical.

    Wheat
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food what was the average price per ton of imported wheat in February this year and in February 1962, respectively.
    Mr. Wingfield Digbyasked the Minister of Agriculture, Fisheries and Food (1) how far the reduction in the average ex farm price for wheat from £23 14s. 4d. per ton in January 1962 to £17 3s. 4d. in January 1963 was reflected in reduced prices to the consumer;
    (2) by how much per ton the Exchequer cost of the support price of wheat rose between January 1962 and January 1963.
    Mr. Soames: The average c.i.f. value of imported wheat in February was £26 14s. a ton compared with £26 10s. in February last year. As a result of the much heavier home crop this year the cost of the Exchequer support of wheat was about £6 10s. a ton greater this February than last. The price of bread flour has been reduced by 2s. per sack.
    Mr. Stodart: In view of the very substantial difference, amounting to £10 a ton, between the price of dried home wheat and dried imported wheat, will my right hon. Friend say whether there is no opportunity of taking greater advantage of the cheaper home-grown wheat for use in the bread baked in this country, as has been done in many European countries, thereby reducing the cost of the loaf still further?
    Mr. Soames: Our loaf is of a type different from the European loaf. It requires a good deal of hard wheat, which

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    is not put into the European loaf. The proportion going into the grist is about 20 per cent. of home-grown soft wheat, and the bulk of the remainder is either hard or semi-hard wheat which are not grown in this country.
    Mr. Digby: Is it not very disappointing for our farmers who have kept their wheat for a long time in expensive bins to find that they are getting so little for the difference, and doubly disappointing in that during that time the price of grain, far from falling, has actually risen?
    Mr. Soames: Because the price of imported wheat has remained more or less steady while that of home wheat has fallen, the price of a 280 lb. sack has fallen by 2s. in the last year. As 9s. a sack represents a ½d. on a loaf of bread, 2s. represents about one-eighth of a penny. As to the position of farmers who have been hanging on to their wheat, I think that my hon. Friend will bear in mind that last harvest we had a record production of some 3½ million tons of good wheat, which was much higher than ever produced before. The amount going into the grist was more or less the same, so an increasing proportion has had to be sold for feed wheat.
    Mr. Mackie: Would not the right hon. Gentleman agree that the wheat which we grow in this country and for which we are paid at such a low price is the same as that grown in France, mostly Capelle Duprez, which produces the most beautiful bread, which I am sure the right hon. Gentleman enjoys as we all do? Why cannot we do the same in this country and save ourselves millions of £s?
    Mr. Soames: The French loaf has qualities which are different from our loaf. The hon. Member might have views about the French loaf, but on the whole the public gets the type of loaf it wants.

    Beef
    Mr. Stodartasked the Minister of Agriculture, Fisheries and Food what has been the average market price per live cwt. received by farmers for fat cattle in March, 1963, up to the most recent convenient date; and what was the equivalent figure during the same period last year.
    Mr. Morrisasked the Minister of Agriculture, Fisheries and Food what is the percentage increase in the total payments of beef subsidy in the last available four weeks compared with a similar period last year.
    Sir Richard Glynasked the Minister of Agriculture, Fisheries and Food whether he is aware that Argentine chilled hindquarters of beef fetched Is. 10d. per lb. at Smithfield Market on 2nd March, and that this was 8d. per lb. less than similar Argentine beef fetched on the corresponding date last year; by how much British consumers will benefit from this reduction in price; and what will be the resultant increased cost of farm price guarantees.
    Mr. Soames: The average market price for fat cattle in the last four weeks was 121/3d. cwt. The corresponding figure last year was 144/ 10d. Payments under the fatstock guarantee were 71 per cent. up over the same period last year, but the subsidy bill is determined over the year as a whole. The recent trend in market prices will not lead to a Supplementary Estimate for this financial year. For the financial year 1963–64 as yet I have no reason to expect that outturn is likely to exceed our forecast for fatstock.
    The extent to which consumers benefit from lower prices may vary from one shop to another, but I know at least one chain of multiple butchers which was selling chilled beef on the 2nd March this year at prices up to ls. 8d. per lb. lower than a year ago.
    Mr. Stodart: Can my right hon. Friend give any indication of the price to which fat cattle would have to fall in the open market before a Supplementary Estimate was involved? As much the same as is happening now happened two years ago, will he take the best steps he can to try to prevent the imports of beef from being concentrated haphazardly into a short time?
    Mr. Soames: I am very much aware of this problem. There are other Questions on the Order Paper dealing with that specific point.
    Mr. Morris: How long is the Minister to allow this to go on without taking any action?
    Mr. Soames: There is a Question on the Order Paper specifically dealing with that.
    Sir Richard Glyn: Has my right hon. Friend noticed the substantial reduction in the price of Argentine beef now being brought into this country compared with the same period a year ago? Is he satisfied that there is no element of subsidised dumping in the present imports? Will he agree that a greatly increased quantity of beef at so much lower prices could have a very serious effect on the British market?
    Mr. Soames: Yes, Sir. There is no evidence of the dumping of Argentine beef at these prices. The National Federation of Meat Traders tells me that its returns show that since the end of January the average reductions in the prices of home killed beef made by butchers have been as follows: rump steak and sirloin, boneless, 15 per cent.; topside, silverside, and cheek flank, 8 per cent.; fore ribs, back ribs and chuck steak, 12 per cent.; brisket and flank 20 per cent.
    Sir A. Hurdasked the Minister of Agriculture, Fisheries and Food if, in view of the recent fall in market values for beef cattle and the consequent rise in the Exchequer guarantee payments from 24s. a cwt. in mid-January to 63s. a cwt. this week, Her Majesty's Government have taken action to ensure that imports of beef, particularly from Argentina, are reduced to more normal levels with due regard to the supplies of home-killed beef available.
    Mr. Peartasked the Minister of Agriculture, Fisheries and Food whether he will make a statement about the effect of meat imports from the Argentine and Yugoslavia on the home meat market.
    Mr. Soames: The higher level of beef imports over the last three months has contributed significantly to the present weakness of our meat market. Moreover, the higher level of imported supplies has coincided with a somewhat higher level of home supplies.
    The Government called the attention of the Argentine Government and the Yugoslav Government, as our principal overseas suppliers of chilled beef, to the situation and urged them to take account of the state of the United Kingdom meat
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    market in planning their exports. Both Governments have replied recognising their interest in the stability of our market and indicating their willingness to discuss the problem with us. The Yugoslavs have indeed informed us that it is not expected that their exports this year will exceed 30,000 tons as against nearly 40,000 tons in 1962.
    We have arranged talks with the Argentine Government, the major supplier, about the future levels of their supplies. Clearly it is in everyone's interest that stability should be restored and I am confident that we shall receive the full co-operation of our overseas suppliers. But I would make it clear that the Government is determined to bring about arrangements which will ensure reasonable stability in the United Kingdom meat market.
    Sir A. Hurd: I thank my right hon. Friend for that reassuring reply, so far as it goes. Can he give us an assurance that after the present loadings and commitments of Argentine chilled beef there will be a very speedy reduction, particularly during the period up to October, when many home-killed cattle will be coming forward? Can he also say whether it is now quite clear that the Government are taking a grip on events in the meat market so as to ensure that a check is kept on the quantities of Argentine and Yugoslavian and other meat imported, to keep in line with the increasing supplies of home-produced beef which it has been the consistent policy of the Government to encourage?
    Mr. Soames: Yes, Sir. What we first have to do is to work out arrangements for the immediate future to ensure that our market is not undermined. The phase through which we are now going, of serious undermining of the market, shows the difficulties and strains which have been put upon our existing system which was conceived at a time of serious shortage of food as opposed to the present time when food is in plenty in the Western world.
    For the immediate future, we intend to have talks with our major suppliers to ensure that for the remainder of the months of the coming financial year our market is not overloaded. For the future; we are also to have talks, as we have said, with overseas suppliers to lead us

    1309
    to bring about changes which are necessary in the present system to meet existing circumstances.
    Mr. Peart: Is not the right hon. Gentleman aware that it would be far better to be much more precise? Will it be the Board of Trade which will conduct these negotiations? Is he aware that there is a feeling that the Board of Trade and not the Minister of Agriculture has been determining policy in this matter? Is he further aware that this emphasises the importance of announcing some major marketing reform so that we have a statutory authority which would have some say in imports?
    Mr. Soames: As to the Board of Trade running policy, the hon. Member knows full well that for a long time we have been pursuing the policy of guaranteed prices to farmers coupled with virtually unrestricted imports. This has brought about open-ended commitments for the Exchequer to meet the bill for our system. It is this open-ended nature of the commitments which we intend to change.
    Mr. Maxwell-Hyslop: Would my right hon. Friend draw to the special attention of his right hon. Friend the President of the Board of Trade that in the course of the last twelve years exports of Price Review commodities from Argentina to this country have increased to double the rate of the total Argentine imports of all commodities from the United Kingdom?
    Mr. Soames: I do not have those figures with me.
    Mr. Oram: While recognising that reasonable stability for the home market is important, are not there two other vitally important considerations to be weighed in the balance: first, the interests of the consumers who want cheaper meat, and, secondly, the interests of exporters? If we are to export to Yugoslavia and the Argentine, do not we also need to receive their commodities?
    Mr. Soames: Of course this is so, but it is a question of striking a proper balance.
    Mr. Bullardasked the Minister of Agriculture, Fisheries and Food what account is taken of the estimated volume
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    of overseas supplies of beef in determining the guaranteed price to be paid for home-produced fat cattle.
    Mr. Soames: All factors affecting the market supply situation are taken into account. The guaranteed price is set to ensure a fair return to producers.
    Mr. Bullard: It has been said that the increased importation of Argentine beef is approaching an amount which some people regard as being normal. Will my right hon. Friend give the House an assurance that with the great increases in home production, stimulated I am glad to say by the policy which my right hon. Friend and his predecessors have followed in British agriculture, adequate room will be left in the home market for these increases, and that the question of returning to normality, of going back to some norm of several years back, is out of the question in any agreement which is come to with the Argentine?
    Mr. Soames: What we are to discuss in the immediate talks is the level of exports to this country in the coming months. What I think my hon. Friend has in mind is the longer-term issue where we have to strike a proper balance against the background of our national interest between home production and imports.
    Mr. Darling: Would the right hon. Gentleman agree that to turn the impart tap off and on whenever he is pressed to do so will not solve this marketing problem? Would not he agree that the first essential step is to have a proper system of factory abattoirs in this country and fair prices to the farmers to deliver cattle and pigs to the abattoirs, and a commission to make sure that contracts are made with overseas suppliers at stable prices? The Liberal Party has adopted these proposals, which we have been advocating for years. Would not the right hon. Gentleman think it a good idea to fall in line so that we can have complete unanimity on this?
    Mr. Soames: The right hon. Gentleman seems to have definite ideas about what should be done to put all these troubles right. They are very complex indeed, and we shall shortly be taking the advice of a committee which was

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    set up in 1961 and which has been looking into this problem in great detail. I look forward to receiving that advice.

    Market Prices (Fatstock and Cereals)
    Mr. Bullardasked the Minister of Agriculture, Fisheries and Food whether he has made an up-to-date estimate of the probable effect of the present trend of the market prices of fat cattle, sheep and pigs, and of wheat and barley, on the cost of the farm price guarantees to the Exchequer.
    Mr. Soames: Yes. I am satisfied that the recent trend in market prices will not mean any significant excess over the estimates given in the Annual Review White Paper, 1963, of the cost of the guarantees for fatstock and cereals during the current financial year. As for the financial year 1963–64, as yet I see no reason to expect that, taking the estimates as a whole, the outturn is likely to exceed our forecast.
    Mr. Bullard: I am very grateful to my right hon. Friend for that hopeful forecast of future events, but is he satisfied that he has mechanism within his control for checking excessive imports in time to prevent their seriously affecting the estimate of the cost of the guarantees before actual harm is done to the market? As time goes very quickly and another season quickly comes round, will he take steps to see that he has adequate means at his disposal before the next season arrives?
    Mr. Soames: As my hon. Friend knows, this is obviously a major part of the discussions that we are to have in the months ahead.

    Oyster Industry
    Mr. Buckasked the Minister of Agriculture, Fisheries and Food if he will take steps to instigate a full investigation into the losses sustained by the oyster industry through the recent exceptional weather; and if he will devise a scheme to provide the industry with appropriate assistance.
    Mr. Scott-Hopkins: I have nothing to add to the replies I gave to my hon. Friend the Member for Maldon (Mr. B. Harrison) on the 20th and 25th March.
    Mr. Buck: Would my right hon. Friend say here and now that he accepts the principle that the oyster industry must receive assistance if it is to survive? Would not he agree that any delay in dealing with this matter will merely reveal whether this undoubted calamity is a total calamity? That is all that can be revealed by delay. Will my hon. Friend accept here and now the principle that assistance must be given to this industry?
    Mr. Scott-Hopkins: No, Sir.
    Mr. B. Harrison: In view of the unsatisfactory nature of that reply, I wish to give notice that I shall raise this matter on the Adjournment at the earliest possible opportunity.

    Welsh Agricultural College
    Mr. Morrisasked the Minister of Agriculture, Fisheries and Food whether he will now make a statement on the proposed Welsh Agricultural College.
    Mr. Scott-Hopkins: As my right hon. Friend the Prime Minister explained to the hon. Member on 7th March, the Ministers concerned are already in the closest consultation on this matter and there will be no avoidable delay in making a statement.
    Mr. Morris: Is not the Parliamentary Secretary stalling on this issue? Have not we been told that this decision would be made "soon", "very soon", and "imminently"? Were not we told by the Minister that a statement would be made before Christmas? Was not that promise dishonoured, and were not we told by the Parliamentary Secretary in early February that the decision would be made within the next few weeks?
    Mr. Scott-Hopkins: Indeed, we are consulting on this matter with the greatest urgency. We are fully aware of the need for an early decision, and I hope that the hon. Gentleman will not have to wait too long.
    Mr. Peart: Is the hon. Gentleman not aware that this approach is unsatisfactory? Our Welsh friends have been given promises over and over again, and all we get today is another evasion. Why does not the Minister say that he will do it now, instead of sitting there mumbling?
    Mr. Scott-Hopkins: I have nothing further to add to my previous answer.
    Mr. Morris: On a point of order. In view of the unsatisfactory nature of that reply, I intend to raise this matter on the Adjournment at the earliest possible opportunity.

    Price Review (Food Prices)
    Mr. Liptonasked the Minister of Agriculture, Fisheries and Food what he estimates the effect will be of the recent Price Review on the general level of retail food prices.
    Mr. Soames: The retail price of milk will go up by ½d. a pint for one extra month which will mean an increase of about 0·16 on the all-items index of retail prices for that one month. Apart from this the Review decisions will have no direct effect on what the consumer pays.
    Mr. Lipton: Is it not by now quite obvious that the Government have got themselves into a frightful mess over the relationship between subsidies and retail prices to the consumers, whose interests we are supposed to have regard to? Has not the right hon. Gentleman noticed that the slight fall in prices—to which he may have referred in previous answers bears no relation at all to the tremendous cost to the taxpayer, or to the value which the consumer is getting, or to the millions of £s of subsidies which the Minister is dishing out at present?
    Mr. Soames: That is unfair. They bear a considerable relationship—and there have been considerable price falls. Furthermore, the hon. Member knows perfectly well that as a result of this system the consumer in this country has been getting his food much cheaper than have consumers in European countries which follow other systems.

    Arbitration Award, County Durham
    Mr. Woofasked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the arbitration procedure under the Agricultural Holdings Act; whether he is aware of the circumstances under which an award was made against Mr. Thomas Howdon of Lock-haugh Farm, Rowlands Gill, Co. Durham; and whether he will make a statement.
    Mr. Scott-Hopkins: My right hon. Friend is satisfied that the general arbitration procedure constitutes a simple, effective and comparatively inexpensive method of settling differences between landlords and tenants, and I think it is accepted as such by both sides of the industry. An arbitration award is final and binding upon the parries, and my right hon. Friend has no power to intervene. It would therefore not be appropriate for me to comment on the specific case the hon. Member has mentioned.
    Mr. Woof: Is the Parliamentary Secretary aware that the family of this tenant has farmed this farm for the past 140 years? Is he also aware that the arbitrator has refused to disclose to the farmer particulars of certain alleged breaches? Does such conduct justify a notice to quit? Does the Parliamentary Secretary not think that it is an outrageous injustice to be at the mercy of an arbitrator in such circumstances? Is there nothing that can be done to rectify this injustice? Will the hon. Gentleman consult his right hon. Friend the Minister and ask him to intervene to stop this eviction?
    Mr. Scott-Hopkins: As I said, my right hon. Friend has no power to intervene. When the arbitrator's decision has been made it is final and binding on both parties. The arbitrator in this case was agreed to by both parties before the arbitration took place. I can assure the hon. Member that there is nothing that my right hon. Friend can do in this case.

    Dutch Milk
    Mr. Peartasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the imports of Dutch milk.
    Mr. Soames: The United States authorities have invited tenders from both British and continental dairies for the supply of milk to their Service units here for the coming twelve months. I understand that the tenders are now being reviewed, and that a decision will not be reached for some little time.
    Mr. Peart: Is not the Minister aware that there is considerable feeling about this? Is it not absurd that Service stations in this country should have to rely on imports of milk from outside? Will the Minister put pressure on the Ministry of

    1315
    Defence to make additional representations in this matter? The situation is absurd.
    Mr. Soames: I can assure the hon. Member that full representations have been made, at my request. The Minister of State saw the Minister at the American Embassy on 28th February and emphasised to him the strong reason why, in our view, the American Service units should get their milk from British sources.
    Sir A. Hurd: Can we take it that the contracts for the supply of this milk are now the same for the Dutch as for ourselves? In earlier stages it seemed that the Dutch were getting easier terms than we were.
    Mr. Soames: This matter has not been dealt with through me, but, as I understand it, that is the case.

  MINISTRY OF DEFENCE

    Cyprus Base
    Mr. Frank Allaunasked the Minister of Defence when agreement was reached with the Government of Cyprus that the British base there should be used for rockets or nuclear weapons.
    The Minister of Defence (Mr. Peter Thorneycroft): No question arises of seeking agreement to the deployment of weapons in sovereign base areas.
    Mr. Allaun: Will the Minister assure the House that there are no plans for the basing of nuclear weapons, rockets or Polaris submarines on the island?
    Mr. Thorneycroft: No. The essence of a sovereign base area is that we can deploy such weapons as we think fit at such time as we think fit.
    Mr. Allaun: Surely the Cypriot people—who are very concerned about this—are entitled to know whether the Government will base these things there.
    Mr. Thorneycroft: No Government would ever give an assurance as to the types of weapon which they would deploy in the future in a sovereign base area.
    Mr. Paget: As we have no harbour we could not very well have Polaris there.
    Mr. Thorneycroft: This certainly would be a handicap.

    N.A.T.O. Exercise Fallex
    Mr. Frank Allaunasked the Minister of Defence if he will give details of the towns and targets calculated to have been destroyed and the casualties which were estimated as possible in Britain from the North Atlantic Treaty Organisation exercise Fallex of September, 1962.
    Mr. Thorneycroft: No, Sir. This information is confidential to N.A.T.O.
    Mr. Allaun: Is it not true that between 10 million and 15 million people were calculated as having been killed in this exercise?
    An Hon. Member: Who said so?
    Mr. Allaun: It was reported by Der Spiegel and other newspapers. Is it not the case that the whole exercise was called to an early halt because of the complete chaos which had resulted, which was bringing all military activity to an end?
    Mr. Thorneycroft: I am here concerned not with anybody else's calculations but with confidential information on a major exercise.

    N.A.T.O. (Mixed-Manned Force)
    Mr. Biggs-Davisonasked the Minisster of Defence whether he will give an assurance that Her Majesty's Government will take no part in any North Atlantic Treaty Organisation Polaris fleet which is of a multinational, multilateral, mixed-manned or other polyglot nature without further reference to Parliament; and what are the rights and obligations of personnel called on to serve in a ship not being one of Her Majesty's.
    Captain Litchfieldasked the Minister of Defence what military reasons have led Her Majesty's Government to support proposals for a North Atlantic Treaty Organisation multilateral force consisting of multimanned ships; and what operational advantages multi-manned ships are expected to have over national-manned ships.
    Mr. Healeyasked the Minister of Defence what percentage of the cost of the proposed North Atlantic Treaty Organisation multilateral force will be assumed by Her Majesty's Government.
    Mr. Croninasked the Minister of Defence if he will make a statement on the strategic purpose of the proposed North Atlantic Treaty Organisation multilateral force.
    Mr. Thorneycroft: I have nothing to add to what my right hon. Friend, the Lord Privy Seal said yesterday about the proposed N.A.T.O. mixed-manned force, or to what he said on 20th March about consulting this House.
    Mr. Biggs-Davison: Did not my right hon. Friend the Lord Privy Seal give some sort of token approval to a multi-manned scheme of this kind? Have not we got enough to do and enough to pay for without going into these extraordinary enterprises? Will my right hon. Friend straight away say that no member of Her Majesty's Forces will be expected to serve in any form of ship which is not under the command of an officer holding Her Majesty's Commission?
    Mr. Thorneycroft: I would not wish to add to or subtract from what my right hon. Friend said, but I think that all he said was that this was an American proposal which was being examined by us and other European nations.
    Captain Litchfield: Is my right hon. Friend aware that on 20th March the Lord Privy Seal said:
    "The view of Her Majesty's Government is that the American proposals for a multilateral force consisting of multimanned ships is one which deserves support."—[OFFICIAL REPORT, 20th March, 1963; Val. 674, c. 380.]
    Is it not abundantly clear that whatever may be said for this scheme politically, from the military point of view it is very unlikely to be effective? Does my right hon. Friend really think that this is the best way of disposing of our already insufficient naval manpower?
    Mr. Thorneycroft: The question of what part we can play is rather a different one. I think that my right hon. Friend was referring to the proposal as being one suggestion of the way in which countries not otherwise equipped with nuclear weapons might participate.
    Mr. Healey: Is it not the case that Her Majesty's Government are already committed to three separate strategic nuclear weapon systems other than the
    1318
    proposed multilateral N.A.T.O. deterrent? The right hon. Gentleman looks puzzled, but he told us in the defence debate that we are committed to the V-bombers, a Polaris submarine force, and the Strategic T.S.R.2 force. Can he give us an idea, at any rate, of how much money Her Majesty's Government are prepared to contribute to the proposal, which the Americans have said is likely to cost, in all, £1,800 million?
    Mr. Thorneycroft: Certainly not until the military characteristics of the proposals have been examined.
    Mr. Shinwell: In view of the confusion about this matter, and as it is one of vital importance to our defence organisation, and we are not able to debate the matter by way of Question and Answer, will the Minister confirm that no final decision will be taken about any of these schemes until Parliament has been consulted?
    Mr. Thorneycroft: The right hon. Gentleman knows that the relations between the Executive and Parliament will be the same in this as in any other matter.
    Mr. Warbey: In view of the fact that statements have been made by the Lord Privy Seal that the Government support the American proposal for a multilateral force, will the Minister say whether his defence experts could think up a nuclear deterrent which was more provocative and at the same time more vulnerable than a force of vessels disguised as merchant vessels loaded with Polaris missiles floating about in the Baltic Sea?
    Mr. Thorneycroft: I realise that that is the hon. Member's own rather provocative comment on this proposal. As it is under examination he will not expect me to endorse it at this stage.
    Mr. Paget: Is the right hon. Gentleman aware that, for their safety, submarines require a particular level of mutual confidence amongst their crews and that this is the more so in these days of long submersion? Is he aware that I have discussed this matter with a number of distinguished submariners, both German and British, and that their united view is that they would rather swim?
    Mr. Thorneycroft: That would certainly be a factor to be borne in mind.

RAILWAYS BOARD (PROPOSALS)
The Minister of Transport (Mr. Ernest Marples): Mr. Speaker, with your permission and that of the House I wish to make a statement.
The Railways Board's proposals for reshaping the British railways system were published today. Copies have been available in the Vote Office since noon.
The Government are greatly indebted to Dr. Beeching and his Board for their comprehensive proposals, which flow from the most massive compilation and systematic analysis of information about our railways ever attempted. We agree that extensive reshaping on the lines now proposed is essential.
The Report offers a firm prospect of an efficient and modern railway system handling those traffics technically best suited to rail. Reductions in the present subsidy of about £150 million will release economic resources which can be better used in the national interest elsewhere. The Board's aim is, therefore, wholly consistent with our policy of modernisation and redevelopment.
The Report is a major contribution to the Government's policy of providing an efficient, economic, and well-balanced transport system for Great Britain as a whole. When the new shape and pattern of the railways are clear we shall have a foundation on which we can create such a system. It is not possible to have effective and efficient co-ordination until we have as a basis a modern twentieth century railway system.
In the meantime, steps are being taken by the Secretary of State for Scotland and myself to see that any additional demands on our roads will be met. Also, I am meeting representatives of the bus operators on 9th April and both the Railways Board and myself will consult the road haulage industry.
The changes proposed by the Board will affect many people and further careful study and consultation by the Government is necessary. The Railways Board will, of course, be following the agreed procedures for consultation with its staff. The Government, for their part, will pay special regard to the long-term requirements of particular areas, including those
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arising from planned movements of population and industry.
I should like now to deal with three main points. First, freight services. Clearly, rationalisation here is of the greatest importance, not merely to the railways' finances, but to industry and commerce. For example, by reducing rail costs and improving methods of distribution, the Railways Board believes that a substantial saving can be achieved on the carriage of some types of coal by rail. On freight generally, the Board will discuss the future possibilities with its customers. It will also discuss the implications of its proposals with other transport interests.
Secondly, passenger services. The most controversial part of the plan is the withdrawal of many passenger services. This is necessary if better railway services are to be provided to meet the real needs of the nation. But I must emphasise that, in the procedures to be followed when passenger closures are proposed, Parliament has laid down very extensive safeguards. Under the Transport Act, 1962, each proposal must be published in advance. Objections can be made to the transport users' consultative committees, which will report to me on any hardship involved.
No opposed closure may be carried out without my consent, and I shall take into account all important factors, including social and defence considerations, the pattern of industrial development and possible effects on roads and road traffic.
The Report makes it clear that in the remoter areas of the country there will be special problems. This applies not only in Scotland and Wales, but in some parts of England, and to communications with Northern Ireland. But in this country a widespread network of bus services already exists and I shall see that, where necessary, adequate alternative means of transport are available before a railway passenger closure takes place.
I recently announced the arrangements for co-operation and co-ordination made between the railways and London Transport Boards under the new Transport Act. The Government will closely consider those passages in the Report on suburban commuter services in London and elsewhere.
My third point is on staff. The effect of the Board's proposals on railway employees must be of special concern

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to the Board, the unions and the Government. Our railways will require fewer men in future. The best present estimate of the total reduction these proposals will give rise to over the next few years is of the order of 70,000. But most of this reduction will be effected by normal wastage and control of recruitment. Actual discharges are not expected to be more than a small proportion of the total staff reduction. The number will depend largely on how far it is possible to arrange for men to move to other work and different areas.
Even so, there will be problems for those displaced. The Government will do all they can to help in retraining and placing them. We specially welcome the recent agreement between the Board and the unions representing the conciliation grades. This does two things: first, it facilitates transfers from one part of the system to another; and, secondly, it provides fair compensation for those for whom work can no longer be found on the railways.
The Government will proceed speedily with their consultations and discussion, so that we can soon make a fuller statement.
Mr. Strauss: Dr. Beeching's Report has, of course, been in our hands for only a few hours and it has been quite impossible to study all its implications in that short time. We should like a debate to take place as soon as possible after we have studied the Report fully so that all hon. Members whose constituencies are affected may be able to put their points of view freely—and no doubt strongly—in the House.
But may I put this to the right hon. Gentleman in connection with the short notice which we have had? Is he aware—no doubt he must be—that others have had a copy of this Report for two days and more? Is he aware that not only the unions, but the Press and the two broadcasting authorities have had the Report for two days. Indeed, there has already been this morning a debate on the B.B.C. on the Report.
Does not the right hon. Gentleman realise that this order of priority in giving out information which is essentially of importance to Parliament, this order of priority which puts Parliament at the bottom of the list, is undermining the sovereign authority of Parlia-
1322
ment and ought not to be condoned, but should be condemned by the House?
I should like to congratulate Dr. Beeching on producing a very able Report. It is lucid, comprehensive and well-argued, and he has carried out admirably the task entrusted to him by the Government. That task was to see how best the railways could be reshaped to fit modern conditions and, above ail and particularly, what steps should be taken to make them remunerative. In doing so, Dr. Beeching has devoted a very large part of his Report to proposals for making the railways more efficient. Further—
Mr. Speaker: Order. I should be grateful if the right hon. Gentleman would remember that I am allowed to permit only a few questions on this statement.
Mr. Strauss: I apologise, Mr. Speaker.
Mr. C. Pannell: On a point of order. Will you inform the House, Mr. Speaker, how the Opposition are to deal with a long statement unless the principal Opposition spokesman is allowed reasonable latitude to answer it?
Mr. Speaker: If the House wants to change its procedure about these statements, that would be a matter not for me. I have no power to do it myself. Subject to a little latitude being allowed to the Leader of the Opposition of the day, and nobody else, to make some introductory remarks, all I can allow is a few questions.
Mr. Strauss: There are only a few further points I want to put, Mr. Speaker, but it is difficult, when we have a big Report like this and a long statement on which is essential, to put briefly our doubts and queries to the Government in a very short form.
Is the Minister aware that the recommendations for making the railways more efficient and increasing traffics have our whole-hearted support? On the other hand, is he aware that the proposals to curtail the railway services on the drastic scale suggested confirm our very worst fears? In particular, is he aware that we are surprised and distressed at the scant attention which Dr. Beeching devotes to the consequences—the congestion on the roads, the making of new roads and the general social consequences

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of the closures, which he dismisses as being practically non-existent?
As the Minister will be responsible for authorising these closures, is he aware that every proposal for closure which will come before him—and they all will—will be scrutinised and opposed by hon. Members, at least on this side of the House, unless they are accompanied by full assurances that adequate and satisfactory alternative services will be provided and that where that does not happen necessary subsidies should be paid to maintain the existing services?
Finally, may I ask the right hon. Gentleman how the Minister reconciles the frequent references and recommendations in Dr. Beeching's Report to the desirability of co-ordinating our transport services after he himself, last Session, introduced a Bill to disintegrate those services as much as possible?
Mr. Marples: I shall try to deal with some of those points. This is not a Report to Parliament, nor a Report by a Government Department. It is the Report of the Railways Board and it is published in the way which is usual with these things. There is nothing wrong with this. Normally, it is quite usual for statements to be made at the Dispatch Box at 3.30 and for the Minister to say that the Report will be available afterwards, but I went out of my way to see that it would be available at noon so that hon. Members should have an opportunity to see it before I made my statement.
I am grateful to the right hon. Member for his tribute to Dr. Beeching. I warmly support what he said. I think that this Report is the most competent analysis of a difficult industrial problem I have ever read.
All proposed passenger closures will come to me, but not freight closures. The passenger closures, if opposed, will go to the transport users' consultative committees, which will report on the adequacy of alternative services. I shall certainly take into account the adequacy of alternative services. That includes not only buses, but the state of the roads on which they run.
As to the deep concern felt on this matter, before the Government make a policy statement we would like to have
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the views of both Houses. I believe that there is to be a debate in another place on 1st May and my right hon. Friend the Leader of the House has told me that he will make arrangements through the usual channels for a debate in this House. We cannot make a fuller statement until the Railways Board has had consultation with the unions and its customers and until the Government have had a number of consultations with interested parties. Therefore, none of these proposals will be brought before the transport users' consultative committees until this House has had a chance of saying what it thinks.
Mr. G. Wilson: While congratulating my right hon. Friend and Dr. Beeching on boldly accepting the principle that the railways should concentrate on doing those things they can do best, may I ask my right hon. Friend to tell us a little more about how he proposes to get the other services to do what is best for them to do—the road services, and so on? Is he to make any use of the National Transport Advisory Council which he set up recently, and which is an extremely powerful body?
Mr. Marples: The question of co-ordinating other forms of transport with the newly reshaped railway system will he brought before the Transport Advisory Council. As long ago as 6th November I announced that we were setting up machinery to strengthen and modify roads where necessary in the event of this Report being published. The same applies to buses because, through the Transport Holding Company, we control 85 per cent. of the buses outside London and the municipal corporations. Therefore, we are able to see that there are good alternative bus services.
On the question of co-ordinating alternative services, the machinery is already there.
Mr. Holt: Is not the Minister aware that whether the Beeching Report is technically efficient or modern is quite irrelevant so long as the Government do not announce overall transport policy, particularly to deal with the problem of regional development and the stopping of the drift to the South-East? When will the Government enlighten us on what their transport policy is?
Mr. Marples: In the debate which my right hon. Friend the Leader of the House will arrange through the usual channels.
Mr. Bourne-Arton: Is my right hon. Friend aware that Darlington, the birthplace of railways, will welcome this bold and sensible plan—[HON. MEMBERS: "Oh."] Yes, hold and sensible plan—for giving the country a transport system appropriate to the needs of the age in which we live?
Mr. Marples: I am very grateful to one representing such a distinguished place for saying such nice words.
Mr. F. Noel-Baker: The Minister will be aware that this Report will have increased the anxieties of many thousands of workers in railway workshops. Will he take an early opportunity of saying what the implications of the Report are likely to be on railway workshops, and whether the Government will now permit those workshops to take work from outside to compensate for the loss of work which they will sustain as a result of this Report?
Mr. Marples: This Report does not deal directly with railway workshops. They are mentioned, but not dealt with by the Report. The plan for railway workshops was announced by Dr. Beeching some time ago. There is no power by Statute to allow the workshops to do work for outside bodies.
Sir J. Maitland: Does my right hon. Friend realise the fury of resentment which places like Lincolnshire and other scattered areas will feel that in many cases they are dealt with as second-class areas? Will my right hon. Friend tell me how soon they can appeal against these proposals and how long they have in which to do so?
Mr. Marples: If the Railways Board proposes a passenger closure it publishes the proposal twice, and six weeks after the second publication the transport users' consultative committee can consider the proposal and anyone can object and give evidence.
Mr. H. Wilson: Is the Minister aware that some of the sycophantic pronouncements which have been made to him this afternoon do not express the mood of the whole House or of the country
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about this Report? Is he aware that while hon. Members on both sides of the House will be very concerned about individual closures—the procedure for closures, safeguards, and so on—what is clear is that the responsibility for forcing Dr. Beeching to do this job is uniquely and unequivocally the responsibility of Her Majesty's Government and that the whole of the responsibility for the very grave state of affairs shown in the Report goes back to what the Tory Government have been doing ever since 1953, when they started the disintegration of the transport system?
Mr. Marples: I want to be quite clear about this. The responsibility is mine and the Government's, and I have never tried to shirk that responsibility. I hope that the right hon. Gentleman did not insinuate that that was so, because it is not. Dr. Beeching was not forced to do it. He has a job to do, but the responsibility ultimately is the Government's, and the Government accept it. There will be anxiety, of course, in some areas, but procedures and safeguards have been laid down by Parliament and they are pretty adequate.
Mr. Wolrige-Gordon: Who will decide questions of freight closures and, for the purposes of distant communities, what is meant by the phrase "alternative facilities"?
Mr. Marples: It is purely a matter for the railways. They will be consulting their customers in the next month to see what arrangements can be made if they are going to be in difficulties as a result of their proposals.
Mr. Manuel: Is the right hon. Gentleman aware that these assessments and recommendations from Dr. Beeching have been arrived at in a period of economic stagnation in the country? If the economy had been buoyant and up-thrusting possibly the changes envisaged in the Report would not be so wide-ranging.
Would the right hon. Gentleman not further agree that these closures of main lines, many branch lines and stations will inevitably turn many people on to the roads? We have already 350,000 casualties a year and about 132 deaths a week. Will not this inevitably increase the toll

1327
on the roads, because he will be forcing on to the roads more traffic than there is on them at present?
Mr. Marples: I have already said that we should look at the question of the roads and see what traffic is forced upon them, but, frankly, it is in the rural areas that we have most of the difficulties, where the railways will be closed. In these areas there is not the congestion that there is in the urban areas. In the urban areas we are trying to take people off the roads by building such lines as the Victoria-Walthamstow underground line, which will cost over £60 million, and in Glasgow providing the electrified Blue Trains. The main point is that people who want to use the railways will spend the money. If they do not, there is no point in having the railways.
Several Hon. Members rose—
Mr. Speaker: Order. We cannot discuss this any longer without a Question before the House.

GIPSY CAMPS (COMPENSATION)
3.54 p.m.
Mr. John Wells: I beg to move,
That leave be given to bring in a Bill to provide compensation for owners of property near to gipsy camps provided or controlled by local authorities.
In those areas where gypsies and similar travellers are numerous there is at last a move by local authorities to provide proper camping places for them. In Kent, this problem is particularly acute and the West Ashford Rural District Council has done some excellent pioneer work in providing a camp. Other local authorities are being urged to follow its example. My right hon. Friend the Home Secretary took an active lead in this matter when he was Minister of Housing and Local Government. Circular 6/62, dated 9th February, 1962, from the Ministry of Housing and Local Government, deals extensively with this problem and mentions the good work done by the West Ashford Rural District Council.
Local authorities have power to provide suitable camping sites under Section 24 of the Caravan Sites and Control of Development Act, 1960. Naturally, a gypsy camp, even a small one, is not popular with farmers and other country people who live nearby. Consequently, if we are to have these sites, which many hon. Members on both sides of the House desire and which are now urgently required, the local authorities will have to use compulsory purchase powers if they are to obtain suitable land on which to set up the sites. When a local authority, in the ordinary course of compulsory purchase order, buys land, the neighbouring owners of property have remedies open to them if the new use of the land is objectionable. Naturally, they do not receive any compensation directly, but they can sue the local authority or take other steps against the authority under common law.
A gypsy camp is in a somewhat different category, for the reason that the camp itself is not necessarily objectionable. It is the people who live in it who cause the nuisance. It is impossible for a neighbouring farmer or other property owner to sue a local authority for a nuisance which the local authority has

1329
not committed, and it is impossible for him to sue a number of gypsies who are men of straw.
The neighbouring farmers, therefore, have no redress against these people at present. I do not seek to base my argument on unfounded accusations from people who cannot produce firm evidence. I base my argument on the experience of my own constituents and of other people who have written to me from all parts of southern England, including as far afield as Thornyhill, in Hampshire, I also base my arguments upon the point of view of those local authorities who are anxious to establish these sites.
The sort of nuisance which is being created and which I have in mind can be summarised under five heads: breaking of hedges and fences to gain access to adjoining land for purposes such as grazing horses; the breaking down of fences for firewood; the lopping of conveniently placed trees for firewood and also for selling as log wood; intrusion on to adjoining land with damage to crops; and the frightening of sheep and other livestock by dogs, and, above all, damage to farm buildings.
My Bill would enable local authorities to pay compensation in strictly limited cases where certain neighbouring property owners are situated absolutely adjacent to local authority gypsy camps. I would limit this to camps which are either established or controlled by local authorities. I do not seek to open any floodgates of compensation. The Bill would be confined strictly to these well-defined cases.
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I believe that this would enable local authorities to proceed even more willingly and rapidly towards the establishment of these important camps. Unless gypsies are given the chance of settling down in this way, there is little prospect of their children receiving education, which we all desire that they should have; and there is little prospect of their partial integration into modern society unless there is a move to abate this nuisance.
I hope that the Bill will make it easier for local authorities, in their turn, to help gypsies and other travellers and that it will help the farming community to obtain fair treatment. I should like to pay tribute to the work of many hon. Members, and particularly of the hon. Member for Erith and Crayford (Mr. Dodds), in trying to tackle this difficult human problem with courage. I hope that the House will give me leave to introduce the Bill to further work which is supported by hon. Members on both sides of the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Wells, Sir G. Nicholson, Mr. Bullard, Mr. Longden, Mr. Hocking, Mr. More, and Mr. Kirk.

GIPSY CAMPS (COMPENSATION)
Bill to provide compensation for owners of property near to gipsy camps provided or controlled by local authorities, presented accordingly and read the First time; to be read a Second time upon Friday, 3rd May and to be printed. [Bill 87.]
ORDERS OF THE DAY
  PROTECTION OF DEPOSITORS BILL
  As amended (in the Standing Committee), considered.

New Clause.—(CIVIL LIABILITY FOR MIS-STATEMENTS IN ADVERTISEMENTS.)
Section 43 (civil liability for mis-statements in prospectus) of the Companies Act 1948, shall not apply to any advertisement which is to qualify for exemption under subsection (3) of section 2 as it applies to a prospectus.—[Mr. Mitchison.]
Brought up, and read the First time.
4.0 p.m.
Mr. G. R. Mitchison: I beg to move, That the Clause be read a Second time.
The object of the Bill is said to be to protect depositors. For that purpose there is a general prohibition on advertising for money on deposit, and there are exceptions to that general prohibition. That is the form of the Bill. The most important of the exceptions, perhaps, is that, in certain circumstances, advertisements approved by the Board of Trade, advertisements which comply with the regulations of the Board of Trade, will be exempt from the general prohibition. Other exemptions relate to classes of advertisement and classes of people. I think that there is no doubt that that particular form of exemption is the most important one in practice. The general prohibition is contained in Clause 2 (1), and in subsection (3) we find the exemption to which I have referred.
The advertisements in these circumstances are important not only as regards their form, but also their accuracy. The Bill contains provisions against fraudulent inducements or semi-fraudulent inducements, if I may so put it, contained in advertisements. Those appear in Clause 1 of the Bill, and there is a consequential adaptation later in the Bill as regards a similar prohibition under the Prevention of Fraud (Investments) Act, 1958. Those are criminal provisions relating to cases where there is fraud or something as near fraud as may be. The new Clause refers to something different, to civil liability for mis-statements in advertisements.
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For a long time, certainly since the Companies Act, 1948, the position has been this. When a prospectus is issued to invite subscriptions to shares, those who issue it—that phrase covers a good many people—are taken, if I may so put it, to warrant the truth of what is in the prospectus unless and until they can show that it was issued without their knowledge and consent. That, broadly, is the general effect of Section 43 of the Companies Act, 1948.
Like so many other provisions in the Companies Act, this has been found necessary over the course of years. One Companies Act after another has been used to tighten the precautions taken not only against fraud but, as in this case, against carelessness and against innocent misrepresentation. I think that we may take it by now that, wherever something occurs in the Companies Act, it has been found by long experience that it, or that sort of thing, is necessary for the protection of those who subscribe for shares.
The Bill is designed to give similar protection to those who do not subscribe for shares, but who are invited to put up money, and who do put it up, on loan to companies for the purpose of, on their side, getting interest and, on the other side, it being used by the companies for the purposes of their business. We were told on Second Reading that, in practice, the businesses are almost entirely in either hire purchase or dealings in land.
I suggest to the House, with some conviction—the more I have heard about the Bill the more certain have I felt that we are right about this sort of suggestion—that what is required in the case of invitations to take up shares is, in modern conditions, required also in the case of invitations to deposit money with a company. These invitations are of tolerably recent origin, at least on the present scale. No doubt, there have been some forms of invitation to lend money going on since time immemorial, but what we have now are companies which make a business of borrowing money on deposit from the public and using it for the two purposes I have mentioned which, though not new, have certainly developed enormously in recent years.
It was because of the development of the business of hire purchase and of land dealings and the consequent development

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of these companies and the giving of deposits that the Bill was introduced. The immediate occasion—I imagine that this is not disputed—was some notorious frauds some three or four years ago now—I forget exactly when—and, of course, there had in earlier times been similar fraudulent invitations in connection with company shares. What has been done in the one case falls now to be done, I suggest, in the other.
One must not assume that the Section of the Companies Act and the new Clause which we seek to introduce in this context contain very sweeping provisions. They do not. They recognise the difficulty of bringing home misstatements in the prospectus of a company or, in this case, an advertisement for deposits to the people responsible for them. The main effect of Section 43 of the Companies Act and of the new Clause is to shift the burden of proof, that is to say, to make the director or other person responsible prove that a misstatement in the prospectus or advertisement is, if I may put it broadly, not his fault. It is not a matter of bringing it home to him; once the misstatement is found to exist, he has to show that it is not his fault. I think that it will be seen that that is really the effect of Section 43.
This provision applies to a fairly wide circle of people. We are dealing here entirely with companies. The advertisements will be issued by companies. There are other provisions which may affect individuals, partnerships, and so on. At the moment, we are concerned simply with companies. Accordingly, if the new Clause were to be applied and there were a misstatement in an advertisement, every director of the company at the time of the issue of it would be liable unless, as I shall indicate in a moment, he could absolve himself, and so would people who had authorised themselves to be named as directors in the advertisement, the promoters of the company and persons who had authorised the issue of the advertisement. I am simply referring to the broad group of people who become liable in respect of a company prospectus.
Then later comes the possibility of a defence—in other words, the other side of the picture—and no person is to be liable if he proves, among other things,
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that he had reasonable ground to believe, and did up to the time of the allotment of the shares believe, that the statement was true. Therefore, although it affects the onus of proof, it does not really put much additional liability, if any, on the group of persons affected.
This Section was put in the Companies Act because of the difficulties that shareholders, or prospective shareholders, found in bringing these misstatements home to directors. The person who is putting up money on deposit to one of these companies is certainly in no better position than the person who puts up money on a subscription for shares. In at least two respects he is considerably worse off. He is likely, on the whole, or, at any rate, in some cases, to be a person who is putting up a quite small sum of money in a definite form and, perhaps, for a short period.
One does not get "stags" on deposits. One does not get gentlemen who put up enormous sums of money to secure control of a company. None of these questions arises. These are cases, on the whole, of people putting up often comparatively small sums for quite a short time simply for the purpose of earning interest on it. Therefore, from that point of view, they are less likely to know what is the position in the company, and in many cases they will receive very scant information about the position of the company.
Attempts were made in Committee—and I need not trouble the House with the details of them—to get the Government to stipulate for the inclusion of a number of things in these advertisements. Those attempts were, by and large, turned down. All that was said was that much would be covered by the regulations. But, when we were told what would be in the regulations, it appeared to me, and I think to other hon. Members, that the amount of information to be provided would be extraordinarily small. The line which the Government have taken is that, although they recognise the importance of the advertisements, they believe that the most important feature in the Bill is the mass of information which is to be furnished to the Board of Trade. The furnishing of information to the Board of Trade does not protect a depositor. It may help the Board of Trade, but it does not help the depositor, and he will have very little on which to rely.

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The possibility was distinctly foreshadowed that some of these advertisements might consist of a line or two. If that is so, it is even more necessary that this scanty information should at least be accurate. Is there any reason why it should not be accurate? Do the Government object to inaccurate information when so little of it will be forthcoming for the benefit of the depositor? I take it that the Government's answer is that they certainly object to inaccurate information. Therefore, what is the objection to putting the civil liability for it on the same shoulders as it would be put in the case of a share issue by virtue of Section 43 of the Companies Act?
What conceivable objection can there be to that? The onus of proof will be even more difficult to discharge in a case of this sort than it would be under the Companies Act. All that we ask is that the liability should, prima facie, rest where it should rest—on those who are responsible for the circulation of an inaccurate statement.
I suggest that that which experience has shown to be necessary in the Companies Act relating to a prospectus is obviously even more necessary in this case and that only a Government who foolishly seek to protect those who borrow money at all costs and not the depositors who lend it could possibly refuse to accept an Amendment of this kind. I therefore propose it with confidence.
4.15 p.m.
The Minister of State, Board of Trade (Mr. Alan Green): I said in Committee that I would consider very seriously the idea that we should apply Section 43 of the Companies Act, 1948, to the Bill. I have considered the matter very carefully, as I promised the hon. and learned Member for Kettering (Mr. Mitchison) and the Committee I would.
I agree with the hon. and learned Member on certain points. Deposit taking—and I do not suppose my description of it will be any more final, complete and accurate than the one he gave me—although it is not new in itself, can, I think, be called a new development in the financing of certain types of companies. It is done on a regular basis, and in that respect I agree with the hon. and learned Gentleman. I also agree that it is essentially a new develop-
1336
ment, and it does not necessarily follow that what is applicable in terms of civil liability to companies under the Companies Act in respect of shares or other certificates of ownership which are issued is applicable to this new development in deposit taking.
If we were to accept the Amendment, we might be in some difficulty. It is by no means certain that it would be of great assistance to a depositor. A deposit does not alter in value, and the nature of the lass or damage can only be either that it is not repaid when repayment becomes due or that interest is not paid on the deposit. This is the loss or damage which the depositor can suffer. The loss, therefore, will arise only when there is a failure to pay.
This is unlikely to happen unless and until the company has reached a state of insolvency. It will by then probably be difficult, and I should think very difficult, to show that the loss, if there is a loss, sustained by the depositor resulted from the untrue statement made in an advertisement some considerable time before and not from some other intervening circumstance. It would be difficult to establish this if we sought to apply Section 43 as it is worded to the Bill.
A shareholder is in a different position, since it is possible to ascertain the value of his shares when the prospectus was issued on the basis that the statement was true and again on the basis that the statement was untrue—the difference being the loss which he had suffered. It is therefore possible to establish a loss and rather more possible to provide a remedy.
Section 13 of the Prevention of Fraud (Investments) Act, 1958, on which Clause 1 is based, provides no specific civil remedy for a person who suffers damage as a result of an untrue statement in a circular inviting him to acquire securities, although the common law remedy of an action for fraud would be available to such a person as it would be to a depositor in similar circumstances. It is true that the Jenkins Committee recommended that there should be a remedy against those responsible unless they can prove that they had reasonable cause to believe, and did in fact believe, that the statement complained of was true. It further recommended that this course of action should apply to reckless

1337
promises and forecasts and, in so recommending, goes, I believe, beyond Section 43 as it is worded.
It is difficult satisfactorily to apply Section 43 without modification to either advertisements for deposits or circulars inviting the acquisition of securities, although the Amendment attempts to do just this. These safeguards for those who put out advertisements and circulars are essential, as I am sure the hon. and learned Member agrees. Those in Section 43 are designed for the special circumstances in which a prospectus is issued, and here we have no prospectus.
In view of the difficulty of showing that the failure to repay a deposit is due to an untrue statement in an advertisement, and even more the difficulty of showing that it is due to an untrue promise or forecast, I recommend to the House that we should wait until the Jenkins Recommendation is considered and then, if it is adopted, decide whether, with some further modification, this should be applicable to the Bill. I believe that if we seek to apply Section 43 to the Bill we shall make extremely difficult law. We shall be making law which will not add to the protection of the depositor.
I therefore ask the House to reject the new Clause, understanding, as I do, the reasons why it has been moved and not being wholly unsympathetic towards the purposes behind the new Clause but believing, as I do, that it will not make good law in those circumstances. If we could wait for Jenkins we might then perhaps have a modified version of Section 43 which would be much more applicable to the new development of financing companies by deposit taking.
Mr. Eric Fletcher: I very much hope that we shall not wait for the Jenkins Report. I hope that the House wilt accept the new Clause, which has been moved so persuasively by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).
It seems to me that the Minister is entirely off the point. He gave three reasons for refusing the new Clause. First, he said that the position of the depositor was not necessarily the same as that of a shareholder and that, therefore, Section 43 of the Companies Act was not applicable. Then—which seems to be a contradictory argument—he said that even if we passed the new Clause it would not give the depositor much protection,
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an argument which I will dispute in a moment. Thirdly, he said that there were some technical objections to the new Clause. May we consider each of these three objections to what seems to me to be not only a desirable, but an essential new Clause?
Unlike some of my hon. Friends who are present, I did not have the advantage of serving on Standing Committee A which considered the Bill in detail, but I need hardly say that I am entirely in favour of the objectives and principles of the Bill and am anxious to strengthen it in every possible respect. The new Clause is an attempt to strengthen it in the interests of depositors who may be misled by untrue statements in an advertisement. As my hon. and learned Friend pointed out, the framework of the Bill is that Clause 1 deals with
"Fraudulent inducement to invest on deposit"
and Clause 2 says that
"no person shall, after the commencement of this Act, issue any advertisement inviting the public to deposit money with him."
Apart from an exception, if anybody contravenes the basic provision of Clause 2 (1), he becomes liable in respect of a criminal offence for which he can be punished in accordance with Clause 2 (5). But there is an exception. Clause 2 (3) removes from the ambit of Clause 2 any advertisement which complies with regulations of the Board of Trade. If, as I understand it, an advertisement complies with regulations of the Board of Trade, such advertisement, however untrue, does not carry with it any liability to a criminal offence.
We are in the difficulty that we do not know what regulations will be made by the Board of Trade. They may be stringent or they may be less than stringent. But whatever regulations are made hereafter under Clause 2 (3), there will nevertheless remain the likelihood that some untrue statements will be made in an advertisement which complies with the regulations of the Board of Trade.
We are concerned with the persons who make such an untrue statement, whether unknowingly or deliberately, whether carelessly or inadvertently. We are concerned with the position of someone who makes an untrue statement in an advertisement asking for deposits, notwithstanding that the advertisement complies with the regulations of the Board of Trade.

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In such circumstances there will be no criminal offence and the only remedy which such a depositor will have is a civil remedy. The objective of the new Clause is to ensure that in those circumstances the depositor so injured will have the same civil remedies as are given to a shareholder who applies for shares and finds, having done so, that he did it in reliance on certain misstatements in a prospectus.
My hon. and learned Friend did not quote the whole of Section 43 of the Companies Act, 1948, which is a very long section. As he indicated, that Section has been evolved over a series of Companies Acts from the time of Derry and Peek and has been strengthened from time to time, as events have proved necessary, in order to give this civil protection to innocent shareholders, or in this case innocent depositors, who suffer by reason of untruthful and inaccurate statements or misstatements in a public document.
I should have thought that it was a matter of elementary justice, regardless of what the Jenkins Committee may or may not hereafter report, that if anybody is induced to part with his money, either as a shareholder or as a depositor, because of some misstatement of fact in a public document, he should have the remedy of getting his money back or perhaps of getting damages, but at any rate should have a civil remedy; because, ex hypothesi, on the basis on which we are discussing the matter, he has parted with his money and has been induced to do so because of a misstatement of fact.
As the House knows, the circumstances in which civil liability at present is imposed upon directors, promoters and others for such misstatements have been very carefully evolved and circumscribed. There are plenty of safeguards in Section 43, for example, for the director who makes an untrue statement relying upon the statement of an expert. In such circumstances he is not civilly liable if he proves that
"he had reasonable ground to believe and did up to the time of the issue of the prospectus believe, that the person making the statement was competent to make it …"
Directors and promoters often have to rely on expert advice.
In such circumstances, if they act honestly and reasonably and if they can discharge the onus of proving that they
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have done so, they are exonerated from the civil liability which would attach to them if the subscriber showed that he had been misled by some deliberate misstatement or some misstatement of fact recklessly made. That is the basis on which Section 43 operates, and it has proved to have been of very great benefit to a number of shareholders and intending shareholders.
4.30 p.m.
Surely the same principles must apply to a depositor? It does not seem to me that it is a good argument for the Minister to say, "After all, the risk to a depositor may not be as great as that to a shareholder. He may stand less risk of losing his money." The fact remains that he stands some risk of losing his money. He is damnified by a misstatement, made either deliberately or recklessly, and he should therefore have a civil remedy.
I do not accept the Minister's second argument that this remedy is not much use to a depositor. That is a very weak argument, because Section 43 of the Companies Act has had a deterrent effect as well as a real effect in respect of people who have offended against it. The mere existence of the Section has been a real deterrent against people who otherwise might have been tempted to make fraudulent, wilful or careless misstatements of fact.
The mere existence of the Section has been a protection. It has no doubt operated to deter a number of people from making such misstatements who otherwise might have been induced to do so. Therefore, it is no use the Minister saying that this is not much real use. In so far as it will deter statements of this kind being made in future, and prevent them being made, that will save depositors from being induced to part with their money because of misstatements of fact. Therefore, it will have great value.
Thirdly, the Minister seemed to rely upon some purely technical objection, namely, that there are some words in Section 43 which are more applicable to a subscriber to a prospectus than to a depositor. I do not think that this argument holds water. The very skilfully drafted new Clause moved by my hon. and learned Friend says this:
"Section 43 … shall apply to any advertisement … as it applies to a prospectus"
That obviously means mutatis mutandis. If there are any words in Section 43

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which specifically apply to a prospectus, as they do, if the new Clause were written into the Bill they would apply mutatis mutandis to depositors.
For these reasons, I hope that the House will reject the Minister's totally inadequate and unsatisfactory reply and accept the new Clause.
Mr. Harold Lever: I heartily endorse the arguments which have just been advanced by my hon. Friend the Member for Islington, East (Mr. Fletcher), and, in particular, his exposure of the Minister's argument that the new Clause would be of little value. My hon. Friend pointed out that Section 43 of the Companies Act has had as its main value a deterrent effect, in that it has made people have a care about issuing false statements or reckless statements. I heartily endorse that argument.
I am strongly in favour of the Clause in some suitable form being written into the Bill. I am not prepared to accept one point in my hon. Friend's argument, when he said that the Clause as now drafted is perfect. I share the modesty of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), because in Committee he was for ever reminding us of the extreme skill in professional incomprehensibility of the Parliamentary draftsman. It is obvious that to give effect to the desires of my hon. and learned Friend we shall need that gentleman if we are to get our purposes effectively enforced.
I did not hear the argument that my hon. and learned Friend made for his brain child. I only heard the argument against it by the Minister. Since the argument against the Clause made me wholly in favour of the Clause, I shudder to think with what enthusiasm and at what length I might have supported it if I had heard my hon. and learned Friend's argument in favour of it.
The Minister's arguments can be taken apart one by one and proved to have no weight whatever. The Minister said, "There are common law remedies. Let the man who is defrauded use the common law remedies". While I, as a lawyer, am touched by the Minister's affection and devotion for our lady of the common law, I must say that we in the legal profession have not ignored the necessity for statutory improvements upon it. The same sort
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of argument might have been addressed to the House on the Companies Act. There is no more reason why we should not have told the unfortunate defrauded shareholder, defrauded by reason of a misstatement in a prospectus, to go to the common law for his remedy and not to the Statute.
The fact that we have in the Companies Act this rule about the prospectus must, in the light of the Minister's reply, be attributed to the fact that there was nothing on the stocks at the time in another field. The Minister said, "Do not bother about it now. It is a splendid thing which you have in mind to do to give this additional protection. I cannot advance a single argument in logic against it, but there was a Jenkins Committee on company law reform."
However, this incompetent Government have not shown the slightest sign of implementing this vital piece of company legislation. They have found time to provide us with betting shops and casinos. They have found time to give a unique distinction to the City of London over all capital cities in the world, that it is amply populated with gambling houses and betting shops, but they do not have time to remedy the Companies Act.
We may say that we may attribute our good fortune in having this Section in the Companies Act to the fact that at the time it was enacted the Minister, for some reason or other, was not able to say, "There is something coming along on the stocks. Do not bother about it for the moment. In a few years' time we might get round to legislating on this point in a rather more skilful way".
As a Member of the House I object to this approach to legislation. Legislation should be considered on its merits. Even if we had a more confident view, first, about the Government's longevity and prospects of having their mandate renewed at the next election than we have, and, secondly, about the usefulness of their intentions, we would still say that in 1963 we are on the Report stage of the Bill and we see no reason why, if the Minister thinks it is a good thing to have this protection, we should not have it because at some future hypothetical time in some future hypothetical words we might get the same remedy applied in a wider variety of cases.

1343
That simply will not do as an argument. In a way, it is offensive to the House and to the way in which we legislate. It is as if the Minister comes patronisingly to the Dispatch Box and says to my hon. and learned Friend, "Well intentioned, but inept. It is a splendid thing you do, but you do not really appreciate the subtleties of timing and the detailed embellishments which are required". If the Minister were candid and gave us a hint as to the general state of mind of the Government on the Bill, it might be enlightening. Is the Minister really saying, "Be glad that we have given you this rushed hotchpotch of a Bill. We have not had time to go into it in any great detail. Do not add a few more botched-up, hastily concocted words to a Bill which is already besmirched by the signs of haste and lack of thought"?
I should be rather inclined to agree with him if he candidly asked the House not to add any words to the Bill, on the ground that it is disgraceful enough that so much has been done in such an ill-considered fashion that there is not time to draft adequately. If that were so, he might be entitled to great sympathy, but he cannot argue that we should not provide the remedy because we might get the remedy later.
There is little to commend the argument that there is some subtle metaphysical difference between a loss suffered as a result of a fraudulent prospectus and a loss suffered on deposit. I see the Minister fidgeting. If he wants to intervene, I shall be glad to give way to him.
Mr. Green: Merely on a point of accuracy: I did not say that there was a subtle metaphysical difference, to which the hon. Gentleman referred. I merely said that one was more easily measurable and traceable than the other.
Mr. Lever: How the Minister can allege that to be so, except on metaphysical grounds, I do not know.
The hon. Gentleman has said, in effect, that if one buys a share one can see what financial damage has been done to one's pocket merely by looking at the Financial Times the next day. Once can look at the price at which the share stands and deduct that from the amount paid and see just what the loss is. The Minister would not be quite accurate on legal
1344
grounds, although why cannot he say the same thing about the depositor? Such a person can look at exactly the same price difference and see what is the loss. In such a case the amount of default on interest is his loss.
If such a depositor cannot see that that loss is due to a mis-statement—in the prospectus regarding a share or in the advertisement regarding a deposit—he will not succeed. But why, for this reason, should the Minister deprive such a person of the chance to prove his case? The fact that the Minister's argument is based on the possibility that the person in question might not be able to prove his case is beyond me.
I would like to repeat a little story I told first in Committee, and I restate it now to a somewhat wider audience. It is the story of the Irishman who, when falling from a building, got hold of a rope, but who, for no apparent reason, let go of it and fell on his head. When a friend asked him, later, why he let go of the rope he said, "Sure, I was afraid it might break."
The Minister is virtually in the same position. He wants to let go of the rope offered by my hon. and learned Friend to the depositor because, it appears, he fears that it will break. I urge the House to reject the arguments adduced against the proposed new Clause and I hope that my hon. and learned Friend will insist that it be incorporated in the Bill or, otherwise, that he will urge my hon. Friends—and, I hope, some hon. Members opposite—to join us in pressing the Government on this matter.
4.45 p.m.
Mr. John Diamond: I thank the Minister for the consideration that he has given to this matter, as he promised to do in Committee, and I regret that I have no other pleasurable remarks to address to him across this ancient Table. I agree with everything that has been said by my hon. Friends and there is really little I can say, except to underline their remarks. They are worthy of underlining, because I wish to make it clear just what is the attitude we take on the proposed new Clause.
The first thing that the Minister said was that it did not necessarily follow that if one had a Section deemed to be necessary in the Companies Act it

1345
should be deemed to be necessary in regard to depositors. I am compelled, therefore, to explain to the Government exactly why—although it seems to the Minister that it does not necessarily follow—when one pursues the argument to its logical conclusion, one sees that if it is necessary to protect a shareholder and a debenture holder it is even more necessary to protect a depositor. I would have thought that we have been over this so many times that by now the Minister would have been convinced of the necessity for the Clause. Since it seems that he is not, I will have to go over the ground once again.
We know that a shareholder is offered the help—which my hon. Friends have wisely described as a deterrent help as well as a positive one—in the form of a Section in the Companies Act which puts a personal responsibility on to individuals who make inaccurate statements. Such a person is offered that help to protect him from losing his money when he applies for shares or debentures. If he applies for debentures he is fully secured, in the normal case, and, therefore, he is in a far better position than a depositor, who makes a loan without security.
If he applies for shares he has two benefits which you above all, Mr. Speaker, would appreciate. He is offered the benefits of a voice and a vote. It is not necessary for me to explain how advantageous it is to a person to have a vote or, especially when he is sure of catching the eye of the chairman at the annual general meeting, of having a voice. He can make his opinions and views known. A depositor, on the other hand, can do none of these things and, for these reasons, he must have more protection than either the shareholder or the debenture holder.
It is for this reason that, while I agree that it does not necessarily follow, I am bound to put it to the Minister most strongly that what follows on pursuing the argument to its conclusion is that the applicant for a deposit must have greater and not less protection than the debenture holder or shareholder. That is the first reason why we cannot accept the Minister's argument that it does not necessarily follow.
1346
The Minister went on to say something about which, with the greatest deference, I submit he was completely mistaken. He said that another reason why one could not offer the same protection was that a deposit did not alter in value. He went on to say, later, that one could not establish a loss in such circumstances. To say that it does not alter in value—unless the Minister was on the very narrow point in that it does not alter in its market value because there is not necessarily a market quotation—is a complete misconception of the position. It does alter in value and that value can be rneasured and established. If the Minister doubts me he can ask his hon. Friends behind him, just as my hon. Friends are able to seek further advice.
To ascertain the value of a share other than its market value one must merely break down the balance sheet into its constituent parts to get the answer. To ascertain the value of a deposit one can break down the balance sheet and find the answer in exactly the same way. One knows the various priorities involved in doing this and one need only refer to the company's articles to find the priorities. Once broken down, the answer is forthcoming. It is a misunderstanding of the situation to say that one cannot determine the value of a deposit; and the same is true of the argument to the effect that its value does not alter. My hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) pointed this out in a slightly different way.
The next argument of the Minister—that it did not help to have the proposed new Clause—was incorrect. It helps in a most material way. It very largely prevents inaccurate statements ever being made and it helps when the help is most needed; before the error occurs. We are not seeking to have help available only when the error has occurred. That is an important aid, but a much less satisfactory one than preventing such circumstances from arising by a director, who is seeking to borrow money by way of deposits, knowing that he has to be extra careful.
Indeed, which hon. Member does not appreciate that we would have to be extra careful if we had to pay for our mistakes out of our own pockets? How many mistakes would the Government be making if Ministers had to pay out of

1347
their own pockets every time an aircraft, for example, cost more than the original estimate?
I repeat that it is clear that if people had to pay out of their own pockets they would think twice or even thrice about what they are going to say to people considering putting up their money. It is essential, therefore, that a safeguard should exist and that a director or any other person making a statement should have to think many times to ensure that the statement being made will become accurate or that it will form the basis of an action for damage or recovery of money from him personally.
It should be remembered that we are dealing solely with companies. The Minister has, by the Bill—and quite properly—ruled out individuals; the individual cannot borrow in these circumstances, or come within the scope of the Clause. It is only a company that can borrow by issuing advertisements, and only a company with limited liability. It is because only a company with limited liability can do so that one must, to protect the depositor, have some machinery by which one can get back to individual unlimited liability—a person. That is why we are pressing this new Clause as firmly as we possibly can.
The Minister then said that he could not accept the Clause as drafted—bringing in a comparison with Section 43 of the Companies Act—without modification. There are two answers to that, The first is the very obvious one that, if he does not like our way of doing it, he can do it in his way. It is not the first time that he has been able to think about this. As he has said, he has given it very careful thought. If he had given it very careful thought and had decided that something of this nature should have been brought in, he could have produced something satisfactory to the Government. He has not done so, so we have brought it in in a way that we think is strongly arguable and thoroughly acceptable.
The second answer to that point is that he possibly misunderstands the scope of the Amendment. We are not putting on the director such a burden as may be thought. The maximum that we are seeking to do is to shift, as my
1348
hon. and learned Friend the Member for Kettering (Mr. Mitchison) made absolutely clear, the onus of proof—nothing more than that. The onus of proof would have been the other way round but for this new Clause. By the new Clause it would be shifted, and a director who wanted to say that the statement was accurate or that there was some other reason why he should not be personally liable would have the responsibility of proving it. Otherwise, the onus would be the other way round.
It is not a new law—I am sure the Minister accepts this—that we are suggesting by this new Clause, but merely a process in evidence that makes it easier for the man who has lost his money to get it back. No one can say that that is a burdensome thing to put on a director in a Bill that is alleged to be for the protection of depositors. I am no lawyer, as the House well understands, but I rely on what I think every lawyer would agree I am entitled to rely on—Palmer's Company Law, which refers to compensation under Section 43, and starts off by saying:
"As a result of the inadequacy of the law disclosed by Derry v. Peek statutory provisions have shifted The onus of proof."
It says many other things, too, but nothing to contradict that statement.
That being so, all we ask is that this onus of proof should be shifted so as to give depositors the protection that they most need; that is to say, circumstances in which they will never be called upon to put up their money and lose it through an inaccurate statement. The way to achieve that is to make the person who is thinking of making an inaccurate statement think again, and see that it is accurate before it is made. We solve all our problems in that way. We avoid actions and we even avoid, if certain of my hon. Friends will forgive my saying so, the necessity of getting legal advice and going to court. By means of a simple Clause on these lines, we stop it all at the very start.
In those circumstances, the logic of what I have said compels me, the most unaggressive person in the whole Chamber, to say that if the Minister, after this further appeal, is unable to meet our point of view, either by accepting the new Clause as it now stands or by saying that,

1349
if necessary in another place, he will bring in some modification of it that satisfies his requirements, we will be compelled to go to the extreme lengths with which the House is familiar.
Question put, That the Clause be read a Second time:—
The House divided: Ayes 183, Noes 220.

Division No. 80.]

AYES

[4.54 p.m.

Abse, Leo

Gordon Walker, Rt. Hon. P. C.

Owen, Will

Ainsley, William

Gourlay, Harry

Padley, W. E.

Albu, Austen

Greenwood, Anthony

Paget, R. T.

Allaun, Frank (Salford, E.)

Griffiths, David (Rother Valley)

Pannell, Charles (Leeds, W.)

Allen, Scholefield (Crewe)

Griffiths, w. (Exchange)

Pargiter, G. A.

Awbery, Stan (Bristol Central)

Grimond, Rt. Hon. J.

Parker, John

Bacon, Miss Alice

Gunter, Ray

Pavitt, Laurence

Barnett, Guy

Hamilton, William (West Fife)

Pearson, Arthur (Pontypridd)

Baxter, William (Stirlingshire, W.)

Hart, Mrs. Judith

Pentland, Norman

Beaney, Alan

Hayman, F. H.

Price, J. T. (Westhoughton)

Bellenger, Rt. Hon. F, J.

Henderson, Rt. Hn. Arthur (Rwly Regis)

Probert, Arthur

Bence, Cyril

Herbison, Miss Margaret

Pursey, Cmdr. Harry

Bennett, J. (Glasgow, Bridgeton)

Hill, J. (Midlothian)

Rankin, John

Benson, Sir George

Hilton, A. V.

Redhead, E. C.

Blackburn, F.

Holman, Percy

Reid, William

Blyton, William

Holt, Arthur

Reynolds, G. W.

Boardman, H.

Houghton, Douglas

Rhodes, H.

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

Howell, Denis (Small Heath)

Roberts, Albert (Normanton)

Bowen, Roderic, (Cardigan)

Hoy, James H.

Roberts, Goronwy (Caernarvon)

Bowles, Frank

Hughes, Cledwyn (Anglesey)

Ross, William

Bradley, Tom

Hughes, Emrys (S. Ayrshire)

Royle, Charles (Salford, West)

Bray, Dr. Jeremy

Hunter, A. E.

Shinwell, Rt. Hon. E.

Brockway, A. Fenner

Hynd, H. (Accrington)

Short, Edward

Broughton, Dr. A. D. D.

Hynd, John (Attercliffe)

Silverman, Sydney (Nelson)

Brown, Rt. Hon. George (Belper)

Irving, Sydney (Dartford)

Slater, Mrs. Harriet (Stoke, N.)

Butler, Herbert (Hackney, C.)

Jay, Rt. Hon. Douglas

Slater, Joseph (Sedgefield)

Callaghan, James

Jeger, George

Small, William

Carmichael, Nell

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

Smith, Ellis (Stoke, S.)

Chapman, Donald

Jones, Dan (Burnley)

Snow, Julian

Cliffe, Michael

Jones, J. Idwal (Wrexham)

Sorensen, R. W.

Collick, Percy

Kelley, Richard

Soskice, Rt. Hon. Sir Frank

Corbet, Mrs. Freda

Key, Rt. Hon. C. W.

Spriggs, Leslie

Craddock, George (Bradford, S.)

Lee, Frederick (Newton)

Stewart, Michael (Fulham)

Lee, Miss Jennie (Cannock)

Stones, William

Crosland, Anthony

Lever, Harold (Cheetham)

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

Crossman, R. H. S.

Lewis, Arthur (West Ham, N.)

Swain, Thomas

Cullen, Mrs. Alice

Lipton, Marcus

Swingler, Stephen

Dalyell, Tam

Loughlin, Charles

Symonds, J. B.

Darling, George

Lubbock, Eric

Taylor, Bernard (Mansfield)

Davies, G. Elfed (Rhonnda, E.)

Mabon, Dr. J. Dickson

Thomas, George (Cardiff, W.)

Davies, Harold (Leek)

McCann, John

Thompson, Dr. Alan (Dunfermiine)

Davies, Ifor (Gower)

MacColl, James

Thornton, Ernest

Davies, S. O. (Merthyr)

Mclnnes, James

Thorpe, Jeremy

Dempsey, James

McKay, John (Wallsend)

Wade, Donald

Diamond, John

Mackie, John (Enfield, East)

Wainwright, Edwin

Dodds, Norman

McLeavy, Frank

Warbey, William

Donnelly, Desmond

MacPherson, Malcolm (Stirling)

Watkins, Tudor

Duffy, A. E. P.

Mallalieu, E. L. (Brigg)

Weitzman, David

Ede, Rt. Hon. C.

Mallalieu, J. P. w. (Huddersfleld, E.)

Wells, Percy (Faversham)

Edwards, Rt. Hon. Ness (Caerphilly)

Manuel, Archie

White, Mrs. Eirene

Edwards, Robert (Bilston)

Mapp, Charles

Whitlock, William

Evans, Albert

Marsh, Richard

Wigg, George

Finch, Harold

Mason, Roy

Wilkins, W. A.

Fitch, Alan

Mayhew, Christopher

Willey, Frederick

Fletcher, Eric

Mendelson, J. J.

Williams, D. J. (Neath)

Foot, Dingle (Ipswich)

Millan, Bruce

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

Forman, J. C.

Mitchison, G. R.

Wilson, Rt. Hon. Harold (Huyton)

Fraser, Thomas (Hamilton)

Moody, A. S.

Woodburn, Rt. Hon. A.

Galpern, Sir Myer

Moyle, Arthur

Woof, Robert

George, Lady MeganLloyd (Crmrthn)

Noel-Baker, Francis (Swindon)

Yates, Victor (Ladywood)

Ginsburg, David

Oliver, G. H.

Gooch, E. G.

Oram, A. E.

TELLERS FOR THE AYES:

Mr. Rogers and Mr. Lawson.

NOES

Agnew, Sir Peter

Batsford, Brian

Black, Sir Cyril

Altken, W. T.

Baxter, Sir Beverley (Southgate)

Bossom, Hon. Clive

Allason, James

Bell, Ronald

Bourne-Arton, A.

Arbuthnot, John

Bennett, F. M. (Torquay)

Box, Donald

Ashton, Sir Hubert

Bidgood, John C.

Bromley-Davenport, Lt. -Col. Sir Walter

Atkins, Humphrey

Biffen, John

Brooman-White, B.

Awdry, Daniel (Chippenham)

Biggs-Davison, John

Brown, Alan (Tottenham)

Balniel, Lord

Bingham, R. M.

Bryan, Paul

Barber, Anthony

Birch, Rt. Hon. Nigel

Buck, Antony

Barlow, Sir John

Bishop, F. P.

Bullard, Denys

Burden, F. A.

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

Pickthorn, Sir Kenneth

Campbell, Gordon (Moray & Nairn)

Hirst, Geoffrey

Pilkington, Sir Richard

Carr, Compton (Barons Court)

Holland, Philip

Pitman, Sir James

Cary, Sir Robert

Hollingworth, John

Pott, Percivall

Channon, H. P. G.

Hopkins, Alan

Price, David (Eastleigh)

Chataway, Christopher

Hughes-Young, Michael

Prior, J. M. L.

Chichester-Clark, R.

Hulbert, Sir Norman

Profumo, Rt. Hon. John

Clark, Henry (Antrim, N.)

Hurd, Sir Anthony

Proudfoot, Wilfred

Clark, William (Nottingham, S.)

Hutchison, Michael Clark

Quennell, Miss J. M.

Clarke, Brig. Terence (Portsmth, W.)

Irvine, Bryant Godman (Rye)

Ramsden, James

Cleaver, Leonard

Jennings, J. C.

Redmayne, Rt, Hon. Martin

Cole, Norman

Johnson, Dr. Donald (Carlisle)

Ridley, Hon. Nicholas

Cooke, Robert

Johnson, Eric (Blackley)

Ridsdale, Julian

Cordeaux, Lt.-Col. J. K.

Johnson Smith, Geoffrey

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

Cordle, John

Jones, Arthur (Northants, S.)

Roots, William

Costain, A. P.

Kaberry, Sir Donald

Ropner, Col. Sir Leonard

Coulson, Michael

Kerans, Cdr. J. S.

Russell, Ronald

Craddock, Sir Beresford (Spelthorne)

Kerr, Sir Hamilton

St. Clair, M.

Crawley, Aidan

Kershaw, Anthony

Scott-Hopkins, James

Critchley, Julian

Kimball, Marcus

Sharples, Richard

Cunningham, Knox

Kitson, Timothy

Shaw, M.

Dalkeith, Earl of

Lambton, Viscount

Skeet, T. H. H.

d'Avigdor-Goldsmid, Sir Henry

Langford-Holt, Sir John

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

Leavey, J. A.

Smithers, Peter

de Ferranti, Basil

Leburn, Gilmour

Smyth, Rt. Hon. Brig, Sir John

Donaldson, Cmdr. C. E. M.

Legge-Bourke, Sir Harry

Spearman, Sir Alexander

Doughty, Charles

Lewis, Kenneth (Rutland)

Speir, Rupert

du Cann, Edward

Lilley, F. J. P.

Stevens, Geoffrey

Duncan, Sir James

Lindsay, Sir Martin

Steward, Harold (Stockport, S.)

Duthie, Sir William

Linstead, Sir Hugh

Stodart, J. A.

Eden, John

Litchfield, Capt. John

Storey, Sir Samuel

Elliot, Capt. Walter (Carshalton)

Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

Studholme, Sir Henry

Emmet, Hon. Mrs. Evelyn

Longbottom, Charles

Summers, Sir Spencer

Errington, Sir Eric

Lucas-Tooth, Sir Hugh

Talbot, John E.

Erroll, Rt. Hon. F. J.

McAdden, Sir Stephen

Taylor, Edwin (Bolton, E.)

Farey-Jones, F. W.

MacArthur, Ian

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

Farr, John

Maclay, Rt, Hon. John

Thatcher, Mrs. Margaret

Finlay, Graeme

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

Thompson, Sir Kenneth (Walton)

Forrest, George

McMaster, Stanley R.

Thornton-Kemsley, sir Colin

Fraser, Ian (Plymouth, Sutton)

Macpherson, Rt. Hn. Niall (Dumfries)

Tiley, Arthur (Bradford, W.)

Galbraith, Hon. T. G. D.

Maginnis, John E.

Touche, Rt. Hon. Sir Gordon

Gardner, Edward

Maitland, Sir John

Turner, Colin

Gilmour, Ian (Norfolk, Central)

Marshall, Douglas

Turton, Rt. Hon. R. H.

Gilmour, Sir John (East Fife)

Marten, Neil

Tweedsmuir, Lady

Glyn, Dr. Alan (Clapham)

Matthews, Gordon (Meriden)

van Straubenzee, W. R.

Glyn, Sir Richard (Dorset, N.)

Mawby, Ray

Walder, David

Goodhart, Philip

Maxwell-Hyslop, R. J.

Walker, Peter

Gower, Raymond

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

Walker-Smith, Rt. Hon. Sir Derek

Green, Alan

Mills, Stratton

Wall, Patrick

Gresham Cooke, R.

Miscampbell, Norman

Ward, Dame Irene

Grosvenor, Lt.-Col. R. G.

Montgomery, Fergus

Webster, David

Gurden, Harold

More, Jasper (Ludlow)

Wells, John (Maidstone)

Hall, John (Wycombe)

Morgan, William

Whitelaw, William

Harris, Frederic (Croydon, N. W.)

Morrison, John

Williams, Dudley (Exeter)

Harrison, Brian (Maldon)

Nicholls, Sir Harmar

Williams, Paul (Sunderland, S.)

Harrison, Col. Sir Harwood (Eye)

Nicholson, Sir Godfrey

Wills, Sir Gerald (Bridgwater)

Harvie Anderson, Miss

Nugent, Rt. Hon. Sir Richard

Wilson, Geoffrey (Truro)

Hastings, Stephen

Oakshott, Sir Hendrie

Wolrige-Gordon, Patrick

Hay, John

Osborne, Sir Cyril (Louth)

Wood, Rt. Hon. Richard

Heald, Rt. Hon. Sir Lionel

Page, Graham (Crosby)

Woodnutt, Mark

Henderson, John (Cathcart)

Page, John (Harrow, West)

Worsley, Marcus

Hendry, Forbes

Pannell, Norman (Kirkdale)

Hiley, Joseph

Partridge, E.

TELLERS FOR THE NOES:

Hill, Dr. Rt. Hon. Charles (Luton)

Pearson, Frank (Clitheroe)

Mr. Michael Hamilton and

Hill, Mrs. Eveline (Wythenshawe)

Peyton, John

Mr. McLaren.

Clause 2.—(GENERAL RESTRICTION OF ADVERTISEMENTS FOR DEPOSITS.)
Mr. Mitchison: Since the Government appear to have no immediate intention of resigning, I beg to move, in page 2, line 16, to leave out from "company" to "or" in line 17 and to insert:
"appearing in a list of such companies published from time to time by the Board of Trade".
We have now come to Clause 2 of the Bill which, in subsection (1), contains this general prohibition of advertisements and
1352
then proceeds to make various exceptions. The first exception is in subsection (2) and it includes the case that we are now considering—
"any advertisement with respect to deposits of any description to be made with any banking or discount company within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948".
It is those words:
"within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948"
which we seek to leave out.

1353
This is one of those cases where one thinks that one really will get a definition on looking at paragraph 23, and then finds that one gets nothing of the sort. All that this would mean is that the companies which are entitled to hide certain matters, or shall we say not to disclose them in their accounts, are banking and discount companies for this purpose. There is no secret about the existence of this statutory provision. The Jenkins Committee, in the course of its deliberations, stated the number of the companies concerned and indicated the classes into which they fall.
They are, broadly speaking, joint stock banks, foreign banks trading here, discount houses, and so on. I need not go into the detail, but there is such a list, and the list is kept up and from time to time altered one way or another. I should not think that it varied very much. But it is a list for an entirely different purpose from that for which this Clause in intended.
Subsection (1) is intended to exempt certain banking or discount companies. Whenever anybody asks, as was asked in connection with the Jenkins Committee, for a definition of "banking and discount companies" they never get it. In substance "banking" is capable of a good many different meanings. Therefore, it is necessary to have lists of this kind when dealing with some special provision relating to banking or discount companies, and one would expect the lists to vary in different cases. If, however, the Clause stands as it is, the list will be the list for the purposes of the accounts provisions of the Companies Act. It cannot be any other list.
I am now going to show that the Minister gave a clear undertaking in Committee to publish that list. I do not think that is either right or necessary. He was at once met by objections from both sides of the Committee to the publication of that list, and I must say that I see the point of the objections. I never asked him to do so. All I asked him to do was to publish a list of the companies which are to be exempted under this subsection, and that is what I am still asking him to do. That is what I hoped he would do as a result of what was said in Committee.
I must now refer the House to what was said about this, because this is a case of carrying out a ministerial under-
1354
taking, and ministerial undertakings in connection with a Bill are not carried out by saying in the House afterwards, "I am going to publish it all right, but when, how, in what form and for what purpose I publish it must rest, in the first instance, with me and, in the next instance, with my successor in office whom I expect shortly after the next General Election." That is not good enough. We want something in the Bill. It is perfectly clear what is intended: there cannot be any doubt about it.
Let us take the statements of the Minister of State—I do not suppose he will dispute them—and make quite clear exactly what he said. He started by making a curious statement:
"If the hon. and learned Gentleman will withdraw the Amendment"—
that was an Amendment about this list—
"I should like to consider the debate a little further. I was prepared instantly to give an undertaking to publish. I can see very good reasons indeed why we should. I would crave the Committee's indulgence to consider the debate a little further and return to this matter, as I promise to do, at a later stage of the Bill, if this indulgence can be conceded to me."
I note the words,
"return to this matter, as I promise to do, at a later stage of the Bill …".
That means, as I see it, putting down an Amendment or something of the sort, which would enable consideration to be given to it. I had been talking to the Committee on this matter, and I ended up in this way:
"If the Minister can see his way to saying that he will accept in principle the question of publication, while reserving the question of whether there should or should not be a difference between the lists"—
that is the list under this Bill and the list under the Companies Act—
"and reserving any other question which he likes to reserve, I will certainly agree to withdraw the Amendment if he goes as far as that. That would leave the wording of the Clause entirely to the Minister. If its main object were publication, I should be slow to quibble about the wording. I repeat what I shall probably say half a dozen times more before I finish: that I am under no illusion that I can draft as well as the Parliamentary draftsman. I know quite well that I cannot."
That will be the seventh time that I said that. The Minister replied:
"I am grateful to the hon. and learned Member. While I accept that inexperience on my part caused me to put my reply in an unfortunate way, I am grateful to the hon.

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and learned Member for taking up the real point that I wanted to put. I certainly undertake in principle to publish".
I then said:
"I thank the hon. Gentleman and beg to ask leave to withdraw the Amendment"—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 80, 84 and 85.]
But it did not turn out that way, because three hon. Members felt that this was a matter for further comment. Indeed—this I think is really rather significant—there was some pressure on the Minister not to publish; pressure from one of his own hon. Friends who rose immediately and said, "I am sad about this", and so on. I think that although his hon. Friend was referring to the list under the Companies Act, and that was not necessarily the list in question, it showed that there was a little bank-bench discontent. We all know how sensitive the present Tory Government are to bank-bench discontent; it is the only thing that makes them do anything. In this instance, unfortunately, it had the opposite effect and prevented them from doing anything. Anyone who looks at the record of the proceedings and what the Minister said in the first place,
"consider the debate a little further and return to this matter, as I promise to do, at a later stage of the Bill"
and what I said afterwards, on withdrawing the Amendment, would certainly suppose that the hon. Gentleman was going to put down an Amendment.
When the Bill came out without any such Amendment, I said to myself, "What's all this? How are we to be provided the opportunity that we have been promised to consider this matter at a later stage? Does it mean that the hon. Gentleman, having failed to provide the opportunity himself as he promised to do, expects me to find it for him?" I cannot appreciate that. I made it perfectly clear to him that I expected him to put down an Amendment. I repeat the words again. I said that if he would accept in principle, while reserving this question and any other question he liked to reserve, I would certainly agree to withdraw the Amendment. The next sentence was:
"That would leave the wording of the Clause entirely to the Minister.
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I left it to him, and he knew perfectly well what I was saying. When we then find that there is no Amendment in the name of the Minister on the Order Paper and we ourselves have to put one down language is apt to become a little stronger than, perhaps, it ought to be on such a highly technical matter.
The hon. Gentleman, as I understand it, not only promised in principle to publish, but he gave me to understand that he knew that I understood that he was going to put down an Amendment to indicate the form in which he was prepared to publish.
Mr. Green indicated dissent.
Mr. Mitchison: I see the hon. Gentleman shaking his head, but I have read the words used in Committee, and if he is saying that they mean something else, he is saying that they mean something contrary to their natural and ordinary meaning. If the Ministers in charge of a Bill are going to let the Opposition withdraw Amendments, knowing perfectly well what the Opposition think they promised—and, in fact, I say, did promise—and then come here and shake their heads when reminded what they did promise, they are not treating the Committee, or the Opposition, or the House properly in this matter.
5.15 p.m.
I say, therefore, that in this case, whatever the merits of the matter, I am entitled to say to the hon. Gentleman, "Here is the Amendment you promised. If it is not in the language or form you want it, that is entirely your own fault". I am entitled to say that to him and I do say it. In these circumstances, if he is now going to refuse the Amendment and say that he is going to do something else, or publish something else, or may do something at some other time because he is too frightened to put it into the Bill, having been terrorised by his back benchers by what happened in the 1922 Committee or wherever it is that they discuss these things, then all I can say is "Have a heart and a little bit of courage and carry out the promise which I understand to have been made in Committee".
Mr. H. Lever: I am perturbed at the state we have reached on this matter. It seems to me that the Minister has in mind to implement by assurance the undertaking that he gave to the Committee that he will publish a list of these

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companies exempt from Clause 2 by reason of the fact that they are on the list kept by the Board of Trade under the Eighth Schedule of the Companies Act.
There was serious objection to that list being published by many people, including hon. Friends of the Minister who are most experienced in this sort of matter.
Mr. Green: One.
Mr. Lever: The Minister says "one". There was one hon. Friend of his, and experienced in these matters, in Committee, apart from the hon. Member, who will, I hope, forgive me saying so, had a connection with a company which was itself on the list, without doubt kept by the Board of Trade, and who has not the least objection to having it advertised that his company figures on that distinguished list. Therefore, I do not think that the Minister should ignore the points that have been made.
First, my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and hon. Members on this side of the House have reasonably asked for something quite different from what the Minister has offered to give. They have asked that if a company is exempt from the provisions of Clause 2, it should go on a list, it should be an inspectable list, and the public should know which companies by reason of their status by being on this list are exempt from the obligation to seek deposits. My hon. and learned Friend did not ask for, and there are serious objections to the Minister giving, the list of companies which would be exempt if the Clause remained in an unamended form.
I have made more than one reference to the hurried, ill-considered nature of the drafting of the Bill. Instead of saying, as he should have done, that it is a reasonable principle that when restricting advertisements, certain companies could fairly be exempted from those restrictions because of their solidity and soundness and that a list of those companies will be kept and published, the Minister has for convenience seized upon a list which is already at the Board of Trade for a totally different purpose and in which totally different considerations apply. It is a list, broadly speaking, to give exemption to those companies from
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certain requirements of the Companies Act which enabled them to have secret and inner reserves. Why the Minister, except for idleness, haste and lack of proper consideration in a matter of this kind, should use that list for this purpose, I know not.
My hon. and learned Friend has asked that the Board of Trade should look at companies which want exemption and which are reasonably entitled to it because they are banks of unquestionable status and that if they want it and are granted it, they should go on the list. My hon. and learned Friend rightly says that, if there is such a list of companies which are so exempt, the public are entitled to know about it.
What the Minister has said in haste is that since he has drawn the Bill hastily, he will give a hasty undertaking to disclose the details of a list which is compiled for a totally different purpose, without realising that there may be weighty considerations against giving the names on that list. I believe that there are weighty considerations. The Minister should think again.
I do not know how the hon. Gentleman will extricate himself from his difficulty. He has given a pledge, unfortunately, to my hon. and learned Friend that he will publish the list of exempt companies. I do not see how he can get out of that. As the Bill is drafted, he can fulfil that pledge only if he makes public a list which every one of his predecessors saw good reason to keep private, namely, the list kept under the Eighth Schedule to the Companies Act.
An off-the-cuff undertaking of that kind without proper consideration looks like landing us in publication of a list for which nobody on this side has asked and of which nobody, except one hon. Member who is connected with a firm which is on the list, approves and of which weighty opinion on the Minister's side of the House seriously disapproves.
The Minister has no right to do this. By one means or another, he must fulfil his undertaking to my hon. and learned Friend in the reasonable way in which his demand has always been couched, namely, that we want a list of companies which are exempt from certain restrictive provisions of the Bill. What we do not ask for, and what certainly should not be given, is a list, which is kept for a

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totally different purpose, of banking companies which are entitled to create secret reserves and not comply with certain other provisions of the Companies Act.
If the Minister now publishes a list of such banking companies, whether he likes it or not there is not the faintest doubt that he will be creating two classes of banking companies: those who are grade I and who are approved at the Board of Trade, and those which, for one reason or another, will be thought by the public to be grade 2 because they are not on the list. That would be to give a false and misleading impression, utterly unfair to those, in many cases, perfectly reputable banking houses which are left off the list. It will give this impression by reason of a hasty reaction of the Minister which will be very damaging, to people carrying on their business lawfully and reputably.
Let me give an illustration of the kind of thing that is liable to happen. The list was started a long time ago. Long before the Companies Act, 1948, there was a similiar list at the Board of Trade and a similar exemption, not only for banks, but for shipping companies, which did not want to have to comply with all the details of disclosing reserves out of their profits as demanded by the Companies Act. For reasons which were of some importance in those days, but which have very little importance today, the Government of the day rightly thought that they should be given the right to create secret reserves.
Today, opinion is very much divided as to whether anybody should be entitled to create these secret reserves. Most people who create them like to do so, first, because of the natural secretiveness of human nature, especially that slice of it which is frequently engaged in large-scale financial transactions, and secondly, because of fear of their shareholders, which was not the original reason for this relief being granted to companies. The relief was given for totally different reasons and it is maintained by most companies either out of natural secretiveness or from a desire that their shareholders should not know too much about the profits of the company or that somebody who may want to make a take-over bid should not know too much about it.
If people who set up or bring into England a banking company hear that
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there is such a list which entitles it to conceal its secret reserves, quite a lot of reasonable, honourable, reputable and solid concerns would say, "Why should we conceal our secret reserves? Why should we want this privilege? Why waste our time going to the Board of Trade and arguing that we should be put on this celebrated list?" Anybody who has been trading in the City of London since the year dot is automatically on the list, so what might be called the City Establishment figures largely on the list. But many, if not most, of the new arrivals are not specially secretive by disposition or noticeably afraid of their shareholders. Therefore, they see no reason why they should waste time getting themselves on to this precious list. If, however, it is published, they will have every reason to regret the commonsense attitude which they have adopted.
If the list is published, the Minister will be for the first time creating two classes of banking houses: those who appear to enjoy the trust and approval of the Board of Trade, and those who are not in that enviable and distinguished category. It is very much resented, I understand, and reasonably so, by some of the merchant banking houses which are not on the list, many of which, for the reasons which I have given, did not want to bother to be on the list.
What appals me about the whole matter is the ill-considered way in which it appears so far to have been dealt with. Why does the Minister do this injury by a side-wind gratuitously to perfectly reputable firms? He points at my hon. and learned Friend. My hon. and learned Friend does not want this famous Eighth Schedule list to be published. He wants a somewhat different standard to be set. He wants such banking houses as are on the list to be exempted. He wants the Board of Trade to say which of the companies should be exempted and, having said so, to keep a list of them in case they forget it and also for the convenience of the public, who can find out who is or who is not on the list. What my hon. and learned Friend has never asked for, and does not ask for now, is publication of the list kept under the Eighth Schedule to the Companies Act.

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I do not want to do what my hon. and learned Friend, with his much greater ability, hesitated to do, but as the Minister has not done the necessary drafting himself, I must suggest clumsily what is required. If he is to implement his undertaking and to give what is asked by, and promised to, my hon. and learned Friend without doing this clumsy, unwanted and eccentric novel disclosure of the list which is kept for a different purpose, and which has been kept confidential for so long, what the Minister must do is somehow, by manuscript Amendment or otherwise, to amend the Clause to state that the banking company is a banking company on the list kept by the Minister for this purpose, in the words roughly of my hon. and learned Friend's Amendment, which the Minister must accept. If it is not exactly in the right form, he had better do some quick thinking to get it right.
If, on his own account and off the cuff, although never pressed by anybody in Committee to do it, the Minister discloses the list which is kept at the Board of Trade under the Eighth Schedule, he will be doing wrong to many firms in the City, many of whom I had never heard of before, who have written to me and said how deeply they resent any such publication. It would affect their credit, particularly with foreign banks and foreign concerns, who come to deposit money with merchant bankers in the City and have dealt with them for years. They have had no reason to doubt their honourable status and reliability. When, however, a list is published, they will find to their horror that the firm which they have been trusting with large sums of money for half a century now appears as a grade 2 firm, which does not want the public to know the full facts about it, and is not on the grade 1 list. It is a strange grade 1, but that, apparently, is the list of companies which do not want to publish the full facts about themselves. That is quite understandable, and I take no objection to it. I have not the least doubt that every company on the list is one of high honour and reputation. But they have no right to be advertised as being grade 1 outfits by the Minister. This has arisen from the Minister's failure to comprehend what it was that my hon. and learned Friend asked for.
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5.30 p.m.
I beg the Minister not to do this injustice, not to break the long-preserved confidential character of this list and not to create two classes of banking houses in the City, those who are approved of or disapproved of, or those who are grade 1 and those who appear to be of a secondary grade. The Minister will no doubt say that he particularly favours this idea of exempting certain banking companies from fulfilling the rigmarole under the Bill because it is a waste of time and does not reflect on any company which is not on the list. Of course, many companies will not have applied to go on the list, companies which have not solicited deposits from the public and therefore do not want to claim this exemption. If the Minister publishes this list he will be creating an invidious distinction between grade 1 firms and other firms.
In all these circumstances, I ask the Minister what he is going to do about his promise to my hon. and learned Friend. The Minister is a man of honour and he will keep his word, but he must do so in a way which makes sense. He must not give my hon. and learned Friend more than he has asked for or more than he asked for which will injure people affected in a way that I have explained. I am particularly perturbed at the slipshod way in which the thing has been done. If the people concerned had been the victims of an injury of this kind because the Government, the Treasury and the Board of Trade had thought the matter out and said, "We have had this list a long time. It has been created for a long time, and because we recognise the manifest injury which would result from its publication and because it is now 1963 and we are living in a different era we have thought the matter over and think that the list should be published in private", maybe there could be something to be said for it. It is no good the Minister nodding as though that is something that he had thought of. It is manifestly not so.
What will happen will be that those injured by the Minister's negligence will know it. No decision was arrived at by the Government and no thought was given to it. No one sat down, not even the present Government in their last stages of degeneration, and gave a thought to the matter and said it is high time to publish this list. It is not true; it

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did not happen that way. The people injured will know that they are the victims of the impetuosity of the Government, that when my hon. and learned Friend proposed one thing the Minister hastily promised another and that, instead of putting the matter right on Report, he has left it in a position where it is difficult to remedy it.
What the Government did not say was that they thought that the list of the companies exempted should be published now. They have never said that. The Government have used that definition wholesale and have said that companies on that list can, if they wish, solicit deposits without complying with the restrictions of the Act, and, as a side wind since they were pressed, they now say, "We will publish the secret list". No thought has been given to the merits of the matter by any Government Department or by any Minister.
All the thought that has been given to it is whether what my hon. and learned Friend demanded was justified, namely, whether the list of those seeking to borrow without complying with the provisions of the Clause shall be published. I venture to say that this list was always confidential and ought to continue to be confidential. If this breach of the confidential character of the list is contemplated, thus injuring many reputable houses for the first time after all these years, it ought to be done by a deliberate decision on the merits of the matter and not as a result of a haphazard side wind.
I register the most forceful protest either at the last being published at all or at it being published without proper consideration being given to the matter, and I urge the Minister, even at this late stage, to find some means of giving my hon. and learned Friend what he asks for, which is not the publication of the list.
Mr. F. M. Bennett: I have listened with great attention to what the hon. Member for Manchester, Cheetham (Mr. H. Lever) has been saying. I must confess that my recollection of the two major discussions which took place in Committee are wholly different from his, and I look forward to the Minister's reply in which, I hope, he will recall some of the facts of those deliberations in Committee.
It seems to me that the hon. Gentleman has been seeking in supporting his hon.
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and learned Friend's Amendment—he admitted this in his last few words—to go back to the contention which he put forward on both stages of the Committee deliberations that no list should be published at all. He let the cat out of the bag in the last few words of his speech, when he said that he wanted no list at all. I think that if he thinks the matter over he will appreciate that even if his hon. and learned Friend's Amendment is accepted it will not meet his own point of view, which is that no publication should take place at all.
Mr. H. Lever: I used no words whatever about the publication of this list, that is, the list of firms exempted from complying with these provisions. What I have always protested about is the publication of the Eighth Schedule list. I have never said anything more than that.
Mr. Bennett: I will leave it to HANSARD in the morning. The hon. Gentleman said that he was against the publication of any list at all. That is the matter to which I am referring.
Mr. Lever: I did not say that.
Mr. Bennett: We shall have to leave the matter to be resolved by HANSARD.
If the hon. Gentleman is now saying that he does not mind the list referred to by his hon. and learned Friend being published, but he does mind the Minister's list being published, I would point out to him that as the two lists will deal with precisely the same concerns we shall be back to where we started, and that, therefore, it does not carry his point of view any further.
Now as to the other aspect which has been raised for the third time by the bon. Gentleman. We had it twice in Committee, but it did not get any support from either side. It is the aspect that the publication of the list would divide people into sheep and goats. This is not really so, and if the hon. Gentleman wishes to protect the companies to which he has been referring he really will not be doing them any service by continuing to suggest that if they are not in the list they are second-rate companies. By giving publicity to what I believe to be a false analogy the hon. Gentleman is doing nothing to help those who, he says, have written to him.
It was made perfectly clear over and over again by the Minister on both

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occasions in Committee that this list did not imply sheep and goats but was simply a list of companies carrying on a particular business and which, for reasons accepted by the Jenkins Committee and others, were exempted from certain provisions of the Act.
Mr. Mitchison: Which Act?
Mr. Bennett: I did not use the word "Act".
Mr. Mitchison: The hon. Gentleman said companies which were "exempted from certain provisions of the Act". Since the Bill was brought in after the Jenkins Committee, my recollection was that the reference was to another list under the Companies Act.
Mr. Bennett: If I used the word "Act", I am sorry. I am talking about the Bill.
The suggestion was made that certain companies should be exempted for certain purposes, of which the hon. Gentleman is perfectly well aware, and this list is precisely the same list again. I repeat, to get the record straight on this matter, that I do not think he is right that because this list is published it should cast any slur at all on companies which are not on it. It is a matter of publishing a list of companies which, for particular reasons, are exempt from the provisions of the Bill. It does not cast any reflection on the reputability of companies not on the list.
We had this discussion twice in Committee and the Minister gave a perfectly firm undertaking that a list of these companies should be published. I know that there are certain difficulties about implementing his decision. Personally, I do not mind whether the hon. and learned Gentleman's Amendment is accepted or the Minister's, because I think that it should be common ground between us that there will be almost or even precisely the same number of companies and the same firms to be exempt. There cannot be any real substantial difference. Why it should be thought to be a slur to be on one sort of list and not on the other when they will be precisely the same companies, I, for one, fail to understand.
Mr. John Morris: I did not have the privilege to serve on Standing Committee A which dealt with this Bill
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and this matter, but, as I understand the position, the Minister seems to be hoist with his own petard by giving certain assurances to the Committee and not giving effect to those assurances by way of amending the Bill in the way in which my hon. Friends seek to do it at the moment.
I am concerned, first, that the Minister seems from laziness, as my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever) so ably said, to be adopting for the purposes of this Bill the list under the Companies Act, though that list is there for certain purposes. I submit that hardship may be caused by publication of that list, but further to that, hardship may be caused by publication of the list for a purpose for which it was not originally conceived. I hope the Minister has gone into this matter.
I should be quite out of order if I were to go into the merits of the Bill as a whole, but the Bill does a good deal to protect the public, and I think that, on the whole, it has been welcomed, although anything my hon. Friends seek to do to strengthen the Bill I certainly support. But fears have been expressed as to what might result from publication of the Board of Trade's secret list, if it were published in accordance with what the Minister has said.
I read with great interest the observations made in Committee by my hon. Friend the Member for Cheetham, and perhaps the House will permit me to read exactly what he said on this matter, because he said it so much better than I could ever do:
"We now come to the question of the Board of Trade list. There is a list kept, and as far as I know it is a secret list. I think it is desirable that it should remain secret for this reason, This list is kept at the Board of Trade of persons who are not obliged to make the full disclosure provided by the Companies Act of their accounts. Assuming that the practice is still to continue, whereby banks keep great reserves, then, if we publish that list, it will seriously affect the persons not on that list, perfectly reputable businesses." [OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 71.]
That is where the doubts, fears and anxieties arise about what may happen if this list is published. I understand that there are over 100 banks and discount houses in the home field and in the foreign field which enjoy the fact of being on this list at the moment. There

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is a possibility of injustice by the off-the-cuff decision of the Minister to publish this list—that injustice will occur by the mere fact of publication; and it will occur to those who are not on that list, and who, as my hon. Friend the Member for Cheetham said, may be perfectly reputable and honourable people who for many years have traded without being on the list or trying to be on it, and who, by the mere fact of publication of the list, may find themselves being regarded as persons of the second grade or second category.
5.45 p.m.
However laudable the purposes of publishing a list of this nature may be, it would be quite wrong, and, indeed, the Minister by his decision could be rendering an injustice in this way to those people who were not to find themselves on the list. They do great work; they provide money where it is needed in the several spheres of our economic life; and they operate very delicate financial machinery. It would be quite wrong to cast doubt on these firms, and, indeed, it could be very dangerous to upset the machinery which they operate.
As I understand it, the list of 100 or so firms on the Board of Trade secret list are, in the main, the larger institutions. My hon. Friend the Member for Cheetham inferred that they belong to the Establishment. They have been there a long time, while those companies not on the list are frequently the smaller ones which have come recently into this particular business. There is a fear which is felt particularly by those who are bankers and have the common law right to call themselves bankers. As I understand it, to call oneself a bona fide common law banker one has to have a certain proportion in current accounts as compared with deposit accounts. The fear of some bankers and discount houses is that if the list is published they may have no right to call themselves bankers or to enjoy this common law right which they have, and which they partly may lose because of intervention of this Bill, and that by a side wind doubt about their status will result.
If a list is published, either in the terms of the assurances which have been made and given by the Minister to the Committee at various stages, or accord-
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ing to the terms of the Amendment, and if it is thought desirable to publish that list in all the circumstances, then I ask that it should be made perfectly clear what that list is made up of, and that by no means should there be, by way of the drafting of the list, any suggestion or inference at all that perfectly reputable businesses performing very valuable services do not enjoy the right or title to call themselves bankers.
I appreciate the difficulty in which the Minister finds himself, and how he is going to get out of his difficulty I do not know, but I ask him that when he finds himself in the position of deciding that he intends to publish the list he should make it perfectly clear that those not on the list shall not suffer in any way by the mere fact of publication and that it shall in no way cast any aspersion on their right to call themselves bankers, having regard to the extremely valuable work which they do in this field. I hope the Minister will be very careful indeed about the manner in which he considers this matter of publication of the list.
Mr. J. T. Price: With the utmost respect, from what has been said by some of my hon. Friends and an hon. Gentleman opposite, I beg to differ, because I think that this debate has got off the rails a bit.
Mr. Cyril Bence: Are there any left?
Mr. Price: "Rails" today is, perhaps, a rather unfortunate figure of speech. However, I want to keep strictly in order and I do not want to be deflected from what I want to say in the few minutes that I shall be on my feet.
I hope that I may be allowed to remind the House that this is a Bill to protect depositors—the man in the street—against the activities of unscrupulous advertisers who filch money from the public by all kinds of ruses and fraudulent devices. I put it as strongly as I can, but, I hope, not unfairly, in view of the past history of some of these firms which advertise for money at high rates of interest.
Having sat through and, occasionally, even enjoyed what were sometimes the long, tortuous and technical debates on the Bill at an earlier stage, I should have

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thought that it was sufficiently clear why the Minister is in trouble tonight. Right from the start when we had our earlier debates on the Bill, we on this side put forward the conception that, if we were to do anything to protect the public against fraudulent advertisers who use the columns of the provincial newspapers to attract the money of people who have no more sense than to put it into these concerns, the best way to do it would be to make the requirement positive, not negative.
I intended to convey—what I said is on record, though I do not like to regurgitate my words, or burn midnight oil looking them up—to the Committee and the Minister that, in my opinion, and in that of some of my hon. Friends, the right way to do this if we wanted to tidy it up properly, with a real intention to protect the public, would be to have a licensing system for financial institutions which would have to pass a rigid test to show whether they were solvent enough to advertise inviting the public to deposit money with them.
My hon. Friend the Member for Aberavon (Mr. Morris) has just expressed some doubt about the use of the word "bank". I very seriously differ from him on this. The word "bank" has been used frivolously and dangerously by many people, but I like to think that it has a connotation of reliability, integrity and ability to meet liabilities. The use of the word in its very loose modern form has meant admitting to the world of high and lesser finance all kinds of people who are not really bankers at all. I would not give any support in this matter to those "bankers" who have no real title to that label. Perhaps we can talk about labels on some other occasion.
If the Minister and those who advise him had taken their courage in their hands and said. "We will have a thorough-going licensing system, and only those who pass a test shall be allowed to advertise for people's money", it would have been a different tale that the Minister had to answer today. But he did not do that. Why was that? It was because he thought that, once having set up such a system, it would be invidious to leave certain people out.
Now the Minister takes refuge in the secret list. Even if no one else in the House says it, I intend to say that I
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strongly object to secret lists of any kind. I hope that I am not being unnecessarily pernickety about this, but I object to secret lists which may be of high commercial value to those whose names are on them. If we are enacting legislation which imposes very heavy penalties on those who transgress its provisions, but are excluding from the Bill's sanctions those who are on the secret list, we are not doing justice to the generality of the British people. This may be a theoretical question on which I could talk for a long time. If I wanted to block the Bill I could make a long speech on it, and I would hope that I should talk sense most of the time.
However, the Minister has given an undertaking. I have always regarded him—I am sure he will not be embarrassed by what I say—as a man of the highest integrity. We have believed that his word could be relied upon even if we disagreed with his policy and outlook on all sorts of things. If he gave a promise, we always thought that he would carry it out. He has given an undertaking to have a list and to publish it. I am all in favour of publication—"Publish and be damned", as Fleet Street used to say. That was before the Vassall Tribunal. However, I do not want to get into trouble with the Chair. If we start talking about Dr. Beeching and Vassall together tonight, it will mean a long debate, and it would not be fair to the Minister.
I want to expedite the passage of the Bill, for what it is worth; it is a very poor Bill. The Clause has no teeth in it, and the Bill has none, either. If we are legislating as serious men, trying to put before the public that we are doing our job properly and saying that we will protect the public against frauds and swindlers advertising for their money, we should do it thoroughly and not in the half-hearted, mealy-mouthed fashion of the Bill.
It will be gathered that I am supporting what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said in his opening remarks. Listening to some of the other speeches, I wondered who was supporting and who was opposing the proposal. I am in favour of a list and having the brightest lights of publicity in the dark corners of high finance. If we get that, we can

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proceed in a happier frame of mind with the next Clause and assist the Minister to get the Bill. If not, we shall want a more definite assurance than we have had so far, and I hope that the Minister is now prepared to give it.
Mr. Bence: Like my hon. Friends the Members for Aberavon (Mr. Morris) and Westhoughton (Mr. J. T. Price), I was not a member of the Standing Committee, but when Bills come to the House after their proceedings in Standing Committee I consider it my duty to attend on Report to see what has been going on upstairs.
We have heard this afternoon from my hon. and learned Friend the Member for Kettering (Mr. Mitchison) what went on upstairs. A number of promises were made, not for the first time. From what I have heard of the debate on this Amendment, the Minister gave certain pledges. Apparently—I gather this from the way he shook his head on various occasions and from what was said by his hon. Friend the Member for Torquay (Mr. F. M. Bennett)—the promises have not been kept and he has no intention of keeping them. I do not know; I am just assuming—
Mr. F. M. Bennett: I certainly did not say that the Minister was not keeping his pledges. What I said was the contrary, that he has kept them as a result of his Amendment. I said that I hoped he would not be deterred from keeping his pledges by other speeches.
Mr. Gordon Walker: Which Amendment?
Mr. Bennett: They both do the same thing.
Mr. Green: Perhaps I might help. It does not require an Amendment to the Bill for me to keep the pledge which I gave, which I shall certainly honour.
Mr. Bence: That is why I rose. I wanted to question this and get right on Report the impressions I gained arising from the proceedings in Committee.
We have heard a great deal about the Board of Trade list. I represent a Scottish constituency, and in Scotland we have some of the most notable banking institutions in the world. It
1372
was a Scotsman who founded the Bank of England—Patterson—and it was another Scotsman—Richard Law—who went to France in the Napoleonic period and tried to establish a central bank in France—
Mr. Gordon Walker: It cost a great deal of money.
Mr. Bence:—but failed. This modern system of banking which came into being after the revolution of 1668 was a Scottish conception. I want to be assured that all Scottish commercial and banking institutions will be at the head of the Board of Trade list because the conception of central banking started with Patterson in Scotland.
May I have an assurance from the Parliamentary Secretary that our Scottish institutions will be well in the forefront of the list? It has been suggested that if one is not on the list one is a second-class institution. I hope that it will not go from this House tonight that the Government, who have been in power for eleven years, have a list at the Board of Trade and the connotation is that if Scottish commercial and financial institutions are not on it they must be looked upon as second-rate. That would be an insult to Scotland which I am sure Scottish hon. Members in particular and Scottish people generally would resist as vigorously as they possibly could.
I therefore trust that I can have from the Parliamentary Secretary an assurance that Scottish banks and commercial houses are in the forefront of the list.
6.0 p.m.
Mr. Green: I very much regret that the hon. and learned Member for Kettering (Mr. Mitchison) presented his Amendment in such a confused and confusing fashion that he confused many hon. Members on his side of the House. He very nearly confused me at one time. I say that in no spirit of harsh jeering, but it is the kindliest thing that I can say about the introduction of his Amendment. He has referred to the pledge about publication which I gave in Committee after considerable hesitation.
As hon. Members who sat on the Committee will remember, at the moment of hesitation I was complimented—for the first time, I believe, in

1373
public—by the hon. Member for Manchester, Cheetham (Mr. H. Lever), because, it seemed, I showed him that by my hesitation I was really trying to think about the arguments advanced. However, the hon. Member has assailed me vigorously this afternoon. But his accusation of hasty and ill-considered judgment, after his praise of me for thinking on my feet, is a charge that should not really stick.
The hon. and learned Member for Kettering asserted, I understand, that I bad given him an undertaking to publish a list different in kind from that contained in the Eighth Schedule of the Companies Act, 1948.
Mr. Mitchison indicated dissent.
Mr. Green: If the hon. and learned Member did not say that, then I fail to follow a great deal of his original reasoning in moving the Amendment. I remind him of his own words when we discussed this matter of publication in Committee. He said:
"To put the matter shortly, the whole object of the Amendment is not to interfere with the use of existing lists in the way proposed"—
the only list existing is in the Eighth Schedule of the Companies Act—
"but to ensure that the lists are published.… All I want is a Statutory Instrument containing the lists of the Companies which are treated as banks or discount houses for the purposes of the Companies Act, 1948…'—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 59.]
I think that this establishes beyond doubt that what we were talking about were the words in the Bill, the list under the Eighth Schedule of the Companies Act.
Mr. Mitchison: It is perfectly correct that the Amendment as put down in Committee referred to what I will call the Companies Act list. But there was a good deal of discussion in Committee and, like the hon. Member, I pay attention to what is said. I made it clear as we went on with the discussion that I did not mind which list it was. I have quoted this passage, and I am going to quote it again and refer to another thing in column 86. I said:
"It is for that sort of reason that I expressly left the door open to the Government on the question of whether the two lists should be identical. My hon. Friend"—
1374
that was my hon. Friend the Member for Manchester, Cheetham (Mr. H. Lever)—
"will, no doubt, recollect that the language of the Bill provides for identical lists, but it may well be that if the effective list has to be published it will be for up to, say, 100 bodies, identical, but for the remainder not identical. That was not my point. I am on the question of whether the list of exempted people should be published. Surely, it ought to be."—[OFFICIAL REPORT, Standing Committee A, 20th December, 1962; c. 86.]
I will not repeat all that I read out earlier. I want it to be clear that I left it to the Minister of State to decide whether it should be the Companies Act list or—as I personally favoured—a list of people exempted under this Clause. This Amendment is perfectly clear. It relates to the list of people exempted under this Clause. If the Bill is left as it is, the only thing the hon. Gentleman will be able to publish will be another list—the list under the Companies Act. I do not know whether he wants me to do it now., but at some time, if the House will allow me, I should like to deal with the suggestion—if he makes it—that he never undertook to put anything in the Bill. He did.
Mr. Green: The hon. and learned Member is, I think, agreeing with me that at the stage we were talking about he said that all he wanted was the Companies Act list. I think that it will be within the recollection of all hon. Members who were on the Committee that that was what we were talking about.
Mr. Mitchison: I am very sorry—
Mr. Green: I am taking this stage by stage, if the hon. and learned Member will permit me. I am trying to establish the first point.
Mr. Mitchison: I am sorry to interrupt the hon. Gentleman again, but this is more than a matter of recollection. It is perfectly clear what happened.
Mr. Deputy-Speaker (Sir William Anstruther-Gray): Order. The hon. and learned Member should remember that we are not in Committee but on the Report stage. I hope that further interventions by the hon. and learned Gentleman, who has already exhausted his right to speak, will be short.
Mr. Mitchison: I hope that this one will be, Mr. Deputy-Speaker. The point is that I left this matter entirely to the hon. Gentleman's discretion. I quoted the relevant passage once and I will not do so again.
Mr. Green: I accept that. At a later stage in our discussions, my hon. Friend the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) was amongst those who strongly objected to the publication of this list. I listened to his argument with great attention. My hon. Friend referred to this again later in more specific terms and to the Eighth Schedule list in the Companies Act. I replied:
"… I undertook to publish the list of these companies. I must keep that undertaking."—[OFFICIAL REPORT, Standing Committee A, 26th February, 1963; c. 552.]
It is exactly that undertaking that I propose to keep and I shall publish that list. It seems to me to be appropriate to publish it in the Companies Report annually. As I have told the hon. Member for Dunbartonshire, East (Mr. Bence), there is no need to have an Amendment for me to keep my pledge. I believe that that view will be accepted by all hon. Members who served on the Committee. I hope that the point is now well established.
Now I turn to the Amendment. My objection to having a second list—which is what I would be committed to by the Amendment—is that I should merely be adding an element of confusion to the financial world. I should certainly be subscribing to the thought that perhaps there were all sorts of grades of companies, and I do not wish to do that. The objection which the hon. Member for Cheetham had in principle to the publication of the Eighth Schedule list is in principle also applicable to his suggestion for another kind of list to be published picking out certain people who can apparently be trusted to behave themselves properly when it comes to financing companies by taking deposits.
I do not want another list. We should be treating the two lists quite differently under different forms of legislation. As my hon. Friend the Member for Torquay (Mr. F. M. Bennett) has rightly said, we should find that if the lists were not identical they would be nearly so. We should also be in the curious position of having certain companies treated in
1376
one way for one purpose under the Companies Act and treated in another way for another purpose under this Bill. That would not be a desirable situation.
Mr. H. Lever: As one purpose is to exempt the company from the need to publish its secret reserves, which may involve one kind of consideration, and the other is to exempt it from the need to comply with certain restrictions on advertising, which depends on its solvency and general status, different considerations apply, and hence different lists might well be kept.
Mr. Green: I know that argument. We had it in Committee, but I am not convinced by it. I should find myself in the very invidious position of adding to the list day by day, week by week or year by year, and the Board of Trade would be in the position of constantly having to make value judgments of different companies. This would put me in a position of giving some weight to the charge made by the hon. Member for Cheetham that I was proposing a list of first and second-class companies. As I sought to make perfectly plain in Committee—26th February, col. 558 of the OFFICIAL. REPORT—if I published the Eighth Schedule list, I would not make this invidious distinction between first and second-class companies. I said that I was glad of the discussion which we had had because I hoped that it would clear away the thought that there were companies of two different classes in the same character of business. If, as I am now asked, I produce a second list, I shall revive that thought and be unable in subsequent discussion to clear it away. For that reason, I hope that the House will reject the Amendment.
Mr. Morris: Will the hon. Member meet my point about the affairs of those companies not on the list and the innuendo which might arise from the fact that they would have no right to call themselves bankers in the common law understanding of the term?
Mr. Green: I do not think that I could stay within the rules of order and give a definition of "banker" for these purposes.
Mr. Diamond: This is a matter of some little difficulty and I am, therefore,

1377
bound to detain the House for a short time, with regret, so that full justice may be done to everybody's point of view.
The first thing I want to make absolutely clear—indeed, nobody has ever bad it in doubt—is that nobody, certainly not on this side of the House, has any doubts but that the Minister knew that he had given a pledge and would carry it out. There could have been some measure of doubt as to the way in which the Minister might interpret that pledge, having regard to the simple fact that it is clearly established in the record that we started off with a certain kind of consideration and, as the argument developed, moved to a slightly different consideration.
This is something for which no hon. Member has the slightest need to apologise. The purpose of giving consideration to a matter in Committee is that, as the arguments emerge and become clearer, we are enabled to move more precisely to the point at issue. It was nothing but useful that a discussion, which started, as, inevitably, it had to start, on the basis of a given Amendment in certain words, moved to the precise point in which the Committee was interested. Committee stages of Bills are deliberately designed to allow that to happen. I therefore start with the Companies Act list, the list which formed the basis of the Amendment as it was originally worded, but which was not the list upon which we were insisting at the end of the debate.
There are two views about this list. My hon. Friend the Member for Westhoughton (Mr. J. T. Price) has perhaps the clearest view of all. It is that the Companies Act list of bankers should be published. The hon. Member for Torquay (Mr. F. M. Bennett) has a strong view that it ought to be published. I am told that he is on it, but as it is a secret list, I have no means of knowing.
Other hon. Members have the strong view that it ought not to be published because it would, or might, do some damage to people whom one has no desire to damage and because it would do no particular good for the purposes of the Bill. As that is the list, may I do what I generally prefer to do and rely not only on my own unaided opinion about the list, but on the opinion of people who have given
1378
the matter a very great deal of consideration and who have listened to the evidence of others concerned with the list?
I refer, of course, to the Jenkins Committee. The Jenkins Committee produced a lengthy Report, but only in two respects are there minority dissents. The Report covers a vast number of recommendations, and only two are dissented to by a minority. There is a dissent about this matter, and it is therefore a matter upon which there could well be two opinions.
6.15 p.m.
The view of the majority of the Jenkins Committee is quite clear. It is contained in paragraph 407 and is:
"We recommend that—the existing exemption of banks and discount companies should continue"
The view of the minority, not a small minority but consisting of five distinguished members of the Committee, was:
"We dissent from the recommendation in paragraph 407 (a) that the existing exemption of banks and discount houses should continue. We agree with our colleagues that it is essential that confidence in the banking system should be maintained but we are not convinced that it is necessary for this purpose for banks to withhold information about their operations from their shareholders and from the public generally …"
In paragraph 13, on page 214 of the Report, the minority said:
"We can see nothing in the evidence to justify the continued concealment of the true level of profits."
In short, we have first-rate authority for the view that the list should be published and first-rate authority for the view that it should not be published.
Mr. H. Lever: What my hon. Friend has quoted from the Jenkins Report is surely a first-rate opinion that there should be a list and a first-rate opinion to the opposite view. There is no opinion by the Jenkins Committee that the list should be published. Nobody, either the majority or the minority, ventured to support the Minister's view that it should be published.
Mr. Diamond: I appreciate what my hon. Friend has said. It is a matter of continuing exemption. The main purpose of my quoting the extracts was to make it clear that this was obviously a difficult matter.

1379
The members of the Jenkins Committee were not the only people who had considerable difficulty. The Minister himself had considerable difficulty about reaching a conclusion as to whether the list should be published, and the record bears testimony to that fact and to the fact that, having difficulty about it, he wanted to give the matter further consideration. That is something that we always appreciate.
Having made the position about that list clear, I now turn to the Amendment, which is not concerned with that list. The Amendment is concerned with a different list. I want to make it absolutely clear that we on this side of the House see no connection between the two lists. It may well be that they are certain considerations, not the whole of the considerations, and certain criteria, as a result of which a firm qualifying under one list would qualify under the second list. That is incidental.
The list with which we are concerned is a list which we must have, because under the Bill we are saying that certain people do not have to advertise. How will the depositor know the people with whom he is dealing unless those people who do not have to advertise are known to be the people who do not have to comply with the regulations? One has to be aware of that situation so that this Bill can function properly. That is the point which we want to make.
I can see arguments of value in publishing a list under the Companies Act, as the minority indicated. It has been represented, and I accept it completely, that in certain cases damage might be done. The damage that might be done rests on the fact that banks which had been thought to be in the list would now be known not to be in it, and, therefore, banks which had been riding on a status to which they were not entitled would now be known not to be entitled to that recognition.
Therefore, I am not sure whether one ought not to take that into account. However, bearing in mind all the difficulties which the Committee and the Government had with regard to the Companies Act list, why should we get involved, on a Bill which does not deal with those matters, in making a decision, almost tangentially, about a matter which
1380
is clearly of importance and vast difficulty, in this irrelevant way? If we have to deal with that, I would much prefer the Minister to bring forward a document on which a proper question could be based, and we could debate whether or not the arguments in favour were greater than the arguments against.
Just because the Government have dealt with this by, as it were, legislation by reference, without thinking carefully whether the matter referred to was really the matter they had in mind, why should we decide it by reference? Let us decide it either positively, or not at all. I therefore say to the Minister that we would prefer not to come to any decision whatsoever as to whether the list under the Companies Act should continue, as it is at the moment, to be a private list, or should be turned into a public list.
We do not want to reach a decision on that without full and careful consideration. This is entirely consistent with the conclusion we reached towards the end of the discussion in Committee. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) made it clear that this was not a decision which we were pressing. It was for the Government to decide. My hon. and learned Friend said time and again that he wanted to leave it absolutely open for the Government to make a decision. He said:
"That would leave the wording of the Clause entirely to the Minister."—[OFFICIAL REPORT, Standing Committee A, 20tb December, 1962; c. 84.]
The reason why I want to clear out of the way this Companies Act list, and the responsibility for a decision on that list, is that my hon. Friends and I have the clearest view about whether the list under this Bill should be published. Of course, it must be published so that people desiring to deposit with exempt companies know which companies are exempt. If, therefore, we reach the view that the list under this Bill should be published, we cannot accept as an argument against publishing this list the fact that the Minister says, "I have already decided to publish another list and I shall not publish two because it would be confusing".
I reject any idea that there would be confusion. I reject that they would be similar lists, and that the criteria would be so similar that people would be led into confusion, but what I affirm

1381
positively is that we must have the list in relation to this Bill, and we cannot accept as an argument against it that there would be a second list.
I am sorry that I have kept the House some little time, but I hope that I have made the position clear, and I am sure that I have the support of my hon. Friends in what I said. I can only repeat, with all the courtesy due to the Minister for having implemented, as we knew he would, the pledge he gave, that nevertheless, having regard to the discussion which took place in the Committee upstairs, and to everything that has been said today, we must invite the Government to agree that there should be a list referable to this Bill, and the way to do that is to accept the Amendment, and we must, therefore, press the Amendment to its conclusion.
Sir Henry d'Ayigdor-Goldsmid: This is an extraordinarily involved discussion on a point of some obscurity, because the fine metaphysical line which the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Gloucester (Mr. Diamond) have drawn between the first and second lists did not clearly emerge in our Committee discussions.
I sat through those discussions and took part in them. Perhaps I took more, part in them than I should have. I listened attentively to what was said and I do not want to start a textual exegesis as to where the changed decision was taken. When I read the Amendment I thought that the hon. and learned Member for Kettering was referring to what I called the Schedule 8 list. We spent a lot of time on this list in Committee, but I do not think that it is really the stuff of the Bill. I rally to the support of my hon. Friend.
Nevertheless I am sure that it is right that a list of the companies which are exempt from the advertising restrictions of the Bill should go with the Bill and be published with it. I differ from my hon. Friend the Member for Torquay (Mr. F. M. Bennett). I do not think that the list is identical to the Schedule Eight list. I do not think that the Schedule Eight list is relevant to this because I believe that there must be a number of companies who would by the judgment of the Board of Trade be exempted from the advertising provisions if we were to exempt any companies.
There is still great obscurity on the point. If there is a Division my hon. Friend the Parliamentary Secretary will get his majority, but this is a decision which, for one reason and another, and for obvious reasons, too, a large proportion of hon. Members have had no means of investigating. We had a number of speeches repeating speeches made in Committee. A number of hon. Members now present were not members of the Committee and if we are called on to decide the point now most hon. Members will take a decision on it in complete ignorance. There must be grounds for second thoughts about this idea of a list of companies exempt for the purpose of this Bill, and that is the list which should be published.
I should like my hon. Friend to say that he will look at this again. Perhaps, when the Bill goes to another place, he may have the possibility of tying down the companies to which the Bill refers. That is the point f wanted to make, and I do it in this way so that it is on the record.
Question put, That the words proposed to be left out stand part of the Bill:—
The House divided: Ayes 195. Noes 156.

Division No. 81.]

AYES

[6.29 p.m.

Agnew, Sir Peter

Black, Sir Cyril

Clark, Henry (Antrim, N.)

Aitken, W. T.

Bossom, Hon. Clive

Clarke, Brig. Terence (Portsmth, W.)

Allason, James

Bourne-Arton, A.

Cleaver, Leonard

Ashton, Sir Hubert

Box, Donald

Cole, Norman

Atkins, Humphrey

Boyd-Carpenter, Rt. Hon. John

Cooke, Robert

Awdry, Daniel (Chippenham)

Braine, Bernard

Cooper-Key, Sir Neill

Balniel, Lord

Brooman-White, R.

Cordeaux, Lt.-Col. J. K-

Barber, Anthony

Bryan, Paul

Corfield, F. V.

Bell, Ronald

Buck, Antony

Costain, A. P.

Bennett, F. M. (Torquay)

Burden, F. A.

Coulson, Michael

Bevins, Rt. Hon. Reginald

Butcher, Sir Herbert

Craddock, Sir Beresford (Spelthorne)

Bidgood, John C.

Campbell, Gordon (Moray & Nairn)

Critchley, Julian

Biffen, John

Carr, Compton (Barons Court)

Cunningham, Knox

Biggs-Davison, John

Cary, Sir Robert

Curran, Charles

Bingham, R. M.

Channon, H. P. G.

d'Avigdor-Goldsmid, Sir Henry

Bishop, F. P.

Chichester-Clark, R.

de Ferranti, Basil

Donaldson, Cmdr. C. E. M.

Kimball, Marcus

Quennell, Miss J. M.

Doughty, Charles

Kitson, Timothy

Rawlinson, Sir Peter

du Cann, Edward

Langford-Holt, Sir John

Rees-Davies, W. R.

Eden, John

Leavey, J, A.

Renton, Rt. Hon. David

Elliot, Capt. Walter (Carshalton)

Leburn, Gilmour

Ridley, Hon. Nicholas

Emmet, Hon. Mrs. Evelyn

Legge-Bourke, Sir Harry

Ridsdale, Julian

Errington, Sir Eric

Lilley, F. J. P.

Roots, William

Erroll, Rt. Hon. F. J.

Lindsay, Sir Martin

Ropner, Col. Sir Leonard

Farey-Jones, F. W.

Linstead, Sir Hugh

Russell, Ronald

Farr, John

Litchfield, Capt. John

St. Clair, M.

Finlay, Graeme

Longbottom, Charles

Scott-Hopkins, James

Forrest, George

Lucas-Tooth, Sir Hugh

Sharples, Richard

Fraser, Ian (Plymouth, Sutton)

McLaren, Martin

Shaw, M.

Gammans, Lady

Maclay, Rt. Hon. John

Skeet, T. H. H.

Gardner, Edward

McMaster, Stanley R.

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

Gilmour, Ian (Norfolk, Central)

Macpherson, Rt. Hn. Niall(Dumfries)

Smithers, Peter

Gilmour, Sir John (East Fife)

Maddan, Martin

Smyth, Rt. Hon. Brig. Sir John

Goodhart, Philip

Maginnis, John E.

Spearman, Sir Alexander

Gower, Raymond

Maitland, Sir John

Speir, Rupert

Green, Alan

Marten, Neil

Stevens, Geoffrey

Gresham Cooke, R.

Matthews, Gordon (Meriden)

Steward, Harold (Stockport, S.)

Grosvenor, Lt.-Col. R. G.

Mawby, Ray

Stodart, J. A.

Hall, John (Wycombe)

Maxwell-Hyslop, R.J.

Storey, Sir Samuel

Hamilton, Michael (Wellingborough)

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

Studholme, Sir Henry

Harvey, John (Walthamstow, E.)

Mills, Stratton

Summers, Sir Spencer

Hastings, Stephen

Miscampbell, Norman

Talbot, John E.

Hay, John

Montgomery, Fergus

Thatcher, Mrs. Margaret

Henderson, John (Cathcart)

More, Jasper (Ludlow)

Thomas, Sir Leslie (Canterbury)

Hendry, Forbes

Morgan, William

Thornton-Kemsley, Sir Colin

Hiley, Joseph

Morrison, John

Tiley, Arthur (Bradford, W.)

Hill, Dr. Rt. Hon. Charles (Luton)

Neave, Alrey

Touche, Rt. Hon. Sir Gordon

Hill, Mrs, Eveline (Wythenshawe)

Nicholls, Sir Harmar

Turner, Colin

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

Nicholson, Sir Godfrey

Turton, Rt. Hon. R. H.

Hirst, Geoffrey

Noble, Rt. Hon. Michael

Tweedsmuir, Lady

Holland, Philip

Nugent, Rt. Hon. Sir Richard

van Straubenzee, W. R.

Hollingworth, John

Oakshott, Sir Hendrie

Walder, David

Hopkins, Alan

Orr-Ewing, C. Ian

Walker, Peter

Hornsby-Smith, Rt. Hon. Dame P.

Osborne, Sir Cyril (Louth)

Wall, Patrick

Howard, John (Southampton, Test)

Page, Graham (Crosby)

Ward, Dame Irene

Hughes-Young, Michael

Pannell, Norman (Kirkdale)

Webster, David

Hurd, Sir Anthony

Partridge, E.

Wells, John (Maidstone)

Irvine, Bryant Godman (Rye)

Pearson, Frank (Clitheroe)

Whitelaw, William

Jennings, J. C.

Peel, John

Williams, Dudley (Exeter)

Johnson, Dr. Donald (Carlisle)

Percival, Ian

Williams, Paul (Sunderland, S.)

Johnson, Eric (Blackley

Pickthorn, Sir Kenneth

Wills, Sir Gerald (Bridgwater)

Johnson Smith, Geoffrey

Pott, Percivall

Wilson, Geoffrey (Truro)

Jones, Arthur (Northants, S.)

Price, David (Eastleigh)

Worsley, Marcus

Kerans, Cdr. J. S.

Price, H. A. (Lewisham, W.)

Kerr, Sir Hamilton

Prior, J. M. L.

TELLERS FOR THE AYES:

Kershaw, Anthony

Profumo, Rt. Hon. John

Mr. Batsford and Mr. MacArthur.

NOES

Abse, Leo

Davies, S. O. (Merthyr)

Hoy, James H.

Ainsley, William

Delargy, Hugh

Hughes, Cledwyn (Anglesey)

Albu, Austen

Dempsey, James

Hunter, A. E.

Allaun, Frank (Salford, E.)

Diamond, John

Hynd, H. (Accrington)

Allen, Scholefield (Crewe)

Dodds, Norman

Hynd, John (Attercliffe)

Awbery, Stan (Bristol Central)

Duffy, A. E. P.

Irving, Sydney (Dartford)

Bacon, Miss Alice

Ede, Rt. Hon. C.

Jay, Rt. Hon. Douglas

Barnett, Guy

Edwards, Rt. Hon. Ness (Caerphilly)

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

Baxter, William (Stirlingshire, W.)

Edwards, Robert (Bilston)

Jones, Dan (Burnley)

Beaney, Alan

Evans, Albert

Jones, Elwyn (West Ham, S.)

Bellenger, Rt, Hon. F. J.

Finch, Harold

Jones, J. Idwal (Wrexham)

Bence, Cyril

Fitch, Alan

Key, Rt. Hon. C. W.

Bennett, J. (Glasgow, Bridgeton)

Forman, J. C.

King, Dr. Horace

Blackburn, F.

Fraser, Thomas (Hamilton)

Lawson, George

Blyton, William

Galpern, Sir Myer

Lee, Frederick (Newton)

Boardman, H.

Gordon Walker, Rt. Hon. P. C.

Lee, Miss Jennie (Cannock)

Bray, Dr. Jeremy

Gourlay, Harry

Lever, Harold (Cheetham)

Brockway, A. Fenner

Greenwood, Anthony

Lewis, Arthur (West Ham, N.)

Brown, Rt. Hon. George (Belper)

Griffiths, W. (Exchange)

Lipton, Marcus

Butler, Herbert (Hackney, C.)

Grimond, Rt. Hon. J.

Lubbock, Eric

Callaghan, James

Hamilton, William (West Fife)

Mabon, Dr. J. Dickson

Carmichael, Neil

Hannan, William

MacColl, James

Cliffe, Michael

Hayman, F. H.

MacDermot, Niall

Collick, Percy

Henderson, Rt. Hn. Arthur(Rwly Regis)

McInnes, James

Corbet, Mrs. Freda

Herbison, Miss Margaret

McKay, John (Wallsend)

Craddock, George (Bradford, S.)

Hill, J. (Midlothian)

Mackie, John (Enfield, East)

Crosland, Anthony

Hilton, A. V.

McLeavy, Frank

Dalyell, Tam

Holman, Percy

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

Davies, G. Elfed (Rhondda, E.)

Holt, Arthur

Manuel, Archie

Davies, Harold (Leek)

Houghton, Douglas

Mapp, Charles

Davies, Ifor (Gower)

Howell, Denis (Small Heath)

Marsh, Richard

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1385

Mayhew, Christopher

Pursey, Cmdr. Harry

Thomas, George (Cardiff, W.)

Mendelson, J. J.

Reynolds, G. W.

Thompson, Dr. Alan (Dunfermline)

Millan, Bruce

Rhodes, H.

Thornton, tiniest

Milne, Edward

Roberts, Albert (Normanton)

Wade, Donald

Mitchlson, G. R.

Roberts, Goronwy (Caernarvon)

Wainwright, Edwin

Moody, A. S.

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

Warbey, William

Morris, John

Ross, William

Watkins, Tudor

Mulley, Frederick

Shinwell, Rt. Hon. E.

Weitzman, David

Noel-Baker, Francis (Swindon)

Short, Edward

Wells, Percy (Faversham)

Oliver, G. H.

Silverman, Sydney (Nelson)

White, Mrs. Eireno

Oram, A. E.

Skefrington, Arthur

Whitlock, William

Owen, Will

Slater, Joseph (Sedgefield)

Wigg, George

Paget, R. T.

Small, William

Wilkins, W. A.

Panned, Charles (Leeds, W.)

Smith, Ellis (Stoke, S.)

Willey, Frederick

Pargiter, G. A.

Sorensen, R. W.

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

Parker, John

Sosklce, Rt. Hon. Sir Frank

Woodburn, Rt. Hon. A.

Pavitt, Laurence

Sprigga, Leslie

Woof, Robert

Pearson, Arthur (Pontypridd)

Stewart, Michael (Futham)

Yates, Victor (Ladywood)

Peart, Frederick

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

Zilliacus, K.

Pentland, Norman

Swain, Thomas

Price, J. T. (Westhoughton)

Symonds, J. B.

TELLERS FOR THE NOES:

Probert, Arthur

Taylor, Bernard (Mansfield)

Mr. Redhead and Dr. Broughton

Mr. Green: I beg to move, in page 2, line 23, to leave out "of the Board of Trade" and to insert:
"made by the Board of Trade under section 3 (1) (a)".
Mr. Speaker: I think that it would be for the convenience of the House to discuss with this Amendment the following Amendments: In line 27, after "apply", insert" (a)".
In line 29, leave out from "regulationsto" to and insert:
"made by the Board of Trade under section 3 (1) (b); or
(b)".
In line 33, leave out "this subsection" and insert "paragraph (b)".
Mr. Green: I am sure the House is grateful to you, Mr. Speaker, for permitting discussion on these Amendments.
I think that the discussion will be very brief. The Amendments are in pursuance of an undertaking which I gave during the Committee stage to clarify, by redrafting, the relationship between Clauses 2 and 3. They are, therefore, essentially drafting Amendments.
Mr. Mitchison: I wish to thank the hon. Gentleman for carrying out the undertaking which he gave and to tell him that I think the Amendments make the Bill clearer.
Amendment agreed to.
Mr. Mitchison: I beg to move, in page 2, line 26, at the end to insert:
Provided that no such advertisement shall be issued if, on consideration of the said accounts and of any further information prescribed by regulations for the purpose, the Board of Trade is satisfied that the company is in an unsound financial position.
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(4) For the purpose of the last foregoing subsection the Board of Trade may from time to time make regulations in the form of statutory instruments (which shall be subject to annulment in pursuance of a resolution of either House of Parliament) prescribing information to be furnished (whether generally or by any group or class of companies) and the form in which any such information shall be furnished or verified; and (without prejudice to the generality of the foregoing) such information may include particulars of the company's membership, if any, of an Association and of any financial conditions compliance with which is required for such membership
From our point of view this is the most important Amendment with which we have to deal today and it has a certain history. The scheme of the Bill as a whole is to protect depositors by furnishing the Board of Trade with a great deal of information which it will not then communicate to the depositor. How that helps is, no doubt, clear to the Board of Trade, but it is far from clear to us. We have tried to improve on the one document which certainly will reach the depositor, that is the advertisement, long or short, and the Board of Trade has in mind advertisements which will inform him where to put his money.
The Government have assured us more than once that they do not mind so much about the advertisements. After all, they are only documents which will reach the man who is to pay the money. What do they matter in the eyes of the Government? The Government are concerned with the documents which reach the Board of Trade. We have had a great deal of detailed argument about accounts and regulations and so on, all of it about the relations between the Board of Trade and the lending company, the depositing company.

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This matter was raised at a quite early stage, and in the course of winding up the Second Reading debate the Economic Secretary referred again at some length, and with some pride, to the information which would be given to the Board of Trade. He was asked—I asked him in fact—what the Board of Trade would do with the information and how it would protect the depositor. The answer from the hon. Gentleman was a very curious one. He assured us, in effect, that on receiving the information the Board of Trade would read, mark and inwardly digest it and form an opinion on the status of the company. He said, when asked what the Board of Trade would do with the information to protect the depositor:
"I would say that they would do as follows: they would examine it with care and attention, and would attempt to evaluate it and use it as an indication—which would be very easy to, the trained mind "—
that is the Board of Trade mind—
"of the substance and stability of the company concerned, and then keep the situation constantly under review—to coin a phrase".
My right hon. Friend the Member for Battersea, North (Mr. Jay) then said:
"Surely, if they had been doing that for the last five years just as many depositors would have lost just as much money as they have in fact lost."
The reply of the Economic Secretary was:
"That is not an appropriate point"—[OFFICIAL REPORT, 4th December, 1962; Vol. 668, c. 1225.]
6.45 p.m.
What my right hon. Friend had in mind is perfectly clear. It is all very well to come to these conclusions in the fastnesses of the Board of Trade. What really matters is, what gets round to the depositor at the end of it? During the Committee stage discussions we had the extraordinary position that the Government appeared unwilling to let out the result of their cogitations.
The matter arose on an Amendment which would have limited the issue of advertisements to companies which the Board of Trade, on the information available to it under the Bill—I repeat, on the information available under the Bill—considered to be sound. There was, of course, bound to be a limited amount of information—a qualified judgment to that
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extent—but it was quite sufficient, apparently, for the Board of Trade to use as an indication—I quote the words again—
"substance and stability of the company concerned ".
What the Board of Trade wanted were the accounts and its trained minds would find it easy to do it. But having done it the Board of Trade was not prepared to limit the issue of advertisements to companies which it then considered to be sound.
I think that this was Ministerial fright—Departmental fright, shall I say? The Board of Trade felt that if it had to decide that a company was sound, that would give it a seal of authenticity, a "crown" of some sort, which it was not prepared to confer on anybody, for fear that it might not confer it on the right person or that it might omit somebody who would be entitled to it. And it ran away. It refused to let us know the result of that which, to the Department's trained mind, was so easy. This Amendment was voted down.
Now we have tried to make it easy for the Government. I wish to see whether they are going to refuse what is put on them by the Amendment. If we look at page 2, line 26, we find that we have just ended a subsection which exempts from the general prohibition in the Bill against advertisements the advertisement which
"complies with regulations of the Board of Trade"
and also the similar requirement, that the "accounts … to be delivered … are duly delivered." If that is done, all is well, and the advertisement is then released from the general prohibition.
All we wish to add is that, notwithstanding that, no such advertisement should be issued if
"on consideration of the said accounts"
—that is what the Economic Secretary said he required, but we should be willing to give him a little more—
"and of any further information prescribed by regulations for the purpose, the Board of Trade is satisfied that the company is in an unsound financial position."
There then follows a subsection giving the Board of Trade power by regulations—and prescribing some negative procedure about those regulations—to get the necessary information in the form in which it is required, including among the

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things in that information membership of an association. The Radcliffe Committee, when considering this sort of matter, had evidence from two associations—no doubt highly respectable associations—of the companies with which this Bill is concerned—companies which take deposits. One association was called the Association of Finance Houses and the other the Association of Industrial Bankers.
It is true that they were asked why they called themselves that. I do not think that the Radcliffe Committee quite discovered the answer, but that does not matter. It is clear that they were reputable bodies and the object of their existence was to make provisions about liquidity and so on. That would ensure the stability of their members so that the membership of an association of that sort and the character of these conditions are things about which the Board of Trade might properly get information.
There seems to be no doubt that if the Economic Secretary was prepared to make up his mind in these unqualified terms on the accounts, he should have even less difficulty in this regard. What is the difficulty with this Amendment? It requires him to make up his mind simply about whether he is satisfied, not that a company is in an unsound position but that it is in a sound position. The consequences would be that, provided the requisite hoops are gone through, that is to say, that the advertisements of the company comply with Board of Trade regulations and the accounts are duly delivered in the appropriate form—the Board of Trade has to evaluate them anyhow, we were told about that—and there is reason to do so, the Board of Trade will come to the conclusion that the company is in an unsound financial position.
Nevertheless, it will not be able to restrain the company from issuing advertisements except in one way, I shall come to that one way in a moment. So far as the whole of Clause 2 is concerned, the company in question thought by the Board of Trade to be in an unsound financial position by virtue of provisions in the Bill—the object of which is supposed to be the protection of depositors—will be able to issue advertisements and collect money from depositors and the Board of Trade can do nothing whatever about it, subject to one point. The one
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point is that there is always the last resort. The Board of Trade may go to the courts and petition for the winding-up of the company.
I do not know what the hon. Gentleman will say in reply to the Amendment. Is he going to say that in every case where he is satisfied that the company is in an unsound position he undertakes to petition for its winding up? I have no particular interest in these companies, but I think that might be a rather harsh application of the provisions of the Bill. I think so for this reason. A company might perfectly well at the time be in a position when it ought not to ask for any more deposits, but equally, after a lapse of time, it may be perfectly solvent. This is a very drastic step.
I am interested in this matter fat another reason. There is one fairly obvious parallel which I think occurs to many of us, and which was mentioned by my hon. Friend the Member for Glasgow. Craigton (Mr. Millan) in our discussions in Committee. That is the position of building societies. Building societies invite deposits from the public. In many ways what they do is very like what companies will do under the Bill, although I agree at once that the purposes of the two kinds of bodies are rather different and there are same distinctions. I think this is the closest parallel which one can find. The position of building societies seems to be that they can be wound up as companies.
They are regarded as companies fat the purpose of winding up in the ordinary way and they can also be wound up by an award of the Registrar. The award of the Registrar does not come in here because there is no provision for a Register of the companies accepting these deposits. Therefore, there is no registrar, but in the case of building societies the Registrar, an administrative official, has power to order the winding up of a society. He does it in the form of an award, which is the phrase used.
If there were a parallel in this case it would be not only that the Board of Trade under the Bill has power to petition far a winding up, as it has now, but also power by an award to wind up the company in question. These are rather more extensive provisions for

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winding up in the case of building societies than exist in the case of these companies. When one turns to the building societies legislation in respect of these more extensive provisions about winding up, and in cases where I should have thought there was on the whole certainly no more, and probably less, reason for it than in connection with these companies, the Registrar has two other powers.
They occur in Sections 6 and 7 of the Building Societies Act, 1960. I need not go into them in detail. The first is power to suspend the raising of money by a building society. That is in Section 6. The second, in Section 7, is power to control advertising by a building society. Section 7 is, I think, the less drastic power while Section 6 is the more drastic, but neither of them amounts to winding-up. They exist side by side with provisions for winding-up which, as I have already shown, go rather beyond the provisions in this Bill.
As regards building societies, Parliament has found it necessary to have no fewer than four provisions of a controlling character. The first is power to control advertising and that is not merely provision as to the form of the advertisement. It includes that, but also includes power to prohibit the issue by the building society of advertisements of all descriptions. It is a complete prohibition, or something which may fall short of that. The second power is suspension of raising of money by a building society. That is so general and so drastic that there has to be a special exception allowing the building society to borrow from a banking or finance company or from one of its own directors. It covers a great deal more than mere advertisements. Then there is the third provision about winding-up by the award of the Registrar and there is the fourth set of provisions about winding up in the ordinary way in a court.
In this Bill, the only power the Board of Trade is taking is power to petition for winding up by the court. I suggest very strongly that the hon. Gentleman ought not to refuse the power which is now being offered to him to prohibit the issue of advertisements, which may comply in form and may follow accounts complying in form with the provisions of
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the Bill, but which are advertisements of a company which, in the judgment of the Board of Trade—formed in the manner which was admitted and stated by the Economic Secretary—is in an unsound financial position.
If he will not do this, there will be the most fantastic position. The Board of Trade will be compelled to choose between winding up a company altogether and allowing the advertisements to go through. The point behind all this is the position of the depositor. In many ways he resembles the person who puts money into a building society for the time being. From a social point of view those two classes are not far apart.
7.0 p.m.
In addition to that type of depositor, there are far more substantial depositors, sometimes corporate, sometimes not. In Committee we found ourselves talking about the sophisticated depositor and the unsophisticated depositor. There is no sharp line in these matters, but clearly the unsophisticated depositors in these borrowing companies exist, and they exist in very large numbers. That opinion is confirmed by such particulars as are available about deposits. They are the people whom the Bill is intended to protect. The sophisticated depositor can usually look after himself. He can go and look at the accounts, which will no doubt be available for inspection, which are given to the Board of Trade, and he can form his judgment upon them. The unsophisticated depositor will not be very much wiser if he is allowed to see the accounts. To take the words of the Economic Secretary again, it is the trained mind which is required to evaluate these accounts.
This was pressed on the Government on Second Reading. Their answer was very curious. They said, "You cannot expect the Board of Trade to do it. We rely on the financial journalists". That is an improbable answer, but it is what the Government said. It was the President of the Board of Trade who said that the financial newspapers could do it. Then I suppose the financial newspapers were relied on to publish an account or a description or criticism—whatever it may be—about every company inviting deposits in this way. I should have thought that they were most unlikely to do it.

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There is a further difficulty. A great many of these depositors do not even get as far as reading the financial newspapers. There is yet a further difficulty. Financial journalists are not infallible. I should think that they make more mistakes than any other group of journalists put together. At any rate, they make a substantial number. Not only are they not infallible. There is another trouble about them. They are like scientists and lawyers. They do not always agree. The Government did not clearly indicate which financial journalists were reliable and which were not. If the Government hesitate to discriminate between one company and another, how much more reluctant they must find themselves to discriminate between one financial journalist and another. I assure them that that way leads to destruction—destruction in terms of public opinion—for the financial newspapers might go on to criticise the Government.
The unsophisticated depositor cannot be expected to get the information he ought to get in this way. He knows, and we know, that the Board of Trade not only has the information but uses it to form a value judgment about these companies. I have given up trying to get the Government to say that in every case in some form or another that value judgment ought to be published. I have given up trying to get the Government to say, as I think they should, that the company is in this or that case apparently—it is no more than apparently—in a sound financial position. We have now come to the real bare bones, the last step, the one thing that the Government may not be too barefaced to refuse to do; that is, when they know the company is unsound, to tell the public that that is so by preventing the advertisements. Indeed, they do not even really tell the public. All that happens is, not that there is any published comment on the company, but simply that its advertisements do not appear.
However reluctant a Government Department may be, surely it can go that far, unless it is prepared to undertake that, whenever it comes to that opinion, for however short the period of unsoundness may appear to it to be, it will wind the the company up or take steps to get it done by the court.
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The Government cannot mean it. It is too close a parallel with the building societies. I therefore hope that on this occasion the Government will accept the Amendment, which is the very minimum of protection, the smallest little tooth put into the Bill, the purpose of which after all is said to be the protection of depositors.
What is the alternative to this? I have suggested questions of soundness Another alternative, I suppose, would be licensing. I myself do not think that licensing is necessary if the Board of Trade is prepared, even to this limited extent, to communicate the judgment it has formed in some form or other and stop advertisements by unsound companies or, better still, if it would allow advertisements only by sound ones. Whichever way it is put, that should be enough, but that is the bare minimum.
If the Government are going to refuse to do this kind of thing in the Bill—from the way we have conducted our discussions this afternoon it looks as if they are going to refuse everything we propose—they are simply putting off the evil day, not only for themselves but for their friends in the City of London, because sooner or later the alternative to this will have to be some complicated licensing system which will be far worse for the Board of Trade, no more effectual as regards control and far more troublesome to the companies concerned. Is it not better to take what is suggested now, this bare minimum? It may have to be enlarged later. It very likely will have to be. For the moment it is surely indefensible to refuse it?
Mr. Green: The Amendment does indeed differ in emphasis from that moved by the hon. and Learned Gentleman in Committee. I agree with him that it is in emphasis a different matter. The Amendment moved in Committee would have imposed on the Board of Trade a positive duty to declare its own satisfaction about a company's financial soundness before the company advertised. I agree with the hon. and learned Gentleman that this Amendment puts the emphasis in a negative sense. In other words, we are asked to prohibit advertising when we feel that a company is in an unsound state. In that sense this Amendment is different from the Amendment moved in Committee.

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I am not, in one sense, going to disappoint the hon. and learned Gentleman, because I cannot recommend the House to accept the Amendment. My reasons are these. This is a matter of judgment. I cannot prove with absolute certainty that my judgment is right, nor can the hon. and learned Gentleman prove that his is absolutely right. The expectation would be, if we accepted the Amendment, that the Board of Trade would act if in its opinion the company might be heading towards insolvency. No doubt if the Amendment became law the public would expect the Board of Trade to act.
If the company is in an unsound position, it may, as the hon. and learned Gentleman said, be temporarily in a state of delicate health. This is quite possible. It might subsequently recover. Indeed, it might recover quickly and grow sturdy and strong again. But a prohibition of this sort on its advertisements would be a very public act. It would have to be. A company would be actually advertising and it would be told to withdraw its advertisements. Is it really suggested that nobody would notice that withdrawal and that inquiries would not arise? That would surely be done, for when a company is putting out advertisements in public—perhaps having posters and other advertisements of a permanent character on a site—inquiries would be bound to arise if they were suddenly withdrawn.
It passes the bounds of real credibility if it is suggested that it would not be a public act, for it would have to be. Someone, some commentator on the scene perhaps, would notice that a company which had been advertising had suddenly ceased to do so without any explanation. Only one explanation could be drawn—that the Board of Trade had come to the conclusion that the company was unsound, but not so unsound as to require a petition for winding up. I can think of few actions which would make it more certain that the company's position would deteriorate. I cannot imagine how such a company would recover that confidence which the hon. and learned Member for Kettering (Mr. Mitchison) thought, or hoped, would be the case.
I do not see how such a company could recover from the jolt of such an action. I cannot prove that what I am saying is right because, after all, we are
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dealing with something that is hypothetical and not something that has happened. I put forward these views as a very real consideration. Let us consider what it might mean. Is it expected that a company will account to the Board of Trade, for example, if it is unable to pay the sums due and payable to its depositors? We are concerned with accounts which may record, perhaps, a period of indifferent trading and which may show that a company's solvency position is dependent on the correctness of the value assigned to some questionable assets. The Board of Trade notices this and, under the powers conferred on it by Clause 17, may seek further information.
At this point this is all known to the company, but is not known to someone else. I should have thought that at this stage the company would be given its chance either to change its method of trading and pull its horns in, so to speak, and so grow strong and sturdy again, as we hope it would, without necessarily having to proceed to a winding-up petition. But if the Board of Trade goes further under Clause 17 and seeks the necessary information—as it is entitled to do by using the powers under that Clause—and is convinced that there is radical unsoundness in the company, it does not have much option but to proceed to ask for a winding-up petition: Naturally, I am not too sure of this because the courts may not grant the order.
I believe that it would be equivalent if we accepted the Amendment—to placing on the Board a responsibility for ensuring that the public may, with complete safety, deposit its money with any company which is permitted to advertise for deposits. The hon. and learned Member for Kettering may say that it does not go as far as that because it only expects the Board to act if the company is unsound. I am afraid that the conclusions to be drawn—and I am sure that this is quite inescapable if an Amendment such as this was incorporated in the Bill and operated for even a short period—would always be that if the Board of Trade did not act under the Amendment it would be because it was satisfied that the company was sound. We should be back to "square one" at which I had to discard the Amendment in Committee for the reasons I gave then.
Mr. Mitchison: Will the Minister deal with the question of why these powers exist, and what effect they have, on building societies?
Mr. Green: Building society legislation is its own legislation. It is quite separate from the matter we are discussing. The hon. and learned Member is quite entitled to put that point, but it is hardly a parallel analogy to deposit-seeking companies to quote building societies. Such societies have a great many other bounds or barriers around them. They are a separate class of company and have their own legislation, I do not think that such an analogy is complete and I am afraid that I cannot accept it as a true parallel.
Perhaps the hon. and learned Member for Kettering—and I do not expect him to be convinced by this—will recall the words of my right hon. Friend the President of the Board of Trade when he said on Second Reading:
"No legislation"—
however it is framed—
"can stop companies running into difficulties,"—
That is clear and obvious, for we cannot stop them running into difficulties—
"nor is it for the Board of Trade to prescribe that a particular form of commercial operation is risky and unsound, or, on the other hand, bold and enterprising and likely to be successful."
Thus it is not for the Board of Trade to make this kind of judgment.
"What the Government must do is to ensure that the information which a depositor ought to have is available, and available early enough to be of use in assessing the prospects or progress of a company. That is what the Bill sets out to do"—[OFFICIAL REPORT, 4th December, 1962; Vol. 668, c. 1150.]
We went through this in Committee. It was pointed out that the Board of Trade should have certain powers to ensure its own safety. We went into the question of the Board of Trade's own sanction and need, and it is a sanction regarding the winding up of companies. It is adequate for the Board of Trade to proceed with that sanction if it needs to do so. To go further and to make the Board make value judgments is a totally different matter.
Mr. Mitchison: But if there were an express admission that the Board of Trade made those value judgments? That is exactly what he said.
Mr. Green: But the value judgments it is making—and I accept what the hon. and learned Member said about that—is a form of judgment as to whether it is justified to proceed with the further sanction which the Bill empowers it to do. What I cannot accept is that it should become the bar of public judgment, publicly uttered and publicly made. I am afraid that if I accepted the Amendment the Board of Trade would be in that position. It is for that reason that I ask the House to reject the Amendment.
7.15 p.m.
Mr. Diamond: We are having a disappointing afternoon. We have put forward one Amendment after another, each one more moderate than the last, but we do not seem to be able to reach such a low stage of moderation as to obtain the approval of the Minister. On this occasion, we find ourselves in the same position of being completely disappointed with his reply.
As has happened previously, it is not necessary for me to underline the case for the Amendment, because that has been done adequately and lucidly by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). It is my duty to consider the arguments adduced by the Minister in rejecting the Amendment and to attempt to demonstrate, as I have on previous occasions, why we cannot accept them as sufficient arguments.
As my hon. and learned Friend the Member for Kettering made perfectly clear, the Amendment refers to the Clause which is of the essence of the Bill and gets to the guts of it, to use a rather inelegant term. I must remind the Government that the Bill is not only called the "Protection of Depositors Bill", but that its Long Title refers to
"… the supervision of companies which issue such advertisements …"
Indeed, if this Amendment were incorporated, it would be virtually the only provision in the Bill giving real supervision.
We have made the point time and time again that the Bill is miscalled—and, therefore, misleading—the Protection of Depositors Bill, and I add that it is misleading to describe this as a Measure to supervise companies that issue advertisements when, on the only occasion on which we seek by a very modest Amendment to

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achieve that purpose we are unable to persuade the Minister of its acceptability.
There is an enormous gap between a company being, as the Amendment says in an "unsound financial position" and its being in such a position as to merit the action of the Board of Trade in starting winding-up proceedings—an enormous gap. As the Minister said, and in this we support him completely, the last thing anyone wants is for such action to be taken as so to tilt the scales that a company which is in a difficult position but might otherwise succeed is compelled to go into liquidation. But we have also a responsibility to protect depositors, and every Government speech is empty of thought for depositors. The Government's attitude is that the depositor must look after himself. As lawyers say, in a slightly different sense, "Caveat depositor" is the whole Government attitude in this Bill.
We thought that we were dealing with a Bill to protect depositors, and that, therefore, at some point of time, consideration would be given to the rights of the depositor even if the exercise of those rights might in some way and to some slight extent inconvenience those running a company seeking deposits. This is the minimum level at which we insist that the rights of the depositor should be considered. How else shall we avoid the utterly premature action of the Board of Trade in taking steps to wind up a company when the Board is satisfied that the interests of the depositor require it? We can only avoid that kind of premature action being taken by having some intermediate stage, by taking slightly less harsh action of the kind provided in the Amendment.
I should have thought that the Government would have been absolutely satisfied as to the parallel of the building societies, where the legislation provides for precisely the kind of thing my hon. and learned Friend seeks. The Minister turned that down as a parallel, but we did not say that a building society is the same thing as a company which seeks deposits. We said something quite different. We said that the method by which the Registrar of Building Societies protects those who would invest in a building society is an exact parallel with the methods suggested here.
1400
The Minister alleged against that method that it might have damaging results through publicity, and that, therefore, any method that publicised what was being done might have a more deleterious effect than one wanted, but that is the precise position of the building society. The Registrar of Building Societies is anxious to protect the deposits of the public in the building society, and he does it at times by refusing a building society permission to accept further deposits.
There are times when the Registrar is satisfied that such action is in the interests of depositors with the building society, notwithstanding that those same depositors have no doubt already deposited vast sums that must be protected. He is satisfied that there is an appropriate time when one can take action of this kind which brings fully into the daylight what is happening with regard to the building society yet protects the depositors who have already put money into the building society.
The Registrar is so satisfied, and the Government are satisfied that the Registrar needs those powers. What we are completely unable to understand is why the Government are not satisfied that the President of the Board of Trade needs identical powers with regard to depositors in companies of this kind. It is only the method we are concerned with, and we deny that in every single case if these powers were granted more damage would be done than benefit gained.
The Minister's argument is that we would do more damage to the existing depositors than there would be benefit in protecting would-be depositors. I recognise the argument, and I think that I understand it correctly. We say that there are times when one would do more benefit in protecting would-be depositors than one would do damage to the company, or to those depositing with it, or to its shareholders.
Those occasions provide an opportunity to use powers of this kind, and the Minister lacks those powers at the moment. There would be no compulsion on him to use them; he would have discretion to use them where he thought it appropriate. It is completely to be regretted that the hon. Gentleman has not seen fit to accept this very modest

1401
and moderate Amendment. I am sure that my hon. and learned Friend is right in saying that a situation can arise in relation to finance companies such as there has been with building societies.
I need not give detail or name, but there was a nasty situation which gave rise to special legislation. I am quite sure that were a similar situation to arise in connection with a finance company—and there is nothing in this Bill that could prevent it arising—the Government would immediately want to ask for additional powers. We ask, "Why not take the powers while you have the opportunity—while we are considering this particular aspect?"
I am sorry that I always have to finish my remarks in the same way. We try very hard to persuade the Government that, moderate as our Amendments are, they are worthy of consideration and would improve the Bill. No one could possibly suggest that either in Com-
mittee or now any party issue of the slightest kind has been involved. The approach is completely non-partisan. Al: of us, on which ever side we may sit, are trying to do the same thing, which is to improve the Bill.
We bring such limited knowledge of the facts as we have to the attention of the Government, yet we meet this situation in which the Government are not prepared to accept any Amendment, however much limited in scope, or however much following a precedent laid down by the Government themselves, or however much needed in what is supposed to be the Protection of Depositors Bill. If the Government are not prepared to change their minds now, we must once again insist on dividing the House.
Question put, That those words be there inserted in the Bill:—
The House divided: Ayes 125, Noes 164.

Division No. 82.]

AYES

[7.28 p.m.

Abse, Leo

Hamilton, William (West Fife)

Parker, John

Ainsley, William

Hannan, William

Pavitt, Laurence

Allaun, Frank (Salford, E.)

Hayman, F. H.

Pearson, Arthur (Pontypridd)

Allen, Scholefield (Crewe)

Harbison, Miss Margaret

Pentland, Norman

Awbery, Stan (Bristol Central)

Hill, J. (Midlothian)

Price, J. T. (Westhoughton)

Bacon, Miss Alice

Hilton, A. V.

Probert, Arthur

Baxter, William (Stirlingshire, W.)

Holman, Percy

Pursey, Cmdr Harry

Beaney, Alan

Holt, Arthur

Rhodes, H.

Bennett, J. (Glasgow, Bridgeton)

Houghton, Douglas

Roberts, Albert (Normanton)

Blackburn, F.

Howell, Denis (Small Heath)

Rose, William

Boardman, H.

Hughes, Cledwyn (Anglesey)

Short, Edward

Bowden, Rt. Hn. H. W. (Lelcs, s. w.)

Hunter, A. E.

Silverman, Sydney (Nelson)

Bray, Dr. Jeremy

Hynd, H. (Acorington)

Skeffington, Arthur

Brockway, A. Fenner

Hynd, John (Attercliffe)

Slater, Joseph (Sedgefleld)

Broughton, Dr. A. D. D.

Irving, Sydney (Dartford)

Small, William

Butler, Herbert (Hackney, C.)

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

Smith, Ellis (Stoke, S.)

Carmichael, Neil

Jones, Dan (Burnley)

Sorensen, R. W.

Castle, Mrs. Barbara

Jones, S. Idwal (Wrexham)

Spriggs, Leslie

Cliffe, Michael

Key, Rt. Hon. C. W.

Stewart, Michael (Fulham)

Colllck, Percy

King, Dr. Horace

Stonehouse, John

Corbet, Mrs. Freda

Lawson, George

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

Craddock, George (Bradford, 8.)

Ledger, Ron

Symonds, J. B.

Dalyell Tam

Lee, Miss Jennie (Cannock)

Taylor, Bernard (Mansfield)

Davles, G. Elfed (Rhondda, E.)

Lever, Harold (Cheatham)

Thompson, Dr. Alan (Dunfermllne)

Davies, S. o. (Merthyr)

Lewls, Arthur (West Ham, N.)

Thornton, Ernest

Delargy, Hugh

Lubbock, Eric

Thorpe, Jeremy

Dempsey, James

Mabon, Dr. J. Dickson

Wade, Donald

Diamond, John

MacColl, James

Wainwrlght, Edwin

MacDermot, Niall

Warbey, William

Duffy, A. E. P.

Mclnnes, James

Watkina, Tudor

Ede, Rt. Hon. C.

McKay, John (Wallsend)

Weitzman, David

Edwards, Rt. Hon. Ness (Caerphilly)

Mackle, John (Enfield, East)

Wells, Percy (Faversham)

Edwards, Robert (Bilston)

Mallalieu, J.P.w. (Huddersfield, E.)

Whitlock, William

Fitch, Alan

Manuel, Achie

Wigg, George

Fletcher, Erie

Mapp, Charles

Wilkins, W. A.

Forman, J. C.

Mendelson, J. J.

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

Fraser, Thomas (Hamilton)

Mlllan, Bruce

Woodburn, Rt. Hon. A.

Galpern, Sir Myer

Milne, Edward

Woof, Robert

George, Lady MeganLloyd (Crmrthn)

Mitchlson, G. R.

Yates, Victor (Ladywood)

Gooch, E. G.

Morris, John

Zllllacus, K.

Gourlay, Harry

Oliver, G. H.

Griffiths, w. (Exchange)

Oram, A. E.

TELLERS FOR THE AYES;

Grimond, Rt. Hon. J.

Parglter, G. A,

Mr. Redhead and Mr. Ifor Davies.

NOES

Agnew, Sir Peter

Gilmour, Sir John

Nicholson, Sir Godfrey

Aitken, W. T.

Goodhart, Philip

Noble, Rt. Hon. Michael

Allason, James

Gower, Raymond

Oakshott, Sir Hendrie

Ashton, Sir Hubert

Green, Alan

Orr-Ewing, C. Ian

Atkins, Humphrey

Grosvenor, Lt. Col. R. G.

Osborne, Sir Cyril (Louth)

Awdry, Daniel (Chippenham)

Gurden, Harold

Page, Graham (Crosby)

Balniel, Lord

Hall, John (Wycombe)

Pannell, Norman (Kirkdale)

Barber, Anthony

Hamilton, Michael (Wellingborough)

Partridge, E.

Batsford, Brian

Harvey, John (walthamstow, E.)

Peel, John

Baxter, Sir Beverley (Southgate)

Hastings, Stephen

Percival, Ian

Bell, Ronald

Hay, John

Pickthorn, Sir Kenneth

Berkeley, Humphry

Henderson, John (Cathcart)

Pott, Percivall

Bevins, Rt. Hon. Reginald

Hendry, Forbes

Price, H. A. (Lewisham, w.)

Bidgood, John c.

Hiley, Joseph

Prior, J. M. L.

Biff en, John

Hill, Mrs. Evelline (Wythenshawe)

Proudfoot, Wilfred

Biggs-Davison, John

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

Ramsden, James

Bingham, R. M.

Hirst, Geoffrey

Rawlinson, Sir Peter

Bishop, F. P,

Holland, Philip

Redmayne, Rt. Hon. Martin

Black, Sir Cyril

Hollingworth, John

Renton, Rt. Hon, David

Bourne-Arton, A.

Hopkins, Alan

Ridley, Hon. Nicholas

Box, Donald

Hornsby-Smith, Rt. Hon. Dame P.

Ridsdale, Julian

Braine, Bernard

Howard, John (Southampton, Test)

Ropner, Col. Sir Leonard

Brown, Alan (Tottenham)

Hughes-Young, Michael

St. Clair, M.

Buck, Antony

Hurd, Sir Anthony

Shaw, M.

Bullard, Denys

Irvine, Bryant Godman (Rye)

Skeet, T. H. H.

Butcher, Sir Herbert

Johnson, Dr. Donald (Carlisle)

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

Campbell, Gordon (Moray & Nairn)

Johnson, Eric (Blackley)

Smithers, Peter

Carr, Compton (Barons Court)

Jones, Arthur (Northants, S.)

Speir, Rupert

Cary, Sir Robert

Kerans, Cdr. J. S.

Steward, Harold (Stockport, S.)

Channon, H. P. G.

Kerr, Sir Hamilton

Stodart, J. A.

Chataway, Christopher

Kershaw, Anthony

Studholme, Sir Henry

Clark, William (Nottingham, S.)

Kimball, Marcus

Summers, Sir Spencer

Clarke, Brig. Terence (Portsmth, W.)

Langford-Holt, Sir John

Taylor, Sir Charles (Eastbourne)

Cleaver, Leonard

Lehurn, Gilmour

Thomas, Sir Leslie (Canterbury)

Cooper, A. E.

Legge-Bourke, Sir Harry

Thornton-Kemsley, Sir Colin

Cooper-Key, Sir Neill

Lewis, Kenneth (Rutland)

Tiley, Arthur (Bradford, W.)

Cordeaux, Lt. Col. J. K.

Lilley, F. J. P.

Touche, Rt. Hon, Sir Gordon

Corfield, F. V.

Linstead, Sir Hugh

Turner, Colin

Coulson, Michael

Litchfield, Capt. John

Turton, Rt. Hon. R. H.

Craddock, sir Beresford (Spelthorne)

Lucas-Tooth, Sir Hugh

Tweed smut r, Lady

Critchley, Julian

MacArthur, Ian

van Straubenzee, W. R.

Cunningham, Knox

McLaren, Martin

Walder, David

Curran, Charles

McMaster, Stanley R.

walker, Peter

d'Avigdor-Goldsmid, Sir Henry

Macpherson, Rt. Hn. Niall (Dumfries)

Wall, Patrick

Deedes, Rt. Hon. W. F.

Maddan, Martin

Ward, Dame Irene

Donaldson, Cmdr. C. E. M.

Marten, Nell

Webster, David

Doughty, Charles

Matthews, Gordon (Meriden)

Wells, John (Maidstone)

du Cann, Edward

Mawby, Ray

Whitelaw, William

Eden, John

Maxwell-Hyslop, R. J.

Wills, Sir Gerald (Bridgwater)

Emmett, Hon. Mrs. Evelyn

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

Wilson, Geoffrey (Truro)

Erroll, Rt. Hon. F. J.

Mills, Stratton

Woodnutt, Mark

Farey-Jones, F. W.

Miscampbell, Norman

Worsley, Marcus

Farr, John

Montgomery, Fergus

Finlay, Graeme

More, Jasper (Ludlow)

TELLERS FOR THE NOES:

Fraser, Ian (Plymouth, Sutton)

Neave, Airey

Mr. Chichester-Clark and

Gammans, Lady

Nicholls, Sir Harmar

Mr. Frank Pearson.

Amendments made: In page 2, line 27 after "apply", insert"(a)".
In line 29, leave out from "regulations" to "to" and insert:
"made by the Board of Trade under section 3 (1) (b); or
(b)".
In line 33, leave out "this subsection" and insert "paragraph (b)".—[Mr. Green.]
Mr. Green: I beg to move, in page 2, line 35, after "class", to insert:
"issued by a particular person".
In Standing Committee I referred to the fact that the Board of Trade would give a person permission to issue a single
1404
advertisement or a specified class of advertisement, which might be all the advertisements which the person issued. I went on to say that it was not thought that the Board's power would extend to giving a single permission relating to a class of advertisement put out by a number of people. It is certainly not intended that the Board of Trade should have this power.
The Amendment, by limiting the power to classes of advertisement issued by a particular person, makes the position clear. When it is necessary to allow the issue of a class of advertisement by a number of people, it can be done by making a regulation uder Clause 3 (1, b)

1405
which would be subject to Parliamentary procedure. I was hoping in Committee to be able to clarify my intentions in this way, and it is for this reason that I am moving the Amendment.
Mr. Mitchison: It would be almost, but not quite, as unreasonable to divide against this Amendment as it was to divide against our last one.
Amendment agreed to.

Clause 3.—(REGULATIONS OF BOARD OF TRADE AS TO ADVERTISEMENTS.)
Mr. Green: I beg to move, in page 3, line 19, to leave out from "descriptions" to the end of line 23.
Mr. Speaker: It would be convenient, I think, to discuss with this Amendment the Amendment to Clause 25. in page 19, line 15. at end insert:
(3) Regulations made under paragraph (b) of subsection (1) of section 3 may direct that all or any of the provisions of this Act which apply to a company in respect of or in consequence of the issue of an advertisement for deposits shall not apply to any company in respect of or in consequence of the issue of an advertisement (whether issued before or after the regulations come into force) of any class exempted by the regulations from section 2; and such regulations may include provision—

(a) for requiring any company which, by virtue of the regulations, is exempt from the requirement to deliver accounts under this Act, to deliver a notice to that effect to the Registrar and to the Board of Trade; and

(b) for applying subsection (4) of section 7 in relation to any such company which thereafter ceases to be so exempt.

Mr. Green: Yes, Mr. Speaker.
Clause 3 (I, b) provides for the exemption by regulations of those advertisements specified in the regulations from the general prohibition on the issue of advertisements contained in Clause 2. Clause 3 (2) gives the Board of Trade power to direct that certain provisions—the most important being those requiring the delivery of accounts—shall not apply in relation to the exempted advertisements; with the result that if a company issues such an advertisment it need not deliver accounts as a consequence of the issue of such advertisements.
It is, however, by no means certain on the present drafting of the Bill that the directions which may be given under Clause 3 (2) can be given in relation to
1406
advertisements issued before the regulations are made. The result may be that although the advertisements issued after the regulations were made may not attract delivery of accounts, those issued before may do so, notwithstanding the direction.
This is of particular importance when the Bill first becomes law, since there are a number of companies—for example, charitable companies—which are now issuing advertisements for deposits but which we do not want to be required to deliver accounts. Without these Amendments these companies might be required to deliver accounts as a consequence of their past advertisements, until they can terminate their liability to do so by giving necessary notices under Clause 7 (2) and by waiting at least three years. This would largely nullify the point of giving directions. The problem could also arise at any time when it was decided as a matter of policy that the issue of a particular kind of advertisement need no longer attract the accounting provisions of the Bill.
The main purpose of these Amendments is to make it clear that if a direction is given, advertisements falling within the exempted class, whether issued before or after the regulations are made, will not attract the provisions of the Bill requiring the delivery of the accounts. It is, therefore, essentially a drafting Amendment to make clear the intention which I. expressed in Committee.
Mr. Mitchison: This Amendment gives very wide powers to the Board of Trade. I understand the hon. Gentleman's reasons for it. I can only say to him that if I had rather more confidence either in the discretion or in the good intentions of the Board of Trade I should accept it with less reluctance than I do.
Amendment agreed to.

Clause 7.—(TERMINATION OF REQUIREMENTS AS TO PERIODICAL ACCOUNTS.)
Mr. Green: I beg to move, in page 7, line 1, to leave out from "given" to end of line 2 and to insert:
"to any person under subsection (3) shall be deemed to have been given to that person if sent to him by post at his last known address".
Mr. Speaker: I think that it might be convenient to consider with this Amendment the Amendment in page 11, line 6, to leave out "may be served by post" and to insert:
"shall be deemed to have been given to a person if sent to him by post at his last known address.".
The Economic Secretary to the Treasury (Mr. Edward du Cann): I am most grateful to you, Mr. Speaker, for that suggestion. This is very largely a technical matter, and I hope that the House will feel that both Amendments make very good sense.
The first refers to the notice that a company is required to give to its existing depositors and to new depositors if it has informed the registrar and the Board of Trade it has ceased to advertise for deposits in order to be free, in due course, from the obligation to deliver periodic accounts. Clause 7 is what I think was called in Committee the exit Clause. The second of the Amendments refers to the notices that a company is required to give or may elect to give to its depositors when it changes or intends to change the nature of its business.
I think that the purpose of Clause 12 will also be remembered by those on the Committee. Its insertion was very largely due to the expressed wish of hon. Members on both sides of the Committee that we should take account of that particular circumstance. As drafted, the Bill provides that the notices under Clause 7 may be given and served by post. The effect of these provisions—this really is the point—when read with Section 26 of the Interpretation Act, 1889, is, I am advised, that notices would prima facie fall to be treated as having arrived in the normal course of post, and if in fact a notice failed to reach a depositor because, for instance, he was no longer living at the address to which it had been sent, the company might be held to have failed to discharge its statutory duty imposed on the company by the Bill, and therefore to have committed a criminal offence.
I am sure that it will be the agreement of the House that this matter should be dealt with reasonably and sensibly. The drafting as it at present stands does not seem to give the kind of result which, I think, would be regarded in the view
1408
of the House as being fair. Therefore, I suggest that it is necessary for us to look at the matter in a practical fashion and endeavour to put it right. I should like to say a few words on that point.
Notices of the kind that I have described may have to be sent to a large number of persons, some of whom may not have been in touch with the company for some months. In these circumstances, the company would do all that would reasonably be required of it, the House may think, if it were required to send notices by post to the addresses last known to it. This will be the position if these two Amendments are accepted. I hope very much that they will have the approval of the House.
Amendment agreed to.

Clause 10.—(SPECIAL PROVISIONS AS TO NEWLY INCORPORATED COMPANIES.)
7.45 p.m.
Mr. Diamond: I beg to move, in page 8, line 40, at the end, to insert:
Provided that any advertisement, to which by virtue of this subsection section 5 (1) does not apply, shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement.
Mr. Deputy-Speaker (Sir Robert Grimston): I think that it might be convenient to discuss this Amendment with the Amendment in page 12, line 5, after "notice", insert:
"or with an undertaking required under section 10 (1)".
Mr. Diamond: I hope that we shall get the reciprocity which we naturally expect, having given the Government all their Amendments in such record succession, and that they will feel disposed to give us this small Amendment.
Clause 10 deals with what I might call the most sensitive part of the Bill. It deals with the problem of protecting proposed investors and proposed depositors at the point of time when a company, because it is a new company, has not had an opportunity of demonstrating its ability to carry on its business satisfactorily. By satisfactorily, I mean from the point of view of securing depositors. It is, therefore, right to concentrate on protecting depositors at that point of time.

1409
The Amendment is an attempt to protect depositors as best one can. The form in which the Bill is drawn provides protection inasmuch as a company seeking a deposit which cannot by virtue of its newness produce accounts, produces instead a prospectus, or statement in lieu of prospectus, thereby giving an indication to the public of the kind of thing that it is going to do and of its make-up, capital structure and its financial soundness.
Time moves on, however, and although a company might at the point of time at which it issues its prospectus coincide, as I am sure it would do, precisely with the details in that prospectus, and although, therefore, anybody putting up money on the basis of a prospectus at that time would have an opportunity of knowing exactly what he was doing, this would not apply to somebody who was putting up money at a later date, by which time the circumstances may have altered but not sufficient time may have elapsed to necessitate the production of accounts. It is, therefore, this interim period in particular with which one is anxious to deal.
This is not a new problem—indeed few problems are new. This is a problem which was examined in a similar situation by the Jenkins Committee at paragraph 240. The conclusion reached by the Committee in paragraph 252 (c) is that
"no allotment of securities offered to the public should be permitted after the expiry of three months from the date on which the prospectus is first issued."
The Committee was talking about shareholders and debenture holders, people who, as I have attempted to explain earlier, are not needing as much protection as a depositor.
The reasons given by the Committee appear in paragraph 240, the end of which states:
"we have been informed of cases in which securities for which such a quotation has not been sought have been offered to the public generally and have remained 'on tap' for an indefinite period in reliance on a prospectus containing information which may well have become obsolete or misleading. We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed."
1410
The circumstances in which the Committee was giving that advice were those of a company which does not have a quotation far the shares or debentures which are being subscribed.
As far as I am aware, no company has a quotation for its deposits. There is no market quotation for them. Therefore, we are in exactly parallel circumstances of a company, not having a market quotation, having issued a prospectus and people being invited to put up money on the basis of a prospectus which is correct at the time at which it speaks but which may cease to be correct for a later period.
The Jenkins Committee in its wisdom had no doubt whatever in advising on the length of period beyond which no subscriptions by way of shares or debentures should be accepted. The Committee's view was that the length of period should be three months. It took the view that one could not reliably allow a greater period than three months to elapse before checking the information to see that it was sufficiently accurate to justify a subscription by way of deposit.
My Amendment is more flexible than that. We say that the deposits so offered should not be accepted after the expiration of a specified period. We do not specify the period except to say that it should not exceed one year after the date of issue of the advertisement. That is a very flexible way of dealing with the matter.
We could have put down an Amendment suggesting three months, as the Jenkins Committee advised. I recognise that the advice of that Committee is not statute law. It is good advice, but the House has not yet had an opportunity of debating it nor the Government of letting us know their views about it. Nevertheless, it is clear from the evidence adduced to the Jenkins Committee that this is a difficult point. It is clear to anybody who is aware of the circumstances of the Bill and its provisions, and particularly to those of us who served in the Standing Committee, that this is the most difficult point at which to protect the depositor.
The Bill proceeds on the basis of supplying accounts. It supplies accounts so that a depositor will know, or be capable of finding out from those accounts, the strength of the company

1411
in which he proposes to deposit money. It is impossible to have such accounts for a new company. Therefore, one has to rely on something quite different—an honest bona fide estimate. Even an honest bona fide estimate, however, can be shown to be inaccurate after the passage of time in relation to subsequent circumstances.
Therefore, there must be a time limit to make the estimate a reliable guide to investment. I hope, therefore, that in these circumstances the Government will at long last accept an Amendment which is put forward, again from no partisan spirit but purely to strengthen the Bill.
Mr. du Cann: The hon. Member for Gloucester (Mr. Diamond) quite rightly described the position in relation to Clause 10, which permits a newly incorporated company, in the period of nine months following its incorporation, to advertise for deposits if, instead of delivering accounts, it delivers a prospectus or similar document. The reason for this provision is simply that the company would not be able to deliver accounts as it could not comprise a profit and loss account covering a period of six months.
We had substantial discussion of this situation during the Committee stage and it was refreshing to me, for various reasons which I need not go into now, to find that there was entire acceptance, on both sides of the Committee, of the point that it would be unreasonable to prohibit newly incorporated companies from engaging in business provided that they gave the appropriate information. We agreed also that the likelihood was that new companies would probably wish to give slightly more information than that which they might feel ordinarily obliged to provide had they been in business for some time. I am sure that all that is right and appropriate.
In Committee, the hon. Member for Gloucester made some of the points which he is now making, although his Amendment tonight raises a new point. The hon. Member has referred in particular to the Report of the Jenkins Committee and has made the point that the danger against which we wish to seek to protect depositors is that they should not make deposits on the basis of information which is out of date.
1412
I should like particularly to refer to the paragraph of the Jenkins Report to which the hon. Member alluded. He quoted the words of the fourth line from the end of paragraph 240:
"and have remained 'on tap' for an indefinite period".
Perhaps the House will be good enough to remember those words for a moment. The hon. Member then quoted the last two lines:
"We think this is unsatisfactory and suggest that a general time limit of, say, three months, should be imposed."
The hon. Member was good enough to say—indeed, he and I have mutually discussed and complained, if that is the right word, about this previously—that the House has not yet had an opportunity to discuss the Jenkins Report and express a view upon it, even if many of us in various ways accept different portions of the Report.
There are, however, two aspects of paragraph 240 of the Report to which I should like particularly to draw the hon. Member's attention. The first is that the Jenkins Committee's suggestion of a three-month period is in the nature of a suggestion—"of, say, three months". The Committee could, presumably, although I agree that it did not do so, equally as well have said "say, nine months". The Committee was not suggesting any fixed and definite period. It was drawing attention to the real evil here, and that is that securities—and I would ask the House to be good enough to remember these words—
"have remained 'on tap' for an indefinite period".
8.0 p.m.
That is not the situation here. We have, I suppose, to judge, first, whether or not three months is an appropriate length of time. Second, we must recognise, and recognise at once, that the situation which we are discussing in relation to Clause 10 is not on all-fours with that paragraph, because securities in the sense of deposits could not remain open to the public for an indefinite period, for there must be accounts within the period of nine months. I agree that it is a matter of judgment whether one chooses six or whether one chooses nine or whether one chooses three months. We have thought it right—and the Board of Trade does have, I think it is fair to

1413
say, great experience in these matters—to take this period of nine months, and regard it as being the most practicable period one can arrive at. But I hasten to reassure the hon. Gentleman that there is no question of securities being available for an indefinite period. I hope that he will feel that goes some way towards answering his point.
The hon. Gentleman has fully described the effect of his Amendment and I shall not go over it again in detail, but I should like to say that, the object of the Amendment being, as I understand it, to try to ensure that a person does not make a deposit on the basis of information contained in a prospectus which is out of date, I have every sympathy with that object. I think it important. On the other hand, one cannot help feeling that perhaps it is true to say that cases where this is likely to apply would on the whole be exceptional. I want him to understand that I take his point seriously and that I am endeavouring to establish the fact that this would be the remarkable rather than the usual case.
Having said that I express sympathy, I suppose that the hon. Gentleman will quite rightly want to know what I am prepared to do about it, to what extent I am prepared to give practical expression to my sympathy. He will recall that during the discussions we had in Committee I promised to look into the three months point which was raised then. That we have done, and, as I have already indicated, we came to the conclusion that the way the Bill was drafted was just about right. I hope the hon. Gentleman will accept that that was the result of a substantial amount of thought. I want to go on to say to him what it is we are endeavouring to do to achieve his objective in the Bill.
I come back to what I was talking about earlier. Clause 10 (3, a) requires any newly incorporated company which has issued an advertisement on the basis of a prospectus to deliver audited accounts within nine months after the date of its incorporation. In other words, we are saying accounts will be available at the earliest possible moment. So, therefore, we are ensuring that this information will be on the file and will he available—I will say more about it—as soon as it is practicable to do that.
1414
We are shortly to discuss Amendments standing in the name of my hon. Friend the Minister of State to Clause 11. I do not wish to make reference to those in detail at this moment, but the House may remember that in Committee we had substantial discussion at the option of my hon. Friend the Member for Torquay (Mr. F. M. Bennett), whose intervention on this point was so valuable, and at the option of the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison), and it was suggested that it was just not good enough to provide that the accounts should be made available to those who actually made deposits, but they should be made available to all those proposing to make deposits with the company. It is not practicable for everyone to come to London and go to the Board of Trade to see the registrations and so on.
I suggest that the situation is completely altered by these Amendments, for the prospective depositor—if I may use that phrase, although we are not using that wording, as my hon. Friend may have noticed, and for good reason—now can get up-to-date information which he was not in a position to do before.
It is perfectly true that that leaves us with the position—I make a joke of it but I want the hon. Gentleman to understand that I follow his point—of, say, a chap who goes into a fish and chip shop and finds his fish wrapped up in a very old newspaper, a year old, let us say—I think this is the kind of case the hon. Gentleman had in mind—with a coupon in it, and he fills it in and makes his deposit on the basis of information given in that way. Does the hon. Gentleman wish to make a point?
Mr. H. Lever: I was merely saying that to have that experience one would not necessarily have to have a cutting from a newspaper in a fish and chip shop. One can get it from the current issues in the Members' Tea Room.
Mr. du Cann: I really cannot accept that from the hon. Gentleman the Member for Manchester, Cheetham (Mr. H. Lever) because I go into the Tea Room—indeed, I was there not very long ago for a quick moment—and I found the newspapers there very up to date. Indeed, they were what I may call "railroading" along in the sense of being up to date.

1415
However, that is another subject and I had better not go into that now.
The point I was making particularly is that this, of course, could happen, not only in relation to newly incorporated companies but in relation to advertisements put in by companies which have been established for a very long time. The logic, therefore, is that if one wants to try to do something about this in one case one has to do something about it in the other case also. This was not suggested by the hon. Gentleman. I understood that his interest was peculiarly directed towards newly incorporated companies. I agree that they are especially important, but I cannot help feeling that in general it is thoroughly unlikely that one would fill up a coupon in the way which is suggested without making some positive attempt to get up-to-date information. One cannot force that now. There is nothing in the Bill which does that and there is nothing which could be in the Bill to do that.
During the whole of these debates, on Second Reading, in Committee, and now—though not to the same extent now—we have made the point that investors must protect their own interests by endeavouring not only to get advice, which was one point we talked on particularly, but to get the latest information, and we should do our very utmost to see that that information is available for them. I hope, therefore, that the hon. Gentleman may feel that we are endeavouring to meet his point to the best of our ability.
Mr. Diamond: Perhaps I misunderstood the position, but is it not that accounts to be rendered are to be rendered within nine months of incorporation of the company? It will take, therefore, some little time for those accounts to circulate, shall I say, before they get to everybody who may want to see them. Perhaps there will be another short period. The Amendment I propose refers to a maximum of 12 months. What the hon. Gentleman has referred to is accounts available some time after nine months. We need not argue about the difference between nine months plus and 12 months, but we are still left with the new company about which no information is available till its first statement the new company about which no information available for nine months plus.
Mr. du Cann: Yes, that is perfectly true, but the accounts of any company might necessarily be a little out of date. One cannot get them as hot off the presses as all that.
Mr. Diamond: Why not?
Mr. du Cann: I would suggest that in the case of a newly incorporated company it is unlikely to have transacted any great volume of business and the accounts will be available after the nine months' period and perhaps before that. Perhaps therefore, the difficulty is not as great as imagined. What is abundantly clear, I think—that is why I made the point at the beginning of my remarks on the Amendment—is that the newly incorporated company would be anxious to get its accounts out as early as possible in order to indicate to the public its creditworthiness and general stature.
Another difficulty about this Amendment, I feel, is that it is probably impossible to police. That I find somewhat unsatisfactory. I do not think that it would be possible to check exactly what was happening in the way desired by the hon. Gentleman.
Mr. J. T. Price: The Treasury could do it.
Mr. du Calm: I hope that the hon. Gentleman the Member for Westhoughton (Mr. J. T. Price), who, I know, has a great regard for the Treasury, has an equal regard for the Board of Trade, and he will appreciate that policing this is a Board of Trade matter, not a Treasury matter. If we were to let the Inland Revenue and the Customs and Excise loose on the whole problem perhaps they might be successful, but I doubt it very much.
I see the point which the hon. Gentleman is making. It has relevance even though it is a little exceptional. I do not think that the Jenkins Report is quite a parallel, for the reasons which I have endeavoured to explain. I hope that if the House agrees that it would be appropriate to accept the Amendments to Clause 11 the hon. Gentleman and others interested in this point will feel that we have done our best to meet them in another way. I am certainly willing to say that we will consider very carefully everything that the hon. Gentleman

1417
has said, but my first feeling is that we are dealing with the situation, and dealing with it satisfactorily.
8.15 p.m.
Mr. J. T. Price: The Economic Secretary has just made an interesting and good-natured statement, after his usual fashion, but he has not quite lived up to his reputation for either lucidity or logicality in the arguments that he has put to us.
It has been briefly and fairly argued by my hon. Friend the Member for Gloucester (Mr. Diamond), without unduly punishing the question, that this period of grace ought to be admitted now in the Bill and that deposits should not be accepted after the expiration of a reasonable period, the period being left in doubt and to be defined later.
The difference in principle as between the Minister's attitude and ours is as follows. Companies registered under the Companies Act which are seeking to raise new equity capitals, debentures, or some other form of capital are under a statutory obligation to provide a prospectus in great detail about their prospective operations, the amount of capital and the people concerned with the company, so that those who are asked to entrust money to them shall have the fullest information before doing so.
We are not dealing with the same proposition here. I have to keep returning to the point—not, I hope, with any tedious repetition—that this is a Bill to protect depositors who are being invited to deposit money on loan with companies which advertise for money on loan, whether merchant bankers, hire-purchase companies, or all the other categories which are seeking to get their hands into the pockets of the public for their own purposes. I am not saying that these are illegitimate purposes. Many are perfectly reputable and legitimate. Nevertheless, many companies are competing in the market for the money of people who have surplus funds to lend.
In dealing with this, we are seeking to put restraint upon the types of blandishment and advertisement by which the public are being induced to part with money to companies which are not worthy of their confidence. This is a further sanction that we suggest to deal specific-
1418
ally with new companies, by which I mean companies which have not so far established themselves as to comply with the requirement in another part of the Bill that they should deposit their accounts with the Board of Trade in the usual way.
Demonstrably, a person who is prepared to lend substantial sums of money to a new company when he sees an advertisement in a newspaper is not in the same position of security as one who is lending a similar sum of money to an old-established company whose accounts are well known and whose operations are secure. Therefore, it is inadmissible for the Economic Secretary to argue that the provision in relation to the advertisements provides also that accounts shall be produced and that at some time in the future, after perhaps six or nine months, the accounts of the new company will be available for inspection by the person who has lent money. What good is that information after the person has made his investment? All the restrictive provisions and sanctions in our present legislation are designed to protect people so that they may have full information before they lend money to public companies which are seeking to raise equity and other forms of capital.
The raising of loans is not in the same category. If the case was strong for requiring under the Companies Act that the fullest information should be provided by new companies, the case is even stronger for greater safeguards to be provided where people are lending money on deposit and are not covered by the safeguards of the Companies Act. This is a serious, valid and major point which my hon. Friend, not wishing to weary the House, perhaps did not labour as much as he could have done.
Where a company is starting in business with purely nominal capital to satisfy the requirements of the Companies Act, but it is seeking to raise a major portion of its future resources by loans from a credulous public very often too ready to pour money into all kinds of dubious concerns which are capable of drafting seductive advertisements, and where the Bill gives no adequate protection, I seriously submit to hon. Members opposite that we are entitled to argue that the paragraphs in the Jenkins Report which have been quoted by my hon. Friend

1419
the Member for Gloucester in support of the Amendment are particularly valid when they are tied to the special conditions of depositors who have not the protection of the Companies Act, in another sense.
The Minister, whom I followed with the closest attention, conveyed the impression that the advertisements of hire-purchase and merchant banking concerns to the public are published prospectuses in the same way as advertisements for raising equity capital under the Companies Act. That is not the case. Consequently, I believe that we have made the case that there should be some added safeguards in this legislation so that advertisements are not allowed to run for an indefinite period with the money rolling in until accounts are produced in six, nine or twelve months' or two years' time.
I reinforce what I have said in general principle by a recital of what occurred in the case of the MIAS group of companies in Manchester, which defrauded the public of what is known to be about £750,000 and was probably a great deal more. In operations over nearly four years it never published a single account of any kind.
The group was in breach of the Companies Act. It published no accounts and I see no sanction in the Bill which would improve the situation with regard to the publishing of accounts. The intention of the Bill is proclaimed to be that of protecting investors against exploitation by crooked people. If investors are to lend money in response to advertisements, they should have the fullest information and there should be a time limit to the period of advertisement.
Mr. du Cann: I apologise if my explanation was not as lucid as it should have been. I drew the attention of the House to Clause 10 (3, a), which indicates that a balance sheet must be provided. The hon. Gentleman has quoted the case of the MIAS Group. Had this Bill been in operation, that group would have been obliged to lodge the accounts. I only answer that particular point. It is clear that if this Bill had been in operation then there might not have been the same trouble.
Mr. Price: I quite agree, and I am obliged to the hon. Gentleman for bringing my attention to the point. I had my thumb on that Clause. I agree that in future there will be this safeguard as far as established companies are concerned, but there will be none for those lending money to new companies unless we amend the Bill. If I spoke much longer I do not think that I could make the point clearer. It is a matter of judgment. We want additional safeguards.
Nevertheless, I have a little doubt in my mind even about the form of words used in this Amendment. It says:
"… shall require deposits offered in response to the advertisement to be accompanied by a statement that they are so offered and shall include an undertaking by the company that no deposit so offered will be accepted after the expiration of a specified period not exceeding one year after the date of issue of the advertisement."
What may be legitimately criticised in that form of words is that new companies seeking to get a footing in the money market by raising public deposits on a large scale often enter into lengthy periods of extensive advertising in tile provincial press. A company may have advertisements published weekly in a newspaper for six months or more. One may ask how long the period of advertisement should run. Will this cover a series of advertisements? One cannot assume that there will only be one advertisement. There may be a whole series of them.
We are on a very fair point here. We spent much time upstairs arguing the technicalities of the Bill and we have had few concessions from the Government. There are times when one feels that the diligence of hon. Members who have applied themselves to this Bill in a non-party manner should be more adequately recognised. This is a fair proposal, which would strengthen the Bill, and I hope that the Government will yet see fit to accept the Amendment.
Mr. H. Lever: The Economic Secretary has been exceedingly lucid and courteous throughout, running in harness with the Minister of State, whom we also respect for his consideration. I understand that if a new company solicits deposits, for a period of at least nine months it is not obliged to deliver its accounts. During that period it can go on soliciting deposits from the

1421
public. I absolutely agree with the general tenor of what was said by my hon. Friend the Member for Westhoughton (Mr. J. T. Price).
The most devastating criticism of the whole Bill is that it is based upon what we believe to be the naïve view that, if we give would-be depositors proper information, that constitutes a safeguard. Indeed, the total safeguard offered by the Bill is that depositors have balance sheet information available. Whether they use it or not is a matter for discussion on Third Reading. The value of it can be disputed.
The whole core of the Government's case is that they are protecting depositors by ensuring that they get adequate information. That is certainly the case, so long as it is not a new company. If a new company is involved, the Bill will not apply practically for nine months and the depositors in that period will be unprotected. The Government are relying on information, claiming that information is the only real protection that we can give. How can they allow companies to solicit deposits from the public before they are in a position to give that information?
When the Minister says that it is a new company, a child, as it were, in these matters, and cannot have a balance sheet until it has traded for a year and hence cannot give the information which the older companies are forced by the Bill to give, the answer is that if the Government's view is right and has any substance—that the public can be protected by enforcing this flow of balance sheet information—no company should be allowed to solicit deposits from the public until it is in a position to give the public the kind of assurance upon which the Government rely for the protection of the public.
It is not I who say that the balance sheet is an adequate protection. For reasons which I hope to elaborate on Third Reading, I do not think that it is. It is the Government who have said that this is the great protection for the public and the only way in which depositors can be protected. In those circumstances, the Government dare not hold the view they hold and allow companies to go before the public and take
1422
its money without being in a position to give this protection of balance sheet information.
What my hon. and learned Friend the Member for Kettering (Mr. Mitchison) wants to do is to tighten that a little. If there is any criticism of my hon. and learned Friend's proposals it is that they are too modest. He should have demanded that the new company not yet in a position to provide the safeguard of a balance sheet information ought not to solicit deposits from the public. Having made my point that the Government, having relied on information as the great weapon for the protection of the public, are the last people who should defend the position which allows new corn panics, because they are not in a position to give this information, to trade in this way—
Mr. Diamond: In support of what my hon. Friend is saying, may I say that it is my recollection—and I go only on my recollection—that the Finance Houses Association accepts this limitation and does not allow its members to seek deposits, no matter how substantial their capital, until they have been trading for a substantial period.
Mr. Lever: I am greatly obliged for what, as is usual from my hon. Friend, is a helpful intervention. I would have said that the minimum period of probation, as it were, before companies should be allowed to solicit deposits from the public would be one which enabled them to show a year's trading without having so solicited.
It would not be out of point to say a sentence or two about the dominant neurosis affecting the Board of Trade and, alas, by affection, the Treasury, and which has made the Bill as bad as it is. I will come to the other neurosis, the neurotic obsessions about appearing to be the endorser of companies seeking deposits from the public, later. The second obsession of the Treasury is that of bogus democracy, that any company, big or small, old-established or new-established, should be entitled freely to enter up soliciting deposits from the public.
I have often been chastised by my democratic hon. Friend the Member for Westhoughton for saying that this is not a business for small companies if we value the rights of the public and want

1423
the public to be able to avoid having deposits at risk. It is not a lack of democratic sympathy with my hon. Friend's views that makes me insist that they should be substantial companies which are taking or soliciting deposits from the public. The reason is not that I love rich companies and hate poor ones, but that rich companies are better receptacles for deposits from the public and more appropriate persons to canvas for deposits than are small, insubstantial companies. If we yield to spurious democracy and say that small companies should be allowed to compete with large companies for deposits from the public, the unsophisticated depositor runs the risk of being robbed because of the insolvency of the small company.
For these reasons, apart from the personal ones, I hope that my hon. and learned Friend will press this matter to a Division. I hope that he will not yield to the blandishments of the Minister. The Minister was exceedingly lucid, but he took up an untenable position.
8.30 p.m.
Mr. Mitchison: The hon. Gentleman began by assuring us that he would think this matter over, that he would give it careful consideration and that we could rely on him giving special attention to it. I would have found that a little more convincing if I had not happened to look at what occurred in Committee. This point, which is very short and limited, was made quite clearly by my hon. Friend the Member for Gloucester (Mr. Diamond) in Committee. I have no fault to find with the hon. Gentleman's courtesy, which is impeccable, but in reply to my hon. Friend he said:
"I have listened with very great interest to what has been said both by the hon. and learned Member for Kettering (Mr. Mitchison) and the hon. Member for Gloucester (Mr. Diamond). I understood that they both asked me to pay attention to these points and to have a very good look at them. I am certainly most willing to do that, especially at the latter point which, I am bound to say, had not occurred to me. Certainly I can give the Committee that assurance, and I do so willingly."—[OFFICIAL REPORT, Standing Committee A, 14th February, 1963; c. 409.]
The point in question which had not occurred to the hon. Gentleman, and to which he was going to devote particular attention, is the point that we are now considering.
Mr. du Cann: With respect to the hon. and learned Member, I think that he missed the part of my speech this evening in which I dealt with this point. I said that I remembered very well this earlier Committee discussion. The point in this Amendment is slightly different from the point we discussed in Committee. The point we discussed then was whether we should narrow the period from six months to three. We had considered that and thought that we had the matter right.
Mr. Mitchison: The hon. Gentleman's recollection may be very clear, but I have the Committee proceedings before me, and what my hon. Friend was referring to was the recommendation of the Jenkins Committee, which he quoted again today, under paragraph 252 (c). The question was the stale advertisement or the stale prospectus. This is the point that was under discussion there, and is the point raised by this Amendment. Though it is possible that the discussion has gone on to other matters—all, of course, within the rules of order—this is the substantial point, and, with respect to the hon. Gentleman, is exactly the point that my hon. Friend raised, in exactly the same way and on exactly the same grounds, in Committee, and we are not content with the further consideration which the matter ought to have received, and no doubt did receive, by the hon. Gentleman at the time.
I go from that to the merits of this matter, and this is a very narrow point. It relates to a small minority of cases. It may well be that the Amendment is, or is not, properly drafted, and that it ought to cover rather more or rather less. I am not concerned about that. What I am concerned about is the obvious intention of the Amendment, which is to carry out in this respect the kind of matter which the Jenkins Committee recommended in a slightly different context.
If the hon. Gentleman said that a year was too long, or that there ought to be a further definition of what is meant in this context by the issue of an advertisement, or anything of that sort, I should not have quarrelled with him, provided he had accepted the matter in principle. But when we came to the principle of the matter, all he said was, in effect, that there was no need to bother

1425
too much about the advertisements because the information would be available in the form of accounts.
I do not know how often that has been said by the Government. I do not know why they put in a Clause about advertisements. That appears to be the foundation of the Bill, and yet whenever they are asked to do anything about advertisements they hop rapidly from one foot to the other and say that the advertisement may not be much good but that it will be all right by reason of the accounts. How many times have we had to say that the unsophisticated depositor cannot be expected to see the faults of advertisements—which are what he acts on—by looking at accounts which he may not have asked for and will not understand when he sees them? This is such a silly excuse that I have become sick of hearing it again and again.
The Government must know that all this business about the protection of depositors is pretty illusory, and that at the end of the day what will be done by the Bill is very small beer. But when we make small suggestions as to what should be done, the only answer the Government have is the one which
they have put forward time after time. People can say what they like. They can say, "This Amendment is reasonable," and "That Amendment is not reasonable", but I have never yet met a Government that turned down every Amendment with such insignificant and wholly irrelevant arguments as those which have been put forward from time to time today.
It makes one wonder what they think discussions in Committee and on Report are for. What purpose do they think a legitimate and hard-working Opposition serves in matters of this kind? We could have been abusive about the Bill and criticised it much more than we have done, but at a very early stage we said that we would do our best to help the Government put some teeth into the thing. This is a very small tooth. It will apply in very few cases. It has been turned down on grounds which appear to me to be hopelessly inadequate. Therefore, we shall divide the Committee.
Question put, That those words be there inserted in the Bill:—
The House divided: Ayes 119. Noes 155.

Division No. 83.]

AYES

[8.37 p.m.

Abse, Leo

Fraser, Thomas (Hamilton)

McKay, John (Wallsend)

Ainsley, William

Galpern, Sir Myer

Mackie, John (Enfield, East)

Allaun, Frank (Salford, E.)

George, Lady MeganLloyd (Crmrthn)

Mallalieu, J.P.w. (Huddersfield, E.)

Allen, Scholefield (Crewe)

Gourlay, Harry

Manuel, Archie

Awbery, Stan (Bristol Central)

Griffiths, David (Rother Valley)

Mapp, Charles

Baxter, William (Stirlingshire, w.)

Grimond, Rt. Hon. J.

Mason, Roy

Beaney, Alan

Hamilton, William (West Fife)

Millan, Bruce

Bennett, J. (Glasgow, Bridgeton)

Hannan, William

Milne, Edward

Blackburn, F.

Hayman, F. H.

Mitchtson, G. R.

Blyton, William

Herbison, Miss Margaret

Morris, John

Boardman, H.

Hill, J. (Midlothian)

Oliver, G. H.

Bowden, Rt. Hit. H. W. (Leics, S.w.)

Hilton, A. V.

Parker, John

Bray, Dr. Jeremy

Holman, Percy

Pavitt, Laurence

Brockway, A. Fenner

Holt, Arthur

Pearson, Arthur (Pontypridd)

Broughton, Dr. A. D. D.

Houghton, Douglas

Pentland, Norman

Butler, Herbert (Hackney, C.)

Hoy, James H.

Price, J. T. (Westhoughton)

Carmichael, Neil

Hughes, Cledwyn (Anglesey)

Probert, Arthur

Castle, Mrs. Barbara

Hunter, A. E.

Redhead, E. C.

Cliffe, Michael

Hynd, H. (Accrington)

Rhodes, H.

Collick, Percy

Hynd, John (Attercliffe)

Ross, William

Corbet, Mrs. Freda

Irving, Sydney (Dartford)

Short, Edward

Craddock, George (Bradford, S.)

Johnson, Carol (Lewisham, S.)

Skeffington, Arthur

Dalyell, Tam

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

Slater, Joseph (Sedgefield)

Davies, S. O. (Merthyr)

Jones, Dan (Burnley)

Small, William

Jones, J. Idwal (Wrexham)

Smith, Ellis (Stoke, S.)

Delargy, Hugh

Kelley, Richard

Sorensen, R. W.

Dempsey, James

Key, Rt. Hon. C. W.

Soskice, Rt. Hon. Sir Frank

Diamond, John

Lawson, George

Spriggs, Leslie

Dodds, Norman

Ledger, Ron

Stewart, Michael (Fulham)

Duffy, A. E. P.

Lever, Harold (Cheatham)

Stonehouse, John

Ede, Bt. Hon. C.

Lewis, Arthur (West Ham, N.)

Stones, William

Edwards, Rt. Hon. Ness (Caerphilly)

Lubbock, Eric

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

Edwards, Robert (Bilston)

Mabon, Dr. J. Dickson

Symonds, J. B,

Finch, Harold

McCann, John

Taylor, Bernard (Mansfield)

Fitch, Alan

MacColl, James

Thompson, Dr. Alan (Dunfermllne)

Fletcher, Erie

MacDermot, Niall

Thornton, Ernest

Foot, Dingle (Ipswich)

McInnes, James

Wade, Donald

Wainwright, Edwin

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

Zilliacus, K.

Watkins, Tudor

Woodburn, Rt. Hon. A.

Wilkins, W. A.

Woof, Robert

TELLERS FOR THE AYES:

Williams, W. R. (Openshaw)

Yates, Victor (Ladywood)

Mr. Ifor Davies and Mr. Whitlock.

NOES

Agnew, Sir Peter

Gower, Raymond

Noble, Rt. Hon. Michael

Aitken, W. T.

Green, Alan

Oakshott, Sir Hendrie

Allason, James

Gresham Cooke, R.

Osborne, Sir Cyril (Louth)

Ashton, Sir Hubert

Grosvenor, Lt.-Col. R. G.

Page, Graham (Crosby)

Atkins, Humphrey

Gurden, Harold

Pannell, Norman (Kirkdale)

Awdry, Daniel (Chippenham)

Hall, John (Wycombe)

Partridge, E.

Balniel, Lord

Hamilton, Michael (Wellingborough)

Pearson, Frank (Clitheroe)

Barber, Anthony

Harrison, Col. Sir Harwood (Eye)

Peel, John

Barter, John

Harvey, John (Walthamstow, E.)

Perclval, Ian

Batsford, Brian

Hastings, Stephen

Pickthorn, Sir Kenneth

Barter, Sir Beverley (Southgate)

Hay, John

Pott, Perclvall

Bell, Ronald

Heald, Rt. Hon. Sir Lionel

Prior, J. M. L.

Berkeley, Humphry

Henderson, John (Cathcart)

Proudfoot, Wilfred

Biffen, John

Hendry, Forbes

Ramsden, James

Bingham, R. M.

Hiley, Joseph

Rawlinson, Sir Peter

Bishop, F. P.

Hill, Mrs. Eveline (Wythenshawe)

Redmayne, Rt. Hon. Martin

Black, Sir Cyril

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

Renton, Rt. Hon. David

Bourne-Arton, A.

Hirst, Geoffrey

Ridley, Hon. Nicholas

Box, Donald

Holland, Philip

Ropner, Col. Sir Leonard

Boyd-Carpenter, Rt. Hon. John

Hornsby-Smith, Rt. Hon. Dame P.

Russell, Ronald

Braine, Bernard

Howard, John (Southampton, Test)

Sharples, Richard

Brown, Alan (Tottenham)

Hughes-Young, Michael

Shaw, M.

Buck, Antony

Irvine, Bryant Godman (Rye)

Sheet, T. H. H.

Bullard, Denys

Jennings, J. C.

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

Campbell, Gordon (Moray & Nairn)

Johnson, Dr. Donald (Carlisle)

smithers, Peter

Channon, H. P. G.

Johnson, Eric (Blackley)

Speir, Rupert

Chataway, Christopher

Johnson Smith, Geoffrey

Steward, Harold (Stockport, S.)

Chichester-Clark, R.

Jones, Arthur (Northants, S.)

Stodart, J. A.

Clark William (Nottingham, S.)

Kerans, Cdr. J. S.

Studholme, Sir Henry

Clarke, Brig. Terence (Portsmth, W.)

Langford-Holt, Sir John

Summers, Sir Spencer

Cleaver, Leonard

Leburn, Gilmour

Taylor, Sir Charles (Eastbourne)

Legge-Bourke, Sir Harry

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

Cooper, A E.

Lewis, Kenneth (Rutland)

Teeling, Sir William

cordeaux, Lt.-col. J. K.

Lilley, F. J. P.

Thomas, Sir Leslie (Canterbury)

Corfield, F. V.

Linstead, Sir Hugh

Touche, Rt. Hon. Sir Gordon

Craddock, Sir Berestord (Spelthorne)

Litchfield, Capt. John

Turner, Colin

Crawley, Aidan

Lucas-Tooth, Sir Hugh

Turton, Rt. Hon. R. H.

Critchley, Julian

McLaren, Martin

Tweedsmuir, Lady

Cunningham, Knox

Maclay, Rt. Hon. John

van Straubenzee, W. R.

Curran, Charles

McMaster, Stanley R.

Walder, David

d'Avigdor-Goldsmid, Sir Henry

Macpherson, Rt. Hn. Niall (Dumfries)

Walker-Smith, Rt. Hon. Sir Derek

Deedes, Rt. Hon. w. F.

Maddan, Martin

Wall, Patrick

Donaldson, Cmdr. G. E. M.

Marten Neil

Ward, Dame Irene

du Cann, Edward

Matthews, Gordon (Meriden)

Webster, David

Emmet, Hon. Mrs. Evelyn

Mawby, Ray

Wells, John (Maidstone)

Erroll, Rt. Hon. F. J.

Maxwell-Hyslop, R. J.

Whitelaw, William

Farey-Jones, F. W.

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

Wills, Sir Gerald (Bridgwater)

Farr, John

Mills, Stratton

Wilson, Geoffrey (Truro)

Finlay, Graeme

Miscampbell, Norman

Woodnutt, Mark

Fletcher-Cooke, Charles

Montgomery, Fergus

Worsley, Marcus

Gammans, Lady

More, Jasper (Ludlow)

Gilmour, Sir John (East Fife)

Neave, Airey

TELLERS FOR THE NOES:

Goodhart, Philip

Nicholson, Sir Godfrey

Mr. Ian Fraser and Mr. MacArthur.

Clause 11.—(accounts to be supplied to depositors.)
Mr. Deputy-Speaker: With this Amendment can be discussed the following three Government Amendments.
Mr. du Cann: I think that would be most convenient, Mr. Deputy-Speaker. In spite of the battering I received in our last discussion, I hope the House will
1428
feel that we are doing what we can to meet some of the views which were expressed in Committee both by my hon. Friend the Member for Torquay (Mr. F. M. Bennett)—who is temporarily absent from his place—and the hon. and learned Member for Kettering (Mr. Mitchison), because these Amendments

1429
are tabled very largely in order to meet points which they raised at that stage.
Clause 11 as drafted requires a company which has advertised for deposits to furnish without charge a copy of its latest accounts to any person on receiving a deposit from him and to any existing depositor who asks for a copy. It was suggested by my hon. Friend the Member for Torquay and by the hon. and learned Member that we should broaden this provision and enable accounts to go to any prospective depositor who asked for them. We have considered this matter and these Amendments are tabled largely as a result of that consideration and to meet the Committee's wishes.
Their purpose, which involves a great deal of re-drafting of Clause 11, is principally to enable a "prospective depositor"—if I may use those words—to obtain a copy of the company's accounts subject—and this is most important—to the company being given protection against frivolous demands. There is, however, an additional purpose. Clause 11 as at present drafted provides that a person who becomes a depositor shall be furnished with a copy of the Company's accounts unless he has had a copy within 21 days. On consideration it was felt unreasonable to require a company to furnish a copy of its accounts to anyone who had at any time been furnished with a copy of the same accounts. The Amendments deal with that point. I ought to explain to my hon. Friend in particular why the words "prospective depositor" are not used. We were advised that they were insufficiently exact.
The first of the four Amendments extends the requirement to the furnishing of a copy of the latest accounts without charge to any person
"who signifies to the company that he requires a copy of the accounts or document with a view to becoming a depositor with the company."
I do not know whether it would be convenient to the House for me to say a word about the Amendment to the Amendment which is in the names of the hon. and learned Member for Kettering and the hon. Member for Gloucester (Mr. Diamond). If that is of assistance, I certainly will do so. I have made the point that we feel it important to protect the company against frivolous demands. I acknowledge at once that there is a plain limit to what one can do in practice. I dare say that the hon.
1430
and learned Member and his hon. Friend, and perhaps other hon. Members, might feel that their Amendment recognises the reality of the situation. All this would be logical and completely true, but on the other hand I hope that the hon. Members will not press that Amendment because we feel that there is some advantage in putting in the Bill specific words to indicate what we have in mind. If the House feels that we should give protection against frivolous demands, we should make that clear. That is why I have some doubts about the Amendment to the Amendment.
On the other hand—I hope that I can say this without getting out of order—I observed that a few days ago there was another Amendment on the Notice Paper which was very largely a drafting point. It contained a form of wards which perhaps might be acceptable if the hon. and learned Gentleman and his hon. Friend the Member for Gloucester care to bear that in mind for the future.
The effect of the Amendments in page 9, line 44, and in page 10, line 1, is to ensure that a company is not required to furnish more than one copy of any one set of accounts to any one person, no matter whether he is a person who has just made a deposit or is an existing depositor, or a prospective depositor. Again, I hope that the House will think this is sound.
The Amendment in page 10, line 4, permits a company to refuse to furnish a copy of the accounts to a person from whom it is not willing to receive a deposit. This sounds rather standoffish. It may be for the convenience of the House if I explain it. It will be recalled that in our earlier discussions we noticed in particular Clause 7, which is the exit Clause for any company which wishes not to go on taking deposits any longer and not to be bound by the Bill. The point here is to take account of that situation. I may be asked what is to happen if the company changes its mind. In the first instance, it must be reasonable that it should say, "No, we are not sending out accounts to any new depositors in the future, because we are not seeking any additional deposits".
Similarly, if the company were seeking deposits in the future, under the terms of the Bill it would be obliged to acknowledge the request of prospective depositors to send out accounts again. So there

1431
would be no possibility of any company using this provision to avoid the real provisions of the Bill.
With this explanation I hope that the House will think that these Amendments are reasonable and make good sense. I hope, too, that the House will think that they certainly comply with the undertaking that I gave to my hon. Friend the Member for Torquay and the hon. and learned Member for Kettering.
Mr. F. M. Bennett: As direct reference was made to the Amendment I moved in Committee containing the words "prospective purchaser", and as my hon. Friend the Economic Secretary has virtually asked whether these Amendments meet the undertaking given in Committee I should like to say at once that in my opinion they do.
I was rather amused to hear my hon. Friend, during his remarks, several times, both consciously and unconsciously, in seeking to give an explanation, use the words "prospective depositor", as he did in Committee and as he has done on at least five occasions since he began to speak this afternoon. If he thinks that, on the whole, his form of words is a better one, I am willing to accept it, although I, like him, am doubtful as to their validity, because I do not myself see how it can be proved whether or not a man has it in mind to become a depositor. Therefore, I do not think that this carries it any further than "prospective purchaser". Having said that, I think that the matter might be left where it is.
Mr. Mitchison: I must thank the hon. Gentleman for trying to give effect to what was said in Committee, but the Amendment standing in my name and that of my hon. Friend the Member for Gloucester (Mr. Diamond) to line 3, to leave out from "any" to the end of line 5 and to insert "person" would, I think, have shortened this considerably and I doubt if it would have made any difference. The Minister's Amendment, on the other hand, states that a
"… company … shall furnish a copy of the accounts or other document mentioned … to any depositor with the company and to any other person who signifies"—
Mr. Deputy-Speaker: Order. I am sorry to interrupt the hon. and learned Member, but if he is proposing to move
1432
his Amendment now I do not think that that could be done because it would arise at a later stage. I would have to dispose of the present Question first and then call the words to be added, when the hon. and learned Member could deal with his Amendment. I am merely trying to get the order clear.
Mr. Mitchison: I do not think that I quite appreciate that, Mr. Deputy-Speaker, for I merely want to point out why I find the Ministerial Amendment insufficient and why I would have preferred the amended version. I did not attempt to move my Amendment.
Mr. Deputy-Speaker: The point is that the hon. and learned Member cannot move his Amendment now. If he wishes to discuss it now and move it later formally, I would then put the Question. It is really a matter for the convenience of the House because I am sure that hon. Members would not wish to discuss the matter twice over.
Mr. Mitchison: I had not intended to move it and I do not think that I said that I was moving it. I was referring to it and I did not propose to do any more. I was saying that if our Amendment had been inserted it would have removed the words after "any" and the words about
"… any other person who signifies to the company that he requires a copy of the accounts or document with a view to becoming a depositor with the company."
It would simply have meant, those words having been removed, that it would be made obligatory to hand them over to anybody; any member of the public. I cannot see any real difference between "anybody" and "any member of the public". I must remind the Government about what was said in Committee. The Economic Secretary said:
"I cannot accept the wording of this Amendment"—
that was the Amendment in the name of his hon. Friend the Member for Torquay (Mr. F. M. Bennett)—
"because 'prospective depositor' is extraordinarily difficult to define, as I know my hon. Friends will understand."
I quite see the hon. Gentleman's point, but I am not quite certain that he has succeeded in defining it. After the Economic Secretary made those remarks I

1433
said "It means nothing", and the Minister went on to justify what we had said by saying:
"One never knows where money comes from if one is at the receiving end in these matters."
That is a rather nice picture.
"For that reason it is not possible to accept the Amendment as it stands.
My answer to the question, however, is a clear and unqualified. 'Yes'."
The Economic Secretary went on to say something in comment to my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), who was the Chairman of the Committee, following which I said:
"I entirely agree with what was said about a 'prospective depositor'. What it comes down to is that any member of the public should be entitled to these accounts, and no less than that. Perhaps I may take the Economic Secretary's nod as indicating his assent on this occasion."
This was followed by the Economic Secretary saying:
"The answer is most certainly, 'Yes'."—[OFFICIAL REPORT, Standing Committee A, 14th February. 1963; c. 435.]
As I understood it, what the Economic Secretary was assenting to was the proposition that any member of the public should be entitled to these accounts, and no less than that. That is why the Amendment in question has been tabled. With very great respect to the Government—who have not accepted any Amendment yet and who have obviously made up their minds that however meritorious an Amendment might be and whatever clear undertaking was given in pursuance of it, they will not accept anything—it is perfectly clear what was said in Committee on that occasion.
It is perfectly clear that the Economic Secretary assented to the proposition that any member of the public should be entitled to these accounts. And it is perfectly clear that there is no difference, in this context, between any member of the public and "any person" and I am surprised that the Amendment has not been accepted. When I say that I am surprised, I am not really certain that I am. I am, to be frank, shocked that it has not been accepted.
This is really too bad. The Amendment to which I am referring has been on the Notice Paper for some time and
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that is the reason why another Amendment was withdrawn and this one put in its place. I thought that by so doing I would meet exactly what was said in Committee. As I say, there is no distinction between "any member of the public" and "any person" and I must ask the Government to carry out the undertaking they gave in Committee.
Mr. du Cann: I can see the hon. and learned Member's point and I think, frankly, that there is a genuine misunderstanding. I see the words to which he has drawn my attention. I have not looked at them again in the sense in which he has now described them. What the hon. and learned Member says is absolutely true and I apologise if I have misled hint. I had in mind any member of the public intending to make a deposit and I thought that we were talking in this sense all the time.
Question, That the words proposed to be left out stand part of the Bill, put and negatived.
Question proposed, That the proposed words be there inserted in the Bill.
9.0 p.m.
Mr. Mitchison: If it was a misunderstanding one can say no more, but I call the Economic Secretary's attention to this once more.
I entirely agree with what was said about a prospective depositor. What it comes to is that any member of the public should be entitled to these accounts, and no less than that. The hon. Gentleman will at least agree that I gave those words their ordinary meaning. Those were the words to which he assented, and I am, surprised that the Amendment cannot be accepted. I do not think that this is a point of great importance. I do not propose to divide the House on it, but I protest about it, while accepting that there may have been a misunderstanding and that the Economic Secretary did not exactly mean what he said on that occasion. But what he said was pretty clear, and I think that it should be carried out.
I want to explain why I tabled my Amendment. To start with, the phrase is rather long and not at all clear. A person who requires a copy
"… with a view to becoming a depositor …"

1435
may, and really does, require a copy for a rather different reason—with a view to deciding whether he shall become a depositor. That was in my original Amendment, which I took away in order to substitute this, and the Government's form of words is unsatisfactory from that point of view.
There is the more important point of the position of the financial journalists. There is no doubt that the accounts to which all this refers will be available in London, but there are financial journalists in places other than London. The financial journalists are the people upon whom the Government rely to get over to the public the contents of the accounts, but a financial journalist who wrote from, say, Edinburgh or Liverpool asking for a copy of the accounts would be told, "You cannot have a copy because you are not a person who signifies to the company that you require a copy of the accounts or document with a view to becoming a depositor with the company. You are only a financial journalist, not a depositor. You must get Tom, Dick or Harry to write to us." That is a very strange position when the Government rely on these journalists to do the job of telling the public what the accounts are all about.
I find the Government's form of words quite mysterious. There is only one explanation, and it is that an hon. Member opposite put forward the phrase "prospective depositor". The Government seized on that, and tried to put it into what they thought was clearer language, and it was only a member of the poor, miserable Opposition who suggested that exactly the same result would be achieved—and a more advantageous result, I think—if "person" was used. The Government's Amendment is obscure, insufficient and muddled. I think that the Government would still be wise to accept my Amendment—which I have not yet moved—when it is reached.
Amendment proposed to the proposed Amendment: In line 3, leave out from "any" to end of line 5 and insert "person".—[Mr. Mitchison.]
Question, That the words proposed to be left out stand part of the proposed Amendment, put and agreed to.
Proposed words there inserted in the Bill.
Mr. Deputy-Speaker: I propose for the convenience of the House to put the next three Government Amendments together.
Mr. Diamond: On a point of order, Mr. Deputy Speaker. Am I right in assuming that I have lost my right to speak to the Government Amendment in page 10, line 4?
Mr. Deputy-Speaker: No. I will put the Question on that Amendment separately if the hon. Gentleman so desires.
Amendments made: In page 9, line 44, after "document", insert:
"under this section to any person to whom a copy of the accounts or document in question has already been furnished by the company and, without prejudice to the foregoing provision, a company shall not be required to furnish a copy of any accounts or other document".
In page 10, line 1, leave out from beginning to "or" in line 3.—[Mr. Green.]
Amendment proposed: In page 10, line 4, leave out from "person" to end of line 6 and insert:
"(not being a depositor with the company) to whom the company gives notice that it is unwilling to receive a deposit.".—[Mr. Green.]
Mr. Diamond: Although I listened carefully to what the Economic Secretary said, I was not absolutely happy with the situation. This is not a major point, it is only a question of interpretation upon which I should like some confirmation. I recognise that if these words referred exclusively to circumstances arising out of Clause 7, the exit Clause, there would be no problem, but I am not absolutely satisfied that they could refer only to those circumstances.
For example, I am not absolutely satisfied that a company could not give notice that it was unwilling to receive a deposit and then proceed to receive one—the same day or the following day, to make the point absolutely clear. This Amendment does not say that it shall not receive a deposit; it merely says that it shall give notice.
If I may start from the beginning. Clause 11 as amended would read:
"A company shall not be required to furnish a copy of any accounts or other documents … under subsection (2) to any person (not being

1437
a depositor with the company) to whom the company gives notice that it is unwilling to receive a deposit."
It does not say that it shall not have to supply accounts to any person from whom it does not accept a deposit.
I hope I am making the point clear. I am drawing attention to the fact that the only requirement apparently is to give notice, to write a letter saying, I am unwilling to receive a deposit."
The second question is, how long does that notice last? If one writes to a person saying, "You cannot have accounts because I am unwilling to accept a deposit", how long does that notice last? Can one say three months later, "I have given you notice, but you can give me a deposit and I accept it without giving you accounts"?
This is not a very substantial question. It is a question of interpreting the words as they have been used. If I have given the Economic Secretary time to consider the matter, I shall leave it at that and ask him to explain it and confirm that there is no need for the present anxiety which I feel about these words.
Mr. du Cann: In courtesy, the hon. Gentleman must have an answer, and I am sorry to tell him that I am not in a position to give him as full as answer as I would like to do. I agree that the point is not one of fundamental importance. I do not believe that it necessarily carries any serious connotations of the sort which might exist by inference in the suggestions that he made.
I hope the hon. Gentleman will find it acceptable if I say that, in order to give him a considered answer, I should like to consider the matter further. I will certainly get in touch with him and let him have that full and considered answer. I can only apologise for not giving it now, but I would rather give a proper answer at a later stage than a botched answer now.
Amendment agreed to.

Clause 12.—(CHANGE OF BUSINESS.)
Amendments made: In page 10, line 24, leave out subsection (3).—[Mr. Green.]
In page 11, line 6, leave out "may be served by post and insert:
"shall be deemed to have been given to a person if sent to him by post at his last known ac dress".—[Mr. Green.]

Clause 14.—(DEFAULT IN RESPECT OF ACCOUNTING OBLIGATIONS.)
Amendment made: In page 12, line 7, at end insert "or section 12 (2)".—[Mr. Green.]

Clause 16.—(WINDING-UP ON PETITION OF BOARD OF TRADE.)
Amendment made: In page 12, line 42, leave out from beginning to "if" in line 45 and insert:
"The court may, on a petition presented by the Board of Trade by virtue of this section, wind up under the Companies Act, 1948, any company to which section 6 applies, or to which that section has applied at any time during the six months preceding the presentation of the petition".—[Mr. Green.]

Clause 18.—(POWER OF BOARD TO REQUIRE PRODUCTION OF DOCUMENTS.)
Amendment made: In page 14, line 27, at end insert:
"or to which that section has applied at any time during the previous six months".—[Mr. Green.]

Clause 25.—(COMPANIES SUBJECT TO THIS ACT.)
Amendment made: In page 19, line 15, at end insert:
(3) Regulations made under paragraph (b) of subsection (1) of section 3 may direct that all or any of the provisions of this Act which apply to a company in respect of or in consequence of the issue of an advertisement for deposits shall not apply to any company in respect of or in consequence of the issue of an advertisement (whether issued before or after the regulations come into force) of any class exempted by the regulations from section 2; and such regulations may include provision—

(a) for requiring any company which, by virtue of the regulations, is exempt from the requirement to deliver accounts under this Act, to deliver a notice to that effect to the Registrar and to the Board of Trade; and

(b) for applying subsection (4) of section 7 in relation to any such company which thereafter ceases to be so exempt.—[Mr. Green.]

Motion made, and Question proposed, That the Bill be now read the Third time.
9.12 p.m.
Mr. Mitchison: I do not propose to take up more than a very few minutes of the time of the House. I think that

1439
I ought to explain why we find this Bill hopelessly insufficient, but why, on the other hand, we do not propose to divide against it on Third Reading.
The reason that we find it insufficient is substantially the one that was raised on one of the Amendments today. The scheme of the Bill is that there should be a very limited control of advertisements, which are the only things which go to the depositor and which are the instruments which invite him to make his deposit, and the Government place their reliance upon a number of documents, accounts and so forth which go to the Board of Trade, and to the Board of Trade only. I hope that we have made it perfectly clear in the course of discussions on the Bill—and, at least, I want to make it perfectly clear now—that we consider that wholly unsatisfactory.
A very great many depositors for whose protection the Bill is said to be brought forward will be people who cannot understand these complicated accounts without some interpretation, and the Government, in a passage that I have quoted already from the Economic Secretary's speech on Second Reading, made it perfectly clear that they appreciated the fact that they knew the need for expert evaluation of the papers that were sent to the Board of Trade and, in fact, that the Board of Trade made such an evaluation and, on it, decided on the financial soundness of the company concerned in issuing the advertisements.
With that admission before them, it is really extraordinary that the Government, having persistently declined to take any public responsibility whatever for a judgment which it was their public duty to make, should say, in effect, "We will make a judgment; we have to make it; we have to go on making it all the time as the position of the company is question changes, but on no account in a Bill for protecting depositors will we let the depositors know the result."
Indeed, this evening the Government rejected an Amendment which would have compelled them to do no more than this—prevent the issue of advertisements in cases where they were satisfied that a company was unsound financially. I say no more than that. If that is the kind of protection that is to be given to deposi-
1440
tors under the Bill, then I say that it is a wholly illusory protection and that the only object of the Bill must be to try to persuade depositors that they have effective protection when, in fact, the great majority of them have nothing of the sort.
I must admit that the Bill gives the Board of Trade a better insight into what these companies are doing, and that is a positive advantage. It is not a protection for depositors. This is an Information for the Board of Trade Bill. It is certainly nothing of the sort as regards depositors. It does so singularly little for them that it would not be worth having from their point of view, but it puts the Board of Trade in a position to see what is going on. Given the character of this business, that in itself is a good thing.
Moreover, it is clear what is happening in this field. It is exactly the same as happened in the history of the Companies Acts and, to take another quite different instance, in dealing with the duties and functions of trustees. Insufficient Bills are brought in one after another. Circumstances change and the provisions required become stiffer and more complicated. The statutes required become stiffer and more complicated and they are always a little behind the requirements of the time.
The Bill is a glaring instance. The type of company with which we are principally concerned is a comparatively new development, at least on this scale. It ought to have been given a great deal more attention and a great deal more protection for depositors than is given in the Bill. It is, therefore, quite unsatisfactory. It is, I suppose, a step in the right direction, but this step in particular reminds me of the centipede which never succeeded in getting far, because it could never decide which foot to put first. When there are a hundred of them, it is difficult. I do not know how many there are in this case, but this is a very small foot indeed.
I am certain that in future this kind of business will need a great deal more control and protection for those who put up deposits under it than a Tory Government will ever be willing to give. They are so desperately frightened of interfering with any financial business

1441
that they always err on the side of doing much too little or nothing at all. They might offend a big businessman, they might even offend a small businessman. What Tory Government would ever do that to protect a depositor?
9.18 p.m.
Sir H. d'Avigdor-Goldsmid: The hon. and learned Member for Kettering (Mr. Mitchison) said that the object of the Bill was not to protect depositors, but to give them the illusion of being protected. I hope that I do not misquote the hon. and learned Member, with whom I must take issue. Although he has taken an active part in our debates, it would seem that he has not altogether taken in what we have been discussing in one day on Second Reading, 12 days in Committee and, now, a whole day on Report.
Throughout the Committee stage we had infinite discussions, and one would have thought that all the borrowers on deposit were standing in the dock. When it came to the point, there was one group in the dock—the MIAS Group. The name of those people was repeated countless times. The hon. Member for West-houghton (Mr. J. T. Price) was chiefly interested. The fact was, however, that although we were making this exhaustive inquiry, that was the only example of major fraud on depositors that was brought up.
There is no point in my going into that, but I should like to draw attention to what my hon. Friend the Economic Secretary has just said—that that group would have been caught by the Bill, because it would not have been able to get away with not producing the accounts. Therefore, this protection for depositors given by this Bill is, in fact, a very real one. It is so real that I wonder very much indeed whether there would be any depositors at all if the hon. and learned Gentleman the Member for Kettering and his hon. Friends really got their way and introduced the number of teeth to which the hon. and learned Gentleman has so frequently referred.
After all, what is the essence of the business we are discussing? The loans made by the hire purchase and finance companies are not really suitable for banks because they are made for longer term than, and they are not as liquid as, normal bank loans are, and in order to
1442
find funds for this intensely useful business, this financing of small businesses and of hire purchase contracts of all sorts which appeal to the public, they offer them rates of interest higher than those which are charged by clearing banks. Let us honestly and sensibly think of this and realise that there is no doubt whatsoever that the public have gained infinitely more from the higher rates of interest, the rates they have received from responsible finance houses, than they have ever lost on the one or two scandals which there have been in the past.
I wonder very much indeed whether, in the light of the regulations we are introducing, those houses will be able to offer the same rates of interest in the future and the same advantages to their depositors as they have done up to now. This is not the time of night to make a long speech, but I must stand quite firm against what the hon. and learned Gentleman said. So far from depositors not being protected, it is really the deposit takers who now find themselves under very great pressure, very great and genuine pressure, as to the demands being made on them.
When I last addressed the Committee on the Bill, I said:
"This is a Bill for the protection of depositors. It is designed not only to protect their investments but to help them secure facilities for the favourable investment of their funds."—[OFFICIAL REPORT, Standing Committee A, 26th February, 1963; c. 565.]
I stand by those words, and I beg my hon. Friends who have conducted this Bill through the House with great tact, great politeness and a great deal of skill, to bear them well in mind.
If we cannot give lenders facilities, then there is no question that we have erected a cage which will be empty, because deposit takers will not be willing to take deposits, because of the onerous terms we are inflicting on them. I do not think that will arise, but I think that if we were to follow the advice which is so generously tendered to us by the hon. and learned Gentleman and his hon. Friends this Bill would become unnecessary, because deposits would cease.
9.24 p.m.
Mr. H. Lever: Certainly, there is more joy in heaven over one repentant sinner even on Third Reading than there is over ten righteous men. I must observe that

1443
so far as the hon. Baronet the Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) is concerned, his view of Government legislation, which has hardly altered throughout its progress, is noticeably more optimistic as the Bill proceeds. He started in very dismal strain on Second Reading. He drew attention, very rightly, to large-scale fraud in his own constituency precisely of the kind which aggravates and agitates hon. Members on this side of the House, and then he asked a simple question, would this Bill prevent it? He answered it in the negative.
The hon. Gentleman then proceeded to say that it would not do so because the fundamental defect in the Bill was its insisting on accounts, which are not by themselves a shield for the unsophisticated depositor. We now learn that he disagrees with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) on Third Reading and takes a much more optimistic view of the Bill. The Bill has not changed, but the hon. Baronet has changed.
I want to be fair because the hon. Baronet is a valued and respected Member of this House, but I think we can find a clue to this in his asides as to the damage done by the Bill to legitimate business and the people who take these deposits. He rightly said that for the most part they honour their obligations, and that there is only a tiny minority who do not.
The hon. Baronet is confusing two things. Assuredly, the Bill does a considerable amount of unnecessary harm to legitimate business. But that is not the same as saying that it protects depositors. The Government have proceeded with ever-increasing recklessness to hinder legitimate interests in the Bill as if that were triumphant evidence that they were protecting the victims of fraud. That is the reason why we can truthfully say that the Bill is at best a hindrance to the honest man and a mild inconvenience to crooks.
The Government, having seen that the Bill was inadequate when brought in, felt that it would be strengthened the more howls of indignation they were able to arouse by their indifference to normal processes of commerce and finance which minor Amendments to the Bill produced. Having pointed out how
1444
much inconvenience they were rendering the honest members of this community, they felt that we should be satisfied that that thereby did damage to the crooks, an inconsistency which seems to have escaped the hon. Member for Walsall, South, who appears now to be satisfied with a Bill which aroused so much discontent on Second Reading.
In the competition for suggestions for a new name for this misbegotten Bill, I should like to suggest the "Protection of the President of the Board of Trade Bill." What happened was that the President of the Board of Trade had to be protected from indignant back benchers on his own side of the House, and the Government had to produce some sort of charade of protecting depositors in a hurry. The result was the Bill. I am very anxious to say some very severe things about the Bill and what is in it. I am relieved that the rules of order prevent me from saying severe things about what might have been in it.
It should be said that the Minister of State, who has been in charge of the Bill, has behaved, as we would have expected, with the greatest courtesy. Nobody on this side would wish to complain of the consideration that we received in his personal conduct of the Bill. That applies also to his colleague from the irritated rival Department, the Treasury, which was occasionally allowed to put its nose into the affairs of the Bill, much to the discontent of the Board of Trade, which does not like to see the Treasury interfering, and much to the discontent of the Treasury, which hates to interfere in a matter in which it does not have the dominant and final say.
The result is, however, that to get the Bill, which, as I said, should be renamed the "Protection of the President of the Board of Trade Bill", it looks as though the Leader of the House or the Prime Minister—taking time off from disciplining the Press and such other occupations as beset him at the moment—has said, "We have to get something which looks like a Depositors Protection Bill, and get it quickly."
The evidence is in the Bill itself. A great many of the provisions are dependent on regulations which the Minister will issue—delegated legislation. The

1445
view that I have taken throughout the proceedings on the Bill is that it is a mischievous one, a demagogic Bill, with no serious intent to protect depositors; a Bill with nothing but political reasons for protecting the President of the Board of Trade and the Government from criticism from their own more enlightened and active back benchers, like the hon. Member for Torquay (Mr. F. M. Bennett), who has been toiling in this arid vineyard on behalf of the Conservative Party to get some reasonable social legislation on this subject for some years, but failing.
Since it was a bad Bill, I sought throughout the Committee stage—I have often irritated my hon. Friends in doing so—to provide for maximum discretion and more mature reflection on the part of the President of the Board of Trade in the course of exercising his regulatory powers under the Bill. The most astonishing thing about the Bill, which depends very much on regulations, is that even on Third Reading the House has not been treated to a sight of the draft regulations. Every so often the Minister of State has been running a sort of striptease for us. He would occasionally draw the curtain aside and let us have a little daring peep at some of the regulations to which we are to be treated when the Minister has had time to reflect on the protection which the public requires. I am forced to ask why we were not shown the regulations and why we have still not seen in any reliable and concise form what the Government propose to do with the powers that they will obviously get under this Measure.
Other matters in the Bill do not meet with my approval. In their window dressing, the Government have brought in some change in the criminal law. It has been strengthened, as it were, to punish people who solicit deposits in a fraudulent manner. If the chief failure of the law protecting depositors had been that they were able to be defrauded without the frauds being liable to a criminal penalty, there would be something to be said for this new provision. But the Government know well enough that in every one of these spectacular failures the criminal law was applicable and that the people concerned could be brought to book if the evidence was available. If the evidence
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is not available we shall not be able to bring them to book under this new law, which is largely repetitive of the old law. This provision is a piece of irrelevant window dressing.
Again, the idea of other provisions is that drastic powers should be given to the President of the Board of Trade to raid people's premises, seize books and demand accounts. But, from the tiny budget provided to finance this magnificent piece of protection, it seems that the chances of any of these elegant pieces of machinery being operated are very small. I must regard those provisions, also, as largely window dressing.
In his anxiety to placate critics in relation to advertising, the Minister of State made a promise in Committee that he would publish the list of companies exempted under the Eighth Schedule of the Companies Act and which will be exempt under this Bill. Here again, I hope that the hon. Member for Walsall, South will not mind my reminding him that, in Committee, he took a far less hopeful view of the Government's attitude.
Today, however, the hon. Gentleman decided—to use his own phrase—to rally to the side of the Government. I do not know why, because they are doing exactly the opposite of what he firmly advised them to do in Committee. Then, he said, "I am sad about this". During the intervening period his natural good spirits have got the upper hand again and have overcome the melancholia expressed in Committee. But then, in Committee, the hon. Gentleman went on to say exactly what I had said earlier and which I will not repeat to the House, except in a sentence or two.
Sir H. d'Avigdor-Goldsmid: The hon. Gentleman is overlooking the important metaphysical distinction which his Front Bench drew between the list of companies affected by the Bill and those given special exemption of quite a different sort under the Companies Act.
Mr. Lever: No. The hon. Gentleman is mistaken. The metaphysical distinction, whether it be real or not, drawn by my hon. and learned Friend the Member for Kettering today, applied to the Amendment that he moved and which was rejected by the Government. The Minister of State said, in effect, "As soon as we summon up the courage we

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will reveal in the next convenient publication of the Board of Trade what has hitherto been kept secret for many years, namely, the list of companies enjoying privileges under the Eighth Schedule of the Companies Act."
It was the threat to reveal this list which produced from the hon. Member for Walsall, South the protest in Committee in which I joined. If the hon. Gentleman thinks that I do him an in-justice, I am prepared to treat the House to extracts from what we heard in Committee. In unmistakable terms, the hon. Gentleman agreed that the publication of this list would cast an unwarranted slur on those not in it and bestow an unwarranted accolade to those in it.
What has happened to the hon. Member for Walsall, South? In Committee he gallantly defended the people who were not on the list and who would be aspersed by the action of the Minister, and yet we were reassured today that he was rallying to the Minister in this evil work and would support him fully in this injustice. I thought that we were to have a Third Reading repentance. However, he showed shrewd tactics because, although he rallied to the Minister, he wanted him to look at the matter again. I think that the hon. Member's heart is in the right place, but he is seated on the wrong side of the House, and in the end that must inevitably have a deleterious consequence on his thinking, as I have shown on other occasions.
Without repeating myself, for I have had ample opportunity to make my point this afternoon, I most earnestly urge the Minister to think again about this matter. He has an opportunity in another place to put it right and I hope that he will see that he takes heed of what was rightly said by the hon. Member for Walsall, South and by myself and supported by my hon. Friends—that he must not publish the list under the Eighth Schedule because that will asperse those who are not it. There is nobody whose words carry any weight or who has any experience of this matter who does not agree with me.
The hon. Member for Torquay, whose attitude in this matter has been consistent throughout, said that it was very nice to be on the list and almost hinted that he
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knew of a firm that was on the list and which did not mind having its name published with a Board of Trade certificate to say that it was a grade one merchant banking house. I say at once that every firm which is on the list is first class and I am not seeking to challenge that, but there are many first-class people who are not on the list.
When the Minister says that he is not aspersing anybody or damaging anybody in his banking business by publishing the list of people who are not on the list, as it were, he forgets that the views of the hon. Member for Walsall, South, as they were expressed before the process of his inevitable good temper and perhaps some guidance from various quarters were brought to bear, are in reality the same as those of the hon. Member for Torquay. The hon. Member for Torquay repeats the Minister's words and says that nobody will be aspersed by not being named on the list, which will only say that they are not bankers. That is all very well, but people who, like the hon. Member, think that they are carrying on a banking business might regard it as a professional and trade aspersion of the most grave and harmful character to be told that they are not bankers.
I beg the Minister of State to bear in mind that when he gets support from a Member who knows about these matters, like the hon. Member for Torquay, it is very dubious support and does not really support the Minister's position. What the Minister is saying is, "When I publish this list, I not only do not asperse anybody by saying that anybody is a rogue, but I am not reflecting on those bankers who are not on the list"; but both his hon. Friends who know anything about the matter share my views, although in a different way.
The true view of the hon. Member for Walsall, South, as expressed in Committee and even, one might say, by implication in his speech this afternoon, is that the list ought not to be published because to publish it would be unfair and wrong. The view of the hon. Member for Torquay is that it should be published because it will be so nice for the firms on the list, including those he knows to be most respectable and delightful people, as I readily agree they are. He said that publication would not asperse anybody, but would merely say that they were not

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bankers. However, as there are many banking firms some with millions of pounds of capital who are not on the list, it is difficult to see how graver injury could be done to them than the hon. Member for Torquay wants to be done in this manner.
I am sure that the hon. Member puts forward his argument with great sincerity, but it cannot be said with any intellectual honesty that the list will not separate the sheep from the goats. That is the very purpose of having a list. The sheep, presumably, are those who could be trusted not to be held in the corset of regulations, and the people who would have to be led very firmly about what accounts they must publish and what information they must give, and so on, are presumably the goats. I therefore hope that the Minister will reflect again and will not equate the doing of injury to legitimate business with the protection of depositors.
The whole concept of the Bill is misguided. The person most in need of protection is the unsophisticated investor. The fact that the Government ensure that he can have complicated accounts, if necessary with his fish and chips, will be of little use in protecting him. It seems to follow logically thus: most of the pledges in the past have been accompanied by no accounts being given to the depositor. The victims have lent money on inadequate or no accounts. The man who lends his money without adequate accounts will hardly be protected because there are to be voluminous and complicated accounts. He does not trouble to see that the company to which he is lending his money has complied with the existing law with regard to accounts. What makes the Minister think he will go to the trouble of getting the statutory complicated accounts which the Bill says that he should have?
The result will be that the companies honestly engaging in business will comply with the law. They will have to spend a great deal of money on doing so, and the hon. Member for Walsall, South may be right in saying that this may be so costly as to reduce the rates of interest which honest companies will pay. On the other hand, the rogue will be little deterred by this. He will provide accounts like those provided in the case in the Walsall constituency. He will provide regular, good-looking accounts
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and defraud many innocent people of large sums of money. That is what the hon. Member for Walsall, South said on Second Reading. Why these accounts should protect the public I know not.
I repeat what I said this afternoon. If the Government really believed that accounts were a shield, they would not allow companies which have no accounts to operate in this field. The Government have agreed that no companies can operate without providing accounts, so that the only shield on which they rely will not apply, because if a rogue wants to set up a new company he will have nine months' run and then he can start another company with £100 before he comes within the ambit of the regulations regarding the accounts which he has to keep.
For those reasons it seems that the Bill, in so far as it is effective, and in so far as it has teeth, bites the wrong people. It interferes with the legitimate people and does nothing to protect the public adequately against the rogue. It seems that its most Draconian provisions are largely window-dressing, and the whole business is unsatisfactory. The reason we do not vote against it is that we have exposed sufficiently the illusion of protection which the Bill gives, and we are content that for the time being its main function shall be to richly endow the Board of Trade's archives with information which it has expressly assured us it has not the slightest intention of using for the protection of depositors.
9.44 p.m.
Mr. F. M. Bennett: I thought that it was too good to be true. The hon. Member for Manchester, Cheetham (Mr. H. Lever) began by paying me an unsolicited compliment, and I was very touched by the picture of my toiling in an arid vineyard. I never thought that that adjective applied. He remedied that by attacking me again on the question of the list. Although I do not think that at this hour we want a fourth discussion on this matter, I feel bound to clarify the reasons why the Minister and I have adopted a certain line. The hon. Gentleman spent a lot of time telling me why I did it and I am sure that he will forgive me checking it for myself.
One of my hon. Friends who is not here and I have been completely consistent in this matter. I know that the hon. Gentleman did not mean to be unfair, but

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I think that he has been unfair in saying that we have been inconsistent.
I have said from the beginning that there is a business of banking to be carried on. I have not said that this list should be a closed one. I do not care whether a firm is a big one or a small one: my concern is that it should be a banking business. Both in the Second Reading debate and in Committee I pointed out that in every other advanced country a distinction is drawn between legitimate banking businesses and other forms of financial activity. I gave the example of Canada. Many things can be done there by the kind of concern to which the hon. Member has referred. Such a firm may be perfectly reputable, but it would not be allowed to operate under the title of bankers, because it would not be running a banking business. That is the classification that I have sought to have inserted in the Bill by way of Amendment.
The hon. Member referred to sheep and goats. He knows that I used another parallel. I said that I did not want to discriminate against the grocer by saying that only a man who sells meat shall describe himself as a butcher. Throughout these proceedings my line has been that a banking business is a separate matter. I do not mind how long the list is. I have no wish to restrict it to a privileged group of the top people in the banking world. All that I am concerned about is to see that they carry on a banking business—a distinction that is recognised in almost every other country.
I again plead that we should get away from a description which I believe will do unjustified harm to companies of great repute which are not running banking businesses—which the hon. Member refers to as goats. I assure him yet again that I have no such idea, and I do not think the Government have. It is simply a question of their not carrying on a banking business according to what some of us believe a banking business should be.
Mr. H. Lever: Is the hon. Member saying, therefore, that those firms who are not on the list are not carrying on bankers' businesses? If so, is not the publication of this list going to injure many firms who are going to be bankers but who will necessarily have to wait for some months before they can get on the list?
Mr. Bennett: I am merely saying that the list should comprise everyone who is carrying on a legitimate banking business. If it is said that this will harm firms which think that they are carrying on a banking business but are not, then I must say that I put the public good first, and such firms must accept that they cannot fairly expect to go on calling themselves bankers. I am sure that the hon. Gentleman appreciates my point of view in this matter.
As always, it is impossible not to smile when one is under fire from the hon. Member, because of his amusing way. In those circumstances, I hope that he will not mind this one slight riposte. Throughout the Committee stage, one of the most amusing aspects was that one never knew which way he would jump next. I know that some of his hon. Friends felt the same way. In fact, I was tempted to run a book and take wagers as to which attitude he would take up on each successive Amendment.
The hon. and learned Member for Kettering (Mr. Mitchison) was much mare harsh and curt in his criticism than the occasion warranted. In Committee many of us were tempted to react forcibly to some of his distinctly unfriendly criticisms of my hon. and right hon. Friends the Ministers, and the Government in general. The only reason we held back was that we did not wish to delay or obstruct the passage of the Bill. But tonight, as there is no longer any risk of delay, I can say that I consider his criticisms to be wholly unwarranted. The Bill goes a great way towards meeting the need for a constructive Measure to deal with what is an admitted evil, as I propose to shown in the next few minutes.
So far during this Third Reading debate no mention has been made of the power and scope of advertisements. Up to now, long before any question of accounts could arise individuals have been misled by the form and content of advertisements into thinking that they are investing money in a company of repute, and in a certain sort of enterprise when, in fact, the company has been investing money in quite different enterprises. Further, titles and descriptions have been used—which we are now told will be forbidden under the regulations—which gave a wholly false idea of the soundness of the promises held out.

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The term "guaranteed", which has been made use of freely, means absolutely nothing, as all hon, Members will know. But to the unsophisticated, the appearance of the statement "13 per cent.", followed by the word "guaranteed" in large type, looks impressive even though it is meaningless both in law and in fact. So the Government have taken a decisive step towards the prevention of this abuse by controlling the form of advertisement and its content, and limiting, if not preventing altogether, the possibility of a person being misled.
The second point of importance which is covered by the Bill is the purpose for which a company is formed and the purpose to which the money available should be devoted. As the hon. Member for Cheetham will know, there have been grave cases where people have lost their money because a borrowing company has put the money it secured to a purpose wholly different from that which the investors thought would be the purpose for which their money would be used. That has been the case in respect of banks or finance houses or anything else. Now in the first document to be submitted there will have to be shown the purpose for which the money is to be invested, and it will be a criminal offence to mislead a potential investor. If the purpose is subsequently changed, the depositor must be informed of that change and given a chance to get his money back.
It is true that we cannot guard completely against the inability of individuals to understand accounts. As I said during the Second Reading debate, however hard one may try, one cannot always prevent a fool and his money from being parted. I gave on that occasion, as an example, the number of times that Nelson's Column has been "sold". In such a case that could not have been stopped whether the accounts submitted with the proposal were good or bad. No Government can prevent some people from being wholly duped by a proposal which an individual with common sense could not possibly imagine would provide a good bet for the investment of his money. I do not pretend, and I am sure that the Minister does not pretend, that we can guard against actions of the sort I have described. But from now on depositors and prospective depositors will be able to obtain a copy
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of the accounts referring to companies in which they are being invited to invest, and it is open even to the unsophisticated, if they cannot understand the accounts, to get advice on the subject.
The hon. and learned Member for Kettering attempted to get Amendments accepted listing the sort of individuals who would have to give advice, failing which an opportunity would be provided for the investor to withdraw his money. The Amendments were not accepted for a good reason. But it was revealed by the discussion that there are plenty of people who are ready to give advice if accounts prove to be beyond the comprehension of prospective depositors.
It has been said that discussion during the Committee stage and today has suffered from the absence of the regulations, and I wholeheartedly agree with the hon. Member for Cheetham that it is difficult to know how far we should press the Government when we are not aware of the nature of the regulations to be made. I am sure that great interest will be taken in the regulations when they do come into force in order to discover whether they are adequate to fill the gaps in the Bill. After the delays which have occurred I should have preferred the Report stage of the Bill to have been delayed a little longer until the regulations were available, and hon. Members had been given a chance to take part in a more useful debate than it has been possible to have under the circumstances. But we shall have, as it were, to save our powder until we see what form the regulations take.
I am not happy about the power which is included for winding up petitions and powers which may be used against those guilty of certain forms of misconduct under the provisions in this Measure. I confess that I was caught out during the passing of the last series of Amendments and I did not realise that the discussion upon them provided me with an opportunity to comment on this matter during the Report stage. The sanction is there in the Bill, but I do not think it goes nearly wide enough. It ought to cover far more aspects than this limited one. I hope that my hon. Friend will look at this before the Bill goes on to the Statute Book. I am sure that if I could have raised that matter on Report I

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should have had the support of the hon. Member for Cheetham.
With that one limited criticism, as one who has toiled in the vineyard for quite a while I am delighted with the Bill. There are obvious gaps to be filled, but the Government have gone a long way with a very useful Measure which, if it is properly carried out, will stop a great many abuses. As one who has taken an active part in this matter throughout all its stages, I wish to pay tribute to two hon. Members who are not present tonight, one because of serious illness, my hon. Friend the Member for Torrington (Mr. P. Browne). He first launched a Measure like this two years ago. He withdrew it on the basis that the Government were to bring in a Measure to do it themselves. I am sure that he will be comforted in his absence from the House by the thought that after two years at last the pledge he received from the Government has finally come to fruition. It will be generally accepted that my hon. Friend did a lot of work on this matter. The same applies to my hon. Friend the Member for Somerset, North (Sir E. Leather), who also put in much toil to achieve this result.
I am grateful to all hon. Members, on both sides of the House, who have helped to make this a good Measure. I am particularly grateful to the Ministers concerned, who have reacted very fairly to suggestions from both sides of the Committee and who have not warranted the criticism that they have not taken notice of objections. They have done very good work and I wish the Measure well.
9.57 p.m.
Mr. Green: Despite some of the verbal shafts which have been loosed at my head, I take the opportunity of paying my tribute to the thought, the care and attention which the Committee, in its sittings and the House today, have given to the principles and details of this Bill.
The hon. Member for Manchester, Cheetham (Mr. H. Lever), whom I know and like, will not mind my saying that every now and again that hyperbole which so amuses his audience tends to weaken the sense of his remarks. I have the feeling sometimes that he hears rather less well than he speaks. That is
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just a feeling I have and I shall say no more than that about him.
This Bill has been so thoroughly discussed that I wish to avoid tedious repetition, but, despite some of the remarks which have been made, I should like to say that it is an important Bill. Of that I have no doubt at all. In this particular field of company financing it is a new venture. That has been one of the difficulties which confronted the Committee. I accept that certain principles of operation would have been preferred by certain hon. Members opposite. I cannot say "by all hon. Members opposite" when I bear in mind the Committee proceedings. It would not be honourable or honest to say so, but for certain hon. Members opposite a different principle would have been preferred from the one we have chosen.
This is a matter of judgment. It is not necessarily a matter for violent rebuke of one or of the other. The experience of operation of the Bill, on whatever principle it had been erected, is now obviously required. I believe that we have chosen a method within the Bill whereby we can most benefit from its operation. This has proved to be the value of power of regulation both of the advertisements and accounts.
I do not wish to be provocative in any way, but I suggest to the House that we may be in some danger of being a little patronising when we speak about the distinction between the sophisticated and the unsophisticated depositor. The sense in which the words were used may not bear the same construction as would be put upon them by people outside. What we have been thinking of as the unsophisticated depositor is, in nine cases out of ten, an extremely shrewd chap. He will now, under the Bill—
It being Ten o'clock, the debate stood adjourned.
Proceedings on Government Business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Boyd-Carpenter.]
Question again proposed, That the Bill be now read the Third time.
Mr. Green: I venture to give that small warning, because the business of providing information is not only valuable

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to the experienced person operating in this field, but I believe that it is valuable to the generality of the public as well. I believe that as the Bill is operated it will become increasingly valuable.
I have tried, as my hon. Friend the Economic Secretary and, indeed, the whole of the Government side, have tried, to keep a balance in the Bill, not putting too much burden on the company. This is what we seek to do. We shall seek to use our powers of regulation in that way, but at the same time to secure that full information is available to the depositor. I was told by the hon. Member for Gloucester (Mr. Diamond) that perhaps this was a case of caveat depositor. I see what he means. I think that depositors should be wary. They should exercise their individual judgment and should have the information on which to do this. Let us not overlook either the element of caveat vendor, which is also in the Bill; and one or two hon. Members have complained that we perhaps have too much of it.
I have sought to keep the balance between those two concepts of caveat vendor and caveat depositor. If that balance has been properly kept—and experience of the Bill will help us to correct the balance a little here and there, because we have these regulatory powers—I believe that we shall have taken a real step forward in this new field of general finance. It is on those grounds that I leave the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time and passed.

BRITISH MUSEUM [MONEY] (No. 2)
Resolution reported,
That, for the purposes of any Act of the present Session to alter the composition of the Trustees of the British Museum, to provide for the separation from the British Museum of the British Museum (Natural History), to make new provision with respect to the regulation of the two Museums and their collections in place of that made by the British Museum Act 1753 and enactments amending or supplementing that Act, and for purposes connected with the matters aforesaid, it is expedient to authorise the making of any payment out of moneys provided by Parliament or out of the Consolidated Fund which falls to be so
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made in consequence of any provisions of the said Act of the present Session relating to the staff of the British Museum or the British Museum (Natural History).
Resolution agreed to.

BRITISH MUSEUM BILL
Order for consideration, as amended (in the Standing Committee), read.
Bill recommitted to a Committee of the whole House in respect of the Amendments to Clause 6, page 3, line 34, and Clause 12, page 5, line 28, standing on the Notice Paper in the name of Mr. Boyd-Carpenter.—[Mr. Boyd-Carpenter.]
Bill immediately considered in Committee.
[Sir ROBERT GRIMSTON in the Chair]

Clause 6.—(STAFF.)
10.3 p.m.
The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): I beg to move, in page 3, line 34, at the end to add:
(3) For the purposes of pensions and other superannuation benefits—

(a) service in an established capacity in the employment of the Trustees shall, where the person in question has been admitted into that employment with a certificate from the Civil Service Commissioners, be treated as service in the permanent civil service of the State within the meaning of section 17 of the Superannuation Act 1859; and

(b) service in the employment of the Trustees in any other case should be treated as service in the civil service of the State not falling within the said section 17.

I hope that I shall not incur your displeasure, Sir Robert, or cause the hon. Member for Sowerby (Mr. Houghton) any inconvenience, if, in the course of moving this Amendment, I also refer to the Amendment in Clause 12, page 5, line 28, at end insert:
(4) As respects service in the employment of the Trustees of the British Museum before the commencement of this Act, section 6 (3) of this Act shall be deemed always to have had effect.
which relates to a similar topic.
The purpose of this Amendment, as, indeed, of the Amendment in page 5, line 28, is to put beyond doubt the fact that the staff of the Museum are civil servants for the purposes of the Superannuation Acts. When the Bill was in

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Standing Committee, the hon. Member for Sowerby and one or two other hon. Members raised the wider question whether the staff of the Museum were or should be civil servants in the full sense. That was, if I may be allowed to say so without transgressing the rules of order on this Amendment, an important question, but which was perhaps limited in its practical significance by the fact that, in any event, these are staff to which Estacode is applied. My hon. Friend the Economic Secretary undertook to consider this wider question and to discuss it with the Standing Committee of the Museum. I have taken steps in that direction and have also made certain preliminary soundings of the staff concerned.
That Standing Committee has indicated considerable doubts as to the desirability of proceeding on the wider front of making the staff civil servants for all purposes. Preliminary inquiries indicate that there is a wide division of opinion on the merits of this among the staff. I hope that hon. Members will feel, as I do, that under these circumstances it would be wrong at this stage to propose a change of this character. Fortunately, the timetable of the Bill—that is, the timetable in the physical sense of how we hope to run it—permits these consultations to be carried further, with the possibility that if a change on the wider front were thought right—and I express no opinion now on that matter—any necessary Amendment could be introduced in another place.
It has emerged in the course of our discussions and consideration of the matter that, as the hon. Member for Sowerby originally suggested, there is at any rate some doubt as to whether the members of this staff are civil servants for the purposes of the Superannuation Acts. They receive, and have for a long time received, pensions on the same basis as under the Superannuation Acts and it is our intention, as I am sure it would be the wish of the Committee, that that should continue.
But the doubt having arisen, I am sure that it is right to lay it to rest; and the purpose of the first Amendment is to provide for the future that for the purposes of the Superannuation Acts the staff shall continue to be treated as civil servants. The second Amendment makes
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quite certain that there is no doubt in respect of past service.
Mr. Douglas Houghton: All this seems to have arisen out of quite a guileless question asked in Committee upstairs. At the time we were debating an Amendment proposed by my hon. Friend the Member for Islington, East (Mr. Fletcher), the purpose of which was to put beyond any doubt the fact that the staff of the British Museum were civil servants.
I have always been bewitched by the phrase "employed by and under the Crown". We thought, in moving the Amendment, that by saying that the staff should be deemed to be employed by and under the Crown we would legitimise them and make them civil servants. However, we were told that the Amendment would not achieve the purpose we had in mind. Indeed, I think that the Minister went so far as to say that he had been advised that it was meaningless. So up I got and said, in effect "Well, let us apply another test. Are these people covered by the Superannuation Acts?" The Economic Secretary replied that he did not know but that he would find out. And here we are.
I am sorry for Her Majesty's Government. Everything they touch comes to pieces in their hands. They really should see a psychiatrist and go into a nursing home for a while. Because I asked a simple question—about whether or not these people were covered by the Superannuation Acts—all this has arisen. The Government have discovered that they are not, and that they are not covered by any Acts. The Government have found, therefore, that they have been paying pensions to the British Museum staff for years and years without any statutory authority. What has the Public Accounts Committee been doing?
Apart from that it is obvious, from the second Amendment to which the right hon. Gentleman made a passing reference, that there is to be an indemnity to cover Ministers who have been paying these pensions without any statutory authority. A little later we have to pass something that will save them being clapped into gaol. Of course, the pensioners concerned will know nothing whatever about this. It will make no difference to them. They have had their pensions all along and will continue to get them,

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but this is an important question of whether expenditure has the authority of the House.
We clearly welcome what the right hon. Gentleman has proposed, though it goes only part of the way. He is now trying to clear up the money side of the matter, but still to be cleared up is the status side, because the right hon. Gentleman chose his words most carefully. He said that this Amendment would put beyond any doubt that the British Museum staffs were civil servants for the purposes of the Superannuation Acts—that, and that alone. As he pointed out, however, it does not deal with whether those staffs are civil servants in the full sense.
The right hon. Gentleman told us that there were some differences of opinion between the staffs concerned—that some did and some did not want to be civil servants in the full sense—and that there was an opportunity for the matter to be discussed further, quite properly, with those concerned and with the trustees, so that anything that it might be necessary or desirable to add to the Bill could be attended to later in another place.
I quite understand that. I am sure that some members of the British Museum staff prefer to be known as members of the staff of the British Museum, and consider that it gives them a kind of passport amongst antiquarians throughout the world. Others are probably prouder of being members of Her Majesty's Civil Service than of being employees of the Trustees of the British Museum, and feel that full status is more desirable. Perhaps some want both—I do not know—but these things are important to many people.
In the Standing Committee, I pointed out that this question can really decide some important things though, admittedly, this Amendment is probably more decisive in its consequences than anything else that might be added to the Bill to make them civil servants in the full sense. This Amendment deals with where the money is, and the other Amendment deals with where the status is as distinct from money—because we are sure that members of the staff will continue to receive the full conditions and remuneration of the corresponding grades in the Civil Service.
That being so, this little storm in a teacup ends quite happily. Everybody
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is to be satisfied, the Ministers are to be freed from this particular blame, the Public Accounts Committee can sleep at nights—and so can we, I hope, when we finish with this Bill—and we have, at least, made a clean job of this particular doubt. The moral is: "Don't ask simple questions in case you get complicated answers."
10.15 p.m.
Dr. Barnett Stress: Everyone who knows him will appreciate that when my hon. Friend the Member for Sowerby (Mr. Houghton) hears the word "pensions" or the word "superannuation" he immediately reaches for the Order Paper, if not for something more. It was fascinating to hear him, the day before he asked this simple question, declaring that the best thing that he could do was to keep his mouth shut. However, he found how very useful it was to open his mouth, seize on the simple word "pensions" that fell from the lips of the Economic Secretary, ask his question, and bring about this excellent result.
My right hon. Friend the Member for South Shields (Mr. Ede) is not now here, and offers his apologies to us all. He particularly asked me to tell the Chief Secretary that he and the Trustees are deeply grateful for the steps the right hon. Gentleman has already taken. We have been told by my hon. Friend that there are two aspects of this matter. There are money and status—or name. Money is a reality. I have the impression—I may be wrong—that probably the staff will be content with things as they are if we pass these two Amendments. If I were a member of the staff I would much rather be under the overall management of a body of trustees such as those who are to be appointed, than under any particular Minister of the Crown who changes from time to time. They come and they go; whereas trustees seem to be a much more permanent body.
The denial that we have heard from my hon. Friend the Member for Sowerby that he had no intellectual capacity, that this Bill had been pitch-forked into his lap without any notice, and that therefore he could not help us in any way, has been belied by the fact that he is in some matters a very great expert.
Mr. Boyd-Carpenter: First, I should like to thank the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and, through him, his right hon. Friend the Member for South Shields (Mr. Ede) for the kindly and agreeable things the hon. Gentleman said on his right hon. Friend's behalf. For our part, we naturally regret the absence of the right hon. Gentleman who is and has been for many years a trustee of the British Museum to which he has given good and very distinguished service.
Coming to the hon. Member for Sowerby (Mr. Houghton), he began with a remark that I am quite unable to accept from him. I refer to his statement that in Committee he asked a guileless question. No one who knows the hon. Member would believe that for one moment.
The hon. Gentleman's other point, whether or not under the existing law these people are covered as civil servants by the Superannuation Acts, is, I am advised, a very difficult question. But I think the Committee will agree that the payment of public money to these very devoted and admirable people should not be on a basis that admits of any doubt at all.
The purpose of this Amendment is not to clear up, as the hon. Gentleman
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rather lightheartedly suggested, some situation in which public funds had been paid without authority. It is to clear up a doubt which, on examination of the relevant Statute, appeared to be a possible doubt, and we wanted to put it right. Therefore, there is no question of any such thing as an Act of indemnity. I am sure the hon. Gentleman will be glad of that, because if anybody had to be indemnified, as this is a state of affairs which has gone on for a very long time, it would not only be Her Majesty's present advisers.
Amendment agreed to.
Clause, as amended, ordered to stand part of the Bill.

Clause 12.—(SHORT TITLE, COMMENCEMENT, TRANSITIONAL PROVISIONS AND REPEALS.)
Amendment made: In page 5, line 28, at end insert:
(4) As respects service in the employment of the Trustees of the British Museum before the commencement of this Act, section 6 (3) of this Act shall be deemed always to have had effect—[Mr. Boyd-Carpenter.]
Clause, as amended, ordered to stand part of the Bill.
Bill reported, with Amendments; as amended (in the Standing Committee and on recommittal), considered.

New Clause.—(TRANSFER OF CERTAIN MANUSCRIPTS, &C., TO PUBLIC RECORD OFFICE.)
Notwithstanding anything in this Act the Trustees may with the consent of the Lord Chancellor transfer to the Public Record Office any historical manuscripts or other documents that formerly formed part of the public records, or which form part of a series of documents the bulk of which are in the possession of the Public Record Office, or which in the interests of historical research it is convenient so to transfer.—[Mr. Fletcher.]
Brought up, and read the First time.
10.20 p.m.
Mr. Eric Fletcher: I beg to move, That the Clause be read a Second time.
I ought to begin by declaring an interest in this matter in that I am, under appointment by the Lord Chancellor, a member of the Advisory Committee of the Public Record Office, as, indeed, was the Economic Secretary to the Treasury, until his promotion to the Front Bench, who discussed this matter with me and with my hon. Friends in Committee. We revert to it again today because, at the conclusion of the Committee stage, the Economic Secretary indicated that this was one of the matters that he would wish, in the interval between then and the Report stage, to consider with the Trustees. May I, therefore, try to make to the House the case for this new Clause.
The position is this. It has recently come to the knowledge of some of my hon. Friends that a certain number of public records which have strayed from official custody have come into the British Museum. How they got there is not quite known. They seem to have disappeared from the public records of the day, at a time before the Public Record Office was established. Some of them, apparently, passed into private hands and were subsequently acquired by the British Museum. In some cases, these documents have been in the British Museum so long and are so well known that it may well be in the general public interest that they should remain where they are. But there are other cases of documents which form part of a series, for example, annual accounts, where the separation of one
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document from its fellows is not only very inconvenient but an obstacle to historical research.
Odd though it may seem—here my informant is Mr. H. M. Colvin, Fellow and Tutor of St. John's College, Oxford—there is one case, and he does not think that it is a unique case, where an important medieval document has been torn into two halves of which one half remains in the Public Record Office and the other fragment is in the British Museum. That, of course, is obviously undesirable; but when on some recent occasion it was suggested that the two halves of this document should be brought together, the objection was made that under the law as it then stood the Trustees of the British Museum had no power to part with any document in their possession.
Fortunately, this Bill gives us the opportunity of possibly rectifying that position and giving the Trustees of the British Museum the power to transfer to the Public Record Office those documents, where obviously it is most convenient in the interests of historical research that a whole series of documents should be; or, if it is one document of which there are two halves—one in one place and one in another—it should be transferred to the Public Record Office.
I give two illustrations. There is one which I think will be of particular interest to hon. Members. There is what is known as the counter-roll of one of the accounts for the reconstruction of Westminster Hall by Richard II. That document is in the British Museum, but all the other surviving rolls and counter-rolls are in the Public Record Office.
Again, there is the text of an account connected with the war of St. Sardos in Gascony in the reign of Edward The document itself is in the British Museum, but the cover remains in the Public Record Office. A third illustration is the Wardrobe Account of the thirteenth year of the reign of Edward II, a book which at some time has come to pieces. Two-thirds of the leaves are in the British Museum and one-third are in the Public Record Office, the latter portion coming in the middle. Obviously, this is a most inconvenient situation for students and for those who wish to search and study these medieval documents.

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It has been said that to some extent this inconvenience can be overcome by the fact that photostat and microfilm copies nowadays can be made available, as, indeed, they are, both by the Trustees of the British Museum and by the Public Record Office; but that is not always possible, particularly when documents are fragile, and it is often necessary in the case of medieval records for a student to make a physical comparison of one manuscript with another. That is something which cannot be done merely by the use of a microfilm or a photostat copy.
Therefore, the case for the new Clause is that alt long last the Trustees of the British Museum should have the power, where documents are separated, to restore them to the Public Record Office and where there is one or more of a series of documents, the bulk of which is in the Public Record Office, to send them there.
There is nothing compulsive about the provisions of the new Clause. It merely gives the Trustees permission to make this transfer with the consent of the Lord Chancellor in circumstances in which it is in the interest of historical research so to do. With that safeguard that the consent of the Lord Chancellor is required, I hope that the Chief Secretary and the Government will feel that there is ample protection against any rash decision being made by the Trustees of the Museum. It seems to be desirable that they should have this power and I hope that the Government will be able to accept the new Clause.
Dr. Alan Thompson: I rise to support my hon. Friend the Member for Islington, East (Mr. Fletcher) on the new Clause. It is for the convenience of scholars, and particularly of medieval historians, who often travel long distances to London from, say, universities in Scotland or in the North. Frequently, they spend only a day or so in London working on these records and it would be a considerable convenience far them to have the records together in one place.
I notice that when this matter was discussed in Committee, the Economic Secretary to the Treasury said that the First Schedule to the Public Records
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Act, 1958, specifically excluded from the definition of "public records" any records which formed part of the permanent collection of a national museum or gallery. I regard this as a mere quibble when set against the convenience of the scholars concerned. I know that there are not a great number of them. I know that the medieval historian vote will not be a crucial one at the next election. Few marginal seats are likely to be swayed by the indignation of medieval scholars. Nevertheless, this is a matter to which we should pay attention.
As has been pointed out, the new Clause states:
"Notwithstanding anything in this Act the Trustees may with the consent of the Lord Chancellor transfer to the Public Record Office any historical manuscripts or other documents that formerly formed part of the public records …"
Clearly, the Trustees would still remain very much in charge of the situation. I suspect that behind the objection originally raised was the thought, not that the Trustees themselves were unreliable, but that their successors might be. We all have that slight kind of feeling towards our successors. Whether we are in the Army and hand over our platoon to a new man or in civilian life we hand over our job to someone, we never feel that our successors will discharge the task with quite the same care and attention as we discharged these duties. I can only think that if the Trustees are themselves objecting to this proposal they are thinking, as I say, of some time when public records may be disposed of with less care than they, the existing Trustees, would themselves give. I think that this again is an invalid objection. This new Clause is a very moderate one and permissive only and I hope that the Government, for the convenience of the small number of scholars concerned, will accept it.
10.30 p.m.
Mr. Robert Cooke: I am afraid that I cannot agree with what the hon. Member for Dunfermline Burghs (Dr. A. Thompson) has just said, and I cannot because of my own personal experience, because it so happens that the British Museum and the Public Record Office hold documents and drawings which have relation to the historic house in which I have the privilege to live, my own home, and I have

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always found that both those great bodies have been most prompt and courteous in the way in which they have made their documents available. If that was not so I could well see that there would be some point in the new Clause, but I have always found that they have been very ready to look for what one has wanted to find and to provide documents for one's inspection, and also to provide photographic or photostatic copies.
I would not want to introduce a note of discord into this discussion, but I would make one point, that in both the British Museum and the Public Record Office the charges for providing photostatic copies are high. I think that perhaps at a later stage we might look at that, but I feel that they provide ample opportunities for scholars, and even amateurs like myself, and I could not support the Amendment.
Dr. Stross: We discussed this matter in Committee, and the Economic Secretary was very courteous in his response to me at that time, as, indeed, he was to everybody. He said that he would consider this matter. I also would point out that this is a very permissive new Clause. Indeed, I rather think it is so permissive a Clause that no real change will be made by it in the powers of the Trustees. However, I am influenced by what I heard a few moments ago, that all Trustees tend to suspect that those who follow after them will not be as able as themselves to care for the treasures they are caring for, and this may well be true at the present time. The Trustees may feel that even this permissive form of words is something they do not wish to be embarrassed by. Yet the facts as I read them are that even if we do not put this new Clause into the Bill the Trustees surely will have this very power by the time the Bill is on the Statute Book. They will have power to lend to another institution if they wish. I should like to hear what the Chief Secretary has to say at this point.
Mr. Boyd-Carpenter: As the hon. Member for Islington, East (Mr. Fletcher) and the hon. Member for Stoke-on-Trent, Central (Dr. Stross) have both said, this point arose in Standing Committee and my hon. Friend the Economic Secretary gave an undertaking to con-
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sider it, and in particular to discuss it with the Trustees. That undertaking has, of course, been implemented, and I have myself had a discussion with the members of the Trustees' Standing Committee. We all agree that this is an interesting point and certainly one well worth both raising and considering. The view, however, of the Trustees is that they would not, for reasons I should like to give to the House, wish to be entrusted with this power.
The House will be aware that it has been the policy of the Trustees for a very long time to follow a line of what I may call non-alienation; in other words—apart from the kind of matters which the Bill deals with, of articles unfit to be preserved in the collection, duplicates, and so on—not to part, even to other distinguished institutions, with objects with which they have been entrusted, partly as a matter of policy, partly because many things have been bequeathed to them on the basis that they should remain in their possession.
They feel that this power, if it were given to them, would be an embarrassment. The hon. Member is right. What is proposed in the Amendment, not unreasonably, is a permissive power. But I think it is our experience in this House that permissive powers, though in form permissive, can sometimes be something of an embarrassment. There can be pressures exercised upon one to exercise the power from which pressures one is free if one has not got the power to exercise.
Representatives of the Trustees with whom I discussed the subject felt, after very careful consideration, that it would be wrong to introduce for this purpose and in this limited sphere a breach in the general policy of non-alienation even on a permissive basis. That is not to say that the Government and the House are not free to form their own views when a Bill is before Parliament. On the other hand, I am sure that the House will feel that the views of the present Trustees, a very distinguished body of men, are entitled to very considerable weight, and I think that the reasons which they gave are also entitled to a great deal of respect.
Nobody would seek for one moment, of course, to brush aside the case which the hon. Member for Islington, East made,

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most persuasively, in respect of scholarship and research, and I have also seen the letter from Dr. Colvin, a letter from a fellow of a college which carries particular weight with the Economic Secretary. On the other hand, the development to which my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) referred, of photo-copying, means that it is possible to meet the practical needs of those who desire to see a complete collection of documents in order to work on them far more easily than has ever previously been the case.
Both the Public Record Office, to whose excellent administration I would like to pay tribute, and the Museum are, I understand, in very good relationship and exchange copies of photographs of documents that they have which relate to each other. The hon. Member for Islington, East referred to one example. Let me give another. The very interesting report of the Commissioners into the state of the Navy in 1608, perhaps the precursor of some of our defence debates, is held between the two institutions. They have exchanged photo-copies as a result of which for all the practical purposes of research and study there now exist two complete sets of the relevant documents, one at each institution.
There is another practical point which weighs with the Trustees, and it made some impression on me. The catalogues of the British Museum are very serious and solid documents, with, generally, a long life. They record the documents that the Museum possesses. If the Museum were to transfer them, then we should have the fact that the catalogues would no longer be accurate, that when scholars came to see them it would certainly be found, although there might well be a photo-copy, that the documents referred to were no longer there. That is perhaps an indication of how even a small breach in the principle of non-alienation might very well induce very considerable practical difficulties in due course.
The proposed Clause refers to documents formerly in the public records. I have had some inquiries made of the Museum as to what this might cover. The Museum tell me that there is only one example of which it is aware, although it may be that further research
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would show others. It is rather an amusing one, of what is called "The Lord Chamberlain's Plays"; that is, scripts of plays which had been submitted to the Lord Chamberlain for his wise guidance or censorship.
These were originally at the Public Record Office, but in 1923, apparently feeling that it had no particular use for them, it returned them to the Lord Chamberlain's office, which subsequently deposited them with the British Museum. That is the only example I know of where documents which have formerly been part of the Public Record Office are now in the possession of the Museum, although I am the last person to say—and the Trustees take the same view—that they are the only ones. They do not, however, constitute a very strong case for this proposal.
But the basic point is that I do not think it would be wise for Parliament to seek to force on the Trustees power which, on reflection, they do not want, particularly if the conferring of those powers would inevitably involve some breach, however small and however well intentioned, in a principle to which the Trustees quite rightly attach very considerable importance.
I would go with the hon. Member for Islington, East a long way against that view if there were really some powerful, practical objection from the point of view of research and scholarship. I do not exclude the possibility of cases where there is real reason for seeing the original documents and not relying upon photographic copies, but in the vast majority of cases there can be got together a complete set of the documents by means of photographic copies, and the practical point is, in large measure, met.
Of course, one gets the odd and extreme case, such as the one quoted by the hon. Member—of which I was not aware—of a document torn in half by some kind of Solomon's judgment, but I do not think that case provides sufficient foundation for this proposal. Although I could not, of course, commit the Trustees, whether the Museum's half should go to the Public Record Office or the Public Record Office's half should go to the Museum, this Amendment inevitably, because of the nature of the Bill, would be unilateral in its effect. But for such

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extreme cases the lending powers in Clause 4 would be sufficient without the conferment of considerable additional powers, and I understand that there is no duration laid down as to the length of a loan.
I realise that this new Clause has been put forward with great reasonableness and with perfect good sense, but because of the predominant considerations against it I must advise the House that it would be unwise and against the wishes of the Trustees to add it to the Bill.
Mr. Fletcher: I do not want to pursue the matter at great length but we cannot leave it exactly there. I am disappointed by the right hon. Gentleman's response. The reasons he has given for rejecting the Clause are rather pedantic. In the first place, this is not really a matter for the Trustees but for the Government to decide. Fundamentally it seems rather ridiculous that where there are documents of the same series and of the same kind, partly in the Museum and partly in the Public Record Office—both of which are basically under Government control—there should not be power to collate them either in one place or the other.
The right hon. Gentleman said that in a sense this Clause would operate in only one way because of the nature of the Bill. But the Public Record Office already has power to move some of its documents to other depositories. After all, the proposal is put forward fundamentally if not entirely in the interests of scholars and researchers. These are the people who are the interested parties. This question has been raised by them because they have, from experience, found it inconvenient, if they want to study a particular series of medieval documents, to find half of them in the Museum and half of them in the Public Record Office. It is even more absurd where we have a document which is torn in two, one part of which is in the British Museum and the other part in the Public Record Office. Therefore, I am not impressed by the argument that the Trustees do not particularly want this power.
10.45 p.m.
In so far as the Minister has consulted the Trustees, I think one is entitled to remind him that the existing
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body of Trustees is about to retire. The main object of the Bill is to nominate and constitute an entirely new body of Trustees who, presumably, will have new and perhaps more progressive ideas than the existing Trustees. But, after all, what is proposed is merely permissive and it cannot possibly do any harm to the Trustees to have this power.
The objection put forward that pre-sure might be brought to bear on the Trustees really will not hold water when they have the protection that they can only do this with the consent of the Lord Chancellor. This is not a matter of very great moment or compass. It can apply only in a relatively small field, but where it has been found inconvenient and may be found inconvenient to scholars and students in the future, I should have thought, in view of the representations made by them and on their behalf, that it was a sensible thing for the House to see that the inconvenience to which they have drawn attention is removed.
It can be removed quite simply and, I should have thought, without inconvenience. I have no doubt that if in the past the Trustees had had power to do this they would have done it without any question or difficulty arising, but merely because, for technical reasons, they are operating under an Act of the eighteenth century they have been unable to do it. Therefore, I should have thought that had this question arisen de novo there would have been no doubt at all about the sensible line that the House would take.
I hope very much that, whatever the House decides, before Parliament finishes with the Bill the Government will have second thought on the matter.
Question put and negatived.

Clause 5.—(DISPOSAL OF OBJECTS.)
The Economic Secretary to the Treasury (Mr. Edward du Cann): I beg to move, in page 3, line 6, to leave out from beginning to end of line 7 and to insert:
(c) in the opinion of the Trustees the object is unfit to be retained in the collections of the Museum and can be disposed of without detriment to the interests of students.
This Amendment covers a minor but none the less, the House may think, an

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important point. It has been tabled by my right hon. Friend the Chief Secretary in satisfaction of an undertaking which I gave during the Committee stage and which, I think, will be remembered particularly by the hon. Member for Islington, East (Mr. Fletcher).
During the discussion on Clause 5 the Committee discussed an Amendment which the hon. Gentleman tabled to delete the word "unfit" and certain other words and to substitute the words
"of any interest or value to students."
I do not think I need at this time of the night rehearse the discussions which we then had except to say that I pointed out at the time, inter alia, that the wording which we were using in the Bill followed closely that of the Act of 1807 which has stood the test of time to a substantial extent, the House may think. I promised to look again more closely at the wording of the Bill and, in particular, at the wording of this subsection, and in view of that assurance the hon. Member for Islington, East was good enough to withdraw his Amendment.
To sum up, this Amendment has been tabled to meet the point of the hon. Member for Islington, East and I hope he will think, as I do, that perhaps it gets the best of both worlds. It retains the old wording while at the same time putting in the additional safeguard for which the hon. Gentleman asked. I should say, finally, that this is a matter which we also discussed with the Trustees, as I said we would and they are happy with the proposed wording.
Mr. Fletcher: As the Amendment follows almost precisely what I suggested in Committee upstairs, I naturally cannot take any objection to it. On the contrary. I am grateful to the Minister for having used the interval to satisfy himself of the desirability of accepting the principle we urged on him then. The words that are now suggested meet to the fullest extent the improvement we desired in the Bill, and we are very glad the Amendment has been proposed.
Amendment agreed to.

Clause 7.—(SEPARATION OF NATURAL HISTORY MUSEUM.)
Mr. Houghton: I beg to move, in page 3, line 35, to leave out Clause 7.
I feel that I must move the Amendment, especially as my right hon. Friend the Member for South Shields (Mr. Ede), in whose name the Amendment stands, is not able to stay with us to complete the Bill tonight.
This matter was quite fully debated during the Committee proceedings and there were divisions of opinion on both sides. The Amendment to delete this Clause from the Bill was rejected by a narrow majority. I understand that since then there have been further discussions with the Trustees, and that they are not unanimous on the matter either. It therefore remains a contentious point, and the purpose of moving the Amendment is not to have a long debate, or to press the House to divide on it, but to keep this matter sufficiently alive to encourage further discussion on it in another place.
If there are further arguments to be adduced, or fresh opinions to be expressed before the Bill is finally disposed of, it may be as well for them to be fully deployed in the remaining stages of the Bill elsewhere. There are, I believe, some weighty opinions to be expressed in another place by Trustees who have deep knowledge of the problems of the Museum, and who may be against the separation of the Natural History Museum from the British Museum and the appointment of separate Trustees.
In the Standing Committee we had a very interesting debate in which I played a very minor and undistinguished part, because we got to marrying the arts and a kind of transcental—
Mr. Robert Cooke: Transcendental.
Mr. Houghton: That shows that I was ill-equipped to take part in this erudite discussion on this Amendment in Committee, so I beg to withdraw from it now.
Dr. Stross: too, will not speak at length. A number of hon. Members raised this matter on Second Reading, and the longest discussion in Committee was on this point. The Committee divided, and we were defeated, although we had the assistance of one hon. Gentleman

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from the other side. Generally, though, I agree that we should leave the matter to be discussed in another place.
The Chief Secretary used an interesting argument as to why we should avoid alienation of the Trustees when we discussed manuscripts. He spoke of the value of the Trustees, and said that if they think strongly about a matter we should think carefully before we oppose them. When my right hon. Friend the Member for South Shields (Mr. Ede) spoke on this matter in Committee upstairs he referred to a letter from the Trustees, one paragraph of which read as follows:
"The Trustees expressed a hope that their views might be placed on record when the Bill was debated in Parliament, and that it should be stated that it was not at the wish of the Trustees that the total separation of the two Museums should take place."—[OFFICIAL REPORT, Standing Committee A. 12th March, 1963, c. 102.]
I naturally quote those words to remind the Chief Secretary that one cannot have it both ways on two Amendments—that is to say, if we are to consider the views of the Trustees on one Amendment we should as closely consider them on the next. I hope that he will bear in mind the fact that the Trustees feel strongly on this issue, and that the Economic Secretary gave us some hope when he said that there would at least be some common Trustees in the two institutions. If there is anything we can be told tonight that will give us a little comfort we shall be very glad of it.
Sir Richard Thompson: We had a very interesting discussion on this Clause in Committee. At this hour I will not seek to reopen it, but I hope that my hon. Friend the Economic Secretary will hesitate before thinking of amending the Bill simply by dropping the Clause. I agree absolutely that considerable disquiet has been expressed by many of the Trustees that there should be a total separation between the two bodies responsible for governing the two Museums in future. I understand that argument, but we do not put the matter right by pulling out this Clause, because we are then driven back to Clause I, in which we have a body of 25 Trustees, most of whom will presumably be chosen because of their supposed suitability for running the affairs of the British Museum in Bloomsbury. By no stretch of the
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imagination could that body be stretched to include the administration of two quite different types of institution.
That is my real objection to deleting the Clause, although I go a good way with the hon. Members who have spoken in believing that we have not necessarily heard the last word on how we might achieve, in the final structure of the Bill, some sort of connecting link between the two bodies of Trustees. Whether it is best to leave the matter to the two bodies, with an expression of hope from this House that they will form a coordinating body of the two sets of Trustees, or to write something into the Bill to provide for this, I cannot say. Perhaps there will be some further reference to this matter in another place. But it would be a great pity if the homogeneity of the Museum up to now should be entirely shattered.
I do not think that: getting rid of this Clause would be an acceptable solution; it would drive us into an altogether worse situation. I hope that my hon. Friend will tell us whether he has had any further thoughts on the way in which these difficulties might be resolved.
11.0 p.m.
Mr. du Cann: The hon. Member for Sowerby (Mr. Houghton), the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and my hon. Friend the Member for Croydon, South (Sir R. Thompson) has reminded us of the discussion we had in Committee about this matter. I find no paradox in that we should be discussing it again tonight, if only shortly, for it is indeed a most important matter. I entirely agree with my hon. Friend the Member for Croydon, South that we cannot solve the constructive problems we want to solve for the future simply by dropping Clause 7.
I flatly disagree with the hon. Member for Sowerby when he so modestly said that he made virtually no contribution to our discussions on this point in Committee. That was very far from being the case, as hon. Members on both sides will remember well. One of the sentences in his intervention was followed by the word, in square brackets, "Laughter". It takes a great deal to achieve that in HANSARD, as we are all aware. My right hon. Friend the Chief Secretary says, "Try to get it in now". That is a challenge I willingly accept and I shall do my best in a moment.

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There are a number of points I have been asked to discuss and I hope that I shall give some reassurance to hon. Members here tonight. The first point is one which again was made by the hon. Member for Stoke-on-Trent, Central in Committee with all the feeling of which he is capable when he quoted the Act of 1753. He made the point that all arts and sciences have connection with one another. I can assure him that it is not the wish of the Government in any sense to dispute that. Nothing could be more important. On the other hand, we do not believe that the proposal in the Bill will in any way drive a wedge between the two cultures or the two Museums. All that is proposed is that these two great and growing institutions—which are still growing and, we hope, will continue to grow—in future will have the opportunity further to develop. That, we believe, can best be achieved by a separation of some sort. I said something about the logic of this proposal and something about precedent during Committee. I will not go into those matters again, but I hope the hon. Member will feel that I can give him the most sincere reassurance on his point.
The hon. Member for Sowerby—here I hope I give the direct contradiction of his most modest statement—made the point in his short intervention in Committee that perhaps the separation of the two Museums to some extent would strengthen the hands of the Treasury. He went on to say, by inference, that the greater the fragmentation the more possible it would be for the wicked Treasury—I presume he had that adjective in mind—to divide and rule. I assure him that the arrangement in our opinion and experience is far more likely to work the other way and that two separate bodies of Trustees putting pressure on the Treasury for more money might well succeed in getting more in the aggregate. This is by no means a promise and I would not wish it to be construed as such, but I do not believe that the suggestion he made would be likely to apply; indeed I believe the reverse would be the case. In spite of that demerit, we think it right to persevere with this idea.
A little earlier I used the word "constructive". We were particularly fortunate in Committee in having a number of constructive and helpful proposals and
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among them were some made by my hon, Friend the Member for Croydon, South with his great experience as one of the Trustee body. I was asked particularly about the common membership of these Trustee bodies and gave the Committee some definite assurances on that point. I can now be even more definite and say that my right hon. Friend the Prime Minister has been consulted on the matter and has intimated that it will certainly be his intention to try to find some persons willing to serve on both bodies. Not only was that point noted and remarked on, but action is proposed on it. I hope that will be reassuring and satisfactory to the House.
My hon. Friend the Member for Croydon, South made a further constructive suggestion, which was supported by hon. Members on both sides of the Committee, that there should be consultative machinery. We agree that this proposal is valuable and important. We have, of course, taken advantage of the opporunity to discuss it with the Trustees. They are entirely in sympathy with the proposal and we are certainly prepared to commend it to the two new boards of Trustees when they are set up. The creation of such machinery should be one of their first tasks. I therefore reassure the House in regard to this particular matter.
Something has been said, particularly by the hon. Member for Sowerby, about the position of the Trustees, and the hon. Member for Stoke-on-Trent referred especially to that. As the hon. Member for Sowerby said, there are mixed opinions among the Trustees. We do not have the position in which the Trustees are unanimously opposed to this proposal. It would be quite wrong to suggest that. I am grateful to see the hon. Member for Stoke-on-Trent, Central nodding in agreement. I think that it is typical of that distinguished body of people, who truly have the future, the development, and the ideals of the British Museum so closely at heart, that they should be anxious and concerned about the future. I am sure the House would think very much less of them if they were not considering the matter with great care and caution. We are certain that this change will prove to be in the eventual interest of both Museums.
To say again something I said in Committee, I do not believe—nor does my

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right hon. Friend—in change for change's sake. But we do believe in change where there is opportunity for improvement and for progress. We believe that this development, the establishment of the two separate Boards of Trustees, will mark a new stage in the history of the British Museum and will give both Museums the opportunity to move forward and to develop to their fullest extent, which is, I am certain, whatever views may be held on this point, the common aim of every hon. Member and certainly every hon. Member who pays particular attention to the needs and future of the Museums.
I hope that what I have said will reassure hon. Members who have spoken and convince them that we are most concerned for the future to see great success made of this proposal.
Mr. Houghton: In order to leave this matter unprejudiced in another place, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified].
11.7 p.m.
Mr. du Cann: I beg to move, That the Bill be now read the Third time.
As has already been indicated, we had a most useful and interesting discussion of the Bill in Standing Committee. It produced some valuable Amendments and some equally valuable suggestions, which, though they were not all suitable to be written into the Bill, are certainly well worth while having on record so that they can be kept in mind and acted upon by those responsible, whether it be the Government or the Trustees to be appointed in future under the Bill. It seemed to me that the Committee's approach to the whole matter contained in the Bill was that of a working party whose sole object was to co-operate in producing the best possible Bill. Perhaps I may be allowed to say how deeply grateful I was for all the courtesy and understanding I received while in charge of the Bill in Committee. I particularly appreciated the bipartisan approach which is typical of the approach of the House to the arts in general.
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A number of questions arose on which I promised to think further in consultation with my right hon. Friend the Chief Secretary to the Treasury and to have discussions with the Trustees. Some of those have been covered in the short debates we have already had this evening. Perhaps I may now mention the others briefly. Arising out of the discussion in Standing Committee on Clause 3, we promised to consider whether it might be wise or expedient to define the Trustees' responsibilities for management a little more closely. We have discussed this with the Trustees and they agreed with our feeling and with the view expressed by the right hon. Member for South Shields (Mr. Ede) in Committee that the Bill already gives as much guidance as is desirable, for example in regard to the use of lending powers, and that for the rest it is probably best to leave the Trustees the maximum discretion. The whole keynote of the Bill is streamlining and flexibility. In some fields it may be desirable to be more specific than in others. However, we believe that we have the balance about right.
I particularly remember the right hon. Gentleman saying that we must not tie the hands of the Trustees. I think that if it is the wish of the House that we should appoint as Trustees the most distinguished and most important men we can find with a true sense of responsibility and dedication, it surely must be right to put our trust to the fullest possible extent in them.
An Amendment was accepted earlier to meet the point made by the hon. Member for Islington, East (Mr. Fletcher) on Clause 5 (1, c). This undoubtedly improves the Bill and I was grateful for what he said in this regard.
We have also promised to look again at the whole construction of Clause 5 in the light of the suggestion made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies)—who has advised me that he cannot be here tonight—to the effect that the Trustees should have powers to dispose of objects which are adequately represented by other objects in the collection. There are difficulties about doing this, without giving wider powers than anyone would think desirable. The Trustees have told us that they would not wish to have such powers and that they would be most

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reluctant to make use of them. In these circumstances, we believe that hon. Members would agree that the best thing would be not to pursue the idea further.
Part of the idea which my hon. Friend the Member for the Isle of Thanet had in mind was that of encouraging the Trustees to make surplus objects from the collection available to other museums. The Trustees will be able to do this by using the fashionable lending powers—I say "fashionable" because lending is properly becoming more fashionable these days—contained in Clause 4.
The hon. Member for Derby, North (Mr. MacDermot) raised a point of considerable importance in Committee when he suggested that rather than build a new library in Bloomsbury it would be more sensible to design the proposed new building for exhibition purposes and use the library in the existing building. It is an interesting idea which we considered with care. It is clear that plans are very well ahead, and a good deal of detailed preparatory work of a complicated character has had to be done. The hon. Member for Derby, North will be aware that if we accepted his idea the whole project might be set back substantially, perhaps for some years. We think, therefore, that the balance of advantage lies in carrying through the proposal as we have constructed it at present. However, we will look into his suggestion and we are grateful to him for making it.
The hon. Lady the Member for Flint, East (Mrs. White) made the plea that when the Museum is disposing of duplicates they should be offered to other national collections. This is an important point and I can assure her that it is in the minds of many people. We are assured that the Museum is always ready to bear in mind the needs of other national collections.
The subject of display has been raised in many of our discussions and has been a thread, so to speak, running through the speeches of many hon. Members. We are all agreed about the uniqueness and world importance of the collections in the British Museum, not only in the Department of Oriental Antiquities and the Department of Ethnography, but also in other departments. The Museum is
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well aware of this. There is a great deal of scope for improvement in the display of these treasures in certain instances. As I say, the Museum is conscious of this and gives much thought to it. Progress is being made in this direction.
A ten-year plan of reconstruction and rehabilitation, worked out between the Museum, the Ministry of Public Building and Works and the Treasury, is being put into operation. I hope that the House is as pleased to receive this news as I am to give it. This programme includes a scheme of modernisation of the ethnography rooms; and a post of Display Officer has been approved. It is hoped that a person with special qualifications will soon be appointed.
When a great deal has to be done, it cannot all be done at once. We are endeavouring to make a constructive start on matters which are obviously urgent. The House can rest assured that the Government do not under-rate the importance of this work. We hope and expect that the Museum will be assisted in making progress as a result of the provisions of this Bill and what has been said in our discussions on it. That applies especially to the subject of display.
It is fair to say that there has been a wide measure of agreement over the Bill—with one exception which we discussed earlier—and such disagreement as we have had has been, I think, on matters of detail rather than principle, though some of them have been of some importance. I hope that hon. Members will agree that we can congratulate ourselves on having produced a constructive and workmanlike Measure. As my right hon. Friend the Chief Secretary said on Second Reading, we have made very nearly a clean sweep of the complicated structure of British Museum legislation which has been built up over 200 years. I hope that the House will feel that we have preserved the best of the past while introducing forms and powers which look very much into the future.
I remember the hon. Member for Stoke-on-Trent, Central saying especially that he hoped that this legislation would last for another 200 years. Well, that is a long time ahead, but the point is valid. Let us hope that this legislation does as much as the other did, and proves a solid foundation on

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which progress can be built. The British Museum is a great national institution. It is the wish of the Government, it is the intention of the Government, and of this House, that it shall continue to flourish, to grow and to improve for the delight and instruction of our people.
11.16 p.m.
Mr. Fletcher: The Economic Secretary was kind enough to pay tribute to the assistance that he had received from my hon. and right hon. Friends and, while appreciating what he has said, I should also say that we on this side acknowledge the sympathetic way in which, since the Bill was introduced, the hon. Gentleman and his colleagues have responded to the numerous suggestions we have made on Second Reading, in Committee and tonight to improve the Bill—and not only that, but to make detailed suggestions in regard to the organisation of the British Museum generally. If I may say so, the Minister has just made a valuable and important statement about the functions of the Museum, and has given us information about some of the projects immediately in hand.
There is only one of his remarks with which I might, perhaps, quarrel. He hoped that this Measure would last for another 200 years. I think that one of the values in the fact that the Government have had to introduce this Bill this Session has been that it has enabled hon. Members—and, through them, public opinion—to focus attention on the problems of the British Museum, which would not have been the case had the Bill not been necessary. Since I think that the ventilation in Parliament of some of the Museum's problems is very desirable, and proves valuable to the Trustees, I hope that we shall not have to wait for another two hundred years before the British Museum can be discussed again.
Whatever else the Bill has done it has, as the Minister himself recognised, enabled not only the Trustees but the Government to learn of the great concern felt in all parts of the House that the British Museum should fulfil the great traditions expected of it by the public, and to maintain the place it is entitled to hold in the affection and esteem, not only of the people of this country but of scholars and visitors from abroad.
As was pointed out from both sides on Second Reading, it is, unfortunately, not
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true that all has been well with the British Museum in recent years. The Economic Secretary has himself recognised that, and I think that we should stress on Third Reading that, apart from the other matters to which the Minister referred, perhaps the most important new feature in the new constitution is that there will be a new set of Trustees, smaller in number, and the majority to be appointed by the Prime Minister. We were assured by the Economic Secretary that they will be men of standing, scholarship, eminence, stature and integrity.
Those were the hon. Gentleman's words, but he assented when I suggested that those five qualifications were not enough, and that the Trustees should also be men of independent judgment, able to stir up the Treasury to make the necessary financial contribution to enable them to make good some of the deficiencies of the British Museum in the past few years, and to fulfill the objectives we all have in mind.
The debates in this House have done something, at least, to convince the Government that so far as there have been defects in the administration, the running, staffing, improvement, display and reorganisation of the British Museum in recent years, it has been not so much the fault, if at all, of the Trustees, but rather because of a lack of adequate funds from time to time from various Treasury Ministers.
We are entitled to derive the hope, from the speech which we have heard tonight and from other speeches on the Bill, that the present Ministers realise this and that the House may be assured that in the months ahead the Treasury will be forthcoming to enable the trustees of the British Museum to put in hand without delay this important project of reorganisation which is planned and also to enable the Trustees to have adequate funds to remove the existing staffing deficiences and to extend the possibilities, which undoubtedly exist, for greater and better display.
11.21 p.m.
Mr. Robert Cooke: I rise briefly to support the Third Reading of the Bill, but I hope that it will not be another 200 years before the hon. Member for Bristol, West has the fortune to catch your eye, Mr. Speaker.

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The Bill will make a living and lively institution out of the British Museum and I welcome it for that reason. Indeed, it is to make the Museum available to the plain man, to men far plainer than the hon. Member for Sowerby (Mr. Houghton), however self-effacing he may be.
I do not share the worries of some hon. Members about the separation of the Natural History Museum. There seem to be quite adequate safeguards for more or less dual control, or, at least, the interchange of ideas between the two institutions. When two members of a family grow to adulthood, surely they want to go their own independent ways, even if they still retain connections of one sort or another.
I hope that the work and ideas of the family trustees whose benefactions and services over many years to the British Museum are notable, will not be altogether lost and that, perhaps, in some informal way, these people could be kept together and their connection with the Museum maintained, even if they cannot all be reappointed as trustees.
I am delighted to think that hon. Members opposite, even if they are not satisfied with the Bill as it leaves this House, at least feel that another place still has a function to perform in this modern age. Perhaps, when tomorrow comes, they will not be quite so stringent in their strictures on that other place, which, like the British Museum, can live in a new age.
11.23 p.m.
Mr. Niall MacDermot: I wish to develop a little further a point which I touched on in Committee and to which the Economic Secretary has been courteous enough to refer. I thank him for his courtesy. I do not thank him for his remarks, which were unwelcome to my ears, and I only hope that my few remarks tonight may extract an undertaking from the Chief Secretary that the matter will be considered further.
What I should like is that the matter should specifically be referred to the new Trustees when they are appointed for them to consider afresh. The point is this. One of the principal reasons for the Bill is to enable part of what is now housed in the British Museum to be
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moved elsewhere. There is not enough accommodation in the building to house the Library and the various Departments of Antiquities. They both need to expand, they both need new and better premises. The question is: which should be moved, the Library or the Departments of Antiquities? The provisional decision which has been taken so far is to move the Library, and it is this decision which I wish briefly to question.
I think that it is clear that, whichever is moved, it is unlikely they can all be moved to one new building. That in itself seems to me to be an argument for moving the Departments of Antiquities and not the Library. There are obvious advantages in keeping the Library together in one place if it can be done. There is much greater need for the Library to be complete, cohesive and in one place, than for the Departments of Antiquities.
There is no reason whatever why we should not move them out to galleries spread around London—indeed, they need not all be in London—housing different branches of the antiquities. There is no reason why African art, the Egyptian art, the classical Greco-Roman art should be displayed or housed in the same building at all. There is no need for them to have the same kind of buildings. The kind of building which is required, for example, to house ancient Egyptian statues is obviously not the same kind of building as is required to house the unrivalled collection of coins such as the British Museum possesses. These seem to me at the outset strong arguments for considering moving the Departments of Antiquities rather than the Library.
The other question is this: are we really to make better use of the existing premises? I can quite understand that if the library department—I know that that is not its correct official title, but it is a convenient way of referring to it—is given the choice, "Would you like to stay where you are, or would you like to move your main part to a brand new, modern, specially designed building?" it would naturally favour a modern building. So, of course, would the Departments of Antiquities, but surely the point is this.
The present building's structure, broadly speaking, consists of a square

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in the centre of which is the world-renowned and historic Reading Room under the central dome, and between that Reading Room and the outer square in which for the most part are housed the galleries—between these two—there is an intricate labyrinth, I understand, of corridors and storage space used for the storage of books. If the Library is moved out the accommodation which is at present being used for the Library will really be useless, I understand, for the purposes of the Departments of Antiquities. They cannot satisfactorily be converted or used for those purposes.
The Departments of Antiquities are not in need of greater storage space. The crying scandal is that so many of our antiquities are housed in storage, and are not on display. What is needed is greater facilities for display. On the contrary, what the Library needs is greater storage space, and greater storage space central and near to the building where the books will be required—the Reading Room. There are also needed additional facilities for specialised reading rooms. Scholars have need of additional reading rooms. If the antiquities were moved from the present building surely this outer square could be developed both for storage of books and, more probably on the first floor, for the construction of specialised reading rooms. In this way it would be possible to keep all the Library together.
If the present proposal goes through, what shall we have? We shall have the main Library across the road, on the south side of Great Russell Street, I understand. We should then have new the Science Library, constructed somewhere on the South Bank. We should then have the storage spaces at various places—somewhere out near Stanmore, I understand, for one collection; another lot being moved to Woolwich Arsenal.
Is this really the best way in which to house this unique and incomparable library collection—scattered in that way? Would it not be better to use the present building for housing the Library? Then we could look forward to an improvement in the Library and also at last to the construction of proper galleries for displaying the antiquities. If the present proposal goes through, I feel most pessimistic about the prospect of hon. Mem-
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bers seeing in their lifetime proper display facilities for the antiquities of the Museum.
The present galleries were designed, unfortunately, at a time when people had somewhat grandiose ideas about what constituted a suitable place to display objects of art. One knows the difficulties with which museums struggle when they have eighteenth and nineteenth century buildings in which to display their objects. I understand that none of the present galleries can be converted to have, for example, air conditioning installed, and that is a necessary feature for the proper display of many works of art.
If we made the decision the other way round we could have a piecemeal progression with advantage accruing to both sides, for the Departments of Antiquities and for the Library, and steady progress could be made on both fronts. If we continue the present arrangement, it will be highly expensive, we shall get some initial advantage for the Library, but still not a really satisfactory solution for it, and it seems to me that a satisfactory solution for the Departments of Antiquities will be hopelessly delayed.
No doubt there are many other arguments the other way. I have put forward one side of the case. The only argument the other way that we have so far heard this evening is "Well, our plans are so far advanced now that if we were to change the decision it might delay the matter even for some years." Surely the House will agree that on a matter of such importance, if the decision which has been taken is wrong it would be better to delay for a few years in order to get the right decision, because whatever decision is taken now will determine the future of the Museum for 100, if not 200, years, and it is vitally important to get the right decision.
All I ask is that the Government will agree that this is a matter which should be referred to the new Trustees to investigate fairly and dispassionately. If they confirm the view that the right decision has been taken, so be it and I for one will be content. But it would be a great tragedy if we were merely to persist in a decision which may be the wrong one without giving the new Trustees the opportunity to look at it again.
11.34 p.m.
Sir R. Thompson: Although the family Trustees are exterminated by the provisions in the Bill, I must honestly say that I think it is a very great improvement on the present arrangements, and of all the many British Museum Acts that we have had since 1753, this Measure is by far the most important since the original Act.
Two things emerge from it which will enormously enhance the reputation and public standing of the Museum. The first is the reformation of the Trustee body. Although I have reservations about that which I have expressed in Committee and on the Floor of the House, I am sure that in the end the whole administration of the Museum will be sharpened and made more effective by being more closely focused half of it on the Bloomsbury portion and the other on the natural history portion.
I am certain that the substitution of a more up-to-date Trustee body will have an immediate effect. After all, well though the Trustees have done in the past, it is not really sensible that a body deemed appropriate for the days of Dr. Johnson should necessarily be quite the right one to tackle the enormous complexities of this business today. This new body has a tremendous chance, if it is wisely chosen, to raise the public esteem of the Museum and make the people feel, as scholars have always felt, that this is a tremendous and priceless national institution unequalled anywhere else in the world.
The second feature of the Bill which will be of enormous value to the public is the wise use of the power to lend. I am sure that, if it is used wisely, the provincial museums and collections which will presumably qualify for the display of certain things from the main collection will benefit enormously by having this rich reservoir of treasure to draw on. As the hon. Member for Derby, North (Mr. MacDermot) said, so many of these things, through sheer lack of space, cannot be shown, or be adequately shown. Let them go round the provinces so that some of our less well-endowed and humbler institutions far from London can share in the great national glory that has reposed so far solely in Bloomsbury.
Again, the knowledge that this greatest of all museums will be able, in certain
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instances, to lend its treasures overseas on appropriate occasions will inspire a reciprocal reaction in other collections abroad. One good turn deserves another. We may see as a result the most splendid things in this country which would otherwise never be sent here on the grounds that, as the British Museum did not lend its treasures, other people should not lend their treasures to us. We may see things that our people have never had a chance to see before.
For these two main reasons, I believe that we are doing a good job with the Bill. I welcome what my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) said about the contribution in the past of the family Trustees. I urge the Economic Secretary to consider the suggestion I put earlier, that in some way these family Trustees may be associated, if they wish, with the continuing affairs of the Museum. I am not saying that they should have a hand in its government, or that a penny of public money should be spent that has not been spent before.
The fact remains, however, that the great glories of the Museum were founded on these collections given to it, and it seems rather hard and churlish that because these gifts were given so long ago—my own family's contribution antedated the original Act by many years—we should say, "We have the stuff, now get out." That attitude is not necessary and, I am sure, is not intended. It should be possible in some way, and at no public expense, to continue to recognise the very great treasures with which we have been endowed as a result of what these families did in the past.
I would like to pay tribute not only to the Economic Secretary on his handling of the Bill, but also to the staff of the Museum, of which I know a great deal. I speak of the Director down to the humblest employee. They are a quite remarkable and devoted body of people of whom we should be very proud. They have not had an easy task. They have been desperately short of money. They have suffered greatly from long unrepaired ravages by enemy action. They have had great difficulties of display and have been undermanned and overcrowded.
They have not always had a fair crack of the whip from the public and the

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newspapers, who have been very quick to describe them as "stuffy" or out-of-date or unimaginative—all the easy adjectives which come so readily when one does not really know all the facts. But they have "worn" all that and I am quite certain that the effect of the Bill will be a great stimulus to morale.
May I just say, remembering what the hon. Member for Sowerby (Mr. Houghton) said When we were having a little discussion on whether they would like to be called civil servants or not, and without quarrelling with the hon. Gentleman in any way, that there is an enormous status symbol in calling oneself an officer or a servant of the British Museum? When one asks them what they would rather be called, they say, "Well, we belong to the British Museum and we want to be known as officers of the Museum."
My own experience when abroad, and when I have visited a foreign museum, has been that the fact that I was a Member of this House carried great weight, but when I have said that I was a Trustee of the British Museum that was the moment when the curator came rushing to the door to greet me. So one can see how proud these people are of being associated with this great institution.
Now that we are changing the administration of the Museum, I think that our final word should be one of gratitude for all that these people have done.
11.42 p.m.
Mr. Boyd-Carpenter: Before the House finally parts with the Bill I should like to add a very brief word to this debate and, first, as my hon. Friend the Member for Croydon, South (Sir R. Thompson) did, to thank hon. Members on both sides for the helpful, co-operative and constructive way in which our discussions have been carried out throughout.
I should like to go further than my hon. Friend and to thank many people outside for the very hard work and the very valuable work which they have contributed to the Bill. I should like to thank the members of the Standing Committee of the Trustees who have given us their advice and counsel and, in particular, not only the right hon.
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Member for South Shields (Mr. Ede), to whom I have already referred, but his colleagues, particularly the noble Lords, Lord Radcliffe and Lord Hurcomb.
I should like to add my thanks to the staffs and officers of the two museums who have been enormously helpful with advice and guidance. I should like, too, to thank those Trustees whose position is affected or changed by the Bill for their forbearance and kindliness in this matter. You, Mr. Speaker, are of course one of the ex officio Trustees, indeed a Principal Trustee, whose position with that of your colleagues as ex officio Trustees has been affected by the Bill and who have shown great understanding, kindliness and help to us in a matter inevitably, in the circumstances, of some delicacy.
Then there is my hon. Friend the Member for Croydon, South, who is, as he reminded us, one of the family Trustees. I will confess to the House that when we were considering the drafting of the Bill I felt it went very much against the grain to end the 200-year association of the family Trustees with the Museum. It is a very long and honourable connection beginning with splendid gifts by the six families to the Museum in its very early days. I, for one, felt, as I told my hon. Friend, very considerable regret and reluctance that the hard logic of the thing in deciding a new constitution for the Museum in the second half of the twentieth century forced us to the conclusion that the family Trustees as such should not continue.
I should like to take this opportunity, if I may do so without impertinence, not only on my own behalf, but on behalf of many British Governments over a very long period, of extending gratitude to the family Trustees for the personal service which they have given to the Museum and, through it, to the community, and also, long ago though it is, to thank them for the splendid gifts which were the very base and foundation of what is now one of the greatest national collections in the world.
I would refer, if I may, to the observations of the hon. Member for Derby, North (Mr. MacDermot), who, I know, has taken a great interest in the future plans for the development of the Museum.

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As he said, the plans for the new Library on the new site, to which I referred at greater length on Second Reading, have been long prepared. Much thought and consideration has been given to them, and it is true that to change them at this time would undoubtedly impose very serious delay in coping with the problem of the Library under immense pressure of space. None the less, the hon. Gentleman is right. In a matter of this importance that could not be a decisive consideration if the merits of the matter went plainly otherwise.
I am bound to say that I pay great attention to the fact that those associated with the Museum in recent years, after profound thought and study and consultation with many people outside, have evolved a plan of this kind. I would not like anything that I said tonight to indicate that the necessary processes which must go forward, the acquisition of the land, and so on, were likely in any degree to be checked.
I think that it is a good plan, and I have very little doubt that it will be carried out, but in reply to what the hon. Gentleman said, not only on that issue, but on the wider question of the general layout of the Museum—his suggestion of decentralising the antiquities in some measure—it is the fact that the provisions in the Bill—I think that it is Clause 9—in respect of various repositories gives a wide power, by Treasury order, with the consent of the trustees, to designate future places in which some of the treasures may be held and displayed. We are looking to a long-term future, and I think that that gives a proper flexibility, foreseeing that at any rate some of the hon. Gentleman's ideas may become more attractive and perhaps more inescapable in the years ahead.
As to the Library project, the Government feel that this is the greatest major contribution which we of our generation can make to the British Museum, and I should be deeply disappointed were there to be any check or delay in going forward with it.
That brings me to the remarks of the hon. Member for Islington, East (Mr. Fletcher), about finance. The capital cost of the new Library building will be
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about £10 million, and the Natural Science Reference Library on the South Bank will cost over £1 million. The regular grants on the British Museum Vote have risen very sharply in recent years. As recently as 1952–53 the net Vote was £350,000. For the current year it is £1,122,000, and I think that this is an indication of our acceptance of a great deal of what the hon. Gentleman said as to the necessity to provide well and generously for the proper development of the facilities and display arrangements of this great institution. I very much hope that this process will continue.
I think that we are all agreed on the great historic importance of this Measure to the Museum and all that the Museum stands for. Had that not been our view, it would, as the House will recognise, have been impossible to obtain time for it in the programme of a very busy Session. But we took the view, which I think the House accepts, that it is of major importance to give to the British Museum the legal foundations for the expansion of the Library and the use of its new premises, to give it an up-to-date, and, as my hon. Friend said, streamlined constitution, to modernise its lending power and power to make arrangements of one kind and another, and thereby to enable this institution—which I described in the Second Reading debate as perhaps the greatest of our national institutions—to have very considerable support, such as Parliament can give, for the great developments that I am quite certain lie ahead of it.
The Museum has been served for two and a half centuries by Trustees and officers of the greatest devotion, skill and ability. It is so served today, and with the service of those who serve it now and those who will serve it in the future I believe that it can become an even greater part of the cultural life of this nation than it has been in the past. If, in some small measure, this Bill helps it in this task, I do not think that the House will have spent its time in vain.
Question put and agreed to.
Bill accordingly read the Third time and passed.

CALDON CANAL, STAFFORDSHIRE (CLOSURE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
10.51 p.m.
Mr. Harold Davies: After the interesting and valuable discussion we have just bad on the British Museum I must take the House to a matter of local importance, although it is linked in a way with the general problem of transport.
In many ways as well as being a historic day for the British Museum today will be a historic day for British transport. Apparently the British Museum is short of space. If it wants some repositories in which to place its priceless possessions I suggest that it might be able to make use of some of the 2,000 railway stations which will not be used any more if Government policy goes through.
I am grateful to the Parliamentary Secretary for waiting so long for this Adjournment debate. At least, he has been able to hear a very interesting debate on the British Museum. I wish to raise with him a matter of vital local importance, concerning the closure of our canals.
Our canal and railway systems are in danger. Their accumulated value today—they having been built in the old days, when only pick, shovel and muscle power were available—must be thousands of millions of pounds. Not long ago we introduced a Bill which brought the control of the canals under the British Waterways Board, and we are still waiting to know what the exact policy will be.
Before considering the case of the Caldon Canal, in North Staffordshire—and especially the most beautiful part of it, which is in my constituency—I want to consider the general position. We have about 1,600 miles of canals, about 1,100 miles of which are narrow gauge. This means that the locks through which the barges have to pass can take only narrow-gauge boats—perhaps 70 ft. long, and only about 7 ft. wide, carrying a load of about 30 tons.
Every mile of canal that is closed will cost the Government £10,000.
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The canal in which I want to interest the House this evening is about 17½ miles long, and it links up with the Trent and Mersey systems. The nation must not sacrifice everything to the god of Mammon. I hope that I shall not be departing from Parliamentary language when I say that it is no good bitching about Beeching if we expect a system to work merely on a profit margin.
Although I do not agree with what is being done about the railways, whatever Government are in power must have the courage to co-ordinate railways, canals, roads, shipping, all kinds of transport. We must realise that these canals are not only of material value. There are 400 or 500 miles of canals which are earning money and of material value, but there are 1,000 or 1,100 miles of canal which are of immeasurable aesthetic value because of their peace and quiet They make long ribbons of green park which are natural reserves for fauna and flora. In some parts of Britain the only bit of greenery is along the towpath of the canal.
About 3 million fishermen fish from the banks of inland waterways. This is of immeasurable value to people who can rest at week-ends after working arduously on tasks demanding speed and amid a cacophony of noise. Are we to sacrifice all this in the name of profit? A famous and beautiful canal at Llangollen has been closed to cargo, but now it is a marvellous stretch of water used by pleasure craft for the enjoyment of large numbers of people. The canal I am speaking about tonight is a stretch which is as beautiful. I know Europe and many other parts of the world. I believe this is one of the most beautiful stretches of canal in Britain and, may be, in Europe. If it is to be closed, is it to be made a great ribbon of concrete? If we want only efficiency, why not run all transport on broad stretches of black asphalt?
In the general principle of the closing of the Caldon Canal and of the canals throughout the Trent and Mersey system, compensation is a vital issue. There are three categories of compensation which the Waterways Board will have to consider. The first is the compensation of common law. The next is the interests protected under the original canal Acts. I have spent some time in research in the Library going through many of those Acts, but in this short debate I cannot

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go into that in detail. There are also the rights of people using land on the banks, farmers and others, and their interest in maintenance of culverts, bridges and drainage systems. All this has to be taken into consideration and it makes up the cost of £10,000 a mile in the closing of a canal.
As the Parliamentary Secretary will know, there is a new tendency in agriculture, strange as it may seem considering the rainfall, to have a system of irrigation. Irrigation for agriculture is growing and canals are of great value for this purpose. We beg the Minister to make sure before these canals are closed that he is not acting illegally. At present, the Caldon Canal is not closed to navigation. The Leek section was closed by legislation which was pushed through this House in 1944, in the midst of war. At present, there is not commercial transport on the canal, but not long ago five commercial boats were using it. They had to stop, because nobody now accepts the responsibility, despite the Act under which they are liable, to maintain the canal in a navigable state. In law the Caldon Canal is not closed to navigation. It cannot be closed, unless an Act of Parliament is passed.
I feel sure that the Parliamentary Secretary will agree that it would be a tragedy to close all these beautiful stretches of canal, despite the fact that they may not have commercial cargo. Will he explore the possibility, together with other bodies, one of whom I will mention later, of keeping canals open in some areas, especially canals near great industrial areas, for fishermen, pleasure craft, farmers, for drainage purposes, and for others?
There is, first, the original purpose of the canals—to carry commercial transport. There is, secondly, the supply of millions of gallons of water daily to industry, some of which, as I shall show later, could be of vital consequence to local employment. There is, thirdly, the fact that canals are needed to dispose of effluent from some factories. Canals are of great value for fire-fighting services. There is also the possibility in the future of canal towpaths being used for pipeline development.
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The aesthetic use—namely, use by anglers—is well known. Anybody going to the Midlands and other parts of Britain at certain times of the year can see in progress the great angling competitions which are carried on on the canal banks. There is also the use to which canals are put by pleasure craft. Today, 30 firms deal in the hiring of cruisers and pleasure craft.
This week I have looked at the programme of the Stoke-on-Trent Boat Club. I have had no time to study it properly. It is a magnificent and expansive programme, offering to such an industrial area pleasurable activities in the fresh air and in some of the most peaceful areas which can be found in that country.
Close these canals, and for the young and the old this wonderful amenity will disappear. We must not measure these matters all the time in terms of pounds, shillings and pence. Sometimes—as in my area when we had a drought—the canal is an excellent emergency supply of water for farmers. It is a magnificent means of land drainage, which in this valley is essential. If this canal is blocked or ribboned with concrete, the entire drainage system of the valley will create a problem for engineers and local authorities, and there will be danger of flooding.
I have been talking of historic monuments. This canal was the last job of James Brindley. If the House wishes to preserve a historic monument to Brindley, let it preserve this one. This was the area in which he worked. He lived in the main town of Leek, in my constituency. He worked on this canal and died whilst building this famous section of it. It was built originally for the limestone from the Caldon quarries and to connect with the Trent and Mersey Canals. It went up to the mills at Froghall.
I wanted to make sure that I knew my facts. I wrote to the famous copper firm of Thomas Bolton and Sons Ltd. They replied, saying:
"The River Churnet feeds the Caulden Canal at Consall, some two miles above our Froghall Works. The water we use therefore emanates from the river and, of course, from any seepage from the hills direct into the Canal. We take water from four points on the Canal for steam raising to heat our factory and for process work, including water for cooling purposes on plant. Recently a landslide has necessitated

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the British Waterways to dam off a 100-yard section of the Canal some 400 yards from our Works, but in order to keep us supplied with water they inserted a length of 18"dia, pipe. If the Canal is closed and emptied, then no water would feed through the above pipe and this would close down the Boiler House, and the closure of the factory would result in unemployment for 1,600 people."
This proves that there is a vital economic reason for keeping this canal in this glorious valley. This famous copper works, developed in the last century, needs the canal to maintain the output of its products and to keep its staff in employment. The Minister may be interested to know that this firm deals with English Electric Ltd. and the Standard Telephone Company.
Unfortunately, time does not allow me to develop this part of my argument at length. I hope that the Ministry will seriously consider this matter and that the Parliamentary Secretary will tonight be able to assure the House and the people in this area—and he has received a petition from 12,000 of them—that no action will be taken without discussions having been held, particularly with bodies such as the National Trust and others, which realise that while this canal cannot be kept open in isolation, it should be included in the list of British waterways which need not be abandoned.
If a loan—of £10 million or even less—were made to the National Trust the canal could be kept open and that money could be returned at the rate of about £2½ million, perhaps, for sixty years. I hope that the House and the people of North Staffordshire will receive an answer tonight which will give them hope that this lovely stretch of inland waterway will be kept open for the use of our people.
12.8 a.m.
The Parliamentary Secretary to the Ministry of Transport (Vice-Admiral John Hughes Hallett): The hon. Member for Leek (Mr. Harold Davies) pointed out that he has had to wait for some time for this Adjournment debate. I was comforted by the thought while he was speaking that, wherever the Library of the British Museum may be, his words in introducing the subject, and mine in reply, will be recorded there for ever.
I would like to begin by assuring the House that we recognise that transport
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is by no means the only purpose for which canals can be used. We agree that they are of value for many other purposes, such as for water supply, drainage, recreation and fishing. But they do not necessarily have to be kept open for commercial navigation to enable those uses to continue. The hon. Member for Leek will recall that in the 1959 White Paper on Inland Waterways the Government endorsed the views of the Bowes Committee on the need for a positive approach towards the redevelopment of canals. This lay behind the setting up of the Inland Waterways Redevelopment Committee, which did much useful work from 1959 until last year, and it is now the statutory duty of the new British Waterways Board to review canals and prepare proposals for putting them to the best use.
As the 1959 White Paper indicated, the Government consider that those who benefit from such use of canals should pay a fair price for what they receive. The hon. Member said that it would be retrograde to dismiss the Caldon Canal as "uneconomic" and I would agree that it could be said to be a thing of beauty and a historic monument. But so are many other parts of our canal system. It is the maintenance of hundreds of miles of derelict canals that have carried no traffic for years that largely accounts for the present operating deficits on the nationalised inland waterways.
It is quite true that statutory obligations to maintain canals and statutory rights of navigation can be extinguished only by a further Act of Parliament or by a Warrant and Order of Abandonment from my right hon. Friend the Minister. However, the Transport Act, 1962, has suspended for five years the liability of the British Waterways Board to maintain any of its inland waterways in a better condition as regards navigation than it was in the six months ended 2nd November, 1961. This was done to give the Board time to formulate and carry out its policies.
I am not quite sure whether the hon. Member has raised this matter on the assumption that the Caldon Canal was threatened with immediate closure to navigation, but I can assure him that that is not the case. I am aware that various local bodies interested in canal preservation have organised a campaign to save the canal from closure. This campaign

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is, I believe, based on an alleged public announcement that the Waterways Board intended to restrict the use of part of the canal and to close the remainder. No such announcement has been made, and there is no foundation for any belief that the canal is under immediate threat of closure to navigation. As I have said, the statutory rights can be extinguished only by Act of Parliament or by an application to my right hon. Friend. No application for closure has been made either by the British Transport Commission or, subsequently, by the Waterways Board.
On the legal issue, the hon. Member may have felt that the exclusion of this canal from the scope of pleasure-boating licences is an attempt to deny the existence of statutory rights of navigation. It is not for me to interpret the law, but the view of the Board is that there is no public right of pleasure boating on most of its artificial canals, including this one. The Board considers itself entitled to say that certain canals, which it does not regard as suitable for pleasure craft, are excluded from the terms of its pleasure-boat licences, and that this is quite a different thing from closing a canal to navigation. It considers that, apart from special rights of riparian owners, it is only commercial traffic which, generally speaking, enjoys statutory rights of navigation—and then only subject to the five-year moratorium to which I have referred.
The hon. Member has mentioned the importance of the water supplies from the canal to agriculture and industry, particularly the supply to Bolton's copper works. The importance of water supplies to all the consumers involved is fully recognised and, indeed, the water supplies to consumers in the Milton area provide by far the greater part of the remaining income on this canal. The supply to Bolton's works is not particularly remunerative to British Waterways, but its usefulness to the firm is well known to the Board, and it has recently discussed with the company how to ensure the continued availability of the supply. I do not therefore think that the hon. Member has much to worry about on this score.
The hon. Member suggested that there was a firm in the Consall area that tried to continue use of five boats from Etruria, but was unsuccessful because the
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canal was not maintained to statutory obligations. I think that he has been misled about the facts in this case. Since 1953, there has been no commercial traffic beyond the first half-mile. Such traffic as there was, left the canal for the roads. In 1955, however, on the assurance that an independent carrier would convey 100 tons of pottery material a week from Runcorn, via Etruria, to Consall, British Waterways carried out improvements at a cost of £5,000, so that barges drawing 3 feet of water and carrying 18 tons could navigate to Consall. After this had been done, the traffic never materialised.
There also seems to be same misconception about the value of the assets in the canal. The hon. Gentleman did not himself refer to this, but it was mentioned in a letter circulated by the Caldon Canal Committee on 6th March, a copy of which was kindly sent to the Minister, and which said that the Committee had been
"… given to understand that the canal has been valued at £20,000,000 in the national assets …"
The Committee went on to argue that it was
"foolish to let this go if the waterway can be restored for a figure between £10,000 and £20,000."
So it would be. Those figures, however, are not correct. We have no knowledge of the original construction cost of the canal, but I can say that the present book value of the whole 1,800 miles of the nationalised inland waterways system is only about £20 million.
If restoration were to be carried out to full commercial standards it would cost about £160,000. Restoration to slightly lower standards for pleasure traffic would cost about £140,000. Either course would involve an increase of several thousand pounds a year in the maintenance bill, without taking into account the interest charges.
Mr. Harold Davies: I should like to know whether the Ministry is negotiating with the National Trust.
Vice-Admiral Hughes Hallett: I was giving the cost of restoring the canal as a navigable waterway. I will come to the hon. Gentleman's point in a moment.
Those estimates of the cost of restoration are much greater than the estimated

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cost of possible alternative methods of redevelopment. To give one example, it is estimated that by spending £78,000 the canal could be partly restored as a water channel and partly eliminated and that a modest working surplus could probably be maintained from the sale of water. I mention these figures only so that the House will be under no illusion that it would be cheaper to restore the canal for navigation than to redevelop in some other way.
The hon. Member has referred to the information about the canal which the Waterways Division submitted to the former Inland Waterways Redevelopment Committee. It is true that this dealt with a number of possibilities for redevelopment. It referred to closure to navigation, the retention of part of the canal as a water channel and the disposal of the remainder. This was mentioned as a possibility. The Committee ended its existence, however, on 31st July last year, before reaching the stage of making any formal report.
Moreover, one of the prospects which the Committee tentatively considered was the possibility of transfer to the National Trust. Preliminary discussions had already taken place between the Trust
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and the Committee, but they had not been pursued because the Trust understood that there was no immediate prospect of closure.
The new Board will certainly have to consider the future of the Caldon Canal and will, no doubt, produce its proposals. What these proposals will be can at present only be a matter for speculation. The hon. Member may be sure, however, that the Board will bear very much in mind the points which he has raised tonight and the views which the local bodies have expressed to my right hon. Friend.
Mr. Harold Davies: And the National Trust?
Vice-Admiral Hughes Hallett: The Board is also willing to consider any proposals that the National Trust may wish to make for the leasing or purchasing of the canal. I hope that in what I have said, I may have gone some way to allaying the hon. Gentleman's misgivings.
Mr. Davies: Yes, certainly. I am obliged.
Question put and agreed to.
Adjourned accordingly at nineteen minutes past Twelve o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Common Land (Temporary Enclosures)
  Common Land (Temporary Enclosures)
  Egg Marketing Board (Elections)
  Egg Marketing Board (Elections)
  Milk
  Milk
  Freedom from Hunger Campaign
  Freedom from Hunger Campaign
  Insect Pests and Plant Diseases
  Insect Pests and Plant Diseases
  Agricultural Executive Committees, Dorset and Somerset (Staff)
  Agricultural Executive Committees, Dorset and Somerset (Staff)
  Beef
  Beef
MINISTRY OF DEFENCE
  Civil Servants (Defence Work)
  Civil Servants (Defence Work)
  New Department (Headquarters)
  New Department (Headquarters)
ROYAL NAVY
  Officers and Ratings (Liability for Service)
  Officers and Ratings (Liability for Service)
BRITISH ARMY
  Royal Ordnance Factory, Nottingham
  Royal Ordnance Factory, Nottingham
  Arms Production (Reserve Capacity)
  Arms Production (Reserve Capacity)
SCOTLAND
  Aberdeen Harbour
  Aberdeen Harbour
  Education, Aberdeen
  Education, Aberdeen
  Icy Roads (Rock Salt)
  Icy Roads (Rock Salt)
  Severe Weather Conditions (Damaged Roads)
  Severe Weather Conditions (Damaged Roads)
  Discharged Offenders (After-Care)
  Discharged Offenders (After-Care)
  Physiotherapists (Salaries)
  Physiotherapists (Salaries)
  Trawler Owners (Interest Payments)
  Trawler Owners (Interest Payments)
  Hospitals (Geriatric Patients)
  Hospitals (Geriatric Patients)
  Derelict Sites (Clearance)
  Derelict Sites (Clearance)
  Store Cattle (Marketing)
  Store Cattle (Marketing)
  Electricity, Western Isles
  Electricity, Western Isles
  Airdrie High School
  Airdrie High School
  Primary School, Shawhead
  Primary School, Shawhead
  Rates
  Rates
  New Towns (Houses)
  New Towns (Houses)
TRANSPORT
  Transport Operators (Costs)
  Transport Operators (Costs)
  Town Centres (Committee's Report)
  Town Centres (Committee's Report)
  North-East
  North-East
ROADS
  Planning
  Planning
  Trunk Roads and Motorways (Traffic Lanes)
  Trunk Roads and Motorways (Traffic Lanes)
RAILWAYS
  Railways Board (Proposals)
  Railways Board (Proposals)
EMPLOYMENT
  School Leavers, Slough
  School Leavers, Slough
  Average Weekly Earnings
  Average Weekly Earnings
  Gateshead and Northern Region
  Gateshead and Northern Region
  Psychologists
  Psychologists
  Defence Work
  Defence Work
  SPAIN (MISS CHRISTINE KEELER)
  SPAIN (MISS CHRISTINE KEELER)
TRADE AND COMMERCE
  Cereals and Meat
  Cereals and Meat
PUBLIC BUILDING AND WORKS
  Historic Buildings (Grants)
  Historic Buildings (Grants)
SCIENCE
  Plutonium
  Plutonium

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

COST OF BEET SUGAR
2.35 p.m.
LORD WALSTON: 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 is the cost per ton of raw sugar made from domestic sugar beet.]
THE JOINT PARLIAMENTARY SECRETARY MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (LORD ST. OSWALD): My Lords, according to the British Sugar Corporation, the cost of raw sugar of 97·5 degrees polarisation delivered to refiners from the 1961–62 beet crop was £53 9s. 7d. per ton before taking account of duty, preference and surcharge.
LORD WALSTON: My Lords, I am grateful for that Answer.

ADDRESS OF PRISONERS ON EMPLOYMENT LEAVE
2.36 p.m.
LORD STONHAM: 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 prisoners who are given home leave prior to release, for the purpose of obtaining employment, can be given an accommodation address for the use of prospective employers instead of the address of Her Majesty's Prison.]
THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE): My Lords, I do not think this would be a desirable arrangement. The successful employment of prisoners on release depends on mutual trust and good will between prisoner
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and employer, and prisoners are encouraged to be frank with their prospective employers. Lack of complete frankness with employers from the outset would, in my belief, tend to make resettlement more, not less, difficult.
LORD STONHAM: My Lords, while I support the noble Earl's view in this matter, may I ask, first, whether he is not aware that in many jobs the man's work is his character? Secondly, in other cases, where the employer is fully aware of the man's circumstances and has to write to him, writing to gaol informs half the staff; and that is wholly undesirable and a handicap. Will the noble Earl consider that point of view?
EARL JELLICOE: I will certainly consider the second point that the noble Lord put, but at first view I am not, I must confess, fully able to see why informing the staff should be a handicap to the prisoner in this matter.
LORD STONHAM: My Lords, I can assure the noble Earl that it is. But is he aware that a baby born in Strange-ways Gaol is not registered as being born in gaol but as at No. 11, Southwell Street, Manchester? Is that case not exactly parallel and for the same obvious reason? Will he take note of that point for consideration?
EARL JELLICOE: My Lords, I do not think the parallel is very exact. The baby is not immediately going to seek employment.
THE EARL OF GOSFORD: My Lords, may I ask my noble friend whether the employer-employee relationship would not surely be satisfied, provided the employer himself knew the fact that the individual in question was an ex-prisoner? Why should it be broadcast to the typists and everybody else? It seems to me that there is no necessity for that, and that it would be to the man's detriment, not his good.
EARL JELLICOE: My Lords, I could not agree more with my noble friend, but the important thing is that there should be complete frankness between the prospective employer and the prospective employee. Provided that frankness is safeguarded, then I should be willing to look into any other possible arrangements which can be brought about. But I think it is quite essential, whatever

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arrangements we make in this respect, and whether or not we change our arrangements, that we should safeguard this principle of complete frankness.
LORD STONHAM: My Lords, is the noble Earl not aware—he should be aware—that in almost all these cases a man is released from prison precisely to go to see a prospective employer who knows he has come from prison: there is no question of lack of frankness? I am merely asking that when an employer has to write to a man about a job he should not have to write to Her Majesty's Prison but to the address of that prisoner, so as not to broadcast the fact that a chap who is going to be employed with the firm in future is an "ex-gaol-bird".

TESTING OF DRUGS
2.40 p.m.
BARONESS SUMMERSKILL: 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 when they propose to establish an organisation independent of the pharmaceutical industry empowered to subject drugs to an adequate test before they are distributed, having regard to the recent warning from the industry that Imipramine and Marzine may cause fœtal abnormalities.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (LORD NEWTON): My Lords, my right honourable friends the Health Ministers expect to receive shortly a further Report from the Joint Sub-Committee on the Safety of Drugs, and they hope then to make a statement.
BARONESS SUMMERSKILL: My Lords, but we have been told this, time after time. Does not the noble Lord recall that last week, in the debate on toxic chemicals, the noble Lord, Lord Douglas of Barloch, the noble Lord, Lord Sempill, and myself asked, once again, that an independent authority should be set up, but neither the noble Viscount the Minister for Science nor the noble Lord who wound up the debate deigned to answer the point?—although then I said that on
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the market there were drugs which were being sold to and taken by young pregnant mothers. On Friday the industry warned the doctors that drugs which have been sold in this country for nearly ten years have now, and only now, been submitted to testing on pregnant animals. The doctors were warned that if these drugs were distributed to women they might cause fœtal abnormalities. Is this not a proof that this is a matter of the greatest urgency?
LORD NEWTON: Of course, this is a most important matter, but it is not at all a simple mattter, and I think the noble Baroness realises that. I am sorry, but she will have to be patient for a little while.
BARONESS SUMMERSKILL: My Lords, I am sorry to ask another question. How can the noble Lord reconcile his answer—saying that it is not a simple matter—with the fact that immediately following the thalidomide tragedies America introduced legislation of the kind for which I am asking? Scandinavia did the same, and many other countries have recognised that if the industry is given this free hand then it appears it gets irresponsible and is prepared to put on the market, and keep on the market, drugs which have never been subjected to adequate testing.
LORD NEWTON: My Lords, I do not think it is reasonable to say that anybody is irresponsible or has been irresponsible about this matter, whether manufacturers or members of the noble Baroness's own profession who prescribe so many of these drugs. It is not a simple question, if only because the noble Baroness's question to me is concerned with subjecting drugs to adequate testing before distribution. She herself knows that the two drugs she mentioned have been distributed for years. Imipramine, for instance, has been on the market for over four years and is obtainable on prescription only, and Marzine for ten years. Whatever machinery we may have for securing that drugs are tested adequately before distribution, there will always remain the risk that drugs that have been available and used for many years may be discovered to have side effects which previously may not have been envisaged or discovered.
BARONESS SUMMERSKILL: My Lords, has the noble Lord seen the circular which Burroughs Wellcome sent to all doctors in this country, saying what he says: that these drugs have been circulated for many years but only now have they been tested on pregnant animals? I am saying that the Ministry should have said that all these drugs should have been taken off the market until a test was made on a pregnant animal.
LORD NEWTON: My Lords, I know about the statement of the chemists, but the fact is that all we can do, when a drug has been in use for many years, and something new is discovered about it, is to see that adequate warning should be given. There is nothing else we can do about it. And that is what has been done in the case of these two drugs.
LORD SILKIN: My Lords, may I draw the attention of the Minister to the terms of the Question which, by implication, assume that there are new drugs and that this Committee will be investigating new drugs before they are distributed? The question of existing drugs is another problem.
LORD NEWTON: My Lords, I am much obliged to the noble Lord. That is precisely what I was trying to say to the noble Baroness, not very successfully, in one of my earlier supplementary answers. The point is that in the Question she refers first to the testing of new drugs before they are placed on the market, and then goes on to refer to two drugs which, as I have explained, have been on the market for years. I am obliged to the noble Lord for emphasising this.
BARONESS SUMMERSKILL: My Lords, that makes the matter even worse. They have been on the market for years; yet, after the thalidomide incident, they have not been retested on pregnant animals.
BARONESS HORSBRUGH: My Lords, could the noble Lord say when a new drug becomes an existing drug?
LORD NEWTON: My Lords, when it is no longer new.

THE RAILWAY BOARD'S PROPOSALS
EARL ST. ALDWYN: My Lords, I should like to inform your Lordships that my noble friend the Leader of the House will be making a statement about the Railway Board's proposals at a suitable moment after 3.30 o'clock. May I take the opportunity of informing your Lordships that dinners are available this evening?

BUSINESS OF THE HOUSE
EARL ST. ALDWYN: My Lords, on behalf of my noble friend Viscount Hailsham, I beg to move the Motion standing in his name on the Order Paper.
Moved, That Standing Order No. 35 (Arrangement of the Order Paper) and Standing Order No. 41 (No two stages of a Bill to be taken on one day) be suspended until the House adjourns for the Recess at Easter.—(Earl St. Aldwyn.)
On Question, Motion agreed to.

CONSOLIDATED FUND (No. 2) BILL
Bill read 2ª (according to Order). Committee negatived. Then, Standing Order No. 41 having been suspended (pursuant to Resolution), Bill read 3ª, and passed.

AGRICULTURE
2.48 p.m.
LORD WILLIAMS OF BARNBURGH LORD WILLIAMS OF BARNBURGH rose to call attention to the state of agriculture; and to move for Papers. The noble Lord said: My Lords, in view of the paramount importance of agriculture to our national economy, we thought it right and proper to provide an opportunity for your Lordships to discuss the subject, particularly following the recent Price Review. Your Lordships will notice that the Motion is very wide, because we are anxious that a large number of Members, particularly Members opposite, will have an opportunity to say something to urge the Government into activity in certain directions.
This is an annual event which enables us to re-examine the economic condition

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and prospects of the agricultural industry and to make our individual and collective assessments of the wisdom of past decisions and of the latest decision announced two weeks ago. It would be an extraordinary feat if the Government and the agricultural unions were to agree on the determinations every year. On the other hand, it seems regrettable that there has been disagreement on the Price Reviews in three out of the last four years. There can be no doubt at all that the industry has good reasons for resenting a continued situation where, despite increased efficiency, increased capital expenditure and increased output, the real value of its net income continues to decline. Fortunately, failure to agree does not foreshadow non-co-operation, strikes, lockouts, and industrial chaos in agriculture, as all experience has gone to show, and I think it is to the eternal credit of the industry that it has remained steady, despite the set-backs at the hands of the Government which it has suffered over these last several years.
In the White Paper (Cmnd. 1968), which I have no doubt will be referred to many times during the day, are the following words:
"A further substantial increase in agricultural output is forecast for 1962–63."
So that, despite disagreements, agriculture continues to carry on, and output continues to increase; and I think it is now taken for granted that it is increasing year by year. But that does not mean that the Government can afford to carry discontent too far. Even the farming community, which I have described for many years as the best political suicide club in the country, must have a limit to their patience. In previous debates, I have tried to demonstrate that the Government were aiming to keep the net value of our agricultural income down to about the 1948 level, despite increased output and increased efficiency, and the result of the recent Price Review seems to confirm that opinion. However, it is not my intention to pursue that argument in detail. All the facts are available in the White Paper, and I leave it to noble Lords to reach their own conclusion as to what has been happening and what happened on this occasion at the Price Review. I shall content myself by drawing your Lordships' atten-
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tion again to two sets of figures which I gave in your Lordships' House some three weeks ago. The figures are given on page 14 of the White Paper.
The actual net income for 1948–49 was £297½ million; the actual net income (or, at least, the estimate) for 1962–63 is £408 million. But, according to the Treasury the 1951 pound is to-day worth about 13s. 11d., say 14s., so that the £408 million for 1962–63 is equivalent to only £284 million in 1951 value. Therefore, the farmers begin to feel like the fellow who is running up an escalator that is moving down—the harder they try, the more slowly they move. As I see it, the failure to agree on this occasion was due to the indisputable truth of those figures. The Government contend that they are being generous by leaving the value of guarantees unaltered, despite an increase in cost to the Exchequer, and the farmers contend that to leave the values unaltered in the face of rising costs and lower farm incomes is unfair to an industry whose prosperity is not keeping pace with efficiency. As the Financial Times said on March 14:
"It was not a disagreement about details, but about agricultural policy in general."
I think that is true. Certain of the items in Schedule 1 will be referred to, formulas applied and so forth, but I think that, generally, what is stated in that extract is the truth. However, the same leader, in the same paper, on the same day, also said this:
"Britain needs reasonably cheap food as well as a reasonably prosperous farming industry. We can afford neither to abolish agricultural guarantees, nor to keep out imports of food from the Commonwealth and elsewhere. A compromise must be worked out between the interests of home producers, the Commonwealth, foreign farmers and our own consumers."
I would only add to that comment my Lords, that means must be found to avoid gluts and scarcity and wildly fluctuating prices. When we talk about stability, we mean stability; and it is impossible to have stability when such incidents as are happening at this moment are taking place.
As the President of the National Farmers' Union said last Sunday week on television, the price of beef is 25 per cent. less than it was last year, and the cost to the Treasury goes on soaring sky high. He then posed the question: What would happen if the price of motor cars

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fell by 25 per cent. almost overnight? I can answer that question for him. There would be deputations from Dagenham, Luton, Oxford, Coventry, Birmingham, Liverpool and elsewhere, and the Government would have to sit up and take notice. Their inhibitions would not prevent them from acting in face of an industrial barrage of that description. I shall return to that point later.
But this Price Review has been interesting for more reasons than one. For example, thanks to ever-increasing efficiency and increased capital investment, we have reached a stage where, with some commodities at least, the new support formula will mean that the more farmers produce the less they will get for them. I suppose that that was inevitable. For example, we are producing 99 per cent. of our supply of eggs, and there seems little or no sense in adding to the volume unless there is a market, here or elsewhere, at an economic price for the excess. The National Farmers' Union have agreed to that proposal. With pig meat it is a different story. We are probably producing less than half our requirement, although we could produce infinitely more. But the same disincentive as the one applied to eggs will also operate for pig meat. This is a very difficult question, and I must assume that the difficulty is largely due to a series of trade agreements with other countries. But whether the Government have reached the right balance between home supplies and imports will remain a debatable question.
That reminds me of the proceedings in the Standing Committee in another place when we were dealing with the 1947 Bill. Conservative Members protested violently against Clause 1, which they claimed implied some limitation to the United Kingdom market by United Kingdom producers; and, of course, they voted against the clause. The offending words were:
" … a stable and efficient agricultural industry capable of producing such part of the nation's food and other agricultural products as in the national interest it is desirable to produce in the United Kingdom."
I remember that one young enthusiastic Conservative lawyer who was a member of the Committee went so far as to describe it as "a fraudulent prospectus". Well, he knew something about law, despite his youthfulness. That young Mem-
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ber was the noble and learned Lord who now sits so comfortably on the Woolsack. Now that the chickens and eggs and pigs have come home to roost and to roast, we do not hold that against the noble and learned Lord. After all, he has now had time to grow up. It would be unkind to ask him whether he is now supporting the limitation of the United Kingdom market to United Kingdom farmers. I would not ask the question, because I should not expect an answer.
I shall not attempt to deal with the wide range of commodity prices and formulæ dealt with in this Price Review, but some of my noble friends with more intimate knowledge will probably have a good deal to say about them. I am more concerned at the moment with the long-term view for agriculture, and what may emerge from the anticipated discussions between the Government and the industry now that the Common Market is no longer a live question. If we are to preserve the basic principles of the 1947 Act, it is generally agreed that steps must be taken to safeguard the Treasury, the producer and the consumer.
How can this be achieved? The Prime Minister, speaking in another place on February 11, suggested conferences and consultations with overseas suppliers, including the Commonwealth. He mentioned long-term contracts, import controls, commodity agreements, which he described as a great hope to avoid price fluctuation. All these suggestions are relevant to the subject, when one looks well ahead. But most of the suggestions made on the 11th of last month could have been applied many years ago, solutions found and applied, and the chaos we are now in could have been avoided. But speed, except for wrong causes, has never been the chief characteristic of Conservative Governments. Owing to their apathy or indifference, a situation exists at this moment which must be causing both alarm and despondency to both the Chancellor of the Exchequer and the Treasury.
Now I come back to the price of meat, to which I referred a moment ago. Meat is 25 per cent. lower in price than it was at this time last year. The increase of deficiency payments, which are due to these excessive supplies, I am informed have amounted to £750,000 per week, instead of just over £300,000 per week

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which was agreed upon at the Price Review. That is the sort of penalty the country and the taxpayer are paying for the apathy or disinterestedness of the Government, and not, as most people seem to imagine, to some defect in the machinery of the 1947 Agriculture Act. I think I should make it crystal clear, that however high the deficiency payment may go, the farming community will not receive one single penny extra. It simply means that they receive more from the Treasury and less from the market because of conditions the Government have allowed to arise. It is a situation which the farming community dislike as much as the taxpayer himself. They thoroughly dislike it because they know that they are always abused, quite misguidedly by most of the Press who make references to agriculture in their newspapers.
For month after month, and particularly since the breakdown of the Brussels talks, the two main farming weeklies have been headlining our weakness once again, and calling for appropriate action. Moreover, noble Lords will recall that the Sub-Committee of the Estimates Committee in another place last year issued a very clear warning, when they wrote in their Report:
"The Department has no powers to control the pattern or marketing, or the timing of imports and it was these factors which caused the most violent falls in market prices."
It is these same factors that have caused the rapid fall in prices during February and March of this year.
The Report goes on:
"Your Committee considered that so long as the market prices are liable to be affected by uncontrolled imports so long will it be impossible to submit estimates based on the present system of deficiency payments with any degree of accuracy."
What have the Government done about it? So far as I can understand, they have sent a couple of love letters to the Argentine and Yugoslavia, but nothing else. I should imagine that those love letters have been popped into the wastepaper basket. It is an unfortunate situation. It could have been, and indeed was, anticipated many years ago. Our own increase in production of meat was a guiding light.
I mentioned in my speech three weeks ago that since pre-war our production of beef and veal had increased from 568,000
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tons to 867,000 tons; mutton and lamb from 195,000 tons to 267,000 tons, and pigmeat from 435,000 tons to 745,000 tons. That has been a continuous process. The increase did not come in 1962, 1961 or 1960; the amount has been gradually increasing over the years. Of course, the Board of Trade and the Ministry of Agriculture must have known about it.
Having said all this, I am not unmindful of our obligations to EFTA countries, GATT and to any other countries with whom we have trade agreements. But surely that is no excuse for doing nothing and for just allowing things to rip until they reach the stage we are in at the moment. It is time now for action, for the nation can no longer afford long-drawn-out and interminable discussions on this urgent problem. I regard it to-day as a problem which is almost outside Party politics, and which could be kept outside Party politics if the Government would only act, which it is very difficult to persuade them to do. I do not think, and I have never thought, that simple import duties on food, or simple free trade, could solve a problem of this description. It is not quite so simple as that. Speaking for myself, three weeks ago I ventured to make what I hope were constructive suggestions on what I thought ought to be done to meet the situation. Of course, I have received no answer since then, and I am not terribly optimistic that I shall get one to-day. Perhaps we shall be told that those love letters to which I referred have at least been noticed, and that these exporting countries might conceivably be a little more sympathetic now that the horse has got through the gate and the trouble has been created.
If some of the newspapers this morning, are correct in what they report when they say that 70 Conservative Members are bombarding the poor, wretched Minister of Agriculture, who has no power to take any steps at all, there is obviously trouble within the Conservative Party over this matter. Nevertheless, I suggested that to deal with this urgent problem the Government should, as quickly as possible, set up a commodity commission for meat on the lines recommended by the Lucas Committee of 1947—a commission of impartial, authoritative persons, acting for the nation, whose

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main duties would be planning, coordinating and timing of imports with the home supplies, thereby avoiding gluts and scarcity and wildly fluctuating prices.
The Lucas Committee reported when food was in short supply. But even then they realised that sooner or later there would be an increase in the production of meat, both at home and abroad; and they saw the weakness of the situation with a wide open door and yet no means of co-ordinating or timing supplies with imports, which could involve the Treasury in vast payments. We know what happened last year, and we know that the Government have done nothing about it. We know that when the situation arose a month or so ago, the poor Ministry of Agriculture were helpless in the matter, although not unnaturally they got most of the blame. I repeat that the deficiency payment is running at two-and-a-half times what is should have been with normal, well-advised timing of imports to ally them with what we produce in this country. I think this is a task not, as many noble Lords may think, for the Board of Trade, but for a comparatively small commodity commission who could not only take the right view about imports but the global view including, perhaps, exports, too.
Since 1953, when the Government announced their policy of "setting the people free", the Board of Trade have had ten years in which to provide safeguards for the Treasury, producer and consumer. Their minds seem to have been as empty as Mother Hubbard's cupboard. They have done nothing about it. In my view, this is a task which ought to be undertaken by a body outside the Board of Trade, a body who would be acting for the nation in the largest possible sense. I would only add to the commodity commission a producers' meat marketing board, working in harmony with the commission and providing information on supplies, present and prospective, which could be of great assistance to any such Commission, when set up. Finally, as I said three years ago, a carefully sited series of factory abattoirs would complete the machinery for the complete efficiency in the marketing of meat.
If a Labour Government had remained in office in 1951 I am perfectly certain that this would have been the next stage in our agricultural policy—a commodity
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commission for meat and a similar commission for wheat—and I am convinced that it would have saved the nation scores of millions of pounds without adversely affecting the consumer. It would have reduced much of the misguided criticism about the farming community, helped to rationalise and modernise our trading relations with other countries; and strengthened the basic principles of our support system.
LORD ECCLES: Before the noble Lord passes from this point, may I ask a question? Is it the idea of the noble Lord that this commission should have control over the volume of imports; and, if it did, what would happen to the commercial treaties with the countries whose exports to us were restricted?
LORD WILLIAMS OF BARNBURGH: I am rather surprised that the noble Lord should feel disposed to ask such a question, for he knows that a commodity commission such as I have described would be set up jointly by the Board of Trade and the Ministry of Agriculture and would be responsible to the Board of Trade for all its activities. Consequently, it would not be the commodity commission finally who decided the issues; it would be the commodity commission who negotiated with exporting countries so as to get a sense of balance with imports and the needs of the consumer population. That would obviously be the case.
I was about to say that I have every sympathy with the National Farmers' Union in pressing for the establishment of international commodity agreements, and I hope that the Government will give them all the help they can. But, apart from the inevitable delay before anything substantial emerges, such agreements can never be a substitute or a alterative for the sort of commission to which I have referred.
Therefore I hope that the Government, after many years of hibernation will at long last awake from their nineteenth-century dreams, stop shuffling, edging and dodging the column, and do something really worthwhile in the national interest and do what seems obvious to everybody in the country—except, of course, the Government themselves. In 1951, they promised to "seal the hole in the housewife's purse". They

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failed miserably. Must we add one more colossal failure to the mounting list? I hope that I have been able to show that the Government have not been too generous to the agricultural industry, that their ancient inhibitions and dislike of controls have helped to create chaos in the marketing of meat. In their last dying days as a Government—
LORD STONHAM: A moment's silence.
LORD ST. OSWALD: The noble Lord is shocked by the enormity of what he has said.
LORD WILLIAMS OF BARNBURGH: What I was going to say was: In their last dying days as a Government can they do something to rise to the occasion? Is there anything they can possibly do sharp enough to avoid the complete annihilation of the Conservative Party? I have my doubts, but I still hope for the best. I beg to move for Papers.
3.16 p.m.
LORD HENLEY: My Lords, on whichever Benches one sits it must surely be an honour to follow the noble Lord, Lord Williams of Barnburgh, when we talk about agriculture, because we must all recognise the fact that the noble Lord was the architect of that great Act (although I know that to some extent it was an all-Party Act) and that whatever he says on this matter must be of the very greatest interest and importance to us all. I feel that he has hit the nail on the head here when he asks whether the Government have reached the right conclusions in trying to settle this most important issue of home production and imports. But what seems to me to be the crux of this whole matter is whether we have considered enough how much it is not just a matter of policy for ourselves but the world-wide nature of food and agriculture policy. I think that this is how we must look at the problem from our own point of view.
We know that in the world at this moment there is great poverty and great under-nourishment. The astonishing fact is that to-day there is an even larger proportion of people who are suffering undernourishment than there was twenty years ago, just before the war, when the proportion was something like half. Now, it is something like two-thirds of the popu-
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lation. We know this, but I rather suspect that it is a problem of distribution. It seems to me that if one looks at trends of future yields in agriculture, there is going to be an explosive increase in what world agriculture can produce. Once you apply modern knowledge and education to backward agriculture; once you start putting big capital into it; and once you start applying modern ideas on fertilisers and mechanisation, there is absolutely no reason to suppose that the rather backward agricultural countries in those parts of the world which we now regard as underdeveloped are not going to produce a perfectly staggering increase in food supplies.
In this context I should like to point out how wrong we have been. When I first started to take an interest in agriculture professionally all the experts in the world Food and Agriculture Organisation were talking in terms of a growing world population and a lack of food. The American experts, in trying to evaluate what American increases in agriculture were going to be, made this same mistake. They all said that we were going to improve here at a rate of about 15 per cent., or there at about 10 per cent., and somewhere else at about 8 per cent. Since then, fifteen years later, so far from those percentages being right, the improvement has been something like 80 per cent. or 90 per cent.
That is going to happen so far as world production is concerned. I cannot help feeling that there is going to be a really explosive increase in what we can produce. It is not only in relation to techniques, to improved agricultural ideas, to more capital; it is also in relation to land. One is rather apt to think that we have cultivated practically all the land available to be cultivated. We have not. Although I know something like 60 per cent. of the world's land is desert and tundra and so forth, and only 30 per cent. or so can be cultivated, we have still only cultivated something like 10 per cent. As soon as we start cultivating all that can be cultivated we are going to get the same sort of state of affairs; we are going to get a vast increase in production of food and all that goes with it.
What does this in fact mean? It means that, although there is at the moment great poverty and great under-nourishment, and there are vast areas of the world in which

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the people have not enough to eat, in the course of a generation there is in fact going to be a dramatic increase in the supply and a very much less dramatic increase in the demand. The problem, as I say, is essentially not one of producing more and more food for an admittedly very rapidly increasing population, but one of distribution and regulation. Is not this really the same problem that we are affected with here in the United Kingdom?
It seems to me that the problem that faces us—and we cannot look at agriculture in any other way at all—is, how much are we going to produce in this country and how much are we going to import? It seems to me that any policy that we have must be framed to try to establish the sort of level of production which will make the balance of this right; and I am sure that when the noble Lord, Lord Williams of Barnburgh, said this he was in fact touching upon the nub of the whole problem. I think this is the sort of thing that the Government must make up their mind about—how they are going to tackle this problem, and also how to let us in the agricultural industry know. We do not at the moment know at all. I believe I touched on this question when I spoke for five minutes at the end of the debate on the Agriculture (Miscellaneous Provisions) Bill. I suspected I saw a tendency in the Government's policy here, but I do not know; nor does anybody else in the industry. We do not know what the Government are intending to do, and we want a very definite lead. So far as we in England are concerned we have not very many natural advantages other than possibly meat and milk; and when I say "meat", I include both beef and mutton.
The sort of attitude which the anti-agriculturist might take is, "Well, why are we producing anything in this country at all? Why don't we turn the whole thing into a delightful National Park?". There are, of course, cogent reasons why we might do that, but at the moment the arguments the alter way are really better. First of all, if we have very good agricultural land—and in some ways, with our rain and soil, we have better land than anywhere else—clearly, if we do not use it to the full we shall be wasting something. But I think probably the balance-of-payments argument is the most important here: that without pro-
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duction of agriculture, what we do produce in terms of agriculture in this country, we could not in fact balance our payments. I know quite well that people who use this argument are a little inclined to make too much of it. What they forget is that a great many of the resources which we devote to agriculture could possibly be devoted more effectively to backing up our exports. Again, they rather tend to forget that, so far as primary producers are concerned—and this goes very much for the Commonwealth, and not only the Commonwealth but the ex-Commonwealth countries—if they cannot send food to us they, in turn, cannot buy our exports. If they cannot buy our exports we are still more in the soup. Then I think this argument about balance of payments tends to forget that the more intensive your farming is, the more you have to import to make it intensive. I always feel this very much so far as pigs and poultry are concerned. It is all very well to step up our pig population; it is all very well to try to beat the Danes at that particular thing; but for every side of bacon, every piece of pork, we produce we are importing almost the same amount of feedingstuffs. I do not think that this can help very much towards our balance of payments.
The implication of this, it seems to me, is that our agriculture must be based, not on more intensive expansion but on the low cost—low output idea. Our production costs are already rather more than world costs, and that cannot be a healthy state of affairs. I do not want to confuse this idea of low output with bad farming; do not for one moment think that; it is far from what I mean. It is a different approach to farming, a different way of doing it. But, as I say, the implication of the world situation, so far as we are concerned, is that we must not be aiming all the time at expanding our production at all costs, which was a reasonable idea fifteen years ago, and was a reasonable idea twenty years ago when the war began, but is not now. Now we have to think in terms of trying to reduce our costs even if per acre or per unit it means slightly less in terms of actual output. I cannot help feeling that on all sides of this House there is a growing feeling that this is the right way to approach our agriculture.
I wonder how far the Government—and here I think I echo what the noble

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Lord, Lord Williams of Barnburgh, says—have caught up with this idea. Are the Government moving towards this feeling that we must be thinking in terms of trying to lower our costs, even at the expense of our output? What I felt was disappointing about the Price Review was that there was no indication whatever either way; there was no estimate in the Price Review of what the future balance between home production and imports should be. Again—I think I said this when we spoke about the Agriculture (Miscellaneous Provisions) Bill—although I detected a slight tendency towards production grants, as it were, instead of support subsidies, I nevertheless felt it was a very tenuous trend. The trend was rather towards the small farmer schemes and the farm improvement schemes, which are both a little dangerous. They tend towards production at any cost rather than towards what should be the sort of central policy that we ought to have, that of reducing costs. However, that is to some extent a different problem. It is a problem of where the emphasis on a particular subsidy should be.
I know it is all very well for me to say that it seems to me that the trend towards low costs and low output is a trend that we ought to follow, but it involves certain rather fundamental changes, not only in our policy but in the way we attack that policy. I think that profitability has nothing to do with whether it is low cost and low output, or whether it is high cost and high output. The question of profitability depends much more on whether the balance between things of this sort is the right kind of balance; and, as I understand it, the right kind of balance, so far as agriculture is concerned, is fundamentally as to whether the unit is the right size. So far as structure is concerned—so far as the agricultural industry is concerned, this is a structural problem—I think we are probably better placed than almost anybody else. We are certainly better placed than Europe. We have no really difficult small farm problem here. We have a small farm problem—of course we have—but we have not got it to quite the same extent as it exists in Europe.
I think the same applies to America. America has a much worse small farm problem than we have; many people fail to realise that. They, too. have this
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problem of what to do with the small farmer. They, too, to some extent, have the problem that their unit of agriculture is still geared to the last agricultural revolution but one. We are still all geared to that revolution—I should like to say that this is less so in this country than in Europe and America—geared to the horse and cart. When the modern small farmer is faced with the sort of capital that he must have so far as modern machinery and that sort of thing is concerned, he is in a hopeless position. It just cannot be done. The small farm which worked as a perfectly good family unit 70 years ago, with the sort of machinery that it requires now—bailers, combines, the lot; you have only to look round the farm to see it—just is "not on". That is so far as the small man is concerned. So what I am saying is that the implication of the kind of policy which I feel we must follow tends to make it even more difficult for the small farmer. To some extent we must try to help.
I think there is quite an interesting analogy here with the Inclosures of the middle eighteenth century to the middle nineteenth century. I think all historians would really be agreed that the inclosures were a necessary part of an agricultural revolution; that without them we could never have fed the vastly increased population that came with the nineteenth century. But, unfortunately, what happened with it was that there was terrible hardship. That kind of terrible hardship can to a lesser extent come with trying to amalgamate modern small farms, trying to do away with them. But it seems to me that where we have advanced so much from that is that we now have the idea in our minds and the machinery behind us by which we can prevent this from becoming a disaster. We can help people who have to leave the industry. Is this not one of the aspects of the small farm problem? Not only is there the problem of making viable the small farm which is not viable now—by means of co-operation, machinery syndicates, group buying, and that sort of thing—but we have to help the small farmer who is not viable and who cannot go on, to go out of the industry.
There are various ideas in regard to this matter. The elderly farmer may be

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clinging on to a farm which he should not be in, and he could be helped to buy a house to retire to. There are one or two things like this that could be done, and I think we should be doing them. As I say, the problem is twofold. First of all, we should make sure that the small farms that we do keep on can be made viable in the modern world, with new ideas and new mechanised farming. We should help them to go on and also help them to help themselves. We ought also to help those who cannot and should not go on, to come out of the industry. I think that this problem can be compared with that of the Inclosures, which we all recognised as having been necessary.
So far as the Government have to shape this kind of policy—it is a policy that is not going to grow of itself—it seems to me that agriculture, in regard to the long term, is always slow. In industry you can build a factory in five years, and when you get a new idea in a short space of time, with energy and determination, you can put it into action. You cannot do that with agriculture. In agriculture a generation elapses before any impact is made at all; it takes a generation to put into effect any new idea. So in the modern world we are not going to achieve any results in this way unless there are results which are essentially motivated by the Government.
It seems to me that so far as the immediate problem in our home policy is concerned—as I say, the whole of my speech is really devoted to trying to make us feel that our home policy is essentially a world problem as well, and that it is this world problem that we have to solve—the first and most important thing is some kind of import regulation. We must first simply make up our minds that it is no good having an exceptionally well-planned home agriculture which stems from that great Act of which the noble Lord who has just sat down was the architect, if you have a totally unplanned import situation. Surely, to have this makes absolute nonsense. Take our own friends in the Commonwealth: so far as Australia and Canada are concerned, our market for food is open to them; but so far as our industrial exports are concerned they discriminate against us. Surely in the long run it would be
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in the best interests of the Commonwealth, of ourselves and of anybody else, to get rid of this difficulty. It really is a matter for co-ordination. It seems to me that we can get this right. If we do not get it right we are making nonsense of the whole thing. So much for regulations so far as imports are concerned.
Next, it seems to me that the Government ought to make a definite move in the whole subsidy set-up towards trying to make the system a better one. Let me make it absolutely clear that in regard to the word "subsidy" there is virtually no country in the world where agriculture is not, to some degree or another, subsidised, and in many cases subsidised to a far greater extent than it is here. What I mean is that agriculture is so long term an industry that in the modern world without planning all this can be turned into a nonsense. If you do not plan it you will have a tremendous glut here and starvation somewhere else. So, more than anything else, I have come round to the view of intensified planning from having worked and drawn my living from agriculture for a good many years. Agriculture simply will not work unless you organise it from top to toe.
As I said just now, I want to make it quite clear that when I talk about subsidies I am not talking as an agriculturist holding my hand out for more subsidies. I am pointing out the fact that the whole of agriculture, from Timbuctoo to here, is, and must be, subsidised. Cannot we try to move our subsidies a little nearer in line with those of the Common Market? I feel there is a slight tendency this way. The Common Market, in regard to its subsidies, is rather thinking in terms of the farmer's getting his return from the market and not from the Government.
This has two sides to it which seem to me important. The first is that if you do not get your subsidies in that way you get a false impression of subsidies in relation to agriculture. I hope that noble Lords who speak after me will plug this point. Far too much is being said about agriculture being subsidised. The motor car industry gets a subsidy—admittedly, it is a subsidy in a different direction, which one might say is paid by the foreigner, though this is not strictly the case from an economist's

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point of view; but whatever way you look at it is a subsidy. Anything that can be done to try to move it away from a direct subsidy and back on to the consumer will help enormously.
I know how difficult this is from a political point of view. There exists a kind of inertia. We know perfectly well that the consumer should pay, not as a taxpayer but as a consumer, but one realises how difficult it is to change people's thinking in this way. Food has been relatively cheap compared with other commodities. Whereas we say that a suit of clothes now costs us three or four times more than it did before the war, we do not expect our potatoes and meat to cost us that much. So there appears to be a time lag that will have to be made up by any Government which tries to switch this thing on to a consumer basis; but I am quite certain that it must be done.
I am also quite certain that support prices are bad, because they tend to go into the wrong pockets. Take, as an example, the great "to do" going on about Yugoslavian beef. The butchers are trying to make out that they reduce the price according to the reduced wholesale price. This is a specious argument. They have not done this, nor has this occurred in regard to any of the other fluctuations. Unless there is the most complicated arrangement to prevent it, some of the subsidy will go into the wrong pockets.
Lastly, in regard to the way in which imports should be balanced against home-produced goods, and how subsidies should be made so that they are producer subsidies, and yet not producer subsidies which are going to induce production regardless of cost, we should go about this according to the idea proposed by the Lucas Committee, by having commodity commissions. The noble Lord mentioned these. I have an idea that we on these Benches in fact accepted and supported this idea of consumer commissions, long before the noble Lords who sit to my left. I see the noble Lord shaking his head. He thinks we did not, but I seem to remember that we took this idea up before they did. However, no doubt noble Lords will answer me later on.
LORD WILLIAMS OF BARNBURGH: My Lords, the noble Lord will not be
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aware that in my election address of 1931 I included import boards, which were the equivalent to the commodity commissions.
LORD HENLEY: I am grateful to the noble Lord for pointing out to me what happened in 1931, because I am afraid I was not sufficiently politically alert at that age to have known it. Nevertheless, the crux of this thing is that it is simply nonsensical to plan home production and yet at the same time to leave imports and the rest of it unplanned. It is nonsensical for us to be open to Canada and Australia so far as food is concerned and yet for them to make discriminations against our exports. I know that there is this conflict between Commonwealth farmers and United Kingdom farmers, and I know that in the long run it can be put right only by a planned economy. But the crux of the whole thing is that we must think in terms of how we are going to relate what we produce in the United Kingdom to what we import. This is vital to our agriculture, and is equally vital to industry.

THE RAILWAYS BOARD'S PROPOSALS
3.40 p.m.
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM): My Lords, perhaps this would be a convenient moment for me to break in and deliver the statement which is now being made by my right honourable friend the Minister of Transport in another place. The Railways Board's proposals for reshaping the railway system were published to-day. Copies have been available in the Printed Paper Office since noon. With your Lordships' permission, I will now repeat to the House the statement which is now being made in another place by my right honourable friend. The statement is as follows:
"The Government are greatly indebted to Dr. Beeching and his Board for their comprehensive proposals, which flow from the most massive compilation and systematic analysis of information about our railways ever attempted. We agree that extensive reshaping on the lines now proposed is essential.
"The Report offers a firm prospect of an efficient and modern railway

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system handling those traffics technically best suited to rail. Reductions in the present subsidy of about £150 million will release economic resources which cart be better used in the national interest elsewhere. The Board's aim is, therefore, wholly consistent with our policy of growth, modernisation and redevelopment.
"The Report is a major contribution to the Government's policy of providing an efficient, economic, and well-balanced transport system for Great Britain as a whole. When the new shape and pattern of the railways are clear we shall have a foundation on which we can create such a system. It is not possible to have effective and efficient co-ordination until we have as a basis a modern 20th century railway system.
"In the meantime, steps are being taken by the Secretary of State for Scotland and myself"—
and, of course, the first person throughout this Statement refers to my right honourable friend—
"to see that any additional demands on our roads will be met. I am meeting representatives of the bus operators on 9th April. The Railways Board will consult with the road haulage industry.
"The changes proposed by the Board will affect many people, and further careful study and consultation by the Government is necessary. The Railways Board will, of course, be following the agreed procedures for consultation with their staff. The Government, for their part, will pay special regard to the long-term requirements of particular areas, including those arising from planned movements of population and industry.
"I should like now to deal with three main points. First, freight services. Clearly, rationalisation here is of the greatest importance, not merely to the railways' finances, but to industry and commerce. For example, by reducing rail costs and improving methods of distribution, the Railways Board believe a substantial saving can be achieved on the carriage of some types of coal by rail. On freight generally the Board will discuss the future possibilities with their customers. They will
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also discuss the implications of their proposals with other transport interests.
"Secondly, passenger services: The most controversial part of the plan is the withdrawal of many passenger services. This is necessary if better railway services are to be provided to meet the real needs of the nation. But I must emphasise that, in the procedures to be followed when passenger closures are proposed, Parliament has laid down very extensive safeguards. Under the Transport Act, 1962, each proposal must be published in advance. Objections can be made to the Transport Users' Consultative Committees, which will report to me on any hardship involved. No opposed closure may be carried out without my consent. And I shall take into account all important factors, including social and defence considerations, the pattern of industrial development and possible effects on roads and road traffic.
"The Report makes it clear that in the remoter areas of the country there will be special problems. (This applies not only in Scotland and Wales, but in some parts of England, and to communications with Northern Ireland.) But a widespread network of bus services already exists and I shall see that, where necessary, adequate alternative means of transport are available before a railway passenger closure takes place.
"I recently announced the arrangements for co-operation and coordination made between the Railways and London Transport Boards under the new Transport Act. The Government will closely consider those passages in the Report on suburban commuter services in London and elsewhere.
"My third point is on staff. The effect of the Board's proposals on railway employees must be of special concern to the Board, the unions and the Government. Our railways will require fewer men in future. The best estimate of the total reduction these proposals will give rise to over the next few years is of the order of 70,000. But most of this reduction will be effected by normal wastage and control of recruitment. Actual discharges are not expected to be more than a small proportion of the total

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staff reduction. The number will depend largely on how far it is possible to arrange for men to move to other work and different areas.
"Even so, there will be problems for those displaced. The Government will do ail they can to help in retraining and placing them. We specially welcome the recent agreement between the Board and the unions representing the Conciliation grades. This does two things: first, it facilitates transfers from one part of the system to another; and, second, it provides fair compensation for those for whom work can no longer be found on the railways.
"The Government will proceed speedily with their consultations and discussions, so that we can soon make a fuller statement."
My Lords, that concludes my right honourable friend's statement.
3.53 p.m.
LORD MORRISON OF LAMBETH: My Lords, the House will be obliged to the Leader of the House for the statement he has made on behalf of the Minister of Transport in another place. The Report is only just available to us and, as there are about 140 pages of it, any of us who presumed to talk about it would be very presumptuous. Therefore, we cannot talk about the Report in detail to-day, but a debate will take place in your Lordships' House shortly, when we can discuss the matter more fully.
I should like to ask the Leader of the House—as this point seems to me to be absent from the statement he has made—whether the Government are going to pursue a policy of positive and active co-ordination between the various forms of inland transport. Because in so far as that does not happen, it means that there is a wasteful situation of overlapping between the various systems of inland transport, and we should be glad to have assurances on that point. I have no objection at all to any publicly-owned industry paying its way. Indeed, I prefer that publicly-owned industries should pay their way. It is not going to be easy in the case of the railways, but if it can be achieved legitimately and by proper means, nobody will be more glad than I.
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May I ask the Leader of the House whether there will be the fullest consultation with the trade unions, who obviously have a vital interest in this matter on behalf of their members working on the railway system? It is profoundly important that there should be the fullest and frankest consultation with the trade unions, in order that they may understand the position and that their point of view may be fully considered. It is intimated that a number of services may be discontinued, and I should like to be assured on that matter. I see that the Consultative Committees will be given an opportunity to consider public objections. But I should like to be assured that the Government will watch out for public reactions very carefully, including, if I may say so, the reactions of local authorities who are entitled to be heard upon a matter of this kind.
Therefore, we do not pronounce on this plan at this moment. We shall study the statement and the Report, and be ready to make fuller observations on the occasion of the debate that is to come. In the statement that the Leader of the House has quoted, there is an indication that a further statement or statements may be made by the Government. I should be glad if the Leader of the House would indicate what areas that statement or those statements will be likely to cover, and when we are likely to hear them.
VISCOUNT HAILSHAM: My Lords, I am much obliged to the noble Lord, Lord Morrison of Lambeth, for his approach to this matter. With respect, I entirely agree with him that we really all need to read the Report very carefully before committing ourselves to decisions upon it. It is a document of the utmost importance, and I think we all need to reflect upon it as well as to read it. I agree with the noble Lord that it will be possible to debate the matter fairly shortly—I believe, on a Motion, which is in the name of the noble Lord himself, to be moved on May 1. The further statement by the Government to which he referred will not be made until we have ascertained the views of both Houses of Parliament and know the results of the consultations by the Ministry and by the Board which are now to take place. They also, I think, will determine the scope of the

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statement We shall determine its scope in the light of those consultations and of the opinion of both Houses of Parliament.
I respectfully agree with the noble Lord about the importance of consultations with the trade unions, and I know that this is also the view of my right honourable friend. During the preparation of the plan the Board had regular meetings with the unions. The facts and figures on which the plan is based were explained to the unions and the general implications were discussed. What will happen next is this. Dr. Beeching has told the Government that the Board do not plan to proceed with the passenger closure proposals for several weeks. During this time they propose to discuss the plan with the unions at the national level. There will also be discussions at the local level, through the normal consultative machinery, about the effects on the staff of individual closures.
As regards the positive and active co-ordination of transport, of course these are wide phrases, and my own feeling is this. We want to proceed on the basis declared in the Report, on page 4 in particular, where it says:
"The logical approach to the problem of shaping, or reshaping a railway system is:

(i) to determine the basic characteristics which distinguish railways as a mode of transport;

(ii) to determine under what conditions these characteristics enable railways to be the best available form of transport;

(iii) to determine to which parts of the total national pattern of transport requirements these conditions apply;

(iv) to shape the railway route system and services so as to take advantage of favourable circumstances wherever they exist."

Of course, my right honourable friend will be concerned with both the other methods of transport, passenger and freight, now available to users in this country. I believe I could conscientiously say for myself that I would accept the prescription which the noble Lord, Lord Morrison of Lambeth, has put forward.
As regards the local authorities, I think this also will be done. Of course, the procedure for passenger closures gives the fullest opportunities to objectors, both public and private objectors, to urge questions of hardship before the Committees before even my right honourable
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friend approaches the matter, with a view to arriving at a conclusion. Even after that has been done, my right honourable friend has to consider the question from the public point of view, including the availability of alternative forms of transport. Certainly it is our intention that in a matter of this kind everybody shall have their say and be taken into account, particularly, I would think, local authorities. I think that covers the noble Lord's points.
LORD STONHAM: My Lords, could the noble and learned Viscount the Leader of the House say whether he would make representations to his right honourable friend to the effect that other interested Government Departments should be consulted before these closures are put to Transport Consultative Committees? I have in mind the kind of case that occurred yesterday, when the President of the Board of Trade announced that, at long last, Aberystwyth was to get its new factory, and to-day the Minister of Transport has announced that Aberystwyth is to lose its railway. Could that kind of stupidity not be avoided?
VISCOUNT HAILSHAM: My Lords, nobody has said that anybody is to lose anything yet. This is all in the future; and a great deal of consultation and publication, and many public hearings, will have to take place before even my right honourable friend comes to a conclusion. In the meantime, the discussions which he has will include the local authorities, the industrial interests, the National Coal Board and the other providers of transport, in particular bus and road haulage interests. We have asked them to let us have their first views as rapidly as possible, and we shall take these fully into account in assessing the implications of the plan. There is already in existence—and I think this may be the answer to the first point the noble Lord raised—a special inter-departmental working party of senior officials engaged on this task. At all events, I think the Government procedure for consultation is fairly widespread as between Departments.
LORD TAYLOR: My Lords, did I hear the noble and learned Viscount aright when he said that no closures would occur for "a few weeks"? Because, if this is so, surely it is a very short time for the necessary consultations.
VISCOUNT HAILSHAM: No, My Lords, I do not think the noble Lord did hear me aright. I said that no proposals for closures would be made for several weeks. After that, the hearings will have to take place with consultative committees, and the decision to close will not be taken by my right honourable friend until after that.
LORD CONESFORD: My Lords, I wonder if I might ask simply for elucidation of a passage which I find extremely obscure? In the "Summary of the Report", you will find, on page 59, that the steps proposed by the Board include:
"(5) Dampening down of seasonal peaks of passenger traffic and withdrawal of corridor coaching stock held for the purpose of covering them at present".
Does this mean that when passenger traffic has shown by its past history that at certain periods it rises to a peak, it is proposed to ensure that the railways shall not, at such periods, be able to meet the proved requirements of the public?
VISCOUNT HAILSHAM: I think the actual passage on page 59 was designed for those who had read the body of the Report, and not for those who had not, if my noble friend will forgive me for saying so. I would ask him to spell out the full meaning of the passage from the full text of the Report.
LORD CONESFORD: I had endeavoured to do so, but without success.
VISCOUNT HAILSHAM: We must keep on trying, my Lords.
LORD STONHAM: My Lords, may I point out that it does say exactly that? It says that at peak periods people will have to book seats on trains, and that they will be run exactly the same as air services at peak periods—that is, that those for whom there is not room will not travel.
THE EARL OF GOSFORD: My Lords, may I ask my noble friend, if in fact it is in order to do so, whether he happens to know when another place will be debating this Report?
VISCOUNT HAILSHAM: My noble friend tells me it will be towards the end of April.

AGRICULTURE
4.5 p.m.
Debate resumed.
EARL FERRERS: My Lords, to return to agriculture, I am sure that the House is very grateful to the noble Lord, Lord Williams of Barnburgh, for putting down this Motion. He is an acknowledged expert on agriculture, and even though we may not agree with all that he says it is always a great pleasure to listen to him, because he says it all so pleasantly. I am a little puzzled, I confess, by one thing; and that is that at this time of the year we normally have a debate on agriculture, the Motion on which refers specifically to the Annual Review and Determination of Guarantees. This year, however, the debate is on agriculture in general. The noble Lord will forgive me if the conclusion I draw is that he finds so little to complain of in the recent Annual Review that he finds it desirable to draw the compass of his debate sufficiently wide so that at least some of the arrows may fall upon the target, even if only on the outer circles.
I am particularly glad to be able to follow the noble Lord so that I can make it clear straight away that in many respects we—noble Lords on this side of the House and those on his side—are in agreement. Noble Lords on both sides of the House believe in a strong, stable, prosperous and vigorous agriculture: there is no disagreement on that. Where, of course, we disagree is over the means by which that objective is to be achieved. I intend this afternoon to address most of my remarks to the Annual Review which has just been held. As the noble Lord has said, we have had a disagreed Review this year. We regret that it was not possible to reach agreement; but our decisions have been arrived at after full discussions with the farmers' unions on the general economic condition and prospects of the industry, and on the position of individual commodities, and we have carefully considered their views.
The basic economic data—the net income, the net output, cost changes and so on—have, of course, been agreed as usual; but it is the Government's responsibility, in the light of this Review, to determine the guarantees after taking into account all the relevant considerations.

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Many of the factors we have now to take into account have shown vast changes over the past ten or fifteen years. When the noble Lord who introduced this Motion was Minister of Agriculture, consumers were rationed for all the main agricultural products. There was therefore virtually unlimited scope for the increase and expansion of agricultural products. His determinations were designed to achieve this end, and they were, accordingly, acceptable to the farmers' unions.
To-day, things are different. The very success of farmers, both in this country and in other countries, in increasing their output has resulted in a change generally in the Western World from a shortage of agricultural produce to one of surplus. This inevitably means that there is more difficulty for British farmers in getting a profitable outlet for all their farm produce. My Lords, because this is a fact it does not mean that there has been a failure, either on the part of the farmers or on the part of the Government. On the contrary, it is the result of success. But it is a fact which cannot be brushed lightly on one side, as is sometimes done. It is a fact which must be faced fairly and squarely; and, accordingly, it is one of the factors which the Government have taken into account in reaching the determinations required in the national interest.
Before dealing with the individual determinations I should refer briefly to the basic economic and financial data. The forecast of agricultural output shows a further increase, while farming net income is marginally down on last year. The make-up of this income figure is of some interest, and I would draw your Lordships' attention to Appendix II of the Review White Paper and to the figures in Table C of that Appendix, which gives details of the net income calculation. The table shows a substantial increase in forecast receipts for farm produce in 1962–63, as compared with the previous year. The only exceptions to this general rise in farm receipts are, first, the figure for horticultural products (the main exception), which is some £13 million below 1961–62—though one must remember that 1961–62 was a very good year for horticulture, with income at a record level—and, secondly, a slight drop in receipts on eggs and poultry. In spite of these two setbacks, on horticulture
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and on eggs and poultry, the gross income forecast for 1962–63 is some £30 million above last year's figure.
While referring to eggs and poultry, I should like to make specific reference to one point. To me it is extraordinary that, with only five days to go before the existing policy of fowl pest slaughter and compensation ends, only about one in seven of poultry keepers in the country have taken the trouble to vaccinate their birds. In my own county of Norfolk, which has been riddled with fowl pest, only about 60 per cent. of the poultry have been vaccinated. It is very disappointing for everyone that, despite the wonderful efforts made by the leaders of the industry, so many poultry keepers should have adopted this irresponsible and apathetic attitude. I know that some noble Lords opposite are in agreement, because the noble Lord, Lord Champion, spoke strongly on that point during the Second Reading debate of the Agriculture (Miscellaneous Provisions) Bill. One can only hope that the figures will show some rapid improvement in the next few weeks.
To return to the Review, gross income is up by £30 million. On the other hand, outgoings increased by about £45 million, and about half of this sum is accounted for by increased expenditure on feeding-stuffs. This increased expenditure—which, in terms of volume, means a rise of nearly a million tons in the consumption of concentrated feeding-stuffs on farms—is perhaps not unconnected with the larger pig population which has led to lower market prices and to a rise in the Exchequer cost of the price guarantees on pigs from £36 million in 1961–62 to £65 million estimated for 1963–64. The net income figure adjusted to normal weather conditions is also marginally below that for last year. But in view of the nature of the calculation and the total sums involved, it would be quite wrong to think that the forecast figure of £407 million for 1962–63, as compared with £413 million last year, indicated a change in the long-term upward trend in farmers' incomes.
As to farmers' costs, there has in general been a continued rise in the prices of goods and services used in agriculture, and the net increase taken into account at the Annual Review was £12½ million. This

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was mainly attributable to wage rates and rents. At the same time, there is a substantial annual gain to the industry from increasing efficiency. One cannot be too precise about this, but a figure of £25 million is generally accepted. A further element in the general background to the Review was the cost to the Exchequer of agricultural support. The Estimates put in for 1963–64—which did not, of course, take into account any changes made at this Review—showed a new high figure of £364 million, compared with an estimated £321 million for 1962–63 and with the figure of £263 million in 1960–61. There was therefore a prospective rise of about £100 million over three years.
Finally, within the framework of the Act, the maximum possible reduction in the total value of the guarantees, after taking account of the cost increases, was £22½ million. But the Government thought it right, in the circumstances of the industry this year, to leave the total value of the guarantees unchanged. But the fact that this is a "no change" Review does not mean that it is a standstill Review. Our determinations this year adjust prices where this is needed to deal with the problem of individual commodities and make important progress in the improvement of the arrangements for agricultural support.
My Lords, in coming to the individual commodities, I should like to refer first to wheat and barley, for I feel that the noble Lord, Lord Walston, who is to reply for the Opposition will be only too ready to jump down my throat, or that of my noble friend, because of the cuts in the guarantees which are being made. For he, like me, lives in East Anglia, a great corn-growing area. The facts are that during the last five years, production of wheat has risen by nearly a million tons, to more than 3½ million tons in 1962–63, while barley has increased from 3 million to 5·8 million tons. In other words, during the last five years the production of wheat has gone up by nearly 35 per cent. and that of barley by nearly 95 per cent. Total cereal imports have not shown any overall increase during this period, but the trend of market prices for home-grown wheat and barley has been generally downward. We are now, to all intents and purposes, self-sufficient in barley, and higher production would further depress the market.
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It is in the hopes of checking this trend that the guaranteed price of barley has been reduced by 11d. Similar considerations led to the reduction of 5d. a cwt. on wheat, where a growing proportion of the crop is having to be used for feed since the milling requirements are fully satisfied. The tone of the market now tends to be set by feeding wheat rather than by milling wheat, and feeding-stuffs compounders cannot increase their up-take of wheat to an unlimited extent, since they must keep in mind the need to produce a balanced ration.
Milk raises important problems, both as regards production and also for farm incomes. In recent years we have been faced with the problem that production has been rising much faster than consumption of liquid milk. At the time of the 1961 Review the increase in production was exceeding the increase in consumption by about 140 million gallons. The national dairy herd was still expanding, and at that time it seemed that the balancing of production and consumption could not be achieved for some years. But, fortunately, there are now signs—considerably earlier than was expected—of a change for the better. The amount by which the increase in production exceeds the increase in consumption, which was 140 million gallons at the time of the 1961 Review, was down to 60 million gallons at the 1962 Review and has dropped this year to some 20 million gallons. Some of the reduction this year was, of course, attributable to the bad weather; but even with normal weather it is clear that the rise in production is coming more into line with the rise in liquid consumption. Moreover—and this is important—the returns show a levelling off in the size of the dairy herd, and the numbers of dairy heifers in calf fell quite noticeably during 1962, and the December figures for Great Britain were about 8 per cent. below those in December, 1961.
This is a healthier and more balanced situation. It could be argued that it would be advisable to leave well alone for another year. On the other hand, the level of farm income has to be taken into account, and milk is the most important single commodity to the small man. We had to weigh up these considerations, and we believe that the right balance is struck by the increase of ½d. a gallon. Any large increase would involve the risk of stimulating further

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excess production which could only bring harm to the industry. Farmers, in fact, receive no Exchequer subsidy on milk, the retail price being fixed so that, taking one year with another, there is no deficiency or surplus arising from the guarantee. Accordingly, consumers will be paying a ½d. a pint more for one month in the coming year. In other words, the retail price will be 8½, d. a pint for eight months of the year, instead of for seven months as at present, and for the remaining 4 months the price will continue to be 8d. a pint.
Production of beef, mutton and lamb continues to run at roughly the same level as a year ago and we have made no change in the guaranteed prices. Our returns showed an increase in the sheep-breeding flock, but the hard winter has since caused the loss of some ewes, and we now expect a breeding flock of broadly the same size as last year's. With pigs, we have had to face the fact that we put too short a scale into the flexible guarantee arrangement, which was introduced at the 1961 Review and designed to regulate pig production. The scale provided for three downward or upward adjustments in the guaranteed price, as the expected number of pig marketings rose or fell. At the, time it was thought that three steps would be sufficient. But the current forecast of marketing is about 12½ million pigs a year, well above the figure of 11½ million at which the present scale ends. The flexible guarantee arrangement is therefore being strengthened by extending the scale indefinitely and making larger price changes as numbers move away from the middle band. The immediate effect of this will be to reduce the price by 2s. a score, but as the forecast number of marketings comes down the price to the farmer will rise again. 'There is no change in the basic guaranteed price, but it is now being related to a higher level of marketings—10·5 to 11 million pigs instead of the previous range of 10·3 to 10·7 million pigs—to take account of the upward trend in consumption. The market will always absorb—at a price, and this year a very low price—all the pigs which are put on it, but clearly we must disregard the increase in consumption in so far as it occurred only at the cost of much lower prices.
Although it may be true that, with present marketings at the high end of
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the scale (between 12¼, and 12½ million pigs per year), under the new arrangements pig producers will get 2s. per score less, in fact when a more normal supply of pigs appears the farmer will be better off under the new scale than he would have been under the old one. For instance, when marketing of pigs reaches 11¼ to 11½ million pigs per year, the farmer will receive only 1s. less than the basic guarantee price under the new arrangement, whereas he would have received 1s. 6d. less under the old. Accordingly, he will be 6d. per score better off.
We are also making a number of improvements in the guarantee arrangements for fatstock, and we shall be making others in the next two or three years. The seasonal scales for cattle and sheep were fixed some years ago with the object of following variations in market prices and enabling us to pay the deficiency payment on a weekly basis. But the market now shows a rather different pattern and the seasonal scales are being brought more into line with the market. Our objective is that the pattern of production and marketing should be set by the market itself and not by the seasonal level of the guarantees. Further changes in the weekly price system will be considered for the future.
We also intend in the future to abolish the quality payments at present made on cattle and on bacon pigs. There was some justification for these payments, when they were first introduced, which, of course, was at a time when the Government themselves largely controlled the food trades. But there have always been difficulties in the system. Tastes differ over the country, for example, and the beasts preferred in the North may not be the same type of beasts preferred in the South. In the circumstances of to-day, the market must decide its preference and the producer should receive his reward in the extra price which he receives in the market rather than artificially from the subsidy. We have not altered the arrangements this year, but these quality payments will be discontinued over the next two or three years.
The separate stabilising arrangements for "bacon pigs" and "other pigs" are also to be abolished over the next two

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years. These arrangements were introduced in conditions very different from those of to-day and when pig prices were very much lower. Moreover, they are giving rise to serious inequalities and are distorting the market. We cannot continue with them indefinitely, but we are not abolishing them all at once. The widening of the stabilising bands by 1s. this year is a half-way stage. As we have said in the Review White Paper, we are prepared to consider whether some alternative measure, not possessing the disadvantages of the stabilisers, is necessary in the interests of bacon pig producers.
The most noticeable improvement in the guarantee arrangements applies to eggs. The new arrangements are analogous to a standing quantity system, but with the standard expressed in terms of price rather than quantity. It is, of course, impossible to fix a standard quantity for eggs, because a certain amount is sold direct to retailers or at the farm gate. This difficulty has been overcome by arriving at an indicator price, which represents the price the Marketing Board would be expected to receive from a market that was not oversupplied. In recent years, prices have ranged between 2s. 10d. and 3s. 6d. a dozen, and we think 3s. 2d. is a fair figure for this indicator price. Broadly speaking, the deficiency payment will be limited to the difference between the indicator price and the guaranteed price which remains unchanged at 3s. 8½d.
There are, however, three refinements. First, if the realised price rises above 3s. 2d. the Marketing Board will be allowed to retain one-third of the difference in order to encourage it to get higher market prices. Secondly, if the realised price falls below 3s. 2d. the Exchequer will initially bear 60 per cent. of the difference, though this share will be reduced by 10 per cent. each year until it is finally phased out in 1969. Finally, the possible influence of any increase in imports has been recognised, and provision is made for an increase in Exchequer payments if the selling price is below the indicator price and if imports rise above a level based on a total of 950 thousand boxes for the year.
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As regards production grants, the quantity of fertiliser used continues to rise. Reductions in prices have more than offset reductions in the rate of subsidy in recent years, and the reduction of £2 million will afford some relief to the Exchequer without being likely to put any undesirable check on the use of fertilisers. We are introducing new schemes of grant for the production of winter keep in livestock-rearing areas and for the renovation of permanent grassland, as foreshadowed in the 1962 Annual Review. These, as your Lordships will know, are embodied in the Agriculture (Miscellaneous Provisions) Bill, which at the moment is before your Lordships' House. At the same time, we have reduced the rate of the main ploughing grant. The case for this stands on its own merits.
The determinations reached at this Review will leave farmers with part of the gain from their increasing efficiency. In view of this increasing efficiency of the industry we hope that, given a reasonable season, we shall see farm income rising again in the coming year.
LORD WILLIAMS OF BARNBURGH: My Lords, the noble Earl will not leave the House in any doubt that, with £15½ million in respect of increased costs and £12½ million further costs, the farming community this year are bearing some £27½ million, compared with the Government's estimate of £25 million a year for efficiency; so that there is actually a deficit in the net income.
EARL FERRERS: One can tie oneself up in wonderful knots over these figures. The noble Lord has jumped me to it, and I will tie him, if I may, with one further knot. It is sometimes said that when the Government do not increase the ceiling of the guarantees they are reducing or curtailing the farmer's ability to increase his income. But this is not so. Looking back over the past three years, for example, the Review awards of 1960, 1961 and 1962 amounted to a net reduction of £5½ million. But between 1959–60 and 1962–63, when these Price Reviews were operative, farm incomes rose by £46 million. I suggest that this is a healthy sign, because it shows that farmers' incomes are not necessarily limited by limiting 'the height of the guarantees.

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The determinations deal with the immediate problems in a way that is fair to the consumer and to the taxpayer, and we have made a start in adapting and improving our support arrangements in the light of the circumstances of to-day. In general, our support arrangements were devised at a time of shortages and comparatively low production. To-day, production is much higher; indeed, in the countries which can afford to buy the food, the consumption does not keep pace with production. The main difficulty of agriculture in the Western countries is a simple one: that production is increasing at a faster rate than consumption. This is a simple fact. It is a strain on any type of support system and the effects of the strain have been seen in the increasing cost of Exchequer support—from £260 million to £360 million (in round figures) over the last three years.
There are two open-ends in our support system; one is the quality of produce on which we pay subsidy, and the other is the market price. The market price is, of course, influenced by the volume of supplies coming on to the market, both from home production and from imports; by the timing of supplies from both these sources, and by the prices at which they are offered. Changes are needed to bring the cost of agricultural support under more effective control, but it is still too early to say what proposals we shall put forward. I make no apology for this, because the questions involved are weighty and complex, and they will have to be discussed fully with the farmers' unions, with the agricultural industry in general, and with our overseas suppliers, before we come to any final conclusions. But our general intention over agriculture has been expressed in the words used in another place by my right honourable friend the Prime Minister, upon which I do not think I can improve—indeed, I would not dare to attempt to do so. It is simply this. Our intention is to cure the defects in our present system of open-ended subsidy, while still fulfilling our main purpose: a fair standard of living for the agricultural community, a strong and prosperous agricultural industry and one which is all the time improving its methods, both as to production and as to distribution.
4.35 p.m.
LORD AMHERST OF HACKNEY: My Lords, I am sure we are all indebted to the noble Lord, Lord Williams of Barn-burgh, for moving this Motion, not only because it is immediately following the Price Review, but because it comes at a time when there is, I feel, considerable anxiety within the agricultural industry. We are also indebted to my noble friend for the clear statement he gave as to what lies behind the Government's Price Review. I feel that the anxiety of the industry at the moment is more in respect of the background to the Price Review than of the Price Review itself. With the constantly increasing production, farmers feel that they are not getting sufficient recompense for their success; that, in spite of a 50 per cent. rise in production since the war, there has been only a 6 per cent. rise in real income. Of course, one can overstate the case. There are many other people whose incomes have not risen. I am told that in manufacturing industry output has increased since the war by 70 per cent., and net profits in 1961 increased by only 2 per cent. But wages, salaries and incomes generally have risen, and, whether they are justified or not, many farmers, and particularly the smaller ones, feel that they are being left behind by other people.
They see, too, the tremendous increase there has been in production, with the help of the scientists, the plant breeder and the Government with all their schemes. To take one commodity alone—namely, grain—just after the war, off some 8,000 acres, we were producing some 7,000 tons, and now off fewer acres we are producing 11,000 tons. This is going on in all the developed countries in the world, and in those countries agriculture is rather like Alice, who could not stop growing, with all the problems that that created. As has been said, production is going up much faster than consumption among those who can afford to buy the produce. They are worried about the effects on the markets of imports such as of maize and things like that at harvest time, or, at the moment, Argentine beef and the effect that will have on subsidies. That is, I think, a background of considerable anxiety. Whether it is justified or not is a different question.
Turning to the Review itself, I think most farmers have found that it is

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probably better than they had expected. One can argue about the individual commodities. One of the main worries is over milk. This is a commodity which, as has been said by my noble friend, has no effect on the question of the subsidies. There was a feeling of relief, not that there was merely a surplus of 20 million gallons, but that the increase in production was only 20 million gallons more than the increase in consumption. Obviously, if we were not to get into the same sort of trouble that we were in about two years ago, I should have thought that any responsible person would avoid doing anything which would tend to increase the production of milk. One welcomes the fact that the Government were able to put on the halfpenny per gallon, which will do a little to help the small farmer. But the milk producers are going through very difficult time indeed at the moment, particularly the smaller ones. After all, some two years ago the industry considered whether they wanted some two-tier system and a rigidity put into it. They decided against it, and therefore we really cannot do anything to alter the trend that is taking place at the moment.
In the case of bacon, there is no doubt that our pig herd at the moment is too large. It is most unfortunate that the things which helped to make the herd too large were never foreseen, and that the steps in the guarantee did not go far enough. I am sure that the right way must be to increase the steps by which the guarantee is reduced, rather than to reduce the guarantee itself. Also on bacon—and this applies also to fatstock—I welcome the fact that the Government have given notice that they are gradually removing the quality premiums from those animals and will let the market decide what quality is—that the market itself should pay for quality, which I am sure is the right method. At the moment, the only thing on which the quality of pigs is based is the measurement of bacon fat. To half the industry that is of no advantage at all, because part of the fat is cut off in any case; therefore, that quality payment is of no advantage whatsoever to the consumer.
I am glad that the Government are also widening the stabilising adjustments, because they were having the effect of distorting the market for pigs. Many
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people deal with both bacon and pork pigs, and there is a considerable increase now in the number of carcases part of which is going for bacon and part for pork. In fact, recently it was nearly three out of seven carcases. Therefore I think the removal of these stabilising adjustments, and the removal gradually of the quality payments, will allow a much more flexible market in pigs.
I welcome, too, the new system for eggs with the indicator price, and particularly the important new principle which has been brought into that guarantee, by which the volume of imports is taken into account, and that it is accepted as right that if there is an unusual increase in imports, then the Exchequer should bear a new liability.
The most important paragraph in the whole of the White Paper is paragraph 36, which says that the Minister is to have consultations with the industry and our overseas suppliers. These discussions will be watched with great anxiety and interest by all farmers. We all know the risks which are facing us at the moment with the open-ended guarantees, but the result of these talks will decide what share of the market will be open to the home producer, and what share will have to open to imports. They will have a great effect on the pattern of farming in the future. A prosperous agriculture is an essential part of a prosperous country, and it is also a large market for industry. It is the basis of the agricultural machinery industry, which is one of our major exporters. But we have to remain competitive, and a fair balance must be struck between the producer, the consumer and the taxpayer. We hope that, in these talks which are to take place in the future, that balance will be found.
4.50 p.m.
LORD WISE: My Lords, in the first instance I must say how pleased I am to see the noble Earl, Lord Ferrers, on the Front Bench at the Box in this agricultural debate. But I must express some sorrow—I shall do it in a very friendly way; we are very good friends—that except, perhaps, in one instance he had to stick to his brief. We all remember him when he was on the Back Benches, with his breezy, helpful, off-the-cuff speeches. The only time he seemed to go off the rails to-day and depart from his

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brief was when he told our Norfolk farmers—at least, our Norfolk poultry-keepers—what he thought of them in regard to the vaccination of their birds. I am also in an odd position, because (I do not know whether it is by design or by accident), I am following two other Norfolk farmers. The odds are obviously two to one against me. However, I am encouraged by the fact that from these Benches in the following speeches one will be made by a farmer from Cambridgeshire and the other by a farmer from Suffolk. So, I think that, on balance, we shall hold our own from this particular side.
I do not wish to refer in great detail to the Price Review: I want to speak in rather general terms. It has been my lot for several years past to speak on the various Price Reviews in, I think, pleasant and kindly words; but I am not so sure that I can do the same this year. My pleasant and kindly words seem never to have made any impression upon the Government, and it is obvious that they are pretty tough-skinned. The present position in which we now find ourselves has been foreshadowed from this side of the House over a period of years. It was bound to come, with falling prices, lower returns and the particularly stupid marketing system which have been in vogue over many years. These have all paved the way for higher subsidies from the taxpayers' pockets; subsidies which have risen this year by an alarming extent and have caused the greatest unrest and dissatisfaction throughout the whole producing section of the agricultural industry.
Two Norfolk farmers have spoken, so I think that, in reference to what I have to say, I might call their attention to the report in the County paper, the Eastern Daily Press of Monday last, following the National Farmers' Union meeting at Norwich. No fewer than five important local branches in Norfolk sent in resolutions of protest to the National Executive, and it is interesting to notice what Norfolk farmers are thinking as a whole in regard to this Price Review. One branch, the Wymondham Branch (if I may quote the name), urged co-ordination between home production and imported supplies of all commodities—an aspect with which I shall deal later on in my speech.
One representative, one of the members of the Council, said that the reduced price
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for barley was particularly disastrous for Norfolk, representing something like 25s. an acre off the net profit, while the small increase for milk producers in no way compensated them for increased costs. Another said that it appeared that the Government were trying to do everything they could to cut down producers in this country and were bending over backwards to help the foreigner. Then the chairman of one of the county branches said this:
"I have never seen our industry more moved over anything than we are over the Price Review."
Yet another representative spoke of the lack of faith and cowardice of the Government—pretty strong words for anybody to use at an agricultural meeting. Another one said that he had that day found the trade for cattle most depressed at Norwich market, with first-quality beef making around 5 guineas a cwt., involving a subsidy of 55s. 6d. because it was such a shocking trade. He also predicted that, if Yugoslav and Argentine beef continued to come in, the subsidy in a fortnight's time would be greater than the market price. My Lords, this is an alarming Press report and, knowing the papers as we do, noble Lords may be sure that the report is correct.
The drifting, piecemeal policies of the Government during the last few years were bound sooner or later to bring matters to a head. That time has arrived, and the Government should take notice. It seems impossible (I think I am right in this) to amend the Price Review for the present year, and what is in store for farming in the months which follow will be borne by those actively engaged in the industry, in the hope that better conditions will be established in the future. However much farmers may suffer—and they will suffer—I do not expect that those who get rich at the expense of those farmers and farmworkers who work on the land will suffer in the least. They will still reap their harvest of profits.
As I said a moment ago, I have never spoken with greater consciousness of the Government's weakness and apparent ineptitude or unwillingness to stop the creeping decline in British agriculture. There does not seem to be any realisation by the Government of the position. This position can be remedied and rectified only by the application of

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sensible, suitable and well-thought-out plans. The time has arrived when we must speak as we think. "Stop-go" and still more "Stop-go" directions, with a little additional production here, or a little curtailment there; an additional shilling on or an additional shilling off guaranteed prices, merely prolongs the agony and cannot possibly be a lasting solution. It is time that this annual exercise ceased. The increased efficiency of the industry is well known, but the continual reference to it by the Minister and other Government speakers is becoming monotonous. At the moment, money in the bank would be more to the farmers' benefit than words which, however applicable, may by their repetition in the difficult times of to-day strike them as being insincere.
There is a saying among countrymen that "Soft words butter no parsnips" and this seems to meet the case, so far as the Government and agriculture are concerned in present circumstances. If ever there was a time when agriculturists could look for some gleam of stability to throw light on the gloom of their industry, surely the present must be that moment. So far as farming is concerned, we have been through a hard winter in East Anglia, as have farmers in other parts of the country. The Government cannot be blamed for the weather—I give them that one point, at any rate. A depressing winter followed by a depressing Price Review, and the continual deep depressions of the future, must bring anxiety to a great many small farmers who have a daily struggle to make ends meet.
This is the picture as I see it in my own particular area, and I think my two friends on the other side will bear me out: heavy losses of over £1 million have arisen by the non-harvesting of a significant part of the sugar beet crop; fodder and vegetable crops have suffered heavily from frost, snow and pigeons; stock feeding has been difficult and expensive; hayricks held in reserves have had to be eaten; milk yields have dropped; grass keep, frozen and snow covered for weeks on end, has not been accessible for sheep or cattle; the condition generally of stock has deteriorated, with increasing casualties among ewes and young animals. And what has also affected us has been that cultivation work has been at a
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standstill and we are now somewhat behind with drilling operations. The men have had to stand off and become unemployed.
On top of this comes this Price Review, and, what is equally deplorable, the dumping of imports and the collapse of home market prices, a combination of events that has resulted in agricultural subsidies running riot. This is not the end of the story, as there is no relief of the costs of production, which have to be met out of diminishing returns, and it is obvious that the farming community will commence the new season which is now starting under very great disadvantages as a result of what has happened in the last few months. Is there no one in the Government or among the Ministry's officials who can take stock of the present situation and devise some plan on a long-term basis to cut out these high subsidies and unfavourable and uncertain markets, to control imports, and thus bring stability to the industry and make guaranteed prices and assured markets realities and not mockeries?
I want to say a few words about cereals. Others have spoken about stock, and no doubt in later speeches we shall hear further about prices and conditions in regard to the stock markets. It is obvious that the present low prices of wheat, barley and oats hardly, if at all, cover the costs of production. According to the Civil Estimates for 1963–64 for England and Wales, the wheat subsidy in round figures will reach £32 million, barley £35 million and oats and mixed corn £7 million. That is a total of £74 million, an increase of £18 million over last year. Those are the England and Wales figures; but including Scotland the different figures are £83 million and £64 million. It is obvious that the only salvation for growing these crops lies in high subsidies. In fact farmers are living off their subsidies. Many of them could not pay their way except for the subsidies. The guaranteed prices for the 1963 harvest of these commodities are between 26s. 6d. and 27s. 5d. per cwt. If present marketing arrangements prevail, it is likely that average prices at the next harvest wilt fall below 20s. per cwt., and the difference will fall upon the taxpayer to an estimated amount of £74 million for England and Wales or £83 million for the United Kingdom.

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If the price to the producer is to remain at a low, unremunerative figure and the taxpayer has to face a high subsidy bill, surely it is not beyond the wit of man to think out means whereby some of the difference is charged against those who handle the commodity between the farms and the householder. The noble Lord, Lord Amherst of Hackney, has already mentioned the question of consultation with the Commonwealth during the coming months, and I make this suggestion to the Government and possibly something of this sort might be considered. The noble Lord, Lord Williams of Barnburgh, and the noble Lord, Lord Henley, spoke in terms of commodity boards. The present would seem to be an appropriate time to think in terms of establishing what I refer to as a home and import commodity board, empowered and enabled, in co-operation with Government Departments, to purchase, distribute, dispose of and resell home and imported cereals in the national interest. Such a body could have a stabilising influence upon home, Commonwealth and foreign commodity markets, as they would be large buyers in bulk and thus be able to control imports, with advantage to the British economy and agricultural prosperity. An immense field of national beneficial activity would await such an organisation, and its success could be copied in other branches of agricultural productivity.
The noble Lord, Lord Henley, suggested that something of this sort might have been thought about by the Liberals, but I think I can correct that in regard to what I have to say next. I have here the OFFICIAL REPORT of the other place for October 30, 1929, nearly 34 years ago. My noble friend Lord Williams of Barnburgh will possibly remember the occasion. The date is October 30, 1929, on which date my brother made his maiden speech on the question of the dumping of German wheat; and he called the attention of the House to the advantages which would accrue by control and the setting up of an import board. He also mentioned in that speech that it had been the policy of the Labour Party in various reports before that date to consider the question of import boards. The noble Lord, Lord Williams of Barnburgh, mentioned it as being in his election address for 1931, but I hazard a guess it was also in his election address in 1929
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or possibly the one before. It might be of interest to the House to note that in those days on consideration of these national problems my brother was the economist and I was the agriculturist.
The cycle of events has a knack of recurring and surely those days are now recurring; we are in the same position and our farmers are suffering from the same scourge of dumping of agricultural products from foreign countries. I may be thought to be old-fashioned, but I have not forgotten that not so many years ago the Ministry of Food, with its purchasing and other powers, was the best and most reliable customer British farmers ever had. In those days we were blessed with guaranteed prices and assured markets.
Let me conclude with a note on a matter which is much in our thoughts at the moment, and which was referred to by the noble Lord, Lord Henley, from the Liberal Benches. It should never be said, in days of starvation, hunger and some poverty among our own people, and millions of men, women and children elsewhere, that British agriculture was being directed towards a curtailment of production in certain foodstuffs which are essential to life. By the introduction of a board such as I have described, opportunity would knock at the door of our farmers, and our surpluses could be disposed of by sale or gift for the benefit of our starving brethren, here and overseas. I pass these thoughts on to the Government. The winds of change around the world blow even stronger now than hitherto. We can still lead in generosity and good will. Do not let us be behind in welldoing.
5.11 p.m.
LORD SALTER: My Lords, I shall speak from a rather different point of view from that of the noble Lord, Lord Williams of Barnburgh, but I am really grateful to him for having framed this Motion in such a way as to invite discussion, not only on the questions arising from the Price Review but on the general problem of British agricultural policy. The need for a radical change in our present system of support and subsidy is, I suggest, now both obvious and urgent. The present moment is specially opportune, since we now can, and indeed must, face our problem without regard to the complications that would have arisen if

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we had an early prospect of entry into the Common Market.
Agricultural policy must of course have regard to the interests of agriculture. True, but it must, I suggest, also take adequate and due account of the other interests concerned—of industry and of the general public, whether as taxpayer or as consumer. I shall not devote myself to the first of these interests, agriculture, for the simple reason that it will be adequately represented this evening by those who have an expert knowledge to which I can make no claim. I shall confine myself mainly to the other interests which I have mentioned. Nor shall I attempt, in general, to make a proposal or to discuss other people's proposals as to the principle and form of any alternative system to that which we now have.
I am, however, as regards this last point, tempted to turn to make one or two comments upon Lord Williams of Barnburgh's proposal of commodity boards. If I understood him aright, he desires a commodity board for cereals, for meat and, I imagine, for other forms of food. These are, as I understand, to be not international commodity boards, but national commodity boards. I do not know how far he proposes to extend that principle—whether he proposes to have commodity boards also for, let us say, manufactures of different kinds. I wonder whether he has worked out the consequences and implications of his national commodity boards upon our general economic policy, upon GATT, and upon the interests of other foreign countries on whom we depend on a different side of our economy—as consumers of our exports.
LORD WILLIAMS OF BARNBURGH: My Lords, if the noble Lord does not object to my intervening it might save the time of your Lordships' House. I mentioned a commodity commission only for meat and wheat, since we are discussing agriculture and not general manufacture or general industries, and I confine myself to those two commodities. What I asked for, if the noble Lord will remember, was rationalisation and modernisation of our trading relations in the light of modern conditions.
LORD SALTER: My Lords, I am glad the noble Lord has defined his limits
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and that he does not propose to extend this system even to other forms of food. But the two he has mentioned are pretty important in the trade of many other countries, and I hope he realises adequately that those who export these commodities to us are also the importers of our own exports. I hope, too, that he realises and has worked out the extraordinarily wide ramifications and consequences that the adoption of his system, if it were really to be effective, would have upon the whole of our economy and the whole of our economic policy.
As I say, I do not propose to discuss the principles of alternative systems. I want, rather, to draw attention to a few of the main facts and figures which I think must be taken into adequate account in any change that is now being contemplated. In the first place, there is this fact: agriculture employs only about 4 per cent. of our working population; but it has in recent years received each year between £300 million and £400 million in direct subsidy in the form of the deficiency payments. Moreover, it enjoys other forms of subsidy in addition, at the cost of the taxpayer and the ratepayer. The opening words of the main leader in The Times of February 27 last were these:
"In 1961–62 the sum paid in direct support to British farmers represented half of their whole estimated net income for the year. If other forms of subsidy are included the total came to 83 per cent."
It is worth recalling, too, some of the other privileges not included even in The Times second figure. In the first place, agriculture enjoys rating relief in respect of properties occupied for business purposes. There is nothing of a corresponding nature in the rating arrangements for industry in general. In the second place, in the case of pests, whether affecting animal or fowl, the animals or birds that have to be killed are paid for at the public expense. Industry bears the cost of its own similarly inherent risks. Thirdly, agriculture enjoys tax advantages in respect of death duties, and their deductible expenses, though they are not unique, sometimes go pretty far. Some time ago I remember congratulating a rich farmer who had come to a party in a new Rolls-Royce on his being able to afford that car. He said, "You must remember that this car is an agricultural

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implement". There are also tax advantages which I will not describe in detail, because they are well known to all those who are concerned in the agricultural problem. In making, for example, certain investments in fir plantations, a great advantage can sometimes be secured, and in this case not only does the public lose financially but often it also suffers serious loss of amenities, as, for example, in the Dartmoor region in recent years. The agriculturists have also benefited, perhaps proportionately more than others, from very valuable research financed by the public. These are some—and only some—of agriculture's special privileges, apart from the direct subsidy system.
I would also add that the present support system has certain inherent defects and regrettable consequences which have now become obvious and serious. In the first place, the public now keep in production comparatively uneconomic land on a quite considerable scale. More fortunate farmers enjoy deficiency payments at the same rate per article produced on their mere productive farms—however much or little these may be needed to make their own farms profitable for them. All good farmers on good land have therefore a vested interest, increasing as they become richer, in the continuance of a system which maintains the less productive farms in existence. The result for the best, and even the average, farms is expenditure altogether out of proportion to what is required by them and what, on the ground of public interest, can be justified.
A further defect in the present system, I suggest, is that whenever natural conditions—or agricultural policies in other countries as extravagant as our own—cause a glut the general public suffer as taxpayers immensely more than they may gain in reductions of price as consumers. I need not remind your Lordships of the notorious example of lamb, and the present, and perhaps even more serious example of the cost of extra beef deficiency payments that will now be required. They justify the truth of that remark. But if nature is not kind but cruel, there are no guaranteed low prices for the public. The public have a disproportionate share in misfortune. They do not share in, but suffer from, plenty. These, I suggest, are all considerations
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that need to be taken into account in framing a new policy.
In the fourth place, the subsidised extension of agriculture to its present scale inflicts serious injury on exports from Commonwealth countries—for example, lamb from New Zealand, and cereals from Australia. This, I suggest, is much less justifiable than the much more advertised injury that might have been inflicted had we gone into the Common Market. It also means, of course—in the case of sugar from the West Indies or Mauritius for example—a reduction in exports from underdeveloped countries, which would prefer more trade to charitable aid.
In addition, heavily subsidised cultivation of uneconomic land has deprived the rest of the economy of resources, of manpower, material and machinery, and so on, which would otherwise greatly have aided our economy in other spheres. During the years after the war, and until quite recently, this country suffered very considerably in relation to our competitors, such as Germany, because of a serious shortage of manpower, a shortage which might have been partly relieved had some people from the worst land been gradually moved over into industry. And what is true of manpower is also true of machinery and other resources required by agriculture.
Against these considerations we are sometimes reminded of the advantage of increased agriculture during the war at the time of the submarine blockade. On that point I will make only one observation. The advantage we had from increased agriculture then depended upon the fact that the last war was a long war, lasting nearly six years. It would not have been required in a short war. I ask your Lordships to consider what chances there are, in this nuclear age, of a major war sufficient to threaten us with starvation lasting for six years, for a year, or for six months. Is this consideration enough to justify the retention of an agricultural policy which is unjustifiable on other grounds? I suggest not.
My Lords, if I have said nothing of the case for agriculture to-day it is not because I do not recognise that there is a real and important case, but because this case has been adequately represented already in this House. And it is because

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I feel that the other interests, to some extent competing or conflicting interests, are not represented with equal force and strength, that I have spoken as I have. I recognise that there is a strong case for some support for agriculture. I would agree that there should be enough support to keep in cultivation considerably more land than would result from the play of naked competition. I ask only that we should count the cost and reduce subsidies to a level at which their benefits are reasonably worth their cost and consequences.
I would also agree that any radical change should be graduated in time, so as to allow the problem of redundancy, with possibly some retraining, to be dealt with before it comes fully into effect. But the principle of any new policy and the exact method to be followed would carry me too far if I attempted to go into it to-day. I have been concerned only to urge that there must be a radical change and that it must go very far and take account of some of the considerations to which I have ventured to draw your Lordships' attention. It is surely now obvious that the least productive land in this country in cultivation ought to be allowed to pass gradually out of commission and be used for more profitable and rewarding purposes; and this applies also to the materials and manpower which are involved in such uneconomic production. It is also, I suggest, obvious that the time has come when the public as a whole—the 96 per cent. of workers who are not engaged in agriculture, the taxpayers, the consumers, the industrialists—should get some relief from the excessive burden which now rests upon them as a result of our present system.
5.30 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I rise to take part in this debate. Speaking on the same Bench as the noble Lord who has just sat down, I find myself more in agreement with the noble Lord opposite than I do with the noble Lord on my left on this Bench, but perhaps that is not surprising, since the noble Lord, Lord Salter, has very bravely got up, in a debate in which we are all, or nearly all, concerned with farming in one form or another, and put the case of the economist in a very persuasive manner.
LORD SALTER: My Lords, might I remind the noble Lady who is now speaking that she has just been appointed—and I congratulate her most sincerely—to a very important position? I trust she will now bear in mind the point of view of the consumer which she will be defending in that new appointment.
BARONESS ELLIOT OF HARWOOD: My Lords, I was not considering at that moment the fact that I am now about to undertake a very important job, because although consumers certainly enter into agriculture, we are all consumers, whether we are farmers or whether we are not farmers, just as we are all taxpayers. Sometimes people think that because farmers are given a certain amount of help, that help is not also shared by the consumer. In point of fact, however, although the support prices and the subsidies which are given to farmers appear very often in the newspapers as being given to farmers, they are in fact given so that food prices shall be kept as low as possible. That is the point.
I do not dispute with the noble Lord when he says that we must have a practical policy in all this. I do not dispute that practicability is very important. Nevertheless, the fact is that if the price of food in this country was the same as it is in, say, Germany or other parts of Europe, where the system of support prices is not practised, the British consumer would pay far more than he does to-day. Therefore it is in fact a shared responsibility, shared by the consumer, shared by the producer, and paid for by both; since, although farming is derated, farmers do pay taxes in exactly the same way as other members of the public. We do pay rates in the sense that we pay rates on houses and so on, and therefore we also share in the burden.
LORD SALTER: I said "rating relief in respect of property occupied for business purposes".
BARONESS ELLIOT OF HARWOOD: My Lords, I do not want to quarrel with my noble friend Lord Salter, because, as I say, we are sitting on the same Bench. It is with the Opposition that we normally should be in conflict, but I do not find myself so much in conflict with the Opposition at the moment because I always appreciate very much indeed the

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presentation of agricultural policy by the noble Lord, Lord Williams of Barnburgh. I disagree in detail with some of the things he says, but as someone who has been engaged in this industry for quite a long time I realise what an enormous impetus he gave to agriculture when he was Minister. I always appreciate very much taking part in these debates when he inaugurates them.
It is lucky that this debate is taking place at this date. Had it been a month ago, most of the farmers in your Lordships' House would have been almost in despair, with the temperature at very low levels, with degrees of frost varying from 24 to 30, everything frozen up, and the hay stocks diminishing with great rapidity. Unless we had had a miraculously quick thaw, which we did have, and which brought such welcome relief to all of us, I do not know what many of us would have done. The extent of the damage as a result of ten weeks of storm is still not really known. In the North of England and in the Border hills, where lambing has not yet started or is only just beginning, we shall not know how much damage has been done until a little later on, when the lambing has really been completed. But we are hoping for the best.
Here I should like to say how grateful I am to the Minister and to the noble Lord who represents agriculture in this House for the help which is being given to the hill ewes. The hill ewe subsidy is going to be a great help. I notice in the Price Review that there always appears the same phrase about "normal weather conditions". I do not know what normal weather conditions are. The weather never is normal. Last winter was the coldest for over 100 years. It is three years or more since we saw the sun in any strength, or had a warm and dry summer.
Take the recent weather conditions—anyway, in the North and in the East. I am always very surprised when I listen to the broadcasting of the weather conditions and learn, for instance, that the County of Kent, which in my childhood it used to be considered had a very mild climate, is for ever suffering from the most appalling snowstorms and frosts, which must do an immense amount of damage there. It is the same in the West Country, for, as we know, that has been very severely damaged this
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winter; I think as severely as the part of the world in which I live—the Borders. So I am grateful for this help. But I am sceptical when I read in the Review of "normal weather conditons", because I simply do not know what they are.
The Review speaks about costs and efficiency, and every year it says the same. Of course I agree that we must try to bring down our costs; we must be as efficient as possible. No industrial activity—and here I agree entirely with the noble Lord, Lord Salter—should be kept going if it is not efficient. But efficiency is hard to judge on the livestock rearing farms. We cannot modernise our production, since it is not a mechanical production; it is a biological production. However much you like to speed up the production of lambs, there is really nothing you can do about it. Nevertheless we have to meet increased costs, whether they be in feeding stuffs or in wages, out of a livestock return which at the best fluctuates and at the worst goes down. This is not really easy. With the best will in the world one cannot reduce overheads by the kind of efficiency shown by grain growers, with new combine harvesters, new methods of bulk handling and all the big investment which they and big arable farmers can put into farming, so reducing their labour force and putting an enormous investment into machinery. That really is not available to the livestock rearing areas of the country. We cannot do it; it would not be suitable. Therefore, our costs remain considerably higher than those of people who have been able to cut down their costs by making improvements.
One cannot willingly cut down the shepherds. Sometimes one has difficulty in getting them, and that happens to many people. But in the winter which we have just come through, I am sure that in hill and livestock rearing farms sheep losses would have been greater but for the magnificent way the shepherds looked after the flocks. No one who was not there can imagine what is was like, fighting one's way out, day after day, to the hill sheep with hay, either dragging it on a sledge with a horse, or putting it on the back of a horse and walking out in blizzards and in freezing, Arctic conditions. A dead sheep is a total loss to the flock for two years, even if you buy in stock; and if you breed in stock it is three years at least before you can replace it. Therefore, to

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keep the sheep alive is the first aim of any shepherd. I do not believe there is any economy in not having enough shepherds in the hills. However, there are new systems in the way of feeding pellets, for instance, and inoculations, which help flock masters, and to that extent one can take part in the efficiency campaign. But in the livestock rearing areas the costs are fairly constant and, with the yearly increase in charges, unless prices in the stock market rise the net result is on the wrong side of the ledger.
I was interested in Appendix IV in the Price Review where the University Agricultural Economists' Data are noted. Under the paragraph which deals with Scotland, upland rearing farming has the lowest return, although it is simply essential to the production of both mutton end beef. I am sure that the winter keep proposal, which the Minister has put into the Review, is a very good one. As regards the land renovation scheme, this, I am sure, is going to be a great help, end it will benefit the upland areas very much indeed.
In The Times newspaper recently there appeared three articles—I do not know whether your Lordships read them, but I did, with some interest—entitled, "Towards the Basis of a Positive Policy" for agriculture. At the end of the second article there appeared the following words:
"What concerns them"—
that is, the British farmers—
"will continue to be the size of their share of the home market and the terms on which they may expect to enjoy it ".
That is the crux of the matter. What is to be our share? I think that would also meet with the approval of the noble Lord, Lord Salter. Of course, we must trade with our Commonwealth countries and with our European friends. But how much? Are we to utilise our hill land and our in-by pastures to the full, and produce all the mutton and beef we can? Or are we to accept so much from other countries and cut down on our own production? I agree with The Times article, the third of the series, which said:
"No national policy can be considered either viable or realistic which does not put some effective limit to the taxpayer's liability."
That, again, I am sure Lord Salter would agree with. But, as I said before,
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we are not only farmers; we are also taxpayers, and we, too, do not want to pay out huge sums in taxation in order to support ourselves because our production is uneconomic. So I, too, feel that here is a point which the Minister and the agricultural organisation will have to face.
Others have spoken about the meat situation, but it is not really sensible to be importing meat at the same time as our farmers are supplying the market efficiently. But here we have the complication of the GATT arrangements, and so on, and I fully understand the difficulties in which the Minister is placed. This, my Lords, is a problem, and it is a problem which is not easy to solve, but I think it is urgent for us to know what is to be the size of our share in the home market. It has been calculated that for every ten persons at present engaged in farming in Britain, there are 25 others working in industries directly or indirectly ancillary. The noble Lord, Lord Salter, spoke of 4 per cent. of the population. That may well be 4 per cent. in agriculture only.
LORD SALTER: Of the working population.
BARONESS ELLIOT OF HARWOOD: Of the working population. But if you include the ancillary trades, which are now very great in view of the enormous consumption of machinery and the vast export of agricultural machinery which we also have, it runs into a considerably greater proportion of the population. If we include—and I think that, as members of the industry, we are entitled to include them—those ancillary trades which are essential to the agricultural industry, it is today a large figure, and I personally hope it will not be necessary to reduce this. Agriculture is a way of life, and a grand way of life, and I should like to see as many people as desire that way of life able to live by it. I am not suggesting that anybody who does not want to go into the industry should do so, but we should be able to provide a living, though not an extravagant living, in the industry. I was very much surprised to hear the noble Lord, Lord Salter, talking about rich farmers with huge motor cars which they are allowed to run on their farm accounts. The tax inspector in the area in which I live would not countenance that for one

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moment. In my area farmers either have small motor cars—Austins or other small, ten or fifteen horsepower motor cars—or Land Rovers, and nobody I know would be allowed to run, or, indeed, does run, a motor car such as Lord Salter has suggested.
VISCOUNT STONEHAVEN: It is a prerogative of Norfolk.
EARL FERRERS: I do not think it is.
BARONESS ELLIOT OF HARWOOD: I am afraid that my knowledge of Norfolk is confined to that gained from listening to the speeches of the noble Lord, Lord Walston, the noble Earl, Lord Ferrers, and others in that area. My knowledge of farming, such as it is, is gained from experience in the upland areas of the country. But it would be a thousand pities if we were to allow these areas to go back to derelict conditions; to cut down the important breeding areas. I say that because that is where all the breeding stock come from and where we get the finest beef in the world. It is then taken down to these other areas, where it is fattened. I think it would be a thousand pities if that were allowed to go back to derelict land, because I am quite sure that it is possible to produce efficiently the best mutton and the best beef in the world, and on that I hope that the policy of Her Majesty's Government will continue to be in the interests of both the farmer and the consumer.
5.46 p.m.
LORD SAINSBURY: My Lords, may I, at the very earliest opportunity, offer my congratulations to the noble Baroness, Lady Elliot of Harwood, on her appointment as Chairman of the Consumer Council? I think the whole House will agree that it is a really happy choice. There are so many farmers and agricultural experts on both sides of the House that it might be considered that one who claims to be neither is at a disadvantage when talking on the state of agriculture. But, as a large retailer of food, one is in close touch not only with the consumer but also with the agricultural producer, both at home and overseas. I should therefore like to make a few brief comments arising from the Annual Review and the deficiency payments system of agricultural protection.
The deficiency payments system is often criticised, and it may be of interest
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to recall that a GATT panel of experts in 1958 considered the relative merits of the two systems of agricultural protection—the price support system, which raises the domestic price level above the world market price by restricting imports, and the deficiency payments system, which allows domestic prices to remain at the world level and subsidises home producers at the taxpayers' expense. As is known, Continental countries and the United States have adopted the price support system while this country operates the deficiency payments system. The GATT panel found the deficiency payments system preferable to the price support system, chiefly because it keeps down food prices to the consumer and, consequently, increases demand. This increase in demand is obviously of much greater importance now than it was after the war when we were suffering from food shortages, as opposed to the food surpluses of today.
I know that there are those who will challenge the statement that deficiency payments keep down prices to the consumer; who feel that the deficiency payments system does not ensure that the benefit of a decreasing import price or a decreasing market price is passed on to the consumer. Immediately there is an increase in imports or an increase in the amount of the deficiency payment for a particular product, we get the parrot-like outcry that low prices are not benefiting the consumer, although no factual evidence is produced to support this generalisation.
LORD SALTER: Forgive me for interrupting, my Lords, but will the noble Lord compare the cost to the taxpayer of the present glut of beef with the saving to the consumer—and I admit there is some—of the lower prices that result from that glut?
LORD SAINSBURY: I certainly should require a very long time to work out that sum. But, to continue with my remarks, in regard to the 1961 controversy, one of the few objective estimates as to what happened at that time to the additional deficiency payments for the meat is that made recently by Mr. G. R. Allen, of the University Agricultural Economic Research Institute at Oxford. Incidentally, his evidence to the Verdon Smith Committee is referred to in to-day's Times. He estimates that, of the £67 million

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by which the fat stock deficiency payments exceeded the original estimates, £52 million was due to the fact that market prices were below the original forecast. He calculates that, of this £52 million, between £36 million and £48 million were passed on directly to the consumer.
To-day, we have a similar situation to that of 1961. As noble Lords will surely be aware, there has been an increase in the imports of Argentine chilled beef, a considerable drop in the value of English and Scotch beef and, consequently, a large increase in the deficiency payments. However, the slump in beef prices is not solely due to imports. A severe winter's interference with transport has caused cattle to be held back; and the accumulation of animals thus created is now coming forward and is accelerated by lack of food. As farmers, particularly in Scotland, will know, large quantities of roots are frost-damaged; grass, too, is late. It may well be that when grass does begin to grow, home slaughtering of cattle will decrease. Nature is a big influence in these matters, particularly with regard to the timing of marketing.
Once more it has been suggested that the consumer is getting no benefit from these low prices. I do not in any way wish to advertise my own firm, but in view of the fact that it is one of the largest retailers of meat in this country, I should like to say to the House that since November of last year we have reduced the prices of our Scotch beef by an average of 6d. per lb.; with rump steak as much as 1s. 4d. per lb. cheaper. In the case of Argentine chilled beef, again since November, the reduction is an average of 4d. per lb., with rump steak as much as 1s. a lb. cheaper.
LORD HAWKE: My Lords, forgive my interruption. As one of the noble Lord's satisfied customers, may I say that that applies, of course, to his own marketing. Can he say that corresponding reductions have occurred elsewhere among the butchers of this country? I do not believe that they have.
LORD SAINSBURY: My Lords, that, of course, is always a question of opinion. Personally, I cannot believe, and would not for one moment say, that our prices are unique, any more than I
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can believe that, in a very competitive world, our retail prices have no influence on those of other retail butchers. What I do want to ask is this. Are the many grave problems facing agriculture really helped by trying to make the retail trade or distributive system the scapegoat for the difficulties?
Although I believe that for Great Britain, as the largest importer of food in the world, the deficiency payment system is the best system of agricultural protection, we have to face the fact that it can be wrongly applied; for example, if the level of support is fixed too high so that it encourages uneconomic and sometimes unwanted production. I feel that it is because of this danger that the Government in recent years have moved towards extension of the principle of tying the deficiency payment to a given level of production. The increase in the price of milk to the farmers in the latest Price Review is a subject that requires examination in the light of that principle. I wonder whether Her Majesty's Government are not unduly optimistic in thinking that this increase of ½d. per gallon will not add still further to the burden of milk that can be used only for manufacturing purposes.
I recently came back from a visit to New Zealand, where I had the opportunity of meeting not only farmers but also the leaders of the dairy and meat industries. For every 1-1b. of butter fat the English farmer gets something of the order of 7s., whereas the New Zealand farmer gets something of the order of 3s. These figures surely reflect, among other things, the natural advantages enjoyed by the New Zealand milk producer; but they also highlight the cost to the country of an unnaturally high production of milk, a heavily increasing amount of which has to be made into butter or cheese. This is illustrated by the following figures. In 1962, we made 56,000 tons of butter; the average for the previous five years was 32,600 tons, and for the five years previously only 17,000 tons. In the case of cheese, the increase in production during the last five years is not very great; but when compared with ten years ago it is considerable. The figures are: in 1962, 112,000 tons; the previous 5-year average, 104,000 tons; and in the period 1952 to 1956, only 78,000 tons.

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Also while I was in New Zealand I saw fat lambs bought on the farm at 45s. each, a price which the farmer himself told me was satisfactory. It is equivalent to about 1s. 6d. a 1b. dressed carcase weight. The guaranteed price for 1962–63 and for 1963–64 is 3s. 2d. No one, let me hasten to assure the noble Baroness opposite, is going to suggest that Scotch or home-produced lamb should be sold at 1s. 6d. a lb. Fresh lamb will always make a substantial premium over frozen. But surely the present disparity is too great. Moreover, I learned in New Zealand that, with more hill land continuously being brought into production, they could economically increase the number of sheep carried. Can Britain really afford to do without good-quality meat at this price? Certainly New Zealand would be gravely injured by any restriction on her meat exports. Incidentally, she is already having to restrict her imports because of balance-of-payments problems.
Whatever evolves in future from the main political Parties in the way of agricultural policy, it will obviously be necessary to arrive at a fair and just division between what should be produced in Great Britain and what should be imported from the Commonwealth and the rest of the world. We are surely not rich enough to ignore either the true economic cost of production or the natural advantages that some overseas countries enjoy.
6.3 p.m.
EARL BATHURST: My Lords, I should like to congratulate the noble Baroness, Lady Elliot of Harwood, upon her new appointment, which has already been referred to. I would also join with her in congratulating the farmers and shepherds in her part of the country for the way they have met the great hardships throughout this winter. I was a little disappointed that my noble friend who spoke on behalf of the Government could not spare a little sympathy for them. Possibly their hardships have not been much worse than those in some other trades, but I would remind my noble friend Lord Salter that the farmers and their men have not finished their work yet. It has not until recently been possible to get on to the land to do anything since the last day of
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December, and now all the work that has to be done must be squeezed into a fortnight or three weeks. But it will be done, and men will be labouring night and day, with all the machinery and efficiency we have heard so much about, in order to see that the land is tilled and the stock fed.
It is always a pleasure to hear the noble Lord, Lord Williams of Barnburgh, speaking on agriculture, and it is a privilege to take part in a debate which he initiates. I must advise my noble friend, who will be winding up on behalf of the Government, that up and down the country the farmers and their men ate thinking very much in terms of what the noble Lord and his friends on the other side of the House are saying; there is no doubt about that. I take note of the facts and figures which my noble friend put forward so eloquently, and I take heart from what he said, that, as the result of a reasonable season and of the Price Review, farmers incomes will rise and that there will be what he considers a fair standard of living for those working in agriculture. Time will show.
I am sure the Minister is aware that there is a great difference of opinion as to what is a fair standard of living and what is a fair return from investment in agriculture. My noble friend Lord Salter has no doubt an accurate idea of what is a fair return from an efficient business. Farmers also have an accurate idea of what should be a fair return from an efficient farm. But there is no doubt that their account books show that returns upon capital invested in agriculture are nowhere near in line with those of industry to-day, especially those industries which are so efficient and in which no doubt my noble friend is involved.
Millions of pounds have been invested in agriculture to bring about its present efficiency, and an internal turnover of trade worth £1,700 million has been built up. That is of some value to this country, and I should like my noble friend Lord Salter and those who think like him to consider that point. The agricultural machinery industry has been built up, possibly in the shortest time ever, from practically nothing before the war to second or third place in the world.
LORD WILLIAMS OF BARNBURGH: First.
EARL BATHURST: The noble Lord Lord knows more than I do with regard to that. I believe that the argicultural implement industry is one that will spread throughout the world the benefits of tilling the soil in the most efficient way; and that must be worth something to our country. I would ask my noble friend Lord Salter to bear that in mind, too. The Government of noble Lords opposite, and especially the Conservative Government, have put large amounts of money into the agricultural industry to make this possible, and the industry is grateful for it. Nevertheless, the returns on capital are not sufficient to enable farmers to replace expensive machinery or to give a fair interest on capital invested or sufficient spending money to farmers, in comparison with industries with similar capital.
In spite of the figures which my noble friend put forward, showing that incomes have gone up, the fact is that costs have gone up even more; and the receipts on the other side of the book do not go up enough to cover these extra costs. My noble friend must know, from his expert accountants in the National Agricultural Advisory Service, which does so much good for farmers by helping them to increase their efficiency, that no matter how much figures may show that incomes are rising, they do not cover the increased costs. One must congratulate my noble friend and the Minister and the unions who settle these negotiations, but I should like to compare their forecast with that of a really good astrologer looking into his crystal ball. It is remarkable how accurate some of the astrologers are able to get with a long-range forecast. I should certainly like to know that my noble friend has consulted the American long-range weather forecasting device which on this occasion proved so accurate.
It does not need expert forecasting, however, to know that wages will be up again next year. Our men are asking, whether rightly or wrongly, £15 a week. I suppose that the union will offer £10, and the result will come out at somewhere around £12. That is not difficult to forecast. Whether fuel will go down one would doubt; but it may. It will depend on the Chancellor of the Exchequer in his Budget. There are precious few items on that side of the account that will go down. I go all the
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way with the noble Lord, Lord Sainsbury, in saying that we must have imported food. And here I would say what a privilege it is to hear him in your Lordships' House. It is all too seldom that we hear the noble Lord, and others of his great merchanting profession; and I only wish there were more speaking in this debate. Nobody has ever pretended that this country can live on its own food alone. However, I believe that nothing like enough attention has been paid by the Minister of Agriculture, Fisheries and Food and his right honourable friend the President of the Board of Trade to the timing of these imports, to which the noble Lord, Lord Sainsbury, and my noble friend Lady Elliot of Harwood referred.
How is it that just at this time, when, after such a season as we have had, it must be obvious that large amounts of cattle come on the market, a new and presumably unexpected importation of beef reaches this country? The noble Lord, Lord Williams of Barnburgh, his noble friend Lord Shackleton, and other noble Lords on that side, have repeatedly warned the Board of Trade how only a small shipment of a particular commodity can completely upset a market for weeks, or even months, to follow. I do not know whether the market has yet been upset; it is a little early to see. But if it has—and we shall see shortly—it is fair to say that the upset will last for probably three months or more. And that is after the most expensive winter that has ever been known, when every animal has eaten twice its amount of food. Therefore, I cannot see how the noble Lord can claim that farmers' incomes are on the increase.
We have been encouraged by the Price Review to turn out animals in the winter season and at the end of the year, rather than put them on the market in the autumn. This must therefore be the wrong time of the year to import large amounts of foreign beef. By all means bring it in; but a little later. It was apparently the view that there was very little Argentinian beef left to reach this country, and it must have come as a great surprise to many of your Lordships to hear of these shipments. I wonder that my noble friend did not take the oportunity to ask the noble and gallant Earl, Lord Mountbatten of Burma, who has just been widely advertised as taking a trip round South America (he must be

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the only member of Her Majesty's Government who would be able to ride an estancia pony: and, if I may say so, he looked extremely well when he was doing so), to send back a dispatch saying that there was a great deal more meat in the Argentine than was expected. Possibly there is a dispatch locked away somewhere in the Admiralty to that effect. I think that our intelligence must have slipped up somewhere in this recent shipment.
It is the same story with barley and wheat. For three years the silos have been filled with imported wheat just as the harvest is running at its hardest with the English combines. First, it was the Canadians; then it was Algerian barley; and this season it has been American maize. This is bound to come, and we know it; but not I should have hoped, just at the time when the English market is almost saturated with the home-grown product. I ask the noble Lord who is to reply, and I ask all members of Her Majesty's Government, given that they have an eye on the next Election (and there was a pretty sharp sting in the tail of the speech of the noble Lord, Lord Williams of Barnburgh, with regard to politics), to make it quite clear that the Conservative policy is to go for home-grown first; then to take the produce of our friends in the Commonwealth; then that of our trading friends in various parts of the world, and to let the others come on to supply what else we need.
Furthermore, I would ask the Government, the Minister of Agriculture, Fisheries and Food and the Board of Trade to remember to take into their confidence and under their wing those such as the noble Lord, Lord Sainsbury, who are involved with the merchanting, in fact, all those who are in the baking trade, in the milling trade for animal feeding-stuffs and in the meat trade; to bring them under one umbrella for a meeting to discuss and decide the amount of imported foodstuffs that will be needed. That goes for animal foodstuffs and for home consumption. I cannot see how, when farmers have an imposed or an agreed price system, imported foodstuffs can be allowed in ad lib off the world markets, subsidised, or possibly dumped, with no tariff and no quota, unless most complicated machinery has been brought into action. Unless we can get our im-
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porters together to help the Government to work the subsidies, I cannot believe that the present deficiency payments system can continue.
Many of us were thinking in terms rather the opposite of those outlined by the noble Lord, Lord Sainsbury: terms much more on the Continental style. However, I hope that the Government will pay close attention to the suggestions put forward by the noble Lord, Lord Sainsbury. Possibly the importers and merchants in this country will be able to impose voluntarily—or possibly it may need to be compulsorily, in the same way as is done with farmers—some system of timing, so that imports reach us when our own harvest or livestock is running at its lowest. As it is now, there is an everlasting drain, of which we have heard, to the taxpayer. It brings no credit to the Government; it brings no credit to the farmer. Indeed, it is a most unfair and unjust criticism of him to say that such payments are required, when in fact, if only the imports can be timed to the benefit of the market, they are not.
6.19 p.m.
LORD DUNLEATH: My Lords, I should like to join with those noble Lords who have expressed appreciation of the opportunity the noble Lord, Lord Williams of Barnburgh, has given us to discuss the state of agriculture, not only with regard to the recent Price Review, but with regard to the wider and longer-term implications as well. I have been listening with considerable respect to those noble Lords who have spoken about the state of agriculture in Great Britain, and who, I may say, are infinitely more qualified to do so than I am.
With your Lordships' permission, I should like to confine myself to making one or two general points about the state of agriculture in Northern Ireland. Your Lordships will recall that the system of agricultural support is the same for Northern Ireland as it is in the rest of the United Kingdom, and the same rates of subsidy are determined at the Annual Price Review. The one exception to this is our remoteness grant of £1¼ million, whose purpose is to offset the extra costs that we have owing to our remoteness from sources of raw material and our markets. Though Ulster farmers sometimes doubt that this grant is quite sufficient to make up the extra cost they have

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to meet, it would be fair to say that Northern Ireland agriculture gets the same deal from Her Majesty's Government as does the industry in the remainder of the United Kingdom.
In common with the English, the Scottish and the Welsh farmer, we have for some little time been feeling that a certain trend is becoming apparent in this deal. The Ulster farmer fears that it may be the policy of Her Majesty's Government gradually to increase the pressure on him; to make him absorb higher costs each year, and to leave him to do this by struggling to increase his efficiency without the prospect of any reward in the shape of an increased income. From both my own observation and the remarks of several noble Lords during the course of this debate, I think there can be no doubt whatsoever that this trend is causing considerable concern among the farming community in the United Kingdom. It may be that this apparent trend does not indicate the policy of Her Majesty's Government, and I sincerely hope that it does not. But if the farmers' apprehensions are justified, I feel I should draw your Lordships' attention to the significant effect that such a policy would have with regard to Northern Ireland. Although I am a farmer, I have tried—as I am sure other noble Lords who hold the same union card as I do have tried—to look at this in an unbiased manner from the point of view of Northern Ireland's economy as a whole, and not just from the farmers' point of view.
To get the picture in perspective, your Lordships will recall that, whereas the proportion of employed persons directly engaged in agriculture in Great Britain is 4 per cent. the proportion in Northern Ireland—and I quote from the Committee Report—is 13½ per cent. In fact, agriculture is our largest single industry, accounting for 14 per cent. of the Provinces' income, as compared with 5 per cent. for the United Kingdom as a whole. It is therefore clear that any change in the agricultural industry will have a proportionately greater effect on the overall economy of Northern Ireland than it will have on the rest of the United Kingdom.
If your Lordships will bear with me, I should like to quote one more statistic. Whereas the proportion of farms in Eng-
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land and Wales containing less than 50 acres is 10 per cent., the equivalent figure in Northern Ireland is 80 per cent. It is therefore clear, I think, that in Ulster's largest industry there is an overwhelming majority of small units which lack capital reserves, and which are financially in the least favourable position to withstand economic pressure. From the agricultural economist's point of view, there is certainly a plausible case that these small units should not be regarded as being viable; that under today's conditions they should be made to resolve themselves into fewer and larger units, which would be better equipped to withstand the changes and chances of world crisis and government policies.
While this may be possible on paper, what would it involve? I have made a rough estimate that for every 10 per cent. by which the number of these small farms was reduced, approximately 5,500 people in Northern Ireland would be thrown on to the labour market. What jobs would these people go to? This might not be so great a problem in parts of the South of England, but, as your Lordships I am sure are aware, it is certainly a problem in Northern Ireland. We heard some good news the other day. We heard that our unemployment figure for March was 9·3 per cent. I do not think that would be good news in any other part of the United Kingdom, but it was good news for us, because our February figure was 11·2 per cent.—a serious situation, but I am sure your Lordships will appreciate just how much more serious it would be if, in addition to our present unemployed, there were a further multitude of displaced small farmers to be absorbed.
Our Government at Stormont are making prodigious efforts to provide more jobs in Northern Ireland. A considerable amount of money is being spent every year, both in paying unemployment benefit and in providing incentives for new industries to start in Ulster. It would be a sad thing indeed if the purpose of this expenditure were to be nullified by an attempt to economise on agricultural support. The small farmer in Northern Ireland is not looking for charity. He does not expect it, as he has never had it. All he asks for is a fair deal in the shape of an assured economic price for his products. Many

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of these small farmers have had faith that they would receive this, and they have acted on that faith by taking the advice of the Ministry of Agriculture and investing in new buildings and machinery. Thousands of them have had such faith that they have borrowed capital. Of course, they have very small reserves and little security, but they have borrowed capital in order to do this.
There has indeed been a marvellous response to the Small Farmers' Scheme in Northern Ireland. Since the war there has been an almost revolutionary increase in the efficiency of small farms as a whole, and holdings like this have been completely transformed all over the country. Given the right conditions, I believe this trend will continue and, indeed, probably accelerate. But what will be the prospect for these farmers if they are denied an opportunity of repaying their loans, let alone of receiving a return on their investment? Their faith will be shattered and their efforts will have been wasted, and they will simply have to sell up and get out.
Even if there were alternative employment for them to go to, it is hard for a life-long farmer suddenly to turn himself into a factory worker. I am not suggesting for a moment that the status quo should be artificially preserved, for I believe the situation will solve itself in time.
The average size of the Ulster farm is steadily increasing, and the number of farmers is proportionately decreasing. Quite a number of small farmers' sons, when they reach the age to leave school, seek employment elsewhere. When their fathers die, the farm is either sold or amalgamated with a farm belonging to another relative. But if the pace is forced I believe it will bring more hardship and suffering to rural Ulster than there has been since the potato famine in the last century.
It was my intention to speak purely in general terms, but I feel I should perhaps mention two particular commodities which have much greater significance for Northern Ireland than they do elsewhere: eggs, and pigs for bacon. Both of these, incidentally, form an important part of the small farmers' production, and bacon in particular is a higher factor in the economy of Northern Ireland as a whole. To illustrate this, I
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would remind your Lordships that approximately one-third of the total United Kingdom bacon output comes from Northern Ireland, and that this accounts for between a quarter and a third of Ulster's total agricultural income. In addition to this, the bacon-processing industry provides a valuable source of employment, unlike other commodities such as pork or meat on the hoof, which leaves the country in an unrefined state. I am aware that both bacon and eggs have been a matter of deep concern to Her Majesty's Government, but I would stress that any further deterioration in the prices of these commodities would be of absolutely vital concern to Northern Ireland.
As the noble Earl, Lord Ferrers, said, there is in paragraph 18 of the Price Review White Paper a sentence which says:
"The Government will be prepared to consider before the next Review whether, when, the separate stabilisers are finally abolished, some alternative measure, not open to the same objections, is necessary in the interests of bacon pig producers."
I should like to put it to Her Majesty's Government that such an alternative measure is not only necessary but well-nigh essential to Northern Ireland. the state of the industry being such as it is, and I should be very glad to learn from the noble Lord who is winding up this debate on behalf of the Government that some further consideration has been given to this matter in the light of Northern Ireland's special position.
We in Northern Ireland share with all thinking people, and I think we should be more than short-sighted if we did not, the concern at the enormous cost of agricultural support to the Exchequer, but, in common with quite a number of noble Lords who have spoken to-day, we do not see how this can be avoided while huge and untimely shipments of cheap imported commodities are allowed to enter this country, and if, at the same time, Her Majesty's Government are going to maintain a fair standard of living for the agricultural community, as the Prime Minister promised in another place on February 11. I do not, however, intend to pursue this point, as it has already been dealt with most ably by those noble Lords who have spoken on the subject. I would merely confine myself

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to saying that we in Northern Ireland most sincerely hope that it really is the intention of Her Majesty's Government to strive for what the Prime Minister, on the same occasion, referred to as a "strong and prosperous agricultural industry".
If this is to be done I, personally, think that it should be a matter of the first priority to give the closest possible attention to our marketing system. This is, I think, in many ways lamentably primitive and highly inefficient. The Danes are laughing at us where our marketing technique is concerned, and by the look of things the Italians will also be laughing at us before long. I do not think this can be regarded purely as a farmers' problem, as it concerns the taxpayer as a whole. Large sums of his money are being wasted every year owing largely to poor marketing systems. This is not, either, a problem that can be tackled locally by groups of farmers getting together in small cooperative bodies. I think that it must be tackled in a big way by the entire agricultural industry.
I think that the various Governments are to be congratulated on the way in which they have helped the industry to increase its efficiency of production since the noble Lord, Lord Williams of Barnburgh, introduced the 1947 Agriculture Act. But if the present Government would now exert their influence to bring about a similar increase in the efficiency of marketing, I am sure the results would be no less significant. I am sure, too, that any information that the noble Lord who is going to wind up this debate can give us of positive thinking on the part of the Government concerning this matter will be greatly welcomed by the farming community.
My Lords, if it is the Government's intention—and I sincerely hope it is—to strive for a strong and prosperous agricultural industry, I can see no reason why this great industry should not go from strength to strength. If, however, there is any doubt about it whatsoever, the faith of the small farmer, to which I have previously referred, will be shaken, confidence will be lost; the confidence that gives him the incentive to invest in productivity, for the future will be gone; and this, my Lords, would mean bad, black times ahead in Northern Ireland,
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not only for the farmer but for everyone in Northern Ireland. I am hoping that when I get back to Belfast to-morrow I shall be able to tell my farming friends that they need not worry, that the Government is going to back them up, and I sincerely hope that the noble Lord who is going to wind up will give me the assurance that will enable me to do that.
6.37 p.m.
THE EARL OF LYTTON: My Lords, before I make a very short speech I should like to add a postscript to the remarks made by the noble Baroness, Lady Elliot of Harwood, in relation to those parts of the farming community which were particularly exposed to the ferocious winter we have had. I farm in the middle of a traditional farming area on Exmoor, though not quite in the traditional manner. I do not suppose that our conditions were as bad as some others on Exmoor; and possibly Dartmoor was in a worse position than we were. Nevertheless, it froze with us for 72 consecutive days, except one, St. Valentine's Day, when there was no frost but plenty of slush for the birds. During that period, although we had our horses and skis and sleighs, my own bulldozer—not a small one, but not one of the biggest—which never broke down, was reinforced by some seven others. We were cut off by drifts from communications on the main road for 53 consecutive days and no bulldozer was capable of tackling that particular job. And I am normally the person who takes an informal contract for keeping eight miles of that road open.
I mention this to illustrate the nature of the drifts that accumulated in that part of the world, which cut off farmsteads and sheep and frustrated us in all our normal methods of rescue. But the people who came to our rescue in a most notable manner, and, I believe, on a scale that has not happened here before, were those in the helicopter service. It is quite something, when you are in difficulties, and wondering how many of your neighbour's sheep are going to die because it is impossible to get at them, to have a helicopter head straight for your house through the swirling snow; land within rotor-blade-distance of your door the supplies you have run out of, all without the smallest damage or dent, and then rise like a dragonfly into the gathering

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darkness and disappear. I felt that I should like to take this opportunity, as nobody else has done, to express the gratitude that many of us must feel for the freedom from anxiety and fear which has been provided by the helicopter service on a very considerable scale.
Now for the short speech on agriculture in general which I have composed while listening to the noble Lords who have spoken so far. I take my copy of the Agriculture Act: it has been by me so long that it is falling to bits, not through my study of it but, I think, because a mouse has had a go at it. I should like to read what we all regard as the charter of modern agriculture bringing prosperity in the 101st year after the abolition of the Corn Laws. It is contained in only eleven lines, which set out the charter by which we have come to the position we are at now. Section 1 of the Act says:
"The following provisions of this Part of this Act shall have effect for the purpose of promoting and maintaining, by the provision of guaranteed prices and assured markets for the produce mentioned in the First Schedule to this Act, a stable and efficient agricultural industry capable of producing such part of the nation's food and other agricultural produce as in the national interest it is desirable to produce in the United Kingdom, and of producing it at minimum prices consistently with proper remuneration and living conditions for farmers and workers in agriculture and an adequate return on capital invested in the industry."
That seems to me to provide a pledge for all the factors of production on the land. I want to draw attention to its implications.
In the first place, the moment you start guaranteeing prices and assuring markets you have tampered with the free play of economic forces, supply and demand. Those who talk about restoring the free play of economic forces to agriculture should, I feel, always look (and I am not sure that even those who represent the farming industry look sufficiently) at the other side of the picture of our protected industry. The noble Lord, Lord Williams of Barnburgh, referred to a drop in the price of meat of 25 per cent. and to what would have happened had that occurred in the motor industry. I feel inclined to retort: what would have been the position had there not been something like 33 per cent. duty on imported machines, motors, every sort of thing for some thirty to forty years? Would
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they ever have been at Dagenham if there had not been this protection? The noble Lord says, "No": and I agree with him. So that really what has been done with regard to the farmers is to protect them in such a way that they are politically exposed as mendicants in the time of Lent every year. And it is an unfortunate position which has been arrived at, because, though it was held to have certain advantages, the context in which this Act works is that of a country producing nothing like all the food it requires to eat; having nothing whatever to export, and being obliged to import; and having in some respects a very small—but, of late, growing—proportion of its production at home.
What are the advantages? As lately as July, 1962, the National Farmers' Union, in one of their publications resisting entry to the Common Market, made the following statement:
"The British system has two distinct advantages as compared with that adopted by the Six. First, the consumer is allowed access to the widest possible range of foodstuffs at low prices. Secondly, producer prices may be maintained at a reasonable level without having an adverse effect on the level of consumption."
The system chosen for support of agriculture—I am not referring to the many forms of subsidy and grant for this, that and the other, but the general system of support in the matter of prices so that the farmer may be insulated from catastrophic drops in price—is the deficiency payment; and that provides for the farmer what the State determines annually shall be his fair remuneration. That having been decided, he gets it, whatever the fall in price is from outside. A large proportion of imports come in at prices which, from a year or two after this Act was passed, have been below prices which are considered remunerative. I will not attempt to suggest or discuss whether they are dumped prices or whether they are due to some kind of subvention in which we have heard every Government indulges, in some form or another. It is a tangled story. All I am trying to emphasise is that the Act represents as of interest to the British consumer that he should have cheap food.
And the extraordinary thing is, especially after two debates in this House on the economics of want, in which I have taken part, that there should be what the

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noble Lord, Lord Williams of Barnburgh, described as "alarm and despondency" at events which make the price of meat 25 per cent. lower than it has been for some time. Why speak no longer of advantage to the consumer? Surely that was the whole purpose of the Act. If the advantage to the consumer is being swallowed up by intermediaries, why has it taken sixteen years to find it out? If it has only just been found out and we are focusing our attention upon that point, surely that is the point where the pinch should be alleviated by attending to those who swallow up on its way what should go to the consumer.
I do not know enough to recommend one system rather than another. All I do point out is this: that the deficiency payment is something which is supposed to be of great advantage to the consumer. Why is there a public outcry however low the price goes? The idea was that whatever was the cost to the taxpayer would occur under the progressive system of taxation which is ours, and that the consumer would be insulated from the regressive aspects of a tax on food. That was the principle as everybody understood it. It may be a wrong principle. But what I feel nobody has done to convince any thinking person in this debate to-day is to explain why there is such widespread dissatisfaction at cheap food, which was the whole object of this scheme.
However, may I leave all that aside and say I am not committed to one way rather than another. But I have heard with dismay one noble Lord talking lightly, as the economists do, about letting agricultural land go back out of production. Our agriculture seems to me to have developed in two ways: there is the intensive side and the traditional side. I personally would not argue that the intensive side—much of it—is a way of life. The creatures, or some of them, do not see the brown earth or the green grass, and some never see the light of day. It is a matter of concrete and steel, machinery, electricity and so forth. In conversation with the noble Earl, Lord Ferrers, I agreed with him that it was a natural, logical development. But it is not a way of life. It is investment. It is just as much entitled to this pledge under the Agriculture Act as anything else—
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"adequate return on capital invested in the industry".
I am more concerned with aspects of agriculture which are a way of life. I see people emerging from the agricultural squalor of generations. They still have a long way to go. There are all sorts of things wrong with the structure of the land, the layout of their houses, the way in which their women, their wives and daughters, have to work. And we are not out yet. I have only one thing to ask. Whatever system is adopted—and one feels in the air that a change is coming, a belief that has been more or less endorsed on both sides—I would ask everyone concerned with laying down what is to be the next system, to attend to the final words which I have already quoted from section 1 (1):
"proper remuneration and living conditions for farmers and workers in agriculture, and an adequate return on capital … "
Let all that be considered at the level we have reached, and for Heaven's sake ! do not let us have to go into reverse and put ourselves out of cultivation. That is all I wish to suggest.
6.52 p.m.
LORD ALLERTON: My Lords, when the Annual Price Review is published opinions are always divided, and in some cases are sharply divided, between those who think that the farmers have had too much, those who think that they have had too little, and also those who think that the Price Review is just about right. I believe that this year—I emphasise, this year—the Price Review is about right, and I hope and believe that that is the view of the majority of the people of this country. To those who consider that farmers have had too much, I would stress the enormous contribution which agriculture makes to industry and to urban life. This is in addition to its primary function of producing food. For example, agriculture supplies £600 million worth of raw material to industry for processing and manufacturing. Farm machinery, on the foundation of a home market of £73 million, has become our fourth largest exporting industry, with exports worth £128 million. In addition, farmers spend £600 million on seeds and fertilisers. Their bill for oil is enormous. Nor does transport fail to benefit. I trust that those figures will convince those who regard the cost of agricultural support as being

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too high, that agriculture makes tremendous contributions to our economy while, at the same time, producing our food. Indeed, one may say that money spent in supporting agriculture is certainly indirectly also supporting industry.
To those who think that the cost of agricultural support is not high enough, I would say that farmers have got as much as they can reasonably expect, and that it is possible that those taxpayers would welcome a reduction in taxation, which should be possible were the support costs of agriculture not so high as they are at present. My noble friend Lord Ferrers put so ably and so clearly the case for the Price Review's being about right that it would be presumptuous of me to go into that side of the argument any further.
As usual, I greatly enjoyed the speech of the noble Lord, Lord Williams of Barnburgh, and, as usual, I am unable to agree with quite all of it. There are but few who would begrudge farmers adequate financial support, especially in view of what the right honourable gentleman the Minister of Agriculture recently described as the high degree of human endeavour and ingenuity which they showed in getting supplies of food off the land during the recent dreadful winter. We should all be most grateful to those who work on the land. But many people will agree that the cost of support is now high enough, even if it is not too high.
This Price Review is virtually the same as before. The changes are not drastic, and such reductions as this Price Review imposes should not hurt much. For example, the ploughing up subsidy has been reduced from £7 per acre to £5 per acre. In my view, this is still generous. By now, most old grass which should have been ploughed has been ploughed, and to get £5 an acre for ploughing up worn out leys which would have to be ploughed in any case in the ordinary course of farming practice and good husbandry, seems to me to be generous. This reduction is surely compensated by the new grants for grassland renovation and the production of winter keep. It must be remembered that the cost of guarantees has risen by about £100 million in three years; in fact, they are now running at about £1 million a day. Such a rate of increase cannot continue indefinitely; nor does it tend to improve the public relations of the farmers. But, as I read
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the Price Review, it seems to pave the way for discussion with the National Farmers' Union, the Commonwealth and other food suppliers, which may tend to less open-ended, and therefore less vulnerable, systems of support.
There is evidence already of new thinking on longer-term policy in this Price Review. The more flexible use of guaranteed prices for pigs and eggs seems to me to be indicative; but if the cost of support is to be kept at a level which is economically acceptable, some rise in food prices would seem to be inevitable. Should this happen, it would be compensated by lower costs to the taxpayer—and that really means everybody, because even in the few cases where direct taxation is not paid, practically everybody in this country pays taxes through indirect taxation.
In my view, some form of limitation of imports of foodstuffs may be essential in order to maintain a high selling price for the farmers, for a quite small surplus can break the market. If it does, under our present system the burden is then thrown on to the Exchequer. There are countless difficulties in ensuring against an over-supply of the market through a glut either in home production or in imports. It may be that a switch to the European system, whereby imported food prices are kept high enough to ensure proper rewards to the home farmers, is part of the answer, but the whole thing is so complicated that it can be only part of the answer.
The increase in the imports of Argentine and Yugoslavian beef are a case in point. It seems that they have risen to an extent which has thrown the meat market into chaos. They have risen by approximately 50 per cent. compared with the first quarter of 1962. This has resulted in the weekly guarantees for the four weeks ending March 4 being nearly double those of the corresponding period in 1962. I understand that the Government have approached the Argentine about the need to have regard to our market when planning their meat exports. It would seem that these approaches are not enough and that some more positive form of control may be necessary. The noble Lord, Lord Williams of Barnburgh, referred to the "love letters" to

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the Argentine. It appears that they have been unproductive.
In addition, in my view some form of cereals marketing board may be necessary. At the present time producers of cereals and fatstock are completely insulated from market prices. The Potato Marketing Board has, by and large, worked very well. Although I and many other farmers may dislike controls and resent having to pay £3 an acre for the privilege of growing potatoes, most of us would have to admit that the Potato Marketing Board has worked very well. It may be that a cereals marketing board would work equally well, and that it could be a solution to some of the problems. The problems are complicated by the embarrassing fact that there is likely to be a surplus of food production throughout the Western world for some time to come.
When Europe becomes fully mechanised and generally adopts farming methods which are as efficient and up to date as are our own, it is only reasonable to expect that this overproduction will intensify and the surplus will become more difficult to handle. It is clear, however, that the Government are considering all these problems very carefully, and I have every confidence that some workable plan will be devised, It is a sad thought that there may be a surplus of food in the Western world while so many people in other parts of the world are starving. But this dreadful condition arises from poverty, and it is not economically possible to trade with people who are unable to pay, however desirable it may be from a moral standpoint.
If economies are to be made in the national bill for food support there are not many ways in which they can be made, unless they are further to reduce the flow of farm incomes. However, some farmers feel—and, in my opinion, with some justification—that the difference between the prices at which they sell and the retail prices is too great. This is a situation which should be watched carefully but a situation against which it is difficult to legislate. It could even be that some economies could be made within the Ministry of Agriculture itself. However, even if
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some reduction were made in this direction, it could not amount to very much against a total expenditure of £364 million. On the other hand, few private businesses would send out two copies of the same circular, one for retention and one for transmission to the Ministry, in separate envelopes. I refer to the Agricultural census for March 4, 1963, which reached me in this way. The Ministry may not pay postage, but they do have to pay for the envelopes and for the staff who put them into the envelopes. This would not seem to be a very good example of business efficiency, nor a very good example to the farmer.
I have both heard and read complaints that increased farm efficiency is not getting its proper reward in this Price Review, and that too little is being done to compensate for higher costs. That costs are higher I am well aware, especially those relating to labour. And it must be remembered that very few agricultural workers get paid the minimum wage. But much of this increased efficiency and higher output stems from generous Government help in recent years in regard to grants for farm improvements, land drainage, et cetera. These schemes have been very considerable and have done much to increase output and to reduce costs. Admittedly, the Government have only borne part of the cost of these improvements, but, for once, even the Inland Revenue are helpful in their approach to this form of expenditure and a good deal of the cost is recovered by the private individual in this way. Moreover, the capital values of farms have increased and, in my view, the success of these schemes is most satisfactory and reflects great credit on the Government.
The scientists who have produced new and better fertilisers and new and better varieties of seed are also deserving of our thanks. They have done much to increase output, and at no greater cost to the farmer. The new varieties of wheats, which have increased yields so enormously in recent years, do not cost any more to cultivate, nor do they require any more fertiliser. In conclusion, I would suggest that the picture is not quite as black as it is sometimes painted, and that the Government have given agriculture a good deal in the past and are giving agriculture a good deal now. As

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long as we continue to have a Conservative Government, I am sure that agriculture will get a good deal in the future.
7.10 p.m.
VISCOUNT STONEHAVEN: My Lords, I always enjoy a debate initiated by my noble friend, if I may so call him, Lord Williams of Barnburgh. Another accomplishment that lies at his door is that he is the man who has taken agriculture out of Party politics. If that is possible, I think he has done it, and if it gets back again it will have nothing to do with him. It is much too late to-night to get involved in details of the Price Review, but I should like to make a few brief remarks in more or less general terms. The first thing is that, whatever are the merits of Her Majesty's Government's pronouncements, the fact remains that the Council of the Scottish National Farmers' Union passed very recently a vote of no confidence in the Government's agricultural policy. That is not a light-hearted body, and they do not do these things unless they think, rightly or wrongly, that there are certain grounds for disquiet. Without placing any more emphasis on it than that, I wanted to mention that fact. Basically, it was probably brought about by the dissatisfaction at no action being taken by Her Majesty's Government, after repeated warnings of the effects of uncontrolled imports. Those warnings have been completely ineffective. They have been warned by the unions, they have been warned by everybody; and everybody agrees that agricultural support costs must be kept down.
What we agriculturists complain about is the apparent gross inefficiency on the part of Her Majesty's Government in administering these supports. We all know that the slice of the cake is limited, but we want it to be administered where it does the most good to those who desire it. You cannot really blame the farmers for taking this view—and I am not talking about the farmers in Rolls Royces and so on; I am talking about the kind of farmer I know well in my own district, the small upland farmer who has a pretty tough time, not only in bad weather but normally. He looks around and he sees doctors getting a 14 per cent. rise, he sees his own farm servants getting roughly an average rise of 5 per cent. every year, he sees the teachers getting a rise, and he sees coal-
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miners getting a rise. You cannot blame him if he says, "What about me? And what about the 1947 and 1957 Acts?" Apart from the letter of the law, are Her Majesty's Government carrying out the spirit of the law with fair remuneration for capital and work? That, I think, is the real antipathy this time against the Price Review. I know that there are great difficulties for Her Majesty's Government, but it is wrong just to say that there is nothing you can do about them.
One of the big troubles is the necessity of averaging. An average obscures just about as much as it reveals. The size of farm is one of the difficulties. You get whole areas, certainly in Scotland, where the size of farms is, relatively speaking, very small; there are awkward sizes, and so on. That causes very great discontent, in spite of the generosity of the Government. And they are generous; I am not trying to say they are not. The support is generous, but, as it is based on an overall average, those with small units for which the average is made up really feel the pinch. I have often said that I would consider much more favourably some kind of differential subsidy, rather than an average subsidy, it being taken back in surtax payments from the man who does not need it. That is one of the big difficulties, and I think some attention will have to be given to that.
Another difficulty in the upland rearing areas—as was mentioned by the noble Lady who has now gone—is that mechanical efficiency and capital investment are not applicable to that type of farm and to that production. The noble Lady remarked that biological efficiency was between the beasts—she did not use those words, but she implied that fact. She is not quite right there. The scientists are doing a lot of work on "twinning", and there is also a great deal of work proceeding on nutrition, which increases the output of your land, if you are lucky with your weather. So it is not absolutely true to say that the upland farms get no increased efficiency. They get a very small proportion of it, but a great deal lies in the future and not in the present day.
The size of the farm is not a complete criterion; it is only part of the problem. If the farm is of such a size that it requires a man-and-a-half to work it fully,

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you are in a very difficult position in some of these remoter places where you cannot get casual labour. Either you must employ two, which is inefficient, or you have to employ one, the farmer himself. He works very hard indeed and he cannot fully get the benefits out of his farm, because it is not the right sort of unit size. What happens then, if he is wise, is that he is advised, and if it works out at a one-and-a-half-man farm he balances up his grazing, balances up the amount of fodder crops and winter keep he can produce, and produces all the beasts he can on that farm. He is left with a balance of, say, a hundred man days or so to fill in.
There is no more food on that farm so he turns to pigs and poultry, although very little of their food is produced on the farm. That balances out the time, and can balance an awkwardly shaped farm and produce an efficient answer. But the efficient answer depends on increasing the number of pigs going to market, which is happening. Then along comes a Price Review which says that he is producing too many pigs, and it cuts down the price. As a result, there is very great difficulty because, in order to make these units more viable, that is about the only thing he can do. But if he does it, then he is upsetting the pig market. That is the sort of detail which is difficult.
As regards the controlling of imports, I would suggest that all the statistics collected for the Price Review would give Her Majesty's Government an adequate basis, not on which to control home production in that particular year, but to control the imports, in order to provide a balance with very little variation. All the figures are there, so far as I can see, but the Government do not appear to make any use of them, as I think they might.
At the same time, you can canvass the farmers and say, "Look here, it is all very well this year, but you really must not increase your production any further". That could be done; and it would be fair enough if it were a viable farm. Nothing of this kind is done, however, though I think it should be. Some people talk about increased home production of calves without, it seems, realising that to produce an extra calf takes somewhere between four and five
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years You have first of all to breed a heifer calf; you have to keep that heifer calf until it is two years old and put it to the bull; you have another year before you get a calf; and then, before you sell that calf you have a further year. Facts of this sort make it ridiculous to say that the farmers are pushing this, that or the other on to the market. Only a limited amount of culling is done, where it suits the farmer; and he cannot be blamed for that. It is lack of control in these things, I think, which we are often grumbling about.
I should like here to mention a point on the size of farms, the structure, which is often not mentioned. I am not trying to make a Party point, but the fact is that the landlord and tenant system has resulted in a large number of painless amalgamations of unviable holdings into viable holdings—for instance, when the tenant has given up as an old man, or for other reasons of that sort. I do not deny that there have been some unpleasant evictions, and cases of that sort, but the number has been very limited. On the whole, the landlord and tenant system has resulted in a far better structure in agriculture than has been produced anywhere else by any other system. It is a point which is very seldom made, and I think landlords should be given a little credit for that.
The actual size of a farm, I suggest, should be related to the basic income which it can produce, and not to its physical size. All types of farming are tabulated by the unions, and also by the Government. The different types of farms are tabulated to give a yield of so many pounds per acre, and so on and so forth, ranging from about £2 per acre for a sheep farm and going up to £10 and £12, or figures in that order, for grain and mixed dairy farms. It is quite easy to do a sum to show that if a man is to have an income of so many pounds per year he requires so many acres of land, according to the type of farming he is doing. I should have thought that, apart from social considerations, that would be a much better basic way to look at the size of a farm than merely to regard a given number of acres as being a small farm and another number as a large farm. I think that the actual, physical size of the farm has really not much to do with it.

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As regards earlier retirements, I believe that the idea must be carefully considered, and I should like to throw up the following suggestion for the economists to play with. Suppose a retirement grant were made available to an elderly farmer so that he could build a house. Suppose we give that man £1,000 to build a house. The actual cost of building a house, in my part of the world, is of the order of £2,500, or thereabouts. Most farmers have about £1,500 stored by them. Suppose that that house, at the end of 30 years, were to revert to the local authority. The local authority would then get a house after the 30 years, during which time they would be getting their rates, for £1,000, as against the present system of borrowing, money when, from first to last, the average cost of a local authority house is £5,000. What is wrong with that idea? There is a possible way of encouraging the retirement of elderly farmers who at the present time are unable to retire.
If subsidies in general are paid through prices, then the stability of those prices must be controlled: otherwise, we have the fluctuations which we all know only too well. It would be interesting to know the proportion of home-grown grain to imported grain used by the food compounders. Because when a producer sells grain this sort of thing happens—and it actually happened to me. In December, I was offered for a sample of oats 18s. per cwt., a figure which bears no relation, of course, to the controlled price. At the end of January, about six weeks later, for the same sample of oats I was offered by the same merchant 20s., which I accepted. That means that the merchants have a difference, a margin, to play with of between 9s. 6d. and 7s. 6d. per cwt., for reasons quite unconnected with the farmer. That is not price stability, and I do not see how, unless the problem is tackled at the merchants' source, we shall overcome it.
I thought that the speech by the noble Lord, Lord Salter, who is not here now, was most interesting, inasmuch as it showed to what extent a really biased view can go. I had hoped he would be here, because I wanted to say that in front of him; but unfortunately he is not. It is, of course, a very difficult problem, and I would not contend otherwise. Farmers' prices are held down here in aid of cheap food; and, of
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course, this country is able to import food surpluses off the world market. The world prices in such cases are said to hear no relation to the cost of production: these surpluses are said to be sold at about 70 per cent. of the cost of production. Now we are cashing in on that, and good luck to us ! Nevertheless, we should not then turn round and hold that against the farmer. My authority on that is a Frenchman, M. Pisani, who was the French Minister of Agriculture. Of course, I cannot vouch for these figures, but, generally speaking, I think they are not far off the mark.
With reference to the remarks of the noble Lord, Lord Salter, on labour being better employed elsewhere, he should realise—although apparently he did not—that the drift from the land is something of the order of 10,000 a year. That is as fast as the people can be absorbed in industry, and it is being done, so far as I know, without difficulty. The differential between the wages of farm servants (as we call them in Scotland) or agricultural labourers and the wages of industrial workers is now closing very rapidly, and I have a feeling that the drift may not go on quite so fast. And I do not think that that is a bad thing.
The noble Lord made another remark about its being unlikely, or inconceivable, that any war in the future would be a long war. This point is quite invalid. He neglected to state that a nuclear attack could put the home-grown food supply of an entire country out of action for five or six years, which would mean that a neighbouring country which was a little luckier would probably have to support that country with its own food. I think that such facts ought to be rammed down economists' throats.
The feature that I particularly welcome in this Price Review is the reference to the forthcoming discussions on the whole structure of support marketing and so on. That is the really constructive thing in this Review, and I am prepared to swallow the whole of the rest of it. When all is said and done, 11d. per cwt. off the price of grain, when I suffered a 2s. difference on the price purely on the date (though this has nothing to do with the Price Review), is something one can swallow quite easily. I would suggest that the action of the Farmers' Union about this Price

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Review and the scream they put up after the passing of the 1957 Act is completely at variance with their scream about the question of going on to any other form of support in the Common Market. Nevertheless, I would end these remarks by telling the noble Earl, Lord Ferrers that I am reliably informed that the road to Hell is paved with good intentions.
EARL FERRERS: My Lords, might I ask the noble Viscount to expand a little on what he said. By that remark does he mean that I am going to Hell?
VISCOUNT STONEHAVEN: No, my Lords: I think perhaps I was introducing a slightly Party angle, and I had suggested that this Price Review indicates, not very urgently, that there may be an Election.
7.30 p.m.
LORD WALSTON: My Lords, I do not wish to enter into any discussion between noble Lords on the opposite side as to the intentions of the noble Earl, good or bad, or as to whether he is heading towards Hell or otherwise: in fact, I do not know where Hell is or if it exists. But that a more philosophical argument than we should be entering into at this late hour. The noble Earl, Lord Ferrers, in his very orthodox speech, mentioned that on this occasion my noble friend Lord Williams of Barnburgh had not tabled a Motion specifically concerning the Price Review but that the wording actually was "to call attention to the state of agriculture". I can assure the noble Earl (and I have no fear of contradiction from my noble friend behind me) that this cannot, and must not, be taken in any way as being an implicit and complete acceptance or approval of the Price Review. What my noble friend wished to do, as has been amply proved by his interesting speech, is to say that agriculture certainly is in a state. What he also wished to do was to make it clear to your Lordships that we cannot discuss the Price Review in isolation from the general state of agriculture and the general agricultural policy. It is all part of the one thing.
Extending from that, I would endorse the remarks of the noble Lord, Lord Henley, that we cannot discuss United
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Kingdom agriculture isolated from world agriculture. It has been made abundantly clear by the speeches of noble Lords throughout this interesting debate that what happens in this country is concerned very closely with what happens in other countries, and vice versa. Here, I would take issue with my noble friend Lord Wise on his suggestion that agriculture itself might be having a bad time but the rest of the country could go on being happy and prosperous. In fact, his words were—and I wrote them down—"Others will reap their profits, even though the farmers and farm workers suffer". That, my Lords, I would suggest is quite untrue. The prosperity of this country, in all its phases, is closely tied up with agriculture. We cannot have agriculture which is sinking slowly down into despair and at the same time expect to have the rest of the country prosperous. I hope that the noble Lord, Lord Salter, had he been here, would have agreed with this. In common with other noble Lords I am disappointed he is not here, for there are many things he said with which many of us disagree. But there is one minor point he mentioned and that was the case of the Norfolk farmer and his Rolls Royce. I hold no brief for Norfolk farmers, but no Cambridgeshire farmer has a Rolls Royce.
VISCOUNT STONEHAVEN: My Lords, I am sorry to interrupt, but I think the noble Lord is being a little unjust. It was I who brought in the Rolls Royce farmer. I must take the responsibility for that.
LORD WALSTON: My Lords, that is very generous. Wherever a farmer happens to farm, if he is on a large scale, if he is efficient, why should he not be entitled to an expensive motor car, just as much as a prosperous and successful manufacturer or stockbroker, newspaper proprietor or anybody else? There is an extraordinary idea prevalent among a large part of the non-farming population that, while it is reasonable, right and proper for the industrialists, the bankers and the rest to have outward signs of affluence, as soon as farmers do anything like that there must be something wrong. I am sure that noble Lords who persist to the end of this debate will need no persuading on this, but, I hope that other

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noble Lords, not so directly concerned with agriculture, will take that point.
This debate, up to a point, has been to my mind a somewhat gloomy one: there has been an air of depression hanging over it. The same depression is pervading the whole of agriculture, and I believe that it is doing agriculture harm. The noble Earl, Lord Bathurst, was an exception. His admirable speech consoles us for the fact that he is no longer on the Front Bench. He can speak from his present position with much independence and authority. He spoke of the good job that farmers do, and in my view people do not speak sufficiently about that. I do not think that people in this country, in or out of agriculture, have a full realisation of what farmers have achieved. It is time that some of us, farmers or not, should speak up for farming and farm workers.
Just let me give a few figures to bear this out. I was lunching to-day with an American friend of mine, a farmer from Missouri. I asked him the price of wheat at the moment on his farm near Kansas City. He said that it was 2 dollars 22 cents per bushel. If my mathematics are correct, that means he is getting 28s. 6d. per cwt. for his wheat. Efficient American farmers are always held up to us as models of what we should be. What is our price in the Price Review? It is 26s. 11. In other words, the British farmer to-day is receiving less for his wheat than this highly-efficient, highly-mechanised and modernised American farmer, and we ought to be proud of it and realise it. Other people should realise it, too.
Then there is the question of sugar. I asked the noble Lord who is to reply to-day the price of sugar from homegrown sugar beet. He thought that there was a catch in the question, but I simply wanted to know the answer. And I wanted other noble Lords to know the answer. The answer was that sugar today is £53 9s. 2d. The price of sugar on the world market to-day is just over £62, admittedly an exceptional price, a higher price than there has been for a long time. But the fact remains that the cost of sugar from home-grown sugar beet to the British housewife is lower than what it would be if she had to rely on buying her sugar on the world market at to-day's
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prices. That is another fact which should be remembered.
Then let us look at barley. The noble Earl, Lord Ferrers, said that we have now reached self-sufficiency in barley and he implied that, as a result of that, we should call a halt in our barley expansion. Why should we? Why should we not export? We are exporting barley. East Anglian barley leaves King's Lynn, Lowestoft and Yarmouth for Europe. We can export. We should not have this inferiority complex, feeling that the Continentals and the Americans are always better than we are. We can beat them without subsidies and we can export to the Continent at lower prices, so that buyers are willing to buy.
Let us have a look at agriculture in comparison with other industries. How efficient are we? There is a lot of talk about the efficiency of agriculture. There are so many definitions of efficiency. I would suggest a fairly simple definition, one possibly not satisfactory to economists but I think a practical one from the paint of view of ordinary people. I suggest to you that an efficient industry is one which can deliver the goods at a constant price, or, if possible, at a decreasing price and which, at the same time, is able to pay every-increasing wages to the people who work in it, because that is the way of raising the standard of living. If we accept that as a definition of efficiency, from a social point of view, it is interesting to see how industries have fared over the last five years.
If we look at railways—rather topical at the present time—we see that in the last five years railway wages have risen by some 20 per cent. and railway fares by some 41 per cent. In other words, the ratio between the two shows that, by our definition, their efficiency has declined by 17 per cent. In the building industry, wages have gone up by 22 per cent., building costs have gone up by 40 per cent.: a decline in efficiency of over 14 per cent. In the baking industry, wages have gone up 17½ per cent., retail prices by 26 per cent.: a decline of 7 per cent. In electricity, wages have gone up 18½ per cent., retail prices by 25 per cent.: a decline of 5½ per cent. All these important industries have had to pass on, not only the whole of their wages increases to the consumer, but more.

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Now let us look at some industries which have increased their efficiency. In motor vehicles, wages have gone up 15 per cent., prices by only 6 per cent. They have absorbed some of their increased cost and increased their efficiency by 8 per cent. In the furniture industry, the figures are just about the same. I have selected these figures from the official statistics as the easy ones to take out, more or less as a random sample. In the men's clothing industry, wages have gone up 20 per cent., retail prices by only 8 per cent.: an increase of efficiency of 9½per cent.
Then we find that in agriculture wages have gone up 25 per cent., a higher increase in the last five years than in any other industry, and prices have not gone up at all, but down by 8 per cent. In other words, agriculture is the only industry where not only has the entire cost of wages not been passed on to the consumer but the consumer has actually got the product at a lower price. I think that this is something of great importance which the world should know, and of which everybody who is engaged in the agricultural industry should be extremely proud.
Why has this happened? I believe it has happened because of the foundations laid by my noble friend Lord Williams of Barnburgh in his Agriculture Act, because the security of guaranteed markets and prices has given the farmers an opportunity to get on and do their job. But I am afraid it cannot continue. We cannot look forward to that sort of future for the industry, with things going as they are at the present time. As we know, the present bastard system of the 1947 Agriculture Act has resulted in the cost to the taxpayers going up £350 million, food prices going up to the consumer and farm profits coming down.
There are many figures to prove this. In the Farmers Weekly last week, Mr. George Houston, a lecturer in economics at Glasgow, gave some interesting figures. For the 1956 to 1961 period, he gave for agricultural productivity, as he described it, an increase of 30 per cent., for agricultural prices a decline of 5 per cent.; for agricultural net income a decline of 5 per cent.; while the retail food price index went up 7 per cent. Only this morning I received from the Department of Agricultural Economics at Nottingham Uni-
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versity interesting but disturbing figures, disturbing in that they confirmed what I already know. They are in graph form, showing the various costs of agricultural production and output, net farm income and what they describe as management and investment income. Over the past ten years, the period they take, the graph rises steadily for all costs and for output, and falls steadily for net farm income and management and investment income. Just to take two examples from their sample of farms in their area, in the ten years' period, gross output of arable farms increased 4 per cent., while net farm income went down by 12 per cent.; gross income of livestock farms went up 7½ per cent., net farm income went down 20 per cent.
This emphasises the point that the noble Baroness, Lady Elliot of Harwood, made in her admirable speech. I should like to say how glad I was that she paid tribute to the work of her stockmen through this difficult weather. Not only the shepherds of Scotland but also the stockmen of our more pampered dairy cattle in the South and East of England, as I know personally, have had a difficult time. These figures are completely in accord with the official figures in the White Paper, Appendix II, page 14, to which my noble friend Lord Williams of Barnburgh has referred. Taking the figures in Table A of farming net income, comparing 1952–53 with 1962–63, we see that the actual rise in pounds sterling over that ten year period is one of 15 per cent., but during that same period the purchasing power of the pound has dropped by 30 per cent. In other words, whether we look at the Government White Paper, at the figures prepared by agricultural economists in different parts of the country or at the farming Press, or simply take our own experience in our own countryside, we come to exactly the same result: the farming industry to-day is steadily and very surely having its profits decreased, and the actual amount of spending power and the standard of life of the people engaged in it is becoming smaller, hand in hand with a rise in output.
What do we need now in order to put this problem right?—because we must put it right, for the sake of the country, as well as the agricultural industry, the farmers and the farm workers. We certainly do not need any more pious hopes or any more talk

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about the need for a healthy and well-balanced agriculture, and the rest. You cannot perform with words, and you cannot perform with hopes. What we need is a very clear, objective, honest and courageous re-thinking of the whole problem. We have many things to go on, and a lot of past experience. The needs that were there in 1947 are still here to-day.
We must (and I think even the noble Lord, Lord Salter, would agree with this) have an agriculture which recognises that it has only one duty, and that is to provide the people of this country with the cheapest food that they can get, and not to expect prior claim on the market for more expensive food. Agriculture, in other words, must serve the economic needs of the country and not be put in a glass case and kept alive artificially because it happens to be our oldest industry, or for any other reason. We must be able to produce competitively. When noble Lords ask, and many of them have, what share our home agriculture should have of the home market, that, surely, is the answer. Its share must be that amount of food it can produce competitively; and it is the job of the Government, whatever Government we have, to do what they can to see that British agriculture can produce competitively. I hope that the figures I have already given make it clear that the farmers and farm workers of this country can, given the right circumstances, do just that.
In order to do that—and we need not waste much time on this point—what we need are guaranteed markets and guaranteed prices, as my noble friend has so often told us; and we need, also, some form of regulation of imports. That is perhaps the most difficult thing. How can we achieve this? Here I would say to my noble friend Lord Sainsbury that we are not confronted solely with the choice between a support price system or a deficiency payments system. I believe that we have one more course open to us. Perhaps I may at this stage make one comment on Lord Sainsbury's interesting and well-informed speech—and it was most valuable for us to have the view of somebody with his experience in the retail trade, instead of having simply the views of people directly con-
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cerned with production. While I would certainly agree with him that we cannot, and should not, make the middlemen the scapegoats of the present situation, the figures he quoted from Mr. Allen, of Oxford, did not seem to me quite so favourable to the middleman as I think my noble friend thought they were. My recollection is that Mr. Allen said that the total amount of extra deficiency payments needed for meat during 1961 was £52 million, and that something between £36 million and £48 million found its way back to the producer. The gap between £36 million and £48 million is very wide, and if one takes a halfway figure of £42 million, that still leaves £10 million which did not find its way back to the producer. In other words, it presumably found its way to the one in the middle.
LORD SAINSBURY: My Lords, I think my noble friend means the consumer.
LORD WALSTON: Yes, I do mean the consumer. Therefore, something like 20 per cent. of this extra amount did go to increase the margins of the middleman. That is not as bad as 100 per cent., but I do not think it is an entire whitewashing of the people who come in between the producer and the consumer.
I will leave that and come back to the important point of how we can set about regulating imports and what is the best way to do it. I would strongly support the views which have been expressed in all parts of the House this afternoon: that something in the form of commodity commissions is the right answer. I do not think it would be right to go into any details, because clearly the details of how these things, which are highly technical, should be operated, should be worked out with all the interests concerned—not only the farmers themselves, but the trade, the millers, the butchers, the importers of meat, the importers of feeding-stuffs, and so on—profiting from their experience, but not, while profiting from their experience, allowing ourselves to be overruled by any one-sided interest that may arise.
In operating this system of commodity commissions, I personally (and I speak here purely personally) have a strong preference for a system of long-term contracts. I believe that we should do our best to base the whole of our supply of food for this country, in so far as we can

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do it, on long-term contracts, not only with the home producer but also with the producer overseas. That would in no way run counter to GATT, as the noble Lord, Lord Salter, was questioning. We could undoubtedly offer contracts to our old suppliers on what they have been providing in the past, and if they did not want to enter into the long-term contract business, then we should be open to make the contracts with other people. That would not be, as I understand it, an infringement of GATT.
The benefits would be not only to this country and the farmers of this country, but also to the primary producers throughout the world. In this particular period, when we are so conscious of the Freedom From Hunger Campaign, I do not think we can be blind to the importance of raising the standard of living in so many of the primary producing countries and enabling the people who live there, often in adject poverty and suffering from malnutrition, by the security offered of these long-term contracts, to earn more money and to buy more food. At the same time as doing that noble act we should, as it happens, be benefiting our own industry enormously, because by enabling these people to have a fixed and assured income from the long-term contracts that we should offer them we should be opening up ever-widening markets for our own industry in this country. So the system of commodity commissions, regulating our home purchases and our overseas purchases, coupled with long-term contracts, seems to me to give not only the security and just treatment that the home producer desires and deserves, but also benefit to those abroad and to our own industry at the same time.
I should like to deal briefly with a question which I believe only two noble Lords raised, though I was rather surprised that only two did. I refer to the noble Lord, Lord Dunleath, who made, in my opinion, a most admirable speech setting out the problems of Northern Ireland, but not in any way in a parochial manner, and the noble Viscount, Lord Stonehaven. They both referred to the problem of the small farmer. The noble Lord, Lord Dunleath, said that the situation will solve itself in time—I think those were his words. He also mentioned, significantly and rather sinisterly, I thought, the fact that farmers' sons are
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now leaving many of the farms in Northern Ireland. I am sure that that is true, and it may be one of the reasons for the very high rate of unemployment in Northern Ireland, with young men coming on to the labour market away from the farms and swelling the already oversupplied labour market that exists. He also said that this situation will solve itself in time by means of this sort.
That is perfectly true, but I do not think it is a situation that he can happily allow to solve itself in time, and it is a situation which is not confined to Northern Ireland. The Farmers Weekly had an interesting table of this, headed: "Over 300 Acres—Up; Under 300—Down." If you look a little more carefully, you will see that in the last eleven years there has been a decline of 16 per cent. in the number of farms under 20 acres; of farms of 20 to 50 acres, a decline of 14 per cent.; and of farms of over 1,000 acres, an increase of 46 per cent.
That is a process which is happening, and it is not appropriate at this stage to say whether that is a good state of affairs about which we can be happy, or a bad state of affairs. It is something which economic forces are causing. Ought we, as a nation, ought the Government of this country, to take any steps about it; or ought they to allow it to happen without any action being taken? The present Government take the view that they ought to do something about it. That is why we have so many of these special hill farming schemes, small farmers' schemes, winter keep schemes, and all the rest of it, in a vain attempt to arrest this trend. I, too, think we should not allow it to happen in an entirely free manner, although we must accept that it is an inevitable movement.
There are various things which, I believe, we should do. Some of them have already been done. We should, for instance, so organise our agricultural marketing that the small farmer is at no disadvantage as compared with the large. The Milk Marketing Board has done that in a valuable fashion, and it does not matter whether you are selling 10 or 500 gallons of milk a day, you get the same price for it. In a slightly different manner, the British Sugar Corporation has done it. If you are growing 20 or

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200 acres, you get the same price. But if you come to the other commodities, particularly meat, cereals and potatoes, the small farmer is at a great disadvantage. I know perfectly well in my own case that as a large grower of barley I can invariably get a higher price for my barley than my smaller neighbours can, even though my barley is no better. In order to put that right we need more marketing boards, cereal marketing boards, and so on. We should assist and encourage co-operative efforts, and the Government are doing that to a certain extent. As your Lordships will remember from the debate we had the other day on the Agriculture (Miscellaneous Provisions) Bill, there was a clause dealing specifically with that.
It is only a minor point, but I should like to return to the suggestion made by the noble Duke, the Duke of Atholl, which was turned clown, in spite of my support, by the noble Lord, Lord St. Oswald, who is to reply. It was the suggestion that the grants for buildings should be extended from the housing of machinery to the housing of livestock. I do not think I am misrepresenting the noble Lord—I certainly do not wish to do so—but I believe he said that this was not to be done because there was no demand for it, the case has not arisen, but, of course, if somebody asked for it it might be considered at some stage. I will quote to the noble Lord, and to your Lordships, an article in the Farmer and Stockbreeder of March 18, headed, "Cowtels"—I do riot know what the noble Lord, Lord Conesford, would say to such a word if lie were here. The article says:
"Cowtels—a co-operative set of buildings for two or three farmers to house, milk and feed dairy cows—are one possible way of reducing overhead costs in milk production in West Wales. This was suggested by Mr. Philip Peachey, N.A.A.S., senior district advisory officer, at Narberth, Pembrokeshire, during a series of meetings on 'Cashing in on costs'.
"Such units, he said, had existed in Sweden and in America since 1944."
The Ministry of Agriculture employ admirable, far-sighted, wide-thinking advisory officers, but I wish they and the Minister would listen to some of their officers, even if they do not listen to noble Lords in this Chamber, and not say, "We will do nothing about it because nobody wants it". After all, it has been going
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on for nearly twenty years in America, and we should not be all that far behind. That is one way.
But I think that most important of all is some scheme on the lines which the noble Viscount, Lord Stonehaven, outlined, for a form of pensions for farmers who are thinking of retiring, a purely voluntary scheme. There is no suggestion that farmers should be told, "You are too old. Get out". But if any of them think, with the schemes which are going on and the difficulty of keeping up to date, "It would be nice to get out, but I cannot afford it", then I believe the Government should come in and make it possible, by some form of scheme such as the noble Viscount outlined, for them to retire and let their farms he either taken over by young people or amalgamated into larger holdings. It is too late to develop that theme, and I apologise for having detained your Lordships so long.
I would say only this. If the Government had a policy for agriculture, one could truthfully say that that policy was in ruins. But they have no policy. It is thanks only to the farmers and to farm workers that agriculture to-day is not in ruins. But it is fast losing the post-war gloss, and only the efforts of all those engaged in it can preserve it, as they have hitherto preserved it fairly successfully, from the big axes of the Government demolition squad.
8.7 p.m.
LORD ST. OSWALD: My Lords, I have enjoyed this debate, as I should expect to enjoy any debate opened by the noble Lord, Lord Williams of Barn-burgh, and wound up for the Opposition by the noble Lord, Lord Walston. I should have enjoyed it a little more if the noble Lord, Lord Walston, had trotted out his hobby cow, as he normally does on every occasion. When he mentioned cowtels, I was quite sure he was going to put his hobby cow in them. However, the noble Lord enjoyed the debate less than I: he found an air of depression hanging over it, which was quite impalpable to me. Noble Lords opposite may have been depressed by the lack of any real rods with which to beat the Government. Imagined rods cause little pain, and the rods they were able to find were in their own imaginations.

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The noble Lord, Lord Walston, drew attention to the efficiency of British farming, and that is something in which we all take a pride, whatever our connection with agriculture. He asked specifically why we had to restrict barley growing, instead of exporting barley. As he and I are well, aware, had the Common Market negotiations gone otherwise there would have been a considerable opening there. He said that we exported some. I wish that it were more. My own information is that it is of the order of 250,000 tons of malting barley, possibly some of it the noble Lord's. We should be delighted if more of it could find a market abroad. In the meantime, our aim in reducing the guaranteed prices for wheat and barley has been to check the remarkable expansion of production of these commodities which, if it were to continue as at present, could only serve, as the noble Lord will agree, to depress the market.
The noble Lord commented on my noble friend's statement that we are already largely self-sufficient in barley. Indeed, our exports of barley are at present of about the same order as our imports. As for wheat, a lame part of our crop now has to be used for feed. The millers and compounders have accepted the need to use as large a proportion as possible of home-grown wheat and barley, but there are certain limitations. Most of the wheat produced in this country is of the soft variety, but the millers prefer to make the sort of loaf which can only be made with a high proportion of hard wheat in the grist.
LORD WALSTON: May I interrupt the noble Lord? I wonder whether he meant what he said? I hope he did. He said that the millers prefer to make bread out of hard grain. Is it simply a preference on the part of the millers—because that could easily be overcome—or is there a more serious reason?
LORD ST. OSWALD: My information is that they assess the market as preferring the type of bread which is made with a larger proportion of hard wheat flour than soft wheat flour. As regards barley, this is to some extent interchangeable with maize, but there are limits to the degree to which one grain can be substituted for another in a balanced ration.
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The noble Lord, Lord Walston, also mentioned in a critical tone the middleman. Certainly our distributive system has its imperfections, but they have not been created by our present system of farm support. No distributive system is perfect, either in this country or elsewhere, and we are anxious to secure any practical improvements we can. The butchers are, of course, the easiest target because of their practice of averaging prices, but the Committee of Inquiry under Sir Reginald Verdon-Smith is making a thorough investigation into fat-stock and carcase meat marketings and distributions, and they will be reporting whether changes are desirable. While our distributive system is not perfect, I see no sign that its efficiency has declined. In many respects it has visibly improved and there is enough competition to prevent anything like profiteering. Of course, it is up to the housewife to see that the shop which offers the most competitive prices is the one which gets her custom.
My Lords, I wonder whether the House will allow me to say why this is a somewhat poignant political moment for me. Some years ago, when I was beginning to feel my way delicately into political life, I made what must have been my first speech in public. It was made to the Barnsley Branch of the National Farmers' Union, and the other speaker, the principal speaker, was Mr. Tom Williams, the former Minister of Agriculture. Little did it occur to me then—in fact, it did not enter my head at all—that one day I should be debating with him from one Dispatch Box to another, across one of the Houses of Parliament. I might say that it was about the first thing that did occur to me on July 16 of last year, when I was appointed to my present post. The sense of privilege which I felt then, and feel now, will not, I know, be dimmed by the passage of years.
However, to-day is one of the happily rare occasions when I have to regard the noble Lord, for a space of hours, first as an opponent and only secondly as a neighbour. That exercise requires something of an effort, because the closer men live to the noble Lord, the greater and warmer their regard for him is apt to be. To live, as I do, in the West Riding of Yorkshire is to share that warmth of

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regard with the noble Lord's other neighbours. At this point, paradox takes over. I am this evening at even closer quarters than when at home, but I hope that the feelings I have described will not dull or adulterate the spirit of my debating; because at the outset it is right for me to tell the noble Lard that I have been surprised by his reception of this Price Review and that I find that reception utterly illogical. My task is to convince the noble Lord of his own illogicality, without embarrassing him too painfully.
The noble Lord, Lord Williams of Barnburgh, has referred, with righteous pride, to the 1947 Act of which he was the author, and by which he will be remembered. But among all the virtues by which that Act will be remembered, perhaps the most characteristic and the most farsighted was that definition of the purpose of the price guarantees, incorporated—one might say enshrined—in Section 1 of the Act:
" … to promote and maintain a stable and efficient agricultural industry capable of producing such parts of the nation's food and other agricultural produce as in the national interest it is desirable to produce …"—
and I stress the last words.
I must confess that I was greatly surprised at the dissatisfaction which emerged in the speech of the noble Lord, Lord Williams of Barnburgh, on this year's determinations. I had hoped that he would be commending this year's awards to your Lordships, because the central purpose of the Review determinations this year has been the effective carrying out of the principles which I have just cited—in fact he made one or two remarks which I thought might be a preface to such approval. He said that means must be found to avoid gluts as well as scarcity. He also said that it is inevitable that the more farmers produce of certain commodities, the less they will get. Those are two of the facts of agricultural life to-day which this Review has taken into account. But, having recognised and advertised them, the noble Lord then went on to attack the means that we have taken of dealing with them.
LORD WILLIAMS OF BARNBURGH: My Lords, I think that the noble Lord, quite unintentionally, is misrepresenting what I said. I do not remember having objected or protested against the formula that has been applied, either to eggs or
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to bacon. I said, in fact, that it was almost inevitable.
LORD ST. OSWALD: But the noble Lord's general criticism of the Price Review, I thought, embraced virtually the whole approach represented in this Review.
LORD WILLIAMS OF BARNBURGH: My Lords, let me make my position quite clear to the noble Lord, and I promise that I will not intervene again. I said that I was not going to deal in detail with commodities, items, formulæ and what-not, which I would leave to my noble friends, but that I would deal with the wider issue of the long-term view of agriculture. If I did not make myself clear, I apologise to the noble Lord and to the House.
LORD ST. OSWALD: I am sure that the apology is due from me. But the point I was trying to make was that it is the long-term view represented in this Price Review that we think carries forward the foresight involved in his own Price Reviews, and I find it rather hard to understand why he should now have any quarrel with the steps we have taken to gear production to the nation's requirements. This has been the general theme for the Review determinations, and it seems to me very different from the "Stop-Go," "Shilling-on, Shilling-off," rather haphazard methods described by the noble Lord, Lord Wise, behind him. It develops a continuing theme from its predecessors, in the series of Annual Review White Papers.
The guarantee for sugar beet has always been limited to an authorised contract acreage. Some years ago, in 1954, a standard quantity of milk was introduced, and the figures for this year's increase in milk production in relation to the increase in consumption of liquid milk have shown the effectiveness of this earlier innovation. In 1959 the guarantee for potatoes was related to the amount sold for human consumption. The flexible guarantee arrangements for pigs, brought in at the 1961 Review, have had to be tightened this year, and now we have introduced an indicator price for eggs, analogous again to a standard quantity.
To-day, only for cereals and fatstock does the guarantee apply to an unlimited quantity. And with two main

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cereals, wheat and barley, we have had to cut the existing guarantees as a disincentive to over-production. All these measures are designed to bring the production of these commodities into better relationship with consumer requirements.
This was the sort of future necessity, it seems to me, which the noble Lord foresaw; and this is what he now (and I trust that I am not misrepresenting him) appears to me to disregard as being the virtue of this White Papr. His Bill was designed in a time of scarcity but by a man able to prophesy a time of plenty. It seems to me that it is as if Moses, though no longer in office, it is true, having arrived in the Promised Land with his people, though with milk and honey and other agricultural commodities plainly and plentifully in evidence, had then exerted all his immense gifts and prestige to influence and persuade them that they were still in the desert.
In order to convince them that they were still in the desert the noble Lord introduced one or two facts. He said—which is true—that farm incomes have fallen slightly this year. But I do not believe that the assumption he made from this is true: that it is in any way a sign of a reversal of the long-term upward trend. The details of the income calculation show, as my noble friend pointed out at the beginning of this debate, that one of the main elements in this slight decline was a fall in horticultural receipts of about £13 million from the very high figure reached a year ago. Another important element was the heavier consumption of feeding-stuffs. My noble friend has already drawn attention to the fact that this increased use of feeding-stuffs is linked with the higher pig population, which is, in turn, affecting the price of pigs. At the same time we must not forget that the industry's efficiency continues to increase, and that this year's award will leave farmers with a reasonable share of the £25 million which they may expect to gain from increased efficiency on Review commodities.
My noble friends Lord Bathurst and Lord Lytton, and the noble Lord, Lord Wise, all spoke on this subject of efficiency. They spoke first of the great difficulties caused by the weather—for
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which Lord Wise did not blame the Government—and the other factors that farmers have had to overcome.
Despite these factors, the general picture is one of increasing yields, and anyone would wish to pay proper tribute to the farmer's initiative and ingenuity in this achievement. It is always a pleasure to pay tribute to the enterprise, ability and hard work on the part of the farmers and farm workers which makes possible this continuing increase in the industry's efficiency. But, my Lords, there is some satisfaction also in remembering what the Government have done, and are doing, to help farmers to increase their efficiency. Very considerable resources are provided by the Exchequer each year with the direct aim of strengthening the industry's competitive power. In addition to the grants to occupiers which enter into the calculation of the total value of the guarantees, there are also the grants, such as those in the Farm Improvement Scheme, which cover matters that are a landlord's responsibility. As your Lordships' know, the current Agriculture (Miscellaneous Provisions) Bill is adding a further £35 million to the amount available for these capital grants, making a total of £90 million for this Scheme.
The Government also gives farmers free technical advice, through the National Agricultural Advisory Service, the Agricultural Land Service and certain other specialist services dealing with many aspects of farming, ranging from land drainage to animal health. The costs attributable to the advisory work of the National Agricultural Advisory Service and the Agricultural Land Service can broadly be put at about £3 million a year. Many would say that the help they give to increased efficiency is out of all proportion to that cost. This Government contribution towards the industry's efficiency adds even more strength to the case for expecting the industry to use part of the gain from increasing efficiency 'to meet the rise in costs. This is, after all, no more than must be done by other industries. Indeed, every industry which desires to maintain or improve its competitive position must seek to increase its efficiency year by year and to use this increase in part to meet any rise in costs.
The noble Lord, Lord Williams of Barnburgh, said that there had been no

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rise in real incomes between 1948–49 and 1962–63. As he spoke I wondered why he had particularly picked the year 1948–49. I think I know. I have looked up the Review White Paper issued by the noble Lord in 1951, and it describes it as a period when
"…farmers' aggregate incomes … included £40 million per annum injected mainly by additions to farm prices, in order to provide, by a quite exceptional method, a part of the large amount of new capital required in the initial period of agricultural expansion launched in August, 1947."
That White Paper continued:
" … the need for this addition to income to finance capital expenditure is regarded by the Government as having diminished.… The Government therefore concluded that the special capital injection should now be progressively reduced."
Things look different to the noble Lord now.
LORD WILLIAM, OF BARNBURGFI: No. What was meant, surely, by the sentence just quoted was that the £40 million injection year by year should be reduced.
LORD ST. OSWALD: I read it as signifying that the noble Lord thought that the necessary fillip had been given to agriculture and that a fillip of that intensity would become less and less necessary.
My noble friend Lady Elliot of Harwood was grateful for the hill ewe subsidy, but she said how difficult it was to increase efficiency on hill and marginal land. We hope that the winter keep grants included in the Bill at present passing through your Lordships' House will assist in that, and I hope it will also bring some encouragement to my noble friend Lord Stonehaven.
The noble Lord, Lord Williams of Barnburgh, and many others emphasised the pressure of overseas supplies and suggested that the real and serious problem of co-ordinating imports and home production could be solved by setting up commodity commissions. Other noble Lords in other parts of the House, as one would expect, paid great attention and great respect to this suggestion. But he abstained from giving us any indication of how these commissions would work in practice, and when asked by my noble friend Lord Eccles how they would affect the various trade agreements which we have with our overseas suppliers, his
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reply, as I understood it, was that this would be a matter for the Board of Trade.
Great as is the weight of the noble Lord's opinion in all matters concerning agriculture, I should like to see this rather vague suggestion about commodity commissions spelled out in far more specific terms before I or anyone could say how it might affect the real questions which are at issue, questions about the effect of changes in our import arrangements on our trading agreements and other international commitments, on the economic position of our overseas suppliers, on their ability to continue to buy from us, and on our balance of payments position and foreign and Commonwealth relations generally. In our consideration of future policy we shall be approaching these questions without being committed in advance to any doctrinaire solution. I suggest that the prospects of success would be diminished, rather than enhanced, if we were to start with a determination to establish commodity commissions which would be largely irrelevant to the practical and complex issues which lie before us.
The noble Lord, Lord Williams of Barnburgh, and others drew attention, as was expected, to the level of imports of meat and to the effect that they have had in recent weeks on prices. The noble Lords, Lord Henley and Lord Bathurst, also pointed out the difficulties which result in periodic high rates of imports at a time when home production of particular commodities is also at a high level. The noble Lord, Lord Williams of Barnburgh, seemed, I thought, unfairly to imply that the action which the Government were taking would not be of any effect.
In this matter I do not think that can do better than reiterate what my right honourable friend has said this afternoon in another place. It is true that the higher level of beef imports over the last three months has contributed significantly to the present weakness of our meat market. Moreover, the higher level of imported supplies has coincided with a somewhat higher level of home supplies. The Government called the attention of the Argentine Government and the Yugoslav Government, as our principal overseas suppliers of chilled beef, to the situation and urged them in planning their exports to take account of the state of the United Kingdom meat market.
EARL BATHURST: My Lords, with great respect to the noble Lord, what is the use of calling the attention of our Argentine friends and the Yugoslav exporters to our situation? Surely that is putting the cart before the horse. The noble Lord must consider this point of the people who import from such places. Can we not persuade them (the noble Lord, Lord Sainsbury, made the point, and I endeavoured to support it) to bring this meat or feeding-stuffs in at a time when our production is not running at its full extent? The noble Lord has the cart before the horse here, and so has his right honourable friend at the Board of Trade.
LORD ST. OSWALD: My Lords, I was about to explain to my noble friend the point of our action. In fact, if my noble friend is right this horse is pulling the cart quite effectively. Because, so far from putting these business letters, rather than love letters, into the wastepaper basket, as suspected by some noble Lords, both Governments have replied recognising their interest in the stability of our market and indicating their willingness to discuss the problem with us.
The Yugoslavs have informed us that it is not expected that their exports this year will exceed 30,000 tons, as against nearly 40,000 tons in 1962. We have arranged talks with the Argentine Government, the major supplier, about the future levels of their supplies. Clearly, it is in everyone's interest that stability should be restored, and I am confident that we shall receive the full co-operation of our overseas suppliers. But I would make it clear that the Government are determined to bring about arrangements which will ensure reasonable stability in the United Kingdom meat market.
The noble Lord, Lord Williams of Barn-burgh, while not saying that these efforts would be in vain—although I think he said that some of the "love letters" would go into the paper basket—contends that in any case the Government have been dilatory in taking action. When I have told him what I have to say I think he will accept that this criticism is not justified. There was no evidence of any real weakness in the beef market until the middle of January, and representations were made to the Argentine Government on February 1 and to the Yugoslav Government a few days later. We did not receive a reply
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from the Argentine Government until March 14, and from the Yugoslav Government until March 25. But we have now arranged for discussions in Buenos Aires with the Argentine Government to take place next week.
LORD WALSTON: My Lords, may I interrupt to ask the noble Lord this? What form of marketing intelligence do Her Majesty's Government have, for instance, in Argentina?—because it takes quite a long time for meat to cross the Atlantic. Surely, long before the market weakens we ought to have in this country some intelligence that a large consignment of meat, which is going to weaken the market, is about to leave. Is not that the time to take action?
LORD ST. OSWALD: My Lords, if that market intelligence were in fact placed before me, I should be able to tell the noble Lord; but I am afraid that, at the moment, I do not know how far ahead we have this intelligence. The noble Lord, Lord Sainsbury, quoted prices charged in his own chain of retail butchers to refute criticisms which have appeared in the Press that the fall in wholesale prices has not been passed on to the consumer. I can say that my Department receives regularly the retail price lists of a number of leading firms of multiple butchers which confirm that substantial reductions in beef prices have been made since the beginning of the year. In addition, I have been told by the National Federation of Meat Traders' Associations what returns from a selected sample of their members show the average reductions in the price of home-killed beef to be since the end of January. I do not think that at this hour your Lordships would wish me to read out a list, but the reductions are quite noticeable.
I think that nobody has mentioned milk. I am surprised that nobody has paid any attention to that. At this late hour I do not think I should be thanked for introducing or developing that theme. My noble friend Lord Dunleath asked me about separate stabilisers for pigs. This is a matter of such infinite complexity that, again at this hour, I hesitate to attempt to outline it, still less to satisfy him. But what I will say, as briefly as possible, is that they were introduced in conditions very different from those of to-day and when pig numbers were much lower. They are giving rise to serious

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inequalities and are distorting the market, too. Pigs sold grade and deadweight to bacon factories have, generally speaking, benefited from upward stabilising adjustments, whereas pigs sold for pork and manufacture have suffered downward stabilising. But pigs which have had upward stabilisers need not necessarily be made into bacon; the factories may resell them in competition with pork and other pigs which have not had the same subsidy advantage, and which may actually have suffered a downward adjustment. This must inevitably lead to market distortions. It puts a brake on the efficiency of the industry generally, and the pork side of it is put at a particular disadvantage.
For these reasons we have decided that we cannot continue the stabilisers indefinitely. But we are not abolishing them all at once. The widening of the stabilising bands by Is. is a half-way stage. We have said that we are prepared to consider whether some alternative arrangements, not possessing the existing disadvantages of the stabilisers, are necessary in the interests of bacon pig producers. My noble friend's words will be carefully read, as they have been carefully listened to, and I will write to him to keep him in touch with our thinking on the subject.
Almost every noble Lord who has spoken has made reference to the share of the market which is properly due to domestic producers and Commonwealth and foreign suppliers. Many of them have referred to the need for a regulation of imports. My noble friend Lord Stone-haven welcomed the talks that are going to take place. The nature and scope of these discussions on future agricultural policy have to be seen in the right perspective. There is no question of scrapping our present system of support. Our system is basically still the right one, and it suits us well. The noble Lord, Lord Sainsbury, said that what we need to do now is to modify it to meet the changed circumstances of to-day. We have seen how the erratic marketing of supplies can depress market prices and lead to a heavy increase in the sums to be paid out from the Exchequer by way of deficiency payments.
What we have to do is to adapt our present arrangements so that pressure of supplies from home or overseas sources
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is not such as to undermine our market. This will involve discussions over the coming months with our Commonwealth and other overseas suppliers, as well as with the leaders of the farming industry. As this process of consultation will be a continuing one, there will be no specific timetable and we do not envisage any formal statements of the positions reached until the Government are able to announce their decisions and the results of the consultations as a whole.
My Lords, I have taken longer than I intended but may I say, in closing, that, as a member of the Government and as a countryman, I should like to echo the words of my noble friend Lord Amherst of Hackney: that a prosperous agriculture is an essential part of a prosperous country, and certainly of this country. For the reasons given by him, by Lord Allerton and others, it is that prosperity which this Government are determined to maintain.
8.40 p.m.
LORD WILLIAMS OF BARNBURGH: My Lords, I should like to express my profound thanks to all those noble Lords who have taken part in this debate. I never expected, of course, that every noble Lord would agree with everything I said. I should particularly like to express my thanks to the noble Lord who has just wound up by making a fairly effective reply to a speech I did not make. The figures to which he referred I have mentioned in two or three different debates, in which I have said that all the signs are that this Government, as were their predecessors, are aiming at holding the value of the agricultural community's net income to the 1948–49 level. Well, I challenged them on that two or three times previously, and I repeated that challenge again to-day. The noble Lord has not told me whether my figures were correct or incorrect. I will repeat them. I do not ask for a reply to-night. In 1948–49 the net income was £297½ million; in 1962–63 it was estimated at £408 million. But as the pound of to-day compared with that of 1951 is worth only 14s., then that £408 million is worth only £284 million, based on 1951 values. Can the noble Lord answer that right away? Am I wrong or am I right?
LORD ST. OSWALD: The answer is not in my head.
LORD WILLIAMS OF BARNBURGH: Well, it is in mine. I would rather have a negative answer of that description than no answer at all.
The noble Lord referred to the intervention of the noble Lord, Lord Eccles. I said then that I was astonished that he should put such a question. Everybody knows that if a commodity commission were set up to help the Board of Trade in regulating imports after rationalising and modernising our trade relations in the light of the 1963 situation, then clearly they must work in close harmony with the Board of Trade who, with the Ministry of Agriculture, would set up any such commission. However, if the noble Lord or his Department really require information on what is meant by a commodity commission, I would recommend them to read the Lucas Report, since it was a recommendation they themselves made after having outlined the whole situation.
I do not propose to delay noble Lords further. I am thankful, however, that we have had a reasonable debate, and if the Government feel happy because of the Argentine or Yugoslavia reply on March 14 to a letter sent, I think the noble Lord said, in January, while prices are slipping and deficiency payments are increasing, I can only say that there seems to me far too much satisfaction in that sort of thing.
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If this were the first time we had had this influx of large quantities and a depression of prices and outsize Supplementary Estimates, the noble Lord would be perfectly right, but it happened last year, and there is a repetition of it this year. It could go on "for ever and ever, amen", unless some means were found of smoothing it out. The basis of my suggestion is that we should avoid these periodic collapses and crises. Even if the present Government stayed in office for ever, I should still like to see them ironed out.
I think I have made the best suggestion that could be made, However, I am delighted with the debate, and I hope that some other noble Lords will take over from us very shortly, so that the advice can be continued. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

SHELL CHEMICALS DISTRIBUTING COMPANY OF EGYPT BILL
Reported, without amendment.
House adjourned at sixteen minutes before nine o'clock.